Sunil Jain: Ad-vantage Anil

Anil Ambani's high-decibel campaign against the government seems to be working

If you’re wondering what prompted to launch a high-decibel campaign against the government, it is because we’ve seen over the years that, if conducted well, such campaigns work. In the late 1990s, for instance, when the government accused Suzuki Motor Company of foul play in Maruti Udyog Limited, Suzuki ran an ad campaign exposing each one of these claims. Though it took years for Suzuki to get full control of Maruti, things started turning around after this as the government lost the moral high ground.

Ambani learnt this the hard way when, in 2002, he and elder brother Mukesh (in the pre-split days) muscled their way into the mobile phone market despite having just a fixed line licence. Thanks to unfair rules, Reliance’s CDMA-mobile phone had a huge advantage — anyone who called it had to pay money while when you called an Airtel phone, the Airtel customer paid for the incoming call. This made the Reliance phone cheaper by half — and since it hadn’t paid any licence fee, it was even cheaper. The cellular mobile industry retaliated by blocking calls to/from Reliance; an ad blitz followed asking a simple question: Why was the telecom regulator being unfair to 11 million cellular mobile users by making them pay for their incoming calls while these were free for Reliance customers? And why was Reliance not asked to pay licence fee while their phone companies had to — and passed this on to them.

Within a few months, the regulator introduced Calling Party Pays which made incoming calls free for the cellular mobile users as well and Reliance was forced to pay a licence fee plus a penalty. Cellular tariffs crashed and the market boomed. As a result, Anil’s group which now owns the telephony part of the business has moved to cellular mobile. Almost to the day, you can trace the change in fortunes to that well-orchestrated ad campaign (as in the Ambani case, there was also a highly-paid legal campaign that ran in tandem) that, in its wake, also saw Telecom Minister Pramod Mahajan lose his job for blatantly favouring Reliance.

It’s hardly surprising then, that Anil is using similar tactics now. There are differences/similarities between the campaigns. The cellular one was done after the Supreme Court had ruled asking the telecom tribunal to re-look at the matter keeping in mind the specific allegations of unfair treatment; the Ambani blitz comes before the Supreme Court has heard the matter. Both targeted the government through proxies — cellular firms trained their guns on the telecom regulator and Ambani is focusing on Petroleum Minister Murli Deora.

It’s difficult to tell if the Ambani campaign has caught the popular imagination but, while talking of the national interest, the ads focus too much on brother Mukesh’s Reliance Industries Limited’s (RIL) profits and consequent losses to the government. For someone who is following the fight, this makes sense, but does it to others? The cellular industry, by way of example, has carried out a campaign (not through ads in newspapers) talking of a Rs 50,000 crore loss Telecom Minister A Raja has caused the exchequer (that’s much more than what Anil claims the petroleum ministry is helping skim off), but I haven’t seen any citizen protest.

The Ambani campaign does say the government’s largesse will hike power and fertiliser costs but not in the kind of detail you’d have liked. If RIL supplied the 40 mmscmd of gas both Anil and NTPC are in court for, this would be enough to supply electricity to 10-15 million families. An ad talking only of how the government was raising the electricity bill of 10-15 million families by 50 per cent would surely be more evocative? Right now, public perception is that the real fight is about which Ambani should pocket the money. The ads have done nothing to dispel this, though Anil Ambani officials privately claim they won’t pocket the money since the cheaper gas will lower power prices for everyone. It would help if this was stated upfront as a commitment.

For now though, with the government making noises about protecting NTPC’s interests — something it hasn’t done for the last five years — the campaign’s impact is visible. This and the fact that the government has given some kind of a reply to the charges against it are a welcome move towards transparency. If the government realises its actions — and not just in this case — are increasingly going to be exposed publicly, the ad campaign will have served its purpose. Irrespective of what the Supreme Court decides.

image
Business Standard
177 22
Business Standard

Sunil Jain: Ad-vantage Anil

Anil Ambani's high-decibel campaign against the government seems to be working

Sunil Jain  |  New Delhi 



If you’re wondering what prompted to launch a high-decibel campaign against the government, it is because we’ve seen over the years that, if conducted well, such campaigns work. In the late 1990s, for instance, when the government accused Suzuki Motor Company of foul play in Maruti Udyog Limited, Suzuki ran an ad campaign exposing each one of these claims. Though it took years for Suzuki to get full control of Maruti, things started turning around after this as the government lost the moral high ground.

