Market Share of Bharti Airtel

7/30/2019 Market Share of Bharti Airtel

1/84

D E H R A D U N

m s

PROJECT REPORT

ON

MARKET SHARE OF BHARTI AIRTEL

SUBMITTED IN PARTIAL FULFILMENT OF THERQUIREMENT OF THE DEGREE OF MASTER OF

BUSINESS ADMINISTRATION IN

UTTARAKHAND TECHNICALUNIVERSITY, DEHRADUN

SUBMITTED BY: SUBMITTED TO:

------------------ ------------------

ROHIT PANT Ms. GARGIMBA 3ND SEM.

MB06029

1


2/84

CERTIFICATE

I have the pleasure in certifying that Mr. /Ms. ROHIT PANT is a bonafidestudent ofMBA 3RD Semester of the Masters Degree in BusinessAdministration of Institute of Management Studies, Dehradun under ClassID No.MB06029.

He has completed his/her Summer Training Project work entitledMARKET SHARE OF BHARTI AIRTEL LTD. under my guidance.

I certify that this is his original effort and has not been copied from any othersource. This project has also not been submitted in any other university forthe purpose of award of any degree.

This project fulfills the requirement of the curriculum prescribed byUttarakhand Technical University, Dehradun for the said course.

Signature:

Name of the Guide

Date

2


3/84

TABLE OF CONTENTS PAG

E

NO.

Acknowledgement 06

Executive Summary 07

Company Profile 09

Vision & Mission of Bharti Airtel.. 12

Service offered by Bharti

Airtel.13

Segregation of telecom sector 15

Market Players. 16

Fixed Line

Operators17

Subscriber base

Fixed line market

Fixed line v/s mobile

present trends

Future Challenges

Operators & their service

area...19

Cellure mobile Services in India.. 22

Industry Growth

Drivers..22

3


4/84

Evolution Of Wireless Communication in

India..23

Road to 3G

Fight over 3G Spectrum In India

Market Share of Mobile... 26

prepaid v/s Postpaid

GSM. 28

GSM Share

Market Development Since 2001

ARPU

Expansion of GSM Operators

CDMA.. 40

Market Share Of CDMA/WLL

Internet. 43

ITES.. 50

Classification

SWOT Analysis Of Indian ites Sector

Threats Faced By Industry

Research Methodology. 65

4


5/84

Elements Of Research

data collection

Sources Of data Collection

Analysis & Findings. 69

Recommendations. 78

Conclusion. 79

Annexure

.80

Bibliography.. 82

5


6/84

ACKNOWLEDGEMENT

I take this opportunity to express my profound and sincere gratitude to Uttarakhand

Technical University for providing me with the opportunity to explore the corridors of

the Corporate World and gather invaluable information & practical experience via such

summer training project in Marketing.I take the privilege of offering deep sense of gratitude and indebtedness to Ms. Chitra for

providing me help to prepare this project report and his valuable inspiration to carry out

this project.

I express my sincere gratitude to my company guide Mr.Gitesh Taneja (Zonalmanager

Marketing)for his guidance during the course of my training. His sound advice has been

well taken by me and it is largely due to his patience that I was able to accomplish my

target. He has been most accommodating and supportive and has made my experience a

pleasant one.

I would like to thank all my colleagues and faculty members at I.M.S. for their valuable

suggestions and constant encouragement.

6


7/84

EXECUTIVE SUMMARY

The project undertaken by me at Airtel as part of Summer Training Program provided me

an opportunity to understand the Mobile Services Segment and to gain an insight into the

various strategies employed to cater this segment of the industry.

The Mobile Services segment stands at the cusp of a new opportunity. This sector is

booming in India as the companies today are starting to operate globally thereby have an

increasing IT and Telecom needs. It provides a lot of opportunity for the telecom

companies to delve into this sector and find out the desired potential market.

Working from the office in Dehradun from 20th June 2007 to 30th august 2007, I have

learnt about the various aspects of Telecom sector in India and abroad. This project was a

practical experience as I learned who the different players in the market are and what is

their market share vis--vis airtel.

As a part of the project the following activities were done during the ten week summer

training project at Airtel Mobile Services:

Worked with marketing department of Airtel at Dehradun for developing a

Marketing Intelligence Repository, posted on the intranet which has beenintroduced by the company to facilitate sharing of information among the

marketing team with ease.

Prepared Questionnaire so as to find out the visibility index of airtel at

different circle.

Prepared a database of Airtel so that company could analyse data and take

corrective measures so as to enhance the visibility share of airtel in the

market.

7


8/84

Analyzed Small and Medium retailers segment in Dehradun zone according

to a research conducted by us, and prepared a presentation on the Small,

Medium retailers and distributors individually.

To map the potential for growth of telecom services in the Dehradun

Segment the following activities were done

o Collected data from secondary sources like magazines, Newspaper

Articles etc. depicting figures for the past, Trends that the market has

shown and also the expected market and forecast results.

o Collected data from previous researches conducted by Airtel and other

agencies like IMRB, Frost and Sullivan, Ernest and Young etc.

o Collected primary data from survey conducted by us in Dehradun

circle which included Haridwar, Saharanpur, Roorkee, Rishikesh,

Kotdwar, Deobandh, Chutmalpur.

The survey was conducted in Dehradun Zone with main emphasis on learning about the

market visibility share of airtel and with respect to other competitors and with a wider

motive to educate the retailer about the various aspect of airtel and how can they increase

their sales and income by following some simple

Guidelines. Moreover the added advantage was that the make a buffer between

distributor and company and between retailer and company. The survey not only helped

in gaining an insight into the market share of airtel but also helped in giving personalattention to retailers problem. The survey was done in Dehradun Zone which included

areas like Haridwar, Saharanpur, Rishikesh, Kotdwar, Deobandh, Chutmalpur, and

Dehradun off course. The survey was also conducted in outer areas of different places so

as to gain full knowledge of the market. The survey was done on exactly 3000 retailers to

gain the first hand report on market.

The project has been a great experience for me as an individual and provided me an

opportunity to work in team on a practical project; thereby it acted as a platform for me to

gather first hand experience for exploring the corridors of the corporate world.

8


9/84

About the company

Bharti Airtel is one of India's leading private sector providers of telecommunications

services based on an aggregate of 44,676,197 customers as of June 30, 2007, consisting

of 42,703,938 GSM mobile and 1,972,259 broadband & telephone customers. The

company is the largest GSM mobile service provider in the country, based on the number

of customers; it has an all India footprint, with mobile operations in all the 23-telecom

circles of India. The company also provides broadband & telephone services in 94 cities.

The company complements its mobile, broadband & telephone services with national and

international long distance services. For international connectivity to the east, the

company has a submarine cable landing station at Chennai, which connects the

submarine cable - Network i-2-i, connecting Chennai and Singapore. For international

connectivity to the west, it is a member of the South East Asia-Middle East-Western

Europe 4 (SEA-ME-WE-4) consortiums along with 15 otsher global telecom operators,

and has commissioned the fourth generation cable system. SEA-ME-WE-4 supports

telephone, Internet, multimedia and various other broadband and data. The company

provides reliable end-to-end data and enterprise solutions to the top corporate customers

by leveraging its nationwide fiber optic backbone, last mile connectivity in mobile and

broadband & telephone services, VSATs, ISP and international bandwidth access through

the gateways and landing station.

Few Key Milestones

Date of Incorporation July 07, 1995

First private operator to offer fixed line telephony June 04, 1998

Became a public limited company in India February 18, 2002

First Telecom Company to have an all India mobile footprint

(Presence in all 23 telecom circles in India) March 30, 2005

9


10/84

Telecom giant Bharti Airtel is the flagship company of Bharti Enterprises. The Bharti

Group has a diverse business portfolio and has created global brands in the

telecommunication sector. Bharti has recently forayed into retail business as Bharti Retail

Pvt. Ltd. under a MoU with Wal-Mart for the cash & carry business. It has successfully

launched an international venture with EL Rothschild Group to export fresh agri products

exclusively to markets in Europe and USA and has launched Bharti AXA Life Insurance

Company Ltd under a joint venture with AXA, world leader in financial protection and

wealth management.

Airtel comes to you from Bharti Airtel Limited, Indias largest integrated and the first

private telecom services provider with a footprint in all the 23 telecom circles. Bharti

Airtel since its inception has been at the forefront of technology and has steered the

course of the telecom sector in the country with its world class products and services. The

businesses at Bharti Airtel have been structured into three individual strategic business

units (SBUs) - mobile services, broadband & telephone services (B&T) & enterpriseservices. The mobile business provides mobile & fixed wireless services using GSM

technology across 23 telecom circles while the B&T business offers broadband &

telephone services in 94 cities. The Enterprise services provide end-to-end telecom

solutions to corporate customers and national & international long distance services to

carriers. All these services are provided under the Airtel brand.

