Telecommunication Landline

Telecommunication (landline)

In the guidance of: Sir Hemant Kombrabail

Presented by: Bijoy Takekar Aakash Patil Riddhi Shah

Introduction In today’s world it is hard to imagine the growth and modernization of various sectors in the economy without proper telecommunication services. Telecommunication in India is one of the most sophisticated and also an essential system of communication for people from every section of the society. Its importance has increased in recent years because of the Information Technology industry. Providing a world class telecommunication infrastructure is the need of the hour Telecom is one of the fastest growing sectors in India with a growth of 21% and revenue of Rs 86,720 crore in the year 2006. The sector is expected to grow over 150% by 2012. With increase in competition between the major players like BSNL, MTNL, Hutchison , Idea, Bharti Tele services, etc. Indian Telecommunication industry, with about 464.82 million phone connections (June 2009), is the third largest telecommunication network in the world and the second largest in terms of number of wireless connections. For the past decade or so, telecommunication activities have gained momentum in India. Efforts have been made from both governmental and non-governmental platforms to enhance the infrastructure. The idea is to help modern telecommunication technologies to serve all segments of India’s culturally diverse society, and to transform it into a country of technologically aware people. The Government of India has played a major role in the development of telecommunication sector. Established in 1985, Department of Telecommunications (DOT) was the first government division to provide domestic and long-distance telephone service in India. In 1986, DOT created Mahanagar Telephone Nigam Limited (MTNL) for telephone services in metropolitan cities and Videsh Sanchar Nigam Limited (VSNL) for international telecommunications as its wholly owned subsidiaries. Later on, in 1997 Telecom Regulatory Authority of India was formed. .

7p’s of marketing mix:Product mix Until recently, only the PSU's BSNL and MTNL were allowed to provide Basic Phone Service through copper wires in India. MTNL is operating in Delhi and Mumbai only and all other parts are covered by BSNL. However private operators have now entered the fray, although their focus is largely on the cellular business which is growing rapidly.

While all the major cities and towns in the country were linked with telephones during the British period, the total number of telephones in 1948 was only around 80,000. Even after independence, growth was extremely slow. The telephone was a status symbol rather than being an instrument of utility. The number of telephones grew leisurely to 980,000 in 1971, 2.15 million in 1981 and 5.07 million in 1991.

Promotion mix DOT has now become a corporation named BSNL. Along with Fixed Line Telephony, Public Players also provide Internet Services like broadband, Tri Band service, dial up, pre paid and post paid Internet, Wi-Fi, etc.

Place mix In India, Public Players in Fixed Line Telephony are dominating the telecom market with 82% market share. MTNL (providing services in Delhi and Mumbai) and BSNL (providing services in the rest of India) are the two Public Players in the country. Public Players are in the process of expanding their networks. They are focusing on providing services to the interiors of the country.

Process mix Discovering what product, service or idea customers want. Producing a product with the appropriate features and quality. Pricing the product correctly. Promoting the product; spreading the word about why

customers should buy it. Selling and delivering the product into the hands of the customer. Selling is one activity of the entire marketing process. Selling is the act of persuading or influencing a customer to buy (actually exchange something of value for) a product or service. Marketing activities support sales efforts.

Physical evidence Physical evidence includes all the efforts taken by the service provider to tangibilise their services; they include physical facilities, physical environment, and social settings Like in MTNL when it came into existence it had wire connected phone which could not be moved from on place to another but now as the technologies are developing they have even promoted the wireless phones which are easily moved. Price Price is a significant element of marketing mix because it is the only element that which produce revenue where as the other elements produce cost. As the landline company provides offer a range of landline service at different price levels to catter to the needs of different target segments that may have different levels of purchasing power. People The major cities and towns in the country were linked with telephones during the British period, the total number of telephones in 1948 was only around 80,000. Even after independence, growth was extremely slow. The telephone was a status symbol rather than being an instrument of utility. The number of telephones grew leisurely to 980,000 in 1971, 2.15 million in 1981 and 5.07 million in 1991.

