RELIANCE COMMUNICATION’S STRATEGY AND ITS         IMPACT ON THE INDIAN MOBILE       TELECOMMUNICATIONS INDUSTRY        Stu...
AcknowledgementsThe witting of this dissertation has been one of the most significant academicchallenges I have ever had t...
DeclarationI, the undersigned, hereby declare that this dissertation entitled, “Reliancecommunications strategy and its im...
AbstractRecognising the crucial role that can be played by the telecommunications sector inIndia’s development, the Govern...
Table of ContentsACKNOWLEDGEMENTS ...........................................................................................
2.4 TACKLING THE PROBLEM PHASE ..............................................................................................
List of AbbreviationsBSNL – Bharat Sanchar Nigam LimitedBTS – Base Transceiver StationCDMA – Code Division Multiple Access...
TRAI – Telecommunication Regulatory Authority of IndiaVPN – Virtual Private NetworkWLL – Wireless in Local LoopReliance Co...
HypothesesThe strategic route taken by Reliance communication is the right way forward for theIndian telecommunications in...
1.0 IntroductionIn 1999 the Government of India recognised how the telecommunication sector couldplay a crucial role in In...
applications on Reliance Communications Mobile world. Reliance Communication hasushered in a mobile revolution by offering...
2.0 Literature ReviewDuring the search for literature following search engines have been used: Google.co.in,in.yahoo.com a...
Reliance Communications vision states:“We will leverage our strengths to execute complex global-scale projects to facilita...
to earn leadership for India in the knowledge age. Reliance Communications aimed tocreate new paradigms in enterprise, ent...
and 85% of the rail routes is compared by the company officials to the scale of effortinvolved in building virtually the e...
lakh (GBP £ 3,676) [and above]. Of that, half are in rural areas with similar purchasingpower. And this segment was expect...
in a short span of time. Occasionally Reliance Communications also discounts itsproducts to maximise sales, as it has a si...
“The pricing system is in line with Dhirubhai Ambani’s dream and directive of makingphone calls affordable for every India...
bottom. Thirdly, brand, thus ensuring mass production and further reduction in prices.Internal estimates say that the hand...
Communications. This offer led GSM handset prices to fall as low as Rs. 1,500 (GBP £22). In the footsteps of Reliance Comm...
Also, the customers were allowed to remain connected for a full year without having tobuy new recharge vouchers. Under the...
Secondly, the customers who were hoping that Reliance Communications would bringprices substantially down, as in the past,...
Industries offices and utilised the capital and personnel resources to the extent possible.Reliance Engineering Associates...
Telecom helped Reliance Communications in gaining a foothold in the North Easternmarket, where it did not possess telecomm...
After a steady growth throughout the 1990s, the United States telecom industry saw adecline for the first time in ten year...
Reliance Communications also exploited loopholes in the Indian telecommunicationspolicy to cut costs. This problematic epi...
2.3 Sales and Marketing StrategyReliance Communications radically refined marketing models in India and engagedhomes and e...
usage worth of Rs. 100 (GBP £ 1.50) per connection for twelve months, in addition tothe Rs. 850 (GBP £ 12.5) per connectio...
addition to contributing to society by encouraging other enterprises and creatingeconomic opportunities for millions of yo...
going – to grocery stores, gas stations, music stores, departmental stores, street sidevendors, bookshops and even hotels ...
helped to educate people on the importance of the telecommunication services. Thenext set of campaigns talked about the in...
For marketing promotions Reliance Communications again used unconventionalstrategies. The mobile service was promoted aggr...
into products as Reliance Communications provided the infrastructure, unlimited accessto comprehensive technical documenta...
by NCDEX and Reliance Communications in providing a convenient way to accesscommodity prices,” said Mr Narendra Gupta, Chi...
2.3.6 Customer Service – Icing on the Marketing CakeReliance Communications followed up the product innovation and marketi...
Reliance Communications was much criticised for circumventing many of the existingtelecommunication policies in a ruthless...
response gave rise to logistics, billing and collection problems” said by the formerChairman, Mukesh Ambani, at the Relian...
the front runners in the Indian telecommunication industry. The marketing channelproblems have been tackled and the compan...
and communications in the hands of all people at an affordable cost. He continues tobelieve that this will help empower th...
3.0 Methodology3.1 Research MethodsThis research is based on primary and secondary data. Self Administered delivery andcol...
have a great clarity and understanding of the work being done, as well as validating theareas that researcher had chosen t...
3.3 Limitations to the researchThe potential problems that might have occurred with the primary research would havebeen th...
other   players   which   were   involved   in   the   transformation   phase    of   Indiantelecommunications industry.Re...
4.0 Results and FindingsAfter carrying out the survey for both the Reliance Mobile users and Non-RelianceMobile users the ...
In question two, respondents were asked how they heard about the Reliance Mobileservices so around fifty percent of replie...
In question four, respondents were asked in what way do think that Reliance mobileservices are better than its competitors...
In question six, respondents were asked according to them which telecom company inIndia is the biggest competitor of Relia...
around five percent were not sure. So here also we can see majority of the respondentsare satisfied with the Reliance Mobi...
else and around seven percent of respondents said the mobile phone service they useis provided by their parents. In this q...
5.0 ConclusionsReliance Communications stimulated telecommunication growth in India by challengingmany of the conventional...
Secondly, an enterprise Net-way revolution will bring the possibility to providebroadband experience to every desktop and ...
6.0 RecommendationsAfter carrying out the research on role of “Reliance Communications strategy and itsimpact on the India...
Reliance Communications should adapt to following mobile features so the companycreates an edge over its competitors:Relia...
ReferencesAshiwal, S. (2004). Reliance Infocomm unveils plans for prepaid service. Available:http://www.hindu.com/2004/02/...
N/A. (1999 - 2009). Milestones. Available:http://www.rcom.co.in/Rcom/aboutus/overview/overview_milestones.html. Last acces...
N/A. (2004). Reliance Infocomm storms prepaid market, announces path breaking schemes.Available: http://www.rcom.co.in/rco...
N/A. (2003). Reliance Signs Amalgamation Agreement To Acquire Flag Telecom Group Limited.Available: http://www.rcom.co.in/...
AppendicesAppendix – 1 – Questionnaire results:Sample age group:Reliance Mobile user category:Q – 1 How many years have yo...
Q – 2 How did you hear about Reliance Mobile Services?Q – 3 What was the main reason for you to choose Reliance Mobileserv...
Q – 4 In what aspects do you think that Reliance Mobile Services are betterthan its competitors?Q – 5 Do you think that Re...
Q – 6 From the following telecom companies which one do you reckon isthe biggest competitor of Reliance communications?Q –...
Q – 8 And finally, are you satisfied with Reliance Mobile services?Non-Reliance Mobile user category:Q – 1 Do you own/use ...
Q – 2 What mobile network do you use?Q – 3 Why have you choosen the above mobile service provider incomparision to Relianc...
Q – 4 Would you likely to switch to Relinace Mobile services if the offersand/or better are provided to you for lower cost...
Appendix – 2 –Fifth largest telecom operator in the world:                               (Source: Reliance Investor Presen...
Appendix – 4 – QuestionnairesAppendix – 4.1 Reliance Mobile User Category Questionnaire:Q – 1 How many Years have you used...
Offers and Bundles (         )Brand image of parent company (          )Q – 4 In what aspects do you think that Reliance M...
Q – 7 Do you reckon the strategies which were used by Reliance Communicationscompetitors are the reasons for the loss of m...
Q – 3 Why have you choosen the above mobile service provider in comparision toReliance Mobile services?Better service     ...
Appendix – 5: Subscriber numbers (millions) by service provider Service     June 2003    Sep 2003   Dec 2003        Mar 20...
Appendix – 6: Strategy Competitive AdvantageCompetitive Advantage - DefinitionA competitive advantage is an advantage over...
