Project Report

Project Report

TATA-DOCOMO

Prepared by: 1. 2. 3. 4. 5. 6. 7. Ajay Karanwal (eMEP-09-001) Krishnamurthy K Kallapur (eMEP-09-015) Mukesh Jain (eMEP-09-021) Parag Vaidya (eMEP-09-023) Santosh Kinikar (eMEP-09-028) Satyajeet Shah (eMEP-09-029) Vinay Lomate (eMEP-09-042)

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Table of Contents
Introduction ................................................................................................................................. 5 Situation Anal ysis ..................................................................................................................... 6 CUSTOMERS/CONTEXT ............................................................................................................... 6 COMPETITORS ............................................................................................................................. 7 COMPANY .................................................................................................................................... 8 COLLABORATORS ..................................................................................................................... 10 Objectives .................................................................................................................................. 11 Strategy....................................................................................................................................... 11 SEGMENTATION ........................................................................................................................ 11 TARGETING ............................................................................................................................... 13 POSITIONING ............................................................................................................................. 14 Marketing Mix .......................................................................................................................... 15 PRODUCT ................................................................................................................................... 15 PLACE ........................................................................................................................................ 16 PROMOTION .............................................................................................................................. 16 PRICE ......................................................................................................................................... 17 Implementation ......................................................................................................................... 18 BUDGET ..................................................................................................................................... 18 ACTIVITY SCHEDULE ................................................................................................................ 19 R E FE R ENC ES ............................................................................................................................... 20

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Abbreviations
CDMA GSM CAGR Mn VAS USO ARPU Cr IVR Code Division Multiple Access Global System for Mobile Communication Compounded Annual Growth Rate Million Value Added Services Universal Service Obligation Average Revenue Per User Crore Interactive Voice Response

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Introduction
TATA DOCOMO, is TATA Teleservices Limited's (TTSL) telecom service on the GSM platform-arising out of the TATA Group's strategic alliance with Japanese telecom major NTT DOCOMO in November 2008. TATA Teleservices has received a pan-India license to operate GSM telecom services, under the brand TATA DOCOMO and has also been allotted spectrum in 18 telecom Circles. India the second largest mobile market in the world, and is also among the fastest growing mobile markets globally. Though this presents very high growth potential and opportunities, TATA-DOCOMO by virtue of being a late entrant in this market also faces significant challenges to penetrate and establish a stable share in the Indian telecom market. This is an overall marketing plan of TATA-DOCOMO for Oct 2009 -10.

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Situation Analysis
CUSTOMERS/CONTEXT
If we look at Indian share globally in this segment, India, a relatively late entrant into mobile services, has benefited from a significant decline in mobile network costs during the last three to four years. As compared with a capital cost of US$50-90/subscriber to provide mobile service, it costs as much as US$200-350/subscriber to provide fixed-line services. This and the added benefit of mobility have led to stagnation in the total fixed line subscriber base, which along with the significant growth in the mobile base has translated into India having one of the highest ratios globally of mobile subscribers to total telecom subscribers.
Exhibit 1: Mobile subscribers percentage

India the second largest mobile market in the world is also among the fastest growing mobile markets globally. The total number of mobile subscribers in India has increased from 6.4 Mn in March 2002 to around 350 Mn in December 2008 at a CAGR of 81% aided by a significant increase in network coverage and a continual decline in tariffs and handset prices.

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Exhibit 2: Growth in Indian Mobile Subscriber base

Considering the above factors supported by Exhibit 1 and 2, DOCOMO a global leader in the VAS (Value-Added Services) space wanted to grow more into Indian Geography.

COMPETITORS
Telecom Industry in India is dominated by major players like Bharti-Airtel, BSNL, Reliance, Vodafone, and IDEA with share market strength as per Exhibit 3, 4 and 5 given below. Competition is very intense due to low points of differentiation.
Exhibit 1: Competition portfolio Tata Teleservices (Maharashtra) Ltd., 9.10% Aircel + Dishnet, 4.60% Idea Cellular + Spice, 11.10% MTNL, 1.20% BPL Mumbai , 0.60% BSNL, 13.10% Vodafone Essar Ltd., 17.50% Shyam Telecom , 0.10% Bharti Airtel Ltd, 24.40%

HFCL , 0.10% Reliance Communications Ltd., 18.30%

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Exhibit 2: Competition region wise

