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SUMMER TRAINING REPORT SUBMITTED TOWARDS THE PARTIAL FULFILLMENT OF POST GRADUATE DEGREE IN INTERNATIONAL BUSINESS

Ascertaining the usage of Mobile Handsets and possible bundling of Applications

SUBMITTED BY: SOMIT SINGH IMBA-IB (2008-13) ENROLLMENT NO: A1806508017

INDUSRTY GUIDE Mr. Guninder Singh DGM Marketing

FACULTY GUIDE Assistant Professor Seema Sahai

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CERTIFICATE OF ORIGIN

This is to certify that Mr. Somit Singh, a student of Post Graduate Degree in IMBA-IB, Amity International Business School, and Noida has worked in Datacom Solutions Private Ltd., under the able guidance and supervision of Mr. Guninder Singh, Datacom Solutions Private Ltd. The period for which he was on training was for eight weeks, starting from 25-5-2009 to 25-7-2009. This Summer Internship report has the requisite standard for the partial fulfillment the Post Graduate Degree in International Business. To the best of our knowledge no part of this report has been reproduced from any other report and the contents are based on original research.

Signature (Faculty Guide)

Signature (Student)

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ACKNOWLEDGEMENT

I express my sincere gratitude to my industry guide Mr. Guninder Singh, Datacom Solutions Private Ltd. for his able guidance, continuous support and cooperation throughout my project, without which the present work would not have been possible.

I would also like to thank the entire team of Datacom Solutions Private Ltd., for the constant support and help in the successful completion of my project.

Also, I am thankful to my faculty guide Assistant Professor Seema Sahai of my institute, for her continued guidance and invaluable encouragement.

Signature (Student)

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TABLE OF CONTENTS

Subject Chapter-1 Executive Summary Chapter-2 Research Methodology Primary Objective(s) Research Design Sample Design Scope of the Study Limitations

Page Numbers. 6

10 10 11 11 13 14

Chapter-3 Critical Review of Literature

Chapter-4 Company Profile

34

Chapter-5 Industry Profile

37

Chapter-6 SWOT Analysis 46 49 50 50

Chapter-7 Data Collection Primary Data

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Data analysis Secondary Data

51 65 81

Chapter-8 Findings & Analysis Chapter-9 Recommendations Chapter-10 Bibliography Chapter-11 Annexure Questionnaire

88

95

97 98

Chapter-12 Case Study Case study

104

Chapter-13 Synopsis

107

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CHAPTER-1 EXECUTIVE SUMMARY

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EXECUTIVE SUMMARY

India, like many other countries of the world, have adopted a gradual approach to telecom sector reform through selective privatization and managed competition in different segments of the telecom market. To begin with, India introduced private competition in value-added services in 1992 followed by opening up of cellular and basic services for local area to private competition. The Telecom Regulatory Authority of India (TRAI) was constituted in 1997 as an independent regulator in this sector. Competition was also introduced in national long distance (NLD) and international long distance (ILD) telephony at the start of the current decade. The current policy stance affecting telecom sector in India is presented in the Appendix. Two stateowned public sector incumbents with a large existing subscriber base dominate the fixed line service. As on December 31, 2001, the two Public Sector Enterprises (PSEs), BSNL and MTNL owned 34.73 million Direct Exchange Lines (DELs) against 0.45 million privately owned DELs. These two PSEs were allowed belated entry into the cellular segment in the beginning of the present decade. Consequently, their cellular subscriber base is tiny compared to the private operators. Out of 7.3 million cellular subscribers in the country in June 2002, they had only 0.2 million subscribers. Despite asymmetry in initial market endowments between public sector incumbents and private operators, the act of opening up of the market unleashed dynamism that was hitherto latent in the sector.

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New telecom operators who have been given licenses to operate pan-India GSM mobile services are all set to fight a bitter battle with the established GSM players like Bsnl, Bharti Airtel, Vodafone and Idea Cellular. Here I m working with Datacom Solutions Private Limited which is a subsidiary of Videocon.

Datacom, as the telecom operator arm of Videocon, has received Pan India UAS licenses and plans to roll out pan India GSM services. The company has already received spectrum in many circles of the country. Datacom plans to launch its services in Tamil Nadu this year and expects to expand in other circles gradually so as to provide pan India GSM services by end of 2009. Videocon Industries, the holding company of Datacom, is a renowned brand in household consumer goods and has strong interests in Oil & Gas and Power sector. With annual revenue of around USD 3 Billion and operating profit of 10%, Videocon has established significant presence in the Indian & global markets. Videocon has one of the largest and loyal distribution bases in the country. With more than 40,000 dealers (70% in rural India), the company covers every part of the country. Videocon is a trusted manufacturing and distribution partner for 10 multinational consumer brands including Sansui, Toshiba, Hyundai, Kenstar, and Electrolux. Datacom plans to capture 10% share of Indian mobile market by the Year 2013. It expects a customer base of over 70 million within 4 years of operation. With aggressive market plans, unmatched reach & sales capabilities utilizing parent groups existing distribution network and with experienced Management Team in place, Datacom stands to outperform its own targets.

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CHAPTER-2 RESEARCH METHODOLOGY

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RESEARCH METHODOLOGY PRIMARY OBJECTIVES:-

To study the usage of mobile handsets and there features in Delhi and Gurgaon. To do a comparative of the usage of Mobile handsets and Applications by different Customers
segments.

To analyze the share for every application used by different customer segments along with
customer satisfaction survey of BSNL mobile & broadband services

Arriving at possible bundles of Applications scrutinized on the basis of Prices and Customer
Segments.

Research Design It is exploratory in nature. It includes surveys and fact finding enquires of different kinds. The data collected through these surveys is interpreted in many ways to find out the results, which are vital for framing the strategies. It is also a onetime research conducted from 9th June to 7th July.

Phase 1

Comprehensive market study and analysis has been carried out to find the major players operating in the current market.
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Phase 2

1) Questionnaire designing and development. 2) Planning of the primary research phases and activities of the project.

Phase 3

Surveying the customers and filling up of the questionnaire and then interpreting the filled questionnaire.

SCOPE OF THE STUDY The study was limited to the find the usage of Mobile handsets and Applications by different customer segments on their phones in the area of Delhi and Gurgaon. It also gives a detailed analysis of the share of Different Mobile brands in the Market and their offerings with the handset. The research was divided into two parts. In the first part the information was collected on the usage of Mobile handsets and Applications by different Customer Segments. It was also done in order to see how much people are willing to pay for a handsets built in with their features (Application) of their own choice. 1. NOKIA 2. SAMSUNG 3. SPICE 4. MOTOROLA 5. SONY ERICCSON
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Also information was collected on competitors services in providing

applications with their handsets. The competitors taken for the study are:

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In the second part the survey was undertaken for 93 customers of different segments in Delhi and Gurgaon. Modes of Data Collection Primary Data: This was collected through questionnaire survey and interviews. The questionnaire design was open ended and carried information pertaining to aspects relevant to the scope of the study. Since, the impetus of the study was towards the usage of Mobile handsets and applications by different Customers segments and thus questions related to the same were used. Sample area: Sample size: Sample technique: Sample Selection: Delhi and Gurgaon 93 respondents Random sampling The respondents were selected at random and were approached in various areas of Delhi and Gurgaon-Ambience Mall, Udyog Vihar, Sahara Mall. Delhi- North Campus, Pitampura, Rohini, Connaught Place, Delhi University, Gurmandi. Data Analysis: The collected information has been analyzed and presented in the final reports. The survey results have been tabulated and presented using bar graphs and pie charts. On the basis of the results conclusions have been drawn.

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LIMITATIONS OF THE STUDY Every attempt has been taken to obtain the error free and meaningful result but as nothing in this world is 100% perfect the belief still remains that there may be a chance for error on account of following limitations(1) (2) (3) (4) (5) Sample size may not be the true representative of the population. Respondents unwillingness to respond. Respondents inability to formulate a response. Respondents unavailability. Time pressure and fatigue on the part of respondents and interviewer.

