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. FOR THE PARTIAL FULFILLMENT OF THE REQUIREMENT OF MASTER OF BUSINESS ADMINISTRATION
SUBMITTED BY Piyush Asthana MBA IV SEMESTER GUIDED BY Dr. P.R.Bhattacharyya ICFAI BUSINESS SCHOOL KOLKATA 2007-2009
This project is done in order to analyze all the factors affecting the customer’s decision made before and after the purchase of mobile phone. Mobile phones are incomplete product. An Incomplete product is a product that needs further investment by customer in order to get the utility of a product. For example automobile they require petrol, VCD players need video CD to give its core benefit to customers without these add on an incomplete products is of no use to user .We can imagine an automobile without petrol, is not even giving its core benefit, that is transportations, to its user and therefore mobile is also an incomplete product because without service provider it is of no use. Therefore a complete buying behavior cannot be studied by considering both aspects separately. A complete picture of factors affecting buying decision can emerge only when pre and post decision of buying mobile set is taken under consideration The underlying problem in predicting customer choice resides much more in the fact that purchasing decisions are made on the basis of many different criteria simultaneously, including brand, quality, performance, price, features, and so on. This problem is further confounded in service applications, where customers may consider intangible features and characteristics of the market offerings for e.g., service quality, safety, and trust; interactions between service providers and customers. Thus, incorporating customer preferences and choices into day-to-day managerial decisions is extremely important for today’s highly competitive environment, because their customers evaluate them on more than one criterion. In such a scenario, it is worthwhile to find out the various aspects of pre and post mobile phone and service purchase decision of various user groups. Comparative research, simply put, is the act of comparing two or more things with a view to discovering something about one or all of the things being compared. This technique is often utilizes multiple disciplines in one study. When it comes to method, the majority agreement is that there is no methodology peculiar to comparative research. The multidisciplinary approach is good for the flexibility it offers, yet comparative programs do have a case to answer against the call that their research lacks a “seamless whole”. There are certainly methods far more common than others in comparative studies, however. Quantitative analysis is much more frequently perused than qualitative, and this is seen in the majority of comparative studies can be use quantitative data.
Secondary analysis of quantitative data is relatively widespread in comparative research, undoubtedly in part because of the cost of obtaining primary data for such large things as a country’s policy environment. A typical method of comparing welfare state is to take balance their levels of spending on social welfare. Comparative research is a methodology in the social sciences that aims to make comparisons across different countries and cultures. A major problem in comparative research is that the data sets in different countries may not use the same categories, or define categories differently.
1. To project is done in order to analyze all the factors affecting the customer’s decision made before and after the purchase of mobile phone.
2. Find out the hidden information in purchase of handsets & cellular services.
Definition of Cellular/Mobile phone www.wikipedia defines cellular phone as: The Cellular telephone (commonly "mobile phone" or "cell phone" or "handphone") is a longrange, portable electronic device used for mobile communication. In addition to the standard voice function of a telephone, current mobile phones can support many additional services such as SMS for text messaging, email, packet switching for access to the Internet, and MMS for sending and receiving photos and video. Most current mobile phones connect to a cellular network of base stations (cell sites), which is in turn interconnected to the public switched telephone network (PSTN) (the exception is satellite phones.Cellular telephone is also define as a type of short-wave analog or digital telecommunication in which a subscriber has a wireless connection from a mobile telephone to a relatively nearby transmitter. The transmitter's span of coverage is called a cell. Generally, cellular telephone service is available in urban areas and along major highways. As the cellular telephone user moves from one cell or area of coverage to another, the telephone is effectively passed on to the local cell transmitter. A cellular telephone is not to be confused with a cordless telephone (which is simply a phone with a very short wireless connection to a local phone outlet). A newer service similar to cellular is personal communications services (PCS). Much of the growth in Asia Pacific Wireless Telecommunication Market is spurred by the growth in demand in countries like India and China. India‘s mobile phone subscriber base is growing at a rate of 82.2%. China is the biggest market in Asia Pacific with a subscriber base of 48% of the total subscribers in Asia Pacific. Compared to that India’s share in Asia Pacific Mobile Phone market is 6.4%. Considering the fact that India and China have almost comparable populations, India’s low mobile penetration offers huge scope for growth.
Need for study
People learn about cellular phone from many sources, mainly from friends and families, through advertisement and from their own experience. In the long-run, advertisement help brands by making consumer less price sensitive and more loyal. Exposure of an ad is crucial to be effective in changing consumer knowledge, attitude and behavior. And for the ad to be seen,
it must grab the attention of its target audience. ‘Ads originality’ as defined from Pietes, Warlop and Wedel, (2002) were easier for customer to remember than ordinary ads by increasing attention to it. This thus increased attention to the brand being advertised. However, regardless of the content, ads for brand leaders are more successful due to the influence of the brand (Simon, 1970). Ads for less popular brands may be less successful even though the content may be good. However whether consumers like or dislike an ad does not necessarily lead to brand acceptance or rejection. So, even though consumers may like the ad that they see, it does not necessarily mean that they will go out and buy the brand advertised. Usually the consumer uses their attitude towards the ad in brand choice equaled that of attitude towards the brands. As a marketer I know that advertising messages are interpreted differently between different genders and also between different groups of people In building brand preferences, Alreck and Settle (1999) proposed six strategies: 1) Need association- the product/brand linked to need through repeated messages. 2) Mood associations- brands should be associated with good feelings through slogans, songs. 3) Subconscious motivation-use of symbol to excite consumers’ subconscious motives. 4) Behavior modification-consumers are conditioned to buy the brand by controlling cues and rewards. 5) Cognitive processing-penetrating perceptual and cognitive barriers to create favorable attitudes towards the brand/product. 6) Model emulation- portraying idealized lifestyles for consumers to imitate. Brand preference and product attribute Attributes are the characteristic or features that an object may or may not have and includes both intrinsic and extrinsic. Benefits are the positive outcomes that come from the attributes. People seek products that have attributes that will solve their problems and fulfills their needs Understanding why a consumer choose a product based upon its attributes helps marketers to understand why some consumers have preferences for certain brands . In the Lancaster model of consumer demand (1966, 1979), also referred to as the product attributes model, was used to
evaluate brand positioning. This model assumes that consumer choice is based on the characteristics (or attributes) of a brand. Each product is a bundle of attributes and that choice is based on maximizing utility/satisfaction from the attributes subject to budget constraints. However there were two limitations of the model: (1) the model is static and deterministic and (2) the model does not explain how the preferences for attributes were formed. Both tangible and intangible attributes of a product are equally important in choosing a product or brand. It was, found though, that the more attributes (non-negative) associated with a brand, the more loyal the customer Romariuk and Sharp (2003) suggested that marketers should focus more on how many attributes the brand should be associated with and not what attributes. However, this study did not specify what sort of attributes marketers should associate the brand with; i.e. whether they should be relevant or irrelevant attributes, tangible or intangible etc .This is because it is important that consumer accurately lean about product attribute performances since it would influence their interpretations of product performance by causing memory encode and retrieval bias. Unfounded product attribute relationship beliefs can mislead them into expecting something that is not there. Hence if products fall short of customer expectations, then dissatisfaction would result. It was also found that through irrelevant, some attributes may still be important in influencing consumer choice. Persistent preferences for product attribute occurs when there is low ambiguity in the initial potential choice for salient attributes coupled with experience, although those attributes maybe irrelevant (i.e. an attributes usually not associated with favorable brand outcomes. According to Mason and Bequette perceptions on product performance based on salient attributes are more important in influencing the consumer purchase behavior than actual product attribute performances. For low-involvement products, consumers have more objective view of the nature of the attributes (eg. food, cosmetics) because they are constantly being advertised and promoted. We can say that consumer evaluation of a product can be broken down into evaluation related to product (tangible or physical attributes) and brand name (intangible attributes, or images added to the product due to its brand names).However perception of product performance on the salient attributes are more important than actual performance. The attributes that consumers expect in a product and how positively or negatively they rate these attributes to help develop and promote a successful product. Retailers need to be knowledgeable of the product attributes perceived as the most important by each individual consumer group in order to build and maintain market share. It is
the consumer who determines which attributes matter to them. Different consumer groups place different importance on different attributes. Thus the need for the study is justified because most of the past researches are either done on either considering the handset or about the service providers, which does not extract the complete and true picture of consumer buying behavior of mobile phone.
