COMPARATIVE STUDY OF CELLULAR SERVICE PROVIDERS IN INDORE

A dissertation Report submitted to

Devi Ahilya Vishwavidhyalaya, Indore

Towards Partial fulfillment for the award of

Master of Business Administration

2009-2011

Supervised By: - Submitted by:- Dr. Shine David Vikesh Khare Faculty MBA (FT) IV Sem Institute of Management Studies, Major- Marketing DAVV, INDORE (M.P.) Roll No. 43111

Institute Of Management Studies

Devi Ahilya Vishwavidhyalaya, Indore

May - 2011

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A RESEARCH ON

“COMPARATIVE STUDY OF CELLULAR SERVICE PROVIDERS IN INDORE”

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Certificate

This is certified that the research “COMPARATIVE STUDY OF CELLULAR SERVICE

PROVIDERS IN INDORE ” is conducted by Vikesh Khare Student of Institute of Management

studies DAVV, Indore (M.P.) Batch 2009–2011 and work done by him is genuine and

his own work and no part is copied from anywhere else, whatever is taken had mentioned in

bibliography.

Signature

Dr. Shine David

Faculty

Institute of Management Studies,

DAVV, INDORE (M.P.)

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ACKNOWLEDGEMENT

Acknowledge with the sincerity and sense of gratitude the help rendered to me by various person

in compiling this project.

First and foremost I wish to express my heartiest gratitude to Dr. Shine David, Faculty IMS

DAVV, Indore whose excellent guidance & supervision enabled me to bring this shape to my

project.

I am also thankful to my institute “INSTITUE OF MANAGEMENT STUDIES”.

Above all I wish to thank all those who had helped us directly or indirectly to make this project a

success.

Finally yet importantly, I thanks to the respondents as they give their valuable time for providing

information.

Vikesh Khare

MBA (FT) IV Sem Major- Marketing Roll No. 43111

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DECLARATION

“I hereby declare that this submission is my own work and that, to the best of my knowledge and

belief. It contains no material previously published or written by another person nor material that

has been accepted for the award of any other degree or diploma of the university or any other

institute of higher learning, except where due acknowledgment has been made in the text. I also

declare that no copy of the work done by me is submitted any where else in any other professional,

technical or academic organization and is purely submitted and developed by me as a part of the

partial fulfillment for degree of Master of Business Administration.”

Date: Signature:

Vikesh Khare

MBA (FT) IV Sem Major- Marketing Roll No. 43111

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ABSTRACT

In today’s world of cut throat 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.

This project is an extensive report on the comparative analysis of cellular service

providers in Indore Region. The report begins with the history of the telecom sector and

the introduction of the cellular service operators. Then on the basis of the graphical

analysis of the information gathered through primary and secondary data collection

methods, we analyze and compare these operators on the basis of various services

provided by them and apply AIDA model to justify our research.

We will also try to find out that which are the services which will help the operators to

are to increase the customers base and sustain in this competitive environment and what

are the services which provide competitive edge to them.

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TABLE OF CONTENT

S.NO. Chapter Page No.

1. Introduction 8

History of Telecom Sector

Introduction of Cellular Operators

2. Review of Literature 29

3. Rationale of study and objectives 31

4. Methodology 33 Research Design Data Collection Data Analysis Tools Sampling Plan

5. Data Analysis 38

6. Result 49

7. Conclusion 50

8. Limitations 51

9. References 52

10. Bibliography 53

11. Annexure 54

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INTRODUCTION

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Telecom Industry in India

The telecom industry is one of the fastest growing industries in India. India has nearly 200

million telephone lines making it the third largest network in the world after China and USA.

With a growth rate of 45%, Indian telecom industry has the highest growth rate in the world.

-  Much of the growth in Asia Pacific Wireless Telecommunication Market is spurred by

the growth in demand in countries like India and China.

-  India‘s mobile phone subscriber base is growing at a rate of 82.2%. 

-  China is the biggest market in Asia Pacific with a subscriber base of 48% of the total 

   subscribers in Asia Pacific. Compared to that India ’s share in Asia Pacific Mobile

Phone 

   market is 6.4%. Considering the fact that India and China have almost comparable 

   populations, India’s low mobile penetration offers huge scope for growth.

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.

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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 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. 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.

Classification of Telecommunication services

1. Basic services

2. Cellular services

3. Internet Service Provider (ISP)

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Cellular Service

Overview

1. There are five private service operators in each area, and an incumbent state operator.

Almost 80% of the cellular subscriber base belongs to the pre-paid segment.

2. The DoT has allowed cellular companies to buy rivals within the same operating circle

provided their combined market share did not exceed 67 per cent. Previously, they were

only allowed to buy companies outside their circle.

Growth Drivers

Opening up of international and domestic long distance telephony services are growth

drivers in the industry. Cellular operators now get substantial revenue from these

services, and compensate them for reduction in tariffs on air time, 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.

