Brand Management Project: Category Attractiveness & Product Opportunity

BRAND MANAGEMENT PROJECT 201
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BRAND
MANAGEMENT
PROJECT
Category Attractiveness
&
Prodct O!!ortnity
Phase- I
Submitted to:
Prof Saju Epean Thomas
Submitted by:
AN"ND#A $AN%AR %&ND&
0'PMP00(1'
0')12)200*
0
The report below contains the Category attractiveness an pro!ct opport!nity "or
the bran #anage#ent pro$ect s!b#itte in partial "!l%ll#ent o" the re&!ire#ents
o" MBA Progra#'
Executive Summary
The "ast trac( growth o" the )nian teleco# in!stry has #ae it a
(ey contrib!tor to )nia*s progress' )nia aopte a phase
approach "or re"or#ing the teleco# sector right "ro# the
beginning' Privatisation was gra!ally intro!ce+ %rst in val!e,
ae services+ "ollowe by cell!lar an basic services' An
inepenent reg!latory boy+ Teleco# Reg!latory A!thority o"
)nia -TRA).+ was establishe to eal with co#petition in a
balance #anner' This gra!al an tho!ght"!l re"or# process in
)nia has "avo!re in!stry growth' Toay+ there are #ore than
//0 #illion teleco# s!bscribers in )nia' Every #onth+ 1,2 #illion
new s!bscribers are ae' 3pco#ing services s!ch as 4G an
5iMa6 will help to "!rther a!g#ent the growth rate' 7!rther#ore+
the )nian econo#y is slate to s!stain its 2,8 per cent growth
rate in the near "!t!re' This is s!pporte by the political stability
that the co!ntry is e6periencing c!rrently' )nia*s e#ographic
o!tloo( #a(es it one o" the largest #ar(ets in the worl' A
con!cive b!siness environ#ent is also create by a "avo!rable
reg!latory regi#e' There e6ists enor#o!s b!siness potential "or
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teleco# co#panies on acco!nt o" the co!ntry*s low teleensity+
which is close to 98 per cent presently' The )nian teleco#
in!stry is growing at the "astest pace in the worl an )nia is
pro$ecte to be the secon largest teleco# #ar(et globally by
/:9:'
C+APTER,"
CATEGOR#
ATTRACT"-ENE$$
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1.1.1TELE!" SET!#: $ %L!&$L SE'$#I!

The Indian telecom market has been displaying sustained high growth rates.
Riding on expectations of overall high economic growth and consequent rising
income levels, it offers an unprecedented opportunity for foreign investment. A
combination of factors is driving growth in the telecom market, promising rich
returns on investments.
India is the fourth largest telecom market in
Asia after hina, !apan and "outh #orea.
The Indian telecom network is the eighth largest in the world and the second
largest among emerging economies.
The Indian telecom market si$e of over %" & ' billion is expected to
increase three fold by ()*(. The expansion of the telecom industry in India has
been fuelled by a massive growth in mobile phone users, which has reached a
level of *) million users in +ecember ())(, an increase of nearly *)) per cent
in ())(.
This exponential growth of mobile telephony can be attributed to the
introduction of digital cellular technology and decrease in tariffs due to
competitive pressures. ,or the first time in India, the growth of cellular
subscriber base has exceeded the fixed line subscriber base. -owever, cellular
penetration is still * per cent as compared to world average of around *. per
cent.
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1.1.( I')I$' TELE!" SET!#
Indian Telecom sector, like any other industrial sector in the country, has gone
through many phases of growth and diversification. "tarting from telegraphic
and telephonic systems in the */th century, the field of telephonic
communication has now expanded to make use of advanced technologies like
0"1, +1A, and 233 to the great 40 Technology in mobile phones. +ay by
day, both the 5ublic 5layers and the 5rivate 5layers are putting in their
resources and efforts to improve the telecommunication technology so as to
give the maximum to their customers.
The Indian telecom sector can be broadly classified into ,ixed 3ine
Telephony and mobile telephony. The ma6or players of the telecom sector are
experiencing a fierce competition in both the segments.
The ma6or players like 7"83, 1T83, 9"83 in the fixed line and Airtel,
9odafone :-utch;, Idea, Tata, Reliance in the mobile segment are coming up
with new tariffs and discount schemes to gain the competitive advantage.
The 5ublic 5layers and the 5rivate 5layers share the fixed line and the
mobile segments. urrently the 5ublic 5layers have more than .)< of the
market share.
1.1.* )E"!%#$P+I +$#$TE#S =>>
According to the 9ision ()() document of the 5lanning ommission of
India, the country will witness continued urbani$ation. The urban population is
expected to rise from (' per cent to ?) per cent of total population by ()().
,uture growth is likely to be concentrated in and around .) to @) large cities
having a population of one million or more. This profi,e of concentrated
urban popu,ation -i,, faci,itate customi.ed te,ecom offerin/s from
operators.
*.*.? 1AR#AT -SI0E1 PL$2E#S $') T#E')S:-
7oth fixed line and mobile segments serve the basic needs of local calls, long
distance calls and the
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international calls, with the provision of broadband services in the fixed line
segment and 05R" in the mobile arena. Traditional telephones have been
replaced by the codeless and the wireless instruments.

1obile phone providers have also come up with 05R"> enabled multimedia
messaging, Internet surfing, and mobile> commerce
The much>awaited 40 mobile technology has entered in the Indian telecom
market.
