1. INSTITUTE FOR INTEGRATED LEARNING IN MANAGEMENT
GRADUATE SCHOOL OF MANAGEMENT
GROWTH OF INDIAN TELECOMMUNICATION INDUSTRY
SUBMITTED BY SUBMITTED TO
ANIRUDDHA BASU Prof. SANCHITA GHOSH
KARAN KUNAL Prof. KRITI SWARUP
ARPANJALI CHAKRABORTY Dr. PRANAVA PRAKASH
KRITEEKA SHARMA
SAURAV ROY
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2. Table of contents
CONTENTS Page No.
Introduction 3
Literature Review 4
Research Methodology 16
Hypothesis 22
Data Analysis 23
Results and Findings 26
Recommendations 28
Conclusion 29
Annexure 30
Bibliography 57
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3. INTRODUCTION
OVERVIEW OF TELECOM SECTOR
The telecom services have been recognized the world-over as an important tool for
socio-economic development for a nation. It is one of the prime support services
needed for rapid growth and modernization of various sectors of the economy.
Indian telecommunication sector has undergone a major process of transformation
through significant policy reforms, particularly beginning with the announcement
of NTP 1994 and was subsequently re-emphasized and carried forward under NTP
1999.
STATUS OF TELECOM SECTOR
The Indian Telecommunications network with 851 million connections (as June
2011) is the second largest in the world.
Indian telecommunication industry is the world’s second-largest in terms of
number of subscribers, and the world's fastest growing market in terms of number
of new subscribers. India had 851.70 million mobile phone subscribers at the end
of June 2011.The country has the fourth highest number of Internet users with over
100 million as of December 2010. The primary regulator of communications in
India is the Telecom Regulatory Authority of India. It closely regulates all of the
industries mentioned below with the exception of newspapers and the Internet
service provider industry.
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4. Literature Review
The Indian telecommunication network is the third largest in the world and
the second largest among the emerging economies of Asia. The Indian
telecommunication sector has continued to record noteworthy success throughout
the year and has emerged as one of the key sectors that have been accountable for
resurgent growth of the Indian economy. The rapid growth of the sector has been
coupled with proactive polices and decisions taken by the Indian Government and
dynamic involvement of the private sector. The liberal policies in the
telecommunication sector have facilitated easy access to telecom companies and a
fair regulatory framework offers services to the Indian consumers at affordable
prices.
MARKET SIZE
Over 20.2 million new subscribers were added in the month of February, thereby
raising the total mobile phone subscription in the country to 791.38 million.
Moreover, the statistics for February state that the rate of growth (2.82 per cent) in
the number of rural mobile phone subscribers surpassed than those of the urban
areas (2.52 per cent) across the country. The broadband subscription in February,
2011 was 11.47 million as compared to 11.21 million in January, 2011.
The Indian telecom sector is largely dominated by private operators that control a
share of 87.9 per cent share of the entire sector. Among the top players in the
telecom sector, Bharti Airtel owns the largest share at 20.09 per cent, followed by
Reliance (16.7 per cent), Vodafone (16.54 per cent), state-owned BSNL (11.41 per
cent), Tata (11.08 per cent) and Idea (10.97 per cent). Vodafone has recorded the
fastest growth rate in the month of February, at 17.61 per cent in its subscription
base. Reliance (16.36 per cent), Bharti (15.85 per cent), Idea (12.43 per cent),
Aircel (8.26 per cent) and Tata (7.93 per cent) have also recorded decent growth
rate figures for the month of February, 2011, according to Telecom Regulatory
Authority of India (TRAI) database.
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5. TOP 10 TELECOM COMPANIES IN INDIA
• Bharti Airtel
• BSNL
• Vodafone Essar
• Reliance
• Idea Cellular
• Tata Communications (formerly VSNL)
• Tata Teleservices
• Aircel
• MTNL
• Videocon Mobile Services
AIRTEL
Bharti Airtel Limited formerly known as Bharti Tele-Ventures LTD (BTVL) is an
Indian company offering telecommunication services in 19 countries across Asia
and Africa. It is the largest cellular service provider in India, with more than 162.2
million subscriptions as of March 2011. It has been ranked among six best
performing technology in the world by business week. Bharti Airtel is the world's
third largest, single-country mobile operator and fifth largest telecom operator in
the world with a subscriber base of over 200 million.
It is known for being the first mobile phone company in the world to outsource
everything except marketing and sales and finance. Its network (base stations,
microwave links, etc.) is maintained by Ericsson and Nokia Siemens
Network, business support by IBM . Stakeholders are as follows-:
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6. Bharti Enterprises (64.76%)
Singapore Telecommunications (32%)
Vodafone (4.4%)
RELIANCE
Reliance Communications is India’s integrated telecommunications service
provider. The Company has a customer base of 105 million including over 2.5
million individual overseas retail customers. It ranks among the Top 5 Telecom
companies in the world by number of customers in a single country. Reliance
Communications corporate clientele includes 2,100 Indian and multinational
corporations, and over 800 global, regional and domestic carriers. The entire
communications covers over 24,000 towns and 600,000 villages. The stake holders
are as follows-:
Reliance (74%)
Public (26%)
BHARAT SANCHAR NAGAM LIMITED (A GOVT. OF INDIA
ENTERPRISE)
BSNL is the third largest cellular service provider, with over 66.88 million
customers as of June 2010 and the largest land line telephone provider in India.
BSNL further plans to increase its customer base to 160 Million by March, 2014.
Its headquarters are at Bharat Sanchar Bhawan, Harish Chandra Mathur
Lane, Janpath, New Delhi. It has the status of Miniratna, a status assigned to
reputed Central Public Sector Enterprise in India.
VODAFONE
Vodafone Essar, formerly known as Hutchison Essar is a cellular
operator in India that covers 23 telecom circles in India. Vodafone Essar is owned
by Vodafone 67% and Essar Group 33%. It is the second largest mobile
phone operator in terms of revenue behind Bharti Airtel, and third largest in terms
of customers.
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7. Despite the official name being Vodafone Essar, its products are simply
branded Vodafone. It offers both prepaid and postpaid GSM cellular
phone coverage throughout India with good presence in the metros.
Vodafone Essar provides 2.75G services based on 900 MHz and 1800 MHz digital
GSM technology, offering voice and data services in 23 of the country's 23 license
areas. It is among the top three GSM mobile operators of India.
TATA DOCOMO
It is a Tata Teleservices Limited's (TTSL) cellular service provider on the GSM
platform-arising out of the Tata Group's strategic joint venture with Japanese
telecom giant NTT Docomo in November 2008. Tata Teleservices has received a
pan-India license to operate GSM telecom services, under the brand "TATA
DOCOMO" and has also been allotted spectrum in 18 telecom Circles. TTSL has
already rolled out its services in various circles. It has become very popular with its
one second pulse especially in semi-urban and rural areas.
IDEA
Idea Cellular is a wireless telephony company operating in all the 22 telecom
circles in India based in Mumbai. In 2000, Tata Cellular was a company
providing mobile services in AP. When Birla-AT&T brought Maharashtra and
Gujarat to the table, the merger of these two entities was a reality. Thus Birla-Tata-
AT&T, popularly known as Batata, was born and was later branded as idea. Then
Idea set sights on RPG’s operations in Madhya Pradesh which was successfully
acquired, helping Batata have a million subscribers, and the license to be the fourth
operator in Delhi was clinched.
AIRCEL
Aircel is a joint venture between Maxis Communications of Malaysia and Apollo
Hospital Enterprise Ltd of India. Maxis have a 74% stake in Aircel and the
remaining 26% is with Apollo Hospitals. It is India’s fifth largest GSM mobile
service provider with a subscriber base of over 27.7 million, as of October 31,
2009. It has a market share of 12.8% among the GSM operators in the country
UNINOR
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8. It has received spectrum to roll out these services in 21 of the 22 telecom circles.
