PROJECT REPORT

ON
A STUDY OF TELECOM SERVICE IN RURAL MARKET OF
PUNJAB

Submitted to Punjab Technical University in Partial Fulfillment of the

Requirements for the Degree

Of

MASTER OF BUSINESS ADMINISTRATION

Submitted By:

Kushal jaitwani

Roll No. 81001317053

2008-10

1
 Gian Jyoti Institute of Management & Technology,Mohali

CONTENTS

Chapter No. Chapter Name Page No

Declaration 3

Certificate 4

Acknowledgement 5

Chapter 1 Introduction 6

Chapter 2 Review of Literature 29

Chapter 3 Research Methodology 33

Chapter 4 Data Analysis 39

Chapter 5 Recommendations 59

Chapter 6 Conclusion 60

Bibliography 61

2
 Annexure 63-66

DECLARATION

The Director
Gian Jyoti Institute of Management & Technology
Phase - 2
Mohali
Respected Sir,
I the undersigned hereby declare that the summer taining project report submitted to my
college i.e. Gian Jyoti Institute of Management & Technology in partial fulfillment for
the Degree of Master of Business administration on “A STUDY OF TELECOM
SERVICES IN RURAL MARKET OF PUNJAB” is a result of my own work under
continuous guidance and kind co-operation of our college faculty member, Mr.
NEERAJ SHARMA. I have not submitted this project report to any other university for
the award of any degree.

KUSHAL JETWANI

3
 Certificate of Completion

This is to certify that KUSHAL JETWANI, Roll no. 81001317053 of MBA-4th has
successfully completed his project titled “A STUDY OF TELECOM SERVICES IN
RURAL MARKET OF PUNJAB” under my guidance. This project is in the fulfillment
of his MBA curriculum.

Wish him All the Best of future endeavors

Date: MR.NEERAJ SHARMA

Project Guide

4
 ACKNOWLEDGEMENT

On the completion of this project, I take the opportunity to express my gratitude to the
people who have been instrumental in the success of the same.

First of all, I would like to thank Mr. Neeraj Sharma for having given me this opportunity
to work under his guidance and for his tremendous support and help. Throughout the
period of two months, there has been a great amount of value addition and learning that
will be beneficial in all my future corporate endeavors.

The guidance and support received from all the team members here at Reliance
Communications who made their whole hearted contribution to this project, was vital for
its success.Miss.Tanya Kaushal and Mr. Raj Verma (Marketing coordinator) was also a
constant support throughout the project. I am grateful to all of them for their
encouragement and help.

I also extend my sincere thanks to the faculty of GJIMT for giving me an opportunity to
be a part of this project

5
 Chapter-1

INTRODUCTIO
N

6
History of Indian Telecommunications

Started in 1851 when the first operational land lines were laid by the government near
Calcutta (seat of British power). Telephone services were introduced in India in 1881. In
1883 telephone services were merged with the postal system. Indian Radio Telegraph
Company (IRT) was formed in 1923. After independence in 1947, all the foreign
telecommunication companies were nationalized to form the Posts, Telephone and
Telegraph (PTT), a monopoly run by the government's Ministry of Communications.
Telecom sector was considered as a strategic service and the government considered it
best to bring under state's control.

The first wind of reforms in telecommunications sector began to flow in 1980s when the
private sector was allowed in telecommunications equipment manufacturing. In 1985,
Department of Telecommunications (DOT) was established. It was an exclusive provider
of domestic and long-distance service that would be its own regulator (separate from the
postal system). In 1986, two wholly government-owned companies were created: the
Videsh Sanchar Nigam Limited (VSNL) for international telecommunications and
Mahanagar Telephone Nigam Limited (MTNL) for service in metropolitan areas.

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

economy. Also, examples of telecom revolution in many other countries, which resulted
in better quality of service and lower tariffs, led Indian policy makers to initiate a change
process finally resulting in opening up of telecom services sector for the private sector.
National Telecom Policy (NTP) 1994 was the first attempt to give a comprehensive
roadmap for the Indian telecommunications sector. In 1997, Telecom Regulatory

7
Authority of India (TRAI) was created. TRAI was formed to act as a regulator to
facilitate the growth of the telecom sector. New National Telecom Policy was adopted in
1999 and cellular services were also launched in the same year.

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

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

8
Rural Telecom Market – an emerging market

During the current decade, India has seen an exponential growth in the telecom especially
wireless. The rate of growth of telecom penetration in urban India has been very high as
compared to rural. Total subscribers as on jan 2010 are 545.05 million, out of which only
29% is the contribution from rural India which constitutes 70% of the total population of
the country. Rural teledensity has just reached the two digit level whereas the urban
teledensity is heading towards the three digit level (As on Sep 08, the rural teledensity is
16.54 and urban teledensity is 81%).

The Regulatory and policy changes that the Government of India introduced from time to
time have ensured sustained growth in the telecom sector. Teledensity in the urban areas
has reached satisfactory levels but the rural Teledensity remains a serious challenge.
Though, the issues involved in spreading the telecom services to Rural India are
complex and multidimensional and require special attention, however, the solution should
no longer evade us. As urban areas reach saturation levels and the growth in these areas

9
slows down, service providers are increasingly keen to move towards the newer markets
in semi-urban and rural areas in search of subscribers and revenues. The marginal
customers in urban India are also giving lower ARPUs and the fight for market shares
has to settle through rural expansion.
During the last 2-3 years, all the stakeholders viz. the government, the regulator, the
telecom service providers, the vendors and content providers have been grappling with
various measures to boost the rural elecom penetration. Every concerned part is trying its
best to bridge the elecom divide. However, in spite of sincere efforts of all the
stakeholders, esired results are yet to be achieved.
Gandhiji said “The Soul of India resides in Rural India”.
The gains from liberalization and economic development must percolate to all the
segments in the country and every citizen has to be the beneficiary. Development of
Telecommunication and the communications infrastructure is an essential precondition
for making available the benefits of liberalization to the rural masses and for further
powering the engine of growth of the nation.
"Information is critical to the social and economic activities that comprise the
development process. Telecommunications, as a means of sharing information, is
not simply a connection between people, but a link in the chain of the development
process itself." [Hudson 1995].
Telecom Regulatory Authority of India (TRAI) believes that every Indian should have
the opportunity to connect with the world beyond their geographical boundaries, and is
working to ensure that every individual has access to a dial tone wherever and whenever
tapped.
The last five years, have seen a phenomenal spurt in the growth in tele-density in the
country riding on the evolution of wireless technologies, policies of Government and the
Regulator. The total subscribers as on jan 2010 is 545.05 million compared to
nearly 8 million in Mar 94. However, there is a huge digital divide between Urban and
Rural. India is a vast country having an area of about 3,287,000 square kilometers with
nearly 70% of its total population of about 1.15 billion, living in the rural areas. There are

