1.

1) Introduction

1.2) Evolution of Industry

1.3) Major Players

1.4) Growth of mobile technology

1.5) Cellular Service Providers

17
1.1) Introduction:

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

The Indian Telecommunications network with 110.01 million connections is the fifth
largest in the world and the second largest among the emerging economies of Asia.
Today, it is the fastest growing market in the world and represents unique opportunities
for U.S. companies in the stagnant global scenario. The total subscriber base, which has
grown by 40% in 2005, is expected to reach 250 million in 2007.

According to Broadband Policy 2004, Government of India aims at 9 million broadband

connections and 18 million internet connections by 2007. The wireless subscriber base
has jumped from 33.69 million in 2004 to 62.57 million in FY2004- 2005. In the last 3
years, two out of every three new telephone subscribers were wireless subscribers.
Consequently, wireless now accounts for 54.6% of the total telephone subscriber base, as
compared to only 40% in 2003. Wireless subscriber growth is expected to bypass 2.5
million new subscribers per month by 2007. The wireless technologies currently in use
are Global System for Mobile Communications (GSM) and Code Division Multiple
Access (CDMA). There are primarily 9 GSM and 5 CDMA operators providing mobile
services in 19 telecom circles and 4 metro cities, covering 2000 towns across the country.

1.2) Evolution of the Industry - Important Milestones:

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Year Description
1851 First operational land lines were laid by the govt. near Calcutta(seat of
British Power)

1881 Telephone Service introduced in India

1883 Merger with the postal system

1923 Formation of Indian Radio Telegraph Company (IRT)

1932 Merger of ETC and IRT into the Indian Radio and Communication
Company(IRCC)

1947 Nationalization of all foreign telecommunication companies to form the

Posts, Telephone and Telegraph(PTT), a monopoly run by the
government’s Ministry of Communication

1985 Department of Telecommunications (DOT) established, an exclusive

provider of domestic and long-distance service that would be its own
regulator (separate from the postal system)

1986 Conversion of DOT into two wholly government-owned companies: the

Videsh Sanchar Nigam Limited (VSNL) for international
telecommunications and Mahanagar Telephone Nigam Limited (MTNL)
for service in metropolitan areas.

1997 Telecom Regulatory Authority of India created

1999 Cellular Services are launched in India. New National Telecom Policy is
adopted.

2000 DoT becomes a corporation, BSNL

1.3) Major Players:

There are three types of players in telecom services:

 State owned companies (BSNL and MTNL)

17
  Private Indian owned companies (Reliance Infocomm, Tata Teleservices)

 Foreign invested companies (Vodafone-Essar, Bharti Tele-Ventures, Escotel, Idea

Cellular, BPL Mobile, Spice Communications)

India's mobile telecom sector is one of the fastest growing sectors. Unlike in the 1990s
when the mobile phone was an elitist product, mobile operators now tap a mass market
with mass marketing techniques. "Unified licensing" rules allow basic and mobile
operators into each other’s territory, and have ushered in perhaps the final phase of
industry consolidation.

It seems that only companies with deep pockets can effectively compete as primary
operators mobile markets. Economies of scale, scope, and end-to-end presence in long-
distance as well as local telecom, are desirable.

There are, besides, new challenges. Operators have to find new growth drivers for the
wire line business. There are problems of getting broadband to take off, of technology
choice, of when to introduce new technologies, and of developing a viable business
model in an era of convergence.

1.4) Growth of mobile technology:

India has the fastest growing mobile markets in the world. The mobile services were
commercially launched in August 1995 in India. In the initial 5-6 years the average

17
monthly subscribers additions were around 0.05 to 0.1 million only and the total mobile
subscribers base in December 2002 stood at 10.5 millions. However, after the number of
proactive initiatives taken by regulator and licensor, the monthly subscriber additions
increased to around 2 million per month in the year 2003-04 and 2004-05.

Although mobile telephones followed the New Telecom Policy 1994, growth was tardy
in the early years because of the high price of hand sets as well as the high tariff structure
of mobile telephones. The New Telecom Policy in 1999, the industry heralded several
pro consumer initiatives. Mobile subscriber additions started picking up. The number of
mobile phones added throughout the country in 2003 was 16 million, followed by 22
millions in 2004, 32 million in 2005 and 65 million in 2006. The only countries with
more mobile phones than India with 156.31 million mobile phones are China – 408
million and USA – 170 million.

India has opted for the use of both the GSM (global system for mobile communications)
and CDMA (code-division multiple access) technologies in the mobile sector.

The mobile tariffs in India have also become lowest in the world. A new mobile
connection can be activated with a monthly commitment of US$ 5 only. In 2005 alone 32
million handsets were sold in India. The data reveals the real potential for growth of the
Indian mobile market.

1.5) Cellular Service Providers:

As on Apr 2007 India has 167 million mobile phone subscribers. Out of this 125 million
are GSM users and 41 million CDMA users. BSNL, Bharti Airtel, Hutch, Idea, Aircel,

17
Spice and MTNL are the main GSM providers in India. Reliance Communications and
Tata Indicom are the main CDMA providers in India.

Bharti Airtel

Airtel is providing cellular services in Delhi, Mumbai, Kolkata, Chennai, Andhra

Pradesh, Gujarat, Haryana, Himachal Pradesh, Jammu and Kashmir, Karnataka, Kerala,
Madhya Pradesh, Maharashtra, Goa, Orissa, Punjab, Rajasthan, Tamil Nadu, UP and
West Bengal. Airtel is the No.1 cellular service provider in India using GSM technology.
Airtel has 23% market share in India with a total subscriber base of 38 million.

Reliance Communications

Reliance has both CDMA and GSM networks and total subscriber base of 29 million or
17% market share. It has GSM network in Assam, Bihar, Himachal Pradesh, Kolkata,
North East, Madhya Pradesh, Orissa and West Bengal. Reliance has CDMA networks in
other states and cities.

