Indian telecom industry from 1991 2005


Published on

Indian Telecom's most comprehensive report

Published in: Business, News & Politics
1 Like
  • Be the first to comment

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Indian telecom industry from 1991 2005

  1. 1. Created by Shyamlal Sharma A COMPREHENSIVE PROJECT-I Entitled On “Telecommunication Industry” Submitted to Anand Institute of Management Affiliated to SARDAR PATEL UNIVERSITY, V.V.NAGAR In Partial Fulfillment of the Requirement of the Award for the Degree of MASTER OF BUSINESS ADMINISTRATION Under the Guidance of Dr.N.N.Patel (Director) Mr. Govind B. Dave (Faculty Member of AIM) Presented by Students of M.B.A. Semester-III Name Exam Seat. No Shyamlal Sharma 65 ANAND INSTITUTE OF MANAGEMENT M.B.A. PROGRAMME OPP.TOWN HALL, NR.GRID, ANAND December 2005
  2. 2. Created by Shyamlal Sharma PREFACE As a part of our academic curriculum we are suppose to undergo a comprehensive project which comprises of macro analysis for which we had undergone project of telecommunication industry. As a part of the macro analysis we studied various aspects of external environment like industry, groups within industry, market and organizations operating with all these external constraints. We got an opportunity to undergo in-depth analysis of macro environment where we received practical insights and relevant information. We had much needed vital exposure of external environment which would be of great help in enhancing our skills and professional capabilities in the near future. During our association with the project we got support of our faculties, our guide, and telecom professionals. Working on this project was awesome experience for all of us.
  3. 3. Created by Shyamlal Sharma ACKNOWLEDGEMENT We would like to express our sincere gratitude to Anand Institute of Management‟s Director Dr. N.N Patel for believing in us and providing us great interface, which enabled us to perform this project more professionally. We would like to acknowledge our sincere thanks to our director and our project guide Dr. N.N Patel, Senior Faculty member Mr. Govind Dave and other faculty members of AIM for their kind tutelage and guidance through out the project. Their interest, enthusiasm and engagement were major motivating factors. They were always willing to respond to all our queries with patience, from their busy schedule. During our Project, we are benefited from the help of many people working in Telecom industry. Their kind co-operation has made our project successful. We wish our sincere thanks to,  Mr. Pradeep Bhansali Senior Manager, Reliance infocomm.  Mr. Mahadevan Iyer Senior Manager, Fascel Limited  Ms. Megha Sharma Relationship Manager, Fascel Limited  Mr. Chirag Mehta CEO, ICENET  Mr. Arpan Pathak Executive, Hutch shop.  Mr. Rahul Panchal Executive, Postpaid, Mphasis  Ms. Varsha Panwar CCE, Tata Teleservices  Mr. Yatin Chaturvedi Senior Executive, VAS, Tata Teleservices It is quite fortunate that we have got the support and well wishes of many with us during the whole project. We are sincerely thankful to our family, friends and all those names may have not appeared here, but whose contribution has not gone unnoticed.
  4. 4. Created by Shyamlal Sharma Last but not the least; we are very much thankful to all the telecommunication firms & authorities (websites) from which we have collected information. We are very much thankful to all the names attached to Anand Institute of Management (AIM), which have helped us through out the project. Shyamlal Sharma
  5. 5. Created by Shyamlal Sharma DECLARATION We, Apurv, Nrupesh, Sanket, and Shyamlal here by declare that the report on “Comprehensive Project-I” entitled on “Telecommunication Industry” is a result of our own work and our indebtedness to other work publications, if any, have been duly acknowledged. Place: Anand Shyamlal Sharma Date: 30/12/2005
  6. 6. Created by Shyamlal Sharma EXECUTIVE SUMMARY The Indian telecom market has been displaying sustained high growth rates. Riding on expectations of overall high economic growth and consequent rising income levels, it offers an unprecedented opportunity for foreign investment. A combination of factors is driving growth in the telecom market, promising rich returns on investments. Over the past 10 years, India has registered the fastest growth among major democracies, having grown at over 7 per cent in four years during the 1990s. It represents the fourth largest economy in terms of “Purchasing Power Parity”. According to a recent Goldman Sachs report, over the next fifty years, Brazil, Russia, India and China - the BRIC economies could become a much larger force in the world economy. “India could emerge as the world‟s third largest economy and of these four countries; India has the potential to show the fastest growth over the next 30 to 50 years”. The report also states that, “Rising incomes may also see these economies move through the „sweet spot‟ of growth for different kinds of products, as local spending patterns change. This could be an important determinant of demand and pricing patterns for a range of commodities”. The share of the services sector as a percentage of total GDP is also predicted to rise from the current 46 per cent to about 60 per cent by 2020. The boom in the services sector is slated to come from India, emerging as a chosen destination for software and other IT enabled services, tourism etc. According to a Nasscom- McKinsey & Co. Study, by 2008, the Indian IT software and services sector will account for US$ 70-80 billion in revenues; employ 4 million people, and account for 7 per cent of India‟s GDP and 30 per cent of India‟s foreign exchange inflows. Population projections from the Planning Commission of India suggest that the share of the working age population (15-64 years) in total population will
  7. 7. Created by Shyamlal Sharma grow from the current 59 per cent to about 65 per cent, translating into 882 million by year 2020. According to the Vision 2020 document of the Planning Commission of India, the country will witness continued urbanization. The urban population is expected to rise from 28 per cent to 40 per cent of total population by 2020. Future growth is likely to be concentrated in and around 60 to 70 large cities having a population of one million or more. This profile of concentrated urban population will facilitate customized telecom offerings from operators. Over the years, spending power has steadily increased in India. Between 1995 and 2002, nearly 100 million people became part of the consuming and rich classes. Over the next five years, 180 million people are expected to move into the consuming and very rich classes. On an average, 30-40 million people are joining the middle class every year, representing huge consumption spending in terms of the demand for mobile phones, televisions, scooters, cars, credit goods and a consumption pattern associated with rising incomes. ABSTRACT Telecom industry is cluster of industries like mobile, fixed line, internet service, E-mail, VSAT and PMSRT. For the sake of convenience and better understanding we divided telecom industry in four parts-[A] mobile services, [B] Fixed services, [C] Internet Services and [D] Others; which includes VSAT and PMSRT. We have consistently followed this format throughout the project. Today the word telecom is synonymous to mobile industry but in fact mobile is just a part of telecom industry. Telecom comes with a number of technical jargons and abbreviations; we have also provided glossary and abbreviations at the end of the project for reader‟s convenience. Pricing was critical and difficult issue as there are no of operating firms and they provide various schemes with time to time, we overcame this problem by providing most general pricing schemes. Telecom with all its subsets of industry is very difficult to analyze, we have taken the most general analysis that affects to telecom.
  8. 8. Created by Shyamlal Sharma Objective of the study 1. To understand Macro Environment variables like government policy, licensing and other regulations on telecom industry. 2. To get an initial idea of how the firms are operating within the constraint, imposed by external environments. 3. To understand telecom industry as whole (its macro-environment, market, customer, segmentation). 4. To know the market share and number of players in the industry. 5. To know the key issues, trends and future of the industry. 6. To apply abstract knowledge of strategic management in the telecom industry.
  9. 9. Created by Shyamlal Sharma TABLE OF CONTENTS Preface Acknowledgement Declaration Executive Summery SR.NO. PARTICULARS PAGE NO. 1 Evolution and Growth of Industry in India 01 2 Product Profile 19 3 Demand Determinants in the Industry 25 4 Players In the Industry 40 5 Distribution Channel in the Industry 56 6 Key Issues and Trends 61 7 PESTEL Analysis 89 8 Industry Analysis using Porters Five Forces Model 110 9 Future Outlook 115 10 Conclusions/Suggestions 122 Annexure Page No. 124 Bibliography Page No. 142
  10. 10. Created by Shyamlal Sharma LIST OF GRAPHS/DIAGRAMS SR.NO. PARTICULARS GRAPH NO. PAGE NO. 1 Telecom market break-up 1.1 04 2 Growth in teledensity 1.2 07 3 Growth of Mobile services 1.3 08 4 Mobile growth & effective charges 1.4 09 5 Mobile subscriber base 1.5 12 6 Fixed service growth 1.6 14 7 Growth of PMRTS 1.7 16 8 Growth of VSAT 1.8 17 9 Prepaid offerings 3.1 37 10 Market share of mobile services 4.1 46 11 Market share of GSM 4.2 48 12 Market share of CDMA 4.3 49 13 Market share of fixed line 4.4 51 14 Market share of Internet 4.5 52 15 Market share of VSAT 4.6 53 16 Market share of PMSRT 4.7 55 17 Post paid charges for average mobile user 6.1 81 18 Age profile of mobile users 6.2.1 82 19 Age profile of mobile phone users at various time of acquisition 6.2.2 82 20 Mobile telephone market headed 6.2.3 83 21 Impact of NTP on subscriber base 7.1 99 22 Global telecom growth trend 9.1 115 23 Expected future growth 9.2 116
  11. 11. Created by Shyamlal Sharma LIST OF TABLES SR.NO. PARTICULARS Table No. Page No. 1 Telecom market break-up 1.1 04 2 Telecom growth 1.2 06 3 Performance of Mobile service 1.3 13 4 Fixed services providers & subscribers 1.4 14 5 Post paid talk plan GSM 3.1 26 6 Post paid talk plan CDMA 3.2 27 7 Pre-paid talk plan GSM 3.3 29 8 Pre-paid talk plan CDMA 3.4 29 9 Fixed line charges 3.5 30 10 Rate card of internet dial-up services 3.6 32 11 Rate card of internet broadband services 3.7 33 12 Market share of mobile service 4.1 46 13 Market share of GSM 4.2 47 14 Market share of CDMA 4.3 49 15 Market share of Fixed line 4.4 50 16 Market share of internet 4.5 52 17 Market share of VSAT 4.6 53 18 Market share of PMSRT 4.7 55 List of Models SR.NO. PARTICULARS Model No. Page No. 1 Life cycle stage of Indian mobile services 1.1 11 2 Penetration in Mobile Services 3.1 35 3 Industry deregulation and liberalization 3.2 36 4 Implementation of CPP regime 3.3 38 5 Distribution network in telecom market place 5.1 56 6 Global System for Mobile Communication (GSM) 6.1 61 7 Understanding subscriber typology 6.2 72 8 TRI-M grid model 6.3 73 9 Monitoring changing customers needs 6.4 74 10 PESTEL model 7.1 89 11 Tax Structure 7.2 92 12 Regulatory Structure 7.3 93 13 Porter five force model 8.1 111
  12. 12. Created by Shyamlal Sharma
