To lure fresh consumers to new product categories, especially in smaller towns, consumer goods companies successfully adopted the sachets model a few years ago. Taking a cue from them, telecom service providers also introduced the sachet model early this year. It worked well, too.
The Re 1 plan
In April, Bharti Airtel, the country's largest telecom operator, started offering video content for just Re 1, making it sound affordable for everybody, especially for mobile users in the rural and semi-urban markets. It was an instant success, helping Airtel not only in increasing data revenue, but also in acquiring new customers.
During the June quarter, Airtel got four million new first time mobile internet users, taking its total video store customer base to 12 million, said the company.
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Data consumption has jumped 117 per cent to 27.3 MB during the first quarter, and at the end of June, 24.4 per cent of Airtel subscribers were data service users, up from 20.6 per cent a year ago.
Traffic volume on Airtel LIVE increased to 22 million in July 2013, from just 12 million in March 2013. About 52 per cent of Airtel's data users are from rural telecom zones. Karnataka, Andha Pradesh, Tamil Nadu, Delhi, Rajasthan and Uttar Pradesh (East) registered maximum data adoption for Airtel.
According to Airtel, Bollywood movie songs videos are most popular, followed by fashion videos. Interestingly, most of these customers are not smartphone users. About 80 per cent of these offers is being availed of by the feature phone users.
Why is it attractive?
Convenience is the key. "People who have never used data service may not be willing to pay for the whole month. Rather, they could be interested in trying out a few new things on pay-as-you-go basis," said Mritunjay Kapur, country managing director, Protiviti Consulting.
"People would not think twice if something is available at just Re 1 at this time when almost nothing can be availed of at this price. This was well structured marketing of service."
Not only Airtel, other companies are also expected to replicate the sachet model.
"We observed a strong need for simplification of the vocabulary through which people related to mobile internet - that is, stepping away from the GBs and MBs and talking to customers in the language of content, product and services that they identify with," said
N Rajaram, chief executive (data services), Bharti Airtel.
"With this in mind, we launched Re 1 Video Downloads. The service saw over a whopping 12 million users leveraging the mobile internet experience in a matter of days, of which 50 per cent came from rural India."
Is it really affordable?
While Re 1 sounds cheap, the reality is that consumers are paying more. According to Airtel, about 65 per cent of Re 1 video download customers have consumed 1-5 MB of data for each video.
At present, companies offer 1 GB data for Rs 125 a month, which means 1 MB of data costs just 12.2 paise for the monthly pack users. Considering that a video requires 5 MB of data, in the Re 1 packs, a consumer is paying 39 paise more for a video, compared with the monthly data pack users. There are plans for one paise per 10 KB data, or Rs 1.02 an MB.
But it makes sense for the first time users, said Kapur.
"Consumers would not mind paying some extra as there is no monthly commitment. And, the user profile is also different. These people are unlikely to go for monthly data plans," he added.
Going the trial way
The country's second largest mobile carrier, Vodafone India, had, launched 'One Time Trial Packs' in April at Rs 25 for 2G and Rs 49 for 3G, offering customers 500 MB of data, with a validity of seven days.
As Vodafone India chief commercial officer Vivek Mathur had said at that time, it was launched to lure non-internet users.
"We have introduced a new category of trial packs to make mobile internet more interesting," he added. The response was "very good", especially during the Indian Premier League (IPL) season.
Aircel, similarly, has pocket internet at Rs 24 with a validity of 30 days.
On the other hand, Idea Cellular has different data trial packs available for different telecom zones, starting from Rs 5 packs for 30 MB of 2G data for one day, to Rs 25 trail packs for 250 MB data for seven days.
Sistema Shyam Teleservices, which provides CDMA services under the MTS brand, too, has data plans priced as low as Rs 5 (for 8 MB usage with single-day validity).
Uninor, offering only pre-paid services, has plans for Rs 9 for 60 MB of data for two days.
This is not all. Airtel also has different sachet offers, such as Rs 3 pack for unlimited Facebook for a day, 400 MB of data for Rs 9 between 11pm and 6am and four movies for Rs 30.
More in just Re 1
Last month, Bharti Airtel announced the launch of its virtual Rs 1 Entertainment Store following its success of Re 1 a video concept. Now, Bharti Airtel has decided to offer music, video, games, photos and internet browsing packages for Re 1. Users can also avail of 3 MB data for Re 1, which is valid for just one day, to access Facebook, Yahoomail, Twitter and LinkedIn. Consumers will have to pay additional volume-based changes beyond the 3 MB limit.
