Project Number: 813999 Project Acronym: WindMill Project ...
Chiranth project
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Transcript of Chiranth project
HRIHE, HASSAN
EXECUTIVE SUMMARY
Idea is the flagship that comes from Idea Cellular Limited - a part of the biggest
private integrated telecom conglomerate, Idea Enterprises. Idea Enterprises has been at the
forefront of technology and has revolutionized telecommunications with its world class
products and services. Established in 1976, Idea has been a pioneering force in the telecom
sector with many firsts and innovations to its credit. Idea strives hard to make the quality of
your life better to its esteem customers. For them customers are unique, and so are their
needs. And because of its customers individuality they have a set of services pertinent to its
them!
Each of the department namely, Marketing, Finance, HR, and production are studied
in depth in order to understand the correct working of the department in the context of its
organization structure. The Marketing and HR department of the company was
impressive .The way they handle the issues, the way they market the products, the
relationship maintained by them with their dealers, the excellent distribution network which
they have and the counseling and importance given to the employee, the leave encashment
system and their ability to raise the ale capacity was very striking.
The ability to deliver goods quality product and services has resulted in the growth of
the company. They consistently high quality service every time, which in turn brings
customer back. Idea cellular tries to understand the needs of it customer and upgrade the
qualities of it product for increased customer satisfaction. The company’s main aim I to
create a better and safer environment for all. Keep itself abreast of latest international
standard and practices in all the fields.
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CONTENTS
PAGE NO.
1. INDUSTRY PROFILE 3
2. COMPANY PROFILE 17
3. MCKINSEY’S 7S FRAMEWORK 35
4. SWOT ANALYSIS 42
5. ANALYSIS OF FINANCIAL PERFORMANCE 44
6. FINDINGS AND SUGGESTIONS 50
7. CONCLUSION 54
8. LEARNING EXPERIENCE 56
9. BIBLIOGRAPHY 57
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INDUSTRY PROFILE:
INDUSTRY OVERVIEW
Background
The Indian Telecommunications network 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. The telecommunication sector continued to register significant success during
the year and has emerged as one of the key sectors responsible for India’s resurgent India’s
economic growth.
Growth
This rapid growth has been possible due to various proactive and positive decisions of
the Government and contribution of both by the public and the private sector. The rapid
strides in the telecom sector have been facilitated by liberal policies of the Government that
provide easy market access for telecom equipment and a fair regulatory framework for
offering telecom services to the Indian consumers at affordable prices.
Wire line Vs Wireless
It has also undergone a substantial change in terms of mobile versus fixed phones and
public versus private participation. The preference for use of wireless phones has also been
predominant in the sector. Participation of the private entities in the telecom sector is rapidly
increasing rate there by presenting the enormous growth opportunities. There is a clear
distinction between the Global Satellite Mobile Communication (GSM) and Code Division
Multiple Access (CDMA) technologies used and the graph below shows the divide between
the two.
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Segment wise Status
Wire line Services
With increasing penetration of the wireless services, the wireline services in the
country is becoming stagnant. On the other hand, Broadband demand has picked up and
promises to stabilise fixed line growth.
GSM Sector
In terms of the Global System for Mobile Communication (GSM) subscriber base this
now places India third after China and Russia.China had 401.7 million GSM subscribers
CDMA Services
CDMA technology was introduced in India as a limited mobility solution. The
introduction of CDMA services has created competition, lowered tariffs and offered many
citizens access to communication services for the first time
Internet Services
Internet services were launched in India on August 15, 1995. In November 1998 the
government opened up the sector to private operators. A liberal licensing regime was put in
place to increase Internet penetration across the country. The growth of IP telephony or grey
market is also a serious concern. Government loses revenue, while unlicensed operation by
certain operators violates the law and depletes licensed operators market share. New services
like IP-TV and IP-Telephony are becoming popular with the demand likely to increase in
coming years. The scopes of services under existing ISP license conditions are unclear.
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Manufacture of Telecom Equipment
Rising demand for a wide range of telecom equipment, particularly in the area of
mobile telecommunication, has provided excellent opportunities to domestic and foreign
investors in the manufacturing sector. The last two years saw many renowned telecom
companies setting up their manufacturing base in India. Ericsson has set up GSM Radio Base
Station Manufacturing facility in Jaipur. Elcoteq has set up handset manufacturing facilities
in Mysore. Nokia set up its manufacturing plant in Chennai. LG Electronics set up plant of
manufacturing GSM mobile phones near Pune.
The Government has already set up Telecom Equipment and Services Export
Promotion Forum and Telecom Testing and Security Certification Centre (TETC). A large
number of companies like Alcatel, Cisco have also shown interest in setting up their R&D
centers in India. With above initiatives India is expected to be a manufacturing hub for the
telecom equipment.
POLICY AND INITIATIVES
Regulatory Framework
The Telecom Regulatory Authority of India (TRAI) was set up in March 1997
as a regulator for Telecom sector. The TRAI’s functions are recommendatory,
regulatory and tariff setting in telecom sector.
Telecom Disputes Settlement and Appellate Tribunal (TDSAT) came into existence in
May, 2000. TDSAT has been empowered to adjudicate any dispute –
Between a licensor and a licensee
Between two or more service providers
Between a service provider and a group of consumers
Hear and dispose of appeal against any direction, decision or order of TRAI
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Tariffs for telecommunication services have evolved from a regime where tariffs were
determined by Telecom Regulatory Authority of India to a regime where tariffs are largely
under forbearance. TRAI intervenes by regulating the tariffs for only those services, the
markets of which are not competitive.
Universal Service Obligation Fund (USOF) exclusively for meeting the Universal
Service Obligation was established in April, 2002. The Universal Service Levy is presently 5
per cent of the Adjusted Gross Revenue (AGR) of all telecom service providers except the
pure value added service providers like Internet, Voice Mail, E-Mail service providers etc.
Indian Telegraph Act has been amended in October’2006 to provide support for all telegraph
services including mobile and broadband to bridge the digital divide. With the introduction of
the Unified Access Licensing Regime, operators can offer telecom access services to
consumers in a technology neutral manner, subject to fulfilling certain conditions.
Introduction of this regime has also broken the legal/regulatory impasse between the cellular
and basic service providers. Issuance of Intra-Circle Merger and Acquisition Guidelines
provide investors an opportunity to take stakes in existing telecom operations.
Government Initiatives
The Government has taken the following main initiatives for the growth of the Telecom
Sector:
• All telecom services have been opened up for free competition for unprecedented
• growth
• 217 (Information Technology Agreement) ITA-I items are at zero Customs Duty.
• Specified capital goods and all inputs required to manufacture ITA-I, items are at zero
• Customs Duty
• Availability of low cost mobile handsets
• The international Long Distance Services (ILDS) opened with effect from April 2002.
• Calling Party Pays (CPP) regime was implemented with effect from 1st May
• Guidelines for Unified Access Service License regime were issued in November
2003,
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• 27 licenses out of 31 Basic Service Licenses were converted to Unified Access
Service Licenses
• In April 2004, license fee for Unified Access Service Providers (UAS) was reduced by
2 per cent
• License fee for infrastructure Provider-II reduced from 15 per cent to 6 per cent of the
• Adjusted Gross Revenue and spectrum charges between 2 to 4 per cent in June 2004
• Entry fee for NLD licenses was reduced to Rs. 2.5 Crore from Rs. 100 Crore. Entry
fee for ILD reduced to Rs. 2.5 Crore from Rs. 25 Crore
• Lease line charges have been reduced to make the bandwidth available at competitive
prices to facilitate growth in IT enabled services
• One India plan i.e. single tariff of Re. 1/-per minute to anywhere in India was
introduced from 1st March 2006 by the Public Sector Undertakings. This tariff was
emulated by most of the private service providers also. This scheme has led to death
of distance in telecommunication and is going to be instrumental in promoting
National Integration further
• The robust telecom network has also facilitated the expansion of BPO industry that is
having 500,000 employees now and adding 400 employees per day.
• Annual license fee for National Long Distance (NLD), International Long Distance
(ILD), Infrastructure Provider-II, VSAT commercial and Internet Service Provider
ISP) with internet telephony (restricted) licenses was reduced to 6 per cent of
Adjusted Gross Revenue (AGR) with effort from Jan 2006.
• The Government’s policy is neutral on use of technology by telecom service providers
subject to availability of scarce resources such as spectrum etc.
• Licence Fees 6-10 per cent of Adjusted Gross Revenue (AGR)
Foreign Direct Investment Policy
Foreign Direct Investment (FDI) was permitted in the telecom sector beginning with
the telecom manufacturing segment in 1991 - when India embarked on economic
liberalisation. FDI is defined as investment made by non-residents in the equity capital of a
company. For the telecom sector, FDI includes investment made by Non-Resident Indians
(NRIs), Overseas Corporate Bodies (OCBs), foreign entities, Foreign Institutional Investors
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(FIIs), American Depository Receipts (ADRs)/Global Depository Receipts (GDRs) etc.
