rated it as the prime factor in opting for Tata Teleservices Limited (TTSL), as it provides
them with higher ROI (Figure 4).
Description of Call Rates on Different Lines
On Fixed Lines: Tata Indicom offers 180 sec. pulse, whereas BSNL and Reliance offer
90 sec. pulse. It means a consumer using a Tata payphone gives only Rs. 2 for a 3 minute
call, while a consumer using Reliance pays Rs. 4 for the same duration of call. In PTB
connection, operator charges Rs. 2 for every call, whereas in CCB connections operator
charges Rs. 1 per call. It is evident from this comparative account that customer is getting
a better revenue by opting for Tata payphones to make calls on fixed lines.
STD Call Rates: Tata Indicom offers 30 sec. pulse on its CCB for STD calls in contrast
to its rival Reliance and Airtel offers 20 sec. pulse. Thus, a customer pays Rs. 2 for every
one minute of call made from Tata Indicom, while Rs. 3 on its competitors network as
Figure 3: Factors Important inSelecting Service Provider
ProductOfferrings 15%
R & MServices
24%Call
Rates/Tariff35%
PromptServices
26%
The Icfai University Journal of Services Marketing, Vol. VII, No. 1, 200934
mentioned. This comparison between products itself speaks about the benefit of
Tata Indicom.
ILD Call Rates: Private sector telecom giant Reliance Communications does not provide
international call facility on its CCBs, whereas other players offer it. Tata Indicom ISD
call rate is at par (more or less) with competitors like Airtel, Idea and BSNL. International
Long Distance (ILD) call rate of Idea is 4 sec., which is costlier than what Tata offers.
However, Airtrel offers a 6 sec. pulse for its ILD calls, which is cheaper in case the customer
is dialing Europe and Gulf countries, else it is the same as Tata Indicom.
RCVs: Tata Indicom offers RCVs in different denominations providing complete flexibility
to an operator; a single RCV could be used to make all types of calls, eg., ISD, STD or
local. Unlike TTSL, Reliance Communications offers RCV in different fixed combinations
that could be utilized to provide specific services like pure local cards or local + STD or
local+STD+ISD cards (for PTB connections). Airtel and Idea also offer single card for all
types of calls, whereas in BSNL, billing is done as it is functioning on a post-paid model
and not on pre-paid. Its operators make bill payments every fortnight (15 days), which
is a very cumbersome process involving duplicity of work on both fronts, i.e., to service
providers and operators.
Tata Indicom provides card-based discount to its operators. It is the discount that
operators get depending on the value of the card loaded, i.e., higher the denomination
of card, lower the pulse rate offered. Hence, higher saving.
For instance, if RCV of Rs. 337 is loaded on 92 CCB PCO of TATA Indicom, the operator
would get a gross talk time of Rs. 449.3 on a pulse of 66 paise/min with validity of one
month. The effective ROI would be 33%; thus on every Re. 1 call, the operator gets
34 paise.
Figure 4: Factors That Influence Operators to Opt for Tata Indicom
25
20
15
10
5
0
No
. o
f R
esp
on
de
nts
No. of Respondents 25 11 6 10
Call Rates/Tarif
RCVServicing
ProductOfferings
PromotionalSchemes
35Customer Satisfaction Level of Operators Towards Tata Indicom PCO in Gorakhpur
On RCV of Rs. 1,000, post-deduction of tax net talk time offered is Rs. 889 on pulse
of 53 paise/minute. Thus on Rs. 889/0.53, the operator gets a gross talk time of
Rs. 1,666.70. By investing Rs. 1,000, a net income of Rs. 667.
When RCV of Tata Indicom is compared with Reliance Communications, on RCV of
Rs. 1,031.80, the operator gets talk time of Rs. 1,540 on pulse of 62 paise/minute.
Thus, net income to operator is Rs. 519, which is lesser than Tata Indicom’s.
When further RCVs of Reliance were compared, it was found that on RCV of Rs. 517.8,
the operator gets Rs. 640 talk time with a validity of 55 days. The ROI is 23%,
while on TTSL RCV of Rs. 550, the operator’s ROI is 43% with gross talk time of
Rs. 786 (approx).
