Beruflich Dokumente
Kultur Dokumente
impact on industry”
Prepared By
Bhuvar Rajsee R.
Roll No. SF – 1, MBA SEM – 4
Guided by
Prof. Vishal Javiya
Academic Year
2008-10
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Submitted to
Smt. R D Gardi Department of Business Management,
Saurashtra University, Rajkot
DECLARATION
This has not been previously submitted to any other university for
any examination.
Date: - 12-4-2010
Place: - Rajkot
Signature
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
PREFACE
MBA is a course where getting theoretical knowledge only won’t serve the
purpose. The effective application of the theoretical aspects in the
practical situations should be given more importance. So as a part of
academic activity the MBA students are required to undergo research
report after the end of 4th Semester. During the research study i get the
opportunity to apply the concepts they have learned in first three
semesters.
Here, I tried my level best to represent all the information and I have
expressed my deliberated efforts to make my report clean & specific.
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
ACKNOWLEDGEMENT
Lastly, I extend my thanks to all those whose name have not been
mentioned way in successfully carrying out the project report.
Date: - 12-4-2010
Place: - Rajkot.
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Contents
1 Executive summary 6
2 Introduction 10
⇒ Objective 11
⇒ Research methodologies 12
⇒ Regulatory Authority 31
1. Airtel 42
2. Reliance communications 46
3. Vodafone Essar 49
4. BSNL 53
5. Idea cellular 57
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Executive summary
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
economic and social development of the country. It is critical not only for
the development of the Information Technology industry, but also has
widespread ramifications on the entire economy of the country. It is also
anticipated that going forward, a major part of the GDP of the country
would be contributed by this sector.
The cellular operators are facing the biggest threat ever by the CDMA
(Code Division Multiple Access), i.e. Rcom and Tata Tele services. Due to
cheaper rates, better technology & latest innovations the cellular
operators are coming with the new schemes and decreased tariffs to
retain the customers so they do not switch. Introduction of Satellite
phones by Iridium Inc. may also affect the cellular market. Even though
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Introduction
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Objective
Main-objective
Sub-objective;
⇒ To understand price-war.
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Research methodologies
Types of data:
⇒ Primary Data: -data are those, which are collected for the first
time and thus happen to be original in character.
Data Source:
We have taken secondary data which are related to prepare project. For
comparison also we taken secondary data and from that we have
prepared interpretation. Other analysis we have made from collected data
only. This way, we have prepared project by using secondary data.
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
The entire sector is now open to unrestricted competition in all. The opening
of the sector has not only led to rapid growth but also helped a great deal
towards maximization of consumer benefits. The tariffs have been falling
continuously across the board as a result of healthy and unrestricted
competition and India today has one of the lowest tariffs in the world.
Besides, as a result of the various measures and initiatives taken by the
Government, India is now fast emerging as one of the leading telecom
nations.
The reforms process in the telecom sector is still on, aiming to remove the
balance hurdles and limitations. With a strong population of over 1.16 Billion,
India has become one of the most dynamic and promising. Telecom markets
of the world. In recent times, the country has emerged as one of the fastest
growing telecom markets in the world. It has third largest telecom
network and the second largest wireless network in the world.
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Dec.2009 India have the 525.15 million subscribers, it is 22x times higher
than 1999.
During this period call charges reduce 56 x times, in compare to 1999 Rs
16.80 per minute.
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
corners of the hexagons rather than the centers and have directional
antennas that would transmit/receive in three directions (see picture at
right) into three adjacent hexagon cells. The technology did not exist then
and the frequencies had not yet been allocated. Cellular technology was
undeveloped until the 1960s, when Richard H. Frenkiel and Joel S. Engel
of Bell Labs developed the electronics.
Recognizable mobile phones with direct dialing have existed at least since
the 1950s. In the 1954 movie Sabrina, the businessman Linus Larrabee
(played by Humphrey Bogart) makes a call from the phone in the back of
his limousine.
The first person to have a mobile phone in the United Kingdom was
reputedly Prince Philip, who had a system fitted into the trunk of his Aston
Martin in 1957. The Prince could make phone calls to the Queen while
driving, which was thought to be quite amazing at the time. The Duke of
Gloucester heard about the mobile phone and tried to obtain one, but the
Post Office denied his request. They were prepared to indulge the
husband of Her Majesty, but nobody else, as the system used an entire
dedicated radio frequency.
The first fully automatic mobile phone system, called MTA (Mobile
Telephone system A), was developed by Ericsson and commercially
released in Sweden in 1956. This was the first system that did not require
any kind of manual control in base stations, but had the disadvantage of a
phone weight of 40 kg (90 lb.). MTB, an upgraded version with transistors,
weighing 9 kg (20 lb.), was introduced in 1965 and used DTMF signaling.
It had 150 customers in the beginning and 600 when it shut down in
1983.
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
In 1958 the USSR also began to deploy the "Altay" national civil mobile
phone service especially for motorists. The newly-developed mobile
telephone system was based on Soviet MRT-1327 standard. The main
developers of the Altay system were the Voronezh Science Research
Institute of Communications (VNIIS) and the State Specialized Project
Institute (GSPI). In 1963 this service started in Moscow, and in 1970 the
Altay service already was deployed in 30 cities of the USSR. The last
upgraded versions of the Altay system are still in use in some places of
Russia as a trunking system.
In 1966, Bulgaria presented the pocket mobile automatic phone RAT- 0.5
combined with a base station RATZ-10 (RATC-10) on Interorgtechnika-66
international exhibition. One base station, connected to one telephone
wire line, could serve up to six customers.
In 1967, each mobile phone had to stay within the cell area serviced by
one base station throughout the phone call. This did not provide
continuity of automatic telephone service to mobile phones moving
through several cell areas. In 1970 Amos E. Joel, Jr., another Bell Labs
engineer invented an automatic "call handoff" system to allow mobile
phones to move through several cell areas during a single conversation
without loss of conversation.
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
One of the first successful public commercial mobile phone networks was
the ARP network in Finland, launched in 1971. Posthumously, ARP is
sometimes viewed as a zero generation (0G) cellular network, being
slightly above previous proprietary and limited coverage networks.
First generation:
On April 3, 1973, Motorola employee Dr. Martin Cooper placed a call to Dr.
Joel S. Engel, head of research at AT&T's Bell Labs, while walking the
streets of New York City talking on the first Motorola DynaTAC prototype
in front of reporters. Motorola has a long history of making automotive
radios, especially two-way radios for taxicabs and police cruisers.
Second generation:
Coinciding with the introduction of 2G systems was a trend away from the
larger "brickle" phones toward tiny 100–200g hand-held devices, which
soon became the norm. This change was possible through technological
improvements such as more advanced batteries and more energy-
efficient electronics, but also was largely related to the higher density of
cellular sites caused by increasing usage levels. This decreased the
demand for high transmission powers to reach distant towers for
customers to be satisfied.
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Third generation:
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Introduction of Telegraph:
The postal and telecom sectors had a slow and uneasy start in India. In
1850, the first experimental electric telegraph Line was started between
Kolkata and Diamond.
In 1851, it was opened for the British East India Company. The Posts and
Telegraphs department occupied a small corner of the Public Works
Department at that time. Construction of 4,000 miles (6,400 km) of
telegraph lines connecting Kolkata (Calcutta) and Peshawar in the north
via Agra, Mumbai (Bombay) through Sindwa Ghats, and Chennai in the
south, as well as Ootacamund and Bangalore was started in November
1853. Dr. William O'Shaughnessy, who pioneered telegraph and
telephone in India, belonged to the Public Works Department. He tried his
level best for the development of telecom throughout this period. A
separate department was opened in 1854 when telegraph facilities were
opened to the public.
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Further developments:
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
While all the major cities and towns in the country were linked with
telephones during the British period, the total number of telephones in
1948 was only around 80,000. Even after independence, growth was
extremely slow. The number of telephones grew leisurely to 980,000 in
1971, 2.15 million in 1981 and 5.07 million in 1991.
