7 Airtel and Vodafone
7 Airtel and Vodafone
7 Airtel and Vodafone
Introduction
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INTRODUCTION
Telecom Sector In India
Than 125 million telephones network is one of the largest communication networks in
world, which continues to grow at a blistering pace.
The rapid growth in the telecom sector can be attributed to the various pro-active and
positive policy measures taken by the government as well as the dynamic and
entrepreneurial spirit of the various telecom service providers both in private and public
sector. The telecom sector has shown impressive growth during the past decade. Today,
more
Two striking features of this growth viz. increasing preference for mobile phones and
higher contribution of private sector in the incremental growth have predominated the
telecom sector. The share of mobile phones (including WLL mobile) has overtaken the
share of landlines with 62% in the total number of phones. The private sector's
contribution is also increasing rapidly. Currently more than 30 lakh phones are being
added each month and it is targeted that by the end of 2008 the total number of phones
may reach a level of 350 million taking the tele-density to more than 30% which is
currently at 24.63%.
Network Expansion: The total number of telephone subscribers has reached 281.62
million at the end of January 2013 as compared to 232.87 million in July 2009. The
overall Teledensity has increased to 23.63% in July 2013 as compared to 21.20% in
August 2011.
Wireless Service: The wireless segment saw a surge of 8.77 million subscribers last
month compared to 8.17 million in December 2012. This pushed the total wireless
subscribers base to 242.40 million by Jan 31 2013.
Wire line Subscribers: The wire line segment subscriber base stood at 39.73 million
with a decrease of 0.16 million at the end of January 2013.
Teledensity: The gross subscriber base reached 206.83 million at the end of March 2013.
The Teledensity is 24.63%at the end of January 2013 as compared to 18.31% at the end
of March 2011, registering an increase of 6%.
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Increasing Role of Private Sector: The private sector has played a significant role in the
growth of telecom sector. The share of private sector has risen to 85 per cent in December
2012 from 64.14 per cent in November 2011.
Tariff Rebalancing Measures: There has been a dramatic fall in the tariffs due to
increased competition. The minimum effective charges for local calls have fallen
considerably in recent months especially for cellular service. The long distance domestic
as well as international charges have also fallen considerably.
Telecom Regulatory Authority of India (TRAI): TRAI was established under the
Telecom Regulatory Authority of India Act, 1997 enacted on March 28,1997. The goals
and objectives of TRAI are focused towards providing a regulatory framework that
facilitates achievement of the objectives of New Technology Policy (NTP) 1999. TRAI
has endeavored to encourage greater corporation in the telecom sector together with
better quality and affordable prices.
AIRTEL
Airtel is a brand of telecommunication services in India operated by Bharti Airtel. Airtel
is the largest cellular service provider in
India in terms of number of subscribers.
Bharti Airtel owns the Airtel brand and
provides the following services under the
brand name Airtel: Mobile Services (using
GSM
Technology),
Broadband
&
VODAFONE ESSAR
Vodafone Essar, previously Hutchison Essar is a cellular operator in India hat covers 16
telecom circles in India Despite the official name being Vodafone Essar, its products are
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simply branded Vodafone. It offers both prepaid and postpaid GSM cellular phone
coverage throughout India and is especially strong in the major metros.
Vodafone Essar provides 2G services based on 900 MHz and 1800 MHz digital GSM
technology, offering voice and data services in 16 of the country's 23 license areas.
Vodafone Essar, previously Hutchison Essar is a cellular operator in India that covers
16 telecom circles in India . Despite the official name being Vodafone Essar, its products
are simply branded Vodafone. It offers both prepaid and postpaid GSM cellular phone
coverage throughout India and is especially strong in the major metros.
Vodafone Essar provides 2G services based on 900 MHz and 1800 MHz digital GSM
technology, offering voice and data services in 16 of the country's 23 license areas.
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Vision
"As we spread wings to expand our capabilities and explore new horizons, the
fundamental focus remains unchanged: seek out the best technology in the world
and put it at the service of our ultimate user: our customer."
Bharti Enterprises has been at the forefront of technology and has revolutionized
telecommunications with its world-class products and services.
Established in 1985, Bharti has been a pioneering force in the telecom sector. With many
firsts and innovations to its credit, ranging from being the first mobile service in Delhi,
first private basic telephone service provider in the country, first Indian company to
provide comprehensive telecom services outside India in Seychelles and first private
sector service provider to launch National Long Distance Services in India. Bharti had
approximately 3.21 million total customers nearly 2.88 million mobile and 334,000
fixed line customers.
Its services sector businesses include mobile operations in Andhra Pradesh, Chennai,
Delhi, Gujarat, Haryana, Himachal Pradesh, Karnataka, Kerala, Kolkata, Madhya Pradesh
circle, Maharashtra circle, Mumbai, Punjab, Tamil Nadu and Uttar Pradesh (West) circle.
In addition, it also has fixed-line operations in the states of Madhya Pradesh and
Chhattisgarh, Haryana, Delhi, Karnataka and Tamil Nadu and nationwide broadband and
long distance networks.
Bharti has recently launched national long distance services by offering data transmission
services and voice transmission services for calls originating and terminating on most of
India's mobile networks.
Bharti Tele-Ventures' strategic objective is to capitalize on the growth opportunities that
the Company believes are available in the Indian telecommunications market and
consolidate its position to be the leading integrated telecommunications services provider
in key markets in India, with a focus on providing mobile services.
