<span class="htext1"> How marketing has changed:</span> For telcos, the focus has shifted from consolidation to expansion - Lloyd Mathias

Pricing was a key enabler to the unbridled growth in telecom. The challenge for marketers was not entirely tariff-led - they had to keep the brand growth and subscriber acquisition targets in mind

Telecom is one sector which really came of age in the past decade. Ten years ago, it was not even among the top 10 advertising categories - now it is in the top three. In the mid-'90s, tele-density in India was less than five per cent. That has reached 40 per cent. There are around 450 million mobile phone users (August 2009) and over 40 million fixed line users in the country today.

Ten years back, the telecom companies were focused on consolidation, now the focus has shifted to expansion. The industry became more competitive with more than two players per circle. The entry of CDMA operators (Reliance Mobile and Tata Indicom) and their aggressive pricing; the arrival of Virgin Mobile, Maxis' Aircel and Shyam-Sistema's MTS in the last two years; Tata Telecom's launch of its GSM service (Tata Docomo); Reliance's national GSM entry and the expected entry of over five new players - including UniNor (Unitech & Telenor's mobile service), Etisalat, Loop Telecom and Videocon's Datacom - in the next six months has changed the game. The handset market, too, grew phenomenally. Nokia led the way as the country's most respected brand, while other players like Motorola, Samsung, Sony Ericsson and LG, too, made their mark. These changes made the telecom industry the hotbed of marketing innovation.

When mobile phones came into the country in the mid '90s call rates were as high as Rs 32 per minute. This reduced rapidly over the past five years. There has been a huge increase in the affordability of both handsets and services. Today, India is the world's fastest growing telecom market with over 10 million subscribers being added every month. Distribution has played a crucial role. With SIM cards and recharge coupons being made available in every nook and corner, the spread of distribution of the telecom industry closely matches the FMCG category.

Affordability played a major role in helping the industry grow. In the '90s, a BSNL landline connection was available after you paid the security of Rs 5,000, but now the handset and connection both are available for as low as Rs 999.

With so much happening in the industry, marketing managers now focus on building the brand rather than creating awareness, which was the primary task in the late 90's. Marketing also had to keep pace with distribution - as telecom entered rural markets - communicating its benefits to consumers, a large percentage of whom were first-time users. It was a big challenge. Even more so was the fact that many consumers entering the category are not literate, making it imperative to use BTL.

Another trend is the advent of smartphones and PDAs or Blackberries and other sophisticated devices - catering to the evolved users. Those consumers, whose usage patterns vastly differ from the masses, need to be reached out to through more selective marketing stimulus such as digital media, direct mailers, multiplexes or cafes. Usage patterns evolved rapidly with consumers wanting much more from their mobile device. Till the late '90s most phones were just communication devices. Today, they have morphed into converged devices encompassing entertainment (mega pixel cameras, MP3 players, gaming, e-mail, internet surfing and GPS among other things). Therefore, segment wise marketing catering to different demographics and psychographics and usage profiles has had to be deployed.

Pricing was a key enabler to the unbridled growth in telecom. The challenge for marketers was not entirely tariff-led - they had to keep the brand growth and subscriber acquisition targets in mind. Another big change has been the focus on value added services (VAS), which have become a key differentiator among the service providers. What has not changed is the basics of merchandising, product display and clear communication of the value proposition. Store-level presence and the need to demonstrate the phone are still paramount. What is also important is that brands maintain one tone and one voice across various segments. With new players entering the Indian market and the industry getting increasingly competitive, marketing has had to become more objective-based and measurable. Marketing has moved from visibility and recall to building preference and driving consideration making it more accountable and aligned to the business.