You are on page 1of 194

PROJECT REPORT

On

MARKETING STRATEGIES OF VODAFONE

SUBMITTED TO:

PROF. SWATI MITTAL

SUBMITTED BY: PULKIT PUNJ 9999962559

PREFACE

The project aims at understanding the Marketing strategies at Vodafone and


its impact on the perception of Vodafone Cellular Services.

Research has demonstrated conclusively that it is far more costly to win a


new customer than it is to maintain an existing one. And there is no better way
to retain a customer than to exceed his expectation. The focus of my research
was to know the marketing strategies of Vodafone. Finally the results of the
research verify the fact that marketing plays a major role in fetching new
customers and retaining old customers as well , but the marketing should be
positive and not misleading. This also expands the business to new horizons.

ACKNOWLEDGEMENT

It is well-established fact that behind every achievement lies an unfathomable


sea of gratitude to those who have extended their support and without whom
the project would never have come into existence.

I express my gratitude to AMITY, Noida for providing me an opportunity to


work on this project.

Also, I express my gratitude to Prof. Swati mittal for their kind cooperation.

CONTENT

Preface

ii

Acknowledgement vii

Introduction 1

Company Profile Vodafone

Service of Vodafone

Promotional Strategy

28

Market Situation

29

Competitive Situation

29

Market Segmentation

31

Target Market Segmentation

31

Positioning 32

Product Policy and Planning

32

Vodafone Marketing Orientation

35

Marketing Strategy Adopted by Vodafone

Distribution 38

LITERATURE REVIEW

41

Telecommunication Market in India


Indian Cellular Market

47

GSM Market in India

48

Methodology

Objective

55

55

Research Methodology
Limitation

55

55

Finding and Analysis

SWOT Analysis

76

56

41

36

Conclusion 77

Recommendation 79

Bibliography

81

INTRODUCTION

COMPANY PROFILE VODAFONE

Vodafone Essar, previously Hutchison Essar is a cellular operator in India that covers 16
telecom circles in India. Despite the official name being Vodafone Essar, its products are
simply branded Vodafone. It offers both prepaid and postpaid GSM cellular phone
coverage throughout India and is especially strong in the major metros.

Vodafone Essar provides 2G services based on 900Mhz and 1800Mhz digital


GSM technology, offering voice and data services in 16 of the country's 23
licence areas Vodafone Essar is owned by Vodafone 52%, Essar Group 33%,
and other Indian nationals, 15%.

On 11 February 2007, Vodafone agreed to acquire the controlling interest of


67% held by Li Ka Shing Holdings in Hutch-Essar for US$11.1 billion, pipping
Reliance Communications, Hinduja Group, and Essar Group, which is the
owner of the remaining 33%. The whole company was valued at USD 18.8
billion. [2] . The transaction closed on 8 May 2007.

Previous brands

In December 2006, Hutch Essar re-launched the "Hutch" brand nationwide,


consolidating its services under a single identity. The Company entered into
agreement with NTT DoCoMo to launch i-mode mobile Internet service in
India during 2007.

The company used to be named Hutchison Essar, reflecting the name of its previous
owner, Hutchison. However, the brand was marketed as Hutch. After getting the
necessary government approvals with regards to the acquisition of a majority by the

Vodafone Group, the company was rebranded as Vodafone Essar. The marketing
brand was officially changed to Vodafone on 20 September 2007. In Mumbai, it was
earlier known by the name Orange, a brand that used to be marketed by its former

owner, Hutchison. Still earlier it was known as Max Touch and AceTel even
before that

On September 20, 2007 Hutch becomes Vodafone in one of the biggest brand
transition exercises in recent times.

Vodafone Essar is spending somewhere in the region of Rs 250 crores on this highprofile transition being unveiled today. Along with the transition, cheap cell phones
have been launched in the Indian market under the Vodafone brand. There are plans
to launch co-branded handsets sourced from global vendors as well.

A popular daily quoted a Vodafone Essar director as saying that "the objective
is to leverage Vodafone Group's global scale in bringing millions of low-cost
handsets from across-the-world into India." While there is no revealing the
prices of the low-cost Vodafone handsets, the industry is abuzz that prices
might start at Rs 666, undercutting Reliance Communications' much-hyped
'Rang Barse' with cheap handsets beginning at Rs 777.

Meanwhile, Vodafone Essar sources said there would be no discounts or


subsidized handset offers -- rather handset-bundled schemes for customers.
Incidentally, China's ZTE, which is looking to set-up a manufacturing unit in the
country, is expected to provide several Vodafone handsets in India. Earlier this
year, Vodafone penned a global low-cost handset procurement deal with ZTE.

Growth of Hutchison Essar (1992-2005)

In 1992 Hutchison Whampoa and its Indian business partner established a company
that in 1994 was awarded a licence to provide mobile telecommunications services in
Mumbai (formerly Bombay) and launched commercial service as Hutchison Max in
November 1995. Analjit Singh of Max still holds 12% in company.

By the time of Hutchison Telecom's Initial Public Offering in 2004, Hutchison


Whampoa had acquired interests in six mobile telecommunications operators
providing service in 13 of India's 23 licence areas and following the completion of the

acquisition of BPL that number increased to 16. In 2006, it announced the acquisition
of a company that held licence applications for the seven remaining licence areas.

In a country growing as fast as India, a strategic and well managed business


plan is critical to success. Initially, the company grew its business in the
largest wireless markets in India - in cities like Mumbai, Delhi and Kolkata. In
these densely populated urban areas it was able to establish a robust
network, well known brand and large distribution network -all vital to long-term
success in India. Then it also targeted business users and high-end post-paid
customers which helped Hutchison Essar to consistently generate a higher
Average Revenue Per User ("ARPU") than its competitors. By adopting this
focused growth plan, it was able to establish leading positions in India's
largest markets providing the resources to expand its footprint nationwide.

In February 2007, Hutchison Telecom announced that it had entered into a


binding agreement with a subsidiary of Vodafone Group Plc to sell its 67%
direct and indirect equity and loan interests in Hutchison Essar Limited for a
total cash consideration (before costs, expenses and interests) of
approximately US$11.1 billion or HK$87 billion.

1992: Hutchison Whampoa and Max Group established Hutchison Max

2000: Acquisition of Delhi operations Entered Calcutta and Gujarat markets


through ESSAR acquisition

2001: Won auction for licences to operate GSM services in Karnataka, Andhra
Pradesh and Chennai

2003: Acquired AirCel Digilink (ADIL - Essar Subsidiary) which operated in


Rajastan, Uttar Pradesh East and Haryana telecom circles and renamed it
under Hutch brand

2004: Launched in three additional telecom circles of India namely 'Punjab',


'Uttar Pradesh West' and 'West Bengal'

2005: Acquired BPL, another mobile service provider in India

Hutch was often praised for its award winning advertisements which all follow a
clean, minimalist look. A recurrent theme is that its message Hello stands out
visibly though it uses only white letters on red background. Another recent
successful ad campaign in 2003 featured a pug named Cheeka following a boy
around in unlikely places, with the tagline, Wherever you go, our network follows.
The simple yet powerful advertisement campaigns won it many admirers

Vodafone subscriber base

The Vodafone subscriber base according to COAI - Cellular Operator


Association of India as of March 2008 was:
Delhi - 3,216,769

Mumbai - 3,451,567

Chennai - 1,174,589

Kolkata - 1,974,177

Maharashtra & Goa - 2,610,389

Gujarat - 6,010,594

Andhra Pradesh - 2,601,458

Karnataka - 2,850,346

Tamil Nadu - 3,180,820

Kerala - 2,001,133

Punjab - 1,645,501

Haryana - 1,282,208

Uttar Pradesh (West) -2,858,429

Uttar Pradesh (East) -3,508,355

Rajasthan - 2,934,598

West Bengal & Andaman and Nicobar - 2,825,310

The total is 44,126,243 or 22.93% of the total 192,355,939 GSM mobile connections
in India till March 2008. Vodafone does not operate in Assam, Bihar, Himachal
Pradesh, Jammu & Kashmir, Madhya Pradesh, Orissa and the North Eastern States

Vodafone Hutch Deal (Including Quote & unquote)

Britain's Vodafone announced on February 11 that it had decided to pay $11.1


billion in cash and assume $2 billion in debt to buy a 67% stake in Hutchison
Essar, one of India's largest mobile operators with more than 22 million
subscribers. Vodafone's purchase of the controlling interest in Hutchison Essar -or Hutch, as it is commonly called -- from Hong Kong-based shipping and real
estate baron Li Ka-Shing values the company at nearly $19 billion, which is twice
as much as the first round of bidders in January thought it was worth.

Four days later, the Aditya Birla group's Idea Cellular -- another large mobile
phone services provider with 12.4 million subscribers -- found more than $27
billion in investor money bidding for its stock during the company's initial
public offering, which had intended to raise some $480 million. The IPO was
oversubscribed by 57 times, according to media reports.

As both transactions show, India's mobile phone market is red hot -- which
begs the question whether it is too hot. Are these enormous valuations
justified by the market's growth potential? Their view is that while it might
appear that these transactions are overvalued, the market has lots of growth
potential. As such, a shakeout -- if it occurs -- is unlikely in the near future.

The growth numbers explain most of the market's fervor. India's cell phone user
population doubled during the past year to 150 million at the end of 2006. More than
6 million new subscribers are signing up for mobile services each month, making
India the world's fastest growing mobile market. Cell phones are not just a way to
keep in touch with loved ones in a country that loves to talk, but in a booming
economy they also become workstations for millions in India's unorganized sectors.
Vodafone's India-born CEO Arun Sarin said in a speech in Barcelona recently that he
expects the 150 million subscriber base -- which represents a penetration rate of just
13% -- to grow to 500 million in a few years. Much of this growth is expected to come
from more than 600,000 Delhis where millions of Indians live. "We are really excited
to move into the rural areas," Sarin said in his speech. "Whenever we get into

these rural areas, we find people love to talk. They light up our base stations
immediately."
Wharton marketing professor Jagmohan Raju says enterprise valuations at the
level of Vodafone's payment for Hutchison Essar might not appear to be justified
using conventional analysis tools, but he agrees with Sarin that most of the
growth in the future will come from the lower end of the market in rural India. "The
way to justify these valuations is not to base them on how many subscribers [the
acquiring company plans] to have. The numbers are justified based on a
prediction of higher value-added services, and also some sense of how mobile
phones can be used for marketing. Will the mobile handset be a device that will
be used to send ads -- perhaps video ads -- to subscribers? Can you add more
services and more value at the lower end, with somebody else subsidizing the
cost of the phones?" He says these value-added services could go beyond ring
tones and text messaging to bringing television and advertising to handsets.

A.T. Kearney's Indian operation, believes that Vodafone's Hutch deal is good for
shareholders of both companies as well as consumers. "This is a deal priced to
perfection," he says. "It is a good strategic fit all around." this transaction secures
Vodafone's position as a major player in the global telecom industry and gives the
company a strategic presence in Asia. Like other global telecom firms, Vodafone
is looking for growth in Asia because markets like the U.S. -- which has an 80%
penetration rate for cell phones -- offer little growth potential.

This deal is also a "huge windfall for the Hutch guys,". "They could not have wished
for anything more." He believes that Vodafone will now go about trying to increase its
market share from 15% at present to at least 25% in the next few years. In the
process, Vodafone will face strong competition from Indian mobile firms such as
Reliance Communications. Price wars are likely as the battle heats up, and these will
ultimately benefit Indian consumers. "They will get a better global franchise and
access to technology and features as India becomes the tech battleground,.

Significantly, Vodafone has signed a deal with India's biggest mobile operator, Bharti
Airtel, to share the costs of infrastructure development in rural areas. "In the
developed world, you have guaranteed power supply, but [in India] the power supply

to your base station battery is uncertain, and that adds to the cost,". "The fact that
Vodafone and Bharti Airtel are going to share base stations in rural areas is a
good sign, because it has a multiplier effect." He sees the same underlying
fundamentals driving the record subscriptions for Idea Cellular's IPO. "These are
highly correlated," he says. "Those are mind-boggling numbers, and further
validate the growth story for mobile phone services in India."

