Project On Consumer Behaviour Towards Spice Telecom

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1.1INDIAN TELECOM INDUSTRY 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. Indian Radio Telegraph Company (IRT) was formed in 1923. 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's control. 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 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, 1|Page

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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, Vodafone-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. The telecom sector is also afflicted by a number of restraints. These include: •

Sluggish pace of reform process.

•

Lack of infrastructure in semi-rural and rural areas, which makes it difficult to make inroads into this market segment as service providers have to incur a huge initial fixed cost.

•

Limited spectrum availability.

But notwithstanding these constraints, telecom sector has undergone a revolution in the past decade and has played a major part in bridging the rural-urban divide. 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 in the world.

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The telecom network in India is the fifth largest network in the world meeting up with global standards. Presently, the Indian telecom industry is currently slated to an estimated contribution of nearly 1% to India’s GDP. The Indian Telecommunications network with 110.01 million connections is the fifth largest in the world and the second largest among the emerging economies of Asia. Today, it is the fastest growing market in the world and represents unique opportunities for U.S. companies in the stagnant global scenario. The total subscriber base, which has grown by 40% in 2005, is expected to reach 250 million in 2007. According to Broadband Policy 2004, Government of India aims at 9 million broadband connections and 18 million internet connections by 2007. The wireless subscriber base has jumped from 33.69 million in 2004 to 62.57 million in FY20042005. In the last 3 years, two out of every three new telephone subscribers were wireless subscribers. Consequently, wireless now accounts for 54.6% of the total telephone subscriber base, as compared to only 40% in 2003. Wireless subscriber growth is expected to bypass 2.5 million new subscribers per month by 2007. The wireless technologies currently in use are Global System for Mobile Communications (GSM) and Code Division Multiple Access (CDMA). There are primarily 9 GSM and 5 CDMA operators providing mobile services in 19 telecom circles and 4 metro cities, covering 2000 towns across the country. Evolution of the industry-Important Milestones History of Indian Telecommunications Year •

1851 First operational land lines were laid by the government near Calcutta (seat

of British power) •

1881 Telephone service introduced in India

•

1883 Merger with the postal system

•

1923 Formation of Indian Radio Telegraph Company (IRT)

•

1932 Merger of ETC and IRT into the Indian Radio and Cable Communication

Company (IRCC) •

1947 Nationalization of all foreign telecommunication companies to form the 3|Page

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Posts, Telephone and Telegraph (PTT), a monopoly run by the government's Ministry of Communications •

1985 Department of Telecommunications (DOT) established, an exclusive provider of domestic and long-distance service that would be its own regulator (separate from the postal system)

•

1986 Conversion of DOT into two wholly government-owned companies: the Videsh Sanchar Nigam Limited (VSNL) for international telecommunications and Mahanagar Telephone Nigam Limited (MTNL) for service in metropolitan areas.

•

1997 Telecom Regulatory Authority of India created.

•

1999 Cellular Services are launched in India. New National Telecom Policy is adopted.

•

2000 DoT becomes a corporation, BSNL

Major Players There are three types of players in telecom services: • -State owned companies (BSNL and MTNL) • -Private Indian owned companies (Reliance Infocomm, Tata Teleservices,) • -Foreign invested companies (Hutchison-Essar, Bharti Tele-Ventures, Escotel, Idea Cellular, BPL Mobile, Spice Communications) BSNL On October 1, 2000 the Department of Telecom Operations, Government of India became a corporation and was renamed Bharat Sanchar Nigam Limited (BSNL). BSNL is now India’s leading telecommunications company and the largest public sector undertaking. It has a network of over 45 million lines covering 5000 towns with over 35 million telephone connections. The state-controlled BSNL operates basic, cellular (GSM and CDMA) mobile, Internet and long distance services throughout India (except Delhi and Mumbai). BSNL will be expanding the network in line with the Tenth Five-Year Plan (1992-97). The aim is to provide a telephone density of 9.9 per hundred by March 2007. BSNL, which became the third operator of GSM mobile services in most circles, is now planning to overtake Bharti to become the largest GSM operator in the country.

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BSNL is also the largest operator in the Internet market, with a share of 21 per cent of the entire subscriber base. BHARTI Established in 1985, Bharti has been a pioneering force in the telecom sector with many firsts and innovations to its credit, ranging from being the first mobile service in Delhi, first private basic telephone service provider in the country, first Indian company to provide comprehensive telecom services outside India in Seychelles and first private sector service provider to launch National Long Distance Services in India. Bharti TeleVentures Limited was incorporated on July 7, 1995 for promoting investments in telecommunications services. Its subsidiaries operate telecom services across India. Bharti’s operations are broadly handled by two companies: the Mobility group, which handles the mobile services in 16 circles out of a total 23 circles across the country; and the Infotel group, which handles the NLD, ILD, fixed line, broadband, data, and satellitebased services. Together they have so far deployed around 23,000 km of optical fiber cables across the country, coupled with approximately 1,500 nodes, and presence in around 200 locations. The group has a total customer base of 6.45 million, of which 5.86 million are mobile and 588,000 fixed line customers, as of January 31, 2004. In mobile, Bharti’s footprint extends across 15 circles. Bharti Tele-Ventures' strategic objective is “to capitalize on the growth opportunities the company believes are available in the Indian telecommunications market and consolidate its position to be the leading integrated telecommunications services provider in key markets in India, with a focus on providing mobile services”.

MTNL

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MTNL was set up on 1st April 1986 by the Government of India to upgrade the quality of telecom services, expand the telecom network, and introduce new services and to raise revenue for telecom development needs of India’s key metros – Delhi, the political capital, and Mumbai, the business capital. In the past 17 years, the company has taken rapid strides to emerge as India’s leading and one of Asia’s largest telecom operating companies. The company has also been in the forefront of technology induction by converting 100% of its telephone exchange network into the state-of-the-art digital mode. The Govt. of India currently holds 56.25% stake in the company. In the year 2003-04, the company's focus would be not only consolidating the gains but also to focus on new areas of enterprise such as joint ventures for projects outside India, entering into national long distance operation, widening the cellular and CDMA-based WLL customer base, setting up internet and allied services on an all India basis. MTNL has over 5 million subscribers and 329,374 mobile subscribers. While the market for fixed wire line phones is stagnating, MTNL faces intense competition from the private players—Bharti, Hutchison and Idea Cellular, Reliance Infocomm—in mobile services. MTNL recorded sales of Rs. 60.2 billion ($1.38 billion) in the year 2002-03, a decline of 5.8 per cent over the previous year’s annual turnover of Rs. 63.92 billion.

RELIANCE INFOCOMM Reliance is a $16 billion integrated oil exploration to refinery to power and textiles conglomerate (Source: http://www.ril.com/newsitem2.html). It is also an integrated telecom service provider with licenses for mobile, fixed, domestic long distance and international services. Reliance Infocomm offers a complete range of telecom services, covering mobile and fixed line telephony including broadband, national and international long distance services, data services and a wide range of value added services and applications. Reliance India Mobile, the first of Infocomm initiatives was launched on December 28, 2002. This marked the beginning of Reliance's vision of ushering in a digital revolution in India by becoming a major catalyst in improving quality of life and changing the face of India. Reliance Infocomm plans to extend its efforts beyond the traditional value chain to develop and deploy telecom solutions for India's farmers, 6|Page

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businesses, hospitals, government and public sector organizations. Until recently, Reliance was permitted to provide only “limited mobility” services through its basic services license. However, it has now acquired a unified access license for 18 circles that permits it to provide the full range of mobile services. It has rolled out its CDMA mobile network and enrolled more than 6 million subscribers in one year to become the country’s largest mobile operator. It now wants to increase its market share and has recently launched pre-paid services. Having captured the voice market, it intends to attack the broadband market.

