IDEA Cellular

Project on

IDEA CELLULAR
MARKETING STRATEGY
 IDEA Cellular

A Project

Report On

A Study Of Consumer Durable Marketing Strategy For

"Idea Cellular"

With Special References to

Sanjeev Bhardwaj

Under The Guidance Of

Prof. Sanjeev Bhardwaj

Submitted To

Sanjeev Bhardwaj

University Of C.C.S Univ.

Roll No.- 9174526

Submitted By

Ruchi Goel
 IDEA Cellular

STUDENT DECLARATION
 IDEA Cellular

I hereby declare that this project report titled The Study

of Consumer Durable Market with Special Reference to

PSN District in Idea Cellular is executed as per

the course requirement for the post graduate

program in management. I have not been submitted

by me or any other person to any other university or

institution for degree or diploma. Its my own work.

Ruchi Goel
 IDEA Cellular

ACKNOWLEDGEMENT
 IDEA Cellular

I express my sincere gratitude to my industry guide

channel development manager of Tata Communication

Ltd, for his able guidance, continuous support and

cooperation throughout my project, without which the

present work would not have been possible. I would

also like to thank the entire team of Idea Cellular,

for the constant support and help in the successful

completion of my project. Also, I am thankful to my

faculty guide Sanjeev Bhardwaj of my institute, for

his/her continued guidance and invaluable

encouragement.
 IDEA Cellular

EXECUTIVE SUMMERY
 IDEA Cellular

IDEA Cellular is a leading GSM mobile services operator in India with over 53
million subscribers, under brand IDEA.
IDEA Cellular is a publicly listed company, having listed on the Bombay Stock
Exchange (BSE) and the National Stock Exchange (NSE) in March2007. A
frontrunner in introducing revolutionary tariff plans, IDEA Cellular has the distinction
of offering the most customer friendly and competitive Pre Paid offerings, for the first
time in India.
Ideas mission-
We will delight our customers while meeting their individual communication needs
anytime, anywhere. Ideas mission tells us what they are and what they are doing at
the present. Their values are Integrity, commitment, passion, seamlessness and speed
are imperfect. Their values are in perfect sync with their mission because these values
are of paramount importance for the successful achievement of their mission. Ideas
SWOT shows us that their parent company (Aditya Birla), existing footprint and that
obsession for innovation are their major strengths while their concentration on a few
circles, their late entry into many new circles and high debt-equity ratio can be cited
as their weaknesses. Falling regulations, growing rural market and 3G services are the
factors that bring new opportunities for Idea. New entrants (ever increasing number of
 IDEA Cellular

telecom operators in India) and new technology (can be an opportunity as well) pose
threats for Idea. External environment analysis shows that competitive rivalry is very
high, bargaining power of customers is high, bargaining power of suppliers is low,
threat from new entrants and substitutes are also high. This clearly reveals the fact
that Idea is in an extremely competitiveenvironment. E.g. the ongoing tariff war in the
highly competitive Indian telecom market has been taking new shape with every
passing day and it has reached new heights now. Operators have been announcing
new promotional schemes including reduction in tariffs for voice call, slashing
roaming charges and many more such lucrative offers. Recently floated idea of per
second call rates has further aggravated competition among telecom players with
every operator seemingly imitating others for retaining their market share. Telecom
sector is all set to see more severe competition. New entrants, falling tariff rates, new
technology and new regulations (mobile number portability) are going to cause big
changes to this sector. In such a situation the way forward for a player like Idea, who
is not the market leader, is not to initiate a price war but to concentrate on new
differentiated products and services. They have come out with many firsts in India
and that is what Idea is remembered for.
 IDEA Cellular

INTRODUCTION

IDEA Cellular is a publicly listed company, having listed on the Bombay Stock
Exchange (BSE and the National Stock Exchange (NSE) in March 2007.Idea Cellular
is a leading GSM mobile service operator with pan India licenses. With a customer
base of over 36 million in 15 service areas, operations are soon expected to start in
Orissa and Tamil Nadu-the first steps in providing pan India services covering over
90% of India's telephony potential.
A frontrunner in introducing revolutionary tariff plans, IDEA Cellular has the
distinction of offering the most customer friendly and competitive Pre Paid offerings,
for the first time in India in an increasingly segmented market.
Customer Service and Innovation are the drivers of this Cellular Brand. A brand
known for many firsts, Idea was the first to launch GPRS and EDGE in the country.

Idea has received international recognition for its path-breaking innovations when it
 IDEA Cellular

won the GSM Association Award for "Best Billing and Customer Care Solution" for
2 consecutive years. IDEA Cellular is part of the Aditya Birla Group, India's first
truly multinational corporation.
The group operates in 25 countries, and is anchored by over 100,000 employees
belonging to 25 nationalities. The Group has been adjudged 'The Best Employer in
India and among the Top 20 in Asia' by the Hewitt-Economic Times and Wall Street
Journal Study 2007.
Idea Cellular (Idea) is one of the leading providers of wireless communication
services in India. The company is part of the Aditya Birla Group. It provides wireless
and long distance voice and internet services to consumer and enterprise markets.
IDEA Cellular is a publicly listed company, having listed on the Bombay Stock
Exchange (BSE) and the National Stock Exchange(NSE) in March 2007.IDEA
Cellular is a leading GSM mobile services operator in India with over 53 million
subscribers, under brand IDEA. It is a pan India integrated GSM operator covering
the entire telephony landscape of the country. The company also has a presence in
telecom infrastructure market through a stake in Indus Towers and other subsidiaries.
The company primarily operates in India. It is headquartered in Mumbai, India. The
company recorded revenues of INR101, 484.1 million ($2,214.4 million) during the
financial year ended March 2009 (FY2009), an increase of 50.6% over 2008. The
operating profit of the company was INR14, 314.3 million($312.3 million) in
FY2009, an increase of 2.8% over 2008. Its net profit was INR9, 008.7
million($196.6 million) in FY2009, a decrease of 13.6% over 2008.A frontrunner in
introducing revolutionary tariff plans, IDEA Cellular has the distinction of offering
the most customer friendly and competitive Pre Paid offerings, for the first time in
India.
Mission- We will delight our customers while meeting their individual
communication needs anytime, anywhere.With a mission of delighting its customers
while meeting their individual communication needsanytime, anywhere, IDEA offers
 IDEA Cellular

