indian telecom service providers
Content
REPORT ON
“Operational Comparative Study of Indian Telecom Service providers”
SUBMITTED BY
Praveen Sidola
1021026
Master in Business Administration
CHRIST UNIVERSITY INSTITUTE OF MANAGEMENT
Hosur Road, Bangalore 560 029
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Index
Title
Executive Summary
Introduction
Literature Review
Problem Definition and Objectives of the Project
Research Methodology
Findings & Interpretations
Conclusion
Bibliography
Appendix
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EXECUTIVE SUMMARY
Ranked amongst some of the fastest growing economies of the world, India has registered
steady growth over the last few years, The Indian telecom sector particularly, witnessed
aggressive growth during the last two years, emerging as a global benchmark for other
developed countries as well. All major international operators are exploring opportunities to
make inroads into the Indian telecommunication sector, both for the vast customer base as
well as to leverage on the low cost outsourcing model which India has been successful in
pioneering.
As of February 28, 2011, the country’s subscriber base (wireline + wireless) stood at 826.25
million but active wireless subscribers in VLR (Visitor Location Register) in Feb- 2011 is
562.98 Million, with the overall teledensity reaching 69.29 percent. With increasing maturity
of urban markets, the next round of growth is expected to be generated from the rural areas in
the form of increased uptake of voice and data based value added services, as well as
broadband services.
The penetration of broadband in India has not been as aggressive as the wireless
communication services. As of February 2011, the broadband subscriber base in India is
approximately 11.47 million. The government, recognizing the potential of broadband as a
key enabler in furthering its growth agenda, has taken a strong stance to address the issue of
low penetration and enhance broadband coverage across the country. The recently concluded
3G and BWA auctions are likely to be the catalyst that furthers the government’s agenda of
providing broadband connectivity to the remotest parts of India.
The government as well as other telecom stakeholders believe that these wireless
technologies will help overcome the barriers of expensive wireline infrastructure, especially
in the low revenue generating zones.
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Chapter - 1
Introduction
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1.1 The Global Telecommunication Industry
Telecom services will continue to be one of the key growth sectors having generated
revenues of roughly INR 67 trillion in 2009. Global wireless subscribers reached 4.6 billion1
in 2009 with a CAGR of 22 percent over 2004-20091. This occurred despite some carriers
experiencing marginal declines or fl at trends
In revenues with enterprises and consumers exercising cut backs on telecom spending during
the global economic slowdown. The continuing rise in affl uence levels in emerging markets
and the resultant increase in the standard of living is expected to have an increasing impact on
the revenue per subscriber.
Telecom market revenue by sector
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Falling voice ARPUs in most countries
Wireless ARPU ranges from USD 54 per month in Japan to under USD 5 per month in the
Philippines, Indonesia and India, evidently demonstrating the lower ARPU realization in
emerging countries2. The blended wireless ARPU is roughly USD 18 globally, declining at
10 percent per year (on a local currency basis).
Global wireless ARPU comparison (2009)
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Asia to continue to lead growth in wireless services
The Asia Pacific region driven by growth in India and China will continue to be the key
growth market for global telecom over the next few years. Developed markets such as Japan
and Korea, are witnessing the benefits of significant technology investments and innovation.
Meanwhile, India and China, which constitute 28 percent10 of the global wireless subscriber
base today, are witnessing the benefits of significant growth in income levels due to sustained
economic growth. Penetration figures in both countries continue to remain significantly lower
than developed economy levels, auguring Ill for continued growth and development of the
telecom market in the region.
Mobile subscribers (share of the world)
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1.2 The Indian Telecommunication Industry
The Indian telecommunications market has continued to show consistent growth during the
last one year, with exciting developments such as rollout of newer circles by operators,
successful auction of 3G and BWA spectrum, growing push by telecom operators to rollout
network in semi-rural areas and increased focus on the value added services market. Telecom
continues to be one of the fastest growing sectors of the Indian economy, becoming a strong
contributor to India’s overall GDP and is expected to grow further.
Overall teledensity in India has risen to the levels of ~59.6 percent (as of August’10)
to 69.29 percent (as of February 2011) comprises 551.27 million urban subscribers
(teledensity of ~154.01 percent) and 274.98 million rural subscribers (teledensity of ~32.95
percent) With a large part of the population yet to obtain access to the telecommunication
market, there is immense potential for the sector to grow, especially in non-urban areas,
where wireline and internet services are yet to make significant in-roads. Wireline services
have shown relatively negative growth -.5.66 percent (Feb 2010 to Feb 2011). Even the
mobile services space which has seen exponential growth in urban areas, has not yet reached
the vast majority in rural areas with rural teledensity of approximately 40.31 percent (Feb
2010 to Feb 2011), indicating huge untapped potential for the sector. Broadband is yet to
reach a critical mass despite rapid growth; the numbers have risen from 6.98 million in
August 2009 to 10.08 million by August 2010, registering a growth of 55 percent on an
annual basis. With subscriber penetration under 2 percent, the sector has potential for
aggressive growth in the future.
Indian Telecom Industry classified in
•
Total Circle
-
22
•
Operator
-
20 (16+4)
•
Service Area -
338
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Mobile services
The Indian mobility market can be characterized as one with a very large subscriber base4
(~671 million as of August 2010), high growth5 (addition of 16-18 million subscribers every
month in last six months), low ARPUs (~INR 122 per month in June, 2010) and significant
churn rates. In the prepaid segment, ARPU declined by 6.2 percent from INR 113 in March,
2010 to INR 106 in June, 2010. The Government of India opened up mobile services to
private participation in 1994-95 by inviting bids for providing services in the four
metropolitan cities and 18 non-metro circles. Services Ire introduced in 1995 with the high
tariffs resulting in poor demand. The National Telecom Policy 1999 moved the industry to a
revenue share model from the fixed license fee and the lower tariffs resulted in the addition of
~ 12 million subscribers during the 1999-03 period as compared
To less than a million subscribers added during the 1995-99 period. During this period the
government also set-up the Telecom Regulatory Authority of India (TRAI) in 1997 and
‘Telecom Dispute Settlement and Appellate Tribunal (TDSAT)’ in 2000.
Growth of wireless subscriber base (year end numbers)
Source: TRAI Annual Report and Quarterly Reports on Telecom Services Performance Indicators
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The Calling Party Pays regime was introduced in 2003- 04 which allowed free incoming calls
for the subscribers. This revolutionary change can be designated as one of the watershed
milestones in the growth of the Indian telecom sector. The 22 telecom circles in India have
been classified into 4 categories viz. Metros, Category A, B and C. With penetration rates in
metros touching more then 100 percent, the market in Metros is nearly saturated. However,
there is still immense potential in other circle categories, particularly B and C
Mobile subscriber base and mobile teledensity across telecom circles
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Source: ‘Monthly Telecom Scenario – August 2010’, DoT, October 2010
The current subscriber base of 707 million (August 2010) comprises 476 million urban
subscribers (teledensity of ~134 percent) and 230 million rural subscribers (teledensity of ~28
percent) & 791 million (February 2011) comprises 525.17 million urban subscribers
(teledensity of ~146.72 percent) and 266.21 million rural subscribers (teledensity of ~31.90
percent) million overall teledensity is 66.36percent. The market is highly competitive with
some of the telecom circles having more than 14 operators. Competitive intensity in the
market has contributed to reduction in tariffs and launch of innovative schemes like lifetime
prepaid and low cost handset bundling which further reduced the entry.
Wireline services
While wireless has seen consistent growth over the years, wireline over the last few years has
actually seen a decline in the subscriber base. The total number6 of fixed line connections in
India increased from 5.81 million in 1991-92 to 40.8 million in 2006-07. During 1999-2000
to 2001-02, approximately 5-6 million customers Ire added to fixed-line services each year.