This density in the developed countries of North America and Western Europe was about 50. At that time countries like Pakistan, China, Malaysia and Brazil has tele-density of 0.7, 0.78, 7.37 and 5.5, respectively.

Developments taken place in telecommunication (landline) in past decades

During the ongoing era of economic reforms, Telecom sector reforms has been a success story, under a scenario of competitive growth shared by the public and private sectors, on the one hand, and the regulated environment, on the other. The planners had realized early that without a globally competent and efficient telecommunication system, the process of globalization of the economy would be incomplete. Hence, this was perhaps the first sector that got adequate attention during the post reforms era and also bore outstanding results Telecommunication is among the prime support services needed for rapid growth and modernization of various sectors of the economy, apart from improving the quality of life. This density in the developed countries of North America and Western Europe was about 50. At that time countries like Pakistan, China, Malaysia and Brazil has tele-density of 0.7, 0.78, 7.37 and 5.5, respectively. In real terms, before mid-seventies, tele-density in India was virtually negligible and it was at around that time that the country began to experience real growth in this sector. It is because of huge population, rampant poverty and large geographical size of the country that the growth of telecommunications has remained low in the past. But traffic density in the telecom sector in India today is among the highest in the world. This has made telecommunication an attractive proposition for the private sector as well as the foreign investors in India. Till the beginning of the English Plan in 1992, the investment in the telecommunication sector in India was quite low, at around two percent of the gross domestic product. Hence, when the government decided to reform this vital sector in India, it allowed liberal inflows of the foreign direct investment in this sector. New technologies employed during the eighth

plan including digital switching systems, co-axial and optical fiber systems in long distance transmission and digital microwave. There were a few reforms in the services, availability of exchanges and availability of lines also. Availability of telephone on demand appeared to be a distant possibility at that stage. With a view to achieve these targets, which appeared to be quite ambitious at that stage, a new telecom policy was announced during the eighth five year plan in May 1994, which envisaged addition of 100 lakh direct exchange lines so that by the year 1997, telephone on demand could be provided to the role in achieving the eighth plan targets of the telecom sector. Present communication system in India, particularly in the urban areas, can compare to the best in the world. As compared to about one lakh telephones in the country in the year 1947, the number has now grows to well above 400 lakh, with the tele-density growing to about 4 per one-hundred of population. As per the economic survey for the year 2002-03, during April to December 2002, 19 lakh new landline phones were added. This figure was 26 lakh during the same period in the year 2001 to 2002. But this decline of 7 lakh over the previous years has been more than compensated by the cellular phones were added during same period, when the previous year. This represents a whopping 73.7 percent growth in this segment. With about 25,000 exchanges functioning in the country, in most of the urban areas the telephone is available on demand. Waiting time in rest of the areas has gone down considerably, mainly due to the mobile revolution, under which the number of cellular users is growing with leaps and bounds. Over 90 percent users in the country, added after 1994m have access to STD facilities and there are more than 8 lakh public call offices in the country, out of which about 6 lakh are in the urban areas. A new policy for internet service providers was introduced in the year 1998, under which the private service providers were allowed to enter this field, breaking the monopoly of the VSNL. Any private company that wants a license as an ISP can go in for foreign equity up to 49 percent. The license fee is virtually nil and a company can obtain any number of licenses. ISPs were free to fix their own tariff, subject to review and fixation by Telecommunication Regulatory Authority of India at any time.

