EXECUTIVE SUMMARY

We are in the era of entertainment through mobile handsets. Downloading a ring tone

watching your favorite movie of tracking cricket score the list of activity that you can do

using your cell phone is endless. To supplement stagnant voice revenues cellular operator

are now turning to VAS to boost revenues in both data and value added voice service.

Both Air Tel and Vodafone has deep rooted presence in the Indian telecom sector through

there wide product offerings and excellent distribution network

In this report I have tried to analyze the present scenario of Indian telecom sector the real

aim of the project is to study the satisfaction and response towards services provided by

Air Tel and Vodafone, but many sub objectives are also included under this project so as

to make it comprehensive one.

I complement this with the internal study of the companies – history, business areas etc.

to analyze how well poised the company are to complete or rather just exist in this market

that is proving itself to be the most competitive in post liberalization Indian economy.

Primary data was collected in which focus group study was conducted to design the

customer survey questionnaire with a sample size of 50 respondents. This survey was

conducted in Dehradun, secondary data was collected through websites articles etc. Data

thus collected was analyzed and report.

1

Introduction

The telecommunications sector has become an important key in the development of the economy

of developing as well as developed countries. This results from the saturated markets, de-

regulation of telecommunications industry (removal of monopoly rights, especially enjoyed by

state-owned telecoms networks), increasing number of mobile service providers, enormous

technical development and intense market competition. Szyperski & Loebbecke (1999) wrote

that this increasing economic importance and benefits of telecommunications firms motivated

many management scholars (especially marketing experts) to devote attention to this sector.

Wilfert (1999); Gerpott (1998); and Booz. Allen and Hamilton (1995) pointed out that marketing

strategies are very important in telecommunications services because once customers have

subscribed to a particular telecommunications service provider, their long-term link with this

provider is of greater importance to the success of the company than they are in other industry

sectors. Hence, service providers need to form a continous lasting relationship with their

customers to know them better and satisfy their needs adequately. to maximize customer

satisfaction, focus should be on service quality and customer-oriented services. Switching barrier

on the other hand is affected by switching costs (e.g. loss cost, move-in cost, and interpersonal

relationships) and was revealed to have an adjustment effect on customer satisfaction and

customer loyalty.

customer satisfaction is the only single measure that better capture the range of services, prices

and quality and more so, this measure is an important performance indicator useful for both

regulators and mobile service providers.

In this dissertation report, I have conducted a comparative customer satisfaction between two

major telecom service providers in India. I tried to know the factors that satisfy/dissatisfy a

mobile user. Airtel and Vodafone are the two major market players in telecom industry of India.

I have conducted the survey from both of these customers. I have conducted this survey in

Dehradun with the help of 50 respondents.

2

Literature Review

Customer satisfaction, as a construct, has been fundamental to marketing for over three decades.

As early as 1960, Keith (1960) defined marketing as “satisfying the needs and desires of the

consumer”. Hunt (1982) reported that by the 1970s, interest in customer satisfaction had increase

to such an extent that over 500 studies were published. This trend continued and by 1992,

Peterson and Wilson estimated the amount of academic and trade articles on customer

satisfaction to be over 15,000.

Several studies have shown that it costs about five times to gain a new customer as it does to

keep an existing customer (Naumann, 1995) and this results into more interest in customer

relationships. Thus, several companies are adopting customer satisfaction as their operational

goal with a carefully designed framework. Hill and Alexander (2000) wrote in their book that

“companies now have big investment in database marketing, relationship management and

customer planning to move closer to their customers”. Jones and Sasser (1995) wrote that

“achieving customer satisfaction is the main goal for most service firms today”.

Increasing customer satisfaction has been shown to directly affect companies’ market

share, which leads to improved profits, positive recommendation, lower marketing

expenditures (Reichheld, 1996; Heskett et al., 1997), and greatly impact the corporate

image and survival (Pizam and Ellis, 1999).

Customers who perceive that they receive value for money are more satisfied than

customers who do not perceive they receive value for money.

3

Several studies have shown that perceived value is significant determinant of customer

satisfaction (Anderson et al. (1994); Ravald and Gronroos (1996); and McDougall and

Levesque, 2000). Turel and Serenko (2006) in their investigation of mobile services in

Canada suggested that the degree of perceived value is a key factor affecting customer

satisfaction.

Past research studies suggested that there are four features, which are key drivers of the

customer value of cellular services: network quality, price, customer care, and personal

benefits (Booz, Allen & Hamilton, 1995, Danaher & Rust, 1996; Bolton, 1998; Gerpott,

1998; Wilfert, 1999).

The network quality refers to excellent indoor and outdoor coverage, voice clarity, and no

connection breakdowns.

Price refers to what is paid to obtain access to use the network.

Customer care refers to the quality of the information exchanged between customer and

supplier or network provider in response to enquiries and other activities initiated by the

network provider, for example presentation of invoices.

Personal benefits refer to the level of perception of the benefits of mobile

communications services by individual customers.

It is apparent from this review that one of the factors customers use to determine

satisfaction level is the benefits received from a product or service in comparism with

what is spent. Perceived value is not a focus of this study (however customer satisfaction

evaluation captures perceived value; the assessment shows what consumers value in the

service received). The suggested mobile services attributes (features) will be used to

assess customer satisfaction in this study.

4

McDougall and Levesque (2000) in their direct approach investigation on four service

firms (dentist clinic, automobile shop, restaurant, and haircut salon) demonstrated that

both core and relational service quality classes have significant impact on customer

satisfaction. Heskett et al. (1997) conducted studies on several service firms, such as

airline, restaurants, etc and reported that service quality, solely defined as relational

quality, has consistent effect on satisfaction and is regarded as key factor in delivering

customer satisfaction.

Customers determine satisfaction level of any purchased service by the perceptions of

quality received. Therefore, customer satisfaction assessment captures service quality and

in this study, the previous factors used to measure service quality (call quality, billing,

customer support, etc) of mobile telecoms will be used to assess customer satisfaction.

5

Problem Defination:-

To carry on the study the research has been conducted as per the marketing research

process. As the study requires the people’s opinion it will help to know the satisfaction

level of customers of two major telecom service provider of India i.e. Airtel and

Vodafone also the opinion regarding the services provided by Airtel and Vodafone.

Service providers need to form a continuous lasting relationship with their customers to

know them better and satisfy their needs adequately.

Studies conducted to explore factors affecting satisfaction, loyalty and retention in mobile

telecommunications industry. By this research I tried to compare customer’s satisfaction of

about Airtel and Vodafone. For this study I had collected the primary data through

questionnaire and used the internet for secondary information for To understand and analyze

about the customer choices and factors that satisfy a customer’s expectation from Airtel and

Vodafone in Dehradun and collect feedback from group of people.

To collect primary data survey through questionnaire and personal interview is

conducted on individuals. This study is limited to the Dehradun only. The sample size

that I had taken is 50.

Objective of the study:-

1. To know the factors that satisfy a mobile customer.

2. To compare customer satisfaction of Airtel and Vodafone.

6

Nature and the scope of the study

"Scope" defines the parameters of my research this can be an object, or a theory process, activity.

Describing either future, current or past knowledge or statements of descriptive activity,

experience etc. Scope always unless of the unlimited nature (specific) will define specific

boundaries. Such as a manual is used to define employee duties or company procedures, studies

are used to obtain and knowledge to arrive at a logical finishing point. The definitions of scope

are the "borders" where the objective, knowledge, instruction or outcome of the activity is found.

This study will help us to understand customers, preference and their needs expected from Airtel

and Vodafone. This study will not only help me as a student but it also assists to know the

comparison between satisfaction level of the Airtel and Vodafone. Customer satisfaction refers

to the extent to which customers are happy with the products and services provided by a

business. Customer satisfaction levels can be measured using survey techniques and

questionnaires. Gaining high levels of customer satisfaction is very important to a business

because satisfied customers are most likely to be loyal and to make repeated orders and to use a

wide range of services offered by service provider in telecom sector. The need to satisfy

customer for success in telecom sector is very obvious. The income of all commercial enterprises

is derived from the payments received for the products and services to its external customers.

Customers are the sole reason for the existence of commercial establishments. Since sales are the

most important goal of any commercial enterprise, it becomes necessary to satisfy customers.

For customer satisfaction it is necessary to establish and maintain certain important

characteristics like:

a. Quality

b. Fair prices

c. Good customer handling skills

d. Efficient delivery

e. Serious consideration of consumer complaints.

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Satisfaction is the feeling of pleasure or disappointment attained from comparing a products

perceived performance (outcome) in relation to his or her expectations. If the performance falls

short of expectations, the customer is dissatisfied. If the performance matches the expectations,

the customer is satisfied. If the performance exceeds expectations, the customer is highly

satisfied or delighted.

My study will help in:-

1. To get close to the customer – This will help to understand customers more, their needs,

the attributes that are most important, and their effect on the customer's decision making,

the relative importance of the attributes and the performance evaluation of the firm

delivery of each attribute. This process helps to provide enabling communication with

customers.

2. Measure continuous improvement - The important attributes of customers can be

incorporated into the internal measurement to evaluate the value-added process in the

company. This process involves comparing performance against internal standards

(process control and improvement), and comparing performance against external

standards (benchmarking).

