Study Of The Behaviour Of Telecom Retailers

Summer Training Report

On “STUDY OF THE BEHAVIOUR OF THE TELECOM RETAILERS”

At

VODAFONE ESSAR SPACETEL Ltd, GUWAHATI

Prepared By ROSHAN KANOO Roll No. 08DM076 Batch 2008-2010

Under the guidance of Prof. (Dr) SAMARENDRA MAHAPATRA

As a Partial Fulfilment of PGDM Programme of IMIS

Institute of Management & Information Science Bhubaneswar

TABLE OF CONTENTS Certificate Declaration

I

Acknowledgement

II

Preface

III

Synopsis

IV

Executive Summary

V

Chapter I

1-9

Introduction

1

Company profile History of Vodafone 1.1 Vodafone- India 1.2 Vodafone – Assam

2 3 6 9

Chapter II

10-16

Indian Telecom Industry 2.1 Key Players in Indian Telecom industry 2.2 The Deal – Vodafone and Hutch Telecom Regulatory Authority of India 2.3 TRAI and its role 2.4 New Telecom Policy in Telecom Sector 2.5 Dispute Resolution in Telecom Sector 2.6 Competition and Vodafone

10 10 11 12 14 14 15

Chapter III

17-20

Vodafone Operations 3.1 Brand and Distribution 3.2 Distribution and Channel of Sales at Vodafone 3.3 Vodafone – Products & Services

17 18 18 19

Chapter IV

21-46

4.1 Research Methodology 4.2 Observation and Findings 4.3 Conclusion and Recommendation

21 22-43 44-46

Abbreviation Bibliography Annexure

47 48 49

II

DECLARATION I hereby declare that this project on “STUDY OF THE BEHAVIOUR OF THE TELECOM RETAILERS” has been prepared by me during the year 2009-2010 as a partial fulfilment of PGDM course of Institute of Management & Information Science, Bhubaneswar. This project report has not been submitted to any other university or institution for award of any degree or diploma so far.

Signature of the student

[ROSHAN KANOO] Roll No. 08DM076

III

ACKNOWLEDGEMENT It is my pleasure to extend my deep gratitude to Prof. (Dr) Samarendra Mahapatra, Faculty Guide, Institute of Management & Information Science, Bhubaneswar, for the help, cooperation and guidance received from him throughout the tenure of this Summer Internship Project . I would like to take this opportunity to thank all other faculty members at Institute of Management & information Science, Bhubaneswar, Orissa, for their cooperation. I will also like to thank Mr. P.K.Das, Head of Sales for giving me an opportunity to do the “Summer Internship” in his esteemed organisation, Vodafone Essar Spacetel Ltd. I am deeply indebted to Mr. Amitabh Ranjan, Zonal Business Manager of Vodafone Essar, Guwahati, and also my company project guide, for providing a mentally stimulating environment throughout the project period. I am grateful to Mr. Sanjay Singha, Area Sales Manager, Mr. Vishal Kumar, Senior Executive and Mr. Rubul Das, Zonal Coordinator , for there guidance and help during the internship. Their valuable and constructive suggestions at many difficult situations are immensely acknowledged. Finally I would like to thank all the staff of Vodafone Essar, Guwahati Branch, who helped me complete my project successfully.

ROSHAN KANOO IMIS Bhubaneswar

IV

PREFACE The customers are very important and play a very crucial role in any process of marketing. Today the customers are kings of the market because the customer’s loyalty and customer’s preference are built by the products and services offered to the customers and they seek for more benefits and money’s worth for the amount they spend. But these services and products are delivered to the end customers only by the Retailers who work as the end medium in the whole chain of sales. That is where the concept of Retailers preference and Retailers behaviour comes because the Retailers make the marketers rethink about designing their services; because of the important role they play in the whole chain. They have to think about the market strategies, Retailer behaviour, Retailers taste etc also. Many marketers are smart enough to understand Retailers needs, wants and demands and perform beyond their expectation i.e. they delight them. it provides them growth , profitability and creativity with lot of inventions.

V

SYNOPSIS AIM The aim of this survey is to analyse critically the Retailers preference, behaviour, and their satisfaction in telecom sector at Guwahati, Assam.

RESEARCH OBJECTIVES • • •

To understand the Retailers preference in telecom sector. To study the service provider’s service quality in the telecom sector. To study the Retailers satisfaction and understand the current market scenario in telecom sector.

COMMERCIAL VIABILITY OF THE STUDY In today’s scenario communication has become much faster day by day. One of them is the growth of telecom sector. Today many organisations provide services for telecom purpose. This study will help to understand Retailer preference and their satisfaction by the services provided by different organisations in this sector .it will also help these organisations to form various strategies and getting the results from marketing efforts.

RESEARCH METHODOLOGY In the research study selected Retailers of telecom sector, dealing in the products and services of various telecom operators were taken into account. The study exploited both primary and secondary sources of data. The primary sources comprised of structured questionnaire consisting of 64 questions divided over 15 categories. The questionnaire consisted of both closed ended and open ended questions. The scale used for the close ended question is Likert scale. The open ended questions were basically in the form of interaction with Retailers by filling up of questionnaire. The sample size for the the study consisted of 150 Retailers dealing in both prepaid and post-paid product and services. The data was collected from the respondents who were Retailers for products and services of all telecom operators operating in Assam. The actual sample surveyed in this study is 115 Retailers, where the population itself is of 750 Retailers. The sample size is 15% of the total population which is a very good sample size to make this report as error free as possible. The data gathered were analysed and interpreted using simple arithmetic calculations, Means, Medians and Bar-Chart were calculated and prepared for each questions using Excel. The questionnaire has been attached in the annexure. The secondary source basically consisted of books, internet, articles, magazines, project report and newspaper. VI

LIMITATIONS The limitation of the study is that only Retailers from Guwahati i.e. the capital city of Assam have been taken into account. In this survey only the view of retailers has been taken into account but neither the view of the company nor the satisfaction level of the customers is taken into account, and as we know retailers behaviour is at times monetarily motivated one so some of the response may be biased. However the study has provided encouraging results and there is scope for deriving more information if a more rigorous study is conducted at district levels to cover the entire state.

VII

EXECUTIVE SUMMARY The development of the telecom sector has experienced a major process of transformation in terms of its growth, technological content and market structure in the last decade. The study aims to analyse that with the increase in competition in the telecom service, higher levels of Retailer satisfaction with affordable price for end users and improved quality of services are achieving or not . The study also shows whether the Retailer who deals with various service providers product and service are satisfied with the service quality and allied parameter attached to it or not. As competition in telecom sector is increasing day by day and all operators are in a run to increase their subscriber base, at times tend to ignore the satisfaction level of the Retailers, who play a vital role in delivering the end service to the customer. The operators in order to lure customer, comes out with attractive customer schemes but in spite of increase in their subscriber base and revenue, sometimes neglects the Retailers satisfaction and profitability. So this study is a one of a kind study where an attempt has been made to know the Retailers preference and behaviour they show towards a particular operator’s product and services and their level of satisfaction while dealing with those.

VIII

INTRODUCTION Whenever we talk of growth and development of a nation, hardly can there be anyone who can ignore the vital contribution of Telecommunication sector. Today it has become a lifeline for us, in the absence of which we feel we are separated from the world at large. The importance of telecommunication product and service has gone deep in the life of people that after three essentials of human being i.e. food, shelter and clothing the fourth one that can be added comfortably is the communication. A gadget and a service which can be found in everyone’s palm ranging from rickshaw-puller to big businessmen. Now talking of India, which is still a developing country, the importance of telecommunication as a sector can be very well understood. Indian telecom sector has been doing exceptionally well in the past decade. Its structural and institutional reforms have provided tremendous growth opportunity to his sector. India has nearly 250 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. And in this context whenever we talk of mobile telephony, Vodafone as a brand must be taken in to account. Nowadays there is lot of competition between different telecom operators who in order to add more subscriber base to the existing figures comes out with attractive customer schemes and virtually there is a tug of war between operators to get more market share. But in this fierce competitive war to get more subscriber base, many a times the Retailers who play a vital role in the whole chain of sales and who influence customers for a service provider are sometimes ignored. So from this study an attempt has been made to understand the psychology, behaviour, preference and satisfaction at the Retailer level. In this competitive market for a service provider to get an edge over other operator, in addition to other prevailing factors a operator must clearly understand the behaviour, preference and satisfaction level of Retailers, which will help them to design effective strategies to get more sales and increase subscriber base and shift push sales to pull sales. The study delves into how the Retailer behaves and their expectation level from a particular service provider and how it can be effectively managed.

