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BRAND MANAGEMENT PROJECT 201

BRAND
MANAGEMENT
PROJECT
Category Attractiveness
&
Product Opportunity
Phase- I

Submitted to:

Prof Saju Epean Thomas

Submitted by:

ANINDYA SANKAR KUNDU


08PMP00418
08/12/2009
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Executive Summary

The fast track growth of the Indian telecom industry has made it a
key contributor to India’s progress. India adopted a phased
approach for reforming the telecom sector right from the
beginning. Privatisation was gradually introduced, first in value-
added services, followed by cellular and basic services. An
independent regulatory body, Telecom Regulatory Authority of
India (TRAI), was established to deal with competition in a
balanced manner. This gradual and thoughtful reform process in
India has favoured industry growth. Today, there are more than
225 million telecom subscribers in India. Every month, 6-7 million
new subscribers are added. Upcoming services such as 3G and
WiMax will help to further augment the growth rate. Furthermore,
the Indian economy is slated to sustain its 7-9 per cent growth
rate in the near future. This is supported by the political stability
that the country is experiencing currently. India’s demographic
outlook makes it one of the largest markets in the world. A
conducive business environment is also created by a favourable
regulatory regime. There exists enormous business potential for
telecom companies on account of the country’s low teledensity,
The report below contains the Category attractiveness and product opportunity for
the brand management project submitted in partial fulfillment of the requirements
of MBA2 Program.
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which is close to 19 per cent presently. The Indian telecom
industry is growing at the fastest pace in the world and India is
projected to be the second largest telecom market globally by
2010.

CHAPTER-I
CATEGORY
ATTRACTIVENESS

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1.1.1TELECOM SECTOR: A GLOBAL SCENARIO

The Indian telecom market has been displaying sustained high growth rates.
Riding on expectations of overall high economic growth and consequent rising
income levels, it offers an unprecedented opportunity for foreign investment. A
combination of factors is driving growth in the telecom market, promising rich
returns on investments.
 India is the fourth largest telecom market in
Asia after China, Japan and South Korea.
 The Indian telecom network is the eighth largest in the world and the second
largest among emerging economies.
 The Indian telecom market size of over US $ 8 billion is expected to
increase three fold by 2012. The expansion of the telecom industry in India has
been fuelled by a massive growth in mobile phone users, which has reached a
level of 10 million users in December 2002, an increase of nearly 100 per cent
in 2002.
 This exponential growth of mobile telephony can be attributed to the
introduction of digital cellular technology and decrease in tariffs due to
competitive pressures. For the first time in India, the growth of cellular
subscriber base has exceeded the fixed line subscriber base. However, cellular
penetration is still 1 per cent as compared to world average of around 16 per
cent.

1.1.2 INDIAN TELECOM SECTOR

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Indian Telecom sector, like any other industrial sector in the country, has gone
through many phases of growth and diversification. Starting from telegraphic
and telephonic systems in the 19th century, the field of telephonic
communication has now expanded to make use of advanced technologies like
GSM, CDMA, and WLL to the great 3G Technology in mobile phones. Day by
day, both the Public Players and the Private Players are putting in their
resources and efforts to improve the telecommunication technology so as to
give the maximum to their customers.
The Indian telecom sector can be broadly classified into Fixed Line
Telephony and 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,
Vodafone (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.

1.1.3 DEMOGRAPHIC CHARACTERS :--

According to the Vision 2020 document of the Planning Commission of


India, the country will witness continued urbanization. The urban population is
expected to rise from 28 per cent to 40 per cent of total population by 2020.
Future growth is likely to be concentrated in and around 60 to 70 large cities
having a population of one million or more. This profile of concentrated
urban population will facilitate customized telecom offerings from
operators.

