Sunday, November 18, 2007

I love the market and competition

When I first came to the US calling cards were really expensive. It cost almost 25 cents per minute, there was a 3 minute round off, my minutes were valid only for a month and there was a $1 user fee for every $5 card not including taxes. In addition it would take forever to connect to the toll free number and be able to call home, and the connection was completely unreliable. Reliance entered the market in Nov 2004, and this is what their plan cost. 13 cents per minute, no expiry of minutes, no user fee, just the federally mandated taxes (25 cents for every $5 which were removed in 2006), 1 minute round off and most important the connection was instantaneous and crystal clear. Fall 2006, Airtel, another company entered the market and offered 8 cent per minute calls, Reliance immediately retaliated by offering 7 cent per minute calls, and even lower for those who called within the Reliance network in India. Since then these two companies have been offering all kinds of deals for the holiday season (there are several holiday seasons in a year in India). So I got double the minutes when I first signed up with Airtel. Then they gave me extra minutes every time I recharged my calling card. Not to be outdone Reliance has been making great offers and easier access as well. They have created a club membership for high volume callers and offer special deals for them. They give away free minutes as well. They know that if I am unhappy I will switch companies, and reputation plays a big role here. I can effectively persuade every new student who comes into my radar to stay away from the company I don't like. After all, that is how I switched to Reliance and knew about Airtel. Even now, the reason its 7 cents instead of 2 cents per minute is because of telecom regulations in India. I have been enjoying this price war and gifts war. Guess who is winning?? Yours truly!! I love the market!!

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