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CHAPTER 1

CUSTOMER RELATIONSHIP MANAGEMENT: AN INTRODUCTION

The emergence of services organizations in the corporate sector, the

growing competition due to liberalization, and the growing expectations of

customers propelled by globalization and facilitated by IT revolution - are

defining new rules of game for existing private and public enterprises in India.

Telecom is one of the fast growing sectors among the services. The mobile

revolution has created a new wave of interest among people to utilize telephone

services. The firms offering the services are vying with each other to capture

this sudden spurt in demand. They are using their technology and marketing

prowess to attract new customers and simultaneously retain their existing

customers, make inroads into competition and at the same time build entry

barriers to competition to defend their position.

Customer-driven initiatives to attract, retain and build intimate long term

relationship with profitable customers, innovation and delivery of Quality

Service have become the key elements in the marketing strategies. Relationship

Management with the three focal points Customer Perceived Value, Customer

Satisfaction and Customer Loyalty has become key success factor in achieving

sustained customer patronage and profitability to the firm. Customer

Relationship Management (CRM) is an effective tool to achieve this goal. The

philosophy and practices of CRM in telecom has caught the attention of policy

makers, academicians and researchers.

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1.1 EMERGENCE OF CRM

The origins of a relationship-based approach to a firms management

emerged from academics and practitioners in the fields of strategy, marketing

and supply chain management (Bagozzi, 1974, 1975; Berry, 1983; Osarenkhoe,

1992; Gummesson, 1999; Zineldin, 2000; Nielsen et al., 2003; Martin and

Bush, 2003).

In the mid-1970s, Bagozzi (1974, 1975) began to gain an understanding

of marketing activities as an exchange between the seller and buyer thereby

forming a basis for subsequent conceptualization of relationship marketing.

The question is to understand how the relationship develops and changes over

a period of time. The possibility of delineation of phases within a relationship

makes it necessary to explicitly design relationship marketing. This

conceptualization first appeared in the early 1980s in the research field of

services marketing (Berry, 1983; Dwyer et al., 1987; Ford, 1980; Hammarkvist

et al., 1982; Jackson, 1985; Kim and Kim, 2001; Guenzi and Pelloni, 2004;

Matthing et al., 2004; A kerlund, 2005).

Concept of Relationship Marketing

The concept of Relationship Marketing was born within the field of

service marketing and industrial marketing (Berry, 1983; Gummesson, 1987;

Christopher, Pyne, and Ballantyne, 1991). In 1992, Webster reported that

there has been a paradigm shift from a transaction to a relationship focus.

From a narrow focus on volume and profit-maximization marketing has

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matured into a broad orientation with emphasis on establishing long-term

customer relationships and managing strategic alliances with customers

directly and through their other supply chain associates.

Table 1.1: Relationship Marketing vis-a vis Traditional Marketing

Base Relationship Traditional marketing
marketing
Orientation Customer retention One time sales
Contact with Continual Episodic
customers
Focus Customer value Product features
Time horizon Long term Short term
Customer High Low
service
Emphasis
Quality Entire organization Limited to productions
concerns / operations
Source: F. Robert Dwyer, Paul Schurr, and Sejo Oh, Developing Buyer-seller
Relationships. Journal of Marketing, Vol. 51, April 1987, pp. 11-27.

Drivers of CRM

Jagadish N.Sheth (2002) observes that energy crisis that led to

stagflation and competition in industries like consumer electronics, textiles,

steel and chemicals made industry to realize that retention of customers is

more important than acquiring new ones. Possibilities in management of

services such as telephones, health care and power, to keep record of

transactions over a period of time for analyzing the quality of customer service

and response patterns etc. has increased the scope to analyze the

implementation of tactics and their outcomes. Practice of business partnering

by way of offering consultancy and collaboration to B2B customers for

improving the outcomes of service, encourages industrial marketers to opt to

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directly service key accounts. In the supply chain the collaborative

relationships have become common practices. Information technology has

increased the scope to adopt innovative styles in customer service. The sales

automation, customer data bases and cross-functional integration through

Enterprise Resources Planning (ERP) have expanded the scope for relationship

marketing since the mid-1990s.

