A PROJECT REPORT

ON

RETAIL ANALYSIS FOR TATA TELESERVICES LTD.

- By,

Ms. REENA ALVA

MMS (SEMESTER III)

BATCH 2008-2010

PROJECT GUIDE - PROF. MR. VINOD PURI

UNIVERSITY OF MUMBAI

ATHARVA EDUCATIONAL TRUST’S

ATHARVA INSTITUTE OF MANAGEMENT STUDIES

MALAD- MARVE ROAD, CHARKOP NAKA

MALD (WEST), MUMBAI 400095.

DECLARATION

I Ms. Reena Alva of Atharva Institute of Management Studies pursuing Masters in Management Studies (Semester III) hereby declare that I have completed this project on “Retail Analysis for Tata Teleservices Ltd” for the academic period 2008-2010.

The information submitted is true and original to the best of my knowledge.

Signature of the Student

Date :

CERTIFICATE

This is to certify that Ms. Reena Alva of MMS (Semester III) Roll No. 4, from Atharva Institute of Management Studies, Specializing in Marketing has successfully completed the project titled “RETAIL ANALYSIS FOR TATA TELESERVICES LTD”, Under the project guidance of Prof. Mr Vinod Puri and has also conducted research with the help of materials, journals, internet, and other related sources in the partial fulfillment of the requirement of the Degree of Masters in Management Studies of the University of Mumbai, for the academic period 2008-2010.

ACKNOWLEDGEMENT

A good piece of work is not merely a result of the brain child of one alone. It is definitely shaped by many thoughts which guide, direct, advise and support. I believe “RETAIL ANALYSIS FOR TATA TELESERVICES LTD” is my piece of good work therefore…

I extend my special thanks to Mrs. Amruta Holkar my guide, mentor and my greatest support system who taught me to climb a step of the corporate ladder.

My special thanks to Mr. Sunil Rane Executive President AET and Prof. Mr. N S Rajan Dean AIMS for constantly guiding, motivating and encouraging me.

I also thank my project Guide Prof and Marketing Faculty Mr. Vinod Puri and for giving me his valuable inputs for the project.

I am thankful to all the teaching and non teaching staff for their continuous support and guidance.

And at last, never to be forgotten, my family and friends for their continuous support, encouragement and patients.

PREFACE

‘Retail Analysis for Tata Teleservices Ltd’ is a project report prepared to fulfill the requirement by the course on Master of Management Studies, University of Mumbai.

The internship program was carried out at Tata Teleservices Ltd, A, E & F Blocks, Voltas Premises, T.B. Kadam Marg, Chinchpokli, Mumbai – 400 033.

It was a great learning experience of having got the opportunity to work at the corporate office of TTSL.

An advantage of working with an organization’s corporate branch is that the scope of learning is widened. This is so because, the corporate office gives you an overview of the operations across the whole country and is not limited to a single area or region. Another such advantage is that you get a chance to interact with the associates across the country and learn the different operational trend at different regions.

I have made my best efforts to learn from my sources and compiling this project report. Hope this piece of work serves the purpose of a good project report.

INTRODUCTION

‘Retail Analysis for Tata Teleservices Ltd’ is intended towards providing efficient and relevant information on the retail operations of the TTSL stores across the country.

The retail network of TTSL is the largest branded retail presence amongst all telecom operators in the country and in fact, makes Tata Indicom the largest retailer in India in terms of number of stores under one brand name.

Retail Analysis is a part of the job assigned to TTSL, Mumbai corporate branch’s Branded Retail division. It is a very vital part of the retail and vending operations.

This project report is divided into 4 sections for better understanding.

Section 1 ‘THE INDUSTRY’ gives you an overview of the Telecom industry that TTSL is a part of.

Section 2 ‘THE COMPANY – TTSL’ talks about the successful and vast TATA GROUP and more specifically about TTSL, the child that operates the Telecom Sector of the TATA GROUP.

Section 3 ‘THE PROJECT RESEARCH’ – This section talks about the research work undertaken to build this project

Section 4 ‘FINDINGS AND INTERPRETATIONS’ – Gives a report on the findings of the problem areas with causes and conclusions.

All this followed by a few recommendations for the company that are thought to contribute to a better functioning and operations.

SECTION 1

THE INDUSTRY

THE INDIAN TELECOM INDUSTRY

The Indian telecommunications industry is one of the fastest growing in the world and India is projected to become the second largest telecom market globally by 2010.

India added 113.26 million new customers in 2008, the largest globally. In fact, in April 2008, India had already overtaken the US as the second largest wireless market. To put this growth into perspective, the country’s cellular base witnessed close to 50 per cent growth in 2008, with an average 9.5 million customers added every month. According to the Telecom Regulatory Authority of India (TRAI), the total number of telephone connections (mobile as well as fixed) had touched 385 million as of December 2008, taking the telecom penetration to over 33 per cent. This means that one out of every three Indians has a telephone connection, and telecom companies expect this pace of growth to continue in 2009 as well. "We are extremely bullish that the growth will continue in 2009. This year, the number of additions will be in excess of 130 million," according to T.V. Ramachandran , Director General, Cellular Operators Association of India (COAI), an industry body that represents all Global System for Mobile communications (GSM) players in India.

According to CRISIL Research estimates, eight infrastructure sectors, which include the telecom sector, are expected to draw more than US$ 345.28 billion investment in India by 2012.

With the rural India growth story unfolding, the telecom sector is likely to see tremendous growth in India's rural and semi-urban areas in the years to come. By 2012, India is likely to have 200 million rural telecom connections at a penetration rate of 25 per cent. And according to a report jointly released by Confederation of Indian Industry (CII) and Ernst& Young, by 2012, rural users will account for over 60 per cent of the total telecom subscriber base. According to Business Monitor International, India is currently adding 8-10 million mobile subscribers every month. It is estimated that by mid 2012, around half the country's population will own a mobile phone. This would translate into 612 million mobile subscribers, accounting for a tele-density of around 51 per cent by 2012.

It is projected that the industry will generate revenues worth US$ 43 billion in the current FY of 2009-10.

Evolution of the industry - Important Milestones

History of Indian Telecommunications

Year

1851 First operational land lines were laid by the government near Calcutta (seat of British power)

1881 Telephone service introduced in India

1883 Merger with the postal system

1923 Formation of Indian Radio Telegraph Company (IRT)

1932 Merger of ETC and IRT into the Indian Radio and Cable CommunicationCompany (IRCC)

1947 Nationalization of all foreign telecommunication companies to form thePosts, Telephone and Telegraph (PTT), a monopoly run by the government's Ministry of Communications

1985 Department of Telecommunications (DOT) established, an exclusiveprovider of domestic and long-distance service that would be its ownregulator (separate from the postal system)

1986 Conversion of DOT into two wholly government-owned companies: The Videsh Sanchar Nigam Limited (VSNL) for international telecommunications and Mahanagar Telephone Nigam Limited (MTNL) for service in metropolitan areas.

1997 Telecom Regulatory Authority of India created.

1999 Cellular Services are launched in India. New National Telecom Policy is adopted.

2000 DoT becomes a corporation, BSNL

Major Telecom 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 (Vodafone, Bharti Tele-Ventures,Escotel, Idea Cellular, BPL Mobile, Spice Communications)

BSNLOn October 1, 2000 the Department of Telecom Operations, Government of Indiabecame a corporation and was renamed Bharat Sanchar Nigam Limited (BSNL).BSNL is now India’s leading telecommunications company and the largest publicsector undertaking. It has a network of over 45 million lines covering 5000 townswith 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.

BHARTIEstablished 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 provide 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”.

MTNLMTNL 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 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 themarket 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 textilesconglomerate (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.Until recently, Reliance was permitted to provide only “limited mobility” servicesthrough its basic services license. However, it has now acquired a unified accesslicense 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 ($90million) 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.

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.

VODAFONEVodafone was formerly known as Hutch. Hutch’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 licenses. With the completion of the acquisition of BPL Mobile Cellular Limited in January 2006, it now provides mobile services in 16 of the 23 defined license areas across the country. Hutch 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.

