Telecomsector 100620083023-phpapp02


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Telecomsector 100620083023-phpapp02

  2. 2. Page no.Acknowledgement 04Executive summary 05Introduction about Telecom Industry 06History 07Global Scenario 08National Scenario 09Demographic characteristic 10Market size, Trends & Players 11Telecom turn over/ Subscribers 12Opportunities /Competitive landscape 13Porters generic strategy 14Progress /Acquiring Subscribers 15Rural India 15Government Initiatives / MVAS 16VAS 18Mobile VAS in Rural Market 19Access Device /3G Handset 20Key trends in Telecom Industry 21Inhibitors 22MNP Implementation Globally 24Wimax Vs. 3G 26Mobile virtual network operator 27Regulation for MVN O / IPTV 28Companies overview 294P’s Analysis 43IIPM – AHMEDABAD SALES AND DISTRIBUTION Page 2
  3. 3. Advertisement 44Industry updates 46Major challenges for Mergers 49FDI Investment in Telecom sector 50Outsourcing by Telecom company 51Future Trends 534G Technology 56Conclusion/ References 56IIPM – AHMEDABAD SALES AND DISTRIBUTION Page 3
  4. 4. This project work would never have been an achievable task, had we not been under the greatshelter of guidance of respected Professor Mukta Rae. Her simplified teaching technique basedon examples has helped us gain more understanding of the subject.The very essence of the project work is the linguistic precision which has an impact ofconveying more details in least possible words. An ample use of various reference readings hasbeen very frequently made while compiling data for this project. Such rich reading has beenmade available at hand by the treasure-like well-maintained library of the IIPM, Ahmedabad.I am very much under obligation to mention here, the contributions of my batch mates whohave, knowingly or unknowingly, provided me the competitive edge which is the driving force ofthe whole labor and extra labor put into the project. I would also take an opportunity to thankall the respondents, who have taken pains in answering the questions and filled the place of truerepresentatives for deciding the nature of the problem.Finally, I feel very much gratified to the administration of IIPM, Ahmedabad for providingcomfortable environment. - JONTY MOHTAIIPM – AHMEDABAD SALES AND DISTRIBUTION Page 4
  5. 5. The rapid growth in Indian telecom industry has been contributing to India‟s GDP at large.Telecom Regulatory Authority of India was established to regulate and deal with competitionamong the service providers. Upcoming services like 3G and Portability will help to furtherincrease the growth rate. The Indian telecommunication industry is one of the fastest growing inthe world and India is expected to become the second largest telecom market in the world by2010.India added 113.26 million new customers in 2008, the largest globally. The country‟s cellularbase witnessed close to 50% growth in 2008, with an average 9.5 million customers added everymonth. It is estimated that telecom industry will generate revenues worth US$ 43 billion in 2009-10.IN this we have tried to capture the most of areas of telecom industry. Like, History of TelecomIndustry, TRAI role and functions, new trends in industry and latest updates. To find the reason of tremendous growth in Indian Telecom Industry To study the role of TRAI To study upcoming trends in Telecom industryIIPM – AHMEDABAD SALES AND DISTRIBUTION Page 5
  6. 6. The exactly ten years ago, Jyoti Basu in culcutta called Sukh Ram in Delhi Sukh Ram in Delhiwas the first mobile phone call in India. Brick sized cell phone used to cost Rs.45000 and eachcall coasted Rs.16.50/minute. Back then, cell phones was a status symbol. Today, there are over60 million mobile connections in India (expected to double in number in next 12 months.). Alocal call costs around less then Rs.50paisa/min and a cell phone can be purchased for lessthan Rs.1500.India growth story has already got the world to sit up and take a note of the changing economicscenario. The Indian government is doing everything that is possible to ensure that this storyremains intact. Factors, like the liberalization in the government stance and the daringentrepreneurs of the Indian soils, have helped the sectors achieve the highs like never before.And currently, the flavor of the month seems to be the telecom industry.IIPM – AHMEDABAD SALES AND DISTRIBUTION Page 6
  7. 7. History of Indian Telecommunications started in 1851 when the first operational land lines werelaid by the government near Calcutta (seat of British power). In 1883 telephone services weremerged with the postal system. Indian Radio Telegraph Company (IRT) was formed in 1923.After independence in 1947, all the foreign telecommunication companies were nationalized toform the Posts, Telephone and Telegraph (PTT), a monopoly run by the governments Ministryof Communications. Telecom sector was considered as a strategic service and the governmentconsidered it best to bring under states control.The first wind of reforms in telecommunications sector began to flow in 1980s when the privatesector was allowed in telecommunications equipment manufacturing. In 1985, Department ofTelecommunications (DOT) was established. It was an exclusive provider of domestic and long-distance service that would be its own regulator (separate from the postal system). In 1986, twowholly government-owned companies were created: „Videsh Sanchar Nigam Limited‟ (VSNL)for international telecommunications & „Mahanagar Telephone Nigam Limited‟ (MTNL) forservice in metropolitan areas.In 1990s, telecommunications sector benefited from the general opening up of the economy.National Telecom Policy (NTP) 1994 was the first attempt to give a comprehensive roadmap forthe Indian telecommunications sector. In 1997, Telecom Regulatory Authority of India (TRAI)was created. TRAI was formed to act as a regulator to facilitate the growth of the telecom sector.New National Telecom Policy was adopted in 1999 and cellular services were also launched inthe same year.Indian telecom industry has the highest growth rate in the world. A record 5.9 Million newmobile phone subscribers were drawn by the Telecom sector in India in the month of August2006, according to the COAI (Cellular Operators Association of India). India, which is seeingover 8 million wireless subscribers being added every month (8.62 million in May 2008), is thefastest growing telephone market in the world. The government has reiterated the target of 500million telecom subscribers and 20 million broadband connections by 2010.IIPM – AHMEDABAD SALES AND DISTRIBUTION Page 7
  8. 8. The Indian telecom market has been displaying sustained high growth rates. Riding onexpectations of overall high economic growth and consequent rising income levels, it offers anunprecedented opportunity for foreign investment. A combination of factors is driving growthin the telecom market, promising rich returns on investments.Example: TATA DOCOMO It generated US $1.4 trillion in the year of 2009 when recession is everywhere. India is the fourth largest telecom market in Asia after China, Japan and South Korea. Asia pacific region: expecting highest growth in next 5years. The Indian telecom network is the eighth largest in the world and the second largestamong emerging economies. The Indian telecom market size of over US $ 8 billion is expected to increase three foldby 2012. The expansion of the telecom industry in India has been fuelled by a massive growth inmobile phone users, which has reached a level of 10 million users in December 2002, an increaseof nearly 100 per cent in 2002. This exponential growth of mobile telephony can be attributed to the introduction ofdigital cellular technology and decrease in tariffs due to competitive pressures. For the first timein India, the growth of cellular subscriber base has exceeded the fixed line subscriber base.However, cellular penetration is still 1 per cent as compared to world average of around 16 percent.IIPM – AHMEDABAD SALES AND DISTRIBUTION Page 8
  9. 9. 19% China 12% India 62% USA 7% OthersSource: EIU (Economist Intelligence Unit)Indian Telecom sector, like any other industrial sector in the country, has gone through manyphases of growth and diversification. Starting from telegraphic and telephonic systems in the19th century, the field of telephonic communication has now expanded to make use of advancedtechnologies like GSM, CDMA, and WLL to the great 3G Technology in mobile phones. Dayby day, both the Public Players and the Private Players are putting in their resources and effortsto improve the telecommunication technology so as to give the maximum to their customers. The Indian telecom sector can be broadly classified into Fixed Line Telephony andmobile telephony. The major players of the telecom sector are experiencing a fierce competitionin both the segments. The major players like BSNL, MTNL, VSNL in the fixed line and Airtel, Vodafone(Hutch), Idea, Tata, Reliance in the mobile segment are coming up with new tariffs and discountschemes to gain the competitive advantage.IIPM – AHMEDABAD SALES AND DISTRIBUTION Page 9
  10. 10.  The Public Players and the Private Players share the fixed line and the mobile segments.Currently the Public Players have more than 60% of the market share. Internet/Broadband subscribers are 14.05m internet subscribers & 6.62m broadbandsubscribers (June 2009) Advanced Technologies – GSM, CDMA, WLL, 3G and upcoming 4G Telecom sector Contribution of nearly 1% to India‟s GDP GSM CDMA/WLL Fixed LINE •VODAFONE •BSNL •BSNL •AIRTEL •MTNL •MTNL •BSNL •TATA INDICOM •BHARTI •IDEA •TATA DOCCOMO •TATA TELECOM •SPICE •VIRGIN MOBILE •VODAFONE •AIRCELL •RELIANCE •RELIANCE •RELIANCE •VIDEOCON •TATA DOCCOMO •TATA INDICOM •VIDEOCON Total Tele-density stood at 39.86 per cent. Wire line Tele-density came in at mere 3.22 % whereas wireless subscription contributed91.9 % of overall Tele-density. Subscription in Urban Areas was at 328.55 Million and Rural subscribers increased to136.27 Million. According to the Vision 2020 document of the Planning Commission of India, thecountry will witness continued urbanization. The urban population is expected to rise from 28per cent to 40 per cent of total population by 2020. Future growth is likely to be concentrated in and around 60 to 70 large cities having apopulation of one million or more. This profile of concentrated urban population willIIPM – AHMEDABAD SALES AND DISTRIBUTION Page 10