seamless coverage to roaming customers traveling to any partof the country, as well
as to international traveling customers across over 200 countries. IDEA Cellular has
partnership with over 400 operators to ensure that customers are always connected
while on the move, within the country or other parts of the world.

ABOUT US
IDEA Cellular
IDEA Cellular is a publicly listed company, having listed on BSE & NSE in March
2007. It is the 3rd largest mobile services operator in India with wireless revenue
market share at 15 %
in Q1 FY 2013, and
subscriber base of
over 117 million. Idea
has consistently
stayed ahead of the
industry in VLR
reporting, and has the
3rd highest base of
active subscribers.
Idea is a pan-India
integrated GSM
operator and has its
own NLD and ILD operations, and ISP license.
 IDEA Cellular

With traffic in excess of a billion minutes a day, Idea ranks among the Top 10 country
operators in the world. Idea operates across all 22 service areas with 2G services and
3G services spread in over 3,000 towns and 10,000 villages.
Idea has a network of over 97,000 2G and 3G cell sites covering the entire length and
breadth of the country. Idea has nearly 4,000 Service Centres servicing Idea
subscribers across the country, including over 650 special Experience Zones for 3G
promotion. Ideas service delivery platform is ISO 9001:2008 certified, making it the
only operator in the country to have this standard certification for all 22 service areas
and the corporate office.
Ideas thought leadership on Mobile Number Portability (MNP) has enabled it to stay
as the top gainer with highest net gain, with over 3.7 million mobile users preferring
Idea network.
Ideas strong growth in the Indian telephony market comes from its deep penetration
in non-urban & rural markets. It has the highest share of rural subscribers as a
percentage of total subscribers, amongst other GSM players. In fact, 2 out of every 3
new Idea subscribers come from rural/ semi-urban India.
Idea won the Best Brand Campaign at the esteemed World Communication Awards
2011. It also recently won 3 Awards at the ET Telecom Awards 2012, in the
following categories Customer Experience Enhancement, Excellence in Marketing
and Innovative products, respectively.
It is also the winner of The Emerging Company of the Year Award at The Economic
Times Corporate Excellence Awards 2009. IDEA Cellular also received the
prestigious Avaya GlobalConnect Award for being the Most Customer Responsive
Company in the Telecom sector in the year 2010. The company has received several
other national and international recognitions for its path-breaking innovations in
mobile telephony products & services. It won the GSM Association Award for Best
Billing and Customer Care Solution for 2 consecutive years. It was awarded Mobile
 IDEA Cellular

Operator of the Year Award India for 2007 and 2008 at the Annual Asian Mobile
News Awards.
IDEA Cellular is an Aditya Birla Group Company, Indias first truly multinational
corporation. The group operates in 33 countries, and is anchored by more than
132,000 employees belonging to 42 nationalities.
 IDEA Cellular

COMPANY PROFILE

IDEA Cellular Ltd is a leading GSM mobile services operator in India with
over 72 million subscribers, under brand IDEA. The company is a pan India
integrated GSM operator covering the entire telephony landscape of the country, and
has NLD and ILD operations. They offer affordable and world-class mobile services
to varied segments of mobile users. The company is an Aditya Birla Group
Company. They offers basic voice and short message service (SMS) services to
high-end value added and general packet radio service (GPRS) services, such as
Blackberry, Datacard, Mobile TV and Games. Their subsidiaries include Swinder
Singh Satara and Co Ltd, Aditya Birla Telecom Ltd, Idea Cellular Services Ltd, Idea
Cellular Infrastructure Services Ltd, Idea Cellular Towers Infrastructure Ltd and
Carlos Towers Ltd. IDEA Cellular Ltd was incorporated in the year 1995 with the
 IDEA Cellular

name Birla Communications Ltd. The company obtained licenses for providing
GSM-based services in the Gujarat and Maharashtra Circles following the original
GSM license bidding process. In the year 1996, the company changed the name
from Birla Communication Ltd to Birla AT&T Communications Ltd following joint
venture between Grasim Industries and AT&T Corporation. In the year 1997, they
commenced operations in the Gujarat and Maharashtra Circles. In the year 2000, the
company merged with Tata Cellular Ltd, thereby acquired original license for the
Andhra Pradesh Circle. In the year 2001, they acquired the RPG Cellular Ltd and
consequently, they acquired the license for the Madhya Pradesh (including
Chattisgarh) Circle. Also, they obtained the license for providing GSM-based
services in the Delhi Circle following the fourth operator GSM license bidding
process. The name of the company was changed from Birla Communications Ltd to
Birla Tata AT&T Ltd. In the year 2002, the name of the company was further
changed to Idea Cellular Ltd and also, they launched the 'Idea' brand name. They
commenced commercial operation in Delhi circle. In June 3, 2002, they acquired
Swinder Singh Satara & Company Ltd through a share purchase agreement. In the
year 2004, the company acquired Escotel Mobile Communications Ltd
(subsequently renamed as Idea Mobile Communications Limited). They
commercially launched EDGE services 2005 and became the first operator in India
to do so. In the year 2005, the company won an Award for the 'Bill Flash' service at
GSM Association Awards in Barcelona, Spain. They sponsored the International
Indian Film Academy Awards. In the year 2006, the company became a part of the
Aditya Birla Group subsequent to the TATA Group transferring their entire
shareholding in the company to the Aditya Birla Group. They received Letter of
Intent from the DoT for a new UAS License for the Mumbai Circle. Also, they
received Letter of Intent from the DoT for a new UAS License for the Bihar Circle
through Aditya Birla Telecom Ltd. During the year 2006-07, the company
commenced National Long Distance service to carry part of the Company's own
 IDEA Cellular