1.2 DEFINITIONS OF CRM

The term relationship marketing was first coined by Berry in the context

of services marketing. Relationship marketing is attracting, maintaining and

enhancing customer relationships. Servicing and selling existing customers is

viewed to be as important to long-term marketing success as acquiring new

customers (Berry 1983).

This concept is extended by Gronroos to include channels and some

operational aspects. Relationship marketing is to establish, maintain and

enhance relationships with customers and other partners, at a profit, so that

the objectives of the parties involved are met. This is achieved by a mutual

exchange and fulfillment of promises (Gronroos, 1994). He indicates that

beyond commercial interest, partners recognize the mutual benefit to be

derived from such relationships.

Christopher et al. (1991) define the function of relationship marketing as

getting and keeping customers. They highlight the importance of customer

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service and quality if the firm is to gain and maintain a long-term relationship

with the customer.

According to Shani and Sujana (1992), relationship marketing is an

integrated effort to identify, maintain and build up a network with individual

consumers and to continuously strengthen the network for the mutual benefit

of both sides, through interactive, individualized and value-added contacts

over a long period of time''. They contend that developing a long-term

relationship with the customer enables the firm to add value to its offerings.

Gummesson (1995) defines relationship marketing as relationships,

networks and interactions. He emphasizes that the strength of the relationship

can be enhanced through the networks that the firm is able to develop, and

from which all stakeholders benefit.

Morgan and Hunt (1994) refer to relationship marketing as those

activities directed towards establishing, developing and maintaining successful

relational exchanges. They emphasize on maintenance of relationship and

highlight the importance of trust, cooperation and shared values in maintaining

a successful relationship.

In the next phase the relationship management has gone beyond

marketing function and the word customer relationship management was

coined to broaden the scope of relationship creation, development and

maintenance.
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The Gartner group (2000) defines CRM as Management discipline and a

philosophy that requires businesses to recognize and nurture relationship with

customers. With CRM, a customers needs and preferences are available to

anyone working in the business at the customer interface, regardless of

channel. Each customer is treated as an individual in a relationship that

creates feeling of one-to one.

Woodlock et.al. (2000) define CRM as finding the right customers (those

with current and future net value, viable for establishing durable relationship),

getting to know them (as individuals and as groups), growing their value (if

appropriate and viable) and retaining their business in an efficient and effective

way.

The different definitions on CRM are philosophically similar but

operationally differ by their emphasis. Some highlighted objectives, some others

laid emphasis on approaches and others talked about benefits. In defining

what is to be done, some have chosen the broad areas like establishing,

maintaining and retaining whereas others talked about specific acts like selling

and servicing etc.

Characteristics of CRM

CRM as compared to traditional marketing involves series of

transactions, regular and continuous interactions beyond simple exchange

process, long term objectives, bonds involving investment of time and energy to

produce positive interactions, investment by the parties, some switching

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barriers, elastic and permeable boundaries, holistic approach and systematized

offers.

In India CRM have deep roots in the practices of business. The business

men used to establish bondages with customers at emotional level, especially

in small towns and villages. However, in modern corporate world, CRM has

appeared as a new concept in the mid-1990s, more as a technology that would

change dramatically the way corporations managed their networks and

interaction points with customers (Rado Kotorov,2003). Thus the modern CRM,

in its early stages, was deployed as a technology solution: a software package

that was bought and installed to facilitate or automate some marketing

functions. The terms sales-force automation, campaign automation,

customer support automation were often equivocated with CRM, even though

they stand only for different components of the enterprise-wide CRM strategy.

Shortly after the deployment of such packages it became evident that they were

not used as planned and remained as show pieces. (Albert Stroucken, CRM,

August 2002).

As the technology/project approach failed, discussion on strategic

approach took place with a need to focus on customer and consider technology

only as a tool. In mid-1990s, it was thought that merging customer data

collected from the field by sales force with call center interactions would result

in more informed interactions with the customers. The concept resonated with

user organizations. Soon mergers and acquisitions gave rise to a host of

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software vendors, all claiming to have an integrated set of capabilities that

became known as CRM. On a parallel track, internet-based tools such as e-

commerce, internet marketing (Yang and Fang, 2004), personalization (Jun and

Cai, 2001) and self-help (Walters and Lancaster, 1999; Parasuraman et al.,

2005) were evolving. Owing to the newness of the technology, these products

competed outside of the CRM sphere and were referred to as e-business.