Growth in Segments

According to a Frost& Sullivan industry analyst, by 2012, fixed line revenues are expected to touch US$ 12.2 billion while mobile revenues will reach US$ 39.8 billion in India. Fixed line capex is projected to be US$ 3.2 billion, and mobile capex is likely to touch US$ 9.4 billion. Further, according to a report by Gartner Inc., India is likely to remain the world's second largest wireless market after China in terms of mobile connections. According to recent data released by the COAI, Indian telecom operators added a total of 10.66 million wireless subscribers in December 2008. Further, the total wireless subscriber base stood at 346.89 million at the end of December 2008. The overall cellular services revenue in India is projected to grow at a CAGR of 18 per cent from 2008-2012 to exceed US$ 37 billion. Cellular market penetration will rise to 60.7 per cent from 19.8 per cent in 2007. The Indian telecommunications industry is on a growth trajectory with the GSM operators adding a record 9.3 million new subscribers in January 2009, taking the total user base to 267.5 million, according to the data released by COAI. However, this figure does not include the number of subscribers added by Reliance Telecom.In WiMax, India is slated to become the largest WiMAX market in the Asia-Pacific by 2013. A recent study sees India's WiMAX subscriber base hitting 14 million by 2013 and growing annually at nearly 130 per cent. And investments in WiMAX ventures are slated to top US$ 500 million in India, according to a report by US-based research and consulting firm, Strategy Analytics.

Value-Added Services Market

A report by market research firm IMRB stated that the mobile value-added services (MVAS) industry was valued at US$ 1.15 billion in June 2008, and is expected to grow rapidly at 70 per cent to touch US$ 1.96 billion by June 2009. Currently, MVAS in India accounts for 10 per cent of the operator's revenue, which is expected to reach 18 per cent by 2010. According to a study by Stanford University and consulting firm BDA, the Indian MVAS is poised to touch US$ 2.74 billion by 2010. Mobile advertising, which is an important VAS segment, offers great potential to become an important revenue source. Marketers are increasingly using MVAS as a step ahead of SMS-based marketing to sell soaps and shampoos, banking, insurance products and also entertainment services, and rural markets are proving to be very receptive for such marketing. Further, Venture Capitalists like Canaan Partners, Draper Fisher Juvertson, Helion, and Nexus India are also innovating with services like mobile payment options, advertising, voice-based SMS and satellite video streaming. According to Venture Intelligence, there were nine deals worth US$ 41 million in 2007 in the mobile VAS space, and till August 2008, seven deals worth US$ 91 million had already been finalised. Presently, mobile VAS has a US$ 700 million market with a 20 per cent y-o-y growth, which is likely to touch US$ 3 billion by 2012.The booming domestic telecom market has been attracting huge amounts of investment which is likely to accelerate with the entry of new players and launch of new services. Buoyed by the rapid surge in the subscriber base, huge investments are being made into this industry.

Norway-based telecom operator Telenor has bought a 60 per cent stake in Unitech Wireless for US$ 1.23 billion.

Japanese telecom major NTT DoCoMo has acquired a 27.31 per cent equity capital of Tata Teleservices for about US$ 2.6 billion and a 20.25 per cent stake in Tata Teleservices (Maharashtra) Ltd for about US$ 190.23 million.

Singapore Telecommunications (SingTel), which has a 31 per cent stake in Bharti Airtel has received the government’s approval to offer long distance services in India, according to a communication ministry official.

Mauritius-based P5 Asia Holding Investments (Mauritius) Ltd will be investing around US$ 545.13 million to hold a 20 per cent stake in Aditya Birla Telecom Ltd (ABTL). The funds will be utilised for network rollout and operations of ABTL in the Bihar circle.

Bharat Sanchar Nigam Ltd (BSNL) is planning an investment of around US$ 201.5 million in the Tamil Nadu Circle for an additional 23 lakh mobile connections under both 2G and 3G technologies by 2009.

The latest to join the world's second largest telecom market is Bahrain's Batelco which has signed a deal to buy 49 per cent in Chennai-based S-Tel, a GSM service provider, for $225 million.

Etisalat, a Gulf-based telecommunications company has picked up a 45 per cent stake in Swan Telecom.

Kavveri Telecom Products Limited is planning to set up a new subsidiary - Kavveri Telecom Infrastructure Limited (KTIL) - with an investment of US$ 20.11 million over the next two years, to offer in-building telecom infrastructure to telecom service providers.

Juniper Networks, which is the second-largest maker of networking equipment, plans to invest US$ 400 million in India, over the next five years, with a focus on its research and development (R&D) activity.

BSNL, India's leading telecom company in revenue terms, will put in about US$ 1.16 billion in its WiMax project.

Bharti Airtel will be spending US$ 2.5 billion in a major expansion bid. Reliance Communication has committed US$ 5.69 billion as capital

investment for the fiscal year ending March 2009. Idea Cellular will spend about US$ 2.36 billion in the fiscal ending March

2009. Srei Group's Quippo Telecom Infrastructure Ltd (QTIL) plans to invest

US$ 3 billion in 2008-09 to ramp up its telecom infrastructure business to grow both organically and inorganically.

Vodafone Essar will invest US$ 6 billion over the next three years in a bid to increase its mobile subscriber base from 40 million at present to over 100 million.

Telecom service provider, Tata Teleservices Limited, has announced that the company will be investing additional US$ 6.74 million in Gujarat to set up 100 cell sites by August 2009. The company had earlier made an announcement of investing US$ 24.1 million in the state till March 2009.

Telecom operator Aircel, which launched GSM mobile services in Bangalore on February 23, 2009, plans to invest US$ 220.58 million over the next year to set up base stations across the state.

Investments Abroad

After the amazing growth story in the domestic market, Indian telecommunication companies are now set to have a major global footprint.

The Bharti Group, which already has operations in Seychelles, (begun over a decade ago), and in the Channel Islands in Europe, launched its mobile services in Sri Lanka under 'Airtel' brand on January 12, 2009. Airtel is expected to invest about US$ 200 million in setting up and expanding its operation in Sri Lanka over the next five years. The company will simultaneously roll out second generation (2G) and third generation (3G) services in the country.

DTH company Spize TV (owned by Pyramid Saimira Group) has bought France Telecom's European DTH operations called WorldTV Europe.

Tata Communications has bought the 30 per cent stake in Neotel that was previously held by Eskom and Transnet. With this, Tata Communications in association with Tata Africa Holdings became the largest stakeholder with 56 per cent stake.

Tata Communications marked its entry into UAE by launching a range of dedicated Ethernet services in association with leading telecommunication service provider of UAE, Etisalat.

Manufacturing

India's telecom equipment manufacturing sector is set to become one of the largest globally by 2010. Mobile phone production is estimated to grow at a CAGR of 28.3 per cent from 2006 to 2011, totalling 107 million handsets by 2010. Revenues are estimated to grow at a CAGR of 26.6 per cent from 2006 to 2011, touching US$ 13.6 billion. Presently the telecom hardware manufacturing sector is dominated by international majors like Nokia, Ericsson, LG, Motorola, Samsung and Alcatel-Lucent, who have set up manufacturing bases in India. Domestic manufacturers have little contribution in the segment. Other foreign majors that have set up manufacturing bases in India include Foxconn, Flextronics Elcoteq Celestica, Elextronics Aspocomp, Salcomp, Siemens, Cisco, Perlos and Solectron. LG Electronics has announced that it will be further expanding its handset manufacturing facility in India and Nokia will now be targeting rural India in its expansion plans. In fact, Nokia Siemens Networks launched its new facility for the production and distribution of mobile communications infrastructure at Oragadam near Chennai.

