With the advent of per second billing plans by market leaders, affect on balance sheets of telecos is a big question in mind of everyone associated with the industry. It is expected that overall revenues will be affected by around 15%. With more price conscious subscribers in upcountry, impact on revenue from rural market is expected to be more as compared to cities. Other then direct impact on revenue from voice calls, per second billing can indirectly affect value added services too.
Rural telephony and VAS are always said to be the main drivers of growth in telecom, per second billing will impact both. On one hand, it will definitely help to increase penetration in rural India as price point has decreased further and on the other decreasing call rates is going to affect revenues from voice calls, thus increasing the importance to sell VAS.
Selling VAS products to rural subscribers has always remained a challenging task. With most of subscribers keeping less then Rs.10 balance in mobile, selling VAS is tough. This will be further tricky with the advent of per second billing. When a quick call cost less then 10p, will the customer spend on VAS which currently cost much more? Or rather will he keep enough balance in his mobile to buy VAS services through phone call or SMS? It is expected the average balance in a user mobile is going to decrease further.
Looking at it in a positive way, customers are in a habit of spending a certain amount on mobile services. With per second billing, there is a feeling in customer’s mind of saving a lot with the new tariff plan. So if a customer is approached for VAS services during this phase, his acceptance to a new product will be higher. Also, if he buys some additional service, his share of pocket can be retained.
What is required is to promote VAS as a separate entity and not as something which is bought from existing voice calls balance account. For example, a separate Rs.10 voucher for dialer tone for say 10 days will sell more then a Rs. 10 deduction from voice account because Rs. 10 is not a very big amount for a customer but 1000 second of calling is. Other benefit of keeping a separate account for VAS services is sales channel can be awarded in a better way. Selling VAS product is definitely more difficult then giving a Rs. 10 voucher. More incentive to channel will definitely help to increase push for VAS product.
But for this, there is a need to develop VAS products which are required by rural customer and to make it available in a user friendly way. Broadly, challenges in selling VAS services in rural market can be summed as under:
1. Understanding of the customer needs
2. Making the application user friendly, one which can be understood and used easily by the user, preferably even by uneducated ones
3. Communication of the services
4. Making the services affordable for rural customers
5. Availability of services in the nearest outlet just like Rs. 10 voucher
Though lot has been done on above by product development and marketing teams to overcome above challenges and develop a selling VAS product but with a limitation. Till now telecom operators are selling VAS services mainly by approaching the customer directly through SMS, voice calls, alerts etc. and involvement of channel is minimal. To overcome above challenges and take the VAS sales to next level involvement of channel partners and sales team is must. They can play an important role not only in understanding the customer needs but also in communicating the service and making the customer comfortable in using the same. Selling VAS through channel will help in expanding more aggressively into new markets and better serve existing customers and reach new ones.
Utilizing the sales force and making it accountable for VAS can lead to growth in VAS by leaps and bounds. More on utilization of sales force for VAS in my next post……