When the concepts of CRM and e-business molded together (Light, 2003;

Fjermestad and Romano, 2003; Bull, 2003), there was a short period where

vendors talked about e-CRM. Similarly, ERP vendors realized that the 360-

degree view of the customer had to include transaction data, so they developed

an integrated package with CRM capabilities. Thus, from a technology

perspective, CRM consists of a set of applications that address the needs of

customer-facing functions that in turn feed a common database that is

supported by business analysis tools.

Models of CRM

Philosophically, CRM is seen from three perspectives.

(i) Stakeholder model: Relationship management and marketing are powerful

tools for developing long-term relationships with clients, suppliers and

distributors.

(ii) Supply chain model: Relationship between channel participants is the key

strategy for pursuit of efficient supply chain. This minimizes the costs of
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transactions and the entire supply chain costs (McLaren et al., 2002; Robson

and Rawnsley, 2001; Raymond, 2001; Zhuang and Zhou, 2004).

(iii) Marketing concept model: Every customer relationship is important for

profitability. Relationship with existing customers is the lifeblood of a business

organization and is paramount for the future direction of the business.

Organization must deliver what the market needs and wants. Deliver more

efficiently, effectively and add more value than competitors. Both internal and

external marketing efforts are necessary to do this successfully.

The aim of marketing is to create a customer, who is enthusiastic about

company. The customer whose expectations are met or exceeded by the actual

performance is satisfied and delighted. The companys interest in customer

welfare and its motive to benefit customer would naturally lead to mutual trust

and this will gradually develop into an emotional bond of commitment,

eventually leading to loyalty. Customer becomes more loyal, making significant

use of the entire range of company services (cross selling) patronizing the

company over its competitors. Furthermore, this is accompanied by positive

word-of-mouth communication and tolerance to unintentional lapses and

benevolence to share the information for mutual benefit. Contrarily, in case the

customer is dissatisfied, it is possible that the customer may even turn into a

terrorist (Jones and Sasser, 1995, pp. 96-7) towards the company, causing the

firm extra costs. Dissatisfied customer may also dissuade other current or

potential customers from dealing with the firm.

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Principles of CRM

The basic underlying principles guiding development of CRM can be

summarized as:

1. Principle of Customer Life Time Value (CLV)

2. Principle of Customer Satisfaction (CS)

3. Principle of Customer Loyalty

4. Principle of Wallet share of Customer

5. Principle of Cross Selling and Up Selling

6. Principle of Customer Profitability

1.3 CRM PRACTICES - TOOLS OF BUSINESS STRATEGY

Customer Relationship Management is a corporate level strategy,

focusing on creating and maintaining relationship with customers. Berry(1983)

recommended the following five strategies for practicing relationship marketing.

Developing a core product/service around which customer relationship is

built.

Innovatively augmenting and adding value through value added

features/services.

Customizing the relationship to the individual customer.

Pricing services to encourage customer loyalty.

Marketing CRM internally to the employees so that they perform well

with customers. Promoting employee to customer relationships and top it

up with customer to customer relationship to reinforce the good feelings.

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The basic CRM strategy is based on the traditional idea that knowledge

of customer and commitment to service the customer is the best method of

developing a sustainable competitive advantage. But building a successful and

sustainable relationship with a large customer base is not the easiest thing to

do and carries a direct impact on many core operational processes. At the heart

of a perfect CRM strategy is the creation of mutual value for all the parties

involved in the business process. It is about creating a sustainable competitive

advantage by being the best at choosing, designing, providing, communicating,

and delivering the value to the existing customers as well as creating and

keeping new customers. It addresses the changing needs of the customers by

developing products and services that continuously appeal to individual

customers. Organizations structure their efforts around customer segments

than products to deliver customer satisfaction. Organizations deploy objectives,

goals and performance measures, which measure customer

satisfaction/dissatisfaction and input the outcomes into their plans and

strategies.

Complaints Management

Most organizations traditionally rely on customer complaints to ascertain

customer satisfaction. Unfortunately the average business firm never

hears from 96% of their unhappy customers. 91% of customers will never

come back, they have to be got back. Only 4% of dis-satisfied customers will

complain (SPSS: White paper 1996). Therefore according priority to customer

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satisfaction and its effective measurement has become important to proactively

satisfy the customers than waiting for a complaint, watch customer complaint

behavior and resolve the complaint.

