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Telecom Companies Revive Value of the Indian Paisa

Sanjit Chatterjee
Tuesday, June 1, 2010
Sanjit Chatterjee
Visiting us during her vacations, Manjari, my teenage niece, asked me if I would help her with a summer project. I agreed. It involved the study of coins. The curious kid wanted to know what a one-paisa coin looked like. Her next question: ‘What can one paisa buy?’

We were amused as to why a teacher would give a ‘one paisa’ project when the cheapest toffee costs 50 paisa, or around one cent. Manjari’s search into the shape, size, and metallic content of one paisa coin landed her at the Reserve Bank of India’s (RBI’s) monetary museum. She learnt that over a period of time, the cost-benefit considerations led to a gradual discontinuance of 1, 2 and 3 paisa coins in 1970s.

Then came a discovery of sorts. There was something that was worth a paisa — offered by the burgeoning, yet highly competitive, Indian telecom industry. For just one paisa, one can talk to someone in the farthest corner of India for one second, or send an SMS of 160 characters to any one of the 600 million mobile phone users in India. Not only that, one can extract more from the service provider if the bill plan is well chosen. Of course, it also depends on the desperation of the service provider to acquire and retain a customer.

The Indian telecom industry, the world’s fastest growing, must be credited with applying all the marketing tricks ranging from product or service sampling, marginal costing, happy hours, family and friends packs among others to hook the customer.

This explains the offer for sending 15,000 SMSs for Rs.99 (around $2) a month — a cool 3 SMSs for 2 paise. Or for just Rs.299 (around $6.5) to call 65 hours, or full-hour of talking with your mother for under Rs.5 (11 cents). If your circle of friends extends nationally, at Rs.599 ($13.3) per month plan you can talk for 65 hours, packing in 60 minutes of calling for a little over Rs.9 ($2).

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