Comparative Analysis of Fringe Benefits Provided by Public and Private Sector Telecom Service Provider

Comparative Analysis of Fringe Benefits between Public and Private Telecom Service
Provider
Project Report submitted in partial fulfillment for award of the diploma - Post
Graduate Diploma in Management (PGDM)
Date of Submission:
Submitted by:
Sonam Lata PGDM/08/831
Comparative Analysis of Fringe Benefits Between Public and Private Telecom Service
Providers
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Faculty Comments
Name of Faculty Signature of Faculty Date of Presentation Date of Checking Comments
: : : : :__________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
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Declaration
I Sonam lata, 831, PGDM final year student of Shri Balwant Institute of Management
hereby declare that the final project report entitled “Comparative Analysis of
Fringe Benefits Between Public and Private Telecom Service Providers” is an
original research work and same has not been submitted to any other institute for
the award of other degree. A seminar presentation of the project report was made
on……………. and the suggestions as approved by the faculty were duly incorporated.
Signature of Project Mentor Countersigned
Signature of Candidate Project Coordinator
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Acknowledgements
Success of every project depends largely on the SELF & encouragement and guidance
of many others. I take this opportunity to express my gratitude to the people who
have been instrumental in the successful completion of this study project. With
immense pleasure, I would like to present the project report for Comparative
Analysis of Fringe Benefits Between Public and Private Telecom Service Providers.
It has been an enriching experience for me which would not have possible without
the goodwill and support of the people around. As a student of Shri Balwant
Institute of Management, I would like to express my sincere thanks to all those who
helped me during my project. Words are insufficient to express my gratitude towards
Ms. Rekha Goutam(faculty PGDM HR) who helped me at every step whenever needed. At
last but not the least my grateful thanks is also extended to Prof- R.K.Ratan. My
thanks to all my faculty members for the proper guidance and assistance extended by
them. I am also grateful to my parents and friends to encourage & giving me moral
support. However, I accept the sole responsibility for any possible error of
omission and would be extremely grateful to the readers of this project report if
they bring such mistakes to my notices.
Sonam Lata
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Abstract
Mobile penetration is currently exploding in India and Bharti Airtel has been
riding the crest of the huge mobile industry wave that has been formed. Vast market
opportunities have now opened up the playing field in Indian telecom market and
also have made it much more competitive. In this type of competitive environment it
will be interesting to find out comparison between AIRTEL and BSNL fringe benefits.
Fringe Benefit is any privilege, service, facility or amenity, directly or
indirectly provided to employee by an employer. It’s reimbursement for any purpose.
The term Fringe benefits refer to various extra benefits provided to the employees,
in addition to the compensation paid in the form of wage or salary. These benefits
can be defined as any wage cost not directly connected with the employee’s
productive effort, performance, service or sacrifice. It is also defined as those
benefits which are provided by an employer to or for the benefit of an employee and
which are not in the form of wages, salaries and time-related payments. Different
terms are used to denote fringe benefits. They are welfare measures, social
charges, social security measures, supplements, sub-wages, employee benefits etc.
In addition workers commonly receive such benefits as holiday with pay, low cost
meals, low-rent housing etc. Such additions to the wage proper are sometimes
referred to as fringe benefits. Benefits that have no relation to employment or
wages should not be regarded as fringe benefits even though they may constitute a
significant part of the workers total income. BSNL can provide the better fringe
benefits to employees as compare to Bhartia Airtel. There are different methods of
companies to deciding the how much we can pay to our employees. Fringe benefits can
play major role in performance of the employees. It’s a strong motivational factor.
High fringe benefits high satisfaction level.
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TABLE OF CONTENTS
1
INTRODUCTION.......................................................................
............................................................1 1.1 SIGNIFICANCE OF
THE
STUDY..............................................................................
......................................5 1.2 REVIEW OF EXISTING
LITERATURE.........................................................................
....................................6 1.2.1 THE COST OF STAYING HOME
SICK ..............................................................................
......6 1.2.2 TRAI ASSESSES THE LIFETIME VALIDITY OFFERS OF SERVICE PROVIDERS.
(TELECOM REGULATORY AUTHORITY OF INDIA)(BRIEF
ARTICLE)...................................7 1.2.4. UNION TALKS SEEN AS KEY AS G.M.
MAKES CASE FOR FUNDS .............................11 1.3
CONCEPTUALIZATION..................................................................
............................................................15 1.4 FOCUS OF THE
PROBLEM............................................................................
.............................................16 1.5 OBJECTIVES OF THE
STUDY..............................................................................
.......................................17 1.6
HYPOTHESES.........................................................................
................................................................18 2 RESEARCH
METHODOLOGY........................................................................
................................19 2.1 RESEARCH
DESIGN.............................................................................
...................................................19 2.2 UNIVERSE & SURVEY
POPULATION ........................................................................
.................................19 2.3
SAMPLE.............................................................................
..................................................................20 2.4 COLLECTION
OF
DATA...............................................................................
............................................20 2.5 ANALYSIS
PATTERN............................................................................
...................................................20 3 ORGANIZATION OF THE
STUDY..............................................................................
....................21 3.1 MODERN
GROWTH.............................................................................
...................................................21 3.2
HISTORY............................................................................
..................................................................21 3.1.1
Introduction of the
telephone..........................................................................
...........................21 3.1.2 Further
developments.......................................................................
.........................................22 3.2 EMERGENCE AS A MAJOR
PLAYER.............................................................................
................................23 3.2.1 Liberalisation of telcommunications in
India............................................................................23
3.2.2 Growth of mobile
technology.........................................................................
...........................25 3.3 REVENUE AND
GROWTH.............................................................................
.............................................25 3.4
TELEPHONE..........................................................................
................................................................26 3.4.1 Wireless
telephones.........................................................................
..........................................27 3.4.2
Landlines..........................................................................
.........................................................28 3.5
INTERNET...........................................................................
..................................................................29 3.5.1
Broadband..........................................................................
.......................................................30 3.6
BROADCASTING.......................................................................
.............................................................30 3.7 NEXT GENERATION
NETWORKS...........................................................................
.....................................31 3.8 MOBILE NUMBER PORTABILITY
(MNP)..............................................................................
.....................31 3.9
INTERNATIONAL......................................................................
...............................................................32 3.9.1 Submarine
cables.............................................................................
..........................................32 4 DATA ANALYSIS &
INTERPRETATION.....................................................................
.................32 4.1 QUESTIONNAIRE
ANALYSIS...........................................................................
..........................................32 4.2 SWOT
ANALYSIS...........................................................................
.....................................................48 4.2.1
Strengths..........................................................................
..........................................................48 4.2.2
Weaknesses.........................................................................
.......................................................49 4.2.3
Opportunities......................................................................
.......................................................50 4.2.4
Threats............................................................................
...........................................................51 4.3 CASE STUDY
ANALYSIS...........................................................................
..............................................52
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Summary............................................................................
........................................................56 4.3.2 Fact
Analysis...........................................................................
..................................................58 4.3.3 Problem Solving –
Primary Issues & Secondary
Issues ...........................................................59 4.3.4
Recommendations and
Suggestions........................................................................
...................60 4.3.5
Conclusion.........................................................................
........................................................61 4.4 PESTE
ANALYSIS...........................................................................
....................................................62 4.4.1 Political/Legal
Environment .......................................................................
..............................62 4.4.2 Economic
Environment .......................................................................
......................................63 4.4.3 Socio-Cultural
Environment .......................................................................
..............................64 4.4.4 Technological
Environment .......................................................................
...............................65 5 LIMITATIONS OF THE
STUDY..............................................................................
........................66 6
CONCLUSION.........................................................................
............................................................67 7 SUGGESTIONS &
RECOMMENDATIONS....................................................................
................68 8
BIBLIOGRAPHY.......................................................................
..........................................................69
EN.WIKIPEDIA.ORG/WIKI/TELECOMSECTOR................................................
..........................69
WWW.ANSWERS.COM/TOPIC/TELECOMSECTOR................................................
...................69
.WIKIPEDIA.ORG/WIKI/TELECOM........................................................
........................................69 WWW.HR.COM/ - UNITED
STATES.............................................................................
...................69
BEAKWARE.COM/RESOURCES/DEFAULT.PHP.................................................
........................69
WWW.HUMANRESOURCESIQ.COMEN.........................................................
................................69
WIKIPEDIA.ORG/WIKI/HUMAN_RESOURCES.................................................
..........................69 RESEARCH METHODOLOGY –
C.R.KOTHARI........................................................................
...70 HUMAN RESOURCE MANAGEMENT –
K.ASWATHAPA..........................................................70 9
ANNEXURE...........................................................................
...............................................................70 Name:
_____________________________________________________..............................
.......70 Designation:
_______________________________________________....................................
.70 Organization’s Name:
________________________________________.....................................70
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1 Introduction
Fringe Benefit – meaning: • Any privilege, service, facility or amenity, directly
or indirectly provided to employee by an employer • • • Any reimbursement for any
purpose. Any free or concessional ticket for private journeys of employees and
family members Contribution to approved superannuation fund
The term Fringe benefits refer to various extra benefits provided to the employees,
in addition to the compensation paid in the form of wage or salary. These benefits
can be defined as any wage cost not directly connected with the employee’s
productive effort, performance, service or sacrifice. It is also defined as those
benefits which are provided by an employer to or for the benefit of an employee and
which are not in the form of wages, salaries and time-related payments. Different
terms are used to denote fringe benefits. They are welfare measures, social
charges, social security measures, supplements, sub-wages, employee benefits etc.
In addition workers commonly receive such benefits as holiday with pay, low cost
meals, low-rent housing etc. Such additions to the wage proper are sometimes
referred to as fringe benefits. Benefits that have no relation to employment or
wages should not be regarded as fringe benefits even though they may constitute a
significant part of the workers total income. Thus, fringe benefits are those
monetary and non-monetary benefits given to the employees during and post
employment period which are connected with employment but not to the employees
contributions to the organization. Coverage: Fringe benefits covers bonus, social
security measures, retirement benefits like provident fund, gratuity, pension,
workmen’s compensation, housing, medical, canteen, co-operative credit, consumer
stores, educational facilities, recreational facilities, financial advice and so
on. OBJECTIVES OF FRINGE BENEFITS: The important objectives of fringe benefits are:
1. To create and improve sound industrial relations 2. To boost up employee morale.
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Providers 3. To motivate the employees by identifying and satisfying their
unsatisfied needs. 4. To provide qualitative work environment and work life. 5. To
provide security to the employees against social risks like old age benefits and
maternity benefits. 6. To protect the health of the employees and to provide safety
to the employees against accidents. 7. To promote employees welfare by providing
welfare measures like recreation facilities. 8. To create a sense of belongingness
among employees and to retain them. Hence, fringe benefits are called golden hand-
cuffs. 9. To meet requirements of various legislations relating to fringe benefits.
NEED FOR EXTENDING FRINGE BENEFITS Most organisation have been extending the fringe
to their employees, year after year, for the following reasons 1. EMPLOYEE
DEMANDS:-Employees demand more the valued types of fringe benefits rather than pay
hike because of reduction in tax burden. 2. TRADE UNIONS DEMANDS:-Trades unions
compete with each other for getting more fringe benefits to their members. 3.
EPLOYER’S PREFERENCE:-fringe benefits motivate the employees for better
contribution to the organisation. 4. AS A SOCIAL SECURITY:-Fringe benefits provide
social security to employees against various contingencies. 5. TO IMPROVE HUMAN
RELATIONS:-Human relations are maintained when employers are satisfied
economically, social and psychologically.
TYPES OF FRINGE BENEFITS: 1. For Employment Security : Benefits under this head
include unemployment, insurance, technological adjustment pay, leave travel pay,
overtime pay, level for negotiation, leave for maternity, leave for grievances,
holidays, cost of living bonus, call-back pay, lay-off, retiring rooms, jobs to the
sons/daughters of the employees and the like.
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Providers 2. For Health Protection: Benefits under this head include accident
insurance, disability insurance, health insurance, hospitalization, life insurance,
medical care, sick benefits, sick leave, etc. 3. For Old Age and Retirement:
Benefits under this category include: deferred income plans, pension, gratuity,
provident fund, old age assistance, old age counseling , medical benefits for
retired employees, traveling concession to retired employees, jobs to
sons/daughters of the deceased employee and the like. 4. For Personnel
Identification, Participation and Stimulation: This category covers the following
benefits: anniversary awards, attendance bonus, canteen, cooperative credit
societies, educational facilities, beauty parlor services, housing, income tax aid,
counseling, quality bonus, recreational programs, stress counseling, safety
measures etc. CLASSIFICATION OF FRINGE BENEFITS 1. PAYEMENT FOR TIME NOT WORKED:-
Benefits under this category include sick leave with pay, vacation pay, paid rest
and relief time, paid lunch periods, grievance time, bargaining time, travel time
etc. 2. EXTRA TIME FOR TIME WORKED:-This category covers benefits such as premium
pay, incentive bonus, shift premium, old age insurance, profit sharing,
unemployment compensation, deewali or pooja bonus, food cost subsidy, housing
subsidy, recreation etc.
3. EMPLOYEE SECURITY:-Provided with the benefits of confirmation of the employee

