PART – A

HISTORY OF INDUSTRY

The world aircraft manufacturing industry can be divided into two major segments –

Military and Space applications of aero-structures and Commercial or Civil Aircraft.

Civil Aircraft consist of large and small passenger aircraft as well as cargo aircraft.

Figure 1, below, refers to the distribution of aircraft types that the world aircraft industry

comprises.

The large aircraft manufacturing activities are mainly carried out by The Boeing

Company of the USA and The Airbus Company (formerly Airbus Industries) based in the

European Union. Boeing itself has in the recent past, acquired McDonnell Douglas and

Martin Marietta, both of which had also been aircraft manufacturers, although not to the

extent of Boeing. Thus, the current large aircraft manufacturing industry is essentially an

oligopoly, with the two key Companies being Boeing and Airbus competing against each

other. Although there are other.

Market Size and Share

As a result of early global leadership in the US aircraft industry, especially in the post-

World War II economic boom, the United States has been able to develop a highly

competitive aircraft manufacturing industry. In the forefront was The Boeing Company.

However, since the emergence of The Airbus Company, and especially since the

increasingly favorable reputation and reliability of its varied range of aircraft, there has

been a steady increase in Airbus’s share of the large aircraft manufacturing market.

Figure 2 illustrates this trend. (It comprises data derived from Table 1 (in Appendix B),

which summarizes the market share of Large Civil Aircraft (LCA) of each of Boeing and

Airbus).

Various reasons exist for the gradual emergence of Airbus over Boeing. As Boeing is a

longer–established Company, much of its equipment is becoming antiquated, and is now

therefore less efficient to utilize. According to a Report prepared by the US International

Trade Commission [Competitive Assessment of the US LCA Aero-structures Industry,

Publication 3433 (June 2001)], other reasons for Boeing’s diminishing market share are

LCA industry consolidation and increasing responsibilities placed on suppliers by LCA

producers.

PRODUCTS/SERVICES

The is our Table which gives typical values for a variety of raw materials.

Column 1 lists the standard materials which are easily available at a reasonable cost. As

this column is not intended to be an "academic lecture," we will not discuss "fantastic"

materials because we cannot afford them anyway. We want to acquire a simple, good

understanding of practical solutions and practical materials.

Some of the materials that fall along the borderline between practical and impractical are:

Magnesium: An expensive material. Castings are the only readily available forms.

pecial precaution must be taken when machining magnesium because this metal burns

when hot. 

Titanium: A very expensive material. Very tough and difficult to machine. 

Carbon Fibres: Still very expensive materials. 

Kevlar Fibres: Very expensive and also critical to work with because it is hard to "soak"

in the resin. When this technique is mastered, the resulting structure is very strong, but it

also lacks in stiffness. 

The values given in our Table are for fibreglass with polyester resins, which is very easy

to use compared to the more critical (viscous) epoxy fibreglass. Epoxy fibreglass

provides a somewhat stiffer and stronger result. ("Prepreg," epoxy pre-impregnated cloth,

is still very expensive, has a limited shelf life and needs pressure as well as an oven to

cure).

Aluminium Alloy 7075 - "T-whatever", has been left out intentionally as it is a very

strong but also very brittle alloy. It is comparable to glass. Unless we state a "life" for a

specified part made of 7075, it is unsafe to use this alloy in most light aircraft. (We are

not an airline with an on-going maintenance schedule - we want to fly our planes year

after year without having to worry about fatigue of our aircraft structure, something we'll

talk about later.)

PLAYERS IN THE INDUSTRY

Hindustan Aeronautics Limited (Hal)

Indian Space Research Organisation (ISRO) 

Defence Research Development Organization (DRDO) 

Bharat Electronics Limited (BEL) 

Bharat Dynamics Limited (BDL) 

Bharat Earth Movers Limited (BEML Limited)

Ordnance Factory Board (OFB) 

Mishra Dhatu Nigam Limited (MIDHANI) 

BrahMos Aerospace 

Trends in the industry

The world aircraft market has recently undergone steady growth. Boeing predicts that the

aircraft market will be US$5.4trillion by the end of 2023 to accommodate a 5.2% annual

increase in global air travel. It is expected that approximately 12,000 to 15,000

commercial aircraft will be required by the end of 2020. A major reason for this results

from developing Asian countries, especially China. China alone will require

approximately 1,400 aircraft by the end of year 2020. Although several Asian countries

have aircraft manufacturing industries (e.g., Japan and China), their industries are not of

the size and scale of their US and European counterparts. Civil aviation has also grown

significantly in the age of globalization. The growing world-wide economy has made air

travel affordable and has increased passenger numbers in international travel and volume

of airfreight.

