MARKET COMPETITION INTRODUCTION

The presence of competition in industrial life has great significance in economic political aspects. It has its contribution in promoting the welfare of these aspects. What is actually required is to take term competition in its true sense: what its implies and not just knowing its superficial side. We cannot ignore competition. It would be concentrate on the superficial and delve deep into it. The origin of word competition lies in the latin word cum-peter. It means a combined search for better solution. Where there is competition there will be a struggle for new ways out. Competition appears only when there is a push and pull. But approach to competition should work as a lead. It should happen as a cultural phenomenon where all players together work to lead. The phenomenon should not turn into rivalry. Those who consider competitors as their enemies and bear a grudge against them harm their business from within because such an approach brings in pessimism. Pessimism and progress have no connection with each other. Competition should be, as for as possible, appreciated. Once we appreciate the values it has an store for us, we come to know that its act as a guiding factor. It makes we learn, it makes we take initiatives, it makes we innovative and deal with many more aspects are significant to succeed in the market. Struggle are always there and should be used to get motivation. In the course of time every struggle made with a positive approach promise a fruitful result. It is not only the consumers towards whom the efforts of firms are directed. The competitors also demand attention . Their activities must be known to a firm because they can prove to be major sources of threats. They may take away its business, market share and much else.

Sometimes a firm is so much lost its routine activities that may ignore the competitors activities knocking at its doors. If taken lightly this may prove disastrous. Of course, one cannot always say that competition brings threats. It can bring opportunities provided these are extracted from the dubious competitive structure through proper analyses and environment scanning. It times and untiring efforts to scan a market make decision. Competitors should not be regarded as foes because of society, everyone has a right to do business. Direct assaults or abusive action do not solve the problem. They bring a bad name to the involved firms. The correct strength and weakness which are the ingredients of all the industries . Sensible organization take such matters seriously because long-term questions are involved in them. Firms that promptly deal with competitors are successful; this provide security with not much changes to slip. Firms that do not prepare themselves for the future competition may be taken risky route.

In todays business world chances have major role and the firms have option like: Ignore the competition Copy the competition

Lead the competition Ignoring the competition is a dangerous task in business. It has been a major

cause of the downfall of some companies: either they ignored their competitors or their strategies were not up to the mark. The firm that opt for copying the competitors are firms that want to take a safe route. In this case there is hope if the firm does not gain it will not lose also. Third option can be the best option wanting to be a winner. These efforts required by this option involving can facilitate the firm to move ahead of its competitors.

FACTORS AFFECTING COMPETITION IN THE MARKET We shall examine the forces in the environment that affect the level of competition in the market 1:Intense Segment Rivalry This refers to competition prevailing with in industry. They can pose serious threats because it can sometimes lead to a battle among competititors.it is not easy todo business in such a condition where complication arises in every matters including prices ,bringing out new product ,advertisement etc.

2: Potential competitors Potential entrants can create tension for an organization because the entrants may be aggressive competitiors. It is advisable for a firm to deal with them from a long term point of view because it is to run a well established business but very

difficult to maintain it when with the passage of time it gets more & more exposed to the different moods of the market.

3: Substitutes Substitutes affect the optimism of industries to great extent.They affect the prize & profit earnings of firms which must keep a watch on the spread of the substitutes. Flourishing substitute industries bring down prizes.

4: Buyers bargaining power Buyers can pose a threat & make business difficult by their bargaining power. Unlike the earlier concept of sellers market today we have a significant buyers market where consumer is the king .Firms can face a threat from the conscious buyers who keep grumbling about prizes , quality or durability of the product.

5: Suppliers Bargaining Power The suppliers bargaining power can also pose a threat to the industries. The bargaining power of the seller is strong when his firm is monopoly or part of a oligopoly. He knows he is the only whom the buying firms will contact so that he can try his best bargaining skills.

VARIOUS ASPECTS THAT GIVE COMPITITIVE ADVANTAGE TO AN ORGANISATION

Following are the various areas where the organisation can excel outsmart their competitors: 1. Offering 2. Price 3. Promotion 4. Distribution 5. Packaging 6. Hold of Brand Service to Consumers 7. Market Information 8. Raw Materials 10.Efficient Personnel 11.Sound R & D 12.Considerable Market Share 13.Training Program 14.Goodwill 15.Resources 16.Management

MARKET CONCEPT OF COMPETITION

Competitors are the companies that satisfy the same customer need. The market concept of competition opens up a broader set of actual and potential competitors. Every company define its market competition on the bases of following steps: Analyzing Competitors Desining The Competitive Intelligence System Selecting Competitors To Attack And To Avoid . Desining Competitive Stratigies

ANALYSING COMPETITORS Once a companies identifies its primary competitors, it must ascertain its characteristics, specifically its strategies, objectives, strengths & weakness, & reaction patterns.

STRTEGIES A company must continuously monitor its competitors strategies. Resourceful competitors revise their strategies through time. Strategies play important role in market competition or defending the competitors, if they are made in such a way that the competitors could not do anything against them, and then it would be fruitful for competing firm.

OBJECTIVES Once a company has defined its main competitors and their strategies, it must ask; what is the each competitor seeking in the market place? What drives each competitors behavior? One useful assumption is that competitors strive to maximize profits. However, companies differ in the weight that put on short term versus long-term profits. Many factors shape competitors objectives, including size history, current management and financial situation. If the competitor is the division of a larger company, it is important to know whether the parent company is running it for growth or milking it

STRENGTH AND WEAKNESS: A company needs to gather information on each competitors strength & weakness. According to the Arthur D. Little consulting firm, a firm will occupy one of six positions in the target market.

1. Dominate:

The firm controls the behaviors of other competitors & has a wide choice of strategic option .

2. Strong:

This firm can take independent action without endangering Its long term positionand can maintain its long-term position Regardless of competitors action.

3. Favorable:

This firm has an exploitable strength and a more- than Average opportunity to improve its position.

4. Tenable:

This firm performing at a sufficient satisfactory level to Warrant continuing in business, but it exists at the sufferance of the dominant company and has a less-than- average opportunity to improve its position.

5. Weak:

This firm has unsatisfactory performance, but an opportunity exist for improvement. The firm must change or else exit.

6. Nonviable:

This firm has unsatisfactory performance and no opportunity for improvement.

In general, a company should monitor three variables when analyzing each competitors: Share of market. Share of mind. Share of heart.

of its

REACTION PATTERNS Each competitor has a certain philosophy doing business, a certain internal culture, and certain guiding beliefs. Most competitor fall in to one of four categories: 1. The laid-back competitors: A competitors that does not quickly react to a

rivals move. Laid-back competitors may feel their customers are loyal; they may be milking the business; they may be slow in noticing the move; they may lack the funds to react. Rivals must try to assess the reasons for the behavior. 2. The selective competitors: A competitors that react only to certain types of attack. It might respond to price cuts, but not to advertising expenditure increases.
3.

The tiger competitors: A competitors that reacts swiftly and strongly to any assault.

4.

The stochastic competitors: A competitors that does not exhibit a predictable reaction pattern. There is no way of predicting the competitors action on the basis of its economic situation, history, or anything else. Many

small businesses are stochastic competitors, competition on miscellaneous fronts when they can afford it DESIGNING THE COMPETITIVE INTELLEGENCE SYSTEM

There are four main steps in designing competitive intelligence system: Setting up the system: The first step is to identifying vital types of competitive information, identifying best sources of this information, and assigning a person who will manage the system and its services. A manager who used to work for a competitors world closely follow that competitors and serve as the in-house expert on that competitor. Any manager who need to know about the specific competitor would contact the corresponding in-house expert. Collecting the data: The are collected in a continuous basis from the field (sales force, channel, supplier, market research firms, trade association), from people who do business with competitors, from observing competitors, and from published data.

Evaluating and analyzing the data: The data are checked for validity and reliability, interpreted, and organized.

SELECTING COMPETITORS TOATTACK AND TO AVOID: With good competitive intelligence, managers will find it easier to formulate competitive strategies.

Customer value analysis: Very often, manager conduct a customer value analysis to reveal the companys strength and weakness relative to various competitors. The major steps in such analysis: Identify the attributes customer value. 1. Assess the quantitative importance of the different attributes. 2. Assess the companys and competitors performance on the different customer values against their rated importance. 3. Examine how customer in a specific segment rates the companys performance against specific major competitors on an attribute-by-attribute basis. 4. Monitor customer value over time.

Classes of competitors: After the company has conducted its customer value analysis, it can focus its attack on one of the following classes of competitors: 1.Strong versus weak: Most companies aim shot weak competitors, because this requires fewer resources per share gained. Yet, in attacking weak competitors, the firm will achieve little in the way of improved capabilities. The firm should also compete, with strong competitors to keep up with best. Even competitors have some weakness, and the firm may prove to be a worthy opponent.

2. Close versus Distant: Most companies compete with competitors resemble them the most. At the same time the company should avoid trying to destroy the closest competitors.

3.Good versus Bad: Every industry contains good and bad competitors. A company should support good competitors and attack its bad competitors. Good competitors play by the industrys rules; they make realistic assumption about the

industry growth potential; they set price in reasonable relation to cost; they favor a healthy industry; they limit themselves to a portion or segment of the industry; they motivate other to lower the cost or improve differentiation; and they accept the general level of their share and profits. Bad competitors try to buy share rather then the earn it; they take large risk; they invest overcapacity; and they upset industrial equilibrium.

DESIGNING COMPETITIVE STRATEGIES We can gain further insight by classifying firms by the role they play in the target market: leader, challenger, follower, or nicher.

MARKET LEADER STRATEGIES Many industries contain one firm that is the acknowledged market leader. This firm has the largest market Share in the relevant product market. It usually leads the other firms in price changes, new-product introductions, distribution coverage, and promotional intensity,. Remaining number one calls for action on three fronts. First, the firm must find ways to expand total market demand. Second, the firm must protect its current market share through good defensive and offensive actions. Third, the firm can try to increase its market share further, even if market size remains constant. (I) Expanding the Total Market In general, the market leader should look for new users, new uses, and more usage of its products.

New Users Every product class has the potential of attracting buyers who are unaware of the product or who are resisting it because of price or lack of certain features. A company can search for new users among three groups: those who might use it but

do not (market-penetration strategy), those who have never used it (new-market segment strategy), or those who live elsewhere (geographical-expansion strategy).

New Uses: Markets can be expanded through discovering and promoting new uses for the product. In many cases, customers deserve credit for discovering new uses.

More Usage: A third market-expansion strategy is to convince people to use more product per use occasion.

(II) Defending Market share While trying to expand total market size, the dominant firm must continuously defend its current business against rival attacks. The leader is like a large elephant being attacked by a swarm of bees. What can the market leader do to defend its terrain? Twenty centuries ago, in a treatise called The Art of War, the famed Chinese military strategist Sun Tsu told his warriors: One does not rely on the enemy not attacking, but relies on the fact that he himself is unassailable. The most constructive response is continuous innovation. The leader leads the industry in developing new product and customer services, distribution effectiveness, and cost cutting. It keeps increasing its competitive strength and value to customers. The leader applies the military principle of the offensive: The Commander exercises initiative, sets the pace, and exploits enemy weaknesses. The best defense is a good offense. Position Defense: The basic defense is to build an impregnable fortification around ones territory. Although defense is important, leaders under attack would be foolish to put all their resources into only building fortifications around their current product.

Flank Defense: The market leader should also erect outposts to protect a weak front or possibly serve as an invasion base for counterattack. Preemptive Defense: A more aggressive maneuver is to attack before the enemy starts its offense. A company can launch a preemptive defense in several ways. It can wage guerrilla action across the market-hitting one competitor here, another there-and keep everyone off balance. Market leaders with strong resources may even choose to entice opponents into costly attacks:

Counteroffensive Defense: Most market leaders, when attacked, will respond with a counterattack. The leader cannot remain passive in the face of a competitors price cut, promotion blitz, product improvement, or sales-territory invasion. In a counteroffensive, the leader can meet the attacker frontally or hit his flank or launch a pincer movement. An effective counterattack is to invade the attackers main territory so that it will have to pull back some troops to defend the territory. Another common form of counteroffensive defense is the exercise of economic or political clout to deter the attacker. The leader may try to crush a competitor by subsidizing lower prices for the vulnerable product with revenue from its more profitable products. Or the leader may prematurely announce that a product upgrade will be available to prevent customers from buying the competitors product. Or the leader may lobby legislators to take political action that would inhibit or cripple the competition.

Mobile Defense: In mobile defense, the leader stretches its domain over new territories that can serve as future centers for defense and offense. It spreads through market broadening and market diversification.

Market broadening involves the company in shifting its focus from the current product to the underlying generic need. The company gets involved in R&D across the whole range of technology associated with that need, Thus petroleum companies sought to recast themselves into energy companies.

Market diversification into unrelated industries is the other alternative.

Contraction Defense: Large companies sometimes recognize that they can no longer defend all of their territory. The best course of action then appears to be Planned contraction (also called strategic withdrawal) . Planned contraction means giving up weaker territories and reassigning resources to stronger territories. It is a move to consolidate competitive strength in the market and concentrate mass at pivotal positions.

(III) Expanding market share: Market leaders can improve their profitability by increasing their market share. In many markets, one share point is worth tens of millions of dollars. A study by the strategic planning Institute (called profit impact of Market strategy, or PIMS) found that a companys profitability, measured by pre-tax return on investment (ROI), rises with its relative market share of its served market. Because the cost of buying higher market share may far exceed its revenue value, a company should consider three factors before pursuing increased market share: The first factor is the possibility of provoking antitrust action The second factor is economic cost. The third factor is that companies might pursue the wrong marketing-

mix strategy in their bid for higher market share and therefore fails to increase profits. Companies that win more market share by cutting price are buying, not earning a larger share, and their profits may be lower.

