rediff.com

NewsApp (Free)

Read news as it happens
Download NewsApp

Available on  

Rediff News  All News 
Rediff.com  » Business » Bharti Airtel's big dream

Bharti Airtel's big dream

May 18, 2009 13:35 IST
Last week, it became the third telecom brand in the world to cross the 100-million subscriber mark. That took 15 years, but Airtel now wants to add another 100 million in just three years.

It's celebration time for Bharti Airtel, which last week became the third telecom brand in the world to cross the magic 100 million-subscriber mark in a single country. The gap between Airtel and its nearest competitor, Vodafone, is now about 26 million subscribers.

But Sunil Mittal is in a hurry: He now wants to hit the next 100 million mark in just three years a fifth of the time taken to reach the first milestone.

This means Mittal wants to continue to control around one-fourth of the mobile subscriber base, which is expected to hit 750 million by 2012. Or, grab around 28 per cent of the incremental mobile subscribers every month. Simply put, Airtel is planning to add about 2.8 million customers every month.

That shouldn't have been difficult as Airtel is already adding roughly the same number over the past few months, but the catch is that the telecom space will see much more intense competition with five to six new players expected to join in.

Mittal knows more than anybody else that the strategy to corner the next 100 million subscribers will have to be fundamentally different. So Bharti Airtel's Deputy CEO Sanjay Kapoor says the new strategy includes four key elements focus on youth between the age of 18 to 25; spread further into the rural markets with customised services; get a larger share of consumers wallets; and, most importantly, concentrate on revenue market share rather than subscriber market share.

Rural customers, for instance, already constitute 60 per cent of new customer additions. Airtel is now planning to set up over 100,000 (from 18,000 now) centres in villages that will provide services in 400 different languages and dialects.

The company has also tied up with partners like Nokia to roll out over 200 vans which sell mobile phones with Airtel connection. Besides, S K Microfinance and fertiliser giant IFFCO have been roped in to sell Airtel services to farmers across the country.

Says Kapoor, Our service delivery platform will be customised for rural markets and there will be targeted marketing. So, farmer can get details of mandi prices on his phone, or specialized information on weather.

The youth market, with its fickle brand loyalties, poses a different challenge.  Kapoor says the youth are always connected and want speed and features at affordable prices. To address this, Airtel is offering a range of music (the company has the largest music content in the country) and expanding its gaming portfolio.

The other fundamental shift is putting more focus on mobile commerce and financial services as well as retail. For instance, the domestic money transfer market, estimated at around Rs 50,000 crore (Rs 500 billion), could shift to the mobile platform.

Similarly, international money transfers from over 22 million non-resident Indians provide a huge opportunity, as mobile companies can easily tie up with money transfer companies and offer the service on a secure mobile platform.

But will this strategy provide them the much-needed numbers? Competitors say there is nothing really new in what Airtel plans to do; most of the new operators as well as incumbents are also tapping the same market.

For instance, Vodafones new ad campaign is aimed at encouraging consumers to use more value-added services, and Aircel, which has roped in cricket star Mahender Singh Dhoni, is also wooing the youth with value added offers.

Also wooing youth has not always worked. Tata Teleservices, which has tied up with Virgin Mobile, has a readymade value-added service product for the urban youth. But analysts say the company has managed only one million subscribers a miniscule percentage of its total subscriber base.

Technology providers also say that it is time for a change in the strategy. Indian telecom companies must aim for the next level now. The subscription game for voice is pass; it's time now for scaling up value-added services.

The number of premium subscribers is sizeable already and can't be ignored for long, says Kanwalinder Singh, President, Qualcomm India & South Asia. His competitors might find Mittal's ambitious target difficult to achieve, especially in a market where the number of operators will nearly double in the next 12-18 months. But Airtel is clearly banking on Mittal's formidable track record of proving his detractors wrong.

Surajeet Das Gupta & Ishita Russell
Source: