Idea Business Model
Idea Cellular INCLUSIVE BUSINESS CASE STUDY
IDEA CELLULAR’S INCLUSIVE BUSINESS MODEL
When Aditya Birla Group took over, Idea’s new management reoriented the company’s strategy to focus network expansion mostly in India’s remote areas where demand is both high and underserved. The company also built a distribution network of 1,520 branded service centers and more than 700,000 multi-brand retail outlets around the country as of March, 2009. These investments have enabled Idea to serve customers at the base of the economic pyramid by bringing coverage to rural areas and achieving economies of scale that help keep prices low. Idea’s approach has also included a suite of products and services customized to meet the needs of rural and low-income consumers. For example, Idea has launched small recharge sachets in denominations as low as $0.20. The company provides value-added services such as “music on demand,” which has been particularly successful in rural areas where FM radio does not reach. Idea’s media and advertisement campaigns are also conducted primarily in local languages, to reach out to rural users. Most recently, Idea has been working to extend its reach specifically to consumers who cannot afford their own phones through a Pocket Public Calling Offices (PPCO) project. PPCO is at once a product of Idea’s expansion efforts and a part of its strategy for further growth. The company considers PPCO a commercial project, and as such it was developed via Idea’s standard business development process: concept documentation, management approval, product configuration, testing, and full commercial launch. PPCO is a shared access model in which a mobile phone is used as a public phone operated by a micro-entrepreneur. To develop the model, Idea partnered with IFC to leverage its experience with shared phone projects around the world. Central to the model is a grassroots-level partnership, originally brokered by IFC, with India’s Self-Employed Women’s Association
IDEA CELLULAR’S INCLUSIVE BUSINESS MODEL
When Aditya Birla Group took over, Idea’s new management reoriented the company’s strategy to focus network expansion mostly in India’s remote areas where demand is both high and underserved. The company also built a distribution network of 1,520 branded service centers and more than 700,000 multi-brand retail outlets around the country as of March, 2009. These investments have enabled Idea to serve customers at the base of the economic pyramid by bringing coverage to rural areas and achieving economies of scale that help keep prices low. Idea’s approach has also included a suite of products and services customized to meet the needs of rural and low-income consumers. For example, Idea has launched small recharge sachets in denominations as low as $0.20. The company provides value-added services such as “music on demand,” which has been particularly successful in rural areas where FM radio does not reach. Idea’s media and advertisement campaigns are also conducted primarily in local languages, to reach out to rural users. Most recently, Idea has been working to extend its reach specifically to consumers who cannot afford their own phones through a Pocket Public Calling Offices (PPCO) project. PPCO is at once a product of Idea’s expansion efforts and a part of its strategy for further growth. The company considers PPCO a commercial project, and as such it was developed via Idea’s standard business development process: concept documentation, management approval, product configuration, testing, and full commercial launch. PPCO is a shared access model in which a mobile phone is used as a public phone operated by a micro-entrepreneur. To develop the model, Idea partnered with IFC to leverage its experience with shared phone projects around the world. Central to the model is a grassroots-level partnership, originally brokered by IFC, with India’s Self-Employed Women’s Association