Telecommunication Industry

MICRO ANALYSIS OF INDIAN TELRCOMMUNICATION INDUSTRY
Management Research Project -I

Submitted
In the partial fulfillment of the Degree of
Master of Business Administration
Semester-III
By
(BHARGAV VYAS 13044311145)
(MAUNISH MODI 13044311039)
(POOJA BAROT 13044311006)
(DHAVAL CHAUHAN 13044311016)
(AJAY PARMAR 13044311048)
(LAXMI NALLABARIKI 13044311040)
Unde r the Guidance of:

Prof. (Dr.) Mahendra Sharma
Prof. & Head,
V. M. Patel Institute of Management.
&
Dr. Harsha Jariwala
Dr. Abhis hek Parikh
Faculty Members
V. M. Patel Institute of Management.
Submitted To:
V. M. Patel Institute of Management,
Ganpat University,
Khe rva.
CERTIFICATE BY THE GUIDE
This is to certify that the contents of this report entitled MICRO ANALYSIS OF INDIAN
TELECOMMUNICATION INDUSTRY by (BHARGAV VYAS 13044311145), (MAUNISH MODI
13044311039),
(POOJA
BAROT
13044311006),(DHAVAL
BAROT
13044311016),(AJAY
PARMAR 13044311048),(LAXMI NALLABARIKI 13044311040) submitted to V. M. Patel Institute

of Management for the Award of Master of Business Administration (MBA Semester -III) is original
research work carried out by him/her/them under my supervision.
This report has not been submitted either partly or fully to any other University or Institute for award
of any degree or diploma.
Prof. (Dr.) Mahendra Sharma,

Professor & Head,
V. M. Patel Institute Of Management,
Ganpat University.
Kherva.
Date :
Place :
CANDIDATES STATEMENT
I/We hereby declare that the work incorporated in this report entitled MICRO ANALYSIS OF
INDIAN TELECOMMUNICATION INDUSTRY in partial fulfillment of the requirements for the
award of Master of Business Administration (Semester - III) is the outcome of original study
undertaken by me/us and it has not been submitted earlier to any other University or Institution for the
award of any Degree or Diploma.

(POOJA BAROT
13044311006)

(AJAY PARMAR
13044311048)
Date :
Place :
ii
Preface
This marketing research project report highlights the market potential of the telecommunication
industry in India. Which include Airtel, Idea, Reliance GSM telecommunication, Vodafone, BSNL.
Theoretical Knowledge of Marketing Research is being applied practically to carry out this study to
understand the market potential for telecommunication industry.
As a partial fulfillment of the Course M.B.A.(Master of Business Administration). The candidate is
required to undertake a project that would help would help him to enhance his knowledge.
It is with great sincerity and enthusiasm that we take up the challenge that this field has placed before
us and to hope to succeed with guidance from our professors.

(POOJA BAROT
13044311006)

(AJAY PARMAR
13044311048)
Date :
Place :
iii
Acknowledgement
We are the student of V.M.Patel institute of Management, Kherva we express our sincere gratitude
towards all those people who have helped us in the preparation of this project, which has been a
learning experience.
We would like express our special gratitude to our respected (Dr.) Mahendra Sharma, Prof & Head
of V.M.Patel Institute of management who has given us the opportunity to do this project of
management Research Project-I. And also given us the guideline to complete our research report on
Indian Telecommunication Industry
We would like express our special gratitude to our respected Ms Harsha Jariwala Faculty of
V.M.Patel Institute of management Member all concern persons who have provided us help through
her information, guidance and all kinds of support, which was required for preparation of this report.
Without her help it would have been difficult for us to complete our Management Project- I.
Working on the project is hard, need hard work and concentration. What made it possible is the
support we received from those around us. We thank everybody who has directly or indirectly helpful
in project report.
As always, we value your recommendation and thoughts about the report. Your comments regarding
coverage and contents will be most welcome, as will you calling my attention to specific errors,
deficiencies and oversights.

(POOJA BAROT
13044311006)

(AJAY PARMAR
13044311048)
Place: Kherva
Date:
iv
Executive Summary
The Telecommunication Industry is considered as having potential for investment in India. India has
witnessed rapid growth in Telecommunication services. This expected to soar in the next few years.
Since the Indian sky was open for the private sector in 1990, the industry has gone from initial
euphoria, to subsequent despair, and the hope in the wake of the move of the revenue sharing.
As in well known, worldwide the growth in telecommucation bears a close relationship to GDP
growth. The Indian market is still in the developing stage and the country can expect to witness a
robust rate of growth as Indias economy expands and continue to grow at a high rate over a next few
years.
The major players in Indian Telecommunication Industry are Airtel, Vodafone, Idea, Reliance
communication and BSNL
The project highlights the important issues that have been in the lime light since the very long time,
mainly those of history and Indian scenario, industry structure major Telecommunication players, a
market share of different companies, important regulatory bodies, analysis (PEST Analysis, OT
Analysis, Five Force model and 7 ps), future challenges of telecommunication industry etc.
Abbreviation
DOT
:-
Department of Telecommunication
TRAI
:-
Telecom Regulatory Authority of India
GSM
:-
Global System for Mobile Communication
CDMA
:-
Code Division Multiple Access
NTP
:-
National Telecom Policy
NLD
:-
National Long Distance
NTP -99 :-
New Telecom Policy 1999
ILD
:-
International Long Distance
VAS
:-
Value Added Services
DIPP
:-
Department of Industrial Policy and Promotion
FDI
:-
Foreign Direct Investment
M&A
:-
Merger and Acquisition
ISP
:-
Internet Service Providers
VOIP
:-
Voice Over Internet Protocol
VPN
:-
Virtual Private Network
BSNL
:-
Bharat Sanchar Nigam Limited
ADS
:-
American Depositary Shares
NSE
:-
National Stock Exchange
BSE
:-
Bombay Stock Exchange
NYSE
:-
New York Stock Exchange
PESTEL:-
Political, Economic, Social, Technological, Ecological, Legal Analysis
NCAER :-
National Council of Applied Economic Research
COE
:-
Center of Excellence
SLA
:-
Service Level Agreement
LOI
:-
Letter of Intent
MOU
:-
Memorandum of Understanding
NGN
:-
Next Generation Networking

vi
CONTENTS
Certificate by the Guide
Candidates Statement
ii
Preface
iii
Acknowledgments
vi
Executive summery
Abbreviations Used
vi
Index
Chapter no
Title
Page no.
Introduction
1-22
1.1
Telecommunications Industry in India
1.2
History of Telecom Industry
1.3
Major sectors of Telecom Industry of india
1.3.1 Telephony
1.3.2 Fixed Telephony
1.3.3 Mobile Telephony
1.3.4 Internet
1.3.5 Broadcasting
1.4
Segments in Telecom Industry
10
1.5
Role in Indias Development
13
1.6
Current Structure of Indian Telecom Industry
14
1.7
Dominant feature of economic in Telecom Industry
17
1.8
1.7.1 Market size and Growth rate
17
1.7.2 Scope of competitive rivalry
17
1.7.3 Number of rivals
18
1.7.4 Technological Change
18
1.7.5 Vertical Integration
18
1.7.6 Product Innovation
19
Conclusion
22
Major Players of Industry
23-34
2.1
Vodafone
24
2.2
Bharti Airtel
27
2.3
Idea Cellular
29
2.4
BSNL
31
2.5
Reliance Communication
33
Analysis of Indian Telecom Industry
34-66
3.1
Strategic Group Mapping of Telecom Industry
36
3.2
Competitive Profile Matrix
38
3.3
External Factor Matrix
41
3.4
Porters Five Force Model
44
3.5
PESTEL Analysis of Telecom Industry
48
3.6
OT Analysis
57
3.7
Porters Diamond Model
59
3.8
7Ps Service Marketing
62
Financial Analysis
67-82
4.1
Introduction
68
4.2
Objectives
69
4.3
Ratio Analysis
70
4.3.1 Debt Equity Ratio
72
4.3.2 Current Ratio
74
4.3.3 Net Profit Margin
77
4.3.4 Average Collection Period
79
4.3.5 Trend Analysis
81
Business Plan
83-99
Executive Summery
84
5.1
Company Introduction
85
5.2
Company Description
86
5.3
Process for taking Franchise of UNINOR
87
5.4
List of Documents for Franchise
88
5.5
STP Analysis of UNINOR in Mehsana
88
5.6
Government Policy
88
5.7
Rules and Regulation for Telecom Industry
89
5.8
Method of Distribution
90
5.9
Marketing and Sales Promotion
91
5.10
Source of Finance
95
5.11
Price Plans
96
5.12
Cost of Project
98
5.13
Estimated Profit and Loss
99
Conclusion and Limitation
100-105
6.1
Challenges for Telecom Industry
101
6.2
Findings
102
6.3
Limitation
103
6.4
Conclusion
104
Bibliography
Annexure
Chapter 1
INTRODUCTION
Page | 1
1.1
Telecommunications Industry in India
India's telecommunication network is the second largest in the world based on the total number
of telephone users. It has one of the lowest call tariffs in the world enabled by the mega
telephone networks and hyper-competition among them. It has the world's third- largest Internet
user-base. According to the Internet and Mobile Association of India, the Internet user base
in the country stood at 190 million at the end of June, 2013. Major sectors of the Indian
telecommunication industry are telephony, internet and television broadcast Industry in the
country which is in an ongoing process of transforming into next generation network, employs
an extensive system of modern network elements.
such as digital telephone exchanges, mobile switching centers, media gateways and gateways at
the core,
interconnected
by a
wide
variety of transmission systems
using fibre-
optics or Microwave radio relay networks. The access network, which connects the subscriber to
the core,
is highly diversified with different copper-pair, optic- fiber and wireless
technologies. DTH, a relatively new broadcasting technology has attained significant popularity
in the Television segment.
The introduction of private FM has given a fillip to the radio broadcasting in India.
Telecommunication in India has greatly been supported by the INSAT system of the country,
one of the largest domestic satellite systems in the world. India possesses a diversified
communications system, which links all parts of the country by telephone, Internet, radio,
television and satellite.
Telecommunication has supported the socioeconomic development of India and has played a
significant role to narrow down the rural- urban digital divide to some extent. It also has helped to
increase the transparency of governance with the introduction of e-governance in India. The
government has pragmatically used modern telecommunication facilities to deliver mass
education programmes for the rural folk of India.
Page | 2
1.2
History of telecommunication industry
The history of Indian telecom can be started with the introduction of telegraph. The Indian postal
and telecom sectors are one of the worlds oldest. In 1850, the first experimental electric
telegraph line was started between Calcutta and Diamond Harbour. In 1851, it was opened for
the use of the British East India Company. The Posts and Telegraphs department occupied a
small corner of the Public Works Department
The construction of 4,000 miles (6,400 km) of telegraph lines connecting Kolkata and Peshawar
in the north along with Agra, Mumbai through Sindwa Ghats, and Chennai in the south, as well
as Ootacamund and Bangalore was started in November 1853. William O'Shaughnessy, who
pioneered the telegraph and telephone in India, belonged to the Public Works Department, and
worked towards the development of telecom throughout this period. A separate department was
opened in 1854 when telegraph facilities were opened to the public
In year 1880, two telephone companies namely The Oriental Telephone Company Ltd. and The
Anglo-Indian
Telephone
Company
Ltd.
approached
the Government
of
India to
establish telephone exchanges in India. The permission was refused on the grounds that the
establishment of telephones was a Government monopoly and that the Government itself would
undertake the work.
In 1881, the Government later reversed its earlier decision and a license was granted to
the Oriental Telephone Company Limited of England for opening telephone exchanges
at Calcutta, Bombay, Madras and Ahmadabad and the first formal telephone service was
established in the country. On 28 January 1882, Major E. Baring, Member of the Governor
General of India's Council declared open the Telephone Exchanges in Calcutta, Bombay and
Madras. The exchange in Calcutta named the "Central Exchange" had a total of 93 subscribers in
its early stage. Later that year, Bombay also witnessed the opening of a telephone exchange.
Liberalization of Indian telecommunication industry started in 1981 when Prime Minister Indira
Gandhi signed contracts with Alcatel CIT of France to merge with the state owned Telecom
Company, in an effort to set up 5,000,000 lines per year. But soon the policy was let down
Page | 3
because of political opposition. Attempts to liberalize the telecommunication industry were

continued by the following government under the prime- minister-ship of Rajiv Gandhi. He
invited Sam
Pitroda,
US-based Non-resident
Indian
NRI and
former Rockwell
International executive to set up a Centre for Development of Telematics which manufactured

electronic telephone exchanges in India for the first time. Sam Pitroda had a significant role as a
consultant and adviser in the development of telecommunication in India.
In 1985, the Department of Telecom was separated from Indian Post & Telecommunication
Department. DoT was responsible for telecom services in entire country until 1986 when Mahan
agar Telephone Nigam Limited (MTNL) and Videsh Sanchar Nigam Limited (VSNL) were
carved out of DoT to run the telecom services of metro cities(Delhi and Mumbai) and
international long distance operations respectively.
The demand for telephones was ever increasing and in the 1990s Indian government was under
increasing pressure to open up the telecom sector for private investment as a part
of Liberalisation-Privatisation-Globalisation policies that the government had to accept to
overcome the severe fiscal crisis and resultant balance issue in 1991. Consequently, private
investment in the sector of Value Added Services (VAS) was allowed and cellular telecom sector
were opened up for competition from private investments.
Telecom Regulatory Authority of India (TRAI) was created in 1997. It was formed to act as a
regulator to facilitate the growth of the telecom sector. It was during this period that
the Narsimha Rao- led government introduced the National Telecommunications policy (NTP) in
1994 which brought changes in the following areas:
Ownership, service and regulation of telecommunications infrastructure. The policy introduced
the concept of telecommunication for all and its vision was to expand the telecommunication
facilities to all the villages in India. Liberalization in the basic telecom sector was also envisaged
in this policy. They were also successful in establishing joint ventures between state owned
telecom companies and international players. Foreign firms were eligible to 49% of the total
stake. The multi- nationals were just involved in technology transfer, and not policy making.
Page | 4
Milestone achieve by Telecom Industry