Rural Telephony

Rural India had 76.65 million fixed and Wireless in Local Loop (WLL) connections and 551,064 Village Public Telephones (VPT) as on September 2008. Therefore, 92 per cent of the villages in India have been covered by the VPTs. The target of 80 million rural connections by 2010 is likely to be met during 2008 itself. Universal Service Obligation (USO) subsidy support scheme is also being used for sharing wireless infrastructure in rural areas with around 18,000 towers by 2010. The Indian wireless industry, with a 32 per cent penetration, is only second after China in terms of subscribers at 325 million. Most of this growth has come from urban India where penetration is close to 60 per cent, but in rural markets it's less than 15 per cent. And it's here that the industry sees the largest opportunity for growth.

Policy Initiatives

The government has taken many proactive initiatives to facilitate the rapid growth of the Indian telecom industry.

The Cabinet Committee on Economic Affairs (CCEA) has adopted new guidelines for computation of foreign equity holding in Indian companies. The new norm is expected to allow companies in a sector like telecom to

raise the extent of foreign investment. The new norms will benefit all such companies that have touched their foreign direct investment ceiling and part of the investment is through an Indian company owned and controlled by resident Indians. "All investments directly by a non-resident entity into an Indian company will be counted as foreign in-vestment, while foreign investment through an investing Indian company will not be considered for calculation of the indirect foreign investment, in case the Indian company is owned and controlled by resident Indian citizens," according to Home Minister Mr. P Chidambaram.

100 per cent foreign direct investment (FDI) is permitted through the automatic route in telecom equipment manufacturing.

FDI ceiling in telecom services has been raised to 74 per cent. Introduction of a unified access licensing regime for telecom services on a

pan-India basis. Introduction of mobile number portability in a phased manner, starting in

the fourth quarter of 2008. The government is implementing a program of connecting 66,822

uncovered villages under the Bharat Nirman programme. The government will invest US$ 2 billion to set up 1.12 lakh community service centres in rural India to provide broadband connectivity in 2008-09.

The Finance Ministry has declared a five-fold (from US$ 100 million to US$ 500 million) increase in the external commercial borrowings amount, which companies involved in infrastructure sectors can borrow from overseas to spend in India.

In another move, the Department of Telecommunications (DoT) has stated that foreign telecom companies can bid for 3G spectrum without partnering with Indian companies. Only after winning a bid, would they need to apply for unified access service licence (UASL) and partner with an Indian company in accordance with the FDI regulations.

Further, the Reserve Bank of India (RBI) has eased its mobile-banking norms, by raising the caps on fund transfers as well as mobile-based payments, and increasing the transaction limit to US$ 96.81 per day for fund transfers.

The Department of Telecom has allowed passive infrastructure sharing among operators, which includes sharing of physical sites, buildings, shelters, towers, power supply and battery backup. In early 2008, it also allowed sharing of active infrastructure but it has been limited to antenna, feeder cable, node B, radio access network and transmission systems and not sharing of spectrum.

The Road Ahead

As on October 17, 2008, there were 350 million mobile and fixed line subscribers in India, with about 8 million subscribers being added each month. The Union Minister for Communications and Information Technology, Mr A Raja, has stated that the target for the 11th Plan period (2007-12) is 600 million phone

connections with an investment of US$ 73 billion. Apart from the basic telephone service, there is an enormous potential for various value-added services. In fact, the real potential for telecom service growth is still lying untapped. The Indian rural market is going to be the next big thing for wireless telecom providers. With the tele-density in rural areas being still about 10 per cent against the national average of about 21 per cent, there seems to be huge untapped potential for mobile phone penetration in rural India. The government also plans an investment of US$ 2 billion, during 2008 to 2009, for the development of around 100,000 community service centres in rural India to provide broadband connectivity. Additionally, by 2010, the government targets:

80 million rural connections Mobile coverage of 90 per cent geographical area Internet Protocol Television (IPTV) in 600 towns Quadrupling manufacture Two-fold increase in telecom equipment R&D from the current level of 15

per cent. According to the CII Ernst& Young report titled 'India 2012: Telecom growth continues', revenue from India's telecom services industry is projected to reach US$ 54 billion in 2012, as against US$ 31 billion in 2008. According to Mr Prashant Singhal, Telecom Industry Leader, Ernst& Young India, "Going forward, rural telephony, 3G, WiMax and data services will drive sector growth in 2012. The industry will witness sustained growth in mobile services and data revenues. Network expansion will continue in order to support the rural growth." In addition to this, some interesting new developments worth tracking include:

The emergence of digital media advertising (internet, mobile and digital signage) as the medium of choice for advertisers. Of the available media, it was the fastest growing segment in 2008. According to a FICCI-PwC report, it is expected to touch US$ 211.97 million in 2011 from the current US$ 57.1 million.

The robust sales of ‘smartphones’ which do not seem to have been adversely affected by the economic slowdown. Smartphones, which have computer-like features, are a favourite with not only professionals, as they enhance productivity, but also with the youth that are attracted by their multimedia applications. Smartphones market, sized at 5 million in 2008, is expected to witness a compound annual growth rate (CAGR) of 23 per cent by 2011, as per technology research firm Ascendia.

Global mobile phone vendors are going green in India. Vihaan Network Ltd, a group company of Shyam Group has launched the world’s first zero opex GSM systems powered by solar energy rather than conventional sources. In a recently launched initiative, Nokia collected three tonnes of junk handsets, batteries, chargers and accessories from four cities during a 45-day campaign. The collected junk will be taken to Singapore for recycling. Hundred per cent of the materials in the phones can be recovered and used to make new products.

SECTION 2

THE COMPANY

LEADERSHIP WITH TRUST

Tata Group is one of India's largest and most respected business groups. Tata Group's name is synonymous with India's industrialisation. The Group gave India her first steel plant, hydro-electric plant, inorganic chemistry plant and created a reservoir of scientific and technological manpower for the country. Its Trusts have instituted the Tata Institute of Social Sciences in 1936; India's first cancer hospital, the Tata Memorial in 1941, and in 1945, the Tata Institute of Fundamental Research, which became the cradle of India's Atomic energy program. Today, Tata Group comprises 96 operating companies in seven business sectors: information systems and communications; engineering; materials; services; energy; consumer products; and chemicals. The Group has operations in more than 54 countries across six continents, and its companies export products and services to 120 nations. The total revenue of Tata companies, taken together, was $62.5 billion (around Rs.251, 543 crores) in 2007-08, with 61 per cent of this coming from business outside India, and they employ around 350,000 people worldwide. The Tata name has been respected in India for 140 years for its adherence to strong values and business ethics.

Every Tata company or enterprise operates independently. Each of these companies has its own board of directors and shareholders, to whom it is answerable. There are 27 publicly listed Tata enterprises and they have a combined market capitalisation of some $60 billion, and a shareholder base of 3.2 million. The major Tata companies are Tata Steel, Tata Motors, Tata Consultancy Services (TCS), Tata Power, Tata Chemicals, Tata Tea, Indian Hotels and Tata Communications and Tata Teleservices.

