Authors: Robin Jeffrey
Why should a pug dog born
in Britain have been seen as an effective sales symbol for mobile phones in India?
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As Rahul Singh points out, dogs ‘terrify many Indians’, are regarded as dirty by others and help to give India the highest number of rabies deaths in the world.
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‘In India, man’s best friend often is not’, a front-page headline in the
International Herald Tribune
advised readers, and reported on dangerous ‘packs of strays’ roaming towns and cities and causing an estimated 20,000 rabies deaths a year.
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Why a dog? Social class, and changes in class composition, provide part of an answer. The initial Cheeka campaign was aimed at television viewers, and in 2003, India had about 95 million television households in a population of 1.03 billion people. If those sets had been distributed evenly, about 45 per cent of the population would have slept each night in a place with a TV set. These were the targets of mobile-phone advertising.
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The first barrier lay in capturing their attention, the second, in convincing them of the simplicity and steadfastness of the device.
Marketing of goods in India has always presented intriguing problems and solutions.
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William Mazzarella devoted two chapters of a book about Indian advertising to trying to understand the development of a single campaign to market mobile phones in Mumbai in the mid-1990s. The essence of success, it appeared, was to create messages in which ‘Indianness’ looked like ‘an avatara [incarnation] of the global’.
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When the Reliance group of the Ambani family moved into mobile phones in 1998 through Reliance Telecom Limited (RTL), it faced all the old problems of marketers—distribution, social conservatism, customer frugality—and, as well, the need to educate purchasers in a technology that alarmed many consumers even in urban and industrialised countries. Reliance deployed ‘massive aggressive promotion campaigns, using every possible medium of communication’,
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which since the 1980s had proved effective in launching new products, including newspapers.
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As well as the publicity push and enticingly cheap plans to attract subscribers, Reliance attempted to set up a missionary society of sales representatives—50,000 Dhirubhai Ambani Entrepreneurs (DAEs). Intended to capture people in the streets and sell them mobile phones, the ‘entrepreneurs’ had to pay Rs 10,000 as a deposit but were promised Rs 100 for every subscriber they enrolled. The scheme flopped, partly because the phone services did not initially fulfil the promises, but also because the ‘entrepreneurs’ had not been sufficiently trained and confident in what they were selling.
Talk time—small, medium, large
The Ambani name and
Reliance brand attracted a host of small commercial people who would have happily tried selling woolly mittens in Mumbai if the name ‘Reliance’ had been emblazoned on them. What was learned, however, was the need for training. Enthusiasm and commercial experience were not enough. There had to be a basic understanding of the technology, an ability to interpret it to customers and the appearance that agents knew what they were talking about. ‘Consumers found it difficult’, an
Outlook
magazine team concluded, ‘to trust paanwallahs and neighbourhood grocers with their cash and post-dated cheques’. A prospective purchaser identified what was missing: ‘All [the agent] could say was:
“Yeh bahut cheap hai”
(This is very cheap)’.
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Agents did not understand how the phone worked or how payment was to be made. (See
Illus. 7
).
Reliance’s campaign to create ‘barefoot mobile sales reps’ did not work at first, but it found that existing shops could be made into effective sales outlets for many of its products. Its aggressive rival, Vodafone, had 600,000 ‘points of presence’ when it took over Hutch in 2007—and 1.2 million by 2010.
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The crucial ingredient in these transactions was simplicity. People wanted something that they could both afford and operate. To be effective, sales agents needed something that was easily understood and explained, and they needed to see profit in handling a new and initially mysterious item. Established shopkeepers and merchants, especially if they had offspring unafraid of the technology, took on dealerships as part of existing businesses. Anuradha Aggarwal, a senior vice-president of Vodafone, spent thirteen years as an executive in FMCG industries (Fast Moving Consumer Goods) in Uttar Pradesh and Maharashtra. In 2001, Saharanpur, a town in western Uttar Pradesh, served a district of about 3 million people; it had no stores selling telecommunications products. In 2011, the district population had grown to 3.5 million, and 40 per cent of the shops in Saharanpur’s main market did some sort of commerce related to mobile phones. ‘I keep telling these guys’, Aggarwal said of conversations with marketers of mobile phones, ‘“You have not seen what a tough patch is, because the consumer wants your product”’.
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Commercial sense and listening to customers told shopkeepers that mobile phones and mobile-phone services excited curiosity and tempted people to spend money. But ease with the technology was essential to satisfy customers and turn them into enthusiasts telling their friends and relations about the benefits of mobile phones and returning regularly to replenish talk-time and sample other products.
Probing for ways to turn
a profit, the providers of mobile phone services found that the snail-paced landline model was dead. Just as cash-strapped customers needed to buy matches, soap and shampoo quickly and in small quantities, so they wished to purchase their mobile-phone time. To keep within their budgets, customers wanted to pay for their calls in small amounts in advance. In addition, the pre-paid mechanism made service more sociable. Hesitant people when buying a pre-paid connection were assured that a shopkeeper they knew would carry out the recharge process for them. Consumers left the shop with their mobiles ready for use. And if anything went wrong, there was a familiar shopkeeper to go back to. Combining the economic and the social gave the pre-paid card a powerful attraction. In 1999, about a quarter of mobile phone subscribers had pre-paid connections; by 2002, this had risen to two-thirds.
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Price was crucial, as the careful budgeting of poor people made clear, and the cutthroat competition that resulted cut the cost of calls and phones. Companies struggled to reshape the industry to their own advantage as two examples illustrate.
