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AFFILIATED TO
Candidates Declaration/Certificate
I hereby declare that the Work which is being presented in this report entitled comparative analysis of the marketing strategy of airtel and vodafone is an authentic record of my work carried out under the supervision of Mr Alok Singh The matter embodied in this report has not been submitted by me for the award of any other degree.
Dated
This is certifying that the above statements made by the candidate are correct to the best of my knowledge.
ACKNOWLEDGEMENT
I ANURAG KUMAR sincerely thankful to all those people who have been giving me any kind of assistance in the making of this project. . I wish my heartier thanks to principal management Prof. Alok Singh for his essential arrangement of a fruitful environment for research
I express my gratitude to Dr. Amit Kumar Pandey who has through her vast experience and knowledge has been able to guide me, both ably and successfully towards the completion of the project. I express my gratitude to SATYAM COLLEGE OF MANAGEMENT GHAZIABAD.
I would hereby, make most of the opportunity by expressing my sincerest thanks to all my faculties whose teachings gave me conceptual understanding and clarity of comprehension, which ultimately made my job more easy. Credit also goes to all my friends whose encouragement kept me in good stead. Their continuous support has given me the strength and confidence to complete the project without any difficulty. Last of all but not the least I would like to acknowledge my gratitude to the Respondents without whom this survey would have been incomplete.
I am also thankful to authority of Airtel & Vodafone for providing me the information
(ANURAG KUMAR)
CONTENTS
Page No. 01. Acknowledgement 02. Contents 03. Declaration 04. Introduction Telecom sector in India Airtel Vodafone Comparisons of marketing strategies between Airtel & Vodafone. 2627 28-42 45-63 64-72 73-74 75 76 77-81 82-87 2 3 4 5-25
05. Need of the study 06. Objectives of the study 07. Research Methodology 08. Data Analysis and Interpretation 09. SWOT analysis 10.Suggestion & Conclusion 11. Recommendations 12. Bibliography 13. Customer response towards Questionnaire 13. Annexure
INTRODUCTION
Telecom Sector in India
The 125 million telephones network is one of the largest communication networks in world, which continues to grow at a blistering pace. The rapid growth in the telecom sector can be attributed to the various pro-active and positive policy measures taken by the government as well as the dynamic and entrepreneurial spirit of the various telecom service providers both in private and public sector. The telecom sector has shown impressive growth during the past decade. Two striking features of this growth viz. increasing preference for mobile phones and higher contribution of private sector in the incremental growth have predominated the telecom sector. The share of mobile phones (including WLL mobile) has overtaken the share of landlines with 62% in the total number of phones. The private sector's contribution is also increasing rapidly. According to a recent report released by Telecom Regulatory Authority of India (TRAI), the total number of telephone subscribers in India crossed 800 million marks. A growth of 2.39% resulted in increase in number of subscribers to 806.13 million in January 2011 from 787.28 million in December 2010. Overall Tele-density in India is now 67.67%, however there is a decrease in share of urban subscribers from 67% to 66.79%, but there is and increases in share of rural subscribers from 33% to 33.21%.
Network Expansion:
Subscription in Urban Areas grew from 527.50 million in December 2010 to 538.38 million at the end of January 2011. Rural subscription increased from 259.78 million to 267.74. The growth of Rural Subscription (3.07%) is higher than the Urban Subscription (2.06%). The overall Urban tele density has increased from 147.88 to 150.67 and Rural tele density increased from 31.18 to 32.11. The telecom industry is one of the fastest growing industries in India. India has nearly 200 million telephone lines making it the third largest network in the world after China and USA. With a growth rate of 45%, Indian telecom industry has the highest growth rate in the world. History of Indian Telecommunications started in 1851 when the first operational land lines were laid by the government near Calcutta (seat of British power). Telephone services were introduced in India in 1881. In 1883 telephone services were merged with the postal system. Indian Radio Telegraph Company (IRT) was formed in 1923. After independence in 1947, all the foreign telecommunication companies were nationalized to form the Posts, Telephone and Telegraph (PTT), a monopoly run by the government's Ministry of Communications. Telecom sector was considered as a strategic service and the government considered it best to bring under state's control. The first wind of reforms in telecommunications sector began to flow in 1980s when the private sector was allowed in telecommunications equipment manufacturing. In 1985, Department of Telecommunications (DOT) was established. It was an exclusive provider of domestic and longdistance service that would be its own regulator (separate from the postal system). In 1986, two wholly government-owned companies were created: the Videsh Sanchar Nigam Limited (VSNL) for international telecommunications and Mahanagar Telephone Nigam Limited (MTNL) for 7
service
in
metropolitan
areas.
In 1990s, telecommunications sector benefited from the general opening up of the economy. Also, examples of telecom revolution in many other countries, which resulted in better quality of service and lower tariffs, led Indian policy makers to initiate a change process finally resulting in opening up of telecom services sector for the private sector. National Telecom Policy (NTP) 1994 was the first attempt to give a comprehensive roadmap for the Indian telecommunications sector. In 1997, Telecom Regulatory Authority of India (TRAI) was created. TRAI was formed to act as a regulator to facilitate the growth of the telecom sector. New National Telecom Policy was adopted in 1999 and cellular services were also launched in the same year. Telecommunication sector in India can be divided into two segments: Fixed Service Provider (FSPs), and Cellular Services. Fixed line services consist of basic services, national or domestic long distance and international long distance services. The state operators (BSNL and MTNL), account for almost 90 per cent of revenues from basic services. Private sector services are presently available in selective urban areas, and collectively account for less than 5 per cent of subscriptions. However, private services focus on the business/corporate sector, and offer reliable, high- end services, such as leased lines, ISDN, closed user group and videoconferencing.
