PROJECT REPORT ON COMPETITIVE ANALYSIS IN CELLULAR INDUSTRIES BASED ON PORTERS MODEL

SUBMITED TO DAYALBAGH EDUCATIONAL INSTITIUTE, AGRA. FOR THE FULFILMENT OF THE REQUIRMENT FOR THE AWARD OF THE DEGREE OF BACHELOR OF COMMERECE HONORS (B.COM) (Hons.).

(SESSION: 2011-12)

UNDER THE GUIDANCE OF BY MISS. SURABHI CHADDA SINGH NO.09A018

SUBMITTED PRIYANKA ROLL B.Com

(Hons.) IV SEM

PREFACE

As an essential part of my B.Com (Hons.) programme at Dayalbagh Educational Institute, dayalbagh, Agra. I have made project report to understand the practical aspect of the programme by applying the theoretical knowledge gained from books in to the practical business world.

In the project report the content I found was COMPETITIVE ANALYSIS IN THE CELLULAR INDUSTRIES which imposes me to make a survey on the customers who use a cellular service and employees who work in the cellular industries to evaluating the impact of cellular services.

Cellular Industry in India Cellular Industry in India Cellular services are a part of the telecommunication sector of India. It was launched in 1999 with the adoption of New National Telecom Policy by Telecom regulatory authority of India (TRAI). Cellular services are further divided into two categories, namely GSM (Global System for Mobile Communications) and CDMA (Code Division Multiple Access).GSM segment consists of players like Airtel, Vodafone, Idea and BSNL. Whereas, CDMA segment consists of players like Reliance, Tata, etc. There are five private service operators in each area, and an incumbent state operator. Cellular companies provide two types of subscriptions pre-paid and post-paid. Almost 80% of the cellular subscriber base belongs to the pre-paid segment. The Dot has allowed cellular companies to buy rivals within the same operating circle provided their combined market share did not exceed 67 per cent. Previously, they were only allowed to buy companies outside their circle. The Market Players Some of the major cellular providers operating at national level are BSNLs Cellone, Airtel, Reliance, Tata Indicom and Hutch. Reliance and Tata Indicom operate on CDMA technology and others on GSM. Apart from these, there are regional GSM operators like Spice in Karnataka, Aircel in Tamilnadu, MTNLs Dolphin in Mumbai and Idea in North India etc.

The Introduction of Cellular On October 15, 1982 the Department of Communications (now the Department of Industry) issued Gazette Notice DGTN-006-82/DGTR-017-82, Cellular Mobile Radio Policy and Call for Licence Applications. This notice outlined the sub-allocation plan for the cellular spectrum in which: one 20 MHz block of cellular spectrum (sub-band B) was allocated to the local telephone companies in their operating areas; one 20 MHz block (sub-band A) was made available to other applicants; and two blocks of five (5) MHz of cellular spectrum were held in reserve for future use. Specifically the notice stated: Sub-Allocation - Telecommunications Common Carriers. The Department invites applications from regulated Canadian telecommunications common carriers to provide cellular mobile radio telephone services within the operating territories where they provide public switched telephone service. For this purpose, the Department will allocate two blocks of frequencies: 835-845 MHz 880-890 MHz Base Transmit Mobile Transmit

Sub-Allocation - Other Applicants. The Department will accept proposals from other applicants to provide cellular mobile radio telephone services in areas also served by regulated Canadian telecommunications common carriers. For this purpose, the Department will allocate two blocks of frequencies:

825-835 MHz 870-880 MHz Base Transmit

Mobile

Transmit

On December 14, 1983 the then Minister of the Department of Communications, Francis Fox, announced that CANTEL (now Rogers Wireless Inc.) was the successful applicant for cellular spectrum sub-band A. In the announcement the Minister also invited applications from the telephone companies to provide service in cellular spectrum sub-band B. All licensees were authorized to begin offering their cellular service on July 1, 1985. A list of all current cellular licensees is provided in Appendix A, and their service areas in Appendix B. In 1989, the two five (5) MHz of cellular spectrum that had been reserved for future use were allotted to the two cellular sub-bands and assigned to the incumbent cellular licensees. The cellular sub-bands are now as follows: Sub-band B - Telecommunications Common Carriers 835-845 MHz paired with 880-890 MHz 846.5-849 MHz paired with 891.5-894 MHz Sub-band A - Other Applicants 824-835 MHz paired with 869-880 MHz 845-846.5 MHz paired with 890-891.5 MHz For complete technical details concerning the cellular bands, refer to Standard Radio System Plan 503, Technical Requirements for Cellular Radiotelephone Systems operating in the Bands 824-849 MHz and 869-894 MHz (SRSP-503).