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CHAPTER-3 CRITICAL REVIEW OF LITERETURE

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CRITICAL REVIEW OF LITERATURE INDIAN TELECOM INDUSTRY India is the 7th largest country in the world and the second largest in Asia with a landmass of 3.29 million square Km, and a population of over 900 million. The second largest populous country, India is the home of 16 per cent of world's population and accounts for 2.42 per cent of the total world area. One of the most striking features of the Indian economy is the sheer size of the consumer market. Private consumption expenditure grew at 13 per cent per annum (at current prices) through the 1980s and was estimated at Rs. 3,418 billion (US $ 110 billion) in 1990-91. The overall growth of 13 per cent is composed of widely differing growth rates in the various sectors. Expenditure on transport and communication is increasing by as high as 21 per cent per annum. This reflects a perceptible shift in consumer spending from primary products to manufactured goods and services, which are also borne out by the increasing share of manufactured goods and services in the country's GDP. The spectacular increase in consumer spending has been accompanied by increasing sophistication. Some Facts about the Indian Telecom Market India has 1000 million people & 180 million households 40 million fixed line telephones, 10 million mobile and four million Internet connections Target for Growth: 200 million lines by 2010 Major public confidence as cost of long distance calls in India reduces from Rs 30 ($0.60) to Rs 1.50 ($0.18) per minute International Call charges reduce by 40% VoIP opened up for International calls

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Telecommunications Network India operates one of the largest telecom networks in Asia comprising over 21,718 telephone exchanges, 14.62 million telephone lines, an extensive local and long distance transmission network with 132,022 route kms of terrestrial microwave radio relay, coaxial cables and about 36,632 Km of optical fibre systems. The voice and non-voice telecom services include data transmission, facsimile, mobile radio, radio paging and leased line services to cater to a variety of needs, both residential and business. A dedicated packet switched Public Data Network with international access for Computer Communication services is also available. Tenders have been invited for operation of Radio Paging Services. 95 licenses have been issued for operation of services in 27 cities. Services have commenced in all the 27 cities with over 186,000 subscribers. Rest of the country has been divided in 19 circles and licenses are to be issued. The country has been divided into 18 telecom circles and 4 metro cities for operation of Cellular Mobile Service. Despite the sustained high growth of telecom services in the last five years, the telephone to population ratio in India has reached 22 per hundred people. India's telecoms sector is carved into 22 circles or zones, classified as "metro" and "A", "B" and "C" circles, based on subscriber potential, market curativeness and the state of already present infrastructure. Cellular subscriber base has been growing at a massive pace for the past three years. In 1999, the announcement of the New Telecom Policy and the migration package from fixed license fee to annual revenue share regime gave a boost to the mobile sector. The International Telecommunication Union feels India has the potential to become No 1 in terms of the number of mobile phone users, considering the number of people currently without mobile phones in the country. Currently, China has the highest number of mobile phone subscribers. Michael Minges, head, Telecommunications Data and Statistics Unit, ITU Telecommunication Bureau, said: "India has the least mobile connectivity with only 10.1 million subscribers as compared with China. India is the largest unnerved market and therefore there is huge potential." According to the ITU report, in the last 10 years the telecommunication environment in the Asia-Pacific region has changed rapidly. The rate of change has been the most dramatic in the mobile communication sector.
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History The British government introduced telecommunications services in India in 1851 near Calcutta by as a means of providing defense, law and order, general administration, and revenue collection. Since that time, telecommunications has played a critical role in shaping Indias march toward progress, and the importance it holds for the future of India cannot be overstated. Telecommunications in India were introduced only 5 years after Alexander Graham Bell invented telephones in 1881; British firms introduced POTS (plain old telephone services) into the colony. By the time India was independent in 1947, the country had 321 switching centers (telephone exchanges) in urban areas and a tele-density of 0.25 phones per thousand people. During the stateled planned economic policies till the mid 1980s, the government controlled all aspects of the telecommunications sector through the ministry of Posts and Telegraph as a natural monopoly. After the Public Accounts Committee of the LokSabha recommended a complete overhaul of telecommunications, which was working in a most unsatisfactory manner in 1985, a long sought re-organization was undertaken in 1986 to split the public postal and telecom operations into separate departments. Until 1985 India's telecom sector was a typical PTT model. The Ministry of Posts and Telegraphs and its department controlled the posts and telecom services and infrastructure. The sector was mainly governed by the Indian Telegraph Act of 1885. In 1985 postal services were separated from telecom, and the Ministry of Communications and its Department of Telecommunications (DOT) were assigned powers including manufacturing equipment, policymaking, providing services and creating infrastructure. The government did not give priority to the development of this sector. The national five-year Plans show that until 1985, the government's investment in the telecom sector was less than three per cent; it was only from 1992 onwards that government spending increased to 11.9 per cent and more. It was only in the early eighties, with technological advancements and international developments that the government took initiatives to move from the closed- economy ideology towards more market-oriented reforms. The information technology policy focused on the

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export of software and computers. To achieve this goal, tariffs were lowered on imported goods and direct access to imported equipment and technologies was allowed. However, in the case of telecommunications, the government's approach was half- hearted. The government was reluctant to break the dominance of DOT or let go of its own powers. In 1984, overcoming resistance from DOT, the government was successful in allowing private investment in the manufacture of customer premise equipment. The government franchised public call offices and also set up two new companies. Maha nagar Telephone Nigam Limited (MTNL), a mostly government owned company which offered basic services in Delhi and Bombay, and Videsh Sanchar Nigam Limited (VSNL), which offered international long-distance services. Although these initiatives proved to be positive, they could not bridge the overwhelming demand for infrastructure and services. Advancement of technologies, international agencies such as the World Bank and trade blocks (OECD), drew attention of the Indian government to the urgent need to develop the telecom sector, as a means of overall economic development. The government responded by constituting independent telecom reconstruction committees (for instance, Artherya committee) for taking advice. Telecom Growth in India Telecommunication is one of the prime support services needed for rapid growth and modernization of various sectors of the economy. Although the sector has grown rapidly in recent years, its growth needs to be accelerated further. It is equally important to accelerate structural changes in this sector in line with trends in other countries to ensure that the telecommunication services are not only made available on the scale needed to sustain rapid growth in the economy as a whole but also that the quality and cost of these services come up to the requirements of a modernizing economy. Telecommunications is a prime support service needed for rapid growth and modernization. It is also one of the fastest growing sectors in India and has immense potential for growth. "The telecommunication activity is commercial in nature and people are willing to pay for
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it. Of all infrastructure sectors, it is perhaps the best suited for private sector participation which would help to create a competitive environment and improve the quality of services to consumers. Deregulation and competition are key elements in telecommunications reforms all over the world and will be a guiding principle to the evolution of policy in this sector in coming ears. Private investment is expected to play a major role supplementing the efforts of the public sector in expanding capacity and also providing competition within the system. In the area of value-added services, the private sector would continue to play a dominant role. The quantum of investment by the private operators would basically be determined by the rate of return on such investments - both basic as well as value-added services. Necessary steps would be taken to streamline policy so as to remove the various bottlenecks to ensure effective participation and adequate investment by the private sector. The telecom sector has witnessed some fundamental structural and institutional reforms in the past decade. Telecom equipment manufacturing was completely deregulated in 1991. Value added services (including cellular services) were thrown open to private sector participation in 1992. Basic services were opened to private participation in 1994 by dividing the country into 21 Telecom Circles and allowing one private operator per Circle to compete with DOT. An independent Telecom Regulatory Authority of India was set up in 1997. A new Policy for Internet Service Providers (ISPs) was announced in 1998 allowing independent service providers to enter the sector ending the earlier monopoly of VSNL. Reorganization of DOT separating policy making function and service provision and corporatization of DOT's operational network are two major institutional reforms which need to be implemented. Telecommunications has emerged as an important driving force in a modern economy. Considering its vital importance, the Government adopted the National Telecom Policy Declaration in 1994. The Government has placed great emphasis on the rapid growth of this sector by introducing major reforms. The telecom network in India today is not small in absolute terms. With over 12 million
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lines, it is the 14th largest in the world. Yet it suffers from an abysmally low penetration of 1.3 per 100 populations when the world average is over 10. More than 2.1 million consumers are in queue waiting for a telephone line. Paradoxically, India may be fortunate to have such low teledensity. Unlike many advanced countries it does not suffer from large sunk investments in technologies which today are fast becoming obsolete. It has the opportunity to leapfrog technologies and provide its people the benefits that are increasingly feasible from the incredible and continuing change that the telecommunications industry is going through worldwide. India's vast size, the large number of spread out settlements and its large unserved population provides a huge potential for the expansion of telecommunication services. This opportunity must be seized. For this, the need of the hour is to

Raise substantially the penetration ratio in order to provide access to dependable voice communication means with at least national Subscriber Trunk Dialing (STD) connectivity to a much larger cross-section of the population.

Satisfy the more demanding audio, video and data communication needs of the business community in all major business districts in the country, and Make provision for easy up-gradation of the network to meet future communication needs. All this would need a rapid expansion and up gradation of the existing network. If the

telecom network in India is able to grow at even the current annual growth rate of 20 percent for the next five years, it would rank among the six largest networks in the world. This in absolute terms would mean an addition of 30 million more basic telephone lines - a number which is expected to be second only to China. India has also expressed its first commitment to make large investments in value-added services by opening up this sector. All this would place India among the leading countries in terms of equipment purchase. This highlights the importance that India would command in the global telecom business in the near future - a fact which should be used for strategic leveraging. Concerted efforts need to be made to attract foreign companies to set up
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mal1ufacturing bases in India for supporting domestic as well as export sales. Substantial investments will be required to ensure that India acquires the status of a global player in telecom. This .cannot be achieved through governmental efforts or through a monopoly state-owned operator alone. The Government of India has realised as much and initiated the process of progressive deregulation of the telecom sector. Apart from opening up the basic as well as value-added market- segment of telecom services to the private sector, the government has taken major initiatives in offering a level playing field to operators by promulgating an ordinance constituting the Telecom Regulatory Authority of India (TRAI). The Ministry of Communications is also examining restructuring of the Department of Telecommunications (DOT) into two separate bodies, one dealing with policy planning and the other in charge of service operations: However, a great deal needs to be done, especially in terms of the implementation strategy to that the country can enjoy the benefits of the reforms. The telecommunications sector has undergone a total transformation throughout the world over the last two decades. Technological advances have revolutionized the quality and range of services available. Moreover, developments in the sphere of information technology, satellitebased television broadcasting, new forms of communication such as data communication through e-mail and associated services through the Internet, are all blurring the definition of what constitutes telephone services, and transforming the way people communicate and conduct business. Clearly, a country's ability to benefit from this revolution depends heavily on the modernity of its telecommunications network. Countries that can acquire and access information on demand and then integrate them usefully into their industrial structure through a modern telecommunications network are most likely to experience high rates of growth. Large-scale use of information and telecommunications technologies directly influences productivity, cost effectiveness and competitiveness in industries with high levels of product differentiation and low levels of unit prices.
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An advanced telecommunications system is equally important for service industries like banking, trading, retailing, transportation, maintenance and insurance where information and realtime communication are vital to the production process. A reduction in the costs of these services will indirectly enhance international competitiveness within the entire economic system, since lower marketing costs mean lower costs for manufacturing firms exposed to international trade. The extraordinary efficiency of financial markets of Hong Kong and Singapore is more and more based on the expensive use of such advanced telecommunications services. Thus, improved communication is vital for productivity in all spheres of activity in agriculture, industry, trade and commerce. In addition, with the increasing movement of people within and outside the country, easy communication is essential for enhancing human welfare so that families, friends and acquaintances can overcome the barriers of distance. For a developing economy like India, it is thus important that policies and Programmes be initiated, and resources committed to bring about rapid growth in the sector. Teledensity in some developed and developing countries of the world is given in Table 1.1.