Bharti Enterprises is one of Indias leading business groups with interests in telecom, agri

business, insurance and retail. Bharti has been a pioneering force in the telecom sector

with many firsts and innovations to its credit. Bharti Airtel Limited, a group company, is

one of Indias leading private sector providers of telecommunications services spanning

mobile, fixed line, broadband and enterprise services. Bharti Airtel was recently ranked

amongst the top 10 best performing companies in the world in the Business Week IT 100

list and emerged as The Second most trusted Brand' in the most trusted Brand 2007

survey conducted by The Economic Times (ET) Brand Equity.

Bharti Airtel is structured into three strategic business units - Mobile services,

Broadband & Telephone (B&T) services and Enterprise services. The mobile business

provides mobile & fixed wireless services using GSM technology across 23 telecom

circles. The B&T business provides broadband & telephone services in 94 cities. The

Enterprise services provide end-to-end telecom solutions to corporate customers and

10


11/84

national & international long distance services to carriers. All these services are provided

under the Airtel brand. Airtel's high-speed optic fiber network currently spans over

40,000 kms covering all the major cities in the country. The company has two

international landing stations in Chennai that connects two submarine cable systems - i2i

to Singapore and SEA-ME-WE-4 to Europe

MOBILE SERVICES:

Bharti Airtel offers GSM mobile services in all the 23-telecom circles of India and is the

largest mobile service provider in the country, based on the number of customers.

ENTERPRISE SERVICES (corporate):

The group focuses on delivering telecommunications services as an integrated offering

including mobile, broadband & telephone, national and international long distance anddata connectivity services to corporate, small and medium scale enterprises.

BROADBAND & TELEPHONE SERVICES:

The group offers high speed broadband internet with a best in class network. WithLandline services in 94 cities we help you stay in touch with your friends & family andthe world.

ENTERPRISE SERVISES(Carrier services):

The Company compliments its mobile and broadband & telephone services with nationaland international long distance services. It has over 35,016 route kilometers of optic fiberon its national long distance network. For international connectivity to east, it has asubmarine cable landing station at. For international connectivity to the west, theCompany is a member of the South East Asia-Middle East-Western Europe 4 (SEA-ME-WE-4) consortiums along with 15 other global telecom operators.

11
http://airtel.in/Level2_t6.aspx?path=2/41http://airtel.in/Level2_t6.aspx?path=2/41


12/84

Vision of Bharti Airtel Ltd.

MISSIONWe will meet global standards for telecom services that delight customer through

Customer service focus

Empowered employees

Innovative services

Cost efficiency

Our Vision

By 2010 Airtel will be the most admired brand in India:

Loved by more customers

Targeted by top talent

Benchmarked by more business.

12


13/84

Services Offered by Bharti airtel ltd.

Telephone Services

NSD/ISD Services

Computerized Trunk Services

Pay Phones

National & International Leased Lines Circuits

Telex

Telegraph Services (Manual & Automatic)

X-25 based Packet Switched Data Network (INET)

Gateway Packet Switched Data Services (GPSS)

Gateway Electronic Data Interchange Service (GEDIS)

Gateway E-Mail and Store & Forward FAX Service (GEMS-400)

Concert Packet Service (CPS)

Satellite-based Remote Area Business Message Network

Electronic Mail

Voice Mail Audio-Text

Radio Paging

Cellular Mobile Telephone

Public Mobile Radio Trunked Service

Video-Tex

Video Conferencing

V-SAT

Internet

ISDN

INMARSAT Mobile Service INMARSAT Data Service

13


14/84

14


15/84

SEGREGATION OF TELECOM SECTOR

The telecom sector has been one of the fastest growing sectors in the Indian economy

in the last 2 years. This has been witnessed due to string competition that has broughtdown tariffs as well as simplification of policy environment that has promoted

healthy competition among various players. Due to this reason telecom density in the

country has risen to 20.52% in FY07 compared to 3.64% in FY01.The telecom sector

is basically divided into three categories which are:

a) Basic fixed line

b) Cellular services

c) Internet

A)Basic Fixed Line: Until 1996 India was a pure fixed line market

TELECOM STATISTICS

Source: TRAI

June2007

DEC 05 Dec 06 June07

Total subscribers 92.76 mn 94.92 mn 225.01 mn.

Tele- density 8.80% 10.80% 20.52%

Fixed line 45.15 mn 55.15 mn 60.23 mn

15


16/84

The players

The fixed line segment was a monopoly sector controlled by govt. until 1996, but after

sector was opened for the private players, there are now 6 private players and 2 states

owned.

SOURCE:COAI

BSNL & MTNL are 2 state owned companies & rests 6 BHARTI AIRTEL, TATATELE

SERVICES, SHYAM TELECOM, HFCL, RELIANCE & HUTCH are all private

players. Where BSNL holds the major share of the market. Then comes Private Sectors

Company BHARTI AIRTEL which holds a major part of market. Both these companies

have a big subscriber base. HUTCH, RELIANCE & MTNL comes one after another.

BSNLMTNL

Bharti (Touch tel)

Tata telecomShyam Telecom

HFCLRelianceHutchIdea

16


17/84

Fixed line operator subscriber base

BSNL with a subscriber base of 34,862,000 is on the first position & then comes

another govt. holding MTNL which has a subscriber base of 4,475,000 .Then

Bharti airtel is the private sectors biggest telecommunication company with a

subscriber base of 609,047 subscribers.

17


18/84

Fixed line market share

BSNL the public sector giant totally funded by government have majority market

share of 86 % in fixed line telephony.

It operates in all over India except Delhi and Mumbai where MTNL operates.

With the entry of more and more private players in the fixed line telephony, thecompetition is becoming fierce; as a result operators are now focusing upon

offering various services to the consumers along with their fixed line connections.

18


19/84

Operators & Their Service Area

OPERATORS SERVICE AREAS

BSNL All over India

MTNL Delhi ad Mumbai

Reliance Gujarat, Haryana, Punjab, Delhi, WB, UP (E)

Bharti Delhi, M.P.

Shyam Rajasthan

Tata Delhi, Gujarat, Maharashtra, Tamil Nadu, AP

HFCL Infotel Only in Punjab

19


20/84

Fixed VS Mobile

The difference between the numbers of fixed line and mobile subscribers is fast

narrowing.

In Delhi, Punjab and Haryana mobile users have crossed over fixed line users already.

This is because of Low tariff structures offered by mobile operators which are attracting

consumers to switch over to mobile phone subscriptions.

This trend has a two way side effect on fixed line telephony

fixed line operators are finding it hard to reduce consumer churn

Their ARPU has taken a big leap downwards

Reduced mobile tariffs could be explained as the most prominent reason for increased

mobile subscriber base. Various facilities like sms, mms, and games etc acts as a majorvariant to attract customers.

20


21/84

Present Trends

Intense consumer shift towards mobile services

Low call tariffs

SMS over fixed line is available

Due to the major shift of customers from fixed to mobile services there is a

fluctuating ARPU

Low subscriber additions

Private operators like Bharti is increasing its market share constantly.

Future challenges

To provide more data services on fixed line

To reduce customers turn towards mobile service.

To provide more facilities to the customers.

To add more number of customers.

To add more number of services to give competition to the Cellure mobile

services.

21


22/84

B) Cellular mobile services in India

Cellular mobile services, started in 1995, are amongst the fastest growing segment. After

a slow start, this sector grew at compound annual growth rate of more than 70 per cent in

FY2000 and FY2001 and is expected to reach a size of nearly 90m by FY08.The cellular

telephony segment has emerged as the fastest growing segment in the Indian telecom

industry.

In fact, the segment achieved a landmark in FY03 when, for the first time, more cellular

subscribers were added than fixed line subscribers.

Industry growth drivers

As India has a vast geographic expanse therefore this act as a catalyst to boost mobility,

As there is a major scope of penetration in many parts of India especially rural India.

Fall in tariffs has fueled the wireless segment since 2002.

The gap of call costs between fixed and wireless services has narrowed as a result

Customers have become more convinced to subscribe to wireless connections

Nationwide roaming facilities on GSP has also attracted the customers

SMS facility

Internet

Reduced cost of handsets (affordability factor)

Customs duties have been reduced from 10% to 5%

In remote areas where providing fixed line connections was difficult, wireless

Did the magic

CDMA fixed wireless gave customers 3 in one advantage Mobility, internet

And messaging.