  13. 13. Created by Shyamlal Sharma TELECOM IN INDIA The Indian telecom market has been displaying sustained high growth rates. Riding on expectations of overall high economic growth and consequent rising income levels, it offers an unprecedented opportunity for foreign investment. A combination of factors is driving growth in the telecom market, promising rich returns on investment. Over the past 10years, India has registered the fastest growth among major democracies, having grown at over 7% in four years during the 1990s. It represents the fourth largest economy in terms of purchasing power parity. Spread over 3.3 million sq kms, the geographical spread and the regional diversity found in this country is unmatched by any other place in the world. Our human capital is our most distinguishing factor. India has the potential to show the fastest growth over the next 30 to 50 years. Rising income may also see these economies move through the sweet spot of growth for different kinds of products, as local spending patterns change. This could be an important determinant of demand and pricing patterns for a range of commodities. The share of the service sector as a percentage of total GDP is also predicted to rise from the current 46% to 60% by 2020. The boom in the service sector is slated to come from India, emerging as a chosen destination for software and other IT enabled services, tourism etc. The telecommunication sector is growing at compound annual growth rate of 13.42 percent is estimated for 2002-2006. The future of the industry lies in the mainline and cellular segments and constant innovative technologies such as IP (Internet Protocol) based services. Revenues from voice based services will gain sustained growth. Big money is pouring into the Indian telecom market. Plans of several players suggest that approximately $7 billion investments are in the pipeline
  14. 14. Created by Shyamlal Sharma for augmenting networks across the country. Hong Kong based Hutch plans to raise $1 billion. The Tata, Birla and AT&T consortium - Idea is looking to refinance $850 million while the Ambani owned Reliance Infocomm is also believed to be in the money market to rise more than US $ 1 billon. According to an Economic Times report, Hutch and Reliance are planning to raise the debt on the strength of their own balance sheets, instead of relying on the balance sheets of their cash rich parents. More funds are expected to be pumped in once the government officially allows foreign investors to increase their holdings in Indian companies from 49 per cent to 74 per cent, as proposed in India‟s 2004-05 annual budgets. Clearly, success begets fresh investments and a chunk of this is going towards enhancing switching capacity. The actual total equipped switching capacity of all the basic service operators in the country increased by 10.5 million units from 2003 to 2004. The switching capacity of mobile operators has doubled from 33 million in 2000 to 63.4 million in 2004. INDIA FAST PACE GROWTH  Largest democracy  4th largest economy by PPP index  6th largest energy consumer  GDP growth to continue between 6-8%  3rd largest economy by 2050  Leading in IT and ITES  Our social economic credentials are strong, like vibrant democracy. TELECOM AND INDIA Population Over 1 billion States/UTs 35 Geographical Area 3.3 m n sq kilometers Languages recognized 22 Business language English Per Capita Income US $ 534, March 2005
  15. 15. Created by Shyamlal Sharma TELECOM MARKET  7TH largest telecom network in the world.  Size (2003) US $ 9 billion  Size (Projected) US $ 23 billion  Telecom network growth rate 30%  Fixed lines (Dec. 2004) 44.76 million  Wireless connection (Dec. 2004) 48 million Today, India has the seventh largest telecom network in the world, which is growing at an overall rate of over 20%., March 2005
  16. 16. Created by Shyamlal Sharma TELECOM SERVICE MARKET Telecom Market Break-up Table No. - 1.1 Wireless 46% GSM 19% CDMA 18% Domestic long distance 2% International long distance 12% Data 2% Satellite 0.35% Others 0.65% Telecom Market Break-up Graph No.-1.1 19% 18% 2% 12% 0.35%2% 0.65% 46% wireless GSM CDMA domestic long distance international long distance data sattelite others Here in the above graph Wireless service contribute about half of the total service market; GSM and CDMA service are contributed 37% against the Wireless services. The domestic Long Distance is used by 2 %. Wireless users are 46%. Internet Long Distance users are 12 %. The data are used by 2%. The satellite users are 0.35%. The others are 0.65%. This data is of 31st December 2004. Source-telecom regulatory authority of India, study paper no-1/2005
  17. 17. Created by Shyamlal Sharma GROWTH IN THE INDUSTRY One of the fastest growing sectors in the country, telecommunications has been growing at a feverish pace in the past few years. The speed of growth can be gauged by the fact that in 2004, ten years after private telephony was introduced in India, the mobile subscriber base had crossed the number of fixed line connections. While fixed lines touched 44 million at the end of 2004, the cellular user base registered a 68 per cent growth to touch the 48-million mark. More than a third of these subscribers were added during 2004. The total telecom subscriber base, consisting of fixed as well as mobile users, registered a growth of 31.42 per cent to touch 92.76 million at the end of 2004. The gross telecom user base stood at 70.58 million at the end of 2003. (According to the Telecom Regulatory Authority of India (TRAI), the growth in the mobile subscriber segment picked up in December 2004 after remaining at around 1.5 million per month for the previous two months.) The year 2004 ended with the tele-density reaching an all-time high of 8.62, as compared to 6.65 at the end of 2003, an increase of over 30 per cent. In the mobile segment, additions consisted of 1.42 million GSM subscribers and 0.53 million CDMA subscribers. The total of 19.51 million mobile users in 2004 marks an increase of 11.5 per cent over the 17.49 million additions made in 2003. Even in fixed line, 2.67 million subscribers were added as compared to 2.15 million new users during 2003, registering an increase of 24 per cent. In the month of January 05 the total subscribers were 94.92 million which ended up 98.08 million in March 05. The tele-density is also increasing from 8.80 in jan 05 to 9.08 in march 05. Fixed line has also shown marginal increment from 45.15 million to 45.90mn. The biggest growth driver was mobile which picked up from 49.77 in January 05 to 52.17 million in March 05.
  18. 18. Created by Shyamlal Sharma Telecom Growth Table No.-1.2 Telecom statistics (Figures In million) January' 05 February'05 March'05 Total subscribers 94.92mn 97.03mn 98.08mn Tele-density 8.80 9.0 9.08 Fixed line 45.15mn 45.54mn 45.90mn Additions during the month 0.39mn 0.39mn 0.36mn Mobile 49.77mn 51.49mn 52.17mn
  19. 19. Created by Shyamlal Sharma Source: The above table shows the growth in every sector of telecom industry in subsequent months. Total additions during the month 1.77mn 1.67mn 0.73mn GSM additions 1.27mn 1.13mn 1.24mn CDMA additions 0.5mn 0.54mn 0.52 mn
  20. 20. Created by Shyamlal Sharma Growth in Tele-density Growth of Tele-density of India- post reforms Graph No.-1.2  The growth in tele-density each year 2003-04(-2%) and 2004-05(- 2%)> 50 year growth 1948-1998 (-1.92%).  For phase III- each year growth must >4.5% in tele-density  Growth started in phase I of reforms 1998-2003  Phase II 2003-2005 it picked up further  Phase II growth was mobile driven and was consequent to certain decisions taken govt. /TRAI. Source-telecom regulatory of India, study paper no-2/2005
  21. 21. Created by Shyamlal Sharma [A] Mobile Services Subscriber base: Almost 1.5 million wireless subscribers added every month GSM: 37.37 million CDMA: 11 million  Number of networks (GSM) 70  Number of cities covered (GSM) 2000 Growth of mobile services Growth of mobile services Graph No.-1.3, October 2005  Revenue to increase 3 times in the next 5 years  Current tele-density of 8.8 % set to increase to 20% in the next 5 years beating  Government targets by 3 years  Growth rate about 2.5 million subs per month  Mobile subscriber base has surpassed the fixed lines 50 72 93 130 164 199 108 78 48 138 28 10 23-25 9 - 50.0 100.0 150.0 200.0 250.0 2002 2003 2004 2005E 2006E 2007E 0.0 5.0 10.0 15.0 20.0 25.0 30.0 Total Mobile Revenues
  22. 22. Created by Shyamlal Sharma Mobile growth and effective charges Mobile growth and effective charges Graph-1.4 Source: In the above graph, the period is one year from Mar 98 to Mar 05.In phase 1 we have increment in charges from Mar 98 has 0.88 than in Mar 03 phase 1 has Rs 6.50/min.  While limited mobile has same but some there decrement in Rs. In Mar 98 it is Rs 16 / min where NTP 99 was acted but then the Telecom tariff had come & the price got down at 14.  While ion the Mar 01 & Mar 02 the 3rd & 4th Operator has come & WLL introduced then the prices were at Rs 4 and Rs 3. In mar 03 CPP was there it is same as Rs 3/min. While in the Mar 05 is 1 Rs .In mar 04 the subscribers were 33.60 million. In the mar 05 phase2 the users were 52.2 millions. So increment in the users even decrement in prices as well.
  23. 23. Created by Shyamlal Sharma  TRAI facilitates huge reduction in forborne tariffs in 2003-05.  Measures indicated in boxes-and by increasing competition.  Also by allowing handsets sales in installments.  Mobile growth stepped up significantly-once mobile and fixed line tariffs become equal  Mobile then became the telephone of the working class.
  24. 24. Created by Shyamlal Sharma Source: (Reports) DDyynnaammiicc CCoommppeettiittiioonn EEqquuiilliibbrriiuumm RRuummbblliinnggss IIddeennttiittyy ccrriissiiss RReeffooccuuss DDyynnaammiicc ccoommppeettiittiioonn NNTTPP--11999944 NNTTPP--11999999  State regulated firms  Strategy heavily influenced by Government and Regulators  Corporate values based on public interest  Limited customer choice  Threats of privatisation  Fully adjusted marketplace  No distinction between incumbents and challengers  Wide range of customer choice  Normal market forces apply  Industry consolidate s  Mobile fixed crossover  Technologic al advances lead to substitutes  Niche players evolve / Call-back operators provide service  Regulators formed  Competition begins  An argument for „Strategic Partnership s  Traditional assumptions challenged  Marketing and sales focus  Regulator v/s Provider conflict  Increasing competition  Losing key competencies  Competitors find niche or die out  Industry settles  Greater emphasis on shareholder value  Focus on customer satisfaction Foreign Promoter Exits – Bell Canada, British Telecom, Millicom, Shinawatra, Swisscom, Telecom Italia, Telekom Malaysia, Telia, Telstra, Vodaphone Indian Promoter Cash-Outs – HFCL, Max, RPG, Usha Foreign Promoter Exits – Firsy Pacific, TIW, Vodaphone Indian promoter Exits – RPG, Escorts UUnniiffiieedd LLiicceennssiinngg 22 000011119999991199998811999955-- 11999966 1199997711999944 22000000 22000022 22000033UUppttoo 11999944 22000044 Life Cycle Stage of Indian Mobile Service(1.1)
  25. 25. Created by Shyamlal Sharma Mobile Subscriber base Mobile Subscriber base Graph 1.5 Source: We have Minister‟s targeted year 2005-07in Phase 3. Other two phases are Phase 1, Phase 2. In Phase 1 (1998– 2003) the subscribers were increased from 0.88 to 13 million. In Phase 2 (2003 – 05) the subscribers were from 13 to 52.5 million. In the Phase 3 It is at 180 million. It shows that it is increased steadily.  Phase II of growth was primarily mobile driven like in other countries.  Higher growth required in phase III- additional subscribers should go up to >4 million per month as against present trend of 1.5 – 2 million per month.
  26. 26. Created by Shyamlal Sharma Performance of Mobile Services providers Table 1.3 (Subscriber base in million) Source: The above table shows the growth rate in mobile subscriber base, as all the service providers in period from June 2004 to March 2005.
