Bol India bol

The TV ad of reliance infocom takes us through the history of telecom in india. There was a time when trunk calls were the order of the day, it was followed by STD, booths, queues and then to expensive calling rates of the cellular phones. Even the constant reduction of the calling rates to 1 Re / min doesn’t seem to be good enough. And so Reliance came out with free unlimited STD to another reliance mobile in the country.

What does this mean to us? I don’t know many people who use 93 numbers, and I don’t think I will benefit by taking the scheme. But who will? Cant discount the long lost lovers who cant get with more of talking. I can even suggest it to some of my friends. Perhaps reliance is trying to woo some GSM customers as well, since Tata Indicom has been offering it for quite some time now.

Why this sudden surge of low margin propositions? This is an indicator that the industry has matured, and can be treated as an FMCG. There is a clear lack of innovation or differentiation in the services offered by the many operators. This morning I read that around 25% of the Indian population is already connected. The growth from here is not expected to be exponential anyway. The original high costs were fallout of initial investments in towers and other infrastructure (which are capital intensive). Now that the golden years are over, the multitude of players can only compete on costs.

3G has not taken off very well in India, primarily due to high costs of usage. Till wireless broadband gains popularity, people will have to make do with GPRS data packets only.

For the heavy talkers, there is good news. Falling rates implies they can talk even more. Bol India bol!!

Business standard article