22


23/84

Evolution of Wireless communications in

India

From 1996 3G licenses were issued for GSM mobiles. After then in 1990-2000 SMS

facility was started .In the year 2002-03 the GPRS & MMS facilities were started which

gave a new competition in the telecom sector. Then there was a great change take place

in the form of CDMA mobiles which came into existence in the year 2003.In the year

2004 onwards

23


24/84

Road to 3G in India

GPRS is widely offered by major operators. BPL was the first operator to Launch GPRS

in India, followed by Airtel, Hutch and Idea. Hutch, Airtel and Idea, are providing EDGE

Networks

24


25/84

Fight over 3G spectrums in India

India's CDMA mobile operators' application for a new band of airwaves for 3G

services has angered the GSM camp in the country. Reliance and Tata have

requested the government to allocate them spectrum in the 1900 MHz band.

GSM operators Bharti, Hutch, Idea, Bharat Sanchar Nigam Ltd and Mahanagar

Telephone Nigam are opposing the proposal, saying it would Interfere with their

current mobile phone service and also block their migration to 3G services. The

companies, through the Cellular Operators' Association of India (COAI), have

also asked the government to reserve the radio frequency specifically for offering 3G

services and not to allocate it to CDMA operators.

GSM operators need the 1900 band when they migrate to 3G UMTS networks. In

a submission made to the Telecom Regulatory Authority of India by COAI, "The

allocation of the PCS 1900 band would not only result in a major interference to

the services offered by operators using GSM technology but also block the

progress of 30 million subscribers to 3G."

Interfere happens when the uplink for the 1900 band clash with the downlink in

the 1800 band, which is allocated to GSM services. While the downlink for the

1900 band interferes with the IMT 2000, which is the uplink mode for 1920-1980

MHz paired with 2110 to 2170 MHz (the core band identified by the ITU for 3G

services).

CDMA operators are allowed to offer services using spectrum in the 1800 MHz

band but is seeking for the 1900 band instead. They say equipment

for 1800 MHz is either not freely available or is very expensive and with the

exception of South Korea most countries are deploying next generation CDMA

services in 1900 MHz. In addition they said they are willing to share the band

with GSM operators.

25


26/84

The GSM camp argues that a number of firms make equipment and handsets for

the 1800 band. More importantly, 3G equipment for GSM is available only for the

1900 band and nowhere else.

Market share of mobile

When we talk about the market share of mobile companies then BHARTI AIRTEL is the

biggest company with a market share of 20.62% in 2005 July but now the percentage has

been raise up to 31%.then comes government owned BSNL 18.30%in 2005 July & in

July 2007 this percentage is also raised to 20. %. After then VODAPHONE HUTCH

comes with a increased percentage of ..% in July 2007.

26


27/84

Prepaid vs. Postpaid Subscribers

27


28/84

GSM (Global System for Mobile

Communication)

GSM was first introduced in 1995 and is one of the fastest growing markets in theworld.

There are 35 networks on 900 MHz, 11 on 1800 MHz Technology.

The digital mobile communication standard GSM (Global System for Mobile

Communication) is deployed in India, using the 900 MHz and 1800 MHz

frequency bands.

The Indian telecommunication market is divided into 24 circles, with up to four

GSM licenses being awarded in each. There are also four metropolitan (metro)

districts: Mumbai, New Delhi, Chennai and Calcutta.

Globally the GSM subscribers continue to grow at a rapid pace. At the end of

March'06 there were 1.79 billion GSM subscribers constituting nearly 75% of the total cellular market.

In FY-06, 476 million cellular subscribers were added, out of which GSM

additions were 424 million constituting nearly 90% of the total additions.

GSM added over 100 million new subscribers in only three months, thus

averaging over 1 million net additions every day throughout the whole of 2005.

The world beating performance pushed the number of GSM subscribers to over

1.56 billion by end September 2005.

28


29/84

GSM operators

:

29


30/84

s

Source: India infoline.com

GSM Market share

30


31/84

Bharti Tele-Ventures led the way, adding 1.12mn customers in the quarter, contributing

close to 30% to the overall additions for the quarter. Bharti came up with new schemes

and also ventured into 3 new circles during the quarter.

CIRCLEWISE BREAK UP OF SUBSCRIBERS

City/Circle OperatorsJan'2006 Feb'2006 Mar'2006

Metros

Delhi

Bharti Tele-Ventures

1895680 2014989 2074987

Hutchison Essar1742136 1777191 1879226

MTNL

742647 790476 936146

IDEA

832183 848852 866966

31


32/84

MumbaiBPL Mobile

1334272 1337104 1337589

Hutchison Max1838818 1898911 2003469

MTNL

888027 929334 1005009


1135954 1222193 1232502

ChennaiAircel Cellular Ltd

677815 685409 712291

Bharti Tele-Ventures610968 632540 669065

Hutchison Essar

375328 414343 436405

BSNL

509118 513415 578191

KolkataBharti Tele-Ventures

604661 609471 643291

Hutchison Telecom869113 937127 1004531

BSNL

403538 412023 430646

Reliable Internet19191 30255 49551

All Metros Total14479449 15053633 15859874

A' CircleMaharashtra

BPL Cellular683651 708799 733754

IDEA 1631574 1693966 1782041


BSNL

1056053 1056053 1134249

Gujarat Fascel 2012797 2174113 2257450

IDEA 914163 965773 1025265

Bharti Tele-Ventures 791524 830306 859423

BSNL827750 827750 899205

32


33/84

A.P. IDEA 850858 882131 934541


Hutchison Essar 756395 800145 848296

BSNL 1053728 1118355 1246499

Karnataka


2001370 2003825 2132204

Spice Comm 366263 398711 432067

Hutchison Essar 964612 1013723 1088763

BSNL 1112005 1194488 1284887

T.N. BPL Cellular 467216 483406 500242

Aircel Limited 1602380 1637342 1684267

BSNL 1339658 1405839 1465000


A' Circle Total 21876761 22977143 24332549

B' CircleKerala Idea Mobile Comm. 768101 783096 796354

BPL Cellular 431102 443120 463700

Bharti Cellular 529444 571328 610772

BSNL 1425438 1518117 1604180

Punjab Spice Comm. 1351215 1421560 1501341


BSNL 383020 371299 371756

Hutchison Essar 605837 634342 658923

Haryana Idea Mobile Comm. 273456 291179 311602

Aircel Digilink 344998 372456 373801

Bharti Cellular 384948 396666 423387

BSNL 482490 481805 485783

U.P.(W) Ideal Mobile Comm. 813111 858609 920697

Bharti Tele Ventures 519132 525770 549369

BSNL 892797 914086 943776

Hutchison Essar 501369 561391 613413

U.P.(E) Aircel Digilink 1209445 1289843 1392498

BSNL 1581512 1588530 1609488


33


34/84

Escorts Telecomm. 148 246

Rajasthan Aircel Digilink 527136 559914 601292

Bharti Hexacoms 918233 1020315 1023163

BSNL 953830 1018085 1099415


M.P. IDEA 649095 681128 728520

Reliance Telecom 500159 513292 529146


BSNL 387966 389821 471839

W.B. & A&N Reliance Telecom 227410 239388 260760

BSNL 583060 655055 716634


Hutchison Telecom 417158 462205 505245

Dishnet Wireless 7522 14390 27709

B' Circle Total 20449705 21504548 22725419

34


35/84

C' CircleH.P. Bharti Tele-Ventures 332955 343460 357382

Reliance Telecom 62030 62578 63027

BSNL 210166 212796 220134


Bihar Reliance Telecom 502281 503642 510396

BSNL 782889 869675 927557


Orissa Reliance Telecom 179906 189821 203759

BSNL 476399 524522 560644



Assam Reliance Telecom 185053 192056 205672

BSNL

308346 336824 377038



N.E. Reliance Telecom 53818 69091 81717


BSNL 176853 191074 227365


Jammu & Kashmir BSNL 426384 461294 504483


DIshnet Wireless 2445 8337 25714

C' Circle Total 5213229 5653226 6275479

All India Total 62019144 65188550 69193321

35


36/84

Wireless Subscribers Growth GSM

The subscriber growth saw a phenomenal increase from 2002 onwards. This was mainly

due to lowered call tariffs and full scale implementation of SMS services all over India.

December 2002, where India touched the 10 million mark could be defined as a

milestone for Indian wireless industry. Subscriber growth continued from 2002-03.

Two main elements for this phenomenal growth are

1. Lowered call tariffs

2. Free incoming calls

Consumers who were once reluctant to subscribe to mobile subscriptions founded

feasible and convenient to avail as now there was hardly any difference between the

monthly bills compared to fixed line, and mobility was definitely a crucial element.