The 0"1, +1A, 233 service providers are all upgrading them to
provide 40 mobile services.
Radio services have also been incorporated in the mobile handsets, along
with other applications like high storage memory, multimedia applications,
multimedia games, 154 5layers, video generators, ameraBs, etc. The value
added services provided by the mobile service operators contribute more than
*)< of the total revenue.
The ())/ budget has brought further relief to the customers with the
reduction in the tariffs, both local and long distance, and with slashing down
the roaming rentals. This is likely to lead to even more people going for
cellular services and more and more use of the value added services.
-owever, landline telephony is likely to remain popular, too, in the
foreseeable future. 1T83, the largest landline service provider, has recently
taken some bold initiatives to retain its market share and, if possible, expand it.
1.1.3 !PP!#T4'ITIES:-
India offers an unprecedented opportunity for telecom service operators,
infrastructure vendors, manufacturers and associated services companies. A
host of factors are contributing to enlarged opportunities for growth and
investment in telecom=
an expanding Indian economy with increased focus on the services sector
population mix moving favourably towards a younger age profile
urbani$ation with increasing incomes
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Investors can look to capture the gains of the Indian telecom boom and
diversify their operations outside developed economies that are marked by
saturated telecom markets and lower 0+5 growth rates.
1.1.5 !"PETITI6E L$')S$PE:-
+emand is driven by technological innovation and by growth in business
activity. The profitability of individual companies depends on efficient
operations and good marketing.
3arge companies have big economies of scale in providing a highly
automated service to large numbers of customers, and have the financial
resources required to build and maintain a large network.
"maller companies can compete effectively only in small markets or by
providing specialty services
1.1.7 #ESE$#+ I')4ST#2 %#!8T+ #$TI'%:-
The ,irst Research Industry 0rowth Rating reflects the expected industry
growth relative to other industries=>
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Ref=>planningcommission.gov.inCreportsCgenrepC...C*Dbg()().doc
Ref=>planningcommission.gov.inCreportsCgenrepC...C(Dbg()().doc
1.1.' Prodct/s $tage in P0C1,
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As we can see above the #obile in!stry graph shows that
teleco# in!stry is still at growing phase in the pro!ct li"e cycle'
The %rst operational lan lines were lai by the British
Govern#ent in Calc!tta in the year 9<<9 that was %rst ti#e
Teleco# sector intro!ce an 98<0 epart#ent o"
Teleco##!nication was establishe' )n the year 9882 teleco#
reg!latory a!thorities o" )nia was create then in 9888 #obile
services were la!nche in )nia an national new teleco# policy
is aopte an in the year /::: DOT beco#es a corporation
B=N>' A"ter that teleco# in!stry has been growing li(e cats an
ogs' The #obile in!stry can be re"or#s into three phases'
P2ase " 31**',20045
Act!al growth starte "ro# this phase' TRA) was set !p in
9882 an the %rst tari? orer was iss!e in 988<' The re"or#s
beco#es e?ective "ro# 988<'
P2ase "" 32004,20065
This phase #ar(e a s!staine increase in tele,ensity each
year which can #e been in the Graph in chapter 9+ the growth in
tele,ensity in /::4,/::; was appro6i#ately /@+ a percentage
which was greater than the total growth o" 9'8/@ in the 0: year'
8
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P2ase """ 32006,20075
Every year in!stry sho!l grow at pace o" grater than ;'0@
in the tele,ensity to achieve the target o" /0: #illion s!bscriber
by Dece#ber /::2+ Accoring to a release by TRA) by J!ne /::1
the total s!bscriber base has reache 904'42 #illion an tele,
ensity has reache to a level o" 94'80@'
1.1.* $easona8ity in sa8es and sa8es cyc8icity 1,
)n the Teleco# sector seasonality in sales -#obile s!bscriber.
oesn*t play #!ch role beca!se we have "o!n o!t since 988< to
/::2 #ostly each an every &!arter growing an the growth in
s!cceeing &!arter is #ore than its preceing one'
1.2.1 PE$T Ana8ysis1,
Po8itica8 A As #ar(ets are ereg!late+ both operators an
#an!"act!rers are "ree to act inepenently o" govern#ent
intervention' )n Co!ntries li(e )nia an China where Partial
reg!lations e6ist+ govern#ent intervention oes ta(e place'
Econo9ic A 5ith inco#es rising+ people have #ore isposable
inco#e+ which enables cons!#ers to be #ore selective with their
choice o" #obile phone+
loo(ing to other "actors rather than "!l%lling the #ost basic o"
!ser nees -te6t #essaging an phone calls. an price being s!ch
a (ey "actor'
$ocia8 A The rise o" the so,calle in"or#ation society has #ae
teleco##!nications increasingly #ore i#portant to cons!#ers+
both in ter#s o" wor( an leis!re' 3sers are #ore aware o" #obile
phone hanset choice an avance#ents !e to increase
in"or#ation availability'
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Tec2no8ogica8 A There have been #any global avance#ents in
technology s!ch as 3MT=+5)MAB+ 5AP+ G=M+ GPR=+ 4G+;G etc'
"9!ortant reg8ations and t2eir i9!act on t2e "ndian
te8eco9 indstry
3ni%e Access =ervice >icense Regi#e -3A=>.
