Vodafone Idea's game plan to bring back users | Economic Times

Mumbai: Vodafone Idea (Vi) is on a branding blitzkrieg, likely earmarking around Rs 800 crore for this fiscal year, as it pulls out all stops to first arrest the rapid erosion in its subscriber base and then starts adding users which will hold the key to its return to stability.Besides a co-presenting sponsorship deal with Star India for the Indian Premier League (IPL), the telco has also lined up an exhaustive campaign to ensure its new brand identity penetrates across urban and rural regions in a bid to lure more customers, people familiar with the matter said. 78159074They added that Vodafone Idea – which recently rebranded itself to Vi reflect the completion of the merger – may trump Reliance Jio to become the largest telecom advertiser this fiscal year through March 2021. ET has learnt that market leader Jio is likely to spend Rs 400-450 crore on IPL alone, and another Rs 120-Rs 150 crore on other brand initiatives. Competitor Bharti Airtel, which had reduced its ad and branding spending to Rs 180-Rs 220 crore a year between 2016-2018, is expected to spend around Rs 300 crore this year, similar to the 2019 levels. "Vi is expected to spend between Rs 350-400 crore on branding and promotions between September and March 31. This includes a Rs 130 crore spend on IPL as co-presenting sponsor," said a person aware of the company's efforts to gain customers. The telco is also likely to spend an additional Rs 300-400 crore on BTL activation, mainly, signages across the dealer network. BTL refers to below the line marketing, which is heavily dependent on non-traditional mediums, targeting specific group of customers. In 2019, cash-strapped VIL wasn’t a sponsor of the IPL as part of a significantly curtailed marketing expenditure, which industry experts pegged to be around Rs 150-180 crore.“The overall integration drove synergy and made us more cost efficient. While some of that holds for brand integration too, the core strategy for the unified brand was also to help us not only carry forward the legacy of our two loved brands but also to create a new dynamic edge and to be relevant for today and tomorrow,” said a VIL spokesperson. The company said it does not disclose its advertising spends. Bharti Airtel and Jio did not respond to ET’s queries.The telco has swung into action to revive itself in the Indian telecom market since the September 4 Supreme Court order which gave telcos 10 years to pay off their adjusted gross revenue (AGR) dues. Since the order, the telco has announced a Rs25,000-crore fund raising initiative through a mix of debt and equity, rebranded itself and kicked off a marketing campaign, which includes joining the IPL bandwagon.“Capex is a function of fund raise, so this (branding) is the right strategy at this time,” said Rajiv Sharma, head of research at SBI Caps. “Branding exercise is often underestimated and this one time spend will help VIL. The company has lost profitable customers and this will give immediate results and those subscribers who are on the fence and about to exit may think again. The telco may see its gross additions go up.”The telco's branding exercise across platforms comes at a time when its user base plunged to under 280 million at June end, from 408 million at the time of merger in 2018. Its revenue market share is just over 23% compared with Jio’s nearly 42% (around 400 million users) and Bharti Airtel’s nearly 35% (over 280 million subscribers). Vi’s ARPU of Rs 114 also lags Airtel’s Rs157 and Jio's Rs 140. A strong brand identity may help Vi lock in high-paying customers and go up the charts on both RMS and ARPU, say analysts."Vi will require a concerted burst of Rs 400-500 crore to really get noticed. That is the bare minimum in ATL (above the line). The Vodafone pug did that, so did the Zoo-Zoos. The Vi advertising will have to deliver to those standards, not an easy task for sure,” said Sandeep Goyal, veteran ad man and founder of Mogae Media. ATL refers to advertising targeting a wider audience, for example TV, radio and billboards.Brand experts say VIL's strategy of using all mediums to brand itself is likely to work for its benefit. "VIL will give good competition to Jio and Airtel. Now the telco has gone into focusing on consumers after initial focus on network and tariffs. It has to be treated like FMCS (fast moving customer service). Recognition and recall is important and if the message is powerful and medium is appropriate, then brand recall can happen in two months," said Jagdeep Kapoor, managing director, Samsika Marketing Consultants.Talking about the latest Vi campaign, Shekhar Banerjee, Chief Client Officer and Head - West at Wavemaker India, VIL's media buying agency, said that if someone had asked six months back to plan a launch of this scale working remotely from home, he would have called that person “crazy”."We had to question the basic marketing 101 ground rules to shape this launch. The task in hand was 100% of India should know Vi in one day…I would say our job is not even 10% done. People know the new brand. Now our focus is to establish what we stand for and address the complete consumer journey,” he said.