AMITY BUSINESS SCHOOL

1.1INDIAN TELECOM INDUSTRY

History of Indian Telecommunications started in 1851 when the first operational land
lines were laid by the government near Calcutta (seat of British power). Telephone
services were introduced in India in 1881. In 1883 telephone services were merged with
the postal system. Indian Radio Telegraph Company (IRT) was formed in 1923. After
independence in 1947, all the foreign telecommunication companies were nationalized to
form the Posts, Telephone and Telegraph (PTT), a monopoly run by the government's
Ministry of Communications. Telecom sector was considered as a strategic service and
the government considered it best to bring under state's control.

The first wind of reforms in telecommunications sector began to flow in 1980s when the
private sector was allowed in telecommunications equipment manufacturing. In 1985,
Department of Telecommunications (DOT) was established. It was an exclusive provider
of domestic and long-distance service that would be its own regulator (separate from the
postal system). In 1986, two wholly government-owned companies were created: the
Videsh Sanchar Nigam Limited (VSNL) for international telecommunications and
Mahanagar Telephone Nigam Limited (MTNL) for service in metropolitan areas.

In 1990s, telecommunications sector benefited from the general opening up of the

economy. Also, examples of telecom revolution in many other countries, which resulted
in better quality of service and lower tariffs, led Indian policy makers to initiate a change
process finally resulting in opening up of telecom services sector for the private sector.
National Telecom Policy (NTP) 1994 was the first attempt to give a comprehensive
roadmap for the Indian telecommunications sector. In 1997, Telecom Regulatory
Authority of India (TRAI) was created. TRAI was formed to act as a regulator to
facilitate the growth of the telecom sector. New National Telecom Policy was adopted in
1999 and cellular services were also launched in the same year.

Telecommunication sector in India can be divided into two segments: Fixed Service
Provider (FSPs), and Cellular Services. Fixed line services consist of basic services,

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national or domestic long distance and international long distance services. The state
operators (BSNL and MTNL), account for almost 90 per cent of revenues from basic
services. Private sector services are presently available in selective urban areas, and
collectively account for less than 5 per cent of subscriptions. However, private services
focus on the business/corporate sector, and offer reliable, high- end services, such as
leased lines, ISDN, closed user group and videoconferencing.

Cellular services can be further divided into two categories: Global System for Mobile
Communications (GSM) and Code Division Multiple Access (CDMA). The GSM sector
is dominated by Airtel, Vodafone-Hutch, and Idea Cellular, while the CDMA sector is
dominated by Reliance and Tata Indicom. Opening up of international and domestic long
distance telephony services are the major growth drivers for cellular industry. Cellular
operators get substantial revenue from these services, and compensate them for reduction
in tariffs on airtime, which along with rental was the main source of revenue. The
reduction in tariffs for airtime, national long distance, international long distance, and
handset prices has driven demand.

The telecom sector is also afflicted by a number of restraints. These include:

• Sluggish pace of reform process.

• Lack of infrastructure in semi-rural and rural areas, which makes it difficult to

make inroads into this market segment as service providers have to incur a huge
initial fixed cost.

• Limited spectrum availability.

But notwithstanding these constraints, telecom sector has undergone a revolution in the
past decade and has played a major part in bridging the rural-urban divide.
The telecom industry is one of the fastest growing industries in India. India has nearly
200 million telephone lines making it the third largest network in the world after China
and USA. With a growth rate of 45%, Indian telecom industry has the highest growth rate
in the world.

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The telecom network in India is the fifth largest network in the world meeting up with
global standards. Presently, the Indian telecom industry is currently slated to an estimated
contribution of nearly 1% to India’s GDP.

The Indian Telecommunications network with 110.01 million connections is the fifth
largest in the world and the second largest among the emerging economies of Asia.
Today, it is the fastest growing market in the world and represents unique opportunities
for U.S. companies in the stagnant global scenario. The total subscriber base, which has
grown by 40% in 2005, is expected to reach 250 million in 2007. According to
Broadband Policy 2004, Government of India aims at 9 million broadband connections
and 18 million internet connections by 2007. The wireless subscriber base has jumped
from 33.69 million in 2004 to 62.57 million in FY2004-
2005. In the last 3 years, two out of every three new telephone subscribers were wireless
subscribers. Consequently, wireless now accounts for 54.6% of the total telephone
subscriber base, as compared to only 40% in 2003. Wireless subscriber growth is
expected to bypass 2.5 million new subscribers per month by 2007. The wireless
technologies currently in use are Global System for Mobile Communications (GSM) and
Code Division Multiple Access (CDMA). There are primarily 9 GSM and 5 CDMA
operators providing mobile services in 19 telecom circles and 4 metro cities, covering
2000 towns across the country.

Evolution of the industry-Important Milestones

History of Indian Telecommunications
Year
• 1851 First operational land lines were laid by the government near Calcutta (seat
of British power)
• 1881 Telephone service introduced in India
• 1883 Merger with the postal system
• 1923 Formation of Indian Radio Telegraph Company (IRT)
• 1932 Merger of ETC and IRT into the Indian Radio and Cable Communication
Company (IRCC)
• 1947 Nationalization of all foreign telecommunication companies to form the

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Posts, Telephone and Telegraph (PTT), a monopoly run by the
government's Ministry of Communications
• 1985 Department of Telecommunications (DOT) established, an exclusive
provider of domestic and long-distance service that would be its own regulator
(separate from the postal system)
• 1986 Conversion of DOT into two wholly government-owned companies: the
Videsh Sanchar Nigam Limited (VSNL) for international telecommunications and
Mahanagar Telephone Nigam Limited (MTNL) for service in metropolitan areas.
• 1997 Telecom Regulatory Authority of India created.
• 1999 Cellular Services are launched in India. New National Telecom Policy is
adopted.
• 2000 DoT becomes a corporation, BSNL

Major Players
There are three types of players in telecom services:
• -State owned companies (BSNL and MTNL)
• -Private Indian owned companies (Reliance Infocomm, Tata Teleservices,)
• -Foreign invested companies (Hutchison-Essar, Bharti Tele-Ventures,
Escotel, Idea Cellular, BPL Mobile, Spice Communications)

BSNL
On October 1, 2000 the Department of Telecom Operations, Government of India
became a corporation and was renamed Bharat Sanchar Nigam Limited (BSNL). BSNL
is now India’s leading telecommunications company and the largest public sector
undertaking. It has a network of over 45 million lines covering 5000 towns with over 35
million telephone connections. The state-controlled BSNL operates basic, cellular (GSM
and CDMA) mobile, Internet and long distance services throughout India (except Delhi
and Mumbai). BSNL will be expanding the network in line with the Tenth Five-Year
Plan (1992-97). The aim is to provide a telephone density of 9.9 per hundred by March
2007. BSNL, which became the third operator of GSM mobile services in most circles, is
now planning to overtake Bharti to become the largest GSM operator in the country.

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BSNL is also the largest operator in the Internet market, with a share of 21 per cent of the
entire subscriber base.

BHARTI

Established in 1985, Bharti has been a pioneering force in the telecom sector with many
firsts and innovations to its credit, ranging from being the first mobile service in Delhi,
first private basic telephone service provider in the country, first Indian company to
provide comprehensive telecom services outside India in Seychelles and first private
sector service provider to launch National Long Distance Services in India. Bharti Tele-
Ventures Limited was incorporated on July 7, 1995 for promoting investments in
telecommunications services. Its subsidiaries operate telecom services across India.
Bharti’s operations are broadly handled by two companies: the Mobility group, which
handles the mobile services in 16 circles out of a total 23 circles across the country; and
the Infotel group, which handles the NLD, ILD, fixed line, broadband, data, and satellite-
based services. Together they have so far deployed around 23,000 km of optical fiber
cables across the country, coupled with approximately 1,500 nodes, and presence in
around 200 locations. The group has a total customer base of 6.45 million, of which 5.86
million are mobile and 588,000 fixed line customers, as of January 31, 2004. In mobile,
Bharti’s footprint extends
across 15 circles. Bharti Tele-Ventures' strategic objective is “to capitalize on the growth
opportunities the company believes are available in the Indian telecommunications
market and
consolidate its position to be the leading integrated telecommunications services provider
in key markets in India, with a focus on providing mobile services”.

