One of my notions about the developed nations was cheap availability of basic necessities of life, which in modern world subsumes communications along with food, clothing and shelter. Hence, I was quite taken aback by the exorbitant calling rates in Germany. This topic sprung back to my mind after I happened to read about the proposed AT&T take over of Aircel.
The article mentioned that only about 25% of India’s population had access to cellular services and hence AT&T was keen to capitalise on the immense growth potential of the Indian cellular market. This prompted me to analyse my earlier query in greater depth.
Let’s do some number crunching to arrive at a rough estimate. Considering India’s population to be about 1.2 billion, 25 % of that would mean about 300 million cell users. Leaving out the old Germans, who are certainly not acquainted with the gizmos, kids and the few below the poverty-line, who can’t afford cells, claiming 75% of Germans own mobiles wouldn’t be that wild a guess. Since the population of Germany is about 80 million, that adds up to 60 million cellular customers. Now, say an average Indian talks about 10 times as much as an average German - I am certainly not exaggerating here. Germans could easily be the most laconic people in the world and Indians, the most garrulous – that would amount to 50 times as much talk-time consumed in India as compared to Germany. The local calling rates in the 2 countries are around Re.1/min and 25 cents/min. That would mean that even under current conditions, Indian cellular service providers earn an estimated 3 times as much revenue as their German counterparts. If you also take into account the fact that we in India are charged ridiculously high rentals (I don’t have an idea of the general picture, but T-Mobile didn’t charge me a dime for its 3 month service.) and also the huge gulf in the salaries of the employees in the 2 countries, you realise why they need to have such high calling rates in Germany.
In spite of all this, the above discussion has an inherent Indian bias. While we have to pay roaming rates to make and receive calls once outside our states, the rate is same wherever you travel in Germany. That just multiplies the profits of Bharti, Reliance and co manifolds.
5 comments:
I disagree with you. (Although admittedly my experience with Vodafone Germany having raped my cell phone balance is colouring my point of view on this :P)
Consider the fact that this is Europe as a whole that we are talking about. Many operators are pan-European. 500 million people, and a far higher penetration rate -- I would guess that the number of cell phone connections is the same as India.
The different countries in Europe are like the different telecom circles in India. Haven't worked out what the price of a call should be here, but it would be far less than what it is now!
arent there separate operators in all the countries?
i dont think neone subscribes T-mobile in switzerland ... its either swisscom or orange ... u have to accept the economies of scale greatly favour indian operators.
Orange is owned by France Telecom. In Europe it's in France, Belgium, the United Kingdom, Switzerland, Austria, Poland, Portugal, Slovakia, Romania, Moldova, and Spain.
Vodafone is in Albania, Czech Republic, Germany, Greece, Hungary, Ireland, Italy, Malta, Netherlands, Northern Cyprus, Portugal, Romania, Spain, Turkey, UK, France, and Poland.
T Mobile is in Austria, Germany, Croatia, Czech, Hungary, Macedonia, Montenegro, Netherlands, Poland, Slovakia and in the UK.
Telefónica, which owns O2 and Movistar, is in Spain, Czech, Slovakia, the UK, Ireland, Germany, and Italy.
The number of subscribers per company isn't small. All of the above companies boast 50 to over 100 million subscribers EACH.
Compare this with the biggest Indian provider -- Bharti. 70 million. And there are a lot of other small providers present in only one or two telecom circles.
Economies of scale?
More like people here can pay, are willing to pay, hence they pay.
the revenue of a service provider isnt only dependent on the no. of subscribers ... its directly proportional to the talktime consumed ... as i already mentioned in the blog (and although that was put in for the purpose of houmour its true none-the-less)people here talk a lot less than indians ... they would need 5-6 times more customers at the very least to sell the same amount of talktime ... thats where economies of scale come in
about the same company being in different countries ... the difference betn roaming rates n local rates here is not as large as it in india ... also i dont know this but wont they have to pay separately for the bandwidths in the different countries?
n all services are costly here man ... n mechanised manufacturing is cheap
n well i do agree that the companies here charge higher coz they know ppl can pay but no way they can sustain with rates as low as in india
Post a Comment