on the job creates a sense of job security. Further, a minimum and continuous wage
or salary gives a sense of security to life.
4. SAFETY AND HEALTH:-In India, the Factories Act, 1948, stipulated certain
requirements regarding working conditions with a view to providing a safe working
environment Fringe benefits are compensations made to an employee beyond the
regular benefit of being paid for their work. Some fringe benefits are fairly
standard, such as offering a few days of sick time or paid vacation time. Others
can be significantly greater, and more rare. Key executives in large companies
might also enjoy fringe benefits like use of time-share condominiums, paid
continuing education, use of a company jet, use of a company credit card,
discounted or free health club memberships, and a significant amount of paid
vacation. Most people who work full time in the US could probably not get along
without fringe benefits. For example, offering health insurance to employees, where
the employer pays part of the insurance is a
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Providers typical example of fringe benefits. According to the laws in some states,
companies of a certain size must offer health insurance with some sharing of
payment at least to a full-time employee. Some companies avoid this by employing
more part-time workers. Most companies, however, realize that fringe benefits like
health insurance contribute to the well being of their employees. Whenever
possible, they try to offer at least partially discounted insurance to an employee,
even if they are not legally required to do so. Fringe benefits like sick or
vacation time tend to be fairly standard as well, even if an employee does not work
full time. These paid days off do tend to have a cap on them. For example, a new
employee might get a week’s vacation time to start, and eight to ten days of sick
time for year. Employees entering higher-level positions may be offered greater
fringe benefits as incentive to join a company. In fact, in fields where there is a
high demand for workers, such as nursing and teaching, some unusual fringe benefits
may be offered to attract employees. Small school districts have gotten quite
creative in this respect, since teacher salaries are still relatively low. A few
unusual fringe benefits offered by school districts have been paid housing or use
of private lakes for fishing. More likely are paid incentives for joining a
teaching staff such as hiring bonuses, offers to fund continuing education so
teachers get higher degrees and thus higher pay, or offering mentor programs for
new teachers. Registered nurses are badly needed due to new requirements on
nurse/patient ratio. This has led to uncommonly large hiring bonuses, agreements to
pay off student loans for new nurses, and generous health insurance and time off
packages. Other fields with high demands for workers and low worker supply are
likely to offer the most attractive fringe benefits packages. Sometimes the fringe
benefits turn out to be greatly needed. For example, the rising cost of private
health insurance often makes obtaining a job with a good health plan highly
desirable. Programs like 401ks can help employees save money for the future. Where
job compensation is not commensurate with money needed to live comfortably, housing
allowances, or company housing can often make the difference between being able to
take a job and looking elsewhere.
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1.1
•
Significance of the Study