Cellular services can be further divided into two categories: Global System for Mobile Communications (GSM) and Code Division Multiple Access (CDMA). The GSM sector is dominated by Airtel, Vodfone-Hutch, and Idea Cellular, while the CDMA sector is dominated by Reliance and Tata Indicom. Opening up of international and domestic long distance telephony services are the major growth drivers for cellular industry. Cellular operators get substantial revenue from these services, and compensate them for reduction in tariffs on airtime, which 8
along with rental was the main source of revenue. The reduction in tariffs for airtime, national long distance, international long distance, and handset prices has driven demand
Wireless Service: In Wireless (GSM, CDMA & FWP) segment airtel added 3301379 new subscribers, which is the highest in terms of subscriber addition in January 2011. Check out the chart below to know Service Providers share in net additions during the month of January 2011.
Subscriber-additions-Jan-2011
Wire line Subscribers: In Wireline Segment BSNL still rules the market with 72.91% share of the total market.
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Teledensity:
Tele density in India has reached 67.67% during January 2011. The urban tele density is 150.67% and the rural tele density is 32.11%. The wireless tele density is 64.74%. Active subscriber base in VLR is 548.66 million. The proportion of VLR subscriber is approximately 71.14% of the total wireless subscriber base reported by the service providers. Private operators hold 87.88% of the wireless market share where as BSNL and MTNL, two PSU operators hold only 12.22% market share. The Broadband subscriber base has increased from 10.92 million in December 2010 to 11.21 million in January 2011.
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SAIRTEL
Bharti Airtel limited is a leading global telecommunications company with operations in 19 countries across Asia and Africa. The company offers mobile voice & data services, fixed line, high speed broadband, IPTV, DTH, turnkey telecom solutions for enterprises and national & international long distance services to carriers. bharti airtel has been ranked among the six best performing technology companies in the world by business week. bharti airtel had 200 million customers across its operations. Airtel is a brand of telecommunication services in India operated by Bharti Airtel. Airtel is the largest cellular service provider in India in terms of number of subscribers. Bharti Airtel owns the Airtel brand and provides the following services under the brand name Airtel: Mobile Services (using GSM Technology), Broadband & Telephone Services (Fixed line, Internet Connectivity (DSL) and Leased Line), Long Distance Services and Enterprise Services (Telecommunications Consulting
for corporate). It has presence in all 23 circles of the country and covers 71% of the current population (as of FY07). Bharti Airtel formerly known as Bharti Tele-Ventures LTD (BTVL) is the largest cellular service provider in Indi a, with more than 110 million subscribers as of 2009. With this, Bharti is now the world's third-largest, single-country mobile operator and sixth-largest integrated telecom operator. It also offers fixed line services and broadband services. It offers its 14
TELECOM services under the Airtel brand and is headed by Sunil Bharti Mittal. The company also provides telephone services and Internet access over DSL in 14 circles. It also acts as a carrier for national and international long distance communication services. The company has a submarine cable landing station at Chennai, which connects the submarine cable connecting Chennai and Singapore. The businesses at Bharti Airtel have always been structured into three individual strategic business units (SBU's) - Mobile Services, Airtel Tele media Services & Enterprise Services. The mobile business provides mobile & fixed wireless services using GSM technology across 23 telecom circles while the Airtel Tele media Services business offers broadband & telephone services in 95 cities and has recently launched a Direct-to-Home (DTH) service, Airtel Digital TV. Shahrukh Khan is the brand ambassador of the mobile company and Kareena Kapoor and Saif Ali Khan are the brand ambassadors of the DTH Company. The company provides end-to-end data and enterprise services to the corporate customers through its nationwide fiber optic backbone, last mile connectivity in fixed-line and mobile circles, VSATs, ISP and international bandwidth access through the gateways and landing station. Globally, Bharti Airtel is the 3rd largest in-country mobile operator by subscriber base, behind China Mobile and China Unicom. In India, the company has a 24.6% share of the wireless services market, followed by 17.7% for Reliance Communications and 17.4% for Vodafone Essar. In January 2010, company announced that Manoj Kohili, joint managing director and chief executive of Indian and South Asian operations, will become the chief executive of the international business group from 1st of April 2010. He will be overseeing Bharti's overseas business. Deputy Chief Executive Sanjay Kapoor will replace Mr. Kohli and will be the CEO with effective from April 1 2010.
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Bharti Airtel, announced launch of its 3G services in capital city of India, New Delhi and in NCR as well. Airtel is already operating 3G mobile telephone in 7 other cities in India namely, Begaluru, Coimbtore, Mysore, Udipi, Jaipur, Chennai and Manipal. Atul Bindal, Bharti Airtel (Mobile Services), said reporters that by the end of this month, Airtel will launch its services in all 13 license circles. The company also deploys, owns and manages passive infrastructure pertaining to telecom operations under its subsidiary Bharti Infratel Limited. Bharti Infratel owns 42% of Indus Towers Limited. Bharti Infratel and Indus Towers are amongst top providers of passive infrastructure services in India.
