Introduction

1
The Telecom industry is one of the fastest growing industries in India. India has
nearly 200 million telephone lines making it the third largest network in the world
after China and USA. With a growth rate of 45%, Indian telecom industry has the
highest growth rate in the world.

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

when the private sector was allowed in telecommunications equipment
manufacturing. In 1985, Department of Telecommunications (DOT) was established.
It was an exclusive provider of domestic and long-distance service that would be its
own regulator (separate from the postal system).

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

the economy. Also, examples of telecom revolution in many other countries, which
resulted in better quality of service and lower tariffs, led Indian policy makers to
initiate a change process finally resulting in opening up of telecom services sector for
the private sector. National Telecom Policy (NTP) 1994 was the first attempt to give a
comprehensive roadmap for the Indian telecommunications sector. In 1997, Telecom
Regulatory Authority of India (TRAI) was created. TRAI was formed to act as a
regulator to facilitate the growth of the telecom sector. New National Telecom Policy
was adopted in 1999 and cellular services were also launched in the same year.

2
 Telecommunication sector in India can be divided into two segments: Fixed
Service Provider (FSPs), and Cellular Services. Fixed line services consist of basic
services, national or domestic long distance and international long distance services.
The state operators (BSNL and MTNL), account for almost 90 per cent of revenues
from basic services. Private sector services are presently available in selective urban
areas, and collectively account for less than 5 per cent of subscriptions. However,
private services focus on the business/corporate sector, and offer reliable, high- end
services, such as leased lines, ISDN, closed user group and videoconferencing.

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

The telecom sector is also afflicted by a number of restraints. These include:-

• Sluggish pace of reform process.

• Lack of infrastructure in semi-rural and rural areas, which makes it difficult to
make inroads into this market segment as service providers have to incur a
huge initial fixed cost.
• Limited spectrum availability.

The main binding objectives for all the telecommunication companies operating in
India are as follows:-

• To facilitate telecommunication for all.

• Ensuring quick availability of telephone connectivity.

3
• Achieve universal service access at affordable price covering all Indian
villages, as early as possible.

• Providing world class telecommunication services.

• Solving consumer complaints, resolve disputes, and special attention to be
given to public interface.
• To provide widest possible range of services at reasonable prices.
• To emerges as a major manufacturing base and major exporter of
telecommunication equipment.
• To protect the defense and security interests of the country.

4
 HISTORY

In this Chapter we include the History of Telecom industry in India. How

it Start in India.

Telecom in the real sense means transfer of information between two distant
points in space. The popular meaning of telecom always involves electrical signals
and nowadays people exclude postal or any other raw telecommunication methods
from its meaning. Therefore, the history of Indian telecom can be started with the
introduction of telegraph.

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
Harbor. 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 through out this period. A separate department was
opened in 1854 when telegraph facilities were opened to the public

Introduction of the Telephone

In 1880, two telephone companies namely The Oriental Telephone Company

Ltd. and The Anglo-Indian Telephone Company Ltd. approached the Government of
India to establish telephone exchanges in India. The permission was refused on the

5
grounds that the establishment of telephones was a Government monopoly and that
the Government itself would undertake the work. By 1881, the Government changed
its earlier decision and a license was granted to the Oriental Telephone Company
Limited of England for opening telephone exchanges at Kolkata, Mumbai, Chennai
(Madras) and Ahmedabad. January 28, 1882, is a Red Letter Day in the history of
telephone in India. On this day Major E. Baring, Member of the Governor General of
India's Council declared open the Telephone Exchange in Kolkata, Chennai and
Mumbai. The exchange at Kolkata named "Central Exchange" was opened at third
floor of the building at 7, Council House Street. The Central Telephone Exchange had
93 numbers of subscribers. Bombay also witnessed the opening of Telephone
Exchange in 1882.

Further developments

• 1902 - First wireless telegraph station established between Saugor Islands and
Sandheads.
• 1907 - First Central Battery of telephones introduced in Kanpur.
• 1913-1914 - First Automatic Exchange installed in Shimla. July 23, 1927 -
Radio-telegraph system between the UK and India, with beam stations at
Khadki and Daund, inaugurated by Lord Iwireless telegraph
• win by exchanging greetings with the King of England.
• 1933 - Radiotelephone system inaugurated between the UK and India.
• 1953 - 12 channel carrier system introduced.
• 1960 - First subscriber trunk dialing route commissioned between Kanpur and
Lucknow.
• 1975 - First PCM system commissioned between Mumbai City and Andheri
telephone exchanges.
• 1976 - First digital microwave junction introduced.
• 1979 - First optical fibre system for local junction commissioned at Pune.
• 1980 - First satellite earth station for domestic communications established at
Secunderabad, A.P..
• 1983 - First analog Stored Program Control exchange for trunk lines
commissioned at Mumbai.

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 • 1984 - C-DOT established for indigenous development and production of
digital exchanges.
• 1985 - First mobile telephone service started on non-commercial basis in
Delhi.

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 telephone was a
status symbol rather than being an instrument of utility. The number of telephones
grew leisurely to 980,000 in 1971, 2.15 million in 1981 and 5.07 million in 1991, the
year economic reforms were initiated in the country.

While certain innovative steps were taken from time to time, as for example
introduction of the telex service in Mumbai in 1953 and commissioning of the first
[subscriber trunk dialing] route between Delhi and Kanpur in 1960, the first waves of
change were set going by Sam Pitroda in the eighties. He brought in a whiff of fresh
air. The real transformation in scenario came with the announcement of the National
Telecom Policy in 1994.

Industry Sectors
From holistic point of view telecom industry can be divided to four sub-sets. The
major forces in Indian telecom industry are Service providers. All major telecom
equipment suppliers have their R&D centers in India. In last 5 years, global giants in
mobile devices have set up their manufacturing facilities in India.

Growth Avenues

A managed service is another segment that is attracting telecom companies. On

account of the rapidly growing subscriber base, service providers find it difficult to
manage their infrastructure and network management operations. In such cases, they
completely or partially outsource their infrastructure or network management
operations. To reduce their network deployment costs, many service providers are
considering infrastructure sharing offers the following advantages:
• Improved service quality

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 • Increased affordability for customers
• Faster roll out of services in rural and remote areas
• Significant reduction in initial set up costs
• Increased environmental aesthetics
• Lower operating costs for service providers
Enterprise Telecom Services includes key services, such as voice over Internet
protocol (VoIP), dedicated telecom communication systems; IT infrastructure enabled
unified communication services, etc. Telecom service providers are increasingly
targeting enterprises by providing dedicated services and are expected to witness
major developments in near future.

Virtual Private Network is a private data network that provides connectivity within
closed user groups via public telecommunication infrastructure. Competition is likely
to heat up in the VPN segment as DoT has relaxed the norms for private players.

3G: The Indian government plans to auction the spectrum for 3G services by inviting
bids from domestic as well as foreign players, and creating a competitive environment
that offers better services to consumers. Therefore, the 3G spectrum is among the
major investment opportunities and growth drivers of the telecom industry. The
immense potential for 3G is reflected by the 30–40 percent annual growth in Value-
Added Services. Cell phone manufacturers are striving to develop USD 100 priced
3G handsets for the Indian market. India expects to replicate its 2G growth in 3G
services.

WiMAX has been one of the most significant developments in wireless

communication in the recent past. Since this mode of communication provides
network access in inaccessible locations at a speed of more than 4 Mbps, it is
expected to be a major factor in driving telecom services in India, especially wireless
services. Thus, it will lead to the increased use of telecom services, Internet,
Value-added services and enterprise services. WiMAX is expected to accelerate
economic growth and assist in providing better education, healthcare and
entertainment services.

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It is estimated that India will have 13 million WiMAX subscribers by 2012. Aircel is
the pioneer in WiMAX technology in India.

The state-owned player, BSNL, aims to connect 74,000 villages through WiMAX.
Bharti, Reliance and VSNL have acquired licenses in the 3.3GHz range to utilise the
Opportunities offered by this domain.
Value Added Services: The VAS industry was worth USD 632 million in 2006–07.
The industry is estimated to grow by 60 percent in 2007–08 and become an USD
1,011 million opportunity. The VAS industry is currently focusing on the
entertainment sector, such as the Indian film industry and cricket; however, there is
scope for growth in other avenues as utility-based services, such as location
information and mobile transactions.

Rural Telephony: As the government targets to increase rural tele density from the
current 2 percent to 25 percent by 2012, rural telephony will require major
investments. This segment will boost the demand for telecom services, equipment,
Internet services and other value-added services; thereby, offering great market
opportunities for telecom players.

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 NUMBER OF PLAYERS:

The top players in the industry are:

1) Reliance Communications Limited

2) Bharti Airtel Limited
3) BSNL
4) MTNL
5) Hutchison Essar
6) Ericsson
7) Nokia
8) Siemens Communications
9) Idea Cellular Limited
10) Tata Teleservices

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 ABSTRACT

The telecommunication network in India is one of the largest in the world

providing wide-ranging services such as basic, cellular, internet, radio
paging, VSAT etc. India is the fifth country to cross the 100 million
mobile subscriber mark to join Russia, Japan, United States and China.
Indian Telecom Sector is one of the fastest growing sectors of the
economy, growing at an average of more than 20 percent over the last
four years The country has an investment potential estimated at US$ 37
billion by 2005 and US$ 69 billion by 2010.

India has 48 million fixed telephone connections, growing at 22 per cent per
annum and almost 100 million cellular phone connections, growing at 100 per cent
per annum. The telecom network in the country comprises over 35,000 exchanges
with switching capacity of over 47 million, 427 digital trunk automatic exchanges,
and over 326,271 route km of optic fiber network. In addition to the two state-owned
companies BSNL and MTNL, several private players have established a significant
presence in both the basic and cellular markets.

The Indian telecommunications sector has undergone a major process of

transformation because of significant Government policy reforms during the recent
years. The New Telecom Policy, 1999 focused on creating an ideal environment for
investment, establishing communication infrastructure by leveraging on technological
development and providing affordable telecom services to all. These objectives of the
policies have resulted in rapid growth of subscribers and lower tariffs. We believe that
with these major initiatives of the Government, the mobile market in India will have a
promising future.

11
COMPANY
PROFILE

12
VODAFONE:

We will be the communications leader in an increasingly connected

world

Vodafone Group Plc is the world's leading mobile telecommunications

company, with a significant presence in Europe, the Middle East, Africa, Asia Pacific
and the United States through the Company's subsidiary undertakings, joint ventures,
associated undertakings and investments.