Beyond Complaints Management

Effective organizations no longer use customer complaints alone to

measure customer satisfaction. They adopt rigorous qualitative and

quantitative mechanisms to measure customer satisfaction. Measuring

customer satisfaction provides feedback on success of an organization in

providing products and/or services to the satisfaction of customers at the

market place and market space. Organizations have to take proactive and

reliable steps towards improving the perceived value and manage customer

satisfaction more effectively.

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1.4 CRM AND BUSINESS PROMOTION

Role of CRM in business promotion is illustrated by the model given

below.

Figure 1.1: CRM and Business Promotion

Source: Adopted from Narinder Tanwar, Customer Relationship Management - An Emerging Business Need, available
at indianmba.com

Acquire New Customers

CRM is a corporate level strategy, focusing on customer acquisition by

creating and maintaining relationships with customers.

Retention

An effective CRM system is able to identify factors important to clients,

promote a customer oriented philosophy, adopt customer based measures,

develop end-to-end processes to serve customers, provide successful customer

support, handle customer complaints, track all aspects of sales, create a

"holistic" view of customers' sales and service information. The long-term

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success of an organization depends mainly on how well it attracts and retains a

large customer base.

Key Account Focus

As business develops, companies start accumulate accounts/segments

which are unviable and non-profitable, yet place demands on the resources of

organization disproportionate to the returns, resulting in the dilution of focus

on the accounts and segments which are key to business success. Key account

management would help continuous review, identification of key

accounts/segments and allocate resources proportionate to their contribution

to the business.

Business Continuity

Managing relationships with customers is very important for

organizations since improved relationships increase business value. CRM helps

in leveraging information regarding customer behavior to make repeat buying

possible and improves average revenue per user through repeat purchase,

cross selling and upselling.

Loyalty and Life Time Value

CRM helps to achieve high levels of customer satisfaction, retention, and

loyalty - all resulting in improved profitability over a life time of customer.

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1.5 CRM IN TELECOM

Telecommunications are changing rapidly. Rapid developments such as

3G and 4G are changing the infrastructure and the way people interact. The

service providers are facing the problem of high costs. The subscribers are the

source of income, along with advertisers and sponsors. As the

products/services are similar among competing service providers, the focus is

on how to create a long lasting relationship with the subscribers. Furthermore,

this relationship must be manageable in a cost-effective manner. CRM makes

this focus possible and if implemented correctly, will manage the relations in

cost-effective way (Storbacka & Lehtinen, 2000). When service providers put

more focus on subscribers, the CRM systems become important. The CRM

process is a continuous learning process where information about individual

customer is transformed into a customer relationship.

The basics of CRM are the same disregarding what line of business the

company is in, including the telecom industry. However, what is important in

telecommunications is to integrate the CRM system with the systems for

service provisioning, activation and mediation. The service provisioning area

relates to services, solutions and systems that handle activation of subscriber

service requests. Activation brings the individual subscribers service alive and

mediation is collecting data about the subscribers traffic.

Knowledge of and intimacy with customer will help designing customer

oriented services, processes and value chains and organize customer friendly
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systems and service centers. Network quality and coverage, competitive tariff

tailored to needs of different segments, brand image, customer service and

value added services are some of the important factors that enhance perceived

value of telecom services. Because of vast customer base and large scale

operations, CRM in telecom is technology aided strategy with firm market

orientation and customer focus. Basic management functions of setting goals

and standards, organization of resources, service quality management and

delivery of customer service through service centers and franchisees,

continuous communication, internal marketing and performance management

need to be carried out with market orientation and customer first philosophy.

1.6 INDIAN TELECOM AND BHARAT SANCHAR NIGAM LIMITED (BSNL)

The introduction of mobile communication services has changed the life

styles of people across the globe. Connectivity found a new meaning as the

geographic and time barriers are crossed and instantaneous communication

and response was established.