Ambani learnt this the hard way when, in 2002, he and elder brother Mukesh (in the pre-split days) muscled their way into the mobile phone market despite having just a fixed line licence. Thanks to unfair rules, Reliance’s CDMA-mobile phone had a huge advantage — anyone who called it had to pay money while when you called an Airtel phone, the Airtel customer paid for the incoming call. This made the Reliance phone cheaper by half — and since it hadn’t paid any licence fee, it was even cheaper. The cellular mobile industry retaliated by blocking calls to/from Reliance; an ad blitz followed asking a simple question: Why was the telecom regulator being unfair to 11 million cellular mobile users by making them pay for their incoming calls while these were free for Reliance customers? And why was Reliance not asked to pay licence fee while their phone companies had to — and passed this on to them.

Within a few months, the regulator introduced Calling Party Pays which made incoming calls free for the cellular mobile users as well and Reliance was forced to pay a licence fee plus a penalty. Cellular tariffs crashed and the market boomed. As a result, Anil’s group which now owns the telephony part of the business has moved to cellular mobile. Almost to the day, you can trace the change in fortunes to that well-orchestrated ad campaign (as in the Ambani case, there was also a highly-paid legal campaign that ran in tandem) that, in its wake, also saw Telecom Minister Pramod Mahajan lose his job for blatantly favouring Reliance.

It’s hardly surprising then, that Anil is using similar tactics now. There are differences/similarities between the campaigns. The cellular one was done after the Supreme Court had ruled asking the telecom tribunal to re-look at the matter keeping in mind the specific allegations of unfair treatment; the Ambani blitz comes before the Supreme Court has heard the matter. Both targeted the government through proxies — cellular firms trained their guns on the telecom regulator and Ambani is focusing on Petroleum Minister Murli Deora.

It’s difficult to tell if the Ambani campaign has caught the popular imagination but, while talking of the national interest, the ads focus too much on brother Mukesh’s Reliance Industries Limited’s (RIL) profits and consequent losses to the government. For someone who is following the fight, this makes sense, but does it to others? The cellular industry, by way of example, has carried out a campaign (not through ads in newspapers) talking of a Rs 50,000 crore loss Telecom Minister A Raja has caused the exchequer (that’s much more than what Anil claims the petroleum ministry is helping skim off), but I haven’t seen any citizen protest.

The Ambani campaign does say the government’s largesse will hike power and fertiliser costs but not in the kind of detail you’d have liked. If RIL supplied the 40 mmscmd of gas both Anil and NTPC are in court for, this would be enough to supply electricity to 10-15 million families. An ad talking only of how the government was raising the electricity bill of 10-15 million families by 50 per cent would surely be more evocative? Right now, public perception is that the real fight is about which Ambani should pocket the money. The ads have done nothing to dispel this, though Anil Ambani officials privately claim they won’t pocket the money since the cheaper gas will lower power prices for everyone. It would help if this was stated upfront as a commitment.

For now though, with the government making noises about protecting NTPC’s interests — something it hasn’t done for the last five years — the campaign’s impact is visible. This and the fact that the government has given some kind of a reply to the charges against it are a welcome move towards transparency. If the government realises its actions — and not just in this case — are increasingly going to be exposed publicly, the ad campaign will have served its purpose. Irrespective of what the Supreme Court decides.

RECOMMENDED FOR YOU

Sunil Jain: Ad-vantage Anil

Anil Ambani's high-decibel campaign against the government seems to be working

If you’re wondering what prompted Anil Ambani to launch a high-decibel campaign against the government, it is because we’ve seen over the years that, if conducted well, such campaigns work. In the late 1990s, for instance, when the government accused Suzuki Motor Company of foul play in Maruti Udyog Limited, Suzuki ran an ad campaign exposing each one of these claims.

If you’re wondering what prompted to launch a high-decibel campaign against the government, it is because we’ve seen over the years that, if conducted well, such campaigns work. In the late 1990s, for instance, when the government accused Suzuki Motor Company of foul play in Maruti Udyog Limited, Suzuki ran an ad campaign exposing each one of these claims. Though it took years for Suzuki to get full control of Maruti, things started turning around after this as the government lost the moral high ground.

