Reliance

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Reliance

  1. 1. Strategic analysis Of Reliancecommunications
  2. 2. Reliance communications1. COMPANY INFORMATIONReliance - Indias largest business houseReliance – Anil Dhirubhai Ambani Group, an offshoot of the Reliance Group founded byShri Dhirubhai H Ambani (1932-2002), ranks among India‘s top three private sectorbusiness houses in terms of net worth. The group has business interests that rangefrom telecommunications (Reliance Communications Limited) to financial services(Reliance Capital Ltd) and the generation and distribution of power (Reliance EnergyLtd).Reliance – ADA Group‘s flagship company, Reliance Communications, is Indias largestprivate sector information and Communications Company, with over 40 millionsubscribers. It has established a pan-India, high-capacity, integrated (wireless and wireline), convergent (voice, data and video) digital network, to offer services spanning theentire infocomm value chain.Other major group companies — Reliance Capital and Reliance Energy — are widelyacknowledged as the market leaders in their respective areas of operation.
  3. 3. What Reliance is all about?  Reliance Energy Ltd.  Reliance Mutual Fund  Harmony  Reliance Communications  Reliance Life Insurance  Reliance Anil Dhirubhai Ambani Group  Reliance General Insurance2. BUSINESS DESCRIPTIONRELIANCE COMMUNICATION2.1 OVERVIEW ―A dream come true‖The Late Dhirubhai Ambani dreamt of a digital India — an India where the common man would have access toaffordable means of information and communication. Dhirubhai, who single-handedly built India‘s largest privatesector company virtually from scratch, had stated as early as 1999: ―Make the tools of information andcommunication available to people at an affordable cost. They will overcome the handicaps of illiteracy and lack ofmobility.‖It was with this belief in mind that Reliance Communications (formerly Reliance Infocomm) started laying 60,000route kilometers of a pan-India fibre optic backbone. This backbone was commissioned on 28 December 2002, theauspicious occasion of Dhirubhai‘s 70th birthday, though sadly after his unexpected demise on 6 July 2002.Reliance Communications has a reliable, high-capacity, integrated (both wireless and wire line) and convergent(voice, data and video) digital network. It is capable of delivering a range of services spanning the entire infocomm(information and communication) value chain, including infrastructure and services — for enterprises as well asindividuals, applications, and consulting. Today, Reliance Communications is revolutionizing the way Indiacommunicates and networks, truly bringing about a new way of life.2.2.1 VISION:
  4. 4. ―We will leverage our strengths to execute complex global-scale projects to facilitate leading-edge information andcommunication services affordable to all individual consumers and businesses in India.‖We will offer unparalleled value to create customer delight and enhance business productivity. We will also generatevalue for our capabilities beyond Indian borders and enable millions of Indias knowledge workers to deliver theirservices globally.‖2.2.2 India’s leading integrated telecom companyReliance Communications is the flagship company of the Anil Dhirubhai Ambani Group (ADAG) of companies. Listedon the National Stock Exchange and the Bombay Stock Exchange, it is India‘s leading integrated telecommunicationcompany with over 40 million customers.Our business encompasses a complete range of telecom services covering mobile and fixed line telephony. Itincludes broadband, national and international long distance services and data services along with an exhaustiverange of value-added services and applications. Our constant endeavour is to achieve customer delight by enhancingthe productivity of the enterprises and individuals we serve.Reliance Mobile (formerly Reliance India Mobile), launched on 28 December 2002, coinciding with the joyousoccasion of the late Dhirubhai Ambani‘s 70th birthday, was among the initial initiatives of Reliance Communications.It marked the auspicious beginning of Dhirubhai‘s dream of ushering in a digital revolution in India. Today, we canproudly claim that we were instrumental in harnessing the true power of information and communication, bybestowing it in the hands of the common man at affordable rates.2.2. PRODUCT LINE
  5. 5. CHART: 1
  6. 6. Fig: 1Reliance uses C.D.M.A. ( Code Division Multiple Access ) technology for its wirelesscommunication service which is used for Mobile as well as Fixed line services. C.D.M.A.is known for better voice quality and higher data throughput across the air interface atlow operating cost .2.1.1 RELIANCE MOBILE Fig: 2
  7. 7.  POSTPAID FEATURES OF POSTPAID a)1 INDIA- Now call any phone, anywhere in India for just ONE RUPEE per min.b) My Plans- Presenting a range of Postpaid plans designed to fit every lifestyle .So goahead get on to Local gossip , chat for hours on STD , get close to your group or jest get lost innew horizon.c) Joy Plans- Reliance Mobile postpaid is a joy to use. Our postpaid plans help you save oncosts. Take your pick from a wide choice of plans with economical tariff rates, according to youruse and budget.d) On-net Talk time Pack- Get 1,000 minutes of FREE talk time. That‘s right. Now, you canenjoy the first 1,000 minutes of calling to all Reliance mobiles and fixed wireless phones andterminals (FWP/T) in your circle, absolutely free!e) Get Started Kit- Do not be tied down by a particular handset or phone number. Now setyourself free with the new ‗Get started kit‘ from Reliance Mobile.f) Bill Payments- Introducing convenient bill payments. Now pay your bills directly from yourcredit card or bank account, and save precious time.g) INMARSAT- Save up to 70 per cent on calls to satellite phones. Reliance exclusively offersits subscribers significant savings — up to 70 per cent depending on the type of terminal andthe location — for voice calls made to any Inmarsat number.  PREPAIDFEATURES OF PREPAID a) Prepaid Tariffs- Choose the tariff plan that suits you needs.