  11. 11. facilitate customized telecom offerings from operators.Both fixed line and mobile segments serve the basic needs of local calls, long distance calls andthe international calls, with the provision of broadband services in the fixed line segment andGPRS in the mobile arena. Traditional telephones have been replaced by the codeless and thewireless instruments. Every month 8-10 million subscribers are adding in the market. We have mobile 350 million subscribers, next to China Tata Teleservices – invest an additional US $ 1 billion in TATA DoCoMo BSNL – will put US $ 1.16 billion in WiMax Project Vodafone Essar – invest US $ 6 billion next 3 years to increase mobile subscriber base Bharti Airtel – US $ 126.5 million to strengthen Assam & Northeast Circles. Mobile phone providers have also come up with GPRS enabled multimedia messaging,Internet surfing, and mobile commerce. The much-awaited 3G mobile technology has entered in the Indian telecom market. The GSM, CDMA, WLL service providers are all upgrading them to provide 3G mobileservices. Radio services have also been incorporated in the mobile handsets, along with otherapplications like high storage memory, multimedia applications, multimedia games, MP3,Players, video generators, Cameras, etc. The value added services provided by the mobile serviceoperators contribute more than 10% of the total revenue. The 2009 budget has brought further relief to the customers with the reduction in thetariffs, both local and long distance, and with slashing down the roaming rentals. This is likely toIIPM – AHMEDABAD SALES AND DISTRIBUTION Page 11
  12. 12. lead to even more people going for cellular services and more and more use of the value addedservices. However, landline telephony is likely to remain popular, too, in the foreseeable future.MTNL, the largest landline service provider, has recently taken some bold initiatives to retain itsmarket share and, if possible, expand it. : Gross Revenue (GR) stood at Rs 39,108.33 Crore and Adjusted Gross Revenue (AGR)of Telecom Sector came in at Rs. 29,732.52 Crores. GR has registered a decline of 3.3% compared to previous quarter whereas AGRincreased slightly. Average license fee as percentage of AGR was 8.43% in June-09 as against 8.4% inprevious quarter. The less outgo in terms of licensing fees is a big positive for Telecom industry and assuch for telecom subscribers in general as this will allow further scope of reduction in telecomtariffs. 464.82 325.79 225.01 153.42 104.22 76.53 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09Source: TRAIIIPM – AHMEDABAD SALES AND DISTRIBUTION Page 12
  13. 13. India offers an unprecedented opportunity for telecom service operators, infrastructure vendors,manufacturers and associated services companies. A host of factors are contributing to enlargedopportunities for growth and investment in telecom: an expanding Indian economy with increased focus on the services sector population mix moving favourably towards a younger age profile urbanization with increasing incomes Investors can look to capture the gains of the Indian telecom boom and diversify theiroperations outside developed economies that are marked by saturated telecom markets andlower GDP growth rates. Demand is driven by technological innovation and by growth in business activity. Theprofitability of individual companies depends on efficient operations and good marketing. Large companies have big economies of scale in providing a highly automated service tolarge numbers of customers, and have the financial resources required building and maintaininga large network. Smaller companies can compete effectively only in small markets or by providingspecialty services.IIPM – AHMEDABAD SALES AND DISTRIBUTION Page 13
  14. 14. Porter has identified three types of generic strategies that help a firm to cope with competitiveforces and outperform other firms in the industry. These strategies are:-1. Overall Cost leadership strategy2. Differentiation strategy, and3. Focus strategy The Overall Cost leadership strategy is aimed at gaining a competitive advantage throughlower costs. The low cost leader in any market gains competitive advantage from being able to manyto produce at the lowest cost. Factories are built and maintained; labor is recruited and trained todeliver the lowest possible costs of production. cost advantage is the focus. Financial considerations and budgetary constraints play a critical role here in shapingcompetitive price of the products. Besides the production effiency, brand and marketing skills plays a important role in thiskind of competition.For example:--Some organizations, such as Toyota, are very good not only at producing highquality autos at a low price, but have the brand and marketing skills to use a premium pricingpolicy. A firm with a differentiation strategy attempts to achieve a competitive advantage bycreating a product or service that is perceived as unique. Differentiated goods and services satisfy the needs of customers through a sustainablecompetitive advantage. This allows companies to desensitize prices and focus on value thatgenerates a comparatively higher price and a better margin. The benefits of differentiation require producers to segment markets in order to targetgoods and services at specific segments, generating a higher than average price.For example, British Airways differentiates its service by providing focus onIIPM – AHMEDABAD SALES AND DISTRIBUTION Page 14
  15. 15. exceptional good quality of service rather than focusing on low price.  The differentiating organization will incur additional costs in creating their competitiveadvantage. These costs must be offset by the increase in revenue generated by sales. There is also the chance that any differentiation could be copied by competitors.Therefore there is always an incentive to innovated and continuously improve. The focus strategy is also known as a niche strategy. Where an organization can affordneither a wide scope cost neither leadership nor a wide scope differentiation strategy, a nichestrategy could be more suitable. Here an organization focuses effort and resources on a narrow, defined segment of amarket. Competitive advantage is generated specifically for the niche. A niche strategy is often used by smaller firms. A company could use either a cost focusor a differentiation focus.-- With a cost focus a firm aims at being the lowest cost producer in that niche or segment. With a differentiation focus a firm creates competitive advantage through differentiationwithin the niche or segment. There are potentially problems with the niche approach. Small, specialist niches coulddisappear in the long term. Cost focus is unachievable with an industry depending uponeconomies of scale e.g. telecommunications.The target for the 11th Plan period (2007-12) is 600 million phone connections with aninvestment of US$ 73 billion. Apart from the basic telephone service, there is an enormouspotential for various value-added services. In fact, the real potential for telecom service growth isstill lying untapped. According to the CII Ernst & Young report titled India 2012: Telecomgrowth continues, revenue from Indias telecom services industry is projected to reach US$ 54billion in 2012, as against US$ 31 billion in 2008IIPM – AHMEDABAD SALES AND DISTRIBUTION Page 15
  16. 16. Source: COAIThe progression chart below depicts the major regulations and events driving the extra ordinarygrowth of Telecom sector from year 1999 to 2008. In order to capitalize this opportunity ofmeeting the consumer needs in highly competitive market the operators have reduced the tariffsto attract consumers with low purchasing power primarily in semi urban and rural India. In factlucrative offers like being paid for incoming calls have transformed the scenario completely.Through these changing regulations and events, the Industry players are aiming to achieve thefollowing Acquiring new subscribers by expanding in Semi Urban and Rural India Selling more services to existing subscribersThe recent TRAI recommendation permitting PC-to-phone calls where ISPs can offer cheaperSTD calls and even free local calls. This would result in further reduction of voice tariffs. Thiswould lead to increased focus on MVAS by mobile operators.Acquiring customers have always been a great challenge for companies. Given the current levelof saturation in Metros and Urban Market and cut throat competition among operators,increasing subscriber base in urban market would be all the more challenging. Therefore a lot ofoperators with adequate support from Government are eyeing the rural market for futuregrowth. Big operators like Airtel have claimed that soon mobile connections and rechargeIIPM – AHMEDABAD SALES AND DISTRIBUTION Page 16
  17. 17. vouchers etc will be available at all such places from where people buy match boxes. Thiscertainly explains the future penetration of these services in remotest of villages.This is relatively easier as compared to acquiring new customers. Also since now the newsubscriptions will largely happen at the bottom of the pyramid therefore the new subscriptions willfurther lower the average revenue per user. In such a scenario mobile VAS sector is a potential long-term revenue stream as it will be easier to sell more to the existing customers.Government also has supported the growth of this sector by coming out with a number ofinitiatives for the low end subscribers of rural India, and Universal Service Obligation (USO)fund was one such initiatives. The USO fund was an initiative taken up by the government toincrease rural teledensity. In recent developments, BSNL and two private operators will erect427 towers in remote areas offering over four lakh mobile connections. All the towers areexpected to be erected and commissioned by December 2008. Under the second phase, DoTaims at erecting 11,000 towers throughout the country to offer over 11 million mobileconnections ADC was levied by Telecom Regulatory Authority of India (TRAI) in 2003 toprovide support for BSNLs rural telephone obligation. Telecom Regulatory Authority of India(TRAI) has recently given orders for the withdrawal of the ADC (Access Deficit Charge) andthe subsequent passing of the benefit to the consumers by the telecom operators. Decrease in ARPU despite increase in MOU: Though the subscriber base is growingat a rapid pace and has positively impacted industry revenues, operator margins also have shrunkowing to competition and lower “Average Revenue per User” (ARPU) as the major growth iscoming from bottom of the pyramid. As ARPU declines and voice gets commoditized, thechallenge is to develop alternative revenue streams and retain customers by creating a basis fordifferentiation in high-churn markets. Need for differentiation: There is a greater need amongthe telecom operators to differentiate themselves from each other. Number of Licensees: With increasing number of licensees (98 UASL, and 37 cellularlicenses) in the telecom space the average numbers of operators in many circles have increasedto 5-6 operators offering more choices to the consumer. Thus the competition among theIIPM – AHMEDABAD SALES AND DISTRIBUTION Page 17
