Report on telecom sector

Report on telecom sector — Document Transcript
1. IIPM – AHMEDABAD SALES AND DISTRIBUTION Page 1
2. Page no. Acknowledgement 04 Executive summary 05 Introduction about Telecom
Industry 06 History 07 Global Scenario 08 National Scenario 09 Demographic
characteristic 10 Market size, Trends & Players 11 Telecom turn over/ Subscribers 12
Opportunities /Competitive landscape 13 Porters generic strategy 14 Progress /Acquiring
Subscribers 15 Rural India 15 Government Initiatives / MVAS 16 VAS 18 Mobile VAS
in Rural Market 19 Access Device /3G Handset 20 Key trends in Telecom Industry 21
Inhibitors 22 MNP Implementation Globally 24 Wimax Vs. 3G 26 Mobile virtual
network operator 27 Regulation for MVN O / IPTV 28 Companies overview 29 4P‟s
Analysis 43 IIPM – AHMEDABAD SALES AND DISTRIBUTION Page 2
3. Advertisement 44 Industry updates 46 Major challenges for Mergers 49 FDI
Investment in Telecom sector 50 Outsourcing by Telecom company 51 Future Trends 53
4G Technology 56 Conclusion/ References 56 IIPM – AHMEDABAD SALES AND
DISTRIBUTION Page 3
4. This project work would never have been an achievable task, had we not been under
the great shelter of guidance of respected Professor Mukta Rae. Her simplified teaching
technique based on examples has helped us gain more understanding of the subject. The
very essence of the project work is the linguistic precision which has an impact of
conveying more details in least possible words. An ample use of various reference
readings has been very frequently made while compiling data for this project. Such rich
reading has been made available at hand by the treasure-like well-maintained library of
the IIPM, Ahmedabad. I am very much under obligation to mention here, the
contributions of my batch mates who have, knowingly or unknowingly, provided me the
competitive edge which is the driving force of the whole labor and extra labor put into the
project. I would also take an opportunity to thank all the respondents, who have taken
pains in answering the questions and filled the place of true representatives for deciding
the nature of the problem. Finally, I feel very much gratified to the administration of
IIPM, Ahmedabad for providing comfortable environment. - JONTY MOHTA IIPM –
AHMEDABAD SALES AND DISTRIBUTION Page 4
5. The rapid growth in Indian telecom industry has been contributing to India‟s GDP at
large. Telecom Regulatory Authority of India was established to regulate and deal with
competition among the service providers. Upcoming services like 3G and Portability will
help to further increase the growth rate. The Indian telecommunication industry is one of
the fastest growing in the world and India is expected to become the second largest
telecom market in the world by 2010. India added 113.26 million new customers in 2008,
the largest globally. The country‟s cellular base witnessed close to 50% growth in 2008,
with an average 9.5 million customers added every month. It is estimated that telecom
industry will generate revenues worth US$ 43 billion in 2009- 10. IN this we have tried
to capture the most of areas of telecom industry. Like, History of Telecom Industry,
TRAI role and functions, new trends in industry and latest updates. To find the reason
of tremendous growth in Indian Telecom Industry To study the role of TRAI To study
upcoming trends in Telecom industry IIPM – AHMEDABAD SALES AND
DISTRIBUTION Page 5

6. The exactly ten years ago, Jyoti Basu in culcutta called Sukh Ram in Delhi Sukh Ram
in Delhi was the first mobile phone call in India. Brick sized cell phone used to cost
Rs.45000 and each call coasted Rs.16.50/minute. Back then, cell phones was a status
symbol. Today, there are over 60 million mobile connections in India (expected to double
in number in next 12 months.). A local call costs around less then Rs.50paisa/min and a
cell phone can be purchased for less than Rs.1500. India growth story has already got the
world to sit up and take a note of the changing economic scenario. The Indian
government is doing everything that is possible to ensure that this story remains intact.
Factors, like the liberalization in the government stance and the daring entrepreneurs of
the Indian soils, have helped the sectors achieve the highs like never before. And
currently, the flavor of the month seems to be the telecom industry. IIPM –
7. History of Indian Telecommunications started in 1851 when the first operational land
lines were laid by the government near Calcutta (seat of British power). In 1883
telephone services were merged with the postal system. Indian Radio Telegraph
Company (IRT) was formed in 1923. After independence in 1947, all the foreign
telecommunication companies were nationalized to form the Posts, Telephone and
Telegraph (PTT), a monopoly run by the government's Ministry of Communications.
Telecom sector was considered as a strategic service and the government considered it
best to bring under state's control. The first wind of reforms in telecommunications sector
began to flow in 1980s when the private sector was allowed in telecommunications
equipment manufacturing. In 1985, Department of Telecommunications (DOT) was
established. It was an exclusive provider of domestic and long- distance service that
would be its own regulator (separate from the postal system). In 1986, two wholly
government-owned companies were created: „Videsh Sanchar Nigam Limited‟ (VSNL)
for international telecommunications & „Mahanagar Telephone Nigam Limited‟
(MTNL) for service in metropolitan areas. In 1990s, telecommunications sector benefited
from the general opening up of the economy. National Telecom Policy (NTP) 1994 was
the first attempt to give a comprehensive roadmap for the Indian telecommunications
sector. In 1997, Telecom Regulatory Authority of India (TRAI) was created. TRAI was
formed to act as a regulator to facilitate the growth of the telecom sector. New National
Telecom Policy was adopted in 1999 and cellular services were also launched in the same
year. Indian telecom industry has the highest growth rate in the world. A record 5.9
Million new mobile phone subscribers were drawn by the Telecom sector in India in the
month of August 2006, according to the COAI (Cellular Operators Association of India).
India, which is seeing over 8 million wireless subscribers being added every month (8.62
million in May 2008), is the fastest growing telephone market in the world. The
government has reiterated the target of 500 million telecom subscribers and 20 million
broadband connections by 2010. IIPM – AHMEDABAD SALES AND DISTRIBUTION
Page 7
8. The Indian telecom market has been displaying sustained high growth rates. Riding on
expectations of overall high economic growth and consequent rising income levels, it
offers an unprecedented opportunity for foreign investment. A combination of factors is
driving growth in the telecom market, promising rich returns on investments. Example:
TATA DOCOMO It generated US $1.4 trillion in the year of 2009 when recession is
everywhere. India is the fourth largest telecom market in Asia after China, Japan and

South Korea. Asia pacific region: expecting highest growth in next 5years. The
Indian telecom network is the eighth largest in the world and the second largest among
emerging economies. The Indian telecom market size of over US $ 8 billion is
expected to increase three fold by 2012. The expansion of the telecom industry in India
has been fuelled by a massive growth in mobile phone users, which has reached a level of
10 million users in December 2002, an increase of nearly 100 per cent in 2002. This
exponential growth of mobile telephony can be attributed to the introduction of digital
cellular technology and decrease in tariffs due to competitive pressures. For the first time
in India, the growth of cellular subscriber base has exceeded the fixed line subscriber
base. However, cellular penetration is still 1 per cent as compared to world average of
around 16 per cent. IIPM – AHMEDABAD SALES AND DISTRIBUTION Page 8
9. 19% China 12% India 62% USA 7% Others Source: EIU (Economist Intelligence
Unit) Indian Telecom sector, like any other industrial sector in the country, has gone
through many phases of growth and diversification. Starting from telegraphic and
telephonic systems in the 19th century, the field of telephonic communication has now
expanded to make use of advanced technologies like GSM, CDMA, and WLL to the
great 3G Technology in mobile phones. Day by day, both the Public Players and the
Private Players are putting in their resources and efforts to improve the
telecommunication technology so as to give the maximum to their customers. The
Indian telecom sector can be broadly classified into Fixed Line Telephony and mobile
telephony. The major players of the telecom sector are experiencing a fierce competition
in both the segments. The major players like BSNL, MTNL, VSNL in the fixed line
and Airtel, Vodafone (Hutch), Idea, Tata, Reliance in the mobile segment are coming up
with new tariffs and discount schemes to gain the competitive advantage. IIPM –
10. The Public Players and the Private Players share the fixed line and the mobile
segments. Currently the Public Players have more than 60% of the market share.
Internet/Broadband subscribers are 14.05m internet subscribers & 6.62m broadband
subscribers (June 2009) Advanced Technologies – GSM, CDMA, WLL, 3G and
upcoming 4G Telecom sector Contribution of nearly 1% to India‟s GDP GSM
CDMA/WLL Fixed LINE •VODAFONE •BSNL •BSNL •AIRTEL •MTNL •MTNL
•BSNL •TATA INDICOM •BHARTI •IDEA •TATA DOCCOMO •TATA TELECOM
•SPICE •VIRGIN MOBILE •VODAFONE •AIRCELL •RELIANCE •RELIANCE
•RELIANCE •VIDEOCON •TATA DOCCOMO •TATA INDICOM •VIDEOCON
Total Tele-density stood at 39.86 per cent. Wire line Tele-density came in at mere 3.22
% whereas wireless subscription contributed 91.9 % of overall Tele-density.
Subscription in Urban Areas was at 328.55 Million and Rural subscribers increased to
136.27 Million. According to the Vision 2020 document of the Planning Commission
of India, the country will witness continued urbanization. The urban population is
expected to rise from 28 per cent to 40 per cent of total population by 2020. Future
growth is likely to be concentrated in and around 60 to 70 large cities having a population
of one million or more. This profile of concentrated urban population will IIPM –
11. facilitate customized telecom offerings from operators. Both fixed line and mobile
segments serve the basic needs of local calls, long distance calls and the international