3. To achieve customer-driven improvement – The data collected from customers can be

developed into sources of innovations and this can help to achieve customer driven

improvement. This requires a comprehensive database and not just records of sales. This

process helps to identify opportunities for improvement (quality costing).

4. To measure competitive strengths and weaknesses - determine customer perceptions

of competitive choices and companies.

5. To link customer satisfaction measurement data to internal system.

8

Limitation of the study:-

Every research has some limitations. So the limitations of this study are as following:

1. Sample size of the study is taken as 50. Which is considered as whole population.

But people have their own choices. So, it cannot be 100% correct.

2. Study is limit to Dehradun only.

3. There is no classification of rural and urban area, choices may be different according to

area.

4. There is no classification based on age, choices may be changed on the age basis.

5. There is no classification on the income basis, choices may be different on the income

basis.

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CUSTOMER SATISFACTION

WHAT IS CUSTOMER SATISFACTION?

Customer satisfaction is a term frequently used in marketing. It is a measure of how

products and services supplied by a company meet or surpass customer expectation.

Customer satisfaction is defined as "the number of customers, or percentage of total

customers, whose reported experience with a firm, its products, or its services (ratings)

exceeds specifies satisfaction goals." In a survey of nearly 200 senior marketing

managers, 71 percent responded that they found a customer satisfaction metric very

useful in managing and monitoring their businesses.

It is seen as a key performance indicator within business and is often part of a Balanced

Scorecard. In a competitive marketplace where businesses compete for customers,

customer satisfaction is seen as a key differentiator and increasingly has become a key

element of business strategy.

"Within organizations, customer satisfaction ratings can have powerful effects. They

focus employees on the importance of fulfilling customers’ expectations. Furthermore,

when these ratings dip, they warn of problems that can affect sales and profitability. . . .

These metrics quantify an important dynamic. When a brand has loyal customers, it gains

positive word-of-mouth marketing, which is both free and highly effective."

Therefore, it is essential for businesses to effectively manage customer satisfaction. To be

able do this, firms need reliable and representative measures of satisfaction.

"In researching satisfaction, firms generally ask customers whether their product or

service has met or exceeded expectations. Thus, expectations are a key factor behind

satisfaction. When customers have high expectations and the reality falls short, they will

be disappointed and will likely rate their experience as less than satisfying. For this

reason, a luxury resort, for example, might receive a lower satisfaction rating than a

budget motel—even though its facilities and service would be deemed superior in

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'absolute' terms." The importance of customer satisfaction diminishes when a firm has

increased bargaining power. For example, cell phone plan providers, such as AT&T and

Verizon, participate in an industry that is an oligopoly, where only a few suppliers of a

certain product or service exist. As such, many cell phone plan contracts have a lot of fine

print with provisions that they would never get away if there were, say, a hundred cell

phone plan providers, because customer satisfaction would be far too low, and customers

would easily have the option of leaving for a better contract offer.

There is a substantial body of empirical literature that establishes the benefits of customer

satisfaction for firms.

"Customer satisfaction provides a leading indicator of consumer purchase intentions and

loyalty." "Customer satisfaction data are among the most frequently collected indicators

of market perceptions. Their principal use is twofold:"

1. "Within organizations, the collection, analysis and dissemination of these data send a

message about the importance of tending to customers and ensuring that they have a

positive experience with the company’s goods and services."

2. "Although sales or market share can indicate how well a firm is performing currently,

satisfaction is perhaps the best indicator of how likely it is that the firm’s customers will

make further purchases in the future. Much research has focused on the relationship

between customer satisfaction and retention. Studies indicate that the ramifications of

satisfaction are most strongly realized at the extremes." On a five-point scale,

"individuals who rate their satisfaction level as '5' are likely to become return customers

and might even evangelize for the firm. (A second important metric related to satisfaction

is willingness to recommend. This metric is defined as "The percentage of surveyed

customers who indicate that they would recommend a brand to friends." When a

customer is satisfied with a product, he or she might recommend it to friends, relatives

and colleagues. This can be a powerful marketing advantage).

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Importance of customer satisfaction

Customer satisfaction is important because it provides marketers and business owners with a

metric that they can use to manage and improve their businesses.

In a survey of nearly 200 senior marketing managers, 71 percent responded that they found a

customer satisfaction metric very useful in managing and monitoring their businesses.

Reasons why customer satisfaction is so important:-

1. It’s a leading indicator of consumer repurchase intentions and loyalty: Customer

satisfaction is the best indicator of how likely a customer will make a purchase in the future.

Asking customers to rate their satisfaction on a scale of 1-10 is a good way to see if they will

become repeat customers or even advocates.

Any customers that give you a rating of 7 and above, can be considered satisfied, and you can

safely expect them to come back and make repeat purchases. Customers who give you a rating of

9 or 10 are your potential customer advocates who you can leverage to become evangelists for

your company.

Scores of 6 and below are warning signs that a customer is unhappy and at risk of leaving. These

customers need to be put on a customer watch list and followed up so you can determine why

their satisfaction is low.

2. It’s a point of differentiation: In a competitive marketplace where businesses compete for

customers; customer satisfaction is seen as a key differentiator. Businesses who succeed in these

cut-throat environments are the ones that make customer satisfaction a key element of their

business strategy.

3. It reduces customer churn: An Accenture global customer satisfaction report (2008) found

that price is not the main reason for customer churn; it is actually due to the overall poor quality

of customer service.

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Customer satisfaction is the metric we can use to reduce customer churn. By measuring and

tracking customer satisfaction we can put new processes in place to increase the overall quality

of our customer service.

4. It increases customer lifetime value: A study by InfoQuest found that a ‘totally satisfied

customer’ contributes 2.6 times more revenue than a ‘somewhat satisfied customer’.

Furthermore, a ‘totally satisfied customer’ contributes 14 times more revenue than a ‘somewhat

dissatisfied customer’.

Satisfaction plays a significant role in how much revenue a customer generates for our business.

Successful businesses understand the importance of customer lifetime value (CLV). If we

increase CLV, we increase the returns on your marketing dollar.

5. It reduces negative word of mouth: McKinsey found that an unhappy customer tells

between 9-15 people about their experience. In fact, 13% of unhappy customers tell over 20

people about their experience. That’s a lot of negative word of mouth.

Customer satisfaction is tightly linked to revenue and repeat purchases. What often gets forgotten

is how customer satisfaction negatively impacts your business. It’s one thing to lose a customer

because they were unhappy. It’s another thing completely to lose 20 customers because of some

bad word of mouth.

To eliminate bad word of mouth we need to measure customer satisfaction on an ongoing basis.

Tracking changes in satisfaction will help us identify if customers are actually happy with our

product or service.

6. It’s cheaper to retain customers than acquire new ones: This is probably the most

publicized customer satisfaction statistic out there. It costs six to seven times more to acquire

new customers than it does to retain existing customers.

If that stat does not strike accord with you then there’s not much else I can do to demonstrate

why customer satisfaction is important.

13

Telecom sector in India

India is the world’s second-largest telecommunications market, with 898 million subscribers as

of March 2013. The sector's revenue grew by 13.4 per cent to reach US$ 64.1 billion in FY12.

Wireless and wire line revenue increased at a compounded annual growth rate (CAGR) of 11.9

per cent to reach US$ 40.8 billion over FY07-12.; revenues from the telecom equipment segment

in FY12 stood at US$ 23.5 billion as compared to US$ 23.4 billion in FY11.

Availability of affordable smartphones and lower rates are expected to drive growth in the Indian

telecom industry. The Government of India (GOI) has been proactive in its efforts to transform

India into a global telecommunication hub. The government has allowed foreign direct

investment (FDI) of up to 74 per cent in basic and cellular, unified access, national/international

long distance, and V-Sat services as well as public mobile radio trucked services. FDI of up

to100 per cent is permitted for infrastructure providers offering dark fibre, electronic mail and

voice mail.

The surge in the subscriber base has necessitated a network expansion covering a wider area,

thereby creating a need for significant investment in telecom infrastructure. Telecom

infrastructure in India is expected to increase at a CAGR of 20 per cent during 2008-15 to reach

571,000 towers in 2015.

Telecommunication has supported the socioeconomic development of India and has played a

significant role to narrow down the rural-urban digital divide to some extent. It also has helped to

increase the transparency of governance with the introduction of e-governance in India. The

government has pragmatically used modern telecommunication facilities to deliver mass

education programs for the rural folk of India.

14

Communications in India

Revenue (Total)

USD 33,350 million[1]

Telephony

Telephone Subscribers (Total) (2013)

915.19 million (December 2013)[2]

Fixed lines (December 2013)

28.89 million

Mobile phones (2013)

886.3 million

Monthly telephone additions (Net) (December 2013)

5.5 million

Teledensity (2013)

74.02%

Rural Teledensity

42.67%[2]

Internet access

15

Percent household access (total), 2012

10.2% of households (137 million)

Percent broadband household access

1.18% of households (14.31 million)

Broadband internet users

55.20 million (December 2013)

Internet Service Providers (2012)

155

Country code top level domain

.in

Broadcasting

Television broadcast stations (2009)

1,400

Radio broadcast stations

800

16

(1997)

Further developments and milestones in Indian telecom sector

Pre-1902 – Cable telegraph, Sandeep Sharma did this.

1902 – First wireless telegraph station established between Sagar Island and Sandalhead.

1907 – First Central Battery of telephones introduced in Kanpur.

