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An

INTRIM REPORT
On

Factors affecting the pre and post decision


of buying mobile and services by different users.

FOR THE PARTIAL FULFILLMENT OF


THE REQUIREMENT
OF
MASTER OF BUSINESS ADMINISTRATION

SUBMITTED BY

Piyush Asthana
MBA IV SEMESTER

GUIDED BY
Dr. P.R.Bhattacharyya

ICFAI BUSINESS SCHOOL


KOLKATA

2007-2009
CHAPTER-1
INTRODUCTION

This project is done in order to analyze all the factors affecting the customer’s decision made
before and after the purchase of mobile phone.
Mobile phones are incomplete product. An Incomplete product is a product that needs further
investment by customer in order to get the utility of a product. For example automobile they
require petrol, VCD players need video CD to give its core benefit to customers without these add
on an incomplete products is of no use to user .We can imagine an automobile without petrol, is
not even giving its core benefit, that is transportations, to its user and therefore mobile is also an
incomplete product because without service provider it is of no use. Therefore a complete buying
behavior cannot be studied by considering both aspects separately. A complete picture of factors
affecting buying decision can emerge only when pre and post decision of buying mobile set is
taken under consideration
The underlying problem in predicting customer choice resides much more in the fact that
purchasing decisions are made on the basis of many different criteria simultaneously, including
brand, quality, performance, price, features, and so on. This problem is further confounded in
service applications, where customers may consider intangible features and characteristics of the
market offerings for e.g., service quality, safety, and trust; interactions between service providers
and customers.
Thus, incorporating customer preferences and choices into day-to-day managerial decisions is
extremely important for today’s highly competitive environment, because their customers evaluate
them on more than one criterion. In such a scenario, it is worthwhile to find out the various aspects
of pre and post mobile phone and service purchase decision of various user groups.
Comparative research, simply put, is the act of comparing two or more things with a view to
discovering something about one or all of the things being compared. This technique is often
utilizes multiple disciplines in one study. When it comes to method, the majority agreement is that
there is no methodology peculiar to comparative research. The multidisciplinary approach is good
for the flexibility it offers, yet comparative programs do have a case to answer against the call that
their research lacks a “seamless whole”. There are certainly methods far more common than others
in comparative studies, however. Quantitative analysis is much more frequently perused than
qualitative, and this is seen in the majority of comparative studies can be use quantitative data.
Secondary analysis of quantitative data is relatively widespread in comparative research,
undoubtedly in part because of the cost of obtaining primary data for such large things as a
country’s policy environment. A typical method of comparing welfare state is to take balance their
levels of spending on social welfare. Comparative research is a methodology in the social sciences
that aims to make comparisons across different countries and cultures. A major problem in
comparative research is that the data sets in different countries may not use the same categories, or
define categories differently.

OBJECTIVES

1. To project is done in order to analyze all the factors affecting the customer’s decision made
before and after the purchase of mobile phone.

2. Find out the hidden information in purchase of handsets & cellular services.
CHAPTER-2
LITERATURE REVIEW
Definition of Cellular/Mobile phone

www.wikipedia defines cellular phone as:

The Cellular telephone (commonly "mobile phone" or "cell phone" or "handphone") is a long-
range, portable electronic device used for mobile communication. In addition to the standard
voice function of a telephone, current mobile phones can support many additional services such
as SMS for text messaging, email, packet switching for access to the Internet, and MMS for
sending and receiving photos and video. Most current mobile phones connect to a cellular
network of base stations (cell sites), which is in turn interconnected to the public switched
telephone network (PSTN) (the exception is satellite phones.Cellular telephone is also define as
a type of short-wave analog or digital telecommunication in which a subscriber has a wireless
connection from a mobile telephone to a relatively nearby transmitter. The transmitter's span of
coverage is called a cell. Generally, cellular telephone service is available in urban areas and
along major highways. As the cellular telephone user moves from one cell or area of coverage
to another, the telephone is effectively passed on to the local cell transmitter. A cellular
telephone is not to be confused with a cordless telephone (which is simply a phone with a very
short wireless connection to a local phone outlet). A newer service similar to cellular is personal
communications services (PCS). Much of the growth in Asia Pacific Wireless
Telecommunication Market is spurred by the growth in demand in countries like India and
China. India‘s mobile phone subscriber base is growing at a rate of 82.2%. China is the biggest
market in Asia Pacific with a subscriber base of 48% of the total subscribers in Asia Pacific.
Compared to that India’s share in Asia Pacific Mobile Phone market is 6.4%. Considering the
fact that India and China have almost comparable populations, India’s low mobile penetration
offers huge scope for growth.

Need for study

People learn about cellular phone from many sources, mainly from friends and families,
through advertisement and from their own experience. In the long-run, advertisement help
brands by making consumer less price sensitive and more loyal. Exposure of an ad is crucial to
be effective in changing consumer knowledge, attitude and behavior. And for the ad to be seen,
it must grab the attention of its target audience. ‘Ads originality’ as defined from Pietes,
Warlop and Wedel, (2002) were easier for customer to remember than ordinary ads by
increasing attention to it. This thus increased attention to the brand being advertised. However,
regardless of the content, ads for brand leaders are more successful due to the influence of the
brand (Simon, 1970). Ads for less popular brands may be less successful even though the
content may be good. However whether consumers like or dislike an ad does not necessarily
lead to brand acceptance or rejection. So, even though consumers may like the ad that they see,
it does not necessarily mean that they will go out and buy the brand advertised. Usually the
consumer uses their attitude towards the ad in brand choice equaled that of attitude towards the
brands. As a marketer I know that advertising messages are interpreted differently between
different genders and also between different groups of people

In building brand preferences, Alreck and Settle (1999) proposed six strategies:

1) Need association- the product/brand linked to need through repeated messages.


2) Mood associations- brands should be associated with good feelings through slogans,
songs.
3) Subconscious motivation-use of symbol to excite consumers’ subconscious motives.
4) Behavior modification-consumers are conditioned to buy the brand by controlling cues
and rewards.
5) Cognitive processing-penetrating perceptual and cognitive barriers to create favorable
attitudes towards the brand/product.
6) Model emulation- portraying idealized lifestyles for consumers to imitate.