1.6.1 Profile of Indian Telecom Market

Indian telecom business has changed significantly in last five years. As

per TRAI annual reports subscribers base for wire lines which was 40.75

million in March 2007 has come down to 31.49 million by June 2012. During

this period the wireless subscriber base has gone up from 165.11 million to

934.09 million. In terms of percentage proportion the share of mobile phones

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has gone up from 80.19% to 96.75% during last five years. BSNL which had

virtual monopoly over landline had to face this dramatic change in the

scenario. Private sector players, who launched mobile phones first and later

expanded into wire line, had a better time during this period. The share of

private sector has grown from 51.8 percent to 86.9 percent during last five

years. Tele density (number of telephones per 100 population) has increased

from 18.22 in 2007 to 79.58 in June 2012. The urban tele-density has gone up

from 47.2 to 162.46 during this period. Rural tele-density not only kept pace

with urban and also but exceeded it in the last two years. It is at 40.66 in June

2012 against 5.89 in 2007, indicating the steep growth of telecom market in

rural India. Private sector which focused on urban market initially started

expanding in to rural market with focus on mobile services. Rural market has

jumpstarted into wireless and growing in wireless segment by-passing the wire

line segment altogether. BSNL has strong infra-structure in rural India and

this development would be a plus point for BSNL, if the company could keep

up the growth pace.

International Trends and Indian Market

From Table 1.2 which indicates the international trends in the telecom

business in respect of subscriber base, subscriber addition in 2011, wireless

penetration, MOU (average minutes of usage per subscriber), tariff per minute

in US Dollars, it can be seen that India is the second largest market in the

world next to China. Average revenue per user and average minutes of usage
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per subscriber per month are low compared to China and many other

countries. This indicates the price sensitive nature of Indian market.

Table 1.2: International Trends in Telecom Business

Subscriber Base (in

Rate Per Minute (In

Subscriber Additions
(in millions) during

Average Revenue per

Average Minutes of
Usage Per Subscriber
2011 (Jan11-Dec11)

Wireless Penetration
millions) Dec 11

Country

User (USD)

Per Month

USD)
China 952.3 93.3 69% 10.02 461 0.01
India 873.6 121.6 72% 3.34 329 0.01
Indonesia 217.6 21.6 90% 3.83 146 0.03
Japan 123.7 5.7 97% 60.67 137 0.21
Pakistan 110.9 7.9 63% 2.45 197 0.01
Philippines 92.6 6.6 97% 3.44 60 0.03
Thailand 74.9 3.9 117% 8.33 322 0.02
Malaysia 33.8 -0.2 117% 17.06 222 0.08
Australia 28.8 0.8 128% 52.92 249 0.13
Source: Telecom circle

Indian telecom market has surpassed the forecast of market researchers

indicating the pent up demand. A deceleration is observed from 2011 onwards

indicating possible saturation in the urban markets. (Table 1.3)

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Table 1.3: Growth of Indian Telecom Business Projections vs. Actuals

Year(Ended
2007 2008 2009 2010 2011 2012 2013 2014 2015
December)

Projections
228 330 493 626 923 1049 1134 1185 1217
(Million)

Actual
Subscribers 234 347 525 752 882 952 - - -
(Million)

Source: Ovum; Ernst & Young analysis

Growth in Subscriber Base

Table 1.4 indicates the growth of subscriber base. There was a steep

growth of above 40 percent during period 2006 to 2010 and a deceleration after

this period, signaling the need for protecting existing customers through

quality of service and relationship and the relevance and significance of CRM.

Table 1. 4: Growth of Subscriber Base in Indian Telecom

Year Subscriber Base (million) Percentage growth
2005 98.41 28.6
2006 140.32 42.6
2007 206.83 47.4
2008 300.49 45.3
2009 429.72 43.1
2010 621.28 44.6
2011 846.32 36.3
2011 953.25 12.7
2012 (Jun) 965.52 1.3
Source: trai.gov.in and dot.gov.inAnnual Reports

The wireless segment is growing at spectacular rate while wire line

subscriber base is shrinking (Table 1.5). This coupled with rapid increase in
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tele-density (Table 1.6) has created demand problem for BSNLs PCO business

as well as wire line business.