  27. 27. Created by Shyamlal Sharma [B] Fixed Service Fixed service growth Graph 1.6 Source: We have Phase 1 from 1998 to 2003 the subscribers were 17.08 to 38.43 million. While in Phase 2 the users were 41.48 to 42.84. While in the Phase 3 (P.M. Target by 2005-07) 46.19 to 70 million. Performance of fixed service providers Table 1.4 (Subscriber base in million) Source: The above table shows the performance of the fixed line services as in subsequent months starting from June 2004 to June 2005.
  28. 28. Created by Shyamlal Sharma [C] Internet service provider For the quarter ending June 2005, 168 Internet Service Providers were operational. Bharat Sanchar Nigam Ltd (BSNL) has retained its top position and reported a subscriber base of 20.17 Lakhs against 18.39 Lakhs during the last quarter. Mahanagar Telephone Nigam Limited (MTNL) has retained second position with a subscriber‟s base of 11.11 Lakhs against 10.12 Lakhs subscribers during the last quarter. M/s Sify Limited is still on the third position with a subscriber base of 8.46 lakhs as against 8.11 lakhs. M/s Videsh Sanchar Nigam Limited is at fourth position with subscriber base of 6.41 lakhs. Reliance Communications Infrastructure Ltd. reported a subscriber base of 2.84 Lakhs and remained at fifth place during the quarter ending 30th June 2005 (Ref Table 3.1). The reported subscriber base has touched 58.92 lakhs as on quarter ending 30th June 2005 as compared to 55.54 lakhs during the preceding quarter registering an increase of 6.08 % during the quarter. Internet Telephony: - The Internet Telephony was permitted to Internet service providers w.e.f 1st April‟02. DOT has given permission to 121 ISPs to offer Internet Telephony services as on March 2005, and as per the report submitted to TRAI, 51 ISPs have started Internet Telephony services. Total minutes of the usage for Internet Telephony during the quarter were 39.1 million, as compared to 41.52 million for the last quarter. 1. Leased Lines Connectivity: - The numbers of Leased Lines connections reached 11,547 this year. 2. Cyber Cafes/Community Internet Centers (CIC): - There are reported to be 9172 Cyber Cafes during the quarter ending June 2005. 3. Broadband Connectivity (>=256 Kbps) The number of Broadband subscribers (with a download speed of 256 Kbps or more) is 3,99,253 out of which 66,040 are DSL subscribers. The growth during the quarter was order of 118% over previous quarter. 4. International connectivity: -
  29. 29. Created by Shyamlal Sharma The bandwidth owned by various IGSP for their ISP operations and Leased lines is reported to be 8.9 GB for downlinking and 8.8 GB for uplinking. [D] Other Services (1) Public Mobile Radio Trunked Service (PMRTS): -  49 licenses in 25 cities held by 15 companies for analogue technology  New licenses to use only digital technology  No entry fee. License fee in form of revenue share at 5 percent, in addition to spectrum charges Growth Rate of PMRTS subscribers Growth Rate of PMRTS subscribers Graph-1.7 We have Apr-Jun 04 the growth rate is -0.26%, in the July – Sep is 1.12%, Oct – Dec is 1.79 %, Jan – Mar is 0.68 %, Apr – Jun is 0.52 %. So it is clear that it is changeable. Public Mobile Radio Trunked Service (PMRTS): - Out of 13, only 12 service providers of Public Mobile Radio Trunked Services have submitted their reports in this quarter.  Performance during the Quarter Ending 30th June 2005.
  30. 30. Created by Shyamlal Sharma  The subscriber base of PMRTS increased from 26330 in Mar 2005 to 26467 in June 2005 registering a marginal growth rate of 0.52%.  Delhi, Mumbai, Bangalore and Chennai together account for 72.06% of market share of the total subscribers. Delhi leads the tally with the market share of 8737 subscribers followed by Bangalore, Mumbai and Chennai with the market share of 4145, 3718 and 2471 subscribers respectively. (2) VSAT services: - V-SAT closed users group service becoming increasingly popular for data communication.  Over 15,000 V-SATs operational  Attractive investment opportunities exist in this sector  11 licenses issued  License for a period of 20 years, extendable by 10 years  License fee in form of revenue share at 10 percent inclusive of USO  One time entry fee of Rs. 3.0 million  Use of Ku-band and extended C-band permitted  Transmission rate increased from 64 kbps to 512 kbps Growth Rate of VSAT Subscribers Growth Rate of VSAT Subscribers Graph-1.8
  31. 31. Created by Shyamlal Sharma In the graph no.1.8, the year from Jun 04 to Jun 05. In the Jun 04 the growth is at 10.96%, in the sep 04 5.37%, Dec 04 it is 12.24% In the Mar 05 it is 5.75%, while in the Jun 05 it is 5.88%. VSAT Services Providers VSAT services are being provided by 9 VSAT service providers. Performance during the quarter ending 30th June 2005:  VSAT services are being provided by 9 VSAT service providers.  Telstra Vishesh has not submitted their report in this quarter, so the figure of last quarter has been taken.  In the present quarter, there was an addition of 2252 new subscribers. The total number of subscribers increased from 38303 in Mar 2005 to 40555 in Jun 2005, registering a growth of 5.88% as against the number of subscribers of each service providers along with the Market Share in terms of Percentage of Subscribers as on 30th June 2005 is given in Table.
  32. 32. Created by Shyamlal Sharma
  33. 33. Created by Shyamlal Sharma Product Profile (services) [A] Mobile services Mobile products can be divided into two parts on the basis of payment. 1. Prepaid 2. Postpaid There are two kinds of products in mobile industry on the basis of technology. 1. GSM- product & services GSM is by far the most broadly deployed digital wireless standard in the world. It has over 400 million customers to date in over 150 countries, with service provided by over 400 operators. Other technologies used are CDMA and TDMA. 2. CDMA- product & services CDMA is a digital communication technology to provide PCS service used by some carriers in which an air interface assigns a code to each data packet sent over the air. The name CDMA is often used to refer to the IS-95 communications standard. With both the above products all the operators are providing following services. a) call management service b) SMS Based Service c) Value Added Service d) Roaming e) Other services operator specific (a) Call management services  CLIP-Caller line identification presentation  Call wait/ call hold  Call conference  CLIR-caller line identification restriction  Itemized bill  Call Divert
  34. 34. Created by Shyamlal Sharma  Call Barring  Missed Call Alerts (MCA)  Voice mail Service (VMS) (b) SMS based Service  Text Messaging  Mobile Mail  Magic Messaging (Group Message)  Global SMS  M-chat (chatting thru SMS)  M-Chat (messenger) (c) Value Added Services  News  Travel  Dictionary  Stocks  Mobile banking  Reminder  TV services  Ring tones  Logos  Picture messages  Y! Mail  Y! Messenger  Cricket  Astrology  Flash SMS, Blink SMS  Caller tune or dialer tone (d) Roaming  Within India -in circle -outside circle  Outside India
  35. 35. Created by Shyamlal Sharma (e) Other operator specific services  GPRS Services (GSM only) Polyphonic ring tone Java games Downloads News Cinema 3D wallpapers Wab site  Fax and data services (Hutch Only-GSM)  Microsoft Outlook tm (hutch only-GSM)  R-world (reliance only-CDMA)  3-way call conferencing (reliance only)
  36. 36. Created by Shyamlal Sharma [B] Fixed line services Fixed line service providers provides following services. These services may vary from operator to operator. Following are the most common service provided by them. 1. change no announcement 2. public grievance cell 3. std code information 4. international calls 5. password protected std/isd facility 6. wake up call services 7. Call transfer service 8. Call waiting Service 9. Hotline service 10.CLIR 11.Internet service 12.voice mail service
  37. 37. Created by Shyamlal Sharma [C] Internet Service Provider There are various type of products are coming under internet services. Some are purely related to internet surfing by individual while some are purely corporate products.  Dial up  Broad band  Wiman  Bandwidth and corporate solutions  wi-fi hot spots  virtual private network  server co location  Enterprise business solutions  PC to phone Telephony  Device based internet telephony  Domain based e-mail services  Banner Display  E-mail to subscriber
  38. 38. Created by Shyamlal Sharma [D] Others 1) V-SAT (Very Small Aperture Terminal)  Data communication at speeds up to 64kbps.  Support of X.28 and X.25 protocols for data communication.  Voice facility on the VSAT with connection to public telephone network(PSTN of BSNL)  Access to BSNL's RABMN network and Inet Phase I & II networks.  Access to International data networks through GPSS of VSNL.  Shell account access to subscribers of the Internet 2) PMSRT Voice based service that uses VHF band. Similar to mobile telephony but technology differs.
  39. 39. Created by Shyamlal Sharma
  40. 40. Created by Shyamlal Sharma Demand determinants of the Industry Pricing [A] Mobile Services Pricing policy in telecom services differs from service to service and operator to operator. Mobile services can be divided into following sections on the basis of payment. 1) Postpaid Services There are 6 major service providers of GSM-Hutch, Idea, Airtel, BSNL, Spice and Aircell. All service providers provide postpaid connection facility. The activation charges are nearly 500 Rs. Their talk plans are bifurcated in following ways.  General Talk Plan These plans range from 175 Rs. To 1699 Rs. All the GSM operators have same plans. Their offerings are same in terms of general plans. Common General Talk plans are: Hutch FV175, FV399, FV699, and FV899. Idea Buzz175, Buzz399, Buzz499, Buzz599, Buzz999. Airtel Total freedom 399, Total freedom 599, total freedom 999.  CUG plans (Closed User Group Plans) These plans are provided to corporate users and User groups. These plans are specifically designed and offerings vary from corporate to corporate. Common CUG Plans are Group Talk VMC (hutch).  Advanced Rental plan Advanced rental plans are those plans in which customer is required to deposit rental in advance. Hutch provides Talk 1yr, Talk 2 yr, Airtel provides 12 months advanced rental, 24 months advanced rental, idea provides buzz zero 6 months, buzz zero 1 year and buzz zero 2 year.
