Summer Internship Report On TARIFF WARS BETWEEN THE TELECOM PLAYERS & HOW TO INCREASE THE INCREMENTAL REVENUE

MARKET By MBA (M&S) Class of 2011 Under the Supervision of S.K.Laroiya Professor Department of Economics Vikas Dubey A0102209092 SHARE (IRMS) FOR RELIANCE COMMUNICATIONL LIMITED In Partial Fulfillment of Award of Master of Business Administration AMITY BUSINESS SCHOOL AMITY UNIVERSITY UTTAR PRADESH SECTOR 125, NOIDA -201303, UTTAR PRADESH, INDIA 2010

AMITY UNIVERSITY UTTAR PRADESH AMITY BUSINESS SCHOOL DECLARATION I, Vikas Dubey student of Masters of Business Administration (Marketing and Sale s) from Amity Business School, Amity University Uttar Pradesh hereby declare that I have completed Summ er Internship on TARIFF WARS BETWEEN TELECOM PLAYERS AND HOE TO INCREASE INCREMENTAL MARKET REVENU E MARKET SHARE (IRMS) FOR RELIANCE COMMUNICAION as part of the course requirement. I further declare that the information presented in this project is true and ori ginal to the best of my knowledge. Date: 10/07/10 Vikas Dubey Enroll. No: A0102209092 Place: Noida MBA (M&S) Class of 2011 `

MARKET SHARE (IRMS) FOR RELIANCE COMMUNICAION , under my guidance. Dr. S.K. Laroiya AMITY UNIVERSITY UTTAR PRADESH AMITY BUSINESS SCHOOL CERTIFICATE

I hereby certify that Vikas Dubey students of Masters of Business Administration (Marketing and Sales) at Amity Business School, Amity University Uttar Pradesh has completed Su mmer Internship on TARIFF WARS BETWEEN TELECOM PLAYERS AND HOE TO INCREASE INCREMENTAL MARKET REVENU E (Lecturer/Asst. Prof./Prof.) Department of Economics

Contents S.No. Chapter Name Page No. 1 Introduction 01 2 History 02 02 Vision Corporate Profile 03 5 Chairman s Profile 6 Organizational Setup 06 04 Product and services 07 Distribution and channel partners 16 9 10 11 12 Way to increase the market share Reliance and 3G Tariff war Competitors 18 20 25 34 13 Findings 36 14 38 Recommendation 15 39 Conclusion

INTRODUCTION: The Late Dhirubhai Ambani dreamt of a digital India an India where the common ma n would have access to affordable means of information and communication. Dhirubhai, who singlehandedly 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 a n 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 kilometers of a pan-India fiber optic backbone. This backbone was commissioned on 28 December 2002, the auspicious occasion of Dhirubhai s 70th birt hday, 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 deliver ing a range of services spanning the entire infocomm (information and communication) value chai n, 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. Facts figures:

Founded: -2004 Founder: -Dhirubhai Ambani Headquarters: -Navi Mumbai, Maharashtra, India Key people: -Anil Ambani (Chairman) Satish Seth (MD) Revenue: -Rs 22,948 crore (US$ 5.12 billion) (2009) Operating income: -Rs 9,305 crore (US$ 2.08 billion) (2009) Net income: -Rs 6,045 crore (US$ 1.35 billion) (2009) Total assets: -Rs 102,207 crore (US$ 22.79 billion) (2009)

Total equity: -Rs. 1,032 crore (US$ 230.14 million) (2009) Employees: -31,884 (2009)

facility and services. year. Also in that year, Reliance Communications commissioned their 1st optic fi ber backbone. was inaugurated in 2002 and first of interconnect (POI) was established in New D elhi in same Reliance Communications was set up as Reliance Infocomm in 1999 and from 2000 on wards laying of optical fibers started in Maharashtra, Gujarat and Andhra Pradesh. Rel iance Infocomm facility and services. year. Also in that year, Reliance Communications commissioned their 1st optic fi ber backbone. was inaugurated in 2002 and first of interconnect (POI) was established in New D elhi in same Reliance Communications was set up as Reliance Infocomm in 1999 and from 2000 on wards laying of optical fibers started in Maharashtra, Gujarat and Andhra Pradesh. Rel iance Infocomm largest next IP connectivity infrastructure, comprising over 150,000 region. VISION:kilometers of fiber optic cable systems in India, USA, Europe, Middle East and t he Asia Pacific 250 multinational corporations and over 200 global carriers and owns and operate s the world's generation, ranks among the top ten Asian Telecom companies. Its corporate clientele include s 600 Indian, enabled HISTORY: Late Dhirubhai Ambani commoners thereby allowing them nications is capable of delivering ation value chain. Their products and consultancy. had a vision of making tools of communication available to to overcome barriers of mobility. Likewise, Reliance Commu services covering entire gamut of information and communic and services include infrastructure setting, applications

In 2005, this company launched global roaming Reliance Communications was formed in 2006 and listed in Bombay and National stock exchan ges. Reliance Communications Limited founded by the late Shri. Dhirubhai H Ambani (19 32-2002) is the flagship company of the Reliance Anil Dhirubhai Ambani Group. It is India 's foremost truly integrated telecommunications service provider. With a customer base of ov er 36 million including close to one million individual overseas retail customers, Reliance Co mmunications

We will leverage our strengths to execute complex global-scale projects to facili tate leading-edge information and communication services affordable to all individual consumers and businesses in India. We will offer unparalleled value to create cu stomer delight and enhance business productivity. We will also generate value for our c apabilities beyond Indian borders and enable millions of India's knowledge workers to delive r their services globally.