Bharti Airtel emerged as one of the vigorous survivors of the chaotic first five years of mobile telephony. It started its pre-paid cell-phone card under the name of ‘Magic’ in January 1999 in Delhi, where the company had built its initial base. Airtel’s marketing people aimed to provide a breath-taking contrast to earlier experiences of trying to get a phone connection. With the Magic pre-paid card, purchasers walked out of the store in half an hour with working phones. Everything was intended to be cheap, easy and fast. An agent explained to the customer how to make the phone work, recharge the card, and keep costs within the customer’s budget. With a pre-paid plan, the phone stopped working when you had used up the time you had paid for.
Tens of millions o
f people had to acquire telephones if mobile telephony was to reward the huge investment required to build and maintain vast networks of cell-phone towers. No company could afford to open thousands of sales outlets that sold only mobile phone services. Airtel and its competitors therefore began to incorporate all kinds of retail shops into their sales chain, including the tiny general stores found in every small town where cigarettes were sold individually and shampoo could be bought in one-wash packets. Smalls shops in cities, towns and villages had long been part of the networks built by Indian marketers of FMCG—Fast Moving Consumer Goods. These outlets became the targets of the great capitalists selling mobile phones and services. The aim was to make cell-phone services available even to those who could make only a small investment. The initial Airtel Magic packages could be bought for as little Rs 300 (though this represented more than a week’s wages for an agricultural labourer in 2002). ‘By 2002’, Radhika and Mukund write, the Airtel Magic card ‘became the largest selling pre-paid cellular card in India’ with 6.4 million subscribers. The number had doubled within a year, and pre-paid cards were already generating more than half of the company’s revenue.
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Ten years later, when Indian cell phone subscribers exceeded 800 million, the numbers of 2002 seemed paltry. But in their time, they constituted an immense breakthrough—a stunning contrast to the old experience of applying for a landline and waiting two years for a connection.
Such a breakthrough required connecting with, and educating, the shopkeepers. Fiercely competitive service providers planned the search for customers like military operations. ‘I was with Vodafone earlier in T[amil] N[adu]’, Bobby Sebastian, a mobile-phone veteran, explained in 2010.
We had mapped our distribution network … We used to take lat-long [latitude-longitude] of each of these [shop locations] … I have … a distributor [who] … has got some 200 shops with him. [We] go and take a lat-long—we will map it onto Google Earth. By mapping it to Google Earth I clearly know how my distribution is. [Our distributor] might have covered only one area. So with the help of Google Earth, we used to set up distribution in the areas where we have not got it. Suddenly I will find a village where I don’t have a retail outlet. I’ll ask my distributor to go and cover that area … So the reach and the visibility … penetrated to that extent.
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To sell recharge coupons required little more expertise than selling packets of shampoo; but to sell SIM (Subscriber Identity Module) cards, the thumb-nail-sized piece of circuitry that slides into a phone to store information and enable the phone to connect to the Radio Frequency of the company supplying the service, meant that the seller would often be asked to install the card. Not surprisingly, SIM card sellers were fewer; but even so, the number was remarkable. At one point in 2009, Sebastian said, Vodafone had 70,000 retailers selling recharge coupons and 40,000 activating SIM cards in his region alone in Tamil Nadu state. At an all-India level, Vodafone had 600,000 ‘points of presence’ in 2007, and 1.2 million by 2010.
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For the customer, the
transaction of buying a SIM card disguised the complicated procedures that lay behind simplicity. Tens of thousands of dealers had to be trained to sell and install SIM cards. A customer who already owned a phone and wanted to sign up for Airtel service went to a dealer displaying the Magic logo and bought a Magic SIM card which the dealer inserted into the phone. To activate the phone, the dealer sent the unique numerical details of the SIM card to the Magic network by SMS, and the customer had a connection. To the uninitiated, the procedure seemed difficult, though it took only a few experiments with phones to learn how to change SIM cards confidently. Nevertheless, it took thousands of hours of training to bring tens of thousands of distributors, travelling salespersons and small shopkeepers to a basic level of confidence where they were able to do more for customers than say,
‘Yeh bahut cheap hai’
.
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While Bharti Airtel was
focussing its efforts on promoting the pre-paid SIM revolution, the Ambani family’s Reliance and Tata Teleservices, both of which had acquired landline licences—‘basic service’ licences, as they were called—at low rates, sent the licensees of mobile phones into a frenzy by offering clients a mobile service at a landline rate in 2001. This was the ‘loaf of bread’ cordless phone referred to in
Chapter 2
. The companies supplied what was intended to be an old-fashioned, wire-connected telephone to an individual’s household or business; but the companies were permitted to provide the final hook-up from local base stations to individual premises by wireless, using the distinctive CDMA technology, not by copper wire. They gave their subscribers a cordless, ‘loaf of bread’ phone which, in theory, was intended to be used within the confines of a home or office, but in practice gave customers mobility within the localities covered by Reliance or Tata transmission towers.
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The effect was spectacular. By 2004, there were 48 million connections supplied in this way, and they already outnumbered the 41 million phones connected by genuine, copper-wire-connected landlines. A year later, the Wireless in Local Loop (Fixed) connections, as the cunning new option was called, had almost doubled to 86 million, while the number of conventional landlines remained at 41 million. (In addition, genuine mobile-phone numbers by 2006 reached 90 million).
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The Cellular Operators Association of India (COAI), bitter rivals of the Reliance and Tata companies, bemoaned ‘the sickness of the industry which is facing unequal and illegal competition’ likely to cost honest operators ‘around Rs 18,400 crores (about US $3.7 billion) in losses’ over the twenty years of their licences.
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The Cellular Operators correctly concluded that the Government of India had decided ‘that nothing should be allowed to stand in the way of pursuing the objective of increasing tele-density in the country’ and that the great Ambani and Tata operations were to be the beneficiaries.
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Eventually, in 2003 the Government of India did what the Cellular Operators had deplored: created a Universal Access Service Licence (UASL) which legalised the infringing Tata and Reliance businesses on payment of additional fees.
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