STARTAGIC ANALYSIS OF RELIANCE COMMUNICATION WITH COMPETITOR IN CHANDIGARH AND SURROUNDING OFFICE OF RELIANCE COMMUNICATION LTD. A PROJECT REPORT / SUMMER TRAINING REPORT Submitted By SIKANDER SINGH In partial fulfillment for the award of the degree of Bachelors of Business AdministrationRIMT – INSTITUTE OF MANAGEMENT AND COMPUTER TECHNOLOGY PUNJAB TECHNICAL UNIVERSITY: JALANDHAR (2010-2013)
ACKNOWLEDGEMENTThere are a few things that come in the life of a person, may be for a shortspan of time, but leaves on ever shining impression in to the mind. Mysummer training is one of the events which will be ever green in my life. As Ihad been placed in RELIANCE COMMUNICATION LIMITED, at Chandigarh. Ishared the real marketing skills and knowledge from their experienced,enthusiastic and cordial executives, without whom I would have not been ableto achieve my aim.First of all I would like to express my thanks to _________________ cluster head ofReliance communication Limited, Chandigarh for permitting me to do thetraining at his concern. I am also very grateful to Miss kiran(distributor lead)for sharing valuable experience and suggestions regarding training andpreparation of report. I express my special thanks to my mentor miss shivanigautam who has given me proper guidance in spite of having his busyschedule. I would like to convey special thanks to my friends for providing mehelp and co-operation needed. I also owe sincere gratitude to my familymembers whose love, affection, co-operation and moral support haveprovided me the strength to carry out this project
PREFACEA project is a scientific and systematic study of real issues on a problemwith the application of management concept and skills. The study can dealwith small or big issues in any division of an organization. It can be casestudy where a problem has been dealt with, through the process ofmanagement. The essential equipment of project is that, it should containscientific collection of data, analysis and interpretation of data leading tovalid conclusion.Summer Training is an essential part in BBA curriculum. It enables thestudent to share the real experience in industry. My summer training hasplaced in Reliance communication limited for the period of four weeks inChandigarh, Punjab.The topic of my project was STRATAGIC ANALYSIS OF RELIANCECOMMUNICATION with competitor in Punjab and surrounding office. Thisproject report tends to give a sharp picture of the telecom industry.I hope, this study can be of some help to the telecom industry of hisProduct and service.
Reliance communications1. COMPANY INFORMATIONReliance - Indias largest business houseReliance – Anil Dhirubhai Ambani Group, an offshoot of the Reliance Groupfounded by Shri Dhirubhai H Ambani (1932-2002), ranks among India‘s top threeprivate sector business houses in terms of net worth. The group has businessinterests that range from telecommunications (Reliance Communications Limited)to financial services (Reliance Capital Ltd) and the generation and distribution ofpower (Reliance Energy Ltd).Reliance – ADA Group‘s flagship company, Reliance Communications, is Indiaslargest private sector information and Communications Company, with over 40million subscribers. It has established a pan-India, high-capacity, integrated(wireless and wire line), convergent (voice, data and video) digital network, tooffer services spanning the entire infocomm value chain.Other major group companies — Reliance Capital and Reliance Energy — arewidely acknowledged as the market leaders in their respective areas of operation.What Reliance is all about?
Reliance Energy Ltd. Reliance Mutual Fund Harmony Reliance Communications Reliance Life Insurance Reliance Anil Dhirubhai Ambani Group Reliance General Insurance2. BUSINESS DESCRIPTIONRELIANCE COMMUNICATION2.1 OVERVIEW ―A dream come true‖The Late Dhirubhai Ambani dreamt of a digital India — an India where thecommon man would have access to affordable means of information andcommunication. Dhirubhai, who single-handedly built India‘s largest private sectorcompany virtually from scratch, had stated as early as 1999: ―Make the tools ofinformation and communication available to people at an affordable cost. Theywill overcome the handicaps of illiteracy and lack of mobility.‖It was with this belief in mind that Reliance Communications (formerly RelianceInfocomm) started laying 60,000 route kilometers of a pan-India fibre opticbackbone. This backbone was commissioned on 28 December 2002, the auspicious
occasion of Dhirubhai‘s 70th birthday, though sadly after his unexpected demiseon 6 July 2002.Reliance Communications has a reliable, high-capacity, integrated (both wirelessand wire line) and convergent (voice, data and video) digital network. It is capableof delivering a range of services spanning the entire infocomm (information andcommunication) value chain, including infrastructure and services — forenterprises as well as individuals, applications, and consulting. Today, RelianceCommunications is revolutionizing the way India communicates and networks,truly bringing about a new way of life.2.2.1 VISION:―We will leverage our strengths to execute complex global-scale projects tofacilitate leading-edge information and communication services affordable to allindividual consumers and businesses in India.‖We will offer unparalleled value to create customer delight and enhance businessproductivity. We will also generate value for our capabilities beyond Indianborders and enable millions of Indias knowledge workers to deliver their servicesglobally.‖2.2.2 India’s leading integrated telecom companyReliance Communications is the flagship company of the Anil Dhirubhai AmbaniGroup (ADAG) of companies. Listed on the National Stock Exchange and theBombay Stock Exchange, it is India‘s leading integrated telecommunicationcompany with over 40 million customers.