10
more than six lakh villages in the country. As of jan 2010, the urban teledensity (No of
telephones per 100 persons) was 81 as against the rural teledensity of only around 16.54.
During the last two decades, though several attempts have been made to
extend the benefits of the telecom revolution to rural masses but the gap between urban
and rural tele-density has widened.
According to the National Council for Applied Economic Research (NCAER), the
country's urban growth and prosperity is beginning to percolate to the countryside. The
Gross Domestic Product (GDP) of the country is approximately 1 trillion US dollars out
of which the share of the agriculture sector, which is mainly in rural India, is approx.17.5
%. India's rural majority today accounts for more than US$155 billion in consumer
spending i.e. the largest buyers as a group in the country and contributing significantly to
India's GDP. In 1990, for every $100 earned by a person residing
in a rural area, a person in an urban area earned approx. $182. Today, this gap has been
reduced to $56. Already, mobile-phone companies and consumer durable companies have
become aware of the opportunity that exists in the huge rural consumer segment
and have extensive marketing programs in place. Cell-phone makers are eyeing the rural
markets to push growth beyond the present 7 to 9 million new mobile connections every
month.
Around the world, governments, international agencies, and academics have recognized
telecom as an enabling infrastructure – allowing the people it connects to reach out and
communicate, seek business, and grow their knowledge. Rural India is still,
unfortunately, on the wrong side of the digital divide, which prevents a significant
portion of our population from attaining their full potential. Given that communication is
a human need and right, and that a strong communications network enables commercial
and social ties, it is essential that we bridge this divide between urban and rural India.
Rural development gets a boost by a reliable infrastructure of enhanced
telecommunications. Participation by rural and poor segments of society in the
information economy should be a strategic priority both for social reasons as well as for
the reason of economic development being a goal in itself. Access to the
telecommunication network drives economic growth and provides economic opportunity.
Special emphasis needs to be placed on the role of telecommunications in enabling rural

11
citizens to integrate effectively in the Indian economy and then to the new Global
Economy. Successful systems require not just appropriate technology but primarily that
all other elements like people, policies, processes, incentives, institutions, and
infrastructure are present and work well. Special transition policies are required to
give a fair chance and to help rural India to adjust to the new marketplace of
telecommunications.
There is plenty of evidence to show that telephones have a high correlation with GDP
per capita. Broadly we can say that if a country has a one per cent higher mobile phone
subscription rate than another, its GDP per capita will be about $200 higher.
Surveys and studies have repeatedly shown that access to information and
communication technologies allows the benefits of information availability, business
opportunities and social connections that translate into brighter education and economic
opportunities.
Government of India had announced the National Telecom Policy (NTP) 1994 with a
strong focus on ensuring telecommunication facilities being within the reach of all. The
policy also visualized that the universal service (universal service is the provision of
access to all people for certain telecom services at affordable and reasonable prices)
covering all villages would be achieved as early as possible and the quality of telecom
services would also be of world class standards. It aimed that by 1997, we should be able
to provide telephones on demand and that all villages should be covered. However,
against the NTP 1994 targets, the telephone connectivity to only 3.1 lakh villages (out of
total six lakhs) could be achieved by 1997.
While evaluating the outcome of NTP 94, the Government of India recognized that the
provision of world class telecommunications infrastructure and information is the key to
rapid economic and social development of the country. It was critical not only for the
development of the Information Technology industry, but it also has widespread
ramifications on the entire economy of the country. Accordingly, a comprehensive and
forward looking telecommunications policy which creates an enabling framework
for development of this industry and, of the nation as a whole was put in place in 1999.
1.9 While formulating the policy, a balance was sought to be achieved between the
provisions of universal service to all uncovered areas, including the rural areas,

12
encourage development of telecommunication facilities in remote, hilly and tribal areas
of the country, and to transform the telecommunications sector, in a time bound manner,
to a greater competitive environment in both urban and rural areas. NTP 99 envisaged the
development of telecom in rural areas, making rural communication mandatory for all
fixed service providers, making it more affordable by suitable tariff structure. NTP 99
sought to achieve the Universal Service Objectives of provision of Voice and Low speed
data service to the balance 2.9 lakh uncovered villages by the year 2002, and achieve
telephone on demand in urban and rural areas by year 2002. It aimed at increasing the
rural teledensity from 0.4 to 4 by the year 2010 and to provide reliable transmission
media in all rural areas. It is worthwhile to mention that the rural teledensity of 4 has
been achieved in the year 2006-07 itself and the rural teledensity as on jan 2010 is
around 17.
In 2005, the Govt. of India launched Bharat Nirman Scheme a time-bound business plan
for action to promote rural infrastructure in the next four years i.e. 2005-09. Under this
scheme, action is proposed in the areas of irrigation, road, rural housing, rural water
supply, rural electrification and rural telecommunication connectivity. Specific targets
have been set under each of these goals for accountability purposes. Under this
programme it has been targeted that 66,822 revenue villages in the country, which have
not yet been provided with a Village Public Telephone (VPT), shall be covered by
November, 2007. Out of the above villages, connectivity in 14,183 remote and far flung
villages will be provided through digital satellite phone terminals. Assistance for both
capital as well as operational expenditure for these VPTs will be met out of the Universal
Services Obligation Fund (USOF). As on 30-9-08, out of total 66822 uncovered
villages, 55257 (82.69%) have been provided with VPT2.
The last decade or so has seen a rapid increase in tele density largely as a result of
liberalization of the telecom sector and creation of a market through appropriate policy
and regulatory measures. These measures led to the achievement of price levels
where the cost benefit ratio suited large masses of urban population. On the supply side
the service providers ensured rapid growth of the network capacity to handle the increase
in the subscriber numbers ensuring that a clear business case was established for them. In
order to bridge the growing digital gap between the urban and rural India, it is necessary

13
that a similar growth equation is created for rural India, both for the service providers as
well as for users. However, unlike the urban masses who were familiar with the telephone
even prior to liberalization, the majority of the potential hundred million new rural
subscribers will be first time users and therefore, special efforts through awareness
programme customized value addition, innovative marketing & pricing will be required
so that they identify the telephone, as being in the category of other basic amenities like
water, electricity, road etc.
To achieve this dream, all the stakeholders viz. the government, operators, equipment
vendors and various local bodies would need to collaborate and work closely. At stake
are several thousand crores of rupees in annual revenue- and significant growth and
development. To quote from a market report “In 20 years the rural Indian market will be
larger than the total consumer markets in countries such as South Korea or Canada today,
and almost four times the size of today’s urban Indian market. The estimated size
of the rural market will be USD577 billion.”3
Operators will need to collaborate with players in other industries, such as financial
services and consumer goods, in order to develop innovative offerings and extend their
reach beyond the outer limits of traditional distribution channels. Business model
innovations must transform the economics of serving overlooked or neglected consumers
and yield products and services that suit their needs. Business as usual will not reach
these consumers. Instead, telecom operators will need to revise their organizations
marketing, and distribution channels. They will also need to change their products.
For boosting rural telecom penetration, TRAI has taken a lot of initiatives like
recommending bringing mobile services under the ambit of USOF, sharing of
infrastructure to receive support from USOF, relaxation for deployment of towers upto 40
m in rural areas, discount in USO levy after sufficient coverage, supporting backbone
infrastructure through USOF etc. The details of initiatives taken by TRAI and various
NGOs, other bodies in India and internationally to promote Information &
Communication Technology (ICT) in rural and less developed regions have been
chronicled in the