  8. 8. b) E-Recharge- Now you can recharge your prepaid with any amount, from Rs.10 toRs.10,000. So dont let your budget stop you. Choose a recharge value that suits you and staymobile. c) 1INDIA- Introducing 1 INDIA recharge options of 1 day, 1 week and 1 month validity. d) Get Started Kit- Gone are the days when you were bound by a particular handset and acertain phone number. You can now set yourself free with the new Get Started Kit fromReliance Mobile. e) Chat & Play - Now you can recharge your prepaid with any amount, from Rs.10 toRs.10,000. So dont let your budget stop you. Choose a recharge value that suits you and staymobile.  Reliance HELLO Reliance landline: Fig: 3FEATURESA complimentary bouquet of featuresa) Next-Gen caller ID: Reliance Landline displays the name and/or number of a waiting callerwhile you are in the middle of a conversation. It allows you the flexibility to choose between twocalls or switch from one caller to another.
  9. 9. b) Mobile phone features: Now enjoy all the interactive benefits of a mobile phone. Store andrecall numbers from the phone book, check the history of missed / dialed / received calls.What‘s more, you can also use the history menu to make fresh calls.c) Delayed hotline: You can program your Reliance Landline to automatically call a predefinednumber by lifting the receiver and holding it for seven seconds.d) Navigation keys: Using the navigation keys on Reliance Landline you can activate phonefeatures like delayed hotline, line locking, etc — now you need not remember complicatedfeature codes and cumbersome procedures. You can also set your preferred ring tone, ringervolume and LCD contrast.e) Remote phone management: You can lock or unlock the STD/ ISD facility or hotline settingson your Reliance Landline, remotely from anywhere, from any tone / DTMF phone.Plus, you get host of other interesting features like speaker phone, 3-way conferencing, quickdialing, and many more.  Fixed Wireless Phone Fig: 4 Benefits: a) No wires attached Get on the wireless connectivity bandwagon. And straight away become immune to cuts in the cable, rains etc. Carry the set along with you when you move from one room to another or when you shift your home/office.
  10. 10. b) Wireless Internet (Reliance Net connect) The FWP has an in-built modem for high speed internet connectivity. Surfat speeds up to 115 kbps. What‘s more, you do not need a separate ISP connection for operating the set. c) Mobile Phones Features Enjoy all the features of a mobile phone: SMS, In-built caller line identification, voice mail, 99-number phone book, speaker phone, a choice of many ringtones, etc. d) City Mobility You can use your FWP anywhere within your city and still receive and make calls, at no extra cost.  FIXED WIRELESS TERMINAL(FWT)Fig: 5Fixed terminal, limitless benefitsBENEFIT e) Great SavingsUnbelievably low call rates. Substantial savings on ISD calls. f) Zero Effective RentalsValue of free calls almost equivalent to monthly plan charges.
  11. 11. g) Parallel Connection FacilityTwo voice ports to connect two telephone instruments to be used as parallel connections. h) No Wires AttachedWireless connectivity-immune to cable cuts, rains etc. Carry it along when you shift yourhome/office. i) Wireless Internet (Reliance Net connect)In-built modem for high speed Internet connectivity at speeds of upto 115 kbps. No separateISP connection required. j) State-of-the-art featuresThree-way Call Conferencing, Speed Dialing, Hotline, Call Restrict/Call Lock, Call Wait/CallHold, Call Divert, Alarm and Caller Line Identification enabled.  Reliance broadband. Fig: 6
  12. 12. Fig: 72.3 COMPETETORS2.3.1 BSNL Fig: 8The Grand Daddy of all Operators, The State owned B.S.N.L. was the first to launchP.C.O. service across the country under the guidance of Sam Pitroda whorevolutionized the telecom industry in India. Besides its nationwide presence, it enjoyedthe first mover advantage and had no competition for almost a decade. The advent of
  13. 13. private operators made BSNL pull up its socks but still has an edge over others in themarket.2.3.2 TATA INDICOM Fig: 9Pay Telephony Business Unit (PTBU) is a strategic business unit of Tata Teleservices Limitedand has been the first private and branded player in the payphone industry in the country. Itprovides its services under the brand name of Tata. Starting with 5 circles in 2000 it has anationwide presence in 20 circles and over 200 towns across the country today. Tata also usesC.D.M.A. wireless technology as used by Reliance but with a much smaller infrastructure whichis concentrated in only a few states like Maharashtra and Andhra Pradesh.2.3.3 AIRTEL Fig: 10Airtel, the Basic phone service of Bharti emerged as the first private competitor in thebasic phones market. Though using Landline phones (copper-wire circuitry) the
  14. 14. service turned out to be a welcome break from the inefficient government ownedoperators.3. STRATEGIC ANALYSIS OF THE COMPANY3.1. ANSOFF’S MATRIXThe Ansoff product-market matrix helps to understand and assess businessdevelopment strategy. It has two dimensions, products and markets. Four differentgrowth strategies can be formulated and any business can choose which strategy toemploy, whether purely or as a mix. The strategies are  Market Penetration  Market Development  Product Development  DiversificationReliance FWT PCOs can be categorized as product development. Product developmentinvolves selling new products in existing markets.