Trends of Aircraft Development

The development of LCAs is split into two markets, “Fragmentation” and

“Consolidation”. The “Fragmentation” view addresses the large number of flights that

occur between local airports. Fragmentation creates a requirement for a large number of

smaller, 100-200 seat, high speed aircraft capable of operating from small runways of

local airports. “Consolidation” is concerned with the development of flights between

large hubs. These flights would be serviced by large, high capacity aircraft, with 300-600

seats [A report by-Royal Commission on Environmental Pollution, UK (June 2001)]. At

present, Boeing is pursuing its development in the Fragmentation market with its new

design, the 7E7 (due in year 2008), while Airbus is gathering orders for aircraft pursued

through a Consolidation market. The aircraft in particular, are the new series of A380

Super Jumbo Jets.

CONTRIBUTION OF INDUSTRY TO THE DEVELOPMENT OF

THE NATION

In a gruelling five-year selection process, the Indian Air Force (IAF) tested six foreign

fourth generation plus fighters—the American F-16IN and F-18E/F, the French Rafale,

the Swedish Gripen NG, the European Eurofighter Typhoon, and the Russian MiG-35.

After conducting comprehensive testing against more than 600 parameters, the IAF found

that the Eurofighter Typhoon and French Rafale met its requirements.1 Of the final two,

the Rafale has been selected for detailed purchase negotiations on the basis of its lower

total life cycle cost as compared to the Typhoon. The deal is reported to be worth

between US $ 10.4 and 20 billion.2 While there is joy and great anticipation in several

quarters about the entry of the Rafale into the IAF service, the issue of the strategic

vulnerability that yet another foreign purchase of weaponry places upon the country tends

to get easily overlooked.

A growing India that has an ever increasing number of national interests beyond her

shores need to field a potent military capability to defend these interests. It must be noted

that only indigenously manufactured weaponry, backed by a robust industrial capability,

would convey strategic independence and an independent national capability and power.

Thus, the development of a robust and capable indigenous aircraft industry is a prime

requirement for India in its pursuit of high growth, and the military capability needed to

secure a sustained high growth trajectory.

In order for the nation to be able to build world-class aircraft, it must first invest in

building a robust indigenous aircraft industry. This effort would gain immensely not just

from looking at similar industries abroad, but also looking at other industrial examples

within the country.

Aircraft design and development is a very costly enterprise. The fixed costs involved in

design and manufacture of new aircraft for the companies involved in design and

manufacturing is very high. This is so even if the government carries some of the

financial burden. However, despite the consequent reduction in cost, designing and

building a modern state-of-the-art fighter aircraft such as the F-18 cost the design and

manufacturing companies about US $ 5 billion in 1975.3 These costs remained much too

high for manufacturers to bear, especially in the US system where the US Air Force

(USAF) typically selected two manufacturers to design different aircraft to meet the same

requirement, and the winner was decided in a fly-off of the prototypes [for example, the

YF-16 vs. the YF-17, won by the YF-164 ; and the YF-22 vs. the YF-23, won by the YF-

22].5 The losing company is thus unable to recoup its initial investment of several billion

dollars. This is likely to have been a factor in the merger of erstwhile giants in the aircraft

business with their erstwhile rivals—General Dynamics’ aircraft division merged with

Lockheed, as did Martin Marietta, to form Lockheed Martin6 and McDonnell Douglas, of

the F-15 fame, merged with Boeing.7 In Europe, countries started to collaborate across

borders to build modern aircraft. The Jaguar is an Anglo-French collaboration8 ; the

Tornado was built by Britain, Italy, Germany and Spain; and, the Eurofighter Typhoon

involves Britain, Italy, Germany and Spain.9

The above discussion clearly illustrates the high costs and risks involved in aircraft

design and manufacture. The risks have been so great that large US companies with high

net worth and annual turnover have found it tough to continue in the field. While private

players may or may not operate in this field, it is clear that there needs to be some kind of

support system to ensure that companies operating in the field are able to stay in business

and achieve fair profitability.

The Indian Aircraft Industry is dominated by one big public sector player—Hindustan

Aeronautics limited (HAL). Starting out as a private company, HAL was nationalised at

the time of independence. It is involved in both designing and manufacturing aircraft.