1913–1914 – First Automatic Exchange installed in Shimla.

1927 – Radio-telegraph system between the UK and India, with Imperial Wireless Chain

beam stations at Khadki and Daund. Inaugurated by Lord Irwin on 23 July by exchanging

greetings with King George V.

1933 – Radiotelephone system inaugurated between the UK and India.

1953 – 12 channel carrier system introduced.

1960 – First subscriber trunk dialling route commissioned between Lucknow and

KANPUR.

1975 – First PCM system commissioned between Mumbai City and Andheri telephone

exchanges.

1976 – First digital microwave junction.

1979 – First optical fiber system for local junction commissioned at Pune.

1980 – First satellite earth station for domestic communications established at

Sikandrabad, [[Uttar Pradesh|U.P.] Noida Sector 62SCMS ].

1983 – First analogue Stored Programme Control exchange for trunk lines commissioned

at Mumbai.

1984 – C-DOT established for indigenous development and production of digital

exchanges.

1995 – First mobile telephone service started on non-commercial basis on 15 August

1995 in Delhi.

1995 – Internet Introduced in India starting with Laxmi Nagar Delhi on 15 August 1995.

17

According to data provided by Minister of state for Communication and IT Milind

Deora,, as of 30 November 2012, India has 736,654 base transceiver stations (2G GSM &

CDMA, and 3G).Of those, 96,212 base transceiver stations provide 3G mobile and data

services. Out of India’s 640 districts, 610 districts are covered by 3G services as of 30

November 2012.

The country is divided into multiple zones, called circles (roughly along state

boundaries). Government and several private players run local and long distance

telephone services. Competition has caused prices to drop and calls across India are one

of the cheapest in the world. The rates are supposed to go down further with new

measures to be taken by the Information Ministry. In September 2004, the number of

mobile phone connections crossed the number of fixed-line connections and presently

dwarfs the wire line segment by a ratio of around 20:1. The mobile subscriber base has

grown by a factor of over a hundred and thirty, from 5 million subscribers in 2001 to over

929 million subscribers as of May 2012. India primarily follows the GSM mobile system,

in the 900 MHz band. Recent operators also operate in the 1800 MHz band. The

dominant players are Airtel, Reliance Infocomm, Vodafone, Idea cellular and

BSNL/MTNL. There are many smaller players, with operations in only a few states.

International roaming agreements exist between most operators and many foreign

carriers. The government allowed Mobile number Portability (MNP) which enables

mobile telephone users to retain their mobile telephone numbers when changing from one

mobile network operator to another. India is divided into 22 telecom circles:

18

Telecom circle

Wireline subscriber

base in million(May

2012)

Wireless subscriber

base in million(May

2012)

Teledensity (May 2012)

Andhra Pradesh 2.33 66.6 80.46Assam 0.20 14.6 47.7Bihar & Jharkhand

0.56 62.97 48.37

Delhi 2.9 42.95 239.91Gujarat & Daman & Diu

1.82 54.32 92.56

Haryana 0.59 23.00 90.86Himachal Pradesh

0.30 7.41 112.29

Jammu and Kashmir

0.20 6.57 56.92

Karnataka 2.48 56.63 98.22Kerala & Lakshadweep

3.18 34.51 107.85

Kolkata 1.18 25.25 Not available*

Madhya Pradesh & Chhattisgarh

1.13 53.30 55.38

Maharashtra & Goa (excluding Mumbai )

2.64 71.00 96.71 *

Mumbai* 3.0 35.93 Not available *

North East 0.25 8.76 64.74Orissa 0.40 26.27 64.73Punjab 1.44 31.17 110.22Rajasthan 1.14 49.52 73.26Tamil Nadu(including Chennai since 2005)

3.16 78.96 118.29

Uttar Pradesh(East)

1.20 77.74 62.65(Combined)*

Uttar Pradesh(West) & Uttarakhand

0.79 55.12 62.65(Combined)*

West 0.62 46.79 80.56 *

19

Telecom circle

Wireline subscriber

base in million(May

2012)

Wireless subscriber

base in million(May

2012)

Teledensity (May 2012)

Bengal(excluding Kolkata)

Recent government policies and growth targets:

All villages shall receive telecom facilities by the end of 2002.

A Communication Convergence Bill introduced in the Parliament on 31 August 2001 is

presently before the Standing Committee of Parliament on Telecom and IT.

National Long Distance Service (NLD) is opened for unrestricted entry.

The International Long Distance Services (ILDS) have been opened to competition.

The basic services are open to competition.

In addition to the existing three, a fourth cellular operator, one each in four metros and

thirteen circles, has been permitted. Cellular operators have been permitted to provide all

types of mobile services including voice and non-voice messages, data services and

PCOs utilizing any type of network equipment, including circuit and/or package switches

that meet certain required standards.

Policies allowing private participation have been announced as per the New Telecom

Policy (NTP), 1999 in several new services, which include Global Mobile Personal

Communication by Satellite (GMPCS) Service, digital Public Mobile Radio Trunked

Service (PMRTS) and Voice Mail/ Audio text/ Unified Messaging Services.

Wireless Local Loop (WLL) has been introduced to provide telephone connections in

urban, semi-urban and rural areas promptly.

Two telecom PSUs, VSNL and HTL have been disinvested

Steps are being taken to fulfill Universal Service Obligation (USO), funding, and

administration.

A decision to permit Community Phone Service has been announced.

Multiple Fixed Service Providers (FSPs) licensing guidelines were announced.

Internet Service Providers (ISPs) have been allowed to set up International Internet

Gateways, both Satellite and Landing stations for submarine optical fibre cables.

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Two categories of infrastructure providers have been allowed to provide end-to-end

bandwidth and dark fibre, right of way, towers, duct space etc.

Guidelines have been issued by the Government to open up Internet telephony (IP).

National Optical Fibre Network (NOFN), a project aimed to ensure broadband

connectivity to over two lakh (200,000) gram panchayats of India by 2016.

India’s 2G auction of 2014

India’s 2G auction of 2014 concluded after 11 days and 68 rounds of bidding. Several

participating operators have issued statements reacting to this and stating their plans on how they

intend to use the spectrum:

Reliance Jio Infocomm: Reliance Jio Infocomm says it will be using the spectrum acquired

in 1800MHz band along with its pan-India 2300MHz spectrum to address the expected increase

in demand for digital services and improve its in-building coverage. 

What’s worth noting here is that Jio has mentioned digital services here as opposed to voice.

Remember that Reliance Jio is looking to bundle several digital services like live TV, cloud-

based file storage and synchronization service, music and video-on demand services among

others along with its 4G service, whenever it launches in India.

While there is not much information on Reliance Jio’s 4G rollout plans as yet, an ET report cites

a sourse to say Reliance Jio will be offering voice and 4G services to consumers through the

1800MHz band while enterprise customers will receive these services through the 2300 MHz

band.

This is quite an interesting approach, since it solves a major pain point of a lack of 4G device

ecosystem which supports the 2300MHz band, being used by Airtel and Reliance Jio for its 4G

services. Consumers will be able to use 4G services on their existing phones while enterprises

can spend on TD-LTE supported equipments to make use of 4G services. This will also enable

Reliance Jio to go aggressive on its consumer-focused 4G service.

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Reliance Jio Infocomm has to pay a total Rs 11,054 crore for the spectrum acquired, of which

33% (around Rs 3,647 crore) is being paid initially and the remaining through ten annual

installments after the two year moratorium.

- Bharti Airtel also seems to have similar plans: It plans to use the acquired spectrum to roll out

high speed 4G networks using FD-LTE technology in the 1800 MHz band besides its existing

TD-LTE roll-out in the 2300 MHz band, so as to secure a pan-India 4G footprint.

Note that Bharti Airtel is currently the only operator offering 4G services in India and had

claimed to have 0.1M 4G subscribers in the preceding quarter. This was despite a lack of TD-

LTE supported 4G device ecosystem in India, due to which the company is currently offering 4G

service through multi-mode USB dongles and Indoor Wireless gateways, although the company

had stated plans to launch 4G LTE services for smartphones in December 2013.

The telco said most circles in the 1800MHz showed a balanced approach between the revenue

for the exchequer and industry viability due to enough spectrum being put up for auctions while

the 900 MHz band resulted in artificial and unrealistic prices due to spectrum shortage and

undesirable position of incumbents who were forced to bid for this spectrum to protect their

investments and interest of their customers.

Gopal Vittal, Joint MD & CEO – India, Bharti Airtel said future auctions should ensure that

more spectrum should be secured in the 900 MHz band from other agencies and operators who

are grossly underutilizing this important spectrum band. He also added that this auction

highlights the urgent need to vacate E-GSM spectrum in the 800 MHz band which is

currently being used for older technologies or lying unused with certain agencies.

Bharti Airtel has acquired 115MHz spectrum in the auction, for which it has to pay Rs 18,529.64

crore. The company will be making an upfront payment of Rs 5,425 crore initially, with the

balance to be paid in ten annual installments of Rs 1,310 crore each, after the two year

moratorium.

- Vodafone India: Vodafone India says it has retained the existing 900 MHz spectrum in three

most important circles - Mumbai, Delhi and Kolkata and has bought spectrum in the 1800MHz

22

band in Mumbai, Delhi, Kolkata, Karnataka and Kerala to roll out 4G services. The company

says these circles currently make up for 50% of Vodafone India’s data revenues.

