Telecom Market Overview - Part 2

Hi Folks,

After a long time I am updating my blog. I would like to continue with my previous article in the changing mobile market scenario.

In recent days, I found one very interesting thing. The concept of "Pay-Per-Use".

Pay Per Use Strategy:

The ‘Pay-per-use’ model represents a paradigm shift in the overall telecom experience. It allows the consumer to pay only for the seconds utilized, heralding another revolution in the mobile telecommunications industry, not only in India but all over the world. This business model will help user to pay money only for the amount which the customer has actually used.

Previously, they were following the concept of 'Pay-for-all' but there was no profit related to it. The customer was using this because there was no competition. But now the scenario has changed. New companies are coming to market with very innovative strategy.

Rise of TATA-DOCOMO:

Tata-Docomo is a joint GSM service provided by TATA teleservices of India and NTT Docomo of Japan. They started a GSM service in India. But what is so special about this? The answer is the innovative model "Pay-Per-Use".

The pricing model is very innovative. They charged only 1paise/sec. Wow!! Isnt it interesting? Ofcourse it is. The proof is clearly visible from the next line.

Tata Docomo, the GSM-based mobile services of Tata Teleservices, on Aug 7 2009 said it has crossed the 5 lakh-subscriber mark in Tamil Nadu within a month of launching its services in the region.

"We are focussing strongly on network superiority, coverage and service offerings... Tata Docomo will soon unveil a portfolio of value-added services that will reinvent mobile telephony in India, with products and services like free voicemail, timed SMS service, free missed call alerts and call-me tunes" - Tata Docomo Strategy

Problem with this NEW model:

The following are the problems which I thought which will give jitters to TSP.

• Cheap mobile cost and cheap pricing strategy. Will it reduce overall ARPU?
• Is the pricing model beneficial for the TSP?
• Complicated billing engine?
• Real time pulse calculation and phone usage?
• What is in it for the TSP?
• What is the Return On Investment (ROI)?

The answer to these questions are bit complicated and not much clear. As per the recent press release, the company said that they are in loss currently. And the balance sheet is supposed to be in red for this financial year. The company might come out of this losses by the end of 2010.

But the main benefit was due to the joint venture. TATA teleservices has lot of infrastructure which is not a problem for them. Same goes with NTT Docomo. They have designed the most complicated billing engine. So it wont be a problem for them too.

It will reduce the ARPU in the initial stage as people will talk less and they are likely to get more benefit. But as the time pass, people will be increase in the call usage.

Ntt-Docomo uses iMode technology and possess state of art technology especially in the billing side. They will make most of the use for it and get more profit.

So try to give thought about this technology and business model. If you have any comments do contact me.

Copyright © Hardik Upadhyay

You can follow me on TWITTER

JSK

Tech Companies "GROWING IN TOUGH TIMES"

Technical companies have already laid the foundation in this part of time. They have proved themselves as the horse of the long race. I am not saying because I am a technocrat but it is been said by their quarter results.

Lot of people expected it to be a simple outcome of sales. But the true story was totally different. It was the mashup of lot of things. It was expected by the market analyst that they will perform well but this much?? One would wonder that in this era of recession, if they are able to outperform many of the companies, then what will be the future?

I would like to discuss about few companies which I think that they need a round of applause.

1. Apple

"Apple"

Wow!! what a term. Have you ever tried to do an image search by the term apple in google? If not, try it. You will find out that how much this company has taken over the software industry. They have changed the meaning of the term apple. They are the leaders in innovation and technology. They know what they are doing and what they should do in the coming years to survive this tough time. I am saying all this good things about apple not because they have come up with most innovative product like iPhone and iPod but its the total company which comes out to be a winner. Take any product of apple starting form Mac desktop, Mac OS, iPhone, iPod and last but not the least, software like iTunes and Safari. Every product can be termed as the masterpiece. It has excelled the expectation of all the people. So they are surely winners in this tough time.

Their quarter results also says the same thing. Apple, the closest thing the tech industry has to a luxury brand, said earnings for the three months that ended June 27 jumped 15 percent to $1.23 billion, or $1.35 per share. Apple's profit was $1.07 billion, or $1.19 per share, in the same period last year. Apple sold more than 5.2 million iPhones in the quarter, more than seven times what it sold in the 2008 quarter, thanks in part to a newly released version of the device. I guess this all things tells the total story.

2. Google

Google has taken the world by storm. They have been in the news almost daily. Everyone will be reading about google coming up with some mashup of web technologies like "WAVE" or suddenly they will announce that they will be releasing the operating system for netbook named "Google Chrome OS". Also suddenly at one fine day, they will move many of their applications out of beta or they will announce about new android SDK and phones.

Google has designed a beautifully crafted business strategy to take over their competitors. I guess you know who....

But still, they are riding high on this scenario and getting the most out of it. Their google labs is working 24x7 as they are coming up with lot of products. If you see the small things in google search, you will be amazed to think how it would have been done. Google is indeed one company which will be there for a long time.

Google Inc. made more money than ever in the second quarter, even though its revenue growth slowed like never before. Its second-quarter profit rose 19 percent to $1.48 billion, or $4.66 per share - the highest net income for any three-month period since Google went public in five years ago. Google ended June with 19,786 employees, 378 fewer than at the end of March.

3. Tech pillars of India - TCS, Infosys & Wipro

The software industry has flourished in India exponentially. India was supposed to be an agricultural country but now the whole scenario has changed. More and more focus is given on the software industry which has shown tremendous growth in recent times. They are showing the profit of around 11 % to 20%.

All these companies have shown that they have tremendous potential for getting success and they are trying hard to come out of this tough times. They have made it clear that recession will not affect Indian software industry very easily. They know how this business runs and they are taking it very seriously.

I guess in the near future their strategy will change but it will all be good for India.

So this was all about the technological companies which will be making the future bright for us.

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Also you can mail me at : hardik2447@gmail.com

JSK