  15. 15. MARKET PRODUCT PENETRATION DEVELOPMENTPenetrating the market for Product A, B, Introduction of newC, D wherever leadership is facilities, customer friendlythere. service, attractive MARKET DIVERSIFICATION instruments etc. DEVELOPMENT The company may try providing consultancy for Telecom infrastructureIntroducing the Product B, C, D in newermarkets(New territorial region creation in developing countries in Middle East,within the country) South Asian regions. Nepal, Bhutan, Bangladesh TABLE: 1  Fixed Wire line Phones
  16. 16. 3.3 PEST ANALYSIS POLITICAL ECONOMICAL Permission of FDI (100%) India’s Per Capita holds higher tele- New Telecom Policy 1999 density potential Recommendations Of TRAI for Increasing demand for telephony growth in WLL phones strong association between service Policy changes for public-private sector growth and telecom partnerships development Unified Access Licensing Scheme SOCIAL TECHNOLOGICAL High purchasing power of people. growth of telecommunications new sources of employment infrastructure welfare enhancing consequences shortage of telephone lines and improved access in the fields of high telephone charges education, healthcare, Last Mile Connectivity governance Technological innovation in the form of CDMA and 3G. TABLE: 2The PEST analysis is a useful tool for understanding market growth or decline, and assuch the position, potential and direction for a business. A PEST analysis is a businessmeasurement tool. PEST is an acronym for Political, Economic, Social andTechnological factors, which are used to assess the market for a business ororganizational unit.
  17. 17. 3.4 SWOT Analysis INTERNAL ASSESSMENT OF ORGANISATION STRENGTHS WEAKNESS Highest commission structure (RIL- Hesitation among PCO owners in 30%, MTNL 15-18%) among adopting relatively new technology in national long distance operators. landline segment. State of art wireless technology. Resentment among business class due Hassle free installation. to billing problems with RIM. No security deposit Connectivity problems in some remote, Brand name “Reliance”. rural areas of Bihar, Uttar Pradesh. Sales backed by extensive customer Callousness on the part of LBA will care and after-sales services. effect customer satisfaction Prepaid PCO system, therefore, hassle free billing mechanism SWOT ANALYSIS OPPURTUNITY THREATS Curre nt te le-density o f Ind ia is only Pitted against well-entrenched 9.15%. 90.85% o f peop le still player like MTNL / BSNL which depend o n PCO s fo r their co mmunicatio n needs. control approximately 85% of PCO The co mpo und a nnua l gro wth rate market in metros, 90% of PCO of PCOs is 25 %. market in urban, semi-urban areas Curre ntly there are 16.55 lacs PCOs and nearly 100% in rural areas. in Ind ia, wa iting to be churned. Entrance of new players like Bharti Custo mer service standards o f its and TATA Teleservices ma in co mp etitor M TNL / BSN L is not very sa tisfacto ry Perceived saturation in PCO Prob le ms o f b illing in po st-paid market. systems TRAIs impending regulations EXTERNAL ASSESSMENT OF ORGANISATION CHART- 2
  18. 18. 4. ANALYSIS OF COMPANY STRATEGY 4.1 PORTERS’s FIVE FORCE MODEL SUPPLIER POWER High Competition Concentration of SuppliersBARRIERS TO ENTRY THREAT OF SUBSTITUTES RIVALRY High Initial Costs Moderate High Switching High (Price Sensitive Market) CostsrowthGovernment Regulations Low Exit Barriers High Switching CostsSpecialty Assets Required High Switching Costs Low Concentration Ratio BUYER POWER High Bargaining Power High Switching Costs CHART: 3
  19. 19. 5 ANALYSIS OF COMPETITIVE POSITION5.1 BCG MATRIXBCG matrix is based on the product life cycle theory that is used to explain how differentproducts should be prioritized in a company‘s portfolio. It has two dimensions: marketshare and market growth. The two dimensions are used to create a quadrant matrix inwhich all the products in a company‘s product portfolio are categorized into the fourcategories. This analysis helps avoid a strategy mistake made frequently that is ofmeasuring the performance of different products on the basis of a single criteria e.g.generic growth rate. This framework assumes that an increase in relative market sharewill result in an increase in generation of cash. 5.1.1 STARSThese are high growth products which have a large market share in fast growingindustries. In case of reliance Communications its FWT services can be called starssince they have a share of 21% of the market and are growing at the rate of 9%. Thisservice contributes 18% of total revenues and justifiably accounts for a large percentageof total investment. Continuous investments should be undertaken by the company toexpand market share of WLL services because this could lead to them becoming cashcows for the company in the future. 5.1.2 CASH COWSThese are the products which are leaders in markets which are slow growing but the companyhas a large share of the market. As a result these products generate large amounts of cash andprofits but because of the slow rate of growth of the market investments in these products
