Project Report: "Study of Reliance PCO Market and Sales"

PROJECT REPORT
On
“Study of Reliance PCO market and sales”
For
Reliance Infocomm Limited
Submitted By:
Niveditha Ramanand
FP46/116
INDIAN BUSINESS ACADEMY

“Study of Reliance PCO market and sales”
Submitted in Partial Fulfillment of the requirement for the

Summer Placement Project during
Post Graduate Diploma in Business Management
[PGDBM]
Of the
By
Niveditha Ramanand
Regd No: FP46/116
Under the guidance of
Mr. Manish Jain Mr. J K Naidu

CEO Zonal Lead, CO Division
Indian Business Academy Reliance Infocomm LTD
Bangalore Bangalore

Thataguni Post, Lakshmipura
Kanakpura Main Road, Bangalore - 560062
CERTIFICATE
This is to certify that project entitled “study of Reliance PCO market and
sales” submitted by Ms Niveditha Ramanand (Regd No: FP46/116) student
of Indian Business Academy is a work of dissertation carried out by her
during the period of April 2005 to June 2005 .This project is submitted in
partial fulfillment of the requirements for the summer placement project
during the Post Graduate Diploma in Business Management
Prof Ramesh Thagat

DEAN
Indian Business Academy
Bangalore
Date:

Kanakpura Main Road
Bangalore - 560062
CERTIFICATE
This is to certify that project entitled “study of Reliance PCO market and
sales” submitted by Ms Niveditha Ramanand (Regd No: FP46/116) student
of Indian Business Academy is a work of dissertation carried out by her
during the period of April 2005 to June 2005 .This project is submitted in
partial fulfillment of the requirements for the summer placement project
during the Post Graduate Diploma in Business Management
Mr. Manish Jain

CEO
Bangalore

Kanakpura Main Road
Bangalore - 560062
CERTIFICATE OF GUIDANCE
This is to certify that Ms Niveditha Ramanand has conducted the project

titled “study of Reliance PCO market and sales” under my guidance and
supervision. This project report is submitted in partial fulfillment of the
requirement for the summer placement project during the Post Graduate
Diploma in Business Management, a prestigious PG Diploma awarded by
the Indian Business Academy.
Mr. Manish Jain

Internal Project guide/Mentor
Bangalore

Kanakpura Main Road
Bangalore - 560062
Declaration by the Student
I, Ms Niveditha Ramanand, a student of Indian Business Academy,

Bangalore, declare that this Project Report titled “study of Reliance PCO
market and sales” conducted at Reliance Infocomm, Bangalore is an
original and a bonafide work carried in partial fulfillment of the requirement
for the summer placement project during the Post Graduation Diploma in
Business Managemt, a PG Diploma awarded by Indian Business Academy.
The findings and conclusions in this report are based on the information
gathered through personal interactions with the staff, questionnaire and the
observation during the tenure of summer placement in the company.
Niveditha Ramanand
Regd No FP46/116

Kanakpura Main Road, Bangalore - 560062
Acknowledgment
An undertaking of this type is a result of contribution received from a number of people.

Never can this report be claimed as my individual effort. No amount of words written
will be sufficient and adequate to acknowledge all the people who have provided me with
the inspiration, guidance and help during the preparation of the project. Therefore I
extend my deep sense of gratitude towards them.
I am extremely grateful to Mr.Vinay Singh, PCO head of Karnataka State Reliance
Infocomm for giving me an opportunity to work on the project “study of Reliance
PCO market and sales”

I also take the opportunity to thank our external project guides Mrs. Kalpana, Mr. J K
Naidu ( Zonal Lead ), Mr. Perin, Mr. Mohammed Shakeel ( Revenue Head ), Mr. Eshwar
( Local Business Associate Sainath Marketing), Mr. Raju Markandiah ( Customer
Relationship Executive) Ms Maya ( HR Head ) and Mr. Sundershan (Circle Head )for
their constant help and support during the project.
I express my sincere gratitude to Mr. Manish Jain, my mentor / internal guide, Mr

Ramesh Thagat, DEAN, Indian Business Academy, my colleagues and my dear parents
for their valuable inputs and constantly encouraging me in every step towards the
completion of the project successfully. Last but not the least; I would like to thank Indian
Business Academy for giving me the platform to gain practical exposure apart from the
regular curriculum and to experience life from its near distance.
Niveditha Ramanand
Regd No FP46/116

Kanakpura Main Road
Bangalore – 560062
i
EXECUTIVE SUMMARY
Reliance Infocomm Ltd a Reliance group company is India’s largest mobile service
provider with over 6 million subscribers and a Pan India Network covering over 1100
towns. In 2002, Reliance Infocomm launched Public Calling Offices (PCO) prepaid for
which it is associating with local partners in the form of Local Business Associates
(LBAs) in various cities and towns.
In Bangalore, Reliance Infocomm has 12 LBAs.The whole city is divided among these
12 partners. Within 2 months of its launch RIC was successful to acquire 2500 customers.
The responsibilities of these LBAs include sales, installation of PCO connection,
recharging the cards and service after sales
In spite of successful launch of wireless PCO in the market there has been a negative
attitude among the customers towards the reliance due to lack of service provided by
LBA.The customers are not educated properly with the handling of the FWT and
PPA,availability of the recharge coupons, the benefits of the wireless reliance connection.
No doubt at present BSNL is the market leader in this business but there are some private
players like AIRTEL, TATA, who are also giving competition in some areas. The
negligence of the sales people has also hampered a lot resulting in some cases where the
customers are switching to their competitors. In order to tackle to this problem a project
was undertaken by the name Study of Reliance PCO market in Bangalore and sales of
coin box connection with the sole objective of identifying the process and rectifying
problems and sales.
To conduct this two month project summer trainees were hired and sent to each
area in the Bangalore city to do the survey of the existing as well as churned customers.
Each person was assigned an area handled by a particular LBA.The team was supposed
to understand the problems faced by the existing customers and the problem was to be
immediately brought into the notice of the respective LBA or the zonal head who were to
take the necessary actions to rectify the problem. The team was also supposed to analyze
why the some of the customers churned out of reliance and try to convince them to switch
back to reliance. Other than that the team also participated in the launch of coin box
connection of reliance and dealt with the sales of it too. They were also engaged in
ii
creating awareness among the people about reliance connection make them understand its
benefits and lure them to take the connection. The team was trained to impart necessary
information about the reliance PCO, commission structure and Tariff plan.
The project created a sense of trust among the PCO customers towards reliance. It also
helped to identify lot many problems which even the ZLs (Zonal Lead) where not aware.
The customers were also made aware of the product and its working.
WORD COUNT: 472
iii
TABLE OF CONTENTS
TITLE PAGE NOs

ACKNOWLEDGEMENT i
EXECUTIVE SUMMARY ii
INDUSTRY PROFILE – TELECOM SECTOR 3
RELIANCE GROUP 9
RELIANCE INFOCOMM 10
BUSINESS 11
VISION 19
FINANCIAL ANALYSIS 21
PCO MARKET 25
INTRODUCTION RELIANCE PCO 27
ORGANISATIONAL HIERARCHY 29
PRODUCT 30
PREPAID CARD MANAGEMENT 31
STATEMENT OF THE PROJECT 32
OBJECTIVE 33
PROCEEDINGS OF THE PROJECT 34
SWOT ANALYSIS 36
PROBLEMS FACED DURING PROJECT 37
PROBLEMS FACED BY CUSTOMERS 38
SCOPE OF PROJECT 39
STEPS TAKEN BY RELIANCE 40
ANALYSIS ON CHURNED CUSTOMERS 41
ANALYSIS ON EXISTING CUSTOMERS 47
OBSERVATIONS 58
RECOMMENDATIONS 60
1
CONCLUSION 61
EXHIBIT 1 62
EXHIBIT 2 66
EXHIBIT 3 69
EXHIBIT 4 71
BIBLIOGRAPHY 73
2
INDUSTRY PROFILE – TELECOM SECTOR
15th August 1997 marked the 50th anniversary of India's Independence from British hegemony.
Telecommunications have played a critical role in shaping India's march towards progress and the
importance they hold for the future of India cannot be overstated. Telecommunication Services
were introduced in India soon after their invention in late 19th century by the British, not for
meeting any socio-economic objectives but with the purpose of meeting the requirements of the
government in matter of defense, law and order, general administration and revenue collection.
The national investment in telecom in the first six five-year Plans since 1950 hovered between 1.4
and 2.7 percent of the Gross Domestic Product (GDP). Only after 1985 did things start looking up
for telecom, with the investments jumping up to 3.6 percent of GDP in the Seventh Plan (1985-90)
and 11.9 percent in the Eighth Plan (1992-97). The Ninth Five Year Plan has a plan of 13percent
of GDP to be invested on the Telecommunications Infrastructure. In 1989 the Telecom Research
Center (TRC) formulated some guidelines for Rural Telecom Sector with plans to implement a
phone in every village till 1999. With the opening up of the economy in 1991 the sudden
requirements for telecommunications changed and the plans were redrafted in 1994 through the
National Telecom Policy. The new National Telecommunications Policy (NTP) announced in
1994 anticipates an expansion of ten million lines to a total base of almost 16 million within the
eighth five-year plan which ended in March 1997. The plan also called for all 0.6 million Indian
villages to be connected to the telephone network by 1997 - until now, only about one-third have
had a telephone. In addition, the aim was to achieve an average density of at least 2.5 lines per 100
people by the year 2000 for the Rural Sector. The world average is 10 per 100 people. Presently
India has 21,328 Telephone Exchanges with a capacity of 15.1 million lines. The network is
growing at an enormous rate of 21.6%. One-fourth of the total capacity is installed in the four
metropolitan cities of Delhi, Bombay, Calcutta and Madras
The changes in the technology have helped in the advancement of the business in the faster rate.
To keep in track of the competitive global markets the government is always pressurized to revise
the policy, regulation, and structure of the telecom sector. India, have responded by restructuring
the state-controlled telecom service provider, increasing private participation, and deregulating
service provision
3
India’s teledensity is just 1.38 phones per 100 hundred inhabitants (one of the lowest teledensities
in the world);
2.3 million people are on India’s registered waiting list for phones (it takes two or more years to
get a phone in India);
India has between 200,000 and 300,000 middle-class consumers;
97 percent of India's 600,000 villages have no telephone at all;
64 million by 2006, and this will require an investment of at least $60 billion by 2006
The process of telecom reforms in India had started in 1980s. Private manufacturing
of customer premise equipment was allowed in 1984 and proliferation of individual STD/ISD PCO
network undertaken on a large scale across the country through private individual franchisees. The
leaders among these were the Mahanagar Telephone Nigam Limited (MTNL) and Bharat Sanchar
Nigam Limited (BSNL). A high-powered Telecom Commission was set up in 1989 with all the
powers of the Government
New Telecom Policy came into force in 1990s and thereafter the pagers and cell phones came into
use. This policy also paved the way for private sector participation in telecom services. An
independent statutory regulator was established in 1997. Internet services were opened in 1998 and
progressively there was a major involvement of private sector in the growth of telecom services in
the country. The Telecom Regulatory Authority of India (TRAI) was formed in January 1997 with
a view to provide an effective regulatory framework and adequate safeguards to ensure fair
competition and protection of consumer interests.
The Government has already taken substantial steps to deregulate the telecom environment since
1993. Initiatives such as liberalizing the Internet environment through the introduction of the ISP
policy have been moves in this direction. Yet, telecom infrastructure lags behind other Asia Pacific
nations such as China, Singapore, among others that boast higher telephone/PC/Internet
penetration, and world class telecom infrastructure in terms of bandwidth availability, etc. so
important for domestic IT market proliferation and software exports.
During the 2000-01 to 2009-10 period, domestic demand for telephone lines is expected to
increase at a CAGR of 13.8 percent, to 112 million lines by March 2010. With the increasing
penetration of wireless technologies, especially in the rural areas, the supply constraints in
4
providing telephone lines are expected to decline gradually. As a result, the unsatisfied demand is
expected to decline from 8.2 percent in end March 2001 to less than 2 percent by March 2010.
The penetration of cellular mobile services is expected to continue to increase at a significantly
high rate. The substitution of fixed phones by mobile phones is expected to increase, as the price
differential between the subscription prices of the two services continues to decline.
The number of telephone lines per hundred inhabitants (or teledensity) is expected to increase from 3.2
percent in end March 2001 to 5.5 percent by March 2005, and 9.5 percent by March 2010.
The total number of access lines (including mobile) is expected to increase from 35.8 million in end
March 2001 to 170-190 million by March 2010. Hence, teledensity (expressed in terms of the total
fixed and mobile lines) is expected to increase from 3.5 percent in end March 2001 to 7.5 percent by
March 2005, and over 15 percent by March 2010.
Opportunity
In a country like India, a rapid increase in telecom infrastructure has multiple benefits--a US $1
investment in telecom leads to US$ 6 increase in GDP according to a World Bank study. Also, the
growth in penetration leads to a virtuous circle of larger installed base, economies of scale in
negotiating prices of networking equipment which leads to lower service charges.
In India, when mobile population crosses PC population within another 12-18 months, the
opportunities for software are expected to be immense. For one, e-governance can really be given a
boost since more citizens will have access to low cost Internet access devices. Secondly, a large
population boosts development of localized content which further boosts airtime usage and revenues
of mobile phones. This will lead to further price reductions and so on. Thirdly, development of R&D
in areas of embedded software, mobile commerce can take place in the country enabling software
companies to tap these rapidly growing segments in international markets. With the government
abiding by its commitment of allowing Voice over IP (Internet telephony), a significant killer
application has come up which is expected to further spur Internet usage in India
India's above 70 million-line telephone network is among the top 10 networks in the world and the
second largest among the emerging economies, after China. India has one of the fastest growing
telecommunications systems in the world, with system size (total connections) growing at an average
of more than 20 percent per annum over the last 4 years. The industry is considered as having the
highest potential for investment in India. The growth in demand for telecom services in India will be
5
highest in the mobile services, followed by national and international long distance
Unified License: Earlier the Government of India (GoI) had issued separate licenses for Basic and
Cellular services. The Basic Service operators were also allowed to provide limited mobile services in
a specified area. However, in November of 2003, the GoI announced the policy of Unified Access
Service License (USAL). All the access providers whether providing Basic or Cellular were allowed to
migrate to USAL regime after paying the difference between the entry fee paid by the basic operators
and the entry fee paid by the fourth cellular service provider in each service area. All the Basic
Service operators have migrated to Unified Access Service License. All new licenses are being issued
as a Unified Access License. The one time entry fee varies from circle to circle depending upon the
category of circle starting from $220,000 to $ 40 million. The Annual License Fee also varies from
circle to circle starting from 6 % of the annual gross revenue (AGR) to 10% of the AGR.
Domestic long distance (DLD)/International Long Distance (ILD): DLD has been opened up for
private participation and three companies have obtained the licenses. As per the guidelines, announced
on August 15, 2000, the total foreign equity in a DLD company must not exceed 49 per cent.
International long distance has also been opened; industry estimates the market for international long
distance to grow from $3.9 billion in 2004 to $5 billion in 2005. DLD is expected to grow from $ 8
billion in 2004 to $9 billion in 2005.
Cellular: In 1992, the Government decided to open provision of Cellular Mobile Telephone Service
for private participation. India adopted the Global System of Mobile Communication (GSM). Today,
India has 8 private companies providing cellular services in 20 telecom circles and 4 Metro cities. The
subscriber base at present is approximately 25 million and is expected to reach 50 million by 2005.
CMDA Based Mobile Service: The CDMA technology developed by Qualcomm of the U.S. has been
recently introduced in India. Three major players (two private and the incumbent) are using the
technology to provide mobile services. The two private operators, Reliance and Tata, in less then a
year have achieved more than 7 million subscriber base. Reliance, the largest corporate house in
India, is the leading player in this area.
6
Present licensing position: In the current telecom services sector, there is no restriction in the number
of entrants. Any operator meeting the eligibility conditions can apply for a license. The licenses are
issued only for Unified Access licenses and no longer separately for basic and/or cellular. FDI
permitted is 49 percent.
1. Number of fixed-line subscribers: 40 million
2. Fixed-line penetration rate: 4/100
3. Number of cellular phone subscribers (GSM and CDMA): 32 million
4. Cellular penetration rate: 3/100
Three bodies manage India's telecommunications regulatory system:
1. The Telecom Commission (TC)

