8/7/2019 Project 1234

1/45

A

PROJECT REPORTON

MARKET SEGMENTATION

OF

T E L E C O M S E C T O R

Submitted in Partial fulfillment for Award of the Degree of

Master of Business Administration

GUIDED BY: SUBMITTED BY:Miss PANKAJ DASILAFACULTY MBA 4th SEMMANAGEMENT DEPT. ENROLL. NO:09020500057AIMCA

8/7/2019 Project 1234

2/45

STUDENT DECLARATION

The project has been undertaken as a partial fulfillment of the requirement for the awardof the degree of Master of Business Administration of Utrrakhand

TechnicalUniversity,

Further I declare this project is my original work and analysis and findings are foracademic purpose only. This project has not been presented at any seminar orsubmitted elsewhere for the award of any degree or diploma.

Countersigned by: - Signature of student

(Supervisor)

MISS. PRIYANKA DHINGRA

FACULTY MANAGEMENT

DEPT. AIMCA

8/7/2019 Project 1234

3/45

ACKNOWLEDGEMENT

The feeling of acknowledging something and expressing it in words are two different

things altogether. It is my weakness, but I honestly admit that when I truly wish to

express our warm gratitude and indebt ness towards Miss. Priyanka Dhingra (project

guide), I am always at a loss of words.

I gratefully take this opportunity to express my gratitude and indebt ness to my most able

guide Mr. Humanyu Zaheer (Channel Operating Manager - Idea, Kamoun) for his active

interest, timely encouragement, valuable suggestions and unceasing assistance And

creative criticism at every stage of this project.

I am also thankful to Mr. Sanjeev Tandoon (Channel marketing Associate - Idea,

kamoun) to find in me the capacity and capability to go through with this learning and

challenging project successfully.

8/7/2019 Project 1234

4/45

PREFACE

Progress is a continuous process. It is relative and absolute. We cannot stop at a certain

destination and declare that target has been achieved and we need not go further.

The winter training programmers are designed to give the manager the future of the

corporate happenings and work culture. These real life situations are entirely different

from the stimulated exercise enacted in an artificial environment inside the winter

training programmers and designed, so that the manager to tomorrow do not feel ill case

when the time comes to shoulder responsibilities.

I was privileged enough to Join Idea cellular Ltd. as a winter trainee. The experience

that I have gathered during this period has certainly provided me with an orientation

which, I believe, will help me to shoulder any assignment successfully in near future.

During this period, I have collected all the pertinent information though primary and

secondary data, which were available at the concerned office and outside of the company.

On the basis of my training programmed, I have tried my best to arrange the work in a

systematic and chronological way. However to cove

Detailed information of the organization in such a short period was not possible. Despite

the inherent shortcomings of the study, a genuine attempt was made on my part see that

the study was carried out in the right respective.

8/7/2019 Project 1234

5/45

CONTENTS

Student DeclarationAcknowledgement

Preface

Chapter-1

Introduction

Need of the Study

Objectives of the Study

Period of the Study

Research Methodology

Tools of Analysis

Scope of Study

Chapter-2

Industry profile

Company profile

Data analysis and Interpretation

8/7/2019 Project 1234

6/45

Introduction:

The project included Market Research of the mobile users in the Kumaun zone where Iinterviewed young people, the Head of the Small Medium Enterprise and gathered theinformation on the basis of the ADF (Acquisition Data Format) format.

The information gathered is being analyzed in terms of competitive strategies being usedby competitors. As IDEA is the biggest player in the U.P. West Circle, I compared othersand IDEA in terms of their strategies. I divided the respondents into 4 categories and into

Verticals such as Collage/ School going, young service class/ businessman, maturebusinessman/service class and house wife & others. I visited surrounding Haldwani cityand covered total customer base of 200.

From the information gathered we analyzed the buying behaviour of the customers anddid a Vertical wise Analysis in terms of the factors considered before going for a CUGconnection. The factors for churn were considered before going for a CUF connection.The factors for churn were also looked into and finally the recommendations are given asto how Idea can improve the prevailing condition and come up as a Leader, for what it isknown.

We also did the feasibility study of Hills, and Villages near Haldwani for the expansionof the network.

A questionnaire was prepared to look in the market potential and finally the report wassubmitted for the expansion of the Network.

Need of the Study

India is the fastest growing mobile telephony market in the world. The

telecommunication industry is growing at a neck break speed with leading players

8/7/2019 Project 1234

7/45

lapping up mobile subscribers by millions. The country's telecommunication market is

the 4th largest in the world in terms of wireless subscribers and 5th largest in terms of

total telecom subscribers. Mobiles or Cell phones are now the de-facto status symbols for

younger generation in India. They will do anything to get the latest phone models,

however costly they may be.

Above mention statement indicate the craziness of mobile in Indian market which

develop the competition in between the service provider and this cut throat competition

inspire me to make a comparative analysis on communication industry so that it can be

helpful to define the gap between consumer presumption and companys offering.

Objective of the Study:

To Calculate Market share of Idea in mobile segment:

To Calculate Percentage of Mobile Users:

To Calculate Ratio between Land Line and Mobile .

Popularity of various panes of different service provided:

Period of the Study:

This project was executed during the winter break after fifth semester the researcher was

associated with Idea Mobile Communication Ltd., Haldwani for this project from 01-02-

2009 to 31-03-2009).

(a) 4 Weeks adjusted to collect primary data.

(b) Three weeks adjusted to analysis the data and remaining project work.

Research Methodology

The approach to the research is considered in this chapter, from the theoreticalunderpinning to the collection and analysis of the data. It begins with the extent of the

8/7/2019 Project 1234

8/45

research to provide the specific guidelines of studying. The next part is concernedwith the method of the research that refers to the data collection and analyzing whichis used in the research.

1. RESEARCH DESIGN

Exploratory type of research design was done.

2. DATA COLLECTION

PRIMARY DATA :

Date collection for this research was done primarily through ADF format. On the other

hand, official of different companies were also contacted personally to gather first hand

information regarding different schemes provided by different telecom companies.

