Indian Mobile Communications Industry’s Advertising expenditure

By Abhinash on September 15, 2011

India’s telecom industry is emerging as one of the biggest advertising spenders every year. In a country that has emerged as the biggest ad spenders in Asia-Pacific region, advertising has become a mainstream activity for most telecom operators. The industry witnessed an annual growth of 27% over May 2009 in advertising expenditure (Website, IndianTelevision).

The major players in the Indian mobile communications industry today are Airtel, Vodafone, Reliance and Idea Cellular. The new entrants in this industry are Aircel, Docomo, Virgin Mobile and MTS, among several others. Mobile communications industry is one of the top ten spenders of advertising in the country. The easy grant of licenses for entry in the sector led to a surge in the number of players in the market. By the year 2000, the competition had become extremely stiff between all players, which triggered a need for these providers to formulate new, innovative strategies in order to not only retain their market share, but also attract new customers. Today, most of the advertising strategies adopted by these companies revolve around the young generation, who form a primary component of the target market. Some of the other strategies used in this context include festival discounts, special season offers, celebrity endorsements, etc.

In the mobile communication industry, Bharti Airtel leads the pack followed by Vodafone and BSNL.  The total advertising spend by Airtel in 2009 was over Rs. 20 billion, whereas that of Vodafone was Rs. 17 billion. A slew of advertising strategies were followed by these giants in the past few years, such as celebrity endorsements, catchy taglines, aggressive promotional campaigns, etc. The effect of advertising shows on its sales record: Airtel added over 3.10 million users in November 2010 alone whereas Vodafone’s subscriber base increased to 121.6 million in November, a 2.4% rise over October 2010 (Economic Times, December 2010).

Business Standard estimates the figures to rise further as Airtel has undertaken a massive re-branding campaign.

For instance, the change in logo as well as ‘Airtel Anthem’ has led to increased popularity and brand awareness. Advertising has resulted in the following for the Indian Telecom Industry, just like any other:

  • Promoted not only major brands but also newcomers such as Aircel, MTS, Virgin Mobile, Tata Docomo, etc. The popularity and brand awareness of these companies has increased substantially. Extensive advertising has managed to educate consumers about the brands and their services
  • Increased sales and stimulated demand. While Docomo’s subscriber base was up by 1.8 million in the quarter ended June 2009, Aircel added 1.21 million subscribers in November 2010 alone (Economic Times, December 2010).
  • Increased market penetration and reducing fluctuations in sales performance. Advertising has benefited companies like Airtel and Vodafone who invest in the activity while the absence of advertising efforts have led to loss in market share of others. Airtel and Vodafone have managed to remain consistently high in their market share, Reliance’s market share has been on the downward swing due to lack of promotion and advertising efforts (Website,