Nokia Money pilot begins in India (video)

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India’s Mobile Phone Hitmaker

Micromax is grabbing market share from Nokia by giving Indian consumers what they want: inexpensive, quality phones with long battery life

On a hot summer afternoon in 2007, executives at a small Indian pay phone company called Micromax noticed a curious sight. In a village in the eastern part of the country, they watched people line up next to a man with a car battery strapped to the back of his bicycle and hand him a few rupees to plug their cell phones in for a half hour’s worth of charge. The villagers’ homes didn’t have electricity.

Less than a year later Micromax sold its first cell phone, the X1i. It came with an oversized battery, a small screen, and tweaked electronics that made the phone run for as long as five days, and on standby for as many as 30 days. “It was really the most obvious thing to do,” says Vikas Jain, who co-founded the company in 1991 with three friends. “Here was something that provided customers a feature nobody else had bothered to give them—battery life.”

Micromax’s approach has attracted interest from Boston-based TA Associates, a $16 billion private equity fund that invested $45 million in the company in January for an undisclosed stake. “We did spend a lot of time with the broader universe of Indian phone makers,” says Naveen Wadhera, a TA Associates Advisory director based in Mumbai who worked on the deal. “But what we specifically wanted was someone with a real focus on product and a real effort at innovating. The others have a bit of a me-too sort of strategy.”

Nokia’s India Vice-President and Managing Director D. Shivakumar is dismissive of the Indian phone-making competition. It doesn’t take much, he says, to hop a flight to Shenzhen, China, and put your own sticker on a phone. “You know, Nokia’s one of those companies that nobody pays attention to when it does well,” he says in a conference room at Nokia’s Gurgaon offices. “It’s like when Roger Federer wins at Wimbledon, nobody talks about it. But lose once…”

One floor away, Nokia is hosting a group of Indian tech bloggers who were writing about the Finnish handset maker’s latest touchscreen model with Carl Zeiss lenses. Elsewhere in the country anthropologists working for Nokia track the results of an experiment where the company gave every person in four neighboring villages a free phone with access to local weather, crop, and other information. Each Nokia phone spends nearly 18 months in development, says Shivakumar, with models tested for water exposure, bent by robots, and shaken around in boxes full of sharp objects.

That time-consuming attention to detail, and the fact that Nokia makes phones for sale across the world rather than tailored to Indian tastes, may help Micromax continue to steal customers, says Naveen Mishra, lead telecommunications analyst at research firm IDC India. Micromax takes no more than four months to go from idea to execution, says Jain. Its $75 Qwerty-keyboard phone is already India’s best-selling full keyboard handset, according to IDC, beating Research In Motion’s (RIMM) BlackBerry, whose cheapest unit goes for $320. Nokia plans to launch a similar phone, the C3, that will be cheaper than Micromax’s, as part of a mid-range series of phones.

One of Micromax’s greatest successes has been a feature that allows phones to handle multiple accounts. In India, mobile plans are mostly prepaid and, thanks to an ongoing price war, among the cheapest in the world and getting cheaper. Consumers constantly shop for deals and often wind up with three or more accounts—nearly 100 million Indians have multiple cell numbers, estimates investment bank Macquarie. To switch among numbers, cellphone owners used to have to swap SIM cards, the little plastic-and-metal identifier chips that slide into handsets. Micromax has designed almost all of its phones to hold two SIMs, and handsets that can have up to two numbers are part of its signature. One of its phones comes with a motion sensor so that all a user has to do to switch SIMs is briefly flip the phone upside down.

Nokia will introduce its own dual-SIM phone soon, promises Shivakumar, more than a year after Micromax debuted its first model. “And because it’s a Nokia phone,” he says, “it’s going to be the best in the category.”

Prakash Murarka, a 21-year-old college student, says he has four phone numbers and one handset. He holds up his SIMs as if they were a miniature deck of cards, and slips two into a Micromax handset. “The first one is to call my parents,” he says. Then he spins his phone like a gunslinger, kicking in the second SIM. “And this one is to call my girlfriend.” Read more at www.businessweek.com

3 methods of fighting churn among US operators.Find out which one is the most effective.