calls, with the provision of broadband services in the fixed line segment and GPRS in the
mobile arena. Traditional telephones have been replaced by the codeless and the wireless
instruments. Every month 8-10 million subscribers are adding in the market. We
have mobile 350 million subscribers, next to China Tata Teleservices – invest an
additional US $ 1 billion in TATA DoCoMo BSNL – will put US $ 1.16 billion in
WiMax Project Vodafone Essar – invest US $ 6 billion next 3 years to increase mobile
subscriber base Bharti Airtel – US $ 126.5 million to strengthen Assam & Northeast
Circles. Mobile phone providers have also come up with GPRS enabled multimedia
messaging, Internet surfing, and mobile commerce. The much-awaited 3G mobile
technology has entered in the Indian telecom market. The GSM, CDMA, WLL service
providers are all upgrading them to provide 3G mobile services. Radio services have
also been incorporated in the mobile handsets, along with other applications like high
storage memory, multimedia applications, multimedia games, MP3, Players, video
generators, Camera's, etc. The value added services provided by the mobile service
operators contribute more than 10% of the total revenue. The 2009 budget has brought
further relief to the customers with the reduction in the tariffs, both local and long
distance, and with slashing down the roaming rentals. This is likely to IIPM –
12. lead to even more people going for cellular services and more and more use of the
value added services. However, landline telephony is likely to remain popular, too, in
the foreseeable future. MTNL, the largest landline service provider, has recently taken
some bold initiatives to retain its market share and, if possible, expand it. : Gross
Revenue (GR) stood at Rs 39,108.33 Crore and Adjusted Gross Revenue (AGR) of
Telecom Sector came in at Rs. 29,732.52 Crores. GR has registered a decline of 3.3%
compared to previous quarter whereas AGR increased slightly. Average license fee as
percentage of AGR was 8.43% in June-09 as against 8.4% in previous quarter. The less
outgo in terms of licensing fees is a big positive for Telecom industry and as such for
telecom subscribers in general as this will allow further scope of reduction in telecom
tariffs. 464.82 325.79 225.01 153.42 104.22 76.53 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08
Jan-09 Source: TRAI IIPM – AHMEDABAD SALES AND DISTRIBUTION Page 12
13. India offers an unprecedented opportunity for telecom service operators,
infrastructure vendors, manufacturers and associated services companies. A host of
factors are contributing to enlarged opportunities for growth and investment in telecom:
an expanding Indian economy with increased focus on the services sector population
mix moving favourably towards a younger age profile urbanization with increasing
incomes Investors can look to capture the gains of the Indian telecom boom and
diversify their operations outside developed economies that are marked by saturated
telecom markets and lower GDP growth rates. Demand is driven by technological
innovation and by growth in business activity. The profitability of individual companies
depends on efficient operations and good marketing. Large companies have big
economies of scale in providing a highly automated service to large numbers of
customers, and have the financial resources required building and maintaining a large
network. Smaller companies can compete effectively only in small markets or by
providing specialty services. IIPM – AHMEDABAD SALES AND DISTRIBUTION
Page 13

14. Porter has identified three types of generic strategies that help a firm to cope with
competitive forces and outperform other firms in the industry. These strategies are:- 1.
Overall Cost leadership strategy 2. Differentiation strategy, and 3. Focus strategy The
Overall Cost leadership strategy is aimed at gaining a competitive advantage through
lower costs. The low cost leader in any market gains competitive advantage from being
able to many to produce at the lowest cost. Factories are built and maintained; labor is
recruited and trained to deliver the lowest possible costs of production. 'cost advantage' is
the focus. Financial considerations and budgetary constraints play a critical role here in
shaping competitive price of the products. Besides the production effiency, brand and
marketing skills plays a important role in this kind of competition. For example:--Some
organizations, such as Toyota, are very good not only at producing high quality autos at a
low price, but have the brand and marketing skills to use a premium pricing policy. A
firm with a differentiation strategy attempts to achieve a competitive advantage by
creating a product or service that is perceived as unique. Differentiated goods and
services satisfy the needs of customers through a sustainable competitive advantage. This
allows companies to desensitize prices and focus on value that generates a comparatively
higher price and a better margin. The benefits of differentiation require producers to
segment markets in order to target goods and services at specific segments, generating a
higher than average price. For example, British Airways differentiates its service by
providing focus on IIPM – AHMEDABAD SALES AND DISTRIBUTION Page 14
15. exceptional good quality of service rather than focusing on low price. The
differentiating organization will incur additional costs in creating their competitive
advantage. These costs must be offset by the increase in revenue generated by sales.
There is also the chance that any differentiation could be copied by competitors.
Therefore there is always an incentive to innovated and continuously improve. The
focus strategy is also known as a 'niche' strategy. Where an organization can afford
neither a wide scope cost neither leadership nor a wide scope differentiation strategy, a
niche strategy could be more suitable. Here an organization focuses effort and
resources on a narrow, defined segment of a market. Competitive advantage is generated
specifically for the niche. A niche strategy is often used by smaller firms. A company
could use either a cost focus or a differentiation focus.-- With a cost focus a firm aims
at being the lowest cost producer in that niche or segment. With a differentiation focus
a firm creates competitive advantage through differentiation within the niche or segment.
There are potentially problems with the niche approach. Small, specialist niches could
disappear in the long term. Cost focus is unachievable with an industry depending upon
economies of scale e.g. telecommunications. The target for the 11th Plan period (2007-
12) is 600 million phone connections with an investment of US$ 73 billion. Apart from
the basic telephone service, there is an enormous potential for various value-added
services. In fact, the real potential for telecom service growth is still lying untapped.
According to the CII Ernst & Young report titled 'India 2012: Telecom growth continues',
revenue from India's telecom services industry is projected to reach US$ 54 billion in
2012, as against US$ 31 billion in 2008 IIPM – AHMEDABAD SALES AND
DISTRIBUTION Page 15
16. Source: COAI The progression chart below depicts the major regulations and events
driving the extra ordinary growth of Telecom sector from year 1999 to 2008. In order to

capitalize this opportunity of meeting the consumer needs in highly competitive market
the operators have reduced the tariffs to attract consumers with low purchasing power
primarily in semi urban and rural India. In fact lucrative offers like being paid for
incoming calls have transformed the scenario completely. Through these changing
regulations and events, the Industry players are aiming to achieve the following
Acquiring new subscribers by expanding in Semi Urban and Rural India Selling more
services to existing subscribers The recent TRAI recommendation permitting PC-to-
phone calls where ISPs can offer cheaper STD calls and even free local calls. This would
result in further reduction of voice tariffs. This would lead to increased focus on MVAS
by mobile operators. Acquiring customers have always been a great challenge for
companies. Given the current level of saturation in Metros and Urban Market and cut
throat competition among operators, increasing subscriber base in urban market would be
all the more challenging. Therefore a lot of operators with adequate support from
Government are eyeing the rural market for future growth. Big operators like Airtel have
claimed that soon mobile connections and recharge IIPM – AHMEDABAD SALES
AND DISTRIBUTION Page 16
17. vouchers etc will be available at all such places from where people buy match boxes.
This certainly explains the future penetration of these services in remotest of villages.
This is relatively easier as compared to acquiring new customers. Also since now the new
subscriptions will largely happen at the bottom of the pyramid therefore the new
subscriptions will further lower the average revenue per user. In such a scenario mobile
VAS sector is a potential long- term revenue stream as it will be easier to sell more to the
existing customers. Government also has supported the growth of this sector by coming
out with a number of initiatives for the low end subscribers of rural India, and Universal
Service Obligation (USO) fund was one such initiatives. The USO fund was an initiative
taken up by the government to increase rural teledensity. In recent developments, BSNL
and two private operators will erect 427 towers in remote areas offering over four lakh
mobile connections. All the towers are expected to be erected and commissioned by
December 2008. Under the second phase, DoT aims at erecting 11,000 towers throughout
the country to offer over 11 million mobile connections ADC was levied by Telecom
Regulatory Authority of India (TRAI) in 2003 to provide support for BSNL's rural
telephone obligation. Telecom Regulatory Authority of India (TRAI) has recently given
orders for the withdrawal of the ADC (Access Deficit Charge) and the subsequent
passing of the benefit to the consumers by the telecom operators. Decrease in ARPU
despite increase in MOU: Though the subscriber base is growing at a rapid pace and has
positively impacted industry revenues, operator margins also have shrunk owing to
competition and lower “Average Revenue per User” (ARPU) as the major growth is
coming from bottom of the pyramid. As ARPU declines and voice gets commoditized,
the challenge is to develop alternative revenue streams and retain customers by creating a
basis for differentiation in high-churn markets. Need for differentiation: There is a greater
need among the telecom operators to differentiate themselves from each other. Number
of Licensees: With increasing number of licensees (98 UASL, and 37 cellular licenses) in
the telecom space the average numbers of operators in many circles have increased to 5-6
operators offering more choices to the consumer. Thus the competition among the IIPM –

