India's mobile market is defined by increasing ubiquity as subscribers reach the 250 million mark, with net additions of nearly eight million subscriptions per month. It is also a very diverse market -- where the bottom of pyramid (BOP) consumers co-exist with the sophisticated consumers commanding 10 times the mobile spend.
This market is slowly transforming from a voice-only market to a multi-platform value-added services (VAS) market. And until recently, the VAS market has been primarily SMS-based, with Bollywood and cricket being the largest content drivers.
While the market size of VAS is now about US$1billion, it constitutes only about seven percent of the country's total mobile revenue. To maxmise the potential of this market, marketers need to gear up to overcome the following four challenges of marketing to the BPO consumer:
Consumer challenge
Marketers should shift their focus from acquisition to education. Brands must realise that this group of consumers needs to be educated about mobile VAS, in areas such as the technology, tariff structures, premium SMS, interactive voice response (IVR) and data usage.
Device challenge
In order for VAS to be adopted by more people, devices that support the use of VAS should be offered at lower price points. However, at this juncture, low cost handsets enabled with GPRS or general radio packet system are still not widely available in this market.
Content challenge
Brands need to be more innovative in coming up content. The two most popular subjects have been Bollywood and cricket. Marketers should think beyond these topics. One other subject they could tap into is spirituality, which is an equally big market. Marketers must also be able to offer content in its local languages, rather than just English, if they want to reach out to the masses.
Operator challenge
The fourth challenge arises from the delay in setting spectrum policies. This has resulted in congested mobile networks, leaving no bandwidth for data-efficient applications.
On the other hand, India's telco providers are also strategising on how they can address the county's top-end consumers. We take a look at how Airtel, Indian's largest global system for mobile phones (GSM) player, segments the top-end market in terms of VAS usage.
Faced with diminishing marginal returns on voice revenues, Airtel was forced to abandon its one-size-fits-all demographic segmentation. It came up with a strategy where it reclassified users into different segments based on attitudes, VAS adoption traits and average revenue per person (ARPU).
Airtel focused its attention on two segments in particular. The first group was known as "funsters" -- consumers aged between 18-35 years old, who share a common trait -- a high adoption of VAS. Airtel believes that with some targeted marketing, spending from this group can increase quite significantly. The telco has exclusive tie-ups with application providers like Google and has identified music-on-demand as a key value proposition.
The other segment of focus is the "achievers", who are the top five percent of mobile users. While this segment isn't a high adopter of VAS, it contributes to revenues nearly 10 times that of Airtel's ARPU, currently at US$10.
To enhance customer experience for this segment, Airtel has separate priority relationship managers. It also partnered with HTC and Blackberry to offer high-end handsets catering specifically to this segment.
Brands entering India must understand that ubiquity in diversity is an inherent dynamic of the market. Marketers must always be ready to unlearn and re-imagine their mobile strategies to succeed in India!
Manish Sinha is planning director, digital & new media of BatesAsia. Read full bio.