  41. 41. Created by Shyamlal Sharma Postpaid Talk plans (GSM) Table No.-3.1 Full value plans Talk 1699 Talk 1 yr Talk 2 yr FV 175 FV 399 FV 699 FV 899 Monthly Charges Tariff Plan fee - - - - - Rs 1200 (One time) Rs 1700 (One time) Minimum Billing Amount 175 399 699 899 1699 0 for 12 billings 0 for 24 billings Rs 224 thereafter Rs 224 thereafter CLIP Charges 50 50 50 50 25 25 25 Free local calls - 399 699 899 1200 mins - - STD calls @ 0.50 / min - - - - 200 mins - - Usage Charges Incoming Free Free Free Free Free Free Free Local Outgoing / min to Hutch phones 0.99 0.5 0.5 0.5 0.4 0.99 0.99 to other mobiles 1.99 1.69 1.19 0.99 0.4 0.99 0.99 to fixed phones 1.99 1.69 1.19 0.99 1.1 2.25 2.25 STD / min 2.64 2.64 2.64 2.64 2.64 2.64 2.64 ISD / min Gulf & Africa 17.24 17.24 17.24 17.24 17.24 17.24 17.24 Rest of the world 14.24 14.24 14.24 14.24 14.24 14.24 14.24 SMS Local Hutch 1 0.5 0.5 0.5 0.5 1 1 Local Mobiles 1 1 1 1 1 1 1 National / Local Fixed 2 2 2 2 2 2 2 International 5 5 5 5 5 5 5 *=prices by leading provider Dec 05
  42. 42. Created by Shyamlal Sharma Talk Plans (CDMA) Table No.-3.2 Plan Joy 99 Joy 149 Joy 299 Joy 399 Joy 499 Joy 649 ZR Rental 99 149 299 399 499 649 Plan charges 25 25 Nil 25 25 25 CLIP 25 25 Nil 25 25 25 Free Intra- Circle Talk time Nil Nil Nil Nil Nil 649 All Reliance Phones 1.5 0.99 0.5 0.4 0.4 0.5 Other Mobiles (GSM/CDMA) 2.2 1.79/ 0.99* 0.5 1 1 1 Landline 2.2 1.79 1 1 1 1 All Reliance Phones 2.2 1.79 2.4 1 1 2 Other Mobiles (GSM/CDMA) 3 2.49 2.4 1 1 2 Landline 3.49 2.49 2.4 2.5 1 2 Local SMS 1 1 1 0.5 0.5 0.5 National SMS 1 1 1 0.5 0.5 0.5 International SMS 3 3 3 3 3 3 1234 services 2 2 2 2 2 2 (From 1st Dec 2004) Other SMS services 2 2 2 2 2 2 *=prices by leading provider Dec 05
  43. 43. Created by Shyamlal Sharma 2) Prepaid services Prepaid services are big money spinner in both GSM and CDMA. More than 70 % of revenue comes from prepaid users. They keep money moving. They are the biggest source of earning in mobile technology. Previously there was no differentiation till airtel came up with FRIENDS Prepaid. It was the first differentions prepaid mobile services. Similar kind of prepaid were also provided by other operators. With the increase in penetration in rural market airtel and hutch came up with new prepaid- hutch calls it “cutting” and Airtel calls it “super bachat card”. These prepaid cards are specially meant for rural areas and charges are less compared to general prepaid. Rural Prepaid card subscriber can subscribe to any general offer but general prepaid card subscriber can‟t go for rural offering.  New Prepaid: 99/- general  Rural Prepaid:-220/-  No Deposit for ISD, STD  Talk time available as per scheme  Pulse Rate 60 secs
  44. 44. Created by Shyamlal Sharma Prepaid call charges (GSM) Table No.-3.3 service providers/services Hutch Airtel Idea BSNL Spice Aircell call charges 1. company to company - 2 1 - - 0.75 1. mobile to mobile 2.25 2.25 2.00 0.9 2 1.20 2. mobile to others 2.25 2.25 2.00 1.2 2 2.49 SMS charges 1. local 1.5 1 1 0.6 1 1 2. national 2 2 2 2 2 3. international 5 5 5 5 5 4. VAS sms 2 3 3 3 3 . STD charges 1. mobile to mobile 2.64 2.9 2.75 2 2.64 2.25 2. mobile to others 2.64 2.9 2.75 2.4 2.64 2.49 International charges 1. gulf countries, Africa 18.24 10.99 18.25 18.25 19.99 2. Rest of the world 15.24 40 15.25 15.25 16.99 incoming (calls n sms) free free free free free free Prepaid (CDMA) Table No.-3.4 service providers/services Reliance Tata call charges 1. company to company 0.99 0.9 1. mobile to mobile 0.99 0.9 2. mobile to others 1.79 0.9 SMS charges 1. local 1 1 2. national 2 2 3. international 3 3 4. VAS sms 2 2 . STD chages 1. mobile to mobile 1.79 1.8 2. mobile to others 2.49 1.8 International charges 1. gulf countries, Africa 19.99 12 2. Rest of the world 16.99 12 incoming (calls n sms) free free
  45. 45. Created by Shyamlal Sharma [B] Fixed lines Charges Fixed lines Charges Table No.-3.5 Particulars Standard Package BSNL Alternate Packages BSNL Urban (TRAI) General BSNL BSNL BSNL Rural Rural Urban Economy Special Super A. Registration Charges Rs.500 Rs.500 Rs. 500 1. Security deposits (NSD) - - - - - - - 2. Security deposits (ISD) - - - - - - - D. Advance payments Rental Rental as per gen. Package as per gen. Package as per gen. Package E. Installation Charges less than 500 lines Rs.300 Rs.300 Rs.300 Rs.300 Rs.300 Rs.300 500 lines and above** Rs. 500 Rs. 500 Rs. 500 Rs. 500 Rs. 500 Rs. 500 G. Billing period/ cycle One month One month One month One month One month (I) Other than Sr. Citizen Exch system capacity <= 999 Rs.70 Rs.50 Rs.120 - - - between 1000 and 29999 Rs.120 Rs.110 Rs.120 - - - between 30000 and 99999 Rs.200 Rs.150 Rs.180 - - - > 100000 Rs.280 Rs.210 Rs.250 - - - Plan charges( incl. Monthly rental) - - - Rs.350 Rs.750 Rs.1,650 (ii) For Sr. Citizen only Exch system capacity <= 999 Rs.70 Rs.50 Rs.120 - - - between 1000 and 29999 Rs.120 Rs.110 Rs.120 - - - between 30000 and 99999 Rs.180 Rs.150 Rs.180 - - - > 100000 Rs.250 Rs.210 Rs.250 - - - Plan charges( incl. Monthly rental) - - - Rs.350 Rs.750 Rs.1,650 H2. Commercial Subscribers between 30000 and 99999 Rs.200 Rs.150 Rs.180 - - - > 100000 Rs.280 Rs.210 Rs.250 - - - I. Free calls (per month) 50 75 50 150 600 1800 Unit Call Charges First 300 MCUs per 0.80 0.80 1.00 1.20 0.00 0.00
  46. 46. Created by Shyamlal Sharma Particulars Standard Package BSNL Alternate Packages BSNL Urban (TRAI) General BSNL BSNL BSNL Rural Rural Urban Economy Special Super month except free calls > 300 to 600 1.20 1.20 1.20 1.20 0.00 0.00 > 600 to 700 1.20 1.20 1.20 1.20 1.10 0.00 > 700 to 1800 1.20 1.20 1.20 1.20 1.10 0.00 > 1800 1.20 1.20 1.20 1.20 1.10 1.00 J. Pulse rate (time duration ) for local calls Basic to Basic incl FWT + UASP (Fixed) 180 180 180 180 180 Basic to WLL (M) - Limited Mobility 90 90 90 90 90 Basic to Cell (a) To level 94 60 60 60 60 (b) All others 45 45 45 45 Basic to UASP (a) Both Limited and fully mobile 45 45 45 45 *=prices by leading provider Dec 05
  47. 47. Created by Shyamlal Sharma [c] Internet Services Mainly there are two services that are used in internet services and they are broad band and dial up. In dial up, pricing strategies are on the basis of hours and their validity. In broadband it depends on kbps download. Rate Card of Dial up Services Table No.-3.6 Sr. No. Hours Extra Validity Rates 1. 30 Hours 5 Hours 1 Year New Account Rs. 331 2. 60 Hours 15 Hours 1 Year New Account / Renewal Rs. 606 3. 100 Hours 30 Hours 1 Year New Account / Renewal Rs. 937 4. 150 Hours 45 Hours 1 Year New Account / Renewal Rs. 1,190 5. 250 Hours -- 1 Year New Account / Renewal Rs. 1,818 6. 500 Hours -- 1 Year New Account / Renewal Rs. 3,086 7. 1000 Hours -- 1 Year New Account / Renewal Rs. 4,408 8. Unlimited 5 Days 1 month New Account Rs. 606 9. Unlimited 20 Days 3 months New Account / Renewal Rs. 1,653 10. Unlimited -- 6 months New Account / Renewal Rs. 2,865 11. Unlimited -- 1 year New Account / Renewal Rs. 4,959 *=prices by leading provider Dec 05
  48. 48. Created by Shyamlal Sharma Other Internet Services Rate Card of Broad Band services Table No.-3.7 Time Based Packages 64/128 kbps Pack Code Bandwidt h Package Validity Package Price New / Renewal Night Package (9pm to 9am) T1 64 kbps 50 Hours 6 months Rs. 1000 / No Renewal - T2 64 kbps 100 Hours 1 Year Rs. 1800 Rs. 1000 T3 64 kbps 200 Hours 1 Year Rs. 3000 Rs. 1500 T4 64 kbps 500 Hours 1 Year Rs. 6000 Rs. 3600 T5 128 kbps 100 Hours 1 Year Rs. 2500 - T6 128 kbps 200 Hours 1 Year Rs. 4500 - T7 128 kbps 500 Hours 1 Year Rs. 8000 - Unlimited Packages 64/128 Kbps (Data Transfer Unlimited) Pack Code Bandwidt h Package Validity New / Renewal Night Package (9pm to 9am) U1 40 kbps Unlimite d 1 Year Rs. 6000 - U2 64 kbps Unlimite d 1 Month Rs. 1100 Rs. 750 U3 64 kbps Unlimite d 3 Months Rs. 3000 Rs. 2000 U4 64 kbps Unlimite d 6 Months Rs. 5500 Rs. 3500 U5 64 kbps Unlimite d 1 Year Rs. 10000 Rs. 6000 U6 128 kbps Unlimite d 1 Month Rs. 2000 - U7 128 kbps Unlimite d 6 Months Rs. 11000 - U8 128 kbps Unlimite d 1 Year Rs. 20000 - Volume Based Broadband Packages (Data Transfer) Pack Code Bandwidt h Package Validity Package Price New / Renewal Night Package (9pm to 9am) DT-1 256 kbps 0.5 GB 1 Year Rs. 1250 - DT-2 512 kbps 1.0 GB 1 Year Rs. 2000 - DT-3 512 kbps 2.5 GB 1 Year Rs. 4000 - DT-4 512 kbps 10 GB 1 Year Rs. 12500 - *=prices by leading provider Dec 05
  49. 49. Created by Shyamlal Sharma [D] Others 1) VSAT Services  VSATs are available on lease. Subscribers are required to sign lease agreement with BSNL for VSATs for a minimum period of one year. Than the above tariff the VSAT user has to pay Rs.10, 000/- per month per VSAT towards Satellite Access charges. Installation charges are Rs. 15,000/- per VSAT.  VSAT lease, rental and maintenance charges Rs.1.75 lakhs /year/VSAT for both Data and Voice facilities and Rs. 1.5 Lakhs for Data Services only. Cost of modules repaired will be charged extra depending upon the faults. One kilo segment of data equals 64 kilobytes which is equivalent to about 32 A4 size pages of information.  Reduced tariff (half rate) is applicable from 0700 PM to 0800 AM for Data calls other than International calls. Only originating calls from the VSAT are billed on per call basis. Bills for usage of the HVNET are issued once in two months. Minimum charges Rs. 2000/- per month. Pilot test of Vsat service is possible with minimum tariff as per rules. 2) PMRTS Cost of handsets: Rs. 11,000-13,000 * (portable) Activation charges: Rs. 1,200 * Monthly charges: Rs. 960 * (Per handset per month) *=prices by leading provider Dec 05 Note:-There are no air time charges and no limit to the number of calls made per month. There is no connectivity to the telephone lines, as law does not permit this. Also, the service is limited to the boundaries of the city only.