Alongside HAL, the Defence Research and Development Organisation (DRDO) is

responsible for research and development (R&D). Until the economic reforms of 1991,

private players were not allowed to operate in the aircraft industry in India. Since then, a

few big businesses have expressed interest in entering into this field. A few more

government owned and run organisations exist such as the National Aeronautics

Laboratories (NAL) and the Aircraft Development Agency (ADA). Being government-

owned and run as part of the Ministry of Defence (MoD), these organisations suffer from

the ills of bureaucracy and reliance upon the government for funds and clearances for

R&D. Moreover, projects are mostly undertaken only when a specific requirement is

projected by the user to the government. This situation leads to difficulties in retention of

expertise and lack of regular R&D in cutting-edge technologies. HAL and DRDO have

had some success in the design and manufacture of trainers such as the HT-2 and HJT-16

both of which saw extensive service with the IAF. Fighter projects such as the HF-24

Marut did not meet full designed performance expectations due to the non-availability of

engine. The Light Combat Aircraft (LCA) Tejas, still under development towards

achieving Final Operational Clearance (FOC), has also suffered from the lack of an

indigenous engine. Tejas is currently behind schedule and has cost much more than the

initially expected programme cost.

FUTURE OF THE INDUSTRY

CONTINUING MOMENTUM

Thanks to improvements in technology since the 1970s, aircraft fuel burn and emissions

have been reduced by 70 per cent, with a reduction in noise of 75 per cent.

In the future, as more people travel by air, the air transport sector will need to achieve

further significant step changes while keeping air travel comfortable and affordable – and

also achieving the aviation industry’s goal of halving carbon emissions by 2050.

Future-gazing by Airbus shows blueprints for radical aircraft interiors. Airbus engineers

talk of morphing seats made from ecological, self-cleaning materials which change shape

for a snug fit; walls that become see-through at the touch of a button, affording 360-

degree views of the world below; and holographic projections of virtual decors, allowing

travelers to transform their private cabin into an office, bedroom or even a “zen garden.”

THE AIRBUS CONCEPT PLANE

More than a flight of pure fantasy, the Airbus Concept Plane illustrates what air transport

could look like in 2050 – even 2030 if advances in existing technologies continue apace.

Airbus experts in aircraft materials, aerodynamics, cabins and engines came up with this

“engineer’s dream.” It brings together a package of technologies that are unlikely ever to

coexist in such a manner.

It is not a plane intended to fly – it is a representation of the main technological fields that

are being explored to face future needs: a significant cut in fuel burn and emissions, less

noise and greater comfort.

This ends may be may be met by ultra-long and slim wings, semi-embedded engines, a

U-shaped tail and lightweight “intelligent” body – all features that will improve

environmental performance.

The Concept Plane was unveiled by Airbus at the 2010 Farnborough International

Airshow.

GOING “GREEN” WITH NACRE PRO GREEN

The European Union’s NACRE (New Aircraft Concepts Research) project – in which

Airbus is an industry partner – is studying potential radical overhauls to aircraft design

with the goal of improving eco-efficiency, optimising performance and reducing costs.

Within this effort, the NACRE Pro Green aircraft specifically aims at the reduction of an

airliner’s operational environmental footprint. It features an unswept wing with a high

span that reduces induced drag and friction drag, due to natural laminar flow. The engines

are mounted on top of the rear fuselage above a U-tail, in a way that noise emissions are

shielded by the wing and the tail. The engines’ very large fan diameter is optimized for

slow jet speeds in order to improve fuel efficiency and decrease noise.

The design range of the NACRE Pro Green aircraft concept is relatively short in order to

reduce the overall gross weight and is designed for lower cruise altitudes, so that the

exhaust emissions will be washed out from the atmosphere with the troposphere’s

thermal convection. It will use drop-in fuel with similar properties as kerosene,

possessing high energy density – enabling lowest energy consumption.

Compared to current-generation aircraft, the design for ultra-low emissions will cause

some limitations in operational aspects. The slow cruise speed would reduce the number

of flights per day and thus affect its economic productivity, with a passenger’s overall

travelling time increasing between 5-10 per cent. The high precision surfaces for the

laminar flow wing could require special treatment and care in the manufacturing process.

Likewise, the engine position on top of the fuselage is expected to require specific

attention and increased effort during maintenance, compared to under-wing installations.

