Most, if not all good things come in small packages. This holds true at least for the potential rural subscribers in India who are waiting to be swept by the telecom revolution. Considering the constraints of the rural market, the operators have started redesigning their strategies to capture the high-potential market.
In a strategic move to drive rural Internet penetration, Reliance Communications has come up with the concept of sachet pricing for the Internet users in the area beyond major cities. Its BharatNet plan, the high-speed wireless Internet service in over 20,000 rural locations across the country.
At present there is an addressable market base of around 4 mn PC users in rural India. However these users are faced with an inherent limitation of dial-up services on quality, speed and an effective broadband service, which are currently available only to urban territories.
In the face of this reality, the company is promoting the service as a high-speed variant of its Reliance NetConnect service, but specifically designed for the rural and sub-urban markets offering speeds of approximately 153 Kbps, which is 4 to 8 times the current dial-up speed of the wire-line services. Additionally, speed quality will improve since it is no longer dependent on the quality of the copper wire. With this sachet pricing, the operator plans to create appeal with both, casual and heavy users. This tariff will be available across rural India excluding the metros and top 100 cities. Reliance has already successfully experimented with sachet pricing offering VAS and gaming.
The subscription of caller tune at Rs 30 was recently replaced by a sachet strategy of Re 1/day pricing module offering flexibility of usage to the subscriber. The dual technology operator set itself a target to achieve 15% to 20% of revenue contribution coming from VAS and data services.
Earlier, Aircel tried to excite the subscribers with its pocket Internet cards in two variants, one costing Rs 98 which has unlimited Internet browsing and music shuffle per month with 10 wall papers, five games and three downloadable features. The other is a sachet pack worth Rs 14 with unlimited browsing for 3 days and other features. The Rs 14 worth offer has become an instant hit with the young population.
The experts see business sense around sachet pricing, especially for a low income group subscriber in the villages of India, who is mostly a prepaid user and does not have a big budget to spend. They say sachet pricing can yield results not only for Inetrnet penetration, but other services other than voice.
Rohan Samarajiva, CEO, LIRNEasia, a regional ICT policy and regulation research and capacity building organization, says for addressing the needs of Internet functionalities for the Bottom of the Pyramid (BOP) users, one need to understand one crucial thing that mobile and PCs are the best vehicle for IT-delivered services to rural India. He says the flat rate model does not fit the prepaid user. The operator should look at giving the user an opportunity to use Internet components at a low cost.
Amit Sinha, AVP, One97 Communications approves sachet pricing for increasing adoption VAS by subscribers in the rural areas. For a subscriber who does not have a very high balance on his prepaid account may not be comfortable subscribing for a particular value-added service for a monthly subscription.The adoption trends have been quite interesting. Reducing the sachet price from Rs 30 to Rs 10 can affect the VAS adoption by about 35-45%, he says.
Since the awareness about Internet functionalities that one can have access to through mobile is quite low. Sachet pricing is one way to generate awareness, induce trial and adoption of these services.
Since mobile seems to be the future for rural connectivity the operators like MTNL and BSNL who have got the opportunity to hit the gold pot with spectrum for 3G must start offering the flavour of mobile Internet services to the rural population. Till date the two pubilc sector operators have not had a great luck for these services, even though the cost for the services has come down, but it still remains a subscription based service. The operator should consider reworking the pricing model for the rural market before the private players enter the 3G turf.
heenaj@cybermedia.co.in
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