Project Report

ON

“MARKETING RESEARCH AND CUSTOMER SATISFACTION”

FOR

Submitted in partial fulfillment of two year full time course in

MASTER OF BUSINESS ADMINISTRATION, 2009-2011,
Institute of Management Science,
SHEPA, VARANASI

UTTAR PRADESH TECHNICAL UNIVERSITY, LUCKNOW(U.P.)

Submitted To: Submitted by:

Prof. C. Lal Puneet Prakash Singh
Director-IMS,(SHEPA) MBA(Marketing)
Varanasi Roll No.-0918470040
 PREFACE

Summer training is an integral part of the MBA course

Curriculum. The main objective of this training is to
supplement the student’s theoretical knowledge with a
practical Exposure to the working environment of an
organization.

This program enhances the student’s capability

to cope up with the Uncertainties and challenges which
are the part and parcel of every organization.
The
competition in the telecommunication sector is highly
volatile in nature. Over the decade only government
undertaking company was operating in India but with
the opening up of the economy several new players
like private sector & multinational telecommunication
entered in Indian horizon.

In the giving project I made the impotence of

Financial Advisor in accelerative the service of the
company. Advisors are playing a very important role
for making a bright future of Idea Cellular.

On the basis of filled questionnaire, coding

sheet is formulated & the conclusions are drawn with
the help of graphs pie charts.

Date:
Jitendra Pratap
Place:
I am thankful to management of IDEA CELLULER COMPANY
LTD.FOR Granting the permission , cooperation and valuable
information for completing this projecT No words are enough
to thank Mr. Mo. Mustafa Ali (Area sales Manager) and Mr.
Dipak Tiwari (),who not only inspired me to work on this
project but also accepted to guide me

I also express my heart felt thanks to Mr.Atul Bhadoria (Zonal

Branch Manager) Idea Celluler Company Ltd. Sigra Varanasi
for his valuable guidance and continuous support in better
understanding THE study with his excellent ideas throughout
the project .

I spite of heavy responsibilities and busy schedules,

they always managed time to provide proper guidance.

Last but not the least, I would like to say that my parents and
friends for giving me their constant support and
encouragement incompletion of my project

JITENDRA PRATAP
I hereby declare that this project repot is mainly based on the summer
trating by me at IDEA CELLULER COMPANY LTD. This is my
orignal work and no part therefore has been submitted anywhere else
fodatr aaaaaany other academic purpose

Date-

Signature of
student
 CONTENT

CHAPTER 1…………………………………………

o Brief History of Organization.

o Vision, mission, objectives,strategy,etc.

o Organization structure and management.

o `SWOT analysis of organization.

CHAPTER 2

RESEARCH METHODOLOGY

 Objective of project.

 Scope of study.

 Period of study.
  Limitation of study.

CHAPTER 3…

ANALYSIS OF DATA

 Preparation of table and interpretation.

 Preparation of chart, diagram and interpretation.

CHAPTER 4……

o Findings and recommendations.

ANNEXURE- QUESTIONNAIRE

BIBLIOGRAPHY
CHAPTER-1

COMPANY PROFILE

INTRODUCTION
As India's leading GSM Mobile Services operator, IDEA Cellular
has licenses to operate in 11 circles. With a customer base of
over 17 million, IDEA Cellular has operations in Delhi,
Maharashtra, Goa, Gujarat, Andhra Pradesh, Madhya Pradesh,
Chattisgarh, Uttaranchal, Haryana, UP-West, Himachal
Pradesh and Kerala. IDEA Cellular's footprint currently covers
approximately 45% of India's population and over 50% of the
potential telecom-market.

As a leader in Value Added Services, Innovation is central to

IDEA's VAS Factory. It is the first cellular company to launch
music messaging with 'Cellular Jockey', 'Background Tones',
'Group Talk', a voice portal with 'Say IDEA' and a complete
suite of Mobile Email Services.

Idea Cellular is a wireless telephony company operating in

various states in India. It initially started in 1995 as a join
venture between the Tatas, Aditya Birla Group and AT&T by
merging Tata Cellular and Birla AT&T Communications.

Initially having a very limited footprint in the GSM arena, the

acquisition of Escotel in 2004 gave Idea a truly pan-India
presence covering Maharashtra (excluding Mumbai), Goa,
Gujarat, Andhra Pradesh, Madhya Pradesh, Chattisgarh, Uttar
Pradesh (East and West), Haryana, Kerala, Rajasthan and
Delhi (inclusive of NCR).

The company has its retail outlets under the "Idea n' U"
banner. The company has also been the first to offer flexible
tariff plans for prepaid customers. It also offers GPRS services
in urban areas.
 IDEA Cellular is a publicly listed company,
having listed on the Bombay Stock Exchange (BSE) and the
National Stock Exchange (NSE) in March2007.

IIDEA Cellular is a leading GSM mobile service operator with

pan India licenses. With a customer base of over 44 million in
17 service areas, operations are soon expected to start in
Chennai Metro; Kolkata & West Bengal, North East & Assam,
and J&K.

A frontrunner in introducing revolutionary tariff plans, IDEA

Cellular has the distinction of offering the most customer
friendly and competitive Pre Paid offerings, for the first time in
India, in an increasingly segmented market. From basic voice
& Short Message Service (SMS) services to high-end value
added services such as Mobile TV, Games etc - IDEA is seen as
an innovative, customerfocusedbrand.
IDEA 'Women's Card' caters to the
special needs of women on the move, and 'Youth Card' covers
the emerging youth segment. IDEA 'My Gang' - the widely
popular community user group product recently bagged the
prestigious 'Golden Peacock Award 2008' under the Most
Innovative Product category at the "19th World Congress on
Total Quality".

A brand known for many firsts, IDEA was the first to launch
GPRS and EDGE in India. IDEA has partnered with Research in
Motion (RIM) to offer Blackberry services on its network.
IDEA 'Net Setter'- Plug & Play, EDGE enabled USB Data Card
offers affordable data connectivity with faster speed and
consistency.
 IDEA offers seamless coverage to
roaming customers traveling to any part of the country, as
well as to international traveling customers across over 200
countries. IDEA Cellular has partnership with over 400
operators worldwide to ensure that customers are always
connected while on the move, across the globe.

IDEA has received several national and international

recognitions for its path-breaking innovations in mobile
telephony products & services. It won the GSM Association
Award for "Best Billing and Customer Care Solution" for 2
consecutive years. It was awarded "Mobile Operator of the
Year Award - India" for 2007 and 2008 at the Annual Asian
Mobile News Awards.
 BRIEF HISTORY OF THE
ORGANISATION:

The chronology of key events

of the Company from
incorporation is set out below: Becomes pan-India
operator in 2009

Calendar year Events

2009
Subscriber base as on
December 31, 2009:
57,611,872
Idea becomes a pan-India
operator
Emerging Company of the
Year - fastest growing mobile Acquired Escotel,
operator in the world’s fastest incumbent cellular
growing telecom market service provider in
Haryana, UP(W) & Kerala
2008 and new licensee in HP
Subscriber base as on
December 31, 2008:
40,016,153
Idea acquired 9 licences for
Punjab, Karnataka, Tamil
Nadu & Chennai, West
Bengal, Orissa, Kolkata,
Assam, North East and
Jammu & Kashmir
 Brand IDEA launched
Delhi operations
commence (Nov)

Acquired RPG Cellcom,

service provider in
Acquired Spice Madhya Pradesh (Feb)
Communications with the Awarded
operating circles of Punjab
and Karnataka
Launched services in
Mumbai metro in the largest
single metro city launch, ever
Launched services in Bihar

2007
Subscriber base as on
December 31, 2007:
21,054,027
Won an award for the
"CARE" service in the "Best
MoU for merger between
Birla AT&T and Tata
Cellular Limited Andhra
Pradesh signed (Jan)
Subscriber base as on
December 31, 2006:
12,442,450
Became part of the Aditya
Birla Group subsequent to
the TATA Group transferring
its entire shareholding in the
Company to the Aditya Birla
Group
Birla AT&T commence
Acquired Escorts
Cellular operations
Telecommunications Limited
(subsequently renamed as Maharashtra & Gujarat
Idea Telecommunications
Limited)
Restructuring of debt
Launch of the New Circles
Reached the 10 million
subscriber mark
Received Letter of Intent
from the DoT for a new UAS
License for the Mumbai
Circle.
Received Letter of Intent
from the DoT for a new UAS
License for the Bihar Circle
through Aditya Birla Telecom
Limited. ABNL, the parent of
Aditya Birla Telecom Limited,
pursuant to a letter dated
November 22, 2006, agreed
to transfer its entire
shareholding in Aditya Birla
Telecom Limited to the
Company for the
consideration of Rs. 100
million.
2005
Subscriber base as on
December 31, 2005: 6,473,962
Reached the five million
subscriber mark

Turned Profit Positive

Won an Award for the "Bill

Flash" service at GSM
Association Awards in
Barcelona, Spain

Sponsored the International

Indian Film Academy Awards

2004
Completed debt restructuring
for the then existing debt
facilities and additional
funding for the Delhi Circle.
Acquired Escotel Mobile
Communications Limited
(subsequently renamed as
Idea Mobile Communications
Limited)
Reached the four million
subscriber mark
First operator in India to
commercially launch EDGE
services 2005

2003
 Reached the two million
subscriber mark

2002
Changed name to Idea
Cellular Limited and
launched "Idea" brand name
Commenced commercial
operations in Delhi Circle
Reached the one million
subscriber mark

2001
Acquired RPG Cellular
Limited and consequently the
license for the Madhya
Pradesh (including
Chattisgarh) Circle
Changed name to Birla Tata
AT&T Limited
Obtained license for
providing GSM-based
services in the Delhi Circle
following the fourth operator
GSM license bidding process

2000
Merged with Tata Cellular
Limited, thereby acquiring
original license for the
 Andhra Pradesh Circle

1999
Migrated to revenues share
license fee regime under
New Telecommunications
Policy ("NTP")
1997
Commenced operations in
the Gujarat and Maharashtra
Circles
1996
Changed name to Birla AT&T
It goes without saying that the brand vision of idea mirrors the
company’s vision. The brand mission statement is...... To be
the most customer-focused mobile service brand, continuously
innovating to help liberate our customers from the shackles of
time & space.
The india foot print idea Anywhere connectivity bringing India
closer.
The technology advantage Idea Tomorrow's technology to enrich to
day.
The customer focus idea make a single interactional a sting
relationship.
The employee focus idea nuture the roots that nurture our ideas.

OBJECTIVES OF THE PROJECT:

To find out the perception of the general people towards
the land line & Mobile phone.

1. To find out the telecom market share of different

companies in Varanasi.

2. To find out the consumer satisfaction towards the

different plans offered by the company.

3. Managing the distribution channel of idea cellular.

 STRATETEGY FOR IDEA CELLULAR:

The Idea Cellular Limited falls in the “question mark” quadrant of BCG
matrix and in the High attractive and Strong Competitive strength category as
per the GE Matrix. Thus they need to formulate some strategies to try
capturing some market share, growing and building their brand image as well
as brand value.

Market penetration

The company enters where the products and the market already exists. IDEA
being a question mark that means it is competing in a high growth market but
with a relatively low share compare to its competitors. Market penetration can
be done by attracting competitor’s customers that implies increase in market
share. The strategy that IDEA can adapt under market penetration is to attract
non-users and convince to use their product more often. They are different
market penetration strategies like cutting price, increase in promotion, and
creating innovative distribution tactics. The target should be in such a way that
IDEA sales volume relative to its competitors should be high as expressed in
percentage. IDEA’s present market share is about 12%, and competitors like
airtel, Vodafone, and bsnl have a market share of about 31, 23, and 19 percent
respectively. Though telecom industry is growing rapidly every year, there is
always a little increment in the percentage of sales for IDEA. To overcome
this problem and to occupy the competitor’s position we recommend
following strategies.
 • Increasing the mobile circles which are at present are only 11, so there
is always a need to expand its services.

• Target the rural segment in India which is expected to grow by 15%

every year

• Launch different types of packages as per the requirements for different

segments of the customers

• Provide more high end services like GPRS, mobile internet services

• Collaboration with different service providers on global basis to provide

better facility to customers on roaming.

• Tracing out the search patterns which are left untapped by the
competitors to reveal new markets.

Backward Integration – In July 2008 Swedish equipment supplier entered

into a contract to provide technology “Ericsson Mobile organizer” to Idea
cellular enabling its subscribers to serve email facility on its cell phones.

Forward Integration – Company operate approximately 589 Idea” n “U and

other showrooms which supplement the distribution channels and provide
customer service.

Horizontal Integration: Idea acquired the Modi family’s stake of 40.8% in

spice which ultimately in a way increased the market share of Idea. This can
be seen as horizontal integration
Strategic Alliance:

1) Product alliance

Idea should form product alliance with a company that has a strong
brand image and carry a promotion for one another. E.g. Acer in
collaboration with Ferrari launched Acer Ferrari laptops which are
catering to high end niche segment having high specifications and high
price.

