India Telecom

Mobile war gets jazzier in Garden City

Bangalore Correspondent

The sixth largest cellular market in the country is beeping with excitement. Jazzy, but sometimes aggravating, musical ringtones can be heard loud and clear, signaling the ongoing war of the mobiles.

All four operators are pumping in crores of rupees, including Bharat Sanchar Nigam Ltd (BSNL), to garner a larger pie in this lucrative circle. One can see snapshots of a similar activity, which is currently taking place in the southern region, being repeated in all the other places where a fourth mobile operator player has entered.

Cut back to the month of July: One could just not miss Hutchison-Essar’s brilliant entry into this city. Its new brand, stylistically called “Hutch”, was splashed right across the city on over 100-plus billboards. The message was startling in its simplicity a huge ‘Hi’! On the right side, the close-up of a young girl’s or a guy’s face with braces or the smooth hairless head of a one-year-old. All have been shot in different angles. The word ‘Hutch’ appears right below in much smaller font followed by Hutch’s mobile number way down below. Setting this off in the minimalist advertising trend is the billboard’s stark white background.

The other operators are countering this attack by taking steps of their own. Bharti’s Airtel has its ‘Live every moment’ campaign of cute kids and swinging adults on a spotlessly white backdrop flaunting its early mover advantage. Spice Telecom has brilliant orange billboards spiced with a true Kannada flavor proclaiming ‘Never miss an opportunity’ to encash on the local popular sentiment. BSNL, the latest entrant, will be running full-page advertisements in mainline newspapers, starting August.

City with immense potential

Talking about Bangalore, Rajeev Sawhney, Hutch’s regional CEO, says: “This a future positive city and we believe there is a huge amount of unfulfilled potential here. Bangalore has 1 million landlines as against 2 million in Mumbai, and just 300,000 mobiles as compared to 1.1 million in Mumbai. Our surveys have indicated that with a huge percentage of reasonably well paid, tech-savvy, young working people [in the 20-30 years age bracket], there is a huge potential.”

Though the Indian cellular market has been growing at a whopping 80 per cent, Karnataka’s growth has been much slower at 60 per cent. The fact that there are just around 1 million landline phones in a city of 6.5 million is an attractive proposition in itself. “We believe that this market will increase by leaps and bounds and that is one reason why we have invested about Rs 600 crore in Karnataka,” he adds.

Bharti Mobile and Spice Telecom – both well entrenched in this market with over 2.60 lakh and 1.70 lakh subscribers, respectively in Karnataka – are not taking the Hutch advertisement blitzkrieg lying down. Bharti Mobile has invested over Rs 900 crore and Spice Telecom has invested over Rs 700 crore in Karnataka. Both have slashed tariffs and their advertisement campaigns are on the rise.

Better services vs. lower tariffs

Talking about the churn currently taking place in the market, Jagdish Kini, CEO, south central region, Bharti Mobile comments: “Cutting down tariffs is not the issue right now. It is bound to happen with any late entrant. But at the end, it’s the service that counts. You will not be happy paying a lower rental if the service is poor. It has taken us Rs 900 crore and 18 months to set up 246 sites, and no one can match the quality of our service.”

Hutch’s Sawhney points out that the market’s underperformance is due to lack of simplicity in the tariff structure. He says: “We had done a survey and found that people are wary when schemes and plans are so complicated. One unique feature is the fact that if there were a simple tariff structure with a lower rental, the subscriber base would increase. The user pays depending on the amount of airtime he uses, and we make it simpler for the user to decide on the operator and understand the bills.”

Pitching in with an impeccable logic, Sean Dexter, the Briton who heads Spice Telecom’s operations adds: “Everyone is looking at expanding the market – and all are looking at new customers. Ours is a smaller operation. We focus on the local market, are not tied down by any national brand, and realize that all customers are not alike. That is one reason why we have a ‘flexi’ plan to suit different needs. Moreover, striking a balance between the urban and the rural market is also crucial for us.”

BSNL, a late entrant, but an old hand when it comes to market reach, has promised to launch mobile telephony services by the middle of August. Base stations are being set up at a frenetic pace in the metro and in other cities. B.R. Baliga, principal general manager, Bangalore Telecom says: “We have invested Rs 120 crore in the first phase and Rs 30 crore in the second phase, and are setting up 61 sites in the city and 286 sites in the entire state.”

But the tariff structure currently lies under tight wraps. Baliga adds: “Until the New Delhi headquarter announces the rates, we cannot reveal them. But they will be very competitive.” Will BSNL offer free mobile phones to attract new subscribers? He clarifies: “No, we will not do that. But we will encash on our reach and build up a substantial customer base – at least 30,000 to 40, 000 in the first year.”

The entire game really revolves round the services offered by all the operators. Hutch’s Swahney notes: “A good quality network is a must. And service is not just about relying on one factor. It is all about simplicity of tariff, communication, brand, and of course, customer care. At the end, it is all about generating the proper revenue through substantial customer base versus the cost you incur.”

Every player feels that value-added services would give an edge. But according to industry watchers almost all players are going to offer similar value adds like ticket reservations, horoscope, daily weather, etc., and each player is planning on offering a larger bouquet of roaming services as well.

But what would the other incentives be, considering that a big bite has already been taken by the early birds – Airtel and Spice? Swahney says: “We are not looking at taking over the other player’s subscribers – we are into expanding the market. We have a Hutch Online service, which is available to every subscriber wherever he might roam.” Hopefully, customers can have more fun with service plans crashing down and wider options in the marketplace.