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COMPANY PROFILE Vodafone Group Plc

Public (LSE: VOD,

Type

NYSE: VOD)

Founded Headquarters

1983 as Racal Telecom, independent 1991 Newbury, England, UK Vittorio Colao, CEO

Key people

Sir John Bond, Chairman John Buchanan, Deputy Chairman

Industry

Mobile telecommunications

Products

Mobile networks, Telecom services, Etc.

Revenue

£35,478 million (2008)

Operating income

£10,047 million (2008)

Net income

£6,756 million (2008)

Employees

72,375 (2008)

Website

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HISTORY OF VODAFONE Company Beginnings

Original Corporate Logo of Vodafone. Vodafone itself was formed in 1982 as a joint venture between Racal Electronics plc's subsidiary Racal Strategic Radio Ltd (who won one of two UK cellular telephone network licences) along with Millicom and the Hambros Technology Trust. In this arrangement Racal owned 80%, Millicom 15% and Hambros 5%. The network was known as Racal Vodafone, with the Vodafone name being derived from the firm's goal of establishing a voice and data services over cellular telecommunication networks. Hence VO represented voice and DA symbolized data — yielding the name Vodafone. Vodafone was launched on 1 January 1985 and later that year Racal Strategic Radio was renamed Racal Telecommunications Group Limited in 1985. A year later, on 29 December 1986 Racal Electronics bought out the minority shareholders of Vodafone for GB£110 million. In September 1988 the company was again renamed Racal Telecom and on 26 October 1988 Racal Electronics floated 20% of the company — a flotation that valued Racal Telecom at GB£1.7 billion. On 16 September 1991 Racal Telecom was demerged from Racal Electronics as Vodafone Group and the mobile telephony giant was born. During the mix 1990s Vodafone began to consolidate itself on the British highstreet. In July 1996 Vodafone acquired the two thirds of Talkland it did not already own for £30.6 million. On 19 November 1996, in a defensive move, Vodafone purchased Peoples Phone for £77 million, a 181 store chain whose customers were overwhelmingly using Vodafone's network. In a similar move the company acquired the 80% of Astec Communications that it did not own, a service provider with 21 stores. This made Vodafone a very visible presence on the British high street and significantly increased the company's share of UK mobile customers. New Corporate Logo of Vodafone as of 1997. In 1997 Vodafone introduced its new corporate Speechmark logo. This represents a quotation mark within a circle. With the 'O's in the Vodafone logotype being opening and closing quotation marks, suggesting conversation.

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Vodafone Group the world specialist in mobile phones, Vodafone Group (British) is one of the rare groups that have significant world coverage in the telecommunications field. It principally specializes in the mobile telephony and telephonic transmission network sectors. It has subsidiaries in numerous countries: In North and South America, Asia, Oceania and Africa. Better known by its former name, Vodafone Air Touch, it has become the leading mobile phone operator in Germany, Britain and the USA (Verizon Wireless). And there are a whole series of holdings: SFR, Swiss Mobile, Vodafone K.K. (Japan), 100% of Vodafone Ireland, 100% of Vodafone Spain and 99 of Vodafone Netherlands etc. The group offers services from mobile phones to customized communication services (call management, message services) and supplies data management equipment: Internet, Modems, fax, directories and telemetric servers. Vodafone Group Plc (Vodafone) is engaged in providing service, such as voice, messaging, data and fixed line and others. Voice services include provision of mobile voice communications. Messaging include text, picture and video messaging using mobile devices. Date services provide e-mail, mobile connectivity and Internet on Your mobile. Fixed lines provide customers with fixed broadband and fixed voice and date solutions. Other services include mobile advertising and business managed services, as well as incoming roaming and wholesale mobile virtual network operators. On December 30, 2008, Vodacom Group (Pty) Limited (Vodacom) acquired the carrier services and business network solutions subsidiaries of Gateway Telecommunications SA (Pty) Ltd. In January 2009, Verizon Wireless completed its purchase of Alltel Corporation from Atlantis Holdings LLC. On April 20, 2009, the Company acquired an additional 15% stake in Vodacom. On May 18, 2009, Vodacom became a subsidiary of the Company.The Vodafone Group is the mobile telecommunications company with the most significant presence around the world. It has over 303 million customers calculated on a proportionate basis in 31 countries and the brand is present in a further 40 countries through partnership networks. In an increasingly connected world, we intend to be a global communications operator capable of responding to all our customers’ needs, whether it’s using a mobile, a fixed line or broadband, building on the know-how and experience that we have acquired in the mobile sector. Through our services, customers are able to lead fuller lives at home or at work, benefiting from irresistible, innovative mobile communications, mobile-PC convergence and fixed communications services. We are committed to making it possible for our customers to use the services they are used to, no matter how they access them and with a simple and transparent usage experience. We are in the forefront of the definition of mobile voice and data services throughout the world and are constantly exploiting new technologies. We also differentiate ourselves in terms of our prices by offering customers the most transparent and competitive price plans in the market. With roaming calls, 4|Page

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for example, we pass on to the customer the advantages of being part of a global operator. The Group's principal activity is providing voice and data communications services. Through its mobile businesses, the Group provides a range of mobile communications services including voice, text messages, picture messages and other datas. The Group is also focusing on developing total communications solutions for customers broadband connectivity. The Group operates in Europe, the Middle East, Africa, Asia, Pacific & the United States. Vodafone Group is a mobile tele-communications company. The company has a significant presence in Europe, the Middle East, Africa, Asia Pacific and the United States. In the United States the Group’s associated undertaking operates as Verizon Wireless. The name Vodafone comes from Voice data fone, chosen by the company to "reflect the provision of voice and data services over mobile phones."[2]As of 2009 Vodafone had an estimated 303 million customers in 25 markets across 5 continents.[3] On this measure, it is the second largest mobile telecom group in the world behind China Mobile.In the United States, Vodafone owns 45% of Verizon Wireless, the largest wireless telecommunications network in the United States, based on number of subscribers. Global Enterprise is a business set up by Vodafone with the sole purpose of handling Vodafone's multinational clients. It is the high end business to business section of Vodafone group, and acts like an operating country (such as for example Vodafone UK). Devices and services available in any operating country, are available to Global Enterprise customers in the same country, and so Vodafone Global Enterprise are able to offer a wide range of products. Vodafone Global Enterprise have a presence in over 65 countries and this number is expected to grow in future, as with the recent aqcuisition of Ghana Telecom. Since its foundation in 2007, Global Enterprise has aimed to be a world leader in managed mobility services. Vodafone Global Enterprise are headquartered in Newbury, but do have operatives around the world; while many of Vodafone's marketing employees are relocated to London, Global Enterprise' team will remain in Newbury.Nick Jeffery leads Vodafone Global Enterprise. He led the creation of Vodafone Global Enterprise in 2007 and continues to define the strategy and operational execution for Vodafone's relationship with multi-national corporate customers. Global Enterprise have a dedicated group of account managers, at both global and national levels, who look after customers needs, and are supported by pre-sales and technical consultancy teams.Products and Services include Enterprise Central, Telecomms Management, Global Device Portfolio and Managed Mobility Services. In 2009 Vodafone Global Enterprise was the winner of Best Mobile Enterprise Service at the GSMA Global Mobile Awards 2009. 5|Page