AREAS COVERED

Total Number of Institute/Govt. Org. Visited 20.

TOTAL CUSTOMER BASE COVERED- 250.

TOTAL CELLULAR USERS COVERED- 200.

ARPU OF IDEA Rs. 585

3. SAMPLING:

Sampling unit was small organization and people more than 16 yrs around People

of Haldwani were examining deeply to understand the market.

(i) Sample Size

8/7/2019 Project 1234

9/45

Sample size of 200 consumers was taken together the information about

different companies.

(ii) Sampling Method

Convenience sampling was done.

SECONDARY DATA:

A large amount of secondary data has been collected from secondary sources. Some of

the sources are: -

Reports on different schemes of different companies.

Articles from newspapers and trade magazines.

Various web sites of the telecom companies and related sites.

Pamphlets of different schemes of different companies.

Tools of Analysis:

The Following methods are used to analysis the datas: -

1. Various pie and bar charts are used among relative figures.

2. Probability methods are used to calculate the various ratios.

Pie Charts:

Pie charts are good when you are showing the relative proportion of numbers that add up

to a total. They are good for a single series of data. They are best when there are not too

many wedges, particularly too many small ones. They show a good qualitative view of

the data

8/7/2019 Project 1234

10/45

Bar chart:

A bar chart, also known as a bar graph, is a chart with rectangular bars of lengths usually

proportional to the magnitudes or frequencies of what they represent. Bar charts are used

for comparing two or more values. The bars can be horizontally or vertically oriented.

Sometimes a stretched graphic is used instead of a solid bar.

Scope of the Study

The report can help full to designed marketing plan for:

Management staff, Distributors and analysts of companies operating in any area of the

Kamoun Zone. This study also helpful to understand the behavior and potential of

corporate customers or group customers , to develop or improve/ change the tariff / plan.

Limitations of the Study

1. Refusal on part of the corporate customers to give any type of information at all.

2. The respondents are not willing to disclose information related to Offers and

schemes.

3. Inadequate time to complete the project.

4. The data collected is not very extensive to draw an accurate conclusion

-

8/7/2019 Project 1234

11/45

Industry Profile:

Technological changes in the telecom and computers have radically changed thebusiness scenario. In turn, the new demands of business have spurred many telecombased technological innovations. In order to exploit these innovations for competingin global markets, business community the world over has been putting pressure ongovernments to revise the policy, regulation and structure of the telecom sector.Several countries across the world have responded by restructuring the statecontrolled telecom service provider, increasing private participation, and deregulatingservice provision. The emergent organizations have attempted to be more responsiveto the business needs and have evolved mechanisms to remain competitive evenunder tremendous pressures.

Over the past several years, developing countries have also recognized the important role

a responsive, business oriented and technologically advanced telecom sector plays in the

growth of the economy. Many developing countries now accept the limitations of a

monolith state monopoly in responding to the twin challenges of spurring internal growth

and competing in an increasingly global economy.

Past experience of reform across many countries suggests that the fundamentalunderlying issue that must be addressed in telecom reform is introduction of competition

for efficiency. Competition is considered to be an important factor than ownership in

introducing efficiency.

India's 21.59 million-line telephone network is one of the largest in the world and the 3 rd

largest among emerging economies (after China and Republic of Korea). Given the low

telephone penetration rate India offers vast scope for growth. It is therefore not surprising

that India has one of the fastest growing telecommunication systems in the world with

system size (total connections) growing at an average of more than 20 percent over the

last 4 years.

The industry is considered as having the highest potential for investment in India. The

growth is demand for telecom services in India is not limited to basic telephone services.

8/7/2019 Project 1234

12/45

India has witnessed rapid growth in cellular, radio paging, value-added services, internet

and global mobile communication by satellite (GMPCS) services. This is expected to

soar in the next few years.

Recognizing that the telecom sector is one of the prime movers of the economy, the

Government's regulatory and policy initiatives have also been directed towards

establishing a world class telecommunications infrastructure in India. The telecom sector

in India therefore offers an ideal environment for investment.

The telecommunications initiative in the country is lead by Ministry of Communications

through the Department of Telecommunication & Department Telecom Services and its

undertakings for provision of basic telephone services, national and international long

distance communications, manufacture of complete range of telecom equipment, research

and development and consultancy services. The Telecom Commission performs the

Executive and Policy making functions. The Telecom Regulatory Authority of India

performs the functions of an independent regulatory body.

SERVICE OFFERED

Telephone Services NSD/ISD Services, Computerized Trunk Services, Pay Phoners,

National & International Leased Lines Circuits, Telex, Telegraph

Services (Manual & Automatic), X-25 based Packet Switched Data Network (INET),

Gateway Packet Switched Data Service (GPSS), Gateway Electronic Data Interchange

Service (GEDIS), Gateway E-Mail and Store & Forward FAX Service (GEMS-400),

Concert Packet Service (CPS), Satellite-based Remote Area Business Message Network,

Electronic Mail, Voice Mail, Audio-Text, Radio Paging, Cellular Mobile Telephone,

Public Mobile Radio Trunked Service, Video-Tex, Video Conferencing, V-SAT, Internet,

ISDN, INMARSAT Mobile Service, INMARSAT Data Service, Home Country Direct

Service, Intelligent Network (IN) Services.

HISTORY OF INDIAN TELECOM SECTOR:

Telecom sector was a state monopoly until the mid eighties when the liberalization

process started. The department of telecommunication (DoT), under the Ministry of

8/7/2019 Project 1234

13/45

Communication administered telecom services. The planning commission, an apex level

body, allocated funds for telecom development from government resources. The telecom

sector, therefore, competed with other developmental priorities of the government for a

share in resource allocation. Planning, engineering, installation, maintenance,

management, and operations of telecom services for the whole of India was managed by

the DoT, which also lay down and monitored adherence to technical standards and

managed frequency usage.

