A Project on Comparison between two Brands

Airtel Vs Hutch

Telecom Industry in India: The telecom services industry is currently in a high-growth phase. From 4.3 per cent at the end of March 2002, India's teledensity has trippled to 14% per cent by May 2006, driven largely by the stupendous growth in the mobile services space. The mobile subscriber base increased seven-fold from 6.5 million at the end of 2001-02 to 101.17 million by the end of May 2006, buoyed by a sharp decline in tariffs, intense competition among service providers, lower handset prices, lowering of entry barriers, and the implementation of the calling party pays and the unified access service license regime. The mobile subscriber base is expected to grow at a healthy pace over the medium-term. Growth will be driven by the increasing affordability of mobile services (due to rising income levels and falling tariffs) and by supply-side factors such as an increase in coverage by operators in semiurban and rural areas and the strengthening of marketing and distribution networks. National and international long distance call volumes are expected to increase in line with the growth in the telecom subscriber base. The demand for international bandwidth is also expected to increase substantially, driven by higher demand from the information technology services and ITenabled services sectors, higher usage of Internet services and the growing connectivity needs of Indian corporates. Telecom tariffs have fallen quite sharply over the last few years, due to increased competition and the falling cost of service. Further tariff declines are expected over the medium-term. Mobile tariffs are expected to fall by 15-20 per cent annually over the next 2 years, driven by a decline in regulatory costs, greater economies of scale as a result of a further increase in the subscriber base, and keen competition among operators to garner a larger share of a growing market. In the longdistance segment, decreasing access deficit charges, competition and technological advancements will lower tariffs. Mobile market has been segmented in two category of service, one is GSM and the other one is CDMA. For the purposes of this Project I am constraining myself to only GSM Mobile market. GSM Mobile Segment: GSM was the first mobile technology to enter in India and since then it has got a very strong foothold in India. It is present in 70 circles nation wide and there are about nine big players in the market. The biggest player is Bharti Airtel followed by BSNL and Hutch.

Airtel Established in 1985, Bharti (Airtel) has been a pioneering force in the Telecom Sector. Bharti gave Delhi its first Mobile Services - Airtel. Today, Airtels mobile footprint extends across the country in 23 telecom circles. Its service standards compare with the very best in the world. In fact, thats how Bharti has managed to win the trust of millions of customers and makes it one of the top 5 operators in the world, in terms of service and subscriber base. Bharti Airtel Limited, a part of Bharti Enterprises, is India's leading provider of telecommunications services. The businesses at Bharti Airtel Limited have been structured into two main strategic business groups - the Mobility Leaders business group and the Infotel Leaders business group. The

Mobility business group provides GSM mobile services across India in twenty three telecom circles, while the Infotel business group provides broadband & telephone services, long distance services and enterprise services. All these services are provided under the Airtel brand. The company has several Firsts to its credit: The First to launch full roaming service on pre-paid in the country. The First to launch 32K SIM cards. The First in Asia to deploy the multi band feature in a wireless network for efficient usage of spectrum. The First to deploy Voice Quality Enhancers to improve voice quality and acoustics. The First telecom company in the world to receive the ISO 9001:2000 certification from British Standards Institute. For a brand to be successful, it must build enduring relationships with its different audiences. Integral to this relationship is the visual image of the brand the consumer carries in his/her mind. The Airtel brand image is created through the consistent application of a carefully developed visual identity, which helps Airtel distinguish itself in a cluttered market. Airtel's visual identity helps create instant brand recall and strengthens the relationships that its audiences have with it. Hutch Hutch is the brand name of Hutchison Essar. It established its presence in India in 1994 and was one of the first cellular providers in the city of Mumbai. Over time it has expanded operations across the country and is one of the most respected cellular service providers known for providing world class and innovative services. Hutch established its presence in India in 1994 by acquiring the cellular license for Mumbai. It now has operations in 16 circles accounting for 70% of India's mobile subscriber base. Hutchison Essar Limited, with about 18.4 million* subscribers, is one of the most reputed telecom companies in India. Over the years, it has been named the 'Most Respected Telecom Company', the 'Best Mobile Service in the country', and the 'Most Creative and Most Effective Advertiser of theYear'. Hutchison Telecom is a part of the multinational conglomerate - Hutchison Whampoa which has its origins dating back to 1828 in Hong Kong. The Group operates five core businesses in 42 countries across the world, of which, Hutchison Telecom has been one of the pioneers in mobile multimedia communication and spans five continents. The Essar Group is one of India's largest corporate houses with interests spanning the manufacturing and service sectors like Steel, Oil & Gas, Power, Telecom & BPO, Shipping & Logistics and Engineering & Constructions. The Group has an asset base of over Rs 20 billion (US$ 4.4 billion) and employs over 4000 people. AIRTEL PRODUCT RANGE Airtel Pre-paid: Airtel prepaid, the ready cellular card from Airtel, includes everthing that customer dreamt and believed,possible.Its simple to use and comes with a host of great features like total cost control , instant balance enquiry, easy recharge . Airtel Post-paid: Airtel post-paid gives subscribers unlimited freedom to reach out to their special ones, in their special way. It offers services like National & International Roaming, easy billing. Blackberry Wireless Handheld: Airtel Enterprise Services offer the most secure and technologically advanced wireless data experience for people on the move, who are in constant need of staying intouch with emails and other office applications. 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) Hello Tunes & Ring Tones Airtel Live Portal SMS based Information Service Voice Mail Service Easy Post-paid bill collection Gifting of Ring Tones & Hello Tunes GPRS

