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PROJECT REPORT
ON
“EMPLOYEES & VENDORS PAYMENT MANAGEMENT SYSTEM”
FOR
M T S
SISTEMA SHYAM TELESERVICES Ltd.
SUBMITTED TO
NORTH MAHARASHTRA UNIVERSITY
in partial fulfillment of two years full time masters degree in business administration (MBA)
SUBMITTED BY
PREM KR. SINHA
(BATCH : 2009-2011)
DEPARTMENT OF MANAGEMENT STUDIES
NORTH MAHARASHTRA UNIVERSITY
JALGAON-425001
M T S
SISTEMA SHYAM TELESERVICES LTD.
ABDUL HAI COMMERCIAL COMPLEX,EXHIBITION RD.PATNA.- 8000001, FAX – (020)27272766,
Ref.No. DATE:
TO WHOMSOEVER IT MAY CONCERN
This is to certify that Mr. PREM KUMAR SINAH a MBA Student of Department of management studies,
North Maharashtra Univesity, Jalgaon, Maharashtra has undergone training and completed a project on
“EMPLOYEES AND VENDOR PAYMENT MANAGEMENT SYSTEM” in Bihar- Jharkhand region. He has carried out this project for M T S (Sistema Shyam Teleservices Ltd.) from 010/05/2010 to 30/06/2010. In the span of project duration his candidature was found to be very sincere & hardworking. We wish him a bright future.
(sign)Mr. Sanjeev Kr. SinhaHead Of Finance Dept.M T S. Patna Seal
DECLARATION:
I, PREM KUMAR SINHA, hereby declare that the Project entitled “EMPLOYEES AND VENDORS PAYMANT MANAGEMANT SYSTEM” carried out at M T S (Sistema Shyam Teleservices Ltd.) is a genuine work for the fulfillment of Master in Business Administration of Department of Management Studies, North Maharashtra University, Jalgaon (M.S.) and will be solely for the academic purpose.To the best of my knowledge any part of this context has not been submitted earlier for any degree, diploma or certificate examination.
Signature and Name of the Student
ACKNOWLEDGEMENT:
I readly acknowledge my indebtedness to the finance department of M T S (Sistema Shyam Teleservices Ltd.) in which I did my summer training. I am grateful to FR Head ‘Mr. Sanjeev Kr. Sinha’ who gave me golden opportunity to do training in the channel. I am also grateful to him for motivating and encouraging me at every step. I deeply extend my gratitude and appreciaton to Ms. Kanupriya, Senior lead Finance dept. (under whom Idid my training) whose support, dedication and honest effort have given me an immense help in preparing this project. I am also highly thankful to Mr. Amit kumar and Mr. Deepak Sharma whose valuable knowledge, encouragement and suggestions gave backbone support in completing this project. At last my special thanks to all the employees of finance department of MTS (Mobile Telecom Services) for giving confidence and strength to initiate this venture.
Executive Summary
The purpose of this report is to summarize the activities I undertook as part of my summerinternship at Sistema Shyam Teleservices Ltd. I had to work in coordination with the company‘sfinance team to understand the commercial activities in Bihar -Jharkhand region.
In this report I have given a brief picture of the Indian telecom industry to demonstrate thepotential for growth for MTS as a player in this field. I have also depicted the current standing ofMTS on the horizon of Indian Telecom industry
I have also narrated our experience of this two months worth of interaction with different finance Executives and the seniors working in MTS in Bihar Jharkhand region.
I have done a SWOT analysis of the brand and compared it with its peers. I, based on my experience,have come up with my own conclusions that I feel might be useful to the company, in whateverlittle way, in promoting MTS business.
10. Methodology & Procedure of work………...……………………….……………………..47
11. Analysis Method…………………………………………………………….……………..48
INDEX
1. Industry Overview………………………………………………………………..… 6
2. Company Overview………………………………………………………………... 13
3. Analyses
a. Porter‘s Five Forces Model………………………………………………… 17
b. PEST Analysis…………………………………………………………….... 19
c. SWOT Analysis…………………………………………………………….. 22
d. BCG Matrix……………………………………………………………….... 25
e. Ansoff Matrix……………………………………………………………..... 26
4. Data cards – scope and prospects…………………………………………………… 28
5. Corporate Strategy………………………………………………………………...... 29
6. Product Description………………………………………………………………… .30
7. Peers Analysis ………………………………………………………………………. 31
8. Project Description
a. Overview……………………………………………………………………. 35
b. Market Feedback…………………………………………………………..... 44
c. Opportunities……………………………………………………………....... 44
d. Challenges…………………………………………………………………... 44
e. Learning………………………………………………………………………45
9. Recommendation…………………………………………………………………..... 46
6
2004 2005 2006 2007 2008 20090.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
40.00
45.00
Teledensity in India (in %)
7.04%9.61%
13.96%
19.00%
28.33%
39.86%
1. Industry Overview:
The Indian telecommunications industry is one of the fastest growing in the world and India isprojected to become the second largest telecom market globally.
According to the Telecom Regulatory Authority of India (TRAI), the number of telecomsubscribers in the country increased to 562.21 million in December 2009, an increase of 3.5 percent from 543.20 million in November 2009. With this the overall teledensity (telephones per100 people) has touched 47.89.
According to Business Monitor International, India is currently adding 8-10 million mobilesubscribers every month. It is estimated that by mid 2012, around half the country's populationwill own a mobile phone. This would translate into 612 million mobile subscribers, accountingfor a teledensity of around 51 per cent by 2012.
