I swear (on GOD), that I can just about manage to run a Company, keep investors happy, drive cars on both sides of roads and even identify a western classical musical piece, but I just cannot understand my mobile bill.
Consider this simple chart:
In Mumbai (Maharashtra), if you want to get a post-paid connection, these are some of the options: (haven’t considered some of the latest entrants):
| Operator | Noof schemes
|
Total Items on the ‘Confusion Menu’ |
| Tata Indicom | 11 | 11 |
| Airtel | 19 | 30 |
| Vodafone | 13 | 43 |
| ITunes | 16 | 59 |
| BSNL | 8 | 67 |
| Idea | 9 | 76 |
| Aircel | 8 | 84 |
| MTNL | 15 | 99 |
| Reliance GSM | 11 | 110 |
| Tata Docomo | 6 | 116 |
So, let’s assume that you go to a gas station driving your car, harried, late for a meeting and ask the pump attendant to “fill her up”. “Sure!”, he says and gives 116 options to choose from (what I call the item on the confusion menu in the table above). “Sir!”, he says, please tell me if you want “super 149 or saver 99 or gold 599 or Lifetime of ……” (brand names of the 116 choices)
Depending on how your day has gone, you will either:
- Shut the car, walk out, thank God for the sunshine and hail a cab. Hell to the world… and cars and 116 types of gas choices…
- Blow your fuse and create some healthy blood pressure for yourself… hell, we have to die some day anyway..
- Tell him “Boss! – Fill in whatever you want – I have to quit in 5 minutes”
- Be a moron and say “Acha (ok), let me ‘study’ the plans”. So you park your car on the side, take the 116 print outs of the options and then spend 8 hours studying what you need to buy… (Remember you are a moron).
Telecom Companies BET that you are the Choice 3 person ( Charge what you have to but get on with it types) and that’s how they thrive!
Why creating confusion is the best way for profit maximization:
Have you studied your mobile bill carefully? Can you really claim that you know EXACTLY what is being charged for what? The different ‘schemes’ of sms, Internet gprs, talk time, roaming local, roaming international blah blue blee…?
Creating unpronounceable and incomprehensible cost plans make you weak – they make you drop your guard and say the golden words ‘whatever’.
How this works:
- By creating massive confusion on the pricing, telecom companies take your attention to the easiest thing you can understand – your ‘budget’ or monthly commitment to your mobile bill. Let’s say you make up your mind to spend Rs 1000 (US$ 20) per month on your bill.
- Immediately, you have stopped paying attention to what you will GET by paying this amount – rather you will have already committed on what you will GIVE someone.
- When sharks-like Telcos get you in that mindset, they create myriad and bloody awful pricing plans that GIVE you the LEAST and GET them the MOST.
- Interestingly, they measure their quarterly performance in monthly ARPU ( Average revenue per User) – how much they make you pay per month!
- As you trudge along, a stray colleague or friend will give you a ‘tip’ on how to get the best ‘scheme’ or mobile plan. You secretly call the operator up, make a few changes and feel satisfied. You just fooled yourself all over again.
The SOLUTION
- The TRAI (telecom regulator authority of India) has to allow folks to flip operators but not their mobile numbers ASAP. This is called Mobile portability and means that you are no longer forced to stick to one Operator for the rest of your life since he sold you a mobile number! Its like signing up to fill petrol from the same gas station for the entire period you own a car!!
- Once this happens, a simple MARKET of ‘Mobile Minutes’ and ‘Mobile SMS’ needs to evolve – almost like buying Gold or Silver from Banks or from commodity exchanges. In a country where 400-500 million people consume a daily requirement (talktime and sms) this is hygiene!
- So, if I want to buy 300 minutes – look up the ‘best rate’ at that time (and so 100+ operators can compete basis what minutes they can offer and at what rate) and you snap it up. Same for SMS. It’s just like saying – I want to buy 100 shares of a company – look up BSE/NSE and buy it there and then. Add to this, consumers should also be able to SELL unused minutes at their price choices – truly making this a highly LIQUID market.
The confusing Indian Mobile Tariffs!
Confusion has always been the creator of ill amassed wealth and profits. Information is the enemy of confusion and brings order, competition and massive efficiency.
The same applies to the Indian Telecom industry. The players need to quit confusing 500 million consumers and deliver the truthful value to them.
You may also like, ‘Alok’s driver plays obscene film songs on his mobile and why Alok pays for it‘
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Originally posted on May 24, 2011 on rodinhood.com