Rcom & Google: A Partnership Worth Watching

We recently heard of a strategic marketing alliance between an international search engine giant, Google and an India based telecom operator, Reliance Communications (RCom) in India. What would be in store for Google and Android with this new marketing deal? Certainly, it wouldn't be a game changer for either company but it would surely help them enhance their subscriber base and help them build their brands.

In India, the number of mobile subscribers has crossed 800 mn and it is an out and out volume driven market. The subscribers are also driving smartphones deluge. It is imperative for the telecom companies to leverage this opportunity. But a major inhibitor is the consumers' usage behavior, who are yet to grab on to the usage of data services.

Therefore organizations need an ideal strategy to leverage on proliferation of smartphones, 3G availability, and the next big wave in telecom services, 'data'. RCom would benefit immensely from the brand value associated with Google and Android. For any organization, branding plays a significant role; via this deal, RCom can enhance its current image as a much sought after network by the premium users. Last year also, Reliance launched 2 Android based tablets. Reliance will now be able to target new customers of Samsung, LG, Sony, HTC, etc, which are major handset manufacturers of Android based smartphones.

This deal would be one of the initial moves to leverage 3G. Until now, none of the telecom operators have come up with innovative tariffs to woo 3G customers and drive 3G adoptions in India. RCom had paid `5,864.29 crore to bag 3G spectrum in 13 circles namely Assam, Odisha, Delhi, Himachal Pradesh, Jammu & Kashmir, Kanpur, Kolkata, MP, Mumbai, North East, Punjab, Rajasthan, and West Bengal. It currently provides up to 28 Mbps per second data speed with its MIMO technology in India.

As per the partnership, RCom would market Android mobile operating system and Google mobile services. RCom would offer free 1 GB usage per month 3G plan to all Android device users. Reliance would offer customer care services, carrier billing, exclusive apps, and content in addition to the Android experience zone at Reliance retail outlets across the country.

Sanjay Behl, group head, brand and marketing, Reliance Communications says, “In line with the rapid growth of smartphones in the country, Reliance has collaborated with Google to catapult the change by providing compelling new experience to device users in terms of speed, coverage, and app ecosystem across segments. Our collaboration with Google is set to bring in many novelties and unique features for device users on our superior network, complementing the innovation of Android powered services and devices.”

This deal conveys that Google is attempting to gain a dominant position for its Android operating system (Android has more customers internationally) in India where Symbian OS are predominant for quite some time.

Jaideep Ghosh, partner, KPMG Advisory points out, “The partnership would have a moderate impact for both Reliance and Google as there is a limited addressable market of smartphone and 3G users in India. The Indian market can expect a considerable increase in Android OS based smartphones in India.”

The marketing activities would include above the line/below the line activities, developing co-branded mobile applications for Android smartphones, and marketing campaigns promoting the Google mobile services. Reliance Communications shall continue to work on Android launches and promotional campaigns going forward in the next 2 years, said a release.