m c‘

‘

In the early 1990s, the Indian government adopted a new economic

policy aimed at improving India's competitiveness in the global markets

and the rapid growth of exports. Key to achieving these goals was a

world-class telecom infrastructure.

In India, the telecom service areas are divided into four metros (New

Delhi, Mumbai, Chennai and Kolkatta) and 20 circles, which roughly

correspond to the states in India. The circles are further classified

under "A," "B" and "C," with the "A" circle being the most attractive and

"C" being the least attractive. The regulatory body at that time ² the

Department of Telecommunications (DOT) ² allocated two cellular

licenses for each metro and circle. Thirty-four licenses for GSM900

cellular services were auctioned to 22 firms in 1995. The first cellular

service was provided by, Modi Telstra in Kolkatta in August 1995. For

the auction, it was stipulated that no firm can win in more than one

metro, three circles or both. The circles of Jammu and Kashmir and

Andaman and Nicobar had no bidders, while West Bengal and Assam

had only one bidder each.

17
TRAI ordinance on 25 January 1997. The government decided to set
up TRAI to separate regulatory functions from policy formulation,
licensing and telecom operations. Prior to the creation of TRAI, these

functions were the sole responsibility of the DOT.

High license fees and excessive bids for the cellular licenses put

tremendous financial burden on the operators, diverting funds away

from network development and enhancements. As a result, by 1999

many operators failed to pay their license fees and were in danger of

having their licenses withdrawn. In March 1999, a new telecom policy

policy, the old fixed-licensing regime was to be replaced by a revenue-

sharing scheme whereby between 8-12 percent of cellular revenue

were to be paid to the government.

m m

 











Issues relating to unfavorable interconnect terms for private operators,

pass through income, intra circle long distance, spectrum availability

and allocation and the like remained unresolved for long periods.

20
Interconnect terms since rationalized, risks on pass through income to

DOT / BHARTI (Mahanagar Telecom Nigam Ltd.) resolved to the

satisfaction of all parties with changes in methodology / revenue

sharing, intra circle long distance allowed, spectrum availability cleared

with vacation of frequencies for usage by GSM operators.

Problems in Financial closures due to:

Licensing tenure of 10 years

Large up front cash requirements from promoters due to heavy

license fee burden in initial stages of deployment Asset based

financing approach by Indian Financial Institutions.

Licensing tenure increased from 10 to 20 years

Large up front cash requirements for license fee payments

mitigated with migration to revenue sharing mode allowing

promoters to deploy more capital for capital expenditure; project

financing being considered by most financial institutions.

Foreign ownership / change of partner limitations

Foreign ownership norms clarified, and change of partners allowed as

a matter of routine allowing ease of entry / exit - paves the way for full
control of businesses by foreign companies.

Inadequate growth of market / subscribers

Roadblocks spelt out earlier resulted in low market / subscriber growth,

but with corrective measures taken, market / subscriber base expected

to zoom

m  c  







 


 

 


The interconnection regime between cellular operators and fixed -line

operators is still biased against the former.

Despite the recent gains of the cellular industry, not everything is rosy.

The cellular penetration rate is still very low at 0.8 percent in a nation

of over one billion people.

In recent years, many foreign companies had pulled out from their

cellular joint ventures in India due to the difficult operating environment

and bureaucracy. In 1999 alone, Swisscom pulled out from Sterling

Cellular, Telstra from Modi Telstra and both the Telecom Organization

of Thailand and Jasmine International from JT Mobile. In 2000,

Telecom Malaysia sold its stake in Usha Martin Telecom, and both

Shinawatra of Thailand and Bezeq exited from Fascel. In June 2001,

British Telecom exited from Bharti Cellular. Bell South International has
also indicated its intention to pull out from Skycell Communications,

and Hong Kong-based Distacom is seeking to sell its stake in Spice

Communications. First Pacific's (based in Hong Kong) continued

commitment to Escotel is uncertain, and the former is reviewing

various options.