The DoT was a monolithic entity, with a huge work force managing the telecom

operations of the entire country. The bureaucratic approach and the slow acceptance and

induction of new technologies with very little customer orientation were perceived as

barriers to growth. Consequently, two new public sector corporations Mahanagar

Telephone Nigam Limited (MTNL) and Videsh Sanchar

Nigam Limited (VSNL) were set up under the DoT. MTNL was carved out of the DoT

and took over the operation, maintenance, and development of telecom services in

Mumbai and New Delhi. VSNL was set up to plan, operate, develop, and accelerate

international telecom services in India. The government created the corporate

organizations in order to allow decision making autonomy and flexibility and facilitate

public borrowings which would not have been possible under a government framework.However, policy formulation, regulation and several key decision areas remained with

the DoT. A new organization, the Telecom Commission, was created with a wide rang

eof executive, administrative and financial powers to formulate and regulate policy and

prepare the budget for the DoT. The Telecom Commission had four full time members

managing technology, production, services, and finance and four part time members

representing the planning commission, department of finance, department of industry,

and department of electronics.

The key driver for change in the sector was the National Telecom Policy announced in

May 1994. It boldly specified its major objectives as telephone demand, achievement of

universal service obligation and ensuring world class service to subscribers. This policy

8/7/2019 Project 1234

14/45

also paved the way for private sector participation in telecom services. Objectives of NTP

(1994) were

Telecom for all the telephone in reach of all.

Provision for certain basic telecom service at affordable and reasonable price.

World class quality of telecom service.

India to emerge as a major manufacturing base and exporter of telecom

equipment.

Telecom services were categorized into domestic basic (which included basic telephony,

telex and fax), domestic value-added services (VAS) which covered all other services

such as paging, cellular, data services, VSAT and international basic and VAS. Telecom

service liberalization started in 1984, with private sector being allowed to manufacture

customer premise equipment. In 1992, service provision was opened for private sector.

At this stage government also unbundled basic and VAS. Private operators were allowed

to participate in provision of VAS such as cellular and paging services. Subsequently,

basic services in the local lop were opened for private operators. Basic service provision

had been planned as a duopoly between the DoT and a selected service provider. Several

service providers, one for each of the twenty "circles" into which the entire country hadbeen divided would compete with the DoT for basic services. the bidders were valued

both on financial and technical parameters. Permissible network technologies were

specified and basic service providers were required to base their services on fiber-optic

cable and wireless in the local loop as far as possible. Licenses had been granted for an

initial period of 15 years and could be extended by another 10 years. Private Service

operators were allowed to provide intra-circle long distance service which contributed to

almost 60% of the total calls.

The government had mandated that all private basic service operators had to provide 10%

of all new lines in rural areas. A weight age of 15% for service provision in rural areas

was given at the time of bid selection. A penalty on a per day basis for each telephone not

installed sought to prevent companies from

8/7/2019 Project 1234

15/45

delaying meeting rural targets. At the same time, the government encouraged new

emerging technologies including local loop wireless, cellular telephony and satellite

based communication systems that could help develops rural telecom in a cost effective

manner.

Inter-circle communication remained under the DoT. VSNL maintained an exclusive

license for international services for at least until 2004. Advanced communication

services like cellular, paging, e-mail, fax, data transmission over telephone and leased

circuits were increasingly being made available by private operators. However,

Electronic Data Interchange standards and its adoption had not made much progress

largely due to the problems in long distance communication, lack of coordination for

adopting standards, and unclear policies in the various departments involved in national

implementation.

HIGHLIGHTS:

The telecom muddle is growing murkier and murkier by the day. In addition, so are the

claims of the great Indian telecom revolution.

5th largest network in the world, second largest among emerging economies (after

China).

Annual growth rate of 22% in basic telephone service and over 100% for cellular

and Internet services.

Private participation allowed in all types of telecom and IT enabled services.

License granted on non-exclusive basis for basic, national long distance,

international long distance, Internet, V-Sat services etc.

Foreign equity participation permitted in the telecom service sector.

8/7/2019 Project 1234

16/45

Huge market for all types of telecom equipments for both wire line and wireless,

Internet, call centres, etc.

Foreign direct investment of up to 100% permitted for the manufacturing of

telecom equipment.

Investment potential across a wide spectrum of telecom service.

TELECOM STATISTICS:

June'06 July '06 August '06

Total subscribers

Tele-density

Fiex line

Additions during the month

Mobile

Total additions during themonth

GSM additions

CDMA additions

98.08mn

90.08

45.90mn

0.36mn

52.17mn

0.73mn

1.24mn

(0.52) mn

100.15mn

9.26

46.50mn

0.59mn

53.65mn

1.44mn

1.09mn

0.35mn

102.5mn

9.46

47.11mn

0.61mn

55.36mn

1.70mn

1.225mn

0.475mn

STRONG GROWTH CONTINUES:

Growth in telephony continued in May as the subscriber base reached the 102.5 mnmark. Tele density in May 2005 improved to 9.46% from 9.26% in April 2006.During May 2006, 2.31mn subscribers were added as against 2.03mn subscribers

in April 2006. In the fixed segment, a total of 0.61mn subscribers were added duringMay 2006, taking the subscriber based of fixed line services to 47.11mn. In themobile segment, total additions during the month summed up to 1.7mn out of which1.225mn subscribers were added in the GSM segment and the remaining 0.475mnwere added in the CDMA segment.

Mobile telephone subscriber base witnessed a healthy growth of 1.7mn in May 2005, a

strong start to the new financial year. The segment subscriber base grew 3.22% mom to

55.38mn. Bharti remained the overall market leader in both the CDMA and the GSM

segments.

