A PROJECT REPORT

ON

“ ANALYSIS OF MARKETING STRATEGIES ADOPTED BY HUTCH AND COMPARISON WITH

THE RIVAL - AIR TEL.”

Submitted in Partial Fulfillment for the award of the degree of

Master of Business Administration (Marketing)

Submitted By:Syed Md Ehteshamul Hasan

2KMBA-46

UNDER THE SUPERVISION OF

Mr. Farhad Khan

MBA PROGRAMFACULTY OF ENGG. & TECH.

JAMIA MILLIA ISLAMIANEW DELHI.- 25

(2003)CERTIFICATE

1

This is to certify that the Project entitled “ANALYSIS OF MARKETING

STRATEGIES ADOPTED BY HUTCH AND COMPARISON WITH THE

RIVAL - AIR TEL.” in partial fulfillment for the award of the degree of Master

of Business Administration (Marketing) is the original work of Mr. Syed Md.

Ehteshamul Hasan and has been accomplished under my guidance.

No part of this Project has been utilized or submitted in the form of Degree or

Diploma either in this university or any other Institute.

The performance of Mr. Syed Md. Ehteshamul Hasan during works has remained

satisfactory.

MR. FARHAD KHAN

(Supervisor)

2

DECLARATION

I, Syed Md. Ehteshamul Hasan, hereby, declare that the Project Report entitled

“ANALYSIS OF MARKETING STRATEGIES ADOPTED BY HUTCH

AND COMPARISON WITH THE RIVAL - AIR TEL”, which is being

submitted to the MBA Programme, Faculty of Engineering & Technology, Jamia

Millia Islamia, New Delhi, in the partial fulfilment for the award of the degree of

Master of Business Administration (Marketing) is the result of my individual effort

under the guidance of my supervisor Mr. Farhad Khan.

I further declare that this report or any part of it has not been submitted in any

Institute for the award of any Degree, Diploma, Associate ship, fellowship or the

similar title of recognition.

(Syed Md. Ehteshamul Hasan)

3

ACKNOWLEDGEMENT

I take pleasure in submitting the Project Report entitled “ANALYSIS OF

MARKETING STRATEGIES ADOPTED BY HUTCH AND COMPARISON

WITH THE RIVAL - AIR TEL” for the award of degree of MBA at Jamia

Millia Islamia, New Delhi.

I wish to express my gratitude to honourable supervisor for the Project Mr. Farhad

Khan. Because of his guidance only, the Project work could be meaningfully

accomplished. He has always extended his valuable advices and suggestions during

the Project and has always proved to be a source of inspiration for me. I wish to

put on record the same.

I also wish to express my appreciation to all the supporting staffs in MBA

Programme, who were very supportive throughout the course of study. I am also

greatly indebted to Prof. Abid Haleem (Co-ordinator – MBA Programme) whose

thoughts and insights helped me in the furthering my knowledge and

understanding throughout my course duration.

I also acknowledge my heartfelt gratitude to my friends for their excellent efforts

and encouragements, which had been provided to me throughout this project work.

My heart felt gratitude goes to my loving Family Members, especially my Eldest

Brother Mr. S. M. Sabahul Hasan whose ever growing love and blessings for me

came a long way to achieve the target and have always been appreciated me to do

better, sweeping constantly all the obstacles falling in my way and the debt I owe

to them can never be redeemed throughout my life.

Finally, I am at loss of words as how to acknowledge and express the deepest

appreciation of love and respect to the person whom, I owe my life and the main

arranger of the study, of course my FATHER and MOTHER for caring regularly

and inculcating confidence in me which made possible to achieve this.

(Syed Md. Ehteshamul Hasan)

4

INDEX TO CONTENTSPage

Nos.CHAPTER-1

INTRODUCTION 1-8

1.1 History of Cellular Telephony in India 03

1.2 Cellular Industry in India 03

1.3 Cellular Market Structure of India 04

1.4 Delhi’s Cellular Market 06

1.5 The Churn in the Cellular Industry 08

CHAPTER-2

OBJECTIVES 09

CHAPTER-3

RESEARCH METHODOLOGY 10-11

3.1 Research Design 10

3.2 Data Sources 10

3.3 Research Instrument 10

3.4 Mode of Survey 10

3.5 Sampling 11

3.6 Sample Size 11

5

3.7 Sample Unit 11

3.8 Place of Study 11

CHAPTER-4

COMPANY PROFILE 12-15

4.1The Evolution & the Marketing Strategy of Hutchison Essar

Telecom Limited 12

4.2 Roaming Into India 14

4.3 Setting up Roaming 14

4.4 Rewards 15

CHAPTER-5

THE COMPETITORS’ COMPANY PROFILE 16-20

5.1 Air Tel 16

5.2 MTNL 18

5.3 Birla AT & T 19

CHAPTER-6

OTHER CELLULAR OPERATORS IN INDIA 21-23

6.1 Spice Telecommunication

21

6.2 Escotel 21

6

6.3 Shyam Telecom 21

6.4 RPG Cellular 22

6.5 Aircel Digilink India Ltd. 22

CHAPTER-7

THE MODE OF COMPARISION 24-26

(Ten points, the so called --Brand Equity Ten)

7.1 Loyalty Measures 24

7.2 Percieved Quality & Leadership Measures 25

7.3 Association/Differentiation Measures 25

7.4 Awareness Measures 26

7.5 Market Behaviour Measures 26

CHAPTER-8

FINDINGS (Based on Structured Questionnaire)

27-52

8.1 Break-up of the respondents (Age, Sex & Occupation)27

8.2 Cellular Connection & The Service Providers 28

8.3 Category of Connection used 29

8.4 Reason for the selection of service provider

30

8.5 Brand Awareness 32

7

8.6 Customer Satisfaction 33

8.7 Perceived Value (Tariffs/Rental Plans)

34

8.8 Price Premium 39

8.9 Perceived Quality 44

8.10 Leadership & Popularity 45

8.11 Brand Personality 47

8.12 Organizational Association 48

CHAPTER-9

AN ANALYSIS AFTER COMPARISON 50-52

CHAPTER-10

A NOTE ON THE CUSTOMERS’ RESPONSE

53-54

CONCLUSION 55-56

RECOMMENDATIONS 57-58

REFERENCES 59

ANNEXURE 60-63

Annexes provide supporting information and details

60

Questionnaire 62

8

9

CHAPTER-1

INTRODUCTION

"TELECOMMUNICATIONS IS THE BACKBONE OF OUR FUTURE

ECONOMY. INTERNATIONAL COMPETITIVENESS INCREASINGLY

DEPENDS ON THE DEVELOPMENT OF A TELECOMMUNICATIONS

INFRASTRUCTURE THAT IS COMPATIBLE WITH INTERNATIONAL

STANDARDS. "

The cellular industry all over the world has been witnessing very high growth rates

in subscriber base in recent years. For developing countries in particular, cellular

services are becoming a very significant proportion of the overall telecom

infrastructure. The mechanics of competition within this market involve complex

feedback effects between individual service providers and with their operating

environment, and these forces play an important role in governing the growth of

this industry.

In a country like India which is not yet telephone-saturated and the ongoing

changes in related areas are resulting in a rapidly changing profile of users,

providers and their respective needs, continuous revision of the telecom policy is

imperative. Given the emerging new technologies and the integrating economies

there must be fairness among competitors.

The tele-density in India is about four per hundred people in respect of the fixed

telephones and a little less than one in respect of the mobile telephony. The low

densities are not because there is no need for a telephone but because of its high

cost that many cannot afford that one. The situation here is nothing but holding

true of the “law of demand”. Isn’t it?

10

The cost for the companies can come down if the revenue share imposed on them

as a condition of license is abolished or drastically reduced. Today every telephone

company is bound to pay a share out of its revenue to the exchequer. These cost

are, however, not to be scheduled to take a step further in the development of the

telecom. In addition when we go through the telephone bill there is a 5 to 8%

service charge. This amount also does not go for the telecom development. If these

external cost are removed there can be seen a spurt in demand of not less then 40%

as expected.

While taking the side of suppliers a lot of new company are coming into the

battlefield resulting in reduction of prices and hence a little less burdensome on to

the customer. The cost of interconnection with the incumbent is proving to be

contributory to the high cost of services provided by the competitors.

The delay in the interconnection disregards the quality of service and high cost will

detract from affordability. This is an area in which no consumer body can

knowledgeably contribute unless it has the assistant of experts or economists who

alone can discover all the relevant fact of all the contesting companies. It indicates

the pre-eminent domain of TRAI (Telecom Regulatory Authority of India).