Reliance Communications is now among the three most valuable private sector comp anies in India, and the five most valuable telecom companies in Asia. In the current Fisc al, Reliance Communications will spend Rs 16,000cr to further expand and strengthen its netwo rk coverage across India and the rest of the world. In addition to organic growth, Reliance Communications will leverage the advanta ges derived from this impressive financial platform to explore and pursue any significant Opportunities available in the telecommunications sector. "We are currently eval uating a number of inorganic opportunities in select international markets to further expand our footprint," Ambani said. Reliance Communication s One India, One Tariff plan allowed millions to connect ac ross India

at just one rupee a minute. The company was the first one to break the Rs 1,000 entry-barrier with the launch of the lowest-cost classic brand handset at Rs 777. As per its expansion plan, Reliance Communications will have the single largest wireless

network in the world, covering over 900 mn Indians or more than 15% of the globa l population. It will cover 23,000 towns or every single Indian habitation with a population o f over 1,000. Reliance Communications will cover almost 100% of all rail routes, providing sea mless voice, video, radio, and Internet connectivity to 14 mn commuters every day. It will al so cover almost 100% of all national highways, and 84% of all state highways, giving millions of users the power to talk, text, surf, play, chat or simply stay in touch across nearly the entire length of India's 2,00,000-km-long road network. Having achieved tremendous growth, the main chall enge for Reliance Communications is to improve quality of service and ARPU. Its enterpris e business is also not in a position to compete with the global majors. Stock market valuation s may boost the fortunes of an entrepreneur, but Ambani needs to address the issues faced by the growing mobile customer base, especially in India, where bureaucracy takes pride in checking th e businessman.

CORPORATE PROFILE: Organizations, like individuals, depend for their survival, sustenance and growt h on the support and goodwill of the communities of which they are an integral part, and must pay back this generosity in every way they can... This ethical standpoint, derived from the vi sion of our founder, lies at the heart of the CSR philosophy of the Reliance ADA Group.

While we strongly believe that our primary obligation or duty as corporate entit ies is to our shareholders we are just as mindful of the fact that this imperative does not ex ist in isolation; it is part of a much larger compact which we have with our entire body of stakehold ers: From employees, customers and vendors to business partners, eco-system, local communi ties, and society at large. We evaluate and assess each critical business decision or choice from the point of view of diverse stakeholder long-term social, economic and environmental costs and concerns. For us, being socially responsible is not an occasional act Board of Directors Shri Anil D. Ambani -Chairman Prof. J Ramachandran Shri S.P. Talwar 48, is the of all listed companies of the Reliance ADA Group, namely, Reliance CHAIRMAN'S PROFILE:Regarded as one of the foremost corporate leaders of contemporary India, Shri An il D Ambani, chairman Communications, Reliance Capital, Reliance Energy and Reliance Natural Resources limited. He Shri A.K.Purwar Shri Deepak Shourie Because we believe that there is no contradiction between doing well and doing r ight. Indeed, doing right is a necessary condition for doing well. financial contribution to the local school, hospital or environmental NGO. It is an ongoing yearround commitment, which is integrated into the very core of our business objecti ves and strategy. of charity or interest, driven by the need to minimize risk and to pro-actively address that one-time token is also Chairman of the Board of Governors of Dhirubhai Ambani Institute of Info rmation and Communication Technology, Gandhi Nagar, Gujarat. Till recently, he also held the post of Vice Chairman and Managing Director of Reliance Industries Limited (RIL), India s large st private sector enterprise.

Anil D Ambani joined Reliance in 1983 as Co-Chief Executive Officer, and was cen trally involved in every aspect of the company s management over the next 22 years. He is credited with having pioneered a number of path-breaking financial innovations in the Ind ian capital markets. He spearheaded the country s first forays into the overseas capital marke ts with international public offerings of global depositary receipts, convertibles and b onds. Starting in 1991, he directed Reliance Industries in its efforts to raise over US$ 2 billion . He also steered the 100-year Yankee bond issue for the company in January 1997.

DGM MANAGER (HOME BUSINESS) DGM MANAGER (HOME BUSINESS) ORGANIZATIONAL SET UP CHAIRMAN

PRESIDENT PRESIDENT PRESIDENT (PRESONAL BUSINESS) (ENTERPRISES BUSINESS) SENIOUR V.P

V.P GM AGM SENIOUR MANAGER

DUPTY MANAGER

ASST. MANAGER

MANAGEMENT TRAINING

Product and Services: Reliance Communication Limited Reliance Based Phone Mobiles CDMA GSM FWP (walky talky) Reliance PCO Net connect videos, get live cricket scores, listen to music of your choice, blog and even s urf the Net. All this made vey simple, flexible and convenient to meet your every demand. So let's get started and explore our unparallel services that will bring alive your conversations and enr ich your every world of endless possibilities. Beyond calling and messaging, it lets you e-mail , MMS, download next generation GSM network lets you enjoy seamless coverage across India and un leashes a Reliance Mobile is the only operator in the country with CDMA and GSM dual techn ology. Our experience like never before. Prepaid and postpaid are two options for the customer for all these services. As far as the prepaid is concerned it is widely used. But reliance mob iles focus mainly to the postpaid. Because postpaid generate a fixed revenue. But prepaid is also very important.

