INSTITUTE OF PROFESSIONAL EDUCATION & RESEARCH, BHOPAL

SUMMER PROJECT REPORT
ON RTB
Anurag Sahu

2007-2009

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SUMMER PROJECT REPORT On

Evaluation of the business potential and suggesting ways to enhance acquisition and revenue in Rural Telephony Business (RTB) of TTSL at ASHTA.

FOR THE PARTIAL FULFILLMENT OF THE REQUIREMENT OF

MASTER OF BUSINESS ADMINISTRATION
SUBMITTED BY ANURAG SAHU MBA III SEMESTER GUIDED BY PROF. HERSH SHARMA INSTITUTE OF PROFESSIONAL EDUCATION AND RESEARCH (BARKATULLAH UNIVERSITY, BHOPAL) 2007-2009
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PREFACE
The research provides an opportunity to a student to demonstrate application of his/her knowledge, skill and competencies required during the technical session. Research also helps the student to devote his/her skill to analyze the problem to suggest alternative solutions, to evaluate them and to provide feasible recommendations on the provided data. The research is on the topic of “Evaluation of the business potential and

Suggesting ways to enhance acquisition and revenue in Rural Telephony Business (RTB) of TTSL at ASHTA.”
Although I have tried my level best to prepare this report an error free report every effort has been made to offer the most authenticate position with accuracy.

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ACKNOWLEDGEMENT
This report is an outcome of mutual support and guidance of many persons towards whom I indebted. My special thanks to MR. PRAMOD MISHRA ( M.P. RTB HEAD ) MR. CHANDAN GUPTA ( Cluster head ) & Mr. AKHILESH PRATAP SINGH (Channel Manager Sehore SDCA) to provide various facility in the summer training by which I can make my project in the easy way. I express my profound reverence and the artful gratitude to Prof. HERSH SHARMA to suggest me a proper guideline towards the project.

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DECLARATION

I hereby declare that the following project report titled “Evaluation of the business potential and suggesting ways to enhance acquisition and revenue in Rural Telephony Business (RTB) of TTSL at ASHTA is an authentic work done by me. This is to declare that all my work indulged in the completion of this Project Report such as research, mapping of village, competitor analysis, sales promotion, team management is a profound and honest work of mine.

DATE: 29/08/2008

ANURAG SAHU MBA III SEM.

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EXECUTIVE SUMMARY
Objective
! ! ! ! ! Direct sales of RTB product. Team management( runner + feeder ) Village mapping of TATA telecom network. Competitor analysis in village. Study of rural consumer behavior.

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PROPOSAL
TOPIC: Evaluation of the business potential and suggesting ways to enhance acquisition and revenue in Rural Telephony Business (RTB) of TTSL at ASHTA. OBJECTIVE: 1. To find out the market penetration of the TTSL’s RTB. 2. To evaluate the business potential of TTSL in RTB 3. To discover ways to enhance acquisition & revenue. PROJECT LINE ITEMS: • Channel team handling (Daily reporting of runners and feeders). • Appointment of runners at each USO villages within coverage area which is having a population of more than 1000. • Dimensioning of retailers as per norms to be completed. • Village mapping as per network – Need to identify village within full network / partial network / no network. • Identification of potential village which is low penetrated in terms of customer base and list of same to be communicated to distributor, DSO, and runners for enchasing the sales. • Revenue enhancement from existing customer base through customer service, retail appointment and runners appointment at each USO village. • Planning and execution sales promotion activities like canopy at haat / mandi, van activity, incentive scheme to channel man power through distributor.

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METHODOLOGY:

1. Primary Data:
# Through the distributer, runners & feeders. 2. Secondary Data: # Through online, various official websites of the companies. # Journals and magazines. SIGNIFICANCE OF STUDY: To understand the market potential & penetration of TTSL & to know about the strategies to acquisition & revenue enhancement.

HYPOTHESIS: 1. The sources of data collection are limited in this research. 2. The primary data will be collected in limited area. 3. Time limitation will be there. 4. The respondent may be biased.

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CONTENT
Chapter – I Chapter – II Company profile
# Core values

Introduction of # Tata Tele Services Ltd. # Tata Indicom # USO

Chapter – III

Introduction of RTB # Product
# Price # Place # Promotion

Chapter – IV

Training Program
# Team Management # Network Mapping # Consumer Behavior

Chapter – V Chapter –VI Chapter –VII

SWOT Analysis Technical complaints & Suggestions. Bibliography

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COMPANY PROFILE

TATA GROUP
Tata is a rapidly growing business group based in India with significant international operations. Revenues in 2007-08 are estimated at $62.5 billion (around Rs251,543 crore), of which 61 per cent is from business outside India. The Group employs around 350,000 people worldwide. The Tata name has been respected in India for 140 years for its adherence to strong values and business ethics. The business operations of the Tata Group currently encompass seven business sectors: communications and information technology, engineering, materials, services, energy, consumer products and chemicals. The Group's 27 publicly listed enterprises have a combined market capitalisation of some $60 billion, among the highest among Indian business houses, and a shareholder base of 3.2 million. The major companies in the Group include Tata Steel, Tata Motors, Tata Consultancy Services (TCS), Tata Power, Tata Chemicals, Tata Tea, Indian Hotels and Tata Communications. The Group’s major companies are beginning to be counted globally. Tata Steel became the sixth largest steel maker in the world after it acquired Corus. Tata Motors is among the top five commercial vehicle manufacturers in the world and has recently acquired Jaguar and Land Rover. TCS is a leading global software company, with delivery centres in the US, UK, Hungary, Brazil, Uruguay and China, besides India. Tata Tea is the second largest branded tea company in the world, through its UK-based subsidiary Tetley. Tata Chemicals is the world’s second largest manufacturer of soda ash. Tata Communications is one of the world’s largest wholesale voice carriers. In tandem with the increasing international footprint of its companies, the Group is also gaining international recognition. Brand Finance, a UK-based consultancy firm, recently valued the Tata brand at $11.4 billion and ranked it 57th amongst the Top 100 brands in
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the world. Businessweek ranked the Group sixth amongst the ‘World’s Most Innovative Companies’ and the Reputation Institute, USA, recently rated it as the ‘World’s Sixth Most Reputed Firm.’ Founded by Jamsetji Tata in 1868, the Tata Group’s early years were inspired by the spirit of nationalism. The Group pioneered several industries of national importance in India: steel, power, hospitality and airlines. In more recent times, the Tata Group’s pioneering spirit has been showcased by companies like Tata Consultancy Services, India’s first software company, which pioneered the international delivery model, and Tata Motors, which made India’s first indigenously developed car, the Indica, in 1998 and recently unveiled the world’s lowest-cost car, the Tata Nano, for commercial launch by end of 2008. The Tata Group has always believed in returning wealth to the society it serves. Twothirds of the equity of Tata Sons, the Tata Group’s promoter company, is held by philanthropic trusts which have created national institutions in science and technology, medical research, social studies and the performing arts. The trusts also provide aid and assistance to NGOs in the areas of education, healthcare and livelihoods. Tata companies also extend social welfare activities to communities around their industrial units. The combined development-related expenditure of the Trusts and the companies amounts to around 4 per cent of the Group’s net profits. Going forward, the Group is focusing on new technologies and innovation to drive its business in India and internationally. The Nano car is one example, as is the Eka supercomputer (developed by another Tata company), which in 2008 is ranked the world’s fourth fastest. The Group aims to build a series of world class, world scale businesses in select sectors. Anchored in India and wedded to its traditional values and strong ethics, the Group is building a multinational business which will achieve growth through excellence and innovation, while balancing the interests of its shareholders, its employees and wider society.

