Rwanda: How To Make Unlimited Free Internet Calls
Airtel's recent offer for
unlimited free on-net calls of
their subscribers by more than just a token journal can be a business idea, but
should be of interest to all. Even for MTN and Tigo subscribers.
The assumption, as
reported in this paper, is that it could "turn around the
telecommunications industry by offering cheap calling rates."
I have no brief for any
of the networks, but will try the "turn around" assumption and
consider two likely scenarios, held in India and Kenya, respectively.
Scenario one: Bharti, the
company Indian telecom giant Airtel having made a reputation for itself with a
marketing strategy proven it become one of the leading global telcom.
The strategy is based on
a projection of business based on a perceptive assessment of the local
situation, as described in the Business Daily Kenya recently.
Following the example of
Indian patterns of behavior, Bharti play was that "given a choice, the
Indians talk endlessly on their mobile phones if airtime had a really cheap
price."
To enable low pricing,
the other hypothesis was based on facts: having your subscribers make calls
within their network costs very little, because there is no interconnection
charge to pay for example, when a subscriber makes a call to another mobile
network.
This awareness, including
the infusion of innovative and creative ideas to cut costs in other areas
Bharti assumptions prove right, not only in India, but in Sri Lanka and
Bangladesh. This was witnessed by the meteoric rise of the company from an
upstart in 1995 to telcom Indian leader in just five years to 2000.
Scenario Two: Fast
forward to 2010, when Bharti bought Zain, Airtel renamed and gain a foothold in
the African market.
Since June of this year, Airtel
gradually reduced their calling rates
in Kenya, reaching the 50 percent rate cut, triggering a price war. This had a
dramatic effect through networks, including Safaricom, Yu and Orange.
From an average of 86
minutes of calls per month in Kenya through the networks, this figure rose to
an average of 100 minutes per subscriber.
Encouraged by his
experiment, Airtel went a step further and reduce call rates by a staggering 75
percent.
Business Daily reports
that "the first effect was a dramatic increase in the number of people
using mobile phones, for about two million to 22 million. Of these, 1.4 million
recorded in Airtel, 323,000 went to Yu, and half Safaricom a million. That was
in September 2010. "In December of each network had registered more customers.
Then come the crisis it
seems that while it is expected that the price cuts would make Kenyans speak to
the Indians, it was not. The misjudgment of how they would behave Kenyans was
"reflected in the dramatic fall in the minutes of use sector up to 100
when the price war began 80 within six months."
It is explained that the
Kenyans took advantage of price cuts to use the money to offset the effects of
any damage to inflation.
In general, instead of
making a profit, the networks ended up losing money as a result of price wars.
Lessons were learned, and the situation has greatly improved over networks.
But the winner in the
entire series ended up being a subscriber.
What is likely to play in
Rwanda?
Sources By:
http://www.allafrica.com/stories/201210180134.html
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