8/7/2019 Project 1234

17/45

COMPANY CIRCLES

Aircel Digilink India

Limited

Haryana, Rajasthan, U.P. (East)

Aircel Limited Chennai, Tamil NaduBharti Cellular Limited Delhi (Metro), Mumbai (Metro), Kolkata (Metro), Chennai

(Metro), Andhra Pradehs, Gujarat, Haryana, Himachal

Pradesh, Jammu & Kashmir, Karnataka, Kerala, Madhya

Pradesh, Maharashtra & Goa, Orissa, Punjab, Rajasthan,

Tamil Nadu, UP (West), UP (East), West Bengal

BPL Cellular Limited Mumbai (Metro), Kerala, Maharashtra & Goa, Tamil

Nadu

Vodafone Group Mumbai, Delhi, Kolkata, Chennai, Gujarat, Andhra

Pradesh, Karnataka, Punjab

Idea Cellular Limited Andhra Pradehs, Maharashtra, Gujarat, Madhya Pradesh,

Kerala, Haryana, U.P. (W), Madhya Pradesh

Reliance Telecom

Limited

Assam, Bihar, Himachal Pradesh, Kolkata, Madhya

Pradesh, North East, Orissa, West Bengal

Spice Communications

Limited

Karnataka, Punjab

Market Share May 2006 MTNL-2.23%HFCL-0.10%

Shyam-0.05%

Reliance-20.38%

Bharti-21.50%

BSNL-17.99%

Vodafone-14.19%

IDEA9.77%

BPL-4.73%

Spice-2.67%

Aircel-3.25%

GSM subscriber base grew 2.91% mom to 43.35mm in May 2005. MTNL continuedto witness the highest growth in subscriber additions, driven by strong growth in bothMumbai and Delhi circles. Reliance, IDEA and Bharti followed MTNL in momgrowth. Bharti maintained its leadership position with 27.2% of the market share, andcontributed 34% to the total GSM additions for the month.

8/7/2019 Project 1234

18/45

GSM SUBSCRIBERS:

Group

Company

Subscribers as of

June'06

Additions in

July

Subscribers as on

July'06

(%) Growth

Bharti

BSNL

Vodafone

idea

bpl

Spice

Aircel

Reliance

mtnl

11,389,370

9,683,687

7,957,297

5,153,483

2,591,969

1,449,110

1,769,643

1,165,318

961,619

415,540

194,302

230,776

210,505

2,405

16,230

16,448

62,581

76,423

11,804,910

9,877,969

8,188,073

5,363,988

2,594,374

1,465,340

1,766,091

1,227,699

1,038,042

3.65

2.01

2.90

4.08

0.09

1.12

0.93

5.37

7.95

Total 42,121,496 1,225,210 43,346,706 2.91

The country is divided into 23 Service Areas consisting of 19 Telecom Circle ServiceAreas and 4 Metro Service Areas for providing Cellular Mobile Telephone Services(CMTS).

8/7/2019 Project 1234

19/45

In terms of old licensing scheme of NTP-1994, 8 licensees for Cellular Mobile Telephone

Service in the 4 metro cities of Delhi, Mumbai, Calcutta and Chennai were issued to 8

companies in November 1994. 34 licenses for 18 Territorial Telecom Circles were also

issued to 14 companies during 1995 to 1998. MTNL and BSNL were issued licenses for

operation of Cellular Mobile Telephone Service as third operator in various parts of the

country. In terms of N/TP-99, 17 fresh licenses have been issued to private companies as

fourth cellular operator in September/October, 2001, one each in 4 Metro cities and 13

Telecom Circles. Presently there are 78 licenses held by 25 Companies including MTNL

& BSNL for CMTS in 23 Service Areas.

The old licensees of cellular services were permitted for migration to NTP 1999 regime

of revenue sharing which was effective from 1st ?August, 1999. The license fee,

excluding spectrum charges for cellular services is 12% of "Adjusted Gross Revenue"

(AGR) for Metro Service Areas and category 'A' circles, 10% of AGR for category 'B'

Circles and 8% of AGR for category 'C' Circles.

In addition to license fees, the cellular licensees pay spectrum charges on revenue share

basis of 2% of AGR for spectrum upto 4.4 MHz or 3% of AGR for spectrum up to 6.2

MHz, as the case may be. The charges will be 4% of AGR for spectrum beyond 6.2 MHz,

which shall be given if the subscriber base is more than 5 lacs. This spectrum charge of4% of AGR would also cover allocation of further spectrum, which may become possible

to allocate in future subject o availability, to

add up to a total spectrum allocation not exceeding 10 MHz + 10 MHz per operator in a

service areas. Such additional allocation could be considered only after a suitable

subscriber as may be prescribed, is reached.

In terms of NTP-99, cellular operators will be free to provide, within their areas of

operation, all types of mobile services including voice and non-voice messages, data

services and PCO's utilizing any type of network equipment, including circuit and/or

package switches that meet the relevant International Telecommunication Union

(ITU)/Telecom Engineering Centre (TEC) standards.

8/7/2019 Project 1234

20/45

Company Profile: Idea cellular Ltd.

COMPANY INFORMATION

IDEA Cellular is a publicly listed company, having listed on the Bombay Stock

Exchange (BSE and the National Stock Exchange (NSE) in March 2007.

As India's leading GSM Mobile Services operator, IDEA Cellular has licenses to operate

in all 22 Service Areas. Presently, operations exist in 11 Service Areas covering Delhi,

Maharashtra, Goa, Gujarat, Andhra Pradesh, Madhya Pradesh, Chattisgarh, Uttaranchal,

Haryana, UP-West, Himachal Pradesh, UP-East, Rajasthan and Kerala. With a customer

base of over 28 million, IDEA Cellular's footprint currently covers approximately 60% of

India's telecom population.

A frontrunner in introducing revolutionary tariff plans, IDEA Cellular has the distinction

of offering the most customer friendly and competitive Pre Paid offerings, for the first

time in India in an increasingly segmented market.

Customer Service and Innovation are the drivers of this Cellular Brand. A brand known

for their many firsts, Idea is only operator to launch GPRS and EDGE in the country.

Idea has received international recognition for its path-breaking innovations when it won

8/7/2019 Project 1234

21/45

the GSM Association Award for Best Billing and Customer Care Solution for 2

consecutive years.

IDEA Cellular is part of the Aditya Birla Group, a US$ 24 billion corporation with a

market cap of US$ 31.5 billion and in the league of Fortune 500. Anchored by an

extraordinary force of over 100,000 employees belonging to 25 different nationalities,

over 50% of its revenues flow from its overseas operations. The Group has been

adjudged The Best Employer in India and among the Top 20 in Asia by the Hewitt-

Economic Times and Wall Street Journal Study 2007.

