Telenor’s newest plans: Dial I for insurance in India

Thursday, March 10, 2016

Late last decade, Uninor (a JV between Telenor and Unitech) was among the brash new entrants to Indian telecom, giving larger players sleepless nights. At the vanguard of a price war, Uninor offered rates as low as 29 paise per minute and came up with schemes like unlimited talktime for students at a flat rate of Rs 37 for calls within the network.

The price warrior ethos continues to date. Telenor as it is now known (after a split with Unitech) is still sharply focussed on the bottom of the pyramid. In a market where large players like Airtel, Vodafone and Reliance are eagerly drawing up plans to port their consumers to 4G, Telenor’s scale of ambitions are modest. It’s currently present in six circles (including Uttar Pradesh (east and west), Bihar, Andhra Pradesh, Maharashtra, Goa and Gujarat). It claims to be the fourth largest operator in the circles its present in and focuses purely on the prepaid side of the market. With 50 million subscribers, its ARPU or Average Revenue Per User stands at Rs 88. A low figure compared to market leader Airtel for whom ARPU on voice is Rs 137 and on data is Rs 200 according to its Q3 results.

Of late though, Telenor has been trying to woo consumers with a radically leftfield offering: life insurance. According to Upanga Dutta, CMO Telenor India, the decision to become a micro-insurance provider for its users is part of a carefully calibrated plan. He says, “The market is transiting from voice to data. We wanted to reposition ourselves as a brand that goes beyond price and offers value without losing the core of affordability.” Telenor zeroed in on insurance given it was a yawning need gap. Its core customers typically didn’t even have bank accounts and had minimal access to financial security. Says Dutta, “Why most insurance companies don’t succeed is you need a wide machinery. We operate through our 400,000 point of sale outlets and 2,000 of our own stores.”

Source: The Economic Times Brand Equity (link opens in a new window)

Base of the Pyramid, insurance, telecommunications