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CORE VALUES OF TATA
Purpose
At the Tata Group our purpose is to improve the quality of life of the communities we serve. We do this through leadership in sectors of national economic significance, to which the Group brings a unique set of capabilities. This requires us to grow aggressively in focused areas of business.Our heritage of returning to society what we earn evokes trust among consumers, employees, shareholders and the community. This heritage is being continuously enriched by the formalization of the high standards of behavior expected from employees and companies.The Tata name is a unique asset representing leadership with trust. Leveraging this asset to enhance Group synergy and becoming globally competitive is the route to sustained growth and long-term success.

$ FIVE CORE VALUES
The Tata Group has always sought to be a value-driven organization. These values continue to direct the Group's growth and businesses. The five core Tata values underpinning the way we do business are: Integrity: We must conduct our business fairly, with honesty and transparency. Everything we do must stand the test of public scrutiny. Understanding: We must be caring, show respect, compassion and humanity for our colleagues and customers around the world, and always work for the benefit of the communities we serve. Excellence: We must constantly strive to achieve the highest possible standards in our day-to-day work and in the quality of the goods and services we provide. Unity: We must work cohesively with our colleagues across the Group and with our customers and partners around the world, building strong relationships based on tolerance, understanding and mutual cooperation. Responsibility: We must continue to be responsible, sensitive to the countries,
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communities and environments in which we work, always ensuring that what comes from the people goes back to the people many times over.

TATA TELE SERVICES LTD.

Profile
Tata Teleservices (TTSL) spearheads the Tata Group's presence in the Indian telecom sector. Incorporated in 1996, the company was the first to launch CDMA mobile services in India (in the Andhra Pradesh circle). With the acquisition of Hughes Telecom (India), now Tata Teleservices (Maharashtra), in December 2002, the company swung into expansion mode. TTSL currently offers services under the brand name 'Tata Indicom' in 20 circles in India: Andhra Pradesh, Chennai, Gujarat, Karnataka, Delhi, Maharashtra, Mumbai, Tamil Nadu, Orissa, Bihar, Rajasthan, Punjab, Haryana, Himachal Pradesh, Uttar Pradesh (East), Uttar Pradesh (West), Kerala, Kolkata, Madhya Pradesh and West Bengal. . TTSL, which heralded convergence technologies in the Indian telecom sector , is today the market leader in the fixed wireless telephony market with a customer base of over 2.68 million.

Areas of business
TTSL pioneered the CDMA 3G1x technology platform in India. The company has established a robust and reliable telecom infrastructure that ensures quality in its services. It has partnered Motorola, Ericsson, Lucent and ECI Telecom to deploy a reliable and technologically advanced network. .

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TTSL's telephony services include mobile services, fixed wireless phones (FWP), public booth telephony and wireline services. Among its value-added services are voice portal, roaming, post-paid internet services, three-way conferencing, group calling, WI-FI internet services and data services. . The company has entered the 'prepaid' segment by launching, under the Tata Indicom brand, its '100 % Sacchai True Paid' offering across all its circles. Tata Indicom also offers a collection of 1,000 mobile games, the latest handsets, and new voice and data services such as BREW games, picture messaging, polyphonic ring tones, and interactive applications. TTSL, along with its subsidiary, Tata Teleservices (Maharashtra), currently serves 4.58 million customers in over 1,400 towns in India.

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• Brand Name: TATA Indicom • Network: CDMA 2000-1x • Network Coverage: 20 Telecom circles • Subscriber base: > 2 million • Market Share: 8 – 10% • Subscriptions: Post Paid, Pre Paid