MARKET-CHALLENGER STRATEGIES: Firms that occupy second, third, and lower ranks in an industry are often called runner-up, or trailing, firms. These firms can adopt one of two postures. They can attack the leader and other competitors in an aggressive bid for further market share (market challengers). Or they can play ball and not rock the boat (market followers) .We will now examine the competitive attack strategies available to market challengers.

Defining the strategic Objective and Opponent (S) A market challenger must first define its strategic objective. Most aim to increase market share. The challenger must decide whom to attack.

(a)

It can attack the market leader. This is a high-risk but potentially highpayoff strategy and makes good sense If the leader is not serving the market well.

(b)

It can attack firms of its own size that are not doing the job and are under financed. These firms have aging products, are charging excessive prices, or are not satisfying customers in other ways.

(c)

It can attack small local and regional firms. Several major beer companies grew to their present size by gobbling up smaller firms, or guppies.

Choosing a General Attack Strategy: Given clear opponents and objectives, What attack options are available? We can distinguish among five attack strategies frontal, flank, encirclement, bypass, and guerilla attacks. In a pure frontal attack, the attacker matches its opponents product, advertising, price, and distribution. The principle of force says that the side with the greater manpower (resources) will win. This rule is modified if the defender enjoys a terrain advantage (such as holding a mountaintop).

A flank attack can be directed along two strategic dimensions-geographical and segmental. In a geographical attack, the challenger spots areas where the opponent is under performing. A flanking strategy is another name for identifying shifts in market segments that are causing gaps to develop, then rushing in to fill the gaps and develop them into strong segments. Flanking is in the best tradition of modern marketing, which holds that the purpose of marketing is to discover needs and satisfy them. Flank attacks make excellent marketing sense and are particularly attractive to a challenger with fewer resources than its opponent. Flank attacks are much more likely to be successful than frontal attacks.

The encirclement maneuver is an attempt to capture a wide slice of the enemys territory through a blitz. It involves launching a grand offensive on several fronts. Encirclement makes sense when the challenger commands superior resources and believes a swift encirclement will break the opponents will.

Guerrilla warfare consists of waging small, intermittent attacks to harass and demoralize the opponent and eventually secure permanent footholds. The guerrilla challenger uses both conventional and unconventional means of attack. These include selective price cuts, intense promotional blitzes, and occasional legal actions. Here is an example of a very successful guerrilla strategy.

Choosing a Specific Attack Strategy: The challenger must go beyond the five broad strategies and develop more specific strategies:

Price-discount: The challenger can offer a comparable product at a lower price. This is the strategy of discount retailers. Three conditions must be fulfilled. First, the challenger must convince buyers that its product and service are comparable to the leaders. Second, buyers must be price-sensitive. Third, the market leader must refuse to cut its price in spite of the competitors attack.

Cheaper goods: The challenger can offer an average- or low-quality product at a much lower price. Little Dbbie snack cakes are lower in quality than Drakes but sell at less than half the price. Firms that establish themselves through this strategy, however, can be attacked by firms whose prices are even lower.

Prestige goods: A market challenger can launch a higher-quality product and charge a higher price than the leader.

Product proliferation: The challenger can attack the leader by launching a larger product variety, thus giving buyers more choice. Baskin-Robbins achieved

its growth in the ice cream business by promoting more flavors-31-than its larger competitors.

Product innovation: The challenger can pursue product innovation. 3M typically enters new markets by introducing a product improvement or breakthrough.

Improved services: The challenger can offer new or better services to customers.

Distribution innovation: A challenger might develop a new channel of distribution. Avon became a major cosmetics company by perfecting door-todoor selling instead of battling other cosmetic firms in conventional stores.

Manufacturing cost reduction: The challenger might achieve lower manufacturing costs than its competitors through more efficient purchasing, lower labor costs, and/or more modern production equipment.

Intensive advertising promotion: Some challengers attack the leader by increasing expenditures on advertising and promotion. Miller Beer outspent Budweiser in its attempt to increase its market share of the U.S. beer market. Substantial promotional spending, however, is usually not a sensible strategy unless the challengers product or advertising message is superior.

MARKET-FOLLOWER STRATEGIES
Many companies prefer to follow rather than challenge the market leader. Patterns of conscious parallelism are common in capital-intensive homogeneousproduct industries, such as steel, fertilizers, and chemicals. The opportunities for product differentiation and image differentiation are low; service quality is often comparable; and price sensitivity runs high.

This is not to say that market followers lack strategies. A market follower must know how to hold current customers and win a fair share of new customers. Each follower tries to bring distinctive advantages to its target market-location, services, financing. And because the follower is often a major target of attack by challengers, it must keep its manufacturing costs low and its product quality and services high. It must also enter new markets as they open up. The follower has to define a growth path, but one that does not invite competitive retaliation. Four broad strategies can be distinguished:

Counterfeiter: The counterfeiter duplicates the leaders product and package and sells it on the black market or through disreputable dealers. Music record firms, Apple Computer, and Rolex have been plagued with the counterfeiter problem, especially in the Far East. Cloner: The cloner emulates the leaders products, name, and packaging, with slight variations. For example, Ralcorp Holding Inc. sells imitations of namebrand cereals in look alike boxes. Its Tasteeos, Fruit Rings, and Com Flakes sell for nearly a $1 a box less than the leading name brands. In the computer business, clones are a fact of life. Imitator: the imitator copies some things from the leader but maintains differentiation in terms of packaging, advertising, pricing, and so on. The leader

doesnt mind the imitator as long as the imitator doesnt attack the leader aggressively. Adapter: The adapter takes the leaders products and adapts or improves them. The adapter may choose to sell to different markets. But often the adapter grows into the future challenger, as many Japanese firms have done after adapting and improving products developed elsewhere.

MARKET-NICHER STRATEGIES
An alternative to being a follower in a large market is to be a leader in a small market, or niche. Smaller firms normally avoid competing with larger firms by targeting small markets of little or no interest to the larger firms. The key idea in nichemanship is specialization. The following specialist roles are open to nichers:

End-user specialist: The firm specializes in serving one type of end-use customer. For example, a value-added reseller (VAR) customizes the computer hardware and software for specific customer segments and earns a price premium in the process.

Vertical-level specialist: The firm specializes at some vertical level of the production-distribution value chain. A copper firm may concentrate on producing raw copper, copper components, or finished copper products.

Customer-size specialist: The firm concentrates on selling to either small, medium size, or large customers. Many nichers specialize in serving small customers who are neglected by the majors.

Specific-customer specialist: The firm limits its selling to one or a few customers. Many firms sell their entire output to a single company, such as Sears or General Motors.

Geographic specialist: The firm sells only in a certain locality, region, or area of the world.

Product or product-line specialist: The firm carries or produces only one product line or product. A firm may produce only lenses for microscopes. A retailer may carry only ties.

Product-feature specialist: The firm specializes in producing a certain type of product or product feature.

Job-shop specialist: The firm customizes its products for individual customers.

Quality-price specialist: The firm operates at the low or high quality ends of the market. Hewleft-packard specializes in the high-quality, high-price end of the hand-calculator market.

Service specialist: The firm offers one or more services not available from other firms. An example would be a bank that takes loan requests over the phone and hand delivers the money to the customer.

Channel specialist: The firm specializes in serving only one channel of distribution. For example, a soft-drink company decides to make a very largesize soft drink available only at gas stations.

COMPANY PROFILE
Tata Teleservices is part of the INR 64,350 Crore (US$14.3 billion) Tata Group, that has over 90 companies, over 210,000 employees and more than 2.16 million shareholders. With an investment of over INR 9,000 Crore (US$ 2 billion) in Telecom, the Group has a formidable presence across the telecom value chain. The Tata Group plans an additional investment of around INR 9000/- Crore (US$ 2 billion) in this sector in the next two years. Tata Teleservices spearheads the Group's presence in the telecom sector. Incorporated in 1996, Tata Teleservices was the first to launch CDMA mobile services in India with the Andhra Pradesh circle. Starting with the major acquisition of Hughes Tele.com (India) Limited [now renamed Tata Teleservices (Maharashtra) Limited] in December 2002, the company has swung into expansion mode. Tata Teleservices operates in 20 circles i.e. Andhra Pradesh, Chennai, Gujarat, Karnataka, Delhi, Maharashtra, Mumbai, Tamil Nadu, Orissa, Bihar, Rajasthan, Punjab, Haryana, Himachal Pradesh, Uttar Pradesh (E), Uttar Pradesh (W), Kerala, Kolkata, Madhya Pradesh and West Bengal. The company has a customer base of over 3 million. The investment in the company as of March 2004 totals INR 5995 Crore (US$ 1200 million). Having pioneered the CDMA 3G1x technology platform in India, Tata Teleservices has established a robust and reliable telecom infrastructure that ensures quality in its services. It has partnered with Motorola, Ericsson, Lucent and ECI Telecom for the deployment of a reliable, technologically advanced network. The company, which heralded convergence technologies in the Indian telecom sector, is today the market leader in the fixed wireless telephony market with a customer base of 1.8 million.

Tata Teleservices' bouquet of telephony services includes Mobile services, Fixed Wireless Phones, Public Booth Telephony, and Wireline services. Other services include value added services like voice portal, roaming, post-paid Internet services, 3-way conferencing, group calling, Wi-Fi Internet services and data services. Tata Teleservices has recently, marked its entry into the Prepaid segment by launching 100 % Sacchai True Paid, across all its existing 20 circles. With the latest initiative, Tata Indicom has opened up new frontiers for the Indian prepaid customers by offering 1-second pulse and 100 % talktime on True Paid. The company will be shortly launching a new service for Corporates called PushTo-Talk (first across the world to partner with Qualcomm for BREWChat). This service will be available for the masses across the country. Tata Indicom has also launched a collection of 1000 mobile games - one of the largest collections of mobile games in the world. The company has launched prepaid FWP and public phone booths, new handsets, expand Wi-Fi across public hotspots, new voice & data services such as BREW games, picture messaging, polyphonic ring tones, interactive applications like news, cricket, astrology, etc. Tata Teleservices has a strong workforce of 5500. The company is in the process of recruiting personnel for its new circles and will create more than 20,000 jobs by March 2005, which will include 10,000 indirect jobs through outsourcing of its manpower needs. Today, the company serves more than 3 million customers in over 824 towns. With an ambitious rollout plan both within existing circles and across new circles, Tata

Teleservices will offer world-class technology and user-friendly services to over 1000 cities in 20 circles by March 2005.

HISTORY OF COMPANY 1996 Letter of Intent (LOI) issued to the company in March 13, 1996 to provide basic telephone services in the state of Andhra Pradesh. 1997 Licence agreement signed with DOT for operating basic telephone services in the circle of Andhra Pradesh on November 4, 1997. 1998 First to introduce the concept of Smart Card Technology in Pay Telephone business. Tata Teleservices has signed up with Schlumberger of France to establish their payphone network. Schlumberger of France works with over 70 telecom companies worldwide and enjoys over 25% of the Smart Card payphone market segment. 1999 First private basic telecom service provider to launch services in the state of Andhra Pradesh on 31st March 1999. The first private telephone services provider in the country to offer Centrex to its customers. Launched basic services in the city of Vijayawada on August 18, 1999. 2001 Mr. Vinod Shukla, Director has resigned and Mr Pradeep Kaul has been appointed in his place. 2002 Hughes Tele.com crosses 150000 live customer lines. Hughes Tele confirms appointment of G Varghese as President & CEO.

 Hughes Tele.com India Ltd has informed that the Board has appointed Mr Jay Dehejia as a Director of the Company. Mr Dehejia has also been appointed as a member of the Audit Committee and Employees Stock Option Plan Compensation Committee. Mr Jay Dehejia is an Independent Director for the purpose of Clause 49 of the Listing Agreement.Further, the Board of Directors has at its meeting held today appointed Mr Paul W Cheng as an Alternate Director to Mr Jay Dehejia. Hughes Network Systems, a shareholder of Hughes Tele.com (India) Ltd (HTIL), and Tata Industries Ltd on April 23, 2002 signed a Memorandum of Understanding to discuss various possibilities for entering into a transaction with respect to the investment of the HTIL sponsors in HTIL. Hughes Tele.com India Ltd has informed the Board of Directors of the Company has accepted Mr Sett's resignation at its meeting held on July 16, 2002. Mr Vivek Sett will however continue as the Company's Chief Financial Officer. Hughes Tele.Com (India) Limited has informed the Exchange about the Change in Board of Directors as follows : 1.) M/s. Pramod Mittal, Pradman Kaul, Jack Shaw, Francis X Frantz, Vinod K Mittal, James Lucchese, Pradeep Kaul, Jaykumar Dehejia & Vijay dhar have resigned from the office of the Director of the Company w.e.f December 6, 2002. Consequent to the above said resignations, M/s. Arun Kumar (alternate to Mr. Jack Shaw). Sanjay Chaudhary (alternate to Mr. Francis X. Frantz), Pranav Roach (alternate to James Lucchese), Partho Banerjee (Alternate to pradeep Kaul), Paul W Cheng (Alternate to Jaykumar Dehejia),John-Michael Lind (Alternate to Pramod Mittal) have also ceased to be alternate Directors w.e.f. December 6, 2002. 2.) Dr. J J irani, Mr. S Ramakrishnan, Mr. Ishaat Hussain, Mr. R Gopalakrishnan, Mr. Kishor Chaukar, Mr. Firdose Vandrevala, Mr. N.S. Ramachandran & Mr. Pradman Kaul have been appointed as Directors of the Company w.e.f. December 6, 2002. The Board will shortly be expanded to include one more director. The above changes have been

approved at the meeting of the Board of Directors of the Company held on December 6, 2002. 2003 Hughes Tele.com, telephony services provider of Maharashtra has been officially renamed as Tata Teleservices (Maharashtra) ltd. Tata Teleservices (Maharashtra) intensified its focus on rest of Maharashtra (besides Mumbai). TTSL , the Private basic telecom services operator has launched its Voice Mail Services(VMS). Tata Teleservices has tied up with Tier 1 internet service provider n-Longue Communications to set up 400 telephone and internet Kiosks in rural TamilNadu. TTSL is re-evaluating its decision to expand its public Call Offices (PCO's) and Cyber Cafe's across the country under the Tata Indicom Umbrella. Trai soughts out for clarrification on tariffs from WLL Player-Tata Teleservices, eventhough the company has maintained that its WLL tariffs have not been put on hold. Tata Teleservices ltd and Dishnet DSL Ltd have tied up for sharing of infrastructure and a co-location agreement across the country. Tata Teleservices has slashed its WLL STD rates to Rs.1.90 per minute for calls beyond 500kms. GTL and Tata Teleservices have been picked up by Andhra Pradesh Government to manage the information assets created by the state as part of its e-governance initiatives. TTSL hass received clearance from TN government for setting up an Optic Fibre Cable(OFC) backbone of the state Tata Teleservices inpact withTata Infotech to set up a wireless application Laboratory at IIT-Mumbai.

