Telecom Indusry Project

“Assessment Of Distribution Network For IDEA In Ahmedabad”

[ INSTITUTE OF BUSINESS MANAGEMENT & RESEARCH Ahmedabad]]

Neeraj Gupta

AProject Report

OnINDIAN TELECOM INDUSTRY WITH

REFRENCE TO IDEA

Submitted as partial fulfillment of the curriculum of Masters of Business

AdministrationTO

Institute of Business Management and ResearchAhmedabad

Developed ByNEERAJ GUPTA

Internal Guide VISHAL DAHIYA

2

COVER PAGE

INDIAN TELECOM INDUSTRY

WITH REFRENCE TO IDEA

By

NEERAJ GUPTAA project report submitted in partial fulfillment of the

requirements for the degree of Master of Business

Administration of Sikkim Manipal University,INDIA

Sikkim-Manipal university of Health, Medical and

technological sciences

Distance education wing

Syndicate house

Manipal- 576 104

3

DECLARATION

I here by declare that the project report entitled

Perception about “INDIAN TELECOM INDUSTRY WITH

REFRENCE TO IDEA”Submitted in partial fulfillment of

the requirements for the degree of Masters business

Administration to Sikkim-Manipal University , India, is

our original work and not submitted for the award of any

degree, diploma, fellowship,or any other similar title or

prizes.

Place : Ahmedabad NEERAJ GUPTA

Date : 31 -03- 2009 ( 520783248)

4

University study centre certificate

This is to certify that the project entitled

Perception about “INDIAN TELECOM INDUSTRY WITH

REFRENCE TO IDEA” Submitted in partial fulfillment of

the requirements for the degree of Masters of Business

Administration of Sikkim- Manipal University of Health,

Medical and technological sciences.

NEERAJ GUPTA

Has worked under my supervision and guidance and that no

part of their report has been submitted for the award of any

other degree, Diploma, Fellowship or other similar titles or

prizes and that the work has not been published in any

journal or magazine.

Certified

VISHAL DAHIYA

5

Examiner’s Certification

The project report of

INDIAN TELECOM INDUSTRY WITH

REFRENCE TO IDEA

By

NEERAJ GUPTA

Is approved and is acceptable in quality and form.

Internal Examiner

VISHAL DAHIYA

6

ACKNOWLEDGEMENT

First of all we would like to extend our sincere feelings towards this institute who has given us the opportunity to explore ourselves to impart our knowledge and skills in this report.

We are highly grateful to our project guide VISHAL DAHIYA for his kind approach, continuous guidance and support during the entire period to make this project a success.

Last but not least we would like to express our thanks those who are directly or indirectly responsible for making this project a great success .

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Index

Sr. No. Particulars Page No.

1 INTRODUCTION 4

2 INDUSTRY PROFILE

Over View

Indian telecom industry at a glance

Major players

5

3 COMPANY PROFILE

Products of Idea

Five force model

25

4 RESERCH DESIGN 43

5

6

Data Analysis & Interpretation

LIMITATIONS & SCOPE

46

86

7 Findings 87

8 Recommendation 88

9 Questionnaire 90

10 Bibliography 98

11 Glossary 99

8

INTRODUCTION

The topic of the project is the Assessment of distribution network for Idea in Ahmedabad.

In such project actually we try to analyze the strength of the idea cellular with other

competitors in the market.

The objective of this project was to assess market share, to analyze effectiveness of idea’s

representative, to study and analyze the reach of Idea’s distribution network vis-à-vis

other competitor.

For such the survey of 100 retailers had been made and with filling up of the

questionnaires, try to analyze the distribution effectiveness and the distribution reach and

its depth in the Ahmedabad.

With the use of different types of the charts and the statistical tool, we try to analyze the

facts of the Ahmedabad for all companies.

An assessment of the Distribution Network of idea’s services will help the company in

knowing the strength and weaknesses of the distribution network in Ahmedabad vis-à-vis

competitor. After the project, we are able to give suggestions to the company on the basis

of field survey and its result.

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INDUSTRY PROFILE

Telecommunications is the one of the fastest growing service industries of the word.

While the accent of growth on the value added services, such as email, cellular phones

etc in the developed countries, the thrust is on improving basic role in spurring growth,

especially industrial and services, in any economy.

The last two decades has witnessed a restructuring of the entire sector across the globs, in

terms of privatization and competition. Opening up of economies and privatization in the

developing countries has triggered an influx of foreign capital and technology into the

telecom sector.

HISTORY OF WIRELESS…

The cell phone is one of the

most significant

technological advances of

the 20 th century; however,

the neat little gadget is not

the first to communicate

without wire. Smoke signals

10

and tribal drums were used

to communicate over short

distances without wires.

Later, although there was a

form of mobile telephone

serviceavailable in the late 1940s, its capacity was limited to 12 simultaneous callers.

WORKING OF WIRELESS…

Cell phones use low- energy FM radio waves to transmit voice to the nearest antenna site

connected with the local phone network. The call goes through either a regular phone

line, or by radio signal to another cell phone, depending on the service. Wireless

technology uses individual radio frequencies over & over by dividing service areas into

different geographic zones called “cells”. Each has its own radio transmitter and receiver

antenna linked to Mobile Telephone Switching Offices (MTSOs).

As the caller moves from one place to the next, the call is handed off by the MTSO to the

next cell site, providing a consistent, high quality signal. When a subscriber travels of a

service area, “roaming” on the systems of other wireless carriers can still make calls.

These carriers take up the call signal and allow calls to be made or received within their

coverage area.

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DEFINING CELLULER SERVICES:

Cellular Service is a service, which enables two-way, mobile, wireless communication

via a portable handset. Area covered by the service provider is divided into cells, each

with a Radio Base Station (RBS) connected to a Central Switching Center (CSC) which

monitors the entire system. In the midst of a call, if a subscriber moves across cells, CSC

ensures handing over of the call between the adjacent RBS and the call is uninterrupted.

Cellular Technology: The technology that gives a person the power to communicate

anytime, anywhere – has spawned an entire industry in mobile growth, success and

efficiency of any business/ economy. The most prevalent wireless technology in the

world today, is GSM.

The GSM association (Global System for Mobile Communications) was instituted in

1987 to promote and expedite the adoption, development and deployment and evolution

of the GSM standard for digital wireless communication. The Association was formed as

a result of a European Community agreement on the need to adopt common standards

suitable for cross border European mobile communications.

Starting off primarily as a European Standard, the Group Special Mobile as it was then

called, soon came to represent Global System for mobile communications as it achieved

the status of a worldwide standard. The GSM membership has grown exponentially since

1992.

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13

Overview – The Indian Telecommunication Industry- Past,

Present & The Future…

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The journey so far…

1994 was a watershed year in the history of the Indian telecom sector, which ranked

sixth in the world after USA, China, Japan, Germany, and France in terms of number of

installed fixed lines.

The government of India introduced the New Telecom Policy (NPT) that year that

envisaged a vast change in Indian Telecom Scenario and reflected the Government’s

desire to bring the Indian telecom at par with the rest of the world. It was followed up by

the introduction of NTP 1999. The various policy changes also reflected the

Government’s realization that the huge funds needed to undertake gigantic and extensive

upgrade of telecom infrastructure in all the three segments of wire line, wireless and data

services, would require active participation of private sector.

As soon as the telecom industry opened to private sector investment beginning 1994, a

large number of Indian companies entered the segment with varying force, different

strategies, and assorted aspirations. There were ten key strategic dimensions along which

these new entrants positioned themselves in this sector.

How we stand today…

The Indian telecommunication network with 69 million telephone connections is the fifth

largest in the world and the second largest among the emerging economies of Asia.

Today, it is the fastest growing market in the world and represents unique opportunities

for UK companies in the stagnant global scenario. With tele-density approaching 6.9 per

hundred, the target to achieve 15 per hundred by 2010 looks well within reach. India's

total mobile subscriber base (both cellular and wireless in local loop-mobile) has reached

27 million. About 85% of the villages have village public telephones (VPTs)- 5,16,887

VPTs exist in India. The remaining 15% that includes 88,970 villages are yet to be

covered. Accordingly, India's 10th Five- year plan 2002-07 projects £25 billion worth of

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investments in 50 million fixed lines, 30 million cellular lines and 20 million Internet

connections.

The factors behind the wireless revolution in India are no different from those

prevailing globally and can be listed as follows:

1. Industry deregulation & liberalization has ushered in increased competition & led

to growth

The Indian telecom industry has come of ages in the field of regulations. It started with

the NTP in 1994. Between the years 1994 & 1998 TRAI was established as an

independent regulatory body, the wireless licenses were allotted to private operators and

the wire line services were opened up to competition.