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The Company has developed the following strategies to achieve its strategic
objective:
geographical coverage;
Offer multiple telecommunications services to provide customers with a "one-stop
shop" solution;
Position itself to tap data transmission opportunities and offer advanced mobile
data services;
Focus on satisfying and retaining customers by ensuring high level of customer
satisfaction;
Leverage strengths of its strategic and financial partners; and
Emphasize on human resource development to achieve operational efficiencies.
Competitive Strengths:
Bharti Tele-Ventures believes that the following elements will contribute to the
Company's success as an integrated telecommunication services provider in India and will
provide the Company with a solid foundation to execute its business strategy:
Airtel - The flagship brand for cellular operations all across the Indian country.
Touchtel - The brand earmarked for basic service operations.
India One - The brand for national long distance (NLD) telephony
Though the costs of creating new brands are heavy but the group wants to create
distinct independent brands to address different customers and profiles.
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In the early 1990s, the Indian government adopted a new economic policy aimed at
improving India's competitiveness in the global markets and the rapid growth of exports.
Key to achieving these goals was a world-class telecom infrastructure.
In India, the telecom service areas are divided into four metros (New Delhi, Mumbai,
Chennai and Kolkata) and 20 circles, which roughly correspond to the states in India. The
circles are further classified under "A," "B" and "C," with the "A" circle being the most
attractive and "C" being the least attractive. The regulatory body at that time the
Department of Telecommunications (DOT) allocated two cellular licenses for each
metro and circle. Thirty-four licenses for GSM900 cellular services were auctioned to 22
firms in 1995. The first cellular service was provided by, Modi Telstra in Kolkata in
August 1995. For the auction, it was stipulated that no firm can win in more than one
metro, three circles or both. The circles of Jammu and Kashmir and Andaman and
Nicobar had no bidders, while West Bengal and Assam had only one bidder each.
In 1996, the Telecom Regulatory Authority of India (TRAI) bill was introduced in the
Lok Sabha, and the president officially announced the TRAI ordinance on 25 January
1997. The government decided to set up TRAI to separate regulatory functions from
policy formulation, licensing and telecom operations. Prior to the creation of TRAI, these
functions were the sole responsibility of the DOT.
High license fees and excessive bids for the cellular licenses put tremendous financial
burden on the operators, diverting funds away from network development and
enhancements. As a result, by 1999 many operators failed to pay their license fees and
were in danger of having their licenses withdrawn. In March 1999, a new telecom policy
was put in place (New Telecom Policy [NTP] 1999). Under this new policy, the old fixedlicensing regime was to be replaced by a revenue-sharing scheme whereby between 8-12
percent of cellular revenue were to be paid to the government.
INDIAN CELLULAR MARKET - EARLIER ROADBLOCKS AND THEIR
RESOLUTION:
Indian Cellular market immediately after the first round of licensing in 1994-96 was beset
by several problems for 3 - 4 years till the New Telecom Policy of 1999 was announced.
Some of these roadblocks / current position is tabulated below:
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ROAD BLOCKS
CURRENT POSITION
High license fees
Migration to revenue sharing mode in 1999 mitigates high initial fund requirements for
payment of license fees. Inadequately funded businesses / weak and fragmented
promoters Businesses that have since been adequately funded growing at over 60% per
annum, while businesses with weak promoters continuing to languish - spate of
acquisitions / mergers, with 4/5 major groups emerging in the last one/two years.
Regulatory authority not in place
Telecom Regulatory Authority of India (TRAI) firmly in place, and its role being
accepted by all operators; Deptt of Telecommunications (DOT) restructured, with
operations and policy making roles vested in different bodies.
Issues relating to unfavorable interconnect terms for private operators, pass through
income, intra circle long distance, spectrum availability and allocation and the like
remained unresolved for long periods.
Interconnect terms since rationalized, risks on pass through income to DOT / BHARTI
(Mahanagar Telecom Nigam Ltd.) resolved to the satisfaction of all parties with changes
in methodology / revenue sharing, intra circle long distance allowed, spectrum
availability cleared with vacation of frequencies for usage by GSM operators.
Problems in Financial closures due to:
Licensing tenure of 10 years
Large upfront cash requirements from promoters due to heavy license fee burden
in initial stages of deployment Asset based financing approach by Indian Financial
Institutions.
Licensing tenure increased from 10 to 20 years
Large upfront cash requirements for license fee payments mitigated with
migration to revenue sharing mode allowing promoters to deploy more capital for
capital expenditure; project financing being considered by most financial
institutions.
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Roadblocks spelt out earlier resulted in low market / subscriber growth, but with
corrective measures taken, market / subscriber base expected to zoom.
DEVELOPMENTS IN THE CELLULAR INDUSTRY
The interconnection regime between cellular operators and fixed-line operators is still
biased against the former.
Despite the recent gains of the cellular industry, not everything is rosy. The cellular
penetration rate is still very low at 0.8 percent in a nation of over one billion people.