Moreover, according to a study conducted by Nokia, the communications sector is expected toemerge as the single largest component of the country's GDP with 15.4 per cent by 2014.
7
Object 3
With the availability of the 3G spectrum, about 275 million Indian subscribers will use 3G-enabled services, and the number of 3G-enabled handsets will reach close to 395 million by2013-end, estimates the latest report by Evalueserve.
According to a Frost & Sullivan industry analyst, by 2012, fixed line revenues are expected totouch US$ 12.2 billion while mobile revenues will reach US$ 39.8 billion in India.
Telecome industry revenues in US $
State-run telecom operator BSNL has rolled out 3G services in 318 cities with 856,000subscribers. BSNL has plans to cross 760 cities by September 2010. And even as debate on 3Gcontinues, TRAI has started consultation on the next level of telecom services. Fourth generationor 4G offers download at faster speeds.
8
9
Object 5
Object 7
Telecommunication industry is mainly classified into two sub headings – voice and data. Voiceservice can be provided through either wire-less or wire-line. Wire-less segment is boomingnowadays after investment of foreign companies. The major players in this field are Bharti,Vodafone, Reliance, BSNL etc.
Market share of Basic Services inIndia
8%
Wireless
Wireline
92%
MTS operates in wireless segment, and in this segment the two technologies available are: GSM,and CDMA. GSM is prominent in India and has better margin than CDMA. MTS runs on theCDMA technology, which is faster than GSM and is a newer technology. In CDMA big playersare Reliance and TATA.
Indian Mobile ServicesMarket Share
(As of June 2009)
CDMA46% GSM
54%
2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-090
2
4
6
8
10
12
14
16
Internet subscriber : 2000-2009
The second major source of revenue is internet. The use of internet is increasing and quite a
number of consumers are switching from wired-lines to wireless connections. But still wired
lines are preferred by a majority of consumers as it is cost affective and provides better
connectivity.
Internet service: June 2009
Dial upLeased lineBroadbandInternet telephonyIPTV ServiceOther service
22
59
11
10
7
10
Value-Added Services Market
Currently mobile value-added services (MVAS) in India accounts for 10 per cent of theoperator's revenue, which is expected to reach 18 per cent by 2010. According to a study byStanford University and consulting firm BDA, the Indian MVAS is poised to touch US$ 2.74billion by 2010. MTS can couple its wireless broadband services with different value addedschemes to make the product more attractive to the user.
Major Investments
The booming domestic telecom market has been attracting huge amounts of investment which islikely to accelerate with the entry of new players and launch of new services.
The government has approved the foreign direct investment proposal of the FederalAgency for State Property Management of the Russian Federation to buy 20 per centstake in telecom service provider Sistema-Shyam for US$ 660.1 million.
Reliance Infratel, the tower subsidiary of Reliance Communications (RCom), will build56,596 telecom towers by financial year 2010, increasing the total number of towers to100,000.
BSNL, India's leading telecom company in revenue terms, will put in about US$ 1.16billion in its WiMax project.
Vodafone Essar will invest US$ 6 billion over the next three years in a bid to increase itsmobile subscriber base from 40 million at present to over 100 million.
Norway-based telecom operator Telenor has bought a further 7 per cent in UnitechWireless for a little over US$ 430.70 million. Telenor now holds 67.25 per cent. Lastyear, it had bought a 60 per cent stake for US$ 1.23 billion.
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Policy Initiatives
The government has taken many proactive initiatives to facilitate the rapid growth of the Indiantelecom industry.
100 per cent foreign direct investment (FDI) is permitted through the automatic route intelecom equipment manufacturing.
FDI ceiling in telecom services has been raised to 74 per cent.
Introduction of a unified access licensing regime for telecom services on a pan- Indiabasis.
Introduction of mobile number portability in a phased manner, starting in the fourthquarter of 2008.
The government is implementing a program of connecting 66,822 uncovered villagesunder the Bharat Nirman programme.
The Road Ahead
The target for the 11th Plan period (2007-12) is 600 million phone connections with aninvestment of US$ 73 billion. Apart from the basic telephone service, there is an enormouspotential for various value-added services.
According to the CII Ernst & Young report titled 'India 2012: Telecom growth continues',revenue from India's telecom services industry is projected to reach US$ 54 billion in 2012, asagainst US$ 31 billion in 2008.
12
2. COMPANY OVERVIEW:
Sistema Shyam TeleServices Ltd. — Sistema`s subsidiary in India, joint venture of JSFCSistema and Shyam Group of companies. Mobile TeleSystems OJSC (MTS) is the largest mobilephone operator in Russia and the CIS. MTS services over 91.33 million subscribers (as of July31, 2008). MTS provides mobile communications in Russia, Ukraine, Uzbekistan, Turkmenistan,Armenia and Belarus, the territory with a total population of more than 230 million. MTS ranksas the 8th largest operator in the world by proportionate subscriptions at the end of 2007
Sistema Shyam TeleServices Ltd. was founded in 1998 (original name – Shyam Telelink Ltd.)and started full-scale business in Rajasthan in 2000. Sistema is the majority share holder in thisjoint venture with a 73.71% equity stake, along with the Shyam Group, holding a 23.79% stakeand the remaining 2.5% being held by the public.