Uninor will be owned 67.25% by Norwegian telecom giant Telenor, and 32.75%
by UNITECH. Uninor has started mobile services in India at the end of 2009,
focusing on the GSM technology.
Uninor is India's eighth nation-wide mobile operator, in a competitive landscape of
13 nation-wide or regional mobile operators
STRATEGIES ROLLED OUT BY AIRTEL
The major strategies of Bharti Airtel in the past 5 years are as under:
1. Outsourcing all major operations except Marketing, Sales and Finance:
It is known for being the first mobile phone company in the world to outsource
everything except marketing and sales and finance. Its network (base stations,
microwave links, etc.) is maintained by Ericsson and Nokia Siemens Network,
business support by IBM.
Oracle provides Bharti Airtel with real-time financial and human resources
information as well as information for the organization to churn out higher
operational efficiency, along with better visibility and enhanced management over
its financial and HR operations.
2. Bharti Airtel has a joint Venture with Alcatel-Lucent to manage the network
infrastructure for the Telemedia Business.
3. Bharti Airtel and Google announced a strategic partnership, as part of the
agreement, Airtel will bring Google search to the Airtel Live mobile WAP portal.
Google will also incorporate advertising through its Mobile Ads product on the
Airtel Live mobile portal.
This was a good move however, since the advent of faster internet connectivity this
facility has taken a beating as mobile users can now access the whole page on the
web rather than a slimmed down version of the same webpage.
4. M-Commerce
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9. Mobile phone now turns into a virtual wallet – a new innovation in mobile
commerce. Airtel, ICICI Bank & VISA had joined hands to launch mChq – a
revolutionary new service – a credit card on the mobile phone.
This is the first mobile-to-mobile payment option, which enables Airtel customers
and ICICI Bank Visa cardholders to pay for their purchases with their Airtel
mobile phones.
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5. Targeting 55 million farmers under its fold, Indian Farmers Fertilizer
Cooperative (IFFCO) have agreed upon a joint venture with telecom major Bharti
Airtel to provide a boost to Indian agriculture and rural economy at large.
6. Hiring the best or attracting the best (poaching or otherwise)
Airtel has a history of hiring some of the high level officials from other companies
to be an integral part of their business. This is not just the strategy used by Airtel
but also other telecom majors.
Some of the recently hired officials are Shireesh Joshi (previously in PepsiCo) as
Director Marketing head. Bharti Airtel has also recently roped in Joachim Horn,
chief technology officer (CTO), T-Mobile, to help expand its global footprint and
interface with strategic partners.
7. Expansion into Africa
Airtel made rapid strides to expand its presence in Africa first through showing
intent of acquiring MTN, which was called by The Economist as ‘marrying up’ but
as the deal went awry they moved forward by acquiring Zain Telecoms business in
15 countries in Africa.
This is an important move as Africa has a higher consumer spending, $ 1.4 trillion,
average revenue per user of $8 which is much higher than India and only 3 to 5
players in each market making it one key market where Airtel can expand. With
the infrastructure of Zain in place the market share of Airtel is already high in the
continent.
8. Digital TV, the DTH service from Airtel
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10. The implementation of the initially failed concept of Set Top Box led Airtel to
enter this lucrative market to television. Cable connection in India was run by local
cable operators who acted largely in form of cartels. With the crackdown from the
regulatory bodies in India this sector once again became a gold mine.
9. Joint venture deal with Wal-Mart, the US retail giant, to start a number of retail
stores across India. This is crucial for Airtel as this would mark its entry into the
new theatre of retailing. The most important facet of retailing is logistics which is a
major challenge in India for Airtel.
STRATEGIES OF VODAFONE INDIA
1. Core Competencies:
Vodafone’s primary aim is to be a world leader in mobile communication and at
the same time provide a unique experience to the customers who use their services.
By analysing the overall structure of the company, it can be understood that
reliable innovative services and the customer centric passion are the core products
of the company.
The brand image of Vodafone is very strong in the market and a continuous
recycling of their campaigns from the pug to Zoo zoo’s to the present blackberry
boys advertisements has guaranteed their brand a high recall value.
2. Market Prospects / Penetration:
Vodafone’s intention to tap the price sensitive rural market comes with its low cost
offerings such as low priced Magic Box which has a bundled low priced handset
along with prepaid card and various freebies. Products like Vodafone 150 priced at
Rs. 799 and eco-friendly solar charging handset VF 247 will help Vodafone to
penetrate the rural market in a big way.
3. Competitive Advantage:
From product innovation to technological advantage, Vodafone as a brand keeps
on improving and coming up with new plans. Vodafone adjusts according to the
changing market which gives them a competitive advantage. Vodafone has from
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11. time to time come with creative advertising campaign for its various plans which
has captured the imagination of millions. Vodafone’s plans like “Chota Recharge”
and number of add on plans like these has made it sure that it maintains an edge
over its competitors. Vodafone pursues a global international corporate-level
strategy and has heavily focused on acquisitions like Hutch acquisition in India.
SWOT OF TELECOM INDUSTRY IN INDIA
Strengths
• Huge Customer potential
• Tele density still being 48% and rural tele density 21%.
• The broadband subscribers grew from 0.18 million in 2005 to 6.2 million as on
30 April 2009 and about 7.98 million, at the end of the December 2009 and till
June 2011 it was about 11.41 million.
• High Growth Rate
• Wireless subscribers growing at a CAGR of 60 per cent per annum since 2006.
• Allowed FDI limit ranging from 74% to 100%
• The total FDI equity inflows in telecom sector have been US$ 2223 million
during April-November 2009-10
• The foreign direct investment in the telecom sector was Rs 5,434.48 crore during
the quarter ended June 30, 2011.
Weakness
• Poor Telecommunication Infrastructure
▫ Result: Large number of call drops.
• Late adopters of New Technology- India was amongst the last countries in the
world to get access to 3G technology.3.5G is and even 4G are there in many
countries and in India 3G is not properly available among all circles.
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12. • Most competitive market
Opportunities
• 3G Telecom services and 4G services
• More Quality Service
• Value added Services (VAS)
• Boost to Telecom Manufacturing Companies
• Telecom Equipment Exports
▫ The Indian telecom industry is expected to reach a size of Rs 344,921 crore by
2012 at a growth rate of over 26 per cent, and generate employment opportunities
for about 10 million people during the same period. The sector would create direct
employment for 2.8 million people and for 7 million indirectly, according to a
Frost and Sullivan report.
• Horizontal Integration
Threats
• Declining ARPU (average Revenue per user)
▫ E.g. price wars like per-second billing which is deflating revenues and making
sure the ‘survival of the fittest’
• Partiality on the part of the Govt.
▫ e.g. Allowing 3G service in a PSU (MTNL,BSNL) before auctioning to Private
Sector.
• Content Piracy
Large Market Potential
Around 30-40 million people in India join the middle class every year. The
country’s upper middle class spends 6 percent of its earnings on telecom services.
India is one of the largest consumer markets in the world. Due to rapid economic
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13. growth and rise in disposable income, the spending power of consumers is
increasing rapidly. It has been forecasted that 15 years down the line, Indians will
be approximately four times richer than they are today. As per this forecast,
Indians will purchase five times more cars and consume three times more crude oil
than they do today.
Low Labour Cost
CII estimates that manufactured product outsourcing accounted for US$ 10 billion
in 2007. The value will escalate to US$ 50 billion by 2015. India has one of the
lowest labour costs among the developing countries, which is the foremost factor
for attracting multinational giants in every sector.
Growth of the Sector
The phenomenal growth in the Indian mobile industry was brought about by the
wireless revolution that began in the nineties. Besides this, the following factors
also aided the growth of the industry.
Liberalization
The relaxation of telecom regulations has played a major role in the development
of the Indian telecom industry. The liberalization policies of 1991 and the
consequent influx of private players have led the industry on a high growth
trajectory and have increased the level of competition. Post-liberalization, the
telecom industry has received more investments and has implemented higher
technology.
