THEORETICAL PRESENTATION OF THE TOPIC

Significance of the present study : The corporate and the business world is always the back bone of any nation. So the telecom sector has always given its best to provide the same with the best available services to make the purpose futile. This report has been furnished to present the scenario of high increase in churning and the preventive measures that can be adopted to reduce it. Background of the present study : Making new customers was the major objective upto the last decade. But with the changing phase of globalization, the new concept of RETAINING OF CUSTOMERS is being looked into too. Hereby taking a leap ahead the present study is more focused to understand the needs of customers and reduce the presence of CHURN. Review of previous research studies in the relevant area of your research : CHURN MANAGEMENT was an important fact in the European nations. In the Indian scenario the fact was being known was left uncovered. But now in the new age of customer retention better acknowledgement to the fact is being given. Hereby previous researches are only obliging the fact of customer retention and not of CHURN MANAGEMENT. Scope and objectives of the present study : Overview of the fact that making a new customer is 5 times costlier than retaining a old customer the scope of CHURN MANAGEMENT is overwhelming and at the same time it supports better understanding of the customer and enables less wastage of companys funds for attracting new customers. Area and period of study : The area of research being conducted is Lucknow , the period being a complete 2 months.

Synopsis of the report This report includes a brief introduction of the BHARTI AIRTEL GROUP, wherein the process of its evolution as one of the major players of telecommunication has been discussed. At the same time the various world class facilities of the same have been discussed too. The contemptory fact of increasing customer switchovers and the unavoidable fact of increase in unsatisfied customers has also been laid upon in the research. A brief outline over the methodology of customer satisfaction has also been laid emphasis upon. This report is a work of texture to rebuilt the acknowledgement of complete customer satisfaction.

Objective of the Report The major objective of any report is to solve a research problem. Here the sensitive case of CHURN MANAGEMENT has been brought up. Also better alignment to customer satisfaction is also being given. At the same the report is an attempt to minimize the unproductive efforts being on part of the airtel authority.

CHAPTER II

COMPANY PROFILE AND INTRODUCTION

Company Profile
Sunil Bharti Mittal or SBM as he is called, has at the age of 43 created a Telecom Giant in India. It has risen from humble beginnings in 1970s as a bicycle parts manufacturer, knitwear and stainless steel utensils in Ludhiana, Punjab state. Together with other foreign companies he has raised $ 1.5 billion of which $ 800 million is still in the bank.

Bharti happens to be Indias premier telecom company in the field of telecom terminals and technology tie ups with world leaders like Siemens, Goldstar, Tatacom and Casio. It is the first company in India to export telephones to U.S.A and has finalized plans to manufacture GSM terminals in India. The success story of Bharti Enterprises can be acknowledged from the fact that Bharti has acquired 44% of stake of British Telecom, which was up till now one of the partners with Bharti Enterprises for $140.2 joint venture. The transaction was worth 100 million pounds. Bharti Enterprises controls about 20 % of the Total Telecom market in India. As he puts it , it was a mixture of Vision , good luck and hard work by a team of about 10 12 senior people. The early beginnings in 1985 were in manufacturing telephone handsets. They did not have the expertise to do telephone exchanges, jelly -filled cables had become a commodity and their capital investment was high. Bharti Tele-Ventures Limited was incorporated on July 7, 1995 for promoting investments in telecommunications services. Its subsidiaries operate telecom services across India. Bharti Tele-Ventures is India's leading private sector provider of telecommunications services based on a strong customer base consisting of approximately 11.50 million total

customers which constitute, approximately 10.66 million mobile and approximately 836,000 fixed line customers, as of January 31, 2005.

Bharti Teletech

Bharti Teletech deals with telecom equipment manufactering. Bharti teletech has 2 subsidiaries Siemens Telecom and Bharti Duraline. Siemens Telecom is a joint venture between the global giants Siemens AG and Bharti Telecom. This alliance has brought to the Indian market the unmatched technology of Siemens and the manufacturing strength of Bharti Telecom. Siemens Telecom markets its product under the brand names of Siemens and Beetel. The Siemens range of telephones include electronic push button phones, feature phones ans the latest GSM cellular phones. Beetels commitment to quality, value and durability has made it the largest selling cordless phone in India. Bharti Duraline Bharti Duraline is a translation of Bhartis commitment to serve the growing telecom market in India. This joint venture with Duraline Corp of U.S.A manufacture and markets high quality SILCORE TM HDPE telecom ducts. Duraline USA gas prestigious customers like AT&T, Lucent technologies, Sprint MCI, Ericsson, etc

Bharti Telecom

In the past few decades the telecom industry across the world has gone through a sea change and India has not been away from the technological revolution. Bharti Telecom the flagship company of Bharti Enterprises has continuously introduced world-class telecom products and services. From the introduction of push button telephones backing telephones to answering machines from cordless telephones to cellular services Bharti is breaking new grounds with host of new brands like Airtel and Beetel. Bharti Telecom has emerged as Indias finest Telecom Company. Incorporated in 1985 Bharti Telecom is one of the largest Telecom companies in the country. Bharti Telecom provides various basic /cellular services, Internet services and VSATs etc. through its several subsidiaries and joint ventures. The two subsidiaries of Bharti Telecom are Bharti Televenture and Bharti Telepatial. Bharti Televenture Bharti Televenture Ltd. was incorporated on 7th July 1995. BTVL has been floated by Bharti Telecom Ltd. as Telecom operator to hold equity stake and to wide management services to cellular and fixed line Telecom Projects in India.Bharti Televenture is a holding company for Bharti Cellular and Bharti Telenet.
8

Bharti Cellular Bharti Cellular Ltd offers cellular service under the brand name of Airtel. Bharti Telenet Bharti Telenet offers fixed line services in M.P. (Indore) and cellular services in H.P. the company the first private operator to provide fixed line services under the country. It launched its fixed lines services on 4th June 1998 in Indore, and as developed the customer based of over 35,000. The company as a market share of 80% in H.P. for its cellular services. Bharti Telespatial Bharti Telespatial provides Internet services and VSATs. It has gain two subsidiaries Bharti BT and Bharti BT Internet.

