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Does VAS act as key differentiator for telecom companies
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One guesses Indian telecom companies have never heard of an intellectual statement and can't believe that a customer is a customer until he's whipped dry of his sensibilities and patience with unending advertisements trying to sell mostly Value Added Services (VAS).

VAS includes features like mobile broadband, mobile television, online gaming, video streaming, full track downloading and video telephony.

From the Saif Ali Khan-Kareena duet on promoting the usage of Airtel's 'Hello Tune' to Abhishek Bachchan's 'Mobile Governance' campaign, it is astonishing to see telecom companies promoting VAS by wasting away crore of money in these VAS services.

According to the AdEx reports, the telecom advertising spending from April-December 2008 had increased by a 92 per cent in comparison to the same period last year. Only a shocking low of 1 per cent of the total ad expense has been utilised for building a brand image.

But why this low focus on building a brand through advertisements? Are VAS such a huge revenue earner for telecom firms? Ramanuj Shastri, national creative director, Rediffusion Y&R, says, "The communication strategy of Airtel is about how can we keep the end customers excited about us; and thus we talk about Voice SMS or even for that matter about calling to set a hello tune."

But that is speaking thematically. What about flat numbers? Jaideep Ghosh, director, KPMG Advisory Services, says, "VAS only contributes approximately 7-8 per cent of the total wireless telecom revenues for Indian operators."

The screaming question is, do these VAS – and in fact even age old hackneyed concepts like group plans etc., really act as key differentiators in a market where the duck ain't ready to quack?

"Group plans, call at Re 1, and all such factors have become hygiene factors for the end consumers of today. So, why waste the time of your audience in telling that you too offer that?" voices Nikhil Rao, creative director, Lowe, the ad agency for Idea Cellular.

Anil Sardana, managing director, Tata Teleservices justifies his company's move away from the standard VAS advertising bandwagon, "VAS services are consumed by existing customers, so it would make more sense to communicate about such offering to the existing customer base through automated calls, SMS, monthly bills, etc. rather than have television commercial about it."

Prasad Narshiman, chief marketing officer, Virgin Mobile agrees, "Tactical communication helps generate awareness about the product offerings and hence fuels momentum in terms of customer acquisition."

As telecom service providers are offering quite a similar product or service, a mobile call, it is imperative for them to have some key differentiators in their communication for the end consumer. And these differentiators should also logically include brand values.

The lord of the core competence theory, Gary Hamel, bespoke of only sustainable competencies that 'cannot be replicated over the short term by competitors'.

Taking a leaf out of the Nokia marketing manual, have you ever seen the world's largest player in the handset industry advertise a handset because it makes a good call? Or because it has a T9 dictionary? Or because it has a colour screen?

If you think we're breaking on through to the other side finally, that's exactly what many players in the telecom service segment seem to be unbelievably forgetting.

The most respected Journal of Marketing Research documents how, in symbiotic industries, where all brands are well known, one company's advertising actually results in competitors' sales increasing.

Also, it may not be a surprise then that after seeing the Airtel commercial for Voice SMS, a Vodafone or for that matter a customer of any other service provider would have subscribed for a similar service from his service provider.

At a time when telecom penetration in India still stands at a modest 30 per cent, there is a lot of scope for these companies to develop advertising for new customers and earning pounds rather than simply attempting to fortify current customers to earn pennies.

S S Sirohi, deputy director general, VAS, Bharat Sanchar Nigam Ltd (BSNL), has a different tale to the story. He says, "In India, VAS is picking up and it has the potential to generate huge revenues. It will contribute about Rs 6,000 crore to total revenue from telecom operations by end of this year and this is likely to go up to Rs 18,000 crore by 2012."

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