TATA TELESERVICES Tata Teleservices is a part of the $12 billion Tata Group, which has 93 companies, over 200,000 employees and more than 2.3 million shareholders. Tata Teleservices provides basic (fixed line services), using CDMA technology in six circles: Maharashtra (including Mumbai), New Delhi, Andhra Pradesh, Tamil Nadu, Gujarat, and Karnataka. It has over 800,000 subscribers. It has now migrated to unified access licenses, by paying a Rs. 5.45 billion ($120 million) fee, which enables it to provide fully mobile services as well. The company is also expanding its footprint, and has paid Rs. 4.17 billion ($90 million) to DoT for 11 new licenses under the IUC (interconnect usage charges) regime. The new licenses, coupled with the six circles in which it already operates, virtually gives the CDMA mobile operator a national footprint that is almost on par with BSNL and Reliance Infocomm. The company hopes to start off services in these 11 new circles by August 2004. These circles include Bihar, Haryana, Himachal Pradesh, Kerala, Kolkata, Orissa, Punjab, Rajasthan, Uttar Pradesh (East) & West and West Bengal.

VSNL

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On April 1, 1986, the Videsh Sanchar Nigam Limited (VSNL) - a wholly Government owned corporation - was born as successor to OCS. The company operates a network of earth stations, switches, submarine cable systems, and value added service nodes to provide a range of basic and value added services and has a dedicated work force of about 2000 employees. VSNL's main gateway centers are located at Mumbai, New Delhi, Kolkata and Chennai. The international telecommunication circuits are derived via Intelsat and Inmarsat satellites and wide band submarine cable systems e.g. FLAG, SEAME-WE-2 and SEA-ME-WE-3. The company's ADRs are listed on the New York Stock Exchange and its shares are listed on major Stock Exchanges in India. The Indian Government owns approximately 26 per cent equity, M/s Panatone Finvest Limited as investing vehicle of Tata Group owns 45 per cent equity and the overseas holding (inclusive of FIIs, ADRs, Foreign Banks) is approximately 13 per cent and the rest is owned by Indian institutions and the public. The company provides international and Internet services as well as a host of value-added services. Its revenues have declined from Rs. 70.89 billion ($1.62 billion) in 2001-02 to Rs. 48.12 billion ($1.1 billion) in 2002-03, with voice revenues being the mainstay. To reverse the falling revenue trend, VSNL has also started offering domestic long distance services and is launching broadband services. For this, the company is investing in Tata Telservices and is likely to acquire Tata Broadband. HUTCH Hutch’s presence in India dates back to late 1992, when they worked with local partners to establish a company licensed to provide mobile telecommunications services in Mumbai. Commercial operations began in November 1995. Between 2000 and March 2004, Hutch acquired further operator equity interests or operating licences. With the completion of the acquisition of BPL Mobile Cellular Limited in January 2006, it now provides mobile services in 16 of the 23 defined license areas across the country. Hutch India has benefited from rapid and profitable growth in recent years. it had over 17.5 million customers by the end of June 2006. IDEA 8|Page

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Indian regional operator IDEA Cellular Ltd. has a new ownership structure and grand designs to become a national player, but in doing so is likely to become a thorn in the side of Reliance Communications Ltd. IDEA operates in eight telecom “circles,” or regions, in Western India, and has received additional GSM licenses to expand its network into three circles in Eastern India -- the first phase of a major expansion plan that it intends to fund through an IPO, according to parent company Aditya Birla Group .

COMPANY MARKET SHARES Company Million Subs (Nov 2007) % share •

BSNL 40.3 58.8

•

Reliance 6.1 8.9

•

Bharti 5.7 8.3

•

MTNL 4.9 7.2

•

Hutchison 2.9 4.2

•

Idea Cellular 2.1 3.0

•

BPL 1.4 2.1

•

Tata Teleservices 1.3 1.9

•

Spice 1.0 1.4

•

Escotel 0.8 1.1

•

Fascel 0.8 1.1

•

Aircel 0.9 1.4

•

Hexacom 0.2 0.3

•

Shyam Telelink 0.1 0.2

Telecom Policy Environment Indian telecommunications today benefits from among the most enlightened regulation in the region, and arguably in the world. The sector, sometimes considered the “poster-boy 9|Page

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for economic reforms,” has been among the chief beneficiaries of the post-1991 liberalization. Unlike electricity, for example, where reforms have been stalled, telecommunications has generally been seen as removed from “mass concerns,” and thus less subject to electoral calculations. Market oriented reforms have also been facilitated by lobbying from India’s booming technology sector, whose continued success of course depends on the quality of communications infrastructure. Despite several hiccups along the way, the Telecom Regulatory Authority of India (TRAI), the independent regulator, has earned a reputation for transparency and competence. With the recent resolution of a major dispute between cellular and fixed operators (see below), Indian telecommunications, already among the most competitive markets in the world, appears set to continue growing rapidly. While telecom liberalization is usually associated with the post-1991 era, the seeds of reform were actually planted in the 1980s. At that time, Rajiv Gandhi proclaimed his intention of “leading India into the 21 st century,” and carved the Department of Telecommunications (DOT) out of the Department of Posts and Telegraph. For a time he also even considered corporatizing the DOT, before succumbing to union pressure. In a compromise, Gandhi created two DOT-owned corporations: Mahanagar Telephone Nigam Limited (MTNL), to serve Delhi and Bombay, and Videsh Sanchar Nigam Limited (VSNL), to operate international telecom services. He also introduced private capital into the manufacturing of telecommunications equipment, which had previously been a DOT monopoly. These and other reforms were limited by the unstable coalition politics of the late 1980s. It was not until the early 1990s, when the political situation stabilized, and with the general momentum for economic reforms, that telecommunications liberalization really took off. In 1994, the government released its National Telecommunications Policy (NTP-94), which allowed private fixed operators to take part in the Indian market for the first time (cellular operators had been allowed into the four largest metropolitan centers in 1992). Under the government’s new policy, India was divided into 20 circles roughly corresponding to state boundaries, each of which would contain two fixed operators (including the incumbent), and two mobile operators. As ground-breaking as NTP-94 was, its implementation was unfortunately marred by regulatory uncertainty and over-bidding. A number of operators were unable to live up to their profligate bids and, confronted with far less lucrative networks than 10 | P a g e