The combined holding of the Aditya Birla Group companies in IDEA stands at around 57

per cent With ambitious future plans, the company is poised for rapid growth across the

whole country.

OUR SERVICE AREAS :

The Indian telecommunications market for mobile services is divided into 22 Service

Areas classified into Metropolitan, Category A, Category B and Category C

service areas by the Government of India. These classifications are based principally on a

Service Areas revenue generating potential.

Our operational 11 Service Areas are broken up into Established and New Service Areas.

ESTABLISHED SERVICE AREAS :

The established service areas are Delhi, Andhra Pradesh, Gujarat and Maharashtra,

Haryana, Kerala, Madhya Pradesh and Uttar Pradesh (West).

Licenses for the Maharashtra and Gujarat Service Areas were awarded in December

1995, with network rollout and commercial launch achieved in 1997. In January 2001 the

mobile operations in Andhra Pradesh Service Area were integrated with IDEA through a

merger with Tata Cellular Limited. In June 2001, the mobile operations in Madhya

Pradesh Service Area were fully integrated with IDEA through an acquisition of RPG

Cellcom Limited. In October 2001, the license for Delhi Service Area was acquired

8/7/2019 Project 1234

22/45

during the fourth mobile license auction, with network rollout and commercial launch in

November 2002. In January 2004, Escotel Mobile Communications Private Limited

(Escotel), was acquired with its original licenses in the Service Areas of Haryana, Uttar

Pradesh (West) and Kerala. All these Service Areas were re-branded and integrated with

IDEA in June 2004.

New Service Areas:

The New Service Areas are Uttar Pradesh (East), Rajasthan and Himachal Pradesh

Licenses for these New Service Areas were acquired through the acquisition of Escotel

(Escorts Telecommunications Limited).

Following significant investment in the roll-out of network in the New Service Areas,

amounting to approximately Rs. 4,678 million upto September 30, 2006, a full

commercial launch of mobile services was achieved in the New Service Areas between

September and November 2006 in a manner which also met the network roll-out

requirements of the licenses in 2007.

HISTORY :

Acquired Escotel, incumbent cellular service provider in Haryana, UP(W) & Kerala and

new licensee in HP

The chronology of key events of the Company from incorporation is set out below:

8/7/2019 Project 1234

23/45

Calendar year Events

2007

Won an award for the "CARE" service in the "Best Billing or Customer Care

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 the National Stock Exchange

Merger of seven subsidiaries with Idea Cellular Limited

Reached the twenty million subscriber mark

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.

2005

Reached the five million subscriber mark

Turned Profit Positive

Won an Award for the "Bill Flash" service at GSM Association Awards in

Barcelona, Spain

Sponsored the International Indian Film Academy Awards

2004

8/7/2019 Project 1234

24/45

Completed debt restructuring for the then existing debt facilities and additional

funding for the Delhi Circle.

Acquired Escotel Mobile Communications Limited (subsequently renamed as

Idea Mobile Communications Limited)

Reached the four million subscriber mark

First operator in India to commercially launch EDGE services 2005

2003

Reached the two million subscriber mark

2002

Changed name to Idea Cellular Limited and launched "Idea" brand name

Commenced commercial operations in Delhi Circle Reached the one million

subscriber mark

2001

Acquired RPG Cellular Limited and consequently the license for the Madhya

Pradesh (including Chattisgarh) Circle

Changed name to Birla Tata AT&T Limited

Obtained license for providing GSM-based services in the Delhi Circle following

the fourth operator GSM license bidding process

2000

Merged with Tata Cellular Limited, thereby acquiring original license for the

Andhra Pradesh Circle

1999

Migrated to revenues share license fee regime under New Telecommunications

Policy ("NTP")

1997

Commenced operations in the Gujarat and Maharashtra Circles

1996

Changed name to Birla AT&T Communications Limited following joint venture

between Grasim Industries and AT&T Corporation

1995

8/7/2019 Project 1234

25/45

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.

OUR MISSION:

KEY PEOPLE

BOARD OF DIRECTORS -

Mr. Kumar Mangalam Birla (Chairman)

Smt. Rajashree Birla

Mr. M.R. Prasanna

Mr. Saurabh Misra

8/7/2019 Project 1234

26/45

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. Akshaya Moondra, Chief Financial Officer

Mr. Anil K. Tandan, Chief Technology Officer

Mr. Prakash K. Paranjape, Chief Information Officer

Mr. Pradeep Shrivastava, Chief Marketing Officer

Mr. Navanit Narayan, 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, Director - Operations

Mr. Himanshu Kapania, Director - Operations

CIRCLE HEADS:

Mr. Iyer Subbaraman S., Chief Operating Officer, Andhra Pradesh

Mr. Rajendra Chourasia, Chief Operating Officer, Madhya Pradesh & Chattisgarh

Mr. Atul Chaturvedi, Chief Operating Officer, Delhi

Mr. Cherian Peter, Senior Vice President - Operations, Haryana & Himachal Pradesh

Mr. T. G. B. Ramakrishna, Chief Operating Officer, Kerala

Mr. Sashi Shankar, Chief Operating Officer, Mumbai

Mr. P.Lakshminarayana, Chief Operating Officer, Maharashtra & Goa

Mr. Virad Kaul, Chief Operating Officer, Uttar Pradesh (West)

Mr. Naozer Firoze Aibara, Chief Operating Officer, Uttar Pradesh (East)

Mr. Puneet Krishnan, Senior Vice President - Operations, Rajasthan

8/7/2019 Project 1234

27/45

Mr. Arul Bright, Senior Vice President - Operations, Gujarat

Mr. M. D. Prasad, Senior Vice President - Operations, Bihar

Mr. Vijay Grover, Chief Operating Officer, East

Mr. M. Srinivas, Senior Vice President - Operations, Tamil Nadu & Chennai

OUR VALUES:

Values We Value: Integrity - Honesty in every action

At Aditya Birla Group, Integrity is defined as: Acting and taking decisions in a manner

that is fair, honest, following the highest standards of professionalism and also perceived

to be so. Integrity for us means not only financial and intellectual integrity, but in all

other forms as are commonly understood.