2) Promotional Alliance:

Idea should form promotional alliances in collaboration with big movie

houses or big retail brands to promote their products. Recently SONY
Viao had a promotional alliance with “James Bond” latest movie
“Casino Royale”.
Board of Directors -

Mr.KumarMangalamBirla(Chairman)
Smt. Rajashree Birla
Mr.SanjeevAga(ManagingDirector)
Mr. Arun Thiagarajan
Ms. Tarjani Vakil
Mr. Mohan Gyani
Mr. Gian Prakash Gupta
Mr. R.C. Bhargava
Mr. P. Murari
Mr.BiswajitA.Subramanian
Dr.RakeshJain

Mr. Juan Villalonga Navarro

Dr. Hansa Wijayasuriya (Alternate to Mr. Juan Villalonga Navarro)

ManagementTeam
CorporateLeadershipTeam

Mr.SanjeevAga,ManagingDirector
Mr.AkshayaMoondra,ChiefFinancialOfficer

Mr.AnilK.Tandan,ChiefTechnologyOfficer

Mr.PrakashK.Paranjape,ChiefInformationOfficer

Mr.PradeepShrivastava,ChiefMarketingOfficer

Mr.NavanitNarayan,ChiefServiceDeliveryOfficer

Mr.VinayK.Razdan,ChiefHumanResourceOfficer

Mr.RajatK.Mukarji,ChiefCorporateAffairsOfficer

Mr. Rajesh K. Srivastava, Chief Materials & Procurement Officer

Mr.AmbrishJain,Director-Operations

Mr. Himanshu Kapania, Director - Operations

Circle Heads

Mr. Iyer SubbaramanS., Chief Operating Officer, Andhra Pradesh

Mr. Rajendra Chourasia, Chief Operating Officer, Madhya Pradesh &

Chattisgarh

Mr. Virad Kaul, Chief Operating Officer, Uttar Pradesh (West), Delhi
& Haryana

Mr.T.G.B.Ramakrishna, Chief Operating Officer, Kerala

 Mr. Sashi Shankar, Chief Operating Officer, Mumbai

Mr. P.Lakshminarayana, Chief Operating Officer, Maharashtra &

Goa

Mr. Naozer Firoze Aibara, Chief Operating Officer, Uttar Pradesh

(East)

Mr. Sunil Kataria, Senior Vice President - Operations, Rajasthan

Mr. Arul Bright, Senior Vice President - Operations, Gujarat

Mr. M. D. Prasad, Senior Vice President - Operations, Bihar

Mr. M. Srinivas, Senior Vice President - Operations, Tamil

NaduChennai
Mr. Siva Ganapathi, Chief Operating Officer, Karnataka

Mr. Anish Roy, Chief Operating Officer, Punjab, J&K and Himachal
Pradesh

Mr. Aloke Malik, Chief Operating Officer, East (Kolkata, Rest of

Bengal, Orissa & NESA)

Idea Cellular Limited

An Aditya Birla Group Company
Quarterly Report
Fourth Quarter ended March 31, 2009
 ADITYA BIRLA GROUP

istered Office: Suman Tower, Plot No. 18, Sector 11,

Gandhinagar 382011, India the Corporate Office: 5 Floor,
Windsor, Off C.S.T. Road, Near Vidya Nagari, Kalina Santacruz
(East), Mumbai 400 098, India Supplemental Disclosures

Unless stated otherwise, the financial data in this report is

derived from our unaudited / audited consolidated financial
statements prepared in accordance with Indian GAAP. Our
financial year ends on March 31 of each year, so all references
to a particular financial year are to the twelve months ending
March 31 of that year. In this report, any discrepancies in any
table between the total and the sums of the amounts listed
are due to rounding-off. There are significant differences
between Indian GAAP, IFRS, and U.S. GAAP; accordingly, the
degree to which the Indian GAAP financial statements will
provide meaningful information is dependent on the reader’s
level of familiarity with Indian accounting practices. Any
reliance by persons not familiar with Indian accounting
practices on the financial information presented in this report
should accordingly be limited. We have not attempted to
explain those differences or quantify their impact on the
financial data included herein.

Unless stated otherwise, industry data used throughout this

report has been obtained from industry publications. Industry
publications generally state that the information contained in
those publications has been obtained from sources believed to
be reliable but that their accuracy and completeness are not
guaranteed and their reliability cannot be assured. Although
we believe that industry data used in this report is reliable, it
has not been independently verified. Actual results may differ
materially from those suggested by the forward-looking
statements due to risks or uncertainties associated with our
expectations with respect to, but not limited to, our ability to
successfully implement our strategy, our growth and
expansion, technological changes, our exposure to market
risks, general economic and political conditions in India which
have an impact on our business activities or investments, the
monetary and interest policies of India, inflation, deflation,
unanticipated turbulence in interest rates, foreign exchange
rates, equity prices or other rates or prices, the performance
of the financial markets in India and globally, changes in
domestic and foreign laws, regulations and taxes and changes
in competition in the industry
 2. Company Overview

Idea Cellular Limited (“Idea”) is a leading mobile services

operator in India, with ~ 39 mn subscribers as on March‘09.
Idea has a subscriber market share of 19.5% in its 8
established service areas, and 14.5% in its 13 operating
service areas. After inclusion of Spice Communications,
Brand !dea has 43.02 mn subscribers, corresponding to a
11.0% national market share.

A. Promoter Group

Idea is part of the Aditya Birla Group, India's first truly

multinational group. The Group has businesses in sectors
ranging from metals, garments, cement, fertilisers, life
insurance and financial services among others. Over 50% of
the Group’s revenues are derived from overseas operations.
The group operates in 25 countries, and is anchored by an
extraordinary force of over 125,000 employees belonging to
25 nationalities. The current Group holding of 49.13% in Idea
is made up of; Aditya Birla Nuvo Ltd. 27.02%

Birla TMT Holdings Pvt. Ltd. 9.15%

Hindalco Industries Ltd. 7.37%

Grasim Industries Ltd. 5.52%

IGH Holdings Pvt. Ltd. 0.08%

Total 49.13%
B. Key Shareholders

AXIATA Group Berhad, previously TM International Berhad,

through its affiliates has 14.99% shareholding in Idea Cellular,
and a 49.0% holding in Spice Communications. With the
proposed merger of Spice Communications into Idea Cellular,
the Axiata Group holding in Idea Cellular would increase to
around 20%. The Group, is one of the largest Asian
telecommunication companies, focused in high growth low
penetration emerging markets. AXIATA has a controlling
interest in Malaysia, Indonesia, Sri Lanka, Bangladesh and
Cambodia with significant strategic stakes in India and
Singapore. India and Indonesia are some of the fastest
growing markets in the world. In addition, the Malaysian
grown holding company has assets in telecommunication
operations in Thailand, Pakistan and Iran. As of December
2008, the Group, including its subsidiaries and associates, has
close to 90 million mobile subscribers in Asia. The Group
provides employment to over 25,000 people across Asia. Upon
its de-merger from Telekom Malaysia in April 2008, AXIATA
became an independent entity and simultaneously listed on
the Malaysian stock exchange.

Providence Equity Partners, through its affiliates has a 10.6%

shareholding in Idea, and has also invested Rs. 20982 mn in
ABTL through Compulsorily Convertible Preference Shares.
C. Corporate Structure

Idea Cellular Limited (Idea)

100% -- Idea Cellular Infrastructure Services Limited

(ICISL) 100% -- Idea Cellular Services Limited (ICSL)
100% -- Swinder Singh Satara & Co Limited (SSSL) 41.1% --
Spice Communications Limited (Spice)
100% -- Aditya Birla Telecom Limited (ABTL)

100% -- Idea Cellular Tower Infrastructure

Limited (ICTIL) 16% -- Indus Towers Limited (Indus)

IICCIISSLL – tower company owning towers in Bihar and Orissa

service area. IICCSSLL – provides manpower services to
operating entities i.e. Idea & ABTL. SSSSSSLL – holds MSC real
estate in the Delhi service area.

SSppiiccee – provides GSM based mobile services in Punjab

and Karnataka service areas. AABBTTLL – provides GSM based
mobile services in Bihar service area, and has 16%
shareholding in Indus. IICCTTIILL – holds towers de-merged
from Idea, which will subsequently merge in Indus. IInndduuss
– a joint venture between Bharti Infratel, Vodafone Essar and
Idea (through ABTL), to provide passive infrastructure services
in 15 service areas.
STRENTH
Attractive existing footprint–The subscriber base under brand
Idea, increased from 24 million as of end March 2008 to 43.02
million as of end March 2009, a growth of around 79%, taking
its national market share to 11%.

Original licensee in seven of the Established Circles, providing

incumbency advantages-The established service areas are
Delhi, Andhra Pradesh, Gujarat, Maharashtra, Haryana, Kerala,
Madhya Pradesh and Uttar Pradesh (West). The New Service
Areas are Uttar Pradesh (East), Rajasthan, Himachal Pradesh,
Bihar, Mumbai, Karnataka, Punjab, Orissa, Chennai & Tamil
Nadu, Jammu & Kashmir, Kolkata & West Bengal, and Assam &
North East.Market leader in two of, and established positions
in the remainder of, the Established Circles.

Strong distribution channels.

High quality network structure.

Innovation –always comes out with new products.IDEA is the

winner of ‘The Emerging Company of the Year Award' at The
Economic Times Corporate Excellence Awards 2008-09. The
company has received several other national and international
recognitions for its path-breaking innovations inmobile
telephony products & services. It won the GSM Association
Award for “Best Billing and Customer Care Solution” for 2
consecutive years. It was awarded “Mobile Operator of the
Year Award -India” for 2007 and 2008 at the Annual Asian
Mobile News Awards.

A national brandHuman Resources -The Company through

its participative work environment, skill development
activities, and by championing the values of commitment,
integrity, passion, seamlessness and speed, promotes strong
bonding with its employees. During the year, it has again
undertaken sharing of value creation by granting another
tranche of employee stock options to the eligible employees.
The findings of OrganizationHealth Study (OHS) have been
analyzed, which are very encouraging, and concern areas are
being suitably addressed. The employee strength onrolls stood
at 6,481 as on March 31, 2009.
Attractive growth –From 11.8 million subscribers in 2006 to 24
millionin 2008 ,then to 43 million by end of March 2009 and to
51 by end of 2009 is really a great performance from Idea.

Part of the Aditya Birla Group-IDEA Cellular is an Aditya Birla

Group Company, India's first truly multinational corporation.
The group operates in 25 countries, and is anchored by over
1, 30,000employees belonging to 30 nationalities. The Group
has been adjudged the ‘6th Top Company for Leaders in Asia
Pacific Region' in 2009, in a survey conducted by Hewitt
Associates, in partnership with The RBL Group, and Fortune.
The Group has also been rated ‘The Best Employer in India
and among the Top 20 in Asia' by the Hewitt-Economic Times
and Wall Street Journal Study 2007.Their promoters-1. Aditya
Birla Nuvo Limited2. Grasim Industries Limited

3. Hindalco Industries Limited

WEAKNESS
 Birla TMT HoldingsPrivate LimitedWeaknessesHigh Debt-
Equity Ratio: The Company's Debt-Equity ratio is high as
compared to its peers. Moreover, the Company needs the
approval of the lenders under its financing arrangements
before undertaking certain significant corporate
actions.Concentration: The Company revenues are derived
solely from providing mobile services and it is dependent on
four of the Established Circles for a significant proportion of its
revenues.

The Company had accumulated losses amounting to Rs. 19.23

billion and Rs. 17.23 billion for financial years 2005 and 2006
respectively. The Company may not be in a position to pay
dividends until it clears its accumulated losses.
The Indian telecommunication industry is expected to
continue to enjoygrowth due to its low teledensity and
increasing affordability of mobile telephone and services. The
strong growth in the sector continues, mainly due to
expansion of telecom networks to rural India, the reduced cost
of entry and the reduced cost of handsets. Low penetration,
more particularly in rural India, provides opportunity for
further growth, and your company, an incumbent GSM player
with 900 MHz spectrum in about half of India, is well
positioned to tap this opportunity.

The contribution of service sector to the GDP has improved

significantly from 29% in 1950 to 54% in 2005. This is
primarily due to growth of information-technology and
information technology enables services. This will further
stimulate the demand for mobile telecommunication
services.The regulatory environment is improving and there is
greater clarity in existing rules and procedures. This would
enable operators in improving network quality. Also raising of
funds will become easier due to greater predictability of
operational environment.Competition from new technologies
is an inherent threat. While the planned 2100 MHz spectrum
auction for 3G services will lead to additional cash outflow, it
will also open new revenue streams. The Company’s strong
balance sheet and market standing, positions it to participate
effectively in such auction.

There is intense competitionin the Indian telecommunication

industry. Idea Cellular faces significant competition from
private companies that have a pan-India footprint such as
Bharti Airtel, Tata Teleservices and Reliance Communication
Ventures. Also it faces competition from government owned
companies such as BSNL and MTNL.Alternative technology is
evolving very rapidly in the telecommunications industry. For
instance, “Wi-Fi”and “Wi-Max”which allows for voice data
transfer have been tested and handsets with such technology
maysoon be available in the Indian market. Moreover, satellite
communication voice data transport medium like “Skype”may
become a serious competitor in the long distance voice data
transfer business.Porter’s five forces -Analysis the external
environment1.Competitive rivalry within the
Industrya.Principal competitors-Major competition comes
from the industry leader Bharti Airtel. Bharti Airtelhas 24.3%
customer market share and 33.8% revenue market
share.Vodafone India has 18.8% customer market share and
20.7% revenue market share.