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they had supposed, pulled out of the country. As a result, competition in India’s telecom sector did not really become a reality until 1999. At that time the government’s New Telecommunications Policy (NTP-99) switched from a fixed fee license to a revenue sharing regime of approximately 15%. This figure has subsequently been lowered (to 10%-12%), and is expected to be reduced even further over the coming years. Still, India continues to derive substantial revenue from license fees ($800 million in 20012002); leading some critics to suggest that the government has abrogated its responsibilities as a regulator to those as a seller. Another, perhaps even more significant, problem with India’s initial attempts to introduce competition was the lack of regulatory clarity. Private operators complained that the licensor – the DOT – was also the incumbent operator. The many stringent conditions attached to licenses were thus seen by many as the DOT’s attempt to limit competition. It was in response to such concerns that the government in 1997 set up the Telecom Regulatory Authority of India (TRAI), the nation’s first independent telecom regulator. Over the years, TRAI has earned a growing reputation for independence, transparency and an increasing level of competence. Early on, however, the regulator was beleaguered on all fronts. It had to contend with political interference, the incumbent’s many challenges to its authority, and accusations of ineptitude by private players. Throughout the late 1990s, TRAI’s authority was steadily whittled away in a number of cases, when the courts repeatedly held that regulatory power lay with the central government. It was not until 2000, with the passing of the TRAI Amendment Act that the regulatory body really came into its own. Coming just a year after NTP-99, the act marks something of a watershed moment in the history of India telecom liberalization. It set the stage for several key events that have enabled the vigorous competition witnessed today. Some of these events include: • The corporatization of the DOT and the creation of a new state-owned telecom company, Bharat Sanchar Nigam Ltd (BSNL), in 2000; • The opening up of India’s internal long-distance market in 2000, and the subsequent drop in long-distance rates as part of TRAI’s tariff rebalancing exercise;

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• The termination of VSNL’s monopoly over international traffic in 2002, and the partial privatization of the company that same year, with the Tata group assuming a 25% stake and management control; • The gradual easing of the original duopoly licensing policy, allowing a greater number of operators in each circle; • The legalization, in 2002, of IP telephony (a move that many believe was held up due to lobbying by VSNL, which feared the consequences on its international monopoly); The introduction in 2003 of a Calling Party Pays (CPP) system for cell phones, despite considerable opposition (including litigation) by fixed operators; • And, more generally, the commencement of more stringent interconnection regulation by TRAI, which has moved from an inter operator “negotiations-based” approach (often used by the stronger operator to negotiate ad infinitum) to a more rules-based approach. All of these events have created an impressive forward-momentum in Indian telecommunications, resulting in a vigorously competitive and fast-growing sector. India has also suffered from its fair share of regulatory hiccups. Many operators (mobile players in particular) still complain about the difficulties of gaining access to the incumbent’s (BSNL) network, and the government’s insistence on capping FDI in the telecom sector to 49% (a move made in the name of national security) limits capital availability and thus network rollout. In addition, ISPs, who were allowed into the market under a liberal licensing regime in 1998, continue to hemorrhage money, and have been pleading with the government for various forms of relief, including the provision of unmetered phone numbers for Internet access. Despite initially impressive results, the growth of Internet in the country has recently stalled, with only 8 million users. Broadband penetration, too, remains tiny. Unified Licensing But perhaps the biggest – and, until recently, most intractable – regulatory problem has been the drawn-out battle over “limited mobility” telephony. This imbroglio began in 1999, when MTNL sought permission from TRAI to provide CDMA-based WLL services with “limited mobility.” GSM cellular operators were soon up in arms, arguing that “limited mobility” was simply a backdoor entry into their business. Moreover, fixed 12 | P a g e

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operators had paid lower license and spectrum fees than cellular ones; were not required to pay access charges for cell-to-fixed calls (unlike their cellular counterparts); and, amidst accusations of cross-subsidization, were charging considerably lower rates than the cellular operators. The resulting conflict dragged on in the courts and in the political arena for years. Fixed operators including new entrants Reliance and Tata Teleservices claimed that they were being prevented from providing a cheap service that would drive penetration and be of benefit to the “common man”; cellular players bitterly opposed what they perceived as unequal regulatory treatment for two kinds of operators who were in fact offering the same service. The real victim, of course, was the Indian telecommunications market, which suffered from investor perceptions of regulatory confusion and operator in-fighting. In late 2002, for example, thousands of mobile users in New Delhi were for a time cut off from the fixed-line network when MTNL shut down interconnection for cellular companies. (MTNL later attributed the incident to a “technical snag.”) It was not until late 2003 that the issue was finally resolved, under considerable government pressure, when cellular operators agreed to withdraw their many cases against the fixed-line operators. Fixed operators would in effect be allowed to enter the mobile business; in return, the government granted cellular players several concessions, including lower revenue-share arrangements estimated to total over $210 million. Perhaps most notably, the government announced its intention to adopt a “unified access licensing” regime, which would in the future provide a single, technology-neutral license for fixed and cellular operators. The hope is that this new license category will prevent a repeat of the recent controversy, and allow new technologies to enter the Indian market without requiring a wholesale rewrite of licensing laws. MAJOR MARKET TRENDS The telecoms trends in India will have a great impact on everything from the humble PC, internet, broadband (both wireless and fixed), and cable, handset features, talking SMS, IPTV, soft switches, and managed services to the local manufacturing and supply chain. This report discusses key trends in the Indian telecom industry, their drivers and the 13 | P a g e

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major impacts of such trends affecting mobile operators, infrastructure and handset vendors. Higher acceptance for wireless services Indian customers are embracing mobile technology in a big way (an average of four million subscribers added every month for the past six months itself). They prefer wireless services compared to wire-line services, which is evident from the fact that while the wireless subscriber base has increased at 75 percent CAGR from 2001 to 2006, the wire-line subscriber base growth rate is negligible during the same period. In fact, many customers are returning their wire-line phones to their service providers as mobile provides a more attractive and competitive solution. The main drivers for this trend are quick service delivery for mobile connections, affordable pricing plans in the form of prepaid cards and increased purchasing power among the 18 to 40 years age group as well as sizeable middle class – a prime market for this service. Some of the positive impacts of this trend are as follows. According to a study, 18 percent of mobile users are willing to change their handsets every year to newer models with more features, which is good news for the handset vendors. The other impact is that while the operators have only limited options to generate additional revenues through value-added services from wireline services, the mobile operators have numerous options to generate non-voice revenues from their customers. Some examples of value-added services are ring tones download, colored ring back tones, talking SMS, mobisodes (a brief video programme episode designed for mobile phone viewing) etc. Moreover, there exists great opportunity for content developers to develop applications suitable for mobile users like mobile gaming, location based services etc. On the negative side, there is an increased threat of virus – spread through mobile data connections and Bluetooth technology – in mobile phones, making them unusable at times. This is good news for anti-virus solution providers, who will gain from this trend. MERGERS

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Demand for new spectrum as the industry grows and the fact the spectrum allocation in done on the basis of number of subscribers will force companies to merge so as to claim large number of subscribers to gain more spectrum as a precursor to the launch of larger and expanded services. However it must also be noted that this may very well never happen on account of low telecom penetration. NEW CIRCLES As mentioned earlier there is a significant number of tier-2 and tier 3 cities that can accommodate more players we expect aggressive response by the companies to such opportunities as and when they are created. Constraints: � Slow pace of the reform process . � It would be difficult to make in-roads into the semi-rural and rural areas because of the lack of infrastructure. The service providers have to incur a huge initial fixed cost to make inroads into this market. Achieving break-even under these circumstances may prove to be difficult. � The sector requires players with huge financial resources due to the above mentioned constraint. Upfront entry fees and bank guarantees represent a sizeable share of initial investments. While the criteria are important, it tends to support the existing big and older players. Financing these requirements require a little more liberal approach from the policy side. � Problem of limited spectrum availability and the issue of interconnection charges between the private and state operators.