 TTSL has announced an offer which enables its customers to own a mobile phone and a connection for Rs.999. TTML is negotiating with the Airport Authority of India (AAI) to offer Tata Indicom Wi-Fi services a high frequency wirefree access to the internet, at airports. Tata Teleservices objected Reliance Infocomm locking in the customers of its limited mobility services for a period of 3 years and has termed it as anticurruption practices. TTSL has tied up with Motorola for the latters first commercial CDMA software switch. TTSL has succesfully launched its "Tata Indicomm" CDMA services in Pune, nagpur Nasik and Aurangabad. Tata Teleservices has reached a milestone by crossing 1 lakh subscribers in Delhi. TTSL has unveiled its CDMA -based mobile services in Mumbai with lowest pulse rate at 15 seconds. Mr.Amit Bose has been appointed as president of Tata Teleservices , incharge of marketing, sales and other initiatives of Tata Teleservices. Tata Teleservices has unveiled a new scheme called "Tata Shareholder Privileges" for its shareholders, through which the company can get mobile connection without paying any upfront charges. Mr.Firdose Vandrevala has been appointed as new non-executive chairman of Tata teleservices. Dr. J. J. Irani handed over the Chairmanship of the Board of Directors to Mr. Firdose A. Vandrevala. Launches basis telephone services in Pondicherry from 01/09/2003 Tata Teleservices starts operations in Prakasam district Tata Teleservices selects Subex System's fraud management system

2004 Tata Tele unveils m-tribe to tap talent Tata Tele awards CDMA contract to Motorola 2004 TTSL in alliance with Dept of Posts for bill payments in TN LaunchesTata Indicom PrePay service for fixed wireless phone (FWP) in Andhra Pradesh and Delhi circles. Tata Teleservices has signed a memorandum of understanding with China Unicom for joint development of applications on the CDMA technology platform Tata Indicom has launched push-to-talk capable handsets, which allows subscribers to connect instantly with other users of similar handsets Tata Indicom forges alliance with Nokia to roll out gaming package Tata Indicom's IP-VPN services bags international accreditation Tata Teleservices has awarded a contract worth nearly $ 30 million to Lucent Technologies to help in the CDMA network expansion of Tata Teleservices in Andhra Pradesh VSNL joins hands with TTSL to offer global calling cards Tata Indicom launches new contest on Euro 2004

BOARD OF DIRECTORS

F.A.VANDREVALA Chairman Tata Teleservices Ltd.

K.A.CHAUKAR Managing Director Tata Industries Ltd.

Dr. J.J Irani S.K. Gupta Director Group Telecom Advisor Tata Sons Ltd.

R.GOPALAKRISHNAN I.HUSSAIN Director Director Tata Sons Ltd. Tata Sons Ltd.

N.SRINATH N.S.RAMACHANDRAN Director Director VSNL Tata Teleservices Ltd.

Mr. S.Ramdorai TCS - Chief Executive officer & Managing Director

Dr. Mukund Govind Rajan Vice President Tata Sons Ltd.

PRODUCTS OF TATA INDICOM PROFILE TATA INDICOM TRUE PAID The only prepaid to give you unmatched value with:

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Local calls for as low as 3 paise/sec. Rate 3 paise/ sec 5 paise/sec 30 paise/sec Re. 1(national) 10 paise / sec

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RCV of Rs 110.20 MRP Service tax @10.2% Talktime value Validity period Roaming Tariffs Tata Indicom Roaming services have been designed to be easy on your pocket. Tata Indicom gives you the freedom to carry your tariff wherever you roam. When you are roaming, all incoming calls will be charged depending on the distance between the city you are roaming in and the city from where the call is being made. Check the rates for the distance slab applicable to you in the table below. Monthly Rental 0 Incoming 0 to 200 Kms ( Rs. ) 1.99 200 to 500 Kms 2.99 > 500 Kms 2.99 Outgoing Tata Indicom Mobile 0 to 50 Kms ( Rs. ) 1.69 50 to 100 Kms ( Rs. ) 1.99 100 to 200 Kms ( Rs.) 1.99 200 to 500 Kms 2.99 > 500 Kms 2.99 Outgoing All Other Mobile 0 to 50 Kms ( Rs. ) 1.69 50 to 100 Kms ( Rs. ) 1.99 100 to 200 Kms ( Rs.) 1.99 200 to 500 Kms 2.99 > 500 Kms 2.99 Outgoing Fixed 0 to 50 Kms ( Rs. ) 1.69 50 to 100 Kms ( Rs. ) 2.99 100 to 200 Kms ( Rs.) 2.99 200 to 500 Kms 3.99 > 500 Kms 3.99 ROAMING 0 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 Rs. 110.20 Rs. 10.20 Rs. 100.00 7 days

Madhya Pradesh Bhopal Itarsi Raipur Gwalior Jabalpur Sehore Indore Mandideep

REVIEW OF LITERATURE
Indian Telecom Sector- Introduction India's 21.59 million-line telephone network is one of the largest in the world and the 3rd largest among emerging economies (after China and Republic of Korea). Given the low telephone penetration rate - 2.2 per 100 people of population, which is much below the global average, India offers vast scope for growth. It is therefore not surprising that India has one of the fastest growing telecommunication systems in the world with system size (total connections) growing at an average of more than 20 percent over the last 4 years. The industry is considered as having the highest potential for investment in India. The growth in demand for telecom services in India is not limited to basic telephone services. India has witnessed rapid growth in cellular, radio paging, value-added services, internet and global mobile communication by satellite (GMPCS) services. This is expected to soar in the next few years. Recognizing that the telecom sector is one of the prime movers of the economy, the Government's regulatory and policy initiatives have also been directed towards establishing a world class telecommunications infrastructure in India. The telecom sector in India therefore offers an ideal environment for investment. The telecommunications initiative in the country is lead by Ministry of Communications through the Department of Telecommunication & Department Telecom Services and its undertakings for provision of basic telephone services, national and international long distance communications, manufacture of complete range of telecom equipment, research and development, and consultancy services. The Telecom Commission performs the Executive and Policy making functions. The Telecom Regulatory Authority of India performs the functions of an independent regulatory body

INDIAN TELECOM SECTOR - THE JOURNEY SO FAR 1994 was a watershed in the history of Indian telecom sector, which ranked sixth in the world after USA, China, Japan, Germany, and France in terms of number of installed fixed lines. That year saw the introduction of New Telecom Policy (NTP) of Government of India that envisaged a vast change in Indian telecom scenario and reflected the Government's desire to bring Indian telecom at par with the rest of the world. This policy change was followed up by a large number of other initiatives, including introduction of NTP 1999, that indicated continuing commitment of the Government to liberalize the sector. The various policy changes also reflected Government of India's realization that the huge funds needed to undertake gigantic and extensive upgrade of telecom infrastructure in all the three segments of wire line, wireless and data services, would require active participation of private sector. The Government also accepted in principle that unless a progressive movement to free market system in telecom sector was ensured, in which market forces and not the Government would decide who would be the winner in each segment, faster roll out of innovative products and services and lower prices to the consumers would not be realized in the near future. RESPONSES OF NEW ENTRANTS As soon as the telecom industry opened to private sector investment beginning 1994, a large number of Indian companies entered the segment with varying focus, different strategies and assorted aspirations. Discussed below are ten key strategic dimensions along which these new entrants to the Indian telecom industry have made their initial moves to position themselves in the newly opened sector. Needless to say, such initial choices will facilitate or constrain framing of future strategies and also performances of these companies.

1. Scope - business portfolio In the telecom sector, there are a number of ways by which a new entrant can develop its business portfolio. The key issue is whether the firm wants to be an integrated or focused player. Reliance Infocom, Bharti Televentures, and Tata Teleservices are positioning themselves as integrated players, though with differing levels of scope and commitment, and with desires to have a presence in basic (both wire line and wireless) as well as national and international long distance. All three companies are laying a fibre optic network across the country to build backbone infrastructure, though the scale at which Reliance is building far exceeds that of, say, Tata Teleservices. Bharti's project to connect Chennai and Singapore through an underground cable shows its commitment to international long distance market. Reliance additionally has eyes on the data services segment which is slated to exceed the voice traffic very soon. As against this, Hutchison and BPL Mobile see themselves essentially as focused players with strong commitment in the cellular segment. Reliance Infocom, which had entered the telecom sector rather cautiously in mid-nineties through the cellular route in the non-metro segment, came to the conclusion that cellular market was soon going to become a game of diminishing returns and changed its tack to focus on wire line business, where investments required to cover the entire Indian market would be very high (implying that not many companies will be able to make large scale entry). This investment in the wire line backbone can then be leveraged to attack incumbent players in cellular segment through using low cost Code Division Multiple Access ( CDMA) powered Wireless in Local Loop (WLL) limited mobility technology. 2. Scope Geographical Number of geographical sectors where a new entrant to the domestic telecom sector wishes to be present is also a key decision. The range of choices available can include local, regional and national. For example, Reliance Infocom, given its big bang approach, plans to cover all the 18 telecom circles in India. As against this,

Bharti seems to be focusing on south and north Indian circles, Tata Telesrvices in Andhra Pradesh, while smaller players with limited resources such as HFCL Infotel and Shyam Telecom are concentrating on a single circle. 3. Value Propositions There are essentially three generic strategies, viz. differentiation, cost leadership and niche, for competing in any industry. This basic concept is applicable in telecom sector too, though pursuing the niche strategy may not be viable, given the fact that the boundaries within and across various segments are increasingly getting blurred, possibility of substitute completion is high (for example Internet telephony can eat into national and international long distance market and vice versa), bulk of the backbone infrastructure to serve basic, national long distance and international long distance are common and scale intensive, benefits of network externalities and positive feed back are real and opportunities for cross subsidising any niche segment with a view to achieving dominance through predatory pricing is feasible. Given the scale-intensive nature of investments in infrastructure and diversity of information and communication needs of various customer groups - both corporates and individuals - in a variety of data, text, video, audio and animation format, it is reasonable to expect that a strategy comprising economies of scale in operations and offering customised and innovative products and services will be key to future success. Whether a firm is an integrated or focused player in telecom sector, this basic reality can not be ignored. Hutchison and Bharti, which together account for 75% of Indian cellular market, know this too well as can be seen from their frantic effort to grow the number of subscribers and introduce newer products and services based on unique value propositions. Reliance Infocom, which is investing US $5 billion in backbone infrastructure to connect 115 towns and cities and achieve economies scale, has also put in major investments for setting up as many as eight knowledge centres to provide total solution on data services to both corporates and individuals. They have built teams of software professionals who are working in groups to develop innovative products and services in killer applications in such

areas as streaming videos, films, news, sports, cartoons etc. While all these applications are aimed to create differential positioning in favour of Reliance Infocom in the minds of customers, an additional value will be that a single strand fibre will make available "always on" broadband service and access to data/ knowledge centre, fixed telephone line and virtual private network. Players like Tata Telesrvices and Bharti Televentures, who are also laying fibre networks, will have advantage of single fibre but the sheer scale of Reliance Infocom will help it achieve better economies of scale vis--vis the last mentioned companies. 4. Value chain configuration Configuration of value chain depends on the generic strategy being pursued and critical capabilities the firm has or proposes to have. If differentiation is the objective, identification of key value propositions around which the proposed differentiation will be achieved and capabilities needed to deliver those, will determine which activities will be performed in-house and which ones will be outsourced but operationally synchronized. For example, Reliance Infocom, to whom a key value proposition will be to provide customers with an opportunity to experience and taste their information products and services, proposes to set up thousands of company owned web stores, where customers can buy mobile phones and accessories, play online games, hold video-conferences and use Internet. For customers who will place orders for phones online, deliveries will be made through courier service. They have also put in place a consumer marketing group to sell the company's products and services as an FMCG company would do. As against this, cell operators such as Hutchison did not put up similar facilities and instead depended more on direct marketing and outdoors. Another area where Reliance Infocom has invested a lot is development of in-house capabilities to introduce various broadband services, as exemplified by their plan to set up knowledge centres across the country and recruiting thousands of software developers. Similarly, if efficiency in operations is to be achieved, assessment needs to be made about scale and ownership of various value-creating activities. While Reliance