The Group's mobile subsidiaries operate under the brand name 'Vodafone'. In the
United States the Group's associated undertaking operates as Verizon Wireless.
During the last few years, Vodafone Group has entered into arrangements with
network operators in countries where the Group does not hold an equity stake. Under
the terms of these Partner Market Agreements, the Group and its partner operators co-
operate in the development and marketing of global products and services, with
varying levels of brand association.

13
At 30 June 2009, based on the registered customers of mobile telecommunications
ventures in which it had ownership interests at that date, the Group had 315 million
customers, excluding paging customers, calculated on a proportionate basis in
accordance with the Company's percentage interest in these ventures.

The Company's ordinary shares are listed on the London Stock Exchange and the
Company's American Depositary Shares ('ADSs') are listed on the New York Stock
Exchange. The Company had a total market capitalization of approximately £63.6
billion at 30 July 2009.

Vodafone Group Plc is a public limited company incorporated in England under

registered number 1833679. Its registered office is Vodafone House, The Connection,
Newbury, Berkshire, RG14 2FN, England.

History:

Vodafone was formed in 1984 as a subsidiary of Racal Electronics Plc. Then known
as Racal Telecom Limited, approximately 20% of the company's capital was offered
to the public in October 1988. It was fully demerged from Racal Electronics Plc and
became an independent company in September 1991, at which time it changed its
name to Vodafone Group Plc.

Following its merger with Air Touch Communications, Inc. (‘Air Touch’), the
company changed its name to Vodafone Air Touch Plc on 29 June 1999 and,
following approval by the shareholders in General Meeting, reverted to its former
name, Vodafone Group Plc, on 28 July 2000.

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Marten Pieters - CEO of Vodafone India

Marten Pieters (LLM) completed his study Dutch Law at Groningen

University with a major in Economics in 1977. Between 1977 and 1989 he
occupied various management positions at Royal Smilde Food NV. In 1989
he joined KPN and held positions first as Commercial Director and later as
Managing Director of a telecom district.

In 1995, he was appointed Vice President of International Operations responsible for

KPN's affiliated companies, including Eircom, UMC, Czesky Telekom and Pennon
GSM. As from 1998 he was Executive Vice President for KPN International.

From April 2000 till April 2003 Marten became member of the Executive Board of
KPN and CEO of the Division KPN Business Solutions. In August 2003 he was
appointed as CEO of Celtel International B.V., today the second largest African
Mobile Telecom Operator working in many African countries.

In 2005 Celtel was sold to Zain for USD 3.4 billion. Marten is member of the
advisory board of AMREF Flying Doctors in The Netherlands and is board member
of Social Investor Foundation for Africa and member of the Supervisory Board of the
Investment Fund for Health in Africa. Until he joined Vodafone he was a non
executive member of the Board of Millicom International (MIC).

15
BHARTI AIRTEL:

Bharti Enterprises is one of India’s leading business groups with interests in

telecom, retail, manufacturing, agri business and financial services.

Bharti Airtel is Asia’s leading integrated telecom services provider with operations in
India and Sri Lanka. Bharti Airtel has been at the forefront of the telecom revolution
and has transformed the sector with its world-class services built on leading edge
technologies.

In financial services, Bharti is partnering with AXA of France to offer life insurance,
general insurance and asset management.

Bharti Retail, the 100% subsidiary of Bharti Enterprises operates multiple format
consumer friendly stores. Bharti Wal-Mart is a B2B JV with Wal-Mart
for wholesale cash-and-carry and back-end supply chain management operations.

The other businesses in the group are Beetel for communication and media devices
and Bharti Del Monte India, a JV with Del Monte to offer fresh and
processed fruits & vegetables in India as well as international markets.

Chairmen

16
Sunil Bharti Mittal is the Chairman & Managing Director of Bharti Airtel Ltd.
head quartered at New Delhi, India.

Bharti Airtel, India's leading private integrated telecom company has been at the
forefront of the telecom revolution and has transformed the telecom sector with its
world-class services built on leading edge technologies. Bharti has been a pioneering
force in the telecom sector and today enjoys a strong nationwide presence.

Bharti Airtel has grown successfully in partnership with various leading companies
of the world - Singapore Telecom, Vodafone, Warburg Pincus, British Telecom to
name a few.

Bharti Group has joint ventures with AXA for financial services, with Wal-Mart for
retail, and with Del Monte for its agri-business. Beetel Teletech, another group
company, is India's largest manufacturer and exporter of telephone terminals.

Sunil started his career at a young age of 18 after graduating from Punjab University
in India and founded Bharti, with a modest capital, in the year 1976. Today, at 51 he
heads a successful enterprise, amongst the top 5 in India, with a market capitalization
of over US$ 25 billion and employing over 30,000 people.

Sunil is an alumnus of Harvard Business School, MA, USA.

Sunil has been honored with one of India's highest civilian award – Padma Bhushan.

17
Sunil has been conferred the degree of Doctor of Science (Honoris Causa) by the G B
Pant University of Agriculture & Technology. He is also an Honorary Fellow of "The
Institution of Electronics and Telecommunication Engineers (IETE)".

Sunil received the GSM Association Chairman's Award for the year 2008. He is also
on the board of the International Telecommunication Union (ITU), the leading United
Nations Agency for Information and Communication Technology.

Sunil has been honored with the 'Global Vision' Award 2008 by the U.S.-India
Business Council (USIBC). He has been the co-chairman of the World Economic
Forum in 2007 in Davos and is a member of its International Business Council

Sunil was chosen the Asia Businessman of the Year by Fortune and Asia Pacific CEO
of the Year by Frost & Sullivan in 2006.

Sunil was the Honorary Consul General of the Republic of Seychelles in India
(August 1999 to June 2008).

Telecom giant Bharti Airtel is the flagship company of Bharti Enterprises. The Bharti
Group has a diverse business portfolio and has created global brands in the
telecommunication sector. Airtel comes from Bharti Airtel Limited, India’s largest
integrated and the first private telecom services provider with a footprint in all the 23
telecom circles. Bharti Airtel since its inception has been at the forefront of
technology and has steered the course of the telecom sector in the country with its
world class products and services. The businesses at Bharti Airtel have been
structured into three individual strategic business units (SBU’s) - Mobile Services,
Airtel Telemedia Services & Enterprise Services. The mobile business provides
mobile & fixed wireless services using GSM technology across 23 telecom circles
while the Airtel Telemedia Services business offers broadband & telephone services

18
in 95 cities and has recently launched India's best Direct-to-Home (DTH) service,
Airtel digital TV.

The company served an aggregate of 88,270,194 customers as of December 31, 2008;

of whom 85,650,733 subscribed to GSM services and 2,619,461 use the Telemedia
Services either for voice and/or broadband access delivered through DSL. Bharti
Airtel is the largest wireless service provider in the country, based on the number of
subscribers as of December 31, 2008. They also offer an integrated suite of telecom
solutions to their enterprise customers, in addition to providing long distance
connectivity both nationally and internationally. They have recently forayed into
media by launching their DTH and IPTV Services. All these services are rendered
under a unified brand "Airtel".

Organisational Structure:

19
IDEA CELLULAR:

20
 IDEA Cellular Limited was incorporated in 1995 and is one of the leading
GSM mobile services operators. Headquartered in Mumbai, it has licenses to operate
in all 22 service areas across the country, though commercial operations are currently
in 16 services areas. With a customer base of over 47.1 million subscribers, the
operations cover the states of Maharashtra, Goa, Gujarat, Rajasthan, Delhi, Haryana,
Himachal Pradesh, Uttaranchal, Uttar Pradesh, Madhya Pradesh, Chhattisgarh,
Andhra Pradesh, Kerala, and Bihar. Orissa, and Tamil Nadu will become operational
during 2008-09, and Idea will then cover approximately 90 per cent of the country’s
telephony potential.

IDEA enjoys a market leadership position in many of its operational areas. It offers
GPRS on all its operating networks for all categories of subscribers, and was the first
company in India to commercially launch the next generation EDGE technology in
Delhi in 2003. As a pioneer in technology deployment, it has been in the forefront
through the adoption of bio fuels to power its base stations, and by employing satellite
connectivity to reach inaccessible rural areas in Madhya Pradesh.

IDEA has been a leader in the introduction of value added services, and there are
several firsts to its credit, including a voice portal ‘Say Idea’, Idea TV, voice chat,
instant messenger, and many more. Tariff plans have been customer friendly, catering
to the unique needs of different customer segments, where ‘Women’s Card’ caters to
the special needs of the woman on the move, and ‘Youth Card’ covers the emerging
youth segment.

IDEA has won numerous awards and is the only Indian GSM operator to win the
prestigious GSM Association Award consecutively in the best mobile technology
category for the ‘Best Billing and Customer Care Solution’ both in 2006 and in 2007
in the face of international competition.

In 2007 IDEA was listed on the National Stock Exchange (NSE) and the Bombay
Stock Exchange (BSE).

Management Team

21
Sanjeev Aga - Managing Director
Anil J. Jhala - CFO
Anil K. Tandan - CTO
Prakash K. Paranjape - Chief Information Officer
Pradeep Shrivastava - Chief Marketing Officer Navanit Narayan - Chief Service
Delivery Officer
Vinay K. Razdan - Chief Human Resource Officer
Rajat K. Mukarji - Chief Corporate Affairs Officer
Rajesh K. Srivastava - Chief Materials and Procurement Officer
Vijay Grover - Chief Project Officer
Ambrish Jain - Chief Operating Officer, Corporate
Himanshu Kapania - Chief Operating Officer (Corporate)

IDEA Cellular is part of the Aditya Birla Group, India's first truly multinational
corporation. The group operates in 25 countries, and is anchored by over 1,25,000
employees belonging to 25 nationalities.

The combined holding of the Aditya Birla Group companies in Idea stands at 98.3 per
cent. Mr. Kumar Mangalam Birla has been named the Chairman of the company.

The Indian telecommunications market for mobile services is divided into 22 "Service
Areas" classified into "Metro", Category "A", Category "B" and Category "C" service
areas by the Government of India. These classifications are based principally on a
Service Area's revenue generating potential

Customer Service and Innovation are the drivers of this Cellular Brand. A brand
known for their many firsts, IDEA is the only operator to launch General Packet
Radio Service (GPRS) and EDGE in the country. IDEA has seen phenomenal growth
since its inception, the company's footprint idea is to first achieve critical mass, then
drill deep instead of spreading thin, however, does not increasing geographic footprint
only, it also drills deep and successfully attempts to provide excellent network
coverage in all its circles of operations.