1.1CURRENT SCENARIO Yes, that’s true. Indian telecommunication Industry is one of the fastest growing telecom markets in the world. The mobile sector has grown from around 10 million subscribers in 2002 to reach 350 million by early 2009 registering an average growth 15 | P a g e

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of over 90%. The two major reasons that have fuelled this growth are low tariffs coupled with falling handset prices. Surprisingly, CDMA market has increased it market share up to 30% thanks to Reliance Communication. However, across the globe, CDMA has been loosing out numbers to popular GSM technology, contrary to the scenario in India. The other reason that has tremendously helped the telecom Industry is t he regulatory changes and reforms that have been pushed for last 10 years by successive Indian governments. According to Telecom Regulatory Authority of India (TRAI) the rate of market expansion would increase with further regulatory and structural reforms. Even though the fixed line market share has been dropping consistently, the overall (fixed and mobile) subscribers have risen to more than 200 million by first quarter of 2007. The telecom reforms have allowed the foreign telecommunication companies to enter Indian market which has still got huge potential. International telecom companies like Vodafone have made entry into Indian market in a big way. Currently the Indian Telecommunication market is valued at around $100 billion (Rupees 400,000 crore). Two telecom players dominate this market - Bharti Airtel with 27% market share and Reliance Communication with 20% along with other players like BSNL (Bharat Sanchar Nigam Limited) and AT&T. One segment of the market that has been puzzling is broadband Internet. Despite the manner in which the countries Internet market has been booming, India’s move into highspeed broadband Internet access has been distinctly slow. And, while there appears to be considerable enthusiasm amongst the population for the Internet itself, this has not been reflected in broadband subscription numbers. In 2006 India witnessed a good surge in broadband users with the total subscriber base in the country expanding by almost 200% to just over 2 million by years end. Despite this surge, broadband penetration in India still remains around only 0.2%; broadband services still account for only 25% of the total Internet subscriber base, still in itself comparatively low. The Ministry of Communications and Information Technology (MCIT) is has very aggressive plans to increase the pace of growth, targeting 250 million telephone subscribers by end-2007 and 500 million by 2010. Most of the expansion in subscribers is set to occur in rural India. India’s rural telephone density has been languishing at around 1.9%;

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so, if 70% of total population is rural, the scope for growth in this Industry is unprecedented. GSM and CDMA subscription numbers: CDMA GSM Subscribers GSM Annual CDMA Subscribers Year Annual (millions) growth (millions) growth 2000 3.1

94%

-

-

2001 5.05

76%

-

-

2002 10.5

91%

0.8

-

2003 22.0

110%

6.4

700%

2004 37.4

70%

10.9

70%

2005 58.5

57%

19.1

75%

2006 105.4

80%

44.2

131%

2007 180.0

71%

85.0

92%

1.3 MARKET-SIZE, PLAYERS AND TRENDS Today, India has the eighth largest telecom network in the world, which is growing at an overall rate of over 20 per cent. As of May 2004, India had about 43 million fixed lines and 36 million wireless subscribers contributing to the total tele-density of about 7 %. According to Morgan Stanley, the total revenue from the Indian telecom market in financial year 2003 was estimated to be about US$ 9.2 billion. Presently, wireline service contribute about half of the total service revenues. Over the next 5-8 years, however, their contribution is expected to fall to about 30 per cent and wireless services are expected to contribute half the industry revenue. Data revenue is expected to increase from 2 per cent to 8 per cent of total revenues.

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1.4 TELECOM INDUSTRY SCENARIO IN REST OF THE WORLD

Two major factors responsible for the growth of telecommunications industry are use of modern technology and market competition. One of the products of modern technologies is optical fibers, which are being used as a medium of data transmission instead of using coaxial or twisted pair cables. Optical fibers can carry a high volume of data and are easier to maintain and install. Use of communication satellites makes this telecommunications industry a booming industry. The use of mobile network has a crucial role behind the growth of an improved telecommunications industry. Leading companies are showing their interest to invest in this telecommunications industry.

Telecommunications industry is going to be a

digitized one. Use of ISDN (Inter Services Digital Network) makes this telecommunication industry a total digitalized system and eventually enhanced the speed and quality of digital communication.

The introduction of these advanced technologies makes the telecommunications industry a competitive one, where a number of multinational companies have shown their interest to invest in this industry and consequently the prices are reduced, the quality is also improved. During the period of 1990, the telecommunication industry showed a speedy growth in terms of investment and eventually increased the competition. The competition between the companies led to the decline of revenues. World telecom industry is an uprising industry, proceeding towards a goal of achieving two third of the world's telecom connections. Over the past few years information and communications technology has changed in a dramatic manner and as a result of that

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world telecom industry is going to be a booming industry. Substantial economic growth and mounting population enable the rapid growth of this industry.

Research works associated with world telecommunication industry: A number of research works are being carried out all over the world to improve the quality and speed of transmission. Research works are also done on the basis of the users' needs. The objective of the research work is to provide quality and affordable service to the consumers. Market potentiality of world telecommunication industry: The world telecommunications market is expected to rise at an 11 percent compound annual growth rate at the end of year 2010. The leading telecom companies like AT&T, Vodafone, Verizon, SBC Communications, Bell South, and Qwest Communications are trying to take the advantage of this growth. These companies are working on telecommunication fields like broadband technologies, EDGE(Enhanced Data rates for Global Evolution) technologies, LAN-WAN inter networking, optical networking, voice over Internet protocol, wireless data service etc. Economical aspect of telecommunication industry: World telecom industry is taking a crucial part of world economy. The total revenue earned from this industry is 3 percent of the gross world products and is aiming at attaining more revenues. One statistical report reveals that approximately 16.9% of the world population has access to the Internet. Present market scenario of world telecom industry: Over the last couple of years, world telecommunication industry has been consolidating by allowing private organizations the opportunities to run their businesses with this industry. The Government monopolies are now being privatized and consequently

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competition is developing. Among all, the domestic and small business markets are the hardest.

Statistical report Phoenix Center research revealed that in the coming years, there will be a healthy competition among the providers of telecommunication services. At the same time, the price will be lower and quality will be higher. The new telecommunications technologies will replace the traditional telecom services. Statistical data also reveals that the telecommunications industry is going to be a dynamic and booming industry in the near future. The telecom industry comprises of complex network of services like telephones, mobile phones and internet services. Telecom industry trends Throughout the world, telecom industries are being controlled by private companies instead of government monopolies. Traditional telecom technologies are also being replaced by modern wireless technologies, specifically in case of mobile services. One of the major objectives of telecom industry is to enhance the quality and speed of Internet technology.