Idea Cellular has 11.2% subscribers market share and 12.1%

revenue market share BSNL has subscriber share of 12.7%
and mere 10.2% of revenue share Reliance Communications is
the worst performerwith 18.9% customer market share and
pathetic 11.5% revenue market share.

(Data mentioned are by end of August 2009)b.Salient

strengths -BSNL has taken full advantage of its wide
network and fixed line subscriber base, and has established
itself as the provider with maximum coverage over the
country.

While Bharti Airtel has dominated the scene with wide

reach, innovative packages, catchy ads, and has emerged the
leader of the pack. Reliance Communications also has the
wide network to its advantage. Tata tele-services banks on the
Tata-trust factor to gain foothold in the market. Vodafone is
hitting the Indian market in a huge way. They have large cash
reserves at their disposal to wipe out the competition in
future. Weaknesses- BSNL lines are mostly marred by
congestion,bottlenecks and they have failed to capture the
attention of the customers with attractive offers. Unstable
range and poor customer support are Airtel’s minuses.
Ambiguous schemes have reduced Reliance’s
popularity.TATA Indicom has not really been able to fully
capitalize its goodwill factor. c.Their basis for competition-
Vodafone and Idea are comparatively new entrants into the
market and hence the rest of the competition has
anadvantage over them. Also both these brands have
undergone rebranding more than once, and subsequently
have had hiccups with people not realizing the transformation.
Giants like BSNL, Airtel and Reliance have wide networks in
the nooks and crannies of thecountry, while Idea is still to
open account in several states.

2.Bargaining Power of CustomersThe bargaining power of

customers determines how much customers can impose
pressure on margins and volumes. Customers bargaining
power is likely to be high because

Customersuse multiple mobile services these days and hence

have a good knowledge of the pros and cons of each service
provider.

Telecommunication industry comprises a number of

operatorsThe industry operates with high fixed costsThe
product is not much differentiated and can be replacedby
substitutesSwitching to an alternative product is relatively
simple and is not related to high costsCustomershave low
margins and are price sensitiveThecustomer knows about
the production costs of the product.3.Bargaining power of
suppliersIn this industry there is less number of suppliers
compared to other industries such as the manufacturing or
textile industry.

I.Mobile handset suppliers –although there are many handset

suppliers in the country, some service providers have their
own handset manufacturing units operating inthe country like
the Reliance Classic and Tata Indicom (backward integration).
Some of the telecom companies also have some collaboration
with major handset manufacturers like Samsung, L.G, and the
Blackberry for their CDMA services.II.Some other suppliers
include optical fibre suppliers and aluminium (for the
construction of towers) suppliers. Here the suppliers have a
limited bargaining power.III.Another important one is the
software assistance where the suppliers have some edge.
Major solution providers include TCS, Infosys, Wipro, etc. While
Reliance and Tata have their own software services other
players like Vodafone and Idea depend on the above
mentioned software service providers.

4.Threat ofnew entrantsIndian telecom sector provides

unprecedented opportunities for foreign companies in various
areas such as 3G, virtual private network, international long
distance calls, value added services etc.

The market is witnessing M&A activities that are leading to

consolidations in the industry. This trend has assisted
companies in expanding their reach in the Indian telecom
market to offer better services to the customers. The Indian
telecom industry has always attracted foreign investors. In
fact, the cumulative FDI inflow, from August 1991 to March
2007, in this sector amounted to $3,892.19 million. This
makes telecom the third largest sector to attract FDI since the
liberalization.

Although the entry barriers are in place like license and high
fixed costs, still we observe many new players emerging from
the state-level to national-level. This includes Aircel, Virgin,
Spice and Unitech.
5.Threat from substitutesTelecom sector offers a wide range
of services in India such as wireline, CDMA, GSM, internet,
VoIP, IP etc.

Internet telephone is emerging as a best substitute for the

mobile telephony because it is cheaper and video can also be
added. The increasing use and penetration of internet in the
country also augments this. Other facilities on the internet
such as Google talk, Yahoo Messenger, Rediff Bol are used at
an unprecedented level by the youngsters of this country.
These are the major substitutes for the mobile telephony.
Maybe this is on of the reasons why the major service
providers also have their presence in internet service. Idea’s
strategyIdea is not the market leader in India. They were
operating in a few circles earlier and were considered a
regional player. Recently Idea started operations in many
states as part of their national roll out plan and they have
operations in 2200 towns in India. Idea has been focusing on
value added services (VAS) from its inception which is
reflected in its products. They have always taken extra care in
providing customer friendly and competitive Pre Paid
offerings. Differentiation and innovation can be associated
with Idea right from its beginning. It’s clear from the following:

'Super Power', ‘2 Minutes Outgoing Free’, ‘Lifelong offer’,

‘Women'sCard’, 'Lifetime Idea'etc are some of the offerings of
IDEA.

IDEAisthe first cellular company to launch music messaging

with 'Cellular Jockey','Background Tones', 'Group Talk',a voice
portal with 'Say IDEA'and a complete suite of Mobile
EmailServices.

They are also providing GPRS and EDGE services for

transferring data.The new product introduced by IDEA is the
EDGE enabled USB Data Card which is named as 'NetSetter'.
Initially ‘NetSetter’ was offered to post paid customers only.
Now it is available to prepaid customers in selected circles.

IDEA’s partnership with IIFA for 10th Anniversary Awards, its

association with Mumbai Indians in IPL and major sought after
programs in television like MTV Roadies and Idea Star
singerclearly shows its marketing strategies. They always
seek something different and is always in touch with the youth
of the country as they easily switch to other services.

Their ad campaign showing AbhishekBachanin different

settings but all clearly showing their corporate social
responsibility is great. Their approach is different from
others.Idea was the first to provide one rupee STD calls in
the country. Now when every one else gives per second billing
and also 50 paisaper minute, Idea offers at 49 paisaper
minute.

As far as Idea is concerned it should not start a price war with

Vodafone and other large players in the industry. This is
because Vodafone has a lot ofmoney with them to suffer the
losses and eventually emerge as the winner and it is almost
doing that. Idea can only afford to come out with some
differentiated tariff plan that does not result in a war with the
leaders like Airtel and Vodafone. Indian telecom is already in
trouble with the lowest tariff in the world. Differentiation and
innovation is the way forward for Idea in this already bleeding
industry, otherwise it will be a severe bloodshed.
 Growth in installed
capacity- Idea
Cellular Limited

Idea Cellular Limited has a share of 12%

in the total GSM telecom market in India (as on Mar’08). The Entire Telecom
Industry is growing at a rate of 25% as compared to the base year 2006-07.
This can be termed as a moderately growing Industry and it is expected to
grow in the coming years. We are thus putting the middle line of the vertical
axis in our BCG matrix as 15% as a division between low and high growth.

The first BCG matrix will be plotted for Idea Cellular Limited, our chosen
SBU, with respect to the market leader, Bharti Airtel. Taking the market share
of Bharti as 1X, the relative market share of Idea comes as 0.39X. The BCG
matrix thus, would look like as under.
 BCG Matrix of Idea Cellular Limited with respect to

Market Growth Rate Airtel

15
(in %)
LOW
30
HIGH

HIGH
0

10X 1X
0.39X 0.1X

Relative Market Share

Analysis of BCG matrix:
In the above matrix, Idea Cellular Limited falls in the first quadrant of
“QUESTION MARKS”. The circle size represents the absolute market share
(i.e. 12%) of our SBU in the telecom sector. We will formulate the strategies
which Idea should follow in the later part of this project.
Plotting the Competitors
1. Bharti Airtel: Bharti Airtel is the market leader in the telecom sector
with a market share of 31%. The market challenger in this industry is
Vodafone. So we plot the BCG matrix of Airtel with respect to
Vodafone. Taking the market share of Vodafone (i.e. 23%) as 1X, the
relative market share of Airtel comes as 1.35X. The BCG matrix of
Airtel will look as under:

BCG Matrix of Bharti Airtel with respect to

Vodafone
Market Growth Rate

15
(in %)
LOW
30
HIGH

HIGH
0

10X 1.35X 1X
0.1X

Relative Market Share

Analysis of BCG matrix:
In the above matrix, Bharti Airtel falls in the quadrant of “STAR” with respect
to the market challenger. The circle size represents the absolute market share
(i.e. 31%) of Airtel in the telecom sector.

2. Vodafone Essar: Vodafone is the market challenger in the telecom

sector with a market share of 23%. The market leader in this industry is
Vodafone and so we plot the BCG matrix of Vodafone with respect to
Airtel. Taking the market share of Airtel (i.e. 31%) as 1X, the relative
market share of Vodafone comes as 0.74X. The BCG matrix of Airtel
will look as under:

BCG Matrix of Vodafone with respect to Airtel

Market Growth Rate

15
(in %)
LOW
30
HIGH

HIGH
0

10X 1X 0.74X
0.1X

Relative Market Share

Analysis of BCG matrix:
In the above matrix, Vodafone falls in the quadrant of “QUESTION MARK”
with respect to the market LEADER. The circle size represents the absolute
market share (i.e. 23%) of Vodafone in the telecom sector.

3. BSNL: BSNL is another competitor ahead of IDEA in the telecom

sector with a market share of 19%. The market leader in this industry is
Airtel and so we plot the BCG matrix of BSNL with respect to Airtel.
Taking the market share of Airtel (i.e. 31%) as 1X, the relative market
share of BSNL comes as 0.61X. The BCG matrix of Airtel will look as
under:

BCG Matrix of Idea Cellular

Market Growth Rate

Limited with respect to Airtel

15
(in %)
LOW
30
HIGH

HIGH
0

10X 1X
0.6X 0.1X

Relative Market Share

Analysis of BCG matrix:
In the above matrix, BSNL falls in the quadrant of “QUESTION MARK” with
respect to the market LEADER. The circle size represents the absolute market
share (i.e. 19%) of BSNL in the telecom sector.

Growth in production
The GE matrix for Idea Cellular will be made keeping the following two
major dimensions:

1. Market Attractiveness

2. Business Strength

Market Attractiveness: This dimension forms the Vertical axis of the GE

matrix. The factors which we have considered which may affect the industry
attractiveness for our SBU are:

1. Overall Market Size: IDEA operates in an industry which has overall

revenue of Rs. 125 Billion and has a subscriber base of 261.07 million
customers. Thus it has a huge target audience and we need to give
substantial weightage to this factor. We have given it 0.20 out of 1.0.
 2. Market Growth Rate: The telecom industry is growing at 25%. As
previously stated, this can be considered as a moderately growing and
having high growth opportunities with the growth of Indian economy.
But in the current recession scenario, we decided to give it a little less
weightage of 0.15 out of 1.0.

3. Profitability: Telecom industry net profits just increased from 12% to

14% from the last fiscal year. Due to no such significant increase in

Market
Weighted
Attractivene Weightage Rating(1-5)
Score
ss
Overall
0.20 4 0.8
Market Size
Market
0.15 4 0.6
Growth Rate
Profitability 0.10 3 0.3
Technologica
l 0.15 4 0.6
Development
Global
Opportunitie
0.05 5 0.25
s

Market
Rivalry 0.20 5 1.0

Pricing 0.15 3 0.6

Total 1.00 4.05
 profitability as compared to sales, we have given it a weightage of 0.10
out of 1.0.

4. Technological Development: With new technologies like 3G knocking

at the doors of Indian telecom sectors, technological development will
be an important factor to be considered in the business policies towards
our chosen SBU. Hence a weight of 0.15.

5. Global Opportunities: Bharti has started making forays into global

markets. With the expected entry of many foreign players in the near
future, this can open the door for global opportunities for Indian players.
Hence the weightage of 0.10.

6. Market Rivalry: Indian telecom sector is an Oligopoly where 80% of

the market share is picked by only 4 players. Also the future guarantees
the entrance of several big global names in this sector. Hence clearly
market rivalry weighs above others at 0.20 out of 1.0.

7. Pricing: Being an Oligopoly, pricing strategies are a key for any player
to make profits in such a competitive sector. Thus we have given it
equal weightage as technology and more than even factors like
profitability and growth rate.

Factors considered for Market Attractiveness

The rating is done on a scale of 1-5 where the industry attractiveness is rated
associated with the industry as a whole. Here 1 represents very unattractive
and 5 represents very attractive. We can see the difference in weightage and
type of rating varying in the different factors. The market growth rate can have
a low weightage as compared to market size but has the same rating because
growth rate is attractive for the players in the market. Also pricing may have
much more weightage as compared to global opportunities but the ratings are
the other way round. This is for the reason that pricing strategies are not that
attractive to the company because of strong competition and regulations
whereas global opportunities are more attractive for the industry.