traffic. They launched commercial mobile services in the service areas of Rajasthan,
Uttar Pradesh (East) and Himachal Pradesh. They made Initial Public Offering and
raised Rs 25,000 million. They won an award for the 'CARE' service in the 'Best
Billing or Customer Care Solution' at the GSM Association Awards in Barcelona,
Spain. During the year, the company entered into a ten years business transformation
pact to integrate, innovate, and transform its business processes and IT infrastructure
with International Business Machines (IBM). They signed USD 500 million contract
with Nokia Siemens Networks to expand and strengthen the Company's network.
Also, they singed a USD 343 million contract for GSM expansion with Ericsson in
the Maharashtra, Gujarat, Rajasthan, Madhya Pradesh and Himachal Pradesh service
areas. In June 2006, Escorts Telecommunications Ltd became the subsidiary of the
company and subsequently was renamed as Idea Telecommunications Ltd. In
February 2007, they acquired 10,000,000 equity shares of Rs. 10 each of Aditya
Birla Telecom Ltd, a company holding License to operate in the telecom service
area of Bihar, for a purchase consideration of Rs 100 million. During the year 2007-
08, the company expanded their network from 4432 cities and towns to 13308 cities
and towns. They formed three new subsidiaries namely, Idea Cellular Services Ltd,
Idea Cellular Infrastructure Services Ltd and Idea Cellular Tower Infrastructure Ltd.
The main purpose of Idea Cellular Services Ltd is to provide manpower services to
Idea Cellular and Idea Cellular Infrastructure Services Ltd & Idea Cellular Tower
Infrastructure Ltd are meant for hiving off Idea's passive infrastructure network. In
December 2007, the company in association with Bharti Airtel and Vodafone Essar
formed a joint venture, namely Indus Tower to provide passive infrastructure
services in India to all operators on a non discretionary basis. In February 2008, the
company received the Unified Access Services Licences for the telecom service
areas of Punjab, Karnataka, Tamilnadu including Chennai, North East, West Bengal,
Kolkatta, Jammu & Kashmir, Orissa and Assam. During the year 2008-09, the
company acquired 40.8% stake in Spice Communications Ltd (Spice), having
 IDEA Cellular

operations in Punjab and Karnataka service areas, from MCorp Global

Communications Pvt Ltd, the erstwhile promoters of Spice. They launched services
in Mumbai, Orissa, Tamil Nadu (including Chennai), Jammu & Kashmir, Kolkata
and West Bengal. In addition, Aditya Birla Telecom Ltd, a wholly owned
subsidiary, launched operations in Bihar (including Jharkhand) service area. During
the year, the company made a tie-up with Indian Oil Corporation, the largest
petroleum company in India, to use their petrol pumps and gas agencies for branding
and distribution of Idea SIM Cards and Recharge Vouchers. They were the first
operator in India to launch Nokia Life Tools in association with Nokia. They
launched 'International Airtime Transfer', a unique VAS service, whereby NRI
community can directly recharge the prepaid mobiles of Idea subscribers in India
through several international merchants and the web in Gulf, the USA and UK.
During the year, the company launched NetSetter Data Cards and Blackberry
solutions to cater to their data-savy consumer segments. As per the scheme of
arrangement, the company de-merged their passive infrastructure assets in the
service areas of Andhra Pradesh, Delhi, Gujarat, Uttar Pradesh (both East & West
including Uttarakhand), Haryana, Kerala, Rajasthan and Mumbai to Idea Cellular
Towers Infrastructure Ltd, a wholly owned subsidiary, with an appointed date of
January 1, 2009. During the year 2009-10, the company expanded their pan-India
presence through service launches in Orissa, Tamil Nadu, Jammu & Kashmir,
Kolkata, West Bengal, Assam and North East service areas, thereby making it a
nationwide service provider. As one of Idea's new VAS activities, the company
launched 'Buddy Recharge' - a unique peer-to-peer talk time transfer product. They
also launched Oongli Cricket during the IPL season. During the year, the company
launched a standardized self care portal 'CARE' which gives information to the
customer on products / tariffs and information of their account such as billed
amount, last recharge, last calls, unbilled amount, etc. They were the first operator to
launch 'Pre Tones', which is an innovative VAS service which allows the user to
 IDEA Cellular

listen to the caller tones of his / her own choice while making an outgoing call
instead of listening to the respondent's caller tone. As per the scheme of
arrangement, the company telecom operations of the Bihar service area along with
certain assets and liabilities of Aditya Birla Telecom Ltd, a wholly owned subsidiary
was de-merged and transferred to the company with effect from March 1, 2010.
Spice Communications Ltd which had operations in the Punjab and Karnataka
service areas, and licenses for National and International Long Distance operations
was amalgamated with the company with effect from March 1, 2010. Also, Carlos
Towers Ltd became a subsidiary company pursuant to the amalgamation of Spice
Communications Ltd with the company. In April 2010, the company received a
License for
providing
pan India
Internet
Services
(ISP
License). In
the 3G
Spectrum
auction, the
company
emerged as
a winner in 11 Service Areas viz. Maharashtra, Gujarat, Andhra Pradesh, Kerala,
Punjab, Haryana, Uttar Pradesh (E), Uttar Pradesh (W), Madhya Pradesh, Himachal
Pradesh and Jammu & Kashmir, at a total cost of Rs 5,768.59 crore. During the year
under review, the company became a pan India operator following the roll out of
services in the remaining service areas of Orissa, Tamilnadu (including Chennai),
Jammu & Kashmir, West Bengal, Kolkata, North East and Assam. In January 20,
 IDEA Cellular

