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Final report sip at reliance communications ltd. (2)
Final report sip at reliance communications ltd. (2)
Final report sip at reliance communications ltd. (2)
Final report sip at reliance communications ltd. (2)
Final report sip at reliance communications ltd. (2)
Final report sip at reliance communications ltd. (2)
Final report sip at reliance communications ltd. (2)
Final report sip at reliance communications ltd. (2)
Final report sip at reliance communications ltd. (2)
Final report sip at reliance communications ltd. (2)
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Final report sip at reliance communications ltd. (2)
Final report sip at reliance communications ltd. (2)
Final report sip at reliance communications ltd. (2)
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Final report sip at reliance communications ltd. (2)

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  • 1. 5/14/2010 A REPORT ON VALUE ADDED SERVICES (VAS) At BY: (VANSHAJ ANAND) 09BSHYD0956 RELIANCE COMMUNICATIONS LIMITED 0
  • 2. Value Added Services at Reliance Communications Ltd. A REPORT ON VALUE ADDED SERVICES (VAS) BY: (VANSHAJ ANAND) 09BSHYD0956 RELIANCE COMMUNICATIONS LIMITED A Report Submitted In Partial Fulfillment of the Requirements of MBA Program of IBS HyderabadDistribution List:Mrs. Chanda Mahajan (Manager –Value Added Services, RelianceCommunications Ltd.)Dr. Manas Ranjan Tripathy (Professor IBS, Hyderabad)Date of submission: 14 May, 2010IBS Hyderabad Page 1
  • 3. Value Added Services at Reliance Communications Ltd. AUTHORIZATIONThis is to certify that the project report entitled “Value Added Services” is submitted toMarketing department, Reliance Communications Ltd by Mr. Vanshaj Anand in the partialfulfillment of the requirement of MBA program at IBS Hyderabad. This study is a bonafideresearch work carried out by for a period of 14 weeks from 22-02-2010 to 21-05-2010.Date: 14.05.2010 Chanda MahajanPlace: New Delhi (Manager- Value Added Services)IBS Hyderabad Page 2
  • 4. Value Added Services at Reliance Communications Ltd. ACKNOWLEDGEMENTSThrough this report, I take the opportunity to express my sincere gratitude to all those who havehelped me in making my training at Reliance Communications Ltd. (Delhi circle), a success.First of all I would like to thank the academic fraternity at, IBS Hyderabad, for having such asystem in place, where students are given opportunities to learn about their areas of interest, aspart of training and internship programs.I would like to thank my faculty guide Dr. Manas Ranjan Tripathy, Faculty Member IBS,Hyderabad, without whom it would not been possible for me to undergo training at RelianceCommunications Ltd. His regular guidance and help has given shape to my project and evolvedit to its current being. He has been a source of inspiration and motivated me to perform to thebest of my abilities.I express my deepest sense of gratitude towards Mrs. Chanda Mahajan, my guide and mentor atReliance Communications Ltd, for taking time out of her busy schedule and helping me, in everypossible way, to proceed with my work. She has been a constant help throughout the project andan impartial leader. I would like to thank her for her selfless help and cooperation at every step.At last, I would like to thanks all the TEAM MEMBERS of the office, who had contributed incompletion of the project. I acknowledge their efforts in making me understand the variousbusiness functions at Reliance Communications Ltd and their guidance for developing thedeliverables to the organization.IBS Hyderabad Page 3
  • 5. Value Added Services at Reliance Communications Ltd. ABSTRACTIn today’s business environment the world is shrinking rapidly. Companies now are not restrictedby boundaries of countries. Technology is the main driving factor behind this emergence of aclosely knit business world. The need for faster communication and decision making is gainingimmense importance. Moreover, easier access to the web has been very effective for thecompany as well as its employees. In this emerging conquest for highly customized products,there has been a growing demand for efficient tools for processing the products and its relateddocuments. All functions – such as sales, marketing, manufacturing, service, and even humanresources affect not only the bottom line but also a company’s financial integrity.The main aim of this project is to understand the various functions of marketing division in theday to day business activities in the telecom sector for its Value Added Services. It also aims toidentify the concern areas after an in-depth analysis of the company’s operations and recommendsolutions for the same. It stresses on analyzing the key aspects of marketing like consumerbehavior patterns and revenue generation. It requires integration of various parameters needed toanalyze the possibilities of market segmentation in telecom sector. It mainly focuses onincreasing ARPU and decreasing customer churn. It also takes a step forward by looking intovarious strategies adopted by Reliance Communications to remain affordable by the customersyet generate high revenue.IBS Hyderabad Page 4
  • 6. Value Added Services at Reliance Communications Ltd. TABLE OF CONTENTSAuthorization iiiAcknowledgement ivAbstract v1. Objective 102. Introduction 11 2.1 Background 11 2.2 Purpose and Scope 12 2.3 Methodology 133. Review of Literature 154. Industry 18 4.1 Introduction 18 4.2 Market Structure 19 4.3 Competition in the Market 205. Company Profile 22 5.1 Introduction 22 5.2 Vision 24 5.3 Business Mix 246. Value Added Services 25 6.1 Introduction 25 6.2 Need for MVAS 26 6.3 Understanding of Different MVAS Categories 28 6.4 Pillars of MVAS 31 6.5 Understanding Role of Different Entities 33 6.6 MVAS Access Modes 357. VAS Market Analysis 37 7.1 Introduction 37 7.2 VAS Access Devices 37 7.3 Reliance Vs Competitors 39IBS Hyderabad Page 5
  • 7. Value Added Services at Reliance Communications Ltd.8. VAS Promotion 46 8.1 Introduction 46 8.2 Promotional Strategy Adopted for the Project 48 8.2.1 Campaign Design Through SAS Marketing Automation 48 8.2.2 Tele-Calling 55 8.2.3 Up-Selling 58 8.2.4 Training to Customer Touch Points 609. Market Research for Retail Integration 63 9.1 Research design 63 9.1.1 Type of Research Design 63 9.1.2 Information Needs 63 9.1.2.1 Data collection from secondary sources 63 9.1.2.2 Data collection from primary sources 64 9.1.3 Measurement and scaling procedure 64 9.1.4 Questionnaire development and pretesting 64 9.1.5 Sample design 65 9.1.6 Field Work 66 9.1.7 Data analysis 6610. Market Research to analyze Customer Behavior for VAS 74 10.1 Introduction 74 10.2 Methodology 74 10.3 Research Design 75 10.3.1 Type of Research 75 10.3.2 Information Needs 75 10.3.2.1 Data collection from secondary sources 75 10.3.2.2 Data collection from primary sources 76 10.3.3 Measurement and scaling procedure 76 10.3.4 Questionnaire development and pretesting 76 10.3.5 Sample Design 77 10.3.6 Field Work & Data Collection 78 10.4 Analysis 79 10.4.1 Data Analysis 79IBS Hyderabad Page 6
  • 8. Value Added Services at Reliance Communications Ltd. 10.4.2 Industry Analysis-Porter’s five forces Model 96 10.4.3 SWOT Analysis 9711. Findings 9812. Conclusion 10113 Recommendations 10314. Annexure 10715. References 10916. Glossary 117LIST OF FIGURESFig. no. Description Page no. 4.1 Top 10 countries by number of subscribers 19 4.2 Market share of all operators in India 21 5.1 Top 10 CDMA operators in the world 23 5.2 Business mix of Reliance ADAG 24 6.1 Pillars of MVAS 31 6.2 VAS Revenue Distribution 34 6.3 VAS Revenue Access Modes 36 7.1 GPRS Penetration 38 8.1 VAS Promotional Strategy Adopted for Project 48 8.2 Strategy for Retail Integration 60 8.3 Steps Devised for Training Customer Touch Points 61 9.1 Total footfall 67 9.2 Retailer’s Knowledge for VAS 67 9.3 Retailers fully aware of VAS 68 9.4 Customers that come enquiring for VAS 68 9.5 Ususal VAS activations 69 9.6 Major VAS service 69 9.7 Retailer will promote if given incentives 70 9.8 Incentive expected 70IBS Hyderabad Page 7
  • 9. Value Added Services at Reliance Communications Ltd. 9.9 Retailers Total Footfall 71 9.10 Percentage of Reliance Customers Visit per day / Retailer 72 9.11 Growth Opportunity 73 9.12 Awareness amongst retailers 73 10.1 Methodology for research 74 10.2 Respondent’s Age Group 79 10.3 Respondent Occupation 80 10.4 Customer’s Average monthly Bill 81 10.5 Customer’s Average monthly VAS expenditure 82 10.6 Subscriber Type amongst customers 83 10.7 Age & Awareness of value added services Cross tabulation 84 10.8 Occupation & Awareness of value added services Cross tabulation 84 10.9 SPSS output-Scree Plot 92 10.10 Relative importance of factors 95 10.11 Porter’s five forces Model 96 10.12 SWOT Analysis of Reliance Communication Ltd. 97 13.1 Strategy for Creating Awareness 104IBS Hyderabad Page 8
  • 10. Value Added Services at Reliance Communications Ltd.LIST OF TABLESTable no. Description Page no. 7.1 Data Platform Comparison 44 9.1 Sampling Design 66 9.2 Retailer’s total footfall 71 9.3 Percentage & count of reliance customers 72 10.1 Sampling design 78 10.2 Customer’s age group 79 10.3 customer’s occupation 80 10.4 Customer’s Monthly bill 80 10.5 customer’s monthly VAS expenditure 81 10.6 Network & subscriber type cross tabulation 82 10.7 Age & Awareness of value added services Cross tabulation 83 10.8 Occupation & Awareness of value added services Cross tabulation 84 10.9 VAS Awareness with different age groups 85 10.10 Frequency distribution table for chi square test of Independence 86 10.11 SPSS output-Correlation Matrix for drivers of Value Added Services Customer 87-88 Behavior 10.12 SPSS output -KMO and Barlett’s Test 89 10.13 SPSS output-Eigen values and variance explained 90 10.14 SPSS output-Communalities before and after extraction 91 10.15 SPSS output-Component matrix before rotation 91-92 10.16 SPSS output-Rotated component matrix 93 10.17 Relative Importance of the factors 94-95 11.1 Factors & Variables after data reduction 99 13.1 Recommendation for Data platform 103 13.2 OBD/Tele-Calling calculation 104 13.3 target set example for RMS’s 105IBS Hyderabad Page 9
  • 11. Value Added Services at Reliance Communications Ltd. 1. OBJECTIVEThe project has following objectives: To understand the significance and benefits of VAS (Value Added Services) in revenue generation. To study and analyze Value Added Services of Reliance and its major competitors, and learn the basics of promotions for VAS. To make recommendations pertaining to improvement of VAS. Up-Selling VAS and its integration with the Retail Network of Reliance Communications. To carry out a market research with the help of a survey and a questionnaire with Reliance retailers and analyze the data to help the organization strategize VAS integration with the retail network. To carry out a market research with the help of a survey and a questionnaire with Reliance customers and analyze the data to help the organization strategize VAS promotions. To make effective use of various management and statistical tools and segment the customer base for effective target and promotion.IBS Hyderabad Page 10
  • 12. Value Added Services at Reliance Communications Ltd. 2. INTRODUCTION2.1 BACKGROUNDIndia, like many other countries of the world, has adopted a gradual approach to telecom sectorreform through selective privatization and managed competition in different segments of thetelecom market.To begin with, India introduced private competition in value-added services in 1992 followed byopening up of cellular and basic services for local area to private competition. The TelecomRegulatory Authority of India (TRAI) was constituted in 1997 as an independent regulator in thissector. Competition was also introduced in national long distance (NLD) and international longdistance (ILD) telephony at the start of the current decade.Despite asymmetry in initial market endowments between public sector incumbents and privateoperators, the act of opening up of the market unleashed dynamism that was hitherto latent in thesector.Three types of players now exist in Telecom Industry India community - • State owned companies like - BSNL and MTNL. • Private Indian owned companies like - Reliance communications and Tata Teleservices. • Foreign invested companies like – Vodafone, Bharti Tele-Ventures, Escotel, Idea Cellular, BPL Mobile, Spice Communications etc. The Indian mobile services market is highly competitive with six to eight players operating ineach of the 23 telecom circles that the country is divided into. The intensity of competition hasincreased in recent months following the launch of GSM services by Reliance Communications(RCom) and Tata DoCoMo, CDMA services by Sistema Shyam; and the continuing pan-IndianGSM rollout by Aircel, Idea Cellular (Idea), and Vodafone Essar (Vodafone). The competitiveintensity is expected to increase even further as new licensees launch their services and MobileNumber Portability (MNP) is introduced in India.The recent increase in competition in the Indian mobile services market is evident from theaggressive tariff plans being introduced by players, a move that has led to a decline in theaverage revenue per user (ARPU), revenue growth, and profitability of the industry. Besides,profitability of the mobile service providers is also being impacted by the increasing share of lowARPU subscribers in incremental additions, the bulk of which is happening in the semi-urbanand rural areas where the mobile penetration rates are still low. While India remains one of the fastest growing mobile services markets globally by subscriberaddition and still presents an opportunity for further growth, the rates of revenue growth andIBS Hyderabad Page 11
  • 13. Value Added Services at Reliance Communications Ltd.margins of the mobile service providers are expected to decline as the intensity of competitionincreases further.Although some of the incumbent operators with strong financials, extensive networks, and largershare of high paying customers would be better positioned to withstand the kind of competitivepressures anticipated, high capital expenditure on 3G may well lead to continued negative freecash flows and push up funding requirements. Intensified competition and the aggressive pricingstrategies adopted by the existing operators could challenge the sustainability of the new entrantsas breaking even at lower tariffs would take longer.This would also imply delay in the generation of positive cash flows for the new entrants. Giventhis scenario, it is likely that the Indian mobile services market would see some consolidationover the medium to long term.2.2 PURPOSE AND SCOPEThe main purpose of this project is to understand the various verticals of marketing function atReliance Communications for its Value Added Services (VAS). An in-depth analysis of the dataplatform and customer base was done based on the primary data available, in order to gaininsights into the consumer behavior patterns. Based on these patterns further studies wereconducted to develop revenue generating models for the company.This project helped me in gaining insights about how a telecom firm is dealing with the existingprice war, declining revenues and increasing competition and the importance of VAS in revenuegeneration. It is an opportunity for me to be a part of the corporate world. Further, it will alsohelp in reaching my objective of understanding and analyzing the telecom industry as a whole.The scope for doing this project is limited to the geographic boundaries of Delhi and NCR andthe data that is available while conducting the studies. The resources available are utilized to theoptimum. It will help me to understand the highly competitive environment and means oftackling the surmounting pressure over the telecom sector.IBS Hyderabad Page 12
  • 14. Value Added Services at Reliance Communications Ltd.2.3 METHODOLOGYTo achieve the objective of the project following methodology will be used.Research Work • Understanding the work though communication with its employees. • Tele calling customers in order to gain insights into their feedback • Visiting various Reliance mobile stores and reliance world stores to gain feedback • Reading annual reports of company and its competitors. • Reading papers published by ICRA, IMRB and other market research firms, on industry analysis of telecom sector. 1. VAS Market Analyses • Understanding the project through communication with its employees. • Learning about the VAS products and services by going through R-world i.e. the Data Platform of Reliance/ Voice Portal/ CRBT and SMS- services, to know and understand the product. • Comparison with other operators regarding their Data Platform and Voice Portal. 2. VAS Promotion • Out Bound Dialing (OBD) and Message promotion to customer’s MDN i.e. creating a SMS Blast. • Segregating various customers on basis of their current balance and promote accordingly, for which queries are run on Microsoft Access and respective MDN’s are retained for OBD and Promotional Messages. • Going through daily customer base for in-bound and out-bound calls and check the conversion rate. • Designing campaigns on statistical analyses software i.e. SAS Marketing Automation, for promotional messages. • Visit INDIA Calling which is the Reliance Communication’s approved Tele-calling agency and check the work flow and help improve efficiency and effectiveness of contactibility of customers and promote VAS more effectively to increase the conversion percentage.IBS Hyderabad Page 13
  • 15. Value Added Services at Reliance Communications Ltd. 3. Up-Selling VAS through Retail Network & Training to customer touch points for promotion of VAS • Field work which involves visiting various locations under each cluster, all around the city and communicate with RMS’s and RW’s. • Visiting various sales channels and motivate them to push for sales and help with any of their queries regarding VAS. • RETAIL Integration: Reaching the retail network and integrating it with VAS and introduce sales through this retail network, motivating them through various incentives. Initialize the process with a survey research and analyze the retailer’s behavior followed by the launch of e-Retailer. • Training to Customer Touch Points for promotion of VAS and hence increase the sales. It involves setting up a training program for all the customer touch points at the head office (Delhi circle) and train them about VAS through presentations and discussions and push them for sales and revenue generation through VAS. • Field visits to various channels and collecting feedback, report the Head Office. This helps in keeping a track of where the project is heading through the retail channel. 4. Market Research to analyze Customer Behavior regarding VAS • Designing of the questionnaire aiming at the awareness, liking and usage of Value Added Services by Reliance subscribers. • Getting the questionnaire filled by the customers and take their feedback. • Analyzing the data collected using Statistical tool SPSS 13.0 for Windows. • Report preparation.IBS Hyderabad Page 14
  • 16. Value Added Services at Reliance Communications Ltd. 3. REVIEW OF LITERATURERNCOS, May 2008, “Indian Telecom Analysis (2008-2012)”(www.research and markets.com)The report provides a detailed study of the Indian telecom sector and gives an analysis of thecompetitive environment in the industry. It gives an insight into the fixed, mobile, Internet andbroadband services in terms of players, number of subscribers, and market share in India. Thereport also discusses the growth drivers, opportunities, and future outlook of the Indian telecomsector to help clients identify growth opportunities in the market.With a strong population of over 1.1 Billion, India has become one of the most dynamic andpromising telecom markets of the world. In recent times, the country has emerged as one of thefastest growing telecom markets in the world. During 2003-2007, the country witnessed thenumber of phones increasing more than triple and total tele-density rising from 5.1% to 18.2%.The major key findings from this report are as follows: • The total telecom subscription in India surged at a CAGR of over 38% from fiscal 2003 to fiscal 2007, making the country the third largest telecom market in the world. • Mobile phones accounted for 80.2% of the total telephone subscriber base at the end of March 2007. • The Internet subscriber base in the country, as on March 31, 2007, stood at 9.3 Million as compared to 6.9 Million on March 31, 2006 registering a growth of 34.8%. • By fiscal 2010, Indian will require around 330,000 telecom network towers. To meet this enormous need, the telecom operators are resorting to network infrastructuresharing.The major key issues & facts analyzed are as follows: • The current scenario of the Indian telecom sector. • The factors critical to the success of the industry. • The opportunities exist for the Indian telecom market. • The future outlook of the telecom market in India. • The emerging technologies in the Indian telecom sector. • The major players in the Indian telecom market and how are they performing.IBS Hyderabad Page 15