Present FDI Policy for the Telecom sector:
• In Basic, Cellular Mobile, National Long Distance, International Long Distance, Value
Added Services and Global Mobile Personal Communications by Satellite, FDI is limited
to 49 per cent (under automatic route) subject to grant of licence from the Department of
Telecommunications and adherence by the companies (who are investing and the
companies in which investment is being made) to the licence conditions for foreign equity
cap and lock-in period for transfer and addition of equity and other license provisions.]
• Foreign Direct Investment up to 74 per cent permitted, subject to licensing and
security requirements for the following:
- Internet Service (with gateways)
- Infrastructure Providers (Category II)
- Radio Paging Service
• FDI up to 100 per cent permitted in respect to the following telecom services:
- ISPs not providing gateways (Both for satellite and submarine cables)
- Infrastructure Providers providing dark fibre (IP Category I)
- Electronic Mail
- Voice Mail
The above is subject to the following conditions:
- FDI up to 100 per cent is allowed subject to the condition that such companies
would divest 26 per cent of their equity in favour of Indian public within 5
years, if these companies are listed in other parts of the world.
- The above services would be subject to licensing and security requirements,
wherever required.
- Proposals for FDI beyond 49 per cent shall be considered by Foreign Investment
Promotion Board (FIPB) on a case-to-case basis.
• In the manufacturing sector 100 per cent FDI is permitted under the automatic route.
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• In Basic, Cellular Mobile, paging and Value Added service, and Global Mobile Personal
Communications by Satellite, FDI is permitted up to 49 per cent (under automatic route)
subject to grant of license from Department of Telecommunications
• Foreign direct investment up to 74 per cent permitted, subject to licensing and security
requirements for the Internet Service (with gateways), Infrastructure Providers (category-
II), Radio Paging Service
• FDI up to 100 per cent permitted in respect of
- ISPs not providing gateways (both for satellite and submarine cables),
- Infrastructure Providers providing dark fibre (IP Category I);
- Electronic Mail; and
- Voice Mail
• FDI up to 49 per cent is also permitted in an investment company, set up for making
investment in the telecom companies licensed to operate telecom services. Investment by
these investment companies in a telecom service company is treated as part of domestic
equity and is not set of against the foreign equity cap.
• Manufacturing - 100 per cent FDI is permitted under automatic route.
• FDI is subject to the following conditions
• FDI up to 100 per cent is allowed subject to the conditions that such companies would
divest 26 per cent of their equity in favour of Indian public in 5 years, if these companies are
listed in other parts of the world.
• The above services would be subject to licensing and security requirements,
Wherever required.
• Proposals for FDI beyond 49 per cent shall be considered by FIPB on case to case basis
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COMPETITION OVERVIEW
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, Idea Tele-Ventures, Escotel, Idea
Cellular, BPL Mobile, Spice Communications)
BHARAT SANCHAR NIGAM LIMITED (BSNL)
Name : Bharat Sanchar Nigam Limited (BSNL)
Year of Establishment : 2000
Company Profile
Bharat Sanchar Nigam Ltd. is World's 7th largest Telecommunications Company
providing comprehensive range of telecom services in India: Wireline, CDMA mobile, GSM
Mobile, Internet, Broadband, Carrier service, MPLS-VPN, VSAT, VoIP services, IN
Services etc. Within a span of five years it has become one of the largest public sector unit in
India. It has a network of over 45 million lines
Global Presence/ Marketing
Covering 5000 towns with over 35 million telephone connections.
Acquisitions / Strategic Alliances Future Prospect
BSNL plans to expand its customer base from present 47 millions lines to 125
million lines and infrastructure investment plan to the tune of Rs. 733 crores (US$ 16.67
million) in the next three years.
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MAHANAGAR TELEPHONE NIGAM LIMITED (MTNL)
Name : Mahanagar Telephone Nigam Limited (MTNL)
Year of Establishment : 1986
Company Profile
MTNL was set up 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. MTNL with a market share of about 13%
of the National telecom Network has a customer base of 5.92 million. The Govt. of India
currently holds 56.25% stake in the company.
Acquisitions / Strategic
MTNL has formed a Joint Venture company Nepal by the name of United Telecom
Ltd. (UTL) in collaboration with Telecom Consultants India Limited (TCIL) in 2001 for
providing WLL based basic services in Nepal. MTNL has set up its 100% subsidiary
Mahanagar Telephone Mauritius Limited.(MTML) in Mauritius, for providing basic, mobile
and international long distance
.
VIDESH SANCHAR NIGAM LIMITED (VSNL)
Name : Videsh Sanchar Nigam Limited (VSNL)
Year of Establishment : 1986
Company Profile
The Videsh Sanchar Nigam Limited (VSNL) – a wholly Government owned corporation. The
company operates a network of earth stations, switches, submarine cable systems, and value
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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.
Global Presence/ Marketing
The company has 52 subsidiaries in 21 countries as well as operations across four
continents.
Acquisitions / Strategic
VSNL acquired Nasdaq-listed Teleglobe International Holdings Ltd for $239 million
in 2005 Videsh Sanchar Nigam Ltd acquired Tyco Global Network, submarine cable system,
for USD 130 million in 2005
Future Prospect
The company plans to expand its wholesale voices services across the EU, to
effectively enable enterprise customers and retail voice carriers to connect to India. VSNL is
adding its capacity to meet the overwhelming demand for connectivity to India in the
wholesale voice services domain. The company is also offering flexible agreements and
charging methods to meet the growing demands of the wholesale voice market
RELIANCE COMMUNICATION
Name : Reliance Communications
Year of Establishment : 1999
Company Profile
Reliance Telecom's cellular services are available in 340 towns within its eight-circle
footprint. Reliance Infocomm also offered for the first time in India, mobile data services
though its R- World mobile portal. This portal leverages the data capability of the CDMA 1X
network. Reliance Infocomm offers a complete range of telecom services covering mobile
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and fixed line telephony including broadband, national and international long distance
services, data services and a wide range of value added services and applications aimed at
enhancing productivity of enterprises and individuals.
Global Presence/ Marketing
Reliance Communications has IP-enabled connectivity infrastructure comprising over
150,000 kilometers of fiber-optic cable systems in India, the US, Europe, Middle East, and
the Asia Pacific region.
Acquisitions / Strategic
International wholesale telecommunications service provider, FLAG Telecom
amalgamates with Reliance Gateway, a wholly owned subsidiary of Reliance Infocom in
2004
TATA TELESERVICES
Name : Tata Teleservices
Year of Establishment : 1996
Company Profile
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’ bouquet
of telephony services includes Mobile services, Wireless Desktop Phones, Public Booth
Telephony and Wireline services. Other services include value added services like voice
portal, Call service, post-paid Internet services, 3-way conferencing, group calling, Wi-Fi
Internet, USB Modem, data cards, calling card services and enterprise services.
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Global Presence/ Marketing
Tata Teleservices has presence in across 19 circles that includes Andhra Pradesh,
Chennai, Gujarat, Karnataka, Delhi, Maharashtra, Mumbai, Tamil Nadu, Orissa, Bihar,
Rajasthan, Punjab, Haryana, Himachal Pradesh, Uttar Pradesh (E), Uttar Pradesh (W),
Kerala, Kolkata, Madhya Pradesh and West Bengal.
Acquisitions / Strategic
Tata Teleservices has acquired Hughes Tele.com (India) Limited [now renamed Tata
Teleservices (Maharashtra) Limited] in 2002
Future Prospect
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.
VODAFONE
Name : Vodafone
Year of Establishment
Acquired majority stake in Hutch Essar in India, by buying out complete stake of
Hutch in 2007, Essar is still minority stakeholder in company
Company Profile
Vodafone Essar in India is a subsidiary of Vodafone Group Plc and commenced
operations in 1994 when its predecessor Hutchison Telecom acquired the cellular licence for
Mumbai. Vodafone Essar now has operations in 16 circles covering 86% of India's mobile
customer base, with over 45.78 million customers. Vodafone Essar, under the Hutch brand,
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has been named the 'Most Respected Telecom Company', the 'Best Mobile Service in the
country' and the 'Most Creative and Most Effective Advertiser of the Year'. It has operations
in 25 countries across 5
Global Presence/ Marketing
Continents and 40
Network
Partner networks with over 200 million customers worldwide.
Acquisitions / Strategic Alliances Future Prospect
Vodafone Essar is expecting to touch over 35 million customers across 400,000 shops
and thousand of hutch’s own employees along with employees of its business associates.