Based on the above assumptions substantiated by the industry facts and growth
avenues, the weighted total score for market attractiveness in case of Idea
Cellular comes to be 4.05.
Business Strength:
1. Market Share: The market share of Idea Cellular is 12%. Well it just
acquired Spice Communications and is among the top 4 players in GSM
sector. But being a market follower its primary motive is profitability.
Thus we gave less weight to market share.

2. Market Growth Rate: Idea being a small player has ample of scope to
grow but its growth rate puts little effect to market rate as compared to
other players. So it has again been given weightage of 0.10.

3. Profit margin relative to competitors: This is the most important

aspect of Idea’s competitiveness. IDEA’s profit margin increased about
4 percent from 2006-07(11%) to current profit margin (15%) that is
2007-08. This is an area where it would like to have a competitive edge.

4. Technological Innovation: Idea was the first telecom operator to

launch GPRS and EDGE technology. We have given high weightage to
support its innovational outlook. Recently it formed a alliance with
“high tech computers” (HTC). It also launched and secured a position of
leader in value added services like “cellular jockey”, “background
tones”, and “group talk”.

5. Brand Reputation: IDEA already has a backbone “Aditya Birla group”

which has already established as a global and truthful image. Being a
part of Aditya Birla Group, it has to carry a brand name. But now its
strategy would be more of brand building than brand reputation. So we
have given a low weight.
 6. Sales Distribution Effectiveness: The breadth of the distribution
network has grown by over 30% in the past year. In addition to this the
company is operating additional 589 Idea ‘n U and showrooms which
supplement the distribution channels and provide customer service.

7. Advertising and Promotional Effectiveness: Idea went for aggressive

promotional techniques such as having Abhishek Bachhan as the Brand
Ambassador. The tag line “What An Idea” was very successful proving
the effectiveness of the advertising and promotional activities carried by
Idea.

8. Pricing strategies and Customer Loyalty: By adopting different

pricing strategy it discriminates among its customers. For example it has
different pricing strategies for postpaid subscribers and prepaid
subscribers.

Key
Weighted
Competitive Weight Rating(1-5)
Score
Factors
Market
0.10 4 0.4
Share
Market
0.10 4 0.4
Growth Rate
Profit Margin
relative to 0.15 5 0.75
competitors
Technologica 0.15 4 0.6
l Innovation
Brand
Reputation 0.10 4 0.4

Sales
Distribution
Effectivenes 0.10 3 0.3
s

Advertising
and
Promotional
0.15 4 0.6
Effectivenes
s

Pricing
strategies 0.05 4 0.2

Customer
0.10 3 0.3
Loyalty
Total= 3.95
 STRONG MEDIUM
WEAK 5

19%
MEDIUM

1
3.6
6

2.3
3
HIGH
LOW

5 3.66
2.33 1
he factor for Industry attractiveness will remain same for market leader as
well. Bur the competitive strength will differ and so the weights and ratings. It
is evident from our above assumptions about Airtel that they will lesser rating
to profit margins and more towards advertising and promotional effectiveness
and brand reputation. The GE matrix of Airtel will look like as under:-

STRONG MEDIUM
WEAK 5

31%

3.6
6

2.3
3

5 3.66
2.33 1
The GE matrix for Airtel indicates that it lies in the 1st quadrant corresponding
to high market attractiveness and strong competitive strength.

GE Matrix for Vodafone

The market challenger Vodafone will again have the same Market
Attractiveness dimension as the other players but will have an entirely
different competitive strength dimension. Assuming Vodafone’s company
objectives to be more focused on building a customer loyalty, we assign it a
weight of 0.15. Also its sales and distribution effectiveness is much lesser than
Airtel or Idea, so give a weight of 0.05 to it. Vodafone has a brand reputation
of the world’s largest telecom provider which it has to maintain even in the
Indian Telecom Industry. For that it would definitely look to emphasize more
on advertising and promotional effectiveness. So both these factors are given
0.15 weights.
Vodafone may still assign lower rates brand loyalty as compared to sales
distribution effectiveness as they would like to put a competitive front in the

Market
Weighted
Attractivene Weightage Rating(1-5)
Score
ss
Overall
0.20 4 0.8
Market Size
Market
0.15 4 0.6
Growth Rate
Profitability 0.10 3 0.3
Technologica
l 0.15 4 0.6
Development
Global
Opportunitie
0.05 5 0.25
s

Market
Rivalry 0.20 5 1.0

Pricing 0.15 3 0.6

Total 1.00 4.05
distribution network. Moreover they would find advertising effectiveness and
pricing strategies more attractive than a higher profit margin. The above
assumptions led us to the different dimensions and the corresponding GE
matrix. Market Attractiveness
 Key
Weighted
Competitive Weight Rating(1-5)
Score
Factors
Market
0.10 4 0.40
Share
Market
0.10 4 0.40
Growth Rate
Profit Margin
relative to 0.10 3 0.30
competitors
Technologica
0.10 4 0.40
l Innovation
Brand
Reputation 0.15 3 0.45

Sales
Distribution
Effectivenes 0.05 5 0.25
s

Advertising
and
Promotional
0.15 4 0.60
Effectivenes
s

Pricing
strategies 0.10 4 0.40

Customer
 Competitive Strength

STRONG MEDIUM
WEAK 5

23%
MEDIUM

3.6
6

2.3
3
HIGH
LOW

5 3.66
2.33 1
 Plotting the GE matrix for Vodafone, we found that it lies in the
quadrant corresponding to High market attractiveness but average internal
evaluation, i.e. average business strength.

:
 Aditya Birla Group

A US $28 billion corporation, the Aditya Birla Group is in the league of

Fortune 500. It is a multinational corporation based in Mumbai, India with
operations in 25 countries. The group is a major player in all the industry
sectors it operates in. The Group has been adjudged the best employer in India
and among the top 20 in Asia by the Hewitt-Economic Times and Wall Street
Journal Study 2007. The origins of the group lie in the conglomerate once held
by one of India's foremost industrialists Mr. Ghanshyam Das Birla. He
bequeathed most of these companies to his grandson, Mr. Aditya Vikram Birla
– the father of the current Chairman of the group, Mr. Kumar Mangalam Birla.
Mr. Kumar Mangalam Birla is the grandson of Mr. Basant Kumar Birla, who
heads his own independent business conglomerate. Several other members of
the Birla Family own and run their independent business groups.

Aditya Birla is organized into various subsidiaries that operate across different
sectors. Among these are viscose staple fibre, non-ferrous metals, cement,
viscose filament yarn, branded apparel, carbon black, chemicals, Modern retail
(under the 'More' brand of supermarkets, and also under the Trinethra, and
Fabmall brands until recently), fertilizers, sponge iron, insulators, financial
services, telecom, BPO and IT services. The Group consists of four main
companies, which operate in various industry sectors through subsidiaries,
joint ventures, etc. These are Hindalco, Grasim, Aditya Birla Nuvo, and
UltraTech Cement.

We have focused on the Idea Cellular SBU of Aditya Birla Group. It is One of
India's leading GSM mobile service operators; IDEA Cellular is headquartered
in Mumbai and has over 30 million subscribers. Innovation is central to
IDEA's Value Added Service products. It was the first to offer 'Global SMS' in
over 540 networks across all technology platforms. It has also acquired Modi
family’s Spice. But then it even faces tough competition from various major
players. The leading Mobile Networks today in India are Airtel, Vodafone
(sold by Hutchinson Essar to Vodafone), BSNL, MTNL, Orange, Aircel, Tata
Indicom, Idea, BPL etc. Each of these companies has a tough competition with
one another. BSNL & MTNL being government sectors have more advantages
than other Private sector Companies.
 STRATEGIES FOR IDEA CELLULAR
The Idea Cellular Limited falls in the “question mark” quadrant of BCG
matrix and in the High attractive and Strong Competitive strength category as
per the GE Matrix. Thus they need to formulate some strategies to try
capturing some market share, growing and building their brand image as well
as brand value.

Market penetration

The company enters where the products and the market already exists. IDEA
being a question mark that means it is competing in a high growth market but
with a relatively low share compare to its competitors. Market penetration can
be done by attracting competitor’s customers that implies increase in market
share. The strategy that IDEA can adapt under market penetration is to attract
non-users and convince to use their product more often. They are different
market penetration strategies like cutting price, increase in promotion, and
creating innovative distribution tactics. The target should be in such a way that
IDEA sales volume relative to its competitors should be high as expressed in
percentage. IDEA’s present market share is about 12%, and competitors like
airtel, Vodafone, and bsnl have a market share of about 31, 23, and 19 percent
respectively. Though telecom industry is growing rapidly every year, there is
always a little increment in the percentage of sales for IDEA. To overcome
this problem and to occupy the competitor’s position we recommend
following strategies.

• Increasing the mobile circles which are at present are only 11, so there
is always a need to expand its services.
 • Target the rural segment in India which is expected to grow by 15%
every year

• Launch different types of packages as per the requirements for different

segments of the customers

• Provide more high end services like GPRS, mobile internet services

• Collaboration with different service providers on global basis to provide

better facility to customers on roaming.

• Tracing out the search patterns which are left untapped by the
competitors to reveal new markets.

Backward Integration – In July 2008 Swedish equipment supplier entered

into a contract to provide technology “Ericsson Mobile organizer” to Idea
cellular enabling its subscribers to serve email facility on its cell phones.

Forward Integration – Company operate approximately 589 Idea” n “U and

other showrooms which supplement the distribution channels and provide
customer service.

Horizontal Integration: Idea acquired the Modi family’s stake of 40.8% in

spice which ultimately in a way increased the market share of Idea. This can
be seen as horizontal integration

Strategic Alliance

3) Product alliance

Idea should form product alliance with a company that has a strong
brand image and carry a promotion for one another. E.g. Acer in
collaboration with Ferrari launched Acer Ferrari laptops which are
catering to high end niche segment having high specifications and high
price.

Promotional Alliance:

Idea should form promotional alliances in collaboration with big movie

houses or big retail brands to promote their products. Recently SONY
Viao had a promotional alliance with “James Bond” latest movie
“Casino Royale”.

300 2014
2012
250
2010
200 2008
2006 Rs. Billi on
150
2004 Yea rs
100 2002
2000
50
1998
0 1996
1 2 3 4 5 6

Fig. INDIAN CELLULAR GROWT FORCAST

 AREAS OF OPPORTUNITIES
1) New Horizons of investment
Cellular companies have shown an unquenchable thirst to offer
customized solutions Based on individual risk appetite of customers rather
than mundane, one size fits all endowenment. Based cellular products.
Cellular products are similar to investment product with less or risk
coverage, signifying changing preferences of investors. They offer risk-
cover, as well as returns by investing in stock markets, even out
performing equity returns in certain instances. We can have the same
plans from other private players like a i r t el i.e.funds, RELIENCE
Prudential maximizer,VODAFONE standard growth. Total premium under
return for unit-linked plans in the financial year 2004-2005 stood at Rs.
82.47 billion, and outstanding growth of 422% over the previous year.
2) Indian Rural Market
A large number of Indians lives in rural India, so this market should be
tabbed by cellular companies and it require a different approach of sales
services with respect to meeting such challenges as low awareness, irregular
incomes and geographical distances. The focus has to be on simple coverage
and return. Very few companies have plans for rural India.
3) Customized Solutions
Competitive cellular market exploring the new customer segments, it
includes pension plans and children plans. By 2026 India will have 179
million people who wear above 60 years of age. According to that cellular
companies should have a marketing plan. Special children plans
are the current requirements, as the education is becoming more important
and expensive. So such plans must be introduced by all cellular
companies. ICICI Prudential and LIC have already done this.
II. WHAT IS NEEDED TO BE EXPLORERED?

1) The industry in general faces the challenge of building the credibility

of being a financial service provider while meeting a customer s
expectation of what it means to be a financial services company. Financial
service brands are based on insuring long-term financial security throw a
broad range of inherently risky services and investment options. In the
insurance sector, branding has typically involved the concept of stability;
trust and protection from risks in time of crises, or even protecting from a
crises throw a standard set of products. It will help to establish what insurers
stand for and promise and will eventually help to give a industry new image.

2) The altered scenario of the cellular market in India has brought in

new and differentiated products and services offerings to the public
and has opened new challenges for cellular companies. Devising specific
strategies to reach out to specific segments of the market, different countries
and across social strata has been one aspect of the challenge. The other
more complex one has entailed designing the products, marketing
them, ensuring the smooth selling of products, collecting premiums,
managing claims, managing & investing the funds and managing a vast
enterprise. This has created a need of strong Risk Management.

3) The core function of the marketing force of an cellular company is to

generate awareness about the cellular products among the target market.

4) Branding the marketplace is similar to branding on a cattle ranch, the

purpose of a branding program to differentiate our cow from the cattle of
range.
According to an article in the cellular marketing magazine, Feb-March
2002, brand strategy is one of the most critical parts of the underlying
business strategy of any organization. It will help to establish what
insurers stand for and promise and will eventually help to give a industry
new image. This positioning helps to give credibility to sell Risk-Free
products design to help customers insure that their family and assets are
protected.

5) Branding is the new key challenge in the financial services industry.

