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V. Rishi Kumar

Hyderabad , Dec. 14

THE Rs 99 package offered by cellular operators has proved to be a big hit. This is the first time cellular rentals have hit the sub-Rs 100 mark.

This has witnessed two distinct trends - one, many of the pre-paid customers are gradually drifting to post-paid plans and two, first-time entrants are directly getting hooked to the post-paid segment.

The Rs 99-plan was first started by the state-owned Bharat Sanchar Nigam Ltd, the first operator to offer cellular service for students. Thereafter, other cellular operators lined up their offerings. This has kicked up hectic activity in the post-paid segment and if the numbers are any indication, about 20-30 per cent of the new acquisitions are from this sub-Rs 100 offer. So much so that AirTel now calls it `Formula 99'. The Chief Marketing Officer of Idea Cellular Ltd, Mr Sukantha Dey, told Business Line that the recent customer acquisition trends indicate that about 20 to 30 per cent of the subscribers inducted to the post-paid schemes are in the Rs 99 Buzz plan. A good number of the pre-paid customers are getting converted to post-paid.

"With the handset costs also drifting lower, and the option of a rental as low as Rs 99 a month now for customers, we see a huge new segment of people acquiring cell phones. For instance, busy professionals like a plumber or for that matter a carpenter or even a mechanic are beginning to look at the post-paid option.," Mr Dey said.

Giving a different perspective, the Chief Operating Officer of Hutchison Essar South Ltd, Mr Kumar Ramanathan, said, "You need to assess the overall impact on the customer. While the Rs 99 plan may have proved to be a hit with a lot of new customer acquisitions, look at the value it actually brings. We believe this works out costlier than the Rs 150 plan offered by cellular operators.

"This is a direct selling business. A customer actually visits an exclusive outlet, discusses with an executive and decides to take a particular plan. He is first convinced about the advantages a particular plan brings to him then takes the decision. All those who have already hooked up to the Rs 99 plan will have a re-look once they receive bills about the overall impact of the plan. The per-minute rate is higher."

Mr N.V. Subba Rao, Vice-President (sales), Bharti Mobile Ltd, said, "Formula 99, as we call it, has helped us acquire and enter a new market segment wherein this has proved to be a good entry-level offer. Even in the Rs 150 plan, we had done extremely well. While these are early days to give the exact numbers as to the acquisitions, a lot of middle-income groups, their spouses and family members, and student segments are likely to get hooked up to mobile telephony with this offer."

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