CHALLENGES AND OPPORTUNITIES
Opportunities
The telecom sector has been one of the fastest growing sectors in the Indian economy
in the past 4 years. This has been witnessed due to strong competition that has brought down
tariffs as well as simplification of policy environment that has promoted healthy competition
among various players..
The mobile sector alone has been growing rapidly and has emerged as the fastest
growing market in the whole worlds. Currently of a size nearing 70 million (GSM and
CDMA), this sector is expected to reach a size of nearly 200 million subscribers by financial
year 2011. The government has eased the rules regarding inter circle and intra circle mergers.
This has led to a slew of mergers and acquisitions in the recent past. Also as the sector is
moving closer to maturity, further consolidation is a reality and this will lead to the survival
of more profitable players in this segment In order to further promote the use of Internet in
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the country the government is taking proactive steps to develop this sector with the help of
the various players in this segment. For this purpose, the use of broadband technology is
being mooted and this will go a long way in improving the productivity of the Indian
economy as well as turn out to be the next big opportunity for telecom companies after the
mobile communications segment Non-voice services and VAS are the gold mines. The big
takeoff is expected with the rollout of 3G services in early 2007, once the spectrum issues are
sorted out. Internet users base fast reaching near the English speaking population base. Local
language and content required for further growth Infrastructure equipment cost is down to a
fraction of what prevailed just a few years ago.
Operators can plan better expansion plan now increased viability for the operators to
expand to semi-urban and rural markets, hence, Accelerate growth further It’s not without
reason that India is tipped to be the world’s third-larges economy by 2050! No wonder if it
happens much earlier Investors can look to capture the gains of the Indian telecom boom and
diversify their operations outside developed economies that are marked by saturated telecom
markets and lower GDP growth rates.
At a time when global telecom majors are struggling to cope with their losses and the
rollout of 3G networks, which has been a non-starter for close to a year now; India, with its
telecom success story, represents an attractive and lucrative destination for investment.
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COMPANY PROFILE
In 2000, Idea Cellular was a company providing mobile services in Andhra Pradesh.
When Birla-AT&T brought Maharashtra and Gujarat to the table, the merger of these two
entities was a reality. Thus Birla-Idea-AT&T, popularly known as Idea, was born and was
later branded as !dea.
Then Idea set sights on RPG’s operations in Madhya Pradesh which was successfully
acquired, helping BaIdea have a million subscribers, and the licence to be the fourth operator
in Delhi was clinched.
In 2004, Idea (the company had by then been rechristened) bought over the Escorts
group’s Escotel gaining Haryana, Uttar Pradesh (West) and Kerala — and licences for three
more — UP (East), Rajasthan and Himachal Pradesh. By the end of that year, four million
Indians were on the company’s network. In 2005, AT&T sold its investment in Idea, and the
year after Ideas also bid good bye to pursue an independent telecom business. And Idea was
left only with one promoter, the AV Birla group. When the company’s stock listed on the
bourses in March 2007, its subscriber base was 13 million with presence in 11 circles. In less
than three years, the subscriber numbers have more than quadrupled. The public issue was
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oversubscribed 50 times and raised Rs 2,450 crore. In June 2011, Idea Cellular bought out
BK Modi’s stake in Spice Communications for Rs 2,700 crore adding Punjab and Karnataka
circles. Modi’s joint venture partner, Telekom Malaysia, invested Rs 7,000 crore for a
14.99% stake in Idea. Just around then, Idea’s subsidiary, Aditya Birla Telecom sold a 20%
stake to US-based Providence Equity Partners for over Rs 2,000 crore.
In 2000, Idea Cellular was a company providing mobile services in Andhra Pradesh.
When Birla-AT&T brought Maharashtra and Gujarat to the table, the merger of these two
entities was a reality. Thus Birla-Idea-AT&T, popularly known as BaIdea, was born and was
later branded as !dea.
Then Idea set sights on RPG’s operations in Madhya Pradesh which was successfully
acquired, helping BaIdea have a million subscribers, and the licence to be the fourth operator
in Delhi was clinched.
In 2004, Idea (the company had by then been rechristened) bought over the Escorts
group’s Escotel gaining Haryana, Uttar Pradesh (West) and Kerala — and licences for three
more — UP (East), Rajasthan and Himachal Pradesh. By the end of that year, four million
Indians were on the company’s network. In 2005, AT&T sold its investment in Idea, and the
year after Ideas also bid good bye to pursue an independent telecom business. And Idea was
left only with one promoter, the AV Birla group. When the company’s stock listed on the
bourses in March 2007, its subscriber base was 13 million with presence in 11 circles. In less
than three years, the subscriber numbers have more than quadrupled. The public issue was
oversubscribed 50 times and raised Rs 2,450 crore. In June 2011, Idea Cellular bought out
BK Modi’s stake in Spice Communications for Rs 2,700 crore adding Punjab and Karnataka
circles. Modi’s joint venture partner, Telekom Malaysia, invested Rs 7,000 crore for a
14.99% stake in Idea. Just around then, Idea’s subsidiary, Aditya Birla Telecom sold a 20%
stake to US-based Providence Equity Partners for over Rs 2,000 crore.
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KEY PEOPLE
BOARD OF DIRECTORS –
Mr. Kumar Mangalam Birla (Chairman)
Smt. Rajashree Birla
Mr. M.R. Prasanna
Mr. Saurabh Misra
Mr. Sanjeev Aga (Managing Director)
Mr. Arun Thiagarajan
Ms. Tarjani Vakil
Mr. Mohan Gyani
Mr. Biswajit Anna Subramanian
Mr. Gian Prakash Gupta
MANAGEMENT TEAM – CORPORATE LEADERSHIP TEAM
Mr. Sanjeev Aga, Managing Director
Mr. Anil J. Jhala, Chief Financial Officer
Mr. Anil K. Tandan, Chief Technology Officer
Mr. Prakash K. Paranjape, Chief Information Officer
Mr. Pradeep Shrivastava, Chief Marketing Officer
Mr. Amar Babu R K, Chief Service Delivery Officer
Mr. Vinay K. Razdan, Chief Human Resource Officer
Mr. Rajat K. Mukarji, Chief Corporate Affairs Officer
Mr. Rajesh K. Srivastava, Chief Materials & Procurement Officer
Mr. Ambrish Jain, Chief Operating Officer, Corporate
Mr. Himanshu Kapania, Chief Operating Officer, Corporate
CIRCLE HEADS
Mr. Iyer Subbaraman S., Chief Operating Officer, Andhra Pradesh
Mr. Rajendra Chourasia, Chief Operating Officer, Delhi & NCR
Mr. Gururaj D. Kulkarni, Chief Operating Officer, Gujarat
Mr. Cherian Peter, Vice President - Operations, Haryana & Himachal Pradesh
Mr. T. G. B. Ramakrishna, Chief Operating Officer, Kerala
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Mr. S. Sashi Shankar, Chief Operating Officer, Madhya Pradesh & Chattisgarh
Mr. P. Lakshminarayana, Chief Operating Officer, Maharashtra & Goa
Mr. Virad Kaul, Chief Operating Officer, Uttar Pradesh (West)
Mr. Subodh K. Srivastav, Vice President - Operations, Uttar Pradesh (East)
Mr. Puneet Krishnan, Vice President - Operations, Rajasthan
CUSTOMER SERVICE
The company has its retail outlets under the "My Idea" banner. The company has also
been the first to offer flexible tariff plans for prepaid customers]. It also offers GPRS services
in urban areas.
Idea Cellular won the GSM Association Award for "Best Billing and Customer Care
Solution" for 2 consecutive years. IDEA Cellular has been recognized as the 'Most Customer
Responsive Company' in the Telecom sector, at the prestigious Avaya Global Connect
Customer Responsiveness Awards.
HOLDING
Initially the Birlas, the Ideas and AT&T Wireless each held one-third equity in the
company. But following AT&T Wireless' merger with Cingular Wireless in 2004, Cingular
decided to sell its 32.9% stake in Idea. This stake was bought by both the Ideas and Birlas at
16.45% each.
Idea's foray into the cellular market with its own subsidiary, Idea Indicom, a CDMA-
based mobile provider, cropped differences between the Ideas and the Birlas. This dual
holding by the Ideas also became a major reason for the delay in Idea being granted a license
to operate in Mumbai. This was because as per Department of Telecommunications (DOT)
license norms, one promoter could not have more than 10% stake in two companies operating
in the same circle and Idea Indicom was already operating in Mumbai when Idea filed for its
license.