TABLE 1.1 TELEDENSITY IN SOME DEVELOPED AND DEVELOPING COUNTRIES OF THE WORLD Country Australia Bangaldesh Brazil China Teledensity 126.18 1.56 42.38 42.32

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India* Indonesia Nepal Pakistan Sri Lanka UK USA

10.38 9.17 1.70 4.42 9.57 143.13 116.43

Source: Government of India, Economic Survey, 2007-08, Telecom Regulatory Authority of India (Quarterly Report).

Contrarily, India is fortunate to have such low teledensity. It has the opportunity to leapfrog technologies and provide its citizens the benefits that are increasingly feasible from the incredible and continuing change that the telecommunications industry is going through worldwide. The opportunity must be seized. This is in line with Frankel's, observation years ago, "As an industry grows and adapts to changing and increasingly complex production methods, interconnections more or less rigid, develop among its components - machines, plants, transport networks and raw material supplies - that make increasingly difficult the introduction into the system of new cost-saving changes. As a result, costs are higher and labour productivity lower than it would be in a less mature industry. The old industry finds itself penalized for having taken the lead and shown the way to its young competitors in other regions". Advanced telecommunications, thus seems to offer a developing country the perfect opportunity to leapfrog in order to benefit from this situation. Substantial investments would be required in the sector for India to acquire the status of a
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global player in telecom. This cannot be achieved through governmental efforts or through a monopoly state-owned operator alone. The Government of India has initiated the process of progressive deregulation of the sector. Though some landmark policy initiatives have already' been taken or are underway, a lot more needs to be done especially in terms of implementation strategy so that the country can enjoy the benefits of the reforms. In order to explore the ways and means of how best the funds can be raised to sustain this ongoing reforms process, it is first necessary to review 'the present functioning of the sector and the policy guidelines adopted by the Government regarding deregulation.

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INDIAN TELECOM: HISTORICAL ASPECTS In operation since 1851, Indian telecommunications is among the oldest such systems in the world. The first Submarine Telegraph Cable from U.K. landed in Bombay in 1870, heralding the era of external telecommunications in India. The Eastern Telegraph Co. (ETC) of 1872 and the Indian Radio Telegraph Co. (IRT) of 1927 merged to form the Indian Radio and Cable Communications Co. (IRCC) in 1932. The H.F. Radio telegraph made its appearance on the scene in 1927, followed by Radio telephony in 1933. Consequent to India's Independence in 1947, there were phenomenal developments in her communication system and technology. The Government of India took over the IRCC, giving birth to the Overseas Communications Service (OCS), a Government Department. The satellite era dawned iri 1970. India also had, by 1982, wideband submarine telephone cable system and Troposcatter system in the external telecommunications network. Telephone services in the country were originally operated by private companies which were taken over by the Government of India in 1943. Since then, telecommunications in India has been a public utility owned by the Central Government with its operation and maintenance regulated by the Indian Telegraph Act of 1885 (ITA) and the Wireless Telegraphy Act of 1933. At the time of Independence, the government took charge of a network that connected only 82,000 subscribers in 321 exchanges. In the ensuing centralized planning process, resources allocation for the telecom sector was low and priority was given to sectors such as roads, power, sanitation, education, heath etc. Till 1985, resource deployment in the sector was only around 2 to 3 percent of the total budget allocation. With no access to any other sources of funds, this permitted very moderate growth of the sector.

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SECTORAL REFORMS SINCE 1985 At the beginning of the Seventh Five Year Plan in 1985, I1e then government decided to focus on improving this sector a1d constituted the Telecommunications Board and the Department of Telecommunications (DOT) within the Ministry of Communications to oversee operations, maintenance and development of telecom services (telecom was so long under lie purview of the Posts and Telegraph Department within the Ministry of Communications). A new emphasis was also laid on 8e funding of the telecom sector. Whereas the plan budget of the Department of Telecom was still regulated by the central planning process and the Ministry of Finance, it was agreed in principle that additional resource mobilization through market borrowing will be permitted in respect of the telecom sector. With this in view, MTNL, the telecom operating company for the cities of Delhi and Mumbai was created in 1986. It was decided that MTNL be authorized to raise funds as a frontal agency for the DOT. The growth of the telecom sector underwent a qualitative change after resource mobilization was allowed through MTNL. To promote rapid development in all aspects of the sector including production services, technology and finance, the Telecommunications Board was replaced by the Telecom Commission in 1989. This was followed by other growth-oriented sectoral reforms. In basic services including, cellular mobile, paging and value added service, and global mobile personnel communications by satellite, FDI is limited to 74 percent subject to grant of license from the Department of Telecommunications (DOT) and adherence by the companies (who are investing and the companies in which investment is being made) to the license condition for foreign equity cap and lock-in-period for transfer and addition of equity and other license provisions. FDI up to 100 percent is allowed for the following activities in the telecom sector. 1. ISPs not providing gateways (both for satellite and submarine cables);

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2. 3. 4.

Infrastructure providers providing dark fibre (IP category); Electronic Mail; and Voice Mail Up to 100 percent FDI in telecom manufacturing activities on automatic approval basis is

also allowed. India's vast size, the large number of spread out settlements and its large unserved population provide a huge potential for the expansion of telecommunications services. It is pertinent to mention here that availability of adequate, efficient and affordable infrastructural facilities constitutes the core of development strategy and efforts. The demand for infrastructural services has increased rapidly after industrial liberalization of the Indian economy. Unfortunately, infrastructural bottlenecks remain the biggest stumbling block of industrial progress in the country. By their very nature, infrastructure projects involve huge initial investments, long gestation periods and high risks.

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REFORMS IN NUTSHELL SINCE 1991


Telecom equipment manufacturing was completely deregulated in 1991. Value added services, including cellular phone services, were thrown open to private sector The National Telecom Policy (NTP) allowing private sector participation in basic services An independent regulatory authority called, Telecom Regulatory Authority of India A new policy for Internet Service Providers (ISPs) was announced in 1998, opening the

in 1992.

was announced in 1994.

(TRAI), was set up in 1997.

area to private sector providers. The policy was promotional in nature. ISPs have been allowed to set up International Internet Gateways both satellite and landing stations for Submarine Cable systems.

A new policy called New Telecom Policy (NTP), 1999 was announced replacing the 1994 Migration from the regime of fixed license fee to a new regime d revenue share was The regulatory mechanism has been further strengthened through the TRAI (Amendment)

policy.

permitted in August, 1999.

Act, 2000. The Act provides b establishment of a separate dispute settlement mechanism called Telecom Dispute Settlement and Appellate Tribunal.

National long Distance Service was opened for competition in August, 2000. Corporatization of Department of telecommunication's operational network in to a public Videsh Sanchar Nigam Ltd. (VSNL) and HTL limited have been disinvested. The Communication Convergence Bill 2001 was introduced in Lok Sabha and has been Fourth Cellular Operator, one each in 4 metros and thirteen circles have been permitted. Unrestricted entry in basic services allowed along with use of wireless in local loop (WLL)

company called Bharat Sanchar Nigam Ltd. from 1st October, 2000.

referred to the Standing Committee of Parliament Committee of Parliament.


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access technology.

Two categories of infrastructure Providers have been allowed to provide end to end International Long Distance (ILD) Services have been opened for competition since 1st Internet Telephony has also been opened up since 1st April, 2002. Guidelines for universal service obligation announced on March 27, 2002.

bandwidth and dark fiber, right of way, towers, duct space etc.

April, 2002.