Bharti BT Bharti BT has a licensed to provide VSAT services in India. The

company is second largest service provider in the shared hub and fastest growing VSAT service provider in the country.

Identifying the core relevance of satellite communication, the joint venture is expanding the VSAT market through service leadership and product innovation, offering fast, secure and reliable telecom solutions for all times. BT helps its customers meet there short term goals and long term communications strategies.Taking advantage of its leading edge in technology, Bharti BT offers customized TDMA, VSAT solutions, PAMA services. The flexibility to integrate these services also enables the company to provide hybrid V-SAT services to meet the diverse requirement of the customers. Bharti BT Internet:- Bharti BT Internet has a licensed to provide Internet services in Mumbai, Delhi and Bangalore. The service became

operational from May 99 under the brand name Mantra On Line.

Year 1851

History Of Indian Telecom Industry First operational land lines were laid by the government near Calcutta (seat of British power)
10

1881 1883 1923 1932 1947

Telephone service introduced in India Merger with the postal system Formation of Indian Radio Telegraph Company (IRT) Merger of ETC and IRT into the Indian Radio and Cable Communication Company (IRCC) Nationalization of all foreign telecommunication companies to form the Posts, Telephone and Telegraph (PTT), a monopoly run by the government's Ministry of Communications Department of Telecommunications (DOT) established, an exclusive provider of domestic and long-distance service that would be its own regulator (separate from the postal system) Conversion of DOT into two wholly government-owned companies: the Videsh Sanchar Nigam Limited (VSNL) for international telecommunications and Mahanagar Telephone Nigam Limited (MTNL) for service in metropolitan areas. Telecom Regulatory Authority created.

1985

1986

1997

1999 Cellular Services are launched in India. New National Telecom Policy is adopted. 2000 DoT becomes a corporation, BSNL FROM PWD TO P&T

Like the Ocean that is made of tiny drops, the P&T had a slow and uneasy start. The sprawling Posts and Telegraphs Department, for instance, occupied a small corner of the public works department, in
11

1851.

Dr. William OShaughnessy who pioneered telegraph and

telephone in India belonged to the Public Works Department all through the experimental stage. A regular, separate department was opened around 1854 when telegraph facilities were thrown open to the public. The Telegraph Department during 1854-57 comprised a

Superintendent of Telegraphs, with three Deputy Superintendents at Bombay, Madras and Pegu in Burma. There were Inspectors at Indore, Agra, Kanpur and Banaras and an operating and maintenance staff. Dr. O'Shaughnessy was the first Superintendent of Electric Telegraphs in India and later became the first Director General. The IndoEuropean Telegraph Department, which later came to be known as the Overseas Communications, was administered by a Director-in-Chief whose headquarters was in London. On the 15th February, 1888, it was merged with the Director-General of the Indian Telegraph Department. It was decided that the administration reports of the two departments, Indian Telegraph and the Indo-European Department, should be separated so as to show how the finances of the country were affected by each unit. The operations of the two separate services, Post Office and Telegraph Department developed side by side. On the eve of World War I, in 1914, the next big administrative change came. The Postal Department and the Telegraph Department were amalgamated under a single Director-General. The process had started in 1912, but it was completed in 1914. During 1923-24, 152 questions relating to the Department were asked and answered in the

12

Indian Legislative Assembly. Posts and Telegraphs has always evoked a great deal of interest from law maker. A major reorganization of the department took place in April, 1925. The accounts of the Indian Posts and Telegraphs were reconstituted to examine the true fiscal profile of the department. The attempt was to find out the extent to which the department was imposing a burden on the taxpayers or bringing in revenue to the Exchequer, how far each of the four constituent branches of the department, the postal, telegraph, telephone and wireless were contributing towards this result. It was further examined whether the rates charged from the public for the various services were inadequate or excessive. The Posts and Telegraphs, like all public and private undertakings, was a victim of the universal financial and economic depression which crashed on the world in 1930. During 1931, numerous economy measures had to be introduced according to the advice of the Posts and Telegraphs SubCommittee to the Retrenchment Committee presided over by Sir Cowasjee Jehangir Jr. Naturally, the adoption of the various measures of retrenchment could not but have an adverse effect on the emoluments and interests of the personnel of the Department. From the beginning, P&T set up was run on welfare lines. Profit was not the motto. The annual report of the department for 1931 said "It is the accepted policy of the Government that the department should be so administered that there should be neither any substantial profit nor any substantial loss on its working under normal conditions. As has already been indicated, the achievement of this ideal has not proved

13

possible owing mainly to the exceptional economic and trade conditions of recent years. One of the main contributory causes was the revision and improvement of pay of the great bulk of the employees of the department in recent years. This was undertaken with the approval of and indeed under pressure by the Legislative Assembly. While the department is commonly spoken of as a 'commercial' one and though as far as possible it is guided by the commercial considerations in the regulation of its business, it must be realized that in many directions it is debarred from observing strict business principles. Many of the purposes which it is required to serve are unremunerative and notably, in matters relating to the employment and control of staff, the department is bound by a large volume of statutory and other rules, doubtless necessary for the regulation of a public service, but which in the aggregate involve many restrictions of a kind unknown to private commercial concerns. After the implementation of the Federal Financial Integration Scheme of 1st April, 1950, the administration of the entire network of telegraph and telephone systems of the nation, including those that previously existing in the former princely states became a major adventure. In 1950 the number of Telephone Exchanges absorbed from princely states was 196. These systems which were working with different degrees of efficiency could fit into the general telecommunication network. The installed capacity of these 196 exchanges was 13,362 lines with 11,296 working connections. Soon after the absorption, an attempt was made to improve their technical efficiency by replacing obsolete and unserviceable equipment and lending well-qualified and experienced staff. Simultaneously, isolated

14

exchanges were integrated with the general pool. The more complicated task was acquisition of the staff. Their final absorption into the different cadres of service in Posts and Telegraphs was a major step. FROM P& T TO DoT Till 31st December, 1984, the postal, telegraph and telephone services were managed by the Posts and Telegraphs Department. In January 1985, two separate Departments for the Posts and the Telecommunications were created. The accounts of the department, initially, were maintained by the Accountant General of the P&T. However, by April 1972, the telecommunications accounts were separated. Simultaneously the department also started preparing the balance sheet annually. With the takeover of the accounts from the audit and delegation of larger financial powers to the field units, internal Financial Advisers were posted to all the circles and units. DEPARTMENT OF TELECOMMUNICATIONS(DoT) The Telecommunication Board consisted of the Secretary

