Consumer

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JIO – An Analysis of Prospects and Challenges

Published January 15, 2017 by vishalvkale



JIO – An Analysis of Prospects and Challenges
A common refrain, question, discussion point among at least us Telecom Professionals {those outside Jio at least} centers around what it is doing, what it plans to do, what disruptive impact it will have on services as well as devices and whether it will achieve whatever objectives it has set out for itself. My humble submission here is one simple statement: the key question is not among the points being pondered above; the real question is whether it, or indeed we as a nation, can afford it to fail? Indeed, does Jio have a choice in the matter except do what it is doing?
Before we move into details, just look at the numbers involved: as per Telecomtalk & Economic Times articles dated January the 14th 2017, it has infused 1,71,000 Crore into this venture; another 30,000 Crore is being planned. That brings the investments to 2,01,000 Crore. Its current subscriber base is between 67-73 Million Customers as on date, and is expected to touch 100 Million subscribers as per the news articles above. That means Jio will have to rake in 600 Rupees per month per customer just to recoup this {what I think is} Capex assuming a payback period of 10 years for the same. This does not account for Opex and other expenditure, system ugdrades that will be needed in future…
But, increase this subscriber base to 100 Million, and the required ARPU rough estimate falls drastically to Rs. 434. At 150 Million, this falls even further to a much more realizable and realistic 289 Rupees, which is far nearer to what the current ARPUs are today. Thus, it doesn’t have a choice… and neither do we.
WELCOME COMPETITION
Rather than worry about the disruption – and there has been, & will continue to be, disruption – let us welcome it. It is a harbinger of better services to the customers. Yes – for the industry and the employees, it does mean a very challenging and yet rewarding time; yes – it does involve, pain in the short term, perhaps medium term for the employees into this industry as well as for some companies. But for the customer, the future is exceedingly bright, as this disruption and ensuing competition will not just depress prices {sadly}, but also, hopefully, unlock innovation and development of
DISRUPTION
Disruption is not always bad, though it is always and nearly without exception, painful. It forces industries to introspect, set things in order, cut the wastage and the incorrect steps, and move forward. Added to this is the impetus it gives on giving a better end-customer experience. Let us take the Jio example. I have not used Jio services, but have used others, and on 3 handsets. The experience is very revealing, if you consider from a customer usage experience
I have tested the 4G as well as 3G speeds for the past 2 odd years nearly half-a-dozen cities in Western India as well as on journeys. The average 4G speed I register is around 5mbps, and highest I have ever experienced is 14mbps {once only} and the lowest 4mbps. Now these speeds are 3G speeds or 3.75G speeds; 4G experience should be at least 7-8mbps, ideally or optimally above 10mbps for a superb 4G experience, perhaps higher. Let us not get too specific or technical here.
IMPACT
Now the entry of Jio will cause, or rather force the competitors to invest in upgrading their networks in order that the customer gets a superior experience; they need to do this – as indeed they already are beginning to do. This is the first positive impact of competition induced disruption. Second, it will expose customers to a superior service along with all its advantages, unlock greater uses and scope of usage, open up new usage avenues that the greater speeds will bring,. It will also further develop other nascent markets – like the online video and content space, as an excellent example. As market size increases – as seen above – prices crash, further creating new market space…
ONWARD HO!
This brings us to the core ground reality+: currently, 4G phones are available starting around 4K; how many customers can afford that range, given our per capita income? How do you pull in new customers? You have to give a value offering; thus – the focus on a 4G experience at cheaper rates of devices. This will open new markets, as well as improve viability for Jio.
THE COMPETITION
In one word – it has no choice either. Both in services and in devices, there is a felt need for new innovative thinking in terms of a variety of areas. Companies, though currently hamstrung due to earnings issues, will need to find the space and the capital to innovate and improve their offerings. Fact of the matter is neither wing of this industry is making bushels of money – services or devices. And I order to maximize stakeholder values, they need to solve this conundrum – Jio or no Jio… namely, how to get more customers into the 4G fold….