GSM History:History In 1982, the European Conference of Postal and Telecommunications Administrations (CEPT) created the Groupe Special Mobile (GSM) to develop a standard for a mobile telephone system that could be used across Europe. In 1987, a memorandum of understanding was signed by 13 countries to develop a common cellular telephone system across Europe. Finally the system created by SINTEF lead by Torleiv Maseng was selected. In 1989, GSM responsibility was transferred to the European Telecommunications Standards Institute (ETSI) and phase I of the GSM specifications were published in 1990. The first GSM network was launched in 1991 by Radiolinja in Finland with joint technical infrastructure maintenance from Ericsson. By the end of 1993, over a million subscribers were using GSM phone networks being operated by 70 carriers across 48 countries GSM (Global System for Mobile communications: originally from Groupe Spcial Mobile) is the most popular standard for mobile phones in the world. Its promoter, the GSM Association, estimates that 80% of the global mobile market uses the standard. GSM is used by over 3 billion people across more than 212 countries and territories. Its ubiquity makes international roaming very common between mobile phone operators, enabling subscribers to use their phones in many
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parts of the world. GSM differs from its predecessors in that both signaling and speech channels are digital, and thus is considered a second generation (2G) mobile phone system. This has also meant that data communication was easy to build into the system.

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GSM Mobile Segment GSM subscriber base grew 3.63% mom to 44.92mn in June 2005. Reliance witnessed a growth of 11 % mom taking its subscriber base to 1.36mn. MTNL added 74,938 subscribers in June 2005 growing by 7.22% in June. Sharti, SSNL, Aircel and IDEA also recorded a mom growth of over 3.5%. Sharti maintained its leadership position with 27.3% of the market share, and contributed 28% to the total GSM additions for the month. Bharti witnessed the highest subscriber base addition ever of 4,51,374 in the month of June 2005. MARKET SHARE OF MOBILE SERVICE PROVIDERS IN INDIA (in per cent) MTNL Spice Tata HFCL Bharti BSNL Hutch IDEA Reliance Shyam BPL Aircel Source: COAI,
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Future of Vas services in India

The future of telecom industry not only lies in Voice , now the extra earnings in the future will be done through value added services such as Bollywood Updates, Cricket Updates, News Updates, Stock Alerts etc. Below is graph and a pie that shows the probable growth with the help of Value Added Services.

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Leading VAS players in India profiled during project

The Value Added services in todays scenario are adding towards the growth of the overall telecom industry. It has changed the mobile handset image from a talking device to a device through which you can gather news, share knowledge, Listen to Music etc.
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CHAPTER-4 COMPANY PROFILE

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DATACOM SOLUTIONS The Videocon Industries promoted cellular firm with a panIndia license to start operations in 22 circles.

Videocon is also planning to rope in a global service provider as the partner at an appropriate time, the company said in a statement in New Delhi. "The company plans to use its extensive all India dealer network of over 10,000 to reach out to the customers and expects to have 10 million subscribers (on conservative basis) in 3-4 years of launch," it said. Videocon's subsidiary Datacom has received Letter of Intent from the Department of Telecom for starting GSM-based mobile services on a pan-India basis. Datacom has deposited the Rs 1,507 crore as license fees alongwith bank guarantee of Rs 847 crore to the DoT. With an aim to improve efficiency and profitability of the business model, the company also plans to introduce various innovative services, the statement added. Videocon said a number of local and global banks and financial institutions have expressed interest in providing fund, non-fund and service based support to the project. The company has paid the required fees of Rs 1658 crore and bank guarantees of Rs 882 crore. Internally, Datacom Solutions has the following Departments 1 Marketing & Branding 2 Sales 3 IT 4 Billing 5 CSD 6 VAS I worked for the Marketing & Branding department In Datacom Solutions. Board Of Directors

Mr. Venugopal N Dhoot Mr. Pradeepkumar N Dhoot Mr. K C Srivastava Mr. Kuldeep Kumar Drabu Mr. Satyapal Talwar

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Mr. S Padmanabhan Maj. Gen. S C N Jatar Mr. Arun L Bongirwar Mr. Didier Trutt (Nominee - Thomson S.A) Mr. Johan G Fant (Nominee - AB Electrolux (Publ) ) Mr. B Ravindranath (Nominee - IDBI Limited) Mr. Ajay Saraf (Nominee - ICICI Bank Limited)

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CHAPTETR-5 INDUSTRY PROFILE

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Industry Profile

The Indian telecom sector can be broadly classified into Fixed Line Telephonyand mobile telephony. The major players of the telecom sector are experiencing a fierce competition in both the segments. The major players like BSNL, MTNL, VSNL in the fixed line and Airtel, Hutch, Idea, Tata, Reliance in the mobile segment are coming up with new tariffs and discount schemes to gain the competitive advantage. The Public Players and the Private Players share the fixed line and the mobile segments. Currently the Public Players have more than 60% of the market share.

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

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

The leading cellular service providers have the following number of subscribers: Service Provider Reliance Tata Airtel MTNL BSNL Hutch Idea Spice BPL Aircel No. of CDMA Subscribers 2.75 crores 1.07 crores 3.37 crores 24.98 lakhs 2.44 crores 2.44 crores 1.3 crores 25.56 lakhs 10.62 lakhs 48 lakhs No. of GSM Subscribers 38.76 lakhs

Bharti Airtel has the largest customer base with 31% market share, followed by Hutch and BSNL with each holding 22% market share. The 2007 budget has brought further relief to the customers with the reduction in the tariffs, both local and long distance, and with slashing down the roaming rentals. This is likely to lead to even more people going for cellular services and more and more use of the value added services. However, landline telephony is likely to remain popular, too, in the foreseeable future. MTNL, the
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largest landline service provider, has recently taken some bold initiatives to retain its market share and, if possible, expand it.
The Indian Telecom services industry accounts for around 1.5 per cent of GDP and had revenues amounting to an estimated USD 11.7 billion during FY2001. Indias 28 million fixed lines telephone network is among the top ten networks in the world and the second largest among the emerging economies after China. The telecommunication market is growing at an average annual rate of 20 per cent per annum, with cellular growing at 70 per cent. The total number of telephone lines added in the last five years is 1.5 times that of the preceding five decades. Telecommunication sector, has attracted FDI to the tune of USD 923 million between1993 - 2000. Tele-density, which is defined as the number of telephone connections per 100 persons, is used as a measureof the reach of telecom services. India has a low tele-density of around 3.3 (including mobile phones), with a goal for attaining telephone on demand by 2002 and a tele-density of 7 by 2005 and 15 by 2010. Tele-density in rural areas is 0.5 per 100 persons and the government plans to increase this to 4 per 100 by 2010. A total of 376,886 out of 607,491 villages have been provided with Village Public Telephone (VPT)*, i.e. one telephone per village. Tele-access, i.e. number of persons with access to a telephone within (say) a kilometer is a much better indicator that tele-density in India. Considering Indias population of over 1 billion, it is estimated that for achieving these objectives, around 75 million telephone connections will be required by the year 2005 and 175 million telephone connections by the year 2010. At current prices, this translates to an additional investment of USD 37 billion by 2005. Telecom services in India have been divided into four segments - Basic (fixed line), National Long Distance (NLD), International Subscribers Dialing (ISD) and Cellular Mobile services. Basic, NLD and ISD services, up until the 1990s were provided by the state owned enterprise, Department of Telecommunications (DOT) (now corporatised as Bharat Sanchar Nigam Limited (BSNL)), together with Mahanagar Telephone Nigam Limited (MTNL) in Delhi and Mumbai. This sector was open to private participation in 1994. The ISD sector is monopolized by the Videsh Sanchar Nigam Limited (VSNL), which is 53 per cent state-owned. The government plans to divest 25 per cent of its stake and open this segment for private participation, by April 2002. Mobile services, which commenced in 1996, are dominated by private players, with over 22 private companies providing cellular services. MTNL also has entered into provision of mobile services in Delhi and Mumbai, while BSNL will soon enter into mobile services in other cities (except Delhi and Mumbai). Besides the service provision industry, India has a large and rapidly growing telecom equipment manufacturing sector. The main producers of telecom equipment in India are HCFL, Sterlite and Global Telesystems besides foreign manufacturers like Fujitsu, Siemens, Alcatel, AT&T, Motorola and Ericsson. The value of equipment production increased to INR 107.6 billion in FY2000 from INR 100 billion in FY2001. Telecom equipment exports have also showed an increase from INR 29.6 billion to INR 37.5 billion.This report is however, mainly focussed on the telecom services sector.

