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Abhivaykti  2010  Page 1 

Dream, Believe, Achieve.














Abhivaykti  2010  Page 2 


If words are considered to be signs of gratitude then let these words convey the very
same our sincere gratitude to IDEA CELLULAR for giving necessary directions on doing
this project to the best of our abilities.

We are highly indebted to MR.VIVEK YADAV , sales manager postpaid who

provided us with the necessary information and also for the support extended out to us in the
completion of this report and his valuable suggestion and comments on bringing out this
report in the best way possible.

We also thank Indira Institute of Management, who has sincerely supported us with
the valuable insights into the completion of this project. We are grateful to all faculty
members of IIMP and our seniors who have helped us in the successful completion of this

Abhivaykti  2010  Page 3 

1. Macro analysis

¾ Sector history
¾ Current trends and technologies
¾ Market structure
¾ Organization structure
¾ Government policies
¾ Recent M and A’s
¾ Related terms to the sector

2. Micro analysis
¾ Company history and corporations associated with it
¾ Current position of company
¾ Financial analysis
¾ 7P’s of marketing
¾ HR policies
¾ Differentiation strategy
¾ CSR initiative taken by company
¾ Awards and significant event
¾ Career opportunity profile
¾ Conclusion and suggestion
¾ Bibliography

Abhivaykti  2010  Page 4 

Sector History 
Telecom reforms:

India has one of the largest numbers of mobile operators among the emerging
markets. Most of the domestic players have significant foreign investments. For
example, Telekom Malaysia owns around 40% stake in Spice Telecom, one of the
oldest mobile operators in India with approximately 4 million subscribers. Similarly,
Singaporean Sing Tel owns about 30% stake in Bharti Airtel, India's leading mobile

Telecommunication Reforms in India revolutionized the telecom industries sector in

India, which is an important factor for the growth of the Indian telecom sector and in
turn helped the Indian economy to perform well for the past few years.

The Telecommunication reforms in India were development and growth oriented.

Technological advancements and innovations contributed largely towards the
reformation of the telecom sector in India.

The sector of telecom was a monopoly under the Central Government of India.
During the 1990s this sector faced fierce challenges due to the development in the
technological sector.

The sector was privatized and with the abolition of the monopoly new player entered
the consumer market. The competition increased in the telecom sector, the rates were
slashed in order to grab the share of the market and the customers were provided with
better services.

The telecommunication reforms in India started in the eighties with the mission better
communication. This is regarded as the first phase of the reformation process. Several
private manufacturers of tailor made equipments entered the market. There were
private developer for indigenous technologies and the franchisee for STD/ISD and
PCO increased. The Videsh Sanchar Nigam Limited (VSNL) and Mahanagar

Abhivaykti  2010  Page 5 

Telephone Nigam Limited (MTNL) were set up under the Government of India's
Department of Telecommunication.

The second phase of telecommunication reforms in India came in the early nineties.
The introduction of the New Economic Policy (NEP) in the year 1991 was a landmark
in the history of telecom industry sector in India. The manufacturing of equipments
pertaining to telecom sector was decentralized and several value added services were
introduced into the market. The telecom services were divided into basic telephony,
radio paging and cellular mobile The TRAI was established an independent regulatory
body pertaining to telecom sector. The growth of the private sector increased.

The third phase of the telecommunication reforms in India took place in the period of
the late nineties. The government of India introduced the New Telecom Policy 1999.
The TRAI was endowed with more power. The concept of revenue sharing was
introduced to replace the fixed license fee. The National Long Distance was
introduced with free entrance. Moreover, there was introduction of International Long
Distance schemes. The Bharat Sanchar Nigam Limited (BSNL), a corporate body of
the telecom service sector was formed, followed by the introduction of the Internet to
the Indian market.

Impact of Telecommunication Reforms in India

The rates of the National Long Distance were cut down by 60%
The prices of the hand sets and telephone equipments were reduced
The charges on calls were reduced by 8 times
The introduction of the cellular mobile phone
The bandwidth availability was increased

Abhivaykti  2010  Page 6 

Current Trends & Technology 

Current Trends:

Telecom sector, unlike other sectors has shown the highest growth in terms of competition,
benefit for end users, and pricing, social policies, etc.

1. New players entering rural markets:

Although biggies like Airtel, BSNL and Reliance leading in the race to access rural markets,
smaller players are not behind. In past few months, DoCoMo witnessing the biggest jump in
proportion of subscribers coming from the rural areas (increased from 10% to 18% in one
quarter). Even Uninor, albeit on a smaller subscriber base, has a relatively high proportion of
subscribers coming from the rural areas at 34%. Aircel is the only operator whose proportion
from rural areas has actually gone down.

