Market potential analysis towards internet data card


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Market potential analysis towards internet data card

  2. 2. PREFACEThe MBA course is well structured and integrated course of business studies. The mainobjective of practical training at MBA level is to develop skill in student by supplementto the theoretical study of business management in general. Industrial training helps togain real life knowledge about the industrial environment and business practices. TheMBA course provides student with a fundamental knowledge of business andorganizational functions and activities, as well as an exposure to strategic thinking ofmanagement.In every professional course, training is an important factor. Professors give ustheoretical knowledge of various subjects in the college but we are practically exposedof such subjects when we get the training in the organization. It is only the trainingthrough which I come to know that what an industry is and how it works. I have learnabout various departmental operations being performed in the industry, which would,in return, help me in the future when I will enter the practical field.Training is an integral part of MBA and each and every student has to undergo thetraining for 2 months in a company and then prepare a project report on the same afterthe completion of training.During this whole training I got a lot of experience and came to know about themanagement practices in real that how it differs from those of theoretical knowledgeand the practically in the real life.In today‟s globalize world, where cutthroat competition is prevailing in the market,theoretical knowledge is not sufficient. Beside this one need to have practicalknowledge, which would help an individual in his/her carrier activities and it is truethat “Experience is best teacher”. 2
  3. 3. ACKNOWLEDGEMENTAn individual cannot do project of this scale. I take this opportunity to express myacknowledgement and deep sense of gratitude to the individuals for rendering valuableassistance and gratitude to me. Their inputs have played a vital role in success of thisproject. I would like to express my sincere thanks to all those instrumental in thisproject Work. First, I would to thank Prof. Dr. N.C.Ghosh (Director of ManagementInstitute of Durgapur) Prof. A.K. Ghosh, (Principal Department of Business Administration),for giving me this opportunity to do this project and learn from it. I am thankful toVodafone for giving me helpful information to complete this project (Research).Iexpress my sincere thanks to Mr. Koushik (Sales Manager), Mr. Bibhas Chandrs, (AsstProfessor & HOD, MBA department) Sr.Lecturer R.K.Jha (MID faculty), for helping mein giving me all relevant information about the product and service. My heart fullthanks to the whole staff and customers of Vodafone, who gave me continuous supportin every possible manner to gain practical knowledge in Industry. Finally, I would likethank all lecturers, friends and my family for the kind of support and to all who directlyor indirectly helped me in preparing this project report. 3
  4. 4. EXECUTIVE SUMMARYEstimating the market or market potential for a new business or business expansion iscritical in determining the economic feasibility of a venture. Estimating the marketpotential will determine if the market is large enough to support the businesses. Thischecklist will address a number of questions that need to be answered before anestimate can be calculated.What type of customer will buy the product or service?Where are these customers located?How often do they use it?What is the Competition?What are people paying?What is the Potential for the Market to Develop?What is my share of the Market?Estimating the market potential for a business is critical in evaluating its viability andprovides an estimate of the maximum total sales potential for a given market. Once theestimated market potential has been calculated, it is possible to determine if the marketis large enough to sustain the proposed business or sustain an addition competitor inthe marketplace. It is important to remember that the estimated market potential sets anupper boundary on the market size and can be expressed in either units and/or sales.Unless there are no direct or indirect competitors, a business will capture a share of thetotal estimated market potential not all of it.The following provide the steps and data necessary to estimate the market potential.These will be discussed in detail later. 4
  5. 5. Key Steps in Estimating Market Potential:1. Define your target market and market segments.2. Define the geographic boundaries of your market.3. Determine the average annual or monthly consumption.Growth on the Data Cards especially happen when business travelers, academicians aswell as other professionals need to access emails and corporate applications as well aspersonal requirements during urgent trips and travels. The cutthroat competition in thetelecommunication sector of India posed a great threat to the development of Vodafone.The project aims to identify the market potential of Vodafone in the internet data cardin Burdwan, Durgapur and Asansol markets. 5
  6. 6. Contents Page no.I. The company……………………………………………………………………….II. Literature Survey………………………………………………………………….. Chapter 1: About Indian Telecom Industry……………………………………. Chapter 2: Broadband services to derive internet penetration in India…….. Chapter 3: The drivers for penetration of broadband in India………………. Chapter 4: India, an ideal destination for investment in telecom sector……. Chapter 5: History of Indian Telecom Industry……………………………….. Chapter 6: Facts about Indian telecom industry………………………………. Chapter 7: Experts review on Indian telecom sector…………………………. Chapter 8: The Internet in India………………………………………………… Chapter 9: India Telecom Report: Internet and Broadband Services………..III. Methodology………………………………………………………………………. Chapter 1: How the project has been carried out…………………………….. Chapter 2: Data Collection……………………………………………………… Chapter 3: Statistical models used……………………………………………....IV. About the Data Card……………………………………………………………..V. Analysis and Results……………………………………………………………… Chapter 1: Market Potential Analysis………………………………………….. Chapter 2: Development of Hypothesis and its testing………………………. Chapter 3: Graphs and charts……………………………………………………VI. Conclusions and recommendations……………………………………………..VII. Annexre……………………………………………………………………………..VIII. Bibliography…………………………………………………………………………… 6
  7. 7. The companyVodafone Essar in India is a subsidiary of Vodafone Group Plc and commencedoperations in 1994 when its predecessor Hutchison Telecom acquired the cellularlicense for Mumbai. Vodafone Essar now has operations in 22 circles with over 65.92million customers. The company is a joint venture of Essar Communication HoldingsLtd and the UK-based Vodafone Group. Vodafone has partnered with the Essar Groupas their principal joint venture partner for the Indian market. They are in the business ofcellular telephony. Over the years, Vodafone Essar, under the Hutch brand, has beennamed the „Most Respected Telecom Company‟, the „Best Mobile Service in the country‟and the „Most Creative and Most Effective Advertiser of the Year‟. Vodafone is theworld‟s leading international mobile communications company. It currently has equityinterests in 27 countries across 5 continents and 40 partner networks with over 303million proportionate customers worldwide. Vodafone has partnered with the EssarGroup as its principal joint venture partner for the Indian market. Essar Global Limited(EGL) is a diversified business group spanning the manufacturing and services sectorsof Steel, Energy, Power, Communications, Shipping & Logistics, and Projects. Thegroup has operations and investments in India, Canada, USA, Africa, the Middle East,the Caribbean and South East Asia and employs 30,000 people worldwide. VodafoneEssar Ltd provides services like 3G, which are based on 1800 MHz and 900Mhz GSMdigital technology. They offers voice and data services. In addition, they offers postpaidconnections activation, prepaid SIM cards and recharge coupons sale, serviceactivation/deactivation, postpaid tariff plan change, customer query resolution,prepaid/postpaid SIM card replacement and up gradation, mobile number change, andinformation on and subscription of value added services through stores. The EssarGroup is Vodafone‟s principle partner in India. The Essar Group is a diversifiedbusiness corporation with a balaned portfolio of assets in manufacturing and service 7
  8. 8. sectors of Steel, Energy, Power, Communications, Shipping prots & Logistics andProjects.About Hutchison-Essar Vodafone NegotiationsThe name Vodafone comes from “Voice data fone” HQ in Berkshire, England, is theworld‟s leading international mobile communications group with 29Million revenues27 countries, 303 million customers, 40 partner networks. Advanced mobiletelecommunications services provided by vodafone are 3G, data related services. TheJoint venture - 67% stake by HTIL and 33% owned by Essar.HTIL – Li Ka-Shing , Essar– Ruia Family.HTIL is HK Based Telecom Company and Essar is India based diversifiedcorporation 4th largest cellular operator in India 74.08 million customer.Vodafone’s Objective To venture into the world‟s most lucrative cellular market Strengthen its operation worldwide To obtain the majority stake of Hutchison 8