Table 1: FDI inflows and Trade in Indian Telecom Sector (figures in INR Million)

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Milestones and Future Directions in Telecom Reforms 1984 Manufacturing of subscriber terminal equipment opened to private sector. 1985 Telecom was constituted into a separate department (DOT), with a separate board. 1986 MTNL and VSNL created as corporations. 1988 Government introduces in-dialing scheme. PABX services only within a building, or in adjoining buildings. 1989 Telecom Commission formed. 1991 Telecom equipment manufacturing opened to private sector. Major international players like Alcatel, AT&T,Ericsson, Fujitsu, and Siemens entered equipment manufacturing market. 1992 Value Added Services (VAS) sector opened for private competition. 1993 Private networks allowed in industrial areas. 1994 Licenses for radio paging (27 cities) issued. May-94 New Telecom Policy announced. Sep-94 Broad guidelines for private operator entry into basic services announced. Nov-94 Licenses for cellular mobiles for four metros issued. Dec-94 Tenders floated for bids in cellular mobile services in 19 circles, excluding the four metros, on a duopoly basis. Jan-95 Tenders floated for second operator in basic services on a circle basis. Jul-95 Cellular tender bid opened. Aug-95 Basic service tender bid opened; the bids caused lot of controversy. A majority of bids were considered low. Dec-95 Letter of Intent (LOIs) issued to some operators for cellular mobile operations in circles. Jan-96 Rebidding takes place for basic services in 13 circles. Poor response. The Telecom Regulatory Authority of India (TRAI) formed by ordinance. Oct-96 LOIs being issued for basic services. Mar-97 The TRAI Act passed in Parliament. Jun-98 Several VAS available through private operators. The first private basic service becomes
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operational. Mar-99 Announcement of National Telecom Policy. Jan-00 Amendment to the TRAI Act. Aug-00 Announcement of Domestic Long Distance Competition Policy. Oct-00 Corporatization of DoT. Apr-01 Permission to basic operators to provide services within a short distance charging area Apr Dec 2001 Issue of LoIs for new basic service licenses , Issue of LoIs for domestic long distance service licenses ; Issue of LoIs for new cellular service licenses ; Determination of the new interconnection regime for basic and long distance operators ; Parliament's approval to the Communications Convergence Bill 2002-2005 Disinvestment of VSNL ; Introduction of competition in international voice telephony Disinvestment of MTNL ; Introduction of internet telephony Source : India Infrastructure Report 2001, ABN AMRO

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NATIONAL LONG DISTANCE (NLD) SERVICES According to TRAI, NLD represents telecom services within the country but outside the local area of an exchange system. This sector was liberalized in 2000 and the DoT has since awarded preliminary approval (LoIs) to Reliance Infocom and Bharti Telesonic. MTNL plans to enter the long-distance telephone business along with Railtel, a subsidiary of the Indian Railways and a third partner. VSNL too has showed interest in entering this segment of the market in anticipation of a definite end to its monopoly over ISD services by April 2002. Guidelines for entry in this sector, issued by TRAI, restrict entry to those, with a minimum paid-up capital at INR 2.5 billion and combined net worth of INR 25 billion. The guidelines also require that, NLD operators with national license to carry inter-circle traffic, enter into agreements with respective FSPs, for carrying intra-circle traffic. This can restrict the NLD market to inter-circle market for a pure long-distance player. According to TRAI estimates, the NLD market size, in FY99, was 26 billion minutes, with revenues of INR 124 billion (including revenue from the domestic carriage of ISD which is estimated at INR 21 billion). Intercircle calls accounted for 25 per cent of the 26 billion minutes traffic and 54 per cent of the INR 124 billion revenue in FY99. Thus, the addressable market for NLD operators is roughly 50 per cent of the total long distance market. Tariff Rebalancing TRAI had announced a three-stage tariff rebalancing, starting from May 1999, in order to remove the cross subsidization of basic services from long distance revenue. The second round of tariff adjustments was done in October 2000 (NLD rates were slashed by 13 per cent). BSNL and MTNL have, on their own, reduced their tariffs for distances up to 200 km in January 2001. As per the schedule drawn up by TRAI, the third stage rebalancing of tariffs is expected by March 2002. This would help in increasing the voice traffic. BSNL, has announced that it will be providing relatively cheaper long distance calls on the basis of packet switching. With new service providers entering the long distance market, and the availability of frontier technologies, which will reduce the costs of long distance transmission, there will be a downward thrust on tariffs for this service. These lower tariffs will benefit subscribers, while putting downward pressure in the near term on the revenues for BSNL. DOT estimates revenue from NLD services for FY2002 at INR 151 billion, and expectsrevenue to go up to INR 239 billion by FY2005.
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FUTURE ISSUES Telecom is a dynamically changing sector due to changing technology, evolving convergence with media and declining costs. The growth potential in Asia is phenomenal with China soon to become the biggest cellular market in the world. TRAI expects the Indian subscriber base to touch 150 million by 2010. This is because of the current low 3.3 per cent penetration rate leaves scope for a high growth rate in the near future. The demand for basic telephony services is likely to benefit from the surge in demand for Internet access. Select Internet Service Providers (ISPs) are also providing digital subscriber line (DSL) (the market leader is Dishnet DSL), which are capable of handling both voice and data traffic at a faster rate than the conventional dial-up services. This will also help in increasing subscriber density. Voice-over-internet telephony, currently in pilot stage only will also enable low cost long distance services. Growth in subscriber base in the cellular segment is expected to rise significantly with the entry of MTNL and BSNL as third operators in each of the circles. Both, airtime charges and monthly rentals have fallen across the circles with the entry of MTNL in Mumbai and Delhi. This will lead to lower margins and possible mergers and acquisitions in the industry. MTNL and VSNL have signed a memorandum of understanding (MoU) to jointly tap opportunities in India and abroad. MTNL's recent tie-up with WorldTel to provide basic telephony services in Bangladesh is a typical example. Meanwhile, VSNL has been making substantial investments in satellites and submarine cable projects in the international markets.The reduction in customs duty on specified categories of telecom infrastructure and terminal equipment is expected to have a negative impact on equipment manufacturers, due to the lower import costs of such equipment. However, providers of turnkey installation services are expected to benefit due to the lower costs of equipment imports. The reduction of surcharge on corporate tax, from 13 per cent to 2 per cent and the expected decline in interest rates, is expected to have a positive impact on the industry. Another issue is Convergence. Convergence is the ability of both traditional and new communication services whether voice, data, video sound or pictures to be provided over many different networks. NTP 99,recognised the convergence of IT, media, telecom and consumer electronics. First step towards convergence has been initiated by the GOI. It recently introduced a new bill in the Indian parliament - the Communication Convergence Bill, 2001.The bill takes into account rapid technological developments and the convergence of services and will repeal and replace five laws and cover the entire communications sector (including broadcasting, telecommunications and multimedia). It is designed to accommodate and encourage the combination of technologies and services. The bill also proposes to set up Communications Commission of India (CCI), a new autonomous corporate body that will replace the TRAI and the TDSAT. CCI will have far greater powers than the TRAI -- including licensing and regulatory powers. Allowing convergence can lead to alliances or mergers between dominant media and communications companies and may allow them to jointly maintain their dominance in both industries, and thus create a single, multi-product monopolist.

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CHAPTER-6 SWOT ANALYSIS

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CHAPTER-7 DATA COLLECTION PRIMARY DATA SECONDARY DATA

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Primary Data Sample Size: 93 Respondents Sample Location: Delhi and Gurgaon

Findings: The different Customer segments are mentioned in the above pie

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Findings: In the survey of the customers it was found that 66% customers were male users while 34% were female users.

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Medium of Consumption for Daily Entertainment Activities

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How much you would pay for such a service on a daily/monthly and weekly basis? We can see that for the automatic download of content/applications People are ready to pay between the range of : Student Rs1-Rs5 the most. It is seen that the update is done Weekly. Workers Rs2-Rs50 the most. It is seen that the update is done Weekly. Middle Executives and Small Business Owners Rs1-Rs5 the most. It is seen that the update is done Weekly. Medium Business Owners and Senior Executives
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Rs 5 the most. It is seen that the update is done Monthly. First Jobber Rs1-Rs5 the most. It is seen that the update is done Weekly. Working Women People are not ready to pay. It is seen that the update is done Monthly.

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IsDual S Useful? im
Is Dual Sim Useful? 62

Will you Buy this Dual S Phone? im


Will you Buy this Dual Sim Phone? 62

33

33

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Is it Useful(Yes)

Is it Useful(No)

Wiil you Buy This Wiil you Buy This Daul Sim Phone(Yes)Daul Sim Phone(No)

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SECONDARY DATA
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The information about the telecom industry was collected from the report of telecom regulatory Authority of India (TRAI) The information about the future of Vas was collected from a report By Stanford University Professor on the topic Future of Mobile Vas in India. As my project talks about the usage of Mobile handsets and Possible bundling of Applications there was some data which I collected to know about various applications which were as follows:

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Digital bundles in demand Digital consumers want not only single tracks, but bundled content as well. Digital album sales grew by over 40 per cent globally in the first half of 2007 and accounted for 15 per cent of the digital markets value. In the US, digital albums now account for 10 per cent of total album sales and five per cent in the UK. Exclusivity and added value in the form of bonus material bundled with digital albums are helping drive consumer demand for premium product. Premium albums outsell the basic versions in most cases. Mobile music has enormous growth potential. The most popular mobile music format remains mastertones short excerpts from an original sound recording that play when a phone rings but in 2007 there was notable pickup in sales of full track downloads to mobile, with sales accounting
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for 12 per cent of all digital sales in the first half, compared to 6 per cent in the same period in 2006. This marks an ongoing shift in consumer demand from mobile personalisation features, such as mastertones and images of favourite artists, to core music consumption over the mobile phone. Mobile music continues to face obstacles however, and in the first half of 2007 grew at a slower rate internationally than online downloads. Limited marketing, prohibitive data charges and a lack of consumer-friendly offerings are partly to blame, as is the low penetration of advanced handsets and 3G, slowing growth in the master tone sector in some market Nokias entry into the music download market is part of a strategic move to develop a strong standalone services business. A study from Nokia has shown that the youth market for mobile phones in India has grown annually by 300 per cent in the last few years, with music accounting for 40 per cent of mobile phone companies revenues in the country. There are now 50 million households in India with an internet connection and 75 per cent of these are expected to have broadband by 2010, with music a major driver In Asia, ringback tones continue to dominate the digital music market of many countries, creating a new form of music consumption. Indonesia is the third biggest market in the world for ringback tones, behind the US and Japan Portable digital music devices have revolutionised the way consumers listen to music. The explosion in sales of portable music devices continued in 2007 with new players coming on to the market. Although the iPod is today the leading portable music player, many other brands, from Microsofts Zune to Nokias and Sony Ericssons music phones, are established as well. Nokia sold almost 220 million music-capable mobile phones globally in the first three quarters of 2007 nearly twice the total number of iPods (120 million) sold up to the third quarter of 2007. There is growing convergence between the mobile phone and the portable player. A new breed of devices launched in the end of 2007 the iPod Touch, iPhone and the new Zune player, with wi-fi functionality allowing internet browsing and music downloading on the go are blurring the boundaries between online and mobile consumption. The expansion of wi-fi technology, coupled with 3G, is beginning to allow a much broader music experience. In October 2007, Starbucks and Apple announced a partnership that allowed users of the iPhone and iPod Touch to download songs playing in Starbucks shops directly to their portable devices via wi-fi.