Brand preference and product attribute

Attributes are the characteristic or features that an object may or may not have and includes
both intrinsic and extrinsic. Benefits are the positive outcomes that come from the attributes.
People seek products that have attributes that will solve their problems and fulfills their needs
Understanding why a consumer choose a product based upon its attributes helps marketers to
understand why some consumers have preferences for certain brands . In the Lancaster model
of consumer demand (1966, 1979), also referred to as the product attributes model, was used to
evaluate brand positioning. This model assumes that consumer choice is based on the
characteristics (or attributes) of a brand. Each product is a bundle of attributes and that choice is
based on maximizing utility/satisfaction from the attributes subject to budget constraints.
However there were two limitations of the model: (1) the model is static and deterministic and
(2) the model does not explain how the preferences for attributes were formed. Both tangible
and intangible attributes of a product are equally important in choosing a product or brand. It
was, found though, that the more attributes (non-negative) associated with a brand, the more
loyal the customer Romariuk and Sharp (2003) suggested that marketers should focus more on
how many attributes the brand should be associated with and not what attributes. However, this
study did not specify what sort of attributes marketers should associate the brand with; i.e.
whether they should be relevant or irrelevant attributes, tangible or intangible etc .This is
because it is important that consumer accurately lean about product attribute performances
since it would influence their interpretations of product performance by causing memory
encode and retrieval bias. Unfounded product attribute relationship beliefs can mislead them
into expecting something that is not there. Hence if products fall short of customer expectations,
then dissatisfaction would result. It was also found that through irrelevant, some attributes may
still be important in influencing consumer choice. Persistent preferences for product attribute
occurs when there is low ambiguity in the initial potential choice for salient attributes coupled
with experience, although those attributes maybe irrelevant (i.e. an attributes usually not
associated with favorable brand outcomes. According to Mason and Bequette perceptions on
product performance based on salient attributes are more important in influencing the consumer
purchase behavior than actual product attribute performances. For low-involvement products,
consumers have more objective view of the nature of the attributes (eg. food, cosmetics)
because they are constantly being advertised and promoted. We can say that consumer
evaluation of a product can be broken down into evaluation related to product (tangible or
physical attributes) and brand name (intangible attributes, or images added to the product due to
its brand names).However perception of product performance on the salient attributes are more
important than actual performance. The attributes that consumers expect in a product and how
positively or negatively they rate these attributes to help develop and promote a successful
product. Retailers need to be knowledgeable of the product attributes perceived as the most
important by each individual consumer group in order to build and maintain market share. It is
the consumer who determines which attributes matter to them. Different consumer groups place
different importance on different attributes. Thus the need for the study is justified because
most of the past researches are either done on either considering the handset or about the
service providers, which does not extract the complete and true picture of consumer buying
behavior of mobile phone.

The Global Cellular Mobile Industry:

The global mobile phone industry is based on many different manufacturers and operators. The
industry is based on advanced technology and many of the manufacturers are operating in
different industries, where they use their technological skills, distribution network, market
knowledge and brand name. Three large manufacturers of mobile phones are today dominating
the global mobile phone industry; Nokia, Eriksson and Motorola. In addition to these companies
there are many manufacturers that operate globally and locally.

Telecom Industry in India

History of Indian Telecommunications

Started in 1851 when the first operational land lines were laid by the government near Calcutta
(seat of British power). Telephone services were introduced in India in 1881. In 1883 telephone
services were merged with the postal system. Indian Radio Telegraph Company (IRT) was
formed in 1923. After independence in 1947, all the foreign telecommunication companies were
nationalized to form the Posts, Telephone and Telegraph (PTT), a monopoly run by the
government's Ministry of Communications. Telecom sector was considered as a strategic service
and the government considered it best to bring under state's control.
The first wind of reforms in telecommunications sector began to flow in 1980s when the private
sector was allowed in telecommunications equipment manufacturing. In 1985, Department of
Telecommunications (DOT) was established. It was an exclusive provider of domestic and long-
distance service that would be its own regulator (separate from the postal system). In 1986, two
wholly government-owned companies were created: the Videsh Sanchar Nigam Limited (VSNL)
for international telecommunications and Mahanagar Telephone Nigam Limited (MTNL) for
service in metropolitan areas. In 1990s, telecommunications sector benefited from the general
opening up of the economy. Also, examples of telecom revolution in many other countries,
which resulted in better quality of service and lower tariffs, led Indian policy makers to initiate a
change process finally resulting in opening up of telecom services sector for the private sector.
National Telecom Policy (NTP) 1994 was the first attempt to give a comprehensive roadmap for
the Indian telecommunications sector. In 1997, Telecom Regulatory Authority of India (TRAI)
was created. TRAI was formed to act as a regulator to facilitate the growth of the telecom sector.
New National Telecom Policy was adopted in 1999 and cellular services were also launched in
the same year. Telecommunication sector in India can be divided into two segments: Fixed
Service Provider (FSPs), and Cellular Services. Fixed line services consist of basic services,
national or domestic long distance and international long distance services. The state operators
(BSNL and MTNL), account for almost 90 per cent of revenues from basic services. Private
sector services are presently available in selective urban areas, and collectively account for less
than 5 per cent of subscriptions. However, private services focus on the business/corporate
sector, and offer reliable, high- end services, such as leased lines, ISDN, closed user group and
videoconferencing. Cellular services can be further divided into two categories: Global System
for Mobile Communications (GSM) and Code Division Multiple Access (CDMA). The GSM
sector is dominated by Airtel, Vodfone(Hutch), and Idea Cellular, while the CDMA sector is
dominated by Reliance and Tata Indicom. Opening up of international and domestic long
distance telephony services are the major growth drivers for cellular industry. Cellular operators
get substantial revenue from these services, and compensate them for reduction in tariffs on
airtime, which along with rental was the main source of revenue. The reduction in tariffs for
airtime, national long distance, international long distance, and handset prices has driven
demand.

Dynamics of Mobile Handset Market

180,000 1600000
160,000 1400000
Thousands of Units

140,000 1200000
Millions of Dollars

120,000
1000000
100,000
800000
80,000
600000
60,000
40,000 400000
20,000 200000
0 0
2003 2004 2005 2006 2007 2008 2009 2010 2011
Cellular Service

Overview
There are five private service operators in each area, and an incumbent state operator. Almost
80% of the cellular subscriber base belongs to the pre-paid segment. The DoT has allowed
cellular companies to buy rivals within the same operating circle provided their combined market
share did not exceed 67 per cent. Previously, they were only allowed to buy companies outside
their circle.

Growth Drivers

Opening up of international and domestic long distance telephony services are growth drivers in
the industry. Cellular operators now get substantial revenue from these services, and compensate
them for reduction in tariffs on air time, which along with rental was the main source of revenue.
The reduction in tariffs for airtime, national long distance, international long distance, and
handset prices has driven demand. The total number of telephone subscribers has reached 241.02
million at the end of August 2007 as compared to 232.87 million in July 2007. The overall tele-
density has increased to 21.20% in August 2007 as compared to 20.52% in July 2007.In the
wireless segment; 8.31 million subscribers have been added in August 2007 while 8.06 million
subscribers were added in July 2007. The total wireless subscribers (GSM, CDMA & WLL(F))
base reaches 201.29 million at the end of August 2007.The wire line segment subscriber base
stood at 39.73 million with a decrease of 0.16 million at the end of August 2007. Circle wise
wire line subscriber base of service providers is given at following chart..
INTRODUCTION
OF
Mobile Phone
Manufacturers
Company Profile

Nokia Corporation is a Finnish multinational communications corporation, headquartered in