PART – C

CHAPTER-1-INTRODUCTION

A. Overview of the industry and its contribution in the service sector

GSM stands for Global System for Mobile Communications. Developed in the 1980s,

GSM was first deployed in 7 European countries in 1992. Operating in the 900MHz &

1.8GHz bands in Europe and the 1.9GHz PCS band in the U.S.A., GSM defines the entire

cellular system, not just the air interface (TDMA, CDMA, etc.). By the year 2000, there

were over 250 million GSM users, which is more than half of the world's mobile phone

population.

GSM technology provides a short messaging service (SMS), which enables text messages

up to 160 characters in length to be sent to and from a GSM phone. GSM phones also

supports data transfer at 9.6 Kbps to packet networks, ISDN & POTS users. GSM is a

circuit-switched system that divides each 200 kHz channel into eight 25 kHz time slots.

Today's second-generation GSM networks deliver high quality and secure mobile

voice and data services (such as SMS/Text Messaging) with full roaming capabilities

across the world.

Today's GSM platform is a hugely successful wireless technology and an

unprecedented story of global achievement. In less than ten years since the first GSM

network was commercially launched, it became the world's leading and fastest growing

mobile standard, spanning over 200 countries.

Today, GSM technology is in use by more than one in six of the world's

population and it is estimated that at the end of Jan 2004 there were over 1 billion GSM

subscribers across more than 200 countries of the world.

The growth of GSM continues unabated with more than 160 million new

customers in the last 12 months. Since 1997, the number of GSM subscribers has

increased by a staggering 10 fold.

The progress hasn't stopped there. Today's GSM platform is living, growing and

evolving and already offers an expanded and feature-rich 'family' of voice and data

enabling services.

Nevertheless, it was clear there would be an escalating demand for a technology

that facilitated flexible and reliable mobile communications.

As far as GSM is concerned, it's always been a risky business getting into the

prediction game. Growth has invariably outstripped even the most incautious speculation.

However, it's safe to assume that by the end of the century GSM will have over 150

million customers and be a major influence across every continent on the planet.

The future of GSM technology is happening all around us. As the technology

advances, it is essential that user demand for applications plays as significant role in

determining development as does technological potential. Just because it can be done

does not necessary mean that it should be done.

Equally important is that, in the near future, one of the keys to ensuring GSM

maintains its market position lies in the provision of advanced customer care. It's not

simply a case of attracting new customers, but holding on to them. Already significant

steps have been taken to establish consistent standards across the networks. The aim

should now be to engender a culture of customer care rather than simply the means of

responding to customer complaints. For example, it's easy to envisage a future in which if

a GSM phone is not performing, as it should, the network's care center contacts the user

and offers to replace the faulty device.

Global roaming has always been the cornerstone of GSM's success. Users are

coming to demand ubiquitous coverage and seamless mobility. For this reason, work is

already well advanced on the development of multi-band terminals. These products will

enable the user to roam freely between two, and ultimately all three, of the 900/1800/

1900MHz GSM-related frequencies. Genuinely global coverage is next. A number of

satellite network operators already have rapport their membership of the MoU, and

development is under way of terminals that integrate both GSM and satellite networks.

Such phones will operate as ordinary GSM mobiles at their usual tariffs when the user is

within a GSM coverage area. When they move out of coverage, their calls will travel by

satellite. "The advent of GSM is not seen as so significant a factor that the traditional

cellular market growth trends will alter dramatically."

GSM MARKET IN INDIA: ~

GSM India was the first regional interest group to be formed for a single country. Umang

Das, Spice Communications, and India currently chair it.

With a population of around 1 billion growing at roughly 1.7 per cent a year, India is

potentially one of the most exciting GSM markets in the world. After two rather difficult

years, the past 12 months have seen the region's promise beginning to come to fruition.

Much of this success can be attributed to the stabilization of the licensing and regulatory

environment.

India's telecommunications have undergone a steady liberalization since 1994

when the Indian government first sought private investment in the sector. More

significant liberalization followed in 1996 with the licensing of that has had the most

radical impact on the development of GSM services. 'The policy's mission statement is

'affordable communications for all', There is a genuine commitment to creating a modern

and efficient communications infrastructure that takes account of the convergence of

telecom, IT and media. In addition, the policy places significant emphasis on greater

competition for both fixed and mobile services.