The study provide an insight, how fringe benefits play a crucial role in the
increasing the performance of employees. • • Performance of employees will be
increased after getting the fringe benefits. The employees will perform their work
with best of their abilities. The fringe benefits play a crucial role in achieving
the organizational objectives. Motivation level should be high after getting
benefits. Efficiency of employees should be increased. Enhance the leadership
quality should be there. Productivity should be increased.
•
• • • •
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1.2
Review of Existing Literature
1.2.1 The Cost of Staying Home Sick It sounded like the responsible course of
action when President Obama and the Centers for Disease Control and Prevention
urged people with flu symptoms to stay at home so they do not infect others in the
community — and to keep any sick children out of school as well. So far, the new
swine flu virus has caused only mild disease in the United States, but it has
spread through most of the country, making it likely that rising numbers of people
will be developing symptoms. But what are civic-minded workers to do when staying
home will cost many their daily pay and, in a recession-plagued economy, possibly
their jobs if employers become exasperated over their absence? Roughly 60 million
American workers have no paid sick leave, and only a minority can draw pay if they
stay home with sick children. The lack of paid leave is especially acute in this
country among low-wage workers, food-service workers and part-timers, among others.
Many other countries do better. According to Dr. Jody Heymann, director of the
Institute for Health and Social Policy at McGill University, more than 160
countries ensure that all their citizens receive paid sick leave and more than 110
of them guarantee paid leave from the first day of illness. If President Obama is
serious about responsible action to control infectious disease threats, he should
back legislation to grant Americans at least seven paid sick days a year — long
enough to stay home until an influenza infection subsides. Then virtually all
Americans could heed his advice, and we would all be safer.
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Providers 1.2.2 TRAI assesses the lifetime validity offers of service providers.
(Telecom Regulatory Authority of India)(Brief Article) The Telecom Regulatory
Authority of India (TRAI) has identified the grey areas in the lifetime validity
scheme offers for free incoming calls that was recently launched by service
operators. According to TRAI, these offers could have implications such as a rise
in the number of incoming calls on mobiles and outgoing calls from landlines.
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Providers 1.2.3 Telecom service providers must ensure a high uptime of 99.99% or
more HCL BPO, a division of HCL Technologies, started its venture in 2001, and now
is a dominant player in the BPO field drawing the revenue of $232.15 mn. With over
11,400 professionals operating out of India, the UK and the US, HCL BPO runs
twenty-one delivery centers. HCL BPO's focus pertains to telecom, retail and CPG,
banking and financial services, insurance, hi-tech, manufacturing, media,
publishing and entertainment, and utilities. Apart from this, the company services
various areas of operations that include supply chain management, finance and
accounting services, knowledge and legal services, CRM, technical support services
and data management services. Vijay Reddy, senior VP, technologies, who has more
than twenty-five years experience in various areas including technology and
strategy deployment, is responsible for the overall technology functions of the
company. According to him, a CTO needs to wear multiple caps as a 'finance officer'
to tailor the expenses to the defined budgets, and deliver the best value for
money. He manages big budgets and expenditures and also is cautious about the
implementation of new technology and processes keeping in mind the business,
regulatory, and security risks. He also holds the responsibilities of a HR manager.
His role includes bringing business value to the system, portraying the benefits of
investments and profits, and also of selling IT as a service. In an interaction
with VOICE&DATA, he talks about the company's future plans. Excerpts What are your
green initiatives? A BPO environment demands a scalable, fail proof, and adoptable
technology infrastructure to meet its ever changing needs. HCL's BPO organization
has designed its ICT infrastructure to meet these demands, and is consistently
providing an uptime of more than 99%. A global delivery architecture was planned,
designed, and deployed to cater to the rapidly changing requirements of the
business. HCL's BPO organization is dedicated to green IT, and the ICT
infrastructure at the BPO organization can be described as the one that embodies
the green IT initiatives of HCL. Continual efforts are being put to save power, and
promote environmentally sustainable computing/IT practices to ensure that computing
resources are used efficiently. These efforts are implemented by deploying blade
and virtual server infrastructure, and optimal desktop configurations. How has
technology evolved over the past few years in the BPO industry? Technology
infrastructure, service, and skills have seen drastic changes over the past few
years. This is due to a number of initiatives with regard to bringing in the best
practices, streamline processes, augment skills, consolidate infrastructure for
improving cost effectiveness and customer satisfaction. Consolidation has resulted
in significant savings of both capital and operational expenses. The global WAN
infrastructure has evolved from point-to-point international private leased
circuits to meshed high capacity point-to-point connectivity that has not only
reduced the costs, but has also resulted in a scalable
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Providers network. Similar consolidations were done in servers and storage for
better utilization of resources, increasing availability and scalability, and
reducing management overheads. Development of the platform for infrastructure
management has brought in an enhanced value for internal and external customers.
Automated tools and defined processes have provided the facility to monitor,
manage, and support the infrastructure to provide both proactive and reactive
services by capturing every event. 24x7 has become a buzz word in IT services, and
our support teams are already providing round the clock services. Technology
practices in HCL BPO are certified for ISO 20000, the international standard for IT
service management. Our services are also certified for information security
standard ISO 27001. Technology department with the support of HCL management has
succeeded in bringing a process oriented support model. Which latest technologies
is HCL BPO planning to deploy in the next couple of years? Our present
infrastructure is built with a mix of multiple technologies, and keeping technology
upgraded is of utmost necessity to meet client requirements, bring about cost
effectiveness and infrastructure efficiency. Technology initiatives that we plan to
invest upon in the near future are implementation of web 2.0; IT services platform
upgrade, security operation center, open source software, and remote support for
services. How do you see technologies like 3G and WiMax helping your business?
Technologies such as 3G and WiMax are commendable technologies in the new age, and
I am sure that the implementation and usage of these technologies will grow
exponentially in the next few years. Given the nature of work and business that we
deal with, HCL's BPO organization does not as yet foresee a requirement to
implement these technologies. For HCL BPO's centers/branches in the remote areas,
how do you cope with connectivity challenges? What kind of ICT tools do you use?
HCL BPO provides global connectivity through trans-Atlantic and trans-Pacific
routes for the core network. This ensures the availability of a point-of-presence
across all global centers. It also introduces challenges to provide fast and secure
connectivity across these centers. HCL's BPO organization has a number of delivery
centers in Chennai, Noida, the UK, and the US. All these centers are centrally
located and well networked with the rest of HCL's global centers. HCL's BPO
organization ensures a high level of resilience, while connecting its delivery
centers using disparate routes and multiple suppliers. We have developed and
nurtured an exceptional IT management platform to manage our ICT infrastructure and
to measure end-to-end performance from our global
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Providers command center. It is also our practice to consolidate critical
infrastructure in pre-designated central locations where they can be easily
managed. For this very purpose, remote connectivity plays a pivotal role of
connecting mobile users across all the centers; and for that we have deployed a
safe, secure, and reliable solution. All the users are connected through the
Internet, and are routed through a secured encrypted tunnel to our network using
Cisco network access control. What would you say are the major technological trends
in the outsourcing industry? Change in the telecom infrastructure and Indian
regulation has already resulted in a major positive aspect for the outsourcing
industry. Additionally, technologies such as MPLS, VoIP has brought about a
considerable change in the way outsourcing worked in the past and present.
Technology has also proved its importance in operational areas with customer
relationship management, business process reengineering, workforce management, and
many other operational excellence solutions. The major trends in the outsourcing
industry today would be the various green IT initiatives, effective resource
utilization is a need, and technologies such as virtualization (server, desktop,
and application), blade technologies, storage consolidations, and improved security
management for data privacy has positively and effectively helped in fulfilling the
needs. What are the major issues being faced by the outsourcing industry today
where technology deployment is concerned? Technological challenges can be looked at
from different perspectives; it can be as simple as availability of adequate man-
skills, or it can be managing ROI of the technology deployed. Product obsolescence
is one of the main challenges, as products get obsolete at a much quicker rate now
than it did before. What are your expectations from telecom service providers to
help run your company efficiently and smoothly? Telecom service providers must
ensure a high uptime of 99.99% or more. With the advent of superior technology
practices, they should also adapt to industry practices such as IT service
management, and should come up with good problem management, root cause analysis
and resolution practices. There has also been a paradigm shift in customer
expectations; and to address this, a variable pricing model for advanced
technologies is of utmost importance.
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Providers 1.2.4. Union Talks Seen as Key as G.M. Makes Case for Funds G.M. will
file what is expected to be the largest restructuring plan of its 100-year history
on Tuesday, a step it must take to justify its use of a $13.4 billion loan package
from the federal government. The plan will outline in considerable detail, over as
many as 900 pages, how G.M. will further cut its work force, shutter more factories
in North America and reduce its lineup of brands to just four, from eight,
according to executives knowledgeable about its contents. The remaining core brands
will be Chevrolet, Cadillac, GMC and Buick. But G.M.’s plan to shrink its way to
profitability will not mean much without an agreement with the U.A.W. On Monday,
G.M. pressed union leaders in a meeting in Detroit for a deal on financing what was
the centerpiece of the 2007 U.A.W. contract — a perpetual, G.M.-financed trust to
cover health care costs of hundreds of thousands of retired hourly workers and
their surviving spouses. Both sides were hopeful that either an agreement, or at
least significant progress, might be achieved by the time G.M. submitted its plan,
according to three people familiar with the substance of the negotiations. Talks
are also continuing between the U.A.W. and Ford Motor and Chrysler. But the focus
of negotiations has been with G.M., which has to address how a company that lost
more than $20 billion last year can afford $5 billion a year in medical bills. In
its overall plan, G.M. needs to show President Obama’s new cabinet-level task force
that it can substantially reduce costs and make a convincing case about its long-
term viability by a March 31 deadline. The company has already extended buyout
offers to its entire United States unionized work force to reduce their ranks by
another 20,000 jobs. It has also announced a 14 percent reduction in salaried
workers around the world, leaving many of its white-collar workers in Detroit with
limited prospects. The plan will also probably include revisions in executive
compensation and targets for cutting dealers and brands like Saturn and Pontiac.
Details of the plan have been closely guarded. G.M.’s board met Monday to review
its contents, which will not be completed possibly until Tuesday, according to one
G.M. official who asked not to be identified because of confidentiality agreements.
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Providers Chrysler was also said to be in the final stages of completing its plan
on Monday, which will include further cuts in its manufacturing operations in the
United States and more details on its strategy to rebuild its product lineup with a
network of foreign alliances. The plan was still under discussion late Monday with
officials at Cerberus Capital Management, owner of an 80 percent stake, according
to a person with knowledge of the situation. The White House press secretary said
Monday that the Obama administration was “anxious” to see the plans, but shared no
timetable on when the president’s task force would comment. “We’re anxious to take
a look at the plans, understanding that it is extremely important to have a strong
and viable auto industry,” the press secretary, Robert Gibbs, told reporters aboard
Air Force One. “Obviously that is going to require some restructuring to ensure its
viability.” On Monday, the president designated the Treasury secretary, Timothy F.
Geithner, and the chairman of the National Economic Council, Lawrence H. Summers,
to oversee the task force on the auto industry. The move surprised executives at
G.M. and Chrysler, who were expecting the appointment of a “car czar” who would
play an active part in negotiations between G.M. and Chrysler and their unions and
lenders. The task force is not likely to complete any review of the plans for at
least a week or 10 days, according to an administration official who spoke on
condition of anonymity. The president expects negotiations between G.M. and the
U.A.W. and others to continue without pause for the plan’s submission, the official
said. Talks between G.M. and its bondholders have cooled while the automaker
considers the framework of an agreement offered by the bondholders to reduce G.M.’s
debt to $9 billion, from $28 billion. The U.A.W. talks, however, have been constant
since Saturday, when Ron Gettelfinger, the union’s president, at one point cut off
discussions with G.M. — only to drive across town to take up the topic of retiree
health care with Ford. Ford has not received government loans, so it is significant
that the U.A.W. appears to believe it must address retiree health care at all three
Detroit auto companies simultaneously. G.M. has the most at stake with the U.A.W.
Its future obligations for retiree health care are estimated at $47 billion, and by
next year it is required by its contract to contribute more than $10 billion to the
trust set up in 2007.
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Providers The company, which nearly ran out of money before receiving the first
$9.4 billion of its $13.4 billion in late December, is pressing the U.A.W. to
accept stock for as much as 50 percent of its next contribution to the trust,
according to two people knowledgeable about the discussions. Mr. Gettelfinger, for
his part, is trying to protect one of the jewels of the U.A.W. contract, which is
essentially health care for life for anyone who worked on the assembly line and
their surviving spouses. G.M. has already canceled health care for more than
100,000 of its salaried retirees. “The U.A.W. at this point understands that it can
very well turn into the villain of this whole thing by insisting that its workers
receive health care benefits that few workers do,” said Gary N. Chaison, a labor
expert at Clark University in Worcester, Mass. U.A.W. members are bracing for bad
news, and worrying that their health care plan will be sacrificed to keep G.M. from
going bankrupt. “Where does it all stop?” said Mike Green, president of U.A.W.
Local No. 652, which represents workers in Lansing, Mich. “It would be devastating.
Our typical person works between 30 and 40 years. They did their part. Why should
they have it taken away with the sweep of a pen?” 1.2.5. City Employee Pay Is
Outpacing Private Sector, Report Says Bolstered in part by Mayor Michael R.
Bloomberg’s spending, the average New York City employee cost the city $107,000 a
year in wages, health insurance, pension and other benefits in the 2008 fiscal
year, an increase of 63 percent since 2000, according to a new report. City worker
compensation grew twice as fast as that of employees in the private sector and
elsewhere in the public sector during the same period, the Citizens Budget
Commission said in the report, which was released on Thursday. The increase was
driven by contractual raises that outpaced the inflation rate, and by the rising
cost of health insurance and pension benefits, said the commission, a business-
backed research group. The group said those benefits have remained “exceptionally
generous” under Mr. Bloomberg. And with the city staring at a projected $7 billion
deficit by 2011, fiscal watchdogs are intensifying their calls for the Bloomberg
administration to act more aggressively to control employee costs. “These
skyrocketing costs are stunning,” said Carol Kellermann, president of the Citizens
Budget Commission, “and they impose an enormous, and growing, burden on
increasingly strained taxpayers. Corrective action is essential and can no longer
be delayed.” Mr. Bloomberg has long defended giving healthy raises to the city’s
workforce of 281,000 to attract the best people and make city jobs competitive with
those in the suburbs. Some critics contend that recent
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Providers contracts he has negotiated with teachers and police officers, among
others, are too generous, and have been driven by Mr. Bloomberg’s political aims as
he seeks warm relations with powerful unions. Critics also say that Mr. Bloomberg
has not been forceful enough addressing soaring health and pension benefit costs.
Those costs have jumped by 182 percent since 2000, according to the Citizens Budget
Commission, in contrast to a 52 percent increase for other state and local
governments, and a 40 percent increase for private industry. Part of the reason
that health benefits have jumped so much, the report said, is the city’s
longstanding practice, unchanged by Mr. Bloomberg, to pay 100 percent of health
insurance premiums for employees and their families, as well as for retirees and
their spouses. The report noted that “Most other employers require their workers to
pay some share of the premium.” Other factors are beyond the mayor’s control,
according to the report, such as actuarial recalculations and lower investment
returns, as evidenced recently by the impact of the recession. Still, Charles M.
Brecher, the commission’s research director, said: “His record is mixed. On the pay
side, he started out doing a terrific job, based on productivity, but his
performance has slipped. On fringe benefits I don’t think he’s been aggressive
enough to tackle the problems.” Mr. Bloomberg has had some success, however,
battling the Legislature’s seemingly endless desire to sweeten pension benefits.
Last month, Mr. Bloomberg developed the local component of an ambitious plan
unveiled by Gov. David A. Paterson seeking to reduce benefits for newly hired state
and local workers by creating a new pension category, which would require employees
to work longer and retire later to receive pension benefits, a move long opposed by
the unions. Indeed, the Citizens Budget Commission praises that proposal, and urges
the State Legislature to pass it. “I think the report is very clear,” said Marc
LaVorgna, a Bloomberg spokesman. “It lays the blame at the foot of pension costs.
Costs for employees are always going to go up. That’s not irregular. But we have
been extraordinarily burdened by a pension system that we have no control over.”
The report recommends that the city do more to restructure health insurance costs
by negotiating with the Municipal Labor Committee. The administration hopes to save
$200 million; the commission says “larger savings should be pursued on a more
urgent basis.” Asked about spiraling health care costs, Mr. LaVorgna said: “Rapidly
rising costs are not unique to New York City government. That’s a national problem
and there’s really not a local solution to what’s a national health care problem.”
Over all, the report found that city employee pay rose to an average of $69,000
annually as of last June 30, up from $52,000 in 2000, an annual increase of 3.6
percent, while inflation rose an average of 3.2
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Providers percent during the same period. Average benefits now cost almost $38,000
a year, up from $13,000 a year.
1.3
Conceptualization
The project report is based on Human Resource. Various studies will be done to make
a comparative analysis of fringe benefits between public and private telecom
service providers. It would include the various reforms in policies of public and
private telecom service providers.
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1.4
       
Focus of the Problem

Find out variances in fringe benefits provided by public and private telecom
service providers. Fringe benefits affecting the performance of employees. Impact
of fringe benefits on performance. Motivation level of employees affected. Work
efficiency increased. Find out the attrition rate. Find out how the employees can
become loyal. Productivity should be increased. Is there any conflict between the
employees regarding to fringe benefits.
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1.5
Objectives of the Study
The main objective of the study is to find out gaps between fringe benefits
provided by public and private telecom service provider.      Performance of
employees is effected fringe benefits. To find out the motivation level of
employees. Effect on efficiency because of Fringe benefits. Level of loyalty due o
fringe benefits. To keep in line with the prevailing practices of offering benefits
and services which are given by similar concerns.   To recruit and retain the
best personnel To provide for the needs of employees and protect them against
certain hazards of life, particularly those which an individual cannot himself
provide for  To increase and improve employee morale and create a helpful and
positive attitude on the part of workers towards their employers  To make the
organization a dominant influence in the lives of its employees with a view to
gaining their loyalty and co-operation, encouraging them to greater productive
efforts  To improve and furnish the organizational image in the eyes of the public
with a view to improving its market position and bringing about product acceptance
by it.  To recognize the official trade union’s bargaining strength, for a strong
trade union generally constrains an employer to adopt a sound benefits and services
programme for his employees.
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1.6