Hardly anyone questions Vodafone's optimism about the growth potential of


mobile telephony in rural India. In fact, Sarin has expressed a desire to also
acquire the 33% stake held by Mumbai's Essar group, and if that doesn't pan out,
he is keen on forging a successful partnership with the Ruia family that runs the
group. "Given that technological uncertainty, rapid change and disruptive
innovation are a way of life in the mobile industry, it is almost certain that
companies such as Vodafone are making big ICT (information, communications
and technology) investments factor in the intangibles. He the real option value"
for Vodafone to gain a presence "in the world's hottest market" cannot be
underestimated. "Investors are placing a premium on being there," he says. "ICT
investments tend to pay off in new and unexpected ways over time for those who
make the initial investments and have the ability to respond in an agile fashion."

According to Boston Consulting Group in New Delhi says that in the M&A world, "like
beauty, value lies in the eyes of the acquirer," and the valuation arithmetic plays out
differently for each bidder. "That is why it is often difficult to say that there is a
premium paid on the discounted cash flows of the acquired entity. The premium is
typically based on two things: One is the synergies you can extract and the second is
the option value or the strategic value you place on the business." He adds that it is
inconceivable for a global player to be locked out of the Indian market. "At the end of
the day -- not now, but three years from now as per CEO of the Vodafone

Customer Service

Clearly, Vodafone will face me-too competitors as it attempts to increase revenue and
profitability with value-added services in the face of the lower ARPUs (average
revenue per user) that industry analysts predict. ARPUs for Indian mobile phone
service providers range from $10 to $20 a month, and Hutchison Essar currently
occupies the top slot. So where does its competitive edge lie? Britain, Vodafone sets
itself apart from the competition with "above-average customer service." He
describes Indian customer service levels as "abysmal" and notes that Vodafone
could use its strengths in that department to increase ARPUs from higher-end
customers and reduce customer churn. "It's about training your work force as you
manage growth, and Vodafone has that capability, "Any player capable of doing that
in the current Indian scenario will have to attract and retain a fickle and under-trained
workforce. If it is executed well, this strategy can lead to significant rents." Vodafone's
edge here, he says, could be that its service levels will be "hard to replicate" for
Indian mobile service providers as "it may not be part of their DNA."

One of the key issues in valuations is the reliability of revenue recognition, and that
will come with more post-paid subscribers than prepaid," he says. "The U.S. market
has more post-paid subscribers than prepaid ones." Market estimates put prepaid
mobile phone users in India at about 80% of the total. The gains are manifold for
providers that are able to win over more post-paid users. "Post-paid services are
easier to manage, and have fewer intermediaries," he says. "Right now, companies
have to pay huge margins to retailers in India who sell these prepaid cards."

Vodafone will face with its acquisition is ensuring synergies and integration
across the two companies. "This is where the rubber meets the road. The highgrowth, high-volume and low-margin Indian market is significantly different from
the rest of Vodafone's acquisitions. Vodafone will do well to emulate the lean
model of [Bharti] Airtel, but it also has the opportunity to segment the consumer
base and exercise price and service quality differentiation."

The Vodafone deal is a precursor of more big-ticket transnational deals in the Indian
marketplace. "With Indian firms becoming aggressive and attacking the incumbents in
their home markets, the leaders in those markets will also try to make big moves. We

have seen that happen in the business process outsourcing industry (such as Citigroup,
IBM and GE expanding their Indian presence), and we will see it happening in IT too."
Who moves first in these strategic wars before the other guy blinks will be decisive,
Bhattacharya adds. "One option is to wait and get attacked. Or they [foreign companies]
will look at defending themselves by launching their own attack."

As competition for India's mobile market heats up, a shakeout -- and possibly
mergers -- is likely, but A.T. Kearney's believes this will not happen anytime soon.
"The market is still in its early stages," he says. "Penetration is still low, and the
cell phone has become accessible technology for everyone. It is perhaps the one
device that has broken the caste/economic barrier with ease." predicts that
eventually India's penetration rates could rise as high as those in the U.S., though
it is hard to predict how long that might take. "The market will grow and rural
penetration will continue for the next three or four years," he says. Once that
market is saturated, "a shakeout is natural, but that will happen a few years out."
Until then, though, there should be enough room for India's mobile services
operators to grow without stepping on one another's toes.

SERVICES OF VODAFONE

Vodafone Prepaid Cell phone connection

Go mobile with a Vodafone Prepaid cell mobile phone and control how much you
spend with the best Prepaid cell phone tariff plan. Buy a special Prepaid mobile
handset for your Vodafone Prepaid cellphone connection with our Prepaid mobile
handset offers. To keep talking without any talktime or validity hassles make use
of our flexible recharging options for your Vodafone Prepaid SIM cards: Prepaid
recharge cards, eTopUp and Direct Top-Up. Its easy to find a Prepaid recharge
top up too: weve got Prepaid outlets everywhere, so that you can stay connected
wherever you are. And thats not all you can also subscribe to our unique
Prepaid cellphone services and Prepaid mobilephone offers and make the most
of your Vodafone Prepaid SIM cards in India.

Prepaid mobile phone tariff plan

Reach out to the world with a Vodafone Prepaid SIM card without worrying about
mobile Prepaid recharge minutes and Prepaid phone rates. Select a Prepaid mobile
phone tariff plan that works for you. Choose your Prepaid mobile phone tariff plan

Prepaid phone services

Subscribe to Vodafones unique Prepaid cellphone services and make the


most of your Vodafone mobile phone. For our Prepaid cellular services.
Bonus Cards

Charge your Prepaid phone and enjoy slashed Prepaid phone rates with
Bonus Cards for your Vodafone Prepaid cellphone tariff plans.

Vodafone Postpaid

Go Vodafone with a new Vodafone Postpaid connection and talk without worrying
about your bill. Become a Vodafone Postpaid user with a Postpaid mobile handset for
your SIM by making use of Vodafones mobile handset offers. Make the most out of
every penny you spend by choosing the right Vodafone Postpaid talkplan. And if you
want to know which plan suits your usage best, ask us well be happy to help.

Whats more you can also subscribe to our Vodafone Postpaid offers and
reduce expenses even more. Take a look at the various services we have for you
and use your phone for many more than just making calls. And when it comes to
paying you bill thats easy too! Weve got a wide variety of Vodafone Postpaid bill
payment options. Choose the payment option that works best for you.

World Calling Cards

Save up to 30% on your ISD & STD calls with World Calling Card from
Vodafone for your Vodafone mobile phones. World Calling Card from
Vodafone is a Prepaid long distance calling card that you can use with your
Vodafone Prepaid and Postpaid mobile phones to make ISD & STD calls.
Thats right you dont need individual ISD calling cards and STD calling
cards anymore. With the help of this Prepaid World Calling Card, you can
keep a tab on your long-distance call expenses. Plus no security deposit.

Its easy to buy World Calling Cards in India. World Calling Cards are available
at your nearest Vodafone Store, Vodafone Mini Store or at any shop that
displays the World Calling Card sign.

World Calling Card rates

Make the most of your Vodafone mobile phone while making long distance calls
with the special World Calling Card rates meant to help you save money. Check
out World Calling Card rates International Prepaid calling cards Scratch the silver
foil on the cell phone calling card for India to get your secret 12-digit PIN. Dial the
toll free number on the back or 50118 / 50218 and enter the PIN from your
Prepaid World Calling Card. To make an STD call with your Prepaid mobile phone
card, dial 0 followed by the STD code and then the phone number.

Gulf Calling Card

Now you can call the Gulf at the lowest possible calling card rates with the
best Prepaid phone card for the Gulf.

Vodafone Home Calling Card

Heres a way you can save on your international roaming bill while calling home
use the Prepaid Home Calling Cards from Vodafone to call to India to anywhere else
in the world while travelling abroad. Vodafone Home Calling Card is a Prepaid calling
card that allows you to make calls from landlines, PCOs & mobile phones from over
100 countries. And helps you save up to 90% as compared to International Roaming
charges! So talk more, spend less and always stay connected.

Home Calling Card rates

Make the most of your Vodafone Prepaid & Postpaid cellphone while making
long distance calls with the unique Home Calling Card rates and save money.
Check out the Home Calling Card rates Need help with your Vodafone
Prepaid Home Calling Card for India?

Vodafone PCO

Want to start making some money? Install a Vodafone PCO in your house or shop,
and start earning today with fixed cellular terminals. Its easy to install, maintain and
use and provides uninterrupted service. It doesnt even take up that much space!

Vodafone Handy phone

Introducing the landline thats loaded with all the features of a cell phone including low call rates. And Vodafone Handyphone arent that expensive
either. You can make one yours for as little as Rs 1999.

Key features:

Calls to any 3 Vodafone numbers @ 20p / min

Calls to all local mobile phones @ 40p / min

Free local & STD calls every month

Services of Vodafone Callertunes

Put a smile on your callers face even before you take the call. With Vodafone
Callertunes service, you can play your favourite song for all your callers instead of the
normal tring tring. Choose your mobile Callertune from a wide variety of genres. Set

Cricket Callertunes to play live cricket scores. If youre busy with something,
let the world know by setting a Busy Callertune. You can also copy a friends
Callertune by pressing * while the song is playing.
Find out more about Vodafone Caller tunes

Go to Vodafone Callertune selection and Callertune activation song codes lists

Vodafone Music Station

Now your Vodafone mobile phone can replace your favourite FM Radio
Station with Vodafone Music Station - your personal mobile music world! Find
out more about Vodafone Music Station

Ringtones

Make your phone sing your favourite tunes for you every time it rings with
Vodafone Ringtones for your mobile phone. Take your pick from monophonic
Ringtones, mobile polyphonic Ringtones, latest Bollywood MP3 Ringtones,
funny Ringtones, Hindi music Ringtones, true tones Ringtones, real tones
Ringtones, devotional Ringtones and lots more.

Themes, Wallpapers & More

Create your own mobile wallpapers, just the way you want them. You can also
download mobile wallpapers, themes and more by choosing from a wide
range of categories.

Full Song Download

Your Vodafone mobile phone can also be used for cool music downloads. Just
download full songs - from the latest chartbusters to your favourite golden
oldies. Find out more about Vodafone mobile music downloads

SMS Tones

Ring in every message you get with a message alert tune of your choice. Find
out more about SMS Ringtones for your mobile

Background Music

Make your conversations more interesting. Let music play in the background
that suits the mood, the occasion or simply the person you are. Find out more

3D Wallpapers

Have fun in 3D. Download lifelike wallpapers for your phone. Find out more

Logos & Picture Messages

Jazz up your phone with some super cool logos and picture messages. Find
out more about downloading logo icons & picture messages

Videotones

Dont just hear your favourite song every time your phone rings; watch it too.
Find out more about downloading Videotones

Astrology

Demanding, chilled out, auspicious or fun-filled? Your Vodafone mobile phone


knows how your day is going to be. Find out more daily forecasts on your
Vodafone mobile phone

Live astrology on your Vodafone mobile phone

Get in touch with the astrologer of the new age. Call him for an instant
appointment through your Vodafone mobile phone.

Wondering which way the door should face? Log on to m-Guru on Vodafone
live! for vaastu and feng shui tips.

Rahukal & shubhkal

Find out if this very moment is auspicious or not, with your Vodafone mobile
phone. Just SMS.

Panchang

Match your best times ahead of time according to ancient Vedic astrology with
your Vodafone mobile phone.

Chogadia

Be successful in everything you do. And ensure you do it at the right time, with
your phone.

Bill info

You can get your Vodafone bill in your inbox. Or hear it on your phone. You can
even choose the language it comes in. And do a lot more, all through your phone.

EBill

Get your Vodafone bill in your inbox, every month. Find out more about
Vodafone EBill

Itemised billing

Keep an eye on your phone usage with a detailed billing statement. Find out
more about itemised billing

My Vodafone bill

Got questions about your bill? Get the answers anytime you need.

Vernacular bills

Get your Vodafone bills in your language.

Duplicate bill

Log on to My Vodafone to request a Vodafone duplicate bill.