However, with the drop in mobile tariffs and increase in coverage of mobile services, net
additions in fixed-line subscribers started slowing down from 2.5 million in 2002-03 going
down to 0.5 million in 2004-05. Due to mobile substitution and lower tariffs, the fixed line
subscriber base actually decreased by 3.5 million between 2006-07 and 2008-09. This decline
was aggravated by slow rollout of fixed line services by Telco’s due to the significantly
higher total cost of service provision for fixed line services compared to mobile wireless
services, in February 2011 only 34 Million wireline subscribers are reported.
It also comes in observation that rural subscriber are more interested in wireless in
compression of wireline... However, the potential for wireline services remains large due to
very low penetration in the wireline industry and the ability of wireline to deliver broadband
at lower operating costs than wireless broadband. New players in the telecom space had
hitherto concentrated on wireless space leading to low competition and promotion of wireline
services. Greater pan-India expansion by private players can significantly lead to growth of
wireline services. In addition, with combined offering of internet/ broadband and allied
services like IPTV, the sector can bounce back in the future. But, the aggressiveness of
mobile operators in rural areas due to easier and cheaper rollout and newer offerings on BWA
spectrum can further slow down the wireline penetration.
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Wireline subscriber base
Source: TRAI Annual Report and Quarterly Reports on Telecom Services Performance Indicator
Broadband and internet services
Internet subscriber base in India, though currently at a low level, has been experiencing
significant growth over the last 2-3 years. This growth is being driven by the growing
popularity of broadband, increasing user comfort with usage of internet applications,
continuous fall in PC prices and decreasing costs of internet/broadband access plans. This
growth has been accompanied by an associated increase in the number of internet users which
have attributed to the growth of public internet cafes and multiple members of a household
accessing internet. Access technologies play a crucial role in broadband penetration. Right of
Way (Row) issues and costs of the existing broadband technologies has been a constraint for
the growth of internet. While there a number of technologies being used by service providers
to provide broadband services, DSL continues to be the most preferred technology and
constitutes nearly 86.6 percent of total broadband subscribers7. Cable modem technology
follows with 6.9 percent connection. On an overall basis for accessing internet, DSL leads
with 51 percent while dialup stands second at 33.3 percent7. Wireless technologies have
carved a unique niche in terms of connectivity to internet with a share of nearly 7.6 percent
which is a significant shift in the last two years. Newer access technologies like BWA and 3G
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can completely transform the character of Internet/ broadband scenario in India. BWA will
overcome the key hindrance of Row in India, while 3G has the potential to make the mobile
phone, a ubiquitous device for accessing the internet.
Internet subscriber base
Source: TRAI Annual Report and Quarterly Reports on Telecom Services Performance Indicators
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New frontiers for growth
3G and BWA
The last 5 years have been transformational for Indian telecom industry and the next few
years are expected to bring about more stimulating and aggressive changes. One of the key
frontiers which would make the journey in coming years even more exciting is the launch of
3G and BWA technologies. The auction of 3G spectrum was concluded on May 19, 2010.
While commercial usage is started from September 2010 onwards, the auction laid the
groundwork for faster internet connectivity and data transfer on mobile phones, boosting
usage of data services in the cellular market. This was closely followed by auctioning of
BWA spectrum which also exceeded revenue expectations of the government. The highly
successful auctioning of 3G and BWA spectrums and entry of new telecom players in BWA
auction has ensured that telecom market will see more exciting times going forward. Total
revenues which the government earned from these two auctions stood at approximately, INR
1,063 billion the market is likely to witness a wide variety of value added services being
offered, which Ire not possible over the current 2G/2.5G network. The ARPU is expected to
get a boost given the increased revenue contribution from data and value added services.
Potential challenges that 3G players could face would span across the value chain covering
innovative Product development, Network deployment and management, Sales and
Marketing etc. In the first wave, operators would be able to provide rich data services to
HNI’s, working professionals, enterprise customers and youth. They would be specifically
targeting current users of 2.5G and/or owners of 3G enabled handsets. At the same time
operators would be actively looking at providing 3G services to other income groups, as this
will help spread the investment in technology/license over a wider subscriber base. The
Ministry of Communications had specified that BWA spectrum allocation would be
technology neutral. High speed broadband on BWA spectrum also has the potential to
provide connectivity for the growing small and medium enterprises (‘SME’) segment; and be
utilized for the return path bundled with the DTH platform.
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NEXT GENERATION NETWORKS
In the Next Generation Networks, multiple access networks can connect customers to a core
network based on IP technology. These access networks include fibber optics or coaxial cable
networks connected to fixed locations or customers connected through Wi-Fi as Ill as to 3G
networks connected to mobile users. As a result, in the future, it would be impossible to
identify whether the next generation network is a fixed or mobile network and the wireless
access broadband would be used both for fixed and mobile services. It would then be futile to
differentiate between fixed and mobile networks – both fixed and mobile users will access
services through a single core network.
Indian telecom networks are not as intensive as developed country’s telecom networks and
India's teledensity is low only in rural areas. 670,000 route kilometres (419,000 miles) of
optical fibbers has been laid in India by the major operators, even in remote areas and the
process continues. BSNL alone has laid optical fibber to 30,000 Telephone Exchanges out of
their 36 Exchanges. Keeping in mind the viability of providing services in rural areas, an
attractive solution appears to be one which offers multiple service facility at low costs. A
rural network based on the extensive optical fibber network, using Internet Protocol and
offering a variety of services and the availability of open platforms for service development,
viz. the Next Generation Network, appears to be an attractive proposition. Fiber network can
be easily converted to Next Generation network and then used for delivering multiple
services at cheap cost...
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1.3 Regulatory and Policy environment In India
Regulatory and policy environment
Over the years, the Indian Telecommunication Policy and Regulatory framework has evolved
into an Ill developed framework that facilitates effective policy formation and execution. The
government has been making constant efforts to ensure that the regulatory framework is
beneficial for the consumers as Ill as the licensed operators. The policy and regulatory
framework for telecommunications in India consists of, among others, the following key
bodies
•
The Department of Telecommunication (DoT)
•
The Telecom Regulatory Authority of India (TRAI)
•
The Telecom Disputes Settlement and Appellate Tribunal (TDSAT)
•
Wireless Planning Commission (WPC)
•
Group on Telecom and IT (GoT – IT)
TRAI
Telecom Regulatory Authority of India was established as an independent body under the
TRAI Act of 1997. The act was later amended in 2000. The entry of private players into the
industry prompted the establishment of the act to effectively regulate the telecom players.
TRAI safeguards the interests of the consumers through transparency, ensuring conformity
with service quality benchmarks, enforcing measures to safeguard national security, fixing
tariffs for players, counselling the government on matters relating to telecommunication
development and tracking performance a d efforts of all players within the industry.
DoT
DoT is accountable for policy formulation, monitoring performance reviews, ensuring
international co-operation, overlooking research and development and granting licenses to
operators, allowing them to provide basic and value added services in various cities and
telecom circles as per the approved government policies. The Department also allocates
spectrum and manages radio communications in close coordination with the International
bodies. It is also responsible for enforcing wireless regulatory measures and monitoring the
wireless transmission of all users in the country
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Regulatory evolution
Source: Press Search, KPMG Analysis
otal active Mobile Subscriber in November 2010
As per TRAI total
160
140
Subscriber Base
70% of Mobile Subscriber base is active
Reported Subscriber – 687.7 Million
Active Subscriber – 482 Million
143.2
127.9
115.5
120
100
72.5
80
60
40
96.4
86.6
46.5
79
67.3
59.1
65
42.9
27.4
Reported
35.6
Active
20
0
Business Line – Dated – 3 December 2010.
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Mobile Number Portability (MNP)
Number portability: TRAI announced the rules and regulations to be followed for the Mobile
Number Portability in their draft release on 23 September 2009. Mobile Number Portability
(MNP) allows users to retain their numbers, while shifting to a different service provider
provided they follow the guidelines set by TRAI. Users are expected to holding the mobile
number with a given provider for at least 90 days, before they decide to move to the other
provider. As per news reports, Government of India decided to implement MNP from
December 31, 2009 in Metros & category ‘A’ service areas and by March 20, 2010 in rest of
the country.