Telecommunications, who was the Chairman with Member (Finance), Member (Operations), Member (Development), Member (Personnel) and Member (Technology). The Telecom Commission was constituted in 1989. The Commission has the DoT Secretary as its Chairman with Member (Services), Member (Technology) and Member (Finance) as its full time members. The Secretary (Finance), Secretary (DoE), Secretary (Industries) and Secretary (Planning

15

Commission) are part time members of the Commission. The Department in 1986 reorganized the Telecommunication Circles with the Secondary Switching Areas as basic units. This was implemented in a phased manner. Bombay and Delhi Telephones were separated to create the new entity called Mahanagar Telephone Nigam Ltd. (MTNL). On 1st October 2000, Department created BSNL, a new entity to operate services in different parts of the country as a public sector unit.

Current Indian Telecom Scenario The Indian economy is on the path of resurgence. The gradual opening of up of the economy ensured steady growth even at a time when other countries were in the grip of massive slowdown. Progressive reforms such as the removal of restrictions on foreign investment and industrial deli censing are responsible for this growth. Tailoring the EXIM policy to promoter exports and aligning the import duties to meet WTO commitments further contributed to this development. This trend is expected to continue in the next 5 year driven by favorable business policy environment in terms of tax base, and reduce interest rates on borrowings.

16

Such structural changes have had a positive impact on the telecommunications sector and a compound annual growth rate (CAGR) of 13.42 per cent is estimated for 2002-2006. The future of the industry lies in the mainline and cellular segment and constant technological innovations such as Internet Protocol (IP)-based services. Revenues from voice services will experience sustained growth even as those from data services and expected to increase sharply due to a surge in usage. The Country Industry Forecast for the Indian telecom industry studies the country-specific factors such as politics, business policy ,and macroeconomics indicators that have an impact on this sector and its main segments.

Proactive Polices: Key to Future Growth 1. Indias move towards globalization, especially in the telecom sector, has to be driven by transparent policies and better market conditions to attract foreign investments. According to the report the recent police stance of opening of the international long distance segment and legalization of the internet telephony should result in huge investment in the industry. The government should ensure an environment conducive

17

to foreign participation by increasing the FDI limit and following transparent polices. 2. India is the most competitive telecom market in the world. The Telecom tariff in India is just 2 cents/minute as against 4 cents in China. This is something that's absolutely in favor of the Indian mobile industry. 3. The present telephone density in India is about 0.8 per hundred persons as against the world average of 10 per hundred persons. It is also lower than that of many developing countries of Asia like China (1.7), Pakistan (2), Malaysia (13) etc. There are about 8 million lines with a waiting list of about 2.5 million. Nearly 1.4 lakh villages, out of a total of 5,76,490 villages in the country, are covered by telephone services. There are more than 1 lakh public call offices in the urban areas.

18

19

India Strong fundamental

1. 2. 3. 4. 5. 6. Largest democracy in the world Separation of executive and judiciary. Well diversified industrial base. Dominant private sector. High standards of accounting and audit practices. Large & sophisticated financial architecture: 1. 2. 3. World class central banking system and robust banking industry. Transparent and mature currency market Robust capital markets.

7. World class IT & telecom infrastructure.

20

21

22

Objective of Airtel Bharti Airtel Limited, a part of Bharti Enterprises, is India's leading provider of telecommunications services. Airtel is the first private telecom provider to connect India in its entirety with the world's best technology. 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 worldclass products and services. Bharti Tele-Ventures' strategic objective is to capitalize on the growth opportunities 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. Company Profile

23

A snapshot Financial

24

Fact sheet

25

Name:

Bharti Airtel Limited

Provides mobile, broadband & (fixed corporate) line) and & Enterprise services to

Business Description telephone

Services(Carriers

Established Company Proportionate Revenue

July 07, 1995, as a Public Limited

Rs. 117,255 million (year ended 2006-Audited) Rs. 81,558 million (year ended March 31, 2005-Audited) As per Indian GAAP Accounts

March 31,

Proportionate EBITDA 31,

Rs. 42,250 million (year ended March 2006-Audited) Rs. 30,658 Million (year ended March 31, 2005-Audited) As per Indian GAAP Accounts

Shares in Issue

1,895,743,597 as at December 31, 2006

26

Listings

The Stock Exchange, Mumbai (BSE) The National Stock Exchange of India Limited

Market Capitalization 2007)

Market Capitalization (as on March 15, Approx Rs.1,380 billion Closing BSE share price = Rs. 727.75

Customer Base

35,440,406 GSM mobile and 1,819,083 Broadband & telephone (fixed line) customers (Status as at month ended February 28, 2007

Operational Network 23

Provides GSM mobile services in all the telecom circles in India, and Was the first private operator to have an all India

presence, Provides broadband (DSL) and telephone services (fixed line) in 94 cities in India. Registered Office Enterprise) Bharti Airtel Limited (A Bharti

27

Qutab

Ambience Road,

(at

Qutab

Minar),

Mehrauli

New Delhi - 110 030 Tel. No.: +91 11 4166 6000 Fax No.: +91 11 4166 6011/12

About Bharti Building Telecom... Building Relationships. 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, Seychelles provider to first and Indian first company private National to provide service Distance comprehensive telecom services outside India in sector Long launch

Services in India. Bharti Tele-Ventures Limited was incorporated on July 7, 1995 for promoting investments in telecommunications services. Its subsidiaries operate telecom services across India

28

Airtel are the first private telecom provider to connect India in its entirety with the world's best technology. 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

29

EVOLUTION OF TELECOM INDUSTRY

30

EVOLUTION OF CELLULAR INDUSTRY In 1991, Government of India (GOI) announced its intentions to

liberalize the telecommunication Industry. As part of the liberalization process, two licenses for Cellular

Services and one license for Basic Services to be awarded to the private sector for each telecom circle. In 1992, GOI invited bids from private players for operating