Our business encompasses a complete range of telecom services covering mobileand fixed line telephony. It includes broadband, national and international longdistance services and data services along with an exhaustive range of value-addedservices and applications. Our constant endeavour is to achieve customer delightby enhancing the productivity of the enterprises and individuals we serve.Reliance Mobile (formerly Reliance India Mobile), launched on 28 December2002, coinciding with the joyous occasion of the late Dhirubhai Ambani‘s 70thbirthday, was among the initial initiatives of Reliance Communications. It markedthe auspicious beginning of Dhirubhai‘s dream of ushering in a digital revolutionin India. Today, we can proudly claim that we were instrumental in harnessing thetrue power of information and communication, by bestowing it in the hands of thecommon man at affordable rates.
CHART: 1 Fig: 1Reliance uses C.D.M.A. ( Code Division Multiple Access ) technology for itswireless communication service which is used for Mobile as well as Fixed lineservices. C.D.M.A. is known for better voice quality and higher data throughputacross the air interface at low operating cost .
2.1.1 RELIANCE MOBILE POSTPAID FEATURES OF POSTPAID a)1 INDIA- Now call any phone, anywhere in India for just ONE RUPEE per min.b) My Plans- Presenting a range of Postpaid plans designed to fit every lifestyle.So go ahead get on to Local gossip , chat for hours on STD , get close to yourgroup or jest get lost in new horizon.c) Joy Plans- Reliance Mobile postpaid is a joy to use. Our postpaid plans helpyou save on costs. Take your pick from a wide choice of plans with economicaltariff rates, according to your use and budget.d) On-net Talk time Pack- Get 1,000 minutes of FREE talk time. That‘s right.Now, you can enjoy the first 1,000 minutes of calling to all Reliance mobiles andfixed wireless phones and terminals (FWP/T) in your circle, absolutely free!
e) Get Started Kit- Do not be tied down by a particular handset or phone number.Now set yourself free with the new ‗Get started kit‘ from Reliance Mobile.f) Bill Payments- Introducing convenient bill payments. Now pay your billsdirectly from your credit card or bank account, and save precious time.g) INMARSAT- Save up to 70 per cent on calls to satellite phones. Relianceexclusively offers its subscribers significant savings — up to 70 per centdepending on the type of terminal and the location — for voice calls made to anyInmarsat number. PREPAIDFEATURES OF PREPAID a) Prepaid Tariffs- Choose the tariff plan that suits you needs. b) E-Recharge- Now you can recharge your prepaid with any amount, fromRs.10 to Rs.10,000. So dont let your budget stop you. Choose a recharge value thatsuits you and stay mobile. c) 1INDIA- Introducing 1 INDIA recharge options of 1 day, 1 week and 1month validity. d) Get Started Kit- Gone are the days when you were bound by a particularhandset and a certain phone number. You can now set yourself free with the newGet Started Kit from Reliance Mobile. e) Chat & Play - Now you can recharge your prepaid with any amount, fromRs.10 to Rs.10,000. So dont let your budget stop you. Choose a recharge value thatsuits you and stay mobile.
Reliance HELLO Reliance landline: FEATURESA complimentary bouquet of featuresa) Next-Gen caller ID: Reliance Landline displays the name and/or number of awaiting caller while you are in the middle of a conversation. It allows you theflexibility to choose between two calls or switch from one caller to another.b) Mobile phone features: Now enjoy all the interactive benefits of a mobile phone.Store and recall numbers from the phone book, check the history of missed / dialed/ received calls. What‘s more, you can also use the history menu to make freshcalls.c) Delayed hotline: You can program your Reliance Landline to automatically calla predefined number by lifting the receiver and holding it for seven seconds.d) Navigation keys: Using the navigation keys on Reliance Landline you canactivate phone features like delayed hotline, line locking, etc — now you need notremember complicated feature codes and cumbersome procedures. You can alsoset your preferred ring tone, ringer volume and LCD contrast.
e) Remote phone management: You can lock or unlock the STD/ ISD facility orhotline settings on your Reliance Landline, remotely from anywhere, from anytone / DTMF phone.Plus, you get host of other interesting features like speaker phone, 3-wayconferencing, quick dialing, and many more. Fixed Wireless Phone Benefits: a) No wires attached Get on the wireless connectivity bandwagon. And straight away become immune to cuts in the cable, rains etc. Carry the set along with you when you move from one room to another or when you shift your home/office. b) Wireless Internet (Reliance Net connect) The FWP has an in-built modem for high speed internet connectivity. Surfat speeds up to 115 kbps. What‘s more, you do not need a separate ISP connection for operating the set. c) Mobile Phones Features Enjoy all the features of a mobile phone: SMS, In-built caller line identification, voice mail, 99-number phone book, speaker phone, a choice of many ringtones, etc. d) City Mobility
You can use your FWP anywhere within your city and still receive and make calls, at no extra cost. FIXED WIRELESS TERMINAL(FWT)Fixed terminal, limitless benefitsBENEFIT e) Great SavingsUnbelievably low call rates. Substantial savings on ISD calls. f) Zero Effective RentalsValue of free calls almost equivalent to monthly plan charges. g) Parallel Connection FacilityTwo voice ports to connect two telephone instruments to be used as parallelconnections. h) No Wires AttachedWireless connectivity-immune to cable cuts, rains etc. Carry it along when youshift your home/office. i) Wireless Internet (Reliance Net connect)
In-built modem for high speed Internet connectivity at speeds of upto 115 kbps. No separate ISP connection required. j) State-of-the-art features Three-way Call Conferencing, Speed Dialing, Hotline, Call Restrict/Call Lock, Call Wait/Call Hold, Call Divert, Alarm and Caller Line Identification enabled. Reliance broadband.2.3 COMPETETORS2.3.1 BSNL
The Grand Daddy of all Operators, The State owned B.S.N.L. was the first tolaunch P.C.O. service across the country under the guidance of Sam Pitroda whorevolutionized the telecom industry in India. Besides its nationwide presence, itenjoyed the first mover advantage and had no competition for almost a decade. Theadvent of private operators made BSNL pull up its socks but still has an edge overothers in the market.2.3.2 TATA INDICOM Pay Telephony Business Unit (PTBU) is a strategic business unit of TataTeleservices Limited and has been the first private and branded player in thepayphone industry in the country. It provides its services under the brand name ofTata. Starting with 5 circles in 2000 it has a nationwide presence in 20 circles andover 200 towns across the country today. Tata also uses C.D.M.A. wirelesstechnology as used by Reliance but with a much smaller infrastructure which isconcentrated in only a few states like Maharashtra and Andhra Pradesh.2.3.3 AIRTELAirtel, the Basic phone service of Bharti emerged as the first private competitor inthe basic phones market. Though using Landline phones (copper-wire
circuitry) the service turned out to be a welcome break from the inefficientgovernment owned operators.3. STRATEGIC ANALYSIS OF THE COMPANY3.1. ANSOFF’S MATRIXThe Ansoff product-market matrix helps to understand and assess businessdevelopment strategy. It has two dimensions, products and markets. Four differentgrowth strategies can be formulated and any business can choose which strategy toemploy, whether purely or as a mix. The strategies are Market Penetration Market Development Product Development DiversificationReliance FWT PCOs can be categorized as product development. Productdevelopment involves selling new products in existing markets.
