In a Analyst Call, the management of Reliance Communications first confirmed that Simply Reliance Tariff was an outcome of market research which the company had been doing [I told you even before this call was hosted]. Here is what the management had to say on various issues,
- Time was ripe as the industry is standing at the cusp of mobile number portability (MNP).
- Reduced Complex product offerings win-win for both company as well as customer.
- Gain Revenue Market Share – RCom estimates that the GSM wireless market in India is c. Rs 800bn. RCOM has a 7% share of the prepaid market and a 1% share of the postpaid market. The company wants to increase its revenue marketshare through its Simply Reliance plan by attracting new subscribers as well as existing subscribers from other operators.
- Increased Network Utilization – Currently RCom’s state of the art GSM network is under utilized just 10% of its capacity. Management believes every incremental minute on the network would be highly profitable even at lower tariffs.
- Not bothered about Competitors – Other operators [read – Vodafone and Airtel] could respond with a regional offer limited to certain circles, or they could come up with new promotional packs. These actions do not bother RCOM so much as their plan is at national level and their pan-Indian television advertising would negate regional promotional offers at the distributor end.
- 3G Ready Network – The company already has a 3G-ready network which is upgrade able with minimal investments and would offer data products on GSM.