The string of sell-outs notwithstanding, there has been a merger and

acquisition wave sweeping across the Indian cellular industry in recent

years. Hong Kong-based Hutchison Whampoa, via Hutchison

Telecommunications (HK), acquired major stakes in Sterling Ce llular

(December 1999), Usha Martin Telecom (mid-2000) and Fascel

(September 2000). Through a partnership with local company, Kotak

Mahindra Finance, Hutchison Whampoa practically controls Fascel

and Usha Martin Telecom, thus circumventing the 49 percent limit on

foreign ownership in Indian cellular operators. Hutchison Whampoa is

also the controlling shareholder of Hutchison Max Telecom. Not to be

outdone, Bharti Enterprises ² another major cellular player ²

acquired control of JT Telecom, which was later renamed Bharti Mobile

(December 1999), and Skycell Communications renamed Bharti

Mobinet (August 2000). Bharti also acquired the Punjab license of

Essar and started operations, giving competition to the lone operator

there, Spice Communications. Going forward, Bharti is likely to merge

all its cellular companies into one entity.

Five companies together bid Rs16.3 billion to bag th e licenses for the

fourth operator slots in four metros and 13 circles. Bharti emerged as

the No. 1 bidder with eight new licenses, followed by Escotel with four,

Hutchison with three, and Reliance and Idea cellular with one each.

Bharti and Hutchison have already commenced operations in all the

circles while Idea is set to launch in Delhi. Escotel and Reliance have

not made any headway.

BHARTI, the third cellular operator for Delhi and Mumbai, started

services in March 2001. BSNL, as the third nationwide cellular

operator, launched services in Kolkatta and Bihar in January 2002.

This was followed by Tamil Nadu in July 2002. A nationwide launch

was scheduled for 2 October 2002. However, this has been postponed

until after mid October. Once BSNL rolls out its service, most telecom

circles will have four cellular operators. There will be tremendous

competitive pressure, which will result in lower tariffs. Future rate cuts

are expected, which will drive demand, together with falling handset

prices and the introduction of prepaid services.

In the midst of declining interest in technology stocks, Bharti came out

with its long-awaited initial public offering (IPO) in January 2002.

Leveraging on the success of its cellular service, the company got a

very good response from the primary market. The total size of the IPO

was 185 million shares at a floor price of Rs10. The issue was

oversubscribed by more than 2.5 times, netting Rs8.3 billion. This will

be used to fuel its investment in long -distance, basic and cellular

services.

As of October 2002, only BPL Mobile has launched commercial

general packet radio service (GPRS) in Mumbai. However, large-scale

uptake remains elusive. While both Bharti and Idea have GPRS -

enabled networks, there is caution on their part to launch the service.

With hardly any applications, the success of GPRS remains a

question.
 ‡ The entry of state-run operators like BSNL and BHARTI means

that prices will no longer be controlled, thus there is less chance

of a cartel being formed.

‡ Network coverage in terms of geographic spread and quality of

coverage is crucial especially for the business subscriber.

c
c ‡ The bigger the service provider's national presence, the better it
c
c is for businesses. On the roaming front, signing up with a
c
national operator is advantageous.

‡ Limited mobility wireless in local-loop services (by fixed network

service providers) will be a disadvantage for cellular operators in

the short term. Consequently, operators need to streamline their

customer relation activities and adopt aggressive subscriber

acquisition and retention strategies.

m

c‘ c
Established in 1985, Bharti has been a pioneering force in the telecom
sector. With many firsts and innovations to its credit, ranging from

being the first mobile service in Delhi, first private basic telephone

service provider in the country, first Indian company to provide

comprehensive telecom services outside India in Seychelles and first

private sector service provider to launch National Long Distance

Services in India. Bharti had approximately 3.21 million total customers

± nearly 2.88 million mobile and 334,000 fixed line customers.

Its services sector businesses include mobile operations in Andhra

Pradesh, Chennai, Delhi, Gujarat, Haryana, Himachal Pradesh,

Karnataka, Kerala, Kolkata, Madhya Pradesh circle, Maharashtra

circle, Mumbai, Punjab, Tamil Nadu and Uttar Pradesh (West) circle. In

addition, it also has a fixed-line operations in the states of Madhya

Pradesh and Chattisgarh, Haryana, Delhi, Karnataka and Tamil Nadu

and nationwide broadband and long distance networks.