  10. 10. In recent years, the Indian telecom industry has witnessed phenomenal growth. Aconducive business environment, favorable demographic outlook and the politicalstability enjoyed by the country have contributed to the growth of the industry. Indiaachieved the distinction of having the worlds lowest call rates (2–3 US cents), the fastestsale of million mobile phones (1 week), the worlds cheapest mobile handset (USD 19)and the worlds most affordable colour phone (USD 31).One of the fastest growing cellular markets in the world in terms of number ofsubscriber additions – 261.07 million (March 2008)  Expected to reach total subscriber base of about 500 million by 2010 (i.e., more than one phone for every household)  Annual growth rate of the telecom subscribers – 42 percent (2008–09)  More GSM subscribers than fixed-line subscriber  Total telecom subscribers – 300.49 million (March 2009 Cellular + Fixed Line  Tele density – 26.22 percent (March 2009)  Number of new mobile subscribers added last quarter – 27.62 million (March 2009)  ARPU for GSM – USD 5.28* (USD./sub/ month)  Telecom equipment market – USD 34,100 million (2008–09)  Handset market – USD 7,250 million (2008–09)  Telephony services (mobile and basic) and Internet services dominate the Indian telecom services.The Indian telecom market generated revenues of approximately USD 32 billion in2008–09. It registered a CAGR of approximately 32 percent from 2002–03 to 2008–09.The CAGR from 2008–09 to 2011–12 is expected to stabilize at 21 percent. Apart from 10
  11. 11. mobile telephony services, other value-added services are also gaining importance. TheIndian telecom services can be divided predominantly into basic, mobile and Internetservices. It also comprises smaller segments, such as radio paging services, Very SmallAperture Terminals (VSATs), Public Mobile Radio Trunked Services (PMRTS) andGlobal Mobile Personal Communications by Satellite (GMPCS). The growth witnessedin the mobile services and Internet services segments was much higher as compared toother services, such as basic services and radio paging services which are nominal interms of numbers.Source** TRAI Revenues of Indian Telecom Industry: 2002–08 (USD billion) CHAPTER 2 : Broadband services to drive Internet penetration in India 11
  12. 12. The emergence of private players and new technologies has provided a strong impetusto the growth of Internet and broadband services. The quality and penetration of theseservices have undergone changes, with significant improvement in the telecominfrastructure. The Internet subscriber base registered a CAGR of 60 percent for theperiod 1997–98 to 2007–08.Source: TRAI report 2008BSNL and MTNL caters to more than two-thirds of Internet subscribers in India. Privateplayers are catching up fast due to increased penetration of Internet and broadbandservices in India. The telecom market will experience high penetration of Internetservices with the support from government policies and introduction of noveltechnologies in India. The total no. of Broadband Subscribers of these 13 ServiceProviders have increased from 3.1 million to 3.82 million by adding 0.72 million(23.35%) subscribers in the quarter ending March, 2008. 12
  13. 13. Source: TRAI report on market shares of telecom companies in India. CHAPTER 3: The drivers for penetration of broadband in IndiaThe drivers for penetration of broadband in India are: 13
  14. 14. Decreasing cost per line: The decrease in cost per line has come from two factors-decrease in the cost of equipment and from the inherent advantage of wirelesswhen adding new lines. The base stations which cost $3000-$5000 is now costing$400-$800 from the end of 2008. The CPE (Customer Premise Equipment) whichcosts $200-$400 is now costing $30-$80 from the end of 2008. The cost of awireless network is high in the first stage of deployment, because of factors liketaking up space for tower, erecting the tower, cabling, housing, and connectingthe tower to the network, installing base stations, etc. However, once those costsare recovered from enterprise services, adding new subscriber will come at aminimal cost.Decreasing operating expense: We are witnessing more and more infrastructuresharing between various operators which was completely absent before.Especially, in rural networks, this infrastructure sharing has turn out to be merecommon sense. The operators who own the spectrum are now reselling thespectrum to other smaller players who will mushroom in various parts of Indiato cater to non-metros. In addition, the coming of Virtual Network Operators willadd to competition.Decreasing cost of PC (or similar device): With projects like one laptop perperson, and other initiatives, the cost of PC is going to be less than Rs. 5000 bythe end of 2009. Other concepts like Novatium, if they tend to be aggressive canalso make a marginal impact on the penetration of broadband. (BSNL is rollingout its broadband services to one lakh schools across the country from December2008)Social attitudes and habits embracing broadband facilities: Every school in Indiais going to have a PC and also an internet connection. Those kids who neverknew PCs will now be used to using them at these schools. These kids in turnwill make way for their families owning a PC and therefore an Internet 14
  15. 15. connection. All government employees are now moving towards using PCs and broadband connectivity. More Indian content: What will further fuel the penetration is the content which is more relevant to the masses of India. Subscribers would like to see more content tailored to their needs and desires. More Indian language content, more applications suitable to Indian social context will come up in the next few years which will in turn contribute to increasing broadband penetration.Broadband connection:6.22 million (March 2009) "Present scenario" In the fixed line arena, BSNL and MTNLare the incumbents in their respective areas of operation and continue to enjoy thedominant service provider status in the domain of fixed line services. For exampleBSNL controls 79%; of fixed line share in the country.On the other hand, in the mobile telephony space, Airtel controls 21.4% subscriber basefollowed by Reliance with 20.3%, BSNL with 18.6% &, Vodafone with 14.7%, subscriberbase (as per June 2009 data) CHAPTER 4: India, An Ideal Destination for Investments in Telecom Sector 15
  16. 16. India is an ideal destination for investments in the telecom sector, the reasons are asfollows:1. World‟s largest democracy2. Independent judiciary3. Skilled and competitive labour force4. Fifth largest telecom network in the world; second largest among the emergingeconomies after China5. on an average, about 6–7 million new users added per month, making India theworld‟s fastest growing wireless services market6. Liberal Foreign Investment Regime–FDI limit increased from 49 percent to 74percent; the rural telecom equipment market is also open to large investments7. Among the countries offering the highest rates of return on investment8. The large untapped potential in India‟s rural markets–1.9 percent teledensity in ruralmarkets as compared to the national level of 18 percent9. Expected to become the second largest telecom market by 201010. The government promoting telecom manufacturing by providing tax sops andestablishing telecom specific Special Economic Zones11. Fully repatriable dividend income and capital invested in telecom equipmentmanufacturing. CHAPTER 5 : HISTORY OF INDIAN TELECOM INDUSTRY 16
  17. 17.  1881 Telecom Services Introduced in India. 1947 Posts, Telegraph and Telephones(PTT) come under the aegis of the Ministry of Communication. 1985 The Department of Telecommunication (DoT) comes into existence which would be a self regulator. 1986 DoT converted into two wholly government-owned companies: The Videsh Sanchar Nigam Limited (VSNL) for international telecommunications and Mahanagar Telephone Nigam Limited (MTNL) for service in metropolitan areas. 1996 Cellular Services launched in India. Introducing private players in the market. 1997 Telecom Regulatory Authority of India (TRAI) formed. 2000 DoT becomes a corporation, Bharat Sanchar Nigam Limited (BSNL). 2005 Foreign Direct Investment (FDI) increased to 74%. 2008 India becomes 2nd largest Telecom Market in the World. CHAPTER 6: Facts about Indian Telecom Industry 17
  18. 18.  The Indian Telecom sector is third largest network in the world. Subscriber numbers already crossed 250 million. Average growth rate of over 40% in respect of subscribers. Monthly additions of above 7 million phones. Growth impetus from wireless segment with 84% wireless and 16% wired. National teledensity at 26%. Rural teledensity stands at 7%, while the urban at 57%. Further access is provided by 54 lakh PCOs and 5 lakh VPTs. 9 million Internet and 2.5 million broadband subscribers. More than a thousand cities have been provided with broadband connectivity out a total of five thousand cities.CHAPTER 7: EXPERTS REVIEW ON INDIAN TELECOM SECTOR 18
  19. 19. Girija (1998), in its article “Socioeconomic Implications of TelecommunicationsLiberalization: India in the International Context” says that Telecommunicationsrestructuring have evolved differently in Asia and Latin America. While Asiangovernments have moved cautiously in bringing changes to the sector, Latin Americannations have implemented radical ownership and market transformations. The Indiantelecommunications reform falls in between these two general regional trends. Thechoice of a high component of competition, increased private participation, and noprivatization of the national carrier set conditions that will trigger uniquesocioeconomic effects. This article identifies and highlights the likely implications of theIndian reform on key economic and social issues, such as the cost of services, cross-subsidies, network interconnection, private investments, universal services,employment, and the possible rise of an information-intensive economy. It does so bycomparing and contrasting the Indian experience with dominant reform strategieselsewhere in the developing world.Chowdary (1999) discusses how Telecom reform, or de-monopolization, in India hasbeen bungled. Shaped by legislation dating back to the colonial era and post SecondWorld War socialist policies, by the mid-1980s India realized that its poortelecommunications infrastructure and service needed reform. At the heart of theproblem lay the monopoly by the government‟s Department of Telecommunications(DOT) in equipment, networks and services. The National Telecom Policy 1994 spelt outdecent objectives for reform but tragically its implementation was entrusted to the DOT.This created an untenable situation in which the DOT became policymaker, licenser,regulator, operator and also arbitrator in disputes between itself and licensedcompetitors. He discusses the question: „Why did India get it so wrong? and What Indiashould do now?Anand (1999), in his article named “Indias economic policy reforms” says that Indiawas embarked on economic reforms in July 1991, in the wake of a balance of paymentscrisis. In this article, an attempt is made to review two books and a set of World Bank 19
