Airtel – A Case Study

Presented by G2:7

Abhishek Kekre
Bharath Kumar
Gulab Nebhani
Lalima Dutta Choudhury
Tanya Dutta
Introduction
 Telecom giant Bharti Airtel is the flagship company of Bharti
Enterprises.
 Airtel comes to you from Bharti Airtel Limited, India’s largest
integrated and the first private telecom services provider with
a footprint in all the 23 telecom circles.
 Bharti Airtel is structured into three strategic business units -
Mobile services, Telemedia services and Enterprise services.
 The mobile business provides mobile & fixed wireless services
using GSM technology.
 Airtel was voted as the ‘Best Cellular Service’ in the country for
four consecutive years.
Cellular Market Analysis
Early 2000
 International Telecom Union (ITU), EMC – Cellular mobile
telephony tariffs in India lowest in the world in 2002.
300-minute basket for cellular service rates -
 India - USD 16/month
 China - USD 21/month
 Thailand - USD 29/month
 Malaysia - USD 40/month
 Indonesia - USD 42/month
 Average monthly rental and airtime for cellular services: Rs.
202 and Rs. 1.99 per minute respectively.
 Prepaid services introduced by all operators at an extremely
affordable tariff of Rs. 300 per month.
Cellular Market Analysis
Early 2000
 Indian cellular sector Compound Annual Growth Rate (CAGR)
of 109% in cellular subscribers from 1995-2001.

 Explosive growth driven by the low tariffs, rapid expansion of

infrastructure and robust competition.

 Heavy customer base in rural India.

 In 2002, 51 cellular mobile networks or air serving 80 lakh

consumers in almost 1500 cities and towns, covering 60,000+
villages.
Magic launch-2002
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Prepaid Cellular Competition C T
Analysis
51 Cellular networks in 2002
Major Competitors in 2002 –
Hutchinson
BATATA-BPL
Aircel
Koshika
Spice Communication
Reliance Telecomm
BSNL
MTNL
Entry Reasons for Success
Easy Usage

Easy to acquire connection

Pre-activated SIM
Instant connectivity
No rental hassles
No security deposits

Easy Recharge

International ‘scratch system’ for Magic Cards

Effective Distribution
Reasons for Success
Easily available in departmental stores, gift shops,
‘kirana’ shops, retail outlets, telephone booths etc
Doorstep delivery in 2002

Customer Satisfaction

Affordable
Easily accessible
Strong customer relationship

Features

STD/ISD Facility
Voice Mail
Short Message Services
Free CLIP
Balance Enquiry
CRM at Airtel

Vision
To provide AirTel services anywhere and at any time. A customer
should get the same quality of service no matter which of call centre he
contacts.
The implementation of CRM also helped Bharti in having a unified
workflow and unified processes across the country.
Benefits
 Understand and segregate customer needs - With the help of
CRM, they are able to provide customers different schemes and
services depending on airtime usage.
 The CRM strategy at Airtel revolves around two aspects:
 Operational CRM - Helping call centres with workflow and day-to-
day activities.
 Analytical CRM - Provides staff with the required information on
customers; this is used for business development activities.
Bharti Magic – 3 Cs
Top moves to target customers
•‘Airtel Connect’ showrooms
•Home Delivery
•First player to launch roaming cellular
•Leading Competitors – Hutchinson and
services and Smart Mail, Web Message, Call
BATATA-BPL hold etc
•Competitive price, distribution and •Attractive pricing strategies
customer satisfaction strategies •Focus on Youth

Bharti Airtel, is Asia’s leading integrated telecom

services provider with operations in India and Sri
Lanka.

Services are offered under the brand name Airtel:

•Broadband & Telephone Services
•Long Distance Services
•Enterprise Services
•Mobile Services using GSM
Attributes
 Maximizing Customers’ product and service experiences.
 In touch with current market trends.
 Cost optimization.
 Understanding of customers’ likes and dislikes.
 Proper positioning of brand in the market.
 Brand Consistency.
 Value Addition to products and services.
 Targeting the infrequent users.
 Differentiating itself from other players.
 Promotional offers.
Brand Resonance
Pyramid
Brand Magic
 New Celebrity endorsers (Sachin Tendulkar & SRK) who
projected a fresh and youthful image were chosen to reflect
Magic’s brand values of energy, hope, optimism and
achievement.
 Special features for Magic Subscribers like free caller line
identification, and innovative services like balance on screen.
 Bharti came up with many ad specific taglines like: ‘Kabhi bhi,
Kahin bhi’, ‘Jahan Chaho, Airtel Magic Pao’
 Conducting contests for its’ subscribers through SMS. For
Instance the ‘Khulja Sim Sim’ contest launched in April 2002.
 Bharti Airtel, Asia’s leading integrated telecom service
provider, announced the launch of the “Magic Dekho, Talktime
Pao” offer on its DTH service – digital TV last month. This is an
exclusive offer for Airtel Prepaid Mobile customers across the
country where on buying a digital TV connection at Rs. 2000
with 3 months of Super Value Pack, the Airtel Prepaid Mobile
customer receives 1000 minutes of local Airtel to Airtel
talktime.
Marketing Revamp Need
2002
Sources of new product development -

