Circle Head, Delhi | 09 Dec 2004
“Being a fourth operator, our mindset is that of a challenger. We knew that the other three players were big, but so what? We are new and we are better. And we have to be better to counter the largeness of others. We have done well because of this approach. We had created a GSM record by getting one lakh subscribers win 30 days of our launch. Also, the first five lakh subscribers we acquired was also a record in the GSM segment because we did it in 17 months.”
Rajendra Chourasia is an engineer from IIT-Mumbai. After graduating in 1985, he joined Engineers India Limited, where he worked for two years. Then he went back to studies at IIM-Ahmedabad. Following his graduation from IIM, Chourasia joined Godrej Soaps as a Management Trainee and continued with the merged entity Procter and Gamble Godrej until 1993. In 1995, Chourasia moved to Joyco (which is now Wrigleys) as Regional Manager-West based in Mumbai. He became Head of Marketing at Joyco based in Delhi from 1999-2002. In 2002, he moved to Idea Cellular as Vice-President-Sales before the brand was launched in Delhi. In October 2003, he was elevated to the post of Circle Head. He speaks to Malini Menon of exchange4media on how the Idea brand was built and the challenges ahead. Excerpts:
Q. In terms of a brand, Airtel and Hutch have been very aggressive in their marketing as well as promotions. Why has Idea been underplaying?
Idea is not underplaying. The difference between the competition and us is that we were dominant only in five circles. So we did not really feel the need to use a national medium like television as aggressively as the others. But we were very aggressive in the circles that we were operating in. So, if you go to Maharashtra, Gujarat, etc., you will find that Idea is very prominent. But in circles where Idea is not present, you will not see us at all. This is because we are using the media in a very focused manner.
The second thing is that Idea itself is a very new brand; it has been around for just two and a half years, whereas other brands have been there for a longer period. If you look at our marketing history, you will see that our achievements have been phenomenal. Idea is like an absolutely new brand taking birth in a highly cluttered telecom environment and creating a niche in the consumer’s mind. Something that has really worked for us is our unique logo; we have a youthful, energy-driven look to the brand. The promotions and campaigns have been youth-driven and sophisticated. If you look at the basic theme used by most players, you will find that Idea’s theme is most sophisticated. The brand appeals well to a sophisticated crowd.
Q. Considering that the product is targeted at the masses and not at the classes, why haven’t you thought of having a brand ambassador?
Yes, we have. We first built our base with the initial campaign and then to reach out to the masses we have taken the sumo wrestler advertising route. The sumo wrestlers are our brand ambassadors from a customer perspective. You can see them promoting our pre-paid service which is mass advertised. The sumos have in fact connected very well because people have been able to recall the ad and in some surveys our brand recall has been the second highest across all categories. Moreover, sumos stand for power and royal lifestyle; these associations have really helped the brand. In India, sumo wrestlers are inspirational and are looked at as big, royal people fighting, which fits well with the product values.
Q. You have not taken the celebrity route either. Any reason for this?
Idea as a company thinks differently. The brand name itself pushes us to do something totally different and live up to the expectations of the people. Moreover, all the telecom brands are taking the celebrity route and there is no fun in taking the same route. So we have taken the sumo route, which is unique. We just didn’t want to take any filmstar. I think the impression that we don’t have a celebrity is not really correct s the sumos are also celebrities in a way.
Q. When Idea was launched in Maharashtra for Rs 300, you got to use the actual talk time. Now you have service fee and processing fee. Why is the processing fee so high?
Our processing fee is similar to the industry’s. It’s not high. About Rs 150 is the processing fee, which is equivalent to a rental for a product. It is something that is charged by all operators. For instance, in Delhi it is common and in other circles there may be some variations but it will be consistent among operators. Earlier, with a constant tariff regime, operators used talk-time to excite customers. Today, tariffs have come down drastically; Earlier, even if he used to get a connection for Rs 300, the call rates were more than double. So, on the whole, things have become very economical for customers. Moreover, what we did in Maharashtra was for a short while because these are burst periods that are used to create flutter and excitement or counter competitive pressure. But on a sustained basis, it is not possible for operators to give full talk-time as a proposition to customers.
Q. You have a dual band frequency, which sets you apart from others. However, how would customers with old mobile phones with single band frequency use your connection?
Actually at the time of launch we thought that this would be one of the factors that would affect us but then it really didn’t make too much of a difference. This is because almost one year had passed since dual band handsets were introduced in the markets. Moreover, a handset is something that is aspirational. Nobody likes to be seen with an outdated model. If you notice, there is hardly anybody who has single band frequency handsets nowadays. In metros, people sell off their cellphones to buy high-end phones. So in metros the dual band is hardly a concern. In the smaller towns where the mobile phone market is still catching up, affordability is a crucial factor. So there is a thriving second-hand cell phone market. However, it is a freak possibility that somebody will buy a model that came in three years ago. Dual bands have been there in the market for more than three years, so the handsets before that won’t even be in a workable condition.
Q. What’s your rationale behind the tie-up with Samsung?
This is one category where two products get sold simultaneously—the connection and handset. So it is really important for an eminent handset provider to have a tie-up with a cellular operator. We had a tie-up with Samsung earlier, which went off well. The relationship was good, so we are carrying forward this relationship by coming up with another offer for the customer. The advantage here is that the handset provider finds it easier to sell handsets as there is a value-addition for the customer and the operator too is happy as he gets a new customer. It’s a win-win situation for both sides.
Q. What is your subscriber base in Delhi? How challenging is the Delhi market?
It’s around 5.7 lakh. Delhi is among the few markets that are completely competitive, which means you have four GSM players and two CDMA players. All six players have been there for two years now. There is hardly any other market where all six players are present. No company underestimates the potential for generating business from Delhi. So everybody puts in resources and in such a scenario delivering numbers is quite a challenging task. Being a fourth operator, our mindset is that of a challenger. We knew that the other three players were big but, so what? We are new and we are better. And we have to be better to counter the largeness of others. We have done well because of this approach. If you look at the subscribers we have acquired, you will see that we had created a GSM record by getting one lakh subscribers within 30 days of our launch. Also, the first five lakh subscribers we acquired was also a record in the GSM segment because we did it in 17 months.
Q. What is your target for the coming year?
Well, our target is primarily to produce good quality services to our subscribers. If there is pressure simply on getting subscriber numbers, there is a tendency to start acquiring customers that are inactive. This is of absolutely no use. We actually keep track of revenues, network utilisation and profitability; these are our internal targets. We have been doing very well and our revenues have been going up every month. Delhi is among the upcoming circles in the Idea portfolio. Maharashtra is our largest circle. We have over 1.1 million subscribers there. Then we have circles in West UP, AP, Kerala, Gujarat, where we have five lakh-plus subscribers. The other two circles, which are less than five lakh, are MP which is around 4 lakh now, and Haryana.
Q. What is Idea’s market share?
Across the country we have 12.7 per cent share of the market. When we look at market shares in circles where Idea is present, we are clearly the market leader. In eight circles, we are ahead of the perceptual leaders Airtel, Hutch and Reliance.