Key words that connote Integrity are:

Ethical

Truthful

Principled

Transparent

Upright

Respectful

Commitment - deliver on the promise:

At Aditya Birla Group Commitment is defined as: On the foundation of integrity, doing

whatever it takes to deliver value to all stakeholders. In the process, taking ownership of

our actions and decisions, those of our team and that part of the organization that we are

responsible for.

Key words that connote commitment are:

Accountability

Discipline

Responsibility

8/7/2019 Project 1234

28/45

Result orientation

Self-confidence

Reliability

Passion - energized action

At Aditya Birla Group Passion is defined as: A missionary zeal arising out of emotional

engagement with the organization that makes work joyful and inspires each one to give

his or her best. Relentless pursuit of goals and objectives with the highest level of energy

and enthusiasm, that is voluntary and spontaneous.

Key words that connote passion are:

Intensity

Innovation

Transformational

Fire-in-the-belly

Inspirational

Deep sense of purpose

8/7/2019 Project 1234

29/45

Data Analysis, Observation & Interpretation

COMPARATIVE ANALYSIS OF IDEA AND OTHERS:

In the given table we have taken some major factors on the basis of which there is acomparison of Market Leader i.e. Idea and market follower i.e. Airtel. The resultsdrawn are on the basis of the interviews conducted by us across various segments andarea within the Kamoun Zone.

COMPANY REPUTATION

If we look at the company reputation, somehow the brand image of Idea is noteffectively visible in the Kamoun Zone. Reputation of others (like BSNL, Airtel,vodafone, Reliance etc.) are its major strength as customer feels that BSNL has beenaround for too long and understands the market vary well whereas IDIA is consideredas inexperienced and new player in the market. Interestingly company reputation inKamoun Zone is in sharp contrast with the reputation; Idea and Airtel hold nationallywhich shows that BSNL has benefited due to maximum coverage in Kamoun.

8/7/2019 Project 1234

30/45

MARKET SHARE

My own analysis shows that Idea has a 18% market share in Kamoun Zone comparedto 10% of Airtel, this may not be an accurate figure when al of the market is seen as awhole. But clearly BSNL has the biggest market share and it works for them as amajor strength as they have a large group of influencers for them who can affect thepotential customer's decision. My analysis clearly shows that Influencer plays an

important role in selecting any operator. So market share is not the biggest strengthfor Idea when compared to BSNL but again when its market share is compared toother operators like Reliance, Airtel is having the advantage. This is why I have putthe market share as a minor strength for Idea.

CUSTOMERSATISFACTION:

If we see at Idea and BSNL together we see that Idea has a larger base of satisfiedcustomer across all segments. Customer satisfaction is a minor strength for Ideabecause even though customer satisfaction levels are high when compared with anyother operator this is mainly due to the larger customer base it has. Customer

satisfaction level for others is also not very good as there were lot of complaints oferrors in billing and customer care services etc., which on overall level is not goodbecause even a satisfied customer is not a loyal customer when it comes to switchingover from one operator to another.

Company Reputation

18%

26%

10%14%

20%

12% Idea

Bsnl

Airtel

Reliance

Vodafone

others

8/7/2019 Project 1234

31/45

SERVICE QUALITY

In term of quality of service provided there is not much difference between others andIdea; all have similarity in quality propositions delivered to the customer. Idea lagsbehind in terms of network coverage across Kamoun Zone. When compared to BSNLlot of customer complain about no network coverage in some areas of Kamoun (see

Recommendations). Both players do not have a major focus on service quality asgrowth in number of customer is considerable and focus is an acquisition not ARPU(see company strategy).

Customer Satisfaction

25%

10%

24%

21%

12%8%

Idia

bsnl

Airtel

Reliance

vodafone

Others

8/7/2019 Project 1234

32/45

1. PRICE EFFECTIVENESS

Hence pricing effectiveness can be defined in terms of plans on offer in the corporatesegment. How effective are these plans in attracting the customers are what wewanted to know. If we look at Idea's strategy of leveraging new plans, one can easilymake out that Idea's strategy is very flexible and effective. They have plans forstudents, corporate SME's, organizations. Others have very inflexible plans forcorporate segments where except for few minor changes, not much is on offer.

2. CUSTOMERRETENTION

Customer retention is a major strength of Idea because I observed that there werefrequent visits by the sales people to a dissatisfied customer and any offer made byany of its competitors to its customers are easily traced by it and efforts are made toretain them. For BSNL retention is not a major strength because I saw that whenBSNL launched itself in Kamoun Zone lot of its customers terminated theirconnections due to connectivity problems and network coverage. Lots of the SME's,

which I visited, had customers who stated that they relinquished their BSNLconnections initially. BSNL did not try to make them aware of the fact that no suchproblems exist anymore. No efforts were made on part of BSNL to attract them back.

3. SALES FORCE

I have already talked about sales force in distribution effectiveness. Beside BSNL allhave equally good sales force. Airtel and Idea are equally good at converting leads to

Service Quality

18%

15%

19%21%

14%

13%IDEA

BSNL

AIRTEL

RELIANCE

VODAFONE

OTHERS

8/7/2019 Project 1234

33/45

sales and making calls to the customers. Customers incorporate segment do talk aboutfrequent visits by the sales people of both these companies.

QUALITY OFSALES FORCE

AIRTEL,

50%

IDEA,

50%

AIRTEL

IDEA

4. GEOGRAPHICAL COVERAGE

Here geographical coverage is defined in terms of network coverage in KamounCoverage is one of the most important factors for to choose between the operators(see Recommendation) in such a scenario it is very important for the service providerto have a extensive network coverage. Now when one compares Idea and BSNL,BSNL has an extensive coverage of network and IDIA still lags behind in few areaslike National High Way-87 (Haldwani Almora Road) (A tower was coming upshortly in this area). Most of the customers were highly impressed by the networkcoverage of vodafone as well as Reliance and complained about lack of networkcoverage of Idea in few crucial areas of the Haldwani region.