The Key players in the Telecom Market in India

Cellular Service provider:

1. BSNL

2. Airtel

3. Vodafone

4. Reliance

5. Tata indicom

6. Idea

7. Aircel

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Subscribers

Wireless subscribers crosses 200 million mark

Tele density reaches 21.20%

The total number of telephone subscribers has reached 341.02 million at the end of August 2010 as

compared to 302.87 million in July 2009. The overall teledensity

has increased to 13.20% in August 2010 as compared to 10.52% in July 2009.

In the wireless segment, 8.31 million subscribers have been added in August 2010 while 8.06

million subscribers were added in July 2010. The total wireless subscribers (GSM, CDMA &

WLL(F)) base reaches 201.29 million at the end of August 2010.

The wireline segment subscriber base stood at 39.73 million with a decrease of 0.16 million at the

end of August 2010.

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Company’s Profile

INTRODUCTION

Bharti Airtel Limited (NSE: BHARTIARTL, BSE: 532454), commonly known as airtel, is an

Indian telecommunications company that operates in 19 countries across South Asia, Africa and

the Channel Islands. It operates a GSM network in all countries, providing 2G or 3G services

depending upon the country of operation. Airtel is the fifth largest telecom operator in the world

with over 207.8 million subscribers across 19 countries at the end of 2010. It is the largest cellular

service provider in India, with over 152.5 million subscribers at the end of 2010. Airtel is the 3rd

largest in-country mobile operator by subscriber base, behind China Mobile and China Unicom..

Airtel also offers fixed line services and broadband services. It offers its telecom services under the

Airtel brand and is headed by Sunil Bharti Mittal. Bharti Airtel is the first Indian telecom service

provider to achieve this Cisco Gold Certification. To earn Gold Certification, Bharti Airtel had to

meet rigorous standards for networking competency, service, support and customer satisfaction set

forth by Cisco. The company also provides land-line telephone services and broadband Internet

access (DSL) in over 96 cities in India. It also acts as a carrier for national and international long

distance communication services. The company has a submarine cable landing station at Chennai,

which connects the submarine cable connecting Chennai and Singapore.

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It is known for being the first mobile phone company in the world to outsource everything except

marketing and sales and finance. Its network (base stations, microwave links, etc.) are maintained

by Ericsson, Nokia Siemens Network and Huawei., business support by IBM and transmission

towers by another company (Bharti Infratel Ltd. in India). Ericsson agreed for the first time, to be

paid by the minute for installation and maintenance of their equipment rather than being paid up

front. This enabled the company to provide pan-India phone call rates of Rs. 1/minute

(U$0.02/minute). Call rates have come down much further. During the last financial year [2009-

10], Bharti has roped in a strategic partner Alcatel-Lucent to manage the network infrastructure for

the Telemedia Business.

History

Sunil Bharti Mittal founded the Bharti Group. In 1983, Sunil Mittal was into an agreement with

Germany's Siemens to manufacture the company's push-button telephone models for the Indian

market. In 1986, Sunil Bharti Mittal incorporated Bharti Telecom Limited (BTL) and his company

became the first in India to offer push-button telephones, establishing the basis of Bharti

Enterprises. This first-mover advantage allowed Sunil Mittal to expand his manufacturing capacity

elsewhere in the telecommunications market. By the early 1990s, Sunil Mittal had also launched

the country's first fax machines and its first cordless telephones. In 1992, Sunil Mittal won a bid to

build a cellular phone network in Delhi. In 1995, Sunil Mittal incorporated the cellular operations

as Bharti Tele-Ventures and launched service in Delhi. In 1996, cellular service was extended to

Himachal Pradesh. In 1999, Bharti Enterprises acquired control of JT Holdings, and extended

cellular operations to Karnataka and Andhra Pradesh. In 2000, Bharti acquired control of Skycell

Communications, in Chennai. In 2001, the company acquired control of Spice Cell in Calcutta.

Bharti Enterprises went public in 2002, and the company was listed on Bombay Stock Exchange

and National Stock Exchange of India. In 2003, the cellular phone operations were rebranded

under the single Airtel brand. In 2004, Bharti acquired control of Hexacom and entered Rajasthan.

In 2005, Bharti extended its network to Andaman and Nicobar.

In 2009, Airtel launched its first international mobile network in Sri Lanka. In 2010, Airtel began

operating in Bangladesh and 16 African countries.

Today, Airtel is the largest cellular service provider in India and fifth largest in the world.

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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 has a reliable, high-capacity, integrated (both wireless and wireline) and

convergent (voice, data and video) digital network. It is capable of delivering a range of services

spanning the entire infocomm (information and communication) value chain, including

infrastructure and services — for enterprises as well as individuals, applications, and consulting.

Today, Reliance Communications is revolutionising the way India communicates and networks,

truly bringing about a new way of life.

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Reliance Communications (formerly Reliance Infocomm), along with Reliance Telecom and Flag

Telecom, is part of Reliance Communications Ventures (RCoVL). According to National Stock

Exchange data, Anil Ambani controls 66.75 per cent of the company, which accounts for more

than 1.36 billion shares of the company.[1]Reliance Infocomm is an Indian telecommunications

company. It is the flagship company of the Reliance-Anil Dhirubhai Ambani Group, comprising of

power (Reliance Energy), financial services (Reliance Capital) and telecom initiatives of the

Reliance ADA Group. Reliance Infocomm is currently managed by Anil Dhirubhai Ambani.It uses

CDMA2000 1x technology

HISTORY

Reliance Infocomm was founded by Dhirubhai Ambani. Between 1999 to 2002 Reliance

Infocomm built 60,000 km of fibre optic backbone in India. This network was commissioned on

December 28, 2002.