  • 17. Value Added Services at Reliance Communications Ltd. Impact of Increased Competition on Mobile Service Industry:(www.icra.in)The report provides an overview of the financials of the telecom industry and various players inthe Indian telecom sector. It gives a detailed analysis of the competition prevalent in the Indiantelecom industry. It summarizes the reasons for declining revenues, increasing price war,increasing rate of customer attrition and also the importance of value added services for mobileservice providers.The facts that the report presents are as follows: • The Indian mobile services market is highly competitive with six to eight players operating in each of the 23 telecom circles that the country is divided into. • Most telecom operators reported a decline in revenues from mobile services in Q2, 2009- 10 despite growth in their mobile subscriber base. • With mobile penetration in the urban areas having reached high levels already (urban tele-density was 87.18% as against rural tele-density of 15.35%, both as in June 2009), subscriber additions are expected to happen largely in the semi-urban and rural areas, which in turn would impact ARPU further. • With TRAI recommending introduction of MNP, the domestic telecom sector appears poised for a paradigm shift. The reasons for seeking the introduction of MNP are compelling: to promote competition among mobile service operators so that service levels can improve further and to provide users the right to change operators at minimal cost and with minimal inconvenience. • Currently, the contribution of VAS to the total mobile revenues of Indian telecom operators is just 9-10%, which is significantly lower than the same of operators in the developed markets.IBS Hyderabad Page 16
  • 18. Value Added Services at Reliance Communications Ltd.Mobile Value Added Services in INDIA:(A Report by IAMAI & eTechnology group @ IMRB)The report provides a clear and precise definition of MVAS, its various categories existing inIndia, the MVAS still evolving and thus changing ecosystem along with the current revenuesharing scheme between various entities, its drivers and barriers along with its future in India.The facts that the report presents are as follows: • The Current Mobile VAS industry is estimated at Rs. 5780 crore by end June 2008 and is estimated to grow steadily at 70% over the next two years to touch Rs. 9760 crores by end June 2009 and Rs.16520 crores by end June 2010. • MVAS currently contributes around 9% to the operator’s revenue. It is expected to grow over 12 % by June 2010. • As ARPU declines, the challenge for operators is to increase revenues by differentiating their offerings and develop alternative revenue streams by offering more value added services to the existing subscribers. • In terms of market share, 92% of the subscriber base in India is on pre-paid connection, with the remaining 8% on post-paid subscriptions. This has also given rise to opportunities for generating increased revenue, through exploring potential Value Added Services (MVAS) like subscription packs of news, alerts etc and more exclusive roaming services tailored to pre-paid subscribers. • Decrease in ARPU despite increase in MOU: Though the subscriber base is growing at a rapid pace and has positively impacted industry revenues, operator margins also have shrunk owing to competition and lower “Average Revenue per User” (ARPU) as the major growth is coming from bottom of the pyramid. As ARPU declines and voice gets commoditized, the challenge is to develop alternative revenue streams and retain customers by creating a basis for differentiation in high-churn markets. • Need for differentiation: There is a greater need among the telecom operators to differentiate themselves from each other.IBS Hyderabad Page 17
  • 19. Value Added Services at Reliance Communications Ltd. 4. INDUSTRY4.1 INTRODUCTIONThe telecom industry is one of the fastest growing industries in India. India has nearly 200million telephone lines making it the third largest network in the world after China and USA.With a growth rate of 45%, Indian telecom industry has the highest growth rate in the world.History of Indian Telecommunications started in 1851 when the first operational land lines werelaid by the government near Calcutta (seat of British power).Telephone services were introduced in India in 1881. In 1883 telephone services were mergedwith the postal system. Indian Radio Telegraph Company (IRT) was formed in 1923. Afterindependence in 1947, all the foreign telecommunication companies were nationalized to formthe Posts, Telephone and Telegraph (PTT), a monopoly run by the governments Ministry ofCommunications. Telecom sector was considered as a strategic service and the governmentconsidered it best to bring under states control.In 1986, two wholly government-owned companies were created: the Videsh Sanchar NigamLimited (VSNL) for international telecommunications and Mahanagar Telephone NigamLimited (MTNL) for service in metropolitan areas.Telecommunication sector in India can be divided into two segments: Fixed Service Provider(FSPs), and Cellular Services. Fixed line services consist of basic services, national or domesticlong distance and international long distance services. The state operators (BSNL and MTNL),account for almost 90 per cent of revenues from basic services. Private sector services arepresently available in selective urban areas, and collectively account for less than 5 per cent ofsubscriptions. Cellular services can be further divided into two categories: Global System forMobile Communications (GSM) and Code Division Multiple Access (CDMA). The GSM sectoris dominated by Airtel, Vodafone-Hutch, and Idea Cellular, while the CDMA sector isdominated by Reliance Communications and Tata Indicom. Opening up of international anddomestic long distance telephony services are the major growth drivers for cellular industry.India surpasses the USA as the world’s second largest mobile market. The last five years havewitnessed the number of phones more than quadruple in India, taking the total number to 300.5million at the end of March 2008. 73.7% of the country’s mobile customers are subscribed toGSM and the remainders are CDMA customers.Mobile growth is forecasted to remain in the double digits until the end of the forecasted period,with an average growth rate of 22.8% between 2007 and the end of 2012. At that time, mobilesubscribers are forecasted to have reached 643.0 million and a penetration rate of 51.8%.Withover 1.1 billion inhabitants and a highly competitive telecom market, India is and will remainone of the world’s most dynamic and promising telecom markets for the next five years, evensurpassing China in terms of market vitality.IBS Hyderabad Page 18
  • 20. Value Added Services at Reliance Communications Ltd. Fig 4.1 Source: Operators Website, Press Release & Regulatory4.2 MARKET STRUCTURETelecom reforms across the world are energizing businesses and people. Long considered anatural monopoly, recent technological developments have facilitated competition in this sectorleading to increased access to telecom services and gains in efficiency and quality of service.India has emerged as an international destination for processing and distribution of information.Availability of infrastructure for electronically transferring and assessing information are criticalto maintaining the competitive advantage that it currently enjoys and embracing telecom reformsis a part of achieving that goal. Though the results of telecom reforms the world over have beenpositive on average; domestic political economy and institutions have impacted every countryexperience and India is no exception. India’s economic liberalization program began in 1991.IBS Hyderabad Page 19
  • 21. Value Added Services at Reliance Communications Ltd.Aimed at raising the economy from low-growth equilibrium and putting it on a sustained growthpath, these reforms targeted a wide range of sectors – from international trade to finance andinfrastructure. Following these reforms, traditional sectors such as agriculture and industry thatused to contribute nearly 70 per cent of the GDP now constitute an increasingly smaller share ofeconomic output.Simultaneously, there has been rapid growth in the service sector that now contributes nearly 48per cent to GDP (1998) and is growing at 8 per cent per annum. Indian policy-makers alsoincreasingly recognized the need for reforms and investment in telecommunication infrastructurein order to realize the forecasted economic and social growth rate of the country. It has beenshown that investment in telecommunications infrastructure leads to economic growth in variousways. While telecommunication investment itself leads to growth by creating a demand for thegoods and services used in their production, the economic returns on this investment are fargreater than the returns from the investment alone. The multiplier effect of telecom investmenton GDP is likely to be higher because of both the direct and indirect effect that this investmenthas on production.However, it has also been shown that since telecommunications infrastructure is characterized bynetwork externalities the positive growth effects of investment in this sector are subject to havingachieved a critical mass in a given country’s communications infrastructure.4.3 COMPETITION IN THE MARKETA characteristic of telecom industry is heavy dependency on Advertisement and PromotionalStrategies-Each company viz. Airtel, Vodafone, Reliance Communications, Tata Indicom andAircel spend lots of funds on acquiring Indian movie stars and sport stars. Thus due to the cost ofheavy expenditure on Advertisement the industry is more or less a very heavy revenuegenerating industry for a lot of other sectors. A characteristic of this kind of Competition is theclose interdependence between the different companies regarding each company’s policydecisions. These companies have to monitor each activity of its competitors and even a littleignorance can prove very costly. Like, when Reliance started the ONE-INDIA plan, Airtel,Vodafone and others also started and pushed similar plans. In this kind of competition the majorplayers occupy a very high market share and these players could dictate terms for the otherplayers but in Indian Telecom Industry all the players are very close in terms of market share sothe question of dictating terms comes only when a company takes the First-mover Advantage.Then it could dictate terms for the particular time period but again the other companies arealways at their heels so the question of keeping the advantage for a long time doesn’t seek in.IBS Hyderabad Page 20
  • 22. Value Added Services at Reliance Communications Ltd. Fig 4.2 Source: Operators Website, Press Release & RegulatoryIBS Hyderabad Page 21
  • 23. Value Added Services at Reliance Communications Ltd. 5. COMPANY PROFILE: RELIANCE COMMUNICATIONS LIMITED5.1 INTRODUCTIONReliance Communications Limited founded by the late Shri Dhirubhai H Ambani (1932-2002) isthe flagship company of the Reliance Anil Dhirubhai Ambani Group. The Reliance AnilDhirubhai Ambani Group currently has a net worth in excess of Rs. 63000 crore, cash flows ofRs. 12000 crore, net profit of Rs. 8000 crore and zero net debt. RCOM is India’s largest integrated and fully converged communications service provider in theprivate sector, and has been rated among “Asia’s Top 5 Most Valuable Telecom Companies”.Reliance Communications is Indias foremost and truly integrated telecommunications serviceprovider. The Company, with a customer base of over 100 million including over 2 millionindividual overseas retail customers, ranks 4th among the Top 10 Telecom companies in theworld by number of customers in a single country.Reliance Communications corporate clientele includes 2,100 Indian and multinationalcorporations, and over 800 global, regional and domestic carriers. Reliance Communications hasestablished a pan-India, next generation, integrated (wireless and wireline), convergent (voice,data and video) digital network that is capable of supporting best of- class services spanning theentire communications value chain, covering over 20,000 towns and 450,000 villages.It owns and operates the worlds largest next generation IP enabled connectivity infrastructure,comprising over 175,000 kilometers of fiber optic cable systems in India, USA, Europe, MiddleEast and the Asia Pacific region. The Reliance Communications network consists of 60,000kilometers of optical fiber cables spanning the length and breadth of India. These cables cancarry thousands of billions of bits per second and can instantly connect one part of the countrywith another.This physical network and its associated infrastructure will cover over 600 cities and towns in 18of the countrys 21 circles, 229 of the nation’s 323 Long Distance Charging Areas and broadbandconnectivity to over 190 cities. This infrastructure will be backed by state-of-the-art informationmanagement systems and a customer-focused organization. Reliance Communications objectiveis to create value for our customers. Reliance will innovate ceaselessly so that state-of-the-arttechnology can be leveraged to create products and services that are affordable. Reliance has ademonstrated track record of conceptualizing, and executing complex, multi-billion dollarprojects in a timely and cost effective manner. Reliance Communications is committed todelivering products and services of world class quality to customers. It has attracted the bestpeople in each of its businesses, by empowering people, providing attractive growthIBS Hyderabad Page 22
  • 24. Value Added Services at Reliance Communications Ltd.opportunities, and creating a world class working environment. Reliance Communicationsbelieves that knowledge resides in people, and has, accordingly, always built its growth plansaround people. It is a youthful enterprise, with a strong entrepreneurial spirit, fostering anenvironment that facilitates informality and flexibility, and emphasizes depth of planning andspeed of execution. Fig 5.1 Source: Operators Website, Press Release & RegulatoryThe following attributes define future leadership at Reliance Communications: • Customer centricity. • Initiative and an attitude of ownership. • Passion for excellence and an ability to energize. • Problem solving and an innovative "can do" mindset. • Entrepreneurship and stretch.The strong underlying fundamentals of the Indian economy, and the latent demand potential inour markets, provide the platform for building world scale businesses. Reliance Communicationsleadership in its several businesses is centered around its ability to build world scale assets,obtaining the benefits of economies of scale, and competing on an even level with the globalpeer group.IBS Hyderabad Page 23
  • 25. Value Added Services at Reliance Communications Ltd.Reliance Communications leverages its core competencies to create a sustainable competitiveadvantage in its various businesses. Today, Reliance Communications is revolutionizing the wayIndia communicates and networks, truly bringing about a new way of life.5.2 VISIONReliance Communications has a vision to leverage its strengths to execute complex global-scaleprojects to facilitate leading-edge information and communication services affordable to allindividual consumers and businesses in India. It also aims to offer unparalleled value to createcustomer delight and enhance business productivity. It also focuses on generating value for theircapabilities beyond Indian borders and thus enabling millions of Indias knowledge workers todeliver their services globally.5.3 BUSINESS MIX Fig 5.2 Source: Annual Report of Reliance Communications, 2007-2008IBS Hyderabad Page 24
  • 26. Value Added Services at Reliance Communications Ltd. 6. VALUE ADDED SERVICES6.1 INTRODUCTIONAs we have seen, Telecommunication has moved beyond providing just basic voice calls. Themobile phone has evolved from a mere communication device to an access mode with an abilityto tap a plethora of information and services available in the ecosystem. This is the reason why itis now being referred to as the ‘fourth screen’, after Cinema halls, Television and PC.Defining VASBut the fundamental question that remains is how VAS is defined. A clear MVAS definition isnot only required to clear the air among the MVAS providers but it will also have an impact onthe dynamics of the Value chain. A detailed definition of VAS might have an impact on thelicensing issues surrounding VAS.Let’s look at different VAS definitions floating in the market.Basic definition of a VASValue Added Service (VAS) in telecommunication industry refers to non-core services, the coreor basic services being standard voice calls and fax transmission including bearer services. Thevalue added services are characterized as under:- • Not a form of core or basic service but adds value in total service offering. • Stands alone in terms of profitability and also stimulates incremental demand for core or basic services • Can sometimes be provided as stand alone. • Do not cannibalize core or basic service. • Can be add-on to core or basic service and as such can be sold at premium price. • May provide operational synergy with core or basic services.A value added service may demonstrate one or more of these characteristics and not necessarilyall of them. In some cases, the value added service becomes so closely integrated with the basicoffering that neither the user nor the provider acknowledge or realize the difference. A classicexample is of P2P SMS. Some of the operators do not consider P2P SMS as part of their VASrevenue.IBS Hyderabad Page 25
  • 27. Value Added Services at Reliance Communications Ltd.Definition as per TRAIIn the Unified Access Service License (UASL), VAS is defined as follows-“Value Added Services are enhanced services which add value to the basic teleservices andbearer services for which separate licence are issued”The Government of India issues licenses for the following Value Added Services:-1. Public mobile trunking service2. Voice mail service3. Closed users group domestic 64 kbps data network via INSAT satellites system4. Videotex service5. GMPCS6. Internet7. Audiotex8. Unified messaging serviceThe above definition supports a free market but can be broadened to incorporate new servicecategories andplayers in the supply chain.For mobile telecommunication market, a simple definition of VAS would be-Mobile Value Added Services are those services that are not part of the basicvoice offer and are availed separately by the end user. They are used as a tool fordifferentiation and allow mobile operators to develop another stream of revenue.6.2 NEED FOR MVASOver the last 5 years, the telecom industry has understood the importance of MVAS. Given thedeclining ARPU and increasing competition among operators it’s imperative to focus onalternate revenue streams. That’s where there is a felt need for capitalizing on the Value AddedServices Market.The reasons for the increasing importance of MVAS can be classified as:• Decrease in ARPU despite increase in MOU: Though the subscriber base is growing at arapid pace and has positively impacted industry revenues, operator margins also have shrunkowing to competition and lower “Average Revenue per User” (ARPU) as the major growth iscoming from bottom of the pyramid. As ARPU declines and voice gets commoditized, theIBS Hyderabad Page 26