18. operators has increased tremendously. Therefore it is very important for them to
differentiate themselves from the others. Now that voice has got commoditized these
operators are using MVAS for their differentiation and marketing these services heavily
for creating awareness among the consumers. Decreasing Call Rates: In order to attract
consumers with relatively low purchasing powers primarily from Semi Urban and Rural
India the operators have drastically reduced the call rates making it affordable to even the
lower segment of society. The tariff in India is one of the lowest at Rs.1 per minute as
compared to the tariff in developed nations like USA and UK where the call rates are
Rs.13 and Rs7-8 respectively. 3G bidders who are non-operators: The arrival of new
technologies will give rise to greater competition as many non-operators are also bidding
for the 3G licenses. Department of Telecom has planned to allow five 3G operators in
each circle depending on the availability of spectrum. Therefore there would be a greater
need to differentiate oneself in order to attract new customers and retain the existing
ones. Saturation in Metro and Urban Market: The metro/urban areas offer high level of
penetration and have significant mobile subscribers. In such a highly saturated market
with the entry of MVNO‟s the competition will get fierce. Therefore capitalizing on
value added services will give operators opportunity to increase ARPU by providing
premium services. Increasing need and demand from consumers: In addition to the
above supply side reasons the „pull effect‟ from consumers asking for more than just
basic telephony is also a key driver for MVAS services. Today most of the consumers are
seeking more from their communication device apart from just mobility and desire to stay
connected. As we have seen, Telecommunication has moved beyond providing just basic
voice calls. The mobile phone has evolved from a mere communication device to an
access mode with an ability to tap a plethora of information and services available in the
ecosystem. This is the reason why it is now being referred to as the „fourth screen‟, after
Cinema halls, Television and PC. But the fundamental question that remains is how VAS
is defined. A clear MVAS definition is not only required to clear the air among the
MVAS providers but it will also have an impact on IIPM – AHMEDABAD SALES
19. the dynamics of the Value chain. A detailed definition of VAS might have an impact
on the licensing issues surrounding VAS. Let‟s look at different VAS definitions floating
in the market. Value Added Service (VAS) in telecommunication industry refers to
non-core services, the core or basic services being standard voice calls and fax
transmission including bearer services. The value added services are characterized as
under:- Not a form of core or basic service but adds value in total service offering.
Stands alone in terms of profitability and also stimulates incremental demand for core or
basic services Can sometimes be provided as standalone. Do not cannibalize core or
basic service. Can be add-on to core or basic service and as such can be sold at
premium price. May provide operational synergy with core or basic services. A value
added service may demonstrate one or more of these characteristics and not necessarily
all of them. In some cases, the value added service becomes so closely integrated with the
basic offering that neither the user nor the provider acknowledge or realize the difference.
A classic example is of P2P SMS. Some of the operators do not consider P2P SMS as
part of their VAS revenue. The Government of India issues licenses for the following
Value Added Services:- Public mobile trunking service Voice mail service Closed

users group domestic 64 kbps data network via INSAT satellites system Videotex
service GMPCS Internet Audiotex Unified messaging service The next wave of
Telecom growth will come from the bottom of the pyramid. For majority of the
population in the rural segment, the mobile phone is the first communication device.
Rural IIPM – AHMEDABAD SALES AND DISTRIBUTION Page 19
20. should not always be interpreted as poor and therefore some categories of MVAS
might apply directly to them. But whether the statement can be extended to MVAS
depends on some key factors. One is to clearly identify the need of the rural segment,
second is to communicate the services to them i.e. generate awareness and thirdly, to
provide an easy and cheap access mode to the rural consumers. All these 3 are quite big
challenges and therefore needs to be addressed adequately for MVAS to take off in Rural
India. Apart from the identification of rural consumer needs and development of relevant
content, communication of these services to the rural population would be a bigger
challenge. One way to do this is to communicate through regional SMS for which a
separate SMS gateway needs to be installed. Literacy level of the geographical area will
be another limitation. Therefore the better communication option is Voice in regional
languages. The challenge with regional voice is not only investment but also blockage of
the already scarce spectrum. Marketing the content in rural market is going to be all the
more challenging. This would require right packaging and pricing of MVAS. Providing
cheap access mode to end consumer would be another key booster to rural MVAS.
Current voice MVAS charges are expensive from a rural consumer perspective therefore
that also would need to be addressed for e.g. the „sachet model‟ could prove to be
successful here. MVAS is going to address two main needs of rural consumers-
connectivity and entertainment mode. Connectivity will provide Information VAS on
Agriculture necessary for the farmer‟s livelihood e.g. mandi rates, weather, etc. Health,
finance, job opportunities etc are potential areas. Mobile also has the potential to evolve
as a key entertainment mode considering lack of other entertainment options in rural
areas. The industry has witnessed some type of content being downloaded more in small
towns of UP and Bihar rather than in metros like Delhi and Mumbai. Therefore by
leveraging on these two aspects MVAS can be a success in rural area. GPRS Handsets
IIPM – AHMEDABAD SALES AND DISTRIBUTION Page 20
21. Currently the penetration of GPRS enabled handsets are close to 26% in India as
against 99% in South Korea and 76% in Japan. Of the total mobile subscribers in India 65
million possess GPRS-enabled handsets. Of all those who possess GPRS enabled
handsets only 20-25% of them have got the GPRS activated and only about 15% use it.
Even in case of developed nations like South Korea and Japan not more than 50% of the
subscribers owning GPRS enabled handsets use it. Population of india 1130mn Mobile
subscriber base 426Mn GPRS Enable 65 Mn. GPRS Activated 15-16 Mn. GPRS USERS
9Mn Source: TRAI REPORT,E Technology This clearly indicates that the consumer
today engage more in text based services than the web based applications. Therefore for
MVAS to grow to its full potential the handset manufacturers will have to look at ways to
manufacture GPRS enabled phones which are affordable and user friendly. Moreover
they would also need to increase its awareness and educate the consumers on how to use
GPRS. The market for 3G in the country is expected to be huge with over 65 million
wireless subscribers, who use their handsets to access data services on the Web. These

subscribers are currently using mobile handsets which are internet-enabled and are
potential broadband IIPM – AHMEDABAD SALES AND DISTRIBUTION Page 21
22. subscribers with the deployment of advanced wireless technologies such as 3G.
According to Indian Cellular Association (ICA) about 5% of mobile users already have
handsets that can work on 3G spectrum. In addition, out of all those possessing the 3G
enabled handsets the number of people who would use 3G services would be determined
by the quality of content available. Unlike most other countries, we are looking at 3G
services not only as premium services but also as an extension of 2G. Since our
broadband penetration is abysmal, 3G would provide a much required boost to it. Given
that mobile phones are much cheaper as compared to PCs, the demand for broadband on
mobile is expected to be much greater. More importantly, 3G will solve problems more in
rural India. Therefore the shift towards 3G would depend on affordability of handsets
along with the quality of content available. One of the most frequent definitions that
prevail in the telecom circles for number portability is: "Number portability is a circuit-
switch telecommunications network feature that enables end users to retain their
telephone numbers when changing service providers, service types, and or locations."
Why mobile number portability (MNP)? When fully implemented nationwide by both
wire line and wireless providers, portability will remove one of the most significant
deterrents to changing service, providing unprecedented convenience for consumers and
encouraging unrestrained competition in the telecommunications industry. In short, this is
the best method to increase the efficiency of the service provider by increasing the
competition, thereby ensuring better services in all respects. From the subscribers‟
perspective, this is a deceptively simple and very welcome change, because they can
change wireless service providers without worrying about notifying friends, family and
business contacts that their wireless number is changing. In addition, being able to „port‟
a number from one provider to another eliminates the hassle and expenses of changing
business cards, stationery, invoices and other materials for businesses. From the wireless
carrier‟s perspective the change is anything, but simple. Virtually all of wireless carriers‟
systems are affected. Especially any system that relies on mobile identity numbers
(MINs) or mobile directory numbers (MDNs) will be affected. Examples of critical
systems and processes that would be affected are: billing, customer service, order
activation, call delivery, roamer registration and support, short messages service center,
directory assistance, caller ID, calling name presentation, switches, maintenance and CSC
systems, home location registers (HLRs), and visiting location registers (VLRs). IIPM –
23. : One of the most common barriers in MNP implementation, within any country, has
been the implementation cost. Service Providers have been constantly bargaining for
time, based on the cost factor, from their respective governments. Referring to the recent
example of the US, where each of the large carriers would need to spend $50–60 million
to institute the service and an equivalent sum to maintain it. The FCC on this plea gave
wireless carriers in the US another year, i.e., till November 2003, for resolving
implementation issues. The experience of developed countries exhibits that local number
portability for fixed wireline was introduced within two to three years of introduction of
competition to incumbent state telcos. The cost estimate for the implementation of WNP
in developed nations like the US can be very helpful for the other countries, who wish to
think on the lines of number portability. To add on increased marketing costs are to be