These days, telecom industry is more concerned with texts and images (Internet technologies), rather than voice (telephone service). Most of the research works are going on Internet accessibility, specifically on data applications and broadband services. The other major division of telecom industry is mobile network sector, where lots of innovative research works are going on. Previously the traditional telephone calls used to earn the maximum revenues, but these days mobile service is going to replace traditional telephone services. Telecom industry analysis from the expert’s point of view

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Telecom industry is a vast and diversified industry and needs a huge capital to invest. That is why the competitors of this industry should be such that they can meet that demand. From the investor's point of view, it can be said that they should be well aware of cash flow in this industry. 1.5 COMPANY PROFILE About Bharti Airtel Telecom giant Bharti Airtel is the flagship company of Bharti Enterprises. The Bharti Group, has a diverse business portfolio and has created global brands in the telecommunication sector. Bharti has recently forayed into retail business as Bharti Retail Pvt. Ltd. under a MoU with Wal-Mart for the cash & carry business. It has successfully launched an international venture with EL Rothschild Group to export fresh agri products exclusively to markets in Europe and USA and has launched Bharti AXA Life Insurance Company Ltd under a joint venture with AXA, world leader in financial protection and wealth management. Airtel comes to you from Bharti Airtel Limited, India’s largest integrated and the first private telecom services provider with a footprint in all the 23 telecom circles. Bharti Airtel since its inception has been at the forefront of technology and has steered the course of the telecom sector in the country with its world class products and services. The businesses at Bharti Airtel have been structured into three individual strategic business units (SBU’s) - Mobile Services, Airtel Telemedia Services & Enterprise Services. The mobile business provides mobile & fixed wireless services using GSM technology across 23 telecom circles while the Airtel Telemedia Services business offers broadband & telephone services in 94 cities. The Enterprise services provide end-to-end telecom solutions to corporate customers and national & international long distance services to carriers. All these services are provided under the Airtel brand. Bharti Group •

Turnover : Rs 6000 Crore

•

Employees : 8000 +

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Market Capitalization Rs. 673 billion Approx.

•

Mobility Voice & Data Services across all India footprint covering all 23 telecom circles of the country.

•

National Long Distance : Fiber Optic Backbone across India.

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Fixed-line Telephony across 5 states in Phase I

•

International Bandwidth Connectivity –

7 Ku Band Satellite Earth Stations

–

I2i Undersea Fiber from Singapore to Chennai

Bharti Airtel is one of India's leading private sector providers of telecommunications services based on an aggregate of 64,268,047 customers as on March 31, 2008, consisting of 61,984,721 GSM mobile and 2,283,326 Bharti Telemedia subscribers. The businesses at Bharti Airtel have been structured into three individual strategic business units (SBU’s) - mobile services, telemedia services (ATS) & enterprise services. The mobile services group provides GSM mobile services across India in 23 telecom circles, while the ATS business group provides broadband & telephone services in 94 cities. The enterprise services group has two sub-units - carriers (long distance services) and services to corporates. All these services are provided under the Airtel brand. Company shares are listed on The Stock Exchange, Mumbai (BSE) and The National Stock Exchange of India Limited (NSE). Partners The company has a strategic alliance with SingTel. The investment made by SingTel is one of the largest investments made in the world outside Singapore, in the company. The company’s mobile network equipment partners include Ericsson and Nokia. In the case of the broadband and telephone services and enterprise services (carriers), equipment suppliers include Siemens, Nortel, Corning, among others. The Company also

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has an information technology alliance with IBM for its group-wide information technology requirements and with Nortel for call center technology requirements. The call center operations for the mobile services have been outsourced to IBM Daksh, Hinduja TMT, Teletech & Mphasis. Company Background Bharti Airtel Limited, a part of Bharti Enterprises, is India’s leading provider of telecommunications services. The businesses at Bharti Airtel have been structured into three individual strategic business units (SBU’s) – mobile services, broadband & telephone services (B&T) & enterprise services. The mobile services group provides GSM mobile services across India in 23 telecom circles, while the B&T business group provides broadband & telephone services in 94 cities. The Enterprise services group has two sub-units – carriers (long distance services) and services to corporate. All these services are provided under the Airtel brand. Sunil Bharti Mittal or SBM as he is called has at the age of 43 created a Telecom Giant in India. It has risen from humble beginnings in 1970’s as bicycle parts manufacturer, knitwear and stainless steel utensils in Ludhiana, Punjab state. Together with other foreign companies he has raised $ 1.5 billion of which $ 800 million is still in the bank. Bharti happens to be India’s premier telecom company in the field of telecom terminals and technology tie ups with world leaders like “ Siemens, Goldstar, Tatacom and Casio. It is the first company in India to export telephones to U.S.A and has finalized plans to manufacture GSM terminals in India. Bharti Enterprises controls about 20% of the Total Telecom market in India. As he puts it, it was a mixture of vision, good luck and hard work by a team of about 10 – 12 senior people. The early beginnings in 1985 were in manufacturing telephone handsets. They did not have the expertise to do telephone exchanges, jelly- filled cables had become a commodity and their capital investment was high. Bharti Tele-Ventures Limited was incorporated on July 7, 1995 for promoting investments in telecommunications services. Its subsidiaries operate telecom services 23 | P a g e

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across India. Bharti Tele-Ventures is India’s leading private sector provider of telecommunications services based on a strong customer base consisting of approximately 11.50 million total customers which constitute, approximately 10.66 million mobile and approximately 836,000 fixed line customers, as of January 31, 2005. Milestones Telecom Services •

Largest Private Telecom Service Provider in India- more than 150,00,000 subscribers.

•

AIRTEL – Biggest footprint in India covering 23 states and largest GSM network with over 140,00,000 users in India.

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First & Largest Pvt. Company to launch Fixed line Service in 15 states in India starting Madhya Pradesh – Over 20,00,000 subs.

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First & only Indian company to operate Telecom Services outside India – Seychelles.

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First Private company to have Fiber Gateway for Data & Voice at Chennai & 7 Ku Band Gateway for Internet bandwidth.

Airtel is the largest cellular service provider in India in terms of number of subscribers. Bharti Airtel owns the Airtel brand and provides the following services under the brand name Airtel: Mobile Services (using GSM Technology), Broadband & Telephone Services (Fixed line, Internet Connectivity(DSL) and Leased Line), Long Distance Services and Enterprise Services (Telecommunications Consulting for corporate). It has presence in all 23 circles of the country and has the covers 71% of the current population till FY07. Leading international telecommunication companies such as Vodafone and SingTel held partial stakes in Bharti Airtel. In April 2006 Bharti Global Limited was awarded a telecommunications license in Jersey in the Channel Islands by the local telecommunications regulator the JCRA. In 24 | P a g e

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September 2006 the Office of Utility Regulation in Guernsey awarded Guernsey Airtel with a mobile telecommunications license. In May 2007 Jersey Airtel and Guernsey Airtel announced the launch of a relationship with Vodafone for island mobile subscribers. In July 2007, Bharti Airtel signed a MoU with Nokia-Siemens for a 900 million dollar expansion of its mobile and fixed network. In August 2007, the company announced it will be launching a customized version of Google search engine that will provide an 'array of services' to its broadband customers. In March 2008, Bharti Airtel will roll out third generation services in Sri Lanka in association with SingTel. This is because Singapore-based Asian telecom major SingTel, which owns a little over 30% in Bharti Airtel, is a major player in the 3G space as it has already third generation networks in several markets across Asia. Touchtel Until September 18, 2004, Bharti provided fixed-line telephony and broadband services under the Touchtel brand. Bharti now provides all telecom services including fixed-line services under a common brand "Airtel" Apple's iPhone 3G Apple has announced launch of its new iPhone in US and other 25 countries on July 11th 2008, it is soon to be launched in India as well with Bharti. BlackBerry On 19th October 2004 Airtel announced the launch of a BlackBerry Wireless Solution in India. The launch is a result of a tie-up between Bharti Tele-Ventures Limited and Research In Motion (RIM). In the news On February 12, 2007 Vodafone sold its 5.6% stake in AirTel back to AirTel for US $1.6 billion; and purchased a controlling stake in rival Hutchison Essar. In its monthly press release, following statistics have been presented for end of April 2007. 25 | P a g e