3ni%e licensing #ar(e the en o" the license regi#e in the
)nian teleco# in!stry' )t helpe in aligning convergent
technologies an services' The establish#ent o" the 3ni%e
Access >icensing Regi#e -/::4. eli#inate the nee "or i?erent
licenses "or i?erent services' Players are now allowe to o?er
both #obile an %6e,line services !ner a single license a"ter
paying an aitional entry "ee' This oes not ta(e into acco!nt
national an international long,istance services an )nternet
access services'
Access De%cit Charges -ADC.
ADC #a(es it #anatory "or a service provier at the caller*s en
to share a percent o" the reven!e earne with the service
provier at the receiver*s en in long,istance telephony' This
s!bsiises the in"rastr!ct!re costs o" the service provier
enabling access at receiver*s en+ especially beca!se rental "or
%6e,line services is low' Revision in the ADC regi#e is e6pecte
to be "ollowe by "!rther tari? re!ction in teleco# services' )n a
#ove to bring own teleco# tari?s rastically+ TRA) has phase
o!t access e%cit charges "ro# this year'
3niversal =ervice Obligation -3=O.
99
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The 3=O policy was lai along with NTP *88 to wien the reach o"
telephony services in r!ral )nia' All teleco# operators are bo!n
to contrib!te 0 percent o" their reven!es to this "!n' This syste#
was p!t in place to brige the wie gap between !rban an r!ral
teleensity+ bringing it own "ro# the c!rrent 49 percent' )nitially+
only basic service proviers were !ner the p!rview o" 3=O'
>ater+ its scope was e6pane to incl!e #obile services also'
Altho!gh it increases the cost b!ren "or the teleco# co#panies+
3=O helps in b!iling the teleco##!nication in"rastr!ct!re in the
r!ral areas'
C+APTER,
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COMPET"TOR ANA0#$"$
2.1.1 PORTER:$ ;"-E ;ORCE$
The nat!re o" co#petition in an in!stry is strongly a?ecte by
s!ggeste %ve "orces' The stronger the power o" b!yers an
s!ppliers+ an the stronger the threats o" entry an s!bstit!tion+
the #ore intense co#petition is li(ely to be within the in!stry' )n
concentrate in!stries+ accoring to this #oel+ organiCations
wo!l be e6pecte to co#pete less %ercely+ an #a(e higher
pro%ts+ than in "rag#ente ones'
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Main As!ects o< Porter:s ;ive ;orces Ana8ysis
The original co#petitive "orces #oel+ as propose by Porter+
ienti%e %ve "orces which wo!l i#pact on an organiCation*s
behavio!r in a co#petitive #ar(et' These incl!e the "ollowingD
T2e riva8ry =et>een e?isting se88ers in t2e 9ar@et
T2e !o>er e?erted =y t2e csto9ers in t2e 9ar@et
T2e i9!act o< t2e s!!8iers on t2e se88ers
T2e !otentia8 t2reat o< ne> se88ers entering t2e 9ar@et
T2e t2reat o< s=stitte !rodcts =eco9ing avai8a=8e in t2e
9ar@et
3nerstaning the nat!re o" each o" these "orces gives
organiCations the necessary insights to enable the# to "or#!late
the appropriate strategies to be s!ccess"!l in their #ar(et
-Th!rlby+ 988<.' 5e will e6a#ine these concepts as escribe by
Porter*s 0 "orce #oel an as applie to )nian teleco# in!stry
si#!ltaneo!sly'
;orce 11 T2e Degree o< Riva8ry
The intensity o" rivalry+ which is the #ost obvio!s o" the %ve
"orces in an in!stry+ helps eter#ine the e6tent to which the
9;
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val!e create by an in!stry will be issipate thro!gh hea,to,
hea co#petition' The #ost val!able contrib!tion o" PorterEs F%ve
"orcesG "ra#ewor( in this iss!e #ay be its s!ggestion that rivalry+
while i#portant+ is only one o" several "orces that eter#ine
in!stry attractiveness'
This "orce is locate at the centre o" the iagra#
)s #ost li(ely to be high in those in!stries where there is
a threat o" s!bstit!te pro!ctsH an e6isting power o"
s!ppliers an b!yers in the #ar(et
Now let !s !nerstan the i#plication o" egree o" revelry in
"ndian te8eco9 sector' The i#ensions o" this para#eter are
eter#ine byD
+ig2 E?it Barriers1 )n any in!stry+ i" the e6it barrier is high it
increases the iIc!lty o" any organiCation to leave the in!stry
sector' =o it #a(es any iIc!lt to any willing to leave co#pany to
leave the in!stry' The teleco# in!stry s!?ers "ro# high e6it
barriers+ #ainly !e to its specialiCe e&!ip#ent' Networ(s an
billing syste#s cannot really be !se "or #!ch else+ an their
swi"t obsolescence #a(es li&!iation pretty iIc!lt'
+ig2 ;i?ed Cost1 The in!stry also s!?ers "ro# high %6e cost
which #a(es the entry barrier also very high "or the in!stry' )t
co#es as no s!rprise that in the capital,intensive teleco#
in!stry the biggest barrier to entry is access to %nance' To cover
high %6e costs+ serio!s conteners typically re&!ire a lot o" cash'
5hen capital #ar(ets are genero!s+ the threat o" co#petitive
entrants escalates' 5hen %nancing opport!nities are less reaily
available+ the pace o" entry slows' Meanwhile+ ownership o" a
teleco# license can represent a h!ge barrier to entry'
1,2 players in each region
4 o!t o" ; B)G,7o!r present in each region
-ery 8ess ti9e to gain advantage =y an innovation1 Every
co#pany in this in!strial sector in investing a h!ge a#o!nt in
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research an evelop#ent an #ar(eting strategy' That is why
we see any o?er la!nche by any co#pany is co!nter attac(e by
other co#panies very soon' This #a(es the in!stry rivalry #ost
pro#inent'
Eg' Caller t!nes+ li"e ti#e car
Price >ars1 The price war is really very %erce in this in!stry'