realized as the carriers look to lock up their current base before number portability is
implemented, and then aggressively pursue the customers of other carriers thereafter. :
Every subscriber in a race to retain its customer would like to offer its customers best
services so as to save them from porting. It‟s like a blessing in disguise for the
customers, as they would get better service irrespective of the carrier, albeit with the
same number. Infrastructure Upgrade: To support WNP, a company has to upgrade both
its hardware and software capabilities, which will amount to some cost. Softwares need
to be upgraded to provide proper routing of calls. The carriers need to upgrade their
networks to handle portability requests. The provider, which has its portability
compatible would be expected to attract maximum customers and will emerge the
winner. Cost Recovery and Bill Reconciliation/Query Processing: When a customer plans
to shift, the old service provider (OSP) has to perform a query to identify if there are any
billing amounts pending, which they need to recover before the subscriber moves to the
new service provider (NSP). Globally, Singapore was the first country to implement
MNP in 1997, followed by Hong Kong in 1999 and Australia in 2001. Off late, many
countries have adopted the MNP model to prevent IIPM – AHMEDABAD SALES AND
24. market doldrums and putting pressure on service providers to furnish more services at
a competitive price level. However, it has not been able to produce any significant results
in these markets. While it has worked in markets like Hong Kong and Australia, it failed
to bear fruit in the UK, France, Germany, Pakistan, Ireland, Malta, among others. MNP
worked in Hong Kong due to the speedy porting process and the availability of already
implemented solution (for fixed- line services). In Australia, the regulator effectively
promoted number portability and was able to maintain the maximum porting time of just
under three hours. Furthermore, in Finland, where initially the implementation was
viewed as a success due to dearth of minimal contract periods and high migration
incentives, operators failed to sustain the momentum. The failure in most markets where
MNP was implemented is attributed to factors like half- hearted implementation, issues
related to contract, lack of consumer awareness, overboard of paperwork, technical
difficulties and poor customer service. The WiMAX vs. 3G cellular showdown is poised
to become one of the next great market battles in the telecom industry. Fortunes will be
made and lost in this battle, and the user experience of the Internet will be irreversibly
changed in the process. 3G scores for voice; Wimax may lead to increased broadband
penetration. With the Department of Telecommunications gearing up for simultaneous
release of 3G and WiMax spectrum, analysts expect the two emerging wireless
technologies to battle it out for supremacy. WiMax or Worldwide Interoperability for
Microwave Access is a telecom technology that enables wireless transmission of data.
The technology is available as IEEE 802.16D (fixed) and IEEE 802.16E (mobile). It
offers downloads of up to 70 Mbps as compared to the 15 Mbps that 3G provides. Mobile
WiMax offers download speeds of around 20 Mbps. In India, companies like Tata
Communications Internet Services, Intel, Bharat Sanchar Nigam Ltd, Bharti Airtel and
Reliance Communications are the proponents of WiMax. Most of the companies have
had beta- runs of the technology. According to a top official with a service provider,
telecom service providers are in various stages of WiMax implementation. Some
companies have commercially launched fixed WiMax services in certain cities. While
opponents of WiMax say currently it cannot be used for mobile applications, the first

mobile WiMax network was introduced in Italy this July. Another reason for the industry
pinning its hopes on WiMax is its ability to increase the broadband penetration. WiMax
makes huge sense for companies as it enables them to provide cheaper mobile internet
and broadband IIPM – AHMEDABAD SALES AND DISTRIBUTION Page 24
25. services, in turn, increasing the internet penetration. However, this will adversely
impact services like GPRS and e-mail on mobile as users might move over to WiMax-
enabled devices for data, even though they might stick with 3G or 2G spectrum for voice.
The Telecom Regulatory Authority of India has set a target of 20 million broadband
connections by 2010 from the current 4.3 million. The industry expects WiMax to bridge
the gap. According to a consultant of Ernst & Young service providers would mainly use
the technology for gaining traction with the customers, as providing the last mile over the
conventional digital subscriber lines would be time-consuming and costly. Operators will
have to use 3G spectrum to revive voice services that are being choked by a dearth of 2G
spectrum, Patel added. The WiMax customer premise equipment (CPE) is priced at Rs
5,000-10,000, while the CPEs for 3G would be cost Rs 10,000 and above. The industry
will know the winner in the next six months, when the spectrum allocation is complete.
Mobile Virtual Network Operator (MVNO) is a GSM phenomenon where an operator or
company which does not own a licensed spectrum and generally with out own
networking infrastructure. Instead MVNOs resell wireless services under their brand
name, using regular telecom operator's network with which they have a business
arrangements. Usually they they buy minutes of use from the licensed telecom operator
and then resell minutes of usage to their customers of MVNO. Currently MVNOs are
emerging in fast pace in European markets and beginning in USA also. Slowly MVNO
phenomenon catching up in Asia and other parts of the world also. An example for
MVNO is Virgin Mobile. Virgin Mobile plc is a mobile phone service provider operating
in the UK, Australia and Canada, and the US. The company was the world's first IIPM –
26. Mobile Virtual Network Operator, launched in the UK in 1999. It does not maintain
its own network, and instead has contracts to use the existing network(s) of other
providers. In the UK, Virgin Mobile uses the T-Mobile network. In the US, the Sprint
network is the carrier. In Australia, Virgin Mobile operates on the Optus network. In
Canada, it uses the Bell Mobility network. These networks use different technology
(GSM in the UK and Australia and CDMA in the US and Canada). Usually MVNO's do
not have their own infrastructure, some providers are actually deploying their own
Mobile Switching Centers (MSC) and even Service Control Points (SCP) in some cases.
Some MVNO's deploy their own mobile Intelligent Network (IN) infrastructure in order
to facilitate the means to offer value-added services. In this way, MNVO's can treat
incumbent infrastructure such as radio equipment as a commodity, while the MVNO
offers its own advanced and differentiated services based on exploitation of their own IN
infrastructure. The goal of offering value-added services is to differentiate versus the
incumbent mobile operator, allowing for customer acquisition and preventing the MVNO
from needing to compete on the basis of price alone. MVNO's have full control over the
SIM card, branding, marketing, billing, and customer care operations. While sometimes
offering operational support systems (OSS) and business support systems (BSS) to
support the MVNO, the incumbent mobile operators most keep their own OSS/BSS
processes and procedures separate and distinct from those of the MVNO. In the future a

cell phone user may be able to subscribe to a network operator plus multiple MVNOs for
specific data services over the same phone. One MVNO could provide sports news,
another weather and traffic and still another could provide instant messaging capabilities.
In this way, each MVNO and the network operator could focus on their own niche
markets and form customized detailed services that would expand their customer reach
and brand. So far MVNOs have not been regulated in any country. The ITU has received
several requests to study the issue, specifically to provide input on whether government
intervention is necessary to allow MVNOs to offer services and applications at a lower
price to consumers. This would IIPM – AHMEDABAD SALES AND DISTRIBUTION
Page 26
27. help to ensure a more efficient use of the spectrum but some incumbent providers
argue that the market is already competitive and intervention is not necessary. IPTV
(Internet Protocol Television) delivers television programming to households via a
broadband connection using Internet protocols. It requires a subscription and IPTV set-
top box, and offers key advantages over existing TV cable and satellite technologies.
IPTV is typically bundled with other services like Video on Demand (VOD), voice over
IP (VOIP) or digital phone, and Web access, collectively referred to as Triple Play.
Because IPTV arrives over telephone lines, telephone companies are in a prime position
to offer IPTV services initially, but it is expected that other carriers will offer the
technology in the future. IPTV promises more efficient streaming than present
technologies, and therefore theoretically reduced prices to operators and subscribers
alike. However, it also adds many advantages that may play into market pricing. One of
the advantages of IPTV is the ability for digital video recorders (DVRs) to record
multiple broadcasts at once. According to Alcatel, one leading provider, it will also be
easier to find favorite programs by using "custom view guides." IPTV even allows for
picture-in-picture viewing without the need for multiple tuners. You can watch one show,
while using picture-in-picture to channel surf! IPTV viewers will have full control over
functionality such as rewind, fast-forward, pause, and so on. Using a cell phone or PDA,
a subscriber might even utilize remote programming for IPTV. For example, if a dinner
function runs longer than expected, you don't have to miss your favorite program. Just
call home and remotely set the IPTV box to record it. However, the real advantage of
IPTV is that it uses Internet protocols to provide two-way communication for interactive
television. One application might be in game shows in which the studio audience is asked
to participate by helping a contestant choose between answers. IPTV opens the door to
real-time participation from people watching at home. Another application would be the
ability to turn on multiple angles of an event, such as a touchdown, and watch it from
dual angles simultaneously using picture-in-picture viewing. One can also receive Web
service notifications while watching IPTV for things such as incoming email and instant
messages. If you IPTV is packaged with digital phone, Caller ID might pop up on screen
as your telephone rings. IPTV is already growing in the international market, with
providers in many countries including Japan, Hong Kong, Italy, France, Spain, Ireland,
and the United Kingdom. In the United States SBC, reportedly purchased a software
delivery system for IPTV services from Microsoft in 2004 IIPM – AHMEDABAD
SALES AND DISTRIBUTION Page 27
28. for $400 million dollars. Alcatel is working with Microsoft to develop a "global
solution" for IPTV services, and Verizon has also made a deal with Microsoft for IPTV