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VODAFONE – INDIA Vodafone Essar started its operations in India in 1994 and is under the Vodafone Group. The company Vodafone Essar Limited has become one of the leading companies in the telecom sector in India due to its high standard of services that it provides to its customers. The company Vodafone Essar has its operations in 16 telecom circles of the country, which covers around 86% of the customer mobile base in India. The company offers both postpaid and prepaid GSM cellular mobile coverage all across India and its hold is especially strong in the metropolitan cities. The company Vodafone Essar Limited provides services like 2G, which are based on 1800Mhz and 900Mhz GSM digital technology. The company Vodafone Essar also offers voice and data services. Vodafone Essar Limited has received many awards over the years such as the Best Mobile Service in India, Most Effective and Most Creative Advertiser of the Year, and Most Respected Telecom Company. The Vodafone Essar subscriber bases in the cities of India are: Kolkata - 1,632,875 Mumbai - 2,989,970 Delhi - 3,002,442 Chennai - 981,996 The company Vodafone Essar Limited plans to spend more than Rs.250 crore in launching low price cell phones in India. The company's objective in doing this is to bring in millions of cheap mobile handsets from around the world into the country and then sell them under the Vodafone brand name in order to maximize sales. It is expected that the company Vodafone Essar Limited will price the handsets in the range of Rs.666, Rs.999, and Rs.888. In this way the company expects to attract new customers and thus expand its customer base that stands at 35 million in 2007. Vodafone Essar plans to sell the low price handsets from its 4 lakhs distribution outlets. The company will buy the low cost cell phones from the firm ZTE that is located in China. The Company ZTE will ship more than 10 million low cost cell phones to India that will then be sold by the company Vodafone Essar. Vodafone Essar Company also has plans to expand in the near future and for this it is planning to take a loan overseas of around US$ 500 million. The company Vodafone Essar Limited will use the money to expand the company's network, better its technology, and open more distribution centers. All these measures will help to increase the customer base of the company Vodafone Essar. Vodafone Essar is one of the topmost companies in the telecom sector in India and is well known for the best quality of products and services 6|Page

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offered to its customers. And this is the reason that the customer base of the company Vodafone Essar Limited has been increasing at a very rapid pace. The company is planning to launch low price cell phones in the country and also expand its operations. This is sure to help the company Vodafone Essar to grow and prosper even more in the future.Vodafone Essar, previously Hutchison Essar is a cellular operator in India that covers 23 telecom circles in India[1] . Despite the official name being Vodafone Essar, its products are simply branded Vodafone. It offers both prepaid and postpaid GSM cellular phone coverage throughout India with good presence in the metros. Vodafone Essar provides 2.75G services based on 900 MHz and 1800 MHz digital GSM technology, offering voice and data services in 23 of the country's 23 licence areas. It is among the top three GSM mobile operators of India.

Ownership Vodafone Essar is owned by Vodafone 52%, Essar Group,33% and other Indian nationals, 15%. On February 11, 2007, Vodafone agreed to acquire the controlling interest of 67% held by Li Ka Shing Holdings in Hutch-Essar for US$11.1 billion, pipping Reliance Communications, Hinduja Group, and Essar Group, which is the owner of the remaining 33%. The whole company was valued at USD 18.8 billion.[2] . The transaction closed on May 8, 2007.In December 2006, Hutch Essar relaunched the "Hutch" brand nationwide, consolidating its services under a single identity. The Company entered into agreement with NTT DoCoMo to launch imode mobile Internet service in India during 2007.The company used to be named Hutchison Essar, reflecting the name of its previous owner, Hutchison. However, the brand was marketed as Hutch. After getting the necessary government approvals with regards to the acquisition of a majority by the Vodafone Group, the company was rebranded as Vodafone Essar. The marketing brand was officially changed to Vodafone on 20 September 2007.On September 20, 2007 Hutch becomes Vodafone in one of the biggest brand transition exercises in recent times.Vodafone Essar is spending somewhere in the region of Rs 250 crores on this high-profile transition being unveiled today.Along with the transition, cheap cell phones have been launched in the Indian market under the Vodafone brand. The company also plans to launch cobranded handsets sourced from global vendors as well. A popular daily quoted a Vodafone Essar director as saying that "the objective is to leverage Vodafone Group's global scale in bringing millions of low-cost handsets from across-theworld into India."

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Incidentally, China's ZTE, which is looking to set-up a manufacturing unit in the country, is expected to provide several Vodafone handsets in India. Earlier this year, Vodafone penned a global low-cost handset procurement deal with ZTE. In 2008, Vodafone acquired the Licence in remaining 7 circles and has started its pending operations in Madhya Pradesh/ Chhattisgarh with its headquarters at, Bhopal as well as in Orissa, Assam, North East and Bihar. India operations continue to contribute significantly to the Vodafone Group financial performance. The JV with Essar in India witnessed revenues of 2.6 billion pounds for last fiscal at 41.6% growth. Voice revenues grew by 42.2 % to 2.2 billion pounds while revenues from messaging totalled 85 million pounds at 25 % growth. Data revenues surged by 42.3 % to 148 million pounds.

Revenue Voice Revenues Messaging Revenues Data revenues Others Voic Usage ARPU Total Postpaid Prepaid

Vodafone Essar , Fiscal Highlights Fiscal 2008-09 2689 Mn Pound 2241 Mn Pound 85 Mn Pound 148 Mn Pound 130 Mn Pound 65276 Mn Min In INR Rs.274 Rs.815 Rs.229

Fiscal 2007-08 1822 Mn Pound 1515 Mn Pound 65 Mn Pound 97 Mn Pound 76 Mn Pound 46734 Mn Min In INR Rs.350 Rs.910 Rs.287

The company has more than 68 million in the country at the end of March 31, 2009. Churn rate for the company in total reached 25.2 % with prepaid witnessing 21.2 % churn and postpaid more than 28 %. The average monthly revenue per user dipped to Rs 274 from Rs 350, a year ago. For postpaid the ARPU dipped to Rs 815 from Rs 910 while for prepaid it reached to Rs 229 from Rs 287.The company is now gearing up to speed up its cost cutting measures. The company expects to register operating profit of 11 billion pounds to 11.8 billion pounds in the current fiscal.

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VODAFONE – ASSAM Vodafone launched it services in Assam on 10th September, 2008 along with its operation in whole north east circle. Vodafone initially started with 10 towns in assam and 4 towns in NE, Currently in Assam vodafone has entered 22 towns. By the year end Vodafone is planning to have its presence in all the major towns of Assam & NE. The circle office is located at, Agni Shanti Business Park, Ambari,Guwahati, headed by Mr. Anand Sahai . MARKET SCENARIO Operators

April’09

Reliance

May’09

% Growth

1425863

1425863

NIL

BSNL

891616

898328

0.75

Airtel

1622477

1684159

3.8

Aircel

1808533

1880377

3.97

190474

231625

21.6

5938963

6120352

3.05

Vodafone

Total

From the above figures it can be found out that in terms of growth Vodafone has 21.60% which is the highest which means in new acquisitions Vodafone is doing good in this market. The total market share of Vodafone in Assam is nearly 4%.

Facts and figures Total Revenue - Rs. 2.27 crores ARPU

- Rs. 204.65.

** (figures from COAI final report Oct-Dec ‘08)

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CHAPTER-II Indian Telecom Industry At 306.45 million connections Indian Telecom Industry till May 09, is the 3rd largest and fastest growing in the world. The subscriber base has grown by 40% annually and is expected to reach 250 million in 2007. Over the last 3 years, two out of every three new telephone connections were wireless. 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 grow at 2.5 million new subscribers every month in 2007. The wireless subscriber base skyrocketed from 33.69 million in 2004 to 62.57 million in FY 2004 -2005. The wireless technologies currently in use Indian Telecom Industry 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 telecommunication circles and 4 metro cities, covering more than 2000 towns across the country. And the numbers are still growing for Indian Telecom Industry is regulated by 'Telecom Regulatory Authority of India' (TRAI). It has earned good reputation for transparency and competence. Three types of players exist in ' Indian Telecom Industry community. • • •

State owned companies like - BSNL and MTNL. Private Indian owned companies like - Reliance Infocomm and Tata Teleservices. Foreign invested companies like – Vodafone-Essar, Bharti Tele-Ventures, Idea Cellular, BPL Mobile, Spice Communications etc.

The Indian Telecom Industry services are not confined to basic telephone but it also extends to internet, broadband (both wireless and fixed), cable TV, SMS, IPTV, soft switches etc. The bottlenecks for Indian Telecom Industry are: Slow reform Process. Low-penetration. Service provider’s bears huge initial cost to make inroads and achieving break-even is difficult. Huge initial investments Limited spectrum availability and interconnection charges between the private and state operators.

