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Low price, high impact
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#1
When you are the 14th entrant in a fast growing but highly competitive product or service category, how do you stand out? Or when you are almost the last to introduce a new product or service that competition is already pushing hard, what can you do differently? When you are an established player in a competitive business, what do you do to create fresh growth? And when you are standing at the doorway of a high-growth product category dominated by big, international brands, how do you get noticed and consumed?

When low pricing becomes a common solution for all four scenarios, you sit up and take note. So when Uninor, owned by the world’s sixth largest mobile services provider, the Telenor Group (Norway), entered India in partnership with Unitech Group as the 14th mobile service provider, it had to stand out noticeably.

It launched its unique variable discount plan, with discounts of five-to-60 per cent – 20-to-47.5 paise on a 50 paise per minute rate — on local calls. The variable rates are beamed to mobile phones by the different mobile towers, the discounts governed by a tower’s load at that time. Uninor has 21,000 towers covered in a tie-up with Tata Tele Services Ltd. and is talking to Reliance and Indus. It has a licence for all 22 circles.

“We are putting the power of the tariff in the hands of the consumer,” said Olav Sande, EVP – western hub, Uninor India. “Our discounts are supported by high technology. Our efforts are towards long-term excellence in 2G services.”

Also well thought out was Tata Sky’s low pricing on its high-definition DTH set-top boxes, when it launched its HD services after Sun Direct, Dish TV, Airtel DTH and Reliance Big TV had launched theirs. To offer the imported set-top boxes at a low Rs 2,599 — to speed up subscriber acquisition or upgradation — required hard negotiations with the manufacturers, said Vikram Kaushik, MD & CEO, Tata Sky.

“The business of DTH is in selling long-term subscription, not set-top boxes. The real expense for the consumer is on the HD TV set. He wouldn’t be willing to pay a high price for the set-top box as well. The HD experience is still to impact,” Kaushik explained.

Tata Sky’s move has triggered a price war, with Dish TV reducing its Tru HD set-top box price from Rs 5,990 to 2,990. Airtel Direct, is advertising Rs 2,250 now; it launched with Rs 2,840. Sun Direct’s HD box launched at Rs 9,990 and Reliance Big TV’s at Rs 7,990. Tata Sky claims demand has exceeded box availability.

Full Story: Indian DTH Blog

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#2
Maintaining long-term subscription with existing subscribers will be possible by offering attractive discount and other benefits on new launches such as HD, HD DVR.
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