  • 28. Value Added Services at Reliance Communications Ltd.challenge is to develop alternative revenue streams and retain customers by creating a basis fordifferentiation in high-churn markets.• Need for differentiation: There is a greater need among the telecom operators to differentiatethemselves from each other. • Number of Licensees: With increasing number of licensees (98 UASL, and 37 cellular licenses) in the telecom space the average numbers of operators in many circles have increased to 5-6 operators offering more choices to the consumer. Thus the competition among the operators has increased tremendously. Therefore it is very important for them to differentiate themselves from the others. Now that voice has got commoditized these operators are using MVAS for their differentiation and marketing these services heavily for creating awareness among the consumers. • Decreasing Call Rates: In order to attract consumers with relatively low purchasing powers primarily from Semi Urban and Rural India the operators have drastically reduced the call rates making it affordable to even the lower segment of society. The tariff in India is one of the lowest at Rs.1 per minute as compared to the tariff in developed nations like USA and UK where the call rates are Rs.13 and Rs7-8 respectively. Country Tariff Charges (approx.) USA Rs 13 per min UK Rs 7-8 per min France Rs 7-8 per min Brazil Rs 6 per min India Rs 1 per 2 min Table 6.1 Source: Broadband and Internet India • 3G bidders who are non operators: The arrival of new technologies will give rise to greater competition as many non operators are also bidding for the 3G licenses. Department of Telecom has planned to allow five 3G operators in each circle depending on the availability of spectrum. Therefore there would be a greater need to differentiate one self in order to attract new customers and retain the existing ones.IBS Hyderabad Page 27
  • 29. Value Added Services at Reliance Communications Ltd. • Saturation in Metro and Urban Market: The metro/urban areas offer high level of penetration and have significant mobile subscribers. In such a highly saturated market with the entry of MVNO’s the competition will get fierce. Therefore capitalizing on value added services will give operators opportunity to increase ARPU by providing premium services. Metro Circle Mobile Penetration Delhi 90% Mumbai 70% Chennai 89% Kolkata 47% Punjab 46% Table 6.2 Source: Broadband and Internet India • Increasing need and demand from consumers: In addition to the above supply side reasons the ‘pull effect’ from consumers asking for more than just basic telephony is also a key driver for MVAS services. Today most of the consumers are seeking more from their communication device apart from just mobility and desire to stay connected.6.3 UNDERSTANDING DIFFERENT MVAS CATEGORIESAll the value added services address some need of the end consumer whether it is psychological,monetary or convenience. Based on the need fulfillment of the end user, we have groupedMobile VAS into three broad categories. • Entertainment VAS - The key differentiating factor of Entertainment VAS is the mass appeal it generates. These provide entertainment for leisure time usage. These not only generate heavy volume (owing to its mass appeal) but also heavy usage. An example of these kinds of services is Jokes, Bollywood Ringtones, CRBT (Caller Ring Back Tone) and games. These services continue to be popular and have been key revenue generators for the Indian mobile VAS market. This is a high value MVAS and will continue to show growth. Other popular Entertainment VAS driving the market are dating and chattingIBS Hyderabad Page 28
  • 30. Value Added Services at Reliance Communications Ltd. services. The service was first introduced 2 years back and is now being offered by all the operators. Each circle generates about Rs 30 lakhs per month. This service is not only growing fast but also witnessing less churn as compared to other MVAS. Owing to its sticky nature, it requires comparatively less marketing efforts and cost. Entertainment VAS has the potential to remain a key contributor to Mobile VAS industry. To sustain the MVAS growth, it is the responsibility of the industry to keep discovering/innovating killer applications like CRBT (Caller Ring Back Tone) at regular intervals • Info VAS- These services are characterized by the useful information it provides to the end user. The user interest comes in from the personal component and relevance of the content. Apart from mobile, alternate modes are available to access Information VAS like Newspaper, TV, and Internet. E.g. of Info VAS is information on movie tickets, news, banking account etc. They also include user request for information on other product categories like real-estate, education, stock updates, etc. Information VAS needs to target the right person at the right time with the right content. • mCommerce VAS (Transactional services)- These are the services which involve some transaction using the mobile phone. An example of this kind of service is buying movie tickets using mobile phone or transfer of money from one bank account to the other. These can broadly be classified into 2 types - Mobile banking and Mobile payments. Though in a nascent stage, off late many initiative have been taken in mCommerce space. A number of application providers are in the market with different business models. Some are focusing on mpayment, some on incorporating mCommerce into it while others on mbanking aspects. This year has seen the launch of mbanking service by Indian’s largest private sector bank which has given mbanking a much needed thrust. Almost all the operators are conducting pilot exercises for mCommerce services using different access modes like GPRS, USSD, STK, etc. A big boost to mcommerce has come from the RBI which recently came out with some guidelines. mCommerce penetration continues to be small but awareness is increasing. Operators are betting on technologies like USSD to make the service handset agnostic. The current marketing focus is primarily on mobile bill payment and mbanking. Industry is betting on tripling number of mCommerce users within this year. This is discussed in greater detail in the subsequent sections.IBS Hyderabad Page 29
  • 31. Value Added Services at Reliance Communications Ltd. ENTERTAINMENT INFORMATION MCOMMERCE VAS VAS These are the services These services provide which provide some These are the services entertainment foe useful information to which involve some Definition leisure time. These the end user. The user transaction on mobile. services usually interest comes from generate mass appeal. personal or relevant component of the content. Entertainment VAS is Information VAS is mCommerce is driving the VAS market getting popular with currently in embryonic Current Status both in terms of different categories stage. volume and revenue. depending on the relevance. Industry focus is on Entities using mobile as RBI guidelines are Entertainment VAS another channel to expected to give a big with new players deliver information is boost to mBanking. coming from media and driving Information Drivers movie houses. Eg: VAS. Eg: Stock update, STAR, Rajshri. bank account information etc. Currently, music is the 1. Marketing is the 1. Identifying the best biggest component. biggest challenge access mode for Challenge is to drive since information mCommerce is the the other content and need differs across biggest challenge. services like games. different segments. 2. Handset 2. Credibility of the penetration and source is another usage of GPRS is challenge since low in India. Challenges there are various 3. Security concerns. other alternative sources for Information VAS. It is expected to remain It is going to be key to It has the potential to the VAS driver for next address the needs of become one of the key Future Status few years. growing rural market. drivers of VAS once the security concerns are addressed. Table 6.3: Different MVAS categoriesIBS Hyderabad Page 30
  • 32. Value Added Services at Reliance Communications Ltd.6.4 PILLARS OF MVASThe growth of MVAS is based on 4 pillars- Access devices, Content, Technology andInfrastructure. Fig. 6.1 Source: Mobile Value Added Services in INDIA: (A Report by IAMAI & eTechnology group @ IMRB) 1. Access devicesAccess devices play an important role in the usage of different MVAS categories. The lack offeatures like GPRS, GPS, Java in handsets make a number of MVAS futile. Therefore theaffordable availability of such features is a key factor in determining the size of the targetaudience to a large extent. A recent example is service operators preference for USSD as anmpayment mode instead of GPRS for the simple reason that USSD is handset agnostic. Anotheraccess device which will soon see the light-of-the-day in India is MID (Mobile Internet Devices).Even technology companies like Intel are increasing the power of mobile platforms with aspecially designed low cost processor called Atom.IBS Hyderabad Page 31
  • 33. Value Added Services at Reliance Communications Ltd. 2. ContentIs content really the king? It does not seem so, looking at the percentage revenue share collectedby Content aggregators and Content owners of the total MVAS pie. Add to it the pirated contentand side loading in the India market; it does not present a rosy picture. The content depends a loton geography and is not transportable across borders. Both IPR (e.g. music label) and white labelcontent (e.g. cricket) is available in the market. But on the other hand, much of the content beingconsumed is being generated for other media. But because of the same reason we say a widevariety of content being available especially in the Entertainment category. For contentaggregators/developers/owners to play a significant role in the category, relevant content needsto be generated. They need to play a larger role from merely being a content aggregator andtransporter. Investment needs to be made keeping in mind the long term benefit and not the shortterm ROI. Another factor which impedes the content development is marketing of MVAS. A lotof content and services die prematurely or do not realize their full potential because of lack ofsufficient and focused marketing efforts. Currently, packaging and marketing of content isprimarily in the hand of operators. The stakeholders are currently not sharing the burden againciting reasons of lack of sufficient returns. Regional content will give a boost to the MVASmarket. It has tasted success in the Indian market but the challenge is to generate relevant contentnot only catering to regional differences but also in different languages. 3. InfrastructureInfrastructure requirement needs to be met to harness the potential of different technologies.Setting up infrastructure especially in the rural areas is going to play a major role in the growthof MVAS. 4. TechnologyThere are 2 aspects to technology. One is the technology platform itself and the second is thecommunicationtechnology.On one hand technology platforms are independent of geography and are transportable acrossborders unlike content which needs to have a regional flavor for e.g. mobile payment platform,IVR, etc. Though there are challenges in case of platforms like speech recognition given the highnumber of languages and dialects spoken in India. Communication technology is alsoindependent of geography but depends on regulation issues for e.g. 3GIBS Hyderabad Page 32
  • 34. Value Added Services at Reliance Communications Ltd.6.5 UNDERSTANDING THE ROLE OF VARIOUS ENTITIESContent Aggregators/Developers:The MVAS growth has given birth to a new entity which aggregates content originally designedfor some other media, from different sources. Some of the content aggregators also developcontent especially for mobile phones for e.g. mobile games. On one hand they coordinate withoperators and on the other, with content owners and smaller aggregators. Another key roleplayed by them is handling of the IPR related issues - thus reducing the burden of the mobileoperators.Content OwnersThese are the actual owners of the content who hold the copyright of the same. Though thecontent is developed for some other media, the MVAS has started contributing significantly totheir overall revenue generation. A good example is of CRBT which is giving good revenue tothe music labels. They mostly provide content to Content Aggregators but also some timesinteract directly with the operators. In recent cases, Content owners sell the content directly tohandset manufacturers for e.g. Nokia tied up with Om Shanti Om providing exclusive songs,wallpapers, games, etc.Traditional Media CompaniesMedia companies like TV channels and FM channels have also joined the bandwagon. All thebig TV channels have started selling their content through short codes. STAR has even launcheda mobile division named STAR Mobile Entertainment to provide mobisodes and mobile relatedcontent. The key revenue source for the media channels is Voting in shows like Indian Idol andcontest participation in shows like Paanchvi Paas. Post the success of talent hunt shows andcontests like KBC, the TV slots have been flooded with such shows and other reality shows.Though the initial euphoria has not sustained, voting and contest participation continue tocontribute significantly.Technology EnablersTechnology partner & platform enablers handle software platforms and authoring tools. Thusthey provide the backbone to all the MVAS being provided. The technology backend includesolutions like Televoting system, Voice portal, etc.IBS Hyderabad Page 33
  • 35. Value Added Services at Reliance Communications Ltd.Short Code ProvidersThese are the companies who own a short code (e.g. 58888, 53456 etc) which is sold to a thirdparty client for some keyword and a specific period. On one hand they need to tie up with theoperators to ensure their short code works across subscriber base and on the other hand they selltheir short code to other companies like real estate, hospitals, etc. who advertise their productsusing the short code.Handset manufacturerThe handset manufacturers have joined the bandwagon and have started tying up with Contentowners to provide pre loaded content on their handsets.Content converterSince most of the content in MVAS is originally designed for some other media, it needs to beconverted into mobile compatible format. This is where content converters enter the value chain.They interact with the operators and work closely with them. Fig. 6.2 Source: Mobile Value Added Services in INDIA: (A Report by IAMAI & eTechnology group @ IMRB)IBS Hyderabad Page 34
  • 36. Value Added Services at Reliance Communications Ltd.6.6 MOBILE VAS ACCESS MODESThe growth of MVAS market is dependent on the various modes available to the end consumerfor accessing MVAS. Presently, the modes of MVAS access can be classified as:Short Message Service (SMS) PlatformSMS was the first mode introduced for accessing MVAS. MVAS market is currently dominatedby SMS in terms of revenue. The SMS platform is used by telecom operators to provide a varietyof services such as information services like news alerts, cricket scores, chatting services, etc.Voice PlatformInteractive Voice Response (IVR) system is used to deliver Voice based Value Added services tothe consumers. In this system, the end user interacts with a computerised system to tap theservice. The end users can select the options available on the service either through numbers onthe keypad or using speech recognition system. Voice based services are offered in a variety oflanguages to cater to the diversified Indian population. This mode becomes more significantwhen dealing with the non-metros and rural India. Voice access contributes to more than one-third of the total MVAS revenueGPRS/WAP PlatformGPRS currently contributes around 6-7% of the overall MVAS revenue. The high price of dataaccess acts as a barrier towards usage of GPRS. The primary drivers for the adoption and usageof mobile internet are availability of cheap data-enabled handsets and lowering of GPRS tariff bymobile operators. GPRS is an effective medium of accessing MVAS, but is restricted byrelatively lower consumer base.Unstructured Supplementary Services Data (USSD) PlatformUSSD is a session based mechanism for delivery of service to the end consumer. The servicesare delivered through a continuous interactive session, unlike SMS where the interaction needs tobroken to separate messages. USSD presently contributes around 2-3% of the MVAS revenues,but the industry holds a positive perspective towards its adoption as a means of accessingMVAS.IBS Hyderabad Page 35
  • 37. Value Added Services at Reliance Communications Ltd.Multimedia Message Service (MMS) PlatformMMS allows sending messages that include sending multimedia objects such as images, audioand video along with text messages. MMS market in India is still in a nascent stage. Presently,the growth of this segment is restrained by high-price and limited availability of MMS handsetsin India. The current MVAS market is estimated at Rs 5930 crore as on June 2008. The market iscurrently dominated by SMS as the mode of accessing MVAS.SMS contributes around 49% to the overall MVAS revenues. This consists of P2P, A2Pand P2A services. Fig.6.3: VAS Revenue Access ModesIBS Hyderabad Page 36
  • 38. Value Added Services at Reliance Communications Ltd. 7. VALUE ADDED SERVICES (VAS) MARKET ANALYSIS7.1 INTRODUCTIONThe goal of market analyses is to determine the attractiveness of a market and to understand itsevolving opportunities and threats and relate it to the strengths and weaknesses of the firm and itsproduct/service.First task is always to know all about your field of work, the market for which the product ismeant, the technology involved and your product itself. Before setting my feet into thedepartment and extending my work responsibilities, my first job is to know everything about theproduct, its market and services offered through VAS in Reliance.Under the initial step of market analyses, following are the areas to study and look upon: • Know your product: A detailed study of all the VAS products and services of Reliance Communications. • Know the technology and the market • Who are your customers: Know the customer base for these services and to push and promote VAS throughout my term of internship. • What is the worth: Study the percentage revenue added through VAS. • Know your competitors: A detailed comparison of VAS Data Platform (R-World) at Reliance with all other major Telecom players in the market.7.2 VAS ACCESS DEVICESFor access of Value Added Services, feature rich handsets are needed which enable easy accessand display/storage of contents. There has been phenomenal growth in mobile subscriber basebut the low feature handsets continue to be in majority. Basically price is the biggest driver inpurchasing of handsets. The lack of feature rich mobile handsets thus continues to be a barrier tothe growth of Mobile Value Added Services. It is expected that the prices of feature rich mobilehandsets will decline with increasing competition among manufacturers and also because oftechnological advancement.IBS Hyderabad Page 37
  • 39. Value Added Services at Reliance Communications Ltd.GPRS HandsetsCurrently the penetration of GPRS enabled handsets are close to 26% in India as against 99% inSouth Korea and 76% in Japan. Of the total mobile subscribers in India 65 million possessGPRS-enabled handsets. Of all those who posses GPRS enabled handsets only 20-25% of themhave got the GPRS activated and only about 15% use it. Even in case of developed nations likeSouth Korea and Japan not more than 50% of the subscribers owning GPRS enabled handsetsuse it. Shown under in fig 7.1 Fig. 7.1This clearly indicates that the consumer today engage more in text based services than the webbased applications. Therefore for MVAS to grow to its full potential the handset manufacturerswill have to look at ways to manufacture GPRS enabled phones which are affordable and userfriendly. Moreover they would also need to increase its awareness and educate the consumers onhow to use GPRS.3G HandsetsThe market for 3G in the country is expected to be huge with over 65 million wirelesssubscribers, who use their handsets to access data services on the Web. These subscribers arecurrently using mobile handsets which are internet-enabled and are potential broadbandsubscribers with the deployment of advanced wireless technologies such as 3G. According toIndian Cellular Association (ICA) about 5% of mobile users already have handsets that canworkon 3G spectrum. In addition, out of all those possessing the 3G enabled handsets thenumber of people who would use 3G services would be determined by the quality of contentavailable. Unlike most other countries, we are looking at 3G services not only as premiumservices but also as an extension of 2G. Since our broadband penetration is abysmal, 3G wouldIBS Hyderabad Page 38