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Reliance communications dissertation

  1. 1. RELIANCE COMMUNICATION’S STRATEGY AND ITS IMPACT ON THE INDIAN MOBILE TELECOMMUNICATIONS INDUSTRY Student Name: Ankit Yadav – 297986 Course: BA (Hons) Business Administration Top –UpNorthbrook College Sussex – West Durrington Campus Year of Submission: 2009 - 2010 Dissertation Supervisor: David Broughton
  2. 2. AcknowledgementsThe witting of this dissertation has been one of the most significant academicchallenges I have ever had to face. Without the support, patience and guidance of thefollowing people, this study would not have been completed. It is to them that I owe mydeepest gratitude. • Lecturer David Broughton who undertook to act as my supervisor despite his many other academic and professional commitments. His wisdom, knowledge and commitment to the highest standards inspired and motivated me. • My parents, who have always supported, encouraged and believed in me, in all of my endeavours.Reliance Communications Page 2 of 71 Ankit Yadav - 297986
  3. 3. DeclarationI, the undersigned, hereby declare that this dissertation entitled, “Reliancecommunications strategy and its impact on the Indian mobile telecommunicationsindustry” is my own work, and that all the sources I have used or quoted have beenindicated or acknowledged by means of completed references. Ankit Yadav Date of SubmissionWord Count: 12,024 (Twelve Thousand and Twenty Four).Reliance Communications Page 3 of 71 Ankit Yadav - 297986
  4. 4. AbstractRecognising the crucial role that can be played by the telecommunications sector inIndia’s development, the Government of India in 1999 initiated a number of changes inthe telecommunication and regulatory and policy framework. Through these theGovernment of India hoped to facilitate an increase in telecommunication penetration,which stood at 1.3 percent in 1995. The reforms, with an eye on a telecommunicationpenetration of fifteen percent by 2010, resulted in a flurry of private operators enteringthe market breaking the monopoly of the incumbent operator Bharat Sanchar NigamLimited (BSNL). Reliance Communications was born in the year 2000 as a child of themarket liberalisation process with a vision to provide the latest telecommunicationfacilities to every Indian at the price of a post card. Reliance Communications helpedthe mobile phone penetration in India to grow from 0.25 percent in early 2001 to 40.31percent in January 20101.The first part of this dissertation will introduce the scale and complexity involved inshaping the Reliance Communications vision in reality. The second part will examinethe cost strategies adopted by the Reliance Communication, while the third partexamines the creative ways in which the process of marketing value added to theprocess.1 TRAI (2010). The Indian Telecom Services Performance Indicators.Reliance Communications Page 4 of 71 Ankit Yadav - 297986
  5. 5. Table of ContentsACKNOWLEDGEMENTS .......................................................................................................................................... 2DECLARATION ........................................................................................................................................................ 3ABSTRACT .............................................................................................................................................................. 4LIST OF ABBREVIATIONS ........................................................................................................................................ 7HYPOTHESES .......................................................................................................................................................... 9AIMS AND OBJECTIVES .......................................................................................................................................... 91.0 INTRODUCTION .............................................................................................................................................. 102.0 LITERATURE REVIEW ...................................................................................................................................... 12 2.1 THE VISION, SCALE AND COMPLEXITY .............................................................................................................12 2.2 PRICING STRATEGY ..........................................................................................................................................15 2.2.1 Dhirubhai Ambani Pioneer Offer – Democratising Mobiles..............................................................17 2.2.2 Monsoon Hungama Scheme – Showers of Mobiles .........................................................................19 2.2.3 Pre-paid Offering – Market Consolidation ..........................................................................................20 2.2.4 Cost Management – The Inside Picture .............................................................................................22 2.3 SALES AND MARKETING STRATEGY .................................................................................................................27 2.3.1 Customer Generation – Tapping in to Internal Resources ...............................................................27 2.3.2 Dhirubhai Ambani Entrepreneurship Programme – A New Way to Market ...................................28 2.3.3 Advertising – Educating Masses and Evoking Passions ..................................................................30 2.3.4 RWorld – Reliance Way of Putting the World in Your Hands ..........................................................32 2.3.5 Product Innovations – Connecting with Every Section of Society .................................................. 33 2.3.6 Customer Service – Icing on the Marketing Cake .............................................................................35Reliance Communications Page 5 of 71 Ankit Yadav - 297986
  6. 6. 2.4 TACKLING THE PROBLEM PHASE .....................................................................................................................353.0 METHODOLOGY ............................................................................................................................................. 40 3.1 RESEARCH METHODS.......................................................................................................................................40 3.2 DATA COLLECTION TECHNIQUES .....................................................................................................................41 3.3 LIMITATIONS TO THE RESEARCH .......................................................................................................................424.0 RESULTS AND FINDINGS ................................................................................................................................. 445.0 CONCLUSIONS ................................................................................................................................................ 506.0 RECOMMENDATIONS ..................................................................................................................................... 52REFERENCES......................................................................................................................................................... 54APPENDICES......................................................................................................................................................... 58 APPENDIX – 1 – QUESTIONNAIRE RESULTS: ..........................................................................................................58 APPENDIX – 2 –FIFTH LARGEST TELECOM OPERATOR IN THE WORLD:..................................................................65 APPENDIX – 3 –TARGETS THE LARGEST UNTAPPED POPULATION IN THE WORLD: ................................................65 APPENDIX – 4 – QUESTIONNAIRES .........................................................................................................................66 Appendix – 4.1 Reliance Mobile User Category Questionnaire: ...............................................................66 Appendix – 4.2 – Non-Reliance Mobile User Category Questionnaire: ...................................................68 APPENDIX – 5: SUBSCRIBER NUMBERS (MILLIONS) BY SERVICE PROVIDER ..........................................................70 APPENDIX – 6: STRATEGY COMPETITIVE ADVANTAGE ..........................................................................................71Reliance Communications Page 6 of 71 Ankit Yadav - 297986
  7. 7. List of AbbreviationsBSNL – Bharat Sanchar Nigam LimitedBTS – Base Transceiver StationCDMA – Code Division Multiple AccessCOAI – Cellular Operators Association of IndiaCPP – Calling Party PaysDOT – Department of Telecommunications IndiaGIS – Global Information SystemsGSM – Global Subscriber MobileIDC – Internet Data CentreIPLC – International Private Leased CircuitISV – Independent Software VendorsNCDEX – National Commodity Derivatives and Exchange LimitedPOS – Point of SaleRIM – Reliance India MobileSMS – Short Messaging ServiceReliance Communications Page 7 of 71 Ankit Yadav - 297986
  8. 8. TRAI – Telecommunication Regulatory Authority of IndiaVPN – Virtual Private NetworkWLL – Wireless in Local LoopReliance Communications Page 8 of 71 Ankit Yadav - 297986
  9. 9. HypothesesThe strategic route taken by Reliance communication is the right way forward for theIndian telecommunications industry.Aims and ObjectivesThe main aim of this dissertation is to look critically if the unlimited and in houseresources available to Reliance Communication are the factors for the huge success orReliance Communications; and also if in any way Reliance Communications have usedits power as a business conglomerate against its competitors unlawfully.Core objectives of this dissertation are to: investigate Reliance Communications role in the transformation of the Indian telecommunications industry; investigate what were the challenges and complexities which Reliance Communication faced during the transformation process; investigate how Reliance Communication tackled the problem phase; investigate who are Reliance Communications main competitors and what strategies and processes are used by its competitors to gain the market share; and investigate how Reliance Communications could have used different strategies.Reliance Communications Page 9 of 71 Ankit Yadav - 297986
  10. 10. 1.0 IntroductionIn 1999 the Government of India recognised how the telecommunication sector couldplay a crucial role in India’s development and then initiated number of changes in themobile telecommunication regulatory and policy framework. By initiating these changesthe Indian Government hoped to facilitate an increase in telecommunication penetration;this resulted in a flurry of private operators entering the market breaking the monopolyof the incumbent state owned operator Bharat Sanchar Nigam Limited (BSNL).The foundation of Reliance communications (RCOM)2 was laid in 1999, with a vision to“provide the latest telecommunications facilities to every Indian at a price of a postcard”. With over 86 million subscribers across India, Reliance communications is India’ssecond largest mobile service brand. Reliance Communications now cover over 2,400towns, 600,000 villages, and still counting. Reliance Communication has achieved manymilestones in this short journey. In 2003, AC Nielsen voted Reliance Communicationsas India’s most trusted brand. In July 2003, Reliance Communications created a worldrecord by adding one million subscribers in a matter of just ten days through its‘Monsoon Hungama’ offer3.What sets Reliance Communications apart from its competitors is the fact that nearlyninety percent of their handsets are data-enabled, and can access hundreds of Java2 Bombay Stock Exchange – Script – RCOM.3 Reliance Communications. (2010). Overview – Businesses – Mobile.Reliance Communications Page 10 of 71 Ankit Yadav - 297986