In 1975, the Department of Telecom (DoT) was separated from P&T. DoT
was responsible for telecom services in entire country until 1985 when
Mahanagar Telephone Nigam Limited (MTNL) was carved out of DoT to
run the telecom services of Delhi and Mumbai. In 1990s the telecom
sector was opened up by the Government for private investment as a part
of Liberalization-Privatization-Globalization policy. Therefore, it became
necessary to separate the Government's policy wing from its operations
wing. The Government of India corporatized the operations wing of DoT
on October 01, 2000 and named it as Bharat Sanchar Nigam Limited
(BSNL). Many private operators, such as Reliance India Mobile, Tata
Telecom, Vodafone, BPL, Bharti, Idea etc., successfully entered the high
potential Indian telecom market.
Development of cellular industry:
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
steam power in the 18th century and electricity in the 19th, has spurred a
major improvement in the productive capacities of the economies.
Introduction:
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Liberalization:
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Bharti, a part of Bharti Enterprises, was the first to launch its cellular
service on July 7, 1995. Bharti's cellular services were launched under the
brand name ‘AirTel'and was categorized as pre-paid services and post-
paid services. The postpaid service was launched under the brand name
“Airtel” whereas its prepaid services were launched under the brand
name “Magic”...
Privatization:
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Civil courts are crowded and consumer courts are slowed down by
inadequate infrastructure and often a poor understanding of consumer
issues. The solution lies in expanding the role of independent regulators
and asking them to create grievance redressed courts or ombudsmen to
hear consumer complaints and grant swift justice. But unless the judicial
system makes it much too expensive for companies to ignore their
customers, the benefits of privatization will invariably taper off within a
couple years after any sector is opened up to competition.
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Policy Initiatives:
India is one of the most deregulated telecom markets in the world. Private
participation is permitted in all segments of the services – international
long distance, domestic long distance, basic, cellular, internet, radio-
paging, and a number of value-added services. Private participation in
international voice services has been a significant step undertaken by the
government. Private players have been allowed to provide international
long distance services since April 2002; two years ahead of schedule. The
government has announced the New Telecom Policy (NTP) 1999 to further
de-regulate the sector with respect to services like basic, international
long distance (ILD), national long distance (NLD) and Wireless in Local
Loop (WLL) among others.
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Globalization:
In 1995, the Indian cellular industry looked very promising. With ever
increasing globalization and expanding business activities, cell phones
became a necessity for business on the move. The younger generation
also began to flaunt the cell phone as a status symbol. Soon cell phones
were being used not only as a tool for communication but also as a source
of entertainment.
As per the FDI policy for the Telecom Sector, investment up to 49% is
permitted in Basic, Cellular and other value added services, which is hiked
to 74%; up to 74% is permitted in Internet, infrastructure and radio
paging services and up to 100% is permitted in manufacturing, Internet
service, voice and electronic mail, based on certain conditions for
fulfillment as a part of licensing and security requirements, laid down by
the Department of Telecommunications, Government of India. Several
announcements were made relating to policy change covering change of
ADC from per minute charges to revenue share, and mobile number
portability. FDI ceiling increment has led to an increase in FDI in mobile
services whereas ADC has resulted in reduction of mobile tariffs in the
country. On the policy front, per minute ADC on domestic calls was
changed to revenue share regime. And the percentage charged is 1.5% of
AGR (adjusted gross revenue).
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Regulatory Authority
Department of Telecom:
Telecom Commission:
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
➢ Loop mobile
➢ Reliance Telecom Ltd
➢ Idea Cellular Ltd
➢ Aircel Ltd
➢ Vodafone Group
➢ Bharti Airtel Ltd
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Government policy:
The government of India has adopted a new economic policy for the
telecommunication market in India. This policy has been impactive from
1994 and the Govt. of India with the aim to accelerate India's growth in
export production and international market formulated it. The national
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
A number of policy changes have been made in the recent past which, if
implemented, is bound to have a significant impact on the telecom
scenario. The most significant among the changes is the announcement
of a New Telecom Policy (NTP) 1999. The Policy envisages development of
telecom facilities in remote, rural and tribal areas of the country and their
availability to the masses at affordable costs.
The NPT 1999, which has come into impact from April 1, 1999, aims at
making telephones available on demand by the year 2002 and to achieve
teledensity of seven per hundred persons by the year 2005. In case of
rural areas, the current teledensity is proposed to be raised from 0.4 to 4
by the year 2010. The policy document of NPT outlines rapid growth in
the telecom sector in India with a projected teledensity of 15 by the year
2010.
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
In addition to some of the objectives of NTP 1994 not being fulfilled, there
have also been far reaching developments in the recent past in the
telecom, IT, consumer electronics and media industries world-wide.
Convergence of both markets and technologies is a reality that is forcing
realignment of the industry. At one level, telephone and broadcasting
industries are entering each other's markets, while at another level
technology is blurring the difference between different conduit systems
such as wire line and wireless. As in the case of most countries, separate
licenses have been issued in our country for basic, cellular, ISP, satellite
and cable TV operators each with separate industry structure, terms of
entry and varying requirement to create infrastructure. However, this
convergence now allows operators to use their facilities to deliver some
services reserved for other operators, necessitating a relook into the
existing policy framework. The new telecom policy framework is also
required to facilitate India's vision of becoming an IT superpower and
develop a world class telecom infrastructure in the country.
This Act may be called the Telecom Regulatory Authority of India Act,
1997.
Introduction:
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
India has registered an impressive growth in the telecom sector. Over the
years the country has developed a vast telecom network comprising over
25000 telephone exchanges and 21.5 million working connections. There
is a large network of optical fibre cables, digital microwave and satellite
communication systems. A very strong industrial base has been built in
the telecom sector with a large number of national and multi-national
telecom companies.
The NPT 1999, which has come into impact from April 1, 1999, aims at
making telephones available on demand by the year 2002 and to achieve
teledensity of seven per hundred persons by the year 2005. In case of
rural areas, the current teledensity is proposed to be raised from 0.4 to 4
by the year 2010. The policy document of NPT outlines rapid growth in
the telecom sector in India with a projected teledensity of 15 by the year
2010.
This will require a massive investment of over 23 billion dollars in the next
five years and 65 billion over the next 10 years in the telecom sector.
Accelerator:
The NPT 1999 has been hailed the world over as a progressive and
forward-looking policy in tune with the high technological changes of the
21st century. It addresses the various problems affecting the telecom
sector. The new policy comes as a breath of fresh air for the beleaguered
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Bail-out package:
The Government later came out with what came to be known as a bail-out
package allowing licensees of all telecom services including basic,
cellular, paging and other value-added services to migrate to the
revenue-sharing system under the NPT 1999. According to the
Government, this was necessitated because a large number of licensees
under the 1994 Telecom Policy were finding it difficult to pay the license
fee and wanted to switch over to the revenue-sharing regime under the
new policy.
The Government clarified that it did not want to discriminate between the
existing telecom operators and the new licensees. Moreover, future
collections under the old license fee regime were uncertain as many
cellular operating companies were likely to turn sick.
Under the bail-out package, the private telecom operators were required
to pay up 30 per cent of arrears of license fee including interest last by
August 31 as provided in the license agreement for migrating to the New
Telecom Policy. Requisite bank guarantees for the remaining amount of
arrears, including interest, were to be furnished for the period till the
arrears were cleared by January 31 next year. Relief was provided to the
licensees by extending the period of their licenses from the present 10
years to 20 years from the date of existing license agreement.
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
India is the developing country and so all the industry in India are
developing day by day, but cellular service industry in India is in emerging
stage. So, there are much chances of development in this industry and
chances of new players to enter into this industry. In India, more than
45% people have mobiles and the others do not have mobiles. The
mobiles are useless without SIM card and the companies who provide the
SIM card are known as cellular service companies. In India, public
companies as well as private companies are in this business. The
companies who provide cellular services are as follows.
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
[Virgin
Mobile
(50%)
Tata Tele.