Tata Teleservices is part of the INR Rs. 2,51,543 Crore (US$ 62.5 billion) Tata Group, that has over 80 companies, over 3,30,000 employees and more than 3.2 million shareholders. With a committed investment of INR 36,000 Crore (US$ 7.5 billion) in Telecom (FY 2006), the Group has a formidable presence across the telecom value chain. Tata Teleservices spearheads the Group’s presence in the telecom sector. Incorporated in 1996, Tata Teleservices was the first to launch CDMA mobile services in India with the Andhra Pradesh circle. Starting with the major acquisition of Hughes Tele.com (India) Limited [now renamed Tata Teleservices (Maharashtra) Limited] in December 2002 the company swung into an expansion mode. With the total Investment of Rs 19,924 Crore, Tata Teleservices has created a Pan India presence spread across 19 circles that includes Andhra Pradesh, Gujarat, Karnataka, Delhi, Maharashtra, Mumbai, Tamil Nadu, Orissa, Bihar, Rajasthan, Punjab, Haryana, Himachal Pradesh, Uttar Pradesh (E), Uttar Pradesh (W), Kerala, Kolkata, Madhya Pradesh and RoWB.
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Having pioneered the CDMA 1X technology platform in India, Tata Teleservices has established a robust and reliable 3G ready telecom infrastructure that ensures quality in its services. It has partnered with Motorola, Ericsson, Lucent and ECI Telecom for the deployment of a reliable, technologically advanced network. The company, which heralded convergence technologies in the Indian telecom sector, is today the market leader in the fixed wireless telephony market with a total customer base of over 3.8 million. Tata Teleservices’ bouquet of telephony services includes Mobile services, Wireless Desktop Phones, Public Booth Telephony and Wireline services. Other services include value added services like voice portal, roaming, post-paid Internet services, 3-way conferencing, group calling, Wi-Fi Internet, USB Modem, data cards, calling card services and enterprise services. Some of the other products launched by the company include prepaid wireless desktop phones, public phone booths, new mobile handsets and new voice & data services such as BREW games, Voice Portal, picture messaging, polyphonic ring tones, interactive applications like news, cricket, astrology, etc. Tata Indicom redefined the existing prepaid mobile market in India, by unveiling their offering – Tata Indicom ‘Non Stop Mobile’ which allows customers to receive free incoming calls. Tata Teleservices today has India’s largest branded telecom retail chain and is the first service provider in the country to offer an online channel Http://www.ichoose.in to offer postpaid mobile connections in the country. Tata Teleservices has a strong workforce of 6000. In addition, TTSL has created more than 20,000 jobs, which will include 10,000 indirect jobs through outsourcing of its manpower needs. Today, Tata Teleservices Limited along with Tata Teleservices (Maharashtra) Limited serves over 27 million customers in more than 6000 towns. With an ambitious rollout plan both within existing circles and across new circles, Tata Teleservices offers worldclass technology and user-friendly services in 19 circles. .

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UNIVERSAL SERVICE OBLIGATION
Rural folks are yet to reap the fruits of liberalization in India. The benefits that were supposed to trickle down to the villages are still out of villager’s reach. They still lag behind in ‘connectivity’. This can only be resolved if telecommunication infrastructure is put in place—which does not seem to be a very lucrative project for private telecom companies. The margins are low; hence none of the companies are very excited to shoulder the projects. In India, the bulk of telephony in urban, semi-urban and rural areas has been handled by BSNL, as the government wasn’t too active in this area. However, government seems to have snapped out of its slumber and has come out with a number of initiatives for the rural population, and Universal Service Obligation (USO) fund is one such initiatives.

What is the USO fund?
The USO fund is an initiative taken up by the government to increase rural teledensity. The USO fund became part of the statute through a 2003 amendment to the Indian Telegraph Act (ITA) 1885. USO is an obligation to provide access to basic telegraph services to people in the rural and remote areas at affordable and reasonable prices. The fund needs be utilized exclusively for meeting the USO target. "Funds collected under USO from telecom operators are utilized for providing telephone services in rural areas, which are normally deemed unprofitable for commercial operations”

Operators on USO fund
The Government of India knew about the difficulty it might have to face while extending the telecommunication facilities in rural and remote areas. The government and the telecom ministry considered it necessary to explore possibilities of supporting mobile telephony in remote areas through USO fund. BSNL and MTNL came out with aggressive plans to provide broadband connectivity. In January 2007 they came out with minimum download speed of up to 2Mbps. From March 2006, BSNL and MTNL launched the ‘One India’ plan in the mobile and the fixed line telephone. With the introduction of this plan, one can call across the country at Re 1 per minute, anywhere, any time and to any phone.

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Vikas Shah, President—Access Business Unit, Tata Teleservices (TTSL) said, "Our company is ahead with its services in the USO territories having 75,000 connections per month, which is the highest among all players. Funds collected under USO from telecom operators such as Tata Indicom are utilized for providing telephone services in rural areas, which are normally deemed unprofitable for commercial operations. So we are doing well in terms of penetration and using these funds." Even Sanjeev Govil, Head—National Rural Marketing, Reliance Communications too had a similar opinion about USO fund. According to him, "USO fund has tremendous scope for a country like India where rural teledensity and teleconnectivity is very poor, and needs dramatic improvement. Out of six lakh villages in the country, approximately three lakh have come under village public telephony (VPT). It still has a very long way to go, and this is where USO fund can be very handy to provide impetus." Rural telephony requires massive funding, and five percent of every private telecom operator’s annual revenue goes to USO fund. The fund is then used to finance new rural telephony projects. The fund also serves as an extra source of revenue for many players, as it allows them to make headway into backward areas. Today the USO fund is not only used to provide telecommunication services but includes broadband too. Govil said, "The fund covers all aspects of telecommunication, ie mobile telephony, broadband, infrastructure support, and both passive and active infrastructure. USO is already working with operators to come out with schemes to give a big thrust to broadband connectivity by covering 5,000 towns." Shah added that today’s farmer is smarter than his predecessor. If he has access to broadband, he can go online, check prices of his products in various markets and buy the best fertilizers, and perhaps trade online. "Customizing the services to these markets is important. Since India is developing as a nation, and telecommunication is expanding, it is imperative that we don’t miss out on the huge rural demand. Right now, the requirement is of basic telephony, which the USO fund helps in addressing. Once that is taken care of, the next logical step would be to progress to VAS".

Issues concerning USO funds in India
Traditionally, the entire cost of the USO has been borne by a single telecom operator, and so there has been no requirement to define or quantify costs. But now, as countries have opened up telecommunications markets to competition, the definition and quantification of USO costs and the process by which they are shared becomes important. As a result, universal service is often used to link issues like affordability of basic telecommunications services, public access to services, especially those associated with the information society and obligation on service providers to undertake service provision, which they would not undertake in a competitive market. On this, Govil
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opined, "There are enough funds. Over Rs 10,000 crore is lying in USO corpus, but USO needs new schemes in different areas, if we are to reach tele-density of 30 percent soon."