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Apple hopes to sell 10 million iPhones in 2008. Sony Ericsson has announced plans for a broader music store, offering five million songs, a move that closely follows entrances from both Nokia and Vodafones Music Store (powered by Omnifone) in the U

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Mobile Megatrends From mega-portals to me-portals. Content is aging; Content communication is king. The internet is reaching into the phone. The war of the application environments. Value in mobile software is bubbling up. OEMs go for services and vertical propositions. Brand as the new form of equity in handsets. Network operator strategies are shifting. Browsing is out; engaging experiences are in. Browser proxies bring the internet to the masses. Open source is disrupting the status quo. Nokia is now a tier-0OEM. Mobile is transforming to a FMCG business. Channel ARPU: a new source of revenue.

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From mega-portals to me-portals. From all-in-one mega-portals (e.g AOL), to vertical portals (vortals, e.g. music, sports, healthcare), to personalised my-portals (e.g. iGoogle), to user-centric me-portals (e.g. Facebook)

Content is aging; Content communication is king The sale value of content is decreasing and DRM walls are falling % of subs buying a ringtone fell consistently over 12 months in GB, FR, DE, IT, ES (M:Metrics, 4Q07) see also Amazon mp3, Y! Music, Virgin Digital, Nokia Comes With Music (subscribe, but own) Content communication, personalisation and remixing is attracting capital 10s of photo sharing sites: Facebook, MySpace, Picnik, Picasa, flickr, flauntr, thebroth, snipshot, ClickFriends,
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Faces, Photoshop Express online, Shozu, Mosh, Pix-Yu MoJungle, PixPulse, PixSense, SharpCast, SnapFish, rmbr, Kodak gallery, Shutterfly, Photobucket, Webshots, Smugmug, Fotki, Dotphoto, Phanfare, Splashup, Vi.sualize.us, Pixrat, FFFFound, PicURLs, Zoomorama up to 25% of the entertainment being consumed in five years will be what we call 'Circular.. people will have a genuine desire not only to create and share their own content, but also to remix it, mash it up and pass it on within their peer groups. Mark Selby, VP Multimedia, Nokia. The Internet is reaching into the phone 2001+: the phone reached out to the internet through WAP and web. But the phone was only open to the short head of 10s of 2nd parties (OEM partners) and 100s of 3rd parties with strong funding. 2007+: the internet is reaching into the phone.. The long tail of 1,000s to 1,000,000s of 3rd party developers and scripters are reaching out to the phone thanks to availability of AJAX, Widget platforms and Web runtimes e.g. Nokia Web RunTime, Nokia S60 browser, Motorola WebUI, Nokia WidSets, Opera Widgets, Bling Software, Webwag. 2009+: the phone becomes an active node of the internet Consuming and producing services, e.g. Nokia S60 web server, efforts by Conveneer The war of the application exec. environments 2002+: the war of the operating systems has faded - Symbian OS shipments are dominated by Nokia (outside Japan) and DoCoMo (in Japan) - Windows Mobile is for enterprise segments only (at least up to version 6). - The new Palm OS is still slideware and one year away. Will it follow the fate of Cobalt ? - Most mobile Linux operating systems are in alpha stage (Celunite, ALP, A la Mobile, OpenMoko), not shrink-wrapped (Greensuite), or not backed by a big services firm (Purple Labs). 2007+: the war of the application exec. environments (AEEs) is raging - Flash Lite vs Java; Adobes aggressive subsidy vs Suns JCP standardisation process. - Java SE vs Java ME; Androids Dalvik, and Suns strategy to phase out Java ME
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- web programming vs open OS; AJAX, Widgets and web runtimes vs open OS platforms (S60, WM) - interpreted languages vs C++; AppForge, Python, Ruby, .NET (Red Five Labs) vs S60 Value in mobile software is bubbling up Mobile software carries high risk & reward and long lead times If you are a software vendor in the OpenOS or RTOS business, you need - $2M - $30M seed capital - 2 years technology development - OEM sales cycle of 6-12 months - operator sales cycle of 18-36 months - 18+ months for royalties to kick in - but biz model requires scale - scaling to new regions, OEMs and operators is non-linear - a lot of factors outside control to do with handset sales The mobile software business is like the Hollywood business; you re either big or youre out. The sale value line (line of commoditisation) is moving up the stack .. accelerated by open source collaborative software development efforts (e.g. Web Kit) - Googles Android will further accelerate this commoditisation effect - Value will bubble up to UI and service delivery layers. - Software vendors without unique IPR are not viable

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OEMs go for services and vertical propositions in order to increase ailing profit margins. OEM acquisitions 2006-7: - Nokia acquired Avvenu (file sharing), Navteq (LBS), EnPocket (mobile advertising), Twango (media sharing), Pixto (physical world connection), Loudeye (digital music), gate5 AG (LBS) and Intellisync (mobile device management). - Motorola invested in Tilefile (content sharing) and acquired Leapstone (SDP), Modulus Video (video codec), Tut Systems (content distribution), Broadbus (content on demand) and Good Technologies (email sync).
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Own OEM services: - Nokia (Ovi, Maps, Mosh, Medeo, Comes with Music, Internet Radio, Download!), Motorola Screen 3, SEMC (TrackID, PlayNow) Vertical propositions: - Sony Ericsson Walkman & Cybershot, Nokia E-Series, N-Series. Brands as the new form of equity in handsets "The mobile-wireless environment is going to create a whole new set of brands: brands around devices, brands around the experiences, and also brands around the way people are connecting and researching on the Internet. You'll see new brands around this mobile world, hopefully some from Motorola, because we are thinking about creating distinct brand experiences underneath the parent brand Motorola in the mobile space in the future." OEMs have been creating co-branded handsets since 2004: - Sony Ericsson: Walkman, Cybershot - Nokia: E-series, N-series, location-aware devices, Zac Posen, Versace, Aston Martin, WESC - LG: Prada, Shine, Chocolate, SD410 sports - Samsung: Armani, B&O Serene, B&O Serenata, credit-card sized phones - Motorola: D&G, Pininfarina, Aston Martin, Vivienne Westwood, Red Operator own-brand devices are making a comeback: - Vodafone tried with 4 Simply handsets since 2005, but scaled down due to retailing challenges - Huawei, ZTE and Sharp devices are still going strong, as are partnerships with Ferrari - Vodafone hinted that own-brand devices might make up 10-20% of portfolio (May 2007) - Lots more to come in 2008. Network operator strategies are shifting Operator one-stop-shops and walled gardens are not viable. Operators are moving to - traffic pipes, or multi-network connection services, e.g. TMO, Telenor or wholesalers, e.g. KPN) - service-pipes enabler strategies focusing on device-based service delivery (e.g. Vodafone, Three, DoCoMo)
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T1 operators are now at third era of service-delivery: container projects container projects leverage on economies of scale for development & deployment and aim to control the relationship with service delivery suppliers. Browsing is out; engaging experiences are in Mobile operators, handset OEMs and media brands are deploying ondevice portals as the evolution of web/WAP. e.g. Orange Downloads, Vodafone ODP, Nokia Content Discoverer, Nokia Download!, Three ODP, Refresh Mobile ODPs surpass web/WAP in terms of - reduced click-distance to purchase, therefore increased revenue - preview before buying - faster startup time & less resource-hungry - better device integration - graphical richness & improved user interaction, - low latency (background content fetching & intelligent caching) - lower bandwidth costs. Service delivery spills out of the browser, into the user journey i.e, into: - siloed applications (e.g. ODPs, music and mobile TV applications) Action Engine, Adobe FlashCast, Airmedia, Cibenix, Communology, Crisp Wireless, Geniem, Handmark, Mobile Scope, Itfinity, mPortal, Mobinex, Nellymoser, Nokia Download!, Nokia WidSets, Opera, uiOne, RefreshMobile, Streamezzo, SurfKitchen, U-Turn, weComm, Yahoo! Go, uActive. - active idle screen (AIS) applications Abaxia, Acuity Mobile, Aditon, Adobe Flash Home, Bling Software, Celltick, Cibenix, IntroMobile, MobiComp, Mobile Posse, Qualcomm uiOne, SurfKitchen Surftop, Nuance T9 Tool, Zi Qix. - web, widget and AJAX runtimes e.g. Nokia Web RunTime, Nokia WidSets, Opera Widgets, Bling Software, Webwag, Openwave MIDAS - UI Frameworks: end-to-end platforms for designing core applications
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e.g. Acrodea, Digital Airways Kaleido, TAT Cascades, Mentor Graphics Inflexion, uiOne HDK, Flash UI