Changing Demographic Profile
The changing demographic profile of India has also played an important role in
subscriber growth. The changed profile is characterized by a large young
population, a burgeoning middle class with growing disposable income,
urbanization, increasing literacy levels and higher adaptability to technology.
These new features have multiplied the need to be connected always and to own a
wireless phone and therefore, in present times mobiles are perceived as a utility
rather than a luxury.
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14. Increased Competition & Declining Tariffs
Liberalization of the telecom industry has fuelled intense competition, especially in
the cellular segment. The ever-increasing competition has led to high growth of
subscribers and has put pressure on tariffs, which have seen a sharp drop over the
years. When the cellular phones were introduced, call rates were at a peak of Rs 16
per minute and there were charges for incoming calls too. Today, however,
incoming calls are no longer charged and outgoing calls are charged at less than a
rupee per minute.
Growth Avenues
A managed service is another segment that is attracting telecom companies. On
account of the rapidly growing subscriber base, service providers find it difficult to
manage their infrastructure and network management operations. In such cases,
they completely or partially outsource their infrastructure or network management
operations.
To reduce their network deployment costs, many service providers are considering
infrastructure sharing offers the following advantages:
Improved service quality
Increased affordability for customers
Faster roll out of services in rural and remote areas
Increased environmental aesthetics
Lower operating costs for service providers
Value Added Services: The VAS industry was worth USD 632 million in 2006–07.
The industry is estimated to grow by 65 percent in 2011–12 and become an USD
1,011 million opportunity.
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15. Problems
Multiple issues plague the mobile industry growth in the country
Declining Quality and Congestion
One of the major consumer issues is increased network congestion and the
consequent Quality of Service (QoS). This problem is particularly exacerbated in
densely populated parts of cities and during peak times. The principal reason for
this problem is that the service providers have not scaled up their telecom network
infrastructure in proportion to the increased network usage. The latter is a direct
consequence of the increased number of subscribers and increased number of calls
made by these subscribers.
Increase in Number of Telecom Towers
The larger number of subscribers and service providers has led to the
mushrooming of telecom towers, especially in metros and big cities. These towers
contain mobile base station equipment, which produces 900 and 1800 MHz
pulsated waves. This has increased the electromagnetic contamination- referred to
commonly as "Electro smog" in urban centers. A number of scientific studies have
been done which warn us about danger posed by this electromagnetic
contamination to the health of humans and other living being
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16. RESEARCH METHODOLOGY
Introduction to Research Methodology
Research is common parlance refers to a search for knowledge. One can also
define research as a scientific and systematic search for pertinent information on a
specific topic. In fact, research is an art of investigation. According to Clifford
Woody research comprises defining and redefining problems, formulating
hypothesis or suggested solutions, collecting, organizing and evaluating data,
making deductions and reaching conclusions; and at last carefully testing the
conclusions to determine whether they fit the formulating hypothesis. Like every
subject this topic of the handloom sector has also been thoroughly researched and
the relevant information has been rightly used.
Qualitative and Quantitative Research Data Gathering:
Quantitative Data
Information that can be counted or expressed numerically is called quantitative
data. This type of data is often collected in experiments, manipulated and
statistically analyzed. Quantitative data can be represented visually in graphs and
charts.
Qualitative Data
Qualitative data is extremely varied in nature. It includes virtually any information
that can be captured that is not numerical in nature. 'Soft' data that approximates
but does not measure the attributes, characteristics, properties, of a thing or
phenomenon is called qualitative data.
There are two methods of collecting data. They are:
Primary Data
It is a term for data collected on source which has not been subjected to processing
or any other manipulation. It is the Data that has been compiled for a specific
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17. purpose, and has not been collated or merged with others. Primary data is always
collected from firsthand experience.
Secondary Data
Secondary data is data collected by someone other than the user. Common sources
of secondary data for social science include censuses, surveys, organizational
records and data collected through qualitative methodologies or qualitative
research. Secondary data analysis saves time that would otherwise be spent
collecting data and, particularly in the case of quantitative data, provides larger and
higher-quality databases than would be unfeasible for any individual researcher to
collect on their own.
Pilot Study
An initial Pilot study has been conducted to determine what factors influence
customers to choose a certain network over other competitors. The study found
fifteen factors which are detrimental to consumers. The factors are:
Local Call Rates
STD Call Rates
Family Members Using The Network
Free Call Services
Convenience In Paying Bills
Network Connectivity
Frequent Promotional Offers
Roaming Connectivity
Internet Access
Availability Of Recharge Coupons
Family Friend Group Services
Messaging Packs
Payment/ Recharge Kiosk
Customer Care Service
Popularity Of the Company
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18. Questionnaire
A questionnaire was prepared based on the above fifteen factors and a sample size
of a hundred people were taken, consisting of people from different age groups,
profession, geographic location and income.
The results obtained from the questionnaire were used for performing co-relation
and other statistical tasks.
Correlation
The word correlation is used to denote the degree of association between variables.
If two variables x and y are so related that variations in the magnitude of one
variable tend to be accompanied by variations in the magnitude of other variables,
they are said to be correlated. If y tends to increase as x increases, the variables are
said to be positively related. If y tends to decrease as x increases the variables are
negatively correlated. If the values of y are not affected by changes in the value of
x, the variables are said to be uncorrelated.
The co-relation used is to depict that call rates are inversely proportional to number
of customers using the network.
With the growth in the customer base over the years the call rates have declined.
Properties of correlation coefficient
The correlation coefficient ‘r’ is independent of the choice of both origin and scale
of observations the correlation coefficient ‘r’ is a pure number and is independent
of the units of measurement. The correlation coefficient
‘r’ lies between –1& +1.
Formulae,
We use this correlation method to correlate the mobile call rates for several years
with the total mobile subscribers of those years. We calculate the Pearson’s
correlation with the software SPSS to find out whether the value is significant or
not.
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19. Rank correlation
The product-moment correlation coefficient ( r ) is calculated by using ‘values’ of
the variables. But many situations arise in which either either precise
measurements are not available, or the characters cannot be measured ta all. For
example, in order to find the extent os association between ‘intelligence’ and
‘efficiency in salesmanship’ for a group of salesman. But this method is open to
many objections, and an exact measurement of the two qualities is not at all
possible.
R lies between +1 & -1
Formulae,
We have used spearman’s rank correlation to correlate the total mobile subscribers
for different operators of a particular year, i.e. 2009-2010 with the total port in’s of
subscribers to their operators. We use spearman’s rank correlation as the data was
available for only one year. We calculate the spearman’s rank correlation with the
help of a software SPSS to find its significance.
Factor Analysis
Factor Analysis is a statistical method used to describe variability among observed,
correlated variables in terms of a potentially lower number of unobserved variables
called factors. In other words, it is possible, for example, that variations in three or
four observed variables mainly reflect the variations in fewer such unobserved
variables. Factor analysis searches for such joint variations in response to
unobserved latent variables. The observed variables are modeled as linear
combinations of the potential factors, plus "error" terms. The information gained
about the interdependencies between observed variables can be used later to reduce
the set of variables in a dataset.
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20. Principal Component Analysis
Principal component analysis is a mathematical procedure that uses an orthogonal
transformation to convert a set of observations of possibly correlated variables into
a set of values of linearly uncorrelated variables called principal components. The
number of principal components is less than or equal to the number of original
variables. This transformation is defined in such a way that the first principal
component has the largest possible variance (that is, accounts for as much of the
variability in the data as possible), and each succeeding component in turn has the
highest variance possible under the constraint that it be orthogonal to (i.e.,
uncorrelated with) the preceding components. Principal components are guaranteed
to be independent only if the data set is jointly normally distributed. PCA is
sensitive to the relative scaling of the original variables.
Certain terminologies used in the factor analysis are: -
Varimax: An orthogonal rotation method that minimizes the number of variables
that have high loadings on each factor.