  20. 20. reports concerning the progress of these reforms. Issues concerning economic policy,impact of the reforms on poverty, sectoral issues relating to agriculture, industry andinfrastructure are briefly discussed. As reforms enter a more difficult phase, severalchallenges remain. Some of this fall under the “economic agenda of measures neededto maintain economic growth; others can be termed the “development agenda - ofimproving human development. Progress with regard to the former is not sufficient toproduce results concerning the latter.Bhattacharya (2000) constructs a vision of the Indian telecommunication sector for theyear 2020. The paper aims at isolating agents of change based on internationalexperiences and situates India in the development continuum. The agents of changehave been broadly categorized into economic structure, competition policy andtechnology.Das (2000), in her paper described the Liberalisation of the Indian telecommunicationsservices which started in mid nineties with no change in the existing public monopolystructure, entirely controlled by Department of Telecommunications (DoT). In order toevaluate any proposed industry structure, it is essential to analyse the productiontechnology of DoT so as to determine the rationale of liberalisation and sustainability ofcompetition. Accordingly, the researcher estimates a frontier multi-product costfunction for DoT, where the cost function has been duly modified to account for theproduction technology of a public monopoly. The study finds that although DoTdisplays high allocation inefficiency, it is still a natural monopoly with very high degreeof sub additively of cost of production. This study implies that the choice of any reformpolicy should consider the trade-off between the loss of scale and scope economies andcost saving from the reduction in inefficiency of the incumbent monopoly in the eventof competition.Rao (2000), in her article named “Internet service providers in India”, provides a broadview of the role of an Internet service provider (ISP) and the factors to be considered 20
  21. 21. before entering the ISP market. Describes the Internet/ISP scene within India anddiscusses the configuration of local, regional and national level ISPs, and the supportinginfrastructure. She also identifies the various success factors. The global Internetscenario is discussed regarding the phases of the Internet in India, i.e. pre and postcommercialization. The main players are described: ERNET, NICNET, STPI, VSNL,MTNL, Satyam Infoway and Bharti-BT. The financial and legal implications arehighlighted in the Indian context. Many companies entered the nascent ISP business inIndia due to deregulation. Building local content, foreknowledge of new Internettechnologies, connecting issues, competitiveness, etc. would help in their sustainability.She concludes that though many companies entered the nascent ISP businesses in Indiadue to deregulation, many of them are unlikely to survive in the longer term.Vrmani (2000) estimates the contribution of telecommunication (or telecom) services toaggregate economic growth in India. Estimated contribution is distinguished betweenpublic and private sectors to highlight the impact of telecom privatization on economicgrowth. Knowledge of policy determinants of demand of telecom services is shown tobe essential to enhance growth contribution of telecom services. Using a recent samplesurvey data from Karnataka State in South India, price and income determinants ofdemand for telecom services are estimated by capacity of telephone exchangesEstimation results offer evidence for significant negative own price elasticity andpositive income elasticity of demand for telecom services.Narinder (2004), in his article “Enhancing Developmental Opportunities by PromotingICT Use: Vision for Rural India” talks about the foremost benefits of Information andCommunication Technologies (ICTs) in developing countries that can be helpful inimproving governance including public safety and eradication of illiteracy. The benefitsof ICTs have not reached the masses in India due to lack of ICT infrastructure,particularly in rural areas, where two-third of the population of the country lives. Evenin cities and suburban areas, use of ICTs is not popular due to lack of awareness to itsuse, computer illiteracy, and absence of practical applications. India is the largest 21
  22. 22. country in South Asia, with a population of over one billion people and its telecomsector is presently experiencing fast growth phases. However telephony penetration invillages is less than two percent of the rural population and about 15 percent of thevillages are still without any telephony service. Universal access to ICTs in rural areashas been planned and is being implemented through Public Tele Info Centers havingvoice data and video, as majority of villagers in India cannot afford a separate homeconnection. Illiteracy in rural areas is as high as 40 percent and in some tribal beltshardly about 20 percent people are literate. There are 35 million children in age group of6–11 years, who are out of school and one out of four drops out during primary classes.Education and training, therefore, must be given the top priority if advantages of ICTsare to be harnessed. Indian economy is agriculture based and employs maximumworkforce. Improvement in agriculture productivity can help in reducing rural poverty.Adoption of ICT in agriculture will play an increasingly important role in cropproduction and natural resource management. The other critical factor is technologicalchallenges for universal access to ICTs to bring down the network access cost.Nikam, Ganesh, Tamizhchelvan (2004), analyses that changing face of India inbridging the digital device. He reiterated - “India lives in villages” said the Father of theNation, Mahatma Gandhi. With 1,000 million people and 180 million households, Indiais one of the biggest growing economies in the world. With the advent of theInformation, Communication and Technology (ICT) revolution, India and its villagesare slowly but steadily getting connected to the cities of the nation and the worldbeyond. Owing to the late Rajiv Gandhi, India is now a powerful knowledge economy,and though India may have been slow to start, it certainly has caught up with the Westand is ahead in important respects. The Government, the corporate sector, NGOs andeducational institutions have supported rural development by encouraging digitallibraries, e-business, e-learning and e-governance. The aim of this paper is to touchupon and highlight some of the areas where, by using ICT, the masses have beenreached in this way. A follow-up paper will outline collections of significant cultural 22
  23. 23. material which, once national IT strategies are fully achieved, could form part of adigitally preserved national heritage collection.Dey (2004), in her article talks about the discussions between the FederalCommunications Commission (FCC) and communications policy makers andregulators in other countries and how they have gleaned several clusters of issueswhere further research would directly benefit them. Recently, there have been twonotable shifts. First, as the acceptance of the competition model over the monopolymodel for telecommunications markets takes deep effect in regulators all over theworld, questions regarding process and procedure for regulation are becoming evermore urgent. This paper discusses current questions regarding decision making,enforcement, and understanding consumer issues that arise often in the FCCsdiscussions with other regulators. Second, technological change is potentially shiftingmarket definitions. In the FCCs discussion with other regulators over the last twoyears, the overlap of wireline telecom, wireless telecom and cable television has becomemore pronounced.Singh (2005), in his article “The role of technology in the emergence of the informationsociety in India” describes the role that information and communication technologiesare playing for Indian society to educate them formally or informally which isultimately helping India to emerge as an information society. Though India has a hugepopulation, the illiteracy rate is also huge in this country. The paper has taken anapproach to find the historical situation and present the prevailing scenario as well asthe change that are taking place with the application of ICT to the advantage of thesociety in different areas including daily life. India is making all out efforts to becounted among the developed nations of the world. The article also describes theconsiderable attention India is taking for application of technology, development ofinfrastructure and human resource for meeting national needs. Basically India isbuilding an information society. Technology has helped society to cut across thetraditional boundaries for getting converted into anemerging information society. The 23