MARKET PRODUCT PENETRATION DEVELOPMENTPenetrating the market for Product A, B, Introduction of newC, D wherever leadership is facilities, customer friendlythere. service, attractive MARKET DIVERSIFICATION instruments etc. DEVELOPMENT The company may try providing consultancy for Telecom infrastructureIntroducing the Product B, C, D in newermarkets(New territorial region creation in developing countries in Middle East,within the country) South Asian regions. Nepal, Bhutan, Bangladesh TABLE: 1 Fixed Wire line Phones
3.3 PEST ANALYSIS POLITICAL ECONOMICAL Permission of FDI (100%) India’s Per Capita holds higher tele- New Telecom Policy 1999 density potential Recommendations Of TRAI for Increasing demand for telephony growth in WLL phones strong association between service Policy changes for public-private sector growth and telecom partnerships development Unified Access Licensing Scheme SOCIAL TECHNOLOGICAL High purchasing power of people. growth of telecommunications new sources of employment infrastructure welfare enhancing consequences shortage of telephone lines and improved access in the fields of high telephone charges education, healthcare, Last Mile Connectivity governance Technological innovation in the form of CDMA and 3G. TABLE: 2The PEST analysis is a useful tool for understanding market growth or decline, andas such the position, potential and direction for a business. A PEST analysis is abusiness measurement tool. PEST is an acronym for Political, Economic, Socialand Technological factors, which are used to assess the market for a business ororganizational unit.
3.4 SWOT Analysis INTERNAL ASSESSMENT OF ORGANISATION STRENGTHS WEAKNESS Highest commission structure (RIL- Hesitation among PCO owners in 30%, MTNL 15-18%) among adopting relatively new technology in national long distance operators. landline segment. State of art wireless technology. Resentment among business class due Hassle free installation. to billing problems with RIM. No security deposit Connectivity problems in some remote, Brand name ―Reliance‖. rural areas of Bihar, Uttar Pradesh. Sales backed by extensive customer Callousness on the part of LBA will care and after-sales services. effect customer satisfaction Prepaid PCO system, therefore, hassle free billing mechanism SWOT ANALYSIS OPPURTUNITY THREATS Curre nt te le-density o f Ind ia is only Pitted against well-entrenched 9.15%. 90.85% o f peop le still player like MTNL / BSNL which depend o n PCO s fo r their co mmunicatio n needs. control approximately 85% of PCO The co mpo und a nnua l gro wth rate market in metros, 90% of PCO of PCOs is 25 %. market in urban, semi-urban areas Curre ntly there are 16.55 lacs PCOs and nearly 100% in rural areas. in Ind ia, wa iting to be churned. Entrance of new players like Bharti Custo mer service standards o f its and TATA Teleservices ma in co mp etitor M TNL / BSN L is not very sa tisfacto ry Perceived saturation in PCO Prob le ms o f b illing in po st-paid market. systems TRAIs impending regulations EXTERNAL ASSESSMENT OF ORGANISATION
4. ANALYSIS OF COMPANY STRATEGY 4.1 PORTERS’s FIVE FORCE MODEL SUPPLIER POWER High Competition Concentration of SuppliersBARRIERS TO ENTRY THREAT OF SUBSTITUTES RIVALRY High Initial Costs Moderate High Switching High (Price Sensitive Market) CostsrowthGovernment Regulations Low Exit Barriers High Switching CostsSpecialty Assets Required High Switching Costs Low Concentration Ratio BUYER POWER High Bargaining Power High Switching Costs CHART: 3
5 ANALYSIS OF COMPETITIVE POSITION5.1 BCG MATRIXBCG matrix is based on the product life cycle theory that is used to explain howdifferent products should be prioritized in a company‘s portfolio. It has twodimensions: market share and market growth. The two dimensions are used tocreate a quadrant matrix in which all the products in a company‘s product portfolioare categorized into the four categories. This analysis helps avoid a strategymistake made frequently that is of measuring the performance of different productson the basis of a single criteria e.g. generic growth rate. This framework assumesthat an increase in relative market share will result in an increase in generation ofcash. 5.1.1 STARSThese are high growth products which have a large market share in fast growingindustries. In case of reliance Communications its FWT services can be called starssince they have a share of 21% of the market and are growing at the rate of 9%.This service contributes 18% of total revenues and justifiably accounts for a large
percentage of total investment. Continuous investments should be undertaken bythe company to expand market share of WLL services because this could lead tothem becoming cash cows for the company in the future. 5.1.2 CASH COWSThese are the products which are leaders in markets which are slow growing butthe company has a large share of the market. As a result these products generatelarge amounts of cash and profits but because of the slow rate of growth of themarket investments in these products should be kept low. These products are thefoundation for a company and provide the cash required to turn question marksinto market leaders. In context of Reliance its cellular services are growing at 4%p.a., are the cash cow which form the foundation of the company. 5.1.3 DOGSThese are the products in which the company has a small share in a slow growingmarket. As a result their contribution to overall revenues is limited and they canturn into cash traps because of money tied up in a business which has limitedpotential. Therefore the company should be beware of expensive turnaround plansand should try to divest in these products. In case of reliance its fixed line servicescan be called the dog for the company.