MTNL

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MTNL was set up on 1st April 1986 by the Government of India to upgrade the quality of
telecom services, expand the telecom network, and introduce new services and to raise
revenue for telecom development needs of India’s key metros – Delhi, the political
capital, and Mumbai, the business capital. In the past 17 years, the company has taken
rapid strides to emerge as India’s leading and one of Asia’s largest telecom operating
companies. The company has also been in the forefront of technology induction by
converting 100% of its telephone exchange network into the state-of-the-art digital mode.
The Govt. of India currently holds 56.25% stake in the company. In the year 2003-04, the
company's focus would be not only consolidating the gains but also to focus on new areas
of enterprise such as joint ventures for projects outside India, entering into national long
distance operation, widening the cellular and CDMA-based WLL customer base, setting
up internet and allied services on an all India basis. MTNL has over 5 million subscribers
and 329,374 mobile subscribers. While the market for fixed wire line phones is
stagnating, MTNL faces intense competition from the private players—Bharti, Hutchison
and Idea Cellular, Reliance Infocomm—in mobile services. MTNL recorded sales of Rs.
60.2 billion ($1.38 billion) in the year 2002-03, a decline of 5.8 per cent over the previous
year’s annual turnover of Rs. 63.92 billion.

RELIANCE INFOCOMM

Reliance is a $16 billion integrated oil exploration to refinery to power and textiles
conglomerate (Source: http://www.ril.com/newsitem2.html). It is also an integrated
telecom service provider with licenses for mobile, fixed, domestic long distance and
international services. Reliance Infocomm offers a complete range of telecom services,
covering mobile and fixed line telephony including broadband, national and international
long distance services, data services and a wide range of value added services and
applications. Reliance India Mobile, the first of Infocomm initiatives was launched on
December 28, 2002. This marked the beginning of Reliance's vision of ushering in a
digital revolution in India by becoming a major catalyst in improving quality of life and
changing the face of India. Reliance Infocomm plans to extend its efforts beyond the
traditional value chain to develop and deploy telecom solutions for India's farmers,

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businesses, hospitals, government and public sector organizations. Until recently,
Reliance was permitted to provide only “limited mobility” services through its basic
services license. However, it has now acquired a unified access license for 18 circles that
permits it to provide the full range of mobile services. It has rolled out its CDMA mobile
network and enrolled more than 6 million subscribers in one year to become the country’s
largest mobile operator. It now wants to increase its market share and has recently
launched pre-paid services. Having captured the voice market, it intends to attack the
broadband market.

TATA TELESERVICES

Tata Teleservices is a part of the $12 billion Tata Group, which has 93 companies, over
200,000 employees and more than 2.3 million shareholders. Tata Teleservices provides
basic (fixed line services), using CDMA technology in six circles: Maharashtra
(including Mumbai), New Delhi, Andhra Pradesh, Tamil Nadu, Gujarat, and Karnataka.
It has over 800,000 subscribers. It has now migrated to unified access licenses, by paying
a Rs. 5.45 billion ($120 million) fee, which enables it to provide fully mobile services as
well. The company is also expanding its footprint, and has paid Rs. 4.17 billion ($90
million) to DoT for 11 new licenses under the IUC (interconnect usage charges) regime.
The new licenses, coupled with the six circles in which it already operates, virtually gives
the CDMA mobile operator a national footprint that is almost on par with BSNL and
Reliance Infocomm. The company hopes to start off services in these 11 new circles by
August 2004. These circles include Bihar, Haryana, Himachal Pradesh, Kerala, Kolkata,
Orissa, Punjab, Rajasthan, Uttar Pradesh (East) & West and West Bengal.

VSNL

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On April 1, 1986, the Videsh Sanchar Nigam Limited (VSNL) - a wholly Government
owned corporation - was born as successor to OCS. The company operates a network of
earth stations, switches, submarine cable systems, and value added service nodes to
provide a range of basic and value added services and has a dedicated work force of
about 2000 employees. VSNL's main gateway centers are located at Mumbai, New Delhi,
Kolkata and Chennai. The international telecommunication circuits are derived via
Intelsat and Inmarsat satellites and wide band submarine cable systems e.g. FLAG, SEA-
ME-WE-2 and SEA-ME-WE-3. The company's ADRs are listed on the New York Stock
Exchange and its shares are listed on major Stock Exchanges in India. The Indian
Government owns approximately 26 per cent equity, M/s Panatone Finvest Limited as
investing vehicle of Tata Group owns 45 per cent equity and the overseas holding
(inclusive of FIIs, ADRs, Foreign Banks) is approximately 13 per cent and the rest is
owned by Indian institutions and the public. The company provides international and
Internet services as well as a host of value-added services. Its revenues have declined
from Rs. 70.89 billion ($1.62 billion) in 2001-02 to Rs. 48.12 billion ($1.1 billion) in
2002-03, with voice revenues being the mainstay. To reverse the falling revenue trend,
VSNL has also started offering domestic long distance services and is launching
broadband services. For this, the company is investing in Tata Telservices and is likely to
acquire Tata Broadband.

HUTCH

Hutch’s presence in India dates back to late 1992, when they worked with local partners
to establish a company licensed to provide mobile telecommunications services in
Mumbai. Commercial operations began in November 1995. Between 2000 and March
2004, Hutch acquired further operator equity interests or operating licences. With the
completion of the acquisition of BPL Mobile Cellular Limited in January 2006, it now
provides mobile services in 16 of the 23 defined license areas across the country. Hutch
India has benefited from rapid and profitable growth in recent years. it had over 17.5
million customers by the end of June 2006.

IDEA

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Indian regional operator IDEA Cellular Ltd. has a new ownership structure and grand
designs to become a national player, but in doing so is likely to become a thorn in the
side of Reliance Communications Ltd. IDEA operates in eight telecom “circles,” or
regions, in Western India, and has received additional GSM licenses to expand its
network into three circles in Eastern India -- the first phase of a major expansion plan that
it intends to fund through an IPO, according to parent company Aditya Birla Group .

COMPANY MARKET SHARES

Company Million Subs
(Nov 2007)
% share
• BSNL 40.3 58.8
• Reliance 6.1 8.9
• Bharti 5.7 8.3
• MTNL 4.9 7.2
• Hutchison 2.9 4.2
• Idea Cellular 2.1 3.0
• BPL 1.4 2.1
• Tata Teleservices 1.3 1.9
• Spice 1.0 1.4
• Escotel 0.8 1.1
• Fascel 0.8 1.1
• Aircel 0.9 1.4
• Hexacom 0.2 0.3
• Shyam Telelink 0.1 0.2

Telecom Policy Environment

Indian telecommunications today benefits from among the most enlightened regulation in
the region, and arguably in the world. The sector, sometimes considered the “poster-boy

