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A Project Report submitted in partial fulfillment of the requirement for the award of MASTERS DEGREE IN BUSINESS ADMINISTRATION
GITAM INSTITUTE OF MANAGEMENT GITAM UNIVERSITY (Established U/S3 of UGC Act, 1956) VISAKHAPATNAM (2011-12)
This is to certify that D V PHANEENDRA KUMAR, MBA student (Enrollment No 1225111210), GITAM Institute of Management, GITAM University has done the project from 09 May 2012 to 20 June 2012 on Retail Penetration of MTS in our Organization for submission in partial fulfillment for the award of Post Graduate Degree of Master of Business Administration by GITAM University and his/her work has been satisfactory.
ACKNOWLEDGEMENT
It is my pleasure to acknowledge and express my gratitude to all those who helped me throughout in the successful completion of this project. I am very thankful to Sri.VINOD, HR Manager, MTS India, of Visakhapatnam Branch for extending support throughout the project. I am thankful to Sri A.SREENIVAS, ASM and Sri SUBHANI.V, ASM of Visakhapatnam MTS India for providing information regarding the project. I wish to express my gratitude to Prof K Siva Rama Krishna, Dean & Principal, GITAM Institute of Management, GITAM University, Visakhapatnam, for giving me this valuable opportunity to experience the work culture in an organization. I am grateful to Shri.M.S.V.Prasad (FINANCE), GITAM Institute of Management, GITAM University, Visakhapatnam for his/her continuous guidance to accomplish this project work, successfully.
CERTIFICATE
This is to certify that the project Report titled RETAIL PENETRATION is an original work carried out by D V PHANEENDRA KUMAR (Enrollment No 1225111210), under my guidance and supervision, in partial fulfillment for the award of the degree of Masters of Business Administration by GITAM Institute of Management, GITAM University, Visakhapatnam, during the Academic year 2011-12. This report has not been submitted to any other University or Institution for the award of any Degree/Diploma/Certificate.
Signature of Guide Name and Address of the Guide: Name of Faculty: Designation: GITAM Institute of Management Visakhapatnam
DECLARATION
I, D.V.PHANEENDRA KUMAR a student of Masters of Business Administration (M.B.A.), GITAM Institute of Management (GIM), GITAM University, hereby declare that the project work initiated on UNDERSTANDING THE BUSINESS-RETAIL PENETRATION at MTS India, Visakhapatnam is a genuine work done by me in partial fulfillment for the requirement of the degree of Masters of Business Administration. I confirm this has not been published or submitted elsewhere for the award of any degree in part or in full.
Table of Conents S.No 1 2 3 4 5 Title Page Company Certificate Declaration by Student Acknowledgement Chapter 1 :Theoretical Frame work 1. (a) Topic Related Concepts 6 Chapter 2 : Organisational Profile 1. (a) Industry profile 2. (b) Organisational Profile 7 Chapter 3: The present Study 1. Need of the Study 2.Objectives of study 3.Scope of study 4. Research Design 5. Data Collection Method 6. Limitations of the Study 8 9 10 11 12 Chapter 4: Analysis Of Study Chapter 5: Findings, Suggestions Conclusion Bibliography Annexure Particulars Page No's
CHAPTER- 1
Theoretical Framework
Retail in India: Some facts and figures about retail in India: RETAIL SALES in India will grow from the US$395.96 Billion (Rs 17818.20 Billion) in 2011 to US$ 785.12 billion (Rs 35330.40 billion) by 2015. Sales through MGR outlets (Mass Grocery Retail) is expected to increase by 218% by 2015 to reach a level of US$ 27.67 billion (Rs 1245.15 billion). Organized retail in India is expected to increase from 5 per cent of the total market in 2008 to 1418 per cent and reach US$ 450 billion by 2015, according to a McKinsey & Company report titled 'The Great Indian Bazaar: Organized Retail Comes of Age in India'. By 2012, around 55 million square feet of retail space will be ready in the national capital region (NCR), Kolkata, Mumbai, Chennai, Bangalore, Hyderabad and Pune. The Organized retail real estate stock will therefore grow from the existing 41 million sqft to 95 million square feet. According to the report Strong and Steady 2011 released by global consultancy and research firm PricewaterhouseCoopers (PwC), India's retail sector, which is currently estimated at about US$ 500 billion, is expected to grow to about US$ 900 billion by 2014. According to a report by KPMG, food retail sector in India is set to more than double to by 2025 to US$ 150 Billion (Rs 6750 Billion). This would be driven by growth of organized report coupled with changing consumer habits. AT Kearney in its 9th annual Global Retail Development Index (GRDI) 2010 has ranked India as the 3rd most attractive nation for retail investment among 30 emerging markets. Foreign direct investment (FDI) inflows between April 2000 and January 2011, in single-brand retail trading, stood at US$ 128.34 million, according to the Department of Industrial Policy and Promotion (DIPP).
1.
INDUSTRY PROFILE
Introduction
The telecom services have been recognized the world-over as an important tool for socioeconomic development for a nation. It is one of the prime support services needed for rapid growth and modernization of various sectors of the economy. Indian telecommunication sector has undergone a major process of transformation through significant policy reforms, particularly beginning with the announcement of NTP 1994 and was subsequently re-emphasized and carried forward under NTP 1999. Driven by various policy initiatives, the Indian telecom sector witnessed a complete transformation in the last decade. It has achieved a phenomenal growth during the last few years and is poised to take a big leap in the future also.
