THE INDIAN INSTITUTE OF PLANNING AND MANAGEMENT, New Delhi

THESIS TOPIC Critically analyze the customer preference and satisfaction measurement in Indian Telecom Industry with reference to Vodafone SUBMITTED BY Shailesh Kumar Singh PGP/SS/2009-2011

ALUMNI REFERENCE ID:

DS/09/11-M-023

GUIDED BY
Rajesh Bahl Senior Manager (Operator Relation) ValueFirst Messaging Pvt. Ltd.

PREFACE
The customers are very important and play a crucial role in any process of marketing. Today, customers are the kings of the market because the customer loyalty and customer preference are built by the products and the services offered to the customers and they seek for the more benefits and moneys worth for the amount they spend. That is where the concept of customer preference and consumer behavior comes because the customers make the marketers to rethink about designing the products and services. They have to think about the market segmentation, market strategies, consumer behavior, consumers tastes, consumers lifestyle etc also. Many marketers are smart enough to understand consumers needs, wants and demands and perform beyond their expectations i.e. they delight them. It provides them growth, profitability and creativity.

ACKNOWLEDGEMENT
A mammoth thesis of this nature calls for intellectual nourishment, professional help, and encouragement from many quarters. I would like to express my gratitude to:
The pioneers in the field of marketing management who have shaped their understanding

through their rich and varied contributions.

Professors and seniors for providing the stimulus for making this thesis successful. A number of academics and practitioners for generously sharing their insight and

experience with me. It is my immense pleasure to work under the guidance of Rajesh Bahl (Sr Manger of ValueFirst Messaging Pvt. Ltd), and we heartily thank them for providing me the guidance whenever needed. I am also thankful to beloved The Dean and Vijay Boddu, who gave me guidance in each and every matter all the time. My heuristic approach towards the project was one of the major contributors in the outcomes that we arrived at. Id like to thank my institution, IIPM New Delhi, for providing me this great opportunity and attempting to inculcate the traits needed to succeed. I am also thankful to various industry experts and executives for sharing relevant information and valuable thoughts with me and helped me in writing my thesis.

SYNOPSIS

Name:Section:Batch:Phone Number:Email address:-

Shailesh Kr Singh SF-3 PGP/SS-2009-11 9899866563 Singh.shaileshkumar113@gmail.com

Thesis Topic:-

Critically analyze the customer preference and satisfaction

Measurement in Indian telecom industry with reference to Vodafone Specialization area Marketing/Finance

INTRODUCTION:
The Indian telecommunications industry is one of the fastest growing in the world. According to the Telecom Regulatory Authority of India (TRAI), the number of telephone subscriber base in the country reached 653.92 million as on May 31, 2010, an increase of 2.49 per cent from 638.05 million in April 2010. With this the overall tele-density (telephones per 100 people) has touched 55.38. The wireless subscriber base has increased to 617.53 million at the end of May 2010 from 601.22 million in April 2010, registering a growth of 2.71 per cent.

RESEARCH OBJECTIVE:

To understand the improvement and customer preferences in Vodafone. Analyze service offers function and durability by Vodafone. Analyzing different offers by the telecom companies to retain their customer To study the customer satisfaction and understand the current market scenario in Telecom Sector.

To find out the problems faced by the customers with Vodafone connection. Consumer awareness of latest technology and service support.

RESEARCH METHODOLOGY:

Secondary data Books, Internet,Articles,Magazines/Project reports, Newspaper Primary data- Interaction with customers by filling up of questionnaires. Interview with Sales or Marketing Personnel. Tool usedDescriptive research

Sampling method- Random sampling Sample size- 100 Target Audience- Network customer

SCOPE OF THE WORK:

In todays scenario, communication has become much faster day by day by telephones, internet, media etc. One of them is a growth of telecom sector. Today many organizations provide services for the telecom purpose. This study will help to understand customer preferences and their satisfaction by the services provided by different organizations in this sector. It will also help to these organizations to form various strategies and getting the results from marketing efforts.

Justification of choosing the topic:

The study aims to analysis that with the increase in competition in telecom services, higher levels of consumer satisfaction with affordable prices and improved quality of services achieving or not. Wireless telephony and the Internet are expected to be the preferred means of communication as convergence of telecommunications, broadcasting, and information technology progresses.

Details of external guide:

Mr. Rajesh Bahl- senior manager-Operator Relation (Value First) Email address: - rajesh.bahl@vfirst.com, Phone no: - +91 9818671302

Summer Training Details:

Company Position Period of work Project Details Job Profile

: BSNL : Management trainee : 22nd Dec 09-16 Feb10 (8 weeks) : comparative analysis of telecom industries. : Sales and marketing

EXECUTIVE SUMMARY
The development of the telecom sector has experienced a major process of transformation in terms of its growth, technological content, and market structure in the last decade through policy reforms introduced by the Government. The impetus of these changes is expected to continue, and at a much faster pace. The study aims to analysis that with the increase in competition in telecom services, higher levels of consumer satisfaction with affordable prices and improved quality of services achieving or not. Wireless telephony and the Internet are expected to be the preferred means of communication as convergence of telecommunications, broadcasting, and information technology progresses. The study also shows the supportive policy framework needs to be in place during this period of rapid growth and transformation. The Government has undertaken the implementation telecom policy with utmost earnestness, in letter and spirit to usher in competition in almost all the service sectors. The migration package to revenue sharing in place of a fixed license fee, has led to a virtual take off in growth of the cellular and basic service sectors. National and International data connectivity has been opened. Liberalization of telecom sector of the Indian economy aims at improving accessibility, availability, reliability and connectivity through private sector participation and to bring about much needed improvement in the Quality of Service. Through increased competition, the service providers are expected to become more sensitive and responsive to the customers needs and choices and endeavor to give him greater satisfaction. The Telecom Regulatory Authority of India (TRAI) has the mandate to safeguard the customers interests and to set the standards of quality of service. The rapid technological advances which have taken place in the telecom sector have brought about significant improvements in the quality of service provided to customers. With the digitization of exchanges, and up gradation of external network, the fault rate has come down.

INDEX
PRELIMINARIES
Letter of Consent.I Letter of Approval......II Preface. III AcknowledgementIV SynopsisVI Executive Summary...VIII List of Figures..XII List of Tables..XIII

LITERATURE REVIEW

Chapter 1: An Introduction to Indian Telecom Sector 1.1: History and reforms in Indian Telecom Sector1 1.2: Indian Telecom Policy......2 Chapter 2: GSM vs. CDMA 2.1: GSM and CDMA facts.8 Chapter 3: Growth Drivers 3.1: Industry growth drivers..13 3.2: Segmentation of Indian Telecom Market...14 3.3: Market factors.17 3.4: Success factors....18 Chapter 4: Telecom operators 4.1: Introduction....24 4.2: Mobile service providers....24 Chapter 5: Different operators segment 5.1: Introduction to various segments...47 5.2: Public vs. Private...58 5.3: Licensing issues in India....59 Chapter 6: Rural Market 6.1: Introduction60 6.2: Growth of telecom services in rural market...60 Chapter 7: Foreign Direct Investments in Indian Telecom 7.1: Introduction64 7.2: Effects of FDI in Indian Telecom..66 Chapter 8: 3G Spectrums

8.1: What is 3G?................................................................................68 8.2: What is Spectrum?......................................................................69 8.3: Difference between 1G, 2G and 3G....69 8.4: 3G issues for service providers and users...70 8.5: Suggestions for spectrum issues.70 8.6: 3G auction/allocation.71 Chapter 9: Value Added Services 9.1: Introduction73 9.2: Various Value added services73 9.4: Challenges..75 9.5: Future trends..75

FEASIBILITY STUDY
Chapter 10: Research Methodology 10.1: Research Objective...77 10.2: Samples77 10.3: Observations and Findings...78 Chapter 11: SWOT Analysis of Indian Telecom111 Chapter 12: Future of Indian Telecom...114 Chapter 13: Conclusion and Recommendations 13.1: Conclusion..117 13.2: Recommendations...119 Bibliography124 Abbreviations..126 Annexures: Article and Questionnaire. 129 Response Sheets..142

LIST OF FIGURES

LIST OF TABLES

Chapter 1: INTRODUCTION Industry Profile

1.1 History and Reforms in Indian Telecom Sector:Indias telecom sector has been doing exceptionally well in past decade. Its structural and institutional reforms have provided tremendous growth opportunity to this sector. India has nearly 200 million telephone lines making it the third largest network in the world after China and USA. With a growth rate of 45%, Indian telecom industry has the highest growth rate in the world. The first reforms in Indian telecommunications sector began in 1980s when the private sector was allowed in telecommunications equipment manufacturing. In 1985, Department of Telecommunications (DOT) was established. The telecommunications system in India is the 2nd largest in the world. The country is divided into several zones, called circles (roughly along state boundaries). Government and several private operators run local and long distance telephone services. It was thrown open to private operators in the 1990s. Competition has caused prices to drop and calls across India are one of the cheapest in the world. Teledensity which was 2% during 1999 has now reached 54% in 2010. Key Milestones 1851

First operational landlines were laid between Kolkata and Diamond Harbor.

1881

Telephone service introduced in India

1882

First telephone exchange was opened in Kolkata, Chennai and Mumbai

1883 1923 1947 1960 First Subscriber Trunk Dialing (STD) was commissioned between Kanpur and Lucknow 1975 Department of Telecommunication (DOT) was established, separating from the postal system 1985 1994

Merger telecommunication with postal system

Formation of Indian Radio Telegraph Company

Nationalization of all foreign telecommunication companies to form the Post, Telephone and Telegraph under Government's Ministry of Communications. Total number of telephone in the country was around 80000

Mobile service was commissioned in Delhi on non commercial basis

Government announced National Telecom Policy in 1994 Licence issued for providing mobile phone services in 4 metros. 2 operators were given license per circle for 10 years under a fixed license fee regime.

1995

Cellular service was commercially launched in India Mobile licenses issued for 19 more circles.

1997 1999

Telecom Regulatory Authority was created

The new telecom policy (NTP 1999) was introduced. The Government replaced the fixed annual license fee with revenue share regime Teledensity 2%

2000

The national long distance market (NLD) was opened up to the private sector with no ceiling on the number of players. BSNL was hived off to form a separate corporate entity Wireless Planning and Coordination wing of DoT was created to review and enforce the spectrum allocation policy.

2001

A fourth cellular operator from the private sector was allowed in each circle to launch mobile services

2002

A subscriber linked spectrum allotment procedure was introduced. USO fund established to improve the telecom services in the rural sector ILD was opened up to private sector without any ceiling on the number of players Bharti Airtel got listed in BSE & NSE VSNL was privatized

2003 2004 2005

Access deficit charges (ADC) was introduced to compensate BSNL for losses incurred in providing services in rural areas. The Calling Party Pays regime was introduced where by subscribers no longer had to pay for incoming calls. The Unified Access License (UASL) Regime was implemented allowing subscribers to offer fixed / mobile services using any technology. RCom rolled out CDMA services which resulted in a tariff war. Internet and GPRS were allowed through cellular service providers

Broadband policy 2004 was unveiled

The foreign direct investment limit in telecom was raised from 49% to 74% Motorola started manufacturing mobile phone in India Pure-play tower companies like GTL, Quippo and Essar entered the tower market. The trend of recharge coupons with denomination values ranging from Rs 10 to Rs 200 for low end prepaid users. Introduction of lifetime validity schemes on prepaid. Aircel was acquired by Maxis

2006

The Government launched Project Most' (Mobile Operators Shared Towers) to promote passive infrastructure sharing. Demerger of tower operations by RCom into Reliance Infratel BSNL and MTNL launched the 'One India Tariff' whereby the calls anywhere in the country were charged at a flat rate of Re 1. India became the 5th country in the world to join the 100 million mobile subscribers' club.

2007

Roaming rental was reduced to zero Dual technology was allowed enabling service providers to offer both GSM and CDMA under the same license subject to entry fee of 1651 cr (US $ 366 million) Vodafone acquired 67% stake in Hutchison Essar for US $10.9 billion Indus Towers was formed by Airtel, Vodafone and Idea. 570 applications received for telecom UASL license and spectrum allocation DoT delinked spectrum from the telecom license and introduced first come first served basis.

2008

DoT issued 121 letters of intent for UAS licenses. Government awarded license to 6 new players - Datacom, Loop Telecom, Shyam Sistema, STel, Unitech Wireless and Swan Telecom. Active infrastructure sharing permitted, whereby the operators are allowed access to common antenna, feeder cables, radio access network. Teledensity reached 26%

2009

Bharti Airtel crossed 100 million subscriber mark Mobile subscribers in India crossed 500 million mark

2010

Aircel sold its portfolio of 17500 towers to GTL 3G and BWA spectrum auctioned through a open and transparent auction process. Government earned Rs 67719 cr (US $ 15.05 billion) for 3G spectrum and Rs 38543 cr (US $ 8.6 billion) for BWA spectrum

Mobile subscriber numbers crossed 650 million 3G spectrum allocated to Vodafone, Tata teleservicess, Bharti Airtel, RCom, Idea, Aircel and STel.

Indian Telecom statistics

Telecom operators in India added 17 million subscribers during July 2010 taking the total of mobile subscribers in the country to 652.42 million registering a growth of 2.66%. However the total number of telephone subscribers (both mobile and landline) in India increased to 688.38 million. With this the overall tele-density in India touched 58.17% in July 2010. The wireline base declined from 36.18 million in June 2010 to 35.96 million in July 2010. State run telcos like BSNL and MTNL enjoy 84% of the wireline market share. The total broadband subscriber base in India increased by 3.39% to reach 9.77 million in July 2010. The subscriber base of various mobile operators as on 31st July 2010 is as follows. Operator Airtel RCom Vodafone Idea Aircel Tatatele BSNL MTNL 74.85 million 73.78 million Total base 139.2 million 113.3 million 111.4 million July 2010 addition 2.6 million 2.5 milllion 2.4 million 1.8 million 1.6 million 2.3 million 1.08 million 0.05 million

Source:-http://www.articlesbase.com/communication-articles/indian-telecom-industrykey-milestones- 3134671.html

1.2-Indian Telecom Policy:-

After 1991s liberalization in Governments policies, the telecom sector has allowed various private players to enter into the Indian market. Earlier, sector was operating under public sector giants like Bharat Sanchar Nigam Limited (BSNL), Mahanagar Telephone Nigam Limited (MTNL) and Videsh Sanchar Nigam Limited (VSNL) but after the National Telecom Policy (NTP) by Government in 1994 many private players entered in Indian telecommunication market. But this market is regulated by Telecommunication Regulatory Authority of India (TRAI). It acts as an independent regulator of the business of telecommunications in the country which was set up in 1997 by the government of India. Indian telecommunications today benefits from among the most enlightened regulation in the region, and arguably in the world. The sector, sometimes considered the poster-boy for economic reforms, has been among the chief beneficiaries of the post-1991 liberalization. Unlike electricity, for example, where reforms have been stalled, telecommunications has generally been seen as removed from mass concerns, and thus less subject to electoral calculations. Market oriented reforms have also been facilitated by lobbying from Indias booming technology sector, whose continued success of course depends on the quality of communications infrastructure.

