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A $100 billion brand

Posted in The Technology Ecosystem by Manas Ganguly on April 30, 2009


One of my favourite one liners about internet, technology and Google is “There is Internet and there is Google!”. One of the most reverred tech companies Google became the first $100 billion brand in terms of Brand value (Millard Brown Brandz Top 100 most valuable 2009). A $100 billion tag is greater than most and many African, South American and Asian countries. Google finds itself to be a case study under Naseem Nicholas Taleb in his book Black Swan. Many analysts and thinkers are wary of the influence that Google holds over the internet often questioning “how much is our digital life is personal anyway (in the shadows of Omnipotent and Omnipresent Google)?”

In an year, where the overall value of the the top 100 brands had grown by 2% Google grew 16%. It’s worth is 25% more than the worth of its second competitor, Microsoft! Coke,McDonalds, IBM, Apple, China Mobile, General Electric, Vodafone and Marlboro complete the top 10 list. This is the third year in a year when Goolge has secured the Tops in Millard Brown’s Brandz 100!


Technology companies make the bulk of the the top 10, with Google (no 1), Microsoft (no 2), IBM (no 4), Apple (no 6), China Mobile (no 7) and Vodafone (no 9)! Handset manufacturer Nokia slips out of the top 10 with Vodafone replacing it as the most valauble European brand. Blackberry has seen a fantastic 100% jump in its brand value over the year.

It has been a good year for fast-food, cigarette and alcohol brands, as consumers suffering from so-called “recession depression” appear to have sought quick pick-me-ups.
McDonald’s recorded a 34 per cent increase in brand value, year on year, followed by Marlboro (33%), Budweiser (23%) and Johnnie Walker (42%) The most valuable category was mobile telephone operators; its value grew 28 per cent year on year. This was followed by soft drinks and coffee.

Millward Brown chief executive Joanna Seddon said: “In the current environment, brand has become even more important because it can help to sustain companies in tough times. “Those who continue to invest in their brand will be better positioned for business growth as the economic situation starts to improve than those who have cut spend. The recession does not always harm individual brands as much as it does faceless corporations,” she added.

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Is India ready for MVNOs?

Posted in Industry updates, Value added services and applications by Manas Ganguly on April 30, 2009


This is the second post on the series: The advent of MVNOs and discusses the MVNO environs in India!


A few months back, Sunil Bharti Mittal (CMD, Bharti – Airtel) went on record saying that the MVNO model will not find many takers in India (read report). The idea was that with the kinds of tarriffs prevalent in India, MVNOs will not be able to sustain business and be profitable. The fact that Virgin Mobile’s foray into MVNO platform has not been as hugely successful bears this statement for the time-being. But in a long term basis, can MVNOs be ruled out of the country? Diamond, a global management consulting firm has some interesting pointers in terms of emergence of the MVNO business models in India.
1. The threshold mobile penetration levels (for the emergence of MVNOs) in these markets are around 40%! –> Markets typically display a level of mobile penetration above 40% at the time of launch of the first MVNO.
2. Higher levels of industry wide consolidations favor the launch of MVNOs.
3. Less competitive markets (high levels of dissatisfaction amongst consumers) favor MVNOs (because they cater to new customers and innovative solutions).

A study of 16 countries where MVNOs have been operating for a few years now, conducted by

India with its fastest growing telecom subscribers status is typically a mash of various degrees of penetration. On one end, the A category circles have 70 – 80% penetration ratios and on the other end, C category circles are at 15 – 20% penetration status. Thus India is to be seen a collection of 23 separate markets instead of a single homogenous market when assessing the opportunity for MVNOs. The Cat A and B circles are over ripe for MVNOs and there are states, where the MVNO business would not be as effective given low penetration levels. Also the tariffs are getting rapidly commoditized and if its were not for the consolidation, these tariff would be close to unprofitable! Number portability could rapidly increase churn in the eco-system, unsettling the top rug high ARPU consumer bases with the existing operators.

Within these set of circumstances, there may exist an opportunity to serve users better or serve a high profit niche segment. With the penetration levels at 32% nationally and tariffs touching lows, the MVNO route may be a key differentiator and an access to higher premiums. One needs to be define MVNO at this time. A re-selling, re-branded plain vanilla will not be attractive to users. In the case of Virgin, it has done some excellent work in associating itself with a category of customers. However, its proposition is based on cost which by itself is not the best way to differentiate especially if you are re-selling airtime.

Thus it is important, that the MVNA and MVNE route is taken to differentiate oneself in this market! Healthcare sector is one lucrative idea for MVNA/E, so is department of posts and telegraph, railways, banking etc. There is a need and necessity for including this diversity into the existing eco system. This would constitute differentiated service to consumers for which they would be ready to pay premiums. A focused attempt centered on the metros and high penetration areas can also keep costs under control and if the collaboration within the players in the eco system is good, can lead to high profit businesses.

Should we reconsider the model once more, Mr Mittal?

The third part of The advent of MVNOs will deal with the legal challenges of establishing this business in India.




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