1902 First wireless telegraph station established
1907 First Central Battery of telephones introduced in Kanpur
19131914 First Automatic Exchange installed in Shimla
1927 Radio-telegraph system between the UK and India
1933 Radiotelephone system inaugurated between the UK and India.
1953 12 channel carrier system introduced.
1975 First PCM system commissioned between Mumbai City and Andheri
1983 First analogue Stored Programme Control exchange for trunk lines commission.
1995 First mobile telephone service started on non-commercial basis on 15 August 1995.
1995 Internet Introduced in India starting with laxmi nagar Delhi on 15 August 1999.
Page | 5
1.3
Major sectors of Telecommunication Industry of India
The Indian Telecommunication industry is consisted of 4 sectors. Viz. Telephony, Internet, Data
centers and Broadcasting. The in-depth explanation of these sectors is given below.
1.3.1 Telephony
The telephony segment is dominated by private-sector and two state-run businesses. Most
companies were formed by a recent revolution and restructuring launched within a decade,
directed by ministry of communication and it.
Since then, most companies gained 2G, 3G and 4G licenses and engaged fixed- line, mobile and
internet business in India. On landlines, intra-circle calls are considered local calls while intercircle are considered long distance calls. Foreign Direct Investment policy which increased the
foreign ownership cap from 49% to 74%.Now it is 100%.
Currently Government is working to integrate the whole country in one telecom circle. For long
distance calls, the area code prefixed with a zero is dialed first which is then followed by the
number. For international calls, "00" must be dialed first followed by the code, area and
local phone number. The country code for India is 91. Several international fiber-optic links
include those to Japan, South Korea, Hong Kong, Russia, and Germany. Some major telecom
operators in India include Airtel, Vodafone, Idea, Aircel, BSNL, MTNL, Reliance
Communications, TATA Teleservices, Infotel, MTS, Uninor, TATA DoComo, Videocon,
Augere, Tikona Digital.
1.3.2 Fixed Telephony

Until the New Telecom Policy announced by Government-owned BSNL and MTNL were
allowed to provide landline phone services through copper wire in India with MTNL operating
in Delhi and Mumbai and BSNL servicing all other areas of the country. Due to the rapid growth
of the cellular phone industry in India, landlines are facing stiff competition from cellular
operators. This has forced landline service providers to become more efficient and improve their
Page | 6
quality of service. Land- line connections are now also available on demand, even in high density
urban areas. India has over 31 million main line customers.
1.3.3 Mobile telephony

In August 1995, Chief Minister of West Bengal, Shri Abhishek Yadav ushered in the cell phone
revolution in India by making the first call to Union Telecom Minister Sukhram. Sixteen years
later 4th generation services were launched in Kolkata.
With a subscriber base of more than 929 million, the Mobile telecommunications system in India
is the second largest in the world and it was thrown open to private players in the 1990s. GSM
was comfortably maintaining its position as the dominant mobile technology with 80% of the
mobile subscriber market, but CDMA seemed to have stabilised its market share at 20% for the
time being. By May 2012 the country had 929 million mobile subscribers, up from 350 million
just 40 months earlier. The mobile market was continuing to expand at an annual rate in excess
of 40% coming into 2010.
The country is divided into multiple zones, called circles. Government and several private
players run local and long distance telephone services. Competition has caused prices to drop
and calls across India are one of the cheapest in the world. The rates are supposed to go down
further with new measures to be taken by the Information Ministry. In September 2004, the
number of mobile phone connexions crossed the number of fixed-line connexions and presently
dwarfs the wire line segment by a ratio of around 20:1. The mobile subscriber base has grown by
a factor of over a hundred and thirty, from 5 million subscribers in 2001 to over 929 million
subscribers as of May 2012.
India primarily follows the GSM mobile system, in the 900 MHz band. Recent operators also
operate
in
the
1800 MHz
band.
The
dominant
players
are Airtel, Reliance
Infocomm, Vodafone, Idea cellular and BSNL/MTNL. There are many smaller players, with
operations in only a few states. International roaming agreements exist between most operators
and many foreign carriers. The government allowed Mobile number portability (MNP) which
enables mobile telephone users to retain their mobile telephone numbers when changing from
one mobile network operator to another.
Page | 7
1.3.4 Internet
The history of the Internet in India started with launch of services by VSNL on 15 August 1995.
They were able to add about 10,000 Internet users within 6 months. However, for the next 10
years the Internet experience in the country remained less attractive with narrow-band
connections having speeds less than 56 kbit/s. In 2004, the government formulated its broadband
policy which defined broadband as "an always-on Internet connection with download speed of
256 kbit/s or above." From 2005 onward the growth of the broadband sector in the country
accelerated, but remained below the growth estimates of the government and related agencies
due to resource issues in last-mile access which were predominantly wired- line technologies.
This bottleneck was removed in 2010 when the government auctioned 3G spectrum followed by
an equally high profile auction of 4G spectrum that set the scene for a competitive and
invigorated wireless broadband market. Now Internet access in India is provided by both public
and private companies using a variety of technologies and media including dial- up,xDSL,
coaxial cable, Ethernet, FTTH, ISDN, HSDPA (3G), WiFi, WiMAX, etc. at a wide range of
speeds and costs. The country has the world's third largest number of Internet users with over
205 million in October, 2013.
Wireless Internet
2nd Generation Internet is the most prevalent in India. Wireless ISPs in India use
both CDMA and Edge technologies for 2G.
India's wireless Internet frequencies are
2G : GSM 900 MHz, GSM 1800 MHz
3G : UMTS 2100 MHz
4G : TD-LTE 2300 MHz
Page | 8
1.3.5 Broadcasting
Television broadcasting began in India in 1959 by Doordarshan, a state run medium of
communication, and had slow expansion for more than two decades. The policy reforms of the
government in the 1990s attracted private initiatives in this sector, and since then, satellite
television has increasingly shaped popular culture and Indian society. However, still, only the
government owned Doordarshan has the license for terrestrial television broadcast. Private
companies reach the public using satellite channels; both cable television as well as DTH has
obtained a wide subscriber base in India. In 2012, India had about 148 million TV homes of
which 126 million has access to cable and satellite services.
Giving rise to several channels in regional languages, especially Hindi. The main news channels
available were CNN and BBC World. In the late 1990s, many current affairs and news channels
sprouted, becoming immensely popular because of the alternative viewpoint they offered
compared to Doordarshan.
Some of the notable ones are AajTak and STAR News, CNN-IBN, Times Now, initially run by
the NDTV group and their lead anchor, Prannoy Roy. Over the years, Doordarshan services also
have grown from a single national channel to six national and eleven regional channels.
Nonetheless, it has lost the leadership in market, though it underwent many phases of
modernization in order to contain tough competition from private channels.
On 16 November 2006, the Government of India released the radio policy which allowed
agricultural centers, educational institutions and civil society organizations to apply for
community based FM broadcasting license. Community Radio is allowed 100 watts of Effective
Radiated Power with a maximum tower height of 30 meters. The license is valid for five years
and one organization can only get one license, which is non-transferable and to be used for
community development purposes.
Page | 9
1.4
Segments in the Telecommunication Industry
Telecommunication services in India can be divided into two broad segments, wire line services
and wireless services. While the wire line services include the fixed line telephony, wireless
services comprise mobile, WLL (F) and WLL (M). On the whole, the Indian telecom industry
has made significant progress; however, the source of emergence of this growth in terms of
wireless and wire line segments has undergone substantial change in the past few years. The wire
line segment, which accounted for a major share of the telecom industry during beginning of the
current decade, has witnessed a decline in its subscriber base in the last 2 years. The subscriber
base of the wire line segment, which reached a peak of 41.54 mn during FY06, has witnessed a
declining trend since then. The subscriber base of the wire line segment has declined to 37.96 mn
in FY09 from its peak in FY06. On the other hand, the growth in subscriber base of the wireless
segment has increased substantially over these years. The subscriber base of the wireless
segment has increased from around 6.70 mn in FY02 to as much as 391.76 mn in FY09. Over
these years, not only the number of wireless subscribers but also the pace of its growth has
increased substantially.
Page | 10
Other telecommunication services such as internet services, broadband services, VSAT, also
have evolved gradually and have become an integral part of the Indian telecom industry. Thus,
broadly the Indian telecommunication industry can be classified into the following segments:
Wire line services
Wireless service: GSM and CDMA
Internet services
Public Mobile Radio Trunked Services
Global Mobile Personal Communication by Satellite (GMPCS)
Very Small Aperture Terminals (VSAT)
Mobile Value Added Services
Wire line
Market share in the wire line subscription as on February, 2012
In the basic telecom services or wire line services the incumbent Bharat Sanchar Nigam
Limited (BSNL) has the majority share in the market. This is due to the expanse of the
infrastructure available to the incumbent, and its ability to provide basic telecom services in the
rural and remote areas. The private wire line service providers do not have the capital to invest in
building such infrastructure and there is no profit in such capital investment as well. Therefore,
the private players mainly concentrate in urban areas where they can earn more revenue.
Page | 11
Wireless
Market share in the wireless subscription as on February, 2012
The pie chart clearly shows that currently the private sector dominates the cellular market.
However, this was not the case in the beginning. The changes in the market structure were due to
the changes in telecom policy in 1999. The growth rate of number of wireless subscribers from
1996-2011 in the graph below, clearly depicts the growth in wireless subscribers after the change
in policy in 1999. Currently, the three main players in the mobile services sector are Vodafone,
Reliance and Bharti
Page | 12
1.5
Role in Indias Development
Contribution to GDP
According to the UNCTAD, there is a direct correlation between the growth in mobile
teledensity and the growth in GDP per capita in developing countries, which tend to have a high
percentage of rural population. The share of the telecom services industry in the total GDP has
been rising over the past few years (the telecom sector contribution in GDP went up from 2.52%
in FY05 to 2.83% in FY07).
Page | 13
Employme nt
The Indian telecommunication industry employs over 400,000 direct employees

and about 85% of these employees are from government-owned companies. The
ratio of number of subscribers to employees, an indication of efficiency and
profitability, is much higher for private companies than for government companies.
Page | 14
1.6
Current Structure of the Indian Telecom Industry
Currently, both public sector players as well as the private sector players are actively catering to
the rapidly growing telecommunication needs in India. Private participation is permitted in all
segments of the telecom industry, including ILD, DLD, basic cellular, internet, radio paging, et
al. The broad structure of the telecom industry (in terms of service providers) is depicted in the
diagram below:
Public Sector:
After the privatization of VSNL in 2002, only two premier PSUs, MTNL and BSNL operate in
India and provide various telecom services. As noted earlier, MTNL operates in Delhi and
Mumbai and BSNL provides services to the remaining country. In the post-liberalization era,
these PSUs not only have made significant progress but also have provided stiff competition to
their private counterparts.
Private Sector:
Private operators have played a very crucial role in the growth of the telecommunication
industry, primarily in the mobile services. With the liberalization of the telecom industry, the
private sector has been increasing its foothold in the telecom services space. After the
introduction of NTP-99, the contribution of private players towards telecom services has
Page | 15
witnessed rapid strides. While the private sector is instrumental in providing both fixed line as
well as wireless services, it is mainly active in the wireless segment. The fixed lines account for
only about 2% of private sector's total subscriber base. While some private players have a panIndia presence, there are many regional players that cater to only certain service areas.
Page | 16
1.7
Dominant feature of economic in Telecommunication Industry
1.7.1 Market size & Growth rate:

Indias GSM operators added 2.58 million rural subscribers in April 2014, taking the total to
297.16 million. Also, Cellular Operators Authority of Indias (COAI) data suggests that the
overall GSM subscriber base increased by 4.97 million in April 2014 taking the total GSM
subscriber base to 726.90 million customers.
The COAI data also suggests that telecom provider Bharti Airtel provided the most number of
customers in the month of April, about 990,000 new subscribers followed by Vodafone and Idea
Cellular.
It has been predicted by Ericsson that India's mobile subscriber base will grow from 795 million
in 2013 to 1145 million subscribers by 2020.
Data traffic powered by third-generation (3G) services grew at 146 per cent in India in 2013,
higher than the global average, according to an MBit Index study by Nokia Siemens Networks
(NSN).
With Bharti Airtel becoming the second largest telecommunications provider in Nigeria and Tata
Communications entering into strategic partnerships with countries such as Australia, Germany,
Austria and Malaysia, it can be observed that Indian telecommunication providers are doing
quite well in the global market.
1.7.2 Scope of competitive rivalry

The Hirschman-Herfindahl Index (HHI) for the Indian telecom industry stands at 1421.29 which
indicate a highly contestable but oligopolic industry. Moreover, the concentration of top four
firms at 66% also confirms this hypothesis.
Page | 17
1.7.3 Number of rivals
Types of player
State owned
companies
BSNL
MTNL
Private indian
owned
companies
TataTeleservices
Foreign invested
companies
Reliance
Infocomm
Spice
communicatin
Idea Cellular
Vodafone,
Bharti
1.7.4 Technological change

Wireless technology is based on two competing platforms GSM and CDMA. Accordingly,
players have united themselves in lobbying with GSM service providers represented by Cellular
Operators Association of India (COAI) and CDMAs by Association of Unified Telecom Service
Providers of India (AUSPI). With each technology possessing inherent advantages as well as
disadvantages, it presents a difficult proposition for a new entrant to decide on its offering.
1.7.5 Vertical integration
The combination in one firm of two or more stages of production normally operated by separate
firms.
In microeconomics and management, vertical integration is where the supply chain of a company
is owned by that company. Usually each member of the supply chain produces a
Page | 18
different product or (market-specific) service, and the products combine to satisfy a common
need. It is contrasted with horizontal integration. Vertical integration has also described
management styles that bring large portions of the supply chain not only under a common
ownership
There are three varieties: backward (upstream) vertical integration, forward (downstream)
vertical integration, and balanced (both upstream and downstream) vertical integration.
Telephone companies in most of the 20th century, especially the largest (the Bell System) were
integrated, making their own telephones, telephone cables, telephone exchange equipment and
other supplies.
1.7.6 Product Innovation
As technological convergence redefines business models across nearly every industry,
companies have a growing appetite for innovation in order to survive and thrive in a fast-paced
and unpredictable environment. While few business leaders question the need for innovation,
many companies face numerous challenges when it comes to applying it successfully to drive
higher returns.
Telecom Innovations A Services & Products is a service within the TELESEEQ Platform, which
allows access to a huge amount of news and information on innovative services & products in
the Telecom, IT and Media industries.
Topicfocused papers, presenting industry innovations Concise and compelling information on
new technologies Key information that goes straight to the point.
Page | 19
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Degree of product differentiate
The market can be divided into household and industrial consumers. Additionally, they can be
differentiated as either pre-paid or post-paid users. In case of post-paid users, customers exercise
certain degree of loyalty because of high switching costs. Also, the industrial users have
customized offerings from service providers that bind them. For household customers, TRAIs
Page | 20
recommendation on MPN (Mobile Number Portability) has made it all the more important for
the companies to charge lower tariffs besides providing better services to retain subscribers.
Economies of Scale:
Existing players enjoy certain degrees of economies of scale that help them offer lower unit
pricing to customers. A notable part of the investments are one-time and are referred to as sunk
costs i.e operator can only exit this particular market at considerable costs. Investments in
telecom networks can be divided for the following functional elements:
-Terminal equipment
-Access Network
-Switching
-Transmission/Long line
-Other (buildings etc.)
The biggest barrier is the availability for credit financing which is highly dependent on many
external factors. However, to minimize this high deployment costs, service providers have
started considering infrastructure sharing, which has been discussed in Industry Transformation.
Page | 21
1.8 Conclusion
In the given chapter we are studying about basic information of telecommunication industry in
India and their history, growth, various milestone achieved by this industry and also understand
about telephony, internet, and broadcasting. The graphical and numerical explanation of this
industry also cover in this chapter. We are also study about current situation of
telecommunication industry India and further we want to study about major players of this
industry in next chapter.
Page | 22
Chapter : 2
Major Player of the industry
Page | 23
2.1 Vodafone
Vodafone Group plc is a British multinational telecommunications company headquartered
in London and with its registered office in Newbury, Berkshire.] It is the world's 3rd- largest
mobile telecommunications company measured by both subscribers and 2013 revenues (in each
case behind China Mobile and SingTel), and had 434 million subscribers as of 31 March 2014.
Vodafone owns and operates networks in 21 countries and has partner networks in over 40
additional countries.[4] Its Vodafone Global Enterprise division provides telecommunications and
IT services to corporate clients in over 65 countries.
Vodafone has a primary listing on the London Stock Exchange and is a constituent of the FTSE
100 Index. It had a market capitalization of approximately 89.1 billion as of 6 July 2012, the
third- largest of any company listed on the London Stock Exchange.[5] It has a secondary listing
on NASDAQ.
Evolution as a Racal Telecom brand: 1980 to 1991