1.1.4 MARKET-SIZE, PLAYERS AND TRENDS:-

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.
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Mobile phone providers have also come up with GPRS- enabled multimedia
messaging, Internet surfing, and mobile- commerce
The much-awaited 3G mobile technology has entered in the Indian telecom
market.
The GSM, CDMA, WLL service providers are all upgrading them to
provide 3G mobile services.
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 2009 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 largest landline service provider, has recently
taken some bold initiatives to retain its market share and, if possible, expand it.
1.1.5 OPPORTUNITIES:-

India offers an unprecedented opportunity for telecom service operators,


infrastructure vendors, manufacturers and associated services companies. A
host of factors are contributing to enlarged opportunities for growth and
investment in telecom:
an expanding Indian economy with increased focus on the services sector
population mix moving favourably towards a younger age profile
urbanization with increasing incomes

Investors can look to capture the gains of the Indian telecom boom and
diversify their operations outside developed economies that are marked by
saturated telecom markets and lower GDP growth rates.

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1.1.6 COMPETITIVE LANDSCAPE:-

Demand is driven by technological innovation and by growth in business


activity. The profitability of individual companies depends on efficient
operations and good marketing.
Large companies have big economies of scale in providing a highly
automated service to large numbers of customers, and have the financial
resources required to build and maintain a large network.
Smaller companies can compete effectively only in small markets or by
providing specialty services

1.1.7 RESEARCH INDUSTRY GROWTH RATING:-


The First Research Industry Growth Rating reflects the expected industry
growth relative to other industries:-

Ref:-planningcommission.gov.in/reports/genrep/.../1_bg2020.doc

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Ref:-planningcommission.gov.in/reports/genrep/.../2_bg2020.doc

1.1.8 Product‘s Stage in PLC:-

As we can see above the mobile industry graph shows that


telecom industry is still at growing phase in the product life cycle.
The first operational land lines were laid by the British
Government in Calcutta in the year 1881 that was first time
Telecom sector introduce and 1985 department of
Telecommunication was established. In the year 1997 telecom
regulatory authorities of India was created then in 1999 mobile
services were launched in India and national new telecom policy is
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adopted and in the year 2000 DOT becomes a corporation BSNL.
After that telecom industry has been growing like cats and dogs.
The mobile industry can be reforms into three phases.

Phase I (1998-2003)

Actual growth started from this phase. TRAI was set up in


1997 and the first tariff order was issued in 1998. The reforms
becomes effective from 1998.

Phase II (2003-2005)

This phase marked a sustained increase in tele-density each


year which can me been in the Graph in chapter 1, the growth in
tele-density in 2003-2004 was approximately 2%, a percentage
which was greater than the total growth of 1.92% in the 50 year.

Phase III (2005-2007)

Every year industry should grow at pace of grater than 4.5%


in the tele-density to achieve the target of 250 million subscriber
by December 2007, According to a release by TRAI by June 2006
the total subscriber base has reached 153.37 million and tele-
density has reached to a level of 13.95%.

1.1.9 Seasonality in sales and sales cyclicity :-

In the Telecom sector seasonality in sales (mobile subscriber)


doesn’t play much role because we have found out since 1998 to
2007 mostly each and every quarter growing and the growth in
succeeding quarter is more than its preceding one.

1.2.1 PEST Analysis:-

Political – As markets are deregulated, both operators and


manufacturers are free to act independently of government

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intervention. In Countries like India and China where Partial
regulations exist, government intervention does take place.

Economic – With incomes rising, people have more disposable


income, which enables consumers to be more selective with their
choice of mobile phone,

looking to other factors rather than fulfilling the most basic of user
needs (text messaging and phone calls) and price being such a
key factor.

Social – The rise of the so-called information society has made


telecommunications increasingly more important to consumers,
both in terms of work and leisure. Users are more aware of mobile
phone handset choice and advancements due to increased
information availability.

Technological – There have been many global advancements in


technology such as UMTS,WIMAX, WAP, GSM, GPRS, 3G,4G etc.

Important regulations and their impact on the Indian


telecom industry

Unified Access Service License Regime (UASL)

Unified licensing marked the end of the license regime in the


Indian telecom industry. It helped in aligning convergent
technologies and services. The establishment of the Unified
Access Licensing Regime (2003) eliminated the need for different
licenses for different services. Players are now allowed to offer
both mobile and fixed-line services under a single license after
paying an additional entry fee. This does not take into account
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national and international long-distance services and Internet
access services.