software. Bharti Airtel is one of Asia‟s leading providers of telecommunication services
with presence in all the 22 licensed jurisdictions (also known as Telecom Circles) in
India, and in Srilanka. They served an aggregate of 105,195,762 customers as of June 30,
2009; of whom 102,367,881 subscribe to their GSM services and 2,827,881 use
Telemedia Services either for voice and/or broadband access delivered through DSL.
They also offer an integrated suite of telecom solutions to their enterprise customers, in
addition to providing long distance connectivity both nationally and internationally. They
have launched DTH and IPTV Services also. All these services are rendered under a
unified brand “Airtel”. The company also deploys, owns and manages passive
infrastructure pertaining to telecom operations under its subsidiary Bharti Infratel
Limited. Bharti Infratel owns 42% of Indus Towers Limited. Bharti Infratel and Indus
Towers are the two top providers of passive infrastructure services in India. Telecom
giant Bharti Airtel is the flagship company of Bharti Enterprises. Airtel comes to you
from Bharti Airtel Limited, India‟s largest integrated and the first private telecom
services provider with a footprint in all the 23 telecom circles. Bharti Airtel is
structured into three strategic business units - Mobile services, Telemedia services and
Enterprise services. The mobile business provides mobile & fixed wireless services
using GSM technology. Airtel was voted as the „Best Cellular Service‟ in the country
for four consecutive years. IIPM – AHMEDABAD SALES AND DISTRIBUTION Page
28
29. The Stock Exchange, Mumbai (BSE) The National Stock Exchange of India Type
Limited (NSE) Founded 1985 Headquarters New Delhi, India Key people Sunil Mittal
Industry Telecom Products Mobile and Fixed-Line Telecommunication operator, Airtel
DTH Revenue $6 Billion Slogan Express Yourself Website www.airtel.in Shahrukh
Khan, Karina Kapoor,Sachin Tendulkar,A.R.Rahman, Brand Ambassador Saifali Khan,
Madhvan,Vidhya Balan,Anandi (Avika guar) Balika vadhu. Shares in Issue:
1,898,373,280 as at June 30, 2009 Company Vision: By 2010 Airtel will be the most
admired brand in India. Loved by more customers. Targeted by top talent.
Benchmarked by more businesses. Leading Competitors- VODAFONE, IDEA, BSNL,
RELIANCE, TATA, AIRCEL IIPM – AHMEDABAD SALES AND DISTRIBUTION
Page 29
30. Vodafone is a British multinational mobile network operator headquartered in
Newbury, United Kingdom. Vodafone is the world's largest mobile telecommunication
network company, based on revenue, and has a market value of about £71.2 billion
(November 2009). Vodafone is the world's largest mobile telecommunications
community, employing over 65,000 staff and with over 130 million customers. The
business operates in 26 countries worldwide. Vodafone is a public limited company with
listings on the London and New York stock exchanges. Global recognition of the
Vodafone brand is growing as the company rolls out its identity into new markets.
However, it retains local names and imagery in markets where this is essential to
maintaining the trust of customers. To help promote its image worldwide, Vodafone uses
leading sports stars from high profile global sports, including David Beckham and
Michael Schumacher. This Case Study concentrates on how such promotion can help to
keep a leading brand at the forefront of public awareness For that reason our team
decided to work on few steps which were basically to get the feed back from the market
as fallow. Basically our objectives were to find out the behaviors of the consumers or the

customers towards the product available in the market that either consumer or the
customer is after the Quality of the product. After the price of the product. After the
good presentation of the product which includes the servicing. If the consumer is after
or comes for particular product and why, either because of effective advertisement on the
media like television or news papers or other means of advertisement. IIPM –
31. LOGO: Founded 1983 as Racal Telecom, independent 1991 Headquarters Newbury,
England, UK Arun Sarin, CEO Sir John Bond, Chairman Key people John Buchanan,
Deputy Chairman Andy Halford, CFO Industry Mobile telecommunications Products
Mobile networks, Telecom services, Etc. Revenue ▲ £31.104 billion GBP (2007) Net
income ▼ £-1.564 billion GBP (2007) Slogan Happy to help Website
www.vodafone.com Main Attractions of advertisement Dog, Zoo zoos IIPM –
32. Idea Cellular is a wireless telephony company operating in all the 22 telecom circles
in India. It initially started in 1995 as a joint venture among the Tatas, Aditya Birla Group
and AT&T by merging "'Wings Cellular'" operating in Madhya Pradesh, Uttar Pradesh
(UP) West, Rajasthan and Tata Cellular as well as Birla AT&T Communications. Initially
having a very limited footprint in the GSM arena, the acquisition of Escotel in 2004 gave
Idea a truly pan-India presence covering Maharashtra, Goa, Gujarat, Andhra Pradesh,
Madhya Pradesh, Chhattisgarh, Uttar Pradesh (East and West), Haryana, Kerala,
Rajasthan, Delhi (inclusive of NCR) and West Bengal. The company has its retail outlets
under the "Idea n' U" banner. The company has also been the first to offer flexible tariff
plans for prepaid customers. It also offers GPRS services in urban areas. Idea Cellular
won the GSM Association Award for "Best Billing and Customer Care Solution" for 2
consecutive years. Type Spice: Public, Listed on BSE IIPM – AHMEDABAD SALES
33. Idea: Subsidiary Spice: 1997 Founded Idea: 1995 Spice: Mohali, India Headquarters
Idea: Indore, Delhi, Pune, India Spice: Dilip Modi Key people Idea: Chairman: Kumar
Mangalam Birla ; MD: Sanjeev Aga Industry Telecom Products Mobile operator
http://www.moneycontrol.com/india/news/business/idea-cellulars- Revenue revenue479-
/394751 Spice: Spice Hai toh life hai (If there's Spice then there's Life.) Slogan Idea: An
!dea can change your life. Spice: Spice Telecom ; Website Idea: www.ideacellular.com
Brand Ambassador Abhishek Bachan RELIANCE OVERVIEW IIPM – AHMEDABAD
34. Reliance Communications, formerly known as Reliance Info comm, along with
Reliance Telecom and Flag Telecom, is part of Reliance Communications Ventures. It is
an Indian telecommunications company. According to National Stock Exchange data,
Anil Dhirubhai Ambani controls 66.77 per cent of the company, which accounts for more
than 1.36 billion shares.[3] It is the flagship company of the Reliance-Anil Dhirubhai
Ambani Group, comprising of power (Reliance Energy), financial services (Reliance
Capital) and telecom initiatives of the Reliance ADAG. It uses CDMA2000 1x
technology for its existing CDMA mobile services, and GSM-900/GSM-1800 technology
for its existing/newly launched GSM services. RelCom is also into Wire line Business
throughout India and has the largest optical fiber communication (OFC) backbone
architecture [roughly 110,000 km] in the country. Reliance Communications has
launched its Direct To Home (DTH) TV also, known as "Big TV". RelCom have