The telco points out it is the only operator to provide both 2G and 3G services on 900MHz in

Mumbai and Vodafone Mumbai is the only operator in India to have data capabilities on all the

commercial spectrum bands: 3G on 900MHz and 2100MHz and 4G on 1800MHz

Vodafone is spending a total Rs 19,600 crore in this auction of which Rs 5,600 will be payable in

this fiscal.

Marten Pieters, MD & CEO, Vodafone India however raised debt concerns, saying much of the

auction spends will end up as debt on the balance sheets of the mobile operators, which will hurt

the operators’ ability to invest in the roll out of new technologies and invariably result in higher

prices and reduced service levels for consumers.

He also added that the industry is still spectrum starved compared with other countries and more

spectrum should be made available in all bands on reasonable terms, if the government intends to

meet their ambitious broadband objectives.

- Idea Cellular: Idea Cellular plans to use the spectrum acquired to launch 4G services in eight

of its key revenue markets (Kerala, Maharashtra & Goa, Andhra Pradesh, Karnataka, Madhya

Pradesh & Chhattisgarh, Punjab, Haryana, and North East), which represents 64% of its

revenues.

It also now has the ability to extend its 3G services to the key Delhi circle. With this, Idea can

now roll out 3G spectrum in 12 circles which covers almost 79% of its gross revenues.

Idea also pointed out it can now roll out all the three technologies – GSM, 3G and 4G in six

markets (Kerala, Andhra Pradesh, Maharashtra & Goa, Madhya Pradesh & Chhattisgarh, Punjab,

and Haryana) which represents 53% of its revenues.

That being said, it doesn’t look like Idea is looking to roll out 4G services in these circles

anytime soon. Idea Cellular Managing Director Himanshu Kapania had told in an interview that

23

4G is only a long term plan for them since they believe the ecosystem has to fully develop for 4G

services.

Idea Cellular is spending a total Rs 10,400 crore at Rs. 160 crore per MHz in the auctions and the

company plans to cover this in less than two years on EBITDA terms, based on the current

EBITDA trends in the above mentioned nine markets. The company is paying Rs 3,100 crore

initially and the balance amount will be paid in ten equal installments with a 10% interest

after the first two year moratorium.

Uninor: After closing down operations in seven circles in 2012-2013, Telenor group which

operates in India as Uninor seems to be slowly increasing its footprint: It has acquired spectrum

in a new circle of Assam, where it has secured 6 MHz spectrum for Rs 216.6 crore. This is along

with acquiring additional spectrum in four of its six existing circles in the 1800 MHz band - UP

East, UP West, Bihar & Jharkhand and Andhra Pradesh.

The company will be shortly launch its services in Assam and claims the new circle will allow

them to potentially serve to an additional 30 million population. With the inclusion of

Assam, Uninor will be increasing its footprint to seven circles in India.

Telenor believes that Assam fits well to the Uninor’s new model, wherein the telco focuses only

on basic services (voice, SMS and basic Internet) and aims to offer the most aggressive plans in

these services. This was after Telenor noticed that data wasn’t contributing to its revenue growth

and this trend was likely to continue for a few years. Uninor also mentioned that additional

spectrum acquired will allow them to improve its voice and data capacity by approximately 20%

to 25% in four of its six operational circles.

In the remaining two circles (Gujarat & Maharashtra), Uninor will be improving capacity and

coverage by significantly expanding its network sites. Earlier in the week, Telenor had stated

plans to redeploy 5,000 sites for geographical expansion in existing six circles over the next five

months and was planning to invest NOK 300 million (around Rs 304.8 crore) on this initiative.

24

2014 is the Year of ‘Project Phase’ for Indian Telecom Industry

The Indian telecom industry is at a crossroads currently. While the growth of voice services has

almost stagnated (with voice traffic growing at the rate of 2% to 3% year-on-year), data services

are growing rapidly (12% 2G data traffic growth and 17% 3G data traffic growth quarter-on-

quarter, for a leading carrier). It is evident for everyone in the industry that the next phase of

growth will be driven primarily by data services.

However, the existing network resources and infrastructure such as spectrum, last mile

infrastructure, backhaul, active equipment or core infrastructure are insufficient to offer

fullfledged data services at the mass-market level. At an industry level, the currently allocated

four 5 MHz blocks of 2100 MHz cannot offer 3G services to more that 10% to 12% of the

existing mobile subscriber base (by our estimates). And, the 20 MHz block of contiguous 2300

MHz spectrum used for offering TD-LTE (4G) services has inherent issues of lack of coverage

and in-building penetration. Also, of the ~42 mn copper lines currently laid in the country, only

20 mn to 22 mn are capable of offering DSL services.

Apart from issues/limitations pertaining to the availability (and optimization) of network

resources, there exist other structural issues including lack of investments, high debt, varied

business, operations & monetization models, lack of visionary teams, etc. There exist multiple

issues at each stage, and the types of issues are unique and vary for each player in the industry.

Data broadband services (to the mass-market) will eventually have to be offered through a

combination of heterogeneous networks (wireline/short-range wireless for dense urban and long-

25

range wireless for semi-urban & rural), technologies (3G/WiFi/4G; HFC/FTTx) and spectrum

bands (900/2100 MHz for 3G and 850/1800/2300 MHz, and in the long term 700 MHz for 4G

services). Achieving this along with balancing the current services, business and operations, and

making requisite changes (such as migrating existing subscriber base to a different

network/spectrum band, in order to free up spectrum/network resources for potentially offering

data services, with minimal service disruption) is not a quick or easy task, especially for

incumbent players.

TRAI (Telecom Regulatory Authority of India)

The entry of private service providers brought with it the inevitable need for independent

regulation. The Telecom Regulatory Authority of India (TRAI) was, thus, established with effect

from 20 February 1997 by an Act of Parliament, called the Telecom Regulatory Authority of

India Act, 1997, to regulate telecom services, including fixation/revision of tariffs for telecom

services which were earlier vested in the Central Government.

TRAI's mission is to create and nurture conditions for growth of telecommunications in the

country in a manner and at a pace which will enable India to play a leading role in emerging

global information society. One of the main objectives of TRAI is to provide a fair and

transparent policy environment which promotes a level playing field and facilitates fair

competition.

In pursuance of above objective TRAI has issued from time to time a large number of

regulations, orders and directives to deal with issues coming before it and provided the required

direction to the evolution of Indian telecom market from a Government owned monopoly to a

multi operator multi service open competitive market. The directions, orders and regulations

issued cover a wide range of subjects including tariff, interconnection and quality of service as

well as governance of the Authority.

The TRAI Act was amended by an ordinance, effective from 24 January 2000, establishing a

Telecommunications Dispute Settlement and Appellate Tribunal (TDSAT) to take over the

adjudicatory and disputes functions from TRAI. TDSAT was set up to adjudicate any dispute

between a licensor and a licensee, between two or more service providers, between a service

26

provider and a group of consumers, and to hear and dispose of appeals against any direction,

decision or order of TRAI. The mission of TRAI is to create and nurture an environment which

will enable the quick growth of the telecommunication sector in the country. One of the major

objectives of TRAI is to provide a transparent policy environment. TRAI has regularly issued

orders and directions on various subjects like tariff, interconnections, Direct To Home (DTH)

services and mobile number portability.

In 2000, the Telecom Disputes Settlement Appellate Tribunal (TDSAT) was constituted through

an amendment of the 1997 act, through an ordinance. The primary objective of TDSAT's

establishment was to release TRAI from adjudicatory and dispute settlement functions in order to

strengthen the regulatory framework. Any dispute involving parties like licensor, licensee,

service provider and consumers are resolved by TDSAT. Also, any direction, order or decision

of TRAI can be challenged by appealing in TDSAT.

TRAI functions through a Secretariat headed by a Secretary. All proposals for considerations are

processed via Secretary, which organizes the agenda for Authority meetings (consulting with the

Chairman), organizes preparation of minutes and issues regulations etc. in accordance to the

meetings. The secretary is assisted by Advisors, namely Mobile Network, Interconnection &

Fixed Network, Broadband and Policy Analysis, Quality of Service, Broadcasting & Cable

Services, Economic Regulation, Financial Analysis & IFA, Legal, Consumer Affairs &

International Relation and RE & Administration & Personnel.Officers are selected from the

premier Indian Administrative Service and Indian Revenue Service and also from the Indian

Telecom Service.

Bangalore Regional Office

TRAI Bangalore Regional Office is the office set up for ensuring compliance of tariff related

guidelines and effective monitoring of retail tariff of telecommunications, broadcasting and cable

services in the Kerala and Karnataka region. The current Advisor, Telecom Regulatory Authority

of India is Dr. Sibichen K Mathew IRS. Earlier TRAI has been operating only from Delhi and

monitors performance of operators by relying on the data received from service providers and its

own agencies. Now, the new office will help the regulator in assessing required information

directly on the field. The Advisor is assisted by two Dy Advisors and 2 Senior Research Officers.