The company obtained its pan-India license for provision of mobile services in March 2008 andat present has enough spectrum to provide mobile telephony services in 22 telecom-circles,covering India‘s 28 states and 7 union territories, with a population of 130 million. With thelaunch in Andhra Pradesh, SSTL will have expanded to 12 telecom circles. The other circles areRajasthan, Bihar/Jharkhand, Kolkata, Rest of West Bengal & Sikkim, Chennai, Tamil Nadu,Kerala, Karnataka, Mumbai, Maharashtra, Haryana/Delhi & NCR. The high-speed mobilebroadband service, MBlaze, was launched in November 2009 and has seen tremendous marketacceptance with over 70,000 satisfied customers in a short span of time. In April 2010, MTSlaunched MTS TV for MBlaze customers.
Sistema Shyam TeleServices (SSTL) is the fastest growing telecom company in the competitiveIndian market, with over 4 million voice subscribers, with about a million in West Bengal alone,and 70,000 data customers. SSTL has tied up with Mobile TeleSystems OJSC, a JSFC Sistemacompany of Russia, to bring the globally acclaimed telecom brand – MTS - to India. MTS isthe 8th largest telecom brand in the world. Millward Brown has recently voted MTS as the 72ndranked Brand from among the Top 100 Brands in the world.
The new head office of Sistema Shyam TeleServices is located in Gurgaon – one of India‘scommercial capitals near Delhi. These new headquarters combine the functions of corporateoffice and technology centre, where top management and experts of different divisions areequipped with the most modern infrastructure to support their work.
Since March 2009, Sistema Shyam TeleServices has been able to use the MTS brand foradvertising and other communication in India as per the agreement signed between the companyand MTS in December 2008. And since its launch, the MTS brand has been successful in everymarket it has stepped into.
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Registered Office:
Sistema Shyam TeleServices LimitedB-2-D , Shiv Marg , Bani ParkJaipur ( Rajasthan) - 302016
Corporate Office:334,Udyog Vihar, Phase 4,Gurgaon, Haryana.
Regional Office's:New Delhi:A-60,Naraina Industrial Phase-1,New Delhi. Email us:[email protected]
Jaipur Office:B-2-D, Bachhawat House,Shiv Marg, Banipark,Jaipur, Rajasthan.Email us:[email protected]
Chennai Office:E 2 A,Near Fire Station,Phoolbagh Chowk,Chennai, Tamil Nadu.
Kolkata Office:P.S. Srijan Tech Park,9th Floor,DN-52, Sector V,Saltlake City, Kolkata- 7000
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COMPANY VISION, MISSION & VALUES
Vision
MTS shares common values with people who know what they want to achieve in their lives and are full of energy to hit their goals."We empower people to pursue their purpose in a modern networked world."
Mission
"MTS customers can actively shape their lives anytime and anywhere with a range of innovative telecom products and services."We offer people greater choice and inspiration in how they spend their most valuable assets: their time and energy.
Our Values
Delivering Excellence
We serve our customers by delivering the best. We believe in meeting or exceeding our customer’s expectations by utilizing our resources while adhering to best in class processes and quality standards. We articulate our goals clearly and align our strategies, resources and assets to deliver excellence. This we believe translates into superior value for our customers and stakeholders.
Mutuality
We believe shared and reciprocal benefits around common objectives help us meet our quality commitments. We work with our colleagues and business partners to deliver the highest value for our customers. We build supportive relationships and ensure fair returns to all who help us achieve our goals. We inspire trust in our relationships by keeping long term success of all parties in mind.
Entrepreneurial Spirit
We demonstrate ownership to meet our commitments by acting like co-owners. Every day we deliver our best by assuming complete responsibility and by being passionate about our goals. We encourage and reward those who look for ways to improve the current and search for the new.
Inspiration to be a Doer
We believe in people, their abilities and potential. We support them to deliver under different conditions and unleash their talent. We do everything possible to help every member of our organization become a doer, a role model and inspiration to all. Our environment promotes risk taking, innovation, agility and responsiveness.
15
COMPANY LOGO:
COMPANY SLOGAN: “ Badlo life ka plan”
16
3. Analysisa. Porters’ Five Forces Model:
Power ofSuppliers
Threat of Compititive Power ofNewRivalry BuyerEntrance
Availabilityof
Substitutes
Threat of New Entrants (Moderate):
It comes as no surprise that in the capital-intensive telecom industry the biggest barrier to entry isaccess to finance. To cover high fixed costs, serious contenders typically require a lot of cash. Inaddition, it is important to remember that solid operating skills and management experience isfairly scarce, making entry even more difficult. But still Threat of new entrants is always therefor any company, MTS itself being a new entrant in the field of wireless broadband services.
17
Power of Suppliers (Low):
At first glance, it might look like telecom equipment suppliers have considerable bargainingpower over telecom operators. Indeed, without high-tech broadband switching equipment, fiber-optic cables, and mobile handsets and billing software, telecom operators would not be able to dothe job of transmitting voice and data from place to place. But there are actually a number oflarge equipment makers around. There are enough vendors, arguably, to dilute bargaining power.MTS will have a variety of suppliers to choose from, because most of the suppliers would beeying to get the contract to be the supplier of the company.