Cellular Services in the 4 metro circles. The licenses were to be awarded on the basis of a tender in which

the license fees had been announced beforehand and the selection was on the basis of services to the subscriber and rentals. Due to legal issues related to the awarding of the licenses, the

process got delayed and licenses to operate services in metro circles awarded in December 1994. the The Do T announced the National Telecom Policy, which set out objectives to increase the availability & quality of

telecommunications services in India by inviting the private sector into basic telecom services. The Objectives of NTP 94 were to: Ensure availability of telephones on demand as early as possible

31

 Achieve a telecom service that conforms to international standards Assist the manufacture and export of telecom equipment Protect national defense and security interests In January 1995, GOI invited bids for cellular services In 20 non-metro circles, categorizing them into A, B and C circles

based on geographic attractiveness and demographic size. 169 bids were received from 32 consortia for 18 circles In August 1995, the Do T placed a 3 circle cap on category and B bidding consortium

circles per

In September 1995, Bharti Cellular Ltd. launched Cellular Services in Delhi. Licenses were awarded in December 1995, with 2 Licenses per circle awarded to the 2 highest bidders.

New Telecom Policy 1999 Existing structure of a fixed License fee to be replaced by a

one-time entry fee and a revenue sharing agreement to be recommended by the TRAI.

32

 Strengthening of the TRAI through the separation of the Do Ts service provision functions from its policy and licencing functions. The DoT as service provider will be subject to the directions of the TRAI

and as the licensing authority will be required to seek TRAIs prior recommendation. Interconnectivity with service providers in different License areas to be announced as part of the structure for opening up national long distance-this will allow cellular operators to act as long distance carriers and provide a valuable upside. Cellular licensees will be allowed to directly interconnect with VSNL. This will provide cellular carriers with access to the valuable international long distance market Cellular licenses to be for a period of 20 years. Entry of MTNL/DOT as a service provider will be in a time bound manner and shall be based on the recommendations of the TRAI-entry of MTNL/Do T and other operators will be phased in giving the existing incumbents an advantage. Traditional Fixed Line penetration is low at 2.15% as on 31st March

2000.

33

High unsatisfied demand as reflected by Do T waitlists

13.9% of installed capacity as of 31st March 2000 Lowering of entry barriers for consumer Falling handset prices. Lowering of recurring charges Falling Airtime Tariff. Improved Accessibility Increased Rollout into newer circles. Growth in Cellular Subscriber base by 52% year on year. Large part from Prepaid.

Bharti Cellular Ltd An Introduction BCL is a company launched by well-established and reputed companies across the global with the remarkable track record in Telecom Industry, particularly with excellent knowledge of cellular network operations in UK, Sweden and Mauritius. Bharti Cellular Ltd was granted the license to provide cellular mobile telephone services in New Delhi by the DoT on 29th November 1994 on a non-exclusive for the next ten years. BCL is a customer oriented company, whose goal is to position itself in the market as a serious enterprising supplier of reliable, easily available mobile telephone services of high quality, thus promoting opportunities for the business community and allowing private users to enjoy efficient,
34

safe and cost effective mobile communication. Bharti has successfully accomplished this task over the last five years of operation with the help of its well-developed global systems for mobile communication.

THE EVOLUTION OF BCL

1992

Government invites bids for providing Cellular Mobile

Telephony Bharti Enterprises forms a joint venture with CGE, EMTEL, Millicom and MSI. UK BHARTI CELLULAR is born. 1993 Services in Bharti Cellular granted license to provide Mobile Phone Delhi and NCR, Ghaziabad, Faridabad, Guragaon, Noida

and Ballabgarh. Mar 1995 Aug15, 1995 Nov15, 1995 Delhi. Bookings for AirTel opened. Air Tel launches Cellular Services in Delhi. Cellular Services AIRTEL commercially launched in

35

Nov 1995

AirTel crosses 10000 customers one million-call mark. The first AirTel Connect opens in Delhi.

Sept 1996 200000 lines. Nov 1996 marks. Dec 1996 Jan 1997 April 1997 May 1997 Aug 15, 1998 Jan7, 1999

AirTel installs second Switch installed capacity reaches

AirTel crosses 50000 customers hundred million-call

Manual roaming launched. British Telecom joins hands with Bharti Cellular. Multi IMSI roaming launched. Mega Millennium Network launched. Smart roaming facilities launched. IN Network commissioned; Bharti launches Magic prepaid card.

Dec 1999 June 2000 telecom. July 2001 July 9, 2001

Smart Net facilities launched. Bharti buys acquired 44% of stake of British

Worlds First SMS chat launched. Bharti bags cellular services in M.P. circle.

36

July 15, 2001 July 16, 2001

Bharti acquired Modis promoted spicecell. Bharti bags license for cellular operating in 5 new circles. With this BCL is the only cellular operator

to operate in all 4 metros (Delhi, Mumbai, Kolkata, Chennai) with its operationsin Bangalore &

Hyderabad too.

37

AirTel An Unflinched Brand AirTel, a part of Bharti Cellular Ltd., was conceived and nurtured under the adages of the Bharti and was born on the 14th day of November 1995, as the original licensee to provide Cellular Telephony to the customer base in the national capital New Delhi. Since its inception in 1995, Air Tel has never looked back and has changed the way true leaders of Delhi talk, communicate, work and indeed live. It has consistently been the leader with its undisputed

Power to keep in Touch and has been chalking up a number of first in its journey to commanding the heights of the cellular industry. Its belief to leverage the latest technologies and to deliver value to its customers was manifest within a span of a year and a half of its launch. It expanded its network with the installation of its second MSC (Mobile Switching Center) raising its capacity 5,00,000 lines, thereby becoming the first Cellular Operator in the country to have done so. This was further enhanced with the introduction of SDH (Synchronous Digital Hierarchy) and the CCS7 Signaling. The Bharti Group is pulling out all the stops to ensure that Air Tel maintains its leadership over Essar & Dolphin in the Delhi Market. This is crucial as Bharti Cellular has almost 3,25,000 subscribers, but with Hutchison taking a 49% stake in Essar promoted Sterling Cellular and planning to roll out its Orange Brand in the city, the gap between the two operators could narrow.