Table 1. 5: Growth of Subscriber Base: Wireless vs. Wire line

Wireless Wire line
Subscriber Percentage Subscriber Percentage
Year Base growth Base growth
2005 52.22 27.6 41.43 1.01
2006 98.77 89.2 41.5 0.2
2007 165.11 67.2 40.75 -1.9
2008 261.07 58.2 39.42 -3.3
2009 391.76 50.1 37.96 -3.8
2010 584.32 49.2 36.96 -2.7
2011 811.59 38.9 34.73 -6.1
2011 (Dec) 839.86 3.5 32.69 -5.9
2012 (Jun) 934.09 11.3 31.49 -3.7
Source: trai.gov.in and dot.gov.in annual Reports

Table 1. 6: Growth of Tele density

Year Tele density Percentage growth

2006 12.86 42.1
2007 18.23 41.8
2008 26.22 43.9
2009 36.98 41.1
2010 52.74 42.7
2011 70.89 34.5
2011 (Dec) 76.86 8.5
2012 (Jun) 79.58 3.6
Source: trai.gov.in and dot.gov.in annual Reports

Emerging Indian Rural Market

Even in the rural market, the wire line market has shrunk. The rural

market has moved up the ladder straight into wireless segment because of

convenience and value addition of this product. Table 1.7 gives the details of

subscriber base in rural market. After 2011 there is deceleration in the growth
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even in the rural market, though its growth is better than urban markets

indicating the untapped potential of Indian rural market.

Table 1. 7: Growth in Rural Market

Wireless Wire line
Subscri
ber Percentage Subscriber Percentage
Year Base growth Base growth
2008 62.28 88.00 11.64 -7.40
2009 111.63 79.30 10.58 -9.20
2010 190.88 71.00 9.93 -6.20
2011 282.23 47.90 8.69 -12.50
2011
(Dec) 307.60 9.00 7.80 -10.30
2012
(Jun) 336.51 9.40 7.25 -7.10
Source: trai.gov.in and dot.gov.in annual Reports

Market Shares of Service Providers

The cumulative effect of all these developments is reflected in the

markets shares of the service providers.

Table 1. 8: Market Share of Wireless Service Providers

Service March June
Provider 2007 2008 2009 2010 2012
Bharati 22.49 23.7 23.87 21.84 20.05
Reliance 16.96 17.54 18.55 17.53 16.55
Vodafone 16.01 16.9 17.55 17.29 16.46
BSNL 18.77 15.62 13.31 11.89 10.52
Tata 9.7 9.32 8.96 11.29 8.59
Idea 8.49 9.19 9.93 10.92 12.54
Others 7.58 7.73 7.83 9.24 15.29
Total 100 100 100 100 100
Source: trai.gov.in; annual Reports
Table 1.8 indicates the market share trends of service providers. It can

be observed that the market share of BSNL has dwindled from 18.77 percent to

10.52 percent, whereas other service providers could manage their market
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shares during last five years. BSNL has moved from number two position to

fifth position in the last five years.

Trends in the Revenue Parameters

Table 1.9 indicates the decline in the ARPU (Average Revenue per user

per month) and MOU (Average minutes in use per subscriber per month). The

rapid decline indicates the price sensitive nature of the Indian market. It is

observed that several subscribers keep mobile phones only for getting incoming

calls and sparingly use it. This is reflected in the falling value of MOU. Added to

this, is the severe competition from new players who are issued licenses in

2008. They depended solely on tariff to obtain switch from the competitors.

Table 1. 9: Trend in ARPU and MOU, the Parameters of Revenue for

Telecom Service Providers
Average Revenue per Minutes of usage (MOU)
user per month per user per month
(ARPU) Rs. (minutes)
2004 396 302
2005 370 341
2006 316 368
2007 261 464
2008 220 496
2009 144 411
2010 105 360
2011 96 332
Source: trai.gov.in; annual Reports

Picture of Telecom Business India

Figure 1.2 indicates the comprehensive picture of tariff, growth of subscriber

base and critical incidents in the telecom business in Indian market during

period 1998 to 2011.

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Figure 1.2: Trend of Tariff vs. Growth in Subscriber Base

Year 1999 marked the beginning of telecom revolution through new telecom

policy. From 2001 to 2005 the tariff has come down due to competition and

this was helped by reduction of ADC (access deficit charges) by government.