Keilaniemi, Espoo, a city neighboring Finland's capital Helsinki established in 1865. Nokia is
focused on wireless and wired telecommunications, with 112,262 employees in 120 countries,
sales in more than 150 countries and global annual revenue of 51.1 billion Euros and operating
profit of 8.0 billion as of 2007. It is the world's largest manufacturer of mobile telephones: its
global device market share was about 38% in Q3 of 2008, down from 39% in Q3 2007 and down
from 40% sequentially. Nokia produces mobile phones for every major market segment and
protocol, including GSM, CDMA, and W-CDMA (UMTS). Nokia's subsidiary Nokia Siemens
Networks produces telecommunications network equipments, solutions and services. Nokia has
sites for research and development, manufacturing and sales in many continents throughout the
world. As of March 2008, Nokia had R&D centers in 10 countries and employed 30,415 people
in research and development, representing approximately 27% of Nokia’s total workforce. The
Nokia Research Center, founded in 1986, is Nokia's industrial research unit of about 800
researchers, engineers and scientists. It has sites in seven countries: Finland, Denmark, Germany,
China, Japan, United Kingdom and United States. Besides its NRCs, in 2001 Nokia founded (and
owns) INdT – Nokia Institute of Technology, a R&D institute located in Brazil. Nokia's
production facilities are located at Espoo, Oulu and Salo, Finland; Manaus, Brazil; Beijing,
Dongguan and Suzhou, China; Fleet, England; Komárom, Hungary; Chennai, India; Reynosa,
Mexico; Jucu, Romania and Masan, South Korea. Nokia's Design Department remains in Salo,
Finland.Nokia plays a very large role in the economy of Finland: it is by far the largest Finnish
company, accounting for about a third of the market capitalization of the Helsinki Stock
Exchange (OMX Helsinki) as of 2007; a unique situation for an industrialized country. It is an
important employer in Finland and several small companies have grown into large ones as
Nokia's subcontractors. Nokia increased Finland's GDP by more than 1.5% in 1999 alone. In
2004 Nokia's share of the Finland's GDP was 3.5% and accounted for almost a quarter of
Finland's exports in 2003. In 2006, Nokia generated revenue that for the first time exceeded the
state budget of Finland. Finns have ranked Nokia many times as the best Finnish brand and
employer. The Nokia brand,, valued
valued at $35.9 billion, is listed as the 5th most valuable global
brand in Interbrand/Business
Business Week’s Best Global Brands list of 2008 (1st non-US
non company). It
is the number one brand in Asia (as of 2007) and Europe (as of 2008), the 23rd most admirable
company worldwide in Fortune's
Fortune's World's Most Admired Companies list of 2008 (tied with
Exxon Mobil;; 2nd in Network Communications, 5th non-US
non US company), and is the world's 88th
largest company in Fortune
une Global 500 list of 2008, up from 119 of the previous year. As of
2008, AMR Research ranks Nokia's global supply chain number two in the world.

Motorola Inc. is an American,


American multinational, Fortune 100, telecommunications company based
in Schaumburg, Illinois.. It is a manufacturer of wireless telephone handsets, also designing and
selling wireless network infrastructure equipment such as cellular transmission base stations and
signal amplifiers. Motorola's home and broadcast
broadcast network products include set-top boxes, digital
video recorders,, and network equipment used to enable video broadcasting, computer telephony,
and high-definition television.. Its business and government customers consist
consi mainly of wireless
voice and broadband systems used to build private networks and public safety communications
systems. Motorola creates numerous products for use of the government, public safety officials,
business installments, and the general public. These products include cell phones, laptops,
computer processors, and radio communication devices. The Motorola RAZR line has sold over
120 million units bringing the company to the number two mobile phone slot in 2005.Enterprise
2005.
Mobility Solutions:: Headquarters, located in Schaumburg, IL,, comprises communications
offered to government and public safety sectors and enterprise mobility business. Motorola
develops analog and digital two-way
two way radio, voice and data communications products
pro and
systems, mobile computing, advanced data capture, wireless infrastructure and RFID solutions to
customers worldwide. Home & Networks Mobility:: Headquarters, located in Horsham, PA,
produces end-to-end
end systems that facilitate uninterrupted access to digital entertainment,
information and communications services via wired and wireless mediums. Motorola develops
digital video system solutions, interactive set-top
set top devices, voice and data modems for digital
subscriber line and cable networks, broadband access systems for cable and satellite television
operators, and also wire line carriers and wireless service providers. Mobile Devices:
Headquarters, located in Libertyville, IL,
IL, currently the least prosperous arm of the firm, designs
wireless handsets, but also licenses much of its intellectual properties. This includes cellular
c and
wireless systems and as well
ell as integrated applications and Bluetooth accessories. Motorola is
the No. 2 manufacturer of wireless handsets after global leader Nokia. After a pprevious
reorganization, its remaining operations have been focused in four business segments: connected
home solutions; government and enterprise mobility solutions; mobile devices; and networks.
The company generates nearly 60% of sales through the manufa
manufacture
cture and sales of wireless
handsets and related products.

Ericsson one of the largest Swedish companies, is a leading provider of telecommunication and
data communication systems, and related services covering a range of technologies, including
especially mobile networks.. Directly and through subsidiaries, it also has a major role in mobile
devices and cable TV and IPTV systems. Founded in 1876 as a telegraph equipment repair shop
by Lars Magnus Ericsson,, it was incorporated on August 18, 1918. Headquartered in Kista,
Stockholm Municipality,, since 2003, LM Ericsson is considered part of the so-called
so "Wireless
Valley".
". Since the mid 1990s, Ericsson's extensive presence in Stockholm helped transform the
capital into one of Europe's hubs of information technology (IT) research. Ericsson has offices
and operations in more than 150 countries, with more than 20000 staff in Sweden, and
significant presences also in, for example, China, the UK, the USA, Finland, Ireland, and Brazil.
In the early 20th century, Ericsson dominated the world market for manual telephone exchanges
but was late to introduce automatic equipment. The world's largest ever manual telephone
exchange, serving 60,000 lines, was installed by Ericsson in Moscow in 1916. Throughout the
1990s, Ericsson held a 35-40%
40% market share of installed cellular telephone systems. Like most of
the telecommunications industry, LM Ericsson suffered heavy losses after the
telecommunications crash in the early 2000s, and had to
to fire tens of thousands of staff worldwide
in an attempt to manage the financial situation, returning to profit by the mid 2000s.In 2001 the
handsets division formed of a joint venture with Sony called Sony Ericsson.
Ericsson LM Ericsson is now
a major provider of handset cores and an infrastructure supplier for all major wireless
technologies. It has played an important global role in modernizing existing copper lines to offer
broadband services and has actively grown a new line of business in the professional services
area. On 18 February 2008, it was announced that Aastra Technologies
nologies would acquire the
enterprise PBX division of Ericsson.
Ericsson

Siemens AG is Europe's largest engineering conglomerate and the largest electronics company in
the world. Siemens'' international headquarters are located in Berlin and Munich,
Munich Germany. The
company is a conglomerate of three main business sectors: Industry, Energy and Healthcare with
a total of 15 Divisions. Worldwide
Worldwide,, Siemens and its subsidiaries employ approximately
480,000[4] people in nearly 190 countries and reported global revenue of $ 110.82 billion as of
2008. Siemens AG is listed on the Frankfurt Stock Exchange,, and has been listed on the New
York Stock Exchange since March 12,
12 2001.Siemens was founded by Werner von Siemens on
12 October 1847.. Based on the telegraph, his invention used a needle to point to the sequence of
letters, instead of using Morse code.
code The company – then called Telegraphen
Telegraphen-Bauanstalt von
Siemens & Halske – opened its first workshop on October 12.In
.In 1848, the company built the first
long-distance
distance telegraph line in Europe; 500 km from Berlin to Frankfurt am Main.
Main In 1850 the
founder's younger brother, Sir William Siemens (born Carl Wilhelm Siemens),
Siemens started to
represent the company in London.
London. In the 1850s, the company was involved in building long
distance telegraph networks in Russia.. In 1855, a company branch headed by another brother,
Carl von Siemens, opened in St Petersburg,
Petersburg, Russia. In 1867, Siemens completed the monumental
Indo-European (Calcutta to London) telegraph line. In 1881, a Siemens AC Alternator driven by
a watermill was used to power the world's first electric street lighting in the town of Godalming,
United Kingdom. The company continued to grow and diversified into electric trains and light
bulbs.. In 1890, the founder retired
retired and left the company to his brother Carl and sons Arnold and
Wilhelm. Siemens & Halske (S&H) was incorporated in 1897. In 1907 Siemens had 34,324
employees and was the second-largest
second company in Germany by number of employees. In 1919,
S&H and two other companies jointly formed the Osram light bulb company. A Japanese
subsidiary
idiary was established in 1923.During
1923.During the 1920s and 1930s, S&H started to manufacture
radios, television sets, and electron microscopes.Siemens'
microscopes Siemens' six operational business areas before
2008 were: Automation & Control (Automation
( & Drives, Industrial Solutions & Services,
Services
Siemens Building Technologies),
Technologies Power (Power
Power Generation, Power Transmission &
Distribution), Transportation (Transportation Systems, Siemens VDO),
VDO Medical (Siemens
Medical Solutions),
), Information & Communication (Siemens
(Siemens Communications
Communications, Siemens IT
Solutions and Services),
), and Lighting (OSRAM
( GmbH, OSRAM Sylvania
Sylvania).The company is also
active in Financing (Siemens
Siemens Financial Services),
Services), Real Estate (Siemens Real Estate), Home
Appliances (BSH), Water Technologies (SWT), Computers (Fujitsu
(Fujitsu Siemens Computers
Computers), and
Business Services.

