Value Added services in India and its future.

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  • 1. SUMMER INTERNSHIP PROGRAM REPORT on Value added services in India SUBMITTED TO MIT PUNE‟s MIT SCHOOL OF TELECOM MANAGEMENT BY ABHISHEK BHOJRAJ PAUNIKAR PRN: 11009 Batch: 2011-2013 IN PARTIAL FULFILLMENT OF POST GRADUATE DIPLOMA IN MANAGEMENT (PGDM) TELECOMSPECIALIZATION: SYSTEMS 1
  • 2. DECLARATION I--------------------------------------------------------------Certified that this report is prepared based on the summer internship project undertaken by me in Hungama.com. From 24.04.2012 to 23.06.2012, under able guidance of Mr. Badrinath Jha, Hungama.com and Prof. Archana Deshpande, MIT School of Telecom Management Pune in partial fulfilment of the requirement for award of degree of Post Graduate Diploma of Management from MITSOT Pune. Signature Abhishek Paunikar Signature Signature Prof. Archana Deshpande Dr.Milind Pande Faculty Guide Director MITSOT 2
  • 3. ACKNOWLEDGEMENT I place on record and warmly acknowledge the continuous encouragement, invaluable supervision, timely suggestions and inspired guidance offered by our guide Prof. Archana Deshpande, Maharashtra Institute of Technology School of Telecom Management, Pune in bringing this report to a successful completion. This project would not have been a success without the guidance and motivation of all my mentors. I am thankful to all the persons behind this project. I would like to express my gratefulness to Prof.Archana Deshpande, who acted as a mentor throughout my project for providing me valuable information and guidance. Secondly, I would like to thank Mr.Badrinath Jha of Hungama.com who has been very helpful in getting the required information related to this project.. And finally I extend our gratefulness to one and all who are directly or indirectly involved in the successful completion of this project work. Abhishek Paunikar 3
  • 4. TABLE OF CONTENTS CHAPTER PAGE Executive Summary………………………………………………………………………........................................................04 Acknowledgement………………………………………………………………………………………………………………………………..05 List of Figures………………………………………………………………………………………………………………………………………..06 List of Tables…………………………………………………………………………………………………………………………………………07 CHAPTERS CHAPTER 1 Nature and scope of the study 1.1 Introduction…………………………………………………………………………………………………………………………………….10 1.2Aim and Objectives………………………………………………………………………………………………………………………….10 1.3 Research Problem Statement…………………………………………………………………………………………………………11 1.4 Scope of the Study…………………………………………………………………………………………………………………………..11 1.5 Rational for the Study........................................................................................................................12 CHAPTER 2 Profile of the Company and Industry Overview 2.1Industry Overview…………………………………………………………………………………………………………………………….13 2.2 Company Overview…………………………………………………………………………………………………………………………17 2.3 Product Portfolio …………………………………………………………....................................................................19 2.4 Organization Structure ……………………………………………………………………………………………………………………21 2.4 Market Share/Financial Analysis........................................................................................................22 CHAPTER 3 Literature Review 3.1 Literature Overview………………………………………………………………………………………………………………………..24 3.2 MVAS size……………………………………………………………………………………………………………………………………….25 4
  • 5. 3.3 MVAS categories…………………………………………………………………………………………………………………………….25 3.4 Type of MVAS user………………………………………………………………………………………………………………………….27 3.5 MVAS Ecosystem…………………………………………………..……………………………………………………………………….28 3.6 Global scenario……………………………………………….………………………………………………………………………………29 3.7 Future of MVAS …………………………………………………………………………………….……………………………………....31 3.8 MVAS Chain…………………………………………………………………………………………………………………………………….32 3.9 Regulatory Framework of MVAS……………………………………………………………………………………………………..35 3.10 Revenue Sharing……………………………………………………………………………………………………………………………37 3.11 Barrier to growth of MVAS in India………………………………………………………………………………………………..40 3.12 Current trends in MVAS…………………………………………………………………………………………………………………42 3.13 Observation from literature review………………………………………………………………………………………………43 CHAPTER 4 Research Methodology 4.1 Overall Research Process…………………………………………………………………………………………………………………45 4.2 Research Design………………………………………………………………………………………………………………………………47 4.3 Research Methods………………………………………………………………………………………………………………………….48 4.4 Quantitative and Qualitative Research…………………………………………………………………………………………..49 4.5 Types of Data: Secondary Data & Primary Data……………………………...................................................50 4.6 Data Collection Instruments…………………………………………………………………………………………………………….51 4.6.1 Selected Data Collection Method………………………………………………………………………………………………….54 4.7 Survey Procedure…………………………………………………………………………………………………………………………….55 4.7.1 Sampling……………………………………………………………………………………………………………………………55 4.7.2 Sampling Techniques………………………………………………………………………………………………………….56 4.7.3 Probability Sampling…………………………………………………..........................................................58 4.7.4 Non-Probability Sampling……………………………………………………………………………………………….…..58 5
  • 6. 4.8 Sampling Elements……………………………………………………………..............................................................60 4.8.1 Population…………………………………………………………………………………………………………………………….60 4.8.2 Sampling Unit……………………………………………………………………………………………………………………..60 4.8.3 Sample Size………………………………………………………………………………………………………………………...60 4.9 Research Limitations……………………………………………………………………………………………………………………….60 CHAPTER 5 Data Analysis 5.1 Characteristics of the Sample…………………………....................................................................63 5.2 Market Share Analysis……………………………………………………………………………………………………………64 CHAPTER 6 Findings and Interpretations 6.1 Major Findings……………………………………………………………………………………………………………………….65 CHAPTER 7 Suggestions and conclusion 7.1 Suggestions…………………………………………………………………………………………………………………………..68 7.2 Conclusion……………………………………………………………………..........................................................68 References……………………………………………...................................................................................70 Exhibits a) Questionnaire.............................................................................................................................71 b) Statistical Outputs…………………………………………………………………………………………………………………………………….73 6
  • 7. LIST OF FIGURES Figure 1- Per user spent on MVAS.....................................................................17 Figure 2 –SWOT analysis…………...................................................................12 Figure 3- Market size and growth rate……………............................................25 Figure 4- Categories of MVAS..........................................................................26 Figure 5 –Maturity and application usage market.............................................28 Figure 6 –Operation Model...............................................................................29 Figure 7- User centric Model............................................................................30 Figure 8-Application store model used globally .............................................30 Figure 9-MVAS Chain…….............................................................................32 7
  • 8. LIST OF TABLES Table 1 – Total subscriber base..................................................................14 Table 2- Overall teledensity.......................................................................14 Table 3-Highlight of telecom subscription.................................................14 Table 4-Indian Telecom Industry...............................................................15 Table 5- Contribution of MVAS revenue by Type of content ..........................................................................................27 Table 6-Range of MVAS.............................................................................34 Table 7-Revenue sharing MVAS................................................................38 8
  • 9. 9
  • 10. Executive Summary MVAS - The second revolution through the mobile - It‘s a mobile phone boom in India. India is the second largest mobile handset market in the world after China. The total number of mobile subscribers has hit a high of 940 million in India and reaching it to 1000 million by the year 2014. At a steady pace the VAS market is growing & it still has potential to reach & touch new heights. According to a research, the mobile handset market‘s revenue is expected to rise from Rs 25,591 crore (Rs 255.91 billion) in 2010 to Rs 35,005 crore (Rs 350.05 billion) in 2016. The VAS market in India, estimated Rs. 11,700 crore, is poised to reach Rs. 48,000 crore by 2013 (while some industry forecasts also peg the figure at Rs. 192,000 crore by 2015). With India emerging as one of the largest players in the telecom space, there appears to be excellent growth potential for Mobile related Value-added Services. The era of VAS being limited to voicemail and SMS is over. We are now entering the age of VAS 2.0 which is data driven and data intensive. Maps, desktop class web browsing, social networking, multimedia sharing, and location-aware services are fast becoming the norm. The entire ecosystem constituting VAS is about devices and connectivity. The devices with more storage capabilities and faster networks will lead to the uptake of VAS. The market will be driven by data revenue services - content and applications. With the launch of 3G in the Indian market, a variety of data services, mobile internet, and location-based services, m-commerce, app stores, and applications are expected to increase the end-user experience, and created revenue of 13,026 cores by the end of the year 2011. The increased bandwidth made available by the imminent 3G networks, would allow operators to introduce richer content applications that could create greater stickiness and re-use amongst both retail and enterprise customers. Service Providers are not only being asked to deliver greater bandwidth to mobile devices, but their customers are also looking for more innovative services, including video, voice, location services, and commerce transactions. By making these value-added services available, service providers gain the opportunity to create additional revenue streams while at the same time making their customers happy, leading to better customer retention. The focus of operators is to provide mobile VAS services in the areas of banking (for better banking facilities, penetration), healthcare (for better infrastructure in rural areas), and education. It is estimated that over 200 million people will require access to Medicare, credit, and education facilities in the next five years. The growth will be driven by increased operator focus on VAS due to continuous fall in voice tariffs, increased penetration of feature rich handsets, availability of vernacular content and increased user adoption of VAS applications. Online insurance, online shopping, banking, payments, online tickets, online business models and many other forms of virtual transactions are trending in India. A report from the Internet and Mobile Association of India pegged a growth of 47%, bringing the total value of e-commerce in India to an estimated Rs. 47,000 crores in 2011. M-Commerce requires high involvement from users as well as the providers. It tops the VAS hierarchy in terms of complexity and involvement of a mobile user. 10
  • 11. Chapter 1: Nature and scope of study 11
