Ringing in the moolah

Written by Alokananda Chakraborty | Updated: Jun 2 2009, 06:47am hrs
In 2007, during a visit to this country, Vodafone Groups then India-born CEO Arun Sarin had said that he aims to make the company Indias largest mobile operator with a marketshare of 25% by 2010.

Vodafones India story has unfolded fast and furious since then. And when the group, which has operations in over 30 countries and is the worlds largest cell phone operator by revenues, announced its annual (2008-09) results last month, the India plan looked well on course.

The companys revenues in India stood at 2.68 billion pounds, while from the entire Asia-Pacific region revenues were at 5.81 billion pound for the fiscal 2009. During the year, the company added 24.6 million customers in India and ended the year with the highest rate of net additions in the market. In fact, in March this year, Vodafone overtook market leader Bharti Airtel in subscriber additions, roping in 2.85 million new users.

As the numbers stand today, with 71.5 million subscribers and customer penetration of 34%, Vodafone is the second largest service provider by revenue in India. While announcing latest results, Vittorio Colao, chief executive, Vodafone Group, said, We have continued to drive penetration in India, generating strong revenue growth from our brand and commercial offers and a substantial investment in network coverage.

Analysts point out that one needs to assess Vodafones performance against the overall growth story in the mobile telephone market in India. In the last fiscal, the cellular subscriber base in the country grew 66% to touch 261 million, up from 157 million in 2006-07.

But what makes Vodafones India story so interesting is the sheer number of early obstacles in its way. For Vodafonewhich had acquired 67% stake in Hutchison Essar from the Hong Kong-based Hutchison Whampoa (the company was formally renamed Vodafone Essar in July 2007) with the stated aim of grabbing a piece of the fast-growing Indian mobile marketthe journey was fraught with branding booby traps.

First, brand Hutch had to make way for Vodafone, whose brand value was estimated at $21,107 million by MillwardBrowns 2007 Brandz, a ranking of the Top 100 Most Powerful Brands. And the transition was to cover 16 telecom circles, over 35 million customers, 4 lakh shops and thousands of employees of the erstwhile Hutch, which was then Indias fourth-largest mobile service provider.

All this was to be connoted through a new visual identityfrom the deep pink logo of Hutchison-Essar to Vodafones trademark deep red speech mark introduced in 1998.

What made the task complicated was the fact that in India, the brand Hutch itself had undergone several changesin fact, a year before Vodafone stepped in, Hutch had invested several crores to replace brand Orange in Mumbai.

Our aim has always been to grab the No 1 slot in the consideration set of the consumer, says Harit Nagpal, director, marketing and new business, Vodafone Essar.

The inaugural TV commercial showed the trademark pug (minus the boy) moving out of a pink kennel into a red one. An energetic version of Hutchs signature You and I tune played towards the end, as the super concluded, Change is good. Hutch is now Vodafone. There were four more commercials featuring Hutchs animated boy and girl, introducing the new brands logo to consumers.

Vodafone put in close to Rs 150 crore into the first phase of the rebranding exercisewith Rs 60 crore in mass media and another Rs 90 crore in retail activities.

In the second phase, Vodafone ushered in its global straplineMake the most of now, which replaced How are you in 2001. By then it was apparent, the boy-and-pug chapter would soon be over. In 2008, Vodafone used the platform of cricket when it unveiled the Happy to Help series during the first season of the Indian Premier League (IPL).

This season the Zoozoos are all the rage. These characters have virtually hijacked the online media as well as televisionto convey a value added service (VAS) offering in each of the new commercials.

From the looks of it, Vodafone can tick the check box on meeting its early branding challenges. But there are issues, such as falling average revenue per user (ARPU). It reported a fall in ARPU from Rs 350 per month in March 2008 to Rs 295 in December 2008, down to Rs 274 per month in March 2009.

The company is quick to point out that every player has suffered on the back of falling rates and that it is increasing focus in rural India, where usage is, in any case, lower.

Vodafone certainly hopes that the Zoozoos with their simplicity will take Vodafone one step ahead in its plan for India.