  18. 18. operators has increased tremendously. Therefore it is very important for them to differentiatethemselves from the others. Now that voice has got commoditized these operators are usingMVAS for their differentiation and marketing these services heavily for creating awarenessamong the consumers. Decreasing Call Rates: In order to attract consumers with relatively low purchasingpowers primarily from Semi Urban and Rural India the operators have drastically reduced thecall rates making it affordable to even the lower segment of society. The tariff in India is one ofthe lowest at Rs.1 per minute as compared to the tariff in developed nations like USA and UKwhere the call rates are Rs.13 and Rs7-8 respectively. 3G bidders who are non-operators: The arrival of new technologies will give rise togreater competition as many non-operators are also bidding for the 3G licenses. Department ofTelecom has planned to allow five 3G operators in each circle depending on the availability ofspectrum. Therefore there would be a greater need to differentiate oneself in order to attractnew customers and retain the existing ones. Saturation in Metro and Urban Market: The metro/urban areas offer high level ofpenetration and have significant mobile subscribers. In such a highly saturated market with theentry of MVNO‟s the competition will get fierce. Therefore capitalizing on value added serviceswill give operators opportunity to increase ARPU by providing premium services. Increasing need and demand from consumers: In addition to the above supply sidereasons the „pull effect‟ from consumers asking for more than just basic telephony is also a keydriver for MVAS services. Today most of the consumers are seeking more from theircommunication device apart from just mobility and desire to stay connected. As we have seen,Telecommunication has moved beyond providing just basic voice calls. The mobile phone hasevolved from a mere communication device to an access mode with an ability to tap a plethoraof information and services available in the ecosystem. This is the reason why it is now beingreferred to as the „fourth screen‟, after Cinema halls, Television and PC.But the fundamental question that remains is how VAS is defined. A clear MVAS definition isnot only required to clear the air among the MVAS providers but it will also have an impact onIIPM – AHMEDABAD SALES AND DISTRIBUTION Page 18
  19. 19. the dynamics of the Value chain. A detailed definition of VAS might have an impact on thelicensing issues surrounding VAS. Let‟s look at different VAS definitions floating in the market. Value Added Service (VAS) in telecommunication industry refers to non-core services,the core or basic services being standard voice calls and fax transmission including bearerservices. The value added services are characterized as under:- Not a form of core or basic service but adds value in total service offering. Stands alone in terms of profitability and also stimulates incremental demand for core orbasic services Can sometimes be provided as standalone. Do not cannibalize core or basic service. Can be add-on to core or basic service and as such can be sold at premium price. May provide operational synergy with core or basic services.A value added service may demonstrate one or more of these characteristics and not necessarilyall of them. In some cases, the value added service becomes so closely integrated with the basicoffering that neither the user nor the provider acknowledge or realize the difference. A classicexample is of P2P SMS. Some of the operators do not consider P2P SMS as part of their VASrevenue.The Government of India issues licenses for the following Value Added Services:- Public mobile trunking service Voice mail service Closed users group domestic 64 kbps data network via INSAT satellites system Videotex service GMPCS Internet Audiotex Unified messaging serviceThe next wave of Telecom growth will come from the bottom of the pyramid. For majority ofthe population in the rural segment, the mobile phone is the first communication device. RuralIIPM – AHMEDABAD SALES AND DISTRIBUTION Page 19
  20. 20. should not always be interpreted as poor and therefore some categories of MVAS might applydirectly to them. But whether the statement can be extended to MVAS depends on some keyfactors. One is to clearly identify the need of the rural segment, second is to communicate theservices to them i.e. generate awareness and thirdly, to provide an easy and cheap access modeto the rural consumers. All these 3 are quite big challenges and therefore needs to be addressedadequately for MVAS to take off in Rural India. Apart from the identification of rural consumerneeds and development of relevant content, communication of these services to the ruralpopulation would be a bigger challenge. One way to do this is to communicate through regionalSMS for which a separate SMS gateway needs to be installed. Literacy level of the geographicalarea will be another limitation. Therefore the better communication option is Voice in regionallanguages. The challenge with regional voice is not only investment but also blockage of thealready scarce spectrum. Marketing the content in rural market is going to be all the morechallenging. This would require right packaging and pricing of MVAS. Providing cheap accessmode to end consumer would be another key booster to rural MVAS. Current voice MVAScharges are expensive from a rural consumer perspective therefore that also would need to beaddressed for e.g. the „sachet model‟ could prove to be successful here. MVAS is going toaddress two main needs of rural consumers- connectivity and entertainment mode. Connectivitywill provide Information VAS on Agriculture necessary for the farmer‟s livelihood e.g. mandirates, weather, etc. Health, finance, job opportunities etc are potential areas. Mobile also has thepotential to evolve as a key entertainment mode considering lack of other entertainment optionsin rural areas. The industry has witnessed some type of content being downloaded more in smalltowns of UP and Bihar rather than in metros like Delhi and Mumbai. Therefore by leveragingon these two aspects MVAS can be a success in rural area.GPRS HandsetsIIPM – AHMEDABAD SALES AND DISTRIBUTION Page 20
  21. 21. Currently the penetration of GPRS enabled handsets are close to 26% in India as against 99% inSouth Korea and 76% in Japan. Of the total mobile subscribers in India 65 million possessGPRS-enabled handsets. Of all those who possess GPRS enabled handsets only 20-25% ofthem have got the GPRS activated and only about 15% use it. Even in case of developed nationslike South Korea and Japan not more than 50% of the subscribers owning GPRS enabledhandsets use it. Population of india 1130mn Mobile subscriber base 426Mn GPRS Enable 65 Mn. GPRS Activated 15-16 Mn. GPRS USERS 9MnSource: TRAI REPORT,E TechnologyThis clearly indicates that the consumer today engage more in text based services than the webbased applications. Therefore for MVAS to grow to its full potential the handset manufacturerswill have to look at ways to manufacture GPRS enabled phones which are affordable and userfriendly. Moreover they would also need to increase its awareness and educate the consumers onhow to use GPRS.The market for 3G in the country is expected to be huge with over 65 million wirelesssubscribers, who use their handsets to access data services on the Web. These subscribers arecurrently using mobile handsets which are internet-enabled and are potential broadbandIIPM – AHMEDABAD SALES AND DISTRIBUTION Page 21
  22. 22. subscribers with the deployment of advanced wireless technologies such as 3G. According toIndian Cellular Association (ICA) about 5% of mobile users already have handsets that can workon 3G spectrum. In addition, out of all those possessing the 3G enabled handsets the number ofpeople who would use 3G services would be determined by the quality of content available.Unlike most other countries, we are looking at 3G services not only as premium services butalso as an extension of 2G. Since our broadband penetration is abysmal, 3G would provide amuch required boost to it. Given that mobile phones are much cheaper as compared to PCs, thedemand for broadband on mobile is expected to be much greater. More importantly, 3G willsolve problems more in rural India. Therefore the shift towards 3G would depend onaffordability of handsets along with the quality of content available.One of the most frequent definitions that prevail in the telecom circles for number portability is:"Number portability is a circuit-switch telecommunications network feature that enables end usersto retain their telephone numbers when changing service providers, service types, and or locations."Why mobile number portability (MNP)? When fully implemented nationwide by both wire line andwireless providers, portability will remove one of the most significant deterrents to changingservice, providing unprecedented convenience for consumers and encouraging unrestrainedcompetition in the telecommunications industry. In short, this is the best method to increase theefficiency of the service provider by increasing the competition, thereby ensuring better services inall respects. From the subscribers’ perspective, this is a deceptively simple and very welcomechange, because they can change wireless service providers without worrying about notifyingfriends, family and business contacts that their wireless number is changing. In addition, being ableto ‘port’ a number from one provider to another eliminates the hassle and expenses of changingbusiness cards, stationery, invoices and other materials for businesses. From the wireless carrier’sperspective the change is anything, but simple. Virtually all of wireless carriers’ systems are affected.Especially any system that relies on mobile identity numbers (MINs) or mobile directory numbers(MDNs) will be affected. Examples of critical systems and processes that would be affected are:billing, customer service, order activation, call delivery, roamer registration and support, shortmessages service center, directory assistance, caller ID, calling name presentation, switches,maintenance and CSC systems, home location registers (HLRs), and visiting location registers (VLRs).IIPM – AHMEDABAD SALES AND DISTRIBUTION Page 22