The above phenomenon in India is taking shape because of the presence of huge middle

class population. On an estimate there are some 300 to 350 million people belonging to

this group in India. Unlike a car or a television set (where one is enough in the family)

with the lowered call tariffs it became possible even for family members to own a mobilephone each.

36


37/84

Market Developments since 2001

India is a vast country with over 3000 Kms of distance from north to south and similarly

from east to west. Covering this huge scope of land became a challenging task for the

operators, as a result many failed and vanished from the business because the industry

demanded huge capital investments and some of them were of course unable to do so.

The above scenario triggered two situations:

Smaller operators sold their licenses to big players

The bigger players seeing an opportunity to expand, acquired smaller operators

37


38/84

ARPU

The Average Revenue per User (ARPU) of GSM operators is steadily declining. This

trend of declining ARPUs and increasing revenues is purely because of the rising

subscriber base. With more customers going mobile, they are spending less on talk time.

However, the subscriber base expanded, leading to revenue increase for the operators.

Declining due to a sharp fall in tariffs.

Average Revenues per User (ARPU) declines yoy.

Average revenue per user is an important parameter in determining the profitability of

operators. The ARPUs of the private GSM operators dropped 21% yoy from Rs 479 per

subscriber in Q3 FY04 to Rs 396 per subscriber in Q3 FY05. ARPU also fell by 1.51%

yoy. Thus; the affordability of services for subscribers was further enhanced during the

year, which in turn fuelled subscriber growth.

38


39/84

During the days when incoming was not free, operator ARPU was almost twice as that of

today. Despite of offering various data services over their networks, operators have been

unable to uplift the ARPU. This shows that India still is mainly a voice market.

On an estimate 80% of operator revenues are voice based and the remaining 20%

Constitute of all the data traffic.

In such a scenario, operators have a big challenge not only to introduce more and more

attractive content but also to see that they add new subscribers on the basis of content not

voice. This however will be a big challenging task for Indian operators as promoting data

services where roughly 45% of the population is still completely illiterate. To add to the

complexity is the language scenario in India. There are 18 languages and 844 dialects and

offering streamlined data services in all of these languages are by no means a simple task.

The average revenue per user (ARPU) of mobile telephone companies is on the declineand India has one of the lowest ARPU in the world.

According to information available with the Telecom Regulatory Authority of India

(Trai), (Nov 06).

Country ARPU MOU

India $11 309

China $10 261

US $57 619

Canada $39 344

Korea $35 316

Columbia $11 --

In terms of revenue per minute,

India ranks the lowest with $0.04. China also has the same average revenue per minute of

$0.04.

39


40/84

Expansion Strategy of GSM Operators

Operators are constantly seeking to consolidate their standing in the market. Indian

telecom regulations limit the number of operators in each circle to four but it does not

limit operators acquiring each other. Airtel and Hutch have been very active in these

mergers and acquisition activity. Hutchison Telecom (Hutch) recently acquired Aircel

which operated in state of Tamil Nadu .Similarly; Airtel acquired Hexacoms licenses for

states of Rajasthan and few northeastern states.

40


41/84

CDMA

CDMA was started in March 2003. There was a big debate in India just before the

launch of CDMA services that will it succeed or not? Recent trends reveal that

CDMA is here to stay, but that doesn't mean that it is going to overpower GSM.

Nationwide roaming helped to boost subscribe base, option of connecting to

internet using a simple data cable proved as a catalyst in promoting CDMA

services in India.

The call tariffs over CDMA were initially lower as compared to GSM but today

CDMA and GSM call tariffs are moreover same.

Reliance Infocomm was the first private operator to start with the CDMA services

in India. However, BSNL and MTNL offered CDMA before Reliance but they

were unable to tap subscribers. Reliances strategic alliance with LG and

Samsung to offer their handsets along with their subscriptions proved to be a

catalyst in the process.

Tata Indicom which was the second private operator to offer CDMA services

initially failed to attract consumers but since early 2004, it has revived its strategy

and has been able to gain some market share.

41


42/84

Net Additions Of the total subscribers added in Q3 FY05, Reliance contributed over

85%. Reliance added over 1mn customers for the quarter ended December 31, 2006.

Operators WLL/CDMA

42


43/84

Market Share

By year-end 2005, there will be some 2 billion cellular mobile subscriptions

worldwide, cementing the mobile phones position as the most rapidly-growing

and widely-adopted technology of all time.

Cellular mobile will remain the dominant mobile and wireless technology in

2005.

By the end of the year, there will be nearly 2 billion subscriptions worldwide.

Voice will continue to be the primary source of cellular mobile revenues,

typically accounting for more than 80 percent of total revenue. Price competition

will drive voice margins down, but overall demand will continue to grow

strongly. As a result, 2G networks will increasingly become cash cows capable of

generating EBITDA margins of 45 percent or more. Additionally, a significant

minority of voice customers will take a second 2G subscription for data for

instance, a mobile e-mail device creating a strong likelihood of mobile

penetration surpassing 100 percent in some markets. This will have a real and

immediate impact on average revenue per user, making 2005 a very positive year

for 2G. Dozens of 3G networks will go live in 2005. Customer interest will

initially generally be low due to poor handset performance, disappointing network

quality and a lack of compelling benefits. However, mobile operators have faced

43


44/84

this same situation several times before whenever their network technologies

have changed and skepticism will turn to optimism by year-end. Indeed, before

The year is over, operators and equipment vendors will likely be delivering a 3G

experience that is comparable to 2G. And by 2006, 3G handsets, networks and

services will in many cases be noticeably superior to their 2G forebears.

On both platforms, messaging will continue to be the primary source of non-voice

revenue growth. Chat, instant messaging and other emerging services will grow

substantially, taking up the slack as SMS growth declines. Beyond 2G and 3G,

many operators will continue spreading their bets adopting new technologies in

rapid succession to the detriment of their customers and shareholders. WiFi

hotspots will be a prime example, with numerous companies fighting to expand

their share of a declining market.

Meanwhile, the most compelling and lucrative mobile content will likely continue

to be ring tones (already a $2 billion industry), wallpaper, and other simple forms

of personalization and self-expression.

c) Internet

Internet made its entry in India in the year 1995 when VSNL (Videsh Sanchar

Nigam Limited) started with dial-up connections. The first five years of internetin India could be defined as an incubatory stage where speeds were limited to

maximum of 64 Kbps ISDN. Initially and even today most of the home users used

to access internet over 28.8 K and 56 K modems.

Using internet over phone connection with a modem has two disadvantages, first

the phone line is blocked and then one is subjected to pay the regular call charges.

This syndrome still exists today with the home users but they still prefer using

internet through 28.8 K-56 K modems at home. This situation means that there is

a huge potential for broadband service providers to attract customers for their

services but only at prices which are affordable. Always on connectivity will help

users (both home and corporate users) to keep their phone lines free and avoid call

charges.

44


45/84

Broadband is a collective term for a group of technologies that enable high-speed

Internet access, at speeds of up to two megabits per second (Mbps). That is up to

40-times faster than the conventional dial-up medium.

In India, the broadband push has only just begun with DSL, cable and wireless

options. Traditional dial-up access is being augmented and in some cases replaced

by new, more robust access media. To put India on the growth track, 20 million

broadband users and 40 million Internet subscribers are being targeted by 2010.

The estimated broadband connections in India grew by a whopping 236 percent in

2004 over 2003. But the penetration of broadband is abysmal - 4 users to every

10,000 people and so is the quality of broadband available here.

Other countries in the Asia-Pacific region had much better broadband penetration,

with the entire region seeing the number of users leap 50 Percent during the year.

There were 6.2 crores broadband users across the region by December 2006

compared to 4.1 crores in 2005.

Thailand was the fastest growing market with a growth of more than 1,000

percent, while, the others - Malaysia, China, and Australia - at least doubled in

growth.

China, despite having a huge broadband user base and the biggest broadband

market in the region with above 21 million connections, continued to convert dial-

up customers to broadband, growing by another 100 percent. However, the overallpenetration rate there too remained low.

Despite the growth seen in 2006 the broadband penetration divide between Asian

countries is more extreme than anywhere else in the world and getting more so, It

is not just a matter of the penetration of the services, but the access speeds on

offer vary widely too.

Provider: techtree news staff

45


46/84

Industry Developments

There is a big way to go for the Indian internet industry still. Although it has been almost

10 years since internet came to India there has been less progress on the bandwidth front.

