KIRLOSKAR INSTITUTE OF ADVANCED

MANAGEMENT & STUDIES

Report on Competing in Indian Telecom Market:

The Tata DoCoMo Experience

Submitted by:
Ashish Kapoor (13)
Pawan Kumar (46)
Sweta Bardhan (89)
Tushar Yemdey (91)

Q 4. Given the changes taking place as well as expected to happen in the foreseeable
future in the Indian telecom industry how should the company develop its strategy
to increase its market share as well as profitability?
Ans: a) Acquisition: In India there were many players around fifteen at the national
level and around twelve or thirteen in each circle. For a company to increase its market
share it would need to increase its presence in all of the 22 telecom circles in the country.
For this a company would need to acquire smaller telecom players in the market.
Although the cost of acquisition would be high owing to lack in the telecom policy which
does not have clear M&A guidelines which would facilitate in an easy and effective
acquisition. The guidelines say if a telecom company is acquiring another telecom which
owns spectrum allotted by the government (at Rs 1,658 for all India, a huge discount to
the market price), the acquirer has to pay the price difference to the government. This
(all-India) spectrum is now worth at least Rs 10,000 crore. This will push up the cost of
acquisition but since all the players have a limited spectrum quota expansion in various
regions is only possible through acquiring smaller players.
b) ARPU: (Average revenue per user) defined as the total revenue divided by the
number of subscribers (Total number of active SIM cards). In mobile telephony, ARPU
includes the revenues billed to the customer each month for usage. In order to increase
the ARPU the total revenue can be increase by offering better VAS services along with
the offering of 4G services to the customers encouraging them to consume more. Another
way would be to decrease total number of inactive SIM (on which no transaction has
taking place over the past 6 months).
c) MNP: (Mobile number portability) allows to switch the mobile phone operator
from one mobile phone network provider to another mobile phone provider and keep
your existing mobile phone number. This also applies that if you are crossing states
across the country (moving Telecom Circles). You can switch your mobile phone operator
or stay with the same operator in another state. This will prevent you from incurring
roaming charges. The process is termed MNP or mobile number portability. It's quick and
very easy to do - follow the instructions above for full details on how to transfer (port)
your mobile phone number to a new mobile phone network provider.

d) VAS: (Value Added services) In current scenario instead of basic SMS packs
and data usage packs, people are using Whatsapp, IMO and other social networking
applications so the company should come up with other VAS.
According to our group these are the few points the company can build its strategies.

Q 5. Mr. Anil Sardana is aware of joint venture lifecycle and its implication to both
partners. How should he manage the partnership so that TTSL can attain
sustainable long term advantage in this high technology driven industry?
Ans: Docomo has always been a pioneer in the market of mobile communication owing
to its expertise in developing new technology and services. TTSL should take advantage
of this fact and try to acquire technological expertise from Docomo. Apart from this new
services and technology like 4G should be provided in various regions where the
company has operating license. The company should try to acquire 4G operating license
in various circles to get a first mover advantage and potentially exploit a new segment of
customers who demand better quality of services.
NTT expertise in VAS should be exploited and TTSL should learn how to develop and
customize new VAS for regional markets. Having differentiated value added services for
different region and different segment would allow TTSL to cater to customers in a better
manner.
TTSL should also try to acquire infrastructural expertise from NTT so as to increase its
penetration in rural and urban markets using superior infrastructures.
Although the average life cycle of joint venture is six to seven years, Anil Sardana should
try to make the most out of this period while maintaining harmoniest relationship with
NTT Docomo as in other countries where it was present it did not engage predatory
practices and maintained an amicable mutually beneficial relationship with its partners.
As the joint venture was equity and technical based TTSL has access to Docomos world
class development team which allows it to explore new technologies which is not even
there in the Indian market. TTSL should learn from NTT Docomo to develop better
services and practices across all its verticals to ensure customer satisfaction and
profitability.

Q6. What are the options for the NTT Docomo to dominate the joint venture in
future?
Ans: NTT Docomo should invest in taking over small players to increase its spectrum
quota and access to various circles and increase it customer base with the conditions that
the ownership of the newly acquired spectrum remains in the name of NTT Docomo.
Docomo should try to acquire the 8% share which is with C. Shivasankaran who is
investor in this joint venture, to increase its stake from 26% to 34%.- Docomo can try to
convince Mr. Shivasankaran to sell them his stake at a premium.
Docomo should convince TTSL to sell off some of its stake to Docomo. As it has also
mention in the case that TTSL might sell off some of its stake in the venture until it
become a minor investor we can say Docomo has a good chance of dominating a venture
after buying out Tatas TTSL stake.