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for economic reforms,” has been among the chief beneficiaries of the post-1991
liberalization. Unlike electricity, for example, where reforms have been stalled,
telecommunications has generally been seen as removed from “mass concerns,” and thus
less subject to electoral calculations. Market oriented reforms have also been facilitated
by lobbying from India’s booming technology sector, whose continued success of course
depends on the quality of
communications infrastructure. Despite several hiccups along the way, the Telecom
Regulatory Authority of India (TRAI), the independent regulator, has earned a reputation
for transparency and competence. With the recent resolution of a major dispute between
cellular and fixed operators (see below), Indian telecommunications, already among the
most competitive markets in the world, appears set to continue growing rapidly. While
telecom liberalization is usually associated with the post-1991 era, the seeds of reform
were actually planted in the 1980s. At that time, Rajiv Gandhi proclaimed his intention of
“leading India into the 21 st century,” and carved the Department of Telecommunications
(DOT) out of the Department of Posts and Telegraph. For a time he also even considered
corporatizing the DOT, before succumbing to union pressure. In a compromise, Gandhi
created two DOT-owned corporations: Mahanagar Telephone Nigam Limited (MTNL),
to serve Delhi and Bombay, and Videsh Sanchar Nigam Limited (VSNL), to operate
international telecom services. He also introduced private capital into the manufacturing
of telecommunications equipment, which had previously been a DOT monopoly. These
and other reforms were limited by the unstable coalition politics of the late 1980s. It was
not until the early 1990s, when the political situation stabilized, and with the general
momentum for economic reforms, that telecommunications liberalization really took off.
In 1994, the government released its National Telecommunications Policy (NTP-94),
which allowed private fixed operators to take part in the Indian market for the first time
(cellular operators had been allowed into the four largest metropolitan centers in 1992).
Under the government’s new policy,
India was divided into 20 circles roughly corresponding to state boundaries, each of
which would contain two fixed operators (including the incumbent), and two mobile
operators. As ground-breaking as NTP-94 was, its implementation was unfortunately
marred by regulatory uncertainty and over-bidding. A number of operators were unable
to live up to their profligate bids and, confronted with far less lucrative networks than

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they had supposed, pulled out of the country. As a result, competition in India’s telecom
sector did not really become a reality until 1999. At that time the government’s New
Telecommunications Policy (NTP-99) switched from a fixed fee license to a revenue
sharing regime of approximately 15%. This figure has subsequently been lowered (to
10%-12%), and is expected to be reduced even further over the coming years. Still,
India continues to derive substantial revenue from license fees ($800 million in 2001-
2002); leading some critics to suggest that the government has abrogated its
responsibilities as a regulator to those as a seller. Another, perhaps even more significant,
problem with India’s initial attempts to introduce competition was the lack of regulatory
clarity. Private operators complained that the licensor – the DOT – was also the
incumbent operator. The many stringent conditions attached to licenses were thus seen by
many as the DOT’s attempt to limit competition. It was in response to such concerns that
the government in 1997 set up the Telecom Regulatory Authority of India (TRAI), the
nation’s first independent telecom regulator. Over the years, TRAI has earned a growing
reputation for independence, transparency and an increasing level of competence. Early
on, however, the regulator was beleaguered on all fronts. It had to contend with political
interference, the incumbent’s many challenges to its authority, and accusations of
ineptitude by private players. Throughout the late 1990s, TRAI’s authority was steadily
whittled away in a number of cases, when the courts repeatedly held that regulatory
power lay with the central government. It was not until 2000, with the passing of the

TRAI
Amendment Act that the regulatory body really came into its own. Coming just a year
after NTP-99, the act marks something of a watershed moment in the history of India
telecom liberalization. It set the stage for several key events that have enabled the
vigorous competition witnessed today. Some of these events include:
• The corporatization of the DOT and the creation of a new state-owned telecom
company, Bharat Sanchar Nigam Ltd (BSNL), in 2000;
• The opening up of India’s internal long-distance market in 2000, and the subsequent
drop in long-distance rates as part of TRAI’s tariff rebalancing exercise;

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• The termination of VSNL’s monopoly over international traffic in 2002, and the partial
privatization of the company that same year, with the Tata group assuming a 25% stake
and management control;
• The gradual easing of the original duopoly licensing policy, allowing a greater number
of operators in each circle;
• The legalization, in 2002, of IP telephony (a move that many believe was held up due to
lobbying by VSNL, which feared the consequences on its international monopoly); The
introduction in 2003 of a Calling Party Pays (CPP) system for cell phones, despite
considerable opposition (including litigation) by fixed operators;
• And, more generally, the commencement of more stringent interconnection regulation
by TRAI, which has moved from an inter operator “negotiations-based” approach (often
used by the stronger operator to negotiate ad infinitum) to a more rules-based approach.
All of these events have created an impressive forward-momentum in Indian
telecommunications, resulting in a vigorously competitive and fast-growing sector. India
has also suffered from its fair share of regulatory hiccups. Many operators (mobile
players in particular) still complain about the difficulties of gaining access to the
incumbent’s (BSNL) network, and the government’s insistence on capping FDI in the
telecom sector to 49% (a move made in the name of national security) limits capital
availability and thus network rollout. In addition, ISPs, who were allowed into the market
under a liberal licensing regime in 1998, continue to hemorrhage money, and have been
pleading with the government for various forms of relief, including the provision of
unmetered phone numbers for Internet access. Despite initially impressive results, the
growth of Internet in the country has recently stalled, with only 8 million users.
Broadband penetration, too, remains tiny.

Unified Licensing

But perhaps the biggest – and, until recently, most intractable – regulatory problem has
been the drawn-out battle over “limited mobility” telephony. This imbroglio began in
1999, when MTNL sought permission from TRAI to provide CDMA-based WLL
services with “limited mobility.” GSM cellular operators were soon up in arms, arguing
that “limited mobility” was simply a backdoor entry into their business. Moreover, fixed

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operators had paid lower license and spectrum fees than cellular ones; were not required
to pay access charges for cell-to-fixed calls (unlike their cellular counterparts); and,
amidst accusations of cross-subsidization, were charging
considerably lower rates than the cellular operators. The resulting conflict dragged on in
the courts and in the political arena for years. Fixed operators including new entrants
Reliance and Tata Teleservices claimed that they were being prevented from providing a
cheap service that would drive penetration and be of benefit to the “common man”;
cellular players bitterly opposed what they perceived as unequal regulatory treatment for
two kinds of operators who
were in fact offering the same service. The real victim, of course, was the Indian
telecommunications market, which suffered from investor perceptions of regulatory
confusion and operator in-fighting. In late 2002, for example, thousands of mobile users
in New Delhi were for a time cut off from the fixed-line network when MTNL shut down
interconnection for cellular companies. (MTNL later attributed the incident to a
“technical snag.”)
It was not until late 2003 that the issue was finally resolved, under considerable
government pressure, when cellular operators agreed to withdraw their many cases
against the fixed-line operators. Fixed operators would in effect be allowed to enter the
mobile business; in return, the government granted cellular players several concessions,
including lower revenue-share arrangements estimated to total over $210 million.
Perhaps most notably, the government announced its intention to adopt a “unified access
licensing” regime, which would in the future provide a single, technology-neutral license
for fixed and cellular operators. The hope is that this
new license category will prevent a repeat of the recent controversy, and allow new
technologies to enter the Indian market without requiring a wholesale rewrite of licensing
laws.
MAJOR MARKET TRENDS

The telecoms trends in India will have a great impact on everything from the humble PC,
internet, broadband (both wireless and fixed), and cable, handset features, talking SMS,
IPTV, soft switches, and managed services to the local manufacturing and supply chain.
This report discusses key trends in the Indian telecom industry, their drivers and the

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major impacts of such trends affecting mobile operators, infrastructure and handset
vendors.