    


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15 Days Only On A Smartphone {Understanding the internet – 3}

Published September 4, 2015 by vishalvkale

The Internet, The Digital Age and Social Media is all over and ubiquitous, at least in Modern Urban Life; everywhere you look, everywhere you turn – you can spot its presence, its over-arching and all-pervasive influence. Virtually every news media, every conversation on the topic of the internet – all of it focuses on its all pervasive presence and the impossibility of staying without the internet & social media  on a personal level.
This is now getting into an entirely new field : The Smartphone. It is increasingly thought that the power of the smartphone can replace the old desk- and laps by a segment of thinkers; that the smartphone can do just about everything; that it is now as essentiality; that be it personal or professional, you cannot survive in the modern world without the smartphone; that it is not a luxury but a felt and present need, as essentiality.
Life put in my path a chance, an opportunity to test both hypotheses, this all-prevalent understanding, this universally accepted truism by virtue of a transfer to Nagpur, without my Laptop or Desktop, at the mercy of a smartphone only till my new asset was allocated to me by the central team.  And truth be told – while at the official level, it may pose challenges, at the personal level, I have enjoyed it immensely, as it has exposed me, or rather reintroduced me to joys long forgotten, methods and habits now thought dead… 
On an official scale, it did pose many challenges- not insurmountable, but still challenges. It is just not feasible to get the same level of productivity on a smartphone as it is on a laptop; while basic tasks can be achieved with a modicum of ease and even convenience, complex and long tasks require the comfort of the laptop. That said, I cannot function without a smartphone anymore – not professionally, not anymore. Neither can I do so without a laptop – I require both. 
On a personal scale – it did not pose any challenges. There was not even one single bad point of not having a desktop or a laptop; it was a complete waste and a completely useless product, having no value addition. Not one personal task suffered, not one inconvenience was caused by not having access to the desktop or the laptop. Of course, you might comment that there was the smartphone : but hold on just a minute…

In the past 15 days, my usage of the smartphone was minimal for my personal purposes. While on an official level, I cannot function, I just cannot function – on a personal level, much to my surprise, I found myself quite comfortable not using the smart functions of my smartphone. I minimised my presence on Whatsapp, was sparing on LinkedIn and Facebook, and so on : and I did not miss it. Let alone miss it, to my tremendous surprise, I found I quite liked it.
  
I chose to call my relatives in place of Whatsapp messaging; as one example. I chose not to respond to comment on facebook and other social media and so on. I could go on and on; but the fact remains that on a personal level, my life suffered no major hiccups without the smart functions. This does not mean that the smartphone is useless; I did use it for important tasks – like ticketing, googling important things like stores in Nagpur, locations etc
 The impact of this conscious effort at abstinence on a personal level were learnings on professional and personal arenas; in the personal arena – many occasions and tasks, which could have been easier with a little bit of support, became hard in the absence not of the smartphone or the internet, but of the absence of the proper supporting infrastructure like apps and payment mechanisms. Not using the smart capabilities for these tasks revealed the immaturity of the overall market and that it has still a long way to go before being fully relevant and developed
I stopped playing games –  no Candy Crush, no Subway Surfer – nothing. I found a lot of time for neglected aspects like reading, which broadened into interest areas I would not have thought of earlier; I found other ways and means of using leisure. I rediscovered the beauty of the night sky and the environment, found a like-minded person who is interested in wildlife, found the inclination to plan a visit to the nearby Forest…
Can we function on a personal level without a smartphone? In Urban India, not really. But is it an essentiality, an unavoidable reality? Happily {being from Telecom}, No. I say so because while I minimised my usage of the smart capabilities of my phone, I could not take them to zero usage. Railway ticketing, option hunting, house hunting etc would be pretty much impossible without a smartphone. Thus, being from the Handset Trade, I am happy that the smartphone is now a ubiquitous presence in large parts of India
I found my residence in Nagpur on the Internet on my smart device; I found a job this way; I found many locations and other titbits of information that way; I got great value addition.  Most critically, not one task came up where I felt that I missed a Desktop or a Laptop. In my personal space, that had no value. But all of this together did not use up much data, and therein lies the rub. In a nutshell, while the smartphone was a massive value addition in important tasks and is irreplacable, removing it from my personal space proved to be a value – plus.
This places two clear challenges for the app space and for the service companies : the absence of offline payment mechanisms and their easy access {Cash cards, itzcash etc}, are one area of deep concern. The complete absence of apps that can really add value in personal tasks was another area. But most importantly, the fact that all my personal tasks taken together did not use more than a few hundred MB of data is a clear indication of the trend for the service industry in Telecom, and its challenges, but more of that in another article in this series. Let us leave this thought here.   
I close this article with one thought  : is social media over-rated? In 15 days of minimum usage, I have noticed no problems in being absent from Social Media. Sure, it is needed and a nice way to keep in touch and being informed, but it is, beyond a point, completely useless; moving away from Social Media has caused no problems so far as I can see. As a matter of fact, it has lead to positives in many ways…