Airtel Bharti Airtel formerly known as Bharti Tele-Ventures Limited (BTVL) is among India's largest mobile phone and Fixed Network operators. Incorporated on July 7, 1995, Bharti Airtel Ltd is a division of Bharti Enterprises. With more than 60 million subscriptions as of 13th February 2008, it offers its mobile services under the Airtel brand and is headed by Sunil Mittal. The company also provides telephone services and Internet access over DSL in 14 circles. The company complements its mobile, broadband & telephone services with national and international long distance services. The company also has a submarine cable landing station at Chennai, which connects the submarine cable connecting Chennai and Singapore. The company provides reliable end-to-end data and enterprise services to the corporate customers by leveraging its nationwide fiber optic backbone, last mile connectivity in fixed-line and mobile circles, VSATs, ISP and international bandwidth access through the gateways and landing stations.

Airtel is the largest cellular service provider in India in terms of number of subscribers. Bharti Airtel owns the Airtel brand and provides the following services under the brand name Airtel: Mobile Services (using GSM Technology), Broadband & Telephone Services (Fixed line, Internet Connectivity (DSL) and Leased Line), Long Distance Services and Enterprise Services (Telecommunications Consulting for corporates). Leading international telecommunication companies such as Vodafone and SingTel held partial stakes in Bharti Airtel.

As of September 2005, Bharti Tele-Ventures was the only company to provide mobile services in all 23 telecom circles in India. By the end of October 2005, Bharti Tele-Ventures was serving more than 14.74 million GSM mobile subscribers and 1.10 million broadband and telephone (fixed line) customers. The equity shares of Bharti Tele-Ventures are currently listed on the National Stock Exchange of India Ltd (NSE) and the Stock Exchange, Mumbai (BSE). As of September 30, 2005, the main shareholders of Bharti Tele-Ventures were: Bharti Telecom Ltd (45.65%), a subsidiary of Bharti Enterprises; Singapore Telecom (15.69%), through its investment division Pastel Ltd; and, Warburg Pincus (5.65%), through its investment company Brentwood Investment Holdings Ltd). Other shareholders with more than a 1% stake were: Citi Group Global Markets Mauritius Pvt Ltd (2.99%); Europacific Growth Fund (2.04%); Morgan Stanley & Co International Ltd (1.93%); CLSA Merchant Bankers Ltd A/C Calyon (1.33%); Life Insurance Corporation of India (1.34%); and, The Growth Fund of America Inc (1.11%). Sunil Bharti Mittal, the founder-chairman of Bharti Enterprises (which owns Airtel), is today, the most celebrated face of the telecom sector in India. He symbolises the adage that success comes to those who dream big and then work assiduously to deliver it. Sunil Bharti Mittal began his journey manufacturing spare parts for bicycles in the late 1970s. His strong entrepreneurial instincts gave him a unique flair for sensing new business opportunities. In the early years, Bharti established itself as a supplier of basic telecom equipment. His true calling came in the mid 1990s when the government opened up the sector and allowed private players to provide telecom services. Bharti Enterprises accepted every opportunity provided by this new policy to evolve into India's largest telecommunications company and one of India's most respected brands. Airtel was launched in 1995 in Delhi. the Airtel network expanded to several parts of India, the brand came to symbolise the very essence of mobile services. Product Airtel provides a host of voice and data products and services, including high- speed GPRS services. Airtel also offers a wide array of 'postpaid' and 'prepaid' mobile offers, with a range of tariff plans that target different segments. A comprehensive range of value-added, customised services are part of the unique package from Airtel. The company's products reflect a desire to constantly innovate. Some of these are reflected in the fact that Airtel was the first to develop a 'single integrated billing system' Airtel comes to you from Bharti Airtel Limited - a part of the biggest private integrated telecom conglomerate, Bharti Enterprises. Bharti is the leading cellular service provider, with an all India footprint covering all 23 telecom circles of the country. It has over 21 million satisfied customers. Bharti Enterprises has been at the forefront of technology and has revolutionized telecommunications with its world class products and services. Established in 1976, Bharti has been a pioneering force in the telecom sector with many firsts and innovations to its credit. Bharti has many joint ventures with world leaders like Singtel (Singapore Telecom); Warburg Pincus, USA; Telia, Sweden; Asian infrastructure find, Mauritius; International Finance Corporation, USA and New York Life International, USA. Bharti provides a range of