Power of Buyers (High):
Lack of differentiation amongst the service providers has led to sort of commoditization of theproduct. MTS provides the same service as others provide, this lack of differentiation givescustomer an edge to bargain with service providers, they can switch to any other provider anytime they want. Fierce competition among the competitors also offers a great deal to bargain. Asthe switching cost is also very low, all these situations are creating problems in the growth ofcompany.Availability of Substitutes (High):
Products and services from non-traditional telecom industries pose serious substitution threats.Cable TV and satellite operators now compete for buyers. The cable guys, with their own directlines into homes, offer broadband internet services, and satellite links can substitute for high-speed business networking needs. The threat of the substitutes for MTS is very high in Indianmarket as the already existent players have a huge market share and better brand perceptionamong the consumers, making it tough for MTS to win the trust of its customer and increase itsmarket share.
Competitive Rivalry (High):
Competition is "cut throat". The wave of industry deregulation together with the receptive capitalmarkets paved the way for a rush of new entrants. New technology is prompting a raft ofsubstitute services. Nearly everybody already pays for phone services, so all competitors nowmust lure customers with lower prices and more exciting services. This tends to drive industryprofitability down. In addition to low profits, the telecom industry suffers from high exit barriers,mainly due to its specialized equipment. MTS will face a cut throat competition from its wellestablished competitors – such as Reliance and Tata – that are already there in the CDMAmarket.
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b. PEST ANALYSIS:
It is a systematic examination of all 4 levels of the environment with at least three purposes:
Detecting important economic, social, cultural, environmental, health, technological, andpolitical trends, situations, and events.
Identifying the potential opportunities and threats for the institution implied by thesetrends, situations, and events.
Gaining an accurate understanding of your organization‘ s strength and limitations.
A PEST analysis of the macro environment indicates that economic (a phone call being acheaper way to stay in touch than outstation travel for example) and social factors (workingoutside the home town) have forced the pace of utilization of technology (Public Call Offices,mobile phones, networked companies).
Increasing customer awareness has raised expectations and vocal demands are being articulatedfor consumer rights; such political factors have in turn impacted the competitive environment byway of entry of private players, independent regulation, and a policy framework tilted towards alevel playing field for new entrants.
19
Political factor
High entry fees in 3G marketIn India legal obligations are there regarding 3G auction and bidding which limits
it to the existing players and not available to the new entrants this political factor forbidsthe MTS entry in to 3G services.
Reduction in tariff plan
Earlier the tariff rates were higher due to high taxes, but now it has become lowestin the world by tax reforms.
Extension of license period
Government has replaced the license fees with revenue sharing scheme andextended the license period from 10 year to 20 years. A company can merge with anotheroperator only after 3 years of receiving license. This rule can be eased to help MTSmerge with established players.
Economical factor:
India is one of the most vibrant and fastest growing telecom market in the world enjoys thesteady growth rate of 10 million mobile users every month .India has a moderate but still ahealthy growth rate which will provide a good base for MTS to grow with growing economy.
Social factors:
Perception of new entrant in the market
As MTS is a new brand in the Indian market it will be facing problems regardingthe perception of a new entrant, this image will adversely affect the buying capacity ofcustomers, they will think about the network, and the kind of service they will get aftersale.
20
Social status
Anything customers buy that reflects their social status, as MTS doesn‘t have a
reputation in this market although it has a strong customer base in Russia and a greatimage of its products, people will be conscious about their social status this will affectcompany‘s growth adversely.
Technological factor:
The business in a country is greatly influenced by the technological development. Thetechnology adopted by the industries determines the type and quality of goods and services to beproduced and the type and quality of plant and equipment to be used.
As MTS has seen its competitors and the kind of technology being used by them, so company isaiming to come up with something new that is not been available to its competitors. MTS use itstechnology in many ways they have.
MTS Connect service provides a simple and convenient access to the Internet through thetechnology of data transfer GPRS/EDGE.
21
c. SWOT ANALYSIS
Strengths of the company Weaknesses of the company
Experience in Russia New entrant in Indian Telecom market Pan India presence Least Brand Recall in Customer‘s mind
in India Low tariff plan Less Promotional Activities Innovative schemes
Parent company is financially sound
Opportunities for the company Threats for the company
Competition from other cellular‘s Latest technology and low cost Less product awareness in the market advantage Brand perception Huge market
Strengths of the company:
Experience in Russia:
MTS is having a huge experience in this field of business as they have been showing theirpresence since 1993 and a great customer experience in Russia and in other countries.Experience of MTS will help them to plan their strategy for Indian market accordingly.
Pan India presence:
MTS is going to offer the most expansive roaming network. Letting you roam anywhere inIndia with its Pan-India presence, and trot across the globe with Inter national Roamingspread in over the networks. The mobile services group provides CDMA mobile servicesacross India in 11 telecom circles.
Low tariff plan:
MTS is coming with one of the cheapest tariffs in telecom sector by providing ½ paisasecond call and in some region plan gets even cheaper ½ paisa 2 seconds. MTS launched avery different and attractive scheme i.e. 100000 minute free talk times with every newconnection. Its tariff plans for internet data cards is also cheapest in India.
22
Innovative schemes:
MTS have launched a special bundle offer for data cards with HP and HCL laptops atsubsidized prices. It also have launched a special offer, wherein a MTS mobile customer canmake unlimited outgoing calls to any MTS mobile within the state for 999 days just bypaying 999 rupees.
Parent company is financially sound:
Sistema is a Russian conglomerate. And it has a plenty of cash to invest further as backup.
Weaknesses of the company
New entrant in Indian Telecom market:
As MTS is a new entrant in the Indian telecom sector, not having a good customer base, itwill face a cut throat competition from its competitors.
