Airtel- ‘Sorry’ to its friends

Like. For a change, more than just imitating the west, we are learning from them as well. A testimony of this is the public apology by Airtel to all its subscribers for the hiccup in services since the last couple of days.

Today’s newspapers carried a quarter page public apology. This is in sharp contrast to Indian companies’ belief that all wrong doings or mistakes should be swept under the carpet. Toyota recalled its cars after a fault was detected, and Toyota Motor chief executive Akio Toyoda apologized in a press conference. RIM co-CEO and founder Mike Lazaridis apologized through a youtube video after blackberry services went kaput for a couple of days affecting its millions of users all over the world. Rupert Murdoch apologized for the phone-hacking scandal engulfing News Corp.

Cadbury India did not accept its mistake that a worm was found in its chocolate bar. It however went out of its way to give the chocolate bar extra packaging to avoid any future problems. Tata Motors did not apologize to its customers when there were fire incidents in its Tata Nano cars.

A start has been made by Airtel. Let’s see if corporate India accepts its mistakes in the future.

Free roaming- that is real good news!!

According to news report a month back speculated that if the government had its way, then we may have a united telecom India, in its literal sense. The panel of ‘Babus’ of Department of Telecom (DoT) to make recommendations on strategic issues related to licensing matters, have recommended to the government to consider the entire country as a single service area or four separate zones instead of the existing 22 telecom circles.

At present, around 10 per cent of the revenue of telecom companies comes from roaming charges which from my information (unconfirmed) is in the range of Rs. 13000-14000/- for the whole industry. If this indeed is implemented, it would be wonderful for the customers but would bleed the already bleeding telecom companies who spend a fortune of communication through advertising. The tariff wars had subsided a reasonable bit and now you have news about the abolishing of roaming charges.

Anyway this is going to happen sooner rather than later. So how should telecom companies gear up for this monumental change? At the outset, believe in the first-mover advantage and start communicating about no roaming charges before the government announces it. This way, you would get a head-start in top-of-mind recall just the way Idea Cellular did with Mobile Number Portability (MNP). The advantage would not last long because the other players too would immediately jump in the fray with their communication. At least you had the pioneering advantage.

It would surely work for people who spend a high percentage of amounts on roaming. But the moot question is that whether abolition of roaming charges by an operator is good enough to change the operator. The answer is a resounding yes since we are seeing it in conjunction with MNP. Thus ‘free roaming’ and MNP together surely is a winner on your hands.

‘Keep cricket clean’- not a good idea

Idea Cellular has come up with some very good campaigns in the clutter of telecom ads. They have indeed managed to break the clutter frequently. Most notable of which was the ‘Walk When You Talk’ campaign with Abhishek Bachchan. Its earlier ads of ‘Sirjee’ too were very good. ‘Save Paper’ campaign too was done intelligently. There was also a single ad about Idea associating itself with the government’s UIDAI initiative. A common thread which can be drawn is that all the ads were based on a social issue affecting the common man thus making it relevant to the target audience.

The latest campaign with six Cricket World Cup winning captains (Clive Lloyd-1975 & 79, Kapil Dev-1983, Allan Border-1987, Imran Khan- 1992, Arjuna Ranatunga-1996 & Steve Waugh-1999) was also related to a social issue though not specific to the Indian audience. The world had recovered from the Match-fixing scandal until it was hit by the Spot-fixing one. A lot was said and done to prevent it. All the six captains have impeccable integrity and respect among not just the cricket connoisseurs but general public alike. By associating themselves with these captains and the theme of ‘keep cricket clean’, Idea has a broader audience to talk to. Cricket being the religion in India and the world cup in toe, the timing would not have been apt.

It seemed to be a masterstroke by Idea but unfortunately I counted my chickens before they hatched. Keeping at the theme, they should have talked about their brand relevance to the ‘champions of the world’ cricketers and what, if any, they are doing in partnership with the ICC to keep cricket clean. Saying it is one thing, following it up with actions adds credibility. By launching the ‘No Idea, get Idea’ ads, with these cricketers talking about getting Idea seems frivolous. The copy seems so obvious. With due respect, apart from Kapil Dev, Imran Khan and probably Steve Waugh, none of the other 3 cricketers have the charisma to endorse an Indian brand. Youngsters under 25 years probably would not even know how great a player and Captain Clive Lloyd was.