2. The Department of Telecommunications (DoT);
3. The Telecom Regulatory Authority of India (TRAI)
The three bodies have a framework of nominally independent authorities with checks and balances
designed to separate the formulation of policy from the licensing authority, and the regulation of tariffs
and interconnection.
The TC is responsible in formulating policy of the DoT for approval of the GoI. The TC holds control
over the budgetary allocation and disbursement of the state-owned telecom service and manufacturing
companies, including the service providers (BSNL, MTNL) and equipment providers (Indian
Telephone Industries, Telecommunications Consultants India Limited and Hindustan Teleprinters
Limited). The TC consists of five members: a Chairman and one member of each for Services,
Finance, Technology and Production.
The DoT functions as a policy maker, licensing authority and performs research and development and
training functions.
Telecom Regulatory Authority of India (TRAI) is responsible for facilitating interconnection
and technical interconnectivity between operators, regulating revenue sharing, ensuring
7
compliance with license conditions, fixing telecommunications tariffs, facilitating competition
and settling disputes between service providers.
Telecom Dispute Settlement Appellate Tribunal has been set up to settle disputes between
service providers, between licensor and service providers and also between consumers and
service providers.
Telecommunication best prospects (including upcoming major procurements)

India is growing at a very fast pace. The tele density target laid down in NTP'99- that of reaching 7
per hundred by 2005 has been achieved much ahead of the time i.e. by end of 2003 itself. Still the
tele-density is low as compared to the international standards. Tele-density in India rural areas is 0.5
per 100 people and the government plans to increase this to 4 per 100 by 2010. A total of 547,207 out
of 607,491 villages have been provided with village public telephone (VPT), i.e. one telephone per
village. Average monthly addition of 1.5 million cellular subscribers achieved during 2003 is about 14
times higher compared to the average growth of mobile subscribers in the preceding 8 years (since
1995). From a tele-density of less than 2 per cent in 2000, it is currently at approximately 7 percent
and is expected to increase to 11 by 2007 and 15 (175 million by 2010). This will require an
investment of over $69 billion. This will result in huge demand for switching and transmission
equipment, Base Tran receivers Towers for mobile, handsets, transport equipment, etc.
Rural connectivity continues to be on the government's priority list. The government expects about
10 percent of all connections provided by the private sector to be in the villages. To improve long
distance connectivity, a target of creating additional 1.8 million lines of telephone exchanges is also
proposed. The new policy envisages a crucial role of the private sector in development of the telecom
industry and to meet its targets. The targets are: setting up 0.14mn route kilometers of optical fiber
system, public call offices (PCO), station trunk dialing – domestic long distance (STD) PCO for every
10 km of national highway, broad base STD facilities and digitalization of all exchanges.
Telecommunication barriers to entry; "what are the negatives" (e.g., IPR issues, tariffs, import
restrictions)
India's tariffs are still high by international standards. The peak tariff rate was reduced to a ceiling
(with a few exceptions) of 20 percent in the last fiscal budget. One time entry fee for all telecom
service providers continues to be high along with large amount of performance guarantees and annual
8
recurring license fees in the form of revenue share, which varies from 6 percent to 12 percent. The
GoI permits a maximum of 49 percent for FDI in the telecom sector
RELIANCE GROUP
The Reliance Group founded by late Dhirubhai H Ambani (1932-2002) is India’s largest business
house with total revenues of over Rs 99,000 crore (US$ 22.6 billion), cash profit of Rs 12,500 crore
(US$ 2.8 billion), net profit of Rs 6,200 crore (US$ 1.4 billion) and export of Rs 15,900 crore (US$
3.6 billion).It is now under the hands of his sons Mukesh Ambani and Anil Ambani.
The Group’s activities span Exploration and Production (E&P) of oil and gas, refining and
marketing, petrochemicals (polyester, polymers, and intermediates), textiles, financial services and
insurance, power, telecom and infocomm initiatives. The Group exports its products to more than 100
countries the world over. Reliance emerged as India's Most Admired Business House, for the third
successive year in a TNS Mode survey for 2003.
Reliance Group revenue is equivalent to about 4.3% of India's GDP and it is targeting a GDP of 10%
by 2010.The Group contributes nearly 10% of the country's indirect tax revenues and over 6% of
India's exports. Reliance is trusted by an investor family of over 3.1 million - India's largest.
The Reliance Group Companies include: Reliance Industries Limited, Reliance Capital
Limited, Reliance Industrial Infrastructure Limited, and Reliance Telecom Limited, reliance
Infocomm Limited, Reliance General Insurance Company Limited, Indian Petrochemicals and
Corporation Limited and Reliance Energy Ltd.Their business also include exploration and production,
LPG business, polymers, chemicals, textiles etc.
9
RELIANCE INFOCOMM BUSINESS
Postpaid Prepaid Corporate PCO