Product Price

FWP (Hello) Activation charges (model 2258) Data card (Net connect) 1,499/-Rs Activation charges + 125/-Rs Reliance PCO 750/-Rs 1,400/-Rs + 50/-Rs Prepaid Sim card FRC(first recharge) +1,500/-Rs GSM 49/-Rs CDMA 200/-Rs

Postpaid connection GSM 100/-Rs CDMA Reliance base mobile (Security Deposit) (Security Deposit) +250/-Rs 200/-Rs +250/-Rs MRP

For Prepaid Base Tariff (GSM & CDMA): All Local/Intra Circle Calls Rs.1.00 All STD Calls Rs.1.50 Roaming All Incoming & Local Outgoing calls Rs.1.00 All STD Outgoing calls Rs.1.50 SMS Local Rs.1.00 Application Rs.3.00 National Rs.1.50 international Rs.5.00 International Call Rates : Countries/Region All other Plans USA, Canada, Fixed lines in Europe, Australia, New Zealand Rs.6.40 per min. Mobile phones in Europe, Bangladesh, Bhutan, Maldives, Gulf, Middle East, UAE, Africa, Rest of World Rs. 9.19 per min. Cook Island, Cuba, Diego Garcia, Guinea Bissau, Nauru, Norfolk Island, Sao Tome, Sakhalin, Solomon Island, Tokelau, Tuvalu, Vanuatu Rs. 40.00 per min.

Popular Postpaid Tariff Plans (CDMA): Tariff plans Plan name Simple PPC 299 Simple PPS 199 Simple 399 modified Simple 99 My truly unlimited 995 My unlimited on-net 770 Available with All Handsets All Handsets All Handsets All Handsets All Handsets All Handsets Monthly Rental Rs. 299 Rs. 199 Rs. 399 Rs. 99 Rs. 995 Rs. 770 Free usage Rs 299 (up to 897 min) Rs 150 (15000 sec) Rs 399 for local +STD TT and Rs 399 (L+N) SMS Rs 99 worth SMS (L+N) Rs 995 free on net SMS (L+N) On net mobile unlimited free SMS Local 50 paisa 50 paisa 50 paisa 50 paisa Rs 1 50 paisa National 50 paisa 50 paisa 50 paisa 50 paisa Rs 2 Rs 1 International Rs 5 Rs 5 Rs 5 Rs 5 Rs 5 Rs 5 Call Local, IntraCircle Reliance (RIM, FWP,

fixed line) Rs 1/call upto 3 min 1p/sec 50 paisa 50 paisa FREE FREE / 50 paisa^ GSM & other mobile Rs 1/call upto 3 min 1p/sec 50 paisa 50 paisa 50 paisa 50 paisa Fixed line Rs 1/call upto 3 min 1p/sec 50 paisa 50 paisa 50 paisa 50 paisa

Inter circle Reliance (RIM, FWP, fixed line) Rs 1/call upto 3 min 1p/sec 50 paisa 50 paisa FREE FREE / Rs 1^ GSM & other mobile Rs 1/call upto 3 min 1p/sec 50 paisa 50 paisa Rs 1 Rs 1 Fixed line Rs 1/call upto 3 min 1p/sec 50 paisa 50 paisa Rs 1 Rs 1 ^ Reliance mobile to reliance hello. L = local N = national Add-ons:

Unlimited On net 99:-Intra circle reliance mobile to reliance mobile free. Unlimited On net 149:-Intra circle CDMA to CDMA and GSM.

Popular Postpaid Tariff plans (GSM): Parameters PPC 299 PPS 199 Simple 99 Simple 399 Monthly rental Rs 299 Rs 199 Rs 99 Rs 399 Free RTL -RTL min(Rs) 299 150 NA 399 Free P2P (L+N) SMS (Rs) NA NA 99 399 Outgoing rates With in groups Rs 1/ 3 min 1 paisa / sec 50 paisa/ min 50 paisa/ min Local RTL RTL Rs 1/ 3 min 1 paisa / sec 50 paisa/ min 50 paisa/ min Local R CDMA Rs 1/ 3 min 1 paisa / sec 50 paisa/ min 50 paisa/ min Local other GSM Rs 1/ 3 min 1 paisa / sec 50 paisa/ min 50 paisa/ min Local LL Rs 1/ 3 min 1 paisa / sec 50 paisa/ min 50 paisa/ min On net STD Rs 1/ 3 min 1 paisa / sec 50 paisa/ min 50 paisa/ min STD Rs 1/ 3 min 1 paisa / sec 50 paisa/ min 50 paisa/ min SMS Local 50 paisa 50 paisa 50 paisa 50 paisa National 50 paisa 50 paisa 50 paisa 50 paisa International Rs 5 Rs 5 Rs 5 Rs 5 Roaming 450 plan:Benefits: -On roaming customer will get free incoming, On-net outgoing @ 50 paisa/ min. ot her calls @ Rs1/min. Local pack 75:Benefits:All calls @ 30 paisa/min. with add on pack Rs 75 per month.