These cricketers could have been used to create a brand recall rather than to make a sales pitch. It surely doesn’t seem to be a good idea now. Disappointed would be the word to describe the campaign and a great opportunity lost to add further value to the brand

The zoozoo saga continues with the 3G ‘superhero’

The ICC Cricket world cup in the sub-continent was bound to create a fight among brands to communicate and make the most of the eye balls the world cup was going to generate. It indeed can be seen to be true with a plethora of TVCs on air. The clutter just got more cluttered making it even more difficult to break it. Telecom brands, car brands, motor bike ads, insurance ads, bank ads, consumer electronics, fmcg etc are all there.

It also acts as a competition between ad agencies to make a name for themselves with their creative content. Ogilvy India has really stamped their authority over their peers. They manage to grab eye balls, clutter or no clutter. I think that for the Ogilvy guys, a Vodafone ad is not a client but a brand to experiment and give out their best creative content. Credit has to be given to the Vodafone brand managers too for their willingness to take risk and approve the creative rendition.

Rajnikant clearly has influenced the creative guys at Ogilvy. From exaggerated claims in smses and forwarded emails of Rajnikant’s superhuman capabilities to the world-saving Superman, have been successfully used here. It would be such a treat to be a fly on the wall when Ogilvy creative guys would be brainstorming on the ad.

I wonder what could have been the brief from the client servicing guys and the planners to the creative team. All other ads talking about 3 G have been focusing on how 3G helps see live content on phones and the faster speed of internet and low pricing. Vodafone too is talking about the speed but the way it has been depicted is quite fabulous. Using a superhero to communicate about the fast capabilities is quite an interesting and intelligent proposition considering the liking which, not just the Indians, but the whole world has towards superheroes.

Full marks to the TVC. The teaser campaign I must say was indeed successful. People would surely be wondering about what would be the surprise. Another thing I liked about the ad showcase was that it was a 60 seconder ad .And with exorbitant charges which the official telecaster charges, it seemed appropriate to show the ad for whole 60 seconds ad till the buzz is created and then trim the ad to show the bare essentials. The can bring a new ad continuing on the zoozoo saga of 3G superhero to keep the interest going. Bottomline, an awesome ad bringing a smile on your face.

We are the Blackberry boys- the next cool anthem

Vodafone does it again. They just seamlessly continue with awesome communications through their TVCs. It is a combined effort of marketing and advertising creative. Without the other, things would not have been the way they are. Vodafone is easily the brand with the highest recall. Its pioneering advertisements have given them an edge over not only its immediate competitors but also in the advertising clutter.

The Vodafone pug became the most prized property amongst children of the affluent classes. Although the pug belonged to Hutch, its transfer to Vodafone hasn’t been noticed as much. Then came the phenomenal Zoozoos which catapulted creative innovation to stratospheric levels. Lately Vodafone’s campaign targeting the pre-paid users with Rs. 4 plans and the lovable parsi parrot too had a high recall. Immediately its competitors followed suit and launched low cost plans just like the way they launched Value-added services usage ads after Zoozoos.

So Vodafone thinks first which then becomes the norm to follow. Its latest ad ‘We Are the Blackberry Boys’ is on the way to becoming the next cool anthem amongst college going kids for whom it is targeted. A very good case of two good brands coming together was benefiting the other. The marketing acumen was to target the youngsters to use internet on the phone which gives more revenues to the service providers. The problem was about the perception that Blackberry phones are used only by working professionals and businessman who want to check emails and are constantly on the move. By targeting the affluent youngsters who have the disposable income, the market pie has increased. This has been aided by the urge for people to update their social networking accounts like twitter or facebook frequently.

The ad is a clutter breaker and although being in English, is appropriately targeted. The ad at first seems to be a foreign Blackberry-Vodafone ad telecast in India but it should be no surprise to anyone that it is indeed made by Ogilvy India for the Indian audiences. On the contrary, I wouldn’t be surprised if the ad is played in the developed markets and wins an award or two at advertising festivals.

Creative Brief for Zoozoos

Being an advertising professional in the Client Servicing department, i give creative briefs day-in and day-out. For a change, i thought let me reverse the process. Following is my attempt to give a creative brief which can result in the creative product "Zoozoos"

Creative brief:

1. Who are we? What are we advertising?

Vodafone is a Multinational company operating in 31 countries and is the second largest telecom service provider in India in terms of revenues and subscribers after Bharti-Airtel. Over the years, Vodafone Essar, under the Hutch brand, has been named the ‘Most Respected Telecom Company’, the ‘Best Mobile Service in the country’ and the ‘Most Creative and Most Effective Advertiser of the Year. They believe in innovation and thus want to promote their Value-Added Services (VAS).