This week we are looking at how AT&T, Sprint Nextel and Verizon are fighting consumer churn. Annualized youth churn rates across the 65 markets covered in the mobileYouth report average just over 30%. That means one in 3 youth accounts are switching or deactivating every year – an attrition cost that totals billions of lost dollars for service providers. See how the top 3 US operators are dealing with this issue and find out which method is the most effective.

#1 How has AT&T lowered its churn rate

AT&T reported a total churn of 1.3% for the second quarter of 2010, lower than 1.5% for the second quarter of 2009.  AT&T’s churn has decreased from 1.8-1.9 percent in 2006 down to 1.3 percent in 2010. While many might look at this as a positive for the operator, the real reason behind the decrease in churn was the launch of Apple’s iPhone 4 in the second quarter of 2010. It’s not AT&T customers that have not switched networks, rather it’s customers of the iPhone who stay loyal to the Apple brand. AT&T has been able to piggyback on its exclusive deal with Apple and lower its churn through the years.

#2 How has Sprint Nextel lowered its churn rate

While AT&T rides the iPhone wave, Sprint has differentiated itself as the first and only 4G network in securing a postpaid churn of 1.85% for the second quarter of 2010. In the first quarter of 2008, Sprint had posted a high post-paid churn rate of 2.45% and a net post-paid subscriber loss of 1.09 million. Things have turned around for Sprint, as it not only posted its lowers postpaid churn but also a net subscriber gain of 111,000 customers in 1Q 2010. While its differentiation as the first and only 4G network has made it an identifiable brand among customers, there is a bigger story behind Sprint’s revival.

In the beginning of 2008, Sprint’s customer service was rated terribly. Since then for 10 consecutive quarters, Sprint’s customer service ratings have improved. The American Customer Satisfaction Index (ACSI) ranked Sprint as the company that has improved the most over the past two years. Sprint improved its ACSI score from 56 in 2008 to 70 in 2010, while AT&T’s ACSI score dropped from 71 in 2008 to 69 in 2010. On the other hand, Apple’s ACSI score for year end 2009 was 84 well above average of 76 for the handset industry and 75 for the Personal Computer industry.

#3 How has Verizon maintained its low churn rate through the years

The final data point we would like to present to drive the case for customer service is the that of Verizon Wireless which has consistently had an ACSI score above industry average since 2004. It has also had the lowest churn among its competitors in the same time period. All the while technology advances gave us smarphones and app stores, Verizon has been able to maintain its position as the operator with the lowest churn in the US based on customer service and a reliable network. Read more at www.mobileyouth.org

Mobile Youth TV #2: Loyalty and Churn

3 methods of fighting churn among US operators.Find out which one is the most effective.

This week we are looking at how AT&T, Sprint Nextel and Verizon are fighting consumer churn. Annualized youth churn rates across the 65 markets covered in the mobileYouth report average just over 30%. That means one in 3 youth accounts are switching or deactivating every year – an attrition cost that totals billions of lost dollars for service providers. See how the top 3 US operators are dealing with this issue and find out which method is the most effective.

#1 How has AT&T lowered its churn rate

#2 How has Sprint Nextel lowered its churn rate

#3 How has Verizon maintained its low churn rate through the years

Why handset dependency is ineffective in the fight against churn

Youth loyalty for operator brands does not exist Read more at www.mobileyouth.org

Watch the mobileYouth TV show

7 Stories of Empowerment

How innovation could impact the lives of the world’s 200 million mobile owning rural youth. This week we’re looking at the world’s 200 million mobile owning youth and their families living in rural areas. What can new mobile services such as banking, commerce and learning offer them in terms of adding value to their lives? How can mobile service providers tap this trend and monetize a particularly low-margin segment?

How has the Rural Market Changed?

Gone are the days when the Grameen Group had to run the Village Phone initiative to put a mobile phone in the hands of one influential villager willing to take the risk of running a pay phone business. Today prices of handsets have decreased significantly. Almost every family in villages across Bangladesh, India, Kenya and Nigeria has mobile phones. The Village Phone initiative that made Grameen famous is dead, and it’s a good thing.