Bharat Sanchar Nigam Limited (BSNL)

BSNL is a state owned telecom company which has GSM presence in almost every cities
and towns. BSNL has 27 million subscribers with a market share of 16%.

Vodafone

17
Vodafone is another emerging GSM provider in India with coverage in Kerala, Mumbai,
Delhi, Kolkata, Chennai, Gujarat, Andhra Pradesh, Karnataka and Punjab with a total
subscriber base of 27 million.

Tata Indicom
Tata Indicom is a main CDMA provider in India with 16 million subscribers all over
India. Tata Indicom has presence in almost every state and cities in India.

17
2.1) Introduction

2.2) Mission

2.3) Vision

2.4) History

2.5) Vodafone Essar

2.6) Previous Brand

17
17
2.1) Introduction:

Vodafone is a mobile network operator headquartered in Berkshire, England, UK. It is

the largest mobile telecommunications network company in the world by turnover and
has a market value of about £75 billion (August 2008). Vodafone currently has operations
in 25 countries and partner networks in a further 42 countries.

The name Vodafone comes from Voice data fone, chosen by the company to "reflect the
provision of voice and data services over mobile phones."

As of 2006 Vodafone had an estimated 260 million customers in 25 markets across 5

continents. On this measure, it is the second largest mobile telecom group in the world
behind China Mobile.

In the United States, Vodafone owns 45% of Verizon Wireless.

2.2) Mission:

Vodafone is primarily a user of technology rather than a developer of it, and this fact is
reflected in the emphasis of our work program on enabling new applications of mobile
communications, using new technology for new services, research for improving
operational efficiency and quality of our networks, and providing technology vision and
leadership that can contribute directly to business decisions.

2.3) Vision:

Our Vision is to be the world’s mobile communication leader – enriching customers’

lives, helping individuals, businesses and Communities be more connected in a mobile
world.

17
2.4) History:

In 1982 Racal Electronics plc's subsidiary Racal Strategic Radio Ltd. won one of two UK
cellular telephone network licenses. The network, known as Racal Vodafone was 80%
owned by Racal, with Millicom and the Hambros Technology Trust owning 15% and 5%
respectively. Vodafone was launched on 1 January 1985. Racal Strategic Radio was
renamed Racal Telecommunications Group Limited in 1985. On 29 December 1986
Racal Electronics bought out the minority shareholders of Vodafone for GB£110 million.

In September 1988 the company was again renamed Racal Telecom and on 26 October
1988 Racal Electronics floated 20% of the company. The flotation valued Racal Telecom
at GB£1.7 billion On 16 September 1991 Racal Telecom was demerged from Racal
Electronics as Vodafone Group.

In July 1996 Vodafone acquired the two thirds of Talkland it did not already own for
£30.6 million. On 19 November 1996, in a defensive move, Vodafone purchased Peoples
Phone for £77 million, a 181 store chain whose customers were overwhelmingly using
Vodafone's network. In a similar move the company acquired the 80% of Astec
Communications that it did not own, a service provider with 21 stores.

In 1997 Vodafone introduced its Speech mark logo, as it is a quotation mark in a circle;
the O's in the Vodafone logotype are opening and closing quotation marks, suggesting
conversation.

On 29 June 1999 Vodafone completed its purchase of AirTouch Communications, Inc.

and changed its name to Vodafone Airtouch plc. Trading of the new company
commenced on 30 June 1999. To approve the merger, Vodafone sold its 17.2% stake in
E-Plus Mobilfunk. The acquisition gave Vodafone a 35% share of Mannesmann, owner
of the largest German mobile network.

17
Vodafone’s original logo used until the introduction of the speech mark logo in 1998.

On 21 September 1999 Vodafone agreed to merge its U.S. wireless assets with those of
Bell Atlantic Corp to form Verizon Wireless. The merger was completed on 4 April
2000.

In November 1999 Vodafone made an unsolicited bid for Mannesmann, which was
rejected. Vodafone's interest in Mannesmann had been increased by the latter's purchase
of Orange, the UK mobile operator. Chris Gent would later say Mannesmann's move into
the UK broke a "gentleman's agreement" not to compete in each other's home territory.
The hostile takeover provoked strong protest in Germany and a "titanic struggle" which
saw Mannesmann resists Vodafone's efforts. However, on 3 February 2000 the
Mannesmann board agreed to an increased offer of £112bn, then the largest corporate
merger ever. The EU approved the merger in April 2000. The conglomerate was
subsequently broken up and all manufacturing related operations sold off.

On 28 July 2000 the Company reverted to its former name, Vodafone Group Plc. In April
2001 the first 3G voice call was made on Vodafone United Kingdom's 3G network. In
2001 the Company took over Eircell, then part of eircom in Ireland, and rebranded it as
Vodafone Ireland. It then went on to acquire Japan's third-largest mobile operator J-
Phone, which had introduced camera phones first in Japan.

On 17 December 2001 Vodafone introduced the concept of "Partner Networks" by

signing TDC Mobil of Denmark. The new concept involved the introduction of Vodafone
international services to the local market, without the need of investment by Vodafone.
The concept would be used to extend the Vodafone brand and services into markets
where it does not have stakes in local operators. Vodafone services would be marketed

17
under the dual-brand scheme, where the Vodafone brand is added at the end of the local
brand. (i.e., TDC Mobil-Vodafone etc.)

In February 2002 Finland was added into the mobile community, as Radiolinja is signed
as a Partner Network. Radiolinja later changed its named to Elisa. Later that year the
Company rebranded Japan's J-sky mobile internet service as Vodafone live! and on 3
December 2002 the Vodafone brand was introduced in the Estonian market with signing
of a Partner Network Agreement with Radiolinja (Eesti). Radiolinja (Eesti) later changed
its name to Elisa.

On 7 January 2003 the Company signed a group-wide Partner agreement with mobilkom
Austria. As a result, Austria, Croatia, and Slovenia were added to the community. In
April 2003 Og Vodafone was introduced in the Icelandic market and in May 2003
Vodafone Italy (Omnitel Pronto-Italia) was rebranded Vodafone Italy. On 21 July 2003
Lithuania was added to the community, with the signing of a Partner Network agreement
with Bitė.