(50%)]
7 Aircel GSM GSM 900/1800 31.02399 Maxis
7 Communicat
ions (74%)
Apollo
Hospital
(26%)
8 MTNL GSM, GSM 900, 4.875913 State-owned
CDMA CDMA2000 1x
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Bharti Airtel
Introduction:
Type Public
Founded July 07, 1995
Founder(s) Sunil Bharti Mittal
Headquarters New Delhi, India
Key people Sunil Mittal
(Chairman) & (MD)
Sanjay Kapoor
(CEO)
Industry Telecommunications
Products Wireless
Telephone
Internet
Satellite television
Revenue ▲ US$ 7.254 billion (2009)
Operating income ▲ US$ 2.043 billion (2009)
Net income ▲ US$ 1.662 billion (2009)
Total assets ▲ US$ 11.853 billion (2009)
Owner(s) BhartiEnterprises (64.76%)
SingTel (30.5%)
Vodafone (4.4%)
Website www.bharti.com
www.airtel.in
subscribers as of 2009[update]. With this, Bharti is now the world’s third-
largest, single-country mobile operator and sixth-largest integrated
telecom operator. It also offers fixed line services and broadband
services. It offers its TELECOM services under the Airtel brand and is
headed by Sunil Bharti Mittal. The company also provides telephone
services and broadband Internet access (DSL) in top 95 cities in India. It
also acts as a carrier for national and international long distance
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
In December 2008, Bharti Airtel rolled out third generation services in Sri
Lanka in association with Singapore Telecommunications. SingTel is a
major player in the 3G space in Asia. It operates third generation
networks in several markets across Asia.
Airtel in Bangladesh:
Touchtel:
BlackBerry:
I Phone 3G:
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
The Apple iPhone 3G was rolled out in India on 22 August 2008 via Airtel&
Vodafone.
Merger talks:
In May 2008, it emerged that Bharti Airtel was exploring the possibility of
buying the MTN Group, a South Africa-based telecommunications
company with coverage in 21 countries in Africa and the Middle East. The
Financial Times reported that Bharti was considering offering US$45
billion for a 100% stake in MTN, which would be the largest overseas
acquisition ever by an Indian firm. However, both sides emphasize the
tentative nature of the talks, while The Economist magazine
noted, "If anything, Bharti would be marrying up," as MTN has more
subscribers, higher revenues and broader geographic coverage. However,
the talks fell apart as MTN group tried to reverse the negotiations by
making Bharti almost a subsidiary of the new company.
In May 2009, Bharti Airtel again confirmed that it is in Talks with MTN and
companies have now agreed discuss the potential transaction exclusively
by July 31, 2009. Bharti Airtel said in a statement “Bharti Airtel Ltd is
pleased to announce that it has renewed its effort for a significant
partnership with MTN Group".
Talks eventually ended without agreement, some sources stating that due
to the South African government opposition.
Promotional Sponsorship:
Bharti Airtel signed a five-year deal with ESPN Star Sports to become the
title sponsor of the Champions League Twenty20 cricket tournament. The
tournament itself is named "Airtel Champions League Twenty20."
On the 9th of May, 2009 Airtel signed a major deal with Manchester
United Football Club. As a result of the deal, Airtel gets the rights to
broadcast the matches played by the team to its customers.
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Subscriber base:
The Airtel subscriber base according to TRAI - Telecom Regulatory
Authority of India as of February 2009 was:
Airtel’s Subscriber
Reliance communications
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Introduction:
RelCom is also into Wire line Business throughout India and has the
largest optical fiber communication (OFC) backbone architecture [roughly
110,000 km] in the country.
Reliance Communications has launched its Direct To Home (DTH) TV also,
known as "Big TV". RelCom have presence across all B2C communications
channel in one of the fastest growing markets in the world.
In 2007, Reliance Communications had bid for 67% of Hutch but lost to
Vodafone.
Acquisitions:
Recent news:
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
On the 19th December 2008, one of the flag telecom cables in the
Mediterranean sea was damaged. Flag Telecom is now part of Reliance
Globalcom.
On the 30th December 2008, Reliance became the first telecom company
in India to operate in both CDMA as well as GSM technologies.
Reliance GSM:
Subscriber base:
The Reliance subscriber base according to TRAI - Telecom Regulatory
Authority of India as of January 2010 was:
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Reliance’s Subscriber(GSM)
Additions 601289 -
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Vodafone Essar
Introduction of Vodafone:
Type Limited
Founded 1994 as Hutchison Essar
Headquarters Mumbai, Maharashtra, India
Industry Mobile telecommunications
Products Mobile networks,
Telecom services, Etc.
Owner(s) Vodafone Group (67%)
Essar Group (33%)
Employees 10,000 – March 31, 2009
Website www.vodafone.in
in India that covers 23 telecom circles in India based in Mumbai. Vodafone
Essar is owned by Vodafone 67% and Essar Group 33%. It is the second
largest mobile phone operator in terms of revenue behind Bharti Airtel,
and third largest in terms of customers. As of June 31, 2009 (2009 -06-31)
[update]
Vodafone India has 18.8% customer market share and 20.7%
revenue market share.
Vodafone Essar provides 2.75G services based on 900 MHz and 1800 MHz
digital GSM technology, offering voice and data services in 23 of the
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Vodafone as brands:
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
In Delhi, UP (E), Rajasthan and Haryana, ESSAR was the major partner.
But later Hutch took the majority Stake.
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Subscriber base:
The Vodafone subscriber base according to TRAI - Telecom Regulatory
Authority of India as of January 2010 was:
Vodafone’s Subscriber
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
previo
us
month
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
BSNL
Introduction:
Type State-owned
Founded 19th century, incorporated 2000
Headquarters Bharat Sanchar Bhawan, Harish
Chandra Mathur Lane, Janpath, New
Delhi
Key people KuldeepGoyal
(Chairman) & (MD)
Industry Telecommunications
Products Wireless
Telephone
Internet
Television
Revenue ▼ US$ 7.03 billion (2009)
Owner(s) The Government of India
Employees 357,000 – March 31, 2009
Website Bsnl.co.in
Corporation Limited) is a state-ownedtelecommunication company in
India. BSNL is the sixth largest cellular service provider, with over 57.22
million customers as of December 2009 and the largest land line
telephone provider in India. Its headquarters are at Bharat Sanchar
Bhawan, Harish Chandra Mathur Lane, Janpath, and New Delhi. It has the
status of Mini Ratna, a status assigned to reputed public sector
companies in India.
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Services:
BSNL provides almost every telecom service in India. Following are the
main telecom services provided by BSNL:
Universal Telecom Services: Fixed wire line services & Wireless in Local
loop (WLL) using CDMA Technology called bfone and Tarang respectively.
As of December 31, 2007, BSNL has 81% market share of fixed lines.
Intelligent Network (IN): BSNL provides IN services like televoting, toll free
calling, premium calling etc.
3G: BSNL offers the '3G' or the'3rd Generation' services which includes
facilities like video calling etc.
IPTV: BSNL also offers the 'Internet Protocol Television' facility which
enables us to watch television through internet.
FTTH: Fiber to The Home facility that offers a higher bandwidth for data
transfer. This idea was proposed on post-December 2009.
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Subscriber base:
The BSNL subscriber base according to TRAI - Telecom Regulatory
Authority of India as of January 2010 was:
BSNL’s Subscriber
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Type Public
Founded 1995
Headquarters Santacruz East, Mumbai, India[1]
Key people Kumar Mangalam Birla
(Chairman)
Sanjeev Aga
(MD)
RajatMukharjee
(VP Corporate Affairs)
Industry Telecommunications
Products Mobile
Owner(s) Aditya Birla Group (49.05%)
Axiata Group Berhad (15%)
Providence Equity (10.6%)
Website IdeaCellular.com
Idea cellular
Introduction:
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
The company has its retail outlets under the "Idea n' U" banner. The
company has also been the first to offer flexible tariff plans for prepaid
customers. It also offers GPRS services in urban areas.
Idea Cellular won the GSM Association Award for "Best Billing and
Customer Care Solution" for 2 consecutive years.
Holding:
Initially the Birla’s, the Tata’s and AT&T Wireless each held one-third
equity in the company. But following AT&T Wireless' merger with Cingular
Wireless in 2004, Cingular decided to sell its 32.9% stake in Idea. This
stake was bought by both the Tata’s and Birla’s at 16.45% each.