Abhivaykti  2010  Page 7 

2. Prepaid tariff’s 40% lower than Postpaid

The competition in terms of pricing has become intense. More number of players, per second
plans has reduced the pre-paid rev/min saw a sharp fall from 76p/min in Mar-09 to 55p in
Mar-10; a fall of 30%. Post revenues are relatively stable as of now. The reason is that
incumbents (majority of postpaid subscribers) right now have no incentive to cut tariffs as
MNP and 3G will take some time. However this segment is too going to witness pressure in
terms of tariffs

3. C Circle usage higher than A/B circles

The Circle C MoU have held on and even widened the gap versus the A/B circles in the last
12 months. Investors’ concern on C circle subscribers diluting the ARPU have also not
materialized given ARPU is in-line with the B circles and only 10% below national average.
This usage elasticity for C circle is especially strong as it comes despite a relatively higher y-
o-y increase in penetration in these circles.

The two key reasons for this trend are: Low fixed-line usage resulting in fixed-line like usage
in wireless and High market concentration results in lower incidence of multi-SIM and
prevents leakage of minutes

4. Multi-Sim usage is hitting the industry

If you look at the table below, many of the circles have more than 100% teledensity. Even C
category circles like Bihar and Orissa’s urban penetration is also at 130% (national average at
120%). This is mainly due to multi Sim usage which is facilitated by handsets and sometimes
due to attractive tariffs. The switching cost in this case is negligible.

Abhivaykti  2010  Page 8 

State Wise Tele-Density:

What can you expect from Telecom in the future?

Fixed line network is likely to be sustained, albeit with a very small footprint. India
has already crossed the stage where Mobile lines are in multiples of fixed lines
The next phase will be crossover between data and voice There will be a process of
technical consolidation and system integration of different competing standards in a
single platform
Future vision of telecom is a vision of IT. Telecom will be the springboard of future
expansion of IT heralding in an information society. ICT will spread among the
masses and will spur innovation, entrepreneurship and growth

Abhivaykti  2010  Page 9 

Market Structure 

India is the fastest growing mobile phone market in the world. The booming telecom
industry has been attracting large amount of investments in the country.
The number of telephone subscriber base in the country reached 671.69 million as on
June 30, 2010 from 653.92 million in May 2010, as per the Telecom Regulatory
Authority of India (TRAI).

Top 5 Telecom Companies in India:

1. Bharti Airtel:

Bharti Airtel retained its leading position among telecom service providers and
posted a growth of five per cent to end 2009-10 fiscal with revenues of Rs
38,800 crore (Rs 388 billion).
The company is structured into four strategic business units -- mobile,
telemedia, enterprise and digital TV.
The company has with operations in 18 countries with a footprint covering 1.8
billion people.
Sunil Bharti Mittal is the chairman and managing director of the company.

Abhivaykti  2010  Page 10 

2. BSNL:

Bharat Sanchar Nigam Limited saw a drop in its revenue for the second
consecutive year to post Rs 30,240 crore (Rs 302.4 billion), a drop of 14 per
cent, even though it retained the number two position among telecom players.
BSNL offers both fixed line and mobile services with broadband connections.
With over 71.68 million subscribers, BSNL currently is the largest wireline
service provider in India.
The company has reported around 6 crore (600 million) 2G connections and
9,73,378 3G connections since February 2010. All major towns and cities are
covered through BSNL network.
Gopal Das is the new chairman and managing director of BSNL.

3. Vodafone Essar:

The Indian subsidiary of Vodafone Group, Vodafone Essar recorded 13.7 per
cent growth to emerge as the third largest player with revenue of Rs 23,200
crore (Rs 232 billion).
The company commenced operations in 1994 when its predecessor Hutchison
Telecom acquired the cellular license for Mumbai.
It has operations across the country with over 106.34 million customers.

Abhivaykti  2010  Page 11 

It is the world's leading international mobile communications group with

approximately 347 million proportionate customers as on 30 June 2010 and
has around 40 partner networks worldwide.
Vittorio Colao is Vodafone chief executive, and Marten Pieters is managing
director and CEO, Vodafone Essar.

4. Reliance Communications:

Reliance ADA Group's flagship company, Reliance Communications reported

a negative growth of 3.5 per cent with revenue of Rs 22,130 crore (Rs 221.3
It is India's largest private sector information and communications company,
with over 100 million subscribers.
It has established a pan-India, high-capacity, integrated (wireless and
wireline), convergent (voice, data and video) digital network, to offer services
spanning the entire infocomm value chain.
Anil D Ambani is the chairman of the company.

Abhivaykti  2010  Page 12 

5. Idea Cellular

Idea Cellular is part of the Aditya Birla Group and has bagged fifth position
with a revenue of Rs 11,390 crore (Rs 113.9 billion).
It is a leading GSM mobile services operator in India with 67 million
subscribers. Idea offers both prepaid and post paid services.
It is a pan-India operator with services being made available in all parts of the
Idea was the first cellular service provider to launch General Packet Radio
Service (GPRS) and Enhanced Data rates for GSM Evolution (EDGE) in the
Kumar Mangalam Birla is the chairman of the group.