38

It has put at the disposal of its subscribers a wide array of convenience enhancing Value added Services like:

Web Message Smart Mail, Short Message Service, Fax Facility, Call Conferencing, Call Hold, Call Forwarding, Call Waiting, Calling Party line Identification and several other on line services

available to its customers. Wireless Application Protocol Service SMS Chat

39

As a duty to retain its valuable customer base, as well as efforts to bring the churned customers, AirTel has launched its AirTel Leadership Retention Program to provide various privileged facilities and discounts along with points earning. Air Tel ushered in anytime, anywhere, simple cellular telephony in Delhi with the launch of Magic Ready Cellular Card in January 1999. This competency of Magic Dalo, say Hello! Has further increased AirTel Power to keep in touch! It is based on the Intelligent Network and is compatible with all GSM handsets. Consequently for three years 1997, 1998 and 1999, AirTel has been voted as the Best Cellular Provider in the country and won the coveted Techies Award. Technology at AirTel The company uses GSM technology as prescribed by the DoT. The network has been supplied and installed on turnkey basis by Ericsson, Sweden, which is the world leader in cellular technology. The local office of Ericsson provides support and maintenance services. The

network audit is carried out from time to time association with Mobile System International, UK to ensure better coverage and speech quality. The billing system has been provided by SEMA, UK. The Intelligent Network (IN) installed from Ericsson, Sweden would enable the company to offer products like Virtual Private Network
40

(VPN) Solution, On Demand Services etc, apart from flexibility in tariffing. The company has almost 157 Base stations providing almost 1005 coverage in the service area and flat terrain in the city has initially helped the quick roll out in record time. The Company has 2 MSCs in the city, on in the Southeast and the other in NorthWest. The company has also laid 75km of OFC in the city to provide SDH rings to augment the existing base station network call handling capacity. The company was initially granted 4.5 MHz of frequency bandwidth by the DoT, which has now been increased o 6 MHz. Themarketing strategy at AirTel has always been to identify and attract a high usage subscriber base through a strong brand identity for the AirTel brand name and to associate the name with high quality customer service, a full range of network services and competitive pricing. A strong customer support through 24 hrs day helplines and operator assistance on matters ranging from features usage to billing queries. AirTel provides its customer service personnel with subscriber, product and billing information to enable them to respond promptly. The data generated from the exit interviews conducted with those subscribers who have terminated services, is used for the process to improve services where warranted. DISTRIBUTION

41

The company uses direct and indirect channels to market its services. The direct sales force caters to the corporate and to the existing high-end subscribers to provide maximum satisfaction. The franchisees are the exclusive AirTel shops throughout a particular license area. These

AirTel Connects sell SIM Cards and handsets, handles customers applications and customers queries and receive monthly payments, besides activation of new connections and recharge of SIM cards at the designated shops. The standardization of these AirTel Connects is down the line and this should provide a greater identity and magnify the AirTel footprint. This also reinforces the brand awareness and enhance the visibility of the brand throughout the city. With the opening up of Distributors and outlets (including 24 hour outlets), the Magic is now being sold as an FMCG, a product that is available within the walking distance from any customers office/home. AirTel in HP is expanding within the mighty Himalayas in its service areas and has launched its Smart Roam Service.

42

MILESTONES

Network;

First to launch cell to cell services in Delhi; First to launch commercial services; First to put through ten million calls mark; First network in India to cross the 50,000 customer base; First to offer a wide range of Value Added Services; First to offer roaming facility; First network to cross 1,50,000 customer base in India; First network to expand capacity and install the 2nd MSC; First to launch the Web Messaging Service; First to launch Mega Millennium Network, EFR Network, IN

First and till date only profitable Cellular Operations in India; First to launch IN Services in India;

43

Winner of the Techies Award (Conferred by Communications World) for being the best cellular Service provider in the country for three consecutive years in a row 1997, 1998 & 1999, 2000.

Winner of the Award for the most innovative HR Practices for the year 1999, awarded by Asia Pacific HRD Conclave, 2000, 2001 The Golden Peacock National Training Award for excellence in Training Practices 2000 Golden Peacock National Quality Award 2001

So the first choice of the Corporate Leaders. The first movers advantage after all gives the subscriber an easy way and power to keep in touch!

44

Customer Relationship Management

45

Customer Relationship Management: Customer Relationship Management or CRM is an old subject that has become a hot topic. Since the 1960s management gurus such as Peter Drucker and Levitt have been practicing CRM gospel, which can be simply summarized like this: The true business of every company is to make customers, keep customer and maximize customer profitability. This gospel was neglected until recently by most companies. Why? Because only now are improved and new technologies (databases, data mining, Internet etc) capable of tracking and managing customer profitability, behavior and satisfaction at a reasonable cost. CRM is a comprehensive approach which provides seamless integration of every area of business, that touches the customer namely marketing, sales, customs service and field support through integration of people, process of technology. In order to properly understand the concept of CRM we can simply put it in the form of following model.

46

Profit

Customer Focus

CRM itself is not a technology, but a process of gathering and retaining information about customers and their interaction with the company. Simply put, we can say CRM helps the organizations to analyze and understand the following: To understand whom its customer are

47

Helps an enterprise to enable its marketing department to identify

and target the best customers. Manage marketing campaigns with clear goals and objectives

and generate quality leads for the sales team. Understanding the formation of individualized relationship with

customer, with the aim of improving customer satisfaction and maximizing profits. To understand which points of contact (such as address, phone

and e-mail) are of interest to the enterprise, about its customer. Most importantly, identifying the most profitable customers,

and providing them with highest level of service.

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CHURN MANAGEMENT

49

Understanding

Churn

Management

and

Customer

Retention

in

Telecommunication Industry: Meaning of Churn: Churn in technological term refers to Defection of customers to the competitor. Churn is a very serious issue and more so for the cellular industry, where each time the subscriber picks up his Cellphone he generates revenue for his service provider. Hence it is of paramount importance that the valuable customers be prevented from exiting from the network and joining the competitor. Loss of customers has been accepted as the cost of doing business in all high technology industries. Churn Management: Churn management is the term used in telecom industry to describe the process of ensuring that profitable customers stay with the company. The problem confronting telecom management is that it is very difficult to determine with subscriber have the company and why. It is therefore more difficult to predict which customers are likely to leave the company, and more difficult still to device cost-effective incentives that will persuade likely Churners to stay. Churn Management helps the telecom companies to predict whether a given individual is likely to move to another service provider and to able to define the correct/appropriate actions to keep that profitable to customer.
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The cost of Churn to Telecos

Churn costs European and US Telecos close to US $ 4 billion each year the global cost of customer defection may well approach a staggering US $ 10 billion a year.