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VODAFONE ESSAR
Vodafone Essar, previously Hutchison Essar is a cellular operator in India that covers 16 telecom circles in India Despite the official name being Vodafone Essar, its products are simply branded Vodafone. It offers both prepaid and postpaid GSM cellular phone coverage throughout India and is especially strong in the major metros. Vodafone Essar provides2G services based on 900 MHz and 1800 MHz digital GSM technology, offering voice and data services in 16 of the country's 23 license areas. Vodafone has not revealed any details of its 3G data plans but its customers can experience 3G by filling a form available on vodafone.in. From this it seems Vodafone will initially offer free 3G trial before formally announcing its 3G data plans.
Vodafone itself was formed in 1982 as a joint venture between Racal Electronics plc's subsidiaries Racal Strategic Radio Ltd (who won one of two UK cellular telephone network licenses) along with Millicom and the Hambros Technology Trust. In this arrangement Racal owned 80%, Millicom 15% and Hambros 5%. The network was known as Racal Vodafone, with the Vodafone name being derived from the firm's goal of establishing a voice and data services over cellular telecommunication networks. Hence VO represented voice and DA symbolized data yielding the name Vodafone. Vodafone was launched on 1 January 1985 and later that year Racal Strategic Radio was renamed Racal Telecommunications Group Limited in 1985. A year later, on 29 December 1986
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Racal Electronics bought out the minority shareholders of Vodafone for GB110 million. In September 1988 the company was again renamed Racal Telecom and on 26 October 1988 Racal Electronics floated 20% of the company a flotation that valued Racal Telecom at GB1.7 billion. On 16 September 1991 Racal Telecom was demerged from Racal Electronics as Vodafone Group and the mobile telephony giant was born. During the mix 1990s Vodafone began to consolidate itself on the British high-street. In July 1996 Vodafone acquired the two thirds of Talkland it did not already own for 30.6 million. On 19 November 1996, in a defensive move, Vodafone purchased Peoples Phone for 77 million, a 181 store chain whose customers were overwhelmingly using Vodafone's network. In a similar move the company acquired the 80% of Astec Communications that it did not own, a service provider with 21 stores. This made Vodafone a very visible presence on the British high street and significantly increased the company's share of UK mobile customers.
In 1997 Vodafone introduced its new corporate Speechmark logo. This represents a quotation mark within a circle. With the 'O's in the Vodafone logotype being opening and closing quotation marks, suggesting conversation
Vodafone Essar has about 116 million 2G customers in India, trailing Bharti Airtel and Reliance Communications. Vodafone owns 67% of Vodafone Essar, with Indias Essar Group holding the remainder. Essar Group has an option to sell its entire stake to Vodafone for $5 billion by May 2011.
Vodafone was the highest bidder to acquire the 3G License after the Bharti Airtel tele ventures. Because of the high bidding prices as none of the operator was able to secure the 3G Spectrum 18
for all circles. Vodafone acquired the 3G Spectrum license for 2.5 Billion US Dollars which is approximately 11,617 crore Indian Rupees. Regions where Vodafone will provide 3G Spectrum services Mumbai , Delhi, West Bengal, Uttar Pradesh East, Maharashtra, Gujrat, Tamil Nadu, Kolkata, Haryana. As these circles are considered to be the most important in Telecom Revenue generation since Vodafone Essar Group generates 67% of its revenue from the above circle. To announce the launch of its 3G offering, Vodafone once again used its famous mascot, Zoo zoo. And to denote the huge shift in technology from 2G to 3G, the Zoo Zoo has become 'Super' Zoo Zoo to communicate faster, smarter and better services with Vodafone 3G. Zoo zoos" in Vodafone TV ads for IPL may resemble animated cartoon characters with an alien look or simply a stupid egg-head character with disproportional white bodies and black dots for eyes and mouth. These Zoo zoo characters, in case you haven't seen them yet, have been created by O&M for Vodafone to convey different value added services offered by the mobile phone company including phone Backup, cricket alerts, etc. This was something which was created purely out of textbook and is totally an Indian idea. The characters are such that they lead simple lives, speak insane and incomprehensible language and move in a certain way with human emotions. But the interesting part is that Zoo zoos are not animated characters but are actually slim women actors from local Mumbai theatres, dressed in white costumes that are stuffed with foam to portray the characters.
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Prakash Varma, who directed the Vodafone ZooZoo commercials, told Afaqs that they only had women and occasionally children as their main cast to keep the hands and legs thin of the Zoozoo characters.
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Vodafone making and changing the strategies to capture the market shares
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Target marketing:
People who living in cities and towns. Poor or middle income group people. Youngsters in big cities. Businessmen.
Positioning:
Creating brands (Sharukh khan & Sachin Tendulker). Ads and promotions. Promotion for study of poor childrens.
Marketing Mix:
Price Place Product Promotion : : : : low price strategy maximum outlets and service centers verities available for various groups various schemes for pre-paid and post-paid
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Target Marketing:
People living in small towns and villages. Poor and middle income groups. Youngsters in big cities. Businessmen
Positioning:
Creating brands Ads and promotions
Marketing Mix:
Price Place Product Promotion : : : : low price strategy. maximum outlets and service centers. verities available for various groups. various schemes for pre-paid and post-paid.
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OBJECTIVE:
1. How people of different age group respond to Advertisement. 2. Positioning strategies use by telecom companies and their impact on Customer. 3. To find out relative customer perception. 4. To find out which telecom company have good plans and what type of Plans subscriber like. 5. Role of tariff plans on the buying behavior of the customer. 6. To Study the share of Airtel & Vodafone industries.