CORPORATE INDIA AND THE CONSUMER : MAGGI / INSURANCE AND ITS LESSONS

Published June 7, 2015 by vishalvkale

Is the consumer really the king, as a multitude of marketing books proclaim her to be? Or is it a mere empty nice-sounding statement? Recent events would lead the cynic to question the entire premise of “king” or “queen” or anything remotely comparable; conversely, these same events would lead the avid supporter to comment “It is a mistake”, or “it wont happen to me” or “This is a one-off event”, jumping to the defence of Corporate India, who cuts their paycheck in that they are employees in some company or the other. Well, the same Corporate India cuts my paycheck, and I see no reason to defend it, or not ask  some pretty hard questions of it.


Before we continue, read this beauty from the Times of India Article : “I am the real hand behind Maggi action, ‘junior’ food inspector says” : “Not to be outdone, Singh said he had followed the case for more than a year; … he picked up Maggi samples from a Barabanki market on March 10, 2014. “We sent them to a Gorakhpur lab for investigation. The tests showed presence of lead and high levels of monosodium glutamate … Singh said he wanted to be doubly sure before he took on such a major company. So, he collected the samples again and sent them for a separate test. “The results were the same. The noodle had eight times higher than permissible presence of lead and MSG … “I notified Nestle about the irregularities. The firm challenged the tests and demanded a fresh test at the Central Food Laboratory in Kolkata. Even there, the results were the same

A few startling {or not-so-startling} facts jump at you : firstly, that the tests were repeated thrice on fresh samples, and that secondly  this was escalated to the company. We have no knowledge of the internal steps they took {to be fair, we are not supposed to have any}; why didn’t the company act on its own, after a unilateral investigation, and pull out the suspect stocks from the market? Why were the stocks still on sale even a year after the incident? Assuming this was limited to a particular batch, why wasn’t immediate action taken? Why were similar results found in several states in tests recently conducted? Why was a new product launched without prior approval from the regulators, in defiance of the laws of the nation?


The FSSAI also noted that a new product, Maggi Oats Masala Noodles with Tastemaker, was launched in the market without product approval necessary under Section 22 of the FSS Act. “What is disturbing to note is that the company had already released the said product in the market without completing the process of risk assessment and has been promoting its sales. This is illegal and a serious violation of the FSS Act, Rules and Regulations,” it said. – See more at: FSSAI order: All nine Maggi Noodles variants off the shelves

This article isn’t about Maggi, or Nestle; it is about Corporate India and the Consumer. I could have just a easily used any other example : it is just that this is a fresh case, and recent in public memory; it is also the first case in India that has lead to a nationwide recall forced by regulatory developments. Finally, it is easily the best documented and hardest-hitting case in India in my memory.