Abhivaykti  2010  Page 13 

Top 10 Companies in World 

Rank Telecom Total Markets

Companies Connections
1 China Mobile 525,331,266 2
2 Vodafone Group 309,580,257 23
3 Telefonica Group 202,333,430 20
4 America Movil 186,544,900 17
5 Airtel Group 169,468,523 18
6 China Unicom 147,587,000 1
7 Deutsche Telekom 127,919,986 12
8 Telenor Group 101,367,838 10
9 Sistema Group 617,428,568 6
10 Reliance 652,423,871 4

Abhivaykti  2010  Page 14 

Organizational Structure 

Mr.Kumar Magalam Birla

Managing Director Secretary
Mr. Sanjeev Aga Mr. Pankaj

Non Executive Chief Finanacial

Director Director
Mrs. Rajashree Mr.Akshay
Mr.Tarjani Vakil
Birla Moondra


Abhivaykti  2010  Page 15 

Government policies 

All the villages shall be covered by telecom facility by the end of 2002.
The Communication Convergence Bill 2001introduced in the Parliament on August
31, 2001 is presently before the Standing Committee of Parliament on Telecom and
National Long Distance Service (NLD) is opened for unrestricted entry.
The International Long Distance Services (ILDS) have been opened to competition.
The basic services are open to competition.
In addition to the existing three, fourth cellular operator, one each in four metros and
thirteen circles, has been permitted.
The cellular operators have been permitted to provide all types of mobile services
including voice and non-voice messages, data services and PCOs utilizing any type of
network equipment, including circuit and/or package switches that meet certain
required standards.
Policies allowing private participation have been announced as per the New Telecom
Policy (NTP), 1999 in several new services, which include Global Mobile Personal
Communication by Satellite (GMPCS) Service, digital Public Mobile Radio Trunked
Service (PMRTS), Voice Mail/ Audiotex/ Unified Messaging Service.
Wireless in Local Loop (WLL) has been introduced for providing telephone
connections in urban, semi-urban and rural areas promptly.
A decision to permit Community Phone Service has been announced.
Multiple Fixed Service Providers (FSPs) licensing guidelines were announced.
Internet Service Providers (ISPs) have been allowed to set up International Internet
Gateways, both Satellite and Landing stations for submarine optical fiber cables.
Two categories of infrastructure providers have been allowed to provide end-to-end
bandwidth and dark fiber, right of way, towers, duct space etc.
Guidelines have been issued by the Government to open up Internet telephony (IP).

Abhivaykti  2010  Page 16 

Recent Mergers and Acquisitions 

The number of mergers and acquisitions in Telecom Sector has been increasing significantly.
Telecommunications industry is one of the most profitable and rapidly developing industries
in the world and it is regarded as an indispensable component of the worldwide utility and
services sector. Telecommunication industry deals with various forms of communication
mediums, for example mobile phones, fixed line phones, as well as Internet and broadband

Currently, a slew of mergers and acquisitions in Telecom Sector are going on

throughout the world. The aim behind such mergers is to attain competitive benefits in
the telecommunications industry.
The mergers and acquisitions in Telecom Sector are regarded as horizontal mergers
simply because of the reason that the entities going for merger or acquisition are
operating in the same industry, that is telecommunications industry.
In the majority of the developed and developing countries around the world, mergers
and acquisitions in the telecommunications sector have become a necessity. This kind
of mergers also assists in creation of jobs.
Both transnational and domestic telecommunications services providers are keen to
try merger and acquisition options because this will help them in many ways. They
can cut down on their expenses, achieve greater market share and accomplish market
Mergers and acquisitions in the telecommunications sector have been showing a
prosperous trend in the recent past and the economists are advocating that they will
continue to do so. The majority of telecommunication services providers have
understood that in order to grow globally, strategic alliances and mergers and
acquisitions are the principal devices.
Private sector investment and FDI (Foreign Direct Investment) have also boosted the
growth of mergers and acquisitions in the telecommunications sector.

Abhivaykti  2010  Page 17 

Over the last few years, a phenomenal growth has been witnessed in the number of mergers
and acquisitions taking place in the telecommunications industry. The reasons behind this
development include the following:

9 Deregulation
9 Introduction of sophisticated technologies (Wireless land phone services)
9 Innovative products and services (Internet, broadband and cable services)

Mergers and acquisitions in Telecom Sector can also have some negative effects,
which include monopolization of the telecommunication products and services,
unemployment and others. However, the governments of various countries take
appropriate steps to curb these problems.

