The Telegraph
Since 1st March, 1999
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Cell players in Reliance resist ring

Before the high-profile new entrant gets a chance to grab the market share, erect entry barriers. Adopting a fortification strategy to prevent a Reliance run, the existing cell players are going on the offensive and rolling out brand new plans. So, it’s advantage Calcutta customers, once again.

Both Airtel and Hutch — the private cellular operators in the city circle — have decided to match the registration amount of Rs 3,000 that Reliance is charging for its connection, besides 12 post-dated cheques of Rs 1,800. The two will now offer, for the first time, a yearlong pre-paid plan for Rs 3,000.

“This will create convenience for the customers to recharge just once a year. And the price, which works out to be Rs 250 per month, has never been lower,” says Deepak Gulati, chief executive officer, Bharti Mobitel.

This new plan is aimed at adding more numbers to the pre-paid segment, which has been the major growth driver in the past few months that have seen hardly any movement in the post-paid connections. “We have observed a flattening in the post-paid share, which now accounts for around 15 per cent of our connections,” admitted Gulati.

“Getting a connection has never been cheaper. And once all incoming calls become free after April 1, it will become more attractive,” said Sunil Sood, chief operating officer, Hutch, adding that new segments like housewives and students are now getting connected. “This new segment is the budget segment that wants to use air-time judiciously, reflected in the rise in pre-paid connections.”

Sources in Reliance brushed aside the efforts by Hutch and Airtel to erect ‘entry barriers’. While confirming that the test-run was well on course and that the launch would take place “anytime in March”, the cell war words went like this: “The response to our entry has been phenomenal, with the total new acquisitions by the two players falling short of the numbers queuing up for a Reliance connection. How can entry barriers work for the floating demand'”

As per the January figures of the Cellular Operators Association of India (COAI), the apex body of cellular operators, Airtel added 10,764 connections to its December figure of 188,237, while Hutch added 7,503 to its December head-count of 247,327 in the city. The numbers for BSNL — the state-owned telecom player — has hovered around 15,000 connections in the city for the past six months. But once its CellOne service is launched in the city, after a technology switch from C-Dot switches to Ericsson, the growth trajectory will be different, claim sources.

The war between GSM (Airtel-Hutch) and CDMA (Reliance), already visible at points of cellphone purchases, will extend to handsets (with Samsung and LG on Reliance ring), lock-in periods, billing cycles and a host of value-added services.

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