Payment centres

Find out which Vodafone payment centre is closest to you.

Devotional Bible in mobile

Read the Bible on your Vodafone mobile phone whenever you like. Just send
an SMS and get to read inspiring verses right on your phone screen Find out
more about Bible in your Vodafone mobile phone.

Gurbaani

Turn your mobile phone into a virtual Gurdwara. Just dial 390 and listen to the
Gurbani live anytime, anywhere.

Devotional - Pope

Get the daily quotes from His Holiness Pope Benedict XVIs on your mobile phone.

Bhaktisagar

Chasing materialistic dreams in this fast-paced world? Snatch a moment of


peace dial 389 for Bhaktisagar on your Vodafone mobile phone.

Osho

Know more about Oshos life and teachings on your Vodafone mobile phone.

Vodafone Devotional Alerts

Log on to Vodafone live! and click on the Spiritual link from the Vodafone live
menu to access a host of services.

Dial-in services

Everything you need is just a call away, when you have Dial-in services from
Vodafone by your side.

Live Counseling

Get counseling on studies, business & more. Find out more about personal
counselling on your Vodafone mobile phone

Dial-a-bouquet

Theres no better way to say you care than with flowers. And no easier way to
do it, than through Vodafone. Find out more about dial-a-bouquet

Live astrology

Hear it first hand from an astrologer. Find out more live astrology on your
Vodafone mobile phone

Dial-a-pizza services

Forget those lengthy pizzeria numbers. All you need is your Vodafone mobile
phone. Find out more about Dial-a-pizza services

Music Card

A new way to dedicate a song to your friends.

Ask me

Got a question? Ask us.

Airlines

Travelling by air? Get all your flight information on flight scheduling on your
Vodafone mobile phone.

Entertainment Movies

Catch the latest blockbuster in town with friends. Get latest movie reviews,
movie tickets and showtimes on your Vodafone mobile phone.
Music

This one is for all us music lovers. Get the latest music videos, right from
movies to rock, mobile karaoke and much more, all on Vodafone live!

Humour

Get rib-tickling jokes on your mobile and SMS joke messages to your friends
to brighten up their day. Read more about jokes on your mobile

Dating

"Do you know whatd look good on you? Me."

Forget those lame pick-up lines. SMS Chat to 52428. Register your nickname
and enter the chat room of your choice and make new friends.

Chat Service

Find a friend with Chat Service on your Vodafone mobile phone.

EDGE on Vodafone

Experience the next level of technology on your Vodafone mobile phone with
Vodafone EDGE services. Get ready for rich videos, clear and crisp audio and
faster downloads. Find out more about

Games

Challenge yourself with over 400 Java games for mobiles phone on Vodafone live!

Television

Staying home on a lazy day? Get the latest TV listings on your Vodafone
mobile phone. Or watch your favourite programs right on your phone.

Vodafone Contests

Play mega-size mobile contests or easy SMS-based fun mobile contests and
win loads of prizes! Only on Contest Zone.

Find out more about Vodafone Contests

Visual Radio

Tune into Visual Radio for a completely new radio experience.

Vodafone Alerts - Entertainment

Get all the masala from Bollywood, interesting facts, beauty and health tips,
latest updates on music and lots more.

Finance

Stock, forex & bullion

Keep a tab on the ups and downs of the markets with stock quotes, market
news on your Vodafone mobile phone.

Vodafone mobile banking

Need to visit your bank? Switch on your Vodafone mobile phone.

Mail Messaging BlackBerry from Vodafone

Get your hands on the BlackBerry smartphone the worlds most desired
integrated communication device with the Vodafone advantage. Subscribe to
the BlackBerry Enterprise solution and move your work out of your office. Use
the BlackBerry Internet Service and stay in touch with colleagues, family and
friends from anywhere, anytime.

Vodafone Mail

Want to check your mails on mobile from wherever you are? Vodafone will
make it possible for you.

Yahoo! Mail & Messenger on mobile

Never lose touch with your Yahoo! buddies even while youre on the move.

MSN @ Vodafone

Stay connected with MSN 24/7, only with MSN Messenger on your Vodafone
mobile phone.
Rediff & Indiatimes

Check your Rediff & Indiatimes mail on your Vodafone mobile phone.

SMS

Send short and sweet SMS text messages from your Vodafone mobile phone
to your friends.

SMS Chat

Chat non-stop with your friends on your Vodafone mobile phone.

Vernacular SMS

Reach out to your friends and loved ones with an SMS in your language.

Group messaging on mobile

Want to send festival greetings to all your friends at one go? Find out more
about group messaging on your

Miscellaneous Help

To get a list of services available on 56789, SMS HELP to 56789 (Rs 3 / SMS)

Dictionary services on your Vodafone mobile phone

SMS DICT < your word> to 56789 (Rs 3 / SMS) Or log on to Vodafone live! on your
Vodafone GPRS mobile phone, go to Info services section and click on Dictionary.

STD / ISD codes on your Vodafone mobile phone

To find an STD code, SMS STD < place in India > to 56789, Eg: STD Mumbai To find
an ISD code, SMS ISD < country > to 56789, Eg: ISD Singapore

Charges: Rs 3 / SMS

News and updates News


How did Sachin do in his latest match? Is the market bullish? Whats the weather
update for your city? Stay up-to-date with your Vodafone mobile phone.

Finance

Keep up with the fast changing world of finance with business and finance
news while youre on the move.

Vodafone FLASH!

Have non-stop fun with news, live cricket score, Bollywood quizzes, trivia and
lots more. All live on your Vodafone mobile phone.

Vodafone Alerts

Get live breaking news, business news, stocks, astro alerts, sports news, tech
news & lots more on your Vodafone mobile phone.

Sports

Get the latest sports scores, match schedules, sports updates, player profiles, videos,
pictures, Ringtones and much more - all on your Vodafone GPRS mobile phone.

Sports

Cricket Alerts on your Vodafone mobile phone

News from the cricket arena Live cricket updates on your Vodafone mobile phone

Trivia

Little known facts about people and places that makes cricket your sport of choice

Games

Strike a six in your personal cricket stadium. Download cricket games and
play a gentlemans game or two

Ask the Expert

Browse through fascinating Q&A sessions on the message board or tack up a few
queries and comments yourself. Go on, prove youre an expert yourself to the world.

Football

Get all the football news on your Vodafone mobile phone from both, on and
off the football field. Stay informed about the most popular sport in the world.

TARIFF STRUCTURE

Prepaid Tariffs

Airtel Prepaid Ready Cellular Card and Recharge Cards are available, all over the
city at over retail outlets including 24-hour outlets. Airtel Prepaid Ready Cellular Card

and Recharge Cards are available, all over the city at over retail outlets including 24hour outlets.

Vodafone Prepaid Regular

449 SUK

Pulse Rate

60 sec

Price of Pack (Rs.)

Rs.449

Free Airtime on Pack (Rs.)


Nil

Incoming Calls (Rs.)

Free while in home network

Vodafone
GSM / CDMA
Landline / WLL

(10 Digit)

LOCAL RATES (Rs./min)


Rs.1.20
Rs.2.00

Rs.2.40

STD RATES (Rs./min)

Rs.2.75
Rs.2.75
Rs.2.75

ISD (Rs./min)

USA,

Canada,
Europe
(Fixed
Rs.6.40

Line), Australia, Singapore, Hong

Kong,
Thailand,
Malaysia,

Indonesia, New Zealand.

Gulf,
Europe (Mobile),

SAARC
Rs.9.20

countries, Africa & Rest of the

world

Cuba, Sao Tome & Principe,


Rs.40.00

Guinea Bissau,
Diego
Garcia,

Nauru, Solomon Islands, Vanuatu,

Cook
Islands, Tuvalu,

Tokelau,

Norfolk Island, Sakhalin

SMS (Rs.)

Local

Rs.1.20

National

Rs.2.00

International

Rs.5.00

Other Details

*Rs 50 Local Vodafone-Vodafone Mobile talk time per month for 6 months

* First month Vodafone-Vodafone credit within 72hrs of activation & balance credit

by 1st week of every month)

*The SMS charge as applicable is per 160 characters * Validity- 24 months.

POSTPAID

Vodafone Postpaid allows you to choose from a variety of affordable talk plans,
convenient payment options and host of rich features. So get set to enjoy a world of
limitless possibilities!

Reference Tarif Packages (RTP)

ON TIME CHARGES

Activation Charges
Rs. 600

Membership Fee
NA

Security Deposit
Rs. 1000

MONTHLY CHARGES (FIXED)


Rs. 524

Bill plan Charge


Rs. 425

Monthly Rental
Rs. 99

Clip
NA

MONTHLY CHARGES (OPTIONAL)

Clip
Rs. 99

Vodafone
GSM /
Landline /

CDMA (10
WLL

Digit)

Local Rates
Rs. 1.99
Rs 1.99
Rs 1.99

STD RATES

50 200 Km

200 500 Km

500 + Km

ISD

USA, Canda, Europe (Fixed Line),


Rs. 7.20
Austalia, Singapore, Hong Kong, Thailand,

Malaysia, Indonesia, new Zealand

Gulf, Europe (Mobile), SAARC Countries,


Rs 9.99
Africa & Rest of the world

Cuba, Sao tome & Principle, Guinea


Rs. 40.00
Bissau, Diego Garcia, Nauru, Solomon

Islands, Vanuatu, Cook Island, Tuvalu,

Tokelau, Norfolk Island, Sakhalin

SMS

Local
Rs. 1.50
National
Rs. 2.00
International

Rs. 5.00
Value Added Services (Rs.)
Rs. 3.00
Vodafone One Standard 150

ONE TIME CHARGES

Activation Charges
Rs 250
Membership Fee
Rs 250 (Converts into security after 24

months)
Security Deposit
NA
MONTHLY CHARGES (FIXED)
Rs. 150
Bill Plan Charge
Rs. 51
Monthly Rental
Rs. 99
Clip
NA
MONTHLY CHARGES (OPTIONAL)

Clip
Rs. 50
Bissau, Diego Garcia, Nauru, Solomon

Islands, Vanuatu, Cook Islands, Tuvalu,

Tokelau, Norfolk Island, Sakhalin

SMS

Local
Rs 1.50
National
Rs 2.00
Intentional
Rs. 5.00
VAS
Rs. 3.00

This Bill Plan is also available under Advance Rental of Rs. 900 for 2 years.

Local Pack

Vodafone to other local mobiles (non Vodafone) At Rs 1 / min

Monthly rental Rs 25 per months/-STD Pack

Airtel to other mobiles (non Vodafone) & fixed lines nos. at Rs 2 / min.

Monthly rental Rs 75 per month/-

Special offer for Vodafone Telephone service customers for availing

Vodafone Mobile services

If you already have Vodafone Telephone service, you can buy a new Airtel Mobile
connection under Vodafone One Standard 150 Plan.

Benefits:

Non security deposit.

No membership / activation fee

Enjoy calls to your Airtel fixed line no. at just 60 P / min.

Monthly rent of Rs 25 for reduced call rates to your Airtel fixed line has been waived
off for 1 year.

For details, call us 516-12345

Advance Rental benefits (1year scheme)

Pay an advance rent of Rs 999 and enjoy Vodafone One Standard 150 plan at Zero
monthly rental for one year.
Advance rental of Rs 999 gives you a rental discount of Rs 150 every month for the
next 2 months. All other options and charges are as per the existing Vodafone One
Standard 150 Plan.

