Telecommunications Sector in India

1. The Indian Telecom Sector: Industry Overview

a) b) c) Background Growth Competition

2.

Brand Aircel in the telecommunication market

a) b) c) Background at time of launch Brand positioning Communication to date

Indian Telecom Industry Facts

Indian Telecom Growth

Indian telecom has emerged as one of the greatest economic success stories, registering a consistent overall growth rate of more than 35% over the past decade in terms of subscribers. The wireless subscriber base in India grew from FY00 through FY10 at a compound annual growth rate (CAGR) of 77.5% to reach 584.3 million in FY10

GSM subscribers constitute about 84.1% of the total wireless subscriber base. Over an extended period, the gap between GSM and CDMA has widened as the GSM subscriber base has grown more rapidly.

The intense competition

Market Shares as of 2010

Source: TRAI

Aircel in the Indian Telecom Industry

1. 2. 3. 4. The pre-launch context for brand Aircel Building the Brand Essence and Positioning Aircels Communication Journey so far The way forward

The Pre-Launch Context

The emerging mobile market

In 2008, India replaced the US as the 2nd largest wireless market after China. Subscriber growth rates were at an all time high averaging at about 82%.

The mobile played different roles in a diverse country like ours

Mobile for livelihood

Technology the critical change agent that was fuelling small town metamorphosis from resigned to fate to a more proactive optimism

Mobile as a multifunctional tool

Technology is an enabler of self expression in an urban world where one plays multiple roles

Aircel at this time

Aircel was a regional player In leading circles:
o It was considered the boy next door o Surya as brand ambassador In the North East o It had very strong retail presence

In other circles, the brands imagery was diffused

Overall the brand positioning was unclear.

The Context during the time of Launch

1
From 8 to 15 players Coming Soon
CDMA

GSM

Number Portability Coming soon

92% media spend growth

07-08 06-07 1220 cr

The largest across consumer categories

637 cr

Acquisition driven ARPUs through regular VAS

In sum,
Starting Point: Aircel 1.0 Challenge 2.0

Regional Brand

Differentiate in a cluttered market

Regional existence No pan india popularity

To arrive at a compelling consumer insight to address in our brand positioning, we tried to get a better understanding of what our ideal consumers were looking for

Never satisfied with what they have

Consumer Insight must address this need for MORE

Always looking for MORE!

Therefore, the hook to get at Aircels brand essence

People want MORE from everything they do or everything they buy. They are never satisfied. How can they do more?

Making dead time come alive

Killing Time

Filling Time
Creating time which you never knew existed

By using their time better!

Its all about making the most of your time.

The Aircel Brand Idea

Functionally Emotionally Brand Idea Enables my phone to be Multipurpose and multifunctional device So much MORE

World of Possibilities

So much I can do with my mobile

So much time to create

So much I can do with my life

Aircel launched with a vision to be a lifestyle company of the 21st Century

Brand Essence Using Dentsus HoneyComb Model

Introducing Dentsu Proprietary HoneyCombTM Model

Innovation enabling multifunctionality for all

SYMBOL

BASE OF AUTHORITY

CORE VALUE EMOTIONAL BENEFIT

So much more to gain from every opportunity
(Brand Essence)

Empowered to Explore uninhibitedly

Multi-functionality

FUNCTIONAL BENEFIT

BRAND PERSONALITY

Inspiring Optimistic Youthful Friendly Modern

Youth Aspiration driven Digital savvy Connected Thrives on content Believes in sharing life

IDEAL CUSTOMER IMAGE

Aircel so far has been seen as an

Enabler

What all can my phone do?

What can with my phone ?

I do

Brand Aircel straddled all segments and created communication that cut across

Affluent

Aspiring

Striving

Positioning and Communication

We positioned the brand around VAS & Data

A refreshed positioning for the brand at the Pan-India launch

Initiated the data revolution by owning properties like PocketInternet

We gave the brand a consistent look and feel

We moved towards defining a consistent tonality

Buoyant

Young

Modern

Friendly

WHATS IN

WHATS OUT

Falls short on Modern

We created some properties to help us get Instant Recognition and Iconicity

M.S. Dhoni as Brand Ambassador

Differentiated and engaging presence for local connect

Save Our Tigers: CSR Initiative

CSK as a key platform Our iconic stores Signature tune with Shankar-Ehsaan-Loy

Communication Journey

Launch March 2009

Followed by VAS-led campaigns around associations

Brand ambassador integrated with Facebook, Yahoo! on the aspiration space, educative in tone, simplification

Manifesting into communicating physical cards for data access

And dialer tune cards for unlimited shuffle (Oct 2009)

Also making access easier for existing subscribers

Meanwhile we also did price-led communication

..Leveraged sports association

At this juncture (Oct 2009), there was a sudden change in the telecom market

To begin withIt wasnt an encouraging environment..