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Number
Operator
Total Sub Figures
% Market Share
1
Airtel
15,89,98,869
20.09%
2
Reliance Comm. Ltd. (CDMA+ GSM)
13,21,76,914
16.70%
3
Vodafone
13,09,20,732
16.54%
4
BSNL (GSM + CDMA)
9,03,09,414
11.41%
Tata Teleservices Ltd. (CDMA
8,76,54,472
5
+GSM)
6
Idea
8,68,00,809
10.97%
7
Aircel
5,35,00,469
6.76%
8
Uninor
2,15,77,497
2.73%
9
MTS
96,12,738
1.21%
10
Videocon
65,64,083
0.83%
11
MTNL
54,54,846
0.69%
12
Loop Telecom Private Ltd.
30,79,281
0.39%
13
S-Tel LTD (GSM)
26,92,462
0.34%
14
HFCL (CDMA)
13,86,618
0.18%
15
Etisalat
6,52,370
0.08%
Total
79,13,81,574
11.08%
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MTNL
1%
Videocon
1%
Uninor
3%
MTS
1%
Loop S-Tel LTD
Telecom (GSM)
Private Ltd. 0%
0%
HFCL (CDMA)
0%
Etisalat
0%
Airtel
20%
Aircel
7%
Idea
11%
Reliance Comm.
Ltd. (CDMA+ GSM)
17%
Tata Teleservices
Ltd. (CDMA +GSM)
11%
BSNL (GSM +
CDMA)
11%
Vodafone
17%
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Chapter – 2
Literature Review
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Date
Source
Survey Method
Sample
-
22 /09/2010
Business Line
Interview
Mr Debases Chatterji, CEO of Netxcell Ltd.
Business Line’s editor Mr D.murli interviewed Mr Debases chatterji on the key challenges
faced by telecom operators.
He was of the opinion that severe competition amongst voice service providers was leading to
a few operators incurring huge losses. This might force consolidation in the industry in the
future. As teledensity was already approaching 100% in urban centres, service providers were
quickly moving to semi-urban and rural areas. In this segment, most customers prefer prepaid services with very low average revenue per unit (less that Rs 200 per month). The
average prepaid topup in rural areas is around 20 rupees per recharge.
Over the past one and a half years, India has been adding 10 to 14 million customers in a
month. Research has shown that 95% of them prefer pre-paid plans and are located in semiurban areas.
He was of the opinion that one area of growth could be subscribers pushing locally relevant
content to cell phones of subscribers. This could range from local weather updates to
discounts at a shopping mall at a particular date and time.
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Date
-
20 /08/2010
Source
-
CNBC
Survey Method
-
Interview
Sample
-
Mr Sanjay Kapoor, CEO of Bharti Airtel
Business Line’s editor Mr Sanjay Pugliya interviewed Mr Sanjay Kapoor, the CEO of Bharti
Airtel on the topic. Finding from this interview is 480 minute/customer
Rural India is a big market
Subscription is approximately same
Dependency of mobile phone because no significant alternative
Profitability is a main concern
Special focus on revenue
http://www.youtube.com/watch?v=2ZCQOT2Lylc&feature=related
Date
-
9-10 December 2010
Source
-
KPMG
Survey Method
-
Survey
Sample
-
Telecom Industry of India
Rural movement - Rural movement not seems as a solution for the revenue generation
because as per following statics, generated revenue cannot cope up with operation cost it is
difficult to achieve breakeven point itself. There is wide variation in population density.
Population density across villages India
Village Density
No. of Villages
Between 1,000 - 2,000
129,000
Between 500 - 1,000
144,000
Between 0 - 500
219,000
Source: IMA India Report, 2006
http://www.trai.gov.in/Default.asp
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Date
-
18 /09/2010
Source
-
CNBC
Survey Method
-
Interview
Sample
-
Mr Sanjay Kapoor, CEO of Bharti Airtel
CNBC interviewed Mr. Sanjay Kapoor, the CEO of Bharti Airtel on the topic “Dialing
Growth”. In that interview Mr. Kapoor told that subscriber growth is not only a parameter,
but the revenue from the activities is an important parameter for Bharti. He not agrees with
actual growth shown in numbers as per him actual growth is half of provided numbers”.
http://www.youtube.com/watch?v=WRvcjfoiM7g
Date
-
07 /03/2011
Source
-
Economic Times
Survey Method
-
Results of subscriber complaints published by TRAI
Sample
-
Population of subscribers who used wireless services
India's largest mobile operator, Bharti Airtel is on top, also when it comes to subscriber
complaints related to billing, metering and tariff-related issues and activation of value-added
services without customer consent. In the last three years, TRAI received as many as 3,571
complaints from Bharti Airtel subscribers, 2,151 from Reliance customers and 1,896 from
Vodafone Essar's clientele. Tata Docomo and Idea Cellular customers seemed to be the least
dissatisfied, with 1,239 and 925 complaints, respectively, lodged against them
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y
Date
-
06 /04/2011
Source
-
TRAI press release
Method
-
Results of subscriber population survey provided by service provider
Sample
-
Population of subscribers who used wireless services
As per “Highlights of Telecom Subscription” Data as on 28th February 2011 by TELECOM
REGULATOR AUTHORITY OF INDIA New Delhi, 6th April 2011, TATA Teleservices is
the 5th largest mobile operator in India having 8,76,54,472 subscriber contributing 11.08%.
http://www.trai.gov.in/Default.asp
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Chapter – 3
Problem Definition and
Objectives of the Project
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Problem Definition and Objectives of Project
In this project “Operational Comparatives Study of Indian Telecom Service”
The Indian cellular subscriber base currently stands at 826.25 million. Due to this large
market, the Indian cellular service providers are amongst the most competitive in the world.
India can boast of the cheapest call rates to be found anywhere in the world.
At present there is very high competition in the telecom sector which has intensified with the
entry of new cellular players in the circles. Private operators hold 87.90% of the wireless
market share where as BSNL and MTNL, two major PSU operators hold only 12.10% market
share. Around 14 operators are functioning in every circle & implementation of Mobile
Number Portability has once again started the game of the “Survivable the fittest”.
Even though The Telecom Regulatory Authority of India & other Independent Consultants
provide guidelines and comparative analysis of the sector,
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Chapter – 4
Research Methodology
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Research Design
I intend to follow an exploratory approach towards meeting our goals. Since the telecom
sector is too vast to be covered within the scope of our project, I decided to opt away from
descriptive research and orient ourselves more towards exploratory research.
The information that I will primarily be dealing with are official TRAI figures, customer and
retailer responses to questionnaires. I will then analyze the available information with MSExcel.
The questionnaire is intended to cater to recipients and subscribers. There will be separate
for both the parties because questions intended for retailers will be more oriented towards
why they sell or refer certain products and hold others back. I intend to investigate cellular
companies provide to retailers and how retailers in turn market products of these cellular
companies.
To customers our questions will be directed at customer satisfaction with the service,
preferences and satisfaction. About what brands they identify with and the reasons for their
choices. The questionnaire will also attempt to gauge the level of attachments customers have
with their service provider.
Ingredients of Questionnaires
Questionnaires will be conducted in person with random people from locations across India
there will be no discrimination based on religion, caste, sex, and age or income level.
The questionnaire will be limited to 20 minutes per person. It will consist of 20 questions that
a respondent will have to answer. The questions asked will range from general to specific.
Example –
Question to customers –
1) Which brand do you prefer the most?
2) What brand are you using right now?
3) Are you satisfied with the service provided?
4) What are the reasons you might be dissatisfied? Service, network, rates.