Vodafone one Standard 249

ONE TIME CHARGES

Activation Charges
Rs 250
Membership Fee
Rs 250 (Converts into security after 24

months)
Security Deposit
NA
MONTHLY CHARGES (FIXED)
Rs. 249
Bill Plan Charge
Rs. 150
Monthly Rental

Rs. 99

Clip
NA

MONTHLY CHARGES (OPTIONAL)

Clip
Rs. 50

Vodafone
GSM
/
Landline /

CDMA
(10

WLL

Digit)

LOCAL RATES
Re. 1.00
Rs. 1.25

Rs. 1.25

STD RATES

50-200Km
Rs. 2.00

Rs. 2.40

Rs. 2.40

200 500 Km
Rs. 2.00
Rs. 2.40

Rs. 2.40

500 + Km
Rs. 2.00
Rs. 2.40

Rs. 2.40

ISD

USA, Canda, Europe (Fixed Line),


Rs. 7.20

Austalia, Singapore, Hong Kong, Thailand,

Malaysia, Indonesia, new Zealand

Gulf, Europe (Mobile), SAARC Countries,


Rs 9.99

Africa & Rest of the world

Cuba, Sao tome & Principle, Guinea


Rs. 40.00

Bissau, Diego Garcia, Nauru, Solomon

Islands, Vanuatu, Cook Island, Tuvalu,

Tokelau, Norfolk Island, Sakhalin

SMS

Local
Rs. 1.50

National
Rs. 2.00

International
Rs. 5.00

Value Added Services (Rs.)


Rs. 3.00

You also enjoy 25 FREE local mobile to mobile SMS

Senior Citizen Plan

ONE TIME CHARGES

Activation Charges
Rs. 250

Membership Fee
Rs. 250 (Concerts into security deposit

after 24 months)

Security Deposit
NA

MONTHLY CHARGES (FIXED)


Rs. 150

Bill Plan Charge


Rs. 51

Monthly Rental
Rs. 99

Clip
NA

Cuba, Sao Tome & Principle, Guinea

Bissau, Diego Garcia, Nauru, Solomon

Islands, Vanuatu, Cook Islands, Tuvalu,

Tokelau, Norfolk Island, Sakhalin

SMS

Local
Rs. 1.50

National
Rs. 2.00

International
Rs. 5.00

VAS
Rs. 3.00

With Senior Citizen Plan

You can take 3 Friends and Family numbers:

Vodafone to Vodafone (1local no.) Rs. 0.5 / min. Vodafone to Vodafone (1 STD no.) Rs
1.5 / min

ISD calls to US / Canada / South East Asia / Australia / New Zealand) Rs. 9.99 /
min

You also get FREE alert subscription worth Rs 30 / alert or 3 months on:

News

Astrology Health Tips

The SMS charges as applicable is per 160 Characters

PROMOTIONAL STRATEGY

Vodafone to Touch Tomorrow with a new brand vision

The Hutch Mobile promoted Vodafone cellular service will go in for


repositioning of its brand image. The new brand ethos is portrayed in two
distinct fashions - the tag line "Touch Tomorrow", which underscores the
leading theme for the new brand vision, followed by "The Good Life", which
underscores a more caring, more customer centric organization. Aimed at reengineering its image as just simply a cellular service provider to an all out
information communications services provider, Touch Tomorrow is meant to
embrace the new generation of mobile communication services and the
changing scope of customer needs and aspirations that come along with it

The new communication is about a new dimension in the cellular category


that goes beyond the Internet, SMS, roaming, IVRS, etc but which engulfs the
whole gamut of wireless digital broadband services that will constitute
tomorrows cellular services. The new campaign is in two phases - the first of
which will communicate overall brand philosophy and the second products
and services. According to Mr. Jagdish Kini, Chief Operating Officer, Hutch
Mobile Limited, Karnataka "We are adopting a new brand- platform - Touch
Tomorrow - not only to reflect our corporate ethos but also business strategy".

The new identity will have the logo in Red, Black and White colours along with
lower case typography to convey warmth. Vodafone will incorporate the latest
branding in all of its communication and will soon be going in for an enhanced
promotional drive to establish the brand's presence.

LIFE TIME PLAN

PRE-PAID card users need not worry anymore about recharging their
coupons every month. Company has launched a plan that allows users to
take a pre-paid connection with lifetime validity for a one time payment of Rs.
999. Subscribers availing themselves of this scheme will also get full talk time
for the recharge coupon they purchase and also have the option to buy
Taiwanese manufactured Bird mobile handsets for as low as Rs. 1,399.

The move is aimed at stopping the churn in the pre-paid subscriber base.
Once a subscriber takes this plan, he will always be an Vodafone subscriber
whether the mobile is being used or not.

MARKET SITUATION

At the time of launch

The first mover in the market was Vodafone which launched its services in
Delhi in Aug 1995 (Informal launch). Essar Cellphone followed by launching
its services informally in Oct 95. At this point of time, the market was at a
nascent stage, awareness level was low and both operators independently
tried to spread awareness and educate the people
Once the networks were commercially launched, it became a number game with a
multitude of schemes being offered to woo customers Initially the cellphone was
perceived as a status symbol and utility took a back seat The target segment in Delhi
were corporate and the high income group. The average capacity installed was for
1.5 lakh subscribers. This coupled with the steep license fee paid to DOT put
pressure on the operators to break-even by rapidly expanding their markets. In the
first two years, this led to a number of schemes being offered and prices crashing.

COMPETITIVE SITUATION

Vodafone launched its services before Essar and skimmed the market picking up
the bulk of the high usage premium clients. This is a very competitive industry
with the two companies differentiating either on value-added services or price.
Vodafone is perceived as the high quality provider and has a premium image.
Essar, on the other hand, is perceived as the lower end service provider.
Vodafone positions itself as the market leader on the basis of the number of
subscribers. Essar is trying to counter this by emphasising on the reach of its
network and the quality of its service. However, Essar is somewhat not been very
successful largely due to the inconsistency in advertising

To promote themselves, both the players have been dependent on tactical


advertising However, they have restrained from using comparative advertising
Hoardings have been a very popular medium for carrying the advertisements
Vodafone has also been advertising on television using the Hutch Telecom name.

SALES DEPARTMENT AND STRATEGY

Major Accounts (Direct Channel)

Handles corporate (named and famed) accounts

Forecasting of sales

Mapping the accounts

Providing after sales support to the subscribers.

Maintaining call reports for records.

Providing Feedback to the marketing department regarding the requirement of


the market.

IDC (indirect Channel)

Handling distribution

Maintaining records and level check of the channel partner

Liaisoning between the channel partner and the company.

Target achievement

Training the executives of the channel

Distribution Support

Logistics

Monitor handset and SIM card requirements of channel partners and coordinate with stores

Settle areas of concerns such as incentive claims of channel partners

Rental

Provide cellular services (SIM cards) on rent.

Provide cellular phones on rent

Useful for people visiting Delhi for a short interval.

Telesales

Call customers and generate sales lead.

Follow up with the customers, if they need any assistance

Pass on the sales lead to the channel department.

Audit

Consultant to the Vodafone showrooms.

Monitor the operations at the Vodafone distribution outlets Organize training.

Retail

Locate shops to open retail counters.

Monitor the retail counters.

MARKET SEGMENTATION

Segmentation is beneficial because of better predictability of the target consumer


group, minimization of risk exposure, better ability to fine-tune a product / service to
the requirement of target buyer and the resultant ease in designing a proper designing
marketing mix strategy In this case segmentation is on the bade of income.

In evaluating different market segments the company looks at two factors The overall
attractiveness of the segments and the company's objectives & resources The present
market for Cellular phones, pagers and conventional phones is as follows

Premium

Middle

Economy

Upper
Lower
Upper
Lower
Upper
Lower
Cellular Phones
X
X
X

Pager
X
X
X
X
Conventional Phones
X
X
X
X
X
X Market Segment Targeted

TARGET MARKET SEGMENT

Vodafone has targeted the premium and upper middle class. The rationale
behind it is that only those segments should be targeted who value time and
have the paying capacity. It Is also planning to target the business tourists
during their stay in the capital
About 60% of the clientele are top executives of corporate houses. About 15% are
foreign organisations and the rest are professionals and small businessmen. During
the introduction stage there was intense pressure to get consumers across to hook up
with their brand, because getting them to switch brand loyalty later would be hard

So far Vodafone marketers have been concentrating totally on the business executive
class but now that the basic viable volumes has beer) built up and prices have
declined to a certain extent they are planning to venture further a field.

POSITIONING

The product is sought to be positioned as a business efficiency tool. a lifestyle


revolution and a status symbol The emphasis is to remove misconception that
the cellphone is an expensive means of communication and drive home the
point that the cellphone is actually a day-to-day utility

PRODUCT POLICY AND PLANNING

The product or service is the heart of the marketing mix. Without a product or
a service customers' needs cannot be satisfied.

The basic product promise by Vodafone is mobility. Vodafone's main


marketing strategy is to be a first mover all the time. It has recognised the
significance of making the first move-- because in the field of Communication
& Information Technology changes occur at a tremendous pace.

Effective product segmentation has to be carried on continuously because basic


services can be and will be copied and in time become expected component of
the product. Vodafone seeks to carry out this segmentation through provision of
new information services and making new facilities available. The product policy
and planning depends on the stage of the product life cycle. At present the
cellular phone market has reached the maturity stage. Since, the premium
segment is nearing saturation the company targeting the upper middle and
middle-middle class. In order to do so Vodafone is trying to optimise the price
performance package by offering suitable "product bundling".

This involves the selection of the suitable hardware (handset) and its software
(its services.) with reasonable price in order to deliver maximum price
performance to its customers. In addition, it offers free Airtime services and
other concessions to make the prices and thus the product more attractive. It
has also opened a 24 hours customer service.

Only price doesn't serve as an effective differentiator, value added services


become the effective differentiator.

The "Value Added Services" provided from Vodafone are:-i) Voice Mail
service
This system is similar to the answering machine - if the user is not able to
answer a call for some reason the caller can leave messages in the voice mail
box which can be later retrieved by the user

ii) Short Message Service

The short message service is like a two-way pager. It gives an option of


sending and receiving text messages directly from one mobile phone to
another without the intervention of an operator.

iii) Mobile Fax 1 Data Service

This service helps the subscriber to send and receive Faxes, access E-mail,
download computer files from other systems and remotely log on to another
computer and surf the Internet.

iv) Cash Card

The cash card is a pre-paid and pre-activated card which allows the buyers to
buy air time in advance. All it requires is the payment of an initial amount. This
is a useful service for people who travel to Delhi often and those who want to
control the expenses on their calls.

v) Caller ID

Displays calling person's number.

vi) Outgoing call restriction

To prevent or limit outgoing calls, for example, in peak hours. Also possible to
exclude one or several countries, or any geographical region, to permit only
local calls, or to limit the outgoing calls to a listed number.

viii) Call forward

Incoming calls can be forwarded to another fixed or mobile phone.

Besides these some other services provided by Vodafone are - Call


conferencing, Call Broadcast et cetera.
It is in the operators -Interest that they not only get many subscribers but also
get them to use the mobile facility frequently. In the early stages getting
increases to subscribe may be easier than getting them to talk since they will
find it costlier to use the mobile phone as compared to a conventional phone
[if is believed that initially cellphones would be used buy]

viii) Roaming Facility

Roaming facility is available while the subscriber is travelling. The billing is


done in the home network (Delhi). Roaming facility is available manually* as
well as semi-automatically. Once a subscriber is In any other city or country,
where a GSM network is available, simply insert the SIM card of the local
operator Into your handset and start talking.
Manual Roaming means a separate SIM card is provided for each city

Semi automatic roaming means one card has the facility for different cities.

VODAFONE'S MARKETING ORIENTATION

Since this is a high-involvement expensive product, the service provider has


to fully take care of the customers.

They take personal responsibility to "get" the answer for any problem faced by
the customer
They anticipate customers' problems and take pro-active steps to prevent them

They give answers to the questions & requests, quickly & efficiently.

They have a positive tone & manner while interacting with customers.

They end the interaction on a positive or a humorous note-making the last 30

seconds count.

Vodafone realises that attracting people 'Is easy but converting them into loyal
customers is hard, hence emphasis is on maintaining a 'Smiling and a
Friendly Atmosphere' to please and retain the customer.

PRICE AND PRICING POLICY

VODAFONE has realised that the Indian market is price sensitive. Therefore it care
of the has come up with various innovative tariff schemes to take needs of different
category of customers- Generally, the cellular services are more expensive than the
land line based telephone services. This is due to the reason that the operating
companies are required to pay a fee to the government for using airtime.

MARKETING STRATEGYADOPTED BY VODAFONE

Hutch has spent a considerable amount on advertising its mobile phone


service, Vodafone. Besides print advertising, the company had put up large no
of hoardings and kiosks in and around Delhi.