Infocom has plans to have the entire backbone infrastructure as well as manufacturing facility for CDMA handset and CDMA compatible PC cards in house (objective being to be present in all segments of industry value chain and appropriate bulk of the industry profit pool), other major players may go for a combination of in-house and shared or networked facilities. In the latter cases, factors such as scale of investments required, fear of under utilization of capacity, relative priority across various segments of business and risk appetite will influence the decision on actual configuration and scale of investment in the value chain. Configuration of value chain depends on the generic strategy being pursued and critical capabilities the firm has or proposes to have 5. Technology platform There exist a large number of technological options in telecom field, each characterized by unique features, complexities, investment requirement, reliability and maintenance need. Care is needed while selecting a particular technology since such decisions will have implications for value creation process as well as on cost incurred to create and deliver the same. Other associated but important issues are problems of lock-ins and switching costs and flexibility to switch over to next generation technologies without wholesale rejection of legacy system. In an industry such as telecom where technology is fast changing, service providers will need to be extra cautious before making irreversible commitment to a particular type or generation of technology. One way to manage the risks associated is to delay the process of freezing the technology till such time technological and regulatory issues become more certain and clear. In India, Reliance Infocom followed this strategy and waited for Government to come up with a policy guideline that allows basic service providers to offer WLL limited mobility. While Reliance Infocom could hedge their technological risk this way, companies like Hutchison got exposed to competition from basic service providers with WLL limited mobility technology particularly in low-priced, standard value proposition segment. The Global System for Mobile Communication (GSM) technology - a type of Time Division Multiple Access (TDMA) cellular network prevalent in Europe, even with General Package

Radio Services (GPRS) technology, deployed by "pure" cellular players will have limitations in offering a range of broadband services, which CDMA 2000 1X technology that powers WLL, will be able to provide. The head start, which cellular companies got in wireless, may get slightly dissipated once WLL limited mobility from the basic service providers become fully operational. 6. Strategic Alliance Partner When faced with the daunting task of mobilizing resources, technology and marketing capabilities needed to face formidable competitors having all these inputs, companies lacking these resources to the required degree often enter into strategic alliances with partners having complementary skills, resources and geographical presence, the aim being to improve the chance of success in the unfolding industry. The choice of alliance partners can be critical to future success. A series of strategic alliances, both formal and informal, have already been entered into in the Indian telecom sector by companies who are either constrained by shortages of resources or do not have adequate presence in all geographical markets. For example, Reliance Infocom has entered into a technology agreement with Samsung of South Korea to manufacture CDMA handsets in-house. Tata Teleservices and Hughes Tele.com have entered into an equity arrangement and have further plans to join hands with Bharti. Under this arrangement, the threecompany combine will operate in contiguous and complementary circles with full internal co-ordination, thus creating in the process, a third front in wire line business capable of taking on the incumbent public sector BSNL and MTNL (the first front) and Reliance Infocom (the second front). In cellular segment, a three-company alliance called "Idea Cellular" has come up that has a large cellular footprint and consists of cellular businesses of Tatas, Birla and AT&T. It can be seen from all these examples how the choice of strategic alliance partner is a key issue, driven by such need as acquiring know-how, minimizing risks, gaining critical mass and having access to brand names.

In information goods industry, it is generally Perceived that early movers get advantage over late entrants and such advantages are difficult to overcome once these accrue to the first movers 7. Legal structure An important choice for a firm planning to make a big foray into the Indian telecom sector in is the kind of legal structure it should have, to drive its strategy and business plan. For example - should it have separate legal entities for servicing wire line, wireless and data services? Should it have an independent company for running the backend infrastructure and a separate outfit for providing the information and related services? Should the long distance (both national and international) be kept separate from basic services? Questions like these and similar others are very common in telecom sector and the choice will differ from company to company. Each of these options will have different legal, financial and organizational implications and individual companies will need to make decisions in this regard, keeping in view the big picture they have and also the administrative implications. In India, Bharti Televentures is the holding company of all of Bharti's telecom ventures; it has separate legal entities for looking after the long distance and cellular businesses. For Reliance Infocom, the original plan was to have two separate legal entities for wire line and wireless businesses. But realizing that such a separation of the two activities will not extract full value of mega investment proposed in information and communication segment, it is now proposed to have one single entity viz. Reliance Infocom, to oversee both the businesses. In case of Tata's telecom business, the involvement in the sector has come through three distinct entities viz. VSNL, Tata Telesevices and Idea Cellular. 8. Mode of Entry In India, different telecom operators followed different entry strategies for entering different segments of the industry, based on their respective assessment of how the

chosen route would provide specific advantages like lowering the cost of and time of entry and access to markets being targeted. Both Hutchison and Bharti entered the Calcutta cellular market through acquiring existing operators, who originally entered the industry through green field project using technical know how from overseas collaborators but could not run the business as they did not have the deep pockets. In wire line business, Reliance Infocom, Bharti and Tata Teleservices mainly adopted the organic route, the reason being non-availability of acquisition candidates (the incumbent players viz. BSNL and MTNL belong to the public sector) and green field projects. Based on state-of-the-art technology and optical fibre having high bandwidth, the organic route will enable the companies to offer a large number of value-added services and also help them operate the network efficiently. However deviations are also there, as can be seen from Tata Telesrvices' decision to merge its operations with Hughes Tele.Com to enter the Maharashtra market, Reliance Infocom's proposal to acquire the Mumbai-Delhi wire line link owned by Fibre Link Across the Globe (FLAG) as a step to complete the network with an international gateway and Tatas entering the international long distance business through acquiring Government of India's share in public sector VSNL. Reliance is also reported to be considering purchase of Sify, an Internet company, which will give the company access to a large base of corporate customers, besides the Internet gateway license for 15 cities and Net telephony. 9. Timing of entry and roll out In case of a fast changing industry such as telecom which is characterized by availability of variety of technologies and standards and evolving regulations, timing of entry and roll out is a major strategic decision. Too early an entry involving irreversible commitments may turn out to be wrong while delayed entry may mean lost opportunities. In information goods industry, it is generally perceived that early movers get advantage over late entrants and such advantages are difficult to overcome once these accrue to the first movers. However, the Indian experience in the telecom sector shows that one can not make a categorical statement in this

regard. Let us consider the cases of Hutchison and Bharti, which entered the mobile market some 5 to 6 years ago and did get a head start over others as can be seen from the fact that 75% of mobile footprints are controlled by these two companies. Around that time, Reliance Infocom too entered the cellular market but they chose to keep a low profile, as can be derived from their focus on non-metro segment where the going rate for license was far lower than the four metros. Subsequent to the entry of various new players into the cellular market, each making major financial, technological and organizational commitments, the Government made a number of policy changes such as allowing the incumbent public sector unit to offer cellular services without paying the steep license fee, change of fee structure from fixed licensed fee concept to revenue sharing concept and most importantly allowing the basic service providers to offer limited mobility, all of which may put a downward pressure on future profitability of cellular segment. During this period, there were also developments on the technology front and advantages and disadvantages of GSM and CDMA technologies particularly with regard to voice quality, roaming facility and broadband services in relation to cellular services became clearer. With US cellular market increasingly switching over from analogue system to CDMA powered mobile system (vis--vis GSM system used in Europe) and suitability of CDMA in offering limited mobility and much better broadband services at a very low cost vs. GSM based mobile services, incumbent firms using GSM technology suddenly started facing the prospect of competition from basic service providers deploying CDMA powered WLL limited mobility. Reliance Infocom, which kept low profile in wire line business even in late nineties, concluded that standalone cellular business would soon become unprofitable and took a rather late decision to go overdrive in wire line business, once the Government also agreed in principle to allow basic service providers to offer limited mobility. Reliance Infocom could effect this change of focus, because it understood that the last words in either regulations or technology were not told in mid-nineties and hence the decision they took at that time, of having just a toehold in the cellular

segment, the aim being to have an option on the future. Their planned delay in taking the full scale plunge in the telecom sector was no doubt strategic. The timing can also be crucial from another point of view. European experience showed that wire line companies there put up massive capacity hoping that consumers will go full hog for broadband services. This was not easy to come by and as a result many of these companies with low asset utilization are currently facing bankruptcy, thanks to large component of debt in their capital structure. The experience of South Korea, which has ten times more broadband penetration than, say Germany or France, showed that certain prerequisites are needed to be fulfilled before broadband really takes off. All these experiences were available only by end 2000 and when, in late nineties, Reliance Infocom postponed its decision to actually commit capital in wire line and broadband services till late 2000, it really aimed in hedging its risk in the business, which its counterpart in Europe could not fully comprehend in early 90s when they went for major investments A third reason as to why timing can be crucial is its impact on cost of inputs. It is an established fact that cost of inputs required for executing any project can be brought down significantly if the project is taken up during periods of recession when most suppliers are underutilized and bargaining power of customers are high. Reliance Infocom decided to put up the massive investment of US $ 5billion during 2000-02 when most advanced economies were under severe recession giving the company an opportunity to do hard bargaining with suppliers and lower effective cost of the project. As against this, cellular operators in India put up their investments in mid nineties, when suppliers were having high capacity utilization in general - thanks to booming world economy, implying comparatively higher project cost incurred by such cellular operators. It is well known that longer the execution time more will be the overall cost of the project. The delay will also imply loss of opportunity to use the investments being made 10. Pace of execution

The speed at which a project will be executed is a major decision that can have important cost implications. It is well known that longer the execution time more will be the overall cost of the project. The delay will also imply loss of opportunity to use the investments being made. In case of the telecom industry, where investments involved are very high and there is also the necessity to delay consciously the actual commencement of project execution for reasons discussed in the previous section, the importance of high speed execution cannot be overemphasized. Reliance Group, which is known for its rapid project execution capabilities (they had put up a 30 million ton grass root refinery involving an investment of US$ 4 billion in just 14 months in late 90's) could afford to delay taking a final decision on technology and project scope because of their confidence and capability to execute any mega project rapidly. Other wire line companies such as Bharti Televentures, Tata Telesrvices and even the incumbent BSNL are progressively laying fibre in chosen geographical pockets, but the decision taken by Reliance Infocom to accelerate the execution work not just in terms of laying the fibre but also putting up data centres and software development facility is likely to help the company position itself more strategically than other players. BASIS FOR MAKING SPECIFIC CHOICES Two important factors that seemed to have influenced the decisions made by Indian telecoms along the strategic dimensions discussed above were their (a) point of view on future industry evolution and strategic intent, and (b) perception on capabilities they possessed (or proposed to possess). The main players, referred in this article, were driven by their respective perceptions in the just mentioned two areas and the differences in such Perceptions can be clearly seen in the way initial moves have been rolled out. While it is too early to predict the outcome of the strategies being pursued by the new entrants, identification of the ten strategic dimensions and the two factors that influence specific choices along these ten dimensions should help both academicians and practicing managers in developing a framework for conceptualizing the entry strategy to Indian telecom sector.

Services Offered Telephone Services NSD/ISD Services Computerised Trunk Services Pay Phones National & International Leased Lines Circuits Telex Telegraph Services (Manual & Automatic) X-25 based Packet Switched Data Network (INET) Gateway Packet Switched Data Services (GPSS) Gateway Electronic Data Interchange Service (GEDIS) Gateway E-Mail and Store & Forward FAX Service (GEMS-400) Concert Packet Service (CPS) Satellite-based Remote Area Business Message Network Electronic Mail Voice Mail Audio-Text Radio Paging Cellular Mobile Telephone Public Mobile Radio Trunked Service Video Conferencing V-SAT Internet ISDN INMARSAT Mobile Service INMARSAT Data Service Home Country Direct Service Intelligent Network (IN) Services

VISION OF INDIAN TELECOM

Vision of Indian telecom sector for the year 2020, i.e., about two decades from now. Development being a continuous process, the choice of the year 2020 is just an arbitrary division of time, a pre-defined time horizon to take stock of what is likely to be achieved. Pre-portrayal of a stage of development in future requires understanding of the process of change, the dynamics that set law of motion. Process of change is often volatile and responsive to intervention and global circumstances impacting it. In such an inherently dynamic situation it is convenient to assume that cross-country experiences incubate the most recent seeds of change. This is because countries at various stages of development encapsulate developmental experiences that occur with the passage of time. The present paper isolates the agents of change based on international experiences and situates India in this development continuum. The agents of change, as observed from international perspective, have been broadly categorized into economic structure, competition policy and technology. Economic reforms and liberalization have driven telecom sector through several transmission channels of which these three categories are of major significance. COMPETITION POLICY Countries often differed in pattern of sequencing and the speed of liberalization. Competition has been controlled within limit by state policy through licensing of limited number of market players in certain segments granting thereby a period of exclusivity to the operators. Heterogeneity of routes to sectoral reforms, as seen from the examples of some of the Asian countries, classified into different combination of policies and approaches to telecom reform, are presented below44: 1. Competition in the fixed line segment with state owned incumbents: China, India and Korea.