  • 40. Value Added Services at Reliance Communications Ltd.provide a much required boost to it. Given that mobile phones are much cheaper as compared toPCs, the demand for broadband on mobile is expected to be much greater. More importantly, 3Gwill solve problems more in rural India. Therefore the shift towards 3G would depend onaffordability of handsets along with the quality of content available.Bluetooth PenetrationThe mobile handset market in India is worth $7-billion. The hands-free mobile revolution seemsto be revolutionizing the use of Bluetooth-enabled headsets. As a category it is now coming outof the clutches of the accessories market and establishing a niche of its own. Established brandedmobile handset players today are actively looking at making headsets part of their packageoffering to customers. India is a major IT hub and it comes as no surprise that the IndianBluetooth headset market is expected to grow at a compound annual growth rate (CAGR) of74% in India vis-à-vis 48% in China. According to Industry experts, the professional headsetmarket in India is expected to grow at a CAGR of 21% over the next five years, which will bedriven by the contact centres and IT enterprise segment through addition of new seats andreplacement of handsets by headsets.In the year 2007-08, India shipped close to 85 million mobile handsets, compared to 66 millionunits shipped in the previous year, registering a year-on-year growth of around 29 per cent. Thiscould be attributed to the huge influx of ultra-low cost Chinese and operator-branded handsetsthat have sharply brought down the average selling price (ASP) of entry-level handsets andcconsumers need for changing phones as frequently as within 8-12 months. This growth is anoutcome of a burgeoning mobile services market and lower entry barriers across variouscustomer categories, as average selling prices of handsets is constantly falling and has gonedown to as low as Rs.599 in the wake of a highly competitive landscape with close to 25vendors.Handsets costing less than Rs 3,000 account for 70% on the market, and nearly half of these costless than Rs 2, 000. Yet interestingly the average cost of a phone sold in India is Rs5,000. Thiscould be attributed to the growing number of high-end phones being shipped to India. In FY2008 EDGE and WCDMA-enabled mobile phones contributed 15.4 per cent and 3.1%respectively of the total mobile phone shipments compared to 7.4% and 1.2%, in 2006-07.7.3 RELIANCE Vs COMPETITORSThough reliance is one of the largest telecom operators in India, the competition is not much farless than being fierce. There are many telecom operators in India and more are joining in thepool of operators through recent FDI’s and joint ventures. In a few months Delhi region willbecome the only city in the world where there will be 12 telecom operators serving its people.For any company to be successful, it shall have clear knowledge about its competitors, productsubstitutes and entry/exit barriers as in accordance to Porter’s Model.IBS Hyderabad Page 39
  • 41. Value Added Services at Reliance Communications Ltd.Major competitors of Reliance Communications for its Value added services are: • Airtel • Vodafone • Idea • AircelTo study the market of VAS for Reliance Communication it is necessary to know all about thecompetitor’s products and services.Below is the comparison table of Reliance and its major competitors for Value Added Services– DATA PLATFORM VAS DATA PLATFORM COMPARISON AIRTEL IDEA VODAFONE RELIANCE AIRCEL FASHION & HOT & SPICY Under application HOT n NEW KREENA GLAMOUR store in special KAPOOR offers SPCL subscribe at cover girls on FTV BEACH wallpapers, videos PLUS various given demand, stylish BEAUTIES, and images HOLLYWOOD charges as per riya sen, wonder FREE available HOTTIES whichyour convenience girls, valentine ROMANTIC has images and to get updates beauties VIDEOS, HOT animations BIKINI VIDEOS, FHM SWIMSUIT GIRLS, FREE MODEL PHOTOSIBS Hyderabad Page 40
  • 42. Value Added Services at Reliance Communications Ltd. FUN ZONE PICK OF THE WHATS NEW HOT n NEW PICK OF THE DAY + DIRECT DAY LINKS games, games, love messages, games, GAME Rs 50, animations, animations, new zoozoos, animations, ANIMATION wallpapers, wallpapers, new games 2010 wallpapers, Rs 15, IMAGE videos. videos. videos. Rs 10 SEND FREE X X X X SMS an application which isdownloadable and you can send aparticular number of free messages daily. SET HELLO X X CALLER X TUNE TUNES search hello tune Various categoriesby name of song, as, Set caller tune, movie or album music box, busy caller tune, my lib, copy other tuneBEST SELLERS X BEST PICKS HOT n NEW WHATS NEW games, divine blessings, Ads, latest animations and nature movies and wallpapers downloads, games mahamantras LATEST MOVIES + NOT MOVIE MOVIES MOVIE Yahoo MOVIES SPECIFICALLY MASALA REVIEWS MENTIONED Latest movies , Latest movies , Latest movie ad latest movies like All the latest Bollywood Bollywood banner 3 idiots, MNIK movies and Gossip, HOT Gossip, HOT etc. Sub videos of the babes, Fashion, babes, Fashion categorized as , related movie @ Astrology, latest movies, Rs 10 & Rs 15 English NEWS, name of a latest HINDI NEWS movie, hot hollywood, young n restless babes, goa tamil superhitAPP CENTRAL "MENU”: a APPLICATION OTHERS SERVICES +IBS Hyderabad Page 41
  • 43. Value Added Services at Reliance Communications Ltd. separate link for STORE SPECIALS all applications available on IDEA. 1400+ Less applications MANNY applications as compared to APPLICATIONS divided among Airtel SUBvarious categories CATEGORISED ACCORDINGLY IMAGES AND Given as a VIDEOS… DISTRIBUTED COOL VIDEOS Direct link. DIRECT LINK / ALL OVER THE VIDEOS PAGE includes fashion video, categories like, some videos animations and 2009 best movies carwash bikini, shown as icon @ wallpapers of @ Rs 15, Love studio X hotties, Rs 15actors & actresses indi pop song, beach beauties,based on different WWE Divas, best of splitsvilla, categories swimsuit, classic comedies, yoga, wet n wild, best of roadies, magic in a minute, khatron ke khiladi, models.. Etc MUSIC MUSIC MP3 SONGS NOTHING MUSIC SPECIFICALLY MENTIONED BY THE NAME OF MUSIC Latest Hits, Top full songs>>> Polytones @ Rs Chartbusters, international hits, 10, Truetones @Bollywood Hits, bollywood latest, Rs 15 and MP3Devotional, Best golden classics, @ Rs 15 of all of 2009, Music bhakti sagar, full the latest songs maestros, album @ Rs 50, a and more Bollywood full song @ Rs Categories areClassics, Ghazals, 25, wallpapers @ also given. Like,Pak music, Airtel Rs 10, animations hollywood, Jingle, Lyrics, @ Rs 15true instrumental, top Love hits tones @ Rs 20, 10 etc. polytones @ RsIBS Hyderabad Page 42
  • 44. Value Added Services at Reliance Communications Ltd. 10 MOVIES MOVIES X MOVIE MOVIES MASALA includes latest movies like All the latest animations and 3 idiots, MNIK movies and wallpapers of etc. Sub videos of theactors & actresses categorised as , related movie @ based on the latest movies, Rs 10 & Rs 15 movie name you name of a latest select movie, hot hollywood, young n restless babes, goa tamil superhit GAMES GAMES GAMES GAMES GAMES Whats New- download @ Rs name of the Name of the game top games, Games, Best 30 game, new + sub categories cricket games, Games, Games games, cricket, like new releases, puzzle games, Club. Priced bollywood, latest gamesgames bollywood between Rs 30- racing, adventure, of last decade, games, action, Rs 99 action, strategy cartoon racing, etc.. Rs 20 gamesaction & adventure, all @ adventure, priced Rs 50 or 99. @ Rs 49 and Rs Special games @ 99 Rs 15, Email & Chat CHAT + INTERNET GIVEN IN SERVICES + YAHOO MAIL SOCIAL MAIL NETWORKING various chat rooms available NEWS & NEWS+ LIVE NEWS under NEWS n TV NEWS SPORTS IBN NEWS INTERNET NDTV news SPORTS are News>>> TOI, Headlines, aajtak general news, room- regional given under IBN LIVE, DNA, online, Sun TV, finance news, news, world & MENU which is a BBC, more… CNBC tv online, international national news, separate link on UTVi online, news, sports business news, the home page. NDTV online, news. sports news. CNBC awaazSPORTS ZONE- online, Asianet manchester Online, WOW tv,IBS Hyderabad Page 43
  • 45. Value Added Services at Reliance Communications Ltd. united, ESPN BBC world news, sports …. Almost subscription, everything related mobile espn, to BPL-latest buzz, F1 latest news, goal.com, Roger Federer spl, Australian OpenSERVICES FOR SERVICES INTERNET YOU m-commerce- community, Business & airtel bill yahoo mail, book Finance>>> payement, airtel your tickets, money control, recharge, movie, astrology BSE, NSE, air tickets, CNBC, TRACK recharge DTH, YOUR STOCKS DG toll, shopping, insurance. m- banking, mobile apps, important alert, wayfinder nnavigator, get DTH- spl offer, get broadband. Sensex, securityFULL TRACKS X MP3 SONGS FULL SONGSTimeless classics, full songs>>> latest movie Valentines spl. international hits, names with song Full songs @ Rs bollywood latest, name and a few 20. many songs golden classics, more categories. mentioned there bhakti sagar, full Download @ Rs for download. album @ Rs 50, a 25 full song @ Rs 25HOLLYWOOD X WHATS HOT HOT n NEW WHATS HOT SIZZLERSGAMES SHOP GAMES GAMES GAMES Table 7.1: Data Platform ComparisonIBS Hyderabad Page 44
  • 46. Value Added Services at Reliance Communications Ltd.Here above “X” means: Not AvailableAuditing and Recommendation:After the completion of VAS market Analysis the next step comes of auditing andrecommendation to my company guide for the following matters:Propose services that are not included under VAS at Reliance to increase its competency in themarket. 1. Products and services those are not available on R-World in comparison with other operators. 2. New product and services that can be included on R-World (Reliance Data Platform). 3. Ways to improve the look and feel of the Home page. 4. Ways to improve the link for various Products & Services, i.e. the access for customers.IBS Hyderabad Page 45
  • 47. Value Added Services at Reliance Communications Ltd. 8. VALUE ADDED SERVICES (VAS) PROMOTION8.1 INTRODUCTIONBeing such a big commercial house, Reliance Communications undertakes biggerresponsibilities for better execution of its entire process. The entire process of promotion isbalanced in various forms for the existing customers of Reliance Communication. Apart from theconventional methods of promotions through posters and billboards, Promotional Messages aresent to customers on daily basis to promote VAS directly. For this purpose campaigns aredesigned and scheduled on daily basis for both GSM and CDMA customers through SASMarketing Automation. • Promotional text messages are sent on customer’s MDN regarding various products and services of VAS. These may be contests, festival based messages, event based etc. • These promotional Messages are designed and scheduled as a campaign on daily basis with the help of SAS Marketing Automation (SAS Customer Intelligence studio 5.1)VAS has also been now promoted through various Events all around in the city. These eventstake form of promotional activities at various occasions like festivals and concerts. With thesepromotional activities the company is able to sell VAS products and services directly to thecustomers without involving any channel in between like RMS’s (Reliance Mobile Store) andRW (Reliance World).Tele-Calling or OBD (Out Bound Dialing)VAS promotion is also done via Tele-calling which involves calling customers based on theirCurrent Balance criteria and offering them various products and services related to VAS. This isdone by INDIA CALLING which is the approved Tele-calling agency for RelianceCommunication. A database is created consisting of customer MDN’s and their response to thecall. In Delhi circle, Tele-calling is an effective means of promotion as it involves moreinteraction with the customer. Customer feels much more involved and benefits are discussed atthat very moment and satisfaction level is reached every time.IBS Hyderabad Page 46
  • 48. Value Added Services at Reliance Communications Ltd.Up-Selling VAS through Retail NetworkUp-selling is a technique whereby a salesperson induces the customer to buy more expensiveproducts and services. It is a process wherein the salesperson persuades the purchaser or thecustomer to buy more and more products/services. Here, in my project I will do the up-sellingthrough the retail network of reliance with the customer touch points and pursue them to sell theproduct/services to customers they meet everyday. The Retail Network of Reliance is wide-spread all around the circle (Delhi/NCR) with almost 150 RMS’s and around 40 RW’s.Considering its wide-spread reach and penetration in the market it is the biggest and mosteffective customer touch point and hence, Up-selling for me which requires inducing these frontend salesperson to sell the product/services shall increase the revenue and hence ARPU.Training to customer touch points for promotion of VASCustomer touch points are the interface of a product/service with customers and the employees.These are Communications channels with which companies interact directly with prospects andcustomers. Traditional touch points include face-to-face (in-store or sales representatives), phoneand mail. Digital touch points include web services, e-mail and potentially mobile phone.Training to customer touch points for promotion of VAS is a very essential and critical step toenhance sales and revenue. Training various customer touch points that includes RMS’s andRW’s include basic knowledge creation, importance in revenue generation and setting up targets.This is a step taken by the company recently looking up the market scenario and realizing thenecessity to increase VAS sales as it is the only means left to increase the ARPU level in thisongoing price war industry. Realizing the fact that VAS holds the future of revenue generationthis is a major step taken to train the touch points regarding VAS and make them realize itsimportance and set them up with targets to achieve growth.IBS Hyderabad Page 47
  • 49. Value Added Services at Reliance Communications Ltd.8.2 PROMOTIONAL STRATEGY ADOPTED FOR THE PROJECT Direct Promotion to Subscribers Promotional Messages Tele-Calling / OBD Up-Selling VAS through Retail Network Reliance Mobile Stores Reliance World Store Training to customer touch points for promotion of VAS FSDs of Reliance Mobile Store FSDs of Reliance Web World Fig. 8.18.2.1 Campaign Design through SAS Marketing AutomationIt is done on SAS Marketing Automation (SAS Customer Intelligence studio 5.1)SAS Marketing Automation provides marketers with an easy to use solution to plan, test andexecute marketing campaigns of any size or level of complexity. SAS proven capabilities forcampaign management, analytics, data integration and business intelligence, along with flexibledeployment options, empower marketers to create and deliver the right campaign at the righttime.Benefits 1. Easily create marketing campaigns. 2. Coordinate campaign activities across the enterprise. 3. Improve marketing performance. 4. Lower total cost of ownership by maintaining compatibility with existing systems. 5.IBS Hyderabad Page 48
  • 50. Value Added Services at Reliance Communications Ltd.Features • Customer segmentation, profiling and testing • Campaign planning, execution and management • Campaign measurement and analysis • Advanced analytics • Administration and security • Flexible deployment optionsA campaign is designed everyday for a burst of promotional messages to the customer baseregarding various offers and schemes available under the VAS basket.The designing of campaign is accomplished through a series of various steps like selecting theservice base (GSM or CDMA), the area (DELHI), schedule date and the communication (themessage content).The communication needs to be precise and accurate with a limited amount of characters that thesystem supports. The content is usually in a mix of language for better interpretation by thecustomer and key words highlighted to attract the same.A text for example: “FREE CALLER TUNE: AAJ har rechrg par paaye FREE caller tune 7 din tak. No Subscription fee! Tune charge: Rs10.Auto-renewal 7 din baad.Reliance”Stepwise Campaign Design Process on SASThe first step as you can see below in the screenshot is to log in the SAS with the username andpasswords provided by the company, and then select the “New Campaign” design option. Theusername and password is provided by the company to selective employees only, thus it was oneof the limitations of my project where I was not having the direct access for SAS and had to useit on my company guide’s system.After logging the next step is to select one of the succeeding options to get started with SAS. Fordesigning a campaign the option “Campaigns” is selected under the sub section “New”.IBS Hyderabad Page 49
  • 51. Value Added Services at Reliance Communications Ltd. • After getting into SAS the following screen appears on which the scheduling is done using various tools of this software.IBS Hyderabad Page 50
  • 52. Value Added Services at Reliance Communications Ltd. • On the right side of the screen you can see the various options of scheduling which helps creating a flowchart like structure to prepare the campaign schedule wise in the form of a flowchart. • The “select” option from the right side is selected to create a box like structure and then the properties of the box are chosen by clicking the option for properties and the box is set for that particular schedule. • The first box created as in following screen shot is selected for properties and chosen for business type and then the particular business type is selected (GSM or CDMA, prepaid or postpaid).IBS Hyderabad Page 51
  • 53. Value Added Services at Reliance Communications Ltd.IBS Hyderabad Page 52
  • 54. Value Added Services at Reliance Communications Ltd. • Similarly, all the scheduling necessities are selected as shown under and are then linked up together to form one single step for the schedule and then are linked up with other steps to prepare a flowchart like structure.IBS Hyderabad Page 53
  • 55. Value Added Services at Reliance Communications Ltd. • The steps are bounded together by selecting a box named “CELL”, which is used to accumulate all the previous steps as one step and bind them together to link up with the next step. • The next step as you can see is the communication, which holds the particular Promotional Message to be sent on the customer base. • The cell named communication is selected from the right side of the screen and then its properties are edited according to the message we want to send. • As we can see in the screen shot, after getting into the properties of the cell, there is a particular field wherein the Promotional Message is copied and then this particular message is sent to the customer base for VAS promotion.IBS Hyderabad Page 54
  • 56. Value Added Services at Reliance Communications Ltd.As we can see above the message is copied in the field named “SMS text”.After this scheduling, the whole process is sent for approval for the particular date and then themessage is sent to the selected customer base.8.2.2 Tele-CallingVAS promotion is also done via Tele-calling which involves calling customers based on theirCurrent Balance criteria and offering them various products and services related to VAS. This isdone by INDIA CALLING which is the approved Tele-calling agency for RelianceCommunication. A database is created consisting of customer MDN’s and their response to thecall. In Delhi circle, Tele-calling is an effective means of promotion as it involves moreinteraction with the customer. Customer feels much more involved and benefits are discussed atthat very moment and satisfaction level is reached every time.The customer base is prepared and devised on the current balance basis and provided to INDIACALLING. The performance is measured by their net contactibility and conversion rate.The daily MIS report is generated by the system and provided to the VAS department and then itis filtered as required by running queries in Microsoft Access.The steps involved regarding preparation of the base required is as under: • The first step is to import the text file into access and filter the base to get only the MDN’s (Mobile Directory Number) and the current balance:IBS Hyderabad Page 55
  • 57. Value Added Services at Reliance Communications Ltd. • The next step is to run the query as required of the current balance, i.e. segregating on the basis of the current balance to generate different base of customer MDN’s and target the service accordingly, the one below is showing the query design of current balance between Rs 3 and Rs 15: • After designing the query, it is run to get the wanted customer MDN’s:IBS Hyderabad Page 56
  • 58. Value Added Services at Reliance Communications Ltd. • Similarly other queries are run as according to the current balance to segregate the base and target accordingly. The screen shot below gives the detail of queries in the left side of the window:As we can see from the above steps, the base is segregated according to the current balance ofthe customer and we get different bases for targeting our services to those customers throughIBS Hyderabad Page 57