2011, the Company launched mobile number portability (MNP), an invite to all
Indian mobile customers to change their wireless operator, while retaining their
mobile number. In March, 2011 Company launched 3G services in 9 out of these 11
service areas. The Company also entered into bilateral roaming arrangement for the
service areas of Mumbai, Bihar, Karnataka, Delhi, Kolkata and Tamil Nadu
(including Chennai), with leading quality operators, enabling it to offer 3G services
in 15 service areas. The company is in the process of launching 3G services in
Jammu and Kashmir service area. The 3G spectrum for Punjab service area has not
been earmarked by DoT to the Company for commercial usage as yet, and hence
Company has not been able to launch 3G service there until now. The company is
now installing 3G cell sites to capture the future wireless broadband data market.
 IDEA Cellular

HISTORY
COMPANY HISTORY - IDEA CELLULAR LTD.
 IDEA Cellular

We were incorporated as Birla Communications Limited on March 14, 1995

and granted a certificate of commencement of business on August 11, 1995. Our
registered office was in Mumbai, Maharashtra. Our name was changed to Birla AT&T
Communications Limited on May 30, 1996 following the execution of a joint venture
agreement dated December 5, 1995 between AT&T Corporation and Grasim
Industries Limited pursuant to which the Aditya Birla Group held 51% of our Equity
Share capital and AWS Group held 49% of our Equity Share capital. Our registered
office was transferred from Industry House, 1st Floor, 159 Church Gate Reclamation,
Mumbai 400 020, Maharashtra to Suman Tower, Plot No. 18, Sector 11, Gandhinagar
382011 Gujarat on October 22, 1996. With effect from January 1, 2001 following our
merger with Tata Cellular Limited the joint venture agreement between AT&T
Corporation and Grasim Industries Limited dated December 5, 1995 was replaced by
a shareholders agreement dated December 15, 2000 entered into between Grasim
Industries Limited on behalf of the Aditya Birla Group, Tata Industries Limited on
 IDEA Cellular

behalf of the Tata Group and AT&T Wireless Services Inc. on behalf of the AWS
Group following which our name was changed to Birla Tata AT&T Limited on
November 6, 2001. Consequent to the introduction of the Idea brand, our name was
changed to Idea Cellular Limited on May 1, 2002. The AWS Group exited from the
Company on September 28, 2005 by selling 371,780,740 Equity Shares of the
Company, which constituted 50% of the holding of AT&T Cellular Private Limited in
our equity share capital, to ABNL and by transferring the remaining 371,780,750
Equity Shares to Tata Industries Limited. The Tata Group ceased to be a shareholder
of the Company on June 20, 2006 when Tata Industries Limited and Apex
Investments (Mauritius) Holding Private Limited (formerly known as AT&T Cellular
Private Limited) sold all their shares in the Company to the Aditya Birla Group.

On October 26, 2006, P5 Asia Investments (Mauritius) Limited (P5 Asia) acquired
14.60% of our Equity Share capital. Under a Governance and Exit Rights Agreement
dated October 23, 2006 between P5 Asia, ABNL and Birla TMT, so long as an initial
public offering has not occurred and P5 Asia holds no less than 10% of our Equity
Shares, ABNL and Birla TMT are required to procure that (a) our Company and its
Subsidiaries shall not take or pursue any of the following actions without P5 Asias
prior consent (such consent to be obtained in a board and/or shareholders resolution)
including in respect of (i) any merger with, acquisition of, or amalgamation or
consolidation with another company or business; (ii) assuming or permitting to exist
any borrowings or indebtedness in the nature of borrowings if the amount of all such
borrowings of our Company and its Subsidiaries would exceed Rs. 6,800 million; (iii)
entering into a new line of business; (iv) increasing our authorized or issued share
capital; or (v) entering into a joint venture and (b) our Company makes available to
P5 Asia certain financial information relating to our Company and its Subsidiaries
such as monthly management accounts, quarterly unconsolidated balance sheet and
profit and loss account and the annual audited consolidated balance sheets and profit
 IDEA Cellular

and loss accounts.

P5 Asia also has a right to appoint one director to our Board so long as it holds at least
10% of our total issued and outstanding Equity Shares. Mr. Biswajit Subramanian has
been appointed to our Board by P5 Asia pursuant to the exercise of the above right. In
addition, any IPO of our Equity Shares requires P5 Asias written consent, and,
further, in any such IPO, P5 Asia has the right to offer for sale such number of Equity
Shares representing up to 10% of the total Equity Shares which are held by it. By its
letters dated December 2, 2006 to ABNL and Birla TMT, P5 Asia has given its
written consent for the Issue and has confirmed that it does not intend to offer for sale
any of the Equity Shares held by it in such Issue.