In recent years, many foreign companies had pulled out from their cellular joint ventures
in India due to the difficult operating environment and bureaucracy. In 1999 alone,
Swisscom pulled out from Sterling Cellular, Telstra from Modi Telstra and both the
Telecom Organization of Thailand and Jasmine International from JT Mobile. In 2000,
Telecom Malaysia sold its stake in Usha Martin Telecom, and both Shinawatra of
Thailand and Bezeq exited from Fascel. In June 2001, British Telecom exited from Bharti
Cellular. Bell South International has also indicated its intention to pull out from Skycell
Communications, and Hong Kong-based Distacom is seeking to sell its stake in Spice
Communications. First Pacific's (based in Hong Kong) continued commitment to Escotel
is uncertain, and the former is reviewing various options.
The string of sell-outs notwithstanding, there has been a merger and acquisition wave
sweeping across the Indian cellular industry in recent years. Hong Kong-based Hutchison
Whampoa, via Hutchison Telecommunications (HK), acquired major stakes in Sterling
Cellular (December 1999), Usha Martin Telecom (mid-2000) and Fascel (September
2000). Through a partnership with local company, Kotak Mahindra Finance, Hutchison
Whampoa practically controls Fascel and Usha Martin Telecom, thus circumventing the
49 percent limit on foreign ownership in Indian cellular operators. Hutchison Whampoa is
also the controlling shareholder of Hutchison Max Telecom. Not to be outdone, Bharti
Enterprises another major cellular player acquired control of JT Telecom, which
was later renamed Bharti Mobile (December 1999), and Skycell Communications
renamed Bharti Mobinet (August 2000). Bharti also acquired the Punjab license of Essar
and started operations, giving competition to the lone operator there, Spice
Communications. Going forward, Bharti is likely to merge all its cellular companies into
one entity.
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Five companies together bid Rs16.3 billion to bag the licenses for the fourth operator
slots in four metros and 13 circles. Bharti emerged as the No. 1 bidder with eight new
licenses, followed by Escotel with four, Hutchison with three, and Vodafone and Idea
cellular with one each. Bharti and Hutchison have already commenced operations in all
the circles while Idea is set to launch in Delhi. Escotel and Vodafone have not made any
headway.
BHARTI, the third cellular operator for Delhi and Mumbai, started services in March
2001. BSNL, as the third nationwide cellular operator, launched services in Kolkatta and
Bihar in January 2002. This was followed by Tamil Nadu in July 2002. A nationwide
launch was scheduled for 2 October 2002. However, this has been postponed until after
mid October. Once BSNL rolls out its service, most telecom circles will have four cellular
operators. There will be tremendous competitive pressure, which will result in lower
tariffs. Future rate cuts are expected, which will drive demand, together with falling
handset prices and the introduction of prepaid services.
In the midst of declining interest in technology stocks, Bharti came out with its longawaited initial public offering (IPO) in January 2002. Leveraging on the success of its
cellular service, the company got a very good response from the primary market. The
total size of the IPO was 185 million shares at a floor price of Rs10. The issue was
oversubscribed by more than 2.5 times, netting Rs8.3 billion. This will be used to fuel its
investment in long-distance, basic and cellular services.
Building visibility and awareness:
Deviating from competing on the price platform, cellular operators are actively promoting
their brand and service portfolio through high-visibility advertising and promotional
campaigns. Cellular operators like Bharti, Orange and BPL Mobile have been advertising
aggressively on hoardings and kiosks. Public transport like the city
rail system and cabs are used widely to carry the message of mobility.
Customer-focused activities are gaining traction among cellular operators with the
establishment of longstanding consumer benefit programs. Orange in Mumbai offers
"Orange Holidays" and "Orange Monsoon Offers" at very attractive rates and added
benefits like discounts on airfare, food and beverages, among others. Others offer special
privileges in retail outlets, cinemas and music shops.
Enterprise mobile applications - promising revenue stream:
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All along, customer acquisition and the top line have been the focus. Few operators have
concentrated on offering differentiated services for businesses. However, as operators
realize that offering basic voice and Short Message Service (SMS) will get them the
numbers but not the margins, some are now seriously looking at the enterprise segment
for provisioning superior services.
Cost-centered solutions like closed user group (CUG), value-adds like unified messaging
and instant alerts are being offered.
A variety of mobile applications are finding takers among the enterprise segment. Bharti
is in the process of introducing a facility to fleet management companies so that they can
improve the efficiency of trucks or buses by tracking movement and ensuring higher-use,
accurate route planning. Premium automakers are also installing a global system for
mobile communications inside a vehicle to help trace lost vehicles and track down stolen
cars.
Corporations can choose enhanced services like user-defined call routing to prevent
misuse. Calls can be barred, limiting access to select numbers and diverting calls to one
single number. Broadcasting services are also quite popular, especially among fast food
centers that have a central number. Group SMS is quite popular, especially among
enterprises both in the service as well as the fast-moving consumer goods (FMCG)
segment that have a large field force and need to provide regular updates on inventory
status, discount schemes and movement of goods from warehouse to the retail outlet.
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Year
Event
1851
1943
1985
1996
2002
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2004
2005
September 2006
November 2009
December 2010
January 2011
August 2012
January 1996
TRAI formed
November 1998
The National Telecom Policy of 1994 document, which laid out broad policy guidelines
rather than a series of action points. Like other policies, it sought to achieve the
impossible in finite time like improve quality of service and its availability, wide
coverage (a phone in every village), at reasonable rates, etc. The targets in quantifiable
terms were installation of 9.5mn additional lines, telephone on demand by 1997, and a
PCO pop of 500. The Eighth Plan had also allowed private operators in value added
services. To facilitate licensing, the nation was divided into 20 circles (akin to a state) for
basic and 21 circles for cellular telephony. Mumbai falls in Maharashtra circle and Delhi
in itself a circle.
