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Telcos packaging devices to drive data growth

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Katya B Naidu Mumbai
Last Updated : Jan 21 2013 | 12:12 AM IST

Branded devices with bundled data services have become a hard sell for telecom operators to push data usage for the 3G services. While Bharti Airtel and Reliance Communications have launched branded tablets, Vodafone Essar has launched a branded phone with an integrated Facebook button, called the Vodafone Blue.

The companies intend to reap the benefits of the data plans, which come bundled with the devices, by ensuring higher consumption. While RCom's android 3G tablet comes locked with its network, Bharti’s Beetel's Magiq comes bundled with an economic 3G data plan starting under Rs 100 for pre-paid users.

Vodafone is offering sticks to basic 2G data use. Exclusive for Facebook lovers, Vodafone Blue handset comes with free Facebook usage for a year, surfing any other site would be charged at market rates.

“The use of 2G data is more basic, so we are driving that first. And, device is the growth strategy that we will look at, going forward,” said Kumar Ranganathan, chief marketing officer of Vodafone Essar. He said the company is looking to launch more devices.

Industry analysts said the strategy is known as micro-segmentation. Telcos are now looking at specific usage patterns of the data consuming population and driving growth by offering relevant plans. A majority of mobile-based data consumption shifted from e-mail to social networking, including uploading photos and videos, which consume considerable amount of data. This has become the new target market for operators.

“The percentage of population which will only use Facebook and nothing else is virtually negligible. They will also go to other sites,” said Alok Shende, founder director and principal analyst of Ascentius Consulting.

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Idea Cellular has not launched a branded device, but is co-branding its 3G services with Nokia X7 high-definition gaming handset. The phone features in one of its 3G advertisements. Experts said devices have become a hurdle for subscribers to use services such as 3G, and now, operators are trying to provide the much needed access to these devices. While co-branding of was being done for a long time now, branded devices at lower price points is the extra push to jack up data usage. Both tablets launched by Beetel and RCom are at the lower end of the market at Rs 9,990 and Rs 12,999, respectively, while premium tablets like that of Apple and Samsung costs over Rs 35,000.

Operators, which source low-cost devices in bulk and sell them bundled with data plans, might also make more profits. “I think the incentive is to make more money and gain subscribers, and also increase data revenue,” said Anshul Gupta, principal research analyst at Gartner.

Mrityunjay Kapur, country head of Protiviti Consulting, said operators are trying to diversify their revenue streams from voice and text messages to data. “Operators have been looking to expand consumption of services and upgrade voice and SMS users to data. These devices will eliminate the barrier of entry for subscribers and ensure that they are hooked on to data services.”

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First Published: Sep 13 2011 | 12:26 AM IST

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