The Global Cellular Mobile Industry:
The global mobile phone industry is based on many different manufacturers and operators. The industry is based on advanced technology and many of the manufacturers are operating in different industries, where they use their technological skills, distribution network, market knowledge and brand name. Three large manufacturers of mobile phones are today dominating the global mobile phone industry; Nokia, Eriksson and Motorola. In addition to these companies there are many manufacturers that operate globally and locally.
Telecom Industry in India
History of Indian Telecommunications Started in 1851 when the first operational land lines were laid by the government near Calcutta (seat of British power). Telephone services were introduced in India in 1881. In 1883 telephone services were merged with the postal system. Indian Radio Telegraph Company (IRT) was formed in 1923. After independence in 1947, all the foreign telecommunication companies were nationalized to form the Posts, Telephone and Telegraph (PTT), a monopoly run by the government's Ministry of Communications. Telecom sector was considered as a strategic service and the government considered it best to bring under state's control. The first wind of reforms in telecommunications sector began to flow in 1980s when the private sector was allowed in telecommunications equipment manufacturing. In 1985, Department of Telecommunications (DOT) was established. It was an exclusive provider of domestic and longdistance service that would be its own regulator (separate from the postal system). In 1986, two wholly government-owned companies were created: the Videsh Sanchar Nigam Limited (VSNL) for international telecommunications and Mahanagar Telephone Nigam Limited (MTNL) for service in metropolitan areas. In 1990s, telecommunications sector benefited from the general opening up of the economy. Also, examples of telecom revolution in many other countries,
which resulted in better quality of service and lower tariffs, led Indian policy makers to initiate a change process finally resulting in opening up of telecom services sector for the private sector. National Telecom Policy (NTP) 1994 was the first attempt to give a comprehensive roadmap for the Indian telecommunications sector. In 1997, Telecom Regulatory Authority of India (TRAI) was created. TRAI was formed to act as a regulator to facilitate the growth of the telecom sector. New National Telecom Policy was adopted in 1999 and cellular services were also launched in the same year. Telecommunication sector in India can be divided into two segments: Fixed Service Provider (FSPs), and Cellular Services. Fixed line services consist of basic services, national or domestic long distance and international long distance services. The state operators (BSNL and MTNL), account for almost 90 per cent of revenues from basic services. Private sector services are presently available in selective urban areas, and collectively account for less than 5 per cent of subscriptions. However, private services focus on the business/corporate sector, and offer reliable, high- end services, such as leased lines, ISDN, closed user group and videoconferencing. Cellular services can be further divided into two categories: Global System for Mobile Communications (GSM) and Code Division Multiple Access (CDMA). The GSM sector is dominated by Airtel, Vodfone(Hutch), and Idea Cellular, while the CDMA sector is dominated by Reliance and Tata Indicom. Opening up of international and domestic long distance telephony services are the major growth drivers for cellular industry. Cellular operators get substantial revenue from these services, and compensate them for reduction in tariffs on airtime, which along with rental was the main source of revenue. The reduction in tariffs for airtime, national long distance, international long distance, and handset prices has driven demand.
Dynamics of Mobile Handset Market
180,000 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 1600000 1400000 1200000 1000000 800000 600000 400000 200000 0
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There are five private service operators in each area, and an incumbent state operator. Almost 80% of the cellular subscriber base belongs to the pre-paid segment. The DoT has allowed cellular companies to buy rivals within the same operating circle provided their combined market share did not exceed 67 per cent. Previously, they were only allowed to buy companies outside their circle. Growth Drivers Opening up of international and domestic long distance telephony services are growth drivers in the industry. Cellular operators now get substantial revenue from these services, and compensate them for reduction in tariffs on air time, which along with rental was the main source of revenue. The reduction in tariffs for airtime, national long distance, international long distance, and handset prices has driven demand. The total number of telephone subscribers has reached 241.02 million at the end of August 2007 as compared to 232.87 million in July 2007. The overall teledensity has increased to 21.20% in August 2007 as compared to 20.52% in July 2007.In the wireless segment; 8.31 million subscribers have been added in August 2007 while 8.06 million subscribers were added in July 2007. The total wireless subscribers (GSM, CDMA & WLL(F)) base reaches 201.29 million at the end of August 2007.The wire line segment subscriber base stood at 39.73 million with a decrease of 0.16 million at the end of August 2007. Circle wise wire line subscriber base of service providers is given at following chart..