We, either directly or through our Subsidiaries, provide mobile services in the Andhra
Pradesh, Delhi, Gujarat, Haryana, Kerala, Madhiya Pradesh, Maharashtra and Uttar
Pradesh (West) Circles, and have recently launched services and as such are in the
process of fully rolling-out our network in the Uttar Pradesh (East), Rajasthan and
Himachal Pradesh Circles pursuant to licenses issued by the DoT.
 IDEA Cellular

MAJOR EVENTS
The chronology of key events of the Company from incorporation is set out below:

1995: Incorporated as Birla Communications Limited Obtained licenses for providing

GSM-based services in the Gujarat and Maharashtra Circles following the original
GSM license bidding process
1996: Changed name to Birla AT&T Communications Limited following joint
venture between Grasim Industries and AT&T Corporation
1997: Commenced operations in the Gujarat and Maharashtra Circles
1999: Migrated to revenues share license fee regime under New Telecommunications
Policy (NTP)

2000: Merged with Tata Cellular Limited, thereby acquiring original license for the
Andhra Pradesh Circle
 IDEA Cellular

2001: Acquired RPG Cellular Limited and consequently the license for the Madhya
Pradesh (including Chattisgarh) Circle Changed name to Birla Tata AT&T Limited

2001: Obtained license for providing GSM-based services in the Delhi Circle
following the fourth operator GSM license bidding process
2002: Changed name to Idea Cellular Limited and launched Idea brand name .
Commenced commercial operations in Delhi Circle . Reached the one million
subscriber mark

2003: Reached the two million subscriber mark

2004: Completed debt restructuring for the then existing debt facilities and additional
funding for the Delhi Circle. Acquired Escotel Mobile Communications Limited
(subsequently renamed as Idea Mobile Communications Limited) Reached the four
million subscriber mark First operator in India to commercially launch EDGE
services

2005: -Reached the five million subscriber mark -Turned profit positive
-Won an award for the Bill Flash service at the GSM Association Awards in
Barcelona, Spain Sponsored the International Indian Film Academy Awards
-Sponsored the International Indian Film Academy Awards

2006: -Became part of the Aditya Birla Group subsequent to the TATA Group
transferring its entire shareholding in the Company to the Aditya Birla Group
-Acquired Escorts Telecommunications Limited (subsequently renamed as Idea
Telecommunications Limited) -Restructuring of debt -Launch of the New Circles
-Reached the 10 million subscriber mark -Received Letter of Intent from the DoT for
a new UAS License for the Mumbai Circle.
 IDEA Cellular

-Received Letter of Intent from the DoT for a new UAS License for the Bihar
Circle through Aditya Birla Telecom Limited. ABNL, the parent of Aditya
-Birla Telecom Limited, pursuant to a letter dated November 22, 2006, agreed to
transfer its entire shareholding in Aditya Birla Telecom Limited to the Company for
the consideration of Rs. 100 million.

2007:- Won an award for the "CARE" service in the "Best Billing or Customer Care
Solution" at the GSM Association Awards in Barcelona, Spain -Initial Public Offering
aggregating to Rs. 28,187 million and Listing of Equity Shares on the Bombay Stock
Exchange and the National Stock Exchange -Merger of seven subsidiaries with Idea
Cellular Limited -Reached the twenty million subscriber mark

2008- Idea Cellular Ltd has informed that the Board of Directors of the Company at
its meeting held on October 20, 2008, inter alia, has appointed the following persons
as Directors on the Board of the Company:
1. Mr. R C Bhargava - Independent Director (Additional Director)

2. Mr. P Murari - Independent Director - (Additional Director)

3. Dr. Hans Wijayasuriya - Non Executive Director (Nominee of TM International

Bhd).

-Idea acquired 9 licences for Punjab, Karnataka, Tamil Nadu & Chennai, West
Bengal, Orissa, Kolkata, Assam, North East and Jammu & Kashmir -Acquired Spice
Communications with the operating circles of Punjab and Karnataka
-Launched services in Mumbai metro in the largest single metro city launch, ever
-Launched services in Bihar
 IDEA Cellular

2009 -Subscriber base as on December 31, 2009: 57,611,872

-Idea becomes a pan-India operator -Emerging Company of the Year - fastest
growing mobile operator in the worlds fastest growing telecom market
- IDEA wins prestigious Golden Peacock Award 2008 for My Gang
- IDEA and Babajob launch a unique wap portal for job seekers in the informal sector
- Firstsource & Idea announce a five-year Outsourcing Partnership.

2010- Idea Cellular - Auction of 2.1 GHz band (3G Spectrum)

- Idea Cellular ties up with Indian Railways
- Idea cellular wants to provide 3G services in 4 circles out of the 11 that it has, for
the same it has contacted Nokia Siemens Networks for deployment of equipment and
services.
- Nation gives a thumbs up to Idea Oongli Cricket
- IDEA Cellular recognized as the 'Most Customer Responsive Company' in the
Telecom sector by Avaya GlobalConnect
2011 - In order to provide assistance to 700 million mobile users regarding the
services of mobile number portability, idea cellular has started a helpline number just
before the three days of its launch.
- Launch of 'Idea MyCash', Powered by Axis Bank
- Idea introduces special International Roaming offer
- Idea user becomes first Indian to win Panchkoti Mahamoney on KBC
- Idea wins Best Brand Campaign at the prestigious World Communication Awards.

2012- Department of Telecom (DoT) has said that the proposal of Malaysia based
Axiata group to raise 1 per cent stake in Idea cellular to 21 per cent would not create
any fresh security threat for the country.
- Idea Cellular declared as winner in 2G Spectrum auction
- Idea, one of the leading telecom brands in India, continues to buzz in the global
 IDEA Cellular

arena! It has now bagged the prestigious World Communication Awards 2012 (WCA)
under the Best Brand Campaign category at the recently held awards ceremony in
London.

- Idea Cellular launched its new communication campaign, with a catchy jingle which
has immediately gone viral! Idea Rings All India, the new advertisement from Idea,
depicts the diversity, footprint, and seamlessness of our country, and how Ideas
customers benefit from its pan-India network. - Idea wins at the prestigious World
Communication Awards 2012, second year consecutively
- Ivory from Idea most affordable Android 4.0 Smartphone launched in India.
 IDEA Cellular

Inception and growth

In 2000, Tata Cellular was a company providing mobile services in

Andhra Pradesh. When Birla-AT&T brought Maharashtra and
Gujarat to the table, the merger of these two entities was a reality.
Thus Birla-Tata-AT&T, popularly known as Batata, was born and
was later rebranded as IDEA.