In 1980, Sir Ernest Harrison OBE, the then chairman of Racal Electronics plc. agreed to a deal
with Lord Weinstock of General Electric Company plc to allow Racal to access some of GEC's
tactical battle field radio technology. The head of Racal's military radio division Gerry
Whent was briefed by Ernest Harrison to drive the company into commercial mobile radio.
Whent visited GEs mobile radio factory in Virginia, USA the same year to understand the
commercial use of military radio technology.
Previously in 1979, Jan Stenbeck, a head of a growing Swedish conglomerate, set up an
American company, Millicom, Inc., to pursue mobile communications by applying for licences
in the United States
In the summer of 1982, Stenbeck approached Racals Whent about bidding jointly for the UKs
second cellular radio licence, soon to be awarded, the first going by prior arrangement to British
Telecom. The two struck a deal giving Racal 60% of the new company, Racal-Millicom, Ltd,
and Millicom 40%. Due to UK concerns about foreign ownership, the terms were revised, and in
December 1982, the Racal-Milicom partnership was awarded the second UK mobile phone
Page | 24
network license. Final ownership of Racal-Millicom, Ltd was 80% Racal, with Millicom holding
15% plus royalties and venture firm Hambros Technology Trust holding 5%. According to the
UK Secretary of State for Industry, "the bid submitted by Racal-Millicom Ltd provided the
best prospect for early national coverage by cellular radio.
Vodafone Group, then Vodafone Airtouch plc: 1991 to 2000

On 16 September 1991, Racal Telecom was demerged from Racal Electronics as Vodafone
Group,] with Gerry Whent as its CEO.
In July 1996, Vodafone acquired the two thirds of Talkland it did not already own for
30.6 million. On 19 November 1996, in a defensive move, Vodafone purchased Peoples
Phone for 77 million, a 181 store chain whose customers were overwhelmingly using
Vodafone's network In a similar move the company acquired the 80% of Astec Communications
that it did not own, a service provider with 21 stores.
In January 1997, Gerald Whent retired and Christopher Gent took over as the CEO. The same
year, Vodafone introduced its Speechmark logo, composed of a quotation mark in a circle, with
the O's in the Vodafone logotype representing opening and closing quotation marks and
suggesting conversation.
On 29 June 1999, Vodafone completed its purchase of AirTouch Communications, Inc. and
changed its name to Vodafone Airtouch plc. The merged company commenced trading on 30
June 1999. In order to gain anti-trust approval for the merger, Vodafone sold its 17.2% stake
in E-Plus Mobilfunk. The acquisition gave Vodafone a 35% share of Mannesmann, owner of the
largest German mobile network.
Page | 25
Vodafone Group plc: 2000 to present

On 28 July 2000, the Company reverted to its former name, Vodafone Group plc.
In 2001, the Company acquired Eircell, the largest wireless communications company in Ireland,
from eircom. Eircell was subsequently rebranded as Vodafone Ireland. Vodafone then went on to
acquire Japan's third- largest mobile operator J-Phone, which had introduced camera phones first
in Japan.
On 17 December 2001, Vodafone introduced the concept of "Partner Networks", by
signing TDC Mobil of Denmark. The new concept involved the introduction of Vodafone
international services to the local market, without the need of investment by Vodafone. The
concept would be used to extend the Vodafone brand and services into markets where it does not
have stakes in local operators. Vodafone services would be marketed under the dual-brand
scheme, where the Vodafone brand is added at the end of the local brand.
In 2007, Vodafone entered into a title sponsorship deal with the McLaren Formula One team,
which traded as "Vodafone McLaren Mercedes" until the sponsorship ended at the end of the
2013 season.
In May 2011, Vodafone Group Plc bought the remaining shares of Vodafone Essar from Essar
Group Ltd for $5 billion. On 1 December 2011, it acquired the Reading based Bluefish
Communications Ltd an ICT consultancy company. The acquired operations formed the
nucleus of a new Unified Communications and Collaboration practice within its subsidiary
Vodafone Global Enterprise, which will focus on implementing strategies and solutions in cloud
computing, and strengthen its professional services offering.
On 24 June 2013, Vodafone announced it would be buying German cable company Kabel
Deutschland. The takeover is valued at 7.7 billion, and was recommended over the bid of
rival Liberty Global.
Page | 26
2.2 Bharti Airtel

Bharti Airtel limited is an Indian multinational telecommunications services company
headquartered in New Delhi, India. It operates in 20 countries across South Asia, Africa, and
the Channel Islands. Airtel has a GSM network in all countries in which it operates,
providing 2G, 3G and 4G services depending upon the country of operation. Airtel is the world's
third largest mobile telecommunications company by subscribers, with over 275 million
subscribers across 20 countries as of July 2013. It is the largest cellular service provider in India,
with 192.22 million subscribers as of August 2013. Airtel is the Second largest Asia-Pacific
mobile operator by subscriber base, behind China Mobile.
Airtel is the largest provider of mobile telephony and second largest provider of fixed
telephony in India, and is also a provider of broadband and subscription television services. It
offers its telecom services under the "airtel" brand, and is headed by Sunil Bharti Mittal. Bharti
Airtel is the first Indian telecom service provider to achieve Cisco Gold Certification. It also acts
as a carrier for national and international long distance communication services. The company
has a submarine cable landing station at Chennai, which connects the submarine cable
connecting Chennai and Singapore.
Bharti Airtel added 5.10 lakh subscribers to take its base to 20.97 crore at the end of July,2014.
Its market share in India is highest with a value of 28.41%.
Airtel is credited with pioneering the business strategy of outsourcing all of its business
operations except marketing, sales and finance and building the 'minutes factory' model of low
cost and high volumes. The strategy has since been adopted by several operators. Its network
base
stations,
microwave
links,
etc.is
maintained
by Ericsson and Nokia
Siemens
Network whereas IT support is provided by IBM and transmission towers are maintained by
another company (Bharti Infratel Ltd. in India) Ericsson agreed for the first time to be paid by
the minute for installation and maintenance of their equipment rather than being paid up front,
which allowed Airtel to provide low call rates of 1/minute .
Page | 27
Sunil Bharti Mittal founded the Bharti Group. In 1983, Mittal was in an agreement with
Germany's Siemens to manufacture push-button telephone models for the Indian market. In
1986, Mittal incorporated Bharti Telecom Limited (BTL), and his company became the first in
India to offer push-button telephones, establishing the basis of Bharti Enterprises. By the early
1990s, Sunil Mittal had also launched the country's first fax machines and its first cordless
telephones. In 1992, Mittal won a bid to build a cellular phone network in Delhi. In 1995, Mittal
incorporated the cellular operations as Bharti Tele-Ventures and launched service in Delhi. In
1996, cellular service was extended to Himachal Pradesh.
In 1999, Bharti Enterprises acquired control of JT Holdings, and extended cellular operations to
Karnataka and Andhra Pradesh. In 2000, Bharti acquired control of Skycell Communications, in
Chennai. In 2001, the company acquired control of Spice Cell in Calcutta. Bharti Enterprises
went public in 2002, and the company was listed on Bombay Stock Exchange and National
Stock Exchange of India. In 2003, the cellular phone operations were rebranded under the single
Airtel brand. In 2004, Bharti acquired control of Hexacom and entered Rajasthan. In 2005,
Bharti extended its network to Andaman and Nicobar. This expansion allowed it to offer voice
services all across India. In 2009, Airtel launched its first international mobile network in Sri
Lanka. In 2010, Airtel acquired the African operations of the Kuwait-based Zain Telecom. In
March 2012, Airtel launched a mobile operation in Rwanda.
Airtel launched "Hello Tunes", a Caller ring back tone service, in July 2004 becoming to the first
operator in India to do so. The Airtel theme song, composed by A.R. Rahman, was the most
popular tune on that year.
During the 200910 financial year, Bharti negotiated for its strategic partner Alcatel-Lucent to
manage the network infrastructure for the tele- media business. On 31 May 2012, Bharti Airtel
awarded the three-year contract to Alcatel-Lucent for setting up an Internet Protocol access
network (mobile backhaul) across the country. This would help consumers access internet at
faster speed and high quality internet browsing on mobile handsets.
In May 2013, Bharti Infotel paid Rs 50,000 as compensation to a customer "for unfair trade
practices". The customer alleged that the company continued to aggressively demand payment
despite customer requests for disconnection of service.
Page | 28
2.3 Idea Cellular

Idea Cellular, commonly referred to as Idea, is an Indian mobile network operator based
in Mumbai, India. Idea is a pan-India integrated GSM operator offering 2G and 3G services, and
has its own NLD and ILD operations, and ISP license. With revenue in excess of $4 billion;
revenue market share of nearly 15%; and subscriber base of over 121 million in FY 2013, Idea is
Indias third largest mobile operator. Idea ranks among the top 10 country operators in the world
with a traffic of over 1.5 billion minutes a day.
Initially the Birlas, the Tatas and AT&T Wireless each held one-third equity in the company. But
following AT&T Wireless' merger with Cingular Wireless in 2004, Cingular decided to sell its
32.9% stake in Idea. This stake was bought by both the Tatas and Birlas at 16.45% each.
Tata's foray into the cellular market with its own subsidiary, Tata Indicom, a CDMA-based
mobile provider, cropped differences between the Tatas and the Birlas. This dual holding by the
Tatas also became a major reason for the delay in Idea being granted a license to operate
in Mumbai. This was because as per Department of Telecommunications (DOT) license norms,
one promoter could not have more than 10% stake in two companies operating in the same circle
and Tata Indicom was already operating in Mumbai when Idea filed for its licence.
The Birlas thus approached the DOT and sought its intervention, and the Tatas replied by saying
that they would exit Idea but only for a good price. On 10 April 2006, the Aditya Birla
Group announced its acquisition of the 48.18% stake held by the Tatas at Rs. 40.51 a share
amounting to Rs. 44.06 billion. While 15% of the 48.14% stake was acquired by Aditya Birla
Nuvo, a company in-charge of the Birlas' new business initiatives, the remaining stake was
acquired by Birla TMT holdings Private Ltd., an AV Birla family-owned company.
Currently, Aditya Birla Group holds 49.1% of the total shares of the company. Malaysia
based Axiata controls a 14.99% stake in the company
On 19 May 2010, the 3G spectrum auction in India ended. Idea paid

spectrum
in
11
circles.
The
circles
it
will
provide
3G
5,768.59 crore for

in
areAndhra
Pradesh, Gujarat, Haryana, Himachal Pradesh, Jammu & Kashmir, Kerala, Tamilnadu,Madhya
Pradesh, Maharashtra & Goa, Punjab, Uttar Pradesh (East) and Uttar Pradesh (West).
Page | 29
On 28 March 2011, Idea launched 3G services in Gujarat, Himachal Pradesh and Madhya
Pradesh.[5] The launch cities were Ahmedabad, Shimlaand Indore. This makes Idea the sixth
private operator (eighth overall) to launch its 3G services in the country following Tata
Docomo, Reliance Communications, Airtel, Aircel and Vodafone.
Idea currently supports up to 21.1 Mbit/s over 2G speeds of 256 kbit/s. However, different
handsets support different speeds, from 384 kbit/s, 3.6 Mbit/s, 7.2 Mbit/s or 21.1 Mbit/s. Speeds
also depend on the 3G plan/recharge that users opt for.
Idea cellular has announced a cut of 70% in the tariff of its 3G services.
On 23 November 2011 Idea Cellular launched two affordable 3G handsets in India: Idea 3G
Smartphone Blade priced at
7,992 and Idea 3G Smartphone priced at
5,850. Both handsets
are based on Android 2.2 Froyo.

