Identifying strategic options for VSNL international: Tata services ltd. (TAS)

Abstract

Remittances are currently very expensive, especially for micro transfers where they can cost as much as 15% of the amount being transferred. There is a market need and an opportunity in reducing the cost of these micro transfers as well as providing greater reach to the recipient for withdrawing cash. VSNL International has identified Mobile enabled remittance transfers (M-Remittances) and Mobile payments (M-Commerce) as its strategic initiatives for 2007-2008. As the first phase of this project, VSNLI is creating mobile enabled money transfer services in the UAE-India corridor, based on detailed strategic considerations. This research project is aimed towards a detailed study of the above markets for remittances with a special emphasis on consumer behaviour in both the remitter market (UAE) and the remittee market (India), with a view towards planning VSNLI's further course of actions in this space. The research methodology involved a mix of primary and secondary research in both the remitter and remittee markets, with the aim of understanding behaviour of consumers using different money transfer channels, reasons for their using these channels, satisfaction levels of consumers, and specific problems being faced by consumers with current channels that VSNLI needs to address with its proposed mobile money transfer technique. The reactions of consumers to the mobile enabled remittance transfer concept were also measured. Based on these research findings, it is proposed that VSNLI should go ahead with its plans to launch the proposed mobile enabled remittance service, and should specifically target users of Money Transfer Operators (MTOs) for the new service. An action plan has also been chalked out for a massive in-depth market and consumer study based on the findings of this dipstick research, to zoom in on specific issues that VSNLI needs to address with its mobile money transfer service.