14
Present Status

There are about 435.31 million wireless subscribers as on jan 2010 of which, about 90.76
million subscribers are from rural India. To achieve the target of 700 million by 2012, it
is imperative that 90-100 million new subscribers are from rural areas. Tough presently,
the rate of growth of rural subscribers is higher than that of urban, however to sustain and
accelerate if further, there is a need for the creation of an ecosystem that encourages
Service Providers to view the rural markets as an opportunity with potential for
sustainable revenues, as well as, users to view the Telephone as not only a tool for
communication, but also a tool to impart education, entertainment and the consequent
network that grows out of the connectivity as a means/forum to promote common
interests, ideas and goals. However, this would require a re-look at our traditional policies
so as to create a conducive environment which will make the stakeholders start looking at
“Universal Service Obligation” as “Universal Service Opportunity”.
Presently, the rural tele-density as on jan 2010 is around 17 and the percentage of rural
mobile coverage has reached 75% as on March 2008 (table 7). Out of 593731
inhabited villages, the service providers have reported that 407112 villages have already
been provided mobile coverage. The challenge is to increase this mobile coverage and to
further create the necessary infrastructure so as to reach the target of 700 million
telephones and 40 million broadband subscribers by 2012. For any effective planning, it
is necessary to quantify the likely share of Presently,

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Status of telecom in India

1 Total Number of Telephone subscribers (Wire line + 545.05

Wireless) (million)
A Rural(million) 180.71

B Urban (million) 344

2 Total number of Wireless subscribers (million) 315.31

A Rural(million) 90.76

B Urban (million) 224.55

3 Teledensity 30.64

A Rural(million) 12.74

b Urban (million) 72.47

4 Total Number of Telephone Exchanges of BSNL 1,06,518

a Rural 29723

b Urban 2,22,137

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Rural mobile phone target:

Unlike urban India, where mobile phones are considered personal communication
devices, and hence it is not unusual for a household to have more than one or two mobile
phones, in the villages, the mobile phone can at best be seen as a substitute for a fixed
phone and therefore, to start with, targeting one phone per household can be a safe bet.
With rural population expected to be 832 million, the maximum number of rural
subscribers on household basis can be expected to be around 180 million. There are
presently around 100 million rural subscribers and therefore balance of around 90-100
million rural subscribers needs to be acquired in the next two years.

As per the data submitted by the service providers, there are already 106518 rural BTS,
of which around 29723 are reported to be shared by more than one operator. After taking
into account the installation of mobile towers targeted in the Phase I & II scheme of
USOF, there will still be a requirement of an addition of around 11250 towers in the next
two years in order to reach the desired target of additional 90-100 million rural
Subscribers.

The Needs of Rural Indian Subscribers:

As discussed earlier, unlike the urban masses, for the rural population, voice alone
cannot be incentive enough to subscribe for a telephone connection even with the
availability of low cost handsets and all the recent tariff initiatives introduced by the
mobile service providers like lowering the entry barrier by offering the upfront discount
of Rs. 50 and Rs. 25 in air time quarterly for three quarters. The initial acquisition
including the activation expenditure incurred for a new connection is between Rs. 2000-
3000. Though purchasing power may not be an issue, however, until and unless the
villager is convinced that he is getting value for money, or the service being provided is
almost essential for him, he would not want to subscribe to the service. Mere

17
availability of voice connection amongst his friends and relatives and occasionally with
the Govt. officials in the Tehsil or Block Headquarters and Mandi may not be enough
incentive for him. The mobile handset has to become a multipurpose instrument
providing him entertainment, news, education, connectivity as well as a means to
promote his financial and business interests. Radio and Television are popular with rural
masses largely because they provide range of entertainment to the user. In the case of
Telephony too, there is a need to provide other value added services viz. education,
entertainment, tele-medicine, banking, IPTV etc. Some of these services can be provided
through text messaging. However, in order to make up for the slow pace of development
in the past and offer range of usage/application, it is necessary that both voice and
broadband go hand in hand as far as strategy for rural India are concerned. Taking
wireless as the preferred media to provide both the services, it can be safely assumed that
basic infrastructure (in the form of mobile towers and the backhaul connectivity of the
tower with BSC and the routers/servers) have been the main stumbling blocks for the
proliferation of these services. Fortunately, today the same infrastructure can serve the
major technologies providing all theseservices.

Along with the mobile phone and broadband connectivity, data based application
services meeting the daily requirement of the villager will also need to be developed.
Information can be a powerful economic leveler, and for many of the next 100 million
new subscribers, the mobile handset and broadband will be the best vehicle for accessing
it. In India the National Commodity & Derivatives Exchange, has launched a text–
messaging alert services for farmers to track agricultural and commodity prices.

Recently a pilot project called Fisher Friend project has been launched in Tamilnadu and
Pondicherry that enables fishing communities to earn their livelihood in a safe and
proactive manner by leveraging 3G CDMA wireless and ICT technologies. Vital, real-
time information is available to fishing communities anytime, anywhere at the press of a
button. The project provides access to a menu of services uniquely focused on fishing

18
communities including sophisticated technical information (e.g., sea wave heights,
satellite scan data about fish shoals) which is processed to make it usable to non-technical
users. Other, more ambitious projects are under way elsewhere. Internationally, to cite
an example, in China, last year, one of the operator, China Mobile Communications, a
wireless carrier, launched an integrated package that consisted of text-messaging
services, voice services, and an Internet portal for rural areas. Farmers and fishermen can
access the service to get weather forecasts, price information, and employment
opportunities outside the agricultural industry. By the end of October 2006, the service
had more than 12.7 million subscribers and daily traffic exceeding 1.6 million messages,
40,000 visits to the Internet portal and 20,000 voice calls18. New forms of mobile
banking and commerce are the most obvious candidates to emerge in this realm. Rural
India is primarily a cash economy because majority doesn’t have bank accounts or access
to other payment methods, the mobile handset can help make sophisticated banking and
payment services available.

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 VARIOUS TELECOM PLAYERS IN INDIA

AIRTEL

INTRODUCTION

Bharti Airtel, formerly known as Bharti Tele-Ventures LTD (BTVL) is India's largest
and world's third largest cellular service provider with more than 82 million subscribers
as of December 2008. It also offers fixed line services and broadband services.

It offers its TELECOM services under the Airtel brand and is headed by Sunil Mittal.

Airtel comes to you from Bharti Airtel Limited, India’s largest integrated and the first
private telecom services provider with a footprint in all the 23 telecom circles.