2. Privatization of state owned incumbents but deferred competition through exclusivity granted to private investors: Hong Kong, Indonesia, Malaysia, Pakistan and Singapore. 3. Simultaneous introduction of privatization and competition: Japan and Sri Lanka. 4. Opening up of local market to competition first: Hong Kong, India and Singapore. 5. Opening up of competition in the international services first: Korea, Malaysia and the Philippines. 6. Introduction of second domestic long distance carrier first: China 7. The sector ministry exercises regulatory functions: China, Indonesia, Japan, Korea, Malaysia, Taiwan and Thailand. 8. Separate regulator with the responsibility for interconnection lying with the dominant operator while regulator is responsible for arbitration of disputes: Hong Kong, Pakistan and Philippines. In most countries, restricting the number of licensees or imposing geographic limitations has limited competition. In India, for instance, competition in cellular telephony was allowed in a duopoly mode. This was gradually increased to licensing of four operators in each of the four metros and thirteen circles. Basic service in India is still limited to one private operator competing with state owned incumbents in the circles. Though private sector has been licensed and they are laying infrastructure, metros are still in the grip of public sector monopoly and it will take a while before private competition takes place. Differences in modes of privatization have been observed in other countries. In Thailand, private entry was allowed through Build Operate and Transfer (BOT) mode while the network was controlled by the state. In Vietnam, network was publicly managed with foreign operators participating in provision of training, equipment and supervision through Business Cooperation Contracts (BCCs). China did not allow private entry in the telecom sector and limited competition between state-owned entities of the ministries. Many

countries in Asia restricted foreign equity participation. For example, China, India, Indonesia, Korea, Malaysia, the Philippines and Thailand limited foreign equity below fifty per cent45. It is interesting to note that competing technological standards have also limited competitions. Countries are divided in their technical options for mobile networks. While Europe predominantly opted for Global System for Mobile communications (GSM) technology and USA for Code Division Multiple Access (CDMA), within Asia, China, India, Indonesia and Malaysia have opted for GSM in cellular mobile network, whereas Hong Kong, Korea, the Philippines, Singapore and Thailand have opted for CDMA46. However, several countries are now opting for more than one standards. For example, in USA, Companies like AT&T and Cingular are increasingly moving to GSM47. China is going with some CDMA as well.48 India is using CDMA in Wireless in Local Loop (WLL). Multiple technological standards fragment market rendering base stations purchased from one company unworkable with switches bought from another company potentially limiting the scope of exploitation of economies of scale that could accrue in a multi-vendor environment49. The way multiple technological standards may confuse regulatory stance leading to market failures can be seen from the recent experiences of several vendors while trying to launch 3G in Europe. European Union has mandated a single technological standard called Wideband CDMA (W-CDMA) for 3G coverage. Some of the companies that sought to launch 3G services in September 2002 (deadline stipulated in the licenses for the launch of services) faced the difficulties that networks and handsets of different vendors could not work with each other. CDMA2000, another standard for 3G, which is working successfully in Asia and USA could not be adopted in Europe because European operators did not have freedom to use CDMA2000 as per their licensing restrictions50. Which competition policies worked better than others? Literature cites certain developmental experiences to draw conclusions from before and after and with or without evaluations. The purpose here is to cite these references. In the absence of

more detailed information, examination of the validity of such conclusions is not intended here. Competition with privatization World over, there is an observable trend of growing number of state owned telecom incumbents being privatized. In 2000, from among the member countries of the ITU, those with fully or partially privatized incumbents outnumbered countries with fully state-owned operators51. It has been observed that countries with a privately owned incumbent operator account for 85 per cent of the world market by revenue. Those with fully state-owned operators, in mobile as well as fixed lines, account for just two per cent.52 It has been suggested that privatization with competition works better than privatization without competition. For example, Chile started privatization in 1988 but did not limit competition through grant of exclusivity period or licensing obligations. Argentina, on the other hand, privatized in 1990, but granted seven-year exclusivity period, which was subsequently extended by three years. Moreover, Argentina imposed licensing obligation in terms of stipulated growth rate of 6.5 per cent. In the decade following privatization, Chile far exceeded Argentina in terms of network growth. Moreover, starting with half of the tele-density, Chile surpassed Argentina in ten years time53. The issue of granting a period of shared exclusivity versus allowing more extensive market entry has been discussed in the literature. Experience of UK has been cited in this context. Telecom expansion was reportedly much more rapid in the United Kingdom (i) after the expiry of exclusivity period from 1982-90, that was granted to Mercury, the second operator and (ii) after cable TV operators were permitted to offer tele-services54. Therefore, it was concluded that open competition was better than duopoly. Both USA and Canada lost in terms of their mobile tele-density-rankings in the world in the 90s. Two reasons which have been cited for this are: (i) persistence with regional duopoly for too long, and (ii) slow transition from analog to digital systems55.

Notwithstanding the merits of the above conclusions whatsoever, it can be argued that privatisation of existing state-owned incumbent operator is not the only way to promote private investment. Opening up of new services not preoccupied by state monopoly can attract private investors, provided regulatory policies do not inhibit growth of private markets in such areas. Growth of private mobile operators in India is a case in point. However, it is necessary for the regulatory authority to ensure that state incumbent does not inhibit growth of competition56. Operationalisation of these ideas is not without hazards. A conflict of common occurrence relates to interconnection issues. Interconnection between state-owned fixed line incumbent network and private mobile network has been a bone of contention in many countries. incumbent telecommunication operator, which often holds a monopolycan set the price, typically at a high multiple of the actual cost57. Independent regulator? Sound regulation is a pre-requisite to healthy competition. Therefore, issue of competition cannot be divorced from the issue of regulation. The autonomy that a regulator enjoys from government control has often been given primacy over many other factors in determining a regulators ability to discharge regulatory role in an impartial manner. In reality, however, it is difficult to perceive independent regulation as synonymous with impartial regulation. There are examples of effective regulation under regulatory functions being performed by the government departments. Similarly, there are instances of independent regulators that have been captured by market players58. What about non-sector specific regulation? New Zealand experimented with nonsector specific regulation relying on Competition Commission of the country. This led to protracted litigations and disputes on interconnection and network access issues slowing down the progress of the sector. Finally, New Zealand enacted Telecommunication Act in December 2000 and created a Telecommunication Commission within the Competition Commission59. In India, TRAI Act was amended in January 2000, to remove some of the shortcomings observed earlier. The legislation aimed at, inter alia, protection of

interests of service providers and consumers of telecom sector. With this amendment, recommendatory functions were separated from enforcement functions. A separate Telecom Disputes Settlement and Appellate Tribunal (TDSAT) was set up with both original and appellate jurisdiction. It became mandatory for the central government to seek prior recommendations of the TRAI before introduction of new services. TRAIs power to issue directions was restricted to only its enforcement functions. Direct appeal to the Supreme Court of India against an order of TRAI was provided for. Thus, neutrality of Indian telecom regulatory regime was ensured through reliance on multiple agencies for conflict resolution60. TRAI had a proven record of maintaining neutrality. It had challenged several decisions of the Government of India61. In tune with the international development and evolution of technology, The Communication Convergence Bill 2001 was introduced in the Parliament and is under consideration of the Standing Committee of Parliament on Telecom and IT. The Bill aims at promoting, facilitating and developing, in an orderly manner, the carriage and content of communications (including broadcasting, telecommunications and multimedia), to facilitate development of a national infrastructure for an information based society, and to enable access thereto. It also seeks to provide a choice of services to the people with a view to promoting plurality of news, views and information62. Thus, regulatory regime in 2020 will be overarching, based on convergence, which apart from paving the way to a fullgrown information society will enhance growth and productivity of telecommunications and IT through exploitation of economies of scope and coverage. Competition without privatization Interestingly, there are other models of competition without privatization. China Telecom, one of the worlds major Public Telecommunication Operators (PTOs) is still fully state-owned. Both China and Vietnam followed similar policies of competition without privatization. Competition has been allowed between ministries of the governments. Participation of foreign investors has been allowed through

joint ventures. Both these countries have been very high achievers in terms of progress of telecom sector63. The key underlying factor is the will of the state to invest in, and prioritize, telecommunication development.64 There have been instances of repeated market failures arising out of impudent investment decisions of the private operators. In Norway, license to provide 3G mobile services purchased for US$ 22 million was returned unused. Investment worth several billion dollars were sunk and lost in the Iridium Global Mobile Personal Communications by Satellite (GMPCS) network project. Global Crossing went bankrupt with debts over US$ 12 billion for a project of construction of 160,000 km fiber optic network65. One view is that too many competitors deciding to build enormous networks for which there was little demand were responsible for such crashes66. Market failures of such magnitudes create backlash in the industry and can potentially risk a global crisis. Such failures, if not avoided, would prove too costly in terms of lost investment in a country like India. A calibrated approach through managed competition holds assurances for the investors of a reasonable time period for consolidation and therefore, seems to be a wiser strategy to follow. Despite differences in competition regimes across the countries, the global trend is towards growing privatization and competition. India, with her commitment to reforms is already a part of this process. From the perspective of business organisation, as the global experience suggests, this process is likely to undergo an alternate cycle of differentiation and convergence. Convergent nature of technology may, by itself dictate mergers and acquisitions between companies in certain cases. Network operators and service providers will have to merge with content developers to add value to their services. This is likely to create temporary oligopoly in the market till competition intensifies with the emergence of more firms offering multiple services67. India in 2020 will see competition among big firms offering innovative value-added services to capture market through creation of new digital needs and priorities. Regulatory environment will mature to allow maximum

flexibility and freedoms to encourage innovation and expansion, consistent with this process of evolution. 5. Technology trend Broadly speaking, technologies of mobile telecommunications and Internet are going to set the contours of further technological progress in the current decade and the next. The most recent initiative aims at convergence of voice and data received from multiple sources, both web based and real time video streams, in mobile handheld devices. Global satellite systems, mobile handsets and calling cards have made virtual presence possible almost everywhere and anywhere overcoming the barriers of distance, topography and remoteness. There has been phenomenal growth in mobile subscribers in the world in the nineties, increasing from 11 million in 1990 to 941 million by the end of 2001. In 1991, less than one per cent of the world population had a mobile phone. The proportion has grown to the vicinity of one phone per every six people by the end of 2001. Similarly, one-third of the total number of countries of the world had cellular network in 1991. The ratio rose to over 90 per cent by end-200168. Considering that the fixed telephone lines numbered just over a billion in this year, it is likely that mobile phones would surpass fixed line in 2002. It is interesting to observe that China has surpassed USA to become the largest mobile market of the world. In Africa, mobile subscribers outnumber fixed line subscribers in more than half the countries69. Mobile telephony has emerged as the major growth driver in this sector. But for expansion in mobile network, there would have been hardly any growth in telecommunications in many countries. In developed countries, mobile phones have complemented fixed lines whereas in many developing countries with low-level fixed line penetration, mobile has already surpassed fixed lines filling up supply gaps created due to inadequate growth in the latter. It has been observed that the ability of a country to grow its mobile network to the point where it overtakes the fixed-line network is not a function of its wealththe crossover point can come as low as a fixed teledensity of 0.4 (for instance, in Malwai) to as high as 75 (the case of Luxembourg) and at any point in between.

There are three important economic implications of mobile explosion for the developing countries. First, by offering a viable techno-economic alternative it is helping in improving telecom penetration bypassing shortages of fixed lines. Consequently, it is bringing along with it all concomitant economic benefits of enhanced telecom accessibility. Second, it is promoting a better entrepreneurial culture and supporting employment generation through proliferation of kiosks72. Third, there has been a shift in investment burden from state to private sector and the consumers. Cellular mobile telephones subscribers in India increased from 77 thousand in 1995 to 3.6 million in 2000. By March 2002, it has grown to 6.4 million. Cellular subscribers in proportion to total number of telephone subscribers (basic plus cellular) has increased from 0.6 percent in 1995 to 14.6 percent in 2002. This is still lower than the average of 24.6 percent achieved by the low-income countries in 2001. The corresponding ratio for lower middle-income countries is 41.8 percent, 52.8 percent for upper middle-income countries and 50.2 percent for high-income countries. India is yet to experience mobile explosion of the scale other countries have seen. One would expect a rapid growth in mobile telephony in coming decades. India has also achieved significant quality upgradation of its network in the 90s. Digital lines in proportion to total number of main telephone lines have increased from 87 per cent in 1995 to 99.8 percent in 1999. Like mobile, the last decade witnessed phenomenal growth in Internet usage. In 2001, 95 per cent of the countries were connected to Internet compared to 15 per cent in 1990. There are about half a billion Internet users in the world in 2001with subscribers numbering an estimated 230 million74. It is also interesting to note that in 1995 Internet users in developed countries were seven times more than the number of Internet users in the developing countries. In 2001, this gap has narrowed down to less than four times. Initial stance of technology supporting expansion of Internet dictated revenue model based on convergence between telecom and Internet. Internet is accessed predominantly through dial up in old telephone lines. This has resulted in unequal

distribution of benefits between the dotcom operators and the telecom operators. It has been observed that while dotcom operators are failing to make money on the Internet, telecom operators are. The reason is that they control the pipes over which Internet traffic runs75. Incumbent telecom operators tend to be among the largest Internet Service Providers (ISPs) in their countries76. There are three important implications of this development. First, it inhibits growth of content development as an independent specialized activity because revenue-share of the content developers depends on the first claim on revenue by the infrastructure providers. Second, technical capabilities of telephone lines constrain development of Internet infrastructure and conditions speed of download. Third, developing countries are faced with major bottlenecks in the spread of Internet due to shortage of telephone lines and high telephone charges. Technological answers to these problems have already emerged in the forms of Integrated Services Digital Networks (ISDN), wireless solutions and upgraded cable television networks enabling high-speed Internet access without clogging telephone lines. Use of VSAT technology for Internet connectivity can also greatly enhance the speed of data transmission77. In the present decade and the next, one would hope to see faster expansion and consolidation of these technologies ushering in Internet revolution. Broadband access technologies, which include Digital Subscriber Lines (DSL) and cable modem, permit faster download and graphic-intensive Internet applications. However, diffusion of this technology is so far minimal, particularly in the developing countries. Commercial exploitation of Internet crucially hinges on the spread of broadband technology. The issue that confronts developing world is how to create demand for broadband applications at the first instance. At the early stage, government can play an important role to promote broadband usage in e-education, e-governance, e-medicine to stimulate its demand. Another convergent trend that has emerged is the use of Internet as carriers of voice. Consequently, increasing share of voice traffic shifted to the Internet, to be carried as Voice over IP (VoIP).