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The Birlas thus approached the DOT and sought its intervention, and the Ideas replied
by saying that they would exit Idea but only for a good price. On 10 April 2006, the Aditya
Birla Group announced its acquisition of the 48.18% stake held by the Ideas at Rs. 40.51 a
share amounting to Rs. 44.06 billion. While 15% of the 48.14% stake was acquired by Aditya
Birla Nuvo, a company in-charge of the Birlas' new business initiatives, the remaining stake
was acquired by Birla TMT holdings Private Ltd., an AV Birla family-owned company.
Currently, Aditya Birla Group holds 49.1% of the total shares of the company. Malaysia
based Axiata controls a 14.99% stake in the company.
3G
On 19 May 2010, the 3G spectrum auction in India ended. Idea paid 5768.59 crores
for spectrum in 11 circles. The circles it will provide 3G in are Andhra Pradesh, Gujarat,
Haryana, Himachal Pradesh, Jammu & Kashmir, Kerala, Madhya Pradesh, Maharashtra &
Goa, Punjab, Uttar Pradesh (East) and Uttar Pradesh (West).
On 28 March 2011, Idea launched 3G services in Gujarat, Himachal Pradesh and
Madhya Pradesh.[5] The launch cities were Ahmedabad, Shimla and Indore. This makes Idea
the sixth private operator (eighth overall) to launch its 3G services in the country following
Tata Docomo, Reliance Communications, Idea, Aircel and Vodafone.
Idea currently supports up to 21.1 Mbps over 2G speeds of 256 Kbps. However, different
handsets support different speeds, from 384 Kbps, 3.6 Mbps, 7.2 Mbps or 21.1 Mbps. Speeds
also depend on the 3G plan/recharge that users opt for.[6]
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The operator announced that IDEA 3G services will be available in 200 towns of 11
3G circles by mid-April 2011, progressively growing at the rate of ten towns per day to cover
750 towns by mid-2011 and 4000 towns by the end of 2012.
3G Coverage
Idea’s 3G service is currently available in the following cities in 11 telecom circles:
Source
Telecom Circle State/Region No. of
Towns
Cities/Towns
Andhra Pradesh Andhra Pradesh 0
Gujarat Gujarat 2 Ahmedabad, Daman
Haryana Haryana 8 Ambala, Bhiwani, Hansi, Hisar, Jhajjar,
Panipat, Rewari, Rohtak
Himachal Pradesh Himachal Pradesh 5 Shimla, Baddi, Mandi, Sundernagar,
Dharamshala
Jammu & Kashmir Jammu & Kashmir 0
Madhya Pradesh Madhya Pradesh 3 Indore, Bhopal, Gwalior
Chhattisgarh 0
Maharashtra and
Goa
Maharashtra† 3 Nagpur, Nashik, Pune
Goa 3 Ponda, Panaji, Margao
Punjab Punjab 0
Delhi Delhi 1 Delhi
Kolkata Kolkata 1 Kolkata
Uttar Pradesh (East) Eastern Uttar
Pradesh
6 Allahabad, Azamgarh, Jhansi, Kanpur,
Lucknow, Sitapur
Excluding Mumbai
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HRIHE, HASSAN
SUBSCRIBER BASE
Idea's subscriber base as at the end of January 2011 according to the is as follows
Maharashtra and Goa - 12,075,220
Madhya Pradesh and Chhattisgarh - 8,401,422
Andhra Pradesh - 7,831,260
Kerala - 6,398,170
Kolkata -10,001,804
Gujarat - 6,632,034
Uttar Pradesh (West) & Uttarakhand - 7,361,534
Delhi - 3,609,746
Haryana - 2,847,079
Uttar Pradesh (East) - 4,935,224
Rajasthan - 2,823,910
Himachal Pradesh - 479,882
Mumbai - 1,822,280
Bihar & Jharkhand - 4,280,626
Tamil Nadu & Chennai - 1,202,343
Orissa - 985,737
Punjab (Spice) - 4,160,189
Karnataka (Spice) - 3,775,443
West Bengal - 1,728,308
Assam - 206,140
Jammu & Kashmir - 93,072
North East India except Assam - 128,807
Totaling to 84,289,641 or 10.93% (Approx.) of the total mobile connections in India.
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HRIHE, HASSAN
COMPETITORS
Idea competes with 14 other mobile operators throughout India. They are Aircel, Idea
Cheers Mobile, BSNL, Loop Mobile, MTNL, MTS, Ping Mobile, Reliance Communications,
S Tel, Tata DoCoMo, Tata Indicom, Uninor, Videocon, Virgin Mobile and Vodafone.
HISTORY - IDEA CELLULAR
We were incorporated as Birla Communications Limited on March 14, 1995 and
granted a certificate of commencement of business on August 11, 1995. Our registered office
was in Mumbai, Maharashtra.
Our name was changed to Birla AT&T Communications Limited on May 30,
1996 following the execution of a joint venture agreement dated December 5,1995
between AT&T Corporation and Grasim Industrie S Limited pursuant to which the ditya
Birla Group held 51% of our Equity Share capital and AWS Group held 49% of our
Equity Share capital. Our registered office was transferred from Industry House, 1st
Floor, 159 Church Gate Reclamation, Mumbai 400 020, Maharashtra to SumanTower,
Plot No. 18,
Sector 11, Gandhinagar 382011 Gujarat on October 22, 1996. With effect from January
1, 2001 following our merger with Tata Cellular Limited the joint venture agreement
between AT&T Corporation and Grasim Industries Limited dated December 5, 1995 was
replaced by a shareholders agreement dated December 15, 2000 entered into between
Grasim Industries Limited on behalf of the Aditya Birla Group, Tata Industries Limited
on behalf of the Tata Group and AT&T Wireless Services Inc.on behalf of the AWS
Group following which our name was changed to Birla Tata AT&T Limited on
November 6, 2001. Consequent to the introduction of the “Idea” brand, our name was
changed to Idea Cellular Limited on May 1, 2002.
The AWS Group exited from the Company on September 28, 2005 by selling
371,780,740 Equity Shares of the Company, which constituted 50% of the holding of
AT&T Cellular Private Limited in our equity share capital, to ABNL and by transferring
the remaining 371,780,750 Equity Shares to Tata Industries Limited.
24
HRIHE, HASSAN
The Tata Group ceased to be a shareholder of the Company on June 20,2006
when Tata Industries Limited and Apex Investments (Mauritius) Holding Private imited
(formerly known as AT&T Cellular Private Limited) sold all their shares in the
Company to the Aditya Birla Group. On October 26, 2006, P5 Asia Investments
(Mauritius) Limited (“P5Asia”) acquired 14.60% of our Equity Share capital. Under a
Governance and Exit Rights Agreement dated October 23, 2006 between P5 Asia,
ABNL and Birla TMT, so long as an initial public offering has notoccurred and P5 Asia
holds no less than 10% of our Equity Shares,ABNL and Birla TMT are required to
procure that
(a) our Company and its Subsidiaries shall not take or pursue any of the following
actions without P5 Asia’s prior consent(such consent to be obtained in a board
and/or shareholders resolution) including in respect of:
(i) Any merger with, acquisition of, or amalgamation or consolidation with
another company or business;
(ii) Assuming or permitting to exist any borrowings or indebtedness in the nature
of borrowings if the amount of all such borrowings of our Company and its
Subsidiaries would exceed Rs. 6,800 million
(iii) Entering into a new line of business.
(iv) Increasing our authorized or issued share capital; or
(v) Entering into a joint venture and
(b) our Company makes available to P5 Asia certain financial information relating to our
Company and its Subsidiaries such as monthly management accounts, quarterly
unconsolidated balance sheet and profit and loss account and the annual audited
consolidated balance sheets and profit and loss accounts. P5 Asia also has a right to
appoint one director to our Board so long as it holds at least 10% of our total issued
and outstanding Equity Shares. Mr. Biswajit Subramanian has been appointed to our
Board by P5 Asia pursuant to the exercise of the above right. In addition, any IPO of
our Equity Shares requires P5 Asia’s written consent, and, further, in any such IPO,
P5 Asia hasthe right to offer for sale such number of Equity Shares representing up to
10% of the total Equity Shares which are held by it. By its letters dated December 2,
2006 to ABNL and Birla TMT, P5 Asia has given its written consent for the Issue and
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HRIHE, HASSAN
has confirmed that it does not intend to offer for sale any of the Equity Shares held
by it in such Issue.
We, either directly or through our Subsidiaries, provide mobile services in the
Andhra Pradesh, Delhi, Gujarat, Haryana, Kerala, Madhya Pradesh, Maharashtra and
Uttar Pradesh (West) Circles, and have recently launched services and as such are in the
process of fully rolling-out our network in the Uttar Pradesh (East), Rajasthan and
Himachal Pradesh Circles pursuant to licenses issued by the DoT.