Communality Matrix: Communality matrix indicates the amount of variance in
each variable that is accounted for. The initial communalities is the estimate of the
variance in each variable accounted for by all components/factors. Extraction
communality is the estimate of the variance in each variable accounted for in the
factor solution.
The smaller value indicates that they do not fit well with the factor solution.
Total variance matrix: The total variance matrix provides us with the values which
are based on initial eigen values. The total column gives the amount of variance in
the observed variable accounted for by each component/factor.
Rotated Component Matrix: From the rotated component matrix we take the
components which is better represented and have higher position on the screen plot
i.e, these factors are highly loaded and contribute to the resultant output.
Factor Transformation Matrix: The factor transformation matrix describes the
specific rotation applied to your factor solution.
Component Plot in Rotated Space; Component plot in rotated space provides a
graphical representation of the variable in the component space.
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21. Bartlett's test
A method to test for the equalities of variances from a number of independent
normal samples by testing the hypothesis.
Kaiser-Meyer-Olkin (KMO) Test
The KMO test is used to determine whether the sample size is adequate or not. If
the results show less than.5 as an answer the sample size is considered inadequate.
Forecasting
Forecasting is the use of historical data to determine the future trends. It is used by
companies to determine how to allocate their budgets for an upcoming period of
time. This is typically based on demand for the goods and services it offers,
compared to the cost of producing them. Investors utilize forecasting to determine
if events affecting a company, such as sales expectations, will increase or decrease
the price of shares in that company. Forecasting also provides an important
benchmark for firms which have a long-term perspective of operations.
Linear forecasting
Linear forecasting is a mathematical operation where future values of discrete time
series are estimated as a linear function of previous samples.
I have used this method to forecast the total mobile and landline subscribers up to
the year 2014-2015. I have used Microsoft Excel to forecast the landline and
mobile subscribers for different years.
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22. HYPOTHESIS
H10: Mobile call rates do not significantly affect total mobile
subscriber base.
H11: Mobile call rates significantly affect total mobile subscriber
base.
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23. DATA ANALYSIS
Table - 1 along with the Bar Graph, depict the growth of Subscriber Base in India
at the end of each financial year during the past decade (2000 to 2010). It can be
seen that during the last year (2010) although BSNL and MTNL have registered
decline, private operators have jointly had a growth of 11.51% increasing the
connections from 5.04 million to 5.62 million.
Table - 1.1 shows the Annual Growth Rate registered by Basic and Cellular Phone
services for a period of three years ranging from 1998-99 to 2000-01. The
Histogram below clearly indicates a rapidly increasing trend in the growth rate of
Cellular Phone services.
Table - 1.2 demonstrates Growth of Cellular Phone Subscribers in different Metros
and Circles of India during the years 1997 to 2003. The bar graph along with the
table show that the number of such subscribers has consistently increased over the
years.
Table - 1.3 and its subsequent graphical representation indicate Company-wise,
the number of Mobile Telephone Connections/Subscribers in Rural and Urban
Areas of India as on 31st December, 2010. When compared individually, it can be
seen that 'Reliance Telecom + Communications Ltd’ has the maximum number
(9,85,69,506) of subscribers in urban areas while ‘Bharati Airtel’ has the maximum
number (6,08,47,715) of subscribers in rural areas. However when compared in
totality, (i.e., no. of subscribers in urban areas + rural areas),’ Bharati Airtel’
clearly dominates the other companies with a subscriber base of 15,24,95,219.
Table - 1.4 shows the Percentage Rate of Growth in Postpaid and Prepaid Mobile
Subscribers in India from the financial year 2000 to 2004. It is visible from the Pie
Charts that both Postpaid Subscribers as well as Prepaid subscribers indicate an
increasing trend.
Table - 1.5 points out Company-wise, the Market Share and Technology used by
the Subscriber Base of Mobile Operators in India as on March, 2005. The Bar
Graph represents the total number of different cellular group subscribers, Bharati
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24. Group having the maximum number (1,09,84,280) of subscribers. The Pie Chart
represents the approximate market share of the different cellular groups, Bharati
Group consequently having maximum market share and HFCl and Shyam Telelink
having almost no market share.
Table – 1.6 along with its Line Chart indicate Operator-wise, the number of
Subscribers who ported their numbers under Mobile Number Portability Scheme
(MNPS) in India as on 25th February, 2011. It is seen that Bharati Airtel has the
maximum number of total ports (5,30,615) in as well as total ports (3,82,400) out
followed by Vodafone (ports in-4,88,250 & ports out-2,95,489).
Table – 1.7 represents Circle-wise, the Population and Area Covered under Mobile
Telephone Services in India as on 30th June, 2010. The Pie Charts indicate that out
of the total population covered under mobile telephone services, Uttar Pradesh East
has a maximum population of 8,08,22,915. On the other hand, out of the total area
covered under mobile telephone services, Andhra Pradesh covers a maximum area
of 2,20,326 sq km. Andaman and Nicobar Islands have a minimum population of
3,16,000 and covers a minimum area of 797 sq km.
Table – 1.8 indicates the total number of Fixed (landline + Wll) and Mobile
Phones in India during the years 1999 to 2006. The Line chart shows that although
there has been a considerable rise in the number of fixed/basic phones over the
years, the number of mobile phones have immensely risen from only 1.2 million in
1999 to 92.52 million in 2006.
Table – 1.9 its Graph and Pie Charts illustrate the Subscriber Base of Mobile
(GSM and CDMA) Services in India from March 2000 to March 2009. On
examining, it is seen that apart from BPL and Sistema which have fluctuating
growth rates , all the other Service Providers have shown an increasing trend it
their growths.
Table – 1.10 demonstrates Category-wise, the Subscriber Base for Mobile (GSM)
Services in India from 1999 to 2007. The Bar Graph rightly shows that the
subscriber base of Metros, A circles, B circles and C circles have all grown
considerably over the years.
Table – 1.11 points out the Top Five Mobile Operators on the basis of Market
Share along with Subscriber Base in India as on March, 2003 and March, 2004.
The Graph represents the top five mobile operators on the basis of subscriber base
24
25. in India, Bharati being in the first position in 2003 and Reliance being in the first
position in 2004 and Idea being in the fifth position in both the years. The Pie
Charts indicate the top five mobile operators on the basis of their market share in
the years 2003 and 2004, Bharati having maximum percentage of market share in
2003 and Reliance having maximum in 2004.
Table – 1.12 and its subsequent graphical representation illustrate the Trends in
Revenue Earned per minute (Incoming + Outgoing) for GSM Cellular Services in
India from the year 2000 to 2004. It shows the revenue earned per minute and its
respective percentage change under Postpaid services, Prepaid services and
Blended (postpaid + prepaid) Services.
Table – 1.13 demonstrates the trend in Growth of Tele-density from March 2005
to March 2010. It is clearly visible from the Line Chart that the tele-density at the
end of March,2010 reached the mark of 52.74 as compared to 36.98 at the end of
the previous year recording an increase of nearly 15.76 .
Table-1.14 shows the forecasting of the total landline subscribers and total mobile
subscribers up to 2014-2015. It is represented by a line graph showing the growth
in the landline subscribers and mobile subscribers. The rate of growth of mobile
subscribers is more in comparison to the rate of growth of the landline subscribers
due to continuous decrease in the tariff rates of mobile.
Table-1.15 shows the operator wise growth from 1999-2000 to 2009-2010. It is
represented through a bar graph showing growth of different operators in different
years. It is seen from this graph that all the operator’s subscriber base has grown
but the highest growth is in Airtel followed by Relaince.
Table-1.16 shows the service revenue earned by the different telecom operators
from 2008-2009 to 2011-2012. It is represented by a bar graph showing growth of
different operators in different years. I have also forecasted the revenue earned by
the operators for the year 2011-2012 on the basis of previous years revenue earned.