Exhibit 3: Wireless subscriber Indian market share India Wireless Connections (September 2009) Sep-09 Aug-09 Bharti Airtel 110511416 107996533 RCOM 86117663 84112632 Vodafone 82846046 80874460 BSVL 58756598 57304404 Idea Cellular 51454402 50058471 TATA Teleservices 46796033 42789210 Aircel 25728633 24415514 MTNL 4680141 4662833 Loop Telecom 2495087 2417446 Sistema Shyam 1960532 1732125 HFCL 379654 380288 All Operators 471726205 456743916

Additions 2514883 2005031 1971586 1452194 1395931 4006823 1313119 17308 77641 228407 -634 14982289

Market Share 23.43% 18.26% 17.56% 12.46% 10.91% 9.92% 5.45% 0.99% 0.53% 0.42% 0.08% 100.00%

COMPANY
TATA DOCOMO, is TATA Teleservices Limited's (TTSL) telecom service on the GSM platform-arising out of the TATA Group's strategic alliance with Japanese telecom major NTT DOCOMO in November 2008. TATA Teleservices has received a pan-India license to operate GSM telecom services, under the brand TATA DOCOMO and has also been allotted spectrum in 18 telecom Circles. TTSL has already rolled out its services in various circles. It offers both prepaid and postpaid GSM cellular phone with presence in 11 circles including Madhya Pradesh & Chhattisgarh, Orissa, Maharashtra & Goa, Karnataka, Kerala, Tamil Nadu and West Bengal. It has become very popular with its one second pulse especially in semi-urban and rural areas. They are launching their service from the south of India to central, east and north.

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Project Report The launch of the TATA DOCOMO brand marks a significant milestone in the Indian telecom landscape, as it stands to redefine the very face of telecoms in India. SWOT Analysis: Strengths Weakness Early Mover - Pioneer in India on one second Signal Strength billing concept. Innovative pricing models for almost Customer Service everything be it voice calls, VAS services, and IVR interactions. Global leader in value added services. Low Price Low Quality trap (due to excessive focus on only price based USP : Value Added Services like selling) - Timed SMS - Diet SMS - Comix-on-the-go - Interactive GPRS application, - TATA i-Channel Strong Alliance: Trusted TATA brand combined with proven technological edge of NTT DOCOMO. Plans affordable by common people Active in social media sites like Twitter, Facebook, StumbleUpon, Technorati etc, one of their strategies for marketing their products and creating an online presence Opportunities Threats Scope to expand the coverage across the Cut-throat competition from other growing Indian market : major service providers VAS services market to grow to 450 billion rupees by 2010 Introduce new plans targeted to internet users No strong POD other than price Introduce 3G compliant services since Late entrant in Indian market DOCOMO has the expertise in 3G Introduce new combined plans like SMS, TRAIs plan to introduce Mobile Internet, calling integrated offers Number portability in early 2010 Association with Microsoft to launch the new generation Windows Mobile 6.5 smart phones TRAIs plan to introduce Mobile Number portability in early 2010 VAS for rural segment like integration with echoupal, mandi prices, weather information, fish shoal movement etc.

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COLLABORATORS
TATA Teleservices is the pioneer of CDMA 1X technology platform in India with market share of around 8.2% by 2008. TATA DOCOMO arises out of the TATA Groups strategic alliance with Japanese telecom major NTT DOCOMO in November 2008. TATA DOCOMO has received a pan-India license to operate GSM telecom servicesand has also been allotted spectrum in 18 telecom Circles.

TATA DOCOMO has leveraged TATAs brand image in India to form alliances with leading players in the respective segments: Samsung has exclusively partnered with TATA DOCOMO to launch Galaxy i7500 in India. The new stylish Blackberry Curve 8250 smart phone is being launched in collaboration with TATA DOCOMO offerings, is now on its way to appeal to a broad spectrum of retail and business customers who want an exceptional mobile experience with the ease of mobile access to every facility Leverage TATA Indicoms presence across India for distribution channel partnership. Association with Microsoft to launch the new generation Windows Mobile 6.5 smart phones

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Objectives
Increase TATA DOCOMOs GSM consumer base to 45 million by October 2010.