LG Group is a large South Korean conglomerate , that produces electronics,


electronics mobile phones, and
petrochemical products and operates subsidiaries like LG Electronics,, LG Telecom, Zenith
Electronics and LG Chem in over 80 countries. LG Group sponsors the LG Cup Go
Tournament.LG Group founder Koo In Hwoi established Lak Hui Chemical Industrial Corp. in
1947.In 1952, Lak Hui (currently LG Chem) became the first Korean company to enter the
plastics industry. As the company
company expanded its plastics business, it established GoldStar Co.,
Ltd., (currently LG Electronics Inc.) in 1958.In 1959, Goldstar produced Korea's first radio.
Many consumer electronics were sold under the brand name GoldStar, while some other
household products (not available
available outside South Korea) were sold under the brand name of
Lucky. The Lucky brand was famous for its hygiene products line such as soaps and Hi-Ti
laundry detergents, but most associated with its Lucky and Perioe toothpaste.In
toothpaste 1995, it was
renamed "LG", the abbreviation of "Lucky GoldStar". More recently, the company associates its
tagline "Life's Good", with the letters LG. According to Interbrand and BusinessWeek,
Samsung’s brand value ranked 43rd (USD 5.2billion) in 2000, 42nd (USD 6.4 billion) in 2001,
34th (USD 8.3 billion) in 2002, 25th (USD 10.8 billion) in 2003, 21st (USD 12.5 billion) in
2004, and 20th (14.9 billion) in 2005 among top global companies

The Samsung Group is South Korea


Korea's largest chaebol and the world's largest conglomerate by
revenue, leading several industries in the world. It is composed of numerous international
businesses,, all united under the Samsung brand, including Samsung Electronics
Electronics, the world's
largest electronics company, Samsung Heavy Industries
Industries, one of the world's
d's largest shipbuilders
and Samsung Engineering & Construction,
Construction a major global construction company. These three
multinationals form the core of Samsung Group and reflect its name - the meaning of the Korean
word Samsung is "tristar" or "three
"t stars".The Samsung brand is the best known South Korean
brand in the world and in 2005, Samsung overtook Japanese rival Sony as the world's leading
consumer electronics brand and became part of the top twenty global brands overall. It is also the
leader in many domestic industries, such as the financial, chemical, retail and entertainment
industries. Samsung has sixteen products that have dominated the world’s market share,
including: DRAM,, color cathode-ray
cathode ray tube TVs (CPT, CDT), SRAM, TFT
TFT-LCD glass substrates,
TFT-LCD, STN-LCD,
LCD, tuner, CDMA handset, color television (CTV), monitor, flash memory,
LCD Driver IC (LDI), PDP module,
module, PCB for handheld (mobile phone plates), Flame Retardant
ABS, and Dimethyl Formamide (DMF). According to Interbrand and Business Week
Week, Samsung’s
brand value ranked 43rd (USD 5.2billion) in 2000, 42nd (USD 6.4 billion) in 2001, 34th (USD
8.3 billion) in 2002, 25th (USD 10.8 billion) in 2003, 21st (USD 12.5 billion) in 2004, and 20th
(14.9 billion) in 2005 among top global companies.
companies

Product Characteristics:
In the cell phone industry, the products and services are highly standardized. In the past, the
products differentiated in cell phones and services. Today, with more technology enhancement,
the products in different companies are essentially similar. Since this is a cell phone industry,
there is a maximum amount of products and services that consumers can choose from. Yet,
consumers do not want to purchase cell phones at a higher price value unless the companies are
able to make it attractive.
Camera cell phones:
The key factor consumers consider when choosing a device is their context. Phones with the
ability to take images, both still and video have captured about 40% of the wireless phone
market. But despite the product’s popularity, customer users want higher resolution, the ability
to use storage media, and many other state of the art features found in modern digital camera.
With consumers’ desire for high resolution digital camera, the market for camera and camcorder
phones will peak in 2007.Nowadays camera phones are the rage in markets all around the globe
because consumers are attracted to the convenience of having an imaging device with them at all
times. The business model is focused on users displaying and sending images wirelessly. As
advanced 3G networks are implemented in the coming years, the advance higher resolution
camera phones will likewise become very popular. There are three critical pieces to this type of
phone:
1. The device (phone)
2. The application (picture taking)
3. The network (3G)
The introduction of 3G network will accelerate the adoption of the camera phones. Why?
Because the timing is right for digital imaging to become part of the cell phone industry,
especially in new cell phones and new networks. Camera phones would not work with older
phones and networks, because there are small monochrome displays and little storage, and the
speed to transmit a digital photo would take a long time. Just as important is improvement to
camera phones, new advanced third generation wireless network (3G) will enable the cost
effective transmission of these higher-resolution images. Purpose of migrating to 3G is to enable
users to spend more time using their multimedia phones every day by enjoying the world and
keeping in touch with their friends and families. Here are characteristics of the 3G network on
cell phones:
 The 3G networks are able to transmit at 380 K bps.
 There is also improvements on the image to 330,000 pixels
 Internal storage grew so consumers could store a dozen photos on their phone
This means better pictures, better experience, and consumers bought them – by tens of millions
of cell phones around the world. Consumers do not have to pay extra for the camera features;
they will get the camera as part of the phone. Although camera phones are great to take pictures,
consumers use them as wallpaper and screensavers instead of printing. This is how consumers
change the way they interact with digital technology. Today, camera phones are so popular that
every cell phone company or provider offers them. Features on all cell phones are similar. If
consumers were to just buy cell phones for their features, consumers can find a similar phone in
other companies as well. This makes the industry very competitive which drives companies to
lower product cost and service cost in order to bring large volumes of consumers. Although
camera phones are very popular, one factor that makes consumers dissatisfied is the picture
quality, which is limited when these images are printed or sent:
 Vast majority of users use high-resolution camera in addition to their camera phones.
 3% of consumers use their phone as their only digital camera
 Most consumers take fewer than 10 pictures with their camera phone each month
 Fewer than 2% of consumers say they will consider a camera phone with less than one
mega pixel
 50% of consumers say they would only consider a handset with more than two mega
pixels of resolution.
Downloadable Application:
Cell phones are programmed allowing users to download applications onto their cell phones.
Such common downloads are of games such as JAMDAT Bowling. Most applications are large,
between 40 KB to 550KB, and with applications ever growing-in-size and very-more-appealing,
better multimedia and larger memory in the phones, and better network capabilities for economic
high-speed data access.
Video (Streaming):
Video Streaming is when videos are sent over a wireless network to a cell phone. The Video
streaming with 3G helps in ways that is usable and cost effective by the consumer, and
economical viable for the wireless operator.
Internet Access via PC Card:
Wireless PC Cards in smaller form will be produced for handhelds. IT wants access through the
internet at the fastest data rates possible, and at the lowest costs. Operator wireless also wants to
keep consumers happy with internet access which will maximize revenues and reduce their costs.
Here are some new cell phone models currently in market today:
 Motorola RAZR:
Motorola Razr is the latest fashion cell phone of 2006. It is a flip clamshell design, quad band
cellular plus standard features in most GSM cell phones.
 LG the V:
The new product is a smart clamshell design with small but useable QWERTY keyboard, high
resolution camera, MP3 player, and a mini SD (songs).