Between 1999 & 2002 new telecom policy was introduced and there was entry of third &

fourth operators in the wireless services. Free competition was allowed in wire line and

first round of tariff rebalancing was done. The operators moved from fixed to revenue-

sharing license fee structure. Then in the year 2003-2004 the unified license regime was

introduced to enhance the competition and create a level playing field. Transfer of

wireless licenses was allowed among the operators and intra-circle wireless mergers were

also allowed.

2. Declining tariffs have made wireless & Handset prices extremely affordable

The intense competition has been instrumental in driving down the wireless tariffs. Entry

of 3rd and 4th GSM operators in each circle, and CDMA wireless operators, has created a

new floor for local & long distance tariffs. The average peak wireless call tariff per

minute has come down from Rs. 16.8 in 1998 to Rs. 6 in 1999 to Rs. 4 in 2002 and Rs.

1.5 at present. There has also been a crash in the handset prices by more than 70% over

the last 4-5 years, and the operators have coupled it with easy financing schemes and

bundling of handsets with connections. With the government reducing the custom duties

on the handsets, handset prices are expected to come down even further, leading to higher

new demand and replacement demand.

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3. Prepaid offerings have driven mass penetration of wireless

Prepaid offerings have created a surge in wireless subscribers, mirroring the trend in

other developing countries. The operators are aggressively promoting prepaid cards and

have spurred the adoption of wireless by the masses. From the budget-conscious lower

middle class households to college students to low income groups, people are

increasingly seeing prepaid as a hassle-free way of going wireless. The prepaid share has

increased from 26% in 1999 to 60% in 2002. However, in 2003 prepaid did not increase

its share of the total subscriber base, despite the addition of 17 million new subscribers

because all the 6 million new subscribers added by CDMA wireless were postpaid

subscribers. With the introduction of the CDMA prepaid in 2004 the prepaid share will

increase to over 75% in coming years.

4. Implementation of CPP regime has given the subscriber greater control over costs

The implementation of CPP regime was a water-shed event in the industry. It has greatly

increased the affordability of going wireless, as subscribers don’t have to pay for

incoming calls, and can control their telecom costs better. The other benefits of CPP are

lower costs for wireless subscribers, higher wireless usage, and higher penetration of

wireless.

Road to Future…

The unified licensing has ended the License Raj in telecom, resolved all litigations,

created a level playing field for all the operators and has paved the way for faster and

sustainable growth of the telecom sector. The wireless revolution will increase its pace

and the factors that have been responsible for its growth will carry it further. The wireless

data services will act as a revenue stream for the wireless operators. Some operators have

already deployed 3G technologies on their networks. With further rollout of wireless

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broadband, backed by the provision of compelling content services, broadband revenues

will comprise a key portion of the total telecom pie in the future

The future market will be characterized by high penetration, competition and churn and

the winners will be distinguished by how they address these challenges. They’ll have to

juggle between achieving economies of scale, efficient network management, increasing

operating margins & attracting and maintaining subscriber base.

The future value will reside in ownership of customer relationship and provision of

diversified services. This implies a trend towards bundled service offerings. For provision

of bundled services, operators will need to have strategic alliances with intermediaries

through whom traditional commercial transactions can be executed. Operators with the

best interface strategies will succeed in maintaining the customer loyalty.

The operators need to rapidly grow their subscriber base while simultaneously

maintaining customer loyalty. The ability to segment customers, identify the best among

them and maximize their value will determine success.

Subscriber numbers are expected to more than double in the period 2001-2006, from 35

million in March 2001 to about 85 million in 2006. India will mirror the global trend of

high growth rates in mobile vis-à-vis fixed-line users (40 per cent CAGR in mobile

services against 16 per cent in the fixed-line segment). However, with fixed-line

teledensity in India being at a very low 4 per cent, absolute growth in fixed-line services

will lead additions in mobile subscribers over the next 10 years. Despite the high

projected growth, teledensity in 2010 is expected to be 11.5 per cent, falling short of the

NTP99 target of 15 per cent. Revenues will also grow, albeit slowly, in the light of

significant reductions in tariffs. By 2008, telecom is expected to be a Rs 76,000-crore

sector, contributing 5.4 per cent to India’s GDP.

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Teledensity 12.90%

Basic phone lines 65 million

Telephone exchanges 38,000

Cellular subscribers 129.4 million

Basic telecom subscribers incl. WLL 16.9 million

PCO (Public call Office) 2255980

Paging subscribers 0.6 million

Optical fiber cable (OFC) route length 579500 Kms

Television sets 100 million

PCs 9 million

Cable TV Connections 45 million

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Indian Telecom Industry at a glance

At 110.01 million connections ‘Indian Telecom Industry’ is the Third largest and

fastest growing in the world. The subscriber base has grown by 40% in 2005 and is

expected to reach 250 million in 2008.

Over the last 3 years, two out of every three new telephone connections were wireless.

Consequently, wireless now accounts for 54.6% of the total telephone subscriber base, as

compared to only 40% in 2003.

Wireless subscriber growth is expected to grow at 2.5 million new subscribers every

month in 2007. The wireless subscriber base skyrocketed from 33.69 million in 2004 to

62.57 million in FY 2004 -2005.

The wireless technologies currently in use ‘Indian Telecom Industry‘ are Global

System for Mobile Communications (GSM) and Code Division Multiple Access

(CDMA).

There are primarily 9 GSM and 5 CDMA operators providing mobile services in 19

telecommunication circles and 4 metro cities, covering more than 2000 towns across the

country. And the numbers are still growing for ‘Indian Telecom Industry‘. ‘Telecom

Industry in India ‘is regulated by ‘Telecom Regulatory Authority of India’ (TRAI). It

has earned good reputation for transparency and competence. Three types of players

exists in ‘ Telecom Industry India ‘ community - State owned companies like - BSNL

and MTNL.

Private Indian owned companies like - Reliance Infocomm and Tata Teleservices.Foreign

invested companies like – Hutchison-Essar, Bharti Tele-Ventures, Escotel, Idea Cellular,

BPL Mobile, Spice Communications etc.

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The ‘ Indian Telecom Industry ‘ services are not confined to basic telephone but it also

extends to internet, broadband (both wireless and fixed), cable TV, SMS, IPTV, soft

switches etc. The bottlenecks for ‘ Indian Telecom Industry ‘ are:

Slow reform process:

Low penetration. Service providers bear’s huge initial cost to make inroads and

achieving break-even is difficult.

Huge initial investments.

Limited spectrum availability and interconnection charges between the private

and state operators.

The Government Broadband Policy 2004 aims at 9 million broadband connections

and 18 million internet connections in 2007. ‘Indian Telecom Industry ‘is currently

expected to contribute nearly 1% to India’s GDP which is heartening and estimated to

grow further and brighten the ‘Scenario of Indian Telecom Industry ‘.

GSM and CDMA subscription numbers:

YearGSM Subscribers

(millions)

GSM Annual

growth

CDMA Subscribers

(millions)

CDMA

Annual

growth

2000 3.1 94% - -

2001 5.05 76% - -

2002 10.5 91% 0.8 -

2003 22.0 110% 6.4 700%

2004 37.4 70% 10.9 70%

2005 58.5 57% 19.1 75%

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2006 105.4 80% 44.2 131%

2007 129.0 71% 85.0 92%

The telecom network in India is the third largest network in the world meeting up

with global standards. Presently, the Indian telecom industry is currently slated to an

estimated contribution of nearly 1% to India’s GDP.

Some figures:

The Indian Telecommunications network with 129.01 million connections is the

third Largest in the world and the second largest among the emerging economies of Asia.

Today, it is the fastest growing market in the world and represents unique

opportunities for U.S. companies in the stagnant global scenario.

The total subscriber base, which has grown by 40% in 2005, is expected to reach

250 million in 2007.

According to Broadband Policy 2004, Government of India aims at 9 million

broadband connections and 18 million internet connections by 2007.

The wireless subscriber base has jumped from 33.69 million in 2004 to 62.57

million in FY2004-2005.

In the last 3 years, two out of every three new telephone subscribers were wireless

subscribers. Consequently, wireless now accounts for 54.6% of the total telephone

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subscriber base, as compared to only 40% in 2003. Wireless subscriber growth is

expected to bypass 2.5 million new subscribers per month by 2007.