  23. 23. : One of the most common barriers in MNP implementation, within any country, hasbeen the implementation cost. Service Providers have been constantly bargaining for time, based onthe cost factor, from their respective governments. Referring to the recent example of the US,where each of the large carriers would need to spend $50–60 million to institute the service and anequivalent sum to maintain it. The FCC on this plea gave wireless carriers in the US another year, i.e.,till November 2003, for resolving implementation issues. The experience of developed countriesexhibits that local number portability for fixed wireline was introduced within two to three years ofintroduction of competition to incumbent state telcos. The cost estimate for the implementation ofWNP in developed nations like the US can be very helpful for the other countries, who wish to thinkon the lines of number portability. To add on increased marketing costs are to be realized as thecarriers look to lock up their current base before number portability is implemented, and thenaggressively pursue the customers of other carriers thereafter. : Every subscriber in a race to retain itscustomer would like to offer its customers best services so as to save them from porting. It‟s likea blessing in disguise for the customers, as they would get better service irrespective of thecarrier, albeit with the same number. Infrastructure Upgrade: To support WNP, a companyhas to upgrade both its hardware and software capabilities, which will amount to some cost.Softwares need to be upgraded to provide proper routing of calls. The carriers need to upgradetheir networks to handle portability requests. The provider, which has its portability compatiblewould be expected to attract maximum customers and will emerge the winner. Cost Recoveryand Bill Reconciliation/Query Processing: When a customer plans to shift, the old serviceprovider (OSP) has to perform a query to identify if there are any billing amounts pending,which they need to recover before the subscriber moves to the new service provider (NSP).Globally, Singapore was the first country to implement MNP in 1997, followed by Hong Kongin 1999 and Australia in 2001. Off late, many countries have adopted the MNP model to preventIIPM – AHMEDABAD SALES AND DISTRIBUTION Page 23
  24. 24. market doldrums and putting pressure on service providers to furnish more services at acompetitive price level. However, it has not been able to produce any significant results in thesemarkets. While it has worked in markets like Hong Kong and Australia, it failed to bear fruit inthe UK, France, Germany, Pakistan, Ireland, Malta, among others. MNP worked in Hong Kongdue to the speedy porting process and the availability of already implemented solution (for fixed-line services). In Australia, the regulator effectively promoted number portability and was able tomaintain the maximum porting time of just under three hours. Furthermore, in Finland, whereinitially the implementation was viewed as a success due to dearth of minimal contract periodsand high migration incentives, operators failed to sustain the momentum.The failure in most markets where MNP was implemented is attributed to factors like half-hearted implementation, issues related to contract, lack of consumer awareness, overboard ofpaperwork, technical difficulties and poor customer service.The WiMAX vs. 3G cellular showdown is poised to become one of the next great market battlesin the telecom industry. Fortunes will be made and lost in this battle, and the user experience ofthe Internet will be irreversibly changed in the process. 3G scores for voice; Wimax may lead toincreased broadband penetration. With the Department of Telecommunications gearing up forsimultaneous release of 3G and WiMax spectrum, analysts expect the two emerging wirelesstechnologies to battle it out for supremacy.WiMax or Worldwide Interoperability for Microwave Access is a telecom technology thatenables wireless transmission of data. The technology is available as IEEE 802.16D (fixed) andIEEE 802.16E (mobile). It offers downloads of up to 70 Mbps as compared to the 15 Mbps that3G provides. Mobile WiMax offers download speeds of around 20 Mbps. In India, companieslike Tata Communications Internet Services, Intel, Bharat Sanchar Nigam Ltd, Bharti Airtel andReliance Communications are the proponents of WiMax. Most of the companies have had beta-runs of the technology. According to a top official with a service provider, telecom serviceproviders are in various stages of WiMax implementation. Some companies have commerciallylaunched fixed WiMax services in certain cities.While opponents of WiMax say currently it cannot be used for mobile applications, the firstmobile WiMax network was introduced in Italy this July. Another reason for the industrypinning its hopes on WiMax is its ability to increase the broadband penetration. WiMax makeshuge sense for companies as it enables them to provide cheaper mobile internet and broadbandIIPM – AHMEDABAD SALES AND DISTRIBUTION Page 24
  25. 25. services, in turn, increasing the internet penetration. However, this will adversely impact serviceslike GPRS and e-mail on mobile as users might move over to WiMax-enabled devices for data,even though they might stick with 3G or 2G spectrum for voice. The Telecom RegulatoryAuthority of India has set a target of 20 million broadband connections by 2010 from thecurrent 4.3 million. The industry expects WiMax to bridge the gap. According to a consultant ofErnst & Young service providers would mainly use the technology for gaining traction with thecustomers, as providing the last mile over the conventional digital subscriber lines would betime-consuming and costly.Operators will have to use 3G spectrum to revive voice services that are being choked by adearth of 2G spectrum, Patel added. The WiMax customer premise equipment (CPE) is priced atRs 5,000-10,000, while the CPEs for 3G would be cost Rs 10,000 and above. The industry willknow the winner in the next six months, when the spectrum allocation is complete.Mobile Virtual Network Operator (MVNO) is a GSM phenomenon where an operator orcompany which does not own a licensed spectrum and generally with out own networkinginfrastructure. Instead MVNOs resell wireless services under their brand name, using regulartelecom operators network with which they have a business arrangements. Usually they they buyminutes of use from the licensed telecom operator and then resell minutes of usage to theircustomers of MVNO. Currently MVNOs are emerging in fast pace in European markets andbeginning in USA also. Slowly MVNO phenomenon catching up in Asia and other parts of theworld also.An example for MVNO is Virgin Mobile. Virgin Mobile plc is a mobile phone service provideroperating in the UK, Australia and Canada, and the US. The company was the worlds firstIIPM – AHMEDABAD SALES AND DISTRIBUTION Page 25
  26. 26. Mobile Virtual Network Operator, launched in the UK in 1999. It does not maintain its ownnetwork, and instead has contracts to use the existing network(s) of other providers. In the UK,Virgin Mobile uses the T-Mobile network. In the US, the Sprint network is the carrier. InAustralia, Virgin Mobile operates on the Optus network. In Canada, it uses the Bell Mobilitynetwork. These networks use different technology (GSM in the UK and Australia and CDMA inthe US and Canada). Usually MVNOs do not have their own infrastructure, some providers areactually deploying their own Mobile Switching Centers (MSC) and even Service Control Points(SCP) in some cases. Some MVNOs deploy their own mobile Intelligent Network (IN)infrastructure in order to facilitate the means to offer value-added services. In this way, MNVOscan treat incumbent infrastructure such as radio equipment as a commodity, while the MVNOoffers its own advanced and differentiated services based on exploitation of their own INinfrastructure. The goal of offering value-added services is to differentiate versus the incumbentmobile operator, allowing for customer acquisition and preventing the MVNO from needing tocompete on the basis of price alone. MVNOs have full control over the SIM card, branding,marketing, billing, and customer care operations. While sometimes offering operational supportsystems (OSS) and business support systems (BSS) to support the MVNO, the incumbentmobile operators most keep their own OSS/BSS processes and procedures separate and distinctfrom those of the MVNO. In the future a cell phone user may be able to subscribe to a networkoperator plus multiple MVNOs for specific data services over the same phone. One MVNOcould provide sports news, another weather and traffic and still another could provide instantmessaging capabilities. In this way, each MVNO and the network operator could focus on theirown niche markets and form customized detailed services that would expand their customerreach and brand.So far MVNOs have not been regulated in any country. The ITU has received several requeststo study the issue, specifically to provide input on whether government intervention is necessaryto allow MVNOs to offer services and applications at a lower price to consumers. This wouldIIPM – AHMEDABAD SALES AND DISTRIBUTION Page 26