In countries like India, mergers and acquisitions have increased to a considerable

level from the mid 1990s. In the United States, the mergers and acquisitions in the
telecommunications sector are going on in a full-fledged manner.

The mergers and acquisitions in the telecommunications sector are governed or

supervised by the regulatory authority of the telecommunication industry of a
particular country, for instance the Telecom Regulatory Authority of India or TRAI.
The regulatory authorities always keep a tab on the telecommunications industry so
that no monopoly is formed.

Abhivaykti  2010  Page 18 

Significant Mergers and Acquisitions in Telecom Sector:

Following are the important mergers and acquisitions that took place in the
telecommunications sector:

9 The takeover of Mobilink Telecom by Broadcom. This can also be described as a

suitable example of product extension merger
9 AT&T Inc. taking over BellSouth
9 The acquisition of eScription Inc. by Nuance Communications Inc.
9 The taking over of Hutchison Essar by the Vodafone Group. Now it has become
Vodafone Essar Limited
9 China Communications Services
9 Corporation Ltd. taking over China International Telecommunication Construction
9 The acquisition of Ameritech Corporation by SBC (Southwestern Bell Corporation)
9 The merger of GTE (General Telephone and Electronics) with Bell Atlantic
9 The acquisition of US West by Qwest Communications
9 The merger of MCI Communications Corporation with Worldcom

Benefits Provided by the Mergers and Acquisitions in the Telecommunications

Following are the benefits provided by the mergers and acquisitions in the
telecommunications industry:
9 Building of infrastructure in a more convenient way
9 Licensing options for mergers and acquisitions are often found to be easier
9 Mergers and acquisitions offer extensive networking advantages
9 Brand value
9 Bigger client base
9 Wide array of products and services

Abhivaykti  2010  Page 19 

Related terms to the sector 

3G Wireless :
Application services include wide-area wireless voice telephone, mobile
Internet access, video calls and mobile TV.

ATM Protocols:
In the ATM protocol domain the socket interface provides an application with
direct access to an ATM virtual connection. The ATM protocol is offered as a new
address family.. Each Protocol Data Unit (PDU) to be transmitted over the connection
is handed directly to the ATM adaptation layer for segmentation into ATM cells and
subsequent transmission.

Broadband Cable:

Broadband - DSL and Cable Modem Services

In home networking, the term "broadband" refers to a specific form of high-speed

Internet access. Broadband Internet service is high-speed, but not all forms of high-
speed Internet access employ broadband technology.
DSL is a family of related technologies that bring high-speed network access to
homes and small businesses over ordinary telephone lines. Enjoy this introduction to
the basics of DSL networking.
A network router joins two computer networks together. DSL and cable modem
routers are often used in homes and small businesses, while other types of network
routers are also used on the Internet.

Abhivaykti  2010  Page 20 

Broadband Satellite Systems:

Internet access is Internet access provided through satellites. The service can
be provided to users world-wide through Low Earth Orbit (LEO) satellites.
Geostationary satellites can offer higher data speeds, but their signals can not reach
some polar regions of the world. Different types of satellite systems have a wide
range of different features and technical limitations, which can greatly affect their
usefulness and performance in specific applications.


GPRS General packet radio service (GPRS) is a packet oriented mobile data service
on the 2G and 3G cellular communication systems global system for mobile
communications (GSM).
GPRS usage charging is based on volume of data, either as part of a bundle or on a
pay as you use basis. An example of a bundle is up to 5Gb per month for a fixed fee.
Usage above the bundle cap is either charged for per megabyte or disallowed. The pay
as you use charging is typically per megabyte of traffic. This contrasts with circuit
switching data, which is typically billed per minute of connection time, regardless of
whether or not the user transfers data during that period.


Code division multiple access (CDMA) is a channel access method used by various
radio communication technologies.
One of the basic concepts in data communication is the idea of allowing several
transmitters to send information simultaneously over a single communication channel.
This allows several users to share a band of frequencies . This concept is called
CDMA employs spread-spectrum technology and a special coding scheme (where
each transmitter is assigned a code) to allow multiple users to be multiplexed over the
same physical channel.
Telecommunications Services (In telecommunication, the term telecommunications
service has the following meanings:
• Any service provided by a telecommunication provider.

Abhivaykti  2010  Page 21 

• A specified set of user-information transfer capabilities provided to a group of users

by a telecommunications system.

The definition of telecommunications service is "the offering of telecommunications for a fee

directly to the public, or to such classes of users as to be effectively available directly to the
public, regardless of the facilities used "Telecommunications", in turn, is defined as "the
transmission, between or among points specified by the user, of information of the user's
choosing, without change in the form or content of the information as sent and received.