Least Brand Recall in Customer’s mind in India:
As the company is a new entrant in the Indian cellular market, customer will have aperception of bad network and not a good customer service.
Less promotional activities:
ATL Advertisements are done very rarely, as compared to other players of the same industrylike, Reliance, Tata and Vodafone.
Opportunities for the company
Latest technology and low cost advantage:
MTS can enjoy its latest technology and low cost advantage. The number of cities, towns andvillages it has covered already works to its advantage as putting more base stations forcellular coverage in these areas comes with negligible marginal cost. Besides such costadvantages, it has also other cost advantages for the latest cellular technology.
23
Huge market:
The cellular telephony market is presently expanding at a phenomenal rate every year and
there is still vast scope for MTS to enter & expand in this market. Besides there is a vast ruralsegment where the cellular services have not made much headway and many customers arelooking towards MTS for providing the service to them. With its presence even in theremotest areas, MTS can gain a big market share in this segment.
Other opportunities:
India is the second-largest telecommunications market in terms of sheer numbers of potentialsubscribers, and one of the fastest growing in the world. MTS can cover all the 22 telecomcircles of India through its adequate strategies and investment in network coverage.
Threats for the company
Competition from other cellular’s:
It is time for MTS to expand its cellular services. Fierce competition is already in place withthe markets ever abuzz with several tariff reductions an announcement of attractive packages,trying to grab most of the mind share of the king – the consumer , whose benefits areincreasing with passing of everyday.
If MTS will not be innovative and agile, its cellular service will be a flop. It needs to beproactive with attractive packaging, pricing and marketing policies lest its presence in themarket be treated with disdain by the private cellular companies. The launch of WLLservices by Reliance communication has aggravated the situation.
Less product awareness in the market:To make its presence felt in the market, MTS should launch different promotion andadvertisement activities.
Brand perception:Building a strong brand image will help the company grapple with competition from wellknown names like Reliance and Tata.
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d. BCG Matrix
MTS lies in Question marks category because its market growth is high but its current marketshare is low. Company has a chance to move towards Star category if it is able to increase its
relative market share significantly.
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e. ANSOFF MATRIX
The company should follow the four strategies depending on the demand and product asindicated in the matrix.
Market penetration:
Market penetration is the name given to a growth strategy where the business focuses on sellingexisting products into existing markets.
As it is been clear from the above definition that market penetration is the strategy werecompany try to maintain their share in the existing market with their existing products .
As MTS is a new entrant in the Indian cellular market, so they are not into the market penetrationstrategy. But in Russia they are following this strategy of market penetration.
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Market development
Market development is the name given to a growth strategy where the business seeks to sell itsexisting products into new markets. As MTS has target a new market for its product so they arefollowing the market development strategy in which they have exported there product to India.
Company has already made its presence in Uzbekistan, Belarus, Russia, Ukrain, Armenia, andTurkmenistan and now in India.
Product development
Product development is the name given to a growth strategy where a business aims to introducenew products into existing markets. About product development we are not sure whether theyfollow the product development strategy or not.
Diversification
Diversification is the name given to the growth strategy where a business markets new productsin new markets. About this strategy also we are not sure whether they will go for it or not as theyproviding existing service all over the world.
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4. Data cards – scope and prospect:
With the dawning of the twenty-first century, India has witnessed a drastic change in the waybusiness is conducted. Business travels across the globe have become commonplace, and this isgaining momentum with time. India too is on the move and wants to stay connected anytime,anywhere-whether on a train or bus, in a hotel or conference hall, within India or abroad.Meeting this need of business travelers are data cards and USB modems that have become thepreferred solution, even before wireless mobile broadband is introduced in the country. In theage of IT where information is everything, everyone needs to be connected to the web 24X7.
According to the World Travel and Tourism Council, India has become one of the fastestgrowing countries in terms of the number of travels made within the country and betweencountries, by road and air. And here the communications industry found a profitable businessopportunity.
Growing businesses in all segments, necessity to access emails and corporate applications duringurgent business trips and the urge for some entertainment while on the move are some driversincreasing the demand for data card usage. Wired-line broadband connections are yet topenetrate the vast semi- urban and rural parts of the country where entrepreneurs, officials,students, etc have the need to surf the Internet for various purposes. Though the laptoppenetration in these areas has not made a significant mark, desktop penetration is comparativelymore.
With data cards offering convenient access to the Internet, a number of companies have started totie up with service providers to avail bulk network connections for their employees on the go andallow them to utilize their time during business travels. Since data cards can be used withdesktop also, it cuts down the office infrastructure costs as well. Growth of mobile telephony inIndia has created users with specific needs like m-commerce that require wireless Internet,driving the wireless data card growth. Once the concept of mobile wallet and its applications hitthe market in India in the near future, the wireless data card segment is also expected to witnessan exponential growth.
All major service providers, including Reliance Communications, Bharti Airtel, Tata Indicom,BSNL, and Vodafone and MTS have launched data cards to tap the vast opportunity lying ahead.The players are offering data cards and USB modems at competing prices and different tariffplans to woo customers.
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5. CORPORATE STRATEGY
MTS aims to be the leading communication operator in India, providing its customers withmobile and high internet access at home and on the move. For this company is trying to movebeyond the mobile access.