Wireless
RELIANCE INFOCOMM
Reliance Infocomm is the outcome of the late visionary Dhirubhai Ambani's (1932-2002) dream to
herald a digital revolution in India by bringing affordable means of information and communication to
the doorsteps of India's vast population.
This also marks the beginning of Reliance’s dream of ushering in a digital revolution in India by
becoming a major catalyst in improving quality of life and changing the face of India.
"Make the tools of infocomm available to people at an affordable cost, they will overcome the
handicaps of illiteracy and lack of mobility", Dhirubhai Ambani charted out the mission for Reliance
Infocomm in late 1999. He saw in the potential of information and communication technology a once-
in-a-lifetime opportunity for India to leapfrog over its historical legacy of backwardness and
underdevelopment.
Working at breakneck speed, from late 1999 to 2002 Reliance Infocomm built the backbone for a
digital India - 60,000 kilometers of fiber optic backbone, crisscrossing the entire country. The Reliance
10
Infocomm pan-India network was commissioned on December 28, 2002, the 70th - birth anniversary
of Dhirubhai. This day also marked his first birth anniversary after his demise July - 6, 2002.
Reliance Infocomm network is a pan India, high capacity, integrated (wireless and wire line) and
convergent (voice, data and video) digital network, designed to offer services that span the entire
Infocomm value chain - infrastructure, services for enterprises and individuals, applications and
consulting. The network is designed to deliver services that will foster a new way of life for a New
India. Reliance infocomm will offer a complete range of telecom services, covering mobile and fixed
line telephony including broadband, national and international long distance services, data services
and a wide range of value added services and applications that will enhance productivity of
enterprises and individuals.
Reliance Infocomm will extend its efforts beyond the traditional value chain to develop and deploy
telecom solutions for India’s farmers, businesses, hospitals, government and public sector
organizations. Right now Reliance Infocomm has a total market share of 26% and it is a 20,000 worth
crore businesses
BUSINESS
Wireless
Reliance India Mobile
Reliance is India's largest mobile service provider with over 8 million subscribers as on June 30,
2004. Reliance India Mobile (RIM), its mobile service was commercially launched on May 1, 2003
and became the largest mobile service in seven months. RIM is now available in over 1100 cities and
towns across India and will increase its coverage to over 5000 cities and towns by the end of financial
year 2005.
Within a short span of one year, RIM has earned many accolades. RIM was voted "India's Most
Trusted Telecom Brand" by AC Nielsen Survey for Brand Equity - The Economic Times, 2003. The
"Monsoon Hungama" of July 2003 set a world record in adding one million mobile subscribers in just
10 days. Nearly 90 per cent of the handsets on RIM network are data enabled with access to R World
11
suite of hundreds of Java applications, which is again very unique in the world. With innovative
pricing and attractive multimedia enabled handsets, RIM was instrumental in making mobile phones
affordable to common people and increasing India's teledensity. Spurred by the innovative offerings
from RIM, the total number of mobile subscribers in India grew from 12 million in January 2003 to 37
million in June 2004, with Reliance garnering market share of 22 per cent.
Reliance Infocomm's pan India wireless network runs on CDMA2000 1x technology, which offers
superior voice and data experience compared to other competing technologies. CDMA 2000 1x
utilizes the scarce radio spectrum more efficiently, resulting affordable mobile services. It also offer
improved voice clarity, higher data speeds of up to 144 Kbps and seamless migration to new
generation mobile technologies.
R World
The Java-based R World suite of Reliance India Mobile (RIM) applications is unique in India and the
world. It enables the introduction of complex Internet applications on mobile phones quickly and
efficiently. R World receives over 1.5 billion hits per month from RIM users.
R World offers a wide range of applications including hour-to-hour news updates, high quality video
streaming, downloadable multilingual Ring Tones, seasonal updates including festival specials, city &
TV guides, exam results, astrology, mobile banking, credit card transaction from mobile phone, bill
payment and stock prices.
With over 100 data applications offering varied services, R World has become a treasure house of
Knowledge, Information, Entertainment and Commerce - unique to any wireless service in India.
Wireless POS for Credit Card transaction processing
Reliance deployed India's first Wireless Point of Sale (POS) Terminal for processing credit card
transactions in July 2003 in association with HDFC Bank - An important milestone in the history of
retail credit in India. Wireless POS will enable banks to expand the number of merchant outlets
accepting credit cards exponentially and speed up penetration of credit card services to smaller towns.
Since then numerous banks have used this unique application to expand their credit card business.
12
A POS terminal, the size of a large soapbox, is the equipment used by merchants to process credit card
payments at their sales outlets. Till now merchant establishments processed credit card payments by
swiping customers' credit card in a slot in the POS terminal, which is traditionally connected to a
bank's Network Access Controller (NAC) through a dedicated PSTN connection. The NAC then
directs the information contained on the credit card to the bank's data center, through its own network.
With the Wireless POS, a transaction will now be directly processed at the bank's data centre, by
skipping the PSTN connection and the NAC infrastructure
Wireless ATMs
The CDMA-based Wireless connectivity solution enables quick deployment of ATMs by banks, apart
from the advantage of rolling out a nationwide network of Wireless ATMs that are secure and cost
efficient. Unlike VSAT-based connectivity, which banks traditionally rely on, the CDMA solution
eliminates the need of rooftop rights and the resultant delays. Reliance Infocomm's CDMA-based
Wireless connectivity scores over other ATM connectivity options on counts like speed of
deployment, mobility and cost. Many banks including SBI, ICICI and HDFC banks are rolling out
hundreds of wireless ATMs using Reliance's wireless network.
Mobile Virtual Private Network (VPN)
Reliance's Wireless Data VPN offering looks at extending the Enterprise Users desktop to him while
he is on the move. Over our CDMA network, he will be able to access all those applications he uses in
office (including corporate E-mail, Intranet Portals, SAP, and other enterprise specific applications
available only within the corporate intranet) at speeds up to 144 Kbps, anywhere, any time. Reliance's
Mobile VPN, also for the first time, will allow enterprises the opportunity of connecting their remote
offices, scattered across the country, and integrating them into their networks, thereby truly ushering
organizations into the realm of being truly always "networked".
Vehicle Tracking System
Reliance has mapped the entire country and built a world class Geographical Information System
around it, enabling remote pin pointing of any location in the country to the accuracy of a few meters.
13
Among the many applications that leverage this state-of-the-art GIS system is Reliance Vehicle
Tracking System.
Reliance Vehicle Tracking System provides real time tracking and monitoring of road consignments
and vehicles across India from anywhere, anytime; consignment location display on GIS map with
assigned route data; routing and location finder capability; real time text messaging to remote vehicle
from application interface; automatic exception alerts via e-mail; SMS in case of geofence violation,
speed, delay etc.
R Connect
Reliance offers India's only nationwide wireless Internet connectivity through R Connect service by
leveraging its pan-India high speed CDMA2000 1x wireless network. R Connect is also India's fastest
growing Internet connectivity service with over 300,000 subscribers in less than seven months.
Subscribers can connect to Internet on the move at data speeds of up to 144 Kbps from their laptops or
other mobile computing devices with an R Connect Cable connected to their RIM phones or by using
an R Connect Card inserted into the PCMIA slot in their laptop. A customer can connect to Internet
using R Connect Cable plugged to Reliance India Phone Fixed Wireless Terminals and Phones.
2. Wire line:
The second phase of the digital revolution envisioned by Reliance begins with the roll
out of real broadband, capable of delivering 100 Mbps to Gigabit bandwidth across the country.
Through innovative use of bleeding-edge technologies in the fields of fiber optics, Ethernet,
Microwave radios, Switching, Routing, Digital Compression and Encoding, Reliance Infocomm is
setting a new benchmark for the world to follow. Mass roll out of Broadband that offers 100 Mbps
speed to millions of people across the vast geography of India is a major technological breakthrough.
What makes Reliance Infocomm's broadband initiative special is that the entire
nationwide network is architected and built up from scratch to bring about a digital revolution in India.
The network is designed to deliver affordable and quality education, governance and healthcare to
millions across India; improve the efficiency of businesses and generate millions of new jobs and put
India at the centre stage of the world. Broadband applications like E-Education have the potential to
14
revolutionaries Indian society. It can help transcend traditional barriers of development like lack of
capital, infrastructure and the challenge of distribution in a vast country like India.
Other business in this sector includes:
¾ E-Education
¾ Digital workplaces
¾ E-Healthcare
¾ Integrated Enterprise Solution
Rural Communication:
In one of the largest and fastest ever network rollout operations in the world, Reliance
Infocomm has embarked on an ambitious expansion plan to reach out to four lakh villages across the
country by end of 2005, thus bringing about a new revolution in rural telephony.
The company's 80,000 km of terabit optic fiber cable network forms the backbone of its
countrywide expansion, which will facilitate unlimited and uninterrupted voice, data and video
applications.
This massive operation, touching 65 crore Indians, will cover nearly two-third of its
villages and over 5,700 cities and towns. This expansion involving 8,500 BTS (Base Transceiver
Station) towers will also cover 91% of the country's national highways and 85% of the rail routes.
Eventually, the company's footprint will cover the entire habitat of the country. This initiative is
expected to increase India's teledensity to 10% by the end of the year, ahead of the national target.
Reliance already enjoys over one billion hits a month on its unique infotainment data
application suite called R World. This rollout will take the benefits of these services to many more
Indians.
With this expansion, rural India will also have greater access to the Internet, thanks to
the increasingly popular R-Connect and is bound to take India on its path towards knowledge-
led leadership. It is also an established fact that increases of each point in teledensity results in
a 3% growth in the country's GDP.
15
Reliance Infocomm has recently become the first Indian telecom service
provider to cross the 10-million subscriber mark. As on December 31, 2004, Reliance
Infocomm's subscriber base across its 20 circles stood at 10,298,208.
This initiative reinforces Reliance Group's commitment to the Founder Chairman's vision:
"Our dreams have to be bigger. Our ambitions higher. Our commitment deeper. And our
efforts greater.” This is my dream for Reliance and for India.
Other business in rural communication includes:
¾ Village public telephone

¾ Rural community phone (RCP)
¾ Rural household DELs
¾ High speed public tele-info center (HPTICs)
4. Netway:
Home Netway is a revolutionary concept hitherto inexperienced anywhere in the world
at the scale in which it is being rolled out in India. It heralds a breakthrough in the worldwide research
and development for providing television on telecommunication infrastructure. Home Netway is
currently under testing at various locations covering thousands of household.
Riding on bandwidth of 100 Mbps, Netway will bring a whole new convergent
experience of television, video, Internet and telephony. It will redefine home entertainment and will
bring distance learning, remote health care, e-governance, smart home controls, video-on-demand and
numerous other digital applications into millions of Indian homes.
Home Netway will deliver hundreds of television channels to millions of homes

through a multifunctional, digital set-top box designed and manufactured by Reliance. The state-of-
the-art set-top box, with 40 GB memory capable of storing nearly 10 hours of programming, will
enable users to experience functions such as "pausing live TV ", live and pre-programmed digital
recording and electronic programme guide. The Reliance patented remote control that comes along
with the set-top box is a design marvel with multiple functions - VoIP telephone handset, Karaoke
microphone and keypad for surfing the net or typing e-mail.
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Home Netway will also do away with the requirement of VCD/DVD players and the
need to visit lending libraries to borrow discs to watch favorite movies. Users will be able to select and
watch movies online from vast libraries of thousands of digital movies, songs and other contents from
their home. Not only that, Home Netway enables users to get subtitles for movies and transliteration
for songs in ten Indian languages. Other features include category-wise music selection, Karaoke, and
Antakshari.
Netway also ushers in convergence of television and Internet. Users will be able to surf
the web at super speed and compose e-mails on their television. Other features of Netway include
access to a wealth of information - from travel guides, quizzes, info on health and fitness to
documentaries on various topics. In fact Netway is a gateway to a new digital way of life for Indians.
5. Web world:
Reliance Web World is a countrywide network of retail outlets offering a host of state-of-the art
communication and information services along with food and beverages in a modern ambience. It
probably is also the world's largest network of public access broadband centers. A total of 240 Web
Worlds are operational in 111 cities and towns across India. The number of Web Worlds in this
network will further increase to cover nearly 700 towns and cities.
All Web World outlets have three components:
¾ Customer Convenience Centre

¾ Broadband Centre and
¾ Gourmet Café
Customer Convenience Centre is a one-stop sales and customer service point for Reliance Infocomm's
retail products and services
Broadband Centre brings real broadband experience to Indians for the first time through a host of
unique applications and services. This includes Video Chat, Multi-location Video Conference, Multi-
player Online Gaming, High Speed Internet, Virtual Office, Digital Storage, Digital Movie, Digital
Customized Music, Digital Electronic News Gathering Service and E-Learning. Javagreen, a Gourmet
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Café with exciting range of food and beverage products, is designed to provide you a relaxed and
refreshing atmosphere in Reliance Web Worlds.
6. Internet Data Center:
Reliance is India's largest Internet Data Centre (IDC) service provider, hosting
business critical applications of Indian and foreign blue chip companies, financial institutions and
other important organizations. A total of four world-class IDCs, occupying over 200,000 sq. ft. are
operational - two each in Mumbai and Bangalore - while another four more are slated to become
operational in 2005 in Delhi, Kolkata, Chennai and Hyderabad. The Data Centers are internationally
benchmarked on all parameters - physical and network security, infrastructure, facilities, network
connectivity and operations - and surpassing Level 3 world standards on most counts.
Reliance Internet Data Centers offer a range of standard and advanced managed
hosting services. The services range from offering bulk collocation space to fully managed hosting of
servers on rent/lease model. Further, a whole range of managed value added services are offered like
firewall, Intrusion detection, backup, streaming, mailing, system administration, data base
administration, load balancing, storage services and Disaster recovery/ BCP solutions.
Internet Data Centers are critical components of Reliance Infocomm's vision to

herald a digital revolution in India. The Data Centers are connected to Reliance's pan India, optic
fiber based, and high capacity IP network. The data centre is further connected to 52 countries
including US, UK, Mid-east and Asia-Pac through Flag Telecom (Reliance Infocomm’s group
company) backbone and other undersea cable systems. It also has private peering relationship with
the largest Tier 1 Internet Service Providers (ISPs) and public peering at more than 15 Internet
Exchange points across the globe, apart from peering relationship with domestic ISPs on STM-1
bandwidth
DHIRUBHAI’S DREAM
Late Dhirubhai Ambani built Reliance from scratch to be in the reckoning for a place in the Global
Fortune 500 list. This achievement is even more significant due to the fact, that the entire growth was
achieved in an organic manner and in a span of just 25 years.
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Dhirubhai was not just firmly rooted in traditional Indian values, but was also a quintessentially
modern man - the man of the new millennium. This was clearly reflected in his passion for mega-sized
projects, the most advanced technology and the highest level of productivity.
The corporate philosophy he followed was short simple and succinct - "Think big. Think differently.
Think fast. Think ahead. Aim for the best". He inspired the Reliance team to do better than the best -
not only in India but also in the world.
Dhirubhai Ambani, Founder Chairman of the Reliance Group, had an acute sense that education alone
empowers people. He was a great communicator. He communicated to inspire, to guide, to educate
and to motivate.
He employed telephone as a powerful tool to achieve these goals. He used telephone to defeat
distance, to compress time and to remain abreast of events. He was acutely aware of the power of
information and communications. He would often say: "make the tools of infocomm available to
people at an affordable cost, they will overcome the handicaps of illiteracy and lack of mobility".
He wanted a telephone call to be cheaper than a post card. This, he believed, would transform every
home, empower every Indian, remove the roadblocks to opportunity and demolish the barriers that
divide our society.
Dhirubhai Ambani was of the conviction that infocomm would energize enterprises, galvanize
governance, make livelihood an enjoyment, learning an experience, and living an excitement.
VISION
Reliance Infocomm is a fascinating outcome of this powerful conviction. It is a major initiative to