Key Players In Indian Telecom Industry The telecom industry of India has registered manifold growth in the recent years. Personalized telecom access is essential necessity of life for increasing number of the people. The sector offers unlimited prospects when we consider future growth. Both Public Players and Private Players are enhancing their technologies 10 | P a g e

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and taking the telecom industry to a much higher growth state. Not only service providers but also handset manufacturers are contributing significantly to the industry and economy of India. The top players in the industry are: 1) Reliance Communications Limited 2) Bharti Airtel Limited 3) BSNL 4) MTNL 5) Vodafone Essar 6) Ericsson 7) Nokia 8) Siemens Communications 9) Idea Cellular Limited 10) Tata Teleservices THE DEAL – VODAFONE AND HUTCH The deal, at last, is done. After weeks of uncertainty, Britain's Vodafone announced on February 11,2007 that it had decided to pay $11.1 billion in cash and assume $2 billion in debt to buy a 67% stake in Hutchison Essar, one of India's largest mobile operators with more than 22 million subscribers. Vodafone's purchase of the controlling interest in Hutchison Essar -- or Hutch, as it is commonly called -- from Hong Kong-based shipping and real estate baron Li Ka-Shing values the company at nearly $19 billion, which is twice as much as the first round of bidders in January thought it was worth. Four days later, the Aditya Birla group's Idea Cellular -- another large mobile phone services provider with 12.4 million subscribers -- found more than $27 billion in investor money bidding for its stock during the company's initial public offering, which had intended to raise some $480 million. The IPO was oversubscribed by 57 times, according to media reports. As both transactions show, India's mobile phone market is red hot -- which begs the question whether it is too hot. Are these enormous valuations justified by the market's growth potential? India Knowledge @Wharton spoke to faculty members from Wharton, the Indian School of Business, and other experts to find out. Their view is that while it might appear that these transactions are overvalued, the market has lots of growth potential. As such, a shakeout -- if it occurs -- is unlikely in the near future.

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Telecom Regulatory Authority of India TRAI AND ITS ROLE. The Telecommunications Regulatory Authority of India or TRAI (established 1997) is the independent regulator established by the Government of India to regulate the telecommunications business in India. Responsibilities Notwithstanding anything contained in the Indian Telegraph Act, 1885, the functions of the Authority shall be to: 1. make recommendations, either suo motu or on a request from the licensor, on the following matters, namely: i. need and timing for introduction of new service provider; ii. terms and conditions of license to a service provider; iii. revocation of license for non-compliance for terms and conditions of license: iv. Measures to facilitate competition and promote efficiency in the operation of telecommunication services so as to facilitate growth in such services. v. Technological improvements in the services provided by the service providers. vi. type of equipment to be used by the service providers after inspection of equipment used in the network. vii. measures for the development of telecommunication technology and any other matter relatable to telecommunication industry in general; viii. efficient management of available spectrum; 2. discharge the following functions, namely: i. ensure compliance of terms and conditions of license; ii. notwithstanding anything contained in the terms and conditions of the license granted before the commencement of the Telecom Regulatory Authority (Amendment) Ordinance,2000, fix the terms and conditions of inter-connectivity between the service providers; iii. ensure technical compatibility and effective inter-connection between different service providers. iv. regulate arrangement amongst service providers of sharing their revenue derived from providing telecommunication services; v. lay down the standards of quality of service to be provided by the service providers and ensure the quality of service and conduct the periodical survey of such service provided by the service providers so as to protect interest of the consumers of telecommunication services;

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vi.

lay down and ensure the time period for providing local and long distance circuits of telecommunication between different service providers; vii. maintain register of interconnect agreements and of all such other matters as may be provided in the regulations; viii. keep register maintained under clause (viii) open for inspection to any member of public on payment of such fee and compliance of such other requirement as may be provided in the regulations; ix. ensure effective compliance of universal service obligations: 3. levy fees and other charges at such rates and in respect of such services as may be determined by regulations. 4. perform such other functions including such administrative and financial functions as may be entrusted to it by the Central Government or as may be necessary to carry out the provisions of this Act: o Provided that the recommendations of the Authority specified in the clause (a) of this sub-section shall not be binding upon the Central Government: o Provided further that the Central Government shall seek the recommendations of the Authority in respect of matters specified in sub-clauses (i) and (ii) of clause (a) of this sub-section in respect of new license to be issued to a service provider and the Authority shall forward its recommendations within a period of sixty days from the date on which that Government sought the recommendations: o Provided also that the Authority may request the Central Government to furnish such information or documents as may be necessary for the purpose of making recommendations under subclauses (i) and (ii) of clause (a) of this sub-section and that Government shall supply such information within a period of seven days from receipt of such request: o Provided also that the Central Government may issue a license to a service provider if no recommendations are received from the Authority within the period of specified in the second provision or within such period as may be mutually agreed upon between the Central Government and the Authority. o

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Provided also that if the Central Government having considered that recommendation of the Authority comes to a prima facie conclusion that such recommendation cannot be accepted or needs modifications, it shall, refer the recommendations back to the Authority for its reconsideration, and the Authority may within fifteen days from the date of receipt of such reference, forward to the Central Government its recommendation after considering the reference made by the Government. After receipt of further recommendation, if any, the Central Government shall take a final decision.

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NEW TELECOM POLICY-1999 Availability of affordable and effective communications for the citizens. • •

•

•

• • • •

• • • • • • • • •

To achieve a teledensity of 7 by the year 2005 and 15 by the year 2010; to improve rural teledensity from the level of 0.4 to 4 by the year 2010. Create a modern, efficient and world class Telecommunications infrastructure taking into account the convergence of IT, Media, Telecom and Consumer Electronics. Convert Public Call Offices (PCO’s) into Public Tele-info Centers having multi-media capability like ISDN Services, Remote Database Access, Government and Community Information Systems etc. Transform in a time-bound manner, the Telecommunications Sector to a greater competitive environment in both urban and rural areas providing equal opportunities and level playing field for all players. Strengthen Research and Development efforts in the country and provide an Impetus to build world class manufacturing capabilities. Protect Defence and Security interest of the country. Enable Indian Telecom Companies to become truly Global Players. This Policy frame work focuses on creating an environment, which enables continued attraction of investment in the sector and allows creation of Telecommunications infrastructure by leveraging on Technological developments. The New Telecom Policy frame work looks at the Telecom Service Sector as follows: Cellular Mobile Service Providers, Fixed Service Providers and Cable Service Providers, collectively referred to as ‘Access Providers’. Radio Paging Service Providers. Public Mobile Radio Trunking Service Providers. National Long Distance Operators. International Long Distance Operators. Global Mobile Personal Communication by Satellite (GMPCS) Service Providers. VSAT Based Service Providers. Other Service Providers.

DISPUTE RESOLUTION IN TELECOM SECTOR
With a view to provide a level playing field in a competitive environment, the Government of India in 1997 established a statutory and autonomous regulator viz., The Telecom Regulatory Authority of India (TRAI) under the TRAI Act 1997.
With a view to further strengthen the regulator the TRAI Act, 1997 was amended in the year 2000 and a separate body viz., The Telecom Dispute Settlement and Appellate Tribunal (TDSAT) was constituted for resolution of disputes in Telecom Sector. 14 | P a g e

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FUNCTIONS OF TDSAT
The TDSAT is Empowered to adjudicate any dispute between: • • •

Licensor and a Licensee. two or more Service Providers. a Service Provider and a Group of Consumers.