(Source: TRAI Report 2007) Despite several hiccups along the way, the Telecom Regulatory Authority of India (TRAI), the independent regulator, has earned a reputation for transparency and competence. With the recent resolution of a major dispute between cellular and fixed operators, Indian telecommunications

already among the most competitive markets in the world appears set to continue growing rapidly. While telecom liberalization is usually associated with the post-1991 era, the seeds of reform were actually planted in the 1980s. At that time, Rajiv Gandhi proclaimed his intention of leading India into the 21st century, and carved the Department of Telecommunications (DOT) out of the Department of Posts and Telegraph. For a time he also even considered corporatizing the DOT, before succumbing to union pressure. In a compromise, Gandhi created two DOT-owned corporations: Mahanagar Telephone Nigam Limited (MTNL), to serve Delhi and Bombay, and Videsh Sanchar Nigam Limited (VSNL), to operate international telecom services. He also introduced private capital into the manufacturing of telecommunications equipment, which had previously been a DOT monopoly. These and other reforms were limited by the unstable coalition politics of the late 1980s. It was not until the early 1990s, when the political situation stabilized, and with the general momentum for economic reforms, that telecommunications liberalization really took off. In 1994, the government released its National Telecommunications Policy (NTP-94), which allowed private fixed operators to take part in the Indian market for the first time (cellular operators had been allowed into the four largest metropolitan centers in 1992). Under the governments new policy, India was divided into 20 circles roughly corresponding to state boundaries, each of which would contain two fixed operators (including the incumbent), and two mobile operators. As ground-breaking as NTP-94 was, its implementation was unfortunately marred by regulatory uncertainty and over-bidding. A number of operators were unable to live up to their profligate bids and, confronted with far less lucrative networks than they had supposed, pulled out of the country. As a result, competition in Indias telecom sector did not really become a reality until 1999. At that time the governments New Telecommunications Policy (NTP-99) switched from a fixed fee license to a revenue sharing regime of approximately 15%. This figure has subsequently been lowered (to 10%-12%), and is expected to be reduced even further over the coming years. Still, India continues to derive substantial revenue from license fees ($800 million in 2001-2002); leading some critics to suggest that the government has abrogated its responsibilities as a regulator to those as a seller. Another, perhaps even more significant, problem with Indias initial

an attempt to introduce competition was the lack of regulatory clarity. Private operators complained that the licensor the DOT was also the incumbent operator. The many stringent conditions attached to licenses were thus seen by many as the DOTs attempt to limit competition. It was in response to such concerns that the government in 1997 set up the Telecom Regulatory Authority of India (TRAI), the nations first independent telecom regulator. Over the years, TRAI has earned a growing reputation for independence, transparency and an increasing level of competence. Early on, however, the Amendment Act, that the regulatory body really came into its own. Coming just a year after NTP-99, the act marks something of a watershed moment in the history of India telecom liberalization. Today, there are many private players like Vodafone, Airtel, Tata, Reliance, Idea etc. There are basically two areas in which these players operate: Fixed and Cellular Services. In Fixed line, MTNL and BSNL have captured major part of the market. Whereas, Cellular Services, can be further divided into two parts: Global System for Mobile Communications (GSM) and Code Division Multiple Access (CDMA).

Chapter 2: GSM vs. CDMA

2.1- GSM and CDMA facts:-

GSM segment consists of players like Airtel, Vodafone, Idea, and BSNL. Whereas, CDMA segment consists of players like Reliance, Tata etc.

(Source: - TRAI annual report 2010) All India GSM Cellular Subscriber Base

Industry added record highest number of 122 Million GSM subscribers during 2009. India recorded the highest monthly GSM subscriber addition of over 13 Million.

As per Cellular Operator Association of India (COAI), India's GSM telecom service providers added 5.92 millions new subscribers in February, taking their total customer base up to 184.67 millions. In January, they had added 6.19 millions new users. At the end of February last year, the total GSM subscriber base stood at 115.29 million while the same was 178.41 million as at January 31, 2008. Customers in the Metro Circle rose by 38.3% from the year earlier to 29.49 million, while in the A Circle the user base grew by 64.7% from last year's level to 67.08 millions. Growth in the B Circle jumped by 63.6% to 67.19 million and the C Circle subscribers expanded by 71.54% to 20.9 millions. Company wise break-up shows that Bharti Airtel, leader in the GSM space, added 2.25 millions new customers last month while Vodafone Essar saw its subscriber base swell by 1.41 million new users. Idea Cellular added 918,871 new customers and Spice Communications added 141,377 new users. State-run BSNL added around 0.8mn new customers last month. At the end of February, Bharti Airtel held a market share of 32.31% with a total of 59.67 million customers, while Vodafone Essar had a market share of 23.04% at 42.55 million subscribers. BSNL accounted for 18.72% of the GSM market at 34.57 million customers and Idea held a market share of 12.39% at 22.87 millions. India presently follows a CPP model, whereby calling party pays. Incoming calls were made free since April 1, 2002 and that has substantially boosted the subscriber growth rate in India. However, making incoming calls free reduced operators ARPU Market Share of GSM Operators

The GSM industry continued to be on the track for growth and the GSM base as of March 2010

was nearly 422 million with the addition of nearly 10-12 million subscribers per month. The GSM industry in India today offers low tariffs, high Minutes of Usage (411) and low Average Revenue per User (Rs.144). The GSM service providers are also focusing on rural areas and are extensively rolling out services in rural and remote areas. By March 2010, private GSM operators were providing services to over 130 million subscribers in rural areas and this number is increasing by 3-4 million additions every month. With the vision to expand GSM services to more and more people of the country, the operators who obtained licenses in 2008 are also starting to provide GSM services. The Industry continued to invest aggressively in the sector and the overall investments by private GSM operators have resulted in 1,185 MSCs, 4,566 BSCs, 370,685 BTSs, and a backbone network of more than 590,078 kms spread across the country.

Operator-wise Market Share of CDMA Wireless

(Source: TRAI Report 2009-2010)

Statistic Share of Prepaid

GSM 94%

CDMA 0.7%

Incoming Minutes of Usage per subscriber per Month Outgoing Minutes of Usage per subscriber per Month Outgoing SMS per Subscriber per month ARPU

249

192

235

164

30

10

180

90

In the wireless segment subscriber base of GSM services reached the 478.68 million subscriber mark at the end of March 2010, as compared to 297.26 million as at the end of March 2009. It added around 181.42 million subscribers during the year, registering an annual growth of 61.03%. In CDMA Services, in terms of subscriber base and market share, M/s Reliance with 56.05 million subscriber base remains the largest CDMA operator followed by M/s Tata and M/s BSNL with subscriber base of 39.03 million, and 6.14 million respectively. DoT has told to review of call termination charges to TRAI to make them on cost-based which may fall tariff charges significantly. Termination charges are the ones paid by a telecom operator from whose network call originates to a service provider on which call terminates. Currently the charges for that are 0.30 which are very high. They were fixed in 2003. If the charges are reduced, the service providers would have to forego some portion of their revenues. On the other hand, high termination charges may smother the competition and may disturb the level playing field.

Chapter 3: GROWTH DRIVERS

3.1- Industry Growth Drivers: Fixed Line Segment.

 Capacity expansion of fixed line exchanges helped consumers avail quick connections. Quick connection availability boosted number of fixed line connections during 1985

1995. Wireless Segment. Vast geographic expanse of India acted as a catalyst to boost mobility. Low call costs since 2002 fueled the wireless segment.
Narrowing gap of call costs between fixed and wireless convinced customers to subscribe

to wireless connections. Nationwide roaming facilities on GSM.

SMS facility.

Internet + Subscription bundling. Reduced cost of handsets (affordability factor). Customs duties have been reduced from 10% to 5%.
In remote areas where providing fixed line connections were difficult, wireless did the

magic.
CDMA fixed wireless gave customers 3 in one advantage mobility, internet and easy

access.
Many telecom service providers provide Global Calling Card (GCC) to their customers.

These cards help them to make calls from the foreign countries and it saves up to 80-90% in international roaming.

3.2- Segmentation of the Indian Telecom Consumer Market:-

With the proliferation of mobile phone users, several micro segments have also emerged lately, each with their own specific needs. The Indian Mobile consumer market has been segmented as follows: Youth:Over the years, service providers have started giving greater attention to this segment, as it has emerged as one of the biggest users of mobile phones. For the youth, mobile phones are not just a necessity, but rather an indispensable accessory. This segment particularly values prepaid schemes with free SMS services. It is further differentiated into various micro-segments based on age and gender. For instance, youngsters in the age group of 19 to 23 years generally have a large circle of friends and more access to money. Companies thus focus on providing services like group talk and group SMS to these people. This segment is very dynamic as its needs keep changing very frequently, driven by the latest trends and fads. For instance, downloading new ring-tones is the latest fad among the youth today. This is a huge revenue source for service providers and so they need to keep up with the changing tastes of this segment. Young Professionals:People entering the workforce and thus moving out of the dependent bracket constitute this market segment. They generally prefer using post paid schemes with value added services like information about stock markets, news updates and so on. Small and Medium Enterprise:This segment mainly consists of people who are switching over from landlines to mobile phones, seeking a cost advantage. The focus here is on economy-packages rather than value added services. Family:Family as a segment consists of more number of dependents. These dependants are serviced by prepaid schemes. Geographically dispersed families tied by the same cellular service providers may get cost advantages in terms of lower pulse rates.

Special:The Special category includes a small but growing segment which requires largely customized services sought by celebrities, politicians, CEOs and the super-rich. Tailor made schemes for each

segment have been a great success so far. This customization, however, has reached such a stage that every service provider has numerous schemes being provided at the same time. Being short term schemes, they keep changing frequently and customers thus start switching from one service provider to another based on the attractiveness of the scheme. This has brought down customer loyalty and hence service providers are finding it difficult to retain existing customers. It is estimated that in the near future the plethora of schemes provided by the different service providers will stop being a differentiating factor. 3.3- Market Factors:There are basically two market factors which are considered while segmenting the market as well as deciding the strategic moves for the markets and competition. 1) Strategic Factors 2) Economic Factors 3.4- Success Factors:It is very important for any company or service provider to stay in the market for a long period otherwise it will be out of the market and suffer a lot. To taste the success, companies have to perform well continuously and make their customers happy all the time by proper CRM and other techniques. Apart from that, there are two types of factors for these companies: (1) shall have and (2) must have factors. 1) Shall Have Factors:
Social relationships: Humans are social beings. They interact constantly with each other

and social relationships are a vital part of life. The mobile phone is perfectly suited to satisfy the need of maintaining social relationships. Services that support social relationships are likely to be successful.

Power: One important aspect of social relations is status which is strongly related to

power. Two types of power can be distinguished: Power to access and power to execute. The first type of power refers to the possibility to intervene in other peoples life, as for

instance parents influencing the life of their children. But also the limitation of the power to access can be useful. One famous example is SMS (Short Message Service). They provide the opportunity to communicate without giving the receiver the chance to reply directly. This way unpleasant information can be communicated.
EQM (Easier, Quicker, More): Easier means that solutions that are simpler and/or more

convenient are accepted by customers. One good example for easier is the phonebook of cell phones (compared to typing in the complete number when you call someone).

Quicker refers to the opportunity to fulfill customer needs faster than traditional products. One of the reasons why e-mails are common nowadays is that they are faster than traditional letters. More is related to the fact that humans tend to maximize their benefits.
Entertainment: There are two types of entertainment: scheduled entertainment, such as

visiting a theatre and entertainment during niche times, for example when waiting for public transport. In such time slots a mobile phone can be the perfect entertainment or gaming console.
Security: Security is one of the most important needs of humans. Because of security

provided by service providers, the information of users is kept confidential. Apart from that, there cant be any manipulation done in case of post-paid bills and various services provided as user can have an idea especially in case of pre paid customers where regular balance can be checked.

2) Must Have Factors:

The 3 minute value: The average WAP application takes five minutes. In Japan the

popular i-mode applications last for less than one and a half minutes on average. The time a customer uses an application may vary from country to country. However, it is quite

evident, that a mobile application has to produce a clear, perceived value for the customer within a short period of time. As a rule of thumb the value should be delivered within 3 minutes.
Simplicity: The services provided to the customers should be simple. It should be easy to

understand and the customer should be able to use the services intuitionally like GPRS, caller tunes etc. Thus the usability has to meet the customers standards.
Additional benefit: For a successful service it is essential that the customer perceives a

clear additional value. There are several types of additional values. For example fun, cost saving, time saving or location based additional value
Customer friendly tariff structure: The willingness to pay for new technologies and new

applications is limited since the customer cannot clearly judge the additional benefit a new application yields. This is especially true for B2C markets where the customers tend to be more prices sensitive. For this reason a customer friendly price structure, preferably with a price model that eases diffusion of new application, is essential.

Chapter 4: TELECOM OPERATORS

4.1- Introduction:There are three types of players in telecom services: State owned companies (BSNL and MTNL)

 Private Indian owned companies (Reliance Infocomm, Tata Teleservices, and Aircel) Foreign invested companies (Vodafone, Bharti Tele-ventures, Idea Cellular, BPL Mobile) 4.2- Mobile Service Providers: VODAFONE:Vodafone Group Plc is the world's leading mobile telecommunications company, with a significant presence in Europe, the Middle East, Africa, Asia Pacific and the United States through the Company's subsidiary undertakings, joint ventures, associated undertakings and investments. The Company's ordinary shares are listed on the London Stock Exchange and the Company's American Depositary Shares ('ADSs') are listed on the NASDAQ Stock Market. The Company had a total market capitalization of approximately 71.2 billion at 12 November 2009. Vodafone Group Plc is a public limited company incorporated in England under registered number 1833679. Its registered office is Vodafone House, The Connection, Newbury, and Berkshire, RG14 2FN, England. Vodafone has some large minority stakes, which are not included in its consolidated turnover. In order to provide additional information on the overall scale and growth trends of its business, it publishes "proportionate turnover" figures, and these are included in the tables below. For example, if a business in which it owns a 45% stake has turnover of 10 billion that equals 4.5 billion of proportionate turnover for Vodafone. Proportionate turnover is not an official accounting measure, and Vodafone's proportionate turnover should be compared with other companies' statutory turnover. Initially, around 1995, the company services were branded Max Touch renamed to Orange in 2000. In December 2006, Hutchison Essar re-launched the "Hutch" brand nationwide, consolidating its services under a single identity. The company used to be named Hutchison Essar, reflecting the name of its previous owner, Hutchison. However, the brand was marketed as Hutch. After getting the necessary government approvals with regards to the acquisition of a majority by the Vodafone Group, the

company was rebranded as Vodafone Essar. The marketing brand was officially changed to Vodafone on 20 September 2007. On September 20, 2007 Hutch became Vodafone in one of the biggest brand transition exercises in recent times. Vodafone Essar is spending somewhere in the region of Rs. 250 crores on this high-profile transition being unveiled today. Along with the transition, cheap cell phones have been launched in the Indian market under the Vodafone brand. The company also plans to launch co-branded handsets sourced from global vendors as well. A popular daily quoted a Vodafone Essar director as saying that "the objective is to leverage Vodafone Group's global scale in bringing millions of low-cost handsets from across-the-world into India." Incidentally, China's ZTE, which is looking to set-up a manufacturing unit in the country, is expected to provide several Vodafone handsets in India. Earlier this year, Vodafone penned a global low-cost handset procurement deal with ZTE.

Vodafone Essar, usually referred to simply as VODAFONE, is a cellular operator in India that covers 23 telecom circles in India. It was formerly known as Hutchison Essar. It is based in Mumbai. Vodafone Essar is the Indian subsidiary of Vodafone Group 67% and Essar Group 33%. It is the second largest mobile phone operator in terms of revenue behind Bharti Airtel, and third largest in terms of customers. The company now has operations across the country with over 113.77 million customers.