translate his inspiring dream into reality. "We will leverage our strengths in executing complex global-
scale projects to make leading edge information and communication services affordable by all
individual consumers and businesses in India. We will offer unparalleled value to create customer
delight and enhance business productivity. We will also generate value for our capabilities beyond
Indian borders while enabling millions of India's knowledge workers to deliver their services
globally".
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Reliance Infocomm envisions a digital revolution that will sweep the country and bring about a new
way of life,” A Digital Way of Life” for a new India.
With the mobile devices, networks and broadband systems linked to powerful digital networks,
Reliance Infocomm will usher fundamental changes in the social and economic landscape of India.
Reliance Infocomm will help men and women connect and communicate with each other. It will
enable citizens to reach out to their work place, home and interests, while on the move. It will enable
people to work, shop, educate and entertain themselves round the clock, both in the virtual world and
in the physical world. It will make available television programmes, movies, and internet and news
capsules on demand. It will unfurl new simulated virtual words with exhilarating experiences behind
the screens of computers and televisions.
Users of Reliance Infocomm’s full range of services would no longer need audiotapes and CD’s to
listen to music. Videotapes and DVD’s would not be necessary to see movies. Books and CD ROMs
would not be needed to get educated. Newspapers and magazines would not be required to keep
abreast of events. Vehicles and wallets will become unnecessary for shopping.
Reliance Infocomm will disseminate information at a low cost. “Make a telephone call cheaper than a
post card”. These prophetic words of Dhirubhai Ambani will be a metaphor of profound significance
for Reliance Infocomm.
Reliance Infocomm will regularly unfold new applications. Continually adapt new digital
technologies. Create new customer experiences. Constantly strive to be ahead of the world.
Reliance Infocomm will transform thousands of villages and hundreds of towns and cities across the
country. Above all, Reliance Infocomm will pave the way to make India global leader in the
knowledge age.
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FINANCIAL ANALYSIS
Reliance Industry Ltd (RIL), with gross turnover of Rs744bn (US$17bn) in FY04 is the largest private
sector undertaking in India. The company has presence in diverse businesses namely textiles,
petrochemicals, oil & gas, energy and telecom. It has forayed into oil and gas exploration and
marketing besides huge investments in power generation, transmission & distribution and telecom.
Corporate Structure Reliance Infocomm is owned by diversified conglomerate Reliance Group.

Reliance offers fixed local voice and internet access services, as well as national and international
connectivity services and managed networking services.
Recent Developments June 2004: Reliance announced that it would invest Rs 50bn in expanding its
backbone network in the financial year to March 2005.
RIC commercially launched its services in May 2003 under Reliance India Mobile. It has license to
offer telecom services in 20 circles under the Unified Access license. As of March 31, 2004 it had the
base of around 7 million subscribers. The company has presence in 1100 towns in India and is
expected to roll out its services in another 3800 towns. The company expects to maintain the growth
rate achieved in FY04, considering one of the lowest telecom penetrations at 7% as against world
average of 37%. The company expects mobile market in India to grow to 140 million subscribers by
FY08. The company is making major foray into broadband through which it is expected to provide
value-added services (virtual private network, videophone etc) to its subscribers. In January 2004 the
company acquired the undersea cable company FLAG telecom for US$211mn. This acquisition gave
strategic advantage to the company as FLAG Telecom connects 16 of the world’s top 20 business
centre and 75% of the world population through its 55,000km fiber optic network.
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Performance highlights of past five years
particulars FY00 FY01 FY02 FY03 FY04 CAGR

( Rs in mn )
Net sales 178499 254,293 42889 458978 518085 30.52
% yoy 42.46 65.51 9.05 12.86
Other income 6282 3830 6590 11775 13987 22.15
Operating profit 38185 46235 79993 81890 97232 26.32
%yoy 21.08 73.01 2.37 18.73
Interest 10458 12473 18.251 15552 14347
PBT 21235 21797 40170 49742 64401 31.97
PAT 24033 26456 32427 41043 51601 21.05
%yoy 10.08 22.57 26.57 25.72
Export 18110 93700 109688 108519 122879 61.39
EPS 22.4 25.1 23.4 29.25 36.8 7.04
DPS 4 4.25 4.75 5 5.25 8.225
Sales Growth Continues…
RIL’s net sales grew by 13% to Rs 518 bn during FY04 as Rs 459 bn in the FY03. The increase in top
line reflects the impact of 6% increase in product prices and 8% increase in the product sales volume.
In the last five years net sales grew at a CAGR of 31% from Rs178 bn in FY00 to Rs 518 bn in FY04.
Company’s export grew at a much faster rate than total sale at CAGR of 61% from Rs18 bn in FY00
to Rs123bn in FY04. Export contributed about 20% of the net sales in the FY04.
Segmental Performance:
Segment results Net sales growth (%) EBIT growth (%)
2003-04 2002-2003 % 2003-04 2002-2003 %

Petrochemicals 283847 273558 3.8 33684 29288 15
Refining 392589 321653 22.1 34997 23400 49.3
Others 25256 13546 88.4 5890 5983 -1.6
Petrochemical: Petrochemical sales increased by 4% to Rs283bn in FY04 as against Rs273bn in

FY03. The segments EBIT improved by 15% to Rs33.7bn in FY04 as compared to Rs29.3bn in FY03.
22
Refining: Refinery sales grew by 22% yoy in FY04, whereas EBIT registered a growth of 49% on the
back of strong operational performance and higher gross refinery margins (GRM). Refinery operated
at 109% of the rated capacity and processed 29.6mmt of oil.
Others: Other segment that includes Oil and Gas, textiles, Communication, and Power recorded a
staggering 88% growth in FY04 to Rs25.5bn. However it’s EBIT decreased marginally by 2% to
Rs5.8bn in FY04 due to losses made in the telecom business.
Improvement in Operating Margins…

OPM increased by 80bps in FY04 to 19% on account of less than proportionate increase in raw
material cost, better control over manufacturing expenses etc. On the other hand company increased its
selling and marketing expenses in an effort to boost sales.
Rising Profits…
RIL became the first private sector company to cross US$1bn mark in net profit. The company
clocked 25% increase in net profit at Rs51.6bn i.e. US$1.18bn in FY04 as against Rs41bn in FY03.
Though CAGR of PAT over the period of five year was marginally lower at 21%. The ROCE
increased from 18.7% in FY03 to 19.8% in FY04.
Better working capital management…

Tight inventory control, improvement in debtor collection period and cost cutting exercise resulted in
better working capital management. While debtor collection period has decreased from 23.8 days in
FY03 to 21.5 days in FY04, creditors payment period increased from 75.5 days in FY03 to 79.7 days
in FY04. In addition company has reduced its inventory holding period from 59.7 days in FY03 to 51
days in FY04.
Heavy Investments in Telecom…

The company invested Rs81bn in Reliance Infocomm Ltd more than the incremental growth of
Rs80.75bn under Investment head in FY04. The company subscribed to 10% Cumulative
Redeemable/Optionally Convertible Preference Share of Reliance Infocomm Ltd. The company also
made an equity investment of Rs22.5bn in Reliance Communication Infrastructure Ltd in FY03. All
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these investment commensurate with the RILs plan to augment leadership position in telecom
business. RIL has extended negative lien on 16, 06,50,000 share of Reliance Infocomm Ltd to banks
for extending loans to one of its associate where the company has invested Rs315mn. Maturity date of
6% Cumulative Redeemable Preference Shares of Reliance Enterprise Ltd, due for redemption on
October 1, 2003, has been extended by ten years where company had invested Rs860bn. 8%
Cumulative Redeemable Preference Share of Reliance Infocomm Ltd has been allotted pursuant to
the High Court order on demerger of the basic service division of Reliance Telecom Ltd.
Interest on Unsecured Optionally Convertible Debenture of Reliance Industrial Investment and
holdings Ltd, a subsidiary, has been changed from 6.5% to 0% with effect from April 1, 2003 where
RIL had invested Rs4.42bn.
Generating Cash…
The company generated huge operating cash flow of Rs117.77bn in FY04 as against Rs66.42bn of
cash generated in FY03. On top of it company paid just Rs3.05bn as tax and that too MAT u/s 115jb.
This reflects inherent strength of the company’s business model and its ability to internally finance
future growth opportunities.
Outlook
Petrochemical: The petrochemical cycle is on the upward move driven by demand from domestic and
export market viz. China and South East Asian countries. With the massive expansion plan (discussed
under heading, Business) in next 2-3years and economy growing at a brisk rate, the company that
controls over 60-65% of the domestic market is all set to gain from the prevailing environment.
Hardening of crude prices is less likely to affect the company’s bottom-line given its ability to pass on
any increase in input prices to the customers.
Exploration and Development: With two successful gas discoveries within a period of 2 years,
contract for supplying gas to NTPC for next 17 years (after a bidding process) and largest exploration
acreage among private companies, the business has potential for higher contribution to company’s
overall business profile.
Refining and Marketing: The Company has completed its de-bottlenecking process and operated at
109% of the capacity in FY04. With firm plans to open 2000 retail outlets in the current fiscal,
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company will reduce its dependence on oil PSUs for petroleum product off take and at the same time
will give worthy competition to mighty oil PSUs.
Telecom: The Company has made huge investment in its telecom business through its various
subsidiaries to the tune of RS81bn in the FY04 and will continue to invest heavily in near future. With
teledensity as low as 7% in India as against world average of 37%, company is well poised to augment
its leadership position in telecom business.
Power: The company’s presence in entire value-chain of power business (“from well head to wall
socket”) i.e. right from feedstock for power plant, to transmission & distribution of power directly to
consumer, placed company to take advantage of the opportunities offered by new Electricity Act 2003.
There are apprehensions with regards to continuation of reform process, as the new Government that
took reign at the centre. However, the shortage of power supply and need to power India’s economic
growth will compel the authority to think rationally and draft policies in the best interest of the
economy. Interest on Unsecured Optionally Convertible Debenture of Reliance Industrial Investment
and holdings Ltd, a subsidiary, has been changed from 6.5% to 0% with effect from April 1, 2003
where RIL had invested Rs4.42bn.
PCO market: key characteristics
• STD PCO booths, as a franchisee model, started in 1987.

