SERVICE PROVIDERS: Co-opetition in Communications

The

telecom revolution has transformed the way business is done and

lives of people. Technology has no barriers. What was a figment

of imagination just about a few years back has today become an

integral part of our lives. The customer today has a large

number of options to choose from and has a daunting task of

selecting the most relevant technology for his needs. More so

because different service providers are jostling with each other

to take the bigger slice of the telecom cake and the din created

by them has left the hapless customer wondering. Till now most

of the technologies and services have been operating

independently trying to carve out their own niches but on

careful analysis one would observe that most of these

technologies and services can play an important role in spurring

the growth of other services. It is, therefore, important to

work on a coherent strategy of co-operation among various

technologies and services, which are closely enmeshed with each

other.

Establishing

Synergies

In

the countries with advanced telecom infrastructure and mature

markets, we have seen a string of mergers and acquisitions in

recent times. The long-term strategy of these alliances is to

create mammoth organizations to control large and varied telecom

networks and to take advantage of the convergence of

technologies. This will also result in synergies of businesses,

which will ultimately lead to increased efficiency and

optimization of cost of operations.

The developing countries,

especially in Asia Pacific region, are catching up fast with the

advanced world by deploying world-class technologies to build

comparable telecom networks, which will enable them to quickly

bridge the vast technological gap that exists today. In order to

surge ahead and create lucrative businesses through increased

penetration levels, the telecom companies operating fixed,

cellular, paging, Internet and cable TV services have to

co-operate with each other to convert their operations into fast

growth engines. The technologies are so closely inter-linked

that one service can become a catalyst for the growth of other

service.

Anarchic

Conflicts

If

we track the recent trends in the newly developing markets, we

would observe that different service providers have been waging

relentless wars with each other to gain market shares. To cite

an example, cellular and paging service providers have been

competing with each other for a bigger pie but on close

analysis, the linkages between these two services are too strong

to be ignored and do not warrant competition. This has already

been proven in the advanced telecom markets where 60 percent of

the mobile phone users also carry pagers. The calls on mobile

phone can be diverted to the pagers and it is a very useful

proposition for the cellular subscribers to reduce their bills

where they also have to pay for the incoming airtime. In the

regions where the Calling Party Pays (CPP) concept has been

implemented, the callers need not pay higher tariffs for calling

up the mobile phone and can always send the messages on the

pagers and the mobile phone subscribers can call back, whenever

required.

Similarly, the fixed

service providers have gained tremendously from both the paging

and cellular operations world-wide where millions of additional

calls are being generated on the fixed networks.

Likewise, a higher

concentration of fixed telephone lines can be a boom for numeric

paging. The cellular phone service companies have a great

opportunity with the commencement of



global satellite mobile telephony and the satellite phone
companies have an option of positioning their GMPCS handsets as

normal mobile phones while being in the cellular phone companies’

coverage areas. With the integration of these two services into

one package for the customers, the mobile subscribers can cover

the entire planet. While availing of this dream facility, the

subscribers can also optimise the communication costs by using

dual mode handsets.

Internet is another

technology, which is driving fixed, cellular, and paging

services to the new realms of growth. The demand for tools like

e-mail and connectivity to office networks and databases is

growing rapidly in today’s business world and the use of

Internet has proved to be a very important driver for the growth

of wireless data market. The convergence of Internet and paging/GSM

technologies will provide the customer with access to a huge

reservoir of information in the mobile environment.

With the advent of the

concept of virtual mobile office, where the subscribers can not

only get their e-mails while on the move but can also do web

surfing at ease has attracted a large number of subscribers to

mobile services. Internet has, therefore, led to an increase in

revenues for fixed, cellular and paging service providers. Even

the data carrier companies can now take advantage of the new

trends of wireless data access.

With the convergence of

technologies becoming the order of the day in the advanced

countries, the cable is increasingly being used to carry voice

and data and a number of companies are seriously looking at

providing telephony and Internet services on the cable

television networks. The existing two-way cable networks

designed around fibre optic can create a super highway and can

reduce the infrastructure costs of building a fixed telephone

and Internet networks. This shall also result in providing a

quick access to the large base of cable TV customers. VSAT-based

service is also facilitating the creation of backbone networks

for paging and cellular networks especially for roaming and is

also resulting in major cost benefits to the



companies.

New

Perspective

It

is, therefore, imperative that different telecom companies need

to take a broader view and a combination of several technologies

and services can actually add value for the customer. It is

critical for different service providers to come together to

increase the level of co-operation to take advantage of the

additional opportunities provided by other services. A concept

of co-opetition instead of competition has to be evolved where

all the services thrive. The different service providers should

continuously interface with each other to work on areas of

mutual interest.

The first and the foremost

activity should be aimed at the finalization of benefits that

accrue to one service because of the other. Let us take the case

of paging and cellular services, which have an ample scope of

gaining from each other. The experience in the advanced

countries has shown that paging and cellular have been

extensively used as complementary services by the subscribers

and this has led to an increased customer satisfaction and

higher customer retention. Paging and cellular service providers

in the developing markets should forge strategic alliances with

each other and to effectively market this concept. This can be

done through an educative advertising campaign highlighting the

benefits for the subscribers and alternately, the companies can

also run a direct mail campaign for selling the concept of

paging as a tool to complement the cellular phone. Similarly

paging and cellular service providers can tie-up with Internet

service providers to extensively promote the concept and

applications of Internet to their



subscribers.

This will not only spur

the growth of Internet but will also help in creating a number

of applications for both the paging and cellular subscribers. In

the initial stages, the customer profiling data can be used to

target the heavy business users and this can subsequently extend

to other market segments.

Fixed service providers

should closely work with paging companies. One such opportunity

is to create a large network of PCOs which shall not only give a

fillip to the population of numeric pagers but will also lead to

increased revenue generation for the fixed service providers.

Likewise, there are a large number of other opportunities, which

the companies need to tap for the overall growth of the market.

In order to rope in more

and more customers, special tariff plans and packages should be

worked out for different segments of the markets. Joint

marketing teams from different service providers have to be

formed to maximize the focus on increasing the level of

co-operation and opening up new avenues for the service

providers. The technical teams have to work closely with the

customers to suggest optimal solutions according to their

specific needs and should aim at reducing the overall

communication costs of the subscribers.

The development of newer

and faster technologies is adding new dimensions to the telecom

services market and the service providers need to continuously

explore the newer areas, which can add value to their business.

The concept of co-opetition

shall go a long way to enhance the revenue streams, build

favourable brand equities, increase the customer retention and

ultimately lead to a win-win situation for everyone.

Ashish

Nagrath



is head (marketing and sales), customer telecom, Punwire