Translated material
Not six cell connection
Lyusya Chernova
Operator companies believe that this year will be a turning point for mobile telephony
Operator companies believe that this year will be a turning point for mobile telephony
(Photo: Pavel Gorshkov )
Now, in order to use a cell phone, no special permission from the State Communications Supervision Authority is required (the corresponding decree was signed by the acting president). Previously, when you purchased a cell phone, you were given a temporary permit, and after two months you had to come to the office for a permanent one. The permit should always be carried with you, since for its absence you could be fined by inspectors of the same State Communications Supervision Authority (however, in practice this happened extremely rarely).
According to cellular operators, simplifying the procedure for purchasing a cell phone will increase the number of buyers. It is also possible that this will contribute to some reduction in prices for cellular communication services. According to representatives of the VimpelCom company (Beeline trademark), one permit cost the operator $5 - the companies paid Gossvyaznadzor for the forms and their execution. And although the operators claim that they issued permits at their own expense, and therefore their cancellation will not affect the price of services, it is clear that the costs were still included in the contract price.
Well, whether prices go down or not is not very important - cell phones have already become firmly established in our everyday life and have long ceased to be a luxury item. This year, operators have already begun working in the metro. Of course, it’s hardly convenient to talk on trains due to the noise (and it’s not easy to equip many kilometers of tunnels), but at stations where special equipment is installed, this is quite possible. In any case, representatives of Beeline and MTS have already announced work on the innovation. “As an experiment, we are already working at the Taganskaya metro station, and in the near future we are planning to install equipment throughout the ring,” the MTS company said.
One client, two clients...
According to Beeline company calculations, by the end of March the number of cellular subscribers in Moscow should exceed one million. “It turns out that 10 percent of the population uses cellular communication services, and this is a figure comparable to the level of Eastern European countries,” said Beeline press secretary Mikhail Umarov. The company estimates that the number of cellular users could double by the end of the year. “Our company alone plans to increase the number of subscribers to 800 thousand, and maybe up to a million, by the end of 2000,” Igor Timofeev, MTS Marketing Director, said at one of his press conferences.
Perhaps the estimates will seem somewhat inflated to some, and the plans - ambitious. But the fact remains: the number of cellular users is growing at a breakneck pace. “Over the past year, the number of subscribers of our company has grown by 170 percent,” say MTS representatives. Beeline also counted an almost twofold increase in the total number of cellular customers over the past six months. “In December last year alone, all companies operating in the Moscow cellular market connected 145 thousand subscribers,” Mikhail Umarov clarified.
December is traditionally considered the best month for trading (for any trade), as people buy New Year's gifts. But cellular operators began to lure customers long before the New Year. Each of them reduced tariffs several times a year, introduced attractively priced tariff plans, announced free connection to the network, and gave all kinds of discounts.
The apotheosis of advertising ingenuity was the offer of a ready-to-use cell phone for less than $50. The Beeline company, which offered a fundamentally new tariff plan "BI+" last spring (no monthly fee, payment by card valid for one, two and three months) for $99 (excluding VAT) including the cost of the phone and connection, by the fall reduced the price to $79. And on October 15, the so-called box was released onto the market. The cardboard box contained a phone, a $10 card, and the then-necessary permit (the company managed to negotiate with Gossvyaznadzor to include ready-made permits in the kit). The entire set cost only 49 dollars, including VAT and sales tax, and you could buy it not only in the offices of company representatives, but also in GUM, TSUM, Ramstore and other retail establishments. At that time, this tariff plan was the cheapest on the Moscow cellular market, which enabled the company to attract many additional customers, mainly from teenagers, students and those who were buying a second phone for their family. “Last year we somewhat lost our position in the cellular market, but the BI+ box allowed us to restore it,” noted Mikhail Umarov. Having gained customers, Beeline raised the price of the “box” to $79 (including all taxes) starting in the new year.
Healthy competition
Today, MTS and Beeline control about 85% of the cellular communications market, dividing it approximately equally, and compete quite fiercely with each other. One of the advantages of Beeline is that it has the ability to offer the lowest price for cellular service. The fact is that the company has a monopoly on the outdated DAMPS standard, in which one of the “BI+” tariff plans operates. True, while reducing the cost, DAMPS does not allow you to use many modern cellular communication services. For example, roaming (which means it allows you to talk only within Moscow and the Moscow region), exchanging text messages between phones, accessing the Internet, and so on.