Voice has become commoditized and has ceased to be a tool for differentiation. Thus there is a need to develop alternative revenue streams for the telecom service providers. This is even more necessary due to the continuous entry of new players bringing down tariffs in the process reducing revenues for telecom service providers from voice.

There is stiff competition among the players resulting in one of the lowest tariff regimes ever. All operators are spending huge amounts on promotions and brand building. TV has been the preferred media for the ad spend accounting for more than 50 %

There are three categories of VAS applications

1. Entertainment- e.g. Jokes, Bollywood Ring-tones & games
2. Information- e.g. news alerts, stock market alerts, movie tickets,
3. Mobile commerce- e.g. mobile banking or mobile payments

Objective: to create awareness about the VAS applications and induce trial.

2. Target group: VAS applications are available for people of all age groups, right from exam results for a 20 year old to devotional songs for the old.

Thus age group is 20 onwards for both, men and women, married or single.

Media habit: TV and print majorly for people above 25. College going students nowadays are exposed to high degree of social networking sits such as facebook, orkut, twitter.

(Both men and women)

Top level executives: 40 years and above

Requirements with VAS applications- high speed internet connectivity. Major users of email on the phone. High income and high spenders

Mid level executives 30- 40 years

Requirements: high speed internet connectivity. Are technologically comfortable and hence use VAS applications such as mobile banking and information search apart from email. Medium income, high spending

Young professionals between age group of 22-30: tech savvy, early adopters, high spenders on technology due to either being single or experimental in attitude.

Youth from 15 – 22 years who are studying: early adopters but spending is constrained due to dependence on parents for income. Entertainment focus, affinity for social networking and peer communication. Peers act as strong influencers

We need to get away from the pug as it belonged to Hutch.

3. Competitive framework:

Primary competitors: Airtel (1^st Leader), RCom (3^rd Challengers) in terms of subscribers. BSNL (4th), Idea Cellular (5th), Aircel, Tata DoCoMo, MTNL follow.

(As per the figures of Quarterly reports for the quarter ended June 2009)

Secondary competitors in CDMA segment: Tata Indicom

Over the years, telecom players have used celebrities. Airtel has Shah Rukh Khan as its brand ambassador. RCom has Hrithik Roshan, BSNL has Deepika Padukone, Idea has Abhishek Bachchan, Aircel has Mahendra Singh Dhoni. Vodafone does not have a brand ambassador.

Airtel has over the years gone from tangible aspects in its communication to the intangible. Most notable of which is the bridging boundaries ad “There is no war or barrier that can keep us apart, if only we talk to each other”. The signature Airtel tune by AR Rahman has a very high recall.

RCom started with ‘karlo duniya mutti mein” and initiating the tariff wars not only in terms of voice price but also handsets. Presently it is running the Hrithik Roshan ads for promoting its GSM service.

Idea cellular started off slow but its “Sirji” campaign bought it into the limelight along with the ‘walk when you talk” ad. It has always experimented with social issues.

Aircel was a regional player in south but went national with Dhoni as its brand ambassador.

4. How is the brand perceived before the communication?

‘Happy-To-Help’ campaign. Customer service was never the focus of telcos. In an increasingly tough environment, Vodafone wanted to cater to this untapped issue which is so integral to service companies yet wasn’t a focus. Telcos wanted to increase number of subscribers as it allowed them greater reach and economies of scale. It also allowed them to ask for more ‘spectrum’ with the increase in number of subscribers.

Thus the ‘Happy to Help’ campaign was evolved to give the customers what was missing. This campaign was implemented across 45 offices and 4000+ Vodafone stores and mini stores involving over 10000 employees. The communication was through employee signing off emails and service calls with ‘Happy to help’ message, the cute little girl and the pug became synonymous with ‘helping each other’.

5. Insights: Consumer insight: mobile phones today have moved beyond their fundamental role of communications and have graduated to become an extension of the persona of the user. All are witnessing an era when users buy mobile phones not just to be in touch, but to express themselves, their attitude, feelings & interests. Customers continuously want more from their phone. E.g. Your caller tune signifies your personality trait or your mood

6. Core proposition?

Intangible: Fun with the cell phone.