• The number of PCO booths went up from 18 lakh in December 2003 to 23 lakh at
the end of 2004 with amazing reach of one PCO for every 2 sq.kms.
• BSNL and Mahanagar Telephone Nigam Ltd account for about 20-lakh booths.
• Generates direct employment to 1.3 to 1.5 million people.
• Total PCO revenues at Rs.41,000 crores, contributes to 9% of the total telecom
revenues and 24% of long distance revenues
• The break up of PCOs is:
Highway PCOs
1%
Local PCOs
39%
STD PCOs
60%
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• Installed PCO lines are more than 8 lacs and local lines are more than 10 lacs.
• The PCO’s has the national ARPU (Average Revenue Per Unit) of Rs. 4000.
• However, private operators such as Reliance Infocomm have about 1.3-lakh PCO booths and
are spreading its network into the rural segment as well.
Scope for PCO Market:
Tele-density of India is only 9%. Tele density is defined as number of people owning
a telephone or mobile per 100 people. So still 91% of people depend on PCO’s for their
communication needs. The Compound Annual Growth Rate (CAGR) of PCOs is 25%, i.e. if the total
number of PCOs were 100 in say 2004, it will grow to 125 in 2005 and to around 157 in 2006.
It’s true that now the usage of mobile phone has been increased to a large extent in India but according
to the survey there 90% of the people who still use PCOs for making calls. Most of the mobile phone
users have prepaid connection and therefore they use PCOs to make at least a STD/ISD call. In the 90s
BSNL were the market leaders in the market division making a huge profit. But now even the private
sector have entered this field giving more benefits to the customers than BSNL.TATA was introduced
first then followed by Reliance and Airtel.
Indian telecom industry and consumer spending:
According to a recent Gartner study, Indian ARPU may be the lowest in the world, but
Indians spend far more than others in the world on telecommunication services. Considering the
addressable market with income of Rs. 3500/ month spend 19-20% of their disposable income, one of
the highest in the world on telecom. While other countries spend 2-4% of their per capita for 600-700
min/month on their cell phones. The domestic telecom sector has attracted FDI worth Rs. 50.48 billion
in past 2 years.
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Emerging Scenario
In a 10-year perspective of India’s telecom sector, the tele-density will increase 5 folds
and the traffic volume will increase many times than that. The data services are still in the nascent
stage. The tremendous potential of IT sector in India and aspiration to become a world superpower in
IT will have a direct bearing on the future telecom growth in the country. These two sectors will grow
hand-in-hand in the era of convergence. BSNL, with its dominant market share, will have to compete
with the private players like airtel, tata, reliance etc. The technological developments are likely to
make the telecom services more and more affordable. Therefore, India is likely to emerge as a strong
force in telecom and IT areas.
INTRODUCTION RELIANCE PCO
Keeping this 90% of the people in mind Reliance wanted to tap these customers and hence came up
with Reliance PCO services. It offers a prepaid service unlike BSNL.It was launched successfully
throughout in India on March 17 2004. At present there are 8000 Reliance PCO connections in
Karnataka and by next year they want to be the market leaders. The PCO strategic business units at
Reliance Infocomm is enrolling PCO customers through its existing channel partners who are termed
as LBA’s ( Local Business Associates )in each city to provide complete service to the customers that
are assigned to their defined zone. There are nearly 11 LBAs throughout Bangalore. These LBAs are
assisted by CREs to render services to the customers which include installation, maintenance, and
service etc.In short LBAs is responsible for providing total support to the PCO customers to keep
operational. Since FWTs are on prepaid platform, the money is collected when the prepaid vouchers
are sold to the PCO operators and there is no bill, Instead there is a statement that shoes call details
and applicable charges for the past 15 days.
The functions of LBA are
• Obtaining the required FWT, PPA and other requirements from the Reliance Company.
• Obtaining certificate regarding quality of installation as per RIC guidelines from the respective
installers.
• Installing FWT, PPA at the PCO operator premises as per the installation procedure given by
company.
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• Receiving any service or billing complaints from the customers
• Call the customer care and log in the query and try to solve it as soon as possible.
• Performing the required repairs and to rectify the fault incidence.
• Escalating the problems to the Zonal lead.
• Maintaining the adequate level of spares inventory
• Getting the defective FWTs repaired through the authorized service centre of LG
• Distributing the prepaid recharge cards to the PCO operators as and when requested.
• Visiting the customers at least thrice in a month to check whether they are happy with the
service and maintain a good relationship with them
• Making customer aware about the working of the FWT,PPA,the battery backup, the
commissions, profit they are earning per call, company charges etc
• Explaining the customers about any new offers provided by the company.
• Trying to get information from the customers about other PCO operators who are not using
Reliance and convince them to take reliance connection.
• Provide the correct contact number and address to the customers of the respective LBA so that
they can inform any queries etc.
• LBAs should educate the customers not to take any sort of assistance like recharge vouchers or
service from anyone other than their respective LBAs.
Reliance Infocomm – PCO support
• Ensuring that correct installation kit and installation list are provided to each LBA
• 24 hrs access to the customer care with local access numbers for LBAs to call in for all queries
and complaints from the PCO customers.
• Fulfillment of customers requests for changes in personal profile such as name, address,
contact information etc
• Timely resolution of escalated repair and maintenance
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ORGANISATIONAL HIERARCHY
CEO
CIRCLE HEAD
SALES HEAD COMMERCIAL HEAD REVENUE HEAD
ZONAL HEAD ZONAL HEAD ZONAL HEAD
LBA LBA LBA
CRE CRE CRE
This Organizational structure is for PCO division in Reliance Infocomm where the CREs are headed
by the LBAs who in turn report to the Zonal Head of their particular region. The Zonal Leads come
under the Sales lead of the Marketing Department. This entire network is handled by the Circle head
and in turn who is under the CEO.
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PRODUCT
Reliance PCO basically works on wireless technology which consists of Fixed Wireless Terminal
(FWT) and a Patch Panel Antenna (PPA), which works on the prepaid platform with 8 hours battery
backup facility and initially support reverse polarity (battery reversal) with 16 kHz pulses. Initially
there was no deposit taken but now a deposit of Rs 1000 which is refundable is taken for both PCO
and coin box connection and the service is and connection is absolutely free, the customer have to pay
only for the recharge card.( all the instruments including FWT and PPA cost around RS 10,000)
FIXED WIRELESS TERMINAL
It is a wireless phone connection which has a inbuilt battery with the backup. Once recharged it can be
used up to 8 hrs.It should be mounted on the wall 4 feet from the ground and away from the
switchboard or any other electric wiring.
PATCH PANEL ANTENNA
PPA is an antenna that helps to catch signals enabling long distance calls. It should me mounted at
least two feet away from FWT and 6 feet from the ground.
FEATURES
• 2 RJ-11 ports for parallel connection

• Inbuilt battery backup
• Calling line Identification
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• Speed Dial – LG LST 250 has 30 memory locations to store frequently used numbers. Once
you store the speed dial numbers, you can make a call by pressing speed dial memory location
number.
• Set your STD/ISD locking code
• Bar STD/ISD.
• Call conference- this feature allows a conference between 3 parties.
• To initiate call conference:
• Call the first person
• Once the call is connected, put the call on hold by pressing hook flash
• Dial the second number. Once connected press 3 and hook-flash to initiate a call conference.
• Call waiting
• Inbuilt modem for high speed Internet access ( PC has to be within 3 meters of FWT)
• Prepaid Connection – the wireless Reliance connection is based on a prepaid platform where
the customer is required to make an initial investment on a recharge coupon of fixed
denomination and therefore get the commission at the time of recharge itself unlike the BSNL
or AIRTEL where the customers get the commission only after the bill is produced.
PREPAID RECHARGE CARD MANAGEMENT
Prepaid recharge card is a recharge coupon of fixed value denominations meant for local and long
distance calling for PCO as well as coin box connection. These recharge coupons are disposed
soon after its activation, but if there is any balance amount after the recharge it shall be credited
during the next recharge. The activation are done by the LBAs.There are two cards for PCO and
coin box connection each. (The amount of the card is got by reduction of the 40% commission and
10.2% sales tax.)
7500 PCO card – Here you get a talk time of Rs 7500 and the card is worth Rs 5850 and therefore
the customer gets a commission of Rs 1650 i.e. after removal of sales tax just while recharging
and need not wait for one month as in BSNL and its validity is for 90 days.
3000 PCO card- Here you get a talk time of Rs 3000 and the card is worth Rs 2340 and the
customer gets a commission of Rs 660.
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1000 Coin box card- Here the customer gets a talk time of Rs 1050 and the card is worth Rs 600
1500 Coin box card - Here the customer gets a talk time of Rs 1500 and the card is worth Rs 900
and hence the customer makes a profit equals to nearly 40% and the validity for these cards is 45
days.
ADVANTAGES OF WIRELESS RELIANCE PCO
1. Instant connection ready to use

2. No line dead problems, especially in rainy season since it operates on wireless technology.
3. Secure and tap proof that is conversations cannot be tapped, because it is wireless.
4. PCO machine/any normal phone instrument can be attached to the FWT.
5. 2 telephone instruments on the same FWT for use as one line with parallel connection can
be used.
6. It is prepaid connection and the currencies are made available at request without delay
7. 38% on PCO and 40% on coin box connection is given to the customer on investment.
8. Reliance often comes out with different offers every month to benefit its customers like
some extra talk time or surprise gifts etc.
Title of the project
Study of the PCO business and the promotion of coin box connection of Reliance in Bangalore
Statement of the problem
When Reliance introduced its new business of PCO in 2004 there were already companies like BSNL,
TATA, TOUCHTEL in the market with BSNL being the dominant one in the market. After one year
of introduction Reliance has now 27% share of market share after the success in mobile industry .The
number of telephone lines per hundred inhabitants (or teledensity) is expected to increase from 3.2
percent in end March 2001 to 5.5 percent by March 2005, and 9.5 percent by March 2010.
The study primarily concentrated in the area of the problems faced by the present customers and the
customers who have been already churned out of reliance. Reliance, with an objective of becoming the
market leader by 2006-07 in PCO business, this study will come up with few suggestions regarding the
32
problems identified, to achieve its objective and also create an awareness among the people make
people know about the recent technology, advantages, benefits of reliance when compared to the
competitors.
Objective of the Project
In spite of successful launch of Reliance PCO there were some customers who had negative attitude
towards Reliance connection and hence they were churning out and switching over to the competitors.
The main objective of this project was to know the reasons why the customers were unhappy with
Reliance, as a result this project ( market survey on the satisfaction level of Reliance customers ) were
undertaken and 10 summer trainees were hired from various MBA institutes for a period of 45 days.
Initially the project dealt with churned customers as mentioned earlier, trying to analyze the key
reasons for them to churn out and solve their problem and ultimately getting them back to Reliance.
Next we dealt with the existing customers and analyzing their satisfaction level and try to find out if
they are happy with the service and Reliance. The project also included launching of coin box
connection and therefore we also dealt with sales of coin box as well as Reliance PCO connection. The
summer trainees also took part in the promotional campaign of Reliance where we had to go the
customers and make them aware about Reliance connections, how advantageous it is and the profit
they could make out of it .The impact was basically to attract new customers.
PROCEEDINGS OF THE PROJECT
It was basically a Market Research project where survey (personal interview with the customers) was
undertaken and the research instrument used was questionnaire .The Primary data is collected through
the structured questionnaire by sampling the reliance PCO users in Bangalore city as the respondents
while the secondary data is collected from the newspapers, internet and magazines. Sample size was
30 for the churned customers and 120 for the existing customers.
STAGE 1
First two days we were given training regarding the company its diversification, the product (Reliance
PCO connection and coin box connection), its advantages, operations, the services provided by LBAs,
their responsibilities etc.Each one was allotted different areas of in and around Bangalore along with
33
different LBAs (i.e. LBA for that particular area).Each one of us were under different Zonal leads.
Initially we were given the database of churned customers of the particular area allotted to us. I was
allotted the Banashankari and nearby areas like Banshankari 1st,2nd,3rd
stages,Chamrajpet,Basavanagudi,Mysore Road, Gandhi Bazaar,KR Road etc and my LBA was known
as Shree Agency but it had withdrawn its services long back and the areas under it were untapped as a
result I was allotted another LBA called Sainath Marketing who was also very new my areas and
therefore my job was very tough and challenging since the LBA had no idea about the customers as
well as their addresses. Everyday in the morning we were supposed to report to our LBAs, and get to
the field. We were supposed to find the PCO customers addresses ourselves which was a tough job
since most of the addresses were fake. We were given an inspection kit which included a questionnaire
to fill in the feedback from the customers, sticker of the respective LBA, instruction sheet which
consists of customer care numer, LBA executive no. Our responsibilities
• to interact with the customers and take the feedback regarding Reliance line and service
offered to them by the LBA
• try to find out the reason for them to churn out
• to inspect the proper installation of FWT and PPA
• ,to know who was their LBA and the CRE visiting them,
• We were also given the task of persuading them to switch back to Reliance and try to convince
them that their problem will be solved at the earliest.
• We also dealt with making the customer aware of the coin box connection which was recently
launched and persuade them to take the connection, making them understand its advantages,
the better commission it gives than the competitors, tariffs, its operational procedure etc.
• When we found any major problem of the customers regarding service or line or customers
who are willing to come back to reliance and recharge as soon as possible or who are interested
in coin box connection , we were supposed to report to our Zonal Leads or LBAs immediately
so that they could follow up from there.
I was successful in persuading at least 15 of the churned customers to switch over back to Reliance
and give at least a lead of 40 coin box connections. When we found any major problem with the
customers or customers who are willing to come back to reliance and recharge as soon as possible or
34
who are interested in coin box connection , we were supposed to report to our Zonal Leads or LBAs
immediately so that they could follow up from there. This process was carried for 10-12 days.
STAGE 2
After dealing with churned customers we had to conduct a survey on customer satisfaction of the
existing customers of the same area allotted for the next 15-20 days .The procedure was the same as it
was for the churned customers where we were given a new database of the customers and had to go to
them and analyze how satisfied they were with Reliance, were they facing any problems related to
service or reliance etc,whether the LBA or CRE were visiting them regularly, how well they know to
handle the product. If they faced any major issues it was immediately escalated to our ZL.There were
many customers who were not happy with Reliance due to various reason and therefore wanted to
switch over to other connections, it was also our task to avoid this and convince them to stick to
Reliance.
STAGE 3
There was a four day promotional campaign of Reliance PCO where it basically highlighted on the
launch of coin box connection where all the ZLs, CRE, MRE, took part along with all the project
trainees. We all were divided into different area and nearly 15 people went as a team responsible for
one particular area in Bangalore with banners outside our cars and vans and there were three to four
bikes going together, we all wore a same Reliance T-shirt. We were supposed to go to each outlet
irrespective whether they have Reliance connection or not and distribute the pamphlet and explain
them about the scheme the various recharge vouchers, the most important was the coin box
connection, the commissions offered, its operation procedures, advantages over their competitors etc.If
the customer would take both the coin box as well PCO connection he would get a gold coin as a
surprise gift. The addresses of the interested customers were taken so that the company would follow
up as per the convenience of the customers. If the customers wanted immediate connection then we
were supposed to fill the CAF form and collect the DD and call to the customer care to give instant
connection. This road show was basically conducted to create an impact in the market and make
people aware about the Reliance PCO and coin box connection and attract new customers. We were
successful to take at least 25 leads per day individually.
35
STAGE 4
In the last 10 days of our project we dealt with hard core sales i.e. we were engaged in selling the coin
box and if possible PCO connection in the Bangalore outlets. This time we not confined to any area
.The sales procedure adopted was as follows
• Demonstration about the product