Life in the 21st century will be longer with more choice in more
fields of activity. The financial consequences of an increased life span are
particularly likely to be tough. Inevitably, this will lead to more complexity,
which in turn necessitates greater clarity and appeal from the service
providers. Branding is more relevant in the financial services market,
which not only faces the problem of securing and retaining customers
in an increasingly competitive marketplace but also experiences the need
for heightened relevance of the brand proposition in a world where brand
has been termed the new religion.

The industries, businesses and individuals are considerably by the services

of cellular organization.

A. The first registered life office was “Hand in Hand Society”

established in 1696.
B. In India the first life cellular was started in the Bengal Presidency in
 1818 knows as oriental life insurance company.
C. Experiencing so many ups and downs the cellular business was
found in changed shapes. Particularly after attaining independence
and to the more specific after nationalizing in 1956.
D. There was major change in the cellular sector after globalization in
2001.
E. The different MNC s company of foreign country enters in the
cellular industry with the joint venture with Indian companies.
.
ENTRANCE OF PRIVATE PLAYERS IN INSURANCE SECTORS

st
India still has low cellular penetration of 1.95 percent, 51 in the world.
Despite the fact that India boosts a saving rate of around 25 percent, less
than 5 percent is spent on .

The cellular landscape in India is undergoing major changes. Close to

foreign competition since nationalization in 1956, the life insurance industry
had been protected from competitive pressures. Now, with the reopening of
the sector, several new players have entered the scene.
The acronym for the Insurance Regulatory and Development authority of
India, it overseeing the cellular business in India. It protects the interests
of the policyholders received and ensures orderly growth of the cellular
industry and for matters connected there thereto.

Beside idea cellular limited there are other 11 private players working in
cellular sector, which are as follows.
IDEA CELLULAR LIMITED

A Lifetime of Value
Old Mutual
Old Mutual was established more than 150 years ago and has
developed into an International services group w focused on asset
gathering and asset management. The old mutual Group offers a
diverse range of financial services geographics : South Africa, the
United States and United Kingdom. The company is listed on the
London Stock Exchange capitalization of approximately $6 billon and is
member of the elite FSTS 100 index. In the 2003 rankings of the
corporations Fortune magazine, Old mutual climbed 87 places to
position number 366 and was also listed 14th company in the world.

Old Mutual is the largest financial services business in South

Africa, through its life insurance, asset management, and cellular
operations. The company serves 4 million idea cellular policyholders and
employs over 13000 South Africa operations.

In the USA Old Mutual is one of the top ten fixed annuity business
offering an array of specialist asset management. The company s US Life
business recorded sales of $4 billion at the end of 2002.

Operations in the United Kingdom are focused on wealth

management, through Gerrard as one the leading private business in the
UK.

The Old Mutual Group has the ability to cater for variety of
consumer segments and offers a comprehensive and in products for all
income groups.
 Vision and Mission Statement

IDEA Old Mutual cellular Limited An uncommon bond. Strengthened

by a common vision. Apart from common beliefs, values and objectives we
believe in the vision of a better tomorrow. It is this deep veneer of faith that
has brought us together and fortified our bond. The Global Indian financial
services brand. Our Customers will enjoy the benefits of dealing with a global
Indian brand that best understands their needs and delivers customized
pragmatic solutions across multiple platforms. We will be a world class
Indian financial services group. Our technology and best practices will be
benchmarked along international lines while our understanding of customers
will be uniquely Indian. We will be more than a repository of our customers'
savings.
We, the Group, will be a single window to every financial service in a
customer's universe. The most preferred employer in financial services. A
culture of empowerment and a spirit of enterprise attracts bright minds with
an entrepreneurial streak to join us and stay with us. Working with a home-
grown, professionally-managed company, which has partnerships with
international leaders, gives our people a perspective that is universal as well
as unique. The most trusted financial services company. We will create an
ethos of trust across all our constituents. Adhering to high standards of
compliance and corporate governance will be an integral part of building
trust.

Value Creation.

Value Creation rather than size alone will be our business driver.
 GROWTH IN INSTALLED
CAPACITY

Performance Highlights

- Sequential drop in Top-line due to subdued rural demand: Idea Cellular

recorded a 0.1% qoq drop in its consolidated top-line, on account of the
subdued rural demand due to the delayed monsoon (rural areas contribute
~40% to the company’s top-line). However, on a yoy basis, the top-line grew
by 29.1%. Idea’s standalone subscribers moved up from 42.8mn to 46.8mn
qoq in 2QFY2010 (30.4mn in 2QFY2009), while the total subscriber base,
including Spice, has moved up from 47.1mn to 51.5mn qoq in 2QFY2010
(34mn in 2QFY2009). However, the ARPU (Idea standalone), was down by
20.5% yoy and 9.9% qoq to Rs209. Segment-wise, the top-line growth,
(including Spice) was backed by National Long Distance (NLD) services,
which grew by 25% qoq (87% yoy growth) to Rs269cr. The revenues from
Passive Infrastructure services, which had a miniscule revenue contribution of
Rs9cr in 2QFY2009, were up by 2.1% qoq in 2QFY2010 to Rs225cr. The only
laggard in the growth during 2QFY2010 was a 2.8% qoq de-growth (27.5%
yoy growth) in the Mobility services segment to Rs2,926cr. Minutes of Usage
(MoUs) declined by 11% yoy and 6% qoq to 375 minutes for Idea Standalone,
while MoUs in Spice stood at 429, down by 1.1% yoy and 5.5% qoq. In
2QFY2010, Idea Standalone recorded Rs182.2cr of Revenues from its newer
circles, Mumbai, Bihar, Orissa and Tamil Nadu (incl. newly launched services
in Chennai), witnessing a growth of 27.6% qoq.
- EBITDA losses in newer service areas contracts EBITDA margins:

Idea standalone continued to witness EBITDA losses in its new service

areas, while the existing 11 areas witnessed a 40bp qoq drop in margins. On a
consolidated basis in 2QFY2010, Idea recorded a 167bp qoq contraction in its
EBITDA Margins. This was mainly due to a 73bp increase in personnel
expenditure, and an 80bp rise in subscriber acquisition and business promotion
expenses. The margins in the Indus business witnessed a 110bp qoq increase
on account of pass-through costs and benefits from vendors on recurring
expenses. On a yoy basis, the margins were up by 89bp, mainly on account of
a 447bp reduction in Roaming and Access Charges, and a 224bp drop in
subscriber acquisition and business promotion expenses, vis-à-vis an increase
of 600bp in Network Operating Expenditure.

- Higher Interest costs and effective tax rate suppress the Bottom-line:
Owing to a 21.6% qoq increase in interest costs and an increase in the
effective tax rate from 6.4% to 14% in 2QFY2010, the Bottom-line declined
by 25.9% qoq. On a yoy basis, the Bottom-line spurted by 52.8%, mainly on
account of strong operational efficiency.
Outlook and Valuation

In addition to the five newer service areas, Idea has recently expanded to the
service areas of Jammu & Kashmir, Kolkata & West Bengal, and North East
& Assam. It now covers a total of 18 service areas, which will contribute to
revenues from 3QFY2010 onwards. This move is in line with the company’s
expansion plan to garner a pan-India presence, for seizing upcoming
opportunities, like the demand in Broadband services, Value Added Services
and the forthcoming 3G auction, once the regulatory and pricing environment
in the Indian Telecom Sector stabilises. Hence, the company’s operational
expense is expected to be on the higher side in the coming quarters, as it
focuses on brand-building and high-end technology to match up with the
growing demand, and for increasing its coverage in rural areas. For these
initiatives, Idea has planned a capex of Rs45bn in FY2010.
Going forward, we expect Idea Cellular to record a CAGR of 23% in its
consolidated Top-line over FY2009-11E, while the Bottom-line is expected to
record a CAGR de-growth of 1.5% over the same period. We estimate the
company’s mobile subscriber base (excluding Spice) to post a CAGR of 32%
over FY2009-11E and to touch 67.9mn, while including Spice, the subscriber
base is estimated to post a CAGR of 31.4% to touch 74.3mn. We estimate
blended ARPUs (ex-Spice) to post a CAGR decline of 15% to Rs190.4 by
FY2011E. At the CMP, the stock is trading at a P/E of 20.2x FY2011E EPS
and an EV/EBITDA of 6.1x FY2011E EBITDA.

On account of the significant headwinds being faced by the Indian Telecom

Sector in general, and little scope of an improvement in the near-term
profitability of Idea in particular (with an increase in the opex and capex), we
believe that the company is currently trading at expensive valuations. Hence,
we maintain a Reduce on the stock, with a Target Price of Rs49. We have
valued Idea’s core business at Rs27 and have valued the Tower business (16%
stake in Indus) at Rs22 per share, based on our DCF estimates.

ACCUMULATE

Performance Highlights Price Rs43 „ Top-line soars on strong

subscriberadds, Spice consolidation: Idea Cellular recorded a
strong 59.6% yoy and18.5% qoqgrowth in consolidated Target
Price Rs48 Top-line in 3QFY2009driven byaincrease in its
mobile subscriber base, which grew byimpressive
62.4%yoyand 12.6% qoq. At the end of Investmemonths
3QFY2009, Idea had a mobile subscriber base of 34.2mn,
recording net adds of 3.8mn over the quarter. Including Spice,
the company’s subscriber Stock Info base stands at 38mn.
Gross mobile average revenues per user (ARPUs, ex-Spice)
rose 1.6% qoq (fall of 5.7% yoy) to Rs271 (Rs266 in
2QFY2009, Sector Telecom Rs287 in 3QFY2008). The
sequential rise in ARPUs was due to higher Market Cap (Rs cr)
13,299 in-roaming Revenues. Spice ARPUs rose 8% qoq to
Rs279 (Rs259 in 2QFY2009). Part of the Revenue growth was
due to consolidation of Spice Beta 1.0 with effect from October
16, 2008 (proportionate basis, with 41.09% stake) and
proportionate Revenues from Indus Towers.

52 WK High / Low 129 / 34

Minutes of Usage (MoUs) declined 1.7% qoq to 410 minutes

per user per Avg Daily Volume 1948137 month. On a yoy
basis, however, this metric grew by a decent 8.8%. Thus, Face
Value (Rs) 10 the MoU fall sequentially led to rise in
realisations, with Revenues per Minute (RPMs) increasing 3.2%
qoq, even as they fell by over 13% on a yoy basis. BSE Sensex
8,674 In 3QFY2009, the company launched operations in the
Bihar circle and full impact of the Mumbai launch was also
absorbed. These circles recorded Nifty 2,679
Rs48.3cr of Revenues. Top-line for the 13 service areas of the
company (ex-Spice) grew by a robust 53.2% yoy and 13.9%
qoq. BSE Code 532822 NSE Code IDEA „ Margins fall on
expansion, higher rental sites and Access Charges: In
3QFY2009, Idea recorded a significant 777bp yoy and 81bp
qoq contraction Reuters Code IDEA.BO in EBITDA Margins.
Network Expansion costs rose, as a percentage of Sales, by
513bp yoy and by 270bp qoq. This quarter, the number of
Bloomberg Code IDEA@IN rent-paying sites for Idea rose by
146% yoy to 21,459 (8,721 in 3QFY2008). Shareholding
Pattern (%) This led to the significant rise in Network
Expenses. Roaming & Access Charges also rose by 148bp yoy,
as a percentage of Sales (7bp qoq). Promoters EBITDA losses
of 158.4% (Rs76.5cr) in the Mumbai and Bihar circles also
49.1 adversely impacted the company’s Margin profile.

MF/Banks
/Indian FIs

6.7 „ Lower Margins, higher Depreciation reduce Bottom-line:

Owing to FII/ NRIs/ OCBs Margin contraction and higher
Depreciation (up 72.9% yoy),

Idea’s 40.1

Bottom-line for the quarter declined 7.3% yoy. However, on a

qoq basis, Indian Public/Others 4.1 strong growth of 52.3%
was recorded due to lower Net Interest Costs (down 42% qoq)
due to Rs179.4cr of Interest Income recorded.
Abs. 3m 1yr 3yr*

Key Financials (Consolidated)

Sensex (%) (11.2) (50.7) (32.7) Y/E March (Rs

cr) FY2007 FY2008 FY2009E FY2010E Net Sales 4,366 6,720
10,094 14,451 Idea Cellular (%) (3.5) (61.3) (49.9)
% chg 47.2 53.9 50.2 43.2 * Since listing on March 9, 2007

Net Profit 502 1,042 804 909

% chg 148.2 107.6 (22.8) 13.0 Harit Shah

EBITDA Margin (%) 33.6 33.5 26.7 25.1

FDEPS (Rs) 1.6 3.2 2.5 2.8 Tel: 022 – 4040 3800 Ext: 345

P/E (x) 27.6 13.3 17.2 15.3 e-mail:

harit.shah@angeltrade.com

EV/EBITDA (x) 10.7 8.6 5.3 4.3 RoE (%) 30.3 36.4 10.5 7.4

RoCE (%) 18.4 19.8 12.2 17.1 Sales/GFA (x) 0.6 0.6 0.6 0.7

Mobile ARPUs (Rs/user/month)340 295 257 247

Source: Company, Angel Research

January 23, 2009 1

 GROWTH IN PRODUCTION.
Idea Cellular

Idea cellular Telecom Subscriber growth drives Top-line; first

quarter of Spice consolidation In 3QFY2009, Idea Cellular
recorded a strong 59.6% yoy and an impressive 18.5% qoq
growth in consolidated Top-line primarily driven by growth in
the company’s mobile subscriber base, which grew 62.4% yoy
and 12.6% qoq to 34.2mn. Over the year, Idea added 13.1mn
mobile subscribers, while over the quarter it added 3.8mn
subscribers, implying monthly net adds of 1.3mn. Gross
mobile ARPUs fell by 5.7% yoy but rose 1.6% qoq to Rs271
(Rs287 in 3QFY2008 and Rs266 in 2QFY2009).