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Brand Idea
It is almost impossible to disintegrate brand Idea from the corporate Idea. Brand
values are the company values and vise versa.

Brand Vision: It goes without saying that the brand vision of idea mirrors the
company’s vision. The brand mission statement is...... To be the most customer-
focused mobile service brand, continuously innovating to help liberate our customers
from the shackles of time & space.

Values

Integrity - Honesty in every action

At Aditya Birla Group, Integrity is defined as: Acting and taking decisions in a
manner that is fair, honest, following the highest standards of professionalism and
also perceived to be so. Integrity for us means not only financial and intellectual
integrity, but in all other forms as are commonly understood.

Commitment - deliver on the promise

At Aditya Birla Group Commitment is defined as: On the foundation of integrity,

doing whatever it takes to deliver value to all stakeholders. In the process, taking
ownership of our actions and decisions, those of our team and that part of the
organization that we are responsible for.

Seamlessness - boundryless in letter and spirit

At Aditya Birla Group, Seamlessness is defined as:

Thinking and working together across functional silos, hierarchies, business and
geographies. Leveraging the available diversity to garner synergy benefits and
promote openness through sharing and collaborative efforts.

Speed - one step ahead always

23
At Aditya Birla Group, Speed is defined as: Responding to internal and external
customers with a sense of urgency. Continuously seeking to crash timelines and
choosing the right rhythm to optimize organization efficiencies.

RELIANCE COMMUNICATION:

A dream come true

24
The late Dhirubhai Ambani dreamt of a digital India — an India where the common
man would have access to affordable means of information and communication.
Dhirubhai, who single-handedly built India’s largest private sector company virtually
from scratch, had stated as early as 1999: “Make the tools of information and
communication available to people at an affordable cost. They will overcome the
handicaps of illiteracy and lack of mobility.”

Think big. Think different. Think ahead.

Dhirubhai preached — and personally practised — one mantra throughout his life:
Dream with conviction.

He built the Reliance empire from scratch and, in a short span of 25 years, it
catapulted to become one of the top Fortune 500 corporations of the world — an
achievement unparalleled in history.

Corporate Governance

Organisations, like individuals, depend for their survival, sustenance and growth on
the support and goodwill of the communities of which they are an integral part, and
must pay back this generosity in every way they can...

This ethical standpoint, derived from the vision of our founder, lies at the heart of the
CSR philosophy of the Reliance – ADA Group.

While we strongly believe that our primary obligation or duty as corporate entities is
to our shareholders – we are just as mindful of the fact that this imperative does not
exist in isolation; it is part of a much larger compact which we have with our entire
body of stakeholders: From employees, customers and vendors to business partners,
eco-system, local communities, and society at large.

25
We evaluate and assess each critical business decision or choice from the point of
view of diverse stakeholder interest, driven by the need to minimize risk and to pro-
actively address long-term social, economic and environmental costs and concerns.

For us, being socially responsible is not an occasional act of charity or that one-time
token financial contribution to the local school, hospital or environmental NGO. It is
an ongoing year-round commitment, which is integrated into the very core of our
business objectives and strategy

Vision

“We will leverage our strengths to execute complex global-scale projects to facilitate
leading-edge information and communication services affordable to all individual
consumers and businesses in India.

We will offer unparalleled value to create customer delight and enhance business
productivity.

We will also generate value for our capabilities beyond Indian borders and enable
millions of India's knowledge workers to deliver their services globally.”

AnilD.Ambani

Regarded as one of the foremost corporate leaders of contemporary India,Shri Anil D

Ambani, 48, is the chairman of all listed companies of the Reliance ADA Group,
namely, Reliance Communications, Reliance Capital, Reliance Energy and Reliance
Natural Resources limited.

26
He is also Chairman of the Board of Governors of Dhirubhai Ambani Institute of
Information and Communication Technology, Gandhi Nagar, Gujarat.

Till recently, he also held the post of Vice Chairman and Managing Director of
Reliance Industries Limited (RIL), India’s largest private sector enterprise.

Anil D Ambani joined Reliance in 1983 as Co-Chief Executive Officer, and was
centrally involved in every aspect of the company’s management over the next 22
years.

He is credited with having pioneered a number of path-breaking financial innovations

in the Indian capital markets. He spearheaded the country’s first forays into the
overseas capital markets with international public offerings of global depositary
receipts, convertibles and bonds. Starting in 1991, he directed Reliance Industries in
its efforts to raise over US$ 2 billion. He also steered the 100-year Yankee bond issue
for the company in January 1997.

Board of Directors:

• Shri Anil D. Ambani - Chairman

• Prof. J Ramachandran

• Shri S.P. Talwar

• Shri Deepak Shourie

• Shri A.K.Purwar

Their business encompasses a complete range of telecom services covering mobile

and fixed line telephony. It includes broadband, national and international long
distance services and data services along with an exhaustive range of value-added
services and applications. Our constant endeavour is to achieve customer delight by
enhancing the productivity of the enterprises and individuals we serve.

Reliance Mobile (formerly Reliance India Mobile), launched on 28 December 2002,

coinciding with the joyous occasion of the late Dhirubhai Ambani’s 70th birthday,

27
was among the initial initiatives of Reliance Communications. It marked the
auspicious beginning of Dhirubhai’s dream of ushering in a digital revolution in India.
Today, the company can proudly claim that they were instrumental in harnessing the
true power of information and communication, by bestowing it in the hands of the
common man at affordable rates.

They endeavor to further extend their efforts beyond the traditional value chain by
developing and deploying complete telecom solutions for the entire spectrum of
society.
It was established in the year 2004 as Reliance Infrastructure Developers Private
Limited, Reliance Communications started laying 60,000 route kilometers of a pan-
India fibre optic backbone with high capacity, integrated (wireless and wireline),
convergent (voice, data and video) digital network and to offer services spanning the
entire infocomm value chain. It is capable of delivering a range of services spanning
the entire infocomm (information and communication) value chain, including
infrastructure and services for enterprises as well as individuals, applications, and
consulting.

TATA COMMUNICATION:

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 Tata Communications is a leading global provider of a new world of
communications. With a leadership position in emerging markets, Tata
Communications leverages its advanced solutions capabilities and domain expertise
across its global and pan-India network to deliver managed solutions to multi-national
enterprises, service providers and Indian consumers.

The Tata Global Network includes one of the most advanced and largest submarine
cable networks, a Tier-1 IP network, with connectivity to more than 200 countries
across 400 PoPs, and nearly 1 million square feet of data center and collocation space
worldwide.

Tata Communications' depth and breadth of reach in emerging markets includes

leadership in Indian enterprise data services, leadership in global international voice,
and strategic investments in operators in South Africa (Neotel), Sri Lanka (Tata
Communications Lanka Limited), Nepal (United Telecom Limited), and subject to
approval by the Chinese government, China (China Enterprise Communications)

Tata Communications Limited is listed on the Bombay Stock Exchange and the
National Stock Exchange of India and its ADRs are listed on the New York Stock
Exchange. (NYSE: TCL)

Vision

Deliver a new world of communications to advance the reach and leadership of our
customers.

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Commitment

Invest in building long-lasting relationships with customers and partners and lead
the industry in responsiveness and flexibility.

Strategy

Build leading-edge IP-leveraged solutions advanced by our unmatched global

infrastructure and leadership in emerging markets.

Tata Group Profile

Tata is a rapidly growing business group based in India with significant international
operations. Revenues in 2007-08 are estimated at $62.03 billion USD, of which 61 per
cent is from business outside India. The Group employs around 350,000 people
worldwide. The Tata name has been respected in India for 140 years for its adherence
to strong values and business ethics.

The business operations of the Tata Group currently encompass seven business
sectors: communications and information technology, engineering, materials,
services, energy, consumer products and chemicals. The Group's 27 publicly listed
enterprises have a combined market capitalization of some $60 billion, among the
highest among Indian business houses, and a shareholder base of 3.2 million. The
major companies in the Group include Tata Steel, Tata Motors, Tata Consultancy
Services (TCS), Tata Power, Tata Chemicals, Tata Tea, Indian Hotels and Tata
Communications.

Values

Service and business at Tata Communications is guided by a commitment to ethical

and responsible conduct.

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 • Integrity: Trust travels
We must conduct our business fairly, with honesty and transparency.
Everything we do must stand the test of public scrutiny.
• Understanding: Open the world
We must be caring, show respect, compassion and humanity for our
colleagues and customers around the world, and always work for the benefit of
the communities we serve.
• Flexibility: Act agile
We work to create, design and grow in an environment that supports our
customers and people with adaptive thinking and action.
• Excellence: Go the distance
We must constantly strive to achieve the highest possible standards in our day-
to-day work and in the quality of the goods and services we provide.
• Unity: Journey as one
We must work cohesively with our colleagues across the Group and with our
customers and partners around the world, building strong relationships based
on tolerance, understanding and mutual cooperation.
• Responsibility: Advance life
We must continue to be responsible, sensitive to the countries, communities
and environments in which we work, always ensuring that what comes from
the people goes back to the people many times over.

Srinath Narasimhan

Managing Director & CEO, Tata Communications

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 Srinath Narasimhan is the Managing Director and CEO of Tata
Communications (formerly VSNL), part of the $62.5 billion Tata Group.

Mr. Srinath has over 20 years experience within the Tata Group, having held various
positions in project management, sales and marketing, as well as significant corporate
functions in several Tata companies. Mr. Srinath has been responsible for
spearheading new projects in high-technology areas such as process automation and
control, computers and telecommunications and was an instrumental figure early in
the launch of the Tata Group's CDMA services.

Mr. Srinath previously served as Executive Assistant to the Chairman for Tata
Industries, a position he held until 1992. He worked with a strategic team to set up
Tata Information Systems, which later became Tata IBM. Throughout his tenure here,
he accepted a number of assignments in sales and marketing.

In 1998, Mr. Srinath returned to Tata Industries as General Manager, Projects and
worked with Tata Teleservices in this capacity for a year. In 1999, he moved to
Hyderabad as Chief Operating Officer responsible for all the operations of Tata
Teleservices. In late 2000, Mr. Srinath took over as Chief Executive Officer of Tata
Internet Services, a position he held until February 2002, when he moved to VSNL as
Director (Operations). He subsequently became Executive Director for VSNL.

