Another cellular Armageddon... ...but will MTS find its place?

IIPM: An intriguing story of growth and envy

So, to make its presence felt, MTS is doing what most new operators are resorting to – offering freebies and tariff cuts. The philosophy is to entice new customers through freebies and make them experience its network so that they stick with it. “We are offering certain revolutionary pricing packages to the consumers like the minute millionaire scheme apart from the full talk time on every recharge above Rs.10 and all of these have been very well received in the market so far,” avers Lenny Musatov, CMO, SSTL. And the strategy seems to be working for them so far as the company was able to garner its first 1 million subscribers within just 10 months of its launch in September 2008. In fact, it went on to double its subscriber base to 2 million in another 3 months (by September 2009) making it grow by a whopping 16.8% on a month-on-month basis. The company believes that as it continues to add more circles, the growth story would get only better with time.

However, MTS realises that living up to this challenge would not be easy as the Indian market is quite diverse with each circle having its own set of challenges. For instance, the latest circle that MTS has added (the Delhi NCR) to its kitty is quite different in terms of usage pattern and penetration level than the circles that it was earlier operating in. “To address the needs of Delhi market we now have more high-end handsets and will be looking at getting more smartphones that offer facilities such as live TV” agrees Lenny.

But, as MTS offers wireless services based on the CDMA technology it’s able to offer better data speeds as opposed to its GSM peers. However, what’s important to note here is that CDMA still has not been able to pick up well in India. Both Reliance Communication (RCOM) and Tata Teleservices (TTSL) that had started off as CDMA services providers have now moved into GSM services as well. So, does MTS too feel the need to get on to the other side of the wall?

Not quite, on the contrary MTS seems quite content with its decision despite the fact that it’s the only operator in the country to rely on CDMA technology for growth. In fact, it’s only company in the world to have adopted the 1X advanced technology for CDMA (which is the 3G for CDMA operator). “It makes sense for MTS to concentrate on CDMA as unlike RCOM or TTSL it’s relatively new. It makes no sense for it get into GSM as of now. Further, as MTS would be touting more on the data usages therefore it would be better if it sticks to CDMA technology as data capabilities are always better on this platform,” reasons a telecom analyst.

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Source : IIPM Editorial, 2010.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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