The Appellate Tribunal shall be guided by the Principles of natural justice and have powers to regulate its own procedure.
The Appellate Tribunal has the same powers as are vested in a Civil Court, while trying a Suit, in respect of following matters, viz., • Summoning and enforcing the attendance of any person and examining him on oath. • Requiring the discovery and production of documents. • Receiving evidence on Affidavits • Requisitioning any public record or document or a copy of such record or document from any office. • Issuing commissions for the examination of the witnesses or documents. • Reviewing its decisions. • Dismissing an application for default or deciding it, ex-parte. • Setting aside any order of dismissal of any application for default or any order passed by it, ex-parte, and • Any other matter which may be prescribed. Not withstanding anything contained in the Code of Civil Procedure, or any other Law, an Appeal shall lie against any Order, not being an Interlocutory Order, of the Appellate Tribunal to the Supreme Court of India on one or more of the grounds specified in Section 100 of that Code. The Appellate Tribunal consists of a Chair-Person and two Members appointed by the Central Government.The Selection of Chair-Person and Members of the Appellate Tribunal is made by the Central Government in consultation with the Chief Justice of India. COMPETITION AND VODAFONE The operator ended the year with revenues of £2,689 million. However, business environment is becoming increasingly tough with competitive pressure growing. Vodafone’s average revenue per user declined by as much as 28% during the year. Driven by a strong growth in India, mobile operator Vodafone Group Plc today reported 16.7 per cent increase in operating profit at 11.8 billion pound in its worldwide operations for the year ended March 31, 2009. Vodafone Essar, the British group's Indian venture, reported a 33% growth in revenue on a pro forma basis, with growth in the fourth quarter of 27.7% at constant exchange rates. Net customer additions in India averaged 2.1 million per month, and the 15 | P a g e

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launch of services in seven new circles, bringing the closing customer base to 68.8 million. According to the data released by the group on Friday, the company’s Indian operators ended the year with revenues of £2,689 million against £1,822 million during the previous year. EBITDA grew by 5% on a pro forma basis. While the India continues to add millions of subscribers every month, competitive pressure too is growing and Vodafone felt it throughout the year. Lower effective rates per minute and fall in usage per customer, increase in licensing costs (as discounts received from the regulator in some service areas were terminated) were among the factors that put pressure on growth, the company said in a statement. Vodafone’s average revenue per user (ARPU) declined by as much as 28% during the year. In the first quarter of the year, ARPU was Rs. 350 while in the last quarter it was Rs. 274.On the positive side, customer costs as a percentage of revenue decreased, benefiting from economies of scale. Visitor revenue grew at a slower pace due to the impact of economic pressures as people travel less. Lower effective rates per minute, reflecting price reductions earlier in the year, coupled with the continued market shift to lifetime validity prepaid offerings, led to a reduction in customer churn. Also, infrastructure sharing has played a significant role in helping Vodafone sustain growth, especially in the fourth quarter. The operator benefited significantly from its network sharing venture Indus Towers, which launched during the first half of the year. “Growth in the fourth quarter in India remained stable in comparison to the third quarter as the eight percentage point benefit of the new revenue stream from the network sharing joint venture offset the slowing underlying growth rate,” the company said. The company invested £1.4 billion in capital expenditure in India to drive growth or around 17% of the total group spending of £5.9 billion. Network expansion continued, with an average of 2,600 base stations constructed per month, primarily in the new circles. Site sharing increased and Indus Towers steadily increased its operations throughout the rest of the year, with 95,000 sites under its management at the end of March 2009. "We have continued to drive penetration in India, generating strong revenue growth from our brand and commercial offers and a substantial investment in network coverage. Indus Towers, our infrastructure joint venture with Bharti and Idea, began operating during the financial year. We expect Indus Towers will enable Vodafone to increase its capital efficiency in India and also to benefit from revenue generated from selling capacity to other operators,” the company said in the statement released on Friday. Vodafone is expecting India to continue to drive growth this year as well. As such, it will continue to invest significantly in India. Capital expenditure is expected to be similar to last year after adjusting for foreign currency.

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CHAPTER- III Vodafone - Operations This section explains how Vodafone operates, from the key assets it holds to the activities it carries out to enable the delivery of products and services to the Group’s customers. TECHNOLOGY & RESOURCES SERVICES

PEOPLE

BRAND & DISTRIBUTION

PRODUCT and

Mobile network technology 2G Vodafone operates 2G networks in all its mobile operating subsidiaries, through Global System for Mobile (“GSM”) networks, offering customers services such as voice, text messaging and basic data services. In addition, all of the Group’s controlled networks operate General Packet Radio Services (“GPRS”), often referred to as 2.5G. GPRS allows mobile devices to be used for sending and receiving data over an IP based network, enabling wireless access to data networks like the internet. The GPRS data service offering includes internet and email access, allowing the customer to always be connected at download speeds slightly below a dial-up modem. In some markets, Vodafone continues to further evolve data speeds with 2G evolutions beyond GPRS capability.

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3G Vodafone’s has 3G networks in some countries but in India it is still awaiting licence from the DOT to launce its services. Operating on the Wideband Code Division Multiple Access (“W-CDMA”) standard, provide customers with faster data access. Vodafone has expanded its service offering on 3G networks with high speed internet and email access, video telephony, full track music downloads, mobile TV and other data services in addition to existing voice and data services.

Brand and Distribution Vodafone’s products and services are available directly, via Vodafone stores and country specific Vodafone websites, and indirectly via third party service providers, independent dealers, distributors and Retailers, to both consumer and business customers in the majority of markets under the Vodafone brand.

Vodafone Primary Sales

Disributor Secondary Sales

Retailer Tertiary Sales

Consumer DISTRIBUTION AND CHANNEL OF SALES AT VODAFONE Vodafone distribution channel in India normally contributes roughly 85-90 % of total business volumes. The distribution Model comprises basically comprises of three entities1. A distributor who is given a territory to service. 2. A Distributor FOS (“Feet on Street” on payroll of the distributor) who is appointed by the distributor to service a particular area of his overall territory. 3. A Retailer who is an entity who purchases stock from the distributors. Through the FOS of his area) and sells it to the end consumer. 18 | P a g e

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Other channels like Company owned Retail such as Vodafone ministores &Vodafone stores are also used as Distribution channel and are generally seen to be contributing to around 10-15 % of a telecom company's subscriber base as well as revenues.

Vodafone- Products & Services The product and services of Vodafone in India may be primarily divided into following categories: • • • • • •

VOICE MESSAGING DATA FIXED LINE HANDSET VODAFONE MOBILE CONNECTS.

Now these services can again be categorised into two segments o the basis of realisation of the price from the customer. •

PREPAID

• POSTPAID In Assam Vodafone has however not launched its all the service as it has just started its operation here. However the following services are available for consumers in Assam. • • • • •

VOICE MESSAGING DATA HANDSET VODAFONE MOBILE CONNECTS.

HANDSETS Now regarding handsets, Vodafone has various models in offering for its customers at affordable prices. Some models are:Model Vodafone Colour Magic box with speaker Vodafone Magic box with torch Radio Magic box 226 FM Radio Magic box 225 FM Colour Magic box Black and White Magic box Flip Magic box 227 Slider Magic box 228 FM 19 | P a g e

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Price (Rs) 1299.00 1199.00 1599.00 1599.00 1299.00 1199.00 1899.00 2399.00

The products offered in Assam are as follows:-

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CHAPTER-IV

RESEARCH METHODOLOGY Research Objectives:•

To understand the Retailers preference in telecom sector telecom Sector.

•

To study the service providers and their service quality in the telecom Sector.

•

To study the Retailer satisfaction and understand the current Market scenario in Telecom Sector.

Samples:Sample size

: 150

Sample frame

: Guwahati city

Sampling Method : Stratified random sampling Constraints

:

Time, number of respondents

Sampling error

:

Non-response- 35 Response- 115

Survey

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:

Questionnaire

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OBSERVATION AND FINDINGS 1. SALES FREQUENCY A) Which company’s sales person visits you the the most?

Operator As per need Daily Once Thrice Twice

Total

Airtel 3 77 2 17 2 100

Aircel 8 64 3 23 3 100

BSNL 21 11 35 20 13 100

RTL 8 50 4 31 7 100

Vodafone 3 73 1 23 1 100

Percentage of sales person’s visit to the Retailers.

From the above date we can analysis we can easily find out that the daily visit of Airtel’s sales person is the highest. From a Retailers point of view, it is always expected that the sales person of a company i.e (FOS & DSE) gives him a daily visit. So from this analysis it can be clearly found out that Retailer’s are most satisfied with Airtel and Vodafone in terms of sales frequency. So here Airtel is ahead with a daily visit of 77% to the retailers followed closely by Vodafone with 73%. However Aircel is also very close with 64%. But both BSNL and Reliance are very far behind ,having 11% and 50% respectively are far from Airtel and Vodafone in terms of sales frequency, and as such Retailers are not very satisfied working for the said companies.

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B. SALES PERSON (FOS/DSE) Which company’s sales person is better as compared to other?