Strategy
SEGMENTATION
Demographic Segmentation (Age) The Wireless Industry crossed 452.91 million-subscribers mark as by end of May 2009. This total subscribers base of 452.91 million comprise of 298.15 million GSM and 105.51 million CDMA subscribers. During the financial year 2008-09 around 130.67million subscribers were added with a growth rate of 50.00% as compared to 58.12% growth during the year 2007-08.

Age Group Total GSM Base Percentage Users

Source: TRAI

Upto 30 (A) 298.15 million 55% 160 Mn

30-50 (B) 30% 90 Mn

Above 50 (C) 15% 4.5 Mn

100% of age group of A + 50% of age group B + 50% CAGR = 300 Mn Geographic Segmentation
Exhibit 4: Rural and Urban subscription share

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Segmentation Details: With the rural India growth story unfolding, the telecom sector is likely to see tremendous growth in India's rural and semi-urban areas in the years to come. By 2012, India is likely to have 200 million rural telecom connections at a penetration rate of 25 per cent. And according to a report jointly released by Confederation of Indian Industry (CII) and Ernst & Young, by 2012, rural users will account for over 60 per cent of the total telecom subscriber base. India's rural majority today accounts for more than US$100 billion in consumer spending i.e. the largest buyers as a group in the country and contributing significantly to India's GDP. In 99-00, for every $100 earned by a person residing in a rural area, a person in an urban area earned approx. $182. Today, this gap has been reduced to $56. Saturation in Urban Market Teledensity at 71%, Rural India teledensity is less than 10%, Scope of growth based on affordable tariffs The regulator has put thrust on rural rollouts and will provide aid through USO fund.

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TARGETING
Targeting (by Age) Based on segmentation decided to go for Market segmentation as below, Age Group Income Youth High Middle Age Medium Senior Citizen Low

100% of age group of A+ 50% of age group B + 50% CAGR = 300 Mn Considering 15% market capture in GSM market = 0.15*300 = 45 Mn Target 34 million subscribers from the youth and middle age segment in urban segment, from the total target of 45 million. Targeting (by geography)

The Target market for the Rural Area will be the R1, R2 and R3 segments in the villages having population of 2000 and above. This will allow DOCOMO to concentrate on the 50% of rural population without incurring a very high cost for expansion of services to remote interiors with low user densities. Therefore target population for rural is 54% of 62 crores i.e. 33 crores (330 million) (as per Exhibit 6) Target 11 million subscribers from the rural segment from the total target of 45 million.

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POSITIONING
For all GSM mobile users across India who need simplified, affordable and savings oriented cellular service, TATA DOCOMO is a 3G ready GSM telecom service provider that provides a range of innovative Value added Services with out of the box pricing plans. Unlike the other GSM service providers, TATA DOCOMO is a youthful and vibrant brand that is set to break the conventional thinking by introducing new features and services for all classes of people.

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Marketing Mix
PRODUCT
TATA DOCOMO having good range of services: TATA DOCOMO provides both postpaid and prepaid services. TATA DOCOMO Quality network: TATA DOCOMO intends to have good quality network which provides clarity in voice. Prepaid Plan Features o 1p/ second - Anywhere In India o Savings Alert After every Outgoing call o ISD calls on 1 second charging o Best SMS rates from TATA DOCOMO o Pre activated STD, ISD and National Roaming without rental o Anywhere in India Recharge with TATA DOCOMO o Total Information control For the rural population, voice alone cannot be incentive enough to subscribe for a telephone connection even with the availability of low cost handsets and all the recent tariff initiatives. The mobile handset has to become a multipurpose instrument providing entertainment, news, education, connectivity as well as a means to promote the financial and business interests. Value added services viz. education, entertainment, tele-medicine, banking, IPTV etc. Some of these services can be provided through text messaging. However, in order to make up for the slow pace of development in the past and offer range of usage/ application, it is necessary that both voice and broadband go and in hand as far as strategy for rural India are concerned. Locally relevant applications in local languages Alerts to farmers on Mandi prices Vital, real-time information is available to fishing communities (e.g. sea wave heights, satellite scan data about fish shoals) which is processed to make it usable to non-technical users. Integrated package consisting of text-messaging services, voice services and an Internet portal for rural areas. Farmers and fishermen can access the service to get weather forecasts, price information, and employment opportunities outside the agricultural industry. Temperature, humidity, wind speed & direction and rainfall information Tie up with initiatives like ITC e-choupal to provide real time information via mobiles Mobile Banking for Rural India: Paying insurance premium and utility bills Sending and receive money (through agents/post offices etc) Applications for the health and education areas Provide standard classroom content as part of broadband package P a g e 15

