The iPhone comes to town...again

A couple of weeks ago, I blogged about some interesting developments in the telco world that would have taken place in March.Two of the three events did happen last month, with TM launching its high-speed broadband service, UniFi, on Mar.
Written by Edwin Yapp, Contributor

A couple of weeks ago, I blogged about some interesting developments in the telco world that would have taken place in March.

Two of the three events did happen last month, with TM launching its high-speed broadband service, UniFi, on Mar. 24 and DiGi launching its Apple iPhone packages for the consumer on Mar. 31.

The DiGi iPhone launch was anticipated as DiGi had already pre-empted any rumors by announcing the availability of the iPhone on its Web site as far early as Mar. 1.

According to local news reports, the timeline for DiGi's launch was more or less predicted as the exclusive deal between Apple and Maxis Communications, the first operator authorized to sell the iPhone in Malaysia, ended on Mar. 31.

These developments are good as firstly, a new entrant to the market means more competition and consequently, better pricing for consumers. A second provider offering the iPhone would also give consumers better choice should they not be happy with their current service provider.

Also, with the convenience of mobile number portability in Malaysia, consumers really can benefit from DiGi's entrance into the market.

For DiGi, introducing the iPhone a year later than its competitor does give it certain advantages. Asked if DiGi was late coming into the iPhone game, Albern Murty, DiGi's head of marketing, responded with an unequivocal "no".

"On the contrary, we believe we're coming in at the right time as today, more consumers are now more used to the idea of a mobile device optimized for data rather than solely for voice," he said at the launch.

Murty went on to say that when the iPhone first came to the market (courtesy of Maxis), early adopters took up the offer and paved the way for the other laggards to follow. He also argued that timing wise, DiGi is in the position to market the iPhone now to a bigger market segment by offering better tariffs.

No surprises there as the battleground for the iPhone is not in its hardware sales per se, as Apple is known to control that portion quite stringently.

So with that stage set, DiGi officials were quick to differentiate itself from the competition by emphasizing how unique their packages are.

For instance, all the packages DiGi offers provide at least twice the number of free SMSes, MMS, and data quota compared to what Maxis is currently providing. Subscribers who sign up, however, are tied to a two-year contract as DiGi is subsidizing the iPhone.

DiGi also claims that its packages are designed to help subscribers save more, and has put up a comparison chart on its Web site to emphasize these differences.

With these packages, DiGi has managed to capitalize on its late market entry by bringing better pricing value to consumers.

Of course, this does not preclude the fact that Maxis can further make adjustments to their price plans and set off a pricing war, which is why I've always argued that fair competition in the market is always important.

In fact, Maxis had shaved off about 200 ringgit (US$67) from its various plans just days before DiGi launched the iPhone in the guise of a first anniversary reward promotion.

Although no official figures have been released by DiGi as to how many iPhones it expects to sell or have sold since the launch, people familiar with the matter told me that the takeup rate has been fantastic, especially those wanting to port over their numbers and switch from rival Maxis.

But while kudos should be given to DiGi for how it has so far managed its iPhone campaign so far, it would do well for the operator to continue to pay close attention to customer feedback especially on the expectations of the quality and coverage of its network.

Having experienced both DiGi's EDGE and 3G service on an iPhone for some time now, I can testify to the fact that while the EDGE service is fairly comprehensive and satisfying based on the advertised speeds, its 3G service still leaves me somewhat wanting.

Granted, its 3G network is growing and will continue to widen but this does not negate the fact that it has upped its ante by introducing the iPhone--a device that's been optimized for the mobile Internet--to the wider public and will need to ensure its customers can experience what the iPhone is designed to do.

In addition to widening its 3G coverage, DiGi would also need to ensure its 3G network capacity stays ahead of its marketing drive, and not the other way around, so that customers would not experience network congestion.

The necessary evil to market a product ahead of what the network can support has bitten other operators in some of their marketing campaigns, and have spurned their customers badly in the past.

This is a lesson that DiGi must learn, and learn well not to replicate.

Otherwise, those who've signed up for two years will truly be frustrated and may even feel cheated with what they've been offered.

By tying the hardware--the iPhone--to its services via a contract, DiGi has effectively staked its reputation and quality of service on the line, as subscribers will judge DiGi as a whole rather than by the sum of its parts.

At the end of the day, developed mobile phone markets like ours define the quality of service and customer loyalty in terms of how the overall services are perceived rather than by pricing alone.

If DiGi can put the customer in the center of its crosshairs and meet their needs better than its competitor, it might just come out a winner in its foray into the lucrative Apple iPhone world.

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