The objective behind designing a promotion campaign for the Vodafone


services is to promote the brand awareness and to build brand preferences.

It is trying to set up a thematic campaign to build a stronger brand equity for


Vodafone. Since the cellular phone category itself is too restricted, also the fact that a
Cellular phone is a high involvement product, price doesn't qualify as an effective
differentiator. The image of the service provider counts a great deal. Given the Cell
phone category, it is the network efficiency and the quality of service that becomes
important. What now the buyer is looking at is to get the optimum price-performance
package. This also serves as an effective differentiator

Brand awareness is spread through the' campaigns and brand preference


through brand stature. Vodafone's campaign in the capital began with a series of
'teaser' hoardings across the city,' bearing just the company's name and without
explaining what Vodafone was. In the next phase the campaign associated
Vodafone with Cellular only thereafter was the Hutch Cellular connection brought
up. Vans with Vodafone logos roamed the city, handing out brochures about the
company and its services to all consumers. About 50,000 direct callers were sent
out. When the name was well entrenched in the Delhiitess mind, the Vodafone
campaign began to focus on the utility of Cellphone. In the first four months alone
Airtei's advertisement spend exceeded Rs. 4 crores.

As of today the awareness level Is 60% unaided. This implies that if potential
or knowledgeable consumers are asked to name a Cellular phone service
provider that is on the top of his/her mind 60% of them would name Vodafone.
As for aided it -is 100% (by giving clues and hints etc.).

Brand strength of a product or the health of a brand is measured by the


percentage score of the brand on the above aided and the unaided tests. The
figures show that Vodafone is a healthy and a thriving brand.
Every company has a goal, which might comprise a sales target and a game
plan with due regard to Its competitor. Vodafone 's campaign strategy is
designed keeping in mind its marketing strategy. The tone, tenor and the
stance of the visual ads are designed to convey the image of a market leader
in terms of its market share. It tries to portray the image of being a "first mover
every time" and that of a "market leader". The status of the product in terms of
its life cycle has just reached the maturity stage in India. It is still on the rising
part of the product life cycle curve in the maturity stage.
The diagram on the left hand side shows the percentage of the users
classified into heavy, medium and low categories. The right hand side shows
the revenue share earned from the three types of users.
Vodafone, keeping in mind the importance of the customer retention, values its heavy
users the most and constantly indulges in service innovation. But, since heavy users
comprise only 15 - 20% of the population the other segment cannot be neglected.

The population which has just realised the importance of cellular phones has to
be roped in. It is for this reason that the service provider offers a plethora of
incentives and discounts. Concerts like the "Freedom concert" are being
organised by Vodafone in order to promote sales. The media channel is chosen
with economy in mind. The target segment is not very concrete but, there is an
attempt to focus on those who can afford. The print advertisements and hoarding
are placed in those strategic areas which most likely to catch the attention of
those who need a cellular phone. The product promise (which might cost different
1 higher) is an important variable in determining the target audience.

Besides this, other promotional strategies that Vodafone has adopted are .

People who have booked Vodafone services have been treated to exclusive
premiers of blockbuster movies. Vodafone has tied up with Lufthansa to offer
customer bonus miles on the German airlines frequent flier's programs.

There have been educational campaigns, image campaigns, pre launch


advertisements, launch advertisements, congratulatory advertisements, promotional
advertisements, attacking advertisements and tactical advertisements

DISTRIBUTION

Company

Franchisee

Distributor

Dealers

Dealer

Customer

Customer

The- company whose operations are concentrated in and around Delhi. It 27


Franchisees and 15 Distributors- They also have 8 'instant access cash card
counters-Each franchises or distributor can have any number of dealers under him as
long as the person is approved by the Vodafone authority. Each franchises has to
invest Rupees Ten Lakhs. to obtain a franchise and should employ an officer
recruited by Vodafone. This person acts as an liaison between the company and the
franchises. The franchises can it any number of dealers as long as their territories do
not overlap. But unfortunately Vodafone has not been very successful in controlling
territorial overlaps of dealers. The franchises can carry out his 1 her own promotional
strategy. For this the. company contributes 75% of the money and the franchises
contributes 25% of the money. The dealers under the franchisee receive the same
commission. The franchises and the dealer obtain the feedback from the customers
and they are sent through the liaison officer on a day-to-day basis to Vodafone. The
dealer has to invest Rupees. One Lakh as an initial investment. The dealer of
Vodafone are not allowed to provide any other operators' service.

Target set for distributors and the dealers is 100 -150 activations per month.
Hence the dealers can also go for their own promotions like banners and
discounts on festivals etc. The dealer provides service promptly. The
consumer on providing the bill of purchase for the handset and proof of
residence has only to wait an hour before getting connected. The staff of the
dealers and the franchisees are provided training by the Vodafone personnel.

The complaints encountered by the franchisees and dealers are either


handset being non-functional or the SIM Card not getting activated. Anything
more complicated is referred to the main Vodafone office in Delhi.

WHAT DOES VODAFONE OFFER?

With Vodafone, the subscriber wouldn't just get a personal phone that lets
him/her be in touch, always, but also gets a host of benefits that let him/her
manage his/her time like never before.
An Vodafone subscriber is provided with a Subscriber Identity Module Card (SIM card) that is the key to operating his/her cellular phone. His card activates Vodafone cellular
services and contains a complete micro-computer chip with memory to enable one to
enjoy one's cellular phone thoroughly. Each SIM card contains a PIN code (Personal
Identity Number) which may be entered by one. Just plug your SIM card into your cellular
phone, enter the PIN code and it becomes 'your' personal phone'.

PRODUCT LIFE CYCLE

The pattern of cellphone subscriber growth observed elsewhere in the world


reveals that the growth in the market is Initially slow followed by a sharp
acceleration, but so far that has not happened in India. As far as the Product
Life Cycle is concerned. Indians are at the beginning of the maturity stage.

Introduction

Growth

Maturity

marketing objectives

Create product
awareness

Maximise market share

Maximise profits
whole

and trial

defending market share

Strategies

Product

Offer
a
basic
Offer
value
added

Increase in
number

product/ service.
services

of
value
added

services.

Price

Charge cost- plus


Price
to
penetrate
Price
to match or

market

best competitors

Distribution

Build
selective
Build

Intensive
Build

more

distribution

distribution.

intensive

distribution.

Advertising

Build

product
Build

awareness
Stress
brand

awareness
among
and interest
in the
differences
and

early
adopters and
mass market

benefits.

dealers.

Sales Promotion

Use
heavy
sales
Increase
to
build
Increase
to

promotion to entice
and

maintain
encourage
brand-

people to subscribe.

relationships
with
switching.

customers.

LITERATURE REVIEW

TELECOMMUNICATION MARKET IN INDIA

The telecom industry is one of the fastest growing industries in India. India
has nearly 200 million telephone lines making it the third largest network in
the world after China and USA. With a growth rate of 45%, Indian telecom
industry has the highest growth rate in the world.

History of Indian Telecommunications started in 1851 when the first operational land
lines were laid by the government near Calcutta (seat of British power). Telephone
services were introduced in India in 1881. In 1883 telephone services were merged
with the postal system. Indian Radio Telegraph Company (IRT) was formed in 1923.
After independence in 1947, all the foreign telecommunication companies were
nationalized to form the Posts, Telephone and Telegraph (PTT), a monopoly run by
the government's Ministry of Communications. Telecom sector was considered as a
strategic service and the government considered it best to bring under state's control.

The first wind of reforms in telecommunications sector began to flow in 1980s


when the private sector was allowed in telecommunications equipment
manufacturing. In 1985, Department of Telecommunications (DOT) was
established. It was an exclusive provider of domestic and long-distance service
that would be its own regulator (separate from the postal system). In 1986, two
wholly government-owned companies were created: the Videsh Sanchar Nigam
Limited (VSNL) for international telecommunications and Mahanagar Telephone
Nigam Limited (MTNL) for service in metropolitan areas.

In 1990s, telecommunications sector benefited from the general opening up of the


economy. Also, examples of telecom revolution in many other countries, which
resulted in better quality of service and lower tariffs, led Indian policy makers to
initiate a change process finally resulting in opening up of telecom services sector for
the private sector. National Telecom Policy (NTP) 1994 was the first attempt to give a
comprehensive roadmap for the Indian telecommunications sector. In 1997, Telecom
Regulatory Authority of India (TRAI) was created. TRAI was formed to act as a

regulator to facilitate the growth of the telecom sector. New National Telecom Policy
was adopted in 1999 and cellular services were also launched in the same year.

Telecommunication sector in India can be divided into two segments: Fixed Service
Provider (FSPs), and Cellular Services. Fixed line services consist of basic services,
national or domestic long distance and international long distance services. The state
operators (BSNL and MTNL), account for almost 90 per cent of revenues from basic
services. Private sector services are presently available in selective urban areas, and
collectively account for less than 5 per cent of subscriptions. However, private
services focus on the business/corporate sector, and offer reliable, high- end
services, such as leased lines, ISDN, closed user group and videoconferencing.

Cellular services can be further divided into two categories: Global System for Mobile
Communications (GSM) and Code Division Multiple Access (CDMA). The GSM
sector is dominated by Airtel, Vodfone-Hutch, and Idea Cellular, while the CDMA
sector is dominated by Reliance and Tata Indicom. Opening up of international and
domestic long distance telephony services are the major growth drivers for cellular
industry. Cellular operators get substantial revenue from these services, and
compensate them for reduction in tariffs on airtime, which along with rental was the
main source of revenue. The reduction in tariffs for airtime, national long distance,
international long distance, and handset prices has driven demand.

Indian Telecom sector, like any other industrial sector in the country, has gone
through many phases of growth and diversification. Starting from telegraphic and
telephonic systems in the 19th century, the field of telephonic communication has
now expanded to make use of advanced technologies like GSM, CDMA, and WLL to
the great 3G Technology in mobile phones. Day by day, both the Public Players and
the Private Players are putting in their resources and efforts to improve the
telecommunication technology so as to give the maximum to their customers

The Indian telecom sector can be broadly classified into Fixed Line Telephonyand mobile
telephony. The major players of the telecom sector are experiencing a fierce competition
in both the segments. The major players like BSNL, MTNL, VSNL in the fixed line and
Airtel, Hutch, Idea, Tata, Reliance in the mobile segment are coming up

with new tariffs and discount schemes to gain the competitive advantage. The
Public Players and the Private Players share the fixed line and the mobile
segments. Currently the Public Players have more than 60% of the market share

Market shares of public and Private Players

Both fixed line and mobile segments serve the basic needs of local calls, long
distance calls and the international calls, with the provision of broadband services
in the fixed line segment and GPRS in the mobile arena. Traditional telephones
have been replaced by the codeless and the wireless instruments. Mobile phone
providers have also come up with GPRS-enabled multimedia messaging, Internet
surfing, and mobile-commerce. The much-awaited 3G mobile technology is soon
going to enter the Indian telecom market. The GSM, CDMA, WLL service
providers are all upgrading themselves to provide 3G mobile services.

Along with improvement in telecom services, there is also an improvement in


manufacturing. In the beginning, there were only the Siemens handsets in India
but now a whole series of new handsets, such as Nokia's latest N-series, Sony
Ericsson's W-series, Motorola's PDA phones, etc. have come up. Touch screen
and advanced technological handsets are gaining popularity. Radio services have
also been incorporated in the mobile handsets, along with other applications like
high storage memory, multimedia applications, multimedia games, MP3 Players,
video generators, Camera's, etc. The value added services provided by the
mobile service operators contribute more than 10% of the total revenue

The leading cellular service providers have the following number of subscribers:

Bharti Airtel has the largest customer base with 31% market share, followed
by Hutch and BSNL with each holding 22% market share.

The 2008 budget has brought further relief to the customers with the reduction
in the tariffs, both local and long distance, and with slashing down the roaming
rentals. This is likely to lead to even more people going for cellular services
and more and more use of the value added services. However, landline
telephony is likely to remain popular, too, in the foreseeable future. MTNL, the
largest landline service provider, has recently taken some bold initiatives to
retain its market share and, if possible, expand it.

