Monday, October 7, 2002 |
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Feature |
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BSNL’s late entry
makes present players happy
Manoj Kumar
PRIVATE
telecom operators are once again happy over the delay in the launch of
BSNL’s cellular services. Spice and Bharti telecom have doubled their
efforts over the past few days to capture the exponentially growing
market of cellular services in Punjab and Chandigarh. They want to
capture a sizeable chunk of the market before the entry of telecom
giants — BSNL and Reliance.
Market potential
The telecom operators have
found Punjab and Chandigarh as the most lucrative market, second only to
Delhi and other metros. According to the estimates of the Cellular
Operators Association of India, "The teledensity in the region is
much higher as compared to the other states. During the past eight
months, the market has doubled, from 2.36 lakh to over 5 lakh
connections, and in the next five years, the cellular penetration in
Punjab is expected to cross 10 per cent."
Market experts agree that
the market has not expanded due to high tariff and limited
infrastructure. It is not the lack of demand but the lack of
infrastructure and suitable packages that is affecting the growth. At
present there are around five lakh cellular connections in Punjab and
Chandigarh, they say, against a demand of over 16 lakh connections.
Shift in market
Vijay Kaul, Chief
Marketing Officer, HFCL, Connect Telecom, avers that the regional
telecom market is witnessing a shift from landline phones to WiLL and
cellular phones. He says: "The cities like Ludhiana and Jalandhar,
where a section of population needs mobile service in the limited area,
are opting for limited mobility phones. However, those who want services
for wider area, are shifting towards cellular services." He adds
that his company now plans to penetrate the interior areas.
BSNL officials also admit
that the growth rate of new landline connections over the past one year
has slowed down as compared to the cellular and WiLL phones. Perhaps
that was the reason to enter into cellular market. Reliance is also
expected to tap the WiLL market.
Fall in tariff rates
A large section of
potential subscribers are still waiting for the launch of BSNL cellular
services and are expecting free incoming calls though Prithpal Singh,
Chairman and MD of the BSNL is tight-lipped about their tariff plan. He
says that BSNL cannot disclose the tariff plan at this stage. Officials
claim in case BSNL made the tariff plan public, other operators would
implement it even before the new service is launched. However, officials
claim that BSNL would certainly offer better rates to the consumers,
since it would be difficult for the public sector operator to compete in
the field of customer care service and billing packages, at least for
the first six months.
Vinod Sawhney, CEO, AirTel,
Punjab, Haryana, HP and Chandigarh, is optimistic about the growth of
market. He says that the STD and ILD rates have already declined by more
than 50 per cent over the past few years. The rate could further decline
provided government is ready to revise the licence fee of the operators.
Regarding the possibility of free incoming calls from BSNL Swaran Bajaj,
DGM (marketing), Spice Telecom, says, "We are ready for any new
tariff plan, and would offer the subscribers competitive rates to
maintain our edge in the market."
At present, Spice and
Airtel are offering almost the same tariff. Both are offering two kinds
of billing options. One, at Rs 249 monthly rent the competitive rates
are 75 paise per 30 second up to 250 minutes in a month for outgoing
calls, 60 paise per 30 second for 500 to 750 minutes and 50 paise per 30
second call rates for above 750 minute bills. The incoming call rates
under that category is Rs 1.20 per 30 seconds. Under the second scheme,
mostly taken by bulk users, the monthly rent is Rs 349 per month but the
call rates are substantially lower— Rs 1.49 per 30 second for outgoing
calls and 49 paise per 30 second for incoming calls. However, the
customers can also avail free incoming calls facility by depositing Rs
6,000 as non-refundable fees in advance. The customers can take roaming
facility at Rs 3 per minute.
BSNL’s readiness
The BSNL officials,
responsible for the launch of mobile service in Punjab, say, "We
plan to beat other service providers by offering better service at lower
rate, with wider coverage of areas and stress on marketing in lower
segments. Our focus would be to tap the unexplored rural market and
lower income groups, besides other segments."
Another official
requesting anonymity says, "We have already installed more than 160
roof-top towers in Punjab and Chandigarh and are fully geared up to
launch the service. The trials have been already started in the
department. In the first phase, the service would be available in 51
towns of the state with an installed capacity of 1,10,000 lines. In the
next phase, the service would be extended to other 11 towns of the
state.’’
New handsets
With the slashing of sales
tax on handsets to 4.4 per cent in Chandigarh, the grey market has
declined drastically during the past few months. Kapil Dev Sharma,
Customer Care Executive, Agrani Convergence Limited, here, says,
"New models of handsets are coming everyday, and the competition
will further hot up with the entry of BSNL and Reliance. The companies
like Nokia, Sony-Ericsson, Philips, Samsung, Alcatel and Siemens are in
this expanding market. The handsets are available within a range of Rs
4,000 to Rs 20,000 with various features. One can have a Nokia-3315 set
(Rs 6,699), Alcatel- 311 (Rs 6595), Samsung- R 220 (Rs 9,000) and Sony
Ericssion- 3618 (Rs 6400). The rates may further fall down with the
decrease in sales tax in Punjab, currently pegged at 13.5 per cent.’’
He adds that cellular
services are going to witness unexpected changes in the coming years,
with the change in technology. The changes would depend upon the growth
of state economy, launching of new products and further fall in the cost
of utility services.
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