  27. 27. help to ensure a more efficient use of the spectrum but some incumbent providers argue that themarket is already competitive and intervention is not necessary.IPTV (Internet Protocol Television) delivers television programming to households via abroadband connection using Internet protocols. It requires a subscription and IPTV set-top box,and offers key advantages over existing TV cable and satellite technologies. IPTV is typicallybundled with other services like Video on Demand (VOD), voice over IP (VOIP) or digitalphone, and Web access, collectively referred to as Triple Play.Because IPTV arrives over telephone lines, telephone companies are in a prime position to offerIPTV services initially, but it is expected that other carriers will offer the technology in thefuture. IPTV promises more efficient streaming than present technologies, and thereforetheoretically reduced prices to operators and subscribers alike. However, it also adds manyadvantages that may play into market pricing. One of the advantages of IPTV is the ability fordigital video recorders (DVRs) to record multiple broadcasts at once. According to Alcatel, oneleading provider, it will also be easier to find favorite programs by using "custom view guides."IPTV even allows for picture-in-picture viewing without the need for multiple tuners. You canwatch one show, while using picture-in-picture to channel surf! IPTV viewers will have fullcontrol over functionality such as rewind, fast-forward, pause, and so on. Using a cell phone orPDA, a subscriber might even utilize remote programming for IPTV. For example, if a dinnerfunction runs longer than expected, you dont have to miss your favorite program. Just callhome and remotely set the IPTV box to record it.However, the real advantage of IPTV is that it uses Internet protocols to provide two-waycommunication for interactive television. One application might be in game shows in which thestudio audience is asked to participate by helping a contestant choose between answers. IPTVopens the door to real-time participation from people watching at home. Another applicationwould be the ability to turn on multiple angles of an event, such as a touchdown, and watch itfrom dual angles simultaneously using picture-in-picture viewing.One can also receive Web service notifications while watching IPTV for things such as incomingemail and instant messages. If you IPTV is packaged with digital phone, Caller ID might pop upon screen as your telephone rings.IPTV is already growing in the international market, with providers in many countries includingJapan, Hong Kong, Italy, France, Spain, Ireland, and the United Kingdom. In the United StatesSBC, reportedly purchased a software delivery system for IPTV services from Microsoft in 2004IIPM – AHMEDABAD SALES AND DISTRIBUTION Page 27
  28. 28. for $400 million dollars. Alcatel is working with Microsoft to develop a "global solution" forIPTV services, and Verizon has also made a deal with Microsoft for IPTV software.Bharti Airtel is one of Asia‟s leading providers of telecommunication services with presence inall the 22 licensed jurisdictions (also known as Telecom Circles) in India, and in Srilanka.They served an aggregate of 105,195,762 customers as of June 30, 2009; of whom 102,367,881subscribe to their GSM services and 2,827,881 use Telemedia Services either for voice and/orbroadband access delivered through DSL. They also offer an integrated suite of telecom solutions to their enterprise customers, inaddition to providing long distance connectivity both nationally and internationally. They havelaunched DTH and IPTV Services also. All these services are rendered under a unified brand“Airtel”. The company also deploys, owns and manages passive infrastructure pertaining totelecom operations under its subsidiary Bharti Infratel Limited. Bharti Infratel owns 42% ofIndus Towers Limited. Bharti Infratel and Indus Towers are the two top providers of passive infrastructureservices in India. Telecom giant Bharti Airtel is the flagship company of Bharti Enterprises. Airtel comes to you from Bharti Airtel Limited, India‟s largest integrated and the firstprivate telecom services provider with a footprint in all the 23 telecom circles. Bharti Airtel is structured into three strategic business units - Mobile services, Telemediaservices and Enterprise services. The mobile business provides mobile & fixed wireless services using GSM technology. Airtel was voted as the „Best Cellular Service‟ in the country for four consecutive years.IIPM – AHMEDABAD SALES AND DISTRIBUTION Page 28
  29. 29. The Stock Exchange, Mumbai (BSE) The National Stock Exchange of IndiaType Limited (NSE)Founded 1985Headquarters New Delhi, IndiaKey people Sunil MittalIndustry TelecomProducts Mobile and Fixed-Line Telecommunication operator, Airtel DTHRevenue $6 BillionSlogan Express YourselfWebsite Shahrukh Khan, Karina Kapoor,Sachin Tendulkar,A.R.Rahman,Brand Ambassador Saifali Khan, Madhvan,Vidhya Balan,Anandi (Avika guar) Balika vadhu.Shares in Issue: 1,898,373,280 as at June 30, 2009 Company Vision: By 2010 Airtel will be the most admired brand in India.  Loved by more customers.  Targeted by top talent.  Benchmarked by more businesses. Leading Competitors- VODAFONE, IDEA, BSNL, RELIANCE, TATA, AIRCEL IIPM – AHMEDABAD SALES AND DISTRIBUTION Page 29
  30. 30. Vodafone is a British multinational mobile network operator headquartered in Newbury, UnitedKingdom. Vodafone is the worlds largest mobile telecommunication network company, basedon revenue, and has a market value of about £71.2 billion (November 2009).Vodafone is the worlds largest mobile telecommunications community, employing over 65,000staff and with over 130 million customers. The business operates in 26 countries worldwide.Vodafone is a public limited company with listings on the London and New York stockexchanges.Global recognition of the Vodafone brand is growing as the company rolls out its identity intonew markets. However, it retains local names and imagery in markets where this is essential tomaintaining the trust of customers.To help promote its image worldwide, Vodafone uses leading sports stars from high profileglobal sports, including David Beckham and Michael Schumacher. This Case Study concentrateson how such promotion can help to keep a leading brand at the forefront of public awarenessFor that reason our team decided to work on few steps which were basically to get the feed backfrom the market as fallow.Basically our objectives were to find out the behaviors of the consumers or the customerstowards the product available in the market that either consumer or the customer is after the Quality of the product. After the price of the product. After the good presentation of the product which includes the servicing. If the consumer is after or comes for particular product and why, either becauseof effective advertisement on the media like television or news papers or other means ofadvertisement.IIPM – AHMEDABAD SALES AND DISTRIBUTION Page 30
  31. 31. LOGO:Founded 1983 as Racal Telecom, independent 1991Headquarters Newbury, England, UK Arun Sarin, CEO Sir John Bond, ChairmanKey people John Buchanan, Deputy Chairman Andy Halford, CFOIndustry Mobile telecommunicationsProducts Mobile networks, Telecom services, Etc.Revenue ▲ £31.104 billion GBP (2007)Net income ▼ £-1.564 billion GBP (2007)Slogan Happy to helpWebsite www.vodafone.comMain Attractions of advertisement Dog, Zoo zoos IIPM – AHMEDABAD SALES AND DISTRIBUTION Page 31
  32. 32. Idea Cellular is a wireless telephony company operating in all the 22 telecom circles in India. It initially started in 1995 as a joint venture among the Tatas, Aditya Birla Group and AT&T by merging "Wings Cellular" operating in Madhya Pradesh, Uttar Pradesh (UP) West, Rajasthan and Tata Cellular as well as Birla AT&T Communications. Initially having a very limited footprint in the GSM arena, the acquisition of Escotel in 2004 gave Idea a truly pan-India presence covering Maharashtra, Goa, Gujarat, Andhra Pradesh, Madhya Pradesh, Chhattisgarh, Uttar Pradesh (East and West), Haryana, Kerala, Rajasthan, Delhi (inclusive of NCR) and West Bengal. The company has its retail outlets under the "Idea n U" banner. The company has also been the first to offer flexible tariff plans for prepaid customers. It also offers GPRS services in urban areas. Idea Cellular won the GSM Association Award for "Best Billing and Customer Care Solution" for 2 consecutive years.Type Spice: Public, Listed on BSE IIPM – AHMEDABAD SALES AND DISTRIBUTION Page 32
  33. 33. Idea: Subsidiary Spice: 1997Founded Idea: 1995 Spice: Mohali, IndiaHeadquarters Idea: Indore, Delhi, Pune, India Spice: Dilip ModiKey people Idea: Chairman: Kumar Mangalam Birla ; MD: Sanjeev AgaIndustry TelecomProducts Mobile operator revenue479-/394751 Spice: Spice Hai toh life hai (If theres Spice then theres Life.)Slogan Idea: An !dea can change your life. Spice: Spice Telecom ;Website Idea: www.ideacellular.comBrand Ambassador Abhishek Bachan RELIANCE OVERVIEW IIPM – AHMEDABAD SALES AND DISTRIBUTION Page 33
  34. 34. Reliance Communications, formerly known as Reliance Info comm, along with RelianceTelecom and Flag Telecom, is part of Reliance Communications Ventures. It is an Indiantelecommunications company. According to National Stock Exchange data, Anil DhirubhaiAmbani controls 66.77 per cent of the company, which accounts for more than 1.36 billionshares.[3] It is the flagship company of the Reliance-Anil Dhirubhai Ambani Group, comprisingof power (Reliance Energy), financial services (Reliance Capital) and telecom initiatives of theReliance ADAG. It uses CDMA2000 1x technology for its existing CDMA mobile services, andGSM-900/GSM-1800 technology for its existing/newly launched GSM services.RelCom is also into Wire line Business throughout India and has the largest optical fibercommunication (OFC) backbone architecture [roughly 110,000 km] in the country.Reliance Communications has launched its Direct To Home (DTH) TV also, known as "BigTV". RelCom have presence across all B2C communications channel in one of the fastestgrowing markets in the world.BID FOR HUTCH: In 2007, Reliance Communications had bid for 67% of Hutch but lost toVodafone, which had been led by its CEO at the time Mr.PIYUSH.P.ACQUISITIONSIn July 2007, the company announced it is buying US-based managed Ethernet and applicationdelivery services company Yipes Enterprise Services for a cash amount of Rs. 1200 crore rupees(equivalent of USD 300 million). The deal was announc overseas acquisition, the Reliance grouphas amalgamated the United States-based Flag Telecom for $ 211 million [roughly Rs 950 crore(Rs 9.50 billion)].Type Public (BSE: RCOM)IIPM – AHMEDABAD SALES AND DISTRIBUTION Page 34