MAJOR EVENTS
The chronology of key events of the Company from incorporation is set out below:
1995: Incorporated as Birla Communications Limited Obtained licenses for providing
GSM-based services in the Gujarat and Maharashtra Circles following the original GSM
license bidding process
1996: Changed name to Birla AT&T Communications Limited following joint venture
between Grasim Industries and AT&T Corporation
1997: Commenced operations in the Gujarat and Maharashtra Circles
1999: Migrated to revenues share license fee regime under New Telecommunications
Policy (“NTP”)
2000: Merged with Tata Cellular Limited, thereby acquiring original license for the Andhra
Pradesh Circle.
2001: Acquired RPG Cellular Limited and consequently the license for the Madhya Pradesh
(including Chattisgarh) Circle Changed name to Birla Tata AT&T Limited
2001: Obtained license for providing GSM-based services in the Delhi Circle following the
fourth operator GSM license bidding process
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HRIHE, HASSAN
2002: Changed name to Idea Cellular Limited and launched “Idea” brand name.
Commenced commercial operations in Delhi Circle . Reached the one million subscriber
mark.
2003: Reached the two million subscriber mark
2004: Completed debt restructuring for the then existing debt facilities and additional
funding for the Delhi Circle. Acquired Escotel Mobile Communications Limited
(subsequently renamedas Idea Mobile Communications Limited) Reached the four million
subscriber mark. First operator in India to commercially launch EDGE services.
2005: - Reached the five million subscriber mark
-Turned profit positive
- Won an award for the “Bill Flash” service at the GSM Association Awards in
Barcelona, Spain Sponsored the International Indian Film Academy Awards
- Sponsored the International Indian Film Academy Awards
2006:
- Became part of the Aditya Birla Group subsequent to the TATA Group transferring its
entire shareholding in the Company to the Aditya Birla Group
- Acquired Escorts Telecommunications Limited (subsequently renamed as Idea
Telecommunications Limited)
- Restructuring of debt
- Launch of the New Circles
- Reached the 10 million subscriber mark
- Received Letter of Intent from the DoT for a new UAS License for the Mumbai Circle.
- Received Letter of Intent from the DoT for a new UAS License for the Bihar
- Circle through Aditya Birla Telecom Limited. ABNL, the parent of Aditya
- Birla Telecom Limited, pursuant to a letter dated November 22, 2006, agreed to transfer
its entire shareholding in Aditya Birla Telecom Limited to the Company for the
consideration of Rs. 100 million.
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HRIHE, HASSAN
2007
- Won an award for the CARE service in the Best Billing or CustomerCare Solution at
the GSM Association Awards in Barcelona, Spain
- Initial Public Offering aggregating to Rs. 28,187 million and Listing of Equity Shares
on the Bombay Stock Exchange and theNational Stock Exchange
- Merger of seven subsidiaries with Idea Cellular Limited
- Reached the twenty million subscriber mark
2011
- Idea Cellular Ltd has informed that the Board of Directors of theCompany at its
meeting held on October 20, 2011, inter alia, has appointed the following persons as
Directors on the Board of the Company:
1. Mr. R C Bhargava - Independent Director (Additional Director)
2. Mr. P Murari - Independent Director - (Additional Director)
3. Dr. Hans Wijayasuriya - Non Executive Director
(Nominee of TM International Bhd).
- Idea acquired 9 licences for Punjab, Karnataka, Tamil Nadu & Chennai, West Bengal,
Orissa, Kolkata, Assam, North East and Jammu &Kashmir
- Acquired Spice Communications with the operating circles of Punjab and Karnataka
- Launched services in Mumbai metro in the largest single metro city launch, ever
- Launched services in Bihar 2009
- Subscriber base as on December 31, 2009: 57,611,872
- Idea becomes a pan-India operator
- Emerging Company of the Year - fastest growing mobile operator in the world’s fastest
growing telecom market
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HRIHE, HASSAN
AWARD AND ACHIEVEMENT
The company has its retail outlets under the "My Idea" banner. The company has also
been the first to offer flexible tariff plans for prepaid customer. It also offers GPRS services
in urban areas Idea Cellular won the GSM Association Award for "Best Billing and Customer
Care Solution" for 2 consecutive years.
IDEA Cellular has been recognized as the 'Most Customer Responsive Company' in
the Telecom sector, at the prestigious Avaya Global Connect Customer Responsiveness
Awards 2011.
Vision:
One of the most common Vision statements I’ve come across is ‘to be the most
profitable company’ or ‘to be the #1 in the category’.
Mission
The Indian telecommunications market for mobile services is divided into 23
“Circles”. There are four “metropolitan” Circles, covering the cities of Mumbai, Delhi,
Kolkata and Chennai, and 19 Circles classified by theGovernment as category “A”, category
“B” or category “C”, which cover the rest of India. These classifications are based principally
on a Circle’s revenue generating potential, with metropolitan and category A Circles having
the highest revenue potential.
Established Circles
We operate in the metropolitan Circle of Delhi, the category A Circles of Andhra
Pradesh, Gujarat and Maharashtra, and the category B Circles of Haryana,
Kerala, Madhya Pradesh and Uttar Pradesh (West).
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HRIHE, HASSAN
Licenses for the Maharashtra and Gujarat Circles were awarded to us in
December 1995, with network rollout and commercial launch achieved in 1997.
Subsequently, in January 2000, we merged with Tata Cellular Limited, the mobile operator in
the Andhra Pradesh Circle, and integrated its operations into ours byJanuary 2001. In
February 2001, we acquired RPG Cellcom Limited, the mobile operator in the Madhya
Pradesh Circle, with full integration of this Circle with
ours achieved by June 2001. We acquired the license for the Delhi Circle during the fourth
mobile license auction in October 2001, with network rollout and
commercial launch by November 2002. Escotel Mobile Communications Private Limited
(“Escotel”), which we acquired in January 2004, was awarded the originallicenses in the
Circles of Haryana, Uttar Pradesh (West) and Kerala. We re-branded these Circles and
integrated them with ours by June 2004
.
New Circles
In connection with the acquisition of Escotel, we also acquired Escorts
Telecommunications Limited (“Escorts”), which was awarded licenses for the
New Circles. Due to certain existing license conditions we were unable to complete the
transfer of shares of Escorts until June 2006. However, we ensured
that Escorts met the first phase of network requirements for these New Circles in June 2005
in accordance with the relevant licenses (as amended following the
payment of a penalty by us on behalf of Escorts).
Following significant investment by us in the roll-out of the network in the New
Circles, amounting to approximately Rs. 4,678 million upto September 30,
2006, we were able to achieve full commercial launch of mobile services in the New Circles
between September and November 2006 in a manner which also met the network roll-out
requirements of the licenses which were to be completed by
June 2007.
30
HRIHE, HASSAN
Area of operation
Idea's subscriber base as at the end of January 2011 according to the is as follows
Maharashtra and Goa - 12,075,220
Madhya Pradesh and Chhattisgarh - 8,401,422
Andhra Pradesh - 7,831,260
Kerala - 6,398,170
Kolkata -10,001,804
Gujarat - 6,632,034
Uttar Pradesh (West) & Uttarakhand - 7,361,534
Delhi - 3,609,746
Haryana - 2,847,079
Uttar Pradesh (East) - 4,935,224
Rajasthan - 2,823,910
Himachal Pradesh - 479,882
Mumbai - 1,822,280
Bihar & Jharkhand - 4,280,626
Tamil Nadu & Chennai - 1,202,343
Orissa - 985,737
Punjab (Spice) - 4,160,189
Karnataka (Spice) - 3,775,443
West Bengal - 1,728,308
Assam - 206,140
Jammu & Kashmir - 93,072
North East India except Assam - 128,807
Totaling to 84,289,641 or 10.93% (Approx.) of the total mobile connections in India.