It is seen from this graph that the maximum revenue is earned by Airtel followed
by Reliance.
Table-1.17 shows the correlation between mobile call rates and total cellular
subscribers. The correlation is -.889 at 0.01 level of significance which means both
25
26. are highly and negatively correlated and the data is statistically significant. It
means with decrease in cellular call rates the total cellular subscribers will rise.
Table-1.18 shows the trend in revenue earned per minute for both incoming and
outgoing for all the GSM operators. It is represented by a line graph showing the
fall in the revenue earned per minute for both postpaid and prepaid numbers for the
year 1999-2000 to 2003-2004. It is seen from the graph that the prepaid revenue
earned per minute has reduced more in comparison to postpaid revenue with the
increase in number of operators and subscriber base in the industry.
Table-1.19 shows the Spearman’s rank correlation between total subscribers of
different operators and the total port in’s for the different operators. The
Spearman’s rank correlation is .709 at 0.05 level of significance which means both
are highly and positively correlated and data is statistically significant.
RESULTS AND FINDINGS
The most important and obvious finding is that the Telecom Industry has
significantly grown over the past decade (2000-2010) with a high boom
during the period 2005-2010.
The Subscriber Base in the urban areas, especially in the Metros, has highly
risen in the last five years as compared to the Rural areas.
The rate of growth in the number of Cellular Phone subscribers has been
more rapid as compared to that of the Basic Phone subscribers.
During the last year (2010) although BSNL and MTNL have registered
decline, private operators have jointly had a growth of 11.51% increasing the
connections from 5.04 million to 5.62 million.
26
27. Both prepaid and postpaid subscribers have shown an increasing trend in
their growth rate.
The Tele-density at the end of March, 2010 reached the mark of 52.74 as
compared to 36.98 at the end of the previous year recording an increase of
nearly 15.76.
The top five mobile operators in India, on the basis of subscriber base and
market share, are Airtel, Reliance, BSNL, Vodafone and Idea.
Bharati Airtel has the maximum number of subscribers in the Rural areas
and Urban areas.
In totality, Bharati Airtel has the maximum percentage of share in the
market.
There has been a significant rise in the total mobile subscribers. It has
increased from 3107449 in 1999-00 to 494036000 in 2009-10, which further
will increase to 950802215 in 2014-2015.
There has been a significant rise in the total mobile subscribers. It has
increased from 3107449 in 1999-00 to 494036000 in 2009-10, which further
will increase to 950802215 in 2014-2015
There has been an increase in total landline subscribers but this is not risen
significantly and has increased at an decreasing rate.
There has been a significant decrease in average cellular call rates from Rs.5
in 1999-00 to Rs. 0.5 in 2009-10.
There has been a significant impact of total port in’s of different operators to
total mobile subscribers in the year 2009-2010 for different operators, this
affects the market share of different operators.
27
28. Lastly, it is seen that with the growth in the number of users in the Telecom
industry, the call rates have been subsequently declining
On examining and reviewing all the data and findings, the following
RECCOMENDATIONS could be made:
Small players and non performing like S TEL, Sistema, Loop Mobile,
Etisalat (Cheers Mobile) should merge with major players like Airtel and
Vodafone as norms related to merger and acquisition will be relaxed after
2011 telecom policy is implemented.
As India have large middle class people companies should tie up with Apple
and Blackberry to offer Handset with an effective EMI scheme with postpaid
plan as it happens in country like U.K.
Airtel should outsource its marketing operations too.
Vodafone launched I Phone 4 quite later after being launched by Airtel and
Aircel. In future Vodafone should be in line or a step ahead of its
competitors.
As the government targets to increase rural teledensity, this segment will
boost the demand for telecom services, equipment, Internet services and
other value-added services; thereby, offering great market opportunities for
telecom players.
Companies should focus on awareness and promotion campaigns in rural
areas.
Airtel can launch its own handsets as Vodafone is doing at cheaper rates.
28
29. CONCLUSION
The mobile service provider industry in India has experienced exponential growth
over the past few years and has been an important contributor to economic growth;
however, the cut-throat competition and intense tariff wars have had a negative
impact on the revenue of players. Despite the challenges, the Indian mobile service
provider industry will thrive because of the immense potential in terms of new
users. India is one of the most-attractive cellular markets because it is still one of
the lowest penetrated markets. Operators are on an expansion mode and are
investing heavily on telecom infrastructure. Foreign telecom companies are
acquiring considerable stakes in Indian companies. Burgeoning middle class and
increasing purchasing power, the government’s thrust on increasing rural telecom
coverage, favorable investment climate and positive reforms will ensure that
India’s high potential is indeed realized.
While preparing the above Term Paper the following shortcomings were observed.
The absence of such shortcomings would definitely assure the betterment of the
project in future.
Moreover, since only the Telecom Industry in the Indian market was
analyzed and the Global markets were not taken into account, therefore the
true position of this industry in the Global Market Sector could not be
determined. Examination of the industry on a global basis would tell us
where exactly the industry stands.
Further, the time span for preparing the project, being too short, the
intricacies of the individual companies, their reason for growth or decline
and other pros and cons etc., could not be looked into at depth.
29
30. The Questionnaire survey could only be performed in the confines of only
one city due to time constraints. Hence the results do depict a vague
similarity due to the people belonging to same culture, income group and
other similar factors.
FUTURE OF THE INDUSTRY
According to the analytical study of the telecom sector, the use of mobile phones is
growing day by day in the Indian telecom sector with a projected growth of CAGR
of around 6.6% increase in the subscriber base of 2011-2012 to 2014-2015. The
other segments of this industry will also record growth, like the internet are also
anticipated growth both in terms of subscriber addition and development of
infrastructure during the forecast period. Moreover, with the launch of 3G services,
the country is expected to witness rapid surge in the broadband subscribers’ base
during the coming years.
According to a Gartner report, after China, India would be fastest growing mobile
telephony market in Asia Pacific with revenues slated to increase at a CAGR of
18.4% to reach $25 billion in 2011 from current $9 billion.
Cellular penetration would increase to 38.6% in 2011 with 58% of rural population
and 95% of urban population possessing mobile phone. The market will be driven
by prepaid connections, which will account for more than 93% connections. The
voluntary churn rate is expected to reach 41% from current 30.6%.
The revenues from data services will contribute to the revenue growth; however
the bulk of the revenues will continue to come from voice services. Customers
with low disposable incomes will increase as such the Average Revenue Per User
will decline.
Large players will have an advantage as they expand their presence and take
advantage of economies of scale. But they will face tremendous challenges owing
to intensifying competition.
