Speaking about retention strategies in a competitive
market place, importance of quality over mass marketing and advantages of
prepaid over postpaid, S Krishnan, group CTO, Videocon Telecommunications also
talks about the company’s plans to launch LTE in India
Videocon launched mobile services a little
over a year ago, but still hasn’t been able to garner a wide customer base.
What is your strategy?
We acquired a lot of customer in the first 2-3 months of
operations, but on the whole we are not so aggressive on sales, and focus more
on customer service. By doing so, net revenues per minute and ARPUs will
increase and costs will be reduced. For us, the definition of quality customers
is consistent and loyal customers who have stayed on for 12-18 months,
providing consistent revenue. Today, the market ARPUs stand at 1.75. We aim to
acquire at least half of this market share by means of VLR customers.
So what is your plan for customer acquisition
in a super-competitive market like India?
Sales acquisition, concentrating on customer demands –
not forcing them to go in for new services, commission to distributed dealers,
quality documentation of prepaid customers are all part of our ongoing plan. We
have divided our customer base into four areas – retention, which will be
certain techniques to ensure customer stickiness in the first two months,
customer engagement – to ensure top-up continues, with loyalty
schemes/discounts – to entice acquired customers to stay longer, unsafe
customers (not recharged in the last month) – who need more enablers to
motivate more usage, safe customers (0-60 days) – last two months engagement to
make him stay on with the same network. The latter provides revenue from the
initial acquisition itself, and there is more recharge revenue from this.
Is your focus more on postpaid or prepaid
customers at this stage?
Most new operators concentrate on prepaid customers, as
postpaid customers are high risk – high return. However, we are planning to
focus on postpaid once stability of the prepaid market is achieved. So far, our
incremental acquisition of postpaid market is less than one percent. For
postpaid, we are targeting SMBs, and high-usage prepaid customers. We are
looking at a change towards postpaid in Q4 of 2011 or Q1 of 2012, where we will
offer a complete set of services for postpaid.
Why would customers be convinced to choose
Our promise is value for money and trust, which are our
two main principles. Working towards that end, we have converted to quality
acquisition, so retention is less and quality is more. However, for any service
provider, retention efforts have to start much earlier, by continuously watching
the customer’s profile and habits to gauge his demands and usage patterns.
Last year you mentioned that you are keen to
launch 4G. With BWA roll outs to begin early next year, do you plan to go in
As and when LTE is ready for launching, Videocon will
take an active interest in acquisition. In February, we tried to have trial LTE
demos, but could not carry this out, as it is very difficult to get trial
spectrum. However, when the time is right, we will offer LTE.
By Beryl M