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Bharti Airtel added the highest ever net addition of 5.3 million customers in a single quarter (Q4-FY0607) and also the highest ever net addition of 18 million total subscribers in 2006-07 The company will invest up to $3.5 billion this fiscal (07-08) in network expansion. It has an installed base of 40,000 cellsites and 59% population coverage After the proposed network expansion, an additional 30,000 towers will result in the company achieving 70% population coverage Bharti has over 39 million users as on March 31, 2007 It has set a target of 125 million subscribers by 2010 Prepaid customers account for 88.5% of Bharti’s total subscriber base, an increase from 82.7% a year ago .ARPU has dropped to Rs 406 Non-voice revenues, (SMS, voice mail, call management, hello tunes and Airtel Live) constituted 10% of total revenues during Q4, lower than 10.7% in the Q4 of the previous year Blended monthly minutes of usage per customer in Q4 was at 475 minutes. The company Has completed 100% verification of its subscribers and in the process disconnected three lakh subscribers Bharti Airtel’s enterprise Services, President - David is busy connecting India to Europe. David announced the building of 15,000 km 3.84 Terabit OFC sub-marine cable system connecting Europe [London] to India via the Middle East. The project is known as Europe India gateway [EIG] and is expected to cost $700 million, which is to be completed by Q2-2010. Alcatel Lucent and Tyco are the telecom vendors for the project. Members in the EIG consortium include - AT&T, BT, C&W, Djibouti Telecom, Du, Gibtelecom, IAM, Libyan Telecom, MTN Group Ltd., Omantel, PT Comunicacoes-S.A, Saudi Telecom Company, Telecom Egypt, Telkom SA Ltd, and Verizon Business. In May 2008, it emerged that Bharti Airtel was exploring the possibility of buying the MTN Group, a South Africa-based telecommunications company with coverage in 21 countries in Africa and the Middle East. The Financial Times reported that Bharti was considering offering US$45 billion for a 100% stake in MTN, which would be the largest overseas acquisition ever by an Indian firm. However, both sides emphasize the tentative nature of the talks, while The Economist magazine noted, "If anything, Bharti would be marrying up," as MTN has more subscribers, higher revenues, more subscribers and

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broader geographic coverage. However, the talks fell apart as MTN group tried to reverse the negotiations by making Bharti almost a subsidiary of the new company.

Airtel’s Network Transport System •

Optical Fiber Cable (OFC) used for network for higher Performance & Reliability

•

Synchronous Digital Hierarchy (SDH)(Nortel) for transport over the OFC Network

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Ring Topology for Full redundancy

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State of the art Network Management System(Nortel) for SDH equipment

Vision & Promise By 2010 Airtel will be the most admired brand in India: •

Loved by more customers

•

Targeted by top talent

•

Benchmarked by more businesses

We at Airtel always think in fresh and innovative ways about the needs of our customers and how we want them to feel. We deliver what we promise and go out of our way to delight the customer with a little bit more

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VARIOUS SERVICES PROVIDED BY AIRTEL For individuals: Various Services Provided by Airtel are : •

MOBILE

Experience total cost control, no rentals and easy billing with our postpaid and prepaid services. Explore the world with our roaming services and get absolutely cool offers with airtel live. •

HOME PHONES

Airtel welcomes you to the world of telephony services for your home experience a world-class service and cutting edge technology with Airtel landline and our feature rich Wireless fixed line. What’s more, calling is made more fun & convenient with services and entertainment on Airtel. •

BROADBAND INTERNET

Airtel Broadband Services, India’s most preferred high-speed Internet service, redefines your Internet experience. It is fast, fun, convenient and cost effective. •

BLACKBERRY

Blackberry from Airtel is and always connected wireless solution providing easy and secure access to your email and data. •

EMAIL ON THE GO

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Want to access information on your mobile? Airtel brings you Email on the go. You can choose from Blackberry and Windows Mobile 5.0 depending upon the usage patterns, requirement and suitability.

•

CALLING CARDS

Our calling card services connect you to the world from India and allow a better way to call back India. •

WIRELESS INTERNET

With Airtel’s Wireless Internet, you have the freedom to access the Internet anytime, anywhere across India. It enables Internet, Email, and Office applications with real-time secure VPN access to corporate applications whilst on the move. FOR CORPORATES •

MOBILE

We offer you mobile solutions targeted for your business needs. We create price plans that work for your business along with a range of features. •

VOICE

Our voice services give you the right tools, to suit the needs of small, medium and large enterprises and to stay ahead. PRI for COMPANY NAME/Group 1) PRI (PRIMARY RATE INTERFACE) 2) 30 Channels of 64 kbps on 2 pair of wires.

•

OFFICE SOLUTION

Manage your business more efficiently and effectively, with Airtel’s Office Solutions, Easy Mail and Data Card.

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DATA & INTERNET

We bring you a comprehensive suite of data technologies for all your strategic connectivity needs. 1) Analog Phone Line 2) ISDN BRI 3) ISDN PRI DID/DOD Service 4) Host of Value Add Services 5) Voice Mail Service 6) CENTREX Facility •

E-BUSINESS SERVICES

We offer you a range of services that help to keep your business running 24x7. •

SATELLITE SERVICES

We provide you connectivity, where ever you take your business. Our Satellite Services bring you the benefits of access in remote locations. •

CARRIER SERVICES

India’s first private long distance communications service provider with world-class Voice and Data communication services. •

INTERNATIONAL SERVICES

Get the communication solutions, your business needs, to stay connected worldwide with our International Services.

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Organizational Structure Of Bharti Enterprise

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Organizational Structure Of Bharti Airtel Enterprise

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2. RESEARCH METHODOLOGY

2.1 – TITLE: - “Identification and analysis of SMBEs customers with AIRTEL” 2.2 –OBJECTIVE: - To find out the hidden business potential in SMBEs. 2.3 –GAP: •

To know about the potential hidden business opportunities

•

The know hidden business strength of the key accounts.

•

Customer reactions about this exercise.

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3.1 – Primary Data collection In primary data collection, you collect the data yourself using methods such as interviews and questionnaires. The key point here is that the data you collect is unique to you and your research and, until you publish, no one else has access to it. Advantages:•

Can be used as a method in its own right or as a basis for interviewing or a telephone survey.

•

Can be posted, e-mailed or faxed.

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Can cover a large number of people or organizations.

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Wide geographic coverage.

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Relatively cheap.

•

No prior arrangements are needed.

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Avoids embarrassment on the part of the respondent.

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Respondent can consider responses.

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Possible anonymity of respondent.

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No interviewer bias.

Disadvantages:•

Design problems.

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Questions have to be relatively simple.

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Historically low response rate (although inducements may help). 34 | P a g e

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Time delay whilst waiting for responses to be returned.

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Require a return deadline.

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Several reminders may be required.

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Assumes no literacy problems.

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No control over who completes it.

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Not possible to give assistance if required.

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Problems with incomplete questionnaires.

•

Replies not spontaneous and independent of each other.

•

Respondent can read all questions beforehand and then decide whether to complete or not. For example, perhaps because it is too long, too complex, uninteresting, or too personal

Methods of collecting primary data used •

Questionnaire: - In this we have taken a sample size 150 respondents. Our main objective is to know the potential business points from where business can be derived for Airtel.

•

Face to face- This method involves direct interaction or personal interaction with the focused group to get more and relevant information on the topic which I had taken.