Scale Economies:
There are two types of economies of scale pertaining to the cell phone industry. They are the
internal and external economies.
i. Internal
Internal economies of scale are economies made within a company as a result of mass
production. So as a company produces more and more products and services to consumers, the
average cost begins to fall so the companies should focus on the following six factors:
 A technical economy: when the companies use its entire means to generate revenues
and increase profitability. This includes spending a large amount of money on capital
to start the company.
 Managerial economies: when the company splits up managerial duties to meet
specific company goals and values. This in turns helps to complete specific tasks and
improve the company to better service consumers.
 Financial economies: cell phone companies borrow lots of money to purchase capital
in order to create products for consumers.
 Marketing economies: where cell phone companies spends a lot of money to advertise
their products and services on television and in newspapers everyday to reach
consumers across nations. Companies resorts to marketing in hope of attracting more
consumers to try their products and to generate higher profits and revenue.
 Commercial economies: cell phone companies order their products and supplies in
bulk at a lower rate rather than buying them separately.
 Research and development economies: the cell phone companies are continuously
developing new and advance technology cell phone to be in pace with the competitive
market.
ii. External
The external economies are made outside of the company as a result of its location. Most cell
phone companies have a corporate headquarter that concentrates on the following to keep track
of the company’s progress.
 Cell phone companies have licensed franchises that operate to sell products and
services to consumers. They have a network that connects them to manufacturers,
service carriers, and main corporate officer that is the backbone of the stores and
products it sells.
 The cell phone companies works closely with service carriers to provide phone
service such as clear phone calls, not lost calls, and good receptions.
 The companies work and communicate directly with manufacturers reputable for the
new phones enhancement, upgrades, and features.

Learning & Experience Effects:


The major complaint found in the cell phone industry was cost and services. So to improve their
service, the company has increased the training for customer service employees to 10 days a
year, and introduced a new plan to address common complaints; also tied executive
compensation to customer satisfaction. There are more options that buyers can choose from,
whether it be the actual phone itself or the service plan. Companies are now giving customers a
series of contract terms and costs as well as giving them a sample of how their first bill will look
like so they understand the contract before signing it. Service carrier is a very important factor to
maintaining consumer satisfaction and to keep consumers. With that, companies are all pushing
new data services for business customers to increase new revenue sources.
Capital Requirements:
The cell phone companies require large capital to enter and remain in the market successfully.
Companies require capital to create products that attracts consumers and for total assets and
revenues to enlist other products and services that are featured with cell phones. Cell phone
companies work with manufacturers to create new technological and innovative cell phones in
the market today to attract consumers. A valuable capital in the cell phone industry is the
consumers because revenue and profits depends on them who buy the companies’ cell phones.
New products are introduced continually, technology evolves on a daily basis, and customers are
eager to become part of the future of a wireless society. This makes the market very competitive
and large companies that have big economies of scale provide a highly automated service to a
large number of customers, and have the financial resources required in building and maintaining
a large network of communications devices. Smaller companies can also compete, but only in
small markets or by provide specialty services. In addition, companies spend millions of dollars
on developing brand name recognition, and promoting and marketing their products. Companies
also want to spread their companies out through franchises, because more offices mean more
visibility in drawing consumers in to buying their products and services.

Industry Profitability:
The cell phone industry will remain a competitive market and will increase continuously with a
total of 1,200 wireless companies with total annual revenue of $100 billion. The profitability of
individual companies is driven mainly by their ability to develop new products, providing better
service, making their products affordable for consumers. Profitability of companies is achieved
also by taking advantage of marketing their products, have access to capital, and by inquiring the
expertise to improve the cell phones. The profitability of the cell phone industry is dependent on
the volume of consumer they can attract. The profitability of companies has increased
drastically since 2002 and will continue to increase as new cell phones are improved. Since
2004, the financial markets of cell phone companies seem to increase fast because of the new
technologies and services that companies are offering consumers, and at the same time they
compete for customers. Although there are complaints and dissatisfaction from consumers, cell
phone and the service along with it has become a necessity which companies use as an advantage
by charging consumers higher price. As in any industry, there are declining and inclining profits.
The cell phone has experienced a slight decline; worldwide shipments of cell phones rose 26
percent in the first quarter of 2006 compared with the same period last year. Currently today, the
global market continues to thrive on consumers replacing older phones with new purchases, a
total of 226.7 million mobile phones. For individual company profitability, Nokia is listed at the
top, retaining a third of the global market share and enjoying a 39.6 percent growth. Motorola
also had a high increase of 60.6 gains and is controlling 20.3 percent of the market. Samsung
has shipped over 29 million phones and is in third place with a decrease in sale to only 18.4
percent growth. LG came fourth for market share with 6.9 percent and experienced an operating
loss for the quarter due to marketing expenses and fewer sales. The cell phone industry looks
strong and competitive between the companies and service they provide. Even more as new
options are in place, such as, allowing consumers to keep their numbers while switching carriers.
Five Forces of Competition

When compared to the general environment, the industry environment often has a direct effect
on the firm’s strategic actions. Our textbook discusses Porter’s five forces of competition in
most industries. However, in analyzing the Cell Phone Industry, not only do we cover the five
forces model which includes (1) the threat of new entry, (2) the power of suppliers, (3) the power
of buyers, (4) product/service substitutes, and (5) the intensity of rivalry among competitors, we
are adding the sixth force of another stakeholder group – the Unions.

1. Threat of New Entrants

The cell phone industry is highly concentrated. Following the recent Sprint/Nextel merger, only
four firms actually control 80% of the current market. Since start-up costs for a cell phone
service provider are extremely high, the threat of new entrants is low. A great sum of money
must be invested to attain the economies of scale, and it is difficult to enter the market with
existing firms already operating on cost and differentiation strategies.

2. Bargaining Power of Suppliers

Cell phone operators provide such high volume orders that suppliers have been cautious not to
temper with the relationship and ended up being in a low bargaining position. Already dragging
with the specter of gadget gridlock, carriers continuously seek for ever more features in the
handsets and threaten to increase the pressure on suppliers with the “reverse e-auction.”
T-Mobile is the first carrier, who has staged an online bidding war, asking six vendors to bid
against each other online for a contract to build cell phones for one handset segment.

3. Bargaining Power of Buyers

In August 2005, the Florida PIRG Education Fund Report revealed how cell phone early
termination fees hurt customers. Their research showed that half of cell phone users would
switch carriers if they did not have to pay contract termination penalties. Feeling locked in a
cell, most consumers resent the $150 - $240 penalties per phone, should they consider changing
to another carrier for lower rate or better service.The report also indicated that $4.6 billion have
been paid in the last 3 years due to penalties – that’s $2.5 billion in actual penalties and $2.1
billion in lost services from consumers who either cannot afford the penalty or didn’t think it’s
worth paying. This clearly suggests that buyers/consumers have little bargaining power in this
end.

