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TATA DoCoMo
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Table of Contents
ENVIRONMENTAL THREAT OPPORTUNITY PROFILE ............................................................................... 3 PORTERS 5-FORCE ANALYSIS ................................................................................................................. 4 PESTEL ANALYSIS..................................................................................................................................... 5 STRATEGIC ADVANTAGE PROFILE ........................................................................................................... 7 SWOT ANALYSIS ...................................................................................................................................... 8 APPENDIX ................................................................................................................................................ 9
Economic
Expanding Indian economy with positive GDP trends, increasing urbanization & youth population.
Social
People are becoming increasingly used to new technology in their lifestyle. They are affording prices to get superior usage experience. Spectrum license allocation is tightly controlled, depends on the impression of company in the view of government
Political
Regulatory
With departure of A.Raja, TRAI is actively making moves to make up its image by taking initiative to pull back wrongly allocated spectrum and inviting new bids for it. Also, its in favour of tariff hike.
Market
Saturated, as recent data shows a decreasing growth rate of net subscriber additions over the previous quarters. Also, the churn rate is quite high.
Traffic growth & data revenue will be the key drivers going forward, as the churn rate leads to better competition.
Sector
Analysis
Strategic Implication Results are first push based E-mail service, SMS, Route Finder & Smart Pilot of Tata DoCoMo after its pact with NTT DoCoMo & Navteq, to be the best in business in providing out-of-the-box services. Tie-up with Huwaei to set up 3G network in 5 of its circles. Tie-up with ZTE to provide low cost dongles, Data Cards keeps DoCoMo at a advantage position. First Indian private operator to launch 3G services. Already conducted 4G trials in physical geographies. Launched i-Mode, a mobile based internet platform service which was an instant hit.
Leverage the global scales by entering new markets for offsetting the decreasing growth rate in Indian market. International Also, tie-ups with International telecom firms would result in improving service quality & innovation. Need of infrastructure for providing better networking and need of content providers Supplier for launching value added apps & VAS is increasing in the industry Enables to provide high quality uninterrupted services and also bring in new apps towards luring customers.
Technology
Inter-firm rivalry
Little differentiation between competitors products and services resulting in cut throat competition in order to steal customers by means of price wars.
HIGH
Bargaining power of consumers is very high because of the large variety of choices available and all the telecom operators providing similar coverage and services.
HIGH
TATA DoCoMo 5 Strategic Analysis Factor Analysis Suppliers: Technological support, equipment makers, fibre optic cable manufacturers. Very less substitutes and high competition in the sector leave fewer options. No barriers related to capital investment (as leasing of towers can be done) & brand loyalty. Only barrier is gaining spectrum access and low tariffs Substitutes: VOIP, Satellite phones, Online chat, Email. Presently mobility, penetration and price are issues against them. Effect on Tata DoCoMo Strategic Implication As the choice of suppliers is very less viz., Huwaei, ZTE. Its an advantage to have a joint venture with supplier like NTT DoCoMo, there by gaining technological support to bring our innovative products, services. Introduce fresh services where customer can find value immediately to build a customer base and retain them, as a new entrant penetrative pricing policy hurts unless it is having deep pockets Can be put to good use if telecom operators introduce special packages for utilizing their internet service over high end mobile phones to access emails, Skype, social networking.
MODERATE
MODERATE
Threat of substitutes
MODERATE
PESTEL ANALYSIS
Situation Analysis Test for TATA DoCoMo Strategic Implication
Political
Due to unearthing of the 2G Not favourable in terms of scam there would be tighter spectrum allocation and an Need to face audit and control. As a policy uncertainty still prevails if hardship for of the TATA Group no form of TTSLs request for obtaining obtaining corruption is appreciated or additional spectrum for 39 timely adopted. Other competitors districts in Delhi will be spectrum. might indulge in lobbying approved or not. activities and get undue advantages. Teledensity has improved from under 4% in March-01 to around 53% by the end of Secular March-10. The mobile increasing subscriber base has grown macro trend. from under 2Mn. at the end of FY 00' to touch 584Mn. at the end of March-10. Further penetration is possible in rural areas. While intense competition is making the margins wafer thin, company will have to offer more value to customers and increase the subscriber base by aggressive marketing and technological advancements. Continued on next page
Economic
TATA DoCoMo 6 Strategic Analysis Situation Analysis Test for TATA DoCoMo Strategic Implication Plans and tariffs will have to offered keeping in mind the current demands of the youth; there is still a scope to tap rural markets through extended network infrastructure initiatives viz., mobile banking, and mobile farming tips. Tie-up with NTT DoCoMo have to be leveraged further to increase customer activation, engagement and be the most sought after mobile service among youth & corporate markets by bringing affordable 3G mobile phones, VAS. The company should research about the matter clearly; provide scientific findings as they are because people understand that everything comes with a price. And be the first to acknowledge the concerns of the people to garner customer trust, loyalty and a larger market share. Other companies that followed unfair means to win the spectrum allocation are in troubled waters, whereas TATA Docomo has benefitted from its fair policies. It should pat its back for this and march on with the progress it has seen with full vigour.
Social
Youth population is increasing, so does the adoption of new mobile In line with the technology in daily routine. renewed social Urban migration is favourable needs. to increased activation of value added services. Dependences on technology has increased many fold during recent times in an urge to provide innovative services Advantageous backed by superior service position. quality and at a reduced operational cost for companies.
Technological
Has to overcome by People have growing concerns spreading about the kind of damage the awareness Environmental cellular waves do to the brain about best and other parts of the body. usage practices of cell phones. Recently, due to allegations and speculations surrounding the 2G spectrum sale many service providers are in legal doldrums and have to face wrath of CBI and judiciary. This has jeopardized some joint ventures in the telecom sector like Unitechs and Telnors UNINOR.
Legal
Marketing
To "Keep It Simple" be it services, products, tariff plans or customer care grievance redressals.
Finance
Monitoring Operating Profit per customer and bringing it to the industry benchmark level. Either through rate hikes or through increased usage of VAS by its customers.
R&D
Has advantage over its peers in R&D, as it can leverage its relationship with NTT DoCoMo, which is known for innovation & technology.
Better network utilisation by sharing network with other operators and at the same time making sure that the network remains congestion free.
Human Resources
Set up an institute in record 6 years, PMS was Shared values of TATA group designed, won various HR awards for its HR keep the employees focussed policies & motivated. TTSL was conferred Awards for Best-inClass HR Practices from the HRD congress 2010.
SWOT ANALYSIS
Strenghts 1.First to introduce secs tariff & half paisa per sec plan 2.Good advertising,"Keep it simple silly"campaign 3.High brand visibility because of TATA umbrella. 4.Flexible plans attract customers across diff segments 5.Assistance/ JV from NTT Docomo (Japan) 6.An array of VAS to satisfy market demands 7.Strong Positioning-Affordable pay only as per use plans 8.Market tieups with leading telecom equipment brands. 9.Youth appeal Opportunities 1.Fast expanding cellular market 2.Latest and low cost technology 3.Untapped rural market 4.Upcoming VAS as per changing market needs 5.Tap increasing 3G users 6.Introduce new plans for growing internet user base Threats 1.Competitors low price offering 2. Saturation point in-Basic telephony service 3.Mobile Number Portability Weakness 1.Weak customer service leads to customer erosion 2.Service centre issues also prominent 3.Untapped Rural Market 4.Price Higher than BSNL and MTNL 5.Signal strength in few areas is major concern 6.Post paid connections are unavailable as of now.
APPENDIX