3.1 – Secondary Data collection All methods of data collection can supply quantitative data (numbers, statistics or financial) or qualitative data (usually words or text). Quantitative data may often be presented in tabular or graphical form. Secondary data is data that has already been collected by someone else for a different purpose to yours. For example, this could mean using: •

data collected by a hotel on its customers through its guest history system 35 | P a g e

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•

data supplied by a marketing organization

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annual company reports

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Government statistics.

Secondary data can be used in different ways: •

You can simply report the data in its original format. If so, then it is most likely that the place for this data will be in your main introduction or literature review as support or evidence for your argument.

•

You can do something with the data. If you use it (analyze it or re-interpret it) for a different purpose to the original then the most likely place would be in the ‘Analysis of findings’ section of your dissertation. A good example of this usage was the work on suicide carried out by Durkheim. He took the official suicide statistics of different countries (recorded by coroners or their equivalent) and analyzed them to see if he could identify variables that would mean that some people are more likely to commit suicide than others. He found, for example, that Catholics were less likely to commit suicide than Protestants. In this way, he took data that had been collected for quite a different purpose and used it in his own study – but he had to do a lot of comparisons and statistical correlations himself in order to analyse the data. (Most research requires the collection of primary data (data that you collect at first hand), and this is what students concentrate on. Unfortunately, many dissertations do not include secondary data in their findings section although it is perfectly acceptable to do so, providing you have analyzed it. It is always a good idea to use data collected by someone else if it exists – it may be on a much larger scale than you could hope to collect and could contribute to your findings considerably.

As secondary data has been collected for a different purpose to yours, you should treat it with care. The basic questions you should ask are: •

Where has the data come from?

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Does it cover the correct geographical location? 36 | P a g e

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Is it current (not too out of date)?

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If you are going to combine with other data are the data the same (for example, units, time, etc.)?

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If you are going to compare with other data are you comparing like with like?

Thus you should make a detailed examination of the following: •

Title (for example, the time period that the data refers to and the geographical coverage).

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Units of the data.

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Source (some secondary data is already secondary data).

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Column and row headings, if presented in tabular form.

•

Definitions and abbreviations, for example, what does SIC stand for? For example, how is ‘small’ defined in the phrase ‘small hotel’? Is ‘small’ based on the number of rooms, value of sales, number of employees, profit, turnover, square metres of space, etc., and do different sources use the word ‘small’ in different ways? Even if the same unit of measurement is used, there still could be problems. For example, in Norway, firms with 200-499 employees are defined as ‘medium’, whereas in the USA firms with less than 500 employees are defined as ‘small’.

There are many sources of data and most people tend to underestimate the number of sources and the amount of data within each of these sources. Sources can be classified as: •

paper-based sources – books, journals, periodicals, abstracts, indexes, directories, research reports, conference papers, market reports, annual reports, internal records of organizations, newspapers and magazines

•

Electronic sources– CD-ROMs, on-line databases, Internet, videos and broadcasts. 37 | P a g e

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The main sources of qualitative and quantitative secondary data include the follwing: •

Official or government sources.

The arrangement is alphabetical by organization with details of titles produced and contacts for further information. It lists references to the following types of sources: •

trade associations

•

trade and other journals

•

private research publishers-

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stock-broking firms

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large company market reports

•

local authorities

•

professional bodies

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Academic institutions.

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European Union (Community) sources.

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International sources.

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Organization for Economic Co-operation and Development (OECD)

•

United Nations and related organizations.

Sources for the last two categories are many and varied. If your dissertation requires these sources you need to conduct a more thorough search of your library and perhaps seek the assistance of the librarian. Methods I have used •

Internet Portals: - The relevant data related to euro norms and consumer reactions to various euro norms was searched from internet portals. These portals act as a intermediate between the user and the required information as it an intermediate and used as a communication tool like Internet sites. 38 | P a g e

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Magazines:- we had collected data from various magazines, journals and also referred to various newspapers for getting more information on euro norms.

3.3 - SAMPLE SIZE AND AREA •

Size – 150

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Area – Delhi and NCR; specially the following:-

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Hauz-Khas

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Green Park

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Lado Sarai

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Vasant Kunj

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Vasant Vihar

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Chanakyapuri

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Nehru Place

3.4- SAMPLING TECHNIQUES Sampling is that part of statistical practice concerned with the selection of individual observations intended to yield some knowledge about a population of concern, especially for the purposes of statistical inference. Each observation measures one or more properties (weight, location, etc.) of an observable entity enumerated to distinguish objects or individuals. Results from probability theory and statistical theory are employed to guide practice.

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•

Nominal: -Nominal scale is a simple system of assigning number symbols to events in order to label them. The usual example of this is assignment of numbers of basketball players in order to identify them. Such numbers cannot be considered associated with an ordered scale of their order is of no consequence; the numbers are just convenient labels for the particular class of events and as such have no quantitative value. Neither can one usefully compare the numbers assigned to one group with the numbers assigned to another.

•

Interval: - In case of intervals scale, the interval are adjusted in terms of some rule that has been established as a basis of making equal units. The units are equal only if one accepts the assumptions on which the rule is based. Interval scales can have an arbitrary zero, but it is not possible to determine for them what may be 40 | P a g e

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called an arbitrary zero or the unique origin. One can say that there is same increase in temperature from 30-40 degrees as in case of 60-70 degrees. •

Paired Comparison: - this involve divided the questions on the basis of consumer approval techniques like Yes and No questions

•

Summated Technique:- This is also known as “likert-type scales” which are developed by utilizing the item analysis approach wherein a particular item is evaluated on the basis of how well it discriminates between those persons whose total score is high and whose total score is low. Thus summated scales consists of a number of statements which express either a favorable or an unfavorable attitude towards the given object to which the respondent is asked to react.

With simple random sampling, each item in a population has an equal chance of inclusion in the sample. For example, each name in a telephone book could be numbered sequentially. If the sample size was to include 2,000 people, then 2,000 numbers could be randomly generated by computer or numbers could be picked out of a hat. These numbers could then be matched to names in the telephone book, thereby providing a list of 2,000 people.

Methods I have chosen •

Random:- In random sampling, all items have some chance of selection that can be calculated. Random sampling technique ensures that bias is not introduced regarding whom is included in the survey. Five common random sampling techniques are:

SIMPLE RANDOM SAMPLING With simple random sampling, each item in a population has an equal chance of inclusion in 41 | P a g e

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the sample. For example, each name in a telephone book could be numbered sequentially. If the sample size was to include 2,000 people, then 2,000 numbers could be randomly generated by computer or numbers could be picked out of a hat. These numbers could then be matched to names in the telephone book, thereby providing a list of 2,000 people.

•

A Tattslotto draw is a good example of simple random sampling. A sample of 6 numbers is randomly generated from a population of 45, with each number having an equal chance of being selected.