The way forward
Indian private mobile companies are embarking on a major plan to roll out services to the remotest parts of India. A few years ago, operators would not have considered rolling out telecom services to areas with population less than 10,000, while today they are ready to consider even villages with just 5,000 people. In a few years time they would get into clusters of villages that have just 1,000 people. Cellular operators currently cover 39 percent of the country in terms of physical area. BSNL has bagged 80 percent of the rural project, winning contracts for setting up 6,125 mobile towers out of the total 7,871 passive cell sites. Among the private companies, GTL Infrastructure has the contract to set-up 471 towers, while Reliance Infrastructure has won the bid for 472 towers. Hutchison South, which is being acquired by Vodafone, has emerged as the lowest bidder for 331 towers, while NIT and Quippo have got 384 and 88 towers, respectively. Operators, in order to roll out networks to the remote and poor areas are bringing down costs so that they can penetrate rural markets. "USO funds can enhance rural telephony to a great extent in terms of easier access to telephony, at a faster rate. For companies, it is an advantage as there will be a stage of saturation in urban markets, which will be more dependent on VAS rather than basic connectivity. It makes sense for operators to enter newer circles and markets, and connect with potential users," Shah said. Govil, having similar opinions said, "USO fund has already been utilized to acquire over three million subscribers under its R Del scheme during 2005-2007. USO funds have been used for promoting village telephones or PCOs. Now USO fund is sponsoring, perhaps the biggest and fastest rural initiative in the world by adding 7,871 towers across the remotest parts of the country. Similarly, schemes to strengthen infrastructure in Ladakh, Leh, Andaman and Nicobar, and Lakshadweep are being worked out. " The decision of providing support from USO fund for mobile telephony as well as broadband services is going to open up the vast untapped market. It comprises 70 percent of the population with substantial disposable incomes and aspirations to share the growth story of urban India. Telecommunication access to rural India is going to be the most important development since ‘Green Revolution’ and will change the life in rural areas like never before.

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BSNL, Tata, Reliance bag the rural phone project in India

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Bharat Sanchar Nigam Ltd, Reliance Infocomm and Tata Teleservices have bagged the government sponsored Rs 8,000-crore plan to provide 8 million fixed line telephones to rural households by 2007. This is the first project aimed at rural households. The project is being supported from the Universal Services Obligation (USO) Fund. Until now the USO Fund was being used for setting up village community phones. Bharti Tele-Ventures and Himachal Futuristics Communications Ltd had also bid for the country's largest rural telephony project but failed to win the competitive bidding. BHARAT Sanchar Nigam Ltd, Reliance Infocomm and Tata Teleservices have bagged the Government sponsored Rs 8,000-crore plan to provide 8 million fixed line telephones to rural households by 2007. The project is being supported from the Universal Services Obligation (USO) Fund. Bharti Tele-Ventures and Himachal Futuristics Communications Ltd had also bid for the country's largest rural telephony project but failed to win the competitive bidding. Mr Shyamal Ghosh, Administrator, USO Fund, told Business Line, "The competitive bids have brought down the cost of the project by 60-75 per cent. This will allow us to use the kitty to roll out 8 million telephone lines instead of 6 million lines proposed earlier. The bids from private operators show that there is a market in rural India." While the Government had worked out a cost of Rs 17,000 per line, the operators have quoted between Rs 4,500 and Rs 7,000 per line. The USO Fund administrator had invited expression of interest from telecom operators across 20 States to bid for the largest project envisaged under the USO scheme. The project covers 274 secondary switching areas (SSAs), which are equivalent to a district. While there was competitive bidding in 215 SSAs, BSNL was the sole bidder for the remaining sectors in Assam and North East. In areas where there was competitive bidding, it emerged the most successful bidder winning in 171 SSAs across 19 States. The telecom operator did not win any sectors in Haryana. Reliance Infocomm emerged the winner in 61 SSAs spread across 15 States while Tata Teleservices got the project in 42 SSAs across 9 States. Tatas had bid for villages in 16 circles. Bharti, which had

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expressed interest in 11 circles, did not win any. Letter of intent has been issued to the successful operators. This is the first project aimed at rural households. Until now the USO Fund was being used for setting up village community phones.

Tata to obtain three new licences
Tata Teleservices is all set to get unified access licences for offering mobile and fixed telephone services in Assam, Jammu and Kashmir and North East. The company had applied for these three circles almost a year ago but the Government had held it back since there was no clarity on issues relating to foreign CEOs. Tata Tele has also applied for a long distance telephony licence. The three new licences mean that the company can now have a pan-India footprint.

National rural telecom licence
In yet another move to increase the rural tele-density, the Telecom Regulatory Authority of India (Trai) has recommended that the government create a national rural telecom licence, that allows companies to operate all kinds of telecom services, exclusively in rural areas. The regulator has proposed that companies which offer services under the new licence be charged only a nominal entry fee and be exempted from all other charges, including licence fee, spectrum fee and revenue share. For existing telecom operators, the regulator has reiterated that the government abolishes spectrum charges for rural operations. But it has added that that semi-urban and semirural areas in the periphery of large towns be excluded from the definition of ‘rural’. The government has also been advised that the elimination contingents be extended only after operators put in place “satisfactory accounting and audit systems which can ensure distinctions between rural and urban revenues”.

Increasing rural teledensity
Telecom Regulatory Authority of India plans to raise the teledensity in rural areas from the current 1.9% to 15% by 2007 and has proposed a Rs 8,000 crore subsidy for creating necessary infrastructure. With this kind of subsidy support, it will be possible to install 20,000 base stations in rural areas to cover about 80-90% of the villages, according to TRAI.

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The subsidy is essentially a Universal Services Obligation (USO) fund support. Trai had set up a USO fund for the development of rural areas. A 5% universal access levy on the gross revenues earned by all the operators goes into the fund. The telecom body has also announced a discount in annual license fee and spectrum charges linked with rural coverage. Teledensity is measured as the availability of phones per 100 persons. One of the main reasons for the low teledensity is the cost involved in setting up infrastructure in the rural areas is high, and recoveries could be lower as there are not many users. Current urban teledensity is about 31.1% and is expected to reach 43% by 2007. Rural teledensity, at present, is about one-third of the urban teledensity figure seven years back. The government has proposed to cover 3,50,000 out of 6,07,000 villages by ‘07. The population covered in the rural areas would be 450 million. One of the key variables for supplying mobile phones to rural areas is by adopting appropriate marketing techniques. Sanjeev Govil, head of rural marketing, Reliance Infocomm, says, “Bundling of mobiles with rural-specific products like mobikes, tractors, and tying up with other distribution channels like LPG and cable network distributors would be interesting ways of marketing wireless mobile phones in rural India.” New marketing strategies and other incentives are also being used to penetrate rural markets.