Dec 1991DoT invites bids from Indian companies for cellular licenses in the four metropolitan circles May 1994Government announces the National Telecom Policy, opening up the basic service sector to private players
Sep 1994Entry guidelines for basic services announced Kolkata in the year 1995. Nov 1994Licenses were issued to cellular operators in the four metros Mar 1995Paging services by private operators commence Oct 1996Licenses for 20 cellular circles issued Jan 1997Telecom Regulatory Authority of India established by government Nov 1998ISP business opened up to operators other than DoT and VSNL Mar 1999Government announces NTP 1999 Jul 1999DoT announces Migration Package for existing operators' licensing costs, subject to compliance with certain condition Aug 2000Government announces guidelines for opening up domestic long distance telephony for carrying both inter-circle and intra-circle traffic, with no restriction on the number of players TRAI issues the first tariff order and cuts domestic and international long distance telephony charges. Jan 2001The Department of Telecom opens up basic services to unlimited competition and allows basic operators to provide WLL services on a restricted basis. Aug 2001Opening of National Long Distance Service to competition Jan 2002Bharti starts cellular to cellular long distance services with sharp cuts in tariffs. Apr 2002ILD sector opened to competition. End of VSNL monopoly. May 2002Bharti offers ILD services with sharp cuts in tariffs Sep 2002TRAI decides to 'forbear' from regulating cellular tariffs Mar 2006WPC set subscriber thresholds for GSM and CDMA operators for spectrum allocation Mar 20079 distinct operators had been allocated GSM spectrum. Out of these, only Bharti has a pan-India presence. Aug 2007Subscriber thresholds were revised by TRAI as operators could support more subscribers with lower spectrum as compared to WPC allocation
Jan 2008Govt of India allocated start-up spectrum to all prior licensees awaiting spectrum (does not include LOIs issued in January 2008). These include Aircel (14 circles), Idea (2 circles), RComm (14 circles) and Vodafone (6 circles). Jun 2009TRAI plans to introduce MNP (Mobile Number Portability) on a pan-India basis
On account of a dramatic increase in the earnings from mobile and landline connections, the telecom industry in India made revenue of US$ 8.56 billion during the quarter ending on December 31, 2009 thereby witnessing a recovery from the economic downturn. Business Monitor International has stated that at present, India is adding up about 8-10 million mobile subscribers every succeeding month. Estimates have revealed that by June2012, almost half Indias population will be in possession of a mobile phone. This will result in about 612 million mobile subscribers, making up a tele density of about 51 per cent by the year 2012. Over and above, a study undertaken by Nokia has brought out that the communications sector will grow as the single largest chunk of the Indias GDP making up about 15.4 per cent by the year 2014. Estimates made in February 2009 show that the Indian equipment market valued at US$ 24 billion, while Nokia was glowing as the market leader reporting more than US$ 3.4 billion revenues in 2008-09. Ericsson followed Nokia with revenue of about US$ 2.11 billion. The latest reports published by Evalueserve state that the availability of the 3G spectrum has given hopes of finding about 275 million Indian subscribers using 3G-enabled services. This will take up the number of 3G-enabled handsets to reach near to 395 million by the end of 2013. A Frost & Sullivan industry analyst has predicted that by the year 2012, revenues from fixed line subscriptions in India will reach up to US$ 12.2 billion, while the revenue from mobile connections will reach up to US$ 39.8 billion. In a significant step taken to boost up the auction of 3G spectrum, the Indian Government has permitted prospective bidders to call for short-term funds from the domestic market in the country, while allowing refinancing out of external commercial borrowings (ECBs) within a period of 12 months. Estimates show that the government can mop up US$ 7.53 billion from the auction of 3G spectrum to be completed shortly. The reserve price has been fixed at US$ 753.74 million. BSNL, the state-managed telecom operator has introduced 3G services in more than 318 cities benefitting 856,000 subscribers. BSNL has been venturing to cross more than 400 cities in the near future eventually rolling this service across 760 cities by September 2010. While the debate on 3G is seen continuing, TRAI has already started consulting on the next higher level of telecom services. 4G or the fourth generation enables downloads faster than all the earlier versions. Today, India is the largest market in the world adding up a dramatic number of about 20 million mobile subscriber lines every month in an average. On the other hand, the number of landlines is
found gradually decreasing. At the end of the first quarter in 2010, we find that the overall telecom subscriber penetration has gone up by more than 52 %. Though this might occur as a relatively low volume compared with a number of other nations, this comes as a quantum leap noting the figures recorded a few years back. Mumbai and Delhi (NCR) enjoy the status among a few other metro areas around the globe boasting of more than 25 m mobile subscribers in each of these regions. At present, The FDI cap in the telecom sector in India is 74 %. In a recent move, UKs Vodafone Group has purchased a 52 % stake in Hutchison Essar, the fourth largest mobile service provider in the country. Bharti Airtel has the credit of being the first Indian operator to cross a subscriber base of 50 million. It is predicted that mobile number portability (MNP) will be available throughout India by the second quarter of 2010, initially in the cities of Chennai, Delhi, Kolkata and Mumbai, the four metros of India. Also, 3G (third generation) mobile services are found being introduced in all the major cities across the nation. The country has auctioned three 3G spectrum slots to private bidders. However, the number of subscribers for broadband connections is increasing at a slow pace.
Liberalization
The process of liberalization in the country began in the right earnest with the announcement of the New Economic Policy in July 1991. Telecom equipment manufacturing was DE licensed in 1991 and value added services were declared open to the private sector in 1992, following which radio paging, cellular mobile and other value added services were opened gradually to the private sector. This has resulted in large number of manufacturing units been set up in the country. As a result most of the equipment used in telecom area is being manufactured within the country. A major breakthrough was the clear enunciation of the governments intention of liberalizing the telecom sector in the National Telecom Policy resolution of 13th May 1994.
from 20th February 1997 by an Act of Parliament, called the Telecom Regulatory Authority of India Act, 1997, to regulate telecom services, including fixation/revision of tariffs for telecom services which were earlier vested in the Central Government. TRAIs mission is to create and nurture conditions for growth of telecommunications in the country in manner and at a pace, which will enable India to play a leading role in emerging global information society. One of the main objectives of TRAI is to provide a fair and transparent policy environment, which promotes a level playing field and facilitates fair competition. In pursuance of above objective TRAI has issued from time to time a large number of regulations, orders and directives to deal with issues coming before it and provided the required direction to the evolution of Indian telecom market from a Government owned monopoly to a multi operator multi service open competitive market. The directions, orders and regulations issued cover a wide range of subjects including tariff, interconnection and quality of service as well as governance of the Authority. The TRAI Act was amended by an ordinance, effective from 24 January 2000, establishing a Telecommunications Dispute Settlement and Appellate Tribunal (TDSAT) to take over the adjudicatory and disputes functions from TRAI. TDSAT was set up to adjudicate any dispute between a licensor and a licensee, between two or more service providers, between a service provider and a group of consumers, and to hear and dispose of appeals against any direction, decision or order of TRAI.