Popular Postpaid tariff plans for FWP (Hello): Plan name Simply 399 full value Simply PPC 299 Simply 199 Unlimited on-net STD 775 Unlimited onnet# 299 Monthly Rental (Rs) 399 224 199 775 299 Free usage (Rs) 399 299 149 NA 110 Unlimited on-net pack Rs 99 or 149 Rs 99 or 149 Rs 99 or 149 NA NA SMS Local 50 paisa 50 paisa 50 paisa 50 paisa 50 paisa National 50 paisa 50 paisa 50 paisa 50 paisa 50 paisa International Rs 3 Rs 3 Rs 3 Rs 3 Rs 3 Call Local, IntraCircle Reliance (RIM, FWP, fixed line GSM ) 50 paisa/min Rs 1/ 3 min 50 paisa/min FREE FREE other mobile 50 paisa/min Rs 1/ 3 min 50 paisa/min 50 paisa/min Rs 1/ min Fixed line 50 paisa/min Rs 1/ 3 min 50 paisa/min 50 paisa/min Rs 1/ min

Inter circle Reliance (RIM, FWP, GSM ,fixed line) 50 paisa/min Rs 1/ 3 min 50 paisa/min FREE Rs 1/ min other mobile 50 paisa/min Rs 1/ 3 min 50 paisa/min Rs 1/ min Rs 1/ min Fixed line 50 paisa/min Rs 1/ 3 min 50 paisa/min Rs 1/ min Rs 1/ min

# On net includes intra circle CDMA (RIM), GSM (smart), FWP (Hello), and Fixed line.

Popular postpaid plans for data card (Net connect): Description Zero rental plan # Unlimited plan Platinum plan # Swift 40 + # Swift 30 Freedom at night Plan Available with Mobile/ Hello/ Net connect/ USB modem Net connect Net connect Mobile/ Hello/ Net connect/ USB modem Mobile/ Hello/ Net connect/ USB modem Mobile/ Hello/ Net connect/ USB modem Monthly charges (Rs) NA 799 1500 400 300 400 Data usage Peak(06:00 hrs-22:00 hrs) 60 paisa / min NA NA 40 hours 15 hours 50 paisa/ min Off peak (22:00 hrs 06:00

hrs) 30 paisa/ min NA NA 40 hours 30 hours NA Free data usage in GB NA 20 (*unlimited) Unlimited NA NA 20 (*unlimited) Additional data usage NA Rs 2/MB NA 50 paisa/min 50 paisa/min 50 paisa/min Free SMS/month NA 100 local SMS/ month 100 local SMS/ month 100 local SMS/ month 100 local SMS/ month NA Note: -10.50 % of bill will be charged as service tax.

Distribution and channel partners: Postpaid connections

Customer care DSA (Direct Sales Associate) Retailer Distributors Direct sales team Corporate sales team Reliance web world Prepaid connections Customer care Retailer Reliance web world Distributors

Channel and channel partners: But apart from it there is another channel partner which is like taking a franchise of reliance and do the business according to him, there is no involvement of company in sales of th e product. Here distributor is assigned for a territory and has a big business and then comes DSA who has not a particular territory but he can sale t he products in a particular state. Manufacturing State Head office Zonal office Distributors DSA (direct sales associate) Distributor s sales team Retailer Consumer Channel partner Channel partner In Reliance communication limited, Distributor and DSA are the main channel part ners.

Competitors: In Madhya Pradesh & Chhattisgarh region, the competition is very tough. Here the re are following competitors. TATA Telecommunication Limited Vodafone Essar Bharti Airtel Idea cellular BSNL Virgin mobiles Aircel (about to launch) But among all of these following are the main competitors. TATA Vodafone Airtel

Idea st private telecom player who launched the for This is the cause they have got the highest has increased lots of customers in a short span of time. Services provided but the competitors:good job. Vodafone has recently launched there services in MP&CG region. With ne w offers it services market share in the market. These 4 telecom players are doing well for a long time. Airtel was the 1MP&CG After that TATA and idea came into the existence and done very region. Airtel Broadcom GSM FWP (Fixed Wire-line Phone) Airtel provides 3 services GSM (prepaid and postpaid), FWP (Postpaid), Broadcom (postpaid).

Vodafone Vodafone GSM

in MP&CG. Idea GSM Data card Vodafone provides GSM sim cards both in prepaid and postpaid. They do not provid e data cards TATA GSM Data card FWP (Fixed Wire-less Phone) CDMA Idea provides GSM and Data-card and both are available in prepaid and postpaid. TATA Telecommunication Limited is the main and strong competitor for Reliance Communication Limited because the give customer all the services which we provid es. Like: They have TATA docomo in GSM, reliance has Smart (now it is merged). They have TATA indicom in CDMA, reliance has reliance India mobile.

They provide data cards as TATA photon and reliance provides as Net-connect. Both provide FWP (Fixed wireless phone). In prepaid, now a day every telecom player is providing the same facility. Like, if a customer buys any new prepaid connection he has option to go with all call @ 1paisa/sec o r all call @50 paisa/ min. But in postpaid there is great competition. That is why, in MP&CG there is a big tariff war. Tariff comparison: (CDMA) Reliance TATA Reliance TATA Reliance TATA Plan name Simple 99 149 Rental Simple PPS 199 249 rental Simple 399 modified 399 rental Rental (Rs) 99 149 199 249 399 399 Free Talk value NA NA 15000 sec Rs 200 Rs 399 (L+N) Rs 300 (L+N) Free SMS Rs 99 150 NA 250 Rs 399 (L+N) Rs 399 (L+N) Outgoing rates Local (same network) 50 paisa/ min 30 paisa/ min 1 paisa/ sec 1 paisa/ sec 50 paisa/ min 30 paisa/ min Local (other network) 50 paisa/ min 30 paisa/ min 1 paisa/ sec 1 paisa/ sec

50 paisa/ min 30 paisa/ min STD 50 paisa/ min 50 paisa/ min 1 paisa/ sec 1 paisa/ sec 50 paisa/ min 50 paisa/ min SMS Local 50 paisa 50 paisa 50 paisa 50 paisa 50 paisa 50 paisa National 50 paisa 50 paisa 50 paisa 50 paisa 50 paisa 50 paisa International Rs 5 Rs 5 Rs 5 Rs 5 Rs 5 Rs 5 In low rental plans reliance has 99 rental but in TATA rental is 149 but local c alls @30p. In per sec plan reliance has rental 199 but in TATA rental is 249. Reliance is c ostly.