  20. 20. should be kept low. These products are the foundation for a company and provide the cashrequired to turn question marks into market leaders. In context of Reliance its cellular servicesare growing at 4% p.a., are the cash cow which form the foundation of the company. 5.1.3 DOGSThese are the products in which the company has a small share in a slow growing market. As aresult their contribution to overall revenues is limited and they can turn into cash traps becauseof money tied up in a business which has limited potential. Therefore the company should bebeware of expensive turnaround plans and should try to divest in these products. In case ofreliance its fixed line services can be called the dog for the company. 5.1.4 QUESTION MARKSThese are the products that are growing rapidly and thus consume large amounts of cash, butbecause they have a low market share they don‘t generate much cash. But if proactivemeasures are not undertaken to increase the market share they degenerate into dogs afteryears of cash consumption. Therefore the company should aim at either investing heavily toincrease market share or sell off to generate whatever cash it can. In case of Reliance there area number of products which can be put into this category for example ISPs and LPCs and WLLPCOs.A major limitation of this model is that it assumes market growth rate to be the only factor ofindustry attractiveness and relative market share to be the only indicator of competitiveadvantage. Therefore it ignores the strategy where a business might use a ―dog‖ to gain acompetitive advantage in other business units.
  21. 21. STAR QUESTION MARK  Fixed Wireless phone  Fixed Wireless Terminal Phone  PCOs  ISP and Broadband Services  GSM cellular service. CASH COWS DOGS  Cellular Services  Fixed Wire line Phones  Reliance India Card  Recharge Coupons TABLE: 36. STRATEGIES ADOPTED6.1 SEGMENTATION6.1.1 GeographicGeographic segmentation divides markets into different geographical units. There arefour main cellular segmentsMetro – the metropolitan areas of Mumbai, Delhi, Calcutta, and Chennai are under thiscategory of telecommunications circles and continue to lead.
  22. 22. Category A circles – mostly analogous to the states of India, comprising AndhraPradesh, Maharashtra, (category a leaders) Gujarat, Karnataka and Tamil Nadu.Category B circles – mostly analogous to the states of India, comprising Uttar Pradesh(east and west), Punjab (category B leaders), Rajasthan, Haryana, Kerala, Madhya,Pradesh, and West Bengal.Category C circles – mostly analogous to the states of India, comprising Bihar, Orissa,North-East Assam, Jammu and Kashmir, Himachal Pradesh, Andaman and NicobarIslandsIn context of Reliance PCOs, the company is specifically targeting non metros,highways, commercial areas in metros, small townships and low income clusters inurban areas for e.g. urban villages and industrial areas.6.1.2 DemographicIn demographic segmentation, the buyers are divided into different groups on the basisof variables such as their age, family size, family life-cycle, gender, income, occupation,education, religion, race, generation, nationality and social class. Consumer wants,preferences and usage rates are often associated with demographic variables. Therelevant categories that can be identified for Reliance PCOs are senior citizens,unemployed youth, small shop owners, kirana stores and existing PCOs owners6.2 TARGETINGReliance Communications current targeting approach is a mass-marketing method thattries to address the needs of the entire market and widen its subscriber base. In massmarketing, the seller engages in mass production, mass distribution, and masspromotion of one product to all its buyers. Mass marketing creates the largest potential
  23. 23. market, which leads to the lowest costs, which in turn can lead to lower prices andhigher margins.Reliance successfully implemented this strategy and while it did help Reliance in expanding itscustomer base, its strength and spread remained limited to the Category C regions (See table2). The apparent popularity of Reliance Communications in this category is due to its positioningin the market as a “Common Man’s Phone”. Dhirubhai Ambani had dreamed of “Roti, Kapda,Makaan aur Mobile” which clearly reflects the strategy, adopted by Reliance. The low-tariffplans, low fared prepaid and postpaid offers have brought Reliance close to the price consciouspeople.They focus on few key aspects while promoting - Next Generation technology Widely available (Able to connect 90% of India‘s population) Low tariff rates to attract a wide customer base Range of handsets offered with Reliance connections (Black and white handsets, colour handsets with camera, video camera phone, camera watch phone, PDA colour phone) Special offers for making calls to the Gulf, USA and Canada6.3 POSITIONINGPositioning can be defined as the act of designing the company‘s offering and image tooccupy a distinctive place in the mind of the target market. The positioning of the targethas to be such that a majority of the target market segment identifies with it.