Direct interconnectivity and sharing of network with other telecom operators within the service area was permitted. Department of Telecommunication Services (DTS) corporatized in 2000. Spectrum Management made transparent and more efficient. All the commitments made under NTP 99 have been fulfilled; each one of them, in letter and spirit, some even ahead of schedule, and the reform process is now complete with all the sectors in telecommunications opened for private competition.
Rural Telephony
Apart from the 200.77million fixed and WLL connections on March 2010 provided in the rural areas, 570000 uncovered VPTs have been provided as on March 2010. Thus, 96% of the villages in India have been covered by the VPTs. More than 3 lakh PCOs are also providing community access in the rural areas. Further, Mobile Garmin Sanchar Sewak Scheme (GSS) a mobile Public Call Office (PCO) service is provided at the doorstep of villagers. At present, 2772 GSSs are covering 12043 villages. Also, to provide Internet service, Sanchar Dhabas (Internet Kiosks) have been provided in more than 3500 Block Headquarters out of the total 6337 Blocks in the country. The target of 80 million rural connections by 2010 have already met during year 2008 itself. USOF subsidy support scheme is also being utilized for sharing wireless infrastructure in rural areas with about 19,000 towers by 2010. Performance of telecom equipment manufacturing sector As a result of Government policy, progress has been achieved in the manufacturing of telecom equipment in the country. There is a significant telecom equipment-manufacturing base in the country and there has been steady growth of the manufacturing sector during the past few years. The figures for production and export of telecom equipment are shown in table given below: (Rs. in crore) Year 2002-03 2003-04 2004-05 2005-06 2006-07 Production 14400 14000 16090 17833 23656 Export 402 250 400 1500 1898
2007-08 2008-09
2009-10
(projected 18%)
Rising demand for a wide range of telecom equipment, particularly in the area of mobile telecommunication, has provided excellent opportunities to domestic and foreign investors in the manufacturing sector. The last two years saw many renowned telecom companies setting up their manufacturing base in India. Ericsson set up GSM Radio Base Station Manufacturing facility in Jaipur. Elcoteq set up handset manufacturing facilities in Bangalore. Nokia and Nokia Siemens Networks have set up their manufacturing plant in Chennai. LG Electronics set up plant of manufacturing GSM mobile phones near Pune. Ericsson launched their R&D Centre in Chennai. Flextronics set up an SEZ in Chennai. Other major companies like Foxconn, Aspcom, and Solectronetc. have decided to set up their manufacturing bases in India. The Government has already set up Telecom Equipment and Services Export Promotion Council and Telecom Testing and Security Certification Centre (TETC). A large number of companies like Alcatel, Cisco have also shown interest in setting up their R&D centers in India. With above initiatives India is expected to be a manufacturing hub for the telecom equipment.
Opportunities
India offers an unprecedented opportunity for telecom service operators, infrastructure vendors, manufacturers and associated services companies. A host of factors are contributing to enlarged opportunities for growth and investment in telecom sector: An expanding Indian economy with increased focus on the services sector Population mix moving favorably towards a younger age profile Urbanization with increasing incomes Investors can look to capture the gains of the Indian telecom boom and diversify their operations outside developed economies that are marked by saturated telecom markets and lower GDP growth rates. Inflow of FDI into Indias telecom sector during April 2000 to Feb. 2010 was about Rs 405,460 million. Also, more than 8 per cent of the approved FDI in the country is related to the telecom sector.
services on the inaugural function of India Telecom 2008 held on 11th December 2008, BSNL launched its countrywide 3G services from Chennai, in the southern Tamil Nadu state on 22nd February 2009.
The number of telephone subscriber base in the country reached 671.69 million as on June 30, 2010 from 653.92 million in May 2010, as per the Telecom Regulatory Authority of India (TRAI). According to the latest survey conducted by Voice and Data, CyberMedia group journal, Bharti Airtel emerges as India's top mobile phone operator in 2009-10. Let's take a look at India's top 10 telecom service providers in India in terms of revenue. 1. BHARTI AIRTEL
Bharti Airtel retained its leading position among telecom service providers and posted a growth of five per cent to end 2009-10 fiscal with revenues of Rs 38,800 crore (Rs 388 billion). The company is structured into four strategic business units -- mobile, telemedia, enterprise and digital TV. The company has with operations in 18 countries with a footprint covering 1.8 billion people. Sunil Bharti Mittal is the chairman and managing director of the company. In March 2010, Bharti Airtel bought the African operations of Kuwait-based Zain Telecom for $10.7 billion. Recently, it has joined a consortium of global telecom operators to announce the launch of the EASSy cable system -- the 10,000 km undersea cable connecting Africa to Europe 2. BSNL
Bharat Sanchar Nigam Limited saw a drop in its revenue for the second consecutive year to post Rs 30,240 crore (Rs 302.4 billion), a drop of 14 per cent, even though it retained the number two position among telecom players. BSNL offers both fixed line and mobile services with broadband connections.
With over 71.68 million subscribers, BSNL currently is the largest wireline service provider in India. The company has reported around 6 crore (600 million) 2G connections and 9,73,378 3G connections since February 2010. All major towns and cities are covered through BSNL network. Gopal Das is the new chairman and managing director of BSNL. 3. VODAFONE ESSAR
The Indian subsidiary of Vodafone Group, Vodafone Essar recorded 13.7 per cent growth to emerge as the third largest player with revenue of Rs 23,200 crore (Rs 232 billion). The company commenced operations in 1994 when its predecessor Hutchison Telecom acquired the cellular license for Mumbai. It has operations across the country with over 106.34 million customers. It is the world's leading international mobile communications group with approximately 347 million proportionate customers as on 30 June 2010 and has around 40 partner networks worldwide. Vittorio Colao is Vodafone chief executive, and Marten Pieters is managing director and CEO, Vodafone Essar. 4. RELIANCE COMMUNICATIONS
Reliance ADA Group's flagship company, Reliance Communications reported a negative growth of 3.5 per cent with revenue of Rs 22,130 crore (Rs 221.3 billion). It is India's largest private sector information and communications company, with over 100 million subscribers.