4. Threat of Substitute Products/Services

A lot of active research and development into mobile phone technology has been underway:
 Operators are upgrading their networks to advanced wireless and other third-generation
(3G) services, many new entertainment and communications services are becoming
available, including new broadcast-type operations on spectrum formerly occupied by
Television channels 52-69. With downlink speeds close to that of wire line DSL, mobile
service can now provide music download and streaming video sharing. Services such as
MobiTV or Juice Caster are some applications that leverage these new networks.
 Development in miniaturized hard disks and flash drives to solve the storage space issue
are already surfacing, therefore opening the possibility for phones to become portable
music libraries and players similar to an iPod.
 Some cell phones already have GPS positioning. In the future, this may be coupled with
accelerometer positioning, to cover underground or indoor positioning. This would lead
to maps and help finding group members nearby, or identifying strangers. When coupled
with camera phone, the GPS technology may also allow users to take a picture or snap
the exact location and angle at which the picture was taken.
5. Intensity of Rivalry among Competitors

The landscape of mobile wireless industry has changed much in recent years Sprint and Nextel
Communications Inc. together created a leading carrier augmented by a global IP network that
offers consumer, business, and government customers’ broadband wireless and integrated
communications services A little earlier, AT&T Inc., formed by SBC Communications’ purchase
of AT&T Corp. created the then largest wireless phone company. Cingular Wireless won that
distinction in 2005 after its takeover of AT&T Wireless for $41 billion. Mergers lead to
concentrated pricing power in the hands of fewer companies. When one phone company owns
another phone company, the total savings to the company through the “synergies” are
substantial, but the potential for competition is undermined

Competitive Position of Major Mobile Phone Manufacturers


Net
Income

4.5 B Motorola Nokia

4B

3.5 B
Siemens

Ericsson

3B

60 B 70 B 80 B 90 B

Market Capital

 The vertical axis represents the total amount of Net Income earned by each mobile phone
maker.
 The horizontal axis represents the market capital each company has worldwide.
 The circles represent the total assets each mobile phone maker has. The figure represents
financial position of each company.
Nokia Ericsson Motorola Industry
Market Capital 94.06B 56.82B 56.34B 179.33M
Employees 58,874 56,055 69,000 260
Qtrly Rev 28.50% 15.80% 22.70% 15.90%
Growth (yoy)
Revenue (ttm) 46.23B 20.78B 38.70B 81.02M
Gross Margin 34.34% 45.75% 31.48% 37.72%
(ttm)
Oper Margins 13.24% 20.21% 11.23% 1.69%
(ttm)
Net Income 4.80B 3.33B 4.59B 729.70K
(ttm)
EPS (ttm) 1.12 2.09 1.797 0.07
P/E (ttm) 20.54 17.14 12.54 27.85
PEG (5 yr 1.76 1.78 1.68 1.57
expected)
P/S (ttm) 2.03 2.77 1.44 1.99
Source: http://finance.yahoo.com/q/co?s=NOK

 Among the four major cell phone makers, Nokia has the most market capital and net
income, which makes Nokia the largest cell phone maker in the world.
 Motorola comes into second in net income.
 Nokia has the best Price/Earning ratio, which means Nokia’s stock has the relative high
earning per share.
 Ericsson has the highest gross margin. Gross margin (gross profit / sales revenue) is a
measure of a company's efficiency in turning raw materials into income. In other words,
Ericsson is most efficiency in turning raw materials into income.
INTRODUCTION
OF
CELLULAR
SERVICE
COMPANIES
Company Profile

“Bharti Airtel” formerly known as Bharti Tele-Ventures Limited (BTVL) is among India's
largest mobile phone and Fixed Network operators. With more than 60 million subscriptions as
of 13th February 2008.[2] It offers its mobile services under the Airtel brand and is headed by
Sunil Mittal. The company also provides telephone services and Internet access over DSL in 14
circles. The company complements its mobile, broadband & telephone services with national and
international long distance services. The company also has a submarine cable landing station at
Chennai, which connects the submarine cable connecting Chennai and Singapore. The company
provides reliable end-to-end data and enterprise services to the corporate customers by
leveraging its nationwide fiber optic backbone, last mile connectivity in fixed-line and mobile
circles, VSATs, ISP and international bandwidth access through the gateways and landing
station. Airtel is the largest cellular service provider in India in terms of number of subscribers.
Bharti Airtel owns the Airtel brand and provides the following services under the brand name
Airtel: Mobile Services (using GSM Technology), Broadband & Telephone Services (Fixed line,
Internet Connectivity(DSL) and Leased Line), Long Distance Services and Enterprise Services
(Telecommunications Consulting for corporate).Leading international telecommunication
companies such as Vodafone and SingTel held partial stakes in Bharti Airtel.In April 2006
Bharti Global Limited was awarded a telecommunications license in Jersey in the Channel
Islands by the local telecommunications regulator the JCRA. In September 2006 the Office of
Utility Regulation in Guernsey awarded Guernsey Airtel with a mobile telecommunications
license. In May 2007 Jersey Airtel and Guernsey Airtel announced the launch of a relationship
with Vodafone for island mobile subscribers. In July 2007, Bharti Airtel signed an MoU with
Nokia-Siemens for a 900 million dollar expansion of its mobile and fixed network.[3] In August
2007, the company announced it will be launching a customized version of Google search engine
that will provide an 'array of services' to its broadband customers.

As India's leading GSM Mobile Services operator, IDEA Cellular has licenses to operate in 11
circles. With a customer base of over 17 million, IDEA Cellular has operations in
Delhi,Maharashtra, Goa, Gujarat, Andhra Pradesh, Madhya Pradesh, Chattisgarh, Uttaranchal,
Haryana, UP-West, Himachal Pradesh and Kerala. IDEA Cellular's footprint currently covers
approximately 45% of India's population and over 50% of the potential telecom-market.As a
leader in Value Added Services, Innovation is central to IDEA's VAS Factory. It is the first
cellular company to launch music messaging with 'Cellular Jockey', 'Background Tones', 'Group
Talk', a voice portal with 'Say IDEA' and a complete suite of Mobile Email Services.Idea
Cellular is a wireless telephony company operating in various states in India. It initially started in
1995 as a join venture between the Tatas, Aditya Birla Group and AT&T by merging Tata
Cellular and Birla AT&T Communications.Initially having a very limited footprint in the GSM
arena, the acquisition of Escotel in 2004 gave Idea a truly pan-India presence covering
Maharashtra (excluding Mumbai), Goa, Gujarat, Andhra Pradesh, Madhya Pradesh, Chattisgarh,
Uttar Pradesh (East and West), Haryana, Kerala, Rajasthan and Delhi (inclusive of NCR).The
company has its retail outlets under the "Idea n' U" banner. The company has also been the first
to offer flexible tarrif plans for prepaid customers. It also offers GPRS services in urban
areas.Initially the Birlas, the Tatas and AT&T Wireless each held one-third equity in the
company. But following AT&T Wireless' merger with Cingular Wireless in 2004, Cingular
decided to sell its 32.9% stake in Idea. This stake was bought by both the Tatas and Birlas at
16.45% each.Tata's foray into the cellular market with its own subsidiary, Tata Indicom, a
CDMA-based mobile provider, cropped differences between the Tatas and the Birlas. This dual
holding by the Tatas also became a major reason for the delay in Idea being granted a license to
operate in Mumbai. This was because as per Department of Telecom (DOT) license norms, one
promoter could not have more than 10% stake in two companies operating in the same circle and
Tata Indicom was already operating in Mumbai when Idea filed for its license.The Birlas thus
approached the DOT and sought its intervention, and the Tatas replied by saying that they would
exit Idea but only for a good price. On April 10, 2006, the Aditya Birla Group announced its
acquisition of the 48.18% stake held by the Tatas at Rs. 40.51 a share amounting to Rs. 44.06
billion. While 15% of the 48.14% stake was acquired by Aditya Birla Nuvo, a company in-
charge of the Birlas' new business initiatives, the remaining stake was acquired by Birla TMT
holdings Private Ltd., an AV Birla family owned company.Currently, Birla Group holds 98.3%
of the total shares of the company.Idea has successfully launched 3 more new circles (states) in
India viz. Rajasthan, Himachal Pradesh and UP (East) to make itself a pan-India player.
Recently, Idea got licenses to operate in Mumbai & Bihar. They are awaiting the spectrum from
DoT.

