Vodafone's Pricing Strategy

             When launched in India back in 2007, after acquiring their Indian partner Essar’s stake in the company, Vodafone group had positioned themselves as a premium voice and messaging service providing company, targeted mostly at customers in the urban and semi-urban areas. Due to their superior service as compared to their competitors, the customers who could afford the service were willing to pay higher charges for Vodafone services.

                In recent years, after realizing the potential of the rural Indian market, they have launched their products and services at comparatively lower prices as compared to their prices in the urban and semi-urban markets to penetrate the rural markets. They have introduced recharge plans starting from as low as INR 10 and extending up to as high as INR 500.

                To encourage data consumption, Vodafone also promotes usage with its Mobile Internet packs competitively priced. The starting price of 3G package is from INR 44 in Mumbai. Education on 3G usage is one of the strategies of Vodafone India. The telecoms will try to offer 3G package and better Internet experience in several malls in Mumbai. Engaging situations related to categories such as Music, GPS Navigation etc. have been developed. Vodafone Be Smart Mobile Internet initiative communicates the need for synergizing 3G technology with HSPA enabled handsets, for a faster, smarter and better mobile internet experience.

                Last year as part of their Diwali bonanza packages  to its customers, Vodafone India on had slashed data rates by up to 80 per cent across the country. In June, the company had reduced the price from 10 paisa per 10 KB to 2 paisa per 10 KB in Karnataka, UP West and Madhya Pradesh and Chhattisgarh circles and it had extended the same rates to all its circles from November 1. The company said same rates will be charged even if the customer is in roaming. Vodafone’s ‘Pay as you Go’ rates, which were the same for both 2G and 3G, were the lowest in market.

                This 80 per cent reduction in mobile Internet charges for customers using 2G was an important step in Vodafone’s strategy to drive mobile Internet and it facilitated in faster adoption and better usage of the same. As part of its strategy to "democratise" data, Vodafone is educating current and potential users about how Internet can add significant value to them. The company is also building content partnerships, simplifying pricing, educating retailers and offering choice to customer on the basis their interests and consumption patterns.