In February 2004 Vodafone signed a Partner Network Agreement with Luxembourg's

LuxGSM and a Partner Network Agreement with Cyta of Cyprus. Cyta agreed to rename
its mobile phone operations to Cytamobile-Vodafone. In April 2004 the Company
purchased Singlepoint airtime provider from John Caudwell (Caudwell Group) and
approx 1.5million customers onto its base for £405million, adding sites in Stoke on Trent
(England) to existing sites in Newbury (HQ), Birmingham, Warrington and Banbury. In
November 2004 Vodafone introduced 3G services into Europe.

In June 2005 the Company increased its participation in Romania's Connex to 99% and
also bought the Czech mobile operator Oskar. On 1 July 2005 Oskar of the Czech
Republic was rebranded as Oskar-Vodafone. Later that year on 17 October 2005
Vodafone Portugal launched a revised logo, using new text designed by Dalton Maag,
and a 3D version of the Speech mark logo, but still retaining a red background and white
writing (or vice versa). Also, various operating companies started to drop the use of the
SIM card pattern in the company logo. (The rebranding of Oskar-Vodafone and Connex-

17
Vodafone also does not use the SIM card pattern.) A custom typeface by Dalton Maag
(based on their font family InterFace) formed part of the new identity.

On 28 October 2005 Connex in Romania was rebranded as Connex-Vodafone and on 31

October 2005 the Company reached an agreement to sell Vodafone Sweden to Telenor
for approximately €1 billion. After the sale, Vodafone Sweden became a Partner
Network. In December 2005 Vodafone won an auction to buy Turkey's second-largest
mobile phone company, Telsim, for $4.5 billion. In December 2005 Vodafone Spain
became the second member of the group to adopt the revised logo: it was phased in over
the following six months in other countries.

In 2006 the Company rebranded its Stoke-on-Trent site as Stoke Premier Centre, a centre
of expertise for the company dealing with Customer Care for its higher value customers,
technical support, sales and credit control. All cancellations and upgrades started to be
dealt with by this call centre. On 5 January 2006 Vodafone announced the completion of
the sale of Vodafone Sweden to Telenor. On February 2006 the Company closed its
Birmingham Call Centre. In 1 February 2006 Oskar Vodafone became

Vodafone Czech Republic, adopting the revised logo and on 22 February 2006 the
Company announced that it was extending its footprint to Bulgaria with the signing of
Partner Network Agreement with Mobiltel, which is part of mobilkom Austria group.

On 12 March 2006 former chief, Sir Christopher Gent, who was appointed the honorary
post Chairman for Life in 2003, quits following rumours of boardroom rifts. In April
2006 the Company announced that it has signed an extension to its Partner Network
Agreement with BITE Group, enabling its Latvian subsidiary "BITE Latvija" to become
the latest member of Vodafone's global partner community. Also in April 2006 Vodafone
Sweden changed its name to Telenor Sverige AB and Connex-Vodafone became
Vodafone Romania, also adopting the new logo. On 30 May 2006 Vodafone announced
the biggest loss in British corporate history (£14.9 billion) and plans to cut 400 jobs; it
reported one-off costs of £23.5 billion due to the revaluation of its Mannesmann
subsidiary. On 24 July 2006 the respected head of Vodafone Europe, Bill Morrow, quit

17
unexpectedly and on 25 August 2006 the Company announced the sale of its 25% stake
in Belgium's Proximus for €2 billion. After the deal, Proximus was still part of the
community as a Partner Network. On 5 October 2006 Vodafone announced the first
single brand partnership with Og Vodafone which would operate under the name
Vodafone Iceland and on 19 December 2006 the Company announced the sale of its 25%
stake in Switzerland's Swisscom for CHF4.25 billion (£1.8 billion). After the deal,
Swisscom would still be part of the community as a Partner Network. Finally in
December 2006 the Company completed the acquisition of Aspective, an enterprise
applications systems integrator in the UK, signaling Vodafone's intent to grow a
significant presence and revenues in the ICT marketplace.

Early in January 2007 Telsim in Turkey adopted Vodafone dual branding as Telsim
Vodafone and on 1 April 2007 Telsim Vodafone Turkey dropped its original brand and
became Vodafone Turkey. On 1 May 2007 Vodafone added Jersey and Guernsey to the
community, as Airtel was signed as Partner Network in both crown dependencies. In June
2007 the Vodafone live! Mobile Internet portal in the UK was relaunched. Front page
was now charged for and previously "bundled" data allowance was removed from
existing contract terms. All users were given access to the "full" web rather than a Walled
Garden and Vodafone became the first mobile network to focus an entire media
campaign on its newly launched mobile Internet portal in the UK. On 1 August 2007
Vodafone Portugal launched Vodafone Messenger, a service with Windows Live
Messenger and Yahoo! Messenger.

On 17 April 2008 Vodafone extended its footprint to Serbia as VIP mobile was added to
the community as a Partner Network and on 20 May 2008 the Company added VIP
Operator as a Partner Network thereby extending the global footprint to Macedonia. In
May 2008 Kall of the Faroe Islands rebranded as Vodafone Faroe Islands.

On 30 October 2008, the company announced a strategic, non-equity partnership with

MTS group of Russia. The agreement adds Russia, Armenia, Turkmenistan, Ukraine, and
Uzbekistan to the group footprint.

17
2.5) VODAFONE ESSAR

17
2.5.1) Introduction:

Vodafone Essar, previously Hutchison Essar is a cellular operator in India that covers 21
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 provides 2G services based on 900 MHz and 1800 MHz digital GSM
technology, offering voice and data services in 22 of the country's 23 licence areas.

2.5.2) Ownership:

Vodafone Essar is owned by Vodafone 52%, Essar Group 33%, and other Indian
nationals, 15%.