Telecommunications Software :

Telecommunications software is any type of software package that aids in the process of
electronic communications, especially those that involve the transmission of audio in some
manner. There are many different tyapes of software designed to handle telecommunication
functions in various settings, ranging from simple software that is installed and utilized by an
end user, to the software that is necessary to drive the function of entire networks. Depending
on the purpose of the software, it may be used to drive wireless devices as well as those used
to drive fiber optic and copper wire networks.


Abhivaykti  2010  Page 22 


Company History & Corporations 
Associated With It 

Idea cellular Ltd. is one of the bigger players in growing Telecom sector of India.

Initially the Birlas, the Tatas and AT&T Wireless each held one-third equity in the
company. But in 2004 AT&T merger with Cingular lead to sale its equity share to
Tata and Birlas in equal propotion.
After that TATA ventured in CDMA service with TATA indicom that arises
differences between both the partners. (Tata and Birala's)
Following that when TATA Indicom applied for license in Mumbai DOT India
refuses to give license. (A single company cant operate in a sector with two different
operators i.e. Idea and tata indicom)

Idea Cellular is a wireless telephony company operating in all the 22 telecom circles in India
based in Mumbai. It is the 3rd largest GSM company in India behind Airtel and Vodafone
and ahead of state run player BSNL.

Inception & Growth

In 2000, Tata Cellular was a company providing mobile services in AP. When Birla-
AT&T brought Maharashtra and Gujarat to the table, the merger of these two entities
was a reality. Thus Birla-Tata-AT&T, popularly known as Batata, was born and was
later branded as !dea.

Abhivaykti  2010  Page 23 

Then Idea set sights on RPG’s operations in Madhya Pradesh which was successfully
acquired, helping Batata have a million subscribers, and the licence to be the fourth
operator in Delhi was clinched.

In 2004, Idea (the company had by then been rechristened) bought over the Escorts
group’s Escotel gaining Haryana, Uttar Pradesh (West) and Kerala — and licences
for three more — UP (East), Rajasthan and Himachal Pradesh. By the end of that
year, four million Indians were on the company’s network.

In 2005, AT&T sold its investment in Idea, and the year after Tatas also bid good bye
to pursue an independent telecom business. And Idea was left only with one
promoter, the AV Birla group.

Customer Service

The company has its retail outlets under the "My Idea" banner. The company has also
been the first to offer flexible tariff plans for prepaid customers. It also offers GPRS
services in urban areas.

Idea Cellular won the GSM Association Award for "Best Billing and Customer Care
Solution" for 2 consecutive years.

IDEA Cellular has been recognized as the 'Most Customer Responsive Company' in
the Telecom sector, at the prestigious Avaya GlobalConnect Customer
Responsiveness Awards 2010.

Abhivaykti  2010  Page 24 


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

Abhivaykti  2010  Page 25 

Current position of company 

Idea Cellular Limited was incorporated in 1995. The company is among the top four
mobile telephony players in India with an 11 per cent all-India subscribers market
share. More importantly, it ranks third in terms of wireless revenue market share at
12.7 per cent. Idea ranks second with 20.8 per cent revenue market share in nine
service areas where it holds 900MHz spectrum and which derive 48 per cent of
industry's gross revenues (based on gross revenues for UAS and mobile licenses only,
for December 2009 quarter, as released by TRAI).

The market positioning of Idea reflects the strength of its brand considering the fact
that Idea added 14 out of its total 22 service areas in the past four years. Today it is a
pan-India player with commercial operations in all 22 service areas. Its subscriber
base has grown multifold from 7.37 million in March 2006 to 63.82 million in March

Idea holds 16 per cent stake in Indus Towers, a joint venture with other telecom
majors Bharti Airtel and Vodafone. Indus Towers is the world's largest tower
company with over one lakh towers. In 2007, Idea was listed on the National Stock
Exchange (NSE) and the Bombay Stock Exchange (BSE).

Idea enjoys a market leadership position in many of its operational areas. It offers
GPRS on all its operating networks for all categories of subscribers, and was the first
company in India to commercially launch the next generation EDGE technology in
Delhi in 2003. As a pioneer in technology deployment, it has been at the forefront
through the adoption of bio fuels to power its base stations, and by employing satellite
connectivity to reach inaccessible rural areas in Madhya Pradesh.

Abhivaykti  2010  Page 26 

Idea has been a leader in the introduction of value-added services, and there are many
firsts to its credit, including a voice portal 'Say Idea', Idea TV, voice chat and instant
messenger. Tariff plans have been customer-friendly, catering to the unique needs of
different customer segments, for instance the 'Women's Card' caters to the special
needs of women on the move, and 'Youth Card' covers the emerging youth segment.

Idea has won numerous awards and is the only Indian GSM operator to win the
prestigious GSM Association Award consecutively in the best mobile technology
category for the Best Billing and Customer Care Solution both in 2006 and in 2007,
even in the face of international competition.