Browser proxies bring the internet to the masses Proxies optimise web content delivery for increased addressable market, lower latency, lower traffic and higher speed. - Speed proxies: image compression, efficient page contents caching, HTTP & content pipelining. e.g. Bytemobile, NSN, Flash Networks (NettGain), Venturi VServer, Novarra - Transcoding proxies: page reformatting, image reduction, menu simplification, session tracking, SSL session handling, XHTML/MP adaptation e.g. InfoGin IMP, Google Wireless Transcoder (ex Req Wireless), Novarra nweb, Volantis Transcoder, WiderWeb, Greenlight Wireless Skweezer, Clicksheet - Pre-rendering proxies: pre-renders page before sending and improves navigation. e.g. Opera Mini, Bitstream ThunderHawk

Nokia is now a tier-0 OEM The only OEM left with cash-flow for heavy investments .. with an unbeatable cost + supply chain mgmt (300 million components per day) .. and who is strong at both the high-end and low-end of the market
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Mobile is transforming to a FMCG business Making phones has tiny margins and no consumer value. As in the fast moving consumer goods (FMCG) business, value is in: a) defining the right niche segment & proposition, b) last mile customisation, retailing and placement, c) in-life experience; delivering compelling services across the user journey

Channel ARPU: a new source of revenue Beyond voice and data ARPU, there is a new source of revenue revenue from delivering 3rd party services/products through the last mile to the end user. Channel ARPU comes from: - UI inventory leasing through auctioning of handset UI inventory to advertisers and promoters
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- Retail sub leasing leasing of shelf space to OEMs and service providers, e.g. visual service retailing - Service delivery channels e.g. Vodafone, Telefonica, TIM revenue share with Nokias Ovi - Bundling e.g. Amazon Kindle + newspaper subs or Nokia Download! bundling of service providers. - Access to consumers e.g. iPhone subscription revenue share, Blyk ad-funded MVNO - User analytics leasing e.g. info on user location, billing, call graphs, presence, service usage Channel ARPU is about growing wallet share based on collaboration Contrary to voice and data ARPU which are about growing wallet size based on customer ownership

CHAPTER-8 FINDINGS & ANALYSIS


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Analysis is done segment wise in order to have a better understanding of the usage of different customers segments:

Student

This customer segment is one of the most Tech savvy in terms of the latest applications amongst all the segments. The content applications can be easily fit into their lives as they are the ones who are into using of apps which are being introduced by the mobile companies these days. This segment is looking for the advanced features in a mobile phone which not only includes a new look but a better technology in terms of camera resolution , Voice Quality, Sound clarity and some apps related to chatting should be there in a mobile handset because for them keeping in touch with friends and Family is very important. The segment is Price sensitive The segment is very interested in Dual Sim concept. If Videocon comes up with A Quality handset at an affordable price the segment is ready to accept it.

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Workers This segments is one of the most unaware of what is the Word application. The daily usage is basically of Voice, Sms Listening on radio On Mobile so Mostly if one thinks of making a mobile handset for this segment , one needs to focus upon: Price factor Radio External Memory Good Voice Clarity Durability Headset So, There is less scope of mapping content/applications into the segments life. Middle Executive and Small Business Owners

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As we have seen from the above graphs the segment is more into Listening music, reading News, Playing Games and surfing the net and last but not the least communication with friends and family does matter . So if as a company Videocon is to launch a handset it needs to focus on durability, battery backup, Organizer stuff and introduction of Applications somewhat related to Music, news, Games etc. They are also looking forward towards Good voice clarity
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New Advanced Features Price Factor

Medium Business Owners and Senior Executives

This segment is basically looking for Advanced features in a mobile Phone at affordable Prices but when it comes to Apps they are not Aware about most of them.

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First Jobber This customer segment is one of the most Tech savvy in terms of the latest applications amongst all the segments. The content applications can be easily fit into their lives as they are the ones who are into using of apps which are being introduced by the mobile companies these days. This segment is looking for the advanced features in a mobile phone which not only includes a new look but a better technology in terms of camera resolution , Voice Quality, Sound clarity and some apps related to chatting should be there in a mobile handset because for them keeping in touch with friends and Family is very important. The segment is Price sensitive The segment is very interested in Dual Sim concept. If Videocon comes up with A Quality handset at an affordable price the segment is ready to accept it.

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Working Women

This segment is basically looking for simple color phones with basic necessities like durability, Battery Backup and Music And Video Support. They are not interested in applications

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CHAPTER-9 RECOMMENDATIONS

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Recommendations are given as per the question asked by the customer/Respondent after his opinion about each aspect the report is covering in order to arrive at a possible outcome.

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Question No 1 Regarding the daily routine, I observed that People spend most of their time in: Listening Music Communicating with Friends and Family Reading Newspaper Internet Surfing Working at the office , or some other workplace

So, As a mobile Company Videocon should Focus on making a phone which has good Music App Support that involves good Sound Clarity, Navigational Music Keys etc. For the communication with friends and family part we can introduce a Facebook App. Regarding the news it can think from 2 ways either Building a News App which can give them regular news through Gprs or by making some schemes related to availability of News Updates at a affordable Price The company should Focus on providing fast speed for Internet Browsing Question No 2 Moving on to the Daily Usage of Mobile As People use more and more of Voice SMs Music App Camera Focus on good voice Clarity

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Longer Talk time and Standby period of the Cell Phone Building something innovative regarding the Sms section can help to attract the customer. For e.g.: Providing Sms environments during the Sms chat between two persons . Suggestion regarding the Music App support is same as given above. The company can also look in providing high resolution for the camera with latest technology of flash as it has got a major amount of Usage.

Question No 3 The only way of mapping the content and application into the daily entertainment of the customer is through the medium of consumption of their entertainment. Areas of mapping the content and application are as follows 1 Listening to Music: As learned above mostly the consumption is done through Mobile and Radio. So, we can provide with handsets that can have a music app support as well as Radio support. 2 Watching Movies: As learned above that people are keen in Watching Movies . So, we can provide the customer with new movies updates rather than he, the customer looking for it in the newspaper. 3 Communicating with Friends and Family: For this particular area, We can provide pre-burnt application for chats like NIMBUZZ, Facebook, Gtalk etc. 4 News : For this area we can opt between News app or Daily/weekly/Monthly News updates. 5 Horoscope: For this area, We can provide with a pre- Burnt app or Daily/weekly/Monthly Horoscope Updates.
Applications should be user friendly and less complicated .

Question No 4 As we see that GPRS usage is 33 out of 61, We can look for tarrifing of the rates so that more and more people can start using Gprs because most of the applications are going to work with GPRS support.

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Focus should be on strengthening of the basic features in a mobile handset like Voice, Sms , Camera Resolution , Music App support, Video App support, Organizer, Bluetooth connectivity, Gaming etc. This statement is backed by what we have found during the survey that what features people generally use on their Mobile Phone.

Question No 5 Applications Present on the customers Handset and the level of Usage As, observed the application are their in the Phone but their usage is nil in most of the cases . The less usage of Application is due to factors like: Ignorance of how to use it as it is not user friendly. Price factor Ignorance of the presence of application in their handset.

So, Before the launch of the handset the company should make the consumer aware about the applications they are launching , providing a separate manual for the usage of the Application. If this recommendation is taken into consideration people will be able to use the application more rather than not being aware of it completely. Question No 6 Content/Application Customer would like to have on their Phone Main focus in terms of Content should be on Music But While focusing on the student segment care should be taken that apart from Music , Video and Wallpaper also play a minor role in the updating of content on the Mobile Handsets. Question No 7 How Much Price Customer is Willing to pay on Daily/monthly/ weekly basis?

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As, Customer is Price sensitive for the Payment of the content to be updated on their mobile handsets, we have to keep prices as low as possible in order to lure the customer in order to avail or service for its daily/weekly/monthly consumption of the content. Question No 8 Features that customers are demanding for designing their own Phone are as follows Features in Popular Demand: Bluetooth Handset Camera With Flash Music App Video App Business App Calculator Mobile Tracker Radio Without Wire Durability Long Battery Backup Graphic App Bluetooth External and Internal Memory Question No 9 As observed People are ready to accept the new image of Videocon as a mobile industry but only on certain conditions such as: Price Advanced Features Advanced Features Customer Is looking For: Folder Lock Anti Virus App Thumbprint Recognition GPS Print Option Banking Application Dictionary

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Good Quality Assurance Review of the launched handsets is Good.

Question No 10 The Price Range for the handsets people have designed lies almost in the same range as in for Dual Sim Handsets which is as follows: 500-2,000 2,000-4,000 4,000-6,000 6,000-8,000 8,000-10,000 Factory Workers are basically lying in the range of 500-2,000 For most of the target audience Dual Sim is Useful and people are ready to buy it.