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Tata's foray into the cellular market with its own subsidiary, Tata Indicom,
a CDMA-based mobile provider, cropped differences between the Tata’s
and the Birla’s. This dual holding by the Tata’s also became a major
reason for the delay in Idea being granted a license to operate in Mumbai.
This was because as per Department of Telecommunications (DOT)
license norms, one promoter could not have more than 10% stake in two
companies operating in the same circle and Tata Indicom was already
operating in Mumbai when Idea filed for its license.
The Birla’s thus approached the DOT and sought its intervention and the
Tata’s replied by saying that they would exit Idea but only for a good
price. On April 10, 2006, the Aditya Birla Group announced its acquisition
of the 48.18% stake held by the Tata’s at Rs. 40.51 a share amounting to
Rs. 44.06 billion. While 15% of the 48.14% stake was acquired by Aditya
Birla Nuvo, a company in-charge of the Birla’s' new business initiatives,
the remaining stake was acquired by Birla TMT holdings Private Ltd., an
AV Birla family owned company. Currently, Aditya Birla Group holds
49.1% of the total shares of the company. Malaysia based Axiata controls
a 14.99% stake in the company.
Subscriber base:
The Idea subscriber base according to TRAI - Telecom Regulatory
Authority of India as of January 2010 was:
Idea’s Subscriber
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Introduction:
Type Private
Founded 2000
Headquarters Navi Mumbai, India
Key people Mr. Ratan N. Tata
(Chairman)
Anil Kumar Sardana
(MD)
Industry Telecommunications
Products Wireless
Telephone
Internet
Television
Employees 350,000
Parent Tata Group
Divisions Tata Indicom (CDMA)
Tata DoCoMo (GSM)
Virgin Mobile (CDMA)
Website Tatateleservices.com
in Tata Teleservices for about Rs 13,070 crores ($2.7 billion) or an
enterprise value of Rs 50,269 crores ($10.38 billion). In Feb 2008, TTSL
announced that it would provide CDMA mobile services targeted towards
the youth, in association with the Virgin Group on a Franchisee model
basis.
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Company background:
The company is the market leader in the fixed wireless telephony market
with a total customer base of over 3.8 million.
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Tata Teleservices is an unlisted entity. Tata Group and group firms own
the majority of the company; NTT DoCoMo holds 26% while investor C.
Sivasankaran holds 8%.
Senior Management:
The Board of Directors for TTSL includes Tata Sons Chairman Ratan Tata,
while the company is currently headed by its Managing Director, Mr. Anil
Kumar Sardana.
Market Data:
Tata Indicom in Jan 2010 crossed the 57 million subscribers mark in the
wireless category with an overall subscriber base of over 57 million.
Network:
Business Areas:
Tata Teleservices offers multiple tariff plans in both the Post-paid and Pre-
Paid category. It also offers Mobile Value Added Services to subscribers.
Branding:
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Tata Teleservices has recently launched the Virgin Mobile Brand to target
the youth segment.
Rural Telephony:
Retail:
Under its VAS bouquet, TTSL offers services such as News, Games, Faith
and Prayers, Ringtones, Streaming TV, Fun Shows, Video Zone, Song
Download Express, Cricket, Internet Surfing, Astrology, and Mobile Office
among others.
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Subscriber base:
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Andhra 6,075,177
Pradesh
Assam 72,196
Bihar 2,407,872
Chennai 1,246,101
Delhi 5,161,235
Gujarat 1,560,651
Himachal 143,420
Pradesh
Haryana 2,030,792
J&K 112,837
Karnataka 4,157,341
Kerala 2,045,409
Kolkata 1,992,435
Madhya 2,651,632
Pradesh
Maharashtra 6,674,368
Mumbai 3,620,828
North East 51,866
Orissa 1,583,077
Punjab 1,714,520
Rajasthan 2,719,185
Tamilnadu 2,466,343
U.P. (E) 1,805,549
U.P (W) 2,615,399
W.B. 1,084,740
Total 53,992,97 57,329,4 17.46%
3 49
Additions
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Aircel
Introduction:
Type Private
Founded 1999
Headquarters Chennai
Key people Gurdeep Singh, COO
Industry Telecommunications
Products Mobile
Telecommunication operator
Owner(s) Maxis Communications (74%)
Apollo Hospital
Website Aircel.com
and postpaid GSM cellular phone coverage throughout India. Aircel is a
joint venture between Maxis Communications of Malaysia and Apollo
Hospital Enterprise Ltd of India. Maxis have a 74% stake in Aircel and the
remaining 26% is with Apollo Hospitals. It is India’s fifth largest GSM
mobile service provider with a subscriber base of over 27.7 million, as of
October 31, 2009. It has a market share of 12.8% among the GSM
operators in the country. As on date, Aircel is present in 18 of the total 23
telecom circles (including Andhra Pradesh, Assam, Bihar & Jharkhand,
Chennai, Delhi & NCR, Himachal Pradesh, Jammu & Kashmir, Karnataka,
Kerala, Kolkata, Mumbai, North East, Orissa, Rest of Maharashtra & Goa,
Rest of Tamil Nadu, Rest of West Bengal, Uttar Pradesh East, Uttar
Pradesh West) and with licenses secured for the remaining 5 telecom
circles, the company plans to become a pan-India operator by 2010.
Additionally, Aircel has also obtained permission from Department of
Telecommunications (DoT) to provide International Long Distance (ILD)
and National Long Distance (NLD) telephony services. It is also a category
A ISP. It is also having the largest service in Tamilnadu.
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Aircel has won many awards for its services. Aircel was honored at the
World Brand Congress 2009 with three awards, Brand Leadership in
Telecom, Marketing Campaign & Marketing Professional of the Year. Aircel
was honored by CMAI INFOCOM National Telecom Award 2009 for,
‘Excellence in Marketing of New Telecom Service’. Aircel had been
selected as the best regional operator in 2008 by Tele.net. Aircel was
rated as the top mid-size utility company in Business World’s ‘List of Best
Mid-Size Companies’ in 2007. Aircel got the highest rating for overall
customer satisfaction and network quality in 2006 by Voice and Data.
Aircel is one of the sponsors of the Indian Premier League Cricket Team
Chennai Super Kings, which is captained by Mahendra Singh Dhoni. It is
also the major sponsors for Chennai Open (the only ATP tennis
tournament in India), and Professional Golf Tour of India.
In latest news, Maxis, Aircel's majority stake holder, raised RM 11.2 billion
(USD 3.36 billions) for its shareholders, making it the largest IPO in
Malaysia and Southeast Asia.
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Aircel’s Subscriber
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Subscriber base:
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
MTNL
Type State-ownedPublic
Founded 1986
Headquarters New Delhi, India
Key people Kuldi Singh
(CMD)
AnitaSoni
(CFO)
S.M.Talwar
(ED-NewDelhi)
J.Gopal
(ED-Mumbai)
Industry Telecommunications
Products Wireless
Telephone
Internet
Television
Revenue ▼INR 52.895 million (2009)
Net income ▼INR 1.626 million (2009)
Owner(s) The Government of India
Website www.mtnl.net.in
Introduction:
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Products:
MTNL has been actively providing connections in both Mumbai and New
Delhi areas and the efficiency of the company has drastically improved
from the days when one had to wait years to get a phone connection to
now when one can get a connection in even hours. Pre-activated Mobile
connections are available at many places across both Metros. MTNL has
also unveiled very cost-impactive Broadband Internet access plans
(TriBand) targeted at homes and small businesses. At present MTNL
enjoys the largest of the market share of ISP services in Mumbai and
Delhi.
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
on their smart phones. MTNL also provides data cards for surfing internet
on the PC and Laptop at 3.6 Mbps. MTNL will be installing 15 lakh 3G lines
in the first phase of its 3G roll-out in Mumbai and Delhi (which currently
have 40 lakh existing mobile lines).
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Recent happenings:
On December 11, 2008 MTNL became the First Telco in India to launch 3G
mobile phone services with roll out of Video call and Mobile TV service in
New Delhi.
Mr. RSP Sinha, the CMD of MTNL resigned from the post on 12th January,
2010 in wake of the non-extension of the period by Govt. Sh. Sinha has
been facing charges of corruption and accepting bribe from Motorola Inc.
and a criminal case has been going against him in a CBI court at Delhi.