Hutch Product Range Hutch prepaid: Its the the ready cellular card from Hutch. Prepaid is easy. And rewarding, with maximum talktime and exciting offers. Not to mention a host of value added services, two-way national roaming and much more. Hutch Postpaid: It is the Postpaid service from Hutch. It gives the customer a choice to choose from a variety of affordable and attractive talk plans, and many convenient payment options for your monthly bill. Value added services: The different value added services provided by Hutch are Instant Balance Enquiry News & Updates Astrology Entertainment Sports Finance Travel Tunes& Downloads Mail, Messaging Call management Services Dial in Services Hutch4help Planet Hutch Customer Perception of Airtel and Hutch: The quality of service provided by cellular mobile players is monitored by Trai through performance monitoring reports of cellular mobile service on a quarterly basis. The parameters taken into account are the network performance, customer help lines, billing complaints and customer perception of service. In order to protect the interests of consumers, Trai has set benchmarks on each of the sub-categories of the parameters that are to be met by service providers. An analysis of the quality of service provided by the major cellular operators Airtel, Hutch across the four metros on the basis of network performance and billing complaints shows that though both of them met the benchmark of good voice quality connection. Hutchison Essar has the best voice quality followed by Bharti in Delhi. Hutch received least number of complaints in Delhi and Mumbai and had less billing complaints in Chennai and Kolkata. Airtel received moderate number of complaints and received the least number of complaints among all operators in Mumbai. The overall analysis suggests that both Airtel and Hutch have been able to meet customer and Trai expectations, but leaving scope for improvement. In a Customer and Peer preference survey done for all the telecom operators in India by Business World , Bharti was rated as no.1 by both customers and peers whereas Hutch was rated no.3 after

Bharti and BSNL in Customer preference whereas in Peer Preference Hutch was rated at No.4 after Bharti, Tata Teleservices, and Reliance Infocom. Brand Equity Building: Airtel "In a service industry like telecom, people live a brand 24X7. It's all about experience; and for Airtel 'brand=customer experience," says Rajan Mittal, joint managing director, Bharti Tele-Ventures Ltd. When Airtel started in India the brand was all about aspiration. handset cost about Rs 45,000, the price of a second-hand Fiat and call charges hovered around Rs 16 a minute. The target customer then was elite, upmarket professionals and entrepreneurs and Airtel was positioned as an aspirational and lifestyle brand, in a way that trivialized the price in the mind of the consumer. It was pitched not merely as a mobile service, but as something that gave him a badge value. Airtel was on a power trip: the logo was black, uppercase bold lettering; and the baseline was "the power to keep in touch". The Brand was developed to connote leadership in network, innovations, offerings and services. . The taglines like "Airtel celebrates the spirit of leadership" and "The first choice of the corporate leaders" emphasized that stance. At this time Airtel Paid attention on Customer Education through full and half-page ads in newspapers, answering queries like "what is roaming?", "what is coverage area?" and "how to make international calls". In 1999, when the New Telecom Policy came into effect SEC B became part of the catchment area, now Airtel's communication changed from "power" to "touch tomorrow". The focus now was on the endless possibilities of technology to make life good and advertising became two-pronged: a product-driven communication that showcased new offerings like the Magic prepaid card, and an emotional communication that showed younger people. In 2002 Airtel got its Signature tune from A.R. Rehman, this signature tune is perhaps the most downloaded tune in India In 2003 Airtel adopted the "Express yourself" positioning, which is also its current tagline. Now, the emotional angle was predominant - and stark, black and white imagery to stand out in what was becoming a highly commoditized, crowded market. The latest campaign continues that thought. Only, mobile telephony is now extending to even lowincome mass categories. So the TVCs in Hindi and regional languages are now on air, as are lowpriced products, like the Rs 200 recharge coupon. Airtel is transforming itself fully into a Service Led Brand. Accordingly, Airtel was the first cellular service provider to start customer centres (called Airtel connects), where customers could pay their bills, apply for new connections and touch and feel new handset models. Airtel perceives its future in product innovations such as easy charge (recharging prepaid connection through SMS), hello tunes, the Blackberry option, stock tickers and M-cheques (mobile credit cards).The customer care centres, too, are metamorphosing into "relationship centres", onestop shops where subscribers can not only pay their bills and have their queries answered, they can shop for new phones, surf the net and enjoy a cup of coffee. According to Airtel "What matters is what the customers want,"

Hutch: Colour coded Back in 1995 Hutch entered Mumbai with the tagline Hello Bombay and was pitted against consumer electronic giant BPL. The decision was to cultivate the Brand personality as Foreign. Consequently the campaign was designed as world in your pocket to express the foreign pedigree and was built by using Indian celebrities. Hutch, too, needed to educate consumers about cellular telephony. So, it also had ads like "Can I call STD?", "Can I use my phone in a lift?" "What is airtime?"