As the driven down of the prices for long distance including international services

reduces the amount available for subsidizing the local service, the rental for local

services are being increased. Considering that about 90% of the long distance call

are made by less than 20% of customers, 80% of customer are having to pay higher

rental this depresses the demand for telephones and affordability. The urban

business subscribers will be bearing the bond of the subsidies to be given to the

rural private consumers.

11

1.1 History of Cellular Telephony in India:

The technology that gives a person the power to communicate anytime, anywhere -

has spawned an entire industry in mobile telecommunication. Mobile telephones

have become an integral part of the growth, success and efficiency of any

business / economy. The most prevalent wireless standard 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

communications.

The GSM 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 Groupe Speciale Mobile as it was then called, soon came to represent the

Global System for Mobile Communications as it achieved the status of a world-

wide standard. GSM is today, the world's leading digital standard accounting for

68.5% of the global digital wireless market. The Indian Government when

considering the introduction of cellular services into the country, made a landmark

decision to introduce the GSM standard, leapfrogging obsolescent technologies /

standards. Although cellular licenses were made technology neutral in September

1999, all the private operators are presently offering only GSM based mobile

services. The new licensees for the 4th cellular licenses that were awarded in July

2001 too, have opted for GSM technology to offer their mobile services.

1.2 Cellular Industry in India

The Government of India recognizes that the provision of a world-class

telecommunications infrastructure and information is the key to rapid economic

12

and social development of the country. It is critical not only for the development of

the Information Technology industry, but also has widespread ramifications on the

entire economy of the country. It is also anticipated that going forward, a major

part of the GDP of the country would be contributed by this sector. Accordingly, it

is of vital importance to the country that there be a comprehensive and forward

looking telecommunications policy which creates an enabling framework for

development of this industry.

1.3 Cellular Market Structure in India

As in other countries, in India, the Cellular Mobile Service Providers (CMSPs) are

licensed to operate in designated geographical operating areas. The service areas

include four metro areas and 18 circles categorized as A, B and C. (The

categorization is based on the revenue Proceedings of the 36th Hawaii

International Conference on System Sciences).

The potential with category C circles in the lower end of the scale. For example the

metros account for 40% of the subscriber population, with Category-A, B and C

accounting for 33%, 23% and 4% respectively. The CMSPs had to pay an entry fee

and subsequently annual license fee as a percentage of their revenue to the

Department of Telecommunications.

The entry and license fees varied according to the service area, highest for metros

and lowest for Category-C circles. Some of the CMSPs could not fulfill their

licensing obligations and their licenses were revoked leading to a monopoly

situation in certain areas. Apart from these charges, each CMSP has to share the

revenue with the long distance operators for carrying inter-service area calls. In

profitable metros and circles, the competition is severe and the market is split

between the two operators. In a price-cap regulated market, the operators use

appropriate pricing strategy to win customers and win market share.

13

In highly price-elastic markets, such as in India, as the service provider reduces the

price, the subscriber base increases considerably, and so is the network traffic. The

increased network traffic decreases the performance and the quality of service,

inviting customers to switch. Being a new entrant in a metro area, the government

operator reduced the airtime charges to such an extent that the subscriber base

increased suddenly leading to poor network performance. The operator did not

have enough network capacity to handle calls leading to blocking of calls, with

frustrated customers switching over immediately to competitors.

The operators also have to resort to non-pricing competition strategies to win

customers. In India, CMSPs offer a variety of service plans as a means to attract

new customers. Different service plans include: pre-paid calling card schemes,

discounted airtime rates for evening and night time calls, discounted roaming

charges, no or minimum activation fees, and reduced mobile to mobile long

distance call rates.

The service providers incur additional advertising and infrastructure cost for

implementing these plans. Short Message Service (SMS) and Wireless Application

Protocol (WAP) service are fast catching up. For example, in India, about 500,000

SMS messages are being carried by a service provider in one metro area alone.

When the sector moves over to an oligopoly market, the operators have to provide

improved quality of service and value added services in order to survive and gain

market share.

Larger operators who have experience and infrastructure may be able to provide a

higher quality of service and other value-added service at a lower price. They also

have access to larger project financing for enlarging their networks and services.

For example, a single large operator now has license to operate in 14 service areas

in the country with the largest footprint to cover most of the areas of the country.

Mergers and acquisitions are commonplace as the operators are consolidating their

revenues to survive in the market places.

14

1.4 Delhi’s Cellular Market:

City/Circle Operators Oct'2002 Nov'2002 Dec'2002

Delhi Bharti Cellular 791637 813445 834269Hutchison Essar 555586 574205 580328

MTNL 126980 128132 129809Idea Cellular 75384 128306

Total 1474203 1591166 1672712

Cellular subscribers and those with a propensity to go mobile in Delhi have never

had it so good. They now have four service providers to choose from, each offering

an array of both pre- and post-paid schemes. More importantly, average tariffs

across plans have, by some reckoning, dropped by at least 50 per cent in the last

six months. the entry of hutch saw a further drop in tariffs and the operators have

come out with new schemes to retain their subscribers and attract fresh ones.

What does this mean for subscribers and for the cellular industry in Delhi? All the

four operators — Hutchison Essar Ltd., Bharti Celluar Ltd, MTNL and Idea

Cellular services. — are convinced that the market will only expand and the

subscribers will benefit even more. Their reasoning is that cellular penetration in

Delhi, which traditionally occupies the third position in other areas, is less than

fifty per cent. Therefore, entry of new players will only increase awareness about

the facility, the companies say.

Moreover, the state-owned MTNL has also been playing with its cellular service

for quite some time. that, with the imminent launch of limited mobility using

CDMA (code division multiple access) technology by companies like Tata

Teleservices will only add to the subscriber base, probably result in further

reduction of tariffs, and an even greater widening of the cellular market, according

to officials in four cellular companies now servicing Delhi.

15

However, the companies also sound a note of caution — any further drop in tariffs

will be harmful to the companies, points out one of the officials taking care of the

— Sales & Marketing division of the, Hutchison Essar Ltd, average tariffs in Delhi

across different plans have fallen by 30 per cent since December with launching of

the CDMA services.

Besides the fall in tariffs, what has really happened with the entry of CDMA is a

heightened awareness in the market. Mobile penetration in Delhi and its suburbs is

estimated to be less than twenty-five percent of the population and the cellular

operators believe that this number should definitely go up.

It is here that Hutch decided to target the customers with what it believes are

unique products and features. Its emphasis has been on value proposition and brand

building. Mobility is not only about carrying voice, as per the reports from the

marketing department and adds that the unified messaging system for the post-paid

customers of Hutch is one such unique product.

Accordingly, Hutch signed in its subscribers in lakhs from the year onwards it has

been launched in Delhi. Industry analysts say that a majority of them will be pre-

paid customers, whose loyalty to a particular brand is always in doubt. However,

pre-paid for the cellular is nothing but the engine for growth and there is always a

possibility that most of them will shift to post-paid once they are convinced of the

quality of service provided.

On the other hand the entry of a new operator lends more visibility to the service

and there is also increased trade activity — that is the number of dealers will

increase and more people will be on the road trying to sell the service and product.

There is also greater consumer awareness of what cellular service can deliver and

expectations go up in terms of pricing or service standards or network availability.

16

1.5 The Churn in the Cellular Industry:

As like the other products Cellular industry has not been left untouched from the

Churn (switching over). During the survey this fact come to the fore. According to

the cellular operators, there is a normal seven to eight percent churn in the

customers, especially in the pre-paid category. Among the post-paid customers, the

Churn is much lower about two-three percent.

They say that one significant change that has happened in the last few months,

more so since lowering of the tariffs, is that the bias in favour of incoming calls as

far as call charges are concerned — incoming calls has been set free while they are

charging reasonably only for the outgoing ones — has changed. A tariff re-

balancing has definitely taken place.

This means that the cellular operators are encouraging their subscribers to not just

receive calls, but also make calls — increasing the usage of the service.

With falling tariffs, cellular operators are convinced that increasing usage is one

way to ensure that average revenue per user (ARPU) does not fall very low. The

industry figure for ARPU is believed to be about Rs 1,100 while it may vary from

operator to operator. The operators are also concentrating on introducing more

value added services to the customers. Value-added services have not really taken

off. Only the SMS (short messaging service) has really caught on, but operators

like Bharti are bringing in services like music messaging and concierge facility for

its subscribers.

17

CHAPTER-2

OBJECTIVES

The study has been conducted with the following objectives :

To study the present marketing strategies of Hutch.

To study the effectiveness of the marketing strategies of Hutch in

comparison to Air Tel.

To know something about the Brand of Hutch i.e., image, awareness,

loyalty, personality etc.

