“Assessme nt Of Distributio n Network For IDEA In Ahmedaba d”
[ INSTITUTE OF BUSINESS MANAGEMENT & RESEARCH Ahmedabad]]
Neeraj Gupta 2 A Project Report On INDIAN TELECOM INDUSTRY WITH REFRENCE TO IDEA Submitted as partial fulfillment of the curriculum of Masters of Business Administration TO Institute of Business Management and Research Ahmedabad
Developed By NEERAJ GUPTA
Internal Guide VISHAL DAHIYA
3 COVER PAGE
INDIAN TELECOM INDUSTRY WITH REFRENCE TO IDEA
By
NEERAJ GUPTA A project report submitted in partial fulfillment of the requirements for the degree of Master of Business Administration of Sikkim Manipal University,INDIA Sikkim-Manipal university of Health, Medical and technological sciences Distance education wing Syndicate house Manipal- 576 104
4 DECLARATION
I here by declare that the project report entitled Perception about “INDIAN TELECOM INDUSTRY WITH REFRENCE TO IDEA”Submitted in partial fulfillment of the requirements for the degree of Masters business Administration to Sikkim-Manipal University , India, is our original work and not submitted for the award of any degree, diploma, fellowship,or any other similar title or prizes.
Place : Ahmedabad NEERAJ GUPTA
Date : 31 -03- 2009 ( 520783248)
5 University study centre certificate
This is to certify that the project entitled Perception about “INDIAN TELECOM INDUSTRY WITH REFRENCE TO IDEA” Submitted in partial fulfillment of the requirements for the degree of Masters of Business Administration of Sikkim- Manipal University of Health, Medical and technological sciences.
NEERAJ GUPTA
Has worked under my supervision and guidance and that no part of their report has been submitted for the award of any other degree, Diploma, Fellowship or other similar titles or prizes and that the work has not been published in any journal or magazine.
Certified VISHAL DAHIYA
6 Examiner’s Certification
The project report of INDIAN TELECOM INDUSTRY WITH REFRENCE TO IDEA By NEERAJ GUPTA Is approved and is acceptable in quality and form.
Internal Examiner VISHAL DAHIYA
7 ACKNOWLEDGEMENT
First of all we would like to extend our sincere feelings towards this institute who has given us the opportunity to explore ourselves to impart our knowledge and skills in this report.
We are highly grateful to our project guide VISHAL DAHIYA for his kind approach, continuous guidance and support during the entire period to make this project a success.
Last but not least we would like to express our thanks those who are directly or indirectly responsible for making this project a great success .
8 Index
Sr. No. Particulars Page No. 1 INTRODUCTION 4 2 INDUSTRY PROFILE 5 • Over View • Indian telecom industry at a glance • Major players
3 COMPANY PROFILE Products of Idea 25 Five force model 4 RESERCH DESIGN 43 5 Data Analysis & Interpretation 46 6 LIMITATIONS & SCOPE 86
7 Findings 87 8 Recommendation 88 9 Questionnaire 90 10 Bibliography 98 11 Glossary 99
INTRODUCTION
9 The topic of the project is the Assessment of distribution network for Idea in Ahmedabad. In such project actually we try to analyze the strength of the idea cellular with other competitors in the market.
The objective of this project was to assess market share, to analyze effectiveness of idea’s representative, to study and analyze the reach of Idea’s distribution network vis-à-vis other competitor.
For such the survey of 100 retailers had been made and with filling up of the questionnaires, try to analyze the distribution effectiveness and the distribution reach and its depth in the Ahmedabad.
With the use of different types of the charts and the statistical tool, we try to analyze the facts of the Ahmedabad for all companies.
An assessment of the Distribution Network of idea’s services will help the company in knowing the strength and weaknesses of the distribution network in Ahmedabad vis-à-vis competitor. After the project, we are able to give suggestions to the company on the basis of field survey and its result.
INDUSTRY PROFILE
10 Telecommunications is the one of the fastest growing service industries of the word. While the accent of growth on the value added services, such as email, cellular phones etc in the developed countries, the thrust is on improving basic role in spurring growth, especially industrial and services, in any economy.
The last two decades has witnessed a restructuring of the entire sector across the globs, in terms of privatization and competition. Opening up of economies and privatization in the developing countries has triggered an influx of foreign capital and technology into the telecom sector.
HISTORY OF WIRELESS…
The cell phone is one of the most significant technological advances of the 20 th century; however, the neat little gadget is not the first to communicate without wire. Smoke signals and tribal drums were used
11 to communicate over short distances without wires. Later, although there was a form of mobile telephone service available in the late 1940s, its capacity was limited to 12 simultaneous callers.
WORKING OF WIRELESS…
Cell phones use low- energy FM radio waves to transmit voice to the nearest antenna site connected with the local phone network. The call goes through either a regular phone line, or by radio signal to another cell phone, depending on the service. Wireless technology uses individual radio frequencies over & over by dividing service areas into different geographic zones called “cells”. Each has its own radio transmitter and receiver antenna linked to Mobile Telephone Switching Offices (MTSOs).
As the caller moves from one place to the next, the call is handed off by the MTSO to the next cell site, providing a consistent, high quality signal. When a subscriber travels of a service area, “roaming” on the systems of other wireless carriers can still make calls. These carriers take up the call signal and allow calls to be made or received within their coverage area.
12 DEFINING CELLULER SERVICES:
Cellular Service is a service, which enables two-way, mobile, wireless communication via a portable handset. Area covered by the service provider is divided into cells, each with a Radio Base Station (RBS) connected to a Central Switching Center (CSC) which monitors the entire system. In the midst of a call, if a subscriber moves across cells, CSC ensures handing over of the call between the adjacent RBS and the call is uninterrupted.
Cellular Technology: The technology that gives a person the power to communicate anytime, anywhere – has spawned an entire industry in mobile growth, success and efficiency of any business/ economy. The most prevalent wireless technology in the world today, is GSM.
The GSM association (Global System for Mobile Communications) was instituted in 1987 to promote and expedite the adoption, development and deployment and evolution of the GSM standard for digital wireless communication. The Association was formed as a result of a European Community agreement on the need to adopt common standards suitable for cross border European mobile communications.
Starting off primarily as a European Standard, the Group Special Mobile as it was then called, soon came to represent Global System for mobile communications as it achieved the status of a worldwide standard. The GSM membership has grown exponentially since 1992.
13 14 •
Overview – The Indian Telecommunication Industry- Past, Present & The Future…
15 The journey so far…
1994 was a watershed year in the history of the Indian telecom sector, which ranked sixth in the world after USA, China, Japan, Germany, and France in terms of number of installed fixed lines.
The government of India introduced the New Telecom Policy (NPT) that year that envisaged a vast change in Indian Telecom Scenario and reflected the Government’s desire to bring the Indian telecom at par with the rest of the world. It was followed up by the introduction of NTP 1999. The various policy changes also reflected the Government’s realization that the huge funds needed to undertake gigantic and extensive upgrade of telecom infrastructure in all the three segments of wire line, wireless and data services, would require active participation of private sector.
As soon as the telecom industry opened to private sector investment beginning 1994, a large number of Indian companies entered the segment with varying force, different strategies, and assorted aspirations. There were ten key strategic dimensions along which these new entrants positioned themselves in this sector.
How we stand today…
The Indian telecommunication network with 69 million telephone connections is the fifth largest in the world and the second largest among the emerging economies of Asia. Today, it is the fastest growing market in the world and represents unique opportunities for UK companies in the stagnant global scenario. With tele-density approaching 6.9 per hundred, the target to achieve 15 per hundred by 2010 looks well within reach. India's total mobile subscriber base (both cellular and wireless in local loop-mobile) has reached 27 million. About 85% of the villages have village public telephones (VPTs)- 5,16,887 VPTs exist in India. The remaining 15% that includes 88,970 villages are yet to be covered. Accordingly, India's 10th Five- year plan 2002-07 projects £25 billion worth of
16 investments in 50 million fixed lines, 30 million cellular lines and 20 million Internet connections.
The factors behind the wireless revolution in India are no different from those prevailing globally and can be listed as follows:
1. Industry deregulation & liberalization has ushered in increased competition & led to growth
The Indian telecom industry has come of ages in the field of regulations. It started with the NTP in 1994. Between the years 1994 & 1998 TRAI was established as an independent regulatory body, the wireless licenses were allotted to private operators and the wire line services were opened up to competition.