International was believed to be synonymous with sophisticated, and the customer service reflected that. Max Touch introduced Integrated Voice Response systems, and for face-to-face interactions, it had swanky customer spaces with smartly dressed executives who had been trained in customer relationships. Even as Hutch's communication appealed to the upper class, it was working on innovative product offerings: in 1996, it was the first cellular company to establish national roaming; later that year, it introduced over-the-counter prepaid cards. Orange Worked wonders for Hutch. The almost accidental use of the colour in an ad campaign changed at the last minute from green - was fortuitous. In February 2001, Max Touch became Orange and the account shifted from Mudra to Ogilvy. By replacing a highly recognised brand with a virtual unknown in just two weeks, the new Ogilvy campaign redefined conventional communication strategies. For example, in Mumbai, ads compared the cost of a mobile phone call to an inexpensive cutting chai.The colour orange was a seminal attribute; the brand's slogan was 'The future's bright, the future's orange'. In 2002 an Umbrella Brand known as Hutch was created but Mumbai retained the Orange brand. The separate identities of the two brands were duly emphasised, although strategic sponsorships of theatre, music and art events overlapped - as did the use of orange colour. The new brandname also heralded the arrival of a new mascot, the "Hutch" pug. When Hutch launched the Abby-winning "Wherever you go our network will follow'" ad, viewers believed that was Hutch's new slogan, but it was just one brand attribute. Twelve other campaigns followed; each one with a single communication of a value-add, all stylised to be uniquely Hutch. Hutch believed in Effective branding built on a bedrock of fundamentals of service - great network, customer service and great billing systems. Value-added services - such as "Privileges" (discount coupon booklets), cricket scores and stock market information formed a critical part of Hutch's marketing efforts as its advertising. Other services like Hutch World (GPRS service), Hutch Alive (non-stop, streaming action) and Hutch4Help, a unique dial-in 'convenience' service, all emphasised the premium attributes of the service. But now there's Chhota Recharge, small value recharge cards (starting at Rs 10), which will also help mobilize small spenders. And now there's pink. In Dec 2005, Mumbai was overrun with billboards that simply said "Bye". A week later, the same billboards, along with the rest of the country, sported the Hutch tristar in a new, vivid pink. The reason given for this was that it was just to refresh the brand, and inculcate a new 'Hutch spirit'." But the brand makeover had less to do with creating excitement and more with renouncing the Orange brand to Orange Telecom and creating the new pan-Indian Hutch brand. The all India GSM subscriber base grew by 4.23% to 75.3% for the month of May 2006. May saw net addition of 3.2 mn subscriber as compared to 2.93 mn in the month of April 2006. Bharti Airtel witnessed the highest growth of 5.7% taking its total subscriber base past the 21mn mark. Bharti also improved its market leadership with 29% market share. Sales as per May 2006

GSM MARKET SEGMENT

GSM SHARE OF NET ADDITION

Among all the circles, category C circle continued to witness the highest growth rate at 7.0% followed by category A circles at 4.7% and category B circles at 4.4%. Category A: Andhra Pradesh,Gujrat,Karnataka,Maharastra, TamilNadu. Category B: Haryana,Kerela,M Madhya Pradesh,Punjab,Rajasthan,Uttar Pradesh,West Bengal. Category C: Himachal Pradesh,Bihar,Orissa,Assam,North East,Jammu & Kashmir. Category M: Delhi,Mumbai,Chennai,Kolkata. So we can see that Airtel was the market leader with the highest growth rate of 5.69% followed by Hutch with 4.39% growth in customer base. But in the total share of net additions both Airtel and Hutch grabs the same 22.28% . Policy Decisions: Both Telecom majors are well seasoned players. Airtel is a local major whereas Hutch is a foreign company with good telecom experience. Both experienced various turmoils in the volatile Indian Telecom Market and after stabilization emerged out as winners. The growth for both of them was through a combination of both Organic and inorganic expansions. Recently the major policy decisions for them were to develop Mobiles as not only a means of connectivity but as a complete bundle of Communication, entertainment as well as information and other services and this decision has paid them well.

Now Airtel has achived presence and superiority in all the telecom circles in India and with the help of its global partners is lookin at opportunities globally as well as diversifying into various other businesses like Retail and Insurance whereas Hutch is still in expansion mode and trying to consolidate its customer bas by means of acquiring existing networks like BPL telecom and developing its own network. Major Problems: The major problem in front of both of these Telecom companies are not those of how to acquire customers but to retain them as loyal and satisfied customers. And for that they have to think and introduce various additional services as basic services are provided by all the operators. So right now their biggest problem is Attrition of customers and to prevent that they need Differentiation.