The Future Is Cellular!
T. Arun kumar, DOMS, MKU,
MADURAI, TAMIL NADU.

The cellular industry is one of the most happening industries in the world and the scene is no different in India. Infact it is the developing countries that stand to benefit the most from this industry, as the developed countries subscriber bases have already reached the point of saturation. A recent World Bank study states that with every 1% increase in the tele-density of a nation, its GDP stands to rise by 3-4%. And what's more, it is the cellular connections that are going to rise this number more than the traditional fixed lines. Isn't that a good enough reason for the government of India to concentrate more on this industry? And that's exactly what it is doing.

The cellular industry in India has come a really long way from the time the first cellular connection was operated on the 23rd of August 1995 by Modi Telstra in the city of Calcutta. Today there are 14 cellular operators who are gunning for each others throats in the 24 cellular divisions spread across the country. With the industry growing at well over 70% annually, a current subscriber base of over 7 million and the Cellular Operators Association of India (COAI) projecting the subscriber base to touch the 50 million mark by the year 2005, the sky is the limit for this industry.

With a penetration rate hovering around the 1% mark, there is still abundance of potential that s to be tapped in the sector and the news on this front could not be brighter and the revenues will be moving only in one direction-North.

Currently the industry in India is passing through a very interesting phase. With the controversial handing over of the WiLL licenses to the fixed line operators, and with a whole lot of Mergers & Acquisitions happening at the heels of one another, the operators sure want to grab the biggest piece of the cellular pie and establish themselves in the market. With the advent of the third and fourth cellular licenses into the various circles, there will now be 8 brands in each circle fighting to outwit one another. Many of the cellular operators are also going in to revamp their brands to keep in sync with the changing profile of the cellular user. The cellular user is becoming younger, less educated, from the lower income households and yes, he s becoming more and more demanding and will settle for nothing but the very best.

The usage of the cell-phone, which was once the domain of the pot-bellied, well-to-do businessman well past 35 years of age, today, is seen with kids who are totally at ease in handling these sleek and snazzy handsets. Now, anyone above the age of 14 is seen as a potential customer in this thriving industry. Most operators are moving in to create a younger image for their brands. The recent moves of Hutchison to change their "Hello", to a more informal and cooler "Hi" of Hutch, and the BTAL, ditching the reliance cn banking on the big brand names of Tata, Birla and AT&T and opting for a more innovative "!dea" with an exclamation mark are just proof of this. Or even take the case of Airtel which was once endorsed by the Big B today sees the ravishing Kareena Kapoor and the flamboyant Shah Rukh Khan doing the rounds. Its Madhavan and Sourav Ganguly in Tamil Nadu and Kolkata respectively. Oh yes, the target customer has become younger, a lot, lot younger. Apart form the subscribers who are joining the base becoming younger, the average educational qualification of the cellular subscriber is also seen to be declining. There are a large number of people who are joining the subscriber base and do not even have a basic degree. The subscriber base which once used to be dominated by the businessmen, Self employed Professionals and the office going executives, today sees the shift towards the segments that include clerks, supervisors, petty traders students etc. Therefore it is only obvious that the monthly household incomes of the subscribers as well as the Average Revenue Per User (ARPU) will decline. Infact over the last one year the ARPU has seen a decline from Rs.1740/- to Rs.1700/-. This say experts is not a sign to worry about, as this phenomena is seen in all economies where there is a great increase in the cellular subscriber base. This decline can be offset by the fact that the marginal expenses incurred with each additional user are also heavily declining.

With the competition getting stiffer and the cellular subscribers getting a lot more choosy, The operators are only too happy to indulge them. With giants such as Reliance, Tata, Bharti, Hutchison all willing to throw in the big bucks the users are in for a party! Bharti, which is the leading player with the largest number of subscribers in its kitty, is reported to have raised Rs.2850 crore purely from IPO and foreign partners. Tata has a war chest of Rs 10000-14000 crore and the turnover for the Hutchison group was a whopping 7206 crore in the last year alone. Now with BSNL having licenses for 22 of the 24 circles and planning to invest 14076 crore into the cellular industry and aiming to become leader in the market, the potential of this industry cannot be exaggerated.

Today in the cellular industry the cell-phones no longer ring, they sing! Yes, the future is bright and the future definitely is cellular!

L. K. ABRAHAM
DOMS, M.K.U.

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