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Mobile war gets fiercer

BS Corporate Bureau in Mumbai

The battle for Mumbai's mobile phone market is heating up. Responding to Bharti Cellular's aggressive push into Mumbai, Hutchison Max Telecom and BPL Mobile, the city's other two top mobile operators, on Thursday announced that all incoming calls from their respective networks in India would be free - or more correctly, both waived airtime charges for incoming calls, matching Bharti's offer in Mumbai.

Secondly, Hutchison and BPL users can roam at a flat rate of Rs 1.49 per 60 seconds on all partner networks - Hutch in Delhi, AP, Karnataka, Chennai, Celforce in Gujarat and Command in Kolkata, and all BPL networks (in Maharashtra, Goa, Kerala, Tamil Nadu). Idea Cellular, Oasis, RPG and Spice could also join the partnership.

Roaming on networks other than partner networks would continue to be charged at Rs 3 per minute for airtime and Rs 3 per SMS, Hutch and BPL Mobile said in press releases.

Both companies are also expected to launch huge advertising campaigns in Mumbai in the next few days to counter the Bharti campaign. A Hutch source confirmed that it would be launching its campaign over the weekend. F B Cardoso, BPL Mobile CEO, said more cautiously, "We continuously communicate with our customers. Ad campaigns are one such way of communicating."

Exactly how much Mumbai's mobile service providers will spend is not clear: Hutch and BPL Mobile declined to furnish figures.

But an operator typically spends about Rs 200 million a year on advertising. Some in the industry reckon that Bharti will spend anywhere from Rs 100 million to Rs 150 million in the first three or four months to establish its Airtell brand in Mumbai.

Bharti officials were not available for comment on this.

Third, both BPL Mobile and Hutch are offering their subscribers 32K SIM cards (the current cards have an 8-kilobyte memory), in a bid to match a similar Bharti offer. BPL Mobile at least is offering the new SIM card free to high-end customers but will charge others Rs 100-150 for them. The new SIM cards provide a host of value-added services such as train timings and flight schedules, obtaining your bank balance, downloading tunes and pictures on your mobile and movie timings.

Both BPL Mobile and Hutch say that a lot more is in the works but decline to spell out what they're planning.

Executives at Bharti's rivals in Mumbai also privately accuse the Mittal company of making exaggerated claims. Said a senior executive: "The claims that are being made are so extreme that they should never be made. These guys are doing things that are irresponsible." Citing an example, he pointed out that Airtel was offering one international number free. "Actually, only the airtime is free," he added.

Bharti officials in turn accuse the company's rivals of blocking the voice mail facility of their customers who are shifting to Airtel. BPL Mobile and Hutch officials were not immediately available for comment.

If BPL Mobile and Bharti are launching an offensive, it's because of the huge customer response that Bharti's Airtel has been receiving. Rajju Makol, proprietor of AirTel Spot Telecom, an exclusive Airtel shop at Prabhadevi in Mumbai, said: "There has been an amazing response from customers. The shop is jam-packed." What is more, dealers report that 60-75 per cent of those seeking Airtell connections are BPL Mobile and Hutch subscribers.

Indeed, Bharti has not been able to cope with the rush and activate connections swiftly. Says an Airtel dealer in central Mumbai: "The activation is a server problem. We have given connections within a few hours of people subscribing to the service. But sometimes there has been a problem. We have not been able to give connections even for close to 72 hours."

Exactly how many subscribers Bharti has snared is not clear. Sanjay Kapoor, executive director (western region) of Bharti Cellular said: "It is too early to respond." But both BPL Mobile and Hutch insist that their subscriber numbers haven't dwindled because they've gained new ones. Says a Hutch official: "Hutch's prepaid subscriber numbers in July are larger than that in June and May. In post-paid, the last two days' numbers are bigger than ever. Our churn rate in July is lower than that of the previous month."

Both BPL and Hutch say that Bharti may set the pace for the first few weeks, but the game is a long-term one. Said Cardoso: "As the market evolves, the competition would get more service led than price led. For that every player in the market will have to enhance value as well as services."

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