Between 1999 & 2002 new telecom policy was introduced and there was entry of third & fourth operators in the wireless services. Free competition was allowed in wire line and first round of tariff rebalancing was done. The operators moved from fixed to revenue- sharing license fee structure. Then in the year 2003-2004 the unified license regime was introduced to enhance the competition and create a level playing field. Transfer of wireless licenses was allowed among the operators and intra-circle wireless mergers were also allowed.
2. Declining tariffs have made wireless & Handset prices extremely affordable
The intense competition has been instrumental in driving down the wireless tariffs. Entry of 3rd and 4th GSM operators in each circle, and CDMA wireless operators, has created a new floor for local & long distance tariffs. The average peak wireless call tariff per minute has come down from Rs. 16.8 in 1998 to Rs. 6 in 1999 to Rs. 4 in 2002 and Rs. 1.5 at present. There has also been a crash in the handset prices by more than 70% over the last 4-5 years, and the operators have coupled it with easy financing schemes and bundling of handsets with connections. With the government reducing the custom duties on the handsets, handset prices are expected to come down even further, leading to higher new demand and replacement demand.
17 3. Prepaid offerings have driven mass penetration of wireless
Prepaid offerings have created a surge in wireless subscribers, mirroring the trend in other developing countries. The operators are aggressively promoting prepaid cards and have spurred the adoption of wireless by the masses. From the budget-conscious lower middle class households to college students to low income groups, people are increasingly seeing prepaid as a hassle-free way of going wireless. The prepaid share has increased from 26% in 1999 to 60% in 2002. However, in 2003 prepaid did not increase its share of the total subscriber base, despite the addition of 17 million new subscribers because all the 6 million new subscribers added by CDMA wireless were postpaid subscribers. With the introduction of the CDMA prepaid in 2004 the prepaid share will increase to over 75% in coming years.
4. Implementation of CPP regime has given the subscriber greater control over costs
The implementation of CPP regime was a water-shed event in the industry. It has greatly increased the affordability of going wireless, as subscribers don’t have to pay for incoming calls, and can control their telecom costs better. The other benefits of CPP are lower costs for wireless subscribers, higher wireless usage, and higher penetration of wireless.
Road to Future…
The unified licensing has ended the License Raj in telecom, resolved all litigations, created a level playing field for all the operators and has paved the way for faster and sustainable growth of the telecom sector. The wireless revolution will increase its pace and the factors that have been responsible for its growth will carry it further. The wireless data services will act as a revenue stream for the wireless operators. Some operators have already deployed 3G technologies on their networks. With further rollout of wireless
18 broadband, backed by the provision of compelling content services, broadband revenues will comprise a key portion of the total telecom pie in the future
The future market will be characterized by high penetration, competition and churn and the winners will be distinguished by how they address these challenges. They’ll have to juggle between achieving economies of scale, efficient network management, increasing operating margins & attracting and maintaining subscriber base.
The future value will reside in ownership of customer relationship and provision of diversified services. This implies a trend towards bundled service offerings. For provision of bundled services, operators will need to have strategic alliances with intermediaries through whom traditional commercial transactions can be executed. Operators with the best interface strategies will succeed in maintaining the customer loyalty.
The operators need to rapidly grow their subscriber base while simultaneously maintaining customer loyalty. The ability to segment customers, identify the best among them and maximize their value will determine success.
Subscriber numbers are expected to more than double in the period 2001-2006, from 35 million in March 2001 to about 85 million in 2006. India will mirror the global trend of high growth rates in mobile vis-à-vis fixed-line users (40 per cent CAGR in mobile services against 16 per cent in the fixed-line segment). However, with fixed-line teledensity in India being at a very low 4 per cent, absolute growth in fixed-line services will lead additions in mobile subscribers over the next 10 years. Despite the high projected growth, teledensity in 2010 is expected to be 11.5 per cent, falling short of the NTP99 target of 15 per cent. Revenues will also grow, albeit slowly, in the light of significant reductions in tariffs. By 2008, telecom is expected to be a Rs 76,000-crore sector, contributing 5.4 per cent to India’s GDP.
19 Teledensity 12.90% Basic phone lines 65 million Telephone exchanges 38,000 Cellular subscribers 129.4 million Basic telecom subscribers incl. WLL 16.9 million PCO (Public call Office) 2255980 Paging subscribers 0.6 million Optical fiber cable (OFC) route length 579500 Kms Television sets 100 million PCs 9 million Cable TV Connections 45 million
20 Indian Telecom Industry at a glance
At 110.01 million connections ‘Indian Telecom Industry’ is the Third largest and fastest growing in the world. The subscriber base has grown by 40% in 2005 and is expected to reach 250 million in 2008.
Over the last 3 years, two out of every three new telephone connections were wireless. Consequently, wireless now accounts for 54.6% of the total telephone subscriber base, as compared to only 40% in 2003.
Wireless subscriber growth is expected to grow at 2.5 million new subscribers every month in 2007. The wireless subscriber base skyrocketed from 33.69 million in 2004 to 62.57 million in FY 2004 -2005.
The wireless technologies currently in use ‘Indian Telecom Industry‘ are Global System for Mobile Communications (GSM) and Code Division Multiple Access (CDMA). There are primarily 9 GSM and 5 CDMA operators providing mobile services in 19 telecommunication circles and 4 metro cities, covering more than 2000 towns across the country. And the numbers are still growing for ‘Indian Telecom Industry‘. ‘Telecom Industry in India ‘is regulated by ‘Telecom Regulatory Authority of India’ (TRAI). It has earned good reputation for transparency and competence. Three types of players exists in ‘ Telecom Industry India ‘ community - State owned companies like - BSNL and MTNL. Private Indian owned companies like - Reliance Infocomm and Tata Teleservices.Foreign invested companies like – Hutchison-Essar, Bharti Tele-Ventures, Escotel, Idea Cellular, BPL Mobile, Spice Communications etc.
21 The ‘ Indian Telecom Industry ‘ services are not confined to basic telephone but it also extends to internet, broadband (both wireless and fixed), cable TV, SMS, IPTV, soft switches etc. The bottlenecks for ‘ Indian Telecom Industry ‘ are:
Slow reform process:
Low penetration. Service providers bear’s huge initial cost to make inroads and achieving break-even is difficult. Huge initial investments. Limited spectrum availability and interconnection charges between the private and state operators. The Government Broadband Policy 2004 aims at 9 million broadband connections and 18 million internet connections in 2007. ‘Indian Telecom Industry ‘is currently expected to contribute nearly 1% to India’s GDP which is heartening and estimated to grow further and brighten the ‘Scenario of Indian Telecom Industry ‘.
GSM and CDMA subscription numbers:
CDMA GSM Subscribers GSM Annual CDMA Subscribers Year Annual (millions) growth (millions) growth
2000 3.1 94% - -
2001 5.05 76% - -
2002 10.5 91% 0.8 -
2003 22.0 110% 6.4 700%
2004 37.4 70% 10.9 70%
2005 58.5 57% 19.1 75%
2006 105.4 80% 44.2 131%
22 2007 129.0 71% 85.0 92%
The telecom network in India is the third largest network in the world meeting up with global standards. Presently, the Indian telecom industry is currently slated to an estimated contribution of nearly 1% to India’s GDP.
Some figures:
The Indian Telecommunications network with 129.01 million connections is the third Largest in the world and the second largest among the emerging economies of Asia.
Today, it is the fastest growing market in the world and represents unique opportunities for U.S. companies in the stagnant global scenario.
The total subscriber base, which has grown by 40% in 2005, is expected to reach 250 million in 2007.
According to Broadband Policy 2004, Government of India aims at 9 million broadband connections and 18 million internet connections by 2007.
The wireless subscriber base has jumped from 33.69 million in 2004 to 62.57 million in FY2004-2005.
In the last 3 years, two out of every three new telephone subscribers were wireless subscribers. Consequently, wireless now accounts for 54.6% of the total telephone subscriber base, as compared to only 40% in 2003. Wireless subscriber growth is expected to bypass 2.5 million new subscribers per month by 2007.
23 The Wireless technologies currently in use are Global System for Mobile Communications (GSM) and Code Division Multiple Access (CDMA). There are primarily 9 GSM and 5 CDMA operators providing mobile services in 19 telecom circles and 4 metro cities, covering 2000 towns across the country.
24 Major Players
There are three types of players in telecom services:
State owned companies (BSNL and MTNL) Private Indian owned companies (Reliance Infocomm, Tata Teleservices,) Foreign invested companies (Hutchison-Essar, Bharti Tele-Ventures, Escotel, Idea Cellular, BPL Mobile, Spice Communications)
BSNL
On October 1, 2000 the Department of Telecom Operations, Government of India became a corporation and was renamed Bharat Sanchar Nigam Limited (BSNL). BSNL is now India’s leading Telecommunications Company and the largest public sector undertaking. It has a network of over 45 million lines covering 5000 towns with over 35 million telephone connections.