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The Wireless technologies currently in use are Global System for Mobile

Communications (GSM) and Code Division Multiple Access (CDMA). There are

primarily 9 GSM and 5 CDMA operators providing mobile services in 19 telecom circles

and 4 metro cities, covering 2000 towns across the country.

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Major Players

There are three types of players in telecom services:

State owned companies (BSNL and MTNL)

Private Indian owned companies (Reliance Infocomm, Tata Teleservices,)

Foreign invested companies (Hutchison-Essar, Bharti Tele-Ventures,

Escotel, Idea Cellular, BPL Mobile, Spice Communications)

BSNL

On October 1, 2000 the Department of Telecom Operations, Government of India

became a corporation and was renamed Bharat Sanchar Nigam Limited (BSNL).

BSNL is now India’s leading Telecommunications Company and the largest public

sector undertaking. It has a network of over 45 million lines covering 5000 towns

with over 35 million telephone connections.

The state-controlled BSNL operates basic, cellular (GSM and CDMA) mobile, Internet

and long distance services throughout India (except Delhi and Mumbai). BSNL will be

expanding the network in line with the Tenth Five-Year Plan (1992-97). The aim is to

provide a telephone density of 9.9 per hundred by March 2007. BSNL, which became the

third operator of GSM mobile services in most circles, is now planning to overtake Bharti

to become the largest GSM operator in the country. BSNL is also the largest operator in

the Internet market, with a share of 21 per cent of the entire subscriber base.

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BHARTI

Established in 1985, Bharti has been a pioneering force in the telecom sector with many

firsts and innovations to its credit, ranging from being the first mobile service in Delhi,

first private basic telephone service provider in the country, first Indian company to

ovide comprehensive telecom services outside India in Seychelles and first private sector

service provider to launch National Long Distance Services in India. Bharti Tele-

Ventures Limited was incorporated on July 7, 1995 for promoting investments in

telecommunications services. Its subsidiaries operate telecom services across India.

Bharti’s operations are broadly handled by two companies: the Mobility group, which

handles the mobile services in 16 circles out of a total 23 circles across the country; and

the Infotel group, which handles the NLD, ILD, fixed line, broadband, data, and satellite-

based services. Together they have so far deployed around 23,000 km of optical fiber

cables across the country, coupled with approximately 1,500 nodes, and presence in

around 200 locations. The group has a total customer base of 6.45 million, of which 5.86

million are mobile and 588,000 fixed line customers, as of January 31, 2004. In mobile,

Bharti’s footprint extends across 15 circles.

Bharti Tele-Ventures' strategic objective is “to capitalize on the growth opportunities the

company believes are available in the Indian telecommunications market and consolidate

its position to be the leading integrated telecommunications services provider in key

markets in India, with a focus on providing mobile services”.

MTNL

MTNL was set up on 1st April 1986 by the Government of India to upgrade the quality of

telecom services, expand the telecom network, introduce new services and to raise

revenue for telecom development needs of India’s key metros – Delhi, the political

capital, and Mumbai, the business capital. In the past 17 years, the company has taken

rapid strides to emerge as India’s leading and one of Asia’s largest telecom operating

companies. The company has also been in the forefront of technology induction by

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converting 100% of its telephone exchange network into the state-of-the-art digital mode.

The Govt. of India currently holds 56.25% stake in the company. In the year 2003-04, the

company's focus would be not only consolidating the gains but also to focus on new areas

of enterprise such as joint ventures for projects outside India, entering into national long

distance operation, widening the cellular and CDMA-based WLL customer base, setting

up internet and allied services on an all India basis.

MTNL has over 5 million subscribers and 329,374 mobile subscribers. While the market

for fixed wireline phones is stagnating, MTNL faces intense competition from the private

players—Bharti, Hutchison and Idea Cellular, Reliance Infocomm—in mobile services.

MTNL recorded sales of Rs. 60.2 billion ($1.38 billion) in the year 2002-03, a decline of

5.8 per cent over the previous year’s annual turnover of Rs. 63.92 billion.

RELIANCE INFOCOMM

Reliance is a $16 billion integrated oil exploration to refinery to power and textiles

conglomerate (Source: http://www.ril.com/newsitem2.html). It is also an integrated

telecom service provider with licenses for mobile, fixed, domestic long distance and

international services. Reliance Infocomm offers a complete range of telecom services,

covering mobile and fixed line telephony including broadband, national and international

long distance services, data services and a wide range of value added services and

applications. Reliance IndiaMobile, the first of Infocomm's initiatives was launched on

December 28, 2002. This marked the beginning of Reliance's vision of ushering in a

digital revolution in India by becoming a major catalyst in improving quality of life and

changing the face of India. Reliance Infocomm plans to extend its efforts beyond the

traditional value chain to develop and deploy telecom solutions for India's farmers,

businesses, hospitals, government and public sector organizations.

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Until recently, Reliance was permitted to provide only “limited mobility” services

through its basic services license. However, it has now acquired a unified access license

for 18 circles that permits it to provide the full range of mobile services. It has rolled out

its CDMA mobile network and enrolled more than 6 million subscribers in one year to

become the country’s largest mobile operator. It now wants to increase its market share

and has recently launched pre-paid services. Having captured the voice market, it intends

to attack the broadband market.

TATA TELESERVICES

Tata Teleservices is a part of the $12 billion Tata Group, which has 93 companies, over

200,000 employees and more than 2.3 million shareholders. Tata Teleservices provides

basic (fixed line services), using CDMA technology in six circles: Maharashtra

(including Mumbai), New Delhi, Andhra Pradesh, Tamil Nadu, Gujarat, and Karnataka.

It has over 800,000 subscribers. It has now migrated to unified access licenses, by paying

a Rs. 5.45 billion ($120 million) fee, which enables it to provide fully mobile services as

well.

The company is also expanding its footprint, and has paid Rs. 4.17 billion ($90 million)

to DoT for 11 new licenses under the IUC (interconnect usage charges) regime. The new

licenses, coupled with the six circles in which it already operates, virtually gives the

CDMA mobile operator a national footprint that is almost on par with BSNL and

Reliance Infocomm. The company hopes to start off services in these 11 new circles by

August 2004. These circles include Bihar, Haryana, Himachal Pradesh, Kerala, Kolkata,

Orissa, Punjab, Rajasthan, Uttar Pradesh (East) & West and West Bengal.

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VSNL

On April 1, 1986, the Videsh Sanchar Nigam Limited (VSNL) - a wholly Government

owned corporation - was born as successor to OCS. The company operates a network of

earth stations, switches, submarine cable systems, and value added service nodes to

provide a range of basic and value added services and has a dedicated work force of

about 2000 employees. VSNL's main gateway centers are located at Mumbai, New Delhi,

Kolkata and Chennai. The international telecommunication circuits are derived via

Intelsat and Inmarsat satellites and wide band submarine cable systems e.g. FLAG, SEA-

ME-WE-2 and SEA-ME-WE-3.

The company's ADRs are listed on the New York Stock Exchange and its shares are

listed on major Stock Exchanges in India. The Indian Government owns approximately

26 per cent equity, M/s Panatone Finvest Limited as investing vehicle of Tata Group

owns 45 per cent equity and the overseas holding (inclusive of FIIs, ADRs, Foreign

Banks) is approximately 13 per cent and the rest is owned by Indian institutions and the

public. The company provides international and Internet services as well as a host of

value-added services. Its revenues have declined from Rs. 70.89 billion ($1.62 billion) in

2001-02 to Rs. 48.12 billion ($1.1 billion) in 2002-03, with voice revenues being the

mainstay. To reverse the falling revenue trend, VSNL has also started offering domestic

long distance services and is launching broadband services. For this, the company is

investing in Tata Telservices and is likely to acquire Tata Broadband.

Vodafone

Vodafone’s presence in India dates back to late 1992, when they worked with local

partners to establish a company licensed to provide mobile telecommunications services

in Mumbai. Commercial operations began in November 1995. Between 2000 and March

2004, Hutch acquired further operator equity interests or operating licences. With the

29

completion of the acquisition of BPL Mobile Cellular Limited in January 2006, it now

provides mobile services in 16 of the 23 defined licence areas across the country.

Vodafone India has benefited from rapid and profitable growth in recent years. it had

over 17.5 million customers by the end of June 2006.

IDEA

Indian regional operator IDEA Cellular Ltd. has a new ownership structure and grand

designs to become a national player, but in doing so is likely to become a thorn in the

side of Reliance Communications Ltd. IDEA operates in eight telecom “circles,” or

regions, in Western India, and has received additional GSM licenses to expand its

network into three circles in Eastern India -- the first phase of a major expansion plan that

it intends to fund through an IPO, according to parent company Aditya Birla Group .