INTRODUCTION OF Mobile Phone Manufacturers
Nokia Corporation is a Finnish multinational communications corporation, headquartered in Keilaniemi, Espoo, a city neighboring Finland's capital Helsinki established in 1865. Nokia is focused on wireless and wired telecommunications, with 112,262 employees in 120 countries, sales in more than 150 countries and global annual revenue of 51.1 billion Euros and operating profit of 8.0 billion as of 2007. It is the world's largest manufacturer of mobile telephones: its global device market share was about 38% in Q3 of 2008, down from 39% in Q3 2007 and down from 40% sequentially. Nokia produces mobile phones for every major market segment and protocol, including GSM, CDMA, and W-CDMA (UMTS). Nokia's subsidiary Nokia Siemens Networks produces telecommunications network equipments, solutions and services. Nokia has sites for research and development, manufacturing and sales in many continents throughout the world. As of March 2008, Nokia had R&D centers in 10 countries and employed 30,415 people in research and development, representing approximately 27% of Nokia’s total workforce. The Nokia Research Center, founded in 1986, is Nokia's industrial research unit of about 800 researchers, engineers and scientists. It has sites in seven countries: Finland, Denmark, Germany, China, Japan, United Kingdom and United States. Besides its NRCs, in 2001 Nokia founded (and owns) INdT – Nokia Institute of Technology, a R&D institute located in Brazil. Nokia's production facilities are located at Espoo, Oulu and Salo, Finland; Manaus, Brazil; Beijing, Dongguan and Suzhou, China; Fleet, England; Komárom, Hungary; Chennai, India; Reynosa, Mexico; Jucu, Romania and Masan, South Korea. Nokia's Design Department remains in Salo, Finland.Nokia plays a very large role in the economy of Finland: it is by far the largest Finnish company, accounting for about a third of the market capitalization of the Helsinki Stock Exchange (OMX Helsinki) as of 2007; a unique situation for an industrialized country. It is an important employer in Finland and several small companies have grown into large ones as Nokia's subcontractors. Nokia increased Finland's GDP by more than 1.5% in 1999 alone. In 2004 Nokia's share of the Finland's GDP was 3.5% and accounted for almost a quarter of
Finland's exports in 2003. In 2006, Nokia generated revenue that for the first time exceeded the state budget of Finland. Finns have ranked Nokia many times as the best Finnish brand and employer. The Nokia brand, valued at $35.9 billion, is listed as the 5th most valuable global , valued brand in Interbrand/Business Week’s Best Global Brands list of 2008 (1st non-US company). It Business non is the number one brand in Asia (as of 2007) and Europe (as of 2008), the 23rd most admirable company worldwide in Fortune's World's Most Admired Companies list of 2008 (tied with Fortune's Exxon Mobil; 2nd in Network Communications, 5th non-US company), and is the world's 88th ; non US largest company in Fortune Global 500 list of 2008, up from 119 of the previous year. As of une 2008, AMR Research ranks Nokia's global supply chain number two in the world.
Motorola Inc. is an American multinational, Fortune 100, telecommunications company based American, in Schaumburg, Illinois. It is a manufacturer of wireless telephone handsets, also designing and . selling wireless network infrastructure equipment such as cellular transmission base stations and signal amplifiers. Motorola's home and broadcast network products include set-top boxes, digital broadcast video recorders, and network equipment used to enable video broadcasting, computer telephony, , and high-definition television. Its business and government customers consist mainly of wireless . consi voice and broadband systems used to build private networks and public safety communications systems. Motorola creates numerous products for use of the government, public safety officials, business installments, and the general public. These products include cell phones, laptops, computer processors, and radio communication devices. The Motorola RAZR line has sold over 120 million units bringing the company to the number two mobile phone slot in 2005.Enterprise 2005. Mobility Solutions: Headquarters, located in Schaumburg, IL, comprises communications : , offered to government and public safety sectors and enterprise mobility business. Motorola develops analog and digital two way radio, voice and data communications products and two-way pro systems, mobile computing, advanced data capture, wireless infrastructure and RFID solutions to
customers worldwide. Home & Networks Mobility: Headquarters, located in Horsham, PA, : produces end-to-end systems that facilitate uninterrupted access to digital entertainment, end information and communications services via wired and wireless mediums. Motorola develops digital video system solutions, interactive set top devices, voice and data modems for digital set-top subscriber line and cable networks, broadband access systems for cable and satellite television operators, and also wire line carriers and wireless service providers. Mobile Devices: Headquarters, located in Libertyville, IL, currently the least prosperous arm of the firm, designs IL, wireless handsets, but also licenses much of its intellectual properties. This includes cellular and c wireless systems and as well as integrated applications and Bluetooth accessories. Motorola is ell the No. 2 manufacturer of wireless handsets after global leader Nokia. After a p previous reorganization, its remaining operations have been focused in four business segments: connected home solutions; government and enterprise mobility solutions; mobile devices; and networks. The company generates nearly 60% of sales through the manufacture and sales of wireless manufacture handsets and related products.
Ericsson one of the largest Swedish companies, is a leading provider of telecommunication and data communication systems, and related services covering a range of technologies, including especially mobile networks. Directly and through subsidiaries, it also has a major role in mobile . devices and cable TV and IPTV systems. Founded in 1876 as a telegraph equipment repair shop by Lars Magnus Ericsson, it was incorporated on August 18, 1918. Headquartered in Kista, , Stockholm Municipality, since 2003, LM Ericsson is considered part of the so-called "Wireless , so Valley". Since the mid 1990s, Ericsson's extensive presence in Stockholm helped transform the ". capital into one of Europe's hubs of information technology (IT) research. Ericsson has offices and operations in more than 150 countries, with more than 20000 staff in Sweden, and significant presences also in, for example, China, the UK, the USA, Finland, Ireland, and Brazil. In the early 20th century, Ericsson dominated the world market for manual telephone exchanges but was late to introduce automatic equipment. The world's largest ever manual telephone exchange, serving 60,000 lines, was installed by Ericsson in Moscow in 1916. Throughout the 1990s, Ericsson held a 35-40% market share of installed cellular telephone systems. Like most of 40%
telecommunications crash in the early 2000s, and had to fire tens of thousands of staff worldwide to in an attempt to manage the financial situation, returning to profit by the mid 2000s.In 2001 the handsets division formed of a joint venture with Sony called Sony Ericsson. LM Ericsson is now Ericsson a major provider of handset cores and an infrastructure supplier for all major wireless technologies. It has played an important global role in modernizing existing copper lines to offer broadband services and has actively grown a new line of business in the professional services area. On 18 February 2008, it was announced that Aastra Technologies would acquire the nologies enterprise PBX division of Ericsson Ericsson.