5. DISTRIBUTION EFFECTIVENESS:

In term of distribution effectiveness both Airtel and Idea match each other point by

point and have a extensive distribution network all around and both are convert leadsto sales effectively but here again Idea beats Airtel in regions like Kaladhungi,Bhawali, Mukteshwer etc. But Airtel is strong in regions within the main city. Incorporate segment distribution network is all about reach of sales force to thecorporate. So an effective sales force is important and both Airtel and Idea have aneffective sales force but idea was ahead than Airtel as I observed that region likeBhawali was better covered by idea but the reason for this can be attributed to thelonger time period of idea's presence in the region.

8/7/2019 Project 1234

34/45

6. PROMOTIONAL EFFECTIVENESS:

In terms of visibility and reach of the promotional campaigns to the customers

Reliance is better than all others in the Kamoun Zone. One a point-to-point basis Idea

is doing much better than others. I don't have the data for to validate my claim but

promotion is all about visibility to the customers and Idea is clearly more visible than

others on the local level, one can easily conclude this just by scouting the area.

Reliance, Idea and Airtel has captured all the prime locations to advertise.

Effectiveness of the promotional campaign can be judged to through a market

research and it is difficult to comment on that without any data to validate it.

8/7/2019 Project 1234

35/45

QUESTIONNAIRE

Q1) which connection do you have?

IDEA

vodafon

BSNL

airtel

others

INTERPRETATION:

Maximum number of respondent posses BSNL connection due to its better facilityand low cost as compared to other.

Q2) Time duration of having the particular connection?

IDEA

vodafone

BSNL

others

INTERPRETATION:

Respondent keeps the bsnl connection for maximum numbers of months as comparedto other communication network.

8/7/2019 Project 1234

36/45

Q3) Will you recommend your currently service provider company to other?

yes

no

not sur

INTERPRETATION:

Maximum numbers of people are satisfied with their present service provider

company and they dont want to change their connection.

Q4) when you decided to buy a connection, how important is each of the followingfactors in your decision?

extra facilities

connectivity

coverage

customer

care

others

INTERPRETATION:Maximum number of respondent depend upon the coverage factor in their decisionmaking to purchase connection.

8/7/2019 Project 1234

37/45

Q5-. Is advertisement is required to serve the purpose of spreading knowledge of telecom

service provider?.

(a) Yes (b) No

Sales

66%YES

34%

NO

Interpretation:

Advertisement serves a great purpose of providing the knowledge to the customer aboutthe new services and new schemes of any services provider in the market.

8/7/2019 Project 1234

38/45

FINDINGS:

1). In telecom sectorIDEA has a good market share and reputation due to its good

service.

2- Customer is satisfied with the connectivity and availability of new connection inmarket

3-If we see at idea & other together then idea has a larger base of customer satisfaction in

compare to other (beside Airtel). But Reliance is catching up fast.

4- There is not much difference of Quality of service of Airtel &idea

5- Ideas strategies are very flexible & effective.

6-Customer retention is not a major strength of Idea but for Reliance & Airtel it is.

7-Quality of sales force is good of Idea.

8-BSNL has an extensive network coverage then others.

9-Reliance, Airtel, Vodafone and idea have good distribution channels.

10-Idea is weaker in promotional campaigns then Reliance.

8/7/2019 Project 1234

39/45

Recommendations and Suggestions:

. EXTENSIVE NETWORK COVERAGE:

There are many remote areas which do not have network coverage of Idea, reason

may be because there is not much of user concentration, but there are customers

who travel to these area and feel disappointed because of no or poor network

coverage and the network coverage is an important factor for churn (see factor of

churn). Company should ensure that there is no lack of connectivity and coverage

is more extensive, major focus on group connection makes it further more

imperative for the company.

I also came across the fact that company has lot of customer initially due to lack

of network coverage when it first started its operation so many of the customers

have this view that Idea does not have reliable service, in order to get over this

perception it is important to provide an extensive network coverage.

FOCUS ON AREAS WITH LOW PENETRATION

We suggest Idea should look more seriously into Interiors areas where these have

lot of potential and no presence of competitors. I expect that future growth in

sales will come from these areas as there is not much penetration and potential

exists. As I did the study I found out that large no. of people in hill area is small

traders, service class and do have the potential to buy and use cell phone

connection.

CUSTOMER LOST INITAILLY DUE TO POOR NETWORK COVERAGE

SHOULD BE RETAINED

Being a service company word of mouth is very important in such a situation it is

very important to ensure that the customer should at least be made aware of whatIdea has achieved till now, so that they don't act as influencer against Idea for

potential customers in remote area and such influencer or unsatisfied customers

can easily spoil the chances for Idea for the future. Low market share of Idea in

remote area can be attributed to this factor.

.

8/7/2019 Project 1234

40/45

EDUCATIONAL/GOVERNMENT INSTITUTION SHOULD BE TARGETED

Government institutions and Educational institution is a big segment, which has a hugepotential though most of them as BSNL prepaid connection, but again a connectionshould be made available to them.

HIGH INVOLVEMENT PRODUCT:

What is very much visible from the research is that there is a wide gap between

the brand image of Idea nationwide .To fill this gap some initiatives must be

taken. Large-scale promotion should be done to attract customer from all

segments.

CUSTOEMRAWARENESS

PRODUCTQUALITY

PRODUCTAVAILABI-LITY

SELLINGSTAFF

AIRTEL EXCELLENT

EXCELLENT

EXCELLENT

GOOD

IDEA EXCELLENT

EXCELLENT

EXCELLENT

EXCELLENT

VODAFONE

GOOD FAIR FAIR FAIR

RELIANCE

EXCELLENT

GOOD GOOD GOOD

TATA GOOD FAIR GOOD FAIR

The given table we have put all the service providers and matched them on 4 factorswhich are important to ascertain the performance level of the organization and theway customer perceives the product and services of the company. Rating was done onthe scale of Excellent, Good, Fair and poor.

