Airtel Magic - Selling a Pre-paid Cellphone Service

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Themes: Marketing Mix
Period : 2002
Organization : Bharti Cellular Limited, Spice Telecom
Pub Date : 2003
Countries : Switzerland
Industry : Cellular

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Case Code : MKTG040
Case Length : 12 Pages
Price: Rs. 300;

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Commenting on this, Pawan Kapur, Chief Executive, Bharti Mobile (Andhra Pradesh) said, "It is another innovative combination of customer benefit and technological advancement." Bharti also focused on revamping of its pricing strategies from time to time (at regular intervals) in order to stay ahead of competition. The company charged different rates for incoming and outgoing calls depending on the time when the call was made.

For instance, customers in Delhi were charged Rs 1.35 (per 30 seconds) and Rs 0.99 (per 30 seconds) for incoming calls in the time slot of 8.00 am and 10.00 p.m. However, these rates were much lower at night (outgoing calls cost only Rs 0.67 for 30 seconds, while incoming calls cost Rs 0.49). In order to increase its penetration in the market, Magic also came up with many special offers during mid and late 2002.

In mid 2002, Magic was made available at only Rs 290 (as against Rs 300 previously), which included Rs 90 worth free talk time valid for 7 days (as against Rs 50 previously). One of its special launch offers included providing free talk time worth Rs 290 to new subscribers (Rs 145 worth talk time free at the end of the third month and the balance Rs 145 worth, at the end of sixth month from the date of making the first call from magic card).

Free voice mail service was also offered to new subscribers for a period of three months. As a part of its efforts to expand its reach, Bharti offered and introduced many special features for Magic subscribers.

These included free caller line identification, and innovative services like balance on screen (balance amount displayed at the end of each call) and balance on demand (balance amount derived by pressing specific numbers on the phone without making or receiving a call). Bharti also introduced doorstep delivery of Magic cards in mid-2002.

Although the service was initially available only in Delhi and Gurgaon (for a recharge value of Rs 500 and above), there were plans to extend it to other circles as well. In mid 2002, Bharti launched its regional roaming⁶ network in Asia for Magic subscribers. Under this offer, subscribers were able to utilize roaming services in over 66 countries across the world, underlying Europe, Australia, the Asia-Pacific region, the Middle East and the US.

This service was offered free of charge for calls placed through any Airtel network in India. Regional roaming facility was offered to customers within the country as well in mid 2002. Apart from this, the company also waived airtime charges on incoming calls between Airtel cellular customers (intra-operator calls) in some parts of the country. New celebrity endorsers who projected a fresh and youthful image were chosen.

The idea was to reflect Magic's brand values of energy, hope, optimism and achievement. Explaining the rationale behind focus on celebrity endorsements, P H Rao, MD, Bharti Mobinet Ltd., said, "Magic is a youth brand, and all these celebrities depict exuberance and confidence to succeed, which are in synergy with the core values of the product." These campaigns were extensively covered by both the print and television media.

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6] Roaming facility denotes a cellular phone's ability to receive and make calls outside the customer's home calling area (service area).