As per the data gathered, it can be analysed that Airtel’s sales person is the best sales person which can be inferred from bar chart where Airtel has got 34% and is followed by Vodafone with 29%. Whereas Aircel with 22%, Reliance with 12% and BSNL with 3% are lagging behind in terms of Retailer satisfaction with these company’s sales person. The major reasons behind the fact that Airtel is the clear winner in case of sales person can be summarised as; Airtel’s sales person are a good listener, they inform in advance about the schemes to the Retailer, provide quick service and are efficient, are co-operative and helpful, have quick problem solving ability, receives Retailers call and reverts back in time, behaves like a friend, educates and update Retailers about various schemes and product, resolves complaints quickly, whenever needed visits the Retailer twice in a day, has got serious attitude towards his job, behaves decently, and if at times need provides credit to the Retailer for a single day in case of Easy-Recharge. So here we can clearly see that higher the visit of sales person, the more satisfied the retailer is. So sales frequency has a direct co-relation with the satisfaction level of the retailers. This can be ascertained by looking into the first chart where sales frequency has been depicted. 23 | P a g e

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2.PRICING Which company has got the best pricing?

From this analysis it can be gathered that in terms of pricing the clear verdict of Retailers goes to Vodafone with 56%. The other service provider are a no match to Vodafone strong pricing strategies with Airtel having 20% , Aircel with 14%, Reliance with 9% and BSNL having just a meagre 1% of Retailers verdict. The major reasons behind the fact as to why Retailers have voted for Vodafone as having the best pricing is that presently Vodafone is having an edge over other operators because of its good offerings and customer schemes with new connection like, • • • •

Rs.10 inbuilt talk time, Chalta rahe valdity 200 minutes free Vodafone to Vodafone calls Rs. 39 bonus cad free.

And all this are free with every Rs.99 new prepaid connection.Whereas no other operator is offering so much with Rs.99 new prepaid connection. This is the reason why most Retailers said that Vodafone’s product is worth the value and is appropriately priced. 24 | P a g e

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3.PRODUCTS WORTH THE VALUE AND APPROPRIATELY PRICED Which company’s product and services are worth the value and are appropriately priced?

WORTH THE VALUE AND APPROPRIATELY PRICED 70 60

VODAFONE, 59

50 40 30 BSNL, 20

20

RTL, 10

10

AIRCEL, 10

AIRTEL, 1 0

Now from the responses given by the Retailers it is clear that Vodafone’s product and services are worth the value and are appropriately priced with 59%. Here it can be very clearly seen from the bar chart that according to the Retailers surveyed no other company’s product are either worth the value or are appropriately priced when compared to Vodafone. BSNL with 20%, Reliance and Aircel with 10% each and Airtel just surviving with 1%. The reason for such fact can be accredited to the fact that Vodafone has got the best pricing strategies among all other operators which has already been discussed earlier.

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4.PRODUCTS EASY TO SELL. For Retailers which company’s product is easy to sell.

PRODUCTS EASY TO SELL 50 45 40 35 30 25 20 15 10 5 0

AIRTEL, 43

VODAFONE , 28 AIRCEL, 17 RTL, 11 BSNL, 1

As per the data it can be analysed that for 43% Retailers Airtel’s product is very easy to sell with , followed by Vodafone at 28%, Whereas Aircel is at 17%, Reliance at 11% and BSNL at only 1%. Now surprisingly in the earlier question only 1% of retailer agreed that the Airtel has product worth its value, but even then most retailer are saying that Airtel products are easy to sell. After going through the open-ended questions the major reasons underlying such response can be found out to be are:• • • • • • • •

Good demand from customers Price supported by good network availability in the state Fast processing of documents i.e fast verification and activation Easy for Retailers to convince customers Satisfied customers bring new customers Activation of sim card within the same day No network congestion providing more customer satisfaction. Good relationship from the FOS.

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5.OVERPRICING OF PRODUCTS. Which company’s product is considered overpriced?

Regarding overpricing of products and services Retailers feel that Reliance products and services are overpriced with 37% closely followed by Airtel at 29% whereas BSNL at 20%, Aircel at 13% and Vodafone only at 1%. This clearly corroborates the earlier response where Retailers found that Vodafone products are appropriately priced. The major reason why Reliance is voted as having the most overpriced product and services are that Reliance provides less customer benefits in other words prices of products are more than benefits provided. Moreover at Rs.50 connection there is no talk time and validity, RCV talk time less than others, poor network availability, less availability of cards, network congestion and customer harassment, Lifetime connection at Rs.199(far more than others),service not according to price charged and regarding connection sale Retailers margin is very less as compared to what competitors are offering.

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6.PROFIT MARGIN Which company is offering the best profit margin to the Retailers?

From the analysis it can be inferred that regarding profit margin Aircel is the clear winner with 47%. Vodafone coming in the second with 25%, Airtel at 14%, Reliance at 12% and BSNL at just 1%. The main reason for Aircel becoming the winner is that it gives Rs.49 per connection to the Retailer who sells it to the end customer for Rs.99, whereas at this margin even increases upto Rs.65 – 70 when Retailers schemes goes on. On the other hand Airtel offers just Rs.35 and Vodafone offers Rs.40 to the Retailers for each new connection being sold by the Retailer.

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7.BETTER REAL PROFIT.

With which companies product Retailers are able to get better real profit and are able to charge premium.

From the chart it is clear that with Aircel at 47% the Retailers are able to get better real profit and charge premium. Vodafone is at 27% while Airtel at 17%, Reliance at 10% and BSNL at just 1%. Here the reason for such figures can be corroborated with those gathered for profit margin. It clearly suggest that Retailers are able to get better real profit and are able to charge premium from customers only for connections of those companies where the profit is the highest. 29 | P a g e

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8.EASY TO SELL AND LIKE TO SELL THE MOST. Which company’s connection are easy to sell for the Retailer even when there is low real profit and like to sell the most?

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As per the research it was found out that Retailers feel that it is easy to sell Airtel connection even if there is low real profit with Airtel getting 41% which is followed by Vodafone at 25%, Aircel at 21%, Reliance at 12% and BSNL at 1%. Similarly if we analyse the next bar chart we can see that majority of Retailers like to sell Airtel connection where Airtel got 35% closely followed by Vodafone at 28%, Aircel at 14%, Reliance at 13% and BSNL at 1%. The major reason as to why Airtel is voted as the company whose connections are easier to sell even when is low real profit and is liked by Retailers to sell the most are:•

Easy to convince and sell

•

Good network strength and availability

•

More demand from customer

•

No harassment for both Retailer an customer

•

More Retailers turnover The turnover with Airtel connection is more because the ratio of sale between Airtel and Aircel i 3:2 that means for every 3 connection of airtel only 2 connection of Aircel is sold. So 3* Rs.35 = Rs.105 (for Airetl) whereas, Its 2* Rs.49 = Rs.98 (for Aircel). In addition to these other reasons are,

•

Good schemes floated by Airtel

•

Schemes easier to achieve and more help from co. In achieving targets

•

Better service quality

•

Fast processing in terms of verification,sim delivery and activation of sim cards

•

Timely availability of RCV and Esay-Recharge

•

Less network congestion and

•

Overall customer satisfaction.

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9.PRODUCTS TOUGH TO SELL EVEN WHEN HIGH PROFIT. Which company’s product is tough to sell for the Retailers even high profit margin is there?

TOUGH THE SELL EVEN WHEN HIGH PROFIT 45

RTL, 40

40

BSNL, 36

35 30 25 20 15

AIRCEL, 10

VODAFONE, 9

10

AIRTEL, 5

5 0

As per the findings from the above chart it can be found out that Reliance with 40% has got the product and service which Retailers find the most difficult in selling, followed by BSNL at 36%, Aircel at 10%, Vodafone at 9% and Airtel at 5%. So overall it can be said that Reliance and BSNL has got the products and services which the Retailer find the most difficult in terms of sales. The major issues underlying such verdict from the Retailers can be summarised as follows:• • • • • • • • • • • • • • • •

Less demand from customers Less benefits for customers Slow processing i.e verification and activation Late sim-card delivery Harassment to both Retailer and customer Poor and congested network Poor response from company people Lack of problem solving attitude of the co.people Network availability in limited places Poor margin doesnot motivate Retailers Less attractive schemes Poor claim settlement resulting in Retailers capital being blocked Price of rate cutters more Lack of frequent visit of sales person and their poor attitude Lack of card availability Poor service quality of the company All these factors make both Reliance and BSNL the less preferred choice of Retailers in terms of selling these companies product and services.