  • 12. 1.1 Introduction Topic: Value added services in India. In this project I have analyzed the market potential of the Value added service in India. I collected information from various source regarding the usage of VAS. And forecast the future prospects. To accomplish the above tasks I have taken following steps:        Collection of basic information Target market segmentation Questionnaire preparation Survey Collection of data Analyzing the data Preparing the report 1.2Aim and Objectives The mobile phone is coming of age as it becomes an integral part of our life, and its application extends from basic voice calling to instant messaging, calculator, mini camera, music player to an internet ready, application driven computing system. While the reach of the mobile phone is a force to be reckoned with and its potential to deliver services is immense, the range of services currently being offered in the Indian Market is certainly limited. However, the plethora of needs, from health and education to financial inclusion and governance, that it can serve are unlimited. In this context, this study seeks to understand the current and future state of Mobile Value Added Services (MVAS) in India along with some of the key drivers, challenges, and solutions which can spur the growth of the ecosystem. The study further delves into the potential of MVAS to enhance the quality of life and standard of living for major sections of the Indian populace, including the effective and efficient delivery of government services. Objective of study are:  To find out the market potential of Value added service in India.  To find out the factors influencing the VAS service.  To find the customer satisfaction level with VAS providers.  Their perception about VAS? 12
  • 13. 1.3 Research Problem Statement  Method of data collection was through personal interview and therefore biasing becomes a major limitation.  The sample was restricted to 50 customers, which may restrict the scope of study.  Owing to their pre occupation some customers were unable to answer the complete questionnaire.  If the interviewer or the interviewee misunderstood the question, it may lead to the failure of the research  Since I have used judgemental sampling technique and major limitation of this technique is that the Samples are not easily defensible as being representative of populations due to potential subjectivity of researcher.  Budget Constraint. 1.4 Scope of the Study This study includes direct interaction with the customers and this helps us to know the ‗Market potential and customer satisfaction level ‗to great accuracy. This study is of great importance to the company which will know about the customer preference to buy a particular VAS service. The company will gain information about customer‘s preference depending on the following factors:    Price factor Quality of Service User Group Preference of service. 13
  • 14. 2: Chapter Industrial overview 14
  • 15. 2.1 Industry Overview I. Total Telephone Subscribers The number of telephone subscribers in India increased to 960.90 Million at the end of May, 2012 from 952.91 Million at the end of April 2012, thereby registering a growth rate of 0.84%. The share of urban subscribers has declined to 64.65% from 64.95% whereas share of Rural Subscribers has increased to 35.35% in the month of May 2012. With this, the overall Tele-density in India reaches to 79.28 at the end of May, 2012 from 78.71 of the previous month.  million at the end of May, 2012. Subscription in Rural Areas increased from 334.00 million to 339.69 million during the same period. The growth rate of Urban and Rural Subscription is -0.37% and 1.71% respectively. The overall Urban Teledensity has increased from 168.83 to 169.17 and Rural Teledensity increased from 39.57 to 40.21. 15
  • 16.        The Indian MVAS Market size is INR 26,000 Crore and is estimated to touch INR 33,280 Crore by 2013. The MVAS Market has seen a growth of 32% over 2011. It is estimated to see a growth of 28% in the next year. Even though the ARPU has declined over the years, the per user spent on MVAS has gone up by 28% in the last one year. It is now 27% of the ARPU. The dependency on Voice services is reducing and to increase the ARPU, the emphasis must be put on Data services such as MVAS. The MVAS Market can be divided into two major categories: Current MVAS (63%) and Emerging MVAS (37%) The Current MVAS consists mainly of CRBT (27%) and SMS Based application (17%) The Emerging MVAS consist mostly of Mobile Apps (10%) and Games (8%). These have enhanced content and require higher data usage. As of March 2012, there were 48 Mn Mobile Internet users in India. It has been growing at the rate of 17%. Affordable mobile devices and cheaper data subscription rates are the main drivers for this rapid growth. 16
  • 17. The Indian MVAS Industry Uptake in MVAS Spends: Currently, the Indian mobile telecom market comprises of 96% of Pre-Paid consumers. As large as 80% of their monthly mobile expenditure is spent on voice services. Of the rest, majority goes for SMS and CRBT related MVAS services. Thus, the user is left with very little amount to spend on other MVAS application. Hence, the need to raise the awareness and make the MVAS affordable for the common mobile user to increase adoption is all the more imperative. The per user spent of MVAS has increased by 28% over last year even though the ARPU has shown a decline over the years. Currently it stands at INR 24 per month per user. The percentage share of per user spend on MVAS in ARPU has been increasing gradually. We can say that ARPU is directly proportional to the expenditure on Voice services (which includes calls, sms etc.) and Data services (mainly MVAS). Thus, the increasing share of MVAS spent per user in ARPU means that the dependency on Voice services is reducing. The ARPU has been declining over the year, primarily because of the decreasing voice rates. In December 2011, the ARPU was INR 96 for GSM services and 73 for CDMA services. Although it has shown some signs of growth, it has not been able to achieve the earlier figures. This growth has been fuelled with the increased spends in MVAS. In the coming years, even though the ARPU will increase by 5 - 8%, there will be reduced contribution from the Voice services while the Data services will take a major portion of the ARPU. In this wake, the operators are increasingly moving towards the alternative revenue streams such as non-voice based services. We have already started witnessing this trend with most of the MVAS applications built in and heavily promoted. 17
  • 18. 2.2 Company Overview Hungama Digital Media Entertainment Hungama Digital Media South Asia's largest mobile & Internet based Entertainment Company, [1] began its journey as an online promotions agency during the internet boom in 1999. 10 years hence, it is a complete Digital Entertainment, Mobile services and Promo Marketing entity. Today, Hungama Mobile is the leader in the Mobile Entertainment and Value Added Services (VAS) in India. Hungama is the largest aggregator, developer, publisher and distributor of Bellwood & South Asian entertainment content in the world, having worldwide exclusive rights to over half a million music and video titles. It powers nearly 70% of all mobile digital entertainment content in India, and provides the same entertainment to consumers in 33 countries, with more than 145 partners across the world. Headquartered in Mumbai, Hungama Digital Media employs over 500 employees in five countries. Originally launched as a brand promotions website in 1999, Hungama.com is today India's largest on-demand Digital Entertainment storefront, serving audio, video and imagery to South Asians across the world. At Hungama.com, consumers can preview, buy and download entertainment across all genres. 18
  • 19. 19
  • 20. RECENT AWARDS 2012 Online Game Of The Year- WAT Awards 2012 Hungama Game Studio has bagged the award for 'Best Online Game of the year', at the WAT Awards 2012. Cricket Stock Exchange (CSX), the award winning game sponsored by Maruti Suzuki 2010 Hungama.com wins big at the 2010 Creative Abby‟s, with silver for the Hungama.com My Play Application for Face book and a bronze each for the Hungama.com WAP site and the Hungama.com Mobile Application. 2009 Hungama bags a „Meffy‟ for Tata Sky Active Mall!! Hungama has bagged a Meffy in the 'Mobile First Innovation' category for the 'Tata Sky Active Mall' service. Hungama Digital Media is the first Indian company to have won an award in this category. PMAA 2009 Hungama Digital Media wins a ‗Gold Dragon‘ at Promotion Marketing Awards of Asia 2009 FICCI BAF Gaming Hungama bags the FICCI BAF 2009 for Bollympics Hungama Digital Media shimmers in Silver and Bronze at the 2009 Abby‟s Wins Silver for the ‗Viral and Email Marketing‘ for and one Bronze for the ‗Integrated Digital Campaign‘ - both for 'Ghajini' 20
  • 21. SWOT ANALYSIS 21
  • 22. 2.3 Organization Structure TEAM MEMBERS Neeraj Roy Chief Operating Officer, Hungama Mobile CEO Albert Almeida Managing Director & Siddhartha Roy Services Chief Operating Officer Voice Consumer Business & Allied Anuj Bajpai Assistant Vice President Mobile Arindam Nag Head of Product, Consumer Business. Hungama Carlton D‘Silva Chief Creative Officer Hemant Jain Senior Vice President, Hungama Mobile Kunal Arora Head of Digital 22
  • 23. Manan Chhatrapati Chief Technology Officer Managed Services Business Niloufer Dundh Head, Integrated Media Strategic Business Salil Koul Senior Vice President, Hungama Promo Marketing Finance Suleman Mobhani Director & Co-founder theinternational Bellwood Hungama Hungama Nilay Kumar Assistant Vice President, Reetu Khatau General Manager, Saumin Shah Vice President, Accounts & Sunny Virmani Vice President of mobile business 23
  • 24. 3rd Chapter Literature Review 24
  • 25. 3.1 Literature Overview INTRODUCTION 1. Telecommunications had traditionally been a voice communication service. The services today have moved beyond their fundamental role of voice communications to a variety of non-core services, which in telecommunication parlance is called Value Added Services (VAS). Value Added Services are enhanced services, in the nature of non-core services, which add value to the basic telecom services. 2. Value Added Services add value to service, enabling the subscriber to use the telephone, particularly the mobile phone or any end user terminal device for a host of purposes like sending short messages, pictures, play games, listen to music, read news headlines, astrology, get flight information, surf Internet, mobile banking including mobile payments etc.. In times to come people will buy mobile phones or any end user terminal device not just to remain connected but to express themselves in a variety of ways. 3. The last decade has seen a phenomenal growth in the telecom subscriber base. We have crossed the 850 mn mark with respect to wireless telephone subscribers and adding nearly 18 mn connections every month. In the developing nations like India, where Personal Computer (PC) penetration is so low, mobile phone offers to be the best form of a communication application. Managing and buying PCs and laptops is still too expensive for our masses. 4. Till some time back use of mobile phones was limited to voice and text messaging providing an effective media to citizens for interacting with each other anytime anywhere. However, telecommunication has moved beyond providing just basic voice calls. The mobile phone has evolved from a mere communication device to smart phone with an ability to tap a plethora of information & services and as a result being referred to as the =fourth screen‗, after Cinema halls, Television and PC. 5. Consumer expectations have also evolved to where the term wireless no longer implies just voice service, but rather represents an effective medium through which one connects—in real time, from any place—to be informed, entertained, engaged in visual or audio communication, or to buy goods and services. The increasing young generation of India is driving this phenomenon with their nomadic lifestyle. 25
