The paging industry continued to apparently stagnate with
nothing going right for it in 1999-00. This was largely because of Government’s
apathy towards paging vis-a-vis the cellular industry. This also reflected
paging operators’ weak lobbying capacity.
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Last year, Max Page and Usha Martin Telecom surrendered their
licences. The former was part of cash-rich Hutchison Max Telecom operating in
Ahmedabad, Bangalore, Hyderabad, Pune, Vadodara, Chandigarh, and Ludhiana. Usha
Martin operated in Jaipur, Rajkot, Indore, Vizag, Cochin, Coimbatore, and
Madurai. There are strong indications that some more are on their way out.
This is good as well as bad. Good because the reduction in
the number of players is likely to result in consolidation as there were more
than the required numbers of players. It is bad because it has sent wrong
signals to the banks and financial institutions. The paging operators were
looking to them for bailing them out of the current debts.
On the hardware front also most of the pager manufacturing
companies (except for SM Telesys Ltd) are on their way out. Motorola, Casio, and
NEC are reported to be on the verge of exiting from the pager market altogether.
SM Telesys holds more than 50 percent of the market share. What these companies
are selling are old stocks or importing on a limited scale to fulfil plummeting
demands. Others import directly from Hong Kong.
Snapshot |
Top Service Provider DSS Mobile Top Paging Vendor SM Telesys Total Services Market Rs 200 Crore |
Subscriber base also showed no signs of improvement. While 3
lakh new subscribers were added in 1999-00, ironically the same number
surrendered their subscription. Result: subscriber base remained stagnant at 6
lakh. DSS Mobile Communications, under the brand name Mobilink, remained the
number one player in terms of subscriber base.
The Hope
At a time when everybody is in a hurry to write its obituary
in India, there is a general agreement in the industry of paging making a
comeback in the next six months.
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The Group on Telecom (GoT), which was constituted in January
1999, is reported to have completed its report with a package for the paging
industry. This is as under.
-
TRAI to come out with a new plan for payment of the
pending licence fee. -
WPC charges have been abolished. Earlier it was Rs 100
per annum per pager. -
The licence fee for the 4th and 5th year has been fixed
at 5 percent and will be equal to this or less than this from 6th year
onwards. -
The licence fee on pager will also be brought down to 5
percent. -
Customs duty on pager will be brought down to 5 percent.
-
CPP to be implemented which will result in
revenue-sharing between basic and paging operator.
There is a wide consensus in the industry that if the above
recommendations are implemented soon, the industry will not only break even, but
also generate revenue in the next six months.
The Silver Lining of the Year
n The boom in the call centre market has opened a
floodgate of opportunities for beleaguered paging operators. According to
NASSCOM-McKinsey projections, the remote customer interaction services or call
centre market will be around $1.6 billion by 2004 and a whopping $3.7 billion by
2008. Paging companies, by virtue of their existing call-handling expertise and
the infrastructure, will pose challenge to dedicated mainline call centre
companies in the coming months. Last year saw almost every paging company start
call centre services to various multinational companies as well as various
government bodies. Indore Municipal Corporation has tied up with Modi Korea
Telecom for handling its civic problems. The residents call up Modi’s call
centre number and lodge the complaint. The company processes the complaints and
forwards it to the municipality.
Easycall has also entered into it in a big way. It has tied
up with Asian Paints, Satyam Online, ANZ Grindlays, American Express, State Bank
of India, Citibank, ICICI, and HSBC and handles call for them. MobiLink and RPG
have also diversified into the area. MobiLink’s facility is the largest of
these with 100 live seats. It has clients like General Motors, Opel Astra,
Hyundai, and Fiat Auto among others.
Not to be left behind, Microwave Communication has also made
its foray into the call centre bandwagon. It has started off with dedicated
manpower to handle corporate clients like NIIT, Godrej GE, Crompton Greaves, BPL,
Ponds, and Amex. It has presently 45 persons handling those calls. The company
is planning to get aggressive on call centre. Most of these call centres are
domestic in nature. It is exploring the possibility of tying up with a foreign
major to provide offshore-outsourced call centre facility. As the worldwide
trend is towards outsourcing, there is enough room for paging companies to
garner a major chunk of this market. SM Telesys has entered into a strategic
tie-up with New York-based Esquire Electronics to set up 10,000-seat offshore
outsourced call centre in India.
n The order by the communication minister for buying of
pager for the line staff working in the state capitals for speedy rectification
of line faults was also a big boost. In addition to this, DoT has also ordered
for distribution of pagers to line staff of Faridabad, Ghaziabad, Ambala, Pune,
and Coimbatore secondary switching areas. This is seen by the industry as a
major push and it is looking forward to other government and public sector
organizations that are engaged in providing services to their customers.
The Future
Speedy implementation of GoT’s recommendations, accompanied
by a reduction in number of players (by way of surrendering of licences or
consolidation of operators) in the paging industry will be the key driver to
future growth. Other factors, like creating a genuine awareness about the
utility of pagers among the prospective users through aggressive promotion,
followed by intelligent marketing strategy will go a long way. Call centre foray
should be seen as an alternative revenue stream and this should not lead to
relegating of paging.
Another revenue model that the paging companies should
explore is the burgeoning e-commerce in India. They should target and convince
large e-commerce portals about the utility of pagers to streamline their
delivery mechanism resulting from e-commerce transaction. Some analysts even
feel that operators should also explore the possibility of providing free paging
services with revenue coming in from subscribers. Reducing rental can also
increase the subscriber base.
One shocking revelation was that some companies are looking the easy way,
targeting each other’s corporate customers, instead of difficult way of
creating a new customer base. Competition is fine, but at this point in time,
when the industry itself is passing through a rough patch, this is highly
uncalled for.
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