On February 11, 2007, Vodafone agreed to acquire the controlling interest of 67% held
by Li Ka Shing Holdings in Hutch-Essar for US$11.1 billion, pipping Reliance
Communications, Hinduja Group, and Essar Group, which is the owner of the remaining
33%. The whole company was valued at USD 18.8 billion. The transaction closed on
May 8, 2007.

17
17
2.6) Previous brands:

In December 2006, Hutch Essar re-launched the "Hutch" brand nationwide, consolidating
its services under a single identity. The Company entered into agreement with NTT
DoCoMo to launch i-mode mobile Internet service in India during 2007.

The company used to be named Hutchison Essar, reflecting the name of its previous
owner, Hutchison. However, the brand was marketed as Hutch. After getting the
necessary government approvals with regards to the acquisition of a majority by the
Vodafone Group, the company was rebranded as Vodafone Essar. The marketing brand
was officially changed to Vodafone on 20 September 2007.

On September 20, 2007 Hutch becomes Vodafone in one of the biggest brand transition
exercises in recent times.

Vodafone Essar is spending somewhere in the region of Rs 250 crores on this high-
profile transition being unveiled today. Along with the transition, cheap cell phones have
been launched in the Indian market under the Vodafone brand. There are plans to launch
co-branded handsets sourced from global vendors as well.

A popular daily quoted a Vodafone Essar director as saying that "the objective is to
leverage Vodafone Group's global scale in bringing millions of low-cost handsets from
across-the-world into India."

While there is no revealing the prices of the low-cost Vodafone handsets, the industry is
abuzz that prices might start at Rs 666, undercutting Reliance Communications' much-
hyped 'Rang Barse' with cheap handsets beginning at Rs 777.

Meanwhile, Vodafone Essar sources said there would be no discounts or subsidized

handset offers -- rather handset-bundled schemes for customers.

Incidentally, China's ZTE, which is looking to set-up a manufacturing unit in the country,
is expected to provide several Vodafone handsets in India. Earlier this year, Vodafone
penned a global low-cost handset procurement deal with ZTE

17
3.1) Introduction
3.2) Measuring Customer Satisfaction
3.3) Vodafone had highest customer
satisfaction index in 2007.

17
 Customer Satisfaction

3.1) Introduction:

Customer satisfaction, a business term, is a measure of how products and services

supplied by a company meet or surpass customer expectation. It is seen as a key
performance indicator within business and is part of the four perspectives of a Balanced
Scorecard.

In a competitive marketplace where businesses compete for customers, customer

satisfaction is seen as a key differentiator and increasingly has become a key element of
business strategy.

There is a substantial body of empirical literature that establishes the benefits of customer
satisfaction for firms.

3.2) Measuring customer satisfaction

Organizations are increasingly interested in retaining existing customers while targeting

non-customers; measuring customer satisfaction provides an indication of how successful
the organization is at providing products and/or services to the marketplace.

Customer satisfaction is an ambiguous and abstract concept and the actual manifestation
of the state of satisfaction will vary from person to person and product/service to
product/service. The state of satisfaction depends on a number of both psychological and
physical variables which correlate with satisfaction behaviors such as return and
recommend rate. The level of satisfaction can also vary depending on other options the
customer may have and other products against which the customer can compare the
organization's products.

Because satisfaction is basically a psychological state, care should be taken in the effort
of quantitative measurement, although a large quantity of research in this area has
recently been developed. Work done by Berry, Brodeur between 1990 and 1998 defined

17
ten 'Quality Values' which influence satisfaction behavior, further expanded by Berry in
2002 and known as the ten domains of satisfaction. These ten domains of satisfaction
include: Quality, Value, Timeliness, Efficiency, Ease of Access, Environment, Inter-
departmental Teamwork, Front line Service Behaviors, Commitment to the Customer and
Innovation. These factors are emphasized for continuous improvement and organizational
change measurement and are most often utilized to develop the architecture for
satisfaction measurement as an integrated model. Work done by Parasuraman, Zeithaml
and Berry between 1985 and 1988 provides the basis for the measurement of customer
satisfaction with a service by using the gap between the customer's expectation of
performance and their perceived experience of performance. This provides the measurer
with a satisfaction "gap" which is objective and quantitative in nature. Work done by
Cronin and Taylor propose the "confirmation/disconfirmation" theory of combining the
"gap" described by Parasuraman, Zeithaml and Berry as two different measures
(perception and expectation of performance) into a single measurement of performance
according to expectation. According to Garbrand, customer satisfaction equals perception
of performance divided by expectation of performance.

The usual measures of customer satisfaction involve a survey with a set of statements
using a Likert Technique or scale. The customer is asked to evaluate each statement and
in term of their perception and expectation of performance of the organization being
measured.

3.3) Vodafone had highest customer satisfaction index in 2007

Lisbon, 25 August 2008 - Vodafone obtained the highest customer satisfaction index in
the telecommunications sector in 2007, according to annual results published by Anacom.
Vodafone achieved a satisfaction index of 74.4 (on a scale of 0 to 100), the highest score
of all the companies in the Portuguese telecommunications market and considerably
above the sector average of 67.6.

17
In the report published by Anacom, Vodafone is ranked in first place in all the indicators
included in the survey: Satisfaction with the operator, Image that customers have of the
operator, Customer Expectations, Perceived Quality of the operator's network and
services, Perceived Value for Money, Complaints received and their handling, and
Loyalty of customers to their operator.

In the Perceived Quality indicator, Vodafone obtained a score of 8.3 points for overall
quality, way ahead of the scores of the other two operators (both obtained 7.7 points).
Vodafone comes top in all the indicators for perceived quality of network and services:
technical quality of the network (8.2 points); customer service and advice capability (7.6
points); quality (8.2 points), diversity (8.0 points) and reliability (7.9 points) of products
and services offered; clarity and transparency of information supplied (7.8 points);
network coverage (7.9 points) and clarity and transparency of price plans (7.9 points).

