Tata Indicom's 'Pay Per Call' Tariff Plan for Prepaid Cellular Subscribers


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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

Case Details:

Price:

Case Code : MKTG247 For delivery in electronic format: Rs. 300;
For delivery through courier (within India): Rs. 300 + Rs. 25 for Shipping & Handling Charges

Themes

Competition in the Indian telecom sector
Pricing innovations for prepaid cellular services
Case Length : 16 Pages
Period : 2005-2009
Pub Date : 2010
Teaching Note : Not Available
Organization : Tata Teleservices Ltd
Industry : Telecom
Countries : India

Abstract:

As of 2009, the Indian telecom sector was growing rapidly in terms of subscriber additions, with more than 10 million new connections being purchased every month. There was fierce competition among companies in this sector to enhance their subscriber base.

Besides, between the two competing technologies - GSM and CDMA, GSM was the dominant technology in the Indian mobile telephony market. To attract more subscribers to its network, Tata Indicom, a CDMA-technology based brand of Tata Teleservices Ltd, launched an innovative tariff plan in September 2009 for its prepaid cellular subscribers.

Marketed as the Pay Per Call tariff plan, this plan extended the pulse duration for all outgoing calls made from the home network to 10 minutes. This case discusses the implications of this plan for the service provider as well as the consumer, and questions if (and how) Tata Indicom should take a relook at the plan.

Issues:

The impact of the regulatory environment, industry competition, and consumer behavior on the revenues and profitability of companies in the Indian telecom sector.

The role of tariff plans as a key differentiator between prepaid cellular services of various telecom service providers.

Evaluate the potential impact of the Pay Per Call tariff plan (and competitors' response) on Tata Indicom's subscriber additions, revenues, and costs.

Contents:

  Page No.
Introduction 1
Background Note 2
Tata Indicom's 'Pay Per Call' Tariff Plan 5
RCom's Simply Reliance Plan 6
Entry of Uninor 7
Pay Per Call: Need for a Relook 8
Exhibits 9

Keywords:

Tata Indicom, Pay Per Call tariff plan, Price war, Prepaid cellular subscribers, Postpaid, Tata Teleservices Ltd., Average Revenue Per User (ARPU), Teledensity, Pulse rates, Home network, Roaming, Global System for Mobile Communications (GSM), Code Division Multiple Access (CDMA), Simply Reliance Plan, Mobile number portability (MNP), Bharti Airtel Ltd, Vodafone Essar Ltd, Bharat Sanchar Nigam Ltd (BSNL), Reliance Communications Ltd., Idea Cellular Ltd., Tata DOCOMO, Virgin Mobile

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