Then Idea set sights on RPGs operations in Madhya Pradesh which

was successfully acquired, helping Batata have a million subscribers,
and the licence to be the fourth operator in Delhi was clinched.

In 2004, Idea (the company had by then been rechristened) bought

over the Escorts groups Escotel gaining Haryana, Uttar Pradesh
(West) and Kerala and licences for three more UP (East),
Rajasthan and Himachal Pradesh. By the end of that year, four
million Indians were on the companys network. In 2005, AT&T sold
its investment in Idea, and the year after Tatas also bid good bye to
pursue an independent telecom business. And Idea was left only with
one promoter, the AV Birla group. Rs 2,700 crore adding Punjab and
Karnataka circles. Modis joint venture partner, Telekom Malaysia,
invested Rs 7,000 crore for a 14.99% stake in Idea. Just around then,
Ideas subsidiary, Aditya Birla Telecom sold a 20% stake to US-
based Providence Equity Partners for over Rs 2,0000 crore.
 IDEA Cellular

Holding

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
Telecommunications (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 licence.

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 10 April 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 in-charge of the Birlas'
new business initiatives, the remaining stake was acquired by Birla
 IDEA Cellular

TMT holdings Private Ltd., an AV Birla family-owned company.

Currently, Aditya Birla Group holds 49.1% of the total shares of the
company. Malaysia based Axiata controls a 14.99% stake in the
company.

3G

On 19 May 2010, the 3G spectrum

auction in India ended. Idea paid
5768.59 crores for spectrum in 11
circles. The circles it will provide
3G in are Andhra Pradesh,
Gujarat, Haryana, Himachal
Pradesh, Jammu & Kashmir,
Kerala, Madhya Pradesh, Maharashtra & Goa, Punjab, Uttar Pradesh
(East) and Uttar Pradesh (West).

On 28 March 2011, Idea launched 3G services in Gujarat, Himachal

Pradesh and Madhya Pradesh. The launch cities were Ahmedabad,
Shimla and Indore. This makes Idea the sixth private operator (eighth
overall) to launch its 3G services in the country following Tata
Docomo, Reliance Communications, Airtel, Aircel and Vodafone.
 IDEA Cellular

Idea currently supports up to 21.1 Mbit/s over 2G speeds of 256

kbit/s. However, different handsets support different speeds, from 384
kbit/s, 3.6 Mbit/s, 7.2 Mbit/s or 21.1 Mbit/s. Speeds also depend on
the 3G plan/recharge that users opt for.

The operator announced that IDEA 3G services will be available in

200 towns of 11 3G circles by mid-April 2011, progressively growing
at the rate of ten towns per day to cover 750 towns by mid-2011 and
4000 towns by the end of 2012.

Idea cellular has announced a cut of 70% in the tariff of its 3G

services.

On 23 November 2011 Idea Cellular launched two affordable 3G

handsets in India: Idea 3G Smartphone Blade priced at 7,992 and
Idea 3G Smartphone priced at 5,850. Both handsets are based on
Android 2.2 Froyo.

Idea has also launched a Dual-SIM Android smartphone in India on

June 15, 2012 named as Idea ID-918 at a price point of Rs.5,994
($108 approx.) It features Android v2.3 OS, 3.2-inch capacitive
touchscreen, 3G, Wi-Fi and 3.2 MP rear facing camera.

On 5 March 2013 Idea launched another 3G smartphone called Idea

Zeal 3G which is a Dual SIM phone with 3 Megapixel camera.
 IDEA Cellular

Pan India 3G Coverage

Airtel, Vodafone and Idea have begun collaborating to provide 3G

coverage to their customers pan India. The agreement aims to
provides for these companies to offer 3G services to their customers
in circles where they have not won any spectrum. It is expected that
the 3 companies will be able to provide 3G services in all circles in
India except Orissa where the three have not won any spectrum.

Holding

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
Telecommunications (DOT) license norms, one promoter could not
have more than 10% stake in two companies operating in the same
 IDEA Cellular

circle and Tata Indicom was already operating in Mumbai when Idea
filed for its licence.

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 10 April 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 in-charge of the Birlas'
new business initiatives, the remaining stake was acquired by Birla
TMT holdings Private Ltd., an AV Birla family-owned company.
Currently, Aditya Birla Group holds 49.1% of the total shares of the
company. Malaysia based Axiata controls a 14.99% stake in the
company.

3G

On 19 May 2010, the 3G spectrum auction in India ended. Idea paid

5768.59 crores for spectrum in 11 circles. The circles it will provide
3G in are Andhra Pradesh, Gujarat, Haryana, Himachal Pradesh,
Jammu & Kashmir, Kerala, Madhya Pradesh, Maharashtra & Goa,
Punjab, Uttar Pradesh (East) and Uttar Pradesh (West).

On 28 March 2011, Idea launched 3G services in Gujarat, Himachal

Pradesh and Madhya Pradesh. The launch cities were Ahmedabad,
 IDEA Cellular

Shimla and Indore. This makes Idea the sixth private operator (eighth
overall) to launch its 3G services in the country following Tata
Docomo, Reliance Communications, Airtel, Aircel and Vodafone.

Idea currently supports up to 21.1 Mbit/s over 2G speeds of 256

kbit/s. However, different handsets support different speeds, from 384
kbit/s, 3.6 Mbit/s, 7.2 Mbit/s or 21.1 Mbit/s. Speeds also depend on
the 3G plan/recharge that users opt for.

