RIM PREPAID OFFER

RIM's Pre-Paid Offer

• Entry price  Rs. 3500/-
• What customer gets
• Motorola Mobile handset - C131
• 10  Vouchers Worth Rs.  3240/- (= talktime of Rs.  2000).
• Coupons must be used in 6 months.
• A 6  month  "grace  period" (after expiry of original 6 month period), during which customers continue to receive
• SMS
• Incoming calls

WITHOUT recharging their account.

(NO GSM operator offers this facility).

• At present 7  lakh  -  8  lakh prepaid card users get introduced to the all-India mobile network every month. There is also a 7 -8%  growth in the total user-base on a month-on-month basis* (Source: ET - 09-03-2004)

Reasons to move full force into Prepaid Market

• Cash is collected beforehand
• "NIL" cost of collecting bills (Currently 1%  =  3% of revenues)
• Drop in ARPU will be neutralized by the larger subscriber-base and ease of collecting money.
• As many as 13% of existing POSTPAID subscribers are NOT paying their bills - may be more!
• NO  (or  reduced)  Churn, since (prepaid) customer gets locked-in for 12 months.

RIM's Assumptions/Game-Plan

• To rope-in 4 million new Customers in the next 2/3  months thru the prepaid offer
• To shift (to Prepaid mode), 30/40% of Its existing postpaid Customers.
• To ramp-up customer-base to 17/18 million by March 2005 (from existing sim 6  million).

	Postpaid Customers	Prepaid Customers
March 2004	6 million (100%)	- (0%)
March 2005	14  million (80%)	3.5  million (20%)

 

RIM's ARPU

• March 2004  mathbfRs.  1000  /  month
• March 2005  mathbfRs.  750  /  800  per  month
• Offering "FREE" handset with PREPAID offer, will attract large numbers.
• left. beginarrayl Airtime rates  of RIM's  CDMA  Prepaid endarray right approx left beginarrayl Airtime rates  of other GSM  Operators'  Prepaid. endarray right.

Continuation

• Pass-on the "risk" (of non-payment by subscribers) to the retailers by forcing him to buy  all  10  Coupon - set, along with handset  right  upfront! Let him hold/carry  the  "unsold"  inventory  at  his  cost! So,  inventory  (of  unsold  sets)  remains  with  the  distribution - channel,  instead  of  with  RIM.
• (Downside: Retailers may not hold large inventory and place orders on RIM only, as & when, customers demand. This may "starve the market").
• Advt/Promotion Budget  mathbfRs.  60  Crores in 2/3  months
• 5000  spots in 40  TV  channels
• 1  million  Sq.  ft  of  hoarding - space
• Advts in 70  publications
• 600  exclusive  distributors who will only sell "prepaid"

RIM Mobile Applications

• Information
• Entertainment
• Communications
• Commerce
• Enterprise Applications