30

TELEPHONE NETWORKS STATUS AS OF

DECEMBER 2007

The Indian telecom boom is for real. While various issues between operators and the

government and between fixed and mobile operators did result in avoidable chaos and

uncertainty, the sector continued to grow. The Indian economy is expected to add millions

of consumers of a younger age profile, more inclined to use telecom services. The fact

that India has one of the lowest telecom penetration rates among major nations also offers

an unprecedented opportunity for telecom service operators, infrastructure vendors,

manufacturers and associated services companies.

31

COMPANY PROFILE

IDEA CELLULAR LIMITED

“The proud offspring of three illustrious parent (A.V Birla Group, TATA cellular and AT

& T Wireless), Idea Cellular will be driven by the objective of creating a different in the

lives of our customers. Idea Cellular aspires to offer the most comprehensive and

innovative services, to assist people to go beyond what they thought possible. As the

cellular revolution transforms India in the coming decade, Idea Cellular will be a

harbinger of change.”

- Sanjeev Aga

(President and CEO Idea Cellular Limited)

32

ABOUT THE COMPANY…

LAUNCH OF SERVICE:

The cellular service was launched in the Gujarat circle in January 1997 and in the

Maharastra circle (excluding Mumbai, including Goa) in March 1997.

THE INITIAL PROMOTERS:

It was at the time of its launch set up as a joint venture of Aditya Birla Group and the

leader in Wireless Technology-AT&T.

Established in 1947, the Aditya Birla Group is on of the leading business house in India.

The Group has its presence across various sectors including cement, Viscose Staple fiber,

engineering, textiles, power, telecommunication, industrial chemicals, petroleum and

financial services. The business is spread across 15 countries with over 100

manufacturing units in India and overseas including Thailand, Indonesia, Malaysia,

Philippines, Egypt and Canada. Trading operations span across Singapore, Dubai, UK,

USA, South Africa, Tanzania, Burma and Russia. All the group’s units are accredited

with the ISO 9002 certification and nine on them ISO 14001 certified.

AT&T is the largest telecommunication company in the world offering a complete range

of communication services. AT&T started its operations in 1885 and is present in over

200 countries. In the United States – its parent country, AT&T Corp. is a leading –

distance carrier, wireless operator and provider of video data and Internet services. In the

recent past, AT&T Corp. acquired Media One, one of the largest cable companies in

USA, while Media one had acquired US West, a US based telecom operator.

In India, US West is the joint venture partner of BPL for providing cellular services in the

circles of Maharastra, Kerala and Tamilnadu. As a result of this consolidation, AT&T has

33

direct interest in cellular services in Maharastra through Birla AT&T Communications

Limited and an indirect Internet through Media one in BPL Cellular Limited.

TECHNOLOGY PARTNERS:

Idea welcomes all businesses and individuals interested in partnering with it to enhance

and strengthen the idea’s products and services portfolios.

Some of the idea’s technology and content partners:

Nokia, Ericsson, schlumberger sema, NDTV, indiatimes, rediff, C2W.

IDENTITY:

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

(through Birla AT&T Communications – Maharastra & Gujarat circle) and the Tata

Group (through Tata Cellular - Andhra Pradesh circle) set up cellular networks. Both the

above company was amongst the first company to commercially start operation in circles

other than metros and achieve financial closure in Indian Telecom industry.

In the year 2000, the historic path-breaking merger of Tata Cellular with Birla AT&T

Communications and the subsequent acquisition of RPG Cellular - (Madhya Pradesh

circle) in the year 2001 - helped take the company to aim even further and led to the

formation of Birla Tata AT&T Limited.

In year 2001, company won fourth cellular license for Delhi metro circle and in year

2002 company introduced common brand “!DEA” and changed the name to IDEA

Cellular Limited

Since then, there has been no looking back for IDEA Cellular. The company launches

Delhi operations in year 2002 and added a record 100,000 subscriber within one month of

launch.

34

In 2003, the company achieved the largest financial closure in Indian Telecom for its

entire circle. In 2004, the company entered into definitive agreement to acquire Escotel

Mobile Communications (existing operator in Haryana, Kerla and UP (W)) and Escorts

Telecommunications (cellular licensee holder for UP (E), Himachal Pradesh and

Rajasthan)

CORE BELIEF:

"Attracting and nurturing talent has become the single most dominant force in

business."

Idea - the very name suggests innovation. Innovation, which comes from intelligence,

talent, skills, involvement, hard work and continuous learning.

The company continuously harnesses the power of wireless revolution to provide world-

class products and services. It aims at responding to customer needs proactively by

anticipating requirements and providing ready solutions.

Idea Cellular draws inspiration from the loyalty of its subscribers to keep raising the bar,

to shape the future, and to change and enrich the life of each and every member of its

ever-growing family of subscribers.

THE MEDIA:

“Stay Connected” is a brand promise that looks at the key purpose of the mobile

telephony. It converges with the tangible requirement of ‘network depth’ and at the same

time, reflects the eternal human need for bonding, kinsman ship and relationship forming.

This new brand campaign enables Idea to own the biggest category benefit of “keeping

people connected”, through a simple, unique and a likable expression of connectivity.

And it makes consumers aware that “no one connects better than Idea.”

35

Slated to run through 2004, the campaign utilizes all relevant mainline media to

propagate the message to its audiences with 60-seconds commercial and its various edits,

print campaign and its outdoor publicity. Apart from it various innovative media/events

has been used to further strengthen the message.

For example- at local level Idea has exploited the Indo-Pak series by screening the one-

day matches in popular places under the theme of stay connected.

THE PRODUCTS:

The Post-paid Card:

The regular card as it is more popularly known as. The AT&T postpaid card has been

rechristened as the Idea Postpaid card.

The Pre-paid Card:

The Idea Cellular Pre-paid card is called as “IDEA CHITCHAT”

.

36

“IDEA CHITCHAT”

IDEA Chitchat is a ready to talk cellular services. It runs on the state-of-the-art Intelligent

Network, comes with world class features like all handset compatibility, therefore

helping you to control your expenses too. It lets you make and receive local, national and

international calls instantly.

MISSION STATEMENT:

“Through continuous innovation Idea promises to liberate customers from the

shackles of time and space”.

(Innovate, Stimulate, Liberate….)

37

Products of Idea

Idea Postpaid Entry Pricing (W.E.F. 6th Nov 07) All the Bill Plans

Activation Novo ! 99 Easy 499 Edge 299 Edge 199 Easy 599 MY Club

Prepaid to

Postpaid

200

Activation

Cost

200

Activation

Cost

200

Activation

Cost

200

Activation

Cost

200

Activation

Cost

200

Activation

Cost

100 Plan

Enrolment

Fees

100 Plan

Enrolment

Fees

100 Plan

Enrolment

Fees

100 Plan

Enrolment

Fees

100 Plan

Enrolment

Fees

100 Plan

Enrolment

Fees

Total:300 Total:300 Total:300 Total:300 Total:300 Total:300

Add-on

Connection

200

Activation

Cost

200

Activation

Cost

200

Activation

Cost

200

Activation

Cost

200

Activation

Cost

200

Activation

Cost

Nil Plan

Enrolment

Fees

Nil Plan

Enrolment

Fees

Nil Plan

Enrolment

Fees

Nil Plan

Enrolment

Fees

Nil Plan

Enrolment

Fees

Nil Plan

Enrolment

Fees

Total:200 Total:200 Total:200 Total:200 Total:200 Total:200

Benefits

Benefit

s

Local

100min

M2M

Free

Credit on

Usage of

Rs.499 on

Local and

STD Call

Usage

299

Minutes

Idea to

Idea

Free

199

Minutes

Idea to

Idea

Free

Credit on

Usage of

Rs.599 on

Local and

STD

Usage

0.10 to My

Club/My

Gan Series

Numbers,

38

Idea Prepaid Regular Plan

Entry Level Cost

- Total - Rs. 99/-

- MRP of Starter Pack - Rs. 99/-

- Validity Period - 0 Days.

- TalkTime - Rs. 0/-.

Any Processing Charges

Recharge Vouchers (RV) valuing -

[Inclusive of SIM + Processing fee +

12.36% Service Tax in INR]

Monthly free call allowances NIL

Duration of plan Open till further notice

Information Just an SMS away

This interactive SMS based Self-service

application enables the prepaid

subscriber to know their product related

information , recharge voucher related

information , what is hottest or latest

promo and what is my account

information specific to subscriber related

information, send sms "CARE" to 4444.