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HRIHE, HASSAN
BACKGROUND
Idea Cellular Ltd
Industry :Telecommunications - Service Provider
Incorporation Year 1995
Chairman Kumar Mangalam Birla
Managing Director Himanshu Kapania
Company Secretary Pankaj Kapdeo
Auditor Deloitte Haskins and Sells
Registered Office Suman Tower Plot No 18, Sector 11,
Gandhinagar, 382011, Gujarat
Telephone 91-79-66714000
Fax 91-79-23232251
E-mail [email protected]
Website http://www.ideacellular.com
Face Value (Rs) 10
BSE Code 532822
BSE Group A
NSE Code IDEA
Bloomberg IDEA IN
Reuters IDEA.BO
ISIN Demat INE669E01016
Market Lot 1
Listing Mumbai,NSE
Financial Year End 3
Book Closure Month Sep
AGM Month Sep
Registrar's Name & Address Bigshare Services Pvt Ltd, E-2/3 Ansa Indl Est,
Saki Vihar Road, Sakinaka Andheri(E),
Mumbai - 400072. 91-22-28470652/53
91-22-28475207
32
HRIHE, HASSAN
DIRECTORS
Idea Cellular Ltd
Industry :Telecommunications - Service Provider
Designation Name Remunerations
Chairman Kumar Mangalam Birla 80,000.00
Director Rajashree Birla 80,000.00
Director Sanjeev Aga 79,430,000.00
Director Arun Thiagarajan 130,000.00
Director Tarjani Vakil 140,000.00
Director Mohan Gyani -
Director Biswajit Anna Subramanian 80,000.00
Director Gian Prakash Gupta 110,000.00
Company Secretary Pankaj Kapdeo -
Director R C Bhargava 20,000.00
Director P Murari 40,000.00
Director Rakesh Jain 80,000.00
Nominee Juan Villalonga Navarro -
Alternate Director Shridhir Sariputta Hansa
Wijayasuriya
90,000.00
33
HRIHE, HASSAN
IDEA CELLULAR LTD
Industry :Telecommunications - Service Provider
(Rs in Crs)
Subsidiary Name Carlos Tower Ltd
Year Mar 10
No Of Shares 50000
Face Value (Unit Curr.) 10
Investment Cost 0.05
Holding (%) 100.00
Subsidiary's Year end 201003
NP in Holding Co a/cs (PY) 0.00
NP not in Holding Co a/cs (PY) 0.00
NP in Holding Co a/cs (CY) 0.00
NP not in Holding Co a/cs (CY) -0.01
Equity Subscribed 0.05
Subsidiary 's Reserves -0.01
Fixed Assets 0.00
Net Current Assets 0.00
Sales Turnover 0.00
Profit After Tax -0.01
Product1 -
Product2 -
34
HRIHE, HASSAN
MCKINSEY’S 7S MODEL
Need For The Study
The need to undergo this training for a MBA student of Mysore University is to fulfill
the requirement of MBA Degree Course of Mysore University. This training is undertaken
during July 2011 and the main purpose of the training is to know the practical implication and
policies of the company.
Objectives of the Study
The objective of undergoing this training is to get the practical exposure of the
functional departments of the organization. During training, we study how the theoretical
knowledge is practically applied in different departments in the organization. During my
training I was also offered a research study titled , ” A Org Study On Idea Call service”. The
prime objective of the study was to know about the Idea customers who use the Call service
while they are out of the state.
There are many management approaches, which talk about managing the things and
operations in an organization one of the famous model to analyze the pattern of the
management is’ the 7 S model better known as Mckensy‘s 7 S this is because the two persons
who developed this model . Tom pet us and Robert waterman have been consultant at
Mckensy’s company at that time.
They described that as an organization is not just “structure but consist of 7 features
which can be distinguished into so hard 55 and soft S. They published their 7 S model in the
article of "Structure is not organization" (1980) and their books “The Art of Japanese
Management" and “In search of Excellence: (1982).
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HRIHE, HASSAN
The model is very much helpful in viewing the interrelationship of Strategy
formulation and interpretation. It focuses manager’s attention to a variety of activities that
many affect of the implementation of any Strategy. as the model originally developed as a
way of thinking more broadly about the problems of organizing effectively. It is or judge tool
for the implementation of strategies. While thinking comprehensively about a new Strategy
and the problem that arise in canopying it out. A manager must think about the ability of The
Company to get anything really accomplished as matter of moving a whole culture. Manager
need not to consider all factors of model for the successful implementation of any strategy.
The 7 S is mainly distinguished into Hard and Soft’s
The Hard elements are feasible and is to identity as they can be found in a strategy
statements corporate plans again: rational C banjoes and other documentation of the
company. They includes
Strategy
System
Structure
The soft Elements are basically feasible because of difficulty involved in describing them
as capabilities, values and element of corporate culture and frequently developing and
changing they include.
Style
Staff
Skills
Shared values
36
HRIHE, HASSAN
STRUCTRE :
How is the company/team divided?
What is the hierarchy?
How do the various departments coordinate activities?
How do the team members organize and align themselves?
Is decision making and controlling centralized or decentralized? Is this as it should be,
given what we’re doing?
Where are the lines of communication? Explicit and implicit?
Organizational strucutre means it offers more organizanal management and relationship.
It gives the perfect picture about the person who is to take what decision and to what extent,
which is aouthorised perform what all duties and who is greatere than whom.
It corrects and provides with clear data of all relationship and provides frame work
within which all duties and activities takes place and grow
37
HRIHE, HASSAN
CMD IDEA
DIRECTOROPERATIONS
DIRECTOR COMML&MKT
DIRECTOR PLANNING&NS
DIRECTOR HRD
CS&GM (legal)
SR.DDG(Vigilance)
CGMsT.circle/MD
Sr.DDG (CS)Sr.DDG (MS)Sr.DDG (NW&WS)Sr.DDG (PG)Sr.DDG (IT)Sr.DDG (NM)Sr.DDG (MIS)Sr DDG (TS)Sr. DDG (WS&I)CGM(MTCE Reg) -ETR -NTR - STR - WTRCGM (NCES)
CGM (T&D)
Sr.DDG (BBD)Sr.DDG (CMTSOM)DDG (CMTS)DDG (COMML)DDG (MKTG)DDG (REGULN)
Sr.DDG (ARC)Sr.DDG (BW)SR.DDG (ELEC)Sr.DDG (SP)Sr.DDG (SW)Sr.DDG (TX)Sr.DDG (NS)DDG (Broadband)DDG (MM)DDG (RN)DDG (TF)DDG (LTP)DDG (CTF)CGM (NETF)CGM (Project)-ETP-NTP-STP-WTPCGM (QA)CGM (RE)CGM (TS)CGM (TFs)-Jabalpur-Kolkata-Mumbai-Richhai
Sr.DDG (EST)Sr.DDG (PERS)DDG (IR)DDG (RESTR)DDG (SR)DDG (TRG)CGM, ALTICCGM,BRBRAITT
Andman & NicobarAndhra PradeshAssamBiharChattisgarhGujratHaryanaHimachal PradeshJhrakhandJammu & KashmirKarnatakaKeralaMadhaya PradeshMarashtraNorth East-INorth East-IIOrrisaPunjabRajasthanTamilnaiduUttar Pradesh(W)Uttar Pradesh (E)UttranchalWest BengalChennai TDKolkata TD
Sr.DDG (EFC)Sr.DDG (PF)Sr.DDG (FP)Sr.DDG (BBF)Sr. DDG (CA)Sr. DDG (IA)Sr. DDG (TRF)Sr. DDG (SPF)
DIRECTORFINANCE
ORGANIZATION CHARTOF IDEA
38
HRIHE, HASSAN
SKILLS:
What are the strongest skills represented within the company/team?
Are there any skills gaps?
What is the company/team known for doing well?
Do the current employees/team members have the ability to do the job?
How are skills monitored and assessed?
Skill is the distinctive capabilities or competences of personal or of the organization as
whole. In other words it is what the company does the best in way of selecting capable
personas and well trained person. In IDEA all employees are skilled and well educated, in
some area there is a need of training.
STYLE:
How participative is the management/leadership style?
How effective is that leadership?
Do employees/team members tend to be competitive or cooperative?
Are there real teams functioning within the organization or are they just nominal
groups?
Style basically means management behavior towards employees, customers, share
holders, suppliers, and every other person dealing with the company. A particular style
adopted by the company will have various implications over various people dealing with the
organization and thus it will have an impact over the relationship between the organization
and the other party.
With the shift with style in management IDEA is organization is able to improve
relationship with its internal and external customers over a period of time. It try to solve any
kind of disputes arising in the management activities to a peaceful dealings.
39
HRIHE, HASSAN
Authority flow from the top to bottom, thus the organization structure helps to grant the
authority to the people to carry out the duties of their jobs and determinations the
performance evaluation, management directs, coordinate and the control the activities.
STRATEGIES :
What is our strategy?
How do we intend to achieve our objectives?
How do we deal with competitive pressure?
How are changes in customer demands dealt with?
How is strategy adjusted for environmental issues?
Strategy is the choice of direction and action of the company adopt to achieve its
objectives in various situations. It explains the objectives of the organization and how the
company achieves them.
The company aims at customer satisfaction through high quality of service
The improvement in the performance is driven by a focus on cost reduction materials
and operating expenses as well as by increasing in sales volume.
SYSTEM :
What are the main systems that run the organization? Consider financial and HR
systems as well as communications and document storage.
Where are the controls and how are they monitored and evaluated?
What internal rules and processes does the team use to keep on track?