To propose the suggestions fully based on the findings of this Project,

which may help to acquire more market share.

The study has also been focused on the weaknesses and the loopholes of the

company. The suggestions advocated through this study will try to work out these

weaknesses and the loopholes and will further help the company or the

organization to reach the target accordingly.

18

CHAPTER-3

RESEARCH METHODOLOGY

3.1 Research Design

A research design is purely and simply the framework or plan for a study

that guides the collection and analysis of data. The survey research was

used in this project, because consumer’s feedback was necessary for

obtaining the data.

3.2 Data Sources

Primary data was collected by the questionnaire based market survey.

Secondary data was obtained from journals, magazines, newspapers, books

and of course the Internet.

3.3 Research Instrument

For doing the survey research, structured questionnaire with both open-

ended and closed-ended questions was used.

3.4 Mode of Survey

The mode of survey was personal interview with the respondents during

the filling up of the questionnaires.

19

3.5 Sampling

The sampling used for this study was probability sampling. Since the study

is only meant for certain specific categories within the total population (cell

phone users, in this case), a stratified random sample was used.

3.6 Sample Size

A sample size of 60 respondents is used for the study.

3.7 Sample Unit

This study was basically an opinion survey of the residents of Delhi – who

are cell-phone users – regarding their views on the cellular service

providers.

3.8 Place of Study

Delhi and NCR

20

CHAPTER-4

COMPANY PROFILE

4.1 The Evolution & The Marketing Strategy Of Hutchison Essar

Telecom Limited:

Hutchison established its presence in India in 1994, through a joint venture with

Max India Limited. In 1995, Hutchison Max Telecom became the first operator in

India to launch its cellular service. Today, Hutchison is one of the largest providers

of cellular services in India with presence in all the major regions - Orange in

Mumbai and Hutch in Gujarat, Kolkata, Andhra Pradesh, Karnataka, Delhi and

Chennai. It is also the country's largest roaming operator, with a more extensive

network in India and around the world than any other operator. They are known for

their innovative approach and world class technology. Their goal is to provide the

subscriber the superior products and services, anytime and anywhere. Hutchinson

Telecom is accredited for being among the first cellular operators in the world,

having started its services way back in 1985.

21

Sterling Cellular Limited is a joint venture of Hutchinson Telecom and Essar

Group offering cellular services in Delhi under the two brand names- Hutch and

Speed. Soon after the Essar group acquired a stake in Sterling Cellular, the cellular

operator in Delhi, it roped in Swisscom by selling it a 35.56% stake and even

ceded management control to its novice Swiss partner. Three years down the line,

Swisscom decided to withdraw and Hutchinson bought over the stake. Currently

Essar holds 51% stake in Sterling and Hutchinson holds the remaining 49%.

It is part of the Hong Kong based multinational conglomerate Hutchison Whampoa

Limited, a Fortune 500 company, and one of the largest companies listed on the

Hong Kong Stock Exchange. Its operations span 36 countries across the Asia

Pacific region, Europe and the Americas.Hutchison affiliates jointly account for

the largest number of cellular subscribers in India numbering over 2 million. Hutch

is brought to us by Hutchison Telecom, one of the world’s leading cellular service

providers. But in Delhi, it is the follower with 2.18 lakh subscribers to Air Tel’s

3.28 lakh subscribers (Businessworld, May 7,2001) .Today the total number of

mobile subscribers to Hutch are 1.96 million. (Business Today, 5th Jan 2003)

Hutchinson Essar presently offers a host of premier value added services (VAS)

including national and international roaming in over 70 countries in over 160

networks, Wireless Application Protocol (WAP), short message service, voice mail

service, auto roam, fax and data, cricket updates, M-banking, general information,

tarot line, etc. The company launched WAP in Delhi in October 2000, much before

its rival Bharti. It has 5000 WAP customers, as in December 2000. The company

has been a prime mover in introducing these value-added services in the Delhi

circle.

The values are stated simply. To be fair and transparent in what they do and how

they do it. To provide the quality services with more customer friendly practices.

To make one’s communications experience simple, pleasurable and fun. Where he

22

doesn't simply get technology - but technology that is relevant. Where solutions are

not just promised in the future - but delivered in the present.

4.2 Roaming Into India:

Hutch has the widest roaming coverage in India. One can roam in over 1200 cities

and towns across the country and stay connected even when you are traveling on

the highways.

4.3 Setting up Roaming :

When one comes into any Hutchison network, there is need to switch off and

restart his phone. In case, the network is not registered automatically, he has to

move to the phone settings menu and select the network manually. When He can

choose the network by manual network selection, the on-screen display for the

respective state will be as follows:

Network City/State On Screen

Hutch Delhi (40411/Hutch/Essar)Hutch Kolkata (40430/Hutch/Command)Hutch Gujarat (40405/Hutch/Celforce)Hutch (South) Karnataka IN-86-KHutch (South) Andhra Pradesh IN-85-AHutch (South) Chennai IN-84-COrange Mumbai Orange

23

4.4 Rewards

One can add valuable reward points to his airline, hotel or credit card loyalty

programs, when he roams on any Hutchison-affiliated networks. These include

Orange in Mumbai, and Hutch in Delhi, Gujarat, Kolkata, Andhra Pradesh,

Karnataka and Chennai. While roaming in these locations he has to dial 500 to

register.

This offer is open to national roaming customers.

Air India (Flying Returns)

HSBC Credit Card

American Express

HDFC Bank (Savings/Current Account)

Standard Chartered Credit Cards

Oberoi Hotel (TOP)

24

CHAPTER-5

THE COMPETITORS’ COMPANY PROFILE

5.1 AIR TEL

Air Tel, in Delhi, comes from Bharti Celluar Ltd., a part of the Bharti Enterprises.

Singtel holds 32.5% stake and NRIs hold 4.5% stake in Bharti Cellular, the

remaining part rests with Bharati.

Air Tel launched its services in Delhi on November 14,1995. At present it has 3.28

lakh subscribers (as on March-end 2001) in Delhi. Today, Bharti is the single–

largest private telecom service provider in India with operations in Delhi, Andhra

Pradesh, Himachal Pradesh, Chennai and Madhya Pradesh. It has 8.47 lakh

subscriber base that's broken up into 5.98 lakh cellular users, 1.07 lakh basic

service users and 1.42 lakh internet subscribers. (Businessworld , May 7,

2001).The total number of mobile subscribers of Bharti is 2.65 million.(Business

Today ,Jan 5 2003).

25

Air Tel has redefined the business through marketing innovations, continuous

technological upgradation of the network, introduction of new generation value

added services (VAS) and the highest standard of customer care.

Air Tel was the first to launch cellular service in Delhi. It also revolutionised the

concept of retailing with the inauguration of Air Tel Connect (exclusive show

rooms) in 1995. Today Air Tel has 17 Customer Care Touch Points and over 300

dealers in Delhi and NCR towns. It was the first to expand its network with the

installation of second mobile switching centre in April 1997 and the first in Delhi

to introduce the Intelligence Network Platform. First to provide roaming to its

subscribers by forming on association called World 1 network. First to provide

roaming facility in the USA. Air Tel has the largest automatic roaming service

Smart Roam – National in 350 cities in India and Smart Roam International in over

60 countries and 95 networks all over the world. Air Tel’s prepaid card, Magic has

consistently held a dominant position in the market and has played a major role in

cellular services. Some of the awards Air Tel has won are the Asia Pacific Award

for most Innovative HR Practices 2000, the Golden Peacock National Training

Award for excellence in training practices 2000, the Golden Peacock National

Quality Award 2001.

In August 2000, Bharti Enterprises had announced its brand vision: Bharti as the

reassurance driver, Air Tel as the volume and penetration driver, and MAGIC as

the image and revenue driver. Air Tel is positioned of the mother brand.

Some of the Value Added Services (VAS) which Air Tel provides are Smart mail,

Fax facility, Call hold, Call waiting, Web message, information services, etc. to

enhance the convenience of its subscribers. The latest VAS offering is mobile

banking for HDFC Bank, ICICI Bank and Bank of Punjab customers. Air Tel is

also tying up with Net Xcel and Air 2 web for its 500 and 700 series information

services. Currently about 60 to 70% of Air Tel’s subscriber base use VAS.

26

Approximately 3.5 to 4 million messages a month are being sent over Air Tel.

Currently besides M-banking, Air Tel offers e-mail services and information

services such as news, stocks, horoscopes, jokes, weather, TV listings, hospitals,

flights, trains, movies and ATMs. (Economic Times, May 1, 2001).