30
31. Annexure
TABLE - 1
GROWTH OF SUBSCRIBER
BASE FROM 2000-2010
FINANCIAL SUBSCRIBER BASE (IN
YEAR MILLION)
2000 28.53
2001 36.29
2002 44.97
2003 54.62
2004 75.54
2005 98.41
2006 140.32
2007 206.83
2008 300.49
2009 429.72
2010 621.28
Source: www.indiastat.com
31
32. 700 621.28
600
500 429.72
400
300.49
300 206.83
200 140.32
75.54 98.41
100 28.53 36.29 44.97 54.62
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
SUBSCRIBER BASE (IN MILLION)
Source: Based on the above table (author’s work
TABLE - 1.1
Annual Growth Rate Registered by Basic and Cellular Phone Services
(1998-99 to 2000-01)
Growth Rate
Year Basic Cellular
Phone Phone
1998-99 21.40% 35.96%
1999-00 23.32% 57.08%
2000-01 22.73% 89.84%
Source: www.vision2020planningcommission.nic.in
32
33. 100.00%
80.00%
60.00%
Growth Rate Basic Phone
40.00%
Growth Rate Cellular Phone
20.00%
0.00%
1998-99 1999-00 2000-01
Source: Based on the above table (author’s work)
TABLE - 1.2
Growth of Cellular Phone Subscribers in India
(1997 to 2003)
Subscribers As on Metros Circles Total
1997 325967 12698 338665
1998 551757 330559 882316
1999 519543 680035 1199578
2000 795931 1088380 1884311
2001 1362592 2214503 3577095
2002 2567757 3863763 6431520
2003 4439524 8248113 12687637
Source: www.indiastat.com
33
34. 30000000
25000000
20000000
Total
15000000
Circles
10000000
Metros
5000000
0
1997 1998 1999 2000 2001 2002 2003
Source: Based on the above table (author’s work)
34
35. TABLE - 1.3
Company-wise Number of Mobile Telephone Connections/Subscribers in Rural and Urban Areas
of India
(As on 31.12.2010)
Sl. Mobile Telephones
Companies
No. Rural Urban Total
1 Aircel 17731187 32437624 50168811
2 Bharati Airtel 60847715 91647504 152495219
3 Etisalat DB Telecom 0 264899 264899
4 HFCL Infotel Ltd 8593 1606500 1615093
5 IDEA Mobile 40672096 41106559 81778655
6 Loop Mobile 0 3044579 3044579
Reliance Telecom +
27082621 98569506 125652127
7 Communications Ltd
8 Sistema Shyam 1935360 6498307 8433667
9 STEL 611031 1704493 2315524
10 TATA Teleservices Ltd. 17898628 66334770 84233398
11 Uninor 5560484 12949565 18510049
12 Videocon 0 7319603 7319603
13 Vodafone Essar 47761849 76493271 124255120
14 Private Total 220109564 439977180 660086744
15 BSNL 30790563 55918974 86709537
16 MTNL 0 5403754 5403754
17 PSU Total 30790563 61322728 92113291
18 India 250900127 501299908 752200035
Source: TRAI Annual Report 2009-10
80000000
70000000
60000000
50000000
40000000
30000000
20000000
10000000
0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
Mobile Telephones Rural Mobile Telephones Urban Mobile Telephones Total
Source: Based on the above table (author’s work)
35
36. TABLE - 1.4
Rate of Growth in Postpaid and Prepaid Mobile Subscribers in India
(2000 to 2004)
Growth rate of Growth rate of prepaid
Financial Year
postpaid subscribers subscribers
2000 NA NA
2001 40% 96%
2002 57% 157%
2003 14% 98%
2004 124% 168%
Source: www.trai.gov.in
Growth rate of postpaid subscribers
2001
40%
2004 2002
124% 57%
2003
14%
Growth rate of prepaid subscribers
2001
2004 96%
168%
2002
2003 157%
98%
Source: Based on the above table (author’s work)
36
37. TABLE - 1.5
Company-wise Market Share and Technology Used
by Subscriber Base of Mobile Operators in India
(March, 2005)
Sl. No. Cellular Group Subscribers on March, 05 Market Share Technology Used
1 Bharti Grp 10,984,280 21 GSM
2 Reliance Grp 10,446,053 20 GSM & CDMA
3 BSNL 9,899,425 19 GSM & CDMA
4 Hutchison Grp 7,797,720 14.9 GSM
5 IDEA Grp 5,069,693 9.7 GSM
6 BPL Grp 2,575,387 4.9 GSM
7 Spice Grp 1,438,824 2.8 GSM
8 Aircel Grp 1,755,350 3.4 GSM
9 Tata Teleservices 1,089,500 2.1 CDMA
10 MTNL 1,078,143 2.1 GSM & CDMA
11 HFCL 53,163 0.1 CDMA
12 Shyam Telelink 27,663 0.1 CDMA
13 Total Subscribers 52,215,201 100 GSM & CDMA
Different Cellular Group Subscribers on March, 05
60,000,000
50,000,000
40,000,000
30,000,000
20,000,000 Subscribers on March, 05
10,000,000
0
1 2 3 4 5 6 7 8 9 10 11 12 13
Market Share of Different Cellular Groups
Tata MTNL
Teleservices 2%
2% Shyam
Spice Grp
HFCL Telelink
3% Aircel Grp 0% 0%
BPL Grp 3%
5% Bharti Grp
IDEA Grp
10% 21%
Hutchison Grp Reliance Grp
15% 20%
BSNL
19%
Source Of table: www.vision2020planningcommission.nic.in
Source of Graph: Based on the above table (author’s work)
37
38. 600000
500000
400000
300000
200000
100000
0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Operators
Total Port In Total Port Out
Source of Table: www.trai.gov.in
Source of Graph: Based on the above table (author’s work)
38
39. TABLE - 1.7
Circle-wise Population and Area Covered under Mobile Telephone
Services in India (As on 30.06.2010)
Circle Population Covered Area Covered (Sq. Km.)
Andaman & Nicobar 316000 797
Andhra Pradesh 67334977 220326
Assam 20860000 39338
Bihar 53006472 59650
Chhattisgarh 13378309 60411
Gujarat 41997127 110680
Haryana 16544108 32489
Himachal Pradesh 3624010 30113
Jammu and Kashmir 6388782 31793
Jharkhand 11603207 35285
Karnataka 37167579 101760
Kerala 30162136 35536
Madhya Pradesh 27736320 118774
Maharashtra 68843231 106563
North East-1 3333021 21772
North East-2 2519283 20046
Orissa 25278005 102912
Punjab 23304386 45933
Rajasthan 43729884 164315
Tamil Nadu 50516502 93794
Uttarakhand 5154923 35039
Uttar Pradesh East 80822915 140798
Uttar Pradesh West 25831170 44051
West Bengal 28737425 27175
Kolkatta TD 13214676 2200
Chennai TD 9975869 4913
Total 711380317 1686463
Population Covered Area Covered (Sq. Andaman & Nicobar Andhra Pradesh
Assam Bihar
Km.) Chhattisgarh Gujarat
Haryana Himachal Pradesh
Jammu and Kashmir Jharkhand
Karnataka Kerala
Madhya Pradesh Maharashtra
North East-1 North East-2
Orissa Punjab
Rajasthan Tamil Nadu
Uttarakhand Uttar Pradesh East
Uttar Pradesh West West Bengal
Kolkatta TD Chennai TD
Total
Source of Table: TRAI Annual Report 2009-10
Source of Graph: Based on the above table (author’s work)
39
40. Source: www.vision2020planningcommission.nic.in
100
90
80
70
No. of Telephone (in
60
Million) Fixed
50 (Landline+WLL)
40 No. of Telephone (in
30 Million) Mobile
20
10
0
1999 2000 2001 2002 2003 2004 2005 2006
Source: Based on the above table (author’s work)
40
41. TABLE - 1.9
Subscriber Base of Mobile (GSM and CDMA) Services in India
(March, 2000 to 2009)
(in Million)
%
%
Growth
Growth
Over
Service Mar, Mar, Mar, Mar, Mar, Mar, Mar, Mar, Over
Mar, 08 Mar, 09 March,
Providers 00 01 02 03 04 05 06 07 Financial
2005
Year
(One
2008
Year)
Bharti 0.36 0.69 1.35 3.07 6.5 10.98 19.58 37.14 61.98 93.92 78.32% 51.53%
BSNL 0.04 2.29 5.53 9.9 17.65 30.99 40.79 52.15 78.28% 58.70%
Reliance 0.07 0.19 0.38 0.54 7.26 10.45 17.31 28.01 45.79 72.67 65.65% 55.84%
Hutch 0.45 0.71 1.27 2.16 5.15 7.8 15.36 26.44 44.13 68.77 96.92% 27.85%
Tata 0.05 0.16 0.63 1.09 4.85 16.02 24.33 35.12 344.95% 44.35%
Idea 0.16 0.34 0.81 1.28 2.73
5.07 7.37 14.01 24 38.89 45.36% 62.03%
Escotel 0.14 0.31 0.5 0.59 0.99
Aircel - - 0.54 0.73 1.29 1.76 2.61 5.51 10.61 18.48 48.30% 74.18%
MTNL 0.02 0.22 0.35 0.46 1.08 2.05 2.94 3.53 4.48 89.81% 26.91%
Spice 0.17 0.27 0.47 0.64 1.21 1.44 1.93 2.73 4.21 4.13 34.03% -1.90%
BPL 0.34 0.64 0.9 1.13 1.88 2.58 1.34 1.07 1.29 2.16 -48.06%* 67.44%
HFCL 0.01 0.03 0.03 0.05 0.06 0.15 0.3 0.6 20.00% 30.00%
Sistema 0 0.03 0.03 0.03 0.03 0.1 0.11 0.39 0% 445.45%
Total 1.9 3.58 6.54 13 33.69 52.23 90.14 165.1 261.07 391.76 72.62% 50.06%
250
Mar, 09
200 Mar, 08
Mar, 07
150
Mar, 06
Mar, 05
100
Mar, 04
50 Mar, 03
Mar, 02
0
Mar, 01
Mar, 00
Sistema, 0 Bharti, 51.5 BSNL, 58.70
Spice, 34. BPL , 0 HFCL, 20.