Government did not achieve most of its stated targets. The basic theme, which was
broadening the reach of telephony in India, has not been met. Even liberalization policies
were not implemented properly. The regulator TRAI was set up after delays and
confusion and even after its creation, DoT continued to fight with it in courts. It was also
affected by the resource crunch, and financing options like BOT, BOOT and BOLT was
not used at all. The major policy direction it showed was to allow private sector entry in
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both basic and value added services. The intention, though noble failed to achieve its
goals because of improper implementation, the economic costs are still borne by the end
user.
The telecom sector has witnessed some fundamental structural and institutional reforms
in the past decade. Telecom equipment manufacturing was completely deregulated in
1991. Value-added services (including cellular services) were thrown open to private
sector participation in 1992. Basic services were opened to private participation in 1994
by dividing the country into 21 telecom Circles and allowing one private operator per
Circle to compete with DOT. An independent telecom regulatory Authority of India was
set up in 1997. A new Policy for Internet Service Policy Providers (ISPs) was announced
in 1998 allowing independent service providers to enter the sector ending the earlier
monopoly of VSNL. Reorganization of DOT, separating policymaking function and
service provision and corporatization of DOT's operational network are two major
institutional reforms, which need to be implemented.
Brand Strategy:
To understand the brand strategy, lets first look at the brand building exercise associated
with Airtel a brand that had to be repositioned recently to address new needs in the
market.
When the brand was launched seven years ago, cellular telephony wasnt a mass market
by any means. For the average consumer, owning a cellular phone was expensive as tariff
rates (at Rs 8 a minute) as well as instrument prices were steep sometimes as much as
buying a second-hand car.
Instead of the value-proposition model, we decided to address the sensory benefit it
gave to the customer as the main selling tack. The idea was to become a badge value
brand, he explains.
So the Airtel leadership series campaign was launched showing successful men with
their laptops and in their deluxe cars using the mobile phone. In simple terms, it meant
Airtel was positioned as an inspirational brand that was meant for leaders, for customers
who stood out in a crowd.
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Did it work? Repeated surveys following the launch showed that there were three core
benefits that were clearly associated with the brand leadership, dynamism and
performance.
These were valuable qualities, but they only took Airtel far enough to establish its
presence in the market. As tariffs started dropping, it became necessary for Airtel to
appeal to a wider audience. And the various brand-tracking exercises showed that despite
all these good things, there was no emotional dimension to the brand it was perceived
as cold, distant and efficient.
The brand had become something like Lufthansa cold and efficient. What they needed
was to become Singapore Airlines, efficient but also human. A change in tack was
important because this was a time when the cellular market was changing.
The leadership series was okay when you were wooing the crme de la crme of society.
Once you reached them you had to expand the market so there was need to address to new
customers.
By that time, Bharti was already the leading cellular subscriber in Delhi with a base of
3.77 lakh (it now has 1.8 million customers). And with tariffs becoming more affordable
as cell companies started cutting prices it was time to expand the market.
That is precisely what the brand tried to achieve through its new positioning under the
Airtel Touch Tomorrow brand campaign. This set of campaigns portrayed mobile users
surrounded by caring family members. Says Sachdev: The new campaign and
positioning was designed to highlight the relationship angle and make the brand softer and
more sensitive.
As it looks to expand its cellular services nationwide to eight new circles apart from the
seven in which it already operates Bharti is now realizing that there are new
compulsions to rework the Airtel brand, and a new exercise is being launched to this
effect. Right now, the company is unwilling to discuss the new positioning in detail. But
broadly, the focus is on positioning Airtel as a power brand with numerous regional subbrands reflecting customer needs in various parts of the country.
If Airtel is becoming more humane and more sensitive as a brand, Bharti has also
understood that one common brand for all cellular operations might not always work in
urban markets that are now getting increasingly saturated.
To bring in new customers, the company decided that it needed to segment the market.
One such experiment, launched last year, is Youtopia, a brand aimed at the youth in the 14
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to 19 age bracket and for those who are young at heart. With its earlier positioning,
Airtel was perceived as a brand for the well-heeled older customer; there was nothing for
younger people. With Youtopia, Airtel hoped to reverse that.
In order to deliver the concept, Airtel offered rock bottom tariff rates (25 paise for 30
seconds) at night to Youtopia customers a time when they make the maximum number
of calls. It also set up merchandising exercises around the scheme like a special portal
for young people to buy things or bid for goods.
The company is now looking at offering other services at affordable prices to this segment
which include music downloads on the mobile and bundling SMS rates with normal calls
to make it cheaper for young people to use.
The idea was to bring Internet and mobile in perfect harmony. The name was chosen
from the popular movie title It Takes Two to Tango: basically, you need the two services
to tango to offer customers a new choice, says Sachdev.
This, however, had less to do with the branding exercise as with inefficiency of service
(accusingly slow download speeds) and the limited utility of WAP services.
Subsequently, the ads were withdrawn, but the company re-iterated that the branding
exercise could be revived because Tango will be the brand to offer GPRS services or
permanent Internet connectivity on the mobile phone which Airtel is expected to
launch soon.