  50. 50. Created by Shyamlal Sharma INCOME OF TARGET CUSTOMER Telecom is basically service industry. In this industry the banking Service cannot differentiate on the basis of the income level of the target customer. So this point not affects the industry at all. Penetration Level [A] Mobile Services The mobile urban market is became saturated. Now firms are finding their way to penetration to increase customer base and get more revenue. The following are factors that has contributed to penetration of mobile services (a) Industry deregulation and liberalization (b) Declining tariff and handset prices (c) Prepaid offerings (d) Implementation of CPP regime Penetration in Mobile Services Model No.-3.1 Source: (Ernst & Young Reports)
  51. 51. Created by Shyamlal Sharma (a) Industry deregulation and liberalization Industry deregulation and liberalization Model No.-3.2 Source: (Ernst & Young Reports) There are three to six operators competing for subscribers in almost every circle. More competition is expected as some key players have applied for new licenses under the unified license regime. This factor is one of the major factors that have contributed to penetration of mobile services in Indian market. (b) Declining tariff and handset prices  Intense competition has been instrumental in driving down Wireless tariffs. Entry of the 3rd and 4th GSM operators in each circle, and CDMA Wireless operators, has created a new floor for local and long distance tariffs.  Crash in handset prices by more than 70% over the last 4-5 years, coupled with easy financing schemes and bundling of handsets with connections by operators have greatly added to the attraction of Wireless.
  52. 52. Created by Shyamlal Sharma  With the Government reducing custom duties on handsets, handset prices are expected to decrease further, leading to higher new demand and replacement demand. (c) Prepaid offerings Prepaid offerings Graph No.-3.1 Source: (Ernst & Young Reports)  Prepaid offerings have created a surge in Wireless subscribers, mirroring the trend in other developing countries.  Operators aggressively promoting prepaid cards, have spurred the adoption of Wireless by the masses. lower middle class households to college students to low income groups, people are increasingly way of going Wireless  In 2003, prepaid did not significantly increase its share of the total subscriber base, despite the addition of 17 million new subscribers. This is because all the 6 million new subscribers added by CDMA Wireless were postpaid subscribers. From the budget-conscious seeing prepaid as a hassle-free.
  53. 53. Created by Shyamlal Sharma  New rural prepaid offering is also provided by service provider like hutch (“cutting”) and Airtel (“Super Bachat”) (d) Implementation of CPP regime Implementation of CPP regime Model No.-3.3 Source: (Ernst & Young Reports)  Implementation of CPP regime was a water-shed event in the industry.  It has greatly increased the affordability of going Wireless, as subscribers don‟t have to pay for incoming calls, and can control their telecom costs better.  The effect of CPP in India is in line with that in other developing countries, where CPP has increased the penetration of Wireless.
  54. 54. Created by Shyamlal Sharma [B] Fixed Services The penetration is limited in the fixed lines. BSNL is still major operators. Private fixed service providers like Reliance and Tata are pushing their fixed phones very hard in every circle. In some circles Bharti and Hughes (now tata owned) are dominant fixed service players. To attract consumers more and more services are provided by providers but still fixed services penetration is low compared to mobile service penetration level. [C] Internet Services There are 3 key drivers to internet service penetration in Indian telecom market. (a) Government Policy (b) Pricing (c) Availability in mobile content (a) Government Policy The government policy has major impact in internet services distribution and consumptions. The penetration depends on government policy. For e.g. US being open market has not achieved penetration level of South Korea which is controlled market. In India government should encourage the penetration in internet services. (b) Pricing Pricing plays important role in telecommunication in determining penetration. Low price will increase penetration level in semi urban and small towns. (c) Availability of content Availability of related content is major factor in stimulating internet services. Online gaming and educational services are some initial stimulus to penetration. [D] Other Services Penetration level in VSAT and PMSRT is low as they are more organizational offering than individuals.
  55. 55. Created by Shyamlal Sharma
  56. 56. Created by Shyamlal Sharma NO. OF PLAYERS There are no. of players in industry as per the services they provides are given below. GSM Service Providers Hutchison Essar Hutchison Essar is joint venture between Indian Essar and hongkong based hutchison whampao limited (HWL). Hutchison exists in India since 1992. Hutchison Essar teleholding just took over BPL Cellular and BPL mobile. Now it is one of the dominant player in GSM technology. Bharti Tele- ventures Ltd. Bharti televentures was incorporated in 1994. Bharti televentures is market leader in GSM mobiles in India. Bharti has operating in all the circles. Bharti has just sold its 10% stake to Vodafone. Idea Cellular Ltd. Idea cellular started in 1995 when AT & T and aditya birla group and tata group set up cellular networks. It was renamed in 2002 as idea cellular. After the recent exit of cingular from idea cellular now tata and birla both have nearly 48% shares in idea cellular. BPL mobile BPL mobile started in 1995, pioneer service provider in Mumbai, maharashtra and goa. Recently existed and sold to Hutchison Essar.
  57. 57. Created by Shyamlal Sharma BSNL BSNL is the oldest and dominant player of mobile industry. It is state owned firm which offers cellone as its mobile services. Spice Telecom Spice telecom is launched 1998, is a dominant regional player in Punjab and Karnataka. Spice telecom may sell out. Aircell Incorporated in 1999, is strong dominant player in Chennai and tamilnadu circle. Its no-1 in customer satisfaction in by IDC survey. Reliance Telecom Reliance is also player in GSM offering. It was established in the late 1999‟s. Reliance led the intense competition in the mobile market. MTNL MTNL was set up on 1st April, 1986 by government of India to upgrade the quality of services in telecom. Currently government holds 56.25% share
  58. 58. Created by Shyamlal Sharma CDMA Reliance Reliance is major telecom player with its CDMA offering. Reliance is market leader in CDMA. Reliance led the intense competition in the mobile market. Tata Teleservices Tata teleservices was incorporated in 1996. tata teleservices was first to launch CDMA mobile service in India in Andhra- radesh circle Shyam telecom Shyam telcom incorporated in 1992, it is one of the pioneering in telecom industry and only private sector equipment manufacturing company with ISO 9001 BSNL BSNL is the oldest service provider in fixed line services; it is market leader with highest market share in the market. MTNL MTNL was set up on 1st April, 1986 by government of India to upgrade the quality of services in telecom. Currently government holds 56.25% share.
  59. 59. Created by Shyamlal Sharma Fixed services Reliance Reliance is major telecom player with its CDMA offering. Reliance is market leader in CDMA. Reliance led the intense competition in the mobile market. Tata Teleservices Tata teleservices was incorporated in 1996. tata teleservices was first to launch CDMA mobile service in India in Andhra- radesh circle Shyam telecom Shyam telcom incorporated in 1992, it is one of the pioneering in telecom industry and only private sector equipment manufacturing company with ISO 9001. BSNL BSNL is the oldest service provider in fixed line services; it is market leader with highest market share in the market. MTNL MTNL was set up on 1st April, 1986 by government of India to upgrade the quality of services in telecom. Currently government holds 56.25% share. HFCL HFCL was established in the year 1987, Himachal Futuristic Communication Ltd has developed vast base for telecom equipment in India. HFCL is satellite service provider in India and operating DAMA VAST service for last 3 years. Bharti telesonic Bharti Telesonic, a subsidiary of telecoms company Bharti Tele- Ventures, has deployed Nortel Network's OPTera Metro solutions for its national and international long distance services.
  60. 60. Created by Shyamlal Sharma Internet service providers Reliance Reliance is major telecom player with its CDMA offering. Reliance is market leader in CDMA. Reliance led the intense competition in the mobile market. VSNL Tata teleservices was incorporated in 1996. tata teleservices was first to launch CDMA mobile service in India in Andhra- radesh circle Satyam infoway Sify was incorporated on April; 1998.It is pioneer and leader in internet, network and e-commerce in India. BSNL Sanchar net is country wide internet access network of BSNL; It offers dedicated and dial-up internet access service across the major cities in India. MTNL MTNL started net services in 1991. [D] Others VSAT HCL Comnet HCL is a leading global IT services, solutions and product engineering company. The company provides value- added, software engineering led IT solutions and services in the areas of e- commerce and Internet. Hughes Escorts It was launched its service in 1994 in India. HECL provides services in the areas of Enterprise Networking, E-Commerce and Global Education.
  61. 61. Created by Shyamlal Sharma Bharti BT The Department of Telecommunications has finally given its approval for the transfer of the VSAT license to Bharti-BT from Wipro-British Telecom. Wipro-BT was incorporated in June 1995 Comset Max Comsat Max is a subsidiary of Bharti Enterprises. Bharti Enterprises has been at the forefront of technology and has revolutionized telecommunications with its world-class products and services. GNFC GNFC has emerged as a leading provider of VSAT, Internet services and networking solutions to a host of corporate in Gujarat with active support of the Gujarat state government. ITI ITI Ltd was established in 1948 as a Departmental Undertaking of Government of India. Later on ITI Limited was incorporated on 25th January 1950 ITI is a Public Sector Undertaking coming under the Department of Telecommunications, Ministry of Communications & IT, and Government of India.
  62. 62. Created by Shyamlal Sharma Market Share of Various Firms [A] Mobile Services Mobile Services Table No.-4.1 Bharti 21.4% Reliance 20.3% BSNL 18.6% Hutchisan 14.7% Idea 9.7% BPL 4.6% Spice 2.6% Aircel 3.2% Tata 2.5% MTNL 2.3% HFCL 0.1% Shyam 0% Mobile Services Market Share Graph No.-4.1 MTNL 2%Aircel 3% Shyam 0% HFCL 0% Bharti 20% Reliance 20% Tata 3% BPL 5% Spice 3% Idea 10% Hutchison 15% BSNL 19% Bharti Reliance BSNL Hutchison Idea BPL Spice Aircel Tata MTNL HFCL Shyam Here the above graph shows the all over market share in the country, it includes both GSM and CDMA service. Bharti is the market leader with 21.4%, Reliance is 20% market share, BSNL is 19%, Hutchison is 15%, Idea is 10%,BPL is 5%, Aircel is 3%, TATA is 3%, MTNL is 2%,HFCL is only 0.1%, and shyam is 0% market share. *Note: BPL telecom recently taken over by Hutchison Essar
  63. 63. Created by Shyamlal Sharma (a) GSM service providers and their respective circles GSM Market Share GSM Market Share Table No.-4.2 Bharti 26% BSNL 20% Hutch 20% Idea 14% BPL 7% Spice 5% Aircel 4% Reliance 3% MTNL 1% Source:
  64. 64. Created by Shyamlal Sharma Market share of GSM Services Graph No.-4.2 Aircel 4% Reliance 3% MTNL 1% BPL 7% Spice 5% Idea 14% Hutch 20% BSNL 20% Bharti 26% Bharti BSNL Hutch Idea BPL Spice Aircel Reliance MTNL In the above graph the market share of GSM service is given. Bharti is market leader with 26% market share. Hutch and BSNL both at 20% market share, Idea is 14% market share, BPL is 7%, Spice is 5%, Aircel is 4%, Reliance is at 3% and MTNL is at only 1%.
