The report discusses strategies for increasing market share and profitability in the Indian telecom market, particularly through acquisitions and collaborations, highlighting the need to focus on value-added services and 4G technology. It emphasizes the potential of rural markets and the importance of technological expertise from partners like NTT Docomo to maintain a competitive edge. Additionally, suggestions are made for post-paid connections to foster customer loyalty and for NTT Docomo to acquire a greater stake in the joint venture for future dominance.

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KIRLOSKAR INSTITUTE OF ADVANCED
MANAGEMENT & STUDIES
Subject: Strategic Management II
Report on – Competing in Indian Telecom Market:
The Tata DoCoMo Experience
Submitted by:
Ronik Laha
Subin Suresh
Pushpa Kumari
Varun Mani Tiwari

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Question 4:
Given the changes taking place as wellas expectedto happen in the foreseeable
future in the Indian telecom industry, how should the company develop its
strategy to increase its market share as well as profitability?
Solution:
Acquisition and collaboration with small players and other telecom giants:
Indian telecommunication market being second largest in the worlds with a market
size of 787.28 million connections (as per December 2010) and 1022.61 million in
2016 has been a center of attraction for many telecom players like Bharti Airtel,
Vodafone-Essar etc.
To increase its market share the company has to increase its presence in all 22
telecom circle in the country, therefore company will have to acquire small telecom
players in the market and collaborate with other telecom players where they did not
get the spectrum in auction. (For instance: DoCoMo collaborated with Aircel to
jointly roll out 3G network area where they both have spectrum). But the cost of
acquisition is high due to lack oftelecom policies which do nothave clear guidelines
for mergers and acquisition. As per the current guidelines if a telecom company
acquires another telecom company which holds spectrum which was allocated by
the government, the spectrum should be valued at market price and the difference is
to be paid to the government. This will push the cost of acquisition, since players
have limited spectrum quota expansion is only possible by acquiring small players.
ARPU (Average Revenue per User): The ARPU is calculated by dividing the
Revenue with that of total number of subscribers using active sim-cards. ARPU
includes revenue billed to the customers each month for the usage to increase the
VAS (Value added services) and bringing out new 4G technology in the market and
encourage consumer to buy 4G services. Another way is to decrease the number of
inactive sim which did not had and transaction for past six months.
Value Added Service (VAS): Major chunk of revenue generated by the telecom
industry is by providing VAS. The company should focus on VAS and bring out
applications that can revolutionize the lifestyle of people suchas applications like—
M-Commerce & Financials inclusion, such apps can be introduced in India in rural

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market and areas where peopleare still notfully accustomed orfamiliar with banking
and financial institutions.
Mobile number portability (MNP); enables mobile telephone users to retain their
mobile telephone numbers when changing from one mobile network operator to
another. This also applies that if you are crossing states across the country (moving
Telecom Circles), you can switch your mobile phone operatoror stay with the same
operatorin another state. This will prevent you from incurring roaming charges. This
could reduce the possibility of deactivating simcards.
Future oriented market where telecommunication industry have a wide scope
consisting of consumerdurable products whichuses internet services orconnectivity
such as wearable devices, smart phone connected cars, smart homes. The
company should also focus on public sector development programs such as smart
cities to gain more traction (increasing the consumer base). Making applications for
payment modes for public services such as parking, transportation, metro railways.
Focus on Post-paid Connection:
Company should focus on post-paid connection rather than prepaid connection they
are more loyalcustomers and is a sourceof fixed income for the company and they
can be the permanent customer for that particular company as compared to the pre-
paid customers who can easily switch to other operators.
Question 5:
Mr. Anil Sardena is aware of the joint venture life cycle and its implications to
both partners. How should he manage this partnership so that TTSL can
achieve sustainable long term advantage in this highly technology driven
industry?
Solution:
NTT DoCoMo is one of the world’s leading mobile phone operators. The company
has pioneered in evolution and development of cutting edge technologies and value
added services in mobile phones, DoCoMo has always focused on having first mover
advantage like 3G technologies, services like i-mode (for mobile internet service),

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e-wallet (enable quick contactless transactions for cash and credit), etc. has always
got benefit of first movers advantage. TTSL should take advantage of the fact and
try to acquire technological expertise from DoCoMo.
As 4G is a prevalent and a growing market as large set of customers are demanding
for more better quality and services, the company should try to acquire more 4G
operating license in major circles so as to get the first movers advantage and use
skimming pricing strategy to allocate more revenues. DoCoMo having a huge
expertise in VAS, TTSL should try to acquire knowledge in developing VAS and
must try to customize VAS as per different region and different demography where
they are catering.
Rural market being one of the largest blue ocean market which is still not explored
by the telecom industry, TTSL should learn how to develop infrastructure expertise
from DoCoMo so as to increase its penetration in the rural market using high quality
infrastructure.
One should know that an average life cycle of a joint venture is six to seven years
maximum, TTSL’s MDAnil Sardena should try to acquire maximum expertise from
NTT DoCoMo to develop their competencies and to sustain in the technology driven
competitive market.

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Question 6:
What are the options of NTT DoCoMoto dominate the joint venture in future?
Solution:
To dominate the joint venture in future NTT DoCoMo should convince
C.Sivasankaran who is the investor in the joint venture and acquire its 8% stake
which he was holding, so that the total stake of NTT DoCoMo would become 36%
(26% which DoCoMo held on investing $2.7 Billon plus 8% share of
C. Sivasankaran).
NTT DoCoMo should also invest in taking over small players in the industry so
that it could target a major chunk of the mobile users and attract them to take up
DoCoMo networks. By acquiring the small players its spectrum quota and access
to various circles would increase to a great extent.
NTT DoCoMo could build on TTSL’s knowledge of local market and ownership
of telecom licence and could easily attract with its cutting edge 3G technology
which Tata did not have. Though the telecom penetration rosein the country, there
were over 1, 50,000 villages in India beyond the reach of mobile signals—so it is a
very good opportunity for NTT DoCoMo to tap into those places and increase its
visibility and capture the market.
According to the case facts, DoCoMo was interested in increasing stake and TTSL
was most likely to reduce its majority stake slowly till it held a minority stake in
Tata Teleservices, so DoCoMo should try and acquire the majority of TTSL’s
stake and enjoy the benefits and increase market visibility.
Related Case fact taken from:-
http://www2.deloitte.com/us/en/pages/technology-media-and-
telecommunications/articles/telecommunications-industry-outlook.html
http://telecom.economictimes.indiatimes.com/news/policy/telecom-industry-seeks-
mergers-and-acquisitions-policy-revision/47967459
http://articles.economictimes.indiatimes.com/2015-07-
07/news/64177783_1_vodafone-india-sandeep-karanwal-spectrum

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