Aircel expAircel is in an expansion overdrive. Can it emerge as a pan India mobile service company of substance?
For the last few weeks, India’s cricket captain and youth icon Mahendra Singh Dhoni has been extolling the virtues of Aircel mobile services on television, billboards and newspapers across the country. If media planners are to be believed, in the last few weeks, ever since it launched in Delhi, the mobile services company has forked out over Rs 35 crore to newspapers, magazines and television channels to promote its products.
The company says that Dhoni’s brand image fits in well with what Aircel stands for simplicity and the ‘boy next door’ image which underlines consumer trust. The company feels there is no better way to connect with customers in India than cricket. It has sponsored the Chennai Super Kings team in the Indian Premier League and has now taken on board Dhoni as the brand ambassador.
Dhoni according to the company was chosen very carefully. Because he is like a common user of mobile services and reflects unpretentious values in many ways, besides being the best symbol of modern emerging India says, the CEO of Maxis Communications of Malaysia, which owns 74 per cent of Aircel.
At the moment, the trick seems to be working. Media planners agree that the advertising blitz with Dhoni has worked. The recall value of the advertising to its intended users has gone up significantly, despite the fact that competitors like Vodafone and Airtel have spend nearly equal amounts on their brand with the IPL season in full swing now.
But will Dhoni be able to catapult Aircel into a pan-India mobile service company of substance? After all, in 10 years of its launch, Aircel has remained a relatively small player which depends for over 57 per cent of its subscribers on just one state Tamil Nadu (including Chennai). With 18 million subscribers and a 6.41 per cent share (without including Reliance Communication) of the GSM mobile market, it is way behind big players like Bharti Airtel, Vodafone, BSNL and Idea Cellular in the pecking order.
Aircel, on its part, is on overdrive these days. The company in the last few weeks has rolled out services in Delhi and Mumbai as well as Uttar Pradesh. It plans to roll out in the whole of Maharashtra soon and hopes to hit the 30-million subscriber mark by the end of the year. By that time, Aircel will be present in 17 circles across the country. And it means serious business. It has committed almost $2 billion over the next 18 months to augment its network capacity. Its target is double-digit market share in the next one or two years.
Maxis has invested in India and Indonesia because it estimates that in the next five years, over half a billion phone connections will be added in these two geographies.
But how will Aircel catch up with far bigger rivals in India? Its market share is a quarter of market leader Bharti Airtel (32.5 per cent) and half of its nearest rival, Idea Cellular (14.92 per cent). Worse, in key markets like Delhi and Mumbai, where it recently launched, it will be the sixth or seventh mobile service operator. At least one of these markets, Delhi, is known to be saturated mobile penetration has hit 100 per cent. Aircel does not have a unique selling proposition.
Aircel, of course, is aware of some of the challenges. But it does not believe it doesn’t have a USP. Their fresh networks, simplified tariff plans, refreshing value additions and customer services are a powerful package in a market suffering from a lot of sameness.