What is the value of a brand? Brand can make a company rise to the crescendo from ashes. Brand building exercise is not an easy thing and it takes years for a company to build an image. If the brand has a recall value, you can take leverage of it by making your partner pay for it, if you are lending your name to his services. Let’s talk about some real life example. Recently, Virgin Mobile entered into alliance with Tata Teleservices Limited to provide telecom services in India. Though, this alliance is not an MVNO (Mobile Virtual Network Operator), Virgin Mobile operates in UK, Australia, South Africa, Canada and France as MVNO. A Mobile Virtual Network Operator (MVNO) is a mobile operator that does not own its own spectrum and usually does not have its own network infrastructure. Instead, MVNO’s have business arrangements with traditional mobile operators to buy minutes of use (MOU) for sale to their own customers.

Coming back to branding, Virgin Mobile, US operates on the network of Sprint which is the worst rated network in US. But when it comes to best Wireless Prepaid operator, Virgin Mobile USA is consistently reigning at the top since last two years. The kind of customer service which Virgin is providing in US must definitely be a benchmark because despite the fact that Sprints’ network on which it operates is worst, it is the most preferred operator in US. Branding, marketing and customer satisfaction plays an important role in all service industry be it telecom, courier, aviation or hotel. Virgin is known for its robust branding, marketing and simple customer friendly tariffs and the target segment of Virgin is always youths. The official portal of Virgin gives a lively feeling and has a very jazzy look. Everything which shows up good makes a lasting impression on the sub conscious mind of customer and has a recall value. Virgin and team have paid special emphasis to this thumb rule and the results are paying off.

Results are out! I hope Sir Branson is reading this and would be elated to know the kind of attraction Virgin mobile has gathered in just two weeks from launch. It may have taken years for others to establish a brand but Virgin Mobile, India is rolling since day one. The television advertisements are really attractive and the welcome offer of paying the customer for receiving calls is a big hit in India, although this is going to spoil the market. Let’s now get into some real stuff, if you want to know the impact of Virgin brand. I went to McDonald’s outlet with my friends last night and no sooner did the Virgin Mobile advertisement flashed on the screen than the service boys started gazing the idiot box. I would like to share their conversation with you – one of them asked his mate with anxiety, ye kaun sa mobile company hai (Which mobile company is this?). The other one replied, Arre tumhe nahi patta, ye foreign ka company hai jo India mein aaya hai aur ye log phone receive karme ka paisa dete hein (This is a foreign company which has launched in India and they are paying for receiving calls). Itna hi nahi agar tum 1 Ghanta phone par baat karega toh 6 rupaiya milega. (Not only this, if you talk an hour on phone, you will receive 6 Rs.). This sounds really impressive, isn’t it, infact smarter than pug of Hutch and Welcome tune of Airtel created by A R Rahman.

For the understanding of my readers who are from non telecom background, you would be eager to know the feasibility of business case when a company is paying for receiving calls. As a mandate from TRAI (Telecom Regulatory Authority of India), all telecom operators are required to pay 30 paisa per minute to another operator on whose network his calls are terminating. For example, if a Vodafone Subscriber is calling TATA subscriber, Vodafone would be required to pay 30 paisa for every minute called by his subscriber on TATA network. This is recognized as Inter connect receipt in the books of recipient and as access charges in the books of payer. It also implies that out of every 30 paisa per minute that Virgin is going to receive from an incoming call from another operator, it will share 10 paisa with the subscriber. This was the only thing which was not yet tried by the existing operators as everyone was apprehensive of cheap war that would spoil the market. We know that tariffs are lowest in India and the pay out to government is highest as compared to rest of the world. Therefore, a tariff where telecom operators are required to pay every 10 paisa for incoming calls to the subscribers will make telecom operators poorer. This will have an adverse impact on the margin of the already bleeding Indian telecom companies.

But what is worth noting is that we should learn from an entrepreneur like Sir Branson who is able to gather so much of attention despite being the last entrant in Indian Telecom sphere with his world class branding and marketing skills. The branding and marketing style of Virgin comes with a difference and the company justifies the punch line – ‘Think Hatke’.

(The views expressed are personal. For any queries, you may write at amitkhandelia@yahoo.co.in)

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