41700734 Online Prepaid Mobile Recharge Patterns

Online Prepaid Recharge Patterns - India

Preface:

The following report analyses the avg. spending pattern on mobile talk-time by users of various operators and circles. A brief analysis of payment method used to make these transactions is also included.

1. The Data is from 100,000 transactions done on Freecharge.in between Sept. 1st 2010 to Oct 17th 2010.

2. The Data covers 10 telecom operators (including MVNO), viz. Aircel, BSNL, Docomo, Loop Mobile, Idea, Reliance, S-Tel, Tata Indicom, Virgin, Vodafone. Amongst the major Operators, the report does not cover Airtel and MTNL.

3. The payment methods available for the users were Credit Cards (Master and Visa Only), Debit Cards (7 Indian banks and all Visa Electron cards) and Net Banking (36 Indian Banks).

Key take-away:

1. Vodafone users spend the highest on prepaid talk-times at around 15% more than the overall avg. of Rs.128.

2. Aircel customers spent the least at around 21% lower than over all avg.

3. Karnataka is the highest spending circle – around 16% more than the avg.

4. Avg. ticket size on credit card transactions is 34% higher than Netbanking transactions and 83% higher than Debit card transactions.

5. SBI customers prefer using debit cards for online transactions whereas ICICI customers use their Netbanking account.

About Freecharge.in

Freecharge is an ecommerce service that offers mobile recharge of all major Indian operators. Freecharge makes the service a little special by offering discount coupons of nationally renowned retail brands for free along with the recharge. Say if you recharge for Rs.100 you will also get coupons worth Rs.100 of your favorite brands for free.

Freecharge is in its 3rd month of service is already seeing over 3000 transaction everyday. Its 50,000+ fans strong active Facebook community is a proof of the popularity that it has gained in so small time.

Freecharge.in – Mobile Recharge Made Free

http://facebook.com/freecharge

http://freecharge.in/

http://freecharge.in/

1. Overall Operator-wise Ticket size comparisonThe avg. recharge amount has seen a big variation with Vodafone users’ spending almost 50% more than Aircel users. The overall avg. ticket size was Rs.128.

2. Operator & circle-wise ticket size comparisonVodafone subscribers were the highest spenders across all 3 major circles.

3. Circle-wise ticket size comparisonDelhi subscribers are spending about 8% less than their counterparts in Karnataka.


4. Payment Method Volume Share Debit cards were the most preferred payment method for the transactions made. A notable reason for this is the target group focus of the site was students and freshly employed people who use their ATM cum Debit cards online for a transaction. Clearly the Debit card users are low spending users with an avg. ticket size of Rs.96.3. The avg. ticket size for transaction made through credit card is almost 83% higher than Debit card users.


5. Payment method & its bank share On comparing the various banks for the payments the avg. ticket size did not fluctuate noticeably within the same payment type. Though there were clearly leaders in each payment type.

Amongst credit card transactions Visa was a leader with almost 2/3rd transactions being paid through a Visa card.

Debit cards were the most popular mode of payment and SBI was the clear leader with around half of the transactions being processed by SBI Debit cards. PNB was a distant second processing about 14% of the total transactions. Remarkably, ICICI users were not very active in using their Debit cards.

Netbanking is very popular amongst the ICICI customers, with almost 1/3rd of the netbanking transactions coming from ICICI users. SBI is a close second with 25% of the total netabnking transactions.


PREPAID RECHARGE

• Fastest growing Industry in India .

• Total Industry Size ismore than 1 lac crore .

• One of the Largest Employer in India .

• Pre Paid segment is more than 80% of the Telecom Industry .

• Vast Emerging Market .

• Vehicle for economic transformation in rural areas .

• One of the fastest growing company in Pre paid recharge

• Pioneer in technology to integrate all telecom companies recharge on one single mobile phone

• In House software development with latest technologies

• Trying to provide a solution for the problems faced by the telecom industry

PROBLEMS OF TODAY’SDISTRIBUTORS

• It requires a huge entry cost to start a recharge business .