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RESEARCH METHODOLOGY
Achieving accuracy in any research requires a deep study regarding the subject. The prime objective of the project is to compare Airtel with the existing competitor (Vodafone) in the market and the impact of WLL on Airtel. The research methodology adopted is basically based on primary data via which the most recent and accurate piece of first hand information could be collected. Secondary data has been used to support primary data wherever needed. Primary data was collected using the following techniques Questionnaire Method Direct Interview Method and Observation Method
The main tool used was, the questionnaire method. Further direct interview method, where a face-to-face formal interview was taken. Lastly observation method has been continuous with the questionnaire method, as one continuously observes the surrounding environment he works in.
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There are two types of methods of Data Collection: PRIMARY DATA SECONDARY DATA
Primary data was collected using the following techniques Questionnaire Method Direct Interview Method and Observation Method
The main tool used was, the questionnaire method. Further direct interview method, where a face-to-face formal interview was taken. Lastly observation method has been continuous with the questionnaire method, as one continuously observes the surrounding environment he works in.
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DATA USED FOR THE RESEARCH WORK WAS PRIMARY IN NATURE. PRIMARY DATA: Primary data is that which is collected for the first time and thus happen to be originated in character. QUESTIONNAIRE SURVEY: In the studies a questionnaire is prepared. The Questionnaire consists of 15 Questions.
SECONDARY DATA Secondary data refer to the data that has been already collected. The secondary data which has been used to carry out this study are as follows: Books, Journals, Magazines, Newspaper. Industry report Companys Internet Sites. some other relevant study material and Websites. SAMPLE UNIT: - Raj nagar, Sanjaynagar, Navyug Market in Ghaziabad The Research process was done by interacting with number of customer during the activities performed which included Market cold calling, Canopies, etc. Sample design consists of Random Sampling. SAMPLE SIZE: - 50 PEOPLE
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METHOD OF COLLECTION: Field procedure for gathering Primary data included observation and interview schedule in which the Questionnaire was filled by the interviewer. Personal Interview through self Administered survey was done to collect the data, Market research was undertaken, that was accomplished by performing various activities designed.
THE QUESTIONNAIRE WAS FORMULATED BY KEEP IN MIND THE FOLLOWING POINTS: Giving the respondents. Clear comprehension of the Question. Inducing the respondents to co0operate. Giving instruction as to what is needed. Identify the needs to be known.
further classified under "A," "B" and "C," with the "A" circle being the most attractive and "C" being the least attractive. The regulatory body at that time the Department of Telecommunications (DOT) allocated two cellular licenses for each metro and circle. Thirtyfour licenses for GSM900cellular services were auctioned to 22 firms in 1995. The first cellular service was provided by, Modi Telstra in Kolkata in August 1995. For the auction, it was stipulated that no firm can win in more than one metro, three circles or both. The circles of Jammu and Kashmir and Andaman and Nicobar had no bidders, while West Bengal and Assam had only one bidder each. In 1996, the Telecom Regulatory Authority of India (TRAI) bill was introduced in the Lok Sabha, and the president officially announced the TRAI ordinance on 25 January 1997. The government decided to set up TRAI to separate regulatory functions from policy formulation, licensing and telecom operations. Prior to the creation of TRAI, these functions were the sole responsibility of the DOT. High license fees and excessive bids for the cellular licenses put tremendous financial burden on the operators, diverting funds away from network development and enhancements. As a result, by1999 many operators failed to pay their license fees and were in danger of having their licenses withdrawn. In March 1999, a new telecom policy was put in place (New Telecom Policy [NTP] 1999). Under this new policy, the old fixed-licensing regime was to be replaced by a revenue-sharing scheme whereby between 8-12 percent of cellular revenue were to be paid to the government.
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Indian Cellular market immediately after the first round of licensing in 1994-96 was beset by several problems for 3 - 4 years till the New Telecom Policy of 1999 was announced. Some of these roadblocks / current position is tabulated below
ROADBLOCKS
CURRENT POSITION High license fees
Migration to revenue sharing mode in 1999 mitigates high initial fund requirements for payment of license fees. Inadequately funded businesses / weak and fragmented promoters Businesses that have since been adequately funded growing at over 60% per annum, while businesses with weak promoters continue to languish - spate of acquisitions / mergers, with 4/5major groups emerging in the last one/two years.
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Issues relating to unfavorable interconnect terms for private operators, pass through income, intra circle long distance, spectrum availability and allocation and the like remained unresolved for long periods. Interconnect terms since rationalized, risks on pass through income to DOT / BHARTI (Mahanagar Telecom Nigam Ltd.) resolved to the satisfaction of all parties with changes in methodology / revenue sharing, intra circle long distance allowed, spectrum availability cleared with vacation of frequencies for usage by GSM operators.