The next step for emerging markets in mobile evolution is innovation in services and handsets. In this post we highlight 7 stories on how handset manufacturers and service providers have launched innovative products to meet the needs of consumers in emerging markets.

#1 Mobile Commerce in Africa

#2 Life Tools in Asia

#3 Dual SIM Handsets

#4 IVR and Radio in Africa

#5 Mobile Services for Entrepreneurs and Storytellers

#6 Email Solutions for those without Accounts

#7 Innovative Power Solutions

Summary

Mobile services that are “must have” in developing markets, ones which provide bridges in deficient infrastructure and ones that empower people’s lives will be the ones that grow. What do you think? Which of these services will be the standouts over the next 5 years? What other stories of mobile innovation from rural mobile youth markets do you have? Read more at www.mobileyouth.org

Watch the mobileYouth TV show

7 Stories of Empowerment

How innovation could impact the lives of the world’s 200 million mobile owning rural youth. This week we’re looking at the world’s 200 million mobile owning youth and their families living in rural areas. What can new mobile services such as banking, commerce and learning offer them in terms of adding value to their lives? How can mobile service providers tap this trend and monetize a particularly low-margin segment?

How has the Rural Market Changed?

Gone are the days when the Grameen Group had to run the Village Phone initiative to put a mobile phone in the hands of one influential villager willing to take the risk of running a pay phone business. Today prices of handsets have decreased significantly. Almost every family in villages across Bangladesh, India, Kenya and Nigeria has mobile phones. The Village Phone initiative that made Grameen famous is dead, and it’s a good thing.

The next step for emerging markets in mobile evolution is innovation in services and handsets. In this post we highlight 7 stories on how handset manufacturers and service providers have launched innovative products to meet the needs of consumers in emerging markets. Read more at www.mobileyouth.org

The Jaago Re campaign was launched by Tata Tea and Janaagraha in September 2008 (press release) to start a voter registration drive in colleges and corporates in 35 cities across the country and register four million voters. The voter registration itself is driven through an interactive application on its website and kiosks, which helps users identify their constituency, prepares a ready to print voter registration form in five minutes, guides them to the nearest voter registration center and updates them via SMS when their names are added to the voting list.

The campaign, which is run by a small team of youngsters in their twenties (The Week), has an advisory board that includes former Chief Election Commissioner T S Krishnamurthy, Infosys founder Narayan Murthy and Rang De Basanti director Rakeysh Omprakash Mehra (Hindustan Times/ Indian Express/ TOI). The campaign has convinced several large colleges and companies to become 100 percent registered (TOI/ TOI/ Mid Day/ TOI/ Deccan Herald) and even convinced the election commission to allow bulk submission of registration forms.

Tata Tea has used a number of interesting ads to engage the Indian youth into the Jaago Re campaign.

Tata Tea has also tied up with various TV channels to create micro campaigns like Bindass TV’s iChange campaign to support the Jagoo Re campaign –

Jaago Re also has an active social media presence with more than 15,000 members on Facebook and almost 13,000 members on Orkut.

The campaign is now conducting free Shut Up & Vote rock concerts by Bangalore-based band Thermal And A Quarter (TAAQ) across 10 cities to to engage Indian youth in the electoral process (DNA/ Indian Express/ IBN Live/ Indian Express/ DNA) –

Jaago Re has turned out to be an extremely successful campaign. Not only has it been a topic of a huge number of news stories and blog posts, and resulted in much goodwill for Tata Tea (Business Standard), it has also managed to register 531,395 voters so far, in spite of its run ins with a slow moving bureaucracy (TOI).

The Indian blogosphere is in love with the Jaago Re campaign. Rashmi Bansal believes that, with the campaign, Tata Tea has taken corporate social responsibility further than most brands do. Rajesh Kumar wonders why only beverage companies do election themed social advertising. Indian Homemaker and Chavvi Sachdev share their experiences with voter registration. Sanjukta has an interesting interview with Jaago Re campaign coordinator Jasmine Shah. Read more at www.gauravonomics.com

Each August since 1998, Beloit College has released the Beloit College Mindset List. It provides a look at the cultural touchstones that shape the lives of students entering college this fall. The creation of Beloit’s Keefer Professor of the Humanities Tom McBride and former Public Affairs Director Ron Nief, it was originally created as a reminder to faculty to be aware of dated references, and quickly became a catalog of the rapidly changing worldview of each new generation. The Mindset List website at www.beloit.edu/mindset, the Mediasite webcast and its Facebook page receive more than 400,000 hits annually.

