Airtel and Vodafone seem to be having an on/off relationship. Vodafone which owned a 5.6% stake in the Airtel business sold it back to Airtel, and instead invested in its rival Hutchison Essar. Knowledge and technology previously available to Airtel now moves into the hands of one of its competitors.
AIRTEL MAGIC Roll Nos:8201 to 8212 Div B
Background Note Cellular telephony was introduced in India in early 1990’s. Only two major players- Bharti (Airtel) & Essar. Only post paid services available and very high tariff rates about Rs.16/min for outgoing calls. Monopoly prevailed and tariff rates as well as handsets were very expensive. Hence phone services regarded as luxury and target customers were elite segment of society.
Why limited growth? High Tariff rates Services restricted only to Metros. Lack of awareness among people. Low standard of Living. Government regulations.
Launch of PRE-PAID Services Major cellular services providers launched pre-paid services in late 1990’s. The main aim was to target customers from all sections. Prepaid cellular cards gained quick popularity. Tariff rates declined 75% between 1990-2000. By October 02 ,out of the 8.5 million users , 65% belonged to prepaid segment. An estimated 80% of new add-ons were prepaid subscribers.
The Magic of magic…… Bharati launched its own prepaid cellular service under magic brand in Jan 99. First launched in Delhi and later in other circles in India. Magic targeted at infrequent mobile users. Acquiring a magic connection was made very easy. Made more accessible with magic made available at Departmental stores, gifts shop, telephone booths, Kirana stores etc. It offered instant connectivity , STD/ISD facility, voice-mail and sms facility. Made available in various denominations (300-3000).
Radical transformation in cellular market The subscriber base increased to 6.4 million in March 2002 as compared to 3.5 million in March 2001. Growth rate in subscribers Rajastan 179% Harayana 151% Kerala 151% Analysts estimated that the number of subscribers in 2004 would reach 25 million as compared to 4.5 million in 2002. The immense potential lured all major players and hence Bharati also felt the need to revamp its strategies to retain its position.
Revamping the marketing strategies Newer areas, changes in pricing, positioning and advertising. New value additions and better services. Magic brought under Airtel and renamed AIRTEL MAGIC. Magic positioned as friendly, mass-market brand. Magic targeted at youth and stood for simplicity and attitude “Anything is possible” Logo was changed which now reflected energy, simplicity and friendliness.
Introduced special features . It also introduced doorstep delivery of Magic cards. In mid 2002,Bharati launched regional roaming network in Asia for magic subscribers. Also regional roaming facility was offered to customers within the country as well. It also waived intra-operator call charges in some parts of the country.
Celebrity Endorsements In 2002, Saurav Ganguly and Leading movie stars Madhavan and Kareena Kapoor were signed as the endorsers of Airtel Magic. Objective was to cash upon the two biggest passions of Indian masses-Movies & Cricket. In October 2002, a TVC was launched featuring Shah rukh khan and Kareena Kapoor. This TVC was developed by Percept Advertising, India’s leading advertising agency.
THE MAGICAL TAGLINES YOU CAN DO MAGIC MAGIC HAI TOH MUMKIN HAI KABHI BHI KAHIN BHILIFE BANAO AB AUR BHI AASAN
Market Leader Airtel comes to you from Bharti Airtel Limited The businesses at Bharti Airtel have been structured into three strategic business units (SBUs) - Mobile services, Broadband & Telephone services (B&T) & Enterprise services. First private telecom service provider to connect all states of India . Covers 23 telecom circles of the country, has 21 million customers Highly successful brand in India
Mission We will meet the mobile communication needs of our customers Vision ‘To be the most admired brand in India by 2010’ Values We will always put our customers first. We will always trust and respect each other. We will respect our associates as we respect each other. We will work together through a process of continuous improvement.