Price war in teleco# in!stry has co##oitiCe the #ar(et that
braning has ta(en a bac(seat'
;orce 21 T2e T2reat o< Ne> Entrants
Both potential an e6isting co#petitors inJ!ence average
in!stry pro%tability' The threat o" new entrants is !s!ally base
on the #ar(et entry barriers' They can ta(e iverse "or#s an are
!se to prevent an inJ!6 o" %r#s into an in!stry whenever
pro%ts+ a$!ste "or the cost o" capital+ rise above Cero' )n
contrast+ entry barriers e6ist whenever it is iIc!lt or not
econo#ically "easible "or an o!tsier to replicate the inc!#bents*
position' The #ost co##on "or#s o" entry barriers+ e6cept
intrinsic physical or legal obstacles+ are as "ollowsD
Econo#ies o" scaleD )n teleco# in!stry the econo#ies o"
scale e6ists "ro# the s!pplier sie' That is why co#panies
try to increase their s!bscriber base at rastic rate'
Distrib!tion channelsD Distrib!tion channels are also
proviing a #a$or eter#ining "actor' These channels are
not loyal to any co#pany an co#petitors can easily
access the# an #a(e o!t wor( "or the#'
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C!sto#er =witching CostsD C!sto#er switching cost is
very low+ as cost o" new connection is really low' An new
connection o?ers #ore bene%ts to the c!sto#ers'
;orce 41 T2e T2reat o< $=stittes
The threat that s!bstit!te pro!cts pose to an in!stryEs
pro%tability epens on the relative price,to,per"or#ance ratios o"
the i?erent types o" pro!cts or services to which c!sto#ers can
t!rn to satis"y the sa#e basic nee' The threat o" s!bstit!tion is
also a?ecte by switching costs A that is+ the costs in areas s!ch
as retraining+ retooling an reesigning that are inc!rre when a
c!sto#er switches to a i?erent type o" pro!ct or service' )t also
involvesD
Pro!ct,"or,pro!ct s!bstit!tion -e#ail "or #ail+ "a6.H is
base on the s!bstit!tion o" neeH
Generic s!bstit!tion -Kieo s!ppliers co#pete with travel
co#panies.H
=!bstit!tion that relates to so#ething that people can o
witho!t -cigarettes+ alcohol.'
Now let !s isc!ss this concept "or teleco# in!stry' The potential
#a$or s!bstit!tes "or teleco# in!stry are as "ollowsD
KO)P -=(ype+ Messenger etc'.
Online Chat
E#ail
=atellite phones
All o" these technologies have a h!ge potential+ tho!gh none o"
the above a #a$or threat in c!rrent scenario' =o the teleco#
in!stry has to (eep a close loo( on these s!bstit!tes'
;orce (1 Byer Po>er
92
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B!yer power is one o" "orces that inJ!ence the appropriation o"
the val!e create by an in!stry' The #ost i#portant
eter#inants o" b!yer power are the siCe an the concentration
o" c!sto#ers' Other "actors are the e6tent to which the b!yers are
in"or#e an the concentration or i?erentiation o" the
co#petitors' Lippenberger -988<. states that it is o"ten !se"!l to
isting!ish potential b!yer power "ro# the b!yerEs willingness or
incentive to !se that power+ willingness that erives #ainly "ro#
the Fris( o" "ail!reG associate with a pro!ctEs !se'
This "orce is relatively high where there a "ew+ large players
in the #ar(et+ as it is the case with retailers a grocery storesH
Present where there is a large n!#ber o" !ni?erentiate+
s#all s!ppliers+ s!ch as s#all "ar#ing b!sinesses s!pplying
large grocery co#paniesH
>ow cost o" switching between s!ppliers+ s!ch as "ro# one
Jeet s!pplier o" tr!c(s to another'
)n the conte6t o" )nian teleco# in!stry we can say that the
"ollowing points inJ!ence the b!yer powerD
>ac( o" i?erentiation a#ong the service provier
C!t throat co#petition
C!sto#er is price sensitive
>ow switching costs
N!#ber portability to have negative i#pact
;orce 61 $!!8ier Po>er
=!pplier power is a #irror i#age o" the b!yer power' As a res!lt+
the analysis o" s!pplier power typically "oc!ses %rst on the
relative siCe an concentration o" s!ppliers relative to in!stry
9<
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participants an secon on the egree o" i?erentiation in the
inp!ts s!pplie'
The ability to charge c!sto#ers i?erent prices in line with
i?erences in the val!e create "or each o" those b!yers !s!ally
inicates that the #ar(et is characteriCe by high s!pplier power
an at the sa#e ti#e by low b!yer power'
)n the rawbac( o" )nian teleco# in!stry the "ollowing sho!l
be (ept in #inD
>arge n!#ber o" s!ppliersD The in!stry basically has a large
n!#ber o" s!ppliers+ which helps the# to choose "ro# a lot o"
options' =o they try to select the best option to eliver the
val!e to the c!sto#ers an to have a co#petitive avantage
"ro# their co#petitor'
=hare tower in"rastr!ct!reD Technology has helpe the# to
share the tower in"rastr!ct!re' This basically helps the# to
re!ce the initial invest#ent a lot'
>i#ite pool o" s(ille #anagers an engineers especially
those well verse in the latest'
Mei!# cost o" switching since changing their harware wo!l
lea to aitional cost in #oi"ying the architect!re'
Overall inJ!ence on the in!stry A #ei!#'
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2.1.2 Major Players
httpDMMwww'iniano#ics'co#M/::8M:2M90Mtop,9/,wireless,operators,in,inia,by,
s!bscribersM
#evie- of 8ire,ess 9%S" and )"$: Services
The 2ireless Industry crossed ;3(.<1 million>subscribers mark as by end of
"ay (==<. This total subscribers base of ?E(./* million comprise of (<>.13
million 0"1 and *)E.E* million +1A subscribers. +uring the financial year
/:
S. 'o. 8ire,ess
%roup
"ar?et
share 9@:
#evenues
"i,,ion
#evenue @
of tota,
mar?et
revenue
* 7harti (4./@ 4./.( 4?