In 2006, Mr. Srinath was honored with the Telecom Asia 'CEO of the Year' award in
recognition of his role in transforming VSNL from a domestic monopoly to a major
global telecommunications company in just four years. During this time, VSNL's
business model was reinvented and the company entered several new businesses, both
in India and abroad.

Mr. Srinath holds a degree in Mechanical Engineering from the Indian Institute of
Technology, Chennai and an MBA from the Indian Institute of Management, Kolkata,
specializing in marketing and systems.

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 Current Scenario

Telecommunication Sector Opportunities in India has grown phenomenally

in the past 3 years as has been surveyed by Indian Ministry of Communications and
Information Technology in New Delhi very recently. The telecom sector is one of the
leading contributors to India's flourishing economy.

According to the report presented by taking into account the statement of

Indian Ministry of Communications and Information Technology, the telecom
opportunities in India has been growing by 20 to 40 percent every year since past 3
years. The telecom services in India have been recognized as a world-class tool for
the socio-economic development in India. India is known to rank fourth in the
telecom industry in Asia after China, Japan, and South Korea and the telecom
network in India is known to stand in the eighth position across the globe and second
among the emerging economies.

The tele-density has grown leaps and bounds in the past few years from 2.3
percent in 1999 to 4.8 percent in 2002. The world average percentage for the telecom
industry as against the Indian average is 7.5 times while the Asian average against the
same was 4.5 times. The current market range of the telecommunication industry in
India has been estimated to USD 8 billion and this is expected to undergo an accretion
by the end of 2012.

The growth witnessed by the telecom market in India has increased the
number of opportunities for the industry and this has been fueled by the growing
mobile sector, which has attained the consumer level of 10 million by the end of
December 2002 that was almost 100 percent in the year. This outstanding growth in
the mobile sector explains the advent of digital cellular technology and reduced tariffs
as a consequence of competitive pressures. The growth in the cellular subscribers has
surpassed the benchmark of subscriber base. The telecom market has increased
dramatically with the advent of Wireless in Local Loop Technology.

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 Future Scenario

The telecommunications industry is one of the fastest growing industries in

India. It more than characterized the boom in the Indian economy. The teledensity in
India grew at a rate from just about three for every 100 people in 2000 to reach 10.66
per 100 as of October 2005. This phenomenal growth in the telecommunication
scenario can be attributed to the exponential growth of the wireless phones in the
country. The Government has targeted to have subscriber base of 250 million phones
by 2007, which would translate to a teledensity of 23 per 100 people. The major
beneficiary of these policy initiatives has been the wireless market, which has
spearheaded the telecom revolution in India and has continued to attract large
investments.

There is a lot made out for the 3G services. Should 3G services be introduced in
India? Would that serve the purpose? The initial buzz is that 3 G services would give
the always-on connectivity to the mobile owners.

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 Challenges for telecom industry

The challenges of the day is to search for new cost effective ways to roll out
telecom services in rural areas it means one has to choose proper and effective
technology for deployment and leverage on the use of available infrastructure to
reduce cost and time of role out of services. Those service providers who create the
right business would emerge wireless and the rest would remain spectators.

Connectivity of network and cost of bandwidth are also important to facilitate

broadband usage. Availability of local application and content is another are of
concern available on website as of today is in English. The content in local and
regional language will increase interest of the local population in broadband
utilization.

Wireless technology is the future growth driver for which spectrum is the most
important input. The task of spectrum management in a multi-user and multiusage
scenario is more daunting and crucial than ever before.

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 Telecom Regulatory Authority Of India

Telecom Regulatory Authority of India:

TRAI logo

Abbreviation TRAI
Formation 1997
Created by Telecom Regulatory Authority
Legal status
of India Act, 1997
Purpose/focus Independent regulator
Mahanagar Doorsanchar Bhawan,
Headquarters Jawaharlal Nehru Marg, New Delhi 110
002
Region served India
Chairman DR. J.S. SHARMA
Website http://www.trai.gov.in/

Notwithstanding anything contained in the Indian Telegraph Act, 1885, the functions
of the Authority shall be to:

1. Make recommendations, either suo motu or on a request from the licensor, on

the following matters, namely:

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 • Need and timing for introduction of new service provider.
• Terms and conditions of license to a service provider.
• Revocation of license for non-compliance for terms and conditions of
license.
• Measures to facilitate competition and promote efficiency in the
operation of telecommunication services so as to facilitate growth in
such services.
• Technological improvements in the services provided by the service
providers.
• Type of equipment to be used by the service providers after inspection
of equipment used in the network.
• Measures for the development of telecommunication technology and
any other matter relatable to telecommunication industry in general.
• Efficient management of available spectrum.

2. Discharge the following functions, namely:

• Ensure compliance of terms and conditions of license.
• Notwithstanding anything contained in the terms and conditions of the
license granted before the commencement of the Telecom Regulatory
Authority (Amendment) Ordinance, 2000, fix the terms and conditions
of inter-connectivity between the service providers.
• Ensure technical compatibility and effective inter-connection between
different service providers.
• Regulate arrangement amongst service providers of sharing their
revenue derived from providing telecommunication services.
• Lay down the standards of quality of service to be provided by the
service providers and ensure the quality of service and conduct the
periodical survey of such service provided by the service providers so
as to protect interest of the consumers of telecommunication services.

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 • Lay down and ensure the time period for providing local and long
distance circuits of telecommunication between different service
providers.
• Maintain register of interconnect agreements and of all such other
matters as may be provided in the regulations.
• Keep register maintained under clause (viii) open for inspection to any
member of public on payment of such fee and compliance of such
other requirement as may be provided in the regulations.
• Ensure effective compliance of universal service obligations.

3. Levy fees and other charges at such rates and in respect of such services as
may be determined by regulations.

4. Perform such other functions including such administrative and financial

functions as may be entrusted to it by the Central Government or as may be
necessary to carry out the provisions of this Act:
• Provided that the recommendations of the Authority specified in the
clause (a) of this sub-section shall not be binding upon the Central
Government:
• Provided further that the Central Government shall seek the
recommendations of the Authority in respect of matters specified in
sub-clauses (i) and (ii) of clause (a) of this sub-section in respect of
new license to be issued to a service provider and the Authority shall
forward its recommendations within a period of sixty days from the
date on which that Government sought the recommendations:
• Provided also that the Authority may request the Central Government
to furnish such information or documents as may be necessary for the
purpose of making recommendations under sub-clauses (i) and (ii) of
clause (a) of this sub-section and that Government shall supply such
information within a period of seven days from receipt of such request:

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• Provided also that the Central Government may issue a license to a
service provider if no recommendations are received from the
Authority within the period of specified in the second provision or
within such period as may be mutually agreed upon between the
Central Government and the Authority.
• Provided also that if the Central Government having considered that
recommendation of the Authority comes to a prima facie conclusion
that such recommendation cannot be accepted or needs modifications,
it shall, refer the recommendations back to the Authority for its
reconsideration, and the Authority may within fifteen days from the
date of receipt of such reference, forward to the Central Government
its recommendation after considering the reference made by the
Government. After receipt of further recommendation, if any, the
Central Government shall take a final decision.

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 Research
Methodology

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Research Objective:

The main objective of the Management Research Project – 1 is to analysis and

compares the different Service Provider telecom companies.

The sub objective of Research is as follows:

- To analyze the companies market situation.

- To analyze the growth of companies.

- To study the Nature and Significance.

To study the telecom industry as a service providing

Research Method:

The Research consisted to analysis of Various Private Telecom Companies in

India Through collecting Data Of Various Private Companies of Telecom Industries.

Types of Research:

There are two types of research are as follows:

• Primary Market Research
• Secondary Market Research

We are emphasized on Secondary Market Research.

Classification of Telecommunication Service:

• Basic services
• Cellular services

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Cellular Services;
Overview:
There are five private sector operators in each area an incumbent state operation.
Almost 80% of the cellular subscriber base belongs to the price paid segment.
The DOT has allowed cellular companies to buy rivalry within the same
operating circle provided their combined market share did not exceed 67% previous
they were only allows to buy companies out side their circle.

Growth Driver
Opening up of international and domestic long distance telephone services are
growth driver in the industry. Cellular operators now get substantial revenue from
these services and compensate them for reduction in tariffs on air time which along
with rental was the main source of revenue. The reduction in tariffs for airtime
national long distance international long distance & handset prices has driven
demand.

Wireless subscriber

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ANALYSIS

43
 PORTER’S FIVE FORCES

There is continuing interest in the study of the forces that impact on an organisation or
an industry, particularly those that can be harnessed to provide competitive advantage.

As Porter's 5 Forces analysis deals with factors outside an industry that influence the
nature of competition within it, the forces inside the industry (microenvironment) that
influence the way in which firms compete, and so the industry’s likely profitability is
conducted in Porter’s five forces model.

The nature of competition in an industry is strongly affected by suggested five forces.

The stronger the power of buyers and suppliers, and the stronger the threats of entry
and substitution, the more intense competition is likely to be within the industry.
However, these five factors are not the only ones that determine how firms in an
industry will compete – the structure of the industry itself may play an important role.

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Main Aspects of Porter’s Five Forces Analysis

The original competitive forces model, as proposed by Porter, identified five forces
which would impact on an organization’s behaviors in a competitive market. These
include the following:

• The rivalry between existing sellers in the market

• The power exerted by the customers in the market

• The impact of the suppliers on the sellers

• The potential threat of new sellers entering the market

• The threat of substitute products becoming available in the market

Understanding the nature of each of these forces gives organizations the necessary
insights to enable them to formulate the appropriate strategies to be successful in their
market (Thurlby, 1998). We will examine these concepts as described by Porter’s 5
force model and as applied to Indian telecom industry simultaneously.

Force 1: The Degree of Rivalry

The intensity of rivalry, which is the most obvious of the five forces in an industry,
helps determine the extent to which the value created by an industry will be dissipated
through head-to-head competition. The most valuable contribution of Porter's “five
forces” framework in this issue may be its suggestion that rivalry, while important, is
only one of several forces that determine industry attractiveness.

• This force is located at the centre of the diagram

• Is most likely to be high in those industries where there is a threat of

substitute products; and existing power of suppliers and buyers in the
market

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Now let us understand the implication of degree of revelry in Indian telecom sector.
The dimensions of this parameter are determined by:

High Exit Barriers: In any industry, if the exit barrier is high it increases the
difficulty of any organization to leave the industry sector. So it makes any difficult to
any willing to leave company to leave the industry. The telecom industry suffers from
high exit barriers, mainly due to its specialized equipment. Networks and billing
systems cannot really be used for much else, and their swift obsolescence
makes liquidation pretty difficult.