• Convince the customer about the product
• Fill in the CAF forms and collect the documents required for registrating the reliance line. The
documents include – the address proof of the PCO booth in the form of electricity or telephone
bill or any legal document; the ID proof of the customer whose name the reliance line is
registered
• Submit the CAF form to the ZL or LBA
• Follow up with the customer until the sale is complete i.e. the installation is done and the line
is activated.
SWOT ANALYSIS OF RELIANCE PCO BUSINESS
Strengths
• Highest commission structure (RIL-30%, MTNL 15-18%) among national long distance
operators.
• State of art fault resistant wireless technology.
• Hassles free installation.
• No security deposit as against
• Brand name of Reliance.
• Sales backed by extensive customer care and after-sales services.
• Prepaid PCO system, therefore, hassle free billing mechanism.
• Can penetrate into rural areas.
Weakness
• Hesitation among PCO owners in adopting relatively new technology in Landline segment.
36
• Resentment among business class due to billing problems with RIM.
• Problem of connectivity to some remote, rural areas of Bihar, Uttar Pradesh.
• Inability to effectively check fraudulent connections. Callousness on the part of LBA will
effect customer satisfaction.
• Ineffective orders follow up mechanism.
• More suitable for existing PCOs wishing to churn their line rather than new PCOs.
Opportunities
• Tele-density of India is only 7%. Still 93% of people depend on PCOs for their communication
needs.
• The compound annual growth rate of PCOs is 25%.
• Currently there are 16.55 lacks PCOs in India, waiting to be churned.
• Customer service standards of its main competitor MTNL / BSNL is not very satisfactory.
• Problems of billing in post-paid systems.
Threats
• Pitted against well-entrenched player like MTNL / BSNL controlling approximately 85% of
PCO market in metros, 90% of PCO market in urban, semi-urban areas and near monopoly in
rural areas.
• Entrance of new players like Bharti, and TATA
• Perceived saturation in PCO market.
• TRAI's impending regulations
PROBLEMS FACED DURING THE PROJECT
I was allotted the Banshankari and nearby areas, the of LBA of these places had withdrawn and the
new temporary LBA had no much idea about these places. Therefore there was lot of obstacles
• Addresses given were incomplete and therefore very difficult to search, could not get the
complete address since the LBA was new.
37
• Most of the shops were closed in spite of going three or four times in a day but later I came to
know from the nearby shops that the shop was closed since many months (the information not
known to us).
• Most of the addresses were fraud like there were many such cases where one person has 30 –
40 connections but when I visited such places the addresses did not exist
• Most of the addresses were like they were right but the name of the person would be wrong.
• Most of the customers were not ready to give any information as they were very furious with
Reliance because of their bad experience.
• Since we were not provided with any pamphlet or any document which stated the new offers
and the coin box connection it was very difficult to convince them.
PROBLEMS FACED BY THE CUSTOMERS
The customers of Banshankari and nearby areas are facing a lot of problems because of no permanent
LBA to solve their queries. Quite a few of them were happy with RIC but very unhappy with service,
some of the customers who had switched over to other connections were also ready to come back to
RIC if all their problems were solved .Some of the major and common problems faced by the
customers are
• Connecting to STD/ISD lines specially to Bihar, UP.

• Network problem specially in the evenings and Sundays (during the peak hours)
• Most of them don’t know who is their LBA and where to complain
• In many cases the Reliance PCO connection were given to coin box ( not by LBA) by some
other external agent which cause a lot of problem.
• External agents charged a heavy amount to for FWT and installations from customers illegally
when the Reliance do not charge anything
• The lines get disconnected automatically
• In spite of complaining to the office, customer care or to the LBA hardly any one of them
respond
• LBAs never visited the customers (only sometimes when called).
• Lack of responsibilities from LBA,Very bad service
38
• Problem with currency, amount sometimes get deducted without making any calls
• Voice problem, lot of disturbance
• Very poor branding, Inspite of customers demanding for Reliance board or lit they have not yet
been provided.
• Double dhamaka offer not yet been credited.
• Calling customer care is charged.
• Not aware of the recent offers from RIC
• Customers are not educated regarding the handling and battery backup of FWT and PPA
• Have no idea about recharging and from where to get recharge vouchers.
• Need fax machine
• Demand for separate booth and telephone set
• Not aware of tariff and commissions offered.
SCOPE OF PROJECT
The project was carried on with the intention of finding the satisfaction level of the existing
customers. Initially most of the customers were not satisfied with Reliance network and service, as
a result switched over to other connection. Our initial focus was to find out the reasons why the
customers churned out from Reliance. This has helped RIC to a large extent, they could find out
their strengths and weakness, where did they go wrong and hence correct themselves and not to
repeat the mistakes again. We could also get some of the churned customers back to Reliance .The
project also concentrated on the satisfaction level of existing customers where RIC can get an idea
about how satisfied the customers are, what are the problems they are still facing, are their
problems being responded, how good are the services provided by LBA, how much they are aware
of the commissions offered to them, the handling and maintainence,since most of the customers
are having other connections than Reliance ,more information was also found about the
competitors like BSNL,AIRTEL ( like in some areas why AIRTEL,BSNL,TATA had an edge over
Reliance).Most of the information collected and an thorough analysis provides better opportunities
to RIC to take corrective steps wherever there are major flaws and in future not to repeat them. The
project also focused on creating awareness and attracting new customers and educating them about
39
the new technology adopted by RIC, the additional profit the customers can make compared to the
competitors etc.
SOME OF STEPS TO BE TAKEN BY RELIANCE PCO TO OVERCOME THE FACING

OBSTACLES
• Initially the RIC would give commission to the LBAs on the basis of the number of installation
done by them as a result the LBAs were interested only in installing but not following up later,
but now RIC will give full commission to the LBAs only after the LBA has recharched a
particular customer at least for 3 months and if the customer is happy with the customer.
• They are also planning for a 24 hrs welcome call where it will be toll free where the customers
can enquire for any of the issues like recharging, network issues etc
• RIC has stopped sending the receipts or bills of calls made or currency charged because most
of the addresses were wrong, or most of them have shifted as a result it used to come back to
the office and in future if anyone were interested in having bills they have to send a written
statement to the office or LBA.
• Initially the customers were not asked any address proof before installing as a result there were
many hindrances but now before installing the customers should provide a address proof
documents and identity proof.
40
ANALYSIS ON CHURNED CUSTOMERS.
SAMPLE SIZE 30
Only PCO business 4

PCO + other business 26
Only PCO
business
13%
Only PCO business

PCO + other business
PCO +
other
business
87%
Out of 30 churned out customers there were 13% of the customers who survive with only PCO
business and rest 87% have other business like condiments, general stores including PCO business
BEHAVIOUR OF THE CHURNED CUSTOMERS
Came back to reliance 6

Switched to other competitor 24
After the survey was conducted i.e. 20% of the churned customers were convinced to come back to
reliance if their problems were solved but the rest 80% were stubborn and furious and have already
switched over to other competitors.
41
came
back to
reliance
20%
came back to reliance
sw itched to other
competitor
switched
to other
competitor
80%
COMPETITORS TO WHICH RELIANCE CUSTOMERS SWITCHED OVER
BSNL 10
AIRTEL 7
TATA 9
TATA BSNL
35% 38% BSNL
AIRTEL
TATA
AIRTEL
27%
The churned customers who switched over to other competitors were 27% of Airtel,35% of
TATA,38% of BSNL,therefore the major competitors for reliance are TATA and BSNL and in some
areas Airtel is also giving more competition.
42
Number of months with Reliance
Less than 3 months 15

3-6 months 5
More than 6 months 6
Less than 3 months

More than 6
months 3-6 months
23% More than 6 months
Less than 3
3-6 months months
19% 58%
From the churned customers about 58% of the customers were with reliance less than 3 months, 19%
between 3-6 months and 23% more than 6 months. Therefore reliance is not a new line for most of
them.
REASONS FOR CHURNING OUT
Network issues 6
Not happy with service from LBA 10
Don’t where to but RCV 1
Wrong decrement issues 0
Issue in making and receiving calls 2
Customer care issues 3
FWT not working 0
Coin box connection 8
43
Network issues
Not happy with

20%
27% service from LBA
Don’t where to but
RCV
Wrong decrement
issues
0% Issue in making
and receiving calls
10%
Customer care
7% 33% issues
FWT not working
0%
Coin box
3% connection
20% of the customers churned out because of they had problem with network issues like voice
clearance, most of them i.e. 33% were not happy with the LBA service ,27% suffered because the
PCO connection was given to coin box by some other agents ( not LBAs) and they paid a heavy
amount for it and not making enough profit,1% did not know where to buy the recharge card,10%
were furious because they did not get any response from reliance in spite of complaining regularly to
customer care,7% had problem in making calls to distant places. No one had a problem with FWT and
wrong decrement issues.
REGISTERED COMPLAINTS TO
LBA 5
Customer care & office 15
Don’t know 10
44
LBA
Don’t know 17%
LBA
33%
Customer care
& office
Don’t know
Customer care &
office
50%
50% of the customers registered complaints in customer care and office, 17% to the LBA and the rest
did not know where to complain.
AWARENESS OF LBA/CRE
YES 21
NO 9
NO
30%
YES
NO
YES
70%
70% of the customers knew who were their LBA and the rest 30% did not know who their LBA was
nor they had their contact address or number because once the CRE installed the connection never
turned up again, sometimes the customers said that every month some different people visit their outlet
so they exactly have no idea who was their LBA
45
FREQUENCY OF CRE VISITS IN A MONTH
ONCE 10
TWICE 0
NONE 11
ONCE
48%
NONE
52% ONCE
TWICE TWICE
0% NONE
48% of CREs visited the customers once in a month, none of them visited twice in a month, 52% of
the CREs never visited the customers once they installed the connection.
HOW DO YOU RATE SERVICE OF LBA
GOOD 1
AVERAGE 5
POOR 15
good
5% average
24%
poor GOOD
71% AVERAGE
POOR
46
Since the churned customers were not happy with reliance and service from LBA only 5% rated the
service from LBA as good, 24% as average and 71% poor, they also did not know from where to get
the RCVs whom to contact during problems and when contacted to the office there was no response.
Many people did not have much idea abut commissions and tariff rates and the amount of profit they
can make.
HOW WOULD YOU RATE SERVICE OF RELIANCE
good 2
Average 3
bad 25
good Average
7% 10%
good
Average
bad
bad
83%
Similarly with rating of the service of reliance 83% rated it bad because of their bad experience like
they had problem with network issues, commission etc, only 7% rated good and the rest as average.
ANALYSIS ON EXISTING CUSTOMERS
SAMPLE SIZE 120
Only PCO business 14