System in the 7’S frame work refers to all the rules regulations and procedure both formal
and informal that compliment the organization structure. System is an assembly of things
connected or interrelated So as to form a complex unity, or whole composed of parts in
orderly arrangement according to Some scheme or, plan. This has been defined as an
organized or complex whole an assemblage combination of things or parts farming or
complex unitary whole.
40
HRIHE, HASSAN
A system basically a combination of parts, subsystems, each part may have various
Subparts. When a sub. System is considered as a system without reference to the system.
Which it is or Points it has the same features of a system.
STAFF:
What positions or specializations are represented within the team?
What positions need to be filled?
Are there gaps in required competencies?
Staffing is the process of acquiring human resources for the organization and
assuming that they have the Potential to contribute to the achievement of the organizational
good. In the Mckensys 7 s team work the term staff has a specific connotation. The term
staff refers to way organizations introduce young recruits into the mainstream of their
activities. Company's people resources and how they are trained, developed and motivated.
Presently the IDEA has around 1951 employees and group A 13 employees group B 274
group C 1572 and group D 78 employees.
SHARED VALUES
What are the core values?
What is the corporate/team culture?
How strong are the values?
What are the fundamental values that the company/team was built on?
Shared values means that the employees share the same guiding values are things that
you would strive for even they were demonstrably not profitable. Values act as an
organization’s conscience, providing in times of crisis. Identifying corporate value is also the
first essential step in defining the organization’s role in the larger community in which it
functions. In IDEA all the workers are well informed and educated about their work and also
The organization goal and principles which helps in achievement of the goals.
SWOT ANALYSIS
41
HRIHE, HASSAN
Strengths
• Idea cellular has more than 65 million customers (July 2011). It is the largest cellular
provider in India, and also supplies broadband and telephone services - as well as
many other telecommunications services to both domestic and corporate customers.
• Other stakeholders in Idea cellular include Sony-Ericsson, Nokia - and Sing Tel, with
whom they hold a strategic alliance. This means that the business has access to
knowledge and technology from other parts of the telecommunications world.
• The company has covered the entire Indian nation with its network. This has
underpinned its large and rising customer base.
Weaknesses
• An often cited original weakness is that when the business was started by adithya birla
over 15 years ago, the business has little knowledge and experience of how a cellular
telephone system actually worked. So the start-up business had to outsource to
industry experts in the field.
• Until recently Idea did not own its own towers, which was a particular strength of
some of its competitors such as Hutchison Essar. Towers are important if your
company wishes to provide wide coverage nationally.
• The fact that the Idea has not pulled off a deal with South Africa's MTN could signal
the lack of any real emerging market investment opportunity for the business once the
Indian market has become mature.
Opportunities
• The company possesses a customized version of the Google search engine which will
enhance broadband services to customers. The tie-up with Google can only enhance the
Idea brand, and also provides advertising opportunities in Indian for Google.
• Global telecommunications and new technology brands see Idea as a key strategic player
in the Indian market. The new iPhone will be launched in India via an Idea distributorship.
Another strategic partnership is held with BlackBerry Wireless Solutions.
• Despite being forced to outsource much of its technical operations in the early days, this
allowed Idea to work from its own blank sheet of paper, and to question industry
approaches and practices - for example replacing the Revenue-Per-Customer model with a
Revenue-Per-Minute model which is better suited to India, as the company moved into
42
HRIHE, HASSAN
small and remote villages and towns.
• The company is investing in its operation in 120,000 to 160,000 small villages every year.
It sees that less well-off consumers may only be able to afford a few tens of Rupees per
call, and also so that the business benefits are scalable - using its 'Matchbox' strategy.
• Idea cellular is embarking on another joint venture with Vodafone Essar and Idea Cellular
to create a new independent tower company called Indus Towers. This new business will
control more than 60% of India's network towers. IPTV is another potential new service
that could underpin the company's long-term strategy.
Threats
• Idea and Vodafone seem to be having an on/off relationship. Vodafone which owned a
5.6% stake in the Idea business sold it back to Idea, and instead invested in its rival
Hutchison Essar. Knowledge and technology previously available to Idea now moves into
the hands of one of its competitors.
• The quickly changing pace of the global telecommunications industry could tempt Idea to
go along the acquisition trail which may make it vulnerable if the world goes into
recession. Perhaps this was an impact upon the decision not to proceed with talks about
the potential purchase of South Africa's MTN in May 2011. This opened the door for
talks between Reliance Communication's Anil Ambani and MTN, allowing a competing
Inidan industrialist to invest in the new emerging African telecommunications market.
• Idea cellular could also be the target for the takeover vision of other global
telecommunications players that wish to move into the Indian market.
Idea comes to you from Idea cellular Limited, India's largest integrated and the first
private telecom services provider with a footprint in all the 23 telecom circles. Idea cellular
since its inception has been at the forefront of technology and has steered the course of the
telecom sector in the country with its world class products and services. The businesses at
Idea cellular have been structured into three individual strategic business units (SBU's) –
Mobile
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HRIHE, HASSAN
FINANCIAL ANALYSIS
Fund Flow
Idea Cellular Ltd
Industry :Telecommunications - Service Provider
(Rs in Crs)
Year Mar 10
Sources of funds
Cash profit 4221.14
Increase in equity 199.74
Increase in other networth 0
Increase in loan funds 0
Decrease in gross block 0
Decrease in investments 2173.68
Decrease in working capital 1561.39
Others 0
Total Inflow 8155.95
Application of funds
Cash loss 0
Decrease in networth 1090.59
Decrease in loan funds 1052.95
Increase in gross block 6012.41
Increase in investments 0
Increase in working capital 0
Dividend 0
Others 0
Total Outflow 8155.95
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HRIHE, HASSAN
Profit & Loss
Idea Cellular Ltd
Industry :Telecommunications - Service Provider
(Rs in Crs)
Year Mar 10(12)
INCOME :
Sales Turnover 11,850.24
Excise Duty 0.00
Net Sales 11,850.24
Other Income 587.38
Stock Adjustments 0.00
Total Income 12,437.62
EXPENDITURE :
Raw Materials 0.02
Power & Fuel Cost 968.89
Employee Cost 563.78
Other Manufacturing Expenses 6,012.05
Selling and Administration Expenses 1,390.15
Miscellaneous Expenses 219.09
Less: Pre-operative Expenses
Capitalised
0.00
Total Expenditure 9,153.98
Operating Profit 3,283.64
Interest 563.71
Gross Profit 2,719.93
Depreciation 1,551.20
Profit Before Tax 1,168.73
Tax 0.00
Fringe Benefit tax 0.00
Deferred Tax 115.07
Reported Net Profit 1,053.66
Extraordinary Items 61.41
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HRIHE, HASSAN
Adjusted Net Profit 992.25
Adjst. below Net Profit -1,529.21
P & L Balance brought forward -405.28
Statutory Appropriations 0.00
Appropriations -484.46
P & L Balance carried down -396.37
Dividend 0.00
Preference Dividend 0.00
Equity Dividend % 0.00
Earnings Per Share-Unit Curr 3.19
Earnings Per Share(Adj)-Unit Curr
Book Value-Unit Curr 34.59
BS Consolidated
Idea Cellular Ltd
Industry :Telecommunications - Service Provider
(Rs in Crs)
Year Mar 10
SOURCES OF FUNDS :
Share Capital 3,301.76
Reserves Total 8,026.15
Equity Share Warrants 0.00
Equity Application Money 44.45
Total Shareholders Funds 11,372.36
Minority Interest 0.00
Secured Loans 7,316.62
Unsecured Loans 542.68
Total Debt 7,859.30
Total Liabilities 19,231.66
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HRIHE, HASSAN
APPLICATION OF FUNDS :
Gross Block 27,064.66
Less: Accumulated Depreciation 8,890.68
Net Block 18,173.98
Lease Adjustment 0.00
Capital Work in Progress 546.47
Investments 1,130.37
Current Assets, Loans & Advances
Inventories 53.64
Sundry Debtors 465.56
Cash and Bank 289.99
Loans and Advances 2,853.83
Total Current Assets 3,663.02
Less : Current Liabilities and Provisions
Current Liabilities 3,844.72
Provisions 223.26
Total Current Liabilities 4,067.98
Net Current Assets -404.96
Miscellaneous Expenses not written off 0.00
Deferred Tax Assets 479.26
Deferred Tax Liability 693.46
Net Deferred Tax -214.20
Total Assets 19,231.66
Contingent Liabilities 3,012.71
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HRIHE, HASSAN
Key Financial Ratios
Idea Cellular Ltd
Industry :Telecommunications - Service Provider
Mar 10
Key Ratios
Debt-Equity Ratio 0.62
Long Term Debt-Equity Ratio 0.55
Current Ratio 0.97
Turnover Ratios
Fixed Assets 0.62
Inventory 265.02
Debtors 31.20
Interest Cover Ratio 3.07
PBIDTM (%) 27.71
PBITM (%) 14.62
PBDTM (%) 22.95
CPM (%) 21.98
APATM (%) 8.89
ROCE (%) 9.20
RONW (%) 8.95
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HRIHE, HASSAN
Valuation Ratios
Idea Cellular Ltd
Industry :Telecommunications - Service Provider
Mar 10
Price Earning (P/E) 20.52
Price to Book Value ( P/BV) 1.89
Price/Cash EPS (P/CEPS) 8.29
EV/EBIDTA 8.48
Market Cap/Sales 1.82
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HRIHE, HASSAN
FINDINGS
Based on the feedback obtained from the people the findings were as follows:
Most of the people use Call service either for regional Call or for national Call. Only a
negligible amount of people use international Call service.