5.1.4 QUESTION MARKSThese are the products that are growing rapidly and thus consume large amounts ofcash, but because they have a low market share they don‘t generate much cash. Butif proactive measures are not undertaken to increase the market share theydegenerate into dogs after years of cash consumption. Therefore the companyshould aim at either investing heavily to increase market share or sell off togenerate whatever cash it can. In case of Reliance there are a number of productswhich can be put into this category for example ISPs and LPCs and WLL PCOs.A major limitation of this model is that it assumes market growth rate to be theonly factor of industry attractiveness and relative market share to be the onlyindicator of competitive advantage. Therefore it ignores the strategy where abusiness might use a ―dog‖ to gain a competitive advantage in other business units.
STAR QUESTION MARK Fixed Wireless phone Fixed Wireless Terminal Phone PCOs ISP and Broadband Services GSM cellular service. CASH COWS DOGS Cellular Services Fixed Wire line Phones Reliance India Card Recharge Coupons TABLE: 36. STRATEGIES ADOPTED6.1 SEGMENTATION6.1.1 GeographicGeographic segmentation divides markets into different geographical units. Thereare four main cellular segments
Metro – the metropolitan areas of Mumbai, Delhi, Calcutta, and Chennai are underthis category of telecommunications circles and continue to lead.Category A circles – mostly analogous to the states of India, comprising AndhraPradesh, Maharashtra, (category a leaders) Gujarat, Karnataka and Tamil Nadu.Category B circles – mostly analogous to the states of India, comprising UttarPradesh (east and west), Punjab (category B leaders), Rajasthan, Haryana, Kerala,Madhya, Pradesh, and West Bengal.Category C circles – mostly analogous to the states of India, comprising Bihar,Orissa, North-East Assam, Jammu and Kashmir, Himachal Pradesh, Andaman andNicobar IslandsIn context of Reliance PCOs, the company is specifically targeting non metros,highways, commercial areas in metros, small townships and low income clusters inurban areas for e.g. urban villages and industrial areas.6.1.2 DemographicIn demographic segmentation, the buyers are divided into different groups on thebasis of variables such as their age, family size, family life-cycle, gender, income,occupation, education, religion, race, generation, nationality and social class.Consumer wants, preferences and usage rates are often associated withdemographic variables. The relevant categories that can be identified for ReliancePCOs are senior citizens, unemployed youth, small shop owners, kirana stores andexisting PCOs owners
6.2 TARGETINGReliance Communications current targeting approach is a mass-marketing methodthat tries to address the needs of the entire market and widen its subscriber base. Inmass marketing, the seller engages in mass production, mass distribution, and masspromotion of one product to all its buyers. Mass marketing creates the largestpotential market, which leads to the lowest costs, which in turn can lead to lowerprices and higher margins.Reliance successfully implemented this strategy and while it did help Reliance inexpanding its customer base, its strength and spread remained limited to theCategory C regions (See table 2). The apparent popularity of RelianceCommunications in this category is due to its positioning in the market as a“Common Man’s Phone”. Dhirubhai Ambani had dreamed of “Roti, Kapda,Makaan aur Mobile” which clearly reflects the strategy, adopted by Reliance. Thelow-tariff plans, low fared prepaid and postpaid offers have brought Reliance closeto the price conscious people.They focus on few key aspects while promoting - Next Generation technology Widely available (Able to connect 90% of India‘s population) Low tariff rates to attract a wide customer base
Range of handsets offered with Reliance connections (Black and white handsets, colour handsets with camera, video camera phone, camera watch phone, PDA colour phone) Special offers for making calls to the Gulf, USA and Canada6.3 POSITIONINGPositioning can be defined as the act of designing the company‘s offering andimage to occupy a distinctive place in the mind of the target market. Thepositioning of the target has to be such that a majority of the target market segmentidentifies with it.7. 4 P’S OF MARKETING7.1 THE FIRST “P” PRODUCT
The action plan of launching a new product includes a decision on the four Ps ofproduct, place, price, and promotion as well as the three Ps of services namelypeople, processes and physical evidence. Also it is not a pure product or a pureservice that is being marketed. In terms of product Reliance is offering tangiblegood with accompanying services, with the handsets being tangible goods and theirmainstay being the services. Now we can make this tangible on the basis of place,people, price, and communications material.Historically the thinking was that a good product will sell for itself. However thereare no bad products anymore in today‘s highly competitive markets. Therefore it‘sinevitable now for a company to ignore on the various aspects of a product. Wehave tried to analyze the product of Reliance Communications i.e. ‗WLL‘ on thebasis of following parameters:QualityWhen we talk about the quality of any telecom service we basically focus onfollowing aspects:Voice quality-The Voice quality in CDMA based Networks is much superior as compared toGSM Networks. Therefore Reliance WLL has a technological edge over its GSMcounterparts.