Both provide 399 plans but in TATA local @30p STD@50p, but reliance all call@50p . GSM: Reliance Vodafone Airtel Idea TATA Plan name Simple PPS 199 Talk local 199 Freedom 249 Seconds 199 NA Rental (Rs) 199 199 249 199 NA Free Talk value Rs 150 (R-R) 199 mins (Local) 10500 sec (Local) NA Free SMS NA NA NA Outgoing rates Local (same network) 1 paisa/ sec 50 paisa/ min NA Local (other network) 1 paisa/ sec 50 paisa/ min 1 paisa/ sec NA STD (same network) 1 paisa/ sec 1 paisa/ sec NA STD (same network) 1 paisa/ sec Rs 1.50 / min 1.2 paisa/ sec 1 paisa/ sec NA SMS NA Local 50 paisa 50 paisa NA National Rs 1 60 paisa 50 paisa NA Rs 5 Rs 5 Rs 5 NA International 50 paisa 50 paisa Rs 5 50 paisa Rs 1.50 / min 1.2 paisa/ sec 1 paisa/ sec 1 paisa/ sec 150 (Local) 1 paisa/ sec 15000 sec 200 In per sec plans with GSM, Vodafone is not providing per sec plan in postpaid, bu t rest of players provide like reliance provides in 199 rental, Airtel in 249, idea in 199 . As far as the call rates are concerned, reliance and idea is giving flat all cal ls @ 1paisa/sec, but in Airtel for same network it is 1piasa/sec but for other it is 1.2paisa/sec. it means in terms of outgoing call rates Airtel is charging more then the rest.

If we talk about the SMS, all players charge local SMS@ 50 paisa/SMS and interna tional @ Rs 5/SMS, but for national SMSs reliance and idea provides @ 50p/SMS, Airtel charge 60p. And Vodafone charge Rs 1/ SMS. Here Vodafone is costly.

Reliance Vodafone Airtel Idea TATA Plan name Simple 399 Talk double 299 FTV 299 Value 299 NA Rental (Rs) 399 299 299 299 NA Free Talk value Rs 399 (R-R) 299 mins (V-V Local) 299 500 min NA Free SMS 399 299 NA Outgoing rates Local (same network) 50 paisa/ min 50 paisa/ min NA Local (other network) 50 paisa/ min 40 paisa/ min NA STD (same network) 50 paisa/ min 50 paisa/ min NA STD (same network) 50 paisa/ min 50 paisa/ min NA SMS NA Local 49 paisa 50 paisa NA National Rs 1 49 paisa 50 paisa NA Rs 5 Rs 5 Rs 5 NA Customer who wants a per min plans in a cheep rates and having more then 500/-Rs International 50 paisa 50 paisa Rs 5 50 paisa Rs 1.50 / min Rs 1.50 / min Rs 1.50 / min 50 paisa/ min 99 paisa/ min Rs 1.50 / min 49 paisa/ min 150 (Local) 40 paisa/ min 200 usage per month for them, Reliance customers can go with 399 rental, but rest of operators are providing 299 plan.

In reliance customer gets double of rental, Rs 399 as TV, and 399 for SMS. Same in Vodafone rental is 299 but benefit is 598. But Airtel and idea you will not get it. In Airtel call chargers is so costly compared to rest, so if customer wants all calls @ 50p, he can have an add-on 35/-Rs/ month and his all call and SMS will be @50p.

Now if we compare all the players idea is providing the better facilities in the lower rental of 299. Reliance provides all@50p in 399 rental, but idea charge 40p for local a nd 50p for STD. However reliance gives double of rent and idea give benefit of 400 in 2 99 rent. Data Card: Reliance Reliance TATA Idea Airtel Plan name Platinum plan Unlimited 799 My unlimited Unlimited Surf 699 Rental 1500 799 799 699 699 Usage Unlimited Unlimited (20 GB) Unlimited Unlimited Unlimited Speed Up to 144 Kbps Up to 144 Kbps Up to 153 Kbps Up to 238 Kbps Up to 256 Kbps Additional charges NA Rs 2/ MB NA NA NA The cost of device (data card) is quit equal. (Airtel has not launched data card. ) In TATA unlimited usage plan the rent is 799. But in idea and Airtel rent is 699, here reliance is giving so called unlimited plan where limit is 20 GB. But if customer wants the unlimited plan then he can go with platinum plan renta l is

1500/-Rs per month which is costlier then the rest. As far as the speed is concerned Idea is giving speed up to 238 Kbps which is th e fastest then the rest. Where TATA photon gives speed upto 153 Kbps and reliance Net conn ect gives 144 Kbps, which is the slowest among the all telecom players.

Here the device cost is quite equal. Here the device cost is quite equal. FWP: Reliance TATA Airtel Plan name Simple 199 149 rental Rental 199 149 NA Free usage Rs 149 Free SMS NA 150 NA Outgoing rates Local (same network) 50 paisa/ min Local (other network) 50 paisa/ min 75 paisa/ min STD (same network) 50 paisa/ min Rs 1/ min STD (other network) Rs 1/ min SMS Local 50 paisa/ min NA National 50 paisa/ min NA International Rs 5 Rs 5 NA 50 paisa/ min 50 paisa/ min 50 paisa/ min 50 paisa/ min 50 paisa/ min 50 paisa/ min 50 paisa/ min 75 paisa/ min 100 mins (L+N) Landline 2500 mins (Airtel) In FWP segment Reliance and TATA has walky talkies but Airtel has wire-line phon es. In this segment it is used for the office purpose, so people prefer low rental p lans because of large no of mobile user. Reliance charges all call and SMS @50p so does the T ATA. But the rental is 199 in Reliance and 149 in TATA. In Reliance customer has option to choose numbers like 6 digit number (Like BSNL land-lines), or 10 digit numbers like mobile phones.