Rising competition (13 licenses for each circle),

Falling tariffs (lowest in the world)

Rapidly declining ARPU because the newer subscribers were the low spenders in semi-urban and rural areas Government asked operators to reduce termination charges, the money that an operator pays another to whose network the call is made. The subscriber growth continued unabated Sept 09 witnessed an addition of approx 15 million ( ref : TRAI)

A player called Tata Docomo came and made it less encouraging for competition

Pay per Second (PPS) became the order of the day several new operators entered the market following DoCoMO and introduced PPS

Aircel popularized its own pay per second plan.. (Nov 2009)

2010 saw brand Aircel at an all time high

SOT Campaign January 2010

Results: The campaign has resulted into a considerably high increase in brand imagery increasing the willingness to go for an Aircel connection to a level as high as 75% (Definitely Buy + Probably Buy).
Source: IMRB Study

Aircels Chennai Super Kings

IPL-3 2010 Champions!

Aircel INQ - March 2010

Social MoC (May 2010)

Pocket Internet @ Rs. 5 June 2010

Pocket Apps October 2010

Blyk on Aircel November 2010

The Impact / Result

We jumped up the Purchase Intention ladder

And enjoyed higher brand recognition with every new communication

All India SepOctFebMay JulyDec10 Jan10 Jan10 Apr10 Sept10 Oct09 Nov09 Mar10 June10 Sept10 Aircel Unlimited Donating Pocket Pocket Chocolat Bolun Theme Old Age Save Our Pocket Dialer Old spare INQ TVC Dhoni PI Dhoni PI Internet Internet e TVC Divya TVC Home ad Tigers Apps tunes phones Dutta

Aug09

Jan10

NovDec09

Creatives Base Reach Branded Recognition

(5799) 57 40

(5806) 36 24

(5838) 30 14

(7971) 46 29

(7269) 24 12

(5795) 35 23

(5806) 14 7

(5806) 6 4

(11513) 33 21

(7201) 44 66

(11522) 40 66

(23240) 34 66

(3374) 41 72

with the lowest spends amongst the big guys

YTD June10 Operator-wise ATIL Spends (In Rs Crs)
ATL TV/Press/Radio/Outdoor

And differentiated on Modernity

MillwardBrown Brand Track Q210

Achieving

A consistent AIRCEL Subscriber Base Growth Nov-09 Mar-10 Nov-10

Total subscriber figures % Market share

29,354,370 7.99%

36,861,174 8.74%

48,738,940 9.27%

Going forward ambition 2011

The need of the hour

With declining ARPUs and changing economic profiles of consumers Need of the hour:
Retention and acquisition Increased VAS products and services Diversification

The silver lining

VAS currently contributes to 10% of total revenue This share is expected to increase to 12-13% in 2011

What to look forward to in 2011

Facebook Voice Updates WiFi Hotspots MNP

SOT Phase 2
3G BWA

A refined positioning that reflects our incumbency position

Number of spectrum licenses
Operator 2G 3G BWA

Total Licenses

BSNL/MTNL

22

22

22

66

Aircel

22

13

43

Bharti Airtel

22

13

39

Reliance

22

13

35

Idea

22

11

33

Vodafone

22

31

Tata

22

31

Source: TRAI, Free Press

We have a chance to be the Number 1 Brand

And be benchmarked against

Brand Purchase Intention Score

Rank # 1

leading brands globally.

82%

72%

67%

56%

Challenges for Aircel

No clear brand imagery No clear target segmentation worked out While technology leader is the space Aircel wants to be in, there are no differentiated offerings that place them in this space No communication has been driven to appropriate Aircel as a technology leader While youth forms the target for most offerings, there is no clear understanding/ report/ insights on this youth segment