  35. 35. Founded 2004Headquarters Navi Mumbai, Maharashtra, IndiaKey people Anil Ambani (Chairman) & (MD) Vice-Chairman Reliance-ADA GroupIndustry TelecommunicationsProducts Wireless Telephone Internet TelevisionRevenue US$ 4.26 billion (2008)Net income US$ 1.35 billion (2008)Total assets US$ 19.31 billion (2008)Employees 33,000Brand ambassador Hritik RoshanTATA: AN OVERVIEWIIPM – AHMEDABAD SALES AND DISTRIBUTION Page 35
  36. 36. Tata Comm. is Indias leading international telecom service provider. It is today part ofthe Tata Group. It started as a successor to the erstwhile Overseas Communication Services, andwent on to become the premier provider of international voice and data services.Tata Teleservices Limited (TTSL) is a part of the Tata Group of companies, an Indianconglomerate. It operates under the brand name Tata Indicom in various telecom circles ofIndia. In Nov 2008, Japanese telecom giant NTT Docomo picked up a 26 per cent equity stakein Tata Teleservices for about Rs 13,070 crore ($2.7 billion) or an enterprise value of Rs 50,269crore ($10.38 billion).[1] In Feb 2008, TTSL announced that it would provide CDMA mobileservices targeted towards the youth, in association with the Virgin Group on a Franchisee modelbasis.Tata Teleservices Provides mobile services under 3 Brand names: Tata Indicom Tata DoCoMo Virgin Mobile Tata Teleservices Limited (TTSL)IIPM – AHMEDABAD SALES AND DISTRIBUTION Page 36
  37. 37. Type Private Founded 2000 Headquarters Navi Mumbai, India Mr. Ratan N. Tata (Chairman) Key people Anil Kumar Sardana (MD) Industry Telecommunications Wireless Telephone Products Internet Television Employees 350,000 Parent Tata GroupIIPM – AHMEDABAD SALES AND DISTRIBUTION Page 37
  38. 38. BSNL OVERVIEWBharat Sanchar Nigam Limited (known as BSNL) is a public sector telecommunicationcompany in India. It is Indias largest telecommunication company with, 24% market share as onMarch 31, 2008. Its headquarters are at Bharat Sanchar Bhawan, Harish Chandra Mathur Lane,Janpath, New Delhi. It has the status of Mini Ratna, a status assigned to reputed public sectorcompanies in India.BSNL is Indias oldest and largest Communication Service Provider (CSP). Currently has acustomer base of 90 million as of June 2008. It has footprints throughout India except for themetropolitan cities of Mumbai and New Delhi which are managed by MTNL. As mon March31, 2008 BSNL commanded a customer base of 31.55 million Wire line, 4.58 million CDMA-WLL and 54.21 million GSM Mobile subscribers. BSNLs earnings for the Financial Year endingMarch 31, 2007 stood at INR 397.15b (US$ 9.67 b) with net profit of INR 78.06b (US$ 1.90billion). BSNL has an estimated market value of $ 100 Billion. The company is planning an IPOwithin 6 months to offload 10% to public in the Rs 300-400 range valuing the company at over$100 billion.IIPM – AHMEDABAD SALES AND DISTRIBUTION Page 38
  39. 39. Founded 19th century, incorporated 2000 Headquarters Bharat Sanchar Bhawan, Harish Chandra Mathur Lane, Janpath, New Delhi Kuldeep Goyal Key people (CMD) Industry Telecommunications Wireless Telephone Products Internet Television Revenue US$ 9.67 billion (2007) Owner(s) The Government of IndiaIIPM – AHMEDABAD SALES AND DISTRIBUTION Page 39
  40. 40. Type Joint VentureIndustry TelecommunicationsFounded 2009Headquarters Gurgaon, India Stein-Erik Vellan (CEO)Key people Sanjay Chandra (Chairman) WirelessProducts Telephone InternetEmployees 2,000 Telenor (67.25%)Parent Unitech Group (32.75%)Website Uninor.inIIPM – AHMEDABAD SALES AND DISTRIBUTION Page 40
  41. 41. Type Public (BSE: 511389) Industry Conglomerate Founded 1979 Founder(s) Nandlal Madhavlal Dhoot Headquarters Aurangabad, Maharashtra, India Venugopal Dhoot (Chairman) Key people K. R. Kim (CEO) Consumer Electronics Home Appliances Components Office Automation Mobile phones Products Wireless Internet Petroleum Satellite television Power Revenue ▲ US$4 billion (2010) Net income ▲ US$276 million (2010) Employees 5,000 (2010) Website Videocon.comIIPM – AHMEDABAD SALES AND DISTRIBUTION Page 41
  42. 42. FOUR P‟S ARE:-1) PRODUCT2) PRICE3) PLACE4) PROMOTION Product- Sim cards, Plug to surf devices, Handsets for CDMA Price- Offers, Schemes Promotion: Print media, Electronic media, Outdoor media, Sales promotion Place: Every retail shop, Offices, Home, Institutions The study shows it clearly that Vodafone have a huge market share due to its betterservice and good network. But the thing that differentiate it from the competitors that it providethe more and more number of the value added services. Latest advertisement of Vodafone: Zoo zoos” is very attracting and it increases the sales of the Vodafone , the marketing manager of Vodafone reveals that statement. Study clearly shows that Vodafone is a has a brand image in the mind of public due totheir willingness to provide the best service.IIPM – AHMEDABAD SALES AND DISTRIBUTION Page 42
  43. 43. Vodafone focused more and more on the value added service and marketing. RecentlyVodafone gave its whole concentration by a series of advertisements of ZOOZOO series. Thismove of Vodafone proved very successful to attract the more and more number of thecustomers. Airtel basically uses two appeal to connect to the users Emotional Humorous attracting In 2002, Airtel signed on music composer A.R.Rehman and changed its tune to "liveevery moment": rah man’s signature tune for Airtel is the most downloaded ringbone inIndia. But that was just part of the ongoing communication. The following year Airtel adopted the "express yourself" positioning, which is also itscurrent tagline. Youth icons like Shahrukh khan and Sachin Tendulakar were brought in as brandambassadors to attract youngsters Add campaign with an eye on the rural marketIIPM – AHMEDABAD SALES AND DISTRIBUTION Page 43
  44. 44. The whole advertisement and promotion is designed by taking urban youth in focus but thereare large no of youths in rural sector as well and they can be their future consumers. Taking bigstars as brand ambassador is good decision. But organizations can further use recent bronzemedallist Boxer Vijendra kumar as there endorsement. Vijendra is having good lookingpersonality and he belongs to rural area so in this way rural people will start associatingthemselves with that brand “SABKA AIRTEL”. Airtel can also use BALIKA VADHU fame“ANANDI” (Avika gaur) targeting rural women and rural youthYouth to Drive Growth:--Airtel should more concentrate towards the youth. As the increasingmarket share of rivalry brand Virgin, clearly shows that youth can play a major role in thiscompetition. Attracting the Youth:-- To attract more youth community Airtel can go for moreand more plans for youth under the same brand “SABKA AIRTEL”. In this plan Airtel can giveSMS pack (it‟s for SMS generation), cheaper call rates schemes only for school and college goingstudents. In this plan Airtel should go for the heavy youth promo with fast dance track and cuteguys and gals. Mobile service providers should provide the facility of portability of number. Mobile service providers should provide the web access at cheaper cost. Telecom market is quite competitive so mobile service providers should provide theservices at cheaper cost. Mobile service providers should focus on providing better network coverage EspeciallyBSNL. Mobile service providers should provide various schemes for their existing customers. BSNL have to make more attractive ads. Add some other promotional offers. Makes some sense full ads for Tata Doccomo For making interactive add to connect with customers. Consolidation in Industry.IIPM – AHMEDABAD SALES AND DISTRIBUTION Page 44
  45. 45. Telecom players are looking to tap into global funds to finance their aggressive growth plans.This will result in partnerships joint ventures and equity sellout to foreign players. New licenseholders will continue to look to sell their stake at a premium. New policies will seek to curb thislicense arbitrage. Smaller players with operations in only a few circles will find in difficult tocompete with the nationwide players. The industry may see consolidation with these smalleroperators being acquired by the larger ones. “Unbundling of the corporation” will continue ascompanies will seek f or economies of scale and lower startup cost by infrastructure sharing. 3Gand WiMax license will spur M&A and partnership activity. Idea Cellular’s Acquisition of Spice TelecomThere were three transactions as part of this acquisition; acquisition of shares of Spice, a non-compete fee and a capital infusion of about Rs 7300 crores received from TM International Bhd(TMI). With respect to shares, Idea acquired 40.8% stake of Spice Communications at Rs 77.30a share for Rs 2,716 crore. There was a share swap in which Spice shareholders got 49 Ideashares for every 100 Spice shares held. An additional Rs 544 crore was paid to the promoters ofSpice group as non-compete fee. The deal was strategically important for Idea Cellular as it waslooking forward to transfer itself into a pan-India telecom service provider. The spectrumauctioned by GoI is a scarce resource nowadays and cost a premium. Also there‟s restriction byTRAI with respect to number of operators per telecom circle. So it makes sense to acquire asmall telecom operator. Small players like Spice Telecom operating at only a fewcircles(Karnataka and Punjab) will find difficult to compete with the nationwide players in thelong run. So it was a win-win deal for both companies. VODAFONE’S ENTRY INTO INDIAVodafone paid a discounted price of $10.9 billion in cash for acquiring the 52% stake held byHutchison Telecom International (HTIL) in Indian mobile firm Hutch-Essar. HTIL declared aspecial dividend of 6.75 HK dollars per share following the completion of the formalities. Thefinal price was a reduction of $180 million from the originally agreed price of $11.08 billion.Vodafone is the largest mobile telecommunications network company in the world. The dealgave them access to one of the fastest growing mobile markets in the world. Telenor-Unitech DealIIPM – AHMEDABAD SALES AND DISTRIBUTION Page 45