On February 11, 2007, Vodafone agreed to acquire the controlling interest of 67% held by Li Ka Shing Holdings in Hutch-Essar for US$11.1 billion, pipping Reliance Communications, Hinduja Group, and Essar Group, which is the owner of the remaining 33%. The whole company was valued at USD 18.8 billion. The transaction closed on May 8, 2007. Despite the official name being Vodafone Essar, its products are simply branded Vodafone. It offers both prepaid and postpaid GSM cellular phone coverage throughout India with good presence in the metros.

Vodafone Essar provides 2.75G services based on 900 MHz and 1800 MHz digital GSM technology, offering voice and data services in 23 of the country's 23 licence areas. It is among the top three GSM mobile operators of India. Vodafone Essar will launch third-generation (3G) services in the country in the January-March quarter of 2011 and plans to spend up to $500 million within two years on its 3G networks.

(Source: - 2010 Vodafone annual report)

BSNL: Bharat Sanchar Nigam Ltd. formed in October, 2000, is World's 7th largest Telecommunications Company providing comprehensive range of telecom services in India: Wireline, CDMA mobile, GSM Mobile, Internet, Broadband, Carrier service, etc.

BSNL has installed Quality Telecom Network in the country and now focusing on improving it, expanding the network, introducing new telecom services with ICT applications in villages and wining customer's confidence. Today, it has about 46 million line basic telephone capacity, 8 million WLL capacity, 52 Million GSM Capacity, more than 38302 fixed exchanges, 46565 BTS, 3895 Node B ( 3G BTS), 287 Satellite Stations, 614755 Rkm of OFC Cable, 50430 Rkm of Microwave Network connecting 602 Districts, 7330 cities/towns and 5.6 Lakhs villages. BSNL is the only service provider, making focused efforts and planned initiatives to bridge the Rural-Urban Digital Divide ICT sector. In fact there is no telecom operator in the country to beat its reach with its wide network giving services in every nook & corner or the country. BSNL is numero uno operator of India in all services in its license area. The company offers vide ranging & most transparent tariff schemes designed to suite every customer. BSNL cellular service, CellOne, has 55,140,282 2G cellular customers and 88,493 3G customers as on 30.11.2009. In basic services, BSNL is miles ahead of its rivals, with 35.1 million Basic Phone subscribers i.e. 85 per cent share of the subscriber base.

BSNL has more than 2.5 million WLL subscribers and 2.5 million Internet Customers who access Internet through various modes viz. Dial-up, Leased Line, DIAS, and Account Less Internet (CLI). BSNL has been adjudged as the NUMBER ONE ISP in the country. BSNL has set up a world class multi-gigabit, multi-protocol convergent IP infrastructure that provides convergent services like voice, data and video through the same Backbone and Broadband Access Network. At present there are 0.6 million Data One broadband customers. The company has vast experience in Planning, Installation, network integration and Maintenance of Switching & Transmission Networks. Scaling new heights of success, the present turnover of BSNL is more than Rs.351820 million (US $ 8 billion) with net profit to the tune of Rs.99390 million (US $ 2.26 billion) for last financial year.

The infrastructure asset on telephone alone is worth about Rs.630000 million (US $ 14.37 billion). The turnover, nationwide coverage, reach, comprehensive range of telecom services and the desire to excel has made BSNL the No. 1 Telecom Company of India.

(Amount in Lakhs) Profit before tax Profit after tax Earnings per share Turnover (Source: BSNLs balance sheet 2009-10) BSNL is also operating in landline, WLL, mobile, internet (BSNL broadband) etc. It has been doing very well in landline and internet connections as it is a leader in both these segments. BSNL broadband gives following benefits: High speed Internet Access: This is the always-on Internet access service with speed ranging from 256 kbps to 8 Mbps. Bandwidth on Demand: This will facilitate customer to change bandwidth as per his / her requirement. For example a customer with256 kbps can change to 1 Mbps during the video Conferencing session. Multicasting: This is to provide video multicast services for application in distance education, telemedicine etc Dial VPN Service: This service allows remote users to access their private network securely over the NIB-II infrastructure. For example, Virgin Mobile and TTSL. Video and Audio Conferencing Content based Services: Like Video on Demand, Interactive Gaming, Live and time shifted TV. -219,748 -182,265 -3.65 351,820

The rural wireline subscriber base is decreasing. As on 31.3.2010, the rural wireline subscriber base stood at 9.93 million and service providers reports indicate that 26.87% of total wireline subscribers are in rural areas. The service provider wise wireline rural subscriber base & their market share is shown below:

 MTNL:MTNL was set up on 1st April 1986 by the Government of India to upgrade the quality of telecom services, expand the telecom network, and introduce new services and to raise revenue for telecom development needs of Indias key metros Delhi, the political capital, and Mumbai, the business capital. In the past 17 years, the company has taken rapid strides to emerge as Indias leading and one of Asias largest telecom operating companies. The company has also been in the forefront of technology induction by converting 100% of its telephone exchange network into the state-of-theart digital mode. MTNL is being the first company in both Metros to have been offered 3G license by GOVT. OF INDIA and we will get a head start in offering the services which is expected next year to bring high-speed Internet to palmtop. As we are the market leader in providing affordable services, the 3G services will also be affordable in a price-conscious market. The market and consumers enthusiasm indicates a major increase in our revenues through 3G services in coming years. Broadband and IPTV will also be a contributing a significant revenues in our kitty. Department of Telecom has asked the Telecom Regulatory Authority of India to review mobile call termination charges on priority basis. A revision can bring about a reduction in call tariffs for users. Given the

central aim of telecom policy to provide services at affordable rates, it may be beneficial that a review of the mobile termination charges based on present and projected cost and traffic is undertaken by TRAI on a priority in a time bound manner. Termination charges is one of the major components of tariff and is paid by an operator from whose network call originates, to a service provider on whose network the call is terminated. Currently, the charges have been fixed at Rs.0.30 a minute. The charges were fixed in 2003. While the cost of network and services have comes down by more than 50 per cent since then, termination charges have remained unaffected as they are independent of market flux. The cost-based termination charges would be less than Rs.0.10 a minute. If implemented, the existing operators would have to forego a substantial portion of their revenues, while new cellular operators would find it easy to establish themselves. The reduction in termination charges will lead to reduction in pay-outs of the operators thus making the tariffs more viable and sustainable in the competitive environment.

MARKET RISKS The telecommunications market in the cities of Delhi and Mumbai are among the most competitive markets. MTNL faces intense competition from the other mobile operators and the basic service operators. This has led to an increased pressure on margins due to reducing tariffs and also on the customer retention and acquisition. The Average revenue per user is also going down. With new operators coming in Delhi and Mumbai, such competitive pressures are likely to increase further, putting a further strain on the margins. Recently DOT has issued LOIs to a number of new players which will lead to increased competition to market share. MTNL is confirmed only in two cities i.e. Delhi and Mumbai, therefore MTNL is not able to expand its telecom services beyond its area of jurisdiction. POLICY AND REGULATORY RISKS The telecommunications sector in India is one of the highest taxed sectors. The high level of license fee is a big strain on the finances of the company. This is paid over and above all other taxes and duties which are levied on all other businesses. Regulatory policies cannot be foretold and may at time, be such as to affect the financials of the company.

MANPOWER RISKS There is a huge workforce and approximately 32% of revenue is spent on staff. In comparison of the staff costs of other operators, it is about 7% of the revenues. This is a major risk which the company faces, as it has little flexibility in the matter and may have to continue to carry the cost. It may in fact become even higher as wage negotiations are now due as per the earlier wage agreement which was for 10 years. Considering the tremendous growth of private sector and opportunities that have become available and availability of employment in telecom & IT sectors, retention of suitable manpower is a big challenge. There is 20% attrition rate among the young executives recruited for specialized jobs.

OUTSTANDING DUES Over the years, the amount owned to MTNL by its customers had been increasing and accumulated significantly. Realizations of dues from customers has become even more difficult in the increasingly competitive telecom market as the customers can close the connection and take services of other operators. Efforts are being made to reduce the outstanding and some success has been achieved in bringing down total outstanding in a multi operator environment, this risk remains. HUMAN RESOURCE DEVELOPMENT The Company attachs the highest priority to the quality of intellectual capital at its disposal and believes that knowledge and skill level of its employees are the key to achievements of its corporate mission. MTNL has a sound recruitment policy and comprehensive training system. During the past one year, your Company has laid greater emphasis on Human Resources Development. We have been devoting substantial resources on building a skilled workforce that has an innate capability to counter threats posed by ever changing business environment and to take advantages of opportunities presented to serve ever increasing customer base.

Services
Basic Wire line - Delhi - Mumbai WLL-M & F - Delhi - Mumbai GSM - MTNL - Delhi - Mumbai Broadband MTNL - Delhi - Mumbai

2004-05 FY Mar-05 5,999,181 3,114,641 2,884,540 261,500 150,000 111,500 1,250,000 625,000 625,000

2005-06 FY Mar-06 5,688,602 2,844,689 2,843,913 998,230 550,000 448,230 1,750,000 825,000 925,000

2006-07 FY Mar-07 5,653,642 2,809,729 2,843,913 1,098,230 550,000 548,230 2,350,000 1,025,000 1,325,000

2007-08 FY Mar-08 5,670,980 2,810,129 2,860,851 1,098,230 550,000 548,230 3,100,000 1,775,000 1,325,000

2008-09 FY Mar-09 5,670,980 2,810,129 2,860,851 1,098,230 550,000 548,230 4,100,000 1,775,000 2,325,000

2009-10 FY Mar-10 5,496,716 2,771,995 2,724,721 1,092,230 550,000 542,230 5,350,000 2,525,000 2,825,000

2010-11 Q1 Jun-10 5,491,556 2,771,995 2,719,561 1,092,230 550,000 542,230 5,850,000 3,025,000 2,825,000

2010-11 Q2 Sep-10 5,491,550 2,771,995 2,719,555 1,092,230 550,000 542,230 6,350,000 3,025,000 3,325,000

85,768 45,016 40,752

458,380 241,968 216,412

523,568 257,384 266,184

601,496 259,400 342,096

984,646 515,910 468,736

1,429,786 709,254 720,532

1,545,084 736,520 808,564

1,627,236 796,496 830,740

(Source: - MTNL annual report 2010-2011) An amount of Rs.3020.00 million is accounted for by MTNL towards wet lease for infrastructure and other services provided by MTNL in respect of Commonwealth Games and out of this,

Rs.2420.00 million is accounted for as income proportionately in the first half year (including Rs.606.70 million booked in the first quarter) of FY 2010-11. Balance of Rs.600.00 million will be accounted for in the third quarter. Subject to ultimate installation of the project, the capital expenditure is accounted under WIP and final accounting will be done on completion of the project.

AIRTEL:Bharti Airtel Limited usually referred to simply as "Airtel", is an

Indian telecommunications company that operates in 19 countries across South Asia, Africa and the Channel Islands. It operates a GSM network in all countries, providing 2G or 3G services depending upon the country of operation. Airtel is the fifth largest telecom operator in the world with over 207.8 million subscribers across 19 countries at the end of 2010. It is the largest cellular service provider in India, with over 152.5 million subscribers at the end of 2010. Airtel is the 3rd largest in-country mobile operator by subscriber base, behind China Mobile and China Unicom. Airtel also offers fixed line services and broadband services. It offers its telecom services under the Airtel brand and is headed by Sunil Bharti Mittal. Bharti Airtel is the first Indian telecom service provider to achieve this Cisco Gold Certification. To earn Gold Certification, Bharti Airtel had to meet rigorous standards for networking competency, service, support and customer satisfaction set forth by Cisco. The company also provides land-line telephone services and broadband Internet access (DSL) in over 96 cities in India. It also acts as a carrier for national and international long distance communication services. The company has a submarine cable landing station at Chennai, which connects the submarine cable connecting Chennai and Singapore. It is

known for being the first mobile phone company in the world to outsource everything except marketing and sales and finance. Its network (base stations, microwave links, etc.) is maintained by Ericsson, Nokia Siemens Network and Hawaii., business support by IBM and transmission towers by another company (Bharti Infratel Ltd. in India). Ericsson agreed for the first time, to be paid by the minute for installation and maintenance of their equipment rather than being paid up front. This enabled the company to provide pan-India phone call rates of Rs. 1/minute (U$0.02/minute). Call rates have come down much further. During the last financial year [200910], Bharti has roped in a strategic partner Alcatel-Lucent to manage the network infrastructure for the Telemedia Business. The company is structured into four strategic business units - Mobile, Telemedia, Enterprise and Digital TV. The Telemedia business provides broadband, IPTV and telephone services in 89 Indian cities. The Digital TV business provides Direct-to-Home TV services across India. The Enterprise business provides end-to-end telecom solutions to corporate customers and national and international long distance services to telcos. Bharti Airtel received several awards and recognitions during the year. Some of them were:

Rated as the Strongest Brand in the Economic Times- Brand Finance Brand Power Rating. Airtel was the only corporate brand to be awarded the AAA rating. It improved its rating from the previous AA+. Airtel was also rated as the 7th Most Valuable Brand in India with a brand value of USD 2.5 bn and Bharti Airtel was the only telecom player to feature amongst the top 10 most valuable brands.

Featured in Forbes Asias "Fabulous 50" companies of Asia Pacific. The coveted list includes Asia Pacific's biggest listed companies with revenues or market capitalization of at least USD 3 bn and picked by Forbess editors on the basis of the best aggregate scores for long-term profitability, sales and earnings growth as well as projected earnings and Stock-price gains.

Bagged top honors in the Voice & Data 100 survey, winning five of the Voice & Data Telecom Awards 2009. Bharti Airtel was named the Top Telecom Services Provider of the Year 2009. Manoj Kohli, CEO & Joint Managing Director was named the Voice & Data Telecom Person of the Year 2009. The awards also named Bharti Airtel as the Top VSAT Player 2009, Top NLD Player 2009 and Top Cellular Services Provider 2009.

Selected amongst the top 10 winners of the IDC Enterprise Innovation IT Awards 2009 across APAC region for the BSS Transformation Project which integrates 15 major applications and automates over 200 processes. These awards are presented to companies that demonstrate best practices, use IT in innovative ways to deliver competitive advantages to the organization and enable growth.

Bharti Airtel was declared as the Service Provider of the Year and Wireless Service

Provider of the Year by Frost & Sullivan Asia Pacific ICT Awards for its outstanding performance in the South Asian region

Financial result and results of operations: Financial Highlights of Consolidated Statement of Operations of the Company.

Financial Highlights of Standalone Statement of Operations of the Company (Legal entity)

Mobile services segment is the dominant contributor to the Companys revenues and customer base. The Company expanded its operations to 5,091 census towns and 438,933 non census towns and villages in India during the year, covering 84.2% of the total population. In India, the customer base increased to 127.62 mn customers as on March 31, 2010 from 93.92 mn customers a year ago. In Sri Lanka, Companys subscriber base crossed one million customers during the year. Operating across 16 administrative districts of Sri Lanka, the Company launched 3.5G services in major towns. Companys distribution strength has gone up with a widened network of 23 distributors and over 15,000 retailers across the country. The revenues from Telemedia services for the financial year were Rs 34,194 mn, representing a growth of 2% over the revenues in the previous financial year.