Comparison of TTSL and Reliance is more significant because both companies are
CDMA-based and worke on pre-paid model. However, TTSL’s giant leap in public telephony
is evident from the product comparison with all competitors irrespective of coverage and
technology issues. When Airtel RCV for CCBs of denomination of Rs. 650 is compared,
it comes to the forefront that operators get a pulse of 65 paise/minute with a validity of
1.5 months or 45 days. Contrary to this, on RCV of Rs. 550, TTSL is providing 43% ROI
with validity of one month. The figures and value speak about the product and return offered
by TTSL and therefore, an edge over competition in major product lines.
IDEA CCB RCV of Rs. 500 provides a pulse rate of 70 paise/min for local calls and
80 paise/30 sec. for STD calls. On this package, the operator gets gross talk time of
Rs. 635 and ROI is 27%. This ROI is low when compared with TTSL. IDEA is the last
entrant in UP(E) circle.
The above analysis clearly shows that operators using Tata Indicom PCO are earning
more as compared to other competitors.
RCV Servicing: Twenty one percent of respondents surveyed accorded RCV servicing as
a crucial factor while opting for Tata Indicom PCO as TTSL is the only service provider that
ensures timely delivery of RCV at customer’s doorstep through its dedicated team of
Distributors Revenue Executives (DRE). These DREs, according to operator, not only provide
RCVs, rather they serve as a source of information provider regarding latest schemes,
promotion offers made by the company and establish one point contact between distributors
and operators. Along with this, they act as relationship managers by communicating
grievances and problems of operators to an organization for timely redressal.
In remote areas, where RCV supply was an issue, it supplied retailers who fed local
operators through distributors.
Product Offerings: Nearly 12% of respondents opted for Tata Indicom as service
provider for PCO business, as it offeres flexibility and provides complete solution catering
to their requirements. This factor is of prime importance to them in chosing a service
provider. In the next section price comparison with competition is discussed.
The Icfai University Journal of Services Marketing, Vol. VII, No. 1, 200936
PTB: It means pay telephony business, where the customer is charged Rs. 2/call including
service tax, but the company offers pulse of Rs. 1.20 and this Rs. 1.20 is considered for
ROI calculation and not Rs. 2 that is charged (as per company policy).
PTB Package Comparative Account
Tata provides PTB connection of Rs. 500, which includes NIU (Network Interface Unit)
and talk time of Rs. 500 as no security deposit is required. If recharged with RCV of
Rs. 550, after post-tax deduction, the talk value of Rs. 489 and one year validity is provided.
Thus, total package cost is Rs. 1,050 and total talk time is Rs. 989.50.
On this package of Rs. 1,050, the operator gets total talk time of Rs. 989.50 and calls
can be made to any service provider, i.e., Tata to Tata, Tata to Airtel, Tata to BSNL, etc.
In case, the customer is not willing to avail the one year validity package, he could recharge
with a RCV of less than Rs. 550.
Reliance is offering one year validity connection with entry cost of Rs. 500 and a
recharge of Rs. 750. Thus, the total package cost is 500 + 750 = 1,250. On this package
of 1,250, the customer gets Rs. 250 talk time, i.e., on other service providers and
Rs. 2,750 on Reliance to Reliance. The comparative account shows that Tata Indicom
is offering packages at lower costs and a better return option as the customer can use
talk time to call any service provider. Whereas, in case of Reliance, the investment cost
is higher, plus on investing Rs. 1,250, the net talk time offered is Rs. 2,500 when calling
the same service provider.
Likewise entry cost for Airtel PTB is Rs. 1,990 without any security deposit and it
offers talk time of Rs. 1,050 (i.e., Airtel to Airtel) and the validity period is 180 days,
whereas, it offers talk time of Rs. 500 (i.e., Airtel to any service provider) with validity
of 30 days.
Idea offers PTB connection with entry cost of Rs. 2,500 without any security deposit
and the talk value is Rs. 2,499. It is partitioned as IDEA to IDEA (950 minutes), calls to
other networks (950 minutes) and for all other calls on landline (500 minutes).