Cyber cafes initially chose 64 Kbps ISDN connection to run multiple PCs. Today these

cyber cafes are opting for either smart wireless or DSL broadband.

Home users in metropolitan cities have chosen between regular 56 K modem connections

Or internet over cable TV.

Cyber caf business is not doing well at least in metropolitan cities because the home

users which used to visit their cafes earlier to access internet now have option to access

internet either over cable TV connection or through smart wireless or subscribe to a 64

Kbps always on connection (not over phone line)

46


47/84

Access modes

Out of the entire dial-up segment almost 80% are home users. The rest 20% is shared by

small businesses. In a small internet population of 6 million subscribers majority of the

market share is still with the dial-up connections. Today 55% internet users use net

through DIAL UP connections. 17% through LEASED LINES, 10% through ISDN,

other 10% through DSL & rest 8% through other ways.

47


48/84

Major ISPs in India

Applogic Broadband Bharti BT BSES Telecom

BSNL Capital Cyberwave Internet

Dishnet DSL Hathway Cable In2Cable

India Online Ipeaks Landsat

MTNL Primus Reliance

Satyam Infoway Sigma Online Spectranet

Tata Indicom Touchtel Wipro Net

Zeenext

48
http://broadband.org.in/isp/index.asp?showISP/451D4696/6449/4D03/903A/9A800706BCA8http://broadband.org.in/isp/index.asp?showISP/468CFF9E/45BF/48BD/88BB/F397BC6D38A7http://broadband.org.in/isp/index.asp?showISP/7DA9A7DA/1EA8/41D7/8D42/B6FD896E2118http://broadband.org.in/isp/index.asp?showISP/9F027BF4/01DE/41BF/8392/472F99597DDFhttp://broadband.org.in/isp/index.asp?showISP/71BCC774/3952/4CCB/8A9C/1569C66FE1CChttp://broadband.org.in/isp/index.asp?showISP/6FB94F19/0E9D/4405/A454/0D7FF9F51026http://broadband.org.in/isp/index.asp?showISP/EB1080B1/2CD3/46A2/91C3/89E64A699EB7http://broadband.org.in/isp/index.asp?showISP/D701A803/131F/4794/ACC1/9DCC68ECF837http://broadband.org.in/isp/index.asp?showISP/A8E24E0D/4E42/45D4/916A/59D1F5EE4B78http://broadband.org.in/isp/index.asp?showISP/9BFE7956/3283/49D4/9BEC/4C2E72CA31E8http://broadband.org.in/isp/index.asp?showISP/A686F4D8/1F00/44C2/8A33/F1A0C4B53E4Fhttp://broadband.org.in/isp/index.asp?showISP/8E102B58/62D9/4B1A/ABC1/8F58C1210E44http://broadband.org.in/isp/index.asp?showISP/C359636E/43E0/48FD/9943/DB24F7C4EFA0http://broadband.org.in/isp/index.asp?showISP/C93D5557/AF19/481B/869A/F1024584BFF5http://broadband.org.in/isp/index.asp?showISP/EB364EF7/3B4D/4D2D/8935/C214ADB262CBhttp://broadband.org.in/isp/index.asp?showISP/A90AE470/8E47/4EBC/8934/EEE7728A5BC5http://broadband.org.in/isp/index.asp?showISP/3C534ABA/FB84/4A8D/BD11/1DAEE906469Fhttp://broadband.org.in/isp/index.asp?showISP/8EF26628/16AC/456F/962C/5A13BE1E6AF0http://broadband.org.in/isp/index.asp?showISP/1D089A9F/724C/48C7/A798/8036FB6025F0http://broadband.org.in/isp/index.asp?showISP/59AC2935/9D7D/4E83/955F/DE7E19AB7E51http://broadband.org.in/isp/index.asp?showISP/50E4B5EF/5054/4E18/9470/D36C915B3203http://broadband.org.in/isp/index.asp?showISP/C341D941/4ECE/4EA3/913F/D6788D8162EBhttp://broadband.org.in/isp/index.asp?showISP/451D4696/6449/4D03/903A/9A800706BCA8http://broadband.org.in/isp/index.asp?showISP/468CFF9E/45BF/48BD/88BB/F397BC6D38A7http://broadband.org.in/isp/index.asp?showISP/7DA9A7DA/1EA8/41D7/8D42/B6FD896E2118http://broadband.org.in/isp/index.asp?showISP/9F027BF4/01DE/41BF/8392/472F99597DDFhttp://broadband.org.in/isp/index.asp?showISP/71BCC774/3952/4CCB/8A9C/1569C66FE1CChttp://broadband.org.in/isp/index.asp?showISP/6FB94F19/0E9D/4405/A454/0D7FF9F51026http://broadband.org.in/isp/index.asp?showISP/EB1080B1/2CD3/46A2/91C3/89E64A699EB7http://broadband.org.in/isp/index.asp?showISP/D701A803/131F/4794/ACC1/9DCC68ECF837http://broadband.org.in/isp/index.asp?showISP/A8E24E0D/4E42/45D4/916A/59D1F5EE4B78http://broadband.org.in/isp/index.asp?showISP/9BFE7956/3283/49D4/9BEC/4C2E72CA31E8http://broadband.org.in/isp/index.asp?showISP/A686F4D8/1F00/44C2/8A33/F1A0C4B53E4Fhttp://broadband.org.in/isp/index.asp?showISP/8E102B58/62D9/4B1A/ABC1/8F58C1210E44http://broadband.org.in/isp/index.asp?showISP/C359636E/43E0/48FD/9943/DB24F7C4EFA0http://broadband.org.in/isp/index.asp?showISP/C93D5557/AF19/481B/869A/F1024584BFF5http://broadband.org.in/isp/index.asp?showISP/EB364EF7/3B4D/4D2D/8935/C214ADB262CBhttp://broadband.org.in/isp/index.asp?showISP/A90AE470/8E47/4EBC/8934/EEE7728A5BC5http://broadband.org.in/isp/index.asp?showISP/3C534ABA/FB84/4A8D/BD11/1DAEE906469Fhttp://broadband.org.in/isp/index.asp?showISP/8EF26628/16AC/456F/962C/5A13BE1E6AF0http://broadband.org.in/isp/index.asp?showISP/1D089A9F/724C/48C7/A798/8036FB6025F0http://broadband.org.in/isp/index.asp?showISP/59AC2935/9D7D/4E83/955F/DE7E19AB7E51http://broadband.org.in/isp/index.asp?showISP/50E4B5EF/5054/4E18/9470/D36C915B3203http://broadband.org.in/isp/index.asp?showISP/C341D941/4ECE/4EA3/913F/D6788D8162EB


49/84

Market Share of Leading ISPs

In the ISP market BSNL the public sector giant totally funded by government is

leading the market with a market share of 25% which is followed by another government

holding MTNL with a market share of 17%. Then comes private sectors company SIFY

LTD with its market share of 17%.

49


50/84

Crux: Number of users is continuously increasing

50


51/84

ITES.What actually it means?

ITES means IT-enabled services. It is that sector of Information Technology (IT)

Industry which aims at providing various services, through the use of IT. ITES sector

includes services ranging from call centers, claims processing, medical transcription, e-

CRM, SCM to back-office operations such as accounting, data processing, and data

mining.

In other words Information Technology-Enabled Services, or ITES, involve business

processes and services that extensively utilize components of information communication

technology (*ICT) such as software, hardware and the Internet. As opposed to the

manufacturing industry where products are physically visible, the raw materials in the

ITES industry are data, information and knowledge. The industry is often referred to as aknowledge-based industry; as such, the products and services provided are less

tangible.

The following are not included in the definition of ITES, despite these enterprises

use of ICT: any manufacturing; local branches of global businesses (e.g. banks); and

virtual businesses that exist only on the Internet.

It is also important to note that although the term IT Enabled Services leads with the

phrase IT, many business processes within this sector would not be classified as

technology businesses. Financial accounting services, for example, are typical

administrative functions that fall within ITES but are not within the technology sector

(like software), although accounting back offices utilize IT tools such as high-end

accounting databases.

The Indian IT-enabled outsourcing market has its roots in the mid-1990s when companies

such as American Express, British Airways and GE Capital setup captive units for

customer support and transaction processing services. Independent BPO vendors began

emerging in the late 1990s, and in the recent

Months, IT services companies have also made a foray into the IT-enabled outsourcing

realm.

51


52/84

Over the past decade, India has emerged as a preferred location for organizations

planning to outsource a variety of services ranging from call centers and other customer

interaction services, insurance claims processing, payroll processing, medical

transcription, e-CRM and SCM, to back-office operations such as accounting, data

processing, and data mining.