It has established a pan-India, high-capacity, integrated (wireless and wireline), convergent (voice, data and video) digital network, to offer services spanning the entire infocommunication value chain. Anil D Ambani is the chairman of the company. 5. IDEA CELLULAR
Idea Cellular is part of the Aditya Birla Group and has bagged fifth position with a revenue of Rs 11,390 crore (Rs 113.9 billion). It is a leading GSM mobile services operator in India with 67 million subscribers. Idea offers both prepaid and postpaid services. It is a pan-India operator with services being made available in all parts of the country. Idea was the first cellular service provider to launch General Packet Radio Service (GPRS) and Enhanced Data rates for GSM Evolution (EDGE) in the country. Kumar Mangalam Birla is the chairman of the group. 6. TATA COMMUNICATIONS
Tata Communications reported revenue of Rs 11,000 crore (Rs 110 billion). The company holds leadership position in emerging markets. Tata Communications leverages its advanced solutions capabilities and domain expertise across its global and pan-India network to deliver managed solutions to multi-national enterprises, service providers and Indian consumers. The Tata Global Network includes one of the most advanced and largest submarine cable networks, a Tier-1 IP network, with connectivity to more than 200 countries across 400 PoPs, and nearly 1 million square feet of data center and collocation space worldwide. SrinathNarasimhan is the managing director and CEO of Tata Communications.
7. Tata Teleservices
Tata Teleservices spearheads the Tata Group's presence in the telecom sector. It has posted revenue of Rs 6,900 crore (Rs 69 billion). Established in 1996, Tata Teleservices, one of the 96 companies of Tata Group, has its network in 20 circles. It is the first company to launch CDMA mobile services in India. It launched mobile operations in January 2005 under the brand name Tata Indicom. It enjoys a pan-India presence through existing operations in all of India's 22 telecom circles. Tata Teleservices operates under five different brands -- Tata Indicom (CDMA services), Tata DOCOMO (GSM services), Virgin Mobile, Tata Walky (which is the brand for fixed wireless phones), Tata Photon (the company's brand that provides a variety of options for wireless mobile broadband access) and T24. Tata Teleservices Ltd, along with Tata Teleservices (Maharashtra) Ltd, serves nearly 70 million customers in more than 450,000 towns and villages across the country. Anil Sardana is the managing director of Tata Teleservices 8. AIRCEL
Aircel recorded the highest growth of 37.2 per cent among operators in 2009-10. The company posted revenue of Rs 4,700 crore (Rs 47 billion) to move to the number eight slot. It is a joint venture between Maxis Communications Berhad of Malaysia and Sindya Securities Investments Private Limited, whose current shareholders are the Reddy family of Apollo Hospitals Group of India. Aircel commenced operations in 1999 and became the leading mobile operator in Tamil Nadu. It emerged a market leader in Assam and in the North Eastern provinces within 18 months of operations. Today, the company has a foothold in 21 circles including Chennai, Tamil Nadu, Assam, North East, Orissa, Bihar, Jammu & Kashmir, Himachal Pradesh, West Bengal, Kolkata, Kerala,
Andhra Pradesh, Karnataka, Delhi, UP(West), UP(East), Maharashtra & Goa , Mumbai, Madhya Pradesh and Punjab. It has over 43 million customers in the country. MTNL Mahanagar Telephone Nigam Limited (MTNL)'s revenue dropped nearly by a fifth highest among the top 10 players -- to Rs 3,650 crore (Rs 36.5 billion). The company has achieved a customer base of 8.06 million in the two metro cities of Delhi and Mumbai. The government currently holds 56.25 per cent stake in the company. Today it has more than 9, 00,000 GSM mobile connections. The company was in the forefront of technology induction by converting 100 per cent of its telephone exchange network into the state-of-the-art digital mode. Kuldip Singh is chairman & managing director of MTNL.
ORGANISATIONAL PROFILE
ABOUT SSTL
SSTL is credited to have introduced a number of innovations in the Indian telecom industry. The Company is the pioneer of Half Paisa per Second Calling in the country. SSTL is also the first telecom operator in the country to launch prepaid High Speed Mobile Broadband. It was the first telecom operator to launch High Speed mobile broadband in Jharkhand and Sikkim. The company has taken mobile broadband to another level with the launch of HSD services on National Highways. Today, it is the only telecom operator to provide HSD services on Delhi Jaipur and Bangalore - Chennai National Highways. SSTL has been focused on creating a strong portfolio of devices catering to customers across various segments. The Company recently launched MTS Pulse, an Android powered Smartphone that the users can get for free with no upfront payment. SSTL added to its range two more Android Smartphones MTS Livewire and MTS MTag 3.1, both priced in the sub Rs. 5000 category. MTS also offers its data customers innovative applications like MTS TV, a free to download application that provides on the move access to more than 100 Live TV and video on demand channels. Beyond business, the Company has partnered with INDIA UNITE TO END POLIO NOW (IUEPN)campaign organized to createawareness for Polio eradication amongst the masses. The IUEPNcampaign is an initiative implemented by Aidmatrix Foundation, in partnership with the Polio Eradication Programme in India, a collaborative effort between the MINISTRY OF HEALTHAND FAMILY WELFARE(MOHFW), UNITED NATIONS CHILDRENS FUND (UNICEF), WORLD HEALTH ORGANIZATION(WHO),NATIONAL POLIO SURVEILLANCE PROJECT(NPSP), ROTARY INTERNATIONAL, AND THE U.S. CENTRE FOR DISEASE CONTROL (CDC). As part of the initiative, SSTL has actively participated in awareness creation drives in several states, reminding people about the need to get their children vaccinated against Polio. MTS India has recently partnered with Smile Foundation, a national level development organization reaching out to more than 2 Lakh underprivileged children through various education and health care projects across 22 states of India. Under the partnership MTS will provide Mobile Broadband support to enhance learning capabilities of underprivileged children studying at Mission Education Centers run by Smile Foundation. The companys objective is to leverage the advancements in Information & Communication Technologies (ICT) to contribute towards progressive socio-economic change, especially in the fields of Health and Education.