  65. 65. Created by Shyamlal Sharma (b) CDMA Services and Market Share CDMA Services and Market Share Table No.-4.3 Reliance 82.79% Tata 11.53% BSNL 3.54% MTNL 1.44% HFCL 0.47% Shyam 0.23% Source: Market Share of CDMA services Graph No.-4.3 Reliance 83% MTNL 1% HFCL 0% Shyam 0% BSNL 4% Tata 12% Reliance Tata BSNL MTNL HFCL Shyam The above graph shows the market share of CDMA services in India. Reliance is the dominant player with 83% market share. Than TATA with 12%, BSNL is 4%, MTNL is 1%, HFCL is 0.47% and shyam at 0.23%.
  66. 66. Created by Shyamlal Sharma [B] Fixed Services Fixed Services and Market Share Fixed Services and Market Share Table No.-4.4 BSNL 78.55% MTNL 8.44% TATA 6.85% Reliance 3.67% Bharti 1.99% HFCL 0.46% Shyam 0.04% Source:
  67. 67. Created by Shyamlal Sharma Market Share of Fixed Services Market Share of Fixed Services Graph No.-4.4 BSNL 79% HFCL 0% MTNL 8% Bharti 2% Tata 7% Shyam 0% Reliance 4% BSNL MTNL Bharti Tata HFCL Shyam Reliance The above graph shows the market share of fixed line services in the country. BSNL is 79% market share and dominant player in the industry. After that MTNL is 8%, TATA is 7%, Reliance is 4%, Bharti is 2%, HFCL is only 0.46% and shyam is 0.04% market share.
  68. 68. Created by Shyamlal Sharma [C] Internet Services Internet Services Table No.-4.5 BSNL 34% MTNL 19% Sify Ltd 14% VSNL 11% Others 10% Reliance 5% Data Infosys 4% Bharti 3% Source: Market Share of Internet services Market Share of Internet service Graph No.-4.5 Data Infosys 4%Reliance 5% VSNL 11% Sify Ltd 14% Bharti 3% Others 10% MTNL 19% BSNL 34% BSNL MTNL Others Bharti Sify Ltd VSNL Reliance Data Infosys In the Graph No. 4.5, the market share of internet service provider is given, BSNL is market leader with 34% share, MTNL is 19%, Sify Ltd is 14%, VSNL is 11%,Others (Private) with 10%, Reliance is 5%, Data infosys is 4% and Bharti with 3% market share.
  69. 69. Created by Shyamlal Sharma [D] Others Services 1. VSAT Services VSAT Services Table No-4.6 Source: VSAT Services and Market Share Graph No.-4.6 ITI 0% Tata 2% Telstra Vishesh 0% GNFC 1% Essel 4% Bharti 14% Comsat 12% HCL 36% Hughes 31% Hughes HCL Comsat Bharti Essel Tata Telstra Vishesh ITI GNFC In the graph no. 4.6 the market share of VSAT Service provider is given. HCL Comnet with 35% market share, Hughes with 31% market share, Bharti BT with 15% market share, Comset Max with 12% market share, Essel shyam at 4%, TATA services with 2% market share and other players are like Telstra Vishesh, ITI and GNFC are not having much market share.
  70. 70. Created by Shyamlal Sharma 2. PMSRT Source:
  71. 71. Created by Shyamlal Sharma PMSRT Market Share Table No.4.7 Procall 39.25% Arvind Mills 33.07% United Liner 8.35% Arya Offshore 6.67% German Express 5.70% Aryadoot 5.18% Jet-Aiu 1.76% Container Movement 2.00% Market Share of PMSRT Graph No.4.7 Jet-Aiu 2% Arya offshore 7% Container movement 0% German Express 6% United Liner 8% Aryadoot 5%Arvind Mills 33% Procall 39% Aryadoot Jet-Aiu Container movement Arya offshore German Express United Liner Procall Arvind Mills In the above graph Procall is the market leader with 39% market share, and Arvind mills is having 33% market share, United Liner 8%, Arya Offshore with 7% share, German Express 6%, Aryadoot with 5%, Jet-Aiu and Container movement with 2% market share.
  72. 72. Created by Shyamlal Sharma
  73. 73. Created by Shyamlal Sharma Distribution in telecom Distribution network in telecom market place Model No.5.1 In the above figure a typical network of mobile services has been shown. The role of service provider is to appoint a channel partner who helps them to sell the products to final consumer. Customer Channel Partner Telecom Service Provider Enquire, Revenue, Application Product Information, Commission Incentives Customer Data, Performance Data, Collections Customer Service  Design / Develop products  Activate customer Application  Monitor channel Partner  Pay commission incentives  Sell products  Resolve Customer Query  Process Customer Application  Collect and remit revenues
  74. 74. Created by Shyamlal Sharma The role of telecom service provider  Design and develop attractive products  Activate Customer application  Monitor Channel Partner  Pay commission incentives The role of channel partner  Sell products  Resolve Customer Query  Process Customer Application  Collect and remit revenues In service industry communication is very important. At every stage of the diagram there is two way communications between Channel Partner and service provider. The channel partner disseminates the information to final consumer. The channel partner seeks information about products and services, schemes and promotion from the services provider and the service provider seeks customer information, request and query.
  75. 75. Created by Shyamlal Sharma Key Issues in channel effectiveness in telecom marketplace 1. cost of customer acquisition A very high cost takes time to recover and have direct impact on business profitability. Further the cost can be non recoverable in case of high customer churn. 2. Incentives/ Sales Commotions Inadequate structure could result in full commission pay outs for non profitable and marginal customers. Commissions could also be paid for customer who revokes the services within a short period of time, thus resulting in unrecoverable acquisition cost. 3. Channel performance Channel performance measurement mechanisms may not provide the relevant data in a timely manner to enable adequate monitoring/ identification of inefficient channel partners resulting in continued dependence on poor performance. 4. customer interaction Non standard and poorly defined services standards could result in loss of customer confidence high level of complaints and loss of customers themselves. 5. Application Refusal Rate Large no. of application failures due to failure of customer point verification /motivated churn increases the cost of channel. 6. Customer Profitability Poorly defined incentives/ Sales commissions structures and policies could result in acquisition of low-value, non profitable customers. Further customer could be accepted without adequate credit verification, resulting in a high level of over dues and bad debts.
  76. 76. Created by Shyamlal Sharma Areas Needs to be focused in Telecom Market place 1. Incentive commission structure  Understand alignment of structure with customer acquisition strategy/ business plan.  Evaluate dealer/ retailer/ franchisee performance vis a vis incentive and commission pay outs to assess effectiveness of the same  Benchmark commission with competitors.  Analyze subscribers earn during incentive plans to know the effectiveness of the plan 2. Customer Acquisition  Correlate customer churn data with channel partner  Review pre sales filtering process  Identify potential incentive for dummy applications  Channel partner with high number of low value customers 3. Service Level  Obtain retailer feedback on their own and customer concerns through structured questionnaire based reviews.  Critically evaluate customer‟s buying, activating and query resolutions experience through anonymous test purchase at various locations.  Test the customer handling and query resolution process at retail outlets. 4. Simcard/ Prepaid Vouchers  review physical control over stocks to prevent revenue leakage 5. Collection  Analyze cash management and remittance process to identify undue blockage of funds/ inadequate control over funds collected 6. Data Analytics  Analyze patterns of churn, bad debts, defaults etc to identify possible anomalies and identify and correct the root cause.
  77. 77. Created by Shyamlal Sharma [A] Mobile services Company  distributors  dealers  retailers Company  company‟s direct outlets  shops, tele-shops, franchisee In mobile industry there are mainly two channels for distribution. 1) direct channel 2) indirect channel In direct channel, company directly opens its outlets to serve customers better. For e.g. Hutch have their outlets all over the Gujarat as hutch shops. At hutch shops you can get new prepaid and postpaid connection, pay bills and register complains regarding deficiencies in services. In indirect channel, company sets target for distributors who again transform them to dealers. This ways they reach retailers. At every point of there is clear hierarchy. They are clear about what is to be done and how it is to be done. For example Hutch appoints distributors and distributors again appoint dealers and retailers. This channel is very useful for the firm to reach customer of remote and distant areas. Hutch has its shops and tele shops in urban and semi urban areas but their proximity is limited. In this case their indirect channel helps them to reach to a remote customer. [B] Fixed Services In fixed services also the above mobile structure remains the same. There are direct and indirect channels of the firm in fixed line as well to build more customer base and reach to customers easily. [C] Internet Services In internet services with the physical network, the web network also plays a crucial role in the success of channel. The company owned website does a work of information disseminator about products and services. Customer can buy products, check existing usage and renew accounts on the company owned websites. [D] Other Services In VSAT and PMSRT, firms have their own direct channel of distribution. This firm owned distribution network carries out all work.
  78. 78. Created by Shyamlal Sharma
  79. 79. Created by Shyamlal Sharma Key Issues and Trends Product Quality and technology [A] Mobile Technology Technology used in Mobile Services 1. Global System for Mobile Communication (GSM) 2. Code Division Multiple Access (CDMA) 1. Global System for Mobile Communication (GSM) Model No.6.1 GSM system is composed of three main elements; the switching subsystem, the base station subsystem, and the mobile. The switching part makes the connection between the two users, the base station part controls the communication across the radio interface, and the mobile acts as the transmitter receiver for the user. PSTN (public switching telephone network) The system is composed of three main elements; the switching subsystem, the base station subsystem, and the mobile. The switching part makes the connection between the two users, the base station part controls the communication across the radio interface, and the mobile acts as the transmitter receiver for the user.
  80. 80. Created by Shyamlal Sharma Mobile Station The best known part of the cellular network is certainly the mobile stations. Different types of mobile stations are distinguished by power and application. The mobile station (MS) types include not only vehicle mounted portable equipment but also handheld stations popularly known as mobile handsets. A significant architectural aspect of the MS relates to the concept of Subscriber Identity Module (SIM). The SIM card contains a unique International Mobile Subscriber Identity (IMSI) used to identify the subscriber to the system. The SIM is basically a smart card, containing the entire subscriber -related information stored on the users‟ side of the radio interface. Base Station Subsystem Base Station Subsystem groups the infrastructure machines, which are specific to the radio cellular aspect of GSM. The BSS is in direct contact with the mobile station through the radio interface. As such, it includes the machines in charge of transmission and reception on the radio path, and the management thereof. On the other side, the BSS is in contact with the switches of Network Subsystem (NSS). The BSS includes two types of machines: Base Station or Base Transceiver Station The counterpart to a mobile station within a cellular network is the base transceiver station (BTS), which is the mobile's interface to the network. Each cell site is equipped with a BTS. A BTS is usually located in the center of a cell. A cell site is used to refer to the physical location of radio equipment that provides coverage within a cell. The transmitting power of the BTS determines the absolute cell size. The BTS houses the radio transceivers that define a cell and handles the radio-link protocols with the Mobile station. BTSs are placed in the field to transfer a call to a customer's handsets, and there are between one and sixteen transceiver, each of which represents a separate RF channel. A BTS may cover an area of 30 - 40 sq kms.
