Pricing Strategy Adopted in 3G

Technology Within Telecom

Sector
By: ISHITA SHAH
PGDM 2011-13
Summer Intern, IDEA CELLULAR LIMITED
Enrollment no:030301046

Contents

Overview of Company.
Competition.
SWOT Analysis.
Objective of SIP.
Target.
Working Strategy.
Achievement.
Learning and Experience.

The Company: Introduction

The company was incorporated as Birla
Communications Limited on March 14, 1995 and
commenced business on August 11, 1995.
Registered office was in Mumbai, Maharashtra.
The company name was changed to Birla AT&T
Communications Limited on May 30, 1996 following
the execution of a joint venture agreement dated
December 5, 1995 between AT&T Corporation and
Grasim Industries Limited.
Changed name to Idea Cellular Limited and launched
"Idea" brand name in 2002.
It provides wireless and long distance voice and
internet services to consumer and enterprise markets
Idea became a pan-India operator in 2009

 The market positioning of Idea reflects the strength

of its brand considering the fact that Idea added 11
out of its total 22 service areas in the past four years.
Today, it is a pan-India player with commercial 2G
operations in 22 service areas, and 3G in nine of
these circles.
Its subscriber base has grown multifold, from 7.37
million in March 2006 to 89.5 million in March 2011.
Idea holds 16 per cent stake in Indus Towers, a joint
venture with other telecom majors Bharti Airtel and
Vodafone.
Indus Towers is the world's largest tower company
with over one lakh towers.

Vision: To be the most customer-focused mobile

service brand, continuously innovating to help
liberate our customers from the shackles of time
& space.

Mission : We will delight our customers while

meeting their individual communication needs
time anywhere. We survive because of our
customers.

Founding Fathers
Seamlessn
ess

Integrit
y

Speed

Passio
n

Mr. G. D. Birla and Mr. Aditya

Birla

Commitme
nt

OVERVIEW OF 2G AND 3G
2G NETWORK:
Evolved from 1G
First system that used
digital signals

Improve speech quality,

coverage and security.
It introduced data
services for
mobile,starting wth SMS
text messages

 TECHNOLOGY USED IN 2G

Divided into TDMA and CDMA

based standards depending upon
multiplexing used.
TDMA Standards:
(a) GSM (Global System Mobile)
(b) Interim Standard 136(IS-136)
(c) Pacific Digital Cellular(PDC)

3g network

3rd generation mobile

communication.
It offers high speed data rate.
Offers wide range of services.
Increased bandwidth.

Road to 3g

where lies the

difference???
2G use different switching techniques for voice and data,
where 3G uses single switching for any kind of data.
2G is circuit-switched, but 3G is packet-switched.
GSM uses TDMA technology with narrowband 200Khz, 3G
(WCDMA) use CDMA technology with broadband 5Mhz.
2G has low data rate, voice oriented services.

3G has higher data rate and data oriented services

3G enables Multiplexing of services with different quality
requirements on a single connection, e.g. speech, video
and packet data.

GSM EVOLUTION FOR DATA ACCESS

Gsm,9.7k
bps,1997

Gprs
115kbp
s
2000

Edge
384kbp
s
2003

Umts
2mbp
s
2003
+

Wireless Access Evolution

Subscribers
Broadband
Broadband
New Services
Efficiency

Network
Simplification
Cost of
Ownership

Voice Quality
Portability
Coverage

Capacity

Mobility
Voice

1G

2G

Broadband

3G

4G

3G

Entry into
3G

Idea's 3G services start from chattisgarh, Gujarat and Hp & MP

It Plans progressive pan-India rollout of 'Gold Standard' 3G
services to ensure unmatched customer experience in 200
towns by April '11 and 4,000 towns by 2012.
To enjoy Video Conferencing, Video on Demand, Mobile TV and
high-speed Internet, Introduces Time based Billing plan for 3G
services

Idea has traditionally focused on growth from semi-urban

heartlands of India and will continue to drive its 3G services from
these industrial, agricultural and educational region.

Product Offerings

The Customer:
TIER 1- Metropolitan Circle
Customer
Segmentation

Description

Products

pre-paid and post-paid mobile services

Services

GPRS, voice and SMS based entertainment services,

call-forwarding, call conferencing, regional, on-net,
national and international roaming, GSM gateways,
vehicle tracking; and Automatic Meter Reading

Channels

Direct Outlets

Unique Competencies

6 SIGMA, Net Setter Data Cards & Blackberry Solution,

largest customer base,, market leader in the
Maharashtra, Strong distribution channels

TIER 2- Urban Circle

Customer Segmentation

Description

Products

pre-paid and post-paid mobile services

Services

GPRS enabled information services like

internet browsing, data cards and
mobile email, call-forwarding, Ring
Back Tones, background Music, voice
and SMS chat, ringtones, horoscopes,
expert advise and subscription
services;

Channels

Both Direct & Indirect

Unique Competencies

6 SIGMA, High quality network

structure, Centralization of several
applications.