Tata Teleservices: ringing in a new era
In India's metros, state capitals and small towns, telephones have morphed into cell phones. From the high-powered executive in his tinted-glass Mercedes to the vegetable seller down the road, people everywhere are chatting, getting information and doing business on the cell phones. But it's a different story in India's villages, where many are yet to see a telephone. Communication is still a problem, and most villages are yet to savour the benefits of Alexandra Graham Bell's remarkable invention. Of the 70 per cent of our population that lives in rural India, only 1.5 to 2 per cent are connected through a telephone. In 2002, in an effort to increase rural tele-density, the government set up a universal service obligation (USO) fund. Telecom operators had to give a certain percentage of their gross revenues to this fund. It also mandated that every telecom operator must provide telephone services in rural areas each year, up to a certain percentage of their annual business turnover, which would be subsidised from the USO fund.

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Last year the system was changed to a tender system, where operators could bid for rolling out services in certain areas of the country that have zero to less than 1 per cent tele-density. They would receive a subsidy from the USO fund to enable them to provide services in those areas. Tata Teleservices Ltd (TTSL), which started operations in 1996 in Andhra Pradesh, is a major telecom player in India. Over the years, it has expanded its network and today covers 2,500 towns in 20 circles. It is the market leader in the fixed wireless telephony market, with a customer base of over 2.8 million. TTSL has bid successfully to provide telephone services in 242 SDCAs (short distance charging areas). It sees rural telephony not just as a service to India's villagers, but also as a great business opportunity. Darryl Green, CEO of Tata Teleservices, expands on the company's philosophy, "There is a huge amount of satisfaction in working in the rural areas. In urban areas, the telephone has become an integral part of life. But in rural areas, people have to travel long distances on foot or a bicycle to find out good or bad news from family and friends. For them to be able to pick up a phone and get that news in a second, makes this business that much more meaningful." But the challenges of providing telecom services to rural India are manifold. Many villages cannot be accessed easily owing to their remote location; setting up a network is fraught with difficulties, thanks to rough terrain; the investment required is high and the returns are very low, as many villagers cannot afford the cost of telephone services. It's also difficult to get people to work in these areas; they are remote and lack amenities. Electricity is one of the primary requirements for telecom services, but many villages do not have electricity. Diesel generators are expensive and can work only as a stopgap measure. The government is supposed to help telecom companies get electricity, but the companies have to do most of the work and also bear the cost. "However, once electricity comes into a village, it can only lead to further development," says Green. Another challenge has been to communicate the benefits of the product to the people, as many of them are illiterate. The company's sales people first put on an entertainment show to attract a large crowd and then use visuals to talk about the services and the registration process. Many times they have to carry their own camera to complete registration formalities as villagers rarely have their own photographs. An important learning for the company has been in understanding the communication needs of villagers. "In rural communities, communication takes place mainly among defined family groups. So they want a service that allows them to call families in and around their village at reasonable rates," says Green. The company's family-and-friends (Parivaar) programme at special calling rates has been well accepted.

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TTSL's telephones also provide unique information services that are required in these areas. They have an LCD display and different language capabilities for diverse Indian regions. Farmers can avail of the SMS facility to find out crop prices in other markets; get weather updates and the price and availability of agri-equipment. "This kind of information is very important for farmers and helps them make better decisions, which in turn helps them increase their income," says Green. The cost of the service has been adapted for the rural customer. In the pre-paid scheme, the company retains ownership of the phone, so there is no deposit to be paid, just an activation fee which ranges from Rs 600 ($13) to Rs 800 ($17). If the customer wants to stop subscribing to the service, the company takes back the phone. TTSL is trying to develop lower cost phone models to attract more customers. The CDMA technology enables customers who can afford a computer to connect to the internet with these phones. Tata Teleservices is also helping school children gain access to information by providing internet services free of charge to local schools. This is a corporate social responsibility activity in conjunction with CDMA equipment maker Qualcomm, which is initially being rolled out in Maharashtra and Madhya Pradesh. Another key learning has been in setting up a distribution network. The company has set up a three-tier network with a main distributor who looks after a large area, generally an SDCA, and has feeders (on his pay roll) which feed into 'runners' – people appointed and trained by TTSL – who visit villages on a bicycle or a two-wheeler at defined times on defined days of the week, selling recharge vouchers and servicing equipment; each runner covers between 200 to 300 customers. The company has also joined hands with Tata Chemicals' Tata Kisan Sansar network, disseminating information through these centres and using them as local distributors. Tata Teleservices has invested Rs 240 crore ($51 million) in rural telephony in these 242 SDCAs, covering Rajasthan, Bihar, UP East, UP West, Maharashtra, Andhra Pradesh, Karnataka, Punjab and Haryana. It will reach out to more than 6,00,000 subscribers by end March 2007. It hopes to get more subscribers and induce existing customers to move up to value-added products and services. "Right now, the need is a fixed wireless phone in the house, so that all family members can benefit from it. Cell phones will be the next wave, when their affordability increases," says Green. Apart from looking at products for individuals, the company is also looking at helping small businesses by offering services based on CDMA technology. Less than 15 years ago, the telephone was a luxury for most urban Indians, who had to endure years of waiting to be allotted one. Today, it is the exact opposite, as telecom companies vie for customers. Availability of telephone connections at an affordable price
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has made the difference. The Tata foray into rural areas is bound to cause a similar transformation, sooner rather than later.