Revenues from mobile services for the financial year were Rs 325,717 mn, representing a growth of 7% over the revenues in the previous financial year. Mobile services contributed 78% to the consolidated revenues. The growth in revenues was despite of the growing competition with the entry of new players, coupled with significant reduction in tariffs during financial year 2008-09.

Under Telemedia services, Bharti Airtel provides broadband, data and fixed line telephone services across 89 cities of India. The focus in recent years has been on customized telecom/IT solutions for small and medium sized businesses. The Company strategically continues to focus on cities with high revenue potential. Total customer base for Telemedia services reached 3.07 mn, recording an increase of 12% over 2.72 mn customers at the end of financial year 2008-09. Of this, 1.30 mn customers were subscribing to broadband services. Percentage of customers subscribing to broadband services has increased from 39.3% as at end of financial year 2008-09 to 42.3% as at end of financial year 2009-10. The Company is committed to provide superior internet browsing experience to all its customers through high speed plans. The Company has introduced 4 mbps speed plans and has upgraded all its existing customers to a minimum of 512 Kbps speed at no extra cost.

RELIANCE COMMUNICATION:Reliance Communications (NSE: RCOM, BSE: 532712), formerly known as Reliance Infocomm, along with Reliance Telecom and Flag Telecom, is part of Reliance Communications Ventures (RCoVL). Reliance Communications Limited, founded by Dhirubhai H Ambani (19322002), is the flagship company of the Reliance Anil Dhirubhai Ambani Group. The Reliance Anil Dhirubhai Ambani Group currently has a net worth in excess of 64,000 crore (US$13.6 billion), cash flows of 13,000 crore ($2.8 billion), and a net profit of 8,400 crore ($1.8 billion). The Equity Shares of RCOM are listed on Bombay Stock Exchange Limited and National Stock Exchange Limited. The Global Depository Receipts and Foreign Currency Convertible Bonds are listed on Luxembourg Stock Exchange and Singapore Stock Exchange respectively. It ranks among the top 5 telecommunications companies in the world by number of customers in a single country. Reliance Communications corporate clientele includes 2,100 Indian and multinational corporations, and over 800 global, regional and domestic carriers. The company has established a pan-India, next-generation, integrated (wireless and wireline), convergent (voice, data and video) digital network that is capable of supporting services spanning the entire communications value chain, covering over 24,000 towns and 600,000 villages. Reliance Communications owns and operates the next-generation IP-enabled connectivity

infrastructure, comprising over 190,000 kilometers of fiber optic cable systems in India, USA, Europe, Middle East and the Asia Pacific region. In July 2007, the company announced it was buying US-based managed Ethernet and application delivery services company Yipes Enterprise Services for a cash amount of 1200 crore (the equivalent of US$300 million). The deal was announced of the overseas acquisition, the Reliance group has amalgamated the United States-based Flag Telecom for $210 million (roughly 950 crore). RTL operates in Madhya Pradesh, West Bengal, Himachal Pradesh, Orissa, Bihar, Assam, Kolkata and Northeast, offering GSM services. RGL owns the worlds largest private undersea cable system, spanning 65,000 km seamlessly integrated with Reliance Communications. Over 110,000 km of domestic optic fiber provides a robust Global Service Delivery Platform, connecting 40 key business markets in India, the Middle East, Asia, Europe, and the U.S. RITLs business is to build, own and operate telecommunication towers, optic fiber cable assets and related assets at designated sites, and to provide these passive telecommunication infrastructure assets on a shared basis to wireless service providers and other communications service providers under long-term contracts.

During the year under review, Company has earned income of Rs.12,511.72 crore against Rs.13,694.66 crore in the previous year. The Company earned Profit after tax of Rs. 478.93 crore compared to Rs. 4,802.67 crore in the previous year. The demand for telecom infrastructure in India is driven both by the robust growth in the mobile industry as a whole and by the growth in usage in the new semi-urban and rural markets. The industry landscape has changed with the Government issuing over 120 licenses to new operators and the number of players going up from 5-6 per circle to 9-10 in most circles. These new operators have been allotted spectrum in about 18 to 20 circles and some of them have now got joint venture tie-ups with large global players thereby getting the necessary impetus to roll out their services. The roll-out of mobile services by these new players further increases the demand for telecom infrastructure. The telecom infrastructure industry will witness a further significant upside from the 3G /BWA auctions and the network rollout plans of the successful bidders. The Industry now has about 300,000 towers, with ample opportunities for existing infrastructure providers to offer tower tenancies to new domestic and multinational operators. Rural opportunity: The overall tele-density in India has reached around 52.74 per cent. While the urban tele-density has crossed the 100 per cent mark, the rural tele-density is pegged at 22.17 per cent and steadily growing. Indeed, it is the latter which is driving telecom growth in the second phase. Our nationwide network combined with the national distribution framework gives us a unique advantage in tapping this large opportunity. Passive Infrastructure: The expected technology rollouts this year were driven by 2G, 3G and BWA needs of the new and existing mobile operators as well as of the ISP operators. This translates into the current demand of nearly 500,000 slots slated to go up to 700,000 in the next couple of years- for passive infrastructure as well as other services. Our next generation infrastructure is favorably positioned to capture this opportunity. At RCOM, we approach the market in the telecom infrastructure business with a unified and comprehensive approach covering the entire value chain of telecom infrastructure services, including active and passive infrastructure.

Global: With RCOMs ownership of Reliance WiMax World (eWave), a pioneer in the global WiMax space, Reliance Globalcom has the capability to launch 4G services in over 50 countries. The acquisition of Vanco Group enables the company to provide managed services to over 230 countries and territories across the globe.

TATA COMMUNICATION:-

Tata Communications is a leading global provider of a new world of communications. With a leadership position in emerging markets, Tata Communications leverages its advanced solutions capabilities and domain expertise across its global and pan-India network to deliver managed solutions to multi-national enterprises, service providers and Indian consumers. The Tata Global Network includes one of the most advanced and largest submarine cable networks, a Tier-1 IP network, with connectivity to more than 200 countries across 400 PoPs, and nearly 1 million square feet of data center and colocation space worldwide. Tata Communications' depth and breadth of reach in emerging markets includes leadership in Indian enterprise data services, leadership in global international voice, and strategic investments in operators in South Africa (Neotel), Sri Lanka (Tata Communications Lanka Limited), Nepal (United Telecom Limited). During the year under review, your Company earned total revenue of Rs. 39.84 billion (previous year Rs. 34.6 billion) an increase of 14.97 percent. Profit before tax for the year was Rs. 7.13 billion, (previous year Rs.4.50 billion) an increase of 58.56 percent. Profit after tax was Rs. 5.16 billion (previous year Rs. 3.04 billion) an increase of 69.46 percent. On a consolidated basis, for 2008-09, the Companys total income was Rs. 102.23 billion (previous year 85.38 billion), an

increase of 19.74 percent EBIDTA was Rs. 13.50 billion (previous year 8.80 billion), an increase of 53.43 percent. Consolidated profit before tax after exceptional items was Rs. 4.23 billion (previous year 1.49 billion), an increase of 183.88 percent whereas profit before tax before exceptional items was Rs. 1.56 billion (previous year 1.60 billion), a decrease of 2.40 percent. The audited annual accounts for the year 2008-09 have been drawn up taking into account the court order approving the amalgamation of VSNL Broadband Limited, a 100% subsidiary in the nature of merger into the Company with effect from 1 March 2007. Over the last few years, your Company has built on its strategy to provide a range of communications services to customers in the wholesale, enterprise and retail segments. It has invested considerably in network infrastructure and service delivery capability in and out of India. Last year, the Company launched its new brand identity Tata Communications integrating the various other brands under which it had been going to market previously and this has been very well received. The Companys focused strategy has enabled it to be one of the leading players worldwide in its major business segments, with operations in more than 50 countries. Tata Communications remains one of the top three providers of international wholesale voice services and wholesale Voice over Internet Protocol (VoIP) services and one of the largest owners and providers of submarine cable capacity in the world. The Company is a global Tier-1 Internet During the year under review, the business of the Company grew with enterprises demanding more global connectivity and services, increasing broadband penetration worldwide and rich media, interactive digital content becoming more and more popular globally. The global demand for bandwidth and Internet connectivity continues to surge, giving Tata Communications the opportunity to leverage its Tata Global Network (TGN) of optical fiber undersea cables and Internet Protocol (IP) network. Your Company expects to commission additional submarine cable systems in the year 2009-10 connecting emerging markets in Asia, the Middle East and Africa to each other and onwards to Europe to meet the demands of consumer broadband, enterprise and wholesale customers over the next five to eight years. During the year, your Company issued secured redeemable non-convertible debentures aggregating to Rs. 12.50 billion on a private placement basis. Out of this amount, debentures worth Rs.10.00 billion were subscribed to by one investor on a five year term. The balance debentures worth Rs.

2.5 billion were subscribed to by 16 investors comprising of different insurance companies and banks with terms ranging from five and half years to ten years. All these debentures have been rated AAA by CARE, a renowned rating agency. IDBI Trusteeship Services Limited has been appointed as the trustees for these debentures. The Trust Deeds for the above debenture issues will be available for inspection by any member, at the registered office of the Company during normal working hours 21 days before the date of the 23 rd Annual General Meeting (AGM).

IDEA CELLULAR Idea Cellular, usually referred to as !dea, is a wireless telephony company operating in all the 22 telecom circles in India based inMumbai. It is the 3rd largest GSM company in India behind Airtel and Vodafone and ahead of state run player BSNL. Inception and growth In 2000, Tata Cellular was a company providing mobile services in AP. When Birla-AT&T brought Maharashtra and Gujarat to the table, the merger of these two entities was a reality. Thus Birla-Tata-AT&T, popularly known as Batata, was born and was later branded as !dea. In 2004, Idea (the company had by then been rechristened) bought over the Escorts groups Escotel gaining Haryana, Uttar Pradesh (West) and Kerala and licences for three more UP (East), Rajasthan and Himachal Pradesh. By the end of that year, four million Indians were on the companys network. In 2005, AT&T sold its investment in Idea, and the year after Tatas also bid good bye to pursue an independent telecom business. And Idea was left only with one promoter, the AV Birla group. When the companys stock listed on the bourses in March 2007, its subscriber base was 13 million with presence in 11 circles. In less than three years, the subscriber numbers have more than quadrupled. The public issue was oversubscribed 50 times and raised Rs 2,450 crore.In June 2008, Idea Cellular bought out BK Modis stake in Spice Communications for Rs 2,700 crore adding Punjab and Karnataka circles. Modis joint venture partner, Telekom Malaysia, invested Rs 7,000 crore for a 14.99% stake in Idea. Just around then, Ideas subsidiary, Aditya Birla Telecom sold a 20% stake to US-based Providence Equity Partners for over Rs 2,000 crore. IDEA Cellular has been recognized as the 'Most Customer Responsive Company' in the Telecom sector, at the prestigious Avaya GlobalConnect Customer Responsiveness Awards 2010.

Currently,Aditya Birla Group holds 49.1% of the total shares of the company. The market positioning of Idea reflects the strength of its brand considering the fact that Idea added 14 out of its total 22 service areas in the past four years. Today it is a pan-India player with commercial operations in all 22 service areas. Its subscriber base has grown multifold from 7.37 million in March 2006 to 63.82 million in March 2010. Idea has been a leader in the introduction of value-added services, and there are many firsts to its credit, including a voice portal 'Say Idea', Idea TV, voice chat and instant messenger. Tariff plans have been customer-friendly, catering to the unique needs of different customer segments, for instance the 'Women's Card' caters to the special needs of women on the move, and 'Youth Card' covers the emerging youth segment. Idea has won numerous awards and is the only Indian GSM operator to win the prestigious GSM Association Award consecutively in the best mobile technology category for the Best Billing and Customer Care Solution both in 2006 and in 2007, even in the face of international competition.

Telecom network equipment-maker Ericsson has partnered with Aditya Birla Group firm Idea Cellular for the latters online applications store.Under the contract, Ericsson would be responsible for complete end-to-end service management of the online applications store, including technical operations, content eco-system partner management and testing and usability, besides business operations. The highlights of Ideas remarkable journey:

2010 :: Ultratech's 'Concern for Health' project awarded the Asian Corporate Social Responsibility Award by the Asian Institute of Management Centre for Corporate Social Responsibility. :: Hindalco ranked ninth across industries on Forbes Asia's Fab 50 companies list of Asia's 50 most valued companies. :: Mrs. Rajashree Birla, Chairperson, Aditya Birla Centre for Community Initiatives and Rural Development receives 'Hello Hall of Fame' award for 'Exemplary Philanthropist of the year' from Worldwide Media Goup's 'Hello' celebrity journal. :: Indian Rayon, Veraval (a division of Aditya Birla Nuvo) is awarded The Rajiv Gandhi Environment Award for Clean Technologies by The Ministry of Environment and Forests, Government of India. :: Mr. Kumar Mangalam Birla, Chairman of the Group, presented the All India Management Association (AIMA) Managing India Award 2010 for ' Business Leader of the Year'. AIMA confers these awards to persons who are exemplary leaders who have made a fundamental difference.

:: Mrs. Rajashree Birla, Chairperson, Aditya Birla Centre for Community Initiatives and Rural Development, awarded the Global Golden Peacock Life Time Achievement Award for Community Development for the year 2010 for "Outstanding Contribution Towards Community Development and Social Welfare". :: Hindalco and Birla White declared winners in the Golden Peacock Awards for Corporate Social Responsibility 2010 by an eminent international jury, headed by Justice P.M. Bhagwati, the erstwhile Chief Justice of India. :: The Aditya Birla Centre for Community Initiatives and Rural Development team up with Columbia University's research centre, the Columbia Global Centers' Earth Institute in Mumbai, to become its principal partner. The Earth Institute's goal is to help achieve sustainable development primarily by expanding people's understanding of the earth as one integrated system. :: Hindalco wins Amity International Business Schools, Amity Corporate Excellence Award for Corporate Social Responsibility TRAI data reveals that the overall wireless industry revenues grew 3.3% qoq in 4Q after remaining flat in the previous 3 quarters. At the end of FY 2010 [March-10], Bharti Airtel still leads the Revenue Market share in Wireless segment with a Pan India share of 32% down from 32.8% a year ago and a a peak of 33.9% in June-09. This is how Wireless Operators rank w.r.t Revenue Market Share at the end of March-2010. Bharti Airtel 32% Vodafone 20.8% [Consistent] Idea Cellular 12.7% [Moderate Growth, but commendable] Reliance Communications -11.7% [ Losing to competition ] BSNL 9.3% [ Loser] Tata Tele [ Gaining on the back of DoCoMos innovative strategies Aircel 4% The following Chart shows how Wireless Operators Revenue Market Share varied in the Past 1 Year.