The state-controlled BSNL operates basic, cellular (GSM and CDMA) mobile, Internet and long distance services throughout India (except Delhi and Mumbai). BSNL will be expanding the network in line with the Tenth Five-Year Plan (1992-97). The aim is to provide a telephone density of 9.9 per hundred by March 2007. BSNL, which became the third operator of GSM mobile services in most circles, is now planning to overtake Bharti to become the largest GSM operator in the country. BSNL is also the largest operator in the Internet market, with a share of 21 per cent of the entire subscriber base.
25 BHARTI
Established in 1985, Bharti has been a pioneering force in the telecom sector with many firsts and innovations to its credit, ranging from being the first mobile service in Delhi, first private basic telephone service provider in the country, first Indian company to ovide comprehensive telecom services outside India in Seychelles and first private sector service provider to launch National Long Distance Services in India. Bharti Tele- Ventures Limited was incorporated on July 7, 1995 for promoting investments in telecommunications services. Its subsidiaries operate telecom services across India. Bharti’s operations are broadly handled by two companies: the Mobility group, which handles the mobile services in 16 circles out of a total 23 circles across the country; and the Infotel group, which handles the NLD, ILD, fixed line, broadband, data, and satellite- based services. Together they have so far deployed around 23,000 km of optical fiber cables across the country, coupled with approximately 1,500 nodes, and presence in around 200 locations. The group has a total customer base of 6.45 million, of which 5.86 million are mobile and 588,000 fixed line customers, as of January 31, 2004. In mobile, Bharti’s footprint extends across 15 circles.
Bharti Tele-Ventures' strategic objective is “to capitalize on the growth opportunities the company believes are available in the Indian telecommunications market and consolidate its position to be the leading integrated telecommunications services provider in key markets in India, with a focus on providing mobile services”.
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, introduce new services and to raise revenue for telecom development needs of India’s 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 India’s leading and one of Asia’s largest telecom operating companies. The company has also been in the forefront of technology induction by
26 converting 100% of its telephone exchange network into the state-of-the-art digital mode. The Govt. of India currently holds 56.25% stake in the company. In the year 2003-04, the company's focus would be not only consolidating the gains but also to focus on new areas of enterprise such as joint ventures for projects outside India, entering into national long distance operation, widening the cellular and CDMA-based WLL customer base, setting up internet and allied services on an all India basis.
MTNL has over 5 million subscribers and 329,374 mobile subscribers. While the market for fixed wireline phones is stagnating, MTNL faces intense competition from the private players—Bharti, Hutchison and Idea Cellular, Reliance Infocomm—in mobile services. MTNL recorded sales of Rs. 60.2 billion ($1.38 billion) in the year 2002-03, a decline of 5.8 per cent over the previous year’s annual turnover of Rs. 63.92 billion.
RELIANCE INFOCOMM
Reliance is a $16 billion integrated oil exploration to refinery to power and textiles conglomerate (Source: http://www.ril.com/newsitem2.html). It is also an integrated telecom service provider with licenses for mobile, fixed, domestic long distance and international services. Reliance Infocomm offers a complete range of telecom services, covering mobile and fixed line telephony including broadband, national and international long distance services, data services and a wide range of value added services and applications. Reliance IndiaMobile, the first of Infocomm's initiatives was launched on December 28, 2002. This marked the beginning of Reliance's vision of ushering in a digital revolution in India by becoming a major catalyst in improving quality of life and changing the face of India. Reliance Infocomm plans to extend its efforts beyond the traditional value chain to develop and deploy telecom solutions for India's farmers, businesses, hospitals, government and public sector organizations.
27 Until recently, Reliance was permitted to provide only “limited mobility” services through its basic services license. However, it has now acquired a unified access license for 18 circles that permits it to provide the full range of mobile services. It has rolled out its CDMA mobile network and enrolled more than 6 million subscribers in one year to become the country’s largest mobile operator. It now wants to increase its market share and has recently launched pre-paid services. Having captured the voice market, it intends to attack the broadband market.
TATA TELESERVICES
Tata Teleservices is a part of the $12 billion Tata Group, which has 93 companies, over 200,000 employees and more than 2.3 million shareholders. Tata Teleservices provides basic (fixed line services), using CDMA technology in six circles: Maharashtra (including Mumbai), New Delhi, Andhra Pradesh, Tamil Nadu, Gujarat, and Karnataka. It has over 800,000 subscribers. It has now migrated to unified access licenses, by paying a Rs. 5.45 billion ($120 million) fee, which enables it to provide fully mobile services as well.
The company is also expanding its footprint, and has paid Rs. 4.17 billion ($90 million) to DoT for 11 new licenses under the IUC (interconnect usage charges) regime. The new licenses, coupled with the six circles in which it already operates, virtually gives the CDMA mobile operator a national footprint that is almost on par with BSNL and Reliance Infocomm. The company hopes to start off services in these 11 new circles by August 2004. These circles include Bihar, Haryana, Himachal Pradesh, Kerala, Kolkata, Orissa, Punjab, Rajasthan, Uttar Pradesh (East) & West and West Bengal.
28 VSNL
On April 1, 1986, the Videsh Sanchar Nigam Limited (VSNL) - a wholly Government owned corporation - was born as successor to OCS. The company operates a network of earth stations, switches, submarine cable systems, and value added service nodes to provide a range of basic and value added services and has a dedicated work force of about 2000 employees. VSNL's main gateway centers are located at Mumbai, New Delhi, Kolkata and Chennai. The international telecommunication circuits are derived via Intelsat and Inmarsat satellites and wide band submarine cable systems e.g. FLAG, SEA- ME-WE-2 and SEA-ME-WE-3.
The company's ADRs are listed on the New York Stock Exchange and its shares are listed on major Stock Exchanges in India. The Indian Government owns approximately 26 per cent equity, M/s Panatone Finvest Limited as investing vehicle of Tata Group owns 45 per cent equity and the overseas holding (inclusive of FIIs, ADRs, Foreign Banks) is approximately 13 per cent and the rest is owned by Indian institutions and the public. The company provides international and Internet services as well as a host of value-added services. Its revenues have declined from Rs. 70.89 billion ($1.62 billion) in 2001-02 to Rs. 48.12 billion ($1.1 billion) in 2002-03, with voice revenues being the mainstay. To reverse the falling revenue trend, VSNL has also started offering domestic long distance services and is launching broadband services. For this, the company is investing in Tata Telservices and is likely to acquire Tata Broadband.
Vodafone
Vodafone’s presence in India dates back to late 1992, when they worked with local partners to establish a company licensed to provide mobile telecommunications services in Mumbai. Commercial operations began in November 1995. Between 2000 and March 2004, Hutch acquired further operator equity interests or operating licences. With the
29 completion of the acquisition of BPL Mobile Cellular Limited in January 2006, it now provides mobile services in 16 of the 23 defined licence areas across the country.
Vodafone India has benefited from rapid and profitable growth in recent years. it had over 17.5 million customers by the end of June 2006.
IDEA
Indian regional operator IDEA Cellular Ltd. has a new ownership structure and grand designs to become a national player, but in doing so is likely to become a thorn in the side of Reliance Communications Ltd. IDEA operates in eight telecom “circles,” or regions, in Western India, and has received additional GSM licenses to expand its network into three circles in Eastern India -- the first phase of a major expansion plan that it intends to fund through an IPO, according to parent company Aditya Birla Group .
30 TELEPHONE NETWORKS STATUS AS OF
DECEMBER 2007
The Indian telecom boom is for real. While various issues between operators and the government and between fixed and mobile operators did result in avoidable chaos and uncertainty, the sector continued to grow. The Indian economy is expected to add millions of consumers of a younger age profile, more inclined to use telecom services. The fact that India has one of the lowest telecom penetration rates among major nations also offers an unprecedented opportunity for telecom service operators, infrastructure vendors, manufacturers and associated services companies.
31 COMPANY PROFILE
IDEA CELLULAR LIMITED
“The proud offspring of three illustrious parent (A.V Birla Group, TATA cellular and AT & T Wireless), Idea Cellular will be driven by the objective of creating a different in the lives of our customers. Idea Cellular aspires to offer the most comprehensive and innovative services, to assist people to go beyond what they thought possible. As the cellular revolution transforms India in the coming decade, Idea Cellular will be a harbinger of change.”
- Sanjeev Aga (President and CEO Idea Cellular Limited)
32 ABOUT THE COMPANY…
. LAUNCH OF SERVICE:
The cellular service was launched in the Gujarat circle in January 1997 and in the Maharastra circle (excluding Mumbai, including Goa) in March 1997.