Note - (Detail Question are given in appendix Page 64-67)
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Sampling size – I intend to interview 100 customers of from various parts of India focusing
primarily on Karnataka. This is so that I can cater to differing values and perceptions of
people from different regions.
Sampling plan – Multi-stage & connivance sampling – In this form of sampling is similar
to cluster sampling but involves selecting a sample within each chosen cluster. Clusters in
this case will be created on the basis of the States of Rajasthan, UP East, UP East, Karnataka,
Delhi and Kolkata Circle.
Note - (Responses can envisage in appendix Page 72)
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Chapter – 5
Findings & Interpretations
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5.1 Comparatives Study of Telecom Service Provider
109 respondents are interviewed for survey, to identify that what factor play a critical role in
the selection of Service Provider, factor are divided into 7 major category
•
Services
•
Cost-effectiveness
•
Network coverage
•
Low Cost is a major factor that attracts me to a service provider
•
Network Coverage of my service provider was a decisive factor that influenced my
purchase
•
Advertisements played a major role in my decision to choose my service provider
•
Value added services are a major factor that attracts me to a service provider
Interpretation
Network Coverage, Service & Cost Effectiveness play a critical role, when the subscriber
goes to choose the service provider.
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Bharti Airtel
InterpretationService
-
Liner
Cost effectiveness
-
Poor
Network Coverage
-
Full fill the customer acceptance
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TATA Teleservices
Interpretation
Service
-
Liner
Cost effectiveness
-
High
Network Coverage
-
Below then customer acceptance
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Reliance Communication
InterpretationService
-
Poor
Cost effectiveness
-
High
Network Coverage
-
Poor as Ill as below then customer acceptance
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Vodafone
InterpretationService
-
Liner
Cost effectiveness
-
Liner
Network Coverage
-
Liner & more than customer acceptance
Note- Vodafone has a perfect combination of all 3 critical parameter which is an ideal
situation
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Idea
InterpretationService
-
Below then average
Cost effectiveness
-
High
Network Coverage
-
Liner & more than customer acceptance
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BSNL & Others
InterpretationService
-
Liner
Cost effectiveness
-
Liner
Network Coverage
-
Liner but matched with customer acceptance
Note - (Detail Results can envisage in appendix Page 68-71)
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What attracts you towards a service provider? [Network Coverage of my service
provider was a decisive factor that influenced my purchase]
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How would you rate your mobile service provider in terms of [Network
coverage]
ANOVA
How would you rate your mobile service provider in terms of [Network coverage]
Sum of Squares
Between Groups
df
Mean Square
21.299
5
4.260
Within Groups
100.580
102
.986
Total
121.880
107
F
4.320
Sig.
.001
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Chapter- 6
Conclusion
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As per survey it comes in observation that Network is a critical parameter which influences
the customer, analysis done for the Pre purchase & Post purchase experience of customer
with service provider.
A population of over a 1.5 billion individuals, India is a fast emerging economy on the world
scenario. One of the most significant growths in this decade has been observed in the cell
phone industry. An industry which initially had many players. Now is the time I could
experience the consolidation in the industry, but still left with quite a number of players.
Consumers have been the ultimate king all the way through, and to know the consumers’
insight is what no organization could miss.
Consumers can be the kings but it is the Network team who committed for the quality
service. So it is essential for any service provider to keep up to the pace of their team and
provide them what they require. In this growing mobile era it is very essential to keep your
team technically upgraded and make the most of what is available.
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Chapter- 7
Bibliography
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Bibliography
•
Richard A. Gershon (2009). Telecommunication & Business Strategy. Published by
Routledge New York 10016. Richard A. Gershon is a Professor & co-founder of the
Telecommunication & Information Management Program at Western Michigan
University.
•
Rafael Aguayo (1990).Dr. Deming "The American who taught the Japanese about
Quality."Published by "Fireside Rockefeller Center New York 10020. R.afale studied
with W.Edwards Deming for seven year, has worked in the financial sector for fifteen
year is a consultant in Quality & Management.
•
Akanksha Singh,Archana & Ritu Singh. "3G: Still Hazy." Voice & Data, May 2011:
42-47.
•
KPMG."Indian
Telecom
2010.9-10
December
2010
New
Delhi
http://www.trai.gov.in/Default.asp
•
Objective Assessment of Quality of Services for (QoS) for Basic (Wire line), Cellular
(Wireless) and Broadband Service Providers Karnataka Circle. October-NovemberDecember - 2009. Telecom Regulatory Authority of India, By: eTech Group@IMRB
A specialist unit of IMRB International.2010 <http://www.trai.gov.in/searchdoc.asp>
•
Highlights of Telecom Subscription” Data as on 28th February 2011 by Telecom
Regulatory
Authority
of
India,
New
Delhi,
6th
April
2011.
http://www.trai.gov.in/searchdoc.asp
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Chapter- 8
Appendix
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Questionnaire
Objective: To gauge public opinion on services provided by various telecom operators
Name
City:
State:
1) - Which mobile service provider are you using at the moment? Please tick the appropriate
box
Service Provider
Tick
Airtel
BSNL
Vodafone
Idea
Tata
Reliance
Others
2) - How long have you been using your service provider? Please tick the appropriate
column.
Duration
Tick
< 6 months
6 to 12 months
12 to 24 months
24 to 48 months
>48 months
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3)- How would you rate your service provider in terms of :
Parameter
Excellent Good
Average
Bad
Poor
Availability
Offers
Services
Cost-effectiveness
Network Coverage
4) - What services do you primarily avail of from your service provider? Please tick the
appropriate box based on the degrees of usage.
Services
High
Moderate Low
Nil
Voice services
Internet services
Mobile TV/Value added services
Messaging services
5) - What attracts you towards a service provider?
Parameter
Strongl
Agre
Neutra Disagre
Strongly
y agree
e
l
disagree
e
Low Cost is a major factor that
attracts me to a service provider.
Value added services are a major
factor that attracts me to a service
provider
Advertisements played a major role
in my decision to choose my service
provider
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Network Coverage of my service
provider was a decisive factor that
influenced my purchase
My service provider has numerous
retail outlets that ensure availability
and serviceability
Good feedback from friends
influenced my decision to choose my
provider
6)-How would you rate the service provider in terms of its
advertisement campaign compared to its competitors?
Service Provider
Excellent Good
Equal
Bad
Poor
Airtel
BSNL
Vodafone
Idea
Tata
Reliance
7) - If Mobile number portability is implemented, I would choose another service
provider?
Yes
No
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7.1) - If yes, then which among these would be your first preference? Please tick the
appropriate box
Service Provider
Tick
Airtel
BSNL
Vodafone
Idea
Tata
Reliance
Others
8) - How would you rate your reasons for not being satisfied with the service provider?
Parameter
Strongly agree Agree Neutral Disagree Strongly disagree
The costs associated with my
service provider are higher
than those of other similar
providers
I am dissatisfied with the
services provided to me by my
service provider
The network coverage of my
service provider in my area is
substandard compared to
competitors
My service provider does not
have enough retail outlets in
my neighborhood
I have received negative
feedback about my service
provider from my
acquaintances
Note – This Questionnaire is initially used to identify the “Declining Market Significance of
Bharti Airtel Ltd.” in 7/12/2010
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Post hoc tests are not performed for What attracts you towards a service provider?
[Advertisements played a major role in my decision to choose my service provider]
because at least one group has fewer than two cases.
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Post hoc tests are not performed for What attracts you towards a service provider?
[Network Coverage of my service provider was a decisive factor that influenced my
purchase] because at least one group has fewer than two cases.
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Post hoc tests are not performed for How would you rate your mobile service provider in
terms of [Network coverage] because at least one group has fewer than two cases.
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Post hoc tests are not performed for What attracts you towards a service provider? [Value
added services are a major factor that attracts me to a service provider] because at least
one group has fewer than two cases.