THE FOUNDER

Jamsetji Nusserwanji Tata laid the foundations of Tata Group when he started a private trading firm in 1868. In 1874, he set up the Central India Spinning Weaving and Manufacturing Company Limited and thus marked the Group's entry into textiles. In 1887, Jamsetji Tata formed a partnership firm, Tata & Sons, with his elder son Sir Dorabji Tata and his cousin Ratanji Dadabhoy Tata. His younger son Sir Ratan Tata joined the firm in 1896. In 1902, the Indian Hotels Company was incorporated to set up the Taj Mahal Palace and Tower, India's first luxury hotel, which opened in 1903. The Tata Iron and Steel Company (now known as Tata Steel) was established to set up India's first iron and steel plant in Jamshedpur. The plant started production in 1912. In 1910, Tata Hydro-Electric Power Supply Company, (now Tata Power) was set up. In 1917, Tata Oil Mills Company was established to make soaps, detergents and cooking oils. In 1932, Tatas entered aviation sector with the establishment of Tata Airlines. In 1939, Tata Chemicals, presently, the largest producer of soda ash in India, was established. In 1945, Tata Engineering and Locomotive Company (renamed Tata Motors in 2003) was established to manufacture locomotive and engineering products. In 1954, India's major marketing, engineering and manufacturing organisation, Voltas, was established. In 1962, Tata Finlay (now Tata Tea), one of the largest tea producers, was established. In 1968, Tata Consultancy Services (TCS), India's first software services company, was established as a division of Tata Sons. In 1970, Tata McGraw-Hill Publishing Company was created to publish educational and technical books. In 1984, Titan Industries, a joint venture between the Tata Group and the Tamil Nadu Industrial Development Corporation (TIDCO), was set up to manufacture watches. In 1996, Tata Teleservices (TTSL) was established to lead the Group's foray into the telecom sector. In 1998, Tata Indica, India's first indigenously designed and manufactured car was launched by Tata Motors. In 2000, Tata Tea acquired the Tetley Group, UK. This was the first major acquisition of an international brand by an Indian business group. In 2001, Tata entered into insurance business in joint venture with Tata AIG. In 2007, Tata Steel acquired Corus the fifth largest steel company in the world.In tandem with the increasing international footprint of Tata companies, the Tata brand is also gaining international recognition. Brand Finance, a UK-based consultancy firm, recently valued the Tata brand at $9.92 billion and ranked it 51st among the world's Top 100 brands. Businessweek magazine ranked Tata 13th among the '25 Most Innovative Companies' list and the Reputation Institute, USA, recently rated it 11th on its list of world's most reputable companies.

Tata companies have always believed in returning wealth to the society they serve. Two-thirds of the equity of Tata Sons, the Tata promoter company, is held by philanthropic trusts that have created national institutions for science and technology, medical research, social studies and the performing arts. The trusts also provide aid and assistance to non-government organisations working in the areas of education, healthcare and livelihoods. Tata companies also extend social welfare activities to communities around their industrial units. The combined development-related expenditure of the trusts and the companies amounts to around 4 per cent of the net profits of all the Tata companies taken together.

Going forward, Tata is focusing on new technologies and innovation to drive its business in India and internationally. The Nano car is one example, as is the Eka supercomputer (developed by another Tata company), which in 2008 was ranked the world’s fourth fastest. Anchored in India and wedded to traditional values and strong ethics, Tata companies are building multinational businesses that will achieve growth through excellence and innovation, while balancing the interests of shareholders, employees and civil society.

Tata Group is one of the leading business conglomerates in India and telecommunication is one of the heavily invested areas of the group. Tata’s telecommunication business is covered by four companies: Tata Teleservices Limited (TTSL) aka Tata Indicom and its associate, Tata Teleservices (Maharashtra) Limited (TTML), Tata Communication, formerly known as Videsh Sanchar Nigam Limited, and Tata Sky. TTSL is the leader in fixed wireless telephony market with a total subscriber base of 3.8 million. According to the data of fiscal year 2006, TTSL has an investment capital of $7.5 billion.

Tata started its foray into the telecom sector in 1996. In December 2002, Tata Teleservices acquired Hughes Telecom (India) Limited and renamed it to Tata Teleservices (Maharashtra) Limited (TTML). The company aggressively expanded its network around India. Initially, it invested Rs.199.24 billion. Tata Indicom operates in more than 5000 towns divided in twenty circles all over India. These circles are: Andhra Pradesh, Chennai, Gujarat, J & K, Karnataka, Delhi, Maharashtra, Mumbai, North East, TamilNadu, Orissa, Bihar, Rajasthan, Punjab, Haryana, Himachal Pradesh, Uttar Pradesh (E), Uttar Pradesh (W), Kerala, Kolkata, Madhya Pradesh and West Bengal. In these areas, TTSL and TTML jointly have a customer base of 28 million and it is still expanding its areas inside the country.

Tata Teleservices Limited spearheads the Tata Group’s presence in the telecom sector. The Tata Group had revenues of around US $62.5 bn in Financial Year 2007-08, and includes over 90 companies, around 350,000 employees worldwide and more than 3.2 million shareholders.

Incorporated in 1996, Tata Teleservices is the pioneer of the CDMA 1x technology platform in India. It has embarked on a growth path since the acquisition of Hughes Tele.com (India) Ltd [renamed Tata Teleservices (Maharashtra) Limited] by the Tata Group in 2002. It launched mobile operations in January 2005 and today enjoys a pan-India presence through existing operations in all of India’s 22 telecom Circles. The company is also the market

leader in the fixed wireless telephony market. The company’s network has been rated as the ‘Least Congested’ in India for last four consecutive quarters by the Telecom Regulatory Authority of India through independent surveys.Tata Teleservices Limited now also has a presence in the GSM space, through its joint venture with NTT DOCOMO of Japan, and offers differentiated products and services under the TATA DOCOMO brand name. TATA DOCOMO arises out of the Tata Group’s strategic alliance with Japanese telecom major NTT DOCOMO in November 2008. TATA DOCOMO has received a pan-India license to operate GSM telecom services—and has also been allotted spectrum in 18 telecom Circles and will roll out its services shortly, starting with South India.TATA DOCOMO marks a significant milestone in the Indian telecom landscape, as it stands to redefine the very face of telecoms in India. Tokyo-based NTT DOCOMO is one of the world’s leading mobile operators—in the Japanese market, the company is the clear market leader, used by over 50 per cent of the country’s mobile phone users.

Today, Tata Teleservices Ltd, along with Tata Teleservices (Maharashtra) Ltd, serves over 36 million customers in more than 320,000 towns and villages across the country, with a bouquet of telephony services encompassing Mobile Services, Wireless Desktop Phones, Public Booth Telephony and Wireline Services. Other services include value-added services like Voice Portal, Roaming, Post-paid Internet Services, Three-way Conferencing, Group Calling, Wi-Fi Internet, USB Modem, Data Cards, Calling Card Services and Enterprise Services. Some of the other products launched by the company include Pre-paid Wireless Desktop Phones, Public Phone Booths, Mobile Handsets and Voice & Data Services such as BREW Games, Voice Portal, Picture Messaging, Polyphonic Ring Tones, and Interactive Applications like news, cricket, astrology, etc.

In December 2008, Tata Teleservices announced a unique reverse equity swap strategic agreement between its fully-owned telecom tower subsidiary, Wireless TT Info-Services Limited, and Quippo Telecom Infrastructure Limited—with the combined entity kicking off operations with 18,000 towers, thereby becoming the largest independent entity in this space. Tata Teleservices’ bouquet of telephony services includes mobile services, wireless desktop phones, and public booth telephony and wireline services.

Franchise with Virgin mobile

In order to attract the young generation, in March 2008, Tata Indicom and Virgin Mobile, a UK based youth oriented mobile phone company, started Virgin mobile. Initially, Virgin Mobile wanted to act as a Mobile Virtual Network Operator but Indian Telecom authority did not give out the MVNO license. Under MVNO system, a mobile company buys up necessary space from an existing wireless company and resells under their own brand. This system is not present in India. As a result, Virgin and Tata signed a franchise deal under which Virgin Mobile

will be owned by Tata Teleservices. Under the later agreement, Virgin Mobile will release its mobile phones through Tata Indicom. It will also use Tata Indicom’s telecom network to offer its services. The revenue will be split 50:50.Virgin Mobile phone service is targeted toward young people between 14 and 25 years of age. Virgin Mobile is a UK-based mobile company founded by Richard Branson. Initially, the service was offered in fifty Indian cities. By December 2008, the officials targeted to spread the service in 1000 cities. In the initial stage, Virgin mobile targeted million base subscribers and generate revenue in the next three years. The company offered mobile handsets ranging from $50 to $125.

Trivia

In March 2008, Tata Indicom subscriber base reached a hopping 24.3 million in the wireless category and its over all subscriber base was more than 25 million.

TTSL maintained a compound annual growth rate of 113% in the wireless segment.

In Delhi NCR region, TTSL gained the second slot removing Vodafone with a subscriber base of 3 million.

In November 2008, Tata Teleservices sold out 26% of its stake to Japanese telecom giant NTT DOCOMO for $2.7 billion.