Hypotheses
H0: There is gap between the fringe benefits provided by public and private telecom
service providers.  H1: There is no gap between the fringe benefits provided by
public and private telecom service providers.
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2 Research Methodology
Research is an academic activity and the term is used in a technical sense.
According to Clifford, research comprises defining and redefining problems,
formulating hypothesis or suggested solution, collecting, organizing and evaluating
data making deductions and reaching conclusion, and at least carefully testing the
conclusions to determine whether they fit the formulating hypothesis. Research
methodology is a way to systematically solve the research problem. It may be
understood as a science of studying how research is done scientifically. In it we
study the various steps, the research process that is generally adopted to study
the research problem and basic logics behind them. The basic steps in this research
are shown in the chart below
2.1
Research Design
The formidable problem that follows the task of defining the research problem is
the preparation of design of the research project, popularly known as the research
design. Decisions regarding what, where, when, how much, by what means concerns an
inquiry or a research study constitute a research design". A research design is the
arrangement of condition for collection and analysis of data in a manner that aims
to combine relevance to the research purpose with economy in procedure. The
research will be Exploratory in nature. Exploratory research studies are also
termed as formulative research studies. The main purpose of such studies is that of
formulating a problem for more precise investigation or to developing the working
hypothesis from an operational point of view. The research design was characterized
by flexibility in order to be sensitive to the unexpected and to discover insight
not previously recognized.
2.2
Universe & Survey Population
Population: A population is a group of individuals’ persons, objects, or items from

which samples are taken for measurement for example a population of presidents or
professors, books or students. Universe:
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Employees of public and private sector telecom service provider
Sample: A sample is a finite part of a statistical population whose properties are

studied to gain information about the whole. When dealing with people, it can be
defined as a set of respondents (people) selected from a larger population for the
purpose of a survey. Sample Size: 60 Employees
2.3
Sample
Sampling: Sampling is the act, process, or technique of selecting a suitable

sample, or a representative part of a population for the purpose of determining
parameters or characteristics of the whole population. The desirability of a
sampling procedure depends on both its vulnerability to error and its cost.
However, economy and reliability are competing ends, because, to reduce error often
requires an increased expenditure of resources. Of the two types of statistical
errors, only sampling error can be controlled by exercising care in determining the
method for choosing the sample. Sampling Type: Convenient sampling Sampling Unit:
Individual
2.4
 
Collection of Data
Primary data: The primary data should be collected through questionnaires.
Secondary Data: These will be extracted from existing literature in magazines,
Internet, books, newspapers, etc.
Method of collecting data
2.5
Analysis Pattern
Analysis of data refers to the analyzing and interpreting the data collected. The
data should be analyzed with the help of charts, diagrams and tables.
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3 Organization of the Study

3.1 Modern growth
A large population, low telephony penetration levels, and a rise in consumers'
income and spending owing to strong economic growth have helped make India the
fastest-growing telecom market in the world. The first and largest operator is the
state-owned incumbent BSNL, which is also the 7th largest telecom company in the
world in terms of its number of subscribers. BSNL was created by corporatization of
the erstwhile DTS (Department of Telecommunication Services), a government unit
responsible for provision of telephony services. Subsequently, after the
telecommunication policies were revised to allow private operators, companies such
as Vodafone, Bharti Airtel, Tata Indicom, Idea Cellular, Aircel and Loop Mobile
have entered the space. see major operators in India. In 2008-09, rural India
outpaced urban India in mobile growth rate. India's mobile phone market is the
fastest growing in the world, with companies adding some 16.67 million new
customers a month. The total number of telephones in the country crossed the 543
million mark on Oct 2009.The overall teledensity has increased to 44.85% in Oct
2009. In the wireless segment, 17.65 million subscribers have been added in Nov
2009. The total wireless subscribers (GSM, CDMA & WLL (F)) base is more than 543.20
million now. The wireline segment subscriber base stood at 37.16 million with a
decline of 0.13 million in Nov 2009.
3.2
History
Telecom in the real sense means transfer of information between two distant points
in space. The popular meaning of telecom always involves electrical signals and
nowadays people exclude postal or any other raw telecommunication methods from its
meaning. Therefore, the history of Indian telecom can be started with the
introduction of telegraph.
3.1.1 Introduction of the telephone

In 1880, two telephone companies namely The Oriental Telephone Company Ltd. and The
Anglo-Indian Telephone Company Ltd. approached the Government of India to establish
telephone exchanges in India. The permission was refused on the grounds that the
establishment of telephones was a Government monopoly and that the Government
itself would undertake the work. By 1881, the Government changed its earlier
decision and a licence was granted to the Oriental Telephone Company Limited of
England for opening telephone exchanges at Kolkata, Mumbai, Chennai (Madras) and
Ahmedabad. 28 January 1882, is a Red Letter Day in the history of telephone in
India. On this day Major E. Baring, Member of the
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Providers Governor General of India's Council declared open the Telephone Exchange
in Kolkata, Chennai and Mumbai. The exchange at Kolkata named "Central Exchange"
was opened at third floor of the building at 7, Council House Street. The Central
Telephone Exchange had 93 number of subscribers. Bombay also witnessed the opening
of Telephone Exchange in 1882.
3.1.2 Further developments

• • • • 1902 - First wireless telegraph station established between Saugor Islands
and Sandheads. 1907 - First Central Battery of telephones introduced in Kanpur.
1913-1914 - First Automatic Exchange installed in Shimla. 23 July 1927 - Radio-
telegraph system between the UK and India, with beam stations at Khadki and Daund,
inaugurated by Lord Irwin by exchanging greetings with the King of England. • • • •
1933 - Radiotelephone system inaugurated between the UK and India. 1953 - 12
channel carrier system introduced. 1960 - First subscriber trunk dialing route
commissioned between Kanpur and Lucknow. 1975 - First PCM system commissioned
between Mumbai City and Andheri telephone exchanges. • • • 1976 - First digital
microwave junction introduced. 1979 - First optical fibre system for local junction
commissioned at Pune. 1980 - First satellite earth station for domestic
communications established at Secunderabad, A.P.. • • • 1983 - First analog Stored
Program Control exchange for trunk lines commissioned at Mumbai. 1984 - C-DOT
established for indigenous development and production of digital exchanges. 1985 -
First mobile telephone service started on non-commercial basis in Delhi.
While all the major cities and towns in the country were linked with telephones
during the British period, the total number of telephones in 1948 was only around
80,000. Even after independence, growth was extremely slow. The telephone was a
status symbol rather than being an instrument of utility. The
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Providers number of telephones grew leisurely to 980,000 in 1971, 2.15 million in
1981 and 5.07 million in 1991, the year economic reforms were initiated in the
country. While certain innovative steps were taken from time to time, as for
example introduction of the telex service in Mumbai in 1953 and commissioning of
the first [subscriber trunk dialing] route between Delhi and Kanpur in 1960, the
first waves of change were set going by Sam Pitroda in the eighties. He brought in
a whiff of fresh air. The real transformation in scenario came with the
announcement of the National Telecom Policy in 1994.
3.2
Emergence as a major player
In 1975, the Department of Telecom (DoT) was separated from P&T. DoT was
responsible for telecom services in entire country until 1985 when Mahanagar
Telephone Nigam Limited (MTNL) was carved out of DoT to run the telecom services of
Delhi and Mumbai. In 1990s the telecom sector was opened up by the Government for
private investment as a part of Liberalisation-Privatization-Globalization policy.
Therefore, it became necessary to separate the Government's policy wing from its
operations wing. The Government of India corporatised the operations wing of DoT on
01 October 2000 and named it as Bharat Sanchar Nigam Limited (BSNL). Many private
operators, such as Reliance Communications, Tata Telecom, Vodafone, Loop Mobile,
Airtel, Idea etc., successfully entered the high potential Indian telecom market.
3.2.1 Liberalisation of telcommunications in India

The Indian government was composed of many factions (parties) which had different
ideologies. Some of them were willing to throw open the market to foreign players
(the centrists) and others wanted the government to regulate infrastructure and
restrict the involvement of foreign players. Due to this political background it
was very difficult to bring about liberalization in telecommunications. When a bill
was in parliament a majority vote had to be passed, and such a majority was
difficult to obtain, given to the number of parties having different ideologies.
Liberalization started in 1981 when Prime Minister Indira Gandhi signed contracts
with Alcatel CIT of France to merge with the state owned Telecom Company (ITI), in
an effort to set up 5,000,000 lines per year. But soon the policy was let down
because of political opposition. She invited Sam Pitroda a US based NRI to set up a
Center for Development of Telematics(C-DOT), however the plan failed due to
political reasons. During this period, after the assassination of Indira Gandhi,
under the leadership of Rajiv Gandhi, many public sector organizations were set up
like the Department of Telecommunications (DoT) , VSNL and MTNL. Many technological
developments took place in this regime but still foreign players were not allowed
to participate in the telecommunications business.
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Providers The demand for telephones was ever increasing. It was during this period
that the P.N Rao led government introduced the national telecommunications policy
[NTP] in 1994 which brought changes in the following areas: ownership, service and
regulation of telecommunications infrastructure. They were also successful in
establishing joint ventures between state owned telecom companies and international
players. But still complete ownership of facilities was restricted only to the
government owned organizations. Foreign firms were eligible to 49% of the total
stake. The multi-nationals were just involved in technology transfer, and not
policy making.[16] During this period, the World Bank and ITU had advised the
Indian Government to liberalize long distance services in order to release the
monopoly of the state owned DoT and VSNL; and to enable competition in the long
distance carrier business which would help reduce tariff's and better the economy
of the country. The Rao run government instead liberalized the local services,
taking the opposite political parties into confidence and assuring foreign
involvement in the long distance business after 5 years. The country was divided
into 20 telecommunication circles for basic telephony and 18 circles for mobile
services. These circles were divided into category A, B and C depending on the
value of the revenue in each circle. The government threw open the bids to one
private company per circle along with government owned DoT per circle. For cellular
service two service providers were allowed per circle and a 15 years license was
given to each provider. During all these improvements, the government did face
oppositions from ITI, DoT, MTNL, VSNL and other labor unions, but they managed to
keep away from all the hurdles. After 1995 the government set up TRAI (Telecom
Regulatory Authority of India) which reduced the interference of Government in
deciding tariffs and policy making. The DoT opposed this. The political powers
changed in 1999 and the new government under the leadership of Atal Bihari Vajpayee
was more pro-reforms and introduced better liberalization policies. They split DoT
in two- one policy maker and the other service provider (DTS) which was later
renamed as BSNL. The proposal of raising the stake of foreign investors from 49% to
74% was rejected by the opposite political party and leftist thinkers. Domestic
business groups wanted the government to privatize VSNL. Finally in April 2002, the
government decided to cut its stake of 53% to 26% in VSNL and to throw it open for
sale to private enterprises. TATA finally took 25% stake in VSNL. This was a
gateway to many foreign investors to get entry into the Indian Telecom Markets.
After March 2000, the government became more liberal in making policies and issuing
licenses to private operators. The government further reduced license fees for
cellular service providers and increased the allowable stake to 74% for foreign
companies. Because of all these factors, the service fees finally reduced and the
call costs were cut greatly enabling every common middle class family in India to
afford a cell phone.
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3.2.2 Growth of mobile technology

