Introduction

Indian mobile industry was started almost 10 years before, because of Govt. regulation it
couldn’t grow like China. As per current estimation India’s mobile services market is
expected to grow at 28.3% CAGR through 2009. But the market is also very much
competitive, all the players are keen to increase the market share, so the prices are getting
slashed. The current players in the market are:-
 Reliance
 BSNL
 Idea
 Airtel

Current Scenario:
The industry is moving from the Growth stage to the Shakeout stage, although the market
is growing fast, but the Cut-throat Competition is slashing the profit margins, which is
very common in Later Growth stage and players those who dont have strong financial
back up are going to be sold to the stronger players. So its very clear that players with
stronger brand and financial back up will make the future profit.
The bigger players are also operating in other Telecom areas like Landline, ISP,
Broadband, Corporate data & voice services etc, to become one stop solution provider,
hence forth increase the market share, this clearly indicates the Sorry situation for the
smaller players. Entry barrier for any new player is too strong.
Once the Shakeout period is over in next few years the Mobile Industry in India is likely
to enter in matured market.

Challenges in growth:
But there is other theory too the economic growth in India, currently the market is
growing more on the Network area growth, providers are moving to smaller cities from
big cities, demand is generated from B class & C class cities middle class population. A
major section of middle class population of India in smaller cities couldnt enjoy the
advantages of Telecom service due to the Govt. monopoly, poor capacity, regulations;
they are the immediate customers of the Mobile operators. The Landline is no more the
preferable choice for the new Telco users; people like to use mobile phones because of its
added advantages and easy subscription. Also the middle class size is expected to grow in
India in next decades, so the Mobile market in India will be probably in Growth Shakeout
phase for a longer period.
Also the Roadmap, which was thought by the Govt. earlier has become more like a
roadblock for the growth, to keep the market competitive they introduced lot regulations
and zoning concepts, which have become barrier for market growth and to play at
Economies of scale, which are likely to change by the market dynamics and market
forces. So the Growth Shakeout phase is likely to continue for a while. Few years before
the number of players were many, as TRAI had stringent laws in number of zone
operations by single provider, but these are changing rapidly.

Service Providers Offerings:

India is a vast and complex market. The Indian Department of Telecommunications
classifies the country’s telecom markets into “metro” and “A”, “B” and “C” circles or
zones, based on how many potential subscribers they have. For example, the C circles
refer to rural areas and are the least attractive sectors with very little wealth. The 1999
National Telecom Act defined a phased telecom deregulation with national operator,
VSNL, privatized in April 2002.
The cellular market is divided into 4 metro areas, 5 circle A areas, 8 circle B areas and 5
circle C areas. When all the cellular licensees become operational, India will be served by
77 networks. This segmentation of the market and licensees has certainly not helped the
growth of the Indian market. These Network is increasing very fast, as companies want to
tap the middle class population in smaller cities, and technological development, they are
able to increase the Network boundary with lesser investment and also the competition.
Indian mobile operators offerings are segmented in two broad categories Pre-paid and
Post-paid. Although mobile market is growing positively, the Post-paid market is
declining and Pre-paid market is increasing by leaps and bounds.
TRAI regulations and Indian consumer behavior are causing for the growth in Pre-paid
market. As the revenue in pre-paid offer is increasing in Circle A and Circle B for
Economies at scale, the Pre-paid market share is going to be the more important. When
Reliance InfoComm came into the market, they didnt realize this initially, but very soon
they came with Pre-paid offer.
Brief on Service Gap Model:

1. Market Information Gap Not knowing what Customers Expect: The Company’s
incomplete or inaccurate knowledge of customers’ service expectations.
Key Factors :-
 Inadequate marketing research orientation
 Lack of upward communication
 Insufficient relationship focus
 Inadequate service recovery
2. Service Standards Gap Not having right standard and design: The Company’s
failure to translate accurately customers’ service expectations into specifications or
guidelines for employees.
Key Factors :-
 Poor service design
 Absence of customer-defined standards
 Inappropriate physical evidence and Servicescape
3. Service Performance Gap Delivery lag: Lack of appropriate internal support systems
(e.g., recruitment, training, technology, compensation) that enable employees to deliver
to service standards.
Key Factors :-
 Deficiencies in HR policies
 Not match Supply & Demand capacity
 Customers failed to meet their roles
 Intermediaries problem
4. Internal Communication Gap Promises don’t match: Inconsistencies between what
customers are told the service will be like and the actual service performance [e.g., due to
lack of internal communication between the service ‘promisers’ (such as salespeople) and
service providers (such as after-sales service representatives)].
Key Factors :-
 Lack of Integrated services marketing communication
 Ineffective management of Customer expectation
 Over promising
 Inadequate horizontal communication
This section is analyzed in following sub-sections:-
Consumer Perceptions
Perception is the process of selecting, organizing and interpreting information inputs to
produce meaning, i.e. we chose what info we pay attention to, organize it and interpret it.
Information inputs are the sensations received through sight, taste, hearing, smell and
touch. This is very important factor for Indian consumers, as the average literacy level is
low in India. People want to judge the quality of service with more on Physical evidences
comparing to western world, where people rely on the specifications.
As Mobile Telecom service is Remote Service, people dont see any infrastructure of
Network, consumers want to see the Front offices / people of the provider. This was
realized by Reliance very quickly, they offered the Handset on Mail order basis which
didnt work out well, immediately they started opening retail store which brought lot of
success for them, even entering late in the market. AirTel (Bharti), Hutch, Spice offer this
presence through the dealer network and selective retail store. But provider direct
presence is more valuable..