  24. 24. study concludes that The Indian software and services industry has significantly helpedto boost the Indian economy. In IT-enabled services too, India has been clearlyperceived to be the dominant hub. The Indian software sector is being recognized as thesingle largest contributor to incremental market capitalization in India but the sector isstill small in terms of contribution to GDP, especially when compared to other largesectors in the economy like agriculture and manufacturing. Similarly, thetelecommunication sector has contributed a lot but still has a considerable way to go.The paper also enforces that comparisons of India‟s telecommunication statistics withthose of developed and other emerging economies show that the country is still farbehind its contemporaries.Banka (2006) gives an overview of the mergers and acquisitions in thetelecommunication industry. According to him Governments decision to raise theforeign investment limit to 74% is expected to spur fresh rounds of mergers andtakeovers in India. He foresees a sector that represents humongous opportunity waitingto be tapped by Indian and foreign conglomerates.Thomas (2007), in his article describes the contribution made by telecommunications inIndia by the state and civil society to public service, this article aims to identify thestate‟s initial reluctance to recognize telecommunications provision as a basic need asagainst the robust tradition of public service aligned to the postal services and findshope in the renewal of public service telecommunications via the Right to Informationmovement. The article follows the methodology of studying the history oftelecommunications approach that is conversant with the political economy tradition. Ituses archival sources, personal correspondence, and published information as itsresearch material. The findings of the paper suggests that public service intelecommunication is a relatively „„new‟‟ concept in the annals of Indiantelecommunications and that a deregulated environment along with the Right toInformation movement holds significant hope for making public servicetelecommunications a real alternative. The article provides a reflexive, critical account 24
  25. 25. of public service telecommunications in India and suggests that it can be strengthenedby learning gained from the continual renewal of public service ideals and action by thepostal services and a people-based demand model linked to the Right to InformationMovement. All studies done by the researcher suggests that the right to informationmovement has contributed to the re-vitalization of participatory democracy in Indiaand to a strengthening of public service telecommunications.Cygnus Business Consulting & Research Pvt. Ltd. (2008), in its “QuarterlyPerformance Analysis of Companies (April-June 2008)” has analysed the Indian telecomindustry in the awake of recent global recession and its overall impact on the Indianeconomy. The analysis is done in the background of wake of global recession and risinginflation. Cygnus estimates, the Indian telecom industry is expected to maintain thegrowth trajectory in the next quarter as well. With almost 5-6m subscribers are beingadded every month, and the country is witnessing wild momentum in the telecomindustry.Maheshwari (July-September 2008), in her report analysed the Indian telecom industryand ascertain that Indian telecommunications has been zooming up the growth curve atan mounting pace, and India is has surpassed US to become the second largest wirelessnetwork in the world. This growing subscriber base is basically created by tapping intorural India, which is an emerging market for the industry. The estimate for the next fiveto ten years is that the rural market will form 40 % of the subscriber base. The study hasanalysed the human resource management process of the industry, and specially thelatest trends of recruitment of this massively growing industry.Anderson (2008), in his single executive interview titled “Developing a route to marketstrategy for mobile communications in rural India An interview with Gurdeep Singh,Operations Director, Uttar Pradesh, Hutch India” suggests that managers need to gobeyond traditional approaches to serving the poor, and innovate by taking into accountthe unique institutional context of developing markets. His practical implication says 25
  26. 26. that the experience of Hutchison Essar in India provides some important lessons formobile network operators (MNOs) and other firms in other developing markets whoare hoping to serve the rural poor: Hutchison has recognized the value of corporate andnoncorporate partners. The company has proactively established relationships withindividual entrepreneurs, and has provided has provided development support toother partners such as distributors. The company has recognized the value ofleveraging existing local institutions, and has seen gaps in local infrastructure ormissing services as potential opportunities rather than barriers to growth. The companyhas seen the rural market as an opportunity – not just an obligation to be servedbecause of universal service obligations. Also this article demonstrates that MNOs candeliver availability and affordability to achieve increased individual or householdpenetration through business model innovation.Mani (2008) addresses a number of issues arising from the growth of telecom services inIndia since the mid-1990s. It also discusses a number of spillover effects for the rest ofthe economy and one of the more important effects is the potential to develop a majormanufacturing hub in the country for telecom equipment and for downstreamindustries such as semiconductor devices. The telecom industry in India could slowlybecome an example of the service sector acting as a fillip to the growth of themanufacturing sector. A beginning towards this has been made. The formation of aTelecom Equipment Export Forum and the announcement of the Indian SemiconductorPolicy 2007 are steps in this direction. Success crucially depends on the response of theprivate sector to these incentives. Given the importance that a regulatory agency canplay in this crafting, no effort should be lost in strengthening the powers of the TRAI.The benefits to the Indian economy from having both a strong services andmanufacturing segments in the telecom sector cannot be undermined.Narayana (2008) estimates the contribution of telecommunication (or telecom) servicesto aggregate economic growth in India. Estimated contribution is distinguishedbetween public and private sectors to highlight the impact of telecom privatization on 26
  27. 27. economic growth. Knowledge of policy determinants of demand of telecom services isshown to be essential to enhance growth contribution of telecom services. Using arecent sample survey data from Karnataka State in South India, price and incomedeterminants of demand for telecom services are estimated by capacity of telephoneexchanges. Estimation results offer evidence for significant negative own price elasticityand positive income elasticity of demand for telecom services.Sharma (2009) deals with the major challenges faced by India‟s telecom equipmentmanufacturing sector, which lags behind telecom services. Only 35% of the totaldemand for telecom equipment in the country is met by domestic production. This isnot favourable to long-term sustained growth of the telecom sector. The country is alsofar behind in R&D spending when compared to other leading countries. India needs tosee an increase in R&D investment, industry-academia-government partnership, betterquality doctoral education and incentives to entrepreneurs for start-ups in telecomequipment manufacturing. In 2006-07, 65% of the total consumption of equipment wasmet through imports. This trend has far-reaching implications for the economy andshould not be allowed to continue for long. In a country like India which has a problemof massive unemployment, the manufacturing sector should be promoted to createmore employment opportunities.Shah (February, 2009), has analysed Indian telecom industry and studied the sectorkeeping in mind three companies; namely Bharti, R.Comm and idea in the backgroundof recent global meltdown. The study suggests that though there is no sign ofslowdown in this sector, but surely a strong turmoil is going on in the industry. Thestudy states that the sector is fairly immune from the current economic downturn &does provide a good defensive bet in medium term. With the help of newertechnologies, wireless penetration is expected to increase in the near future, which isbasically fuelling the growth of the sector. While the 3G / Broadband adoption wouldensure long term growth momentum, the article has thoroughly investigated about theintense competitive scenario, pricing pressure, high capital intensity & substantial 27
  28. 28. regulatory uncertainties currently faced by the industry. The article has also describedthe cause of being relatively safe of this industry. The causes described by Shah areincreasing rural coverage, rising affordability, declining handset/subscription costs,substantially low tariffs & established brand/distribution. However, the study alsocautions the telecom industry that a steeper economic slowdown could start impactingthe subscriber usage patterns as well as operator capital investments & thereby couldsubstantially restrict revenue growth rates going forward. CHAPTER 8: THE INTERNET IN INDIA 28
  29. 29. Internet History and CultureThe history of the Internet in India can be traced back to the early 1990‟s when ERNet, adivision of the Department of Electronics (DoE), and NICNet (Department of Statistics)began to experiment with Internet services. But it was not until 1995 that governmentowned VSNL (Videsh Sanchar Nigam Limited), became the country‟s 1st officialInternet Service Provider (ISP).In 1997, the rise to power of the Bharatiya Janata Party (BJP) was accompanied by aseries of legislations that opened up opportunities for business online. One of the mostsignificant changes during this period was The New Telecommunications Policy of1999, which ended VSNL‟s ISP monopoly and mandated that any Indian company witha maximum foreign equity of 49% could provide hosting services.Over time this policy has led to a rise in the number of Indian web hosting companies,although the tough unregulated market has caused many to close. These pieces oflegislation ushered in a new era of internet growth that has increased steadily. As earlyas 2000, foreign companies including Yahoo, Ebay and MSN began establishing webportals in the country and examining India‟s strong e-commerce potential.While the industry has been mainly free from content regulation, some high profileinstances of censorship have occurred and as of July 2006, the Indian government haddirected ISPs to block seventeen websites, including some hosted on the Geocities,Blogspot and Typepad domains.According to studies into the demographics of internet users in India, most users arelocated near the country‟s main population centers including Delhi and Bangalore.While figures on the exact number of internet users varies, it was estimated thatbetween 22 and 30 million people were online in 2007 with a 3% penetration of India‟smarket, although penetration in major urban areas is believed to be as high as 9%.Industry experts have predicted this number to balloon to 100 million by 2010, makingIndia one of the world‟s fastest growing markets. 29
