With the telecommunication (mobile) service growing at a significant pace one considerable challenge that the Mobile Network Operators (MNOs) operational in the country are facing is Churn Management. The situation has aggravated because of the entrance of new MNOs in the country with worldwide exposure such as Telenor and MTS. In addition, with the launch of Mobile Number Portability (MNP) in the near future operators’ problems are just shooting up.
Despite of the downside that the MNOs are facing Indian market especially the rural segment along with the SME & SOHO segments hold immense potential for the players. The strategy for success would be reducing the customer acquisition cost, increasing the lock-in-period and providing better and cost effective services to the subscribers.
Bundling the services is an excellent strategy which can help the MNOs to focus on the aforementioned aspects as described below:
· Urban Segment: This segment which is the maximum user of data services generates the highest ARPU for the MNOs. However, this segment is the most informed one as well, making it difficult for an operator to manage churn. Despite of this challenge the key factor that is favorable for the operators is the need of convenience for this segment.
Service bundling which holds advantages for the consumers such as one bill for all services, one customer care center not only help the consumers in getting discounted tariffs (as they use more than one service of the same provider) but also ensure above par services for these consumers. Service bundling has already started happening in this segment with MNOs offering solutions such as bundling of text messages with voice, Mobile Internet with post-paid plan, One bill covering more than one connection (post-paid / broadband) etc. However, all these are primarily limited to the mobile usage side.
In the next few years we will see services such as bundling of insurance with post-paid connection, bundling of IPTV/DTH with a mobile connection, bank account with a mobile connection etc. In this highly competitive scenario this will help the MNOs to ensure that a customer is locked in to its service for a longer period. In addition, with players such as Reliance, Airtel already focusing on retail stores along with exclusive mobile stores, we will see that mobile connections and accessories will be available alongside other (FMCG) products in addition other consumer durables will h are shelf in the mobile stores.
· Rural Segment: This segment can be attributed to the growth engine of Indian mobile industry. Low penetration of mobile phones along with large population above poverty line to cater to, this segment will ensure that the net additions to mobile base do not lose steam in the near future. However, to capitalize on this opportunity MNOs need to resolve the issue of cost of mobile handset which is the primary deterrent for a rural subscriber. Bundling of handsets along with new connection can be a key of resolving this problem. Other can be bundling of mobile connection with DTH services and making the mobile connection available though the key players such as ITC e- choupal and DSCL Kissan Sagar.