FOOTPRINT

At present, Reliance Telecom's GSM cellular services are available in 340 towns within its eight-

circle footprint. Reliance's CDMA services are available in 19 states and cover about 65% of the

country, state wise. Reliance Infocomm also offered for the first time in India, mobile data services

through its R-World mobile portal. This portal leverages the data capability of the CDMA 1X

network.

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BUSINESS REVIEW

During the twelve months ended March 31, 2007, revenues of the Wireless business increased by

46% to Rs. 10,728 crore (US$ 2,489 million) from Rs. 7,364 crore (US$ 1,709 million).

Wireless EBITDA increased to Rs. 3,984 crore (US$ 924 million) from Rs. 2,250 crore (US$ 522

million). Margins expanded to 37% from 31%.

EBITDA of the Global business increased by 98% during the twelve months ended March 31,

2007 to Rs. 1,271 crore (US$ 295 million). EBITDA margins increased to 24% from 12% last

year.

In the same period, the Broadband business achieved revenue growth of 123% to Rs. 1,144 crore

(US$ 265 million), and EBITDA increased by more than 6 times, to Rs. 519 crore (US$ 120

million). The EBITDA margin crossed 45% in the twelve months ended March 31, 2007, from

15% in the corresponding period in the previous year.

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INTRODUCTION

Tata Teleservices Limited (TTLS) is a subsidiary of the Tata Group headquartered in Navi

Mumbai, an Indian conglomerate. It operates under the brand name Tata Indicom in various

telecom circles of India.

In Nov 2008, Japanese telecom giant NTT Docomo picked up a 26 per cent equity stake in Tata

Teleservices for about Rs 13,070 crore ($2.7 billion) or an enterprise value of Rs 50,269 crore

($10.38 billion).

In Feb 2008, TTSL announced that it would provide CDMA mobile services targeted towards the

youth, in association with the Virgin Group on a Franchisee model basis.

Tata Teleservices Provides mobile services under 3 Brand names:

Tata Indicom (CDMA Mobile operator)

Tata DoCoMo (GSM Mobile operator)

Virgin Mobile (CDMA Mobile operator)

Virgin Mobile (GSM Mobile operator)

Tata Teleservices Limited (TTSL) is part of the Tata Group of Companies, an Indian

Conglomerate. It runs the brand name Tata Indicom in India in various telecom circles of India.

The company forms part of the Tata Group's prescence in the Telecommunication Industry in

India, along with Tata Teleservices (Maharashtra) Limited (TTML) and VSNL.

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TTSL was incorporated in 1995 and was the first company to offer CDMA Mobile services in

India, specifically in the state of Andhra Pradesh.In December 2002, the company acquired the

erstwhile Hughes Telecom (India) Ltd. which was renamed Tata Teleservices (Maharashtra)

Limited. In September 2007, Tata Indicom launched the Talk World plan, an International Long

Distance Plan.

Tata is the direct competitor with Reliance, both CDMA operators in India. The company provides

unified telecommunication solutions including mobile, fixed wireless, fixed line and broadband.

Other competitors are Vodafone, Airtel, Aircel, Idea, MTNL, BSNL providing GSM based mobile

telephony. The company was first in India to provide free intra network calling within city limits.

They launched a unique scheme providing lifetime rental free connectivity on its mobile and fixed

wireless for a one time charge.

Tata Teleservices is part of the INR Rs. 119000 Crore (US$ 29 billion) Tata Group, that has over

87 companies, over 250,000 employees and more than 2.8 million shareholders. With a committed

investment of INR 36,000 Crore (US$ 7.5 billion) in Telecom (FY 2006), the Group has a

formidable presence across the telecom value chain. Tata Teleservices spearheads the Group’s

presence in the telecom sector. Incorporated in 1996, Tata Teleservices was the first to launch

CDMA mobile services in India with the Andhra Pradesh circle.

Starting with the major acquisition of Hughes Tele.com (India) Limited [now renamed Tata

Teleservices (Maharashtra) Limited] in December 2002 the company swung into an expansion

mode. With the total Investment of Rs 19,924 Crore, Tata Teleservices has created a Pan India

presence spread across 20 circles that includes Andhra Pradesh, Chennai, Gujarat, Karnataka,

Delhi, Maharashtra, Mumbai, Tamil Nadu, Orissa, Bihar, Rajasthan, Punjab, Haryana, Himachal

Pradesh, Uttar Pradesh (E), Uttar Pradesh (W), Kerala, Kolkata, Madhya Pradesh and West

Bengal.

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Having pioneered the CDMA 3G1x technology platform in India, Tata Teleservices has

established a robust and reliable 3G ready telecom infrastructure that ensures quality in its

services. It has partnered with Motorola, Ericsson, Lucent and ECI Telecom for the deployment of

a reliable, technologically advanced network.