The operator announced that IDEA 3G services will be available in

200 towns of 11 3G circles by mid-April 2011, progressively growing
at the rate of ten towns per day to cover 750 towns by mid-2011 and
4000 towns by the end of 2012.

Idea cellular has announced a cut of 70% in the tariff of its 3G

services.

On 23 November 2011 Idea Cellular launched two affordable 3G

handsets in India: Idea 3G Smartphone Blade priced at 7,992 and
Idea 3G Smartphone priced at 5,850. Both handsets are based on
Android 2.2 Froyo.

Idea has also launched a Dual-SIM Android smartphone in India on

June 15, 2012 named as Idea ID-918 at a price point of Rs.5,994
($108 approx.) It features Android v2.3 OS, 3.2-inch capacitive
touchscreen, 3G, Wi-Fi and 3.2 MP rear facing camera.
 IDEA Cellular

On 5 March 2013 Idea launched another 3G smartphone called Idea

Zeal 3G which is a Dual SIM phone with 3 Megapixel camera.

Pan India 3G Coverage

Airtel, Vodafone and Idea have begun collaborating to provide 3G

coverage to their customers pan India. The agreement aims to
provides for these companies to offer 3G services to their customers
in circles where they have not won any spectrum. It is expected that
the 3 companies will be able to provide 3G services in all circles in
India except Orissa where the three have not won any spectrum.[10]
 IDEA Cellular

3G Coverage

Ideas 3G service is currently available in the following cities in 14

telecom circles[11]

Telecom No. of
State/Region Cities/Towns
Circle Towns
Akiveedu, Amalapuram,
Choutuppal, Hyderabad,
Jaggaiahpet, Kamareddy,
Machilipatnam, Narsapur,
Andhra Andhra
13 Palakol,
Pradesh Pradesh
Tadepalligudem,Mandapeta,
Vizag, Vizianagaram,
Vijayawada, Yanam, Siddipet,
Warangal,
Gujarat Gujarat 2 Ahmedabad, Daman
Ambala, Bhiwani, Hansi, Hisar,
Jhajjar, Panipat, Rewari,
Rohtak,Adampur, Agroha,
Haryana Haryana 87
Asandh, Asauda, Badli, Baljattan,
Barsi Barwala-His, Bawal, Beri,
Bhadra, Bhalgarh, Bilaspur-Nh8,
 IDEA Cellular

Bolni, Charkhidadri, Dabwali,

Dharuhera, Dighal, Farookhnagar,
Fatehabad, Gannaur, Gar-
Shahjanpur, Garhiharsu,
Gharaunda, Gohana, Hailymandi,
Hodal, Ismaila, Ismailabad,
Jakhoda, Jamalpur-Ggn, Jhansa,
Jind, Julana, Kahanaur, Kaithal,
Kalanaur, Kalka, Kaninakhas,
Karnal, Kassan, Khatiwas,
Kohand, Kori Kalan, Kosli,
Kundli, Kurukshetra, Ladwa,
Madhuban, Mahendragarh,
Manesar, Meham, Naraingarh,
Narnaund, Narwana, Nilokheri,
Nuh, Palwal, Panchgaon, Pinjore,
Pundri, Punhana, Pinangwan,
Radaur, Rania, Rohad,
Samalakha, Sampla, Shahbad,
Silkho, Sirsa, Sohna, Sonipat,
Tatarpur, Tauru, Tohana, Tosham,
Uchana, Uklana, Yamunanagar.
 IDEA Cellular

Himachal Himachal Shimla, Baddi, Mandi,

5
Pradesh Pradesh Sundernagar, Dharamshala
Jammu & Jammu &
0
Kashmir Kashmir
Madhya
4 Indore, Bhopal, Gwalior, Jabalpur
Pradesh
Raipur, Durg & Bhilai, Bilaspur,
Madhya Champa & Jhangir, Korba,
Pradesh Ambikapur, Raigarh,
Chhattisgarh 8
Rajnandgaon, Baloda Bazar,
Dhamtari, Kanker, Jagdalpur,
Bhatapara, Gwalior tilda
Ahmednagar, Akola, Amravati,
Aurangabad, Bhusawal,

Buldhana, Gondia, Jalgaon, Jalna,
Maharashtra Maharashtra 17
Sangli, Kolhapur, Nagpur,
and Goa
Nanded, Nashik, Parbhani, Pune,
Raigad, Solapur,
Goa 3 Ponda, Panaji, Margao
Punjab Punjab 0
Trivandrum, Kochi, Kozhikode,
Kerala Kerala 18
Alleppey, Aluva, Thrissur,
 IDEA Cellular

Irinjalakuda, Punalur, Adoor,

Thalassery, Koyilandy, Cherthala,
Kannur, Kottayam, Malappuram,
Manjeri, Parappanagadi, Munnar,
Kothamangalam, Adimali
Delhi Delhi 2 Delhi, NCR
Kolkata Kolkata 1 Kolkata
Kanpur Kanpur 1 Kanpur
Allahabad, Azamgarh, Ballia,
Uttar
Eastern Uttar Jhansi, Lucknow, Sitapur,
Pradesh 6
Pradesh Faizabad, Raebareli, Gorakhpur,
(East)
Varanasi, Jaunpur
Dehradun, Haridwar, Kotdwara,
Uttar Roorkee, Rudrapur, Haldwani,
Western
Pradesh 12 Nainital, Moradabad, Rampur,
Uttar Pradesh
(West) Gajraula, Joya, Pilkhuwa,
Bilaspur

Ideas 3G service recently launched in Mumbai with 3G network

sharing agreement with Airtel. [Idea has launched 3G services in
Chennai, Delhi & NCR network sharing with Vodafone]
 IDEA Cellular

Subscriber base

Idea's subscriber base as at the end of August 2011 according to the

statistics, is totalling to 98,441,714 or 16.09% (Approx.) of the total
mobile connections in India.