27

COMPANIES PROFILE

AIRTEL

AND

28

VODAFONE

Bharti Airtel

Bharti Airtel Limited, commonly known as Airtel, is an Indian multinational telecommunication

services, company headquartered in New Delhi, India. It operates in 20 countries across South

Asia, Africa, and the Channel Islands. Airtel has a GSM network in all countries in which it

operates, providing 2G, 3G and 4G services depending upon the country of operation. Airtel is

the world’s second largest mobile telecommunications company by subscribers, with over 275

million subscribers across 20 countries as of July 2013. It is the largest cellular service provider

in India, with 192.22 million subscribers as of August 2013. Airtel is the Second largest in-

country mobile operator by subscriber base, behind China Mobile.

Airtel is credited with pioneering the business strategy of outsourcing all of its business

operations except marketing, sales and finance and building the 'minutes factory' model of low

cost and high volumes. The strategy has since been copied by several operators. Its network—

base stations, microwave links, etc.—is maintained by Ericsson and Nokia whereas IT support is

provided by IBM and transmission towers are maintained by another company (Bharti Infratel

Ltd. in India). Ericsson agreed for the first time to be paid by the minute for installation and

maintenance of their equipment rather than being paid up front, which allowed Airtel to provide

low call rates of 1/minute (US$0.02/minute). During the last financial year (2009–10),

Bharti negotiated for its strategic partner Alcatel-Lucent to manage the network infrastructure for

the tele-media business. On 31 May 2012, Bharti Airtel awarded the three-year contract to

Alcatel-Lucent for setting up an Internet Protocol access network (mobile backhaul) across the

country. This would help consumer’s access internet at faster speed and high quality internet

browsing on mobile handsets.

29

Sunil Bharti Mittal founded the Bharti Group. In 1983, Mittal was in an agreement with

Germany's Siemens to manufacture push-button telephone models for the Indian market. In

1986, Mittal incorporated Bharti Telecom Limited (BTL), and his company became the first in

India to offer push-button telephones, establishing the basis of Bharti Enterprises. By the early

1990s, Sunil Mittal had also launched the country's first fax machines and its first cordless

telephones. In 1992, Mittal won a bid to build a cellular phone network in Delhi. In 1995, Mittal

incorporated the cellular operations as Bharti Tele-Ventures and launched service in Delhi.

In 1996, cellular service was extended to Himachal Pradesh. In 1999, Bharti Enterprises acquired

control of JT Holdings, and extended cellular operations to Karnataka and Andhra Pradesh. In

2000, Bharti acquired control of Skycell Communications, in Chennai. In 2001, the company

acquired control of Spice Cell in Calcutta. Bharti Enterprises went public in 2002, and the

company was listed on Bombay Stock Exchange and National Stock Exchange of India. In 2003,

the cellular phone operations were rebranded under the single Airtel brand. In 2004, Bharti

acquired control of Hexacom and entered Rajasthan. In 2005, Bharti extended its network to

Andaman and Nicobar. This expansion allowed it to offer voice services all across India. In

2009, Airtel launched its first international mobile network in Sri Lanka. In 2010, Airtel acquired

the African operations of the Kuwait based Zain Telecom. In March 2012, Airtel launched a

mobile operation in Rwanda.

Airtel launched "Hello Tunes", a Caller ring back tone service (CRBT), in July 2004 becoming

to the first operator in India to do so. The Airtel theme song, composed by A.R. Rahman, was the

most popular tune on that year.

On 26 February 2013, Airtel announced that it had deployed Ericsson's Mobile Broadband

Charging (MBC) solution and completely modernised its prepaid services for its subscribers in

India. As a part of the deal, Ericsson's multi service MBC suite allows prepaid customers to have

personalized profile based data charging plans. Prepaid customers will be able to customize their

data plans across mobility, fixed line and broadband by cross bundling across multiple domains

(2G, 3G, 4G/LTE & Wi-Fi). It will also offer flexible multi service charging in geographical

redundant mode, making Airtel the first operator to implement geographical redundancy at such

a large scale. In May 2013, Bharti Infotel paid Rs 50,000 as compensation to a customer "for

30

unfair trade practices". The customer alleged that the company continued to aggressively demand

payment despite customer requests for disconnection of service.

Airtel's initial corporate structure concentrated on the hierarchy of the operations inside the

company as a whole. The structure depicted the corresponding operation/region of different in-

charges and it didn't hold anyone responsible for each of its services. So, the company found it

better to restructure its corporate hierarchy. The transformed organizational structure has two

distinct Customer Business Units (CBU) with clear focus on B2C (Business to Customer) and

B2B (Business to Business) segments. Bharti Airtel's B2C business unit will comprehensively

service the retail consumers, homes and small offices, by combining the erstwhile business units

– Mobile, Telemedia, Digital TV, and other emerging businesses (like M-commerce, M-health,

M-advertising etc.). The B2C organization will consist of Consumer Business and Market

Operations.

Airtel operates in the following countries:

Country Site Remarks

BangladeshAirtel Bangladesh

Airtel Bangladesh had about 8 million customers as on Sep 2013.[

Burkina Faso

Airtel Burkina Faso

Airtel Burkina Faso is the dominant player with 1,433,000 customers representing 50% market share.

Chad Airtel ChadAirtel Chad is the No. 1 operator with 69% market share.

Democratic Republic of the Congo

Airtel DRCAirtel is the market leader with almost 5 million customers at the end of 2010.

Gabon Airtel GabonAirtel Gabon has 829,000 customers and its market share stood at 61%.

Ghana Airtel GhanaAirtel Ghana had about 1.76 million customers at the end of 2010.

India AirtelAirtel is the market leader with almost 193.4 million customers as on 30 Sep 2013.

Kenya Airtel KenyaAirtel Kenya is the second largest operator and has 4 million customers.

MadagascarAirtel Madagascar

Airtel holds second place in the mobile telecom market in Madagascar, has a 39% market share and over 1.4 million customers.

Malawi Airtel Airtel Malawi is the market leader with a

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Malawi market share of 72%.

Niger Airtel NigerAirtel Niger is the market leader with a 68% market share.

Nigeria Airtel NigeriaRepublic of the Congo

Airtel Congo B

Airtel Congo is the market leader with a 55% market share.

RwandaAirtel Rwanda

Airtel launched services in Rwanda on 30 March 2012.

SeychellesAirtel Seychelles

Airtel is the leading comprehensive telecommunications services providers with over 55% market share of mobile market in Seychelles.

Sierra Leone

Airtel Sierra Leone

Sri LankaAirtel Sri Lanka

Airtel Sri Lanka commenced operations on 12 January 2009. It had about 1.8 million mobile customers at the end of 2010.

TanzaniaAirtel Tanzania

Airtel Tanzania is the market leader with a 38% market share.

UgandaAirtel Uganda

Airtel Uganda stands as the No. 2 operator with a market share of 38%.

ZambiaAirtel Zambia

Airtel Zambia is the market leader with 69% market share.]

Channel Islands† : JerseyGuernsey

Airtel DRCAirtel operates in the Channel Islands under the brand name Airtel–Vodafone through an agreement with Vodafone.

†Jersey and Guernsey are British Crown Dependencies. They are not independent countries. Therefore, Airtel's countries of operation is considered to be 20.

Mobile Services:

Airtel operates in all telecom circles of India. Its network is present in 5,121 census towns and

457,053 non-census towns and villages, covering approximately 86.6% of the country's

population as of September 2012. Airtel is the largest operator in rural India with 83.82 million

subscribers as of April 2013.

Airtel is the 6th most valued brand according to an annual survey conducted by Brand

Finance and The Economic Times in 2010.

32

3G :

On 18 May 2010, the 3G spectrum auction was completed and Airtel paid the Indian government

122.95 billion (US$2.1 billion) for spectrum in 13 circles, the most amount spent by an

operator in that auction. Airtel won 3G licences in 13 telecom circles of India: Delhi, Mumbai,

Andhra Pradesh, Karnataka, Tamil Nadu, Uttar Pradesh (West), Rajasthan, West Bengal,

Himachal Pradesh, Bihar, Assam, North East, and Jammu & Kashmir. Airtel also operates 3G

services in Maharashtra & Goa and Kolkata circles through an agreement with Vodafone and in

Gujarat through an agreement with Idea. This gives Airtel a 3G presence in 15 out of 22 circles

in India. Airtel is fined by DoT 3.50 billion for not stopping offering 3G Services through

Roaming Pacts outside its Licensed Zones in Seven Circles.

On 20 September 2010, Bharti Airtel said that it had given contracts to Ericsson India, Nokia

Siemens Networks (NSN) and Huawei Technologies to set up infrastructure for providing 3G

services in the country. These vendors would plan, design, deploy and maintain 3G–HSPA (third

generation, high speed packet access) networks in 13 telecom circles where the company had

won 3G licences. While Airtel awarded network contracts for seven 3G circles to Ericsson India,

NSN would manage networks in three circles. Chinese telecom equipment vendor Huawei

Technologies was introduced as the third partner for three circles.

On 24 January 2011, Airtel launched 3G services in Bangalore, Karnataka – its largest circle by

revenue. With this launch, Airtel became the third private operator (fifth overall) to launch its 3G

services in the country following Tata Docomo and Reliance Communications. On 27 January

2011, Airtel launched 3G in Chennai and Coimbatore in Tamil Nadu. On 27 July 2011, 3G

services were launched in Kerala's 3 largest cities – Kochi, Kozhikode and Thrivanthapuram.