Higher acceptance for wireless services

Indian customers are embracing mobile technology in a big way (an average of four
million subscribers added every month for the past six months itself). They prefer
wireless services compared to wire-line services, which is evident from the fact that while
the wireless subscriber base has increased at 75 percent CAGR from 2001 to 2006, the
wire-line subscriber base growth rate is negligible during the same period. In fact, many
customers are returning their wire-line phones to their service providers as mobile
provides a more attractive and competitive solution. The main drivers for this trend are
quick service delivery for mobile connections, affordable pricing plans in the form of pre-
paid cards and increased purchasing power among the 18 to 40 years age group as well as
sizeable middle class – a prime market for this service. Some of the positive impacts of
this trend are as follows. According to a study, 18 percent of mobile users are willing to
change their handsets every year to newer models with more features, which is good
news for the handset vendors. The other impact is that while the operators have only
limited options to generate additional revenues through value-added services from wire-
line services, the mobile operators have numerous options to generate non-voice revenues
from their customers. Some examples of value-added services are ring tones download,
colored ring back tones, talking SMS, mobisodes (a brief video programme episode
designed for mobile phone viewing) etc. Moreover, there exists great opportunity for
content developers to develop applications suitable for mobile users like mobile gaming,
location based services etc. On the negative side, there is an increased threat of virus –
spread through mobile data connections and Bluetooth technology – in mobile phones,
making them unusable at times. This is good news for anti-virus solution providers, who
will gain from this trend.

MERGERS

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Demand for new spectrum as the industry grows and the fact the spectrum allocation in
done on the basis of number of subscribers will force companies to merge so as to claim
large number of subscribers to gain more spectrum as a precursor to the launch of larger
and expanded services. However it must also be noted that this may very well never
happen on account of low telecom penetration.

NEW CIRCLES

As mentioned earlier there is a significant number of tier-2 and tier 3 cities that can
accommodate more players we expect aggressive response by the companies to such
opportunities as and when they are created.

Constraints:

� Slow pace of the reform process .

� It would be difficult to make in-roads into the semi-rural and rural areas because of the
lack of infrastructure. The service providers have to incur a huge initial fixed cost to
make inroads into this market. Achieving break-even under these circumstances may
prove to be difficult.
� The sector requires players with huge financial resources due to the above mentioned
constraint. Upfront entry fees and bank guarantees represent a sizeable share of initial
investments. While the criteria are important, it tends to support the existing big and older
players. Financing these requirements require a little more liberal approach from the
policy side.
� Problem of limited spectrum availability and the issue of interconnection charges
between the private and state operators.

1.1CURRENT SCENARIO

Yes, that’s true. Indian telecommunication Industry is one of the fastest growing telecom
markets in the world. The mobile sector has grown from around 10 million
subscribers in 2002 to reach 350 million by early 2009 registering an average growth

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of over 90%. The two major reasons that have fuelled this growth are low tariffs coupled
with falling handset prices. Surprisingly, CDMA market has increased it market share up
to 30% thanks to Reliance Communication. However, across the globe, CDMA has been
loosing out numbers to popular GSM technology, contrary to the scenario in India. The
other reason that has tremendously helped the telecom Industry is t he regulatory changes
and reforms that have been pushed for last 10 years by successive Indian governments.
According to Telecom Regulatory Authority of India (TRAI) the rate of market
expansion would increase with further regulatory and structural reforms.
Even though the fixed line market share has been dropping consistently, the overall
(fixed and mobile) subscribers have risen to more than 200 million by first quarter
of 2007. The telecom reforms have allowed the foreign telecommunication companies to
enter Indian market which has still got huge potential. International telecom companies
like Vodafone have made entry into Indian market in a big way.
Currently the Indian Telecommunication market is valued at around $100 billion (Rupees
400,000 crore). Two telecom players dominate this market - Bharti Airtel with 27%
market share and Reliance Communication with 20% along with other players like BSNL
(Bharat Sanchar Nigam Limited) and AT&T.
One segment of the market that has been puzzling is broadband Internet. Despite the
manner in which the countries Internet market has been booming, India’s move into high-
speed broadband Internet access has been distinctly slow. And, while there appears to be
considerable enthusiasm amongst the population for the Internet itself, this has not been
reflected in broadband subscription numbers. In 2006 India witnessed a good surge in
broadband users with the total subscriber base in the country expanding by almost
200% to just over 2 million by years end. Despite this surge, broadband penetration in
India still remains around only 0.2%; broadband services still account for only 25% of
the total Internet subscriber base, still in itself comparatively low.

The Ministry of Communications and Information Technology (MCIT) is has very

aggressive plans to increase the pace of growth, targeting 250 million telephone
subscribers by end-2007 and 500 million by 2010. Most of the expansion in subscribers is
set to occur in rural India. India’s rural telephone density has been languishing at around
1.9%;

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so, if 70% of total population is rural, the scope for growth in this Industry is
unprecedented.

GSM and CDMA subscription numbers:

CDMA
GSM Subscribers GSM Annual CDMA Subscribers
Year Annual
(millions) growth (millions)
growth

2000 3.1 94% - -

2001 5.05 76% - -

2002 10.5 91% 0.8 -

2003 22.0 110% 6.4 700%

2004 37.4 70% 10.9 70%

2005 58.5 57% 19.1 75%

2006 105.4 80% 44.2 131%

2007 180.0 71% 85.0 92%

1.3 MARKET-SIZE, PLAYERS AND TRENDS

Today, India has the eighth largest telecom network in the world, which is growing
at an overall rate of over 20 per cent. As of May 2004, India had about 43 million
fixed lines and 36 million wireless subscribers contributing to the total tele-density
of about 7 %.

According to Morgan Stanley, the total revenue from the Indian telecom market in
financial year 2003 was estimated to be about US$ 9.2 billion. Presently, wireline
service contribute about half of the total service revenues. Over the next 5-8 years,
however, their contribution is expected to fall to about 30 per cent and wireless
services are expected to contribute half the industry revenue. Data revenue is
expected to increase from 2 per cent to 8 per cent of total revenues.

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1.4 TELECOM INDUSTRY SCENARIO IN REST OF THE WORLD

Two major factors responsible for the growth of telecommunications industry are use of
modern technology and market competition. One of the products of modern technologies
is optical fibers, which are being used as a medium of data transmission instead of using
coaxial or twisted pair cables. Optical fibers can carry a high volume of data and are
easier to maintain and install. Use of communication satellites makes this
telecommunications industry a booming industry.

The use of mobile network has a crucial role behind the growth of an improved
telecommunications industry. Leading companies are showing their interest to invest in
this telecommunications industry. Telecommunications industry is going to be a
digitized one. Use of ISDN (Inter Services Digital Network) makes this
telecommunication industry a total digitalized system and eventually enhanced the speed
and quality of digital communication.

The introduction of these advanced technologies makes the telecommunications industry

a competitive one, where a number of multinational companies have shown their interest
to invest in this industry and consequently the prices are reduced, the quality is also
improved. During the period of 1990, the telecommunication industry showed a speedy
growth in terms of investment and eventually increased the competition. The competition
between the companies led to the decline of revenues.

World telecom industry is an uprising industry, proceeding towards a goal of achieving

two third of the world's telecom connections. Over the past few years information and
communications technology has changed in a dramatic manner and as a result of that

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world telecom industry is going to be a booming industry. Substantial economic growth
and mounting population enable the rapid growth of this industry.

Research works associated with world telecommunication industry:

A number of research works are being carried out all over the world to improve the
quality and speed of transmission. Research works are also done on the basis of the users'
needs. The objective of the research work is to provide quality and affordable service to
the consumers.

Market potentiality of world telecommunication industry:

The world telecommunications market is expected to rise at an 11 percent compound

annual growth rate at the end of year 2010. The leading telecom companies like AT&T,
Vodafone, Verizon, SBC Communications, Bell South, and Qwest Communications are
trying to take the advantage of this growth. These companies are working on
telecommunication fields like broadband technologies, EDGE(Enhanced Data rates for
Global Evolution) technologies, LAN-WAN inter networking, optical networking, voice
over Internet protocol, wireless data service etc.