  • 26. MOBILE VALUE ADDED SERVICES –GROWTH DRIVERS AND PRESENT STATUS MVAS Size The MVAS market has seen significant growth in the past few years. The rate of adoption of MVAS has been higher than the rate of growth of new mobile subscribers. The total market size of the MVAS market was INR 19,700 Crores in 2011 and will growth at an average rate of 28% to reach INR 26,000 Crores by 2012. This market size considers purely the MVAS services MVAS Categories in India With this immense growth of the MVAS market, 2 popular categories have emerged in the market: Current MVAS: We can call these the ABC of MVAS. Emerging MVAS: These can be called the DEFG of MVAS. The ABCs comprise Ringtones, Caller Ring Back Tunes, and SMS services like live cricket updates, Horoscope updates, Voting, Contests, and Wallpapers etc. These categories of MVAS have been going strong since the inception of MVAS and will continue to do so in the near future. The Indian mobile user was introduced to MVAS through these ABCs and accepted by the users. The primary reason for this is Convenience and Ease of Usage. One doesn‘t need to go through a lot of processes but merely a few buttons to get these services on their phones. Besides, most of these services are not dependent on the model of the mobile handset. Thus the ABCs take the highest share of the MVAS market pie and will continue to grow strong. 26
  • 27. The DEFGs comprise applications (or in the colloquial parlance: apps) in the categories of health, medication, applications which require higher bandwidth and mGovernance. With the new innovations in technology, these emerging MVAS will gain momentum in the near future. Most of these services are dependent on the telecom infrastructure and the type of mobile handset. As the penetration of the featurephones and smart phones increases in the Indian market we shall see higher penetration of the DEFGs. On a broader level, we can define the Current and Emerging MVAS as: Current MVAS: The traditional MVAS comprising mostly of entertainment and SMS based services. These can be accessed on basic phones and do not require higher bandwidth or high handset specifications. Emerging MVAS: The new age applications with enhanced content and higher data usage. These need phones with an ability to download applications and process them i.e. the feature phones and the smart phones. Apart from these categories, mCommerce needs a special mention among the MVAS services. More than being an application / service, it will act as an enabler for the user to make payments from their mobile devices. 27
  • 28. Type of MVAS Users As the Indian MVAS market moves towards maturity, we can see two major segments of Individual MVAS users emerge: O Mature User O Novice User The Mature Individual User: This user segment has used the SMS and CRBT in the past and now has moved on to using applications on feature phones and smart phones. Hailing usually from the urban areas, this user is usually an innovator or early adaptor and tries out new developments before the entire market adopts it. This group has moved on to Off-Deck MVAS applications and will download, customize and share new applications. Although lesser in number, the per user contribution of this segment is higher than the Novice Individual user. The Novice Individual User: This user segment has been using the mobile phone mostly for voice and SMS for communication or recently started using the mobile phone. This segment is usually the late majority in the adoption cycle and does not like to try new applications unless the need arises. This segment has not paid for the applications or downloaded any on the handset and prefers to use the ones pre-loaded. This group will start using the OnDeck MVAS applications like pre-loaded games and then move on to SMS based applications. 28
  • 29. As the maturity grows, they will move on to use social networking applications on their handsets. Many of these users will commence their journey on the Internet not from the browser on a computer but an application on a mobile handset and as they grow mature, will define how internet usage evolves. The Maturity and the Application Usage Matrix explains how users at various levels of maturity start using MVAS applications depending on their usability. For instance, a novice user will start using MVAS from the simplest applications like SMS and games which are embedded on his/her mobile device before moving on to external applications. His/her maturity also keeps increasing as the usability of the applications increase. MVAS Ecosystem There are various types of MVAS ecosystems existing today. The major ones are: Operator Centric Model: The predominant business model for MVAS in India is Operator Centric where the Mobile Network Operator (MNO) is at the centre of the system. In this model, the MNO takes the sole responsibility and thus, the risk of marketing the MVAS application. The price and promotions are decided by the MNO and hence, a larger portion of the revenue from the application is taken by the MNO. The Content Delivery Entities viz. the application owners and developers are paid a smaller percentage of the revenue although they are assured of volume. In the Indian market, this model has worked so far as most of the MVAS applications were either SMS based or On-Deck MVAS types. There was very little penetration of Off-Deck MVAS applications. Non Operator Centric Model: In this model, the MNO stays outside the system. The content aggregator or the content owner may be at the centre of the system. Here, the terms are decided by the Content owner aggregator. The MNO just provides the channel for the data transfer 29
  • 30. Each of these models has the risk of giving too much responsibility and power, hence revenue in the bag of one of the stakeholders. This may lead to a case of abuse of power making the end user suffer. Thus, to keep the user‘s benefit in mind, one must adopt a business model with the user at the centre. With the increasing penetration of Mobile Internet, a User Centric Model is indeed a possibility with more emphasis on Off-Deck type MVAS application which the user can choose and select based on his needs. Hence the need for innovative content increases all the more. Thus, with this, the need for a fair revenue share becomes all the more necessary. User Centric Model: A model where the user is at the centre of the ecosystem, the content owners / developers have their separate identity with short codes. They supply the application to the end user. The MNO provides the channel for download and billing. The device manufactures provide the necessary technical platform support to the content owners / developers. And ultimately the product gets delivered at the users‘ end. This whole ecosystem exists in an ad-supported ecosystem encouraging digital commerce. 30
  • 31. Global Scenario The global ecosystem is predominantly Platform Owner centric and closely mimics the Service Aggregator Model. The distribution and delivery of the application is controlled by the platform owner or the Application Stores viz. Apple AppStore, Google Play store, Blackberry AppWorld etc. These Application Stores contain the applications in the form of a directory which make it easier to discover and download application. The payment mechanism is centralized with the Platform owner providing the payment gateway. Although this is a convenient ecosystem that has existed for long as it is beneficial economically and provides a single point of control, it may lead to abuse of power by the Platform owner. This type of ecosystem also leads to the much feared „Walled Garden‟ situation where even though pleasant, the sole controller wields supreme power over the contents of the app store 31
  • 32. hereby separating it from the other application it doesn‘t want on its platform. This puts a restraint on the users from using any application of their choice. The ‗Walled Garden‘ like situation can be avoided by allowing doors and windows in the ‗Wall‘ by allowing the users to access the application from outside sources other than the default service provider. This will ensure no abuse of power by the service providers and empower the end user. Thus, we see the need to have a user centric model where the application developer / owner interacts directly with the end user and the operator and the handset manufacturer are providing payment and technology support. Future of MVAS The MVAS industry has been one of the major drivers of growth of the Indian telecom industry over the last few years. And it will continue to enable the end user to do more with their mobile devices than mere make and receive calls. With focus from the stakeholders and support from the regulating authority, we can expect aster development for MVAS. Some of the developments that we can expect in the near future are: Mobile Advertisement: o Improved connectivity will allow richer and interactive advertisement than the current SMS based advertisements. This will be less irritating and will have a higher conversion ratio. We have already started seeing this phenomenon with the introduction of QR codes in newspapers and magazines which lead the user to interactive advertisements. Local language Content: o With the linguistic diversity of India, one needs to have the content in local languages to appeal to a larger group of users. Many websites have already started offering this service to the consumers. Rural MVAS: o And last but not in any way the least, the key to the Indian market lies in the huge and hitherto untapped rural market. And Location based services, Local Language and Right Content will be the key to serve this market successfully. Thus understanding the Indian mobile consumer and utilizing the full potential of the mobile device is the next step in the Mobile Revolution. 32
  • 33. Mobile Value Added Services Value Chain B- Mobile Value Added Services – Value Chain  A typical value chain in the MVAS industry encompasses content creators/providers, mobile advertisers, aggregators, technology enablers, telecom service providers and end users or subscribers. Content aggregation and provision of technology platform is usually performed by a single entity known as Value Added Service Provider (VASP). It is also to be noted here that in the value chain of MVAS, telecom service providers are very big entity in comparison to the content providers/content aggregators who are basically SMEs. Mobile handset manufacturers have also started playing an important role in the VAS value chain. Advertisers are also looking for higher delivery of marketing activities through mobile VAS platform. (i) Content owner/ provider The first stakeholder in the value added services value chain is the Content Authors/Producers or copyright owners known as content owners. These entities provide the core content which drives the VAS – which may be owned or sourced by them. Examples include the music companies, movie production houses, media companies, TV channels etc. Their offerings include copyright of songs, entertainment news, movies, television listings, movie trailers, and promotional media content. Advertisers are also producing content for promotion and delivery of marketing communication to consumers through mobile VAS platform. 33
  • 34. (ii) Content Aggregators These are the companies that aggregate content obtained from various content owners/providers, convert it into the digital or any other suitable format and make it available to technology enablers (value added service providers) or telecom service provider. (iii) Technology Enablers These entities also called as Value Added Service Provider (VASP) provide the technology layer for the telecom networks, which in most of the cases also performs the task of Content aggregator. The technology layer often includes a VAS platform, Mobile Application development & hosting, MIS & reporting tools, operator billing, collection & payment settlement engine. Technology enabler may or may not be dependent on content developers, e.g. mobile phone back up facility does not require any content from the developer but the solution is directly provided to the telecom operator. (iv) Telecom Service Provider Telecom service providers own the access network & end users and also provide enduser billing & collection for the provision of VAS. They have commercial agreements or arrangements with the VASPs for providing the VAS. (v) Handset manufacturers In some cases the Mobile handset manufacturers have direct agreement with content owners or VASPs for content which are embedded in the handset or terminal device. An example of such content is games coming with the mobile handset. They also provide features such as on-device portals which are accessible through embedded links provided in the handsets. 34