7. Tone

Vodafone-Essar is among the top 2 players and thus it is a leader. Vodafone ads have always been clutter breakers right from the hutch boy and pug to the ‘Happy to help’ girl and the pug.

8. How do you want the brand to be perceived post the new brand communication?

Go beyond the connectivity, low cost and voice clarity aspects. Value-added services should be the growth driver for Vodafone. Volvo has top-of-the-mind recall when we say ‘safety’ or Bajaj has top-of-the-mind recall for scooters, Vodafone should be top-of-the-mind recall for Value added services.

Per-second billing- non-impressive

Tata DoCoMo came up with the ‘differentiating’ factor of per-second billing to enter the Indian telecom market with a bang. It surely did hit with a bang but unfortunately could not sustain this ‘differentiating’ factor. Other telecom service providers followed suit and converted to per-second billing. It resulted in more problems for the service providers with more losses in revenues.

I do not think this per-second billing is going to result in addition of subscribers or a churn in subscription form one service provider to another. Currently many a subscribers avail a call rate of 50 paise per minute or 30 paise per minute among the same service providers. Many of the plans include friend talk or group talk where the rates are as low as 10-20 paise per minute. The new plans of per second billing have rates of 1 paise per second which equals 60 paise per minute. Thus existing customers would not want to change over to the new plans. Moreover, with the implantation of Mobile Number Portability, I do not think there would be any churn due to per-second billing option.

Apart from this, only the pre-paid customers who are light users will find this useful. Post paid users who are heavy users would not be much impacted since the value of reduction in price would be negligible. The plans would help pre paid users who are almost 90% of the total subscribers but thinking of the future doesn’t seem to be the right idea. The only way the service providers would earn profits was if they used VAS. And thus targeting the post paid user would be a prudent idea.

The urban areas of India are congested and there is hardly any place for a new entrant irrespective of the differentiation. The rural areas are very sparsely penetrated and better infrastructure would result in addition of subscribers there. Even though the rural population are low spenders, the volumes of subscribers could do the trick for the service providers. And low tariffs could see the populace using more communications.

Thus I think, although analysts thought that per second billing would be the game changer in the telecom space in India, it is far from what is going to happen.

Of blood baths and paid baths:

There are more than 13 existing telecom players in 23 circles of India where the penetration in urban areas is more than 75% and in rural areas is about 12%. India, till last year, had one of the lowest tariffs in the world. Since Tata DoCoMo launched its per-second billing, all other service providers followed suit resulting in price war causing red line on the balance-sheet of already loss making telcos. Now, India has the lowest tariffs in the world with more to follow to attract customers.

The Indian market is one of the fastest growing telecom markets with 500 millions subscribers and yet a huge untapped population base. With paucity of infrastructure, telcos are increasing the customer base with future in mind. No problem till now but it starts when increasing customer base becomes the only objective with no regard for short term profitability or even sustainability. Just 2 or 4 major players in GSM and CDMA segment, things were on a tight rope for these telcos. But with aggressive new players wanting to make an impact, existing players are feeling the heat. New entrants will lose money as they fight for share, but that is something that happens to new entrants in most businesses. The smarter new entrants will likely share infrastructure and outsource most of their operations—both trends that the first generation of Indian telcos discovered only earlier this decade.

Thus with time (may be a couple of years), “voice” service by telcos will become a “commodity”. All prices will be on similar terms, distribution will be similar, and all telcos are going to increase promotion with time. Thus new entrants and existing players will have to come up with value-additions for customer delight and ways to find customer retention with the launch of Mobile Number Portability (MNP).

Value-added services (VAS) will form the core part of this strategy but it will all depend on the pricing model in this case. If the 3G auction results in players spending huge amounts of money to the government, the prices of VAS would be high thus causing a hindrance to its mass usage. The revenues for the players will not accrue resulting in more time for turning the tide towards profitability.

Thus a time will come when “voice” will be given free of cost and with the telcos charging for the VASs. It wouldn’t be a surprise of sorts and wouldn’t even be a bad economic decision since it follows on the models of other great companies such as McDonalds which does not make money on its burgers but makes them on French fires and the soft drinks, Multiplexes which do not make money on the ticketing sales for the movies but makes them on the popcorn, soft drink and the other food items available for the customer, NEWS Channels or newspapers do not make money on subscription but makes them on the ad sales.

Bottomline, a time will come when the telcos will be hoping to make money by giving the soap away and charging for the bath.

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.