Siemens AG is Europe's largest engineering conglomerate and the largest electronics company in the world. Siemens'' international headquarters are located in Berlin and Munich Germany. The Munich, company is a conglomerate of three main business sectors: Industry, Energy and Healthcare with a total of 15 Divisions. Worldwide, Siemens and its subsidiaries employ approximately Worldwide, 480,000 people in nearly 190 countries and reported global revenue of $ 110.82 billion as of 2008. Siemens AG is listed on the Frankfurt Stock Exchange, and has been listed on the New , York Stock Exchange since March 12 2001.Siemens was founded by Werner von Siemens on 12, 12 October 1847. Based on the telegraph, his invention used a needle to point to the sequence of . letters, instead of using Morse code The company – then called Telegraphen code. Telegraphen-Bauanstalt von Siemens & Halske – opened its first workshop on October 12.In 1848, the company built the first .In long-distance telegraph line in Europe; 500 km from Berlin to Frankfurt am Main. In 1850 the distance Main founder's younger brother, Sir William Siemens (born Carl Wilhelm Siemens), started to Siemens represent the company in London. In the 1850s, the company was involved in building long London. distance telegraph networks in Russia. In 1855, a company branch headed by another brother, . Carl von Siemens, opened in St Petersburg, Russia. In 1867, Siemens completed the monumental Petersburg, Indo-European (Calcutta to London) telegraph line. In 1881, a Siemens AC Alternator driven by a watermill was used to power the world's first electric street lighting in the town of Godalming, United Kingdom. The company continued to grow and diversified into electric trains and light bulbs. In 1890, the founder retired and left the company to his brother Carl and sons Arnold and . retired
Wilhelm. Siemens & Halske (S&H) was incorporated in 1897. In 1907 Siemens had 34,324 employees and was the second second-largest company in Germany by number of employees. In 1919, S&H and two other companies jointly formed the Osram light bulb company. A Japanese subsidiary was established in 1923.During the 1920s and 1930s, S&H started to manufacture idiary 1923.During radios, television sets, and electron microscopes Siemens' six operational business areas before microscopes.Siemens' 2008 were: Automation & Control ( (Automation & Drives, Industrial Solutions & Services, Services Siemens Building Technologies), Power (Power Generation, Power Transmission & Technologies Power Distribution), Transportation (Transportation Systems, Siemens VDO), Medical (Siemens VDO Medical Solutions), Information & Communication (Siemens Communications Siemens IT ), (Siemens Communications, Solutions and Services), and Lighting (OSRAM GmbH, OSRAM Sylvania ), ( Sylvania).The company is also active in Financing (Siemens Financial Services), Real Estate (Siemens Real Estate), Home Siemens Services), Appliances (BSH), Water Technologies (SWT), Computers (Fujitsu Siemens Computers and (Fujitsu Computers), Business Services.
LG Group is a large South Korean conglomerate , that produces electronics mobile phones, and electronics, petrochemical products and operates subsidiaries like LG Electronics, LG Telecom, Zenith , Electronics and LG Chem in over 80 countries. LG Group sponsors the LG Cup Go Tournament.LG Group founder Koo In Hwoi established Lak Hui Chemical Industrial Corp. in 1947.In 1952, Lak Hui (currently LG Chem) became the first Korean company to enter the plastics industry. As the company expanded its plastics business, it established GoldStar Co., company Ltd., (currently LG Electronics Inc.) in 1958.In 1959, Goldstar produced Korea's first radio. Many consumer electronics were sold under the brand name GoldStar, while some other household products (not available outside South Korea) were sold under the brand name of available Lucky. The Lucky brand was famous for its hygiene products line such as soaps and Hi-Ti laundry detergents, but most associated with its Lucky and Perioe toothpaste.In 1995, it was toothpaste renamed "LG", the abbreviation of "Lucky GoldStar". More recently, the company associates its
tagline "Life's Good", with the letters LG. According to Interbrand and BusinessWeek, Samsung’s brand value ranked 43rd (USD 5.2billion) in 2000, 42nd (USD 6.4 billion) in 2001, 34th (USD 8.3 billion) in 2002, 25th (USD 10.8 billion) in 2003, 21st (USD 12.5 billion) in 2004, and 20th (14.9 billion) in 2005 among top global companies
. The Samsung Group is South Korea largest chaebol and the world's largest conglomerate by Korea's revenue, leading several industries in the world. It is composed of numerous international businesses, all united under the Samsung brand, including Samsung Electronics the world's , Electronics, largest electronics company, Samsung Heavy Industries one of the world's largest shipbuilders Industries, d's and Samsung Engineering & Construction a major global construction company. These three Construction, multinationals form the core of Samsung Group and reflect its name - the meaning of the Korean word Samsung is "tristar" or "t "three stars".The Samsung brand is the best known South Korean brand in the world and in 2005, Samsung overtook Japanese rival Sony as the world's leading consumer electronics brand and became part of the top twenty global brands overall. It is also the leader in many domestic industries, such as the financial, chemical, retail and entertainment industries. Samsung has sixteen products that have dominated the world’s market share, including: DRAM, color cathode ray tube TVs (CPT, CDT), SRAM, TFT , cathode-ray TFT-LCD glass substrates, TFT-LCD, STN-LCD, tuner, CDMA handset, color television (CTV), monitor, flash memory, LCD, LCD Driver IC (LDI), PDP module, PCB for handheld (mobile phone plates), Flame Retardant module, ABS, and Dimethyl Formamide (DMF). According to Interbrand and Business Week Samsung’s Week, brand value ranked 43rd (USD 5.2billion) in 2000, 42nd (USD 6.4 billion) in 2001, 34th (USD 8.3 billion) in 2002, 25th (USD 10.8 billion) in 2003, 21st (USD 12.5 billion) in 2004, and 20th (14.9 billion) in 2005 among top global companies. companies Product Characteristics: In the cell phone industry, the products and services are highly standardized. In the past, the products differentiated in cell phones and services. Today, with more technology enhancement, the products in different companies are essentially similar. Since this is a cell phone industry,
there is a maximum amount of products and services that consumers can choose from. Yet, consumers do not want to purchase cell phones at a higher price value unless the companies are able to make it attractive. Camera cell phones: The key factor consumers consider when choosing a device is their context. Phones with the ability to take images, both still and video have captured about 40% of the wireless phone market. But despite the product’s popularity, customer users want higher resolution, the ability to use storage media, and many other state of the art features found in modern digital camera. With consumers’ desire for high resolution digital camera, the market for camera and camcorder phones will peak in 2007.Nowadays camera phones are the rage in markets all around the globe because consumers are attracted to the convenience of having an imaging device with them at all times. The business model is focused on users displaying and sending images wirelessly. As advanced 3G networks are implemented in the coming years, the advance higher resolution camera phones will likewise become very popular. There are three critical pieces to this type of phone: 1. The device (phone) 2. The application (picture taking) 3. The network (3G) The introduction of 3G network will accelerate the adoption of the camera phones. Why? Because the timing is right for digital imaging to become part of the cell phone industry, especially in new cell phones and new networks. Camera phones would not work with older phones and networks, because there are small monochrome displays and little storage, and the speed to transmit a digital photo would take a long time. Just as important is improvement to camera phones, new advanced third generation wireless network (3G) will enable the cost effective transmission of these higher-resolution images. Purpose of migrating to 3G is to enable users to spend more time using their multimedia phones every day by enjoying the world and keeping in touch with their friends and families. Here are characteristics of the 3G network on cell phones: The 3G networks are able to transmit at 380 K bps. There is also improvements on the image to 330,000 pixels Internal storage grew so consumers could store a dozen photos on their phone
This means better pictures, better experience, and consumers bought them – by tens of millions of cell phones around the world. Consumers do not have to pay extra for the camera features; they will get the camera as part of the phone. Although camera phones are great to take pictures, consumers use them as wallpaper and screensavers instead of printing. This is how consumers change the way they interact with digital technology. Today, camera phones are so popular that every cell phone company or provider offers them. Features on all cell phones are similar. If consumers were to just buy cell phones for their features, consumers can find a similar phone in other companies as well. This makes the industry very competitive which drives companies to lower product cost and service cost in order to bring large volumes of consumers. Although camera phones are very popular, one factor that makes consumers dissatisfied is the picture quality, which is limited when these images are printed or sent: Vast majority of users use high-resolution camera in addition to their camera phones. 3% of consumers use their phone as their only digital camera Most consumers take fewer than 10 pictures with their camera phone each month Fewer than 2% of consumers say they will consider a camera phone with less than one mega pixel 50% of consumers say they would only consider a handset with more than two mega pixels of resolution. Downloadable Application: Cell phones are programmed allowing users to download applications onto their cell phones. Such common downloads are of games such as JAMDAT Bowling. Most applications are large, between 40 KB to 550KB, and with applications ever growing-in-size and very-more-appealing, better multimedia and larger memory in the phones, and better network capabilities for economic high-speed data access. Video (Streaming): Video Streaming is when videos are sent over a wireless network to a cell phone. The Video streaming with 3G helps in ways that is usable and cost effective by the consumer, and economical viable for the wireless operator.