presence across all B2C communications channel in one of the fastest growing markets in
the world. BID FOR HUTCH: In 2007, Reliance Communications had bid for 67% of
Hutch but lost to Vodafone, which had been led by its CEO at the time Mr.PIYUSH.P.
ACQUISITIONS In July 2007, the company announced it is buying US-based managed
Ethernet and application delivery services company Yipes Enterprise Services for a cash
amount of Rs. 1200 crore rupees (equivalent of USD 300 million). The deal was announc
overseas acquisition, the Reliance group has amalgamated the United States-based Flag
Telecom for $ 211 million [roughly Rs 950 crore (Rs 9.50 billion)]. Type Public (BSE:
RCOM) IIPM – AHMEDABAD SALES AND DISTRIBUTION Page 34
35. Founded 2004 Headquarters Navi Mumbai, Maharashtra, India Key people Anil
Ambani (Chairman) & (MD) Vice-Chairman Reliance-ADA Group Industry
Telecommunications Products Wireless Telephone Internet Television Revenue US$ 4.26
billion (2008) Net income US$ 1.35 billion (2008) Total assets US$ 19.31 billion (2008)
Employees 33,000 Brand ambassador Hritik Roshan TATA: AN OVERVIEW IIPM –
36. Tata Comm. is India's leading international telecom service provider. It is today part
of the Tata Group. It started as a successor to the erstwhile Overseas Communication
Services, and went on to become the premier provider of international voice and data
services. Tata Teleservices Limited (TTSL) is a part of the Tata Group of companies, an
Indian conglomerate. It operates under the brand name Tata Indicom in various telecom
circles of India. In Nov 2008, Japanese telecom giant NTT Docomo picked up a 26 per
cent equity stake in Tata Teleservices for about Rs 13,070 crore ($2.7 billion) or an
enterprise value of Rs 50,269 crore ($10.38 billion).[1] In Feb 2008, TTSL announced
that it would provide CDMA mobile services targeted towards the youth, in association
with the Virgin Group on a Franchisee model basis. Tata Teleservices Provides mobile
services under 3 Brand names: Tata Indicom Tata DoCoMo Virgin Mobile Tata
Teleservices Limited (TTSL) IIPM – AHMEDABAD SALES AND DISTRIBUTION
Page 36
37. Type Private Founded 2000 Headquarters Navi Mumbai, India Mr. Ratan N. Tata
(Chairman) Key people Anil Kumar Sardana (MD) Industry Telecommunications
Wireless Telephone Products Internet Television Employees 350,000 Parent Tata Group
38. BSNL OVERVIEW Bharat Sanchar Nigam Limited (known as BSNL) is a public
sector telecommunication company in India. It is India's largest telecommunication
company with, 24% market share as on March 31, 2008. Its headquarters are at Bharat
Sanchar Bhawan, Harish Chandra Mathur Lane, Janpath, New Delhi. It has the status of
Mini Ratna, a status assigned to reputed public sector companies in India. BSNL is
India's oldest and largest Communication Service Provider (CSP). Currently has a
customer base of 90 million as of June 2008. It has footprints throughout India except for
the metropolitan cities of Mumbai and New Delhi which are managed by MTNL. As mon
March 31, 2008 BSNL commanded a customer base of 31.55 million Wire line, 4.58
million CDMA- WLL and 54.21 million GSM Mobile subscribers. BSNL's earnings for
the Financial Year ending March 31, 2007 stood at INR 397.15b (US$ 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 within 6 months to offload 10% to public in the

Rs 300-400 range valuing the company at over $100 billion. IIPM – AHMEDABAD
39. Founded 19th century, incorporated 2000 Headquarters Bharat Sanchar Bhawan,
Harish Chandra Mathur Lane, Janpath, New Delhi Kuldeep Goyal Key people (CMD)
Industry Telecommunications Wireless Telephone Products Internet Television Revenue
US$ 9.67 billion (2007) Owner(s) The Government of India IIPM – AHMEDABAD
40. Type Joint Venture Industry Telecommunications Founded 2009 Headquarters
Gurgaon, India Stein-Erik Vellan (CEO) Key people Sanjay Chandra (Chairman)
Wireless Products Telephone Internet Employees 2,000 Telenor (67.25%) Parent Unitech
Group (32.75%) Website Uninor.in IIPM – AHMEDABAD SALES AND
41. Type Public (BSE: 511389) Industry Conglomerate Founded 1979 Founder(s)
Nandlal Madhavlal Dhoot Headquarters Aurangabad, Maharashtra, India Venugopal
Dhoot (Chairman) Key people K. R. Kim (CEO) Consumer Electronics Home
Appliances Components Office Automation Mobile phones Products Wireless Internet
Petroleum Satellite television Power Revenue ▲ US$4 billion (2010) Net income ▲
US$276 million (2010) Employees 5,000 (2010) Website Videocon.com IIPM –
42. FOUR P‟S ARE:- 1) PRODUCT 2) PRICE 3) PLACE 4) PROMOTION Product-
Sim cards, Plug to surf devices, Handsets for CDMA Price- Offers, Schemes
Promotion: Print media, Electronic media, Outdoor media, Sales promotion Place:
Every retail shop, Offices, Home, Institutions The study shows it clearly that Vodafone
have a huge market share due to its better service and good network. But the thing that
differentiate it from the competitors that it provide the more and more number of the
value added services. Latest advertisement of Vodafone: Zoo zoos” is very attracting
and it increases the sales of the Vodafone , the marketing manager of Vodafone reveals
that statement. Study clearly shows that Vodafone is a has a brand image in the mind of
public due to their willingness to provide the best service. IIPM – AHMEDABAD
43. Vodafone focused more and more on the value added service and marketing.
Recently Vodafone gave its whole concentration by a series of advertisements of
ZOOZOO series. This move of Vodafone proved very successful to attract the more and
more number of the customers . Airtel basically uses two appeal to connect to the users
Emotional Humorous attracting In 2002, Airtel signed on music composer
A.R.Rehman and changed its tune to "live every moment": rah man‟s signature tune for
Airtel is the most downloaded ringbone in India. But that was just part of the ongoing
communication. The following year Airtel adopted the "express yourself" positioning,
which is also its current tagline. Youth icons like Shahrukh khan and Sachin
Tendulakar were brought in as brand ambassadors to attract youngsters Add campaign
with an eye on the rural market IIPM – AHMEDABAD SALES AND DISTRIBUTION
Page 43
44. The whole advertisement and promotion is designed by taking urban youth in focus
but there are large no of youths in rural sector as well and they can be their future
consumers. Taking big stars as brand ambassador is good decision. But organizations can
further use recent bronze medallist Boxer Vijendra kumar as there endorsement. Vijendra

is having good looking personality and he belongs to rural area so in this way rural
people will start associating themselves with that brand “SABKA AIRTEL”. Airtel can
also use BALIKA VADHU fame “ANANDI” (Avika gaur) targeting rural women and
rural youth Youth to Drive Growth:--Airtel should more concentrate towards the youth.
As the increasing market share of rivalry brand Virgin, clearly shows that youth can play
a major role in this competition. Attracting the Youth:-- To attract more youth
community Airtel can go for more and more plans for youth under the same brand
“SABKA AIRTEL”. In this plan Airtel can give SMS pack (it‟s for SMS generation),
cheaper call rates schemes only for school and college going students. In this plan Airtel
should go for the heavy youth promo with fast dance track and cute guys and gals.
Mobile service providers should provide the facility of portability of number. Mobile
service providers should provide the web access at cheaper cost. Telecom market is
quite competitive so mobile service providers should provide the services at cheaper cost.
Mobile service providers should focus on providing better network coverage
Especially BSNL. Mobile service providers should provide various schemes for their
existing customers. BSNL have to make more attractive ads. Add some other
promotional offers. Makes some sense full ads for Tata Doccomo For making
interactive add to connect with customers. Consolidation in Industry. IIPM –
45. Telecom players are looking to tap into global funds to finance their aggressive
growth plans. This will result in partnerships joint ventures and equity sellout to foreign
players. New license holders will continue to look to sell their stake at a premium. New
policies will seek to curb this license arbitrage. Smaller players with operations in only a
few circles will find in difficult to compete with the nationwide players. The industry
may see consolidation with these smaller operators being acquired by the larger ones.
“Unbundling of the corporation” will continue as companies will seek f or economies of
scale and lower startup cost by infrastructure sharing. 3G and WiMax license will spur
M&A and partnership activity. Idea Cellular‟s Acquisition of Spice Telecom There
were three transactions as part of this acquisition; acquisition of shares of Spice, a non-
compete fee and a capital infusion of about Rs 7300 crores received from TM
International Bhd (TMI). With respect to shares, Idea acquired 40.8% stake of Spice
Communications at Rs 77.30 a share for Rs 2,716 crore. There was a share swap in which
Spice shareholders got 49 Idea shares for every 100 Spice shares held. An additional Rs
544 crore was paid to the promoters of Spice group as 'non-compete fee'. The deal was
strategically important for Idea Cellular as it was looking forward to transfer itself into a
pan-India telecom service provider. The spectrum auctioned by GoI is a scarce resource
nowadays and cost a premium. Also there‟s restriction by TRAI with respect to number
of operators per telecom circle. So it makes sense to acquire a small telecom operator.
Small players like Spice Telecom operating at only a few circles(Karnataka and Punjab)
will find difficult to compete with the nationwide players in the long run. So it was a win-
win deal for both companies. VODAFONE‟S ENTRY INTO INDIA Vodafone paid a
discounted price of $10.9 billion in cash for acquiring the 52% stake held by Hutchison
Telecom International (HTIL) in Indian mobile firm Hutch-Essar. HTIL declared a
special dividend of 6.75 HK dollars per share following the completion of the formalities.
The final price was a reduction of $180 million from the originally agreed price of $11.08
billion. Vodafone is the largest mobile telecommunications network company in the