Economical aspect of telecommunication industry:

World telecom industry is taking a crucial part of world economy. The total revenue
earned from this industry is 3 percent of the gross world products and is aiming at
attaining more revenues. One statistical report reveals that approximately 16.9% of the
world population has access to the Internet.

Present market scenario of world telecom industry:

Over the last couple of years, world telecommunication industry has been consolidating
by allowing private organizations the opportunities to run their businesses with this
industry. The Government monopolies are now being privatized and consequently

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competition is developing. Among all, the domestic and small business markets are the
hardest.

Statistical report

Phoenix Center research revealed that in the coming years, there will be a healthy
competition among the providers of telecommunication services. At the same time, the
price will be lower and quality will be higher. The new telecommunications technologies
will replace the traditional telecom services. Statistical data also reveals that the
telecommunications industry is going to be a dynamic and booming industry in the near
future. The telecom industry comprises of complex network of services like telephones,
mobile phones and internet services.

Telecom industry trends

Throughout the world, telecom industries are being controlled by private companies
instead of government monopolies. Traditional telecom technologies are also being
replaced by modern wireless technologies, specifically in case of mobile services. One of
the major objectives of telecom industry is to enhance the quality and speed of Internet
technology.

These days, telecom industry is more concerned with texts and images (Internet
technologies), rather than voice (telephone service). Most of the research works are going
on Internet accessibility, specifically on data applications and broadband services. The
other major division of telecom industry is mobile network sector, where lots of
innovative research works are going on. Previously the traditional telephone calls used to
earn the maximum revenues, but these days mobile service is going to replace traditional
telephone services.

Telecom industry analysis from the expert’s point of view

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Telecom industry is a vast and diversified industry and needs a huge capital to invest.
That is why the competitors of this industry should be such that they can meet that
demand. From the investor's point of view, it can be said that they should be well aware
of cash flow in this industry.

1.5 COMPANY PROFILE

About Bharti Airtel

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, India’s 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 (SBU’s) - Mobile Services, Airtel Telemedia Services & Enterprise Services. The
mobile business provides mobile & fixed wireless services using GSM technology across
23 telecom circles while the Airtel Telemedia Services 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 Group

• Turnover : Rs 6000 Crore

• Employees : 8000 +

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• Market Capitalization Rs. 673 billion Approx.

• Mobility Voice & Data Services across all India footprint covering all 23
telecom circles of the country.

• National Long Distance : Fiber Optic Backbone across India.

• Fixed-line Telephony across 5 states in Phase I

• International Bandwidth Connectivity

– 7 Ku Band Satellite Earth Stations

– I2i Undersea Fiber from Singapore to Chennai

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

services based on an aggregate of 64,268,047 customers as on March 31, 2008, consisting
of 61,984,721 GSM mobile and 2,283,326 Bharti Telemedia subscribers.

The businesses at Bharti Airtel have been structured into three individual strategic
business units (SBU’s) - mobile services, telemedia services (ATS) & enterprise services.
The mobile services group provides GSM mobile services across India in 23 telecom
circles, while the ATS business group provides broadband & telephone services in 94
cities. The enterprise services group has two sub-units - carriers (long distance services)
and services to corporates. All these services are provided under the Airtel brand.

Company shares are listed on The Stock Exchange, Mumbai (BSE) and The National
Stock Exchange of India Limited (NSE).

Partners

The company has a strategic alliance with SingTel. The investment made by SingTel is
one of the largest investments made in the world outside Singapore, in the company.

The company’s mobile network equipment partners include Ericsson and Nokia. In the
case of the broadband and telephone services and enterprise services (carriers),
equipment suppliers include Siemens, Nortel, Corning, among others. The Company also

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has an information technology alliance with IBM for its group-wide information
technology requirements and with

Nortel for call center technology requirements. The call center operations for the mobile
services have been outsourced to IBM Daksh, Hinduja TMT, Teletech & Mphasis.

Company Background

Bharti Airtel Limited, a part of Bharti Enterprises, is India’s leading provider of

telecommunications services. The businesses at Bharti Airtel have been structured into
three individual strategic business units (SBU’s) – mobile services, broadband &
telephone services (B&T) & enterprise services. The mobile services group provides
GSM mobile services across India in 23 telecom circles, while the B&T business group
provides broadband & telephone services in 94 cities. The Enterprise services group has
two sub-units – carriers (long distance services) and services to corporate. All these
services are provided under the Airtel brand.

Sunil Bharti Mittal or SBM as he is called has at the age of 43 created a

Telecom Giant in India. It has risen from humble beginnings in 1970’s as bicycle parts
manufacturer, knitwear and stainless steel utensils in Ludhiana, Punjab state. Together
with other foreign companies he has raised $ 1.5 billion of which $ 800 million is still in
the bank.

Bharti happens to be India’s premier telecom company in the field of telecom

terminals and technology tie ups with world leaders like “ Siemens, Goldstar,
Tatacom and Casio. It is the first company in India to export telephones to U.S.A
and has finalized plans to manufacture GSM terminals in India.

Bharti Enterprises controls about 20% of the Total Telecom market in India. As he puts
it, it was a mixture of vision, good luck and hard work by a team of about 10 – 12 senior
people. The early beginnings in 1985 were in manufacturing telephone handsets. They
did not have the expertise to do telephone exchanges, jelly- filled cables had become a
commodity and their capital investment was high.

Bharti Tele-Ventures Limited was incorporated on July 7, 1995 for promoting

investments in telecommunications services. Its subsidiaries operate telecom services

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across India. Bharti Tele-Ventures is India’s leading private sector provider of
telecommunications services based on a strong customer base consisting of
approximately 11.50 million total customers which constitute, approximately 10.66
million mobile and approximately 836,000 fixed line customers, as of January 31, 2005.

Milestones

Telecom Services

• Largest Private Telecom Service Provider in India- more than 150,00,000

subscribers.

• AIRTEL – Biggest footprint in India covering 23 states and largest GSM network
with over 140,00,000 users in India.

• First & Largest Pvt. Company to launch Fixed line Service in 15 states in India
starting Madhya Pradesh – Over 20,00,000 subs.

• First & only Indian company to operate Telecom Services outside India –
Seychelles.

• First Private company to have Fiber Gateway for Data & Voice at Chennai & 7
Ku Band Gateway for Internet bandwidth.

Airtel is the largest cellular service provider in India in terms of number of subscribers.
Bharti Airtel owns the Airtel brand and provides the following services under the brand
name Airtel: Mobile Services (using GSM Technology), Broadband & Telephone
Services (Fixed line, Internet Connectivity(DSL) and Leased Line), Long Distance
Services and Enterprise Services (Telecommunications Consulting for corporate). It has
presence in all 23 circles of the country and has the covers 71% of the current population
till FY07.

Leading international telecommunication companies such as Vodafone and SingTel held

partial stakes in Bharti Airtel.

In April 2006 Bharti Global Limited was awarded a telecommunications license in Jersey
in the Channel Islands by the local telecommunications regulator the JCRA. In

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September 2006 the Office of Utility Regulation in Guernsey awarded Guernsey Airtel
with a mobile telecommunications license. In May 2007 Jersey Airtel and Guernsey
Airtel announced the launch of a relationship with Vodafone for island mobile
subscribers. In July 2007, Bharti Airtel signed a MoU with Nokia-Siemens for a 900
million dollar expansion of its mobile and fixed network. In August 2007, the company
announced it will be launching a customized version of Google search engine that will
provide an 'array of services' to its broadband customers.

In March 2008, Bharti Airtel will roll out third generation services in Sri Lanka in
association with SingTel. This is because Singapore-based Asian telecom major SingTel,
which owns a little over 30% in Bharti Airtel, is a major player in the 3G space as it has
already third generation networks in several markets across Asia.