Subscriber base:
The MTNL subscriber base according to TRAI - Telecom Regulatory
Authority of India as of January 2010 was:
MTNL’s Subscriber
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
previo
us
month
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Introduction:
Acquisition by Sistema:
The largest public diversified corporation in Russia and the CIS - Sistema
acquired a 10% stake in ShyamTelelink for a total cash consideration of
US$ 11.4 million at the end of September 2007. In October 2007, Sistema
signed a share purchase agreement for the acquisition of an additional
41% stake in ShyamTelelink and a call option agreement, which gives
Sistema the right to increase its stake in ShyamTelelink from 51% up to a
maximum of 74%. Later in December 2007, Sistema received an approval
for the acquisition of the blocking stake in ShyamTelelink from the
Foreign Investment Promotion Board (FIPB) of India. As a result of the
acquisition of the additional 41% stake, the overall purchase price totaled
US$ 58.1 million.
Pan-India rollout:
Shyam Telecom along with their partner Sistema had applied for UASL
license in 21 telecom circles of India. In August 2008, they became the
first new mobile operator to get a pan-India start-up spectrum to start
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Mts ’s Subscriber
Andhra
Pradesh
Assam
Bihar 240,432
Chennai 104,900
Delhi 175,867
Gujarat
Himachal
Pradesh
Haryana 331
J&K
Karnataka 105,948
Kerala 159,704
Kolkata 278,552
Madhya
Pradesh
Maharashtra 2
Mumbai 5,261
North East
Orissa
Punjab
Rajasthan 1,160,142
Tamilnadu 367,940
U.P. (E)
U.P (W)
W.B. 443,662
Total 3,042,741
Additions
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
LOOP Mobile
Introduction:
Type Private
Founded 1994 as BPL Mobile
2009 as Loop Mobile
Headquarters Mumbai, Maharashtra, India
Key people CEO Sandip Basu
Industry Telecom
Products Mobile
Telecommunication operator
Owner(s) Essar Group (8%)
Website www.loopmobile.in
Loop Mobile (Formerly BPL Mobile) is a mobile phoneservice provider in
India. It offers both prepaid and postpaidGSM cellular phone coverage in
Mumbai circle
Loop Mobile will also have the latest NGIP (Next Generation Internet
Protocol) and EDGE (Enhanced Data rates for GSM Evolution) technology.
The operator is hoping to leverage these technologies to introduce
innovative VAS, as well as micro-segmented tariffs for subscribers.
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Subscriber base:
The Loop mobile’s subscriber base according to TRAI - Telecom
Regulatory Authority of
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Uninor
Introduction:
Founded 2009
Type Joint Venture
Headquarters Gurgaon, India
Key people Stein-ErikVellan
(CEO)
SanjayChandra
(Chairman)
Industry Telecommunications
Products Wireless
Telephone
Internet
Owner(s) Telenor (67.25%)
Unitech Group (32.75%)
Employees 2,000
Website Uninor. In
holds a pan-India UAS license to offer telecommunications services in
each of India’s 22 circles. It has also received spectrum to roll out these
services in 21 of the 22 telecom circles. From November 2009, Uninor will
be owned 67.25% by Norwegian telecom giant Telenor, and 32.75% by
India's Unitech Group. Uninor has started mobile services in India at the
end of 2009, focusing on the GSM technology.
History:
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Uninor will organize with headquarters just outside Delhi (Gurgaon), and
11 regional hubs covering one or more of the total of 22 telecom circles.
To quickly launch mobile services only nine months after the foundation
of the new company, Uninor has entered into network and base station
service agreements with partners. Tower sharing agreements are
concluded with Wireless-TT Info Service Limited and Quippo Telecom
Infrastructure Limited. Telecommunications, network and radio equipment
is to be supplied by Alcatel-Lucent, Huawei Technologies India, Nokia
Siemens Networks and Ericsson. The company's IT services and
infrastructure is to be shared with Wipro Technologies.
Subscriber base:
The Uninor subscriber base according to TRAI - Telecom Regulatory
Authority of India as of January 2010 was:
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Uninor’s Subscriber
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Stel
Introduction:
Investors:
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Batelco serves both the corporate and consumer markets in the most
liberalized and competitive environment in the Middle East Africa
region. It delivers cutting-edge fixed and wireless telecommunications
services to its customers in Bahrain, Kuwait, Saudi Arabia, Jordan,
Yemen, Egypt and India.
Siva Group
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Subscriber base:
The Stel subscriber base according to TRAI - Telecom Regulatory
Authority of India as of January 2010 was:
Stel’ Subscriber
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
HFCL Infotel
Introduction:
HFCL Infotel Ltd. (Infotel) is a business venture of the HFCL Group. Infotel
is a "Total Telecom Solutions Provider" offering Fixed Line telephony
Infotel supports a wide Public Call Office (PCO) network across the state of
Punjab & Chandigarh. Now with over 45,000 PCOs, Infotel is deemed to
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
have the largest PCO network in India among all private fixed line services
operator in a single circle.
The Average Revenue per Line (ARPL) for Infotel is among the highest in
the country. There is a clear focus on acquiring quality subscribers
through well planned rollouts and focused revenues in marketing
strategy.
Subscriber base:
The HFCl Infotel subscriber base according to TRAI - Telecom Regulatory
Authority of India
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Price-war
How it happens!
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Cellular tariffs have dropped by over 56X since May 1999 - a feat
unparalleled by any other sector or industry in India. The average a
mobile tariff in Year 2010 was prevailing around ½ paisa per second as
against the peak ceiling tariff of Rs. 16.80 per minute, when NTP 99 was
announced.
Indian telecom market might be growing fast, but surviving in this highly
competitive market is not easy for telecom companies. Here’s the list of
schemes that fuelled the tariff war in India and brought down the ARPU
significantly.
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Chotta Recharge:
Non-stop Mobile:
So Life went good with Chotta recharge. But there was a problem in
prepaid mobile. You need to recharge regularly as the validity period is
limited. With the recharge card of Rs 200, you will get validity only for one
month. So people have to spend at least Rs2000 per year for their mobile
just to receive the incoming calls. Not so long.
Tata Indicom launched Non-stop mobile, a scheme where you don’t need
to recharge for 2 years but still get free incoming calls. Soon other players
responded to Tata Indicom’s plan and then come in Lifetime validity
(“lifetime validity in 999” Rupees plan launched in Nov/Dec. 2005) plan by
all major telecom players in India.
Customers are happy with their free incoming calls. Not the new telecom
players. Virgin Mobile jumped into the competitive Indian mobile telecom
market with the breakthrough-marketing scheme, Get paid for incoming
calls. 10 paisa free for every minute of incoming call. That’s the deal.
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
All major operators follow TTSL, launch 'pay per second' plans across various
circles; Idea, Aircel, SSTL, Vodafone-Essar, market leader Bharti Airtel, RCOM,
PSU behemoth BSNL and Loop Mobile all join the dogfight, no respite from
competitive intensity and tariff wars
With TTSL being the first to launch a 'pay per second' tariff plan, thus
throwing down the gauntlet
to other operators in a bid to garner initial subscriber traction for its
recently-launched GSM
services in partnership with Japanese telecom major, NTT DoCoMo, it has not
taken long for other.
Operators to follow suit in some shape or form. Idea Cellular, Aircel and
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
The PSU telecom behemoth, BSNL followed suit too, with plans to offer
such schemes to its post-paid subscribers also on the anvil, apart from pre-
paid subscribers. The one-circle operator,
Loop Mobile (Mumbai) has also launched a per-second pulse plan to its
subscribers, taking the total number of operators who have launched such
plans to nine. This clearly reflects the 'lack’ of freedom of choice' for
operators including the market leader to respond to competitive pressures
to ensure that they do not lose minutes and revenue market share. While the
launch of these plans is likely to make it tougher for newer entrants to gain
subscriber traction and could neutralize to an extent the usage of dual SIM
cards and 'price arbitrage' by subscribers, as users are likely to stick to the
network of the incumbent operator, in the interim it is likely to hurt RPMs and
slow revenue growth. We believe these competitive moves will accentuate
pressure on ARPUs and RPMs for the sector.