33

Airtel 3G services are available in 200 cities through its network and in 500 cities through intra-

circle roaming arrangements with other operators. Airtel had about 5.4 million 3G customers of

which 4 million are 3G data customers as of September 2012.

4G :

On 19 May 2010, the broadband wireless access (BWA) or 4G spectrum auction in India ended.

Airtel paid 33.1436 billion (US$550 million) for spectrum in 4 circles: Maharashtra and

Goa, Karnataka, Punjab and Kolkata. The company was allocated 20 MHz of BWA spectrum in

2.3 GHz frequency band. Airtel's TD-LTE network is built and operated by ZTE in Kolkata and

Punjab, Huawei in Karnataka, and Nokia Siemens Networks in Maharashtra and Goa. On 10

April 2012, Airtel launched 4G services through dongles and modems using TD-LTE technology

in Kolkata, becoming the first company in India to offer 4G services. The Kolkata launch was

followed by launches in Bangalore (7 May 2012), Pune (18 October 2012), and Chandigarh,

Mohali and Panchkula (25 March 2013). Airtel obtained 4G licenses and spectrum in the telecom

circles of Delhi, Haryana, Kerala and Mumbai after acquiring Wireless Business Services Private

Limited, a joint venture founded by Qualcomm, which had won BWA spectrum in those circles

in the 4G spectrum auction.

Airtel launched 4G services on mobile from February 2014. The first city to get the service was

Bangalore. Airtel provides voice services for its TD-LTE subscribers through its existing GSM

network, which made it the first operator in India to combine voice with TD-LTE services

through GSM network. Airtel selected Nokia Siemens Networks to deploy its Circuit Switched

Fall Back (CSFB) voice solution in Airtel's TD-LTE network in Pune. With CSFB, the network

can transfer customers to GSM platform to make and receive voice calls while retaining the TD-

LTE network for data services.

Airtel had 100,000 4G subscribers as of January 2014.

34

WiFi: Airtel has plans to launch WiFi services in India. It intends to start offering WiFi services

in Delhi NCR, Mumbai and Bangalore in initial phase. All plans will be on secure wireless

broadband internet with unlimited usage and will be session or time based. Users can use the

service by finding a hotspot, selecting 'airtel WiFi Zone', activating the voucher and then login to

start browsing.

Subscriber Base of Airtel

Bharti Airtel has about 243.336 million subscribers worldwide—232.95 million in India and

South Asia and 50.949 million in Africa as of the end of December 2011. The numbers include

mobile services subscribers in 19 countries and Indian Telemedia services and Digital services

subscribers.

India:

The Airtel wireless subscriber base according to Telecom Regulatory Authority of India (TRAI)

as of November 2012 was:

Metros

Delhi – 9,105,718

Mumbai – 3,58,7060

Kolkata – 3,606,616

Chennai – 3,428,293

"A" Circle

Andhra Pradesh – 18,041,904

Gujarat – 6,927,459

Karnataka – 16,044,964

Maharashtra – 9,849,973

Tamil Nadu – 10,094,293

35

"B" Circle

Haryana – 2,267,166

Kerala – 3,393,868

Madhya Pradesh – 9,675,239

Punjab – 6,851,338

Rajasthan – 14,385,762

Uttar Pradesh (East) – 15,105,455

Uttar Pradesh (West) – 6,556,052

West Bengal – 9,084,371

"C" Circle

Assam – 3,809,218

Bihar – 18,527,460

Himachal Pradesh – 1,915,405

Jammu and Kashmir – 2,300,268

North East India (excluding Assam) – 2,551,134

Orissa – 6,696,681

Airtel is the market leader in India with about 183 million wireless subscribers in India or about

20.62% market share at the end of November 2012. In 2013 version of the The Brand Trust

Report published by Trust Research Advisory, Airtel is placed as the most trusted mobile

operator brand in India.

36

Timelines:

The chronology of events since Bharti Tele-Ventures was incorporated in 1995:

1995

Bharti Cellular launched cellular services as "AirTel" in Delhi.

2004

On 19 October 2004, Airtel announced the launch of a BlackBerry Wireless Solution in

India. The launch is a result of a tie-up between Bharti Tele-Ventures Limited and

Research in Motion (RIM).

2010

On 18 May 2010, Airtel won 3G spectrum in 13 circles: Delhi, Mumbai, Andhra Pradesh,

Karnataka, Tamil Nadu, Uttar Pradesh (West), Rajasthan, West Bengal, Himachal

Pradesh, Bihar, Assam, North East, Jammu & Kashmir for 122.95 billion.

Bharti Airtel wins broadband spectrum in four circles: Maharashtra, Karnataka, Punjab

and Kolkata for 33.14 billion.

On 18 November 2010, Bharti Airtel announced a re-branding campaign wherein, they

would be referred as airtel, with a new logo.

On 20 December 2010, Airtel launched its new identity for Bangladesh subscribers.

On 23 December 2010, Airtel opened its first underground terrestrial fibre optic cable

built in alliance with China Telecom.

37

2011

On 24 January 2011, Airtel announced the launch of its 3G services in India.

On 31 January 2011, Airtel launched wallet service – Airtel Money in the millennium

city of Gurgaon.

On 18 February 2011, Airtel Digital TV brings cricket world cup in High Definition.

On 14 March 2011, Bharti Airtel announced the launch of 'Airtel Broadband TV'.

On 11 April 2011, Bharti Airtel and Apple bring the iPhone 4 to India.

On 18 April 2011, Bharti Airtel enters into a partnership with photo service Zoomin.com.

On 17 May 2011, Airtel launches the world’s first USSD-based Facebook access service

in India – Facebook by Fonetwish.

On 2 June 2011, Bharti Airtel offers on-demand online movie viewing services –

launches 'Airtel Movies'

On 16 June 2011, Airtel digital TV launches iKisaan – the world's first interactive service

in Hindi.

On 27 June 2011, Airtel 3G launches international video calling services.

On 7 July 2011, Bharti Airtel announces new organisation structure for its India and

South Asia operations.

On 18 July 2011, Airtel digital TV adds 41 new channels.

On 25 July 2011, Bharti Airtel Launches Facebook For Every Phone.

On 16 August 2011, Wide availability of Airtel Service Centers in Rajasthan creates easy

touch points for customer service.

On 19 September 2011, Bharti Airtel announces GO! GO! GOAL Contest 2011.

On 22 September 2011, Airtel digital TV brings the TV series "Johnny Test" to India.

On 26 September 2011, Airtel Youth Star kicks off 'Friends Dance Carnival' in Andhra

Pradesh.

On 28 October 2011, 2011 Formula 1 Airtel Grand Prix of India Winner's Trophy

Revealed.

On 1 November 2011, Airtel digital TV now has 11 True HD channels, Expands total

channel count to 262.

38

On 11 November 2011, Bharti Airtel named amongst the top 25 companies for leaders

globally.

On 25 November 2011, Mr. Sharlin Thayil, CEO – Bharti Airtel, AP launches iPhone 4S

in Hyderabad.

On 1 December 2011, Airtel introduces India's first free mobile access to Twitter.

On 12 December 2011, Bharti Airtel recognised for the delivery of best network services

with customer focus at Telecom Centre of Excellence Awards.[

On 21 December 2011, Airtel launches exciting recharge offers for mobile customers in

Rajasthan.

2012

On 11 January 2012, Airtel launched Comedy FM on Airtel Mobile.

On 12 January 2012, Airtel launches all new "BBM Plan" for its postpaid mobile

customers on BlackBerry.

On 23 January 2012, Airtel prepaid mobile recharge made easier with netbanking at

www.airtel.in

On 30 January 2012, Airtel digital TV launches iKidsworld.

On 2 February 2012, Airtel launched Vh1 Radio GAGA powered by Hungama on Airtel

Mobile.

On 3 February 2012, India's largest collection of Hello Tunes is now available online for

Airtel mobile customers.

On 4 February 2012, Bharti Airtel announces consolidated IFRS results for the third

quarter and nine months ended 31 December 2011.

On 10 February 2012, Bharti Airtel launched 3 Pack Education Portal for its mobile

customers across India.

On 27 February 2012, Bharti Airtel selects Infosys as its technology partner for airtel

money.

On 29 February 2012, Bharti Airtel appoints Nokia Siemens Networks to supply, manage

4G network in Maharashtra.

On 27 May 2012, Bharti Airtel announced its strategic foray into the mobile advertising

(m-Advertising) segment, in India.

39

In 2012, Bharti Airtel signed a pact with Opera Software, to provide its customers with

Opera Mini browsers.

On 24 October 2012, Bharti Airtel's mobile user base in Africa crosses 60 million.

2013

On 4 February 2013, Bharti Airtel launches its emergency alert service in eastern region

In 2013 the department of telecommunications (DoT) was investigating Bharti Airtel for

violations of a license agreement the company violated between 2003 and 2005.

2014

On 18 February 2014, Bharti Airtel said it has signed a "strategic agreement" to acquire

Loop Mobile's three million subscribers and its 2G network comprising over 2,500 cell

sites and optic fibre in the financial capital, subject to regulatory approvals. Together

with its existing 4.3 million users, Bharti Airtel would replace Vodafone India – with 7.1

million users – as the No. 1 in Mumbai by subscribers. It would, however, continue to

trail Vodafone in revenue market share —around 27% to nearly 36%

India's largest telecom operator Bharti Airtel acquired Loop Mobile that has mobile network only

in Mumbai circle. With this acquisition, Bharti becomes the top operator with seven million

subscribers followed by Vodafone with 6.8 million subscribers

40

Vodafone

Vodafone India Limited, formerly Vodafone Essar Limited, is the second largest

mobile network operator in India after Airtel by subscriber base. It is based in Mumbai. It

has Approximately 160 million customers as of December 2013.