  81. 81. Created by Shyamlal Sharma Base Station Controller BSC Base station controller is in contact with the switches of NSS. It monitors and controls several base stations, the number of which depends on the manufacturer and can be between several tens and several hundred of stations. A typical BSC can manage from one BTS to the entire BTS in service area, depending on their traffic capacity. Network and Switching Subsystem / Switching subsystem The NSS includes the main switching functions, as well as the data basis needed for subscriber data and mobility management. The main role of NSS is to manage the communications between the GSM users and the other telecommunications network users. The NSS is responsible for performing call processing and subscriber-related functions. Mobile Services Switching Centre The MSC is the interface of the cellular network to the PSTN. MSC performs the telephony switching functions of the system, it acts like a normal switching node of the PSTN, and additionally provides all the functionality needed to handle a mobile subscriber, such as registration, authentication, location updating, handovers, and call routing to a roaming subscriber. MSC is the primary switching interface between the mobile telephone systems, and the PSTN. It is capable of routing calls from the fixed network - via the BSC and the BTS- to an individual mobile station. The MSC also provides the network with specific data about individual mobile stations. The MSC interfaces with BSS on one other side (through which it is in contact with GSM users) and with the external networks on the other. The NSSs also need to interface with the external networks to make use of their capability to transport user data or signaling between GSM entities. Home Location Register (HLR) The HLR is a database about subscribers; it stores the identity and user data of all the subscribers belonging to the area of related MSC. These are permanent data, such as the International Mobile Subscriber Number (IMSI)
  82. 82. Created by Shyamlal Sharma of an individual user, authentication key, including a subscriber's service profile, location information, activity status and some temporary data. Temporary data on the SIM include such entries as (1) the address of the current visitor location register (VLR), which currently administers the mobile stations (2) the number to which the calls must be forwarded (if the subscriber select call forwarding), and (3) some transient parameters for authentication and ciphering . The IMSI is permanently stored on the SIM card. The IMSI is one of the pieces of important information used to identify a subscriber within GSM system. The first three digits of the IMSI identify the Mobile Country Code ( MCC) and the next two digits are the mobile network code ( MNC). Up to ten additional digits of the mobile subscriber identification number ( MSIC) complete the IMSI. Visitor Location Register The VLR contains the relevant data of all mobiles currently located in a serving (G)MSC. It is the database that contains temporary storing subscription data for those subscribers currently situated in the service area of the corresponding MSC as well as holding data on their location at a more precise level than the HLR. The VLR is always integrated with MSC. The permanent data are the same as data found in the HLR; the temporary data differ slightly. For example, the VLR contains the temporary mobile subscriber identity ( TMSI), which is used for limited periods of time to prevent the transmission of the IMSI via the air - interface. The substitution of the TMSI for the IMSI serves to protect the subscriber from high-technology intruders and helps point to the location of the mobile station through the cell identity. Authentication Centre The Authentication center (AC) is related to the HLR. It provides the HLR with different set of parameters to complete the authentication of a mobile station. The AC knows exactly which algorithms it has to use for a specific subscriber in order to calculate input values and issue the required results. Since all the algorithms for the authentication procedures are stored within AC, they are
  83. 83. Created by Shyamlal Sharma protected against abuse. The SIM card issued in area assigned to AC contains the same algorithms for authentication as the AC does. If the AC provides input and output parameters for these algorithms to either the HLR or the VLR, either location register can verify (authenticate) the mobile station. Equipment Identity Register The equipment identity register ( EIR) is a database that contains a list of all valid mobile equipment on the network, where each mobile station is identified by its International Mobile Equipment Identity ( IMEI). An IMEI is marked as invalid if it has been reported stolen or is not type approved. Within the EIR we find all the serial numbers of the mobile equipment that is either stolen or, due to some defect in their hardware, may not be used in a network. Operation & Maintenance Centre The Operation & Maintenance Centre (OMC) has access to both the (G) MSC and the BSC, handles error messages coming from the network, and controls the traffic load of the BSC and the BTS. The OMC configures the BTS via the BSC and allows the operator to check the attached components of the system. Latest Technology in GSM 1) General Packet Radio Service 2) Enhance Data For GSM Evolution 3) Wireless Application Protocol 4) Multimedia Message Service 2. Code Division Multiple Access (CDMA) To accommodate more traffic within a limited amount of radio spectrum, the industry developed a new set of digital wireless technologies called TDMA (Time Division Multiple Access) and GSM (Global System for Mobile). TDMA and GSM used a time-sharing protocol to provide three to four times more capacity than analog systems. But just as TDMA was being standardized, an even better solution was found in CDMA. Commercial Development the founders of QUALCOMM
  84. 84. Created by Shyamlal Sharma realized that CDMA technology could be used in commercial cellular communications to make even better use of the radio spectrum than other technologies. They developed the key advances that made CDMA suitable for cellular, then demonstrated a working prototype and began to license the technology to telecom equipment manufacturers. CDMA consistently provides better capacity for voice and data communications than other commercial mobile technologies, allowing more subscribers to connect at any given time, and it is the common platform on which 3G technologies are built. CDMA is a "spread spectrum" technology, allowing many users to occupy the same time and frequency allocations in a given band/space. Brief Working of CDMA CDMA takes an entirely different approach from TDMA. CDMA, after digitizing data, spreads it out over the entire available bandwidth. Multiple calls are overlaid on each other on the channel, with each assigned a unique sequence code. CDMA is a form of spread spectrum, which simply means that data is sent in small pieces over a number of the discrete frequencies available for use at any time in the specified range. In CDMA, each phone's data has a unique code. All of the users transmit in the same wide-band chunk of spectrum. Each user's signal is spread over the entire bandwidth by a unique spreading code. At the receiver, that same Unique code is used to recover the signal. Because CDMA systems need to put an accurate time-stamp on each piece of a signal, it references the GPS system for this information. Between eight and 10 separate calls can be carried in the same channel space as one analog AMPS call.
  85. 85. Created by Shyamlal Sharma [B] Fixed Services Fixed line technology Where the telecommunications infrastructure is in place, the most common option is the fixed-line service. It is sometimes referred to as leased-line because you lease the use of the connection from the telecommunications provider. This means on-going annual revenue cost. The cable will normally either be copper or fibre-optic. Copper solutions include: Fibre-optic cable offers vast bandwidth and is not an expensive medium to purchase, but installation costs can be very high. Integrated services digital network (ISDN) These are regular twisted-pair copper telephone lines that can carry two 64kbps channels plus one 16 kbps signaling channel. So one channel can be used for voice, and the other for Internet access, or two can be combined for video-conferencing, or higher speed Internet access. In developing countries, ISDN is only available in urban and suburban areas. Digital subscriber line (DSL) This technology has a greater bandwidth than ISDN, able to provide data rates of up to 384 kbps. DSL is mostly used in urban areas of industrialized countries, where copper wire is already installed. The attraction of using existing wiring is that it removes the installation cost of new cable. ADSL (asymmetrical digital subscriber line). This provides fast download speeds but much slower upload speeds – hence asymmetrical. Cable modems Some cable television systems can be used for high-speed Internet access via cable modems. Similar to DSL, cable offers much higher bandwidth than dial-up phone lines, but can result in congestion of a shared cable network, and older networks are difficult to convert for two-way connectivity.
  86. 86. Created by Shyamlal Sharma Optical fiber The advantage of optical fiber is its enormous bandwidth, which can be used for high-speed Internet access, or for other functions such as video- conferencing. However, costs are extremely high. Hybrid fiber/coax A combination of optical fiber and coaxial cable can be used to provide high- speed Internet access, and the other services high bandwidth allows, as well as two-way communication. This solution is cheaper than extending fiber for the full distance. source:-
  87. 87. Created by Shyamlal Sharma [C] Internet Services The internet works on following technologies. (a) Dial-up Dial up uses the traditional phones lines with modems on which digital data transfers. This requires dedicated telephone lines, cable modems. (b) Broadband Broadband has been the most popular medium to access Internet and is expanding in the entire world in a major way. This is extension of the Ethernet LAN to the entire city and so it is called Metropolitan Area Network (MAN). The Internet signal is extended on high-grade bi- directional RF cables and then amplified by hi-grade bi-directional amplifiers. The head ends are connected by fiber optic cables (c) Leased line This is high-speed, redundant, load-balanced Internet Leased lines. This provides high uptime by offering redundant path for carrying the Internet traffic. State of the Art Infrastructure for Internet provides reliability for leased lines which is required for critical business. The leased line infrastructure is built on an easy scalable architecture that allows augmentation of bandwidth as and when requirement arises. (d) Internet telephony This is device based Internet telephony, which works on Voice over Internet Protocol (VOIP). This is more advanced and next generation technology as compared to the prepaid cards based Internet telephony. The voice quality is very good on which business can be conducted (e) VPN-Virtual Private Network This is dedicated network provided to corporate subscribers to carry out their work in given private network.
  88. 88. Created by Shyamlal Sharma [D] Others Services 1. VSAT Very Small Aperture Terminal (VSAT) systems provide dedicated, reliable, cost effective and private communications links for the individual and corporate users, with the provision of total system capabilities to support high bandwidth secure data, voice and video communication. VSAT networks offer value-added satellite-based services capable of supporting the Internet, data, LAN, voice/fax communications, and can provide powerful, dependable private and public network communications solutions. This enabled its clients to use a dedicated data transmission network and ensured reliability of transmission. The system offered 64 Kbps in route and 512 Kbps out route data rates. The hub used an extended C- band antenna and TDM/TDMA technology to support VSATs on a star topology. C-band is used extensively in Asia, Africa, and Latin America and requires a larger antenna than Ku-Band VSATs. 2. PMSRT PMSRT as radio trucking, the type of communication here each person is given a personal ID number and one can talk to only a particular person in his group whose ID number is dialed and others remaining undisturbed. The term itself suggests as the sharing of small number of radio channels among a large number of different user groups on the same system without over hearing or interfering each other‟s conversation. The range of frequency lies in between 400MHz- 800MHz. The system is in idle state and thus preventing channel congestion. As much as 200 handset can be accommodated in one channel. Generally, the upper limit of the frequency range is preferred. Area of coverage varies from 30-60 kms as compared to conventional systems‟ range of 15-20 kms.