High Fixed Cost: The industry also suffers from high fixed cost which makes the
entry barrier also very high for the industry. It comes as no surprise that in the capital-
intensive telecom industry the biggest barrier to entry is access to finance. To cover
high fixed costs, serious contenders typically require a lot of cash. When capital
markets are generous, the threat of competitive entrants escalates. When financing
opportunities are less readily available, the pace of entry slows. Meanwhile,
ownership of a telecom license can represent a huge barrier to entry.

• 6-7 players in each region

• 3 out of 4 BIG-Four present in each region

Very less time to gain advantage by an innovation: Every company in this

industrial sector in investing a huge amount in research and development and
marketing strategy. That is why we see any offer launched by any company is counter
attacked by other companies very soon. This makes the industry rivalry most
prominent.
Eg. Caller tunes, life time card

Price wars: The price war is really very fierce in this industry. Price war in telecom
industry has commoditized the market that branding has taken a backseat.

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Force 2: The Threat of New Entrants

Both potential and existing competitors influence average industry profitability. The
threat of new entrants is usually based on the market entry barriers. They can take
diverse forms and are used to prevent an influx of firms into an industry whenever
profits, adjusted for the cost of capital, rise above zero. In contrast, entry barriers exist
whenever it is difficult or not economically feasible for an outsider to replicate the
incumbents’ position. The most common forms of entry barriers, except intrinsic
physical or legal obstacles, are as follows:

• Economies of scale: In telecom industry the economies of scale exists

from the supplier side. That is why companies try to increase their
subscriber base at drastic rate.

• Distribution channels: Distribution channels are also providing a major

determining factor. These channels are not loyal to any company and
competitors can easily access them and make out work for them.

• Customer Switching Costs: Customer switching cost is very low, as

cost of new connection is really low. And new connection offers more
benefits to the customers.

Force 3: The Threat of Substitutes

The threat that substitute products pose to an industry's profitability depends on the
relative price-to-performance ratios of the different types of products or services to
which customers can turn to satisfy the same basic need. The threat of substitution is
also affected by switching costs – that is, the costs in areas such as retraining,
retooling and redesigning that are incurred when a customer switches to a different
type of product or service. It also involves:
• Product-for-product substitution (email for mail, fax); is based on the
substitution of need;

• Generic substitution (Video suppliers compete with travel companies);

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 • Substitution that relates to something that people can do without
(cigarettes, alcohol).

Now let us discuss this concept for telecom industry. The potential major substitutes
for telecom industry are as follows:

 VOIP (Skype, Messenger etc.)

 Online Chat
 Email
 Satellite phones

All of these technologies have a huge potential, though none of the above a major
threat in current scenario. So the telecom industry has to keep a close look on these
substitutes.

Force 4: Buyer Power

Buyer power is one of forces that influence the appropriation of the value created by
an industry. The most important determinants of buyer power are the size and the
concentration of customers. Other factors are the extent to which the buyers are
informed and the concentration or differentiation of the competitors. Kippenberger
(1998) states that it is often useful to distinguish potential buyer power from the
buyer's willingness or incentive to use that power, willingness that derives mainly
from the “risk of failure” associated with a product's use.

• This force is relatively high where there a few, large players in the
market, as it is the case with retailers a grocery stores;

• Present where there is a large number of undifferentiated, small

suppliers, such as small farming businesses supplying large grocery
companies;

• Low cost of switching between suppliers, such as from one fleet

supplier of trucks to another.

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In the context of Indian telecom industry we can say that the following points
influence the buyer power:

 Lack of differentiation among the service provider

 Cut throat competition
 Customer is price sensitive
 Low switching costs
 Number portability to have negative impact

Force 5: Supplier Power

Supplier power is a mirror image of the buyer power. As a result, the analysis of
supplier power typically focuses first on the relative size and concentration of
suppliers relative to industry participants and second on the degree of differentiation
in the inputs supplied.

The ability to charge customers different prices in line with differences in the value
created for each of those buyers usually indicates that the market is characterized by
high supplier power and at the same time by low buyer power.

In the drawback of Indian telecom industry the following should be kept in mind:

 Large number of suppliers: The industry basically has a large number of

suppliers, which helps them to choose from a lot of options. So they try to select
the best option to deliver the value to the customers and to have a competitive
advantage from their competitor.

 Shared tower infrastructure: Technology has helped them to share the tower
infrastructure. This basically helps them to reduce the initial investment a lot.

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 Limited pool of skilled managers and engineers especially those well versed in
the latest.

 Medium cost of switching since changing their hardware would lead to

additional cost in modifying the architecture.

 Overall influence on the industry – medium.

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 PESTEL ANALYSIS

PEST analysis stands for "Political, Economic, Social, and Technological

analysis" and describes a framework of macro-environmental factors used in the
environmental scanning component of strategic management. Some analysts added
Legal and rearranged the mnemonic to SLEPT; inserting Environmental factors
expanded it to PESTEL or PESTLE, which is popular in the UK The model, has
recently been further extended to STEEPLE and STEEPLED, adding education and
demographic factors. It is a part of the external analysis when conducting a strategic
analysis or doing market research, and gives an overview of the different macro
environmental factors that the company has to take into consideration. It is a useful
strategic tool for understanding market growth or decline, business position, potential
and direction for operations.

The growing importance of environmental or ecological factors in the first

decade of the 21st century have given rise to green business and encouraged
widespread use of an updated version of the PEST framework. STEER analysis
systematically considers Socio-cultural, Technological, Economic, Ecological, and
Regulatory factors.

Political factors:

They are how and to what degree a government intervenes in the economy.
Specifically, political factors include areas such as tax policy, labour law,
environmental law, trade restrictions, tariffs, and political stability. Political factors
may also include goods and services which the government wants to provide or be
provided (merit goods) and those that the government does not want to be provided
(demerit goods or merit bads). Furthermore, governments have great influence on the
health, education, and infrastructure of a nation.

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Telecom industry in India has a big market potentiality and is a fast growing sector.
Government of India is eager to reconstitute this telecom industry by enacting
effective policies for more investments from foreign companies, which results in a
very competitive and deregulated market in the world.

Policies of telecom industry in India

Government of India implemented the unified access licensing regime, which
enables basic and cellular mobile service to use any modern technology. In 1997,
Telecom Regulatory Authority of India (TRAI) was formed to facilitate the growth of
the telecom sector in India.

Major services and market potentiality of Telecom industry in India

Telecommunication sector in India is primarily subdivided into two segments,
which are Fixed Service Provider (FSPs) and Cellular Services. Telecom industry in
India constitutes some essential telecom services like telephone, radio, television and
Internet. Telecom industry in India is specifically emphasizing on latest technologies
like GSM (Global System for Mobile Communications), CDMA (Code Division
Multiple Access), PMRTS (Public Mobile Radio Trunking Services), Fixed Line and
WLL (Wireless Local Loop). India has a prospering market specifically in GSM
mobile service and the number of subscribers is growing very fast.

Economic perspective of telecom industry in India

Telecom industry in India has a major role in Indian economy. The Indian
government is also enforcing some effective telecom policies and regulations for the
infrastructural growth of this industry. Indian telecom market provides a tele-density
of 8.5 percent as registered in the year 2004. A number of leading multinational
telecommunication companies are approaching and showing their interest to invest for
the telecom industry in India. Telecommunication industry of India ranked sixth
among all the telecommunication sectors in the world. In the year 2004, the total
numbers of telephone subscriptions were US$93.2.

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Tax policy

Telecom is the exchange of information between two distant points in space. The
telecom industry is very important for the socio economic development of a nation. It
is one of the main architects for accelerated growth and progress of different segments
of the economy. Post liberalization the telecommunication industry has grown by
leaps and bounds.

Liberalization
As part of the policy of liberalization, telecom equipment manufacturing was
delicensed in 1991 and value added services were accessible to the private sector in
1992.As a result a number of manufacturing units were established across the country.
The National Telecom Policy resolution of 1994 further liberalized the telecom sector
for private initiative.

National Telecom Policy 1994

In 1994,the government came up with the National Telecom Policy which set certain
important goals like availability of telephone on demand, providing International
standard infrastructure and services at affordable prices, enhancing India's
competitiveness in global market and encouraging exports, create environment
conducive for both FDI and domestic investment, accelerate India's growth as a major
manufacturer and exporter of telecom equipment and availability of telecom services
to every village.

Telecom Regulatory Authority of India (TRAI)

The opening up of the Indian telecom sector for private enterprises resulted in the
need for independent regulation. In 1997 The Telecom Regulatory Authority Of India
(TRAI) was initiated by an act of Parliament. The purpose of this act was to regulate
telecom services, fix/revise tariffs for telecom services which till then was under the
control of the central government. The objective of TRAI was to create an
environment which would enable Indian Telecomm to play an important role globally.

53
Another important objective for TRAI was to provide equal opportunity for all and
ensure fair competition. To ensure these objectives, TRAI has issued a large number
of regulations, orders and directives and strategized the plan to direct the telecom
industry from a government controlled monopoly to multi operator multi service
competitive market. In January 2000, TRAI was modified by an act resulting in
Telecommunications Dispute Settlement and Appellate Tribunal (TDSAT) to settle
disputes between a licensor and a licensee, between two or more service providers,
between a service provider and consumers and to settle appeals against any direction,
decision or order of TRAI.

National Long Distance

In 2000 the government created guidelines for the entry of private sector in National
Long Distance without restricting the number of operators. Some of the salient
features of NLD are:

• Unlimited entry for both inter circle and intra circle calls.
• Total foreign equity must not exceed 74%.Promoters must have a net worth of
Rs 25 million.
• Private operators will have to enter into an arrangement with fixed service
providers within a circle for traffic between long distance and short distance charging
centers.
• Private operators allowed to set up landing facilities that access submarine
cables and use excess bandwidth available.
• License period would be for 20 years and extendable by 10 years.

International Long Distance

• India had accepted under the GATS to open up ILD in 2004.But India allowed
competition in ILD in the year 2002 itself.
• There can be any number of service providers. The license for ILD service is
issued for a period of 20 years, with automatic extension of the license by a period of
5 years.

54
• The private applicant would have to pay a onetime non refundable fee of Rs
25 million plus a bank guarantee of Rs 250 million, which will be given back on
honoring of the commitment.
• The annual license fee is at 6% of the Adjusted Gross Revenue and the fee for
use of spectrum is to be paid separately.