*SMS to 4444 toll free from Home

network.

Any taxes, in addition to the above NIL

Local Charges (Rs.)

Fixed WLL Cellular

Local Idea to idea Nil Nil Re 1/-

Local GSM, Landline and WLLRe 1/- per

minute

Re 1/- per

minute

Re 1/- per

minute

STD

39

Anywhere in India 2.75 2.75 2.75

STD Pack @ Rs. 40/- Per

Month1.50 1.50 1.50

ISD Rates

US, Canada, Europe, (Fixed),

Singapore & Hong Kong6.40 6.40 6.40

Other countries 9.19 9.19 9.19

Cuba, Sao Tome & Principe,

Guinea Bissau, Diego Garcia,

Nauru,Solomon Islands,

Vanuatu, Cook Islands,

Tuvalu, Tokelau, Norfolk

Island, Sakhalin

49.20 49.20 49.20

40

Additional value added services:

Night Talk Rs. 30/-

Outgoing (11pm to 8am)

Local Idea to Idea 0.09/ min Other Local

Mobiles 0.50 and LL Rs. 1/-

To Activate Send sms : "Night" to 4444.

To Deactivation Send sms 'NONIGHT" to

4444.

Cell to Cell ( Local Mobiles) Rs. 30/-

Outgoing

Rs 1 Per Minute to Local Mobiles

To Activate Send sms : "CC" to 4444.

To Deactivation Send sms 'NOCC" to

4444.

STD Pack @ Rs. 40/- Rs. 1.50/- For all STD calls.

To Activate Send sms : "STD" to 4444.

To Deactivation Send sms 'NOSTD" to

4444.

I2I Pack Rental - Rs. 25/- 0.30 Paise for Local Idea to Idea Calling.

To Activate Send sms : "I2I" to 4444.

To Deactivation Send sms 'NOI2I" to

4444.

Recharge Vouchers (RV) valuing -

41

[Inclusive of SIM + Processing fee + 12.36% service tax in INR+]

MRP Range

Rs

Service Tax Rs. Pro

Fee Rs

Talktime Range

Rs

Validity

Days

Remarks

From To From To From To

10 10 1.10 1.10 2 6.90 6.90 0

34 34 3.74 3.74 30.26 0 0 0

SMS Voucher:

Free 150 local

SMS to be

consumed within

30 days

50 50 5.50 5.50 5 39.50 39.50 0

55 55 6.05 6.05 48.95 0 0 0

Value Voucher

with Tariff

Benefit-Local

I2I@30p,

M2M@50p &

LL@Re1. Tariff

valid for 30 days

70 70 7.70 7.70 2.30 60 60 0

75 75 8.25 8.25 66.75 0 0 0

Value Voucher

with Tariff

Benefit-STD

[email protected]. Tariff

valid for 30 days

88 88 9.68 9.68 78.32 0 0 0 SMS Voucher:

Free 1000 local

42

SMS to be

consumed within

30 days

100 100 11.00 11.00 10 79 79 0

120 120 13.20 13.20 106.80 0 0 0

Value Voucher

with Tariff

Benefit-Local Calls

@ Re.1/min. Tariff

valid for 365 days

199 199 21.89 21.89 127 50 50 60

220 220 24.20 24.20 110 85.80 85.80 15

350 350 38.50 38.50 125 186.50 186.50 30

550 550 60.50 60.50 125 364.50 364.50 30

1100 1100121.0

0

121.0

0150 829.00 829.00 75

2200 2200242.0

1

242.0

1150

1807.9

9

1807.9

9180

3300 3300363.0

1

363.0

10

2936.9

9

2936.9

9365

43

Michael Porter’s “Five Forces” Model

He has identified five forces that determine the state of competitiveness in a market. The

forces also influence the profitability of firms already in the industry. These five forces

are summarized in the above diagram. (The fifth force is the degree of rivalry that

currently exists among firms already in the industry.) Here are a few additional details

about Porter’s model.

44

1. Barriers to Entry

Economies of scale mean larger firms can produce at lower cost per unit. This tends to

lower the number of firms in the industry and reduce competition.

Proprietary product differences are the characteristics that make a product appeal to a

large market segment. But only those characteristics that cannot be copied at low cost by

competitors (“proprietary”) will be a barrier to entry.

Brand identity is the extent to which buyers take the brand name into account when

making purchase decisions.

Capital requirements are the total cost of acquiring the plant and equipment necessary

to begin operating in the industry.

45

2. Bargaining Power of Suppliers

Differentiation of inputs means that different suppliers provide different input

characteristics for inputs that basically do the same job. The greater the degrees of

differentiation among suppliers the more bargaining power suppliers have.

Presence [and availability] of substitute inputs means the extent to which it is possible

to switch to another supplier for an input (or a close substitute). The greater the number

and closeness of substitute inputs the lower the bargaining power of suppliers.

Supplier concentration is the degree of competition among suppliers. Usually the more

concentrated the industry, the fewer suppliers and the more control suppliers have over

the prices they charge. Greater supplier concentration often means greater supplier

bargaining power.

Cost relative to total purchases in the industry refers to the amount your firm spends

on inputs from a particular supplier compared to the total revenue of all firms in the

supplier’s industry. Lower expenditure usually implies more bargaining power for the

supplier. The buyer’s bargaining power falls as spending with a particular firm falls

simply because the buyer’s business isn’t as important to the supplier.

46

3. Threat of Substitutes

Relative price performance of substitutes is the price of substitutes for your output

compared to the price you are charging. If the price of substitutes is lower, the

competitive threat increases as the price differential increases.

Switching costs refers to the cost to the buyer of switching from one seller to another.

The greater the switching costs the lower the threat of substitutes because buyers have a

stronger incentive to stick with a single supplier.

Buyer propensity to substitute is the extent to which buyers are willing to consider

other suppliers.

47

4. Bargaining Power of Buyers

Buyer concentration versus firm concentration refers to the extent of concentration in

the buyer’s industry compared to the extent of concentration in your industry. The more

concentrated the buyer’s industry relative to your industry the greater the bargaining

power of buyers.

Buyer volume is the number of units of your product the buyer purchases from all

sources. The greater buyer volume compared to the quantity purchased from you, the

greater the bargaining power of buyers.

Buyer information is the state of information buyers have about your industry. The more

information buyers have about your industry the more bargaining power buyers have.

Substitute products means the number and closeness of substitutes available for your

product. The greater the number of available substitutes the more bargaining power

buyers have.

Price of your product relative to total expenditures on all products. This is the

fraction of total expenditure buyers spend on your products. The greater the fraction of

total expenditure the greater the price elasticity of demand and the more bargaining

power buyers have.

Product differences refers to the degree of differentiation between your product and

other products in the market. The greater the differentiation of your product, the lower its

price elasticity of demand and the less bargaining power buyers have.

Brand identity is the extent to which your brand name is recognized and sought out by

buyers. The stronger your brand identity the less bargaining power buyers have.

48

5. Rivalry Determinants [with other firms in the industry]

Industry growth is the speed at which the market is growing. Rapidly growing markets

provide less incentive for firms to aggressively compete with each other.

Intermittent overcapacity is the amount demand fluctuates during a year (or over a

business cycle) and the impact lower demand has on how efficiently the firm is able to

use its plant and equipment. In some industries a decrease in demand leads to significant

idle productive capacity, while other industries are not as susceptible to this factor. More

intense rivalry is likely to be fostered in an industry in which firms face either large

amounts of unused plant capacity or face frequent idle capacity.

Concentration and balance is the number of firms in the industry and their relative size.

An industry in which a few firms supply most of the output is likely to not be very

competitive because the large firms will control the market.

49

RESEARCH DESIGN

“Assessment of Distribution Network of Idea in Ahmedabad”

Objectives of Project:

To assess market share of the Idea vis-à-vis other competitor.

To analyze effectiveness of idea’s representative vis-à-vis other competitor.

To study and analyze the reach of Idea’s distribution network vis-à-vis other

competitor.

To assess the distribution depth of Idea vis-à-vis other competitor.

Research Methodology:

Type of the study

The type of study we will use would be Descriptive study.

Sampling design

Universe of Research:

The research would be conducted in Ahmedabad. So the universe for the study

would be Ahmedabad.

50

Size of the sample:

The sample would include the following:

Pre paid Dealers 100

Sampling procedure:

The sampling procedure would be stratified random sampling.