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10. SCHEMES Which companies Retailers schemes are better as compared to other, easier to achieve and the Retailer equivalently helped by the company people in achieving this schemes?

BEST RETAILERS SCHEMES 50 45

VODAFONE, 44

40

35 30 25 20 15 10 5 0

AIRCEL, 22AIRTEL, 23 RTL, 11 BSNL, 0

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VODAFONE, 45

AIRTEL, 25 AIRCEL, 18 RTL, 12

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COMPANY HELPS THE MOST IN ACHIEVING SCHEMES

50 45 40 35 30 25 20 15 10 5 0

VODAFONE, 44

AIRTEL, 26 AIRCEL, 19 RTL, 10 BSNL, 0

Now if we analyse all the three charts in the row we can find out that in terms of schemes Vodafone tops in all these three charts with, • • •

Best schemes Vodafone Easy to achieve- Vodafone Co. Helps the most- Vodafone -

44% 45% 44%

Which is then followed by Airtel , Aircel, Reliance and BSNL. On clearly analysing the open-ended questions the reason for such findings that the schemes floated by Vodafone are better as compared to others, which are easier to achieve and the company people from Vodafone also helps the Retailers a lot in achieving Retailers target a lot, can be attributed to the fact that Vodafone people co-operate with the Retailers and motivate them a lot. Regarding schemes other company usually give away Easy-Recharge in place of gift, but Vodafone give away gifts and cash most of the time which is liked by the Retailers. Vodafone sales person informs the Retailers about the scheme in advance ,which gives Retailers enough time to plan as to how to go for such schemes and achieve it. 34 | P a g e

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11. CLAIM SETTLEMENT. With which companies claim settlement Retailer is most satisfied and with whom most dissatisfied?

SATISFIED WITH CLAIM SETTLEMENT 50 45 40 35 30 25 20 15 10 5 0

VODAFONE, 44 AIRTEL, 32

AIRCEL, 15 RTL, 9 BSNL, 0

DISSATISFIED WITH CLAIM SETTLEMENT RTL, 38

40 35 30 25

VODAFONE, 20 AIRCEL, 17 AIRTEL, 14

20 15

BSNL, 11

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Claim settlement of schemes is also one another criterion of finding out the satisfaction level of Retailers because of which they show particular kind of behaviour while dealing with the products and services a concerned company. Now if we analyse the first bar-chart relating to satisfaction in terms of claim settlement we see that Vodafone is the clear winner with 44%, followed by Airtel with 32% ,Aircel with 15% , Reliance with 9% and BSNL with none. The reason for this is that Vodafone settles it claim with Retailers in the least possible time. Out of 106 Retailers , 45 Retailers voted in favour of Vodafone. The average time taken by Vodafone to settle the claim came at around 20 days which is good when compared to others. Now coming back to dissatisfaction in terms of claim settlement regarding schemes Reliance tops the chart with 38%, followed by Vodafone at 20%, Aircel with 17%, Airtel at 14% and BSNL with 11%. The reason behind Reliance topping the chart in terms of dissatisfaction of Retailers regarding claim settlement is that most of the distributors of Reliance are least bothered for the Retailers once the scheme is over and the lack of proper attitude from co. people to resolve Retailers issues relating to claim settlement. In majority of the cases either the claim amount is pending for over six month period of time or at times it has been alleged that sales person have cheated Retailers of the amount the Retailers were about to receive.

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12. SERVICE QUALITY. Which company’s service quality is better as compared to other and with company Retailer are satisfied being associated with and feel motivated to influence customer for?

SERVICE QUALITY 45 40 35 30 25 20 15 10 5 0

AIRTEL, 41

VODAFONE, 34 AIRCEL , 19

RTL, 6 BSNL, 0

RETAILER SATISFIED BEING ASSOCIATED WITH 45 AIRTEL, 39

40 VODAFONE, 34

35 30 25

AIRCEL, 18

20 15 10

RTL, 9

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RETAILERS FEEL MOTIVATED TO INFLUENCE CUSTOMER FOR 45 AIRTEL, 39

40 VODAFONE, 34

35 30 25

AIRCEL, 21

20 15 10

RTL, 7

5

BSNL, 0

0

Satisfaction and dissatisfaction of Retailer regarding a particular service provider largely depend upon the service quality of a particular telecom operator. Here when we talk of service quality of a particular service provider it basically comprises of five vital components or factors viz:•

Companies fast responsiveness to a problem

•

Company having helping attitude

•

Company abiding by the time frame promised

•

Company having empathetic look

•

Company whose dealings are reliable

i.e basically to say the RELIABILITY,TIMELINESS,ATTITUDE,EMPETHY, and ,RESPONSIVENESS of a particular service provider. Now if take all the three charts into account it is clearly visible that Airtel is the best in terms of service quality and it scored on all these factors and parameters well. Because of the reason that its service quality is best as compared to others Retailers are satisfied being associated wih the company and they also feel motivated to influence customers for Airtel. The percentage it scored in all these three charts are :-

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•

Service quality

-

41%

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Retailers satisfied being associated with -

•

Retailers motivated to influence customer for- 39%

39%

Which is closely followed by Vodafone , Aircel, Reliance and BSNL. The major reasons behind as to why Retailers voted Airtel in this parameter are :•

Less harassment to both Retailer and customer

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Overall satisfaction to both Retailer and customer

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Problem solving attitude of company people

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Fast service and processing

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More turnoverfor Retailers

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Co-operative FOS and sales people

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Excellent distributor service

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Good network availability

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Less network congestion

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Fast response from FOS and DSE.

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13. MOST IMPORTANT FOR RETAILER. Which is the most important aspect for a Retailer from business point of view?

IMPORTANT FOR RETAILER FROM BUSINESS POINT OF VIEW 60 NTWRK/SRV, 51 50 40 30 MRG&SCHM, 19

20

DSE & FOS, 19

DSTR SRVS, 11 10 0

From the survey an attempt was also made to find as to what is the most important for a Retailer whether its the network or services of a service provider or the Retailers own margin and scheme that he gets from a operator or whether its the efficient service of a distributor which gives him an extra mile or its the efficiency in service of the DSE or FOS. But analysing the chart we can find out that majority of the Retailers vetoed for NETWORK and SERVICE of a service provider which got 51% , followed by RETAILERS MARGIN AND SCHEME and SERVICES OF DSE AND FOS at 19% and lastly comes the DISTRIBUTOR SERVICE at 11%. The reason behind such response is that majority of the Retailers feel that if the network and service of a operator are perfect other things will follow themeselve. The main aim behind framing such a question was to know as to what is the hidden impulse of Retailers in general is, either it is only to earn profit or whether they have any concern for the other allied services provided by a service provider. Getting responses of such questions largely help marketers to get the pulse of the Retailers and help them in designing appropriate strategies to provide utmost satisfaction to both Retailers and end consumers. 40 | P a g e

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14. AVERAGE AMOUNT SPENT IN A NEW CONNECTION. What is the average amount that is spent by a customer in getting a new connection and the usual amount of first recharge? From the analysis of the data and response sheet it was found that presently in Assam circle the average amount spent by a customer in getting a new prepaid connection varies from Rs.49 to Rs.99. This is mainly because of the reason that presently all the operators are floating nearly similar customer scheme whereby a new prepaid connection is available at Rs.49 without any talk time and validity and Rs.99 new prepaid rolling connection with inbuilt Rs.10 talk time. Some service providers are giving additional benefits within the same retail price in order to lure customers with attractive offerings. Now regarding the average amount of first recharge out of the 115 Retailers’ surveyed response could only be gathered from 79 Retailers and after the analysis it was found out that the average amount of first recharge is Rs.60. This figure is only a indicative one as amount of first recharge varies from operator to operator and any new scheme prevailing at the time when the new connection is taken. 15. FACTS AND FIGURES RELATING TO HANDSETS Which handset is mostly demanded by customer, the average amount a customer wants to spend for it, the features normally a customer wants and which handset the Retailer push or prefer selling the most? From the survey conducted and from the analysis of the response of Retailers in the Excel sheet following information has been gathered:Type of handset mostly demanded by the customer•

VODAFONE HANDSETS

Average amount customer wants to spend – •

Rs. 1739 (Rupees one thousand seven hundred and thirty nine)

Features normally customers asks for – •

FM and COLOUR DISPLAY

Handset Retailers push or prefer selling the most – • 41 | P a g e

VODAFONE HANDSETS

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The reason as to why Vodafone handsets are mostly demanded by the customer is that , Vodafone are handsets are very well priced and with the Magic Box 225 customers are able to get handset along with sim card only at Rs.1299 and moreover because of the reason that Vodafone handsets are compatible with sim cards of other operator too .The average amount that a customer wants to spend for a handset came at around Rs. 1740(approx) and within this price range the features generally asked by the customer is that the handset should have colour display and FM radio reception. The reason as to why most Retailers prefer selling Vodafone handset is that it comes with two years replacement warranty which gives both Retailers and the customers’ peace of mind. From the survey it has also been found out that mostly the old and the aged customers gives a price range to the Retailers while purchasing a handset and are not too much bothered about the brand as to whether its Vodafone, Nokia or Haier. Whereas young customers(i.e youth) generally prefer buying branded handsets, and are not too much concerned about the price range.