Studies within the cellular phone industry found that the company looses US $ 500,000 in Revenue for every 1% of customer it looses.

Cost of acquisition of the new customer is 5 times the cost of retaining the existing ones.

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Customer Retention and Churn Management at AirTel

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Customer Retention and Churn Management at Airtel

Churn is defined in context of BCL as Discontinuation of all services held by its subscriber. It has present rate of 3% in contract every month, where 60% of

the churn is a result of discrimination initiated by the operator. One of the first adapters and users of technology, Airtel has been using its customer data effectively to increase profit and customer base, reducing operating costs and acquire more customer. Presently the churn management at Airtel follows two methods: 1. 2. Prevention of voluntary churn Recovery from Involuntary churn

Prevention of Voluntary Churn is done by dedicated telecalling executives. Their role is primarily to understand customer concern solve this problems and facilitate continuation in contract, while customer are identified to churn. Recovery from Involuntary disconnected accounts is done by calling back customers and offering retention tools. reasons for non-payment of bills. While, analyzing customer

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Decreasing customer loyalty is an alarming issue for the service provider, for a decrease in the customer base does not only signify only the loss incurred in terms of revenue being generated from the customer using the provided services but also means an increase in expenses. Loss in revenue being earned from the air time used; Any discounts/waivers that had been given to the subscriber also adds to the loss; Under civilization of the existing capacity and infrastructure; Cost of acquisition of a new customer. (According to industry sources the cost of acquiring a new customer is 5 times the cost of retaining the existing ones.) Therefore customer has become on of the corner stones of the drive towards effective competition and improved financial performance applied on an ongoing and responsive basis. The importance to satisfy a target customer can be known from the fact that a service providers sale for each period comes from two groups: New Customers; Repeat Customers. Customer Retention is thus more important than Customer Attraction for it might cost sixteen times as much to bring the new customer to the same level of profitability as the lost customer.

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A highly satisfied thus: Stays loyal longer; Buys more as the company introduces new products and upgrades the existing products;

Talks favorably about the company and the Product/services provided by the company; Pays less attention to competing brands; Is less sensitive to price; Offers product/ service ideas to the company;

Costs less to serve than new customers as the

Transactions are routinized. Thus the analysis of the reasons of exit / churn should be monitored regularly so as to ascertain the major factors of satisfaction/dissatisfaction and thus ensure prompt rectification. Satisfaction is a function of perceived performance and expectations. Thus AirTel should aim for having a highly satisfied customer base so that the AirTel smile that the present day customer base of **** may continue for a very long period through the AirTels Power to keep in Touch. Those who are just

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satisfied find it easy to switch hence form a lesser percentage of the churned customer base. High satisfaction creates an emotional affinity with the brand and not just a rational preference. Thus a long lasting relationship can be established and sustained only through customer bonding.

REASONS OF CHURN AMONGST AIRTEL SUBSCRIBERS

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IDENTIFIED REASONS OF CHURN AMONGST AIRTEL SUBSCRIBERS

Customer Initiated SIM lost reported by the Customer; Handset lost reported by the Customer; Company changed / Transferred from; Change in company policy; Expensive for the Customer; Death of the Customer; No usage / Requirement for the Customer; Temporarily leaving Town; Permanently leaving Town; Leaving the country permanently; Change from post paid to pre paid plan; HUTCH Contract taken for Better Scheme; HUTCH Contract taken for Better Services; HUTCH Pre Paid taken;

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Air Tel Contract taken for Better Scheme; Contract taken for Better Scheme; AirTel Contract taken for Better Bill Plan; Requiring a change of existing Number; Unaware of the Safe Custody Scheme of AirTel; Income Tax and Regulatory Related.

Technical Related Poor STD / ISD Connectivity Congestion/Connectivity (Normal); Coverage Related Indoor; Coverage Related Outdoor; SIM / Hand Set Faulty; VAS Feature Failure (SMS, VMS, Fax & Data); VAS Advantages with Competitors; Poor Roaming Quality; Calls Dropping in a particular area of relevance;

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Voice clarity in call reception; Service related. Barring / Disconnection related; Collection Agent Delayed Transaction; Collection Agent behavior; Credit Card Updation Related; Credit Card Processing Related; Delay in Customer handling; Improper Customer handling At RCC / Lobby; Delayed Activation at AirTel; Unable to get across to Customer Care; Credit Limit Related; Dealers Wrong Commitments; Dealers Transactions Related; Delayed Bills; Discrepancy in Bills; Incorrect Bills;

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Pending Adjustments; Roaming Bills Related; Improper Customer Handling at Hotline; Delayed Complaint Resolution; Discrepancy not Resolved; Long Queue Time at the Customer Helplines;

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GRIEVANCES OF SOME CUSTOMERS

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Grievances of the Customers:

Name : Salman Rizvi Mobile: 9956318571 Problem: Faulty Sim, Customer cares Clients Version: He says he had a problem of faulty sim. This problem occurred twice with him. When he wanted to get it replaced he called a customer care number but was really hassalled by large queue time, and only after calling up for several times was his problem solved. Says Airtel are very commercial people. He has an Hutch connection now.

Name: Tarun bose Mobile: 9935645095 Problem: Roaming, customer care Clients version He said he had gone out of station, when his roaming was disconnected without any prior intimation, and when he did not have any outstanding also. He contacted Airtel but in vain no action was taken for a long time eventually he shifted to hutch.

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Name: shizu Mobile : 9935297414 Problem: Re-connection problem Clients version He said that whenever he was not able to pay the bill in time, he had to go through a lot of harassment to get it re-connected. It would generally take 5-6 days to get the number re-connected. He called up customer care where he says was behaved rudely by one of the executive. This

executive had promised him, that the number would be re-activated in 3 hours time. And when it didnt even happen for 1 day he decided

together number disconnected permanently.