Data sources :

The data to be used for the study would be both secondary and primary

data.

The secondary data would be necessary to study the distribution Network.

It would be obtained from Database of the company, web sites etc.

The primary data would be obtained through survey of pre-paid dealers of

idea cellular, which would be conducted through personal interview & filling-up of the

questionnaires.

Research instrument:

The research instrument would be an interview schedule with filling up the

questionnaires. It would be consist of 10 questions to keep it short.

Pilot Testing:

We are conducted a pilot test of about 12 pre-paid retailers of idea cellular and

according to the need the questionnaire is revised as per the response received.

51

The changes as per under:

The FOD segment is later on included

The value of recharge voucher is made more segregated.

Time period of visit of distribution is also made more segregated.

52

DATA ANALYSIS & INTERPRETATION

STATISTICAL METHOD USED FOR TESTING:

Area wise division

For the simplicity of the analysis, we have divided the whole Ahmedabad in to main four

areas. The total area of the Ahmedabad is 42, and those are base on the different pin

codes of Ahmedabad.

Area-1 (South-west region) (144 retailers)

o Ellisbridge

o Jivaraj park

o Juhapura

o Paldi

o Polytechnic

o Amraiwadi

o Behrampura

o Isanpur

o Maninagar

o Narol

o Shah-alam

o Vatva

Area-2 (North-west region) (120 retailers)

o Ranip

o Gandhi Ashram

o Sabarmati

o Thal-tej

53

o Bodakdev

o Naran pura

o Navjivan

o Navarangpura

o Memnagar

o Ghatlodia

Area-3 (North-east region) (116 retailers)

o Airport

o Cantonment

o Civil

o Girdharnagar

o Krishnanagar

o Kubernagar

o Naroda

o Saijpur-bogha

o Sardarnagar

Area-4 (Middle east region) (120 retailers)

o Bapunagar

o Khodiarnagar

o Odhav

o Kalupur

o Gomtipur

o Rakhial

o Saraspur

o Thakkar bapa nagar

o Kathwada

o Jantanagar

54

1. Availability of the cards with FOD:

Total Ahmedabad: The total no. of the retails is 100.

Availbility of cards and FOD

0

20

40

60

80

100

120

company

reta

iler

s

Cards

FOD

Airtel Bsnl Vodafone Idea Reliance Tata

Cards 96 40 98 96 64 34

FOD 0 0 0 0 0 0

55

Conclusion:

From the above chart, we can conclude that the availability of the idea and hutch is

almost same and highest among all the competitors. In case of the FOD, FOD is not sell

by the retailer. Through there are few sellers of FOD but we can not find a single one.

Suggestion:

From the above results we suggest to the company that they have to meet to the retailer

and convince them to sell the FOD cards. Because there is an opportunity to garb the

more market share.

56

2. Age of the retailer (Total experience):

Total Ahmedabad: The total no. of the retails are 100.

Age

41%

51%

7%

1%

0% Less then 1 year

1 to 3 years

3 to 6 years

6 to 9 years

More than 9 years

Conclusion:

Less then 1 year 1 to 3 years 3 to 6 years 6 to 9 years

More than 9

years

Age 41 51 7 1 0

57

In general, from the above graphical representation, we can conclude that, the most of the

retails belonging the range of the 1 to 3 years of the experience. It shows that the overall

distribution reach and the mobile users in the city of Ahmedabad were increased in last 3

years.

Suggestion:

We find that the most of the retailer belonging the range of 1 to 3 years of experience.

But company should approach to more experienced shopkeeper because they are the

known retailer of the particular area. And also they are at there from many years so there

are highly chances to sell more cards.

3. Target audience

58



Students 29 2 12 22 11 0

Students

0

510

15

20

2530

35

Company

Students

Conclusion:

59

From the above presentation, we can conclude that, in Ahmedabad the usage of the

maximum cards by students are of the Airtel. The idea is on the second position in usage

by students.

Suggestion:

Students are the maximum user of this service. But in today’s scenario there are increases

in working women so company can directly approach to locality service women group.

Yet not single companies do this so we have great opportunity to sell more cards of our

company.

4 Trade Scheme

60



Trade Scheme 96 38 99 98 64 33

Total 97 40 99 99 64 33

Trade scheme

0

20

40

60

80

100

120

Company

Ret

aile

r

Trade Scheme

Total

Consumer Scheme

61



Consumer Scheme 96 38 99 99 64 34

Total 96 40 99 99 64 34

Consumer scheme

0

20

40

60

80

100

120

Company

Ret

aile

r

ConsumerScheme

Total

Conclusion:

62

From the above analysis, we can conclude that, in 98% cases, the all retailers are aware

about the consumer schemes and the trade schemes. The distributors make them aware

about the all the schemes available in the market.

Suggestion:

The company performs well in consumer scheme and trade scheme. So no

recommendation for consumer scheme and trade scheme.

5. Source of purchasing the cards:

63


From company’s sales

person From other dealers

Airtel 0 97

Bsnl 0 40

Vodafone 0 100

Idea 0 100

Reliance 0 71

Tata 0 74

Source of purchasing

0

20

40

60

80

100

120

Company

Ret

aile

r

From company’ssales person

From other dealers

64

Conclusion:

From the above data, we can say that the all of the retailers purchase the prepaid cards

from the other dealers because their distribution service is good and timely.

Suggestion:

We find that most of the retailers purchase cards form the other distributors. In this case

company should hire more employees who meet the retailers directly and sell the cards.

By this way they can reduced the middle persons.

65

6. Analysis of all companies with different attributes:

Here, the total value is calculated on the basis of the rank given to them according to their

performance. (6 to 1 rank. 6 for best and 1 for worst).

Network:

Total Ahmedabad: The total no. of the retailer 100.


Total Value 81 39 92 71 51 26

Average 4.856 2.33 5.532 4.688 3.074 1.52

Network

0

1

2

3

4

5

6


Average

66

Conclusion:

As far as network is consult, the Vodafone is number one. The research shows that the

network is very much stronger. The idea’s position is third and then comes Reliance and

Tata.

Suggestion:

Idea’s position is third in network. If idea wants to come forward in network it has to

increase its network capacity in some area.

67

Company Scheme:



Total Value 90 56 93 61 58 44

Average 5.006 3.685 5.658 4.492 3.47 3.152

Company scheme

0

1

2

3

4

5

6


Average

68

Conclusion:

As far as consumer’s scheme is consult, the Vodafone is number one. The research shows

that people are much satisfies with the Vodafone’s schemes. The Airtel’s position is

second and then comes Idea, BSNL And Reliance.

Suggestion:

We found that Idea is lacking in consumer schemes so company has to increase its

consumer schemes.

69

Trade Scheme:


Airtel Bsnl vodafone Idea Reliance Tata

Total Value 81 72 84 82 76 65

Average 4.586 4.156 4.962 4.759 4.267 4.043

Trade scheme

0

1

2

3

4

5

6


Average

70

Conclusion:

As far as Trading schemes are consulting, the Airtel and Idea has acquired the same

position almost. The research shows that retailers are much satisfies with the Airtel and

idea’s trading schemes. The idea’s position is second and then comes Hutch And

Reliance.

Suggestion:

The trading scheme of Idea is better then other companies. So company has to keep this

path.

71

Distribution Services:



Total Value 84 59 89 87 82 79

Average 4.946 3.573 5.142 5.027 4.894 4.684

Distribution service

0

1

2

3

4

5

6


Average

72

Conclusion:

As far as distributor’s services consult, the Idea has acquired the first position. The

research shows that retailers are much satisfies with the idea’s distributor’s services. The

Airtel’s position is second and then comes Hutch And Reliance.

Suggestions:

The distribution service of Idea is good so there is no suggestions for the distributions

services.

73

Call Center Services:



Total Value 95 89 96 94 93 91

Average 5.764 5.357 5.862 5.694 5.628 5.532

Call centre service

5.1

5.2

5.3

5.4

5.5

5.6

5.7

5.8

5.9


Average

74

Conclusion:

As far as call center services consult, the Hutch has acquired the first position. The

research shows that the hutch provides the better call center services then others. The

Airtel’s position is second and then comes Idea And Reliance.

Suggestion:

In companies call center service, Idea has to need of improve its call center service, by

acquiring new technology. So it can compete other existing competitor.

75

The whole comparative analysis of all companies.