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“Operational Comparative Study of Indian Telecom Service providers”
SUBMITTED BY
Praveen Sidola
1021026
Master in Business Administration
CHRIST UNIVERSITY INSTITUTE OF MANAGEMENT
Hosur Road, Bangalore 560 029
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Page 1
s/n
1
2
3
4
5
6
7
8
9
Index
Title
Executive Summary
Introduction
Literature Review
Problem Definition and Objectives of the Project
Research Methodology
Findings & Interpretations
Conclusion
Bibliography
Appendix
From
3
4
21
26
28
31
42
44
46
To
3
20
25
27
30
41
43
45
54
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EXECUTIVE SUMMARY
Ranked amongst some of the fastest growing economies of the world, India has registered
steady growth over the last few years, The Indian telecom sector particularly, witnessed
aggressive growth during the last two years, emerging as a global benchmark for other
developed countries as well. All major international operators are exploring opportunities to
make inroads into the Indian telecommunication sector, both for the vast customer base as
well as to leverage on the low cost outsourcing model which India has been successful in
pioneering.
As of February 28, 2011, the country’s subscriber base (wireline + wireless) stood at 826.25
million but active wireless subscribers in VLR (Visitor Location Register) in Feb- 2011 is
562.98 Million, with the overall teledensity reaching 69.29 percent. With increasing maturity
of urban markets, the next round of growth is expected to be generated from the rural areas in
the form of increased uptake of voice and data based value added services, as well as
broadband services.
The penetration of broadband in India has not been as aggressive as the wireless
communication services. As of February 2011, the broadband subscriber base in India is
approximately 11.47 million. The government, recognizing the potential of broadband as a
key enabler in furthering its growth agenda, has taken a strong stance to address the issue of
low penetration and enhance broadband coverage across the country. The recently concluded
3G and BWA auctions are likely to be the catalyst that furthers the government’s agenda of
providing broadband connectivity to the remotest parts of India.
The government as well as other telecom stakeholders believe that these wireless
technologies will help overcome the barriers of expensive wireline infrastructure, especially
in the low revenue generating zones.
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Chapter - 1
Introduction
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1.1 The Global Telecommunication Industry
Telecom services will continue to be one of the key growth sectors having generated
revenues of roughly INR 67 trillion in 2009. Global wireless subscribers reached 4.6 billion1
in 2009 with a CAGR of 22 percent over 2004-20091. This occurred despite some carriers
experiencing marginal declines or fl at trends
In revenues with enterprises and consumers exercising cut backs on telecom spending during
the global economic slowdown. The continuing rise in affl uence levels in emerging markets
and the resultant increase in the standard of living is expected to have an increasing impact on
the revenue per subscriber.
Telecom market revenue by sector
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Falling voice ARPUs in most countries
Wireless ARPU ranges from USD 54 per month in Japan to under USD 5 per month in the
Philippines, Indonesia and India, evidently demonstrating the lower ARPU realization in
emerging countries2. The blended wireless ARPU is roughly USD 18 globally, declining at
10 percent per year (on a local currency basis).
Global wireless ARPU comparison (2009)
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Asia to continue to lead growth in wireless services
The Asia Pacific region driven by growth in India and China will continue to be the key
growth market for global telecom over the next few years. Developed markets such as Japan
and Korea, are witnessing the benefits of significant technology investments and innovation.
Meanwhile, India and China, which constitute 28 percent10 of the global wireless subscriber
base today, are witnessing the benefits of significant growth in income levels due to sustained
economic growth. Penetration figures in both countries continue to remain significantly lower
than developed economy levels, auguring Ill for continued growth and development of the
telecom market in the region.
Mobile subscribers (share of the world)
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1.2 The Indian Telecommunication Industry
The Indian telecommunications market has continued to show consistent growth during the
last one year, with exciting developments such as rollout of newer circles by operators,
successful auction of 3G and BWA spectrum, growing push by telecom operators to rollout
network in semi-rural areas and increased focus on the value added services market. Telecom
continues to be one of the fastest growing sectors of the Indian economy, becoming a strong
contributor to India’s overall GDP and is expected to grow further.
Overall teledensity in India has risen to the levels of ~59.6 percent (as of August’10)
to 69.29 percent (as of February 2011) comprises 551.27 million urban subscribers
(teledensity of ~154.01 percent) and 274.98 million rural subscribers (teledensity of ~32.95
percent) With a large part of the population yet to obtain access to the telecommunication
market, there is immense potential for the sector to grow, especially in non-urban areas,
where wireline and internet services are yet to make significant in-roads. Wireline services
have shown relatively negative growth -.5.66 percent (Feb 2010 to Feb 2011). Even the
mobile services space which has seen exponential growth in urban areas, has not yet reached
the vast majority in rural areas with rural teledensity of approximately 40.31 percent (Feb
2010 to Feb 2011), indicating huge untapped potential for the sector. Broadband is yet to
reach a critical mass despite rapid growth; the numbers have risen from 6.98 million in
August 2009 to 10.08 million by August 2010, registering a growth of 55 percent on an
annual basis. With subscriber penetration under 2 percent, the sector has potential for
aggressive growth in the future.
Indian Telecom Industry classified in
•
Total Circle
-
22
•
Operator
-
20 (16+4)
•
Service Area -
338
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Mobile services
The Indian mobility market can be characterized as one with a very large subscriber base4
(~671 million as of August 2010), high growth5 (addition of 16-18 million subscribers every
month in last six months), low ARPUs (~INR 122 per month in June, 2010) and significant
churn rates. In the prepaid segment, ARPU declined by 6.2 percent from INR 113 in March,
2010 to INR 106 in June, 2010. The Government of India opened up mobile services to
private participation in 1994-95 by inviting bids for providing services in the four
metropolitan cities and 18 non-metro circles. Services Ire introduced in 1995 with the high
tariffs resulting in poor demand. The National Telecom Policy 1999 moved the industry to a
revenue share model from the fixed license fee and the lower tariffs resulted in the addition of
~ 12 million subscribers during the 1999-03 period as compared
To less than a million subscribers added during the 1995-99 period. During this period the
government also set-up the Telecom Regulatory Authority of India (TRAI) in 1997 and
‘Telecom Dispute Settlement and Appellate Tribunal (TDSAT)’ in 2000.
Growth of wireless subscriber base (year end numbers)
Source: TRAI Annual Report and Quarterly Reports on Telecom Services Performance Indicators
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The Calling Party Pays regime was introduced in 2003- 04 which allowed free incoming calls
for the subscribers. This revolutionary change can be designated as one of the watershed
milestones in the growth of the Indian telecom sector. The 22 telecom circles in India have
been classified into 4 categories viz. Metros, Category A, B and C. With penetration rates in
metros touching more then 100 percent, the market in Metros is nearly saturated. However,
there is still immense potential in other circle categories, particularly B and C
Mobile subscriber base and mobile teledensity across telecom circles
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Source: ‘Monthly Telecom Scenario – August 2010’, DoT, October 2010
The current subscriber base of 707 million (August 2010) comprises 476 million urban
subscribers (teledensity of ~134 percent) and 230 million rural subscribers (teledensity of ~28
percent) & 791 million (February 2011) comprises 525.17 million urban subscribers
(teledensity of ~146.72 percent) and 266.21 million rural subscribers (teledensity of ~31.90
percent) million overall teledensity is 66.36percent. The market is highly competitive with
some of the telecom circles having more than 14 operators. Competitive intensity in the
market has contributed to reduction in tariffs and launch of innovative schemes like lifetime
prepaid and low cost handset bundling which further reduced the entry.
Wireline services
While wireless has seen consistent growth over the years, wireline over the last few years has
actually seen a decline in the subscriber base. The total number6 of fixed line connections in
India increased from 5.81 million in 1991-92 to 40.8 million in 2006-07. During 1999-2000
to 2001-02, approximately 5-6 million customers Ire added to fixed-line services each year.