The Magic:
Perhaps the more ambitious experiment has been with Magic the pre-paid card. The
idea was to make the brand affordable, accessible and, most importantly, feasible as a
means of expanding the market even faster.
PHASE I
Magic was aimed at bringing in infrequent users of a mobile phone into the market and
assure him that he would have to pay only if he made a call. Such a customer used the
phone sparingly mostly for emergencies and was not willing to pick up a normal
mobile connection with its relatively high rentals (pre-paid cards do not include rental
charges).
Like Magic Daalo Say Hello which appealed to local sensibilities.
This apart, the company roped in Karisma Kapoor and Shah Rukh Khan for a major ad
campaign all across Delhi, a ruse that saw the number of subscribers go up from 5.47 lakh
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to 1.2 million today, overtaking Essars branded pre-paid card Speed, which was launched
much ahead of Magic. The company is now re-working its Magic strategy even further.
Earlier, the branding strategy was aimed at roping in only interested customers that is,
customers who were already inclined to opt for mobile services. But now, with basic
service providers having been allowed limited mobility at far cheaper rates, mobile
service providers could find themselves under threat again.
That is why the new exercise is aimed at co-opting non-adopters. While the exact strategy
is under wraps, insiders say the new branding strategy would be aimed at offering them
value which they had not perceived would be available from using a pre-paid card.
PHASE II
Bharti used Airtel Magic to build a strong value proposition and accelerate market
expansion through Indias first national pre-paid card TV brand campaign
to the lives of the SEC B & SEC C segment the middle class non-mobile user.
Airtel Magic positions itself on the platform of being excellent for emergency
Airtel today unveiled its strategy for market expansion with the launch of its new Airtel
Magic pre-paid card brand campaign Magic hai to Mumkin hai. The strategy is
targeted at the non-user
The brand ambassadors Shahrukh Khan and Kareena Kapoor embody this can do or
Mumkin Hai spirit (infact that is the reason they were selected as brand ambassadors).
Sharukh rose from a TV actor to become Indias top film star and national heartthrob.
Kareenas success is due to her attitude, talent, hard work and the sheer ability to make
a mark in such a short time. Both these stars have said Mumkin hai and made it happen
for themselves.
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The genre of this new strategy & campaign is Hindi cinema led. This genre connects
millions across India. The spirit of romance, dancing the Indian cinema, well known to
most as Bollywood, holds millions of Indians together as one.
The new TV campaign of Airtel Magic crafted in the Hindi film idiom, magnifies the
empowering optimism of Mumkin Hai, in the endearing situation of a boy-girl
romance. Where Sharukh Khan, sets his eyes on Kareena Kapoor and wins her love with
the help of Airtel Magic. (Poignantly conveying that special feeling we all get when a
dream is made possible and a victory of the heart is won).
The strategy & new brand campaign is targeted at the large untapped base of intending
mobile customers from Sec A, B & C. The estimated addressable market of such
customers in the next two years is around 25 million in Airtels 16 states. The new
strategy aims at correcting the perception that the mobile category is useful mainly for
business or work related scenarios.
The new strategy, brand positioning & brand slogan is an outcome of an extensive
nationwide research and is an integral part of Airtel Magics new multi-media campaign.
The campaign has been created by Percept Advertising.
PHASE III Bharti used Airtel Magic to build a strong value proposition and accelerate market
expansion through Indias first national pre-paid card TV brand campaign.
First time ever in India - any pre-paid card brand gives such freedom to recharge any
value
A combination of the film genre exposed through the TV medium designed to connect
with the masses of India
Youth based - romance driven strategy platform makes the value proposition of Airtel
The brand is positioned to be relevant to the mass-market who want to make all their
dreams, hopes & desires come alive instantly .At a amount of your choice you can
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recharge your account with available validity time .Improving productivity, letting you
befriend the world and opening up new horizons. It gives you the freedom to control
your life in a way never possible before. Indeed, anything that you think is possible is
possible with Airtel Magic. The new brand slogan Aisi azadi aur kahan has been
specially created to capture this effectively.
Bhartis View on its Branding strategy:
First, brand building efforts in todays context have to be seen in a more holistic manner.
Delivering value on a sustained basis is perhaps the most potent key to build a brand that
lasts.
Unflinching orientation to customer needs is the second key success factor. Customers (be
it for industrial products or consumer goods and services) across the world are more
informed and, at the same time, becoming more individualistic in their needs and far more
demanding with the passage of time.
Pro-active tracking of shifts in consumer behavior, anticipating redefined or emerging
customer needs, and then reacting in real-time are essential to attract and retain
customer loyalty a key element of creating brand equity in the present situation.
On the contrary, with more choices and higher media clutter, businesses need to budget
for an increasingly higher spend on their brand promotion but this has to be undertaken in
tandem with enterprise-wide reengineering of the business philosophy and core design,
production, and delivery operations for the product itself.
The positive spin to this argument is that by first addressing the fundamentals, the
enterprise itself becomes more competitive. This can be the beginning of a virtuous cycle
wherein brand equity continues to increase as the enterprise sustains delivery of an
appropriate product or service at an ever increasing value.
It is, however, crucial to note that in the years to come, not only will the cost of building a
regional or a national (or an international) brand will continue to rise but also the time
taken to do so will be longer and will need sustained and focused efforts.
