The sheer size of the market in India and China means even small % changes lead to large numbers. Any marketer competing in these markets need a strategy and structure that can handle such large numbers, failing which the promise of the profits of high volume will never materialize.
Here are some really large numbers on the mobile service market in India.
- The market is huge, 1 billion population and is growing at about 1.7% a year. That is about one Florida every year.
- About 500 million mobile subscribers, 66 million are added a year. That is two Canadas per year.
- Everyday the total mobile conversation minutes add up to 6 billion minutes. 1% change means 60 million minutes. That is 133,333 iPhone subscribers using up their 450 minutes.
- Prices are on the fall as service providers try to lure customers with low prices. Prices stand at about 1 cent/minute, that is $60 million revenue per day.
- 10% price cut means a profit loss of $6 million per day. If the price elasticity of demand is 1, the increase in load is 600 million minutes per day ( that is 1.13 million iPhone subscribers …)
- Everyday subscribers send about 1 billion TXT messages per day.
- Again price war is pushing prices from 0.6 cent per message (already a very low number) to 0.02 per message. That’s a profit loss of $5.8 million per day.
- Churn rate is 5-6% per month, highest in the world. That is 30 million subscribers, the size of entire Canada, switching subscribers every month.
- To support this large subscriber load large infrastructure investments are needed. Get on the roof of any tall building and look around, you will be amazed by the number of cellphone base station towers you can see.