ABOUT MTS
MTS Brand
MTS is the global telecom brand of Mobile Tele Systems (MTS) OJSC (NYSE: MBT) of Russia. In December 2008, SistemaShyam Tele Services Ltd, a venture, involving equity participation by Sistema {LSE: SSA} of Russia, the Russian Federation and the Shyam Group of India, brought the MTS brand into India under a brand license agreement with Mobile Tele Systems (MTS) OJSC. This extended the brand of MTS beyond the CIS countries. As part of the 2012 Millward Brown report on Most Valuable Global Brands MTS is ranked 85th with a brand value of $9.5 billion. In 2008, MTS became the first and only Russian brand to enter BRANDZ Top 100 Most Powerful Brands, a ranking published by the Financial Times and Millward Brown. Brand MTS was launched in 2006 in Russia and got built based on its reputation as the leading telecommunication group offering world class telecom services in Russia, Eastern Europe and Central Asia. In India, brand MTS offers voice & data services to 16 million wireless subscribers and operates across all 22 telecom circles of India. MTS launched the high-speed mobile broadband service, MBlaze, in November 2009 and has seen tremendous market acceptance with over 1.5 million satisfied mobile broadband customers. The high speed mobile broadband service has been made available in 400 towns (Including all Metros) across the country. In April 2010, MTS is also credited to have launched its LIVE TV and Video on demand service, aptly called MTS TV for all MBlaze customers.
HISTORY
MTS was established in October 1993 by Moscow City Telephone Network (MGTS), T-Mobile Deutschland GmbH (T-Mobile), an affiliate of Deutsche Telekom AG, Siemens AG (Siemens) and several other shareholders. In late 1996, Sistema JSFC acquired a majority stake in MTS and has remained the primary owner ever since. MTS was the first company to launch GSM services in the Moscow region in 1994. In subsequent years, MTS has expanded rapidly in Russia largely through the acquisition of smaller independent players and became the leading national mobile operator.
MTS initiated its international expansion in 2002 through the establishment of Mobile Tele Systems LLC, a joint venture with Bel telecom, the national fixed line operator in Belarus. In 2003, MTS continued to expand in the CIS by acquiring the leading operator UMC in Ukraine, the biggest CIS market outside of Russia. MTS entered Central Asia in 2004 through the acquisition of the leading mobile phone operator in Uzbekistan, Uzdunrobita. In June 2005, the Company acquired Barash Communications Technologies, Inc., the number one operator in Turkmenistan. In September 2007, MTS continued its international expansion through the acquisition of the leading mobile operator in Armenia, K-Telecom. In December 2008, MTS started to expose its brand outside the CIS borders. MTS and Shyam Tele link Limited, JSFC Sistema's telecommunications subsidiary in India, announces the agreement to allow Shyam Tele link to use MTS brand in India. The decision to introduce the brand to India is reflective of the brands success in the Companys markets of operation since its launch in May 2006. In April 2008, MTS brand was recognized as one of the BRANDZ Top 100 Most Powerful Brands, a ranking published by the Financial Times and Millward Brown, a leading global market research and consulting firm. Today, Mobile Tele Systems is the largest mobile phone operator in Russia and the CIS. MTS is a multinational corporation of a new type, based in a high-growth emerging market and simultaneously entering other developing markets with a unified brand. Having been recognized internationally for corporate governance and transparency, MTS is not only a leading Russian blue-chip company, but a truly global organization.
criteria: shareholder return, return on equity, total revenues, and revenue growth. MTS became the highest-ranked company from Russia, and above such companies as AT&T, LG and Microsoft.
GSMA Board
In April 2008, the CEO of MTS joined the Board of the GSM Association (GSMA), the global trade association for the mobile industry. GSMA's board members include 25 operator representatives, the Chair of the Executive Management Committee - the body that manages the Association's ongoing activities in the area of products and services - and the GSMA CEO Rob Conway. Board members include executives of such leading global operators as China Mobile, AT&T, Orange, Telephonic O2 Europe, T-Mobile, Vodafone, and Telenor Mobile.
Corporate Governance
MTS was ranked as the most transparent company in Russia by Standard & Poors in 2005, 2006 and 2007. The ranking was based on the analysis of ownership structure and shareholders rights, financial and operational openness and composition and procedures of the Board of Directors and Management Committee.
Investor Relations
In 2006 and 2007, MTS was recognized as having the best Investor Relations department in the telecom sector in Russia. The award was based on the results of the Extel Survey Focus Russia study, conducted jointly by Interfax and Thomson Financial.
Shyam Group
Shyam Group provides wireless coverage solution (enabling reliable mobile communication for GSM, CDMA, iDEN, UMTS, TETRA, and Public Safety) for various entrenched and evolving technologies globally and infrastructure that enables and affordable wireless communication. Shyam Group designs and manufactures innovative coverage solutions for mobile operators, real-estate developers, neutral-host providers, business and residence, designing solution, which seamlessly integrates with macro-networks of the mobile operators.
Organizational Chart:
Manpower Particulars:
Row Labels Customer Service Dept. Finance and Commercial HR IT Management Marketing Network RE & Admin. Sales Secretarial and Legal Security & Vigilance (blank) Grand Total 189 Count of S.No 40 7 4 5 3 15 11 4 97 1 2
Row Labels Assistant Director ASSOCIATE DIRECTOR Associate Specialist COO Deputy Director Director Lead Senior Lead
Count of S.No 19 4 2 1 4 1 12 13
NEED//SIGNIFICANCE OF STUDY:
A study of Retail Penetration of MTS is mainly to increase the awareness level of MTS, to seek the general perception of retailer towards MTS also to know the retailer behaviour and psychology towards MTS. The significance of this study is to know preference of MTS with comparison to other competitive brands and to know which area is not responding the MTS sale up to the mark.
OBJECTIVES OF STUDY:
Primary Object To understand the awareness of MTS products among retailers in the market. To create interest as well as find out the potential new retail outlets
To analyze the retailers perception towards MTS To know the satisfaction level of Retailers towards MTS products and services. Secondary Object To maximize retail outlets through traditional channel that will increase the sales in future. To create more numbers of MTS subscribers.
SCOPE OF STUDY:
The study carried out in Visakhapatnam city so its scope is mainly limited to few areas in Visakhapatnam. It gives information about the size of the retail network. It gives information about the services given by distributor to their retailer. It gives information about the competitors products. It provides suggestions to the company to improve their products sales. It gives information about the sales promotion activities to improve the MTS sale.