The development of MTS beyond mobile access is part of our strategic initiative 3i .Company‘s direction is basically based on three main principles:
Integration
Internet
Innovation
Integration
In integration company is basically trying to develop new pipeline‘s and customer touchpoints. Company aims to provide comprehensive integrated service portfolio for all of theircustomers. Communication needs, through both fixed line and wireless access. The networks andplatforms company is developing will create a seamless and unsurpassed –user experience.
Internet
For internet facilities company is trying to offer universal connectivity to its customersbecause customer increasingly expects faster and broader connectivity. Company is trying tocreate smarter pipelines so the customers can realize full benefits of today‘s technology and tocompete with other brands.
Innovation
Differentiating MTS from its competitors by of fering a unique mix of products andservices, MTS will offer exclusive devices, distinct packages and services.
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6. Products offered by MTS:
MTS has three products in wireless broadband segment
1. Mblaze premium
Plug & Play enabled
Speed up to 3.1 Mbps
Fastest uploads at a speed to up to 1.8 Mbps
Micro SD card slot for data storage
Stylish swivel modem for flexible usage
2. Mblaze standard
Plug & Play enabled
Speed up to 3.1 Mbps
Fastest uploads at a speed to up to 1.8 Mbps
3. Mbrowse
Plug & Play enabled
Cutting edge CDMA 1X technology
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7. PEERS ANALYSIS:
Data-cards satisfy the following needs:
Primary Need: Wireless internet for communication, networking and entertainment.
Secondary Needs : Status, as storage device
Direct competitors: As the primary need of this product is internet on mobile, the directcompetitors would be the product which provides the same service. They are….
Data cards of other companies
GPRS services
The major players in this segment are TATA, Reliance netconect, Airtel broadband services asgiven below…..
•Venture of TATA group •Runs on CDMA technology •Has same product range MTS •Has strong brand image and faith for better service
•Venture of Reliance group •Runs on CDMA technology •Has same product range as MTS •Has strong brand image but less faith for service
•Venture of Bharti Airtel •Runs on GSM technology •Provides only 1X device •Has strong brand image but giving less speed becase run on GSM
platform
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Indirect competitors: This product has feature of providing internet services on move. All othermeans by which internet can be avail are the indirect competitors of this product
Dial up connections
Leased lines
Wire line broadband
Cyber café
Wi-Fi
Wi-Max
Other competitors: Main uses of this service are communication, entertainment, informationsearch etc so below given are other competitors of this service
Magazine
News paper
I pod
TV
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Prepaid plan comparisons
FreeUsages
Validity(in days)
MTS Tata Photon+ Reliance
Price Price Difference Price Difference
250MB 30 198 200 2 250 52350MB 30 248750MB 30 498 500 2(650MB) 500 2(700MB)
1GB 30 598 700 102 715 1172GB 30 698 850 1523GB 30 798 1000 202 935 1376GB 30 898 1200 302 1210 31210GB 30 1050 1350 1379 32915GB 30 1500 2100 1925 42530GB 30 3000 4200 85050GB 30 5000 7000 1985
10GB Night 30 5953GB 90 1794 306 3519GB 90 2394 606 41118GB 90 2694 906 93630GB 90 3150 4050 98745GB 90 4500 6300 12756GB 180 3588 612 70218GB 180 4788 1212 82236GB 180 5388 1812 187260GB 180 6300 8100 197490GB 180 9000 12600 255012GB 365 7176 1224 140436GB 365 9576 2424 164472GB 365 10776 3624 3744120GB 365 12600 16200 3948180GB 365 18000 25200 5100
Extra Usage Charges – 50p/MB Top Up Not Available Rs.1/MB
Approach to competition
MTS is providing A cheaper Tariff plan to attract huge customers in the market and to
increase its Market share. (see table-1)
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Postpaid Plan Comparisons
Bundled Free Usage
MTS Tata Photon+ Reliance
Monthly Rental Monthly Rental Difference Monthly Rental Difference
1GB 598 650 52 650 522GB 698 750 52 750 523GB 798 850 52 850 526GB 898 950 52(5GB) 1099 201(5GB)10GB 1050 1100 50 1250 20015GB 1500 1500 0 1750 25010GB 499 499 0
Extra Usages Charges- 40p/MB 50p/MB 50p/MB
3GB Night 99 751 75110GB Night 199 901 105110GB Night 199 901 1051
MTS is also offering 10,00,000 free MTS minutes to its new subscribers in order to gain customer‘s attention in the market and to make their presence felt in the market.
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8. PROJECT DESCRIPTION:a. Overview
As part of the financial activities (employees & vendors) of MTS, I was assigned to interact with VHDteam, document their activities and feedback and suggest ways to decrease the time taken in processing
different bills of employees and vendors.
Initially, I was intimated of the VHD process and its importance in the payment system. V H D
(vendor help desk)
V H D-is a system under which all kinds of billings related to vivid vendors are brought and processed. Every
kind of bill passes through different desks of concerned depts and finally payment is done. Every desk holds
the channelised bill for some stipulated periods called SLA. The time taken during this process is about 24 to 28
days.
The channel can be prepared like as under-
DESK SLA
1) MTSPATNAVHD 2 days2) 1st user(concerned dept) 3 ,,3) User approver II 2 ,,4) VHD II approver 1 ,,5) Finance (circle finance Bihar) 5 ,,6) Transit 3 ,,7) Corporate finance 5 ,,8) Treasury 2 ,,9) Pending for sig. 1 ,,10) Dispatch 0 ,,11) Paid Bills 0 ,,
24 Days
Vendor help desk (VHD) assists the company in tracking each and every vendor invoice as it travels through the departments in the company for approvals while monitoring the SLA committed to the vendor for payment. This is mainly set up to handle large volumes of vendor invoices or as a help to a centralized payable process running in corporate.While mostly the VHD is customized to suit the requirements of the clients, however broadly it aims to achieve the following:
Centralize the vendor bills receipt/tracking.