* ICT, Information & Communications Technology: Electronic means of capturing,

storing and communicating information. Modern ICT generally includes telephones, fax,

photocopiers, computer hardware and software, and the Internet (e-mail and Web).

According to Nasscom, the following areas come under the ambit of IT-Enabled

Services:

Customer Interaction Services (including call centers).

BPO/Back office operations/revenue accounting/data entry/data conversion

(including finance and accounting)/HR services

Medical Transcription/translation services

Legal databases

Digital Content development

Engineering and Design services

Support Centers

Payroll/HR services

Website services

Data Digitization/GIS and Online education

Network consultancy and management

Other services including data search and market research

52


53/84

Classification of ITES

IT enabled services can be classified mainly on the basis of level of complexities in

service offered and required expertise. Mckinsey has done the classification on fourbroad parameters.

Service factory is back-end off-shore processing (indirectly to customers)

Process Exportspecializes in processing payroll, general accounting etc.

(indirectly to customers)

Service line aggregates specialize in a group of related processes like payroll and

benefits (directly to customers)

Bundled services providers offers combined IT outsourcing and BPO. (directly to

customers)

Globally there are four types of IT-enabled services vendors who differ by origin and

focus

In-house/captive centers

Spin-offs

Focused BPO providers

Broad based services providers

While in-house providers account for the bulk of the activity at present, the services

provided by the other three are growing rapidly.

Two broad categories are clearly visible in the current vendor landscape.

In-house providers -Out locate business processes to low cost, high skill offshore

locations (e.g. India,Ireland,philippiness)using multiple models(e.g. global hubs,

regional centers)and outsource the non-core processes to third party vendors.

53


54/84

Third party providers -Offers distinct value proposition to customers in terms of

services offered and are rapidly growing in scale.

Indian ITES companies are also undertaking projects in the following areas and

segmented along similar lines:

Customer care :This includes database marketing, customer analytics,

telesales/telemarketing, inbound call centers, Web sales and marketing, sales and

marketing administration

Finance: This covers billing services, accounting transactions, tax consulting and

compliance, risk management, financial reporting and financial analysis.

Human resources :Areas such as administration, education and training, recruiting

and staffing, payroll services, hiring administration, records management are

covered here

Payment services :These include credit/debit card services, cheque processing,

transaction processing

Administration :This covers tax processing, claims processing, asset management,

document management, transcription and translation

Content development :This area includes engineering, design, animation, network

consultancy and management and biotech research

54


55/84

India's comparative position

Ireland, Canada, Brazil, Mexico, China, Philippines and Malaysia are some of the other

attractive locations for the ITES industry. Ireland has the advantage of good

infrastructure and a vast pool of graduates. However, these graduates have several other

job options available to them resulting in shrinkage of the labour pool available to the

ITES industry. This has led to import of significant talent into Ireland, which in turn has

lowered the country's labour cost advantage. Canada has low economic and political

risks. Moreover, real estate prices and salaries are low compared to the US, though they

are high compared to India. Canada is ideal for complex businesses that require proximity

to the US. BP, Amoco, Siemens and Compaq have chosen Canada for their BPO

operations. Mexico and Brazil also have the advantage of proximity to the US along with

low labour costs. Moreover, Brazil has invested heavily in IT and telecom. Mexico'sadditional strength is its Spanish language skills. AOL-Time Warner, Federal Express,

Shell and Computer Sciences Corporation have BPO units in Mexico.

Among the Asian countries, Malaysia is facing scarcity of skilled workforce resulting in

rising labour cost. China and Philippines can emerge as serious competitors to India in

the long-run as both have large number of graduates for the ITES industry. However,

Philippines would need to improve on its infrastructure base to build a sizeable ITES

industry. The country lags behind in infrastructure like access to networks and fiber optic

backbones, which has resulted in high cost bandwidth. Some of the companies that have

BPO operation in Philippines are AOL-Time Warner, Barnes & Nobel Online, Federal

Express, Caltex, AIG, Amex, Citibank and Procter & Gamble. China's greatest strength is

low labour cost. However, insufficient proficiency in English language is a major hurdle

for the country. The country is actively encouraging English speaking in its schools and

colleges to counter this problem. Some of the Companies that have chosen China for their

BPO operations are Microsoft and HSBC.

India with its vast pool of cheap graduates and proficiency in English speaking is well

positioned as an ITES destination. With the liberalization of telecom sector, the country

has also scored to some extent on the infrastructure front. However, India should not

focus on cost advantage alone. The Indian industry should focus on better Productivity,

superior management practices and project management.

55


56/84

SWOT analysis on Indian ITES sector

Strengths:

a) Highly skilled, English-speaking workforce.

b) Cheaper workforce than their Western counterparts. According to Nasscom, The

wage difference is as high as 70-80 percent when compared to their Western

counterparts.

c) Lower attrition rates than in the West.

d) Dedicated workforce aiming at making a long-term career in the field.

e) Round-the-clock advantage for Western companies due to the huge time

difference.

f) Lower response time with efficient and effective service.

Weaknesses:

a) Recent months have seen a rise in the level of attrition rates among

ITES workers who are quitting their jobs to pursue higher studies. Of late workers

have shown a tendency not to pursue ITES as a full-time career.

b) The cost of telecom and network infrastructure is much higher in

India than in the US.

56


57/84

Opportunities:

a) To work closely with associations like Nasscom to portray India as the most

favored ITES destination in the world.

b) Indian ITES companies should work closely with Western governments and

assuage their concerns and issues.c) India can be branded as a quality ITES destination rather than a low-cost

destination.

Threats:a) The anti-outsourcing legislation in the US state of New Jersey. Three more states

in the United States are planning legislation against outsourcing Connecticut,

Missouri and Wisconsin.

b) Workers in British Telecom have protested against outsourcing of work to Indian

BPO companies.

c) Other ITES destinations such as China, Philippines and South Africa could have

an edge on the cost factor

Source: Express Computer

57


58/84

Important ITeS cities in India

Key Indian citiesCity Focus Prominent firms Employees

Delhi

(includes

Gurgaon and

Noida)

Call centres,

transaction processing,

chip design, software

GE, American Express,

STMicroelectronics, Wipro

Spectramind, Convergys, Daksh,

ExL

73,000

Mumbai Financial research,

back office, software

TCS, MphasiS, i-flex, Morgan

Stanley, Citigroup

62,050

Bangalore Chip design, software,

boi-informatics, call

centres, IT consulting,

tax processing

Infosys, Wipro, Intel, IBM, SAP,

SAS, Dell, Tisco, TI, Motorola,

HP, Oracle, Yaho, AOL, E & Y,

Accenture

109,500

Hyderabad Software, back office,

product design

HSBC, Satyam, Microsoft 36,500

Chennai Software, transaction

processing, animation

Cognizant, World Bank, Standard

Chartered, Polaris, EDS,

Pentamedia

51,100

Kolkata Consulting, software PwC, IBM, ITC Infotech, TCS 7,300

Pune Call centres, chip

design, embedded

software

MsourcE, C-DAC, Persistent

Systems, Zensar

7,300

58


59/84

Top ITES companies

Rank Company

1. EXL Services.com (I) Pvt. Ltd.

2. Daksh eServices Pvt. Ltd.

3. GTL Ltd.

4. Spectramind

5. Datamatics Technologies Ltd.

6. Tracmail India Pvt. Ltd.

7. Brigade Corporation

8. Epicenter Technologies Pvt Ltd

9. Firstring

10. 24/7 Customer

Source: Nasscom

"Super Nine" Indian ITES Destinations

RANKING OF INDIAN ITESCITIES

CITY RANKHYDERABAD 1

KOCHI 2CHENNAI 3KOLKATA 4

AHMEDABAD 5BANGALORE 6MUMBAI 7NCR 8PUNE 9

59


60/84

The top nine cities include Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, Kochi,

Mumbai (including Navi Mumbai), Pune and NCR (Delhi, Noida and Gurgaon). The

cities are assessed on factors such as manpower availability, real estate, telecom

infrastructure, policy initiatives, power infrastructure, city perception and entrepreneurialhistory.

About 90% of all ITES companies in India are concentrated in nine major cities while

others have not been able to attract more than two companies each. A large number of

ITES companies being based in Mumbai, NCR and Bangalore, these cities are facing

increasing competition from other cities. Cities such as Hyderabad and Kochi are

emerging as attractive ITES destinations primarily due to rapid improvements in

infrastructure (power, international bandwidth and urban transportation) and lower

manpower costs due to lower cost of living and lack of alternative employment

opportunities in these cities.