RESEARCH DESIGN:
A Research design specifies the methods and procedures for conducting a particular study. It is a map (or) blue print to which the research is to be conducted. Descriptive Research is the research method used because descriptive studies embrace a large proportion of market research. The purpose is to provide an accurate snapshot of some aspect of the market environment. Descriptive research is more rigid than exploratory research and seeks to describe users of a product, determine the proportion of the population that uses a product, or predict future demand for a product SAMPLE DESIGN: The sampling design used was Convenience sampling, which is a non-probability sampling method. The convenience factors were the availability and approachability of the respondents. TYPE OF UNIVERSE: Finite SAMPLING UNIT: Visakhapatnam (MADHURWADA, ARILOVA, PM PALEM & RAVINDRA NAGAR) SAMPLE SIZE: 100 Retail Outlets POPULATION: All type of Retail Outlets.
The outlets had been classified into: a) Good Approach b) Improve the Service/Approach c) Interested outlets
Sell@ MTS Yes Location Arilova Madhurwada PM Palem RavindraNagar Total 26 23 10 17 76 Table: 1 Category * Sell @ MTS Cross tabulation No 15 6 3 0 24 Total 41 29 13 17 100
Sell@ MTS Yes Category Good Approach Improve the approach Interested outlets Total 34 42 0 76 Table: 1.1 No 0 0 24 24
Total
34 42 24 100
Chart: 1 INTERPRETATION: From the above graph it was clear that 76% of retail outlets are selling MTS products in those four areas (Arilova, Madhurwada, PM Palem, RavindraNagar) and 24% are not selling MTS. Arilova & Madhurwada having more number of outlets comparing with other two areas. From the above Category table 34% of retail outlets having good approach from MTS Company, for 42% of outlets should improve the approach and remaining 24% outlets is showing interest to start MTS product.
2. How is the service level? a. Very good b.Good c. Average d. below average
Location * Service Level Cross tabulation Service Level Very Good Good 7 6 5 8 3 1 5 20 0 15 Table: 2 Category * Service Level Cross tabulation Service Level Very Good Good Categor Good Approach 20 y Improve the 0 approach Total 20 14 1 15
Locatio n
Average 8 9 1 0 18
Below Average 5 1 5 12 23
Total 26 23 10 17 76
Total
Average 0 18 18
Below Average 0 23 23
Total 34 42 76
Chart: 2 INTERPRETATION: For the above question only 76% of retailers are responded. In that 20 outlets said that service is very good, 15 said good, 18 said average and 23 outlets said below average. The above graph shows that Service level is very good in all four areas, but in RavindraNagar & PM Palem more number of outlets has responded to below average. From the above category table the outlets come under the good approach are less than improve the approach. 42 outlets are not satisfied with the service provided by MTS. Only 34 outlets are satisfied with the approach.
3. How much recharge you sell overall in a month (All Networks)? a. <10 b. 10k-25k c. 26k-75k d.75k-1L e. 1L+ All Network Recharge@ Month 10k26K<10K 25K 75K 75k-1L >1L 8 22 6 5 0 5 5 5 23 9 4 8 43 Table: 3 8 2 2 18 1 0 0 6 6 2 2 10
Locati on
Total 41 29 13 17 100
Total
Chart: 3
AllNetworkRecharge@Month 10k26K<10K 25K 75K 75k-1L >1L Categor Good Approach y Improve the approach Interested outlets Total 7 9 7 23 14 17 12 43 Table: 3.1 6 9 3 18 2 3 1 6 5 4 1 10
Total
34 42 24 100
INTERPRETATION:
From the above graph it was clear that in all the areas more number of retail outlets
responded to the 10k-25k. Only in Arilova 60% of retail outlets having business of 10k25k also 9% of outlets having 75k-1L business. But in RavindraNagar, PM Palem, Madhurwada having the business of >1L in few outlets. In Madhurwada we can see the outlets having more business comparing with other areas.
4. What is the amount of MTS recharge you sell? a. <3k b. 4k-10k c. 11k-25k d. 26k-50k
e. 50k+
Count Location
Total
Total 26 23 10 17 76
Category * MTS recharge@ Month Cross tabulation MTSrecharge@ Month <3K 4K-10K 11K-25K 18 13 3 32 8 2 50 21 5 Table: 4.1
Total 34 42 76
Chart: 4 INTERPRETATION: From the above graph we can know that 50% outlets having less than 3k business with MTS recharge. Remaining 21% are doing above 4k and 5% outlets are doing above 11k. Out of 76 outlets only in arilova 26 outlets are doing MTS recharge and 23 outlets in Madhurwada.
In all areas 32 outlets are selling MTS recharge of less than 3k which comes under
improve the approach category. As the service were poor sales of MTS also less. Only 18 outlets come under good approach category.
5. How many GSM activations you do in a month? a. <50 b. 51-100 c. 101-200 d. 200-300 e. 300+
Count Location
Total
Total 23 18 8 2 51
GSM activations @ month Count Category Good Approach Improve the approach Interested outlets Total <50 15 12 6 33 Table: 5.1 51-100 7 6 3 16 101-200 1 1 0 2 Total 23 19 9 51
Chart: 5
INTERPRETATION: For the above question only 51 retail outlets has responded. Out of these 33 outlets are doing more than 50 activations per month, 16 outlets are doing above 50. Only two outlets are doing more than 100 activations out of 51 outlets. In these four areas only Arilova & Madhurwada are doing number GSM activations. In RavindraNagar only 2% of outlets are doing activations. In these 51 outlets 9 retail outlets are showing interested to start MTS activations.
6. How many CDMA activations you do in a month? a. <5 b. 6-15 c. 16-25 d. 25+ CDMAactivations@month <5 6-15 25+ 9 1 7 4 3 2 1 0 20 7 Table: 6 Total 1 0 0 0 1 11 11 5 1 28
Location
Total
CDMAactivations@month <5 Catogery Good Apporach Improve the apporach Interested outlets Total 8 10 2 20 Table: 6.1 6-15 6 1 0 7 25+ 0 0 1 1
Total
14 11 3 28
Chart: 6 INTERPRETATION: For the above question we got very less number of respondents comparing with GSM activations. Only 28 retail outlets are doing CDMA activations in these 20 outlets are doing more than 5 activations for a month & 7 outlets are doing above 6 activations and only one outlet we found doing 25 activations/month in madhurwada. The number of outlets in arilova and madhurwada doing CDMA activations are equal.