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CHAPTER 2
Comparison between
Airtel and Vodafone
Marketing Strategies
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Market segmentation:
Geographical segment (metropolitans & cities India)
Demographic segment - middle income groups
People age group of 20 to 28 year
Target marketing:
People who living in cities and towns.
Poor or middle income group people.
Youngsters in big cities.
Businessmen
Positioning:
Creating brands (Sharukh khan & Sachin Tendulker)
Ads and promotions
Promotion for study of poor childrens.
Marketing mix:
Price:
low price strategy
Place:
maximum outlets and service centers
Product:
verities available for various groups
Promotion:
various schemes for pre-paid and post-paid
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Market segmentation:
Geographical segment (rural India)
Demographic segment - middle income groups
Target marketing:
People living in small towns and villages.
Poor and middle income groups.
Youngsters in big cities.
Businessmen
Positioning:
Creating brands
Ads and promotions
Marketing mix:
Price : low price strategy
Place : maximum outlets and service centers
Product : verities available for various groups
Promotion: various schemes for pre-paid and post-paid
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CHAPTER 3
Review of Literature
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Review of Literature
The Value of Customer Satisfaction and Comparison among telecom brands like Airtel
and Vodafone By Andrew Mennie, General Manager eGain Communications EMEA A
brief literature would be of immense help to the researcher in gaining insight into selected
problem. The researcher would gain good background knowledge of the problem by
reviewing certain studies. A reference to these entire studies will be related in the contest
of the shaping the present study.
Samuval (2010), in his study found that most of the respondents consider, size, quality,
price, instrument servicing are an important factors for selecting the handset of majority
of the respondents are satisfied over the payment system, quality of services, coverage
area, and attending the complaints.
Jha (2008), in his study analyzed that it is the youth which is the real growth driver of the
telecom industry in India. Considering this fact, the paper is an attempt to give a snapshot
of how frequently young people use their mobile phones for several embodied functions
of the cell phones. Data was collected from a sample of 208 mobile phone owners, aged
between 20 and 29. The study sheds light on how gender, monthly voucher amount and
years of owning mobile phones influence the usage pattern of this device. Findings of the
study would be helpful for the telecom service providers and handset manufacturers to
formulate a marketing strategy for different market segments.
Kalavani (2006) in their study analyzed that majority of the respondents have given
favourable opinion towards the services but some problems exist that deserve the
attention of the service providers. They need to bridge the gap between the services
promised and services offered. The overall customers attitude towards cell phone
services is that they are satisfied with the existing services but still they want more
services to be provided.
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Kumar (2002), in their study titled Customer Satisfaction and Discontentment vis-a-vis
BSNL Landline Service: A Study analyzed that at present, services marketing plays a
major role in the national economy. In the service sector, telecom industry is the most
active and attractive. Though the telecom industry is growing rapidly, India's telecom
density is less than the world's average telecom density as most of India's market is yet to
be covered.
Seth et al (2001), in their study titled Managing the Customer Perceived Service Quality
for Cellular Mobile Telephone: an Empirical Investigation analyzed that there is relative
importance of service quality attributes and showed that responsiveness is the most
importance dimension followed by reliability, customer perceived network quality,
assurance, convenience, empathy and tangibles. This would enable the service providers
to focus their resources in the areas of importance. The research resulted in the
development of a reliable and valid instrument for assessing customer perceived service
quality for cellular mobile services.
Kalpana and Chinnadurai (1998) in their study titled Promotional Strategies of Cellular
Services: A Customer Perspective analyzed that the increasing competition and changing
taste and preferences of the customers all over the world are forcing companies to
change their targeting strategies. The study revealed the customer attitude and their
satisfaction towards the cellular services in Coimbatore city. It was found that
advertisement play a dominant role in influencing the customers but most of the
customers are of opinion that promotional strategies of cellular companies are more sale
oriented rather than customer oriented.
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CHAPTER 4
Research
Methodology
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Research Methodology
Achieving accuracy in any research requires a deep study regarding the subject. The
prime objective of the project is to compare Airtel with the existing competitor
(Vodafone) in the market and the impact of WLL on Airtel.
The research methodology adopted is basically based on primary data via which the most
recent and accurate piece of first hand information could be collected. Secondary data has
been used to support primary data wherever needed.
Primary data was collected using the following techniques
Questionnaire Method
Direct Interview Method and
Observation Method
The main tool used was, the questionnaire method. Further direct interview method,
where a face-to-face formal interview was taken. Lastly observation method has been
continuous with the questionnaire method, as one continuously observes the surrounding
environment he works in.
Exploratory:
Type of research carried out was exploratory in nature; the objective of such research is to
determine the approximate area where the drawback of the company lies and also to
identify the course of action to solve it. For this purpose the information proved useful for
giving right suggestion to the company.
Data Collection method
There two type of method of data collection.
Primary data
Secondary data
Questionnaire Method
Observation Method
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The main tool used was, the questionnaire method. Further direct interview method,
where a face-to-face formal interview was taken. Lastly observation method has been
continuous with the questionnaire method, as one continuously observes the surrounding
environment he works in.
Data used for the research work was primary in nature.
Primary data:
Primary data is that which is the collected for the fist time and thus happen to be
originated in character.
Questionnaire survey:
In the studies a questionnaire is prepared. The questionnaire consists of 15 questions.