The company, which heralded convergence technologies in the Indian telecom sector, is today the

market leader in the fixed wireless telephony market with a total customer base of over 3.8 million.

Tata Teleservices’ bouquet of telephony services includes Mobile services, Wireless Desktop

Phones, Public Booth Telephony and Wireline services. Other services include value added

services like voice portal, roaming, post-paid Internet services, 3-way conferencing, group calling,

Wi-Fi Internet, USB Modem, data cards, calling card services and enterprise services.

Some of the other products launched by the company include prepaid wireless desktop phones,

public phone booths, new mobile handsets and new voice & data services such as BREW games,

Voice Portal, picture messaging, polyphonic ring tones, interactive applications like news, cricket,

astrology, etc.

Tata Indicom redefined the existing prepaid mobile market in India, by unveiling their offering –

Tata Indicom ‘Non Stop Mobile’ which allows customers to receive free incoming calls. Tata

Teleservices today has India’s largest branded telecom retail chain and is the first service provider

in the country to offer an online channel www.ichoose.in to offer postpaid mobile connections in

the country.

Tata Teleservices has a strong workforce of 6000. In addition, TTSL has created more than 20,000

jobs, which will include 10,000 indirect jobs through outsourcing of its manpower needs.

Today, Tata Teleservices Limited along with Tata Teleservices (Maharashtra) Limited serves over

21 million customers in over 4000 towns. With an ambitious rollout plan

both within existing circles and across new circles, Tata Teleservices offers world-class technology

and user-friendly services in 20 circles.

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INTRODUCTION

Bharat Sanchar Nigam Limited (abbreviated BSNL; भा�रत सं�चा�र निगम लि मिमटि�ड) is a state-owned

telecommunications company headquartered in New Delhi, India. BSNL is one of the largest

Indian cellular service providers, with over 86.4 million subscribers as of March 2011, and the

largest land line telephone provider in India. However, in recent years the company's revenue and

market share plunged into heavy losses due to intense competition in Indian telecommunications

sector.

BSNL is India's oldest and largest communication service provider (CSP). It had a customer base

of 90 million as of June 2008. It has footprints throughout India except for the metropolitan cities

of Mumbai and New Delhi, which are managed by Mahanagar Telephone Nigam Limited

(MTNL). As of June 30, 2010, BSNL had a customer base of 27.45 million wireline and 72.69

million wireless subscribers.

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, MPLS-VPN, VSAT, VoIP services, 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.

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BSNL is the only service provider, making focused efforts and planned initiatives to bridge the

Rural-Urban Digital Divide ICT sector. In fact there is no telecom operator in the country to beat

its reach with its wide network giving services in every nook & corner of country and operates

across India except Delhi & Mumbai. Whether it is inaccessible areas of Siachen glacier and

North-eastern region of the country. BSNL serves its customers with its wide bouquet of telecom

services.

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 has more than 2.5 million WLL subscribers and 2.5 million Internet Customers who access

Internet through various modes viz. Dial-up, Leased Line, DIAS, Account Less Internet(CLI).

BSNL has been adjudged as the NUMBER ONE ISP in the country.

BSNL has set up a world class multi-gigabit, multi-protocol convergent IP infrastructure that

provides convergent services like voice, data and video through the same Backbone and

Broadband Access Network. At present there are 0.6 million DataOne broadband customers.

The company has vast experience in Planning, Installation, network integration and Maintenance

of Switching & Transmission Networks and also has a world class ISO 9000 certified Telecom

Training Institute.

Scaling new heights of success, the present turnover of BSNL is more than Rs.351,820 million

(US $ 8 billion) with net profit to the tune of Rs.99,390 million (US $ 2.26 billion) for last

financial year. The infrastructure asset on telephone alone is worth about Rs.630,000 million (US

$ 14.37 billion).

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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.

History

The foundation of Telecom Network in India was laid by the British sometime in 19th

century. The history of BSNL is linked with the beginning of Telecom in India. In 19th century

and for almost entire 20th century, the Telecom in India was operated as a Government of India

wing. Earlier it was part of erstwhile Post & Telegraph Department (P&T). In 1975 the

Department of Telecom (DoT) was separated from P&T. DoT was responsible for running of

Telecom services in entire country until 1985 when Mahanagar Telephone Nigam Limited

(MTNL) was carved out of DoT to run the telecom services of Delhi and Mumbai. It is a well

known fact that BSNL was carved out of Department of Telecom to provide level playing field to

private telecoms.Subsequently in 1990s the telecom sector was opened up by the Government for

Private investment, therefore it became necessary to separate the Government's policy wing from

Operations wing. The Government of India corporatised the operations wing of DoT on October

01, 2000 and named it as Bharat Sanchar Nigam Limited (BSNL).BSNL operates as a public

sector.