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Research Methodology

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Research Methodology

Sample Size

: 200 : 120 (Involuntary Churn) : 80 (Voluntary Churn)

Sampling Method of Data Collection

: Random Sampling : Questionnaire Method

Data Sources: Primary Data was collected through personal interviews. Done with the churn customers the questionnaire was a good source of primary data. Secondary Data: - several magazines, newspapers, press monitors at AirTel and other secondary sources of data were referred. The Manuals in the organiazation were also consulted. Sampling Unit: Age on network 0-3 months 3-6 mths

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6-12 mths 1-2 years > 2 years Limit Limit 0 - <1000 Limit 1- 1000 3000 Limit 2 3000 6000 Limit 3 6000 13,000 Limit 4 - >13,000 Customer Class IB Self-Business IH Housewife IND Individual I1 Student BUS Business Class This sampling unit was identified from the list of churned customers procured from AirTel Retention Department. The Researcher made the telephonic calls to the customers who have left AirTel. The researcher, was also supposed to ask, these customers as to what other service provider have they shifted to now. The MTNL Numbers of customers were accessed from CABS by the researcher.
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After collecting the data the researcher analyzed it and presented the findings in the form of graphs, which are shown later in the report. Following parameters were taken into consideration: I. (a) (b) II. Technical problem Product Related Net work Related Serivce Related Customer Care Cost of using AirTel (Money, effort and time) Information learned/ heard

III.
IV. V.

An attempt has also been made to ascertain the loopholes in customer care services and to pin point the drawbacks through the following dimensions i.e: Large Queue time Discourteous Not Responsive

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Objective of the Project

The main objective of this project was to ascertain reasons of churn

among AirTel subscribers. The project also intends to highlight the various dimensions

involved in the decision of the customer to quit from the service provider. to. The project also presents an insight as to what as per the customer To find out what service provider have the churned customer gone

the service provider needs to do to prevent the churning of existing customers from its network.

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LIMITATIONS

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Limitations
1.

Since the feedback of the customers was done through telecalling

major limitation was unavailability of customers thus leading to highly low success rate. 2. Most of the customers were so furious that they refused to part

with any information 3. Time factor

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RECOMMENDATIONS

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Recommendations
1.

Airtel needs to improve a lot as far as network connectivity is

concerned both indoor and outdoor. Large number of respondents have complained both in prepaid as well as post paid category. 2. Another dominant reason for churning of customer is delay in

customer care. Hence for better customer satisfaction Air Tel needs to redeem the lacunae of Promptness in Customer Care. 3. Airtel should also do something about its queue time which

according to customers is a big problem leading greatly to their dissatisfaction. 4. Another very dominant reason for churning of customer is billing

related problems. According to the analysis many customers have faced the problem of wrong and over charged bills, which made them go through lots of harassment. 5. Airtel should also seriously look into the matter of delay in re-

activation.

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DATA ANALYSIS

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Analysis of the findings

Out of the population contacted for personal interviews, the 5 of

people who have given up with Cellular Telephony was very less amongst those who were still in the town. Those who have left the country or had a change over in their

work place could not be available for further information. The reasons of churn enumerated present a picture of the major

dimensions that led to the decision of leaving the network. The graphical representation of the results obtained after

carrying out the research present the quantitative analysis of the major dimensions. Out of the total population contacted i.e., 200; wherein 80 for

voluntary and 120 for involuntary churn only 30 could be contacted in voluntary churn and 70 in Involuntary churn. The rest of the population could not be contacted due to the following reasons. The % of responses against each reason has been indicated. Reasons reasons Wrong numbers 17% % of people identifying with these

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Nos not being picked Up / not responding Not available Out of Town Expired numbers 27% 14% 6% 36%

It is thus seen from above that out of 80 in voluntary only 30 and 120 in involuntary churn only 70 people could be available for response.

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voluntary

involuntary

80

120

This forms a major limitation to the study. The following are the reasons for voluntary churn as told by the sample population of 80. Customers, as to why they have left the services of Airtel. The % of responses against each parameter has been indicated.

Reasons Product Network Service Faulty sim card Connectivity

% Of respondents 2 9

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Drop Calls STD/ISD Service Connection Barred Overcharged Bills Faulty Billing Service gap Customer care Not responsive Discourteous Queue size Transfers Temporary Permanently Shifted to cash card High cost No. Changed Change in Billing plan Mobile not required Peer group influence

1 1 1 1 2 1 10 3 12 2 7 6 5 5 3 8 1

REASONS WITH THE PARAMETERS

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2 28

11 5

25

product customer care

network tranfers

services others

NETWORK PROBLEM

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1 1

Connectivity

drop calls

std/isd

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SERVICE PROBLEM

1 2

connection barred faulty billing

overcharged bill service gap

CUSTOMER CARE

80

10 12

Not responsive

Discourteous

Queue size

TRANSFERS

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Temporary

permanently

OTHERS PROBLEMS

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1 8

5 3 5

Shifted to cash card No changed Mobile not required

High cost Change in billing plan Peer group influence

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The following are the reasons for involuntary churn of the sample population of the 120 customers Reasons for involuntary them Shifted to cash card High-Unbilled Non Availability Policy probs Late Bills Wrong Bills Financial problems Time lapse No. Transferred Sim lost 5 5 8 5 10 25 35 8 5 14 Value of people identifying churn with

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REASONS FOR INVOLUNTRY CHURN

14 5 8

5 8 5 10

35

25

Shifted to cash card High unbilled Non-availability Policy probs Late bills Wrong bills Financial problems Time lapse No.transferred Sim lost

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The issues that prompted them to use the help lines were:

a) Enquiry for general information b) Enquiry for billing problems c) Information about specific schemes d) Guidance in using provided facilities Kind of Response met with at the customer care:-

a) Large Queue time b) Discourteous c) Not Responsive d) Told to get back, but never got Back Measures to bring the churned customers back to the Network / prevent the churn of existing customers. The following was the response to this last and open-ended question. These customers have put forward the following improve upon its services.

measures which would help Airtel to Better Customer Care Reduce tariff costs Provide free incoming calls

