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Telecom Services V&D 100

Top10: 4 - Hutch: On The Consolidation Path

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Voice&Data Bureau
New Update

It was the year of consolidation for Hutchinson Essar. The
company acquired three circles of BPL Cellular and made Hutch a popular brand
across all circles. Hutch is now the fourth largest cellular service provider
and the third largest in the GSM area with over 15.36 mn subscribers.

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The company grew from 13 circles to 16 circles, thereby
covering 88% of the national mobile subscriber base. It generated revenue of Rs
6,837 crore, a growth of 57% y-o-y. The end of its half-decade old relationship
with the UK's leading service provider 'Orange' was also a major highlight
of the year. Hutch was using Orange brand in Mumbai circle only but both
companies had trouble relating to branding initiatives. This led to Orange suing
Hutch in the Delhi High Court for trademark violation. The former accused Hutch
of intentionally encroaching upon its intellectual property rights and creating
images that were entirely based on Orange's brand guidelines. Hutch used these
guidelines to market its own brand. After Orange's exit, Hutch entered the
Mumbai circle on its own.

HUTCH


Area of operation: Mobile
Services 

Address: Hutch
House, Peninsula Corporate Park, Ganpatrao Kadam Marg, Lower Parel, Mumbai
400013

Phone: +91-22-56661229

Fax: +91-22-56661241

These events followed the parent company, Hutchison
Telecommunication International (HTIL) selling its 19.3% stake to the Egyptian
service provider, Orascom, for $1.3 bn. This helped Orascom, which was a
dominant player in other SAARC countries, gain entry into India by securing 8%
stake in Hutch's India operations.

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The consolidation of the company's operations across the
country resulted in Hutch coming out with its new identity, as it changed its
logo. As part of its new branding exercise, Hutch got a new color-pink. The
company stood out in the in the advertising world with its 'boy and dog'
campaign. While everyone used film stars as brand ambassadors, Hutch made pug
its icon.

Hutch launched an array of value-added services last year.
Voice portal, which provides infotainment services, was made available in all
the nine major languages. Hutch also launched a number of data-based services
such as Hutch Mail, multiplayer gaming, Hindi language support, video tones, and
Hutch alerts.

HIGHLIGHTS

  • Acquired BPL's
    mobile operations

  • New identity with
    new logo

  • Exit of Orange from
    Mumbai circle

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The telecom major has stayed focused on being a pure-play
cellular service provider. It consistently expanded its footprint, working down
from lucrative markets to a steady progression towards national coverage.

The branding exercise was very much visible in events too.
The company sponsored 'The Hutch Cup', for the one-day international cricket
series between India and Pakistan in February 2006. Similarly, the 'Hutch
Delhi Half Marathon' was a unique platform to create local connect with the
city.  In all, the events provided
great visibility and recall for the brand.

'Infrastructure
sharing is good for capex hungry industry'

What according to
you are some highlights of Hutchison Essar's performance in FY 2005-06?

With the acquisition of three circles of BPL Mobile Cellular,
Hutchison Essar grew from 13 circles to 16 circles, thereby covering 88%
of the national mobile subscriber base from 71% earlier. The organic
growth in 13 circles has been at 75%, as compared to the industry growth
in these circles at 70%. Hutch has positioned itself as a “premium in
mass” brand. We attract all segments of customers with a network of
superior quality and expanding coverage, drive revenue through affordable
tariffs which promote usage, deliver superior value through innovative and
customer-friendly  value-added
services and supporting the customer with strong service across touch
points. This has resulted in a rising share of customers choosing Hutch as
the brand of mobile telephony and consistently having the highest ARPU per
subscriber in the country.

Deputy
Managing Director

Sandip Das

The telecom services
market in India has been extremely dynamic. As the market has evolved,
Hutchison Essar felt a need to refresh the brand to remain relevant in the
new environment. The new Hutch logo is the natural evolution of the Hutch
brand in India.

We stayed focused on
being a pure-play cellular service provider and constantly worked towards
building a differentiated business based on delivering a superior brand of
service. We consistently and carefully expanded our footprint working down
from lucrative markets to a steady progression towards national coverage.

Hutch launched two
major products-199 plan and 'Chota Recharge' for pre-paid. This has
redefined the value proposition of mobile telephony and has led to a rapid
market expansion.

We have launched
value-added services both in voice as well as in data segments. In voice
we launched caller tunes in which we were the first and only operator in
India who offered SMS based tune selection for a subscriber for his caller
tunes. In data based services, we launched unique 'Hutch Mail' service
that give secure access to corporate emails with attachments and corporate
address book across many phone models. We also introduced video tones,
multiplayer gaming and Hutch alerts.

Hutch has
experimented with the concept of 'outsourcing'. How has the company
benefited from it?

We have benefited from outsourcing initially in networking. We are
considering other areas as well to outsource.

What are your views
on infrastructure sharing? Are you also working on some business models
for it?

It is a good move for the industry and for optimization of resources
in an industry, which is very capex hungry.

Hutch is also
planning to opt for NLD license as well as ILD license. What's the
status on your long distance plan?

We have applied and are awaiting the license.
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Service delivery is the key for operators today. The
company launched 'My Hutch', a web based self service that allows customers
to manage their account wherever they are. It facilitates all transactions
online at Hutch Shops located across the country. The company also has mobile
shops that are connected via GPRS.  These
apart, Hutch's self service kiosks that provide anytime service are also
popular among its customers.

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