Similarly, in the indicators measuring the Image of mobile operators, Vodafone comes
top in the five categories analyzed (on a scale of 1 to 10): 'It is a reliable company in
terms of what it says and what it does' (8.1 points); 'It is stable and well established in the
market' (8.8 points); 'It contributes positively to society' (7.5 points); 'It cares about its
customers' (7.6 points); and 'It is innovative and forward looking' (8.5 points).

The methodology used in the ECSI Portugal 2007 survey (ECSI – European Customer
Satisfaction Index) is similar to that used by the European Commission to survey
customer satisfaction in 25 Member States, enabling comparisons to be made between the
results obtained in each country.

The ECSI Portugal 2007 Communications survey was carried out by the Higher Institute
of Statistics and Information Management at Lisbon's New University in partnership with
the Portuguese Quality Institute and the Portuguese Quality Association, with
sponsorship from Anacom.

17
4.1) Strength
4.2) Weakness
4.3) Opportunities
4.4) Threats

17
 SWOT Analysis is a strategic planning method used to evaluate the Strengths,
Weaknesses, Opportunities, and Threats involved in a project or in a business venture. It
involves specifying the objective of the business venture or project and identifying the
internal and external factors that are favorable and unfavorable to achieving that
objective. The technique is credited to Albert Humphrey, who led a research project at
Stanford University in the 1960s and 1970s using data from Fortune 500 companies.

Strengths Weaknesses

Leadership Position Centralized Control – Low

Flexibility
Global Brand Strength
High Consumer churn rates
High Geographical reach
Internal
Opportunities Threats
Expanding marketing boundaries Increased Competition

Growth through 3G Market saturation in Europe

Strategic Alliances Emergencies of Low cost

External
Brands

SWOT analysis of Vodafone

17
4.1) Strengths:

The main strength of Vodafone within the telecommunications market lies in its
brand image and recognition. Vodafone, having established a global presence and having
invested highly in marketing a differentiated image by promoting a Vodafone life style,
currently enjoys a differentiating advantage that, if exploited properly, can offer a lead in
competition. The presence of Vodafone in numerous countries within Europe as well as
in all part of the world enhances this image. It allows customers to travel and enjoy easily
the services of their home country operator. In the few countries that Vodafone is not
physically present (e.g. Norway) it has well established strategic alliances which allow
for a better service of mobile clients.

4.2) Weaknesses:

The expansion of Vodafone has been completed at the expense of direct control of
its operations. The company grew through a process of acquisitions of national
telecommunications companies (e.g. the acquisition of the third biggest Czech mobile
phone operator, Cesky mobile) rather than organic growth. This increased its subscribers’
base quickly, offering direct market knowledge and immediate additions of customer
bases at the expense of direct effective control of the subsidiaries. At the same time
though, it implicitly imposed a centralized operational structure for the group, nominating
the UK headquarters as the leading business unit running a much centralised marketing
and handset procurement at group level. This has resulted in the neglect of local markets
and local differences, allowing market share to be gained by smaller local competitors30.
Due to the highly saturated Western European market this has resulted in an increase in
the price elasticity of demand, with consumers becoming continuously price oriented.
This has resulted in high customer churn rates reaching the level of 32.8% in the UK
compared to O2’s 24%.

17
4.3) Opportunities:

The telecommunications market, even though highly saturated in some regions

offers great potential due to the ageing population and the sophistication of the
consumers. It offers great opportunities through a careful market segmentation and
exploitation of particular profitable segments. Different strategies should be pursued –
simple phones and simplified pricing plans to the ageing population and more updated,
sophisticated solutions for younger generations. The expanding Boundaries of the market
could provide further opportunities by allowing Vodafone to enter more aggressively into
fixed‐line service and to better enjoy the benefits of its high investment in 3G technology.
Moreover the company has undertaken its first steps in establishing strategic alliances to
develop customized solutions for end‐users: Vodafone recently announced two new
partnerships, one with supermarket group ASDA to launch an ASDA branded mobile
service in the UK, and another with electrical retailer DSG International to provide
mobile solutions to small businesses32. This could further be enhanced to avoid being a
late‐entrant in this new method of distribution which offers access to a wide potential
customer base.

4.4) Threats:

The European part of Vodafone’s market is characterized by existing high levels

of competition. Major brands such as O2 and T‐Mobile are exploiting the price
sensitivity of customers and in this way they are building a stronger image and presence
in the market. Indirect competition is also increasing further, through the presence of
Skype and other related (not only voice) Internet‐based services. This combined with the
upcoming European legislative measures is expected to limit further the tariffs for the
network providers imposing further need for price cuts which could harm the bottom line
profitability of the company.

17
5.1) Introduction

5.2) Objective of Study

5.3) Benefits of Study

5.4) Process of Marketing Research

5.5) Findings

5.6) Suggestions

5.7) Conclusion

17
5.1) Introduction:

“Marketing research means the systematic gathering, recording, analyzing of data

about problems relating to the marketing of goods and services”

Marketing research has proved an essential tool to make all the need of marketing
management. Marketing research therefore is the scientific process of gathering and
analyzing of marketing information to meet the needs of marketing management. But
gathering of observation is must be systematic. The systematic conduct of research
requires:

 Orderliness, in which the measurements are accurate.

 Impartiality in analysis and interpretation.

All of research can be categorized into basic and applied.

1. BASIC RESEARCH: - Basic Research is that intended to expand the body of

knowledge for the use of others.

2. APPLIED RESEARCH: - Applied Research is one, which is carried out to find

the solution for a particular problem or for guiding a specific decision. It is
usually private in nature.

My research on Vodafone is carried on for guiding specific decisions and its

results are useful only to Vodafone for taking particular decision regarding product
quality, staff and security. Hence the nature of my research study is “APPLIED
RESEARCH “.

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5.2) Objective of Study:

Following are the main objective to study about the customer satisfaction on
Vodafone.

 To satisfy the Vodafone customers.

 To know their Expectation.

 Help in increasing demand.

5.3) Benefits of study:

There are many benefits related to take this study. Some of the benefits of taking
this study are as follows:

 By analyzing this information, the company would be able to better design

schemes & services & target right prospects’ needs & wants.