  24. 24. 7. 4 P’S OF MARKETING7.1 THE FIRST “P” PRODUCTThe action plan of launching a new product includes a decision on the four Ps ofproduct, place, price, and promotion as well as the three Ps of services namely people,processes and physical evidence. Also it is not a pure product or a pure service that isbeing marketed. In terms of product Reliance is offering tangible good withaccompanying services, with the handsets being tangible goods and their mainstaybeing the services. Now we can make this tangible on the basis of place, people, price,and communications material.Historically the thinking was that a good product will sell for itself. However there are nobad products anymore in today‘s highly competitive markets. Therefore it‘s inevitablenow for a company to ignore on the various aspects of a product. We have tried toanalyze the product of Reliance Communications i.e. ‗WLL‘ on the basis of followingparameters:QualityWhen we talk about the quality of any telecom service we basically focus on followingaspects:
  25. 25. Voice quality-The Voice quality in CDMA based Networks is much superior as compared to GSMNetworks. Therefore Reliance WLL has a technological edge over its GSMcounterparts.Data Transfer Rate-The Data rates throughput available to a WLL user using a 3G handset, being provided byReliance is much higher than the data rates provided by the GSM Operators using GPRS, a 2.5G technology inferior to Reliance 3rd Gen technology. So for a layman, it may mean thatwatching a Video Clipping or a multimedia application on a CDMA Handset will be much morefun as compared to the present day GPRS ServicesStrong Optical Backbone-Reliance, being an operator with Pan India presence, and possessing a strong optical Backbonespread across the country, is expected to deploy and provide next generation telecom servicesquicker and cheaper than any other private operator in the country.APPEARANCEAppearance and design, however, still remains the users first turn-on trigger. Reliance WLLphone come as a refuge to the market as they are targeting the various segments of the society.The low end model starts for as low as Rs. 2000 and the range goes up to Rs. 30000. Thevarious phone models available are quality phones being manufactured by the top firms likeNokia, Motorola, Samsung and LG etc.BRANDReliance Communications is the outcome of the late visionary Dhirubhai Ambanis (1932-2002)dream to herald a digital revolution in India by bringing affordable means of information and
  26. 26. communication to the doorsteps of Indias vast population. Reliance Communications Ltd., anAnil Dhirubhai Ambani Enterprises group company, is Indias largest private information andcommunications services provider, with a subscriber base of over 11 million. RelianceCommunications has established a pan-India, high-capacity, integrated (wireless and wire line),convergent (voice, data and video) digital network, to offer services spanning the entireCommunications value chain.SERVICEReliance Communications network is a pan India, high capacity, integrated (wirelessand wire line) and convergent (voice, data and video) digital network, designed to offerservices that span the entire Communications value chain - infrastructure, services forenterprises and individuals, applications and consulting. The network is designed todeliver services that will foster a new way of life for a New India.SUPPORTThe major focus for any company in the service sector is how satisfied their customer iswith the service being provided by the company. The service doesn‘t end with by sellingthe phone to the customer but also solving the concern, difficulties, queries andcomplaints of the customer. Reliance Communications has some innovative featureslike R-World apart from the usual customer support services being provided by othertelecom players. Reliance has a 24 by 7, 365 days a year, customer service in ten regionallanguages to ensure consumers have a smooth experience.7.2 THE SECOND “P” PRICEHow much are the intended customers willing to pay? Here we decide on a pricing strategy - do not letit just happen! Although competing on price is as old as mankind, the consumer is often still sensitivefor price discounts and special offers. Price has also an irrational side: something that is expensivemust be good. Permanently competing on price is for many companies not a very sensible approach.
  27. 27. Reliance India Mobile has revolutionized the Indian mobile telephony market throughunique pricing models. In fact, thanks to Reliance‘s innovative pricing, tariffs in Indiahave fallen across the board by over 70 per cent, making it the worlds lowest-costmobile market today. India was the worlds highest cost market in the nineties.As of now, RIM has concentrated in terms of its pricing in the economy to medium valuesegment. The products with high and good value have not been very successful. Butthat was partly because at that time, reliance was more than just a service provider,dealing in handsets and post paid plans and selling customized solution. Now, with amaturing market, as people are moving to upgrades reliance seriously needs to lookinto the high value segment. By high value we mean high quality and high pricesegment. A high service in terms of not just the value adding features but also thequality of your basic services. Airtel has projected itself as a service provider withsuperior network coverage. Reliance has had issues in the past with its billing and alsoits traffic congestion which has left many customers complaining. And as they look toexpand into new segments that are more life style focused and brand conscious,negative word of mouth publicity is the last thing they would want. Side by side, theyalso need to look for the latest offerings in the market to lure and retain customers. Thefirst movers advantage they had accrued is now eroded as the competitors have comeout with similar features and services like internet surfing, cricket scores and multimediacontent in both GSM as well as CDMA segments. So reliance needs to heavily invest indeveloping new and unique differentiating features and products to project itself as thebetter option to the upwardly mobile youth. Like Airtel‘s Blackberry initiative. Eventhough Airtel is fighting reliance bitterly in terms of the least priced services to theconsumers, having a high end limited sales volume product in its range gives it asuperior image because of its aspiration power in the minds of the affluent youth.In terms of the market pricing is concerned, RIM is faced with a unique situation.Although it is aiming for market penetration, the usual low pricing strategy will not bevery successful as all the rivals are offering services at a very competitive rate anddrastic undercutting will only lead to erosion of profit margins. Also the market isgrowing rapidly and further lowering of prices will not fuel the growth further.