Particulars Total Revenue Operating Expenses Profit / (Loss) before Depreciation and Tax Depreciation Profit / (Loss) before Tax Taxes Profit/ (Loss) after Tax Balance brought forward from previous year Balance carried forward

2009-10 368,281 367,665 616 1,055 (439) (215) (224) (1,860) (2,085)

2008-09 239,173 235,281 3,891 841 3,050 2,939 111 (1,972) (1,860)

AIRCEL The Aircel Group, formed in 1994, offers affordable and outstanding mobile services to a vast subscriber base in India. Aircel has a vision of delighting its customers by giving them the respect they deserve. Their goal is to provide our customers with exemplary service and persistently look for new ways to surpass their expectations. Aircel commenced operations in 1999. In their first decade of operations, they concentrated on building our foundations in the southern part of the country, and soon emerged as the regional market leaders. They worked hard and achieved that success by remaining focused on growth opportunities. Soon after their company began with its expansion in 2005 and has now set its sight on becoming a pan India operator. Their project pipeline is robust, allowing for sustainable long-term growth. In addition to their leadership position in Tamil Nadu, Aircel met with extraordinary success in the Eastern frontier circles. They pride themselves on customer satisfaction and managed to emerge as the market leaders in Assam and North Eastern states within 18 months of operations. During this period, their company gained a strong foothold in 10 circles, to provide better access to our customers. Today, Aircel operates in all 23 telecommunication circles and the company is ready to embark on a dynamic expansion plan in the near future. Aircel recognizes the tremendous growth in its customer base. They have also got an authorization from the Department of Telecommunications for ILD and NLD telephony services and are now on track to realize their dream of becoming a nationwide player by the year 2010.

Aircel offers its customers, services and products that are easy to understand and use. All offerings are stimulating and at the same time extremely unique as Aircel continues to reinvent itself constantly to deliver the best and most up-to-date services. The brand instils a felling of pride, confidence and reliance among all stakeholders by anticipating their desires and fulfilling the same efficiently. With their foundations deeply set on our brand vales of simplicity, creativity, trust and excitement, they will continue to deliver superior services to their customers and will do their best to live up to their high expectations

Aircel is a mobile phone service provider in India. It offers both prepaid and postpaid GSM cellular phone coverage throughout India. Aircel is a joint venture between Maxis Communications of Malaysia and Apollo Hospital Enterprise Ltd of India. UTSB has a 74% stake in Aircel and the remaining 26% is with Apollo Hospitals. It is Indias fifth largest GSM mobile service provider with a subscriber base of over 46.51 million, as of September 30, 2010. It has a market share of 9.65% among the GSM operators in the country. As on date, Aircel is present in all 23 telecom circles (including Andhra Pradesh, Assam, Bihar & Jharkhand, Chennai, Delhi & NCR, Gujarat, Haryana, Himachal Pradesh, Jammu & Kashmir, Karnataka, Kerala, Kolkata, Madhya Pradesh, Mumbai, North East, Orissa, Punjab, Rajasthan, Rest of Maharashtra & Goa, Rest of Tamil Nadu, Rest of West Bengal, Uttar Pradesh East, Uttar Pradesh West) as per the company plans to become a pan-India operator by 2010. Aircel is undisputed market leader in Tamil Nadu, Chennai, Assam and North-East Circles, especially in TN state it is undisputed market leader since its launch. Additionally, Aircel has also obtained permission from Department of Telecommunications (DoT) to provide International Long Distance (ILD) and National Long Distance (NLD) telephony services. It also has the largest service in Tamil Nadu.

Social Presence
Aircel placed an actual dinghy lifeboat to a downtown billboard. A rope with a sign reading, In case of emergency, cut rope, held up the branded raft. July 15, 2009 the monsoon arrived with flooded streets and so did Aircel customer service. The dinghy was cut down and pedestrians were safely transported. What Aircel calls Corporate Social Responsibility A Solution. The company was able to generate positive publicity and show consumers that they care.

Beautification of Anna Flyover has been taken up Aircel for a period of three years, the contract has been awarded by TNRIDC and executed by Chennai based outdoor advertising agency Abra Media Networks. This project boasts of first of its kind lighting solution for the entire stretch of the bridge and many other landscapes to enhance the look of the whole bridge. As far as the utility is concerned, they are building a dedicated toilet for the police guarding the Anna Flyover and the US Embassy. Once this flyover is beautified, Aircel plans to maintain it for 3 years. Aircel tied up with Tamil Nadu Public Works Department for beautification and maintaining of Gandhi Mandpam,Guindy in opposite of Anna University

Awards & Recognition

Aircel has won many awards for its services. Aircel was honored at the World Brand Congress 2009 with three awards, Brand Leadership in Telecom, Marketing Campaign & Marketing Professional of the Year. Aircel was honored by CMAI INFOCOM National Telecom Award 2009 for, Excellence in Marketing of New Telecom Service. Aircel had been selected as the best regional operator in 2008 byTele.net. Aircel was rated as the top mid-size utility company in Business Worlds List of Best Mid-Size Companies in 2007. Aircel got the highest rating for overall customer satisfaction and network quality in 2006 by Voice and Data. Aircel is famous for innovative Pocket Internet cards for Free GPRS service for 1day/3days/7days/30days. Aircel become first to introduce Online service to subscribe and manage Dialer tunes. It is first in country to introduce SMS bank/Phone Book/Reminder/Talking SMS.

BPL Mobile Loop Mobile (Formerly BPL Mobile) is a mobile phone service provider in India. It offers both prepaid and postpaid GSM cellular phone coverage in Assam,Kolkata, North East, Mumbai, Madhya pradesh, Haryana, Orissa, Punjab, Rajasthan. BPL Mobile Communications, the countrys oldest mobile telecom service provider, has changed its name to Loop Mobile, following the expiry of its brand-use agreement with the TPG Nambiar-owned BPL Group.

Loop Mobile will also have the latest NGIP (Next Generation Internet Protocol) and EDGE (Enhanced Data rates for GSM Evolution) technology. The operator is hoping to leverage these technologies to introduce innovative VAS, as well as micro-segmented tariffs for subscribers.

Having started its services in 1995, Loop Mobile (erstwhile BPL Mobile) currently operates in Mumbai, with over 3 million happy and satisfied subscribers. Loop Mobile, represents growth with continuity. While we constantly work towards giving our subscribers a better network, innovative products and a superior mobile telephony experience, our subscribers can be assured of the same focus and commitment in providing the best network coverage, billing accuracy, and an unmatched personalized customer service. Loop Mobile has consistently met and exceeded TRAI benchmarks. Loop Mobile has had several firsts to its credit in the value-added services (VAS) space which are technologically state-of-art and yet customer friendly. It has been the first operator in the country to launch value additions like Reply-All, Roaming on Prepaid, Intelligent Network, General Packet Radio Service (GPRS), Multimedia Messaging Service(MMS), Missed Call Alert, Caller Ring Tune, Mobile Tracker, Doctor-on-Call, 1 paise per sec prepaid plan, Karaoke Messaging among others. It revolutionized the market further by launching epaid a new line of service by combining the benefits of prepaid and postpaid services. Loop Mobile will continue to ensure that your network in Mumbai is truly the best and endeavour to exceed your expectations.

Chapter 5: DIFFERENT OPERATORS SEGMENT Introduction to various segments:The telecom sector has shown robust growth during the past few years. It has also undergone a substantial change in terms of mobile versus fixed phones and public versus private participation.

(Source: TRAI Report april-june 2010)

1)Fixed Line Overview:

A monopoly sector controlled by Government until 1996 Subscriber base 37.06 million (Dec 2009) Sector growth slowed since mobile tariffs fell Only 2.55 million subscribers were added in one year (Mar 2008-Mar 2009)

Public Players and the Private Players are putting in their resources and efforts to improve the telecommunication technology so as to give the maximum to their customers. The share of private sector in total telephone connections is now 82.33%.

Tele-density can be described as telephones per hundred populations. Subscription in Urban Areas grew from 420.47 million in Mar-10 to 452.59 million at the end of June-10, taking the urban Teledensity from 119.73 to 128.20. Rural subscription increased from 200.81 million to 219.09 million, and the Rural Tele-density increased from 24.29 to 26.43. The overall Tele-density in India has reached 56.83 as on 30th June 2010.

(Source: TRAI Report april-june 2010) In India, fixed line service is firstly run by BSNL/MTNL and after there are Several other private players too, such as Reliance Infocomm, Tata Teleservices and Airtel .The competition has forced the fixed line services to becomemore efficient. The fixed line network quality has improved and connections are now usually available on demand, even in high density urban areas.

2)Wireless Overview:
527.62 million GSM, 107.88 million CDMA subscribers (June 2010) Second largest wireless network in the world. The dominance of wireless segment in access services is steadily growing.

The private service providers adopted wireless technology since it was easy to roll out wireless telecom services. Wireless phones have increased as they are preferred because of their convenience and affordability.

Wireless Subscription: GSM vs. CDMA

(Source: TRAI Report april-june 2010) GSM subscription continues to grow at a faster rate. At the end of Jun-10, GSM subscribers constituted 83% of the wireless market.

Composition of Access subscription Wireline & Wireless

(Source: TRAI Report april-june 2010) The dominance of wireless segment in access services is steadily growing.

3)Broadband Overview:
Broadband is mainly used for the purpose of internet connections. It is necessary to increase the broadband connectivity for the knowledge-based society to grow quickly and for reaping the consequent economic benefits. Several policies have been announced and implemented to promote broadband in the country. Number of Broadband subscribers increased from 8.77 million at the end of Mar-10 to 9.47 million at the end of Jun-10, registering a quarterly growth of 7.97% and Y-O-Y growth of 43.09%. The growth in the number of Broadband subscribers during the

quarter as also on Y-O-Y basis is mare of less the similar to the growth in over all telephone subscribers base.

Trends in Internet/Broadband subscription

(Source: TRAI Report april-june 2010) Broadband connectivity has been provided in 4044 cities, 5431 block headquarters, 613 district headquarters covering about 1,06,559 villages. Broadband access can be provided using various technologies: Cable: The network architecture deployed by cable companies to deliver broadband access connections is based on a network configuration of fiber-optic and coaxial cable, also known as hybrid fiber-coax (HFC). Data over Cable Service

Interface Specification (DOCSIS) is the key protocols for the broadband data communication over cable. ISDN: Integrated Services Digital Network is one of the oldest broadband access technologies using circuit switching. There are two main ISDN variants, Basic Rate ISDN (BRI), and Primary Rate ISDN (PRI). BRI service, delivered over a single twisted pair , provides two B channels and one 16 Kbps D channel. PR I service consists of 23 B channels in North America plus a single D channel running at 64 Kbps, yielding a total bit rate of 1.544 Mbps. In Europe and other parts of the world, PRI provide s 30 B channels and one 64 Kbps D channel. This gives a total interface rate of 2.048 Mbps. XDSL: Digital Subscriber Line Technologies Digital Subscriber Lines (DSL). DSL carries voice, video, and data at multi-megabit speeds over standard telephone wires. DSL services can achieve much higher bit rates than traditional analog modems. Depending on the exact type of DSL service being used, bit rates from about 1.5 Mbps to 51 Mbps can be achieved. The family of DSL services is collectively referred to as xDSL, where x refers to the different types of DSL technologies ADSL, HDSL, SDSL, and VDSL Direct Broadcast Satellite (DBS): provides consumers with a range of high-speed Internet access services. A DBS system comprises of a mini dish that connects your in-home network to satellites located about 35,000 KM above the surface of the earth. These satellites have the ability to deliver multimedia data at speeds in excess of 45 Mbps. This speed can only be achieved when downloading content from the Internet to your in-home network. To upload or send information to the Internet, you need to use a slow telephone connection.

Direct to Home: DTH is another technology that could be used for providing broadband services. it can be utilized as the downlink path for providing broadband connections. Uplink (connectivity to the ISP equipment/node) shall have to be through independent connections, may be, through dial

up/GPRS/EDGE, but the cost of the uplink is the main issue to determine success and popularity of this option. Fiber Optics: The fiber optics technology can provide unlimited bandwidth and the national long distance network has major deployment of this technology. This technology has also replaced the copper network in the intra-city backbone network. The fiber-based models are capable of providing a huge amount of bandwidth in the last mile, as well as, provide a true IP and converged network that can deliver high quality voice, data, and video. Fiber to the Curb (FTTC) and Fiber to the Home (FTTH) networks make use of fiber cable into the last mile. Such a network is quite suitable for providing high speed broadband services. Some operators have implemented overlay optical fiber networks in big towns for providing large bandwidths to industrial and big commercial organizations. However, their initial deployment cost is very high, mainly due to the high cost of laying the Cable.

Wireless Technology: Wireless network is another option to provide wider broadband access solutions. Initially, wireless networks were considered a solution for providing telecom facilities to harsh landscapes and lightly populated areas where it was difficult to provide conventional wire-line networks, as the cost of wireless networks were comparatively higher. Technological developments in the wireless facility during the last one decade have completely changed the telecom scenario. Mobile services have taken over the fixed line network on account of reduction in the cost of the equipment, ease of installation, operation and maintenance, flexibility for service providers, and convenience to end users. Wherever the penetration of copper loops is not widely spread, the laying of new copper cables and optical fiber cables is an expensive option due to high cost of right-of-way and high operational cost. Therefore, wireless-based access is an ideal solution for widespread last mile coverage through a combination of

different technologies like WiMax, Wi-Fi, etc. These technologies have the added advantage of interoperability and economy of scale due to international standardization. However, for the deployment of any wireless technology, suitable and sufficient spectrum availability and its efficient utilization is a must. Wireless fidelity (Wi-Fi): is a term used for a certain type of wireless local area networks. Wireless LANs are most commonly used in the last mile to provide coverage for few hundred meters as diffusers of a broadband connection. This can be used in the office environment for providing connectivity to portable devices such as laptops, and commercial hotspot solutions for wireless connectivity for the Internet.

WiMax: Wireless Metropolitan Access Protocol (IEEE 802.16) provides a communications path between a subscriber site and a core network such as the public telephone network and the Internet. This wireless broadband access standard provides the missing link for the "last mile" connection in metropolitan area networks where DSL, Cable and other broadband access methods are not available or too expensive.

Public vs. Private:The liberalization efforts of the Government are evident in the growing share of the private sector. The private sector is now playing an important role in the expansion of telecom sector. The share of private sector in total telephone connections is now 82.33% as per the latest statistics available for December 2009 as against a meager 5% in 1999.

(Source: DoT report 2009-10) Government has issued new guidelines and new single license for internet services in the year 2007 instead of four licenses required earlier.

Licensing issues in India:Different regulatory tariffs and business models are to be relooked. Different service providers are in different licensing regime, having different license fees, performance obligation guarantee, and annual rental and spectrum charges. Mismatch in the rules and regulation governing cable operators, broadcasting agencies and telecom service providers. Difference in areas like quality of service, Tariff and subscribers centric codes. Popularizing of Voice over IP Networks services in managed environment are creating various licensing issues: 1. Numbering scheme related issues

Interconnection between ISPs and traditional telecom service providers for IP telephony. 3. Security
2.

Chapter 6: RURAL MARKET

Introduction:
Access to telecom services is the key to development and growth and that access in rural market is one of the most challenging aspects of the growth. Information and Communication Technologies (ICTs) provide new and exciting opportunities to those who have access to them. However, existing economic imbalances and social inequalities will be deepened if access is unequally distributed. Unequal access to communications, leading to a huge digital divide between the rich and the poor, the urban and the rural populace only, increases the existing divide. That is why rural market is very much important in todays scenario. There are many opportunities available for development. Low cost

wireless solutions are now available for rural areas at affordable prices. There is wide gap between urban and rural teledensity. For economic and social development of rural areas, rapid increase in rural teledensity is of utmost importance. With the introduction of wireless phones in rural areas, there is increasing trend in rural teledensity also. The Government is taking various measures under USOF for expansion of mobile network in remote rural areas. As the urban areas has got saturated, private service providers are also finding out further opportunities in rural areas. All these factors have led to increasing trend in rural teledensity of late.

