Tired of long term commitments? You can now change your partner at the click of a button. If you choose do so you will be treated like a king, promises your new suitor. And if you are still not satisfied then the new relationship comes with an expiry date of 90 days. You can change your partner again!
No, we are not talking about an improved dating service in the country. We are talking about the recently launched mobile number portability (MNP) service by telecom operators. The customer is being treated like a king and every telecom operator is trying its best to entice away subscribers from rival brands.
The mobile phone has been a powerful tool for India?s 707 million-plus subscribers but true freedom of choice has eluded them as they were stuck with the same service provider even if they weren?t happy with the services for fear of losing their mobile phone number. The reasons for switching telecom service providers are pretty much universal. It could be better quality of services, better network coverage, and better customer service. There could be plethora of factors that would make a customer switch over to another operator. But clearly, the customer is now in the driver?s seat and has the power to change the telecom game forever.
January 20, therefore, was a red letter day for the Rs 30,000 crore Indian telecom sector as the second stage of the mobile revolution took off with the much awaited MNP service kicked off. And as subscribers finally had the freedom to switch operators, the 14 brands in the market changed their marketing strategies to incorporate this new reality. Besides the ongoing task of increasing the subscriber base, telecom companies now have two new challenges?one, lure customers of other telecom operators and, two, prevent their own customers from switching brands. For it is clear that old marketing gimmicks will not work and should be put on the backburner.
The MNP service was first launched in Haryana on November 25, 2010.
Approximately, 1,50,000 subscribers have switched their service operators in Haryana since the launch of MNP, which is nearly 6% of the total subscriber base of 17.6 million in the region.
Industry sources reveal that in Haryana, Vodafone Essar has been the biggest gainer with 42,157 customers porting in while 11,368 Vodafone Essar customers ported out.
Idea Cellular was the first to start advertising about the MNP services and it launched its ?Get an Idea? campaign just days before the launch in Haryana. The ads featuring its long standing brand ambassador Abhishek Bachchan has a straightforward message for customers. The ads highlight various reasons why a customer should choose Idea over their existing telecom service provider. For instance, the ads talk about Idea?s network strength, customised tariff plans, transparent balance notification and better customer service.
Says Anupama Ahluwalia, senior vice-president, marketing, Idea Cellular, ?Idea took the lead to make consumers aware about MNP. With this campaign we affirmed that Idea was ready to enable MNP on its network, the first operator to do so. The ads were designed to demonstrate Idea?s strengths in being a pan-India network offering seamless connectivity across the length and breadth of the country; affordable and relevant products and service offerings; accessible and humane customer care; accurate billing systems; voice clarity and no call drops.?
Arun Iyer, executive creative director of Lowe Lintas, which handles the creative duties of Idea Cellular, says the brief that it received from the client was pretty simple. ?MNP is around the corner and therefore let?s start talking about it was the brief. So we started talking about various strengths of Idea in an ?Idea Cellular? tone. Since we were the first ones to launch the campaign, it worked brilliantly and Idea took the lead. There were no challenges as such as far as the campaign is concerned. But when you are making strong claims it is important to live up to it. And Idea Cellular as a brand is already providing that to its customers.?
The big two ?Vodafone Essar and Airtel ?preferred to adopt a ?wait and watch? policy and started advertising about the MNP service only in January.
Says Kapil Arora, country head – Team Vodafone, Ogilvy and Mather, the ad agency for Vodafone, ?The brief we received from Vodafone was very clear and simple. Vodafone is one of the most loved brands in the country. And MNP would make the brand accessible to all those who were held back by the shackles of their existing numbers until now. We were to convert our share of heart amongst potential ?porting consumers? and ?fence sitters? into an incremental share of the market.?
But did Idea Cellular get the first mover advantage in the space? ?The first mover advantage is important in that it works to the extent of reminding a consumer about your brand when he is considering moving. But the brand/s that will gain most from portability is the one that has its basics?network, value, service, offerings – and equity, well in place over a period of time,? says Arora.
?We started the campaign on television, and later moved on to radio, digital and outdoor. We launched a toll free number to guide over 700 million mobile subscribers on various aspects and procedures of number portability. We also launched a microsite. The strategy was to get the first mover advantage on MNP and connect with mobile consumers by guiding them to make well informed decisions,? says Idea?s Ahluwalia.