The question that emerges is : for us in Corporate India, is the Consumer really the king? Is the customer really the center of the organization, and do all departments and levels connect with equal vigour and attention to customer needs? Had this been the case, any number of complaints in the consumer courts would not have happened; take the example of misspelling in Insurance. This Article {Business Standard :  Insurance mis-selling our problem, too: RBI}  exposes the concerns and the reality. The article lists 168482 complaints of fraudulent business practices. I could, with a little research, quote many more examples; but these two should suffice.

Do our internal systems really encourage a consumer-focused team? What do we do when sales dip : blame the sales and marketing teams – or do a deeper analysis of what competitive reasons {along the lines of the 4Ps as well as the broader environment} were there behind the slack  in sales, before blaming the sales team? Do we really have a system, an operational system wherein the customer-facing people are responsive towards customer feedback, and is there in existence a functional and operating feedback mechanism? Is it really feasible for an employee to give negative feedback without fear of personal loss regarding excesses? Do employees trust the feedback mechanisms, whistleblower initiatives, and other internal systems to escalate problem areas?

Sure, we have the consumer as the king or queen when we design the product; but when it comes to running the business, somewhere along the lines, the consumer centricity gets lost in all the hoopla around numbers and profits and returns on investment. Internal checks cease to be as rigorous, practices get condoned {168432 complaints, remember?} and thus become ingrained. And once you reach an acceptability status, then the worries recede, focus is lost, and complacence sets in. Things which ought to set an alarm ringing get ignored. Short cuts get taken; the pressure to deliver numbers leads to slackening of controls on all departments in an enterprise.

Our approach – internally – is to get the numbers; just sell to the consumer. How do we reconcile this with the consumer is king? Be it FMCG or be it Insurance, the approach is the same; I know, having done both. In both the cases above {FMCG / Insurance}, it is clear that there were gaps in both consumer centricity, and a manifest disregard for the written law, if the enclosed report is correct. These 2 cases reveal two aspects : one, the product design and manufacturing aspect, and the other the sales aspect. And in both cases, it becomes obvious that the consumer is not the king.

You know lead is dangerous to Humans; how did the high lead content get into the product? If it was one sample – it could be an error in the Lab; but, based on current data and evidence, this has been revealed in a multitude of tests in several places. Either you made an error : or they did. If they did, please prove them wrong scientifically; all of us would be thankful to you. Similar is the case of insurance mis-selling : prove the customer complaints as flawed – or look in a mirror and chance the internal systems and processes to make them more robust.

Moving on, are our employees aware of the requirements of the law in our respective product categories? If you say yes, prepare to answer my questions on the legal requirements – and be sure to state specifics and laws. Do we really know the laid-down laws relating to our products? Answer : I have yet to attend a training in any company that teaches the legal framework governing the industry in detail. Reason : apparently, it doesn’t concern us in Sales and Marketing! We are expected to sell, without fully understanding the legal framework!

Let me underscore : we, the actual sales people, are expected to sell without having even an iota of knowledge of the laws relating to the consumer as they are applicable in our industry! And, as the icing on the cake, management pundits claim that the consumer is king. She may be the queen while acting in concert to determine marketshare; but she certainly isn’t the queen on an individual basis, that much is certain.

If the consumer were the king or queen, quality certifications would be much more rigorous than is currently the case; vendors would be expected to and grilled on quality for each dispatch or replenishment; each consignment would be checked; the first complaint gets action from the very top of the company; the first customer complaint of proven misconduct gets the sales and marketing guy terminated without notice regardless of performance data; each customer facing function would get top priority and so on and so forth. That this doesn’t happen is a manifest truth.

So Tell Me, Corporate India, Tell Me : One Of Your Own Employees : Is The Consumer Really King? Further, if companies think that they can continue to operate with the same internal systems and processes that they have hitherto taken recourse to, they are missing the signs on the wall : increasing consumer activism, regulatory activism, court activism, and a much more aggressive central government combined with an overactive media and social media. You don’t have a choice:

Corporate India, Change! Or, this time, it is the Government and the Market that might force you to change!