RURAL TELEPHONIC BUSINESS “RTB”

4’P IN RTB
! PRODUCT ! PRICE ! PLACE ! PROMOTION

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PRODUCT

Model No.LSP 400T

Model No.LSP 340

Model No.P800

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PRICE
Rural USO
We have a strong 1.4 Million Rural USO base in 215 SDCAs across 9 circles viz. Rajasthan, MP, Bihar, UP E & W, Punjab, Haryana, and Karnataka and for plans for Maharashtra.
PARAMETER Total Package price Registration Charge (including ST) Installation Charge Validity * Free talk value (Local T2T only) is for limited period only Free talk value (Local T2T only)* Free talk value validity (Local T2T only)* RDEL 499 PACKAGE Rs. 499 Rs. 399 Rs.100 2 Years Rs.200 30 Days

Rural USO Tariffs
TYPE OF CALLcall
Local Call

PARTICULARS
Local- Fixed (Tata to Tata) Local- Fixed (Tata to others) Local- mobile (both GSM and CDMA) 180 180 60

PULSE
0.8 0.8 0.8

RATE PER PULSE

National Long Distance Intracircle <50 Kms >50 Kms Intercircle <50 Kms >50 Kms International Long US & Canada 180 40 20 20 7 0.8 0.8 0.8 0.8 0.8
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Distance Australia & New Zealand Countries in ASIA & OCEANIA Countries in EUROPE Gulf SAARC-Other Neighboring Countries SEA Countries Western Hemisphere excluding 001 series 4 4 6 4 4 6 4 0.8 0.8 0.8 0.8 0.8 0.8 0.8

Voucher Denominations
All the current USO RCV will be applicable for this package.

MRP
Service tax @12.36% Admin Fee (AF) Talk Value (TT) Validity (days) Grace (days) Inactive (day)

50
5.45 0.00 44.55 60 60 1

60
6.60 0.00 53.40 30 60 1

75
8.25 0.00 66.75 45 60 1

100
10.91 0.00 89.09 60 60 1

150
16.50 0.00 133.50 60 60 1

200
21.81 0.00 178.19 60 60 1

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PLACE
Voucher Applicability
• Applicable in USO Circle only. (Rajasthan, MP, Bihar, UP E & W, Punjab, Haryana, Karnataka.) • Applicable on USO R-Dels only. • Unused promo talktime will be forfeited after validity of the promo talktime is over. • To be sold in predefined USO SDCA only in the circles mentioned above.

Voucher Applicability Circles
• • • • • • • • •

Bihar Haryana Punjab Rajasthan Madhya Pradesh Uttar Pradesh (West) Uttar Pradesh (East) Karnataka Maharashtra

DEL Applicability
It is only for rural areas. Every DEL has specific ESN No. which work under only particular tehsil.For example in sehore tehsil code no. is 07562; icchawar is 07561 and astha is 07563. If any DEL goes out side the tehsil it will not work or it will negative than company barred the number means DEL not work. Company provides specific ESN No. to DEL.

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PROMOTION
To promote the brand Tata Indicom Phone to the rural community a full blown van activity was undertaken in USO and tehsil sehore.

The activity covered the following # Brand promotion through stall set- up # Brand promotion through movement of van across the village accompanied with music etc # Merchandizing by promoters # On the spot bookings by runners and feeders # En route promotion through distribution of pamphlets, pasting banner on walls. # We are also do sales promotion through canopy, panting on walls, tractor. # Umbrella scheme for customer when he purchases DEL.
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# Colour TV, refrigerator, DVD for runner and feeder when he achieves the target .It is motivation factor of runner and feeder.

DISTRIBUTION CHANNEL

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TRAINING PROGRAME

Team Management
• • • • • • • • • • • • Summer trainees look after both runner & feeder. Sales planning of every day is made by summer trainees Feeder & runner have to report of daily sales to summer trainees. Runners were trained regarding product and plan. Runners were taught how to present the product and themselves before customers Runners were provided data regarding population and network position of villages so that they can arrange the villages according to the sales prospects. They were provided friendly environment so that they can come forward with obstacles they are facing. Their daily performance was evaluated and instructions regarding future course of action were given. New pay structure was recommended so that feeders and runners are adequately compensated. Improved incentive structure can act as a potent motivating factor. Summer trainees accompanied runners to the field so that ground realities are known. They were motivated by explaining them that their future was bright if they are associated with a TATA enterprise. Whenever needed poorly performing runners were sacked and replaced.

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Roles & Responsibilities
FEEDER

• • • • • •

Recruitment of runners at each USO village. Training of runners about how to do presentation in front of the customer, about instrument, how to convince customer. Daily report of runner. Orders booked. Orders installed. Ensuring stock of RCVs, Telephone equipments, CAF forms with runner.

RUNNER

• • • • • • • •

Sales of R DELs Ensuring the Installation and activation of NIU and telephone instrument. Collection of cash from customer. Servicing of RCVs to customer and retailers. Creating TATA representatives at each village level. Daily report to feeder. Orders booked. Orders installed.

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FINDINGS
POTENTIAL VILLAGES, VI LLAGE MAPPING AS PER NETWORK S
CUSTOMER BASE NETWORK CHART

District

Tehsil

Village Name

HH
1,142 985 919 594 575 569 537 494 372 394 342 315 271 295 259 303 237 282 248 290 261 232 237 235 274 240 235

Sehore Sehore Sehore Sehore Sehore Sehore Sehore Sehore Sehore Sehore Sehore Sehore Sehore Sehore Sehore Sehore Sehore Sehore Sehore Sehore Sehore Sehore Sehore Sehore Sehore Sehore Sehore

Ashta Ashta Ashta Ashta Ashta Ashta Ashta Ashta Ashta Ashta Ashta Ashta Ashta Ashta Ashta Ashta Ashta Ashta Ashta Ashta Ashta Ashta Ashta Ashta Ashta Ashta Ashta

Maina Metwara Siddiqueganj Seoda Nipaniya Kalan Kajlas Khadi Khacharod Guradiya Varma Murawar Kurawar Singarchori Khajuriya Kasam Phudra Karman Khedi Baijnath Dupadiya Bhuphod Rampura Kalan Gwali Dabri Jhilela Bamuliya Bhati Aroliya Moondla Mohaba Lasudiya Khas Pagariya Chor