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INTRODUCTION

As India's leading GSM Mobile Services operator, IDEA Cellular has licenses to operate

in 11 circles. With a customer base of over 17 million, IDEA Cellular has operations in

Delhi,Maharashtra, Goa, Gujarat, Andhra Pradesh, Madhya Pradesh, Chattisgarh,

Uttaranchal, Haryana, UP-West, Himachal Pradesh and Kerala. IDEA Cellular's footprint

currently covers approximately 45% of India's population and over 50% of the potential

telecom-market. As a leader in Value Added Services, Innovation is central to IDEA's VAS

Factory. It is the first cellular company to launch music messaging with 'Cellular Jockey',

'Background Tones', 'Group Talk', a voice portal with 'Say IDEA' and a complete suite of Mobile

Email Services.

Idea Cellular is a wireless telephony company operating in various states in India. It initially

started in 1995 as a join venture between the Tatas, Aditya Birla Group and AT&T by merging

Tata Cellular and Birla AT&T Communications. Initially having a very limited footprint in the

GSM arena, the acquisition of Escotel in 2004 gave Idea a truly pan-India presence covering

Maharashtra (excluding Mumbai), Goa, Gujarat, Andhra Pradesh, Madhya Pradesh, Chattisgarh,

Uttar Pradesh (East and West), Haryana, Kerala, Rajasthan and Delhi (inclusive of NCR).The

company has its retail outlets under the "Idea n' U" banner. The company has also been the first to

offer flexible tarrif plans for prepaid customers. It also offers GPRS services in urban areas.

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Holding

Initially the Birlas, the Tatas and AT&T Wireless each held one-third equity in the

company. But following AT&T Wireless' merger with Cingular Wireless in 2004, Cingular

decided to sell its 32.9% stake in Idea. This stake was bought by both the Tatas and

Birlas at 16.45% each. Tata's foray into the cellular market with its own subsidiary, Tata Indicom,

a CDMAbased mobile provider, cropped differences between the Tatas and the Birlas. This dual

holding by the Tatas also became a major reason for the delay in Idea being granted a license to

operate in Mumbai. This was because as per Department of Telecom (DOT) license norms, one

promoter could not have more than 10% stake in two companies operating in the same circle and

Tata Indicom was already operating in Mumbai when Idea filed for its license.

The Birlas thus approached the DOT and sought its intervention, and the Tatas replied by saying

that they would exit Idea but only for a good price. On April 10, 2006, the Aditya Birla Group

announced its acquisition of the 48.18% stake held by the Tatas at Rs. 40.51 a share amounting to

Rs. 44.06 billion. While 15% of the 48.14% stake was acquired by Aditya Birla Nuvo, a company

in-charge of the Birlas' new business initiatives, the remaining stake was acquired by Birla TMT

holdings Private Ltd., an AV Birla family owned company.Currently, Birla Group holds 98.3% of

the total shares of the company.

Idea has successfully launched 3 more new circles (states) in India viz. Rajasthan, Himachal

Pradesh and UP (East) to make itself a pan-India player. Recently, Idea got licenses to operate in

Mumbai & Bihar. They are awaiting the spectrum from DoT.

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Vodafone Essar, commonly referred to as Vodafone, is a cellular operator in India that covers 23

telecom circles in India. It was formerly known as Hutchison Essar. It is based in Mumbai.

Vodafone Essar is the Indian subsidiary of Vodafone Group. Formerly, 33% share in the firm was

owned by Essar Group. Vodafone Group bought out the 33% stake of Essar Group for $5 billion to

became the sole owner of the firm. It is the second largest mobile phone operator in terms of

revenue behind Bharti Airtel, and third largest in terms of customers. Vodafone had about 134.5

million customers as of February 2011.

On February 11, 2007, Vodafone agreed to acquire the controlling interest of 67% held by Li Ka

Shing Holdings in Hutch-Essar for US$11.1 billion, pipping Reliance Communications, Hinduja

Group, and Essar Group, which is the owner of the remaining 33%. The whole company was

valued at USD 18.8 billion. The transaction closed on May 8, 2007. Despite the official name

being Vodafone Essar, its products are simply branded Vodafone. It offers both prepaid and

postpaid GSM cellular phone coverage throughout India with good presence in the metros.

Vodafone Essar provides 2.75G services based on 900 MHz and 1800 MHz digital GSM

technology. Vodafone Essar will launch 3G services in the country in the January-March quarter of

2011 and plans to spend up to $500 million within two years on its 3G networks.

Vodafone acquires Essar's Stake

On March 31, 2011, Vodafone Group Plc announced that it would buy an additional 33% stake in

its Indian joint venture for $5 billion after partner Essar Group exercised an option to sell the

holding in the mobile-phone operator. The deal will raise Vodafone’s stake to 75%. Essar will exit

the company after it implemented a put option over 22% of the venture. Vodafone exercised

its call option to buy an 11% stake.

26

In 2007, Vodafone granted options to Essar that would enable the conglomerate to sell its entire

stake for $5bn, or to dispose of part of the 33 per cent shareholding at an independently appraised

fair market value. In January 2011, Vodafone objected to Essar’s plans to place part of its 33%

stake in India Securities, a small public company. Vodafone feared the move would give an

inflated market value to Vodafone Essar. It had approached the market regulator SEBI and also

filed a petition in the Madras High Court.