. THE INITIAL PROMOTERS:
It was at the time of its launch set up as a joint venture of Aditya Birla Group and the leader in Wireless Technology-AT&T.
Established in 1947, the Aditya Birla Group is on of the leading business house in India. The Group has its presence across various sectors including cement, Viscose Staple fiber, engineering, textiles, power, telecommunication, industrial chemicals, petroleum and financial services. The business is spread across 15 countries with over 100 manufacturing units in India and overseas including Thailand, Indonesia, Malaysia, Philippines, Egypt and Canada. Trading operations span across Singapore, Dubai, UK, USA, South Africa, Tanzania, Burma and Russia. All the group’s units are accredited with the ISO 9002 certification and nine on them ISO 14001 certified.
AT&T is the largest telecommunication company in the world offering a complete range of communication services. AT&T started its operations in 1885 and is present in over 200 countries. In the United States – its parent country, AT&T Corp. is a leading – distance carrier, wireless operator and provider of video data and Internet services. In the recent past, AT&T Corp. acquired Media One, one of the largest cable companies in USA, while Media one had acquired US West, a US based telecom operator.
In India, US West is the joint venture partner of BPL for providing cellular services in the circles of Maharastra, Kerala and Tamilnadu. As a result of this consolidation, AT&T has
33 direct interest in cellular services in Maharastra through Birla AT&T Communications Limited and an indirect Internet through Media one in BPL Cellular Limited.
. TECHNOLOGY PARTNERS:
Idea welcomes all businesses and individuals interested in partnering with it to enhance and strengthen the idea’s products and services portfolios.
Some of the idea’s technology and content partners: Nokia, Ericsson, schlumberger sema, NDTV, indiatimes, rediff, C2W.
. IDENTITY:
Idea Cellular's antecedents date back to 1995, when the Aditya Birla Group and AT&T (through Birla AT&T Communications – Maharastra & Gujarat circle) and the Tata Group (through Tata Cellular - Andhra Pradesh circle) set up cellular networks. Both the above company was amongst the first company to commercially start operation in circles other than metros and achieve financial closure in Indian Telecom industry.
In the year 2000, the historic path-breaking merger of Tata Cellular with Birla AT&T Communications and the subsequent acquisition of RPG Cellular - (Madhya Pradesh circle) in the year 2001 - helped take the company to aim even further and led to the formation of Birla Tata AT&T Limited.
In year 2001, company won fourth cellular license for Delhi metro circle and in year 2002 company introduced common brand “!DEA” and changed the name to IDEA Cellular Limited
Since then, there has been no looking back for IDEA Cellular. The company launches Delhi operations in year 2002 and added a record 100,000 subscriber within one month of launch.
34 In 2003, the company achieved the largest financial closure in Indian Telecom for its entire circle. In 2004, the company entered into definitive agreement to acquire Escotel Mobile Communications (existing operator in Haryana, Kerla and UP (W)) and Escorts Telecommunications (cellular licensee holder for UP (E), Himachal Pradesh and Rajasthan)
. CORE BELIEF:
"Attracting and nurturing talent has become the single most dominant force in business."
Idea - the very name suggests innovation. Innovation, which comes from intelligence, talent, skills, involvement, hard work and continuous learning.
The company continuously harnesses the power of wireless revolution to provide world- class products and services. It aims at responding to customer needs proactively by anticipating requirements and providing ready solutions.
Idea Cellular draws inspiration from the loyalty of its subscribers to keep raising the bar, to shape the future, and to change and enrich the life of each and every member of its ever-growing family of subscribers.
. THE MEDIA:
“Stay Connected” is a brand promise that looks at the key purpose of the mobile telephony. It converges with the tangible requirement of ‘network depth’ and at the same time, reflects the eternal human need for bonding, kinsman ship and relationship forming. This new brand campaign enables Idea to own the biggest category benefit of “keeping people connected”, through a simple, unique and a likable expression of connectivity. And it makes consumers aware that “no one connects better than Idea.”
35 Slated to run through 2004, the campaign utilizes all relevant mainline media to propagate the message to its audiences with 60-seconds commercial and its various edits, print campaign and its outdoor publicity. Apart from it various innovative media/events has been used to further strengthen the message.
For example- at local level Idea has exploited the Indo-Pak series by screening the one- day matches in popular places under the theme of stay connected.
. THE PRODUCTS:
The Post-paid Card:
The regular card as it is more popularly known as. The AT&T postpaid card has been rechristened as the Idea Postpaid card.
The Pre-paid Card:
The Idea Cellular Pre-paid card is called as “IDEA CHITCHAT”
.
36 “IDEA CHITCHAT”
IDEA Chitchat is a ready to talk cellular services. It runs on the state-of-the-art Intelligent Network, comes with world class features like all handset compatibility, therefore helping you to control your expenses too. It lets you make and receive local, national and international calls instantly. MISSION STATEMENT:
“Through continuous innovation Idea promises to liberate customers from the shackles of time and space”.
(Innovate, Stimulate, Liberate….)
37 Products of Idea
Idea Postpaid Entry Pricing (W.E.F. 6th Nov 07) All the Bill Plans Activation Novo ! 99 Easy 499 Edge 299 Edge 199 Easy 599 MY Club 200 200 200 200 200 200 Activation Activation Activation Activation Activation Activation Cost Cost Cost Cost Cost Cost Prepaid to Postpaid 100 Plan 100 Plan 100 Plan 100 Plan 100 Plan 100 Plan Enrolment Enrolment Enrolment Enrolment Enrolment Enrolment Fees Fees Fees Fees Fees Fees Total:300 Total:300 Total:300 Total:300 Total:300 Total:300 200 200 200 200 200 200 Activation Activation Activation Activation Activation Activation Cost Cost Cost Cost Cost Cost Add-on Nil Plan Nil Plan Nil Plan Nil Plan Nil Plan Nil Plan Connection Enrolment Enrolment Enrolment Enrolment Enrolment Enrolment Fees Fees Fees Fees Fees Fees Total:200 Total:200 Total:200 Total:200 Total:200 Total:200
Benefits Credit on Credit on 299 199 Local Usage of Usage of 0.10 to My Minutes Minutes 100min Rs.499 on Rs.599 Club/My Benefits Idea to Idea to M2M Local and on Local Gan Series Idea Idea Free STD Call and STD Numbers, Free Free Usage Usage
38 Idea Prepaid Regular Plan - Total - Rs. 99/- - MRP of Starter Pack - Rs. 99/- Entry Level Cost - Validity Period - 0 Days. - TalkTime - Rs. 0/-. Recharge Vouchers (RV) valuing - Any Processing Charges [Inclusive of SIM + Processing fee + 12.36% Service Tax in INR] Monthly free call allowances NIL Duration of plan Open till further notice This interactive SMS based Self-service application enables the prepaid subscriber to know their product related information , recharge voucher related information , what is hottest or latest Information Just an SMS away promo and what is my account information specific to subscriber related information, send sms "CARE" to 4444.
*SMS to 4444 toll free from Home network. Any taxes, in addition to the above NIL
Local Charges (Rs.) Fixed WLL Cellular Local Idea to idea Nil Nil Re 1/- Re 1/- per Re 1/- per Re 1/- per Local GSM, Landline and WLL minute minute minute STD Anywhere in India 2.75 2.75 2.75 STD Pack @ Rs. 40/- Per 1.50 1.50 1.50 Month ISD Rates US, Canada, Europe, (Fixed), 6.40 6.40 6.40 Singapore & Hong Kong
39 Other countries 9.19 9.19 9.19 Cuba, Sao Tome & Principe, Guinea Bissau, Diego Garcia, Nauru,Solomon Islands, 49.20 49.20 49.20 Vanuatu, Cook Islands, Tuvalu, Tokelau, Norfolk Island, Sakhalin
40 Additional value added services:
Night Talk Rs. 30/- Local Idea to Idea 0.09/ min Other Local Mobiles 0.50 and LL Rs. 1/- Outgoing (11pm to 8am) To Activate Send sms : "Night" to 4444. To Deactivation Send sms 'NONIGHT" to 4444. Cell to Cell ( Local Mobiles) Rs. 30/- Rs 1 Per Minute to Local Mobiles To Activate Send sms : "CC" to 4444. Outgoing To Deactivation Send sms 'NOCC" to 4444. STD Pack @ Rs. 40/- Rs. 1.50/- For all STD calls. To Activate Send sms : "STD" to 4444. To Deactivation Send sms 'NOSTD" to 4444. I2I Pack Rental - Rs. 25/- 0.30 Paise for Local Idea to Idea Calling. To Activate Send sms : "I2I" to 4444. To Deactivation Send sms 'NOI2I" to 4444.