Bharti Airtel since its inception has been at the forefront of technology and has steered
the course of the telecom sector in the country with its world class products and services.
The businesses at Bharti Airtel have been structured into three individual strategic
business units (SBU’s) - Mobile Services, Airtel Telemedia Services & Enterprise
Services. The mobile business provides mobile & fixed wireless services using GSM
technology across 23 telecom circles while the Airtel Telemedia Services business offers
broadband & telephone services in 95 cities and has recently launched India's best
Direct-to-Home (DTH) service, Airtel digital TV.

20
The Enterprise services provide end-to-end telecom solutions to corporate customers and
national & international long distance services to carriers. All these services are
provided under the Airtel brand.

The company also has a submarine cable landing station at Chennai, which connects the
submarine cable connecting Chennai and Singapore. The company provides end-to-end
data and enterprise services to the corporate customers through its nationwide fiber optic
backbone, last mile connectivity in fixed-line and mobile circles, VSATs, ISP and
international bandwidth access through the gateways and landing station. SingTel owns
over 30% of the Bharti Telecom.

Vodafone is also a shareholder of Airtel with 4% of the shares. Thus making it a sister
company of the brand.

Subscribers in Punjab - 4656941

In 2009 Airtel is launched in Srilanka also.

The total is 124619205 or 30.55% of the total 407914988 mobile connections in

India till November 2008.

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 VODAFONE ESSAR

Vodafone Essar in India is a subsidiary of Vodafone Group Plc and commenced

operations in 1994 when its predecessor Hutchison Telecom acquired the cellular license
for Mumbai. Vodafone Essar now has operations in 22 circles with over 65.92 million
customers. Over the years, Vodafone Essar, under the Hutch brand, has been named the
‘Most Respected Telecom Company’, the ‘Best Mobile Service in the country’ and the
‘Most Creative and Most Effective Advertiser of the Year’.

Vodafone is the world’s leading international mobile communications company. It

currently has equity interests in 27 countries across 5 continents and 40 partner networks
with over 289 million proportionate customers worldwide. Vodafone has partnered with
the Essar Group as its principal joint venture partner for the Indian market.

Essar Global Limited (EGL) is a diversified business group spanning the manufacturing
and services sectors of Steel, Energy, Power, Communications, Shipping & Logistics,
and Projects. The group has operations and investments in India, Canada, USA, Africa,
the Middle East, the Caribbean and South East Asia and employs 30,000 people
worldwide.

Subscribers in Punjab – 3024403

22
Vodafone Essar is owned by Vodafone 52%, Essar Group 33%, and other Indian
nationals, 15%.

INTRODUCTION

A DREAM COME TRUE

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

It was with this belief in mind that Reliance Communications (formerly Reliance
Infocomm) started laying 60,000 route kilometres of a pan-India fibre optic backbone.
This backbone was commissioned on 28 December 2002, the auspicious occasion of
Dhirubhai’s 70th birthday, though sadly after his unexpected demise on 6 July 2002

Reliance Communications (formerly Reliance Infocomm), along with Reliance

Telecom and Flag Telecom, is part of Reliance Communications Ventures (RCoVL). It is
an Indian telecommunications company. According to National Stock Exchange data,
Anil Dhirubhai Ambani controls 66.77 per cent of the company, which accounts for more
than 1.36 billion shares. It is the flagship company of the Reliance-Anil Dhirubhai

23
Ambani Group, comprising of power (Reliance Energy), financial services (Reliance
Capital) and telecom initiatives of the Reliance ADAG. It uses CDMA2000 1x
technology for its existing CDMA mobile services, and GSM-900/GSM-1800 technology
for its existing/newly launched GSM services.

RelCom is also into Wireline Business throughout India and has the largest OFC
backbone architecture [roughly 110,000 km] in the country.

Reliance Communications has interests in Direct To Home (DTH) TV also, known as

"Big TV". It plans to launch its DTH business by July 2008. Once launched, RelCom
will have presence across all B2C communications channel in one of the fastest growing
markets in the world.

IDEA Cellular Ltd

IDEA Cellular Ltd., a leading telecom services provider, made its entry into Punjab by
formally unveiling its logo and brand identity at a function here today.

As part of its growth strategy, IDEA Cellular Ltd. had recently acquired Spice
Communications paving its entry into Punjab. IDEA will build on the 23 lakh strong
subscriber base of Punjab's oldest mobile network, and will introduce its complete range
of mobile telephony products and services for existing subscribers, and other mobile
users and intenders in the state.

24
The IDEA logo in yellow, which symbolizes strength, vibrancy and vitality, will be seen
across the rural and urban landscape of Punjab, starting today. With this launch, IDEA
now covers over 80% of the telephony potential of the country, and is the 3rd largest
private GSM player with over 36 million subscribers. IDEA Cellular is part of the
Aditya Birla Group and is India's fastest growing mobile service provider.

The IDEA network in Punjab covers over 10,000 towns and villages, operating on the
highly efficient 900 Mhz GSM frequency, riding on a next generation switching
network, with 2.75G capabilities and EDGE services. IDEA aims to provide superior
connectivity to mobile users, with a network of over 2500 cell sites in rural and urban
Punjab.

With the launch of IDEA in Punjab, the brand identity will now permeate all forms of
external and internal communication synergistically across its various telecom functions.

About IDEA Cellular Limited

Idea Cellular is a leading GSM mobile service operator with pan India licenses. With a
customer base of over 36 million in 15 service areas, operations are soon expected to
start in Orissa and Tamil Nadu—the first steps in providing pan India services covering
over 90% of India’s telephony potential.

IDEA Cellular is part of the Aditya Birla Group, India’s first truly multinational
corporation. The group operates in 25 countries, and is anchored by over 100,000
employees belonging to 25 nationalities.

25
BSNL

Bharat Sanchar Nigam Ltd. formed in October, 2000, is World's 7th largest
Telecommunications Company providing comprehensive range of telecom services in
India: Wireline, CDMA mobile, GSM Mobile, Internet, Broadband, Carrier service, IN
Services etc. Within a span of five years it has become one of the largest public sector
unit in India.

BSNL has installed Quality Telecom Network in the country and now focusing on
improving it, expanding the network, introducing new telecom services with ICT
applications in villages and wining customer's confidence. Today, it has about 47.3
million line basic telephone capacity, 4 million WLL capacity, 20.1 Million GSM
Capacity, more than 37382 fixed exchanges, 18000 BTS, 287 Satellite Stations,
480196 Rkm of OFC Cable, 63730 Rkm of Microwave Network connecting 602
Districts, 7330 cities/towns and 5.5 Lakhs villages.