In July 2011, Vodafone Group agreed terms for the buy-out of its partner Essar from its

Indian mobile phone business. The UK firm paid $5.46 billion to its Indian counterpart to

take Essar out of its 33% stake in the Indian subsidiary. It will leave Vodafone owning

74% of the Indian business, while the other 26% will be owned by Indian investors, in

compliance with Indian law. On 11 February 2007, Vodafone agreed to acquire the

controlling interest of 67% held by Li Ka Shing Holdings in Hutch-Essar for US$11.1

billion, pipping Reliance Communication, Hinduja Group, and Essar Group, which is the

owner of the remaining 33%. The whole company was valued at USD 18.8 billion. The

transaction closed on 8 May 2007. In April 2014, India based Piramal Group sold its 11%

Stake in Vodafone India to Prime Metals, an indirect subsidiary of Vodafone Group. It

offers both prepaid and postpaid GSM cellular phone coverage throughout India with

good presence in the metros.

Vodafone India provides 2.75G services based on 900 MHz and 1800 MHz digital GSM

technology. Vodafone India launched 3G services in the country in the January–March

quarter of 2011 and plans to spend up to $500 million within two years on its 3G

networks

41

History

Max Touch, Orange and Hutch (1992-2007)

Hutchison Max Telecom Ltd. (HMTL), a joint venture between Hutchison Whampoa and the

Max Group, was established on 21 February 1992. The licence to operate in Mumbai (then

Bombay) circle was awarded to Hutchison Max by the Department of Telecommunication (DoT)

in November 1994. The cellular service branded "Max Touch" was launched the same year.

Switching and other related equipment were provided by Ericsson and the network was designed,

engineered and set up by Motorola. Hutchison Max entered into the Delhi telecom circle in

December 1999, the Kolkata circle in July 2000 and the Gujarat circle in September 2000.

Licences for these circles had initially been awarded by the DoT in 1994, 1997 and 1995

respectively. Between 1992 and 2006, Hutchison acquired interests in all 23 mobile telecom

circles of India.

Hutchison Max rebranded Max Touch as Orange from 14 February 2000, thus introducing the

Orange brand to India. India was the eighth country where Orange was launched. Shortly, issues

arose concerning the ownership of the Orange brand in India, when France Telecom (now

Orange S.A.) acquired the worldwide rights for the Orange brand in May 2000 from Vodafone,

and planned to enforce its ownership of the brand in India to cash in on the brand's popularity.

France Telecom expressed interest in purchasing a significant stake in Hutchison's India

operations, but Hutchison India officials turned it down saying that they were in no mood to sell,

and that they would eventually effect a merger of their operations in all circles by taking their

Indian partners along. In December 1999, the two companies had entered into a licensing

agreement on trademark use and to provide telecom services under the Orange brand in the

territories of Mumbai, Navi Mumbai and Kalyan. Hutchison retained the rights over the Orange

brand in India through this agreement, but had to pay royalty to France Telecom. France

Telecom had earlier entered into a joint venture with BPL Mobile (now Loop Mobile), a

competitor of Hutchinson Max in the Mumbai circle; but sold its entire 26% stake in the joint

venture in December 2004. Thus, it completely exited from operations in India.

HMTL was renamed Hutchison Essar Limited (HEL) in August 2005. The name change was to

reflect the consolidation of its five entities in India (Hutchison Essar Mobile Services, Hutchison

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Telecom East, Hutchison Essar South, Aircel Digilink India and Fascel) earlier that year. At the

time, Hutchison Essar had over 8.8 million subscribers in 13 telecom circles of India - Mumbai,

Delhi, Kolkata, Chennai, Gujarat, Andhra Pradesh, Karnataka, UP East, UP West, Rajasthan,

Haryana, Punjab and West Bengal. The consolidation led to the introduction of a single brand

name, Hutch, across the all circles in the country in which Hutchison Essar operated, ending the

use of earlier brand names like Celforce in Gujarat and Command in Kolkata. However, the

Orange brand continued to be used in Mumbai until January 2006, when it was replaced by the

Hutch brand.

In Delhi, Uttar Pradesh (East), Rajasthan and Haryana, Essar Group was the major partner. But

later Hutch took the majority stake. By the time of Hutchison Telecom's Initial Public Offering

in 2004, Hutchison Whampoa had acquired interests in six mobile telecommunications operators

providing service in 13 of India's 23 licence areas and following the completion of the

acquisition of BPL Mobile that number increased to 16. In 2006, it announced the acquisition of

a company (Essar Spacetel — A subsidiary of Essar Group) that held licence applications for the

seven remaining licence areas. Initially, the company grew its business in the largest wireless

markets in India — in cities like Mumbai, Delhi and Kolkata. In these densely populated urban

areas it was able to establish a robust network, well-known brand and large distribution network

– all vital to long-term success in India. Then it also targeted business users and high-end post-

paid customers which helped Hutchison Essar to consistently generate a higher Average Revenue

Per User (ARPU) than its competitors. By adopting this focused growth plan, it was able to

establish leading positions in India's largest markets providing the resources to expand its

footprint nationwide. In February 2007, Hutchison Telecom announced that it had entered into a

binding agreement with a subsidiary of Vodafone Group Plc to sell its 67% direct and indirect

equity and loan interests in Hutchison Essar Limited for a total cash consideration (before costs,

expenses and interests) of approximately $11.1 billion.

Hutch was often praised for its award winning advertisements which all follow a clean,

minimalist look. A recurrent theme is that its message "Hi" stands out visibly though it uses only

white letters on red background. Another successful ad campaign in 2003 featured a pug named

Cheeka following a boy around in unlikely places, with the tagline, "Wherever you go, our

network follows." The simple yet powerful advertisement campaigns won it many admirers. Ads

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featuring the pug were continued by Vodafone even after rebranding. The brand subsequently

introduced ZooZoos which gained even higher popularity than was created by the Pug.

Vodafone's creative agency is O&M while Harit Nagpal was the Marketing Director during the

various phases of its brand evolution.

Mobile Services:

3G:

On 19 May 2010, the 3G spectrum auction in India ended. Vodafone paid 11617.86 million

(the second highest amount in the auctions) for spectrum in 9 circles. The circles it will provide

3G in are Delhi, Gujarat, Haryana, Kolkata, Maharashtra & Goa, Mumbai, Tamil Nadu, Uttar

Pradesh (East) and West Bengal.

On 16 March 2011, Vodafone launched 3G services in Uttar Pradesh (East) in the city of

Lucknow. Vodafone had already launched limited 3G services in Chennai and Delhi earlier, but

the Uttar Pradesh (East) launch counts as its first fully commercial launch. This makes Vodafone

the fifth private operator (seventh overall) to launch its 3G services in the country following Tata

Docomo, Reloance Communication, Airtel and Aircel.

On 23 June 2011 Vodafone launched 3G service in Kerala by joining with Idea in an Intra Circle

Roaming agreement. Initially Vodafone 3G services will be available in the following cities in

Kerala – Ernakulam, Aluva, Calicut, Koyilandy, Alappuzha, Cherthala, Malappuram and

Manjeri. On 28 June 2012, Vodafone launched a new international roaming package under

which the users shall have not to pay multiple rentals in the countries they are visiting.

M-Paisa:

M-Pesa, branded as M-Paisa (the paisa being the largely unused subunit of the Indian rupee),

was launched in India as a close partnership with HDFC bank in November 2011. Development

for the bank began as early as 2008. The service continues to operate in a limited geographical

area in India. Vodafone India had partnered with both HDFC and ICICI, ICICI launched M-Pesa

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on April 18, 2013. Vodafone plans to rollout this service through out India. The user needs to

register for this service by paying 200 Rupees and there are charges levied per M-Pesa

transaction.

Subscriber Base:

Following is the Vodafone India subscriber base statistics as on January, 2013.

Telecom CicleNo. of

Subscribers

Gujarat 15,801,117

Uttar Pradesh(East) 14,526,236

Maharashtra 12,977,123

West Bengal 11,165,667

Tamil Nadu 9,777,927

Rajasthan 8,565,366

Uttar Pradesh(West) 8,999,073

Andhra Pradesh 5,224,689

Delhi 8,449,120

Goa 7,134,576

Karnataka 6,452,620

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Telecom CicleNo. of

Subscribers

Kerala 6,067,506

Bihar 6,381,278

Kolkata 4,084,284

Punjab 4,309,853

Haryana 4,437,015

Madhya Pradesh &

Chhattisgarh4,101,877

Chennai 2,091,411

Odisha 2,789,575

Assam 2,188,073

North East 928,563

Jammu & Kashmir 666,009

Himachal Pradesh 475,329

Mumbai 6,160,353

Total number of Vodafone India Subscribers : 141,519,840, i.e. 21.54% of the total 657,158,013

Indian mobile phone subscribers.

Marketing Campaigns:

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Zoozoos, BlackBerry Boys, Pug (network campaign), Chota Recharge, Delights, etc

Awards and recognition:

The Brand Trust Report 2011 published by Trust Research Advisory has ranked Vodafone as the

16th most trusted brand in India.