  11. 11. applications on Reliance Communications Mobile world. Reliance Communication hasushered in a mobile revolution by offering advanced multimedia handsets to the‘common man’ of India at very reasonable prices. This innovative low pricing hasincreased the number of mobile phone users and its result is clearly reflected in themeteoric rise in India’s tele-density over the past eight years. Reliance Communicationspan-India wireless network runs on CDMA2000 1 x technology, which has superiorvoice and data capabilities compared to other cellular mobile technologies. CDMA20001 x is more cost effective as it utilises the scare radio spectrum more efficiently thanother technologies do. Enhanced voice clarity, superior data speed of up to 144 kbpsand seamless migration of newer generations of mobile technologies are some ofReliance Communications differentiators4.The main purpose of this dissertation is to study and discuss the main strategiesadopted by Reliance Communication to usher in the telecommunication revolution inIndia. Specifically this dissertation will examine the new paradigms in cost competenceand marketing which helped Reliance Communication to drive down costs and drive upvolumes.4 Reliance Communications. (2010). Overview – Businesses – Mobile.Reliance Communications Page 11 of 71 Ankit Yadav - 297986
  12. 12. 2.0 Literature ReviewDuring the search for literature following search engines have been used: Google.co.in,in.yahoo.com and Rediff.com have been used and in addition these Google Scholar,Gale Power Search, market line and Emerald Insight were used as well. Initial searchesfocused around ‘Reliance communication’s strategies’, ‘Reliance communication’sprofile’ and ‘Reliance communication’s competitors’.2.1 The Vision, Scale and ComplexityTo succeed in the long term, businesses need a vision of how they will change andimprove in the future. The vision of the business gives it energy. It helps in motivatingemployees. It helps set the direction of corporate and marketing strategy5. Following arethe six requirements for success: - provide future direction; - expresses a consumer benefit; - is realistic; - is motivating; - must be fully communicated; - consistently followed and measured.5 N/A (2010). “Strategic planning – values and vision.”Reliance Communications Page 12 of 71 Ankit Yadav - 297986
  13. 13. Reliance Communications vision states:“We will leverage our strengths to execute complex global-scale projects to facilitateleading-edge information and communication services affordable to all individualconsumers and businesses in India.We will offer unparalleled value to create customer delight and enhance businessproductivity. We will also generate value for our capabilities beyond Indian borders andenable millions of Indias knowledge workers to deliver their services globally.”6The founder of Reliance Group of Companies – late Dhirubhai Ambani dreamt of digitalIndia – an India where the common man would have access to affordable means ofinformation and communication. Dhirubhai, who single-handedly built India’s largestprivate sector company virtually from scratch, had stated as early as 1999: “Make thetools of information and communications available to people at an affordable cost. Theywill overcome the handicaps of illiteracy and lack of mobility.”7Reliance Communications was launched as a very ambitious project. The project wasconceived at the convergence of communication and information technology. It wasdesigned to connect every home and office in India with each other and the worldthrough an overarching terabit optic fibre digital distribution system. It was developed toprovide a range of services to every citizen, company and community. It was envisaged6 N/A. (2010). “Overview - Vision.”7 N/A. (2010). “About Sh. Dhirubhai Ambani”.Reliance Communications Page 13 of 71 Ankit Yadav - 297986
  14. 14. to earn leadership for India in the knowledge age. Reliance Communications aimed tocreate new paradigms in enterprise, entrepreneurship and engagement8.To achieve all of these objectives Reliance Communications rolled out a complexarchitecture of domains, functions, facilities, coverage and services, through the latesttechnology aiming to add value through messaging, facilitating business transactions,videoconferencing, music and movie download services. According to a comparisoncited by Mukesh Ambani, former Chairman of Reliance Communications, the UnitedStates has only about 100 out of 700 cities with the CDMA2000 1 X technology thatprovides the benefit of mobile voice, data and video, while Reliance Communications in2008 stated providing these services to 100% of Indian cities.According to Anil Ambani, current Chairman of Reliance Communications, company hasbuilt the largest infrastructure in the information and technology sector by any newentrant. To begin with, Reliance Communications has networked 673 towns and cities.Currently it has presence in 1,850 towns and cities and 75,000 villages touching about550 million Indians. At the end of 2008, the company successfully connected all640,000 villages and 5,161 odd towns and cities to each other and to the world in aseamless way. This gigantic effort involving more than 8,500 BTS (Base TransceiverStations) towers covering about ninety one percent of the country’s national highways8 N/A. (2010). “About Sh. Dhirubhai Ambani”.Reliance Communications Page 14 of 71 Ankit Yadav - 297986
  15. 15. and 85% of the rail routes is compared by the company officials to the scale of effortinvolved in building virtually the entire railway system in India9.2.2 Pricing Strategy“My vision is to provide the latest telecommunication facilities to every Indian at theprice of a post card” – Late Dhirubhai Ambani, founder Reliance group. “A monthlyspend of Rs 25010 (GBP £ 3.67) would usher in a telecom revolution in India. At thatrate, the telecom market will be around 600 million lines,” said by B D Khurana, grouppresident, Reliance Communications11.Reliance Communications challenged old cost structures in the telecommunicationsindustry. Historically, telecommunications services have been the privilege of a smallsection of society. Reliance Communications broke this mould with a tariff that can bedescribed as the most ambitious ever listed by a telecom company in India12. It aimedfor prices as low as the cheapest alternative – the post card. While other companiesaimed for higher value market, Reliance Communications realised that there is a marketin driving volumes aimed at creating a completely new market. “According to estimatesthere are around 320 million [people in] households with an annual income of Rs 2.59 N/A. (1999 – 2009). “Milestones”.10 1 GBP £ = Rs.68.00 INR.11 Jagannathan, V. (2003). “Affordability is what hinders telecom revolution, finds seminar”.12 Ganpati, P. (2002). “Reliance set to revolutionise mobile services”.Reliance Communications Page 15 of 71 Ankit Yadav - 297986
  16. 16. lakh (GBP £ 3,676) [and above]. Of that, half are in rural areas with similar purchasingpower. And this segment was expected grow to 478 million by 2007 and 602 million by2010” commented by B D Khurana, group president, Reliance Communications, hintingabout the market that Reliance Communications aimed to capture13.Following on from his work analysing the competitive forces in an industry, MichaelPorter suggested four “generic” business strategies that could be adopted in order togain competitive advantage14. The four strategies are summarised in (appendix six)In case of Reliance Communications cost leadership strategy has been implemented asin this strategy, the objective is to become the lowest-cost producer in the industry.Many (perhaps all) market segments in the industry are supplied with the emphasisplaced minimising costs. If the achieved selling price can at least equal (or near) theaverage for the market, then the lowest-cost producer will (in theory) enjoys the bestprofits. As this strategy is usually associated with the large scale businesses offering“standard” products with relatively little differentiation that are perfectly acceptable to themajority of customers15.This strategy has worked very well for the Reliance Communications to gain the marketshare very quickly and gain a strong foothold in the Indian telecommunications market13 Jagannathan, V. (2003). “Affordability is what hinders telecom revolution, finds seminar”.14 N/A. (2010). “Strategy – Competitive Advantage.”15 N/A. (2010). “Strategy – Competitive Advantage.”Reliance Communications Page 16 of 71 Ankit Yadav - 297986
  17. 17. in a short span of time. Occasionally Reliance Communications also discounts itsproducts to maximise sales, as it has a significant cost advantage over the competitionand, in doing so, Reliance Communications can further increase its market share.2.2.1 Dhirubhai Ambani Pioneer Offer – Democratising MobilesAnnouncing its launch of mobile services in December 2002 Reliance Communicationsoffered an introductory scheme called the ‘Dhirubhai Ambani Pioneer’ offer. Under thisscheme consumers were given a free digital mobile phone, unlimited free incomingphone calls, billing at fifteen-seconds pulse rate, for a one-time fee of Rs 3,000 (GBP £44) as a membership charge and Rs 600 (GBP £ 9) per month (paid in advance) astelephony charges. All incoming calls were offered free and outgoing calls were chargedat 10 paisa (0.2 GBP £ pence) for fifteen seconds. The cost of a national long-distancecall to any Reliance phone in India was forty paisa (0.8 GBP £ pence) for a minute16. Inaddition, the monthly charge included 400 minutes of outgoing calls. Only calls over andabove this were charged extra. Value added services like voice mail, call waiting, callhold, call divert, call identification, call conferencing, dynamic locking and textmessaging were offered free. Internet access through the phones was also offered freeinitially17.16 N/A. (2002). “Reliance Infocomm heralds a new way of digital life for India”.17 Ganpati, P. (2002). “Reliance set to revolutionise mobile services”.Reliance Communications Page 17 of 71 Ankit Yadav - 297986
  18. 18. “The pricing system is in line with Dhirubhai Ambani’s dream and directive of makingphone calls affordable for every Indian. It has been made possible due to the significantcapital productivity achieved,” – said by Mukesh Ambani, former Chairman, RelianceCommunications18.The Dhiubhai Ambani offer unlocked the demand for telecommunication services inIndia by challenging many accepted practices. The biggest entry barrier till that pointwas the handset prices. The mobile handsets in the Indian market were priced at Rs.7,500 (GBP £ 110) upwards, which made them unaffordable for most Indians. Handsetswere to be purchased separately since the operators until then offered only services,and never dealt with handsets. For a customer this meant to deal with two suppliers –one for services and another for handset. Reliance Communications, for the first time inIndia, offered handsets free of charge, along with the service19.Reliance Communications managed this free handset offer in three ways. Firstly,Dhirubhai Ambani offer had a built-in contract of three years for every customer. Thisguaranteed cash flows and minimised churn allowing them to discount the cost of thephone. Secondly, Reliance Communications entered into exclusive agreements withhandset vendors like LG and Samsung. For a guaranteed purchase of hugs volumes(between one million and eight million phones) the prices were negotiated down to rock18 N/A. (2002). “Reliance Infocomm heralds a new way of digital life for India”.19 N/A. (2002). “Reliance Infocomm ushers a digital revolution in India”.Reliance Communications Page 18 of 71 Ankit Yadav - 297986
  19. 19. bottom. Thirdly, brand, thus ensuring mass production and further reduction in prices.Internal estimates say that the handset model which was available on the open marketat a price of Rs. 10,500 (GBP £ 155) was procured at a price of Rs. 800 (GBP £ 11.75)by Reliance Communications.2.2.2 Monsoon Hungama Scheme – Showers of MobilesIn an attempt to further democratise telecommunications services, RelianceCommunications followed up the Dhirubhai Ambani Pioneer offer with the MonsoonHungama Scheme on the 1st of July 2003. This unprecedented scheme allowedcustomers to get a mobile phone for an upfront payment of just Rs. 501 (GBP £ 7.50),bringing down the entry barrier to a bare minimum. This scheme also permitted a lowmonthly spend, allowing the customers to restrict the fixed monthly outgoing (post-paid)to Rs. 449 (GBP £ 6.60), inclusive of the Rs. 200 (GBP £ 2.95) paid as clubmembership and privilege charges20.Reliance Communications Monsoon Hungama offer of a phone for Rs. 501 (GBP £ 7,50) was a runaway success. Monsoon Hungama Scheme pushed RelianceCommunications to the top of the telecom market in terms of the subscribers. It was thebiggest promotional success in the history of mobile telephony in India. One millionsubscribers joined Reliance Communications in just ten days after the launch of theMonsoon Hungama Scheme. The ripples of the offer were not limited to Reliance20 N/A. (2003). “Reliance Infocomm makes mobile telephony more affordable”.Reliance Communications Page 19 of 71 Ankit Yadav - 297986