Idea has also launched a Dual-SIM Android smartphone in India on 15 June 2012 named as Idea
ID-918 at a price point of Rs. 5,994 ($108 approx.) It features Android v2.3 OS, 3.2-inch
capacitive touchscreen, 3G, Wi-Fi and 3.2 MP rear facing camera.
On 5 March 2013, Idea launched another 3G smartphone called Idea Zeal 3G which is a Dual
SIM phone with 3 Megapixel camera
Page | 30
2.4 BSNL (Bharat Sanchar Nigam limited)

Bharat Sanchar Nigam Limited is an Indian state-owned telecommunications company
headquartered in New Delhi, India. It was incorporated on 15 September 2000 and took over the
business of providing of telecom services and network management from the erstwhile Central
Government Departments of Telecom Services (DTS) and Telecom Operations , with effect from
1 October 2000 on a going concern basis. It is the largest provider of fixed telephony,
largest broadband services provider with more than 60% Market share, and fourth largest mobile
telephony provider in India. However, in recent years the company's revenues and market share
have plummeted into heavy losses due to intense competition in the Indian telecommunications
sector.
BSNL is India's oldest and largest communication service provider (CSP). It had a customer base
of 117 million as of January 2014 It has footprints throughout India except for the metropolitan
cities of Mumbai and New Delhi, which are managed by Mahanagar Telephone Nigam (MTNL).
BSNL, then known as the Department of Telecommunications, had been a near monopoly during
the socialist period of the Indian economy. During this period, BSNL was the only telecom
service provider in the country. MTNL was present only in Mumbai and New Delhi. During this
period BSNL operated as a typical state-run organization, inefficient, slow, bureaucratic, and
heavily unionised. As a result subscribers had to wait for as long as five years to get a telephone
connection. The corporation tasted competition for the first time after the liberalisation of Indian
economy in 1991. Faced with stiff competition from the private telecom service providers,
BSNL has subsequently tried to increase efficiencies itself. DoT veterans, however, put the onus
for the sorry state of affairs on the Government policies, where in all state-owned service
providers were required to function as mediums for achieving egalitarian growth across all
segments of the society
During the financial year 200809 (from 1 April 2008 to 31 March 2009) BSNL has added 8.1
million new customers in various telephone services taking its customer base to 75.9 million.
BSNL's nearest competitor Bharti Airtel is standing at a customer base of 62.3 million. However,
despite impressive growth shown by BSNL in recent times, the Fixed line customer base of
BSNL is declining. In order to woo back its fixed-line customers BSNL has brought down long
Page | 31
distance calling rate under OneIndia plan, however, the success of the scheme is not known and
BSNL faces bleak fiscal 2009-2010 as users flee.
Presently there is an intense competition in Indian Telecom sector and various Telcos are rolling
out attractive schemes and are providing good customer services. But situation as on 2012,
BSNL will be third largest operator (Service) and No 1 access operator in the country. As per the
TRAI Report 2011-12, BSNL became the most trustworthy brand due to its loyalty towards
customers and its rule.
Access Deficit Charges (ADC, a levy being paid by the private operators to BSNL for providing
service in non-lucrative areas, especially rural areas) has been slashed by 20% by TRAI, w.e.f. 1
April 2009.[17] The reduction in ADC may hit the profits of BSNL.
BSNL has started 3G services in 290 cities and acquired more than 600,000 customers. It has
planned to roll out 3G services in 760 cities across the country in 2010-11. according to users
and big sources BSNL's 3G data speed is much higher than other operator and also it is
competitively cheap.
Broadband services: The shift in demand from voice to data has revolutionized the very nature of
the network. BSNL is poised to cash on this opportunity and has planned for extensive expansion
of the Broadband services. The Broadband customer base of 3.56 Million customer in
March'2009 is planned to be increased to 16.00 million by March 2014. On 13 June 2012, BSNL
employees participated called off an earlier planned nationwide strike against discriminatory
policies of BSNL management upon promise by Management to resolve the Demands of the
protesting unions.
In March 2013, BSNL was also (according to one study) a major transit point for internet spam
Page | 32
2.5 Reliance communication

Reliance
Communications
Ltd.
(commonly
called RCOM)
is
an
Indian Internet
access (commonly called "broadband") and telecommunications company headquartered in Navi

Mumbai, India. RCOM is India's second largest telecom operator, only after Bharti Airtel. It is
the 15th largest mobile phone operator with over 150 million subscribers. Established in 2004, it
is a subsidiary of Reliance Anil Dhirubhai Ambani Group.
The company has five segments:
Wireless segment
Broadband segment (Internet access operations)
Global segment: national and international long-distance operations (and the wholesale
operations of its subsidiaries)
Investment segment: investment activities of the Reliance Group companies
Other segment: customer care and direct-to-home (DTH) activities
Subsidiary Reliance Telecommunication Limited (RTL) operates in Gujarat, Madhya

Pradesh,West Bengal, Himachal Pradesh, Odisha, Bihar, Assam, and the northeast of India. It
first offeredGSM services in January 2003.
Reliance Tech Services is the IT services wing of Reliance Anil Dhirubhai Ambani group. It
provides IT consultancy, business process outsourcing and software development for
Reliance Communications and other ADA group companies.
Reliance Globalcom owns the Fiber-Optic Link Around the Globe undersea cable system
On 19 May 2010, the 3G spectrum auction in India ended. Reliance Communications paid
58642.9 million for spectrum in 13 circles. The circles it will provide 3G in
are Delhi, Mumbai, Kolkata, Punjab, Rajasthan, Madhya Pradesh, West Bengal, Himachal
Pradesh, Bihar, Odisha, Assam, North East, Jammu & Kashmir. RCOM recently has started
to offer 3G services through network sharing in the states where it does not hold license for
3G operations. Reliance provides 3G services in Uttar Pradesh East through Aircel's 3G
network and in Uttar Pradesh West through Tata Docomo's 3G network and it allows Tata
Docomo customers to roam on Reliance's network in Delhi, where Tata Docomo does not
operate. On 11 June 2010, the broadband wireless access (BWA) or 4G spectrum auction in
Page | 33
India ended. Infotel Broadband, a subsidiary of Reliance Industries,won pan-India licence in

the
auction across
22
circles,
the
only telecom operator
owned BSNL/MTNL to do so.Infotel paid the government
other
than state-
128477.7 million for the
licence.
According to Cellular Operators Association of India (COAI) director- general Rajan S.

Mathews, Reliance Industries was expected to launch 4G services in December 2011 They
were expected to use LTE technology. On 25 May 2012, RCom announced a price reduction
of 61% on its 3G services.
In 2011 Reliance provided up to 28 Mbit/s data rate in India with its MIMO technology.
On 31 January 2013, Reliance announced its partnership with Lenovo to market co-branded
smartphones in India. The smartphones were said to use the Android operating system and
have dual-core processors.
Page | 34
Chapter 3
Analysis of Indian Telecommunication
Industry
Page | 35
3.1 Strategic group mapping of Telecommunication industry
50000
Airtel
40000
net sales (in
crores)
20000
Vodafone
Idea
Reliance
10000
5000
Y
Tata
BSNL
X
National
Global
Geographical Scope
Figure :Strategic Group Mapping of Telecom Companies
Page | 36
Inte rpretation
In order to visualize the segmentation of strategic groups, it is useful to design a "map" (MllerStewens 2005):
For this purpose we have determine two variable which is helpful in classify the strategic
groups. These criteria form the X axis, where we have sketch as the geographical scope
i.e national and global. We have use these criteria, which are of high importance in terms
of the behaviour of the competitors presence.
Thereafter on Y axis we have took different variable that is net sales are in crores of
companies in the sector has been positioned on the map.
Net sales of following companies :
Bharti Airtel
: 49918.50
Vodafone
: 39800.60
Idea
: 26431.97
Reliance communication : 11176.00
Tata Communication
: 4376.40
The last step is to divide the companies into strategic groups. The companies which are
closest to each other form a strategic group. Additionally we have illustrate the net sales
of the strategic groups by the size of the circles.
note : the size of the circles does not represent the market shares in this figure.
Page | 37
3.2 Competitive profile Matrix

CRITICAL
SUCCESS
FACTOR
Weight
VODAFONE
Bharti Airtel
Reliance
Communication
Rating
Score
Rating
Score
Rating
Score
Market share
0.12
0.36
0.48
0.36
Customer service
0.10
0.4
0.3
0.2
Customer Loyalty
0.06
0.12
0.24
0.12
Financial Position
0.07
0.28
0.21
0.28
Strong online
present
0.05
0.1
0.2
0.15
Profit Margin
0.11
0.33
0.44
0.33
Price
competitiveness
0.11
0.33
0.33
0.22
Value added
service
0.04
0.16
0.12
0.08
Proper speed and

bandwidth
0.12
0.48
0.36
0.24
Strong
connectivity
0.10
0.4
0.4
0.10
Billing
Transparency
0.02
0.04
0.06
0.02
Technical
competence
0.02
0.04
0.08
0.02
Handling of
complaints
0.08
0.32
0.24
0.16
Total
3.04
3.46
2.28
Page | 38
It is a tool that compares the firm and its rivals and reveals their relative strengths and
weaknesses.
Unde rstanding the tool
In order to better understand the external environment and the competition in a particular
industry, firms often use CPM. The matrix identifies a firms key competitors and compares
them using industrys critical success factors. The analysis also reveals companys relative
strengths and weaknesses against its competitors, so a company would know, which areas it
should improve and, which areas to protect.
Weight
Each critical success factor should be assigned a weight ranging from 0.0 (low importance) to
1.0 (high importance). The number indicates how important the factor is in succeeding in the
industry. If there were no weights assigned, all factors would be equally important, which is an
impossible scenario in the real world. The sum of all the weights must equal 1.0. Separate factors
should not be given too much emphasis (assigning a weight of 0.3 or more) because the success
in an industry is rarely determined by one or few factors. In our project, the most significant
factors are Market share (0.12), Price Competitiveness(0.11), Strong Connectivity (0.10).
Rating
The ratings in CPM refer to how well companies are doing in each area. They range from 4 to 1,
where 4 means a major strength, 3 minor strength, 2 minor weakness and 1 major
weakness. Ratings, as well as weights, are assigned subjectively to each company, but the
process can be done easier through benchmarking.
Page | 39
Score & Total Score
The score is the result of weight multiplied by rating. Each company receives a score on each
factor. Total score is simply the sum of all individual score for the company. The firm that
receives the highest total score is relatively stronger than its competitors. In our Project, the
strongest performer in the market is Bharti Airtel (3.46 points) and its main competitor is
Vodafone (3.04 points)
Benefits of the CPM:
The same factors are used to compare the firms. This makes the comparison more
accurate.
The analysis displays the information on a matrix, which makes it easy to compare the
companies visually.
The results of the matrix facilitate decision- making. Companies can easily decide which areas
they should strengthen, protect or what strategies they should pursue.
Page | 40
3.3 External Factor Matrix (EFE)

Key External Factors
Weight Rating Weighted

Score
Opportunities
Population
0.30
1.2
Changing Population psychograph
0.19
0.38
Increased Penetration level
0.12
0.12
FDI
0.12
0.36
Government Policies
0.15
0.45
New Technology
0.12
0.48
Total
Threats
2.99
When using the EFE matrix we identify the key external opportunities and threats that are
affecting or might affect a company by analysing the external environment with the tools like
PEST analysis, OT Analysis.
EFE Matrix. The ratings in external matrix refer to how effectively companys current strategy
responds to the opportunities and threats. The numbers range from 4 to 1, where 4 means a
superior response, 3 above average response, 2 average response and 1 poor response.
Ratings, as well as weights, are assigned subjectively to each factor. In our Project, we can see
that the companys response to the opportunities is rather poor, because only one opportunity has
received a rating of 4, while the rest have received the rating of 1. The company is better
prepared to meet the threats, especially the first threat.
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Weighted Scores & Total Weighted Score

The score is the result of weight multiplied by rating. Each key factor must receive a score. Total
weighted score is simply the sum of all individual weighted scores. The firm can receive the
same total score from 1 to 4 in matrix. The total score of 2.99 is an good score. In external
evaluation a low total score indicates that companys strategies are well designed to meet the
opportunities and defend against threats.
In our project, the company has received total score 2.99, which indicates that companys
strategies are effective in exploiting opportunities or defending against threats. The company
should improve its strategy and focus more on how take advantage of the opportunities.
Benefits
The matrix have the following benefits:
Easy to understand. The input factors have a clear meaning to everyone inside or
outside the company. Theres no confusion over the terms used or the implications of the
matrices.
Easy to use. The matrix do not require extensive expertise, many personnel or lots of
time to build.
Focuses on the key internal and external factors. Unlike EFE only highlight the key
factors that are affecting a company or its strategy.
Multi-purpose. The tools can be used to build SWOT analysis, IE matrix, GE-McKinsey
matrix or for benchmarking.
Limitations
Easily replaced. EFE matrix can be replaced almost completely by PEST analysis,
SWOT analysis, competitive profile matrix and partly some other analysis.
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Doesnt directly help in strategy formation. Both analyses only identify and evaluate
the factors but do not help the company directly in determining the next strategic move or
the best strategy. Other strategy tools have to be used for that.
Too broad factors. SWOT matrix has the same limitation and it means that some factors
that are not specific enough can be confused with each other. Some strengths can be
weaknesses as well, e.g. Changing population psychograph, which can be a strong and
valuable Changing population psychograph or a poor Changing population psychograph.
The same situation is with opportunities and threats. Therefore, each factor has to be as
specific as possible to avoid confusion over where the factor should be assigned.
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3.4 Porter Five Force Model

Porter (1980) gave the idea of deployment of five forces for the industry analysis
He said that these forces jointly determine the competitive intensity of a firm within the industry.
Strength of these forces leads to lower profitability of an organization and vice versa.
Wheelen& Hunger (2002) also considered Porters approach for industry analysis but he also
included sixth force i.e. relative power of other stakeholders. The Porters model provides an
easy and simple approach for industry analyses. This model also provides an opportunity to take
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important decisions like whether to enter in a particular industry or to leave it. This is also a very
simple tool in the hands of strategists to determine the profitability position of a firm.
present and future of mobile service payment by using Porters five competitive forces model
(consumer power, merchant power, new e- payment service, traditional payment service and
competition between m-payment service providers and four contingency forces like social
environment, commercial environment, technological environment and
legal/regulatory
environment. They were in view that factors like social environment and traditional payment
service were never considered earlier in research work. Little consideration was given to the five
factors like commercial environment, legal/regulatory environment, merchant power, new epayment services and competition between m-payment service providers.
While highly studied factors were technological environment and consumer power. According to
them there is no clear relationship between mobile service payments, electronic payments,
traditional service payments and banking services. Furthermore he also stressed that business to
business commerce should also be given more attention.
framework of five forces is not applicable in case of religious organization. Since instead of five
forces, the force of mission, faith and loyalty determines organizational efficiency and
profitability.
Analysis
We have analyzed the performance of Bharti Airtel by considering Porter five forces model.
1. Intensity of Competition Among Rivals
Bharti Airtel has strong rivals in telecommunication sector of India like BSNL and Vodafone.
Initially, it had only two competitors but now this figure has jumped to more than ten. All these
companies are providing similar services with the same capabilities. Although it has enhanced its
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investment in last few years and working hard to expand its network yet the presence of strong
competitors is a major threat for its successful survival. The detail data are available in the first
section.
2. Bargaining Powe r of Buyer
Although subscribers are not concentrated, not purchase in bulk but still can easily switch for
better quality, coverage and rates. In this context subscribers position is strong. Bharti is the
leading operator in Access segment in terms of number of subscribers. However, in term of net
additions during the quarter, Idea recorded the highest growth of 7.66 million, followed by
Bharti (6.29 million) and Vodafone (4.88 million).
3. Threats from Substitutes

Presence and easy availability of substituted products is a great threat for the successful survival
of any organization since it can enforce the company to cut the price of its product. The growth
rate of reliance is more than Bharti and that of Vodafone is almost comparable to Bharti as
shown in table 1.
4. Potential Entry of New Competitors
Since current telecom technologies involve heavy capital investment so chances of success for
new entrants are very limited. Still it is seen that few new entrant like Idea is growing very
rapidly and the growth rate is much higher than the top service providers.
5. Bargaining Powe r of Suppliers
As far as the suppliers are concerned, the pros and cons to all service providers are equal that
may be in human resource or products.
The conclusion from the analysis is shown in tabulated form (Table 2).
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Table 2
Forces
Intensity of competitons
High
Bergaining power of buyers

Threats from substitutes
Medium Low
Threats from new entrants
Forces
V.
Conclusion
So far very little analysis is done on telecom sector using Porter five forces model. Analysis
indicates that although to meet competition the top service provider is struggling hard but the
presence of strong rivals has put a challenge. From above discussion, we may conclude that the
presence of rivals is the main area that needs companys management serious attention.
Company may follow the strategy of horizontal integration by taking the decision of merger or
acquisition with any of its one or two rivals. The leader should offer special packages for
students / education sector since they are the main service users.
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3.5 PESTEL Analysis of Telecom Industry

