Radical changes needed to accelarate telecom growth

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New Delhi, Dec 20 (UNI) To achieve the target of 500 million mobile subscribers by 2010, the country needs radical changes in products and business models to tap the 'next billion' potential customer segment.

''There are about 91 million households in the country who belong to the next billion segment-- a group of customers whose potential to become profitable subscribers has been greatly underestimated,'' The Boston Consulting Group (Mumbai) Partner and Director Arvind Subramanian said while launching a report 'Ringing in the Next Billion Mobile Consumers: A Road Map for Accelerating Telecom Growth in India'.

This 'next billion' mobile consumers segment is just above the poorest of the poor and below consumers who are already targeted by the companies.

In the country, income of the urban 'next billion' household varies between Rs 60,000 per annum and Rs 180,000 per annum. In rural areas the floor is lower at Rs 40,000 per annum reflecting the lower cost of living.

There are 18 million households in India that lie above the 'next billion' segment and 95 million households that are below the 'next billion'.

''The 'next billion' will be different from the first two. For the 'next billion', the mobile phone can change their lives, improving their economic prospects more significantly than any other tool,'' co-author of report and The Boston Consulting Group (Delhi) Partner and Director James Abraham said.

He said the operators and handsets manufacturer need to educate these consumers about the benefits of the mobile phone more than just the convenience it offers.

They need to work together with regulators and create profitable business models, said Mr Abraham, adding there is a need to create new products and services, new models of distribution and new marketing campaign.

The report stresses that cross-industry collaboration will be critical to success.

Operators need to work with players of other industries, such as financial services and consumer goods, to enhance their offers and extend their reach beyond the outer limits of traditional distribution channels.

The report also outlines several government and regulatory measures that will be needed to enable business innovation.

''These include reforming spectrum management, permitting resellers, deepening infrastructure sharing, introducing innovative licensing and stimulating demand,'' Mr Subramanian said.

UNI

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