41 Recharge Vouchers (RV) valuing - [Inclusive of SIM + Processing fee + 12.36% service tax in INR+]
MRP Range Service Tax Rs. Pro Fee Talktime Range Rs Validity Remarks Rs Rs Days From To From To From To 10 10 1.10 1.10 2 6.90 6.90 0 SMS Voucher: Free 150 local 34 34 3.74 3.74 30.26 0 0 0 SMS to be consumed within 30 days 50 50 5.50 5.50 5 39.50 39.50 0 Value Voucher with Tariff Benefit- Local I2I@30p, 55 55 6.05 6.05 48.95 0 0 0 M2M@50p & LL@Re1. Tariff valid for 30 days 70 70 7.70 7.70 2.30 60 60 0 Value Voucher with Tariff Benefit- 75 75 8.25 8.25 66.75 0 0 0 STD [email protected]. Tariff valid for 30 days 88 88 9.68 9.68 78.32 0 0 0 SMS Voucher: Free 1000 local SMS to be
42 consumed within 30 days 100 100 11.00 11.00 10 79 79 0 Value Voucher with Tariff Benefit- 120 120 13.20 13.20 106.80 0 0 0 Local Calls @ Re.1/min. Tariff valid for 365 days 199 199 21.89 21.89 127 50 50 60 220 220 24.20 24.20 110 85.80 85.80 15 350 350 38.50 38.50 125 186.50 186.50 30 550 550 60.50 60.50 125 364.50 364.50 30 1100 1100 121.00 121.00 150 829.00 829.00 75 2200 2200 242.01 242.01 150 1807.99 1807.99 180 3300 3300 363.01 363.01 0 2936.99 2936.99 365
Michael Porter’s “Five Forces” Model
He has identified five forces that determine the state of competitiveness in a market. The forces also influence the profitability of firms already in the industry. These five forces are summarized in the above diagram. (The fifth force is the degree of rivalry that
43 currently exists among firms already in the industry.) Here are a few additional details about Porter’s model.
1. Barriers to Entry
Economies of scale mean larger firms can produce at lower cost per unit. This tends to lower the number of firms in the industry and reduce competition.
44 Proprietary product differences are the characteristics that make a product appeal to a large market segment. But only those characteristics that cannot be copied at low cost by competitors (“proprietary”) will be a barrier to entry.
Brand identity is the extent to which buyers take the brand name into account when making purchase decisions.
Capital requirements are the total cost of acquiring the plant and equipment necessary to begin operating in the industry.
2. Bargaining Power of Suppliers
Differentiation of inputs means that different suppliers provide different input characteristics for inputs that basically do the same job. The greater the degrees of differentiation among suppliers the more bargaining power suppliers have.
45 Presence [and availability] of substitute inputs means the extent to which it is possible to switch to another supplier for an input (or a close substitute). The greater the number and closeness of substitute inputs the lower the bargaining power of suppliers.
Supplier concentration is the degree of competition among suppliers. Usually the more concentrated the industry, the fewer suppliers and the more control suppliers have over the prices they charge. Greater supplier concentration often means greater supplier bargaining power.
Cost relative to total purchases in the industry refers to the amount your firm spends on inputs from a particular supplier compared to the total revenue of all firms in the supplier’s industry. Lower expenditure usually implies more bargaining power for the supplier. The buyer’s bargaining power falls as spending with a particular firm falls simply because the buyer’s business isn’t as important to the supplier.
46 3. Threat of Substitutes
Relative price performance of substitutes is the price of substitutes for your output compared to the price you are charging. If the price of substitutes is lower, the competitive threat increases as the price differential increases.
Switching costs refers to the cost to the buyer of switching from one seller to another. The greater the switching costs the lower the threat of substitutes because buyers have a stronger incentive to stick with a single supplier.
Buyer propensity to substitute is the extent to which buyers are willing to consider other suppliers.
47 4. Bargaining Power of Buyers
Buyer concentration versus firm concentration refers to the extent of concentration in the buyer’s industry compared to the extent of concentration in your industry. The more concentrated the buyer’s industry relative to your industry the greater the bargaining power of buyers.
Buyer volume is the number of units of your product the buyer purchases from all sources. The greater buyer volume compared to the quantity purchased from you, the greater the bargaining power of buyers.
Buyer information is the state of information buyers have about your industry. The more information buyers have about your industry the more bargaining power buyers have. Substitute products means the number and closeness of substitutes available for your product. The greater the number of available substitutes the more bargaining power buyers have.
Price of your product relative to total expenditures on all products. This is the fraction of total expenditure buyers spend on your products. The greater the fraction of total expenditure the greater the price elasticity of demand and the more bargaining power buyers have.
Product differences refers to the degree of differentiation between your product and other products in the market. The greater the differentiation of your product, the lower its price elasticity of demand and the less bargaining power buyers have.
Brand identity is the extent to which your brand name is recognized and sought out by buyers. The stronger your brand identity the less bargaining power buyers have.
48 5. Rivalry Determinants [with other firms in the industry]
Industry growth is the speed at which the market is growing. Rapidly growing markets provide less incentive for firms to aggressively compete with each other.
Intermittent overcapacity is the amount demand fluctuates during a year (or over a business cycle) and the impact lower demand has on how efficiently the firm is able to use its plant and equipment. In some industries a decrease in demand leads to significant idle productive capacity, while other industries are not as susceptible to this factor. More intense rivalry is likely to be fostered in an industry in which firms face either large amounts of unused plant capacity or face frequent idle capacity.
Concentration and balance is the number of firms in the industry and their relative size. An industry in which a few firms supply most of the output is likely to not be very competitive because the large firms will control the market.
49 RESEARCH DESIGN
“Assessment of Distribution Network of Idea in Ahmedabad”
Objectives of Project:
To assess market share of the Idea vis-à-vis other competitor. To analyze effectiveness of idea’s representative vis-à-vis other competitor. To study and analyze the reach of Idea’s distribution network vis-à-vis other competitor. To assess the distribution depth of Idea vis-à-vis other competitor.
Research Methodology:
Type of the study The type of study we will use would be Descriptive study.
Sampling design
Universe of Research: The research would be conducted in Ahmedabad. So the universe for the study would be Ahmedabad.
50 Size of the sample: The sample would include the following: . Pre paid Dealers 100
Sampling procedure: The sampling procedure would be stratified random sampling.
Data sources : . The data to be used for the study would be both secondary and primary data. . The secondary data would be necessary to study the distribution Network. It would be obtained from Database of the company, web sites etc. . The primary data would be obtained through survey of pre-paid dealers of idea cellular, which would be conducted through personal interview & filling-up of the questionnaires.
Research instrument: The research instrument would be an interview schedule with filling up the questionnaires. It would be consist of 10 questions to keep it short.
Pilot Testing:
We are conducted a pilot test of about 12 pre-paid retailers of idea cellular and according to the need the questionnaire is revised as per the response received.
51 The changes as per under:
• The FOD segment is later on included • The value of recharge voucher is made more segregated. • Time period of visit of distribution is also made more segregated.
52 DATA ANALYSIS & INTERPRETATION
STATISTICAL METHOD USED FOR TESTING:
Area wise division
For the simplicity of the analysis, we have divided the whole Ahmedabad in to main four areas. The total area of the Ahmedabad is 42, and those are base on the different pin codes of Ahmedabad.
• Area-1 (South-west region) (144 retailers) o Ellisbridge o Jivaraj park o Juhapura o Paldi o Polytechnic o Amraiwadi o Behrampura o Isanpur o Maninagar o Narol o Shah-alam o Vatva • Area-2 (North-west region) (120 retailers) o Ranip o Gandhi Ashram o Sabarmati o Thal-tej
53 o Bodakdev o Naran pura o Navjivan o Navarangpura o Memnagar o Ghatlodia
• Area-3 (North-east region) (116 retailers) o Airport o Cantonment o Civil o Girdharnagar o Krishnanagar o Kubernagar o Naroda o Saijpur-bogha o Sardarnagar
• Area-4 (Middle east region) (120 retailers) o Bapunagar o Khodiarnagar o Odhav o Kalupur o Gomtipur o Rakhial o Saraspur o Thakkar bapa nagar o Kathwada o Jantanagar
54 1. Availability of the cards with FOD:
Total Ahmedabad: The total no. of the retails is 100.