The interconnection regime between cellular operators and fixed-line operators is still biased against the former. Despite the recent gains of the cellular industry, not everything is rosy. The cellular penetration rate is still very low at 0.8 percent in a nation of over one billion people. In recent years, many foreign companies had pulled out from their cellular joint ventures in India due to the difficult operating environment and bureaucracy. In 1999 alone, Swisscom pulled out from Sterling Cellular, Telstra from Modi Telstra and both the Telecom Organization of Thailand and Jasmine International from JT Mobile. In 2000, Telecom Malaysia sold its stake in Usha Martin Telecom, and both Shinawatra of Thailand and Bezeq exited from Fascel. In June 2001, British Telecom exited from Bharti Cellular. Bell South International has also indicated its intention to pull out from Skycell Communications, and Hong Kong-based Distacom is seeking to sell its stake in Spice Communications. First Pacific's (based in Hong Kong) continued commitment to Escotel is uncertain, and the former is reviewing various options. The string of sell-outs notwithstanding, there has been a merger and acquisition wave sweeping across the Indian cellular industry in recent years. Hong Kong-based Hutchison Whampoa, via Hutchison Telecommunications (HK), acquired major stakes in Sterling Cellular
(December1999), Usha Martin Telecom (mid-2000) and Fascel (September 2000). Through a partnership with local company, Kotak Mahindra Finance, Hutchison Whampoa practically controls Fasceland Usha Martin Telecom, thus circumventing the 49 percent limit on foreign ownership in Indian cellular operators. Hutchison Whampoa is also the controlling shareholder of Hutchison Max Telecom. Not to be outdone, Bharti Enterprises another major cellular player acquired control of JT Telecom, which was later renamed Bharti Mobile (December 1999), and Skycell Communications renamed Bharti Mobinet (August 2000). Bharti also
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acquired the Punjab license of Essar and started operations, giving competition to the lone operator there, Spice Communications. Going forward, Bharti is likely to merge all its cellular companies into one entity. Five companies together bid Rs16.3 billion to bag the licenses for the fourth operator slots in four metros and 13 circles. Bharti emerged as the No. 1 bidder with eight new licenses, followed by Escotel with four, Hutchison with three, and Vodafone and Idea cellular with one each. Bharti and Hutchison have already commenced operations in all the circles while Idea is set to launch in Delhi. Escotel and Vodafone have not made any headway. BHARTI, the third cellular operator for Delhi and Mumbai, started services in March 2001. BSNL, as the third nationwide cellular operator, launched services in Kolkatta and Bihar in January 2002.This was followed by Tamil Nadu in July 2002. A nationwide launch was scheduled for 2 October2002. However, this has been postponed until after mid October. Once BSNL rolls out its service, most telecom circles will have four cellular operators. There will be tremendous competitive pressure, which will result in lower tariffs. Future rate cuts are expected, which will drive demand, together with falling handset prices and the introduction of prepaid services. In the midst of declining interest in technology stocks, Bharti came out with its long-awaited initial public offering (IPO) in January 2002. Leveraging on the success of its cellular service, the company got a very good response from the primary market. The total size of the IPO was 185million shares at a floor price of Rs10. The issue was oversubscribed by more than 2.5 times, netting Rs8.3 billion. This will be used to fuel its investment in long-distance, basic and cellular services.
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As of October 2002, only BPL Mobile has launched commercial general packet radio service (GPRS) in Mumbai. However, large-scale uptake remains elusive. While both Bharti and Idea have GPRS-enabled networks, there is caution on their part to launch the service. With hardly any applications, the success of GPRS remains a question. In 2005 Hutchison Essar an Indian and hongkong telecommunication alliance was taken over by the United Kingdom based telecommunication company name Vodafone telecomm services and comes with the name of Vodafone Essar.
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margins, some are now seriously looking at the enterprise segment for provisioning superior services. Cost-centered solutions like closed user group (CUG), value-adds like unified messaging and instant alerts are being offered. A variety of mobile applications are finding takers among the enterprise segment. Bharti is in the process of introducing a facility to fleet management companies so that they can improve the efficiency of trucks or buses by tracking movement and ensuring higher-use, accurate route planning. Premium automakers are also installing a global system for mobile communications inside a vehicle to help trace lost vehicles and track down stolen cars. Corporations can choose enhanced services like user-defined call routing to prevent misuse. Call scan be barred, limiting access to select numbers and diverting calls to one single number. Broadcasting services are also quite popular, especially among fast food centers that have a central number. Group SMS is quite popular, especially among enterprises both in the service as well as the fast-moving consumer goods (FMCG) segment that have a large field force and need to provide regular updates on inventory status, discount schemes and movement of goods from warehouse to the retail outlet. Banks too find bulk SMS service very useful to forward transactional alerts to their customers. 2.3 FUTURE TRENDS AND DEVELOPMENT There will be more competition, forcing operators to constantly focus on differentiations to maintain their lead. The implementation of enhanced networks like 2.5G will enable operators to offer data services. This is an opportunity to customize and differentiate better
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The entry of state-run operators like BSNL and BHARTI means that prices will no longer be controlled, thus there is less chance of a cartel being formed.
Network coverage in terms of geographic spread and quality of coverage is crucial especially for the business subscriber.
The bigger the service provider's national presence, the better it is for businesses. On the roaming front, signing up with a national operator is advantageous.
Limited mobility wireless in local-loop services (by fixed network service providers) will be a disadvantage for cellular operators in the short term. Consequently, operators need to streamline their customer relation activities and adopt aggressive subscriber acquisition and retention strategies
The National Telecom Policy of 1994 document, which laid out broad policy guidelines rather than a series of action points. Like other policies, it sought to achieve the impossible in finite time like improve quality of service and its availability, wide coverage (a phone in every village), at reasonable rates, etc. The targets in quantifiable terms were installation of 9.5mn additional lines, telephone on demand by 1997, and a PCO pop of 500. The Eighth Plan had also allowed private operators in value added services. To facilitate licensing, the nation was divided into 20 circles (akin to a state) for basic and 21 circles for cellular telephony. Mumbai falls in Maharashtra circle and Delhi in itself a circle.
The basic premise on which competition has been introduced is that every circle will have one private operator apart from DoT/ BHARTI for basic and two operators for cellular. DoT/ BHARTI have the option to become the third cellular operator in future.