internet telephony was not permitted, but recently the government has decided to open it as a cheaper option for international communication. Telecom continues to be a high priority area for the policy makers. Among the fastest growing sectors of the economy, this sector is potentially profitable. With the traffic higher than the global standards on Indian Telecom channels, the private companies are vying with each other to gain a larger share in Indian market. Since the rate of return in this sector is quite high, the quantum of investment by the private sector is also expected to be high. A few bottlenecks in the policy, however, are required to be smothered. Rural connectivity in the country continues to be an area of serious concern. While the private operators are more than willing to venture into the basic, Indian Telegraph Act is utterly outdated and needs wholesale revision, in tune with the present policies. Advances in technology and present and future requirements of industry must also be taken into consideration while enacting a new legislation. Though some steps have been taken for rationalization of procedures by the Telecommunication Regulatory Authority of India, yet tariff structure is still unbalanced, with cross subsidization of local calls with the long distance calls. Attention must be paid to ensure that Indian emerges as a major manufacturing base and major exporter of Telecom equipment. Encouraging multinationals and joint ventures in this field would go a long way in ensuring this. India is perceived to have comparative advantage in the field of Information Technology and Information Technology- enabled services depend largely on high quality telecommunication infrastructure. A real challenge in this field is rapid technological changes, which lead to major changes in the structure of telecom industry all over the world.

Landlines Landlines are facing stiff competition from mobile telephones. The competition has forced the landline services to become more efficient. The landline network quality has improved and landline connections are now usually available on demand, even in high density urban areas.

Indian Telecom System The government has to keep in mind that not only the telecommunication services have to be brought up to the international standards but also the cost has to be in tune with the economy on the whole. Make available affordable and effective communications for the citizens. •

Strive to provide a balance between the provision of universal service to all uncovered areas, including the rural areas and the provision of high-level services capable of meeting the needs of the country’s economy.

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Encourage the development of telecommunication facilities in remote, hilly and tribal areas of the country.

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Create a modern and efficient telecommunications infrastructure taking into account the convergence of IT, media, telecom and consumer electronics and thereby propel India into becoming an IT superpower.

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Convert Public Call Offices (PCOs), wherever justified, into Public Teleinfo centres offering multimedia services like Integrated Service Digital Network (ISDN) services, remote database access, government and community information systems etc.

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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.

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Strengthen research and development (R&D) efforts in the country and provide an impetus to build world-class manufacturing capabilities.

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Achieve efficiency and transparency in spectrum management.

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Protect the defence and security interests of the country.

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Enable Indian telecom companies to become truly global players.

The Indian telecom industry is the fifth largest in the world and one of the fastest growing sectors of the country. In 1986, the Mahanagar Telephone

Nigam was established to operate systems in Mumbai and New Delhi, and Videsh Sanchar Nigam, also government owned, was set up as the overseas carrier. Progress was slow, but by the mid-nineties about 1 million new connections were established. The whole country has been divided into several telecom circles or zones which are provided with Subscriber Trunk Dialing (STD) codes. Fixed Line: Fixed Line service in India is primarily run by BSNL or MTNL and some other private players like Reliance, Airtel and Tata Indicom. With the development of mobile phones (cell phones) the landline network has improved its quality. Today, these are easily available on demand, even in rural areas.

Examples : Mahanagar Telephone Nigam Mahanagar Telephone Nigam Limited (NYSE: MTE) is an Indian Government-owned telephone service provider in the cities of Mumbai, Thane, New Delhi, and Navi Mumbai in India. The company was a monopoly until 2000, when the telecom sector was opened to other service providers. Products MTNL provides fixed line telephones, internet services through dialup and DSL — Broadband internet TriBand. MTNL has also started Games on demand, video on demand and IPTV services in India through its Broadband Internet service called Triband. Phone numbers belonging to MTNL start with the prefix 2 in. MTNL also provides other services such as VPN, Internet Telephony- VOIP and leased lines through BSNL and VSNL.

MTNL has been actively providing connections in both Mumbai and New Delhi areas and the efficiency of the company has drastically improved from the days when one had to wait years to get a phone connection to now when one can get a connection in even hours. MTNL OFFERS FREE STD FACILITY TO LANDLINE CUSTOMERS IN MUMBAI September 3rd, 2009

Mumbai’s largest Landline and Broadband service provider, Mahanagar Telephone Nigam Ltd (MTNL) , removed the barrier of STD facility from its Landline service. In an attempt to provide seamless National connectivity, MTNL has activated the STD facility on its entire landline phones service without any charges. The STD calling service with free Electronic Dynamic Locking Facility will be provided to all MTNL landline phone users from 3rd September 2009 without any extra security deposit. India's First 3G Mobile Service By MTNL

