What compelled Bharti Airtel exit bulk SMS business?

Telecom leader Bharti Airtel’s exit from bulk SMS business has come as a big surprise. Even its competitors must have astonished by this move. For this exit, Bharti Airtel has cited “increasing customer convenience issues arising out pesky calls and SMS”.
Obviously, Airtel is getting a lot of applause for this ‘Customer Centric’ decision. However, a deeper analysis of this choice reveals the other (and may be much truer) picture of the sudden exit.

Let us first take a look at the market size of Bulk SMS business in India

At average 2 paisa per SMS and around 150 Million bulk SMS per day, it is a Rs. 100 Crore per annum business. So what Airtel ideally leaves out is Rs. 20-30 crore annual business and probably 5-10 crores of profit.

But still, why loose it?
The most important reason is the big damage it is causing to the Airtel brand.
Look on Twitter for example. Most of the tweets directed to @airtel_presence are about the complaints, especially about spam SMS. In fact in the last month, when most of the print media was scourging about unsolicited SMS, they belligerently targeted Tata Teleservices & Airtel.
Although the market leader, Airtel needs to be very cautious about its brand image. Consider this – Airtel has already gone international in a big way (operates in 19 countries), plus it is the highest bidder (13000 Crore) for 3G in India. Add to that the fast decreasing ARPU and increased competition (total 14 operators). Put in the IPTV, DTH, broadband sectors it is trying to lead in. So in this big pie of overall telecom business, 20-30 Crore is definitely a miniscule amount to vie for when that directly affects the reputation in a big way.
Moreover, had Airtel ‘really’ been concerned about customer grievances, they would have-

1. Also exited from telemarketing voice business
2. Taken direct customer friendly service initiatives and not introduced fees to talk to their customer care
3. Announced & implemented more stringent measures to curb spam & pesky calls from its network.

All in all, this is definitely NOT a ‘Customer centric’ initiative. This is a brilliant marketing move with a perfect timing. Sugar coating it as ‘Customer comes First’, Airtel just ‘Expressed itself’ smartly.