26
BSNL is numero uno operator of India in all services in its license area. The company
offers vide ranging & most transparent tariff schemes designed to suite every customer.
BSNL cellular service, CellOne, has more than 17.8 million cellular customers, garnering
24 percent of all mobile users as its subscribers. That means that almost every fourth
mobile user in the country has a BSNL connection. In basic services, BSNL is miles
ahead of its rivals, with 35.1 million Basic Phone subscribers i.e. 85 per cent share of
the subscriber base and 92 percent share in revenue terms.

BSNL plans to expand its customer base from present 47 millions lines to 125 million
lines by December 2007 and infrastructure investment plan to the tune of Rs. 733 crores
(US$ 16.67 million) in the next three years.

The turnover, nationwide coverage, reach, comprehensive range of telecom services and
the desire to excel has made BSNL the No. 1 Telecom Company of India.

MARKET SHARE OF VARIOUS OPERATORS

Group Company wise % market share - Feb'2010

Sl. No. Name of Company Total Sub Figures % Market Share

1 Bharti Airtel 124619205 30.55%

2 Vodafone Essar 97229874 23.84%

3 BSNL 61004235 14.96%

4 IDEA 62143629 15.36%

27
 5 Reliance Telecom 16311206 4.00%

ABOUT TRAI (The Telecom Regulatory Authority of India)

The Telecom Regulatory Authority of India Act, 1997, as amended

vide the Telecom Regulatory Authority of India (Amendment) Act,
000, specifies that the Authority shall consist of a Chairperson and not
more than two whole-time Members and not more than two part-time
Members.

TRAI's mission is to create and nurture conditions for growth of telecommunications in

the country in a manner and at a pace which will enable India to play a leading role in
emerging global information society.

One of the main objectives of TRAI is to provide a fair and transparent policy
environment which promotes a level playing field and facilitates fair competition.

In pursuance of above objective TRAI has issued from time to time a large number of
regulations, orders and directives to deal with issues coming before it and provided the
required direction to the evolution of Indian telecom market from a Government owned
monopoly to a multi operator multi service open competitive market.

The directions, orders and regulations issued cover a wide range of subjects including
tariff, interconnection and quality of service as well as governance of the Authority.

28
 Chapter-2

REVIEW
OF
LITEARTURE

29
 REVIEW OF LITRATURE

B. Anckar D. D'Incau(accessed 2008), stated that “ Although little is known about

consumers' attitudes towards wireless marketing channels, many organizations are today
making considerable investments to take advantage of the new business possibilities
offered by wireless technologies - encouraged by optimistic, yet contradictory forecast
on the future volume of m-commerce. This paper highlights the importance of setting
out from the consumer perspective when developing m-commerce strategies, proposing
an analytical framework that can be used to assess whether, and in what ways, specific
mobile services are likely to offer added value for wireless Internet users. The paper
reports on a national consumer survey conducted to investigate the Finnish consumers'
willingness to use a number of initial mobile services, and to investigate whether
consumers recognize the value offered by these applications. The results indicate a
rather low willingness to use mobile services in general, but an exceptionally high
willingness to use certain applications. The results do not, however, support the
supposition that m-commerce is likely to increase the overall volume of Internet
commerce significantly by penetrating into untapped markets (non-PC users).”

Shailaja VR (May 15, 2007) studied the Mobile phone connections in India will reach
600 million in five years time as handsets and tariffs become more affordable for the
urban population, according to a new study published today by the Centre for Telecoms
Research (CTR), London The report expects urban populations of India to reach high
levels of mobile phone saturation in five years time, to the extent where many phone

30
users will have two or more handset connections. A large portion of this growth will arise
from pre-paid connections, driven by the increasing affordability of handsets and tariffs
amongst India's lower middle classes. "The phenomenal growth in the Indian mobile
phone market has largely been driven by urban consumption. We expect this to continue
with urban geographies achieving saturation levels similar to current Western European
markets in the next five years. Mobile connections in rural geographies will be
constrained by coverage of network infrastructure and affordability of handsets which
will limit consumption to no more than 150 million by 2011," said Raj Modi, Research
Director at Centre for Telecoms Research.

Tobias Kollmann (2004) did a research, attitude, adoption or acceptance measuring the
market success of telecommunication and multimedia technology. Frequently, the term
“acceptance" has been used in consumer marketing for an evaluation of the sales/ market
success of products. On the basis of reflections considering the market success of
telecommunication and multimedia systems (TC/MM-systems), a clearer distinction of
the term is evaluated and an alternative construct of acceptance presented. On this basis,
it is intended to empirically demonstrate an improved measurement and prognosis of the
success of TC/MM-systems, using a comparative structure model

Shailaja VR (May 15, 2007) studied the GSM-based cellular industry has added over 41
lakh subscribers in April with Bharti Airtel capturing 30.97 per cent of the market share.
With this, the all-India GSM subscriber base has touched 12.55 crore at the end of April
2007 compared to 12.14 crore at the end of March 2007, reflecting a growth rate of 3.40
per cent, the Cellular Operators Association of India (COAI) said in a statement. CDMA
mobile figures are yet to be out. In April, the cellular subscriber base of Bharti touched
3.88 crore with additions of 17.51 lakh users, followed by BSNL at 2.77 crore with a
market share of 22.10 per cent and additions of 3.26 lakh subscribers.Hutch-Essar has
2.77 crore subscribers, taking its market share to 22.06 per cent and Idea with a market
share of 11.60 per cent has 1.45 crore subscribers in April. Hutch-Essar added 12.61 lakh
subscribers in the month of April, while Idea added 5.52 lakh mobile users in the same
month. MTNL's GSM subscriber base in Delhi and Mumbai touched 24.83 lakh, while
Spice Telecom has over 28 lakh subscribers. Aircel's user base in April stood at 59.27
lakh, followed by Reliance Telecom's 43.47 lakh subscribers.

31
 Young B Choi, Faye P. Teer, Nirvay H. Mehta (2006) discussed International
telecommunications service management. They discussed the importance of high-quality
telecommunication service management and discussed the standards used in international
telecommunications service management. Telecommunication service management and
standards are tightly coupled with each other as better standards result in better service
management. This study discussed the importance of high-quality telecommunication
service management and discussed the standards used in international telecommunication
service management. Telecommunication service management and standards are tightly
coupled with each other as better standards result in better service management. The
study further concluded that the major standardization bodies that are responsible for
creating the technical specifications of major telecommunication service management
standards are ITU-T, Telemanagement Forum (TM Forum) and international
Organization for Standardization.

G. Dhananjayan (2005) did a case study on mobile users of Punjab and concluded that
despite the presence of only four mobile operators in Punjab (against six in most of other
states), due to aggressive market expansion and segmentation strategy followed by two
key operators (Airtel and Spice), the total mobile population crossed 3.2 million by
October 2004 for a population of just 24.35 million, thus achieving a penetration level of
a whopping 13%. Mostwhich are industrially advanced had just 6% mobile penetration,
clearly illustrating the lead achieved by Punjab.