Secondary data:
Secondary data refer to the data that has been already collected .the secondary data, which
has been used to carry out this study, are as follow:
Industry Reports
Method of collection: Field procedure for gathering primary data included observation and interview schedule
in which the questionnaires were filed by the interviewer.
Personal interviews through self administered survey was done to collect the data, market
research was undertaken, that was accomplished by performing various activities
designed.
The questionnaire was formulated by keep in mind the following Points:
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To conduct this research the target population was the mobile users, Who are
Internet
Magazines
Newspapers
Journals
Bharti Circulars Store
Bharti News Letters
Vodafone Store
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CHAPTER 5
Data Analysis and
Interpretation
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June-08
Sep-09
Dec-10
Mar-11
Dec-12
Mar-13
Airtel
3.19
4.62
5.50
6.54
10.98
14.07
Vodafone
1.82
4.19
6.24
7.26
10.45
12.99
Source TRAI:
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Operator
Bharti Airtel
19.06
22.49
Vodafone
21.81
16.96
Reliance infocomm
17.03
16.01
Idea Cellular
10.45
8.49
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As we can see from the above graph, the people who are in the age group of 21-28 years
are the ones who are the maximum users of mobile phones. This segment is the one
which gives maximum business to the mobile operators. This segment constitutes the
young executives and other office going people. They are 65% of the total people who
were interviewed. The next age group are the people who are 28-35 years old. They are
20% of the total. They are those who are at home or have small business units etc. And
the next age group is the youngest generation who are 15-21 years old. They are school
and college going students and carry mobile phones to flaunt. They are 15% of the total
interviewed people.
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Occupation Graph
OCCUPATION
10%
15%
20%
55%
STUDENTS
EXECUTIVES
HOUSEHOLDS
OTHERS
As the above graph shows that 55% of the total people interviewed are working. So, these
people are the ones who are the maximum users of mobile phones. They are the young
executives, managers, Tele - callers etc. who require mobile for their official purposes.
The next category is the households, who are either housewife, small units which operate
from their homes etc. They are 20% of the whole. The next segment is the students. They
are 15% of the whole. And 10% of the whole is categories who are the professionals.
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These are the total market share of mobile user or people captured by the mobile provider
company. There two major company in mobile phone service sector Vodafone and Airtel
who respectively hold the market share with other company as 17% and 20% of total
market user segment of mobile customer.
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20%
10%
60%
FULLY
PARTIALLY
DISSATISFIED
FULLY DISSATISFIED
As the above graph clearly shows that customer services at Airtel seems poor. 60% of the
people are dissatisfied with the customer services provided by Airtel. They are the ones
who have the maximum share in the market but they are lagging behind in the customer
services. 10% of the people were fully dissatisfied with the customer services of Airtel.
This could leave an impact on the mind of the consumer. He can even switch over his
brand. 20% of the people seemed partially satisfied with the customer services and only
10% seem to be fully satisfied with Airtels customer services, which is a very small
amount.
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Cash cards seemed quite popular among the people interviewed. 85% of the total mobile
users were having cash card connections. This means that the cash cards should be easily
and readily available in the local markets. Airtel should make sure that Magic is available
in each and every nook and corner of the market. 15% of the people were having sim
connections which is the regular bill.
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24%
12%
Rs 600
Rs 450
Rs 200
64%
people spend this amount. 24% people spend RS 300 per month as their monthly mobile
expense. And the remaining 12% had an expense more than RS 1000, they could the ones
having sim connections or having cash cards and having a lot of business calls on their
mobiles.
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WLL seemed to be a new word for many of the people. 45% of the people were not at all
aware of such a technology. So, in order to get the answer for this question they were first
explained the concept. Only, 55% people knew what WLL is all about.
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Vodafone was the brand which was popular amongst the interviewed people. As Vodafone
had done so much advertising and has it banners and hoarding spread all over Delhi. So,
this could be one the reasons of its popularity. Tata was hardly a known brand in this new
field. Possibly, because of less promotions done by them as compared to Vodafone.
On the basis of analysis of the questionnaire I have found that the maximum no. of
people who use mobile phones is in the age group of 20 to 28. Who are the young
executives and other office goers?
They spend a maximum of RS 500 as their mobile expense.
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Airtel
Vodafone
Reliance
TATA
Idea
Interpretation:Customer preference towards Airtel is 42%, Vodafone 28%, Reliance 14%, TATA 10%
and Idea 6%.
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Interpretation:Customer usage 0 to 2 years 48%, 2 to 5 years 30%, 5 to 10 years 16%, more than 10
years is 6%.
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Yes
No
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4. Here are the customer responses about the use of the Airtel product and other
product rather than Airtel.
in this segment of survey 60 % of customer are aspire with Airtel and 40 % shown
interest in other telecom products in urban areas.
Interpretation:60% of customers are aspire towards Airtel and 40% of the customers aspire towards
other brands.
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Interpretation:66% of customers are agreed that they collect information before purchase and other
34 % customer showing no interest before purchase.
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SWOT Analysis
Strengths
Being one of the largest companies in India the company has achieved a
degree of focus in its core business of its products.
It has a strong brand name, superior quality products and an enviable
distribution network.
It has a clear and well-defined organization structure and limits of financial
authority.
Increase in advertisement spends affect the companys margins.
The companys bottom line falls victim to the bloated and highly paid
workforce, which affects its margins.
Weakness
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raw materials would have significant impact on costs and margins of the
company.