5.2 MTNL

MTNL with world-class vision has introduced GSM Cellular Mobile Service with

a capacity of 100,000 subscribers in each of the two metro cities of Delhi and

Mumbai under the brand name dolphin. The service was launched in Delhi on Feb.

7, 2001 and in Mumbai on Feb. 27, 2001. The cellular network, set up by M/s ITI

Ltd. / Lucent Technologies on turnkey basis, supports Intelligent Network Services

such as prepaid, auto roaming (National as well as International), free phone,

premium rate service etc.

MTNL has been licensed to operate cellular services in National Capital Region

(NCR) of Delhi ( including its four satellite towns of Ghaziabad, NOIDA,

Faridabad & Gurgaon ) and Mumbai (including Navi Mumbai & Kalyan).

MTNL, with its state-of-the-art cellular network at airtime rates like never before,

has brought the world-class cellular mobile connectivity within everybody’s reach.

Today MTNL can boast of 2,36,000 mobile subscribers.

27

Prepaid Service under the brand name “TRUMP’ has been launched

simultaneously in Mumbai and Delhi on 14.1.2002. Already we have achieved a

landmark of more than 200,000 Dolphin Mobile connections.

5.3 BIRLA AT&T

Launch date-(November 7, 2002, New Delhi )

Idea Cellular Limited - formerly Birla Tata AT&T Ltd. - announces the launch of

its mega cellular operations in New Delhi, introducing state of the art GPRS ready,

EDGE upgradeable and 3G compatible network for the first time in the cellular

service industry here. With an entire range of first time ever and value-enhanced

services on the mobile, all elegantly packaged to suit the ever increasing demands

of consumer, never before offered by anyone in New Delhi, Idea promises to

change the way one lives, works and plays.

Idea has the best to offer, besides its advanced cellular network and exclusive

range of products and services. As part of their product offering Idea Cellular

would be launching both its Post-paid and Pre-paid products along with a host of

value added services.

28

One of India's premier and fastest growing cellular company, Idea is promoted by

the country's largest business houses -the Aditya Birla Group, the Tata Group, and

the world's largest telecom giant -AT&T Wireless, USA. The company already has

its footprints in the 6 states of Andhra Pradesh, Chattisgarh, Goa, Gujarat, Madhya

Pradesh and Maharashtra (excluding Mumbai) and it is now launching its services,

as the fourth operator in the flagship circle of New Delhi.

Birla Tata AT &T unveiled its new corporate identity that personifies its promise

to Indian cellular consumers. The company will henceforth shed the abbreviated

moniker BTAL and be known as " IDEA Cellular"

The Idea logo captures graphically the spirit of innovation by the manner the word

is written. It comes alive in the superior technology that its users access, and grows

through the innovative services that Idea Cellular offers. The power of Idea lies in

its ability to transcend age, gender, geography and mindsets and to be easily

understood across all languages.

29

CHAPTER-6

OTHER PLAYERS IN THE MARKET

6.1 Spice Communications Limited

Is presently operating Cellular Phone Services in the states of Punjab and

Karnataka. Spice Communications is a 51:49 joint venture between Spicecorp

(India)- the flagship company of Dr. B.K. Modi group that first introduced India to

mobile phone services and has interests in the field of telecommunications, office

automation and information technology and DISTACOM (Hong Kong)-a company

with over 20 years of experience in mobile communication which was responsible

for bringing mobile telephony to Hong Kong along with Hutchison Telecom.

Spice Telecom, which operates in Punjab circle with 621,234 mobile subscribers.

6.2 Escotel

Operates cellular phone services in state circles of Uttar Pradesh (West), Haryana

and Kerala. The company offers cellular services under the brand name of Escotel.

Which has 5,72000 mobile subscribers.

6.2Shyam Telecom

Which has its presence in basic and cellular telephony in Rajasthan with 1,16,224

mobile subscribers.

30

6.4 RPG Cellular

Is the cellular licensee for the Chennai Metro and operates under the brand name

"RPG Cellular".RPG today has a total of 150,284 mobile subscriber’s.

The RPG Group has promoted RPG Cellular Services Ltd (RCSL) in association

with two of the largest GSM cellular operators in the world - AirTouch

Communications Inc., U.S.A. and Vodafone Group Plc., UK.

AirTouch is one of the world's largest wireless communication companies with

global interests in cellular, paging and personal communications services. The

Company is the largest cellular service operator in the world with over 17 million

subscribers.

Vodafone is a leading global provider of mobile telecommunications services in

U.K. and Australia and several other countries across Europe and Asia and has

over 10 million customers worldwide. The Company also has participation in the

Globalstar Satellite Communication System.

6.5 Aircel Digilink India Limited

Provides cellular services in the circles of Haryana, Rajasthan and UP(East) under

the brand name "Essar" with GSM technology.

The Essar Group is one of India's leading business conglomerates, with an asset

base of over US$ 4 billion (Rs. 170 billion). The Group is committed to the

development of core sector and infrastructure businesses in India and abroad. Essar

Group is actively involved in five principal businesses viz., Steel, Shipping, Oil &

31

Gas, Power and Telecommunications.Each of Essar's businesses has been carefully

synergised with the others to form one single integrated whole.

The company uses world-renowned technology from Siemens in building and

operating its North Indian Network. ADIL offers a basket of GSM Phase I and

Phase II features. It offers voice, fax, data and other facilities.

Aircel Digilink India limited (ADIL), was incorporated in March 1995 and was

subsequently inducted into the Essar group in 1996.

UP (East) : ADIL launched its UP(East) services in May 1997.

Haryana : ADIL's services in Haryana commenced in June 1997.

Rajasthan : ADIL's services in Rajasthan were started in December 1996.Aircel

has a total of 459,936 mobile subscriber’s.

The company launched its pre-paid services under the brand name "Tring".

32

CHAPTER-7

THE MODE OF COMPARISION

(The So Called Brand Equity Ten)

The Brand Equity Ten (BET) is ten sets of measures, grouped into five categories,

which attempt to gauge the strength of the brand. These are qualitative measures,

whose credibility is based upon empirical evidence and a track record. The first

four categories represent customer perceptions of the brand along the four

dimensions of brand equity – loyalty, perceived quality, associations and

awareness. The fifth includes two sets of market behaviour measures.

This project, which intends to compare the brand equities of Hutch and Air Tel, is

based on the brand equity ten.

7.1 Loyalty measures

i) Price premium : A basic indicator of loyalty is the amount a customer

will pay for a product in comparison to other comparable products. A

price premium can be determined by simply asking consumers how

much more they would be willing to pay for the brand.

ii) Customer satisfaction / loyalty: Satisfaction or liking is a direct

measure of how willing customers are to stick to a brand. It can be

applied only to existing customers. The focus can be last use experience

or simply the use experience from the customer’s view.

33

7.2 Perceived quality and leadership measures

iii) Perceived quality: Perceived quality is one of the key dimensions of

brand equity and has been shown to be associated with price premium,

price elasticity, brand usage and stock return. This measure can be

applied across product classes and calculated by asking customers to

directly compare similar brands.

iv) Leadership and popularity: It has three dimensions. First, it reflects

the “number one” syndrome – the sales leader must have merit. Second,

leadership taps the dynamics of customer acceptance reflecting that

people want to be on the bandwagon are uneasy going against the flow.

Third, it can also tap innovation within a product class, that is, a brand

moving ahead technologically. This can be measured by asking

consumers about the product’s leadership position, its popularity and its

innovative qualities.

7.3 Association / Differentiation Measures

v) Perceived value: This dimension simply involves determining whether

the product provides good value for money and whether there are

reasons to buy this brand over competitive brands.

vi) Brand personality: This element is based on the brand- as-person

perspective. For some brands, the brand personality can provide links to

the brand’s emotional and self-expressive benefits as well as a basis for

customer relationships and differentiation. This will involve a set of

specific dimensions unique and relevant to the brand.

vii) Organisational Associations: This dimension considers the type of

organisation that lies behind the brand especially when brands are

34

similar with respect to attributes, when organisation is visible and when

a corporate brand is involved.

7.4 Awareness Measures

viii) Brand Awareness: Brand awareness reflects the salience of the

product in the consumers mind and involves various levels including

recognition, recall, brand dominance, and brand knowledge and brand

opinion.

7.5 Market Behaviour Measures

ix) Market Share: The performance of a brand as measured by the market

share often provides a valid and dynamic reflection of the brand’s

standing with customers. This is reflected from secondary data sources.

x) Market Price and Distribution Coverage: Market share can prove

deceptive when it increases as a result of reduced prices or promotions.