Government did not achieve most of its stated targets. The basic theme, which was broadening the reach of telephony in India, has not been met. Even liberalization policies were not implemented properly. The regulator TRAI was set up after delays and confusion and even after its creation, DoT continued to fight with it in courts. It was also affected by the resource crunch, and financing options like BOT, BOOT and BOLT was not used at all. The major policy direction it showed was to allow private sector entry in both basic and value added services. The intention, though noble failed to achieve its goals because of improper implementation, the economic costs are still borne by the end user. The telecom sector has witnessed some fundamental structural and institutional reforms in the past decade. Telecom equipment manufacturing was completely deregulated in 1991. Value42
added services (including cellular services) were thrown open to private sector participation in 1992.Basic services were opened to private participation in 1994 by dividing the country into 21telecom Circles and allowing one private operator per Circle to compete with DOT. An independent telecom regulatory Authority of India was set up in 1997. A new Policy for Internet Service Policy Providers (ISPs) was announced in 1998 allowing independent service providers to enter the sector ending the earlier monopoly of VSNL. Reorganization of DOT, separating policymaking function and service provision and corporatization of DOT's operational network are two major institutional reforms, which need to be implemented.
To these 50 people a questionnaire was given, the questionnaire was a combination of both open ended and closed ended questions. The date during which questionnaires were filled. Some dealers were also interviewed to know their prospective. Interviews with the managers of GSM service providers were also conducted. Finally the collected data and information was analyzed and compiled to arrive at the conclusion and recommendations given
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The above figure will be show the number of subscriber according to the circle in whole over the India & the just next figure shows revenue of the different circle by different service provider.
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The mobile subscription is exploding in India with 22.62 million mobile phone subscribers added in the month of December 2011alone! Bharti Airtel has the highest wireless mobile subscribers with 152.5 million, followed by Vodafone.
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The below figure will be shows the Mobile Number porting IN & OUT trends.
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OCCUPATIONAL GRAPH
As the above graph shows that 55% of the total people interviewed are working. So, these people are the ones who are the maximum users of mobile phones. They are the young executives, managers, Tele - callers etc. who require mobile for their official purposes. The next category is the households, who are either housewife, small units which operate from their homes etc. They are 20% of the whole. The next segment is the students. They are 15% of the whole. And 10% of the whole is categories who are the professionals.
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These are the total market share of mobile user or people captured by the mobile provider company. There two major company in mobile phone service sector Vodafone and Airtel who respectively hold the market share with other company as 17% and 20% of total market user segment of mobile customer.
As the above graph clearly shows that customer services at Airtel seems poor. 60% of the people are dissatisfied with the customer services provided by Airtel. They are the ones who have the maximum share in the market but they are lagging behind in the customer services. 10% of the people were fully dissatisfied with the customer services of Airtel. This could leave an impact on the mind of the consumer. He can even switch over his brand. 20% of the people seemed partially satisfied with the customer services and only 10% seem to be fully satisfied with Airtels customer services, which is a very small amount.
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People on an average spend RS 500 per month as their mobile phone expense. 64% people spend this amount. 24% people spend RS 300 per month as their monthly mobile expense. And the 64
remaining 12% had an expense more than RS 1000, they could the ones having sim connections or having cash cards and having a lot of business calls on their mobiles.
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SWOT analysis is a tool for auditing an organization and its environment. It is the first stage of planning and helps marketers to focus on key issues. SWOT stands for strengths, weaknesses, opportunities, and threats. Strengths and weaknesses are internal factors. Opportunities and threats are external factors. A scan of the internal and external environment is an important part of the strategic planning process. Environmental factors internal to the firm usually can be classified as strengths (S) or weaknesses (W), and those external to the firm can be classified as opportunities (O) or threats (T). Environmental analysis identifies opportunities and threats. And Organizational analysis identifies strengths and weaknesses. Altogether they are commonly is referred to as a SWOT analysis. SWOT analysis means analyzing strengths, weaknesses, opportunities and threats. The SWOT analysis provides information that is helpful in matching the firm's resources and capabilities to the competitive environment in which it operates. It is a useful strategic planning tool. It is based on the assumption that if managers carefully review a internal useful strengths strategy for and weaknesses and external threat can and be
opportunities,
ensuring
organizational
success
Strength:
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A firm's strengths are its resources and capabilities that can be used as a basis for developing a competitive advantage.
It is an important organizational resource which enhances a company, competitive position. Some of the internal strengths of an organization are: Distinctive competence in key areas Manufacturing efficiency like exclusive access to high grade natural resources Skilled workforce Adequate financial resources Superior image and reputation such as strong brand-names Economies of scale Superior technological skills Insulation from strong competitive pressures Product or service differentiation Proprietary technology such as patents and resultant cost advantages from proprietary know-how favorable access to distribution networks
Weaknesses
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A weakness is a condition or a characteristic which puts the company at disadvantage. The absence of certain strengths may be viewed as a weakness. Weaknesses make the organization vulnerable to competitive pressures.
Weaknesses require a close scrutiny because some of them can prove to be fatal. Some of the weaknesses to be reviewed are: No clear strategic direction Outdated facilities Lack of innovation is Complacency lack of patent protection Poor research and developmental programmes. Lack of management vision, depth and skills Inability to raise capital Weaker distribution network Obsolete technology Low employee morale Poor track record in implementing strategy Too narrow a product line Poor market image Higher overall unit costs relative to competition.