  20. 20. Communications. This offer led GSM handset prices to fall as low as Rs. 1,500 (GBP £22). In the footsteps of Reliance Communications, during the same period, manycompetitors started offering flexible pre-paid options at less than Rs. 500 (GBP £ 7.35)per month for their GSM mobile services21.2.2.3 Pre-paid Offering – Market ConsolidationAs the market of post-paid mobile services started stabilising, RelianceCommunications launched its first pre-paid offer. The pre-paid offer marked afundamental shift in Reliance Communications strategy where it had built a post-paidcustomer base of over six million through the pioneer and Hungama schemes. At a timewhen Reliance Communications was finding it hard to manage its post-paid customers,the new strategy offered two advantages. First, there was the obvious advantage thatcash is collected beforehand. Second, the cost of collecting bills – which is one to threepercent of revenue – vanished22.In February 2004, Reliance Communications announced another set of pre-paidschemes, quite different from the earlier schemes. The schemes gave customers freerecharge vouchers worth nearly the cost of a Reliance India Mobile (RIM) pre-paidhandset that they buy. In simple terms it meant that customers were getting the phonefree rather than having to buy it as they would if they opted for a GSM pre-paid scheme.21 Gupta. D, S. (2004). “Reliance makes a cash call”.22 Gupta. D, S. (2004). “Reliance makes a cash call”.Reliance Communications Page 20 of 71 Ankit Yadav - 297986
  21. 21. Also, the customers were allowed to remain connected for a full year without having tobuy new recharge vouchers. Under the pre-paid launch scheme, a customer had to payRs. 3,500 (GBP £ 51.50) for a Motorola C131 handset and received free RelianceCommunications pre-paid connection and recharge vouchers worth Rs. 3,240 (GBP £47) valid for six months and with additional grace period of six months. In this scheme,all local calls, intra-circle calls and inter-circle calls of less than 50 km to another mobilephone had a flat rate of Rs. 2.49 (GBP £ 0.036) per minute. All inter-circle calls of above50 km to another mobile phone had a flat rate of Rs. 2.99 (GBP £ 0.043) per minute. Alllocal calls, intra-circle calls and inter-circle calls of less than 200 km to a fixed phonehad a flat rate of Rs. 2.99 (GBP £ 0.043) per minute and all inter-circle calls of above200 km had a flat rate of Rs. 3.99 (GBP £ 0.058) per minute. International calls werebilled at Rs. 16.99 (GBP £ 0.25) per minute23.Other features of Reliance Communications pre-paid connection included automaticroaming in the pan-India Reliance Communications network at no extra charge, anationwide recharge facility with any available denomination (stating from Rs. 165 orGBP £ 2.45), a national long distance and international long distance facility, and callforwarding and voice messaging services at local mobile call rates from anywhere in theReliance Communications network. This scheme was different from the earlier schemesin two ways. Firstly, though the handset came virtually free of charge, the entry barrierwas definitely higher since the customer committed to a higher volume of calls.23 Ashiwal, S. (2004). “Reliance Infocomm unveils plans for prepaid service”.Reliance Communications Page 21 of 71 Ankit Yadav - 297986
  22. 22. Secondly, the customers who were hoping that Reliance Communications would bringprices substantially down, as in the past, were disappointed. Airtime tariffs (the price ofcalls per minute) of this scheme (discussed above) were almost the same as thoseoffered by the GSM operators24.It is interesting to note the subscriber figures (in millions) provided by the TelecomRegulatory Authority of India during the same time period please refer to appendix five.2.2.4 Cost Management – The Inside PictureThe Reliance Communications pricing system was always in the line with DhirubhaiAmbani’s dream and directive of making phone calls affordable for every Indian, andhas been possible due to the meticulous planning, ‘out of the box’ thinking in touch withreality, and significant capital productivity achieved on the strength of RelianceCommunications track record in project management25.Reliance Industries, the parent company of Reliance Communications, is the largestprivate sector corporation in India with stakes in Petroleum, Petrochemicals,Engineering, and Finance. This scale of operations provided great leverage as thecompany ventured into telecommunications. Reliance Communications, in the initialstages, shared all Reliance Industries resources to ensure cost effectiveness in everyservice that it provided. Reliance Communications operated out of existing Reliance24 N/A. (2004). “Reliance Infocomm storms prepaid market, announces path breaking schemes”.25 N/A. (2002). “Reliance Infocomm heralds a new way of digital life for India”.Reliance Communications Page 22 of 71 Ankit Yadav - 297986
  23. 23. Industries offices and utilised the capital and personnel resources to the extent possible.Reliance Engineering Associates Ltd, as associate company, made sure that theengineering and manpower costs were maintained at bare minimum. According to B DKhurana, the Group President of Reliance Communications “... in developed countrieshuman resource costs account for twenty two percent of a telecommunicationcompany’s operating costs as against five percent in India...But we utilise all of ourinternal resources in large numbers which further reduces the cost”. In addition RelianceCommunications centralised most of its operations. Citing Reliance Communicationsstrategy, B D Khurana said: “80 percent of our administration and operation iscentralised. Compared to the best telecom networks in the world we have deployed onlyhalf the number of people per 1,000 lines making our human resources the highestproductive resource.” Reliance Communications also exploited the extensive distributionchannels which were set up by its parent company, Reliance Industries for promotingand distributing its mobile services.A group company, Reliance Telecom Ltd, which uses the GSM technology to provideservices to seven telecom circles across eleven North Eastern states of India, helpedReliance Communications in learning and managing cost structures during the initialstages. Reliance Telecom and Reliance Communications synergy helped in theoptimum utilisation of their networks in two ways. Firstly, Reliance Communicationsnetwork started routing all the calls originating from Reliance Telecom, whichguaranteed traffic and revenues from day one and, secondly, the network of RelianceReliance Communications Page 23 of 71 Ankit Yadav - 297986
  24. 24. Telecom helped Reliance Communications in gaining a foothold in the North Easternmarket, where it did not possess telecommunications licences.Provision of multiple services is another strategy which Reliance Communications usedto manage costs. When most of the other mobile operators focused exclusively on theprovision of mobile services, Reliance Communications, in a phased manner, startedoffering all the services which could utilise their network and other resources optimally.Apart from the basic mobile services, Reliance Communications currently offerslandline, broadband Internet, leased line, VPN (Virtual Private Network), IPLC(International Private Leased Circuit), Centrex and IDC (Internet Data Centre) services,thus achieving lower costs per service and more revenues.Another factor that worked in the favour of Reliance Communications was the state ofthe world economy. During the period of Reliance Communications start up, in years2000 to 2002, the world economy experienced a time of turmoil. There was a deepeningand reinforcing of the global economic slowdown that had begun to set in from the endof year 2000. According to the IMF estimates, world output recorded a mere 2.4 percentgrowth during year 2001, compared to 4.7 percent during year 2000. The growth inworld trade volume also declined sharply to about one percent during year 2001, asagainst 12.4 percent in year 2000. The global slowdown was accentuated further by theterrorist attacks in the United States on September 11, 2001. These ripples werereflected in the telecommunication industry26.26 N/A. (2001 – 2002). “Economic Survey – International Economic Enviroment”.Reliance Communications Page 24 of 71 Ankit Yadav - 297986
  25. 25. After a steady growth throughout the 1990s, the United States telecom industry saw adecline for the first time in ten years in 2001. US imports of telecom equipment recordeda decline of nine percent, and a decline of seven percent in year 2001 as against year2000. But in the case of Reliance Communications these negative events had a positiveimpact. The world economic and telecommunication meltdown helped RelianceCommunications to negotiate better prices for equipment. Since RelianceCommunications placed huge orders they were in an advantageous position tocommand lower prices from nearly all vendors who were trying to push out equipmentfrom their warehouses. According to internal rumours, Reliance Communicationsprocured discounts of up to 90 percent on the market prices from vendors like Lucentand Nortel.Since the global meltdown ensured rock bottom property prices across India, RelianceCommunications was able to own, lease and rent property required for the offices,showrooms and equipment installation at minimum cost. Added to this careful planningensured that the structures including the telecommunication towers were made anderected for a minimum cost. The fibre optic cables were procured from RelianceIndustries own factories resulting in further cost reduction. According to the formerChairman, Mukesh Ambani, Reliance Communications “...capital costs per subscriberwere about 50 to 70 percent lower than those of all new global telecommunicationsdeployments in recent times”.Reliance Communications Page 25 of 71 Ankit Yadav - 297986
  26. 26. Reliance Communications also exploited loopholes in the Indian telecommunicationspolicy to cut costs. This problematic episode is discussed further in section 2.4. TheGSM licenses were offered for the four metropolitan cities and eighteen circles after atendering and bidding process. These licenses were procured by various mobileoperators from the period year 1995-97 for a license fee as hefty as GBP £ 4 billion.The new telecom policy in year 1999 reduced this license fee significantly, incorporatinga revenue sharing arrangement. In January 2001, a policy was announced for additionallicenses in Basic and Mobile services. The entry fee for the basic services was fixed atGBP £ 0.1 million to GBP £ 14.5 million, while for the fourth mobile operator (since inmost circles there were three operators already) it was fixed at GBP £ 0.1 million toGBP £ 22.5 million, depending on the area of service provision. According to this policy,WLL service was considered a by-product of basic service and could be provided by abasic telecom operator at no extra license fee. As Reliance Communications studied thebalance sheets of the existing mobile operators they found that the actual revenuerealisations were far short of projections, leading to mobile operators being unable toarrange finance for their projects and complete rollouts. This created a vicious circle ofhigh subscription charges and low penetration for mobile operators. RelianceCommunications ensured this cost would be minimised. All these measures ensuredthat the capital and operating expenditures of Reliance Communications wereminimised as compared to its competitors, helping it offer services at cheaper prices.Reliance Communications Page 26 of 71 Ankit Yadav - 297986