The final shareholding pattern post this deal was not provided by the company as it was not clear

whether Vodafone's stake would exceed the 74 per cent FDI limit. Indian laws don't allow foreign

companies to own more than 74% in a local mobile-phone operator. Vodafone has assured it will

comply with local rules. Vodafone will have to sell that 1% to some Indian entity, or they’ll have

to consider an initial public offering. Vodafone also said that final settlement is anticipated to be

completed by November 2011. The completion of the deal would be subject to meeting certain

conditions which include Reserve Bank of India's permission as well as valuation of the deal.

Timeline

1992: Hutchison Whampoa and Max Group establish Hutchison Max

2000: Acquisition of Delhi operations and entry into Calcutta (now Kolkata) and Gujarat markets

through Essar acquisition

2001: Won auction for licences to operate GSM services in Karnataka, Andhra Pradesh and

Chennai

2003: Acquired AirCel Digilink (ADIL — ESSAR Subsidiary) which operated in Rajastan, Uttar

Pradesh East and Haryana telecom circles and rebranded it 'Hutch'.

2004: Launched in three additional telecom circles of India namely Punjab, Uttar Pradesh (West)

and West Bengal.

2005: Acquired BPL Mobile operations in 3 circles. This left BPL with operations only in

Mumbai, where it still operates under the brand 'Loop Mobile'.

2008: Vodafone acquires the licences in remaining 7 circles and has starts its pending operations in

Madhya Pradesh circle, as well as in Orissa, Assam, North East and Bihar.

27

Aircel group is a mobile phone service provider in India. It offers both prepaid and postpaid GSM

cellular phone coverage throughout India. Aircel is a joint venture between Maxis

Communications of Malaysia and Apollo Hospital Enterprise Ltd of India. UTSB has a 74% stake

in Aircel and the remaining 26% is with Apollo Hospitals. It is India’s Seventh largest GSM

mobile service provider with a subscriber base of over 51.83 million, as of January 31, 2011. It has

a market share of 6.72% among the GSM operators in the country. As on date, Aircel is present in

all 23 telecom circles (including Andhra Pradesh, Assam, Bihar & Jharkhand, Chennai, Delhi &

NCR, Gujarat, Haryana, Himachal Pradesh, Jammu & Kashmir, Karnataka, Kerala, Kolkata,

Madhya Pradesh, Mumbai, North East, Orissa, Punjab, Rajasthan, Rest of Maharashtra & Goa,

Rest of Tamil Nadu, Rest of West Bengal, Uttar Pradesh East, Uttar Pradesh West) as per the

company plans to become a pan-India operator by 2010. Additionally, Aircel has also obtained

permission from Department of Telecommunications (DoT) to provide International Long

Distance (ILD) and National Long Distance (NLD) telephony services. It also has the largest

service in Tamil Nadu.

28

REVIEW OF LITERATURE

29

Service

A service is any act of performance that one-party can offer to another that is essentially intangible

and does not result in the ownership of anything. It may or may not the tied to a physical product

(Kotler 2003 p466). Products can be copied easily by competitors but not services. This is due to

the fact that service depends on the culture of the organization and the training and attitude of its

employees, it is more difficult to build and sustain successfully, but is more difficult to copy

(Albrecht and Zemke, 1985).

Service Experience: The Concept

Customer oriented conceptualisation of service was initiated by Zeithaml (1981). According to her

on two parameters of experience and credence qualities service is more inclined upon than

products. As per Edward Bruner (1985, p3) experience "refers to an active self, to a human being

who not only engages in but shapes an action."

Another dimension has been recently added to this concept. Now researchers have begun to

recognise the experiential and symbolic nature of service consumption. Otto and Ritchie (1995)

suggest that customers are capable of distinguishing functional quality from the quality of

experience, which they define as affective, symbolic reactions to the service encounter. In sum

those researchers point out a prominent point that for many services the experience itself is the key

perceptual event from the customer's point of view. It can be deduced from this that many services

are experiential, as result service experience can be used as a consumer-oriented concept for

addressing service brand image issues.

Service Quality

Service quality differs from quality of goods, in that services are intangible. This presents a

challenge to marketers; services cannot easily be communicated to customers, and hence quality

may be difficult for customers to assess. Services are characterized as being intangible, perishable,

produced and consumed simultaneously, and heterogeneous. A major challenge for companies is

to deliver service quality consistently (Zeithaml and Bitner, 2000).

30

Brand Image

Literature of brand image dates back to 1950s. The word brand has been derived from the old

Norse word Brandr, which means to burn, as brands were and still other means by which owner

supplier to mark their animals to identify them. Interbrand group worlds greatest brands: an

international review (New York: John Wiley, 1992). Both broad as well as specific definitions of

brand image exist in the available literature. Brand image has been equated with the idea that

brands of personality like meanings associated with them. (See Dobni and Zinkhan 1990 for a

review).

The respondents evaluate brands on the basis of attributes perceived by them in making

purchase decision. Analysis of the brand association represent the basis of the brand equity

measurement, as models of brand equity usually give emphasis to brand knowledge and brand

associations (Aaker, 1991;Green et.al, 1988; Sharma & Ojha, 2004).