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
roaming, while outgoing calls would cost 60 paise per minute for 'on-net
calls' and 80 paise per minute for 'off-net calls'. Airtel pre-paid mobile
customers wishing to avail this benefit would be charged Rs 98, which
would give an incoming validity of one year, while post-paid users can
subscribe to a monthly rental plan. Bharti's move was followed by
other major operators like BSNL, TTS and Vodafone-Essar, which also
slashed roaming charges for their respective subscribers. Thus, with price-
wars being witnessed on all major fronts, pressure on RPMs is expected to
intensify in the near-term for all operators.
RCOM is the company to take the current price-war in the Indian telecom
sector to another level, slashing SMS rates in an attempt to garner greater
SMS volumes and attract more customers from the high SMS usage
customer bracket, such as the youth and young professionals. The Telco
has launched two new SMS tariff plans - one paisa per SMS, and unlimited
SMS at Re 1 per day. The new SMS tariffs are add-on plans and are
applicable for all RCOM customers (CDMA and GSM) as well as pre-paid and
post-paid customers. Customers can avail of the 1 paisa per SMS plan by
subscribing to a Standard Tariff Voucher on a payment of a rental of Rs 11
per month. Alternatively, the unlimited SMS plan can be subscribed to by the
Telco’s customers on a daily deduction of Re 1 per day from the pre-paid
balance (Rs 30 per month). For post-paid subscribers, the unlimited SMS
plan comes at a monthly rental of Rs 25. These tariffs are applicable across
local, national and roaming SMS.
As per TRAI data, the blended average revenues per user (ARPUs) per month
for the GSM segment stood at Rs 185 for 1QFY10, whereas for the CDMA
segment, they stood at Rs 92. For GSM, revenues from SMS stood at 4.2%
of the total, thus translating into around Rs 8 ARPU from SMS on a monthly
basis. For CDMA, SMS revenues as a percentage of ARPU stood at 6% in
1QFY10, translating into nearly Rs 6 ARPU from SMS on a monthly basis.
Thus, these figures are a clear reflection that SMS revenues are not a very
significant proportion of monthly ARPU for the industry.
For RCOM itself, in 3QFY09, the last quarter when the Telco had given out
details of the proportion of non-voice and SMS revenue, the latter accounted
for a mere 1.3% of ARPU, translating into just Rs 3 per user/month. The
plans launched by RCOM are likely to boost SMS volumes. The rentals being
charged by the Telco for the 1 paisa per SMS and unlimited SMS packs of
Rs 11 and Rs 30 per month, respectively (Rs 25 per month for the
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Uninor, the telecom venture between Norwegian telecom major Telenor and
Indian real estate firm
Unitech launched its services across eight circles, namely Tamil Nadu,
Kerala, Karnataka, Andhra Pradesh, Uttar Pradesh (East and West), Bihar and
Orissa and added an impressive 1.2 mn subscribers in December 2009. The
launch has taken place eight months after Telenor Group finalized its
transaction with Unitech Group and made the first investment into Uninor
on March 20.Uninorhas established 11 regional hub offices and recruited
more than 1,800 employees. The Telco’s services will be retailed at over
210,000 points of sale through nearly 1,000 exclusive distributors across
its seven circles of operations. Uninor services will also be available in 17
exclusive company-owned shops and 50 exclusive franchisee shops. The
next phase of its launch is expected to take place in early 2010. Thus, the
telecom company was expecting to launch towards the end of CY09, which
has been achieved. Uninor is targeting 8% market share by 2018, EBITDA
break-even in 3 years and cash flow break-even in five years.
(2) Callmore@29paisa: the plan offers local calls at 29 paise per minute
and STD calls at 49 paisa per minute, with a daily rental of Rs 2.
The company does not plan to offer per-second billing plans, which were
started by Tata DoCoMo, the GSM arm of Tata Teleservices, followed by all
major telecom operators.
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
On the other hand, S Tel also launched services in the telecom circles of
Himachal Pradesh, Orissa Andhra Pradesh, Uttar Pradesh (East and West),
Bihar and Orissa and added an impressive 1.2 mn subscribers in December
2009.
Getting paid for incoming calls is fine. But what if you don’t get incoming
calls don’t worry; Anil Ambani is ready to help you now. Reliance
Communication launched its GSM services in Mumbai offering subscribers
Rs 10 talk-time every day for the first 90 days. That’s free talk-time worth
Rs 900!
Telecom price-war in India has got even fiercer with the introduction of
MCard by MTS. So, for those customers who are not that happy with free
incoming calls for life, MTS has come up with a plan, 10, 00,000 minutes
free or simply lifetime free outgoing. Of course conditions apply.
Minimum of Rs 200 top-up over a period of 6 months is mandatory. And
most importantly free call limit 150 minute/day is applicable only on local
calls from MTS to MTS.
With more new players waiting to enter the Indian mobile market, it’s
going to be an uphill task for the established players like Airtel, Reliance
and Vodafone to retain their subscribers. They can’t wait and watch the
new players like MTS eat into their market share with their aggressive
plans. How about launching new brands focused on niche customer
segments to tackle the competition.
South India based media giant, Sun TV Network use this strategy to the
core to beat the competition. It uses group channels Sun Music, KTV and
Sun News to fight the competition and protect the flagship channel Sun
TV’s leadership in Tamil Nadu. To counter the TRP of Star Vijay’s popular
investigative reporting show at 10 pm, NadnathathuEnna, Sun News runs
a similar show – Nijamat 10 pm. Sun Music has comedy show, SiriSiriat
10:30 pm to counter Kalaignar TV’s Comedy Clips at the same time. And
then there is movie channel KTV, to counter any new or popular films
from Kalaignar or Vijay TV.
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Will BhartiAirtel and Vodafone lauch new brands to fight against the new
players in the Indian mobile market and With more new players like Swan-
Etisalat, Unitech-Telenor and Datacom (subsidiary of Videocon) entering
the Indian mobile market, this tariff war is not going to end soon.
India today boasts of the lowest telecom tariffs in the world. If it is down
to a tariff in the range of 30 paisa per minute, which did not really happen
overnight. It was the result of continuous innovation and fine-tuning of
costs that operators worked on assiduously.
What transpired was India putting in place the world’s low-cost telecom
model. For its part, the government lowered termination charges, offered
spectrum at prices lower than many other countries and setting the base
for full-fledged competition. The cost benefits were eventually passed on
to the consumer.
“All company knew to succeed in this market; all company had to address
affordability because there is a huge disparity in the country. Since there
are customers who make a one-minute call as well as a ten-minute call,
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
The disaggregation of the industry’s value chain freed capital from the
books of operators, which facilitated the process of slashing costs.
“Outsourcing allowed for conversion of capital expenditure (capex) model
into an operational expenditure model (opex). This allowed operators to
align costs on a per minute revenue model,” the decision of the regulator
in bringing down the termination charges was critical. This is paid by one
operator for terminating calls on the network of another operator.
Likewise, having a fierce competition scenario kept a lid on pricing which
has still augured well for the consumer. Quite clearly, nothing works like a
healthy value for money proposition in India.
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Price-war’s impact on
industry
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
The real price-war started by two companies: Rcom and Tata DoCoMo
(Tata teleservices), then other follow them for saving her market share.
After price-war both company’s market price down higher than other
company. Rcom market price nearly down by 45% and Tata teleservices
down by 30.6% during lastqtr. (During last qtr. BSE Sensex gain 2%)
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
What is an ARPU?
o %
Name of the jul- oct- % Change over previous
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Well other players are not safe in this situation, all are facing same
problem. Rcom and Tata teleservices are so aggressively launched lower
tariff scheme that hunting her revenue more than any other, so now
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
REVENUE;
I. Mobile/Cellular services:
A CMSP derives its revenues by way of tariff charges for outgoing calls
made by subscribers on its network. As such, revenue for a CMSP is
simply a multiple of average revenue per subscriber per month (ARPU)
and number of subscribers. Let us now understand what determines the
ARPUs and subscriber base.