Bharti has recently launched national long distance services by offering

data transmission services and voice transmission services for calls

originating and terminating on most of India's mobile networks.

The Company is also implementing a submarine cable project

connecting Chennai-Singapore for providing international bandwidth.

Bharti Enterprises also manufactures and exports telephone terminals

and cordless phones. Apart from being the l argest manufacturer of

telephone instruments, it is also the first telecom company to export its

products to the USA.

Bharti Tele-Ventures' strategic objective is

³to capitalise on the growth opportunities that the Company believes

are available in the Indian telecommunications market and consolidate

its position to be the leading integrated telecommunications services

provider in key markets in India, with a focus on providing mobile

services´.

The Company has developed the following strategies to achieve its

strategic objective:

‡ Focus on maximizing revenues and margins;

‡ Capture maximum telecommunications revenue potential with

minimum geographical coverage;

‡ Offer multiple telecommunications services to provide customers

with a "one-stop shop" solution;

‡ Position itself to tap data transmission opportunities and offer

advanced mobile data services;

‡ Focus on satisfying and retaining customers by ensuring high

level of customer satisfaction;

‡ Leverage strengths of its strategic and financial partners; and

‡ Emphasize on human resource development to achieve

operational efficiencies.
þ




Bharti Tele-Ventures current businesses include -

‡ Mobile services

‡ Fixed-line

‡ National and international long distance services

‡ VSAT, Internet services and network solutions

c 

Bharti Tele-Ventures believes that the following elements will

contribute to the Company's success as an integrated

telecommunication services provider in India and will provide the

Company with a solid foundation to execute its business strategy:

‡ Nationwide Footprint - approximately 92% of India's total mobile

subscribers resided in the Company's fifteen mobile circles.

These 15 circles collectively accounted for approximately 56% of

India's land mass;

‡ Focus on telecommunications to enable the Company to better

anticipate industry trends and capitalize on new

telecommunications-related business opportunities;

‡ The strong brand name recognition and a reputation for offering

high quality service to its customers;

‡ Quality management team with vision and proven execution

skills; and

‡ The Company's strong relationships with international strategic

and financial investors such as SingTel, Warburg Pincus,

International Finance Corporation, Asian Infrastructure Fund

Group and New York Life Insurance.

By that time, Bharti was already the leading cellular subscriber in Delhi

with a base of 3.77 lakh (it now has 1.2 million customers). And with

tariffs becoming more affordable ² as cell companies started cutting

prices ² it was time to expand the market.

How could Bharti leverage this leadership position down the value

chain? Surveys showed that the concept of leadership in the

customer¶s minds was also changing. Leadership did not mean

directing subordinates to execute orders but to work along with a team

to achieve common objectives ² it was, again, a relationship game

that needed to be reflected in the AirTel brand.

Also, a survey showed that 50 per cent of the new customers choose a

mobile phone brand mostly through word-of-mouth endorsements from

friends, family or colleagues. Thus, existing customers were an

important tool for market expansion and Bharti now focused on

building closer relationships with them.

That is precisely what the brand tried to achieve through its new

positioning under the AirTel ù 


 brand campaign.

This set of campaigns portrayed mobile users surrounded by caring

family members. Says Sachdev: ³The new campaign and positioning

was designed to highlight the relationship angle and make the brand
softer and more sensitive.´

As it looks to expand its cellular services nationwide ²to eight new

circles apart from the seven in which it already operates ² Bharti is

now realizing that there are new compulsions to rework the AirTel

brand, and a new exercise is being launched to this effect. Right now,

the company is unwilling to discuss the new positioning in detail. But

broadly, the focus is on positioning AirTel as a power brand with

numerous regional sub-brands reflecting customer needs in various

parts of the country.

If AirTel is becoming more humane and more sensitive as a brand,

Bharti has also understood that one common brand for all cellular

operations might not always work in urban markets that are now

getting increasingly saturated.