  28. 28. SCHEMES:TARIFF PLAN FW FW FW FW FW FW 150 290 02 03 04 600RENTAL(RS./MONTH) 150 290 500 1000 1500 600CLIP CHARGES 50 - - - - -FREE CALL UNITS 50 150 450 1000 1750 2000FREE 60 180 495 1000 1575 600TALKTIME(RS/MONTH)RATE PER CALL UNIT 1.20 1.20 1.10 1.00 0.90 0.30:TO RELIANCERS/CALL UNIT 1.10:OTHERSSECURITY FEE 2800 2800 2800 2800 2800 2800 TABLE: 4Amount of sales (per month): FWP/I PhoneAREA FWP(SALE IN UNIT) I FONE(SALE IN UNIT)MAYUR VIHAR 25 20ADHCHINI 20 20GREEN PARK 30 25
  29. 29. SAKET 25 25PREET VIHAR 25 20 TABLE: 57.3 THE THIRD “P” PLACEAvailable at the right place, at the right time, in the right quantities? Some of therevolutions in business have come about by changing Place. We have focused ondifferent attributes related to reliance place strategy in successfully removing thebottlenecks associated with the timely availability of its products through a nationwidenetwork of Web Worlds.7.3.1 LOCATIONSReliance Web World is a countrywide network of retail outlets offering a host of state-of-the art communication and information services along with food and beverages in amodern ambience. It probably is also the worlds largest network of public accessbroadband centre. A total of 240 Web Worlds are operational in 111 cities and townsacross India. The number of Web Worlds in this network will further increase to covernearly 700 towns and cities. All Web World outlets have three components: CustomerConvenience Centre, Broadband Centre and Gourmet Café.7.3.2 CHANNEL MEMBERS-The following are the desirable features for sales people:Competence First and foremost is the competence of the sales force. Reliance has had billing problems in the past and competent handling of all customer complaints will be of utmost importance.
  30. 30. Courtesy RIM has exclusive retail outlets, which can be monitored, but newer expansion plans will mean selling through other retailers for prepaid cards.Credibility This is a major issue as the previous policies were not very transparent and this has generated a negative perception for Reliance.Responsibility Problems of area distribution between different franchisesCommunication Continuous communication is needed for promoting newer policies and promotion schemes. Higher flexibility given to franchisees in offering customized plans.7.3.3 DISTRIBUTION CHANNELReliance‘s FWT PCOs are distributed through a network local business associates(LBA). Every district is divided into a number of zones each of which is headed by azone PCOs lead. In every zone there is a point of sales, the LBA who acts as theinterface between the company and the local PCOs operator. The LBA gets in contactwith existing and potential PCO owners and after they decide to take a PCOconnection from Reliance, he helps to arrange for the entire package which consists ofthe phone instrument, FWT, billing machine, telephone booth and patch panel antenna.7.3.5 MARKET COVERAGEReliance is the second largest player in FWT market which is growing at fast rate of5.5%. The Lead player in the market is Tata Teleservices. But Reliance has shownmajor improvement in the market coverage and has grown its share from 34.15% inApril‘05 to 37.12% in Oct.‘05.
  31. 31. 7.4 THE FOURTH “P” PROMOTION(How) are the chosen target groups informed or educated about the organization and itsproducts? This includes all the weapons in the marketing armory - advertising, selling,sales promotions, Public Relations, etc. While the other three Ps have lost much ofthere meaning in todays markets, Promotion has become the most important P to focuson.Since it‘s a highly competitive sector therefore Reliance had to work really hard on itspromotional schemes in order to grab the market share.But the most important tool that Reliance should really be considering is the salespromotion as a strategy to reach out to a mass audience and grab attention. And also toarouse the interest of the target segment in the product this strategy will be very useful.Just like what Nokia did sometime back for the N-gage and what the two wheelercompanies have been successfully doing for a long time, RIM should come up with roadshows as soon as they come out with their newer models to generate curiosity in theminds of the people. Online games as suggested should be an important feature of themobiles and online one to one competitions can be organized for promotional schemes.This is nothing new for Reliance Communications as they had done this for thepromotion of their Web world broadband services also. Partnering with KBC like gameshows will also be a big draw as Airtel have successfully demonstrated. Another charmfor the youth is the concerts, technology fares etc and organizing these as well aspartnering as sponsors with such events in colleges and expos can also are used todraw attention.