  30. 30. The early years of the internet saw users connecting primarily in public spaces such asInternet cafes and kiosks, but this is rapidly changing. Reports from consultingcompany JuxtConsult suggest that beginning in 2007, the majority of internet users areopting for personal computing, with 59% of new users using home based connections,up from 19% the year before.Business OutlookIndia‟s e-commerce and IT sectors continue to hold promise and are expected to growsteadily in the coming years, despite a weak global economy and lack of infrastructure.The growth is largely driven by requests for outsourced services including web sitedesign and Search Engine Optimization.Throughout India, web site design services are readily available in major cities and thelow cost of web design is one of the main factors companies cite when choosing tooutsource web design to India. Although accurate figures on the amount spent ononline advertising are difficult to verify, trends suggest rapid growth and the need forSearch Engine Optimization Companies and Search Engine Optimization Specialistssteadily increasing.Even with this new growth, entrepreneurs considering starting an SEO company inIndia are advised to be cautiously optimistic. Competition among web site promotionfirms on the rise, although there are still opportunities for expert search engineoptimization and marketing professionals.While outsourcing for SEO, web and graphic design have proved to be profitable, e-commerce in general is still in the nascent phases even as Internet advertisingexpenditures continue to grow. While industry giants Yahoo, Google, Microsoft are doing well and continue to dominate the e-commerce landscape, mostportals are still working towards financial success, citing cost of customer acquisitionand lack of reliable high speed broadband as major sticking points. 30
  31. 31. CHAPTER 9: India Telecom Report: Internet and Broadband Services 31
  32. 32. The Telecom Regulatory Authority of India released a comprehensive report on thegrowth of Indian telecommunication Industry for quarter ending March 2009. Internet & Broadband services have been unable to emulate the growth that is seen byIndian Mobile sector, but it is growing steadily nevertheless. The Indian governmenthas heady plans when it comes to Broadband and Internet services growth. To achieveis 500 million subscriber base in next 3 years seems to be near impossible target !Lets look at the where Indian Internet & Broadband services stand for the quarterending March 2009:Indian Internet & broadband services snapshotInternet & Broadband SubscribersTotal internet subscribers (including 13.54 millionBroadband)% of Growth During the Quarter 5.30%Broadband Subscribers 6.22 millionWireless Data Subscriber 117.82 millionAccording to TRAIs report, India currently has only 13.54 million Internet subscribers,which includes broadband. This is a ridiculously low number !Even the growth rate is only 5.3%, we seriously have problems when it comes tointernet penetration. While the wireless data internet subscriber show close to 118million subscribers majority of them are GPRS connections on mobiles, which accordingto me should not be counted a internet subscribers.Indian Internet Subscriber Growth 32
  33. 33. SOURCE: TRAI REPORT MARCH 2009  There were 13.54 million subscribers at the end of March 2009 as compared to 12.85 million Internet Subscribers at the end of December 2008, registering a growth of 5.30%.  The growth rate is higher as compared to growth rate of 5.01% at the end of December 2008.  Besides above , there were 117.82 wireless data customers at the end of March 2009 ( capable of accessing data services including internet through mobile handsets (GSM/CDMA))  Broadband Subscriber Growth – The number of Broadband subscribers (with a download speed of 256 kbps or more) was 6.22 million at the end of March 2009 as compared to 5.52 million at the end of December 2008. The growth rate of broadband subscribers in this quarter is 12.68%. 33
  34. 34. Technology Used to Access Internet SOURCE : TRAI REPORT 2009Broadband Subscribers Share (Technology wise)- Out of total 6.22 millionBroadband,  5.364 million are DSL based;  0.474 million Cable Modem;  0.244 million Ethernet LAN;  0.042 million Fiber;  0.072 million Wireless ;  0.020 million Leased Line;  0.002 Million use other technologies. 34
  35. 35. Internet Subscriber Growth Quarter to QuarterGrowth of Internet and Broadband Services QE QE QE QE QE % of % of % of % of Mar June Sep Dec Mar growt growt grow Gro 2008 2008 2008 2008 2009 h h th wth over over over over Mar June Sep Dec 08 (12 08(9 08 (6 08(3 mont mont mont mont hs) hs) hs) hs)1.Subscriberbase(inmillion)i).Internet 11.09 11.66 12.24 12.85 13.54 22.09 16.12 10.62 5.37ii)Wireless 65.50 75.97 88.27 101.10 117.82 79.88 55.09 33.48 16.54internetiii)Broadband 3.87 4.38 4.90 5.52 6.22 60.72 42.01 26.94 12.68connection(>=256kbpsdownloadspeed)2.Minutes of 220 225 212.34 214.23 226.58 2.99 0.70 6.71 5.76use(Dial upinternet)(MOU/Sub/Month)3.ARPU(Dial 220 225 213.08 221.97 236.47 7.49 5.10 10.98 6.53upinternet)(Rs/Subs/Month)*Accessing internet through wireless (GSM/CDMA) networks.Although Indian Broadband connections have doubled in last one year, the growth rateis still not enough. With a country population of close to 1.2 billion, 6.22 millionbroadband connections is just ridiculous. METHODOLOGY 35
  36. 36. CHAPTER 1: How the project has been carried outFollowing figure shows an overview over the works proceed. Methodology Interviews, questionnaire, d Printed Litrature iscussions, homepages , etc. Secondary Data Primary Data Theory Chapter Emprical Chapter Data Presentation Market Potential Analysis Conclusion & Proposal CHAPTER 2: Data Collection 36
  37. 37. As the used methodic in figure shown, there are two types of data; primary andsecondary data.Primary dataIn this project primary data has been collected by: Interviews with existing internet users for collecting of background information such as: products explanation; market situation in Burdwan, Durgapur, Asansol; and contact information for distributors. Deep going discussions have been done with Vodafone´s representatives in the investigated markets to apply information and further discussions after the questionnaires. Questionnaires have been used for extracting information from representatives and distributors about internet usage. The questionnaires are used to get exactly and comparable answers in questions.Primary data has given answer in following questions in each of the studied markets: Competitors name and position Customers and the different segments they belongs. Awareness of internet data cards and awareness of Vodafone‟s product. Technology used for internet connections. Perception of potential customers towards internet data card.Secondary data Printed literatures are used to get relevant theories for this Project. Printed literatures are articles and books in telecom sector and marketing. Homepages are used for information about competitors, features of different companies data cards, tariff plans and price of different products. 37
  38. 38. Secondary data has given answer in following questions in each of the studied markets: Information about competitors Information about features and different products of the competitors. Information about tariff plans and prices of data cards. Information about different technologies used to connect internet. Information about indian telecom sector. Information about the current scenario. CHAPTER 3: STATISTICAL MODELS USED 38
  39. 39. The statistical models and analysis methods which are used in this project are asfollowing:  Chi-square test (χ2 test) Chi square distribution is an important contineous probability distribution, first formulated by Helmert and then discovered by Karl Pearson.  ANALYSIS OF VARIANCE Analysis of Variance (ANOVA) can be used to test for the equality of three or more population means using data obtained from observational or experimental studies.  NORMAL DISTRIBUTION (z test) Normal distribution is an important contineous probability distribution having two parameters m and σ. Normal distribution plays a very important role in Statistical theory and , in particular, in Sampling theory. 39
  40. 40. Objectives of the projectThe objectives of this project is to find the answers to following questions: 1. What is the current situation in the market of Internet Data Cards at Asansol, Durgapur & Burdwan? 2. Is there any significant difference between the markets? 3. What is the total market potential of these three markets? 4. What are the different segments in the market that uses Internet Data Cards. 5. The awareness of internet data card in the market and the awareness of Vodafone‟s data card in the market. 6. Who are the competitors of Vodafone? 7. What people are paying for using internet? 8. What type of technology is more preferred to connect internet? 9. How potential customers perceive towards the internet data card? 40
  41. 41. About the data cardA data card is a modem which can be connected to the PCs or Laptops any where anytime to get connected with the internet. A data card comes with different verities andmodels, some of the models of data cards of different service providers are mentionedbelow.Table shows different companies in data card business, their products and their prices. Company Product Name Technology Price in Rs. Used Vodafone Vodafone Mobile Connect Edge PCMCIA 6499/- Data Card Vodafone Mobile Connect USB USB 2599/- Modem Vodafone Mobile Connect 3G USB 5499/- USB stick( Broadband) BSNL Huawei - EC 321 USB 2800/- BSNL EVDO (Broadband) USB 7500/- TATA Plug 2 Surf photon USB 2499/- INDICOM Plug 2 Surf photon whiz USB 2249/- Data for laptops PCMCIA 2499/- Photon+ (Broadband) USB 3500/- Reliance Net Connect MG880 USB Modem USB 2490/- Huawei EC-121 USB Modem USB 2500/- Net connect PCMCIA Card PCMCIA 2500/- Net Connect Broadband plus USB 3500/- (Broadband) Airtel USB Modem USB 2999/- 41