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 Roaming related issues to be resolved Do not require AirTel Cellular services anymore No response to the question

IMAGE
12.(a) Large Network Coverage
9% 21% 29%

41% Agree Dis agree Neither Agrees nor Disagrees Don't know

(b).Airtel cares about its customers

13% 46% 24% 17% Agree Neither agree nor Disagrees Disagree Don't know

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(c).Professional Organization
10% 19% 22%

49% Agree Disagree Neither agree nor Disagree Don't know

(d).Large Dealership Network

3% 26%

12%

59%

Agree

Disagree

Neither agree nor Disagree

Don't know

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CONCLUSION

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Conclusion
1. In the Varanasi the churn rate is minimum. 2. There is more demand of Airtel connection at every place. 3. The people must inform earlier before the disconnection for PEF. 4. The way of people handling is better than other city. 5. The relation between employees is good but it may be improved. 6. The overall process of retention is very effective. 7. The sprit of teamwork is good to solve the problem of customers. 8. Reliance and Idea is giving better competition to Airtel. The documentation for the salaried people is quite easy to complete as compared to Self-employed people.

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BIBLIOGRAPHY

91

www.airtelworld.com www.google.co.in www.economoicstimes.com www.bharti.com Research Metholodgy C.R.Kothari Marketing Management Philip Kotler

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ANNEXURE

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QUESTIONNAIRE
BACKGROUND/DECISION/PROCESS 1. Which of the following statements would best describe your current situation

related to AirTels cell phone services? a. b. c. card from Airtel. I no longer have a need for a cell phone connection. I am currently planning to purchase cellphone regular services from Hutch I am currently planning to purchase Magic cellphone pre-paid

2.

Next, I am going to read you a list of reasons why customers sometimes

(cancel/ stop using) some products and/or services. Please tell me, for each reason I mention, whether that reason applied in any way to your decision to stop subscribing to AirTel. a. b. One or more problems occurred that AirTel did not handle effectively You wanted more benefits, features, or quality than AirTel provided

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c. d. AirTel. e. f. 3.

The cost of using AirTel (including money, time and effort) was too high You decided to discontinue with Air Tel based on information you heard abut

Refused Dont know Now we would like your help in classifying the problem or problems you

experienced. For each problem I mention, please answer Yes if the problem applies to you, or no if it does not. a. Were there TEHNICAL problems (e.g., Handset/SIM card related or

NETWORK SERVICE related) that Air Tel failed to perform as promised? YES b. NO

Did the SERVICE provided by AirTel people fail to perform as promise? YES NO

c.

Did you have a specific need or request that AirTel could not or was not

willing to handle? YES d. NO

Did AirTels employees treat you poorly or rudely? YES NO

e.

Did some other type of problem happen that we did not mention yet? YES NO

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5. YOU SAID THERE WERE TECHNICAL PROBLEMS THAT AIRTEL FAILED TO PERFORM OR SOLVE AS PROMISED. WHICH OF THE

FOLLOWING PROBLEMS DID AIRTEL NOT HANDLE EFFECTIVELY? A. I. II. III. Product related Faulty handset provided by AirTel YES NO NO NO

Faulty SIM card provided by AirTel YES Any other Product related problems YES

B. Network related I. II. III. IV. Network connectivity Indoor coverage problem Outdoor coverage problem Drop calls V. VI. VII. Voice clarity YES NO

STD/ISD connectivity problem VAS feature failures

C. The connection was not activated for a long time

6.

You said the SERVICE provided by AirTel people fail to perform as promised.

Which of the following service related problems did you experience which AirTel did not handle effectively? A. Frequent barring or disconnection

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I. Because of credit limit inspite of high usage YES NO

II. Barring for any other reason (Please Specify)

B. Billing and Payments I. II. Delay in receiving bills Delayed postings of payment and subsequent harassment

III. Incorrect roaming bill IV. Receiving bill for incorrect mobile No. V. Receiving incomplete bill

C. You said AirTel couldnt or wouldnt handle a need or request. What Was your need or request? About customizing the SERVICE in some way? (Please specify)*** D. to fix? YES NO Was your need or request about an error you made that required AirTels help

If Yes what was your need and request. (Please specify)**** E. Was there another request or specific need? YES NO

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7. You

said you were treated poorly or rudely.

What exactly did AirTels

employees do? Please try to describe specific behaviours, if possible. A d. e. f. PUT ON HOLD NOT RESPONSIVE WERE DISCOURTEOUS LARGE QUEUE TIME

8. If these problems had not occurred, what is the likelihood that you would still be
buying from AirTel today? Would you say (READ LIST EXECEPT FOR DK)? a. Extremely likely b. Very likely c. Somewhat likely d. Not very likely e. Dont know f. Refused

9. Which of the following are priced high by AirTel that prompted you to cancel
your connection? d. e. f. Monthly rentals for subscription Airtime usage rates Monthly rentals for VAS

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g.

Recent changes in your budget Now I would like you to consider various amounts of reductions in

10.

AirTels prices (First/Next), if AirTel lowered their prices by (insert amount), would you still be subscribing from AirTel today? d. 0% e. 20% f. 30% g. 40% h. 50% YES NO

11.

In what ways did you feel you were spending too much effort in doing

business with AirTel? (PROBE & CLARIFY) IMAGE 12. Now still thinking of Air Tel, please tell me how much you agree with the following statements (Read First Statement Below) would you say that Airtel has A. Large Net work Coverage (Adequate No. of cell sites) a. Agree b. c. d. Disagree

Neither agrees nor disagrees Dont know

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B. Cares about its customers a. Agree b. Disagree c. Neither agree nor disagree d. Dont Know C. Large Dealer Network (Wide Accessibility) a. Agree b. Disagree c. Neither agree nor disagree d. Dont know

D. Professional Organization a. Agree b. Disagree c. Neither agree nor disagree d. Dont know 13.Are you aware that there are toll free help line numbers available with your Air Tel connection? Yes No

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14.

Have you asked for guidance / assistance on these help line numbers? Yes No

Demographics Name ___________________ Occupation ________________ Age _________ Years of Cell Phone use ____

Thank you for your kind cooperation.

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