  46. 46. Norwegian Telecom major Telenor is in the process of acquiring controlling stake of 67.25% inUnitech wireless via equity infusion. The enterprise valuation of Unitech Wirelsss is about Rs10,900 crore. As per the deal, Telenor will infuse cash in four stages and at each phase, byincreasing its stake in Unitech Wireless. In the first phase, they got 33.5% ownership in UnitechWireless. In the second phase they completed the acquisition for a 49 per cent stake in UnitechWireless by paying Rs 1,130 crore for a further 15.5 per cent stake in the company. Theacquisition is expected to be completed by end of this quarter. TTSL – DoCoMo Deal.Japanese carrier NTT DoCoMo acquired 26 per cent stake in Tata Teleservices (TTSL). TheTata DoCoMo-branded GSM service has already started in Southern India and gradually will beexpanded nationwide. DoCoMo‟s international expansion plans have not always provensuccessful, with the firm historically preferring to take small stakes in firms and then try toinfluence their strategy. It has been less prepared to take majority stakes and impose its will, asother leading carriers have chosen to do.The difficulties faced by the firm in spreading its domestically successful i-mode serviceinternationally typify the obstacles it has faced overseas. With Tata, DoCoMo had said“participating proactively in TTSL‟s management by providing human resources and technicalassistance to help realise improved network quality and the possible introduction of leading-edge, value-added services.” Bharti-MTN deal (in talks).Recently Bharti Airtel has re-started its audacious merger bid with MTN that could create a $61-billion transnational telecom goliath with combined revenues of $20 billion and over 200 millionsubscribers across Africa, Asia and Middle East, will be among the worlds 10 biggest telecomcompanies. The deal could be win-win for both parties. Bharti is under pressure in its homecountry due to severe competition and looking forward to spread its risk across geographies.Meanwhile, the African telecom operator is also encountering some of the problems that itscounterpart in India is confronting. MTN may have higher ARPUs (in the range of $12-20), butthey are also falling fast. Strategic benefits to both playersSynergies would be sought from a number of areas, including procurement, operational bestpractice, R&D and international network sharing. The two companies will not overlap in eachother‟s business operations: Bharti Airtel will be the primary vehicle for Bharti and MTN topursue further expansion in Africa and the Middle East.IIPM – AHMEDABAD SALES AND DISTRIBUTION Page 46
  47. 47. With both Bharti and MTN operating in high-growth geographies, it would be imperative forthem to incrementally expand into untapped areas. Collaborating with each other would seemthe logical way ahead. The most important, and visible fallout of the deal, if it materializes, willbe the advantage of economies of scale for the new entity.In recent times, companies are more amenable to mergers and acquisitions. Of late, companiesare finding it tough to obtain easy funds for expansion, which calls for more collaboration ifcorporate intend to expand. Bharti would not be involved only in MTN‟s day-to-day activities,but it would also have a say while making bigger strategic decisions, such as those pertaining toinvestments in other geographies or sourcing of equipment. The high subscriber base andfinancial muscle will give Bharti-MTN the desired edge while dealing with vendors. Once themerger happens, the economies of scale of the complete outfit (Bharti-MTN) would be takeninto account. For instance, even if the company places an order worth just $1 million, thevendor would not hesitate to lap it up, as there could be orders worth a billion dollars in otherprojects. This would offset whatever concerns there may be with respect to the small populationsize in countries where MTN operates. Takeaways for BhartiThe biggest takeaway for Bharti is in the form of access to new geographies with high growthpotential. Without a partner, Bharti would have to embark on a Greenfield project, which wouldbe time-consuming and capital intensive.Besides, without local knowledge (with respect to the market and government regulations),Bharti could be on a sticky wicket. The Indian telco does not have the expertise in runningmulti-country operations.MTN has operations in 21 countries across Africa and the Middle East and is one of the largestemerging market mobile operators globally. While Africa has one-third of the world‟spopulation, its telephonic density is just 30 per cent. This offers plenty of room for expansion.The fact that 95 percent of Africa is prepaid, which ensures all cash operations, fits perfectly intoBharti‟s plans.The options for Bharti were to go either the Greenfield way or with an experienced partner.MTN‟s strong foothold in some growing markets such as South Africa, Botswana, Iran andNigeria ensures that when the growth in India starts to slow down, Bharti would be ready to takeoff in other geographies. Besides, there is a lot of potential in Africa as three-fourths of thecontinent is still untapped.IIPM – AHMEDABAD SALES AND DISTRIBUTION Page 47
  48. 48. Africa is quite like rural India and from that perspective; Bharti could learn how to roll outinfrastructure in rural India.In addition, MTN is strong in the value-added services (VAS) and mobile commerce space. So,as and when mobile commerce picks up in India (after RBI‟s approval), Bharti would be able totap this market through MTN‟s expertise.MTN has a vast experience in running multi-country operations and overcoming regulatoryhurdles. By working with MTN, life for Bharti will get a lot of easier. One of the major challenges would be the integration of the company on the ground. It istough for intercontinental companies to merge seamlessly because of cultural divide. Alcatel-Lucent for instance is still trying to adjust to cultural divide. Although Nokia-Siemenshas bridged this divide faster, it was because both the companies were European. The Black Empowerment Act could pose a challenge, as it is meant to safeguard the rights ofthe black population. As per this Act, blacks are ensured a minimum shareholding managementseats and voting rights. The country’s strong trade union, Congress of South African Trade Unions (COSATU), whichhas influence over President Jacob Zuma, had almost wrecked the Vodafone-Vodacom deal. The Indian telecom industry has always allured foreign investors. In fact, the cumulativeFDI inflow, from August 1991 to March 2007, in the telecommunication sector amounted toUS$ 7,513.22 million. This makes telecommunication the third-largest sector to attract FDI inIndia in the post liberalization era. The investment was majorly in handset manufacturing andtelecom service provider.IIPM – AHMEDABAD SALES AND DISTRIBUTION Page 48
  49. 49. With stable macroeconomic impetus and numerous other advantages, India has the potential tobecome the electronics manufacturing hub of the world. Excited by the record-breaking industrygrowth, investors have outlaid US$ 1.5 billion in the past two and a half years in the Indiantelecom sector. India will receive an additional US$ 2 billion investment in the next one year.With the world now recognizing India‟s manufacturing potential, the Indian telecom handsetmanufacturing market is likely touch US$ 7 billion by 2010. An example is Nokia. The companyhas already produced 25 million handsets in its Chennai facility. It will pump in an additionalUS$ 150 million to this set up. The company exports around 20 per cent of its volume to South-east Asia, the Middle East and Africa. Local manufacturing allows companies to avoid 4 per centcountervailing duties on imported handsets, thereby further reducing the cost.Managed service is another segment that is attracting telecom companies. On account of therapidly growing subscriber base, service providers find it difficult to manage their infrastructureand network. In such cases, they completely or partially outsource their infrastructure ornetwork management operations.Hutchitson Essar (now Vodafone) and Nokia Deal:A case in point is Nokia which is managing the network for Hutchison Essar Limited in 19circles in India. Having successfully capitalized on the business potential of managed service,IIPM – AHMEDABAD SALES AND DISTRIBUTION Page 49
  50. 50. Nokia is already earning 30 per cent of its total revenue from this segment. The company hasalso shifted its first Global Network Solutions Centre (GNSC) to India. The company manages39 cellular networks in 30 countries. Its Indian center will act as a global hub for other Nokiaoperation centers.Advantages of Managed Service• Smooth management of technological complexity• Opportunity to strengthen core competency• Reduction in financial outlay• Touching base with new processes and technologiesAnother dimension of managed service is telecom, communication and network managementsolutions for enterprises. Bharti Televentures and IBM, together offer telecom and IT solutionsin India. The solutions and services portfolio comprises of the remote monitoring of servers,security operations and network operations, providing data center services (including serverhosting, server management and storage management), IT help desk services and end-to-endconnectivity and fulfilling all telecom and communication requirements. This informationtechnology outsourcing deal with infotech major IBM is estimated to be in the range of $700-750 million for a ten-year period.The deal involved outsourcing of BTVLs hardware, software and IT service requirements toIBM. The agreement specifies that payments made to IBM India will be linked to the percentageof revenue generation by BTVL and pre-defined service level agreements. The percentage-linkedrevenue payment is modeled to decrease with BTVLs increase in revenue. The deal includes allcustomer-facing IT applications like billing, customer relationship management and datawarehousing. In addition, Internet, e-mail and online collaborations are included in it. On theinfrastructure front, IBM will consolidate BTVLs data center, IT helpdesk and enhance itsdisaster recovery center capabilities, he said.Bharti’s Outsourcing to Alcatel-Lucent:Telecom major Bharti Airtel has a $500-million deal to Alcatel-Lucent for outsourcing themanagement and servicing of its broadband and fixed line network for five years. The dealinvolves the creation of a joint venture with Alcatel-Lucent holding 76 per cent of the equity,and Bharti having the remainder 24 percent. The joint venture will help accelerate performanceas Bharti migrates to the next generation networks for the broadband and telephone customers.IIPM – AHMEDABAD SALES AND DISTRIBUTION Page 50