  27. 27. 2.3 Sales and Marketing StrategyReliance Communications radically refined marketing models in India and engagedhomes and enterprises directly by having the ability to deliver physical and virtualproducts and services as part of one system. Reliance Communications through itsaggressive, unconventional tactics changed the rules of the mobile marketing game inIndia.2.3.1 Customer Generation – Tapping in to Internal ResourcesReliance Communications targeted internally as it looked for the first set of itscustomers. Officials of Reliance Communications realised that an employee base ofmore than 50,000 and a shareholder base of about 3.3 million was the best place tostart as far as customers were concerned. Every employee was offered ten connectionsat a discounted rate. While the normal monthly charges would be Rs. 600 (GBP £ 8.85),for the employees they were offered at Rs. 500 (GBP £ 7.35). Many employees boughtconnections for their relatives and friends. During the annual general meeting theReliance Communications, former, Chairman Mukesh Ambani offered shareholders adiscount package. The company offered a Rs. 850 (GBP £ 12.5) discount on initialpayments on subscription per connection. In addition, the shareholders were offeredfree usage worth Rs. 100 (GBP £ 1.50) for six months. This amounted to a totaldiscount of Rs. 1,450 (GBP £ 21.50) per connection. In addition the shareholders wereencouraged to promote Reliance Communications connections in their circles ofinfluence. If a shareholder subscribed to two connections, he or she would get freeReliance Communications Page 27 of 71 Ankit Yadav - 297986
  28. 28. usage worth of Rs. 100 (GBP £ 1.50) per connection for twelve months, in addition tothe Rs. 850 (GBP £ 12.5) per connection discount. This amounted to a total discount ofRs. 4,100 (GBP £ 60) for two connections27.2.3.2 Dhirubhai Ambani Entrepreneurship Programme – A New Way toMarketIn the case of marketing channels, instead of resorting to the tried and tested means,Reliance Communications created a completely new model. As a tribute to DhirubhaiAmbani, the acknowledged icon of a new entrepreneurial wave in India, RelianceCommunications fostered a new breed of entrepreneurs, as channel partners. TheDhirubhai Ambani Entrepreneur Programme began with an aim of enrolling 200,000individuals who are committed to acquire new customers and creating a new experiencefor them, based on flawless service and feeling of satisfaction28. About 50,000individuals were recruited in the matter of weeks who were guided and supported by900 Reliance Communications executives across India. In 673 towns and cities,Reliance Communications trained these entrepreneurs in basic skill sets, so that theyare able to deliver value to customers at their doorsteps. Reliance Communicationsenvisaged spending over Rs. 1,000 million (GBP £ 18.5 million) per year in training andcompetency building programmes for these entrepreneurs. Through this programme, in27 N/A. (2003). “Reliance package for shareholders – offers discounts on mobile phone connections”.28 N/A. (2002). “Reliance Infocomm heralds a new way of digital life for India”.Reliance Communications Page 28 of 71 Ankit Yadav - 297986
  29. 29. addition to contributing to society by encouraging other enterprises and creatingeconomic opportunities for millions of young Indian, Reliance Communications alsoleveraged goodwill and networks29.To complement the entrepreneurship Programme, Reliance Communications startedretails outlets in prime commercial and residential areas. In retail spaces ranging from800 and 2,000 sq ft, in major Indian cities, district headquarters and towns that wouldnumber over 500, the company leased or purchased areas and set up Web-Worlds. Atthe Web-Worlds the customer could interact directly with the company officials, see,touch and try the products and then buy. At the phone stores, the customers could buythe phones directly across the counter. The company envisaged that ultimately therewould be at least one Web-World in all the towns where Reliance Communications hasa presence30.The vision of Dhirubhai Ambani – mobile phone in every Indian’s hand – drove RelianceCommunications further to reach out to places hitherto untapped by any telecomcompany in India. Reliance Communications aggressively promoted its limited mobilitytelecom service by participating in or having partnerships at various shopping malls,book fairs, community functions, kiosks, letting people have a mobile phone connection.To build the customer base Reliance Communications went where the customers were29 N/A. (2002). “About Reliance Developer Program”.30 N/A. (2003). “Milestones”.Reliance Communications Page 29 of 71 Ankit Yadav - 297986
  30. 30. going – to grocery stores, gas stations, music stores, departmental stores, street sidevendors, bookshops and even hotels and restaurants. To ensure that the product wasavailable at the customer’s doorstep, Reliance stocked its handsets in about 15,000outlets across India, while 70,000 outlets in India sold the recharge coupons. RelianceCommunications also appointed 600 exclusive distributors who sold only the pre-paidoffering. Retailers in India like FabMall, PlanetM, HP, Music World and Timex started tobundle their products along with Reliance India Mobile. Additionally the companyconducted nationwide product demonstrations and announced that the Pioneer offerwould be a limited period offer, which further enhanced the interest of the consumers.2.3.3 Advertising – Educating Masses and Evoking PassionsAdvertising was a marketing strategy which complemented the unconventional use ofchannels by Reliance Communications. The Reliance mobile brand was branded asIndia Mobile to cash in on patriotic feelings. Bundling of handsets along with the service– a first time in India – allowed Reliance Communications to resort to a co-brandingexercise with the handset makers. The Reliance Communications brand name wasembossed on every handset which gave it a unique cachet, while the costs of manyadvertisements were discounted since they were also borne by the handset makers. Amega advertisement campaign was launched across the media to mark the launch. Theblitzkrieg coincided with the world cup tournament, ensuring a huge audience. The maintheme of the first campaign was built on the vision of Reliance Communications inbringing the power of telecommunications to every person in India. This campaignReliance Communications Page 30 of 71 Ankit Yadav - 297986
  31. 31. helped to educate people on the importance of the telecommunication services. Thenext set of campaigns talked about the innovative product features which differentiatedReliance Communications from its competitors. The advertisements announced thatReliance India Mobile was ‘Kabhi mobile, kabhi computer’ (Sometimes Mobile,Sometimes Computer). In the subsequent campaigns Reliance Communications startedriding on movies and cricket as themes.Overall three observations emerge from the way Reliance Communications handled themedia. Firstly, Reliance Communications built a huge public relations exercise aroundthe launch of the product. The public relations efforts gave much leverage to theadvertising and gave rise to a word of mouth campaign. Secondly, RelianceCommunications utilised every single media channel very effectively. RelianceCommunications advertised on every TV channel available and in most newspapers,thus making sure that the product was being promoted across India – a nation verymuch divided by language and market conditions. At the peak RelianceCommunications booked around 5,000 spots on 40 TV channels, one million sq ft ofspace on hoardings across India and inserted ads in over 70 publications in nationaland regional languages. Thirdly, Reliance Communications capitalised on the passionsof Indians when framing the advertisements. The campaigns had an emotional pitch,piggy backing on Cricket and Bollywood (equivalent of Hollywood in India) thuseffectively connecting with almost every Indian.Reliance Communications Page 31 of 71 Ankit Yadav - 297986
  32. 32. For marketing promotions Reliance Communications again used unconventionalstrategies. The mobile service was promoted aggressively through every marketingchannel. Huge signs were put up in front of every gas station and office space inaddition to the prime spots booked across India. The bulk purchase of signboardsensured that the cost was lower as compared to that available to competitors. RelianceCommunications also utilised their tower by putting up glow sign boards on them whichlit up during the night – an innovative, but cost effective, strategy since most of thetowers were in highly populated and visible areas.2.3.4 RWorld – Reliance Way of Putting the World in Your HandsAnother important marketing strategy that Reliance Communications used was productdifferentiation by mixing data applications with voice. Through RWorld – an inbuilt Javaenabled feature of all Reliance phones – the company guaranteed download speeds ofup to 144 kbps from an applications suite which has over 120 applications ranging frominteractive guides such as TV programme guides and city guides, live news and TVnews clips from Indian news channels like NDTV, CNBC, Aaj Tak and India TV tocontests, video songs, ring tones, cricket information, women’s world and kids world.Reliance Communications did not stop at this. Through the Dhirubhai AmbaniDevelopers Programme (www.dadp.com), it aimed at opening RelianceCommunications platform, on an open source basis, so that ideas can be converted intoapplications – where the power of thousands of minds could be harnessed to createunique products and services. These Dhirubhai Ambani Developers converted ideasReliance Communications Page 32 of 71 Ankit Yadav - 297986
  33. 33. into products as Reliance Communications provided the infrastructure, unlimited accessto comprehensive technical documentation and support and special rate plans designedfor the developer community. According to Reliance Communications, this programmewas aimed at creating wealth for 100,000 young developers who could leverage theirsuccess in India to win markets globally. Over 16,000 individual developers and 800Independent Software Vendors (ISVs) in addition to scores of small and mediumenterprises have so far enrolled in the programme.2.3.5 Product Innovations – Connecting with Every Section of SocietyReliance Communications leveraged its product innovations skills, applicationsdevelopment skills and partnerships to find new solutions to conventional andcontemporary problems – from managing queues in temples, and connecting all policestations, to delivering e-governance solutions to citizens. Reliance Communicationsapplications also facilitated the provision of educations and health to rural areas at anaffordable prices. Reliance Communications attempted to offer something for everysection of the society. In a significant initiative to connect with the huge farmer andtrader community of India, communities that are traditionally left out oftelecommunications strategies, Reliance Communications brought the Mandi (market)onto mobile handsets. The company tied up with National Commodity & DerivativesExchange Limited (NCDEX) to disseminate its spot and future commodity pricesthrough its RWorld suite of mobile applications. “The joint venture is a major step takenReliance Communications Page 33 of 71 Ankit Yadav - 297986
  34. 34. by NCDEX and Reliance Communications in providing a convenient way to accesscommodity prices,” said Mr Narendra Gupta, Chief Business Officer, NCDEX Limited31.To tap into the retailer community Reliance Communications deployed India’s firstwireless Point of Sale (POS) terminal for processing credit card transactions in July2003 in association with HDFC Bank – an important milestone in the history of retailcredit in India. Wireless POS enabled banks to expand exponentially the number ofmerchant outlets accepting credit cards and speed up penetration of credit cardservices to smaller towns. To connect with vehicle providers Reliance Communicationsintroduced the Vehicle Tracking System. Reliance Communications Vehicle Trackingsystem provided real time tracking and monitoring of road consignments and vehiclesacross India from anywhere and anytime32.Through RConnect services, Reliance Communications offered India’s only nationwidewireless Internet connectivity by leveraging its pan-India high speed CDMA2000 1 Xwireless network. RConnect helped Reliance Communications to connect to thegrowing community of Internet users, enabling Reliance Communications to gain over300,000 subscribers in less than seven months. Subscribers could connect to Internet‘on the move’ at data speed of up to 144 kbps from their laptops or other mobilecomputing devices using an RConnect cables with their Reliance phones.31 N/A. (2004). “Reliance Infocomm brings MANDI on mobile phones”.32 N/A. (2003). “Reliance Infocomm successfully deploys India’s first wireless POS terminal for credit cardprocessing”.Reliance Communications Page 34 of 71 Ankit Yadav - 297986