This was the first quarter of

consolidation of Spice with the company. The consolidation is
with effect from October 16, 2008. At the end of the quarter,
Idea held 41.09% stake in Spice Communications, with the
balance holding distributed amongst Telecom Malaysia
International (TMI) and Green Acre, an affiliate. Proportionate
consolidation of Indus Towers was also done, with
proportionate Revenues from joint ventureatRs127.3cr. This
boosted Top-line. Excluding this, Revenues from its 13 service
areas (including Mumbai and Bihar) grew 53.2% yoy and
13.9% qoq. Mumbai and Bihar recorded Rs48.3cr in Top-line
and ended the quarter with 3.3 lakh and 2.7 lakh subscribers,
respectively. At the end of 3QFY2009, Idea’s marketshare in
its circles of operations stood at 17.6% v/s 17.2% at the end of
2QFY2009 and 17.3% at the end of 3QFY2008.

argins. Network Operating Expenditure rose, as a percentage

of Sales, by 513bp yoy and by 270bp qoq. This quarter, the
number of rent-paying sites for Idea rose by 146% yoy to
21,459 (8,721 in 3QFY2008). This led to the significant rise in
Network Expenses. Roaming
 & Access Charges also rose by 148bp yoy, as a percentage of
Sales (7bp qoq).

Issues 1.925mn Compulsorily Convertible Preference Shares to

Providence affiliate Idea Cellular on December 5, 2008
received Rs2,100cr from an affiliate of Providence Equity
Partners by way of subscription to 1.925mn Compulsorily
Convertible Preference Shares, which will be converted into
16.14% of the equity capital of Aditya Birla Telecom

(ABTL) post conversion.

Signs IRU with Indus Towers to transfer 11,100 towers; to

impact Margins by 4-5% Idea Cellular has signed an
Indefeasible Right to Use (IRU) agreement with Indus Towers,
the tower joint venture (JV) between itself, Bharti and
Vodafone involving the transfer of 11,100 of its towers to
Indus, each of which will have one cell site for Idea. Thus, out
of the

balance of 17,830 towers that were until now non-rent paying,

11,100 will become rent-paying on the books of Indus. The
approximate book value of these towers is Rs1,450cr.

This will lead to a significantly higher component of rent-

paying towers for Idea and capex will get converted into opex.
There will be a 4-5% impact on EBITDA Margins in FY2010 on
account of this. However, lower Depreciation and Interest
costs will offset the impact to an
 extent on the Bottom-line. Moreover, with consolidation of
16% of Indus, the impact is likely to be limited to around 2-
2.5% at the Net Profit level.

January 23, 2009 3

Accumulate on the stock and believe that while the

company’s recent initiatives will enable it to build a strong
business in the longer-term, the increasingly difficult
environment is likely to exert significant strain on its key
operating and financial parameters, thereby limiting major
upsides in the stock price.

FUTURE PLANS
 Future plane :

Idea Cellular bets big on 3G, WiMAX

Our Bureau
Plans to enter rural, neglected circles to gain subscribers
Bangalore , Jan. 11

Telecom operator Idea Cellular is betting on both 3G and WiMAX.

3G is the third generation telecom network which will bring faster data access
to subscribers who want to connect to the Internet. A WiMAX (Worldwide
Interoperability for Microwave Access) network will mean users can avail
themselves of high-speed broadband Internet wirelessly over their laptops.

The Aditya Birla owned company has 3G ready networks as it has sourced
latest equipment from global vendors. Hence upgrading to 3G will not be an
issue, said sources.

The worldwide 3G subscriber base is expected to be 540 million in 2010,

according to market researcher InStat.

Trials in 3 cities

Idea is simultaneously conducting indoor WiMAX trials in three cities - Pune,

Bangalore and Kochi. The Government has freed spectrum for a limited
amount of time for Idea and a few other operators to conduct indoor and
outdoor trials in various parts of the country.
Eyes rural circles

Idea also plans to enter rural and neglected circles as a strategy to gain
subscribers.

The company recently filed for an IPO with SEBI and hopes to use part of the
funds to roll out network in Bihar. It has paid Rs 10 crore as licence fees to
enter the state. The state suffers a tele-penetration of just 7 per cent, compared
to a national teledensity average of 14 per cent.

However, Bihar is the third most populated circle in the country, according to
sources. The North East, another circle where telecom revolution is still in its
early stages, is also on Idea's radar.

The operator will begin to catch up with other players with its new backing by
a single promoter - the Birla group. It plans to `cover gaps quickly', reported
sources on Thursday.

Other advancements in the telecom industry will help it cut costs - use of e-
mail to send bills to customers; sharing cell sites; smaller base transmission
stations that will mean lesser infrastructure requirements and expenses and
independent tower operators. Along with its plan to go for a national long
distance licence, it will also look at international long distance in the near
future.

Idea has a net worth of Rs 600 crore while its accumulated losses are in the
range of Rs 1,500 crore. It has 1.3 crore subscribers and an average revenue
per user of Rs 376. The market share owned by the operator is 8.4 per cent.

The company's IPO is expected to fetch Rs 2,500 crore. It has also opted for
15 per cent greenshoe option, which will bring the value to Rs 2,875 crore. It
plans to pay back preferential shares worth Rs 600 crore once the IPO is out
by mid-Februrary.
 Financial Analysis Of The Company For At Least Three Years

Idea Cellular seems like a good investment for the long term.
India is one of the fastest growing cellular markets in the world and this is likely to
continue for next five years at least.

PE valuation

If we look at FY 2008 Q1 results, the PAT figure stood at Rs 305.8 crore.

With 2,635,360,539 shares outstanding, the eps works out to be around Rs 1.16.
However this quarter had an investment and forex gains of Rs 78.8 crore.
Removing these as exceptional items, the profit figure stands at Rs 227 crore and
eps stands at Rs 0.86.

For FY 2008, the eps is expected to be Rs 4+. At Rs 120, the stock is trading at 30
times FY 2008 earnings.

Idea Cellular will nearly double its PAT in FY 2008 compared to FY 2007.
Considering the growth that Idea has been showing, a forward PE of 30 seems fair
valuation.
For last four finnacial years, the PAT for Idea Cellular has been

FY 2004 - Rs -200 crore (loss).

FY2005 - Rs 66.60 crore
FY 2006 - Rs 210.61 crore
FY 2007 - Rs 509.30 crore
FY 2008E - Rs 1050 crore (estimates)

As April 2008 comes closer, people will start looking at FY 2009 (April 2008 –
March 2009) earnings.
Idea Cellular's FY 2009 eps is estimated to be around Rs 5.5. At Rs 120, the
forward PE based on FY 2009 earnings works out to be 21.81.
FY 2010 eps should be surely more than Rs 7.
If we give Idea Cellular a forward PE of 22-23 in 2009, one can expect a price
of Rs 160+ in next two years (mid 2009).
Investors can accumulate the stock around Rs 110-Rs 112.
The stock has gone below the 50 day EMA and may see some downside in the
short term.

Currently the stock is fairly valued. There isn't much upside in the near term
and this is not a trading call.

Idea has been struggling to enter the Mumbai, Bihar and Jharkhand market because
of spectrum unavailability. This issue is expected to be resolved by end of FY
2008. Once Idea starts operating in these circles, it will get the fuel required for
growth for next 2-3 years.
Idea Cellular board has approved the formation of a separate subsidiary for its
tower business. There will surely be some cost benefits and value unlocking due to
this restructuring, but there is not enough clarity regarding it. Most probably the
gains will be marginal and will have no major impact on the actual earnings.
My view remains the same right now. The margins are getting squeezed and this is
having an effect on the PAT figures. Also government's new spectrum policy will
make it difficult and expensive for existing GSM players to get fresh spectrum.
News in today's papers = Reliance Communications wants to reduce
rates in the GSM sector - this means even thinner margins for players like
Idea.
The high growth time for mobile operators is now almost over.
Once CDMA players like Reliance Communications enter GSM market, the
competition will increase further.I still think the target of Rs 160 by mid 2009 is
achievable. (Actually it has already touched 160 twice in October. - 160.8 on 16th
and 160.9 on 18th).However, if you buy Idea at Rs 130, Rs 160 in 18-21 months will
not be that great a return If you wish to invest in this stock, I suggest you buy it at a
lower levels - something like Rs 115.There is less risk in this stock for the long term,
but I don't think it can give spectacular growth from now on.Personally, I would
look at other sectors like power, capital goods, financial services etc. Telecom no
longer attracts me.Not a bad move. Idea is losing its sheen.However Reliance
Communications seems fully valued at this price (going at a PE ratio of more than
50). You should not really expect anything more than moderate returns in next one
year. It will soon enter the GSM arena and this may bring in some additional
revenue. However, the whole mobile space is now getting saturated and margins are
Problem being faced by the organization :

On its Q1-11 financial results earnings confernece call, Idea

Cellular MD Sanjeev Aga fielded quite a few questions
around 3G. While declining to share specific rollout plans, he
said that the company will not be stingy with its 3G launch,
and that their 3G coverage will be much more than 25%
in less than a year.

Idea Cellular is expecting allotted of spectrum in September,

expects all large companies to truly launch services in the
months of December, January and February. “You could
always sneak in and launch something earlier, but by the time
you test, integrate and provision, it would be around
that period.” Idea expects to launch 3G services within the
2010-11 fiscal.
- Idea expects 3G to release voice capacity and data, with
data being a function of how many people have 3G devices
and want to use data, “but inter alia the voice capacity will
also be transferred from 2G to 3G, particularly where there is
congestion and where there are 3G enabled terminals.”
- Of about Rs. 58 billion for the 3G Spectrum fee, only Rs. 19
billion was short-term debt. As of 30th June 2010, Idea had a
total debt of about Rs. 98
billion.
– Handset Subsidies: Aga doesn’t believe that handset
subsidies will play a big role in India, and it never has.
“handset subsidies work when there are two or three
operators. So one big handset guy might tie up with someone.
These things do not work when there are so many operators
on a large term basis. Current handset penetration of 3G in
India is still in single digits.(Ed: we think he meant single digit
millions)
– Operating cost because of 3G will go up, replacing 2G
investments. “So yes, it will open up our cost stream but it will
also open up revenue stream. It could be that the cost stream
kicks in ahead of the revenue stream.”
– Payback on 3G: it cannot be calculated because 2G flows
into 3G, so the costs “flow into one another and the revenues
co-live. One way of looking at is if you paid a certain amount
of money for 20 year spectrum.”
– Data versus voice margins: worldwide, data demand has
increased substantially, but margins have been hard “and
there are technical problems around actually billing data
which makes it hard.”
– Data Approach: ‘In the beginning data or 3G services were
not picking up in Western Europe and USA and there were a
lot of “eat as much as you can” plans, which are now
becoming problematic. So we will do the sensible thing, we
will be very careful. But it is very difficult for me to say
because it is a competitive market and it is hard to say what
will happen. But we will be sensible about it.” Aga said that
they will be serving both voice and data, and doesn’t forsee a
data capacity crunch, until about two or three years
– 3G Equipment: Equipment procurement issues not fully
resolved for 3G
Mobile Number Portability
- Idea Cellular has been ready for MNP for a long time, and has made
enormous investments. Just that “this is one of those things where the slowest
camel determines the pace of the caravan, and until everyone is ready it would
not happen.”
- MNP will help consolidate stronger players, and will not be disruptive. “we
do not think it is going to be game changing at all. Given the fact that, a
number of people who are looking to retain their number, who have had their
number for years, their revenue contribution to the total national sector
revenue is not very large. The nature of the Indian market has changed over
the years, so we do not think it is going to be a game changing event.
Indian Market Scenario & Tariffs
- Indian market moved from 6.6 operators per circle (on an average) on 1st
January 2009 to 10.2 as of 30th June 2010. However, for the last two years,
Idea’s revenue market share has gone up from 9.8% to 12.6% between April
2008 and March 2010, whereas it would have been expected to go down.
- In the last one year, “when we saw the bloodbath at its bloodiest, Idea
increased its revenue market share by 0.9%.”