Internet Access via PC Card: Wireless PC Cards in smaller form will be produced for handhelds. IT wants access through the internet at the fastest data rates possible, and at the lowest costs. Operator wireless also wants to keep consumers happy with internet access which will maximize revenues and reduce their costs. Here are some new cell phone models currently in market today: Motorola RAZR: Motorola Razr is the latest fashion cell phone of 2006. It is a flip clamshell design, quad band cellular plus standard features in most GSM cell phones. LG the V: The new product is a smart clamshell design with small but useable QWERTY keyboard, high resolution camera, MP3 player, and a mini SD (songs). Scale Economies: There are two types of economies of scale pertaining to the cell phone industry. They are the internal and external economies. i. Internal Internal economies of scale are economies made within a company as a result of mass production. So as a company produces more and more products and services to consumers, the average cost begins to fall so the companies should focus on the following six factors: A technical economy: when the companies use its entire means to generate revenues and increase profitability. This includes spending a large amount of money on capital to start the company. Managerial economies: when the company splits up managerial duties to meet specific company goals and values. This in turns helps to complete specific tasks and improve the company to better service consumers. Financial economies: cell phone companies borrow lots of money to purchase capital in order to create products for consumers. Marketing economies: where cell phone companies spends a lot of money to advertise their products and services on television and in newspapers everyday to reach consumers across nations. Companies resorts to marketing in hope of attracting more consumers to try their products and to generate higher profits and revenue.
Commercial economies: cell phone companies order their products and supplies in bulk at a lower rate rather than buying them separately. Research and development economies: the cell phone companies are continuously developing new and advance technology cell phone to be in pace with the competitive market.
The external economies are made outside of the company as a result of its location. Most cell phone companies have a corporate headquarter that concentrates on the following to keep track of the company’s progress. Cell phone companies have licensed franchises that operate to sell products and services to consumers. They have a network that connects them to manufacturers, service carriers, and main corporate officer that is the backbone of the stores and products it sells. The cell phone companies works closely with service carriers to provide phone service such as clear phone calls, not lost calls, and good receptions. The companies work and communicate directly with manufacturers reputable for the new phones enhancement, upgrades, and features. Learning & Experience Effects: The major complaint found in the cell phone industry was cost and services. So to improve their service, the company has increased the training for customer service employees to 10 days a year, and introduced a new plan to address common complaints; also tied executive compensation to customer satisfaction. There are more options that buyers can choose from, whether it be the actual phone itself or the service plan. Companies are now giving customers a series of contract terms and costs as well as giving them a sample of how their first bill will look like so they understand the contract before signing it. Service carrier is a very important factor to maintaining consumer satisfaction and to keep consumers. With that, companies are all pushing new data services for business customers to increase new revenue sources. Capital Requirements: The cell phone companies require large capital to enter and remain in the market successfully. Companies require capital to create products that attracts consumers and for total assets and
revenues to enlist other products and services that are featured with cell phones. Cell phone companies work with manufacturers to create new technological and innovative cell phones in the market today to attract consumers. A valuable capital in the cell phone industry is the consumers because revenue and profits depends on them who buy the companies’ cell phones. New products are introduced continually, technology evolves on a daily basis, and customers are eager to become part of the future of a wireless society. This makes the market very competitive and large companies that have big economies of scale provide a highly automated service to a large number of customers, and have the financial resources required in building and maintaining a large network of communications devices. Smaller companies can also compete, but only in small markets or by provide specialty services. In addition, companies spend millions of dollars on developing brand name recognition, and promoting and marketing their products. Companies also want to spread their companies out through franchises, because more offices mean more visibility in drawing consumers in to buying their products and services. Industry Profitability: The cell phone industry will remain a competitive market and will increase continuously with a total of 1,200 wireless companies with total annual revenue of $100 billion. The profitability of individual companies is driven mainly by their ability to develop new products, providing better service, making their products affordable for consumers. Profitability of companies is achieved also by taking advantage of marketing their products, have access to capital, and by inquiring the expertise to improve the cell phones. The profitability of the cell phone industry is dependent on the volume of consumer they can attract. The profitability of companies has increased drastically since 2002 and will continue to increase as new cell phones are improved. Since 2004, the financial markets of cell phone companies seem to increase fast because of the new technologies and services that companies are offering consumers, and at the same time they compete for customers. Although there are complaints and dissatisfaction from consumers, cell phone and the service along with it has become a necessity which companies use as an advantage by charging consumers higher price. As in any industry, there are declining and inclining profits. The cell phone has experienced a slight decline; worldwide shipments of cell phones rose 26 percent in the first quarter of 2006 compared with the same period last year. Currently today, the global market continues to thrive on consumers replacing older phones with new purchases, a
total of 226.7 million mobile phones. For individual company profitability, Nokia is listed at the top, retaining a third of the global market share and enjoying a 39.6 percent growth. Motorola also had a high increase of 60.6 gains and is controlling 20.3 percent of the market. Samsung has shipped over 29 million phones and is in third place with a decrease in sale to only 18.4 percent growth. LG came fourth for market share with 6.9 percent and experienced an operating loss for the quarter due to marketing expenses and fewer sales. The cell phone industry looks strong and competitive between the companies and service they provide. Even more as new options are in place, such as, allowing consumers to keep their numbers while switching carriers. Five Forces of Competition When compared to the general environment, the industry environment often has a direct effect on the firm’s strategic actions. Our textbook discusses Porter’s five forces of competition in most industries. However, in analyzing the Cell Phone Industry, not only do we cover the five forces model which includes (1) the threat of new entry, (2) the power of suppliers, (3) the power of buyers, (4) product/service substitutes, and (5) the intensity of rivalry among competitors, we are adding the sixth force of another stakeholder group – the Unions. 1. Threat of New Entrants The cell phone industry is highly concentrated. Following the recent Sprint/Nextel merger, only four firms actually control 80% of the current market. Since start-up costs for a cell phone service provider are extremely high, the threat of new entrants is low. A great sum of money must be invested to attain the economies of scale, and it is difficult to enter the market with existing firms already operating on cost and differentiation strategies. 2. Bargaining Power of Suppliers Cell phone operators provide such high volume orders that suppliers have been cautious not to temper with the relationship and ended up being in a low bargaining position. Already dragging with the specter of gadget gridlock, carriers continuously seek for ever more features in the handsets and threaten to increase the pressure on suppliers with the “reverse e-auction.”
