Every year, telecom service companies spend hundreds of crores on brand-building. Filmdom and cricket celebrities make good money in the bargain and ad agencies cut a hefty commission. And that seems to be about it. The service provider is able to spread awareness but is it able to build some intrinsic values in its brand?
Look at the evidence. Hutch spent vast sums of money on advertising in the country. It came up with a series of campaigns which won accolades at ad fests, besides raising pug prices across pet shops. But when the business was sold to Vodafone, the new owner changed the brand almost overnight. Hutch was gone in no time, replaced by Vodafone. Pink gave way to red before you could say hello. More important, Vodafone suffered no loss in subscriber numbers. Hutch itself had taken over two top service operators in India — Max Touch and Essar. Of course, it found little use for the two brands. Just like Vodafone found little use for its brand.
Take another example. Idea Cellular has acquired operators like Escotel and Spice in the past. Though not national brands by any stretch of imagination, these were substantial operations in the pockets they operated in — Escotel in west Uttar Pradesh and Spice in Punjab — and had a good set of customers. Post-acquisition, these brands were quietly and quickly extinguished. The new owner obviously saw no purchase in retaining these brands. There are no brand-led acquisitions in the game.
The message is clear: Telecom service companies have not been able to build long-lasting values in their brand. So, any new owner retains the subscribers and the network and dumps the brand. This does not happen in other sectors. Would Tata Motors even dream of interfering with Jaguar and Land Rover, or Coca-Cola with Thums Up? In fact, Thums Up happens to be Coca-Cola’s flagship brand in India.
Think of any top brand operating in the country and ask yourself what does it stand for? For sure, you will struggle for an answer. Telecom brands may be a mile wide but they are only an inch deep. There is no Maggi, Dabur or ipod in telecom services. Indian service providers can draw comfort from the fact that this seems to be a worldwide challenge.
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Not that the telecom service companies have not tried. Media research shows that almost four-fifths of the ad-spend is on general brand building; only one-fifth is to promote particular schemes.
Vodafone, and earlier Hutch, has played strongly on the network theme — it follows the customer wherever s/he goes. Bharti Airtel has mapped its consumers diligently and has tailored its campaigns for different categories. Chairman Sunil Mittal has often said the company’s most valuable asset is its brand, Airtel. It is positioned as a brand that seeks to bring people together with hope and optimism.
Idea’s campaigns too suggest that it wants to build some strong equity in its brand. It is the aid for smart-thinking people.
Most companies have large teams working on their brands. And most of the times they manage to come out with eye-catching campaigns. But, as the evidence on the ground suggests, painless change of brands happens all the time.
The truth of the matter is that a non-perishable telecom service brand can be built only when it has an embedded unique value proposition. And that value has to be delivered consistently over a period of time. Homespun service sector brands like Taj and Oberoi have been built after long years of relentless top-class delivery.
At the moment, telecom service is a commodity. Call-delivery numbers are somewhat similar across service providers and so is the customer service. Any new service is copied by rivals in no time. Tariff plans cannot be distinguished between operators. This still leaves room for companies to create differentiation, if they want. The question is whether they are willing to make investments to improve their service. Those companies which are listed on the stock markets make substantial profits. So, the cushion is there. But are they willing to go the extra mile to please the customer?
Without that, it is best these companies advertise their schemes and offers. There does exist a correlation between ad spends and business growth. There would be no customers if a service provider does not promote its brand. So, there is no way companies can stop advertising. But they need to take the next big step which is to develop long-playing brands.
It is often argued that brands are difficult to build in a sector where the contact with the customer is very frequent, like in telecom services. Had that been true, banks too would have found it difficult to build a strong brand and use it to hold on to customers.
In spite of whatever yarn the ad agencies spin, there are no soft options or short cuts for building a brand. Globally, it is now widely acknowledged that it can take up to 30 years to build a powerful brand. There is no reason why it should be any different for telecom services in India.