Way to increase market share:Market scenario: in term of providing CDMA services. As per TRAI annual reportsecond largest consumer based telecom player in the India. Reliance has the larg est market share As far as the market share is concerned, Reliance Communication limited is the st March 2009 Fig. 1 Market Share of Wireless operators (in %) as on 31

Fig. 2 Market Share of Wireless operators (in %) as on 31st May 2010 Fig. 3 Subscriber base (In Millions) Market Share of CDMA operators (in %) as on 31st March 2009

wireless (GSM+CDMA) subscribers has reached to 611 millions. Reliance in last few years:India. Among the CDMA providers it is the leading telecom company having 52.65 m illion of customers across the country. And we have 20.02 millions GSM customers. If we talk about the whole Indian telecommunication industry, the total number o f Fig. 4 Subscriber base (In Millions) Market Share of GSM operators (in %) as on 31st March 2009 As it is earlier mentioned and shown in the annual reports and in the surveys, r eliance communication limited has the second maximum market in the whole country. We are currently having 17.65% of the whole wireless (GSM+CDMA) market in India. And in CDMA reli ance has 55.71% and among all the GSM service providers Reliance has 6.73% of market share in Since Reliance had launched in 2002, it is seen ups and downs every years. Eithe r it is because of external or internal factors. In the starting it went down because at the time they have started their business with the postpaid connection and there were no credit lim it factor so they couldn t handle the market but after two three years they have overcame. Now in th e whole country there are 23 circles, in which reliance communication limited is operati on in 21 circles (Andhra Pradesh, Bihar, Chennai, Delhi, Gujarat, Haryana, Himachal Pradesh, Jamm u & Kashmir, Karnataka, Kerala, Kolkata, Madhya Pradesh, Maharashtra, Mumbai, Orissa , Punjab, Rajasthan, Tamil Nadu, UP (E), UP (W) and West Bengal). In the beginning, Relian ce has

% of 17.54 the In the last 5 years, the market share of Reliance is changing per year. % of 17.54 the In the last 5 years, the market share of Reliance is changing per year. focused more on CDMA operators and started their business as Reliance India Mobi le (RIM) in most of the circles, and for GSM they had Reliance Telecom Limited (RTL), which had its operations in 8 circles (Assam, Bihar & Jharkhand, Calcutta, Himachal Pradesh, M adhya Pradesh & Chhattisgarh, North east, Orissa, West Bengal), afterward they have la unched their GSM services in the rest of 13 circles. This is the main cause that in GSM servi ce providing they are on no. 5 among the rest. Market share of reliance in last 5 years If we see to it then it is very easy to understand that on year 2005-06, Relianc e has 19.21% of the market share, however it ranked 3ed in that year, but in 2006-07 its market dipp ed to 16.96%. In the year 2007-08 the company putted affords to make the market share up and it w orked, they captured market, along with the Reliance became India s second highest consumer based company and the same happened in the 2008-09 and share went up to 18.55 % of the Indian wireless subscription. But in 2009-2010 its market share is decrea sed and now has 17.65 % of market share. Now as far as the growth is concerned, reliance had growth of 65.65% in 2005-06 financial year, then in 2006-07 they had growth of 61.81%, in 2007-08 it was 63. 51%, and in 2008-09 reliance had growth of 55.84%.

Reliance Communication is now focusing more on Value Added Services (VAS) then t he core products. Now they are more focusing to giving new and the best services (V AS) to the customer like SMS, MMS, caller-tunes, alerts (cricket, football, missed call, jo kes etc). If we talk about the core products, they are more focused on selling maximum numbers of the Data-cards. Because if a customer go with a data card, he has to buy the device which means customer is willing to use the product for a long time it makes a fixed and certain amount w hich company will get every month. `In postpaid company is focusing to the maximum of the sales through the DSA s (Di rect Sales Associates) and PTR (Post Through Retailer) every postpaid location. The n umbers of the DSA s are decided according to the area. DSA of Reliance Communication: As it is known that Direct Sales Agency/Associates is a very important part for any business. But if we talk about the Reliance communic ation, here in postpaid DSA s are vary helpful for business. The person who is already in the direct sales can be the channel partner of reliance. And I was supposed to find this kind of firms. Like the person who has any FMCG companies agency, owner of cyber caf, computer hardware shops, mobil e store owner etc. Direct Sales Associate GSM (Connections) Mobiles phones CDMA (Connections) FWP (Hello) Data card (Net connect) Prepaid to Postpaid migration A DSA is authorized to deal in following services to sell:-

Investment of DSA: To be a DSA, a firm needs following: 1) D.D. of 50,000/-Rs as security deposit 2) TIN no of Firm 3) Registration no. of shop 4) Rent agreement of shop 5) PAN card of Firm s owner 6) 2 passport size photo 7) Bank current account 8) 1 canceled check 9) 3 stamp paper, each of Rs 100/10) Address Proof Some more things can be counted as investment which is not mandatory but very im portant, like some items for the selves of the shop like:Mobiles phones worth Rs 10,000/Data cards worth Rs 10,000/FWP worth Rs 5,000/

Overall if we calculate the initial investment, it would be around 1, 00,000/-Rs . Where 50,000/Rs is refundable. Process of rolling out a new DSA: After the submission of all the documents (above mentioned), with in 7 days he c an start his business in his area. After the submission of the documents, POS code is generated with in 3 days simultaneously CRT code is generated in 5 days. And finally SAP code is generate d in 7 days. After generation of SAP code DSA can begin his business in defined area. Basical ly SAP code is used for billing.