- “In the quarter ended June 2009, that is exactly one year ago, Idea had
reported a realized rate of 58 paisa per minute and a variable cost per minute
of 44 paisa. For the latest quarter, which is the quarter that just ended, the
realized rate itself is down to 44 paisa, which was the variable cost per minute
one year ago. Now, if we had stayed at the variable cost one year ago, we
would have had a nil EBITDA margin. However, in the quarter that just
ended, the variable cost per minute is down to 35 paisa…we are not the lowest
in India (in terms of realised rate per minute), but there are indeed very few
companies in India or in the world who can run a quality operation at 44 paisa
per minute, keep investing in the future, support losses from nine gestating
circles and still make a cash profit of over Rs. 700 Crores per quarter. In fact,
over the last six to eight quarters, while the world around us might have
changed, our cash profits have remained largely steady.”

- Tariffs have declined by about 5.5% on a quarter-on quarter basis.

- But if you see last six months, the decline was steeper in the first three of
these six months. Since then, the decline, say, from March, April to June, has
been slower. It appears that the rate of decline is slowing. That means there is
a tendency to flatten, based on pure numbers.
- “(Tariff) Bloodbaths don’t happen because anyone wants it. They happen
because you have a situation where no one is in control. You get sucked into
it. But looking at the economic analysis, if a large number of companies are
burning cash, it places an inherent restriction for long term. In short term you
can always get some adventurous or courageous bank to lend money and they
are plenty of them in India. But at some point of time, the chickens come
home to roost and I think those days are not very far away. So I would be
surprised if you have another round of bloodbath”

Formulation of problem for the project report :

Objective of the project

1. To find out the perception of the general people towards

the land line & Mobile phone.

2. To find out the telecom market share of different

companies in Gwalior.

3. To find out the consumer satisfaction towards the different

plans offered by the company.
4. Managing the distribution channel of idea cellular

PRODUCT
Scope of the Study:
As learning is a human activity and is as natural, as breathing.
Despite of the fact that learning is all pervasive in our lives,
psychologists do not agree on how learning takes place. How
individuals learn is a matter of interest to marketers. They
want to teach consumers in their roles as their roles as
consumers. They want consumers to learn about their
products, product attributes, potential consumers benefit, how
to use, maintain or even dispose of the product and new ways
of behaving that will satisfy not only the consumer’s needs,
but the marketer’s objectives.

The scope of my study restricts itself to the analysis of

students preferences, perception of different mobile service
providers. The scope of my study is also restricts itself to
RIMT-IMCT only.
Period of study

IDEA Cellular Limited was incorporated in 1995 and is one of

the leading GSM mobile services operators. Headquartered in
Mumbai, it has licenses to operate in all 22 service areas
across the country, though commercial operations are
currently in 13 services areas.

IDEA enjoys a market leadership position in many of its

operational areas. It offers GPRS on all its operating networks
for all categories of subscribers, and was the first company in
India to commercially launch the next generation EDGE
technology in Delhi in 2003. As a pioneer in technology
deployment, it has been in the forefront through the adoption
of bio fuels to power its base stations, and by employing
satellite connectivity to reach inaccessible rural areas in
Madhya Pradesh.

IDEA has been a leader in the introduction of value-added

services, and there are several firsts to its credit, including a
voice portal ‘Say Idea’, Idea TV, voice chat, instant
messenger, and many more. Tariff plans have been customer
friendly, catering to the unique needs of different customer
segments

In 2007 IDEA was listed on the National Stock Exchange (NSE)

and the Bombay Stock Exchange (BSE).
Contact us
Idea Cellular Ltd.
Corporate office
5th Floor, Windsor
CST Road, Kalina
SantaCruz (E),
Mumbai 400 098
India
Tel: 022 6682 0000 (board line)
Website: www.ideacellular.com

Idea Cellular
Idea Cellular started its operations in 1995 and is under the
Aditya Birla Group, which holds 98.3% stake in the company.
The Company Idea Cellular Limited is one of the telephony
wireless companies that functions in many states in India.

The Company Idea Cellular is the leading mobile services GSM

operator in the country. The Company Idea Cellular Limited is
the only cellular operator in India to launch EDGE and GPRS.
The chairman of the company is Mr. Kumar Mangalam Birla
and the managing director is Mr. Sanjeev Aga. Idea Cellular
Limited has the license to provide services in 11 telecom
circles in the country. The telecom circles where the Company
Idea Cellular has operations are Goa, Maharashtra, Andhra-
Pradesh, Chattisgarh, Kerala, Haryana, Uttaranchal, Gujarat,
Delhi, UP- West, and Madhya Pradesh. The company's
footprint at present covers around 45% of the population of
India and more than 50% of the telecom market.

Idea Cellular Limited was the 1st cellular company in the

country to launch the scheme of music messaging with
background tones, cellular jockey, and group talk. The
company was also the 1st to launch mobile email services and
voice portal. Idea Cellular Company offers various services to
its customers that includes prepaid and post paid mobile
services. The company also offers roaming, value added
services, and call management services to its customers. The
Company Idea Cellular Limited has offered revolutionary tariff
plans to its customers such as Lifetime Idea, Super Power,
Women's Card, Lifelong offer, and Outdoing 2 Minutes Free.

Idea Cellular in call management services offers various

services to its customers such as call conference, CLIP, CLIR,
call divert, itemized bill, and call wait facilities. The company
provides roaming facility to its customers who is very efficient
for the company has a very wide network, which covers more
than 530 cities in the country and also in around 80 countries
across the world. The Company Idea Cellular also provides it
customers with the facility that they can pay their mobile bills
on line through the company's website. As the company
provides the best services to its customers, the subscriber
base of the company has increased at a very rapid pace. The
subscriber bases of Idea Cellular in various states of India are:

• Andhra Pradesh - 1,737,116

• Haryana - 834,786
• Rajasthan - 235,330
2
• Maharashtra - 2,807,982
• Madhya Pradesh - 1,328,780
• Gujarat - 1,715,774
• Kerala - 1,482,799
The Company Idea Cellular Limited has won the GSM
Association Award in the category of Bill Flash. The company
is the 1st cellular operator in the country who has won an
award on such a big platform. Idea Cellular Limited in order to
expand even more has acquired the Company Escotel in 2004.
The number of telecom circles where the company operates
has increased with this acquisition and thus it has helped the
company to have a pan India presence. The Company Idea
Cellular is also planning to upgrade its network that will
ensure that the best quality of service is provided to its
customers.

Idea Cellular has become the topmost company in the telecom

sector in India on the basis of the quality of its services. And
so in the future also, the company must continue to provide
its customers with better facilities for this will help the
company to grow and prosper.

Method of study:

The study is a cross sectional study because the data were

collected at a single point of time. For the purpose of present
study a related sample of population was selected on the
basis of convenience.

Sources of Information:

Idea Cellular Limited

Idea Cellular is India's fifth largest telecom wireless

service operator with ~11% of the wireless subscriber
base and ~13% revenue market share. Idea is a leading
GSM (Global System for Mobile Communication) mobile
services operator with about 66.7 million
subscribers at the end of May, 2010. The company
covers all the 22 2G telecom circles in India. It operates
both in the 900 MHz & 1800 MHz spectrum. The
company bagged 11 circles in the recently concluded
3G auction. Idea also has NLD and ILD operations.
Idea has acquired Spice Telecom which is a leading
player in the Punjab and Karnataka telecom markets.
Aditya Birla Group is the promoter of Idea Cellular.

KEY INVESTMENT ARGUMENTS

_ Successful 3G spectrum auction for the company
Idea’s strategy for the 3G auction was considered the
most successful among the telecom operators who
participated in it. It bagged 11 service areas, covering
49% of all India revenue generation. They include
Kerala, Maharashtra, Andhra Pradesh,
Gujarat, Madhya Pradesh, Uttar Pradesh (West), Uttar
Pradesh (East), Haryana, Panjab, Himachal Pradesh &
Jammu & Kashmir. It is a market leader in 4 of these
circles and is ranked second in other 3 circles. Its
average revenue market share in the bagged 3G
markets is 21%, which augurs well from a payback
perspective. It also protects Idea’s 80% existing 2G
revenue as and when the number portability
becomes a reality. Total payment for 3G spectrum
stands at Rs 5769cr., which is the circles it lost. The
mobile penetration in the circles it won is around 53%.
The average monthly revenue per user in the circles it
has won is Rs 199 compared with Rs 146 in the circles
it lost.

_ Addition of new 2G telecom circles to boost financials

The company launched its services in Orissa, Chennai &
Tamil Nadu, Jammu &
Kashmir, Kolkata & West Bengal and Assam & North
East states in phases during
FY 2009-10. It is now a pan India operator. The impact
of the subscriber addition in
these areas would accrue in the coming quarters.

_ Attractive 2G spectrum profile

Source: Company
Investment Details
CMP (Rs.) 58.0
Target (Rs.) 69.0
Upside Potential (%) 19.0
Horizon (Months) 10-12 M
Shareholding
Source: BSE. Figures as on March 31, 2010.

Analyst:
Atul Kanwar
atulkanwar@bajajcapital.com
Reviewed by:
Alok Agarwala
aloka@bajajcapital.com
Profile
Industry Telecom
Market Cap (Rs cr.) 19141.3
Face Value (Rs.) 10.0
52-week high/low (Rs.) 84.8/47.8
Book Value (Rs.) 34.3
Price / Book Value 1.7
PE Ratio (TTM) 20.1
Dividend (%) 0.0
Average Daily Volume (1 Y) 6425658
Stock idea – Idea Cellular Ltd.
Bajaj Capital Centre for Investment Research 2/6
_ Idea is doing very well in the 900Mhz frequency
service areas
Out of the nine 900 MHz circle under its belt, Idea is
the leader in four of them. It is
the no. 2 player in other three service areas. Overall it
is the no. 2 player in these 9
service area with a market size of 20.6%.
Telecom Service Area
(900 Mhz)
Revenue Market Share
(RMS)
Rank
Madhya Pradesh 29.1% 1
Kerala 29.0% 1
Maharashtra 28.4% 1
Uttar Pradesh (West) 27.7% 1
Haryana 20.4% 2
Punjab 17.8% 2
Andhra Pradesh 16.1% 2
Gujarat 18.0% 3
Karnataka 6.4% 6
TOTAL 20.6% 2

Source: Company
_ Growth in subscriber base, Minutes of use on network
& VAS
Idea closed FY09 with ~39 million subscribers. The
company crossed the ~50 million subscriber mark in
August 2009. The growth has been very strong with the
subscriber base touching 66.7 million by the end of
May 2010. Total Minutes of Usage on the network were
44.2 billion in Q4FY09, against 68.3 billion in Q4FY10,
showing a growth of 54.5% on a YoY basis. Value
Added Services (VAS) as % of revenue has grown from
9.5% in Q4FY09 to 12.4% in Q4FY10.

_ The Indus advantage

Indus is the largest independent tower company in the
world, having about 1,03,000 towers under its
management. It provides infrastructure service in 15
service areas. Indus benefits from assured tenancy
from its promoters and the other operators. Idea
benefits from the reduced capital expenditure and the
embedded value of the shareholding.
Source: Company
_ Strong promoters & management
Idea cellular, belonging to the Aditya Birla group has a
strong promoter background. It also has a strong
management. The management quality was very
evident in the recently concluded 3G spectrum auction
where Idea managed to bag most of the 3G service
areas it aspired for, paying the least amount among
the major telecom wireless service providers.

Idea Cellular V/s NSE

2G Telecom Circles Covered
Source: Company
Subscriber Base (million)
Source: Company
Stock idea – Idea Cellular Ltd.
Bajaj Capital Centre for Investment Research 3/6
_ Increase in revenue market share
Idea’s revenue market share has increased from ~10%
in Q4FY08 to ~13% in Q4FY10. Market Share – Q4 2008
Market Share – Q4 Source: Company
KEY CONCERNS
_ Broadband woes

The company failed to win any broadband spectrum in

the recently concluded
Broadband Wireless auction.
_ Hyper Competition and Overcapacity
The overcapacity in the telecom sector has led to cut
throat competition among the
service provider’s with prices dipping to all time lows.
_ Decline in Operational Indicators
Average Revenue per user (ARPU) has declined from
Rs. 255 in Q4FY09 to a low
of Rs. 185 in Q4FY10. Realized Rate per minute has
declined from Rs.0.63 to
Rs.0.47 for the same period.
_ TRAI may charge the company for excess 2G spectrum
TRAI may charge GSM players Rs. 10,500cr. as a one
time fee for the excess 2G
spectrum held by them. Idea’s share comes to Rs.
1100cr.
VALUATIONS
The decision of the government to increase the number
of players in each circle has led to a sharp fall in the
telecom tariffs. The prices that were already among
the lowest in the world seem to have nosedived further
and may not be sustainable in the long term. We feel
that the tariffs have bottomed out and so has the Idea
stock, which has priced in all the bad news. Idea
cellular, a Rs 19141.3 cr. company by market
capitalization, is currently trading at a share price of
Rs 58.0. The current EPS is Rs 2.9, which translates
into a PE of 20.1. In
terms of price to book value, it is current available at
1.7. Market cap to sales ratio is 1.5. Given the growth
prospects of the company, the stock is an attractive
buy. We recommend a “BUY” on the stock with an
investment horizon of 10-12 months and target price of
Rs. 69.