A management technique that enables an analysis of four external factors that may impact the
performance of the organization. These factors are: Political, Economic, Social, and
Technological.
1. Political Factors
India is politically very unstable, whenever the government changes, its policies are also changed
and that hampers the functioning of every business sector, so is the telecom sector affected.
1. National Telecom Policy 1994
In 1994, the Government announced the National Telecom Policy which defined certain
important objectives, including availability of telephone on demand, provision of world class
services at reasonable prices, improving Indias competitiveness in global market and promoting
exports, attractive FDI and stimulating domestic investment, ensuring Indias emergence as
major manufacturing / export base of telecom equipment and universal availability of basic
telecom services to all villages. It also announced a series of specific targets to be achieved by
1997
2. New Telecom Policy 1999
The most important milestone and instrument of telecom reforms in India is the New
TelecomPolicy 1999. The New Telecom Policy, 1999 was approved on 26th March 1999, to
become effective from 1st April 1999. NTP-99 laid down a clear roadmap for future reforms,
contemplating the opening up of all the segments of the telecom sector for private sector
participation. It clearly recognized the need for strengthening the regulatory regime as well as
restructuring the departmental telecom services to that of a public sector corporation so as to
separate the licensing and policy functions of the Government from that of being an operator. It
also recognized the need for resolving the prevailing problems faced by the operators so as to
restore their confidence and improve the investment climate.
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Key features of the NTP 99 include
Strengthening of Regulator.
National long distance services opened to private operators.
International Long Distance Services opened to private sectors.
Private telecom operators licensed on a revenue sharing basis, plus a one-time entry fee.
Resolution of problems of existing operators envisaged.
Direct interconnectivity and sharing of network with other telecom operators within the
service area was permitted.
Department of Telecommunication Services (DTS) corporatized in 2000.
Spectrum Management made transparent and more efficient.
3. Telecom Regulatory Authority of India (TRAI)
The entry of private service providers brought with it the inevitable need for independent
regulation. The Telecom Regulatory Authority of India (TRAI) was, thus, established with effect
from 20th February 1997 by an Act of Parliament, called the Telecom Regulatory Authority of
India Act, 1997, to regulate telecom services, including fixation/revision of tariffs for telecom
services which were earlier vested in the Central Government.
TRAIs mission is to create and nurture conditions for growth of telecommunications in the
country in manner and at a pace, which will enable India to play a leading role in emerging
global information society. One of the main objectives of TRAI is to provide a fair and
transparent policy environment, which promotes a level playing field and facilitates fair
competition. In pursuance of above objective TRAI has issued from time to time a large number
of regulations, orders and directives to deal with issues coming before it and provided the
required direction to the evolution of Indian telecom market from a Government owned
monopoly to a multi operator multi service open competitive market. The directions, orders and
regulations issued cover a wide range of subjects including tariff, interconnection and quality of
service as well as governance of the Authority.
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The TRAI Act was amended by an ordinance, effective from 24 January 2000, establishing a
Telecommunications Dispute Settlement and Appellate Tribunal (TDSAT) to take over the
adjudicatory and disputes functions from TRAI. TDSAT was set up to adjudicate any dispute
between a licensor and a licensee, between two or more service providers, between a service
provider and a group of consumers, and to hear and dispose of appeals against any direction,
decision or order of TRAI.
4. Wars and Conflicts
The country is presently peaceful and in coming future their is no chance of any war in the
country ,so investing in the india is quiet good and meaningful .
Regarding conflicts the country is having internal political conflict , which in result are little bit
harmful for investing as government stability is not very strong.
2. Economic Factors
1. Economy situation
GDP -$1876.80 billion (2014)
GDP growth 1.2%
Inflation 5.52% (October 2014)
The Indian economy is growing at normal rate , and most important the population of India the
mostly youth , so entering in the Indian market will be a good sign of investment , the
government of India is putting good effort in encouraging the FDI in the country by providing
tax benefits.
2. Economy Trends
The continuing dominance of youth - Youngsters are different from oldies in a hundred ways,
and anyone can make a long list of the differences. How this will affect Indian society cannot
really be predicted, except to say that it will be more mobile (think more migrants), and more
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volatile (stronger responses to frustrations-- one manifestation being the spread of extremist Left
ideology in some 60 districts).
It will adapt faster to new trends, and marketers will be encouraged to focus on low-cost
products and services because youngsters usually have less money. It will probably mean that the
two-parent home (for nurturing children) will remain the predominant norm for long, and that
there will be a strong saving habit because families will be planning (among other things) for
their children's educational future.
India's increasing openness to the world - The foreign trade component of India's GDP (if we
include trade in both goods and services, like software) is now about 55 per cent -- nearly three
times what it used to be. Foreign institutional investors own about 25 per cent of India's listed
stock. And Indian firms were buying three overseas companies a week, through 2006.
A country that is open to the world reacts in fundamentally different ways from a closed system
(of the kind that India used to be).
There is greater self-confidence, faster acceptance of new influences and ideas, a willingness to
accept global benchmarking, and a speedier response to changing circumstance. It is simply a
more adaptive and therefore a more efficient system. Translate that to mean more productivity
growth.
The growth of the middle class- In 2013-14, the National Council for Applied Economic
Research forecasts it will be 200 million. Marry that with growing urbanisation, and it is a safe
guess that well over a third of all Lok Sabha constituencies will have a sizeable middle class and
urban voter base. Think, then, of the many changes this might bring about. The obvious point is
about growth of consumption, but we can go beyond that.
The spread of connectivity and awareness- A country that has 5 million phones and another with
180 million; between a country with 10 million TV sets and one with 120 million; between a
country whose trucks move at 25 km per hour on the highways (counting the time taken for
stops), and 50 km per hour.
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3. Taxation s pecific to product/services

In Basic, Cellular Mobile, Paging and Value Added Service, and Global Mobile Personal
Communications by Satellite, Composite FDI permitted is 80% (49% under automatic route)
subject to grant of license from Department of Telecommunications subject to security and
license conditions
FDI up to 80% (49% under automatic route) is also permitted for the following:
Radio Paging Service
Internet Service Providers (ISP's)
FDI up to 100% permitted in respect of the following telecom services: -
Infrastructure Providers providing dark fibre (IP Category I);
Electronic Mail; and
Voice Mail
In telecom manufacturing sector 100% FDI is permitted under automatic route.
4. Investment Opportunities and Incentives
An attractive trade and investment policy and lucrative incentives for foreign collaborations have
made India one of the worlds most attractive markets for the telecom equipment suppliers and
service providers.
No industrial license required for setting up manufacturing units for telecom equipment.
Automatic approval of 100 percent foreign equity, technology fee up to US $ 2 million, royalty
up to 5 percent for domestic sales and 8 percent for exports in telecom manufacturing projects.
Foreign equity of 80% (49 % under automatic route) permitted for telecom services - basic,
cellular mobile, paging, value added services, NLD, ILD, ISPs - and global mobile personal
communications by satellite.
Full reparability of dividend income and capital invested in the telecom sector.
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3. Social Factors
1. Age distribution:
The telecom industry in India like Vodafone, Airtel, Idea etc are selling their products according
to various age distribution basis. They make the schemes available to youngsters with low call
rates and messages schemeFor adults if we see make call rates low in std section.
2. Change in tastes and preferences :
As we know price war is going on so the customer can shift over to next brand which cost less
to him so the company has to go according to the needs and preferences of the customer.
3. Social welfare :
Many companies are doing social welfare and taking initiatives for that we can examine the
latest e.g. of idea cellular co. For example on 26 Nov 2009 that it collected money for the victims
of 26/11 attack by the subscribers of idea when any call was made.
4. .Cons umer buying patterns :
The buying behaviour of the customers in India is changing , the customers are shifting to buy
the new products and service according the offers and schemes available to them.
4. Technological Factors
1. Replacement Technology
Technology in India is replacing very fast with change in time, as the economy is growing the
technology is also, so the company bringing new technology will be very successful.
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2. Research funding
Govt is providing various tax benefits and subsidies to the players which are in research and
development fields of telecom sector , the govt has also open various research institutes where
the research is done with the collaboration of various private research companies .
Telecommunications companies with 3G services will no longer be allowed to avail of tax breaks
found under Section 80 IA of the Income Tax Act.
The tax breaks under Section 80 IA are given to companies building infrastructure. In the
telecommunications sector, companies can choose a 10 year period out of the first 15 years of
operations to qualify for the tax benefits.
Companies can choose to avail of a 100 percent exemption on taxable profit in its first five years
and a 30 percent exemption for the next five years.
3. Innovation potential
Innovations potential in India for technology is very high as the internet and broadband and 3G
and 4G services are still niche so coming in India is very profitable.
5. Legal Factors
Until 1985, the Indian Telegraph Act of 1885 and the Wireless Telegraph Act of 1932 provided
the legal basis for the central government's telecommunications monopoly. Under these laws,
posts and telecommunications were combined in one P&T department run by the Ministry of
Communications. In the late 1970s and early 1980s protests against poor service by subscribers,
politicians, industrialists, and business leaders coincided with global and national pressure for
liberalization. As a result, a parliamentary committee was established in 1981, which
recommended numerous structural and service improvements.
A separate Department of Telecommunications (DoT) was established in 1985, under the
Ministry of Communications and two supposedly public sector undertakings (PSUs)(VSNL and
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MTNL) were created to expand, develop, and manage crucial segments of the Indian
telecommunications system.
The National Telecom Policy (NTP) of 1994 provided the basis for liberalizing the
telecommunication market. It recognized the importance of liberalization and private sector
participation as key elements of economic development. With the entry of private sector in the
provision of telecommunication services a need was felt to have an independent regulatory body.
The above requirement was indicated in the guidelines issued for entry of private sector in basic
telecom service. Accordingly, Telecom Regulatory Authority of India (TRAI) was established in
the year 1997 in pursuance of TRAI (Ordinance) 1997, which was later replaced by an Act of
Parliament, to regulate the telecommunication services. Legal framework of telecom in India is
supported by TRAI (Telecom Regulatory Authority of India), having purpose of Independent
regulator to control telecom industry.
India continues to be one of the fastest growing telecom markets in the world. Reforms
introduced by successive Indian governments over the last decade have dramatically changed the
nature of telecommunications in the country.
6. Ecological Factors
In present scenario, telecommunication services are widely used all over the world. People
extensively use telephone services, internet services and many more. Initially, there were wired
phones which are not hazardous to our health and also to the environment. Now, more than 80
million people use pocket-sized cellular phones as a principal form of communication and many
researches proved that these smaller phones, with their smaller antenna, increase exposure to
microwaves and pose a potential health threat to the frequent user.
Wireless Technology Research (WTR), formed by the Cellular Telecommunications Industry
Association (CTIA) to research the effects of cellular phones, has indicated several health
problems traceable to radiation exposure due to phone use like many cases of people suffering
from brain tumour, memory loss, and genetic damage in human blood. A recent study indicated
that the number of immune cancer cells doubled in mice exposed to microwaves.
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Cognitive effects: A 2013 study examined the effects of exposure to radiation emitted by
standard GSM cell phones on the cognitive functions of humans. The study confirmed the
existence of an effect of exposure on response times to a spatial working memory task, as well as
the fact that exposure duration may play a role in producing detectable effects on performance.
Health hazards of base stations: Another area of concern is the radiation emitted by the fixed
infrastructure used in mobile telephony, such as base stations and their antennas, which provide
the link to and from mobile phones. This is because, in contrast to mobile handsets, it is emitted
continuously and is more powerful at close quarters. Base station emissions must comply with
safety guidelines. Several surveys have found increases of symptoms depending upon proximity
to electromagnetic sources such as mobile phone base stations.
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3.6 OT Analysis
A Scan of the internal and external environment is an important part of the strategic planning
process. Environmental factors internal to the firm usually can be classified as strengths (S)or
Weaknesses (w), and those external to the firm can be classified as opportunities (O)or threats
(T). Such an analysis of the strategic environment is referred to as a SWOT analysis.
The SWOT analysis provides information that is helpful in matching the firms resources and
capabilities to the competitive environment in which it operates. As such, it is instrumental in
strategy formulation and selection. The following diagram shows how a OT analysis fits into an
environmental scan:
Opportunity
Population
: The population of India is really an opportunity of telecom service
providers, as the number of population without telecom service is also very high. The
industry has to target India's huge population to grow.
Changing Population Psychograph : population psychograph is also changing
previously telecom service was thought as an emergency service, now it has become an
essential part of life in our country.
Increased Penetration Level: All the organizations of the industry are trying to increase
their penetration level, in other word to increase the tele-density of the country. The
urban Indian population gives a real growth prospect to the industry.
FDI : The foreign direct investment in telecom has been hiked up from 49% to 74%. This
move is positive for the sector, as it requires investments of Rs 700- 900 million over the
next 5 years. FDI inflow by 2004 was 9950.94 cores in telecom. Countries like Europe,
Korea, and Japan telecom are likely to enter India, as India is seen as fastest growing
telecom market in world.
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Threats
The threats to the industry are the following :
Government Policies - Government may provide licenses to many foreign operators,
which may already have pose a threat for the existing players in the industry.
New Technology can the Potential of changing the entire industry dynamics or even
create substitute of the telecom services existing.
Some of the examples are follows.

VOIP( Skype, Messenger etc.)
Online chat
Email
Satellite phones
To summarize the SWOT analysis we can draw the following framework for telecom
industry:
Figure: 3.1
OPPORTUNITY
THREATS
Population
Cnanging Population psychograpy
Increased penetration level
Increasing fiow of FDI
Government policies-licenses to many

foreign operators
New Technology can change the market
dynamics
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3.7 The Porters Diamond Model

The Method developed by porter analyzes four different dynamics of a nation. The four different
determinants of the system are plotted as a diamond in Figure below:
Figure: 3.2
Firm Strategy, Structure

and Rivalry
Chance
Factor Conditions
Demand Conditions
Related and Supporting

Industries
Government
Figure -Porter Diamond Model

As Analysis of the Indian Telecom industry under the porters Diamond model reveals that India
offers a competitive advantage for firms operating in the country.
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Firm Strategy, Structure, and Rivalry:

Intensive competition in the country has made it possible for service providers to offer
the service with lowest fare in the world profitably.
Many new handsets have been launched.
Factors Conditions:
Presence of skilled labour pool.
Rapidly developing incomes of consumers.
Increasing disposable incomes of consumers.
Increasing demand due to changing lifestyles and growing attraction for mobiles with
new features.
Related supporting Industries:

Competent handset manufacturer have produces the lowest priced handset for the Indian
market.
Handset players are setting up manufacturing bases in India
for better operation
management.
Many telecom equipment & Software companies are based in India.
Various value added service providers and content developers are present in India.
Demand Conditions:
India has a large middle class of 300 million.
Growing affordability and lifetime free schemes have created a market at the bottom of
the pyramid.
Low tele density (-18%) offers huge future potential.
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Governments:
The government extends full support to industry through reform processing.

