The Jio effect

The entry of an aggressive challenger has revealed the weaknesses of India's top telecom brands

Reliance Jio's arrival exposes an uncomfortable truth about India's leading telecom players: Far from being strong brands, they are little more than commodities with names. The big guns really had no big response to Jio's entry into the market.

The companies' decision - a price drop - was both revealing and polarising. Revealing, because the price drop confirms the commoditisation of telecom, and exposes a brand confidence deficit. Polarising, because the price drop prompted this reaction from many subscribers: If the companies could afford it all along, haven't they been overcharging for years?

Other reactions, such as failure to complete competitors' calls and having the Cellular Operators Association of India wag a disapproving finger at the new entrant, did no good to brand stature either. These came across as bad-tempered ploys.

It is surprising to find the admired and awarded telecom brands so vulnerable in terms of brand strength. They've known for years that Jio was coming. Why weren't they better prepared? Were they lulled by the beguiling popularity of their TV advertising?

Maybe it shouldn't come as a surprise. Perhaps the chickens of customer neglect are finally coming home to roost. Completing a call in Delhi has been impossible for several months without multiple drops. Post-paid "platinum" customers have been treated no better than a SIM-switcher pre-paid customer for years. Many a subscriber has suffered the ignominy of an aggressive collection call - even with an immaculate payment record.

High data prices, poor call quality, threatening collection calls and mediocre customer care. All of that compounded by an exit barrier because important personal and government services are tied to your mobile number - this isn't a relationship. It sounds rather like being a hostage in a bad marriage.

So when a new face shows up on the scene, isn't it only natural that the new arrival turns a few heads? Doesn't the current provider's sudden niceness feel defensive: Too little, too late? A truly powerful brand rarely, if ever, responds to a new entrant with a price drop. It shouldn't matter how well-funded or intimidating the new competitor is. If the brand has a genuine relationship with its customers, buoyed by a strong reputation and a well-stocked reservoir of goodwill, it can withstand the entry of a competitor.

At the very least, a powerful brand should be able to lean on a well-stuffed brand equity cushion to absorb competitive pressure. Real brand equity doesn't come from communication alone, certainly not just TV ads.

The incumbents might well find their brand equity larders embarrassingly light when they need them to be at their most abundant. But all is not lost. The first step is to build an unassailable fence of genuine service, quality experience and reliable performance around the top 10-20 per cent of customers who provide 60-70 per cent of revenue. The second is to eschew the fool's gold of self-love TV advertising. The focus has to be customers, the unhappy spouses whom they've neglected for too long. Win them back with actions, not promises.

Brand power is not a birthright, it is bestowed by consumers in exchange for behaviour. It depends on what companies do, how uniquely they do it, how much they do and how they make people who matter feel. And, what about Jio?

Jio will find the same brand equity rules apply. While ads with people floating on balloons will get them attention, it is not enough. If they want to win someone else's current partner, it won't happen through the promise of a better marriage, but through the visible practice of one.
Bharat Bambawale
Brand consultant and founder Bharat Bambawale & Associates