President | 08 May 2003
"Our branding techniques have ensured that Zip is not seen as an ordinary phone instrument, we have been able to allot it certain personality traits. Consumers perceive the Zip Fone to be friendly, trustworthy, smart and young"
In this session of Brand Speak, Zip Telecom President Shishir Lall shares valuable insight about Zip's brand positioning, key plans of expansion, consolidation and communication, with exchange4media's Anushree Madan Mohan. ZIP Telecom is a subsidiary of ZIP Global Network, a Mauritius-based company. ZIP Telecom Limited provides comprehensive telecom-related management solutions through its businesses namely: management of franchise locations. Zip Telecom has propagated a paradigm shift from the traditional 'Telco-Subscriber' business model, to the 'Business to Business' model. ZIP Telecom has specially designed pay phone instruments - ZIPFones and an innovative advertising avenue called Zip Media Avenues (ZMA).
Q. Zip Telecom currently manages 20,000 pay phones. If media reports are to be believed Zip Telecom is planning to expand its network to 1 lakh. Kindly throw light on your expansion plans?
'Yes', Zip definitely plans to expand its payphone network to 1 lakh. Lets not forget that nearly 93% of the Indian population is still dependant on the basic line service. Two factors have helped us greatly, the first is the un- faltered access to basic telephone lines and the new interconnect user charge. Both these developments have diminished the difference between cellular and basic service operators. Moreover, The Department of Telecommunication (DOT) stated last year that it intended to increase the PCO density from 1 in 3,500 to 1 in 500 people and this should lend support to our efforts.
Q. Why has Zip Telecom propagated a paradigm shift from the traditional ' Telco Subscriber' business model to the ' Business to Business ' model?
Zip Telecom believes in innovation. To meet the growing needs of telecommunications, Zip has introduced a business model wherein the Zip Fone is placed at the disposal of the franchisee against payment of a non-refundable franchisee fee, thereby giving the company a complete control of the business in their region. The franchise locations provide telecommunication facilities to all those who require immediate and simple access to phones for STD (domestic long distance) and ISD (international long distance) calls. ZIP Telecom also provides technical support and service for all its franchise locations. You must be aware that the same model was tried and tested in Maharashtra and that the move was a big success. Hence we have decided to replicate it in the other circles.
Q. BSNL is the leader in the STD phone market with revenues over 6,000 crore. How do you plan to make your presence felt in that sector?
Let me assure you that Zip is in no way trying to compete with BSNL. The uniqueness of our payphone model makes us so far the only private player solely concentrating on the payphone segment. It is in this segment that we have created a niche for ourselves and have proven the success of our business model. We are exploring different avenues with other basic service providers, including BSNL, for the back-end service, wherein then we can we can expand the base of Zip Fones nationally.
Q. How is the Zipfone different from other payphones?
The Zip Phone is far more technologically superior to the other pay phones. The Zipfone is a microprocessor based programmable payphone system that offers multiple payment options like coins, smart cards and also an internal metering device to bill calls locally and even print out call details using a peripheral serial printer. The system can be interfaced to a variety of networks like WLL (TDMA/CDMA), GSM, and VSAT. Zipfones have a computer like architecture i.e. motherboard, storage memory, I/O parts, display screen, modem for remote communication and keyboard. Hence the device is extremely scalable for add- on modules. The telephone circuitry is an add- on Interface as compared to other payphones. It facilitates multiple advertising avenues like Zipscreen, Ziptouch and Zip Contact. The version 2 of the Zip Fone comes with a built-in auto-conferencing unit.
Q. Could you elaborate more on the advertising options that Zip Telecom provides through Zip Media avenues?
We provide four avenues to our advertisers. The first is the Zip Screen which consists of a high resolution 6'color graphics advertisement LCD panel which would display advertising messages every 10 seconds. Zip Contact on the other hand is a 15" * 12" backlit acrylic header which is positioned at eye level. It is used for thematic messages. The Zip Touch consists of pre programmed speed dial buttons, which provides a single touch access to consumers. The fourth avenue would be Zip Constant, which involves a static panel to display messages.
Q. Which are the corporate names that have benefited through ZMA? Is advertising through a pay phone an infant concept in India?