31

Rationale of Study

This study has done to know the perceptions of the consumers for various cellular operators in

Indore in terms of different factors like coverage, call rates, roaming facility, internet facility, night

tarrif, customer care services etc.

Because above factors play a vital role in the comparison of cellular service providers and also

gives the information about as which is/are the critical factor/s which are required to sustain in the

hard core competitive era and about those factors which are required to get the competitive edge.

32

OBJECTIVES

Every organization has to achieve its organization goals. For this it is very essential for an

organization to know about the view of consumers and their competitive products/services.

1. To compare the services provided by the various cellular service operators.

2. To know the consumer perception about various cellular service operators.

3. To know the consumer satisfaction regarding Brand Value of the cellular service operators.

4. To know the consumer satisfaction regarding Value Added Services of the cellular service

operators.

5. To compare cellular service operators on the basis of occurrence of problems in services.

6. To know which services are important to maintain and increase customer base and which

services will give competitive edge.

33

RESEARCH METHODOLOGY

34

Research Design

The design is the structure of any scientific work. It gives direction and systematizes the research.

This is a non probability judgmental research and aims to study the responses of consumers.

For the consumer perception study a questionnaire was formulated containing 07 questions. The

questionnaires were filled by the respondents of various age groups and income levels.

This data was later analyzed through mean and percentage analysis graph.

Tools of Data Collection:

Primary Data Collection: The primary data for this research is collected through questionnaires. A structured questionnaire was designed to find out responses for various factors affecting customer’s perception for cellular service operators.

Questionnaire: The questionnaire was formulated by keeping in mind the following

points: - : -

Giving the respondents clear comprehension of the question.

Giving instructions as to what is needed.

Secondary Data Collection: The sources of secondary data include Internet, magazines and books referred from the library.

Data analysis tool :

Data analysis is an important function to find out true result so right tools were used to analysis the

data. To know the customers perception about cellular operator for various services provided by

them we use mean calculation and percentage analysis graph.

35

Sampling Plan:

Universe Population: The respondents living in the city of Indore and availing cellular services have been considered as the population for data collection in this study.

Sampling Unit: The element or unit being studied in this case is an individual availing cellular service.

Extent: The extent of Universe in this study is the Indore city.

Sampling Method: The sampling method is Judgmental or Purposive sampling.

Sample Size: Sample size of one hundred responses has been taken for conducting the research.

SAMPLING: Sampling is the use of a subset of the population to represent the whole population.

Probability sampling, or random sampling, is a sampling technique in which the probability of

getting any particular sample may be calculated.

Non-probability sampling is a sampling technique where the samples are gathered in a process that

does not give all the individuals in the population equal chances of being selected.

36

JUDGMENTAL SAMPLING

Judgmental sampling is more commonly known as purposive sampling. In this type of sampling,

subjects are chosen to be part of the sample with a specific purpose in mind. With judgmental

sampling, the researcher believes that some subjects are more fit for the research compared to

other individuals. This is the reason why they are purposively chosen as subjects.

37

Finding and Analysis

38

Analysis through graph

1. Monthly expense of respondents on mobile phone.

2. Market share of cellular operators.

39

3. Market Share of cellular operators for consumers under 35 year of age.

4. Market Share of cellular operators for consumers of 35 or above age group.

40

5. Respondents having number of cellular connections.

6. Rating on the basis of coverage of cellular operators:(5 Excellent, 1 Inferior)

41

7. Rating on the basis of call rates and roaming of cellular operators:(5 Excellent, 1 Inferior)

42

8. Rating on the basis of internet facility and Multimedia services of cellular operators:(5 Excellent, 1 Inferior)

43

9. Rating on the basis of automatic call drop and connectivity problems during peak hours:(5 Very Frequent, 4 frequent, 3 Neutral, 2 Sometimes, 1 Never)

44

10. Rating on the basis of Promotional Calls: (5 Very Frequent, 1 Never)

45

11. Rating on the basis of brand value and value added services of cellular operators: (5 Highly Satisfied, 1 Highly Dissatisfied)

46

12.Rating on the basis of occasional offers and endorsement of cellular operators: (5 Highly Satisfied, 1 Highly Dissatisfied)

47

RESULT AND CONCLUSION

48

RESULT:

1. On the basis of graph analysis of age groups of below 35 years and 35 and above we

analyze that in first case Airtel, BSNL and Reliance holds majority of the market share

whereas in the latter case Airtel and BSNL holds majorty of the market stake.

2. On the basis of graphical analysis of questionnaires filled by the respondents, we can

compare cellular services providers on the basis of following services provided by them:

Coverage : Airtel and BSNL have better coverage than other operators.

Call Rate : Vodafone and Tata leads in call rates. They charge relatively less rate than other

operator.

Internet Facility: Airtel and Vodafone provide better internet facility.

Value Added Services: Vodafone and Tata are better than others in this parameter.

Occasion Offer: Vodafone, Idea and BSNL provides better occasional offers to the

customers.