India has become one of the fastest-growing mobile markets in the world. The mobile
services were commercially launched in August 1995 in India. In the initial 5–6
years the average monthly subscribers additions were around 0.05 to 0.1 million
only and the total mobile subscribers base in December 2002 stood at 10.5 millions.
However, after the number of proactive initiatives taken by regulator and licensor,
the monthly mobile subscriber additions increased to around 2 million per month in
the year 2003-04 and 2004-05. Although mobile telephones followed the New Telecom
Policy 1994, growth was tardy in the early years because of the high price of hand
sets as well as the high tariff structure of mobile telephones. The New Telecom
Policy in 1999, the industry heralded several pro consumer initiatives. Mobile
subscriber additions started picking up. The number of mobile phones added
throughout the country in 2003 was 16 million, followed by 22 million in 2004, 32
million in 2005 and 65 million in 2006. As of January 2009, total mobile phone
subscribers numbered 362 million, having added 15 million that month alone [18].
India ranks second in mobile phone usage to China, with 506 million users as of
November 2009. India has opted for the use of both the GSM (global system for
mobile communications) and CDMA (code-division multiple access) technologies in the
mobile sector. In addition to landline and mobile phones, some of the companies
also provide the WLL service. The mobile tariffs in India have also become lowest
in the world. A new mobile connection can be activated with a monthly commitment of
US$0.15 only. In 2005 alone 32 million handsets were sold in India. The data
reveals the real potential for growth of the Indian mobile market. In March 2008
the total GSM and CDMA mobile subscriber base in the country was 375 million, which
represented a nearly 50% growth when compared with previous year. In April 2008 the
Indian Department of Telecom (DoT) has directed all mobile phone service users to
disconnect the usage of unbranded Chinese mobile phones that do not have
International Mobile Equipment Identity (IMEI) numbers, because they pose a serious
security risk to the country. Mobile network operators therefore planned to suspend
the usage of around 30 million mobile phones (about 8 % of all mobiles in the
country) by 30 April.
3.3
Revenue and growth
The total revenue in the telecom service sector was Rs. 86,720 crore in 2005-06 as
against Rs. 71, 674 crore in 2004-2005, registering a growth of 21%. The total
investment in the telecom services sector reached Rs. 200,660 crore in 2005-06, up
from Rs. 178,831 crore in the previous fiscal.
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Providers Telecommunication is the lifeline of the rapidly growing Information
Technology industry. Internet subscriber base has risen to 6.94 million in 2005-
2006. Out of this 1.35 million were broadband connections. More than a billion
people use the internet globally. Under the Bharat Nirman Programme, the Government
of India will ensure that 66,822 revenue villages in the country, which have not
yet been provided with a Village Public Telephone (VPT), will be connected. However
doubts have been raised about what it would mean for the poor in the country. It is
difficult to ascertain fully the employment potential of the telecom sector but the
enormity of the opportunities can be gauged from the fact that there were 3.7
million Public Call Offices in December 2005up from 2.3 million in December 2004.
The value added services (VAS) market within the mobile industry in India has the
potential to grow from $500 million in 2006 to a whopping $10 billion by 2009.
3.4
Telephone
On landlines, intra circle calls are considered local calls while inter circle are
considered long distance calls. Currently Government is working to integrate the
whole country in one telecom circle. For long distance calls, you dial the area
code prefixed with a zero. For international calls, you would dial "00" and the
country code+area code+number. The country code for India is 91. Until recently,
only the PSU's BSNL and MTNL were allowed to provide Basic Phone Service through
copper wires in India. MTNL is operating in Delhi and Mumbai only and all other
parts are covered by BSNL. However private operators have now entered the fray,
although their focus is largely on the cellular business which is growing rapidly.
Telephony Subscribers (Wireless and Landline): 543.20 million (Nov 2009)
Cellphones: 506.04 million (Nov 2009) Land Lines: 37.16 million (Nov 2009) Yearly
Cellphone Addition: 113.26 million (2007) Monthly Cellphone Addition: 17.65 million
(Nov 2009) Teledensity: 46.32% (Nov 2009) Projected teledensity: 626 million, 46%
of population by 2010.
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3.4.1 Wireless telephones

The Mobile telecommunications system in India is the second largest in the world
and it was thrown open to private players in the 1990s. The country is divided into
multiple zones, called circles (roughly along state boundaries). Government and
several private players run local and long distance telephone services. Competition
has caused prices to drop and calls across India are one of the cheapest in the
world. The rates are supposed to go down further with new measures to be taken by
the Information Ministry. The mobile service has seen phenomenal growth since 2000.
In September 2004, the number of mobile phone connections have crossed fixed-line
connections. India primarily follows the GSM mobile system, in the 900 MHz band.
Recent operators also operate in the 1800 MHz band. The dominant players are
Airtel, Reliance Infocomm, Vodafone, Idea cellular and BSNL/MTNL. There are many
smaller players, with operations in only a few states. International roaming
agreements exist between most operators and many foreign carriers. Main article:
List of mobile network operators of India The breakup of wireless subscriber base
in India as of November 2009 is given below Operator Bharti Airtel Vodafone Essar
BSNL Idea Cellular Tata Teleservices Aircel MTNL Loop Mobile MTS India HFCL Infotel
All India Subscriber base 116,013,951 88,607,607 60,780,512 55,905,178 53,992,973
29,354,370 4,819,430 2,595,454 2,644,338 342,749 506,044,156
Reliance Communications 90,987,594
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Providers The list of ten states (including the metros Mumbai, Kolkata and Chennai
in their respective states) with largest subscriber base as of September 2009 is
given below
State Maharashtra Uttar Pradesh Tamil Nadu West Bengal Karnataka Rajasthan Gujarat
Bihar All India
Subscriber base 58,789,949 57,033,513 45,449,460 32,540,049 28,867,734 27,742,395

27,475,585 27,434,896 471,726,205
Wireless density'" 51.96 26.32 63.66 42.58 34.28 46.76 39.09 45.49 25.04 33.09
37.71
Andhra Pradesh 37,126,048
Madhya Pradesh 24,923,739
Wireless density was calculated using projected population of states from the
natural growth rates of 1991-2001 and population of 2001 census.
3.4.2 Landlines
Landline service in India is primarily run by BSNL/MTNL and Reliance Infocomm
though there are several other private players too, such as Touchtel and Tata
Teleservices. Landlines are facing stiff competition from mobile telephones. The
competition has forced the landline services to become more efficient. The landline
network quality has improved and landline connections are now usually available on
demand, even in high density urban areas. The breakup of wireline subscriber base
in India as of September 2009 is given below.
Operator BSNL MTNL Bharti Airtel
Subscriber base 28,446,969 3,514,454 2,928,254
Reliance Communications 1,152,237
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Providers
Tata Teleservices HFCL Infotel Teleservices Ltd All India
1,003,261 165,978 95,181 37,306,334
The list of eight states (including the metros Mumbai, Kolkata and Chennai in their
respective states) with largest subscriber base as of September 2009 is given
below.
State Maharashtra Tamil Nadu Kerala Uttar Pradesh Karnataka Delhi West Bengal
Subscriber base 5,996,912 3,620,729 3,534,211 2,803,049 2,751,296 2,632,225

2,490,253
Andhra Pradesh 2,477,755
3.5
Internet
The total subscriber base for internet in India is 13.54 million. The number of
broadband connections in India has seen a continuous growth since the beginning of
2006. At the end of November 2009, total broadband connections in the country have
reached 7.57 million. BSNL, Tata Teleservices, Airtel, Reliance Communications,
Sify, MTNL, STPI, Netcom, Railtel, GAILTEL, You Telecom, Spice and Hathway are some
of the major ISPs in India. TRAI has defined broadband as 256 kbit/s or higher.
However, many ISPs advertise their service as broadband but don't offer the
suggested speeds. Broadband in India is more expensive as compared to Western
Europe/United Kingdom and United States. After economic liberalization in 1992,
many private ISPs have entered the market, many with their own local loop and
gateway infrastructures. The telecom services market is regulated by TRAI. ADSL
providers include: • • Tata Communications Ltd. (VSNL) MTNL/BSNL
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Providers • •
Bharti Telecom (Airtel, Bharti Televentures) Reliance Infocomm
Because of the increase in ISPs and the quality of service Qos, It became cheaper
to call India from around the world. Many Indians today, studying or living all
around the world, are using calling cards to India to speak with their families
back home. It used to be much more expensive prior to 2002.
3.5.1 Broadband
The current definition of Broadband in India is speeds of 256 kbit/s. TRAI on July
2009 has recommened raising this limit to 2 Mbps. As of September 2009, India has
7.21 million broadband users. Although, India ranks one of the lowest provider of
broadband speed as compared to other countries like Japan, South Korea or France.
In the fixed line arena, BSNL and MTNL are the incumbents in their respective areas
of operation and continue to enjoy the dominant service provider status in the
domain of fixed line services. For example BSNL controls 79% of fixed line share in
the country. On the other hand, in the mobile telephony space, Airtel controls
21.4% subscriber base followed by Reliance with 20.3%, BSNL with 18.6%, Vodafone
with 14.7% subscriber base (as per June 2005 data). Airtel and BSNL have launched 8
Mbit/s & Reliance Communication offers 10 Mb/s broadband internet services in
selected areas recently . For home users , the maximum speed for unlimited
downloads is 2 Mbit/s , available for USD 60 (roughly , without taxes) per month.
3.6
Broadcasting
Radio broadcast stations: AM 153, FM 91, shortwave 68 (1998) Radios: 116 million
(1997) Television terrestrial broadcast stations: 562 (of which 82 stations have 1
kW or greater power and 480 stations have less than 1 kW of power) (1997)
Televisions: 110 million (2006) In India, only the government owned Doordarshan
(Door = Distant = Tele, Darshan = Vision) is allowed to broadcast terrestrial
television signals. It initially had one major National channel (DD National) and a
Metro channel in some of the larger cities (also known as DD Metro).
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Providers Satellite/Cable television took off during the first Gulf War with CNN.
There are no regulations against ownership of satellite dish antennas, or operation
of cable television systems, which led to an explosion of viewership and channels,
led by the Star TV group and Zee TV. Initially restricted to music and
entertainment channels, viewership grew, giving rise to several channels in
regional languages and many in the national language, Hindi. The main news channels
available were CNN and BBC World. In the late 1990s, many current affairs and news
channels sprouted, becoming immensely popular because of the alternative viewpoint
they offered compared to Doordarshan. Some of the notable ones are Aaj Tak (means
Till Today, run by the India Today group) and STAR News, CNN-IBN, Times Now,
initially run by the NDTV group and their lead anchor, Prannoy Roy (NDTV now has
its own channels, NDTV 24x7, NDTV Profit, NDTV India and NDTV Imagine).New Delhi
TeleVision.
3.7
Next generation networks
In the Next Generation Networks, multiple access networks can connect customers to
a core network based on IP technology. These access networks include fibre optics
or coaxial cable networks connected to fixed locations or customers connected
through wi-fi as well as to 3G networks connected to mobile users. As a result, in
the future, it would be impossible to identify whether the next generation network
is a fixed or mobile network and the wireless access broadband would be used both
for fixed and mobile services. It would then be futile to differentiate between
fixed and mobile networks – both fixed and mobile users will access services
through a single core network. Indian telecom networks are not so intensive as
developed country’s telecom networks and India's teledensity is low only in rural
areas. 670,000 route kilometers (419,000 miles) of optical fibres has been laid in
India by the major operators, even in remote areas and the process continues. BSNL
alone, has laid optical fibre to 30,000 Telephone Exchanges out of their 36
Exchanges. Keeping in mind the viability of providing services in rural areas, an
attractive solution appears to be one which offers multiple service facility at low
costs. A rural network based on the extensive optical fibre network, using Internet
Protocol and offering a variety of services and the availability of open platforms
for service development, viz. the Next Generation Network, appears to be an
attractive proposition. Fibre network can be easily converted to Next Generation
network and then used for delivering multiple services at cheap cost.
3.8
Mobile Number Portability (MNP)
Number portability: TRAI announced the rules and regulations to be followed for the
Mobile Number Portability in their draft release on 23 September 2009. Mobile
Number Portability (MNP) allows users to retain their numbers, while shifting to a
different service provider provided they follow the guidelines
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Providers set by TRAI. Users are expected to holding the mobile number with a given
provider for at least 90 days, before they decide to move to the other provider. As
per news reports, Government of India decided to implement MNP from December 31st,
2009 in Metros & category ‘A’ service areas and by March 20th, 2010 in rest of the
country.
3.9
• •
International Nine satellite earth stations - 8 Intelsat (Indian Ocean) and 1