The cellular phone industry is one of India's rapidly growing industries. Since the industry
came into being in the mid 1990s, its average per annum growth rate has been a
phenomenal 85 percent. By the end of 2008, the Indian cellular phone industry had over
10 million subscribers. The industry has undergone a number of changes over the years.
The National Telecom Policy 1999 was an important landmark in the development of the
cellular telecom industry in India; the tariff rationalization and policy regulation introduced
in the Policy helped the industry grow at the pace it did. The years 2007 and 2008 saw
an increase in level of competition in the industry with

more operators being given licenses, and fixed line providers also entering the
mobile market.

In 2003, Telecom Regulatory Authority of India (TRAI) announced regulation of


interconnect user charges to resolve conflicts between cellular operators and fixed line
operators. Keywords Cellular phone industry, 1990, per annum, growth rate,
phenomenal, 85 percent, 2002, Indian cellular phone industry, 10 million, subscribers,
National Telecom Policy, 1999, tariff rationalization, policy regulation, 2001, 2002,
competition, operators, mobile market, 2003, Telecom Regulatory Authority of India,
TRAI, interconnect user charges, conflicts, cellular operators, fixed line operators

The cellular phone industry is one of India's rapidly growing industries. Since
the industry came into being in the mid 1990s, its average per annum growth
rate has been a phenomenal 85 percent. By the end of 2008, the Indian
cellular phone industry had over 10 million subscribers. The industry has
undergone a number of changes over the years.

The National Telecom Policy 1999 was an important landmark in the


development of the cellular telecom industry in India; the tariff rationalization
and policy regulation introduced in the Policy helped the industry grow at the
pace it did. The years 2007 and 2008 saw an increase in level of competition
in the industry with more operators being given licenses, and fixed line
providers also entering the mobile market. In 2007, Telecom Regulatory
Authority of India (TRAI) announced regulation of interconnect user charges
to resolve conflicts between cellular operators and fixed line operators

Economic theory suggests that there is a positive correlation between infrastructure


and economic development. Telecommunications is one of the most important types
of infrastructure. Communication is said to be the life-blood of economic activity.
Systems of communication assume critical importance when globalization and
contraction of geographic distances have become the order of the day.

International studies indicate that for every one percent increase in the tale density
(penetration rate of telecommunications) of a country, there is a corresponding
increase of three percent in the gross domestic product of the country...

The Indian telecommunications has been zooming up the growth curve at a feverish
pace, emerging as one of the key sectors responsible for India's resurgent economic
growth. India is set to surpass US to become the second largest wireless network in
the world with a subscriber base of over 300 million by April, according to the the
Telecom Regulatory Authority of India (Trai). The month of April 2008 will see India
wireless subscriber base that currently stands at 250.93 million surpassing that of the
US to become the second wireless network in the world.

The year 2007 saw India achieving significant distinctions: having the world's lowest
call rates (2-3 US cents), the fastest growth in the number of subscribers (15.31
million in 4 months), the fastest sale of million mobile phones (in a week), the world's
cheapest mobile handset (US$ 17.2) and the world's most affordable colour phone
(US$ 27.42) and largest sale of mobile handsets (in the third quarter).

Segment-wise growth

Wireless segment has emerged as the preferred mode of telephone service by the
consumers, reflected in the rising share of mobile phone connections to total
connections. The share of mobile phones has increased from 71.69 per cent at the
end of March 2006 to 87.68 per cent at the end of May 2008. While total mobile
subscriber base was 277.92 million, wire line subscriber base was 39.05 million.

Consequently, overall tele-density has increased to 27.59 per cent at the end of
May 2008. India is likely to be second largest mobile market in the BRIC nations,
with 560 million mobile users representing the next great growth curve for both
mobile and interactive marketing industries, according to a report by eMarketers.

Also, private sector has become the dominant player in the industry. While public sector
companies added 53.6 million subscribers during 1998-2007, private companies have
added a whopping 133.58 million subscribers during the same period. The dominance
has been much more pronounced in the mobile market, where private

operators have added 124.68 million subscribers, while public sector


operators added only 31.79 million subscribers.

Investment

The booming domestic telecom market has been attracting accelerating


amount of investment. During April 2000 to March 2008, cumulative FDI
inflows into the Indian telecommunications sector amounted to US$ 3.84
billion, accounting for 6.81 per cent of the total FDI inflows into the country.
In fact, the surge in mobile services market is likely to see investment worth
about US$ 24 billion by 2010, going by industry estimates. This is
understandable, when seen that the number of mobile subscribers is
estimated to increase to 600 million by 2012, according to Standard Chartered
Bank, implying a mobile in the hands of every second person in the country

INDIAN CELLULAR MARKET

The Bharti Group, which operates in 23 circles, continues to be the country's


largest cellular operator, with 50 lakh subscribers. BSNL, which operates in 22
circles, has a subscriber base of 37 lakh subscribers. Thus BSNL stands
second largest cellular operator in terms of subscriber base at the end of the
fiscal ending March 31, 2007, displacing Vodafone from the second position.

Vodafone, which operates in only eighteen circles, is the third largest operator
with a subscriber base of 32 lakh. Unlike fellow public sector undertaking,
MTNL, which operates in Mumbai and Delhi, BSNL has been a very
aggressive player in the market. "Cellular operators who expected BSNL to go
the MTNL way, were taken by surprise and did not take effective steps to
counter it, till it was too late in the day," said a telecom analyst.

Belying fears of a slowdown in cellular subscriber acquisitions, the cell club has
reported a 7.92% growth, the highest growth in any month so far, during March

2005. Year-on-year, the cellular subscriber base in the country has almost
doubled in March 2005, and is expanding at the rate of 25% per year thereafter.

The cellular subscriber club expanded by 21.31 lakh last month. This is much higher
than 5.9 lakh subscribers added in February 2005 and 2.13 lakh in January 2005.
Idea, which operates in Seven circles, is the fourth largest operator with a subscriber
base of 17.80 lakh, higher than BPL's 11.31 lakh subscribers across four circles. The
subscriber numbers per operator drop sharply with the sixth largest operator, Spice
Communications, having a subscriber base of 9.40 lakh, followed by Reliance
Telecom's 8.9 lakh subscribers. MTNL is the ninth largest operator, with a base of
8.32 lakh subscribers.

While the subscriber base-jumped by 3.38% to 44.39 lakh in the metros,


subscriber base of category A circles of Maharashtra, Gujarat, Andhra
Pradesh, Karnataka and Tamil Nadu jumped by 10.18 % to reach 43.64 lakh.
Category B circles of Kerala, Punjab, Haryana, Uttar Pradesh (West), Uttar
Pradesh (East), Rajasthan, Madhya Pradesh and West Bengal recorded a
jump of 10.69%, with a total base of 33.74 lakh subscribers. Circle C has
reported 12.74 % growth with subscriber numbers jumping to 5.08 lakh.

Among the metros, while Mumbai added 1,63,180 subscribers, higher than
the 1,58,646 added by Delhi, the Capital's cellular subscriber base of over 80
lakh is still higher than Mumbai's 66.89 lakh. While the cellular industry has
been on roll for the first three quarters of the previous financial year with an
average of 16.75 lakh monthly additions in the third quarter, the first two
months of 2007 had seen the growth slowing down.

GSM MARKET IN INDIA

Regional Interest Groups - GSM India

With a population of around 1,139,964,932 growing at roughly 1.7 per cent a


year, India is potentially one of the most exciting GSM markets in the world.
After two rather difficult years, the past 12 months have seen the region's

promise beginning to come to fruition. Much of this success can be attributed


to the stabilisation of the licensing and regulatory environment.

India's telecommunications have undergone a steady liberalisation since 1994


when the Indian government first sought private investment in the sector. More
significant liberalisation followed in 1996 with the licensing of new local fixed line
and mobile service providers. However, it has been the government's New
Telecom Policy (1999) that has had the most radical impact on the development
of GSM services. 'The policy's mission statement is 'affordable communications
for all', There is a genuine commitment to creating a modern and efficient
communications infrastructure that takes account of the convergence of telecom,
IT and media. In addition, the policy places significant emphasis on greater
competition for both fixed and mobile services.'

Competition in the mobile sector has already had a visible impact on prices with calls
currently costing less than 9 cents per minute. This means that service costs have
fallen by 60 per cent since the first GSM networks became live in 1995. It also helps
explain why a recent Telecom Asia survey revealed that more than 70 per cent of
Indian mobile subscribers felt that prices were now at a reasonable level.

One of the challenges facing GSM operators in India is the diversity of the coverage
regions -from remote rural regions to some of the most densely populated metropolitan
areas in the world. India has more than 40 networks, which cover the seven largest cities,
over 7000 towns and several Lacs Delhis. Such depth of coverage has required
enormous investment from India's operators. It is estimated that more than Rs200 billion
had been invested in India's GSM industry by mid-2000, a figure that is set to be
supplemented by a further Rs. 300 billion over the next five years.

The good news is that subscriber growth is beginning to look healthy. With India's
low PC penetration and high average Internet usage -at 14-20 hours a month per
user it is comparable to the US -the market for mobile data and m-commerce
looks extremely promising. WAP services have already been launched in the
subcontinent and the first GPRS networks are in the process of being rolled out.
In the year ahead, GSM India will work with its members to realise the potential of
early packet services in anticipation of the award of 3GSM licences.

India fastest growing GSM mart

India is expected to have 145 million GSM (global system for mobile
communications) customers by 2007-08 compared to 26 million subscribers as on
March 2005, according to the Global Mobile Suppliers Association. "For GSM, India
is a success story. It is one of the fastest growing markets with its subscriber base
doubling in 2005. At this pace, the target of 150 million subscribers by 2007-2008 is
definitely achievable," Alan Hadden, president of GSA, said at a news conference in
New Delhi. Globally, the GSM market reached 1 billion users in February 2005, he
said, adding GSM accounted for 80 per cent of the new subscriber growth in
2005."Almost every Latin American operator has chosen GSM. In North America
GSM growth is bigger than CDMA (code division multiple access)," he said.
Commenting on the raging debate over GSM versus CDMA in mobile services arena,
Hadden said: "GSM is the world's most successful mobile standard with over 1 billion
users, and is an open mobile standard. It also supports automatic international
roaming, which is a major contributor to business plans."

Indias GSM mobile firms revenue up 30 pct

Indias private telecoms firms offering GSM-based mobile services reported a 24


percent rise in revenue in the year to March 2007 but said future growth rates
could slow because of heavy taxes on the nascent industry. Although Indias
mobile sector is the worlds fastest growing major wireless market, it is amongst
the highest taxed industries in the country. Mobile carriers pay as much as 25
percent of their revenue as licence fee, spectrum charges and other taxes. The
Cellular Operators Association of India (COAI) said revenue for fiscal 2003/04
stood at 83.08 billion rupees ($1.86 billion) compared with 64 billion rupees a
year earlier. According to T.V. Ramachandran, director general at COAI, These
revenue growth rates cannot be maintained unless there is a concerted effort by
the government to cut excessive levies and allow sharing of infrastructure

But the potential to do much better exists as there is still huge demand in the sector.
Ramachandran said the sector was still losing money but declined to elaborate.
Sales jumped because of a doubling of the GSM (Global System of Mobile

Communications) user base as more people entered the flourishing market thanks to
one of the lowest call rates in the world. But the monthly average revenue per user, a
key measure of profitability, declined 17.4 percent to 432 rupees in the fourth quarter
compared with 523 rupees in the first quarter due to a cut in tariffs and excessive
competition among companies. Growth slowing, demand untapped: The association
has not included the financial performance and the GSM-user base of state-run firms
Bharat Sanchar Nigam Ltd, the second-ranked player, and Mahanagar Telephone
Nigam Ltd, Ramachandran said. There are 150 million GSM customers and more
than 96 million users of the rival CDMA-based mobile services in the country.

The pace of growth in monthly additions is slowing after just 1.25 million users
took up the service in April compared with 1.9 million in the previous month
and 1.63 million in February. Ramachandran blamed the slowdown on a
majority of small GSM operators being unable to expand networks into rural
swathes where demand remained largely untapped.