( Reliance *'.E. *(E)* **.E
4 9odafone *@.EE (*@?( ().@
? 7"83 *4.4* *)'@4 *).(
E Tata /./4 /.@E( './
. I+AA './. /@.*. /.)
@ Aircel ?.@4 4')? 4.E
' 1iscellaneo
us
(.// (@*@ (.E
0
())'>)/ around 1*=.57million subscribers were added with a growth rate of
E).))< as compared to E'.*(< growth during the year ())@>)'.
The +epartment of Telecommunication :+oT; is has very aggressive plans to
increase the pace of growth, targeting E)) million by ()*). 1ost of the
expansion in subscribers is set to occur in #ura, India. IndiaFs rural telephone
density has been languishing at around *..E?. The subscriber addition rate has
been strong in the last *( months but the regulatory developments will increase
competition and thus curtail the long>term growth rates of individual
companies. The savings through the setting of tower companies will partly go
towards the higher capex and opex costs from more stringent spectrum
allocation norms for the incumbents. The Telecommunications sector has been
consistently adding more than *) million subscribers every month. All the
private operators 0"1 as well as the +1A operators have been very
consistent in their performance.
-owever the recent regulatory developments have been negative for the
telecom companies as it has increased the number operators per circle which
intensified the competition. The addition of players like Aircel, 3oop Telecom
:formerly 753;, Tata +ocomo, 9irgin 1obile and a few more yet to roll out
their services like "wan Telecom, and %nitech Telecom the pressure on
established players is set to increase. "o also with the implementation of 185
and 40 spectrum allocation the "ervice providers have to be the best service
caterers to hold on to their market shares.
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www'reportb!yer'co#M'''M#obile,services,to,#obilise,the,inian,
teleco#,sector
The mar?et share of different %S" operators as on "ay (==< is disp,ayed
be,o-:
www'reportb!yer'co#M'''M#obile,services,to,#obilise,the,inian,teleco#,
sector
The 1arket leader in 0"1 sector being 7harti Airtel with 4(< of 1arket share
followed by 9odafone at (?<. The state owned 7"83 is third in the
competition with *.< of the share in the 0"1 market.
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0
+1A market ma6ors Reliance has got licence to operate:in *? circles
and ? metro cities; in the 0"1 band and they have launched their services in
the market. The existing players face a tough competition as Reliance and Tata
:with +ocomo; have existing distribution channels and brand name, and can be
a potential threat to Airtel and 9odafone.
"o is the case for Tata Indicom which recently launched its 0"1 services by
the name Tata +ocomo in *' circles in India.
Tata )ocomo: Tata +ocomo, the latest entrant into the 0"1 market had to get
some innovative and low priced packs to attract customers to switch to Tata
+ocomo even before the actual implementation of 185. As a part of this they
are offering *paise calling per second for local: and "T+ calls as a limited
period offer;. The success for Tata +ocomo lies in winning third
generation:40; airwaves in as many circles as possible and bringing their
internationally famed expertise into the domain.
The innovativeness here is they are branding their service on the basis of
Gvalue for each secondH, and Gpay for only what you have usedH. Thus they are
trying to attract customers even before the implementation of 185. As
Toshinari #uneida> 1.+.of +ocomo their target is to achieve *))million
customers in the next three years.
The mar?et share of different )"$ operators as on "ay (==< is
disp,ayed be,o-:
/4
0
www'reportb!yer'co#M'''M#obile,services,to,#obilise,the,inian,teleco#,
sector
oming to the +1A market, Reliance ommunication is a tough market
player to challenge with around E/.'(< of the total +1A market, followed
by Tata Teleservices:Tata Indicom and 9irgin together; which has a share of
44..@<.
6ir/in "obi,e = 9irgin 1obile as it says is GIndiaFs IfirstF national youth>
focused mobile serviceH. 9irgin 1obile branded services are being offered to
the Indian consumers by Tata Teleservices through a brand franchise with
9irgin 1obile. 9irgin 1obile India will provide Tata Teleservices with
experience and expertise in designing, marketing and servicing of G9irgin
1obileH branded products for the youth segment.