Product Airtel Pre-paid Airtel Post-paid Blackberry Wireless Handheld Value Added Services (VAS) The different value added services provided by Airtel are- Instant Balance Enquiry 24Hr recharge Facility Caller line identification Call divert, Call wait & Call Hold Multimedia messaging service (MMS) Airtel Live Portal SMS based Information Service
..Contd Hello Tunes & Ring Tones Voice Mail Service Easy Post-paid bill collection Gifting of Ring Tones & Hello Tunes GPRS Business Solutions
Price Customer based pricing strategies. Flexible pricing mechanism Controlled by TRAI.
Place It has wide and extensive presence even in the remotest areas Airtel Customer Care Touch Points Distributors like E.g. Paan shops, grocery stores, chemists, outlet etc.
Promotion• Large scale print and video advertising.• Big celebrities like SRK and Sachin are roped in to endorse the product.• In 2002 Airtel got its Signature tune from A.R. Rehman, this signature tune is perhaps the most downloaded tune in India.• Provides innovations such as Bollywood movie premiers, music services such as ring back tones & many more.
..Contd "Friendz" pre-paid connection for youth," Ladies Special" plan, Seniors plan. Executives corporate plan (First to give prepaid in this category). Special discounts in calling rates & sms services. Providing wallpapers and screensavers on website.
STRENGTHS Bharti Airtel has more than 65 million customers (July 2008). It is the largest cellular provider in India, and also supplies broadband and telephone services - as well as many other telecommunications services to both domestic and corporate customers. Other stakeholders include Sony-Ericsson, Nokia - and Sing Tel, with whom they hold a strategic alliance. This means that the business has access to knowledge and technology from other parts of the telecommunications world. The company has covered the entire Indian nation with its network. This has underpinned its large and rising customer base.
WEAKNESS Price Competition from BSNL and MTNL Losing lead on technical expertise. Until recently Airtel did not own its own towers, which was a particular strength of some of its competitors such as Hutchison Essar. When started initially,the business had little knowledge and experience of how a cellular telephone system actually worked. So the start-up business had to outsource to industry experts in the field. .
OPPORTUNITIES– The fast extending IPLC market.– Latest technology and low-cost advantage.– Growth of mobile phone users.– Untapped Rural Market.– Bharti Airtel is embarking on another joint venture with Vodafone Essar and Idea Cellular to create a new independent tower company called Indus Towers. This new business will control more than 60% of Indias network towers.
THREATS Airtel and Vodafone seem to be having an on/off relationship Bharti Airtel could also be the target for the takeover vision of other global telecommunications players that wish to move into the Indian market.
2) CUSTOMER BARGAINING POWER - HIGH Lack of differentiation among Service Providers Cut throat Competition Low Switching Costs Attractive Schemes for new connection Availability of all operators everywhere Difficulty to differentiate Brand Number Portability will have –Ve Impact Businesses & Consumers
3) THREAT OF SUBSTITUES- HIGH Cellular Services address the communication needs and staying connected. Hence a necessity, but there are substitutes Landline CDMA
4)THREAT OF NEW ENTRANTS – Previously LOW Now HIGH.Previously Low because Huge License Fees to be paid upfront & High gestation period Spectrum Availability & Regulatory Issues Infrastructure Setup Cost - High Rapidly changing technologyNow High because New Entrants are ready to enter with Huge Capital Considering the attractiveness of the market Increase Of FDI to 76% bringing competiton from Foreign players New Entrants from Non telecom companies with the ease of Outsourcing
Future strategies Translate its expertise in Indian markets to other emerging economies. This could call for acquisitions globally. Indian market inspite of being the worlds largest is still not matured. Opportunities abound in the hinterland which must be exploited
Future Strategies to retain its market share New tariff plans. More value added services. Increase in visibility and coverage The AirTel - AirTel advantage New innovative packages More of the e-factor
Technical Front Widening the network coverage area. Increasing quality of service and interconnectivity. Innovative VAS such as e-recharge or recharge using sms. Advanced technology introduction such as M-commerce e.g. m-check, ATM recharge.
Airtel – StrategyMANTRA :Focus on Core Competencies and Outsource the rest!