Data Transfer Rate-The Data rates throughput available to a WLL user using a 3G handset, beingprovided by Reliance is much higher than the data rates provided by the GSMOperators using GPRS, a 2.5 G technology inferior to Reliance 3rd Gentechnology. So for a layman, it may mean that watching a Video Clipping or amultimedia application on a CDMA Handset will be much more fun as comparedto the present day GPRS ServicesStrong Optical Backbone-Reliance, being an operator with Pan India presence, and possessing a strongoptical Backbone spread across the country, is expected to deploy and provide nextgeneration telecom services quicker and cheaper than any other private operator inthe country.APPEARANCEAppearance and design, however, still remains the users first turn-on trigger.Reliance WLL phone come as a refuge to the market as they are targeting thevarious segments of the society. The low end model starts for as low as Rs. 2000and the range goes up to Rs. 30000. The various phone models available arequality phones being manufactured by the top firms like Nokia, Motorola,Samsung and LG etc.BRAND
Reliance Communications is the outcome of the late visionary Dhirubhai Ambanis(1932-2002) dream to herald a digital revolution in India by bringing affordablemeans of information and communication to the doorsteps of Indias vastpopulation. Reliance Communications Ltd., an Anil Dhirubhai Ambani Enterprisesgroup company, is Indias largest private information and communications servicesprovider, with a subscriber base of over 11 million. Reliance Communications hasestablished a pan-India, high-capacity, integrated (wireless and wire line),convergent (voice, data and video) digital network, to offer services spanning theentire Communications value chain.SERVICEReliance Communications network is a pan India, high capacity, integrated(wireless and wire line) and convergent (voice, data and video) digital network,designed to offer services that span the entire Communications value chain -infrastructure, services for enterprises and individuals, applications and consulting.The network is designed to deliver services that will foster a new way of life for aNew India.SUPPORTThe major focus for any company in the service sector is how satisfied theircustomer is with the service being provided by the company. The service doesn‘tend with by selling the phone to the customer but also solving the concern,difficulties, queries and complaints of the customer. Reliance Communications hassome innovative features like R-World apart from the usual customer supportservices being provided by other telecom players. Reliance has a 24 by 7, 365 days
a year, customer service in ten regional languages to ensure consumers have asmooth experience.7.2 THE SECOND “P” PRICEHow much are the intended customers willing to pay? Here we decide on a pricing strategy - donot let it just happen! Although competing on price is as old as mankind, the consumer is oftenstill sensitive for price discounts and special offers. Price has also an irrational side: somethingthat is expensive must be good. Permanently competing on price is for many companies not avery sensible approach. Reliance India Mobile has revolutionized the Indian mobiletelephony market through unique pricing models. In fact, thanks to Reliance‘sinnovative pricing, tariffs in India have fallen across the board by over 70 per cent,making it the worlds lowest-cost mobile market today. India was the worldshighest cost market in the nineties.As of now, RIM has concentrated in terms of its pricing in the economy to mediumvalue segment. The products with high and good value have not been verysuccessful. But that was partly because at that time, reliance was more than just aservice provider, dealing in handsets and post paid plans and selling customizedsolution. Now, with a maturing market, as people are moving to upgrades relianceseriously needs to look into the high value segment. By high value we mean highquality and high price segment. A high service in terms of not just the value addingfeatures but also the quality of your basic services. Airtel has projected itself as aservice provider with superior network coverage. Reliance has had issues in thepast with its billing and also its traffic congestion which has left many customerscomplaining. And as they look to expand into new segments that are more life stylefocused and brand conscious, negative word of mouth publicity is the last thing
they would want. Side by side, they also need to look for the latest offerings in themarket to lure and retain customers. The first movers advantage they had accruedis now eroded as the competitors have come out with similar features and serviceslike internet surfing, cricket scores and multimedia content in both GSM as well asCDMA segments. So reliance needs to heavily invest in developing new andunique differentiating features and products to project itself as the better option tothe upwardly mobile youth. Like Airtel‘s Blackberry initiative. Even though Airtelis fighting reliance bitterly in terms of the least priced services to the consumers,having a high end limited sales volume product in its range gives it a superiorimage because of its aspiration power in the minds of the affluent youth.In terms of the market pricing is concerned, RIM is faced with a unique situation.Although it is aiming for market penetration, the usual low pricing strategy will notbe very successful as all the rivals are offering services at a very competitive rateand drastic undercutting will only lead to erosion of profit margins. Also themarket is growing rapidly and further lowering of prices will not fuel the growthfurther.SCHEMES:TARIFF PLAN FW FW FW FW FW FW 150 290 02 03 04 600RENTAL(RS./MONTH) 150 290 500 1000 1500 600CLIP CHARGES 50 - - - - -
FREE CALL UNITS 50 150 450 1000 1750 2000FREE 60 180 495 1000 1575 600TALKTIME(RS/MONTH)RATE PER CALL UNIT 1.20 1.20 1.10 1.00 0.90 0.30:TO RELIANCERS/CALL UNIT 1.10:OTHERSSECURITY FEE 2800 280 280 2800 2800 2800 0 0 TABLE: 4Amount of sales (per month): FWP/I PhoneAREA FWP(SALE IN UNIT) I FONE(SALE IN UNIT)MAYUR VIHAR 25 20ADHCHINI 20 20GREEN PARK 30 25SAKET 25 25PREET VIHAR 25 20 TABLE: 5