Touchtel

Until September 18, 2004, Bharti provided fixed-line telephony and broadband services
under the Touchtel brand. Bharti now provides all telecom services including fixed-line
services under a common brand "Airtel"

Apple's iPhone 3G

Apple has announced launch of its new iPhone in US and other 25 countries on July 11th
2008, it is soon to be launched in India as well with Bharti.

BlackBerry

On 19th October 2004 Airtel announced the launch of a BlackBerry Wireless Solution in
India. The launch is a result of a tie-up between Bharti Tele-Ventures Limited and
Research In Motion (RIM).

In the news

On February 12, 2007 Vodafone sold its 5.6% stake in AirTel back to AirTel for US $1.6
billion; and purchased a controlling stake in rival Hutchison Essar.

In its monthly press release, following statistics have been presented for end of April
2007.

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Bharti Airtel added the highest ever net addition of 5.3 million customers in a single
quarter (Q4-FY0607) and also the highest ever net addition of 18 million total subscribers
in 2006-07

The company will invest up to $3.5 billion this fiscal (07-08) in network expansion. It has
an installed base of 40,000 cellsites and 59% population coverage After the proposed
network expansion, an additional 30,000 towers will result in the company achieving
70% population coverage Bharti has over 39 million users as on March 31, 2007 It has
set a target of 125 million subscribers by 2010 Prepaid customers account for 88.5% of
Bharti’s total subscriber base, an increase from 82.7% a year ago .ARPU has dropped to
Rs 406 Non-voice revenues, (SMS, voice mail, call management, hello tunes and Airtel
Live) constituted 10% of total revenues during Q4, lower than 10.7% in the Q4 of the
previous year Blended monthly minutes of usage per customer in Q4 was at 475 minutes.
The company Has completed 100% verification of its subscribers and in the process
disconnected three lakh subscribers

Bharti Airtel’s enterprise Services, President - David is busy connecting India to Europe.
David announced the building of 15,000 km 3.84 Terabit OFC sub-marine cable system
connecting Europe [London] to India via the Middle East. The project is known as
Europe India gateway [EIG] and is expected to cost $700 million, which is to be
completed by Q2-2010. Alcatel Lucent and Tyco are the telecom vendors for the project.

Members in the EIG consortium include - AT&T, BT, C&W, Djibouti Telecom, Du,
Gibtelecom, IAM, Libyan Telecom, MTN Group Ltd., Omantel, PT Comunicacoes-S.A,
Saudi Telecom Company, Telecom Egypt, Telkom SA Ltd, and Verizon Business.

In May 2008, it emerged that Bharti Airtel was exploring the possibility of buying the
MTN Group, a South Africa-based telecommunications company with coverage in 21
countries in Africa and the Middle East. The Financial Times reported that Bharti was
considering offering US$45 billion for a 100% stake in MTN, which would be the largest
overseas acquisition ever by an Indian firm. However, both sides emphasize the tentative
nature of the talks, while The Economist magazine noted, "If anything, Bharti would be
marrying up," as MTN has more subscribers, higher revenues, more subscribers and

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broader geographic coverage. However, the talks fell apart as MTN group tried to reverse
the negotiations by making Bharti almost a subsidiary of the new company.

Airtel’s Network

Transport System

• Optical Fiber Cable (OFC) used for network for higher Performance & Reliability

• Synchronous Digital Hierarchy (SDH)(Nortel) for transport over the OFC

Network

• Ring Topology for Full redundancy

• State of the art Network Management System(Nortel) for SDH equipment

Vision & Promise

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

• Loved by more customers

• Targeted by top talent

• Benchmarked by more businesses

We at Airtel always think in fresh and innovative ways about the needs of our
customers and how we want them to feel. We deliver what we promise and go out of our

way to delight the customer with a little bit more

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VARIOUS SERVICES PROVIDED BY AIRTEL

For individuals:

Various Services Provided by Airtel are :

• MOBILE

Experience total cost control, no rentals and easy billing with our postpaid and prepaid
services. Explore the world with our roaming services and get absolutely cool offers with
airtel live.

• HOME PHONES

Airtel welcomes you to the world of telephony services for your home experience a
world-class service and cutting edge technology with Airtel landline and our feature rich

Wireless fixed line. What’s more, calling is made more fun & convenient with services
and entertainment on Airtel.

• BROADBAND INTERNET

Airtel Broadband Services, India’s most preferred high-speed Internet service, redefines
your Internet experience. It is fast, fun, convenient and cost effective.

• BLACKBERRY

Blackberry from Airtel is and always connected wireless solution providing easy and
secure access to your email and data.

• EMAIL ON THE GO

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Want to access information on your mobile? Airtel brings you Email on the go. You can
choose from Blackberry and Windows Mobile 5.0 depending upon the usage patterns,
requirement and suitability.

• CALLING CARDS

Our calling card services connect you to the world from India and allow a better way to
call back India.

• WIRELESS INTERNET

With Airtel’s Wireless Internet, you have the freedom to access the Internet anytime,
anywhere across India. It enables Internet, Email, and Office applications with real-time
secure VPN access to corporate applications whilst on the move.

FOR CORPORATES

• MOBILE

We offer you mobile solutions targeted for your business needs. We create price plans
that work for your business along with a range of features.

• VOICE

Our voice services give you the right tools, to suit the needs of small, medium and large
enterprises and to stay ahead.

PRI for COMPANY NAME/Group

1) PRI (PRIMARY RATE INTERFACE)

2) 30 Channels of 64 kbps on 2 pair of wires.

• OFFICE SOLUTION

Manage your business more efficiently and effectively, with Airtel’s Office Solutions,
Easy Mail and Data Card.

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• DATA & INTERNET

We bring you a comprehensive suite of data technologies for all your strategic
connectivity needs.

1) Analog Phone Line

2) ISDN BRI

3) ISDN PRI DID/DOD Service

4) Host of Value Add Services

5) Voice Mail Service

6) CENTREX Facility

• E-BUSINESS SERVICES

We offer you a range of services that help to keep your business running 24x7.

• SATELLITE SERVICES

We provide you connectivity, where ever you take your business. Our Satellite Services
bring you the benefits of access in remote locations.

• CARRIER SERVICES

India’s first private long distance communications service provider with world-class
Voice and Data communication services.

• INTERNATIONAL SERVICES

Get the communication solutions, your business needs, to stay connected worldwide with
our International Services.

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Organizational Structure Of Bharti Enterprise

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Organizational Structure Of Bharti Airtel Enterprise

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2. RESEARCH METHODOLOGY

2.1 – TITLE: - “Identification and analysis of SMBEs customers with AIRTEL”

2.2 –OBJECTIVE: - To find out the hidden business potential in SMBEs.

2.3 –GAP: -

• To know about the potential hidden business opportunities

• The know hidden business strength of the key accounts.

• Customer reactions about this exercise.

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3.1 – Primary Data collection

In primary data collection, you collect the data yourself using methods such as interviews
and questionnaires. The key point here is that the data you collect is unique to you and
your research and, until you publish, no one else has access to it.

Advantages:-

• Can be used as a method in its own right or as a basis for interviewing or a

telephone survey.

• Can be posted, e-mailed or faxed.

• Can cover a large number of people or organizations.

• Wide geographic coverage.

• Relatively cheap.

• No prior arrangements are needed.

• Avoids embarrassment on the part of the respondent.

• Respondent can consider responses.

• Possible anonymity of respondent.

• No interviewer bias.

Disadvantages:-

• Design problems.

• Questions have to be relatively simple.

• Historically low response rate (although inducements may help).

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• Time delay whilst waiting for responses to be returned.

• Require a return deadline.

• Several reminders may be required.

• Assumes no literacy problems.

• No control over who completes it.

• Not possible to give assistance if required.

