Sumita Vaid

Capital wins LG's Rs 15-20 crore CDMA handsets business

Agencies that also ran for the business were Lowe, McCann-Erickson, Leo Burnett, Rediffusion DY&R and TBWAAnthem

It was a hotly contested pitch. The size of the business was unavoidably tempting, and it had practically all the top ad agencies in Delhi gunning for it. The target: LG's Code Division Multiple Access (CDMA)-enabled handsets business.

The participating agencies included Lowe, McCann-Erickson, Leo Burnett, Rediffusion DY&R, TBWAAnthem and Capital Advertising. These agencies were asked to make a strategy-cum-creative presentation for the Rs 15-20-crore business. As it turned out, Capital won the business. For the records, Mudra Communications has recently won Samsung's Rs 25-crore CDMA business.

Post this development, LG Electronics' products are aligned in the following manner. Lowe has all consumer durables (including air-conditioners and televisions) as well as the corporate business and IT products. Capital has the home appliances business, which includes washing machines, vacuum cleaners, refrigerators, microwaves and now CDMA-enabled handsets.

While shortlisting the agencies, one of the criterions was that the agency should have prior experience in the "telecom space" or in "mobile telephony". In addition to that, agencies were expected to demonstrate "a good understanding of the market". "We did have the requisite experience since we launched Spice Telecom and we are currently handling the Escotel business. Besides that what was also critical was our ability to deliver the intangibles. We brought to the table our sheer passion and enthusiasm," says an excited Sunil Sachdeva, director, Capital Advertising.

However, it seems the launch plans of LG's CDMA-handsets are dependent on Reliance Infocomm's launch of its CDMA service. The countrywide soft launch of CDMA telecom service is scheduled for December 28, 2002. Reliance Infocomm, after all, is slated to be the largest CDMA player. Though CDMA phones are not used commonly as yet in India (most telephony service providers are using GSM), telecom industry experts expect the demand for CDMA cellular phones to explode to over one million a year within the next three years.

Is the Indian market ripe for CDMA? In one of his press interviews earlier this year, Jeff Jacobs, president, global development, Qualcomm, (which has pioneered the CDMA technology), had said, "India today has in total five million mobile users - which is not too high a figure. India has a 300-million strong middle-class where the average income as per our estimate is at least $1,200 per annum. It is this audience that will drive CDMA in India and we will be targeting them for our business." He also sees a bigger growth rate for CDMA vis-a-vis mobile services.

In the mean time, Capital has begun work on the multimedia campaign, which will break simultaneous to the launch. Internationally, LG has 24 CDMA handsets; it is not known which of these will be launched in India. Company officials are also tight-lipped about the pricing strategy. One thing is for sure. As Sachdeva points out, "The products are going to be very exciting."

What remains to be seen is whether these products can excite the imagination of the discerning Indian consumer. © 2002 agencyfaqs!