7.3 THE THIRD “P” PLACEAvailable at the right place, at the right time, in the right quantities? Some of therevolutions in business have come about by changing Place. We have focused ondifferent attributes related to reliance place strategy in successfully removing thebottlenecks associated with the timely availability of its products through anationwide network of Web Worlds.7.3.1 LOCATIONSReliance Web World is a countrywide network of retail outlets offering a host ofstate-of-the art communication and information services along with food andbeverages in a modern ambience. It probably is also the worlds largest network ofpublic access broadband centre. A total of 240 Web Worlds are operational in 111cities and towns across India. The number of Web Worlds in this network willfurther increase to cover nearly 700 towns and cities. All Web World outlets havethree components: Customer Convenience Centre, Broadband Centre and GourmetCafé.7.3.2 CHANNEL MEMBERS-The following are the desirable features for sales people:Competence First and foremost is the competence of the sales force. Reliance has had billing problems in the past and competent
handling of all customer complaints will be of utmost importance.Courtesy RIM has exclusive retail outlets, which can be monitored, but newer expansion plans will mean selling through other retailers for prepaid cards.Credibility This is a major issue as the previous policies were not very transparent and this has generated a negative perception for Reliance.Responsibility Problems of area distribution between different franchisesCommunication Continuous communication is needed for promoting newer policies and promotion schemes. Higher flexibility given to franchisees in offering customized plans.7.3.3 DISTRIBUTION CHANNELReliance‘s FWT PCOs are distributed through a network local business associates(LBA). Every district is divided into a number of zones each of which is headed bya zone PCOs lead. In every zone there is a point of sales, the LBA who acts as theinterface between the company and the local PCOs operator. The LBA gets incontact with existing and potential PCO owners and after they decide to take aPCO connection from Reliance, he helps to arrange for the entire package which
consists of the phone instrument, FWT, billing machine, telephone booth and patchpanel antenna.7.3.5 MARKET COVERAGEReliance is the second largest player in FWT market which is growing at fast rateof 5.5%. The Lead player in the market is Tata Teleservices. But Reliance hasshown major improvement in the market coverage and has grown its share from34.15% in April‘05 to 37.12% in Oct.‘05.7.4 THE FOURTH “P” PROMOTION(How) are the chosen target groups informed or educated about the organizationand its products? This includes all the weapons in the marketing armory -advertising, selling, sales promotions, Public Relations, etc. While the other threePs have lost much of there meaning in todays markets, Promotion has become themost important P to focus on.Since it‘s a highly competitive sector therefore Reliance had to work really hard onits promotional schemes in order to grab the market share.But the most important tool that Reliance should really be considering is the salespromotion as a strategy to reach out to a mass audience and grab attention. And
also to arouse the interest of the target segment in the product this strategy will bevery useful. Just like what Nokia did sometime back for the N-gage and what thetwo wheeler companies have been successfully doing for a long time, RIM shouldcome up with road shows as soon as they come out with their newer models togenerate curiosity in the minds of the people. Online games as suggested should bean important feature of the mobiles and online one to one competitions can beorganized for promotional schemes. This is nothing new for RelianceCommunications as they had done this for the promotion of their Web worldbroadband services also. Partnering with KBC like game shows will also be a bigdraw as Airtel have successfully demonstrated. Another charm for the youth is theconcerts, technology fares etc and organizing these as well as partnering assponsors with such events in colleges and expos can also are used to drawattention.
8. CURRENT MARKET SCENARIO FOR WLL PHONES IN INDIA8.1 CDMA Mobile SegmentCDMA subscriber‘s base grew 5.7% mom to 14.49mn with Tata contributing achunk of additions in subscriber base. Tata witnessed a whopping 20.6% momgrowth in subscriber base, touching the 2.5mn mark. Reliance witnessed a sluggish3.2% growth in the month of October. However, it maintained its marketleadership with a total subscriber base of 11.78mn.CDMA subscriber dataGroupCompan Subscribers as of Additions Subscribers as ofy September05 In Oct October05 (%)GrowthReliance 11,414,478 366,888 11,781,366 3.2Tata 2,055,865 423,265 2,479,130 20.6HFCL 60,292 542 60,834 0.9Shyam 28,182 43 28,225 0.2MTNL 154,301 (11,296) 143,005 (7.3)Total 13,713,118 779,442 14,492,560 5.7Source: AUTSP Table: 6
Market share of CDMA operators CDMA share of net additionsGraph: 1 Graph: 28.2 Fixed Wireless Terminals (FWT)FWT continues to be one of the fastest growing segments with 5.5% mom growth.Tata maintained it leadership position in FWT segment with 61% market shareamongst private players. In net additions, too, Tata led with 55% share. However,Dot‘s latest ruling removing FWT service from the ambit of basic service andinstead terming it a ‗limited mobile service‘ liable to ADC levy may be a seriousblow to the growth of this segment.GroupCompan Subscribers as of Additions Subscribers as ofy September05 In Oct October05 (%)GrowthTata 3,219,643 158,437 3,378,080 4.9
Reliance 1,921,692 128,972 2,050,664 6.7Bharti 23,999 (265) 23,734 (1.1)HFCL 33,043 1,753 34,796 5.3Shyam 26,915 232 27,147 0.9Total 5,225,292 289,129 5,514,421 5.5 Fig: 12We compared the above figures with the figures of March‘05 and realized thatreliance market share has gone up from 34.15% to 37.2% in six months whichshows that there is both potential in the market as well as in the company itself toincrease its market share further.