world. The deal gave them access to one of the fastest growing mobile markets in the
world. Telenor-Unitech Deal IIPM – AHMEDABAD SALES AND DISTRIBUTION
Page 45
46. Norwegian Telecom major Telenor is in the process of acquiring controlling stake of
67.25% in Unitech wireless via equity infusion. The enterprise valuation of Unitech
Wirelsss is about Rs 10,900 crore. As per the deal, Telenor will infuse cash in four stages
and at each phase, by increasing its stake in Unitech Wireless. In the first phase, they got
33.5% ownership in Unitech Wireless. In the second phase they completed the
acquisition for a 49 per cent stake in Unitech Wireless by paying Rs 1,130 crore for a
further 15.5 per cent stake in the company. The acquisition is expected to be completed
by end of this quarter. TTSL – DoCoMo Deal. Japanese carrier NTT DoCoMo
acquired 26 per cent stake in Tata Teleservices (TTSL). The Tata DoCoMo-branded
GSM service has already started in Southern India and gradually will be expanded
nationwide. DoCoMo‟s international expansion plans have not always proven successful,
with the firm historically preferring to take small stakes in firms and then try to influence
their strategy. It has been less prepared to take majority stakes and impose its will, as
other leading carriers have chosen to do. The difficulties faced by the firm in spreading
its domestically successful i-mode service internationally typify the obstacles it has faced
overseas. With Tata, DoCoMo had said “participating proactively in TTSL‟s
management by providing human resources and technical assistance to help realise
improved network quality and the possible introduction of leading- edge, value-added
services.” Bharti-MTN deal (in talks). Recently Bharti Airtel has re-started its
audacious merger bid with MTN that could create a $61- billion transnational telecom
goliath with combined revenues of $20 billion and over 200 million subscribers across
Africa, Asia and Middle East, will be among the world's 10 biggest telecom companies.
The deal could be win-win for both parties. Bharti is under pressure in its home country
due to severe competition and looking forward to spread its risk across geographies.
Meanwhile, the African telecom operator is also encountering some of the problems that
its counterpart in India is confronting. MTN may have higher ARPUs (in the range of
$12-20), but they are also falling fast. Strategic benefits to both players Synergies
would be sought from a number of areas, including procurement, operational best
practice, R&D and international network sharing. The two companies will not overlap in
each other‟s business operations: Bharti Airtel will be the primary vehicle for Bharti and
MTN to pursue further expansion in Africa and the Middle East. IIPM – AHMEDABAD
47. With both Bharti and MTN operating in high-growth geographies, it would be
imperative for them to incrementally expand into untapped areas. Collaborating with each
other would seem the logical way ahead. The most important, and visible fallout of the
deal, if it materializes, will be the advantage of economies of scale for the new entity. In
recent times, companies are more amenable to mergers and acquisitions. Of late,
companies are finding it tough to obtain easy funds for expansion, which calls for more
collaboration if corporate intend to expand. Bharti would not be involved only in MTN‟s
day-to-day activities, but it would also have a say while making bigger strategic
decisions, such as those pertaining to investments in other geographies or sourcing of
equipment. The high subscriber base and financial muscle will give Bharti-MTN the
desired edge while dealing with vendors. Once the merger happens, the economies of

scale of the complete outfit (Bharti-MTN) would be taken into account. For instance,
even if the company places an order worth just $1 million, the vendor would not hesitate
to lap it up, as there could be orders worth a billion dollars in other projects. This would
offset whatever concerns there may be with respect to the small population size in
countries where MTN operates. Takeaways for Bharti The biggest takeaway for Bharti
is in the form of access to new geographies with high growth potential. Without a partner,
Bharti would have to embark on a Greenfield project, which would be time-consuming
and capital intensive. Besides, without local knowledge (with respect to the market and
government regulations), Bharti could be on a sticky wicket. The Indian telco does not
have the expertise in running multi-country operations. MTN has operations in 21
countries across Africa and the Middle East and is one of the largest emerging market
mobile operators globally. While Africa has one-third of the world‟s population, its
telephonic density is just 30 per cent. This offers plenty of room for expansion. The fact
that 95 percent of Africa is prepaid, which ensures all cash operations, fits perfectly into
Bharti‟s plans. The options for Bharti were to go either the Greenfield way or with an
experienced partner. MTN‟s strong foothold in some growing markets such as South
Africa, Botswana, Iran and Nigeria ensures that when the growth in India starts to slow
down, Bharti would be ready to take off in other geographies. Besides, there is a lot of
potential in Africa as three-fourths of the continent is still untapped. IIPM –
48. Africa is quite like rural India and from that perspective; Bharti could learn how to
roll out infrastructure in rural India. In addition, MTN is strong in the value-added
services (VAS) and mobile commerce space. So, as and when mobile commerce picks up
in India (after RBI‟s approval), Bharti would be able to tap this market through MTN‟s
expertise. MTN has a vast experience in running multi-country operations and
overcoming regulatory hurdles. By working with MTN, life for Bharti will get a lot of
easier. One of the major challenges would be the integration of the company on the
ground. It is tough for intercontinental companies to merge seamlessly because of
cultural divide. Alcatel-Lucent for instance is still trying to adjust to cultural divide.
Although Nokia-Siemens has bridged this divide faster, it was because both the
companies were European. The Black Empowerment Act could pose a challenge, as it
is meant to safeguard the rights of the black population. As per this Act, blacks are
ensured a minimum shareholding management seats and voting rights. The country‟s
strong trade union, Congress of South African Trade Unions (COSATU), which has
influence over President Jacob Zuma, had almost wrecked the Vodafone-Vodacom deal.
The Indian telecom industry has always allured foreign investors. In fact, the
cumulative FDI inflow, from August 1991 to March 2007, in the telecommunication
sector amounted to US$ 7,513.22 million. This makes telecommunication the third-
largest sector to attract FDI in India in the post liberalization era. The investment was
majorly in handset manufacturing and telecom service provider. IIPM – AHMEDABAD
49. With stable macroeconomic impetus and numerous other advantages, India has the
potential to become the electronics manufacturing hub of the world. Excited by the
record-breaking industry growth, investors have outlaid US$ 1.5 billion in the past two
and a half years in the Indian telecom sector. India will receive an additional US$ 2

billion investment in the next one year. With the world now recognizing India‟s
manufacturing potential, the Indian telecom handset manufacturing market is likely touch
US$ 7 billion by 2010. An example is Nokia. The company has already produced 25
million handsets in its Chennai facility. It will pump in an additional US$ 150 million to
this set up. The company exports around 20 per cent of its volume to South- east Asia,
the Middle East and Africa. Local manufacturing allows companies to avoid 4 per cent
countervailing duties on imported handsets, thereby further reducing the cost. Managed
service is another segment that is attracting telecom companies. On account of the rapidly
growing subscriber base, service providers find it difficult to manage their infrastructure
and network. In such cases, they completely or partially outsource their infrastructure or
network management operations. Hutchitson Essar (now Vodafone) and Nokia Deal: A
case in point is Nokia which is managing the network for Hutchison Essar Limited in 19
circles in India. Having successfully capitalized on the business potential of managed
service, IIPM – AHMEDABAD SALES AND DISTRIBUTION Page 49
50. Nokia is already earning 30 per cent of its total revenue from this segment. The
company has also shifted its first Global Network Solutions Centre (GNSC) to India. The
company manages 39 cellular networks in 30 countries. Its Indian center will act as a
global hub for other Nokia operation centers. Advantages of Managed Service • Smooth
management of technological complexity • Opportunity to strengthen core competency •
Reduction in financial outlay • Touching base with new processes and technologies
Another dimension of managed service is telecom, communication and network
management solutions for enterprises. Bharti Televentures and IBM, together offer
telecom and IT solutions in India. The solutions and services portfolio comprises of the
remote monitoring of servers, security operations and network operations, providing data
center services (including server hosting, server management and storage management),
IT help desk services and end-to-end connectivity and fulfilling all telecom and
communication requirements. This information technology outsourcing deal with
infotech major IBM is estimated to be in the range of $700- 750 million for a ten-year
period. The deal involved outsourcing of BTVL's hardware, software and IT service
requirements to IBM. The agreement specifies that payments made to IBM India will be
linked to the percentage of revenue generation by BTVL and pre-defined service level
agreements. The percentage-linked revenue payment is modeled to decrease with BTVL's
increase in revenue. The deal includes all customer-facing IT applications like billing,
customer relationship management and data warehousing. In addition, Internet, e-mail
and online collaborations are included in it. On the infrastructure front, IBM will
consolidate BTVL's data center, IT helpdesk and enhance its disaster recovery center
capabilities, he said. Bharti‟s Outsourcing to Alcatel-Lucent: Telecom major Bharti Airtel
has a $500-million deal to Alcatel-Lucent for outsourcing the management and servicing
of its broadband and fixed line network for five years. The deal involves the creation of a
joint venture with Alcatel-Lucent holding 76 per cent of the equity, and Bharti having the
remainder 24 percent. The joint venture will help accelerate performance as Bharti
migrates to the next generation networks for the broadband and telephone customers.
51. Bharti Outsourcing Deal with Nokia & Ericsson Bharti Airtel awarded a $400m
contract to Nokia for expanding its managed GSM networks in eight circles. This also
marks Bharti‟s third major deal with Nokia in the last two years. Bharti would have