• It involves a lot of hassels in this industry when retailer has to keep different set for each and every telecom operator.

• Inventory Cost is huge.

• Retailers are harrased and forced by the distributors to sell new sims in lieu of providing the Flexi recharge load to them.

• It takes a lot of time for retailer to deal with so many agents coming on regular basis from all telecom companies.

• There is no proper service to the small retailers by the distributors.

• There is no proper service to the retailers based in villages and towns .

• Problems in accounts and maintaining a log for all seperate service providers and seperate handsets.

SOLUTIONS PROVIDED BY TOP RECHARGE

Ease of Operation .

No need to maintain too many handsets , with different chargers.


Single inventory for all the services.

Easy to deal with only one distributor .

Ability to provide recharge through web also.

No Need to maintain different accounts , all logs are available through sms and web .

DTH companies recharge also available on single mobile phone.

Dedicated customer care center to provide solution for all problems.

Huge savings in handsets and inventory.

Further integration of upcoming companies.

PROJECTION OF PROFIT FOR DISTRIBUTORS

SECURITY DEPOSIT (REFUNDABLE) BY DISTRIBUTOR = RS 5 LACS

KITS PROVIDED TO THE DISTRIBUTOR INITIALLY= 1000

(REST ON DEMAND)

ACTIVATION FEES FROM RETAILER = 0

DAILY SERVICE CHARGES FROM RETAILERS = RS 3/ DAY.

MINIMUM GUARANTEED INCOME EVERY MONTH = Rs 25000

PROFIT CALCULATIONMARGIN ON LOAD FOR DISTRIBUTOR = 0.5%

MONTH TOTAL KITS DISTRIBUTORS MARGIN FROM SERVICE CHARGES @50%

RECHARGE OF 1000 RETAILERS @ OF RS 1000/DAY

TOTAL EARNING ON RECHARGE @0.5%

TOTAL EARNING /MONTH ( SERVICE CHARGES +LOAD )

FIRST MONTH 300 13,500 90 lac /month 45,000 58,500

SECOND MONTH

600 ( 300 New)

27,000 180 lac /month

90,000 1,17,000

THIRD MONTH1000 ( 400 New)

45,000 300 lac /month

1.50 lacs 1.95 lacs


COMPARISON OF INVESTMENT AND EARNING BETWEEN NORMAL RECHARGE BUSSINESS AND TOP RECHARGE

NORMAL RECHARGE BUSSINESS

INVESTMENT HANDSET LOAD

Airtel 1500 2000

BSNL 1500 2000

VODAFONE 1500 2000

IDEA 1500 2000

TATA 1500 2000

Relaince 1500 2000

Tata docomo 1500 2000

Ping 1500 2000

aircel 1500 2000

DTH

Videaocon 1500 5000

Tata Sky 1500 5000

Dish TV 1500 5000

Sun Direct 1500 5000

Big Tv 1500 5000

ITZ cards 5000

TOTAL 21000 48000

GRAND TOTAL 69000

TOP RECHARG

INVESTMENT—

KIT 0

HANDSET 1500

LOAD 5000


TOTAL 6500

SAVING –

INVESTMENT IN NORMEL RECHARGE BUSS. – INVESTMENT IN TOP RECHARGE

= 69000- 6500

EARNING= AVERAGE 2.5% / DAY(RETAILER)