  43. 43. ANALYSIS AND RESULTS CHAPTER 1: MARKET POTENTIAL ANALYSIS I made a survey on the different outlets of the companies selling data cards; I askedthem, on an average how many data cards were sold by them in a month? Then we gotthe following results:Survey report of BurdwanCompany Units/pm AverageReliance 250-300 275Tata Indicom 200-250 225Bsnl 300-350 325Airtel 05-010 7.5Vdafone 15-20 17.5Total market potential 850Survey Report of DurgapurCompany Units/pm AverageReliance 375-400 387.5Tata Indicom 350-400 375Bsnl 400-450 425Airtel 05-010 7.5Vdafone 25-30 27.5Total market potential 1222.5Survey Report of AsansolCompany Units/pm AverageReliance 300-350 325Tata Indicom 350-375 362.5Bsnl 400-450 425Airtel 05-010 7.5Vdafone 15-20 17.5Total market potential 1137.5 43
  44. 44. Total market potential of Asansol, Durgapur & Burdwan is calculated by summing upthe average monthly sale by each company in these areas.Company Units/pmReliance 987.5Tata Indicom 962.5Bsnl 1175Airtel 22.5Vdafone 62.5Total Market Potential 3210The result what we got is an average of 3210 units of data cards sold in the market ofBurdwan, Durgapur & Asansol. 44
  45. 45. CHAPTER 2: DEVELOPMENT OF HYPOTHESIS AND ITS TESTINGWhat is a Hypothesis?A hypothesis is the assumption that we make about the population parameter. This canbe any assumption about a population parameter not necessarily based on statisticaldata.Development of Hypothesis:There is no significant difference in the market potential of data cards at Burdwan,Durgapur and Asansol markets.H0 : The market potential remains same with respect to the cities across the competitivebrands.H1 : There is a variance in the market potential with respect to the cities across thecompetitive brands.To test this hypothesis I have used Two Way ANOVA, as it is a Bivariate Analysis. ANOVA TABLE Source of Sum of squares(SS) D.F Mean Variance ratio variation Square(MS)Between cities 1.32 2 0.66 F1 = 0.20/0.66 = 0.30Between 40.85 4 10.21companies F2 = 0.20/10.21 = 0.01Residual(error) 1.63 8Total 43.80 14 Conclusion table D.F Level of F – observed F - tabulated Status of significance Hypothesis V1=8, V2 =2 5% 0.30 19.4 H0 Accepted V1= 8, V2=4 5% 0.01 6.04 H0 Accepted 45
  46. 46. Decision: We accept the Null Hypothesis because we found out that there is nosignificant difference among the competitive brands and the market potential of datacards at Burdwan, Durgapur, Asansol.InterpretationFrom the above analysis, it was found that the market potential of Asansol, Durgapur,and Burdwan does not very much, one of the reasons of this stability is that these threetowns are well developed, and presence of reasonable number of colleges offering bothprofessional and educational courses, especially private colleges offering professionalcourses are involving technology as a part of their programme. Colleges providing freelaptops to the students, classroom teaching with help of power point presentations, etcis some of the examples of adaptation of technology, and this young generation is verymuch aware and adaptable towards the internet technologies, they use internet as amedium to gather knowledge, for entertainment purposes etc. Again, these three townsare rich in industry also and today as we all know industries are being globalized, sothere is a need for continuous connectivity, concepts like virtual offices, e banking,online transactions etc are getting popular day by day. All this become have becomepossible because of technology of Internet. As a product of FMCG category, the massesare taking this product very consciously and the trial purchase of this product is veryhigh. 1. Development of hypothesisThere is a difference in the preference of different technologies used to connect internet.H0 = All the different types technologies used to connect internet are equally preferredby the customers.H1 = All the different types of technologies used for connecting internet are not equallypreferred.To test this hypothesis we did Chi-square test for Goodness of fit.Sample size = 220 Value of χ2 d.f Level Tabulated value Status of observed Hypothesis 29.56 3 5% 7.815 H0 Rejected 46
  47. 47. Decision: We reject the Null Hypothesis because we found out that the differenttechnologies used for connecting internet are not equally preferred.InterpretationIn the research, it discovered that there are different types of technologies used by theusers of internet for internet connectivity. A simple landline connection attached with amodem is traditionally used for internet connectivity; Bsnl is the market leader in thistype of technology. The data transfer speed in this type of technology is also very high,comparing to other technologies available. Now days Multimedia mobile phones arevery popular among the masses, and all the telecom service providers both GSM andCDMA are providing GPRS connections at a cheap rate. These mobile phones can beconnected to the PC‟s or Laptops for browsing internet, and this type of technology ispopular because of multiple usability of mobile phone and cheap tariff plans. The othertype of technology for connecting internet is Data Cards. Data Cards are USB modemsor PCMCIA modems which can be connected with the PC‟s (only USB one) andLaptops (both USB and PCMCIA) through USB slot and laptops supporting PCMCIAcard slot for internet connectivity. With the introduction of 3G and Broadband servicein this technology the speed of browsing internet has increased drastically from 153.6kbps to 3mbps and more. The biggest advantage of this type of technology is itsmobility, the user can connect internet anywhere till the time he/she is in the coveragearea of the service provider. The data card can also be used for receiving, sending SMS,making, and receiving voice calls etc. The next type of technology used for internetconnectivity is cable connections or fiber optic cable connections provided by the localservice providers. This service is cheap and getting popular day by day with newcompanies entering this segment. 2. Development of hypothesisA significant relationship exists between the types of technologies used in internetconnections with the nature of occupation.H0 = The types of technologies used to connect internet are independent of theoccupation categories.H1 = The types of technologies used to connect internet are dependent of the differentoccupation categories.To test this Hypothesis we did Chi-Square test for Independence of attribute.Sample size = 220 47
  48. 48. Value of χ2 d.f Level Tabulated value Status of observed Hypothesis 11.263 6 5% 12.59 H0 Accepted Decision: We accept the Null Hypothesis because we found out that differenttechnologies like data cards, mobile phones, landline phones, etc used for internetconnectivity are independent of occupation categories like students, jobholders andbusinesspersons‟.InterpretationThe research discovered that different technologies used to connect internet such asData cards, mobile and landline phones, cable connections etc are independent ofoccupation categories, it means that there is no specific preference of a particulartechnology by any specific occupation segment such as students, jobholders andbusinesspersons. The preference of the technology depends on different factors. Forexample, students continuing their studies from home probably opting for a landline orcable connection, because of its low cost and low maintenance factors, while studentsresiding in rented apartments or hostels probably opting a Data card or Multimediamobile phone because of its mobility factor. In the same way jobholder who does, nothave to travel constantly opts for a fixed connection, and executives with constantmobility chooses a Data card or Mobile phones to connect internet. 3. Development of Hypothesis:A significant relationship exists between the types of technologies used for internetconnections with different categories of students.H0 = The types of technologies used to connect internet are independent of the studentscategories.H1 = The types of technologies used to connect internet are dependent of the differentstudents categories.To test this Hypothesis we did Chi-Square test for Independence of attribute.Sample size = 59 48
  49. 49. Value of χ2 d.f Level Tabulated value Status of observed Hypothesis 3.243 3 5% 7.81 H0 AcceptedDecision: We accept H0 Hypothesis because we found out that the technologies usedfor connecting internet are independent of different categories of students such asstudents of educational and professional courses.InterpretationThe students are divided into two segments i.e., students perusing their professionalcourses and students perusing their educational courses. The use of internet in theeducational course is less but it is constantly raising, where as the use of internet ineducational courses is very high. However, as the younger generation is very much techfriendly, a PC or laptop has become a household product. It hardly matters anything fora student what course he/she is perusing, they use internet for entertainment,downloading, collecting information about different things, chatting, browsing etc. Inthis, case the technology for connecting internet not at all dependent of student‟scategories. 4. Development of Hypothesis:A significant relationship exists between the types of technologies used for internetconnections with different job categories.H0 = The types of technologies used to connect internet are independent of the differentjob categories.H1 = The types of technologies used to connect internet are dependent of the differentjob categories.To test this Hypothesis we did Chi-Square test for Independence of attribute.Sample size = 71 Value of χ2 d.f Level Tabulated value Status of observed Hypothesis 3.32 6 5% 12.59 H0 Accepted 49