To bring in new customers, the company decided that it needed to

segment the market. One such experiment, launched last year, is

Youtopia, a brand aimed at the youth in the 14 to 19 age bracket and

for those who are ³young at heart´. With its earlier positioning, AirTel

was perceived as a brand for the well-heeled older customer; there

was nothing for younger people. With Youtopia, AirTel hoped to

reverse that.
In order to deliver the concept, AirTel offered rock bottom tariff rates

(25 paise for 30 seconds) at night to Youtopia customers ² a time

when they make the maximum number of calls. It also set up

merchandising exercises around the scheme ² like a special portal for

young people to buy things or bid for g oods.

The company is now looking at offering other services at affordable

prices to this segment which include music downloads on the mobile

and bundling SMS rates with normal calls to make it cheaper for young

people to use.

The other experiment that Bharti has worked on is to go in for product

segmentation through the Tango brand name. The brand was created

to offer mobile users Internet-interface services or what is known as

WAP (Wireless Application Protocol).

The idea was to bring Internet and mobile in perfect harmony. ³The

name was chosen from the popular movie title 


!"#$





!%& : basically, you need the two services to tango to offer

customers a new choice´, says Sachdev.

This, however, had less to do with the branding exercise as with

inefficiency of service (accusingly slow download speeds) and the

limited utility of WAP services.

43
Subsequently, the ads were withdrawn, but the company re-iterated

that the branding exercise could be revived because Tango will be the

brand to offer GPRS services ² or permanent Internet connectivity on

the mobile phone ² which AirTel is expected to launch soon.

c 

Perhaps the more ambitious experiment has been with !&' ² the

pre-paid card. The idea was to make the brand affordable, accessible

and, most importantly, feasible as a means of expanding the market

even faster.

44
! '($
'#
%
' $
!%)'%&
$ ! #&*+

First, brand building efforts in today¶s context have to be seen in a

more holistic manner. Delivering value on a sustained basis is perhaps

the most potent key to build a brand that lasts.

Unflinching orientation to customer needs is the second key success

factor. Customers (be it for industrial products or consumer goods and

services) across the world are more informed and, at the same time,

becoming more individualistic in their needs and far more demanding

with the passage of time.

Pro-active tracking of shifts in consumer behavior, anticipating

redefined or emerging customer needs, and then reacting in ³real -time´

are essential to attract and retain customer loyalty ² a key element of

creating brand equity in the present situation.

Customizing the product (and communication of its benefit) to meet the

specific needs of various consumer/customer sub-segments is the third

element in creating brand appreciation.

As far as allocation of time and financial resources are concerned, too

many companies mistakenly allocate a disproportionate amount on

mere advertising and promotion. This is not to say that advertising and
c

promotion are less relevant. On the contrary, with more choices and

higher media clutter, businesses need to budget for an increasingly

 


higher spend on their brand promotion but this has to be undertaken in

‡tandem
Beingwith
one ofenterprise-wide ³reengineering´
the largest companies in India theof the business
company has

philosophy
achievedanda core design,
degree of production,
focus in and
its delivery operations
core business of for
its the

product itself.
products.

The
‡ It positive spin
has a strong to name,
brand this argument is thatproducts
superior quality by firstandaddressing
an the

fundamentals, the enterprise

enviable distribution itself becomes more competitive. This
network.

can be the beginning of a virtuous cycle wherein brand equity

‡ It has a clear and well-defined organization structure and
continues to increase as the enterprise sustains delivery of an
limits of financial authority.
appropriate product or service at an ever increasing value.

‡ Increase in advertisement spends affect the company¶s

It is, however, crucial to note that in the years to come, not only will the
margins.
1.4.SWOT cost of building a regional or a national (or an international) brand will ANNALYSIS:

‡continue
The tocompanyµs bottom
rise but also line
the time falls
taken to dovictim
so willtobe the bloated
longer and willand

needhighly paid and

sustained workforce,
focusedwhich affects its margins.
efforts.





‡ Little efforts over the Advertising of products.

‡ Distribution channel is not accurately categorized.

‡ Premium priced products, hence can¶t compete in low price

 segment.

‡ No separate strategy for rural market.

 


‡ The company's financial performance can receive a major

boost from its cost reduction efforts.

‡ There is a lot of scope of product and market diversification.

‡ Exports of products will also have huge chances in the coming

years.