This package comes with one year validity.
On analyzing the product packages of the competition, it was found that entry cost
on TTSL PCO is lower compared to its rivals. Above all, talk time offered could be
consumed on any network, as there is no restriction. Thus, the product and services of
TTSL in PCO segment is superior and provides value to customer and best proposition
when compared with the industry.
On Satisfaction with TTSL Product and Services Offering: When some TTSL
customers were asked whether they were satisfied by the company’s product and services,
81% of respondent said ‘yes’ and the rest 19% said ‘no’ (Figure 5). The reason given
for dissatisfaction was network coverage in remote areas.
37Customer Satisfaction Level of Operators Towards Tata Indicom PCO in Gorakhpur
Suggestion
On the basis of opinion of respondents the following suggestions are made:
• Through interview of respondents, especially small operators that use small
denomination, RCV validity emerges as a critical issue, because these operators
lose money on recharging as validity period with old RCV ends and validity period
of the new one starts. For example, suppose validity on a particular RCV remains
only for two days and the amount left is Rs. 30, then on recharging with new
RCV, this validity period goes off. Operators expect that company should take this
issue and retains validity of old RCV simultaneously with new recharge it exhausts
completely in specified period. If TTSL allows validity on old RCV, operators churn
could be stopped and company can expect better realization from operators.
• TTSL should run loyalty programs like Happy Home Hungama and Smart PCO Cricket
Hungama on regular basis to retain and acquire existing and new customers, as
it provides additional income and platform to feel associated with established brand.
• To ensure presence in all services, provide FAX service which is a critical factor
for grabbing higher market share. BSNL, as it is the only company which is offering
all PCO related services, remains the preferred brand and enjoys an edge despite
many loopholes.
• To roll out pan-India broadband services in the given time frame. Though TTSL
offers broadband services through its entirely different profit center, this service
is restricted to metro and B class cities that too in a restricted manner.
• To deal with network coverage issues, as this factor negatively impacts customer
acquisition and impacts service quality of existing customers in remote areas.
• To withdraw from PTB category in a phased manner as earning of PTB is declining
drastically as it is costlier and finds few takers.
Figure 5: Satisfaction with TTSL
Yes 81%
No 19%
The Icfai University Journal of Services Marketing, Vol. VII, No. 1, 200938
Conclusion
Telecom space in India is in a growing phase, but in this short stint post-liberalization,
it witnessed a corporate battle involving interests of different service providers and
allegations of subjective treatment being leveled against authority (TRAI, DOT). In order
to fulfill Universal Service Obligation (USO) and to penetrate the vast market which is
still devoid of telecommunication services taking into consideration the affordability issue,
TTSL has to devise a plan which not only provides better earning to the company, but
also counteracts competitors, both direct and indirect. Direct competitors are all PCO
service providers whereas, indirect competitors are pre-paid and post-paid mobile service
providers. With the launch of One India plan by service providers under different brand
names on all categories, like pre-paid, post-paid and basic telephony, the survival of PCOs
has become an issue. In order to survive and grow, market products which are performing
poorly have to be withdrawn in a phased manner (PTB) and value-added services have
to be offered to change business dimensions of PCOs from stand-alone to integrated
business catering to all requirements of today’s customer.
References
1. www.rcom.co.in
2. www.tataindicom.com
3. www.trai.gov.in
4. www.voicendata.coil.com
✧
Name of Operator :
Tel Number :
Address :
1. What type of PCO you use?
a) Single Branded ( ) b) Multiple Branded ( )
2. If you are single branded PCO operator, name the service provider.
a) Tata Indicom ( ) b) Reliance communication ( )
c) Airtel ( ) d) BSNL ( ) e) IDEA ( )
3. Which factor is most important for you while selecting service provider?
a) Call Rates/Tariff ( ) b) Easy Recharge facility ( )
c) Prompt Service ( ) d) Entry Cost ( )
Questionnaire
Annexure 1
(Contd...)