A weak brand name Poor reputation among customers High cost structure lack of access to the best natural resources lack of access to key distribution channels
Opportunities
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The external environmental analysis may reveal certain new opportunities for profit and growth. An opportunity is considered as a favorable circumstance which can be utilized for beneficial purposes. It is offered by outside environment and the management can decide as to how to make the best use of it. Such an opportunity may be the result of a favorable change in any one or more of the elements be that by constitute a the external approach environment. by the It may also in
created
proactive
management
molding the environment to its own benefit. Some of the opportunities are: Strong economy Possible new markets and an unfulfilled customer need Emerging new technologies Complacency among competing organizations Vertical or horizontal integration Expansion of product line to meet broader range of customer needs removal of international trade barriers Loosening of regulations
Threats
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Changes in the external environmental also may present threats to the firm. Management should anticipate such possible threats and prepare its strategies in such a manner that any such threat is neutralized. Some examples of such Threats include: Shifts in consumer tastes away from the firm's products Emergence of substitute products New regulations Increased trade barriers Entry of lower cost foreign competitors Cheaper technology adopted by rivals Rising sales of substitute products Shortages of resources Changing buyer needs and preferences Recession in economy Adverse shifts in trade policies of foreign governments Adverse demographic changes
The SWOT Matrix A firm need not necessarily pursue the more lucrative opportunities. Rather, it may have a better chance at developing a competitive advantage by identifying a fit between the firm's strengths and upcoming opportunities. In some cases, the firm can overcome a weakness in order to prepare itself to pursue a compelling opportunity.
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SWOT
analysis
involves
evaluating
companys
internal
environment in terms Of strengths and weaknesses and the external environment in terms of opportunities and threats and formulating strategies that take advantage of all these factors.
Strengths
Bharti Airtel has more than 65 million customers (July 2008). It is the largest cellular provider in India, and also supplies broadband and telephone services - as well as many other telecommunications services to both domestic and corporate customers. Other stakeholders in Bharti Airtel include Sony-Ericsson, Nokia - and Sing Tel, with whom they hold a strategic alliance. This means that the business has access to knowledge and technology from other parts of the telecommunications world. The company has covered the entire Indian nation with its network. This has underpinned its large and rising customer base.
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Weaknesses
An often cited original weakness is that when the business was started by Sunil Bharti Mittal over 15 years ago, the business has little knowledge and experience of how a cellular telephone system actually worked. So the start-up business had to outsource to industry experts in the field. Until recently Airtel did not own its own towers, which was a particular strength of some of its competitors such as Hutchison Essar. Towers are important if your company wishes to provide wide coverage nationally. The fact that the Airtel has not pulled off a deal with South Africa's MTN could signal the lack of any real emerging market investment opportunity for the business once the Indian market has become mature.
Opportunities
The company possesses a customized version of the Google search engine which will enhance broadband services to customers. The tie-up with Google can only enhance the Airtel brand, and also provides advertising opportunities in Indian for Google. Global telecommunications and new technology brands see Airtel as a key strategic player in the Indian market. The new iPhone will be launched in India via an Airtel distributorship. Another strategic partnership is held with BlackBerry Wireless Solutions. Despite being forced to outsource much of its technical operations in the early days, this allowed Airtel to work from its own blank sheet of paper, and to question industry approaches and practices - for example replacing the Revenue-Per-Customer model with
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a Revenue-Per-Minute model which is better suited to India, as the company moved into small and remote villages and towns. The company is investing in its operation in 120,000 to 160,000 small villages every year. It sees that less well-off consumers may only be able to afford a few tens of Rupees per call, and also so that the business benefits are scalable - using its 'Matchbox' strategy. Bharti Airtel is embarking on another joint venture with Vodafone Essar and Idea Cellular to create a new independent tower company called Indus Towers. This new business will control more than 60% of India's network towers. IPTV is another potential new service that could underpin the company's long-term strategy.
Threats
Airtel and Vodafone seem to be having an on/off relationship. Vodafone which owned a 5.6% stake in the Airtel business sold it back to Airtel, and instead invested in its rival Hutchison Essar. Knowledge and technology previously available to Airtel now moves into the hands of one of its competitors. The quickly changing pace of the global telecommunications industry could tempt Airtel to go along the acquisition trail which may make it vulnerable if the world goes into recession. Perhaps this was an impact upon the decision not to proceed with talks about the potential purchase of South Africa's MTN in May 2008. This opened the door for talks between Reliance Communication's Anil Ambani and MTN, allowing a competing Inidan industrialist to invest in the new emerging African telecommunications market. Bharti Airtel could also be the target for the takeover vision of other global telecommunications players that wish to move into the Indian market. 74
Weaknesses
Negative return on assets (ROA) underperforms key competitors like AT&T, BT Group, Deutsche Telecom. US business not nearly as strong as European/rest of the world operations 80% of its business is generate in Europe (see below for explanation)
Opportunities
Focus on cost reductions improving returns Majority stake in Hutchison Essar in India Research and development of new mobile technologies
Threats
Highly competitive market Still lags behind major competitors in the US Extremely high penetration rates in key European markets European Union regulation on cross-border cell phone usage by customers 75
SUGGESTIONS
Following are the few suggestions to AIRTEL & VODAFONE for improving the market share and image of the products concerned. PRODUCT *Modification must be brought about in AIRTEL, in terms of quality. Its demand should be increased. 2. PLACE * The brands must be made available easily in, PCO & general stores. 3. PROMOTION *Company must undertake extensive promotional activities like advertisements must be released in different Medias to create brand awareness. *Free samples should be distributed among the prospects. Sales promotion tools like gifts, contests and coupons must be given to retailers as well as customers and prospects. * Catalogues should be distributed among customers. 4. PRICE * Price should be as competitive as other company maintains * Distribution of new connection should be in reach of customer pocket
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CONCLUSION
After analyzing the findings of the research, I can conclude that Airtel lagged behind its competitors as far as customer service and availability is concerned. The maximum no. of people who use the mobile is in the age group of 20 to 28.Cash cards are the most popular type of mobile connections, as they are consumer friendly and recharging the connection is not a problem. Maximum no. of people spends RS 500 on their connections. As Airtel is the only company having the maximum no of mobile connections so it must seriously look into the loop holes of the existing customer service department. As we know that now Airtel has already launched its product with logo Aisi azaadi aur kahan has already became popular in market. So we can say that in spite of so many competitors in the market Airtel is having a good position just because every time, it tries its best to understand then Need of its important customers. From the comparison and deep analysis of every aspect of business of both the companies we can conclude that bharti Airtel has to more work in every field of communication business. It is the time not only to survive but to sustain in the market for a long time. For this Airtel has to work on its all marketing strategies, marketing, promotion, brand image.etc. Airtel has to take Vodafone. Very seriously and update its own strategies from time to time and when the need arises. With aggressive marketing strategies Airtel has to target rural India as 70% of population of India lives in these areas. The other segment may be costumers of all age groups.