The purpose for using the Call service are either personal or for official reasons. But
is widely used for personal reason.
It was inferred that around 55% of the people use their own cell phone for making
outgoing call while on Call.
The facilities that are widely use by the people while on Call are receiving call,
making outgoing call and to receive Sms.
The study reveled that around 62% of the people are not sure about the deposit/rental
charges that one has to pay for availing the Call service and 23% doesn’t know about this.
Only 26% of the people are aware of the per minute call charges charged by Idea
while they are on Call.
The study also reveled that about 75% of the customers spends up to Rs100 per month
in an average for the Call service used and only 4% more than Rs 200.
When asked about what steps taken by Idea would make them to use Call service
more often it was found that nearly 50% of the people wants the incoming calls to be made
free, 20% wants reduction in call charges.
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HRIHE, HASSAN
When asked about which connection is cheaper to use Call service, 32% felt that Pre-
paid connection is cheaper while 30% are with the opinion that it’s the same on Pre-paid and
Post-paid connections.
When asked regarding which mobile operator is charging the lowest fares for the Call
service, around 26% are with the view that all the cellular operators are charging the same
fares. 18% fells that Idea is cheaper and 20% feels that Reliance is cheaper to use while on
Call.
It is facing heavy competition from its competitors.
It should improve its services to rural area also.
Its signal strength to reach the for away areas is low.
It losing its customers due to inconvenient service rendered by it.
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HRIHE, HASSAN
SUGGESTIONS AND RECOMMENDATIONS
Idea should continuously improve the standards and competitiveness of the Cellular
service and should try to attain the status of world class infrastructure and deliver the benefits
of affordable mobile telephony services to the people of India.
It should maintain and upgrade the quality of services in terms of speech transmission,
ability to access services, coverage, security etc., to facilitate the expansion of cellular
services.
Idea should take more aggressive stand to safeguard its position as number one
cellular operator in Karnataka and also should attempt to strengthen its position in the entire
country.
Idea should undertake continuous efforts to ensure customer satisfaction.
Idea should strengthen - strong marketing, huge nationwide reach and financial
stability - to edge out its rivals in the western belt in the coming months.
They should come within the scenario of attractive packages, what will actually
benefit the customer.
Idea should start its operations in North-eastern states and in the state of Jammu &
Kashmir as this region are backward in Tele-communication.
They should spread its network to the entire parts of rural Karnataka and should
install few more towers in the urban regions to improve its connectivity.
The company should come up attractive offers and schemes in order to maintain its
existing customer and to attract its rival’s customers.
Idea should add more countries under its belt to provide seamless international Call
service.
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HRIHE, HASSAN
Idea should lower the call charges to its Call service customers. The Call service tariff
should be clearly communicated to the customers.
The rental and deposit charges that one has to pay for activating the Call service or
using the Call service services should be lowered and stated clearly to its customers.
Idea should make incoming free to its customers while on Call service as this will
induce more and more customers to use Call service service.
Idea should keep the Call service tariff lower than that of its competitors.
Idea per minute call charges charged for Call service customer are not uniform. This
is creating great confusion. So Idea must take necessary measure to bring uniformity in the
per minute call charges.
The international Call service tariff should be revisited.
The customers should be informed through sms regarding the network that they have
to select while they are on to Call service.
The customers should be able to get access to the Idea customer care of Karnataka
while they are on Call service for getting their queries solved.
The state of Maharashtra and Goa should be included under the zonal Call service area.
The company should come with attractive Call service package, what will actually
benefit its Call service customers, and would make more customers to use the Call service
service.
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HRIHE, HASSAN
CONCLUSION
Idea comes from Idea Cellular Limited - a part of the biggest private integrated
telecom conglomerate, Idea Enterprises. Idea is the leading cellular service provider, with a
footprint in 15 states covering all four metros. It has over eight million satisfied customers.
Idea, 28-percent-owned by Singapore Telecommunications Ltd., is India's market
leader for services using the GSM (Global System of Mobile Communications) standard. Its
India’s leading private sector provider of integrated telecommunications services with an
aggregate of 8.0 million mobile customers across the country & over 10 lakhs customers in
Karnataka. It is also the leading cellular service provider in Karnataka leaving behind all the
other operators. Today, Idea offers its customers choice and superior value for money with a
range of innovative value-added services backed by excellent customer service. The
customers can either opt for Pre-paid scheme or the Post-paid scheme. As a socially
responsible corporate citizen of Karnataka and the Category leader, Idea shall always be at
the forefront to support social initiatives.
In a survey conducted by TRAI in March 2003 for service quality – Idea Karnataka
has been Ranked BEST Cellular Service Provider in the country & is also the first operator to
be bestowed the ISO certification for quality standards The subscribers base for GSM-based
operator Idea Tele-Ventures Ltd, rose 4.3% to 8 million in July from 7.67 million the
previous month. Consecutively for four years 1997,1998, 1999 and 2000, Idea has been voted
as the Best Cellular Service in the country and won the coveted Techies award Call service is
defined as the ability for a cellular customer to automatically make & receive voice calls,
send & receive data, or access other services when travelling outside the geographical
coverage area of the home network, by means of using a visited network.
If the visited network is in the same country as the home network, this is known as
National Call service. If the visited network is outside the home country, this is known as
International Call service. Idea's Call service allows its customers use their mobile phone to
make or receive calls from almost anywhere in India and abroad.
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HRIHE, HASSAN
Idea Call service has two great options: Idea National Call service- 46 partner
networks Idea International Call service - 337 networks and 137 countries. Idea Call service
involves Call service between GSM networks, offers the convenience of a single number, a
single bill and a single phone with worldwide access to over 100 countries. Idea today
provides seamless Call service across 137 countries, 1024 cities across India and covers 151
towns in Karnataka. Services offered while on Call service depend on the visited Network. If
the visited network is supporting all the services offered by Idea in the home network, than
you can enjoy all those services.
The Call service charges are usually higher. When it comes to international Call
service the charges goes very high. Moving seamlessly from one coverage area to another
with no loss in connectivity is the standard feature of Idea Call service. You keep your
number, and all the Idea services will follow you.
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HRIHE, HASSAN
LEARNING EXPERIENCE
Learning Experience Gained
Without a sound and effective telecommunication system in India it cannot have a
healthy economy. The telecommunication system of India should not only be hassle free but
it should be able to meet new challenges posed by the technology and any other external and
internal factors.
Various service providers like Public Sector, Private Sector. are making sincere
efforts to meet the expectations of the customer by providing better products and services.
Idea cellular is one among the Top Three in private sector. The study has highlighted that the
Idea is mainly focusing on customers’ satisfaction through various services..The study
reveals that the Idea cellular continues to identify new areas and activities that require
attention, for example the very recent services like 3G.
The risk management skills, process, and practices that need to be developed and
strengthened. Highly focused on human resources initiative. An employee is given ample
opportunities to learn and grow.
Apart from these issues the Idea cellular has to concentrate on various aspects like: Provide
employment opportunities, provide better services, and focus on 3G, rural areas because they
constitute a major part for the development of GDP of any nation; better training has to be
given to the employees so that they can cope up with the latest technology which the Idea is
adopting now a days (3G).
In the present era, many services providers make their best effort to attract number of
customer towards them, which resulted in aggressive competition in telecommunication
industry. So, Idea must cope up with the latest technology so as to provide better services for
the customers, they must make an effort to study well the mindset of the customer and
provide new products and services. As all the service providers are trying to attract more
industry.
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HRIHE, HASSAN
BIBLIOGRAPHY
News paper: The times of India
Websites: www.ideacellular.com
www.google.com
Reference book: Research methodology by C R Kothari
IBA bulletins.
Brochures, Hand Books, Circulars, Magazines, Annual reports provided by idea
cellular
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