TTSL pioneered the VAS (Value Added Services) in India. Some of the major Bollywood stars endorsing Tata Indicom are: Kajol,

Trisha, Irfan Pathan, Pooja Ruparel and Saurav Ganguly. Tata Indicom’s Freedom Call Voucher television commercial was highly

appreciated. The TV commercial stars Pooja Ruparel and Kajol. Pooja Ruparel sits in the locker-room holding a stop watch on one hand and talking to her friend over the phone non stop. She was worried about talk time. Then, Kajol enters and gives her Tata Indicom’s freedom call offer which ensures free unlimited talk time.

In 2007, Synovate, a leading market research firm, conducted a survey which revealed that Tata Indicom was voted number one by Television viewers in major Indian metropolitan areas in September.

Tata also gives services in remote villages in India at a very low cost. There are mobile vans that go to different villages and operate as customer touch points. Trained TTSL officials visit different villages on particular days of a week selling recharge vouchers and service equipments. Each person covers 200-300 people.

In 2007, Tata Indicom launched an online portal named ichoose. Through these web-portals, users of Tata phones and interested people can buy phones and recharge their phones online.

In October 2007, Tata Zone, an infotainment service for Hindi speaking Indians. There are various applications such as Cricket, Faith and

Prayers, Bollywood and Hollywood movies, News, Astrology, Funzone, and Games. Users can also download ringtones and wallpapers.

In March 2008, Tata Indicom launched a free-of-cost i-Help Emergency service. Available to all the pre-paid and post-paid phone users of TTSL, i-Help enables the user to connect with his/her family anytime. Under this facility, users would have access to three local numbers. In case of emergency, s/he would dial *44 and Tata will send SMS to his close ones.

Areas of Business

Having pioneered the CDMA 2000-1x technology platform in India, Tata Teleservices has established a 3G-ready robust and reliable telecom infrastructure in partnership with Motorola, Ericsson and Lucent. The company has also received the license from the Department of Telecommunications to launch GSM services. With the launch planned for 2009, TTSL is on the threshold of emerging as a true-play dual technology telecom operator.In November 2008, Tata Teleservices entered into an agreement with Japanese telecom major NTT DOCOMO, moving it closer to a pan-India dual network presence. The company also recently announced a unique reverse equity swap strategic agreement between its fully-owned telecom tower subsidiary, Wireless TT Info-Services, and Quippo Telecom Infrastructure — with the combined entity kicking off operations with 18,000 towers, thereby becoming the largest independent entity in this space.Some of the other products launched by the company include new mobile handsets and new voice and data services such as BREW games, voice portal, picture messaging, polyphonic ring tones, interactive applications like news, cricket, astrology, etc. The company’s Tata Indicom ‘Non Stop Mobile’ allows customers to receive free incoming calls.Tata Teleservices also has India’s largest branded telecom retail chain and is the first service provider in the country to offer an online channel — www.ichoose.in — to offer post-paid mobile connections in the country.

Products and Services

On the products and services front, TTSL expanded its bouquet by offering ire-free Internet (Wi-Fi) and DSL services, besides mobile, wire line, FWT and data services. Tata Indicom, launched by TTL in late 2002, gained in strength as it became the umbrella brand for the various telecom initiatives of the Tata Group as a whole. As part of this process, the Tata Indicom brand was later adopted by VSNL, Tata Internet Services and TTL (Maharashtra). Today the brand encompasses a suite of products, including mobile, wire line, FWT, national long distance, international long distance, and data and Internet services. Tata Indicom also offers its customers value-added services such as voicemail, data and information services. TTSL’s workforce swelled to more than 5,000 in 2003 as it stepped on the growth accelerator. Following a shift in headquarters from Hyderabad to Mumbai, the

company is currently on a recruitment drive to kick start operations across 11 additional telecom circles.Collaborations with Lucent, Motorola and Alcatel for the deployment of network infrastructure have enabled TTSL to deliver the best of technology to its customers. In October 2003 the company signed a $150-million deal with Ericsson to deploy the latter’s CDMA2000 1X wireless infrastructure across India. This network is expected to be in service by early 2004.TTSL has joined hands with DishnetDSL, a leading Internet service provider and broadband pioneer, to offer broadband services to Tata Indicom subscribers through TTSL's wire line network. The key benefit of this strategic partnership to customers is a cost-effective, high-speed, ‘always-on’ broadband Internet connection at a monthly cost of just Rs 995. There was more in the partnerships sphere for TTSL in 2003. It undertook a joint initiative with Tata Infotech, India’s leading systems integrator, to develop state-of-the-art wireless date applications. Under the agreement, the two companies will be setting up a wireless application lab at IIT, Mumbai, to develop new wireless products that can be used to exploit emerging opportunities in wireless data transmission. On the development menu are speech and script recognition software, video streaming, ATM-based applications and mobile applications for games, news and sports updates, music downloads, etcAlso in 2003, TTSL spearheaded the Wi-Fi revolution in India by teaming up with the coffee chain, Barista. As part of the tie-up, TTSL will roll out Wi-Fi services across key Barista outlets in the country. Tata Indicom services are already being served up offered at 10 Barista outlets across the country, with Wi-Fi cards being available to customers at Rs 25 per half-hour. TTSL has identified three key market segments for its Wi-Fi offerings: enterprise hotspots for company sales and marketing forces located in franchisee or distributors’ premises; replacement of wired local-area networks with Wi-Fi in companies; and ‘hot spots’ at airports, shopping centres, malls and hotels.

MARKET POSITION

List of top 30 Telecom companies in India: Market valuations as on 20 MAR 2009

Company Name Market Cap in Crores

Bharti Airtel 108066.23Reliance Communications 32683.44Idea Cellular 14368.92Tata Communications 13181.25Tata Teleservices 4393.06Spice Communications 4136.13MTNL 4044.6GTL 2475.12GTL Infrastructure 2210.49OnMobile Global 1403.52HFCL Infotel 457.73ITI 413.28Him.Fut.Comm 386.99Astra Microwave 241.88Gemini Communications 125.71Avaya Global 118.54Shyam Telecom 64.58Nelco 63.55XL Telecom & Energy Limited 55.96Goldstone Infratech Ltd 52.6Nu Tek 48.16Kavveri Telecom 26.51Krone Communications 24.52Mobile Telecommunications Ltd 17.37Valiant Communications 16.58Pun.Communi. 16.19Nettlinx 12.68Aishwarya Telecom Ltd 9.86Interg.Digit 3.15Vital Communications 2.81

The TTSL Retail Sector

Tata Teleservices Limited (TTSL) has registered its name in Limca Book of records as the first telecom operator in India to inaugurate 100 True Value Shoppes (TVS) across the nation on a single day.

The exercise was a part of the massive expansion drive and brand strengthening of the CDMA major. The company has rolled out 1,000 retail outlets in the past 180 days and is planning to add 1,000 more stores in the near one year. The company has also re-branded the stores as Tata Indicom Exclusive Stores. They were earlier known through two separate formats—a True Value Hubs and True Value Shoppes.

It is a part of brand building and expansion drive. They are continuously working on this front and looking for some more tie-ups in future. Most towns with a population of 50,000 and above within the 20 circle of TTSL’s operation would have the presence of such outlets.

The Branded Retail Business Unit looks after the retail chain of the Tata Indicom Exclusive stores. Branded retail has a national presence with over 3100 outlets comprising of 600 TTSL (Company) owned stores and more than 2500 stores in the Franchisee format. Branded Retail outlets have become the touch points for its customers in more than top 1000 towns in India. These outlets are designed to ensure similar experience across both company-owned outlets as well as franchised outlets.

This network of outlets is the largest branded retail presence amongst all telecom operators in the country and in fact, makes Tata Indicom the largest retailer in India in terms of number of stores under one brand name.

TATA Business Excellence Model

Tata Business Excellence Model is a framework which helps companies to achieve excellence in their business performance. This is the chosen model by the TATA group to help in building globally competitive organizations across TATA Group companies. TBEM is based on the Malcolm Balridge National Quality Award Model of the U.S.