telecom services, which include Cellular, Basic, Internet and recently introduced National Long Distance. Bharti also manufactures and exports telephone terminals and cordless phones. Apart from being the largest manufacturer of telephone instruments in India, it is also the first company to export its products to the USA. Airtel's journey to leadership began in Delhi in 1995. Since then, Airtel has established itself across India in sixteen states covering a population of over 600 million people. Airtel will soon cover the entire country through a process of acquisitions and green field projects. With a presence in over 1,400 towns, Airtel today has the largest network capacity in the country. In the last nine years Airtel has achieved many firsts and unique records: it was the first to launch nationwide roaming operations, it was the first to cross the one million and the five million customer marks. It was also the first to launch services overseas. There are other 'firsts' credited to Airtel - many of them in the area of innovative products and services. Today, Airtel innovates in almost everything that it presents to the market. An excellent example is Easy Charge - India's first paperless electronic recharging facility for prepaid customers. As evidence of its fine record, Airtel has also been conferred with numerous awards. It won the prestigious Techies Award for 'being the best cellular services provider' for four consecutive years between 1997 and 2000 - a record that is still unmatched. And in 2003, it received the Voice & Data Award for being 'India's largest cellular service provider', amongst others. As part of its continuing expansion, Airtel has invested over Rs. 1,065 billion in creating a new telecom infrastructure. In 2003/04, Bharti Tele-Ventures earned a gross profit of Rs. 16 billion on revenues of Rs. 50 billion. Corporate Structure Uploaded for www.projectsparadise.com 7 In April 2006 Bharti Global Limited was awarded a telecommunications license in Jersey in the Channel Islands by the local telecommunications regulator the JCRA. In September 2006 the Office of Utility Regulation in Guernsey awarded Guernsey Airtel with a mobile telecommunications license. In May 2007 Jersey Airtel and Guernsey Airtel announced the launch of a relationship with Vodafone for island mobile subscribers. In July 2007, Bharti Airtel signed an MoU with Nokia-Siemens for a 900 million dollar expansion of its mobile and fixed network. In August 2007, the company announced it will be launching a customized version of Google search engine that will provide an 'array of services' to its broadband customers.

4. BSNL

Bharat Sanchar Nigam Limited (known as BSNL, India Communications Corporation Limited) is a public sector communications company in India. It is the India's largest telecommunication company with 25.14% market share as on December 31, 2007. Its headquarters are at Bharat Sanchar Bhawan, Harish Chandra Mathur Lane, Janpath, New Delhi. It has the status of Miniratna - a status assigned to reputed Public Sector companies in India. BSNL is India's oldest and largest Communication Service Provider (CSP). Currently BSNL has a customer base of 68.5 million (Basic & Mobile telephony). It has footprints throughout India except for the

