How can we increase revenue in low ARPU market?

http://www.linkedin.com/groupAnswers?viewQuestionAndAnswers=&gid=137157&discussionID=201939&sik=1224326366368&commentID=310731&goback=%2Ehom%23commentID_310716%2Ehom#commentID_310731
(In answer to a generic queston on Linked in about the dynamics of increasing ARPUs)

Hi Syed

In such times, when voice and text is commoditizing, the buzzword is services as all the other 5 answers here indicate. However, it is more than a ringtone, content, games etc. M Commerce/ Market Services has answers but they wont be easy in coming. 3G services is another interesting answer.(in developing countries). However in true sense 3G and other market services will be a long haul and sustained investment game. Few questions that need to be first thought through before comitting resources

1. Will operators monetize services from the start (meaning lower adoption rates) or introduce a free service first and then monetize the full monty (meaning the customer will upgrade)
2. We are talking of changing consumer behaviour- thats a long incubation
3. How do you account for loss in revenues due to churn or a competitor running a more attractive price for the same service?...
4.... hence the risks to the returns versus investments.

In a country like India, these considerations are significantly impacting the Operator decisions and willingness to commit investments required. Both these solutions do need long partnerships and incubation periods. These solutions need to be looked at from a ROI versus Investment perspective. This is a long haul but a source of competitive advantage and but obviously higher revenues (ARPUs).

My opinion on this: Models can fail, platforms will not. Models meaninging stand alone business models. To generate long term cash flows, we need to look at Platforms, for instance, mobile manufacturer - Operator - Fertiliser companies - Meterological department - Banks - Travel Agencies - Others. This downturn is a good time to forge these links. Only when you take "all under one roof" approach, will you be able to compell the consumer to dish that much extra which is going to add the whole lot more to your ARPU.

The fall of Capitalism or what?

( In response to a discussion floated in a Linked group...http://www.linkedin.com/groupAnswers)

Hi Srini
Brilliant work on the tabling the facts. But the inferences can perhaps be slightly better 1. The bankruptcy of a few Financial institutions cannot be termed as the fall of capitalism. As long as there are entrepreneurs, Capitalism will be. 2. Agree with you on wasteful expenditures that America has incurred on the trillion dollar "terror" war without much ensuing out of it but the current acount deficit. 3. Nothing substitutes the basics in financial sector. This fall in the banking system is however the fall of over optimism and over leveraging of the mortages and other banking tools without a solid base. 4. My feel is that the financial Tsunami is going to travel eastward to Asia in some direct form or indirect form. Already European banks are feeling the ground under their feet buckle to the pressures. 5. However the more eastward this Tsunami travels the lesser will be its intensity. While it has affected the whole of the American banking system, and part of the European banks, its effect eastwrd will be lesser in scale. 6. For India,liberalisation was a panacea. Ironically however, the gradual rate of oepning up of thefinancial sector has made sure the risks and exposures are not as substantial. 7. It is a good time for economies like India and China to surge ahead. 8. While getting ahead is easier, India will require some discipline to forge the pace. Wasteful rural subsidies must have to stop. Infrastructure must grow faster and we need qulaity out there. 9. For a good 40 years, India was a partly socialistic economy. However at this time, our progress and deliverance lies in judicious capitalism. 10. The Indian capitalist is a thoroughbred and i for one vet for the Indian capitalist to play a significant role in shaping the future of ths country. Which ever way you see it, Srini, we are still talking ideals of capitalism as a means of deliverance whether be India, China or the sinking US. So its not the end of Capitalism, just that it is changing grounds probably...

No easy foothold for foreign companies in Indian mobile market

My take on the road forward on 3G in the country: The new entrants versus the established players

http://www.livemint.com/2008/01/06121309/2008/09/22215427/No-easy-foothold-for-foreign-c.html?d=2

Very well written Devidutta!

In fact you have closed on all macro issues regarding the 3G subject. My take on the issues brought up...

1.The problem that has been with the Indian telecom operators is that most of them have taken the lowest cost route to the consumers.

2.The call rates are ridiculously low and the operators are bent over for adding subscribers. (always not a profitable level)

3.Operators have not really looked into the quality of the services and the coming of Number Portability would create a churn amongst dissatisfied users.

4.The new license holders starting to launch their services would create more competition.

5. Absence of a PAN India footprint would be a serious limiting factor for the new entrants (both 2G and 3G). However operator infrastructure sharing and collaborations can be used to tide over these problems.

6. As far as the 3G spectrum is concerned, the entrenched players would try to make it a price game.

7. This is because the existing operators know least tariff route the best. Their business models support enonomies of scale!

8. For a foreign entrant, the best differentiating route would be quality and exclusivity of service!

9. 3G is not something that would go down to the rural areas in a hurry

10. Instead if the cities are focus, then the clear point of differentiation is service. Trust me 3G needs more than Service. It would probably also thrive on exclusivity.

11. Thus profit models would have to centred on the broadcast/feed quality and customer centric services. There is a business model out there.

12. A dog fight with the Airtel/Vodas of India would mean loss of blood. Thus the new operators would need to avoid a tariff fight.

13. On a later day, once these operators get their critical mass going, they could look at expansion to tioer 2/3 and so on...

Retail Special: Coming Up, New formats, Specialities

http://www.livemint.com/Articles/2007/12/09222808/Retail-special----Coming-up.html

( The first part of a discussion with Mr Kishore Biyani on the sustainability of the retail revolution in India)

Mr Biyani,

Thanks for ushering in the Retail revolution in this country. Two questions that i have at this time in the context of 2010: the watershed year. In this era of shareholder value and ROI,

Question 1:How do you think that the skyrocketing realty prices will impact the retail chains?

Question 2: It is expected that the current financial turmoil would continue well into 2009/10. Do you see retail being impacted by lesser consumer spends?

Question 3:I very much buy into the speciality retailing as the next point of differentiation. However, without trained and qualified personel behind the "speciality retailing", it would be a false bet.

Your Comments sir...

Is there something wrong with ICICI?

(My first interactions on issues of Banking. Though i am not well versed with Banking sector as a whole, but my comments on banking are more from an economy and effect-on-economy perspective. Full article on http://www.livemint.com/2008/09/22083329/Is-there-something-wrong-with.html)

Hi Tamal,

What happens when a growing economy de-regulates critical sectors and industries? I am not against de regulation, infact i am a proponent for it. However, i am commenting upon the trend of market skimming. The pattern that emerges when a critical sector is de regulated and FDIs allowed to flow in, is that there are quick investments in the economy. Most of this investment is attractive, not necessarily sustainable. Attractive means immediate or medium term profit based investments. Long term investments require rigour, discipline, intent and time. They would not be attractive initially and would give you average benefits over the medium and long term. They are not a function of Sales Targets and Pressures. In trying to skim the market and extract the most in profits and Dividends many companies only create a small affluent urban base.This is unsustainable in tough conditions when the small base doesnot deliver. I dont intend to say exactly the same about ICICI bank. However, your point on wholesale versus Retail deposits and structured derivatives and high growth and leveraged equity avers to the thought. I do think that ICICI bank is one of the biggest pillars and powerhouses of the financial eco system, but one gets the feeling that ICICI bank could also have bet it wrong.

Thanks Manas