They are targeting the Jouth segment by offering schemes like get paid for
incoming calls, pay for the first message and get *)) messages free for that
day.
Industry #evenue 9(==(-(=1=:
Accoring to a 7rost N =!llivan in!stry analyst+ by /:9/+
%6e line reven!es are e6pecte to to!ch 3=O 9/'/ billion
/;
0
while #obile reven!es will reach 3=O 48'< billion in )nia' )nia
has beco#e the secon co!ntry in the worl to have #ore than
9:: #illion CDMA,base -coe ivision #!ltiple access. #obile
phone s!bscribers a"ter the 3=+ which has 902 #illion CDMA
!sers' The )nian teleco##!nications in!stry is on a growth
tra$ectory with the G=M operators aing nearly 8 #illion new
s!bscribers in April /::8+ ta(ing the total !ser base to /82
#illion+ a growth o" 4'99 per cent over the aitions #ae the
previo!s #onth' The %g!res+ however+ o not incl!e the G=M
s!bscriber aitions #ae by Reliance Teleco#'
#ear Revene3&$A =i88ion5
2002,04 8
2004,0( 9:
200(,06 99
2006,0B 90
200B,07 /:
200',0* 4/
200*,
103<orecasted5
;4
a' httpDMMwww'cell!lar,news'co#MstoryM42219'php
(.1.* Strate/y ompetition:-
$irte, 9mar?et ,eader:
2ith a 4(< market share. Airtel has emerged as a market leader, 7harti
televentures have positioned themselves as intergrated players with desire to
have a presence in basic :wire line and wireless; as well as national and
international long distance.
6odafoneA &S'L 9mar?et cha,,en/ers:
9odafone with a (?< market share has followed a differentiations
strategy by offering its customers value added services :9A";. They have
/0
0
followed a top down approach, tapping category a cities, 7"83 is a state
owned player with market share of *.< and has been able to leverage its low
cost position in small towns and 7 and category cities.
I)E$ 9mar?et fo,,o-er:
2ith a *E< market share it has positioned itself as a Ivalue for moneyF
brand. It simply follows the leader and the challenger after the technology
becomes successful.
#e,ianceATaTaA $irce,AShyam Te,ecomA SpiceATaTa )! ! "!A 9mar?et
'ichers:
They are the niche players who cater to very small niche markets, which
are not served by the big players.
2.1.( $COT ANA0#$"$
The =5OT analysis provies in"or#ation that is help"!l in
#atching the %r#Es reso!rces an capabilities to the co#petitive
environ#ent in which it operates' As s!ch+ it is instr!#ental in
strategy "or#!lation an selection' The "ollowing iagra# shows
how a =5OT analysis %ts into an environ#ental scanD
SWOT Analysis Framework
$trengt2s
Pere we will analyCe the
strengths o" the teleco#
in!stry as a whole'
The #ost i#portant "actors areD
/1
Environ#ental =can
M Q
)nternal Analysis E6ternal Analysis
M Q M Q
=trengths 5ea(ne
sses
Opport!nities Th
reats
R
$COT Matri?
0
Technology is avance an easy to i#ple#entD 7or
teleco# in!stry the technology is really avance an
#ore an #ore invest#ent is one on technology to get
worl class in"rastr!ct!re an (nowhow to p!t in this %el'
Recently the teleco# sector is going to a 4G spectr!#
as its latest !p,graation'
Manage#ent Tea# has prior e6perienceD The
#anage#ent tea# controlling )nian teleco# sector in
really eIcient' Than( goes to the ))Ts which pro!ce worl
class engineers' =o )nian teleco# sector has ab!nance
o" technological (nowhow'
Cea@ness
The wea(nesses o" the )nian teleco# sector are as "ollows'
Pigh Cost o" )n"rastr!ct!reD The in"rastr!ct!re cost o"
teleco# in!stry is very high'
>ow c!sto#er retention powerD The c!sto#er retention
power "or teleco# in!stry is really low an the c!sto#er
changes their service provier co#pany very soon'
O!!ortnity
Po!8ation1 The pop!lation o" )nia is really an opport!nity
o" teleco# service proviers+ as the n!#ber o" pop!lation
witho!t teleco# service is also very high' The in!stry has to
target )nia*s h!ge pop!lation to grow'
C2anging Po!8ation !syc2ogra!21 Pop!lation
psychograph is also changing' Previo!sly teleco# service
was tho!ght as an e#ergency service+ now it has beco#e an
essential part o" li"e in o!r co!ntry'
/2
0
"ncreased Penetration 0eve81 All the organiCations o" the
in!stry are trying to increase their penetration level+ in
other wor to increase the tele,ensity o" the co!ntry' The
!rban )nian pop!lation gives a real growth prospect to the
in!stry'
;D"1 The "oreign irect invest#ent in teleco# has been
hi(e !p "ro# ;8@ to 2;@' This #ove is positive "or the
sector+ as it re&!ires invest#ents o" Rs 2:: A8:: #illion over
the ne6t 0 years' 7D) inJow by /::; was 880:'8; cores in
teleco#' Co!ntries li(e E!rope+ Lorea+ an Japan teleco# are
li(ely to enter )nia+ as )nia is seen as "astest growing
teleco# #ar(et in worl'
T2reats
The treats to the in!stry are the "ollowingD
Govern#ent Policies A Govern#ent #ay provie licenses to
#any "oreign operators+ which #ay alreay have pose a
threat "or the e6isting players in the in!stry'
New Technology can change the #ar(et yna#icsD A lot o"
new technologies are co#ing' Then even have the potential
o" changing the entire in!stry yna#ics or even create
s!bstit!te o" the teleco# services e6isting'
$o9e o< t2e e?a9!8es are <o88o>s1
KO)P -=(ype+ Messenger etc'.