According to NASSCOM, the ITES industry in India is experiencing the third wave of

growth; both in terms of geographical areas of operation and services offered In the first

phase, the industry was dominated by captive centers of large multinationals such as GE,

American Express, and Swiss Air who set up operations in leading metros of the country

such as Delhi and Mumbai

In the second phase, the growth of the industry attracted numerous entrepreneurs(in many cases, employees of multinationals who quit their jobs to set up theirown ITES ventures) again in and around Delhi (NCR) and Mumbai (includingNavi Mumbai)

The third phase of growth has been more geographically dispersed - with newlocations emerging such as Hyderabad, Pune, Bangalore, Chennai, and morerecently, Kochi.

60


61/84

The growth has been driven by three factors: The desire by state governments to attract entrepreneurship, which resulted in the

former offering attractive policy environments and incentives The rapid improvement in key infrastructure such as power, telecom bandwidth,

and real estate in newer locations The need for ITES companies to lower operating costs (especially employee

costs, and transportation

Hyderabad has emerged as the most competitive city for ITES. Chennai, Kochi and

Kolkata too rank highly in their infrastructure offerings, policy incentives, and low cost

manpower availability though not at the same level as Hyderabad. On the other hand,

Ahmedabad, which ranks highly on availability of low cost manpower, loses out on

competitiveness as a result of weaker policy incentives and infrastructure availability.

Bangalore, Mumbai, NCR and Pune ranked low in infrastructure availability, policy

support and availability of low-cost manpower.

61


62/84

In recent years, the IT-Enabled Services (ITES) sector has

posted the highest growth among all the segments in India's

growing software and services marketplace, reaching

revenue of Rs.1215900 crores in 2004-05. The industry,

which has grown almost five-fold since 2000, recorded a

CAGR of 28 percent for the 2000-05 periods. The ITES

industry's contribution to the nation's GDP rose from 1.2percent in 1997-98 to touch 3.5 percent in 2003-04. With a

growth of around 31 percent during 2004-05, the sector has

about 4.1 percent of the GDP.

According to a study conducted by Nasscom, this growth is in line with overall global

industry trends, and is likely to continue over the next few years. In the ITES sector, the

captive units of global corporations continue to dominate the scene. The share of captives

Growth of ITES Industry

Year US$ mn

2000 565

2001 930

2002 1,495

2003 2,300

2004 3600

Estimated growth

2008 21000-24000

62


63/84

in ITES exports for 2005-06 is estimated to be 56 per cent. The disparity in growth rates

of large Indian third party vendors (TPVs) and other players in the industry are also

significant. While large Indian players have grown exponentially over the past 2 years,

other players within the industry have registered a CAGR of 13 per cent over the 2-year

period

.

Business intelligence major International Data Corporation (IDC) has predicted that the

IT-enabled services market globally will account for revenues of US$ 1.2 trillion by

2006. With growth projected at 11 percent annually, the ITES segment will be one of themost significant business opportunities for the Indian software and services industry.

.

Propellers for growth

The Global market for ITES sector is expected to be around US $ 611 billion by 2005

and India is expected to capture at least 10% of it. Lots of people, with basic education

and a mastery over English-this is Indias strength points out an industry expert. This is

why China and Philippines have not been able to dominate the ITES market; though they

have cheap labour, they are not yet fluent in English. Thus the Indian ITES industry

remains buoyant, at least till China catches up. Currently employing about 106,000

people in India, the ITES industry is estimated to give employment to more than one

million people by 2008.

63


64/84

Threats faced by the Industry

Global Backlash

The industry is facing an unprecedented backlash globally against the outsourcing of

work to India. Protests in USA, UK and Australia are already rising at an alarming rate.

E-Funds, a US based corporation has even been forced to transfer some jobs from itsMumbai operations back to the US because of huge protests.

Threat from Other markets: Markets like China, Philippines and Ireland with cheap and

skilled labour pose a large threat to the Indian ITES sector

Lack of Expansion

The industry soon faces risks like continuously expanding the pool of talent and

education. Lack of fluency in European languages like French, Spanish, Italian i.e.

languages other than English, is Indias weak point.

Watch Out For

Banking and insurance is likely to provide the maximum opportunity to the ITES

industry due to a high cost base and a large number of processes which can be

outsourced.

64


65/84

ITES: Expanding opportunities

Today India and Ireland surpass all other competitors in terms of employment, number of

companies sourcing ITES and the spectrum of verticals and services lines they offer. The

Indian ITES Industry is also expected to account for 37% of the total IT software and

Services export market in India by 2008.

Off shoring opportunities for Indian ITES players exist both across a wide range of

processes as well as across multiple verticals. Banking and insurance are likely to provide

the maximum opportunity driven by the high cost base and high extent of offshorable

processes in these verticals. In addition, six other verticals - telecom, retailing, utilities,

automotive, computer and pharmaceuticals, also offer immense growth potential.

ITES opportunities by 2008

Service Lines $billion

HR 3.5 4

Customer Care 8 - 8.5

Payment services 3 - 3.5

Content development and

others2.5 3

Administration 1.5 2

Finance 2.5 3

Total 21 24

65


66/84

RESEARCH METHODOLOGY

66


67/84

ELEMENTS OF MARKETING RESEARCH

These are the main components of marketing research:

PRODUCT RESEARCH: - It includes the study of product strength and

weakness, product line decisions etc.

MARKETING RESEARCH : - It includes nature and size of market,

location, distribution of consumer with respect to income, profession, education etc.

SALES RESEARCH:-It includes the study of regional variation in sales,

fixation of sales methods, incentives etc.

ADVERTISING RESEARCH : - It is concerned with the selection of

effective and appropriate media and methods to measure its effectiveness.

BUSINESS ECONOMIC RESEARCH: - These deals with out-put analysis,

forecasting, price and profit analysis, break even chart etc...

The success or failure of any research report depends upon the methodology

used for collecting information and data. The research design of the report is

exploratory and investigative. The exploratory research design study is usually

characterized by a hypothesis was developed about the problem. An effort

was made together with detailed information that would help the researches

67


68/84

to formulate specific question with the help of primary and secondary data.

Grand amount of flexibility and on ad-box variability. No detailed and definite

DATA COLLECTION

The success of research project depends critically on data. In any marketing

research program data collection is very important. Data collection is an integral part of

marketing information system.

A) PRIMARY DATA:-Information, which has to be gathered for the first time, is Called Primary Data.

TOOLS USED FOR COLLECTING PRIMARY DATA:

(i) Open ended questionnaire and interviews.

(ii) Detailed discussions with the senior executives and departments.

B) SECONDARY DATA:-

Data, which are already assembled, are called secondary data:-

TOOLS FOR COLLECTING SECONDARY DATA:

(i) Organization annual report.

(ii) Different report and periodicals of soft drinks association.

(iii) The economic times.

(iv) Magazines.

68


69/84

To get accurate information different types of functions were performed. The most

important limitations, which come on, the way of investigations was lack of time.

The data were available on certain aspects but sufficient date and satisfactory progress

report could not be made available. However, the major difficulty was that it was not

possible to visit the corporate plant at Bombay. Although a cherished desire persisted

above mentioned constraint hindered the progress of this project.

SAMPLE SIZE & AREA OF WORK

The methodology used to analyze the project is mainly based on survey method through

questionnaire and direct contact with different retailers and distributors. For survey I have

taken the sample Size of 3000 retailers of whole Dehradun Zone Which Includes

Haridwar, Saharanpur, Rishikesh, Kotdwar, Chutmalpur, and Deoband.

SOURCES OF DATA COLLECTION

The data are collected from Both Primary and Secondary Sources.

Primary Data: Primary data has been collected on the basis:

Direct interview with retailers and Distributors of Dehradun

Gather information through Questionnaire

Through telephonic conversation

69


70/84

Secondary Data:

Internet sites

Magazines

Newspaper

ANALYSIS AND FINDINGS

In analysis & findings we have done a market survey of Saharanpur city where we meetthe distributor as well as the respective retailers .We made a questionnaire for thissurvey so as to identify the problems of the retailers & the market share/ visibility indexof Bharti Airtel ltd. We prepared a database of Airtel so that company could analyze dataand take corrective measures so as to enhance the visibility share of airtel in the market.In Saharanpur the market is good & there is a great competition for Airtel in the marketby other competitors. In Saharanpur Vodaphone Essar group is giving great competitionto us by their active sales & promotional scheme. They are regularly going to thoseRemote areas & outer areas of Saharanpur city where our F.S.E go once in a blue moon.They are increasing their customer base by installing new towers .As network increasescustomers also increases.