7. How much MTS activations you do in a month? a. <5 b. 6-15 c. 16-25 d. 25+
Location
Total
Catogery * MTSactivations@monthCrosstabulation Count MTSactivations@month <5 6-15 16-25 11 4 2 7 18 Table: 7.1 1 5 1 3 Total 17 9 26
__ Chart: 7 INTERPRETATION: For the above question only 26 retail outlets has responded out of 100. MTS activations per month are more in the Madhurwada area. In PM Palem & RavindraNagar areas we found less number of outlets doing MTS activations. In Arilova & Madhurwada numbers of outlets doing more than 5 activations are more comparing with other two areas. As the approach was poor in few areas so the activations are less.
Location * FTT@MTS Cross tabulation Count FTT@MTS Yes Location Arilova Madhurwada PM Palem RavindraNagar Table: 8 22 21 6 12 61 No 4 2 4 5 15 Total 26 23 10 17 76
Total
Catogery * FTT@MTS Cross tabulation Count FTT@MTS Yes Catogery Total Table: 8.1 Good Apporach Improve the approach 32 29 61 No 2 13 15 Total 34 42 76
Chart: 8 INTERPRETATION:
From the above graph it was clear that above 60% outlets had responded to YES. In Arilova & Madhurwada more number of outlets had said that they know about the FTT/MTFTT of MTS. In all four areas only 15 outlets dont know about the FTT. In PM Palem &Ravindranagar few outlets dont have any idea about the FTT/MTFTT offers.
Location * STDpacks@MTS Crosstabulation Count STDpacks@MTS Yes Location Arilova Madhurwada PM Palem RavindraNagar Table: 9 8 9 4 2 23 No 18 14 6 15 53 Total 26 23 10 17 76
Total
Catogery * STDpacks@MTSCrosstabulation Count STDpacks@MTS Yes Catogery Total Table: 9.1 Good Apporach Improve the apporach 14 9 23 No 20 33 53 Total 34 42 76
Chart: 9 INTERPRETATION:
From the above graph it was clear that more than 50% outlets dont have idea about the STD packs of MTS. Only 23 retail outlets know about the STD pack offers. In RavindraNagar & PM Palem areas more number of outlets doesnt know about STd offers comparing with Arilova & Madhurwada.
Location
Total
Catogery * SellDataRechargesCrosstabulation Count SellDataRecharges Yes Catogery Good Apporach Improve the apporach Interested outlets Table: 10.1 24 22 18 64 No 10 20 6 36 Total 34 42 24 100
Total
Chart: 10 INTERPRETATION: The above graph shows that 64% retail outlets sell data recharges and 36 % outlets doesnt sell data in these 4 areas. In Arilova & Madhurwada more than 20 outlets had responded YES and in PM Palem and RavindraNagar has less number of outlets who sell data recharges. Out of 100 outlets 18 retail outlets who are selling data recharges are interested to sell MTS data recharges and 22 outlets are saying the approach from MTS was poor.
11. Do you sell data cards? If yes how many (all networks)/ If no go to Q.13 a. <3 b. 4-10 c. 11-15 d. 15+ SellDataCards@month <3 4-10 11-15 6 4 5 6 1 2 2 3 14 15 Total 0 2 1 1 4 10 13 4 6 33
Location
Total
Table: 11
Chart: 11 INTERPRETATION: For the above question only 33 outlets has responded. Out of 33 retail outlets only 14 outlets are selling <3 DCs per month & 15 outlets selling 4-10 DCs. In Arilova &Madhurwadaa had more sales comparing with other areas. PM Palem having the least sales of DCs due to less number of customers.
12. Which is the brand you sell most, why? a. MTS b. RIM c. Idea d. Airtel e. TATA
f. Vodafone
Total 41 29 13 17 100
Total
RavindraNagar
0% 0% 12% Idea Airtel 88% TATA Vodafone
Chart: 12.1
Arilova
5% 2% 12% Idea Airtel 81% TATA Vodafone
Chart: 12.2
PM Palem
0% 0% 15% Idea Airtel 85% TATA Vodafone
Chart: 12.3
Madhurwada
Chart: 12.4 INTERPRETATION From the above pie charts it was clear that in all areas AIRTEL was dominated. 88% outlets having more sales in those four areas. In madhurwada all the outlets were dominated by Airtel. Next to that Idea & Tata share the market. Only in PM Palem 15% of outlets having the sale of Vodafone. In each area Airtel covered more than 80% of sales. So Airtel dominated the whole market.
13. Why are you not selling data cards? a. Not interested b. No service c. Low earning d. Other issues
NotInterested 2 1 2 0 5
Total 29 17 10 11 67
Catogery * Why Not Selling@DCCrosstabulation WhyNotSelling@DC NotIntereste NoServic LowEarnin OtherIssue d e g s Catoger y Good Apporach Improve the apporach Interested outlets 1 2 2 5 Table: 13.1 3 4 7 14 5 10 6 21 11 12 4 27
Total 20 28 19 67
Total
Chart: 13 INTERPRETATION: For the above question only 67 outlets has responded that they are not selling data cards. In those 27 outlets are facing some other issues for not selling & 21outlets are saying they had low earning on DCs. The retail outlets in Arilova & madhurwada had given all the reasons for not selling. Due to lack of approach most of the outlets are not selling DCs. In areas like PM Palem &ravindranagar having low earning on DCs.
Total 21 7 1 7 36 41 29 13 17 100
Location
Total
Total 13 23 0 36 34 42 24 100
Catogery
Total
Chart: 14 INTERPRETATION: From the above graph it was clear that 64% of outlets are willing to sell MTS data cards. Only 36 outlets had responded NO. The outlets in PM Palem & Madhurwada are showing more interest to start MTS DCs than ravindranagar. Out of 64 retail outlets 40 outlets having MTS dcs reamining 24 outlets are willing to start MTS DCs newly. Most of the outlets are suggesting to increase the approach of the product.