Online Chat
E#ail
=atellite phones
To s!##ariCe the =5:T analysis we can raw the "ollowing
"ra#ewor( "or teleco# in!stryD
/<
0
C+APTER,
"""
Csto9er Ana8ysis
/8
0
3.1. Need-gap Analysis:
4.1.1. Csto9er Ana8ysis1
5e can ivie c!sto#ers into vario!s seg#ents base on
their nees'
o =eg#ent 9D this seg#ent o" c!sto#er wants latest
innovations in their #obile phone' They pay
pre#i!# "or it' This gro!p is intereste in
e6peri#enting' 7or the# it is their stat!s sy#bol'
They (now al#ost all the latest thing in teleco#
in!stry'
o =eg#ent /D Partic!lar c!sto#er seg#ent wants
val!e "or #oney in ter#s o" e?ective call rates' They
!tiliCe so#e val!e ae services' Their #a$or "oc!s
"or telephone is $!st to co##!nicate'
o =eg#ent 4D This c!sto#er seg#ent teleco# pro!ct
is l!6!ry' )t is a large seg#ent' 5e can ter# it as
BOP' E?ective call rates an c!sto#iCe plan can
wor( well'
o B!siness seg#entD This seg#ent*s nees are
istinctly i?erent "ro# other seg#ents' They want
c!sto#iCe "eat!res an services'
4.1.2. Descri!tion o< csto9er Pro=8e91
Ma$or proble#s o" c!sto#er
o Piing o" in"or#ation -regaring charges.
o >ac( o" avance technology
o Kal!e proposition is less
o Pro#otional calls
4:
0
o E6pensive Kal!e ae services
o O?erings are not co##!nicate properly
o Poor a"ter sales services "or #a$or players
o Networ( $a#
o Call getting isconnecte
o Karying sche#es an a#o!nt o" sche#es available
o >ac( o" personaliCe pro!ct
4.1.4. ProD8ing o< ne> csto9ers <or a ne> !rodct1
O!r c!sto#ers are %rst #overs in technology' They are
innovators an early aopters' O!r c!sto#er belongs to
care+ who spen #ore #oney on gagets+ li"e style an
&!ality o" li"e'
Another pro%le which we want to target is b!siness class'
5e provie b!siness sol!tions with technology' 5e
provie high en service to in!stry "or networ(ing'
5e target yo!th c!sto#ers those want to obtain every
avance technology available into the #ar(et'
4.2. $a8es Potentia81
"ndian Te8eco99nication indstry+ with abo!t
;1;'</ #illion #obile phone connections -J!ne /::8.+ is
the thir largest teleco##!nication networ( in the worl
an the secon largest in ter#s o" n!#ber o" wireless
connections' 7or the past ecae or so+
teleco##!nication activities have gaine #o#ent!#
in )nia' E?orts have been #ae "ro# both govern#ental
an non,govern#ental plat"or#s to enhance the
in"rastr!ct!re' The iea is to help #oern
teleco##!nication technologies to serve all seg#ents o"
49
0
)nia*s c!lt!rally iverse society+ an to trans"or# it into a
co!ntry o" technologically aware people'
Te8edensity1 ;9':<@ -J!ly /::8.
ProEected te8edensity1 1/1 #illion+ ;1@ o" pop!lation
by /:9:'
#ear8y Ce88 !2one Addition1 994'/1 #illion -/::2.
Mont28y Ce88 !2one Addition1 9;'4< #illion -J!ly /::8.