Project Report Provide specialized e-classroom trainings Provide trainings for agriculture and livestock related areas pay per use Provide technical (non agricultural sector) related trainings and certifications for increasing employment opportunities pay per use

Applications for Department of Posts Applications to send the letters, greetings, messages etc electronically, only generating hard copies at point of destination for distribution. This will save a lot on logistics costs for department of posts. At the same time they can retain revenues. Applications for sending money orders through e-Money

PLACE
It having good range of channels of distribution: As TATA already exist in this field of telecommunications as TATA Indicom. It has wide range of channels of distribution to sell TATA DOCOMO services Use TATAs existing electronic retail chains like Croma for sales, distribution, returns and customer service in urban areas. Tie-up with Department of Post The Postal department has the required infrastructure and reach and also the expertise to handle monetary transactions along with postal deliveries (money orders, stamps, savings schemes, other miscellaneous services) The Dept of Posts has a presence in every corner of the country. The Postman is a known and recognized entity in even the smallest villages. He knows the people well in every village and is well respected. He is also seen as a reliable and responsible Person since he works with the government. He can also influence the decisions of the village folks due to his unique position elaborated above. Postman can be used for credit verification, address verification, training and support and can be given incentives for the same by the telecom companies. TATA with its well respected brand and political clout can form this alliance. Use Local Schools/Colleges etc for training in rural areas The local schools will offer the presence of literate teachers who can be leveraged for training the rural people in the use of mobile services and handsets. The teachers can also serve as the voice through which the benefits can be communicated to the villagers. Dive-in stores in small cities.

PROMOTION
Advertising: TATA DOCOMO following different style of advertising pattern in TVs and newspapers. Sales promotion: due to unique feature of TATA DOCOMO it helps the sales people to decrease burden. Run promotions for mobile services and products during harvest season and festivals due to the presence of higher disposable income during that period. Run promotions through the local post office, gram panchayats, banks and schools, buses. P a g e 16

Project Report Allow one month free service for the value added services as trial offers. Can introduce night free offer depending on customer reactions. Dive-in Stores Innovative and cost effective billing plans Give away/ freebies wrt milestone billing Social networking websites Cross selling and promotions with TATAs other outlets like CROMA, Tanishq, TITAN

PRICE
Background: TATA DOCOMO is entering a market where: o Product demand is highly price elastic. o Substantial economies of scale are available. o The product is suitable for a mass market (i.e. enough demand). o The product will face stiff competition soon after introduction o Because of the cut throat competition, price skimming will not work.

Pricing: The pricing objective is market penetration and to reach as many consumers as possible, setting a low initial entry price, lower than the eventual market price, to attract new customers. We expect that customers will switch to the new brand because of the lower price. This will help in fast diffusion and adoption. This will take the competition by surprise, not giving them time to react. This will also create goodwill among the early adopters segment. This can create more sales through word of mouth.

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Implementation
BUDGET
Considering 45 Mn market for next year, with ARPU of Rs. 165, the total revenue target will be 742 Cr. Activity Budget Allocated Sales and Marketing 15% Operating cost 22% Salary 8% Depreciation and 25% Amortization Administration 15% Profit Expected 15% Total 100% (Figures are based on recent balance sheet from DOCOMO) Amount (in Cr) 111 163 60 185 111 111 742

The marketing budget of 111 Cr is used for the Activity Scheduling and Implementation till Oct 2010.

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ACTIVITY SCHEDULE

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R EFERENCES
Telecom Regulatory Authority of India (TRAI) Database and Reports Marketing Management by Philip Kotler, Kevin Lane Keller, Abraham Koshy, Mithileshwar Jha. International Telecommunication Union Database BSE India website (http://www.bseindia.com) Telecommunication Services, Indian Industry: A Monthly Review, CMIE November 2008 Telecommunication Sector Report March 2008, CRISIL Indian Telecommunication Sector - August 2007, IBEF Report Census 2001 TATA DOCOMO and Competitors websites http://www.mplans.com http://www.knowthis.com

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