  35. 35. 2.3.6 Customer Service – Icing on the Marketing CakeReliance Communications followed up the product innovation and marketing tactics withgood customer service. A 24/7, 365 days a year customer service was set up in acentral location in Mumbai. Taking into consideration the languages and culturaldiversity of India, customer service was offered in ten languages. This ensured thatmany customers, who are primarily people without much fluency in English, have asmooth experience. Additionally the company set up customer service departments inevery town and tied up with 10,000 retail chain services. While other mobile operatorstook more two days for initial service provision, Reliance Communications ensured thatcustomers could walk into any of its retail outlets and buy a fully provisioned mobilephone within fifteen minutes.2.4 Tackling The Problem PhaseThe success of Reliance Communications and its impact on the Indian mobiletelecommunications industry does not mean that the growth of the company waswithout problems. Control issues and performance problems forced RelianceCommunications to phase down the Dhirubhai Ambani Entrepreneurs, who paid aroundRs. 10,000 (GBP £ 147) each to obtain dealerships, to a few thousands by April 2003,about a year after the launch33.33 N/A. (2003). “Reliance Info to phase down Dhirubhai Ambani Scheme”.Reliance Communications Page 35 of 71 Ankit Yadav - 297986
  36. 36. Reliance Communications was much criticised for circumventing many of the existingtelecommunication policies in a ruthless manner. According to the Telecom RegulatoryAuthority of India (TRAI), WLL mobility should be within the local area, that is in a rangeof about 20-25 kilometres with no roaming. Reliance Communications overcame thepolicy shackles and roaming problems associated with limited mobility by enablingcustomers to use the same handset in areas other than where it was registered.Through a multiple registration scheme, it provided connection to the RelianceCommunications network in other areas. This led the Department of Telecom (DoT) toissue a notice to Reliance Communications to discontinue offering roaming like serviceson its WLL mobile phones. Reliance Communications got into many more legaldifficulties with the policy-making body, the incumbent operator and the other operatorsin the Indian telecommunication sector. But eventually strong political clout and lobbyingsaw it through. Though opposed by the GSM Cellular lobby, based on therecommendation of the TRAI, as approved by the group of Ministers on telecom andthen the cabinet, the Unified licensing was introduced in India, benefiting RelianceCommunications the most. The Unified licensing allowed Reliance Communications,which held the Limited Mobility license, to migrate to the new regime to offer both basicand mobile services, putting it on a par with the other operators in India34.The Monsoon Hungama scheme fetched one million applications within the first tendays of its launch, but this did not happen without problems. “This unprecedented34 N/A. (2003). “DOT asks Reliance Info to stop roaming, multiple registration”.Reliance Communications Page 36 of 71 Ankit Yadav - 297986
  37. 37. response gave rise to logistics, billing and collection problems” said by the formerChairman, Mukesh Ambani, at the Reliance Industries’ annual general meeting.Reliance Communications provisioning for bad debts for the year 2003-2004 amountedfor sixteen percent of service revenues, among the highest in the industry, according totelecom experts. “This lends credence to the rumours in the market that manycustomers were cheating the company by disappearing, not paying up, not evenreceiving bills, and so on,” said an analyst with a brokerage firm35.Reliance Communications also saw a leadership crisis emerge between the Chairman –Mukesh Ambani and Vice Chairman – Anil Ambani, when Anil Ambani claimed anindependent stake in the running of Reliance Industries. The crisis emerged duringMarch 2004 and assumed a high profile in media and public spaces during December2004. April 2004 to June 2005 witnessed a situation where Mukesh Ambani, who untilthen led every decision at Reliance Communications, withdrew from day-to-dayoperations, focusing on untangling the crisis. As a result Reliance Communicationsslipped to the second place in the terms of subscriber numbers among the Indianmobile operators36.Still, Reliance Communications played a major role in ushering in a new era in Indiantelecommunications. Despite the problems, Reliance Communications remains one of35 N/A. (2004). “Relinace Info bad debts at 16pc of service revenues”.36 N/A. (2004). “The Ambani fight began in 2003”.Reliance Communications Page 37 of 71 Ankit Yadav - 297986
  38. 38. the front runners in the Indian telecommunication industry. The marketing channelproblems have been tackled and the company currently has a strong mix of own andoutside channels including Dhirubhai Ambani entrepreneurs, direct sales agents,retailers, Web-Worlds and Web-World Expresses. Reliance Communications haslicenses to offer telecom services in twenty out of twenty two circles under the UnifiedAccess license. In addition, it has received a letter of intent from the Jammu andKashmir circle. This has enabled the company to offer services across the length andbreadth of India’s vast geography through its next generation fibre optic networkbackbone spanning 60,000-route km. Reliance Communications has recovered a highpercentage of the bad debts. Also the fact that Reliance Communications had taken outinsurance on the handset it was selling to customers on an instalment basis worked inits favour.In January 2004, Reliance Communications acquired 100 percent of the undersea cablecompany, FLAG Telecom for GBP £ 155 million. This acquisition provided RelianceCommunications with an international gateway to global markets. The FLAG acquisitionalso means that Reliance Communications is the only Indian mobile operator to own aninternational undersea cable network with a global footprint37.Trust in the Reliance mobile brand was confirmed as it emerged as the most trustedtelecom brand in India. The control of the company has been taken by Anil Ambani whohas confirmed Reliance Communications commitment to put the power of information37 N/A. (2003). “ Reliance signs amalgamation agreement to acquire Flag Telecom Group Limited”.Reliance Communications Page 38 of 71 Ankit Yadav - 297986
  39. 39. and communications in the hands of all people at an affordable cost. He continues tobelieve that this will help empower them and overcome the handicaps of literacy andlack of mobility.Reliance Communications Page 39 of 71 Ankit Yadav - 297986
  40. 40. 3.0 Methodology3.1 Research MethodsThis research is based on primary and secondary data. Self Administered delivery andcollection questionnaires were valuable for obtaining sufficient primary data that hasbeen quantitatively analysed with consideration of the effectiveness of thequestionnaire. The questionnaire designed for the survey was first pilot tested. Theprimary research was designed to collect information from the Reliance Mobile usersand Non-Reliance Mobile Users.This research collected information from both Reliance Mobile users and Non-RelianceMobile users to test the relevance of some of the conclusions drawn from the literaturereview. The actual design is detailed in appendix four. The researcher was able tocollect a wealth of information from the questionnaire which was designed for thisresearch, but also importantly keeping the questionnaire to a reasonable length. Bycollecting information from both Reliance Mobile users and Non-Reliance Mobile usersthe researcher was able to gain the valuable insight into the perception of each.The final stage of the primary research was to visit the Reliance Web World inGhaziabad, Uttar Pradesh, India on the fifteenth of February 2010. During this visit theresearcher was able to spend a considerable amount of time discussing the RelianceCommunications background, services and facilities offered with both the companyofficials and customers present at the Reliance Web World. This helped researcher toReliance Communications Page 40 of 71 Ankit Yadav - 297986
  41. 41. have a great clarity and understanding of the work being done, as well as validating theareas that researcher had chosen to study.For the primary research the researcher sampled eighteen Reliance Mobile users andtwelve Non-Reliance Mobile users, which seems a reasonable figure considering thelogistics involved and the difficulty of contacting and obtaining information from bothReliance Mobile users and Non-Reliance Mobile users. Considering the explorativenature of this research and the qualitative information collected the researcher believesthis adequately fulfils the requirements of this research. Overall the researcher wouldconsider the methodology to have been successful and to have largely drawn theresults and collected the information which was collected.3.2 Data Collection TechniquesSurvey strategy is the most appropriate technique for this research because of itsdeductive approach. Survey strategy is also very common strategy in business andmanagement research. It allows large amount of data from a considerable population inan economical way. In a survey, data can be easily standardised in the form ofquestioning that allows easy comparison and analysis. Survey strategy gives moreflexibility and control over the research. It is also easily understood so survey strategy isperceived as commanding. The data collected through the survey can be easilyanalysed through available statistical programmes.Reliance Communications Page 41 of 71 Ankit Yadav - 297986
  42. 42. 3.3 Limitations to the researchThe potential problems that might have occurred with the primary research would havebeen the collection of primary data as the consumers here in UK are not familiar withthe services and transformation that Reliance Communication brought to Indianconsumers. So to overcome this problem a questionnaire was designed specificallytargeting Indian consumers who are either the users of Reliance Mobile services or areNon-Reliance Mobile services users and the questionnaire was carried out betweeneighth of February 2010 and eighteenth of February 2010 in Ghaziabad, Uttar Pradesh,India.The samples of both Reliance Mobile services users (eighteen users) and Non-RelianceMobile services users (twelve users) are both relatively small. This small sample sizewas a result of the difficulty in contacting Reliance Mobile users (as mentioned in themethodology); Non-Reliance Mobile users were particularly difficult to contact, as theydid not demonstrate the same enthusiasm compared to Reliance Mobile users. As thesample size is not statistically significantly, which is the main limitation to the research,the results can only provide an indication of what may be happening.The survey for Reliance Mobile service users was designed to include the majority ofquestions on Reliance Communication’s role in Indian telecommunications market,however if the researcher was to do this study again then the researcher would changethis to include equal numbers of questions relating to Reliance Communication’s andReliance Communications Page 42 of 71 Ankit Yadav - 297986
  43. 43. other players which were involved in the transformation phase of Indiantelecommunications industry.Reliance Communications Page 43 of 71 Ankit Yadav - 297986
  44. 44. 4.0 Results and FindingsAfter carrying out the survey for both the Reliance Mobile users and Non-RelianceMobile users the following results have been concluded.As far as the age group is concerned the majority of the respondents were agedbetween eighteen to twenty nine around forty percent of them followed by respondentsaged between thirty to thirty nine around thirty percent of them, twenty percent of therespondents were aged between forty to forty nine and the last ten percent of therespondents were aged above fifty. So here we can clearly see the divide between theusers as majority of the user are eighteen to twenty nine which clearly shows that theReliance Mobile services are more appealing to younger clientele for graphicalillustration (appendix one).With reference to the Reliance Mobile user section the responses of the surveyquestions, for question one the around thirty two percent of the respondents havereplied that they are using Reliance Mobile services for over seven years, followed bythe new addition of around twenty nine percent which have started using RelianceMobile services in last one to two years, around twenty one percent of respondentshave replied that they have been using the Reliance Mobile services for three to fouryears and finally there are about eighteen percent respondents which replied that theyhave been using Reliance Mobile services for about five to six years for graphicalillustration (appendix one).Reliance Communications Page 44 of 71 Ankit Yadav - 297986