Competition in the mobile sector has already had a visible impact on prices with

calls currently costing less than 9 cents per minute. This means that service costs have

fallen by 60 per cent since the first GSM networks became live in 1995. It also helps

explain why a recent Telecom Asia survey revealed that more than 70 per cent of Indian

mobile subscribers felt that prices were now at a reasonable level.

One of the challenges facing GSM operators in India is the diversity of the

coverage regions -from remote rural regions to some of the most densely populated

metropolitan areas in the world. India has more than 40 networks, which cover the seven

largest cities, over 600 towns and several thousand villages. Such depth of coverage has

required enormous investment from India's operators. It is estimated that more than

Rs150 billion had been invested in India's GSM industry by mid-2000, a figure that is set

to be supplemented by a further Rs200 billion over the next five years.

The good news is that subscriber growth is beginning to look healthy. With

India's low PC penetration and high average Internet usage -at 14-20 hours a month per

user it is comparable to the US -the market for mobile data and m-commerce looks

extremely promising. WAP services have already been launched in the subcontinent and

the first GPRS networks are in the process of being rolled out. In the year ahead, GSM

India will work with its members to realize the potential of early packet services in

anticipation of the award of 3GSM licenses in 2003/04.

CHAPTER-2- ABOUT THE COMPANY

A. PROFILE OF THE COMPANY

ADITYA BIRLA GROUP

The Aditya Birla Group is India's first truly multinational corporation. Global in vision,

rooted in Indian values, the Group is driven by a performance ethic pegged on value

creation for its multiple stakeholders. Its 66 state-of-the-art manufacturing units and

sectoral services span India, Thailand, Indonesia, Malaysia, Philippines, Egypt, Canada,

Australia and China.

A US$ 6.7 billion conglomerate, with a market capitalization of US$ 7 billion, it is

anchored by an extraordinary force of 72,000 employees belonging to over 20 different

nationalities.

Over 30 percent of its revenues flow from its operations across the world.

A premium conglomerate, the Aditya Birla Group is a dominant player in all of the

sectors in which it operates. Such as viscose staple fiber, non-ferrous metals, cement,

viscose filament yarn, branded apparel, carbon black, chemicals, fertilizers, sponge iron,

insulators and financial services.

The Group has also made successful forays into the IT and BPO sectors.

Currently around 57 percent of our Equity Shares are held by our Promoters who are

companies belonging to the Aditya Birla Group.

Our Promoters are –

1. Aditya Birla Nuvo Limited

2. Grasim Industries Limited

3. Hindalco Industries Limited and

4. Birla TMT Holdings Private Limited.

The Aditya Birla Group is a dominant player in all of the sectors in which it operates?

Among these is viscose staple fibre, non-ferrous metals, cement, viscose filament yarn,

branded apparel, carbon black, chemicals, fertilizers, sponge iron, insulators, financial

services, telecom, BPO and IT services.

Following table lists the major Indian companies of the Aditya

Birla Group and the products and services they offer:

Company

- Grasim

- UltraTech Cement Limited

- Shree Digvijay Cement

- Hindalco

- Indian Aluminums Company Limited

- Bihar Caustic and Chemicals Limited

- ABNL

- Idea Cellular Limited

- Birla NGK Insulators*

- Birla Sun Life Insurance Company Limited*

- Birla Sun Life Asset Management Company Limited*

- Birla Sun Life Distribution Company Limited*

- PSI Data Systems

- TransWorks

- Birla Global Finance Limited

- Tanfac Industries Limited* fluorine chemicals

IDEA CELLULAR

Idea Cellular's antecedents date back to 1995, when the Aditya Birla Group and AT&T

(through Birla AT&T- Maharashtra, Gujarat) and the Tata Group (through Tata Cellular-

Andhra Pradesh) came together to set up cellular networks.

In 2000, the historic path-breaking merger and the subsequent acquisition of RPG

Cellular - (Madhya Pradesh circle) helped take their aims even further and led to the

formation of Birla Tata AT&T Limited.

Since then, there has been no looking back for Birla Tata AT&T (Idea Cellular).

In its very first financial year, Idea Cellular recorded the fastest growth among all cellular

operators at a 135% increase in subscriber base. The company BTAL (now Idea Cellular)

also ranked No. 1 in customer satisfaction among all operators (as per the NFO MBL

survey), a testimony to the quality of the company's services and subscribers.

As India's leading GSM Mobile Services operator, IDEA Cellular has licenses to

operate in 11 circles.

