This blog allows me some degree of freedom to share my own personal experiences.
I had been to a “dhaba”( road side eatery in literal terms) here in Mohali where I am based as of now. The shop owner started off with serving food and as the business grew, he added on a sweet shop. With more customers, he added a general store. Each time he made sure that personal attention was devoted to maintaining the quality of food. Each individual complaint is handled personally and the prices are rock bottom. Ostensibly he believes in low margins high volume business which is far more profitable from what he would earn if he sold his stuff at fancy prices.
Important to note this is that there is no “image problem”. The fact is that families flock in and so do the people who just “hang out” there.
How is it relevant to Telecom blog? Well, for long I have been stressing on Telecom business in India. This is what I would call it as the “dhaba model” of selling products. As you introduce the plain vanilla telecom service of connecting people, value added services provide the crucial differentiation factor including the possibility of charging exclusive prices.
Riding on the advertising boom, Airtel declared huge profits. Well, frankly I am not impressed. First there is no way that their claims can be verified or atleast I am not aware of the same. Then, I have been reiterating the fact that Airtel may finally be sold off to fund Bharti’s plans in infrastructure where arguably more money can be invested for higher returns. Airtel has been consistent in huge ad spends without being able to increase it’s Average Revenue Per User(ARPU)- this fact that they deny having any importance now.
Reliance has been able to peneterate the market effectively. The believe in the dhaba model of selling. I see their advertisements only when they come out with any new scheme. Infact, very straightforward billing systems. I know that there is a potential for controversy here; fact remains that I am satisfied with their services.
Ultimately, for any new player, this dhaba model is important. This is one way that these companies can survive instead of coming out with promotional offers which does nothing but confuse the potential and existing customers. Infact there is a big scope for cheating too. One never knows that plan shifting is done without the consent or knowledge of the customer.
TRAI is sleeping over it, no doubt.
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