MTNL started 3G services in India under the name of "MTNL 3G Jadoo" Services offered include Video call, Mobile TV and Mobile Broadband with high speed data connectivity up to 2 Mbit/s speed from 11th December 2008, getting India on the 3G map of the world. MTNL plans to offer 3G services across India by mid-2009. After that MTNL Mobile users would be

able to surf the internet with speeds up to 2 Mbit/s on their smart phones. MTNL will be installing 15 lakh 3G lines in the first phase of its 3G roll-out in Mumbai and Delhi (which currently have 40 lakh existing mobile lines). India's First 3G Blackberry Service By MTNL MTNL rolled out its BlackBerry solutions on the 2G and 3G networks by launching India’s first 3G enabled BlackBerry Bold smart phones. Recent happenings •

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On December 11, 2008 MTNL became the First telco in India to launch 3G mobile phone services with roll out of Video call and Mobile TV service in New Delhi. Huge investments have also been made in innovating and providing enhanced value added services to subscribers, a lot of which are in the pipeline. These technological advancements have paved the way for seamless execution of a number of value added initiatives that MTNL is set to offer subscribers. The company announced that the network strength has nearly doubled to 568 GSM cell sites in Mumbai. By year end this figure will touch the 1000 mark in Mumbai. In July, 2006 Mahanagar Telephone Nigam Ltd. (MTNL) has launched its new Garuda mobile service with a range of attractive features from its state-of-the-art CDMA 2000 1x network. MPLS based VPNs reduce customer networking complexity as customers need only one connection instead of individual point-topoint circuits between each office using pair of Leased Lines, thereby cutting networking costs and technical work force.

Bharat Sanchar Nigam Limited BSNL

Type Availability Founded

Telecommunication service provider Indiawide except Delhi and Mumbai 19th century, incorporated 2000 Connecting India US$ 9.67 billion (2007) The Government of India Kuldeep Goyal (CMD)

Slogan Revenue Owner Key people Website www.bsnl.in www.bsnl.co.in

Bharat Sanchar Nigam Limited (known as BSNL, India Communications Corporation Limited) is a public sector telecommunication company in India. It is India's largest telecommunication company with, 24% market share as on March 31, 2008. Its headquarters are at New Delhi. BSNL is India's oldest and largest Communication Service Provider (CSP). Currently has a customer base of 90 million as of June 2008. It has footprints throughout India except for the metropolitan cities of Mumbai and New Delhi which are managed by MTNL. As on March 31, 2008 BSNL commanded a customer base of 31.55 million Wireline. BSNL's earnings for the Financial Year ending March 31, 2007 stood at INR 397.15b (US$ 9.67 b) with net profit of INR 78.06b (US$ 1.90 billion). BSNL has an estimated market value of $ 100 Billion. The company is planning an IPO with in 6 months to offload 10% to public in the Rs 300-400 range valuing the company at over $100 billion. Vision and Mission

Marketing vision of the BSNL has to be based on overall mission and vision of the organization. The mission of BSNL is i. To provide world class State-of-art technology telecom services on demand at affordable price. ii.

To provide world class telecom infrastructure to develop country's economy.

And the vision of BSNL is i.

To become the largest telecom Service Provider in Southeast Asia.

In dynamic environment anything permanent is “CHANGE”. So we must revise and review so that focus is never lost. Marketing Objective The ultimate objective of any marketing activity is to satisfy the customers and today even a step ahead i.e. ‘delighting’ the customers, for which customers are offered something beyond their expectations from the service or the product. The objective being to acquire and retain the customers, who should continually feel that they are getting more value of the money, they are departing with. Marketing is about creating a competitive advantage by being the best at understanding, communicating, and delivering and developing existing customer relationships in addition to creating and keeping new customers. The concept of the product life cycle is giving way to customer life cycle, focusing on developing products that anticipate the future needs of existing customers and creating services that extend the existing customer relationship beyond the mere transaction. The customer life cycle will focus on lengthening the life span of the customer with the organisation rather than the endurance of a particular product. Customers have changing needs as their life styles alter- the development and provision of products and/or services that continuously seek to satisfy those needs is good Marketing. The Marketing will focus greater attention on how to deliver customer satisfaction and organisation will begin to structure itself around customer segments and not product lines. A good Marketing Strategy will take the business vision and apply it to the customer base.