Calculating market price and distribution coverage can provide a more

accurate picture of the product’s true strength. Market share or sales

data are also extremely sensitive to distribution coverage. The gain or

loss of a major outlet or a move into another geographical region may

dramatically affect sales.

35

CHAPTER-8

FINDINGS

(Based on the Structured Questionnaire)

A sample size of 60 respondents was used for obtaining the information for this

study.

8.1 The Break Up:

The break up of the respondents is shown as follows on the basis of Age, Sex &

Occupation:

Age (Refer table 1)

15-25 66.67%

25-35 58.33%

35-45 3.33%

45 and above 1.66%

Sex (Refer table 2)

Males 75%

Females 25%

Occupation (Refer table 3)

Business 10%

Student 50%

Govt. Servant 15%

Housewife 0%

Self employed 6.67%

36

Others 18.33%

8.2 Cellular Connections And The Service Provider:

The first question of the study intends to find out about the Cellular

Connection and the service provider. Since the target segments are the cellular

users, all the respondents have cellular connections.

In terms of the service provider, the break up is –

Air Tel 32 53.33%

Hutch 28 46.67%

37

8.3 The Category Of Connection Used:

The second question is to find out the category of connection used.

Overall, the results show-

Post paid = 38.33%

Pre paid = 61.67%

This break up in terms of service providers is as shown. (Refer table- 4)

Hutch

Air Tel

Post paid 42.86%

Pre paid 57.14

Post paid 34.38%

Pre paid 65.63%

38

The results clearly show that there is a larger subscriber base in the pre-paid

segment, which is in consonance with the industry figures.

8.4 Reason For The Selection Of The Service Provider:

The third question intends to find out the reason for the selection of the

service provider - in other words, the consumer behaviour.

Air Tel (Refer table 5)

Awareness of the service provider 40.61%

Friends recommended 21.88%

Retailer influenced 6.25%

Advertisements influenced 12.5%

Market share of the service provider 0%

Other reasons 15.63%

Almost 41% at the Air Tel customers were aware of the service and so chose it.

Other reasons given by the respondents varied from gifts by relatives to company

provided phone. These accounted for 15.63% of subscribers.

Hutch (Refer table-5)

Awareness of the service provider 32.14%

Friends recommended 21.43%

Retailers influenced 14.29%

Advertisements influenced 14.29%

Market share of the service provider 3.57%

Other reasons 14.29%

39

Again, awareness of the service provider was the main determinant (32.14%) for

selection. The other reasons, which accounted for 14.29% of the customers, were

varied, like company provided to being a reliable service provider.

40

8.5 The Brand Awareness:

The fourth question was to check the brand awareness of the customers. It

would reflect the presence of the brand in their minds.

The options given were-

Hutch Airtel Idea MTNL

The service providers of Delhi are Air Tel, Hutch, Dolphin (MTNL) & Birla

AT&T. Only 30% of the customers were aware of this. (Refer table- 6).The

majority, 53.33% of the respondents, said that only Air Tel and Hutch operated in

Delhi. About 6.67% felt only Hutch operated, while another 5% felt only Air Tel

operated. The remaining 5% gave multiple options, which included both Air Tel

and Hutch.

41

8.6 The Customer Satisfaction:

The fifth question was to measure the customer satisfaction in terms of the service provided by the cellular operators (Refer table- 7).

Options Airtel Hutch

i) Very satisfied 9.37% 3.57%

ii) Satisfied 62.5% 60.71%

iii) Neither satisfied nor dissatisfied 28.13% 21.43%

iv) Dissatisfied - 7.14%

v) Strongly dissatisfied - 7.14%

In terms of satisfaction level, we have 9.37% of Air Tel customers who are very

satisfied compared to only 3.57% of Hutch. The majority of the subscribers are a

satisfied lot with 62.5% of Air Tel and 60.71% of Hutch.In terms of

42

dissatisfaction, Air Tel fared better with no subscribers dissatisfied while Hutch

had.

8.7 The Perceived Value:

The sixth question was to find out the perceived value in terms of the tariffs / rentals for the cellular services (Refer table- 8)

Tariffs/ Rentals Hutch Air Tel

1. Very high 25% 25%

2. High 42.86% 53.13%

3. Low - -

4. Cannot say 3.57 -

The observations from this question are that Air Tel is perceived to be expensive

by its customers. 53.13% of Air Tel’s customers consider the tariffs high,

43

compared to 42.83% of Hutch. The consistent responses by Hutch’s customers

show that they perceive it as a value -for - money service.

HUTCH TARRIFS—

The talk plans are devised to meet one’s budget and usage. Talk Flexi for example, reduces the applicable airtime rate as the usage increases. To complement the talk plans, they have also introduced a whole lot of Value Adds as well. Talk Flexi is a single tariff that’s based on the airtime that one could have used in a month. Which means, the more airtime he uses - the lower his applicable rate becomes. This plan was easy to understand and use. It still exists depending on the will of the Old customers, in particular. In this tariff plan, the system automatically calculates the minutes used in the home network and determines the applicable airtime rates. Myself is using Talk Flexi by paying monthly rentals of Rs. 295 only.

Minutes

used/month

Airtime rate/30 secs (Rs.)

Incoming/Outgoing

You Save

(%)

0 - 200 minutes Re. 0.99

200 - 350 minutes Re. 0.89 10%

350 - 450 minutes Re. 0.84

15%

450 - 550 minutes Re. 0.79 20%

550 - 650 minutes Re. 0.74 25%

44

> 650 minutes Re. 0.69 30%

THE NEW POSTPAID PRICE PLAN (APPLIED FROM 1 ST MAY, 2003)Talk349 Talk399 Talk599 Talk999 Talk1699

S. No. PARTICULARSMembership Fee(non refundable)

(Not Applicable for price plan change)1000 1000 1000 1000 1000

Volume Discount Rs. 150/month for 10 months

on airtime

Rs. 100/month for 12 months

on airtime

Rs. 150/month for 10 months

on airtime

NIL NIL

1 Monthly charges(compulsory)a.Rentals 349 399 349 349 349

b.Plan enrollment fee 250 650 1350

2 Monthly charges(optional)i. CLIP 49 49 49 49 49

ii. Itamized billing(o/g call details) 49 49 49 49 49

3 Pulse rate for local calls (in sec.) 60 60 60 60 60

4 Incoming call charges for all types of calls Nil Nil Nil Nil Nil

5 Outgoing Call charges( 60 sec. Pulse )5a). Local calls to GSM ( 60 sec. Pulse ) 1.75 1 0.5 0.5 0.45b). Local calls to Basic(F) & WLL-M( 60

sec. Pulse)1.99 1.99 1 0.75 0.6

5c). National long distance5ci). Calls to GSM

For any operator in India( 60 sec. Pulse) 1.99 1.99 1.99 1.99 1.99Free GSM to GSM STD call pulses 200 250

5cii). Call to Basic(F) & WLL-M( 60 sec. Pulse)

50-200KM 2.99 2.99 2.99 2.99 2.99201-500KM 2.99 2.99 2.99 2.99 2.99

>500KM 3.99 3.99 3.99 3.99 3.99

6 International long distance calls ( 60 sec pulse)

15.99 15.99 15.99 15.99 15.99

Free ISD call pulses 40

The above rates are all inclusive rates.

Service Taxes Extra.

Volume Discount is applicable on airtime and will not be carried forward.AIRTIME CHARGES FOR THE HUTCH PREPAY CARD (SPEED)

45

Outgoing call rate: 2.40 / 60 sec pulse.

All Incoming calls are set FREE from any network (i.e. GSM / Basic / WLL-M).

AIRTEL TARRIF-

Live moreMonthly Rental Rs. 245

Incoming & Outgoing Rs. 1.20/ 30 sec

Night – 10pm to 8 am & Sundays (Incoming/ Outgoing) Re. 0.25/30 sec

• Lowest monthly rental

• Lowest rates (night & sunday)

• Going mobile and are not sure of your level of usage? With the lowest monthly

rentals this plan is the one for you.

Call moreMonthly Rental Rs. 495

Incoming Re. 0.50/ 30 sec

Outgoing Rs. 1.25/ 30 sec

• Lowest Incoming rates

• Just the right plan if you are likely to receive more calls than you would make.

• If you need to be connectable all the time, by your family or for business then this

is the right plan for you

Speak moreMonthly Rental Rs. 295

Incoming/ Outgoing: Re. 0.99/ 30 sec

• Enjoy up to 30% off on your monthly airtime bills

• The more you speak, the less you pay.