  51. 51. Bharti Outsourcing Deal with Nokia & EricssonBharti Airtel awarded a $400m contract to Nokia for expanding its managed GSM networks ineight circles. This also marks Bharti‟s third major deal with Nokia in the last two years. Bhartiwould have 100% ownership of the networks supplied by Nokia, with the actual payment beinglinked to utilization of capacity and fulfillment of agreed quality of service parameters. Thiscomes close on the heels of Bharti‟s recent signing of a $1bn three-year service contract withEricsson towards design, planning, supply, installation, commissioning and upgrading of itsnetwork in 15 telecom circles. This emphasizes Bharti‟s policy towards outsourcing alloperational activities, including customer services to global majors. This has enabled Bharti tofocus on its core areas: product innovation, value added services, marketing, branding andpricing. It has enabled Bharti to concentrate on customers, finances and regulation. As per thethree-year contract, Nokia will provide managed services and expand Airtel‟sGSM/GPRS/EDGE networks in eight circles of Mumbai, Maharashtra & Goa, Gujarat, Bihar,Orissa, Kolkata, West Bengal and Madhya Pradesh. The network monitoring operations will becarried out from Nokia‟s state-of-the-art Global Network Services Center in Chennai. The dealalso envisages Nokia to deploy its WAP solution across Bharti‟s national network to enhance itsmobile packet core network capabilities. This will make usage of data services easy, therebyincreasing the consumption of content on the Bharti network.Future Technology TrendsIn this section we have listed down the future technologies which are in roadmap and arespeculated to make an impact on current business model of telcos.IP Multimedia Subsystem (IMS)IP Multimedia Subsystem (IMS) is a generic architecture for offering multimedia and voice overIP services, defined by 3rd Generation Partnership Project (3GPP). IMS is access independantas it supports multiple access types including GSM, WCDMA, CDMA2000, WLAN, Wirelinebroadband and other packet data applications. IMS will make Internet technologies, such as webbrowsing, e-mail, instant messaging and video conferencing available to everyone from anylocation. It is also intended to allow operators to introduce new services, such as web browsing,WAP and MMS, at the top level of their packet-switched networks. IP Multimedia Subsystem isstandardized reference architecture. IMS consists of session control, connection control and anapplications services framework along with subscriber and services data. It enables newIIPM – AHMEDABAD SALES AND DISTRIBUTION Page 51
  52. 52. converged voice and data services, while allowing for the interoperability of these convergedservices between internet and cellular subscribers. IMS uses open standard IP protocols, definedby the IETF. So users will be able to execute all their services when roaming as well as fromtheir home networks. So, a multimedia session between two IMS users, between an IMS userand a user on the Internet, and between two users on the Internet is established using exactly thesame protocol. Moreover, the interfaces for service developers are also based on IP protocols.Some of the possible applications where IMS can be used are: Presence services Full Duplex Video Telephony Instant messaging Unified messaging Multimedia advertising Multiparty gaming Video streaming Web/Audio/Video Conferencing Push-to services, such as push-to-talk, push-to-view, push-to-videoEffectively, IMS provides a unified architecture that supports a wide range of IP-based servicesover both packet- and circuit-switched networks, employing a range of different wireless andfixed accesstechnologies. A user could, for example, pay for and download a video clip to a chosen mobileor fixed device and subsequently use some of this material to create a multimedia message fordelivery to friends on many different networks. A single IMS presence-and-availability enginecould track a users presence and availability across mobile, fixed, and broadband networks, or auser could maintain a single integrated contact list for all types of communications. A key pointof IMS is that it is intended as an open-systems architecture: Services are created and deliveredby a wide range of highly distributed systems (real-time and non-real-time, possibly owned bydifferent parties) cooperating with each other. It is a different approach to the more traditionaltelco architecture of a set of specific network elements implemented as a single telco-controlledinfrastructure.High Speed Downlink Packet Access (HSDPA)High Speed Downlink Packet Access (HSDPA) is a packet based technology for W-CDMAdownlink with data transmission rates of 4 to 5 times that of current generation 3G networksIIPM – AHMEDABAD SALES AND DISTRIBUTION Page 52
  53. 53. (UMTS) and 15 times faster than GPRS. The latest release boosts downlink speeds from thecurrent end-user rate of 384 kbps (up to 2 Mbps according to standards) to a maximum valueaccording to standards of 14.4 Mbps. Real life end-user speeds will be in the range of 2 to 3Mbps.HSDPA provides a smooth evolutionary path for Universal Mobile Telecommunications System(UMTS) networks to higher data rates and higher capacities, in the same way as Enhanced Datarates for GSM Evolution (EDGE) does in the Global System for Mobile communication (GSM)world. The introduction of shared channels for different users will guarantee that channelresources are used efficiently in the packet domain, and will be less expensive for users thandedicated channels.4G or Fourth Generation Networks4G or Fourth Generation is future technology for mobile and wireless comunications. It will bethe successor for the 3Rd Generation (3G) network technology. Currently 3G networks areunder deployement. Approximatly 4G deployments are expected to be seen around 2010 to2015. The basic voice was the driver for second-generation mobile and has been a considerablesuccess. Currently , video and TV services are driving forward third generation (3G)deployment. And in the future, low cost, high speed data will drive forward the fourthgeneration (4G) as short-range communication emerges. Service and application ubiquity, with ahigh degree of personalization and synchronization between various user appliances, will beanother driver. At the same time, it is probable that the radio access network will evolve from acentralized architecture to a distributed one.The evolution from 3G to 4G will be driven by services that offer better quality (e.g. multimedia,video and sound) thanks to greater bandwidth, more sophistication in the association of a largequantity of information, and improved personalization. Convergence with other network(enterprise, fixed) services will come about through the high session data rate. It will require analways-on connection and a revenue model based on a fixed monthly fee. The impact onnetwork capacity is expected to be significant. Machine-to-machine transmission will involvetwo basic equipment types: sensors (which measure parameters) and tags (which are generallyread/write equipment). It is expected that users will require high data rates, similar to those onfixed networks, for data and streaming applications. Mobile terminal usage (laptops, Personaldigital assistants, handhelds) is expected to grow rapidly as they become more user friendly.Fluid high quality video and network reactivity are important user requirements. Keyinfrastructure design requirements include: fast response, high session rate, high capacity, lowuser charges, rapid return on investment for operators, investment that is in line with the growthIIPM – AHMEDABAD SALES AND DISTRIBUTION Page 53
  54. 54. in demand, and simple autonomous terminals. The infrastructure will be much more distributedthan in current deployments, facilitating the introduction of a new source of local traffic:machine-to-machine.The Indian Telecom Service provider industry is gearing for a revolution. The customer isdriving this revolution and will see more unique and sophisticated offerings coming his way. The3G which will pave the way for 3.5G, 3.75G and the next big thing-4G and the VAS serviceswill keep the customer asking for more. The rural areas which have remained untapped will seean insurgence of services. Also the easing of the regulations by TRAI ,the ease of spectrumlicensing, the FDI influx will make the telecom space in India a must watch in the coming years.REFERENCES[1} IBEF report 2007-08/08-09 : Telecommunication - MARKET & OPPORTUNITIES.[2] Cellular Statistics – Cellular Operator Association of India[3] IAMAI & eTechnology Group@IMRB: MOBILE VALUE ADDED SERVICES IN INDIA- A Report.[4] Telenor Entering India: Investment Update[5] Voice and Data(May 2009): Mobile Number Portability - Poaching with Portability.[6] Business India : Telecom Takeover, Bharti-MTN deal[7] Idea Spice deal[8] Business Standard: Vodafone Hutch deal*9+ IntoMobile: India’s 3G License Plans Updated.[10] World Bank Report: Spectrum auctions in India: lessons from experienceWEBSITES USED: – AHMEDABAD SALES AND DISTRIBUTION Page 54
  55. 55.  USED: 4PS Business Economics Times of India Industrial Handbook 2009IIPM – AHMEDABAD SALES AND DISTRIBUTION Page 55