Analysis of all companies

01234567


76

Analysis of no of cards selling by retailers in Ahmedabad

Area-1 (South-west region)

0/recharge 1 to 5 6 to 25 26 to 50 Above 50

Airtel 11 12 2 1 0

Bsnl 10 0 0 0 0

Vodafone 3 22 3 0 0

Idea 7 18 4 0 0

Reliance 10 6 3 0 0

Tata 5 4 0 0 0

0

5

10

15

20

25

Airtel

Bsnl

Vodaf

one

Idea

Relianc

eTat

a

0/recharge

1 to 5

6 to 25

26 to 50

Above 50

77

Area-2 (North-west region)

0/recharge 1 to 5 6 to 25 26 to 50 Above 50

Airtel 9 12 1 0 0

Bsnl 8 0 0 0 0

Vodafone 2 18 3 1 0

Idea 8 12 1 0 0

Reliance 10 3 0 0 0

Tata 7 1 0 0 0

02468

101214161820

0/recharge

1 to 5

6 to 25

26 to 50

Above 50

78

Area-3 (North-east region)

0/recharge 1 to 5 6 to 25 26 to 50

Above

50

Airtel 2 16 4 0 0

Bsnl 9 0 0 0 0

Vodafone 2 17 3 1 0

Idea 2 16 5 0 0

Reliance 3 10 1 0 0

Tata 2 4 0 0 0

0

2

46

8

10

1214

16

18

0/recharge

1 to 5

6 to 25

26 to 50

Above 50

79

Area-4 (Middle-east region)

0/recharge 1 to 5 6 to 25 26 to 50

Above

50

Airtel 0 17 6 0 0

Bsnl 12 0 0 0 0

Vodafone 1 19 4 0 0

Idea 1 17 6 0 0

Reliance 1 12 3 0 0

Tata 0 8 0 0 0

02468

101214161820

0/recharge

1 to 5

6 to 25

26 to 50

Above 50

80

Analysis of recharge value sold

Area-1 (South-west region)

Below 5000

5001 to

10000

10001 to

25000 25001 to 50000 Above 50000

Airtel 24 2 2 0 0

Bsnl 10 0 0 0 0

Vodafone 17 8 3 0 0

Idea 21 5 2 0 0

Reliance 15 4 0 0 0

Tata 9 1 0 0 0

0

5

10

15

20

25

30

Below 5000

5001 to 10000

10001 to 25000

25001 to 50000

Above 50000

81


Below 5000

5001 to

10000

10001 to

25000 25001 to 50000 Above 50000

Airtel 19 2 0 0 0

Bsnl 8 0 0 0 0

vodafone 12 10 2 0 0

Idea 17 5 1 0 0

Reliance 13 0 0 0 0

Tata 8 0 0 0 0

02468

101214161820

Below 5000

5001 to 10000

10001 to 25000

25001 to 50000

Above 50000

82


Below 5000

5001 to

10000

10001 to

25000 25001 to 50000 Above 50000

Airtel 17 2 3 0 0

Bsnl 9 0 0 0 0

Vodafone 17 3 2 0 0

Idea 10 3 4 0 0

Reliance 10 3 0 0 0

Tata 6 0 0 0 0

0

2

46

8

10

1214

16

18

Below 5000

5001 to 10000

10001 to 25000

25001 to 50000

Above 50000

83


Below 5000

5001 to

10000

10001 to

25000 25001 to 50000 Above 50000

Airtel 16 2 5 0 0

Bsnl 12 0 0 0 0

Vodafone 17 3 3 0 0

Idea 16 4 3 0 0

Reliance 12 3 2 0 0

Tata 8 1 0 0 0

0

2

46

8

10

1214

16

18

Below 5000

5001 to 10000

10001 to 25000

25001 to 50000

Above 50000

84

9. Sales person visit (Efficiency of Salesman Of Distributor)

Area-1 (South-east region)

Once Twice

More than

twice

Not at all

visited

Airtel 2 8 18 0

Bsnl 1 4 0 5

Vodafone 1 10 18 0

Idea 2 9 18 0

Reliance 3 5 10 0

Tata 1 5 3 0

02468

101214161820

Airtel

Bsnl

Vodaf

one

Idea

Relianc

eTat

a

Once

Twice

More than twice

Not at all visited

Conclusion: From the above graphical representation, we can conclude that the

efficiency of sales person of Idea is highest, closely followed by Airtel and Vodafone. So

all three companies are much focus for their distributor efficiency.

85


Once Twice

More than

twice

Not at all

visited

Airtel 3 10 9 0

Bsnl 2 3 1 3

Vodafone 2 10 11 0

Idea 2 10 10 0

Reliance 3 5 6 0

Tata 2 6 1 0

0

2

4

6

8

10

12

Airtel

Bsnl

Vodaf

one

Idea

Relianc

eTat

a

Once

Twice

More than twice

Not at all visited


efficiency of sales person of Vodafone is highest, closely followed by Idea and Airtel.

The reliance is also come up with good strength for distribution after those three. So all

three companies are much focus for their distributor efficiency.

86

Area-3 (north-east region)

Once Twice

More than

twice

Not at all

visited

Airtel 0 3 20 0

Bsnl 0 0 0 9

Vodafone 0 3 19 0

Idea 0 3 20 0

Reliance 0 2 12 0

Tata 0 4 2 0

0

5

10

15

20

25

Airtel

Bsnl

Vodaf

one

Idea

Relianc

eTat

a

Once

Twice

More than twice

Not at all visited


efficiency of sales person of Airtel and Idea are almost same, closely followed by

Vodafone. The reliance is also come up with good strength for distribution after those

three. So all three companies are much focus for their distributor efficiency.

87


Once Twice

More than

twice

Not at all

visited

Airtel 0 1 22 0

Bsnl 1 0 0 12

Vodafone 0 1 23 0

Idea 0 1 23 0

Reliance 0 1 3 0

Tata 0 3 5 1

0

5

10

15

20

25

Airtel

Bsnl

Vodaf

one

Idea

Relianc

eTat

a

Once

Twice

More than twice

Not at all visited


efficiency of sales person of Airtel and Idea are almost same, closely followed by

Vodafone. But with comparison of other three region the performance of all

representative is somewhat low. So all three companies are much focus for their

distributor efficiency.

88

10. Manager’s visit (Efficiency of executives & Managers)

Area-1(South-west region)

Once Twice

More than

twice

Not at all

visited

Airtel 7 0 0 21

Bsnl 0 0 0 10

Vodafone 8 0 0 20

Idea 9 0 0 20

Reliance 7 0 0 12

Tata 1 0 0 8

0

5

10

15

20

25

Airtel

Bsnl

Vodaf

one

Idea

Relianc

eTat

a

Once

Twice

More than twice

Not at all visited


efficiency of Executives & managers of Vodafone and Idea are almost same, closely

followed by Airtel. So all three companies are much focus for their distributor efficiency.

89

Area-2(North-west region)

Once Twice

More than

twice

Not at all

visited

Airtel 7 0 1 15

Bsnl 0 0 0 8

Vodafone 8 0 1 15

Idea 9 0 1 14

Reliance 4 0 0 9

Tata 1 0 0 7


efficiency of Executives & managers of Vodafone is highest, closely followed by Idea

90

0

2

4

6

8

10

12

14

16

Airtel

Bsnl

Vodaf

one

Idea

Relianc

eTat

a

Once

Twice

More than twice

Not at all visited

and Airtel. But with comparison of other regions the performance of all representatives is

somewhat low.


Once Twice

More than

twice

Not at all

visited

Airtel 9 0 0 13

Bsnl 0 0 0 9

Vodafone 4 0 0 19

Idea 9 0 1 14

Reliance 7 0 0 6

Tata 1 0 0 5

02468

101214161820

Airtel

Bsnl

Vodaf

one

Idea

Relianc

eTat

a

Once

Twice

More than twice

Not at all visited


efficiency of Executives & managers of Idea and Airtel are almost same. Vodafone is

91

leader in this area. But with comparison of other regions the performance of all

representatives is somewhat low.

Area-4(Middle-east region)

Once Twice

More than

twice

Not at all

visited

Airtel 9 0 0 14

Bsnl 0 0 0 12

Vodafone 4 0 0 19

Idea 10 0 0 14

Reliance 10 0 0 8

Tata 2 0 0 7

02468

101214161820

Airtel

Bsnl

Vodaf

one

Idea

Relianc

eTat

a

Once

Twice

More than twice

Not at all visited


efficiency of Executives & managers of Idea is higher, closely followed by Hutch and

92

Airtel. But with comparison of other regions the performance of all representatives is

somewhat low.

Limitations & Scope of Research

The Research study conducted herewith is restricted to the market of Ahmedabad only.

