The document discusses positioning strategies for a new telecom operator entering the Delhi/NCR region. It provides background on the Indian telecom industry and objectives for research on positioning of major existing players. The research aims to understand customer perceptions of different operators and identify strengths and personalities to help the new operator position itself distinctively.

1. INTRODUCTION

2. 1.1 Problem Statement
The first step in any marketing research calls for the researcher to define the project
scope and then define the problem carefully and then formulate the research objectives.
An old age says, “a problem well defined is half solved.” I today’s scenario where we
have numerous telecom players present in the Delhi/NCR region having similar kind of
offerings as their basic service is communication.
In this kind of scenario if a new player has to enter a crowded place like this, it has to
under go in-depth market analysis of players already present and of course the customers.
Among these studies is the study of positioning. In a telecom market like India where
there are more than two telecom operators in operations, the brand plays a major role in
making consumer preference. As more and more operators enter the market, pricing does
not remain a sustainable lever to play in long term. In order to differentiate, telecom
operators will need to look to their brand’s emotional appeal.
Research aims at finding “where and how a new player can position itself” and “what is
the difference between positioning efforts of present players.”
Research Objective
To compare the brand positioning of major telecom players having presence in
Delhi/NCR.

3. Sub Objectives
a. To find what customers think about various telecom operators on various
technical parameters.
b. To find an attribute where each operator is leading.
c. To find brand personality of major telecom players.
d. To find the brand image of major telecom players

4. INDUSTRY PROFILE
&
BACKGROUND
INFORMATION

5. 2.1 TELECOMMUNICATION
History of Indian Telecommunication
The telecom industry is one of the fastest growing industries in India. India has nearly
200 million telephone lines making it the third largest network in the world after China
and USA. With a growth rate of 45%, Indian telecom industry has the highest growth
rate.
History of Indian Telecommunications started in 1851 when the first operational land
lines were laid by the government near Calcutta (seat of British power). Telephone
services were introduced in India in 1881. In 1883 telephone services were merged with
the postal system. After independence in 1947, all the foreign telecommunication
companies were nationalized to form the Posts, Telephone and Telegraph (PTT), a
monopoly run by the government's Ministry of Communications. Telecom sector was
considered as a strategic service and the government considered it best to bring under
state.
The first wind of reforms in telecommunications sector began to flow in 1980s when the
private sector was allowed in telecommunications equipment manufacturing. In 1985,
Department of Telecommunications (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, two wholly government-owned companies were created: the
Videsh Sanchar Nigam Limited (VSNL) for international telecommunications and
Mahanagar Telephone Nigam Limited (MTNL) for service in metropolitan areas.
In 1990s, telecommunications sector benefited from the general opening up of the
economy. Also, examples of telecom revolution in many other countries, which resulted
in better quality of service and lower tariffs, led Indian policy makers to initiate a change
process finally resulting in opening up of telecom services sector for the private sector.
National Telecom Policy (NTP) 1994 was the first attempt to give a comprehensive
roadmap for the Indian telecommunications sector. In 1997, Telecom Regulatory
Authority of India (TRAI) was created. TRAI was formed to act as a regulator to

6. facilitate the growth of the telecom sector. New National Telecom Policy was adopted in
1999 and cellular services were also launched in the same year.
Telecommunication sector in India can be divided into two segments: Fixed Service
Provider (FSPs), and Cellular Services. Fixed line services consist of basic services,
national or domestic long distance and international long distance services. The state
operators (BSNL and MTNL), account for almost 90 per cent of revenues from basic
services. Private sector services are presently available in selective urban areas, and
collectively account for less than 5 per cent of subscriptions. However, private services
focus on the business/corporate sector, and offer reliable, high- end services, such as
leased lines, ISDN, closed user group and videoconferencing.
Cellular services can be further divided into two categories: Global System for Mobile
Communications (GSM) and Code Division Multiple Access (CDMA). The GSM sector
is dominated by Airtel, Vodfone-Hutch, and Idea Cellular, while the CDMA sector is
dominated by Reliance and Tata Indicom. Opening up of international and domestic long
distance telephony services are the major growth drivers for cellular industry. Cellular
operators get substantial revenue from these services, and compensate them for reduction
in tariffs on airtime, which along with rental was the main source of revenue. The
reduction in tariffs for airtime, national long distance, international long distance, and
handset prices has driven demand.
2.1.1 TELECOMMUNICATION SERVICES
Telecommunication services include Basic services, Cellular services, and Internet
provider services (ISP). Government of India plans to introduce a unified license for all
telecommunication services in India, and has already allowed full mobility to wireless in
local loop operators as a first step. Telecom services are growing at an approximate rate
of around 5 percent per years in terms of revenue and 10 percent in terms of subscribers
base in last 5 years. Among telecom services, cellular services are the fastest growing
over the past 4 years. Telecom regulatory authority of India (TRAI) expected that the

7. total number of connections would bypass the total number of fixed land line connections
by the year 2005-2007, and the same happened.
Classification of Telecommunication Services
a. Basic Services
b. Cellular Services
c. Internet Services
d. Telecommunication Equippments.
a. Basic Services
Fixed Service Providers (FSP)
Fixed Line Services include basic services, national or domestic long distance and
international long distance services. The domestic market has been growing more than 5
percent annually during the past 5 years, and has a current market size of 30,164 crores ,
with a base of 40 billion lines.
The state operators (BSNL & MTNL), account for almost 75 percent revenues from basic
services,. Private sector services are presently available in 18 circles and since they offer
and focus on the business/corporate sector, and offer reliable, high end services, such as
leased lines, closed user groups and teleconferencing, they are growing rapidly and have
acquired about 25 percent revenue generation. As a result, average-revenues-per-user
(ARPU) of private operators is more than twice those of state-owned service providers.
Growth Drivers