Life time validity of products launched by operators helped boosting the

business since 2006. In 2009, six new licenses were issued and CDMA players

were given GSM licenses. This has increased number of players

disproportionately. The 2G scam and Supreme Court judgment cancelling the

licenses and proposed auctioning of 2G spectrum added a new uncertainty to

the already existing complex situation. The Indian telecom today is facing a

piquant situation of short term peril and long term prosperity

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Present Status of BSNL in Indian Telecom Market

Bharat Sanchar Nigam Limited (BSNL) is a public sector organization

with 100 percent ownership of government, formed in October, 2000. BSNL is

providing comprehensive range of telecom services in India: wire line, CDMA

wireless, GSM wireless, internet, broadband, carrier service, MPLS-VPN, VSAT,

VOIP services etc. The Company had 124.5 million subscribers as of June

2012. This includes 101.57 million wireless customers (CDMA and GSM). Rural

telephony is one of the focus areas of BSNL. It has provided village public

telephones (VPTs) in 6 lakh villages and has 416 lakh telephones in the rural

areas at the end of December'11. BSNL also pays special emphasis on

development of telecommunication facilities in north eastern region and in

tribal areas. BSNL had introduced broadband services from January 2005 and

has provided 86 lakh broadband connections till December 2011. The

Company was a dominant market player in telecommunication market in

India. After exposure of market to wireless and rapid expansion of private

sector, BSNL is facing serious problem. Indian market, which was facing severe

supply shortage problem in telecom services, has been rapidly growing in

wireless services and the market for wire line services had declined at alarming

rate. BSNL which virtually enjoyed monopoly in wire line segment faced

shrinkage in its strong hold and could not keep pace with expanding wireless

segment. As a result, its market share has declined rapidly. BSNL moved from
 25

number one position to fifth position and incurred a loss of Rs.6384 crore in

the year 2010-11 up from Rs.1823 crore in the previous year.

1.7 STATEMENT OF PROBLEM AND NEED FOR STUDY

Telecommunications occupy center stage in a fast developing country.

That would alone make it an interesting area to study. The complex situation

faced by state owned BSNL with its drop from near monopolistic number one

position to a loss making fifth position makes the need for study more

significant. BSNL is presently losing market share and incurring financial

losses. Company is seriously planning to come out of bureaucratic mold and

reorient the organization structurally and operationally to enhance customer

relations and to exploit its largest subscriber base, technical strengths and

infrastructural assets. In this context, the philosophy and practices of CRM

merit due consideration in the revival plan. The present study proposed to

examine the CRM issues in case of BSNL.

1.8 OBJECTIVES OF STUDY

The present study seeks to study CRM in mobile telephone services with

reference to BSNL AP telecom circle and suggests measures to BSNL on how to

improve its customer loyalty in the light of severe competition and changing

customer preferences. The study is specifically designed to examine the

determinants of customer relationship quality in case of mobile telecom

services and present an analytical model of CRM, customized to telecom

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industry, focusing on the perceptions of BSNL customers. The study further

analyses the steps taken by BSNL to build customer relationships and the

perception of BSNL employees about the CRM practices at BSNL and concludes

with suggesting strategies to BSNL to strengthen its Customer Relationship

Management.

1.9 ORGANIZATION OF DISSERTATION

The study is organized into six chapters.

Chapter 1 is the introductory chapter that explains the concept of

customer relationship management and its importance to telecom

services. It outlines briefly the statement of problem, need for study,

objectives and ends with chapter wise organization of the thesis.

Chapter 2 is a review of relevant literature. It discusses the frame work

of the models in earlier studies on CRM and in particular CRM in

telecom. A review of literature on the constructs used in the proposed

models for survey of perceptions of customers and employees is also

made. The research gaps are identified and discussed.

Chapter - 3 discusses the research methodology covering research

questions, hypotheses, research design, sample design, survey

instrument, reliability tests, procedure for data collection and data

analysis.

Chapter 4 discusses the analysis and results. This chapter has three
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sections. Section - A is the analysis of data from customer perception

study. This section discusses the analysis and results relating to

influence of demographic and affiliation characteristics of respondents on

model variables, measurement of key variables and the results of

regression analysis and model fit. Section - B deals with the study of

marketing and CRM activates at BSNL, based on secondary data. Section

- C discusses the analysis of data of employee perception survey and the

results.

Chapter - 5 discusses findings and implication of findings to BSNL

managers.

In the final Chapter-6 the conclusions, suggestions, limitations and

directions for future research are provided.