32
Chapter-3

33
 RESEARCH
METHODOLOG
Y

34
RESEARCH METHODOLOGY

Research methodology is a way to systematically solve the research problem. The

research methodology included various methods and techniques for conducting a
research. “Marketing Research is a systematic design, collection, analysis, and reporting
of data and finding relevant solution to a specific marketing situation or problem.”
Sciences define research as “ the manipulation of things, concepts or symbols for the
purpose of generalizing to extend, correct or verify knowledge, whether that knowledge
aids in construction of theory or in practice of an art.”

Research is thus, an original contribution to the existing stock of knowledge marketing

for its advancement, the purpose of research is to discover answers to the questions
through the application of scientific procedure.
My research project has a specified framework for collecting the data in an effective
manner. Such framework is called “Research Design”. The research process which was
followed by me consisted following steps.

3.1 Defining the problem & Research Objectives

It is said, “A problem well defined is half solved”. The step is to define the project under
study and deciding the research objective. The definition of problem includes A study of
telecom service in rural sector of Punjab.

Objectives

 To study the awareness level of Value Added Services of Rural consumer

 Rating of factors which affect the selection of the service provider
 To study the consumer switching and retention behaviour

35
  To study the impact of advertisement and brand building in the telecom sector in
the rural areas
3.2 Developing the Research Plan

The second stage of research calls for developing the efficient plan for gathering the
needed information. Designing a research plan calls for decision on the data sources,
research approach, research instruments, sampling plan and contacts methods. The
research is descriptive in nature and is aimed at analysing the rural people of Punjab how
they perceive the different mobile services and what factor influence them to make
choice of service operator.

The development of Research plan has the following Steps:

a.) Data Sources

Two types of data were taken into consideration i.e. Secondary data and Primary data.
My major emphasis was on gathering the primary data. The secondary data has been
used to make things more clear.

i. Primary Data: Direct collection of data from the source of information,

including questionnaire.

ii. Secondary Data: Indirect collection of data from sources containing past or
recent information from TRAI, magazines and journals etc.

3.3 Research Approach

Surveys are best suited for Descriptive Research. Surveys are undertaken to learn
about people’s knowledge, beliefs, preferences, satisfactions and so on and to
measure these magnitudes in the general public. Therefore I have done this Survey for
the Descriptive Research Process.

36
3.4 Research Instrument

A structured questionnaire was constructed for my survey. A Questionnaire

consisting of a set of questions was presented to respondents for their answers.

a.) Sampling Plan

The sampling plan calls for the following decisions.

i. Sampling unit: Who is to be surveyed?

The target population must be defined that has to be sampled. It is necessary so as to
develop a sampling frame so that everyone in the target population has an equal
chance of being sampled. The sampling unit of this project is rural area of Nabha,
Mohali and Patiala

ii. Sample Size: How many people have to be surveyed?

The sample consisted of 50 respondents. The sample was drawn from 50 rural people
having different educational qualifications, income and age group. Mainly all
respondent are Male. The selection of the respondents was done on the basis of
simple random sampling. The sample was drawn from people having different
educational qualifications, occupation and age groups.

iii. Contact Methods

Once the sampling plan has been determined, the question is how the subject should
be contracted i.e. by telephone or personal interview. Here in this survey, I have
contacted the respondents through personal interviews and telephonic interview.

iv. Scope of the study

The research work was completed within a time frame of four weeks.

3.5 Collecting the Information

37
The collection of data is a tedious task. For conducting any sort of research data was
needed. So for my research, there was plenty of primary data and for increasing the
validity of information collected, some books, journals, pamphlets, information about the
company were studied and taken into considerations. After this, I have collected the
information from the respondents with the help of questionnaire.

a.) Collection of Primary Data: Primary Data is the data collected from the
original source. In my survey and study, there was optimum availability of
primary data because every aspect was witnessed carefully at each point.
Questionnaire and personal interviews were the main instruments, which were
used for collecting primary data.

b.) Collection of Secondary Data: Secondary Data is the one which has already
been collected by someone else and some other person is using that information.
The source of secondary data was books and websites related to the company.
The competent staff of the company helped me a lot in providing information
about the company.

3.6 Analyze the Information

The next step is to extract the pertinent findings from the collected data. I have tabulated
the collected data and developed frequency distributions. Thus the whole data was
grouped aspect wise and was presented in tabular form. Thus, frequencies and
percentages were prepared to render impact of the study. Different statistical tools have
been used in the study. For e.g.: mean, standard deviation test, Chi-square test etc.

3.7 Presentation of Findings

This is the last and important step in the research process. The findings are presented in
the form of graphs, pie charts, conclusions, suggestions and recommendations after data
analysis.

38
Limitations of the Study

1) Due to paucity of time and resources a survey of full rural area of Punjab was not
possible hence only some part of it was undertaken for project study.

2) The possibility of respondent’s responses being biased cannot be ruled out.

3) Since a small sample was chosen so it may not be true representative of

population under study.

4) Most of the times people don’t provide appropriate information.

5) The survey was to be conducted in a limited span of time (4 weeks) which also
posed a limiting factor.

39
 Chapter-4
DATA ANALYSIS
AND
INTERPRETATIO
N

40
Respondent profile

Table 1

Demographic Characteristics
Characteristics No. of in %
Respondents
Total number of respondents 50 100
Age (1) 20-25 tears 24 48
(2) 25-30 years 10 20
(3) 30-35 years 4 8
(4) 35 & above 12 24
Educational (1) Up to Matric 13 26
qualification (2) Intermediate 11 22
(3) Graduates 17 34
(4) Post graduate 9 18
Income (1) Up to Rs. 5000 PM 18 36
(2) Rs. 5000-10000 PM 14 28
(3) Rs. 10000-15000 PM 12 24
(4) Rs. 15000 & above 6 12

The demographic data is presented in table indicates that the most of the respondents fall
in the age category of 20-25 years as it was indicted by 48% of respondent in the sample.
The respondents in the age group of 30-35 are less in number. And other age groups are
also shown in the table. Education profile of the respondents indicates the respondents are
graduates are more because of the area is select in which rural people are literate 34%
people are graduates but post graduates are less they are 18 %. People who are matric are
also in good number which consist of 26% and intermediate are 22 %. Rural people of
Punjab are mixed in educational profile all type of people can easily found in the Punjab.
Analysis also indicate that that the 36% of people are having income up to Rs. 5000.

41
Further 28 % of respondent having income between Rs. 5000-10000. 12% respondent
having income more than 15000. These are the demographic profile of the sample which
mainly having 3 characteristics. Male and female are not taken because in rural area it is
not very easy to take response from the women and also most of the rural household
women don’t have any mobile. So all the respondents are male only.

Connection type Respondent

Prepaid 44
Postpaid 6

Type of connection

Figure 1

Inference - the above table, it is indicated that most of people in rural area are using
prepaid connection which 44 out sample of 50.
The main reason behind it is that people are not able to pay monthly rent of postpaid and
other reason is that many respondent use mobile phone mainly for income and chote
recharge also influence people to use prepaid and prepaid is give update about the

42
balance about every call. So they can use in their limits. On the other hand their
perception about postpaid is that these are very costly and there is less transparency in
billing.