However, with the drop in mobile tariffs and increase in coverage of mobile services, net
additions in fixed-line subscribers started slowing down from 2.5 million in 2002-03 going
down to 0.5 million in 2004-05. Due to mobile substitution and lower tariffs, the fixed line
subscriber base actually decreased by 3.5 million between 2006-07 and 2008-09. This decline
was aggravated by slow rollout of fixed line services by Telco’s due to the significantly
higher total cost of service provision for fixed line services compared to mobile wireless
services, in February 2011 only 34 Million wireline subscribers are reported.
It also comes in observation that rural subscriber are more interested in wireless in
compression of wireline... However, the potential for wireline services remains large due to
very low penetration in the wireline industry and the ability of wireline to deliver broadband
at lower operating costs than wireless broadband. New players in the telecom space had
hitherto concentrated on wireless space leading to low competition and promotion of wireline
services. Greater pan-India expansion by private players can significantly lead to growth of
wireline services. In addition, with combined offering of internet/ broadband and allied
services like IPTV, the sector can bounce back in the future. But, the aggressiveness of
mobile operators in rural areas due to easier and cheaper rollout and newer offerings on BWA
spectrum can further slow down the wireline penetration.
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Wireline subscriber base
Source: TRAI Annual Report and Quarterly Reports on Telecom Services Performance Indicator
Broadband and internet services
Internet subscriber base in India, though currently at a low level, has been experiencing
significant growth over the last 2-3 years. This growth is being driven by the growing
popularity of broadband, increasing user comfort with usage of internet applications,
continuous fall in PC prices and decreasing costs of internet/broadband access plans. This
growth has been accompanied by an associated increase in the number of internet users which
have attributed to the growth of public internet cafes and multiple members of a household
accessing internet. Access technologies play a crucial role in broadband penetration. Right of
Way (Row) issues and costs of the existing broadband technologies has been a constraint for
the growth of internet. While there a number of technologies being used by service providers
to provide broadband services, DSL continues to be the most preferred technology and
constitutes nearly 86.6 percent of total broadband subscribers7. Cable modem technology
follows with 6.9 percent connection. On an overall basis for accessing internet, DSL leads
with 51 percent while dialup stands second at 33.3 percent7. Wireless technologies have
carved a unique niche in terms of connectivity to internet with a share of nearly 7.6 percent
which is a significant shift in the last two years. Newer access technologies like BWA and 3G
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can completely transform the character of Internet/ broadband scenario in India. BWA will
overcome the key hindrance of Row in India, while 3G has the potential to make the mobile
phone, a ubiquitous device for accessing the internet.
Internet subscriber base
Source: TRAI Annual Report and Quarterly Reports on Telecom Services Performance Indicators
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New frontiers for growth
3G and BWA
The last 5 years have been transformational for Indian telecom industry and the next few
years are expected to bring about more stimulating and aggressive changes. One of the key
frontiers which would make the journey in coming years even more exciting is the launch of
3G and BWA technologies. The auction of 3G spectrum was concluded on May 19, 2010.
While commercial usage is started from September 2010 onwards, the auction laid the
groundwork for faster internet connectivity and data transfer on mobile phones, boosting
usage of data services in the cellular market. This was closely followed by auctioning of
BWA spectrum which also exceeded revenue expectations of the government. The highly
successful auctioning of 3G and BWA spectrums and entry of new telecom players in BWA
auction has ensured that telecom market will see more exciting times going forward. Total
revenues which the government earned from these two auctions stood at approximately, INR
1,063 billion the market is likely to witness a wide variety of value added services being
offered, which Ire not possible over the current 2G/2.5G network. The ARPU is expected to
get a boost given the increased revenue contribution from data and value added services.
Potential challenges that 3G players could face would span across the value chain covering
innovative Product development, Network deployment and management, Sales and
Marketing etc. In the first wave, operators would be able to provide rich data services to
HNI’s, working professionals, enterprise customers and youth. They would be specifically
targeting current users of 2.5G and/or owners of 3G enabled handsets. At the same time
operators would be actively looking at providing 3G services to other income groups, as this
will help spread the investment in technology/license over a wider subscriber base. The
Ministry of Communications had specified that BWA spectrum allocation would be
technology neutral. High speed broadband on BWA spectrum also has the potential to
provide connectivity for the growing small and medium enterprises (‘SME’) segment; and be
utilized for the return path bundled with the DTH platform.
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NEXT GENERATION NETWORKS
In the Next Generation Networks, multiple access networks can connect customers to a core
network based on IP technology. These access networks include fibber optics or coaxial cable
networks connected to fixed locations or customers connected through Wi-Fi as Ill as to 3G
networks connected to mobile users. As a result, in the future, it would be impossible to
identify whether the next generation network is a fixed or mobile network and the wireless
access broadband would be used both for fixed and mobile services. It would then be futile to
differentiate between fixed and mobile networks – both fixed and mobile users will access
services through a single core network.
Indian telecom networks are not as intensive as developed country’s telecom networks and
India's teledensity is low only in rural areas. 670,000 route kilometres (419,000 miles) of
optical fibbers has been laid in India by the major operators, even in remote areas and the
process continues. BSNL alone has laid optical fibber to 30,000 Telephone Exchanges out of
their 36 Exchanges. Keeping in mind the viability of providing services in rural areas, an
attractive solution appears to be one which offers multiple service facility at low costs. A
rural network based on the extensive optical fibber network, using Internet Protocol and
offering a variety of services and the availability of open platforms for service development,
viz. the Next Generation Network, appears to be an attractive proposition. Fiber network can
be easily converted to Next Generation network and then used for delivering multiple
services at cheap cost...
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1.3 Regulatory and Policy environment In India
Regulatory and policy environment
Over the years, the Indian Telecommunication Policy and Regulatory framework has evolved
into an Ill developed framework that facilitates effective policy formation and execution. The
government has been making constant efforts to ensure that the regulatory framework is
beneficial for the consumers as Ill as the licensed operators. The policy and regulatory
framework for telecommunications in India consists of, among others, the following key
bodies
•
The Department of Telecommunication (DoT)
•
The Telecom Regulatory Authority of India (TRAI)
•
The Telecom Disputes Settlement and Appellate Tribunal (TDSAT)
•
Wireless Planning Commission (WPC)
•
Group on Telecom and IT (GoT – IT)
TRAI
Telecom Regulatory Authority of India was established as an independent body under the
TRAI Act of 1997. The act was later amended in 2000. The entry of private players into the
industry prompted the establishment of the act to effectively regulate the telecom players.
TRAI safeguards the interests of the consumers through transparency, ensuring conformity
with service quality benchmarks, enforcing measures to safeguard national security, fixing
tariffs for players, counselling the government on matters relating to telecommunication
development and tracking performance a d efforts of all players within the industry.
DoT
DoT is accountable for policy formulation, monitoring performance reviews, ensuring
international co-operation, overlooking research and development and granting licenses to
operators, allowing them to provide basic and value added services in various cities and
telecom circles as per the approved government policies. The Department also allocates
spectrum and manages radio communications in close coordination with the International
bodies. It is also responsible for enforcing wireless regulatory measures and monitoring the
wireless transmission of all users in the country
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Regulatory evolution
Source: Press Search, KPMG Analysis
otal active Mobile Subscriber in November 2010
As per TRAI total
160
140
Subscriber Base
70% of Mobile Subscriber base is active
Reported Subscriber – 687.7 Million
Active Subscriber – 482 Million
143.2
127.9
115.5
120
100
72.5
80
60
40
96.4
86.6
46.5
79
67.3
59.1
65
42.9
27.4
Reported
35.6
Active
20
0
Business Line – Dated – 3 December 2010.