Internet service Providers (ISPs)

In 1998 the private sector was given permission to be internet service providers. In the
interest of the customer, the government has set certain guidelines to grant license to
prospective service providers. Any company in India with a maximum foreign equity
of 74% is eligible for license. The segment has seen tremendous technological
advancements.

Broad band Policy 2004

Realizing the immense potential of Broadband service in the growth of economy and
the improvement in quality of life due to various functions like tele education, tele
medicine, e-governance, entertainment and in job creation, the government came up
with the Broadband policy in 2004.The main aim was to create infrastructure to
enhance the progress of broadband. Some of the technology applicable for broadband
would be Optical Fibre, Asymmetric Digital Subscriber Lines (ADSL), Cable
Network, DTH etc.

Foreign Direct Investment

• In Basic, Cellular, Paging and Value Added Service and Global Mobile
Personal Communications by Satellite, FDI of 74% is allowed subject to license
granted by Department Of Telecommunication.
• FDI up to 74% is also permitted in Radio Paging Service and Internet Service
Provider.
• FDI up to 100% is allowed for Infrastructure Providers of dark fibre,
electronic and voice mail. The condition set was that these companies would divest

55
26% of their equity in favor of Indian companies in five years, provided they were
listed in other parts of the world.
• FDI of 100% was allowed in telecom manufacturing.

The TRAI and the Service providers should have pragmatic approach about the
Telecom tariff in India. Telecom is one of the basic needs to push social and
economic development and growth in a developing country like ours. To enable this,
the basic telecom facilities need to be available, accessible and affordable to every
one across the country.

The prospect of happening this depends on the business viability of various service
providers. While govt. was the service provider, the cost of loss making rural
telephony service was cross subsidized with urban revenue. Also there use to have
a telescopic charging, means more the usage the higher was the call charge. And also,
local call charge was subsidized with higher long distance call tariff based revenue.

The basic lacuna with government run telecom was that in spite of being a highly
revenue earning and profit making industry, growth of this service sector was given
lower priority and the revenue earned was diverted elsewhere; strangling development
of the sector.

In opening out the of the industry, the new players could bring down the cost of
service because they were not bound with the social commitments in terms of loss
making rural service provision, obligatory service preference as well as various
obligatory, employment and social compulsions. As the cost came down, volume
picked up and lead the Industries to becoming more aggressive in the pricing
decisions. Moreover, India has lost out the opportunity to develop local
manufacturing capability of telecom H/W, S/W and infrastructure. The external
vendors exploited the situation by dumping obsolete equipments and technology on
one side and pushed high end products and services putting the cart before the horse.
The net effect is that the country's overall interest is left out in the middle.

Coming to the National Telecom service and the business part, it is my considered
opinion that the telephone tariff should be related to the national growth. It means that

56
there shall be a basic tariff plan for the basic telecom facility, both wired and wireless,
across the urban areas and a subsidized tariff plan in the rural area.

It shall be made mandatory for every service provider to provide service in the rural
areas also covered in their license.

Sharing of Systems and Networks by different service providers will make the rural
business viable.

To enable the industry to sustain Telecom service business and grow, the tariff plan
should be supportive for the telecom business in the urban areas as well as in the rural
areas In view of the advance in technology which will defuse discrimination between
Fixed N/W and Mobile N/W in the near future, there shall be a common Call charging
policy that can support the business to sustain and grow and also not to have much
adverse impact on the users.

Given are my suggestions based on above considerations:

There need be no discrimination in tariff and charging between fixed line N/w and
Mobile N/W as the same phone could be used as fixed or mobile in future.

There can be distinction in charging between post-paid and pre-paid service.

However, it is ideal to move towards making entire telecom service as pre-paid.

Example of Charging methods:-

1. Local calls within the region (Intra-Network) Unit Fee for Unit duration.

e.g.; Re.1 for 3 minutes. This includes Answer fee of one unit which cover the cost of
call for the first periodic duration.

In the rural areas the charge shall have 50% subsidy, partly covered with incentives
from the government out of its telecom related revenue.

2. INTER-NETWORK and long distance calls. Customers shall have freedom and
ability to choose and use any service provider’s network.

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Tariff: Per Second etc., billing could be used for these calls. The tariff shall depend on
the area to be reached i.e.; regional, national and international destinations. Also the
tariff shall be different depending on the type of service, voice, data, multi-media etc.

Same tariff shall be applicable for Fixed N/W as well as Mobile N/W.

3. CHARGING OF SMS: SMS facility shall be provided in both land lines phones as
well as in Mobile phones.

SMS Tariff shall be variable depends on the user/destination. Example:- 10 paisa per
SMS for person to person local SMS.

Free of charge SMS for utility services like emergency, Personal banking and
financial services, medical service and car parking charges etc.,

Different tariff for SMS for business purposes, like SMS to lottery, Media programs,
advertisements from and to different business units, where service charge is additional
and shared between the Telecom Service Provider and the business unit which receive
the SMS.

The overall Telecom tariff decisions shall have provision for the tariff to grow along
with national economic growth and shall reflect as a percentage of per capita income.

Economic factors:

It include economic growth, interest rates, exchange rates and the inflation rate.
These factors have major impacts on how businesses operate and make decisions. For
example, interest rates affect a firm's cost of capital and therefore to what extent a
business grows and expands. Exchange rates affect the costs of exporting goods and
the supply and price of imported goods in an economy

58
 • Growth rate

The number of telephone subscribers in India increased to 509.03 Million at the end
of September-09 from 494.07 Million in August-2009, thereby registering a growth
rate of 3.03%. With this, the overall Tele-density in India reaches 43.50. The set
target of 500 million telephones by the end of 2010 has been achieved by September
2009.

Indian Telecom (September

Statistics 2009)
Total telephone
509.03
subscriber base
Over all Tele-density 43.50%
37.3
Fixed-line user base

Wireless user base

471.73
(GSM+CDMA+WLL(F))
GSM Subscribers 344.45
CDMA Subscribers 127.24
Monthly additions
14.96
(Wire line + Wireless)
Monthly additions (Wire
-0.02
line)
Monthly additions
14.98
(Wireless)
Broadband subscribers 7.21

Subscriber numbers is in million

Total GSM subscriber base reached 344.49 million

Service Provider Subscriber Market Share (%)

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 Name (Man)
Bharti Airtel 110.51 32.08
Vodafone Essar 82.85 24.05
BSNL 53.36 15.49
IDEA 51.45 14.94
Aircel 25.73 7.47
Reliance Telecom 13.72 3.98
MTNL 4.37 1.27
BPL 2.50 0.72
All India 344.49 100

Total CDMA subscriber base reached 127.24 million

Service Provider Subscriber Market Share

Name (Man) (%)
Reliance Com 72.40 56.90
Tata Teleservices 46.80 36.78
BSNL 5.40 4.24
Sistema Shyam 1.96 1.54
HFCL Infotel 0.38 0.30
MTNL 0.31 0.24
Total 127.24 100.00

India GDP Growth Rate

India Gross Domestic Product (GDP) expanded 6.10% over the last 4 quarters.
The India Gross Domestic Product is worth 1217 billion dollars or 1.96% of the
world economy, according to the World Bank. India's diverse economy
encompasses traditional village farming, modern agriculture, handicrafts, a wide
range of modern industries, and a multitude of services. Services are the major
source of economic growth, accounting for more than half of India's output with
less than one third of its labor force. The economy has posted an average
growth rate of more than 7% in the decade since 1997, reducing poverty by
about 10 percentage points. This page includes: India GDP Growth Rate chart,
historical data, forecast and news.

60
 The communication sector will emerge as the largest contributor to India's GDP

and one of the major growth-drivers of the country's economy.

"The communication sector is predicted to emerge as the single largest sector of

India's economy, with a 15.4 per cent share, equivalent to Rs 8,65,031 crore, of GDP
by 2014-15," National Council of Applied Economic Research (NCAER) said in its
recent study 'Economic Impact of the Communication Sector in India'.

The communication sectors share of the total GDP has increased from 0.7 per cent in
the 1980s and one per cent in the 1990s to 3.6 per cent during 2001-08. In 2007-08,
the sector accounted for 5.7 per cent of GDP, the study said.

Social factors:

It includes the cultural aspects and include health consciousness, population

growth rate, age distribution, career attitudes and emphasis on safety. Trends in social
factors affect the demand for a company's products and how that company operates.
For example, an ageing population may imply a smaller and less-willing workforce
(thus increasing the cost of labor). Furthermore, companies may change various

61
management strategies to adapt to these social trends (such as recruiting older
workers).

Technological factors:

It includes ecological and environmental aspects, such as R&D activity,

automation, technology incentives and the rate of technological change. They can
determine barriers to entry, minimum efficient production level and influence
outsourcing decisions. Furthermore, technological shifts can affect costs, quality, and
lead to innovation.

Research & Development

India has proven its dominance as a technology solution provider. Efforts are being
continuously made to develop affordable technology for masses, as also
comprehensive security infrastructure for telecom network. Research is on for
the preparation of tested infrastructure for enabling interoperability in Next
Generation Network. It is expected that the telecom equipment R & D shall be
doubled by 2010 from present level of 15%. Modern technologies inductions
are being promoted. Pilot projects on the existing and emerging technologies
have been undertaken including WiMax, 3G etc. Emphasis is being given to
technologies having potential to improve rural connectivity. Also to beef up
R&D infrastructure in the telecom sector and bridge the digital divide, cellular
operators, top academic institutes and the Government of India together set up
the Telecom Centers of Excellence (COEs). The main objectives of the COEs
are as follows:

• Achieve Telecom Vision 2010 that stipulates a definite growth model and
take it beyond.
• Secure Information Infrastructure that is vital for country’s security.
• Capacity Building through Knowledge for a sustained growth.
• Support Planned Predictive Growth for stability.
• Reduce Rural Urban Digital Divide to reach out to masses.

62
 • Utilize available talent pool and create environment for innovation.
• Management of National Information Infrastructure (NII) during Disaster
• Cater the requirement of South East Asia as Regional Telecom Leader

The GSM arm of Tata Teleservices, Tata Docomo, has launched a new SMS
service, Diet SMS, on Tuesday. The customers now will be charged according to the
number of characters in a SMS they send. Each character is charges 1 paisa.

"The cost of any Diet-SMS will be only one paisa per character used, thereby
providing complete value to customers," Tata Docomo said.

