Inelasticity of Economics and the Ingenuity of Man

Ever wonder, how does one make telecom usage price inelastic?

International SMSs have been Rs.5/sms since as far back as I can remember. The telcos have not dropped that rate, for reasons best known to them. Maybe they have evidence that the price does not change behaviour. And if no one is going to use more, then they might as well continue charging Rs.5/sms. Maybe the interconnect charges are too high and the telcos don’t want to pay out of pocket. Maybe the assumption that dropping prices to Rs.2 or Rs.3 would mean out of pocket expenses but would also lead to increase in usage, which will spill over into voice usage, making the overall strategy profitable, is not a hypothesis they have enough evidence for.

In any case, the rationale for me, as a layman (I could do the research to find out the real deal but I’d rather stay in the mood to speculate for this post), leaves a lot to the imagination – what if?

So forget SMSs for a minute, if you were in a telco, how would you increase your ISD voice usage?

SMSing and making calls are still conscious planned choices that are driven by internal stimuli. But what can be a stronger overpowering integral part of human mobile phone usage behaviour?

How does a telco create an external stimuli to make you use expensive services like International Voice Dialling?

Simple.

It ensures you get a missed call from an international number.

The premise here is easy and quite beautiful – anyone having ISD activated on their phone will know people who are abroad. Receiving a missed call from a non +91 number will instinctively make the recipient wonder who it is that’s calling him. And because we, as a people, have always collectively placed a much higher premium on calls to/fro abroad, our natural response will be much stronger than having seen a missed call from a local number or some city in the country.

The user will rack his brain to try and figure out who made the call, and because he can’t, he might just call back the number to find out.

We know how telcos also have the right to charge whatever they please as long as they have a disclaimer somewhere that states the price? Rs.6 per minute to listen to pre-recorded IVRs? Games? Browsing music? Cricket commentary? Seriously!?

All that needs to be done to fix up this last piece of the exercise is to find a willing partner in a godforsaken country to which telcos can charge exorbitant rates. Sign up a nice agreement that shares the dough. And let the missed calls begin.

So, you wonder, how do I know all this?

Well, I don’t… not for a fact anyway. But about 34 minutes ago, I received a missed call from a number +23222290295. Turns out +232 belongs to SL. Not Sri Lanka, mind you. Sierra Leone. Btw, this is not the first, but second time, I’ve received a missed call from a number from Sierra Leone. Wth, right? My point exactly!

P.S. A quick search on Vodafone shows Postpaid rates to Sierra Leone at Rs.45/min. You know what the bright side is? At least I’m not getting missed calls from Premium destinations (Rs.100/min) like Finland, Austria, Netherlands, Norway, Chile or from Inmarset and Satellite phones (Rs.550/min).

P.P.S. Tch tch… if only they knew that I lived in Finland for 3 months in 2003. Lol.

P.P.P.S. 30-Sep-11: Woke up today to find a missed call from +23222290271 at 2:55 am IST.

Update 23-Jan-12: Just got a 2-second missed call from +381643556278 at 3:52 am IST. +381 belongs to the ISD code RS, which stands for Serbia.