Controversies:

Vodafone India is involved in a Rs 11,000-crore tax dispute case with Indian government.

Timelines:

1992: Hutchison Whampoa and MAX group establish Hutchison Max

2000: Acquisition of Delhi operations and entry into Calcutta (now Kolkata) and Gujarat markets through Essar acquisition.

2001: Won auction for licences to operate GSM services in Karnataka, Andhra Pradesh and Chennai.

2003: Acquired AirCel Digilink (ADIL — ESSAR Subsidiary) which operated in Rajastan,

Uttar Pradesh East and Haryana telecom circles and rebranded it 'Hutch'

2004: Launched in three additional telecom circles of India namely Punjab, Uttar Pradesh (West) and West Bengal.

2005: Acquired BPL Mobile operations in 3 circles. This left BPL with operations only in Mumbai, where it still operates under the brand 'Loop Mobile'.

2007: Vodafone acquires a 67% stake in Hutchison Essar for $10.7 billion. The company is renamed Vodafone Essar. 'Hutch' is rebranded to 'Vodafone'.

2008: Vodafone acquires the licences in remaining 7 circles and starts its pending operations in Madhya Pradesh circle, as well as in Orissa, Assam, North East and Bihar.

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2011: Vodafone Group buys out its partner Essar from its Indian mobile phone business. It paid $5.46 billion to take Essar out of its 33% stake in the Indian subsidiary. It left Vodafone owning 74% of the Indian business.

2014: On 11 April Vodafone acquires 100 percent stake in Vodafone India.

Research Methodology

The methodology is the method used in the collecting the information, which assists for

the research problem.

Description of Research:-

Marketing research design specifies the procedure for conducting a research project. The

survey was conducted with the objective “To study the comparative analysis of customer

satisfaction of Airtel and Vodafone.

Data Collection Method:-

Primary data :-In this study the primary data is collected by survey research

i.e. systematic collection of information directly from the respondents.

Secondary Data: - The company’s websites and journals.

SAMPLING METHOD

Define Population:-Population is defined in terms of elements, sample units.

Sampling Unit:-Dehradun.

Sampling Frame:- Peoples from different areas in Dehradun.

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Sampling Method Selected:-Non Probability Sampling Method is chosen.

Sample Size:-50 Respondents

Instrument:-Questionnaire

DATA ANALYSIS AND INTERPRETATION

1) Which brand of connection are you using?

Brand

Airtel Vodafone

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2) How long you have been using this connection?

0-2 years48%

2-5 years41%

5-10 years12%

Vodafone

50

0-2 years; 14; 56%

2-5 years; 8; 32%

5-10 years; 3; 12%

Airtel

3. How do you come to know about your brand?

T. V.36%

Newspaper24%

Friends and relatives28%

Other sources12%

Airtel

T.V.67%

Newspaper4%

Friends and relatives13%

other sources17%

Vodafone

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4. Which of the marketing/sales scheme attracts you while purchasing a connection?

Good network52%

Discount scheme16%

Service package20%

Any other12%

Airtel

52

Good network47%

Discount scheme26%

Service package22%

Any other5%

Vodafone

5. Are you satisfied with connection activation of your brand?

Highly satisfied21%

Satisfied62%

Dissatisfied12%

Highly dissatisfied5%

Airtel

Highly satisfied Satisfied Dissatisfied Highly dissatisfied

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Highly satisfied20%

Satisfied52%

Dissatisfied16%

Strongly dissatis-fied12%

Vodafone

Highly satisfied Satisfied Dissatisfied Strongly dissatisfied

6. Are you satisfied with present network coverage of your service provider?

Highly satisfied60%

Satisfied24%

Dissatisfied16%

Airtel

54

Highly satisfied48%

Satisfied32%

Dissatisfied16%

Strongly dissatisfied5%

Vodafone

7. Are you satisfied with present call rates?

Highly satisfied8%

Satisfied40%

Dissatisfied32%

Highly dissatisfied20%

Airtel

55

Highly satisfied13%

Satisfied43%

Dissatisfied39%

Highly dissatisfied5%

Vodafone

8. Are you satisfied with the value added services and packages given by your service provider?

Highly satisfied11%

Satisfied41%Dissatisfied

30%

Strongly dissatisfied19%

Airtel

56

Highly satisfied12%

Sattisfied44%

Dissatisfied32%

Strongly dissattisfied12%

Vodafone

9. Are you satisfied with customer care services of your service provider?

Highly satisfied24%

Satisfied47%

Dissatisfied24%

Strongly dissatisfied6%

Airtel

57

Highly satisfied18%

Satisfied41%

Dissatisfied36%

Strongly dissatisfied5%

Vodafone

10. Will you recommend your service provider to some one?

Yes88%

No12%

Airtel

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Yes80%

No20%

Vodafone

FINDINGS

1. From the graph 2nd it can be analyzed that Airtel has more old customers in compare to

Vodafone.

2. From graph 3rd it can be analyzed that most of respondents are aware about Airtel and

Vodafone through T.V. advertisement, Vodafone has created more awareness through

T.V. advertisement in compare to Airtel.

3. From the graph 4th it can be analyzed that good network attracts the customer in compare

to any other feature and Airtel has a better network in compare to Vodafone.

4. From the graph 5th it can be analyzed that Airtel has 10% more satisfied customer in

compare to Vodafone on the basis of connection activation.

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5. From the graph 6th it can be analyzed that Airtel has more satisfied customer on in

compare to Vodafone on the basis of present network coverage.

6. From the graph 7th it can be analyzed Vodafone has more satisfied customer on the basis

of present call rates.

7. From the graph 8th it can be analyzed that Vodafone has slightly more satisfied customer in compare to Airtel on the basis of Value added service provided by them.

8. From the graph 9th it can be analyzed that Airtel has slightly more satisfied customer in

compare to Vodafone on the basis of Customer care services.

9. From the graph 10th it can be analyzed that Airtel’s customer recommend to someone

more than Vodafone’s customer.

Recommendations

According the research I suggest Airtel and Vodafone that

1. Both Companies must focus on their advertisement.

2. Both Companies must focus on to their customer care services.

3. Both companies must focus on connection activation.

4. Airtel should provide more value added services.

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Conclusion

1. Airtel has more satisfied customer in compare to Vodafone.

2. Vodafone has more satisfied customer on the basis of present call rates.

3. Both companies needs to pay attention on customer care services.

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Bibliography

http://perry4law.co.in/blog/wp-content/uploads/2014/02/FDI-Policy-In-Telecom-Sector-

Of-India-2014.pdf

http://www.medianama.com/2014/02/223-indias-2014-2g-auction-results-what-the-

telecom-operators-are-saying/

http://www.convergencecatalyst.com/blog/2014/01/15/2014-is-the-year-of-project-phase-

for-indian-telecom-industry/

http://en.wikipedia.org/wiki/Telecommunications_in_India

http://en.wikipedia.org/wiki/Bharti_Airtel

http://en.wikipedia.org/wiki/Customer_satisfaction

http://wiki.answers.com/Q/Scope_of_the_study#slide=2

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http://www.ibef.org/industry/indian-telecommunications-industry-analysis-presentation#

Date of accessed all websites – 24/04/2014 & 27/04/2014

QuestionnaireDear Sir/Madam,

I Vishal Kumar, student of PGDM of Doon Business School – Global, Dehradun. I am doing my dissertation project on “Comparative analysis of customer satisfaction of Airtel and Vodafone.” Please give your precious time for filling these details. Name :-

Sex:- M/F [ ]

Age:- Mob. No: -

1. Which brand of connection are you using?

A) Airtel [ ] B) Vodafone [ ]

2. How long you have been using this connection?

A) 0 – 2 years [ ] B) 2 – 5 years [ ]

C) 5 – 10 years [ ] D) More than 10 years [

]

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3. How do you come to know about your brand?

A) T.V. [ ] B) Newspaper [ ]

C) Friends & Relatives [ ] D) Any other source

[ ]

4. Which of the marketing/sales scheme attracts you while purchasing a connection?

A) Good network [ ] B) Discount scheme [ ]

C) Service package [ ] D) Any other [ ]

5. Are you satisfied with connection activation of your brand?

A) Highly satisfied [ ] B) Satisfied [ ]

C) Dissatisfied [ ] D) Strongly dissatisfied [ ]

6. Are you satisfied with present network coverage of your service provider?

A) Highly satisfied [ ] B) Satisfied [ ]

C) Dissatisfied [ ] D) Strongly dissatisfied [ ]

7. Are you satisfied with present call rates?

A) Highly satisfied [ ] B) Satisfied [ ]

C) Dissatisfied [ ] D) Strongly dissatisfied [ ]

8. Are you satisfied with the value added services and packages given by your service provider?

64

A) Highly satisfied [ ] B) Satisfied [ ]

C) Dissatisfied [ ] D) Strongly dissatisfied [ ]

9. Are you satisfied with customer care services of your service provider?

A) Highly satisfied [ ] B) Satisfied [ ]

C) Dissatisfied [ ] D) Strongly dissatisfied [ ]

10. Will you recommend your service provider to some one?

A) Yes [ ] B) No [ ]

Thank You!

Signature ………………………

Date……………………………..

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