T-Mobile is the first carrier, who has staged an online bidding war, asking six vendors to bid against each other online for a contract to build cell phones for one handset segment. 3. Bargaining Power of Buyers In August 2005, the Florida PIRG Education Fund Report revealed how cell phone early termination fees hurt customers. Their research showed that half of cell phone users would switch carriers if they did not have to pay contract termination penalties. Feeling locked in a cell, most consumers resent the $150 - $240 penalties per phone, should they consider changing to another carrier for lower rate or better service.The report also indicated that $4.6 billion have been paid in the last 3 years due to penalties – that’s $2.5 billion in actual penalties and $2.1 billion in lost services from consumers who either cannot afford the penalty or didn’t think it’s worth paying. This clearly suggests that buyers/consumers have little bargaining power in this end. 4. Threat of Substitute Products/Services A lot of active research and development into mobile phone technology has been underway: Operators are upgrading their networks to advanced wireless and other third-generation (3G) services, many new entertainment and communications services are becoming available, including new broadcast-type operations on spectrum formerly occupied by Television channels 52-69. With downlink speeds close to that of wire line DSL, mobile service can now provide music download and streaming video sharing. Services such as MobiTV or Juice Caster are some applications that leverage these new networks. Development in miniaturized hard disks and flash drives to solve the storage space issue are already surfacing, therefore opening the possibility for phones to become portable music libraries and players similar to an iPod. Some cell phones already have GPS positioning. In the future, this may be coupled with accelerometer positioning, to cover underground or indoor positioning. This would lead to maps and help finding group members nearby, or identifying strangers. When coupled with camera phone, the GPS technology may also allow users to take a picture or snap the exact location and angle at which the picture was taken.
5. Intensity of Rivalry among Competitors The landscape of mobile wireless industry has changed much in recent years Sprint and Nextel Communications Inc. together created a leading carrier augmented by a global IP network that offers consumer, business, and government customers’ broadband wireless and integrated communications services A little earlier, AT&T Inc., formed by SBC Communications’ purchase of AT&T Corp. created the then largest wireless phone company. Cingular Wireless won that distinction in 2005 after its takeover of AT&T Wireless for $41 billion. Mergers lead to concentrated pricing power in the hands of fewer companies. When one phone company owns another phone company, the total savings to the company through the “synergies” are substantial, but the potential for competition is undermined
Competitive Position of Major Mobile Phone Manufacturers
3B 60 B 70 B Market Capital 80 B 90 B
The vertical axis represents the total amount of Net Income earned by each mobile phone maker. The horizontal axis represents the market capital each company has worldwide. The circles represent the total assets each mobile phone maker has. The figure represents financial position of each company.
Market Capital Employees Qtrly Rev
Ericsson 56.82B 56,055 15.80% 20.78B 45.75% 20.21% 3.33B 2.09 17.14 1.78 2.77
Motorola 56.34B 69,000 22.70% 38.70B 31.48% 11.23% 4.59B 1.797 12.54 1.68 1.44
Industry 179.33M 260 15.90% 81.02M 37.72% 1.69% 729.70K 0.07 27.85 1.57 1.99
94.06B 58,874 28.50% 46.23B 34.34% 13.24% 4.80B 1.12 20.54
Growth (yoy) Revenue (ttm) Gross (ttm) Oper (ttm) Net (ttm) EPS (ttm) P/E (ttm) PEG (5 yr Income Margins Margin
expected) P/S (ttm)
Source: http://finance.yahoo.com/q/co?s=NOK Among the four major cell phone makers, Nokia has the most market capital and net income, which makes Nokia the largest cell phone maker in the world. Motorola comes into second in net income. Nokia has the best Price/Earning ratio, which means Nokia’s stock has the relative high earning per share. Ericsson has the highest gross margin. Gross margin (gross profit / sales revenue) is a measure of a company's efficiency in turning raw materials into income. In other words, Ericsson is most efficiency in turning raw materials into income.
INTRODUCTION OF CELLULAR SERVICE COMPANIES
“Bharti Airtel” formerly known as Bharti Tele-Ventures Limited (BTVL) is among India's largest mobile phone and Fixed Network operators. With more than 60 million subscriptions as of 13th February 2008. It offers its mobile services under the Airtel brand and is headed by Sunil Mittal. The company also provides telephone services and Internet access over DSL in 14 circles. The company complements its mobile, broadband & telephone services with national and international long distance services. The company also has a submarine cable landing station at Chennai, which connects the submarine cable connecting Chennai and Singapore. The company provides reliable end-to-end data and enterprise services to the corporate customers by leveraging its nationwide fiber optic backbone, last mile connectivity in fixed-line and mobile circles, VSATs, ISP and international bandwidth access through the gateways and landing station. Airtel is the largest cellular service provider in India in terms of number of subscribers. Bharti Airtel owns the Airtel brand and provides the following services under the brand name Airtel: Mobile Services (using GSM Technology), Broadband & Telephone Services (Fixed line, Internet Connectivity(DSL) and Leased Line), Long Distance Services and Enterprise Services (Telecommunications Consulting for corporate).Leading international telecommunication companies such as Vodafone and SingTel held partial stakes in Bharti Airtel.In April 2006 Bharti Global Limited was awarded a telecommunications license in Jersey in the Channel Islands by the local telecommunications regulator the JCRA. In September 2006 the Office of Utility Regulation in Guernsey awarded Guernsey Airtel with a mobile telecommunications license. In May 2007 Jersey Airtel and Guernsey Airtel announced the launch of a relationship with Vodafone for island mobile subscribers. In July 2007, Bharti Airtel signed an MoU with Nokia-Siemens for a 900 million dollar expansion of its mobile and fixed network. In August
2007, the company announced it will be launching a customized version of Google search engine that will provide an 'array of services' to its broadband customers.