Tata Docomo, which initiated the pay-per-use services in the mobile telecom
segment, has disclosed that the space between two words is not charged.

The Tata Docomo services are available in 8 circles. The company has plans to launch
its services all over India by the end of 2009.
Bharti Airtel, the Indian telecom operator with the largest subscriber base, has
announced the rolling out of its 3G mobile telephony by October 2010.

"If everything goes well on time with regard to spectrum auction, by February or
March we should receive spectrum allocation
By next Diwali (2010), we will commercially launch 3G services in India," he added.

The base price for 3G radio waves had been brought down by the central government
from Rs. 4,040 crore to Rs.3,500 crore last week.

The central government had also revealed about 90 days will be required to complete
the auctioning related to the distribution of the 3G and WiMax spectrum, from which
it expects to earn Rs.25,000 crore.
Indian telecom operator Tata Teleservices has launched a new scheme ton Tuesday
which will provide its CDMA subscribers to talk endlessly for just Re.1.

This is a break from its normal service, where the CDMA subscribers are charged on
a one minute-pulse basis. According to Tata Teleservices, the subscribers will be

63
charged Re. 1 for all the local calls and Rs. 3 for distance calls, irrespective of the call
duration.

The pay-per-call product has been launched on the prepaid platform, and subscribers
opting for it will be charged a daily fee of Re.1.

The local as well as national short messages service (SMS) will be available for the
users at Re.0.50.
Two major players of Indian telecom sector, Reliance Communications (RCom) and
Aircel, will be entering into an infrastructure-sharing agreement worth $300-million.

"The deal will offer RCom a revenue upside of over Rs.1, 500 crore. It will cover end-
to-end telecom infrastructure agreement for towers, voice carriage and bulk
bandwidth," said a person who has not disclosed his identity.

This deal will enable the sharing of infrastructure where Aircel already has launched
its services as well as in the new circles, where the services will be rolled out in
future.

This agreement will be executed by RCom via its tower subsidiary Reliance Infratel.

In a cellular system, the geographical area is divided into adjacent, non-overlapping,

hexagonal shaped cells. Each cell has its own transmitter and receiver (called base
stations) to communicate with the Mobile units in that cell; a mobile switching station
coordinates the handoff of mobile units crossing cell boundaries. Cellular systems are
based on the concept of frequency reuse: the same frequency is used by several sites
which are far enough from one another, resulting in a tremendous gain in system
capacity. The counterpart is the increased complexity, both for the network and the
mobile stations, which must be able to select a station among several possibilities, and
the infrastructure cost because of the number of different sites. The system hands over
calls from transmitter to transmitter as customers move around in their vehicles . This
new technique would allow more customers access to the system simultaneously, and
when more capacity was needed, the area served by each transmitter could be divided
again which is popularly known as CELL SPLITTING. One of the most important

64
concepts for any cellular telephone system is that of multiple access meaning that
multiple, simultaneous users can be supported through frequency reuse. In other
words, a large number of users share a common pool of radio channels and any user
can gain access to any channel (each user is not always assigned to the same channel).
A channel can be thought as merely a portion of the limited radio spectrum, which is
temporarily allocated for a specific purpose, such as someone's phone call.

Environmental factors:

It includes weather, climate, and climate change, which may especially affect
industries such as tourism, farming, and insurance. Furthermore, growing awareness
to climate change is affecting how companies operate and the products they offer--it
is both creating new markets and diminishing or destroying existing ones.

Indian telecom sector has come a long way in achieving its dream of providing
affordable and effective communication facilities to its citizens as envisaged in New
Telecom Policy (NTP) 1999

The other thrust areas include, building a modern and efficient telecommunications
infrastructure, transforming telecommunication sector to a greater competitive
environment with equal opportunities and level playing field for all players,
strengthening research and development efforts in the country, achieving efficiency
and transparency in spectrum management and enabling Indian telecom companies to
become global players. The reform measures coupled with the proactive policies of
the Department of Telecommunications have resulted in an unprecedented growth of
the telecom sector. Today, the Indian telecommunications network with over 375
million connections is third largest network on overall basis and second largest
wireless network in the world. India is also the fastest growing telecom market in the
world with an average addition close to 10 million subscribers per month. The
Department of Telecommunications has been able to provide state of the art world-
class infrastructure at globally competitive tariffs and reduce the digital divide by
extending connectivity to the unconnected areas. India has emerged as a major base
for the telecom industry worldwide.

65
3G Services and Broadband Wireless Services

In a pioneering decision, the Government decided to auction 3G & BWA

spectrum. The broad policy guidelines for 3G & BWA have already been issued and
allotment of spectrum will be done through simultaneous ascending e-auction process
by a specialized agency. The 3G is slated for auction at the end of January 09 and
BWA auction will be after the two days from the day of close of the 3G auction. New
players would also be able to bid thus leading to technology innovation, more
competition, faster roll out and ultimately greater choice for customers at competitive
tariffs. The 3G will allow telecom companies to offer additional value added services
such as high – resolution video and multi media services in addition to voice, fax and
conventional data services with high data rate transmission capabilities. BWA will
become a predominant platform for broadband roll out services. It is also an effective
tool for undertaking social initiatives of the Government such as e-education,
telemedicine, e-health and e-Governance. Providing affordable broadband, especially
to the suburban and rural communities is the next focus area of the Department.

Mobile Number Portability (MNP) Service Licence

Mobile Number Portability (MNP) allows subscribers to retain their existing

telephone number when they switch from one access service provider to another
irrespective of mobile technology or from one technology to another of the same or
any other access service provider. The Government has already announced the
guidelines for Mobile Number Portability (MNP) Service Licence in the country and
these services are likely to be available by June 2009 in four metros and thereafter
will be extended in phases to the rest of the country.

Mobile Virtual Network Operators (MVNOs)

The guidelines for Mobile Virtual Network Operators (MVNOs) to launch

operations in India are set to be unveiled soon. MVNOs offer mobile services without
owning or airwaves (spectrum) on which telecom signals travel. Their business model

66
involves buying airtime from existing operators that own telecom infrastructure and
selling it to consumers under their own brand. At present, there are 360 MVNOs
operating globally. The entry of MVNOs will increase competition in the world’s
fastest growing mobile market and will further benefit the customer by way of
reduced tariff.

Legal factors:

include discrimination law, consumer law, antitrust law, employment law, and
health and safety law. These factors can affect how a company operates, its costs, and
the demand for its products.

Telecom Services and Consumer Law

In a Recent Judgment in an appeal No.7687 of 2004 filed by the BSNL, the

Hon’ble Supreme Court of India while deciding/accepting the appeal of BSNL on 1-
1-2009, has Has decided that when there is a special remedy provided in section 7-B
of the Indiam Telegraph Act regarding disputes in respect of telephone bills, then the
remedy under the Consumer Protection Act is by implication barred. The section 7-B
of the India Telegraph Act provides for resolution of consumer disputes through
arbitration. While circulating this Judgment by the BSNL head quarters, the Branch
Offices have been directed to contest the cases on the basis of above said Judgment of
the Hon’ble Supreme Court of India.

The Consumer Forums have been given jurisdiction to adjudicate upon the
matters relating to telecom consumer disputes under the said Act of 1997. While
holding that the consumer Protection Act is a special legislation and not a general law,
Shri Sanjay Garg, President of the Consumer Forum finding the B.S.N.L. deficient in
services ordered it to pay a sum of Rs.10, 000/- to complainant Lakhbir Singh on
account of mental agony, pain and harassment suffered by him and Rs.2000/- as

67
litigation expenses and further ordered to restore the mobile connection of the
complainant without charging any extra sum.

OT ANALYSIS
A scan of the internal and external environment is an important part of the strategic
planning process. Environmental factors internal to the firm usually can be classified
as strengths (S) or weaknesses (W), and those external to the firm can be classified as
opportunities (O) or threats (T). Such an analysis of the strategic environment is
referred to as a SWOT analysis.

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The SWOT analysis provides information that is helpful in matching the firm's
resources and capabilities to the competitive environment in which it operates. As
such, it is instrumental in strategy formulation and selection. The following diagram
shows how a SWOT analysis fits into an environmental scan:

Opportunity

• Population: The population of India is really an opportunity of telecom

service providers, as the number of population without telecom service is also
very high. The industry has to target India’s huge population to grow.

• Changing Population psychograph: Population psychograph is also

changing. Previously telecom service was thought as an emergency service,
now it has become an essential part of life in our country.

• Increased Penetration Level: All the organizations of the industry are trying
to increase their penetration level, in other word to increase the tele-density of
the country. The urban Indian population gives a real growth prospect to the
industry.

• FDI: The foreign direct investment in telecom has been hiked up from 49% to
74%. This move is positive for the sector, as it requires investments of Rs 700
–900 million over the next 5 years. FDI inflow by 2004 was 9950.94 cores in
telecom. Countries like Europe, Korea, and Japan telecom are likely to enter
India, as India is seen as fastest growing telecom market in world.

Threats

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The treats to the industry are the following:
• Government Policies – Government may provide licenses to many foreign
operators, which may already have pose a threat for the existing players in the
industry.

• New Technology can change the market dynamics: A lot of new technologies
are coming. Then even have the potential of changing the entire industry
dynamics or even create substitute of the telecom services existing.

Some of the examples are follows:

 VOIP (Skype, Messenger etc.)
 Online Chat
 Email
 Satellite phones

To summarize the SWOT analysis we can draw the following framework for telecom
industry:

The Porter’s Diamond Model

The Method developed by Porter analyzes four different dynamics of a nation. The
four different determinants of the system are plotted as a diamond in Figure below:

70
Figure – Porter Diamond Model

An Analysis of the Indian Telecom industry under the porter’s Diamond model
reveals that India offers a competitive advantage for firms operating in the country.

Firm Strategy, Structure, and Rivalry:

• Intensive competition in the country has made it possible for service providers
to offer the service with lowest fare in the world profitably.

71
 • Many new handsets have been launched.

Factors Conditions:

• Presence of skilled Labour pool.

• Rapidly developing robust telecom infrastructure.
• Increasing disposable incomes of consumers.
• Increasing demand due to changing lifestyles and growing attraction for
mobiles with new features.

Related Supporting Industries:

• Competent handset manufacturer have produces the lowest priced handset

for the Indian market.
• Handset players are setting up manufacturing bases in india for better
operation management.
• Many telecom equipment & software companies are based in india.
• Various value added service providers and content developers are present in
india.

Demand Conditions:

• India has a large middle class of 300 million.

