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Mohammad Chowdhury
I offer unfettered insights into the world of Indian telecom

I would stay away from my mobile, if I had a choice!

Can you imagine anybody saying “If I had a choice, I would stay away from my mobile?” Well, that is the common response from Indians in the first year of using a mobile phone, according to my team’s PwC-IIM (A) customer value study released later this month.  This response is popular across all the consumer segments covered in the study, covering 2,100 Indians in six locations around the country.

Once that first year has passed, doing without one’s mobile becomes close to impossible.  Just look at the diagram below, and note how dynamic the shift is towards mobile dependency during year 1.  Productivity, social standing, access to knowledge all become more valued from year two onwards.  Not surprisingly, parting from one’s mobile becomes undesirable.

mobile

I recall an IBM study years ago which announced that people would rather allow their homes to be repossessed than give up their mobile.  The headlines were brilliant: “Europeans ready to go homeless before giving up the handset.” Though true, the question of course didn’t prove that a mobile phone is more valuable than a roof over the head.  (It only turned out that way because a mortgage might cost 1,000 Euro a month, whereas a mobile might cost 50 Euro.  Even if forced to give up a mortgage payment, few would ever be hard up enough to have to give up a phone.)

But despite how much we love our phones, disappointingly, once consumers have become mobile-dependent, there seems to be little additional utility they derive from years of continued use.  Look again at the diagram, and how our utility from various aspects of mobile usage remain stable over the years.  Mobile users become creatures of habit: they get used to a set of services, and keep using them rather than explore and discover more.

Herein lie challenges and an opportunity for mobile operators and applications service providers.  How can I convince new users to discover more at the start, and, when they mature, how can I keep encouraging them to find more and more utility?

Marketers certainly could do more to educate new users at the outset.  At present, marketing seems to start and end at selling a SIM card and putting someone onto a price plan!  Operators could offer programmes to educate new users to learn more about services such as mobile money transfer, video downloads, or buying music.  They could offer special starter rates and higher connectivity speeds to new joiners.  For example, why not offer a 2G user a 3G speed connection for free for two weeks, or sign someone onto mobile money when they are registering for a new SIM.

Whilst the telecoms industry clamours for a rise in data services and per user expenditure (ARPU), on the marketing and innovation side there simply isn’t enough going on.  As a result, we are a generation of stunted mobile users – we discovered something special, got hooked, and then, stopped growing.  We could gain so much more utility from mobile, yet are stuck on a plateau of consumption that is tinkered with occasionally through tariff offers to do a lot more for a little bit more money.

Attention all marketers: we are not just numbers to deliver you a few more “minutes of use.”:  We are real people who are truly empowered by connectivity.  Could you cater to us please?

