vodafone and money lending !

Ever since it began operations in India, Hutch has never failed to impress us with the way the company has approached the Indian consumer and still continuing it after becoming Vodafone. Be it the advertisements or the promotional activities, the company has always managed to stay discrete. I, for one, am a great admirer of the ads they roll out, as it is one of those very few advertisement campaigns that don’t bank upon a ‘skin’ show and doesn’t target the sexual insecurities of men to put the message across. It has always been sensible, precise and has been able to connect well with the audience. When it comes to the offers and the customer service, the company has managed to be a cut above the rest. (At least from what I have experienced)
The Indian mobile phone landscape is dynamic, witnessing an enormous growth and considered to be one of those markets with great depth and opportunity.
To keep pace, the government has granted license to a number of new operators and the subscriber can expect a very competitive market in the future with imminent cuts in the call charges by the existing and new operators so as to have an edge over the competing company. From a business perspective, the companies need to be innovative enough to avoid their the profit levels from being squeezed considering the fact that the call charges in India are some of the lowest as compared to the global peers. The operators are concentrating on making the subscriber use one of the many VAS they provide and thus increase the spending per user and I am sure we all are victims of those pestering nonsense at least once in a day.
In what I presume as a move towards boosting the average user spending, Vodafone has recently introduced something called as “chotta credit” whereby if the subscriber runs out of calling credits, the operator is willing to extend a credit of Rs.10 against a service charge or Re.1, and the credit would be adjusted during the next recharge. One has to appreciate the extent to which the company has read the average middle class user’s mindset. With the spending on the mobile phone occupying a fixed value in the monthly budget, there is every chance for the user to run out of talk credits and go through a muted phase during the month ends. But what is even more interesting is the economics involved behind this whole concept. If seen from a different perspective we may realize that for a credit of Rs.10 the company recovers a sum of Rs.11 back. In economic terms, this is equivalent to granting a loan at an interest rate of 10% and the recovery period is very minimal because the user has to shell out money any case, to make further calls from the mobile. Supposing that a lakh subscribers use this facility twice in a month, the company would easily make a profit of Rs. 2 lakhs without providing an actual service. It has left me wondering if this is a new form of money lending, virtual though!

2 Comments:

mansi said...

gud post ther....neva thgt in tht perspective.ya bt have to say.it has outdone airtel too wch was supposed to be the best in india.....
n i hope..the other services nw dont copy these scheme of vodafone....;)
keep writing.....time to see ur other blog...;)

mansi said...

oopss....i frgt...nice template..:p