The Late Dhirubhai Ambani dreamt of a digital India — an India where the common man would
have access to affordable means of information and communication. Dhirubhai, who single-
handedly built India’s largest private sector company virtually from scratch, had stated as early
as 1999: “Make the tools of information and communication available to people at an affordable
cost. They will overcome the handicaps of illiteracy and lack of mobility.” t was with this belief
in mind that Reliance Communications (formerly Reliance Infocomm) started laying 60,000
route kilometres of a pan-India fibre optic backbone. This backbone was commissioned on 28
December 2002, the auspicious occasion of Dhirubhai’s 70th birthday, though sadly after his
unexpected demise on 6 July 2002. Reliance Communications has a reliable, high-capacity,
integrated (both wireless and wireline) and convergent (voice, data and video) digital network. It
is capable of delivering a range of services spanning the entire infocomm (information and
communication) value chain, including infrastructure and services — for enterprises as well as
individuals, applications, and consulting. Today, Reliance Communications is revolutionising the
way India communicates and networks, truly bringing about a new way of life.Reliance
Communications (formerly Reliance Infocomm), along with Reliance Telecom and Flag
Telecom, is part of Reliance Communications Ventures (RCoVL). According to National Stock
Exchange data, Anil Ambani controls 66.75 per cent of the company, which accounts for more
than 1.36 billion shares of the company.[1]Reliance Infocomm is an Indian telecommunications
company. It is the flagship company of the Reliance-Anil Dhirubhai Ambani Group, comprising
of power (Reliance Energy), financial services (Reliance Capital) and telecom initiatives of the
Reliance ADA Group. Reliance Infocomm is currently managed by Anil Dhirubhai Ambani.It
uses CDMA2000 1x technology.Reliance Infocomm was founded by Dhirubhai Ambani.
Between 1999 to 2002 Reliance Infocomm built 60,000 km of fibre optic backbone in India. This
network was commissioned on December 28, 2002.At present, Reliance Telecom's GSM cellular
services are available in 340 towns within its eight-circle footprint. Reliance's CDMA services
are available in 19 states and cover about 65% of the country, state wise. Reliance Infocomm
also offered for the first time in India, mobile data services through its R-World mobile portal.
This portal leverages the data capability of the CDMA 1X network.

Tata Teleservices Limited (TTSL) is part of the Tata Group of Companies, an Indian
Conglomerate. It runs the brand name Tata Indicom in India in various telecom circles of India.
The company forms part of the Tata Group's prescence in the Telecommunication Industry in
India, along with Tata Teleservices (Maharashtra) Limited (TTML) and VSNL.TTSL was
incorporated in 1995 and was the first company to offer CDMA Mobile services in India,
specifically in the state of Andhra Pradesh.
In December 2002, the company acquired the erstwhile Hughes Telecom (India) Ltd. which was
renamed Tata Teleservices (Maharashtra) Limited.In September 2007, Tata Indicom launched
the Talk World plan, an International Long Distance Plan.
Tata is the direct competitor with Reliance, both CDMA operators in India. The company
provides unified telecommunication solutions including mobile, fixed wireless, fixed line and
broadband. Other competitors are Vodafone, Airtel, Aircel, Idea, MTNL, BSNL providing GSM
based mobile telephony.The company was first in India to provide free intra network calling
within city limits. They launched a unique scheme providing lifetime rental free connectivity on
its mobile and fixed wireless for a one time charge.Tata Teleservices is part of the INR Rs.
119000 Crore (US$ 29 billion) Tata Group, that has over 87 companies, over 250,000 employees
and more than 2.8 million shareholders. With a committed investment of INR 36,000 Crore (US$
7.5 billion) in Telecom (FY 2006), the Group has a formidable presence across the telecom value
chain.Tata Teleservices spearheads the Group’s presence in the telecom sector. Incorporated in
1996, Tata Teleservices was the first to launch CDMA mobile services in India with the Andhra
Pradesh circle.Starting with the major acquisition of Hughes Tele.com (India) Limited [now
renamed Tata Teleservices (Maharashtra) Limited] in December 2002 the company swung into
an expansion mode. With the total Investment of Rs 19,924 Crore, Tata Teleservices has created
a Pan India presence spread across 20 circles that includes Andhra Pradesh, Chennai, Gujarat,
Karnataka, Delhi, Maharashtra, Mumbai, Tamil Nadu, Orissa, Bihar, Rajasthan, Punjab,
Haryana, Himachal Pradesh, Uttar Pradesh (E), Uttar Pradesh (W), Kerala, Kolkata, Madhya
Pradesh and West Bengal. Having pioneered the CDMA 3G1x technology platform in India,
Tata Teleservices has established a robust and reliable 3G ready telecom infrastructure that
ensures quality in its services. It has partnered with Motorola, Ericsson, Lucent and ECI Telecom
for the deployment of a reliable, technologically advanced network.The company, which
heralded convergence technologies in the Indian telecom sector, is today the market leader in the
fixed wireless telephony market with a total customer base of over 3.8 million.Tata Teleservices’
bouquet of telephony services includes Mobile services, Wireless Desktop Phones, Public Booth
Telephony and Wireline services. Other services include value added services like voice portal,
roaming, post-paid Internet services, 3-way conferencing, group calling, Wi-Fi Internet, USB
Modem, data cards, calling card services and enterprise services.Some of the other products
launched by the company include prepaid wireless desktop phones, public phone booths, new
mobile handsets and new voice & data services such as BREW games, Voice Portal, picture
messaging, polyphonic ring tones, interactive applications like news, cricket, astrology, etc.Tata
Indicom redefined the existing prepaid mobile market in India, by unveiling their offering – Tata
Indicom ‘Non Stop Mobile’ which allows customers to receive free incoming calls. Tata
Teleservices today has India’s largest branded telecom retail chain and is the first service
provider in the country to offer an online channel www.ichoose.in to offer postpaid mobile
connections in the country.Tata Teleservices has a strong workforce of 6000. In addition, TTSL
has created more than 20,000 jobs, which will include 10,000 indirect jobs through outsourcing
of its manpower needs.Today, Tata Teleservices Limited along with Tata Teleservices
(Maharashtra) Limited serves over 21 million customers in over 4000 towns. With an ambitious
rollout planboth within existing circles and across new circles, Tata Teleservices offers world-
class technology and user-friendly services in 20 circles.