100% ownership of the networks supplied by Nokia, with the actual payment being
linked to utilization of capacity and fulfillment of agreed quality of service parameters.
This comes close on the heels of Bharti‟s recent signing of a $1bn three-year service
contract with Ericsson towards design, planning, supply, installation, commissioning and
upgrading of its network in 15 telecom circles. This emphasizes Bharti‟s policy towards
outsourcing all operational activities, including customer services to global majors. This
has enabled Bharti to focus on its core areas: product innovation, value added services,
marketing, branding and pricing. It has enabled Bharti to concentrate on customers,
finances and regulation. As per the three-year contract, Nokia will provide managed
services and expand Airtel‟s GSM/GPRS/EDGE networks in eight circles of Mumbai,
Maharashtra & Goa, Gujarat, Bihar, Orissa, Kolkata, West Bengal and Madhya Pradesh.
The network monitoring operations will be carried out from Nokia‟s state-of-the-art
Global Network Services Center in Chennai. The deal also envisages Nokia to deploy its
WAP solution across Bharti‟s national network to enhance its mobile packet core
network capabilities. This will make usage of data services easy, thereby increasing the
consumption of content on the Bharti network. Future Technology Trends In this section
we have listed down the future technologies which are in roadmap and are speculated to
make an impact on current business model of telcos. IP Multimedia Subsystem (IMS) IP
Multimedia Subsystem (IMS) is a generic architecture for offering multimedia and voice
over IP services, defined by 3rd Generation Partnership Project (3GPP). IMS is access
independant as it supports multiple access types including GSM, WCDMA, CDMA2000,
WLAN, Wireline broadband and other packet data applications. IMS will make Internet
technologies, such as web browsing, e-mail, instant messaging and video conferencing
available to everyone from any location. It is also intended to allow operators to
introduce new services, such as web browsing, WAP and MMS, at the top level of their
packet-switched networks. IP Multimedia Subsystem is standardized reference
architecture. IMS consists of session control, connection control and an applications
services framework along with subscriber and services data. It enables new IIPM –
52. converged voice and data services, while allowing for the interoperability of these
converged services between internet and cellular subscribers. IMS uses open standard IP
protocols, defined by the IETF. So users will be able to execute all their services when
roaming as well as from their home networks. So, a multimedia session between two IMS
users, between an IMS user and a user on the Internet, and between two users on the
Internet is established using exactly the same protocol. Moreover, the interfaces for
service developers are also based on IP protocols. Some of the possible applications
where IMS can be used are: Presence services Full Duplex Video Telephony Instant
messaging Unified messaging Multimedia advertising Multiparty gaming Video
streaming Web/Audio/Video Conferencing Push-to services, such as push-to-talk,
push-to-view, push-to-video Effectively, IMS provides a unified architecture that
supports a wide range of IP-based services over both packet- and circuit-switched
networks, employing a range of different wireless and fixed access technologies. A user
could, for example, pay for and download a video clip to a chosen mobile or fixed device
and subsequently use some of this material to create a multimedia message for delivery to
friends on many different networks. A single IMS presence-and-availability engine could
track a user's presence and availability across mobile, fixed, and broadband networks, or

a user could maintain a single integrated contact list for all types of communications. A
key point of IMS is that it is intended as an open-systems architecture: Services are
created and delivered by a wide range of highly distributed systems (real-time and non-
real-time, possibly owned by different parties) cooperating with each other. It is a
different approach to the more traditional telco architecture of a set of specific network
elements implemented as a single telco-controlled infrastructure. High Speed Downlink
Packet Access (HSDPA) High Speed Downlink Packet Access (HSDPA) is a packet
based technology for W-CDMA downlink with data transmission rates of 4 to 5 times
that of current generation 3G networks IIPM – AHMEDABAD SALES AND
53. (UMTS) and 15 times faster than GPRS. The latest release boosts downlink speeds
from the current end-user rate of 384 kbps (up to 2 Mbps according to standards) to a
maximum value according to standards of 14.4 Mbps. Real life end-user speeds will be in
the range of 2 to 3 Mbps. HSDPA provides a smooth evolutionary path for Universal
Mobile Telecommunications System (UMTS) networks to higher data rates and higher
capacities, in the same way as Enhanced Data rates for GSM Evolution (EDGE) does in
the Global System for Mobile communication (GSM) world. The introduction of shared
channels for different users will guarantee that channel resources are used efficiently in
the packet domain, and will be less expensive for users than dedicated channels. 4G or
Fourth Generation Networks 4G or Fourth Generation is future technology for mobile
and wireless comunications. It will be the successor for the 3Rd Generation (3G) network
technology. Currently 3G networks are under deployement. Approximatly 4G
deployments are expected to be seen around 2010 to 2015. The basic voice was the driver
for second-generation mobile and has been a considerable success. Currently , video and
TV services are driving forward third generation (3G) deployment. And in the future, low
cost, high speed data will drive forward the fourth generation (4G) as short-range
communication emerges. Service and application ubiquity, with a high degree of
personalization and synchronization between various user appliances, will be another
driver. At the same time, it is probable that the radio access network will evolve from a
centralized architecture to a distributed one. The evolution from 3G to 4G will be driven
by services that offer better quality (e.g. multimedia, video and sound) thanks to greater
bandwidth, more sophistication in the association of a large quantity of information, and
improved personalization. Convergence with other network (enterprise, fixed) services
will come about through the high session data rate. It will require an always-on
connection and a revenue model based on a fixed monthly fee. The impact on network
capacity is expected to be significant. Machine-to-machine transmission will involve two
basic equipment types: sensors (which measure parameters) and tags (which are generally
read/write equipment). It is expected that users will require high data rates, similar to
those on fixed networks, for data and streaming applications. Mobile terminal usage
(laptops, Personal digital assistants, handhelds) is expected to grow rapidly as they
become more user friendly. Fluid high quality video and network reactivity are important
user requirements. Key infrastructure design requirements include: fast response, high
session rate, high capacity, low user charges, rapid return on investment for operators,
investment that is in line with the growth IIPM – AHMEDABAD SALES AND

54. in demand, and simple autonomous terminals. The infrastructure will be much more
distributed than in current deployments, facilitating the introduction of a new source of
local traffic: machine-to-machine. The Indian Telecom Service provider industry is
gearing for a revolution. The customer is driving this revolution and will see more unique
and sophisticated offerings coming his way. The 3G which will pave the way for 3.5G,
3.75G and the next big thing-4G and the VAS services will keep the customer asking for
more. The rural areas which have remained untapped will see an insurgence of services.
Also the easing of the regulations by TRAI ,the ease of spectrum licensing, the FDI
influx will make the telecom space in India a must watch in the coming years.
REFERENCES [1} IBEF report 2007-08/08-09 : Telecommunication - MARKET &
OPPORTUNITIES. [2] Cellular Statistics – Cellular Operator Association of India [3]
IAMAI & eTechnology Group@IMRB: MOBILE VALUE ADDED SERVICES IN
INDIA- A Report. [4] Telenor Entering India: Investment Update [5] Voice and
Data(May 2009): Mobile Number Portability - Poaching with Portability. [6] Business
India : Telecom Takeover, Bharti-MTN deal [7] Moneycontrol.com: Idea Spice deal [8]
Business Standard: Vodafone Hutch deal *9+ IntoMobile: India‟s 3G License Plans
Updated. [10] World Bank Report: Spectrum auctions in India: lessons from experience
WEBSITES USED: http://www.airtel.in http://en.wikipedia.org/wiki/Idea_Cellular
http://en.wikipedia.org/wiki/Spice_Telecom http://www.pluggd.in/indian-telecom-
industry/idea-tmi-acquires-spice-telecom-1805/ IIPM – AHMEDABAD SALES AND
55. http://www.adityabirlanuvo.com/media/features/features.aspx?ID=1d95UDdxCdM
http://www.mobiles.in/mobile-service-providers.htm http://www.bsnl.co.in/about.htm
www.vodafone.co.in www.ideacellular.com www.google.com MAGAZINES
USED: 4PS Business Economics Times of India Industrial Handbook 2009 IIPM
– AHMEDABAD SALES AND DISTRIBUTION Page 55

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