Airtel Bsnl Vodafone Idea Reliance Tata Cards 96 40 98 96 64 34 FOD 0 0 0 0 0 0
55 Availbility of cards and FOD
120 100
s 80 r
e Cards l i 60 a
t FOD e
r 40 20 0 l e l e a e a t sn n e c t ir fo d n a A B a I ia T d l o e V R company
Conclusion: From the above chart, we can conclude that the availability of the idea and hutch is almost same and highest among all the competitors. In case of the FOD, FOD is not sell by the retailer. Through there are few sellers of FOD but we can not find a single one.
Suggestion: From the above results we suggest to the company that they have to meet to the retailer and convince them to sell the FOD cards. Because there is an opportunity to garb the more market share.
56 2. Age of the retailer (Total experience):
Total Ahmedabad: The total no. of the retails are 100.
More than 9 Less then 1 year 1 to 3 years 3 to 6 years 6 to 9 years years Age 41 51 7 1 0
57 Age
1% 7% 0% Less then 1 year 41% 1 to 3 years 3 to 6 years 51% 6 to 9 years More than 9 years
Conclusion: In general, from the above graphical representation, we can conclude that, the most of the retails belonging the range of the 1 to 3 years of the experience. It shows that the overall distribution reach and the mobile users in the city of Ahmedabad were increased in last 3 years.
Suggestion: We find that the most of the retailer belonging the range of 1 to 3 years of experience. But company should approach to more experienced shopkeeper because they are the known retailer of the particular area. And also they are at there from many years so there are highly chances to sell more cards.
58 3. Target audience
Total Ahmedabad: The total no. of the retails are 100.
Airtel Bsnl Vodafone Idea Reliance Tata Students 29 2 12 22 11 0
59 Students
35 30 25 20 Students 15 10 5 0
l l e n e ea e ta irt s n d c a A B o I n T af lia od e V R Company
Conclusion: From the above presentation, we can conclude that, in Ahmedabad the usage of the maximum cards by students are of the Airtel. The idea is on the second position in usage by students.
Suggestion: Students are the maximum user of this service. But in today’s scenario there are increases in working women so company can directly approach to locality service women group. Yet not single companies do this so we have great opportunity to sell more cards of our company.
60 4 Trade Scheme
Total Ahmedabad: The total no. of the retails are 100.
Airtel Bsnl Vodafone Idea Reliance Tata Trade Scheme 96 38 99 98 64 33 Total 97 40 99 99 64 33
61 Trade scheme
120 100
r 80 e
l Trade Scheme i
a 60 t
e Total
R 40 20 0
l e nl e a e ta rt s n e c a i B fo Id n T A a lia od e V R Company
Consumer Scheme
Total Ahmedabad: The total no. of the retails are 100.
Airtel Bsnl Vodafone Idea Reliance Tata Consumer Scheme 96 38 99 99 64 34 Total 96 40 99 99 64 34
62 Consumer scheme
120 100 Consumer
r 80 e
l Scheme i
a 60 t
e Total
R 40 20 0
l l e n e a e ta rt s n e c a i B fo Id n T A a ia d l o e V R Company
Conclusion: From the above analysis, we can conclude that, in 98% cases, the all retailers are aware about the consumer schemes and the trade schemes. The distributors make them aware about the all the schemes available in the market.
Suggestion: The company performs well in consumer scheme and trade scheme. So no recommendation for consumer scheme and trade scheme.
63 5. Source of purchasing the cards:
Total Ahmedabad: The total no. of the retails are 100.
From company’s sales person From other dealers Airtel 0 97 Bsnl 0 40 Vodafone 0 100 Idea 0 100 Reliance 0 71 Tata 0 74
64 Source of purchasing
120 100 80 From company’s r
e sales person l i 60 a t
e From other dealers
R 40 20 0
el nl e a e ta rt s n de c a i B fo I n T A a lia od e V R Company
Conclusion: From the above data, we can say that the all of the retailers purchase the prepaid cards from the other dealers because their distribution service is good and timely.
Suggestion: We find that most of the retailers purchase cards form the other distributors. In this case company should hire more employees who meet the retailers directly and sell the cards. By this way they can reduced the middle persons.
65 6. Analysis of all companies with different attributes:
Here, the total value is calculated on the basis of the rank given to them according to their performance. (6 to 1 rank. 6 for best and 1 for worst).
Network:
Total Ahmedabad: The total no. of the retailer 100.
Airtel Bsnl Vodafone Idea Reliance Tata Total Value 81 39 92 71 51 26 Average 4.856 2.33 5.532 4.688 3.074 1.52
66 Network
6
5
4
3 Average
2
1
0 Airtel Bsnl Vodafone Idea Reliance Tata
Conclusion: As far as network is consult, the Vodafone is number one. The research shows that the network is very much stronger. The idea’s position is third and then comes Reliance and Tata.
Suggestion: Idea’s position is third in network. If idea wants to come forward in network it has to increase its network capacity in some area.
67 Company Scheme:
Total Ahmedabad: The total no. of the retails are 100.
Airtel Bsnl Vodafone Idea Reliance Tata Total Value 90 56 93 61 58 44 Average 5.006 3.685 5.658 4.492 3.47 3.152
Company scheme
6
5
4
3 Average
2
1
0 Airtel Bsnl Vodafone Idea Reliance Tata
68 Conclusion: As far as consumer’s scheme is consult, the Vodafone is number one. The research shows that people are much satisfies with the Vodafone’s schemes. The Airtel’s position is second and then comes Idea, BSNL And Reliance.
Suggestion: We found that Idea is lacking in consumer schemes so company has to increase its consumer schemes.
69 Trade Scheme:
Total Ahmedabad: The total no. of the retails are 100.
Airtel Bsnl vodafone Idea Reliance Tata Total Value 81 72 84 82 76 65 Average 4.586 4.156 4.962 4.759 4.267 4.043
Trade scheme
6
5
4
3 Average
2
1
0 Airtel Bsnl vodafone Idea Reliance Tata
Conclusion:
70 As far as Trading schemes are consulting, the Airtel and Idea has acquired the same position almost. The research shows that retailers are much satisfies with the Airtel and idea’s trading schemes. The idea’s position is second and then comes Hutch And Reliance.
Suggestion: The trading scheme of Idea is better then other companies. So company has to keep this path.
Distribution Services:
71 Total Ahmedabad: The total no. of the retails are 100.
Airtel Bsnl vodafone Idea Reliance Tata Total Value 84 59 89 87 82 79 Average 4.946 3.573 5.142 5.027 4.894 4.684
Distribution service
6
5
4
3 Average
2
1
0 Airtel Bsnl vodafone Idea Reliance Tata
Conclusion:
72 As far as distributor’s services consult, the Idea has acquired the first position. The research shows that retailers are much satisfies with the idea’s distributor’s services. The Airtel’s position is second and then comes Hutch And Reliance.
Suggestions: The distribution service of Idea is good so there is no suggestions for the distributions services.
Call Center Services:
73 Total Ahmedabad: The total no. of the retails are 100.
Airtel Bsnl Vodafone Idea Reliance Tata Total Value 95 89 96 94 93 91 Average 5.764 5.357 5.862 5.694 5.628 5.532
Call centre service
5.9 5.8 5.7 5.6 5.5 Average 5.4 5.3 5.2 5.1 Airtel Bsnl Vodafone Idea Reliance Tata
Conclusion:
74 As far as call center services consult, the Hutch has acquired the first position. The research shows that the hutch provides the better call center services then others. The Airtel’s position is second and then comes Idea And Reliance.
Suggestion: In companies call center service, Idea has to need of improve its call center service, by acquiring new technology. So it can compete other existing competitor.
The whole comparative analysis of all companies.