Access Deficit Charges (ADC)

ADC makes it mandatory for a service provider at the caller’s end


to share a percent of the revenue earned with the service provider
at the receiver’s end in long-distance telephony. This subsidises
the infrastructure costs of the service provider enabling access at
receiver’s end, especially because rental for fixed-line services is
low. Revision in the ADC regime is expected to be followed by
further tariff reduction in telecom services. In a move to bring
down telecom tariffs drastically, TRAI has phased out access
deficit charges from this year.

Universal Service Obligation (USO)

The USO policy was laid along with NTP ’99 to widen the reach of
telephony services in rural India. All telecom operators are bound
to contribute 5 percent of their revenues to this fund. This system
was put in place to bridge the wide gap between urban and rural
teledensity, bringing it down from the current 31 percent. Initially,
only basic service providers were under the purview of USO. Later,
its scope was expanded to include mobile services also. Although
it increases the cost burden for the telecom companies, USO helps
in building the telecommunication infrastructure in the rural
areas.

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CHAPTER-
II
COMPETITOR ANALYSIS

2.1.1 PORTER’S FIVE FORCES

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The nature of competition in an industry is strongly affected by
suggested five forces. The stronger the power of buyers and
suppliers, and the stronger the threats of entry and substitution,
the more intense competition is likely to be within the industry. In
concentrated industries, according to this model, organizations
would be expected to compete less fiercely, and make higher
profits, than in fragmented ones.

Main Aspects of Porter’s Five Forces Analysis


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

• The power exerted by the customers in the market

• The impact of the suppliers on the sellers

• The potential threat of new sellers entering the market

• The threat of substitute products becoming available in the


market

Understanding the nature of each of these forces gives


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

Force 1: The Degree of Rivalry

The intensity of rivalry, which is the most obvious of the five


forces in an industry, helps determine the extent to which the
value created by an industry will be dissipated through head-to-
head competition. The most valuable contribution of Porter's “five
forces” framework in this issue may be its suggestion that rivalry,
while important, is only one of several forces that determine
industry attractiveness.
• This force is located at the centre of the diagram
• Is most likely to be high in those industries where there is
a threat of substitute products; and existing power of
suppliers and buyers in the market
Now let us understand the implication of degree of revelry in
Indian telecom sector. The dimensions of this parameter are
determined by:
High Exit Barriers: In any industry, if the exit barrier is high it
increases the difficulty of any organization to leave the industry
sector. So it makes any difficult to any willing to leave company to
leave the industry. The telecom industry suffers from high exit
barriers, mainly due to its specialized equipment. Networks and
billing systems cannot really be used for much else, and their
swift obsolescence makes liquidation pretty difficult.

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

• 6-7 players in each region

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

Very less time to gain advantage by an innovation: Every


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

Eg. Caller tunes, life time card

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

Force 2: The Threat of New Entrants

Both potential and existing competitors influence average


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

• Economies of scale: In telecom industry the economies


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

• Distribution channels: Distribution channels are also


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

• Customer Switching Costs: Customer switching cost is


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

Force 3: The Threat of Substitutes

The threat that substitute products pose to an industry's


profitability depends on the relative price-to-performance ratios of
the different types of products or services to which customers can
turn to satisfy the same basic need. The threat of substitution is
also affected by switching costs – that is, the costs in areas such
as retraining, retooling and redesigning that are incurred when a
customer switches to a different type of product or service. It also
involves:

• Product-for-product substitution (email for mail, fax); is


based on the substitution of need;

• Generic substitution (Video suppliers compete with


travel companies);

• Substitution that relates to something that people can


do without (cigarettes, alcohol).

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

 VOIP (Skype, Messenger etc.)


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

Force 4: Buyer Power

Buyer power is one of forces that influence the appropriation of


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

• This force is relatively high where there a few, large


players in the market, as it is the case with retailers a
grocery stores;

• Present where there is a large number of


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

• Low cost of switching between suppliers, such as from


one fleet supplier of trucks to another.