19/ #illion #obile s!bscribers+ acco!nting "or a tele,
ensity o" aro!n 09 per cent by /:9/'
Accoring to s!rvey con!cte by No(ia+ teleco# sector
is e6pecte to e#erge as single largest co#ponent o"
Co!ntry*s GDP with 90';@ contrib!tion by /:9;'
4.4 Basic) Prodct "dea
=!perior technological service to c!sto#ers
Broa ban "acility
Television "acility
Avance ga#ing "acility
No networ( $a#
No call getting isconnecte
PersonaliCe =ervices "or pre#i!# class c!sto#ers'
4/
0
C+APTER,
"-
Genera8 Co99ents
44
0
(.1. Genera8 Co99ents
Descri!tion o< t2e o!!ortnity
The )nian teleco##!nications in!stry is one o" the
"astest growing in the worl an )nia is pro$ecte to beco#e
the secon largest teleco# #ar(et globally by /:9:'
)nia ae 994'/1 #illion new c!sto#ers in /::<+ the largest
globally' The co!ntry*s cell!lar base witnesse close to 0: per
cent growth in /::<+ with an average 8'0 #illion c!sto#ers
ae every #onth'
Accoring to the Teleco# Reg!latory A!thority o" )nia -TRA).+
appro6i#ately 9;'/0 #illion telephone connections+ incl!ing
wireline an wireless+ were ae !ring J!ly /::8+ ta(ing the
total n!#ber o" teleco# s!bscriber base at the en o" J!ly
/::8 to ;28':2 #illion "ro# ;1;'</ #illion a #onth be"ore'
Accoring to B!siness Monitor )nternational+ )nia is c!rrently
aing <,9: #illion #obile s!bscribers every #onth' )t is
esti#ate that by #i /:9/+ aro!n hal" the co!ntryEs
pop!lation will own a #obile phone' This wo!l translate into
19/ #illion #obile s!bscribers+ acco!nting "or a tele,ensity o"
aro!n 09 per cent by /:9/'
)t is pro$ecte that the in!stry will generate reven!es worth
3=O ;4 billion in /::8,/:9:'
New Technology "or )nian #ar(et'
Biing process is li(ely to start soon'
None o" the e6isting player is proviing 4G "acilities'
No aitional avantage "or the e6isting player'
7oc!sing on "!t!re #ar(et'
4;
0
(.1.2 ;easi=i8ity1,
T2e teleco# sector is one o" the "astest growing sectors'
)t o?ers three categories o" services' 7i6e line services+
wireless services an cell!lar services+ the cell!lar services is
calle as #obile service beca!se o" its nat!re o" !sage ' there
are two types o" #obile services networ(s, Global syste# "or
#obile -G=M. an coe ivision #!ltiple access-CDMA.'
Accoring to available ata the tele,ensity was only :':/@ in
98;<+ now in the year /::2 the tele, ensity has reache by
//'0@ an the s!bscriber base has crosse /0: #illion #ar('
This is very signi%cant inicator' An al#ost 2:@ o" o!r
pop!lation living in r!ral an se#i,!rban areas' 5e have an
opport!nity beca!se still r!ral an se#i r!ral is covere only
90@,/:@ by the Teleco# co#panies' P!ge !ntappe #ar(et is
available so there is great scope o" i#prove#ent'
(.1.4 Possi=8e +rd8es1,
Reg!latory !ncertainty s!rro!ning li#ite #obility an
!ni%e licensing casts o!bt on the "!t!re irection o" the )nia
teleco# in!stry Reg!latory battles are not new to )nia an
the latest one to grab the healines s!rro!ns Eli#ite
#obilityE' Thro!gh the !se o" 5>> -wireless local loop.
technology+ basic %6e,line operators can !se li#ite #obility
to broaen their service port"olio+ o"ten with tari?s signi%cantly
lower than that o?ere by the cell!lar operators' The teleco#
sector is also aSicte by a n!#ber o" restraints s!ch as
sl!ggish pace o" re"or# process' >ac( o" in"rastr!ct!re in se#i,
r!ral an r!ral areas+ li#ite spectr!# availability+ #ore over
h!ge initial cost to ta(e the telephony in r!ral an se#i,r!ral
#ar(et i#pee the teleco# service proviers to tap the h!ge
r!ral #ar(et'
40
0
Conc8sion
Teleco# in!stry is seeing a rise as the tren goes an has
potential "or growth' Ta(ing into acco!nt the tele,ensity o"
4<'<<@ there is still !ne6plore #ar(et' The co#petition is %erce
with aro!n 9: =ervice proviers in #ost o" the 9< circles an
also the i#ple#entation o" MNP' The service proviers have to be
i?erent an have to stic( to strict service nor#s an provie
e6cellent c!sto#er service in orer to hol on to the #ar(et
share' Th!s there is intense co#petition in the #ar(et b!t at the
sa#e ti#e scope "or evelop#ent in r!ral areas' Airtel+)ia an
Koa"one have ta(en !p initiatives to provie c!sto#iCe
connections to R!ral c!sto#ers li(e Motor p!#ps control syste#+
lo! spea(er phone "or illiterates an so on'
)n a "ew wors Teleco# sector has a lot o" scope "or growth an
the c!sto#ers at the sa#e ti#e have the bene%t to choose "ro# a
wie range o" service proviers o?ering vario!s plans targete to
speci%c c!sto#ers'
Anne?re1,
RE;ERENCE$1,
b' httpDMMwww'iniano#ics'co#M/::8M:2M90Mtop,9/,wireless,operators,in,
inia,by,s!bscribersM
c' httpDMMwww'cell!lar,news'co#MstoryM42219'php
d. www.efytimes.comCefytimesCfullnews.aspKedidL4)4@E
e. www.bharatbook.comCproductdetail.aspKidL'(4/*
f. http=CCwww.scribd.comCdocC*E.'??'.C1arketing>Report>on>7harti>Airtel
41
0
g. http=CCwww.slideshare.netCgoel.gauravgoelCstudy>of>telecom>sector
h. http=CCwww.icmrindia.orgCcasestudiesCcatalogueC7usiness<()"trategyC7harti
<()Airtel<()3imited<()and<()the<()Indian<()Telecom<()"ector.htm
i. http=CCwww.bharatbook.com.
6. planningcommission.gov.inCreportsCgenrepC...C*Dbg()().doc
k. www.reportbuyer.comC...Cmobile>services>to>mobilise>the>indian>telecom>sector>in>
futureC
l. www.ficci.comCtelecom.htm
m. tutor(u.netCbusinessCstrategyCcompetitorDanalysis.htm
n. http=CCwww.airtel.inC
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BRAND MANAGEMENT PROJECT 201

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