metropolitan cities of Mumbai and New Delhi which are managed by MTNL. As on December 31, 2007 BSNL commanded a customer base of 31.7 million Wireline, 4.1 million CDMA-WLL and 32.7 million GSM Mobile subscribers. BSNL's earnings for the Financial Year ending March 31, 2007 stood at INR 397.15b (US$ 9.67 b) with net profit of INR 78.06b (US$ 1.90 billion). Today, BSNL is India's largest Telco and one of the largest Public Sector Undertaking with estimated market value of $ 100 Billion. The company is planning an IPO with in 6 months to offload 10 % to public. Bharat Sanchar Nigam Ltd. formed in October, 2000, is World's 7th largest Telecommunications Company providing comprehensive range of telecom services in India: Wireline, CDMA mobile, GSM Mobile, Internet, Broadband, Carrier service, MPLSVPN, VSAT, VoIP services, IN Services etc. Within a span of five years it has become one of the largest public sector units in India. BSNL has installed Quality Telecom Network in the country and now focusing on improving it, expanding the network, introducing new telecom services with ICT applications in villages and wining customer's confidence. Today, it has about 47.3 million line basic telephone capacity, 4 million WLL capacity, 20.1 Million GSM Capacity, more than 37382 fixed exchanges, 18000 BTS, 287 Satellite Stations, 480196 Rkm of OFC Cable, 63730 Rkm of Microwave Network connecting 602 Districts, 7330 cities/towns and 5.5 Lakhs villages.BSNL is the only service provider, making focused efforts and planned initiatives to bridge the Rural-Urban Digital Divide ICT sector. In fact there is no telecom operator in the country to beat its reach with its wide network giving services in every nook & corner of country and operates across India except Delhi & Mumbai. The company offers vide ranging & most transparent tariff schemes designed to suite every customer.BSNL cellular service, CellOne, has more than 17.8 million cellular customers, garnering 24 percent of all mobile users as its subscribers. That means that almost every fourth mobile user in the country has a BSNL connection. In basic services, BSNL is miles ahead of its rivals, with 35.1 million Basic Phone subscribers i.e. 85 per cent share of the subscriber base and 92 percent share in revenue terms. BSNL has more than 2.5 million WLL subscribers and 2.5 million Internet Customers who access Internet through various modes viz. Dial-up, Leased Line, DIAS, Account Less Internet (CLI). BSNL has been adjudged as the NUMBER ONE ISP in the country. BSNL has set up a world class multi-gigabit, multi-protocol convergent IP infrastructure that provides convergent services like voice, data and video through the same Backbone and Broadband Access Network. At present there are 0.6 million Data One broadband customers. The company has vast experience in Planning, Installation, network integration and Maintenance of Switching & Transmission Networks and also has a world class ISO 9000 certified Telecom Training Institute. Scaling new heights of success, the present turnover of BSNL is more than Rs.351, 820 million (US $ 8 billion) with net profit to the tune of Rs.99,390 million (US $ 2.26 billion) for last financial year. The infrastructure asset on telephone alone is worth about Rs.630, 000 million (US $ 14.37 billion). The turnover, nationwide coverage, reach, comprehensive range of telecom services and the desire to excel has made BSNL the No. 1 Telecom Company of India.

BSNL 3G is just the 3G service provided by the Largest Indian telecom company BSNL within INDIA. BSNL launched their 3G services in India with the facilities of Video Call and High Speed Internet browsing with the maximum speed of 3.6 Mbps! 1. Using BSNL 3G in a 3G Enabled handset we can do Video and Voice call with other persons who also have 3G Enabled Handset with 3G Service from a telecom network. We can also connect our handset to the Desktop or Laptop computer and start using Internet with lightning speed of upto 3.6 Mbps. BSNL 3G offers many data plans with two Unlimited downloading plans. Bharat Sanchar Nigam Limited saw a drop in its revenue for the second consecutive year to post Rs 30,240 crore (Rs 302.4 billion), a drop of 14 per cent, even though it retained the number two position among telecom players. BSNL offers both fixed line and mobile services with broadband connections. With over 71.68 million subscribers, BSNL currently is the largest wireline service provider in India. The company has reported around 6 crore (600 million) 2G connections and 9, 73,378 3G connections since February 2010. All major towns and cities are covered through BSNL network. Gopal Das is the new chairman and managing director of BSNL. .

SWOT Analysis Bharti Airtel

Strengths

Bharti Airtel has more than 65 million customers (July 2008). It is the largest cellular provider in India, and also supplies broadband and telephone services - as well as many other telecommunications services to both domestic and corporate customers.