PCO + other business 106
47
Only PCO
business
12%
Only PCO
business
PCO + other
business
PCO +
other
business
88%
Out of the 120 existing customers on whom the survey was done 12% had only PCO business the rest
had other business along with PCO.
NUMBER OF PCO LINES WORKING
reliance 140
TATA 40
BSNL 92
Airtel 25
Airtel
8%
reliance
BSNL
46%
33%
reliance
TATA
TATA
13% BSNL
Airtel
Out of the 120 customers some of the customers had more than one reliance connection i.e. 46% had
only reliance, 33% had both reliance as well as BSNL, 13% had reliance and TATA, 8% has reliance
and Airtel.
48
ARPU/RELIANCE CONNCETION
>5000 22
5000-10000 75
10000< 23
10000< >5000
19% 18%
>5000
5000-10000
10000<
5000-
10000
63%
ARPU is the Average Revenue earned Per Unit, where 63% of the customers earned between 5000-
10000 per reliance connection in one month, 18% earned more than less than 5000 19% earned more
than 10000.
Number of months with Reliance
Less than 3 months 17

3-6 months 47
More than 6 months 56
49
Less than
3 months
14% Less than 3
More than months
6 months 3-6 months
47% 3-6
More than 6
months months
39%
14% of the existing customers were with reliance from less than 3 months, 39% were from 3-6 months
and 47% are the most satisfied customers who are with reliance more than 6 months, most of them
switched from BSNL, Touchtel or tata and the rest took a new connection for reliance.
How effective was double dhamaka or additional talk time offer
Extremely good 5
good 11
Not effective 3
Don’t know 101
4%
9%
3% Extremely good
good
Not effective
Don’t know
84%
Double dhamaka or additional talk time offers are the extra benefits given to the existing customers
where 84% did not know about such offers,3% of the customers found it was not effective,9% found it
good and 4% were extremely happy with it
50
WHERE DO YOU REGISTER COMPLAINTS
LBA 32
Customer care or office 16
No complaints 53
Don’t know 19
Don’t know
16% LBA LBA
27%
Customer care
or office
No complaints
Customer
Don’t know
care or
No
office
complaints
13%
44%
In case of any problems 13% of the customers complained to the customer care or reliance office, 27%
to LBA, 16% did not know where to complain and the rest had no complaints at all.
TIME TAKEN TO RESOLVE THE PROBLEM
Less than 4 hrs 6

More than 8hrs 24
More than a day 67
Not resolved yet 23
51
Not
resolved Less than
yet 4 hrs
5% More than
19%
8hrs
20%
Less than 4 hrs
More than More than 8hrs
a day
More than a day
56%
Not resolved yet
Only 5% of the customers were happy telling that their complaints were responded within 4hrs the
complaint was given, it took more than 8hrs to solve the problem of 20% of the customers.56% are
quite unhappy because they get response only after 2 or 3 days by which they will get a down in their
business, the rest 19% are very furious since their issues have not yet been resolved.
FREQUENCY OF CRE VISITS IN A MONTH
Once 27
Twice 17
Thrice 8
None 13
Only after making a call 55
23% of the customers tell that the CRE visit their outlet only once in a month,14% tells twice a
month,7% thrice a month ,11% tells no one visits them and the rest 45% of the customers complaint
that only once a call is made then only the CRE come to them.
52
Once
23%
Only after
making a call Tw ice
45% 14%
Once
None Thrice
7% Tw ice
11%
Thrice
None
Only after making a call
ARE YOU AWARE RELIANCE COIN BOX LINE
yes 19
no 101
yes
16%
yes
no
no
84%
16 of the customers were aware of the reliance coin box line but the majority of 84% of them had no
idea about it.
ARE YOU WILLING TO SUBSCRIBE FOR RELIANCE COIN BOX LINE
yes 62
no 58
53
no
48% yes
yes no
52%
52% of the customers were happy with the coin box connection offer and hence subscribed fot it and
asked them to contact within a week ,some of them wanted to switch from BSNL most of them were
ready to take a new line.48% of the customers already had coin box connections and were not
convinced to switch over to reliance.
WHETHER RELIANCE IS PLACED INSIDE THE BOOTH
yes 105
no 15
no
13%
yes
no
yes
87%
If the customers have more than one STD connections sometimes it so happens that not all the
connections shall be kept inside the booth but 87% of the customers have placed reliance
connection inside the booth, by this we can come to know that most of the customers are giving
reliance more importance because the people who come to make the call would like privacy and
would naturally go to the phone which is placed inside the booth.
54
WHETHER RIL IS PLACED IN PRIORITY POINT (BILLING)
Highest 98
Medium 20
Lowest 2
Medium Lowest
17% 2%
Highest
Medium
Lowest
Highest
81%
This is regarding the customers having more than one STD booth 81% of the customers have
placed the reliance connection under the vicinity of the customers where they can promptly spot it
and would rather prefer to make a call when compared to other connections.
CURRENTLY PROBLEMS FACING
Network 23
Commissions 11
No issues 15
Branding 32
No response 14
Services 25
55
21% 19%
Network
Commissions
No issues
9%
12% Branding
No response
13% Services
26%
Existing customers are still facing some problems where 19% are because of network issues like
making STD or ISD calls, no voice clarity, lot of disturbance etc,9% are because they have no idea
about how much commissions they are getting ,how are they getting it,13% are very happy with
reliance they have no problem at all,26% of customers are very furious because they are not provided
with any lit or board indicating it is a PCO from the company there is absolutely poor branding,12%
tell that in spite of complaining to office or LBA there is no action taken.21% are unhappy with
service provided from LBA
HOW DO YOU RATE SERVICE OF LBA
Good 30
Average 40
Poor 50
Good
25%
Poor
42% Good
Average
Poor
Average
33%
56
Only 25% of the customers are happy with LBA 33% have rated average and the rest 42% are
really unhappy with LBA.
HOW DO YOU RATE SERVICE OF RELIANCE
Good 55
Average 40
Poor 25
Poor
21%
Good
46% Good
Average
Poor
Average
33%
Coming to reliance connection 46% have no problem with reliance and only 21% are furious with
reliance.
BRANDING STATUS
flange 23
Sticker 14
Lit 6
None 77
57
flange flange
19% Sticker
Lit
None
Sticker
12%
None Lit
64% 5%
Branding status is actually very poor when compared to the competitors, only 5% of the customers
are provided with the lit ( only provided to high ARPU customers ),12% are provided with only
stickers which is hardly visible,19% are provided with flanges which is not visible during the night
and the rest 64% are not provided with anything.
OBSERVATIONS
Based on the survey done by the churned and existing customers there were some observations
made
• Reliance PCO business is emerging in the market and growing at a greater pace with almost 2nd
in the market after BSNL in just one year beating the competitors like AIRTEL,TATA etc.
• Since the PCO business was outsourced to LBAs there was a lot of problem with the service
provided by them to the customers, according to the survey made 42% of existing and 71% of
churned customers rated service of LBA as poor.
• There was lack of CREs in most of the LBA point as a result they could not visit the customers
in time and regularly. Most of the outlets were in remote places where the CREs would hardly
visit.
• Most of the customers did not know who their LBA was they did not even know where to
complain in case of some problems or where to buy recharge coupons as a result they used to
face down in their business.
• Some of the customers did not know about the working of the connection, the commissions
they would be getting, the benefits etc since the CREs hardly took any initiatives to inform the
customers regarding this information.
58
• Since the LBA were getting their commissions based on the number of installation they made
the CREs were only interested in installing the connection than the service which has to be
provided to the customers after connection. As a result in some cases the PCO connection was
given to the coin box (to the customers who did not have STD PCO connection) by some
dealers incurring loss to the customers, the customers were also heavily charged by these
dealers when the company is rendering the service for free.
• Most of the problems were not attended in spite if complaining frequently even to the company
or customer care because of lack of manpower and training given to them and also the places
were remote and therefore the CRE has to spend from his pocket for the traveling expenses(
they are given only Rs 50 as their traveling expenses )
• During the promotional campaign we found out that most of the people did not know much
about reliance PCO connection.
• There were some repeated problems faced because of network, voice clarity, issue in making
calls as a result the reliance connection was removed from the booth and replaced by the
competitor or kept in a lower visible point .
• The most important issue was locating the address since initially the connection was given
without taking any address proof so most of the customers gave fraud or incomplete address
which was a problem for us to find as well as for the CREs.
• Most of the customers were very furious because of the poor branding the customers were
hardly given any lit or board so that the people can notice that there is a booth.
• Some of the customers were happy with coin box connection scheme and nearly 52% of the
customers were willing to subscribe it.
• There were some demands from the customers like to provide fax, billing machine, booth or
telephone set along with the connection. They also demanded for a bill or receipt of the
recharge currency being used or the currency remained in that particular card for at least every
fortnight so that they can keep a track.
59
RECOMMENDATIONS
• Since reliance is the wireless technology it can be easily used in the remotest places also where
even BSNL or Airtlel cannot penetrate, there is a very high potential specially in the remote
areas as a result more LBA points to be started in different areas with more manpower ie the
CREs so that they can visit all the places in time and not to give any chance for the customer to
complain.
• Better service has to be provided and better training to the CREs to tackle the problems easily,
the customers should also be made aware of the benefits and working etc.
• The CREs should be provided with a vehicle so that they can meet the targets faster and reach
out to the customers instantly.
• The commission to the LBA should be given only after a proper follow with the customers.
• The installation should be done according to the instructions
• The customer should be provided with a instruction manual regarding the handling of FWT
and the PPA,the customer care numbers ,the contact details of the respective LBAs
• The customer should be made aware of tariff rates and commission structure.
• The CREs should maintain a record of all the databases the installations and the sales done on
regular basis.
• The reliance CREs should be trained about the products they are using so that they can give
good product demonstration for the better usage of the product by the customer. This can also
help the customers for not using the STD lines for the coin box.
• The company should take proper care to take the right address from the customers with address
proof so that CREs won’t take much time locating them and FWTs won’t be lost.
• The company can also provide low denomination currency recharge for the low business area
operators and also benefit more customers by providing some extra talktime,free gifts etc, they
can also come out with payments of recharge cards done through installments for low ARPU
customers.
• The customer care number should be made toll free for the customers.
• The RIL can come up by providing the hand set, fax and billing machine, booth along with the
connection.
60
• The follow up should be made immediately by the LBA so that there wont be down in the
business of the PCO operators.
• There is lot to be done in branding, each customer should be provided with a lit or alteast a
normal board of reliance PCO outside the outlet so that people can locate it.
• The CREs can also do something for creating awareness about the Reliance PCO in the market
by visiting some shops and organizing more of road shows.
• The LBA should keep a track of each CRE responsible for particular connection so that if any
problem exists he can be catch hold of.
• The ZLs or LBAs should visit customers once in a while to maintain a better relationship.
• If any changes to be made the customers should be made aware of immediately.
• RIL should provide a receipt or bill indicating the number of calls made the currency being
used, the remaining balance at least once in a month.
CONCLUSION
Telecom sector is in boom as usual since communication plays an important role in any business. With
rapid advancement and improvisation of the technology telecom services are modernized and made its
best to use. The government owned BSNL and the MTNL initiated the telecom services in India with
only a simple telephone but later pagers, cellphones were introduced and used by people to
communicate. They were private players like Airtel, Hutch, Tata Indicom; Reliance Infocomm who
entered into the telecom sector providing better service than public sectors.PCO business is not yet
saturated at least in a developing country like India where 90% of the people don’t use mobile phones.
BSNL and the MTNL are responsible for starting this PCO business and also at present are the market
leaders but now even the private players like Airtel,Tata,Reliance provide this service with better
commission than BSNL as a result it is losing its market share to its competitors. With just one year of
introduction Reliance is already standing next to BSNL in PCO business.Reliance being the richest
company in the country, with good financial backup can provide all the services at its best for the
customers by overcoming the problems faced by the company presently. The objective of being the
market leader by the year 2006-07 can be achieved by solving the problems mentioned and giving the
best service to the operators.
61
EXHIBIT 1
QUESTIONNAIRE 1
Churned Customers
Name of the PCO operator: MDN No.