Return On Investment (ROI): Now as far as the ROI is concerned, the investment is very low but the return will be good if DSA just achieve his target. Here the DSA has a flat target of 75 postpaid connections per month. Where he ha s the option to sell:

1) GSM SIM Cards [Known as SMART Mobile] 2) CDMA SIM Cards [Known as RIM (Reliance India Mobile)] 3) Data Cards [Known as Net-connect] 4) FWP (Walky Talky) [Known as Hello] 5) Prepaid to Postpaid Migration If he sells any one of them then 1 connection will count. Now as far as the commission is concerned the DSA gets the same in 3 installments (For GSM and CDMA):

Base commission Target based incentive (75) 3ed Bill incentive Total With Entry Cost 500/150/ 100/ 750/ Without entry cost 400/150/ 100/ 650/

For a postpaid connection customer gives following:250/Rs as security deposit (refundable) Entry Cost: 1) 2) These 450/-, 350/-Rs (security deposit + activation charges) which customer pays

is Entry Cost. 3) I.D proof. Activation charges:-Rs 100 for GSM, Rs 200 for CDMA & Data card, Rs 200 for Data card, Rs 50 for FWP. 4) Address Proof. 5) 1 passport size photo. For A Data card DSA gets flat 400/-Rs. For A prepaid to postpaid migration he gets flat 450/-Rs. For A new connection who takes simple 99 plan he gets flat 400/-Rs.

Now If he just achieve the target he gets maximally. 75 750 = 56250/-per month Let s take 55,000/ month in round figure. Expenses: Salary of 4 sales executive (42,500/-Rs) 10,000/-Rs Convene of executive (42,500/-Rs) 10,000/-Rs Shop rent Electricity bill + other expenses 3ed Bill liability 5,000/-Rs Total expenses Total income Total expenses = Total profit 35,000/-Rs 5,000/-Rs 5,000/-Rs 55,000 35,000 = 20,000/-Rs per month So the conclusion is that he is investing just Rs. 1,00,000/-[where 50k is refun dable] and he earns 20,000/-per month. It means with in 21/2 months he ll take out his invested money. 3ed Bill liability: DSA has a 3ed bill liability on every connection. It means, DSA is responsible f or submission of 3ed bill of the customer. He has to find the customers who at leas t pay first 3 bills. And if a customer doesn t pay, reliance charge 100% claw back on the connection. I t means he will be charged 100 % of his commission in the next month. Time duration of payments of commission:The payment is made in 3 installments but now it is made in 2 installments. In 1 st installment, Base commission and Target Based Incentive are paid. And 2ed instal lment (3ed bill 3ed 1st incentive) is paid according to the payments of bill of customers. installment o f commission is paid with in the 45 days (on an average). Like if the payment of 1 month (01june2010 to 30-june-2010) is to make and on of July 1, 2010 he submit his bill in th e company then he ll get his 1st installments on of July 7, 2010 (if the bill is of > 1,00,0

00/-INR), or on July 14, 2010 or on July 21, 2010 (if the bill is of < 1,00,000/-INR). There is another way to increase Direct Sales of postpaid through PTR.

It means a layman who spends 300 Rs on mobile recharge in a month and is a permanent customer of t hat particular A retailer gets just 3% on a simple recharge. It means if he is doing a recharge of Rs 100 then he ll get just Rs 3. If on an average a layman spend Rs 300 on mobile. of 50/-Rs on every sim card. It means he will get 300/-Rs on every migration. It means a layman who spends 300 Rs on mobile recharge in a month and is a permanent customer of t hat particular A retailer gets just 3% on a simple recharge. It means if he is doing a recharge of Rs 100 then he ll get just Rs 3. If on an average a layman spend Rs 300 on mobile. of 50/-Rs on every sim card. It means he will get 300/-Rs on every migration. PTR (Post Through Retailer): PTR (Post Through Retailer) is an important and easiest way to make a new postpa id connection. It is very convenient way of migration of prepaid to postpaid connec tions. In the PTR, retailer migrate prepaid connection to the postpaid connections. It talks m inimum afford to convince the customer for postpaid migration because he/she might be his regular customer. It is not very difficult work to convince the retailer for PTR. Because they do their business on the basis of commission on recharge vouchers and selling new prepaid sim cards (most of the case). While doing the PTR, a retailer gets 250/-for each connection and he can earn a margin retailer then retailer is earning just Rs 9 in month. A retailer can be convinced by saying that we are providing you the commission o f more then 30 months if u does a single migration. Like you are getting 9/-Rs in a mon th from one customer and now we ll give you 300/-Rs for an each pre to post migration. And you can calculate the earning 9/-Rs from one customer in month. How much time you will t ake to get 300/-Rs? More then 30 months! And it is very difficult that a single customer wi ll come to you for next 30 months and buy a 300/-Rs recharge per month for the same mobile numb er. Retailers are also liable for the 3ed bill payment. They are also liable for 100 % claw back. Retailers must take following by every customer:1) 2) Activation chargers 200/-Rs for CDMA, 100/-Rs for GSM. 3) 1 photo passport size

4) Address proof 5) Photo proof 250/-Rs. As security deposit The service of postpaid connection will start with in 48 hrs. After visiting the AV/CV team. Who verify the address of customer and decide the credit limit of customer.