8. The Government has allowed unlimited competition in the basic sector. Considering the
inherent advantage of scale that the incumbent state operators have, the private
companies have, and are setting their networks very selectively and targeting corporate
clients with value added services. The government has introduced unified license for
fixed and mobile service providers. This allows all phone companies to become mobile
operators by offering cellular and land line services under a single authorization, ending
service-specific licensing.
b. Cellular Services
There are 25 private companies providing Cellular Services in 19 telecom circles and 4
metro cities, covering more than 1500 towns across the country. Presently there are 5
major private service providers in each area, and an incumbent state operator. Almost
80% of the cellular subscribers belong to the pre-paid segment.
The DoT has allowed cellular companies to buy rivals within the same operating circle
provided their combined market share did not exceed 67% . Previously they were only
allowed to buy companies outside their circle.
Regulatory Structure
The lack of clarity in the regulatory structure has made it difficult to predict the prospects
of this industry. This uncertainty has been best typified by the issuance of the fourth
license and the controversies with reference to limited mobility players. The cellular
service was thrown open for third and fourth service providers in 2002.
Growth Drivers
Opening up of domestic and International long distance telephony services are growth
drivers in the industry. Cellular operators now get substantial revenue from these
services, and compensate them for reducing tariffs on airtime, which along with rentals

9. was the main source of revenue. This reduction in tariffs on airtime, national long
distance, international long distance and handset prices, has driven demand.
c. Internet service Provider
Internet has become very easily accessible with cyber café/kiosks increasing their
density, not only in the metro towns but also in semi-urban towns. There is no restriction
on the number of internet companies and more than 185 companies are operational.
Internet telephony has been officially allowed since April 1 2002. The growing demands
of corporates for application such as E-commerce, Internet leased lines, etc is driving the
growth of internet services market. However, the industry continues a number of
bottlenecks in terms regulatory treatment of ISP’s , high bandwidth prices, low PC
penetration, high cost of telephone access,etc.
Subscribers
The total number of telephone subscribers has already crossed 241.02 million by the end
of the year 2009.as compared to 238.27 million in the year 2008. The overall teledensity
has increased to 21.02% in august 2009 as compared to 20.01% in july 2008.
In the Wireless segment,8.31 million subscribers have been added since august 2008
while 8.06 million users were added in july 2007.The total wireless subscribers base
crossed 201.29 million at the end of year 2009.
d. Telecom in India
The Indian Telecom Market has been displaying sustained high growth rates. Riding on
expectations of overall high economic growth and consequent growing income levels, it
offered an unprecedented opportunity for foreign investors. A combination of factors is
driving growth in the telecom sector, promising rich returns on investment.
India is the fourth largest telecom market in Asia after China, Japan, and South Korea.
The Indian telecom network is the 8th largest in the world and second largest among
emerging economies. The Industry has witnessed an explosive growth in recent years.
Teledensity has more than doubled from 2.3% in 1999 to to 4.8% in 2002. However, the

10. world average is almost 7.5 times and the Asian average is almost 4.5 times the Indian
average. The Indian telecom market size of over US $8 billion is expected three fold by
the year 2012.
The expansion of telecom industry in India has been fuelled by a massive growth in
mobile phone users, which has reached a level of 30million users in December 2009. This
exponential growth of the mobile telephony can be attributed to the introduction of digital
cellular technology and decrease in tariffs due to competitive pressure. For the first time
in India, the growth of cellular subscriber base exceeded the fixed line subscriber base.
However cellular penetration is still 1 percent as compared to world average of 16
percent.
2.1.2 FDI P[OLICY IN THE INDIAN TELECOM SECTOR
Foreign Direct Investment (FDI) was permitted in the telecom sector beginning with the
telecom manufacturing segment in 1991 – when India embarked on economic
liberalization. FDI is defined as investment made by non-residents in the equity capital of
the company. For the telecom sector, FDI includes investments made by Non-Residents
Indians (NRI’s), Overseas Corporate Bodies, foreign entities, Foreign Institutional
Investors, American Depository Receipts, Global Depository Receipts, etc. Present FDI
policy for the telecom sector :
1. In basic, cellular mobile, national long distance, International long distance,
Value Added Service and Global Mobile Personal Communication Satellite, FDI
is limited to 49% subject to grant of license from the Department of
Telecommunications and adherence by the companies to the license conditions
for foreign equity cap and lock-in period for transfer and addition of equity and
other license provisions.
2. Foreign Direct Investment upto 74% permitted, subjected to licensing and
security requirements for the following :
1. Internet Service(with gateways)

11. 2. Infrastructure Providers.
3. Radio Paging Service.
3. FDI upto 100% permitted in respect to the following telecom services:
i. ISP’s not providing gateways.
ii. Infrastructure providers providing dark fibers.
iii. Electronic Mail.
iv. Voice Mail.
The above is subject to the following conditions :
• FDI 100 percent is allowed subject to the condition that such companies would
divest 26 percent of their equity in favour of Indian public within 5 years, if these
companies are listed in other parts of the world.
• The above series would be subject to licensing and security requirements,
wherever required.
• Proposals for FDI beyond 49 percent shall be considered by Foreign Investment
Promotion Board (FIPB) on a case-to-case basis.
• In the manufacturing sector 100 percent FDI is permitted under the automatic
route.