  89. 89. Created by Shyamlal Sharma Quality parameters in telecom services Following are the general criteria of quality in telecom services as per provided by TRAI. 1) Provision of telephone within 7 days for exchange areas declared “On Demand”. 2) Fault incidences per month per 100 telephones (should be less than 3 Faults per 100 phones per month) 3) Percentage of faults repaired by next working day (should be >90%) 4) Mean Time to repair (MTTR) (should be <8hrs.) 5) Metering and Billing credibility (Not more than 0.1% of bills should be disputed over a billing cycle) 6) Operator assisted Trunk Calls (Urgent calls should be answered within 1 hr and Ordinary calls within 2 Hrs.) 7) Customer Care: Promptness in attending 95% of customers requests (Benchmarks for Shifts, Closures and providing additional facilities are <3 days, <24 hours and <24hours respectively) 8) Percentage of repeat faults (should be <1%) Source:
  90. 90. Created by Shyamlal Sharma Customer service The happy Indian phone users With the large number of global and national telecom giants vying for a larger share of the exploding cellular market, Indian mobile users have never had it so good. Today the Indian mobile user is a very happy (possibly pampered) subscriber, enjoying the benefits of world-class mobile technology, paying one of the lowest rates anywhere in the world. While it will be obviously more difficult to be able to build and retain customer loyalty in this scenario, it becomes all the more important. At this growth stage of the Indian mobile industry, the challenge for the service providers has been to maintain a pulse on the changing expectations of the evolving Indian cellular user and continuously meeting these expectations. Indian cell phone companies have managed to meet customer expectations, designed to track the Indian cellular user, to better understand the state of the 'subscriber-service provider' relationship, and to track the performance of the cellular service providers in fostering these relationships. Understanding subscriber typology Model No.6.2 Source: (NFO MBL India) www. Strategic
  91. 91. Created by Shyamlal Sharma When trying to unravel the niceties of the 'subscriber-service provider' relationship even further, we looked at the level of satisfaction as well as level of retention, independently, and then grouped the subscribers into four categories based on their level of satisfaction and retention. Thus, based on satisfaction and loyalty, we classified the subscribers as 'Apostles', who are satisfied and loyal, 'Mercenaries' are satisfied but those who have not found any compelling reason to remain loyal, 'Hostages', loyal (not necessarily out of choice) but dissatisfied, and 'Terrorists' are dissatisfied and disloyal. We can also see how the strength and the quality of the 'subscriber-service provider' relationship, has been improving over the years. This would indicate that the service providers did manage to get some things right, and to some extent were able to understand the needs of the market and have been able to improve their delivery on those aspects that matters to their subscribers. The continuous efforts by the service providers have had a positive impact on the 'subscriber-service provider' relationship. This has led to an increase in the level of satisfaction as well as retention and loyalty levels among their subscribers.  Looking at the TRIM Index scores and the changing customer typology, what is becoming clear, is that, by and large, Indian service providers seem to have successfully kept their finger on the pulse of the market. Further more this has been done in the context of an increasingly competitive market scenario. TRI-M Grid Model No.6.3 Source: (NFO MBL India) www. Strategic
  92. 92. Created by Shyamlal Sharma Driving customer loyalty. Besides measuring the 'intensity' of the 'subscriber- service provider' relationship, we have also been tracking what is driving this relationship. In order to understand what factors are most important in the mind of the cellular subscriber, we need to go beyond what the subscriber states as being important, in order to differentiate the obvious hygiene factors from those that are truly driving the relationship. The TRI*M grid classifies the elements based on the subscribers stated importance, as well as the impact of the performance of the element on subscriber retention. Thus all the product and service elements are grouped as 'Motivators', 'Hygienics', 'Hidden Opportunities' and 'Potential Savers' as described in the figure. Monitoring changing customers needs Model No.6.4 Source: (NFO MBL India) www. Strategic Not only can we identify these 'drivers' but we can also monitor the change in the relevance of the different aspects of the mobile service in the mind of the subscriber from time to time. In spite of the drastic fall in the service charges, the customers are still seeking further discounts and cuts in service charges.
  93. 93. Created by Shyamlal Sharma The service provider's ability to deliver accurate, easy to understand bills on time, are things taken for granted by subscribers. Tariffs and pricing, although stated as being extremely important by subscribers, has always been and continues to be a 'Hygienic' and does not really help to differentiate service providers in the minds of the subscribers. In spite of the drastic fall in the service charges, the customers are still seeking further discounts and cuts in service charges. Similarly, aspects related to billings are things that the customers have always stated as extremely important. However the service provider's ability to deliver accurate, easy to understand bills on time, are things taken for granted by subscribers. Softer aspects related to the Customer Care interactions are 'Motivators' and becoming increasingly important to subscribers. Customer Care along with the quality of VAS and SMS services offered could possibly determine brand choice in the future. Source: (NFO MBL India) www. Strategic
  94. 94. Created by Shyamlal Sharma Promotion Promotion is key ingredients in marketing campaigns, consists of diverse collection of incentive tools, mostly short term designed to stimulate quicker or greater purchase of particular services by consumers. Where as advertising offers a reason to buy, Sales promotion offers an incentive to buy. Sales promotion includes tools for consumer promotion (samples, coupons, cash refund offers, prices off, premiums, prices, patronage rewards, free trails, warranties, tie-in promotions, cross promotions, point-off-purchase displays, and demonstrations; Trade promotions (price off, advertising and display allowances, and free goods); and business and sales force promotion (trade shows, conventions, contests for sales reps, and specialty advertising. The rapid growth of sales promotion media has created clutter similar to advertising clutter. Manufactures have to find ways to rise above the clutter. For instance, by offering large coupon redemption values or using more dramatic point of purchase displays or demonstration. Competition is increasing, so competitor use promotion very frequently; many brands are seen as similar; consumers are more price oriented, the trade has demanded more deals from service providers and advertising efficiency has declined because of rising cost, media clutter and legal restraints. Promotions in telecom services [A] Mobile services There are basically two kinds of service providers in mobile services. 1) GSM service provider 2) CDMA service provider GSM service provider includes Hutch, Airtel, Idea, BSNL, Spice, Aircell, and Reliance in north-east. The era of big competition is driving them to provide huge promotional schemes to the consumers to stay in the competition and to retain their customers.
  95. 95. Created by Shyamlal Sharma For e.g.  hutch and airtel started providing lifetime prepaid  To increase the frequency of recharge hutch started “chota recharge”. Similar kind of recharge values are now being provided by airtel and idea as well in GSM market.  To increase mass consumption, hutch introduced “Group Talk” airtel came up with “FRIENDS”, BSNL started “CUG (Closed User Group”).  To provide cross promotion all the company provide handset with their sim-card. A very frequently used campaign in this is of AIRTEL Nokia bundle offer. Similar kinds of promotions are also provided by hutch.  Hutch and airtel is big advertiser in media. They are frequently coming up with continuing ad-campaigns. For e.g. hutch with “U n I” and airtel with “express urself”. CDMA service provider includes reliance India mobile and tata indicom. To overcome the strong competition of GSM providers, they provide great promotional schemes to establish themselves in the market and to gain market share. They are the pioneer of loyalty programs in mobile industry. For e.g.  Tata indicom with non stop mobile offer of two year incoming free, in response to tata, reliance provided three years incoming free.  In CDMA, unlike GSM the technology is such the providers have to provide handset as well. They are providing talk value worth of mobile handset price.  Reliance and tata are spending huge amount of money in advertising to be heard in the market. The major campaign of reliance “kar lo dunia muthhi me”, and Tata indicom with “non stop mobile”.
  96. 96. Created by Shyamlal Sharma [B] Fixed services There are BSNL, MTNL, reliance, Tata Indicom, Bharti Enterprise, Hughes and Shyam telecom in the fixed services market. Previously the dominant player was BSNL as state monopoly. After NTP-99 many private service providers came in the market that has made BSNL to provide liberal offers to stand in the competition and retain their existing customers. For e.g. With increasing private players in the market of fixed line, BSNL started to provide schemes similar to tata and reliance. They started providing free call worth of monthly rental. They started providing CLIP and call divert free. They have introduced new schemes like general, special, economy and super. Tata and reliance to establish them in market came with many promotions like STD, ISD activation free without deposits. Tata and reliance came up with advertising campaigns, which has also made BSNL to provide advertisings.
  97. 97. Created by Shyamlal Sharma [C] Internet Services In the beginning of internet services, the monopoly was maintained by VSNL, MTNL and BSNL. After that big players like Satyam, Icenet, Iquara, reliance came in the market and competition became very tough. Prices of surfing declined and more and more offers came in the market by service providers. For e.g. Some provider gives: 1) Free Surfing from 11.00 pm to 6.00 am 2) One Email A/c of 10MB 3) IMAP/POP3 Support 4) Free web-based E-mail 5) Free web utilities and 6) software [D] Other services VSAT and PMRTS are services offered by BSNL and such other service providers are for organizational buyers. Their promotions vary from organization to organizations as per the orders.
  98. 98. Created by Shyamlal Sharma Pricing  Many GSM service providers have launched recharge coupons for low- end prepaid subscribers with a denomination value of about Rs. 200 and validity of one month. This offers a talktime of about Rs. 50 translating into about 30 Local (Intra-circle) MOUs available.  Launch of this recharge coupon has increased the affordability of Mobile services and at the same times the service providers are enjoying higher revenue realization.  This can be seen as a win-win situation. For customer, monthly Subscription to mobile services have become more affordable and for the service provider this will attract new low-usage customers but with higher revenue realization per minute.  Several GSM service providers launched postpaid plans with free airtime equivalent to fixed monthly charges with the title “Zero Rental” or under similar nomenclature. Guidelines have been issued to the service providers to ensure transparency while offering & marketing plans of this nature.  Lowest Tariffs available in the market (for local outgoing usage) as of June-05 for GSM services. Effective charge represents the actual payout by a user with a defined traffic pattern. Total outgoing traffic have been distributed between fixed, own-Mobile & other mobile based on the information furnished by the GSM Service providers in the quarterly report. Postpaid Service- Effective charge has been calculated for a monthly local usage of 250 outgoing minutes. Around 500 postpaid tariff plans in the country were analyzed to arrive at the lowest effective charge per minute. The lowest available effective charge per minute is Rs. 1.20
  99. 99. Created by Shyamlal Sharma  Prepaid Service-Majority of the prepaid subscribers are using the Rs.300 or lower recharge coupon and hence the tariffs applicable for these recharge coupons (or its minor variants) have been taken as the representative tariffs for the prepaid service. On analysis of about 130 prepaid tariff plans, it is found that the lowest effective charge per minute is Rs. 1.50. Post paid charges for average mobile user Graph No.6.1 Source: Mobile effective charges have cut down from Jun 05 with (1.20) but they were in the starting Jun 03 was 2.37 the larger one, it was down in Sep 03 (1.90), also same Dec 03 (1.90), also same in Mar 04, Jun 04, Sep 04. Dec 04, Mar 04, Jun 05 having down (1.20).
  100. 100. Created by Shyamlal Sharma Segmentation (a) Segmentation by Age Age profile of mobile phone users Graph No.6.2.1 34% 10%11% 15% 30% 12-19years 20-29years 30-39years 40-49years 50years and +  The main users are around 20-29 years persons with 34%.  The second one is 30-39 years with (30%), 15% are 40-49 aged, 11% are having an age 50 +. 10 % having 12-19 years. (b) Age profile of mobile phone users at various time of acquisition Graph No.6.2.2 9% 42% 28% 14% 7% 12% 31% 29% 15% 13% 10% 32% 31% 16% 11% 4% 30% 35% 17% 13% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% <6 months 7-12months 13-24months >24months 50&+years 40-49years 30-39years 20-29years 12-19years Source-business today, July 17, 2005