In the context of Indian telecom industry we can say that the


following points influence the buyer power:

 Lack of differentiation among the service provider


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

Force 5: Supplier Power

Supplier power is a mirror image of the buyer power. As a result,


the analysis of supplier power typically focuses first on the
relative size and concentration of suppliers relative to industry
participants and second on the degree of differentiation in the
inputs supplied.

The ability to charge customers different prices in line with


differences in the value created for each of those buyers usually
indicates that the market is characterized by high supplier power
and at the same time by low buyer power.

In the drawback of Indian telecom industry the following should be


kept in mind:
 Large number of suppliers: The industry basically has a large
number of suppliers, which helps them to choose from a lot of
options. So they try to select the best option to deliver the
value to the customers and to have a competitive advantage
from their competitor.

 Shared tower infrastructure: Technology has helped them to


share the tower infrastructure. This basically helps them to
reduce the initial investment a lot.

 Limited pool of skilled managers and engineers especially


those well versed in the latest.

 Medium cost of switching since changing their hardware


would lead to additional cost in modifying the architecture.

 Overall influence on the industry – medium.

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2.1.2 Major Players


S. No. Wireless Market Revenues Revenue %
Group share (%) Million of total
market
revenue
1 Bharti 23.97 36962 34
2 Reliance 18.56 12501 11.5
3 Vodafone 17.55 21742 20.7
4 BSNL 13.31 10873 10.2
5 Tata 9.93 96752 8.9
6 IDEA 8.96 97616 9.0
7 Aircel 4.73 3804 3.5
8 Miscellaneo 2.99 2717 2.5
us
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http://www.indianomics.com/2009/07/15/top-12-wireless-operators-in-india-by-
subscribers/

Review of Wireless (GSM and CDMA) Services

The Wireless Industry crossed 452.91 million-subscribers mark as by end of


May 2009. This total subscribers base of 452.91 million comprise of 298.15
million GSM and 105.51 million CDMA subscribers. During the financial year
2008-09 around 130.67million subscribers were added with a growth rate of
50.00% as compared to 58.12% growth during the year 2007-08.

The Department of Telecommunication (DoT) is has very aggressive plans to


increase the pace of growth, targeting 500 million by 2010. Most of the
expansion in subscribers is set to occur in Rural India. India’s rural telephone
density has been languishing at around 16.54. The subscriber addition rate has
been strong in the last 12 months but the regulatory developments will increase
competition and thus curtail the long-term growth rates of individual
companies. The savings through the setting of tower companies will partly go
towards the higher capex and opex costs from more stringent spectrum
allocation norms for the incumbents. The Telecommunications sector has been
consistently adding more than 10 million subscribers every month. All the

private operators GSM as well as the CDMA operators have been very
consistent in their performance.

However the recent regulatory developments have been negative for the
telecom companies as it has increased the number operators per circle which
intensified the competition. The addition of players like Aircel, Loop Telecom
(formerly BPL), Tata Docomo, Virgin Mobile and a few more yet to roll out
their services like Swan Telecom, and Unitech Telecom the pressure on

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established players is set to increase. So also with the implementation of MNP
and 3G spectrum allocation the Service providers have to be the best service
caterers to hold on to their market shares.

GSM and CDMA Market Occupancy


CDMA
26%

GSM
74%

www.reportbuyer.com/.../mobile-services-to-mobilise-the-indian-
telecom-sector

The market share of different GSM operators as on May 2009 is displayed


below:

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www.reportbuyer.com/.../mobile-services-to-mobilise-the-indian-telecom-
sector

The Market leader in GSM sector being Bharti Airtel with 32% of Market share
followed by Vodafone at 24%. The state owned BSNL is third in the
competition with 16% of the share in the GSM market.
CDMA market majors Reliance has got licence to operate(in 14 circles
and 4 metro cities) in the GSM band and they have launched their services in
the market. The existing players face a tough competition as Reliance and Tata
(with Docomo) have existing distribution channels and brand name, and can be
a potential threat to Airtel and Vodafone.
So is the case for Tata Indicom which recently launched its GSM services by
the name Tata Docomo in 18 circles in India.