Contrasting the Sales Concept with the Marketing Concept :A salesperson using the sales concept, on the other hand, sometimes has the ability to individualize components of a sale, but the emphasis is ordinarily upon helping the customer determine if they want the product, or a variation on it, that is already being offered by the company. In the sales approach, not much time is spent learning what the customer's ideal product would be because the salesperson has little say in seeing that their company's product is modified. Furthermore, they aren't rewarded for spending time listening to the customer's desires unless they have a product to match their desires that will result in a sale. The 7Ps for service marketing (Product, price, place, promotion, physical evidence, people & process) are the means to attain, nurture, & retain the customers and not the end. Brand Equity We may think what is Brand equity? In simple words it is how far people are willing to pay if we increase our prices i.e. premium for our services. We may feel happy to say there is lot of black marketing of our SIM cards. Is it a healthy sign? We reduce prices when competitors launch new schemes. Does it imply poor brand equity? Brand Equity can be built with good equity of quality of services at the affordable price. Continuous innovation in product and delivery of services with the appropriate pricing is the key strategy for developing the trust in customer so that he keeps his loyalty with BSNL. We have to be first mover in our efforts for product and price differentiation. Presently the market is in growth phase and price could be a differentiating factor, but how long? Is any scope left for further cuts? Ultimately it is the quality, customer care, and timely availability apart from price, which will matter. Quality definitely commands premium. Why are people willing to pay more for Raymonds or Adidas or Sony when comparable offers exist in market? One may say that customer perception of quality is not built overnight; it may require a brand and brand building investments apart from a quality product. How many brands do we have? Our investments get diluted with more number of brands. Even Airtel merged the Touchtel brand with more popular one. While majority of the revenue comes from landline (DELs plus PCOs), how many people know of Bfone? CellOne happens to be more popular.

Services

BSNL Mobile Prepaid Mobile

BSNL Broadband BSNL provides almost every telecom service in India. Following are the main telecom services provided by BSNL: •

Universal Telecom Services: Fixed wireline services using CDMA Technology called bfone . As of December 31, 2007, BSNL has 81% market share of fixed lines.

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Cellular Mobile Telephone Services: BSNL is major provider of Cellular Mobile Telephone services using GSM platform under the brand name BSNL Mobile. As of March 31, 2007 BSNL has 17% share of mobile telephony in the country.

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Internet: BSNL provides internet services through dial-up connection (Sancharnet) as Prepaid, (NetOne) as Postpaid and ADSL broadband (BSNL Broadband). BSNL has around 50% market share in broadband in India. BSNL has planned aggressive rollout in broadband for current financial year.

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Intelligent Network (IN): BSNL provides IN services like televoting, toll free calling, premium calling etc.

Present and future BSNL (then known as Department of Telecom) had been a near monopoly during the socialist period of the Indian economy. During this period, BSNL was the only telecom service provider in the country (MTNL was present only in Mumbai and New Delhi). During this period BSNL operated as a typical state-run organization, inefficient, slow, bureaucratic, and heavily uinionised. As a result subscribers had to wait for as long as five years to get a telephone connection. The corporation tasted competition for the first time after the liberalisation of Indian economy in 1991. Faced with stiff competition from the private telecom service providers, BSNL has subsequently tried to increase efficiencies itself. DoT veterans, however, put the onus for the sorry state of affairs on the Government policies, where in all state-owned service providers were required to function as mediums for achieving egalitarian growth across all segments of the society. The corporation (then DoT), however, failed miserably to achieve this and India languished among the most poorly connected countries in the world. BSNL was born in 2000 after the corporatisation of DoT. The efficiency of the company has since improved. However, the performance level is nowhere near the private players. The corporation remains heavily unionised and is comparatively slow in decision making and implementation. Though it offers services at lowest tariffs, the private players continue to notch up better numbers in all areas, years after year. BSNL has been providing connections in both urban and rural areas. At present BSNL enjoy's around 60% of market share of ISP services.