  32. 32. Fig: 118. CURRENT MARKET SCENARIO FOR WLL PHONES IN INDIA8.1 CDMA Mobile SegmentCDMA subscriber‘s base grew 5.7% mom to 14.49mn with Tata contributing a chunk ofadditions in subscriber base. Tata witnessed a whopping 20.6% mom growth insubscriber base, touching the 2.5mn mark. Reliance witnessed a sluggish 3.2% growth
  33. 33. in the month of October. However, it maintained its market leadership with a totalsubscriber base of 11.78mn.CDMA subscriber dataGroup Subscribers as of Additions Subscribers as ofCompany September05 In Oct October05 (%)GrowthReliance 11,414,478 366,888 11,781,366 3.2Tata 2,055,865 423,265 2,479,130 20.6HFCL 60,292 542 60,834 0.9Shyam 28,182 43 28,225 0.2MTNL 154,301 (11,296) 143,005 (7.3)Total 13,713,118 779,442 14,492,560 5.7Source: AUTSP Table: 6Market share of CDMA operators CDMA share of net additionsGraph: 1 Graph: 2
  34. 34. 8.2 Fixed Wireless Terminals (FWT)FWT continues to be one of the fastest growing segments with 5.5% mom growth. Tatamaintained it leadership position in FWT segment with 61% market share amongstprivate players. In net additions, too, Tata led with 55% share. However, Dot‘s latestruling removing FWT service from the ambit of basic service and instead terming it a‗limited mobile service‘ liable to ADC levy may be a serious blow to the growth of thissegment.Group Subscribers as of Additions Subscribers as ofCompany September05 In Oct October05 (%)GrowthTata 3,219,643 158,437 3,378,080 4.9Reliance 1,921,692 128,972 2,050,664 6.7Bharti 23,999 (265) 23,734 (1.1)HFCL 33,043 1,753 34,796 5.3Shyam 26,915 232 27,147 0.9Total 5,225,292 289,129 5,514,421 5.5 Fig: 12We compared the above figures with the figures of March‘05 and realized that reliancemarket share has gone up from 34.15% to 37.2% in six months which shows that thereis both potential in the market as well as in the company itself to increase its marketshare further.
  35. 35. Fig 13Initiatives:Introduction of Low cost telephony by launching Free Incoming service which took the telecommarket by stormAchievements:Brought the mobile phone to the common man by introducing Monsoon Hungama and HappyDiwali offers in 2003Milestones:Became the second largest Mobile service in the country with more than 1 crore subscriberswithin 2 years of launch.
  36. 36. ChannelInitiatives:Introduced the Dhirubhai Ambani Entrepreneur scheme to involve the middle class to partnerReliance and profit from it.Achievements:Built enduring relationships with people cashing in on the name of Reliance.Milestones:Elevated dealers to the position of business associates giving them more importance andresponsibilities which formed the backbone of the channel.CostsInitiatives:Low cost telephony ringing the mobile in the ears of the common man.Achievements:Instrumental in bringing down call rates across the entire mobile phone sector.Milestones:Still riding the crest of the tide with large volumes of subscribers and subsequent high returnsServiceInitiative:Spread a network of Reliance Web worlds and Web world Express providing One-Stop shopsfor all customer needs.Achievements:
  37. 37. A dedicated sales and service staff took care of the customers and led to efficient managementdespite swelling subscriber figuresMilestones:Web world home to a variety of Virtual courses, Gaming Zones and Video conferencing facilities.First one of its kind in the countrySystemsInitiative:Introduction of C.D.M.A.1X. Technology into the Indian market on a large scale which resultedin high quality wireless service at low costs. Add to that a 60000 km fiber optic backbonenetwork.Achievements:Combining of Data and Voice service done on an extensive scale with C.D.M.A. 1X technology.Instrumental in bringing Mobile to the remotest corners of the country (Regulations notwithstanding)Milestones:Reliance possesses 74 Mobile Switching Centres (MSC s) and about 7200 Base TransceiverSubsystems (BTS sites), providing a 98.6% Quality of Service (QOS) rating for areas undercoverage.BrandInitiative:India‘s most reliable brand added another dimension by entering the telecom market. Its namepreceded Reliance but the brand name Communications came into prominence.Achievements:
  38. 38. Kar Lo Duniya Mutthi Mein, having the world in your palms, caught the imagination of peopleand launched Reliance India Mobile.Milestones:Ek Soch thi, Ek Sapna Thaa, Dhirubhai‘s dream of a call at the cost of a postcard was realizedand entire India called out Mujhme Hai Wo Baat.9. CUSTOMER SATISFACTIONWe were more concerned about the factors that influence the consumer before choosing anynew connection or switching from the present connection. We rated the different attributes onthe scale of (1-5). We found the following results. Attribute importance (1-5) 4.50 4.40 4.30 4.20 4.10 4.00 3.90 3.80 3.70 3.60 3.50 3.40 Network Easy voice quality customer Billing Coverage availability care systemThe Network Coverage was the factor that concerned the people to the greatest extent.However the factors like the Billing System and the Voice Quality were also important. Thesefactors were the desired attributes by any user.