Fig 13Initiatives:Introduction of Low cost telephony by launching Free Incoming service whichtook the telecom market by stormAchievements:Brought the mobile phone to the common man by introducing Monsoon Hungamaand Happy Diwali offers in 2003Milestones:
Became the second largest Mobile service in the country with more than 1 croresubscribers within 2 years of launch.ChannelInitiatives:Introduced the Dhirubhai Ambani Entrepreneur scheme to involve the middle classto partner Reliance and profit from it.Achievements:Built enduring relationships with people cashing in on the name of Reliance.Milestones:Elevated dealers to the position of business associates giving them moreimportance and responsibilities which formed the backbone of the channel.CostsInitiatives:Low cost telephony ringing the mobile in the ears of the common man.Achievements:Instrumental in bringing down call rates across the entire mobile phone sector.Milestones:
Still riding the crest of the tide with large volumes of subscribers and subsequenthigh returnsServiceInitiative:Spread a network of Reliance Web worlds and Web world Express providing One-Stop shops for all customer needs.Achievements:A dedicated sales and service staff took care of the customers and led to efficientmanagement despite swelling subscriber figuresMilestones:Web world home to a variety of Virtual courses, Gaming Zones and Videoconferencing facilities .First one of its kind in the countrySystemsInitiative:Introduction of C.D.M.A.1X. Technology into the Indian market on a large scalewhich resulted in high quality wireless service at low costs. Add to that a 60000km fiber optic backbone network.Achievements:
Combining of Data and Voice service done on an extensive scale with C.D.M.A.1X technology. Instrumental in bringing Mobile to the remotest corners of thecountry (Regulations not withstanding)Milestones:Reliance possesses 74 Mobile Switching Centres (MSC s) and about 7200 BaseTransceiver Subsystems (BTS sites), providing a 98.6% Quality of Service (QOS)rating for areas under coverage.BrandInitiative:India‘s most reliable brand added another dimension by entering the telecommarket. Its name preceded Reliance but the brand name Communications cameinto prominence.Achievements:Kar Lo Duniya Mutthi Mein, having the world in your palms, caught theimagination of people and launched Reliance India Mobile.Milestones:Ek Soch thi, Ek Sapna Thaa, Dhirubhai‘s dream of a call at the cost of a postcardwas realized and entire India called out Mujhme Hai Wo Baat.9. CUSTOMER SATISFACTION
We were more concerned about the factors that influence the consumer beforechoosing any new connection or switching from the present connection. We ratedthe different attributes on the scale of (1-5). We found the following results. Attribute importance (1-5) 4.50 4.40 4.30 4.20 4.10 4.00 3.90 3.80 3.70 3.60 3.50 3.40 Network Easy voice quality customer Billing Coverage availability care systemThe Network Coverage was the factor that concerned the people to the greatestextent. However the factors like the Billing System and the Voice Quality werealso important. These factors were the desired attributes by any user.
Calculated Ratings on 5 Point Scale 4.50 4.00 3.50 Reliance 3.00 Airtel BPL 2.50 Idea 2.00 Hutch 1.50 BSNL 1.00 Tata indicom 0.50 0.00 Network Easy voice customer Billing Coverag availabili quality care system e ty Reliance 3.75 3.56 2.50 3.88 2.81 Airtel 3.64 3.46 2.46 3.93 3.08 BPL 4.00 3.00 3.00 4.00 3.00 Idea 3.20 3.60 3.80 3.80 4.00 Hutch 3.80 3.80 3.40 3.00 3.75 BSNL 4.16 3.89 3.05 2.89 3.53 Tata indicom 4.00 3.00 4.00 3.00 2.00 Graph: 6This showed that Voice Quality and Billing System were the two areas whereReliance had performed pretty badly against its competitors. We came to know thatthe Billing System by Reliance is said to have many discrepancies. Here Reliancereally needs to work upon.
The Road Ahead P.B.O. The new age P.C.O. From RelianceReliance Communications Ltd is looking at the successful public call office (PCO)model for delivery of e-governance initiatives to the rural areas.In the nextgen PCO, Reliance will use broad band to deliver the services, and willbe aptly named Public Broadband Office (PBO). Prakash Bajpai, president,Reliance Communications, said the G2C (government to consumer) initiative on e-governance will popularize the use of broad band. However, he neither had thetime-frame for Reliance‘s projected PBO nor the investments needed.―The PBO will need applications like e-mail, transactions, filing of returns, salestax or excise duty filing or any other work requiring government interaction.Additionally, we will have to persuade government for spectrum availability anddedicated carriers for data will be needed. Investments will be needed for thecreation of base stations, too,‖ Bajpai said. Meanwhile, pushing its broad bandservice offering, Reliance Communications will add another eight products to itsexisting 12. The new products, to be launched in another two months time, willinclude collaborative services and consumer Internet.The bouquet of collaborative products will include audio video and webconferencing services while consumer offerings would include health, gamesrecreation
In an effort to improve its customer care services, the telecom services provider isset to launch Web World Express (WWE). These franchised outlets will initiallyattend to customer care issues and then expand to include broad band services. Reliance Netway:Broadband TV at your homeAs far as the broadcast sector is concerned however, it is Reliances broadbandplans, Ethernet broadband Netway for the home user in particular, that is the focusof attention.Netway is still nearly a year away from commercial launch, clarifies Khanna,though a "test run" of the service that "has no parallel anywhere in the worldexcept in Italy on a very small scale" is already on at the Reliance centre inJamnagar, Gujarat. 3,000 households ofReliance employees at the Jamnagar oil refinery have been wired up for thispurpose, says Khanna.