• Just right if you are a heavy user, who is likely to receive and make more calls

46

AirTel StandardMonthly Rental Rs. 475

Incoming & Outgoing Rates (per 30 seconds)

Std Hours(0900 hrs - 2000 hrs) Rs. 4.00

Concession Hrs I(2000 hrs - 0900 hrs) Rs. 1.50

Sundays & National Holidays (all 24 hours) Rs 1.50 for 24 hrs.

Weekdays are Monday to Saturday. National Holidays are 15th Aug, 26th Jan

& 2nd Oct. The billing pulse is 30 seconds on all days.

When the Incoming Calls are set FREE from any network then, The Air Tel

launches Freedom Plans to give the customers freedom from incoming call

charges:

THE FOUR FREEDOM PLANS (APPLIED FROM 1 ST MAY, 2003)  Freedom 349 Freedom 599 Freedom 999 Freedom 1699Monthly Rental (Rs.) 349 599 999 1699Outgoing/min 1.99 0.5 0.5 Nil

Incoming/min From any mobile* Others

Nil 0.5

Nil 0.5

Nil Nil

Nil Nil

Free Mobile to Mobile* STDmin/month     50 min 100 min

Free ISD min/month (Airtime+ISD access charges)       25 min

ISD Discounts (Airtime+ISD access charges) 20% 20% 20% 20%

* Interconnect charge as per Telecom Regulatory Authority of India’s order.

Applicable on calls from all major GSM / Basic / WLL-M operators.

Rates applicable on 60 secs. Pulse.

AIRTEL MAGIC AIRTIME RATES

Outgoing calls : Rs. 2.40 per 60 seconds

47

Incoming calls: Free from any services anytime

8.8 Price Premium:

The next question intends to find out the loyalty measures in terms of price

premium, i.e. the price the customer will pay for the brand in comparison to

other brands. The question asked was, “if your service provider increases the

tariffs / rentals but gives more value added services, what would you do?”

The comparison of results between Air Tel and Hutch (Refer table- 9)

Options Air Tel Hutch

(1) Continue with the same company 34.38% 46.43%

(2) Continue with the same company even if you are dissatisfied

15.63% 14.29%

(3)Change over to the other company 37.5% 35.71%

(4)Discontinue using cellphones altogether 12.5% 3.57%

48

With all incoming calls from all sources is set Free from 1 st of May. That’s a lot of

services to attract people. As the Remarks marked by a loyal customer when asked

about the services of the Air-Tel (in his own words):

Air Tel in Delhi is a cellular provider. It belongs to Bharti Telecom. I don’t like

the Bharti group. However, Air Tel service is good.

* Their network coverage is adequate in Delhi.

* Customer service is not too bad

* Billing is nominal and I don’t think they overcharge or cheat while Billing.

* They provide Email facility on their cell phone, which is really good.

* They send us reminders etc. of our bills on the cell phone itself, they don’t bug

with mails in the postbox.

* All in all I am impressed and satisfied with their service.

Network quality: Good--Works even in congested areas

Billing: Never had any disputes

Service and Support: Helpful.

Almost same answer has been given by one of the loyal customers of the Essar

Cell phone (Hutch) with some negligible change. He provided the following

information:

Hutch is the best in Delhi as a cellular provider. I like its Punch Line. It is so

simple as one is offering someone the most valuable thing in the world i.e.;

“SMILE”. I simply like Hutch, the most, because;

49

* Their network coverage is adequate in Delhi.

* Customer service is also good.

* Billing is nominal and I don’t think they overcharge or cheat while Billing.

* They provide Email facility on their cell phone, which is really good.

* I am really impressed and satisfied with their service.

Network quality: Very good--Works even in congested areas

Billing: No problem occurred yet.

Service and Support: Helpful, a bit.

The TRI* M model (used by MBL Techno Search) used in the research to

measure the performance of the cellular providers employs an interesting

classification to map the cellphone users. The quadrants for this model are

satisfaction on the Y-axis and loyalty on the X-axis.

Continue with the same company – APOSTLES

Dubbed apostles, their satisfaction is high and also loyalty is high. They are

highly contented, loyal customers whose contact with potential customers

is more valuable than that of any sales person.

Continue with the same company, even if you are dissatisfied –

HOSTAGES

Dubbed hostages, their satisfaction is low, but loyalty is high. These are

dissatisfied customers who are still loyal. They are major targets for new

entrants.

50

Change over to the other company –MERCENARIES

Dubbed mercenaries, their satisfaction is high, but loyalty is low. They are

the satisfied customers who are not loyal and tend to ‘shop around’ and

compare. They are always on the lookout for a better opportunity.

Discontinue using cell phones all together – TERRORISTS

Dubbed terrorists, their satisfaction as well as loyalty is low. They are

customers who are unhappy with the company and tell everybody about

their bad experience.

HUTCH

AIR TEL

51

Satisfaction

MERCENARIES35.7%

(satisfaction high, loyalty low)

APOSTLES 46.43%

(satisfaction high, loyalty high)

TERRORISTS 3.57%

(satisfaction low, loyalty low)

(satisfaction high, loyalty High)

HOSTAGES 14.29%

(satisfaction low, loyalty high)

Loyalty

From the findings, we see that brand loyalty is higher for Hutch users and they are

willing to pay a price premium for it. Their respondents are 46.43% to Air Tel’s

34.38%. They (The loyal Customers) are a valuable asset for the service provider.

But in terms of dissatisfied customers continuing with the same company, Air Tel

leads with 15.63% to Hutch’s 14.29%. Not much of difference here.

52

Satisfaction

MERCENARIES37.5%

(satisfaction high, loyalty low)

APOSTLES 34.38%

(satisfaction high, loyalty High)

TERRORISTS 12.5%

(satisfaction low, loyalty low)

HOSTAGES15.63%

(satisfaction low, loyalty high)

Loyalty

There is a marked difference between Air Tel and Hutch in terms of those

customers whose satisfaction as well as loyalty is low. The "terrorists" account for

12.5% in Air Tel while Hutch has only 3.57% of them.

Air Tel in spite of being the market leader will have to control its “mercenaries”

and “terrorists”, which Hutch can target. With the possibility of a fourth player

coming in, it should worry the company.

8.9 The Perceived Quality:

Another question intends to find out the perceived quality of the cellular

service provider, by giving ratings on different parameters of the service.

Air Tel Hutch

Clarity 3.3 3.5

Ease of connectivity 3.5 3.1

Network 3.3 3.1

Customer Service 3.3 3.4

Value added services 3.6 3.4

The semantic differential scale shows the differences in perceived quality between

the two service providers. Air Tel edges out Hutch in terms of connectivity,

network and value added services. There is not much of difference in the ratings

because the respondents mostly gave average ratings.

53

8.10 The Leadership And Popularity:

The next question was framed to find out the leadership and popularity

dimensions of the two brands from the respondents. It reflects the “number

one” syndrome and leadership taps the dynamics of customer acceptance. The

question gives a clue about Delhi’s subscriber base (more than 5 lakhs) and

seeks the opinion of the respondents on the subscriber base of the two

operators.

The correct figures for Air Tel is 3.28 lakhs (3-4 lakhs) and Hutch is 2.18 lakhs (2-

3 lakhs). The survey shows that 35% of the respondents were right in giving Air

Tel’s subscriber base (3-4 lakhs) while 41.67% of them answered correctly for

Hutch (2-3 lakhs), (Refer table-10.1). For Air Tel, 40% of respondents felt that it

lies in the 2-3 lakhs bracket while for Hutch, 30% felt it lies in the 1-2 lakhs

bracket.

54

The response when considered from the company subscriber’s view gives

interesting findings [Refer table- 10.2(a)]. Almost 43.75% of Air Tel’s subscribers

were right (3-4 lakhs), while 40.63% thought it was between 2-3 lakhs. From

among the same respondents (Air Tel subscribers), 46.88% rightly said Hutch’s

subscriber base is between 2-3 lakhs. Another 40.63% said it is between 1-2 lakhs.

The responses from Hutch Cellphone users were also as interesting. [Refer table-

10.2(b)] The correct answer of 2-3 lakhs was chosen by 35.71% of respondents.

The remaining were distributed between the other choices. But when selecting Air

Tel’s subscriber base, only 25% could give the correct answer (3-4 lakhs). A

majority, 39.29% felt it is between 2-3 lakhs.

Overall, one thing is clear though - respondents perceive that Air Tel is the market

leader. It is shown by the fact that 75% of respondents allotted the subscriber base

between 2-4 lakhs. For Hutch, 71.67% allotted the subscriber base between 1-3

lakhs.

55

8.11 The Brand Personality:

The next question was put as an open-ended question for the respondents. It is

basically to find the brand personality, which provides links to the brand’s

emotional and self-expressive benefits as well as a basis for customer

relationship and differentiation.