At the uppermost end of the convergent technology spectrum have already emerged Third Generation (3G) mobile devices with the capability of access to mobile data and voice80. More than US$ 100 billion have been spent by the industry since 2000 to acquire 3G license and spectrum. However, a full-grown market is yet to develop to assure investors return. Technical and commercial consolidation is expected to take quite some time. By 2020, one would expect 3G to be within reach of wider section of Indian population. The pace at which 3G is going to proliferate in India will depend upon, inter alia, the market demand for higher bandwidth data. There is a view that perhaps the present demand for high speed data (greater than 64 kbps) can be met cost effectively with General Packet Radio Service (GPRS). While pent up demand for emerging data-needs can be met by using 2G systems like Short Message Service (SMS), GPRS etc., the drive for 3G in Indian market can come from corporate roaming traffic via international visitors. Substantial work needs to be done in developing 3G relevant contents so as to expand its market. Initiative has already been launched in these areas. For example, Sonera (formerly Telecom Finland) has already launched information portal for mobile phones including Internet localisation services. Future work in this area will be in the form of adding more value to the new services. Advanced plans are necessary to develop vibrant industries for 3G applications. This may call for investments. A synchronized growth of user industry and 3G technologies would ensure that pay-off period in investment is minimized. Developing knowledge based industry to provide mobile applications would reduce uncertainties regarding return from private investment in 3G technologies. As a preparatory groundwork to usher in 3G, it is essential to demarcate areas where massive harmonization efforts would be needed. This would entail upgrading hardware and software for high bandwidth multimedia services. Harmonization would also be needed between the two emerging varieties of CDMA, i.e., wideband CDMA that also supports fixed network and CDMA 2000. Since it is likely that

both these solutions would ultimately support fixed and mobile applications, a marriage of the two would prevent technological fragmentation of the market. There is need to develop deeper understanding of the evolution of new end-users in the market for the mobile multimedia services. Multimedia service providers will emerge as important shareholders in the network value chain. Countries should envision new partners, new entities, and new stakeholders in the business models. Multimedia portals will be important components of such business models. There is need for further work to match regulatory perspectives emerging as a part of the convergence regime with the requirements of 3G. Another important area of work will involve further thought over efficient billing model ---- a transition from time dependent billing model to content dependent billing83. The revenue model in the telecommunications sector is going to change significantly in times to come. In many cases PTOs have started offering free Internet to augment revenue from telephone lines84. In the Philippines, a global leader in SMS use in mobile handsets, revenue from SMS contributed a growing share of mobile revenue. SMS proved to be much cheaper than voice call 85. 6. Conclusions LDCs are experiencing fastest growth in telecom network. In the mid-90s, growth in total telephone subscribers per 100 inhabitants of the LDCs surpassed that of the developed countries. In 2001, LDCs surpassed emerging countries achieving the distinction of fastest among the three86. Given the relationship between telecom expansion and growth, there is hope for narrowing down of digital-divide, provided, LDCs are able to sustain growth momentum in the long run. The vision is no doubt optimistic. It has been cited that some twenty years ago Tokyo had more telephones than the whole of African continent whereas today Africa has more than twice the number of main telephone lines than that of Tokyo87. It is but natural that markets in high-income countries saturate while expansion in developing countries continues unabated.

One notable break with the past is that with opening up of the developing economies and widespread sectoral reforms, catching up process has become faster. Developing countries with liberal policies have much better opportunity to leapfrog than before. Mobile experience of the low-income countries bears testimony to this process. India is a participant in this global process. There is tremendous appetite to absorb new technology. At the higher end of the market, India will mimic the most sophisticated telecom technology of the world and face all types of uncertainties that are associated with any new technology anywhere in the world. It will take time for the market for new technologies to consolidate. Market maturing will be a continuous process at some of the segments of telecom sector. This holds good even today. Todays market does not guarantee reliable revenue stream to investors in new technology like VoIP, bradband and 3G since they lack an existing client base88. Side by side, a process of diffusion will continue unhindered in respect of established technology in the mass market. What will be the telecom scenario in India in 2020? To look forward, from now on, the growth momentum in the expansion of fixed line network is likely to be sustained. This is the current phase of expansion developing countries are passing through. In 2000, three out of four fixed lines were installed in developing countries. China alone installed more fixed lines in 2000 (35 million) than the entire developed world in 1999 and 200089. Once fixed line market is matured, mobile will crossover fixed line market. India is still much below the crossover point even by the standard of the low-income countries. A mobile revolution is in the offing in India. The next points of crossover will be between data and voice90, and between mobile and fixed-line Internet91. This is going to take some time because this is yet to occur even in high-income countries. The process of technical consolidation and system integration of different competing standards in a single platform will by itself take some time. The process of commercial consolidation will start thereafter. In order to guess the time frame over which such technological and commercial cycles may run their courses in future it may be of interest to look at the past

experiences. Going by the history, commercialisation of cellular mobile telecommunication services began in late seventies, when Japan took the lead in 1979. Many developed countries have reached saturation point only now though developing countries are far from it. Similarly, market for Internet in the developing countries is yet to mature though the service commenced in late 1960s, when USA took the lead in 1969. As rightly observed, But for both these innovations, the full extent of their impact on businesses and consumers is probably still to come. Ecommerce, for instance, is still in relative infancy and is expected to boom in coming years as old economy firms re-orient their business processes around it. Similarly, the true potential of a mobile phone, as an integrated communications, entertainment and positioning device, is only beginning to be realized92. If past trend were any guide, it would be reasonable to hope that by 2020 India would complete transition into digital switching and transmission, VoIP, broadband and 3G. Though there would be always a small niche market in India, which would catch up with the cutting age of the technology, consolidation and expansion of evolving technologies across the length and the breadth of the country will follow with a lag. 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. An expanding domestic market will deepen the synergy between the domestic and the export market and strengthen Indias presence in the high-value segment of the global trade and investment. ICT benefits will spread among all, the rich and the poor, the young and the old, the men and the women, the organized and the unorganized and the government and the governed. Indian Telecom Sector: Recent Policies All the villages shall be covered by telecom facility by the end of 2004. 1. National Long Distance Service (NLD) is opened for unrestricted entry. 2. The International Long Distance Services (ILDS) have been opened to competition.

3. The basic services are open to competition. 4. 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. 5. 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. 6. Wireless in Local Loop (WLL) has been introduced for providing telephone connections in urban, semi-urban and rural areas promptly. 7. Two telecom PSUs, VSNL and HTL have been disinvested. 8. Steps are being taken to fulfill Universal Service Obligation (USO), its funding and administration. 9. A decision to permit Mobile Community Phone Service has been announced. 10. Multiple Fixed Service Providers (FSPs) licensing guidelines were announced. 11. Internet Service Providers (ISPs) have been allowed to set up International Internet Gateways, both Satellite and Landing stations for submarine optical fiber cables. 12. Two categories of infrastructure providers have been allowed to provide endto-end bandwidth and dark fiber, right of way, towers, duct space etc.

TELECOM STATISTICS
October04 88.5mn 8.24 43.96mn 0.16mn November '04 90.32mn 8.40 44.31mn 0.25mn 46.01mn 1.54mn 1.17mn 0.37mn December 04 92.76mn 8.62 44.76mn 0.42mn 48.0mn 1.95mn 1.42mn 0.53mn

Total subscribers Tele-density Fixed line Additions during

the month Mobile 44.51mn Total additions 1.53mn during the month GSM additions CDMA additions 1.20mn 0.33mn

AIRTEL AN OVERVIEW
Bharti Tele-Ventures vision for its mobile business is To make mobile communications a way of life and be the customers first choice. The mission is to meet the mobile communication needs of the customer through 1) error free service 2) Innovative products and services and 3) cost efficiency. The Companys strategic objective is to consolidate its leadership position amongst the mobile service providers in India. The Indian mobile market, according to the COAI, has increased from approximately 1.2 million subscribers as of March 31, 1999 to approximately 16.30 million subscribers as of July 31, 2003. Despite this rapid growth, the mobile penetration rate in India, at approximately 1.6% as of July 31, 2003, is significantly lower than the average mobile penetration rate in other Asian and international markets. The number of mobile subscribers in India is expected to show rapid growth over the next four years. By 2006 it is projected at 50 million by COAI and 44 million by Gartner. Bharti Tele-Ventures believes that the demand for mobile services in India will continue to grow rapidly as a result of the following factors: Lower tariffs and handset prices over time; Growth in pre-paid customer category; Greater economic growth and continued development of India's economy; Higher quality mobile networks and services; and Greater variety and usage of value added services.

Bharti Tele-Ventures, through its subsidiary has the licenses to provide GSM services in fifteen out of the twenty-two telecom circles in India. It proposes to consolidate all its subsidiaries providing mobile services under Bharti Cellular Limited.

As of July 31, 2003, approximately 91% of India's total mobile subscriber market resided in the Company's fifteen mobile circles, which collectively covered only 56% of India's land mass.

Mobile Footprint The map below depicts the location of, and provides certain information for, Bharti TeleVentures' existing mobile circles in India: Source: (1) Population estimates are as per National Census, 2001 and are as of March 1, 2001. The population for Uttar Pradesh (West) circle is approximately 37% of the total population for the state of Uttar Pradesh. (2) Mobile subscriber statistics are as of July 31, 2003 and are based on data released by COAI. Mobile market size comprises the total number of mobile subscribers of all theservice providers in a circle. (3) Demographics of Maharashtra and TamilNadu do not include demographics of state capitals (metros) Mumbai and Chennai respectively. (4) Demographics of Haryana do not include Faridabad & Gurgaon, as they are included in Delhi & NCR. Similarly demographics of Uttar Pradesh (West) & Uttaranchal does not include Noida & Ghaziabad as they are included in Delhi NCR. The significant growth in the Company's mobile business has been through a combination of organic growth and acquisitions of additional licenses and has been summarized below. The information given below is for the total market and is not representative of our market share or network coverage 1) 2) 3) Comprises the circles of Delhi and Himachal Pradesh. Comprises the circles of Delhi, Himachal Pradesh, Karnataka and Andhra Pradesh. Comprises the circles of Delhi, Himachal Pradesh, Karnataka, Andhra Pradesh and Chennai.

4) 5)

Comprises the fifteen operational circles of Bharti Tele-Ventures. Based on data released by the COAI on the total number of persons subscribing to mobile services in our licensed areas.

Mobile Strategy

Capture

maximum

telecommunications

revenue

potential

with

minimum

geographical coverage to maximize its revenues and margins.

Build high quality mobile networks by deploying state-of-the-art technology to offer superior services. Use the experience it has gained from operating its existing mobile networks to develop and operate other mobile networks in India and to share the expertise across all of its existing and new circles.

Attract and retain high revenue generating customers by providing competitive tariffs, offering high quality customer support, proactive retention programs and roaming packages across all of its mobile circles.

Provide affordable tariff plans to suit each segment of the market with a view to expand the reach, thereby increasing the mobile customer base rapidly.

EXECUTIVE SUMMARY
Customer satisfaction is the most important aspect especially for a service industry. In todays highly competitive environment, which would be aggressive in times to come, the customer satisfaction and customer retention has become the key to success. In order to acquire and maintain the leadership, it is imperative that the products perceived performance should exceed the expectations of the customers. Extensive, aggressive and proactive marketing strategies and customer care services have become the backbone of this competitive environment and cellular industry is no exception. Bharti Cellular Ltd. (Airtel) is already maintaining the leadership in India and now doing effort for grabbing reasonable god market share in MP& Chhatisgarh which results to bring a competitive environment in this field, The objective of this study is to analyze the satisfaction level of the existing customers towards the services offered by Airtel. What is the customers perception about the future competition i.e. overall services provided by the competitors vis--vis Airtel. As we know that Idea Reliance were already in the field of cellular telephony industry. But the entrance of BSNL & Airtel certainly creates a tough competitive scenario in the cellular sector in MP& Chhatisgarh. On the basis of the services provided by Airtel, a questionnaire was formed & personal survey and telephonic survey was conducted with 200 existing customers categorizing them on the basis of their average minutes of usages (MoU).

TECHNOLOGY PROFILE
GSM is the most advanced cellular communication standards. It stands for Global System for Mobile Communication. It is the world wide cellular system, which was established in 1982. It uses digital technology to reproduce the sound. A standard system through out Europe and many other parts of the world, which gives its users the benefit of using their Mobile phones in countries through out the world where GSM standards are in use. It transmits voice at a frequency of 900 MHz, 1800MHz and 1900MHz.Airtel is working on 1800 MHz that gives its users freedom, convenience, Mobility, clear voice, and security. The system has 4 basic components: Mobile station (MS). Base Station Sub System (BSS). Network Sub System (NSS) and Public Switch Telephone network (PSTN) or local landline telephone Switch.