Ambani learnt this the hard way when, in 2002, he and elder brother Mukesh (in the pre-split days) muscled their way into the mobile phone market despite having just a fixed line licence. Thanks to unfair rules, Reliance’s CDMA-mobile phone had a huge advantage — anyone who called it had to pay money while when you called an Airtel phone, the Airtel customer paid for the incoming call. This made the Reliance phone cheaper by half — and since it hadn’t paid any licence fee, it was even cheaper. The cellular mobile industry retaliated by blocking calls to/from Reliance; an ad blitz followed asking a simple question: Why was the telecom regulator being unfair to 11 million cellular mobile users by making them pay for their incoming calls while these were free for Reliance customers? And why was Reliance not asked to pay licence fee while their phone companies had to — and passed this on to them.

Within a few months, the regulator introduced Calling Party Pays which made incoming calls free for the cellular mobile users as well and Reliance was forced to pay a licence fee plus a penalty. Cellular tariffs crashed and the market boomed. As a result, Anil’s group which now owns the telephony part of the business has moved to cellular mobile. Almost to the day, you can trace the change in fortunes to that well-orchestrated ad campaign (as in the Ambani case, there was also a highly-paid legal campaign that ran in tandem) that, in its wake, also saw Telecom Minister Pramod Mahajan lose his job for blatantly favouring Reliance.

It’s hardly surprising then, that Anil is using similar tactics now. There are differences/similarities between the campaigns. The cellular one was done after the Supreme Court had ruled asking the telecom tribunal to re-look at the matter keeping in mind the specific allegations of unfair treatment; the Ambani blitz comes before the Supreme Court has heard the matter. Both targeted the government through proxies — cellular firms trained their guns on the telecom regulator and Ambani is focusing on Petroleum Minister Murli Deora.

It’s difficult to tell if the Ambani campaign has caught the popular imagination but, while talking of the national interest, the ads focus too much on brother Mukesh’s Reliance Industries Limited’s (RIL) profits and consequent losses to the government. For someone who is following the fight, this makes sense, but does it to others? The cellular industry, by way of example, has carried out a campaign (not through ads in newspapers) talking of a Rs 50,000 crore loss Telecom Minister A Raja has caused the exchequer (that’s much more than what Anil claims the petroleum ministry is helping skim off), but I haven’t seen any citizen protest.

The Ambani campaign does say the government’s largesse will hike power and fertiliser costs but not in the kind of detail you’d have liked. If RIL supplied the 40 mmscmd of gas both Anil and NTPC are in court for, this would be enough to supply electricity to 10-15 million families. An ad talking only of how the government was raising the electricity bill of 10-15 million families by 50 per cent would surely be more evocative? Right now, public perception is that the real fight is about which Ambani should pocket the money. The ads have done nothing to dispel this, though Anil Ambani officials privately claim they won’t pocket the money since the cheaper gas will lower power prices for everyone. It would help if this was stated upfront as a commitment.

For now though, with the government making noises about protecting NTPC’s interests — something it hasn’t done for the last five years — the campaign’s impact is visible. This and the fact that the government has given some kind of a reply to the charges against it are a welcome move towards transparency. If the government realises its actions — and not just in this case — are increasingly going to be exposed publicly, the ad campaign will have served its purpose. Irrespective of what the Supreme Court decides.

image
Business Standard
177 22

Most Popular Columns

Widgets Magazine

More News

Latest columns

Widgets Magazine

EDITORIAL COMMENT

» More
Widgets Magazine

Upgrade To Premium Services

Welcome User

Business Standard is happy to inform you of the launch of "Business Standard Premium Services"

As a premium subscriber you get an across device unfettered access to a range of services which include:

  • Access Exclusive content - articles, features & opinion pieces
  • Weekly Industry/Genre specific newsletters - Choose multiple industries/genres
  • Access to 17 plus years of content archives
  • Set Stock price alerts for your portfolio and watch list and get them delivered to your e-mail box
  • End of day news alerts on 5 companies (via email)
  • NEW: Get seamless access to WSJ.com at a great price. No additional sign-up required.
 

Premium Services

In Partnership with

 

Dear Guest,

 

Welcome to the premium services of Business Standard brought to you courtesy FIS.
Kindly visit the Manage my subscription page to discover the benefits of this programme.

Enjoy Reading!
Team Business Standard