(Source: DoT report 2009-10)

Growth of Telecom Services in Rural market:Inadequate access in rural India- Over 70% of the population lives has

caused further marginalization of the marginalized. Therefore, it is vital that an enabling environment through policy and regulatory measures is created for the transformation of the existing digital divide into digital opportunity.

Wire line Market share Rural & Urban

(Source: TRAI Report april-june 2010) Rural subscription grew at the rate of 9.8% in QE Jun-10 as against 16.0% in QE Mar-10 and urban subscription grew at the rate of 8.2% as against 9.1% in the previous quarter. The share of rural wireless subscription increased to 32.99% in total wireless subscription.

Wireless Market Share Rural & Urban

(Source: TRAI Report april-june 2010)

While the urban subscribers have been growing significantly, similar growth has not been on the rural front. However, with introduction of mobile services in rural areas, the rural subscribers recently are increasing.

The rural Telephone connections have gone up from 3.6 million in 1999 to 12.3 million in March 2004 and further to 123.51 million in March 2009. Their share in the total telephones has constantly increased from around 14% in 2005 to 31% as on December 31, 2009. The rural subscribers have grown to 174.58 million as on December 31, 2009. The mobile connections have contributed substantially to total rural telephone connections

 During 2009-10, the growth rate of rural telephons was 41.35% as against the growth of 26.59% of urban telephones. The private sector has contributed to the growth of rural telephones as it provided more than 81% of rural telephones as on December 31, 2009. Potential for further Growth Indian telecom market has still large untapped potential to grow further. With large population yet to have access to telecommunication and teledensity still being 48% and rural teledensity 21%, potential for the sector remains large especially in urban areas where wireline and internet services are yet to make significant inroads. Even the mobile services space, which has seen exponential growth in urban areas, has not reached the vast majority in rural areas. The focus of the stakeholders, is now shifting to these untapped rural areas which will provide engine for the second phase of the growth in Indian Telecom. Rural teledensity target is upgraded to 40% by 2014. The measures taken under USOF to increase rural connectivity As on December 31, 2009, about 5.66 lakh (94.79%) villages covered by VPTs. 40694 villages out of 40705 villages having more than 2000 population provided rural community phones. Under Bharat Nirman Programme, of 62302 remaining villages, 61186 covered upto December 2009. In 1685 cost positive short distance areas (SDCA), about 70.49 lakh RDEL installed. Infrastructure sharing scheme to set up 7436 towers spread over 500 district of 27 states of the country implemented; 6956 towers set up as on December 31,2009.

Chapter 7: Foreign Direct Investments in Indian Telecom

Introduction:FDI plays an important role in telecom sector as well as an economy as a whole. Earlier, there were very few public players like BSNL, MTNL and VSNL in this sector but as the time progressed and competition increased, the private players like Airtel, Reliance, Tata, Aircel,Vodafone and Idea came into play which changed whole scenario of telecom sector. FDIs are important because they not only bring capital and technology into the market but they provide employment opportunities and effective productivity also. The liberalization in financial sector has beneficial results as that in telecom sector. Liberalization with allowing entry to the private firms has resulted in unprecedented growth in telecom sector. Allowing greater participation of foreign investor has helped in growth of the sector. Today, telecom is the third major sector attracting FDI inflows after services and computer software sector. At present 74% to 100% FDI is permitted for various telecom services. This investment has helped telecom sector to grow. The total FDI equity inflows in telecom sector have been US$ 2223 million during April-November 2009-10 as shown in graph below:-

(Source: DoT report 2009-10)

Effects of FDI in Indian Telecom: Telecom service at subsidized prices. FDI inflows will allow multiple benefits such as technology transfer, market access and organizational skills. In India where 70% of population still resides in rural areas, there is a need of infrastructure in telecom, which FDI can provide. Foreign currency flowing in the country. Harmonious relationship with country from which foreign investment is being made. There will be increase in competition with local players, which will benefit consumers. It will have a multiplier effect.

 Telecommunication facility at reasonable price, affordable to many. More technological inflow, will improve voice & data quality. Free flow of capital is good for Indian consumers. There are restrictions related to remote access, transfer of network information outside India and international transit routing of Indian traffic. It has been decided to enhance the FDI in telecom services in areas like basic telecom, cellular unified access services, intranet, long distance vast, public mobile, radio service etc.

Chapter 8: 3G SPECTRUMS
What is 3G?
3G is the third generation of wireless technologies. It comes with enhancements over previous wireless technologies, like highspeed transmission, advanced multimedia access and global roaming. 3G is mostly used with mobile phones and handsets as a means to connect the phone to the Internet or other IP networks in order to make voice and video calls, to download and upload data and to surf the net.There are 2G (2nd Generation) and 1G

(1st Generation) mobile handsets are available also in the market. 3G is notable for its ability to support faster and larger quantities of data, which enables additional service offerings in the form of games, music and video using voice, video and data (together known as "triple play"). Japan was the first country to introduce 3G on a large commercial scale. There are about 60 3G networks across 25 countries. 3G services are supposed to provide high-speed data rates at a minimum of 144 Kilobits per second in all use scenarios going up to 2 Megabits per second in low mobility and indoor environments. In addition, it has higher capacity and improved spectrum efficiency.

3G has the following enhancements over 2.5G and previous networks: Several times higher data speed; Enhanced audio and video streaming; Video-conferencing support; Web and WAP browsing at higher speeds; IPTV (TV through the Internet) support.

What is Spectrum?
Radio spectrum means a range of radio frequencies. The bandwidth of a radio signal is defined as being the difference between the upper and lower frequencies of the signal. For example, in the case of a voice signal having a minimum frequency of 200 hertz (Hz) and a maximum frequency of 3,000 Hz, the bandwidth is 2,800 Hz (3 KHz). The amount of bandwidth needed for 3G services could be as much as 15-20 MHz, whereas for 2G services a bandwidth of 30-200 KHz is used. Hence, for 3G huge bandwidth is required.

Difference between 1G, 2G and 3G:-

In 1G, Narrow band analogue wireless network is used, with this we can have the voice calls and can send text messages. These services are provided with circuit switching. In case of 2G Narrow Band Wireless Digital Network is used. It brings more clarity to the conversation and both these circuit-switching model. Both the 1G and 2G deals with voice calls and has to utilize the maximum bandwidth as well as a limited till sending messages .The latest technologies such as GPRS, is not available in these generations. But the greatest disadvantage as concerned to 1G is that with this we could contact with in the premises of that particular nation, where as in case of 2G the roaming facility a semi global facility is available. In 3G Wide Brand Wireless Network is used with which the clarity increases and gives the perfection as like that of a real conversation. The data are sent through the technology called Packet Switching .Voice calls are interpreted through Circuit Switching. 3G helps to simultaneously\ transfer both voice data (a telephone call) and non-voice data (such as downloading information, exchanging e-mail, and instant messaging.) The highlight of 3G is video telephony.

3G issues for service providers and users:o o o o o o High spectrum licensing fees for the 3G services Huge capital required to build infrastructure for 3G services. Health impact of electromagnetic waves. Prices are very high for 3G mobile services. Difficulty in switching from 2G technology to 3G technology Takes time to catch up as the service is new.

Presently spectrum allocation in India is linked with the issue of license. Licensees are entitled for frequency bands as per the provisions in the

license and guidelines for spectrum allocation.

Suggestions for spectrum issues:o No discrimination on the basis of technology used. o Equal opportunity for growth of all technologies. o Review of earlier reservations based on experience of frequency used. o Adequate and appropriate spectrum. o Proper balance between the securities needs and needs for commercial deployment. o Need for appropriate measure of efficiency and additional requirements of spectrum (only subscriber base is not the appropriate criteria). o Frequency allocation in bands in which equipment and handsets are readily available. o Availability from multiple vendors and multiple regions to avoid dependence on a single vendor or single country. o No allocation with the hope that in future some vendor may develop the equipment /infrastructure/multimode handsets. o International practices are followed.

3G Auction/Allocation:In 3G auction, local players as well as international players can take part also. Earlier it was decided that international players cant take part in that auction but now rules have been changed by TRAI. It is also decided ifinternational players will be successful in buying these spectrums then they will be allocated new licenses. For the bidding of the spectrum, companies have to pay minimum Rs. 2260 crores as a reserve price in which Metro cities and Circle-A cities have to pay Rs. 160 crores, Circle-B cities have to pay Rs. 80 crores and Circle-C cities have to pay Rs. 30 crores.

Now, TRAI has given a green signal to number portability and 3G spectrum auction. From this auction, government is expected to earn Rs. 30000 40000 crores. Foreign companies who want to bid, have to pay Rs. 1651 crores as a bid amount and have to get license for that. Base price for 3G is set as Rs. 2020 crores and for Wi-Max; it is Rs. 505 crores all over the world. As per TRAIs guidelines, in case of number portability, central agency has to shift the service provider from one to another within 48 hours of customers application. 3G services enhance the speed of internet, fast downloading and video calling.

Chapter 9: VALUE ADDED SERVICES

9.1:- Introduction:Value Added Service (VAS) is that service which is not part of the basic voice offer and is availed off separately by the end user. It is provided by telecom service providers. These services are used as a tool for differentiation and allow the mobile operators to develop another stream of revenue. 9.2:- Various Value added services:Here is a list of some Value Added Services provided by the telecom operators to the end users.

News- e.g. Business, sports, politics etc. Finance- e.g. Share market, foreign exchange etc. Entertainment- e.g. Games, jokes, films etc. Travel- e.g. Railway, airlines etc. Download- e.g. Caller tunes, wallpapers etc. Astrology- e.g. Horoscope Contest- e.g. Reality shows MMS- e.g. Picture messages, video clips etc. E-mail- e.g. SMS, e-mail etc. Music- e.g. Ring tones Cricket- e.g. Score, video clips etc. GPRS- e.g. Internet, chat etc. Call Alert- e.g. Missed call alerts when mobile is switched off or busy Health- e.g. Health tips, beauty tips etc. M-Commerce- e.g. mobile transactions like mobile banking

Others- e.g. movies, music etc.

As per COAI, in the year 2009-10, the income from VAS out of total income of service providers was 10%. Out of that, 57% was from SMS, 19% was from other VAS, 7% from ring tones, 6% from caller line identification, 6% from content downloads and 5% from GPRS. Normally, service providers make money of around 10-14% as VAS from total income. Value-added services are supplied either in-house by the mobile network operator themselves or by a third-party Value Added Service Provider (VASP), also known as a Content Provider (CP). VASPs typically connect to the operator using protocols like Short Message Peer-to-Peer Protocol (SMPP), connecting either directly to the Short Message Service Centre (SMSC) or, increasingly, to a messaging gateway that allows the operator to control and charge of the content better. There are many national and international investors are ready to invest in this segment of telecom market. 9.3:- Challenges: Lack of content localization Shortage of spectrum Slow adoption of GPRS mobiles (Only 6.1 millions GPRS users compared to 200 million overall subscribers) 9.4:- Future trends: Location Based Services Mobile Music update will increase with better bandwidth Migration to 3G will result in increased ARPU Local content is on the rise - regional/rural Interactive Voice Response (IVR) seen as a major opportunity. Mobile commerce does not look too promising (India is still a cash and cheque country) IVR will see large scale adoption, especially in rural areas. Mobile E-Mail will primarily be driven by enterprises Stocks on mobile will see an uptake.

Chapter 10: RESEARCH METHODOLOGY

10.1:- Research Objectives: To understand the improvement and customer preferences in Telecom Sector. To study the service providers and their service quality in the Telecom Sector. To study the customer satisfaction and understand the current market scenario in Telecom Sector. 10.2:- Samples:Sample size: 100 Sample frame: New Delhi. Sampling Method: Simple random sampling Constraints: Time, number of respondents Sampling error: Non-response- 16 Response- 84 Survey: Questionnaire

10.3:- Observations and Findings:1. Age Group: 10-20 20-40 Above 40 15 47 38

Ag Group e
50 40 30 20 10 0 10 to 20 20 to 40 40 and above

2. Gender: Male Female

Gender
32% 68%
Male Fem ale

3. Whose service(s) are you rendering now?

3% 7% 15% 36% 5% 4% BSNL Airtel Vodafone Reliance Tata Idea 30% Aircel

Through the above analysis, we can easily find out that in Delhi, majority of the people prefer Airtel connection. Airtel is a clear winner followed by Vodafone with 36% and 30% respectively. In Delhi region, there is a huge competition among players as per the conducted survey. It clearly shows the tough competition between Tata, Reliance and Aircel.Airtel is leading because of Airtels different schemes which have helped it to gain the more market share which is found out from the survey. 4. Which technology do you prefer?

4.78% 26.44% GSM 70.33% CDMA Both

As per the data, it can be analyzed that in spite of tough competitions between GSM and CDMA service providers, the GSM has earned a huge market share with 71%. There are only 4% people who are willing to use both the technologies. Only 26 % people prefer CDMA which is very less compared to the level of competition and GSMs market share.

5. How long have you been using this connection of your service provider? From the below analysis, it can be found that in the Delhi region, 30% of the total people have kept their connection for more than 3 years period. Whereas, only 7% of the total people prefer to keep the existing connection for 3-6 months. The graph also reveals that more the duration is, more people prefer to keep the existing connection.

D uration
35 30 25 20 15 10 5 0

11 Lessthan 3 m onth

20 7 10 1 to 2 years

22

30

3 to 6 m onth 6 to 12 m onth

2 to 3 years

Above 3 years

6. Rate your satisfaction level of your service provider.

Customers satisfaction plays a crucial role for the service providers. In the Delhi region, 34.40% people are satisfied with their service. Though, there are about 10% people who are not happy with their connections. But still in Delhi region 30.78% of customers have rated very good and 25.32% of customers have rated good for satisfaction level of their service provider.

7. What kind of expectations do you have from your service provider?

As per the research, people of Delhi region are more inclined towards network of their service providers followed by prices offered by service providers. Here, the price not only includes amount of the pre-paid or post-paid connection but it also includes different schemes, tariff plans etc. As per the data, almost 40.20% of the total population in the Delhi prefer network as a priority than the other features. They are mainly looking for the moneys worth so price is a second highest factor for them.
.

8. Are you aware of role of telecom services in providing broadband without using cable TV network? DELHI

As per the findings and from the above chart, it can be found out that in Delhi region 74.70% people are aware of the broadband services without using cable TV network. 25.30% people are unaware of this facility. 9. How much do you spend per month on your mobile connection?

Spending pattern is also another criterion which is crucial for any telecom service providers. Customers spending habits ultimately help in deciding their loyalty towards the product. For example, if a customer frequently spends money on the same product then it shows that he prefers to buy that product than other products which ultimately leads to his loyalty towards that brand. In Delhi region, maximum spending is between Rs. 501- Rs.1000 ranges, done by 39% of the total Post paid connection users out of surveyed people. Whereas, the lowest spending is in the range of above Rs. 1500 by 10% people. Whereas, in case of Pre-paid connections, highest spending is done up to Rs. 500 which is done by 65% of the total surveyed people and the lowest is in the range of more than Rs. 1500 which is done only by 4% people. Here, it can be also seen the usage difference in the range of Rs. 501- Rs. 1000.

10. How do you find the behavior of customer care executives of your service provider?

Acceptance or rejection of any product is largely depended on the services provided by the customer care which is also known as after sales service or Customer Relationship Management (CRM). If a company provides better services to the customer by solving their queries, it can be successful to retain them. Similarly, in case of the telecom service providers play a major role to retain customers by solving their problems.

