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The mobile service market in India is crowded.

There are more than fve

CMSPs in each circle and metro. They are facing intense competition and
working hard to gain maintain their market share. Along with the increasein
spply of mobile services! there is an improvement in "ality! which has
reslted in mobile service being treated as commodity like #ast Moving
Consmer $ood %#MC$&. The tari' of prepaid service is normally more as
compared to Post paid services. TheIndian mobile service market is very
price sensitive. The CMSPs are inventing price models to attract all segments
of cstomers. The CMSPs are o'ering activation and deposit waiver and free
handsets to postpaid cstomers and free validity and talktime to prepaid
The CMSPs have a well woven network for retailing the mobile services
throgh ( Company branded shops! distribtors! dealers! retailers and direct
sales agents %)SA&. In India two systems for pricing telecom services were
sed the *at rate and the measred rate. +nder the former! sbscriber has
to pay a f,ed monthly rental irrespective of the nmber of calls made. In the
latter! the sbscriber is charged a lower rental pls a sage charge per call.
The Measred system of pricing still contines. The tari' of the calls was
decided depending pon the time of origination of the call! day! distance!
dration! more the nmber of calls made by the ser higher the tari'. The
rental was decided on the basis of the capacity of telephone e,change from
where the cstomer is served. The rental for the rral connections was low
as compared to the rban areas.
Diferent methods of Pricing
The prices are based either on costs or demand. The cost-based price
incldes a rate of retrn together with costs! i.e they focs on economic
costs! which inclde a normal commercial retrn. In telecom! there are two
types of demand! one for accessing the network and other for sage! these
two elements is priced separately! and the impact of price on these two
types of demand need be considered separately while deriving the price
Innovations in pricing
The innovations in pricing of mobile services are driven by CMSPs. They are
o'ering the services in innovative price models! which are very attractive.
These innovations have contribted in the redction of the cost of ownership
and made mobile services more accessible for the low-income grop
The following innovative models for pricing new plans are adopted as
compared to plain vanilla tari' models sed in the legacy system.
a. .Incoming free for lifetime/ plans. In this plan the free incoming calls
are allowed to the cstomers! if they recharge for a small amont
every si, months.
b. 0ne India tari' plan %1 rpee2min anywhere in India&. This plan is for
cstomers making heavy sbscriber trnk dialing %ST)& calls.
c. 0ne India 3oaming Plan. %1 rpee2min while roaming in India&. This
plan is for cstomers sing the national roaming services fre"ently.
d. The pre-paid cstomer can barter talk time mintes for e,tension of
accont validity.
e. The availability and a'ordability of the micro refll copons in
varios denomination %e.g small refll of 3s.14 and validity e,tension
ate the rate of 3s. 52-per day&
f. 6ndling of mobile handsets with tari' plans! where the mobile
handsets are o'ered free of charge.
g. Attractive vale added services which are compatible with less
sophisticated handsets e.g voice based SMS in place of the te,t
based SMS and services on voice platforms for access to services on
voice in place of the SMS.
In recent times! the pricing has dropped down to almost 1 paisa2 sec. This
had taken mobile to almost rock bottom prices. 7hen it was speclated that
this was the abyss! 8irgin mobile came p with the plan of cash back on
receiving calls. This is so far the lowest o'ering from any telecom company.
9owever! this o'ering cold not become so poplar.
These days the focs of service providers for profts have shifted from call
tari's to vale added services. There is a hge in*ow of di'erent kinds of
service o'ering from service providers.
:ven the technology boom in the mobiles have contribted to the shift of
focs from mere call tari's to profts from vale added services.
The mobile gaming indstry are contribting a lot to the profts of service
providers. Advent of 5$ technology seems to be a promising ventre for
service providers to reach new heights in revenes. 9owever! this will still
take some time to penetrate this technology to