MUMBAI: Competition in India’s telecom industry is entering a new phase with top players increasingly betting on quality of service and new targeted offerings to retain and acquire customers, as prices have already reached rock bottom levels, experts say.
“The Indian telecom market is shifting towards QoS (quality of service) which will be the key criteria for user retention and acquisition at the same,” said Satyajit Sinha, research analyst at Counterpoint Research.
Service providers are also expected to focus on new technologies like Internet of Things to target niche user base for early adoption, Sinha said. These services may vary from consumer segment to enterprise segment.
While incumbents Bharti Airtel, Vodafone India and Idea Cellular as well as cash-rich newcomer Reliance Jio Infocomm are expected to focus on quality, experts said smaller telcos — constrained by lack of funds — may continue to play the price game to limit large scale subscriber desertions. Analyst firm EY said tariff wars from now would be relegated to smaller players while top players focus on quality of service, content and apps.
“Customer experience across all touch points need to be improved, from branding to call centres to outlets for self-service,” said Bharat Bhargava, partner, telecom advisory, at EY. Couple of months ago, Airtel launched ‘Project Next’ to improve its customer experience under which the country’s largest operator rolled out next-gen Airtel stores that aim to make interactions with customers smoother.
A company spokesperson said it took feedback from thousands of customers in its innovation lab and identified key insights that led to the plan that their post-paid customers can carry forward their unused monthly data quota to the next billing cycle. Mritunjay Kapur, partner and Head, Telecom at KPMG in India, said quality of services will be the single most important differentiator.
For this, telcos need to invest majorly in towers, bandwidth, spectrum and backhaul. A top executive of a top three carrier confirmed the change in approach.
“Where is the scope for prices to go lower? They are already so low,” the person said. “We have to fight on quality now. Let’s see who wins.” The industry moved into a phase of unprecedented tariff competition when Mukesh Ambani-owned Jio started commercial 4G services last September. It disrupted the market with free services till March end, and much-lower than market data rates from April 1.
Voice is free for life for Jio users and the operator has garnered around 130 million subscribers till now. Others followed suit in terms of pricing, leading to average revenue per user (ARPU) for telcos dropping to Rs 131 in the quarter ended March from Rs 141in the December quarter. For the next phase of competition, Vodafone India said it will cater to different expectations of customers across segments and roll out products accordingly.
“In the large towns, customers are using the internet for multiple purposes…from entertainment to business related activities to the use of a larger number of applications,” said Avneesh Khosla, associate director – consumer business at Vodafone India.
“In semi-urban and rural India, the usage patterns are very different,” he said. Vodafone, therefore, has plans like SuperHour, SuperNight (unlimited data) for the urban markets, while SuperWeek (unlimited voice) for mass, said Khosla.
Idea Cellular is in the middle of revamping its website besides adding new content to their entertainment apps. It will have a “visually appealing interface and added benefits that provide a smoother and friction-free navigation experience, giving users easier discoverability and navigation access,” the Kumar Mangalam Birla-owned company said.
Incumbents had also started data security and insurance covers in case of phone damages to increase their customer stickiness.