Aircel, promoted by the Sterling Infotech group, bought 79.24 per cent stake in RPG Cellular Services in December 2003. It now holds a cellular license in Chennai as well as Rest of Tamilnadu (ROTN). Industry estimates suggest that Sterling Infotech bought the stake for Rs 250 crore. Prior to this development, Aircel had acquired about 21% stake after a buyout of Vodafone’s stake in RPG Cellular. As part of realignment activities and new branding, Sterling Infotech had called for a pitch for both its postpaid and prepaid accounts. While the agency for the prepaid account is yet to be decided, the postpaid of both the Chennai and ROTN circles will move to Fountainhead.
The postpaid account for ROTN had earlier moved from Fountainhead to EuroRSCG in July last year and now it has moved back. Agency sources confirmed the win, which followed a multi-agency pitch involving JWT, Rubecon, Euro RSCG and Fountainhead. The client could not be reached for confirmation and comments. The launch campaign breaks on February 9, 2004 across all leading dailies including Hindu, The Daily Thanthi and Dinamalar as full-page ads. The campaign will focus on Print and Outdoor but also be present on other media.
The AOR of the new Aircel account, including Chennai and ROTN along with the prepaid account will be handled by Minte consultancy, the sister concern of Fountainhead, based in Coimbatore.
Sterling Infotech is expected to initiate aggressive marketing and branding efforts to promote the new brand, new tariff plans and the new alignment. Aircel commenced operations in April 1999 and is the leading cellular operator in Tamil Nadu circle with 4,75,705 subscribers as of November 2003. RPG Cellular meanwhile had a subscriber base of 2,12,823 and comes second to Airtel in the Chennai circle.
With RPG in its fold, Sterling Infotech is expected to invest around Rs. 100 crore to increase its capacity to 8 lakh lines from the existing 2.55 lakh lines during the current financial year in Tamil Nadu. Aircel spent about Rs. 6 crore in the last fiscal year, Rs. 4 crore on postpaid and Rs. 2 crore on pre-paid campaigns. This spend is expected to increase correspondingly with the additional Chennai circle under its wing.