The Criteria has three important roles in strengthening competitiveness:

To help improve organizational performance practices, capabilities, and results

To facilitate communication and sharing of best practices information among all organisations within TATA Group.

To help in guiding organizational planning and opportunities for learning

TBEM Criteria is designed to help organizations use an integrated approach to organisational performance management that results in

Delivery of ever-improving value to customers and stakeholders, contributing to organizational sustainability

Improvement of overall organisational effectiveness and capabilities Organisational and personal learning

The Criteria are built on the following set of 11 Interrelated Core Values and Concepts:

Visionary Leadership Customer-driven Excellence Organisational and Personal Learning Valuing Employees and Partners Agility Focus on the Future Managing for Innovation Management by Fact Social Responsibility Focus on Results and Creating Value Systems Perspective

The Core Values and Concepts are embodied in seven Categories, as follows:

Leadership Strategic Planning Customer and Market Focus Measurement, Analysis, and Knowledge Management Work force Focus Process Management Business Results

The TBEM criteria are the operational details of the Core Values, applied to the different facets of a Business organisation.The 7 Criteria Categories are divided into 18 items and 32 Areas to Address

The TBEM framework has the following characteristics Focus on Business results Non-prescriptive and Adaptable Maintains System Perspective Supports Goal based diagnosis

TBEM instills a process centric approach in an organisation as a means to achieve the chosen Business Goals

SECTION 3

THE PROJECT RESEARCH

RETAIL ANALYSIS

I] WHAT IS RETAIL ANALYSIS?

Analysis is the process of breaking a complex topic or substance into smaller parts to gain a better understanding of it.

Retail Analysis refers to carrying out the analysis of the retail operations for an organisation. This is done by breaking the complex retailing operation into smaller parts, studying it and understanding it better, to improve the retail function.

Retail analysis can be done by field visits and inspections or by studying the data at hand. It is a research done to inspect the retail function of a business unit. Retail analysis studies the retail factors such as sales, store management, sales revenue etc.

II] IMPORTANCE AND RELEVANCE

Merely contracting with vendors to sell a product or market a service is not enough. For a company to have well performing Retail units, especially its franchisees, the job doesn’t end by mere contracting and levying of marketing and sales job on the vendors. It has to keep on a constant check on the performance of the stores owned by these vendors. Retail analysis makes this possible. Hence it is essential for every business unit in charge of the retailing operations to carry out periodical retail analysis to have a report of the retail functions.

At TTSL Retail Analysis is an important function of the Branded Retail (BR) team. This function is carried out on a monthly basis. Retail analysis helps the BR team to constantly keep an update of all the vendors under TTSL and inspect the retail operations carried out by them. Every subject of retail analysis is important for the retail business. If a ‘sales’ is chosen as a subject of analysis, the BR team will have information of the sales function and performance by all its vendors and they might be able to raise the sales graph as planned.Retail Analysis is also helpful for future predictions and forecast. By studying the retail factor trends it becomes possible and easy to forecast future trend. Thus the company can be ready for slowdowns or increase output if they speculate a rise.

The analysis report is referred to, by the TTSL management at all levels, the retail heads, retail operations personnel’s, the vendors and all concerned with the retail function and performance.

III] PROCEDURE FOR RETAIL ANALYSIS

The following is the procedure used for Retail Analysis at TTSL:

Step 1: Analyzing the raw data

A raw data is a compilation of end to end specifications/ figures related to a certain product or service in the company. One can choose and pick the details required, from the raw data and work on it.

At TTSL a raw data sheet called ‘Productivity Based Performance Contract’ (PBPC) is compiled every month using Microsoft Office Excel (Refer to the CD to view the PBPC data). This data is used for analysis and recording purposes. It contains details of all the retail stores under TTSL (Both ‘Company Owned Company Operated’ and Franchisees). The data states the Store name and Store code, name of the vendor to whom the store belongs, the region of operation and all relevant figures of sales and operations. It is the source of information needed for retail analysis.

Before doing the analysis one needs to go through the PBPC data and study the particulars that the data provides. This helps in deciding the different subjects of analysis.

The following is the list of the vendors of TTSL and the number of stores owned by them:

Sr. No VENDOR REGION STORE COUNT1. Mahadev Enterprises U P EAST 12. Namarathi KARNATAKA 13. Shanti House U P EAST 14. SLV Enterprises KARNATAKA 15. Kabson KARNATAKA 26. Kote Mktg KARNATAKA 27. Mobile Junction KARNATAKA 28. Veetraj Enterprises RAJASTHAN 39. Mukund Teleservices RAJASTHAN 310. D T Telelink RAJASTHAN 311. Matrashree Enterprises RAJASTHAN 312. Master Computers MADHYA PRADESH 313. Aerotech MADHYA PRADESH 414. Nilavu Computers TAMIL NADU 415. Apurva International MADHYA PRADESH 516. DataMax HIMACHAL PRADESH 617. Malti Telecom U P EAST 618. Unitel PUNJAB 719. SS Ventures CHANDIGHAR 720. Sri Balaji Teleservices ANDHRA PRADESH 821. DataMax HARYANA 822. DataMax PUNJAB 823. A3 Financial GUJRAT 924. Agarwal Agencies ANDHRA PRADESH 925. Anand Enterprises BIHAR 926. Marda Enterprises REST OF WEST BENGAL 1027. BK Associates REST OF WEST BENGAL 1128. Marda Mktg Svcs KOLKATTA 1129. S R Associates KOLKATTA 1130. Adcom Display KOLKATTA 1131. S.K Enterprises ORISSA 1132. Inductus BIHAR 1133. Aqua Regia U P WEST 1534. Sanskriti Teleservices RAJASTHAN 1535. UB Resource GUJRAT 1836. Adis Marketing GUJRAT 1937. People to People KARNATAKA 2538. Fusol Advisory ANDHRA PRADESH 25

39. Aqua Regia DELHI 26

The following are the components of the PBPC sheet:

1. Calculation Reference Sheet:

The Calculation Reference Sheet states how revenue and payout figures are drawn based on the products sold or service rendered.

2. R – Factor Score : (Sales Figures)

Acquisition Prepaid Activations Target Prepaid Activations Prepaid Activations % Against Target Postpaid Activations Target Postpaid Activations Postpaid Activations % Against Target

Revenue Revenue Target Prepaid RCV/EVD Sales Tata Sky RCV Total of RCV Sales ABU RCV Sales Bill Collections Handset Sales Calling Cards Starter Kits Total of H/S, Starter Kit, Calling Cards Tata Sky Other Accessories Total Revenue Total Revenue % Achieved Against target

Customer Service Cancellation on walk-in Retention Count Retention % Achieved Retention % Achieved Against target Valid Service Request

3. R – Factor Payout : (Payment against sales)

Activations Prepaid Activations Payout Postpaid Activations Payout

Recharge Voucher Sales (RCV) Prepaid & Tata Sky RCV Sales Payout ABU RCV Sales Payout Bill Collections Commission H/S, Starter Kit Calling Cards Tata Sky Other Accessories Total revenue Payout

Customer Service Retention Count Valid SR's

Total R Factor Payout

4. K – Factor Score:

Business Compliance Vouchering CAF Compliance

Customer Management Postpaid FTR's Prepaid FTR's KET Score LPMS

Total K Score

5. Final Payout:

Final Payout (R*K) R factor Payout K Factor Score

Step 2: Sorting data according to the requirement

A raw data is like a dump of all details related to certain product specifications. It is very vast. Hence the next step in the process of Retail Analysis is to sort the data and make it convenient to be used. Sorting refers to choosing the figures and relevant data required to make an analysis from the PBPC dump. When the data is sorted, the subject of analysis can be focused upon. This makes the whole analysis systematic, manageable, presentable and, easy to work on, understand and interpret.

For e.g. If the analysis of the sales for a certain period of time has to be done, one can pick just the sales figures from the PBPC raw data. Sort it as required and then work on it.

