Study of pricing policies of cellular service providers

Abstract

The cellular phone has redefined the communications landscape in India. With an installed base of nearly 90 million1 in the country, the market for cellular phones is still expanding rapidly. With this proliferation of cellular phones, there has also been a great increase in the number of ‘schemes’ that consumers can choose from. In this context, we seek to study the behavior of the consumer when deciding on a telecom service provider (TSP) and a specific scheme offered by the telecom service provider (scheme). We begin with a description of the TSP market. Next, we compare the 2 major categories of TSP schemes – prepaid and postpaid. We proceed to discuss the TSP’s perspective regarding various schemes. Having set the background for the project, we present our survey/experiment methodologies and analysis. The project comprises 2 major threads: - A questionnaire-based study of the buying behavior and usage patterns of cellular phone users with respect to choice of TSP and scheme, and the marketing implications. - A generic, experimental study of the decision-making approach of consumers when faced with varying sizes of choice sets. From this generic study, we seek to draw inferences useful to TSPs.