Telenor India:Underdog‘s

Innovative pricing Strategy

Presented By –Sandeep Mishra

Abstract Abstract

This case study helps in understanding the concepts of Price strategy and different degrees of Price Discrimination, in the Microeconomics course.

The growth of the telecom industry in India backed by privatization since 1991, new players are emerging, making the telecom field a combat zone.

The case study explains the pricing strategy of Uninor, a new entrant.

It captures the growth of Uninor and the effectiveness of its "24X7 Badalta Discount Plan" launched in late 2009.

The case revolves around the potency of Uninor's weapon over other giant players in both the short run and long run,

About - Indian Telecom Market About - Indian Telecom Market

In Year 1851 is a start of Telegraph lines in India.

In1882 telephone exchange was opened with 93 Subscribers.

After 1947, the growth seems to be slow in Telephone sector.

Monopoly Of the Government in 1984.

In 1985 departments were separated though P&T and DoT created.

MTNL established – with motive 0f 2 reasons.

In 1990 Government welcomed private companies by framing NTP.

In October 1,2000, BSNL a new entity by DoT was created to mange operations for different parts of country.

In 1997, a separate body TRAI was setup.

Exhibit 1Exhibit 1

The Busy Lines – Rise of industryThe Busy Lines – Rise of industry

In mid- 2000s Indian telecom sector is on growth due to GoI’s decisions.

The no of subscribers increased from 33.7 million in march 2004 to 391.7 million in march 2009.

Teledensity increased by 12.7% in march 2006 to 35.65% in Feb 2009.

Urban teledensity increase seems to 11% in 2002 to 83.66% in 2009 while rural came to 13.81% in January 2009.

By the end of 2010 in India became the 2nd largest Telecom Market.

By 2013 India was expected to become the largest mobile market in the World.

The growth Lure other foreign as well as domestic players to enter Indian Telecom sector.

Exhibit 2Exhibit 2

Uninor – The New Entrant ( Uniteach+Telenor)Uninor – The New Entrant ( Uniteach+Telenor) Unitech was granted a 2G license for both national and international long

distance for all 23 telecom circles in India.

In 2008, Telenor was the world’s seventh largest telecom operator .

In December 2009,Uninor launched its mobile services in seven Indian Telecom circles

Uninor was the 14th operator to enter the competitive Indian cellular market and the 8th pan-India operator with a license in all 23 circles.

Uninor rolled out its service in 13 of the 23 telecom sector.

The government had allocated a 4.4 mega hertz(MHz) start-up GSM spectrum in these 13 circles.

Uninor concluded tower sharing agreements with wireless TT Info Service Limited and Quippo telecom infrastructure limited (Quippo)

Uninor outsourced infrastructure maintainance.

Exhibit 3Exhibit 3

Uninor- PromotionUninor- Promotion

Launched its brand and logo in college streets and shopping malls .

Launched TV ad campaign- “ Ab Mera Number Hai ”

Promotion in “ Kumbh Mela ”

Introduced “ Cell On Wheels ”

Launch of “ Uninor Blue Brigade ”

Launched 24x7 “ Badalta Discount plan ”

Exhibit 4Exhibit 4

Scintillating tone: discount pricingScintillating tone: discount pricing

24x7 Badalta Discount Plan offered a discount- 5% and 60% on the 50 paisa chargeable per minute of call.

Optimal utilization of BTS.

50% more traffic per BTS could be handled which will help to delay the congestion of network.

 A new concept of ‘dynamic pricing', offering mobile call charges as low as 20 paise per minute.

Company was confident of posting profit in the short term because they would not get into a price war that might bleed the business.

Exhibit 5Exhibit 5

Uninor Dialing: Corrupt SignalsUninor Dialing: Corrupt Signals

50% of the total Indian population and over 90% of the urban population subscribed to mobile services.

India was fast approaching saturation.

Indian telecom industry was saddled with problems like:-

Infrastructure problems

Huge competition

Declining ARPU

Uninor also had specific issues of its own like it has invested heavily in a company that had not build any infrastructure ,had no subscribers and cash flows

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