558 465 600 400 255 245 300 200 153 298 200 218 100 158 120 159 100 151 55 60 100 125 100 140 60 100 125
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Sehore Sehore Sehore Sehore Sehore Sehore Sehore Sehore Sehore Sehore Sehore Sehore Sehore Sehore Sehore Sehore Sehore Sehore Sehore Sehore Sehore Sehore Sehore Sehore Sehore Sehore Sehore Sehore Sehore Sehore Sehore Sehore Sehore Sehore Sehore Sehore Sehore Sehore Sehore Sehore Sehore

Ashta Ashta Ashta Ashta Ashta Ashta Ashta Ashta Ashta Ashta Ashta Ashta Ashta Ashta Ashta Ashta Ashta Ashta Ashta Ashta Ashta Ashta Ashta Ashta Ashta Ashta Ashta Ashta Ashta Ashta Ashta Ashta Ashta Ashta Ashta Ashta Ashta Ashta Ashta Ashta Ashta

Khajuriya Jawar Bapcha Baramad Bamuliya Raimal Arniya Gaji Darkheda Bapcha Chhapar Gwala Titoriya Barchhapura Tigariya Harniyagaon Barkheda Molu Khedi Samarda Bor Kheda Bilpan Guradiya Rupchand Bamuliya Khichi Sheku Kheda Jafrabad Channotha Harnawada Mana Khedi Atraliya Bisu Khedi Kachnariya Sando Khedi Patariya Goyal Hakimpur Kundiya Nathu Dhinga Khedi Semlibari Kalyanpura Kundiya Dhaga Amarpura Pardi Khedi Kumdawada Richhadiya Nanakpur Jagmalpura

238 244 225 283 201 216 219 206 208 221 203 190 199 199 217 190 185 204 172 181 171 171 166 155 172 142 132 147 130 135 175 143 131 141 146 141 120 139 112 109 134

80 125 141 115 100 111 100 50 100 55 100 90 90 90 50 80 40 90 30 100 90 96 80 30 90 30 59 60 70 75 40 90 70 50 30 60 50 40 50 80 90
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Sehore Sehore Sehore Sehore Sehore Sehore Sehore

Ashta Ashta Ashta Ashta Ashta Ashta Ashta

Jivapur Mahodia Bherupur Mohammadpur Pakhani Awali Kheda Hajipur Bhana Khedi Bhil Khedi

121 131 115 96 109 118 109

20 60 70 30 60 25 20

BLUE BLUE BLUE

*Green – Good signal *Blue- Average Signal *Red- Bad Signal

Total Villages with HH, Pop & Customer base

LDCA

SDCA

Distributor name

Total village

Network

House Hold

Population Customer Base till July 2008

Bhopal Sehore Uttam Sales Ashta.

295

Green 24

Blue Red 87217 180 91

524093

14000 (appx.)

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Feeder’s Name and Runner’s Name
Narendra
Sr.No. 1 2 3 4 5 6 7 8 9 10 11 12 Runner Name BALVAN SINGH YASPAL VIJAY KUMAR SANTOSH RAJESH JAT PAPPU INDAR SINGH PAVAN KUMAR ARJUN INDAR SINGH BAPU SINGH IMRAN KHAN

9907023948
Village Name Contact No.

TAJPURA PAROLIYA AROLIYA UDAY PUR PATARIYA CHOHAN DEVAN KEDI BARKEDA PAGARIYA HAT JASMAT BAJKHEDA GOVIND PURA BADODIYA GADRY

9229485594 9229693446 9229829708 9200110964 9229722624 9229414548 9200203867 7560692902 9200208060 9200851881 9229509320 9200212408

Nirmal
Sr.No. 1 2 3 4 5 6 7 8 9 Sr.No. 1 2 3 4 5 6 7 8 9 10 Runner Name GHULAB SINGH BHOJ RAJ DAYA RAM ANIL DHARAM HUKAM ANIL JIVAN NARENDRA

9202708569
Village Name Contact No.

LASUDLIYA HAKIMABAD MENA SEVDA MURAVAR KURAVAR TITORIYA ARNIYARAM DONIYA BAPCHA

9329888106 9200312667 7560693484 9754535567 9200280297 7560684304 9754535567 9200342081 9907023948
Contact No.

MANEESH
Runner Name LOKENDRA KULDEEP DOLAT VERMA LALIT KULDEEP JIVAN SELENDRA SANDEEP PARHLAD SINGH BALVAN

9202705874
Village Name

SANGAKEDI BAFAPUR MUGLI KOTARI KHANDOR PURA ARNIYADAUD CHAPAR ROLA GAV BIL KEDI KENIYA PURA

9827613394 7560691603 9229926538 9200175222 9301421334 9200342081 7560692612 7560684921 9200291961
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11 12

AKHILESH NARENDRA

MAGAR KEDI DONIYA BAPCHA

9202307016 9907023948

FEEDER SALARY STRUCTURE
:-

BASIC

3500

(IF 70% achievements of the target)

INSENTIVE (1st):-

500 (Maintain own DRR, Maintain Stander CAF quality & Maintain Runner DRR)

INSENTIVE (2nd):-

Rs. 10.00/DEL 100% Achievements of the target. Rs.15.00/DEL 115% Achievements of the target.

Feeder Target:
For the Month of June: 80 For the Month of July: 150

Target Achieved: For the Month of June: 1. Manish: - 50
2. Nirmal : - 35

For the Month of July:

1. Narendra - 210 caf 2. Nirmal - 215 caf 3. Manish - 211 caf 4.Counter booking - 190 caf

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Total acquisition done in the month of June & July

RUNNER COMMISION STRUCTURE
RUNNER No. of sale 1 to 5 6 to 8 Rs. / Del 50 60
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9 to12 13 to 18

75 90

Rs. 10.00/Del (Maintain own DRR, Maintain Standard CAF quality)

Target For the Distributer:
For the month of June: 1198 Acquisition. For the month of July : 550 Acquisition.

Target Achieved:
For the month of June: 646 Acquisition. For the month of July : 550 Acquisition.