‡ Airtel¶s business has ample scope for gaining market share

from the unorganized sector. Rural penetration too holds vast

potential to bring about growth.



‡ The slowdown in the economy has restricted topline growth of

most FMCG majors and for Airtel also it will be difficult to

maintain historical growth rates in such a depressed scenario.

‡ Company¶s major raw materials are influenced by government

policies / controls as well as vagaries of the monsoons.

Fluctuations in the prices of raw materials would have

 significant impact on costs and margins of the company.
m  c þ
c
 c
‘c

The project is an extensive report on how the Airtel

company markets its strategies and how the company has been

able in tackling the present tough competition and how it is

cooping up by the allegations of the quality of its products. The

report begins with the history of the products and the

introduction of the Airtel company. This report also contains the

basic marketing strategies that are used by the Airtel company

of manufacturing process, technology, production policy,

advertising, collaboration, export scenario, future prospect and

government policies. The report includes some of the key salient

features of market trend issues.

In today¶s world of cutthroat fierce competition, it is very

essential to not only exist but also to excel in the market.

Today¶s market is enormously more complex. Hence forth, to

survive in the market, the company not only needs to maximize

its profit but also needs to satisfy its customers and should try to

build upon from there.

c
   cþ 
‘ c
c
c
1. To identify the difference in market performance of Airtel industry.
export scenario, future prospect and government policies.c

2. To study the market of Airtel Industry in big scale sector.

3. To compare various parameters of manufacturing process,

technology, production policy, advertising, collaboration,
2.RESEARCH METHODOLOGY:

Achieving accuracy in any research requires in depth study regarding the subject. As the prime
objective of the project is to compare Airtel with the existing competitors in the market and the
impact of WLL on Airtel, the research methodology adopted is basically based on primary data
via which the most recent and accurate piece of first hand information could be collected.
Secondary data has been used to support primary data wherever needed.


cc
cc
 c
c c
 
c
Vc Questionnaire Method
Vc Direct Interview Method and
Vc Observation Method

The main tool used was, the questionnaire method. Further direct interview method, where a
face-to-face formal interview was taken. Lastly observation method has been continuous with the
questionnaire method, as one continuously observes the surrounding environment he 13 works
in.




 cc

c
 c
c
cTo conduct this research the target population was the mobile users,
Who are using GSM technology.
cTarget geographic area. Sample size of 100 was taken.
cTo these 100 people a questionnaire was given, the questionnaire
was a combination of both open ended and closed ended questions.
cThe date during which questionnaires were filled.
cSome dealers were also interviewed to know their prospective.
Interviews with the managers of GSM service providers were also
conducted.
# Finally the collected data and information was analyzed and
compiled to arrive at the conclusion and recommendations given.




 
cc
cc
Used to obtain information on, Bharti¶s history, current issues, policies,
14 procedures etc, wherever required.
# Internet
# Magazines
# Newspapers
# Journals
# Bharti Circulars
# Bharti News Letters
ANNALYSIS AND FINDINGS:

‘ ‘ c c 
‘c

c c
c

The people who are in the age group of 21-28 years are the ones who are the maximum users of
mobile phones. This segment is the one which gives maximum business to the mobile operators.
This segment constitutes the young executives and other office going people. They are 65% of
the total
people who were interviewed. The next age group are the people who
are 28-35 years old. They are 20% of the total. They are those who
are at home or have small business units etc. And the next age group
is the youngest generation who are 15-21 years old. They are school
and college going students and carry mobile phones to flaunt. They are
15% of the total interviewed people.
c
c
 c
c

It shows that 55% of the total people interviewed are

working. So, these people are the ones who are the maximum users of
mobile phones. They are the young executives, managers, Tele -
callers etc. who require mobile for their official purposes. The next
category is the households, who are either housewives, small units
which operate from their homes etc. They are 20% of the whole . The
next segment is the students. They are 15% of the whole. And 10% of
the whole is a category who are the professionals.


cc c c
c

It is clearly proven that customer services at Airtel

seems poor. 60% of the people are dissatisfied with the customer
services provided by Airtel. They are the ones who have the maximum
share in the market but they are lagging behind in the customer
services. 10% of the people were fully dissatisfied with the customer
services of Airtel. This could leave an impact on the mind of the
consumer. He can even switch over his brand. 20% of the people
seemed partially satisfied with the customer services and only 10%
seem to be fully satisfied with Airtel¶s customer services, which is a
very small amount.