The class of 2014 has never found Korean-made cars unusual on the Interstate and five hundred cable channels, of which they will watch a handful, have always been the norm. Since “digital” has always been in the cultural DNA, they’ve never written in cursive and with cell phones to tell them the time, there is no need for a wrist watch. Dirty Harry (who’s that?) is to them a great Hollywood director. The America they have inherited is one of soaring American trade and budget deficits; Russia has presumably never aimed nukes at the United States and China has always posed an economic threat.

Nonetheless, they plan to enjoy college. The males among them are likely to be a minority. They will be armed with iPhones and BlackBerries, on which making a phone call will be only one of many, many functions they will perform. They will now be awash with a computerized technology that will not distinguish information and knowledge. So it will be up to their professors to help them.  A generation accustomed to instant access will need to acquire the patience of scholarship. They will discover how to research information in books and journals and not just on-line. Their professors, who might be tempted to think that they are hip enough and therefore ready and relevant to teach the new generation, might remember that Kurt Cobain is now on the classic oldies station. The college class of 2014 reminds us, once again, that a generation comes and goes in the blink of our eyes, which are, like the rest of us, getting older and older. Read more at www.beloit.edu

A tale of CCK, Zain, Safaricom and YU.

What a week its been in Kenya’s mobile networks sector! So much has happened in such a short space of time. It all started on Monday this week when the Communications Commission of Kenya (CCK) announced a 50% price reduction on mobile network interconnection rates from Kes. 4.42 to Kes. 2.21. This action in turn led to Zain immediately lowering their call and SMS rates dramatically as reported on this blog thereafter.

Zain’s new low tariffs triggered a stampede of new cutsomers and as such its interconnection to Safaricom clogged up, leading to poor service. Zain then proceeded to blame Safaricom as the “dominant” mobile network for not upgrading their interconnection capacity in-time so as to accommodate the deluge of new customers signing up. Safaricom in turn noted that Zain had failed to inform them in good time to upgrade their interconnection capacity which they said pointed to Zain’s bad planning and ulterior motives.

As all of this drama unfolded, YU announced new call rates of Kes. 3.00 and SMS rates of Kes. 0.50 yesterday (YU’s SMS rates are half those of Zain). In the final analysis, we are clearly in the throes of yet another mobile tariffs war. However, no word yet on how Safaricom and Orange will respond to these new developments. One thing is for sure, Safaricom will definitely come back with something big, especially considering they still hold 80% market share in Kenya. Read more at www.moseskemibaro.com

Crowdsourced Star Wars Uncut Remake Makes Its Online Debut

Last year, Casey Pugh launched Star Wars Uncut, inviting Star Wars fans and filmmakers to take part in a massive project to remake Star Wars IV: A New Hope.  The film was divvied up into 15-second clips, and participants submitted their own 15-second remakes, resulting in an entirely crowdsourced version of the original Star Wars flick.  Now, after months and months of hard work, Star Wars Uncut has finally made its debut online, and it’s a sight to behold. The fact that the movie was divided up into short, 15-second segments makes it a real work of art.  The different segments range from live action video to Machinima, Lego, stop motion, Flash animation, puppets and more.  NewTeeVee has the opportunity to talk with creator Pugh last January, and he told them that this diversity was part of the reason that LucasFilm was supportive of the project.  They liked it because he “treated it like an art project”.

And an art project it is—the sheer quality and creativity behind some of the clips is absolutely mind-blowing.  And this creativity isn’t going unnoticed.  Star Wars Uncut was nominated for an Emmy n Creative Achievement in Interactive Fiction and is bound to be nominated for many more awards. Read more at www.socialtimes.com