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September 26, 2007

Vodafone Launches Brand Transition Campaign in India; May Trigger a Price War

By Prabhala Ranga Sai, TMCnet Contributing Editor

Vodafone’s (News - Alert) new advertising campaign in India carried on with the same popular pug that has become a brand ambassador for the Hutch. ‘Where ever you go, our network follows,’ was the previous slogan with the pug following the child wherever he goes. Now, with Hutchison Essar becoming part of the Vodafone Group, the new campaign has already started with Vodafone Essar earmarking INR 2.5 billion ( approx $62.5 million) on the transition from Hutch to Vodafone. The main message of the brand transition exercise: The new Vodafone is the same old Hutch. In the advertisement, the pug sees a new home when it returns after an outing and feels the change is better. The new catch phrase will be ‘Make the most of now.’

While the brand campaign has been addressing the transformation, the Company, on the other hand is swiftly preparing for a price war in the Indian telecom space. Indeed, it is preparing to provide mobile handsets to new subscribers at ultra-cheap prices, ranging from about $19 to$25.   
Vodafone Essar plans launch cheap cell phones in India under the Vodafone brand, and also co-branded handsets sourced from major global vendors. By bringing in millions of low-cost handsets from across the globe into India, Vodafone Essar wants to distribute bundled handsets through its existing 400,000 distribution outlets. By flooding the market with its low-cost handsets, Vodafone will also become a mass mobile phone brand like Nokia, Samsung, Motorola, and Sony Ericsson (News - Alert) in addition to continuing as telecom services provider.
Previously, similar handset-driven expansion strategies to grow subscriber bases were adopted by CDMA players, like RCOM and Tata Teleservices. Vodafone is the first GSM operator to follow suit.
PR Sai is a contributor to TMCnet. To see more of his articles, please visit his columnist page.
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