September 11, 2008

"Why do we need to pay for making phone calls?" This was the question that came to my mind while I was glancing at my phone bill. Why the phone calls can't be completely free, I thought. Well, it is indeed possible, at least in India!

Telephone tariff has significantly come down. Rs. 1 per minute call charge is routine. The question is how to make it completely free – no call charges; no rentals.

The key to free telephony is advertisement revenue. This is one area which most of the telecom service providers have ignored till now. The blind focus on increasing ARPU (Average Revenue Per User) has hardly bore fruits. A paradigm shift and rechristening of ARPU as Advertising Revenue Per User may open a goldmine.

It will work on these lines. The more a telecom consumer talks, the more advertising she hears (fixed number of seconds per minute of talk time), and the more money an advertiser pays to the telecom service provider.

Here are some of the options to generate advertising revenue sufficient enough to make telephony free.
  • Caller tunes to turn into 10 second advertisement. When someone makes a call, instead to hearing some song, he gets to hear an AD till the time the recipient receives the call.

  • When the call gets started, first 10 seconds of every minute are advertising time. Balance 50 seconds are talk time. Advertising and talk time cycle continues till the time call ends.

  • Every SMS that is sent has a footer advertisement of 25 characters.

  • At the end of every call, the caller and the receiver receive an advertising SMS.

  • Balance inquiry SMS has a footer having a 25 character advertisement.
Will consumers mind being exposed to so much advertisement?
Every sane individual knows that there is no such thing as free lunch. When a consumer is not being charged a penny to talk endlessly, she has to give something back. In this case, this something is 10 seconds to hear annoying advertisements for every 50 seconds of her talk time. Any rational human being like me would accept this fact of life even if she gets annoyed by the frequent intrusion of advertisement. We all are habituated of hearing rubbish all the time – at home, office, street, TV and where not. Does it make a big difference if we are forced to hear 1 minute of advertisement for 5 minute of free talk on phone? In India, only a fool will let pass this opportunity for free unlimited telephony! In any case, those who don't want to listen to the advertisement can always opt for the paid telephony option.

Will telecom provider find enough advertisers for profitable operation?
Of course yes. There are two compelling reasons for advertisers to opt for this new advertising medium. First, there can't be more apt medium for highly targeted advertisement. Telecom providers maintain excellent database of their customers which includes personal details. In any case, when offering free telephony, telecom service providers can always ask for more personal information from their customers to help the companies find right target audience for advertisement exposure. Second, it's a medium where the consumer can't shift channels to ignore advertisement. They are forced to hear it all, actively or passively, as they are still on line with the other person. These two reasons will not only fetch advertisement revenue for telecom service providers but will also help them in asking for a premium over other advertising mediums.

What it means for advertising industry?
It's a sweet-n-sour deal for them. On one hand it will open a new source of revenue; on the other hand it will demand high level of creativity and out-of-the-box thinking to survive in this medium. In this new medium, only 10-second ads are possible to ensure that the operation runs with least glitches. So telling all stories for all brands in 10 seconds flat would be the norm making the whole process extremely demanding.

A caveat for telecom service providers
This free telephony would result in quantum jump in talk time volume leading to acute network congestion. So strengthening of telecom infrastructure to cope multiplication of call volume is a necessity. Without extraordinary infrastructure, the concept of free telephony cannot take-off.

Isn't the idea of free telephony in India an idea that can change the world of millions? I feel it is. Will someone say, "What an idea sir jee?"

4 comments

  1. sug // September 23, 2008 at 5:00 PM  

    well i can't resist saying it here...."WHAT AN IDEA SIR JEE!!!" :D

  2. sajjapraveenchowdary // September 23, 2008 at 11:45 PM  

    Hey Mayank,

    Just wanna tell u that I had thought of something similar to this an year ago but, at the same time I had some things which might make this plan a bit problematic w.r.t the infrastructure, consumer mentality, etc.

    1. If you offer such free services, there are lots of consumers I believe in India, who will use the mobile for the atleast 10 hours out of 14 hours they are awake on a 24hour day.

    2. And if this happens what should be the amount of spectrum required and the quality to be maintained by the companies. Added to this would be the number of towers to be added by the companies. I mean to say that the efficiencies which work out on to the profits of the company would be affected.

    But still if these things can be worked out... No one will resist from saying "WHAT AN IDEA SIRJEE??"


    Regards

    Sajja
    http://schizophrenicthoughts.blogspot.com

  3. amit sinha // September 25, 2008 at 5:44 PM  

    its a great idea - the consumer should have two choices - pay and no ad, free and ads, and as the call duration gets longer the frequency of ads keep increasing (some 1-2 second pings every 30 secs). people won't mind for free calls and advertisers will pay.

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