Moreover, inordinate hike in Broad Band Internet products would also
increases companys production and distribution cost.
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CHAPTER 6
Limitations and
Suggestions
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Limitations
No project is without limitations and it becomes essential to figure out the various
constraints that we underwent during the study. The following points in this direction
would add to our total deliberations:1. During the study, on many occasions the respondent groups gave us a cold shoulder.
2. The respondents from whom primary data was gathered any times displayed complete
ignorance about the complete branded range, which was being studied.
3. Lack of time is the basic limitation in the project.
4. Some retailers/whole sellers refuse to cooperate with the queries.
5. Some retailers/wholesalers gave biased or incomplete information regarding the study.
6. Money played a vital factor in the whole project duration.
7. Lack of proper information and experience due to short period of time.
8. Some retailers did not answer all the questions or do not have time to answer.
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Suggestions
Following are the few suggestions to AIRTEL for improving the market share and image
of the products concerned.
1. PRODUCT
Modification must be brought about in AIRTEL, in terms of quality. Its demand
should be increased.
2. PLACE
The brands must be made available easily in, PCO & general stores.
3. PROMOTION
Company must undertake extensive promotional activities like advertisements
prospects.
Catalogues should be distributed among customers.
4. PRICE
Price should be as competitive as other company maintains
Distribution of new connection should be in reach of customer pocket
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CHAPTER 7
Conclusion &
Recommendations
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Conclusion
After analyzing the findings of the research, I can conclude that Airtel lagged behind its
competitors as far as customer service and availability is concerned. The maximum no. of
people who use the mobile is in the age group of 20 to 28. Cash cards are the most
popular type of mobile connections, as they are consumer friendly and recharging the
connection is not a problem.
Maximum no. of people spends RS 500 on their connections. As Airtel is the only
company having the maximum no of mobile connections so it must seriously look into the
loop holes of the existing customer service department.
As we know that now Airtel has already launched its product with logo Aisi azaadi aur
kahan has already became popular in market. So we can say that in spite of so many
competitors in the market Airtel is having a good position just because every time, it tries
its best to understand the need of its important customers.
From the comparison and deep analysis of every aspect of business of both the companies
we can conclude that bharti Airtel has to more work in every field of communication
business. For this Airtel has to work on its all marketing strategies, marketing, promotion,
brand image.etc. Airtel has to take Vodafone. Very seriously and update its own strategies
from time to time and when the need arises. With aggressive marketing strategies Airtel
has to target rural India as 70% of population of India lives in these areas.
.
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Recommendations
I have made following recommendation to the company after doing the summer training
there:
The company should modify its credit policy as they only target the cash paying
competition.
The company should keep an eye on the proper delivery of the goods to exporter
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Bibliography
Page 58 of 63
Bibliography
In this project report, while finalizing and for analyzing quality problem in details the
following Books, Magazines/Journals and Web Sites have been referred. All the material
detailed below provides effective help and a guiding layout while designing this text
report.
Books :
Principles of Marketing Philip Kotler & Kevin keller edi. 12
Market Research D.D. Sharma
Research Methodology C.R. Kothari
Websites:
www.Airtelworld.com
www.google.com
www.india.com
www.Vodafone.in
http://www.blonnet.com/2004/06/26/stories/2004062602180700.htm,Mumbai,
June 25, 2004.
http://www.domainbcom/companies/companies_r/Vodafone_infocom/20031104_s
top-roaming.htm,4 November 2003
Magazines:
Airtel (2 July to 10 July 2004)
Airtel India page of HT paper (Thursday 1December 2004)
Cowards India (26 December to 4 Jan. 2004)
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Annexure
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Questionnaire
Dear Sir/Madam,
I Khushwant Singh, student of MBA of Desh Bhagat Institute of
Engineering & Management, Moga. I am doing my project on Comparative analysis
of marketing strategies of Vodafone and Airtel.
Please give your precious time for filling these details.
Q.1 Name those companies which provide telecom services now a days?
Airtel
Vodafone
Reliance
TATA
Idea
Q.2 which mobile company services you are using now a days?
Airtel
Vodafone
Reliance
TATA
Idea
Q. 3 Among them, which Brand you, prefer most?
Airtel
Vodafone
Reliance
TATA
Idea
Q.4 How long you have been using this Product?
0-2 Years
2-5 Years
5-10 Years
Yes
No
Airtel
Vodafone
Reliance
Excellent
Good
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Q.9
What are the features you look for in a product before making purchase decision?
Brand credibility
Price and Discount
After sales services and parts, network
Value for money
Vehicle performance
Add on features or ergonomics of design
Q.10 Which of these marketing / sales schemes attracts you while purchasing any
connection?
Good Network
Discount scheme
Service package
Any other
Q.11 If you have to purchase a new connection or product in near future, which Brand
will you go for and why?
________________________________________________
________________________________________________
Q.12 Are you aware of various promotional activities being run by Airtel, if yes then
how? Are you satisfied with these promotional activities?
Customer Care
By Ad Films
Very
Satisfied
Satisfied
Somewhat Not
Satisfied
satisfied
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By Camp
24 hrs call center services
Q.13 How would you rate Airtel performance as your expectation on 5 points
scale (5 Highest?)
1
Q.14 What are you suggestions for improving the product quality, service availability
and parts availability?
________________________________________________________________________
______________________________________________________
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