75 Analysis of all companies
Airtel Bsnl Vodafone Idea Reliance Tata
7 6 5 4 3 2 1 0
rk e e e e o m ic ic m e v v tw e h r r e h c e e c s s s N s n e y e o tr n d ti n a ra u e p T ib c m tr ll o is a C D C
Analysis of no of cards selling by retailers in Ahmedabad
76 Area-1 (South-west region)
0/recharge 1 to 5 6 to 25 26 to 50 Above 50 Airtel 11 12 2 1 0 Bsnl 10 0 0 0 0 Vodafone 3 22 3 0 0 Idea 7 18 4 0 0 Reliance 10 6 3 0 0 Tata 5 4 0 0 0
25
20 0/recharge 15 1 to 5 6 to 25 10 26 to 50 Above 50 5
0 l e l e a e a t sn n e c t ir fo Id n a A B a ia T d l o e V R
Area-2 (North-west region)
77 0/recharge 1 to 5 6 to 25 26 to 50 Above 50 Airtel 9 12 1 0 0 Bsnl 8 0 0 0 0 Vodafone 2 18 3 1 0 Idea 8 12 1 0 0 Reliance 10 3 0 0 0 Tata 7 1 0 0 0
20 18 16 0/recharge 14 12 1 to 5 10 6 to 25 8 26 to 50 6 Above 50 4 2 0
el nl e a e ta rt s n de c a i B fo I n T A a lia od e V R
Area-3 (North-east region)
0/recharge 1 to 5 6 to 25 26 to 50 Above 50 Airtel 2 16 4 0 0 Bsnl 9 0 0 0 0 Vodafone 2 17 3 1 0
78 Idea 2 16 5 0 0 Reliance 3 10 1 0 0 Tata 2 4 0 0 0
18 16 14 0/recharge 12 1 to 5 10 6 to 25 8 26 to 50 6 4 Above 50 2 0
l e nl e a e ta rt s n e c a i B fo Id n T A a lia od e V R
Area-4 (Middle-east region)
0/recharge 1 to 5 6 to 25 26 to 50 Above 50 Airtel 0 17 6 0 0 Bsnl 12 0 0 0 0 Vodafone 1 19 4 0 0 Idea 1 17 6 0 0 Reliance 1 12 3 0 0 Tata 0 8 0 0 0
79 20 18 16 0/recharge 14 12 1 to 5 10 6 to 25 8 26 to 50 6 Above 50 4 2 0
l e nl e a e ta rt s n e c a i B fo Id n T A a lia od e V R
Analysis of recharge value sold
Area-1 (South-west region)
5001 to 10001 to Below 5000 10000 25000 25001 to 50000 Above 50000 Airtel 24 2 2 0 0 Bsnl 10 0 0 0 0 Vodafone 17 8 3 0 0 Idea 21 5 2 0 0 Reliance 15 4 0 0 0 Tata 9 1 0 0 0
80 30
25 Below 5000 20 5001 to 10000 15 10001 to 25000 25001 to 50000 10 Above 50000 5
0
el nl e a e ta rt s n de c a i B fo I n T A a lia od e V R
Area-2 (North-west region)
5001 to 10001 to Below 5000 10000 25000 25001 to 50000 Above 50000 Airtel 19 2 0 0 0 Bsnl 8 0 0 0 0 vodafone 12 10 2 0 0 Idea 17 5 1 0 0 Reliance 13 0 0 0 0 Tata 8 0 0 0 0
81 20 18 16 Below 5000 14 12 5001 to 10000 10 10001 to 25000 8 25001 to 50000 6 Above 50000 4 2 0
l l e a a te sn n e ce at ir B fo Id n T A a lia d e vo R
Area-3 (North-east region)
5001 to 10001 to Below 5000 10000 25000 25001 to 50000 Above 50000 Airtel 17 2 3 0 0 Bsnl 9 0 0 0 0 Vodafone 17 3 2 0 0 Idea 10 3 4 0 0 Reliance 10 3 0 0 0 Tata 6 0 0 0 0
82 18 16 14 Below 5000 12 5001 to 10000 10 10001 to 25000 8 25001 to 50000 6 4 Above 50000 2 0
l e nl e a e ta rt s n de c a i B fo I n T A a lia od e V R
Area-4 (Middle-east region)
5001 to 10001 to Below 5000 10000 25000 25001 to 50000 Above 50000 Airtel 16 2 5 0 0 Bsnl 12 0 0 0 0 Vodafone 17 3 3 0 0 Idea 16 4 3 0 0 Reliance 12 3 2 0 0 Tata 8 1 0 0 0
83 18 16 14 Below 5000 12 5001 to 10000 10 10001 to 25000 8 25001 to 50000 6 4 Above 50000 2 0
el nl e a e ta rt s n de c a i B fo I n T A a lia od e V R
9. Sales person visit (Efficiency of Salesman Of Distributor)
Area-1 (South-east region)
More than Not at all Once Twice twice visited Airtel 2 8 18 0 Bsnl 1 4 0 5 Vodafone 1 10 18 0 Idea 2 9 18 0 Reliance 3 5 10 0 Tata 1 5 3 0
84 20 18 16 14 Once 12 Twice 10 8 More than twice 6 Not at all visited 4 2 0 l e l e a e a t sn n e c t ir fo Id n a A B a ia T d l o e V R
Conclusion: From the above graphical representation, we can conclude that the efficiency of sales person of Idea is highest, closely followed by Airtel and Vodafone. So all three companies are much focus for their distributor efficiency.
Area-2 (North-west region)
More than Not at all Once Twice twice visited Airtel 3 10 9 0 Bsnl 2 3 1 3 Vodafone 2 10 11 0 Idea 2 10 10 0 Reliance 3 5 6 0 Tata 2 6 1 0
85 12
10
8 Once Twice 6 More than twice 4 Not at all visited 2
0 l e l e a e a t sn n e c t ir fo Id n a A B a ia T d l o e V R
Conclusion: From the above graphical representation, we can conclude that the efficiency of sales person of Vodafone is highest, closely followed by Idea and Airtel. The reliance is also come up with good strength for distribution after those three. So all three companies are much focus for their distributor efficiency.
Area-3 (north-east region)
More than Not at all Once Twice twice visited Airtel 0 3 20 0 Bsnl 0 0 0 9 Vodafone 0 3 19 0 Idea 0 3 20 0 Reliance 0 2 12 0 Tata 0 4 2 0
86 25
20 Once 15 Twice
10 More than twice Not at all visited 5
0 l e l e a e a t sn n e c t ir fo Id n a A B a ia T d l o e V R
Conclusion: From the above graphical representation, we can conclude that the efficiency of sales person of Airtel and Idea are almost same, closely followed by Vodafone. The reliance is also come up with good strength for distribution after those three. So all three companies are much focus for their distributor efficiency. Area-4 (Middle-east region)
More than Not at all Once Twice twice visited Airtel 0 1 22 0 Bsnl 1 0 0 12 Vodafone 0 1 23 0 Idea 0 1 23 0 Reliance 0 1 3 0 Tata 0 3 5 1
87 25
20 Once 15 Twice
10 More than twice Not at all visited 5
0 l e l e a e a t sn n e c t ir fo Id n a A B a ia T d l o e V R
Conclusion: From the above graphical representation, we can conclude that the efficiency of sales person of Airtel and Idea are almost same, closely followed by Vodafone. But with comparison of other three region the performance of all representative is somewhat low. So all three companies are much focus for their distributor efficiency.
10. Manager’s visit (Efficiency of executives & Managers)
Area-1(South-west region)
More than Not at all Once Twice twice visited Airtel 7 0 0 21 Bsnl 0 0 0 10 Vodafone 8 0 0 20 Idea 9 0 0 20 Reliance 7 0 0 12 Tata 1 0 0 8
88 25
20 Once 15 Twice
10 More than twice Not at all visited 5
0 l e l e a e a t sn n e c t ir fo Id n a A B a ia T d l o e V R
Conclusion: From the above graphical representation, we can conclude that the efficiency of Executives & managers of Vodafone and Idea are almost same, closely followed by Airtel. So all three companies are much focus for their distributor efficiency.
Area-2(North-west region)
More than Not at all Once Twice twice visited Airtel 7 0 1 15 Bsnl 0 0 0 8 Vodafone 8 0 1 15 Idea 9 0 1 14 Reliance 4 0 0 9 Tata 1 0 0 7 16 14 12 Once 10 Twice 8 More than twice 6 Not at all visited 4 2 0 l e l e a e a t sn n e c t 89 ir fo Id n a A B a ia T d l o e V R Conclusion: From the above graphical representation, we can conclude that the efficiency of Executives & managers of Vodafone is highest, closely followed by Idea and Airtel. But with comparison of other regions the performance of all representatives is somewhat low.
Area-3 (North-east region)
More than Not at all Once Twice twice visited Airtel 9 0 0 13 Bsnl 0 0 0 9 Vodafone 4 0 0 19 Idea 9 0 1 14 Reliance 7 0 0 6 Tata 1 0 0 5
90 20 18 16 14 Once 12 Twice 10 8 More than twice 6 Not at all visited 4 2 0 l e l e a e a t sn n e c t ir fo Id n a A B a ia T d l o e V R
Conclusion: From the above graphical representation, we can conclude that the efficiency of Executives & managers of Idea and Airtel are almost same. Vodafone is leader in this area. But with comparison of other regions the performance of all representatives is somewhat low. Area-4(Middle-east region)
More than Not at all Once Twice twice visited Airtel 9 0 0 14 Bsnl 0 0 0 12 Vodafone 4 0 0 19 Idea 10 0 0 14 Reliance 10 0 0 8 Tata 2 0 0 7
91 20 18 16 14 Once 12 Twice 10 8 More than twice 6 Not at all visited 4 2 0 l e l e a e a t sn n e c t ir fo Id n a A B a ia T d l o e V R
Conclusion: From the above graphical representation, we can conclude that the efficiency of Executives & managers of Idea is higher, closely followed by Hutch and Airtel. But with comparison of other regions the performance of all representatives is somewhat low.