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Mobile Number Portability (MNP)
Number portability: TRAI announced the rules and regulations to be followed for the Mobile
Number Portability in their draft release on 23 September 2009. Mobile Number Portability
(MNP) allows users to retain their numbers, while shifting to a different service provider
provided they follow the guidelines set by TRAI. Users are expected to holding the mobile
number with a given provider for at least 90 days, before they decide to move to the other
provider. As per news reports, Government of India decided to implement MNP from
December 31, 2009 in Metros & category ‘A’ service areas and by March 20, 2010 in rest of
the country.
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Number
Operator
Total Sub Figures
% Market Share
1
Airtel
15,89,98,869
20.09%
2
Reliance Comm. Ltd. (CDMA+ GSM)
13,21,76,914
16.70%
3
Vodafone
13,09,20,732
16.54%
4
BSNL (GSM + CDMA)
9,03,09,414
11.41%
Tata Teleservices Ltd. (CDMA
8,76,54,472
5
+GSM)
6
Idea
8,68,00,809
10.97%
7
Aircel
5,35,00,469
6.76%
8
Uninor
2,15,77,497
2.73%
9
MTS
96,12,738
1.21%
10
Videocon
65,64,083
0.83%
11
MTNL
54,54,846
0.69%
12
Loop Telecom Private Ltd.
30,79,281
0.39%
13
S-Tel LTD (GSM)
26,92,462
0.34%
14
HFCL (CDMA)
13,86,618
0.18%
15
Etisalat
6,52,370
0.08%
Total
79,13,81,574
11.08%
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MTNL
1%
Videocon
1%
Uninor
3%
MTS
1%
Loop S-Tel LTD
Telecom (GSM)
Private Ltd. 0%
0%
HFCL (CDMA)
0%
Etisalat
0%
Airtel
20%
Aircel
7%
Idea
11%
Reliance Comm.
Ltd. (CDMA+ GSM)
17%
Tata Teleservices
Ltd. (CDMA +GSM)
11%
BSNL (GSM +
CDMA)
11%
Vodafone
17%
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Chapter – 2
Literature Review
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Page 21
Date
Source
Survey Method
Sample
-
22 /09/2010
Business Line
Interview
Mr Debases Chatterji, CEO of Netxcell Ltd.
Business Line’s editor Mr D.murli interviewed Mr Debases chatterji on the key challenges
faced by telecom operators.
He was of the opinion that severe competition amongst voice service providers was leading to
a few operators incurring huge losses. This might force consolidation in the industry in the
future. As teledensity was already approaching 100% in urban centres, service providers were
quickly moving to semi-urban and rural areas. In this segment, most customers prefer prepaid services with very low average revenue per unit (less that Rs 200 per month). The
average prepaid topup in rural areas is around 20 rupees per recharge.
Over the past one and a half years, India has been adding 10 to 14 million customers in a
month. Research has shown that 95% of them prefer pre-paid plans and are located in semiurban areas.
He was of the opinion that one area of growth could be subscribers pushing locally relevant
content to cell phones of subscribers. This could range from local weather updates to
discounts at a shopping mall at a particular date and time.
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Date
-
20 /08/2010
Source
-
CNBC
Survey Method
-
Interview
Sample
-
Mr Sanjay Kapoor, CEO of Bharti Airtel
Business Line’s editor Mr Sanjay Pugliya interviewed Mr Sanjay Kapoor, the CEO of Bharti
Airtel on the topic. Finding from this interview is 480 minute/customer
Rural India is a big market
Subscription is approximately same
Dependency of mobile phone because no significant alternative
Profitability is a main concern
Special focus on revenue
http://www.youtube.com/watch?v=2ZCQOT2Lylc&feature=related
Date
-
9-10 December 2010
Source
-
KPMG
Survey Method
-
Survey
Sample
-
Telecom Industry of India
Rural movement - Rural movement not seems as a solution for the revenue generation
because as per following statics, generated revenue cannot cope up with operation cost it is
difficult to achieve breakeven point itself. There is wide variation in population density.
Population density across villages India
Village Density
No. of Villages
Between 1,000 - 2,000
129,000
Between 500 - 1,000
144,000
Between 0 - 500
219,000
Source: IMA India Report, 2006
http://www.trai.gov.in/Default.asp
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Date
-
18 /09/2010
Source
-
CNBC
Survey Method
-
Interview
Sample
-
Mr Sanjay Kapoor, CEO of Bharti Airtel
CNBC interviewed Mr. Sanjay Kapoor, the CEO of Bharti Airtel on the topic “Dialing
Growth”. In that interview Mr. Kapoor told that subscriber growth is not only a parameter,
but the revenue from the activities is an important parameter for Bharti. He not agrees with
actual growth shown in numbers as per him actual growth is half of provided numbers”.
http://www.youtube.com/watch?v=WRvcjfoiM7g
Date
-
07 /03/2011
Source
-
Economic Times
Survey Method
-
Results of subscriber complaints published by TRAI
Sample
-
Population of subscribers who used wireless services
India's largest mobile operator, Bharti Airtel is on top, also when it comes to subscriber
complaints related to billing, metering and tariff-related issues and activation of value-added
services without customer consent. In the last three years, TRAI received as many as 3,571
complaints from Bharti Airtel subscribers, 2,151 from Reliance customers and 1,896 from
Vodafone Essar's clientele. Tata Docomo and Idea Cellular customers seemed to be the least
dissatisfied, with 1,239 and 925 complaints, respectively, lodged against them
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y
Date
-
06 /04/2011
Source
-
TRAI press release
Method
-
Results of subscriber population survey provided by service provider
Sample
-
Population of subscribers who used wireless services
As per “Highlights of Telecom Subscription” Data as on 28th February 2011 by TELECOM
REGULATOR AUTHORITY OF INDIA New Delhi, 6th April 2011, TATA Teleservices is
the 5th largest mobile operator in India having 8,76,54,472 subscriber contributing 11.08%.
http://www.trai.gov.in/Default.asp
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Chapter – 3
Problem Definition and
Objectives of the Project
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Problem Definition and Objectives of Project
In this project “Operational Comparatives Study of Indian Telecom Service”
The Indian cellular subscriber base currently stands at 826.25 million. Due to this large
market, the Indian cellular service providers are amongst the most competitive in the world.
India can boast of the cheapest call rates to be found anywhere in the world.
At present there is very high competition in the telecom sector which has intensified with the
entry of new cellular players in the circles. Private operators hold 87.90% of the wireless
market share where as BSNL and MTNL, two major PSU operators hold only 12.10% market
share. Around 14 operators are functioning in every circle & implementation of Mobile
Number Portability has once again started the game of the “Survivable the fittest”.
Even though The Telecom Regulatory Authority of India & other Independent Consultants
provide guidelines and comparative analysis of the sector,
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Chapter – 4
Research Methodology
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Research Design
I intend to follow an exploratory approach towards meeting our goals. Since the telecom
sector is too vast to be covered within the scope of our project, I decided to opt away from
descriptive research and orient ourselves more towards exploratory research.
The information that I will primarily be dealing with are official TRAI figures, customer and
retailer responses to questionnaires. I will then analyze the available information with MSExcel.
The questionnaire is intended to cater to recipients and subscribers. There will be separate
for both the parties because questions intended for retailers will be more oriented towards
why they sell or refer certain products and hold others back. I intend to investigate cellular
companies provide to retailers and how retailers in turn market products of these cellular
companies.
To customers our questions will be directed at customer satisfaction with the service,
preferences and satisfaction. About what brands they identify with and the reasons for their
choices. The questionnaire will also attempt to gauge the level of attachments customers have
with their service provider.
Ingredients of Questionnaires
Questionnaires will be conducted in person with random people from locations across India
there will be no discrimination based on religion, caste, sex, and age or income level.
The questionnaire will be limited to 20 minutes per person. It will consist of 20 questions that
a respondent will have to answer. The questions asked will range from general to specific.
Example –
Question to customers –
1) Which brand do you prefer the most?
2) What brand are you using right now?
3) Are you satisfied with the service provided?
4) What are the reasons you might be dissatisfied? Service, network, rates.