Abhivaykti  2010  Page 27 

SWOT Analysis 


• Large no. of talented graduates • Scarce foreign language skills

other than English.

• Affordable and quality education

as compared to developed • Lack of customer service culture

• Expensive and poor quality

• English language benefit telecom infrastructure

• Well-developed IT industry • Poor electricity supply

• Strong customer base of well • Cultural differences

known companies

• High attrition rates, therefore less

• Powerful venture capital interest in no. of people with extensive call
investing in growth opportunity centre experience

Abhivaykti  2010  Page 28 


• Horizontal and vertical expansion • High Billing rates

of existing customer base into new

• Political instability

• Time zone difference between

India and target markets
• India's competitors in Eastern
Europe, Latin America and the
Asia Pacific regions offering cheap
• Increasing awareness of BPO services
outsourcing services

• Increasing technology automation.

Abhivaykti  2010  Page 29 

Balance Sheet Ratios 

• Liquidity Ratio:-
This ratio establishes a relationship between current assets and current

The objective of computing this ratio is to measure the ability of the firm to
meet the short-term obligations and to reflect the short-term financial
strength/solvency of a firm.
This ratio is usually expressed in pure ratio i.e. 2:1
Formula:- liquidity ratio=current asset/ current liability

Calculation of 31st march 2009

26740.16/47638.46 * 100 = 56.1%

Calculation of 31st march 2010

7105.58/36796.23 * 100 = 19.3%

Analysis :

9 A relatively high ratio is an indication that the firm is liquid and has the
ability to pay its current obligations in time.
9 On other hand, a relatively low ratio represents that liquidity position of the
firm is not good and the firm shall not be able to pay its current liabilities in
time without facing difficulties.
9 There is the dicrement in ratio form 2009 to 2010.

Abhivaykti  2010  Page 30 

• Quick ratio:-
This ratio establishes a relationship between quick assets and current liabilities.

Objective: -
The objective of computing this ratio is to measure the ability of the firm to
meet the short-term obligations as an when due without relying upon the realization
This ratio is usually expressed in pure ratio i.e. 1:1
Formula:- Quick ratio- quick assets/current liabilities

Calculation of 31st march 2009

47,638.46/32,210.42 * 100 = 147.9%

Calculation of 31st march 2010

38819.03/36796.23*100 =105.5%

Analysis :
9 There is the dicrement in ratio form 2009 to 2010.
9 It indicates rupees of quick assets available for each rupee of current liability.
9 Traditionally a quick ratio of 1:1 is considered to be satisfactory ratio.

Abhivaykti  2010  Page 31 

Profit and loss ratios 

• Gross profit ratio:-

This ratio measures the relationship between gross profit and net sales.

Gross profit ratio is calculated to know.
Whether the business is in a position to meet operating expenses or not
How much the share holders can get after meeting such expense?
Formula:- Gross profit ratio= gross profit/net sales * 100

Calculation of 31st march 2009

98786.57/70982.13 * 100 = 139% appx

Calculation of 31st march 2010

119303.87/90358.32*100 = 132% appx
9 There is the decrement in ratio form 2009 to 2010.
9 This ratio an average gross margin earned on sale.
9 The limit beyond which the fall in sales prices will definitely result.

Abhivaykti  2010  Page 32 

¾ Idea Pre-Paid
¾ Idea Post-paid
¾ Idea Net Setter
¾ Value Added Services:
• Instant balance inquiry
• 24hr recharge facility
• Caller line identification
• Call wait, Call hold & Call divert
• Hello Tunes and Ring Tones
• Voice Mail Service
• Easy Post paid Bill collection
¾ Business Solutions.

2. PRICE:-
¾ Customer based pricing strategies.
¾ Flexible Pricing Mechanism
¾ Controlled by TRAI.

3. PLACE:-
¾ It has wide and extensive presence even in remote areas.
¾ Idea Customer care Touch points.
¾ Distributors like Pan shops, Grocery stores and Outlet.

¾ Large scale print and Video advertising

Abhivaykti  2010  Page 33 

¾ Popular celebrities like Abhishek Bachann

¾ Provides innovations.
¾ “WHAT AN IDEA SIRJI” schemes and slogans are provided.
¾ Executive corporate plan.
¾ Providing wallpapers and screen savers on website.

¾ Dedicate and passionate workforce.
¾ One of the best customer support..

¾ Process for services is very easy and customer can avail it very easily.
¾ 12345 is the customer no. which can be dialed from anywhere in

¾ Brochures.
¾ Customer relationship form.
¾ Company relationship form.
¾ Postpaid form.

Abhivaykti  2010  Page 34 

HR Policies 

Company continuously invests in fostering people development, identifying and

grooming management talent, and has a culture of harnessing employees’ potential to
the maximum.