Some limitations in terms of research resources and manpower couple with the fact that

the sample size and the quality of respondents were limited due to the constraint of time,

hence there would be some variance from the actual scenario. This research study would

provide only a micro insight into the dynamic factors that rule the Ahmedabad telecom

distribution network.

To this extent, we would like to state that the research should not be treated as conclusive

and there is a further scope of improvement for research. A wider sample base and a

broader geographical territory (preferably a Circle of Telecom) would be more effective

in drawing a relatively more accurate research picture.

This has been a very satisfying research experience for the two of us and we would like,

if possible to extend and compile a macro profile for this research topic.

93

Findings

From the above data and the analysis we have made the final conclusion is as under:

Our main objectives of the project are:

To assess market share of the Idea vis-à-vis other competitor.

To analyze effectiveness of idea’s representative vis-à-vis other competitor.

To study and analyze the reach of Idea’s distribution network vis-à-vis other

competitor.

To assess the distribution depth of Idea vis-à-vis other competitor.

Conclusion:

Idea is the major competitor in the Ahmedabad and has a leading position in many

areas like distribution reach and efficiency of distributor.

As far as the reach of Idea’s distribution network is consult the idea has a leading

position. For distribution of the cards, the services and the reach are good enough. There

is some problem with some far areas but overall performance is focused.

94

As far as the efficiency is consult the idea has a moderate position. For

distribution of the cards and the efficiency of the executives and the managers are good

enough. The work is focused.

Recommendations

As far as network is consult, the performance of the Idea is weak, as compared to

the Vodafone and Airtel and Reliance. So, Try to improve on such factor via increasing a

technical support.

Same problem is with call center, as far as customer care services are consulted,

the performance is not up to the mark again. Compare to the Idea, Vodafone and Airtel

has comparatively good performance. So, idea has to work upon it and try to make it

more efficient with training programs.

The problem existed with the Middle East and some areas of Southwest region.

The retailers are quite dissatisfied with the distributor services. So, particularly for those

areas the frequency of visits and the quality of meetings of sales persons should be

increased.

The performance of Idea is good, in particularly western part of the city, but still

in other areas like eastern part, the need of the more awareness campain is required.

Make a good relationship with retailers. Need to show and maintain great

company’s support. Which makes retailers themselves sell and promote companys’cards.

And the same helps to create better public image.

95

The impact of Idea chitchat on customers is not powerful compared to Vodafone

so, try it to be strong by more promotions from the ways that has powerful impact on

public’s mind like Radio Mirchi, local cable and newspapers.

Organizing of retail events (Retail Meet) that are opening a new Retail club.

To expand the market the company should not only concentrate over the urban

areas, but also have look at the uncaptured rural market. And establish good offers

considering the villagers’ requirements.

Try to get the trust of customer by providing better services and attractive

schemes. Every customer wants satisfaction from the product so give him or her as much

convenience as possible to make him or her permanent customer.

The retailer whosoever are of the more recharge voucher purchasers, should

offered the extra benefits other than the regular one.

The problem is with the Network and the call center services. Idea should work

upon the same and try to make it efficient with more technical support and training

programs.

96

QUESTIONNAIRE

_____________________________________________________________________

Dear Sir/Madam,

Kindly extend your cooperation in filling this questionnaire and enable us

to conduct the research successfully.

Date: _________

Retail Name: ________________________

Road: ______________________________

Address: ________________________________________________

Pin Code: _______________

Type of the shop:

1) Telecom shop

2) General / Provision store

3) Grocery shop

4) Pan shop

5) S.T.D. booth

6) Gift shop

7) Stationary shop

8) Others, please specify ________

______________________________________________________________

1. Which companies pre-paid cards, are you selling?

Cards FOD

(a) Airtel

(b) Bsnl

(c) Vodafone

97

(d) Idea

(e) Reliance

(f) Tata

2. Since how many years, you are in the business of selling pre-paid cards in the

market?

a) Less than 1 year

b) 1 to 3 years

c) 3 to 6 years

d) 6 to 9 years

e) More then 9 years

3. How many pre-paid cards of different companies you sell in a month?

a) Idea

_

4. What

is the

recharge value sold at your outlet per month (in rupees)?

Below

5000

5001 to

10000

10001 to

25000

25001 to

50000

Above

50000

(a) Airtel

(b) Bsnl

(c) Vodafone

(d) Idea

0/Recharge 1 to 5 6 to 25 26 to 50 Above 50

(a) Airtel

(b) Bsnl

(c) Vodafone

(d) Idea

(e) Reliance

(f) Tata

98

(e) Reliance

(f) Tata

5. From whom you purchase the pre-paid cards of different companies?

From company’s sales-person From other dealers

(a) Airtel

(b) Bsnl

(c) Vodafone

(d) Idea

(e) Reliance

(f) Tata

A) If from other dealers, than what is the reason?

Discount Credit Distributor’s services

(a) Idea

(b) Vodafone

(c) Airtel

(d) Bsnl

(e) Reliance

(f) Tata

6. How frequently the salesman of distributor visits your shop in a week?

Once Twice More than

twice

Not at all

visited

(a) Airtel

(b) Bsnl

(c) Vodafone

(d) Idea

99

(e) Reliance

(f) Tata

7. How frequently the company’s sales executives/manager visits your shop in a month?

Once Twice More than

twice

Not at all

visited

(a) Airtel

(b) Bsnl

(c) Vodafone

(d) Idea

(e) Reliance

(f) Tata

8. Are you getting clearly and timely information from company’s sales representative

about different schemes launched?

Trade SchemeYes No

(a) Airtel

(b) Bsnl

(c) Vodafone

(d) Idea

(e) Reliance

(f) Tata

Consumer

Scheme

Yes No

(a) Airtel

(b) Bsnl

(c)Vodafone

(d) Idea

(e) Reliance

(f) Tata

100

9. Give the rank to the different companies, according to their performance in the

different area. (Use 6 to 1 rank. 6 for best and 1 for worst). You cannot repeat ranks given

once.


Network

Company

schemes

Trade

schemes

Distributor

services

Call center

services

101

10. Who are the main buyers of the different company’s pre-paid cards?

Students Others

(a) Airtel

(b) Bsnl

(c) Vodafone

(d) Idea

(e) Reliance

(f) Tata

11. Please give your satisfaction level towards these companies.

Satisfied Unsatisfied Reason

(a) Airtel

(b) Bsnl

(c) Vodafone

(d) Idea

(e) Reliance

(f) Tata

102

Area of Ahmedabad with their Pin codes

Area Cod No.

Air port 380012

Amraiwadi 380026

Behrampura 380022

Bapunagar 380024

Cantonment 380003

Civil Hospital 380016

Ellisbridge 380006

Gandhi Ashram 380027

Thakkar Bapa Nagar 382350

Ghatlodia 380061

Girdharnagar 380010

Isanpur 382443

Jantanagar 382449

Jivraj Park 380051

Juhapura 380055

Kathwada Maiz Product 382430

Khodiarnagar 382352

Krishna Nagar 382346

Kubernagar 382340

Maninagar 380008

Memnagar 380052

Naranpura 380013

Vatva 382440

Naroda 382330

Naroda Road 380025

Navjivan 380014

Navrangpura 380009

Narol 382405

Odhav 382410

Odhav Ind Estate 382415

Paldi 380007

Polytechnic 380015

Railway Pura 380002

Rajpur Gomtipur 380021

Rakhial Ind Estate 380023

Ranip 382480

103

Sabarmati 380005

Sabarmati Rly Colony 380019

Saijpur Bogha 382345

Saraspur 380018

Shah Alam Roza 380028

Shahibag 380004

Sardar Nagar 382475

Space Application Centre 380053

Thal Tel Road 380054

104

BIBLIOGRAPHY

The reference books were used for this report were:

Marketing Management (Eleventh Edition) by Philip Kotler published by Pearson

Education

Business Research Methods (Eighth Edition) by Donald R. Cooper and Pamela S.

Schindler published by Tata McGraw-Hill.

The web sites referred for the report were:

www.ideacellular.com

www.idniantelecircle.com

www.businssline.com/index.cellular .asp

www.gov.in/telecomunication/grwoth.asp

www.trai.com

105

http://www.idniantelecircle.com/

http://www.businssline.com/index.cellular

Glossary

FOD:

The advertising tools, which make show off the product. (Like wise, the stickers,

shelf, artificial model etc,) The glosign boards of the different company are not included

in the FOD.

106

Documents

Telecom Indusry Project