  • 35. 35
  • 36. Regulatory Framework for MVAS Presently, Indian MVAS industry is young and evolving. MVAS providers are not regulated or licensed and mainly they act as service partners of telecom service providers. The telecom service providers are the core in the value chain as they own network infrastructure and have a large customer base. VAS providers aggregate different type of content and enable the content suitable to be transported on mobile network. Both telecom service providers and VAS providers complete the value chain for providing VAS to customers. Telecom service provider and VASPs enter commercial agreements for provisioning of MVAS. There is no standard format of agreement and, telecom service providers being the core of the MVAS value chain, usually dominate in finalizing the terms and conditions of the agreement. The framework for issue of licenses for some value added services already exists, particularly in respect of Voice Mail/Audiotex, Unified Messaging etc. The Department of Telecommunications had notified the revised terms and conditions for Other Service Providers (OSP) category on 31st May, 2007. As per these terms and conditions, =Other Service Provider‗means a company providing Application Services. Application Services have been defined to mean services like tele-banking, tele-medicine, teleeducation, tele-trading, e-commerce, call centre, network operation centre by using Telecom Resources provided by Authorized Telecom Service Providers. In view of the growing significance of value added services, possibilities of various new/enhanced value added services in 3G, BWA and Next Generation Networks (NGN) environment, it may be appropriate to consider whether the licensing system is to be resorted for licensing of mobile value added service providers. Migration to NGN could change the existing service providers‗business models. The service independence from core network in case of NGN could encourage Value Added Service Providers to launch innovative services and sector specific solutions. A possible consequence of such new developments may change service provisioning profile. A sizable number VASPs providing many innovative applications & value added services could emerge and traditional network service providers may become pure access providers. This could change the business model of the existing telecom service providers to an extent, which may require regulatory measures. In view of the growing and likely unprecedented expansion in these services and their contribution to the revenue stream of telecom service providers, the importance of bringing a suitable framework cannot be over-emphasized. The framework could ensure a level playing field and transparency between content providers/aggregators and telecom service providers. 36
  • 37. There are divided views on the issue of bringing independent MVAS provider under licensing regime. One of the key arguments in favor of a licensing regime for value added services is to ensure that consumer‗s interests as well as the interest of smaller VASPs are safeguarded. The licensing will allow the independent MVAS providers to seek interconnection with QoS from telecom service providers. As a licensee they can also approach TRAI/TDSAT for resolving their issues. On the contrary it is argued that looking at the large number of entities involved, some of them being very small, it may be difficult to bring them under licensing regime. Further bringing these small entities involved in MVAS value chain will unnecessarily burden them with the various obligation attached to a license. At times this may be counterproductive and suppress innovative entrepreneurship. Separate licensing regime is available for value added services in Singapore, China, Malaysia, Bahrain and some African countries. On the other hand in some countries there is no need to obtain a license to provide value added services and a simple intimation is sufficient. For example in Australia, all suppliers of Mobile Premium Services are required to just submit company details to the Mobile Premium Services Industry Register managed by Communications Alliance. The Authority in its recommendations on .Spectrum Management and Licensing Framework. issued in May 2010, recognized the need to develop a healthy ecosystem for value added services and indicated to initiate a consultation process separately to identify measures for the proper growth of the VAS industry, including bringing them under the licensing regime. The Authority also recommended that all future licenses should be unified licenses and that spectrum be delinked from the license. Is there a need to bring the Value Added Service Providers (VASPs) providing Mobile Value Added Services under the licensing regime? If yes, do you agree that it should be in the category of the Unified License as recommended by this Authority in May 2010? In case of disagreement, please indicate the type of license along with the rationale thereof. 37
  • 38. Revenue sharing Presently telecom service providers and VAS providers enter into mutual commercial agreements for provisioning of value added services. These agreements contain various terms and conditions including the conditions as to how the revenue generated through provision of MVAS will be shared between VAS providers and telecom service providers. Content is an important ingredient for plethora of value added services being provided by telecom service providers. For these services, the telecom service providers mainly depend upon the VASPs but concerns have been raised by some of the stakeholders that VAS providers do not get commensurate returns. It is reported that Mobile service providers dominate the MVAS market to a significant extent, by determining MVAS service fees, by selecting VASP according to their service portfolio they want to offer, by excluding service providers who do not generate sufficient revenues, by monitoring service contents and by controlling service access and billing. According to various reports, telecom service providers typically retain the bulk of the revenue (around up to 60% to 65%) (Table 2.1) from MVAS depending on the type of content that is being delivered to the users. The rest of the revenue is shared among copyright owners, content developers, content aggregators, and technology enablers. According to market reports, in case of content with copyright, the mobile service provider is reported to get 60% revenue; a technology enabler gets 15% while content developer and aggregator together gets 15% share in MVAS revenue. The copyright owner gets balance 10% of MVAS revenue. In case of content without copyright, mobile service provider is reported to receive 65% of the revenues, a technology enabler gets 20% and balance 15% goes to content developer and aggregator. However, these are not the standard percentage of revenue share and vary across the service providers based on the mutual commercial agreements and type of content. 38
  • 39. Source: IAMAI Report on Mobile VAS in India: It is said that the telecom service providers justify their revenue share with 3 costs – cost of building the market (i.e. entry & license fees, branding, customer acquisition etc.); cost of usage of the infrastructure, interconnection and finally cost of billing and collection. On the contrary the content providers/content aggregators (VASPs) severely complain and express their concerns that they do not get adequate share as telecom service providers retain large share of revenue earned through mobile Value Added Services. As per them it makes return on investment (ROI) of VASP unattractive, not enough to encourage faster capital investments required to grow the VAS industry to the desired level. In the absence of suitable revenue share for both VAS provider and service provider the development of VAS, which is essential both for development of the economy as well as the telecom sector, could suffer. Adequate revenue share for VAS providers could make the market attractive for the entry of many entrepreneurs in the VAS business. On the other hand, better margins from MVAS for telecom service providers could meet the revenue gap from core services and attract investment in the network expansion. The revenue share may also be dependent upon a number of factors such as the nature of technology, utility of content, demand from the customers and innovation involved. There may be some VAS which may involve higher degree of innovation and utility than some other applications which could be commoditized. In this scenario it may be necessary that the innovative VAS solutions be rewarded suitably so as promote 39
  • 40. innovation. Accordingly, revenue share could become a function of the innovation and utility involved in the concerned VAS. How do we ensure that the VAS providers get the due revenue share from the Telecom Service providers, so that the development of VAS takes place to its full potential? Is there a need to regulate revenue sharing model or should it be left to commercial negotiations between VAS providers and telecom service providers? At the same time, how do we also ensure that the revenue share is a function of the innovation and utility involved in the concerned VAS? Should the revenue share be different for different categories of MVAS? The revenue earned through MVAS is decided based on the information recorded in Management Information System (MIS). Both VAS providers and telecom service providers maintain their respective MIS for arriving at the revenue accrued through provisioning of MVAS. As per the industry feedback, there are often differences in billing between the MIS of telecom service providers and the MVAS providers. It is also reported that there is a lack of transparency in statistics of content transactions, absence of credible systems to address disagreements and grievance redressal mechanisms. In the absence of a system validating the number of data downloads or transactions between MIS of telecom service providers and the MVAS providers, the account provided by the service provider may prevail due to higher bargaining power. This may lead to differences in the actual revenues earned between telecom service providers and the MVAS providers. Sharing of information between telecom service providers and the MVAS providers can lead to reconciliation between MIS of telecom service providers and the MVAS providers in a transparent and fair manner. Do you agree that the differences come up between the MIS figures of the operator and VAS provider? If yes, what measures are required to ensure reconciliation in MIS in a transparent manner? 40