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CHAPTER-10 BIBLIOGRAPHY

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BIBLIOGRAPHY

Marketing Management, Dr. C.B. Gupta.. www.coai.com www.videoconworld.com www.visionmobile.com www.rapidsoftsystems.com www.mymobile.com www.nokia.co.in www.scribd.com www.google.com www.elliottyoung.co.uk Ajit.Ranade@ap.abnamro.com

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CHAPTER-11 ANNEXURE

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ANNEXURE
QUESTIONAIRE Name:.. Profession/ Occupation:- .. Age:.. Place of residence: Mobile handset: Vehicle: Yes No.Type:..

1). Could you tell us about your daily routine?(Morning, Afternoon and Evening) Working at the office, or some other workplace Watching TV Listen to music Reading Newspaper Hang around with friends Playing some Sport Travelling Around the city Internet Surfing Doing Household chores

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2). What do you do on your mobile phone while commuting to and from work and during breaks? .............................................................................. ..............................................

3). What activities form your daily entertainment/ leisure routine. How do you consume/access/ perform these activities, and update yourself regularly Listening to music Watching Movies Playing Games Reading Books Surfing the net Communicating with Your Friends n Family Stocks News(Bollywwod,Pol itics, Government Decisions) New movie Sports Horoscope New services launched by the service provider Weather Top 10 Songs Others Mobile Mobile Mobile Mobile Laptop/PCs Mobile Mobile Mobile Mobile Mobile Mobile Mobile Mobile Mobile Internet Internet Laptops/PC s Laptops/PC s Mobile Meeting them some place Internet Internet Internet Internet Internet Internet Internet Internet Radio Theatres Internet Internet Social Networkin g sites Newspaper Newspaper Newspaper Newspaper Newspaper Newspaper Newspaper Newspaper Mp3 player/IPod s TV Gaming station Physical Book

Television Through Friends Television Television Television Television Television Television

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4). What do you use your mobile phone for?(Probe for GPRS) Gprs Voice SMS Listening to music Watching videos Gaming Watching videos Internet browsing GPS- Navigation and maps Storing Content(images,videos,files(doc,xls,ppt),contacts) Using mail Taking Photographs Taking Videos Messaging/Chat Recording Voice Tracker ID Transfer of files with the help of Bluetooth, Infrared Composing a song Amity International Business School IMBA-IB(2008-2013) A1806508017

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Calculation(Addition, Subtraction, Multiply, Divide) Planning an Itenary Keep a reminder for upcoming Birthdays Use as wake up Alarm For making Notes Used as a Timer Used as a Stopwatch Others . . 5). You said u have ---- phone, and you use it for (as per previous question). What all applications do you have on your mobile phone (Probe for GPRS usage/ apps etc.)? Do you use them? Why/ Why not? Which are your favorite apps? Any critical ones? Gprs Games GPS Navigation & Maps Push Mail Messaging/ Chat WAP Music app Video app Business Apps: Mail,calender, planner News & Amity International Business School IMBA-IB(2008-2013) A1806508017

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information/ Alerts Others 6) If you had a choice, what select content/applications would u like to have on your mobile phone? How much would you pay for such a service (probe on individual content) on a monthly/ weekly/ daily basis?

Content

Update(weekly/daily/mon Price(Willing to thly) Pay)

7). If you were given a choice to design your own mobile phone, what features, content and applications would you choose to have on it? Sms Color Music App Support Video App Support Business App(Reminder,Calender,Planner ) Headset Bluetooth Headset Camera , Camera with flash Games Stopwatch Timer Calculator GPS-Navigation & Maps News(Politics,Bollywood,Stocks, Amity International Business School IMBA-IB(2008-2013) A1806508017

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Sports) App Support Folder Lock Mobile Tracking Device Push Mail Sound Recorder Dictionary Call Recorder Radio without wire Wi-Fi Mobile WAP Ms office App PDF App Anti Virus App Touch Screen With Stylus With Stylus Slider Phone Rugged Phone-Durable Long Battery Backup Graphic App Inbuilt MMC External MMC FM Recorder Torch Light Others . 8) How much would you pay for such a phone? 9) If this phone is made by Videocon, Will you purchase it? Why/ Why not? .. 10) What if the phone is Dual SIM (explain Dual SIM), Check on: i) Will you find it useful Why/Why not? Amity International Business School IMBA-IB(2008-2013) A1806508017

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ii) Would you buy this Dual SIM Phone? Why/ Why Not ........................................................................................................... .................................................................................................................. ............................................................................................. iii) How much you would pay for this phone? ...................................................................................................... .................................................................................................................. ..........................................................................................

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CHAPTER-12 CASE STUDY

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CASE STUDY
Mission and objectives of Datacom
Datacom is a new telecom arm of Videocon which is focusing on providing Quality Services and plans to capture 10% share of Indian mobile market by the Year 2013. It expects a customer base of over 70 million within 4 years of operation. With aggressive market plans, unmatched reach & sales capabilities utilizing parent groups existing distribution network and with experienced Management Team in place, Datacom stands to outperform its own targets.

Datacom strategic objectives:

Creating a good market share in the telecom industry and thereby generating some revenue in India Innovate and deliver on our customers total communication needs Deliver strong growth in emerging markets of India. Align capital structure and shareholder returns policy to strategy

Key issues and problems


The key issues and problems would be how Datacom can grab the main target markets both in the Selling of Mobile Phone and As well as Mobile services Another key issue is what will be the pricing strategy Datacom follows and features to be launched in the market. Another key issue is how it deals with tarrifing of various plans in Postpaid and Prepaid.

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The major problem is will it be able to match with the new identity of Videocon That is Experience Change

CHAPTER-13
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SYNOPSIS

Industry Mentor

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Picture

Datacom Solutions Private Limited

SYNOPSIS ON Ascertaining the usage of Mobile handsets and Possible Bundling of Application

Students Name: Somit Singh Industry Guide: Mr. Guninder Singh Faculty Guide: Assistant Professor Seema Sahai

OBJECTIVES:Amity International Business School IMBA-IB(2008-2013) A1806508017 Page 109

To study the usage of mobile handsets and there features in Delhi and Gurgaon. To do a comparative of the usage of Mobile handsets and Applications by different Customers
segments.

To analyze the share for every application used by different customer segments along with
customer satisfaction survey of BSNL mobile & broadband services

Arriving at possible bundles of Applications scrutinized on the basis of Prices and Customer
Segments.

Creating a good market share in the telecom industry and thereby generating some revenue in India Innovate and deliver on our customers total communication needs Deliver strong growth in emerging markets
Align capital structure and shareholder returns policy to strategy

Datacom is a new telecom arm of Videocon which is focusing on providing Quality Services and plans to capture 10% share of Indian mobile market by the Year 2013

Findings & Analysis :


This customer segment student is one of the most Tech savvy in terms of the latest applications amongst all the segments.

The content applications can be easily fit into their lives as they are the ones who are into using of apps which are being introduced by the mobile companies these days. This segment is looking for the advanced features in a mobile phone which not only includes a new look but a better technology in terms of camera resolution , Voice Quality, Sound clarity and some apps related to chatting should be there in a mobile handset because for them keeping in touch with friends and Family is very important. The segment is Price sensitive The segment is very interested in Dual Sim concept.
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If Videocon comes up with A Quality handset at an affordable price the segment is ready to accept it. This Worker segments is one of the most unaware of what is the Word application. The daily usage is basically of Voice, Sms Listening on radio On Mobile so Mostly if one thinks of making a mobile handset for this segment , one needs to focus upon: Price factor Radio External Memory Good Voice Clarity Durability Headset So, There is less scope of mapping content/applications into the segments life.
As we have seen from the above graphs the Middle Executives and Small Business Owners segment is more into Listening music, reading News, Playing Games and surfing the net and last but not the least communication with friends and family does matter .

So if as a company Videocon is to launch a handset it needs to focus on durability, battery backup, Organizer stuff and introduction of Applications somewhat related to Music, news, Games etc. They are also looking forward towards Good voice clarity New Advanced Features Price Factor This Medium Business Owners and Senior Executive segment is basically looking for Advanced features in a mobile Phone at affordable Prices but when it comes to Apps they are not Aware about most of them.

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This First Jobber customer segment is one of the most Tech savvy in terms of the latest applications amongst all the segments. The content applications can be easily fit into their lives as they are the ones who are into using of apps which are being introduced by the mobile companies these days. This segment is looking for the advanced features in a mobile phone which not only includes a new look but a better technology in terms of camera resolution , Voice Quality, Sound clarity and some apps related to chatting should be there in a mobile handset because for them keeping in touch with friends and Family is very important. The segment is Price sensitive The segment is very interested in Dual Sim concept. If Videocon comes up with A Quality handset at an affordable price the segment is ready to accept it. This Working Women segment is basically looking for simple color phones with basic necessities like durability, Battery Backup and Music And Video Support. They are not interested in applications

Perception about Industry Guide:My industry mentors name is Mr. Guninder Singh. He is working with Datacom as DGM Marketing in the Marketing & Branding department. From the very first day of my internship he guided me in very good direction. He gave answers to all my queries. He made the official atmosphere lighter for me. I got a lot of positive lessons from him. I would recommend him as a very knowledgeable, hard working & cooperative. I am very grateful to have him as my industry mentor.

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