The advantage of simple random sampling is that it is simple and easy to apply when small populations are involved. However, because every person or item in a population has to be listed before the corresponding random numbers can be read, this method is very cumbersome to use for large populations. The advantage of simple random sampling is that it is simple and easy to apply when small populations are involved. However, because every person or item in a population has to be listed before the corresponding random numbers can be read, this method is very cumbersome to use for large populations. The sampling process consists of seven simple stages: •

Defining the population of concern

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Specifying a sampling frame, a set of items or events possible to measure

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Specifying a sampling method for selecting items or events from the frame

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Determining the sample size

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Implementing the sampling plan

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Sampling and data collecting

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Reviewing the sampling process

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SYSTEMATIC SAMPLING

Systematic sampling, sometimes called interval sampling, means that there is a gap, or interval, between each selection. This method is often used in industry, where an item is selected for testing from a production line (say, every fifteen minutes) to ensure that machines and equipment are working to specification. Alternatively, the manufacturer might decide to select every 20th item on a production line to test for defects and quality. This technique requires the first item to be selected at random as a starting point for testing and, thereafter, every 20th item is chosen. This technique could also be used when questioning people in a sample survey. A market researcher might select every 10th person who enters a particular store, after selecting a • Convenient: - In this we carry out our survey based on nearness and approachability of the respondent based o our convenience. Here the area or the group of respondents which are really easy to approach and interaction is possible within a less span of time are selected for carrying out the survey and data collection.

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4. ANALYSIS

TABLE I.

The following table shows the percentage of different phone operators used by the SMBeS [%age out of total 150 accounts surveyed]

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TABLE SHOWING SMBeS HAVING FIXED LINE CONNECTIONS OF DIFFERENT OPERATORS. Operators Values

PERCENTAGE VALUES

AIRTEL

27 %

MTNL / BSNL

45%

RCOM

17%

TATA INDICOM

11%

Out of the total 150 customers surveyed, the table above shows the percentage of SMBeS using fixed line connections [telephone lines] of different companies. Despite of the fact that Airtel gives the best service both in terms of quality and customer service, it the state owned public sector company leads the pack in this segment. It has the first mover advantage with it. Moreover , most of the public sector companies gave undue preference to MTNL / BSNL, for whatsoever reasons. Here, MTNL/BSNL leads with 45 % share, whereas AIRTEL has 27% share. RCOM and INDICOM has 17% and 11% shares respectively.

CHART I.

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The above chart shows graphically which of the operators have largest share in fixed line telephony market. State owned companies MTNL / BSNL lead with 45% share while Airtel has 27% share in fixed telephony market. Other new players like Tata Indicom and reliance Infocomm has 11% and 17% shares respectively. The market share of RCOM and TATA INDICOM are improving slowly.

TABLE II. TABLE SHOWING %AGE OF DIFFERENT OPERATORS FOR COMPANY

PAID

Operators Airtel

Vodafone

Rcom

Idea

Others

56.2

11.1

19.7

8.8

4.2

%Values

MOBILE IN CORPORATES The above table shows the percentage of different telecom operators used by the corporate for company paid mobile connections under different CUG plans.

Out of total 150 corporates surveyed, Airtel showed up as the favorite brand as far as company paid mobile connections are concerned just because of the excellent services it provided. Although , Airtel did not provide the cheapest services, still it is market leader

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in this segment. Here, Airtel leads with 56.2% market share, followed by Rcom with 19.7% share, Vodafone with 11.1 % , and Idea with 8.8 % share.

GRAPH II.

GRAPH SHOWING %AGE OF COMPANY PAID MOBILE CONNECTIONS OF VARIOUS CORPORATES.

This Bar-graph shows that in present scenario Airtel has the largest market share in the company paid mobile sector. Airtel should continue providing better services and schemes to maintain this position in company paid mobile connections segment.

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TABLE SHOWING %AGE OF DIFFERENT OPERATORS FOR BROADBAND CONNECTIONS IN CORPORATES Operators %Values

AIRTEL

MTNL

SPECTRANET

HATHWAY

30.6

22.6

12.3

34.5

The following table shows the percentage of different telecom operators used by corporate in Broadband segment.

The table above shows the percentage of different telecom operators used by the corporates in broadband segment. Here, Hathway leads the pack with 34.5 % market share, followed by Airtel with 30.6 % share, followed by Mtnl with 22.6% share and finally Spectranet with 12.3% market share.

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GRAPH III. GRAPH SHOWING %AGE OF DIFFERENT TELECOM OPERATORS USED BY THE CORPORATES IN BROADBAND SEGMENT.

The graph above shows the percentage of different telecom operators in broadband segment. Here, Hathway leads the pack with 34.5 % share, followed by Airtel with 30.6 % share, followed by Mtnl with 22.6% share and finally Spectranet with 12.3% market share.

CHART IV.

PIE-CHART SHOWING THE PERCENTAGE OF SATISFIED CUSTOMERS WITH AIRTEL.

The above pie-chart shows that most of the existing customers with Airtel are satisfied with the kind of services the company has been providing to them. About 88% of the

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customers are already satisfied with Airtel’s services, 10 % customers are not-satisfied and 2% customers say that they can’t comment about it.

 BENEFITS OF AIRTEL INTERNET SERVICE

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High Speed Access Get the advantage of the quickest and easiest access to the Internet. On the state of the art Airtel network you can transfer data up to 155 Mbps.

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Service Level Guarantee We guarantee service availability and network latency, or extend your service for free as per Service Level Guarantee.

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Scalability Free yourself from the constraints of limited bandwidth by choosing from our wide range of access speeds (64 Kbps to 155 Mbps) to cater to your needs.

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24*7 Network Monitoring and Technical Support Our 24*7 network monitoring ensures your network runs smoothly. A 24*7 technical support team is dedicated to you round the clock to resolve any technical problems you may encounter and ensures that service is delivered as per Airtel Service Level Guarantee.

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Integrated Solution Approach Our Enterprise Services is an end-to-end communications solutions provider, giving customer centric integrated service. We have the expertise and the experience in the field of providing flawless Internet connectivity.

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Network We have a completely managed IP network that builds a converged platform to run all enterprise solutions. The entire backbone is built on trusted names like Cisco and Juniper to provide data capacity in terabytes and high routing/switching speed. Muti tier network architecture is designed to avoid single point of failure 50 | P a g e

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and offer highest network availability. Scalability in no time is the highlighting point of our network. All the Internet core routers in the ISP backbone are connected in a Star topology and are using OSPF routing protocol. To communicate with external world, the EBGP-4 protocol is used at the international gateway egress routers.

RECOMMENDATIONS AND SUGGESTIONS :

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Develop plans targeting the specific user groups like youth, students and wemen.

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Develop ultra economy plans for poor people; to whom maintaining a connection is still a luxury.

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Educate customer on the benefits of Value-added services.

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Company should make more promotional campaign in commercial areas.

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Strategic Partnerships with leading Global Telecom Service Providers & Investors.

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Know areas of strength and areas of improvement.

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Design Individual Development Plans so as to convert areas of improvement to areas of strength.

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Identify the competencies required at different levels.

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Identification and development of employees for future roles and responsibilities.

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Customer care services provided to the active customers should be more efficient towards the problem solution.

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BIBLIOGRAPHY

BOOKS: •

Philip Kotler – Marketing Management

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Naresh K. Malhotra – Marketing Research

INTERNET SITES: •

www.airtel.in

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www.bhartiairtel.in

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www.google.com

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www.economicstimes/archive.com

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www.marketresearch.com/product/display.asp

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www.economywatch.com/budget/india-budget-2007/sector-analysis.html 26k -

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hikrish.blogspot.com/2006/10/indias-telecom-sector-growing.html - 82k –

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www.oppapers.com/topics/forces-analysis-telecom-sector

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www.ieo.org/tel_pol.html - 13k

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www.prlog.org/10075065-rncos-releases-new-report-indian-telecom-analysis2008-2012.html

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