Our surpluses are not enough to cover costs of network expansion and financing
charges on loans. We are making money only to cover operating expenses, he
said. Carriers are now subsidising handset costs to woo users into the
underpenetrated industry forecast to have more than 250 million customers by
2007. Roughly three percent of Indians own a mobile phone compared with about
20 percent in China. About a dozen firms such as Bharti Airtel Ltd, 28 percent
owned by Singapore Telecommunications, Reliance Infocomm Ltd and the Indian
GSM-unit of Vodafone group battle in the hotly competitive sector.

DOES GSM HAVE THE EDGE?

GSM operators are not the only ones who are worried about the rapid strides
made by CDMA mobile players Reliance Infocomm and Tata Indicom in the
Indian cellular market?

The GSM suppliers both handset and equipment - who incidentally also
have their other foot firmly placed in the CDMA pie, are beginning to lose
some sleep over what was earlier termed as `niche and `minuscule data
carriage market by the operators

Apart from the strong success of the two CDMA operators whose networks
are based on code division multiple access (CDMA), the miserable showing of
the four global standard for mobile (GSM) based networks that launched
general packet radio service (GPRS) service for data connectivity in last three
years, has the vendors worried. Global mobile Suppliers Association (GSA)
now believes that even though India will primarily remain a voice traffic-led
market in next two-three years, the data traffic component will grow by 25-30
per cent, an optimism that its trying to make GSM operators feel as well.

THE CDMA CHALLENGE

CDMA players had launched their services with CDMA 2000 1X-based networks,
which can give hi-speed, always-on connectivity to the Internet, and other data
services. GSM operators, on the other hand, have had to migrate from the frustrating
experience of WAP (wireless application protocol) to GPRS, which has not
significantly improved the subscribers experience of surfing the Net on/from mobile.

The top brass of GSA, an organisation comprising Nokia, Siemens, Ericsson,


Alcatel and Lucent Technologies - met on Tuesday in the capital to persuade
the operators to adopt EDGE (Enhanced Data rates for GSM Evolution) and
leave GPRS behind as a dream gone sour.

Only Airtel, Vodafone, BPL Mobile and Idea Cellular had launched GPRS, but the data
transfer speeds of GPRS have been abysmal. The field trials gave a speed of around 54
kbps, but the actual speeds have not exceeded 14-18 kbps, a major reason why GPRS
growth has been so slow. As against the total GSM cellular base of 5.61 crore, the
country has between 2,80,000 lakh GPRS users only. In comparison, the two CDMA
operators have about 120 lakh connections. All these sets are data compliant. Though no
figures are available as to how many use these for data services, the figure is believed to
be respectable as a percentage ratio for CDMA.

But first, the EDGE! Bharti Cellular is close to commercially launching its EDGE
service in Delhi and Mumbai by end May or early June, sources said. The company
was the first to conduct field trials in November with its equipment supplier Ericsson.
Idea too held EDGE field trials in February this year with its vendor Nokia. Vodafone

and BPL are yet to hold the trials. The two companies would eventually
migrate to EDGE, but perhaps after seeing the response to Bhartis service.

EDGE holds the promise of delivering data speeds of around 170-180 kbps (as against
the theoretical speed of around 380 kbps) which, if achieved, promises the launch of
many data applications. The scalable cost of migrating from GPRS to EDGE is not too
high and mainly comprises software upgrades in case of a modern network such as
Bharti and Hutch, claimed chairman of GSA India chapter Rakesh Malik.

Will GSM maintain its headstart?

At the GSM Evolution Forum held in New Delhi, GSA president Alan Hadden
predicted that GSM growth will far outstrip CDMA as was happening globally.
He felt India could have as many as 200 million GSM subscribers by 20072008, up from nine million in December 2004. According to GSA, there are
over 1.1 billion GSM subscribers worldwide as against 250 million CDMA
customers. The revenue of top 25 global operators from data averages 18 per
cent and 22 of these operators run GSM networks. Overall, there are 76
operators in 50 countries that have committed to deploy EDGE.

Almost every country has a GSM-based network and even those US operators,
which operated on now-defunct TDMA technology, were migrating gradually to
GSM, not CDMA, pointed out Hadden at the GSM Evolution Forum. The Forum is
a global GSA program to assist the operators for evolution to third generation
(3G) technologies. People are using their phones for much more than voice.
Fifteen networks have commercially launched EDGE as it can run 3G like
services in the existing spectrum for the operators without needing a 3G license.
Even the migration to a full-fledged 3G level of Wideband CDMA (WCDMA) will
be smooth with EDGE, said Hadden.

Besides, the automatic roaming provided by GSM networks in almost 200 countries
is a power that CDMA doesnt give you. We know for sure that almost 20-25 per cent
of the revenue for some GSM operators comes from roaming customers, he added.
But CDMA is no pushover with Korea and Philippines as the shining jewels in its
crown. The first CDMA 2000 1X was commercially deployed in October 2000.

Already, 81 operators have launched 77 CDMA 2000 1X networks whereas


nine have launched services based on 1xEV-DO platform across Asia, the
Americas and Europe. At least, 16 new 1X and six 1xEV-DO networks are
scheduled to be deployed in 2004, according to CDMA Development Group.
EV-DO and EV-DV are the next level of evolution on the CDMA 2000 1X
platform, capable of delivering services comparable to 3G WCDMA.

Where are the models?

What will matter a lot in this war will be the availability of EDGE compliant
handsets at affordable rates. While the two CDMA operators have been giving
out handsets that can give hi-speed data transfer, same has not been the
case with GSM. Even now, GPRS handsets have not become commonplace
and GPRS feature is found only in mid and high-end segment handsets.

End sum game

When the networks deploy EDGE, subscribers can expect the delivery of
advanced mobile services such as easy downloading of video and music
clips, full multimedia messaging, besides high-speed Internet and e-mail
access, provided their handset supports all this.

But the real cruncher will be the migration at a later stage to 3G technologies
such as WCDMA, EV-DO or EV-DA as and when the government decides
what to do with the 3G licences. WCDMA for example promises delivery of a
phenomenal 2 megabytes per second (mbps), equivalent to what a leased
line in many middle level corporates gives.

More importantly, WCDMA will spawn a whole new range of full motion audiovideo applications, including video telephony. GSM lobby may continue to remain
gung ho over the future of their technologies over that boosted by the American
firms Qualcomm and Motorola, but Indian market could well throw an interesting
scenario that industry experts will do well to watch. In the coming months,
Reliance plans to offer its CDMA subscribers much more than what GSM players
intend to deliver through their EDGE for their subscribers.

Who succeeds in this battle for mobile customers eyeballs is most difficult to predict.
A Korea and Japan may not be waiting to happen in India, but India will probably be
more like the Chinese market with both standards co-existing. For now, GSM rules!

RESEARCH METHODOLOGY

RESEARCH OBJECTIVE

To understand the various Marketing Strategies which Vodafone has adopted


to survive in highly competitive cell phone industry.

To make a comparative study of the major players in Indian Service Provider.

To study the marketing strategies of Vodafone.

To analyse the trends in Indian Telecom Industry with the entry of Vodafone.

RESEARCH METHODOLOGY

Primary Data

Questionnaire Survey of Customers

Secondary Data

Internal Reports Vodafone.

Reports on Indian Telecom Industry.

Internet

Data Collection Tools

Interview

LIMITATIONS

Every attempt will be taken to obtain the error free and meaningful result but
as nothing in this world is 100% perfect I believe that there will still the chance
for error on account of following limitationsRespondents unavailability.

Time pressure and fatigue on the part of respondents and interviewer.

Courtesy bias.

FINDINGS AND ANALYSIS

The age of the respondents can be shown under the following heads.
The respondents can be divided into the following categories

Age of the respondents

16%
6%
0-15

15-30

30-40

31%

47%

40-60

It is known from the graph that the main respondents are belonging to 20 - 30
age-group i.e. 47% people out of surveyed sample size i.e. 300 are under 30
years of age it showing that good business for the Vodafone because young
want to have a mobile devices with him/her at any circumstances.

The gender of the various respondents are as follows:

G e nd er of resp o n d

32%

m ale

fe m a l

68 %

According to the survey conducted the female were 32% and male were
68%. Also because not having too many female as decision maker to buy
Vodafone plan in Delhi region. And it is clearly shown to our graph male are
dominated to purchase of any plan of mobile services.

Income per month of the respondents are calculated as follows:

Income of the respond

2%

0-5000

6% 4%
20%
5000-10000

24%

10000
-1500

15000
- 2000

16%
28%
20000
-2500

25000
-3000

>30000

The income of the respondents is very much fluctuating. This is done so


as to gain more knowledge about the different strata of the society. Also
from the survey 28 % are earning in between 10000-150000 per Year
salary which inc while 24 % earning in between of 5000-10000 per year
while this data we cannot say is not biased because Salary is a part
everybody is not very comfortable with telling you. While 20 % people
responded that his/her salary in between of 20000-250000 rupees.

Availability

Q4. Is Vodafone recharge /new connection available in your near area?

(1)
Strongly Agree
(2)
Agree
(3)
Disagree
(4)
Strongly Disagree
(5)
Neutral

Strongly Agree
90
Agree
79
Disagree
50
Strongly Disagree
48
Neutral

23

From the sample size 300 here are the question would gives the insight
Study on buying behaviour of consumer indicates that the Delhi retailers
influences 35% of purchase occasions. Therefore sheer product availability
can affect decision of brand choice, volumes and market share. Some of the
FMCG giants like HLL took out project streamline to significantly enhance the
control on the Delhi supply chain through a network of Delhi sub-stockists,
who are based only.

Form our survey result it is showing that 31% of says that Vodafone
connection or recharges are easily available in their respective area and they
are strongly agree with this.

Now the segment of people where they not strongly agree with the statement that
Vodafone product reached their respective area 27% respondent said yes some time
they will get and some time not also they suggested that some time new connection
is not available. Also 34% respondent responded that they either strongly disagree or
disagree with the statement that Vodafone not reached their respective area so far.
Only 8% respondent says that they have neutral opinion on this.

Recommendation for Vodafone would be company can target first 34% people those
who are disagree and not satisfied with the product availability of the Vodafone so at
least Vodafone have more than 60% market share of those people who at least knew
the product is available near store so they can easily bought them.

Affordability

Q 5. Is Vodafone recharge more affordable than the other recharge available


on your nearest telecom shop?
(1)
Strongly Agree
(2)
Agree
(3)
Disagree
(4)
Strongly Disagree
(5)
Neutral

Strongly Agree
76
Agree
97
Disagree
38
Strongly Disagree
46
Neutral
43

This question gives us insight of the affordability of the product or service.


With low disposable incomes, products need to be affordable to the Delhi
consumer, most of who are on daily wages. Now we check what Delhi
customer want from the company in terms of their product prices.

Out of 300 sample size we consider to choose first strongly agree respondent who
believes that Vodafone product is affordable for him/her 25% respondent out of 300
says Vodafone product is affordable in comparative of other competitor. While 33%

are only agree with this statement that Vodafone has much affordable price of
their respective product. Now moving ahead 28% respondent are still not
agree or strongly disagree with this question they thought Vodafone products
are much costlier than the other mobile service provider companies product.

14% respondent said they have mixed view about the affordability these
people are those who are richer in Delhi region.

Recommendation for Vodafone would be target 28% people also to provide much
more scheme and plan so they comes under the pie of affordable range.

Acceptability

Q6. Is Vodafone giving you same service as compare to Hutch?

(1)
Strongly Agree
(2)
Agree
(3)
Disagree
(4)
Strongly Disagree
(5)
Neutral

Strongly Agree
45
Agree
134
Disagree
121
Strongly Disagree
46
Neutral

43

This question gives us insight of the acceptability of the product or service. Gain
acceptability for the product or service. Therefore, there is a need to offer products
that suit the Delhi market. One company, which has reaped rich dividends by doing

Out of 300 sample size we consider to choose first strongly agree respondent who
believes that Vodafone and Hutch are the same and there service is also same for
him/her only 12% respondent out of 300. While 34% are only agree with this statement
that Vodafone has and Hutch giving him/her same service experience their respective
product. Now moving ahead 43% respondent are still not agree or strongly

disagree with this question they thought Vodafone service is not same like
Hutch they perceive that Hutch has a better service than the Vodafone and
11% respondent said they have mixed view about the acceptability of
Vodafone and Hutch at the same criteria.