Bharat Sanchar Nigam Limited (known as BSNL, India Communications Corporation Limited)
is a public sector communications company in India. It is the India's largest telecommunication
company with 25.14% market share as on December 31, 2007. Its headquarters are at Bharat
Sanchar Bhawan, Harish Chandra Mathur Lane, Janpath, New Delhi. It has the status of Mini-
ratna - a status assigned to reputed Public Sector companies in India.BSNL is India's oldest and
largest Communication Service Provider (CSP). Currently BSNL has a customer base of 68.5
million (Basic & Mobile telephony). It has footprints throughout India except for the
metropolitan cities of Mumbai and New Delhi which are managed by MTNL. As on December
31, 2007 BSNL commanded a customer base of 31.7 million Wireline, 4.1 million CDMA-WLL
and 32.7 million GSM Mobile subscribers. BSNL's earnings for the Financial Year ending
March 31, 2007 stood at INR 397.15b (US$ 9.67 b) with net profit of INR 78.06b (US$ 1.90
billion). Today, BSNL is India's largest Telco and one of the largest Public Sector Undertaking
with estimated market value of $ 100 Billion. The company is planning an IPO with in 6 months
to offload 10 % to public.Bharat Sanchar Nigam Ltd. formed in October, 2000, is World's 7th
largest Telecommunications Company providing comprehensive range of telecom services in
India: Wireline, CDMA mobile, GSM Mobile, Internet, Broadband, Carrier service, MPLS-
VPN, VSAT, VoIP services, IN Services etc. Within a span of five years it has become one of
the largest public sector unit in India. BSNL has installed Quality Telecom Network in the
country and now focusing on improving it, expanding the network, introducing new telecom
services with ICT applications in villages and wining customer's confidence. Today, it has about
47.3 million line basic telephone capacity, 4 million WLL capacity, 20.1 Million GSM Capacity,
more than 37382 fixed exchanges, 18000 BTS, 287 Satellite Stations, 480196 Rkm of OFC
Cable, 63730 Rkm of Microwave Network connecting 602 Districts, 7330 cities/towns and 5.5
Lakhs villages.BSNL is the only service provider, making focused efforts and planned initiatives
to bridge the Rural-Urban Digital Divide ICT sector. In fact there is no telecom operator in the
country to beat its reach with its wide network giving services in every nook & corner of country
and operates across India except Delhi & Mumbai. Whether it is inaccessible areas of Siachen
glacier and North-eastern region of the country. BSNL serves its customers with its wide
bouquet of telecom services.BSNL is numero uno operator of India in all services in its license
area. The company offers vide ranging & most transparent tariff schemes designed to suite every
customer.BSNL cellular service, CellOne, has more than 17.8 million cellular customers,
garnering 24 percent of all mobile users as its subscribers. That means that almost every fourth
mobile user in the country has a BSNL connection. In basic services, BSNL is miles ahead of its
rivals, with 35.1 million Basic Phone subscribers i.e. 85 per cent share of the subscriber base and
92 percent share in revenue terms. BSNL has more than 2.5 million WLL subscribers and 2.5
million Internet Customers who access Internet through various modes viz. Dial-up, Leased
Line, DIAS, Account Less Internet(CLI). BSNL has been adjudged as the NUMBER ONE ISP
in the country. BSNL has set up a world class multi-gigabit, multi-protocol convergent IP
infrastructure that provides convergent services like voice, data and video through the same
Backbone and Broadband Access Network. At present there are 0.6 million DataOne broadband
customers. The company has vast experience in Planning, Installation, network integration and
Maintenance of Switching & Transmission Networks and also has a world class ISO 9000
certified Telecom Training Institute.Scaling new heights of success, the present turnover of
BSNL is more than Rs.351,820 million (US $ 8 billion) with net profit to the tune of Rs.99,390
million (US $ 2.26 billion) for last financial year. The infrastructure asset on telephone alone is
worth about Rs.630,000 million (US $ 14.37 billion). BSNL plans to expand its customer base
from present 47 millions lines to 125 million lines by December 2007 and infrastructure
investment plan to the tune of Rs. 733 crores (US$ 16.67 million) in the next three years.The
turnover, nationwide coverage, reach, comprehensive range of telecom services and the desire to
excel has made BSNL the No. 1 Telecom Company of India.
Market Share of the telecom Company in India
CHAPTER-3
RESEARCH METHODOLOGY
Definition of Research

The word research is derived from the Latin word meaning to know. It is a systematic and a
replicable process, which identifies and defines problems, within specified boundaries. It
employs well-designed method to collect the data and analyses the results. It disseminates the
findings to contribute to generalize able knowledge. The characteristics of research presented
below will be examined in greater details later are:

 Systematic problem solving which identifies variables and tests relationships between
them,
 Collecting, organizing and evaluating data.
 Logical, so procedures can be duplicated or understood by others
 Empirical, so decisions are based on data collected
 Reductive, so it investigates a small sample which can be generalized to a larger
population
 Replicable, so others may test the findings by repeating it.
 Discovering new facts or verify and test old facts.
 Developing new scientific tools, concepts and theories, this would facilitate to take
decision.

For the proper analysis of data simple statistical techniques such as percentage were use. It helps
in making more generalization from the data available. The data which will be collected from a
sample of population was assumed to be representing entire population was interest.
Demographic factors like age, income and educational background was used for the
classification purpose.

TYPES & TECHNIQUES

The study conducted will be a conclusive descriptive statistical study; the researcher will come to
the decision which is precise and rational. The study is conclusive because after doing the study
the researcher will comes to a conclusion regarding the position of the brand and factors
responsible for purchase of handset as well as service in the minds of respondents of different
groups. The study is statistical because throughout the study all the similar samples are selected
and group together. All the similar responses are taken together as one and their percentages are
calculated by using various statistical software to reach a final conclusion.Thus, this, conclusive
descriptive statistical study is the best study for this purpose as it provides the necessary
information which is utilize to arrive at a concrete decision.

TOOLS TO BE USED

To know the response I will use the questionnaire method in sample survey. If one wishes to find
what people think or know, the logical procedure is to ask them. This has lead marketing
researchers to use the questionnaire technique for collecting data more than any other method. In
this method questionnaire were distributed to the respondents and they were asked to answer the
questions in the questionnaire. The questionnaire, were non-disguised because the questionnaire
were constructed so that the objective is clear to the respondent. The respondents were aware of
the objective. They knew why they asked to fill the questionnaire. After collecting the response
the data will be uploaded to the computer for further analysis.

LIMITATIONS OF THE STUDY


 The research will be conducted in a limited area.

 The internet information can be irrelevant.

 Time will be a major constraint.

 The respondent will be limited so cannot be treated as a whole population.

 The respondent may be biased.

 Due to language problem it is possible that the respondents are not be able to understand
the questionnaire and can cause misleading results.
BIBLOGRAPHY

Books:

 Philip Kotler, ‘marketing management’ prentice Hall of India Pvt. Ltd. New Dehli.

 C. R. Kothari ‘Research methodology’, vishwa publication, New Delhi.

 Saxena Rajan ‘marketing management’ Tata Mcgraw-hill publicating Co. Ltd. New Delhi.

 H. V. Verma ‘marketing of services’ Global business press, New Delhi.

 Business today magazine of February issue,2008.

Web Resources:
www.trai.gov.in
http://www.tataindicom.com/t-aboutus-ttsl-organization.aspx
http://www.rcom.co.in/webapp/Communications/rcom/Aboutus/aboutus_home.jsp
http://www.ideacellular.com/IDEA.portal?_nfpb=true&_pageLabel=IDEA_Page_AboutIdea
http://www.bsnl.co.in/about.htm
http://www.bsnl.co.in/service/tariff_excel_pre.htm
http://210.212.144.243/utility/tariff.htm
http://www.trai.gov.in/trai/upload/PressReleases/15/pr16jan06.pdf
http:// www.wikipedia
www.totalnetwork.co.in .
http://www.rcom.co.in/webapp/Communications/rcom/index.jsp