  39. 39. Calculated Ratings on 5 Point Scale 4.50 4.00 3.50 Reliance 3.00 Airtel BPL 2.50 Idea 2.00 Hutch 1.50 BSNL 1.00 Tata indicom 0.50 0.00 Network Easy voice customer Billing Coverag availabili quality care system e ty Reliance 3.75 3.56 2.50 3.88 2.81 Airtel 3.64 3.46 2.46 3.93 3.08 BPL 4.00 3.00 3.00 4.00 3.00 Idea 3.20 3.60 3.80 3.80 4.00 Hutch 3.80 3.80 3.40 3.00 3.75 BSNL 4.16 3.89 3.05 2.89 3.53 Tata indicom 4.00 3.00 4.00 3.00 2.00 Graph: 6This showed that Voice Quality and Billing System were the two areas where Reliance hadperformed pretty badly against its competitors. We came to know that the Billing System byReliance is said to have many discrepancies. Here Reliance really needs to work upon.
  40. 40. The Road Ahead P.B.O. The new age P.C.O. From RelianceReliance Communications Ltd is looking at the successful public call office (PCO) modelfor delivery of e-governance initiatives to the rural areas.In the nextgen PCO, Reliance will use broad band to deliver the services, and will beaptly named Public Broadband Office (PBO). Prakash Bajpai, president, RelianceCommunications, said the G2C (government to consumer) initiative on e-governancewill popularize the use of broad band. However, he neither had the time-frame forReliance‘s projected PBO nor the investments needed.―The PBO will need applications like e-mail, transactions, filing of returns, sales tax orexcise duty filing or any other work requiring government interaction. Additionally, wewill have to persuade government for spectrum availability and dedicated carriers fordata will be needed. Investments will be needed for the creation of base stations, too,‖Bajpai said. Meanwhile, pushing its broad band service offering, RelianceCommunications will add another eight products to its existing 12. The new products, tobe launched in another two months time, will include collaborative services andconsumer Internet.The bouquet of collaborative products will include audio video and web conferencingservices while consumer offerings would include health, games recreationIn an effort to improve its customer care services, the telecom services provider is set tolaunch Web World Express (WWE). These franchised outlets will initially attend tocustomer care issues and then expand to include broad band services.
  41. 41. Reliance Netway:Broadband TV at your homeAs far as the broadcast sector is concerned however, it is Reliances broadband plans,Ethernet broadband Netway for the home user in particular, that is the focus ofattention. Netway is still nearly a year away from commercial launch, clarifies Khanna, though a "test run" of the service that "has no parallel anywhere in the world except in Italy on a very small scale" is already on at the Reliance centre in Jamnagar, Gujarat. 3,000 households of Fig: 15Reliance employees at the Jamnagar oil refinery have been wired up for this purpose,says Khanna.In another two months, the testing process will move up a gear when 5,000 homes ofReliance Communications employees (there are 15,000 of them working in DAKCalone) get wired up.Suffice to say that what Reliance is committingto give its home user customers is 100 mbpsbandwidth routed through a prototype set topbox that will triple up as a TV remote, a phone,a keyboard and even a karaoke microphone. Reliances set-top-boxFig: 16With this kind of bandwidth capacity, the question is of course what is the sort of contentthat will be made available for home users. According to the literature provided, aside
  42. 42. from the obvious high speed Internet which also offers Voice over IP telephony, therewill also be movies on demand, music on demand and digital TV. A vast library ofmovies with multiple language subtitles as well as an extensive music listing is beingcompiled at the moment. Netway is also promising interactive TV with over 160channels Reliance Data CenterReliance Data Centers are truly world class Level 3 IDC facilities with a total area of205000 sq. ft. located at the sprawling Reliance Communications Headquarter campus,Navi Mumbai and at Bangalore. Reliances data center project further includes settingup of world-class data centers in 6 major cities in India covering approximately 5,00,000sq.ft. area in the next 2 yearsThe Data Centers has been internationally benchmarked with respect to physical andnetwork security, infrastructure, facilities, network connectivity and its operations, whichachieves and surpasses the Level 3 world standards. The Data Centers are connectedto Reliances country wide optic fiber based IP network with terabytes of capacity havingpoints of presence at more than 700 cities. The data centre is further connected to 52countries including US, UK, Mid-east and Asia-Pac through Flag Telecom backbone(Reliance Communications‘s group company), other undersea cable systems and arehaving private peering relationship with the largest Tier 1 ISPs and public peering atmore than 15 Internet Exchange points across the globe. There also exists peeringrelationship with domestic ISPs on STM-1 bandwidth levels.
  43. 43. Recommendations  Reliance has for long been perceived as the common man‘s phone. It needs to come out of the mid-segment trap by catering to the high end subscribers who bring in larger arpu  It is highly important to retain customers as sooner or later the market will saturate and the low call tariffs will prompt subscribers to switch operators  With uniform number across operators being a possibility in the near future, existing subscribers will be inclined to move to an operator offering better service, it is highly recommended that Reliance pulls up its socks and improves its service quality which is lacking in certain areas like network coverage and billing  Reliance has the most extensive private network in the country and needs to consolidate its position by improving its standards and living up to its famous brand name

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