Sorting separates the sales figures from all the other data, thus making it easy to do the analysis and make graphs. The analysis can be done faster and accurately if the required data is sorted and made available at hand. One does not have to search for the figures every time because once the sorting is done the required figures are made available at one single destination for easy reference. Sorting makes the information crisp and specific.

The sorting of data is done as follows:

a. Narrowing the data :

The subject of analysis is defined in the first step, thereafter the data required for the analysis is picked from the raw data.

b. Categorizing and classifying the data :

For easy reference, comparison and analysis the data is categorized based on the subject of analysis.

For instance, if the analysis has to be done for each region in which TTSL stores operate, to know which region is performing well, then region wise categorization is done. Similarly, if vendor wise analysis is required then the vendors are classified and categorized on the desired basis. The vendor wise classification can be done based on the region of operation or location, number of store under the vendor, ownership (whether COCO or Franchisee) etc.

Categorization is also important for just and fair comparison. Since the subject of comparison may be dependent on many factors, which in most cases are not uniform. For instance, the performance data of a Vendor with 25 stores cannot be compared with the performance data of a

vendor with only 5 stores. The performance or sales figure of the former is obvious to be more than that of the latter.

Similarly, when the analysis is done to set sales targets, the targets cannot be same for all the Vendors. Reason being that, these vendors operate in different regions. Some of these regions might be densely populated while the population at other regions might be scarce. Due to this, the foot fall at each store differs. And this affects the sales.

Here the subject of classification is the vendor and the dependent factor is the region of location.

Step 3: Presenting data in graphical form

Any kind of analysis can be easily done if it is presented in a graphical format. Graphs, charts and diagrams act as visual aid for analysis. It is much easier to derive conclusions and determine problem areas through diagrams than having to brush through a whole data of figures and numbers.

Different colours and shapes are used to make the graphs attractive and easy to understand. Graphs are the best form of presentation. Especially, when the results of the analysis have to be shared with the concerned bodies.

Graphs are prepared using CHART WIZARD OR PIVOT TABLE AND CHART REPORT in Microsoft Excel or Microsoft Power Point Presentation.

Step 4: Analyzing the Data and Graph results

Once the graphs and diagrams are derived the next step is to draw a detailed analysis of the data. This is the most crucial step in the project. Hence for a proper analysis, a thorough study of the data and graphs is essential.

Through proper analysis the problem areas are found, and answers to the questions like ‘Why?’ and ‘How?’ are derived. Once the problem areas are noted down the causes and solutions are derived and noted down. Causes are found by talking to the Vendors in business or the Retail team at the Regional TTSL Offices.

1. Incase of unsatisfactory performance shown by a vendor, the vendor or the regional TTSL retail manager is spoken to and the causes of the dip in performance level is found out.

2. Similarly, vendors who perform well are also spoken to. They are asked about the measures taken to increase the performance level.

3. These measures are then shared with the low performing vendors and they are helped to perform better.

Step 5: Drafting and Presenting the Analysis Report

The last step in the process of report should be crisp, to the point and easy to understand. The report should be supported by the graphs and all other findings for reference and evidence.

SECTION 4

FINDINGS AND INTERPRETATIONS

SALES TREND

Sales Trend, is the analysis of the sales and sales target achievement level of all the vendors of TTSL for the Months of January, February and March 2009.

The Sales Trend helps to know the performance level of each Vendor. It helps to know which of the vendors are successful in achieving the target set, and which are not. Accordingly, improvement measures are taken to help the poor performers improve their sales. The sales trend helps to spot the week areas of business and also the strong ones.

It is one of the most important part of Retail Analysis as selling is the most crucial part of retailing. And, good sales lead to good profits.

The sales performance of vendors was analyzed in the following way:

The PBPCs of Jan, Feb and Mar 2009 were studied and the following data was picked as required for each month:

1. Prepaid sales (in units)2. Postpaid sales (in units)3. Sales Target (in units)

A vendor wise classification was done based on the number of stores under each vendor. The vendors were divided in 3 categories for better comparison and just analysis

1. Low Level Vendors : 1 – 5 Stores2. Moderate Level Vendors : 6 – 14 Stores3. High Level Vendors : 15 – 26 Stores

A total sales figure for each vendor was derived at. This was done in 2 steps:

1. A sum of the sales, of all the stores under each vendor was derived at using Pivot Table tool to sum up the data.

2. A sum operation was performed on the Prepaid and Postpaid sales to derive the total sales in Microsoft Excel.

The following Bar Graphs were derived from the sales data by using Microsoft Excel.

I. Low Level Vendors

II. Moderate Level Vendors

III. High Level Vendors

ANALYSIS AND CONCLUSIONS

LOWS

o Adis Marketing - GJo UB Resources - GJo DataMax – HA

Have showed consistently poor performance in all three months.Though the targets set for these vendors were revised and made low in

March, it did not help them achieve the target as their sales dipped further low in that month.

PERFORMERS

o S R Associates – KOo Sanskriti Telelink – RJo Data max - HPo Sri Balaji Teleservices - APo Agarwal Agencies - AP

Have performed well above the mark.Though, in January the target achievement level was moderate, in February and March all the above agencies kept up the achievement level high above 100%.

EXCELLENCE

o Marda Marketing Services – KO

Has shown excellent performance in all three months, mainly due to high Prepaid activations.

Though the Postpaid activation achievement has been below the 50% mark in all 3 months, the prepaid activation achievement has made up for it by maintaining a level of above 175% in all three months. The only concern area is, in January the target was set low, due to which the achievement level shot up to 398%, which is almost 4 times the target set.

SALES AND PAYOUT TREND

Payout refers to the wages paid to the Vendors for the retail operation carried out by them. The payout is calculated based on different parameters drawn in the Key Result Areas, which is as follows:

Key Result Areas for manpower agency

TATA Teleservices are keen to partner with such an agency that is willing to contribute to the performance of the day to day business of TTSL. Based on the performance the partnered agency can enjoy financial benefits of the same. TTSL has set few key performance indicators on basis of which the remuneration will be done.

Sr. No

Key Result Area

Key Performance

Indicator

Measurement criterion

Period Payment

A Acquisition

Post-paid acquisition target

% achievement against target Monthly Rs.325 per acquisition

Pre-paid acquisition target

% achievement against target Monthly Rs.100 per acquisition

B Revenues Revenue% achievement against target

Monthly3% of the revenue for CMBU & Tata Sky RCVs; 1% for

ABU RCVs; 0.5% for bill collection, 6% for H/S, starter-kits & Calling card Tata Sky and other accessories @ 10%

CCustomer service

Retention% achievement against target Monthly Rs.40 per retention

Valid SRs raised     Rs.6 per SR

Achievement against target Bonus / Penalty> 140% 150%

125-140% 130%110-124.9% 120%100-109.9% 105%

90-99.9% 95%80-89.9% 85%

<80% 75%

Key definitions:

c. Acquisition: A postpaid or prepaid connection sold wherein the documentation as per norms is complete

d. Revenue: This shall be measured as value of item sold (invoice value) net of taxes and duties. In the case of bill collection, this shall be the total value of bill collected net of taxes and duties.

e. Bill collection commission shall be payable on the value as measured at the TTSL Bill Receipt System and as reconciled by TTSL.

f. Retention is measured as % of cancellation requests. Retention payout shall be made on those connections where the customer remains on network for a minimum period of 3 months post the cancellation request and generates a minimum ARPU of Rs.150.

K Factors

In addition, there will be K Factors which will reward / penalize store level performance payouts. The K factor payout table is as follows:

Business compliance K factors will penalize the agency for not meeting the desired norms set.

