Tata DoCoMo broke the complexity of tariff schemes with its innovative pay-per-second plan, and pulled in 30 million customers in year
When it was launched in June 2009, little did people know that Tata DoCoMo will change the rules of the game. The telecom space was already crowded, and it was next to impossible for a newcomer to create a difference. But that’s what Tata DoCoMo did with its pay-per-second plan.
The results are there to see. In less than a year, Tata DoCoMo has pulled in 30 million customers and a 7 per cent share of the GSM telephony pie. Almost all rival service operators have had to come out with a similar plan. For a moment, the Telecom Regulatory Authority of India even planned to make the plan mandatory. It reached 10 million consumers in just four months and 20 million consumers in eight months.
Before Tata DoCoMo entered the market, all service operators charged for pulses of 60 seconds each. If the call dropped after a second, the customer was charged for a pulse. If he talked for 61 seconds, he was charged for two pulses. Market research showed that customers were far from happy with this. More than half of them were found to change their service operator every year. About three-fourths of users across brands were dissatisfied with their operator because of its clogged network and the fear of being overcharged.
As many as 88 per cent were sensitive to any change in tariff. Tata DoCoMo used these insights to come out with the pay-per-second plan. Customers needed to pay only for the duration of the call. “There was no simplicity in the plans. The amount of fuss also led to commoditisation of the industry. In an environment where consumers are used to expressing themselves through their choice of brand, they were frustrated by the sameness of the telecom operators,” says Tata DoCoMo’s head of marketing, Gurinder Singh Sandhu. At the concept-testing stage, the consumers vibed best with questioning paradigms and the ‘pay per second’ product was seen to take it forward.
Those who used the plan began to report up to 20 per cent cut in mobile charges. Tata DoCoMo smartly sent an SMS after every call on the money saved by the plan. In the absence of this innovative plan, experts say, Tata DoCoMo would have had to spend a lot more money for the market share it has got. Says Prashant Singhal, Ernst & Young’s head of telecom practice: “It has been able to attract subscribers faster than it would have with any other product.”
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The launch was not just product-centric. The brand worked towards connecting with its target audience too, the experimenting youth who were exhorted by it to ‘Do the New’. Tata DoCoMo harnessed the social networks before its launch and actively sourced feedback from these sites. GPRS packs and parts of the BuddyNet programme were the result. Trouble-shooting on Twitter too has become a part of the brand’s dialogue with the consumer. On-ground campaigns and joint research with Nielsen helped it put together a ‘Doer Manifesto’ to understand better what the youth wanted.
It has been constantly keeping up its share of voice in advertising with successive campaigns. The print, radio and outdoor campaigns were tariff-centric such as those asking consumers if their operators had failed in mathematics (for the inability to calculate charges per second). The TV ads were more about features and the brand with its now familiar jingle. From the early user-generated logo interpretations to the Friendship Express ad, the brand capitalised on the increasing subscriber base. It came up with the tagline of “Why walk alone when you can dance together?” which, according to company officials, highlighted the significant network of people that had started coming on board. “Tata DoCoMo became synonymous with per-second billing and it happened because the news media picked it up as well. As a result, the brand got a lot of free publicity,” says Singhal of Ernst & Young.
By singing a different tune in the market, the brand did notch its fair share of detractors. Competitors biding their time helped Tata DoCoMo consolidate its association with per-second billing. But vindication was not far away. Other operators eventually introduced their own takes on call and message tariffs. The ensuing tariff play and the dents in margins whittled 10-15 per cent off the valuations of the listed telecom operators. For new entrants, it became unavoidable. MTS even offered discounted per-second billing on its launch.
Tata DoCoMo has since moved on from talking about per-second transparency. It is now increasingly looking at promoting its value-added services such as customised ring-back tunes when calling other numbers, and daily plans with tariff modules. It has positioned its value-added services with a firm eye on the youth. SMS is charged per character, so young users can make the most of their messaging language that compresses words. Internet rates have been tailored to attract heavy usage. To communicate, it reaches out to 8.5 million users on social media, including 47 per cent of Facebook users. The Livechat on its website also lent a Twitter-like immediacy to the brand. “The focus on value-added services and data use has also given freshness to the brand,” says Singhal. Competitors, though, have pointed out that this will finish Tata Teleservices’ CDMA operations which bank on data usage as well.