With a customer base of over 10 million, IDEA Cellular has operations in Delhi,

Maharashtra, Goa, Gujarat, Andhra Pradesh, Madhya Pradesh, Chattisgarh, Uttaranchal,

Haryana, UP-West, Himachal Pradesh and Kerala.

IDEA Cellular's footprint currently covers approximately 45% of India's

population and over 50% of the potential telecom-market.

As a leader in Value Added Services, Innovation is central to IDEA's VAS

Factory. It is the first cellular company to launch music messaging with 'Cellular

Jockey' , 'Background Tones', 'Group Talk', a voice portal with 'Say IDEA' and

A complete suite of Mobile Email Services.

A frontrunner in introducing revolutionary tariff plans, IDEA Cellular has the

distinction of offering the most customer friendly and competitive Pre Paid offerings, for

the first time in India, with 'Super Power', 2 Minutes Outgoing Free, Lifelong offer and

other segmented offerings like Women's Card. 'Lifetime Idea' is the first and only loyalty

program, for pre paid customers, introduced by a Cellular brand.

Customer Service and Innovation are the drivers of this Cellular Brand. A brand

known for their many firsts, Idea is only operator to launch GPRS and EDGE in the

country.

The latest feather in the IDEA cap is the GSM Association Award for Bill Flash, it has

recently won making it the first cellular operator in India to win an award on this

platform.

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

multinational corporation. Global in vision, rooted in Indian values, the group is driven

by a performance ethic pegged on value creation for its multiple stakeholders.

The combined holding of the Aditya Birla Group companies in Idea stands at 98.3 per

cent.

B. History of the Company

2010

Subscriber base as on December 31, 2010: 81,778,655

Idea won 3G Spectrum in 11 service areas in India. These markets account

for over 81% of the company’s total revenue

Idea crossed usage of ‘One Billion’ Minutes per day on the network,

propelling it amongst the Top 10 country operators in the world

Idea emerged as the 3rd largest mobile operator in India, in revenue terms.

2009

Subscriber base as on December 31, 2009: 57,611,872

Idea becomes a pan-India operator

Emerging Company of the Year - fastest growing mobile operator in the world’s

fastest growing telecom market

2008

Subscriber base as on December 31, 2008: 40,016,153

Idea acquired 9 licences for Punjab, Karnataka, Tamil Nadu & Chennai, West

Bengal, Orissa, Kolkata, Assam, North East and Jammu & Kashmir

Acquired Spice Communications with the operating circles of Punjab and

Karnataka

Launched services in Mumbai metro in the largest single metro city launch, ever

Launched services in Bihar

2007

Subscriber base as on December 31, 2007: 21,054,027

Won an award for the "CARE" service in the "Best Billing or Customer Care

Solution" at the GSM Association Awards in Barcelona, Spain

Initial Public Offering aggregating to Rs. 28,187 million and Listing of Equity

Shares on the Bombay Stock Exchange and the National Stock Exchange

Merger of seven subsidiaries with Idea Cellular Limited

Reached the twenty million subscriber mark

2006

Subscriber base as on December 31, 2006: 12,442,450

Became part of the Aditya Birla Group subsequent to the TATA Group

transferring its entire shareholding in the Company to the Aditya Birla Group

Acquired Escorts Telecommunications Limited (subsequently renamed as Idea

Telecommunications Limited)

Restructuring of debt

Launch of the New Circles

Reached the 10 million subscriber mark

Received Letter of Intent from the DoT for a new UAS License for the Mumbai

Circle.

Received Letter of Intent from the DoT for a new UAS License for the Bihar

Circle through Aditya Birla Telecom Limited. ABNL, the parent of Aditya Birla

Telecom Limited, pursuant to a letter dated November 22, 2006, agreed to

transfer its entire shareholding in Aditya Birla Telecom Limited to the Company

for the consideration of Rs. 100 million.

2005

Subscriber base as on December 31, 2005: 6,473,962

Reached the five million subscriber mark

Turned Profit Positive

Won an Award for the "Bill Flash" service at GSM Association Awards in

Barcelona, Spain

Sponsored the International Indian Film Academy Awards

2004

Completed debt restructuring for the then existing debt facilities and additional

funding for the Delhi Circle.