Tata Docomo: Tata Docomo, the latest entrant into the GSM market had to get
some innovative and low priced packs to attract customers to switch to Tata
Docomo even before the actual implementation of MNP. As a part of this they
are offering 1paise calling per second for local( and STD calls as a limited
period offer). The success for Tata Docomo lies in winning third
generation(3G) airwaves in as many circles as possible and bringing their
internationally famed expertise into the domain.

The innovativeness here is they are branding their service on the basis of “value
for each second”, and “pay for only what you have used”. Thus they are trying
to attract customers even before the implementation of MNP. As Toshinari
Kuneida- M.D.of Docomo their target is to achieve 100million customers in the
next three years.

The market share of different CDMA operators as on May 2009 is


displayed below:

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www.reportbuyer.com/.../mobile-services-to-mobilise-the-indian-telecom-
sector

Coming to the CDMA market, Reliance Communication is a tough market


player to challenge with around 59.82% of the total CDMA market, followed
by Tata Teleservices(Tata Indicom and Virgin together) which has a share of
33.67%.

Virgin Mobile : Virgin Mobile as it says is “India’s ‘first’ national youth-


focused mobile service”. Virgin Mobile branded services are being offered to
the Indian consumers by Tata Teleservices through a brand franchise with
Virgin Mobile. Virgin Mobile India will provide Tata Teleservices with
experience and expertise in designing, marketing and servicing of “Virgin
Mobile” branded products for the youth segment.

They are targeting the Youth segment by offering schemes like get paid for
incoming calls, pay for the first message and get 100 messages free for that day.

Industry Revenue (2002-2010)


According to a Frost & Sullivan industry analyst, by 2012,
fixed line revenues are expected to touch US$ 12.2 billion while
mobile revenues will reach US$ 39.8 billion in India. India has
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become the second country in the world to have more than 100
million CDMA-based (code division multiple access) mobile
phone subscribers after the US, which has 157 million CDMA
users. The Indian telecommunications industry is on a growth
trajectory with the GSM operators adding nearly 9 million new
subscribers in April 2009, taking the total user base to 297
million, a growth of 3.11 per cent over the additions made the
previous month. The figures, however, do not include the GSM
subscriber additions made by Reliance Telecom.
Year Revenue(US$ billion)
2002-03 9
2003-04 10
2004-05 11
2005-06 15
2006-07 20
2008-09 32
2009- 43
10(forecasted)
a. http://www.cellular-news.com/story/37761.php

2.1.3 Strategy Competition:-


Airtel (market leader)

With a 32% market share. Airtel has emerged as a market leader, Bharti
televentures have positioned themselves as intergrated players with desire to
have a presence in basic (wire line and wireless) as well as national and
international long distance.

Vodafone/ BSNL (market challengers)

Vodafone with a 24% market share has followed a differentiations


strategy by offering its customers value added services (VAS). They have
followed a top down approach, tapping category a cities, BSNL is a state owned
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player with market share of 16% and has been able to leverage its low cost
position in small towns and B and C category cities.

IDEA (market follower)


With a 15% market share it has positioned itself as a ‘value for money’
brand. It simply follows the leader and the challenger after the technology
becomes successful.

Reliance/TaTa/ Aircel/Shyam Telecom/ Spice/TaTa DO CO MO/ (market


Nichers)
They are the niche players who cater to very small niche markets, which
are not served by the big players.

2.1.4 SWOT ANALYSIS


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

SWOT Analysis Framework

Environmental Scan
/ \
Strengths Internal Analysis External Analysis
/\ /\
Here we will Strengths Weakne Opportunities Th
sses reats
analyze the |
strengths of SWOT Matrix
the telecom
industry as a whole. The most important factors are:

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• Technology is advanced and easy to implement: For


telecom industry the technology is really advanced and
more and more investment is done on technology to get
world class infrastructure and knowhow to put in this field.
Recently the telecom sector is going to add 3G spectrum
as its latest up-gradation.

• Management Team has prior experience: The


management team controlling Indian telecom sector in
really efficient. Thank goes to the IITs which produce world
class engineers. So Indian telecom sector has abundance
of technological knowhow.