  • 59. Value Added Services at Reliance Communications Ltd.tele-calling done by INDIA CALLING. The final files are exported in the “text” format whichcontains all the MDN’s as according to the condition of current balance.8.2.3 Up-SellingUpselling is a sales technique designed to increase the sales invoice. It’s an important businessconcept as it requires sales people to not be order takers, but instead be active sellers. Upsellinginvolves promoting upgrades or add-ons to customers that are extra purchases and increase sales.When you up sell you offer the customer another product for purchase.Customers tend to be very sale or bargain focused. Highlighting special offers will increaseconversion rates and improve basket size. For example, if users put a regular chicken into theirshopping basket, you can suggest an organic chicken on special that might cost a little more thanthe regular chicken, but one they might not normally consider at full price.BUSINESS CHALLENGE:Today’s service providers face a tough market environment. There is little differentiation in basice-mail capabilities, and many providers offer e-mail at no cost. In this type of environment,customers often chase the lowest price, using their service provider only as a means of access.Once online, subscribers often go elsewhere for e-mail and other services such as basiccalendaring, address books, and instant messaging. With no incentive to remain loyal,subscribers are even more likely to leave — which in turn perpetuates the cycle. Other factors —such as number portability for wireless services — are accelerating this trend for wirelessproviders. Against this backdrop, there continues to be upward pressure on operating costs. In many cases,service providers face challenges to increase top-line revenue and reduce churn, while at thesame time maintaining or even reducing costs.In order to accomplish these goals, many service providers are evaluating their existinginfrastructure and alternatives, looking for ways to improve services and reduce costs throughconsolidation, performance improvements, and better support. Looking to attract and retaincustomers, many service providers are examining their options for new markets, as well as value-added and more profitable services.Increasing Average Revenue Per User (ARPU)As features and capabilities for standard e-mail mature, there is a relentless drive towardcommodity pricing. U.S. service providers offer basic e-mail service for as little as ten dollarsper month. The shifting profile of the global subscriber base will contribute significantly to thedeclining average revenue per user (ARPU).IBS Hyderabad Page 58
  • 60. Value Added Services at Reliance Communications Ltd.Many analysts say that developed countries will reach maximum penetration within the next twoto three years, which is expected to drive downward pressure on pricing as service providersfight to maintain their subscriber bases. Worldwide, it is expected that new subscriber growthwill come from developing and emerging economies such as the Far East — typically areas witha lower price threshold.As barriers to entry into the service provider market fall and the market expands, the number ofservice providers will also grow, shrinking the market share of existing providers and increasingcompetition for subscribers. Developing new services to retain existing customers and, at thesame time, attract new customers is essential for maintaining a place in this dynamic market.Attracting and Retaining Consumer and Business CustomersMost service providers do not share subscriber turnover statistics, though industry reportssuggest that larger Internet service providers have larger churn rates. In the U. S., churn rates forthe top ten service providers range from less than one percent to almost five percent monthly.For a service provider with 500,000 subscribers, this translates to a loss of up to 25,000subscribers a month.Price continues to be the top reason to switch providers, but it is not the only one. Attracting andretaining customers requires developing services that promote loyalty. Creating services thatcustomers cannot get elsewhere — and on which they depend — is the best way to developdevoted subscribers.Customer support, service availability, and uncontrolled spam are also major factors in customerchurn. In the wireless market, number portability has accelerated customer turnover. From auser perspective, most service providers offer few reasons to keep customers from switching toless expensive providers. Value-added services and tightly integrated services, however, provideincentives for customers to stay.Reducing CostsMany service providers point to spam and viruses as the single biggest factor associated withincreasing costs. Each day, the largest providers filter out billions of messages, and it isestimated that over 60 percent of all message traffic is spam. Some providers report that up to 90percent of e-mails are spam. In addition to the time and cost associated with reducing spam,service providers also spend hundreds of millions of dollars each year to stop viruses fromspreading. It’s a lot of effort just to deliver the mail.IBS Hyderabad Page 59
  • 61. Value Added Services at Reliance Communications Ltd.But spam and viruses are not the only issues affecting costs. Poor scalability and performance,increasing licensing fees, and the high cost of maintaining infrastructure and supportingcustomers also contribute to rising costs. Not to mention the fact that overall message traffic isgrowing. And, at the same time, some messaging vendors are ending support for existing productlines, forcing costly migration to other products or to other vendors. Visit RMS & RW Push for VAS Feedback to sales at RMS & comapny with RW Up-Selling Report Devising Strategies for next level i.e. Retail Integration Fig. 8.2Covering the geographical area Delhi/NCR for the project of Up-Selling required visits to anumber of Reliance Mobile Stores (RMS) and Reliance World (RW) in each 8 clusters asdivided by the company for its geographical area of operation. Pushing for VAS sales was doneat every store visited and along it getting the feedback for devising future strategies for RetailIntegration was the aim of this part of project. The Up-Selling report was submitted to thecompany as my feedback and is attached along in the annexure.8.2.4 Training To Customer Touch Points for VAS Sales and PromotionIt involves acquisition of knowledge, skills, and competencies as a result of the teaching ofvocational or practical skills and knowledge that relate to specific useful competencies. It formsthe core of apprenticeships and provides the backbone of content. In addition to the basic trainingrequired for a trade, occupation or profession recognize today the need to continue trainingbeyond initial qualifications: to maintain, upgrade and update skills throughout working life.People within many professions and occupations may refer to this sort of training as professionaldevelopment.IBS Hyderabad Page 60
  • 62. Value Added Services at Reliance Communications Ltd.Training to customer touch points was done for the following reasons: • To educate the front end people about VAS as Revenue generator • To make them realize the importance of VAS • To make them aware regarding various services under VAS • To push them for VAS sales to earn incentives • To further educate people they daily come in contact Agenda Communication Execution • Content • Invite attendees • Take on with the • Schedule • Reminder Mails program and notifications • Close the program with feedback to company Fig. 8.3 (Steps Devised for Training Customer Touch Points)Conducted a 2 hour training program everyday for a week duration regarding VAS at Reliancefor the FSD’s of Reliance Mobile Store and Reliance World Stores. It included basicknowledge of VAS products and services, to make the attendees understand about VAS and theimportance of VAS in terms of Revenue Generation. A presentation was given regarding thisand an interesting environment was created including discussion on VAS and also all theparticipants were administered a quiz in the end. Prizes were also given to the winners of thequiz session. Apart from this, trainees were constantly encouraged to promote and push the salesof VAS at their respective customer touch points to win incentives and help increase VASrevenue in the circle. GPRS leaflets describing ways to activate GPRS were also distributed.IBS Hyderabad Page 61
  • 63. Value Added Services at Reliance Communications Ltd.The training program had to be strategized right from the first step of devising the agenda,schedule and the content along with the quiz. The following steps of strategy was devised andexecuted.IBS Hyderabad Page 62
  • 64. Value Added Services at Reliance Communications Ltd. 9. Market Research for Retail Integration9.1 RESEARCH DESIGNA research design is a framework or blue print for the marketing research project. Themethodology and techniques designed is the program that guides the investigator in the processof collecting, analyzing and interpreting data. The specifications of the details of how theresearch was conducted is given below:9.1.1 TYPE OF RESEARCHIn the initial phase of the project exploratory research was conducted .The main objective ofexploratory research was to define the problem more precisely, identification of relevant courseof action and gaining additional insights. Qualitative research was the main objective to havedeeper understanding of the problem.The following exploratory studies were employed: 1. Interviews with the employees of the organization. 2. Interviews with retailing experts to determine the trends ,such as diversification of Value Added Services offered by the operator, growing competition and consumer perception.The insights from the exploratory research were verified using descriptive research. Single cross-sectional study was conducted. Information was collected from a given sample of populationonly once by drawing the sample of respondents from target population. The objective ofexploratory research was to identify various factors which influence sales and promotion of VASthrough the retail network.9.1.2 INFORMATION NEEDS9.1.2.1 Data collected from secondary sourcesSecondary data was important to the project to gain understanding of the problem more clearly,for developing appropriate research design and to interpret primary data more insightfully. Thee-Retail phenomenon has been largely overlooked for quite some time. However, a number ofstudies have attempted to investigate this phenomenon, mainly through empirical surveys indifferent countries and market segments.IBS Hyderabad Page 63
  • 65. Value Added Services at Reliance Communications Ltd.The main sources of secondary data was• Company’s revenue reports i.e. revenue generated through different channels.9.1.2.2 Data collected from primary sourcesThe primary data was collected from the survey through one on one interview with the retailer.Questionnaire was used to record the responses.9.1.3 MEASUREMENT AND SCALING PROCEDURETo rate the importance of various factors Likert scale was used that required the respondent toindicate their degree of agreement and disagreement. Likert scale was chosen due to itsadvantages over other scaling techniques.The following advantages were observed in using Likert scale: 1. Easy to construct and administer 2. Multivariate techniques like factor analysis can easily be applied.9.1.4 QUESTIONNAIRE DESIGNThere were three objectives that were kept in mind while designing the questionnaire: 1. Questionnaire must translate the information needed into a set of specific questions that the respondents can and will answer. 2. It must uplift, motivate, and encourage the respondent to get involved in the interview, to cooperate and to complete the interview. 3. It should minimize response error.The questionnaire comprised of close ended questions to capture the perception of the retailer.The questionnaire was pre-tested and timed to take approximately 10(+5 minutes) for arespondent to complete. The questionnaire was structured and designed to reduce the level of“respondent fatigue” to an extent that was practically possible.Pre- test and Pilot testAfter designing the questionnaire, a pre-test was conducted and a pilot testing was carried out.The aim of testing the questionnaire was to minimize measurement error.The Pre Test was conducted the in three ways: 1. Literature review (Secondary data) 2. Expert opinion 3. Cognitive recognitionIBS Hyderabad Page 64
  • 66. Value Added Services at Reliance Communications Ltd.The questionnaire was discussed among the marketing team of Reliance Communication Ltd.and Key decision makers. The following questions were asked: 1. Are the questions and responses valid and reliable? 2. Are they appropriate? 3. Are they both necessary and sufficient?Then, the questionnaire was administered to a small number of people drawn from thepopulation of interest through personal interviews. The time required to complete eachquestionnaire was measured, additional information which was provided to clarify directions andquestion wording was analyzed. Debriefing was carried out and there feedback was noted.The questionnaire was then revised as needed.Pre testing aimed at following: 1. Identifying sources of potential non-sample error: 2. Identifying error the respondent makes due to the questionnaire; 3. Identifying errors due to the method of delivery or errors caused by sequencing; and 4. Identifying errors caused by the interaction of these factors.Following were the benefits of pre –testing of questionnaire: 1. Reduced survey development time 2. Reduced survey costs 3. Improved the quality of data collectedThe pilot study was a simulation of the full project, including the questionnaire, and all otheraspects. A sample of 25 responses were obtained, coded, and analyzed. Questions that were notproviding useful data were discarded, and the final revisions of the questionnaire were made.9.1.5 SAMPLE DESIGNSample design covers the method of selection, the sample structure and plans for analyzing andinterpreting the results. Sample design affects the size of the sample and the way in whichanalysis is carried out.The sample design in the project is based on Probability sampling which is built around theconcept of random selection. This permits justifiable inference from the sample to thepopulation, at quantified level of precision. Probability sampling also guard against sample biasin a way that selection by judgment or convenience cannot. Systematic sampling was chosen forthe survey.IBS Hyderabad Page 65
  • 67. Value Added Services at Reliance Communications Ltd. Sampling Design Retailers of various locations be it strategically placed in a market or Target Population placed in a relatively less crowded market. Retailers of south and central cluster Sampling Frame of Delhi/NCR region Sampling Technique Systematic sampling Sample size 25 Sequentially sample the population elements ,collect and analyze the Execution data at each stage Table 9.1: Sampling Design9.1.6 FIELD WORKField work was conducted from 19.04.2010 to 22.04.2010 in Delhi. The data was collectedthrough one-on-one interviews. The location map of the areas to be covered can be found inAnnexure II.9.1.7 DATA ANALYSISAs the sample size was only 25, not much analysis could be done for the same. Also, the main aim of theresearch was to understand the retailer’s perspective regarding VAS integration through incentives andhence promotion to end customers.To get a clear picture of the retailer response a frequency analysis was done wherein the frequency ofretailer’s response was analyzed. The analysis is done using SPSS 16.0 for windows.Following are the graph representations regarding the frequency of retailers for each question asked andthe interpretation drawn along.IBS Hyderabad Page 66
  • 68. Value Added Services at Reliance Communications Ltd. Fig. 9.1: Total footfallInterpretationThis is the first question asked which is the “total footfall of your store”. This question is askedto get an idea regarding the total number of customers at an average that the retailer is serving ondaily basis. The response is highest for 100-150 customers per day. Fig. 9.2: Retailer’s Knowledge for VASInterpretationThis is the second questin asked which is “know completely about VAS”. This question is askedto get to know the awareness they have regarding VAS before launching the incentive scheme.The highest response is “Disagree”IBS Hyderabad Page 67
  • 69. Value Added Services at Reliance Communications Ltd. Fig. 9.3: Retailers fully aware of VASInterpretationThis is the third question asked which is “fully aware of major services”. This question is askedto get to know the awareness they have regarding major services of VAS like CRBT, MCA,GPRS etc., before launching the incentive scheme.The highest response is “Agree”, ie 15 out of 25 retailers are aware of major Value AddedServices. Fig. 9.4: Customers that come enquiring for VASInterpretationThis is the fourth question asked which is “how many customers come enquiring for VAS”. Thisquestion is asked to get to know the awareness customers have regarding VAS and their usage, ifthey are using these services and buying them. The highest response is “1-10”, ie 25 out of 25retailers say that only 1-10 customers come enquiring for value added services on daily basis.IBS Hyderabad Page 68
  • 70. Value Added Services at Reliance Communications Ltd. Fig 9.5: Ususal VAS activationsInterpretationThis is the question asked which is “customers usually come for activations like”, with optionsgiven ie. CRBT, MCA, Cricket, GPRS or ANY OTHER. This question is asked to get to knowthe demand and usage of these particular services. The highest response is “AGREE”, ie 19 outof 25 retailers agree that customers if come for any VAS service activation then those servicesfall in this category only. Fig. 9.6: Major VAS serviceInterpretationThis is the question asked which is “for which service do customers usually come”, with optionsgiven ie. CRBT, MCA, Cricket, GPRS or ANY OTHER. This question is asked to get to knowthe demand and usage of these particular services. The highest response is for theservice“MCA”, ie 13 out of 25 retailers say that mostly customers come for MCA under ValueAdded Services. And the second highest being CRBT for which 11 out of 25 retailers agreed.IBS Hyderabad Page 69
  • 71. Value Added Services at Reliance Communications Ltd. Fig. 9.7: Retailer will promote if given incentivesInterpretationThis is the question asked which is “will promote if given incentive”. This question is asked toknow if the retailer is interested in promoting and pushing Value Added Services if givenincentives. The highest response is for “AGREE”, ie 16 out of 25 retailers say that they willpromote and push Value Added Services if given incentives. Fig 9.8: Incentive expectedInterpretationThis is the question asked which is “incentive I expect”. This question is asked to know theincentive that the retailer expect for promoting and pushing Value Added Services. The highestresponse is for “15-20%”, ie 17 out of 25 retailers say that they will promote and push ValueAdded Services if given incentives of about 15-20%.IBS Hyderabad Page 70
  • 72. Value Added Services at Reliance Communications Ltd. Total Footfall Retailers of Customers Total Footfall 10-50 0 50-75 2 75-100 6 100-150 13 >150 4 Table 9.2: Retailer’s total footfall Retailers Total Footfall 0 4 2 10-50 6 50-75 75-100 13 100-150 >150 Fig. 9.9: Retailers Total FootfallIBS Hyderabad Page 71
  • 73. Value Added Services at Reliance Communications Ltd. Percentage of Reliance Customers Count of Visit per day / Retailer Retailer 10% 3 20% 13 30% 9 Table 9.3: percentage & count of reliance customers Percentage of Reliance Customers Visit per day / Retailer 10% 20% 30% Fig. 9.10: Percentage of Reliance Customers Visit per day / RetailerIBS Hyderabad Page 72
  • 74. Value Added Services at Reliance Communications Ltd. GROWTH OPPORTUNITY 250 200 5 150 5 Number of Customers Come enquiring for VAS 100 5 200 Total footfall 5 150 50 5 100 75 50 0 1 2 3 4 5 6 Fig. 9.11: Growth Opportunity Awareness amongst Retailers 16 14 12 10 Low 8 Medium 6 High 4 2 0 Low Medium High Fig. 9.12: Awareness amongst retailersAction TakenLooking at the response of the survey with the retailer’s conclusion was made to launch the e-Retailer scheme without any hesitation as the maximum number of retailers is ready willingly topromote and push for Value Added Services if they are given incentives. The scheme launchedwas regarding the same guidelines, which included a certain percentage of incentive for retailersfor activating or subscribing the customer with CRBT i.e. Caller Ring Back Tone as ValueAdded Service.IBS Hyderabad Page 73