ccc
c

Cash cards seemed quite popular among the people interviewed. 85%
of the total mobile users were having cash card connections. This
means that the cash cards should be easily and readily available in the
local markets. Airtel should make sure that Magic is available in each
and every nook and corner of the market. 15% of the people were
having sim connections which is the regular bill.


c
c 
c

People on an average spend RS 500 per month as their mobile phone

expense. 64% people spend this amount. 24% people spend RS 300
per month as their monthly mobile expense. And the remaining 12%
had an expense more than RS 1000, they could the ones having sim
connections or having cash cards and having a lot of business calls on

c
c
c
c
c
c
c
 c þ
c c

c
c
c
c
mc


c  c c
c

WLL seemed to be a new word for many of the people. 45% of the
people were not at all aware of such a technology. So, in order to get
the answer for this question they were first explained the concept.
Only, 55% people knew what WLL is all about.
c


cc c
c
c

Reliance was the brand which was popular amongst the interviewed people. As Reliance had
done so much advertising and has it banners and hoarding spread all over Delhi. So, this could be
one the reasons of its popularity. Tata was hardly a known brand in this new field. Possibly,
because of less promotions done by them as compared to Reliance. On the basis of analysis of
the questionnaire I have found that the maximum no. of people who use mobile phones are in the
age group of 20 to 28. who are the young executives and other office goers. They spend a
maximum of RS. 500 as their mobile expense. There are more no. of prepared cards than post
paid cards. The mobile users want to spend money side by side than to spend money at the end of
the month on a big bill. Now when I compared Airtel with its competitor from the point of view
of the consumer I found that on the basis of Tariff plan, value added services and billing
accuracy Airtel is at par or ahead of its competitor but in the case of customer care and
availability they lag behind there competitors. As, Airtel has a hold in the market because it has
the maximum no. of connections, so it must improve upon it customer services. As far as WLL is
concerned people are aware about it but not many people are aware about Tata. They only Know
more about Reliance. People at this point of time are not interested to switch over from GSM to
WLL..
5.FINDINGS,SUGGESTIONS & CONCLUSIONS

SUGGESTIONS:
Following are the few suggestions to ‘
cfor improving
the market share and image of the products concerned.
c
m c
c
*Modification must be brought about in AIRTEL, in terms
of quality. Its demand should be increased.
c
 c  c
* The brands must be made available easily in, PCO &
general stores.
c

c
‘ c
*Company must undertake extensive promotional
activities like advertisements must be released in
different Medias to create brand awareness.
*Free samples should be distributed among the
prospects. Sales promotion tools like gifts, contests and
coupons must be given to retailers as well as customers
and prospects.
* Catalogues should be distributed among
customers.
 ‘ c
After analyzing the findings of the research, I can conclude that Airtel
lagged behind its competitors as far as customer service and
availability is concerned. The maximum no. of people who use the
mobile are in the age group of 20 to 28. Cash cards are the most
popular type of mobile connections, as they are consumer friendly and
recharging the connection is not a problem.
Maximum no. of people spend RS 500 on their connections. As Airtel
is the only company having the maximum no of mobile connections so
it must seriously look into the loop holes of the existing customer
service department.
As we know that now airtel has already launched its product with logo
³¶ Aisi azaadi aur kahan´¶ has already became popular in market. So
we can say that inspite of so many competitor in the market Airtel is
having a good position just because every time, it tries its best to
understand the need of its important customer.

c
c
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c
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þ‘þ‘ 
c
In this project report, while finalizing and for analyzing quality problem
in details the following Books, Magazines/Journals and Web Sites
have been referred. All the material detailed below provides effective
help and a guiding layout while designing this text report.
c


c

www.airtelworld.com
www.google.com
www.india.com
c
c
 
c

Airtel (2 July to 10 July 2004)

Airtel India page of HT paper (Thursday 1December 2004)
Cowards India (26 December to 4 Jan. 2004)

QUESTIONNAIRE