Check invoices for relevant supporting and provide e-mail confirmation to vendors for receipt of invoice.
Forward to departments for approvals.
Forward to finance for cheque preparation.
Cheque issuance to vendors with details.
Monitor turnaround time for payment.
MIS
Handling all correspondence with vendors.
TDS certificates and C form request receipt and forwarding to concerned departments.
Typical advantages of setting up the VHD are :-
Vendor interaction with user, Commercial, Finance for unusual follow-ups is reduced saving time and energy for core areas.
Vendor gets one window contact for all the Query resolution.
Vendor is intimated for invoice receipt on mail so no botheration for giving the physical receiving resulting in reduced walk-in of vendors, only the invoices which are with all the supporting documents are entered in system else returned to vendor requiring the complete papers thus entering only complete invoices in system.
With the introduction of invoice cover sheet where all the department will mention the amount approved and brief reason for deduction if any,VHD is able to provide the vendor with actual picture and complete transaction of invoice value on its own without any follow up by vendor. This also reduces year end reconciliation's to large extent
Regular follow up with all the concerned department for raising an alarm as to pending invoices which are not approved within departmental SLA, Personal follow up with user and if not responded then escalation to HOD.
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Mails to all the department intimating the cheques released for the invoices relating their department.
Taking the Address Change request from vendors and giving to commercial department for updating in system so that the cheques are printed with right addresses.
Vendor Help desk will track the request for TDS and WCT certificates form vendor and forward the same to respective department and release the certificate with receiving from vendor acknowledging the same once received for concerned department.
EMPLOYEE PAYMENT:
All employees of MTS in Bihar –Jharkhand region are paid their remuneration through finance channel. All claimed bills of employees come to finance channel where they are processed and cleared. Finally they are sent to the corporate office for further processing of cheque preparation and payment.
The work done in employee payment process is as follows:
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Checking of bills (making necessary
deduction according to company policy )
Voucher entry of the checked bills
Maintenance of excel sheeet
Take appropriate approvals of the seniors
and finance head
Sending of excel sheet to the corporate office for cheque preparation and payment
VENDOR PAYMENT:
No
Yes
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Start
Receipt of Invoices with all supportingdocuments at the respective locations by the clients
Preparation of Summary Statement/Tracking Sheet
Courier the Invoices wih relevantsupporting documents & Summary
Statement to Osource Processing Center
Receipt of Invoices at Osource
Verification of Summary Statement vis-à-vis attached invoices & confirmation of
same to the Client
Entry of Invoices in Osource Web System
Verification of Invoices as per Level – IChecklist
Compliant with
Level – I Checklist
Rejected Invoices sent back to theClient with rejection memo
Level – I Approval
No
Yes
Rejected
Approved
No
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Verification of Invoices as per Level – II
Compliant with Level –II Checklist
Rejected Invoices sent back to the
Client with rejection memo
Level II Approval
Email to Client Approvers (as per defined ApprovalMatrix)
Approval/Rejection of the Invoices in Osource WebSystem by Client Approvers
Approval/Rejection Rejected Invoices sent back to the
Client with a rejection memo
Preparation of Upload File (Text File) for ApprovedInvoices
Upload of Approved Invoices (Text File) in the Client’s
Accounting System (SAP/Oracle/Peoplesoft or any other
Matching of Text File Count with Entries Uploaded in the
Accounting System
Count Tallied Verification & Upload of Mismatch
entry
Payment Processing
Both modes Cheque payment
Bank transfer
Invoices Posted in System for Payment Processing
Bank transfer for
cheque payment
Print Cheques & Provide to the Cleint forsignature
Download of Text File post PaymentRun generated from the Client’s
Accounting System
Upload of Payment Process Data inOsource’s Web System
Preparation of Bank Transfer Files & Provide to the
Client for Signature
Post Signature, Dispatch to the Bank
Handover Physical Documents to the Client
Process completed
Post Signature, Dispatch Cheques to the vendor
Update Cheque Details in cheque register
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Invoice payment and its processing:-
Vendor
Invoice
Vendor Help Desk (VHD)
First user
Vendor Help Desk (VHD)
Financial Reporting(FR)
Corporate office
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Invoice Processing & payment:
Invoice given by vendor
Invoice checking, whether it is complete in all respect or not
Invoice entry in IRIS (system software)
Checking by supervisor
Approval by manager
Cheques upload by user
Approved by two ‘cheque signing authorities’
Cheques issued by bank & collected by FR (financial reporting)
Basic checkpoints to pass any bill:
Company name
Bill is related with which purpose
Quantity
Amount
Date
PO (purchase order)
Authentication by related department
GRN (Goods Recipient Note)
Agreement and “Term and Condition”
Advance (if paid)
NOA (Note Of Approval) in some special cases
Important points:
NOA – Note of Approval is necessary for some special expenses which are mainly onetime expense. In
some cases instead of PO, NOA is attached. e.g. Picnic expense etc. It mainly needs approval of related
department, user department, FR head or CEO/COO.