Year of Broadband 2007 2007 has been declared as "Year of Broadband" in India and BSNL is in the process of providing 5 million Broadband connectivity by the end of 2007. BSNL has upgraded existing Dataone (Broadband) connections for a speed of up to 2 Mbit/s without any extra cost. This 2 Mbit/s broadband service is being provided by BSNL at a cost of just US$ 11.7 per month (as of 21/07/2008 and at a limit of 2.5GB monthly limit with 0200-0800 hrs as no charge period). Further, BSNL is rolling out new broadband services such as triple play.

BSNL is planning to increase its customer base to 108 million customers by 2010. With the frantic activity in the communication sector in India, the target appears achievable. BSNL is a pioneer of rural telephony in India. BSNL has recently bagged 80% of US$ 580 m (INR 2,500 crores) Rural Telephony project of Government of India. On the 20th of March, 2009, BSNL advertised the launch of BlackBerry services across its Telecom circles in India. The corporation has also launched 3G services in select cities across the country. Presently, BSNL and MTNL are the only players to provide 3G services, as the Government is still in the process of auctioning the 3G spectrum to private players. Challenges During the financial year 2006-2007 (from April 1, 2006 to March 31, 2007) BSNL has added 9.6 million new customers in various telephone services taking its customer base to 64.8 million. BSNL's nearest competitor Bharti Airtel is standing at a customer base of 39 million. However, despite impressive growth shown by BSNL in recent times, the fixed line customer base of BSNL is declining. In order to woo back its fixed-line customers BSNL has brought down long distance calling rate under OneIndia plan, however, the success of the scheme is not known. However, BSNL faces bleak fiscal 2006-2007 as users flee, which has been accepted by the CMD BSNL. Presently there is an intense competition in Indian Telecom sector and various Telcos are rolling out attractive schemes and are providing good customer services. Access Deficit Charges (ADC, a levy being paid by the private operators to BSNL for provide service in non-lucrative areas especially rural areas) has been slashed by 37% by TRAI, w.e.f. April 1, 2007.The reduction in ADC may hit the bottomlines of BSNL. BSNL launched 3G services in 11 cities of country in 2nd march 2009.MTNL which operates in Mumbai and Delhi first launched 3G services in these cities. Special benefit provided by BSNL

• BSNL LAUNCHES Caller Ring Back Tone CRBT SERVICES FOR SUBSCRIBERS IN HARYANA September 8th, 2009

IMImobile today announced that it has enabled the launch of the Caller Ring Back Tone (CRBT) service to the BSNL landline subscribers in Haryana this service enables BSNL landline subscribers in Haryana to set their favorite songs as a ring back tone for their callers. Comparison between landline and wireless subscribers Telephony Subscribers (Wireless and Landline): 452.91 million (May 2009) Cell phones: 415.25 million (May 2009) Land Lines: 37.5 million (June 2009) Yearly Cell phone Addition: 113.26 million (2007) Monthly Cell phone Addition: 15.41 million (Jan 2009) Teledensity: 39.86% (June 2009) Projected teledensity: 626 million, 46% of population by 2010.

Conclusion

The last decade has seen a dramatic growth in the communication sector in India. Until the 1980s, a telephone was considered a luxury. There was a waiting list of 20 million. Thanks to the liberalization in government policy and the entry of private players, the situation has changed beyond recognition. Few wish to have a landline today. India represents one of the fastest growing economies in terms of mobile communication penetration with millions of new users being added every month. What makes the transformation remarkable is the diffusion of the technology to the grassroots level. It is quite common to see construction workers, cab drivers, fruit and vegetable vendors, maintenance crew and farmers using the mobile phone as if they were born with the gadget.