ARPU: Average revenue per subscriber per month, or ARPU, is the
amount of money that a CMSP generates per subscriber per month. It can
be obtained by dividing the total wireless revenues by number of
subscribers and then dividing the output by number of months in a period
(i.e., 3 months for a quarter and 12 months for a year's calculation of
ARPU). To even out the volatility in ARPUs, if any, it is better to arrive at
the figure by averaging the wireless revenues and subscriber base for the
latest two years. However, considering the rapid pace of subscriber
addition for Indian CMSPs, ARPU calculated as dividing the trailing 12-
months wireless revenues by latest subscriber base is also an appropriate
figure. For instance, if a CMSP has earned a total of Rs 50,000 m as
wireless revenues in the past 4 quarters (or trailing 12 months) and its
current subscriber base stands at 20 m, its ARPU will be Rs 208 per month
(Rs 50,000 m of wireless revenues divided by 20 m subscribers divided by
12 months).
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
CMSP's ARPU might not increase at the same rate as per minute rate
might decrease.
The fixed (wire line) services are dominantly provided for by the PSUs
(BSNL and MTNL) in India. A customer can obtain a connection where by a
wire line provides him with the last mile connectivity on the national
telecom network. Although this had been a dominant mode of
telecommunication in the past, it is fast being replaced with mobile
telephony, which has the advantage of connectivity on the move. The
fundamental business of a fixed line operator is almost similar to that of a
CMSP, in terms of ARPU and Subscriber base.
III. Internet/Broadband:
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
COST ANALYSIS;
Access deficit charge: The government also collects from the cellular
operators an access deficit charge. The charge payable is 1.5% percent of
non-rural annual gross revenue (AGR) of the telecom service providers
and the amount collected is used to subsidies the telecom service
provided by BSNL in rural areas.
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Apart from these operating costs, telecom companies also incur cost for
servicing debt and tax payments. Telecom is an operating leverage play
(indicates that each new subscriber will come at a higher profitability than
the previously added subscriber), and, as such, the benefits of faster
subscriber addition are directly seen on companies' improving operating
profitability (as fixed costs are apportioned over a larger subscriber base).
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Business model of VAS is not only profitable but also workable against
price-war deficit and overcome price-war impact.
Mobile value-added services (VAS) are those services that are not part of
the basic voice offer and are availed off separately by the end user. They
are used as a tool for differentiation, promotion and allow the mobile
operators to develop another stream of revenue.
The nature of value added services change over time. A VAS may become
commoditized and becomes so common place and widely used that it no
longer provides meaningful differentiation on a relative basis.
Customers continuously want more from their phone. They use their
cellular phones to play games, read news headlines, surf the Internet,
keep a tab on astrology, and listen to music, make others listen to their
music, or check their bank balance.
Thus, there exists a vast world beyond voice that needs to be explored
and tapped and the entire cellular industry is heading towards it to
provide innovative options to their customers. Spoilt by choice, the mobile
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
The Mobile VAS in India is $5 billion at the end of 2010 and is estimated to
grow at 60% to touch $8 billion’s at the end of 2012.
This is where the (because of this reason) role of VAS (Value Added
Services) comes into focus. Operators are facing cutthroat competition
and with the call rates in India being one of the cheapest in the world, the
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
margins are very low. Therefore they are looking at VAS as the next wave
for growth. It has become the flywheel of telecom growth and a large
chunk of revenue (nearly 20%) for operators is likely to come from VAS
services in the years to come. But it is not only effort from operators
which is driving the growth of VAS.
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
The Mobile VAS in India is $5 billion at the end of 2010 and is estimated to
grow at 60% to touch $8 billion’s at the end of 2012.
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
The per unit revenue accrual in this VAS is low (Rs 3/SMS) as compared to
other types of VAS, but it offers two streams of revenues as both the end-
user & the enterprise service provider pay for the VAS. We expect this to
grow significantly as enterprises look beyond mass media for solutions to
reach out to their customers. It is also cost impactive for the enterprise as
it serves both as a data base development initiative and also leads to cost
savings as queries can be handled through automated response
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Another reasons for players playing safe and not investing in novel
applications and content is
Because this market is greatly affected by piracy. This is acting as a barrier
for companies to
Investing into content development.
Currently the cost of most VAS is high. This is mainly because of the fact
that VAS market is led by Entertainment VAS which has a high perceived
value. People are paying for it as they
perceive it highly but over a period of time as they get used to it, the
willingness to pay high amounts may come down.
There are high volumes of spam in the VAS market currently. Spam is an
uninvited message urging the consumer to avail of some service.
Example “Bid for a Laptop by messaging your bid amount to XXXX”
SPAM has a high nuisance value and can discourage users to avail of a
genuine service as they feel that once they have availed of a service &
their number becomes a part of a database, their inbox will be flooded
with uninvited messages.
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
While the mobile VAS space is all set to grow rapidly, all the stakeholders
will have to work together and create a self-sustaining ecosystem for this
growth to sustain. Similarly it would take a joint effort of all concerned to
address the significant roadblocks and thus unlock the true potential of
Mobile VAS in India.
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Marketing mix is the set of marketing tools that the firm uses to pursue its
marketing objectives in the target market. McCarthy classified these tools
into four broad groups that he called the fours Ps of marketing: product,
price, place, and promotion. Marketing-mix decisions must be made to
influence the trade channels as well as the final consumers. Typically, the
firm can change its price, sales-force size, and advertising expenditures in
the short run. However, it can develop new products and modify its
distribution channels only in the long run. Thus, the firm typically makes
fewer Target market
Marketing mix of VAS is little beat unique in the specific segment but the
price war situation boost-up the company to deliver VAS product in
different way to the customer, good promotional activity, value chain of
product, pricing strategy of services and differentiations in product is
helping the company to overcome the price-wars financial loss.
With the help of marketing mix, company can increase the more demand
of VAS throughout promotional activity; variety in the product can attract
the more customers for using services. Good value chain helping the
customer to find out best of best. Also dispute settlement between
various content owners and operator make value chain better for
customer and helping in product innovation. In old product, Bundle-price
policy increases the demand. In premium and innovative product,
Skimming price strategy increases the revenue.
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Product
VAS businesses are guided by the product, which holds that consumers
favor those products that offer the most quality, performance, or
innovative features. Managers in these organizations focus on making
superior products and improving them over time, assuming that buyers
can appraise quality and performance. Product-oriented companies often
design their products with little or no customer input, trusting that their
engineers can design exceptional products. However, the product concept
can lead to marketing myopia. These VAS organizations too often are
looking into a mirror when they should be looking out of the window.
⇒ Governmental constraints
The life cycle of VAS product is so tiny due to people interest in other new
product. Market hype of other song pursues the customer to downloading
new existing song.
Tiny life cycle (less than two month) of VAS are real helped the company
in attract customer for re-purchasing.
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Maturity
Decline
Growth
Introduction
Introduction (5-days):
⇒ During this period customer try to understand the music “it’s hit or
flop” and then downloading the song.
Growth (15-days):
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
⇒ The hype of promotion also in last the stage that create the special
position for song but due to full availability of song in all media or
acceptance by potential buyers songs downloading is on slowdown.
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
⇒ After movie release, full song available in all media that also
reduced the selling of song.
Product variety
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
3G facility is the next wave for revenue generation. It’s helping the
Telcos in more revenue generation and also provided better quality in
VAS. That attracts the more customers.
⇒ P2P:
⇒ Other:
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
It is the only product that real helped the telecom company to overcome
the price war impact
The Mobile VAS in India is $5 billion at the end of 2010 and is estimated to
grow at 60% to touch $8 billion’s at the end of 2012.
This is where the (because of this reason) role of VAS (Value Added
Services) comes into focus. Operators are facing cutthroat competition
and with the call rates in India being one of the cheapest in the world, the
margins are very low. Therefore they are looking at VAS as the next wave
for growth. It has become the flywheel of telecom growth and a large
chunk of revenue (nearly 20%) for operators is likely to come from VAS
services in the years to come. But it is not only effort from operators
which is driving the growth of VAS.
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Quality:
Quality of services is the best strategy for any VAS. It’s directly helping in
the selling and if customer likes the quality of product they re-purchase
from same resources and also do mouth publicity for you.
Indian companies are not provided high class quality. Some time without
using any services company can deducted the money from customers
account is destroy the customers trust on company.