Invoice – Invoices are mainly for capex (capital expenditure) and opex (operating expenditure). These
are provided by vendors. These are legal documents which show that when, how much and at what prices
quantities were delivered according to Purchase Order.
Purchase order - It is an order to vendor which includes vendor’s name, item’s details (such as item’s
name, quantity, rate etc.), delivery schedule all the terms and conditions, and GRN in case of capex and
opex (warehousing goods).
GRN- It is a Good Receipt Note. 42
MONTHLY ACTIVITIES
Revenue Booking and Accounting:
PREPAID REVENUE
1 MTS -outgoing
2 Recharge processing fees [RCV]
3 Recharge processing fees [LAPU]
4 Recharge processing fees [EURONET]
5 GPRS
6 Local SMS
7 National SMS
8 International SMS
9 Roaming SMS
10 Enhance SMS
11 Hello Tune Download
12 Hello Tune Subscription
13 Hello Tune Usages
14 Roaming National
15 MMS
16 Voice Portal – voice Portal – Other Services
17 VMS Retrieval Charge
18 Voice Based Ring Tones
19 Forfeiture
20 IC Revenue
21 Roaming Revenue
POST- PAID REVENUE
1 Postpaid – VAS Revenue
2 Postpaid- Rental Revenue
3 Postpaid – MTS Revenue
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b. Market feedback:
Most of the companies were already using data-cards of other companies. They couldn‘tswitch as it was against their companies contract with those ISPs which was binding onthem all over India.
A few companies liked the product but were reluctant to switch over to it as they weresatisfied with their present ISP. They may consider our brand in case or future need.
A few companies had no use for wireless data-cards as leased lines suffice for them.
Companies have reservations against MTS as it is a new brand and has low visibility inthe market.
A few companies were interested in postpaid data-card connection which MTS is notproviding at present.
Most of the companies wished to compare our plan and services with that of our peersbefore deciding on the ISP. We have mailed our tariff plans to the companies concerned.
Companies were reluctant to agree to any lock-in period—even if for a few months—wherein they were required to recharge with a fixed amount if they chose to take ourdata-cards free of cost
Companies with new needs are more likely to consider our product.
Educational institutes are ready to give us space for setting up canopies to promote MTSto their students.
Local manufacturers can get into tie ups with MTS, as is the case with HP & HCL.
d. Challenges
Access to the right persons in the companies
Many companies could not take the decisions regarding such deals, as this power liedwith their corporate offices that were stationed outside Bihar-Jharkhand.
Appointment were very hard to get as many people who oversaw these matters in theircompanies didn‘t have time nor any interest in switching over to a new ISP.
Lack of post-paid plans also mattered.
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c. Opportunity for the company
e. Our learning:
Practical insights into the life and work in a corporate.
How to apply the management learning and soft skills while working at the workplace.
How to take important deduction in employee and vendor payment.
Interacting with various employees and vendors of the company.
Various details on deal negotiation and closures.
Exposure to the fierce competition and the struggle, where only the fittest survive.
How to remain patient and composed in the face of anxiety and pressure.
Accepting negative feedback and listening to ‘NO’ but still finding a way out
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9. RECOMMENDATIONS
MTS can provide demo data-cards for trial to prospective clients.
MTS should do its product promotion on a large scale to make people aware of MTS.
Company should try and provide better after sales and value added services than its peersto attract new clients and retain the existing.
As the company has poor customer base in India, but it is a successful brand in Russia,they should highlight this fact as brand building exercise for MTS.
Focus more on companies which requires their employees to move in course of their jobsviz. consultancy firms, software development companies etc.
Railway stations and airports can be used for setting up kiosks for compiling a databaseof prospective customers.
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Methodology and Procedure of work:
The methodology and procedure of work is done by interacting people of finance department to understand how finance function works especially payable and revenue vertical. The following procedure have been adopted to complete this project.
SL No. COLLECTED FACTS REMARKS
1 KNOW ABOUT THE ORGANISATION & ITS STRUCTURE. NAUTE OF WORK FOR DIFFERENT
DEPARTMENTS
Met to each and every employee working in financial department of MTS, Patna.
2 KNOW DIFFERENT TYPES OF EXPENDITURES INCURRED IN THE ORGANISATION.
There are different types of expenditure such as network, marketing, sales & distribution, IT , billing and collection, personnel, administration and customer service delivery.
3 KNOW ABOUT THE WORKING OF FINANCIAL REPORTING & ANALYSIS.
Workings are mainly divided into 4 parts – payable, revenue, fixed assets and taxation.
4 KNOW ABOUT PROVISIONING Provisioning is mainly expected expenditure incurred during current months.
5 KNOW CASH FLOW MANAGEMENT Cash flow is mainly prepared after considering the financial activities, operating activities, investment, etc.
6 DID CASH FORCASTING AND MADE DAILY ACTUAL CASH FLOW
Cash forecasting is very essential. It tells about expected funds to credited in company’s account for the coming three days.
7 LEARN ABOUT THE CONCEPTS OF REVENUE Revenue comes from providing services to customers.
8 DID WORKING OF RECEIVABLES IN CITRIX (IRIS)
Converted unapplied receipts of distributors to applied to get their invoices in IRIS (software).
9 GO THROUGHOUT THE OVERVIEW OF PAYABLE & REVENUE
Prepared project report according to that.
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Analysis Methods:
Automation tools [linking] V-lookup function [ in excel ] Judgmental forecasting Average function [in excel] Pie charts Bar graphs Flow charts
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