Acquired Escotel Mobile Communications Limited (subsequently renamed as

Idea Mobile Communications Limited)

Reached the four million subscriber mark

First operator in India to commercially launch EDGE services 2005

2003

Reached the two million subscriber mark

2002

Changed name to Idea Cellular Limited and launched "Idea" brand name

Commenced commercial operations in Delhi Circle

Reached the one million subscriber mark

2001

Acquired RPG Cellular Limited and consequently the license for the Madhya

Pradesh (including Chattisgarh) Circle

Changed name to Birla Tata AT&T Limited

Obtained license for providing GSM-based services in the Delhi Circle following

the fourth operator GSM license bidding process

2000

Merged with Tata Cellular Limited, thereby acquiring original license for the

Andhra Pradesh Circle

1999

Migrated to revenues share license fee regime under New Telecommunications

Policy ("NTP")

1997

Commenced operations in the Gujarat and Maharashtra Circles

1996

Changed name to Birla AT&T Communications Limited following joint venture

between Grasim Industries and AT&T Corporation

1995

Incorporated as Birla Communications Limited

Obtained licenses for providing GSM-based services in the Gujarat and

Maharashtra Circles following the original GSM license bidding process.

C. Vision and mission statement of the Company

Mission“We will Delight our customers

While meeting their

Individual communication needsanytime anywhere”

We survive because of our customers.

Delight: Positively surprise customers with every interaction.

Customer: Whole universe of current and potential users who have communication needs.

Individual Communication Needs: Specific communication needs of individual consumers.

Communication: All voice and non-voice services that are permitted under the license.

Vision: To become most profitable Cellular company

Key competitors of the Company

Improve Profitability

Strengthen Channels

Reduce cost per minute

Capture additional

subscribers

Protect Current ARPUs

Retain existing

subscribers

Bharti

BSNL

Vodafofe

BPL

Spice

Escotel

Aircel

Reliance

MTNL

Hexacom

D. Organizational structure

Board of Directors-

Mr. Kumar Mangalam Birla (Chairman)

Smt. Rajashree Birla

Mr. Himanshu Kapania (Managing Director)

Mr. Arun Thiagarajan

Ms. Tarjani Vakil

Mr. Mohan Gyani

Mr. Gian Prakash Gupta

Mr. R.C. Bhargava

Mr. P. Murari

Ms. Madhabi Puri Buch

Mr. Biswajit A. Subramanian

Dr. Rakesh Jain

Mr. Sanjeev Aga

Dr. Hansa Wijayasuriya

Management Team -

Corporate Leadership Team

Mr. Himanshu Kapania - Managing Director

Mr. Ambrish Jain - Deputy Managing Director

Mr. Akshaya Moondra - Chief Financial Officer

Mr. Anil K Tandon - Chief Technology Officer

Mr. Prakash K Paranjape - Chief Information Officer

Mr. Navanit Narayan - Chief Service Delivery Officer

Mr. Vinay K Razdan - Chief Human Resources Officer

Mr. Rajat K Mukarji - Chief Corporate Affairs Officer

Mr. Rajesh K Srivastava - Chief Commercial Officer

Mr. P Lakshminarayana - Chief Operating Officer, Corporate

Mr. Sashi Shankar - Chief Marketing Officer

Mr. Subbaraman Iyer - Chief Operating Officer, National Enterprise Business

Mr. Pankaj Kapdeo, Company Secretary

Circle Heads

Mr. T. G. B. Ramakrishna - Chief Operating Officer, Andhra Pradesh

Mr. Monishi Ghosh – Senior Vice President - Operations, Bihar

Mr. Sanjeev Govil - Chief Operating Officer, Delhi & Haryana

Mr. Arul Bright - Chief Operating Officer, Punjab, J&K and Himachal Pradesh 

Mr. Siva Ganapathi - Chief Operating Officer, Karnataka

Mr. Vinu Verghese – Senior Vice President - Operations, Kerala

Mr. Rajendra Chourasia - Chief Operating Officer, Maharashtra & Goa

Mr. M. D. Prasad – Chief Operating Officer, Mumbai

Mr. Sunil Tolani - Chief Operating Officer, Madhya Pradesh & Chattisgarh

Mr. Anish Roy - Chief Operating Officer, WB & Kolkata, NESA & Orissa

Mr. Puneet Krishnan - Senior Vice President - Operations, Gujarat 

Mr. M. Srinivas - Senior Vice President - Operations, Tamil Nadu & Chennai

Mr. Rajesh Naik - Chief Operating Officer, Uttar Pradesh (East)

Mr. Naozer Firoze Aibara - Chief Operating Officer, Uttar Pradesh (West)

Mr. Sudhir Pradhan - Chief Operating Officer, Rajasthan 

Chapter-3- Marketing Strategies of the Company

A. Introduction about the marketing strategies

Marketing strategy is a process that can allow an organization to concentrate its resources

on the optimal opportunities with the goals of increasing sales and achieving a

sustainable competitive advantage. Marketing strategy includes all basic and long-term

activities in the field of marketing that deal with the analysis of the strategic initial

situation of a company and the formulation, evaluation and selection of market-oriented

strategies and therefore contribute to the goals of the company and its marketing

objectives.