39Customer Satisfaction Level of Operators Towards Tata Indicom PCO in Gorakhpur
4. Mark the factor which influenced you to opt for Tata Indicom PCO.
a) Call rates/Tariff ( ) b) RCV servicing ( )
c) Product Offerings ( ) d) Promotional schemes ( )
5. Are you satisfied with product and services offered by Tata Indicom?
a) Yes ( ) b) No ( )
Annexure 1 (...contd)
Anexure 2
One India Plan of Integrated Service Providers
BSNL/ Landline 299 Re. 1 for 3 min 1
MTNL Postpaid Mobile 299 Re. 0.40/min (BSNL-BSNL) 1
Prepaid Mobile 799* Re. 0.60/min (BSNL-BSNL) 1
Hutch TalkHome299^ 299 Re. 1 for 2 min (Hutch-Hutch) 1
TalkRoam499^ 499** Re. 1 for 2 min (Hutch-Hutch) 1
Prepaid 899^ 899 Re. 1 for 1 min (Hutch-Hutch) 1
Tata Walky Postpaid 299 Re. 1 for 3 min (Tata-Tata) 1
Re. 1 per 1 min (Tata-any mobile)
Mobile Postpaid^ 299 Re. 0.40/min (Tata-Tata) 1
Airtel India Home^ 299 Re. 1 per 2 min (Airtel-Airtel) 1
India Roam^ 499** Re. 1 for 2 min (Airtel-Airtel) 1
899 RC 899 Re. 1 for 2 min (Airtel-Airtel) 1
Reliance RIO299 299 Re. 0.4/min (Rel-Rel) Intra C 1
Re. 1/min (Rel-Rel) Inter C 1
RIO399 399 Re. 0.4/min (Rel-Rel) 1
SP Category Rental Local ChargesOther Calls
(Rs per min)
Note:* Talk value of Rs. 550 and validity of 30 days
^ SMS (local and national) at Re. 1 per SMS
** Roaming calls on Hutch/Airtel network at Re. 1 per minute
BSNL/MTNL’s package is comparatively better than all the integrated operators in the country,though their announcement was followed by Reliance Infocomm's announcement. Tata’spackage is similar to BSNL/MTNL but SMS rate is higher in case of Tata whereas in the caseof BSNL/MTNL, it is Re. 0.50 for local, Re. 1.0 for national and Re. 1.5 for international.Reliance Infocomm’s package comes closer to BSNL/MTNL but there is a catch like intra circleand inter circle calls.
The Icfai University Journal of Services Marketing, Vol. VII, No. 1, 200940
Reference # 32J-2009-03-03-01
Notes: 92 CCB means area where Point of Interconnection (POI) is not available withBSNL therefore service is provided by 10 digit mobile number, i.e., district STD code couldnot be provided by concerned service provider example 0551 of Gorakhpur or 05568or Deoria and the number will start with 92.
RCV ROI Calculation (TTSL):
CCB 92—Rs. 550 RCV
Talk time operator would get = 550 x 100/112.36 = Rs. 489.50
Here 12.36% is service tax.
Therefore (100 + 12.36)
Since in CCB’s call made is of Re. 1.
On Rs. 550 RCV company is offering a discount of 30%. It means operator would get30% from a call of Re. 1.
Therefore, total number of calls he would make = 489.50/0.70 = 699.28 calls
0.70 is derived as under:
(1 – 30% of 1) = (1 – 30/100 x 1) = 0.70 paisa
Now operator would be able to make how many calls that can be arrived at by multiplying699.28 x Re. 1 = 699.28 calls
To calculate ROI
699.28 x 112.36/100 = 785.71 (coins operator would get in his box)
Total Income – Investment/Investment*100 = 785.71 – 550/550 x 100
= 42.85% or 43%
• In CCB the discount offered is deducted from Re. 1 as call made is of Re. 1 only.
• In case of PTB the discount is deducted from Rs. 1.20 as it is configured in thisway.
• Discount refers to the channel policy of TTSL on RCV.
In this way ROI calculation of any RCV could be done provided discount offered by serviceprovider is known.