 More people will get aware about Vodafone that will increase profit level of
Vodafone.

 This study helps to identify the behavior of consumer when there are no offers &
schemes from Vodafone.

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5.4) Process of Marketing Research:

The marketing research is done in systematic process. I have pursued the below
process of marketing for my study at Vodafone:

Problem Identification

Research Design

Data Collection

Data Analysis & Interpretation

Research Report & Presentation

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5.4.1) Problem Identification:

The first and the most important step of marketing research is properly defining
the problem. In order to identify the research problem two categories of problem should
be carefully noticed.

Here the researcher’s problems are:-

 A number of customers are not satisfied with services, new schemes and offers.

 A number of customers are not satisfied with the network coverage.

 A number of customers are not satisfied with the current call rates of Vodafone.

 A number of customers are not satisfied with the Free SMS schemes.

 A number of customers are not satisfied with the service of customer care of
Vodafone.

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5.4.2) RESEARCH DESIGN:

Research design indicates the methods and procedure of conducting research

study. Research design can be done in following three types:-

1 Exploratory Research:-

Exploratory research focuses on the discovery of new ideas and is generally

based on secondary data.

2 Descriptive Research:-

Descriptive research is undertaken when the researcher want to know the

characteristics of certain groups.

3 Causal or Experimental Researches:-

An experimental research is undertaken to identify causes and effect relationship

between two variables.

The Research Design is: Exploratory Research Design

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5.4.3) Data Collection and Sampling:

A) Sources of Data Collection:-

Basically there are two types of data i.e. secondary and primary:

I) Primary Data Collection:-

Primary data collection contains the following four types of methods: -

1 Observation Method:

It contains Causal observation, Systematic observation, direct observation and

contrived observation.

2 Survey Method:

It contains Personal Interview, Telephone Interview and Mail Interview.

3 Experimental Method.

4 Panel Method.

II) Secondary Data Collection: -

It can be collected from internal as well as external sources

1 Internal Source:

Various internal sources like employee, books, sales activity, stock availability,
product cost, etc.

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2 External Sources:

Libraries, trade publications, literatures, etc are some important sources of

external data.

The Researcher has used primary data for the core purpose of the project and this
primary data has been gathered by survey method.

B) Data collection Tools:

To conduct a survey, the Researcher has selected a structured questionnaire as an

instruction for gathering valuable information from the customers. Questionnaire, which
is used for the survey, is consisting of questions and checklist questions to check the
customer feedback.

C) Contact Method:

After sampling plan has been determined, the researcher has contacted customers by
personal interview and requested them to fill up the questionnaire.

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 D) Sampling Plan:

The researcher has design a sampling plan that is consist of five decisions.

I) Sampling unit:

Who is to be surveyed?

The Researcher has selected youngsters, businessmen, and housewives, employees to

conduct survey and to measure satisfaction level.

II) Sampling types:

There are two types of sampling i.e. Probability Sampling and Non – probability
Sampling.

i) Probability Sampling : -

Probability sampling means each unit of the universe has equal chance of getting
selected. The most frequently used probability sampling methods are as below:

a) Simple Random Sampling.

b) Stratified Random Sampling.

c) Multi-stage Random Sampling.

d) Cluster Sampling.

e) Multi – phase Sampling.

f) Replicated Sampling.

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 ii) Non – Probability Sampling:-

Non – Probability sampling contains following methods:-

a) Judgment Sampling.

b) Convenience Sampling.

c) Panel Sampling.

d) Quota Sampling

For this purpose the researcher has used simple random sampling.

III) Sample Size:

Sample size means limited numbers of respondents covered under the research
study from a population and the researcher has taken a survey of 100 respondents to
know the satisfaction level of customer.

IV) Sampling Area:

The researcher’s area for survey was:

 The S.P.B. College of Business Administration, Udhna.

 Vodafone Store, Ghod Dod Road.

 Outside Big Bazaar, Piplod.

V) Sampling Unit:

Here the researcher has randomly selected the respondents of the Surat city.

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5.4.4) Data Analyze and Interpretation

After all the above steps are completed now the important step is data analyzing
and interpretation. For this there are various analytical and statistical tools. Some of these
tools are Percentage, Average, Dispersion, Co-relation, Co-efficient, etc.

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Q1) Do you have a mobile phone?

Suggestions Yes No
No. of respondents 93 7

Purpose:

The main purpose of this question is to know how many respondents use mobile
phone.

Interpretation:

93% of the respondents are have a mobile phone while 7% of the respondents do
not have a mobile phone.

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Q2) Are you aware about telecommunications services?

Suggestions Yes No
No. of respondents 95 5

Purpose:

The main purpose behind this question is to know about the awareness of
respondents regarding different telecommunications services and also to know about
which telecommunication(operator’s) service they use.

Interpretation:

95% of the respondents are aware about telecommunications services while 5%

are not aware.

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Which operator’s service do you use?

Operator’s service name No. of respondents

Vodafone 87
Airtel 29
Idea 17
Reliance 21
BSNL 5
Tata Indicom 3

Interpretation:

Major respondents using mobile are enjoying Vodafone services. 16% of the
respondents use Airtel, 6% respondents use Idea while 12%, 4% and 2% respondents use
Reliance, BSNL and Tata Indicom respectively.

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Q3) Are you aware about Vodafone?

Suggestions Yes No
No. of respondents 87 0

Purpose:

The purpose behind this question is to know about the awareness of Vodafone
among all the respondents.

Interpretation:

Here 100% of respondents are aware about Vodafone Services.

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Q4) From which source you came to know about Vodafone?

Sources No. Of respondents

Advertisements 63
Hoardings 52
Newspapers 35
Mouth Publicity 26

Purpose:

The purpose behind this question is to know from which source the respondents
came to know about Vodafone.

Interpretation:

36% of the respondents are aware about Vodafone through Advertisements, 29%
are aware because of Hoardings while 20% and 15% of the respondents are aware
because of Newspapers and Mouth Publicity respectively.