Bharti, 78. % 3% % Reliance, 55
03% MTNL, 89. 00% 32% BSNL, 78.
Aircel .84% Hutch, 27.8
81% 28%
, 48.30% 5%
%age Reliance, Sistema, 44 Tata, 44.35
Escot Idea, 45.3
growth 65.65% 5.45% %
Idea, 62.03
over 6%
el, 0.0
0% March, 05 Hutch, 96. Escotel, 0.0 %
92% 0%
%age %age MTNL, 26.9
growth Tata, 344.
growth 1%
over 95% HFCL, 30.00 BPL Spice, - Aircel
over FY % , 67.44%
March, 05 1.90% , 74.18%
2008
Source of Table: www.indiastat.com and Source of Graph: Based on the above table (author’s work)
41
42. Source: www.trai.gov.in
25000000
20000000
Total
15000000 "C" Circles
"B" Circles
10000000 "A" Circles
Metros
50000000
0
Mar, 99 Mar, 00 Mar, 01 Mar, 02 Mar, 03 Mar, 04 Mar, 05 Mar, 06 Mar, 07
Source: Based on the above table (author’s work)
42
43. TOP 5 MOBILE OPERATORS' SUBSCRIBER BASE IN
INIDA
Subscriber Base (in million) March '2003 Subscriber Base (in million) March '2004
6.5
5.53 5.15
7.26
2.73
3.07 2.29 2.16
0.54 1.28
Reliance Bharti BSNL Hutchison Idea
% age share on March % age share on March
2003 2004
Reliance
Idea 4.15 Idea
Hutchis Reliance
9.85 8.1
Hutchis on 21.55
Bharti 15.29
on
23.62 BSNL Bharti
16.62 BSNL
17.62 16.41 19.29
Source of Table: www.indiastat.com and Source of Graph: Based on the above table (author’s work)
43
48. Table1.16 SERVICE REVENUE OF INDIAN TELECOM OPERATORS (Rs./Crore).
TELECOM 2008-2009 2009-2010 2010-2011 2011-2012
OPERATORS
BHARTI 37352 41847 59476 65060
AIRTEL
RELIANCE 22250 22132 23107 31468
IDEA 10154 12447 15503 16963
MTNL 4587 3751 4380 4380
HCFL 139 204 204 204
Source: Reliance Communications Ltd.
Source: Based on the above table (author’s work)
48
49. Table 1.17 CORRELATION BETWEEN MOBILE CALL RATES AND TOTAL MOBILE
SUBSCRIBERS.
YEAR APPROXIMATE MOBILE TOTAL MOBILE
CALL RATES (AVERAGE SUBSCRIBERS
OF ALL THE
OPERATORS ACROSS
ALL THE OPERATOS)
1999-2000 5 3107449
2000-2001 5 5478932
2001-2002 4.28 10480430
2002-2003 3.96 21991743
2003-2004 3.37 37378807
2004-2005 3.19 58503224
2005-2006 2.25 105425183
2006-2007 1.19 172219135
2007-2008 1.76 258235642
2008-2009 0.94 380447562
2009-2010 0.50 494036000
Source: www.trai.gov.in
Correlations
VAR00002 VAR00003
**
VAR00002 Pearson Correlation 1 -.889
Sig. (2-tailed) .000
N 11 11
**
VAR00003 Pearson Correlation -.889 1
Sig. (2-tailed) .000
N 11 11
**. Correlation is significant at the 0.01 level (2-tailed).
VAR00002: MOBILE CALL RATES
VAR00003: TOTAL SUBSCRIBERS
Source: Based on the above table (author’s work)
49
50. Table 1.18 TREND IN REVENUE EARNED PER MINUTE (INCOMING + OUTGOING)
FOR ALL GSM OPERATORS.
YEAR POSTPAID PREPAID
1999-2000 6.55 7.32
2000-2001 4.82 5.65
2001-2002 3.67 5.43
2002-2003 2.55 3.49
2003-2004 1.79 1.39
Source: www.indiastat.com
Source: Based on the above table (author’s work)
50
51. Table 1.19 Factor Analysis
Correlation Matrix
Family
Member Recharge Payment/
Local Call Using The Call
Free Convenience PromotionalRoaming Internet Coupon Friend Family
Messaging
Recharge
Customer
Popularity Of
RateSTD Call Rate
Network Service Paying Bills
In Connectivity Offers connectivity
Access
Availability Group Pack Kiosk Care the Company
Correlation Call Rate 1.000
Local .143 .105 .240 -.222 .203 -.123 .157 .159 .010 .045 .227 .038 .033 .101
STD Call Rate .143 1.000 .027 .033 .107 .166 .106 .424 .229 -.283 .057 -.039 -.159 .074 .122
Family Member Using
.105 .027 1.000 .271 .016 .345 .153 .103 .131 .312 .491 .116 .225 .250 .098
The Network
Free Call Service .240 .033 .271 1.000 .132 .288 .190 .344 .058 .249 .380 .216 .134 .319 .109
Convenience In Paying
-.222 .107 .016 .132 1.000 .046 .021 .125 .060 -.201 .121 -.004 .128 .189 .020
Bills
Connectivity .203 .166 .345 .288 .046 1.000 -.014 .364 .210 .044 .383 .174 .289 .444 .298
Promotional Offers-.123 .106 .153 .190 .021 -.014 1.000 .195 .088 .272 .147 .244 .105 .067 .180
Roaming connectivity
.157 .424 .103 .344 .125 .364 .195 1.000 .470 -.218 .197 .044 -.067 .338 .083
Internet Access .159 .229 .131 .058 .060 .210 .088 .470 1.000 -.113 .072 .035 -.046 .104 -.003
Recharge Coupon
.010 -.283 .312 .249 -.201 .044 .272 -.218 -.113 1.000 .148 .318 .215 .105 .129
Availability
Friend Family Group.045 .057 .491 .380 .121 .383 .147 .197 .072 .148 1.000 .295 .220 .399 .319
Messaging Pack .227 -.039 .116 .216 -.004 .174 .244 .044 .035 .318 .295 1.000 .229 .267 .444
Payment/ Recharge Kiosk -.159 .225 .134
.038 .128 .289 .105 -.067 -.046 .215 .220 .229 1.000 .383 .107
Customer Care .033 .074 .250 .319 .189 .444 .067 .338 .104 .105 .399 .267 .383 1.000 .175
Popularity Of the
.101 .122 .098 .109 .020 .298 .180 .083 -.003 .129 .319 .444 .107 .175 1.000
Company
KMO and Bartlett's Test
Kaiser-Mey er-Olkin Measure of Sampling
Adequacy . .664
Bart let t's Test of Approx. Chi-Square 343.678
Sphericity df 105
Sig. .000
The KMO value being above .500 denotes that the sample size was adequate.
The Significance being .000 denotes that there was no fraudulent data.