  50. 50. Decision: We accept H0 Hypothesis because we found out that the technologies usedfor connecting internet are independent of different categories of jobs such as privatejobs, government jobs and public sector jobs.InterpretationJobs are divided into three categories here i.e., private jobs, public sector jobs andgovernment jobs, and internet is used greatly in this entire sector. Now the companiesare being globalised and all the processes are using online systems to operate, thetechnology used for internet connection plays a significant role. The nature of theinternet connection depends on the profile of the job not on the category of the job.Executives with fixed offices prefer fixed connections and executives with moremobility prefer Data cards and mobile connections. 5. Development of Hypothesis:A significant relationship exists between the types of technologies used for internetconnections with different types of businesses.H0 = The types of technologies used to connect internet are independent of the differenttypes of businesses.H1 = The types of technologies used to connect internet are dependent of the differenttypes of businesses.To test this Hypothesis we did Chi-Square test for Independence of attribute.Sample size = 90 Value of χ2 d.f Level Tabulated value Status of observed Hypothesis 2.764 6 5% 12.59 H0 AcceptedDecision: We accept H0 Hypothesis because we found out that the technologies usedfor connecting internet are independent of different types of businesses suchshowrooms, franchisees, and other types of businesses. 50
  51. 51. InterpretationIn this, research the businesses are divided into three categories i.e., the showrooms,franchise and other types of businesses. Now days the online billing is gettingpopularizing, most of the big showrooms and franchise are adapting this technique, bythis way the companies‟ gets information about their products performance in themarket, sales figures and other valuable information‟s. So it is important for thefranchise, showroom and other types of businesses to get connected with the server ofthe companies and for that they need an internet connection, the type of connectiondepends on the nature of the business, for regular transactions most of the time a fixedconnection is preferred. However, it s observed in the research that other types ofconnections are also used. 6. Development of HypothesisThere is a difference in the preference of service providers of internet connections in themarket.H0 = All the different service providers of internet connections are equally preferred inthe marketH1 = All the different service providers of internet connections are not equallypreferred.To test this hypothesis we did Chi-square test for Goodness of fit.Sample size = 220 Value of χ2 d.f Level Tabulated value Status of observed Hypothesis 47.98 5 5% 11.07 H0 RejectedDecision: We reject the Null Hypothesis because we found out that the serviceproviders who are providing internet connections are not equally preferred.InterpretationThe telecom companies present in the market provide the internet services. Some ofthese companies like BSNL, Airtel, Tata indicom, Reliance are giants in this business,and have established a good customer base. All these companies provide internet 51
  52. 52. connections through GPRS services, Data cards, fixed line connections and 3G.Vodafone is comparatively new in this business but Vodafone is providing GPRSservices in the past also, but they are expanding now. The user of internet prefers theservice providers based on their requirements, such as tariff plans, net speed, networkquality etc, and different service providers specializes in different areas. Therefore, theservice providers are not equally preferred in the market. 7. Development of HypothesisThere is a difference among the different purpose of using internet by the internet users.H0 = the internet users uses internet equally for all the purposes, such as work,entertainment, business etc.H1 = the internet users does not prefer internet equally for all the purposes, such aswork, entertainment, business etc.To test this hypothesis we did Chi-square test for Goodness of fit.Sample size = 220 Value of χ2 d.f Level Tabulated value Status of observed Hypothesis 17.19 3 5% 7.81 H0 RejectedDecision: We reject the Null hypothesis because we found out that there is a differencein the preference of using internet by the internet users.InterpretationThe interfere of internet in our lives is getting more and more day by day, whatever youwant you can search it on the net with sitting at the comfort of your office or home.Online shopping, banking, hotel reservations, ticketing and many more things can bedone by using internet, it‟s just one click of your mouse away. With this huge amount ofversatility, the preference of using internet by the users also differs according to theirrequirements. For example a student most preferably use internet for collectinginformation and for entertainment purpose, while a businessmen can use it for onlinebilling, while a job holder may use internet for reporting to his/her bosses, and that iswhy all the uses of internet are not equally preferred by all the classes. 52
  53. 53. 8. Development of Hypothesis for potential customer’s perception towards different features of data card.i. Cost of data card: Price plays an pivotal role in the purchase of data card. H0 = Price plays an insignificant role in purchase of data card. H1 = Price plays a significant role in purchase of data card.ii. Installation of data card: Installation process of data card plays an important role in the purchase of data card. H0 = Installation process of data card does not play an important role in the purchase. H2 = Installation process plays an important role in the purchase decision.iii. Durability of data card: Durability is an important feature, which the buyer considers at the time of making purchase. H0 = Durability of data card does not bothers the buyers purchase decision. H0 = Durability of data card is an important factor, which affects the buyers purchase decision.iv. User friendliness: User friendliness of the product is an important factor for purchasing the data card. H0 = User friendliness plays an insignificant role in the purchase of data card. H1 = User friendliness plays a significant role in the purchase decision of data card.v. Tariff plans: Tariff plans play a pivotal role in the purchase decision. H0 = Tariff plans are not given much importance at the time of purchase. H1= Tariff plans plays an important role at the time of purchasing the data Speed of Internet: Speed of the internet provided by the service provider plays an important role in the purchase decision of the data card. H0 = Speed of the internet plays an insignificant role in the purchase. H1 = Speed of the internet plays a significant role in the purchase of data card. 53
  54. 54. vii. After sales service: After sales service plays an pivotal role in the purchase of data card. H0 = After sale service is not an important factor of purchase decision. H1 = After sale services plays an important role in the purchase decision of the data card. viii. Image of the company: image of the service provider plays a pivotal role in the purchase of the data card. H0 = The image of the company plays an insignificant role in the purchase of the data card. H1 = The image of the company plays a significant role in the purchase of the data card.The table below shows the perception of internet users towards different factors.Feature Gran Hypothesi Stander Test Observe Tabl Status of d s d error Statistic d value e hypothesi mean of x s apply of Z value s ztest(tw at o tailed) 95%Price 3.76 H0 : µ = 3 0.07 3.76 – 3 10.85 1.96 H0 H1 : µ ≠ 3 /0.07 RejectedInstallatio 3.80 H0 : µ = 3 0.07 3.80 – 3 10.81 1.96 H0n H1 : µ ≠ 3 /0.07 RejectedDurability 3.94 H0 : µ = 3 0.073 3.94 – 3 12.87 1.96 H0 H1 : µ ≠ 3 /0.073 RejectedUser 4.08 H0 : µ = 3 0.064 4.08 – 3 16.87 1.96 H0friendly H1 : µ ≠ 3 /0.064 RejectedTariff 3.81 H0 : µ = 3 0.07 3.81 – 3 11.57 1.96 H0 H1 : µ ≠ 3 /0.07 RejectedSpeed 4.12 H0 : µ = 3 0.06 4.12 – 3 18.66 1.96 H0 54
  55. 55. H1 : µ ≠ 3 /0.06 RejectedAfter sale 3.50 H0 : µ = 3 0.07 3.50 – 3 7.14 1.96 H0service H1 : µ ≠ 3 /0.07 RejectedCompany’ 3.31 H0 : µ = 3 0.08 3.31 – 3 3.87 1.96 H0s image H1 : µ ≠ 3 /0.08 RejectedInterpretations 1. Price of the data card: In this research, it is discovered that price of the Data card is playing an important role in the purchase decision of the customer; Data cards with high prices are less preferred. BSNL is the only company in the market, which is providing Data cards on rental basis, and it is one of the main reasons behind BSNL‟s success. Reliance Communication and Tata Indicom is also providing data cards at cheaper rates. Normal Data cards ranges from Rs 2000 to Rs 3000 and 3G, Broadband Data cards range starts from Rs 3500 onwards. 2. Installation process: The installation process of data card should be simple and can be easily understood by the user, because the user is the one who is going to operate it with the machine, and if it is a complicated process then user might think for other options. A user wants simplest process to get connected with the internet, just plug in the data card and connect, if he/she needs to install some special software‟s in the PC or Laptop for using the data card, it is not possible for everyone to handle this installation process, so installation process plays an pivotal role in the purchase decision. 3. Durability: Purchasing a Data card is mostly a long-term investment, so a Data must have to be durable enough to meet the requirements of the user. A Data card should not get over heated while in use, should be made up of un-breakable plastic are some features of durable Data card. 4. User Friendly: A Data should be user friendly in operations. Apart from connecting internet, Data cards comes with multiple features such as receiving 55