OPERATION The mobile station has two basic components; Mobile Equipment (ME) and the Subscriber Identity Module (SIM), which is in the form of a card. SIM is a module with the subscriber related information. The subscribers insert the SIM card into an ME, and then the mobile system belongs to the subscribers. The called number is linked to the SIM and not to the ME. The sub system comprises controllers called the Base Controllers (BSC) And Transreceiver station called Base Transreceiver Stations (BTS). Actual communication with mobile units is established by BTS. Several BTS can be controlled by a BSC that acts like an interface between the network sub system and the transreceiver stations (BTS). The Base station transmits and receives calls over a particular radio frequency BSC is connected to MSC (Mobile switching System).

NSS comprises of MSC, HLR (Home Location Register), VLR (Visitor Location Register) and AUC (Authentic Center). MSC is the link between land based telephone and networks and Mobile subscribers. HLR holds the information about the mobile subscriber and its usage. It provides information for billing. VL keps track on the movement of the mobile phone and provides roaming information. AUC verifies the authenticity of the subscribers. When the Mobile subscriber makes a call to any other Mobile subscribers, the mobile station or phone of the caller sends the signals to the nearest base station or BTS and it then transfers that call to the BSC, BSC sends the signals of the switching system and after verification by NSS, it acknowledges the identity of the called party and transfers the call to the concerned BTS and further to the BSC. BSC subsequently allows the concerned BS/BTS to transmit the call to its destination and vice versa. 1995 1996 Bharti Telenet launched mobile services in Himachal Pradesh 1997 Bharti Telenet obtained a license for providing fixed-line services in Madhya Pradesh circle Bharti Telecom formed a joint venture, Bharti BT , for providing VSAT services. Bharti Tele-Ventures Limited incorporated on July 7, 1995 Bharti Cellular launched mobile services AirTel in Delhi

1998 Bharti Telecom formed a joint venture, Bharti BT Internet for providing Internet services First Indian private fixed-line services launched in Indore in the Madhya Pradesh circle on June 4, 1998 by Bharti Telenet thereby ending fixed-line services monopoly of DoT (now BSNL) 1999 Warburg Pincus (through its investment company Brentwood Investment Holdings Limited) acquired equity interest in Bharti Tele-Ventures Bharti Tele-Ventures acquired an effective equity interest in Bharti Mobile (formerly JT Mobiles), the mobile services provider in Karnataka and Andhra Pradesh circles 2000 New York Life Insurance Fund, or NYLIF, acquired a equity interest in Bharti Cellular Bharti Tele-Ventures acquired an effective equity interest in Bharti Mobinet (formerly Skycell Communications), the mobile services provider in Chennai Bharti Tele-Ventures acquired equity interest of Telecom Italia and Bharti Telecom in Bharti Telenet thereby making Bharti Telenet a 100% subsidiary of Bharti TeleVentures SingTel (through its investment company Pastel Limited) acquired STET's equity interest in Bharti Tele-Ventures Bharti Tele-Ventures acquired an additional effective equity interest in Bharti Mobile resulting in Bharti Tele-Ventures holding an effective 74% equity interest in Bharti Mobile. 2001 Bharti Telesonic entered into a joint venture, Bharti Aquanet, with SingTel for establishing a submarine cable landing station at Chennai Bharti Tele-Ventures acquired NYLIF's equity interest in Bharti Cellular

Bharti Cellular acquired a 100% equity interest in Bharti Mobitel (formerly Spice Cell ), the mobile services provider in Kolkata Bharti Tele-Ventures acquired equity interest in Bharti Cellular from British Telecom, thereby making Bharti Cellular its 100% subsidiary Bharti Tele-Ventures acquired an additional equity interest in Bharti Mobinet from Millicom International and BellSouth International Punjab license restored to Bharti Mobile by the DoT and migration to NTP- 1999 accepted Bharti Cellular entered into license agreements to provide mobile services in eight new circles following the fourth operator mobile license bidding process Bharti Telenet entered into license agreements to provide fixed-line services in the Haryana, Delhi, Tamil Nadu and Karnataka circles Bharti Telesonic has entered into a license agreement with DoT to provide National Long Distance Services in India and has been the first service provider to start service in the country.

Bharti Aquanet, Bharti Telesonic and Bharti Cellular have entered into license agreements with the DoT to provide ISP services in India

2002 Bharti launched mobile services in Gujarat, Haryana, Kerala, Madhya Pradesh circle, Maharashtra, Mumbai, Punjab, Tamil Nadu, Uttar Pradesh (West) circle. Bharti listed on the National stock Exchange, Bombay Stock Exchange and the Delhi Stock Exchange on February 18, 2002. Bharti entered into a license agreement with the DoT to provide international long distance services in India. Bharti launched fixed-line services in the Delhi, Haryana, Karnataka and Tamil Nadu license areas. Bharti became the first private telecommunications services provider to launch international long distance services

OBJECTIVE OF THE STUDY

The are mainly two objectives namely (a) (b) Primary objectives Secondary objectives

a) Primary objectives To study the Market Competition of Airtel and Tata Indicom. b) Secondary objectives 1. 2. To find out the factors that would increase the efficiency of the product. To know the problems confronted by the customers.

HYPOTHESIS OF THE STUDY

Hypothesis tests are procedures for making rational decisions about the reality of effects. Rational Decisions Most decisions require that an individual select a single alternative from a number of possible alternatives. The decision is made without knowing whether or not it is correct; that is, it is based on incomplete information. For example, a person either takes or does not take an umbrella to school based upon both the weather report and observation of outside conditions. If it is not currently raining, this decision must be made with incomplete information. A rational decision is characterized by the use of a procedure, which insures the likelihood or probability that success is incorporated into the decision-making process. The procedure must be stated in such a fashion that another individual, using the same information, would make the same decision. One is reminded of a STAR TREK episode. Captain Kirk, for one reason or another, is stranded on a planet without his communicator and is unable to get back to the Enterprise. Spock has assumed command and is being attacked by Klingons (who else). Spock asks for and receives information about the location of the enemy, but is unable to act because he does not have complete information. Captain Kirk arrives at the last moment and saves the day because he can act on incomplete information. This story goes against the concept of rational man. Spock, being the ultimate rational man, would not be immobilized by indecision. Instead, he would have selected the alternative, which realized the greatest expected benefit given the information available. If complete information were required to make decisions,

rational men and women would make few decisions. This is obviously not the case. The scriptwriter misunderstood Spock and rational man.

Effects When a change in one thing is associated with a change in another, we have an effect. The changes may be either quantitative or qualitative, with the hypothesis testing procedure selected based upon the type of change observed. For example, if changes in salt intake in a diet are associated with activity level in children, we say an effect occurred. In another case, if the distribution of political party preference (Republicans, Democrats, or Independents) differs for sex (Male or Female), then an effect is present. Much of the behavioral science is directed toward discovering and understanding effects. The effects discussed in the remainder of this text appear as various statistics including: differences between means, contingency tables, and correlation coefficients.

GENERAL PRINCIPLES All hypothesis tests conform to similar principles and proceed with the same sequence of events. A model of the world is created in which there are no effects. The experiment is then repeated an infinite number of times. The results of the experiment are compared with the model of step one. If, given the model, the results are unlikely, then the model is rejected and the effects are accepted as real. If, the model could explain the results, the model must be retained. In the latter case no decision can be made about the reality of effects. Hypothesis testing is equivalent to the geometrical concept of hypothesis negation. That is, if one wishes to prove that A (the hypothesis) is true, one first assumes that it isn't true. If it is shown that this assumption is logically impossible, then the original hypothesis is proven. In the case of hypothesis testing the hypothesis may

never be proven; rather, it is decided that the model of no effects is unlikely enough that the opposite hypothesis, that of real effects, must be true. An analogous situation exists with respect to hypothesis testing in statistics. In hypothesis testing one wishes to show real effects of an experiment. By showing that the experimental results were unlikely, given that there were no effects, one may decide that the effects are, in fact, real. The hypothesis that there were no effects is called the NULL HYPOTHESIS. The symbol H0 is used to abbreviate the Null Hypothesis in statistics. Note that, unlike geometry, we cannot prove the effects are real, rather we may decide the effects are real. For example, suppose the following probability model (distribution) described the state of the world. In this case the decision would be that there were no effects; the null hypothesis is true. Event A might be considered fairly likely, given the above model was correct. As a result the model would be retained, along with the NULL HYPOTHESIS. Event B on the other hand is unlikely, given the model. Here the model would be rejected, along with the NULL HYPOTHESIS.

The Model The SAMPLING DISTRIBUTION is a distribution of a sample statistic. It is used as a model of what would happen if 1) the null hypothesis were true (there really were no effects), and 2) the experiment was repeated an infinite number of times. Because of its importance in hypothesis testing, the sampling distribution will be discussed in a separate chapter.

Probability Probability is a theory of uncertainty. It is a necessary concept because the world according to the scientist is unknowable in its entirety. However, prediction and decisions are obviously possible. As such, probability theory is a rational means of dealing with an uncertain world. Probabilities are numbers associated with events that range from zero to one (0-1). A probability of zero means that the event is impossible. For example, if I were to flip a coin, the probability of a leg is zero, due to the fact that a coin may have a head or tail, but not a leg. Given a probability of one, however, the event is certain. For example, if I flip a coin the probability of heads, tails, or an edge is one, because the coin must take one of these possibilities. In real life, most events have probabilities between these two extremes. For instance, the probability of rain tonight is .40; tomorrow night the probability is .10. Thus it can be said that rain is more likely tonight than tomorrow. The meaning of the term probability depends upon one's philosophical orientation. In the CLASSICAL approach, probabilities refer to the relative frequency of an event, given the experiment was repeated an infinite number of times. For example, the .40 probability of rain tonight means that if the exact conditions of this evening were repeated an infinite number of times, it would rain 40% of the time. In the Subjective approach, however, the term probability refers to a "degree of belief." That is, the individual assigning the number .40 to the probability of rain tonight believes that, on a scale from 0 to 1, the likelihood of rain is .40. This leads to a branch of statistics called "BAYESIAN STATISTICS." While many statisticians take this approach, it is not usually taught at the introductory level. At this point in time all the introductory student needs to know is that a person calling

themselves a "Bayesian Statistician" is not ignorant of statistics. Most likely, he or she is simply involved in the theory of statistics. No matter what theoretical position is taken, all probabilities must conform to certain rules. Some of the rules are concerned with how probabilities combine with one another to form new probabilities. For example, when events are independent, that is, one doesn't effect the other, the probabilities may be multiplied together to find the probability of the joint event. The probability of rain today AND the probability of getting a head when flipping a coin is the product of the two individual probabilities. A deck of cards illustrates other principles of probability theory. In bridge, poker, rummy, etc., the probability of a heart can be found by dividing thirteen, the number of hearts, by fifty-two, the number of cards, assuming each card is equally likely to be drawn. The probability of a queen is four (the number of queens) divided by the number of cards. The probability of a queen OR a heart is sixteen divided by fiftytwo. This figure is computed by adding the probability of hearts to the probability of a queen, and then subtracting the probability of a queen AND a heart which equals 1/52. An introductory mathematical probability and statistics course usually begins with the principles of probability and proceeds to the applications of these principles. One problem a student might encounter concerns unsorted socks in a sock drawer. Suppose one has twenty-five pairs of unsorted socks in a sock drawer. What is the probability of drawing out two socks at random and getting a pair? What is the probability of getting a match to one of the first two when drawing out a third sock? How many socks on the average would need to be drawn before one could expect to find a pair? This problem is rather difficult and will not be solved here, but is used to illustrate the type of problem found in mathematical statistics.

HYPOTHESIS OF THE PROJECT Hypothesis is usually considered as the principal instrument in research. Its main function is to suggest new experiments and observations. In fact many experiments are carried out with the deliberate object of testing hypothesis. Hypothesis of My Research Tata Indicom is less selling brand then Airtel. Area of Study: Retailers & Consumers of Tata Indicom & Airtel in Bhopal Region

RESEARCH METHODOLOGY
Following step were involved: Define the research objective Developing the research plan Collecting the information Analyzing the information Presenting the findings Data Source: The customer database was provided by the customer care department and personal survey was conducted based on questionnaire. Research Design: The study undertaken was of exploratory nature, which aims at gathering the preliminary data to throw the lights on the real nature of the issue and give possible suggestion To collect the data a systematic manner, a detailed questionnaire covering all communication setup related question were used. Research instrument: The method of data collection was Internet books and some personal interviews. With the help questionnaire which is enclosed at the as annexure. The research approach for this study was conclusive research, which are designed to help executives to choose among various possible alternatives to make a viable business decision. This research is on Study of Tata Indicom and Airtel was of descriptive type, which is an offshoot of conclusive research.

The problem for this research was non-operating in nature i.e. special situation peculiar to company marketing department. The data both primary and secondary, the source was hundred respondents. For the proper analysis of data simple statistical techniques such as percentage were used. It helped in making more accurate generalization from the data available.The data which was collected from a sample of population was assumed to be representing entire population of interest. Demographic factors like age, income, and educational background was used for the classification purpose.

RESEARCH DESIGN
The research approach for this study was conclusive research. Conclusive research are designed to help executives to choose among various possible alternatives to make a viable business decision. Further this research on satisfaction was of descriptive type, which is an offshoot of conclusive research. The problem for this research was non-operating in nature i.e. special situation peculiar to particular company's marketing department. The data both primary and secondary data, the source was one hundred respondents for primary data. For the proper analysis of data simple statistical techniques such as percentage were use. It helped in making more accurate generalization from the data available. The data, which was collected from a sample of population, was assumed to be representing entire population was interest. Demographic factors like age, income and educational background was used for the classification purpose.