  • 41. Barriers to Growth of MVAS in India The challenges emanate from the fact that this segment of the Indian telecom industry is still in a nascent stage and the rules of the game are still evolving. Further, apart from the operators, there are a large number of small players operating across the value chain. The challenges posed to the industry that are likely to hinder projected growth are as follows: Authentication standards: Presently, there are no authentication standards set out for operators and aggregators that apply to the download of content (10). This needs to be addressed by the institution of standards by an industry governing body such as the Telecom Regulatory Authority of India (TRAI) to authenticate the flow of information. This will help create trust among different stakeholders across the MVAS value chain. Copyright protection: As stated earlier, the regulatory framework for copyright protection continues to remain weak despite the extension of existing copyright laws to content, with several instances of violations. In the wake of inadequate remedial action on this front, the MVAS segment is likely to be disadvantaged. The industry requires a stringent regulatory framework in place, to encourage the flow of branded content t o consumers. This will instill trust and confidence among various stakeholders across the value chain, leading to increased revenues from data services in the long run. Low feature handsets: Despite considerable growth in mobile subscriber base, low feature handsets continue to remain the order of the day. The purchase decision for handsets continues to be driven by basic utility for voice (6). According to the India Mobile Handset Usage Satisfaction Study 2006, an integrated digital camera, FM Radio, and speaker phone features remain the most likely upgrade drivers. Features such as Tri-band, Bluetooth, Infrared Port, etc., are growing, but are far from developing mass appeal (26). The lack of widespread adoption of feature-rich mobile handsets are a barrier to the growth of MVAS in India. However, in the recent past, prices of feature-rich handsets have declined sharply owing to increasing competition among manufacturers and technological advances. There will be a move towards advanced feature handsets in the future even if need and lifestyle do not justify it (26). Low “General Packet Radio Services” (GPRS) connectivity: GPRS connectivity in India continues to be low given limited handset capability and operator constraints. There is a large population of users who are not familiar with accessing GPRS. Despite its limitation in terms of number of characters (160 characters) and being more cumbersome, SMS continues to be the most popular delivery channel. In comparison, GRPS will provide a rich as well as user-friendly online experience. This can only pick up once the penetration of feature rich handsets grows, and operators provide free GPRS connection. 41
  • 42. Transparency in revenue sharing arrangements: The current revenue sharing arrangements favor the operators, and are in stark contrast to the business models in established markets such as China, Japan, and Europe. The market is highly unregulated and the absence of an apex body has led operators to pursue obfuscation strategies. The Indian MVAS industry needs to take a close look at best practices in developed markets to design a fair revenue distribution system, whereby creators/owners are adequately rewarded for creating higher quality content (10). There is a need to create a transparent framework that clearly sets out balanced revenue sharing arrangements, with a fair system of payouts to different stakeholders across the value chain. Excessive focus on entertainment-related VAS: The MVAS market in India continues to be focused on entertainment (movies, music and sports) catering to the needs of the younger consumer segment. Going forward, there is a need to focus on information VAS and transactional VAS (M-commerce), ensuring even growth among all consumer segments. 42
  • 43. Current Trends in MVAS The mobile phone is one of the everyday life changing developments of the previous decade. Today mobile phones can be addressed as a multitasking communication and entertainment device for an increasing segment of the group market. The youth are tech savvy and are comfortable trying a new medium. Mobile entertainment sector is very vast and includes:  Online maps (Navigation) – This service helps you to find your location online as well as plan a route using this online map feature.  Download media contents such as mobile phone ringtones, pictures, games, and videos – All the latest mobile service contents are available to be downloaded instantly for your mobile phone.  Remix your own mobile phone ringtones – This is an application wherein you can remix your own mobile phone ringtones to be stored in your mobile phone. The application is very simple and you can create an exclusive ringtone that no one else has.  Join online competition – There are many competitions and contests available online. You can win get great prizes including all luxury products or you can also get a chance to meet your favorite stars.  Betting online and lottery – If you are interested into gambling, then with this facility of online gambling, you can certainly try your luck.  Celebrity latest news and gossips - Want to know what‘s happening in your favorite superstar‘s and celebrity‘s life? You can get your daily fix of your favorite‘s stories.  Mobile TV – TV features a whole range of exceptional channels for your mobile phone viewing pleasure. Turn in to any of your favorite sports, news, or comedy and enjoy the service any time anywhere.  Online magazines – Get the latest news on your favorite magazine, glamour, sports, automobile and all.  Dating – If you are still single and available and looking for true love, you can look further with this special feature.  Food and drink – With this feature you can find nearby restaurants and bars. You can also find some guidance from this service as to where you can go for lunch or dinner.  Information on health and diet – Taking care of yourself is the first thing you need to do before you start taking care of others. By enabling this service you can get good health and diet tips, just by a click on your mobile phone.  Cinema ticket‟s booking – You can book your cinema ticket online using your mobile phone. All you need to do is to carry your identity card along with your mobile phone and collect your ticket from the window at cinema hall. You can also look for information about the latest movies and book tickets... 43
  • 44. Chapter 4: Research Methodology 44
  • 45. 4.1 Overall Research Process Marketing research process is a set of six steps which defines the tasks to be accomplished in conducting a marketing research study. These include problem definition, developing an approach to problem research design formulation, field work, data preparation and analysis, and report generation and presentation. Stages of marketing research process Step 1: Problem Definition The first step in any marketing research project is to define the problem. In defining the problem, the researcher should take into account the purpose of the study, the relevant background information, what information is needed, and how it will be used in decision making. Problem definition involves discussion with the decision makers, interviews with industry experts, analysis of secondary data, and, perhaps, some qualitative research, such as focus groups. Once the problem has been precisely defined, the research can be designed and conducted properly. Step 2: Development of an Approach to the Problem Development of an approach to the problem includes formulating an objective or theoretical framework, analytical models, research questions, hypotheses, and identifying characteristics or factors that can influence the research design. This process is guided by discussions with management and industry experts, case studies and simulations, analysis of secondary data, qualitative research and pragmatic considerations. Step 3: Research Design Formulation A research design is a framework or blueprint for conducting the marketing research project. It details the procedures necessary for obtaining the required information, and its purpose is to design a study that will test the hypotheses of interest, determine possible answers to the research questions, and provide the information needed for decision making. Conducting exploratory research, precisely defining the variables, and designing appropriate scales to measure them are also a part of the research design. The issue of how the data should be obtained from the respondents (for example, by conducting a survey or an experiment) must be addressed. It is also necessary to design a questionnaire and a sampling plan to select respondents for the study. More formally, formulating the research design involves the following steps: 1. 2. 3. 4. 5. 6. Secondary data analysis Qualitative research Methods of collecting quantitative data (survey, observation, and experimentation) Definition of the information needed Measurement and scaling procedures Questionnaire design 45
  • 46. 7. Sampling process and sample size 8. Plan of data analysis Step 4: Field Work or Data Collection Data collection involves a field force or staff that operates either in the field, as in the case of personal interviewing (in-home, mall intercept, or computer-assisted personal interviewing), from an office by telephone (telephone or computer-assisted telephone interviewing), or through mail (traditional mail and mail panel surveys with prerecruited households). Proper selection, training, supervision, and evaluation of the field force help minimize data-collection errors. Step 5: Data Preparation and Analysis Data preparation includes the editing, coding, transcription, and verification of data. Each questionnaire or observation form is inspected, or edited, and, if necessary, corrected. Number or letter codes are assigned to represent each response to each question in the questionnaire. The data from the questionnaires are transcribed or key-punched on to magnetic tape, or disks or input directly into the computer. Verification ensures that the data from the original questionnaires have been accurately transcribed, while data analysis, guided by the plan of data analysis, gives meaning to the data that have been collected. Univariate techniques are used for analyzing data when there is a single measurement of each element or unit in the sample, or, if there are several measurements of each element, each RCH variable is analyzed in isolation. On the other hand, multivariate techniques are used for analyzing data when there are two or more measurements on each element and the variables are analyzed simultaneously. Step 6: Report Preparation and Presentation The entire project should be documented in a written report which addresses the specific research questions identified, describes the approach, the research design, data collection, and data analysis procedures adopted, and present the results and the major findings. The findings should be presented in a comprehensible format so that they can be readily used in the decision making process. In addition, an oral presentation should be made to management using tables, figures, and graphs to enhance clarity and impact. For these reasons, interviews with experts are more useful in conducting marketing research for industrial firms and for products of a technical nature, where it is relatively easy to identify and approach the experts. This method is also helpful in situations where little information is available from other sources, as in the case of radically new products Source: Malhotra, Naresha K. (2002), Basic Marketing Research: A Decision-Making Approach, Upper Saddle River, NJ: Prentice Hall 46
  • 47. 4.2 Research Design The research design is a comprehensive master plan of the research study to be undertaken, giving a general statement of the methods to be used. The function of a research design is to ensure that requisite data in accordance with the problem at hand is collected accurately and economically. Simply stated, it is the framework, a blueprint for the research study which guides the collection and analysis of data. The research design, depending upon the needs of the researcher may be a very detailed statement or only furnish the minimum information required for planning the research project. To be effective, a research design should furnish at least the following details. a) A statement of objectives of the study or the research output. b) A statement of the data inputs required on the basis of which the research problem is to be solved. c) The methods of analysis which shall be used to treat and analyze the data inputs. A Research model is a way of proceeding through the research process by breaking the process into logical steps each action can be designed more efficiently. Define Research Objectives: Decide very specifically the questions that need to be answered. Do preliminary research: Collect any information that will help define the objectives more clearly, including existing statistics on the industry or the target constituency. Design the formal research. Develop the data-collection instruments (such as questionnaires or interview protocols). Decide on how the target group will be sampled and choose the means of contact (mail. telephone, or in person). Do fieldwork: Collect the data, making sure that the procedure is as free of bias as possible. Analyze the data. Analyze. Interpret and report the results. (Source: Wolf 1990 Managing a nonprofit organization, Prentice Hall, p. 133) 47