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RECOMMENDATIONS
I have made following recommendation to the company after doing the Research there: The company should modify its credit policy as they only target the cash paying customers who are not easy to trace. The company should emphasis more on the quality of Pharmaceuticals Products it was mostly claimed by the exporters that their receipts from company doesnt matches with the samples quality shown before giving orders. The company should make its marketing strategy flexible enough in order to face Competition. The company should keep an eye on the proper delivery of the goods to exporter on time, as it has been recommended by exporters to make the delivery on time. The company rate policy must be flexible enough to catch new customers because if company offers lower price to a new customer then he may continue buy the goods and can be a permanent customer for the company. The company should offers such rate in the market so that it may able to catch a bigger market share and it should be able to compete with the local traders and commission agents while having a brand name. The company should take the opinion of exporters from time to time to know what problems they are facing from the companys side. And if any change they require in present supplying condition?
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BIBLIOGRAPHY
Books:
Indian Telecom Industry by Mr. Nasreen Taheer Marketing Research G.C. Beri Research Methodology C.R Kothari Principal of Marketing Philip kotler
Magazine:
Business India
Web Resources:
www.trai.gov.in www.vodafone.co.in/t-aboutusttsl-organization.aspx www.airtel.co.in/webapp/Communications/rcom/Aboutus/a boutus_home.jsp www.wikipedia.org www.Google.com www.scribed .com
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Yes No
Here are the customer responses about the use of the Airtel product and other product rather than Airtel. in this segment of survey 67 % of customer are aspire with Airtel and 33 % shown interest in other telecom products in urban areas.
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QUESTIONNAIRE
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Dear Sir/Madam, I am the student of MBA-IV Semester at Satyam college of Management doing a project comparative analysis of the marketing Strategies of VODAFONE and AIRTEL questionnaire. Please co-operate to fill this
Q: - 03) Age: (a) 15-25 (b) Above 45 ( ( ) ) (c) 35-45 (d) 25-35 ( ( ) )
Q: - 04) Education: (a) Matriculate (b) Postgraduate ( ( ) ) (c) Graduation (d) Intermediate ( ( ) )
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Q: - 05) Name those companies which provide telecom services now a day? Airtel Idea ( ( ) ) (c) Vodafone (d) others ( ( ) )
Q: - 06) which mobile company services you are using now a days? Airtel Vodafone Other ( ( ) ) (d) Idea (e) Reliance ( ( ( ) ) )
Q: - 07) Among them, which Brand you, prefer most? Airtel Vodafone Other ( ( ( ) ) ) (d) Idea (e) Reliance ( ( ) )
Q: - 08) How long you have been using this Product? 00-02 year 02-05 year ( ( ) ) (c) 05-10 year (d) more then 10 ( ( ) )
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Q: - 09) Are you using other product instead of Airtel? (a) Yes (b) No
Excellen t
( (
) ) Below Average
Good
Average
Q: - 10) How would you rate the experience with Brand? Airtel Vodafone Other
Q: - 11) Do you collect any information search before making purchase? (a) Yes (b) No ( ( ) )
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Q: - 12) If yes, which sources are used? Magazines Sales Executives Pamphlets & catalogue Any other ( ( ( ( ) ) ) ) Dealers Operators reference ( ( ) ) )
Q: - 13) What are the features you look for in a product before making purchase decision? Give preferences (1-Highest, 6- least)
( (
) )
( ( )
) ) Add on
Q: - 14) Which of these marketing / sales schemes attracts you while purchasing any connection? Good Network Service package ( ( ) ) Discount scheme Any other ( ( ) )
Q: - 15) If you have to purchase a new connection or product in near future, which Brand will you go for and why? _____________________________________________________________ _____________________________________________________________ _____________________________________________________________
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Q: - 16) Are you aware of various promotional activities being run by Airtel, If yes then how are you satisfied with these promotional activities? Very Satisfied Satisfied Somewhere satisfied Not satisfied
Q: - 17) How would you rate Airtel performance as your expectation on 5 points scale (5Highest?) 1 After sales services Maintenance Product as per expectation ( ( ( ) ) ) ( ( ( 2 ) ) ) ( ( ( 3 ) ) ) ( ( ( 4 ) ) ) ( ( ( 5 ) ) )
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Q: - 18 what are you suggestions for improving the product quality, service availability and parts availability? ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________
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