INVESTMENT = 6500 RS

RETAILER’s EARNINGS

LOAD PER DAY

RS 1000

RS 2000

RS 3000

RS 4000

RS 5000

RS 10000

EARNING PER DAY

RS 25 RS 50 RS 75 RS 100 RS 125 RS 250

EARNING PER MONTH

RS 750 RS 1500

RS 2250

RS 3000

RS 3750

RS 7500

INTEREST ON SAVING OF Rs 60000

RS 1200

RS 1200

RS 1200

RS 1200

RS 1200

RS 1200

TOTAL EARNING

RS 1950

RS 2700

RS 3450

RS 4200

RS 4950

RS 8700

1. You need to register with a dealer:This is absolutely free. What it entails is for you to be known to thedealer either by name or by other means of identification. They willhave your email address and you will have installed their software onyour computer. Payments for PINS (vouchers are sold as PINS to thesub-dealers who need to print them) will be made to the company’saccount number and accompanied by a text message stating howmuch PIN you want.Example: send me MTN 100 (100 PINS), I have paid to your account.VCI nig ltd, [email protected] that its important you call the dealers to confirm if they have onground what you intend to buy before going ahead to make paymentinto their account.2. You need a computer with or without internet connection.


3. You will need a printer which can be either colored or black andwhite4. A flash drive (USB) is also required. This is especially needed ifyou are not having personal internet connection. In other words, youneed to go to cyber-cafes to copy the encrypted PINS from your emailbox.5. You will need pre-printed Papers: Dealers will give you samplesupon request. You can then give it to any printer to make copes foryou. Plain papers can also be used. The most important thing is tohave clear prints.Bulk order is very important in this business the minimum orderplacement you can make is 100 units of any voucher denominationyou want. Dealers sell PINS in 100s.6. Internet connection is required as PINS ordered for will only besent through the internet. That is by email. If you have personalinternet connection that is cool! If you do not, it still ok just that youwill have to be visiting cyber-cafes occasionally to copy your PINS.An important point to note here is that you must avoid downloadingyour PINS unto the computer at the café. Download into your flashdisk and transfer to your business computer. This is to guide againsttheft by anyone. Also ensure that your email password is very secure.If you don’t have an email address, ask a family relative that you trustor friend show you how to create one today.Recharge vouchers transactions are mainly routed through emailsexcept in the case of a principal dealer that provides you otherequipment such as orange box.Therefore, you need to open a valid e-mail for your business if youare not having one before. Recharge vouchers to be sold to you as adealer, is sent in an encrypted form called PINS.They are usually encoded by your principal dealer for securitypurpose. You will be given a password to decode it afterdownloading.You must register online with your principal dealer in order to facilitateeasy and reliable trading with him’. This would enable them create arecord on their database for your business transactions.

India’s telecom market is experiencing explosive growth– Crossed 217 mn subs by Oct 07 with net adds of nearly 8 mn subs / month over last 4 months– Despite continued record growth over last 12 months, only 23% of 1.1 bn population owns a phone– There are 6-7 telcos operating in each of 23 license areas. Airtel, Reliance, Vodafone & BSNL, who are “the Big 4” have 74% market share


– Growth is expected to continue and even accelerate, reaching a projected 496 mn mobile subs by 2010

• Near term outlook shows a continuing focus on acquiring new low end customers– Improved regulatory structure has lead to increased competition, and operators aggressively tailoring strategies to acquire customers across all segments by making mobile services more affordable and increasing coverage– Prepaid users comprise over 85% of total subs and over 95% of net new additions, further adding to the impact of tariffs on falling ARPU– Almost half of Indian mobile subs use low cost handsets and this is expected to increase further with new additions– Further innovation in entry-level handsets and call tariffs will continue to drive growth– Operators will need to look at alternative revenue streams like VAS as they mature

• Traditional VAS has been primarily SMS-based, with Bollywood and Cricket the largest content drivers– VAS services contribute approx 7% of total wireless telecom revenues for Indian operators– Total market size of VAS was USD 678 mn in 2006, projected to touch USD 926 mn at the end of 2007– Most VAS services are provided over SMS, IVR and WAP. Revenue growth has been driven by SMS (including P2P, A2P, P2A), contributing over 55% of total VAS revenues in 2006– Bollywood & cricket remain the killer content, whether for SMS alerts, ringtones / CRBT, games, wallpapers, etc.

rechargeit.now provide service to 22 operators


Documents

41700734 Online Prepaid Mobile Recharge Patterns