Being an open-ended question, varieties of responses were obtained. Respondents

were asked to write what come to their mind when they thought of Air Tel &

Hutch.

Hutch

A majority of the respondents said that Hutch was a cellular service provider of

Delhi. The other responses were divided. For many it was their mobile phone

company. Hutch’s advertisements about its low rentals also had many takers who

felt that Hutch was giving value for money by its rentals. Some respondents said

that Hutch was a good competitor with Air Tel, even though it was the No.2

Company. Other responses were clear and swift service, emotional feeling, makes

the world more compact that brings relationship closer and makes things easy,

positive attitude as a rival company, etc.

Hutch, in spite of being the follower in terms of market share, comes across as a

sincere and competent brand.

56

Air Tel

A majority of the respondents said that the advertisements of Air Tel came to their

mind when they thought of Air Tel. The print and media advertisements – "Touch

Tomorrow" and "Good Life", were recalled. Interestingly, some respondents could

quote the exact word used in the TV advertisements – “Sawaal life ka ho, ya

lifeline ka” and “It’s a girl ! – Bharti / Air Tel.” Another common response was

that Air Tel is a good service provider, if not the best. Some just thought of it as

their mobile phone company. The other responses were service provider that helps

connect people, technically advanced company, good coverage, power to connect

people, making communication easy, user friendly, etc. One respondent even said

Mr. Sunil Mittal (Chief of Bharti Enterprises) comes to his mind. Overall, Air Tel

comes across as a competent and exciting brand.

8.12 The Organizational Associations:

The next question was framed to find out the organizational associations and

also the brand awareness. Giving five different captions of different

companies, including Air Tel and Hutch did this. Respondents had to figure out

the correct ones – Touch Tomorrow (Air Tel) and Smile (Hutch).

Many respondents had given multiple answers and that posed problems for

evaluation. Nonetheless, 66.67% of respondents were correct in choosing Air Tel’s

caption – “Touch Tomorrow.” Interestingly, about 31.67% of respondents felt that

Connecting People (Nokia’s caption) was Air Tel’s caption. For Hutch’s caption –

“Smile”, 61.67% of the respondents answered correctly. The remaining was

distributed among the other captions.

Comparing both the cellular operators, it is seen that Air Tel’s advertising message

is being passed on better to the people than Hutch’s – though just marginally more.

So the brand as an organization is relevant and visible to the people.

57

There are Two More Sets of brand equity ten under market behaviour measures,

which have not been included in the questionnaire. These two require secondary

data, unlike the previous eight.

Market share

In the Delhi market, Air Tel is the market leader with 3.28 lakh subscribers (as on

March end 2001). Hutch had 2.18 lakh subscribers (as on March end 2001).

Market price and distribution coverage

The market price of the cellular service by the two operators – Air Tel & Hutch,

is more or less the same.

58

CHAPTER-9

AN ANALISYS AFTER COMPARISON

Comparing Hutch and Air Tel on the Brand Equity Ten, the following points can

be taken note of:

i. Price Premium

Hutch leads in terms of satisfied and loyal customers willing to pay a price

premium. Air Tel leads with loyal but dissatisfied customers.

ii. Satisfaction/Loyalty

In terms of satisfaction, Air Tel leads with both very satisfied as well as

satisfied customers. Dissatisfaction level is low.

iii. Perceived Quality

Here again, Air Tel edges out Hutch in terms of connectivity, network and

value added services. Hutch leads in terms of clarity of sound and customer

service.

iv. Leadership and Popularity

The results showed that majority of respondents chose Air Tel as the company

with larger subscriber base compared to Hutch. This reflected the “number

one” syndrome where the leader must have merit.

59

v. Perceived Value

The consistent responses by Hutch users show that they perceive it as a value-

for-money service. Air Tel is perceived to be expensive by its customers.

vi. Brand Personality

The brand personality of Air Tel comes across as an exciting and competent

brand. Its vibrancy appeals to the customers who relate to the advertising

messages. Hutch comes across as a sincere and competent brand, which in spite

of being a follower gives Air Tel a run for its money. So both have their own

distinct brand personality.

vii. Organizational Associations

Air Tel’s corporate brand is more visible than Hutch. More respondents

recognised the caption of Air Tel – Touch Tomorrow, than Hutch’s - Smile.

viii. Brand Awareness

Brand awareness of the respondents was high with most being aware of both

Air Tel and Hutch. So the spoils are even for both the operators here.

ix. Market Share

The information obtained from secondary data shows that the Air Tel is a clear

market leader in Delhi with 3.28 lakhs subscribers to Hutch’s 2.18 lakhs.

x. Market price and Distribution Coverage

The market prices of the cellular service given by Hutch and Air Tel are very

similar. The difference if any is very marginal and is not considered. Also the

distribution coverage is properly established. Therefore, there is not much to

choose between the two operators and the spoils are even.

60

Comparing the overall findings we see that Air Tel leads in five brand equity

measures (satisfaction/loyalty, perceived quality, leadership & popularity,

organizational associations, market share) while Hutch leads in two measures

(price premium, perceived value). The other three measures (brand personality,

brand awareness, market price and distribution coverage) have been shared.

61

CHAPTER-10

A NOTE ON THE CUSTOMERS’ RESPONSE

While talking with consumers regarding their views on the cellular services

providers’ marketing strategies and the current trend of the emerging price illusion

that has made them, the consumer, a bit indifferent while choosing for the efficient

cellular providers. It has brought forward the strong consumer movement to be led

by the consumers’ association designed for the purpose.

The telephone consumer movement in India is quite weak. In the years of the

government monopoly the service use to be terribly unsatisfactory and almost all

important cities used to have telephones subscribers association mainly comprising

of versed business men bitterly complaining against the poor service to the

telephone department, member of parliament and ministers.

In last few years both because of competition and large scale of moderanisation

(digital, electronic exchanges, jelly-field under ground cable for subscribers

network, optical fiber and micro wave radio system for junction and intercity

network computarisation etc.) have proved to be fruitful in improving the services.

However, the questions rose from knowledgeable consumer, which provides us the

fact about costs and quality of service that still need a lot of improvement in the

quality of service and the rates that are charged.

The knowledgeable consumer movement and the association working in the field

without any “profit-as their target”, they have to have analysts and researchers but

this requires finances. The company must take a friendly attitude to properly

organized research and staffed consumers’ associations as a countervailing power

for such forces which within any company or system tend to neglect consumer

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welfare, costs and of course the quality of service. Ultimately unlimited

competition is the remedy. But that may take a long time to come.

Since the supplier evolve scores of segmented price service packages, it really

become very difficult for the individual customer to choose the most beneficial

price package. It could be one of the functions of the consumers association to

bring information bulletin in this regard in cooperation with the service provider.

Technologies like CDMA-WLL are reducing capital costs to provide the last mile

connectivity, that is access or connection of the users communications terminals

(telephones, PBX, PC, TV with set top box) to the telecom network. The costs for

cellular mobile system are also coming down. Competition from the most efficient

is driving down the prices for customer. But apparently to protect the inefficient,

the regulator is fixing floor prices for services. This will thwart the passing of the

benefit of the competition by way of reduce prices to the customers.

In telephone unsaturated country like India, where we have a long tradition of

monopoly and manipulations, policies need to be continuously revised in relation

to the realities that are brought forth as a result of liberalisation, demonopolisation

and competition. Telecom and information technology policies are changed

frequently in tune with the furious technological changes taking place.

Therefore, we should not be deterred from revising existing policies often. In the

light of experiences and emerging new technologies and the need arising from

rapidly integrating and international economies of trade, there must be fairness as

between competitors and also fairness for consumers.

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CONCLUSION

With the steep fall in the cost of providing cellular services, and increasing

deregulation and competition, developing countries are witnessing rapid growth in

cellular subscriber base. Indian cellular industry has been witnessing a

Compounded Annual Growth Rate of about 105.2%. It is a $5 billion industry

today, and the cellular subscriber base in the country has increased to 6.4 million

from a mere 28,550 in 1996. According to reports, Indian mobile subscriber base is

expected to grow to 15.68 million in the current year, i.e.; 2003. However, the

penetration rate of cellular services is very poor in developing countries. In India,

the cellular density is 0.56 per 100 population compared to 77.84 in Finland.

Economic conditions, market structure, policies regarding tariffs and interconnect

agreements, and customer characteristics are some of the significant forces

affecting the growth of cellular services. Since it takes about 3-4 years for cellular

operators to attain financial payback on their projects, estimates of market size can

be useful for network and investment planning. Qualitative narratives and

descriptive statistics of the cellular sector for many countries are available from a

variety of industry sources. However, rigorous empirically based studies of cellular

market growth are much more limited in number.