B. Seven P’s of the Marketing

A longer term marketing strategy is underpinned by careful planning and a successful

marketing mix. The marketing mix is a combination of many features that can be

represented by the four Ps.

product - features and benefits of a good or service

place - where the good or service can be bought

price - the cost of a good or service

Promotion - how customers are made aware of a good or service.

Product:

A product with many different features provides customers with opportunities to chat,

play games, send and receive pictures, change ring tones, receive information about

travel and sporting events, obtain billing information - and soon view video clips and

send video

messages.

Idea Cellular live! provides on-the-move information services.

Place:

Idea Cellular UK operates over 300 of its own stores.

It also sells through independent retailers e.g. Carphone Warehouse.

Customers are able to see and handle products they are considering

buying.

People are on hand to ensure customers’ needs are matched with the

right product and to explain the different options available.

Price:

Idea Cellular wants to make its services accessible to as many people as possible:

from the young, through apprentices and high powered business executives, to the

more mature users.

It offers various pricing structures to suit different customer groups.

Monthly price plans are available as well as prepay options. Phone users can top up

their phone on line.

Idea Cellular UK gives NECTAR reward points for every £1 spent on calls, text

messages, picture messages and ring tones.

Promotion:

Idea Cellular works with icons such as David Beckham to communicate its brand values.

Advertising on TV, on billboards, in magazines and in other media outlets reaches

large audiences and spreads the brand image and the message very effectively. This is

known as above the line promotion.

Stores have special offers, promotions and point of sale posters to attract those inside

the stores to buy.

Idea Cellular stores, its products and its staff all project the brand image.

Idea Cellular actively develops good public relations by sending press releases to

national newspapers and magazines to explain new products and ideas.

 5. People: 

Understanding the customer better allows to design appropriate products. Being a

service industry which involves a high level of people interaction, it is very important

to use this resource efficiently in order to satisfy customers. Training, development

and strong relationships with intermediaries are the key areas to be kept under

consideration. Training the employees, use of IT for efficiency, both at the staff and

agent level, is one of the important areas to look into.

6. Process: 

The process should be customer friendly in telecom industry. The speed and accuracy

of payment is of great importance. The processing method should be easy and

convenient to the customers. Installment schemes should be streamlined to cater to the

ever growing demands of the customers. Communication will smoothen the process

flow. Telecom will help in servicing large no. of customers efficiently and bring down

overheads. Technology can either complement or supplement the channels of

distribution cost effectively. It can also help to improve customer service levels. The

use of data warehousing management and mining will help to find out the profitability

and potential of various customers product segments.

7. Physical evidence: 

Distribution is a key determinant of success for all insurance companies. Today, the

nationalized insurers have a large reach and presence in India. Building a distribution

network is very expensive and time consuming. If the insurers are willing to take

advantage of India's large population and reach a profitable mass of customers, then new

distribution avenues and alliances will be necessary. Initially telecom industry was

looked upon as a complex product with a high advice and service component. 

Buyers prefer a face-to-face interaction and they place a high premium on brand names

and reliability. As the awareness increases, the product becomes simpler and they become

off-the-shelf commodity products. Today, various intermediaries, not necessarily telecom

companies, are selling their products. Technology will not replace a distribution network

though it will offer advantages like better customer service. Finance companies and

banks can emerge as an attractive distribution channel for telecom industry in India. In

Netherlands, communication services firms provide an entire range of products. In

France, half of the telecom sales are made through MNC’s. In India also, MNC’s, Youth

of the nation hope to maximize expensive existing networks by selling a range of

products. It is anticipated that rather than formal ownership arrangements.

Another innovative distribution channel that could be used are the non-financial

organizations. For an example, telecom for consumer items like Landline & Mobiles can

be offered at the point of sale. This increases the likelihood of telecom sales. Alliances

with manufacturers or retailers of consumer goods will be possible and communication

industry can be one of the various incentives offered.