Limitations & Scope of Research
The Research study conducted herewith is restricted to the market of Ahmedabad only.
Some limitations in terms of research resources and manpower couple with the fact that the sample size and the quality of respondents were limited due to the constraint of time, hence there would be some variance from the actual scenario. This research study would provide only a micro insight into the dynamic factors that rule the Ahmedabad telecom distribution network.
To this extent, we would like to state that the research should not be treated as conclusive and there is a further scope of improvement for research. A wider sample base and a
92 broader geographical territory (preferably a Circle of Telecom) would be more effective in drawing a relatively more accurate research picture.
This has been a very satisfying research experience for the two of us and we would like, if possible to extend and compile a macro profile for this research topic.
Findings
From the above data and the analysis we have made the final conclusion is as under:
Our main objectives of the project are:
To assess market share of the Idea vis-à-vis other competitor.
To analyze effectiveness of idea’s representative vis-à-vis other competitor.
93 To study and analyze the reach of Idea’s distribution network vis-à-vis other competitor.
To assess the distribution depth of Idea vis-à-vis other competitor.
Conclusion:
Idea is the major competitor in the Ahmedabad and has a leading position in many areas like distribution reach and efficiency of distributor.
As far as the reach of Idea’s distribution network is consult the idea has a leading position. For distribution of the cards, the services and the reach are good enough. There is some problem with some far areas but overall performance is focused.
As far as the efficiency is consult the idea has a moderate position. For distribution of the cards and the efficiency of the executives and the managers are good enough. The work is focused.
Recommendations
As far as network is consult, the performance of the Idea is weak, as compared to the Vodafone and Airtel and Reliance. So, Try to improve on such factor via increasing a technical support.
Same problem is with call center, as far as customer care services are consulted, the performance is not up to the mark again. Compare to the Idea, Vodafone and Airtel has comparatively good performance. So, idea has to work upon it and try to make it more efficient with training programs.
94 The problem existed with the Middle East and some areas of Southwest region. The retailers are quite dissatisfied with the distributor services. So, particularly for those areas the frequency of visits and the quality of meetings of sales persons should be increased.
The performance of Idea is good, in particularly western part of the city, but still in other areas like eastern part, the need of the more awareness campain is required.
Make a good relationship with retailers. Need to show and maintain great company’s support. Which makes retailers themselves sell and promote companys’cards. And the same helps to create better public image.
The impact of Idea chitchat on customers is not powerful compared to Vodafone so, try it to be strong by more promotions from the ways that has powerful impact on public’s mind like Radio Mirchi, local cable and newspapers.
Organizing of retail events (Retail Meet) that are opening a new Retail club.
To expand the market the company should not only concentrate over the urban areas, but also have look at the uncaptured rural market. And establish good offers considering the villagers’ requirements.
Try to get the trust of customer by providing better services and attractive schemes. Every customer wants satisfaction from the product so give him or her as much convenience as possible to make him or her permanent customer.
The retailer whosoever are of the more recharge voucher purchasers, should offered the extra benefits other than the regular one.
95 The problem is with the Network and the call center services. Idea should work upon the same and try to make it efficient with more technical support and training programs.
QUESTIONNAIRE
______Dear Sir/Madam,
Kindly extend your cooperation in filling this questionnaire and enable us to conduct the research successfully. Date: ______Retail Name: ______Road: ______Address: ______Pin Code: ______Type of the shop: 1) Telecom shop
96 2) General / Provision store 3) Grocery shop 4) Pan shop 5) S.T.D. booth 6) Gift shop 7) Stationary shop 8) Others, please specify ______1. Which companies pre-paid cards, are you selling?
Cards FOD (a) Airtel (b) Bsnl (c) Vodafone (d) Idea (e) Reliance (f) Tata
2. Since how many years, you are in the business of selling pre-paid cards in the market? a) Less than 1 year b) 1 to 3 years c) 3 to 6 years d) 6 to 9 years e) More then 9 years
3. How many pre-paid cards of different companies you sell in a month?
97 0/Recharge 1 to 5 6 to 25 26 to 50 Above 50 (a) Airtel (b) Bsnl (c) Vodafone (d) Idea (e) Reliance (f) Tata
a) Idea _
4. What is the recharge value sold at your outlet per month (in rupees)?
Below 5001 to 10001 to 25001 to Above 5000 10000 25000 50000 50000 (a) Airtel (b) Bsnl (c) Vodafone (d) Idea (e) Reliance (f) Tata 5. From whom you purchase the pre-paid cards of different companies?
From company’s sales-person From other dealers (a) Airtel (b) Bsnl (c) Vodafone (d) Idea (e) Reliance (f) Tata
A) If from other dealers, than what is the reason?
Discount Credit Distributor’s services (a) Idea (b) Vodafone (c) Airtel (d) Bsnl (e) Reliance
98 (f) Tata
6. How frequently the salesman of distributor visits your shop in a week?
Once Twice More than Not at all twice visited (a) Airtel (b) Bsnl (c) Vodafone (d) Idea (e) Reliance (f) Tata
7. How frequently the company’s sales executives/manager visits your shop in a month?
Once Twice More than Not at all twice visited (a) Airtel (b) Bsnl (c) Vodafone (d) Idea (e) Reliance (f) Tata
8. Are you getting clearly and timely information from company’s sales representative about different schemes launched?
Yes No Trade Scheme (a) Airtel (b) Bsnl (c) Vodafone (d) Idea (e) Reliance (f) Tata
99 Yes No Consumer Scheme (a) Airtel (b) Bsnl (c)Vodafone (d) Idea (e) Reliance (f) Tata
9. Give the rank to the different companies, according to their performance in the different area. (Use 6 to 1 rank. 6 for best and 1 for worst). You cannot repeat ranks given once.
Airtel Bsnl Vodafone Idea Reliance Tata Network
100 Company schemes Trade schemes Distributor services Call center services
101 10. Who are the main buyers of the different company’s pre-paid cards?
Students Others (a) Airtel (b) Bsnl (c) Vodafone (d) Idea (e) Reliance (f) Tata
11. Please give your satisfaction level towards these companies.
Satisfied Unsatisfied Reason (a) Airtel (b) Bsnl (c) Vodafone (d) Idea (e) Reliance (f) Tata
102 Area of Ahmedabad with their Pin codes
Area Cod No. Air port 380012 Amraiwadi 380026 Behrampura 380022 Bapunagar 380024 Cantonment 380003 Civil Hospital 380016 Ellisbridge 380006 Gandhi Ashram 380027 Thakkar Bapa Nagar 382350 Ghatlodia 380061 Girdharnagar 380010 Isanpur 382443 Jantanagar 382449 Jivraj Park 380051 Juhapura 380055 Kathwada Maiz Product 382430 Khodiarnagar 382352 Krishna Nagar 382346 Kubernagar 382340 Maninagar 380008 Memnagar 380052 Naranpura 380013 Vatva 382440 Naroda 382330 Naroda Road 380025 Navjivan 380014 Navrangpura 380009 Narol 382405 Odhav 382410 Odhav Ind Estate 382415 Paldi 380007 Polytechnic 380015 Railway Pura 380002 Rajpur Gomtipur 380021 Rakhial Ind Estate 380023 Ranip 382480 Sabarmati 380005 Sabarmati Rly Colony 380019 Saijpur Bogha 382345 Saraspur 380018 Shah Alam Roza 380028 Shahibag 380004 Sardar Nagar 382475
103 Space Application Centre 380053 Thal Tel Road 380054
104 BIBLIOGRAPHY
The reference books were used for this report were:
Marketing Management (Eleventh Edition) by Philip Kotler published by Pearson Education
Business Research Methods (Eighth Edition) by Donald R. Cooper and Pamela S. Schindler published by Tata McGraw-Hill.
The web sites referred for the report were:
www.ideacellular.com www.idniantelecircle.com www.businssline.com/index.cellular .asp www.gov.in/telecomunication/grwoth.asp www.trai.com
105 Glossary
FOD: The advertising tools, which make show off the product. (Like wise, the stickers, shelf, artificial model etc,) The glosign boards of the different company are not included in the FOD.
106