Weakness

The weaknesses of the Indian telecom sector are as follows.

• High Cost of Infrastructure: The infrastructure cost of


telecom industry is very high.

• Low customer retention power: The customer retention


power for telecom industry is really low and the customer
changes their service provider company very soon.

Opportunity

• Population: The population of India is really an opportunity


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

• Changing Population psychograph: Population


psychograph is also changing. Previously telecom service

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

• Increased Penetration Level: All the organizations of the


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

• FDI: The foreign direct investment in telecom has been


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

Threats

The treats to the industry are the following:

• Government Policies – Government may provide licenses to


many foreign operators, which may already have pose a
threat for the existing players in the industry.

• New Technology can change the market dynamics: A lot of


new technologies are coming. Then even have the potential
of changing the entire industry dynamics or even create
substitute of the telecom services existing.
Some of the examples are follows:
 VOIP (Skype, Messenger etc.)
 Online Chat
 Email
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 Satellite phones
To summarize the SW0T analysis we can draw the following
framework for telecom industry:

CHAPTER-
III
Customer Analysis

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3.1. Need-gap Analysis:


3.1.1. Customer Analysis:
• We can divide customers into various segments
based on their needs.
o Segment 1: this segment of customer wants latest
innovations in their mobile phone. They pay premium for
it. This group is interested in experimenting. For them it is
their status symbol. They know almost all the latest thing
in telecom industry.

o Segment 2: Particular customer segment wants


value for money in terms of effective call rates. They
utilize some value added services. Their major focus for
telephone is just to communicate.

o Segment 3: This customer segment telecom product


is luxury. It is a large segment. We can term it as BOP.
Effective call rates and customized plan can work well.

o Business segment: This segment’s needs are


distinctly different from other segments. They want
customized features and services.

3.1.2. Description of customer Problem:

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• Major problems of customer

o Hiding of information (regarding charges)

o Lack of advance technology

o Value proposition is less

o Promotional calls

o Expensive Value added services

o Offerings are not communicated properly

o Poor after sales services for major players

o Network jam

o Call getting disconnected

o Varying schemes and amount of schemes available

o Lack of personalized product

3.1.3. Profiling of new customers for a new product:

• Our customers are first movers in technology. They


are innovators and early adopters. Our customer belongs
to cadre, who spend more money on gadgets, life style
and quality of life.

• Another profile which we want to target is business


class. We provide business solutions with technology. We
provide high end service to industry for networking.

• We target youth customers those want to obtain


every advanced technology available into the market.

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3.2. Sales Potential:

• Indian Telecommunication industry, with about


464.82 million mobile phone connections (June 2009), is
the third largest telecommunication network in the world
and the second largest in terms of number of wireless
connections. For the past decade or so,
telecommunication activities have gained momentum
in India. Efforts have been made from both governmental
and non-governmental platforms to enhance the
infrastructure. The idea is to help modern
telecommunication technologies to serve all segments of
India’s culturally diverse society, and to transform it into a
country of technologically aware people.

• Teledensity: 41.08% (July 2009)


• Projected teledensity: 626 million, 46% of population
by 2010.
• Yearly Cell phone Addition: 113.26 million (2007)
• Monthly Cell phone Addition: 14.38 million (July 2009)
• 612 million mobile subscribers, accounting for a tele-
density of around 51 per cent by 2012.
• According to survey conducted by Nokia, telecom sector is
expected to emerge as single largest component of Country’s
GDP with 15.4% contribution by 2014.

3.3 Basic/ Product Idea

• Superior technological service to customers

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• Broad band facility

• Television facility

• Advanced gaming facility

• No network jam

• No call getting disconnected

• Personalized Services for premium class customers.

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CHAPTER-
IV
General Comments

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4.1. General Comments

Description of the opportunity

The Indian telecommunications industry is one of the


fastest growing in the world and India is projected to become
the second largest telecom market globally by 2010.

India added 113.26 million new customers in 2008, the largest


globally. The country’s cellular base witnessed close to 50 per
cent growth in 2008, with an average 9.5 million customers
added every month.