Inmarsat (Indian Ocean region). Nine gateway exchanges operating from Mumbai, New
Delhi, Kolkata, Chennai, Jalandhar, Kanpur, Gandhinagar, Hyderabad and Ernakulam.
3.9.1 Submarine cables

• • • LOCOM linking Chennai to Penang, Malaysia India-UAEcable linking Mumbai to Al
Fujayrah, UAE. SEA-ME-WE 2, SEA-ME-WE 3, SEA-ME-WE 4 - (South East Asia-Middle
East-Western Europe) with landing sites at Cochin and Mumbai. • • Fiber-Optic Link
Around the Globe (FLAG) with a landing site at Mumbai (2000). I-ME-WE with two
landing sites at Mumbai (2009).
4 Data Analysis & Interpretation

4.1
1.
Questionnaire Analysis
What is the criterion of allocating different benefits between different levels of
employees?
Basis On the basis of grades On the basis of basic salary At the option of
employees Any other (specify)
BSNL 30 0 0 0
Airtel 15 15 0 0
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Providers
Interpretation: While going through data analysis it is found that in BSNL

criterion of allocating different benefits between different levels of employees is
on the basis of graides, and in Bhartia Airtel it’s depends on the basis of the
grades and on the basis of basic salary.
2.
How do you segregate and apportion the various fringe benefits between different
grades and designations of employees?
Basis Same benefits for all grades and designations of employees Different benefits
for different grades and designations of employees Increase the benefits according
to increase in grade pay and designations of employees
BSNL 30 0 0
Airtel 13 3 14
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Providers
Interpretation: While going through data analysis it is found that out of 30

employees of BSNL all of segregate and apportion the various fringe benefits
between different grades and designations of employees is based on Same benefits
for all grades and designations of employees, and in Bhartia Airtel out of 30, 14
sayes it’s based on Increase the benefits according to increase in grade pay and
designations of employees, 13 sayes that it’s based on Same benefits for all grades
and designations of employees. 3. Which of the following Fringe Benefits (taxable
in the hands of employee) are given in your organisation?
Basis Facility of interest-free or concessional housing loan Facility of interest-

free or concessional car loan Facility of interest-free or concessional education
loan Facility of interest-free or concessional personal loan Use of movable
assets(motor car, other assets)
BSNL 30 30 30 30 8
Airtel 23 20 4 10 0
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Providers

employees of BSNL sayes that company can provide them Facility of interest-free or
concessional housing loan, Facility of interestfree or concessional car loan,
Facility of interest-free or concessional education loan, Facility of interestfree
or concessional personal loan.
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Providers

employees of Bhartia Airtel sayes that company can provide some of them facility of
interest-free or concessional housing loan, less no of employees can facilitate
with facility of interest-free or concessional car loan, Facility of interestfree
or concessional education loan, facility of interest-free or concessional personal
loan.
4.
Benefits are provided in _______________ form.
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Providers
Basis Monetary Non- Monetary
BSNL 30 0
Airtel 30 0

employees of Bhartia Airtel and BSNL says that they are benefitted by monetary
benefitted.
5.
Benefits form what percentage of the total CTC package?
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Providers
Basis 5-10 10-15 15-20 20-25 25-30
BSNL 12 5 8 3 2
Airtel 4 10 13 1 2

employees of Bhartia Airtel 13 employees says Benefits form what percentage of the
total CTC package is 1520, 10 says that its 10-15 and out of 30 employees of BSNL
12 says that it’s 5-10, 8 employees says it’s 15-20.
6.
Your organisation provide a CTC package which is ___________
Basis Heavy on basic salary and other allowances Heavy on reimbursements and fringe
benefits As per the negotiation by the employee
BSNL 23 5 2
Airtel 1 20 9
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Providers
Interpretation: While going through data analysis it is found that organisation

provide a CTC package out of 30 employees of BSNL 23 employees says Heavy on basic
salary and other allowances, others says it’s heavy on reimbursements and fringe
benefits.
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Providers
Interpretation: While going through data analysis it is found that organisation

provide a CTC package out of 30 employees of Bhartia Airtel 20 says it’s based on
heavy on reimbursements and fringe benefits, or 9 employees sys that it’s depends
on As per the negotiation by the employee.
7.
Abolition of Fringe Benefit Tax with effect from assessment year 2010-11 will
benefit
Basis The Company The Employees
BSNL 0 30
Airtel 30 0
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Providers
Interpretation: While going through data analysis it is found that Abolition of

Fringe Benefit Tax with effect from assessment year 2010-11 will benefit out of 30
employees of Bhartia Airtel 30 says The Company and 30 employees of the BSNL says
that it,s by emplouees.
8.
What will be the effect of providing more benefits to employees after the abolition
of Fringe Benefit Tax?
Basis Tax liability will increase and Net Take-Home-Pay
BSNL 30
Airtel 2
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Providers
decrease Tax liability will decrease and Net Take-Home-Pay increase
28
Interpretation: While going through data analysis it is found that will be the
effect of providing more benefits to employees after the abolition of Fringe
Benefit Tax out of 30 employees of Bhartia Airtel 28 says tax liability will
decrease and Net Take-Home-Pay increase, and 2 says tax liability will increase and
Net Take-Home-Pay decrease. and 30 employees of the BSNL says that it’s tax
liability will increase and Net Take-Home-Pay decrease 9. Who bears the liability
of paying Fringe benefits Tax in your organisation?
Basis The employer The employee The employer but recover from employee Partially
the employer and partially the employee
BSNL 0 30 0 0
Airtel 0 0 30 0
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Providers
Interpretation: While going through data analysis it is found that bears the
liability of paying Fringe benefits Tax in your organisation out of 30 employees of
Bhartia Airtel 30 says the employer but recover from employee. and 30 employees of
the BSNL says that it’s the employee.
Rate on a scale of 1 to 5, 1 meaning “Not preferable” and 5 meaning “preferable”

10. Will the employees prefer more fringe benefits to more basic salary and
allowances in the same CTC package in this period of rising prices, cost of living
and tax liability ( after the abolition of Fringe Benefit Tax)?
Basis 1 2 3 4
BSNL 0 2 11 14
Airtel 1 1 9 10
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Providers

employees of BSNL 14 employees says 4, 11 says 3,5 says 5.
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Providers

employees of Bhartia Airtel 10 says 3, 9 says 3 and 8 says 5.
11. Will the organisation prefer giving more fringe benefits to more basic salary
and allowances within the same CTC package to the employees during this time of
economic downturn (after the abolition of Fringe Benefit Tax)?
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Providers
Basis 1 2 3 4 5
BSNL 0 3 10 13 5
Airtel 0 1 8 9 12

employees of BSNL 13 says 4, 10 says 3 and 5 says 5.
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Providers

employees of Bhartia Airtel 12 says 5, 10 says 4 and 8 says 3.
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Providers
4.2
SWOT Analysis
4.2.1 Strengths
 Fringe benefits motivated the employees.
 Fringe benefits play crucial role in the increasing the performance of employees.
 The employees will perform their work with best of their abilities.
 The fringe benefits play a vital role in achieving the organizational objectives.
 Fringe benefits increase the efficiency of employees.  Fringe benefits enhance
the leadership quality of employees.  Fringe benefits helpful in increasing the
productivity.
   Fringe benefits are increasing the attrition rate. Fringe benefits are making
loyal to employees towards the company. High rate of fringe benefits decrease the
rate of conflicts between the employees and employers regarding to fringe benefits.
 Fringe benefits prevailing practices of offering benefits and services which are
given by similar concerns.  Fringe benefits helpful in recruit and retain the best
personnel.
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Providers
4.2.2 Weaknesses
  Fringe benefits are the main reason of increasing the rate of conflict in
organization. Less no of benefits increase dissatisfaction level of employees.
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Providers
4.2.3 Opportunities
     To create and improve sound industrial relations To boost up employee
morale. To motivate the employees by identifying and satisfying their unsatisfied
needs. To provide qualitative work environment and work life. To provide security
to the employees against social risks like old age benefits and maternity benefits.
   To protect the health of the employees and to provide safety to the employees
against accidents. To promote employees welfare by providing welfare measures like
recreation facilities. To create a sense of belongingness among employees and to
retain them. Hence, fringe benefits are called golden hand-cuffs.
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Providers
4.2.4 Threats
 If competitors provide better benefits to there employees than experienced
employees can skip towards the competitor company. Any conflicts arise due to the
benefits than industrial relations are not so good. Due to benefits employees can
be demotivatied.
Decrees the motivation level of employees Decrees the loyalty of employees due to
fringe benefits.
Productivity should be decreased.
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Providers
4.3
Case Study Analysis
Abstract:
The announcement came as s jolt not only to TCS employees but also to the entire
Indian IT industry. The company came in for severe criticism and it was accused of
not being transparent with respect to EVA calculation. However, some analysts felt
that the pay cuts were a result of the macroeconomic challenges that the Indian IT
companies were facing rapid appreciation of the rupee against the US dollar and the
recession in the US economy (USA was the largest market for the Indian IT
companies)
Issues:
» Analyze TCS' HR practices with respect to its policy related to compensation of
its employees. » Discuss various concepts related to compensation management. »
Discuss the importance of variable compensation in light of its ability to motivate
employees and enhance organizational productivity. » Discuss the pros and cons of
the EVA-based compensation management system and also analyze EVA as a performance
measurement tool. » Understand the rationale behind the cut in the compensation of
the employees at TCS. » Understand how macroeconomic variables could affect a
company's HR policies. » Appreciate the importance of HR goals and strategies in
the success of an organization Contents:
Key Words:
Compensation management, EVA, Variable compensation, Fixed pay, Wage inflation,
Human resource, Employee Stock Options, Performance appraisal, Employee morale,
Incentives, HR policies, Recruitment, Employee satisfaction, Employee attrition,
Retrenchment, Retaining, Employee training, Career development, Tata Consultancy
Services, Satyam Computers, Wipro, Infosys, Information technology "There's no
ceiling on the bonus. It can be equal to the fixed portion of the salary, providing
the cell has shown that kind of EVA growth. It is not just compensation, we wish
our employees to also get a feeling
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Providers of ownership for their own unit, and its performance. We want each
employee to feel as if they are running their business. They have to think like
entrepreneurs and know the cost attached to their business and how will they add
value to the investment."1 - S. Ramadorai, CEO and Managing Director, Tata
Consultancy Services Ltd., in 2000, Regarding its Economic Value Added (EVA)-based
Compensation Management System. "We undertake a review of variable pay every
quarter and this time, we decided to make an adjustment."2 - S. Padmanabhan, Global
Human Resources Head and Executive Director, Tata Consultancy Services Ltd, in
February 2008. "This wage cut is a reflection of the caution. It reinforces the
management view of macroeconomic challenges."3 - Harit Shah, Research Analyst,
Angel Broking4, in February 2008.
Squeezing the Employee Pay Packets