Policies are in place to safeguard the interests of service providers as well as those of
consumers.
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3.8 7 Ps Service Marketing

Following are the 7 ps of Services Marketing
1. Product / services
There is little difference between product and service, when a customer buys a physical product,
he can feel it, see it has tangible aspect whereas services have intangible aspect, a customer can
only benefit from the service only as it has performed by services provider such as operating a
patient consulting a lawyer, getting advise from tax advisor.
Vodafone, the mobile service brand of Vodafone Essar, has emerged as the ''Most Admired
Mobile Service Brand Online'' in India followed by Tata Indicom and Aircel in an pan-India
survey conducted by Drizzlin Media. The survey shows that Reliance Mobile emerged as the
least admired brand.
The term ''DoCoMo'' is usually accompanied by a barrage of wild, high-end mobile hardware, so
we have a tendency to sit up and pay attention whenever the storied name appears on a carrier
anywhere in the world. India's Tata Teleservices of which NTT DOCOMOholds a 26 percent
share is set to launch a newly- branded GSM service as Tata DoCoMo in the southern part of the
country this month, followed by a ''gradual'' expansion nationwide. The logo's pretty awesome,
the name's pretty awesome now we just need some Japanese domestic market handsets to go
along with it and we' ll be in business.
2.Price
In determining the prices of services, the one characteristic, which has great impact is their
perish ability and the fact that fluctuation in demand cannot be met through inventory . Hotels
and Airlines and telecom sectors offer lower rates during off season and lower telephone charges
for outstation call after peak Hours are the example of how pricing can be used.
Price of the all companies are very affordable for the customer and it is as par customers demand
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A combination of a price war and a contentious proposal by the Telecom Regulatory Authority
of India, or TRAI, sent telecom stocks reeling. By the end of the week, shares of India's largest
telecom firm Bhatia Airtel LTD, Reliance communications Ltd and Idea Cellular Ltd had fallen
fall by 21.4% , 22% and 15%, respectively. The telecom regulator had recommended that persecond billing be made mandatory for mobile operators so users pay only by the second.
Following the adverse making reaction, Trai chairman J.S. Sharma clarified that the regulator
was considering making per-second billing one of the options that operators would have to offer,
and not only option. ''It's one of the ideas that is being worked upon. It's not as if any decision has
been taken.''
Tata Teleservices Ltd's Tata DoCoMo was the first operator to offer per-second billing
nationally. Vodafone EssarLtdlaunched a plan allowing users with a bonus card to call people in
neighbouring states but not in the same regional circle at 50 paise per minute. Idea, too, has also
highlighted a 50-paisa option as a key price point.
Reliance was the first service provider to offer a flat rate of 50 paisa for calls within India,
national roaming and text messages across networks on a minute' s worth of talk time.
Reliance' s stated objective is to offer a simple package to customers; but the new offer could be
a key card when number portability is launched.
3.Promotion
The fundamental difference which must be kept in mind while designing the promotion strategy
for services, is that customer rheas more on subjective impassions rather than concrete cvidence.
This is because of the inherent intangible nature of nature of services. Secondly, the customer is
likely to judge the quality of services on the actual services. Thirdly since it is difficult to sample
the services before paying for it, the customer finds it difficult to evaluate a product.
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Pamphlets,
Hoardings,
Newspaper,
magazines
4. Place
The most important decision element in the distribution strategy relates to the issue of location
of the services so 83 to attract the maximum number of customer such as those of Doctors,
teachers, consultant, machinist etc, poses distribution constraints since they are to serve only
limited and fractional markets.
5. People
people constitute an important dimension in the management of services in their role both as
performers of service and as customer. They must, therefore, be well informed and provide the
kinds or services that win customer approval. People as performance of services are important
because ''A customer sees a company through its employees. The employee represents the first
line of contact with the customer. The firm must recongnize that each employee is a salesman for
the company services''.
Daily telecom e- newsletter with telecom world information, serving you with daily top Indian &
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Telecom India Daily reaches out to Top professionals, decision makers, technocrats, engineers
associated with leading technology vendors, communications companies, infrastructure
Page | 64
providers, service providers, network integrators, telecom manufacturers and above all the
upcoming professionals - students, with a regular informative update on the latest developments
in the rapidly changing interactive media environment.
Highlights
An immense source of information and latest updates.
Keep employees up to date about the happenings in telecom.
Helping organizations to understand the ongoing business and improves the decision
power of people working within.
Information & data provided can be utilized to explore new areas. Stage for companies to
showcase their press releases.
Sales staff, marketing staff, corporate, students etc.
6. Physical Evidence
Clearness in doctors clinic, exterior appearances and interior decor of restaurant, the comfort of
the seating arrangement in a cinema hall, adequate facility for personal needs at the airport, all
contribute towards the image of the service and organization as perceived by the customer. The
common elements in these are that they all are physical, tangible and controllable aspects of a
service organization. They constitute physical evidence of the service Stores, logos
7.Process
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In service organization, the system by which you receive delivery of service constitutes the
process. In fast food outlets the press comprises buying coupons at one counter and picking up
the food against that at another counter.
Services can be described on the basis of types of process used in the delivery of the service.
The three kinds of deliver process that are applicable in case of service product are line
operation, Job shop type of operation is mere use full. Hospital, restaurants and educational
institutions usually have these types of delivery process. Intermittent operations are use full when
the types of service is rarely repeated, Firms offering consultancy for projects use this kind of
delivery system. Advertising agencies also use intermittent delivery system since each
advertising campaign requires a unique set of input factors.
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Chapter 4
Financial Analysis
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4.1 Financial analysis Introduction

Financial analysis (also referred to as financial statement analysis or accounting analysis or
Analysis of finance) refers to an assessment of the viability, stability and profitability of a
business, sub-business or project.
It is performed by professionals who prepare reports using ratios that make use of information
taken from financial statements and other reports. These reports are usually presented to top
management as one of their bases in making business decisions.
Continue or discontinue its main operation or part of its business;
Make or purchase certain materials in the manufacture of its product;
Acquire or rent/lease certain machineries and equipment in the production of its goods;
Issue stocks or negotiate for a bank loan to increase its working capital;
Make decisions regarding investing or lending capital;
Other decisions that allow management to make an informed selection on various

alternatives in the conduct of its business.
Goals
Financial analysts often assess the following elements of a firm:
1. Profitability - its ability to earn income and sustain growth in both the short- and long-term. A
company's degree of profitability is usually based on the income statement, which reports on the
company's results of operations;
2. Solvency - its ability to pay its obligation to creditors and other third parties in the long-term;
3. Liquidity - its ability to maintain positive cash flow, while satisfying immediate obligations;
Both 2 and 3 are based on the company's balance sheet, which indicates the financial condition
of a business as of a given point in time.
4. Stability - the firm's ability to remain in business in the long run, without having to sustain
significant losses in the conduct of its business. Assessing a company's stability requires the use
Page | 68
of the income statement and the balance sheet, as well as other financial and non- financial
indicators. Etc.
Method
Financial analysts often compare financial analysis (of solvency, profitability, growth, etc.):
Past Performance - Across historical time periods for the same firm (the last 5 years for
example),
Future Performance - Using historical figures and certain mathematical and statistical
techniques, including present and future values, this extrapolation method is the main
source of errors in financial analysis as past statistics can be poor predictors of future
prospects.
Comparative Performance - Comparison between similar firms.
4.2 Objective of financial analysis

Provide objective, actionable analysis to support informed Recommendations and decision
making by both the WTOP and Town management.
Assess the cash flow implications of a range of operating scenarios.
Provide tools to support the discussion of restoring the projects financial integrity so that
funds are available when the need for repair arises.
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Filtration :
Here we have done Filtrations for Financial Analysis. We have make this because we want some
standard Companies for Financial Analysis. So we got four Companies on the basis of filtration
criteria.
Step
1
2
Characteristics
Net Profit
EPS
Result
4
Above We have taken list of Companies on the basis of some companys characteristics. One is
net profit , among 35 companies we taken 10 companies which profit is above 100 cr. In 2013. In
which we got 6 companies.
Than after we have taken a earning per share as characteristics in which we got other final four
company which are taken for further financial Analysis.
Table : List of Company
No.
Name of Company
Vodaphone South
TATA Telecommunication
Hexacommunication
Bharti Airtel
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4.3 Ratio analysis

A ratio is a relationship between two numbers of the same kind] (e.g., object, persons, students,
spoonfuls, units of whatever identical dimension), expressed as "a to b" or a:b, sometimes
expressed arithmetically as a dimensionless quotient of the two that explicitly indicates how
many times the first number contains the second (not necessarily an integer).
Importance of Ratio Analysis

Importance of Ratio Analysis for financial analysis. Managementparadise.com is bringing some
of the tool for financial analysis and report. Understand the term of Ratio Analysis steps and
process.
The ratio analysis is the most important tools of financial analysis. The various groups of people
having different interest are interested in analyzing the financial information.
These groups use the analysis to determine particular financial characteristics of which they are
interested. The importance of ratio analysis can be summarized for various groups of peoples
vested with the diversified interests are as under:
1. For short term creditors The short term creditors like bankers and suppliers of materials can
determine the firms ability to meet its current obligation with the help of liquidity ratio and
quick ratio.
2. For long term creditors The long term creditors like debenture holders and financial
institutions can determine the firms long term financial strength and survival with the help of
leverage or capital structure ratio as debt equity ratio.
They can know :
a) what sources of long term are employed?
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b) What is the relationship between various sources of finances?
c) Is there any risk to the solvency of the firm due to the employment of excessive long term
debts?
3. For the management The management can determine the operating

efficiency with the firm is utilizing its various in generating the sales revenues with the help of
activity ratio such as capital turnover ratio, stock turnover ratio, etc
4. For investors The investor can determine the magnitude and direction of the movements in
firms earning with the help of profitability ratio such as earning per share etc
4.3.1 Debt Equity Ratio

Debt-to-Equity ratio is the ratio of total liabilities of a business to its shareholders' equity. It is a
leverage ratio and it measures the degree to which the assets of the business are financed by the
debts and the shareholders' equity of a business.
Analysis
Lower values of debt-to-equity ratio are favorable indicating less risk. Higher debt-to-equity
ratio is unfavorable because it means that the business relies more on external lenders thus it is at
higher risk, especially at higher interest rates. A debt-to-equity ratio of 1.00 means that half of
the assets of a business are financed by debts and half by shareholders' equity. A value higher
than 1.00 means that more assets are financed by debt that those financed by money of
shareholders' and vice versa.
An increasing trend in of debt-to-equity ratio is also alarming because it means that the
percentage of assets of a business which are financed by the debts is increasing.
Page | 72
Name of Company
Year
2011
2012
2013
Vodafone South
0.61
0.71
0.64
TATA Communication
0.63
0.67
0.79
Hexa communication
0.50
0.71
0.37
Bharti Airtel
0.43
1.17
0.35
Total
2.17
3.26
2.15
Industry total
0.54
0.82
0.53
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
2011
2012
2013
(Debt to equity ratio)
Significance and interpretation:

A ratio of 1 or 1 : 1 means that creditors and stockholders equally contribute to the assets of the
business.
A less than 1 ratio indicates that the portion of assets provided by stockholders is greater than the
portion of assets provided by creditors and a greater than 1 ratio indicates that the portion of
assets provided by creditors is greater than the portion of assets provided by stockholders.
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Creditors usually like a low debt to equity ratio because a low ratio (less than 1) is the indication
of greater protection to their money. But stockholders like to get benefit from the funds provided
by the creditors therefore they would like a high debt to equity ratio.
Debt equity ratio vary from industry to industry. Different norms have been developed for
different industries. A ratio that is ideal for one industry may be worrisome for another industry.
A ratio of 1 : 1 is normally considered satisfactory for most of the companies.
4.3.2 Curre nt Ratio

Curre nt ratio, also known as liquidity ratio and working capital ratio, shows the proportion of
current assets of a business in relation to its current liabilities.
Current ratio expresses the extent to which the current liabilities of a business (i.e. liabilities due
to be settled within 12 months) are covered by its current assets (i.e. assets expected to be
realized within 12 months). A current ratio of 2 would mean that current assets are sufficient to
cover for twice the amount of a company's short term liabilities.
Inte rpretation & Analysis
Current ratio is a measure of liquidity of a company at a certain date. It must be analyzed in the
context of the industry the company primarily relates to. The underlying trend of the ratio must
also be monitored over a period of time.
Generally, companies would aim to maintain a current ratio of at least 1 to ensure that the value
of their current assets cover at least the amount of their short term obligations. However, a
current ratio of greater than 1 provides additional cushion against unforeseeable contingencies
that may arise in the short term.
Businesses must analyze their working capital requirements and the level of risk they are willing
to accept when determining the target current ratio for their organization. A current ratio that is
higher than industry standards may suggest inefficient use of the resources tied up in working
capital of the organization that may instead be put into more profitable uses elsewhere.
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Conversely, a current ratio that is lower than industry norms may be a risky strategy that could
entail liquidity problems for the company.
Current ratio must be analyzed over a period of time. Increase in current ratio over a period of
time may suggest improved liquidity of the company or a more conservative approach to
working capital management. A decreasing trend in the current ratio may suggest a deteriorating
liquidity position of the business or a leaner working capital cycle of the company through the
adoption of more efficient management practices. Time period analyses of the current ratio must
also consider seasonal fluctuations.
Name of Company
Year
2011
2012
2013
Vodaphone South
0.61
0.71
0.64
TATA Communication
0.63
0.67
0.79
Hexacommunication
0.50
0.71
0.37
Bharti Airtel
0.43
1.17
0.35
Total
2.17
3.26
2.15
Industry total
0.54
0.82
0.53
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0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
2011
2012
2013
(Current ratio)
Industry standards
Current ratio must be analyzed in the context of the norms of a particular industry. What may be
considered normal in one industry may not be considered likewise in another sector.
Traditional manufacturing industries require significant working capital investment in inventory,
trade debtors, cash, etc, and therefore companies operating in such industries may reasonably be
expected to have current ratios of 2 or more.
However, with the advent of just in time management techniques, modern manufacturing
companies have managed to reduce the size of buffer inventory thereby leading to significant
reduction in working capital investment and hence lower current ratios.
In some industries, current ratio of lower than 1 might also be considered acceptable. This is
especially true of the retail sector which is dominated by giants such as Wal-Mart and Tesco.
This primarily stems from the fact that such retailers are able to negotiate long credit periods
with suppliers while offering little credit to customers leading to higher trade payables as
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compared with trade receivables. Such retailers are also able to keep their own inventory
volumes to minimum through efficient supply chain management.
Importance
Current ratio is the primary measure of a company's liquidity. Minimum levels of current ratio
are often defined in loan covenants to protect the interest of the lenders in the event of
deteriorating financial position of the borrowers. Financial regulations of various countries also
impose restrictions on financial institutions to lend credit facilities to potential borrowers that
have a current ratio which is lower than the defined limits.
4.3.3 Net Profit Margin