Recommendation for Vodafone would be target those people first i.e. 43% who
believe that Hutch has better service than the Vodafone while considering this
fact there is huge chance that Vodafone will lose their business in Delhi region.

Awareness

7. Have the respondents heard about the Vodafone?

It is
quite
evident
that the 96 %

respondents
are
aware
of

Vodafone.
And
only
4%

respondent
said that
they

didnt
know
about
the

Vodafone
while

they are using mobile phone. With large parts of Delhi India inaccessible to
conventional advertising media - only 41 per cent Delhi households have
access to TV - building awareness is another challenge. Fortunately, however,
the Delhi consumer has the same likes as the urban consumer - movies and
music - and for both the urban and Delhi consumer, the family is the key unit
of identity. However, the Delhi consumer expressions differ from his urban
counterpart. Outing for the former is confined to local fairs and festivals and
TV viewing is confined to the state-owned Doordarshan. Consumption of
branded products is treated as a special treat or indulgence

8. Frequency of the purchase of the Vodafone product

Frequency of the purchase of the

Vodafone product

23%
14%
>1 months

1 - 3 months

29%
3-6 months
34%

More than a year

The frequency of the purchase of the Vodafone Product recharges depends


upon the work a person does and the purchasing power of the people. Form
our survey clearly states that 14% respondent buy recharge i.e. may only
monthly recharge of monthly basis and 34 % people buy Vodafone prepaid
recharge 3-4 moths because most of them are using life time prepaid.

How the consumers come to know about the Vodafone?

Here we come to know that 35% of the consumers came to know about the
Vodafone recharge in Delhi region through self research which includes the kind
of low pay and high gain customer want from recharge, and following of this 30%
people get to know about Vodafone trough advertisement i.e. quite effective
advertisement point of view. Rest of 20% are influenced though their friend and
colleagues or by friends and a small number i.e. 10% by the Hoardings and 5%
by or any other means includes radio and magazine news paper article.

Will the consumers recommend the Vodafone to other persons?

Recommendation of the Vodafone to

Others

9%
0%
yes

no

Can't say

91%

Large numbers of consumers i.e. 91% are ready to recommend


the Vodafone product to their friends but a small number i.e. 9%
is not able to decide whether to recommend or not they are bit
hesitate but they can be converted into potential consumers but
none of the consumer are saying no. it is also states that
Vodafone has good image over the customers.

11. Do you believe that India is potentially one of the most exciting mobile
service providers in the world?
Company
Yes
No

Airtel
4
1

Vodafone
4
1

Idea
4
1

MTNL
4
1

As according to the above table 16 (80%) out of the total 20 interviewed


people in all the above four specified Indian mobile service providers are of
belief that India is potentially one of the most exciting mobile service providers
in the world, whereas some 4 (20%) of them do not agree to this view.

12. Do you find that the governments telecom policy has had the most radical
impact on the development of mobile service providers?
Company
Yes
No

Airtel
4
1

Vodafone
3
2

Idea
3
2

MTNL
5
--

As according to the above table 15 (75%) out of the total 20 interviewed people in
all the above four specified Indian mobile service providers find that the
governments telecom policy has had the most radical impact on the development
of mobile service providers, whereas some 5 (25%) of them deny this.

13. Do you believe that one of the challenges facing mobile operators in India
is the diversity of the coverage regions?
Company
Yes
No

Airtel
2
3

Vodafone
3
2

Idea
3
2

MTNL
2
3

As according to the above table 10 (50%) out of the total 20 interviewed


people in the mobile service providers are of belief that one of the challenges
facing mobile operations in India is the diversify of the coverage regions,
whereas interestingly another 10 (50%) of them deny this.

14. To what extent, does you find that mobile service providers is a very
complex standard?
Company
To some extent
To great extent

(6-10)

(1-5)

Airtel
3
2

Vodafone
2
3

Idea
2

MTNL
3
2

As according to the above table 10 (50%) out of the total 20 interviewed


people in all the above four major the mobile service providers in Indian
Cellular industry find only to some extent that GSM is a very complex
standard, whereas the another 10 (50%) respondents find to great extent that
mobile service providers is a very complex standard.

CONSUMER LEVEL

15. Do you believe that mobile service providers comes close to fulfilling the
requirements for a personal communication system?

Company
Yes
No

Airtel
9
1

Vodafone
8
2

Idea
8
2

MTNL
5
5

As the above shows 30 (75%) out of total 40 respondents are of the belief that
mobile service providers comes close to fulfilling the requirements for a personal
communication system, whereas 10 (25%) of them are in no way to this belief.

16. Do you find that mobile service providers as the most exciting and
satisfying mobile standard?

Company
Yes
No

Airtel
9
1

Vodafone
7
3

Idea
8
2

MTNL
8
2

As the above shows 32 (80%) out of total 40 respondents find that mobile
service providers as the most exciting and satisfying mobile standard,
whereas the remaining 8 (10%) respondents deny this.

17. Do you believe that your service provider has a genuine commitment to
creating a modern and efficient communications?

Company
Yes
No

Airtel
10
--

Vodafone
8
2

Idea
10
--

MTNL
8
2

As the above shows 36 (90%) out of total 40 respondents are of the belief that
their service providers have a genuine commitment to creating a modern and
efficient communications whereas the remaining 4 (10%) respondents deny this.

SWOT ANALYSIS
STRENGTHS

Cost advantage

Current leaders in quality service

Largest distribution network

Ability to constantly innovate

Highly skilled workforce

Entrepreneurial zeal

WEAKNESSES

To prove credibility

Price pressures

Need for Government support

Awareness

OPPORTUNITIES

To sustain passion and commitment

Vodafone market share increasing at other service provider expense. Thus


opportunity to wipe it out.

Attain higher value services

Collaborative business needs to be explored

Vertical repeatable solutions.

Low penetration level in rural markets.

THREATS

Foreign investment

Global trends moving from GPS to WLL.

Lack of global parity in telecom tariff

Other competition

CONCLUSION

India that has a lot of population with it definitely offers a great potential for the
companies where the chances of outnumbering the urban areas in all aspects
are very high. But only those companies would survive at these places and
win over the Delhi consumers who can spend time and money on
understanding the needs of them and come up with innovative ideas.

The companies should also strive to give more focus to the Delhi market in order
to make it a market leader. This can happen only with the firm commitment of the
top management and extension of full support to the marketing personnel by
each and every department of the organization. In most of the Delhi areas of
Delhi in different parts of the country, there is considerable awareness on various
latest products that are available in the market. This has been possible due to the
penetration of cable and satellite channels that have brought down the world at
the finger tips of the common man. The media influenced the mindset of the Delhi
consumer to such an extent that people who had money started purchasing the
products unmindful of the costs, just to satisfy their needs as well as their ego.
But, the growth of Delhi market could be attributed to many other reasons that in
one way increased the sales as well as the profits of the companies. Some of the
important causes for the growth of Delhi as a Delhi markets are

The rise in disposable income of the Delhi families

The economic boom

Timely rains

Delhi population involved themselves in business other than agriculture

Increase white-collar jobs in nearby towns

Commercialization of agriculture

Saturation of the urban markets

Media penetration in Delhi areas (particularly satellite channels)

Globalization

Economic liberalization

Revolution in the Information Technology

Women empowerment

Improving infrastructure

However, there was a significant role of the corporate enterprises simultaneously


in the development of Vodafone market in Delhi. Their timely intervention into the
Delhi areas, their appropriate planning, their perception and identification about
the growth of Delhi markets and the use of marketing strategies all have equally
contributed for the progress of Delhi markets. Even though corporate houses
were hedged with so many problems in the Delhi areas, they saw a galore of
opportunities in the Delhi market and converted all the pessimistic characteristics
of the Delhi market into affirmative attributes. They satisfied themselves with the
availability of limited infrastructure, saw a sign of prosperity rather than fear
during the entry of competitors into the Delhi markets, showed excitement at the
availability of satellite channels in the Delhi households, visualized their cash
bells ringing with the increase in purchasing power of the Delhi masses that came
equivalent to their urban counterparts. They traced a constant rise in the demand
for those products that were once confined mostly to the urban houses. But,
blame it on the kind of awareness created by the companies people started
using the products for other purposes as seen earlier.

Out of 300 sample size we consider to choose first strongly agree respondent
who believes that Vodafone product is affordable for him/her 25% respondent out
of 300 says Vodafone product is affordable in comparative of other competitor.
While 33% are only agree with this statement that Vodafone has much affordable
price of their respective product. Now moving ahead 28% respondent are still not
agree or strongly disagree with this question they thought Vodafone products are
much costlier than the other mobile service provider companies product.

14% respondent said they have mixed view about the affordability these
people are those who are richer in Delhi region.

Recommendation for Vodafone would be target 28% people also to provide


much more scheme and plan so they comes under the pie of affordable range

RECOMMENDATION

Today the marketer truly understands the needs of the Delhi consumers, he
should strive to provide them with those products and services that would
meet their requirements. The marketer has to focus on his core competencies
like the technological expertise to design the products for the Delhi masses.
Companies like Cavin Care who launched their shampoo in sachets, Britannia
who conveniently packaged its Tiger brand biscuits with low price tag are the
best examples of understanding the Delhi customer's needs and providing
them with the desired products.

The marketer's basic need is to understand the pulse of the Delhi masses and serve
them accordingly. The companies need to make proper assessment while marketing
for the Delhi India. This could most probably happen in one way by changing the
profile of their managers. As most of them are management graduates bred in urban
areas and are taught marketing principles and strategies applicable for the western
countries, there is a mismatch in their thinking and the requirements of the Delhi
consumers. Hence, hiring professionals who have expertise in Delhi marketing would
go a long way to improve the situation as they can truly understand the Delhi
traditions and cultures, understand the feelings of Delhi people before designing and
actually launching the product. It is very essential for the Delhi marketer to
understand the psychology of their consumers in terms of their usage habits and
shopping behavior along with their emotions and value systems. The integration of
both technological and managerial knowledge would help them to develop the
various marketing strategies for the Delhi Indian markets. This will further lead to
technologically superior, robust and low cost products that would be in resemblance
with the Indian tradition and culture.

The marketers may also consider depending more on traditional media when
marketing for Delhi consumers. This unconventional method acts as an effective
way to create awareness as mass media is unreliable as it is too glamorous and
interpersonal for the Delhi market. Uses of skits, magic shows, and education by

NGOs are some of the most preferred traditional media which the marketers
can usually use as it goes well with the tastes of the Delhi consumers.

According to our sample size 300 here are the question would gives the insight Study
on buying behaviour of Delhi consumer indicates that the Delhi retailers influences
35% of purchase occasions. Therefore sheer product availability can affect decision
of brand choice, volumes and market share. Some of the FMCG giants like HLL took
out project streamline to significantly enhance the control on the Delhi supply chain
through a network of Delhi sub-stockists, who are based in the Delhis only.

Form our survey result it is showing that 31% of says that Vodafone
connection or recharges are easily available in their respective area and they
are strongly agree with this.

Now the segment of people where they not strongly agree with the statement that
Vodafone product reached their respective area 27% respondent said yes some time
they will get and some time not also they suggested that some time new connection
is not available. Also 34% respondent responded that they either strongly disagree or
disagree with the statement that Vodafone not reached their respective area so far.
Only 8% respondent says that they have neutral opinion on this.

Recommendation for Vodafone would be company can target first 34% people those
who are disagree and not satisfied with the product availability of the Vodafone so at
least Vodafone have more than 60% market share of those people who at least knew
the product is available near store so they can easily bought them.

BIBLIOGRAPHY

Book & Research Paper

Philip & Kotler: Marketing management

Wharton business review

HBS (Harvard business review)

Internet

Company website

www.marketingtimes.com

www. Airtel.com

Www. Idea.com