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Performance report of all the SDCA of Bhopal Cluster

FCR DUE Loading Distributor Name 1 2 3 4 5 6 DHRUV ENTERPRISES Baijnath Electronics PRANAY TELESERVICES PRANAY TELESERVICES RAM TELESERVICES UTTAM SALES Bhopal Total City Sehore Berasia Nasrullaganj BUDHANI Ichhawar ASHTA CM Akhilesh Ritesh Ritesh Ritesh Akhilesh Akhilesh Target 520 399 1211 0 320 550 3000 FCR MTD 612 435 368 0 351 795 2561 1 23 2 0 1 6 33 0 1 0 0 1 1 3

Total 613 459 370 0 353 802 2597

% of Achv 118% 109% 30% 0% 110% 145% 85%

Revenue achieved by selling RCV

D.Code 15000173 15001141 15005774 15006131 15007811 15007960 15008065 15008633 15013219

Dist Name DHRUV ENTERPRISES Vaishnavi Enterprises PADMA MOTORS Baijnath Electronics SURYA MARKETING N S DISTRIBUTOR PRANAY TELESERVICES RAM TELESERVICES UTTAM SALES Ashta Grand Total

RCV 785425 137149 135280 385815 32307 366235 105821 545837 98167 2592036

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RURAL CONSUMER BEHAVIOUR
# One example of poor service in a particular village can ruin the chances of further connections in same village.

# Word of mouth is very strong in village communities. # Since majority of the villagers are illiterate they believe in rumors very easily. Any shortcoming on the part of service provided by the company leads to rumors, which can drastically affect company’s image in long term. # There are some early adopters of the product in the village. The opinion of such early users influences the response of other prospective customers. # Villagers don’t trust outsiders easily. They trust local salesmen as they feel that local salesmen will not run away and they can be contacted any time. # Villagers can prove to be short tempered if they feel that somebody is trying to take advantage of their simplicity. # They show inclination towards government concerns. # Villagers show excitement towards new products.

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SWOT ANALYSIS
Strengths
# The company’s name, TATA, is the biggest strength and support behind the plan and it helps in establishing the faith of the customer. # Availability of product to customer in more faster then other competitor. (Hand to hand). # The package offered is very attractive. % Low initial investment. % Low local call rates. % Low denomination prepaid vouchers available. % No monthly rental. If the plan is clearly conveyed to prospective customers they will most probably buy the product. # No worthwhile competitor. B.S.N.L. is the main competitors but monthly rental is a big weak point for them. # The market hitting is very efficient as the dealer is using persona; sale technique by using local salesmen and providing services door to door.

Weaknesses
# The sales team is not properly trained and not properly paid. As the result the false plan-descriptions are spread to the customer and the sales team is not showing commitment towards the dealer and the customer. # The only voucher sale-source is the dealer office and the customers have to travel a lot to buy the voucher and it increase their botheration. # There is no identity proof issued from the company’s side to the salesman, so the villagers are not showing faith towards them. # The project started in the rainy and sowing season. So the farmers are busy in the fields and also invested lot on the crop as a result they have less disposable finance to own the phone. # The user manuals and the plan’s pamphlets are in English. So, it is difficult for the majority of rural customers to understand the plan. # The phone system is battery operated and the backup is very small. Due to the frequent electricity failure, the battery is not performing well.
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# Salesmen in procuring stock and CAF waste Lot of time. # The features of the plan are very technical and difficult for the rural customer to understand. # Changes in the plan are not timely conveyed to the salesmen. # The dealer is not showing his commitment towards the company and also the company is not providing him the sufficient support. For example: % The voucher supply is not good. % The stock supply is not in time. % The dealer is not very much interested in providing after sale service to customer.

Opportunities
# There is n major competitor for the R.H.T.P. except B.S.N.L., which is a fixed line phone. The AIRTEL and the RELIANCE are covering very small area of the villages and mainly covering the commercial connections (STD, PCO). So, there is vast area open for the RHTP if they improve and expand their network. # The plan that RHTB offering is very attractive and economical. If they spread their plans and communicate well with the customer, they will definitely switch to the Tata’s connection. # By providing on time and best service to the customer, the company can gain customer loyalty and customer satisfaction. # The well-trained and motivated salesmen can prove an asset to the company and can increase sales volume and customer satisfaction. # If the length of cable provided with magnetic antenna is increased, demand for PPA will be reduced. # If higher denomination vouchers are introduced revenue will increase.

Threats
# The poor service satisfaction is the biggest threat to the company. If the customer will not get on time service they will definitely switch to the other phone system and sales will fall down. # The rumors are also the major threat to the business. Being illiterate, rumors affect the rural customers the most and the company’s image get affected. # The weak marketing activity is also the threat to the image. The customer is not getting proper information about the plan and the dealer and the salesman are fooling them. # The rainy season is also the threat to the sales volume because it becomes difficult to reach the prospective customer. # The stock supply and the voucher availability is very poor so it effect the customer’s faith and satisfaction.
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# In some cases, the customer’s form get accepted but even after two months the phone is not activated, if it is the case of rejected form then the rejected form is not submitted back to the salesman. # Changes in the plan are not timely conveyed to the salesmen. # The dealer doesn’t give due attention to the important identity proof of the customer submitted to him and also in some cases it get misplaced. It is also the threat as it makes the customer to suffer.

Technical Complaints
# Battery discharges in short span of time. # Calls are charged at the higher rates than mentioned in plan. # Receivers are defective in majority of instruments. # Weak network and interference. # DEL already exists. # DEL not activated. # Display is in English.

SUGGETIONS
# The voucher’s retail outlet should be opened so that the customers get the voucher easily. # Provide adequate training to the sales man. # User manuals and the plan’s pamphlets should be printed in Hindi. # Better quality batteries should be provided with the set. # Sales promotion should be more intense. # Issue identity cards and sales kit to the salesman. # Increase the length of the wire of antenna. # Appoint P.R.O in each territory.
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# Introduce higher denomination RCV.

BIBLIOGRAPHY
BOOKS: • • • Kotler, Philip. (1999):’Marketing Management’ Prentice Hall Of India Pvt. Ltd., Kothari, C.R (2001):’Research Methodology’, Vishwa Publication., New Delhi A. nags “marketing strategy”, (2004). New Delhi.

WEBSITE: http://www.tataindicom.com www.google.com www.wikipedia.com http://www.dot.gov.in/uso/usoindex.htm

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