Coca Cola, Seagram's, Britannia, Pepsi, Shaw Wallace, Union bank, Cadbury, Spice, Hutch, Titan, Colgate Palmolive, Videocon, ITC, Satyam Infoway, Western Union, Click are some of the companies that have effectively used ZMA. Zip is the pioneer in introducing advertising on payphones. The concept may be new but lets not forget the perks that are involved. Zipfones provide several advantages in terms of reach, captive audience, low cost per contact and ability to customize messages and advertisers have been very receptive. Plus, most advertisers are seeking alternative avenues for imparting their message. Zip Media can effectively and efficiently complement their regular communication plans.
Q. What would your earnings be like in terms of ad revenue? What would your future targets be like on the same front?
Zip Media Avenues contributes 10% to our revenues. We expect the revenue from ZMA to increase by 50% over the next one year given the fact that the number of Zip Fone locations would grow higher with the tie-ups with service providers falling in place.
Q. Which are the recent marketing initiatives that you have undertaken?
Zip has been on television last year. The objective was to build stature and equity for the Zip. I am sure you must be aware that we undertake a lot of ground promotions, either to drive our payphone business or in case of Zip Media avenues, to position ourselves as a serious media driven company. We have been associated with various corporate events like the Seagram Corporate Cricket Cup; our Zip Fones have been featured in a number of Hindi movies and TV serials
Q. Zip Telecom has been through a massive exercise in brand building. How has it benefited Zip Telecom in the long run?
We have been able to establish a strong brand presence for Zip Fone, especially since we are the first players to have branded a payphone service. Our research has shown that consumers feel more secure and comfortable using a Zip Fone vis-Ã -vis any other payphones. The emotional benefit is that we offer a classy and trendy looking payphone, something that you would like to be seen with. Our aim is to make Zip Fone the preferred choice of the payphone consumer at large. Our branding techniques have ensured that Zip is not seen as an ordinary phone instrument, we have been able to allot it certain personality traits. Consumers perceive the Zip Fone to be friendly, trustworthy, smart and young. It is a well known fact that we are the pioneers when it comes to branding a pay phone service, on the virtue of this fact alone we have been able to generate a good amount of brand recognition and recall.
Q. How would your prioritize your media spend and your ad spend?
Media would be driven solely by our advertising objectives. To create more awareness about the Zip Media Avenues, we would chose very focused mediums, which cater to the advertising and marketing community. For example, we have opted for mediums like on-line advertising on media and marketing related sites and these have worked well for us. We would step up our advertising in accordance with the proposed roll out across different territories. We shall invest in strengthening our brand and make it the preferred choice.
Q. As a part of your marketing strategy, how do you coax public booth owners and operators to opt for your pay phone?
I believe that Zipfones speak for themselves. I have already listed some of the advantages that Zipfones provide, in comparison to other phones. Let me list a few more. Did you know that Zipfones have a storage facility of 1500 calls in the memory and can store up to 200 individual customers accounts? In addition, it has 99 programmable speed dial numbers and can print the audit activity report every day. In areas with erratic power supply, a maintenance free battery is provided with certain models of the Zipfone. There are one touch buttons that lends access to a host of consumer driven services such as home delivery and public information services. Dialing is also possible through a keyboard or a parallel phone. ZIP Telecom provides technical support and service for all its franchise locations. Standardized service and billing is offered. They all adhere to a standardized corporate identity and thus portray a uniform image to customers. With all these advantages at hand, it shouldn't take much to coax people to opt for our services.
Q. Besides Zipfones, are you planning to enter any new areas?
Currently our focus is to replicate our successful Maharashtra model in other states. We have some exciting versions of the ZipFone lined-up which would offer a host of value added services to the consumer and the advertiser.
Q. What kind of a future do you see for Zip Telecom?
The company is poised for the growth it has been waiting for, for the last two years. The company's positioning has made it an attractive proposition for most of the private basic service operators. In future, Zip intends to promote itself as a company, which has the best and proven expertise in the end-to-end payphone market including location management. Zip will leverage this strength to tie-up with the other private operators as and when their infrastructure is in place.