Business ComplianceK factors Customer management K factors with rewards and Penalty

CAF Compliance & vouchering

FTR - Postpaid

FTR – Prepaid

KET - Score LPMS

Target % Payout Target % Reward/Penalty98-100 100% >95 >97 >95 >50 125%95-97 98% 85-95 95-97 85-95 40-50 110%93-94 80% 80-84 90-94 80-84 35-39 100%90-92 70% 70-79 85-89 75-79 30-34 85%

Less than 90 0% 60-69 80-84 70-74 25-29 70%< 60 < 80 <70 <25 0%

Note: 1. The targets are actual targets. Thus for FTR-postpaid a FTR score of 95%2. LPMS conversion will be considered for the leads allocated through call centre only. Store level updates and closure though mandatory will not be considered. A minimum of 90% closure is expected in LPMS. Else even if the conversion is high the K factor for LPMS will be considered as 0.7. For conversions less than 25% the K factor will be 0 as highlighted above.3. KET: A minimum of 95% employees are supposed to take the KET test as conducted by the company.

Illustration:A store has a postpaid acquisition target of 25 and pre-paid acquisition target of 75.Revenue target of Rs.3 lakhsRetention target of 60%

Delivery for the month Post paid achievement 30 nos @ 120% of the targetPre-paid achievement of 85 nos @ 113% of the targetRevenue delivery of Rs.3.3 lakhs – RCV of Rs.1 lakhs and Rs.1.75 lakhs of H/S + Starter Kits + calling card + 0.25 L of accessoriesBill collections of Rs.3 lakhsRetention score: 20 customers @ 60%No of valid SRs raised: 50 Remuneration: RPost – Paid 30* 325* 1.2 = Rs.11700Pre-paid 85 * 100* 1.2 = Rs.10200Revenue Com- 1 L * 0.03+ 1.75 L * 0.06 + 0.25 L* 0.15 = Rs.17250Bill collection Commission 3 L * 0.005 = Rs.1500Retention commission 20 * 40*1.05 = Rs.840SRs commission 50* 6 = Rs.300

Total commission = Rs.41,790

K Factor calculation:

The remuneration, R calculated as per the KRAs will be multiplied by the K factor to arrive at the final payout.

For e.g.: Remuneration R for managing a store is Rs.44640 as per the above calculation.

The K factor delivery is as follows:

Vouchering: 99% K1 score = 1CAF compliance: 97% K2 score = 0.98FTR postpaid: 85% K3 score = 1.1FTR pre-paid: 90% K4 score = 1KET score: 90% K5 score = 1.1LPMS conversion @ 36% K6 score = 1

K score Vouchering = 1 CAF compliance = 0.98FTR Postpaid = 1.1FTR Prepaid = 1KET score = 1.1LPMS conversion = 1

K score = 1*0.98*1.1*1*1.1*1= 1.18

Final Payout = R*K

Final Payout = R*K = 41790*1.18 = Rs.49, 312

The analysis of ‘Sales and Payout Trend’ is done to determine the effect of the paypout over the sales. The payout system should be able to motivate the vendors into selling better and also improve customer service. Through ‘Sales and Payout Trend’ faulty payment strategy can be corrected. Or it might lead to excess outflow of funds from the company to the vendors in vain.

The ‘Sales and Payout Trend’ of vendors was analyzed in the following way:

The PBPCs of Jan, Feb and Mar 2009 were studied and the following data was picked as required for each month:

1. Prepaid sales (in units)2. Postpaid sales (in units)3. Final Payout (in Rs.)

A vendor wise classification was done based on the number of stores under each vendor. The vendors were divided in 3 categories for better comparison and just analysis

1. Low Level Vendors : 1 – 5 Stores2. Moderate Level Vendors : 6 – 14 Stores3. High Level Vendors : 15 – 26 Stores

A total sales figure for each vendor was derived at. This was done in 2 steps:

1. A sum of the sales, of all the stores under each vendor was derived at using Pivot Table tool to sum up the data.

2. A sum operation was performed on the Prepaid and Postpaid sales to derive the total sales in Microsoft Excel.

The following Bar graphs of the Final Payout were derived, from the data by using Microsoft Excel

I. Low Level Vendors

I. Moderate Level Vendors

I. High Level Vendors

ANALYSIS

To draw analysis on ‘Sales and Payout Trend’ the Payout trend graphs were compared with the Total Sales graphs of the corresponding vendors, exhibited earlier. The following problem areas were detected and their causes were found.

1 STORE:

• Namarathi (KA), Sales achievement level is more than the target set in the month of March than in the month of Jan. Yet the payout in Jan is much more than in Mar. CAUSE: This is because its Postpaid activation is 120% in Jan and in Mar its only 62%. Similarly, Total RCV sales is Rs.2, 23,981 in Jan and only Rs.97,347 in Mar.

• SLV (KA), sales are lower in Mar than in Jan but the payout for Mar is more than Jan. CAUSE: Mainly because they have done well in Customer Service. Revenue in Mar is Rs.126,340 and in Jan it is Rs.101,026

2 STORES:

• Kabson (KA), Kote Marketing (KA) and Mobile Junction (KA) have high payouts in Mar, even though their productivity is low for that month. This because of their good K Factor performance; mainly in Customer Management – KET Scores. Similarly, in Feb their payout is low, in spite of good productivity.CAUSE: Main reason being, their low performance in K Factor.

3 STORES:

• D T Telelink (RJ) and Matrashree Enterprises (RJ), payout is proportionately lower than the Productivity trend in Feb as compared to the other 2 months. CAUSE: The performance in K Factor is poor. Their achieved score in LPMS - customer management is only 39% each.

6 STORES:

• For DataMax (HP), the sales target is achieved for Feb and Mar and not for Jan, yet the payout in Jan is more than payout in Feb and Mar. CAUSE: Because it has exceeded its revenue target only in Jan. Here though the K Factor score is more in Mar (2.44) than in Jan (2.39), the R Factor Payout shows an otherwise trend. Hence the payout is more in Mar.

7 STORES:

• SS Ventures (CG), extremely high Revenue target set for Feb though the target in Jan is not achieved. CAUSE: The target for current month is set considering the Revenue earned in the last 3 months.

8 STORES:

• Datamax (HA) sales target set for Mar is higher than that set for Feb though the target in Feb is not achieved.CAUSE: The target for current month is set considering the Sales of the last 3 months.

11 STORES:

• Marda Mktg (KO): Payout is high and not in proportion to the sales, especially in Jan. CAUSE: Very low sales targets set in all three months.

• S R Associates (KO): In spite of low productivity in Mar the payout is high.CAUSE: Sales targets are low in Feb and Mar.

25 STORES:

• P2P (KA): The Productivity for Jan is better than that of Mar, yet the Payout is more in Mar CAUSE: The Factor score is 1.48 in Mar and 0.93 in Jan. NOTE: K Factor Score is good in Mar because it has done well in Business compliance – CAF Compliance

CONCLUSION

Along with ‘Sales Trend’ and the ‘Sales and Payout Trend’, the following subjects were also undertaken for analysis:

1. Prepaid Sales v/s Postpaid trend2. Revenue Trend3. Productivity Trend

(Refer to the CD to view the graphs and analysis related to the same)

A report was prepared in Power Point Presentation and presented to the Sr. Vice President of TTSL Mr. Sanjeev Ghanate, The Branded Retail head and the Branded Retail Team.

The analysis report was also sent to all the circles marking their performance with the improvement and correction measures.

RECOMMENDATIONS

According to the research study and analysis report, the following are the best recommendations for TTSL:

1. All the retail vendors should be treated like company employees and not as business associates in contract. The job of selling and retailing is very vibrant and it needs a lot of motivation. Hence, the company should maintain their HR practices of motivation, grievance handling etc with the vendors in the same way that they do for their employees.

2. The discussion of the analysis findings or report should not be the only purpose of contact and meeting with the vendors. There should be periodic meetings to hear out the vendors’ views and their report of the retail operations. This will keep the BRBU section updated and informed of the happenings at the retail end and help them take corrective measures or retail improvement measures if needed.

3. There should be a periodic training session based on retailing, held for the vendors. Retailing is a deep subject directly related to sales. There are many factors of retailing that directly affect the sales. A vendor must have the knowledge of these factors and should be educated on this front. There is no specific qualification required to be a retail vendor and business is purely contractual, efforts must be made to ensure that the vendors are educated with a few essential subjects of retailing.