Boosting brand, not profit, main motive of telcos’ World Cup offers

Boosting brand, not profit, main motive of telcos’ World Cup offers
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First Published: Sun, Mar 18 2007. 11 59 PM IST
Updated: Sun, Mar 18 2007. 11 59 PM IST
The country’s mobile phone operators, which together serve 165-million subscribers in a market worth around Rs30,000 crore, have a clutch of value-added offerings for cricket fans—commentary, video replays, expert opinions, ball-by-ball updates and the like—but their initiatives are targeted more at brand-building than revenue generation.
The operators hope to generate Rs50 crore from what they term value-added services (VAS) related to the World Cup, a number that some claim would have been higher but for the timing of the matches (played in the West Indies between 7.30pm and 2am, India time).
The Indian team’s performance could see that number going down further—on Saturday/Sunday India lost its opening tie to less-fancied Bangladesh—but even at Rs50 crore, it is a fraction of the Rs4,500 crore telecom firms hope to generate from VAS in 2007. The corresponding number for 2006 was Rs2,850 crore.
“The World Cup has a high recall value and it has a rub-off effect on the brands. The mobile service providers are offering value-added services primarily to keep their brands alive in the context of the event,” said Alok Shende, vice-president, Frost & Sullivan, a technology-research firm.
Reliance Communications expects a significant demand for its VAS offerings.
“We are trying to catch the first half of the matches when the necessity for having the information and services on mobile phones would be much higher. But seeing the passion for cricket in India, there could be limited demand even in the second half of the matches,” said Mahesh Prasad, president (applications, solutions and content group), Reliance Communications.
Revenue from VAS accounts for less than 10% of the total revenues of telecom firms in the country. A large portion of this, around 95%, comes from text messaging. It is the non-text services that telcos are promoting during the World Cup. Reliance Communications offers updates on scores in the voice of Sachin Tendulkar, and Hutchison-Essar, according to Harit Nagpal, the company’s marketing and new business director, has the exclusive rights to video replays or clips of 30-second duration. Such services, said Shende, would not result in a spike in revenue, but would “definitely add to (profit) margins”.
Despite their promotions, it is likely that much of the VAS revenue of operators arising from the World Cup comes from text messages. Most operators provide score updates through text messages at Rs3 a message. Some offer a series-package of scores and updates through messages for Rs99. Hutch-Essar charges Re1 for a video and Rs99 for the entire series (with a limit of 50 clips a match). Reliance Communications allows its subscribers access to old cricket videos, such as those of India’s victory in the 1983 edition of the World Cup for Rs10 a video.
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First Published: Sun, Mar 18 2007. 11 59 PM IST
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