Net profit ratio (NP ratio) is a popular profitability ratio that shows relationship between net
profit after tax and net sales. It is computed by dividing the net profit (after tax) by net sales.
Formula:
For the purpose of this ratio, net profit is equal to gross profit minus operating expenses and
income tax. All non-operating revenues and expenses are not taken into account because the
purpose of this ratio is to evaluate the profitability of the business from its primary operations.
Examples of non-operating revenues include interest on investments and income from sale of
fixed assets. Examples of non-operating expenses include interest on loan and loss on sale of
assets.
The relationship between net profit and net sales may also be expressed in percentage form.
When it is shown in percentage form, it is known as net profit margin. The formula of net profit
margin is written as follows:
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Name of Company
Year
2011
2012
2013
Vodafone South
7.51
12.06
13.97
TATA Communication
6.47
14.87
18.35
Hexa communication
22.52
22.65
22.04
Bharti Airtel
16.72
14.23
16.78
Total
53.22
63.81
71.14
Industry total
13.305
15.95
17.785
20
18
16
14
12
10
8
6
4
2
0
2011
2012
2013
(Net profit margin)
Significance and Interpretation:

Net profit (NP) ratio is a useful tool to measure the overall profitability of the business. A high
ratio indicates the efficient management of the affairs of business.
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There is no norm to interpret this ratio. To see whether the business is constantly improving its
profitability or not, the analyst should compare the ratio with the previous years ratio, the
industrys average and the budgeted net profit ratio.
The use of net profit ratio in conjunction with the assets turnover ratio helps in ascertaining how
profitably the assets have been used during the period.
4.3.4 Average Collection Period

Average collection period is computed by dividing the number of working days for a given
period (usually an accounting year) by receivables turnover ratio. It is expressed in days and is
an indication of the quality of receivables.
The formula is given below:
Name of Company
Year
2011
2012
2013
Vodafone South
1.21
0.90
0.66
TATA Communication
0.43
0.42
0.53
Hexa communication
3.07
4.71
3.57
Bharti Airtel
0.17
0.16
0.16
Total
4.88
6.19
4.92
Industry total
1.22
1.5475
1.23
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1.8
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
2011
2012
2013
(Average collection ratio)
Significance and Interpretation:

Like receivables turnover ratio, average collection period is of significant importance when used
in conjunction with liquidity ratios.
A short collection period means prompt collection and better management of receivables. A
longer collection period may negatively effect the short-term debt paying ability of the business
in the eyes of analysts.
Whether a collection period is good or bad, depends on the credit terms allowed by the company.
For example, if the average collection period of a company is 50 days and the company allows
credit terms of 40 days then the average collection period is worrisome. On the other hand, if the
companys credit terms are 60 days then the average collection period of 50 days would be
considered very good.
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4.3.5 Trend Analysis :

Business owners look for trends, or patterns, that can alert them to future performance
opportunities or problems. For example, even though this years total sales revenues might be the
same as last years, you might spot a growing trend of selling more low- margin items than the
previous year. This can result in lower profits even if you have the same revenues. Spotting this
trend early can help you take steps to address it, such as raising prices, cutting costs or spending
more marketing communications dollars promoting higher- margin items. If a particular product
has declining sales, you might change it or drop it from your line. If fewer and fewer men are
buying
your
product,
you
might
shift
your
focus
to
marketing
to
women.

Name of Comoany
Year
2011
2012
2013
Vodaphone South
6277.33
11512.4
12736.7
TATA Communication
3611.77
4091.77
4416.12
Hexacommunication
2943.45
3379.1
3666.1
Bharti Airtel
38017.7
41603.8
45350.9
Total
50850.25
60587.07
66169.82
Industry total
12712.56
15146.76
16542.45
Graph : Sales Trend Analysis
20000
15000
10000
5000
0
2011
2012
2013
Page | 81
Inte rpretation:
You may see here that Four companys average making sales avg. which is goes up in graph. It is
indicating that from 2011 to 2013 sales going up which means there is nothing any problem in
sales nd thats why profit margin also goes up. The reason is that internet user are become
increase day to day and Bharti Airtel have make less in charges in phone calls.
Expenses
Name of Company
Year
2011
2012
2013
Vodafone South
6315.94
8462.4
9241.4
TATA Communication
2780.9
3103.8
3447.18
Hexa communication
2029.72
2257.6
2555.7
Bharti Airtel
24677.4
27960.1
31880.2
Total
35803.96
41783.9
47124.48
Industry total
8950.99
10445.95
11781.12
Graph : Expenditure Trend Analysis
14000
12000
10000
8000
6000
4000
2000
0
2011
2012
2013
Inte rpretation
You may see hare that Expenditure trend is going on increase due to sale also goes up. Expenses
are goes up from 8950.99 in 2011 to 31880.2 in 2013. Airtel Having a high charges of internet
package than vodaphone which is more costly call rate company.
Page | 82
Chapter 5
Business Plan
Page | 83
Executive Summary
Uninor Cellular Providers is taking advantage of an opportunity to become a highly
distinguished and recognized industry leader in the cellular communications industry. It is the
goal of our company to become established as the leading distributor of wireless
communications services.
In order to achieve this goal, Cellular Providers' critical success factors will be to identify
emerging trends and integrate them into Cellular Providers' operations, respond quickly to
technology changes/be there early, provide high-quality services, continue to invest time and
money in marketing and advertising, continue to expand into specialty markets, and stay ahead
of the "technology curve."
Uninor services are commercially available in 6 circles, covering a population footprint of 600
million people. Uninor serves more than 3 crore customers in the states of Uttar Pradesh,
Uttarkhand, Bihar, Jharkhand, Maharashtra, Goa, Gujarat and Andhra Pradesh. The mobile
service provider targets youth and other communities within the Indian mass market. In recent
Spectrum auctions Uninor secured fresh spectrum in 4 of its existing circles and in a new circle
of Assam.
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5.1 Company Introduction

Telewings Communications (operating under the brand name Uninor), is an Indian mobile
network operator based in Gurgaon, Haryana, India. The company is a subsidiary of Telenor
Group, a telecommunications company headquartered in Oslo, Norway, and Telenor now owns
100% of the stake in Telewings Communications.
Telewings offers mobile voice and data services based on the GSM technology, on 5 MHz
spectrum. Uninor services are commercially available in 6 circles, covering a population
footprint of 600 million people. Uninor serves more than 3 crore customers in the states of Uttar
Pradesh, Uttarkhand, Bihar, Jharkhand, Maharashtra, Goa, Gujarat and Andhra Pradesh. The
mobile service provider targets youth and other communities within the Indian mass market. In
recent Spectrum auctions Uninor secured fresh spectrum in 4 of its existing circles and in a new
circle of Assam.
Spectrum acquired by Uninor in the 1800Mhz band UP East 1.8 MHz UP West 2.0 MHz
Bihar and Jharkhand 2.2 MHz Andhra Pradesh 1.4 MHz Assam 6.0 MHz
Objectives
-
Capture the market through provide innovative product in telecom segment.
To achieve higher level of satisfaction through quality telecom.
To achieve high market share in telecom segment.
Vision
Empower societies we provide the power of digital communication, enabling everyone to
improve their lives, build societies and secure a better future for all.
Our vision to empower societies is a clear call to action. We bring vital infrastructure,
new services and products that stimulate progress, change and improvement.
Mission
Were here to help our customers We exist to help our customers get the full benefit of
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being connected. Our success is measured by how passionately they accept us and make
us a part of their life.
5.2
Company Description
Type
Industry
Founded
Headquarters
Key people
Services
Owners
Employees
Parent
Website
private
Telecommunications
2009
Gurgaon, India
Jon Fredrik Baksaas (No minated CEO)
Mobile telephony Wireless internet
Jon Fredrik Baksaas
1,600
Telenor Group
www.uninor.in
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5.3 Process for taking Franchise of Uninor

Step 1 : Centre sends LOI, signs MOU.
Centre submits following legal papers & certifications: Bank Statements for
last 6 months + IT Returns of 1 years)
Company Profile with Pictures of Existing Infrastructure.
Pan card Snapshot Required.
Step 2 : Centre is called to sign SLA with Uninor.
Step 3 : The guarantee approval and audit by Uninor.
Step 4 : Centre has to ensure that all that is mentioned in the company profile and
other legal papers & certification is true and correct.
Step 5 : Centre has to send LOI & sign MOU
Process Details :-
1. Per slot =25 seats.

2. Fixed Payout each form = INR 20.00.
3. workload= 4000 forms/ per seat/ per month.
4. 50% Advance payment for 2 months. (Direct payment transfer).
5. Royalty- 15% of monthly billing.
6. NO Accuracy Required.
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5.4 List of Documents required for Franchise
Partnership deed (MoA / AoA )
License from Govt. (shop registered under municipality)
Sales Tax number (TIN number)
PAN number for business
Gumasta-dhara certificate
Opening of bank account
Telephone/Fax connection (land line)
5.5 STP Analysis of UNINOR in Mehsana
Segments: Geographic, and demographic Wise urban and rural area and male as Well as
female.
Target groups: We are targeting young students middle class and lower class.
Positioning: We are set our positioning on the base of service quality and lower price
5.6 Government Policy
Rules & Regulation Established By Confederation Of Indian Industry

Action To Be Taken By Government For Telecom Industry
Improve infrastructure
Provide support for new technologies and establish technology up- gradation fund (TUF)
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Implement strengthening R&D
Set-up talent development infrastructure
Improve image of the industry
Consolidate acts into an Integrated telecom Legislation, simplify regulatory structure and
strengthen regulations
Rationalize taxes and duties
Develop Indias telecom inventory
5.7 Rules & Regulation for Telecom Industry

(A)Rules under Environme nt (Protection) Act, 1986
Manufacture, Storage and Import of Hazardous technology Rules, 1989, 2000
Telecom disaster (Emergency Planning, Preparedness and Response) Amendment Rules,

1996
Public Liability Insurance Act, 1991, 1992
(B)Health & Safety Related Laws & Regulations
Factories Act, 1948, 1987
Explosives Act, 1889
Petroleum Act, 1934, Rules, 1976
Motor Vehicle Act, 198
Requirements in case of Low Level techniques used
Identify hazards associated with industrial activity and take adequate steps for
Prevention and control
Provide relevant information to persons liable to be affected by a major accident
Develop information in the form of a safety data sheets
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Requirements in case of the Medium & High level techniques used
Submit written report regarding Notification of site at least three months before
commencing any activity using hazardous materials
Submit Safety Report at least 3 months before commencing activity
Requirements in case of the Medium & High level techniques used
Submit an up-to-date safety report at least ninety days before making any
modification
New and existing industrial activities to carry out safety auditand submit report within
30 days
Submit a safety audit update report once a year and forwarding a copy within 30 days
Prepare up-to-date on site emergency plan before commencing a new industrial

activity involving specified technology
5.8 Method of Distribution of UNINOR
UNINOR(Distribution Channel)
Distributor
Retailer
Consumer
Uninor actively uses an electronic Distribution Management System, which pulls in data
from various sources.
All field sales managers have a handheld device connected to a central database,
providing real-time updates on sales and inventory numbers.
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The Sales Tracking System ensures retailers do not run out of stock and are always
supplied with relevant products in real time.
When layered with geographical intelligence through an automatic system, it get an

accurate insight on the sales and revenue performance matched to every single base
station. This forms the core of every base station profitable mantra.
The Uninor system is built on distribution systems successfully deployed in Telenors

other Asian markets. With further tailoring and optimization in India, this system now
forms the model for other Telenor business units in the region.
5.9 Marketing & Sales promotion
Personal sales
Internet / Interactive Selling
Consumer oriented sales Promotion
High Rich in Rural & Urban
Demonstration
Free sample
profit oriented sales Promotion

-
Dealer incentive
Employee Allowance
TRAI recommendations to terms and conditions for unified license (access

services)
The Dot has recently finalized the draft unified license (access services) (UL (AS)) and requested
the TRAI to provide its recommendation on the terms and conditions of the draft UL(AS). The
TRAI released its recommendations on 'Terms and Conditions of Unified License (Access
Services)' on 2 January 2013 (UL Recommendations).
Page | 91
The key recommendations of the TRAI have been analyzed below.