Note - (Detail Question are given in appendix Page 64-67)
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Sampling size – I intend to interview 100 customers of from various parts of India focusing
primarily on Karnataka. This is so that I can cater to differing values and perceptions of
people from different regions.
Sampling plan – Multi-stage & connivance sampling – In this form of sampling is similar
to cluster sampling but involves selecting a sample within each chosen cluster. Clusters in
this case will be created on the basis of the States of Rajasthan, UP East, UP East, Karnataka,
Delhi and Kolkata Circle.
Note - (Responses can envisage in appendix Page 72)
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Chapter – 5
Findings & Interpretations
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5.1 Comparatives Study of Telecom Service Provider
109 respondents are interviewed for survey, to identify that what factor play a critical role in
the selection of Service Provider, factor are divided into 7 major category
•
Services
•
Cost-effectiveness
•
Network coverage
•
Low Cost is a major factor that attracts me to a service provider
•
Network Coverage of my service provider was a decisive factor that influenced my
purchase
•
Advertisements played a major role in my decision to choose my service provider
•
Value added services are a major factor that attracts me to a service provider
Interpretation
Network Coverage, Service & Cost Effectiveness play a critical role, when the subscriber
goes to choose the service provider.
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Bharti Airtel
InterpretationService
-
Liner
Cost effectiveness
-
Poor
Network Coverage
-
Full fill the customer acceptance
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TATA Teleservices
Interpretation
Service
-
Liner
Cost effectiveness
-
High
Network Coverage
-
Below then customer acceptance
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Reliance Communication
InterpretationService
-
Poor
Cost effectiveness
-
High
Network Coverage
-
Poor as Ill as below then customer acceptance
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Vodafone
InterpretationService
-
Liner
Cost effectiveness
-
Liner
Network Coverage
-
Liner & more than customer acceptance
Note- Vodafone has a perfect combination of all 3 critical parameter which is an ideal
situation
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Idea
InterpretationService
-
Below then average
Cost effectiveness
-
High
Network Coverage
-
Liner & more than customer acceptance
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BSNL & Others
InterpretationService
-
Liner
Cost effectiveness
-
Liner
Network Coverage
-
Liner but matched with customer acceptance
Note - (Detail Results can envisage in appendix Page 68-71)
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What attracts you towards a service provider? [Network Coverage of my service
provider was a decisive factor that influenced my purchase]
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How would you rate your mobile service provider in terms of [Network
coverage]
ANOVA
How would you rate your mobile service provider in terms of [Network coverage]
Sum of Squares
Between Groups
df
Mean Square
21.299
5
4.260
Within Groups
100.580
102
.986
Total
121.880
107
F
4.320
Sig.
.001
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Chapter- 6
Conclusion
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As per survey it comes in observation that Network is a critical parameter which influences
the customer, analysis done for the Pre purchase & Post purchase experience of customer
with service provider.
A population of over a 1.5 billion individuals, India is a fast emerging economy on the world
scenario. One of the most significant growths in this decade has been observed in the cell
phone industry. An industry which initially had many players. Now is the time I could
experience the consolidation in the industry, but still left with quite a number of players.
Consumers have been the ultimate king all the way through, and to know the consumers’
insight is what no organization could miss.
Consumers can be the kings but it is the Network team who committed for the quality
service. So it is essential for any service provider to keep up to the pace of their team and
provide them what they require. In this growing mobile era it is very essential to keep your
team technically upgraded and make the most of what is available.
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Chapter- 7
Bibliography
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Bibliography
•
Richard A. Gershon (2009). Telecommunication & Business Strategy. Published by
Routledge New York 10016. Richard A. Gershon is a Professor & co-founder of the
Telecommunication & Information Management Program at Western Michigan
University.
•
Rafael Aguayo (1990).Dr. Deming "The American who taught the Japanese about
Quality."Published by "Fireside Rockefeller Center New York 10020. R.afale studied
with W.Edwards Deming for seven year, has worked in the financial sector for fifteen
year is a consultant in Quality & Management.
•
Akanksha Singh,Archana & Ritu Singh. "3G: Still Hazy." Voice & Data, May 2011:
42-47.
•
KPMG."Indian
Telecom
2010.9-10
December
2010
New
Delhi
http://www.trai.gov.in/Default.asp
•
Objective Assessment of Quality of Services for (QoS) for Basic (Wire line), Cellular
(Wireless) and Broadband Service Providers Karnataka Circle. October-NovemberDecember - 2009. Telecom Regulatory Authority of India, By: eTech Group@IMRB
A specialist unit of IMRB International.2010 <http://www.trai.gov.in/searchdoc.asp>
•
Highlights of Telecom Subscription” Data as on 28th February 2011 by Telecom
Regulatory
Authority
of
India,
New
Delhi,
6th
April
2011.
http://www.trai.gov.in/searchdoc.asp
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Chapter- 8
Appendix
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Questionnaire
Objective: To gauge public opinion on services provided by various telecom operators
Name
City:
State:
1) - Which mobile service provider are you using at the moment? Please tick the appropriate
box
Service Provider
Tick
Airtel
BSNL
Vodafone
Idea
Tata
Reliance
Others
2) - How long have you been using your service provider? Please tick the appropriate
column.
Duration
Tick
< 6 months
6 to 12 months
12 to 24 months
24 to 48 months
>48 months
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3)- How would you rate your service provider in terms of :
Parameter
Excellent Good
Average
Bad
Poor
Availability
Offers
Services
Cost-effectiveness
Network Coverage
4) - What services do you primarily avail of from your service provider? Please tick the
appropriate box based on the degrees of usage.
Services
High
Moderate Low
Nil
Voice services
Internet services
Mobile TV/Value added services
Messaging services
5) - What attracts you towards a service provider?
Parameter
Strongl
Agre
Neutra Disagre
Strongly
y agree
e
l
disagree
e
Low Cost is a major factor that
attracts me to a service provider.
Value added services are a major
factor that attracts me to a service
provider
Advertisements played a major role
in my decision to choose my service
provider
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Network Coverage of my service
provider was a decisive factor that
influenced my purchase
My service provider has numerous
retail outlets that ensure availability
and serviceability
Good feedback from friends
influenced my decision to choose my
provider
6)-How would you rate the service provider in terms of its
advertisement campaign compared to its competitors?
Service Provider
Excellent Good
Equal
Bad
Poor
Airtel
BSNL
Vodafone
Idea
Tata
Reliance
7) - If Mobile number portability is implemented, I would choose another service
provider?
Yes
No
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7.1) - If yes, then which among these would be your first preference? Please tick the
appropriate box
Service Provider
Tick
Airtel
BSNL
Vodafone
Idea
Tata
Reliance
Others
8) - How would you rate your reasons for not being satisfied with the service provider?
Parameter
Strongly agree Agree Neutral Disagree Strongly disagree
The costs associated with my
service provider are higher
than those of other similar
providers
I am dissatisfied with the
services provided to me by my
service provider
The network coverage of my
service provider in my area is
substandard compared to
competitors
My service provider does not
have enough retail outlets in
my neighborhood
I have received negative
feedback about my service
provider from my
acquaintances
Note – This Questionnaire is initially used to identify the “Declining Market Significance of
Bharti Airtel Ltd.” in 7/12/2010
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Post hoc tests are not performed for What attracts you towards a service provider?
[Advertisements played a major role in my decision to choose my service provider]
because at least one group has fewer than two cases.
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Post hoc tests are not performed for What attracts you towards a service provider?
[Network Coverage of my service provider was a decisive factor that influenced my
purchase] because at least one group has fewer than two cases.
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Post hoc tests are not performed for How would you rate your mobile service provider in
terms of [Network coverage] because at least one group has fewer than two cases.
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Post hoc tests are not performed for What attracts you towards a service provider? [Value
added services are a major factor that attracts me to a service provider] because at least
one group has fewer than two cases.
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