Other stakeholders in Bharti Airtel include Sony-Ericsson, Nokia - and Sing Tel, with whom they hold a strategic alliance. This means that the business has access to knowledge and technology from other parts of the telecommunications world.

The company has covered the entire Indian nation with its network. This has underpinned its large and rising customer base.

Weaknesses
An often cited original weakness is that when the business was started by Sunil Bharti Mittal over 15 years ago, the business has little knowledge and experience of how a cellular telephone system actually worked. So the start-up business had to outsource to industry experts in the field. Until recently Airtel did not own its own towers, which was a particular strength of some of its competitors such as Hutchison Essar. Towers are important if your company wishes to provide wide coverage nationally. The fact that the Airtel has not pulled off a deal with South Africa's MTN could signal the lack of any real emerging market investment opportunity for the business once the Indian market has become mature.

Opportunities

The company possesses a customized version of the Google search engine which will enhance broadband services to customers. The tie-up with Google can only enhance the Airtel brand, and also provides advertising opportunities in Indian for Google. Global telecommunications and new technology brands see Airtel as a key strategic player in the Indian market. The new iPhone will be launched in India via an Airtel distributorship. Another strategic partnership is held with BlackBerry Wireless Solutions. Despite being forced to outsource much of its technical operations in the early days, this allowed Airtel to work from its own blank sheet of paper, and to question industry approaches and practices - for example replacing the Revenue-Per-Customer model with a Revenue-Per-Minute model which is better suited to India, as the company moved into small and remote villages and towns. The company is investing in its operation in 120,000 to 160,000 small villages every year. It sees that less well-off consumers may only be able to afford a few tens of Rupees per call, and also so that the business benefits are scalable - using its 'Matchbox' strategy. Bharti Airtel is embarking on another joint venture with Vodafone Essar and Idea Cellular to create a new independent tower company called Indus Towers. This new business will control more than 60% of India's network towers. IPTV is another potential new service that could underpin the company's long-term strategy.

Threats

Airtel and Vodafone seem to be having an on/off relationship. Vodafone which owned a 5.6% stake in the Airtel business sold it back to Airtel, and instead invested in its rival

Hutchison Essar. Knowledge and technology previously available to Airtel now moves into the hands of one of its competitors. The quickly changing pace of the global telecommunications industry could tempt Airtel to go along the acquisition trail which may make it vulnerable if the world goes into recession. Perhaps this was an impact upon the decision not to proceed with talks about the potential purchase of South Africa's MTN in May 2008. This opened the door for talks between Reliance Communication's Anil Ambani and MTN, allowing a competing Inidan industrialist to invest in the new emerging African telecommunications market. Bharti Airtel could also be the target for the takeover vision of other global telecommunications players that wish to move into the Indian market.

Airtel comes to you 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 http://marketingteacher.com/swot/bharti-airtel-swot.html

Airtel SWOT Analysis - September 21st, 2010 Airtel SWOT Analysis The company analysis has outlined a scenario of the Bharti Airtel. i.e, current scenario, future perspective, business development, retention of customers, Hr policies, study of different financial reports to know and understand the stand of the company Bharti Airtel speedy activity is one of its best attributes that has made it gain an international status across the world. It is always updated with the latest data and is highly competent. Quality remains the prime concern and is maintained strictly by the team. With such achievements, Bharti Airtel is still ruling the Indian telecom Industry and is aiming high to gain popularity and success around the world in brand building by making new discoveries everyday. Based on the above, observations can be made that it promises unprecedented and efficient control over the market. From the analysis on the reports the conclusions drawn were, there was a continuous increase in the share capital, Differed tax liability, unsecured loans, Stock options. The profits are transferred into reserves in surplus

 The company has invested the funds in fixed assets. The cost of sale of goods is been reduced by company with other expenditures but the sale of goods has been reduced. The profit is been increased due to the service revenue but not by the sale of goods. Strengths Very focused on telecom. Leader in fast growing cellular segment. Pan India footprint. The only Indian operator, other than VSNL, that has an international submarine cable Weakness Price competition from BSNL and MTNL Untapped Rural Market

Opportunities Fast expanding Indian cellular market. Latest and low cost technology Huge market Threats Competition from other cellular and mobile operators