Service provider response Which service

Airtel 13 providers are used by
Vodafone 12 respondents?
Idea 8

BSNL 16
Figure 2
Reliance 1

Total 50

Information pertaining the mobile service operator used indicate that 16 respondent
having BSNL connection which contain 32% share in sample and which is the maximum

43
share in the sample. Airtel user are 13 respondent and Vodafone have 12 respondent
where idea contain 8 respondent but reliance contain only 1 respondent. People are using
BSNL most because the BSNL charges no weekly or daily rent for make the call rate
reduce. Airtel and Vodafone getting customer because they are providing life time
validity on prepaid.

Ques 2 purpose of having mobile phone

Table 2

purpose of having mobile phone

Purpose No. of 1n %
respondents

1 To be in touch with friends and 24 48

family

2 Business purpose 18 36

3 Advantages over land line 1 2

4 Adds to mobility 2 4

5 Convenience 4 8

6 For value added service 1 2

Total 50 100

44
An attempt was made to assess the purpose of possessing mobile phone from the
respondent. The received information indicates that most of the respondents maintain
mobile phone to be in touch with family and friends as it indicated by 48% of
respondents in the sample.
Business purpose cited at by 36% of respondents these are the mainly respondent who are
not having agriculture land and who are in the business related to agriculture and
respondent who have shops in rural area.
If we take advantage over landline it is only 1 respondent from the entire sample. The
main reason behind this is that most of the houses in rural area were without landline
when the mobile available at cheap price.
And the other factors are also less in percentage. The rural people use mobile because
they can easily to be in touch with their friends and family it gives them so much
satisfaction because now they can easily contact with their family members which was so
difficult in past.

To find out the usage and awareness level of value added services

Table indicates the usage and awareness level of VAS in rural area of Punjab. An attempt
was made to find out the awareness level but except SMS & Caller tune respondents has
no awareness about the GPRS, voicemail, MMS. They know some about news update etc
but the use it very rarely.

So an attempt was made to find out the degree of association between the usages levels of
SMS with the education qualification of respondent.

45
VAS Always often sometimes Rarely Never

SMS 10 10 15 7 8

GPRS 2 3 3 6 37

Caller tune 6 7 16 8 13

Voicemail 0 0 2 2 46

MMS 0 0 1 3 46

News update 1 0 1 15 33

VAS Always often sometimes Rarely Never

SMS 10 10 15 7 8

GPRS 2 3 3 6 37

Caller tune 6 7 16 8 13

Voicemail 0 0 2 2 46

MMS 0 0 1 3 46

News update 1 0 1 15 33

For this Chi-square test is being used

46
Null Hypothesis, H0 : O = E, SMS and education both are independent there is no
relation between both

Alternate Hypothesis, H1 or HA : O ≠ E, SMS and education both are dependent there is

relation between both

Table is giving the observed frequencies which is taken from the compiled data sheet of
the responses of respondent

Edu sms 1(never) 2(rarely) 3(sometimes) 4(often) 5(always)

1(Matric) 2 6 4 0 1 13

2(+2) 3 0 3 3 2 11

3(graduate) 3 1 5 3 5 17

4(P.G) 0 0 3 4 2 9

8 7 15 10 10 50

47
Observed Expected observed Expected

2 2.08 3 2.72

6 1.82 1 2.38

4 3.9 5 5.1

0 2.6 3 3.4

1 2.6 5 3.4

3 1.76 0 1.44

0 1.54 0 1.26

3 3.3 3 2.7

3 2.2 4 1.8

2 2.2 2 1.8

Yeast correction is being implemented here because most frequencies are less than 5 and
the formula is used
X2
= E (O-E-0.5) /E
2

, the calculated value of X 2 = 27.52 and the degree of freedom is given by

v = 12
Level of Significance = 0.05
Table value of X 2 for v = 12 and 5% level of significance is 21.026.

48
The calculated value of X 2 = 27.52 is greater than its critical value that is 21.026.

Inference: - Thus, Null Hypothesis is rejected and Alternate Hypothesis is accepted

which signifies that that the SMS and education both are dependent

Now the relationship between Caller tune and the age of respondent been checked
out with the help of Chi-square test

Null Hypothesis, H0 : O = E, Caller tune and age both are independent there is no
relation between both

Alternate Hypothesis, H1 or HA : O ≠ E, caller tune and age both are dependent there is
relation between both

Table is giving the observed frequencies which is taken from the compiled data sheet of
the responses of respondent

Age CT 1(never) 2(rarely) 3(sometimes) 4(often) 5(always)

20-25 years 4 5 6 4 4 23

25-30 years 1 1 5 3 1 11

30-35 years 1 1 2 0 0 4

35 and 8 2 1 0 1 12
above

14 9 14 7 6 50

Observed Expected Observed Expected

49
4 6.44 1 1.12

5 4.14 1 0.72

6 6.44 2 1.12

4 3.22 0 0.56

4 2.76 0 0.48

1 3.08 8 3.36

1 1.98 2 2.16

5 3.08 1 3.36

3 1.54 0 1.68

1 1.32 1 1.44

Yeast correction is being implemented here because most frequencies are less than 5 and
the formula is used
X2
= E (O-E-0.5) /E
2

, the calculated value of X 2 = 22.56 and the degree of freedom is given by

v = 12
Level of Significance = 0.05
Table value of X 2 for v = 12 and 5% level of significance is 21.026.

50
The calculated value of X 2 = 22.56 is greater than its critical value that is 21.026.

Inference: - Thus, Null Hypothesis is rejected and Alternate Hypothesis is accepted

which signifies that that the Caller tune and age both are dependent

For how much long are you using Mobile Services?

No. of years Response

Less than 1 year 5

1-2 years 10

2-3 years 8

3-4 years 6

4-5 years 8

5-6 years 13

Total 50

51
Due to this response we can make a approach that the people in rural area are using
mobile phones for long time. The maximum respondents are 13 who are using mobile
phone for 5-6 years. So it is clear that the awareness for the mobile phone in the rural
area is for long time back.

Switching behaviour

Reason for switching Respondents

Good plan 21

Stereotyping 04

Relationship 02

Bill Dispute 01

Never Switch 22

Total 50

52
Inference: if the people switch the service provider it is because of good plan. Otherwise
they stay with their connection.

Factor analysis Test

Factors influence opting for a Mobile Service Provider

1 Brand Image
2 Network
3 Tariffs
4 Value Added Services

53
5 Customer Care Services
6 Availability
7 Dealer considerations

Keys are allotted in the same sequence for factor analysis

SPSS is used for the factor analysis. And data reduction is applied.
After the test the following tables are for analysis.

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy.