  • 48. 4.3 Types of Research There are basically two types of research approaches: QUANTITATIVE APPROACH Quantitative research refers to the systematic empirical investigation of social phenomena via statistical, mathematical or computational techniques. The objective of quantitative research is to develop and employ mathematical models, theories and/or hypotheses pertaining to phenomena. The process of measurement is central to quantitative research because it provides the fundamental connection between empirical observation and mathematical expression of quantitative relationships. Quantitative data is any data that is in numerical form such as statistics, percentages, etc. In layman's terms, this means that the quantitative researcher asks a specific, narrow question and collects numerical data from participants to answer the question. The researcher analyzes the data with the help of statistics. The researcher is hoping the numbers will yield an unbiased result that can be generalized to some larger population. Qualitative research, on the other hand, asks broad questions and collects word data from participants. The researcher looks for themes and describes the information in themes and patterns exclusive to that set of participants. Quantitative research is used widely in social sciences such as psychology, economics, sociology, and political science, and less frequently in anthropology and history. Research in mathematical sciences such as physics is also 'quantitative' by definition, though this use of the term differs in context. In the social sciences, the term relates to empirical methods, originating in both philosophical positivism and the history of statistics, which contrast qualitative research methods. Qualitative methods produce information only on the particular cases studied, and any more general conclusions are only hypotheses. Quantitative methods can be used to verify which of such hypotheses are true. Quantitative research is generally made using scientific methods, which can include:      The generation of models, theories and hypotheses The development of instruments and methods for measurement Experimental control and manipulation of variables Collection of empirical data Modeling and analysis of data In the social sciences particularly, quantitative research is often contrasted with qualitative research which is the examination, analysis and interpretation of observations for the purpose of discovering underlying meanings and patterns of relationships, including classifications of types of phenomena and entities, in a manner that does not involve mathematical models. Approaches to quantitative psychology were first modelled on quantitative approaches in the physical 48
  • 49. sciences by Gustav Fechner in his work on psychophysics, which built on the work of Ernst Heinrich Weber. Although a distinction is commonly drawn between qualitative and quantitative aspects of scientific investigation, it has been argued that the two go hand in hand. For example, based on analysis of the history of science, Kuhn (1961, p. 162) concludes that ―large amounts of qualitative work have usually been prerequisite to fruitful quantification in the physical sciences‖ QUALITATIVE APPROACH: Qualitative research is a method of inquiry employed in many different academic disciplines, traditionally in the social sciences, but also in market research and further contexts.[1] Qualitative researchers aim to gather an in-depth understanding of human behaviour and the reasons that govern such behaviour. The qualitative method investigates the why and how of decision making, not just what, where, when. Hence, smaller but focused samples are more often needed than large samples. In the conventional view, qualitative methods produce information only on the particular cases studied, and any more general conclusions are only propositions (informed assertions). Quantitative methods can then be used to seek empirical support for such research hypotheses. This view has been disputed by Oxford University professor Bent Flyvbjerg, who argues that qualitative methods and case study research may be used both for hypotheses-testing and for generalizing beyond the particular cases studied. In the academic social sciences the most frequently used qualitative research approaches include the following: 1. Ethnographic Research, used for investigating cultures by collecting and describing data that is intended to help in the development of a theory. This method is also called "ethno methodology" or "methodology of the people". An example of applied ethnographic research is the study of a particular culture and their understanding of the role of a particular disease in their cultural framework. 2. Critical Social Research, used by a researcher to understand how people communicate and develop symbolic meanings. 3. Ethical Inquiry, an intellectual analysis of ethical problems. It includes the study of ethics as related to obligation, rights, duty, right and wrong, choice etc. 4. Foundational Research, examines the foundations for a science, analyzes the beliefs, and develops ways to specify how a knowledge base should change in light of new information. 5. Historical Research allows one to discuss past and present events in the context of the present condition, and allows one to reflect and provide possible answers to current issues and problems. Historical research helps us in answering questions such as: Where have we come from, where are we, who are we now and where are we going? 49
  • 50. 6. Grounded Theory is an inductive type of research, based or "grounded" in the observations or data from which it was developed; it uses a variety of data sources, including quantitative data, review of records, interviews, observation and surveys. 7. Phenomenology describes the "subjective reality" of an event, as perceived by the study population; it is the study of a phenomenon. 8. Philosophical Research is conducted by field experts within the boundaries of a specific field of study or profession, the best qualified individual in any field of study to use an intellectual analysis, in order to clarify definitions, identify ethics, or make a value judgment concerning an issue in their field of study. Source: http://www.newagepublishers.com/samplechapter/000896.pdf http://en.wikipedia.org/wiki/Qualitative_research In my case I have used Quantitative Approach. 4.4 Types of Data: Secondary Data & Primary Data PRIMARY DATA: It refers to the statistical material which the investigator originates for him for the purpose of the enquiry in hand. In other words, it is one which is collected by the investigator for the first time e.g. if the cost of living of workers in a city are to be computed, then the information regarding the facts collected by the investigators or enumerators would be termed as Primary data. In India there are various agencies which collect primary data e.g... National Sample Survey (NSS), State Level Economic and Statistical Departments etc. When we use primary data, it is called raw material. According to Wessel, "Data originally collected in the process of investigation are known as primary data." Merits      Degree of accuracy is quite high. It does not require extra caution. It depicts the data in great detail. Primary source of data collection frequently includes definitions of various terms and units used. For some investigations, secondary data are not available. Demerits  Collection of data requires a lot of time. 50
  • 51.     It requires lot of finance. In some enquiries it is not possible to collect primary data. It requires a lot of labor. It requires a lot of skill. In my case I‘m collecting data through questionnaire and personal interview of different IT heads in and around Pune. SECONDARY DATA: Secondary data is the data that have been already collected by and readily available from other sources. Such data are cheaper and more quickly obtainable than the primary data and also may be available when primary data cannot be obtained at all. Advantages of Secondary data 1. It is economical. It saves efforts and expenses. 2. It is time saving. 3. It helps to make primary data collection more specific since with the help of secondary data, we are able to make out what are the gaps and deficiencies and what additional information needs to be collected. 4. It helps to improve the understanding of the problem. 5. It provides a basis for comparison for the data that is collected by the researcher. Disadvantages of Secondary Data 1. Secondary data is something that seldom fits in the framework of the marketing research factors. Reasons for its non-fitting are:a. Unit of secondary data collection-Suppose you want information on disposable income, but the data is available on gross income. The information may not be same as we require. 4.6 Data Collection Instruments Depending on the nature of the information to be gathered, different instruments are used to conduct the assessment: forms for gathering data from official sources such as police or school records; surveys/interviews to gather information from youth, community residents, and others; and focus groups to elicit free-flowing perspectives. For purposes of the data-collection process, the following discussion provides information on the types of data-collection tools most commonly used. 51
  • 52. Self-Administered Surveys Self-administered surveys have special strengths and weaknesses. They are useful in describing the characteristics of a large population and make large samples feasible. In one sense, these surveys are flexible, making it possible to ask many questions on a given topic. This also provides flexibility in the analysis of the responses. On the other hand, standardized questionnaire items often represent the least common denominator in assessing people’s attitudes, orientations, circumstances, and experiences. By designing questions that will be appropriate for all respondents, it is possible to miss what is most appropriate to many of the respondents (Babbie, 1992). Some advantages of the self-administered survey are:  Low cost. Extensive training is not required to administer the survey. Processing and analysis are usually simpler and cheaper than for other methods.  Reduction in biasing error. The questionnaire reduces the bias that might result from personal characteristics of interviewers and/or their interviewing skills.  Greater anonymity. Absence of an interviewer provides greater anonymity for the respondent. This is especially helpful when the survey deals with sensitive issues such as questions about involvement in a gang, because respondents are more likely to respond to sensitive questions when they are not face to face with an interviewer. Some of the disadvantages are:  Requires simple questions. The questions must be straightforward enough to be comprehended solely on the basis of printed instructions and definitions.  No opportunity for probing. The answers must be accepted as final. Researchers have no opportunity to clarify ambiguous answers. Personal Interviews The interview is an alternative method of collecting survey data. Rather than asking respondents to fill out surveys, interviewers ask questions orally and record respondents‘ answers. This type of survey generally decreases the number of ―do not know‖ and ―no answer‖ responses, compared with self-administered surveys. Interviewers also provide a guard against confusing items. If a respondent has misunderstood a question, the interviewer can clarify, thereby 52