51
52. Communalities
Initial Extraction
Local Call Rate 1.000 .706
STD Call Rat e 1.000 .557
Family Member Using
1.000 .578
The Network
Free Call Serv ice 1.000 .451
Conv enience In Pay ing
1.000 .627
Bills
Connectiv ity 1.000 .619
Promotional Of f ers 1.000 .775
Roaming connect iv it y 1.000 .744
Internet Access 1.000 .467
Recharge Coupon
1.000 .723
Av ailabilit y
Friend Family Group 1.000 .524
Messaging Pack 1.000 .680
Pay ment/ Recharge Kiosk 1.000 .505
Customer Care 1.000 .594
Popularity Of the
1.000 .724
Company
Extraction Method: Principal Component Analy sis.
Total Variance Explained
Initial Eigenvalues Extraction Sums of Squared Loadings Rotation Sums of Squared Loadings
Component Total % of Variance Cumulativ e % Total % of Variance Cumulativ e % Total % of Variance Cumulativ e %
1 3.414 22.763 22.763 3.414 22.763 22.763 2.779 18.525 18.525
2 2.079 13.857 36.620 2.079 13.857 36.620 2.129 14.193 32.718
3 1.393 9.288 45.908 1.393 9.288 45.908 1.567 10.448 43.166
4 1.245 8.298 54.206 1.245 8.298 54.206 1.430 9.534 52.700
5 1.144 7.625 61.831 1.144 7.625 61.831 1.370 9.131 61.831
6 .917 6.111 67.942
7 .882 5.881 73.822
8 .736 4.907 78.729
9 .699 4.663 83.392
10 .561 3.741 87.133
11 .533 3.557 90.690
12 .406 2.709 93.399
13 .384 2.560 95.959
14 .326 2.172 98.131
15 .280 1.869 100.000
Extraction Method: Principal Component Analy sis.
52
53. a
Component Matrix
Component
1 2 3 4 5
Local Call Rate .273 .141 .644 -.434 -.094
STD Call Rate .202 .658 .136 .225 -.120
Family Member Using
.570 -.173 -.052 -.172 .437
The Network
Free Call Serv ice .606 -.015 .031 -.029 .287
Conv enience In Pay ing
.157 .220 -.696 .205 -.166
Bills
Connect iv ity .676 .166 -.040 -.341 -.126
Promotional Of f ers .327 -.130 .081 .754 .276
Roaming connectiv it y .494 .678 .049 .124 .150
Internet Access .288 .540 .164 .039 .253
Recharge Coupon
.295 -.686 .211 .118 .327
Av ailabilit y
Friend Family Group .698 -.109 -.155 -.027 .024
Messaging Pack .523 -.333 .299 .235 -.388
Pay ment/ Recharge Kiosk .428 -.371 -.338 -.230 -.129
Customer Care .664 .025 -.337 -.162 -.113
Popularity Of the
.469 -.135 .222 .287 -.595
Company
Extraction Method: Principal Component Analy sis.
a. 5 components extract ed.
Component Transformation Matrix
Component 1 2 3 4 5
1 .833 .307 .396 .229 .052
2 -.138 .900 -.191 -.349 -.112
3 -.311 .191 .291 .177 .867
4 -.407 .218 .357 .675 -.452
5 .156 .108 -.771 .583 .172
Extraction Method: Principal Component Analy sis.
Rotation Met hod: Varimax with Kaiser Normalization.
53
54. From the above Rotated Factor Analysis we have come out with new factors which
are the bases for selecting a network:
Factor 1-Free call services within family or a groups.
Factor 2- STD facilities and Internet Services being provided.
Factor 3- The popularity of the company.
Factor 4- Recharge booths should be located close by.
Factor 5- Local call rates should be low and payment process should be easy.
From the table of total variance explained we see the cumulative importance of
each of the above five factors. The total cumulative importances of these five
factors are 61.831%.
The individual importances of each of the factors are:
Factor 1- 18.525 %
Factor 2- 14.193%
Factor 3- 10.448%
Fator 4- 9.534%
Factor 5- 9.131%
These factors together make up the five most important factors of the analysis.
The rotated component matrix converges after 10 rotations to signify that none of
the factors are similar in nature and that the sample size is adequate.
54
55. BIBLIOGRAPHY
1.
India Today
2.
Economic Times
3.
Telecom Regulatory Authority Of India (TRAI) Annual report 2009-2010
4.
www.ibef.org/industry/telecommunications.aspx
5.
Vision2020planningcommission.nic.in/reports/genrep/bkpap2020/1_bg2020.doc
6.
http://www.indiastat.com/telecommunication/data.htm
7.
http://www.currentanalysis.com/markets/telecomindustry/?gclid=COX74bLX7KsCFcka6
wodnywLPA
8.
http://www.trai.gov.in
9.
EIS in our college library
10.
en.wikipedia.org/wiki/Communications_in_India
11.
economictimes.indiatimes.com/Market
12.
www.cci.in/pdf/surveys_reports/indias_telecom_sector.pdf
13.
http://www.dot.gov.in/osp/Brochure/Brochure.htm
14.
http://www.pppinindia.com/pdf/ppp_position_paper_telecom_122k9.pdf
15.
Company Sites www.vodafone.in and www.airtel.in exim.indiamart.com › Indian
Budget › Budget 2009-2010
16.
http://www.articlesbase.com/communication-articles/indian-telecom-industry-key-
milestones-3134671.html
17.
http://www.sibm.edu.in/Final_Pre_Budget_Analysis_2010.pdf
18.
http://www.telecomindiaonline.com/cmai-budget-recendations-for-fy-2010-11.html
55
57. QUESTIONAIRE
NAME:
AGE:
OCCUPATION:
CONTACT NUMBER:
INCOME: <10000 10000-25000 >25000 (PER MONTH)
GEOGRAPHIC LOCATION:
MONTHLY EXPENDITURE:
PREPAID POSTPAID
The Grading system followed below is as follows:
1. Not Important at All
2. Not So Important
3. Important
4. Very Important
5. Extremely important
57
58. WHILE SELECTING A CONNECTION HOW MUCH IMPORTANCE WOULD YOU GIVE TO THE FOLLOWING
FACTORS
FACTORS 1 2 3 4 5
LOCAL CALL RATES
STD CALL RATES
FAMILY MEMBERS USING A NETWORK
FREE CALL SERVICE WIYHIN THE SAME
NETWORK AND OUTSIDE THE NETWORK
CONVENIENCE IN PAYING BILLS
STRENGHT OF CONNECTIVITY(NETWORK)
FREQUENT PROMOTIONAL OFFERS
ROAMING CONNECTIVITY
INTERNET CONNECTIVITY
AVAILABILITY OF RECHARGE COUPONS
FAMILY/FRIEND GROUPS
MESSAGING PACKS
CLOSENESS OF PAYMENT/RECHARGE
KIOSK
NATURE AND EFFICIENCY OF CUSTOMER
CARE
POPULARITY OF THE COMPANY
58
59. HOW WOULD YOU RATE THE FOLLOWING FACTORS OF THE NETWORK YOU ARE CURRENTLY ON :
FACTORS 1 2 3 4 5
LOCAL CALL RATES
STD CALL RATES
FAMILY MEMBERS USING A NETWORK
FREE CALL SERVICE WIYHIN THE SAME
NETWORK AND OUTSIDE THE NETWORK
CONVENIENCE IN PAYING BILLS
STRENGHT OF CONNECTIVITY(NETWORK)
FREQUENT PROMOTIONAL OFFERS
ROAMING CONNECTIVITY
INTERNET CONNECTIVITY
AVAILABILITY OF RECHARGE COUPONS
FAMILY/FRIEND GROUPS
MESSAGING PACKS
CLOSENESS OF PAYMENT/RECHARGE
KIOSK
NATURE AND EFFICIENCY OF CUSTOMER
CARE
POPULARITY OF THE COMPANY
59
