India’s vast market lures telecom giants
Monday, January 8, 2007
Companies like General Motors, Unilever and Coca-Cola are pinning their future growth plans on Asia, where tens of millions of consumers are stepping over the threshold from poverty to the middle class. But to appeal to these low-income, highly price- conscious customers, many businesses are finding that they must learn to make money on drastically less expensive offerings. And as they reinvent themselves to suit the frugal shoppers of Asia, some wonder whether the strategies of Western corporations will change to reflect the shifting center of economic gravity. When Krishnadeo Prasad Verma calls you from his mobile phone, there is a flicker of a ring, then silence.
Verma, a chauffeur in Mumbai who makes $3 a day, pays only for the calls he dials, so he prefers to hang up and wait for a call back. It is a routine technique for the millions of low-income consumers who have made India the world’s fastest-growing market for cellular phones.
As investors and mega-corporations vie to take over Hutchison Essar, one of the largest cellular providers in India, Verma’s tactic offers a cautionary tale about the Indian boom: To make telephony widely accessible in a nation of 1.1 billion, you practically have to give it away.
Customers in the West pay more than $500 a year for their phones, according to Wireless Intelligence, a data provider. Indians pay just $110, or about $9 a month. “We can basically use the phone without paying,” said Verma, who spends about $72 a year on his cellphone.
Who wants a customer like that? Actually, everyone.
Companies like General Motors, Unilever and Coca-Cola are pinning their future growth plans on Asia, where tens of millions of consumers are stepping over the threshold from poverty to the middle class. But to appeal to these low-income, highly price- conscious customers, many businesses are finding that they must learn to make money on drastically less expensive offerings. And as they reinvent themselves to suit the frugal shoppers of Asia, some wonder whether the strategies of Western corporations will change to reflect the shifting center of economic gravity.
Continue reading “India’s vast market lures telecom giants“
Source: International Herald Tribune (link opens in a new window)