However, Samaresh Parida, director-strategy, Vodafone Essar, says, ?The choice for MNP for customers will be triggered by a number of factors. Companies that have a strong brand proposition, superior network quality, innovative and differentiated products and services and greater predictability of quality of customer service will have an edge. High value customers are extremely wary of changing to the new lot of service providers that have limited or untested network coverage and quality. We have made considerable investments and are geared up with the technology to enable number portability. Our business and brand proposition backed by the quality of network and customer service, positions us to benefit from MNP.?
Every telecom player in India has given an enthusiastic nod to MNP. ?From Reliance Communications (RCOM) point of view we consider the MNP as a positive step. It gives tremendous opportunities to RCOM to get new customers. Given that the portfolio of products and services offered by RCOM are far superior, we can benefit from MNP,? says Mahesh Prasad, president, marketing (wireless business), Reliance Communications.
For newer entrants like Uninor and Tata DoCoMo, MNP offers an opportunity to lure away customers of older brands who may not be satisfied with their current service operators and find the plans of the new brands more attractive. Rajiv Bawa, executive vice-president, corporate affairs, Uninor, says, ?Customers are finally free to choose as they want. Customers now have real power to make their operators pay attention. This is free and fair competition and we welcome it. We are ready and eager. In dynamic pricing, we have a product that stands apart from anything else out there in the market. MNP will now allow prepaid subscribers to get the benefits of upto 60% location and time based discounts on their calls by moving to Uninor.?
Deepak Gulati, executive president, mobility business division, Tata Teleservices, which operates the GSM service under TataDoCoMo, says, ?We have been strong advocates of MNP for years and welcome the new regime. This is a beginning of an era which will give new direction to the Indian telecom industry. As a Tata Group company, we have always felt that the power of choice should be left to the customers. Customers should have the right to choose whichever service provider they find the best and it is up to the operators to provide the best possible services to keep their customers loyal to them. MNP will be a great leveler, because it will liberate telecom users and give them the power of choice.?
Airtel and its ad agency JWT declined to comment on its MNP plans.
While national players are gung-ho about their multi-crore advertising plans on MNP, local players like Loop are not far behind. The telecom player that operates only in Maharashtra is betting big on the MNP game. Says a Loop spokesperson, who did not want to be named, ” Subscriber acquisition cost is expected to go up by 20-30% as a result of port-in customers. However we are welcoming that as we have initiated this through a strategic planned approach since April 2010. We have targeted an investment to the value of $100 million across 2010-11 to make our network robust.?
Brand analysts point out that though telecom is a very vibrant sector as far as advertising is concerned, the MNP advertising has been pretty mundane. Harish Bijoor, noted brand consultant and CEO, Harish Bijoor Consults, says, ?Most of the MNP advertising looks very, very generic. It quite looks like the suiting ads of yore, wherein you could not make out one brand from another. Creativity has remained at a very low degree here. Very few, if not none, stand out from the clutter. Idea Cellular has however used the ?No Idea? line well enough on television and on radio for MNP. The radio-use comes out strong in their tier-2 town efforts. None of these ads are however going to be effective as everyone has pitched into the clutter. Doing MNP advertising looks like a no-option situation. Everyone is doing it, therefore I have to do it as well! Part of telecom hygiene-factor advertising!?
But Arora of Ogilvy & Mather defends, ?The important part is to do something the consumer resonates with. Just asking someone to ?switch? is not good enough, nor is communicating generic category benefits. For you to be considered at all, the basic requirements of great network, offerings, service and value are table stakes. To move consumers, you?ve got to welcome them into your world. Show them the intangible; paint a picture for them as to what they can expect when they come to you.?
Even in other south east Asian countries like Singapore and Malaysia , the MNP advertising strategy used by players such as Maxis, Celcom, Digihas and Singtel has been the same. A senior Indian advertising veteran who currently lives in Singapore and handles a local telecom brand there says, ?The key insight was that people did not want to change their service provider despite bad service for the fear of changing numbers and then informing their address book of that change. That was the key barrier that MNP changed. So it?s was like a category message and brands did very little to advertise. The ads were done just to increase basic awareness level. Hence, worldwide you will see brands doing minimal advertising on MNP.?