  • 53. obtaining relevant responses (Babbie, 1992). As noted previously, personal interviews are a good way to gather information from community leaders, particularly those who might be unwilling or too busy to complete a written survey. Some of the advantages of the personal interview are:  Flexibility. Allows flexibility in the questioning process and allows the interviewer to clarify terms that are unclear.  Control of the interview situation. Can ensure that the interview is conducted in private, and respondents do not have the opportunity to consult one another before giving their answers.  High response rate. Respondents who would not normally respond to a mail questionnaire will often respond to a request for a personal interview. Some of the disadvantages are:  Higher cost. Costs are involved in selecting, training, and supervising interviewers; perhaps in paying them; and in the travel and time required to conduct interviews.  Interviewer bias. The advantage of flexibility leaves room for the interviewer’s personal influence and bias, making an interview subject to interviewer bias.  Lack of anonymity. Often the interviewer knows all or many of the respondents. Respondents may feel threatened or intimidated by the interviewer, especially if a respondent is sensitive to the topic or to some of the questions (Frankfort-Nachmias and Nachmias, 1996). Focus Groups Another method of collecting information is the focus group. Focus groups are useful in obtaining a particular kind of information that would be difficult to obtain using other methodologies. A focus group typically can be defined as a group of people who possess certain characteristics and provide information of a qualitative nature in a focused discussion. Focus groups generally are composed of six to twelve people. Size is conditioned by two factors: the group must be small enough for everyone to participate, yet large enough to provide diversity. This group is special in terms of purpose, size, composition, and procedures. Participants are selected because they have certain characteristics in common that relate to the topic at 53
  • 54. hand, such as parents of gang members, and, generally, the participants are unfamiliar with each other. Typically, more than one focus group should be convened, since a group of seven to twelve people could be too atypical to offer any general insights on the gang problem. A trained moderator probes for different perceptions and points of view, without pressure to reach consensus. Focus groups have been found helpful in assessing needs, developing plans, testing new ideas, or improving existing programs (Krueger, 1988; Babbie, 1992). Focus groups offer several advantages:  Flexibility allows the moderator to probe for more in-depth analysis and ask participants to elaborate on their responses.  Outcomes are quickly known.  They may cost less in terms of planning and conducting than large surveys and personal interviews. Limitations include:  A skilled moderator is essential.  Differences between groups can be troublesome to analyze because of the qualitative nature of the data.  Groups are difficult to assemble. People must take the time to come to a designated place at a particular time.  Participants may be less candid in their responses in front of peers. 4.6.1 SELECTED DATA COLLECTION METHOD In my case I have gone with Questionnaires for collecting my primary data. 4.6.2 Questionnaire Design Type of Question Best Used for Open-ended Breaking the ice in an interview; when respondents' own words are important; when the surveyor doesn't know all the possible answers. 54
  • 55. Closed-ended Collecting rank ordered data; when all response choices are known; when quantitative statistical results are desired. Likert-scale To assess a person's feelings about something. Multiple-choice When there are a finite number of options (remember to instruct respondents as to the number of answers to select). Ordinal To rate things in relation to other things. Categorical When the answers are categories and each respondent must fall into exactly one of them. Numerical For real numbers, like age, number of months, etc. 4.7 Survey Procedure 4.7.1 Sampling The terminology "sampling" indicates the selection of a part of a group or an aggregate with a view to obtaining information about the whole. This aggregate or the totality of all members is known as Population although they need not be human beings. The selected part, which is used to ascertain the characteristics of the population, is called Sample. While choosing a sample, the population is assumed to be composed of individual units or members, some of which are included in the sample. The total number of members of the population and the number included in the sample are called Population Size and Sample Size respectively. While the definitions of a population and a sample have been introduced in a formal manner in the previous paragraph, the idea of sampling is not really new. The process of generalizing on the basis of information collected on a part is really a traditional practice. The annual production of a certain crop in a region is computed on the basis of a sample. The quality of a product coming out of a production process is ascertained on the basis of a sample. The government and its various agencies conduct surveys from time to time to examine various economic and related issues through samples. Advantages of Sampling Less Expensive 55
  • 56. The first obvious advantage of sampling is that it is less expensive. If we want to study the consumer reaction before launching a new product it will be much less expensive to carry out a consumer survey based on a sample rather than studying the entire population which is the potential group of customers. Although in decennial census every individual is enumerated, certain aspects of the population are studied on a sample basis with a view to reduce cost. Less Time Consuming The smaller size of the sample enables us to collect the data more quickly than to survey all the units of the population even if we are willing to spend money. This is particularly the case if the decision is time bound. An accountant may be interested to know the total inventory value quickly to prepare a periodical report like a monthly balance sheet and a profit and loss account. A detailed study on the inventory is likely to take too long to enable him to prepare the report in time. If we want to measure the consumer price index in a particular month we cannot collect data of all the consumer prices even if the expenditure is not a hindrance. The collection of data on all the consumer items and their processing in all probability are going to take more than a month. Thus when ready, the price index will not serve any .meaningful purpose. Greater Accuracy It is possible to achieve greater accuracy by using appropriate sampling techniques than by a complete enumeration of all the units of the population. Complete enumeration may result in accuracies of the data. Consider an inspector who is visually inspecting the quality of finishing of certain machinery. After observing a large number of such items he cannot just distinguish items with defective finish from good ones. Once such inspection fatigue develops the accuracy of examining the population completely is considerably decreased. On the other hand, if a small number of items are observed the basic data will be much more accurate. It is of course true that the conclusion about a population characteristic such as the proportion of defective items from a sample will also introduce error in the system. However, such errors, known as sampling errors, can be studied, controlled and probability statements can be made about their magnitude. The accuracy which results due to fatigue of the inspector is known as non sampling error. It is difficult to recognize the pattern of the non sampling error and it is not possible to make any comment about its magnitude even probabilistically. Destructive Enumeration Sampling is indispensable if the enumeration is destructive. If you are interested in computing the average life of fluorescent temps supplied in a batch the life of the entire batch cannot be examined to compute the average since this means that the entire supply will be wasted. Thus, in this case there is no other alternative than to examine the life of a sample of lamps-and draw an inference about the entire batch. 56
  • 57. 4.7.2Sampling techniques: Advantages and disadvantages: Technique Descriptions Advantages Disadvantages Simple random Random sample from whole population Highly representative if all subjects participate; the ideal Not possible without complete list of population members; potentially uneconomical to achieve; can be disruptive to isolate members from a group; time-scale may be too long, data/sample could change Stratified random Random sample from identifiable groups (strata), subgroups, etc. Can ensure that specific groups are represented, even proportionally, in the sample(s) (e.g., by gender), by selecting individuals from strata list More complex, requires greater effort than simple random; strata must be carefully defined Cluster Random samples of successive clusters of subjects (e.g., by institution) until small groups are chosen as units Possible to select randomly when no single list of population members exists, but local lists do; data collected on groups may avoid introduction of confounding by isolating members Clusters in a level must be equivalent and some natural ones are not for essential characteristics (e.g., geographic: numbers equal, but unemployment rates differ) Stage Combination of cluster (randomly selecting clusters) and random or stratified random sampling of individuals Can make up probability sample by random at stages and within groups; possible to select random sample when population lists are very localized Complex, combines limitations of cluster and stratified random sampling Purposive Hand-pick subjects on the basis of specific characteristics Ensures balance of group sizes when multiple groups are to be selected Samples are not easily defensible as being representative of populations due to potential subjectivity of researcher Quota Select individuals as they come to fill a NonProbability by characteristics proportional to populations Ensures selection of adequate numbers of subjects with appropriate characteristics Not possible to prove that the sample is representative of designated population Snowball Subjects with desired traits or characteristics give Possible to include members of groups where no lists or No way of knowing whether the sample is representative of the 57
  • 58. names of further appropriate subjects Volunteer, accidental, convenience identifiable clusters even exist (e.g., drug abusers, criminals) population Either asking for volunteers, or the consequence of not all those selected finally participating, or a set of subjects who just happen to be available Inexpensive way of ensuring sufficient numbers of a study Can be highly unrepresentative Source: Black, T. R. (1999). Doing quantitative research in the social sciences: An integrated approach to research design, measurement, and statistics. Thousand Oaks, CA: SAGE Publications, Inc. (p. 118) In my research work I’ll be using Judgmental Sampling Technique 4.7.3 Probability Sampling A probability sampling scheme is one in which every unit in the population has a chance (greater than zero) of being selected in the sample, and this probability can be accurately determined. The combination of these traits makes it possible to produce unbiased estimates of population totals, by weighting sampled units according to their probability of selection. Probability sampling includes:     Simple Random Sampling Systematic Sampling Stratified Sampling Probability Proportional to Size Sampling  Cluster or Multistage Sampling 4.7.3 NON PROBABILITY SAMPLING Non probability sampling is any sampling method where some elements of the population have no chance of selection (these are sometimes referred to as 'out of coverage'/'undiscovered'), or where the probability of selection can't be accurately determined. It involves the selection of elements based on assumptions regarding the population of interest, which forms the criteria for selection. Hence, because the selection of elements is non-random, non probability sampling does not allow the estimation of sampling errors. These conditions give rise to exclusion bias, placing limits on how much information a sample can provide about the population. Information about the relationship between 58