Reliance and 3G: Recently, Reliance Communication Limited has bid for the new 3G spectrum in Indi a. Among all the circles, Reliance Communication Limited had successfully get the l icense for 13 circles. They acquired it in 8584.78cr INR.

As per the TRAI and DoT norms, the Reliance will be able to provide its 3G based services from 1 September 2010. The spectrum of following circles is bought in:

Delhi & NCR at Rs 3316.93 cr Mumbai: at Rs.3247.07 cr Punjab: at Rs.322.01 cr Kolkata: at Rs.544.26 cr Madhya Pradesh & Chhattisgarh: at Rs.258.4 cr Bihar & Jharkhand : at Rs.203.46 cr Rajasthan: at Rs.321 cr Orissa : at Rs.96.98 cr West Bengal: at Rs.123.36 cr Himachal Pradesh: at Rs.37.23 cr. Jammu & Kashmir : at Rs.30.30 cr Assam: at Rs.41.48 cr North East: Aircel, Bharti, Reliance at Rs.42.30 cr Reliance communication and Bharti Airtel has bought license for maximum circles. There will be a cut throat competition in next some Because BSNL and MTNL have already services in very low prices. For example, BSNL is which is very cheep according to the current marker scenario. of India providing the Reliance and rest of the companies have paid a huge amount to the govt. (approx .seventy thousand crore). So this will be a great challenge for the mark eters. and MTNL have video launched the 3G services in more then 480 cities across the country. The pricing of the services (like video calling, high speed data transfer through mobile etc) will be the to ughest work. BSNL already providing the calls @ 30p/min, months.

Findings: SWOT analysis Strength Commission Structure Provides both GSM & CDMA Fast Activation Process Network Connectivity Data GPRS Weakness Branding Image Distribution problem Limited product portfolio Lack of Competitive Strength Opportunity Preference of GSM over CDMA Rural Telephony New 3G market in maximum circles New Specialist Application Threat Political destabilization. New Entrants IT Development Market Demand

Problem being faced:

Retailers are not motivated to sale the postpaid connections because of less sal es promotions of postpaid in comparison of prepaid. Lack of communication between retailers and the distributors or direct sales tea m. Customers are afraid of buying postpaid connection because of wrong billing. The commission of DSA s is very less and just for one time, this is the cause the firms are not motivated to be channel partner of reliance. Retailers are not aware of tariff plans of reliance. Distribution is not proper. Price of some services is more costlier then other players and the benefits are not according to the high price. (like in data card 1500/-per month unlimited plan b ut the speed is just 144 Kbps, where other players provides better speed in just Rs 700 to 800) Retailer doesn t get claim at proper time (in case of prepaid) Penalty charges are so high. Like 100% claw back in 3ed bill case. Lesser focus on postpaid then prepaid by the distributors.\ Lack of sales promotions and advertisements of postpaid.

Recommendations:

Retailer Satisfaction:Reliance should focus on retailer satisfaction, because the person who directly interact with the customers. And their satisfaction will motivate them, and they will suggest reliance to the customers. This can be done by proving them claims/commi ssions on time

Increase in Sale:Increase in sales can be better option for capturing the maximum market. This can weather be done by DSA s, PTR or by direct sales or corporate sales team. Sales Promotion:Sales promotion and advertisements of postpaid plan can be seen hardly in the streets, on the retailers desks. It should be increased so that can make good a better market for postpaid too. Customer Satisfaction:should be proper. The customer should get the product at the time of delivery at same place he/she wants to. The distribution of the product like sim cards, recharge vouchers are not proper . It Proper Distribution Channel:Reliance communication Limited should focus more on the customer satisfaction. By providing them the be st services in the cheep rates. And the problem faced by the customer should be res olved as soon as possible.

Conclusion: Indian economy is an emerging one and is growing very fast at the average GDP ra te 89% so in this emerging market competition level among telecommunication services pr ovides new players are coming who will necessarily intensify the competition. New produ cts and new schemes are being offered by the telecom service providers. The need for large i nformation capacity has grown tremendously due to the demand of real time information. Telecommunication has now become a major information transmission system and tel ecom has undoubtedly emerged as the most important industry in India. Indian telecom comp anies are putting in their best offer to rope in major telecom operators of the world e.g. Vodafone, Aircel and MTN etc. are playing their role in synergy with the operation of the Indian companies. Process of acquisition and merger are in process and future will be only for tho se companies who have an edge over others in the field. Service provided and the better quality o f network etc. is it provided at affordable cost. In this process of competition is assumed that o nly those companies will survive who adopt suitable market strategy and technology innovat ion and up gradation to suit the aspiration and demand of the consumer. Reliance Communication Limited is the one of the oldest service provider in the Indian telecom industry. They are providing the best services to customers in the cheep rates. The is looking forward for the new 3G market. Creating new strategy for the new mark et would be management of company is very good to work. Employees are motivated to work. The company helpful to increase the market share. The IRMS can be increased by doing some am endments by the employees in the field but not by making some new changes in the policies. S ome new tariff plan should be launched because all the companies are giving the plans in very c heep rates. They also believe in customer satisfaction but now they should focus more on it. In t his market scenario, the competition is very tough, if they want to get more success they n eed to be hungry.

Bibliography: 2005-06 2006-07 2007-08 2008-09 Web: www.rcom.co.in www.bradbandindia.org www.dot.gov.in www.trai.gov.in annual annual annual annual report report report report of of of of TRAI TRAI TRAI TRAI