During the fourth quarter of financial year (FY) 2007-2008, Tata Consultancy
Services Limited (TCS), the largest Information Technology (IT) Company in India
announced its plans to cut 1.5 percent of the variable component of employees'
compensation. It clarified, however, that there would not be any changes in the
perquisites of its employees. The rapid appreciation of the Indian Rupee against
the US dollar over the previous year and the imminent recession in the US economy,
which was the biggest market for the Indian IT companies, had put a lot of pressure
on Indian IT companies. The announcement came soon after TCS found it unable to
achieve its Economic Value Added (EVA) target for the third quarter of the FY 2007-
2008. The unprecedented move by TCS caught the entire IT Industry by surprise. The
EVA payment made in advance for the third quarter was to be deducted from the
variable salaries in the fourth quarter. The variable component of the salaries of
the TCS employees constituted 30 percent of their total compensation, and even went
up to 40-50 percent in the case of senior management. The decision came as a shock
to many employees and the media gave wide coverage to TCS' decision. The employees'
fears were compounded when TCS showed some 500 of its employees the door in
February 2008 on performance grounds. Established in 1968, TCS was the market
leader among the Indian IT industry as of 2008. Its revenues for the third quarter
of the FY 2007-2008 increased by 5.04 percent to Indian Rupees (Rs.) 59.24 billion
and net profit rose by 6.72 percent to Rs. 13.31 billion.5
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Providers
In the wake of the appreciating rupee and signs of recession in the US economy, TCS
decided to cut salaries since the company's margins were severely impacted.
According to S Mahalingam (Mahalingam), Chief Financial Officer (CFO), TCS,
"Fundamentally the business operates on sound principles...
Background Note
TCS was established in 1968 with its headquarters in Mumbai. It was formed as a
division of Tata Sons Limited (TSL), one of India's largest business conglomerates,
and was called 'Tata Computer Center.' F C Kohli (Kohli) was appointed as the first
General Manager in 1969.
Soon after, the division was renamed Tata Consultancy Services (TCS). During its
early days, TCS, with a staff of 10 consultants and 200 operators, undertook IT
consulting assignments with other Tata Group companies. For instance, it managed
the punch card operations of Tata Iron and Steel Company (TISCO)...
The HR Policies
TCS gave utmost importance to its human resource function. The company viewed its
employees as assets, which had to be utilized efficiently. The TCS senior
management constantly kept track of the vast intellectual assets, their skill sets,
the status of projects on which they were working, and the number of people
available for being placed in other projects...
Performance-Linked Salary Structure

Despite being rated as one of the top IT employers in India, however, TCS had drawn
criticism for its compensation structure.
According to the employees the salaries were not on a par with the industry
standards. TCS was also under pressure to follow the Employee Stock Options (ESOP)
schemes followed by its competitors. ESOPs had emerged as one of the most powerful
tools for retaining employees...
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Providers
TCS Announces Pay Cuts

In January 2008, the management of TCS gave a jolt to its employees by announcing
its plans to cut 1.5 percent of the variable component of the total compensation of
its employees. The reason cited for this was the company's inability to meet the
EVA target for the third quarter of the FY 2007-2008...
The Reasons
TCS cited several reasons for cutting down employee salaries. The major reason for
the unprecedented cut in variable pay was its inability to meet the EVA target for
the third quarter of the FY 2007-2008. The rise of the rupee against the US dollar
was another major concern for TCS. The rupee had appreciated by 12 percent against
the US dollar, building tremendous pressure on the company's margins and revenues.
(Refer to Exhibit IV to see how Indian Rupees rose against the dollar; and Exhibit
V for how IT/ITES companies have reacted to the rupee rise)...
The Debate
TCS' move to cut employee salaries received severe criticism from some quarters.
TCS' reputation as one of the topmost IT employers in India took a beating as its
decision to cut salaries shocked many of its employees. Many employees even opined
that TCS could have cut down on some of its other expenses instead of cutting the
compensation of its employees...
Outlook
Despite TCS' claim that it would make salary adjustments in the next quarter, the
employees remained divided and expected this trend to continue. A TCS employee
said, "Though the official word is that the situation will be reviewed by March
end, we are preparing for a regime wherein we continue with a pruned salary."
Further, the pay hikes of employees in the Indian IT industry were poised to become
moderate with pressure building on export earnings of Indian IT companies due to
the rising rupee and signs of a slowdown in the technology spend in the US due to
recession...
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Providers
4.3.1 Summary
companies) Analyze TCS' HR practices with respect to its policy related to
compensation of its employees. Discuss various concepts related to compensation
management. Discuss the importance of variable compensation in light of its ability
to motivate employees and enhance organizational productivity. Discuss the pros and
cons of the EVA-based compensation management system and also analyze EVA as a
performance measurement tool. Understand the rationale behind the cut in the
compensation of the employees at TCS. Understand how macroeconomic variables could
affect a company's HR policies. Appreciate the importance of HR goals and
strategies in the success of an organization
During the fourth quarter of financial year (FY) 2007-2008, Tata Consultancy
Services Limited (TCS), the largest Information Technology (IT) company in India
compensation. It clarified, however, that there would not be any changes in the
perquisites of its employees. The rapid appreciation of the Indian Rupee against
the US dollar over the previous year and the imminent recession in the US economy,
which was the biggest market for the Indian IT companies, had put a lot of pressure
on Indian IT companies. The announcement came soon after TCS found it unable to
achieve its Economic Value Added (EVA) target for the third quarter of the FY 2007-
2008. The unprecedented move by TCS caught the entire IT Industry by surprise. The
EVA payment made in advance for the third quarter was to be deducted from the
variable salaries in the fourth quarter. The variable component of the salaries of
the TCS employees constituted 30 percent of their total compensation, and even went
up to 40-50 percent in the case of senior management. The decision came as a shock
to many employees and the media gave wide coverage to TCS' decision. The employees'
fears were compounded when TCS showed some 500 of its employees the door in
February 2008 on performance grounds.TCS gave utmost importance to its human
resource function. The
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Providers company viewed its employees as assets, which had to be utilized
efficiently. The TCS senior management constantly kept track of the vast
intellectual assets, their skill sets, the status of projects on which they were
working, and the number of people available for being placed in other projects...
In January 2008, the management of TCS gave a jolt to its employees by announcing
its plans to cut 1.5 percent of the variable component of the total compensation of
its employees. The reason cited for this was the company's inability to meet the
EVA target for the third quarter of the FY 2007-2008... The major reason for the
unprecedented cut in variable pay was its inability to meet the EVA target for the
third quarter of the FY 2007-2008. The rise of the rupee against the US dollar was
another major concern for TCS. The rupee had appreciated by 12 percent against the
US dollar, building tremendous pressure on the company's margins and revenues.
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Providers
4.3.2 Fact Analysis

   Analyze TCS' HR practices with respect to its policy related to compensation
of its employees. Discuss various concepts related to compensation management.
Discuss the importance of variable compensation in light of its ability to motivate
employees and enhance organizational productivity.  Discuss the pros and cons of
the EVA-based compensation management system and also analyze EVA as a performance
measurement tool.     Understand the rationale behind the cut in the
compensation of the employees at TCS. Understand how macroeconomic variables could
affect a company's HR policies. Appreciate the importance of HR goals and
strategies in the success of an organization Compensation management, EVA, Variable
compensation, Fixed pay, Wage inflation, Human resource, Employee Stock Options,
Performance appraisal, Employee morale, Incentives, HR policies, Recruitment,
Employee satisfaction, Employee attrition, Retrenchment, Retaining, Employee
training, Career development, Tata Consultancy Services, Satyam Computers, Wipro,
Infosys, Information technology.  Information Technology (IT) company in India
compensation.  The EVA payment made in advance for the third quarter was to be
deducted from the variable salaries in the fourth quarter.  The EVA payment made
in advance for the third quarter was to be deducted from the variable salaries in
the fourth quarter.  The variable component of the salaries of the TCS employees
constituted 30 percent of their total compensation, and even went up to 40-50
percent in the case of senior management.  The decision came as a shock to many
employees and the media gave wide coverage to TCS' decision.  TCS gave utmost
importance to its human resource function. The company viewed its employees as
assets, which had to be utilized efficiently.
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Providers
4.3.3 Problem Solving – Primary Issues & Secondary Issues
  
Analyze TCS' HR practices with respect to its policy related to compensation of its
employees. Discuss various concepts related to compensation management. Discuss the
importance of variable compensation in light of its ability to motivate employees
and enhance organizational productivity.
Discuss the pros and cons of the EVA-based compensation management system and also
analyze EVA as a performance measurement tool.
   
