FACULTY OF MANAGEMENT STUDIES INSTITUTE OF RURAL MANAGEMENTJAIPUR

SUBMITTED TO: SUBMITTED BY:PROF.TERJANI GOYAL NEHA SHARMA SECTION A PGDM-BM ROLL NO. 2853

IntroductionTelecom services have been acknowledged globally as an essential tool for the socio-economic development of a nation. India is currently the worlds second-largest telecommunications market and has registered exceptional growth in the past few years.The Indian mobile economy is growing rapidly and will contribute approximately US$ 400 billion to Indias gross domestic product (GDP), according to report prepared by GSMA in collaboration with BCG.The rapid strides in the telecom sector have been facilitated by liberal policies of the Government of India that provide easy market access for telecom equipment and a fair regulatory framework for offering telecom services at affordable prices. The deregulation of foreign direct investment (FDI) norms has made the sector one of the fastest growing and a top five employment opportunity generator in the country.

ABOUT VODAFONE :

Vodafone Group Plc (Vodafone) is a mobile communications company which provides services to mobile voice, messaging, data and fixed line. The Companys money transfer service, M-Pesa, enables people in emerging markets, to send and receive money through a mobile phone. The Company also has products such as international money transfer, savings and loans, salary disbursements and access to insurance products in different markets. Vodafone Red offers consumers and businesses a package with mobile data allowances, unlimited calls and texts, plus cloud and back-up services to secure personal data. Vodafone Cloud allows customers to store their personal digital content, such as contacts, photos and videos in the Vodafone network and to access it on the move from any connected device. Vodafone OneNet integrates landlines and mobiles providing a communication solution. Vodafone Secure Device Manager gives customer a way to manage many of their smart devices

Title of the study : An analysis of awareness and perception of customers towards mobile money with reference to Vodafones M-Pesa

INTRODUCTION TO M-PESA :

Vodafone India had partnered with ICICI and launched M-Pesa on 18th April 2013. Till June 2014 the m-pesa users in jaipur region is 10,000 approx out of the estimated population of 3.3 Million ( E-source -- www.livemint.com/Money/.../Product-crack-MPesa.html) Vodafone completed the national rollout of M-Pesa in India in June 2014 &its distribution of the mobile money service is limited by the countrys banking regulation. The operator, which partners local financial institution ICICI Bank on the rollout, launched M-Pesa in the state of Andhra Pradesh to reach national coverage M-Pesa is available through 60,000 agent outlets across India . M-Pesa service is available across authorized Vodafone agents and exclusive stores and can be accessed only by Vodafone subscribers but they dont have to be an ICICI bank account holder .

Objective of the study : To analyze the position of Vodafone on the subscriber bases among the college students To study the awareness and customers response towards mobile money & Vodafones M-Pesa. To Provide Promotional Strategies to the Company for the product.

SECTOR ANALYSIS Market SizeTelecommunications is one of the prime support services needed for rapid growth and modernisation of various sectors of the economy. Driven by strong adoption of data consumption on handheld devices, the total mobile services market revenue in India will reach US$ 29.8 billion in 2014 and is expected to touch US$ 37 billion in 2017, registering a compound annual growth rate (CAGR) of 5.2 per cent, according to research firm IDC.According to a study by GSMA, it has been expected that smartphones will account for two out of every three mobile connections globally by 2020 and India is all set to become the fourth largest smartphone market.India is projected to have 213 million mobile internet users by June 2015, a 23 per cent rise over a six month period, according to Mobile Internet in India 2014 report.The broadband services user-base in India is expected to grow to 250 million connections by 2017, according to the UK-based GSM Association (GSMA).India saw the fastest growth in new mobile-phone connections with 18 million net additions in the third quarter of 2014, followed by China with 12 million new additions, according to a report by Swedish mobile network equipment maker Ericsson.The Indian telecom sector is expected to create four million direct and indirect jobs over the next 5 years on the back of the governments efforts to increase penetration in rural areas along with the growth in the smartphone numbers and internet usage, according to estimates by Randstad India. The telecom sector has been growing aggressive at an average for 35 per cent a year for close to two decades, said Mr K Uppaluri, CEO, Randstad India.

Government Initiatives

The government has fast-tracked reforms in the telecom sector and plans to clear the proposal allowing spectrum trading and sharing ahead of the year-end deadline as it wants to lift the business sentiment for the forthcoming airwave auction. Some of the other major initiatives taken by the government are as follows: The Government of Uttar Pradesh (UP) has secured investment deals valued at Rs 5,000 crore (US$ 804.64 million) for setting up mobile manufacturing units in the state. The Government of India plans to roll out free high-speed wi-fi in 2,500 cities and towns across the country over the next three years and the programme, involving an investment of up to Rs 7,000 crore (US$ 1.12 billion), will be implemented by state-owned Bharat Sanchar Nigam Ltd (BSNL). Citizens of India are expected to get a minimum of 2 megabits per second (MBPS) Wi-Fi speed at every government owned service point such as railways stations, airports, bus stops, hospitals and all government departments that deal with the public on a daily basis. The Union Cabinet of India has approved the largest ever telecom spectrum auction that is targeted to fetch at least Rs 64,840 crore (US$ 10.43 billion). The government will sell 380.75 megahertz (MHz) of second generation (2G) spectrum in three bandsthe premium 900 MHz, 1800 MHz and 800 MHz. To speed up the national optical fibre network (NOFN) project, the Department of Telecommunications (DoT) has advised officials to use public buildings such as post offices, railway stations and schools.The Government of Kerala has decided to allow mobile telecom service providers to set up towers on government land and buildings. This is the first time that a State Government has opened its own land, buildings and offices to mobile companies

Market Structure in the Telecom IndustryTeledensity means number of telephones per hundred people. The current teledensity in India is 78.10. However, there is a large disparity between urban teledensity and rural teledensity. The urban teledensity stands at 169.37 whereas rural teledensity is 38.53 only. The reason for the slow growth in teledensity in the rural areas is that it is less attractive for the telecom service providers to invest. Furthermore, providing service in the remote and rural areas also requires massive investment.Teledensity in India (Rural, Urban and Cumulative) 2007 December, 2011

Source: Department of Telecommunication, Annual Report 2011-2012

Public and Private Share in the Market Annual Growth Rate in the Telecom Industry (1981 to December, 2011)

CAGR: Compounded Annual Growth RateSource: TRAI, Telecom Sector in India: A Decadal Profile

After the Government of India gave up its monopoly in the telecom sector in 1992 the growth of the telecom industry was slow due to lack of roust policy. However, with the change in the policy and licensing regime in the 1999, it is evident from the above graph that the telecom industry recorded a phenomenal growth. There was 35 per cent growth in the compounded annual growth rate.WirelessMarket share in the wireless subscription as on February, 2012The pie chart clearly shows that currently the private sector dominates the cellular market. However, this was not the case in the beginning. The changes in the market structure were due to the changes in telecom policy in 1999. The growth rate of number of wireless subscribers from 1996-2011 in the graph below, clearly depicts the growth in wireless subscribers after the change in policy in 1999. Currently, the three main players in the mobile services sector are Vodafone, Reliance and Bharti.

WirelineMarket share in the wireline subscription as on December, 2011In the basic telecom services or wireline services the incumbent Bharat Sanchar Nigam Limited (BSNL) has the majority share in the market. This is due to the expanse of the infrastructure available to the incumbent, and its ability to provide basic telecom services in the rural and remote areas. The private wireline service providers do not have the capital to invest in building such infrastructure and there is no profit in such capital investment as well. Therefore, the private players mainly concentrate in urban areas where they can earn more revenue.