As India's leading GSM Mobile Services operator, IDEA Cellular has licenses to operate in 11 circles. With a customer base of over 17 million, IDEA Cellular has operations in Delhi,Maharashtra, Goa, Gujarat, Andhra Pradesh, Madhya Pradesh, Chattisgarh, Uttaranchal, Haryana, UP-West, Himachal Pradesh and Kerala. IDEA Cellular's footprint currently covers approximately 45% of India's population and over 50% of the potential telecom-market.As a leader in Value Added Services, Innovation is central to IDEA's VAS Factory. It is the first cellular company to launch music messaging with 'Cellular Jockey', 'Background Tones', 'Group Talk', a voice portal with 'Say IDEA' and a complete suite of Mobile Email Services.Idea Cellular is a wireless telephony company operating in various states in India. It initially started in 1995 as a join venture between the Tatas, Aditya Birla Group and AT&T by merging Tata Cellular and Birla AT&T Communications.Initially having a very limited footprint in the GSM arena, the acquisition of Escotel in 2004 gave Idea a truly pan-India presence covering Maharashtra (excluding Mumbai), Goa, Gujarat, Andhra Pradesh, Madhya Pradesh, Chattisgarh, Uttar Pradesh (East and West), Haryana, Kerala, Rajasthan and Delhi (inclusive of NCR).The company has its retail outlets under the "Idea n' U" banner. The company has also been the first to offer flexible tarrif plans for prepaid customers. It also offers GPRS services in urban areas.Initially the Birlas, the Tatas and AT&T Wireless each held one-third equity in the company. But following AT&T Wireless' merger with Cingular Wireless in 2004, Cingular decided to sell its 32.9% stake in Idea. This stake was bought by both the Tatas and Birlas at 16.45% each.Tata's foray into the cellular market with its own subsidiary, Tata Indicom, a CDMA-based mobile provider, cropped differences between the Tatas and the Birlas. This dual holding by the Tatas also became a major reason for the delay in Idea being granted a license to operate in Mumbai. This was because as per Department of Telecom (DOT) license norms, one promoter could not have more than 10% stake in two companies operating in the same circle and Tata Indicom was already operating in Mumbai when Idea filed for its license.The Birlas thus approached the DOT and sought its intervention, and the Tatas replied by saying that they would
exit Idea but only for a good price. On April 10, 2006, the Aditya Birla Group announced its acquisition of the 48.18% stake held by the Tatas at Rs. 40.51 a share amounting to Rs. 44.06 billion. While 15% of the 48.14% stake was acquired by Aditya Birla Nuvo, a company incharge of the Birlas' new business initiatives, the remaining stake was acquired by Birla TMT holdings Private Ltd., an AV Birla family owned company.Currently, Birla Group holds 98.3% of the total shares of the company.Idea has successfully launched 3 more new circles (states) in India viz. Rajasthan, Himachal Pradesh and UP (East) to make itself a pan-India player. Recently, Idea got licenses to operate in Mumbai & Bihar. They are awaiting the spectrum from DoT.
The Late Dhirubhai Ambani dreamt of a digital India — an India where the common man would have access to affordable means of information and communication. Dhirubhai, who singlehandedly built India’s largest private sector company virtually from scratch, had stated as early as 1999: “Make the tools of information and communication available to people at an affordable cost. They will overcome the handicaps of illiteracy and lack of mobility.” t was with this belief in mind that Reliance Communications (formerly Reliance Infocomm) started laying 60,000 route kilometres of a pan-India fibre optic backbone. This backbone was commissioned on 28 December 2002, the auspicious occasion of Dhirubhai’s 70th birthday, though sadly after his unexpected demise on 6 July 2002. Reliance Communications has a reliable, high-capacity, integrated (both wireless and wireline) and convergent (voice, data and video) digital network. It is capable of delivering a range of services spanning the entire infocomm (information and communication) value chain, including infrastructure and services — for enterprises as well as individuals, applications, and consulting. Today, Reliance Communications is revolutionising the way India communicates and networks, truly bringing about a new way of life.Reliance Communications (formerly Reliance Infocomm), along with Reliance Telecom and Flag Telecom, is part of Reliance Communications Ventures (RCoVL). According to National Stock
Exchange data, Anil Ambani controls 66.75 per cent of the company, which accounts for more than 1.36 billion shares of the company.Reliance Infocomm is an Indian telecommunications company. It is the flagship company of the Reliance-Anil Dhirubhai Ambani Group, comprising of power (Reliance Energy), financial services (Reliance Capital) and telecom initiatives of the Reliance ADA Group. Reliance Infocomm is currently managed by Anil Dhirubhai Ambani.It uses CDMA2000 1x technology.Reliance Infocomm was founded by Dhirubhai Ambani. Between 1999 to 2002 Reliance Infocomm built 60,000 km of fibre optic backbone in India. This network was commissioned on December 28, 2002.At present, Reliance Telecom's GSM cellular services are available in 340 towns within its eight-circle footprint. Reliance's CDMA services are available in 19 states and cover about 65% of the country, state wise. Reliance Infocomm also offered for the first time in India, mobile data services through its R-World mobile portal. This portal leverages the data capability of the CDMA 1X network.
Tata Teleservices Limited (TTSL) is part of the Tata Group of Companies, an Indian Conglomerate. It runs the brand name Tata Indicom in India in various telecom circles of India. The company forms part of the Tata Group's prescence in the Telecommunication Industry in India, along with Tata Teleservices (Maharashtra) Limited (TTML) and VSNL.TTSL was incorporated in 1995 and was the first company to offer CDMA Mobile services in India, specifically in the state of Andhra Pradesh. In December 2002, the company acquired the erstwhile Hughes Telecom (India) Ltd. which was renamed Tata Teleservices (Maharashtra) Limited.In September 2007, Tata Indicom launched the Talk World plan, an International Long Distance Plan. Tata is the direct competitor with Reliance, both CDMA operators in India. The company provides unified telecommunication solutions including mobile, fixed wireless, fixed line and broadband. Other competitors are Vodafone, Airtel, Aircel, Idea, MTNL, BSNL providing GSM
based mobile telephony.The company was first in India to provide free intra network calling within city limits. They launched a unique scheme providing lifetime rental free connectivity on its mobile and fixed wireless for a one time charge.Tata Teleservices is part of the INR Rs. 119000 Crore (US$ 29 billion) Tata Group, that has over 87 companies, over 250,000 employees and more than 2.8 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 20 circles that includes Andhra Pradesh, Chennai, 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 West Bengal. Having pioneered the CDMA 3G1x 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 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 21 million customers in over 4000 towns. With an ambitious rollout planboth within existing circles and across new circles, Tata Teleservices offers worldclass technology and user-friendly services in 20 circles.