  • 59. sample and population is limited, making it difficult to extrapolate from the sample to the population. No probability sampling methods includes:  Accidental sampling  Non-Probability sampling  Purposive sampling Source: http://en.wikipedia.org/wiki/Sampling_%28statistics%29 Comparing Probability-based and Non Probability Sampling The main differences between probability-based and Non Probability sampling are the following:  If probability-based sampling is properly carried out, there will be none of the bias which can arise from subjective judgments in sample selection. There is the possibility of such bias, however, in Non-Probability samples. For example, interviewers may consciously or unconsciously choose Non-threatening or easy-to-approach respondents, or those who are easy to contact.  As Deville says "... the Non-Probability method demands the formulation of a hypothetical model to fit the data. On the other hand, a probabilistic survey does not, in principle, depend upon any model.‖  The validity of the model underlying Non-Probability sampling may be open to question, and difficult to verify.  With probability sampling, we use the randomization distribution to draw conclusions from the sample, and to obtain sampling errors. In a Non-Probability sample, we cannot get comparable estimates of precision.  In general, non-response in a Non-Probability sample is handled by selection of another respondent fitting the quota. We can be more flexible in the way we handle non-response in a probability-based sample (although this means the use of some form of modeling).  In general, the costs of a Non-Probability sample will be lower than a probability-based sample of the same size. In this regard, it might be worth repeating the comment of Deming who wrote sternly, "There is no way to compare the cost of a probability sample with the cost of a judgment sample, because the two types of sample are used for different purposes. Cost has no meaning without a measure of quality, and there is no way to appraise objectively the quality of a judgment sample as there is with a probability sample." 59
  • 60. 4.8 Sampling Elements 4.8.1 Target Population: Target population includes, Software companies, Exporters, Colleges, Call Centre, Manufacturers, and other companies 4.8.2 Sample size A sample size of 50 will be taken. 4.8.3 Sampling Unit A unit in a statistical analysis refers to one member of a set of entities being studied. It is the material source for the mathematical abstraction of a "random variable". Common examples of a unit would be a single person, animal, plant, or manufactured item that belongs to a larger collection of such entities being studied. In my research work sample unit is the single organization/SME. 4.9 Limitations of My Research: Method of data collection was through personal interview and therefore biasing becomes a major limitation. The sample was restricted to 100 customers, which may restrict the scope of study. Owing to their pre occupation some customers were unable to answer the complete questionnaire. If the interviewer or the interviewee misunderstood the question, it may lead to the failure of the research Since I have used judgemental sampling technique and major limitation of this technique is that the Samples are not easily defensible as being representative of populations due to potential subjectivity of researcher. Budget Constraint. 60
  • 61. CHAPTER 5: DATA ANALYSIS AND INTERPRITATION 61
  • 62. 5.1 Characteristics of the Sample Data analysis is a body of methods that help to describe facts, detect patterns, develop explanations, and test hypotheses. It is used in all of the sciences. It is used in business, in administration, and in policy. The data obtained from a study may or may not be in numerical or quantitative form, that is, in the form of numbers. If they are not in numerical form, then we can still carry out qualitative analyses based on the experiences of the individual participants. If they are in numerical form, then we typically start by working out some descriptive statistics to summaries the pattern of findings. These descriptive statistics include measures of central tendency within a sample (e.g. mean) and measures of the spread of scores within a sample (e.g. range). The main source for data collection was through Questionnaire and Personal Interview. Interviews Interviews vary considerably in terms of their degree of structure. In general terms, unstructured interviews (e.g. non-directive or informal) lend themselves to qualitative analyses, whereas structured interviews lend themselves to quantitative analysis. As Coolican (1994) pointed out, there are various skills that interviewers need in order to obtain valuable data. These skills involve establishing a good understanding with the person being interviewed, adopting a nonjudgmental approach, and developing effective listening skills. There are various problems involved in interpreting interview information. First, there is the problem of social desirability bias. Most people want to present themselves in the best possible light, so they may provide socially desirable rather than honest answers to personal questions. This problem can be handled by the interviewer asking additional questions to establish the truth. Second, the data obtained from an interviewer may reveal more about the social interaction processes between the interviewer and the person being interviewed (the interviewee) than about the interviewee‘s thought processes and attitudes. Third, account needs to be taken of the self-fulfilling prophecy. This is the tendency for someone‘s expectations about another person to lead to the fulfillment of those expectations. Questionnaire 1. Questionnaire is relatively economical and inexpensive. It is possible to cover a large number of people scattered over a wide area. 2. This method saves time. Instead of meeting people personally it is possible to approach them in a larger number through the mailed questionnaire. Analysis and interpretation can be done quickly. 3. Questionnaire ensures anonymity. The respondent is free to express his views and opinions. 62
  • 63. 4. Questionnaire is said to be more suitable for eliciting information regarding some personal and private affairs such as sex habits, marital relations, etc., because of the anonymity that it maintains. 5. Questionnaire does not put much pressure on the respondent‘s emotionality. It provides sufficient leisure time to answer the questions in a relaxed mood. 6. In questionnaire, the collected answers can be processed and analysed in a simpler and a faster manner. Uniformity of answers helps the standardisation of the recording procedure. Disadvantages and Limitations: 1. Questionnaire method cannot be administered in the case of illiterate and uneducated persons. 2. Questionnaire is not suitable when a spontaneous answer is very much required. 3. There is no way of checking misinterpretations and unintelligible replies by the respondents. 4. Proportion of returns, especially of mailed questionnaire, can be very low, as low as 10%. This does not give a comprehensive picture of the situation. 5. In spite of their advantage questionnaires lack the flexibility of interviews. Generally, they have lower response rates, since it is easier for the respondents not to respond. They permit the measurement of verbal behaviour only, without allowing the researcher to make observations. Furthermore, mailed questionnaires enable the respondent to skip questions. 63
  • 64. Chapter 6: Findings and Interpretations 64
  • 65. 6.1 Major Findings. Find outs: 18 years and under – The adolescent segment Heavy SMS users (more than 8 mobile originated SMS/week) Aware of and have used mobile VAS Of both genders Unlikely to be restrained by monetary issues as their parents pay the bills Living with their parents Quite familiar with Internet technology Very mobile people, participating actively in sports and outdoor activities. 19-25 years – The student segment Heavy SMS users (more than 8 mobile originated SMS/week) Aware of and have used mobile VAS Male possibly restrained by monetary issues Student‟s Internet and information technology literate Very mobile people, participating actively in sports and outdoor activities. 25-36 years – The business segment Moderate SMS-users (1-7 mobile originated SMS/week) Aware and have used mobile VAS Male Not restrained by monetary issues Highly educated, working on the managerial level or as an expert Internet and information technology littermates Very mobile people, participating actively in sports and outdoor activities.         Those 18 and under and 19-25 are the really heavy users of SMS. The amount of SMS sent by these age groups exceeds 8 SMS/week. The 26-35 age groups does not use SMS so heavily, in fact only about half of the amount of those 25 and under, but still they form about 50% of the lead-segment. In terms of size the 26-35 age group forms a very appealing target group for mobile VAS. Monetary restraints are less visible for those 26-35 than those 19-25, who as students tend to often face monetary restraints. The 19-25 and 26-35 age groups are most likely to be male. With the 18 and under age group one‟s gender does not make a difference in interest of mobile VAS. All these segments are quite technically conscious, and thus utilizing the Internet, for instance, has become a daily routine. Comparing the general interest level in VAS and the type of the handset one carries shows that these segments are more likely to carry a newer handset than the rest of the market. The segments are rather mobile and the need for mobile VAS is thus increased. The background characteristics of these three segments appear somewhat similar. The major difference is the existence of females in the 18 and under age segment, whereas females are not present in the other lead-segments. Also, money has a significant effect. The most appealing lead-segments are the ones not paying their own phone bills. Whereas background characteristics to lead-segments are somewhat similar, the nature of service usage and the source of demand within lead-segments vary a lot. 65
  • 66. Chapter 7: Suggestion and conclusion 66
  • 67. 67
  • 68. REFERENCES i. http://www.moneycontrol.com ii. http://en.wikipedia.org/ iii. Black, T. R. (1999). Doing quantitative research in the social sciences: An integrated approach to research design, measurement, and statistics. Thousand Oaks, CA: SAGE Publications, Inc. (p. 118) iv. Encyclopaedia of Educational Technology, Types of Survey Questions, by Heather Waddington v. http://www.newagepublishers.com/samplechapter/000896.pdf vi. Edvantia SBR Rating for Technical Assistance Programs and Services form (2007) and Carter McNamara Overview of Methods to Collect Information handout (1998) Proceedings vii. 1990 Managing a non-profit organization, Prentice Hall, p. 133 viii. Malhotra, Naresha K. (2002), Basic Marketing Research: A Decision-Making Approach, Upper Saddle River, NJ: Prentice Hall ix. http://bbasicsllc.com/customer.satisfaction.article.htm x. ANZMAC 2003 Conference Adelaide 1-3 December 2003 xi. Aaker, D. A. (1991). Managing brand equity: Capitalizing on the value of a brand name. New York: Free Press. xii. Stobart, P. (1994). Brand power. London: MacMillan, p. 66 xiii. anzmac.info/conference/2003/papers/CON13_puram.pdf xiv. hh.diva-portal.org/smash/get/diva2:239882/FULLTEXT01(The Impact of Customer Relationship Marketing Tactics On Customer Loyalty) xv. http://www.aircel.in/ xvi. TRAI 68
  • 69. EXHIBITS a) Questionnaire 1: Age group? 2: Gender? 3: Occupation? 4: Connection type? 5: Awareness about Value added services? 6: Monthly expenditure on MVAS? 7: Preference of VAS Product? 8: Perception on customer? 69