• Problems with incomplete questionnaires.

• Replies not spontaneous and independent of each other.

• Respondent can read all questions beforehand and then decide whether to
complete or not. For example, perhaps because it is too long, too complex,
uninteresting, or too personal

Methods of collecting primary data used

• Questionnaire: - In this we have taken a sample size 150 respondents. Our main
objective is to know the potential business points from where business can be
derived for Airtel.

• Face to face- This method involves direct interaction or personal interaction with
the focused group to get more and relevant information on the topic which I had
taken.

3.1 – Secondary Data collection

All methods of data collection can supply quantitative data (numbers, statistics or
financial) or qualitative data (usually words or text). Quantitative data may often be
presented in tabular or graphical form. Secondary data is data that has already been
collected by someone else for a different purpose to yours. For example, this could mean
using:

• data collected by a hotel on its customers through its guest history system

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• data supplied by a marketing organization

• annual company reports

• Government statistics.

Secondary data can be used in different ways:

• You can simply report the data in its original format. If so, then it is most likely
that the place for this data will be in your main introduction or literature review as
support or evidence for your argument.

• You can do something with the data. If you use it (analyze it or re-interpret it) for
a different purpose to the original then the most likely place would be in the
‘Analysis of findings’ section of your dissertation. A good example of this usage
was the work on suicide carried out by Durkheim. He took the official suicide
statistics of different countries (recorded by coroners or their equivalent) and
analyzed them to see if he could identify variables that would mean that some
people are more likely to commit suicide than others. He found, for example, that
Catholics were less likely to commit suicide than Protestants. In this way, he took
data that had been collected for quite a different purpose and used it in his own
study – but he had to do a lot of comparisons and statistical correlations himself in
order to analyse the data. (Most research requires the collection of primary data
(data that you collect at first hand), and this is what students concentrate on.
Unfortunately, many dissertations do not include secondary data in their findings
section although it is perfectly acceptable to do so, providing you have analyzed
it. It is always a good idea to use data collected by someone else if it exists – it
may be on a much larger scale than you could hope to collect and could contribute
to your findings considerably.

As secondary data has been collected for a different purpose to yours, you should treat it
with care. The basic questions you should ask are:

• Where has the data come from?

• Does it cover the correct geographical location?

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• Is it current (not too out of date)?

• If you are going to combine with other data are the data the same (for example,
units, time, etc.)?

• If you are going to compare with other data are you comparing like with like?

Thus you should make a detailed examination of the following:

• Title (for example, the time period that the data refers to and the geographical
coverage).

• Units of the data.

• Source (some secondary data is already secondary data).

• Column and row headings, if presented in tabular form.

• Definitions and abbreviations, for example, what does SIC stand for? For
example, how is ‘small’ defined in the phrase ‘small hotel’? Is ‘small’ based on
the number of rooms, value of sales, number of employees, profit, turnover,
square metres of space, etc., and do different sources use the word ‘small’ in
different ways? Even if the same unit of measurement is used, there still could be
problems. For example, in Norway, firms with 200-499 employees are defined as
‘medium’, whereas in the USA firms with less than 500 employees are defined as
‘small’.

There are many sources of data and most people tend to underestimate the number of
sources and the amount of data within each of these sources.

Sources can be classified as:

• paper-based sources – books, journals, periodicals, abstracts, indexes,

directories, research reports, conference papers, market reports, annual reports,
internal records of organizations, newspapers and magazines

• Electronic sources– CD-ROMs, on-line databases, Internet, videos and

broadcasts.

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The main sources of qualitative and quantitative secondary data include the follwing:

• Official or government sources.

The arrangement is alphabetical by organization with details of titles produced and

contacts for further information. It lists references to the following types of sources:

• trade associations

• trade and other journals

• private research publishers-

• stock-broking firms

• large company market reports

• local authorities

• professional bodies

• Academic institutions.

• European Union (Community) sources.

• International sources.

• Organization for Economic Co-operation and Development (OECD)

• United Nations and related organizations.

Sources for the last two categories are many and varied. If your dissertation requires
these sources you need to conduct a more thorough search of your library and perhaps
seek the assistance of the librarian.

Methods I have used

• Internet Portals: - The relevant data related to euro norms and consumer reactions
to various euro norms was searched from internet portals. These portals act as a
intermediate between the user and the required information as it an intermediate
and used as a communication tool like Internet sites.

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• Magazines:- we had collected data from various magazines, journals and also
referred to various newspapers for getting more information on euro norms.

3.3 - SAMPLE SIZE AND AREA

• Size – 150

• Area – Delhi and NCR; specially the following:-

• Hauz-Khas
• Green Park
• Lado Sarai
• Vasant Kunj
• Vasant Vihar
• Chanakyapuri
• Nehru Place

3.4- SAMPLING TECHNIQUES

Sampling is that part of statistical practice concerned with the selection of individual
observations intended to yield some knowledge about a population of concern, especially
for the purposes of statistical inference. Each observation measures one or more
properties (weight, location, etc.) of an observable entity enumerated to distinguish
objects or individuals. Results from probability theory and statistical theory are employed
to guide practice.

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• Nominal: -Nominal scale is a simple system of assigning number symbols to

events in order to label them. The usual example of this is assignment of numbers
of basketball players in order to identify them. Such numbers cannot be
considered associated with an ordered scale of their order is of no consequence;
the numbers are just convenient labels for the particular class of events and as
such have no quantitative value. Neither can one usefully compare the numbers
assigned to one group with the numbers assigned to another.

• Interval: - In case of intervals scale, the interval are adjusted in terms of some rule
that has been established as a basis of making equal units. The units are equal
only if one accepts the assumptions on which the rule is based. Interval scales can
have an arbitrary zero, but it is not possible to determine for them what may be

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called an arbitrary zero or the unique origin. One can say that there is same
increase in temperature from 30-40 degrees as in case of 60-70 degrees.

• Paired Comparison: - this involve divided the questions on the basis of consumer
approval techniques like Yes and No questions

• Summated Technique:- This is also known as “likert-type scales” which are

developed by utilizing the item analysis approach wherein a particular item is
evaluated on the basis of how well it discriminates between those persons whose
total score is high and whose total score is low. Thus summated scales consists of
a number of statements which express either a favorable or an unfavorable
attitude towards the given object to which the respondent is asked to react.

With simple random sampling, each item in a population has an equal chance of inclusion
in the sample. For example, each name in a telephone book could be numbered
sequentially. If the sample size was to include 2,000 people, then 2,000 numbers could be
randomly generated by computer or numbers could be picked out of a hat. These numbers
could then be matched to names in the telephone book, thereby providing a list of 2,000
people.

Methods I have chosen

• Random:- In random sampling, all items have some chance of selection that
can be calculated. Random sampling technique ensures that bias is not
introduced regarding whom is included in the survey. Five common random
sampling techniques are:

SIMPLE RANDOM SAMPLING

With simple random sampling, each item in a population has an equal chance of inclusion in

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the sample. For example, each name in a telephone book could be numbered sequentially. If
the sample size was to include 2,000 people, then 2,000 numbers could be randomly
generated by computer or numbers could be picked out of a hat. These numbers could then be
matched to names in the telephone book, thereby providing a list of 2,000 people.

• A Tattslotto draw is a good example of simple random sampling. A sample of 6

numbers is randomly generated from a population of 45, with each number having an
equal chance of being selected.
The advantage of simple random sampling is that it is simple and easy to apply when small
populations are involved. However, because every person or item in a population has to be
listed before the corresponding random numbers can be read, this method is very
cumbersome to use for large populations.

The advantage of simple random sampling is that it is simple and easy to apply when small
populations are involved. However, because every person or item in a population has to be
listed before the corresponding random numbers can be read, this method is very
cumbersome to use for large populations.