  45. 45. In question two, respondents were asked how they heard about the Reliance Mobileservices so around fifty percent of replies were related to adverts which were furtherbroken down into sub-categories of newspaper ads which amount for twenty percent,Television ads which amounted for twenty five percent and Magazines ads whichamounted for five percent. Rest of the respondents to this question replied that theywere introduced to Reliance mobile services by their friends around fifteen percent andaround thirty five percent of respondents were introduced to Reliance Mobile services atthe company share holder meeting. If we try and relate these responses to literaturereview section – customer generation – tapping into internal resources and advertising –educating masses and evoking passions so we can clearly see the strategies whichwere used by Reliance Communications clearly worked for the company for graphicalillustration (appendix one).In question three, respondents were asked what was the reason behind their choice ofReliance Mobile services over other service providers? In reply majority of respondentsaround forty percent said because of value for money, followed by thirty five percent ofrespondents which replied because of offers and bundles and around twenty percent ofthe respondents replied because of the brand image of parent company. So here also ifwe try and relate the literature review section – pricing strategy – Dhirubhai AmbaniPioneer offer, Monsoon Hungama scheme and the vision of the founder to make latesttelecommunication technologies available to every Indian for price of a post card havealso helped the company to win customers and their loyalty towards the company andthe ‘Out of Box’ thinking used by the company as well for graphical (appendix one).Reliance Communications Page 45 of 71 Ankit Yadav - 297986
  46. 46. In question four, respondents were asked in what way do think that Reliance mobileservices are better than its competitors? In reply majority of respondents around thirtypercent said due to customer service and same amount of respondents said becauseReliance Communications also keeps up with the new technological trends and makethem available cheap to its customers than any other service provider. So if we try andrelate these responses to the literature review section – customer service – icing on themarketing cake where Reliance communications introduced a 24/7 and 365 days a yearcustomer service where company considered the language and cultural diversity ofIndia and introduced the service in ten languages as this ensured that many customers,who are primarily people without much fluency in English, have a smooth experience.So this strategy also worked in the favour of Reliance Communication. The rest of therespondents around twenty percent said because of the transparency in tariffs andservice quality offered by Reliance Communications was the major factor for them toconclude that Reliance Mobile services are better than its competitors for graphicalillustration (appendix one).In question five, respondents were asked if they think that Reliance Communicationshave transformed the Indian mobile industry since its launch. In reply vast number ofrespondents replied yes around seventy five percent of them, around fifteen percent ofthem replied no and rest of them replied not sure around ten percent for graphicalillustration (appendix one).Reliance Communications Page 46 of 71 Ankit Yadav - 297986
  47. 47. In question six, respondents were asked according to them which telecom company inIndia is the biggest competitor of Reliance Communications? In reply majority ofrespondents around forty percent of them said that Bharti Airtel is the biggest competitorfollowed by companies like Vodafone twelve percent, Tata Communications tenpercent, Aircel eleven percent, Idea Cellular and Tata Teleservices six percent eachfollowed by Virgin Mobile four percent and NTT DoCoMo two percent. Here if try andrelate this figure to the actual figures released by the Telecom Regulatory Authority ofIndia (TRAI) in appendix five we can see the clear difference as Bharti Airtel has over110 million subscribers and Reliance Communications have just over 86 millionsubscribers for graphical illustration (appendix one).In question seven, respondents were asked if they think that the strategies used byReliance Communications competitors are the reason for the loss of market share bycompany. In reply around sixty percent of the respondents said yes, followed by twentyfive percent of the respondents which said no and around fifteen percent of therespondents said they were not sure about the reason behind this. If we try and relatethis question to recent changes in the market share figures in appendix five released byTRAI we can clearly see Bharti Airtel is leading the way in the Indian mobile market forgraphical illustration (appendix two).And finally in question eight, respondents were asked if they are satisfied with RelianceMobile service? In reply huge number of respondents around eighty five percent of themsaid yes followed by ten percent of respondents said no and rest of the respondentsReliance Communications Page 47 of 71 Ankit Yadav - 297986
  48. 48. around five percent were not sure. So here also we can see majority of the respondentsare satisfied with the Reliance Mobile service with a very small figure of respondentsdisagreeing for graphical illustration (appendix one).With reference to the Non-Reliance mobile user category, the first question in thissection is to identify if the respondent actually uses the mobile phone as part of his/herjob or at home. In reply around ninety percent of the respondents said yes and a smallamount of respondents around said no. The respondents who replied no wererequested to stop and not to carry on with the survey as these respondents wereirrelevant to the survey for graphical illustration (appendix one).In question two, respondents were asked what mobile network do they use. In replyaround fifty percent of the respondents said Bharti Airtel followed by BSNL ten percent,Idea Cellular eight percent, Vodafone seven percent, Aircel six percent, TataCommunications five percent, Tata Teleservices four percent, Virgin Mobile threepercent and NTT DoCoMo two percent. Here also we can see Bharti Airtel is the biggestcompetitor of Reliance Communications and this fact is also confirmed by the surveyrespondents for graphical illustration (appendix one).In question three, respondents have been asked the reason why they have chosen theabove service provider in comparison to Reliance Mobile services? In reply around fiftypercent of the respondents have replied the mobile phone service they use is providedby the company they work for, followed by around forty three percent respondents whosaid that they use other service provider because they get a better service somewhereReliance Communications Page 48 of 71 Ankit Yadav - 297986
  49. 49. else and around seven percent of respondents said the mobile phone service they useis provided by their parents. In this question two trends emerge company provided andbetter service. In this situation Reliance Communications must be failing to deliver theperfect service and lack of corporate packages for graphical illustration (appendix one).In question four, respondents were asked would they switch to Reliance Mobile serviceif better services and offers are provided to them at lower cost. In reply a large numberof respondents around sixty eight percent replied yes followed by around twenty twopercent of respondents which replied no and around ten percent of respondents repliedthat they are not sure. In this situation Reliance Communications have to make effortsto lure these customer to its network for graphical illustration (appendix one).And in question five, respondents were asked what steps Reliance Communicationsshould take to increase its market share? In reply around forty percent of respondentshave said that Reliance Communications should be the first telecom company tointroduce the 3G technology as the Government of India announce the spectrumallocation, around thirty percent of respondents which replied that there is a need ofmore regional call centres as the company have expanded pan-India since its launch inDecember 2002. Followed by twenty percent of respondents which said RelianceCommunications should offer more offers and rest of the respondents around tenpercent said Reliance Communications should provide better service than itscompetitors for graphical illustration (appendix one).Reliance Communications Page 49 of 71 Ankit Yadav - 297986
  50. 50. 5.0 ConclusionsReliance Communications stimulated telecommunication growth in India by challengingmany of the conventional practices in product design, distribution, sales, advertising andpricing. Reliance Communications fashioned a strategy which was conceptually simplebut sweeping in its impact. While the competitors focused on the top segment of themarket, by charging a premium price, Reliance Communications sought to reduce thecost to the consumer, thus focusing on a market driven by volume. While others sawweakness of India as a market – widespread poverty an low levels oftelecommunication penetration – and Reliance as an old economy company focusing onoil production and business-to-business clients – Reliance Communications realisedthat these actually were strengths which it could tap into. Reliance Communicationsmanagers saw that telecommunications would be much valued by the poorer sectionsof society if it could be used to create opportunities and offered at affordable prices. Thecompany tapped into its strong political and financial clout to build up a strongorganisation that could push it through the legal and regulatory setup in India.Reliance Communications is planning to consolidate its telecommunications evolutionthrough phases:Firstly, the mobile revolution now reaching over 80 million subscribers will expand to640,000 villages and to over 5,000 cities and towns. This revolution will create thepotential for every individual to talk, learn, shop, bank, transact, entertain and beinformed, while on the move.Reliance Communications Page 50 of 71 Ankit Yadav - 297986
  51. 51. Secondly, an enterprise Net-way revolution will bring the possibility to providebroadband experience to every desktop and device in half a million enterprise buildingsinitially and eventually to millions of commercial buildings. This will create the potentialto empower every enterprise by making transactions efficient, functions seamless andnew economic opportunities abundant.And thirdly, a convergence revolution will provide high-speed networks to millions ofhomes. This revolution will offer every home access to a wide range of televisionchannels, high-speed telephony, audio conferencing, videoconferencing and video ondemand.Reliance Communications Page 51 of 71 Ankit Yadav - 297986
  52. 52. 6.0 RecommendationsAfter carrying out the research on role of “Reliance Communications strategy and itsimpact on the Indian mobile telecommunications industry” following recommendationshave been concluded:Reliance Communications have been maintaining their position as the second largestmobile operator in India with its 86 million subscribers since September 2009 and BhartiAirtel leads the way as the number one mobile service operator with its 110 millionsubscribers. Indian mobile services market is very dynamic in nature and it is changingvery rapidly as more and more new entrants are entering the market with attractive priceplans and service bundles to gain market share for the established service providerslike Reliance Communications.To weather this storm of new operators entering the Indian mobile market and stopthem from luring the valuable customer base of the company Reliance Communicationshave to adapt new practices like offering new deals to corporate clients, offer newpayment plans, offer enhanced value added services to its product portfolio andpromote innovation and idea generation throughout the organisation. If the companyfails to take action on time regarding the market situation, the company poses a risk ofbeing either taken over by small players (in accordance of market share) or becomingthe victim of the industry which once it ruled.Reliance Communications Page 52 of 71 Ankit Yadav - 297986