Design:
Feature:
Innovation in product directly attracts the user for experiment. VAS life
cycle is very shortly, after 2 to 3 month customer don’t like her ring-tone
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Throughout new feature, customer can replace old one into new product.
Packaging:
Virus is the biggest threat when customer download from companies own
downloading center. Make sure product is virus free and build the
customer trust on your web site.
Size:
When customer downloads any product from GPRS, size does matter.
Due to low spectrum, downloading speed in internet is low. So, make full
feature product in specific size (Size means, how much Kb used by
particular application, game or song). Company must be consider the size
of application, lowest size of application or song, save the users mobile
memory and also consuming the time of user.
Company must be focus on product size and make them easiest for
downloading.
Price
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Demand and supply deciding the price is the basic concept of pricing
strategy but in the VAS competition between operators deciding the price
of VAS.
VAS is the premium category of revenue generation so; all the players
concentrate on VAS. Keen of attracting new customer throughout VAS
promotion is create a high competition. As usual price in competition in
always list. But in some premium category price are high that real helping
the company in revenue generation.
Due to high competition SMS rate is reduce near to 1 paisa from 1 rupee
in last six month, but now people send more sms and helping the
company in revenue generation.
List price:
Premium price
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
⇒ For exclusive content like; IPL wallpaper, Indian idol audition pass
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Promotion
VAS is the only tool for promotion in telecom industry and also helped the
company in making Brand.
Advertising
Television:
⇒ Throughout them company can reach the more people and time to
time remember them the VAS product.
Booklets:
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Posters:
Display signs:
⇒ All the major point of city is best option for display the board.
Web sites:
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Sales promotion:
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Contests:
⇒ Download the IPL game and win chances to participate in IPL night’s
party
Games:
Sampling:
Demonstrations:
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
High credibility: news stories and features are more authentic and
credible than ads
Ability to catch buyers off guard: reach prospects that prefer to avoid
salespeople and advertisements
Press kits:
Community:
⇒ Make followers on twitter and time to time tweet about your product
⇒ Free of cost
Sponsorships:
⇒ Sponsor of players
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Direct Marketing
Customized sms:
⇒ Specific product
⇒ Call for ring tone download, when customer can find out own
favorite ringtone in various category
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Place
Supply Chain:
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
H
A
N
D
S
A
T
E
VAS has also resulted in the emergence of an entirely new business eco-
system giving rise to supporting industries such as content development
and aggregation. There are multiple stakeholders playing across the VAS
value chain many with overlapping roles and functions.
A well demarcated value chain of VAS is yet to evolve.
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Enterprise VAS
ESP provides the interface between the enterprise and the mobile
operator. ESPs are companies that send messages in bulk to the target
end-users. Examples include One 97, Cell next, and ACL Wireless.
Mobile operators:
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Coverage:
Transport:
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Opportunities
⇒ Out of 1.16 billion people, 525.15 Million people have the Mobile
phone. Mean’s for future telecom company have the 475 million new
targets.
⇒ People more love mobile phone than fixed line, so BSNL customer
looking for you.
Cellular service is one of the fastest growing sectors in India and still has
immense potential for growth; India’s 525million cellular network is
2ndlargest in the world after china. Indian total population is near about
1.16 billion and total telephone user is 44.73% of population, means now
a day 650 million people of India have not a mobile.
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Most of Europe and American regions teledensity is higher than 100, so all
big players eye on India and they have huge amount of money invest in
Indian market. In price-wars situation investment is come from FDI, it’s
good for the industry.
The government should address the situation fast. Bigger players will
drive consolidation and restructure their operations leading to a greater
ability invest in the growth of the telecom sector in India. This process
should result in 3-5 large players, with a pan India footprint and focus.
Industry also expects India’s teledensity levels to touch 60 %, in 2012.
Mobile phone prices dipped by 15-30% in the year 2009. The market is
estimated to grow 20% faster than predicted earlier and would rise to 5.5
Crores units from 4.3 Crores last year. Major mobile handsets companies
have reduced price to the extent of 26% across all segments following the
reduction of basic customs duty to 5% along with abolition of 4% SAD
announced earlier. If all their other recommendation on SAD and CVD are
meet too, ICA expects industry to achieve a size of 1 billion subscribers
by 2015 and legal market to grow to 90%.This shows that cellular market
is growing and no of mobile user are expected to increase. Government
has announced cut in customs duty on mobile handsets to 5% and abolish
4% SAD (special additional duty). Bigger price differential is expected in
the high-end mobile handsets that are GPRS and MMS compatible or the
camera phones. Indian cellular association, and apex body for cellular
handsets manufacturers in the country now expects that the gray market
would be destroyed completely and the legal market for handsets would
grow from the current 50% to 80%.
Growing Industry:
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Threats
⇒ price-war
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
⇒ New entry
Last year 4 new players come in industry and start the services and
this year three new player (datacom, etisalat and qualocom)
possibly joining the industry
Lowest call charge in the world, mean’s your revenue (ARPU) also
lowest in the world.
Indian consumer just ½ paisa pay for a 1 second call mean’s if you
like to talk 1 minute just pays 30 paisa. An Indian call charge is 5
time less in compare sub-continent.
⇒ Lowest ARPU
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
This would tie back to point of new player’s entry and a possible
consolidation in the telecom business and the tower business.
Losing ownership of the client as the number one threat for old
player’s. It does not feature as a risk for Indian telecom. Reason is -
India is still in the growth phase and losing a customer is not yet on
the minds of the service providers.
Company’s next target market is ruler area and they people have
some specific income-expenses budget and High commodity price
already deficit her budget.
So, they not have extra money for mobile.
⇒ Delay of 3g auction
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Finding
⇒ High competition
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
In 2005 ARPU is 370 rupees and now it is 156. Due to price wars
impact last quarter ARPU decline by 10.40%.
VAS is most lucrative segment of the industry but they faced some
problem in innovation, piracy, revenue distribution and future
infrastructure and next generation network.
Losing ownership of the client as the number one threat for old
playersbut it does not feature as a risk for Indian telecom. Reason is
- India is still in the growth phase and losing a customer is not yet
on the minds of the service providers.
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Suggestions
India’s 44.76% population enjoyed a world’s lowest call tariff but they
don’t know how it is possible and what happened in future!
And then few big players enjoyed the market share and increase the call
tariff in future, it is not a prediction, same situations faced by all the
developing country in the growths last stage. Same as to other country,
Indian telecom industry also faced problem but in future how overcome
from them is biggest challenges for Telecom Company.
More use of VAS is the only way to overcome the price-war impact!
Paying 3 rupees for a cricket score is little more for user in term of
return. Due to the high cost of vas, lot of customer not interested
otherwise not able to use more vas. So simple thing is reduce
charge and attract more customers for vas used.
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Next target market of the industry is ruler area and I think they are
not aware about vas, so throughout promotional activity first you
can aware them about VAS and then generating revenue.
⇒ Make it simple
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
Bibliography
Books:
Report:
⇒ Dot, 2009 annual report
Web-site:
⇒ www.wikipedia.org
⇒ www.trai.gov.in
⇒ www.dot.gov.in
⇒ www.coia.com
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
⇒ www.auspi.in
⇒ www.itu.int
⇒ www.airtel.com
⇒ www.reliancecommunication.com
⇒ www.vodafone.co.in
⇒ www.bsnl.co.in
⇒ www.tatateleservices.com
⇒ www.ideacellular.com
⇒ www.aircel.com
⇒ www.mtnl.net.in
⇒ www.mtsindia.in
⇒ www.loopmobile.in
⇒ www.uninor.in
⇒ www.stel.com
⇒ www.hfcl.com
⇒ www.tatadocomo.com
⇒ www.economicetimes.com
⇒ www.news.yahoo.com
⇒ www.rediff.com
⇒ www.bse-india.com
⇒ www.karvy.com
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot
A study report on Indian telecom Industry: “Price-War and its
impact on industry”
⇒ www.imrbnit.com
⇒ www.globaleqation.com
bhuvar.rajsee@yahoo.com
R D Gardi Department Of Business Management, Saurashtra University, Rajkot