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Harshvardhan Mirajkar
Just a few years earlier, we bought mobiles without much fuss. It was a utility device, mainly for calling and texting. Now, the decision to buy a handset is as much thought through as buying a house or a car. How many cores does it have, RAM, onboard memory, camera...mobiles have become more of an extension of oneself. At the same time, like you said, the value derived out of the handset as well as the service, averages out over time. VAS need to re-oriented so that customers believe they can get more out of their handsets, without shelling out extra bucks, or only a few extra. Someone has mentioned about Government support in the comments. In July this year, 'Kisaan SMS', a service by which agriculture advisory can be sent to farmers in the form of SMS, was launched by Central Govt. Already, the SMS sent in by Maharashtra Agri. Dept. alone are about 2 Crores. And the implicit assumption is that the farmers do have mobiles! Almost all eGovernance projects these days have SMS alerts as an inseperable aspect. For an 'Aam Adami', or a farmer, to get a piece of information on his mobile, for which otherwise he would have had to travel 10 Kms to a Govt. office and wait for 2 hours, now thats the real value of a mobile!
Indeed mobiles have become part and parcel of our lives now across society. It's absolutely the right time for the industry to deliver the value for which the potential is evident. Thanks for reading!
Punyasloke Bandyopadhyay
Sir, In agreement to your observations I personally feel that mass awareness campaigns need to be launched by Service Providers ably supported by the Government for inclusive growth. This will not only improve the revenue perspective of the service providers but also the economic growth of the nation will be catered to. Unfortunately there seems to be lack of urgency from both parties regarding this. Also the 3rd party VAS providers who share the lowest revenue amongst the value chain will also be benefited. Thanks!
Punyasloke, interesting thought about Government support - can you say some more about how that might specifically work? Thanks!
Thanks Mohammad. Very insightful article. Completely agree with the shift in the mindset needed from just selling a product/service (as a one off transaction) to addressing the evolving needs of the consumers
This shift in mindset has to be enabled through Big Data and advanced analytics which will enable telcos and other types of service providers (eg retail, FMCG, banks) to understand consumers much more broadly. Thanks!
The uptake of mobile data services in Japan can offer us some learning to address this challenge of plateau in India-users across the country are hopelessly dependent on Suico mobile services ( which is offered by service provides across including Softbank, AU and NTT DoCoMo) to navigate through their complex web of metro trains. Suico has expanded its offering from initially managing the metro tickets on mobile devices and paying for purchase of goods bought at stations to making payments for goods bought outside the station as well. With initial support from NTT DoCoMo, Suico now has a full-fledged advertising campaign running on the use and value proposition of this mobile service and their proliferation is an endorsement of the success of the campaign. We need to look at some such campaigns in India too, the onus for which should be placed on someone other than the already strapped mobile operator.
We can expect similar types of location-based services to come up in India. Smart transport solutions are likely to be a winner, such as for ordering cabs, locating people and places and getting local destination information. These are the sort of services that illustrates how mobile can continue to build value for the customer even beyond year 1. Thanks!
 
 
Mohammad Chowdhury
Mohammad Chowdhury is PwC India's Telecom, Media and Technology Industry Leader and a member of the global executive team. He moved to India following senior roles in Vodafone, IBM and previously PwC where he started his career on the graduate scheme for economists. From London, Mohammad ran Vodafone Group strategy across emerging markets, and from Cairo served on Vodafone Egypt's executive team just before the Arab Spring. At IBM, he set up the corporation's first global telecom solution centre in Bangalore, and at PwC directed the firm's account at the World Bank in Washington, D.C., and the firm's telecoms privatisation and restructuring work in Eastern Europe, Middle East and Africa. Mohammad served as the lead adviser to telecom sector reform in countries as diverse as Saudi Arabia, Zimbabwe, Ethiopia, Slovakia and Slovenia. He is a leading commentator for the Financial Times, BBC, TV-18, NDTV and other media.

Mohammad has worked in 72 countries, lived in 7 and speaks 6 languages. He has a BA in Politics, Philosophy and Economics from Oxford University, an MPhil in Economics from Cambridge University, and executive training in strategy from Harvard Business School. He was born in London, has family origins in Bangladesh, and lives in Mumbai with his wife and five-year old son.
 
 
 
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December 29, 2013 19:38 pm by Mohammad
Indeed mobiles have become part and parcel of our lives now across society. It's absolutely the right time for the industry to deliver the value for which the potential is evident. Thanks for reading!
December 13, 2013 18:22 pm by Harshvardhan Mirajkar
Just a few years earlier, we bought mobiles without much fuss. It was a utility device, mainly for calling and texting. Now, the decision to buy a handset is as much thought through as buying a house or a car. How many cores does it have, RAM, onboard memory, camera...mobiles have become more of an ...
December 12, 2013 09:50 am by Mohammad
Punyasloke, interesting thought about Government support - can you say some more about how that might specifically work? Thanks!
December 10, 2013 15:39 pm by Punyasloke Bandyopadhyay
Sir, In agreement to your observations I personally feel that mass awareness campaigns need to be launched by Service Providers ably supported by the Government for inclusive growth. This will not only improve the revenue perspective of the service providers but also the economic growth of the natio...
December 05, 2013 23:21 pm by Mohammad
This shift in mindset has to be enabled through Big Data and advanced analytics which will enable telcos and other types of service providers (eg retail, FMCG, banks) to understand consumers much more broadly. Thanks!