The sampling process consists of seven simple stages:

• Defining the population of concern

• Specifying a sampling frame, a set of items or events

possible to measure

• Specifying a sampling method for selecting items or

events from the frame

• Determining the sample size

• Implementing the sampling plan

• Sampling and data collecting

• Reviewing the sampling process

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SYSTEMATIC SAMPLING

Systematic sampling, sometimes called interval sampling, means that there is a gap, or
interval, between each selection. This method is often used in industry, where an item is
selected for testing from a production line (say, every fifteen minutes) to ensure that
machines and equipment are working to specification.

Alternatively, the manufacturer might decide to select every 20th item on a production line to
test for defects and quality. This technique requires the first item to be selected at random as a
starting point for testing and, thereafter, every 20th item is chosen.

This technique could also be used when questioning people in a sample survey. A market
researcher might select every 10th person who enters a particular store, after selecting a
• Convenient: - In this we carry out our survey based on nearness and approachability of
the respondent based o our convenience. Here the area or the group of respondents
which are really easy to approach and interaction is possible within a less span of time
are selected for carrying out the survey and data collection.

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4. ANALYSIS

TABLE I.

The following table shows the percentage of different phone operators used by the
SMBeS [%age out of total 150 accounts surveyed]

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TABLE SHOWING SMBeS HAVING FIXED LINE CONNECTIONS OF DIFFERENT

OPERATORS.

Operators

Values AIRTEL MTNL / BSNL RCOM TATA INDICOM

PERCENTAGE
VALUES 27 % 45% 17% 11%

Out of the total 150 customers surveyed, the table above shows the percentage of
SMBeS using fixed line connections [telephone lines] of different companies. Despite of
the fact that Airtel gives the best service both in terms of quality and customer service, it
the state owned public sector company leads the pack in this segment. It has the first
mover advantage with it. Moreover , most of the public sector companies gave undue
preference to MTNL / BSNL, for whatsoever reasons. Here, MTNL/BSNL leads with
45 % share, whereas AIRTEL has 27% share. RCOM and INDICOM has 17% and 11%
shares respectively.

CHART I.

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The above chart shows graphically which of the operators have largest share in fixed line
telephony market. State owned companies MTNL / BSNL lead with 45% share while
Airtel has 27% share in fixed telephony market. Other new players like Tata Indicom and
reliance Infocomm has 11% and 17% shares respectively. The market share of RCOM
and TATA INDICOM are improving slowly.

TABLE II.

TABLE SHOWING %AGE OF DIFFERENT OPERATORS FOR COMPANY PAID

Operators
Airtel Vodafone Rcom Idea Others
%Values

56.2 11.1 19.7 8.8 4.2

MOBILE IN CORPORATES

The above table shows the percentage of different telecom operators used by the
corporate for company paid mobile connections under different CUG plans.

Out of total 150 corporates surveyed, Airtel showed up as the favorite brand as far as
company paid mobile connections are concerned just because of the excellent services it
provided. Although , Airtel did not provide the cheapest services, still it is market leader

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in this segment. Here, Airtel leads with 56.2% market share, followed by Rcom with
19.7% share, Vodafone with 11.1 % , and Idea with 8.8 % share.

GRAPH II.

GRAPH SHOWING %AGE OF COMPANY PAID MOBILE CONNECTIONS OF

VARIOUS CORPORATES.

This Bar-graph shows that in present scenario Airtel has the largest market share in the
company paid mobile sector. Airtel should continue providing better services and
schemes to maintain this position in company paid mobile connections segment.

TABLE III.

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TABLE SHOWING %AGE OF DIFFERENT OPERATORS FOR BROADBAND

CONNECTIONS IN CORPORATES

Operators

%Values AIRTEL MTNL SPECTRANET HATHWAY

30.6 22.6 12.3 34.5

The following table shows the percentage of different telecom operators used by
corporate in Broadband segment.

The table above shows the percentage of different telecom operators used by the
corporates in broadband segment. Here, Hathway leads the pack with 34.5 % market
share, followed by Airtel with 30.6 % share, followed by Mtnl with 22.6% share and
finally Spectranet with 12.3% market share.

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GRAPH III.

GRAPH SHOWING %AGE OF DIFFERENT TELECOM OPERATORS USED BY

THE CORPORATES IN BROADBAND SEGMENT.

The graph above shows the percentage of different telecom operators in broadband
segment. Here, Hathway leads the pack with 34.5 % share, followed by Airtel with
30.6 % share, followed by Mtnl with 22.6% share and finally Spectranet with 12.3%
market share.

CHART IV.

PIE-CHART SHOWING THE PERCENTAGE OF SATISFIED CUSTOMERS WITH

AIRTEL.

The above pie-chart shows that most of the existing customers with Airtel are satisfied
with the kind of services the company has been providing to them. About 88% of the

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customers are already satisfied with Airtel’s services, 10 % customers are not-satisfied
and 2% customers say that they can’t comment about it.

 BENEFITS OF AIRTEL INTERNET SERVICE

• High Speed Access

Get the advantage of the quickest and easiest access to the Internet. On the state of
the art Airtel network you can transfer data up to 155 Mbps.
• Service Level Guarantee
We guarantee service availability and network latency, or extend your service for
free as per Service Level Guarantee.
• Scalability
Free yourself from the constraints of limited bandwidth by choosing from our
wide range of access speeds (64 Kbps to 155 Mbps) to cater to your needs.
• 24*7 Network Monitoring and Technical Support
Our 24*7 network monitoring ensures your network runs smoothly. A 24*7
technical support team is dedicated to you round the clock to resolve any
technical problems you may encounter and ensures that service is delivered as per
Airtel Service Level Guarantee.
• Integrated Solution Approach
Our Enterprise Services is an end-to-end communications solutions provider,
giving customer centric integrated service. We have the expertise and the
experience in the field of providing flawless Internet connectivity.
• Network
We have a completely managed IP network that builds a converged platform to
run all enterprise solutions. The entire backbone is built on trusted names like
Cisco and Juniper to provide data capacity in terabytes and high routing/switching
speed. Muti tier network architecture is designed to avoid single point of failure

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and offer highest network availability. Scalability in no time is the highlighting
point of our network.
All the Internet core routers in the ISP backbone are connected in a
Star topology and are using OSPF routing protocol. To communicate with
external world, the EBGP-4 protocol is used at the international gateway egress
routers.

RECOMMENDATIONS AND SUGGESTIONS :

• Develop plans targeting the specific user groups like youth, students and wemen.
• Develop ultra economy plans for poor people; to whom maintaining a connection
is still a luxury.
• Educate customer on the benefits of Value-added services.
• Company should make more promotional campaign in commercial areas.
• Strategic Partnerships with leading Global Telecom Service Providers &
Investors.
• Know areas of strength and areas of improvement.
• Design Individual Development Plans so as to convert areas of improvement to
areas of strength.
• Identify the competencies required at different levels.
• Identification and development of employees for future roles and responsibilities.
• Customer care services provided to the active customers should be more efficient
towards the problem solution.

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BIBLIOGRAPHY

BOOKS:

• Philip Kotler – Marketing Management

• Naresh K. Malhotra – Marketing Research

INTERNET SITES:

• www.airtel.in

• www.bhartiairtel.in

• www.google.com

• www.economicstimes/archive.com

• www.marketresearch.com/product/display.asp

• www.economywatch.com/budget/india-budget-2007/sector-analysis.html -
26k -

• hikrish.blogspot.com/2006/10/indias-telecom-sector-growing.html - 82k –

• www.oppapers.com/topics/forces-analysis-telecom-sector

• www.ieo.org/tel_pol.html - 13k

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• www.prlog.org/10075065-rncos-releases-new-report-indian-telecom-analysis-
2008-2012.html

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