• Growing affordability and lifetime free schemes have created a market at the
bottom of the pyramid.
• Low teledensity (-18%) offers huge future potential.

72
Governments:

• The government extends full support to industry through reform processing.

• Policies are in place to safeguard the interests of service providers as well as
those of consumers.

7 p’s Service Marketing

Following are the 7 Ps of Services Marketing

1. Product/Services

2. Price

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 3. Promotion

4. Place

5. People

6. Physical Evidence

7. Process

1. Product/services

There is little difference between product and service, when a customer buys a
physical product, he can feel it, see it as it has tangible aspect whereas services have
intangible aspects, a customer can only benefit from the service only as it has

74
performed by the services provider such as operating a patient consulting a lawyer,
getting advise from tax advisor.
Vodafone, the mobile service brand of Vodafone Essar, has emerged as the “Most
Admired Mobile Service Brand Online” in India followed by Tata Indicom and Aircel
in an pan-India survey conducted by Drizzlin Media. The survey shows that Reliance
Mobile emerged as the least admired brand.

The term "DoCoMo" is usually accompanied by a barrage of wild, high-end mobile

hardware, so we have a tendency to sit up and pay attention whenever the storied
name appears on a carrier anywhere in the world. India's Tata Teleservices -- of which
NTT DoCoMo holds a 26 percent share -- is set to launch a newly-branded GSM
service as Tata DoCoMo in the southern part of the country this month, followed by a
"gradual" expansion nationwide. The logo's pretty awesome, the name's pretty
awesome -- now we just need some Japanese domestic market handsets to go along
with it and we'll be in business.

2. Price

In determining the prices of services, the one characteristic, which has great
impact is their perish ability and the fact that fluctuation in demand cannot be met
through inventory. Hotels and Airlines and telecom sectors offer lower rates during
off season and lower telephone charges for outstation calls after Peak Hours are the
example of how pricing can be used.
Price of the all companies are very affordable for the customer and it is as par
customers demand

A combination of a price war and a contentious proposal by the Telecom

Regulatory Authority of India, or Trai, sent telecom stocks reeling. By the end of the
week, shares of India’s largest telecom firm Bharti Airtel Ltd, Reliance
Communications Ltd and Idea Cellular Ltd had fallen fall by 21.4%, 22% and 15%,
respectively.

The telecom regulator had recommended that per-second billing be made

mandatory for mobile operators so users pay only by the second. Following the
adverse market reaction, Trai chairman J.S. Sarma clarified that the regulator was

75
considering making per-second billing one of the options that operators would have to
offer, and not the only option. “It’s one of the ideas that is being worked upon. It’s not
as if any decision has been taken.”

Tata Teleservices Ltd’s Tata DoCoMo was the first operator to offer per-
second billing nationally. Vodafone Essar Ltd launched a plan allowing users with a
bonus card to call people in neighbouring states but not in the same regional circle at
50 paisa per minute. Idea, too, has also highlighted a 50-paisa option as a key price
point.

Reliance was the first service provider to offer a flat rate of 50 paisa for calls
within India, national roaming and text messages across networks on a minute’s worth
of talk time.

Reliance’s stated objective is to offer a simple package to customers, but the new
offer could be a key card when number portability is launched.

3. Promotion

The fundamental difference, which must be kept in mind while designing the
promotion strategy for services, is that customer relies more on subjective impassions
rather than concrete evidence. This is because of the inherent intangible nature of
services. Secondly, the customer is likely to judge the quality of services on the actual
services. Thirdly since it is difficult to sample the services before paying for it, the
customer finds it difficult to evaluate a product.
 Pamphlets,
 Hoardings.
 Newspapers,
 magazines
4. Place

The most important decision element in the distribution strategy relates to the issue of
location of the services so as to attract the maximum number of customer such as

76
those of Doctors, teachers, consultants, machinist etc, poses distribution constraints
since they are able to serve only limited and fractional markets.
• All over India

5. People

People constitute an important dimension in the management of services in

their role both as performers of services and as customer. They must, therefore, be
well informed and provide the kinds of services that win customer approval. People as
performance of services are important because “A customer sees a company through
its employees. The employee represents the first line of contact with the customer.
The firm must recognize that each employee is a salesman for the company services”.
Daily telecom e-newsletter with telecom world information, serving you with
daily top Indian & International news right there in your mailbox. updating people in
just five minutes about the daily happenings of telecom sector. Stop searching just
open your mail box and get what you want – fresh news, daily update, share market
information, latest in technology, articles and what you request you get, all free.
Telecom India Daily reaches out to Top professionals, decision makers, technocrats,
engineers associated with leading technology vendors, communications companies,
infrastructure providers, service providers, network integrators, telecom
manufacturers and above all the upcoming professionals – students, with a regular
informative update on the latest developments in the rapidly changing interactive
media environment.

Highlights

An immense source of information and latest updates.

Keep employees up to date about the happenings in telecom.

Helping organizations to understand the on going business and improves the decision
power of people working within.

Information & data provided can be utilized to explore new areas.

77
Stage for companies to showcase their press releases.

 Sales staff, marketing staff, corporate, students etc.

6. Physical Evidence

Clearness in doctor’s clinic, exterior appearances and interior décor of

restaurant, the comfort of the seating arrangement in a cinema hall, adequate
facility for personal needs at the airport, all contribute towards the image of the
service and organization as perceived by the customer. The common elements in
these are that they all are physical, tangible and controllable aspects of a service
organization .They constitute physical evidence of the service

 Stores, logos

7. Process

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 In service organization, the system by which you receive delivery of service
constitutes the process. In fast food outlets the press comprises buying coupons at one
counter and picking up the food against that at another counter.
Services can be described on the basis of types of process used in the delivery of
the service. The three kinds of deliver process that are applicable in case of service
products are Line Operation, Job Shop Operation and Intermittent Operation. Self
service, restaurant and shop are example of line operation. When the consumer
requires a combination of services using different sequences, the job shop type of
operation is more use full. Hospital, restaurants and educational institutions usually
have these types of delivery process. Intermittent operations are use full when the
types of service is rarely repeated, Firms offering consultancy for projects use this
kind of delivery system. Advertising agencies also use intermittent delivery system
since each advertising campaign requires a unique set of input factors.

Limitation

79
Findings

80
 New entrants can take advantage of gaps in the offerings of these aging pioneers,
or find innovative ways to market their product or service.

Re-examining high levies: The Indian telecom sector is one of the highest taxed
sectors in the developing world, through levies, which comprise service tax, revenue
share, spectrum cess, and value added tax.

Bringing down operators' capex: To expand the telecom services, there will be
greater investment needs in the future. Telco’s will have to engage on active and
passive infrastructure sharing.

Rational policy for spectrum allocation: The allocation of adequate spectrum is an

urgent requirement for new and existing operators. A clear roadmap for future
spectrum allocation has to be drawn, whether it is a 2G or a 3G platform. Operators
need to be cautious in ‘bidding' and should not overpay for spectrum as that could
disturb project economics.

Data revenues to provide ‘buffer': India's data revolution is going to be fuelled by

3G and WiMAX. For the data revolution to reach villages, low-cost access devices,
vernacular content, and community initiatives such as e-governance need to be in
place.

Enhancing skill sets: The sector will require specialist resources to support and
sustain growth over the next four to five years. And pressure on talent is expected to
increase with the deployment of 3G and WiMAX services. The private sector will
need to reorient its focus on talent development through training schools and
facilitation programs that cater to the needs of the telecom industry.

Impact of global economic downturn: The current financial crisis could have a low-
to-medium impact on the telecom sector in terms of rising costs of capital and
reduction in discretionary spending on the part of customers, among other
determinants.

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 CONCLUSION

The technology improvement has helped the sector to perform better and has also
expanded the meaning of the term “telecommunication” from just audio message
transformation to virtual presence of person. The sector clearly shows a great scope
for future.

In our opinion, instead of taking a short-term view of paying capacity, the

telecom companies should focus on a long-term game. There is one word that telecom
companies are hearing a lot these days-“Volumes”. They need volumes to sustain the
network and the large employee base they have enrolled. In this regard, companies
like Reliance and Tata’s have been aggressive over the final rollout of connections to
PCO owners. Reliance is giving up to 30% commission on each call. . If and when the
carrier access codes are introduced, there could be a tough fight among these outlets,
as far as prices are concerned. Yet, prices can go down further by almost 40% of the
present structure. Part of the price cuts could be because of tax exemptions, if and
when these companies can lobby for the same. The other part could be earning
through volumes.
New players like Virgin Mobile, which already has an international presence in close
to 17 countries are entering India. It is doing so in collaboration with Tata Tele
services. The target market for Virgin Mobile is the youth, which in India is around
54% of its population. Mobile Number Portability (MNP) is to be introduced by June
2009. A neutral third-party operator is likely to be licensed to provide an end-toned
MNP solution. MNP could well be a catalyst in the realignment of subscriber market
share in favor of strong players with better service quality. There are challenges like
porting time, allocation of capital and operational porting costs among participants,
and other inter connect issues. Yet, the atmosphere around the MNP issue looks
positive and will be set once the committee submits its final report on the same.
The telecom sector is attracting significant domestic and global investment. The
capital investment made by the telecom service industry during 2006-07 was around

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$8.5 billion, out of which $550 million was foreign direct investment. The margins
and profits of almost all the telecom companies have been increasing. In fact there are
cases where significant portions of profit of international telecom companies have
been from their operations in India.
India is well prepared for the introduction of NGN (Next-Generation Networking).
Being a late starter in the telecom scenario, India has the advantage of using the latest
technology and so it is in a better position when compared to many other countries as
far as introduction of NGN is concerned. Besides, the TRAI has identified
introduction of NGN as apriority area.
As of today, the trend seems favorable toward the continued growth of the telecom
industry. The target of 500 million telephone connections by the year 2010 is very
much achievable. Even with 300 million telephone connections, the tele-density of the
country is only about 26 percent. It has been noted that mobile telephony is growing
at an annual rate of over 90 percent. Also, on an average over eight million
subscribers are being added every month. Besides the basic telephone service, there is
a huge potential for different Value Added Services (VAS). In fact, the real potential
for telecom service growth is still lying untapped.

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 BIBLIOGRAPHY

www.google.com
www.scribd.com
www.trai.gov.in
www.airtel.in
www.reliance.com
www.ideacellular.com
www.tatacommunication.com
www.vodafone.com
Google search engine.
www.wikipedia.org

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