The 40th plenary of GSM MoU was held in New Delhi—the days following Diwali—in a jubilant mood. Besides the festival, there was another good reason to be jubilant. World-wide, the GSM subscriber base had reached 100-million mark in July 1998, three months earlier than expected. It implied that GSM operators around the world were signing up a new subscriber every two seconds.

As the global pace continues, GSM MoU Association expects more than 120 million subscribers by the end 1998—almost double of 70 million at the end of 1997—and 300 million by the end of year 2000. It is believed that like previous forecasts, this would be exceeded too.

Role of Mobile Phones

These figures pose more than a challenge for mobile phone manufacturers, not only in terms of sheer volume, but also in conceiving and positioning the right product in the market at the right time to meet the ever changing customer requirements as the market widens to encompass new segments and applications.

Mobile phones play a critical role in reaching the target segments and creating new markets. They form the key component of the packaging or bundling by the operators—the mix of cellular subscription (i.e., SIM card, sometimes a pre-paid), the phone, and, if not a pre-paid, some free airtime and services mostly in a giftable carton. In a developing market, it becomes critical to ensure not only "availability" of mobile phones but also "affordability" for acceptance of the service. This throws enormous challenge for operators to devise smart bundling strategies all the time.

The information age is heralding new range of mobile phones as data, fax, and E-mail are emerging as the norm for a mobile phone. GSM Phase 2 and 2+ are going to implement even more value-added services requiring Smart Phones.

The mobile phone manufacturers have to anticipate market shifts several months in advance to ensure that their products fit the needs of the desired segments.

Micro-segmentation

The discerning market today necessitates careful segmentation of the market—and to be more precise micro-segmentation—to go deeper into consumer needs and address each of them with the right products and packages. The mobile phone becomes an important element in such an exercise and the operators look towards phone manufacturers to come out with the best fit which obviously needs enormous advanced market research, planning, and investments.

The Festival Times

Diwali brings exciting times for consumer market with demand for new products and services. The focus is on young and trendy, and a package for gifting away. Two festive packages were launched in Mumbai as well as Delhi, using one such offering—the "One Touch Club" from Alcatel.

Max Touch had a bumper promotion in the month of October 1998. Subscribers enrolling between 1 October and 31 October were eligible to participate in the "Max Touch Diwali Bonanza" contest which offered two free international return air tickets from Air India every day. Bound to fly!

AirTel too announced "gift a service/phone" scheme to rope in more subscribers during Diwali with an objective to enter newer segments—the young and the trendy—as well as channelize the enormous money spent by people on the gifts during the festival season. Gift to win!

The success of these packages once again establishes the importance of segmentation as well as the role of mobile phone in the packaging or bundling.

Another advantage of choosing GSM, the largest used digital cellular technology now, for the Indian subscriber is that he is able to get the latest and the best of the GSM phones as used by the subscribers elsewhere in the world.

For instance, the One Touch Club, which is called as Safar in the UAE, has already captured about 25 percent of the market there, besides selling one million pieces with SFR in France. Its flashy cousin, One Touch Easy—a hot favourite with Bangloreans too—with 30 percent marketshare has sold two million pieces as part of the "OLA" package of France Telecom. It is extremely popular with the Malaysians too. Both models are very much in vogue in South Africa also.