 Radical transformation in cellular industry

 Intensifying competition in light of immense market potential
 To retain its position as market leader
 Forecast of higher market growth
 Estimated number of subscribers to reach over 25 million by
the year 2004
 Customers exposure to media, raised expectations
Target Customer
 Magic was positioned as friendly, mass-market brand
 Targeted the youth, stood for simplicity and attitude –
‘anything is possible’
 Aimed at attracting infrequent and non-interested users of the
mobile phones
 Cellular services dropped in prices and target new customer
segments
 As the category developed with prices going down sharply,
Airtel began talking to a wider spectrum of potential users

“The aim is to be relevant to the masses and make all their

dreams, hopes and desires come true at Rs 300 per month” -
Hemant Sachdev, Director, Marketing
Identifying the success
factor
Concept development
 The idea demanded a high brand image.
 Magic was brought under the umbrella brand Airtel,
renamed as Magic Airtel.
 The name Airtel brought positive associations to the mind of
the customer.
 Bharti changed the logo, the new logo reflected the new
brand values of energy, hope, optimism, achievement and
friendliness.
 Old logo New logo

 New celebrity endorsers (Shahrukh Khan and Kareena

Kapoor) projected a fresh and youthful image
Identifying success
factor
 Rediffussion DY&R, which is the ad agency that took charge of
revamping Airtel’s brand image by giving a better tagline
which caught some emotional appeal.

SIGNIFICANCE—
 -- This was the first time A R Rehman had agreed to work
for any brand, anywhere in the world. The music from the
commercial became the most downloaded ring tone in the
history of telecommunications.

 -- Tagline denotes that each and every person in India live

every moment (emotions, feelings etc.) of the life with
Airtel.

 Magic was successfully relaunched taking the ownership of

the entire space of communication and strengthening the
emotional bond Airtel enjoys with its customers
The differentiation factor
 Offered many special features for subscribers

 Free caller identification, services like balance on screen and

balance on demand

 Doorstep delivery of Magic cards

 Regional roaming network launched in Asia for the subscribers,

regional roaming facility offered to customers within the
country as well

 Waiver of airtime charges on incoming calls between Airtel

cellular customers

 Ease of operation, affordability and ready availability

Commercialization – the
strategy
 Aimed at the non-interested customers, perceiving
unanticipated needs

 Entered into strategic tie-up with ICICI Bank to offer recharge

facility for Magic users at the ATMs

 Established easy accessibility and availability by providing

recharge cards at departmental stores, gift shops, retail
outlets, telephone booths and also ‘kirana’ stores

 Airtel started talking to new segments by positively positioning

and establishing itself as a brand that improved the quality of
life
Positioning – “the battle
for the customers’ mind”
 Focus on distribution base in all circles

 Availability of Magic cards in the remotest parts of operating

circles

 Positioned the brand against competing ones on several value

added service features

 Emphasized on one-on-one relationship with the customers

 Communicated with vibrant colors, local language and

simplicity that captured customers minds
Pricing Strategy
 Revamped pricing strategy
 Varied call charges based on the time when the call was made
 E.g. – Delhi users were charged Rs. 1.35(per 30 secs) and Rs
0.99 (per 30 secs) for incoming calls in the time slot of 8.00
A.M – 10.00 P.M. The rates were lowered at nights to Rs. 0.67
and Rs. 0.49 respectively
 Magic was also made available in Rs 290 as against Rs 300
previously
 Launched special offers – free talk time worth Rs 290 to new
subscribers,
 Free voice mail service for a period of three months also
offered
Competitors strike back
Competitors adopted following techniques:

• Price reductions
• New service additions
• Value additions
• Focussed advertising and promotional campaigns
Competitors strike back
To counter Bharati’s waiver on airtime charges for incoming
calls and 32K SIM cards in Mumbai, BPL Mobile and
Hutchison.
• Made incoming calls free in Mumbai
• Launched 32K SIM cards
• Cut call charges by 50% from Rs 3 to Rs 1.49 (60
seconds)