Learning & Communications

In India this process is comparatively slower than western world or developed countries.
So the communication to the consumers play much bigger role than here, the need for
mobile communication is much more in Rural India and cities, but the impediments are
the cost and learning process. As the costs of mobile services are coming down, the
opportunity in Rural India will grow. But the providers and operators have to
communicate much more in teaching the people.
TSPs also need to encourage some retails network in Rural India, which can offer
cheaper service, like HLL or P&G offers 1 Rs packet for their toiletries products, or ITC
offers Internet centers in villages of several states. Tech. MNCs (AMD is releasing
cheaper chips, Dell is coming up with low end PCs) are trying to come with tailored
products for the emerging markets, which can be cheaper, less features, and easy to use.
Bharti planned to open a SMS based public booth Network in cities few years before, but
that business plan became infeasible as SMS prices dropped like a falling rock. But
potential for similar mobile public booth in Rural India is very high.
Learning & Communications are more required to close Gap 3 and Gap 4.
Perceived risks
In service risk assessed as it is consumed and experience, also Word-of-Mouth. People
perceive more risk in service than products, because of its intangibility. In India this is
more because of rudimentary legal framework, the Consumer protection is much less
than developed country. This is one Major Reason also for booming Pre-paid market than
Post-paid. TSPs have to offer some kind of financial warranty in case of Post-paid
connection. So far the experience of Indian consumers with Govt. Telecom organization
is very poor.
Physical presence and financial back up required more to reduce the risk factors. The risk
will be perceived less as Gap 3 and Gap 4 will be closing.

Group Dynamics
This is one of the most important factors in Indian market, here Word-of-Mouth is much
powerful than any other communication, and people follow their families, friends, and
social groups. The Market communication from TSPs should keep this in mind.
The Call Plan should consider this with high importance, some mobile operators are
considering this factor, but there is no still Customer analysis or segmentation done.
Group dynamics consideration should be taken care in closing Gap 3.

Services Recovery Strategies by Airtel

Extensive qualitative and empirical research-spanning multiple phases, covering a variety
of sectors, and involving a number of companies-suggests the following general insights
about how customers assess service quality. Firstly, customer-defined service quality
stems from a comparison of customers’ service expectations (i.e., their mental standards
about what a company ought to provide by way of service) with their perceptions of the
delivered service.
Secondly, customers evaluate the nature and extent of the gap between their perceptions
and expectations along five broad service attributes (listed below in decreasing order of
importance):
 Reliability: Ability to perform the promised service dependably and accurately.
This is more dependent on the Technology and Network Infrastructure is used,
Indian TSPs are at per or near per with Global standards in this regard.
 Responsiveness: Willingness to help customers and provide prompt service. This
one major are Indian Mobile operators are lagging and lot of work needed to be
done.
  Assurance: Knowledge and courtesy of employees and their ability to inspire trust
and confidence. This is also another lagging area.
 Empathy: Caring, individualized attention the firm provides its customers. This is
also another lagging area.
 Tangibles: Appearance of physical facilities, equipment, personnel, and
communication materials. Mobile service is Remote Service; the Tangibility needs
to be created other ways.

The Evidence of Service

Because Services are intangible, customers are searching for evidence of service in every
interaction they make with the provider. Here is the general diagram
 People
- Contact Employees
- Customer him / herself
- Other customers
 Process
- Operational flow of activities
- Steps in process
- Technology vs. Human
 Physical Evidence
- Tangible communication
- Promises
- Technology
- Internet integration

With a CRM package sitting on the top of billing software, it can generate various kinds
of data for the company to understand the service preferences, usage pattern and
demographic nature of its customers. Previously it was a few discreet parameters. Now
with a separate software package seamlessly integrated with the billing modules, the
service providers can build relationships among different parameters to take important
business decisions.
Segmentation is really important in Indian market as Demographics variation is very high
here, so the System should be flexible enough to work with different process flows,
different types of Service delivery, especially the very less focus made on Pre-paid
market for customer satisfaction, where as pre-paid market stands for the larger share.
Most of the operators consider pre-paid users as Anonymous, as they consider the Exit
Barrier is less in Pre-paid connection, where as the Exit Barrier is almost same as Post-
paid, typically consumers consider the hassle of changing Mobile number and new SIM
card cost as Exit Barrier.

 Relationship Marketing focus

 Employee management
 Service focus on Pre-paid market
 New Business Ideas for Rural market
 Usage of right CRM tool