The company through its participative work environment, skill development

activities, and by championing the values of commitment, integrity, passion,
seamlessness and speed, promotes strong bonding with its employees.

During the year, it has gain undertaken sharing of values creation by granting another
tranche of employee stock options to the eligible employees.

The findings of organization health study (OHS) have been analyzed, which are very
encouraging, and concern areas are being suitably addressed,

The employee strength on rolls stood at 6, 481 as on march 31, 2009.

Various schemes:

Talent Acquisition:

9 Building supply chain of talented workforce .

9 In-sourcing large number of employees with Ideal’s channel partners and
9 Establishing and implementing objective recruitment tools such as conducting
on-line tests based on psychometric profile, aptitude and skills assessment .
9 Conducting competency mapping of every role holder

Abhivaykti  2010  Page 35 

Employee Engagement and Development :

9 Offering ‘Study while Work’ programmes.

9 Setting benchmarks in employee reward and recognition.
9 Implementing employee friendly HR policies
9 Interacting with employees through open houses, employee forums and help
lines etc.
9 Developing role competency matrix
9 Developing robust communication vehicles
9 Managing employees lifecycle

Attrition Management :

9 Following a multi pronged approach to address high attrition rates

9 Developing a strong ‘Idea Cellular Services’ community
9 Defining a clear growth path for all employees
9 Creating a uniform frontline Sales/ Service Management structure
9 Creating and implementing effective processes to enhance productivity

Employee Service Assurance :

9 Educating employees on organization’s HR policies and processes

9 Complying with statutory regulations and company policies
9 Standardizing hygiene factors across various role holders
9 Conducting employee satisfaction surveys periodically for taking corrective

Abhivaykti  2010  Page 36 

Differential strategies
• How our product is different from others?

Network of over 1000 sites which provides a luxury experience, unlike any
other in the world.
High speed internet.
Dialer tone in 19 languages.
Around 1 lakh songs in 21 different languages.
Wide range of wallpapers, mobisodes.
Superior voice clarity.
Introduction of GPRS on its network, idea also supports the use of GPRS
phone as a modem.
15000 retail outlets & over 60 “My Idea” service centre in Mumbai.
In the coming years, the company plans to invest about 50 per cent of its funds
in upgrading infrastructure in its existing circles of operation besides setting
up fully integrated systems in new circles.
In the last 9 months, it has invested about Rs 2,000 crore on infrastructure.
IDEA Cellular, is a leading pan-India integrated GSM operator with 64
million subscribers across the country and is also bidding for the 3G spectrum.

Abhivaykti  2010  Page 37 

• Marketing strategies:

Entering into a ten year deal with IBM termed as business transformation pact.
The mandate to IBM was to integrate, innovate and transform Ideas business
processes and IT infrastructure
IBM will manage all IT operations and services for Ideas business in Punjab
and Karnataka besides migrating the IT help desk services to its centralized
help desk in Pune
For billing, it has partnered with Atos Origin, while prepaid billing solution is
from Bharti Telesoft. Roaming solution is from Roamware.
Idea Cellular to focus on customer service :
9 Idea Cellular plans to focus on its customer service and customer
experience aspects to market itself in the Tamil Nadu telecom circle.
9 The company has applied for licences to operate in the telecom circles
of Tamil Nadu, Karnataka and Punjab and is awaiting clearances.

Abhivaykti  2010  Page 38 

CSR and Awards

CSR – What An IDEA?

Until recently, there were two types of corporate social responsibility:

Help society, but be silent about it.

Help society and advertise it.

Now, the folks at Idea Cellular have come with a third and more cost effective way.
Imagine you are helping society and advertise it.

Further, look at the stuff posted on the Idea website:

9 The campaign highlights the power of Mobile telephony to address the socially
relevant theme of education.
9 By integrating a social message into the new campaign, we are not only
reinforcing the difference that can be made through the use of modern technology
but also the power of a new idea.

The second quote is especially awful. Advertising a potentially impractical and unfeasible use
of your product, while extolling its virtues is definitely not a social message. While the line
between advertising a product and corporate social responsibility is not exactly thin, the folks
at Lowe Lintas and Idea have managed to blur even that successfully.

Abhivaykti  2010  Page 39 

Main Focuses;

The Company is a responsible corporate citizen, and strives to give back to the community it
operates in. The Corporate Social initiatives, which the Company has identified and
implemented are as under:

IIM Ahmedabad – Idea Telecom Centre of Excellence

Company has entered into a tripartite agreement with the Indian Institute of
Management, Ahmedabad (“IIMA”) and the Department of Telecommunications
(“DOT”), to set-up a Telecom Centre of Excellence at the campus of IIMA known as
“IIMA Idea Telecom Center of Excellence” (IITCOE).
9 This Centre of Excellence focuses on the areas of telecom policies,
governance, regulation and management, especially marketing and customer
9 IITCOE will Identify and capture best practices across countries; will enhance
human capital through training and teaching programs for policy makers,
regulators and the industry
9 This will bring fresh insights from other countries in telecom and in related
sectors, and will find solutions to India’s specific situation, especially in the
development of rural telephony.