From last 4 to 5 months the standard of services provided by Airtel is decreasing day-by-day. By this the customer base of Airtel is decreasing. Our sale is increasing or we aregetting profit is only because of some of good schemes.

The P.O.S distribution system is not good. many retailers complained for delay in p.o.sdistribution. Some places are those where he field sales executives dont come on theirdesignated days. We had issued the boards but there are issued on paper only. They arenot at their designated places.

70


71/84

PROBLEMS RELATED TO GLOWSIGN BOARD

71


72/84

problems related to glow sign board

14% 14%

48%

10% 9%5%

0%

10%

20%

30%

40%

50%

60%

have g.s.b gsb provided

but not

found

require g.s.b not enough

space for

g.s.b

g.s.b with

wrong

names

gsb does

not work

problems

percentages

hare

In Saharanpur city only 14% retailers have glow sign boards.14% retailers have glowsign boards but when we reached to the shop we dont find any glow sign boardtheir.48% retailers required glow sign boards & they have already applied for glow signboards but yet not received. 10% retailers in the city dont have enough space for glowsign boards.9% boards are of wrong name boards for which retailers are regularly complaining but no

response results.5% boards are not in working condition means tube is fused, board isdepreciated etc.

PROBLEMS RELATED TO P.O.S MATERIAL

72


73/84

PROBLEM RELATED TO P.O.S MATERIAL

60%

18% 22%

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

pos tim ely provided pos not tim ely provided pos not provided

PROBLEM

Series3

Series2

Series1

Problems related to point of sale material (p.o.s) is that only 60% retailers receive P.O.Smaterial in time .it means rest 40% dont not receive the p.o.s material in time or they

dont receive the material. This shows that we are not covering the rest 40% retailers,which are also a big part. This affects our sale very much & our competitors areencashing this opportunity. As per our survey is concerned 18% retailer do not receiveP.O.S material in time & 22% dont get the material.

PROBLEMS RELATED TO CLAIMS

73


74/84

issues related to claims

30.75%

69.25%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%70.00%

80.00%

Persons having claims No claims

claims

percentage

Series1

In problems related to claims 30.75% retailers says that they have pending claims withthe company. As per the survey is a concerned 69.25% retailer dont have claims? InSaharanpur city problem related to claim is a big issue. Retailers have pending claims

with the company & with old distributor. They dont know who will settle their claimseither company or by the distributors.

PROBLEMS RELATED TO NETWORK

74


75/84

Problem related to network

90%

8% 2%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Network coverage area No Network area low signals

Network Problem

ercentage

Series1

In problems related to network 90% area of the Saharanpur city is covered by thenetwork of Airtel. In some areas of Saharanpur only 2% areas have low signals. In theouter areas of Saharanpur city 8% areas have no network coverage. So the numbers ofcustomers are very few in those areas. The network of airtel in the city is good. But insome areas the frequency of the tower is low so there is low signal problem.

LAPU STATUS

75


76/84

LAPU

375

28 27

0

50

100

150

200

250

300

350

400

HAVE LAPU LAPU REQUIRED DON'T HAVE LAPU

LAPU STATUS

RETAILERS

Series1

In Saharanpur city out of 430 retailers only 375 retailers have lapu. 28 retailers required

lapu & they have applied for the lapu facility.27 retailers are those who dont have lapufacility.

PROBLEM RELATED WITH LAPU

76


77/84

PROBLEM RELATED WITH LAPU

2% 2%

96%

0%

20%

40%

60%

80%

100%

120%

lapu reversal lapu lost no problem

PROBLEMS

PERCENTAGE

Series1

In problems related with lapu 2% retailers have problem of lapu reversal.2% retailershave lost but they dont receive the new one. Rest 96% retailers have no problem.

VISIBILITY INDEX

77


78/84

VISIBILITY INDEX

AIRTEL

55%HUTCH

27%

IDEA9%

B.S.N.L

4%

TATA

5%

AIRTEL

HUTCH

IDEA

B.S.N.L

TATA

In visibility index we find that AIRTEL have a market visibility of 55% in the

Saharanpur city. HUTCH is the first biggest competitor of Airtel with a market visibilityof 27%.IDEA has a market visibility of 9% & comes on third stand. TATA is the fourthcompetitor of Airtel with a market visibility of 5%. Then comes government ownedB.S.N.L with a market visibility of 4%.All this shows that Airtel have got biggest part inthe market visibility.

MARKET SHARE

78


79/84

MARKET SHARE

32%

16%23%

5%

10%

14%

AIRTEL

HUTCH

BSNL

TATA

IDEA

RELIANCE

Market share of AIRTEL in Saharanpur city is 32% then comes BSNL withmarket share of 23% .Hutch & reliance have 16% & 14% respectively.

IDEA has market share of 10% while TATA INDICOM has a market shareof 5%.

RECOMMENDATIONS

79


80/84

1. The market position of airtel is very strong but it has not been capitalized properly

because of poor supervision of distributors .distributors should also keep in mind

the far flung areas and should cater it properly because rural markets are emerging

as great source of increasing volumes.

2. Distributors should keep manpower accordingly. There should be adequate

personnel to look after the market.

3. From management side, management should have a feedback system which can

link them directly to retailers. This will help them gaining confidence of retailers

and solving their problems.

4. Point of sales materials should be checked timely so that they can be maintained

accordingly.

5. Claims should be settled as early as possible because delay causes irritation in the

minds of retailers, which causes dissatisfaction on the part of retailers.

6. A regular comparative study of the market should be taken at regular intervalsbecause it will give insight information about our market share.

CONCLUSION

80


81/84

After the Finding and analysis of the gathered information and data, at last I

have reached on the conclusion part of the Project. I have concluded this

project as...

1. Airtel is the most trusted brand & Majority of Airtel customers are notready to switch to any other service provider as they are completely satisfiedwith the products and services offered by it

. 2. Management is able to develop cordial relationship with retailers but theclaim settlement process is slow and not conducive to retailers.

3. Lack of sales force with distributors creates lots of unnecessary hackles.

4. Far flung areas are not managed properly.

5. Bifurcation of paper recharge and lapu creates lots of problems forRetailers.

Annexure

BHARTI AIRTEL LIMITED81


82/84

QUESTIONNAIRE

Visibility index

Problem identification

1. General information:a. Retailers Name: ___________________________________

b. Name of the Retail Outlet ___________________________________c. Location & Phone No.

____________________________________d. Contact / Lapu No.

____________________________________

2. Does the retail outlet have all airtel promotional materials-

a. Glow sign board Yes [ ] No [ ]b. If yes then Working [ ] Not working [ ]

c. Size of the board ______________x_______________i. Problem ______________________________

3. Does the retail shop have Non-lit boards Yes [ ] No [ ]4. Have you assigned a proper / permanent place for Airtel promotional material?

Yes [ ] ___________x______________No [ ]

If yes, the place is:- a) Easy to locate [ ] b) Difficult to locate [ ] c) Not visible [ ]

5. Is the place P .O.S materials timely available? Yes [ ] No [ ]

6. Does the F.S.E & F.C.E. visits on their designated days?

Yes [ ] No [ ]

7. Do you receive stocks as per the order?Lapu [ ] Sim [ ] PRC [ ]

8. Brands available in your shop?

82


83/84

Airtel [ ] Hutch [ ] Idea [ ]Tata Indicom [ ] Reliance [ ] BSNL [ ]

9. Number of Airtel connections sold by you per month? ___________

10. What is the monthly sale of Airtel recharge

a) Vouchers _____________ b) Lapoo_________________

11. Rank these companies on the basis of your monthly sale (1-6)Airtel [ ]Hutch [ ]Idea [ ]Reliance [ ]Tata Indicom [ ]Bsnl [ ]

12. Size of various glow sign boards available in the shop :-Airtel ____________x________________Hutch ____________x________________Idea ____________x________________Reliance ____________x________________Tata Indicom ____________x________________Bsnl ____________x________________

13. Rate the Airtel on the basis of your satisfaction level:-Very good [ ] Good [ ] Average [ ] Poor [ ]

14. Rate the distributor on the basis of your satisfaction level:-

Very good [ ] Good [ ] Average [ ] Poor [ ]

15. What are the problems faces by you?

______________________________________________________________________________________________

BIBLIOGRAPHY

83


84/84

1) www.tdsat.com

2) www.nasscom.org

3) www.indiainfoline.com

4) www.airtel.in

5) www.bhartiteleventure.com

6) www.trai.gov.in

7) www.coai.com

Date post:	14-Apr-2018
Category:	Documents
Upload:	nilabjo-kanti-paul
View:	221 times
Download:	0 times

Market Share of Bharti Airtel

Documents