.680

Bartlett's Test of Sphericity Approx. Chi-Square 73.701

df 21
Sig. .000

The value of KMO test is .680 which is > than .50. So we can apply factor analysis
Communalities

Initial Extraction
VAR00001 1.000 .706
VAR00002 1.000 .604
VAR00003 1.000 .938
VAR00004 1.000 .669
VAR00005 1.000 .582
VAR00006 1.000 .587
VAR00007 1.000 .838
Extraction Method: Principal Component Analysis.

54
Communalities table shows that the all the factors are taken care by the respondent while
purchasing.

Total Variance Explained

Initial Eigenvalues Extraction Sums of Squared Loadings Rotation Su

Component Total % of Variance Cumulative % Total % of Variance Cumulative % Total %
1 2.627 37.528 37.528 2.627 37.528 37.528 2.606
2 1.221 17.436 54.964 1.221 17.436 54.964 1.215
3 1.075 15.364 70.328 1.075 15.364 70.328 1.103
4 .835 11.924 82.253
5 .482 6.883 89.135
6 .394 5.621 94.757
7 .367 5.243 100.000
Extraction Method: Principal Component Analysis.

In this table mainly focus on the initial Eigenvalues the components those values are
greater than one are most important factors.

55
 Scree Plot

2.5

2.0
Eigenvalue

1.5

1.0

0.5

1 2 3 4 5 6 7

Component Number

Scree plot also shows that the first three factors are important factor

Inference: Though respondent taken care of all the factors but it mainly focuses on the 3
factor are Brand image, network & tariffs. While choosing any service provider.

56
Can you recall advertisement of any telecom service provider?

Company Response

Airtel 19

Vodafone 4

Idea 17

BSNL 8

Reliance 2

Total 50

From above response it found that the most recall advertisement is of Airtel and idea
which 38% & 34%. Reason behind why these type of response are:
Airtel: advertisement made by Airtel is simple. There is no complexity. And Airtel is
used by the many respondents.
Idea: Ideas currents ads are mainly in the rural context and so these ads are easily
recalled by the respondents.
BSNL: BSNL has great market share in rural market. So they can recall the ad.

57
Vodafone: Rural people is not able to relate with dog which is shown in their ad. That’s
why they have minimum recall.
Reliance: Reliance is mainly a CDMA player. So their ads don’t concentrate on rural
market.

Name the brand of Telecom Company which first comes to your mind?

Company Respondent

Idea 06

BSNL 13

Vodafone 09

Airtel 21

Reliance 01

Total 50

58
Inference: this attempt is made to find out the impact of brand building. Airtel is
consider as a good brand in the rural area. And the brand airtel comes in the mind of the
customer is airtel. Because airtel has also a social status in the rural area. The response
for airtel is 42% and BSNL which comes in mind because its call rates are not very high.
Idea and Vodafone are 12% & 18% respectively

59
Recommendations

The Advertisement which focus on the rural market is highly influential the rural people
because they can easily relate themselves with advertisement

• In the rural market Value Added Services are very rarely use and holds meagre
importance in the mind of rural consumer therefore company should not lay more
emphasis on the services for tapping rural market.

• Company shall emphasis on Brand image, network and tariff plans which are the
most important factors.

• A very large population is untapped which consists of women. The scope is large
for the Telecom companies there.

• The companies needs to change the perception of people regarding post-paid

connection as they feel there is no transparency in post-paid billing.

• Companies should give timely offers & schemes for existing customer as against
the offers in new connection so as to reduce the switching cost.

60
 •

Conclusion

Telecom industry is booming industry in India. There is huge scope for growth and
market development. There is still a very large portion of market untapped both in urban
and rural segment. The rural market is very large and indispensable. The companies need
to go cautiously in the rural market as the consumer behaviour and perceptions vary in
urban and rural market. A decisive step taken by a company in the rural area can prove to
be a competitive advantage for it.

There are different strategies for rural and urban market. For example in the rural market
a complex advertisement wont work, a simple and clear message is required. Also the
price considerations are much higher and world of mouth strategies are applicable. In the
competitive world like today every corner of the market needs to be browsed. One thing
is for sure that rural market will not remain untapped; it is just the matter of time.

61
BIBLIOGRAPHY

62
BIBLIOGRAPHY

Books
1. Karminder Ghuman(2008), Rural Marketing, Tata McGraw-Hill Publishing
Company, New Delhi
2. Naresh K. Malhotra (2007), Marketing Research, PHI
3. Kotler Phillip (2007), Marketing Management A South Asian Prospective, PHI
Websites
1. http://www.coai.in/statistics.php
2. http://www.bsnl.co.in
3. http://www.airtel.in/wps/wcm/connect/airtel.in/airtel.in
4. http://www.vodafone.in/Pages/index.aspx
5. http://www.rcom.co.in/webapp/Communications/rcom/index.jsp
6. http://www.ideacellular.com/IDEA.portal
7. http://www.emeraldinsight.com
8. http://www.trai.gov.in/StudyPapers_list_year.asp
Journal
1 The Icfai Jouranl of marketing Management, the Icfai University
2 Article of A. Raja, The Hindu

63
ANNEXURE

64
 QUESTIONNAIRE

Dear respondent
This questionnaire is a part of research study and the data collected will not be shared
to any other organization

Name: ______________
Age: (a) 20-25 years (b) 25-30 years
(C) 30-35 years (d) 35 & above

Education: (a) Matriculate (b) Intermediate

(C) Graduation (d) Postgraduate

Income: Upto Rs. 5000 5000 to 10000

10000 to 15000 15000 and above

1. Which mobile service provider are you using currently?

(a) Prepaid (b) Post paid

Airtel Vodafone Idea

BSNL Reliance Tata Indicom

2. Why do you need a Mobile?

To be in touch with friends & family Business Purpose

Advantageous over Landline Adds to Mobility

65
For Value Added Services Convenience

3. For how much long are you using Mobile Services? ___________

less than 1 year 1-2 years 2-3 years

3-4 years 4-5 years 5-6 years

4.Which of the value added services are you using currently?

VAS Always Often Sometimes Rarely Never

SMS
GPRS
Caller Tunes
Voicemail
MMS
News Updates
Jokes, Gurbani etc.

Others Specify______________

5. Which factors influence your decision opting for a Mobile Service Provider?

Factors Strongly Agree neutral Disagree Strongly

agree disagree
Brand Image
Network
Connectivity
Coverage
Tariff
Reliability
Value Added
Services
Ease of
availability

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Customer Care
Services
Roaming
transparency in
billing
dealer
consideration

6. Do you use value added services like (listen songs on 56152)after seeing
advertisement?

Yes No

7. Can you recall advertisement of any telecom service provider?

______________________________________________

8. Name the brand of Telecom Company which first comes to your mind?
_______________________________________________

9. Reasons for switching?

Good Plan Stereotyping

Relationship Bill Dispute

If any other reason, specify _____________

10. Have you ever retained your old number?

Yes No

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11. When you retain the number after that you find any problem?

Yes No

(Thanks for your cooperation )

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