  56. 56. and sending SMS, making and receiving voice calls, etc, so all these functions should be easy to operate, if it is little complicated it becomes a hassle for the user and ultimately affects the purchasing decision.5. Tariff Plans: Apart from the price of the Data, card how much the internet service is costing to the pocket of the user is very important factor in the purchase of any Data card. A internet user wants tariff plans which fits into his/her budget and fulfills all the other requirements. Again BSNL is the market leader in this segment with cheapest tariff plans and after that Reliance and Tata Indicom comes.6. Net Speed: The internet speed is very important for the users and slow internet is not at all preferred in our fast moving lives. With the introduction of Broadband and 3G in the market of Data cards, the competition has got even tougher. Customers prefers internet with good downloading speed.7. After Sale Service: After sales service like sending bills on time, keep the customers updated with the new developments in different areas etc improves the chances of increasing the sale of data card, and plays an important role in the purchase decision of the customer also.8. Image of the company: The goodwill created in the market through years of providing superior service quality helps the company to sale its products, because it‟s the image of the company in the minds of the customer who is going to purchase the data card. If the brand is trusted in the market, it makes a positive impact on the purchase decision. 56
  57. 57. Conclusions & recommendationsOn our research, we have found out the followings: 1. Vodafone is not actively promoting its Data card products in the market, that‟s the reason awareness about Vodafone‟s data card is very low, at the same time awareness about the data cards in the market cannot be said bad, around 39% of the respondents are aware of data cards. 2. Vodafone emphasizes on its high quality service, but the price at which they are providing the services is a bit too high. 3. Vodafone mainly focusing on a niche segment in the market, i.e., they target working professionals, executives, etc who needs to travel more frequently and required to be connected with internet all the time. 4. We found out in the survey that, maximum of the population is using either mobile phones or landline phones to get connected to the internet, the reason behind this are :  Cheaper tariff plans.  Low installation cost.  Multiple usability. 5. There is a strong competition between Bsnl, Reliance, Tata indicom and Airtel, they have 30%, 21%, 17%, 15% market share respectively in our survey. It establishes the fact that they have a good customer base and all four companies are old players in the field of providing internet services, so it is not going to be easy for Vodafone to crack the customer base of theirs. 6. Airtel and Bsnl have their expertise in providing internet connections through mobile phones, landline connections and WLL phones. They are having a good signal strength and network support in almost every villages and towns, as the service is good Airtel charges a high tariff but at the same time Bsnl charges the lowest tariffs. For Vodafone they lack in both, their tariffs are high and not have strong coverage also. 7. Maximum of the population, those who are using internet are using it for an average of 30 hrs in a month, and they spend on an average around Rs. 350 a month on it, so there is a need for low cost service, which Vodafone presently is not providing. 8. We asked to the respondents, who are having internet connections, what will be the important factors for you while choosing a data card, as you are already 57
  58. 58. using an internet connection, the respondents gave more emphasis on the price of the data card, the tariff plans and the speed of the internet. Vodafone lacks in price of the data card and the tariff plans, its price & tariffs are high but its speed it reasonably good. But because of providing data cards on rental basis and lowest tariff plans Bsnl is the leader, then Reliance communication comes with its cheaper data cards and attractive tariff plans and with reasonable speed, and after that its Tata indicom with almost the same services as Reliance offers. 9. The market is having great potential and scope for development, as the use of internet is increasing day by day and computers have become a part of our lives, in the same way an internet connection is becoming necessary. 10. The companies are targeting students both educational and professional courses (as courses are becoming more technology based), job holders (needs to be connected with their offices) and show rooms (now online billing is started), Vodafone needs to enter in new segments of the markets. 11. Vodafone is having a very strong product, but due to high prices and lack of promotion its lagging behind.Strategic recommendations Following recommendations are essential for success in the future: 1. Vodafone should look to explore new segments in the market. 2. They have to be more prices competitive, as the competitors are charging low prices, Vodafone cannot succeed with its high price tag, and they have to offer more value for money product. 3. Vodafone should actively promote their products, as the other companies are doing; they have to make aware of their products to the masses. 4. Vodafone is a multinational company; they should use their goodwill to capture the market. 58
  59. 59. CHAPTER 3: GRAPHS AND CHARTS1. Age of respondents Age of respondents 250 200 235 150 190 100 50 105 70 0 No of Persons total = 600 We went to 600 respondents (200 each from Burdwan, Durgapur, Asansol) and asked them about there age. Maximum of the respondents were between the age of 18-352. Occupation of the respondents occupation of respondents 400 300 200 290 220 100 No of Persons 90 0 Student Service Business men total = 600 We asked the respondents what they do?around 49% of the respondents were students, from both professional and educatonal courses, around 36% were job holders from different sectors like government sector, private sector etc, and the remainig 15% were Business mens, they are showrooms, frenchaisis etc. 59
  60. 60. 3. Have to a PC or Laptop? Have a PC or Laptop 400 300 340 200 260 No of 100 Persons 0 Yes No total = 600 We asked the respondents that they are having or using a PC or Laptop? Around 57% of them out of 600 said yes they have or they use. This figure shows that a computer is still not available in each home. Despite of goverments efforts the results were not satisfactory.4. Have internet connection or not ? Have internet connection 250 200 220 150 100 No of Persons 120 50 0 Yes No total = 340 If the avalability of the computer is low, then the probability of having an internet connection connected to it getting more less, this fact shows that only 64% out of 340 are connected to the internet and maximum of them are through GPRS or GSM connections or through landlines. 60
  61. 61. 5. Aware of data card or not? Awareness of data card 400 300 350 200 250 No of 100 Persons 0 Yes No total = 600 The awareness about the data card is also low in the market, only 39% of respondents out of 600 were aware of data cards, inspite of random advertisment there is a lot more to be done, we need to educate our potential customers more about the product.6. Type of internet connection used by the respondents Kind of internet connection 90 80 70 78 72 60 50 40 30 37 No of Persons 33 20 10 0 Data card Use mobile Use landline Other type of phone to connection connections connect to connect total = 220 From the respondents who are having internet connection we asked them what kind of connection they use? The maximum were in favour of Multimedia Mobile phones connection through GSM/CDMA connections, and through landline connections. Only 17% out of 220 uses data cards to connect internet. 61
  62. 62. 7. Purpose of using internet. Purpose of useing internet 80 70 60 74 50 63 40 51 30 20 32 10 0 No of Persons total = 220 The purpose of using internet also indicates the requirement of internet. Internet is becoming a part of our lives now days, job holders needs to be connected with there offices (positioned globally) all the time. Students gets huge amount of information on different subjects and topics from internet. Now days online billing is getting popular, so all the showrooms, shops, franchisies needs to be connected with the companies server all the time, and the companies gets instant information about the sales position and revenue detatils. Internet is also used for entertainment purpose, like chating, gaming, blogging ets, nowdays the social networking sites like,, ets are very popular.8. Awareness of Vodafone‟s Data card. Awareness of Vodafone data card 600 500 543 400 300 No of 200 Persons 100 57 0 Yes No total = 600 The awareness of Vodafones data card is very low in the market, its only 9.5% of the total sample, the main reason behind this was because Vodafone doesnot 62
  63. 63. promote its products actively like others. Vodafone is having world classpoducts, but due to lack of promotion the awareness is very low. 63
  64. 64. Annexture QUESTIONNAIRE1. What is your Age?_______________________2. Your occupation? a. Student b. Service holder c. Business men3. Do you use PCs of Laptop? a. Yes b. No4. If you have a PC or Laptop then, do you have an internet connection on it? a. Yes b. No5. Are you aware of internet data cards? a. Yes b. No6. If you have an internet connection, then what kind of connection do you have? a. Data card b. Use mobile phone to connect to the internet c. Use landline connection to connect to the internet d. Other types of connections7. If you have an internet connection, then which service provider is providing you this service? a. BSNL b. Reliance Communication c. Tata indicom d. Vodafone e. Airtel f. Others8. In a month, on an average how many hours do you use internet? a. 10 hrs to 15 hrs or >500 MB b. 15 hrs to 30 hrs or 500 MB to 1 GB c. 30 hrs to 45 hrs or 1 GB to 2.5 GB d. 45 hrs & above or 2.5 GB and above9. If you use internet regularly, then what is your average monthly expenditure? a. Between Rs 300 to Rs 350 b. Between Rs 350 to Rs 500 c. Between Rs 500 to Rs 800 64