Moreover, these studies do not provide much insight into the mechanics of growth

in cellular markets. Such insights can inform policymakers about the process by

which growth occurs and help develop policies that can improve cellular

penetration in developing countries. They are also useful to service providers in

planning their network rollouts and services in the face of market competition.

With the introduction of new providers, the incumbents face erosion of their

subscriber base. They can take preemptive measures to improve the quality of their

services offerings, reduce prices and increase the breadth of their service offerings.

The new operators have to battle against the advantages of the incumbents such as

64

existing subscriber base, economies of network operations, network infrastructure

and their financial strength.

There are other idiosyncrasies that may also need to be considered. In case of India

for instance, some of the entities that have received licenses to operate as the fourth

operator in metro areas, have prior cellular network provisioning experience in

selected parts of the country. They can reduce the roaming charges when the

subscriber roams in the operator's other areas. Further, the government owned third

operator, was erstwhile monopoly operator in basic and domestic long distance

services. This operator has extensive long distance network and a sound financial

base that will enable them to cross-subsidize the cellular service and reduce prices.

65

RECOMMENDATIONS

Satisfaction levels of Hutch customers are comparatively lower than Air

Tel customers. They should introduce reward-based schemes for its

customers.

The company should build the brand on its price platform, where it enjoys

an advantage over Air Tel in terms of customer’s perceptions.

The advertising for its pre-paid brand, SPEED is very negligible. This

should be pushed aggressively as the pre-paid segment is the largest

growing in the market.

Now in the market there is not much differentiation in terms of the basic

mobile service. The only way to stand out is to give more onus on the

Value Added Services (VAS) like WAP where Hutch is the pioneer.

Hutch should focus on those customers whose satisfaction is high but low

loyalty. Loyalty based programs should be introduced, which the company

has introduced now in terms of Rewards programmes. Also an alarming

proportion of its customers are those with low satisfaction and low loyalty.

This category poses a threat and their loyalty should be established.

The company together with the consumers’ associations should agitate that

the revenue share must be abolished as they were imposed not to pay for

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the subsidizing some, not so affluent telephone users or for putting public

telephones in villages.

A cellular becomes more and more useful as its reach increases, that is,

more are connected to network, and then the revenue share so utilized has

atleast a redeeming feature. Only then the cellular prices can be brought

down to make it available to the maximum number of the users.

Adding more customers to the network to enhance the network value to

users or by abolition or reduction of prices and there more people affording

the service.

The reach ness of service must be deepened so as to make a list of strong

and loyal customers, which will be proved successful while making

advertisement through indirect channel.

The cost of the affordability of the cellular services should be brought

down as such to provide a chance to more people in general that can help in

broadening of the customer bases.

The cost should be designed in such a way that can give a look of benefit or

rather profit, if any consumer tries take the comparison with the landline

tariff.

Try to create the need with the help of its advertisement campaign to make

it for more usage.

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REFERENCES

Managing Brand Equity: Capitalizing on the value of a brand name – David

A Aaker (The Free Press – 1991)

Building Strong Brands – David A. Aaker

(The Free Press – 1996)

Strategic Brand Management – Jean Noel Kapferer

(Kogan Page – South Asian Edition 2000)

The Economic Times 1ST May2001, etc

Businessworld 7TH May 2001

Business Today 5th Jan 2003

Company brochures of Air Tel

Company brochures of Essar Cellphone

The Internet (World Wide Web)www.coai.com

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Annexes provide supporting information and details.

Statistics

City/Circle Operators Oct'2002 Nov'2002 Dec'2002

Metros Delhi Bharti Cellular 791637 813445 834269Hutchison Essar 555586 574205 580328

MTNL 126980 128132 129809Idea Cellular 75384 128306

1474203 1591166 1672712Mumbai BPL Mobile 556871 564082 573877

Hutchison Max 573365 594996 615836MTNL 107493 107652 110279

Bharti Cellular 177403 199281 2123041415132 1466011 1512296

Chennai RPG Cellular 150284 156775 166305Bharti Mobinet 180126 183134 200728

Hutchison Essar 40120 50199 51832370530 390108 418865

Kolkata Bharti Mobitel 167728 178893 188237Hutchison Telecom 231719 240734 247327

BSNL 13338 15062 14997412785 434689 450561

All Metros 3672650 3881974 4054434

A' Circle Maharashtra BPL Cellular 195270 195340 198045Idea Cellular 391229 402273 396503

Bharti Cellular 88588 98660 105209BSNL 12270 58338 127980

687357 754611 827737Gujarat Fascel 388754 402900 420255

Idea Cellular 225026 231410 240211Bharti Cellular 45929 61208 62926

BSNL 7000 39500 75350666709 735018 798742

A.P. Idea Cellular 313394 312883 308210Bharti Mobile 302896 304293 305879

Hutchison Essar 44628 50664 53489BSNL 24541 72675

660918 692381 740253Karnataka Bharti Mobile 306718 317390 329219

Spice Comm. 200619 199294 199391Hutchison Essar 41395 50220 55195

BSNL 21503 65779548732 588407 649584

T.N. BPL Cellular 155370 157233 159422Aircel Limited 198116 222551 229214Bharti Cellular 70742 73278 75048

BSNL 6833 14071 35333431061 467133 499017

A' Circle 2994777 3237550 3515333B' Circle Kerala Escotel Mobile 245052 244636 244032

BPL Cellular 147809 147884 147969Bharti Cellular 60484 64116 66379

BSNL 6032 36761 73084459377 493397 531464

Punjab Spice Comm. 410498 421940 436255Bharti Mobile 176906 203823 231724

BSNL 446 22666 58780587850 648429 726759

Haryana Escotel Mobile 102371 102697 96498Aircel Digilink 19643 18397 16580Bharti Cellular 35799 42137 45664

BSNL 105 13131 36632157918 176362 195374

U.P.(W) Escotel Mobile 218227 222869 227980

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Koshika NA NA NA

Bharti Cellular 57260 61905 62960BSNL 14228 31916

275487 299002 322856U.P.(E) Aircel Digilink 93383 102455 109988

Koshika NA NA NABSNL 7364 24770 61305

100747 127225 171293Rajasthan Aircel Digilink 33064 32460 29766

Hexacom 104306 108107 111556BSNL 708 14798 38322

138078 155365 179644M.P. Idea Cellular 120370 125138 131113

Reliance Telecom 139918 143421 146772Bharti Cellular 25407 27512 28282

BSNL 7174 19000 28018292869 315071 334185

W.B. Reliance Telecom 57683 65734 70511BSNL 100 6136 18137

57783 71870 88648B' Circle 2070109 2286721 2550223

C' Circle H.P. Bharti Telenet 23879 25364 25730Reliance Telecom 8480 8347 8096

BSNL 4950 1104632359 38661 44872

Bihar Koshika NA NA NAReliance Telecom 136201 151373 164075

BSNL 17952 18393 24987154153 169766 189062

Orissa Koshika NA NA NAReliance Telecom 57441 61587 62992

BSNL 7995 1535357441 69582 78345

Assam Reliance Telecom 37675 39161 4072837675 39161 40728

N.E. Reliance Telecom 6771 7128 7433Hexacom Nil Nil Nil

6771 7128 7433C' Circle 288399 324298 360440

Oct'2002 Nov'2002 Dec'2002All India 9025935 9730543 10480430

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QUESTIONNAIRE

1. Name:………………………………………

2. Age:

15-25 25-35 35-45 45 and above

3. Sex:

Male Female

4. Occupation:

Businessman Govt. Servant Self-employed

Housewife Student Others

5. Which cell phone-service you are using?

Hutch Air Tel Idea MTNL

6. Which service of Hutch you are using now?

Pre Paid Post Paid

5. What did you consider most while going for the cellular services?

Awareness of the Service Providers Recommended by Friends

Advertisement Retailer Influenced

Market Share of the service Providers Any other reason

8. How do you rate your Satisfaction Level?

Very Satisfied Satisfied Neither Satisfied Nor Dissatisfied

Dissatisfied Strongly Dissatisfied

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9. Rate the Quality of services you are using:

Reception Ease of Connectivity Network

Customer Service Value Added Services

10. What about the Rental Plans?

Very high High Niether high nor low

Moderate Low Cann’t say

11. If your service provider increases the tariffs / rentals but gives more value

added services, what would you do?

Continue with the same company

Continue with the same company even if you are dissatisfied

Change over to the other company

Discontinue using cellphones altogether

12. Any Suggestion, Please!

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