Beeline also offers the BI+ plan in the more modern international GSM standard. For $99 (excluding VAT and sales tax), a client receives a phone and a card payment system. Subsequently, you can switch to any other GSM tariff plan. But it is no longer possible to convert a DAMPS standard phone to GSM. So, if you are no longer satisfied with DAMPS, you will have to buy a new phone.
MTS operates only in the GSM standard, and therefore cannot make such cheap offers as Beeline. But it has another advantage. Any client of the company, even those who buy the cheapest tariff plan, has the opportunity to make and receive calls wherever there are GSM networks and use international roaming. Moreover, the call fee depends on the location of the subscriber. The "Region" tariff, which covers the Moscow and other regions, is lower than the "Capital" tariff and begins to operate automatically when the client leaves Moscow.
The beginning of this year was marked by a new stage in the development of the cellular market and a new round of competition. First MTS, and then Beeline announced a reduction in prices for their services. From February 21, MTS introduced three new tariffs: “Favorite”, “Youth” and “Local” (see table). “The offer turned out to be so profitable that we attracted many new clients, and old clients are gradually switching to new tariffs. Moreover, owners of phones with federal numbers (you need to call through a code) are switching to new tariff plans with city numbers,” says Igor Timofeev.
The "Local" tariff most likely appeared as a competitor to Beeline's "BI+". For $8 a month, the client gets the opportunity to talk for 25 minutes (more precisely, make at least 25 calls lasting up to a minute each - if the minute is not fully used, the remaining time is lost). Having used the allotted time, in the future you will have to pay 39 cents per minute during the day and 25 cents at night (excluding VAT). Connection is free, but unlike “BI+” you will have to pay at least $99 for the phone (excluding VAT and sales tax). More expensive, but it also comes with the GSM standard.
The most popular MTS tariff today, “Youth,” offers customers a minute of talk for 29 cents during the daytime and 19 cents in the evening, and the subscription fee is only $4 (all prices excluding taxes). This is almost five times less than in the MTS+ tariff plan, once the cheapest of the company’s offerings.
The Beeline company decided to keep up. Now a minute of conversation on the "BI+" tariff plan from 12 at night to 6 in the morning will cost 5 cents, and the validity of cards with a face value of 10 and 20 dollars has been extended, respectively, to one (previously it was seven days) and two (previously it was one) months. Previously, a minute of conversation in the evening and at night cost 15 cents, now for 15 cents you can talk from 6 pm to 12 am and from 6 to 10 am, and during the day - for 45 cents (all prices excluding taxes). “We calculated that those who use the BI+ tariff, and these are mainly young people, talk most of all at late hours, so the low price is important for them late in the evening and at night,” explained Mikhail Umarov. At the same time, Beeline reduced call rates in Beeline-GSM tariff plans.
In general, both operators, every now and then introducing new plans and reducing prices, are essentially repeating each other’s moves. Although the companies themselves, of course, will not agree with this. However, as soon as one company announces, even in just one of its plans, per-second billing (that is, a client who spoke for one and a half minutes pays not for two, as before, but for exactly one and a half), the other immediately does the same . One company claims to be able to make free calls from cell to cell within the same network, and another is following suit. Each has its own advantages, each offers something attractive.
Therefore, when buying a cell phone, it is important to decide why you need it: only for rare “emergency” communications and only within Moscow, or for frequent and long conversations, for constant moving from place to place, etc., etc. In principle, both companies have offers for both wealthy and very poor clients. Moreover, each tariff plan of one company is designed so that it competes with a similar plan of another. So one thing is clear: competition in the cellular market will continue to grow. “Cellular operators have already reduced prices as much as possible, so no big price wars are expected this year; we will compete through purely marketing moves (promotions, special offers, etc. - “Results”). Although there are still certain reserves for reducing prices there is,” noted Mikhail Umarov.
“Last year, our company was just mastering the system of working with the mass consumer, and what we did this year is only the first step towards turning cellular communications into a truly mass one,” says Igor Timofeev. “This year will be a turning point for the development of cellular communications , and customers will be offered even more interesting tariff plans."