In another two months, the testing process will move up a gear when 5,000 homesof Reliance Communications employees (there are 15,000 of them working inDAKC alone) get wired up.Suffice to say that what Reliance is committing to give its home user customers is100 mbps bandwidth routed through a prototype set top box that will triple up as aTV remote, a phone, a keyboard and even a karaoke microphone. With this kind of bandwidth capacity, the question is of course what is the sort ofcontent that will be made available for home users. According to the literatureprovided, aside from the obvious high speed Internet which also offers Voice overIP telephony, there will also be movies on demand, music on demand and digitalTV. A vast library of movies with multiple language subtitles as well as anextensive music listing is being compiled at the moment. Netway is also promisinginteractive TV with over 160 channels Reliance Data CenterReliance Data Centers are truly world class Level 3 IDC facilities with a total areaof 205000 sq. ft. located at the sprawling Reliance Communications Headquartercampus, Navi Mumbai and at Bangalore. Reliances data center project furtherincludes setting up of world-class data centers in 6 major cities in India coveringapproximately 5,00,000 sq.ft. area in the next 2 yearsThe Data Centers has been internationally benchmarked with respect to physicaland network security, infrastructure, facilities, network connectivity and itsoperations, which achieves and surpasses the Level 3 world standards. The Data
Centers are connected to Reliances country wide optic fiber based IP network withterabytes of capacity having points of presence at more than 700 cities. The datacentre is further connected to 52 countries including US, UK, Mid-east and Asia-Pac through Flag Telecom backbone (Reliance Communications‘s groupcompany), other undersea cable systems and are having private peeringrelationship with the largest Tier 1 ISPs and public peering at more than 15Internet Exchange points across the globe. There also exists peering relationshipwith domestic ISPs on STM-1 bandwidth levels.Recommendations Reliance has for long been perceived as the common man‘s phone. It needs to come out of the mid-segment trap by catering to the high end subscribers who bring in larger arpu It is highly important to retain customers as sooner or later the market will saturate and the low call tariffs will prompt subscribers to switch operators
With uniform number across operators being a possibility in the near future, existing subscribers will be inclined to move to an operator offering better service, it is highly recommended that Reliance pulls up its socks and improves its service quality which is lacking in certain areas like network coverage and billing Reliance has the most extensive private network in the country and needs to consolidate its position by improving its standards and living up to its famous brand name BIBLIOGRAPHY BOOKS Marketing Management - Phillip Kotler
Marketing Research - Tull & Hawkins MAGAZINE Business Today Advertising & Management NEWSPAPERS Economic Times Hindustan Times
WEBSITE www.COAI .in www.AUSPI .inThe relevant information from the internal source of the organization Questionnaire
1. Whether following things are available? Monsoon offer 48% Kit 90% V-top 40% E-Recharge 90%The survey revealed that 48% retailers have monsoon Offer, 90% have kit, 40% have V-top and 90% have E-recharge. 2. What is the frequency of DSE visit? Once a Week 20% Twice a Week 50% Thrice a Week 30%
None of above 0 % The survey revealed that 20% retailers have said that DSE visits once a Week, 50% retailers have said that DSE visits twice a Week, 30% retailers have said that DSE visits thrice a Week. 3. What availability of stock you keep for sale in Your shop? Daily 9% weekly 72% In 15 days 18% Monthly 1%The survey revealed that 9% retailers keep daily stock, 72% retailers keepWeekly stock , 18% retailers keep stock of 15 days and 1% retailers keep monthly stock.
4. What nature of problem you face with RCOMM? Service level 31% Claim level 95% Product availability 18% Product awareness 25%The survey revealed that 31%, 95%, 18%, 25% retailers have problem with service level claim level, product availability and product awareness respectively.5. How much time is taken by the distributor to reimburse your claims? 20 days 11% 30 days 25% 45 days 25% 60 days 39%
The survey revealed that 11%, 25%, 25%, 39% of the retailers are reimbursed by distributor at claim level respectively. 6. Who are the major competitors of RCOMM? Airtel 55% Aircel 15% BSNL 15% Tata Indicom 30% Smart 8% The survey revealed that Airtel and Tata indicom are the major competitors of RCOMM.
7. If you have any problem then whom you will prefer to talk? Distributor 10% TSM 23% DSE 67%The Survey revealed that 10%, 23% and 67% retailers prefer to talk to Distributor, TSM and DSE. 8. How do you know about new scheme? Companies SMS Poster DSE Reliance
Airtel AirCel smart Tata Indicom 9. How much time do you take to activate a sim? (i) 10-15 min. 44% (ii) 15-30 min. 38% (iii) 30-60 min. 6% (iv) Above 60 min. 12% The survey revealed that 44% retailers take 10-15 min., 38% take 15-30min., 6% take 30-60 min. and 12% take more than 60 min. in activation of a SIM. 10. From which company distributors you are more satisfied? (i) Airtel 34% (ii) Reliance 28% (iii) BSNL 17%