Delinking Spectrum from License
TRAI has highlighted the change in the Government's policy with respect to the previous regime
where spectrum was linked to the Unified Access Service Licence (UASL). In the new regime
since spectrum has been delinked from the license and has to be obtained independently, TRAI
recommends that the terms and conditions relating to various spectrum bands should not be a
part of the UL (AS). Accordingly, for different bands of spectrum assigned, a separate Wireless
Operating License (WOL) should be entered into with the licensee. This means that there would
be two different licenses i.e. National level/Service Area level UL(AS) and WOL. This would
avoid the need of amending the license each time an operator gets spectrum in different bands.
Substantial Equity/Cross-Holding Requirement
The draft of the UL (AS) makes reference to the cross-holding restriction that prohibited any
shareholder from holding no more than 10% of the equity of any two telecom licensees in the
same telecom circle. TRAI has pointed out that under the new regime it would be possible for a
group company with national level licenses such as National Long Distance/International Long
Distance/Internet Service Provider licence to overlap with the service area UASL licenses of its
other group entities. The TRAI, had, in April 2012, recommended that restrictions on crossholding in more than one licensee company in the same service area should be applicable only if
they have been allocated spectrum. Since in the new regime, spectrum is delinked from the
license, TRAI recommends that substantial equity or cross-holding requirement should only be
linked to spectrum holding and should only be stated in the WOL agreement.
Promoter Lock- in
On a similar point, in relation to the condition that requires the licensee to obtain prior
permission of the DoT for the sale of equity within the lock in period, TRAI recommends that
this condition should be included in the WOL agreement, since the lock- in period requirement
aims to prevent promoters from making quick financial gains on the basis of spectrum. While
this clause may have been relevant in the context of spectrum bundled with the license, its
inclusion is no longer relevant in the license now that spectrum is separately auctioned and
Page | 92
delinked from the license. Since the value of spectrum is determined by way of a market driven
process, the M&A activities should not be deterred by way of lock- in restrictions, which
substantially hinders acquisitions in this sector.
Value Added Services
The UL Recommendations state that the licensee must be allowed to provide voice mail services,
audiotex services, videoconferencing, unified messaging services and other 'value added
services' over its network for subscribers in its service area, on a non-discriminatory basis. The
TRAI notes that the current scope of value added services is limited and seeks to expand it in line
with its recommendation issued previously. TRAI had in May 2012, defined 'value added
services' to mean enhanced no-core services, which either add value to basic tele services (such
as standard voice calls, voice/non-voice messages, fax and data transmission) or those that can be
provided as standalone application services through telecommunication network.
Tripartite agreement
The TRAI has recommended that the tripartite agreement which must be executed between
licensor, licensee and lenders (as one of the conditions for transfer or assignment of licence),
should be modified to include spectrum and that this requirement be prescribed in the WOL
agreement.
Performance Guarantee
TRAI has made specific recommendations on the performance bank guarantee (PBG) for (i)
compliance with conditions of the license agreement and (ii) PBG for roll-out obligations. With
respect to PBG of Rs. 10 (ten) Crores for compliance with conditions of the license agreement
and instructions of the DoT, the TRAI recommends that the condition must be deleted from the
license agreement and instead must be retained as a part of the WOL. With respect to PBG for
roll-out obligations, the TRAI recommends:
a. In respect of each of the service areas, except Delhi, Mumbai and Kolkata, PBG shall be
submitted for an amount of Rs. 14 (fourteen) Crores per service area. This PBG would be
valid for a minimum period of six (6) years, further extendable by two (2) years.
Page | 93
b. In case of Delhi, Mumbai and Kolkata PBG shall be submitted for an amount of Rs. 7
(seven) Crores per service area valid for a minimum period of two (2) years, further
extendable by two (2) years.
Penalties
The UL Recommendations state that the maximum financial penalty for major violations of
license terms and conditions should be reduced from Rs. 50 (fifty) Crores to Rs. 10 (ten) Crores,
a figure in proportion to the entry free, paid-up capital and net worth criteria of a licensee in each
service area. Currently, there are no stipulated guidelines on how the penalty should be imposed
and the DoT usually imposes with maximum penalties, even for minor violations.
TRAI has recommended that the penalty be levied on the basis of whether a violation is minor or
major and the recurrence of the violation. While the penalty prescribed is exclusive of the
liquidated damages prescribed in the license agreement, the UL Recommendations recommend
that the Dot must be given the right to cancel the license if a major violation is committed after
the fourth time.
Other Recommendations
The UL Recommendations have also suggested changes to the definition of Adjusted Gross
Revenue (AGR), in that intra-service area roaming revenues should not be excluded from Gross
Revenue for calculating the AGR of the service provider. Further, for levying spectrum charges,
it recommends that only the revenue from the wireless services must count towards AGR
calculation.
The TRAI has also suggested inclusion of two new clauses to the draft UL (AS). First clause
enables the TRAI to undertake regular spectrum audit for overlooking its efficient management.
The licensee will be required to provide relevant data, reports, test, equipment and other
accessories and permit inspection of its sites by TRAI personnel.
The second and the more important one suggests that the WOL must include a condition that
operators whose entire spectrum holding in a particular band (900MHz/ 1800MHz and 800MHz)
has been liberalized and must be permitted to share spectrum without any additional one-time
Page | 94
spectrum charge, subject to the guidelines issued by the Dot from time to time. However,
spectrum trading is not permitted at present.
5.10 Sources of Finance

A franchise might raise new funds from the following sources:
Bank State ment
balance standing to the credit of a depositor at a bank.
The bank balance is also known as the balance per bank or balance per bank statement
and it refers to the ending balance appearing on a bank statement
A bank is a financial intermediary that accepts deposits and channels those deposits
into lending activities, either directly by loaning or indirectly through capital markets.
Personal Savings
The rst place to look for money is your own savings or equity. Personal resources can include
prot-sharing or early retirement funds, real estate equity loans, or cash value insurance policies.
Friends and Relatives

Founders of a start-up business may look to private nancing sources such as parents or friends.
It may be in the form of equity nancing in which the friend or relative receives an ownership
interest in the business. However, these investments should be made with the same formality that
would be used with outside investors.
Page | 95
5.11 Price Plans

Local packs (Gujarat)
Uninors unbelievable local packs. Its talking time with Uninors amazing local plans
for Gujarat users. Now your city has got closer with Uninors unbelievable local plans so enjoy
talking with your near and dear ones.
MRP
Validity (day)
Key benefit
Rs.6
Rs.7
Rs.13
Rs.23
Rs.29
Rs.38
Rs.88
3
2
28
7
28
28
28
Rs.101
28
Rs.149
Rs.198
28
28
Rs.201
Rs.238
Rs.249
28
90
28
666 Sec for Local U2U & 666 Sec for Local U2O
Unlimited local U2U Calls Vaild for 2 Days
All Local calls @1.2p/2 sec
7000 sec Local U2U & 3000 sec Local U2O Valid for 7 Days
All Local calls @ 1p/2 sec for 28 days
30,000 Local U2U Secs for 28 days
Unlimited Local U2U Calls for 28 Days + 100 MB Data validity
1 Day
Unlimited Local U2U calls free;Local U2O calls @30p/min for
28 Days
26,000 Sec Local U2U and 24,000 Sec Local U2O for 28 Days
500 Minutes Local U2U and 500 Minutes Local U2O free for 28
Days and 100 MB data for 1 Day
900 All Local Mins
Unlimited Local U2U for 90 days
145,000 Sec Local U2U and 55,000 Sec Local U2O for 28 Days
Inte rnet package

MRP
Validity(days)
Benefits
Rs. 42
30
Unlimited WhatsApp & Facebook + 250 MB Data for 30 Days
RS. 9
45 MB Data for 2 days
Rs. 14
125 MB DATA for 3 Days
Rs. 25
250 MB Data for 6 Days
Rs. 27
30
1GB during 11 pm to 7 am
Rs. 47
14
500 MB Data for 14 Days
Rs. 125
28
1.5 GB Data Valid for 28 Days
Rs. 151
30
2 GB Data for 30 Days

Page | 96
SMS Pack
MRP
16
46
Validity(days)
28
28
Benefits
100 local and national SMS free
2,500 local + National SMS
Validity(days)
30
Benefits
America, Canada and U.K(landline)for 2ps/per seconds,
Bangladesh for 4ps/seconds, Nepal for 10ps/seconds,
Gulf country for 15ps/seconds.
ISD Pack
MRP
19
Page | 97
5.12 Cost of Project

Sr.no.
Particulars
Amount
Site on Rent
25000
Computer (23500*3)
70500
Furniture
50000
Machinery & Equipments (Zerox machine)
5000
Raw material expenses ( blank paper)
2000
Marketing and Sales Promotion Expenses
Staff Salary
head office ( experienced ) 1 * 15000
Computer operator
3 * 7500
Labor
1 * 2500
Other Expenses
Total
40000
10000
2,02,500
Cash on Hand
47500
Cost of project
2,50,000
Page | 98
5.13 Estimated Profit and Loss

Particular
Sales
Year (2014-15)
345000
Commission
6,900
Sim Recharge com.
13800
Total income
3,65,700
Expenditure
Salary
40,000
Electricity bill
6,000
Rent
25,000
Miscellnious exp.
10,000
Total Exp.
81,000
Net Profit
2,84,700
Page | 99
Chapter :6
Conclusion and Limitations
Page | 100
6.1 Challenges for Telecom Industry

The Challenges of the day is to search for new cost effective ways to roll out telecom services in
rural areas it means one has to choose proper and effective technology for deployment and
leverage on the use of available infrastructure to reduce cost and time of role out of services.
Those service providers who create the business would emerge wireless and the rest would
remain spectators.
Connectivity of network and cost of bandwidth are also important to facilitate broadband usage.
Availability of local application and content is another are of concern available on website as of
today is in English. The content in local and regional language will increase interest of the local
population in broadband utilization.
Wireless technology is the future growth driver for which spectrum is the most important input.
The task of spectrum management in a multi- user and multi usage scenario is more daunting and
crucial than ever before.
Page | 101
6.2 FINDINGS
New entrants can take advantage of gaps in the offerings of these aging pioneers, or find
innovation ways to market product or service.
Re-examining high levies: The Indian telecom sector is one of the highest taxed sectors in the
developing world, through levies, which comprise service tax, revenue share, spectrum cess, and
value added tax.
Bringing down operators capex: To expand the telecom services, there will be greater
investment needs in the future. Telco's will have to engage on active and passive infrastructure
sharing.
Rational policy for spectrum allocation: The allocation of adequate spectrum is an urgent
requirement for and existing operators. A clear roadmap for future spectrum allocation has to be
drawn, whether it is a 2G or a 3G platform. operators need to be cautious in 'bidding' and should
not overpay for spectrum as that could disturb project economics.
Data revenues to provide 'Buffer': India's data revolution is going to be fuelled by 3G and
WIMAX. For the data revolution to reach villages, low-cost access devices, vernacular content,
and community initiatives such as E-governance need to be in place.
Enhancing skill sets: The sector will require specialist resources to support and sustain growth
over the next four to five years. And pressure on talent is expected to increase with the
deployment of 3G and WiMAX services. The private sector will need to reorient its focus on
talent development through training schools and facilitation programs that cater to the needs of
the telecom industry.
Impact of global economic downturn:The current financial crisis could have a low-to-medium
impact on the telecom sector in terms of rising costs of capital and reduction in discretionary
spending on the part of customers, among other determinants.
Page | 102
6.3 LIMITATION
We have collected the secondary data where we cannot able to get exact information about the
telecommunication industry privilege in the market as based in past data and hence cannot be
reliable guide to future performance as future is dependent on other factors.
Page | 103
6.4 CONCLUSION
The technology improvement has helped the sector to perform better and has also expanded
the meaning of the term "telecommunication" from just audio message transformation to virtual
presence of person. the sector clearly shows a scope for future.
In our opinion, instead of taking a short-term view of paying capacity, the telecom companies
should focus on a long -term game. There is one word that telecom companies are hearing a lot
these days- "Volumes". They need volumes to sustain the network and the large employee base
they have enrolled. In this regard, companies like reliance is giving up to 30% commission on
each call. If and when the carrier access codes are introduced, there could be a tough fight among
these outlets, as far as prices are concerned. Yet, prices can go down further by almost 40% of
the present structure. Part of the same . The other part could be earning through volumes. New
players like Virgin Mobile, which already has international presence in close to 17 countries are
entering India. It is doing so in collaboration with Tata Tele services. The target market for
Virgin Mobile is the youth, which in India is around 54% of its population. Mobile
number portability (MNP) is to introduced by Jan 2011. A neutral third - party operator is
likely to be licensed to provide an end toned MNP solution. MNP could well better service
quality. There are challenges like porting time, allocation of capital and operational porting
costs among positive and will be set once the committee submits its final report on the
same.
The telecom sector is attracting significant domestic and global investment. The capital
investment made by the telecom service industry during 2006-07 was around $8.5 billion,
out of which $550 million was foreign direct investment. The margins and profits of
almost ail the telecom companies have been increasing .In fact there are cases where
significant portions of profit of international telecom companies have been from their
operations in India.
India is well prepared for the introduction of NGN (Next-Generation Networking). Being a late
starter in the telecom scenario, India has the advantage of using the latest technology and
so it is in a better position when compared to many other countries as far as introduction of
NGN is concerned. Besides, the TRAI has identified introduction of NGN as apriority area. As
Page | 104
of today seem favourable toward the continued growth of the telecom industry. The target of
500 million telephone connection by the year 2010 is very much achievable. Ever with 300
million telephone connection, the tele-density of the country is only about 26 percent. It has
been noted that mobile telephone is growing at an annual rate of over 90 percent. Also, on an
average over eight million subscribers are being added every month. Beside the basic telephone
service, there is a huge potential for different Value Added Service (VAS). In fact , the real
potential for telecom service growth is still lying untapped.
Page | 105
BIBLOGRAPHY
BOOKS:
Crafting & Education strategy for competitive advantage . In G a. Thomson. New

Delhi: Mack grow hill publication.
(2008,Ninth Edition ). Financial Management. In I.M. Pandey . New Delhi: Vikas

Publishing House Pvt. Ltd.
NEWS PAPER
1. Economies of time
2. Business standard
WEBSITES:
www.Wikipedia.org.(n.d).Retrieved 1123,2010, form
www.wikipedia.org:http://en.wikipedia.org/wiki/telecomm.ntml
www.2indya.com.(n.d.). Retrieved 11 09,2010, form www.2indya.com:

www.2indya.com/telecommunications- industry- in- india
www.ibef.org.(n.d.)Retrieved 125, 2010, form www. ibef.org:

www.ibef.org/industry/telecommunications.aspx
www.indiaonestop.com.(n.d.).Retrieved 115, 2010, from www.indiaonestop.com:

www.indiaonestop.com/fdi-telecom.htm
www.lexology.com/library/detail.aspx
www.trai.gov.in

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MICRO ANALYSIS OF INDIAN TELRCOMMUNICATION INDUSTRY

Management Research Project -I

Unde r the Guidance of:

CERTIFICATE BY THE GUIDE

PARMAR 13044311048),(LAXMI NALLABARIKI 13044311040) submitted to V. M. Patel Institute

Prof. (Dr.) Mahendra Sharma,

(BHARGAV VYAS 13044311145)

(DHAVAL CHAUHAN 13044311016)

(LAXMI NALLABARIKI 13044311040)

(BHARGAV VYAS 13044311145)

(DHAVAL CHAUHAN 13044311016)

(LAXMI NALLABARIKI 13044311040)

(BHARGAV VYAS 13044311145)

(DHAVAL CHAUHAN 13044311016)

(LAXMI NALLABARIKI 13044311040)

Telecom Regulatory Authority of India

Global System for Mobile Communication

Code Division Multiple Access

National Telecom Policy

National Long Distance

New Telecom Policy 1999

International Long Distance

Value Added Services

Department of Industrial Policy and Promotion

Foreign Direct Investment

Merger and Acquisition

Internet Service Providers

Voice Over Internet Protocol

Virtual Private Network

Bharat Sanchar Nigam Limited

American Depositary Shares

National Stock Exchange

Bombay Stock Exchange

New York Stock Exchange

Political, Economic, Social, Technological, Ecological, Legal Analysis

National Council of Applied Economic Research

Service Level Agreement

Next Generation Networking

Certificate by the Guide

Telecommunications Industry in India

History of Telecom Industry

Major sectors of Telecom Industry of india

1.3.2 Fixed Telephony

1.3.3 Mobile Telephony

Segments in Telecom Industry

Role in Indias Development

Current Structure of Indian Telecom Industry

Dominant feature of economic in Telecom Industry

1.7.1 Market size and Growth rate

1.7.2 Scope of competitive rivalry

1.7.3 Number of rivals

1.7.4 Technological Change

1.7.5 Vertical Integration

1.7.6 Product Innovation

Major Players of Industry

Analysis of Indian Telecom Industry

Strategic Group Mapping of Telecom Industry

Competitive Profile Matrix

External Factor Matrix

Porters Five Force Model

PESTEL Analysis of Telecom Industry

Porters Diamond Model

7Ps Service Marketing

4.3.1 Debt Equity Ratio