As per the survey, it was found that in Delhi region, around 74% of the surveyed people find the executives are professional and prompt in their approach and only 3.90% customers feel that they are lazy and slow in their approach and 1.20% customers are not happy with the services which means customer care executives are not responding to them properly. 11. What do you think about the competition in the market?

There is a huge competition in the market in todays scenario. Many companies try to gain as many customers as they can by providing them different schemes and try to retain the existing customers with the same. So competition is an important factor and plays an important role to earn more market share. As per the survey in the Delhi region, it was found from this question that there are only 2% customers who do not have any choice to choose their service providers and change them if they are not satisfied with their services and facilities. But 15.61% customers said that they have some choice and 75% said that they have enough choice for the same. But 4.79% customers were in dilemma and 3% were not aware of the competition.

12. Given a choice with same number, which service provider will you select? As the below chart suggests and as per the findings, it can be seen that in the Delhi region, in majority cases customers prefer to have Airtel having 36.25%% preference opinion, followed by Vodafone and Idea having preferred by 28.06% and 20.34% customers respectively. Only 1.67% people prefer to have BSNL and 3% in case of Tata. Reliance is preferred by 6% customers.

13. What is your purchase intent for news alerts on mobile phone?

Customers usage is not only dependent on how much he spends on talking on phone but also on various value added services he uses. Maximum usage for news alerts on mobile of Delhi region is for business news with 55.88% Second preference in case of news alerts is an entertainment with 18.10% followed by general news with 16.15%, Sports and Astrological predictions are very less preferred by the customers of Delhi region, especially astrological news are the lowest preferences in both the cases.

14:- Rate the following attributes of your service provider. 1) Customer care:
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 20% 5% 7% 3% Airtel 23% 9% 4% 2% Vodafone 22% 9% 11% Idea 18% 11% BSNL 20% 10% TATA 6% 7% Reliance 65% 62% 26% 39% 30% 32% 29% 32% 17% 19% 29% 29% Very Good Good Average Poor Very Poor 15% 21% 12% 26% 21%

9% Aircel

As per the survey conducted and its findings, it was concluded that Airtel is leader in maintaining a good relations with its customers and it solves customers problems efficiently and effectively. It has got the highest preference by the customers with 65%, followed by Vodafone with62%. The lowest preference is of Aircel. Its customer care is not as good as the other players in the market, as per the findings. It is preferred by only 12% customers.

2) Per call charges:

Per call charges- ISD

Aircel

6% 11%

20% 32% 36% 30%

25%

38% 49% 51% 54% 25% 27% 36% 43% 60% 80% 100% 120% VeryPoor Poor Average Good VeryGood

Vodafone 2% 6% 11% BSNL 1% 7% 5% Airtel 2% 9% 5% Idea 9% 19% 20%

20% 32% 35% 40%

Reliance 4% 8% Tata 1% 2% 0% 19%

20%

As per the findings, it was concluded that in Delhi region, Airtels ISD charges are very good compared to the other operators. 54% people think that it has very good ISD charges, followed by BSNL and Vodafone having 51% and 49% preference respectively. The poorest ISD call charges are of Tata which is voted by 12% people, followed by Idea with 9% voting.

Per call charges-STD

Aircel Tata Idea

19% 15% 7%

14% 13%

24% 34% 26%

21% 23% 28%

22% 15% 22% 37% Verypoor Poor Average Good Verygood

17% 13%

BSNL 5% 14% Vodafone Reliance Airtel 6% 10% 13% 12% 0%

31% 23% 29% 18% 40% 24% 60% 26%

32% 15% 15% 20%

29% 17% 31% 80% 100% 120%

As the above graph shows, it can be said that STD call charges are very good in case of BSNL. 37% people prefer that, followed by Airtel which is preferred by 31% people. In case of very poor category, Aircel is having the poorest STD call rates with 19% customers preference, whereas, in poor category, Idea is poor with 17% customers preference. In average category, Tata with 34% preference.

Per call charges-Local

Aircel Reliance Tata

13%

17% 13%

21% 27% 21% 30% 26%

20%

29% 40%

7% 13% 10%

20% 18%

27% 39% 22% 21%

22%

Verypoor Poor Average Good Verygood

BSNL 3% 10% Idea 7%

18% 38% 22% 20%

27% 32% 37%

Vodafone 5% 4% Airtel 4%8% 0%

29% 40% 60%

80%

100%

120%

As the above graph reveals, in local charges of operators in Delhi region, Reliance is leading with 40% customers preference. It is because of its scheme like Reliance to Reliance free talk. It has become more popular than the other schemes provided by the other operators. In the poorest local charges, Aircel is at the top with 13% voting. In case of average charges, Vodafone is leading with 38% voting and preference by customers.

3) Message service:
120%

100% 19% 80% 53% 60% 32% 49% 26% 20% 31% 40% 20% 5% 1% Vodafone 6% 2% 1% Airtel 5% 3% Idea 42% 40% 16% 8% BSNL 12% 2% TATA 28% 23% 14% 6% Reliance 16% 8% Aircel 31% 28% 32% 26% 27% 29% 18% VeryGood Good Average Poor 40% VeryPoor

0%

From the survey, the information related to message service was found and it was concluded that Vodafone provides the best messaging services to its customers and it is preferred by 53% customers, followed by Airtel with 49% customer preference. In case of the poorest message service, BSNL & Aircel is rated highest with 8% customers, followed by reliance with 6 %. There is very close rating in very poor section. Idea is just behind Reliance with 3% rating. In case of average rating, Airtel is at the top place with 42% customer preference, followed by Idea with 40% ratings.

4) Network:

120% 100% 80% 60% 40% 20% 0% 26% 6% 7% Airtel 9% 5% 4% Vodafone 7% 12% Idea 27% 43% 25% 28% 39% 29% 17% 8% 8% BSNL 11% 9% TATA 24% 27% 14% 39% 29% 33% 21% 27% 19% 17% 23% 10% 4% Relaince 29% VeryGood Good 34% 30% Average Poor VeryPoor

Aircel

As per the findings on the basis of this attribute, it was found that Vodafone has very good network coverage with 43% rating, followed by BSNL with 39% rating. It shows very close competition for network. BSNL got this higher rating because according to the survey, people also take roaming network into consideration and on the basis of that it was found that BSNL has got the best network facility in roaming. In case of the poorest network, Aircel has the poorest network as it has got the highest rating by the customers. In case of the average preference, Idea has got the average rating having 29% customers rating.

5) Schemes:

120% 100% 80% 60% 40% 27% 20% 0% 8% 6% Airtel 11% 9% Vodafone 26% 7% Idea 31% 26% 23% 20% 36% 21% 29% 12% 32% 31% 30% 29% VeryGood Good Average Poor 15% 17% 6% Relaince VeryPoor 25% 12% 3% Aircel

22% 28%

23%

21% 32%

30% 23% 7% 5% BSNL 17% TATA

As the graph shows, the customers preferences in case of service providers different schemes are maximum in case of BSNL as it is the cheapest as per the customers responses and findings. BSNL is rated highest as a provider of very good schemes with 36% customers preferences, followed by Airtel with 31% customers preferences. Here, the graph also shows that there is a close competition between Airtel and Reliance in case of very good rating category. Reliance is just behind Airtel with 30% rating. The graph also reveals about the poorest rating by customers as their lowest preference. The lowest preference is of Aircel with 3% customer ratings. It has got the highest rating among all the operators. The average rating is of Vodafone in case of providing schemes. It has got the average preference of 32% customers rating.
6) Talk-time and Validity:

120% 100% 80% 60% 28% 40% 15% 20% 16% 0% 4% Airtel 31% 19% 9% 5% Vodafone 9% 6% Idea 20% 11% 8% BSNL 5% 4% TATA 36% 28% 10% 6% Relaince 16% 9% Aircel 29% 37% 38% 28% 38% 28% 30% 25% VeryGood 27% 23% 26% 24% Good Average Poor VeryPoor

26%

26%

It was found from the gathered information that BSNL & Vodafone both have got very good talk time and validity. In spite of the close competition, both are leading the market with 38% customers preferences, followed by Airtel with 37% ratings. In case of the average customers preferences, Tata is a leader with 36% ratings followed by Idea with 31% customer ratings. But among all the telecom operators, the poorest talk-time and validity provider is Aircel with 9% customers ratings.
7) Value Added Services (VAS):

120%

100% 29% 43% 25% 27% 37% 37% 25% 20% 17% 0% 2% 3% 12% 5% 3% 20% 7% 12% 14% 23% 10% 18% 11% 16% 12% 19% 19% 22% 25% 32% 22% 27% 26% 21% VeryGood Good Average Poor VeryPoor

80%

41%

60%

40%

18%

20%

As the above graph clearly depicts that extra benefits i.e. VAS are very well provided by Vodafone with 43% followed by Airtel with 41% customers preference. There is a tough competition between Vodafone and Airtel in the market. But the poorest and the lowest VAS are provided by BSNL as per the customers preferences survey. It has the highest rating i.e. the poorest rating of 14%. The average VAS preferred by the customers is of Idea which has the rating of 25%.
8) Availability:

120%

100% 32% 45% 30% 32% 25% VeryGood 22% 27% 32% 33% 32% 9% 8% 5% 6% 3% Idea 32% 27% 13% 11% 3% BSNL 33% 11% 3% 6% TATA 9% Relaince 15% 17% Aircel 28% 21% 21% Good Average Poor VeryPoor

80%

42%

41%

60%

40%

20%

13% 7% 6%

0%

Airtel Vodafone

As the above graph reveals, the very good availability of the telecom brand is Vodafone having 45% customers ratings. Airtel is at the second place with the minor difference of 42%. There is a tough competition going on among Vodafone, Airtel and BSNL in case of availability as per the data gathered. The average availability is of Tata with 33% followed by Idea with 32%. Very poor availability is of Aircel. It has got17% customers ratings.
9) Billing system:
120% 100% 80% 60% 40% 20% 0% 37% 32% 28% 18% 28% 2% 5% 16% 14% 21% 10% 6% 22% 12% 5% 20% 11% 10% 42% 41% 37% 29% 32% 36% 34% Very Good Good 23% 31% 25% 25% Average Poor Very Poor

14% 4% 3%

17% 6% 4%

As the above graph shows, the billing system is very good of Airtel with 42% customer preferences followed by 41% of Vodafone. As it can be seen from the graph that all the operators are very close to one another in case of effective billing service. The graph also depicts that average billing system is of Idea which has got 28% highest customers ratings followed by Reliance with 22% ratings. But the poorest billing system among all is of BSNL which has got highest 14% customers ratings.

10) Voice clarity:

120% 100% 80% 60% 40% 20% 0% 32% 37% 10% 5% 3% 33% 23% 12% 4% 2% 5% 4% Idea 22% 8% 7% BSNL 23% 7% 4% TATA 23% 11% 1% Relaince 45% 49% 36% 31% 32% 34% 29% VeryGood Good 33% 34% 31% 32% Average Poor 21% 12% 6% Aircel VeryPoor

Airtel Vodafone

From the survey conducted and from the above graph, it was concluded that voice clarity is much better of Vodafone which is rated highest having 49% customers preferences. At the second place, it is Airtel with 45% rating. The average quality of voice clarity is of Idea as well as of Reliance & Tata with 23% ratings. BSNL has the poorest voice clarity and rated as the worst operator by 7% people.

15. How do you find ISD rates of your service provider?

As the above chart shows, the customers in the Delhi region think that the services they are rendering are economical. 49.35% customers think like that. But 31.51% customers think that it is costly affordable and 19.14% customers think that it is costly unaffordable. 16. How long do you have to wait in customer care?

The customers liking about a particular service provider is also depended on how the customer care executive solves their problem and how much time they take to reach the customer. So, here

the data is collected on the basis of how much a customer has to wait while calling the customer care. The data reveals that in Delhi region, majority of the customers i.e. 37.21% have to wait for an average time of 2minute which is quite fair. Surprisingly, the second highest rating is for up to 1 minute which is rated by 27.84% of the customers which is very good. There are 5.77% customers who have to wait for 11 minutes or more which is not bad. Where as, 20.91% have to wait for an average time of 3-5 minutes. 17. Are you aware of 3G technology? There are new inventions and technologies come up in the market to enhance the competition and make the usage much faster and also useful as well as easy to use. 3G technology is one of those technologies. In the survey, it was asked to the customers whether they are aware of new 3G technology or not.

The results are mentioned in the above chart. In Delhi region, 92.30% people are aware of this technology and only 7.7% people are not aware of it.. So, this is the primary information which was collected through the survey in both the regions of the city.

Chapter 11: SWOT ANALYSIS OF INDIAN TELECOM

Strengths:
Huge wireless subscriber potential One of the fastest growing sectors Consumers are ready to pay for cutting edge services FDI limits are 74% Unified license regime

Weaknesses;
Lowest call tariffs

Market is regulated by Government bodies Too many authorities are ruling this sector Wide scales of consumer churn in this sector. Now the number portability is coming up so it will increase the consumer churn rate Value Added Services (VAS) is restricted because of literacy and language problems. It is difficult to make into the semi-rural and rural areas because of the lack of infrastructure. Problem of limited spectrum availability and the issue of interconnection charges between the private and state operators.

Opportunities:
To offer more VAS on GSM, CDMA and Internet Service Providers (ISP) Language independent services. E.g. sending the message in local language, information available in local language etc. New innovations in service providers

Huge content providing to local culture as well as globally Foreign investments in form of equity or technology Unified messaging platforms

Threats:
Weak Intellectual Property Rights (IPR) Threat of low cost service providers Political instability Regulator interference The service providers have to incur a huge initial fixed cost to make a mark in rural markets. Achieving break-even under these circumstances may prove to be difficult.

Chapter 12: FUTURE OF INDIAN TELECOM

Indian Telecom is advancing day by day in every aspect. Everyday new technology emerges which helps to solve lot of problems and makes the process smoother for the telecom service providers as well as customers. The competition is increasing and many players are ready to grasp the hands of customers by using CRM techniques. Different VAS (Value Added Services) will play a crucial role in future development. Indian telecoms total mobile subscriber base is around 160 millions but still there are lots of opportunities in rural areas as well. Government is also supporting the service providers. Apart from that, many telecom operators like Reliance, Bharti and MTNL have decided to enter into different countries like Bharti is planning to launch in Sri Lanka. Reliance is planning to move into Uganda and Sri Lanka also. MTNL is planning to start its proceedings in Mauritius. Apart from that, it is also planning to grow in other markets like Kenya, whereas MTNL is already into the joint venture in wireless market in Nepal. Launch of new 3G i-phone will change the telecom scenario completely. Government has also taken some steps for the 3G telecom companies for the improvement of rural market. Future technology projections in broadband indicate that microprocessors will run one thousand times as many computations as are being done today, which mean enormous gain in productivity and efficiency, giving people unimaginable power to access, organize, and transform information. The road for India achieving the top most position in telecommunication is no longer a dream as India is moving towards its milestone and in few years India will over power all countries and achieve its target of top most position in telecom industry. Number portability is another technology which will enhance the competition as well as it will benefit the consumers more. In this technology, a consumer can change the service provider without changing the number. The proposed merger of BSNL and MTNL is consuming a lot of ink. There have been various suggestions floated in the media about the ways and means the synergies could be obtained. BSNL should concentrate more on rural spread and better Internet connectivity. MTNL should be divested totally. In case of Broadband, there is a late non-starter here. In terms of pricing and download limits, this is pathetic for users who wish to consume bandwidth for file sharing or extensive web surfing for any reason.