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Q5) Since how long you are using Vodafone Services?

Time period No. of respondents

Less than 1 month 12
2-6 months 19
6-12 months 22
More than 1 year 34
Purpose:

The purpose behind this question is to know about the usage time of Vodafone
customers i.e. since how long they are using Vodafone services.

Interpretation:

Major Respondents using Vodafone are old customers. 39% of the respondents
use Vodafone services from past more than 1 year while the lowest is 14% respondents
using Vodafone services less than 1 month.

Q6) Which of the following services do you use of Vodafone?

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Services No. of respondents
Pre-Paid 73
Post-paid 14

Purpose:

The purpose behind this question is to know which services do the Vodafone
customer use, Pre-Paid or Post-Paid.

Interpretation:

84% of the respondents use pre-paid services while only 16% of the respondents
use post-paid services.

Q7) Which services are more helpful to you while using Vodafone
Services?

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Services No. of respondents
Call Rates 27
SMS Rates 48
Network 36
Value Added Services 19

Purpose:

The purpose behind this question is to know which services are more helpful to the
respondent while using Vodafone.

Interpretation:

Here major Respondents are youngsters so they mainly use SMS services of
Vodafone. 37% of the respondents use Vodafone for SMS services while only 14% of the
respondents use Vodafone for Value Added Services.

Q8) Do you call at customer care

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Suggestions Yes No
No. of respondents 76 11
Purpose:

The purpose of this question is to know how many times and how often the
respondents call at customer care of Vodafone.

Interpretation:

87% of the respondent calls at customer care while 13% respondents do not call at
customer care.

If yes, how often you call at customer care?

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Time Period No. of respondents
Daily 5
Once a week 12
Once a month 24
Occasionally 35

Interpretation

Major respondents here call customer care occasionally. 31% respondents

respondents call customer care once a month while 16% and 7% of respondents call once
a week and daily respectively.

Q9) For what reason you call at customer care?

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Reasons No. of respondents
Value Added Services 21
Information regarding new schemes 23
Complaining 42
Other queries 36

Purpose:

The main purpose of this question is to know the reason of the respondents
regarding calling at customer care.

Interpretation:

34% of respondents call at customer care for complaining purpose while 30%,
19% and 17% of respondents call customer care for other queries, information regarding
new schemes and value added services respectively.

Q10) Rate the following on the basis of your satisfaction.

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Services Excellent Very Good Fairly Good Average Poor
Network 31 29 17 7 3
SMS Rates 6 19 35 24 3
New schemes 3 14 27 33 10
and offers
Customer Care 6 32 29 15 5
Recharge 12 28 31 14 2
Outlets
Call Rates 2 20 43 19 3
Value Added 9 24 29 19 6
Services

Network:

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Service Excellent Very Good Fairly Good Average Poor
Network 31 29 17 7 3

Purpose:

The purpose of this analysis is to know the perspective of the customers of

Vodafone regarding network service.

Interpretation:

Here major respondents are satisfy with the network coverage. 36% of the
respondents are rate the Vodafone’s network excellent, 33% rate it very good, 20% rate it
farely good while 8% and 3% rate it average and poor.

SMS Rates:

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Service Excellent Very Good Fairly Good Average Poor
SMS Rates 6 19 35 24 3

Purpose:

The purpose of this analysis is to know the perspective of the customers of

vodafone regarding Rates of SMS.

Interpretation:

Here major respondents are not much satisfied with the SMS rates of Vodafone as
major respondents are youngsters. 7% of respondents rate it excellent, 22% rate it very
good, 40% rate it fairly good, 28% rate it average, 3% rate it poor.

New Schemes and Offers:

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Service Excellent Very Good Fairly Good Average Poor
New schemes 3 14 27 33 10
and offers

Purpose:

The main purpose of this analysis is to the respondent’s perspective related to the
new schemes and offers provided by Vodafone.

Interpretation:

Here major respondents are not much satisfied with new schemes and offers of
Vodafone. 38% respondents rate new schemes and offers as average, 31% respondents
rate it as fairly good, 16% rate it as very good while 12% and 3% rate it as poor and
excellent respectively.

Customer Care:

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Service Excellent Very Good Fairly Good Average Poor
Customer Care 6 32 29 15 5

Purpose:

The main purpose of this analysis is to know about the satisfaction of customer
care service provided by Vodafone to their customers.

Interpretation:

Customer care service of Vodafone is better compared to some of the other

services. 37% respondents rate it as very good, 33% rate it as fairly good, 17% rate it as
average, 6% and 7% rate it as poor and excellent respectively.

Recharge Outlets:

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Service Excellent Very Good Fairly Good Average Poor
Recharge 12 28 31 14 2
Outlets

Purpose:

The purpose behind this analysis is to know about the satisfaction of the
Vodafone customers regarding recharge outlets.

Interpretation:

Recharge outlets of Vodafone are majorly rated on fairly good and very good
basis. 36% of the respondents rate it as fairly good, 32% rate it as very good, 16% rate it
as average, 14% rate it excellent and 2% respondents rate it as poor.

Call Rates:

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Service Excellent Very Good Fairly Good Average Poor
Call Rates 2 20 43 19 3

Purpose:

The purpose behind this analysis is to know about the perception of vodafone
customers regarding different call rates.

Interpretation:

Major percentage of respondents are not happy with the call rates of Vodafone.
49% of respondents rate call rates of vodafone as fairly good, 23% rate it as very good,
22% rate it as average while 4% and 2% respondent rate it as poor and excellent
respectively.

Value Added Services:

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Service Excellent Very Good Fairly Good Average Poor
Value Added 9 24 29 19 6
Services

Purpose:

The purpose behind this analysis is to know about the perception of vodafone
customers regarding Value Added Services.

Interpretation:

Value added services of Vodafone are quite feasible as compared to some of the
other services. 33% respondents rate it as fairly good, 28% rate it as very good, 22% rate
it as average while 10% and 7% rate it as excellent and poor respectively.