15. Why are you not selling MTS? a. Not interested b. No service c. Low earning d. Demo HS
Location * Why Not selling @MTS Cross tabulation Count WhyNotselling@MTS No Service Low Earning 12 6 2 20 Table: 15 Total 3 0 1 4 15 6 3 24
Location
Total
Category * Why Not selling @MTS Cross tabulation Count WhyNotselling@MTS No Service Category Total Interested outlets 20 20 Table: 15.1 Low Earning 4 4 Total 24 24
__
Chart: 15 INTERPRETATION: From the above graph it was clear that above 65% of retail outlets are not selling due no service from company only 35% are saying it is due to low earning. In Arilova & Madhurwada most of them responded that there is no service from MTS.
Location * ServiceGiven@willUsellCrosstabulation Count ServiceGiven@willUsell Yes Location Arilova Madhurwada PM Palem RavindraNagar 20 22 12 10 64 Table: 16 _ Catogery * ServiceGiven@willUsellCrosstabulation ServiceGiven@willUsell Yes Catogery Good Apporach Improve the apporach Interested outlets 21 19 24 64 Table: 16.1 No 13 23 0 36 Total 34 42 24 100 No 21 7 1 7 36 Total 41 29 13 17 100
Total
Total
Chart: 16
INTERPRETATION: From the above graph it was clear that 64% of outlets are willing to sell MTS products Only 36 outlets had responded NO. The outlets in PM Palem & Madhurwada are showing more interest to start MTS than ravindranagar. Out of 64 retail outlets 40 outlets having MTS remaining 24 outlets are willing to start MTS products newly.
SUGGESTIONS/ RECCOMENDATIONS:
The MTS products market has reached Maturity stage in India large number of Cooperatives having a variety of product range has entered the market, thus there is one way for MTS to sustain their business in the market by delivering outstanding satisfaction to their retailers, so that they can take interest in selling of MTS products. This can be done as follow MTS has a relatively good distribution network, but still company is not able to full fill the demand of outlet where the competition is high. Here company should consider on the supply of product frequently. Supply should be regular to all the outlets including those that lie in the street roads and not just in the outlets which lie on the easily accessible routes. Improve delivery schedule to provide recharges/products on time for the retailers about who claimed that MTS is not available to them on time. MTS should take proper action in order to improve the service of distribution networks therefore retailer get the supply on time. MTS should do its product promotion on a large scale to make people aware of MTS. Company should try and provide better after sales and value added services than its peers to attract new clients and retain the existing. MTS should provide more banners & posters to all retail outlets and also glow sign boards to main outlets where sales are more. MTS should conduct more promotional activities in shopping malls & also road shows to get awareness of the products. Railway stations and airports can be used for setting up kiosks for compiling a database of prospective customers. Advertising plays a major role in sales, so MTS should increase ADs by using print media, Radio & television. MTS should increase network in rural areas also as during the survey few retailers complained regarding signal.
CONCLUSION:
As we know the MTS is very big organization and had good profits in market. MTS is the market leader in other places of Andhra Pradesh; in Visakhapatnam it is trying to place strong position in market by giving tough competition to other telecom players. In next two years, MTS is expected to become the 2nd largest CDMA in India, after the Reliance and soon be in a position to overtake the Reliance as well. The survey resulted into following conclusions: The important facts which can be concluded from our data regarding the retailers survey is that they face the problem with recharge process and also advertising boards. MTS should come up with new promotional activities such that people become more aware about MTS products. Competitors selling strategy becoming a biggest problem for sales maximization Retailer benefit schemes as they achieve the target can push more subscribers and maximize sales. Retailer margin is not a problem for MTS Retailers are unhappy with MTSs advertisement offers because the company is not providing them the electronic boards in time (for new outlets), banners etc. Where others (new entrants) are doing it. So, the other entrants are capable of pushing their sales. In comparison to MTS, the other players like Airtel, Vodafone, Idea, TATADocomo provide a better availability and giving tough competition. Retailers are mostly satisfied with overall service of MTS, but to be a leader in local market MTS must use aggressive selling techniques.
2. List of Tables S.No Table no. 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Name Of The Table Sell @MTS Service Level All Network recharges @month MTS Re charges@ month GSM activations @month CDMA activations @month MTS activations @month FTT @MTS STD packs @ MTS Sell Data recharges Sell data cards Which brand sell most Why not selling @DC Willing sell @MTS dc Why not selling @MTS Service given @willusell Page no.
3. List of Charts / Figures S.No Chart No 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Name Of The Charts Sell @MTS Service Level All Network recharges @month MTS Re charges@ month GSM activations @month CDMA activations @month MTS activations @month FTT @MTS STD packs @ MTS Sell Data recharges Sell data cards Which brand sell most Why not selling @DC Willing sell @MTS dc Why not selling @MTS Service given @willusell Page no.
4. Bibliography* Books: Kotler, Philip. (1999) `Marketing Management, Prentice Hall of India Pvt. Ltd., Kothari, C.R (2001) `Research Methodology, Vishwa Publication Websites: www.mtsindia.in http://www.Sistema.com/businesses/telecom/shyam www.Sistemashyamteleserviceslimited.com Magazines: India Today Business World
5. Annexure
Outlet Name: Location: Mob No: Landmark: MTS No:
2. How is the service level? a. Very good b.Good c. Average d. below average Remarks:
3. How much recharge you sell overall in a month (All Networks)? a. <10 b. 10k-25k c. 26k-75k d.75k-1L e. 1L+
4. What is the amount of MTS recharge you sell? a. <3k b. 4k-10k c. 11k-25k d. 26k-50k e. 50k+
5. How many GSM activations you do in a month? a. <50 b. 51-100 c. 101-200 d. 200-300 e. 300+
6. How many CDMA activations you do in a month? a. <5 b. 6-15 c. 16-25 d. 25+
7. How much MTS activations you do in a month? a. <5 b. 6-15 c. 16-25 d. 25+
11. Do you sell data cards? If yes how many (all networks)/ If no go to Q.13 a. <3 b. 4-10 c. 11-15 d. 15+
12. Which is the brand you sell most, why? a. MTS b. RIM c. Idea d. Airtel e. TATA f. Vodafone Remarks:
13. Why are you not selling data cards? a. Not interested b. No service c. Low earning d. Other issues Remarks:
15. Why are you not selling MTS? a. Not interested b. No service c. Low earning d. Demo HS