  53. 53. Reliance Communications should adapt to following mobile features so the companycreates an edge over its competitors:Reliance Communications should bring total transparency and therefore, offer a persecond pulse. As the customer will only pay for the second they use therefore,customers only pay for what they use. The current charge is on per minute basis andthe customer loses the unused seconds. For example, at present if a customer makes atwenty second call and they have to pay for one minute because the current mobileservice providers have a sixty second pulse. So customers using RelianceCommunications network will only have to pay for the seconds they use not for thewhole minute. International calls have always been high cost calls, so they should alsobe charged as per second pulse rather than per minute pulse.Pre-activated national and international and national roaming without rental should beoffered as standard to all customers so they can talk to their friends and family who arebased out of the town or out of country without have to worry about the connectionproblems as some of the service might be restricted on their phones. Anywhere in Indiatop-up should be offered to customers so they can top-up their accounts with anydesired amount between Rs. 10.00 to Rs. 10,000.Reliance Communications Page 53 of 71 Ankit Yadav - 297986
  54. 54. ReferencesAshiwal, S. (2004). Reliance Infocomm unveils plans for prepaid service. Available:http://www.hindu.com/2004/02/10/stories/2004021002271500.htm. Last accessed 15 April2010.Ganapati, P. (2002). Reliance set to revolutionise mobile services. Available:http://www.rediff.com/money/2002/dec/27ril1.htm. Last accessed 20 March 2010.Gupta, D. S. (2004). Reliance makes a cash call. Available:http://www.rediff.com/money/2004/feb/14spec.htm. Last accessed 12 March 2010.Jagannathan, V. (2003). Affordability is what hinders telecom revolution, finds seminar.Available: http://www.domain-b.com/industry/telecom/20030205_seminar.html. Last accessed10 March 2010.N/A. (2010). About Sh. Dhirubhai Ambani. Available:http://www.rcom.co.in/Rcom/aboutus/overview/overview_ourfounder.html. Last accessed 05March 2010.N/A. (2010). About Reliance Developer Program. Available:http://www.rcom.co.in/Rcom/aboutus/rdp/rdp_overview.html. Last accessed 18 April 2010.N/A. (2003). DOT asks Reliance Info to stop roaming, multiple registration. Available:http://www.domain-b.com/companies/companies_r/reliance_infocom/20031104_stop-roaming.htm. Last accessed 22 April 2010.N/A. (2001 - 2002). Economic Survey 2001 - 2002. Available: http://indiabudget.nic.in/es2001-02/general.htm. Last accessed 10 April 2010.Reliance Communications Page 54 of 71 Ankit Yadav - 297986
  55. 55. N/A. (1999 - 2009). Milestones. Available:http://www.rcom.co.in/Rcom/aboutus/overview/overview_milestones.html. Last accessed 10March 2010.N/A. (2010). Overview - Business - Mobile. Available:http://www.rcom.co.in/Rcom/aboutus/overview/overview_business.html. Last accessed 10February 2010.N/A. (2010). Overview - Vision. Available:http://www.rcom.co.in/Rcom/aboutus/overview/overview_vision.html. Last accessed 14-May-2010.N/A. (2010). Reliance Communications Ltd. Available:http://bseindia.com/bseplus/StockReach/AdvanceStockReach.aspx?scripcode=532712. Lastaccessed 15 April 2010.N/A. (2002). Reliance Infocomm heralds a new way of digital life for India. Available:http://www.domainb.com/companies/companies_r/reliance_infocom/20021227_digital_life.html.Last accessed 25 March 2010.N/A. (2002). Reliance Infocomm Ushers a Digital Revolution in India. Available:http://www.rcom.co.in/rcom/StoreLocator/press_release_detail.jsp?id=72. Last accessed 11March 2010.N/A. (2003). Reliance Infocomm makes mobile telephony more affordable. Available:http://www.rcom.co.in/rcom/StoreLocator/press_release_detail.jsp?id=56. Last accessed 11March 2010.Reliance Communications Page 55 of 71 Ankit Yadav - 297986
  56. 56. N/A. (2004). Reliance Infocomm storms prepaid market, announces path breaking schemes.Available: http://www.rcom.co.in/rcom/StoreLocator/press_release_detail.jsp?id=21. Lastaccessed 12 April 2010.N/A. (2003). Reliance Package for shareholders - offers discounts on mobile phoneconnections. Available:http://www.thehindubusinessline.com/bline/2003/06/17/stories/2003061702700100.htm. Lastaccessed 15 April 2010.N/A. (2004). Reliance Infocomm brings MANDI on mobile phones. Available:http://www.rcom.co.in/rcom/StoreLocator/press_release_detail.jsp?id=101. Last accessed 15April 2010.N/A. (2003). Reliance Infocomm sucessfully deploys Indias first wireless POS terminal for creditcard processing. Available:http://www.rcom.co.in/rcom/StoreLocator/press_release_detail.jsp?id=61. Last accessed 12April 2010.N/A. (2003). Reliance Info to phase down Dhirubhai Ambani scheme. Available:http://www.domain b.com/companies/companies_r/reliance_infocom/20030422_schemes.htm.Last accessed 14 April 2010.N/A. (2004). Reliance Info bad debts at 16pc of service revenues. Available:http://www.blonnet.com/2004/06/26/stories/2004062602180700.htm. Last accessed 22 April2010.Reliance Communications Page 56 of 71 Ankit Yadav - 297986
  57. 57. N/A. (2003). Reliance Signs Amalgamation Agreement To Acquire Flag Telecom Group Limited.Available: http://www.rcom.co.in/rcom/StoreLocator/press_release_detail.jsp?id=41. Lastaccessed 25 April 2010.N/A. (2010). Strategic Planning - Values and Vision. Available:http://tutor2u.net/business/strategy/vision.htm. Last accessed 15-May-2010.N/A. (2010). Strategy - Competitive Advantage. Available:http://tutor2u.net/business/strategy/competitive_advantage.htm. Last accessed 15-May-2010.N/A. (2004). The Ambani fight began in 2003. Available:http://www.rediff.com/money/2004/dec/15ril1.htm. Last accessed 23 April 2010.N/A. (2010). The Indian Telecom Services Performance Indicators. Available:http://www.trai.gov.in/Reports_list_year.asp. Last accessed 10 April 2010.N/A. (2010). Universal Currency Converter GBP to INR. Available:http://www.xe.com/ucc/convert.cgi?Amount=1&From=GBP&To=INR. Last accessed 20 March2010.Reliance Communications Page 57 of 71 Ankit Yadav - 297986
  58. 58. AppendicesAppendix – 1 – Questionnaire results:Sample age group:Reliance Mobile user category:Q – 1 How many years have you used Reliance Mobile Services?Reliance Communications Page 58 of 71 Ankit Yadav - 297986
  59. 59. Q – 2 How did you hear about Reliance Mobile Services?Q – 3 What was the main reason for you to choose Reliance Mobileservices over other service providers?Reliance Communications Page 59 of 71 Ankit Yadav - 297986
  60. 60. Q – 4 In what aspects do you think that Reliance Mobile Services are betterthan its competitors?Q – 5 Do you think that Reliance Communications have transformed theIndian Mobile industry since its lauch?Reliance Communications Page 60 of 71 Ankit Yadav - 297986
  61. 61. Q – 6 From the following telecom companies which one do you reckon isthe biggest competitor of Reliance communications?Q – 7 Do you reckon the strategies which were used by RelianceCommunications competitors are the reasons for the loss of market shareby company?Reliance Communications Page 61 of 71 Ankit Yadav - 297986
  62. 62. Q – 8 And finally, are you satisfied with Reliance Mobile services?Non-Reliance Mobile user category:Q – 1 Do you own/use a mobile phone either part of your job or at home?Reliance Communications Page 62 of 71 Ankit Yadav - 297986
  63. 63. Q – 2 What mobile network do you use?Q – 3 Why have you choosen the above mobile service provider incomparision to Reliance Mobile services?Reliance Communications Page 63 of 71 Ankit Yadav - 297986
  64. 64. Q – 4 Would you likely to switch to Relinace Mobile services if the offersand/or better are provided to you for lower cost?Q – 5 And finally, according to you what Reliance Communications can doto increase its market share and improve its services?Reliance Communications Page 64 of 71 Ankit Yadav - 297986
  65. 65. Appendix – 2 –Fifth largest telecom operator in the world: (Source: Reliance Investor Presentation 2009)Appendix – 3 –Targets the largest untapped population in the world: (Source: Reliance Investor Presentation 2009)Reliance Communications Page 65 of 71 Ankit Yadav - 297986
  66. 66. Appendix – 4 – QuestionnairesAppendix – 4.1 Reliance Mobile User Category Questionnaire:Q – 1 How many Years have you used Reliance Mobile services?1 – 2 Years ( )3 – 4 Years ( )5 – 6 Years ( )7+ Years ( )Q – 2 How did you hear about Reliance Mobile services?Adverts ( ) - Newspaper Ads ( ) - Televison Ads ( ) - Magazine Ads ( )Friends ( )Company share holder meeting ( )Q – 3 What was the main reason for you to choose Reliance Mobile services over otherservice providers?Value for money ( )Reliance Communications Page 66 of 71 Ankit Yadav - 297986
  67. 67. Offers and Bundles ( )Brand image of parent company ( )Q – 4 In what aspects do you think that Reliance Mobile services are better than itscompetitors?Customer service ( )Service quality ( )Transparency in tariffs ( )Keeping up with latest technological trends ( )Q – 5 Do you think that Reliance Communications have transformed the Indian mobileindustry since its launch?Yes ( )No ( )Not Sure ( )Q – 6 From the following telecom companies which one do you reckon is the biggestcompetitor of Reliance communications?Bharti Airtel ( ), BSNL ( ), MTNL ( ), Tata Communications ( ), Aircel ( ), Idea Cellular( ), NTT DoCoMo ( ), Tata Teleservices ( ), Vigin Mobile ( ), Vodafone India ( ).Reliance Communications Page 67 of 71 Ankit Yadav - 297986
  68. 68. Q – 7 Do you reckon the strategies which were used by Reliance Communicationscompetitors are the reasons for the loss of market share by company?Yes ( )No ( )Not Sure ( )Q – 8 And finally, are you satisfied with the Reliance Mobile services?Yes ( )No ( )Not Sure ( )Please Stop here. Thank you for you time in filling out this questionnaire.Appendix – 4.2 – Non-Reliance Mobile User Category Questionnaire:Q – 1 Do you own/use a mobile phone either part of your job or at home?Yes ( )No ( ) – please stop here.Q – 2 What mobile network do you use?Bharti Airtel ( ), BSNL ( ), MTNL ( ), Tata Communications ( ), Aircel ( ), Idea Cellular( ), NTT DoCoMo ( ), Tata Teleservices ( ), Vigin Mobile ( ), Vodafone India ( ).Reliance Communications Page 68 of 71 Ankit Yadav - 297986
  69. 69. Q – 3 Why have you choosen the above mobile service provider in comparision toReliance Mobile services?Better service ( )Company provided ( )Provided by parents ( )Q – 4 Would you likely to switch to Relinace Mobile services if the offers and/or betterare provided to you for lower cost?Yes ( )No ( )Not Sure ( )Q – 5 And finally, according to you what Reliance Communications can do to increaseits market share and improve its services?More offers ( )Better service ( )Regional call centres ( )Introduce 3G technology ( )Please stop here. Thank you for time your in filling out this questionnaire.Reliance Communications Page 69 of 71 Ankit Yadav - 297986
  70. 70. Appendix – 5: Subscriber numbers (millions) by service provider Service June 2003 Sep 2003 Dec 2003 Mar 2004 Mar 2005 Sep 2009 Provider After After One Year After Pre- One Year Current Pioneer Monsoon After Paid After Pre- Scenario Scheme Hungama Launch Launch Paid in Market RCOM 1.82 4.20 6.24 7.26 10.45 86.12 Bharti 3.75 4.62 5.50 6.50 10.98 110.51 BSNL 3.19 4.04 4.94 5.53 9.90 58.76Vodafone 2.62 3.22 3.77 5.15 7.80 82.85 MTNL 0.29 0.31 0.42 0.46 1.08 4.68 BPL 1.17 1.31 1.54 1.88 2.58 2.50 TATA 0.2 0.4 0.56 0.63 1.09 46.80 Total 17.32 23.03 28.44 33.69 52.22 471.73 (Source: TRAI Documentation)Reliance Communications Page 70 of 71 Ankit Yadav - 297986
  71. 71. Appendix – 6: Strategy Competitive AdvantageCompetitive Advantage - DefinitionA competitive advantage is an advantage over competitors gained by offeringconsumers greater value, either by means of lower prices or by providing greaterbenefits and service that justifies higher prices.The differentiation and cost leadership strategies seek competitive advantage in abroad range of market or industry segments. By contrast, the differentiation focus andcost focus strategies are adopted in a narrow market or industry. (Source: Tutor2u.net)Reliance Communications Page 71 of 71 Ankit Yadav - 297986

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