  • 75. Value Added Services at Reliance Communications Ltd. 10. Market Research to Analyze Customer Behavior for VAS10.1 INTRODUCTIONIt is essential for any firm to undergo a market research and analyze where its product/servicestand in the market and recognize factors which can help increase the revenue and take theorganization into the right direction for its product/services. It helps in deciding the action planand frame strategies in order to increase its sales and awareness amongst the masses.In my project I carry out a research with the help of a survey by coming in contact with thecustomers and let know their awareness, liking and usage of value added services with the helpof a questionnaire and followed by its analyses using SPSS.This helps the organization know how their product/services is doing in the market and hencestrategize VAS promotions accordingly.10.2 METHODOLOGYThe methodology adopted and devised is as under: Exploratory Research Questionnaire Design Survey Research Data Collection Data processing and analysis Fig. 10.1: Methodology for researchIBS Hyderabad Page 74
  • 76. Value Added Services at Reliance Communications Ltd.10.3 RESEARCH DESIGNA research design is a framework or blue print for the marketing research project. Themethodology and techniques designed is the program that guides the investigator in the processof collecting, analyzing and interpreting data. The specifications and the details of how theresearch was conducted are given below:10.3.1 TYPE OF RESEARCHIn the initial phase of the project exploratory research was conducted .The main objective ofexploratory research was to define the problem more precisely, identification of relevant courseof action and gaining additional insights. Qualitative research was the main objective to havedeeper understanding of the problem.The following exploratory studies were employed: 3. Interviews with the employees of the organization. 4. Interviews with retailing experts to determine the trends, such as awareness of Value Added Services offered by the operator, demand for services in market, growing competition and consumer perception.The insights from the exploratory research were verified using descriptive research. Single cross-sectional study was conducted. Information was collected from a given sample of populationonly once by drawing the sample of respondents from target population. The objective ofexploratory research was to identify various factors which influence sales and behavior regardingValue Added Services amongst end users.10.3.2 INFORMATION NEEDS10.3.2.1 Data collected from secondary sourcesSecondary data was important to the project to gain understanding of the situation more clearly,for developing appropriate research design and to interpret primary data more insightfully. Thecustomer phenomenon has been largely overlooked for quite some time. However, a number ofstudies have attempted to investigate this phenomenon, mainly through empirical surveys indifferent countries and market segments.The main sources of secondary data wereIBS Hyderabad Page 75
  • 77. Value Added Services at Reliance Communications Ltd. 1. Government bodies-TRAI, CSO, COAI 2. Research Publications10.3.2.2 Data collected from primary sourcesThe primary data was collected from the survey through one on one interview with the customer.Questionnaire was used to record the responses.10.3.3 MEASUREMENT AND SCALING PROCEDURETo rate the importance of various factors Likert scale was used that required the respondent toindicate their degree of agreement and disagreement. Likert scale was chosen due to itsadvantages over other scaling techniques.The following advantages were observed in using Likert scale: 3. Easy to construct and administer 4. Multivariate techniques like factor analysis can easily be applied.10.3.4 QUESTIONNAIRE DESIGNThere were three objectives that were kept in mind while designing the questionnaire: 4. Questionnaire must translate the information needed into a set of specific questions that the respondents can and will answer. 5. It must uplift, motivate, and encourage the respondent to get involved in the interview, to cooperate and to complete the interview. 6. It should minimize response error.The questionnaire comprised of close ended questions to capture the perception of the retailer.The questionnaire was pre-tested and timed to take approximately 10(+5 minutes) for arespondent to complete. The questionnaire was structured and designed to reduce the level of“respondent fatigue” to an extent that was practically possible.Pre- test and Pilot testAfter designing the questionnaire, a pre-test was conducted and a pilot testing was carried out.The aim of testing the questionnaire was to minimize measurement error.The Pre Test was conducted the in three ways: 4. Literature review (Secondary data) 5. Expert opinionIBS Hyderabad Page 76
  • 78. Value Added Services at Reliance Communications Ltd. 6. Cognitive recognitionThe questionnaire was discussed among the marketing team of Reliance Communication Ltd.and Key decision makers. The following questions were asked: 4. Are the questions and responses valid and reliable? 5. Are they appropriate? 6. Are they both necessary and sufficient?Then, the questionnaire was administered to a small number of people drawn from thepopulation of interest through personal interviews. The time required to complete eachquestionnaire was measured, additional information which was provided to clarify directions andquestion wording was analyzed. Debriefing was carried out and there feedback was noted.The questionnaire was then revised as needed.Pre testing aimed at following: 5. Identifying sources of potential non-sample error: 6. Identifying error the respondent makes due to the questionnaire; 7. Identifying errors due to the method of delivery or errors caused by sequencing; and 8. Identifying errors caused by the interaction of these factors.Following were the benefits of pre –testing of questionnaire: 4. Reduced survey development time 5. Reduced survey costs 6. Improved the quality of data collectedThe pilot study was a simulation of the full project, including the questionnaire, and all otheraspects. A sample of 25 responses were obtained, coded, and analyzed. Questions that were notproviding useful data were discarded, and the final revisions of the questionnaire were made.10.3.5 SAMPLE DESIGNSample design covers the method of selection, the sample structure and plans for analyzing andinterpreting the results. Sample design affects the size of the sample and the way in whichanalysis is carried out.The sample design in the project is based on Probability sampling which is built around theconcept of random selection. This permits justifiable inference from the sample to thepopulation, at quantified level of precision. Probability sampling also guard against sample biasIBS Hyderabad Page 77
  • 79. Value Added Services at Reliance Communications Ltd.in a way that selection by judgment or convenience cannot. Systematic sampling was chosen forthe survey. Sampling Design Reliance Customers for both GSM Target Population and CDMA connection in Delhi region. Sampling Frame Customers of Delhi/NCR region Sampling Technique Systematic sampling Sample size 125 Sequentially sample the population elements ,collect and analyze the Execution data at each stage Table 10.1: sampling design10.3.6 FIELD WORK and DATA COLLECTIONField work was conducted from 1.05.2010 to 10.05.2010 in Delhi. The data was collectedthrough one-on-one interviews. The location map of the areas covered can be found in AnnexureII. Data was collected through the survey conducted on various people at Reliance Mobile Storesand Reliance World Stores. Data was collected by visiting various stores in the Delhi/NCRregion. To accumulate a sample of 125 a questionnaire was prepared and the respondent’sresponse was taken at these stores which also gave an opportunity to discuss and converseregarding Value Added Services.IBS Hyderabad Page 78
  • 80. Value Added Services at Reliance Communications Ltd.10.4 ANALYSIS10.4.1 DATA ANALYSISDemographic Details Number of Respondents Age Group Falling in Age Group 18-25 32 25-35 50 35-40 37 40-50 6 >50 0 Table 10.2: customer’s age group Number of Respondents Falling in Age Group 6 32 37 18-25 25-35 35-40 40-50 50 >50 Fig. 10.2: Respondent’s Age GroupInterpretationAs we can see from the chart above, maximum of the respondents fall in the age group of 25-35years. This age group represent the working class, be it the service class or self-employed people.Hence, from this detail of demographic we can take a look at the major segment which usesmobile phone actively and targeting various Value Added Services to this class will be beneficialto the company.IBS Hyderabad Page 79
  • 81. Value Added Services at Reliance Communications Ltd. Respondent Occupation Segment Self Employed 27 Service 66 Student 26 House Wife 6 Another 0 Table 10.3: customer’s occupation Respondent Segment 0 6 27 26 Self Employed Service Student 66 House Wife Another Fig. 10.3: Respondent OccupationInterpretationAs we can see from the chart above, maximum of the respondents fall in the service classsegment. Hence, from this detail of demographic we can take a look at the major segment whichuses mobile phone actively and targeting various Value Added Services to this segment will bebeneficial to the company. Number of Customers Monthly Bill with particular Monthly Bill Rs. 150-250 6 Rs. 250-350 31 Rs. 350-500 6 Rs. >500 82 Table 10.4: Customer’s monthly billIBS Hyderabad Page 80
  • 82. Value Added Services at Reliance Communications Ltd. Number of Customers with 100 particular Monthly Bill 80 60 40 20 82 Number of Customers 6 31 with particular Monthly 0 6 Bill Rs. 150- Rs. 250- 250 Rs. 350- 350 Rs. >500 500 Fig. 10.4: Customer’s Average monthly BillInterpretationThe above chart reflects the amount of usage amongst the respondents. How much they use theirmobile phone on a monthly basis which gets reflected in their monthly bill. We can see here thatthe usage is pretty good as majority of respondents pay a monthly bill of over Rs 500. Number of Monthly Customers with Expenditure Monthly VAS Expenditure Rs. 0 53 Rs. <50 43 Rs. 50-100 23 Rs. >100 6 Table 10.5: customer’s monthly VAS expenditureIBS Hyderabad Page 81
  • 83. Value Added Services at Reliance Communications Ltd. Number of Customers with Monthly VAS Expenditure 60 50 40 30 53 Number of Customers 20 43 for Monthly VAS 10 23 Expenditure 6 0 Rs. 0 Rs. <50 Rs. 50- Rs. 100 >100 Fig. 10.5: Customer’s Average monthly VAS expenditureInterpretationThe above chart reflects the amount of VAS usage amongst the respondents. How much they useValue Added Services on their mobile phone on a monthly basis which gets reflected in theirmonthly VAS Expenditure. We can see here that the usage is not good as majority ofrespondents expend Rs. 0 on value added services. Only around 30 respondents spend a fairamount towards VAS. Network & Subscriber type Cross tabulation Count Subscriber type Prepaid Postpaid Total Network CDMA 17 71 88 GSM 37 0 37 Total 54 71 125 Table 10.6: Network & subscriber type cross tabulationIBS Hyderabad Page 82
  • 84. Value Added Services at Reliance Communications Ltd. Fig. 10.6: Subscriber Type amongst customersInterpretationThis cross tabulation shows the ratio of respondents falling in prepaid or postpaid category. Thisis a part of customer profiling to understand the survey sample. Maximum number ofrespondents falls in the CDMA category of network with majority postpaid connections whileunder GSM network all of them are prepaid customers. Age & Awareness of value added services Cross tabulationCount I am aware of value added services Strongly Disagree Disagree Neutral Agree Strongly Agree TotalAge 18-25 0 6 7 13 6 32 25-35 0 6 22 22 0 50 35-40 6 17 14 0 0 37 40-50 6 0 0 0 0 6Total 12 29 43 35 6 125 Table 10.7: Age & Awareness of value added services Cross tabulationIBS Hyderabad Page 83
  • 85. Value Added Services at Reliance Communications Ltd. Fig. 10.7: Age & Awareness of value added services Cross tabulationInterpretationThis cross tabulation shows the ratio of respondents falling in respective age group and theirawareness regarding value added services. A chi-square test has also been performed under tothrow light upon this tabulation. From the chart above we can see that maximum number ofrespondents who agree for VAS awareness fall in the age group 25-35. Occupation & Awareness of value added services Cross tabulationCount I am aware of value added services Strongly Disagree Disagree Neutral Agree Strongly Agree TotalOccupation Self Employed 6 11 5 5 0 27 Service 0 12 31 17 6 66 Student 0 6 7 13 0 26 House Wife 6 0 0 0 0 6Total 12 29 43 35 6 125 Table 10.8: Occupation & Awareness of value added services Cross tabulationIBS Hyderabad Page 84
  • 86. Value Added Services at Reliance Communications Ltd.Fig. 10.8: Occupation & Awareness of value added services Cross tabulationTwo variable Chi square test of Independence Age Group Awareness 18-25 25-35 35-40 40-50 >50 Aware 19 22 0 0 0 Unaware 13 28 37 6 0 Table 10.9: VAS Awareness with different age groupsIn this case the research question is: Is age independent of Value Added Services Awareness?Ho=There is no significant difference of awareness with age.H1=There is significant difference of awareness with age.IBS Hyderabad Page 85
  • 87. Value Added Services at Reliance Communications Ltd.Aware 18-25 25-35 35-40 40-50 >50ness obser Expe (O- Obser Expe (O- Obser Expe (O- Obser Expe (O- Obser Expe (O- TOT ved cted E)2 ved cted E)2 ved cted E)2/ ved cted E)2 ved cted E)2 AL /E /E E /E /EAware 19 16 4.5 22 25 4.5 0 18.5 171. 0 3 4.5 0 0 0 62.5 125Unaw 13 16 4.5 28 25 4.5 37 18.5 171. 6 3 4.5 0 0 0 84are 125TOTA 32 50 37 6 0L Table10.10: Frequency distribution table for chi square test of Independence χ2= 369.25 df =(c-1)(r-1) =4 Taking α = 0.05 χ2 critical = 9.49 Null hypothesis is rejected since, χ2 ≥ 9.49 So there is significant difference in the level of awareness of users for age as criterion. Analysis of Factors Factor analysis attempts to identify underlying factors that explain a pattern of correlations within the set of observed variables. Variables under consideration for the research are: a) Awareness of Value Added Services b) Value for money/ services worth its charges c) If services are useful d) Variety of services e) Using these services f) Will soon subscribe to these ser vices g) Not aware of all kinds of services h) Pocket does not allow to subscribe these services i) Aware of them in other operators IBS Hyderabad Page 86
  • 88. Value Added Services at Reliance Communications Ltd. j) Use Mobile Internet k) Mobile internet convenience l) Enjoy Caller Ring Back Tones Factor analysis will identify small number of factors that explain most of the variance observed in these variables. Correlation Matrix I am These These There is I am I will I am My I am I often Interne I enjoy aware servic servic variety of alrea soon not pocket aware use my t caller of es are es are services dy subscri awar does of mobile throug ring value worth useful according using be to e of not these phone h back added its for to my these one of all allow service for mobile tones/ service charg me. needs. servic the the me to s in browsi is very hello s es. es. service kind subscri Vodafo ng conven tunes s. of be to ne / interne ient. on my servic any of Airtel / t. phone es. these Idea / service Aircel s.Correlation I am aware of value 1.000 0.509 0.714 0.728 0.508 0.463 - -0.191 0.016 0.402 0.516 0.587 added services 0.257 These services are 0.509 1.000 0.776 0.626 0.777 0.623 0.017 -0.213 0.084 0.758 0.640 0.699 worth its charges. These services are 0.714 0.776 1.000 0.806 0.828 0.699 0.044 -0.095 0.236 0.641 0.632 0.824 useful for me. There is variety of 0.728 0.626 0.806 1.000 0.699 0.591 0.265 -0.140 0.159 0.618 0.742 0.732 services according to my needs. I am already using 0.508 0.777 0.828 0.699 1.000 0.589 0.015 -0.034 0.401 0.865 0.724 0.907 these services. I will soon 0.463 0.623 0.699 0.591 0.589 1.000 0.063 -0.076 0.349 0.400 0.466 0.509 subscribe to one of the services. I am not aware of -0.257 0.017 0.044 0.265 0.015 -0.063 1.000 0.073 -0.011 0.033 0.069 0.061 all the kind of services. My pocket does -0.191 -0.213 -0.095 -0.140 -0.034 -0.076 0.073 1.000 0.009 -0.218 -0.209 0.058 not allow me to subscribe to any of these services. I am aware of these 0.016 0.084 0.236 0.159 0.401 0.349 - 0.009 1.000 0.344 0.245 0.191 services in 0.011 Vodafone / Airtel / Idea / Aircel I often use my 0.402 0.758 0.641 0.618 0.865 0.400 0.033 -0.218 0.344 1.000 0.749 0.773 mobile phone for browsing internet. Internet through 0.516 0.640 0.632 0.742 0.724 0.466 0.069 -0.209 0.245 0.749 1.000 0.738 mobile is very convenient. IBS Hyderabad Page 87
  • 89. Value Added Services at Reliance Communications Ltd. I enjoy caller ring 0.587 0.699 0.824 0.732 0.907 0.509 0.061 0.058 0.191 0.773 0.738 1.000 back tones/hello tunes on my phone.Sig. (1- I am aware of value 0.000 0.000 0.000 0.000 0.000 0.002 0.016 0.430 0.000 0.000 0.000tailed) added services These services are 0.000 0.000 0.000 0.000 0.000 0.427 0.009 0.176 0.000 0.000 0.000 worth its charges. These services are 0.000 0.000 0.000 0.000 0.000 0.312 0.147 0.004 0.000 0.000 0.000 useful for me. There is variety of 0.000 0.000 0.000 0.000 0.000 0.001 0.060 0.038 0.000 0.000 0.000 services according to my needs. I am already using 0.000 0.000 0.000 0.000 0.000 0.433 0.352 0.000 0.000 0.000 0.000 these services. I will soon 0.000 0.000 0.000 0.000 0.000 0.242 0.199 0.000 0.000 0.000 0.000 subscribe to one of the services. I am not aware of 0.002 0.427 0.312 0.001 0.433 0.242 0.209 0.453 0.357 0.222 0.248 all the kind of services. My pocket does 0.016 0.009 0.147 0.060 0.352 0.199 0.209 0.460 0.007 0.010 0.261 not allow me to subscribe to any of these services. I am aware of these 0.430 0.176 0.004 0.038 0.000 0.000 0.453 0.460 0.000 0.003 0.017 services in Vodafone / Airtel / Idea / Aircel I often use my 0.000 0.000 0.000 0.000 0.000 0.000 0.357 0.007 0.000 0.000 0.000 mobile phone for browsing internet. Internet through 0.000 0.000 0.000 0.000 0.000 0.000 0.222 0.010 0.003 0.000 0.000 mobile is very convenient. I enjoy caller ring 0.000 0.000 0.000 0.000 0.000 0.000 0.248 0.261 0.017 0.000 0.000 back tones/hello tunes on my phone.a.Determinant = 4.00E-006 Table 10.11: SPSS output-Correlation Matrix for drivers of Value Added Services Customer Behavior Assumptions: The data is assumed to be distributed normally for each pair of variables and observations are independent of each other. The assumption of normality is important to generalize the results of the analysis beyond the sample collected. Data screening Since SPSS will always find a factor solution to a set of variables the solution will have any real meaning if variable analyzed are not sensible. The inter-correlation among the variables is checked to ensure the reliability of factor analysis. The correlation matrix is created as a part of main factor analysis. IBS Hyderabad Page 88
  • 90. Value Added Services at Reliance Communications Ltd.Preliminary analysisTable 10.11 shows bridged version of R-matrix. The top half of the table contains Pearsoncorrelation coefficient between all pairs of variables. The matrix can be used to check the patternof relationship. Since the values with significance greater than .05 are less than 0.9 sosingularities is not a problem in our analysis.All variables in the research correlates fairly well and none of the correlation coefficient areparticularly large; therefore there is no need to consider eliminating any questions at this stage.Table 10.12 shows the Kaiser-Meyer –Olkin measure of sampling adequacy and barlett’s test ofsphericity. The KMO statistic varies between 0 and 1.A value of 0 indicates that the sum ofpartial correlation is large relative to the sum of correlations, indicating diffusion in the pattern ofcorrelation (hence factor analysis is likely to be inappropriate).Kaiser (1974) recommendsaccepting values greater than 0.5 as acceptable (values below this leads to increase in samplesize).The value of KMO is .706 which fall in range so factor analysis is appropriate to be used inthis research. KMO and Bartletts TestKaiser-Meyer-Olkin Measure of Sampling Adequacy. .706Bartletts Test of Sphericity Approx. Chi-Square 1.481E3 df 66 Sig. .000 Table 10.12: SPSS output -KMO and Barlett’s TestBarlett’s Test of sphercity measures the null hypothesis that the original correlation matrix is anidentity matrix. For factor analysis to work we need some relationship between variables and ifthe R-matrix were an identity matrix then all correlation coefficient would be zero, There foresignificance of this test is very important. For this research the barlett’s test is highly significant(p<0.001) and therefore factor analysis is appropriate.Factor ExtractionTable 10.13 list the Eigen values associated with each linear component (factor) beforeextraction, after extraction and after rotation. The Eigen value associated with each variableindicates the variance explained by that particular linear component and SPSS also displays theEigen value in terms of percentage of variance explained. The first few factors explain largervariance whereas subsequent factors explain only small amount of variance.IBS Hyderabad Page 89