According to the Telecom Regulatory Authority of India (TRAI),


approximately 14.25 million telephone connections, including
wireline and wireless, were added during July 2009, taking the
total number of telecom subscriber base at the end of July
2009 to 479.07 million from 464.82 million a month before.

According to Business Monitor International, India is currently


adding 8-10 million mobile subscribers every month. It is
estimated that by mid 2012, around half the country's
population will own a mobile phone. This would translate into
612 million mobile subscribers, accounting for a tele-density of
around 51 per cent by 2012.

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It is projected that the industry will generate revenues worth
US$ 43 billion in 2009-2010.

 New Technology for Indian market.

 Bidding process is likely to start soon.

 None of the existing player is providing 3G facilities.

 No additional advantage for the existing player.

 Focusing on future market.

4.1.2 Feasibility:-
The telecom sector is one of the fastest growing sectors.
It offers three categories of services. Fixed line services,
wireless services and cellular services, the cellular services is
called as mobile service because of its nature of usage . there
are two types of mobile services networks- Global system for
mobile (GSM) and code division multiple access(CDMA).
According to available data the tele-density was only 0.02% in
1948, now in the year 2007 the tele- density has reached by
22.5% and the subscriber base has crossed 250 million mark.
This is very significant indicator. And almost 70% of our
population living in rural and semi-urban areas. We have an
opportunity because still rural and semi rural is covered only
15%-20% by the Telecom companies. Huge untapped market is
available so there is great scope of improvement.

4.1.3 Possible Hurdles:-


Regulatory uncertainty surrounding limited mobility and
unified licensing casts doubt on the future direction of the India
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telecom industry Regulatory battles are not new to India and
the latest one to grab the headlines surrounds 'limited
mobility'. Through the use of WLL (wireless local loop)
technology, basic fixed-line operators can use limited mobility
to broaden their service portfolio, often with tariffs significantly
lower than that offered by the cellular operators. The telecom
sector is also afflicted by a number of restraints such as
sluggish pace of reform process. Lack of infrastructure in semi-
rural and rural areas, limited spectrum availability, more over
huge initial cost to take the telephony in rural and semi-rural
market impede the telecom service providers to tap the huge
rural market.

Conclusion
Telecom industry is seeing a rise as the trend goes and has
potential for growth. Taking into account the tele-density of
38.88% there is still unexplored market. The competition is fierce
with around 10 Service providers in most of the 18 circles and also
the implementation of MNP. The service providers have to be
different and have to stick to strict service norms and provide
excellent customer service in order to hold on to the market
share. Thus there is intense competition in the market but at the
same time scope for development in rural areas. Airtel,Idia and
Vodafone have taken up initiatives to provide customized
connections to Rural customers like Motor pumps control system,
loud speaker phone for illiterates and so on.

In a few words Telecom sector has a lot of scope for growth and
the customers at the same time have the benefit to choose from a
wide range of service providers offering various plans targeted to
specific customers.

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Annexure:-
REFERENCES:-
b. http://www.indianomics.com/2009/07/15/top-12-wireless-operators-in-
india-by-subscribers/
c. http://www.cellular-news.com/story/37761.php

d. www.efytimes.com/efytimes/fullnews.asp?edid=30375

e. www.bharatbook.com/productdetail.asp?id=82391

f. http://www.scribd.com/doc/15684486/Marketing-Report-on-Bharti-Airtel

g. http://www.slideshare.net/goel.gauravgoel/study-of-telecom-sector

h. http://www.icmrindia.org/casestudies/catalogue/Business%20Strategy/Bharti
%20Airtel%20Limited%20and%20the%20Indian%20Telecom%20Sector.htm

i. http://www.bharatbook.com.

j. planningcommission.gov.in/reports/genrep/.../1_bg2020.doc

k. www.reportbuyer.com/.../mobile-services-to-mobilise-the-indian-telecom-sector-in-
future/

l. www.ficci.com/telecom.htm

m. tutor2u.net/business/strategy/competitor_analysis.htm

n. http://www.airtel.in/

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