Bharat Sanchar Nigam Limited (known as BSNL, India Communications Corporation Limited) is a public sector communications company in India. It is the India's largest telecommunication company with 25.14% market share as on December 31, 2007. Its headquarters are at Bharat Sanchar Bhawan, Harish Chandra Mathur Lane, Janpath, New Delhi. It has the status of Miniratna - a status assigned to reputed Public Sector companies in India.BSNL is India's oldest and largest Communication Service Provider (CSP). Currently BSNL has a customer base of 68.5 million (Basic & Mobile telephony). It has footprints throughout India except for the metropolitan cities of Mumbai and New Delhi which are managed by MTNL. As on December 31, 2007 BSNL commanded a customer base of 31.7 million Wireline, 4.1 million CDMA-WLL and 32.7 million GSM Mobile subscribers. BSNL's earnings for the Financial Year ending March 31, 2007 stood at INR 397.15b (US$ 9.67 b) with net profit of INR 78.06b (US$ 1.90 billion). Today, BSNL is India's largest Telco and one of the largest Public Sector Undertaking with estimated market value of $ 100 Billion. The company is planning an IPO with in 6 months to offload 10 % to public.Bharat Sanchar Nigam Ltd. formed in October, 2000, is World's 7th largest Telecommunications Company providing comprehensive range of telecom services in India: Wireline, CDMA mobile, GSM Mobile, Internet, Broadband, Carrier service, MPLSVPN, VSAT, VoIP services, IN Services etc. Within a span of five years it has become one of the largest public sector unit in India. BSNL has installed Quality Telecom Network in the country and now focusing on improving it, expanding the network, introducing new telecom services with ICT applications in villages and wining customer's confidence. Today, it has about
47.3 million line basic telephone capacity, 4 million WLL capacity, 20.1 Million GSM Capacity, more than 37382 fixed exchanges, 18000 BTS, 287 Satellite Stations, 480196 Rkm of OFC Cable, 63730 Rkm of Microwave Network connecting 602 Districts, 7330 cities/towns and 5.5 Lakhs villages.BSNL is the only service provider, making focused efforts and planned initiatives to bridge the Rural-Urban Digital Divide ICT sector. In fact there is no telecom operator in the country to beat its reach with its wide network giving services in every nook & corner of country and operates across India except Delhi & Mumbai. Whether it is inaccessible areas of Siachen glacier and North-eastern region of the country. BSNL serves its customers with its wide bouquet of telecom services.BSNL is numero uno operator of India in all services in its license area. The company offers vide ranging & most transparent tariff schemes designed to suite every customer.BSNL cellular service, CellOne, has more than 17.8 million cellular customers, garnering 24 percent of all mobile users as its subscribers. That means that almost every fourth mobile user in the country has a BSNL connection. In basic services, BSNL is miles ahead of its rivals, with 35.1 million Basic Phone subscribers i.e. 85 per cent share of the subscriber base and 92 percent share in revenue terms. BSNL has more than 2.5 million WLL subscribers and 2.5 million Internet Customers who access Internet through various modes viz. Dial-up, Leased Line, DIAS, Account Less Internet(CLI). BSNL has been adjudged as the NUMBER ONE ISP in the country. BSNL has set up a world class multi-gigabit, multi-protocol convergent IP infrastructure that provides convergent services like voice, data and video through the same Backbone and Broadband Access Network. At present there are 0.6 million DataOne broadband customers. The company has vast experience in Planning, Installation, network integration and Maintenance of Switching & Transmission Networks and also has a world class ISO 9000 certified Telecom Training Institute.Scaling new heights of success, the present turnover of BSNL is more than Rs.351,820 million (US $ 8 billion) with net profit to the tune of Rs.99,390 million (US $ 2.26 billion) for last financial year. The infrastructure asset on telephone alone is worth about Rs.630,000 million (US $ 14.37 billion). BSNL plans to expand its customer base from present 47 millions lines to 125 million lines by December 2007 and infrastructure investment plan to the tune of Rs. 733 crores (US$ 16.67 million) in the next three years.The turnover, nationwide coverage, reach, comprehensive range of telecom services and the desire to excel has made BSNL the No. 1 Telecom Company of India.
Market Share of the telecom Company in India
Definition of Research
The word research is derived from the Latin word meaning to know. It is a systematic and a replicable process, which identifies and defines problems, within specified boundaries. It employs well-designed method to collect the data and analyses the results. It disseminates the findings to contribute to generalize able knowledge. The characteristics of research presented below will be examined in greater details later are: Systematic problem solving which identifies variables and tests relationships between them, Collecting, organizing and evaluating data. Logical, so procedures can be duplicated or understood by others Empirical, so decisions are based on data collected Reductive, so it investigates a small sample which can be generalized to a larger population Replicable, so others may test the findings by repeating it. Discovering new facts or verify and test old facts. Developing new scientific tools, concepts and theories, this would facilitate to take decision. For the proper analysis of data simple statistical techniques such as percentage were use. It helps in making more generalization from the data available. The data which will be collected from a sample of population was assumed to be representing entire population was interest. Demographic factors like age, income and educational background was used for the classification purpose.
TYPES & TECHNIQUES
The study conducted will be a conclusive descriptive statistical study; the researcher will come to the decision which is precise and rational. The study is conclusive because after doing the study
the researcher will comes to a conclusion regarding the position of the brand and factors responsible for purchase of handset as well as service in the minds of respondents of different groups. The study is statistical because throughout the study all the similar samples are selected and group together. All the similar responses are taken together as one and their percentages are calculated by using various statistical software to reach a final conclusion.Thus, this, conclusive descriptive statistical study is the best study for this purpose as it provides the necessary information which is utilize to arrive at a concrete decision.
TOOLS TO BE USED
To know the response I will use the questionnaire method in sample survey. If one wishes to find what people think or know, the logical procedure is to ask them. This has lead marketing researchers to use the questionnaire technique for collecting data more than any other method. In this method questionnaire were distributed to the respondents and they were asked to answer the questions in the questionnaire. The questionnaire, were non-disguised because the questionnaire were constructed so that the objective is clear to the respondent. The respondents were aware of the objective. They knew why they asked to fill the questionnaire. After collecting the response the data will be uploaded to the computer for further analysis.
LIMITATIONS OF THE STUDY
The research will be conducted in a limited area. The internet information can be irrelevant. Time will be a major constraint. The respondent will be limited so cannot be treated as a whole population. The respondent may be biased. Due to language problem it is possible that the respondents are not be able to understand the questionnaire and can cause misleading results.
Books: Philip Kotler, ‘marketing management’ prentice Hall of India Pvt. Ltd. New Dehli. C. R. Kothari ‘Research methodology’, vishwa publication, New Delhi. Saxena Rajan ‘marketing management’ Tata Mcgraw-hill publicating Co. Ltd. New Delhi. H. V. Verma ‘marketing of services’ Global business press, New Delhi. Business today magazine of February issue,2008.
www.trai.gov.in http://www.tataindicom.com/t-aboutus-ttsl-organization.aspx http://www.rcom.co.in/webapp/Communications/rcom/Aboutus/aboutus_home.jsp http://www.ideacellular.com/IDEA.portal?_nfpb=true&_pageLabel=IDEA_Page_AboutIdea http://www.bsnl.co.in/about.htm http://www.bsnl.co.in/service/tariff_excel_pre.htm http://18.104.22.168/utility/tariff.htm http://www.trai.gov.in/trai/upload/PressReleases/15/pr16jan06.pdf http:// www.wikipedia
www.totalnetwork.co.in . http://www.rcom.co.in/webapp/Communications/rcom/index.jsp
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