On Tuesday last week, nearly 10,000 employees and associates of the Bharti group's fixed line business nationwide were on a video conference with Rajan Mittal. The joint managing director of Bharti Televentures had made an announcement "� the company had decided to bring all its services under one brand, Airtel.
That implied that the Bharti group's fixed line brand Touchtel and long distance brand IndiaOne would cease to exist. Mantraonline too, the group's internet service provider brand, too will eventually be replaced by the Airtel brand name.
Explaining the logic of the new brand integration, Mittal points out: "Our whole aim is to offer customers simplicity and leverage the strength of the Airtel brand for our suite of services."
Some industry men think that the consolidation will make Airtel a $ 1 billion brand in terms of revenue and that its value will double by the end of this financial year.
That is because the fixed line and data businesses account for over 40 per cent of the company's revenue and so will help the Airtel brand.
More importantly, Bharti group insiders claim that the brand consolidation will make Airtel a stronger brand (in terms of revenues). Mittal wants Airtel to figure in the list of top five brands in India in terms of perception and recall.
Still, the Bharti exercise is not limited to brand integration. For the last four to six months, the group has been working on integrating backend operations too.
Executives at outlets (whether an Airtel or a Touchtel one) went through rigorous training so that they could transform outlets into one-stop shops that offer the entire suite of the Bharti group's services. Drop boxes were integrated so that both fixed line and mobile service subscribers could drop their cheques in any of them.
And voice recognition services were re-configured so that subscribers could telephone a fixed, mobile or an international mobile customer care service without having to dial separate numbers. Bills too will eventually be integrated "� subscribers to both fixed and mobile services will be given a single bill.
Why has the Bharti group done all this? Mittal and his executives explain that while servicing enterprises and small businesses, they realised that these customers require a range of services and that their demand for voice services is not as paramount as that for broadband, VSAT, leased lines and mobile services.
Says Hemant Sachdev, corporate director at Bharti-Televentures: "We realised that different set of sales teams were going to them to service these separate needs. But what they required was a one-stop shop, something that would help us build a long-term relationship with the customer."
So the sales teams were integrated. But the message that came through was loud and clear: what small and medium enterprises wanted could also be what individual customers wanted "� simplicity and a one-stop station for all services. Enter the idea of a consolidated Airtel brand.
That's not the only reason, of course, for opting for a single brand. Mittal admits that the market is becoming more competitive and rivals like Bharat Sanchar Nigam Ltd, Reliance Infocomm, Tata Teleservices and Hutchison Essar are putting their money in one brand.
Some like Reliance and the Tatas have the advantage of leveraging the brand across various businesses. Says Mittal: "Competition is hotting up and it does not make sense to fritter resources on so many brands when our rivals have only one brand."
The sheer advertising expenditure too did not justify continuing with a multi-brand strategy. Airtel accounts for 90 per cent of the group's ad expenditure, with the remaining 10 per cent divided among the other brands. So the other brands could never be strong in any case.
The government's decision to usher in unified licensing (only one licence is required to offer, say, fixed and mobile services) only hastened the process.
For instance, Bharti Televentures' fixed line services are available in six circles but the company plans (after the unified licence regime comes into force) on expanding into more areas. By the end of the year Bharti will offer mobile services in 23 circles. With such network rollouts, it does not make sense to have two separate brands anymore.
Still, not everyone is impressed by all this. A senior executive at a rival telecom company who declines to be identified says: "It is a no brainier. They should have done it many years ago. It has nothing to do with unified licensing "� it's a marketing strategy."
He points out that most telecom companies consolidated their brands quite some time ago when they realised that it did not make any sense having separate brands for post paid and pre paid services.
Adds another telecom company executive: "The real reason for having separate brands earlier was that if you decided to sell any business you didn't have to untangle the brands. That period is now over."
Ask Mittal why Bharti didn't launch an integrated brand in the first place and he replies that when Bharti launched fixed line services in Madhya Pradesh a few years ago it was not sure how good the services would be and did not want poor service levels to have a rub-off effect on Bharti's bread and butter mobile services. That fear no longer exists.
Secondly, in circles like Delhi where both fixed line and mobile services co-existed, Bharti didn't offer fixed line services all over the city. Touchtel services were available only in commercially viable pockets.
Says Mittal: "As the service was not available everywhere, it was important to have that brand differentiation. Otherwise mobile customers would be unhappy."
But the situation has changed now; Bharti can offer wireless-based fixed phones in any part of the city.
Last but not least, most telecom companies around the world have followed a consolidated brand strategy, as have Indian telcos. Said a Touchtel executive during the video conference: "It is like a Kumbh Mela where two brothers (Airtel and Touchtel) got separated. Now they are coming together once again."
