Economist has an article on India’s booming mobile market. India is adding 6.6m new subscribers a month and is growing faster than China. The article says that this growth is unlikely to peter out soon. There are 136m subscribers today and the industry expects to get to 500m by 2010. But the Economist doesn’t do justice to the real story although it alludes to it when it says that “Bharti, in particular, is attracting attention from telecoms firms worldwide because of its innovative business model”.
Bharti Aitel makes better margins on its $8 ARPU subscribers than Verizon Wireless does on its $50 ARPU subscribers although they both offer practically the same service (more in my post here). Tell me which business model will dominate 10 years from now?
The battle of the business models is not new. Dell introduced a “lean” business model that reshaped the PC industry. Wipro describes itself as using “lean manufacturing techniques in the digitization of business processes”. It is, along with Infosys and the other big Indian IT services firms, putting the same pressure on traditional services firms like Accenture and IGS that SouthWest and JetBlue have exerted on players like United and Delta. ICICI Bank, the largest bank by market cap in India, has a lean business model in place for banking. Some day this banking business model will travel. Increasingly, it’s the emerging markets in Asia that are cooking up the next set of “lean” business models in range of industries.
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