16. MODUS OPERANDI OF THE RETAILER. How you acquire more customers and what additional help do you need from a service provider to increase your business further?

From the survey it was found out that, Retailers in order to acquire more new customers generally do the following :-

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At times even sell RCV at credit

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Provide free connection

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Float schemes by reducing own margin

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Use canopy in nearby offices, colleges and organisations.

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Appointing sales person and generating lead

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Provide free service like photocopying of documents etc for customer

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Provide SMS alert to selected customer

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Give free gits like Parker pen and T-shirts with postpaid connection and small gifts with prepaid connection.

And regarding help from a particular service provider to increase their business further they generally want the operator to do the following:• Should come up with more attractive Retailers schemes • Should give credit on RCV and Easy-Recharge • Should appoint new Retailers at a fixed distance i.e there should be some amount of minimum distance between two Retailers • Provide glowsign at the Retailers point and decorate the shop with attractive advertisements • Increase RCV margin • More good schemes for customers, which will increase sales • Fast processing(i.e verification, simdelivery & activation ) • Should upgrade profitable Retailers point as bill payment centre • Efficient distributor service • Should keep handset stock with Retailers • Timely availability of cards • Efficient FOS/DSE service.

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CONCLUSION AND RECOMMENDATION CONCLUSION Now taking into account the observation and findings and considering the parameters set in the questionnaire it can be concluded that out of the seven essential parameters i.e, •

Sales Frequency

•

Sales Person

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Pricing

•

Profit Margin

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Schemes

•

Claim Settlement and

•

Service Quality;

in three parameters i.e Sales frequency, Sales person and service quality Airtel is ahead, though it is closely followed by Vodafone. In the other three parameters i.e pricing, schemes and claim settlement Vodafone is ahead but closely followed by Airtel. Whereas Aircel is ahead only in case of profit margin. So here we can clearly see that both Vodafone and Airtel are focussing on better service quality as a sales and distribution strategy, however for Aircel the primary strategy is to lure the retailers with high profit margin. From the observation and the findings of the survey it comes out clearly that the retailers play a very vital role in acquiring customers by influencing their decision making in favour of the service provider which the retailers likes the most. It also comes out clearly that profit margin is not the only reason for which a retailer sells a particular brand but other aspects such as service quality, pricing of products and services, timely settlement of claims are equally important. The survey also brings out clearly that even though Vodafone is very new entrant to this market has pretty well occupied the mind share of the retailers with its 44 | P a g e

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attractive pricing, quality service in terms of quick retailer claim settlement, good service frequency and attractive retailer schemes. However from the survey it has also clearly come out that no doubt being a new entrant it has quite well garnered the faith and belief of retailers but there are certain problem areas for Vodafone too. A segment of retailers feel that there is more DSE/FOS churn in case of Vodafone as a result of which the retailers are not able to build up a good bonding with them which is there in case of Airtel and this can clearly be corroborated from the bar chart of sales frequency and sales person. Similarly another segment of the retailers feel that there is a scope of improvement in the case of Vodafone’s distributor service. As it is a known fact that for retailers the first point of contact is DSE/FOS who represent distributor, so any of service in their part directly and proportionately effects the quality of service of distributor which ultimately effects the service quality of the service provider. An another problem area identified with Vodafone is the network availability, which is not there like other operators who have started their operations much before Vodafone entered in this market. As a result of which retailer does not feel comfortable in influencing a customer who needs extensive network within the state. Along with this an another reason why retailers have ranked Vodafone as next to Airtel is because of the fact of slow service and processing of documents, whereby both retailers and customers face harassment in terms of verification, sim delivery and activation. So if these problem areas are being worked upon by the Vodafone there is every possibility in the near future that Vodafone will definitely surpass all other competitors and will be the preferred service provider of the retailers.

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RECOMENDATIONS TO VODAFONE After the completion of the whole survey and going through the observations and findings, I would like to put forward certain opinions from my end, which will definitely help Vodafone as a service provider to increase the satisfaction level of retailers. My recommendations are:•

Regarding sales frequency, Vodafone should try to increase the sales frequency of its DSE/FOS. As they are the one who represents the company in front of the retailers, so their regular visit highly impacts the behaviour of the retailer and creates a better bonding between the retailer and company.

•

Vodafone should try to increase the efficiency of its sales person. Proper training should be given to them where they should be told as how to improve relation with the retailers, become a good listener, perform their duties efficiently so that overall satisfaction level of retailers can be increased.

•

Now regarding the Service Quality, Vodafone should try to improve its overall service quality by responding to the problems of retailers in time, by incorporating a more helping attitude, by providing fast service and having an empathetic look towards the retailers problem.

•

There should be constant monitoring of the distributors activities as any lapse in duties from their end highly effects the retailers and bring bad name for the company. As from the survey it came to light that a lot of retailers are there who just because of lack of proper distributor service give away business to other rival service provider.

•

Vodafone should try to stop frequent DSE/FOS churn done by the distributors, which is not appreciated by the retailers. Because of high DSE churn retailers feel that they are not able to have a proper bonding with them which is most required to serve the customers well.

•

From the survey it also came to light that Vodafone is slow in processing (i.e verification, simcard delivery and activation) as a result of which retailers face harassment and do not feel motivated to influence customers for Vodafone. As a result of which lot of business for Vodafone actually gets churned away to other operators who provide fast processing. So Vodafone should also try to improve upon this factor.

• Vodafone as a new entrant should try to match the network availability with other operators operating within the state,in the absence of which retailers find it difficult to convince customers on the ground of network coverage. 46 | P a g e

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ABBREVIATIONS VAS- Value Added Service WAP- Wireless Application Protocol DoT- Department of Telecom TRAI- Telecom Regulatory Authority of India BSNL- Bharat Sanchar Nigam Limited GSM- Global System for Mobile communications COAI- Cellular Operators Association of India GPRS- General Packet Radio Service DSE- Distributor sales Executive FOS- Feet on Street RTL- Reliance Telecom Limited TDSAT- Telecom Dispute Settlement Appellate Tribunal CDMA- Code Division Multiple Access RCV- Re-Charge Voucher SMS- Short Messaging Service SIM- Subscriber Identification Module MTNL- Mahanagar Telephone Nigam Limited

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BIBLIOGRAPHY Books: Management Research Methodology, by K.N.Krishnaswamy, Appa Iyer Sivakumar, M.Mathirajan Reports: COAI Report of May’ 09 COAI Report of Quarter Oct-Dec’08 Articles: Thesis on “Critically analyze the customer preference and satisfaction measurement in Indian Telecom Industry”by Naman Shah, submitted at IIPM, Ahmedabad. Websites: 1. www.vodafone.in 2. www.dot.gov.in 3. www.google.com 4. www.trai.gov.in 5. www.coai.com 6. www.wikipedia .org 7. www.pdfcoke.com 8. www.thehindubusinessline.com

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ANNEXURES 1. Questionnaire for Retailers. 2. Response collected and analysed in Excel Sheet. 3. Tariff chart for Prepaid. 4. Tariff chart for Post-paid. 5. List of Retailers visited.

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