  • 91. Value Added Services at Reliance Communications Ltd. Total Variance ExplainedComponent Initial Eigen values Extraction Sums of Squared Rotation Sums of Squared Loadings Loadings Total % of Cumulative Total % of Cumulative Total % of Cumulative Variance % Variance % Variance %1 6.463 53.858 53.858 6.463 53.858 53.858 6.441 53.678 53.6782 1.259 10.494 64.351 1.259 10.494 64.351 1.215 10.125 63.8033 1.115 9.293 73.644 1.115 9.293 73.644 1.181 9.841 73.6444 1.015 8.457 82.1015 0.768 6.403 88.5046 0.571 4.761 93.2657 0.330 2.754 96.0188 0.189 1.574 97.5939 0.131 1.089 98.68210 0.076 0.637 99.31911 0.050 0.416 99.73512 0.032 0.265 100.000 Extraction Method: Principal Component Analysis. Table 10.13: SPSS output-Eigen values and variance explained The Eigen values associated with these factors are again displayed (and the percentage of variance explained) in the columns labeled Extraction Sum of Squared loadings. The values in this part of the table are same as the values before extraction except that the values for the discarded factors are ignored (hence the table is blank after fourth factor).In the final part of the table (labeled rotation sum of square loadings), the Eigen values of the factors after rotation are displayed. Rotation has the effect of optimizing the factor structure and one consequence for these data is that the relative importance of the four factors is equalized. Table 10.14 shows the table of communalities before and after extraction. Principal component analysis works on the initial assumption that all variance is common; therefore before extraction the communalities are all 1.The communalities in the column labeled Extraction reflect the common variance of the data structure. After extraction some of the factors are discarded and so some information is lost. The amount of variance in each variable that can be explained by the retained factors is represented by communalities after extraction. IBS Hyderabad Page 90
  • 92. Value Added Services at Reliance Communications Ltd. Communalities Initial ExtractionI am aware of value added services 1.000 0.727These services are worth its charges. 1.000 0.734These services are useful for me. 1.000 0.841There is variety of services according to my needs. 1.000 0.829I am already using these services. 1.000 0.906I will soon subscribe to one of the services. 1.000 0.559I am not aware of all the kind of services. 1.000 0.884My pocket does not allow me to subscribe to any of these 1.000 0.366services.I am aware of these services in Vodafone / Airtel / Idea / Aircel 1.000 0.755I often use my mobile phone for browsing internet. 1.000 0.718Internet through mobile is very convenient. 1.000 0.695I enjoy caller ring back tones/hello tunes on my phone. 1.000 0.823Extraction Method: Principal Component Analysis. Table 10.14: SPSS output-Communalities before and after extraction Component Matrix Component 1 2 3I am aware of value added services 0.701 -0.479 -0.086These services are worth its charges. 0.846 -0.093 -0.100These services are useful for me. 0.916 -0.034 -0.082 0.863 0.047There is variety of services according to my needs. -0.286I am already using these services. 0.926 0.160 0.151 0.704 -0.045I will soon subscribe to one of the services. 0.249 0.036 0.722I am not aware of all the kind of services. -0.602My pocket does not allow me to subscribe to any of these -0.166 0.543services. 0.208I am aware of these services in Vodafone / Airtel / Idea / 0.314 0.381Aircel 0.715 0.839 0.105I often use my mobile phone for browsing internet. 0.055IBS Hyderabad Page 91
  • 93. Value Added Services at Reliance Communications Ltd. 0.828 0.031Internet through mobile is very convenient. -0.093 0.897 0.133I enjoy caller ring back tones/hello tunes on my phone. -0.038Extraction Method: Principal Component Analysis.a. 3 components extracted. Table 10.15: SPSS output-Component matrix before rotationThis output also shows the component matrix before rotation .Table 10.11 contains the loadingsof each variable onto each factor. By default SPSS displays the entire loadings .This matrix is notparticularly important for interpretation.The justification of extracting 3 factors is given by scree plot. The scree plot output is shownbelow with a thunderbolt indicating the point of inflexion on the curve. Fig. 10.9 SPSS output-Scree PlotFactor RotationTable 10.16 shows the rotated component matrix which is a matrix of the factor loadings of eachvariable onto each factor. The variables included in the factor are highlighted to indicate theassociation of the variable with the factor. Orthogonal rotation is used because of the assumptionthat the factors are theoretically unrelated to each other.IBS Hyderabad Page 92
  • 94. Value Added Services at Reliance Communications Ltd. Rotated Component Matrix Component 1 2 3I am aware of value added services 0.691 -0.345 -0.362These services are worth its charges. 0.847 -0.054 -0.116These services are useful for me. 0.915 -0.060 -0.021There is variety of services according to my needs. 0.879 0.172 -0.163I am already using these services. 0.920 -0.033 0.242I will soon subscribe to one of the services. 0.687 -0.238 0.175I am not aware of all the kind of services. 0.091 0.936 0.024My pocket does not allow me to subscribe to any of these services. -0.162 0.281 0.510I am aware of these services in Vodafone / Airtel / Idea / Aircel 0.282 -0.202 0.797I often use my mobile phone for browsing internet. 0.837 -0.007 0.131Internet through mobile is very convenient. 0.833 0.036 -0.029I enjoy caller ring back tones/hello tunes on my phone. 0.901 0.073 0.082Extraction Method: Principal Component Analysis.Rotation Method: Varimax with Kaiser Normalization.a. Rotation converged in 6 iterations. Table 10.16: SPSS output-Rotated component matrixInterpretationThe contents of the variables is analyzed which is loaded on the same factor to identify thecommon theme.The variables which load highly on factor 1 are services are worth its charges, services areuseful, variety of services, already using these services, use mobile internet and use Caller RingBack Tone/Hello Tunes. The factor 1 is labeled as: VAS UsageThe variables which highly load on factor 2 is: not aware of all the kind of services. The factor 2is labeled as: VAS Awareness.IBS Hyderabad Page 93
  • 95. Value Added Services at Reliance Communications Ltd.The variable which highly correlates with factor 3 is awareness of these services in Vodafone /Airtel / Idea / Aircel. The factor is labeled as: Substitute Awareness.Relative Importance of the factors*The various factors which drive the user for the use of Value Added Services were analyzed fortheir relative importance in accordance with the responses through likert scale. The followingtable shows the frequency of responses for each attribute. The highlighted figure shows themaximum frequency of the degree of importance for an attribute.Attributes 1 2 3 4 5 Strongly Disagree Strongly AgreeAware of value added 9.6% 23.2% 34.4% 28% 4.8%servicesThese services are worth 0% 28% 33.6% 38.4% 0%its charges.These services are useful 8.8% 14.4% 34.4% 37.6% 4.8%for me.There is variety of services 4.8% 14.4% 56.8% 24% 0%according to my needs.Already using these 8.8% 33.6% 0% 52% 5.6%servicesI will soon subscribe to one 4% 28% 38.4% 29.6% 0%of the services.I am not aware of all the 0% 59.2% 8.8% 32% 0%kind of services.My pocket does not allow 0% 71.2% 0% 28.8% 0%me to subscribe to any ofthese services.I am aware of these 0% 0% 4% 76% 20%services in Vodafone /Airtel / Idea / AircelI often use my mobile 0% 37.6% 28.8% 28% 5.6%phone for browsinginternet.Internet through mobile is 0% 23.2% 29.6% 37.6% 9.6%very convenient.IBS Hyderabad Page 94
  • 96. Value Added Services at Reliance Communications Ltd.I enjoy caller ring back 4.8% 28% 9.6% 48.8% 8.8%tones/hello tunes on myphone. Table 10.17: Relative Importance of the factors*Responses from Likert scale are treated as ordinal data because when using five levels,assumption that adjacent levels are equidistant is not valid. Likert Scale Rating (5 point) I enjoy caller ring back tones/hello tunes… Internet through mobile is very convenient. I often use my mobile phone for browsing… I am aware of these services in Vodafone / … My pocket does not allow me to subscribe… I am not aware of all the kind of services. I will soon subscribe to one of the services. Already using these services There is variety of services according to… These services are useful for me. These services are worth its charges. Aware of value added services 0 1 2 3 4 5 Fig10.10 Relative importance of factorsIBS Hyderabad Page 95
  • 97. Value Added Services at Reliance Communications Ltd.10.4.2 INDUSTRY ANALYSIS: PORTER’S FIVE FORCES MODELThe Porter’s five forces tool is helpful to get the understanding of the potential of Indian telecomindustry. The model provides useful insights about the Indian telecom Industry and itscompetiveness. Threat of New Entry Competitive Rivalry MODERATE Threat of HIGH • Huge license fees to New Entry be paid upfront & high • Intense rivalry in the gestation period industry due to large • Entry barriers have number of similar reduced firms. • Spectrum availability • Differentiation is low and regulatory issues • Low customer loyalty Supplier Buyer Power Competitive Power Rivalry Buyer Power Supplier Power LOW HIGH • Few switching cost • Low differentiation • Large number of • Undifferentiated suppliers products Threat of Substitution Threat of Substitution MODERATE • Low growth of Landlines • Increasing use of VOIP Fig 10.11: Porter’s five forces ModelIBS Hyderabad Page 96
  • 98. Value Added Services at Reliance Communications Ltd.10.4.3 SWOT ANALYSISAnalyzing an organizations competitiveness, involves an assessment of both the environmentaland organizational factors that influence an organizations ability to compete effectively. SWOTanalysis is one such method, where an organizations strengths, weaknesses, environmentalopportunities and threats can be assessed.The figure shows SWOT analysis of Reliance Communication Ltd. WEAKNESS STRENGTH 1.Customer Grieviance Handling 1.PAN India Reach 2.Low revenues from GPRS and mobile internet 2. Quality of network 3.Limited ad campaigns for value added 3.Informative website services 4.Strong Corporate governance 5.Wide Distribution channel 6.Part of Anil Dhirubhai Ambani Group THREATS OPPORTUNITIES 1.Competition from new entrants or Niche players entering into the market 1.Untouched International Market 2.Decling Average revenue per user(mainly 2.Low penetration in Rural India provides due to multiple SIM scenario) opportunity for growth 3.Manpower churning 4.Current teledensity 47.31 still low compared to developing countries 4.Decreasing Customer Loyalty 5. Customer Churn after launch of Mobile Number Portability (MNP) Fig 10.12: SWOT Analysis of Reliance Communication Ltd.IBS Hyderabad Page 97
  • 99. Value Added Services at Reliance Communications Ltd. 11. FINDINGS 1. About 50% of the respondents use VAS, but still the awareness is low. 2. 60% of the respondents say that they are not aware of all kinds of Value Added Services. 3. While doing the comparison for Data Platform for Reliance with its competitors, it was found that many services were not available in reliance while also there were some services which were not available in any other operator but in Reliance. 4. Data Platform targets only a few segments with Entertainment VAS as its priority and other services of VAS were less in number. 5. The look, feel and navigation through the content were almost similar with its major competitors like Vodafone & Airtel. 6. VAS promotions majorly rely upon its Promotional Messages which are sent through SMS Blast. Other means of promotions be it BTL or ATL are very low. Events take a handy place for promoting VAS in the city. 7. Contactibility is one of the major areas of concern to push VAS through SMS blast. Many MDN’s from the customer base return negative contactibility. The contactibility is of about only 40% of the total customer base that is used for tele-calling/OBD. Conversion rate being high helps increasing the subscriber base but contactibility being low decreases the number of people that can be converted into potential subscriber. 8. A visit to INDIA CALLING, which is the Reliance approved tele-calling agency, threw light upon the current scenario of work flow being followed by them. There are approximately 20-25 tele-calling agents for VAS subscription. Every agent is given a customer base of around 200 MDN’s. it was found that almost half of the NDN’s turn negative contactibility, and most of the man-hour is wasted by making several attempts to same set of MDN’s. 9. It was found during Up-selling VAS through retail network that most of the Reliance Mobile Stores (RMS) is not well informed regarding ongoing schemes of VAS. The information flow from the HO to its retailers is not made very clear by the Zonal Sales Executives (ZSE), because of which the information is not transferred to Reliance customers.IBS Hyderabad Page 98
  • 100. Value Added Services at Reliance Communications Ltd. 10. Most of the RMS’s do not push VAS in the market as they don’t have proper understanding about VAS products and services. 11. Most of the retailers have a total footfall of 100-150 customers per day but they don’t push any of Value Added Service to them. 15 out of 25 retailers are aware of only few major services of VAS like CRBT, MCA & GPRS. 12. 25 out of 25 retailers say that only 1-10 customers come per day to subscribe to any of the value added services. 13. Retailers agree to push VAS if given incentives of around 15-20%. 14. Awareness amongst retailers is very low regarding Value Added Services. 15. The level of awareness amongst customers was found significant across different age groups. The most aware segment being of age 25-35 years as compared to other age groups. 16. More than 50% of customers spend greater than Rs. 500 on their monthly bill, and only 6 out of 125 customers spend more than 100 rupees on Value Added services. 17. A two variable chi-square test of independence revealed that there is significant difference in the level of awareness of users for age as criterion. 18. The variables were grouped with the factors using data reduction technique factor analysis. Factor Variables VAS Usage • Services are worth its charges • Services are useful • Variety of services • Already using these services • Using mobile internet • Using CRBT VAS Awareness Not aware of all kinds of services Substitute Awareness Aware of these services in other operators Table 11.1: Factors & Variables after data reductionIBS Hyderabad Page 99
  • 101. Value Added Services at Reliance Communications Ltd. 19. The relative importance of the factors was found out using non parametric tests. The most important factors were identified as using CRBT; services are worth its charges, not aware of all the services, aware of these services in other operators. 20. The 3rd factor which explains the substitute awareness is the major area of concern for the company. This is because of low awareness amongst reliance users due to less mass promotional activity for Value Added Services like advertisement campaigns.IBS Hyderabad Page 100
  • 102. Value Added Services at Reliance Communications Ltd. 12. CONCLUSIONMobile VAS industry in India is undergoing a lot of structural changes. Mobile VAS industry ispoised to grow and contribute greater revenues to the telecom industry. Currently, the MVASmarket is fragmented and consists of a large number of small content providers. Consolidation ofMVAS market will happen, leading to emergence of few strong content providers. This wouldenable content providers to command greater share of revenue in the MVAS ecosystem.Being a strong revenue addition source, operators must engage themselves more into theseservices as price war is gaining its strength over calling tariffs. Promotional strategies should bedevised to tap new segments and hold the customer from churning out.MVAS market in India is largely dominated by urban population, with rural constituting around15% of the total market. Rural MVAS market would witness marginal growth and would grow toaround 20% in the next couple of years (source: IMAI Report). The growth drivers would beavailability of vernacular content, entertainment services and voice based services.The pricing strategy of the content is almost similar across all the services making no impact asfar as the importance and integrity of the service is concerned. Further, in an attempt to cater tothe expanding mobile subscribers in India, the telecom operators should price the content in amanner suitable to the target respondent.Mobile number portability will hit the industry. As far as the Government of India is concerned,it is planning to launch number portability in the metros by March 2009 and in all the remainingcircles by September 2009. This would enable users to change service providers while retainingthe mobile number. Number portability is expected to have an interesting impact on the MVASindustry. Currently, MVAS services are not a key decision making parameter while purchasingthe mobile phone connection. Therefore, with the introduction of number portability, operatorsare expected to focus their energy and investment in providing better voice services. But once thevoice services (network, billing, etc.) cease to become a differentiating factor, the operators willfocus more on MVAS to differentiate themselves and hold on to their customers. This isexpected to give a boost to the MVAS industry.IBS Hyderabad Page 101
  • 103. Value Added Services at Reliance Communications Ltd.Increasing the Knowledge and Awareness for various Value Added Services is a major concernfor telecom operators. Even if the knowledge is there, the content is not available easily or theavailable content lacks technical integration. This is the major reason for the customer to churnout of the service. This creates a mindset of not using the service again after so much of an effortfrom the company to pursue the target customer to initiate a trial.The study suggests that Value Added services is limited to a few niche groups, may be peopleyounger in age than people who have crossed 40 years of their age. The top reasons for thisvariation in awareness and usage are because of high content targeted towards that particular agesegment like Entertainment Vas, than content which is useful for other age segments. Thevariables can be grouped into four factors which drive VAS are: a) The operator-pricing decisions and aggressive promotions b) Awareness among masses. c) The mobile market-market structure, price sensitivity etc. d) The society-cultural and non-rational factorsValue Added Services is the child of aggressive competition in cellular Industry in India. Theimpact of these services is not one-directional, however it will typically erode and redistributerevenues from dominant players towards followers and new entrants for example Aircel&Vodafone.The challenges faced by the Reliance Communication Ltd in the current scenario are: 1. To address customer retention in VAS market. 2. To address to lack of awareness and knowledge regarding VAS. 3. To develop VAS as the major revenue stream under ongoing Tariff war within the telecom industry.Armed with these insights, organization can develop marketing strategies that are better alignedto their target customers. The phenomenon should be seen as a growth opportunity as theanalysis shows that there is huge scope of growth for VAS. The more tailored and personalizedthe experience that Reliance Communication creates for their customers, the greater thedifferentiation from their competitors and ultimately, the greater will be the success.IBS Hyderabad Page 102