Address: Other business:
Alternate contact number: Total No. of RIL
Line:
PPA Installed Yes No
1. Total number of PCO line working STD/ISD CCB
Reliance
BSNL
Airtel
TATA
2. How many months were you with Reliance?
Less than 3 months
3 – 6 months
More than 6 months
Please specify
3. What was the reason of churning? (discontinued using RIL PCO)
Network issue
Not happy with service from LBA
Don’t know where to buy RCV
Wrong decrement issue
Issue in making and receiving calls
Customer care issue
FWT was not working
62
Other reason
4. Where were you registering your complaints in case of any problem?
LBA
Others
5. Within how many hours of complaining your problem gets resolved?
Less than 4 hours
Less than 8 hours
More than a day
Specify
6. Can you please name your LBA or his person who was visiting you?
LBA………………………………………… Phone number………………..
CRE…………………………………………..Phone number………………..
7. How often did the CRE use to meet you in a month?
Once
Twice
Thrice
None
8. How was the Double Dhamaka Scheme & Additional Talk time offer?
Extremely Good
Good
Not Effective
Don’t know
9. Are you aware of Reliance Coin Box Line?
Yes
No
10. Are you willing to subscribe for Reliance coin box line?
Yes
No
No. of lines required
When to contact
63
11. Total number of billing machines………… & number of booths………. in the outlet.
12. Whether RIL line was placed in priority point ?(Billing & visibility wise)
Highest billing
Medium billing
Lowest billing
13. How do you rate the service of LBA Reliance

Good
Average
Poor
Specify if poor
14. Would you like to come back to Reliance if all issues are sorted out?
Yes
No
15. Are you willing to recharge now?
Less than two days
Less than 5 days
Specific date
16. If not willing to recharge, why?
No proper service from LBA
Low business
Line connected to coin box
Already churned line to competition (BSNL, Airtel, TATA )
Unhappy with Reliance
17. Will you recommend Reliance PCO line to anyone?
Reference Name: ………………………………………………………..
Phone Number: ………………………………………………………...
64
18. Branding Status Reliance Others
Circular Lit
Unit Flange
Normal Flange
Stickers
STD code poster
None
Do you have any suggestion to improve our service much better?
65
EXHIBIT 2
QUESTIONNAIRE 2
EXISTING CUSTOMER – An over view of RIL PCO Customers
Name of the PCO operator: MDN No.
Address:
Alternate contact number: Total No. of RIL
Other business: Line:
PPA Installed Yes No
1. Total number of PCO line working STD/ISD CCB
Reliance
BSNL
Airtel
TATA
2. How many months are you with Reliance?
Less than 3 months
3 – 6 months
More than 6 months
Please specify
3. How effective was the introduction of Reliance by the representative?
Excellent
Very good
Good
Poor
4. How effective was the product presentation and demonstration?
Excellent
Very good
Good
Poor
5. How was the Double Dhamaka & Additional Talk Time promotion offer?
66
Extremely good
Good
Not effective
Don’t know
6. How many days of applying did you get the phone?
Within 2 days
Within 4 days
Within 7 days
More than a day
7. Where do you register your complaints in case of any problem?
LBA
Circle
Others
8. How much time did it take to resolve the problem after registering it?
Less than 4 hours
More than 8 hours
More than a day
9. How often did the CRE meet you in a month?
Once
Twice
Thrice
None
10. Can you name LBA or his person who visits your outlet regularly?
LBA-------------------------------------------- Phone Number ……………………
CRE --------------------------------------------- Phone Number……………………
11. Are you aware that Reliance has launched coin box line?
Yes
No
12. Are you willing to subscribe for RIL coin box line?
Yes
67
No
13. Total number of billing machines………… & number of booths………. in the outlet.
14. Whether RIL line is installed in booth Yes No

15. Placement of RIL line billing & visibility wise -
Highest billing
Medium billing
Lowest billing
16. Is there any issue currently you are facing unresolved for long time?
Network related……………………………………………………………………
Commissions………………………………………………………………………
Tariff related………………………………………………………………………
FWT problem……………………………………………………………………..
Others……………………………………………………………………………...
17. How do you rate the services of - LBA Reliance
Good
Average
Poor
18. Will you recommend RIL PCO to any one?
Reference Name …………………………………………………………………..
Phone number …………………………………………………………………….
19. Branding Status - Reliance Others
Circular Lit
Unit Flange
Normal Flange
Stickers
STD code poster
None
Do you have any suggestion to improve our service much better?
68
EXHIBIT 3
COMPARATIVE ANALYSIS OF THE COMPETITORS
COMP NAME NO OF LINES COMMISSION ( % )

BSNL 19000 25
RELIANCE 8000 40
TATA 2000 30
AIRTEL 4000 25
airtel
tata 12%
6%
reliance bsnl bsnl

24% 58% reliance
tata
airtel
From the above figure we can see that 58% of the PCO customers use BSNL the second being
reliance with 24% the rest followed by Airtel with 12% and Tata with 6%.
Since the PCO business was initially started by BSNL at present they are the market leaders with
nearly 19000 lines in Bangalore but slowly they are being swapped by private players like
Reliance topping the list with 8000 lines followed by TATA and AIRTEL. In some places BSNL
has an edge because most of the illiterate customers in remote areas they are not ready to except
the new technology or because of bad experience with reliance with mobile they were not ready to
take chance with PCO connection or sometimes the customers are very brand loyal towards
69
BSNL.Airtel is postpaid connection where the customers gets commission after the bills produced
after 15 days but their plus point is their service where the problems are solved within 4hrs of the
complain, whereas TATA being similar to reliance with prepaid connection they have an edge
since they provide a booth along with telephone handset along with connection, they have a good
branding status also compared to reliance. Reliance do not take deposit or service charges only
charge for the recharge card, the customers get commission instantly before currency gets
exhausted and also since it is wireless there would not be any problem during rain etc
70
EXHIBIT 4
INCOME STATEMENT
Period to FY 02 FY 03 FY 04
( Rs mn) (12) (12) (12)
Net Sales 420889 458978 518015
Operating expenses (340897) (377088) (420784)
Operating profit 79993 81890 97232
Other income 6590 11755 13987
PBDIT 86582 93665 111219
Interest (18251) (15552) (14347)
Depreciation (28161) (28371) (32470)
PBT 40170 49742 64401
Tax (11860) (8699) (11410)
PAT 28310 41043 52991
Extraordinary/prior period items 4117 0 (1390)
Adjusted profit after tax 32427 41043 51601
BALANCE SHEET
Rs in mn FY 02 FY 03 FY 04
(12) (12) (12)
Sources of funds
Share capital 10536 13979 13960
Reserves 268216 289785 330565
Net worth 278753 303744 344525
Loan funds 189295 197583 209477
Def tax ( liability) 20608 26848 34478
Total 488646 528175 588719
Uses of funds
Gross block 467273 505530 535029
Accd depreciation (150769) (184612) (217137)
Net block 316504 320918 317812
Capital WIP 15333 19944 33562
Total fixed assets 331837 340863 351460
Investments 38502 67277 139714
Total current assets 194507 223571 220401
Total current liabilities (76828) (103957) (122855)
Net working capital 117678 119614 97546
71
Miscellaneous exp 629 472 0
Total 488646 528175 588719
KEY RATIOS
FY O2 FY 03 FY O4
(12) (12) (12)
Per share ratios
(EPS ) Rs 30.8 29.4 37
Div per share 6.3 5 5.3
Book value per share 264.6 217.6 246.8
Profitability ratios
OPM (%) 20.6 20.4 21.5
PAT % 7.7 8.9 10
ROCE 18.5 18.7 20.1
Liquidity ratio
Current ratio 2.5 2.2 1.8
Debtor days 23.6 23.8 21.5
Inventory days 43.1 59.7 51
Creditor days 52.2 71.6 76.4
Leverage ratios
Debt/total equity 0.68 0.65 0.61
Payout ratios
Dividend payout ratio 20.5 19.2 16
Dividend ( Rs in mn) 6633 6982 7331
No of equity shares (mn) 1053.6 1395.9 1396
Market capitalization 520564 689724 689739
72
BIBLIOGRAPHY
http://www.indiainfoline.com/nevi/terv.pdf
www.ril.com
www.relianceinfo.com
www.bsnl.com
www.trai.com
The Economics Times
The Times of India
India 2005
Business Line
73

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PROJECT REPORT

“Study of Reliance PCO market and sales”

Reliance Infocomm Limited

INDIAN BUSINESS ACADEMY

Submitted in Partial Fulfillment of the requirement for the

Post Graduate Diploma in Business Management

INDIAN BUSINESS ACADEMY

Regd No: FP46/116

Under the guidance of

Mr. Manish Jain Mr. J K Naidu

INDIAN BUSINESS ACADEMY

Prof Ramesh Thagat

INDIAN BUSINESS ACADEMY

Mr. Manish Jain

INDIAN BUSINESS ACADEMY

This is to certify that Ms Niveditha Ramanand has conducted the project

Mr. Manish Jain

INDIAN BUSINESS ACADEMY

I, Ms Niveditha Ramanand, a student of Indian Business Academy,

INDIAN BUSINESS ACADEMY

An undertaking of this type is a result of contribution received from a number of people.

PCO market and sales”

I express my sincere gratitude to Mr. Manish Jain, my mentor / internal guide, Mr

INDIAN BUSINESS ACADEMY

WORD COUNT: 472

TITLE PAGE NOs

Three bodies manage India's telecommunications regulatory system:

1. The Telecom Commission (TC)

Telecommunication best prospects (including upcoming major procurements)

Postpaid Prepaid Corporate PCO

Reliance India Mobile

Wireless POS for Credit Card transaction processing

Mobile Virtual Private Network (VPN)

Vehicle Tracking System

Other business in this sector includes:

Other business in rural communication includes:

¾ Village public telephone

Home Netway will deliver hundreds of television channels to millions of homes

All Web World outlets have three components:

¾ Customer Convenience Centre

6. Internet Data Center:

Internet Data Centers are critical components of Reliance Infocomm's vision to

Reliance Infocomm is a fascinating outcome of this powerful conviction. It is a major initiative to

Corporate Structure Reliance Infocomm is owned by diversified conglomerate Reliance Group.

particulars FY00 FY01 FY02 FY03 FY04 CAGR

Sales Growth Continues…

Segment results Net sales growth (%) EBIT growth (%)

2003-04 2002-2003 % 2003-04 2002-2003 %

Petrochemical: Petrochemical sales increased by 4% to Rs283bn in FY04 as against Rs273bn in

Improvement in Operating Margins…

Better working capital management…

Heavy Investments in Telecom…

PCO market: key characteristics

• STD PCO booths, as a franchisee model, started in 1987.

Scope for PCO Market:

Indian telecom industry and consumer spending:

INTRODUCTION RELIANCE PCO

The functions of LBA are

Reliance Infocomm – PCO support

SALES HEAD COMMERCIAL HEAD REVENUE HEAD

ZONAL HEAD ZONAL HEAD ZONAL HEAD

LBA LBA LBA