Uninor Unveils 'Dynamic Pricing’

Further proof that the intensely competitive market in India is fueling service innovation came today as startup Uninor launched a new "dynamic pricing" service called 24X7 Badalta Discount Plan (DP). (See Uninor Intros Dynamic Pricing.)

Under the plan, customers get cut-price voice calls, with the level of discount determined by how busy the mobile network is when the call is placed.

Basically, any one Uninor customer signing up to the service can get a discount (from 5 percent to 60 percent) on the per-minute charge of their call, with the greatest discounts available in the network cells with the most free capacity.

To do this, Uninor has made full use of its Service Provider Information Technology (SPIT) capabilities, using data from its network capacity management systems to trigger the offer of specific rates, and then linking the resulting tariffs, and usage, to its pre-paid credit management systems so that customers are debited the appropriate amount.

The idea is to encourage customers to make calls when the network has plenty of spare capacity, and to make them feel like they are getting the best possible deal. The discounts are updated each hour and can be viewed by the user on their mobile device.

The service is available initially in three of India's 22 "circles" (service areas) -- Andhra Pradesh, Tamil Nadu, and Karnataka -- and will in time be extended into the other circles where Uninor, which launched its service in December 2009, is operational. (See Uninor Launches in India, Uninor Launches in Orissa, and Telenor Invests More in Uninor.)

The carrier, which has decided to focus on the development of voice rather than data services, and opted not to partake in the auction of 3G spectrum, currently offers its services in eight circles, and had 4.3 million customers at the end of March. (See Bids Flood In for India's Spectrum Auctions and Interview: Rajiv Bawa, EVP Corporate Affairs, Uninor.)

While Uninor is clearly looking to attract more new customers with this new marketing strategy, a key driver behind the service's launch appears to be churn management. "We believe this scheme will lead to an increased engagement with our customers, which might result in more stickiness," stated Uninor's executive VP of operations, Rohit Chandra, though he declined to comment on the company's targets for gains in customers, minutes of usage, or revenues, or what impact Uninor hopes it might have on churn figures.

The timing of the launch is interesting, as it comes only a few months before the introduction of mobile number portability (MNP), which is expected to encourage at least some of India's near 600 million mobile users to switch providers. MNP is due to be introduced on June 30. (See Will Churn Burn India's Mobile Operators?)

Not only could such a service offering help retain the customers Uninor already has, it might also encourage users to switch to the GSM startup.

Of course, it's unlikely to be the only pre-MNP initiative launched by an Indian operator in the coming weeks, and each is likely to only further intensify the already fierce price competition that has been driving down voice revenues and average revenue per user (ARPU) rates. (See Bharti Needs More Data Drive.)

— Gagandeep Kaur, India Editor, Light Reading

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