The Power of ABCD

A recent news item on how the ABCD (Aaya-Bai-Carpenter-Driver) syndrome is
bothering the two CDMA majors Reliance and Tata Indicom, was very interesting.
As both these giants are still not getting the high-value creamy subscribers,
they now want to arm themselves adequately and start going after subscribers
that will get higher ARPUs-a key business consideration.

Were these not the operators who were sometime back accusing the GSM vendors
of being ARPU minded, not bothered about talking telecom to masses? Very sad,
but the very people these operators had promised to empower, are becoming a
burden. While there are big time gurus working out the strategies for these
companies, here are a few words of caution for them.

Ibrahim Ahmad Editor

The power of ABCD factor is for real and not just an illusion, if that is
what the CDMA operators have begun to think. The whole world of telecom,
starting from technology and solution vendors like Nokia, Ericcson, Qualcomm or
Lucent, is working on mantras that will help them get the next 1bn subscribers.
And all of them believe that this next 1bn will be a very different set of
subscribers-they will want much cheaper handsets, and much more affordable
tariffs. However, at the same time they will happily want to move up on the
value chain of services, if they get real value and not notional value.
Therefore, if the world is gearing up to catch this fish, it might not be the
best idea to start looking at other targets. Lower CDMA average revenue per user
compared to GSM might be worrying operators but that is a short sighted
approach.

The ABCD type of users have proved to the world that technology does not
scare them. On the contrary, they have taken to quite a few
value-added-services. There are innumerable cases where carpenters,
electricians, and plumbers are using phones to offer better and faster response
to opportunities, reach out to more customers, negotiate better, and finally get
more income. They see this as a business enhancement tool. There is every
possibility and scope to get better ARPU from aaas, bais, carpenters, and
drivers.

Besides this, when CDMA operators start gunning for the creamy layer, there
is also going to be quite a lot of confusion and chaos-both internally, as
well as in the market place. Their mass-market approach might have internal
conflicts with the class market approach, as the two will surely have to
co-exist. Weaning away old time GSM users will not be easy, and not many people
will want to carry two phones around.

Very interesting to watch at this stage will be BSNL, which perhaps for the
first time, is reportedly working on a brand-building plan with some big
agencies including Grey Worldwide, Euro RSCG and RK Swamy BBDO. Otherwise,
branding is known to be a forte of players such as Airtel, Reliance, Tata,
Hutch, and Idea. This game plan is reported to be to promote its entire services
portfolio not just to tap new subscribers, but to strengthen and enhance its
relationship with the existing 50 mn subscribers.

The incumbent has the country's widest mobile network, and has been adding
subscribers like nobody's business. In many locations beyond the metros and
the A and B category cities, the tussle is often between BSNL and the Reliance
and /or Tata Indicom. And if Reliance will shift focus from these locations, or
go behind the creamy layer in these places, the biggest beneficiary will be BSNL,
which as an integrated service provider, can be a deadly competitor. The
incumbent also has the financial muscle to acquire millions of subscribers at
lower ARPU with a longer-term objective in mind. One hopes that the CDMA players
plan does not back-fire.