TYPES OF STUDY
The study conducted is a conclusive descriptive statistical study. Conclusive because after conducting the study, the researcher comes to a decision which is precise and rational. The study is descriptive because it is in the descriptive study, that the data is collected for a definite purpose and here the purpose is definite i.e. the data is collected, to find out the satisfaction of the customer with the brand. The study is conclusive because after doing the study the researcher comes to a conclusion regarding the position of the brand in the minds of respondents of different age groups. The study is statistical because throughout the study all the similar samples are selected and grouped together (similarity of ages thus forming a group). All the similar responses are taken together as one and their percentages are calculated. Thus, this, conclusive descriptive statistical study is the best study for this purpose as it provides the necessary information which is utilized to arrive at a concrete decision. Area of Study : Bhopal

TOOLS OF ANALYSIS

To know the response. I have used the questionnaire method in sample survey. If one wishes to find what people think or know, the logical procedure is to ask them. This has led marketing researchers to use the questionnaire technique for collecting data more than any other method. In this method questionnaire were distributed to the respondents and they were asked to answer questions in the questionnaire. The questionnaires were structured non-disguised questionnaire because the questions, which the questionnaire contained, were arranged in a specific order besides every question asked were logical for the study, no question can be termed as irrelevant. The questionnaire, were non-disguised because the questionnaire were constructed so that the objective is clear to the respondent. The respondents were aware of the objective. They knew why they were asked to fill the questionnaire.

TYPES OF DATA WITH REFERENCE TO COLLECTION

There are two types of data : 1. 2. Primary Data Secondary Data

Primary data are those data which are obtained for the first time by the researcher himself. In other words, "The data originally obtained in the process of research are known as primary data". The primary data are original in character. They are in the shape of raw material often called raw data to which statistical methods are applied. The sources of primary data are called primary sources. Researcher collect primary data during the course of doing experiments in an experimental research but in case researcher do research of the descriptive type and perform surveys (sample or census surveys), then researcher can obtain primary data either through observation or through direct communication with respondents or through personal interviews. Secondary data are those data which have already been collected by some other persons for their purpose, that is the data taken from published or unpublished records like research records like research papers, newspapers, periodicals, journals, office records, etc are known as secondary data . When the researcher utilizes secondary data. Then he has to look into various sources from where he can obtain them. In this case he is certainly not confronted with the problems that are usually associated with the collection of original data.

METHODS OF COLLECTING SECONDARY DATA

Secondary data are those data which have already been collected by some other persons for their purpose. That is why it is said that secondary data are not collected but they are used. The secondary data can be obtained from various sources of informations. The sources of secondary data can broadly be classified under two heads : o o Published Sources Unpublished Sources

PUBLISHED SOURCES Published sources can be classified as official,(or national or international), Semi official and private Usually published data are available in : o o o o Various publications of the central, state & local governments Technical and trade journals Books, Magazines and newspaper Reports prepared by research scholars, universities and economists

UNPUBLISHED SOURCES Unpublished data may be found in dairies, letters, unpublished biographies and autobiographies and also may be available with scholars and research workers, trade associations, labour bureaus and other public or private individuals & organizations.

SAMPLE DESIGN
Bhopal has a population of approximately 15 lakhs. For carrying out any research or study on any subject it is very difficult to cover even 10% of the population. Therefore the sample size has to be decided for a meaningful conclusion. For designing the sample size, it was thought proper to cover a very small percentage of population in various age groups. The method used for sample technique was non probability convenience sampling method. This method was used because it was not know previously as to whether a particular person will be asked to fill the questionnaire. Convenient sampling is used because only those people were asked to fill the questionnaires who were easily accessible and available to the researcher. Considering the constraints, it was decided to conduct the study based on sample size of 100 people in specific age groups. Scientific method was not adopted in this study because of financial constraints and also because of lack of time, also the basic aim of doing the research was academic, hence most convenient way was selected.

LIMITATIONS OF STUDY
Limitation of the present study can be summarized below : 1. While designing the questionnaire it was kept in mind to gather more and more information from each target person. For the neither present nor descriptive questions could have served the purpose. Therefore the questionnaire contained in the open-ended questions. 2. The study was conducted in Bhopal City, which has a population of 15 lacs. The sample size was of 100 people only so that accuracy of data so collected could be absurd covered by circulation of questionnaire. 3. The accuracy of indications given by the respondents may not be consider adequate as whether the language used in the questionnaire is understand by the respondent cannot be taken for granted. 4. The study is based on the information gathered from the customers. Therefore in such case it is possible that the information supplied might be biased because the customer might have shown partiality towards their product. 5. Since the survey was limited to 100 customers it is rather difficult to give a precise conclusion but I have tried to the best of my capability to give the conclusion in a comprehensive manner.

DATA ANALYSIS & INTERPRETATION

The requirement of practical knowledge is essential in the field of management. For this purpose, I have taken competitive analysis as my research topic, which comes under preview of marketing. For a detailed study, I conducted a survey programme in which I contact 100 Mobile Users. I had the questionnaire filled from them so as to know their satisfaction and dissatisfaction on the aspects of the product. After receiving the filled questionnaire from the customers, graphs have been prepared with the help of tabulation.

DATA ANALYSIS & INTERPRETATION

Q1. Where did you come to know about the services AIRTEL A B C D E TV Advertisement Print Media Friends / Relatives Retailers Other Sources 7 24 32 35 2 TATA 36 20 10 20 14

40 35 30 25 No. of Respondents 20 15 10 5 0 TV Advertisement Print Media Friends / Relatives Retailers Other Sources

AIRTEL TATA

Interpretation : 36 respondents come to know about the TATA through TV Advertisement, 20 through printmedia,10 through friends, 20 through retailers and 14 through other source whereas 7 respondents come to know about the TATA through TV Advertisement, 24 through printmedia,32 through friends, 35 through retailers and 2 through other sources.

Q2. Why you have adopted to go for different service provider. AIRTEL 15 30 8 26 5 8 8 TATA 14 28 10 20 2 6 20

A B C D E F G

Customer service Network quality Sales support Communications Loyalty program Tariff plans Availability

30 25 20 No. of 15 Respondents 10 5 0
Cu stomr e se v r ice Sa s su p t le p or Loy ltyp og a a r rm Av ila ility a b

Interpretation : Out of 100 respondents 15 respondents adopted AIRTEL for Customer Service where as 14 respondents have adopted TATA for its customer Service.30 have chosen AIRTEL because of Network Quality, 8 because of customer support., 26 because of Communication and rest 8 because of tariff and Availability have chosen AIRTEL.

Q6.

How do you perceive the services provided by them in the following Criteria

A: Network Company TATA AIRTEL Poor 15 9 Fair 20 11 Satisfactory 26 20 Very good 30 45 Excellent 9 15

45 40 35 30 25 No. of Respondents 20 15 10 5 0 Poor Fair Satisfactory Very good Excellent Airtel BSNL

Interpretation : Network of AIRTEL is better than TATA according to the respondents. The reason is that because of more towers in the area surveyed AIRTEL Network is good.

B: Tariff Company TATA AIRTEL Poor 18 10 Fair 19 9 Satisfactory 23 21 Very good 30 46 Excellent 10 14

50 45 40 35 30 No. of 25 Respondents 20 15 10 5 0 Poor Fair Satisfactory Very good Excellent

Airtel BSNL

Interpretation : As per the data collected I found that the tarrif of TATA is higher than the AIRTEL so AIRTEL is more acceptable.

C: Customer service Company TATA AIRTEL Poor 5 3 Fair 10 16 Satisfactory 22 14 Very good 38 39 Excellent 25 28

40 35 30 25 No. of 20 Respondents 15 10 5 0 Poor Fair Satisfactory Very good Excellent Airtel BSNL

Interpretation : As per the data collected I found that the services provided by AIRTEL is better than TATA. Above graph shows that 28 people have rated the AIRTEL as excellent and 25 have rated TATA as excellent in services.

D: Value Added Services Company TATA AIRTEL Poor 19 9 Fair 18 10 Satisfactory 23 21 Very good 30 46 Excellent 10 14

50 45 40 35 30 No. of 25 Respondents 20 15 10 5 0 Poor Fair Satisfactory Very good Excellent

Airtel BSNL

Interpretation : Out of 100 respondents 30 says very good and 10 says excellent to TATA whereas 46 respondents says very good and 14 says excellent to AIRTEL for its Value Added Services.

E: Communication Company TATA AIRTEL Poor 20 9 Fair 15 11 Satisfactory 30 20 Very good 24 45 Excellent 11 15

45 40 35 30 25 No. of Respondent 20 15 10 5 0 Poor Fair Satisfactory Very good Excellent Airtel BSNL

Interpretation: As per the survey and the graph shown above I found that 24 respondents says very good and 11 says excellent to the communication of TATA where as 45 respondents says very good and 15 says excellent to the Communication of AIRTEL Network. So the Communication of AIRTEL is better than TATA.

Q7. Are satisfied with The TATA Prepaid ? a. Yes Options Yes No b. No. No. of Respondents 73 27

No

Yes

Interpretation : Out of 100 respondents 73 customers were satisfied with the TATA Prepaid and rest were not satisfied.

Q8.

Between TATA and AIRTEL which brand provide more satisfaction ? a. TATA b. AIRTEL c. both of them d. None of them Table 5.9 : Satisfaction Level with AIRTEL & TATA

Options TATA AIRTEL Both of Them None of Them

No. of Respondents 27 41 3 29

Graph V.9 : Satisfaction Level with AIRTEL & TATA

None of Them

Airtel

Both of Them

BSNL

Interpretation : AIRTEL is the most satisfactory brand with 41 satisfied respondents. 27 respondents are satisfied with TATA and rest 29 were satisfied with other service providers.

OBSERVATIONS & FINDINGS

During this study of done on the consumer satisfaction of AIRTEL I came across some points which as follows. 1. There is a very tough competition between TATA and AIRTEL in the market. 2. Advertisement and sales promotion are some factors which are influencing the selling. 3. Services of prepaid cards provided to the customers is another important factor. 4. 5. 6. 7. The tariff of AIRTEL and TATA are volatile. The main factor is the coverage of AIRTEL is wider than TATA. In Bhopal city 45 % AIRTEL users & 20% TATA users are there. Due to strong Advertising Strategies of TATA, AIRTEL is lagging in acquiring new Customers.

CONCLUSIONS

The completion of this project leads to the conclusion that the research has been very fruitful & rewarding for me. It has enhanced my knowledge of Customer Satifaction and Competitiveness. This research enabled me to come across people of different groups thereby I got the opportunity to understand the satisfaction and conception of varied people. I have compared AIRTEL and TATA and found that AIRTEL is the company who is providing higher satisfaction in terms of quality of network and tariffs. Thus on the whole this project has been an enriching experience and has taught me how to utilize my talent, powers, and to works under tension and pressure. I am happy as I performed my duty to best of my potential. At last I would like to conclude that AIRTEL is providing more satisfaction to its customers rather than TATA and other Services in Bhopal City in which survey was conducted.

SUGGESTIONS
In this era of tough competition in market it is compulsory for company to provide some types of facilities to the customer and retailers to acquire the best level of consumer satisfaction

AIRTEL is lagging in the field of advertisement in comparison to TATA and other companies. So more attention should be given towards advertisement. The advertisement should be at proper location Celebrity should be involved in Advertisement Different schemes should be introduced to attract retailers and customers. More and more retail outlets must be opened The SIM Card must be made available as the demand has increased. AIRTEL can provided big hoarding, canopy & customized board for prospective retailers.

BIBLIOGRAPHY
Books:

 Kotler, Philip. (1999):Marketing Management Prentice Hall Of India Pvt. Ltd., New Delhi. Kothari, C.R (2001):Research Methodology, Vishwa Publication., New Delhi Proctor Tony (2002) : Strategic Marketing, Vikas Publishing House Pvt. Ltd. New Delhi Saxena, Rajan. (2003):Marketing Management Tata Mcgraw-Hill

Publishing Company Limited. New Delhi

Sontakki, C.N. (1997):Marketing Management Kayali Publisher., New Delhi

Sharma,D.D(2002):Marketing Research,Sultan Chand Sons, New Delhi Verma H.V(1993):Marketing Of Services,Gobal Business Press, New Delhi Magazines : Business Today Business Week. Business World Websites : www.tataindicom.com

www.google.com

www.airtelworld.com

QUESTIONNAIRES Name: _________________________ Address: _______________________ Occupation: ____________________ Q. 1 For how many months you are using the TATA Indicome services. Q. 2 Have you ever used any other cellular services provided by different Service provider. Q. 3 If yes, for how much time. Q. 4 Where did you come to know about the services AIRTEL A B C D E TV Advertisement Print Media Friends / Relatives Retailers Other Sources TATA Mobile No: ____________ DoT No: ______________

Q. 5 why you have adopted to go for different service provider. AIRTEL A B C D E F G Customer service Network quality Sales support Communications Loyalty program Tariff plans Availability TATA

Q.6 How do you perceive the services provided by them in the following

Criteria: A: Network Company TATA AIRTEL B: Tariff Company TATA AIRTEL Poor Fair Satisfactory Very good Excellent Poor Fair Satisfactory Very good Excellent

C: Customer service Company TATA AIRTEL Poor Fair Satisfactory Very good Excellent

D: Value Added Services Company TATA AIRTEL Poor Fair Satisfactory Very good Excellent

E: Communication Company TATA AIRTEL Poor Fair Satisfactory Very good Excellent

Q8. Are satisfied with The TATA Indicom ? a. Yes b. No.

Q9. Between TATA Indicom and AIRTEL which brand provide more customer satisfaction ? a. TATA b. AIRTEL c. both of them d. None of them