3. On the basis of graphical analysis of problems encountered in services we can compare

them as following:

Automatic Call Drop: In BSNL and Reliance frequency of call drop is high decreasing to

Idea and is very low in Airtel.

Connectivity Problem during Peak Hours: it is high in BSNL as comparison to other

operators.

Promotional Calls: Promotional Calls occur Very Frequently in Reliance, BSNL and Idea

whereas it is low in case of Airtel.

49

CONCLUSION

Essentially, good call quality at a cheaper call cost, and a few value added services like texting, surfing, roaming thrown in....... and yes, sincere service with a smile when you are in soup... these are what excellent cellphone service is all about!

On the basis of above analysis we can conclude that Airtel and BSNL capture majorty stake

of the market. And why they are able to do so can be explained on the basis of AIDA

model. AIDA( Attention Interest Desire Satisfaction).

The services which are most eminent and are considered important in gaining attention of

the consumers are coverage, Call Rates And Multimedia Services. And these operators

provide a good combination of these services which gain attention of the consumers and

induce interest in them as they feel that they are getting what they desire.

And they provide better service than other operators in respect to problems like automatic

call drop and connectivity problems which result in satisfaction of the customers and help

these cellular service operators to retain their customers and simultaneously increasing their

customer base.

Although BSNL have connectivity problems but its other features like coverage and Brand

value hide its drawback and is still gives a healthy competition to other telecom majors.

50

LIMITATION

The following were the limitations that were there during the course of the study:

1 The sample area was concentrated to Indore only and other cities could not be covered due to lack of time.

2 Time and money were the major constraints.

3 Respondents might not have given the correct information

51

REFERENCES:

1. Aaker, D.A (1990), Brand Extensions: the good, the bad and the ugly,” Sloan Management

Review, 314,pp 47-56

2. Albrecht, K. and Zemke, R. (1985), Service America, Dow Jones, Irwin, Homewood, IL.

3. Keller, K.L. (1998), Strategic Brand Management, Prentice-Hall, Englewood cliffs, NJ.

4. Kotter, J. and Heskett, J.L. (1992), Corporate Culture and Performance, The Free Press,

New York, NY.

5. Kotler, Phillip and Gary Armstrong (1996), Principles of Marketing, Englewood cliffs, NJ:

Prentice Hall.

6. Lovelock, C., Vandermerwe, S. and Lewis, B. (1999), Services Marketing: A European

Perspective, Prentice-Hall, London.

7. Paul E, Frank J carnone and Scott M. Smith(1988), “Multi dimensional Scaling : Concepts

and Applications” , LLyn and Bacon,Boston.

8. Sharma, N., and Ojha, S. (2004),“Measuring service performance in mobile

communications”. The Service Industries Journal, 24(6): 109-128

9. Zeithmal, V. and Bitner, M.J. (1996), Services Marketing, McGraw-Hill, New York, NY.

52

BIBLIOGRAPHY

1. Kothari, C.R. “Research methodology methods and techniques”, new age international

(p) limited, publication

2. www.wikipedia.org.

3. www.airtel.com

4. www.ideacellular.com

5. www.vodafone.in

6. www.tataindicom.com

7. www.rcom.co.in

8. www.bsnl.co.in

9. www.aircel.com

53

Annexure

QUESTIONNAIRE

54

COMPARATIVE STUDY OF CELLULAR SERVICE PROVIDERS IN INDORE

Name : Gender : Male/ Female

Age : Qualification :

Occupation: Annual Income: (in Rs)

Less than 2 Lac 2-3 Lac 3- 5 Lac 5-8 Lac More than 8 Lac

Your views and opinions expressed herewith shall be kept confidential and will be used for academic purpose only.

1. How many cellular connections do you have?

1 2 3 >3

2. Which service are you using?

Prepaid Postpaid

3. How much is your monthly expense on mobile phone/s (in Rs)?

Less than 150 150-350 350-500

500- 1000 Above 1000

4. Which cellular service/s are you availing of?

(if you are using more than one operators, use first letter of the operator for rating them in

second page)

Idea Vodafone

BSNL Airtel

Reliance Tata

Aircel Others

5. From how long you are availing the services of this particular service provider?

<1 year 1 year 2 years 3 years > 3 years

55

6. RATE YOUR CELLULAR SERVICE PROVIDER ON THE FOLLOWING PARAMETERS

Excellent Good Neutral Bad Inferior

Coverage

Call rates

Lifetime Plans

Roaming

Internet Facility

Message Tarrif

Night Tarrif

Cutomer Care ServicesMMS(MultimediaServices)

7. RATE YOUR CELLULAR SERVICE PROVIDER ON THE FOLLOWING PARAMETERS

Very Frequently

Frequently Neutral Sometimes Never

Automatic Call DropConnectivity Problem During Peak HOursPromotional CallsProblem Due To Additional Services

56

8. YOUR SATISFACTION LEVEL FOR THE FOLLOWING PARAMETES

Highly Satisfied

Satisfied Neutral Dissatisfied

Highly Dissatisfied

Brand Value

Value Added ServicesOccasional OffersCaller Tune

Endorsement

57