Q12) Why you are not using Vodafone Services?

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Reasons No. of respondents
Lack of awareness 2
High Prices 6
Poor Services 3
Poor Network 2

Purpose:

The purpose of this question is to know why other respondents do not use
Vodafone services.

Interpretation:

6 don’t use Vodafone services because of high prices. 3 respondents don’t use
Vodafone services because of poor services while 2 respondents each don’t use vodafone
services because of lack of awareness and poor network.

Q13) Would you like to recommend Vodafone to others?

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Suggestions Yes No
No. of respondents 78 9

Purpose:

The purpose of this question is to know the recommendations of the respondents

towards Vodafone, whether they would like to recommend the Vodafone services to
others or not.

Interpretation:

90% of the Vodafone customers would like to recommend Vodafone services to

others while 10% of the Vodafone Customers won’t recomment to others.

5.5) Findings:

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 93% of the respondents are have a mobile phone while 7% of the respondents do
not have a mobile phone.

 100% of the respondents are aware about telecommunications services.

 16% of the respondents use Airtel, 6% respondents use Idea while 12%, 4% and
2% respondents use Reliance, BSNL and Tata Indicom respectively.

 100% of respondents are aware about Vodafone Services.

 36% of the respondents are aware about Vodafone through Advertisements, 29%
are aware because of Hoardings while 20% and 15% of the respondents are aware
because of Newspapers and Mouth Publicity respectively.

 39% of the respondents use Vodafone services from past more than 1 year while
the lowest is 14% respondents using Vodafone services less than 1 month.

 84% of the respondents use pre-paid services while only 16% of the respondents
use post-paid services.

 37% of the respondents use Vodafone for SMS services while only 14% of the
respondents use Vodafone for Value Added Services.

 87% of the respondent calls at customer care while 13% respondents do not call
at customer care.

 31% respondents respondents call customer care once a month while 16% and
7% of respondents call once a week and daily respectively.

 34% of respondents call at customer care for complaining purpose while 30%,
19% and 17% of respondents call customer care for other queries, information
regarding new schemes and value added services respectively

 5 respondents among the total no. of respondents don’t use Vodafone services
because of high prices. 3 respondents don’t use Vodafone services because of

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 poor services while 2 respondents each don’t use vodafone services because of
lack of awareness and poor network.

 90% of the Vodafone customers would like to recommend Vodafone services to

others while 10% of the Vodafone Customers won’t recomment to others.

5.6) Conclusion:

Follwing are the conclusion that the researcher found after the survey.

 From the above analysis the researcher concludes that major respondents are
dissatisfied with some of the major services like call rates, SMS rates and new
schemes & offers.

 Major respondents from all respondents use Vodafone services.

 Major customers of Vodafone are old customers so many of the respondents are
satisfied with the services of Vodafone and thus they would like to recommend
Vodafone to others.

 Major respondents using Vodafone use pre-paid services compared to post-paid

services.

5.7) Suggestions:

Following are some of the suggestions given by the researcher so that Vodafone can
serve people and its customers in an improved way:

 Vodafone should decrease call rates for local users.

 Vodafone should provide more offers to Post-Paid customers so that the number
of Post-Paid customers increase.

 Vodafone should bring introduce some new SMS schemes for the youngsters.

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 Vodafone should introdroduce more schemes and offers.

6.1) Online

6.2) Books

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6.1) Online:

 http://www.vodafone.com/start/media_relations/news/local_press_releases/po
rtugal/portugal_press_release/vodafone_had_highest.html
 http://en.wikipedia.org/wiki/Customer_satisfaction
 http://en.wikipedia.org/wiki/Hutch_(Indian_cellular_company)
 http://en.wikipedia.org/wiki/Vodafone
 http://bora.nhh.no/bitstream/2330/1919/1/Saplitsa%202008.pdf
 www.anacom.pt/render.jsp?contentId=606658
 www.iimcal.ac.in/community/consclub/reports/telecom.pdf
 www.scribd.com

6.2) Books:

 Marketing Management – Philip Kotler, Kevin Lane Keller.

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17
Q1) Do you have a mobile phone?

o Yes
o No
Q2) Are you aware about telecommunications service?

o Yes
o No
If yes, then which operator’s Service do you use?

o Vodafone (Multi-choice)
o Airtel
o Idea
o Reliance
o BSNL
o Tata Indicom ( If not Vodafone then go to Q12 )
Q3) Are you aware about Vodafone?

o Yes
o No (If No, then go to Q11 )
Q4) From which source you came to know about Vodafone?

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 o Advertisement (Multi-choice)
o Hoardings
o Newspapers
o Mouth Publicity
Q5) Since how long you are using Vodafone services?

o Less than 1 month

o 2-6 months
o 6-12 months
o More than 1 year

Q6) Which of the following services do you use of Vodafone?

o Pre-paid
o Post-paid
Q7) Which services are more helpful to you while using Vodafone services?

o Call rates (Multi-choice)

o SMS service
o Network
o Value Added Services
Q8) Dou you call at customer care?

o Yes
o No
If yes, how often you call at customer care?

o Daily
o Once a week
o Once a month

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 o Occasionally
Q9) For what reason you call at customer care?

o Value added services (Multi-choice)

o Information regarding new schemes
o Other queries
o Complaining

Q10) Rate the following services on the basis of your satisfaction.

Services Excellent Very Good Fairly good Average Poor

Network

SMS rates

New schemes and offers

Customer Care

Recharge outlets

Call Rates

Value Added Services

Q11) What makes you unaware about Vodafone?

o Less Advertisements
o Less Publicity
o Others

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 (If others then mention ________________________)

Q12) Why you are not using Vodafone services?

o Lack of awareness (Multi-choice)

o High Prices
o Poor Services
o Poor network
Q13) Would you like to recommend Vodafone to others?

o Yes
o No

Q14) Give your suggestions to help in serve you better.

_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
___

Name: ________________

Age: ___ years

Sex: Male/Female

Contact no.: ___________

Signature: __________

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