More importantly, MNP may not turn out to be as big a game changer as it is made out to be. After the initial enthusiasm to change operators, there could a tendency to remain with one?s service operator as people realize that there is not much difference between services of rival brands. As the Singapore-based ad veteran says, ?One avails MNP if a particular service provider is very, very bad. If everyone is equally good or equally bad, MNP does not work. And then the inertia against change? a very basic human nature. So globally MNP does not even account for 1% of a company?s total revenue.?
Agrees Ahluwalia of Idea Cellular. ?We don?t expect huge impact or churn in the market, post MNP in India . MNP was conceptualized to offer freedom of choice to the consumer. However, its relevance is diluted in today?s time as the Indian consumer already enjoys a choice from up to 14 operators in the market with low tariffs and dual SIM phones.?
However, there are some who believe that the Indian market could spring some surprises. According to a recent report by (NEED DESCRIPTOR) Kotak Institutional Equities, ?Global experience suggests that MNP excitement fades off with time and that MNP has not had a meaningful impact. However, we believe that the Indian wireless market is different (high competitive intensity, no handset subsidies, no long-term contracts even in the postpaid segment) and more importantly, the Indian consumer is different ? hence, MNP impact on the Indian wireless market dynamics will likely be different, in our view.? The report points out that severe price competition over the past two years in the Indian wireless market has impacted the low and mid-end of the subscriber base. ?MNP now broadens competition for subscribers/revenues to the entire subscriber base. We do believe that network quality is likely to play as important a role in the competition within this segment as pricing,? it says.
It will be a ?wait and watch? game to see how MNP changes the fate of telecom players in India . But next up is the launch of the much awaited 3G service in India . And experts say since telecom players have made huge investments to acquire the 3G spectrum, the initiative to get the return on investment will be extremely aggressive. The 3G auction happened in April 2010 and telecom players got the allocation in September 2010. A total of Rs 50,968.37 crore was spent by seven telecom operators towards acquisition of 3G licence and spectrum. The list includes Vodafone Essar, Reliance Communications, Tata Teleservices, Bharti Airtel, Aircel, Idea Cellular and STel. The service will enable customers to enjoy multimedia services, provide higher internet and broadband speed on their handset with the ability to view videos on the mobile phone, make video calls, watch live TV and many other features.
Tata DoCoMo is the first telecom operator to launch the 3G service in India . The brand acquired 3G spectrum for nine telecom circles for 3G mobile and data services and launched the services in November last year. Anil Sardana, managing director, Tata Teleservices, said. ?We have been able to complete the ramp-up of our network to support 3G services due to the superb 3G-ready network we created at the time of our 2G launch itself, last year. Our 3G rollout across all nine circles will be completed this year itself. We have cherry-picked the best telecom circles in the country from the perspective of cumulative market potential for our 3G services. We will cover 51% of Indian towns with a population of over a million and 60% of towns that have over half-a-million people. Additionally, our footprint covers 55% of households with an annual income of over Rs 3 lakh, and 49% households in the SEC A+B category. All these parameters provide us with fantastic market reach and potential ”
Bharti Airtel is the second telecom player to launch the 3G service in India . It launched the 3G service in Bangalore last month and plans to launch 3G services in 40-plus cities in 13 telecom circles by March. It plans to rollout to 1500-plus cities across the country by March next year. Sanjay Kapoor, CEO – Bharti Airtel (India & South Asia) had then said, “3G is much more than a technology migration – it is a transformational shift – and Airtel’s focus would be to bring to its customers an enriched user experience on the back of a world class delivery network. ”
The advertising war on 3G has not yet started, probably because bigger operators such as Vodafone Essar and Idea Cellular are yet to join the bandwagon. Kapil Arora of Ogilvy and Mather prefers to keep Vodafone Essar?s 3G marketing strategy close to his chest, saying, ?Vodafone will be ready to launch in the first quarter of this year. So, communication will also be planned accordingly.?
But Arun Iyer of Lowe Lintas has the last word when he says, ?3G is all about faster speed, content, connectivity and all those technically superior offerings. And it is exactly what every telecom payer will say in their advertising. However, what will differentiate one from the other is the tone and the manner in which the brand message is given. Only those 3G ads will work where the brand personality comes through.?