How ‘Intelligent Pricing’ can decide 4G winners


By Zia Askari

With operators preparing their networks for launching 4G services, designing the right tariff plan for 4G will determine the winners in providing the next generation of communication services in India.

As BSNL, India’s largest telecom service provider is already in the process of overhauling its network, it is expecting to launch 4G services by March 2015 and as India is a price sensitive market, pricing will play a key role.

“We are in the process of overhauling our network today and by 2015 we should be ready with 4G services. Pricing will surely play a key role as far as acceptability of 4G services are concerned,” explained, Anupam Shrivastava, Director, Consumer Mobility, BSNL.

Videocon Telecom is also set to launch its 4G services by March 2014. The operator is also planning to innovate in terms of providing 4G services at the cost of 2G rates.

“We are moving towards launching our 4G services by March 2014. And as India is a highly price sensitive market, we will be offering 4G data experience at 2G rate,” explained, Arvind Bali, Director & CEO, Videocon Telecom.

According to Will Watts, Program Manager, Tarifica, “Worldwide, one of the biggest hurdles operators face in launching 4G technology is the upfront cost for consumers: many are unwilling or unable to pay for more expensive 4G enabled devices, especially without personally experiencing the increased speed beforehand. As a result, many operators have invested heavily in 4G only to see most of their customers stay on their 3G or even 2G networks. India’s operators should combat this by aggressively pricing their 4G data packages and heavily subsidizing some select 4G enabled devices, ultimately reducing the entry barrier for consumers,” he explains. Tarifica is a provider of telecom pricing information and intelligence for the industry.

While green field operator, Reliance Jio is bracing itself for a 100 city launch of LTE services, other operators are putting in place a more focused approach of incorporating analytics to understand customer behavior in different geographies and selectively launch 4G services.

In such scenario, metro locations in India, which have sizable user base with a penchant for intensive data usage, will have 4G coming their way first. Consequently, non metro locations which today run on 2G will be upgraded to 3G.

“The good news for operators, however, is that we believe this challenge represents only a transitory hurdle, and that once customers have experienced 4G, and gotten used to the leap in performance it offers, there’s no turning back. At that point, many will feel compelled to purchase additional data, as their devices use more and more on the high speed network. Given that different network technologies make many devices non-transferable between operators, the company that best markets and prices its 4G services in the near term can gain an advantage on its competition, with the potential to dominate the market and reap the rewards for years to come,” adds, Watts from Tarifica.