AIRTEL MAGIC – SELLING A PRE-PAID CELLPHONE SERVICE

THE INDUSTRY STRIKES BACK Contd..

Value added services offered by Hutch (through its advanced 16K SIM) included regional roaming, dial-in service, voice messaging (in India and even to US or Canada), voice mail, voice response service, unified messaging service and other online menu services (such as SMS, railway information, train timings, movie tickets, stock market news, TV schedules). In Kolkata, Hutchison's Command recorded over 55.03% growth between January and August 2002, while Orange, Essar and Fascel reported growth rates of 46%, 36.67% and 46.29% respectively for the same period.

Bharti decided to design different marketing strategies for different circles depending on the strategies, employed by the competitors. While the company was focusing on its pricing strategies, its competitors in various sectors were concentrated on new service offerings and value additions (For instance, in the Chennai circle, the cellular war between RPG Group, Bharti and Hutch was more value and service driven). Since price reduction moves were almost immediately matched by the players, companies had begun focussing on developing value-added offerings and schemes to expand their market and gain customer loyalty. Analysts remarked that the players were coming up with new schemes or value-additions almost every week to get the better of their competitors.

Some such schemes launched in mid 2002 included Tamil SMS and Audiotimes (a service which enabled subscribers to send song clippings to other cell phone users) by RPG. Bharti shot back with an offer wherein new Magic subscribers were given an audiocassette containing popular Tamil movie songs. Various value-added services were also offered in late 2002 in Chennai such as Panchangam (SMS-based), which informed customers about good (and bad) timings during the day. Bharti also tied up with a leading Internet portal, indiatimes.com to offer news headlines and stock market news through SMS.

By constantly keeping itself abreast with the moves of its competitors and launching various proactive/reactive schemes, Bharti was able to retain its leadership position. Despite continual attacks from Hutch, RPG, Spice, Idea Cellular and BPL, Bharti's cellular services received good high response in all circles during 2002. It was reported that in Mumbai, 60-75% of customers seeking Airtel services were BPL Mobile and Hutch subscribers. In fact, it was becoming difficult for the company to activate cellular connections in Mumbai swiftly on account of the high rush – in some cases, it took almost three days to activate a connection.

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