IDEA’s idea of customer engagement

Honey Bunny Song with the coolest family

India is one of the fastest, if not the fastest, growing countries for telecom companies with tele-density on an ever increasing curve. No wonder the last few years have seen outstandingly creative work coming for telecom brands. To name a few, the Vodafone pug and then the zoozoos, Airtel’s catchy tunes, Idea’s sirji, Tata Docomo’s series of ads.

Idea has consistently come up with diverse attempts to stand out from the clutter. Their new campaign ‘honey bunny’ tries to go the ‘ringtone’ or ‘caller tune’ way. A famous musical piece always gives a top-of-mind-recall. it’s very much a tried and tested formula. Thus goes away from the risk-taking creatives IDEA is known for. Having said that, the tried and tested works and this case is no different. We are seeing, or should I say hearing, a lot of these ring tones and caller tunes.

An example of the popularity can be found out from the following video done by a family. The entire family is the cast who enjoy the song to the fullest. IDEA brand managers would be smiling from ear to ear on seeing this creative rendition of their baby. It won’t be a surprise if this video goes the ‘Kolavari de’ or ‘Gangnam style' way. The success to viral videos is the simplicity and how it connects to the audience. This video is shot well, although post-production work has gone into it. It doesn’t look like a professional’s job done in a studio but a wonderful effort nonetheless.

This video might not result in increased sales for IDEA but it increases brand awareness. With technology available for shooting videos, companies must attempt to engage customers to join in fun. This could give some food-for-thought to brand managers to leverage technology to gain customer engagement. 

Blood bath in Telecom sector in India:

If an industry analysis of the telecom sector in India is done, it would show the cut-throat competition that is going on for subscribers between the existing players. There are 11 existing players in the telecom space already namely Vodafone-Essar, Airtel, Aircel, Idea Cellular, Tata Indicom, RCom, Loop Mobile, Spice Telecom, Virgin Mobile, BSNL, MTNL. The industry has high entry barriers with the requirement of huge infrastructure, massive promotion due to numerous players resulting in high spending and almost commoditization of telecom services (we will discuss the commoditization aspect later). Apart from this, the high amount that is needed for buying the all too sparse spectrum. There are high exit barriers. The average revenue per user (ARPU) is one of the lowest in India resulting in red lines for the telecom companies.

Yet new entrants are planning to enter India with 3-4 big players namely Shyam Telecom in JV with Russia based Sistema, Unitech Wireless with Norway based Telenor and UAE based Etisalat going it alone soon to launch their services in this already congested market.

The huge untapped market potential has all these players wanting to enter the telecom bandwagon with an eye of the future when 3G services will bring in the revenue and profits. The only motive of these operators now is to increase subscribers. The existing players and the new entrants do not have much different to offer in terms of services. The only service they had to offer was voice-calls and SMSes. It has made a commodity of the voice-call or sms. Value-Added Services (VAS) which get the revenues for operators in other developed markets has yet to evolve in India. Partly because of its high cost to the customer and the sophisticated high-end cell phones required for accessing these VASes. Thus the only aspect they can fight is in terms of pricing. The Indian market is price sensitive in various products/ services and it is no different here. This has resulted in price wars, thus bleeding the already losing operators.

Tata DoCoMo with its GSM service was the first to launch ‘per-second-billing’ plan. This was immediately followed by Aircel immediately when they launched the 123 billing plan where after the third minute, the STD call would have local rates. As soon as Tata DoCoMo aggressively pursued the per-second billing plan, others had to follow suit to be in the race and not allow DoCoMo to run amok with subscribers. Airtel, Vodafone, Idea, BSNL, RCom too slashed rates and the tariffs fell to a world record low of 1 paise per second. With these new plans in place and mobile number portability to follow, a lot of churn might happen and telecom analysts predict a reduction of about 15% in revenues for existing telecom operators. The financial markets have taken note of it and scrips of many a telcos have taken a severe beating with Bharti-Airtel taking the brunt of it. The customers are benefiting from the price wars but it is profusely bleeding the already bleeding telcos. When will this blood bath end?

A time will come when price would cease to be a factor. Differentiation would have to be actually done in services offered. But in the mean time, telcos will have to bear the harsh competition. May be consolidation would be the order of the day in the coming 3-4 quarters.