Sunday, July 11, 2010

Telecom prices in India

India boasts of very low telecom prices, and it is often wondered if these prices can be maintained in the long run, and if any company can make profits with these numbers. Without having concrete numbers, we can still make an attempt to study this.

First, we must realise that prices are not as low as they seem to be on paper. People talk of schemes which make the call rates much cheaper than they are. Think of it, to send 15000 text messages free of cost in a month, I pay a rental of Rs. 80 per month. Now, the question is do I send those 15000 text messages per month. Or do I even send say 300 text messages a month. I probably send closer to 300 text messages a month, and that too to people whose calls I cant take at work, etc. I end up paying around 25 paise per message. People might argue this is still 'n' times cheaper than in western countries, but the point I am trying to make is that call rates are not 'as cheap' as they are claimed to be. In a basic vanilla plan, a call would be charged 1.5 per minute, or 1 paisa per second and a message would cost around 1 Re.

Secondly, we must realise that most of the people in India are pre-paid subscribers who use their phone only to receive calls. People just recharge their phone to keep the number active. Which is like paying some amount of money for just receiving calls. Its a different argument that they find it more economical just to keep the number active and not make any calls.

Thirdly, Indians especially in rural and semi-urban places use a lot of VAS features like call-back tunes, Mobile Radio(which is chargeable), etc. These are features which make a lot of money, and being feature-rich, it is easy to lure people with different products.

Indian mobile penetration has increased a lot over the last few years, but there is scope for further penetration. There are large territories in India with no network, or with no competition for the government organization, BSNL. These are areas which need to be targetted for development. A large customer base is waiting to be tapped in these areas. It will help these people as well as help boost profits for the Operators.

India has a large number of users for above mentioned VAS, but there is a very small population which uses internet over the mobile, or accesses official mail over mobile(invariably this is limited to people who get this facility funded from work). This is an area which can be targetted for development as well.

What I have tried to list and emphasise is that Indian call rates are not as cheap as they are claimed to be, and the profit levels for operators is sustainable as of now, despite the competition in the market, because of a large market potential which needs to be tapped into.

Will keep updating this blog more often now!


I had been to Tirupathi, it was supposed to be a Kalyanotsavam today. But since we were there the previous night, we also decided to make it to the morning 4 o' clock sheeghra darshanam. Good decision!

The morning darshan was too good. One thing I have noticed about Tirupathi is immaterial of whether they have a crowd or not, their scout and guide team, dives for people and pushes them out. Had to shout at two of them for touching me. What a waste of energy!

I am amazed at the business model. Like LTTE ran a parallel government in Jaffna, TTD runs a parallel government in Tirupathi and Tirumala. This place is very clean for a Hindu holy place. When I entered for Kalyanotsavam, I was struck by the familiarity of the place, when I realised that this was the route by which I entered for the Sheegra Darshanam 10 years back. They make the lines to enter the Sheegra Darshanam , the sarvadarshanam, and sudarshan longer and longer, without loss of any business and reserve shorter routes for the more 'esteemed' customers/devotees. Can elucidate more on this, will do that in a separate post, as am very sleepy now. Shall write about the WC final as well.

Tuesday, July 06, 2010


Gave my GMAT today. The experience was a new one for me. As an Indian, I am not used to exams being conducted so professionally and without any problems.

Checked in at 8:30 am for my 9:00 am appointment. I was the last to check in, the rest had checked in by 8:15 am. As I moved in and started reading my question for the AWA section, was irritated by the loud sound of keystrokes. I didn't know if people were working on a computer or on a weaving machine. In any case, closed both my ears, which the administrator misunderstood as a call for some assistance.

I had not taken a single full length test before the actual CAT, which meant I was taking a big 'risk'. Still, I didn't think so. I had my strategy thought out in my mind. I decided to take breaks without actually taking them. For example, the first AWA has 30 minutes allotted to it, I finished it in 20 minutes, but slowed down in between ensuring I dont get tired and pressed enter only when 29 minutes were done. Once the two AWA sections were completed, I started the Quant section. I went slow in quant, but finished it in 30 minutes. I was afraid I was overconfident. However, I went further slow in VA, and that took me 65 minutes to finish, still 10 minutes ahead of time.

Once done with it, it asked for confirmation of my personal information. The administrator asked me to skip it, and I caught a glimpse of my score, I thought it was 740.

Finally, as I moved out, I was given a print out which confirmed the score. So GMAT is out of the way. I hopefully do not have to take it again. So, this input in my applications is confirmed.
[Quick update: Got a 5.5/6 in AWA, so oficially not taking GMAT again]