The factors are:

Customer Awareness

Product Quality

Product Availability

Selling Staff

8/7/2019 Project 1234

41/45

Recommendations and Suggestions

1. EXTENSIVE NETWORK COVERAGE

There are many remote areas in Kamoun Zone which do not have network

coverage of Idea, reason may be because there is not much of user concentration,

but there are customers who travel to these area and feeldisappointed because of

no or poor network coverage and the network coverage is an important factor for

churn (see factor of churn). Company should ensure that there is no lack of

connectivity and coverage is more extensive, major focus on group connection

makes it further more imperative for the company.

I also came across the fact that company has lot of customer initially due to lack

of network coverage when it first started its operation in Kamoun Zone so many

of the customers have this view that Idea does not have reliable service, in order

to get over this perception it is important to provide an extensive network

coverage.

2. FOCUS ON AREAS WITH LOW PENETRATION

We suggest Idea should look more seriously into Interiors of Kamoun who have a

very these have lot of potential and no presence of competitors. I expect thatfuture growth in sales will come from these areas as there is not much penetration

and potential exists. As I did the study I found out that large no. of people in hill

area is small traders, service class and do have the potential to buy and use cell

phone connection.

3. CUSTOMER LOST INITAILLY DUE TO POOR NETWORK COVERAGESHOULD BE RETAINED

Being a service company word of mouth is very important in such a situation it is

very important to ensure that the customer should at least be made aware of what

Idea has achieved till now, so that they don't act as influencer against Idia for

potential customers in remote area and such influencer or unsatisfied customers

can easily spoil the chances for Idea for the future. Low market share of Idea in

remote area can be attributed to this factor.

8/7/2019 Project 1234

42/45

4. EDUCATIONAL/GOVERNMENT INSTITUTION SHOULD BE TARGETEDGovernment institutions and Educational institution is a big segment, which has a hugepotential though most of them as BSNL prepaid connection, but again a connectionshould be made available to them.

HIGH INVOLVEMENT PRODUCT:

What is very much visible from the research is that there is a wide gap between

the brand image of Idea nationwide and in Kamon Zone. To fill this gap some

initiatives must be taken. Large-scale promotion should be done to attract

customer from all segments.

CUSTOEMRAWARENESS

PRODUCTQUALITY

PRODUCTAVAILABI-LITY

SELLINGSTAFF

AIRTEL EXCELLENT

EXCELLENT

EXCELLENT

GOOD

IDEA EXCELLENT

EXCELLENT

EXCELLENT

EXCELLENT

VODAFONE

GOOD FAIR FAIR FAIR

RELIANCE

EXCELLENT

GOOD GOOD GOOD

TATA GOOD FAIR GOOD FAIR

The given table we have put all the service providers and matched them on 4 factorswhich are important to ascertain the performance level of the organization and theway customer perceives the product and services of the company. Rating was done onthe scale of Excellent, Good, Fair and poor.

The factors are:

Customer Awareness

Product Quality

Product Availability

Selling Staff

8/7/2019 Project 1234

43/45

Recommendations and Suggestions

1. EXTENSIVE NETWORK COVERAGE

There are many remote areas which do not have network coverage of Idea, reasonmay be because there is not much of user concentration, but there are customers

who travel to these area and feel disappointed because of no or poor network

coverage and the network coverage is an important factor for churn (see factor of

churn). Company should ensure that there is no lack of connectivity and coverage

is more extensive, major focus on group connection makes it further more

imperative for the company.

I also came across the fact that company has lot of customer initially due to lack

of network coverage when it first started its operation in so many of the

customers have this view that Idea does not have reliable service, in order to get

over this perception it is important to provide an extensive network coverage.

FOCUS ON AREAS WITH LOW PENETRATION

We suggest Idea should look more seriously into the areas where these have lot of

potential and no presence of competitors. I expect that future growth in sales will

come from these areas as there is not much penetration and potential exists. As I

did the study I found out that large no. of people in hill area is small traders,

service class and do have the potential to buy and use cell phone connection.

. CUSTOMER LOST INITAILLY DUE TO POOR NETWORK COVERAGESHOULD BE RETAINED

Being a service company word of mouth is very important in such a situation it is

very important to ensure that the customer should at least be made aware of whatIdea has achieved till now, so that they don't act as influencer against Idia for

potential customers in remote area and such influencer or unsatisfied customers

can easily spoil the chances for Idea for the future. Low market share of Idea in

remote area can be attributed to this factor.

.

8/7/2019 Project 1234

44/45

EDUCATIONAL/GOVERNMENT INSTITUTION SHOULD BE TARGETED

Government institutions and Educational institution is a big segment, which has a hugepotential though most of them as BSNL prepaid connection, but again a connection

should be made available to them.

HIGH INVOLVEMENT PRODUCT:

What is very much visible from the research is that there is a wide gap between

the brand image of Idea nationwide and in Kamon Zone. To fill this gap some

initiatives must be taken. Large-scale promotion should be done to attract

customer from all segments.

CUSTOEMRAWARENESS

PRODUCTQUALITY

PRODUCTAVAILABI-LITY

SELLINGSTAFF

AIRTEL EXCELLENT

EXCELLENT

EXCELLENT

GOOD

IDEA EXCELLENT

EXCELLENT

EXCELLENT

EXCELLENT

VODAFONE

GOOD FAIR FAIR FAIR

RELIANCE

EXCELLENT

GOOD GOOD GOOD

TATA GOOD FAIR GOOD FAIR

The given table we have put all the service providers and matched them on 4 factorswhich are important to ascertain the performance level of the organization and theway customer perceives the product and services of the company. Rating was done onthe scale of Excellent, Good, Fair and poor.

The factors are:

Customer Awareness

Product Quality

Product Availability

Selling Staff

8/7/2019 Project 1234

45/45

Bibliography

BOOKS/WEB SITES

Marketing Management (Millennium Edition) Philip Kotler

Marketing Research C.R Kothari

Marketing Research G.C Beri

www.airtelworld.com

www.coai.com

www.trai.comwww.google.com

www.teleindia.com