Understand the rationale behind the cut in the compensation of the employees at
TCS. Understand how macroeconomic variables could affect a company's HR policies.
Appreciate the importance of HR goals and strategies in the success of an
organization. Information Technology (IT) company in India announced its plans to
cut 1.5 percent of the variable component of employees' compensation.
The EVA payment made in advance for the third quarter was to be deducted from the
variable salaries in the fourth quarter.
The EVA payment made in advance for the third quarter was to be deducted from the
variable salaries in the fourth quarter.
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Providers
4.3.4 Recommendations and Suggestions

   Compensation provided should be according to talents. To adopt the strategy
those helpful in coping out with the recession. Provide enough incentives to the
employees so that they are motivated and helps in coping out the situation.  
Gives the specific reason during the lay offs. Fringe benefits are aligned with
performance of employees.
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Providers
4.3.5 Conclusion
companies) During the fourth quarter of financial year (FY) 2007-2008, Tata
Consultancy Services Limited (TCS), the largest Information Technology (IT) Company
in India announced its plans to cut 1.5 percent of the variable component of
employees' compensation. It clarified, however, that there would not be any changes
in the perquisites of its employees. The rapid appreciation of the Indian Rupee
against the US dollar over the previous year and the imminent recession in the US
economy, which was the biggest market for the Indian IT companies, had put a lot of
pressure on Indian IT companies. The employees' fears were compounded when TCS
showed some 500 of its employees the door in February 2008 on performance
grounds.TCS gave utmost importance to its human resource function. The company
viewed its employees as assets, which had to be utilized efficiently. The TCS
senior management constantly kept track of the vast intellectual assets, their
skill sets, the status of projects on which they were working, and the number of
people available for being placed in other projects. In January 2008, the
management of TCS gave a jolt to its employees by announcing its plans to cut 1.5
percent of the variable component of the total compensation of its employees. The
reason cited for this was the company's inability to meet the EVA target for the
third quarter of the FY 2007-2008... The major reason for the unprecedented cut in
variable pay was its inability to meet the EVA target for the third quarter of the
FY 2007-2008. The rise of the rupee against the US dollar was another major concern
for TCS. The rupee had appreciated by 12 percent against the US dollar, building
tremendous pressure on the company's margins and revenues.
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Providers
4.4
PESTE Analysis
4.4.1 Political/Legal Environment

         Antitrust Regulations Environmental Protection Laws Tax Laws
Special Incentives Foreign Trade Regulations Attitudes toward foreign Companies
Laws on hiring and promotion Stability of government
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4.4.2 Economic Environment

        GDP trends Interest Rates Money Supply Inflation Rates Unemployment
levels Price control Devaluation / Revaluation Cost
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4.4.3 Socio-Cultural Environment

         Lifestyle Changes Career expectation Consumer activism Rate of
family formation Growth rate of population Age distribution of population Regional
shift in population Life expectation Birth rates
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4.4.4 Technological Environment

        Total Government spending for Research & Development Total Industry
spending for Research & Development Focus of Technological efforts Patent
Protection New Products Technology transfer from lab to marketplace Productivity
improvements through automation Internet availability
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5 Limitations of the Study

 Limited time available for getting the questionnaires filled from the
respondents. As a result of this it was not possible to get full information about
the respondents.
As starting of New Year and ending of financial year some time people are less
interested in filling up questionnaires. Non-cooperative approach and rude behavior
of the respondents.
If the respondents answer does not falls between amongst the options given then it
will turn up to be a biased answer. Contacting potential respondents and if they
were not using internet services then moving on to.
Other respondents were very time consuming.
Perception differentiation of employees.
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Providers
6 Conclusion
  Increase in direct pay only adds to one’s taxable income but most benefits are
not taxed. Employees prefer indirect remuneration as it distorts salary structures
and are often more easy to explain to shareholders as the social responsibility of
the company.    Employees joins and stays with an organization which guarantees
attractive fringe benefits. Fringe benefits build up good corporate image. It also
seeks to enhance employee morale, remain cost effective, and introduce changes
without much resistance.     It should be computable in terms of money. The
amount of benefit is not pre-determined. No contract, indicating when the sum is
payable, should exist. Fringe benefits should be attached with performance level of
employees.
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Providers
7 Suggestions & Recommendations

     Organizations offer benefits to match or outstrip those offered by the
competitors. To predecided the calculation method of fringe benefits. To use the
same method for same grade. To use the fringe benefits as a motivational tool. How
to ascertain competitors benefit package?  Market survey  These surveys provide
data on the various benefits offered, their coverage, eligibility and cost.
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Providers
8 Bibliography •
en.wikipedia.org/wiki/telecomsector
www.answers.com/topic/telecomsector
•
•
.wikipedia.org/wiki/telecom
http://voicendata.ciol.com/content/speak/109121701.asp
http://www.avashya.com/articles/104391/telecom-service-providers-must-ensure-ahigh-
uptim/
http://oneclick.indiatimes.com/article/0d9iaJR6nGgmw/quotes?q=Airtel
www.hr.com/ - United States
beakware.com/resources/default.php
www.humanresourcesiq.comen
wikipedia.org/wiki/Human_resources
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Providers
Research Methodology – C.R.Kothari
Human Resource Management – K.Aswathapa
9 Annexure Comparative Analysis of Fringe Benefits Between Public And Private

Telecom Service Provider
Name: _____________________________________________________ Designation:
_______________________________________________ Organization’s Name:
________________________________________
1. What is the criterion of allocating different benefits between different levels
of employees? A. On the basis of grades B. On the basis of basic salary C. At the
option of employees* D. Any other (specify)
__________________________________________________________________ 2. How do you
segregate and apportion the various fringe benefits between different grades and
designations of employees? A. Same benefits for all grades and designations of
employees B. Different benefits for different grades and designations of employees
C. Increase the benefits according to increase in grade pay and designations of
employees 3. Which of the following Fringe Benefits are given to employees in your
organisation? A. Conveyance, tour, travel (including foreign travel) for official
purpose B. Facility of hotel ,boarding and lodging for official purpose
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Providers C. Expenses on personal holiday D. Transport facility to employee’s kids
E. Expenditure on employee’s welfare F. Medical expenses < Rs. 15000 G. Medical
expenses at hospital maintained by employer H. Contribution by the employer to an
approved superannuation fund I. J. Employee Stock Option Expenses on entertainment
for official or personal purpose incurred by the employer
K. Use of telephone(including mobile phone) other than expenditure on leased

telephone lines L. Repair, running (including fuel) and maintenance of motor car or
aircrafts including depreciation thereon M. Expenditure on conference (excluding
participation fee) N. Reimbursement of periodicals O. Prepaid meal card P.
Expenditure on food or beverages outside office Q. Expenses on festival celebration
R. Use of health club or similar facilities S. Gifts in kind/article T. Credit card
U. Scholarships 4. Which of the following Fringe Benefits (taxable in the hands of
employee) are given in your organisation? A. Facility of interest-free or
concessional housing loan B. Facility of interest-free or concessional car loan C.
Facility of interest-free or concessional education loan D. Facility of interest-
free or concessional personal loan E. Use of movable assets(motor car, other
assets) F. Any other (specify) 5. Which other fringe benefits or reimbursements
apart from above mentioned benefits are provided in your organisation? Please
specify.
6. Benefits are provided in _______________ form. A. Monetary B. Non – monetary
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Providers
7. Benefits form what percentage of the total CTC package? A. 5 – 10 B. 10 – 15 C.

15 – 20 D. 20 – 25 E. 25 – 30 8. Your organisation provide a CTC package which is
___________ A. Heavy on basic salary and other allowances B. Heavy on
reimbursements and fringe benefits C. As per the negotiation by the employee 9.
Abolition of Fringe Benefit Tax with effect from assessment year 2010-11 will
benefit A. The Company B. The Employees 10. Which of the following options will
your organisation exercise after the abolition of Fringe Benefit Tax with effect
from assessment year 2010-11? A. Continue with same structure of CTC package B.
Restructure CTC package by increasing the amount of Fringe Benefits within the same
package C. Restructure CTC package by introducing new benefits within the same
package D. Restructure CTC package by increasing the amount of existing benefits as
well as introducing new benefits within the same package E. Opt for salary
increments F. Any other 11. If the answer to Q.14 is A, what will be the effect on
tax liability of employees? A. Net tax liability will increase B. Net tax liability
will decrease C. No significant effect 12. If the answer to Q.14 is B, what are the
expected benefits on which has a scope of increase in their amounts? Please
Specify.
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Providers
13. If the answer to Q.14 is C, what are the expected benefits apart from the
existing benefits which your organisation is likely to provide? Please Specify.
14. What will be the effect of providing more benefits to employees after the
abolition of Fringe Benefit Tax? A. Tax liability will increase and Net Take-Home-
Pay decrease B. Tax liability will decrease and Net Take-Home-Pay increase 15. Who
bears the liability of paying Fringe benefits Tax in your organisation? A. The
employer(entirely) B. The employee C. The employer but recover from employee D.
Partially the employer and partially the employee Rate on a scale of 1 to 5, 1
meaning “Not preferable” and 5 meaning “preferable” 16. Will the employees prefer
more fringe benefits to more basic salary and allowances in the same CTC package in
this period of rising prices, cost of living and tax liability ( after the
abolition of Fringe Benefit Tax)? A. 1 B. 2 C. 3 D. 4 E. 5 17. Will the
organisation prefer giving more fringe benefits to more basic salary and allowances
within the same CTC package to the employees during this time of economic downturn
(after the abolition of Fringe Benefit Tax)? A. 1 B. 2 C. 3 D. 4
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Providers E. 5
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Comparative Analysis of Fringe Benefits Provided by Public and Private Sector Telecom Service Provider

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Comparative Analysis of Fringe Benefits between Public and Private Telecom Service

Name of Faculty Signature of Faculty Date of Presentation Date of Checking Comments

Signature of Project Mentor Countersigned

Signature of Candidate Project Coordinator

3. EMPLOYEE SECURITY:-Provided with the benefits of confirmation of the employee

Significance of the Study

Review of Existing Literature

Focus of the Problem

Objectives of the Study

Universe & Survey Population

Population: A population is a group of individuals’ persons, objects, or items from

Employees of public and private sector telecom service provider

Sample: A sample is a finite part of a statistical population whose properties are

Sampling: Sampling is the act, process, or technique of selecting a suitable

Method of collecting data

3 Organization of the Study

3.1.1 Introduction of the telephone

3.1.2 Further developments

Emergence as a major player

3.2.1 Liberalisation of telcommunications in India

3.2.2 Growth of mobile technology

Revenue and growth

3.4.1 Wireless telephones

Reliance Communications 90,987,594

Subscriber base 58,789,949 57,033,513 45,449,460 32,540,049 28,867,734 27,742,395

Andhra Pradesh 37,126,048

Madhya Pradesh 24,923,739

Operator BSNL MTNL Bharti Airtel

Subscriber base 28,446,969 3,514,454 2,928,254

Reliance Communications 1,152,237

Tata Teleservices HFCL Infotel Teleservices Ltd All India

1,003,261 165,978 95,181 37,306,334

Subscriber base 5,996,912 3,620,729 3,534,211 2,803,049 2,751,296 2,632,225

Andhra Pradesh 2,477,755

Bharti Telecom (Airtel, Bharti Televentures) Reliance Infocomm

Next generation networks

Mobile Number Portability (MNP)

International Nine satellite earth stations - 8 Intelsat (Indian Ocean) and 1

3.9.1 Submarine cables

4 Data Analysis & Interpretation

Interpretation: While going through data analysis it is found that in BSNL

Interpretation: While going through data analysis it is found that out of 30

Basis Facility of interest-free or concessional housing loan Facility of interest-

Interpretation: While going through data analysis it is found that out of 30

Interpretation: While going through data analysis it is found that out of 30

Benefits are provided in _______________ form.

Basis Monetary Non- Monetary

Interpretation: While going through data analysis it is found that out of 60

Benefits form what percentage of the total CTC package?

Basis 5-10 10-15 15-20 20-25 25-30

Interpretation: While going through data analysis it is found that out of 30

Your organisation provide a CTC package which is ___________

Interpretation: While going through data analysis it is found that organisation

Interpretation: While going through data analysis it is found that organisation

Basis The Company The Employees

Interpretation: While going through data analysis it is found that Abolition of

Basis Tax liability will increase and Net Take-Home-Pay

decrease Tax liability will decrease and Net Take-Home-Pay increase

Rate on a scale of 1 to 5, 1 meaning “Not preferable” and 5 meaning “preferable”

Interpretation: While going through data analysis it is found that out of 30

Interpretation: While going through data analysis it is found that out of 30

Interpretation: While going through data analysis it is found that out of 30

Interpretation: While going through data analysis it is found that out of 30