TIER 3 Rural Circle

Customer Segmentation

Description

Products

pre-paid and post-paid mobile

services
Krishi Voucher,, Providing health
care services

Services

Channels

Indirect

Unique Competencies

usage of solar power for Base

Transceiver Station (BTS),
frequency optimization techniques

Competition

MARKET SHARE
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%

INDIA
Column1

Price of net setter

1800
1600
1400
1200

IDEA
MTS
VODAFONE
AIRTEL
RELIANCE
TATA PHOTON

1000
800
600
400
200
0

PREPAID

POSTPAID

Network of 3G in Gujarat

IDEA
TATA PHOTON
VODAFONE
MTS
RELIANCE
AIRTEL
AIRTEL
RELIANCE
VODAFONE

250
200
150
100
50
0
cities and towns

MTS
TATA PHOTON
IDEA

Strength

Opportunities

Project Title
Pricing Strategy Adopted in 3G
Technology Within Telecom Sector

PRICING
Pricing strategy has been always
more of the poker game than a
science.
Successful pricing is an art, not a
science.

Pricing Strategies

Penetration Pricing

Market Skimming

Influence of Elasticity

Influence of Elasticity
Price Inelastic:
% change in Q < % change in P
e.g. a 5% increase in price would be met by a fall in
sales of something less than 5%
Revenue would rise
A 7% reduction in price would lead to a rise in sales of
something less than 7%
Revenue would fall
Price Elastic:
% change in quantity demanded > % change in price
e.g. A 4% rise in price would lead to sales falling by
something more than 4%
Revenue would fall
A 9% fall in price would lead to a rise in sales of
something more than 9%
Revenue would rise

POSTPAID:

MTS

RELIANC
E

TATA

IDEA

VODAFO
NE

AIRTEL

UNLIMITED

ADVANCE
RENTAL

USUAGE
BASE
PLAN

REGULAR

USUAGE
BASE
PLAN

MONTHLY
PLAN

REGULAR

MY BEST
PLAN

TIME
BASE
PLAN

UNLIMITE
D

ADVANCE

SILVERPL
AN

CASH
BACK
OFFER

ADVANCE
RENTAL

DAY-NIGHT
PLANS

GOLDEN
PLAN

DEVICE
FREE
OFFER

PLATINUM
PLAN

PREPAID:

MTS

RELIANC
E

TATA

IDEA

VODAFO
NE

AIRTEL

UNLIMITE
D

MB PACKS

MONTHLY

REGULAR
PLANS

USUSAGE
BASE

MONTHLY

MONTHLY

UNLIMITE
D

LONG
VALIDITY

LONG
VALIDITY

WEEKAND
PLANS

POSTPAID TARIFF:

IDEA

TATA

MTS

RELIANC
E

1GB

RS 200

549

2GB

RS 349

649

3GB

599

699

5GB

850 RS

750 RS

10GB

1250

1100

950 RS

15GB

1400

AIRTEL
450

670

1200 RS

750 RS

PREPAID TARIFF

MTS
1GB

RELIANC
E

647 RS

2GB

IDEA

AIRTEL

345 RS

450 RS

VODAFO
NE

595 RS

5GB

798 RS

800 RS

745 RS

10GB

999 RS

1000 RS

1245 RS

15GB

1298 RS

1300 RS

750 RS

801 RS
1051 RS

To make a understanding about

theCompany
IDEACELLULAR LTD.
To make a understanding about theservices
which theyprovide
To know about thecustomer base ofthe
IDEACELLULAR.

Targets
First week of our sip we were not given any such
target, just we were told to sell the maximum dongles
and prepare a competitive report on six major
operators of telecom industry namely; AIRTEL, MTS,
TATA, RELIANCE, VODAFONE.
Third week we were given target of logging the five
dongles.
We were also given 103 accounts individually of
corporate to be mapped.
Sixth week we were given a target to logged 4
dongles in ten days and one idea smart phone.
We were also given a trainee to whom we have to
trained and also recruit one trainee from our source.

Strategy Employed
Corpora
te
calling
Referenc
es

Personal
network

Achievements
Was the first to achieve the highest loggings
in the first week of sip and was awarded for
the same.
Finished the target of logging the five dongles
in the second month.
Had made more than 50 calls in the corporate
Mapped around 30 companies with all
information from turnover to no.of sim cards to
data cards to number of employees etc.

Learning

Basic Definition of sales

How to take decision
Team building, I to WE
Documentation, difference between
the company account and the
individual account.
Hard core sales
Network building