  • 104. Value Added Services at Reliance Communications Ltd. 13. RECOMMENDATIONS1. Recommendation for Data platformMore content should be added to attract users, like:A separate link “App. Central” For all the applications, launched a few months back by the name application store to enhance user time spend with greater variety of applications.Games To attract the niche segment. More of like a games Club like in Vodafone and Airtel. IBIBO games and Facebook applications.Mobile Internet Direct links like Gmail, Rediff, MSN, Google etc.Chat central Gtalk, messenger etc.Lovers point Love quotes, messages, poetry etc.Education plus Guide for preparation of major competitive examinations like GRE, GMAT, and TOEFL. Word Meaning Alert etc.About Delhi University Again focusing the niche segment providing information about the university, last year cut off list, major colleges under university, contact details, etc. Table 13.1: Recommendation for Data platformIBS Hyderabad Page 103
  • 105. Value Added Services at Reliance Communications Ltd.2. Recommendation regarding VAS promotion Educate customers Convey Create Benefits Awareness AdvertisementFig: 13.1: Strategy for Creating AwarenessCreate a brand for R-World which is the Data platform: “R-World, a world within……anything andeverything”.3. Promotional Messages • Match the Message to the Customer: The more we are able to define our various buyer personas, the more we will be able to communicate a tightly focused and powerful message that is relevant to a particular customer. For promotional messages, various services targeting the niche segment should be promoted. • Some promotion for Post-Paid Customers: Paying bills through phone can be conveyed along other services.4. OBD (Out Bound Dialing)At present 25 Tele-calling agents working in INDIA Calling for reliance VAS promotion. calls per day 220 approx. time on phone 30 60 per call seconds seconds Total time in seconds 6600 13200 total time in hours per 1.83 3.67 day Table 13.2: OBD/Tele-Calling calculationIBS Hyderabad Page 104
  • 106. Value Added Services at Reliance Communications Ltd.Contactibility at present: approx. 30 %Conversion Rate: approx. 67-70 % • Need to look into their operation; more calls can be made per day, utilizing man-hours more efficiently. Company spends lacs of rupees every month on INDIA CALLING, targets should be set for them and as the conversion rate is around 70% so more calls can increase contactibility and hence increase more conversions. • As per the current scenario, a customer base on the basis of current balance is only used, which is not 100% contactable customer base. MOU base should be provided to improve contactibility, as it defines the customer who uses their mobile phone for outgoing and incoming calls thus describing their Minutes of Usage.5. Retail Network IntegrationThe need of the hour is to bring in more aggressiveness to sell Value Added Service. Targets should beset for all RMS’s to sell VAS.For example: TARGETS FOR RMSS Service Subscriptions Amount/ Revenue 130 RMSs subscription generated CRBT 100 30 3000 390000 MCA 100 15 1500 195000 Total 585000 Table 13.3: Target set example for RMS’s6. VAS Awareness: More Awareness need to be spread amongst customers as well as retailers. Knowledge regarding benefits and usage should be spread to masses.7. Mass communication: Regarding Value Added Services through ad campaigns, events and concerts, Billboards etc.IBS Hyderabad Page 105
  • 107. Value Added Services at Reliance Communications Ltd.8. Growth of M-commerce market: M-commerce has tremendous growth opportunity in India. High penetration of mobile phones would give a boost to this industry. The stakeholders need to work in tandem to ensure that issues like low awareness, security constraints, user friendliness and pricing of the services are aligned towards the consumers. The services that would provide boost to the m-commerce market in India are mobile marketing, mobile banking and mobile payment. A major step has been taken by RBI in issuing the mBanking guidelines.9. Rural MVAS market: MVAS market in India is largely dominated by urban population, with rural constituting around 15% of the total market. Rural MVAS market would witness marginal growth and would grow to around 20% in the next couple of years. The growth drivers would be availability of vernacular content, entertainment services and voice based services.10. Location based Services: Location Based Services are capable of providing information to the users based on their location. This would help the service providers provide relevant and timely information to the consumers as per their requirements. As the information available on GPS would increase, it would help the consumers to use location based services to their benefit. Local based services can be used for better management of sales force and transport department services.11. Mobile Marketing: While using traditional media of marketing such as print, television, etc, the marketers are not sure whether the consumer would take notice of the promotional campaign or not, the main advantage of mobile marketing is that since the marketing message is delivered on the mobile phone, a personal device, and the target respondent ends up taking notice of the campaign.IBS Hyderabad Page 106
  • 108. Value Added Services at Reliance Communications Ltd. 14. REFERENCES • www.rcom.co.in • gm.relianceada.com • myworld.relianceada.com • http://www.indiaonestop.com/fdi-telecom.htm • http://www.trai.gov.in/Default.asp • http://www.rcom.co.in/webapp/Communications/rcom/index.jsp • http://trak.in/Tags/Business/category/telecommunication/ • Mobile Value Added Services in India: A report by IAMAI & e-Technology group @ IMRB • Presentation and documents from Reliance Communications Ltd. • Telecom sector in India: Vision 2020, Background paper, Department of Telecommunications, Ministry of Communications & IT, Government of India • RNCOS, May 2008, “Indian Telecom Analysis (2008-2012)” (www.researchandmarkets.com) • Impact of Increased Competition on Mobile Service Industry: (www.icra.in) • Mobile Value Added Services in INDIA: (A Report by IAMAI & eTechnology group @ IMRB) • Mobile Youth. (2008). mobile Youth® 2008 report (2) – marketing & advertising, Vodacom Intranet [Online]. Available at: http://vodactls1/wizcat/Search_2006_New_look/adv_search_response.asp (Accessed: 25 Sep 2008). • CELLULAR OPERATOR ASSOSIATION OF INDIA.2009.ARPU & Revenue report. ( Chairman: Asim Ghosh).New Delhi • INDIAN ASSOCIATON OF MOBILE AND INTERNET(IMAI),Mobile VAS in India.2008[online] Available from: http://www.iamai.in/Upload/Research/mobilevasinindia_25.pdf[Accessed 5 May, 2010]IBS Hyderabad Page 107
  • 109. Value Added Services at Reliance Communications Ltd. • Mozer M. C., Wolniewicz R., Grimes D.B., Johnson E., Kaushansky H. Predicting Subscriber Dissatisfaction and Improving Retention in the Wireless Telecommunication Industry. IEEE Transactions on Neural Networks, Special issue on Data Mining and Knowledge Representation (2000). • TELECOM REGULATORY AUTHORITY OF INDIA. Performance Indicator Report(Chairman:J.S. Sharma).New Delhi: The Government of India • MALHOTRA N.P, 2008. Marketing Research-An Applied Orientation Fourth Edition. New Delhi: Pearson Education • Marketing Management by Kotler, Keller, Kiroshy & Jha.IBS Hyderabad Page 108
  • 110. Value Added Services at Reliance Communications Ltd. 15. ANNEXURES A-1 Promotional MessagesFREE MEIN APNA BHAVISHYA JANIYE, HOLI offer sirf aapke liye. Aaiye RelianceWorld, bunglow rd, Kamla Nagar.27-28 Feb. TnC apply RELIANCEFREE GIFTS LE JAAYEIN is HOLI par. Visit Reliance World Vasant Vihar, opp. PriyaCinema. 27-28 Feb. TnC apply RELIANCEFREE GIFTS LE JAAYEIN is HOLI par. Visit Reliance World NFC (Local shoppingcenter), behind Crown Plaza27-28 Feb. TnC apply RELIANCEFREE CALLER TUNE:AAJ har rechrg par paaye FREE caller tune 7 din tak.NoSubscription fee!Tune charge:Rs10.Auto-renewal 7 din baad.Reliance VAS - Up selling ReportLaxmi Communications,JAMRUDPUR, GK1Met the head managerTime: 11:30 AM Date: 4 March’10 • They are aware of this VAS activity • They attach the VAS enrollment form along with each new connection bought. • They didn’t receive the tracker. • They don’t push for sales, but just attach the form along the new connection form.IBS Hyderabad Page 109
  • 111. Value Added Services at Reliance Communications Ltd.Eagle RadiosKALKAJI A-2Met the head managerTime: 11:30 AM Date: 5 March’10They are aware of VAS. They complained about low promotional activity of Reliance for its VASproducts/services. They say customers really don’t feel to use R-world, they fear of getting charged foreven browsing. Customers are not aware of VAS due to low advertisements of VAS products/services. • They are aware of this VAS activity • They are aware of the tracker • They attach the VAS enrollment form along with each new connection bought. • They don’t push for sales as they say, customers are not aware enough. • They complained about low advertisements regarding R-world Applications.Sanjay ChowdharyCR PARKTime: 1:00 pm Date: 5 March’10Met their sales people, they complained about the VAS selling. They said that customers come daily toget their subscription deactivated which itself gets activated when they buy a new connection. • They are aware of this VAS activity • They are aware of the tracker • They attach the VAS enrollment form along with each new connection bought. • They don’t push for sales; only attach the VAS enrollment form along the new connection form. • They say, customers don’t want and hence they don’t even push for VAS sales.B.S. TelecommunicationsSANT NAGARTime: 2:30 PM Date: 4 March’10. Met their sales people, who said nobody wants to spend money for allthese packs. They face customers everyday who complains about these services getting activated bythemselves.• They are aware of this VAS enrollment form• They are aware of the tracker• They don’t push for sales but add the form along the new connection form as just another formality.• They had bad feedback of customers regarding the sales of VAS products/services.IBS Hyderabad Page 110
  • 112. Value Added Services at Reliance Communications Ltd.• They complained about low advertisements, which is the major concern to spread the knowledge regarding VAS to customers. A3ADBG EnterprisesCENTRAL MARKET, Lajpat NagarTime: 2:30 PM Date: 5 March’10Met the staff• Aware of VAS enrollment form• Don’t push for sales• Just add the VAS enrollment form along the new connection form as just another formality• They are aware of the trackerRoyal Tele SystemsMALVIYA NAGARTime: 3:30 PM Date: 6 March’10Met the owner and the staff • Aware of VAS enrolment form • Are not aware of the incentives • Have received the tracker • Not informed about the incentive plan by the ZSE • Don’t push for sales as they don’t take it much seriously, because they were never informed regarding the incentives that they will get out of this.Laxmi Narayan Tele MartSAKETTime: 4:30 PM Date: 6 March’10Met the owner and the staff • Aware of VAS enrolment form • Are not aware of the incentives • Have received the tracker • Not informed about the incentive plan by the ZSEIBS Hyderabad Page 111
  • 113. Value Added Services at Reliance Communications Ltd. Don’t push for sales as they don’t take it much seriously, because they were never informed regarding the incentives that they will get out of this, and also complained about the popularity of VAS amongst the customers because of low promotional activities like advertisements. A4VAT consultants Pvt Ltd.L-7 OUTER CIRCLE, CPTime: 3:30 PM Date: 9 March’10Met the staff • Aware of VAS enrolment form • Are not aware of the incentives for the month of March. • No idea about the tracker. • Not good communication from their ZSE.AVM EnterprisesTAGORE MARKET, KIRTI NAGARTime: 4:30 PM Date: 9 March’10Met the staff • Aware of VAS enrolment form • Aware of the incentive scheme • They had the tracker, but had no idea what was it for • Don’t push much for sales; just attach the VAS form with CAF as a formality.World Vision NetworkSHANKAR ROAD MARKET, RAJENDER NAGARTime: 5:30 PM Date: 9 March’10Met the staff • Aware of VAS enrolment form • Aware of the incentive scheme • They had the tracker, but had no idea for what it was • Attach the VAS enrolment form along CAF as just another formality • Try to push for sales, but no subscription as of yetIBS Hyderabad Page 112
  • 114. Value Added Services at Reliance Communications Ltd. A5 Questionnaire for RetailersDear Retailer, please fill in the following form and help us improve our service.Please TICK the appropriate choiceQ1. What is the total foot fall of your store per day? 1. 10-50 2. 50-75 3. 75-100 4. 100-150 5. >150Q2. How many of them are reliance customers? 1. 10% 2. 20% 3. 30% 4. 30-40% 5. >40%Q3. I completely know about VAS? 1. Strongly Disagree 2. Disagree 3. Neutral 4. Agree 5. Strongly AgreeQ4. I am fully aware of MAJOR services under VAS? (which one…CRBT, MCA, etc…) 1. Strongly Disagree 2. Disagree 3. Neutral 4. Agree 5. Strongly AgreeQ5. How many people come inquiring for VAS products? 1. 1-10 2. 11-20 3. 21-30 4. 31-40 5. >50Q6. People usually come for particular VAS product activation like CRBT, MCA, Cricket, Newsetc? (Specific service and approx number) 1. Strongly Disagree 2. Disagree 3. Neutral 4. Agree 5. Strongly AgreeQ7. For which VAS service do people majorly come here? 1. CRBT 2. MCA 3. Cricket 4. GPRS 5. other (mention)Q8. If people come for any VAS activation, I push for other services too? 1. Strongly Disagree 2. Disagree 3. Neutral 4. Agree 5. Strongly AgreeQ9. Customers find it easy to activate VAS? 1. Strongly Disagree 2. Disagree 3. Neutral 4. Agree 5. Strongly AgreeQ10. I will promote VAS if given incentives?IBS Hyderabad Page 113
  • 115. Value Added Services at Reliance Communications Ltd. 1. Strongly Disagree 2. Disagree 3. Neutral 4. Agree 5. Strongly AgreeQ11. How much incentive do you expect to push VAS? 1. 5% ` 2. 10% 3. 15% 4. 15 %-20% 5. >20% Questionnaire for CustomersDear Customer, please fill in the following form and help us improve our service. We will be glad toserve you better in every possible way.Please fill in your details and TICK the appropriate choiceName:Age:1. 18-25 2. 25-35 3. 35-40 4. 40-50 5. >50Gender: 1. Male 2. FemaleMonthly family income:1. 20,000 - 30,000 2. 30,000 - 40,000 3. 40,000 - 50,0004. 50,000 - 60.000 5. 60,000 aboveOccupation:1. Self-employed 2. Service 3. Student 4. House Wife 5. OtherNetwork: 1. CDMA 2. GSMSubscriber Type: 1. Prepaid 2. PostpaidMonthly Bill : 1. <150 2. 150-250 3. 250-350 4. 350-500 5. >500Monthly VAS expenditure: 1. None 2. <50 3. 50-100 4. >100IBS Hyderabad Page 114
  • 116. Value Added Services at Reliance Communications Ltd. A6Please tick the appropriate choiceQ1. I am aware of value added services. 1. Strongly Disagree 2. Disagree 3. Neutral 4. Agree 5. Strongly AgreeQ2. These services are worth its charges. 1. Strongly Disagree 2. Disagree 3. Neutral 4. Agree 5. Strongly AgreeQ3. These services are useful for me. 1. Strongly Disagree 2. Disagree 3. Neutral 4. Agree 5. Strongly AgreeQ4. There is variety of services according to my needs. 1. Strongly Disagree 2. Disagree 3. Neutral 4. Agree 5. Strongly AgreeQ5. I am already using these services. 1. Strongly Disagree 2. Disagree 3. Neutral 4. Agree 5. Strongly AgreeQ6. I will soon subscribe to one of the services. 1. Strongly Disagree 2. Disagree 3. Neutral 4. Agree 5. Strongly AgreeQ7. I am not aware of all the kind of services. 1. Strongly Disagree 2. Disagree 3. Neutral 4. Agree 5. Strongly AgreeQ8. My pocket does not allow me to subscribe to any of these services. 1. Strongly Disagree 2. Disagree 3. Neutral 4. Agree 5. Strongly AgreeIBS Hyderabad Page 115
  • 117. Value Added Services at Reliance Communications Ltd. A7Q9. I am aware of these services in Vodafone / Airtel / Idea / Aircel 1. Strongly Disagree 2. Disagree 3. Neutral 4. Agree 5. Strongly AgreeQ10. I often use my mobile phone for browsing internet. 1. Strongly Disagree 2. Disagree 3. Neutral 4. Agree 5. Strongly AgreeQ11. Internet through mobile is very convenient. 1. Strongly Disagree 2. Disagree 3. Neutral 4. Agree 5. Strongly AgreeQ12. I enjoy caller ring back tones/hello tunes on my phone. 1. Strongly Disagree 2. Disagree 3. Neutral 4. Agree 5. Strongly AgreeIBS Hyderabad Page 116
  • 118. Value Added Services at Reliance Communications Ltd. 16. GLOSSARYLIST OF ABBREVIATIONS:AON Age on networkARPU Average revenue per userASP Advertising and sales promotionCAF Customer application formCDMA Code division multiple accessCLV Customer lifetime valueCP Content providerFSP Fixed service providerGSM Global system for mobile communicationICRA Indian credit rating agencyIVR Interactive voice responseMDN Mobile directory numberMIS Management information systemMNP Mobile number portabilityMOU Minutes of usageMVAS Mobile Value Added ServicesOTAF On the air function timeSMS Short message serviceTRAI Telecom regulatory authority of IndiaUSSD Unstructured supplementary services dataUNR Usage and revenueVAS Value added services Term Description3G 3G refers to third generation of mobile communications systems. It enhances the services such as multimedia, high speed mobile broadband, internet access with the ability to view video footage on your mobile handset.4G 4G refers to all IP packet switched networks, mobile ultra-broadband (gigabit speed) access and multi-carrier transmission.ARPU A commonly used financial benchmark to measure the average revenue generated by a mobile carriers moble subscriber,or"userBoston Group A means of analyzing and categorizing the performance of business unitsmatrix in large diversified firms by reference to market share and growth rates. It was developed by the Boston Consultancy Group (BCG)Business Portfolio The business portfolio is the collection of businesses and products that make up the businessBrand loyalty A strongly motivated and long standing decision to purchase a particularIBS Hyderabad Page 117
  • 119. Value Added Services at Reliance Communications Ltd. product or service.CDMA Code Division multiple access, a technique for multiplexing digital transmission of radio signals in which each voice or data call uses the whole radio band, and is assigned a unique code.Churn Refers to the tendency of cell-phone subscribers to switch providers.Competitive A competitive advantage is a clear performance differential over theadvantage competition on factors that are important to customersCustomer Loyalty Feelings or attitudes that incline a customer either to return to accompany, shop or outlet to purchase there again, or else to repurchase a particular product, service or a brand.First Mover A form of competitive advantage that a company earns by being the first to enter a specific market or industry. Being the first allows a company to acquire superior brand recognition and customer loyalty. The company also has more time to perfect its product or service.FSP Fixed Service ProviderGPS A system of satellite ,computer and receivers that can determine latitude and longitude of a given receiver(within its system )located on earthGSM Global system of mobile communication. A 2G system of communication.IOT Inter Operator TariffMNP Mobile number portability (MNP) enables mobile telephone users to retain their mobile telephone numbers when changing from one mobile network operator to another.Porters Five forces An analytical Model developed by Michael E.Porter.The five forces inModel terms of which the model analyses business and industries are:Buyers,Suppliers,Substitutes,new Entrants and rivals.Primary research Primary research data is data collected specifically for the market researchdata project and obtained directly from the relevant source.Qualitative Research that deals with information too difficult or expensive to quantify,research such as subjective opinions and value judgments, typically unearthed during interviews or discussions group.Quantitative Market research that concentrates on statistics and other numerical data,research gathered through opinion polls, customer satisfaction surveys and so on.Random Sampling A sampling method in which all the units in a population have an equal chance of appearing in the sampleSecondary research Secondary market data is the data that has been obtained analyses and useddata for other purposes or for general purposes.SIM A subscriber identity module (SIM) securely stores the service-subscriber key (IMSI) used to identify a subscriber on mobile telephony devices (such as mobile phones and computers).VAS Additional service that value to those already available on the networkIBS Hyderabad Page 118

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