Pocket PCO project

Company along with International Finance Corporation (IFC), a member of The
World Bank Group, has taken an initiative for designing and implementing a “Pocket
PCO” program in India.
9 Idea Pocket PCO is easy to use mobile phone that comes with a special Idea SIM
having PCO software embedded in it. The device can be used by the individual as a
mobile phone for personal use and as a PCO for business opportunity.
9 The project will help rural micro-entrepreneurs to create pocket Public Call Offices
(PCOs) in India’s under-served areas.

Abhivaykti  2010  Page 40 

FICCI-Aditya Birla CSR Centre for Excellence

For the purposes of creating greater awareness and promoting Corporate Social
Responsibility (“CSR”), as a part of the corporate mission and values, the Federation
of Indian Chambers of Commerce and Industry (‘FICCI’), Company and other group
companies of the Aditya Birla Group, viz., Hindalco Industries Limited, Grasim
Industries Limited, Aditya Birla Nuvo Limited and Essel Mining and Industries
Limited have set-up a CSR Centre called as ‘FICCI-Aditya Birla CSR Centre for
9 The object of setting-up the Centre, amongst others, is to create and develop
the culture and concept of CSR among corporates, businesses, industries,
organizations as well as other institutions
9 These benefit employees, their families and the society at large through
welfare and training programs.

Abhivaykti  2010  Page 41 

Milestones achieved by idea cellular:                                                         

Company has been selected as Emerging Company of the Year for 2009 by
The Economic Times, arguably Corporate Indias pre-eminent awards. This
award is recognition of the strides made by your company in recent years.

IDEA Cellular wins Award for Customer Responsiveness:

9 Mobile operator “IDEA Cellular” which is an Aditya Birla Group

Company has bagged the award for the Most Customer Responsive
Company by Avaya GlobalConnect.
9 The Winner was picked by a jury comprising of senior members from
Ernst & Young, Nielsen and Avaya GlobalConnect.

Abhivaykti  2010  Page 42 

!dea's "Bill Flash" wins the prestigious 2006 GSM Association’s award:

9 Idea Cellular Ltd, India’s leading cellular operator is the only GSM mobile
service operator from India to have won a prestigious award at the, ‘2006
GSM Association Awards’.

!dea Cellular to sponsor Filmfare Awards:

9 Worldwide Media Pvt Limited, the joint venture between the Times of
India Group and BBC Worldwide, today announced the continuation of its
long-term sponsorship agreement on the Filmfare Awards with mobile
operator Idea Cellular Ltd.

9 This will be the second year of association for Idea

with the Filmfare Awards, which are given annually
for excellence in Indian cinema by Filmfare, the movie
magazine produced by Worldwide Media.

Abhivaykti  2010  Page 43 

Career Opportunity Profile 

"Attracting and nurturing talent has become the single most dominant force in

!dea cellular recognizes human resources as a backbone for its long-term

success. We aim to be the best employer, attracting and retaining the best
Our people are our greatest resource as they are our biggest differentiator.
We therefore hire the best professionals brimming with ideas and develop them
for future leadership positions.
!dea is all about participation and involvement - seek opportunities, give
opinions and always speak your mind. And finally make a difference within the
We have focused on conserving the best aspects of our unique culture and on
perpetuating what attracts people to join, and remain, at !dea.
!dea invites you to join a journey of excellence

Recruitment and Training:

Idea looks for young, innovative and dedicated people. It undertakes campus
The company organizes summer/industrial training to students of reputed
engineering/management institutes/universities. They are provided with live
At Gyanodaya, formal training and development programs are also organized by
the company to update its employees.
Also, e-learning forms a part of career development at Idea.

Abhivaykti  2010  Page 44 


The company should focus more on rural and regional areas with affordable plans.

The Broadband facility is available only in one tier and two tier cities, the company
should reach out to the three tier urban and rural areas.

It is the most expensive than other DTH services in India.


Idea telecom services is one of the leading telecom service provider in India
and 10th in the world.

Private sector investment and FDI (Foreign Direct Investment) have also
boosted the growth of mergers and acquisitions in the telecommunications

With the recent 3G spectrum auction it is second largest bidder and succeeded
in Broadband field with better quality services.

Abhivaykti  2010  Page 45 


1) What are your short term and long term goal?

2) What makes Idea such an unique and portable service provider in India?

3) What is the CSR activity if any?

4) What makes Idea the leading subscriber base holder in India?

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Abhivaykti  2010  Page 47