MTNL slashed tariff rates of its Dolphin cellular service in

Mumbai and Delhi

Escotel, leading service provider in UP (West), launched

roaming services for its prepaid customers
Competitors strike back
Spice

• Allowed national roaming named Spice Quickly on its prepaid

card
• Awarded free talk time to winners of a Soccer World Cup
related promotional event
• Reduced tariff rates on its prepaid cellular cards in Karnataka
• Offered useful information such as train timings, astrology,
news, movie tickets, cricket updates, and stock market news
through its band Genie
Competitors strike back
Idea cellular

• Invested 7% of its net revenue to focus on creating brand

awareness and launched an aggressive advertising
campaign
• Announced to offer value added services such as games on
mobiles, SMS in 9 languages and prepaid roaming facility

Idea ChitChat in Andhra Pradesh offered to win gold coins,

watches and talk-time under a special scheme
Competitors strike back

Hutch

• With aggressive marketing and promotional campaigns was

becoming a formidable competitor to Bharati in many
circles.
• Through its advanced 16K SIM it offered many value added
services.
• Announced a new scheme ‘Go Hutch for Rs. 74’ in Andhra
Pradesh and offered Rs 175 of talk-time for a prepaid card
of Rs 249.
Competitors strike back

Between January and August 2002 competitors recorded

substantial growth in Kolkata:

• Hutchison’s Command: 55.03%

• Orange: 46%
• Essar: 36.67%
• Fascel: 46.29%
Airtel- Future prospects:
 According to market researches, after China, India would be
the fastest growing mobile telephony market in Asia Pacific
with revenues slated to increase at a CAGR of 18.4% to reach
$25 billion in 2011 from current $9 billion.
 Cellular penetration would increase to 38.6% in 2011 with
58% of rural families and 95% of urban families possessing
mobile phone. The market will be driven by prepaid
connections, which will account for more than 93%
connections.
 It is expected that the penetration will be driven by an
increased focus on rural market, cheap handsets, aggressive
promotions and handset bundle offers. The low rural mobile
penetration of 2% represents an immense opportunity for
cellular players. Large players will have an advantage as they
expand their presence and take advantage of economies of
scale. But they will face tremendous challenges owing to
intensifying competition. With the entry of BSNL/Vodafone, the
market will become more dynamic.
Airtel- Future prospects:
 In the current scenario, as the Indian telecom market attracts
huge funds of several global telecom giants, Bharti’s higher
profitability and strong liquidity position serves as a twin-
edged weapon to expand the market & combat the growing
competition.
 In the wireless segment, a further gain in market share
appears well within Bharti’s scope, given its aggressive pace of
net adds, till the time Idea and RCOM go full throttle on their
pan-India GSM roll-outs.
 In the non-wireless segment, the Company is looking for new
growth opportunities—its entry in the media space by
launching the DTH service is one such example.
 In the long distance business, the Company’s network quality
and captive in-house volume gives it a significant competitive
advantage over other carriers.
Airtel- Issues to work
on:
 Due to lack of visibility, one cannot factor the upsides from the
Sri Lanka rollout ,rural markets, the DTH business, and the 3G
services. An increase in network costs (due to rural
penetration) and additional advertising spends (to combat
increasing competition) seem inevitable. Airtel must work on
handling these properly.
 Though initially airtel had the upper hand in advertising, now
Vodafone has gathered advantage by using the creative and
innovative ‘ZooZoo’ advertisement. Airtel’s ringtone with
endorsement from AR Rahman was a sensational hit and Airtel
needs to come up with a similar advertisement now to win the
lost battle.
Airtel- Issues to work
on:
 Type www.airtel.com in your browser and you will be directed
to guess what?

Vodafone Spain!

 www.airtel.com was owned by Airtel Spain. Later Airtel spain

was acquired by Vodafone. It was in the year 2000 when
Vodafone completed the acquisition. But what about lazy
branding of airtel? Despite knowing millions of people will
actually come and visit and inquire about their company in
that domain (airtel.com) directly, Airtel never ever asked
Vodafone to sell it to them. In this hugely growing internet
world, how can you be so relaxed after seeing that the most
important domain name of your company redirects you to
the rival's site!
Airtel- Issues to work
on:
 According to TRAI, Airtel is the most congested telecom
network. As per the analysis by the Telecom Regulatory
Authority of India (TRAI), Airtel had 14 congested (POI) - the
geographical location where two networks inter connect and
exchange traffic. Against this, Vodafone had 12 POIs, followed
by Reliance Communications and Idea with 11 each, and
Dishnet Wireless with eight. Trai confirms that Airtel also tops
the list of call drop as well. This is something airtel has to look
into.
 The company in the future plans to expand its network in
order to establish its presence in more than 500,000 villages
all across the country by 2010. Along with this the company
must improve existing regions also.