The emergence of VAS is one trend that is being followed closely and with great interest by industry analysts and policy makers worldwide. In India, the mobile phone has emerged as the most prevalent device to access the Internet. Most of the industry up till now has been focused on investments in wireless infrastructure. Now that a large part of that investment is behind us, attention is inevitably shifting to VAS. The consumer is asking for the next set of services-beyond ring-tones, wallpaper, games, SMS. However, few VAS providers have realized that simply taking the web experience and miniaturizing it for mobile delivery doesnt work. The consumer is left with a poor experience and abandons the service quickly. These range from applications in social media to dynamic widgets scaled down to fit the way people actually interact with information on the go. People want to buy train or movie tickets, read their horoscopes and catch up on the gossip about their favorite Bollywood or Hollywood stars.

Chapter 13: CONCLUSIONS AND RECOMMENDATIONS

13.1- Conclusion:India has one of the worlds largest telecommunication networks. The telecom story continues to be the best evidence of the efficacy of the reforms process. In just six years, the number of mobile subscribers has gone up from just about one million to 100 million, a subscriber base that only four other countries China, the US, Japan and Russia can boast of. None can doubt the correlation between this explosive growth in numbers and the steep decline in the cost of the mobile phone and of its usage. Effective tariffs have dropped from over Rs 14 a minute to Re 1, bringing the phone within reach of people even below the middle-class. The Government may have, therefore, landed itself a winner in the mobile phone service providers, but the task of taking telecom to the other 90 per cent of the population will call for even greater innovation in policymaking, technology and marketing. Still three-fourths of the land mass is not illuminated by a cellular signal and the price of the instrument is beyond the reach of a substantial section of the population let alone the charges for its use. These issues, of course, can be resolved by decisive policy action, such as a creative use of the Universal Services Obligation fund that now has over Rs 70 billion, releasing adequate spectrum to operators in the metros, and a proactive investment policy that invites many more equipment manufacturers to set up base in this country. The number portability issues will solve many problems and will help the end users, which will change the whole scenario of competition and will make the game tougher for the service providers. Looking at the competition trend, it seems that soon in future, rural schools will be having broadband and internet facilities as their part of studies as well as routine lives. There is availability of internet facility in many villages. But soon it will be taught in secondary and higher secondary schools in all villages and various technologies like 3G and various VAS have made the market more competitive and made easy for the users. Implementation of number portability and 3G technologies have solved many problems and made easy and comfortable for the customers.

13.2- Recommendations:As mentioned in the future of Indian telecom and on the basis of the primary research and secondary research, the following recommendations can be concluded: Lowering the tariff plans of service providers will increase more competition. not specifically prescriptive. Resolve spectrum allocation and create need-based licensing of spectrum bandwidth to facilitate the policy of unlimited new entrants in basic services. Pass rules on number portability (service migration) to allow free market conditions for fixed line consumers, without taxing new entrants or consumers for moving away from a monopoly service provider. Bringing more up gradation in VAS for the betterment of the users. Improvement of network infrastructure in both the urban and the rural areas. Reducing the STD and ISD charges for the users. More FDI inflows can be enhanced. More Direct To Home (DTH) services will give benefits to the customers. CDMA technology providers i.e. Tata and Reliance are slowly coming up with the competition with GSM operators which gives a good benefit to the end users. These operators should also indulge into providing various services. Mobile banking is a new concept which is recently adopted by Airtel and it provides recharge from mobile phone by tie ups with banks. This new concept will bring a new revolution in case of inventions. Broadband services can be more focused more if the spectrum issues are solved. Still there are many rural areas where broadband services are not available. Companies can provide new and different schemes to their customers. Enhance data services on fixed and wireline services. Increase in internet speed on mobile can be the criteria for the operators.

In order to allow technological up gradation, segment policies should be technology-neutral, and

The above recommendations for customers satisfaction can be shown from the chart below:

Branding recommendation model in Indian telecom sector

After talking to customer care executives of telecom sector, the following recommendations can be concluded as a part of their strategies for acquiring or retaining new customers:
The telecom operators should take less time for the solving customers queries.

 Majority of the operators focus on the special occasions to launch new schemes but they can also launch schemes on weekly or monthly basis to attract new customers. TV media is more effective for the operators as per the findings. But they should also focus on radio and newspapers for more effectiveness. Customer care executives should concentrate more on pre-paid connections for the price sensitive customers and post-paid connections for business class people or high class people. They should use their media tools accordingly. They should concentrate more on the attributes like talk-time facility network, voice clarity etc apart from SMS, VAS and schemes. They should focus more on VAS like GPRS facilities, games, astrology, and music for young people and business news for business people They should also focus on new technologies like 3G. They should also focus on pilot projects before launching a product, especially in case of rural areas.

BIBLIOGRAPHY
_ Books:
1. Mobile Communications by Jochen Schiller-Second Edition

Reports:
1. DoT Report 2010-11 2. Indiainfoline teleline newsletter 3. Telecom Sector Annual Report 2009-10 4. TRAI Report 2008-09 5. TRAI Report 2009-10 6. TRAI Report 2010-11

_ Articles:
1. Bernhard Goldberger- 19th Bled e-Conference eValues 2. Business & Economy 3. Business Standard 4. DNA Newspaper 5. MTNL press release 6. RCom press release 7. The Economic Times

_ Websites:
1. www.bsnl.co.in 2. www.dot.gov.in 3. www.google.com 4. www.iloveindia.com 5. www.micrositemobile.com 6. www.trai.gov.in

ABBREVIATIONS
VAS- Value Added Service WAP- Wireless Application Protocol DoT- Department of Telecom TRAI- Telecom Regulatory Authority of India EPS- Earning Per Share TTSL- Tata Teleservices Limited RCom- Reliance Communications EQM- Easier, Quicker, More IRT- Indian Radio Telegraph Company IRCC- Indian Radio and Cable Communication Company PTT- Posts, Telephone and Telegraph VSNL- Videsh Sanchar Nigam Limited MTNL- Mahanagar Telephone Nigam Limited BSNL- Bharat Sanchar Nigam Limited NTP- National Telecommunications Policy IUC- Interconnect Usage Charges GSM- Global System for Mobile communications CDMA- Code Division Multiple Access COAI- Cellular Operators Association of India GCC- Global Calling Card WLL- Wireless Local Loop VPN- Virtual Private Network NIB- Non Interference Basis NLD- National Long Distance ILD- International Long Distance WAN- Wide Area Network MVNO- Mobile Virtual Network Operator CRM- Customer Relationship Management QTIL- Quippo Telecom Infrastructure Limited

WTTIL- Wireless Tata Telecom Infrastructure Limited IPR- Intellectual Property Rights ISP- Internet Service Provider GPRS- General Packet Radio Service SIP- Session Initiation Protocol ADR- American Depository Receipts OCS- Overseas Communication Service USB- Universal Serial Bus TMI- Telecom Malaysian International EPS- Earning Per Share WiMax- Worldwide interoperability for Microwave Access PSTN- Public Switched Telephone Network DSL- Digital Subscriber Line WI-Fi- Wireless Fidelity USO- Universal Service Obligation VPT- Village Public Telephone DEL- Direct Exchange Line FTTC- Fiber To The Curb FTTH- Fiber To The Home ICT- Information and Communication Technology FDI- Foreign Direct Investment IP- Internet Protocol VAS- Value Added Services VASP- Value Added Service Provider CP- Content Provider SMPP- Short Message Peer-to-Peer Protocol SMSC- Short Message Service Centre FII- Foreign Institutional Investor IVR- Interactive voice response

ANNEXURES
Annexure 1: Questionnaire for Customers This survey is conducted for the purpose of finding out the feasibility of the telecom service providers by students of IIPM, Delhi and whatever information we get will be kept confidential and used for research purpose only. Put a tick (_) for the right options. 1. Age Group: 10-20 20-40 Above 40

2. Occupation: _________________________________ 3. Designation: _________________________________ 4. Gender: Male Female

5. Which type of connection do you prefer? Pre-paid Post-paid BSNL Tata Reliance Vodafone

6. Whose service(s) are you rendering now? Airtel Idea Aircel CDMA

7. Which technology do you prefer?

GSM

Both

8. How long have you been using this connection of your service provider? Less than 3 months 3-6 months 2-3 years 6-12 months 1-2 years More than 3 years

9. Rate your satisfaction level of your service provider. Very Good Good Satisfied Bad Very Bad

10. What kind of expectations do you have from your service provider? Good service Network Voice quality Schemes Price

11. Are you aware about the role of telecom services in providing broadband without using cable TV network? Yes No

12. How much do you spend per month on your mobile connection? Up to Rs. 500 Rs. 501- Rs. 1000 Rs. 1001- Rs. 1500 More than Rs. 1500 13. How do you find the behavior of customer care executives of your service provider? Professional & prompt Warm & helpful Not Responding Lazy & slow

14. What do you think about the competition in the market? No choice Some Choice Enough Choice Cant Say Dont Know

15. Given a choice with same number, which service provider will you select? Tata Reliance BSNL Idea Airtel Vodafone Aircel

16. What is your purchase intent for news alerts on mobile phone? General News Entertainment Business Sports Astrological Predictions

17. How will you rate the following attributes for your service providers? Please tick (_) the appropriate.

18. How do you find ISD rates of your service provider? Costly affordable Economical Costly unaffordable

19. How long do you have to wait in customer care? Up to 1 minute 2 minutes 11 minutes or more 20. Are you aware of 3G technology? Yes No 3-5 minutes 6-10 minutes

Thank You

Annexure 2: Questionnaire for Marketers This survey is conducted for the purpose of finding out the feasibility of the telecom service providers by students of IIPM, Delhi and whatever information we get will be kept confidential and used for research purpose only. Put a tick (_) for the right options. 1. Age Group: 2. Gender: 10-20 Male 20-40 Female BSNL Idea Tata Aircel Reliance Vodafone Above 40

3. Company Name: Airtel

4. Designation: _________________________________ 5. On which type of connection do you concentrate more? Pre-paid Post-paid

6. When do you launch new schemes? ____________________________ 7. What factors do you consider while launching a new scheme? __________________________________________________ 8. Which Strategy do you implement to acquire new customers? ___________________________________________ 9. Which strategy do you implement to retain customers? ____________________________________________ 10. Do you do any pilot project before launching any product to know customers preference? Yes No

11. How do you solve problems of customers?

12. Do you have any grievance handling department to solve customers problems? Yes No

13. On which Value Added Service do you focus more?

14. According to you, how does a technology and network play role in customers satisfaction?

15. How does a media tool can play a role in branding your product and providing customers satisfaction?

Thank You

RESPONSE SHEETS
Response Sheet-1
1. Name: - Shailesh Kumar Singh Centre: Batch: IIPM, Delhi PGP/SS-2009-11

Section: - SF-3 Phone No: - 9899866563 Email Id: - singh.shaileshkumar113@gmail.com

2. ID No: - DS/09/11-M-023

3. The topic of Study: - Critically analyze the customer preference and satisfaction measurement in Indian Telecom Industry with reference to Vodafone.

4. Details of Meeting: - Guide explained how to start thesis and to start with secondary data collection.

5. Date when the Guide was consulted: - 5th January-2011

6. The outcome of the meeting/discussion: - Secondary data collection through books, internet and articles started.

7. The Progress of the thesis: - Basic details about telecom found through secondary sources.

Signature of thesis guide

Response Sheet-2
1. Name: Centre: Section: Batch: Shailesh Kumar Singh IIPM, Delhi SF-3 PGP/SS-2009-11

Phone No: - 9899866563 Email Id: - singh.shaileshkumar113@gmail.com

2. ID No: - DS/09/11-M-023

3. The topic of Study: - Critically analyze the customer preference and satisfaction measurement in Indian Telecom Industry with reference to Vodafone. 4. Details of Meeting: - Gathered some secondary data related to Indian telecom and showed to the guide and got suggestions from the guide to find out company and its market share details. 5. Date when the Guide was consulted: -15th January-2011 6. The outcome of the meeting/discussion: -Started collection of data according to the suggestions received. 7. The Progress of the thesis: -Data collected related to market share and companies profile through secondary data.

Signature of thesis guide

Response Sheet-3
1. Name: Centre: Section: Batch: Shailesh Kumar Singh IIPM, Delhi SF-3 PGP/SS-2009-11

Phone No: - 9899866563 Email Id: - singh.shaileshkumar113@gmail.com

2. ID No: - DS/09/11-M-023

3. The topic of Study: - Critically analyze the customer preference and satisfaction measurement in Indian Telecom Industry with reference to Vodafone. 4. Details of Meeting: - To search about telecom in rural area and comparisons between GSM and CDMA. Apart from that, also to find about recent updates and issues. 5. Date when the Guide was consulted: -28th January-2011 6. The outcome of the meeting/discussion: -Suggestions about GSM and CDMA received and how to find out details on the basis of that. 7. The Progress of the thesis: -Recent issues were found out as explained by guide. Also found out latest updates in Indian telecom and also data related to rural area. GSM and CDMA comparison was done.

Signature of thesis guide

Response Sheet-4
1. Name: Centre: Section: Batch: Shailesh Kumar Singh IIPM, Delhi SF-3 PGP/SS-2009-11

Phone No: - 9899866563 Email Id: - singh.shaileshkumar113@gmail.com

2. ID No: - DS/09/11-M-023

3. The topic of Study: - Critically analyze the customer preference and satisfaction measurement in Indian Telecom Industry with reference to Vodafone. 4. Details of Meeting: -The guide told me to start with primary research and to prepare questionnaires about that. 5. Date when the Guide was consulted: - 5th Feb-2011. 6. The outcome of the meeting/discussion: - Asked the guide about the questionnaire details to include. 7. The Progress of the thesis: -Prepared questionnaire as per the guidelines.

Signature of thesis guide

Response Sheet-5
1. Name: Centre: Section: Batch: Shailesh Kumar Singh IIPM, Delhi SF-3 PGP/SS-2009-11

Phone No: - 9899866563 Email Id: - singh.shaileshkumar113@gmail.com

2. ID No: - DS/09/11-M-023

3. The topic of Study: - Critically analyze the customer preference and satisfaction measurement in Indian Telecom Industry with reference to Vodafone. 4. Details of Meeting: Showed the questionnaires if there are any changes required and if not then to get approval for the same to proceed with the primary details. 5. Date when the Guide was consulted: - 17th Feb-2011. 6. The outcome of the meeting/discussion: - Got approval from the guide to proceed with the primary research. 7. The Progress of the thesis: - Started primary research and after completion of analysis decided to show it to the guide.

Signature of thesis guide

Response Sheet-6
1. Name: Centre: Section: Batch: Shailesh Kumar Singh IIPM, Delhi SF-3 PGP/SS-2009-11

Phone No: - 9899866563 Email Id: - singh.shaileshkumar113@gmail.com

2. ID No: - DS/09/11-M-023

3. The topic of Study: - Critically analyze the customer preference and satisfaction measurement in Indian Telecom Industry with reference to Vodafone. 4. Details of Meeting: - Meeting after final analysis is done and if any changes are required. 5. Date when the Guide was consulted: - 28th Feb-2011. 6. The outcome of the meeting/discussion: - Changes are done as per the guides suggestions. 7. The Progress of the thesis: - Final thesis is to be submitted.

Signature of thesis guide