Cell
Sites
Source: Company
Average Revenue per User
(ARPU)
Source: Company
Value Added Services as % of
Revenue
Source: Company
Stock idea – Idea Cellular Ltd.
(%)
Net Sales 3319.0 3135.8 2930.1 5.8 13.3
Other Income 51.9 0.0 0.0
Total Income 3399.7 3149.5 2942.5 7.9 15.5
Total Expenditure 2424.2 2335.3 2130.6 3.8 13.8
PBIDT 975.5 814.1 811.9 19.8 20.2
PBIDT Margin % 29.4 26.0 27.7
Interest 114.1 93.8 104.9 21.6 8.8
PBDT 861.4 720.4 707.0 19.6 21.8
Depreciation 566.7 513.1 431.0 10.5 31.5
PBT 294.7 207.3 276.1 42.2 6.8
Tax 28.1 37.2 21.1 -24.4 33.4
Adjusted PAT 266.6 170.1 255.0 56.7 4.6
APAT Margin (%) 8.0 5.4 8.7
Financials: Consolidated
Rs. Cr.0903 200803 200703 200603
4 yr
CAGR %
Share Capital 3300.2 3100.1 2635.4 2592.9 2259.5
Networth 13245.2 3540.8 2179.8 650.6
Capital Employed 22159.3 10056.2 6430.3 4419.2
Total Income 12530.7 10652.2 6919.1 4411.4 2989.6
43.1
Total Expenditure 9039.9 7309.9 4458.5 2889.3 1890.9
47.9
Revenues 12397.9 10131.3 6720.0 4366.4 2966.2 43.0
PBIDT 3490.8 3342.2 2460.6 1522.1 1098.7 33.5
Other Income 83.6 516.3 199.1 46.2 24.5

Interest 400.5 1000.3 469.0 341.1 329.4

Depreciation 2014.9 1402.8 876.8 671.8 549.5
PBIT 1475.9 1939.4 1583.8 850.3 549.2 28.0
APAT 953.9 664.5 1004.1 493.9 210.3 45.9
Operating Cash Flows 2264.2 2522.4 1605.7 1277.7
Free Cash Flows -7613.8 -3454.4 -669.4 755.6
Dividend % 0.0 0.0 0.0 0.0 0.0
CEPS (Rs.) 7.4 7.3 4.5 3.4
EPS (Rs.)* 2.9 2.1 3.8 1.9 0.9 32.8
Debt-Equity Ratio 0.9 1.9 2.3 2.9
Interest Coverage Ratio 1.7 3.4 2.5 1.7
RoNW % 7.1 21.8 14.4 9.0
PBIDT Margin % 28.2 33.0 36.6 34.9 37.0
PBIT Margin % 11.9 19.1 23.6 19.5 18.5
APAT Margin % 7.7 6.6 14.9 11.3 7.1
Total Asset Turnover Ratio 0.5 0.6 0.6
Fixed Asset Turnover Ratio 0.8 0.9 0.8
Market Cap/Sales 1.5
PE Multiple 20.1
P/BV Ratio 1.7

Stock idea – Idea Cellular Ltd.

Bajaj Capital Centre for Investment Research 6/6
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Statistical tools and techniques used:
The current state of industrial application of statistics does not
live up to its glorious creative past. We have statistical
methodology but not the clarity of purpose or the market
image that facilitates its use. When statistically based Quality
and Reliability methods are used they are not always used
correctly.

Taking stock of the current and future state of the application

of statistics in quality improvement in industry and commerce,
the first question must be do the old needs for statistics still
exist? Have the questions changed? Technological change and
a change of mind set have indeed clearly made their mark.
Just as for most purposes we no longer need tables of
logarithms, computing power and on-line instrumentation
have converted some of the analysis, forecasting and control
issues of the past into history. Of course, change has also
created new problems, as old methodologies prove
inadequate and new needs are revealed. But the problems are
more complex, more complicated and more academic – and
therein lies the real problem.

From being a well-founded routine analysis process,

employing relatively large numbers of statistical assistants to
carry out the laborious calculations of numbers according to
an assured well-defined unchanging enumerative framework,
statistics has evolved into an elitist, remote, obtuse – and for
many in industry and commerce, unnecessary – set of
approaches and people. There are two dimensions of this
change. Firstly, the work of statistics has changed:
computational power together with the switch in statistical
emphasis from enumerative to analytic studies, which draw
inferences about future but currently badly defined processes,
mean that statistics has become less automatic and hence
less accessible. Secondly, statisticians have not adequately
tackled the consequent public relations challenge and, by
some of their more “academically interesting” work, have
added to the “bad press”. For example, O’Connor (1991), in
arguing that statistical methods for quality and reliability
prediction and measurement are counter-productive and
should be discarded in favour of a return to traditional
engineering and quality values, stated

“They lead to over-emphasis on expensive, bureaucratic and

esoteric approaches to quality and reliability. Many successful
equipment designers and manufacturers generate highly
complex yet reliable products without recourse to these
methods.”

Similar points were made by some respondents in the recent

study by the Engineering Quality Forum on the Quality
Education of Engineers (Cullen et al, 1997). The real question
therefore is that, with all this bad press, does statistics and
statisticians, have a future in industry and business at all?

The gap between the potential of statistics to help quality

improvement and what is actually achieved is not a
specifically British or specifically Western phenomenon. It was
present also in the early days of the introduction of
statistically based quality improvement methods into Japan
and for much the same reasons (Ishikawa, 1985). There is
evidence also of a similar situation in the USA and Germany
(McMunigal et al, 1990; Bendell, 1994). The subsequent
success of statistically based quality improvement methods in
helping to transform the Japanese economy is evidence not
just that this problem is solvable but that in bringing the
messages and methods of statistics to the people in business
and industry they do need to be clarified, simplified,
communicated and “packaged”. The emphasis in Ishikawa’s
work of the simplification, “packaging”, mass education, team
basis and consequent mass use of statistical tools by all or
many employees (eg the “seven tools of quality control”)
reappears also in the work of other Japanese quality gurus
such as Taguchi and Shingo (Bendell, 1991). The emphasis is
on making statistical techniques understandable and usable
by the customer and not on blaming the customer for not
understand or not using them.

It can be argued that the need is not just to re-educate others:

the engineers, managers and other professionals who just do
not appreciate the importance of variation and the part that
statistics has to play. Even more importantly, the need is to
re-educate the statistical community. For statistics to have a
future, now is the time for statisticians to come out of their
closets, to cross the boundaries into the real work problems,
to avoid unnecessary complexity, to start their role earlier in
the project and to end it later, to become fully integrated, to
lose their “statistician” stigma, to become the facilitators of
large-scale simplistic routine application of statistical methods
by all workers (like Ishikawa’s seven tools of quality control).
There are few enough statisticians left in industry (eg
Greenfield, 1996) and the need and the opportunities are
strong; maybe never stronger. All around we see examples of
the lack of use, misuse and abuse of statistics.

The responsibility is not only with those in industry. The role of

academic statisticians, and the academic tradition of
statistics, is also in much need of attention. It is here that the
greatest elitism and barriers are created and carried on
through education to future generations. And it is here that
the greatest opportunity exists for a new ethos of statistical
service; of removing the jargon, complexity and elitist barriers
and of creating clarity, simplicity and focus.

To illustrate many of the points in this section, we shall now

discuss three key areas of statistical application in quality.
LIMITATIONS OF THE STUDY:

• The research will be conducted in a limited area.

• The internet information can be irrelevant.

• Time will be a major constraint.

Significance of the study :

IDEA CELLULAR (IDEA)

Aug 11, 2010

Live BSE Quotes
9:48:00 AM

Price Open (Rs) High (Rs) Low

(Rs) 70.70 72.00 (Rs)
71.50 70.45

% Volume Value (Rs) 52-

Change 182,846 13,073,489 Week
1.49 H/L
84.85
/
48.05
 Aug 11, 2010
Live NSE Quotes
9:49:57 AM

Price Open (Rs) High (Rs) Low

(Rs) 71.50 72.00 (Rs)
71.55 70.35

% Volume Value (Rs) 52-

Change 1,371,980 98,096,570 Week
1.27 H/L
84.80
/
48.80

Valuation

EPS (Rs)* P/E Ratio (x) Market Cap (Rs P/BV (x)
2.60 27.49 m) 1.78
235,966.45

*Trailing 12 months earnings, excluding extraordinary / exceptional items.

BSE Sensex | S&P CNX Nifty | Best Performing

Stocks & Funds | BUY/SELL?

PEER GROUP: QUOTE &

GRAPH

AGC NETWORKS
BHARTI AIRTEL
HFCL
IDEA CELLULAR
ITI LTD.
KRONE COMM.
MTNL
RELIANCE COMM
TATA COMM.
TATA TELESERV (MAH)
1. Total Activations/month

Reliance 30%
Vodaphone 15%

Idea 20%
Uninor 15%
Airtel 20%
2. Highest Selling Brand
Reliance 25%
Vodaphone 15%

Idea 40%
Uninor 10%
Airtel 10%
 3. Total Recharge (value/month) Rs
Reliance 25%
Vodaphone 20%

Idea 30%
Uninor 10%
Airtel 15%
4. Which is the most preferred Brand
Reliance 20%
Vodaphone 15%

Idea 30%
Uninor 10%
Airtel 25%
 5. Which operator has in shop branding

Vodaphone 15%

Idea 35%
Uninor 20%
Airtel 30%
6. Does Idea has Glow sing Board(GSB)

Yes 85%

No 15%
 7. Which other brand has GSB

Reliance 20%
Vodaphone 15%

Idea 30%
Uninor 10%
Airtel 25%
8. Does Idea have Non lit Board

Yes 75%

No 25%
 9. Which other operator has Non lit board

Reliance 25%
Vodaphone 10%

Idea 30%
Uninor 15%
Airtel 20%
 10. Does Idea have POP poster/dangler ect.

Reliance 12%
Vodaphone 20%

Idea 26%
Uninor 12%
Airtel 30%
FINDINGS

 55% of the people use only mobile, and 40% of respondents use both
the services & only 5% people use the telephone service. It shows the
popularity of cellular phone services.

 34% of respondents are using the idea services, which is the highest
percentage of users of cellular phone. Airtel takes 2nd place in Gwalior
with 28% of users. Then comes reliance and BSNL, and tata indicom
having least customers in the Bhopal.

 Prepaid service is most popular in the cellular services with 95% of

customers. The remained uses postpaid services.

 In current situation 73% of respondents are using lifetime plans, where

the rest are using general plan of the cellular companies.

 64% of respondents are satisfied with the call rates of the lifetime plans;
it is because telecom companies have slashed their call rates few months
ago. Still in this situation 36% of respondents did not satisfy with the
call rates which service they are using.
 In the lifetime plan of cellular companies most of the respondents are
using this service because of its validity period with 83% of answer.
Where 15% of people like this services because of its call rates.

 78% of customer satisfied with the lifetime plans of cellular companies,

and which are not satisfy with the service they are mostly BSNL and
TATA indicom users.

 Most of the people are using lifetime services because of money savings
with the percentage of 48. Where 29% of people like this service
because of the facilities provided by the operators. And 23% of people
are using this service because of incoming only.
 Questionnaire

Name of Trainee

Location :

1. Shop
Name……………………………………………………………………
……………

2. Mailing
Address…………………………………………………………………
…………….

3. Cantact
Person……………………………………………………………………
……………

4. Contact No.
……………………………………………………………………………
………..

5. Total
Activations/month………………………………………………………
…………...

6. Highest Selling Brand……………………………… How much(per

mth)…………………

7. Total Recharge (value/month)

Rs…………………………………………………………..
8. Which is the most preferred
Brand…………………………………………………………

9. Reason for most preferred

Brand…………………………………………………………..

10.Which operator has in Shop

Branding??......................................................

11.Does Idea has Glow sing Board(GSB)(Yes/No)

…………………………………………

12.Which other brand has

GSB…………………………………………………………………….

13.Does Idea have Non lit Board(Yes/No)

…………………………………………………….

14. Which other operator has Non lit

board………………………………………………..
15. Does Idea have POP (poster/dangler ect)
Yes/No?......................................
 BIBLIOGRAPHY

BOOKS:

• Philip Kotler, ‘marketing management’ prentice Hall of India Pvt. Ltd.

New Dehli.

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

• Saxena Rajan ‘marketing management’ Tata McGraw-hill publication Co.

Ltd. New Delhi.

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

• Business today magazine of February issue, 2008.

Web Resources:

www.trai.gov.in

http://www.tataindicom.com/t-aboutus-ttsl-organization.aspx
http://www.rcom.co.in/webapp/Communications/rcom/Aboutus
/aboutus_home.jsp

http://www.ideacellular.com/IDEA.portal?
_nfpb=true&_pageLabel=IDEA_Page_AboutIdea

http://www.bsnl.co.in/about.htm

http://www.bsnl.co.in/service/tariff_excel_pre.htm

http://210.212.144.243/utility/tariff.htm

http://www.trai.gov.in/trai/upload/PressReleases/15/pr16jan06.
pdf

www.airtel.in

http://www.rcom
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ommunications/
rcom/index.jsp