Idea leads all other telecom operators in India in the MNP (Mobile
Number Portability) race, with a net gain of 10,31,380 subscribers as
on 31 August 2011.

Idea also leads all other competitors in having the most active
subscriber base, scoring highly on the VLR statistics. Visitor
Location Register (VLR) is basically a temporary database of the
subscribers who have roamed into the particular area, which it serves.
Each base station in the network is served by exactly one VLR; hence
a subscriber cannot be present in more than one VLR at a time.

Customer service

The company has its retail outlets under the "My Idea" banner. The
company has also been the first to offer flexible tariff plans for
prepaid customers. It also offers GPRS services in urban areas.

Idea Cellular won the GSM Association Award for "Best Billing and
Customer Care Solution" for 2 consecutive years
 IDEA Cellular

IDEA Cellular has been recognized as the 'Most Customer

Responsive Company' in the Telecom sector, at the prestigious Avaya
GlobalConnect Customer Responsiveness Awards 2010

Competitors

Idea competes with 14 other mobile operators throughout India. They

are Aircel, Airtel, BSNL, Loop Mobile, MTNL, MTS, Ping Mobile,
Reliance Communications, S Tel, Tata DoCoMo, Tata Indicom,
Uninor, Videocon, Virgin Mobile and Vodafone.
 IDEA Cellular

IDEAS STRATEGY

Idea is not the market leader in India. They were operating in a few circles earlier and
wereconsidered a regional player. Recently Idea started operations in many states as
part of theirnational roll out plan and they have operations in 2200 towns in India.
Idea has been focusingon value added services (VAS) from its inception which is
reflected in its products. They havealways taken extra care in providing customer
friendly and competitive Pre Paid offerings.Differentiation and innovation can be
associated with Idea right from its beginning. Its clearfrom the following:
Super Power', 2 Minutes Outgoing Free, Lifelong offer, Women'sCard,
'LifetimeIdea'etc are some of the offerings of IDEA.
IDEAisthe 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 EmailServices.
They are also providing GPRS and EDGE services for transferring data.
 IDEA Cellular

The new product introduced by IDEA is the EDGE enabled USB Data Card which
isnamed as 'NetSetter'. Initially NetSetter was offered to post paid customers only.
Nowit is available to prepaid customers in selected circles.
IDEAs partnership with IIFA for 10th Anniversary Awards, its association with
MumbaiIndians in IPL and major sought after programs in television like MTV
Roadies and IdeaStar singerclearly shows its marketing strategies. They always seek
something differentand is always in touch with the youth of the country as they easily
switch to otherservices.
Their ad campaign showing AbhishekBachanin different settings but all clearly
showingtheir corporate social responsibility is great. Their approach is different from
others.
Idea was the first to provide one rupee STD calls in the country. Now when every
oneelse gives per second billing and also 50 paisaper minute, Idea offers at 49
paisaperminute.As far as Idea is concerned it should not start a price war with
Vodafone and other large playersin the industry. This is because Vodafone has a lot
ofmoney with them to suffer the losses andeventually emerge as the winner and it is
almost doing that. Idea can only afford to come outwith some differentiated tariff plan
that does not result in a war with the leaders like Airtel andVodafone. Indian telecom
is already in trouble with the lowest tariff in the world.Differentiation and innovation
is the way forward for Idea in this already bleeding industry,otherwise it will be a
severe bloodshed.
 IDEA Cellular

ANALYSIS THE INTERNAL ENVIRONMENT.

Strength
Attractive existing footprintThe subscriber base under brand Idea, increased from
24million as of end March 2008 to 43.02 million as of end March 2009, a growth of
around79%, taking its national market share to 11%.
Original licensee in seven of the Established Circles, providing incumbency
advantages-Theestablished service areas are Delhi, Andhra Pradesh, Gujarat,
Maharashtra, Haryana, Kerala,Madhya Pradesh and Uttar Pradesh (West). The New
Service Areas are Uttar Pradesh (East),Rajasthan, Himachal Pradesh, Bihar, Mumbai,
Karnataka, Punjab, Orissa, Chennai & TamilNadu, Jammu & Kashmir, Kolkata &
West Bengal, and Assam & North East.
Market leader in two of, and established positions in the remainder of, the
EstablishedCircles.
Strong distribution channels.
High quality network structure.
Innovation always comes out with new products.IDEA is the winner of The
EmergingCompany of the Year Award' at The Economic Times Corporate Excellence
 IDEA Cellular

Awards 2008-09.The company has received several other national and international
recognitions for itspath-breaking innovations inmobile telephony products & services.
It won the GSMAssociation Award for Best Billing and Customer Care Solution for
2 consecutive years. Itwas awarded Mobile Operator of the Year Award -India for
2007 and 2008 at the AnnualAsian Mobile News Awards.
A national brand
Human Resources -The Company through its participative work environment,
skilldevelopment activities, and by championing the values of commitment, integrity,
passion,seamlessness and speed, promotes strong bonding with its employees. During
the year, ithas again undertaken sharing of value creation by granting another tranche
of employeestock options to the eligible employees. The findings of
OrganizationHealth Study (OHS)have been analyzed, which are very encouraging,
and concern areas are being suitablyaddressed. The employee strength onrolls stood at
6,481 as on March 31, 2009.
Attractive growth From 11.8 million subscribers in 2006 to 24 millionin 2008
,then to 43million by end of March 2009 and to 51 by end of 2009 is really a great
performance fromIdea.
Part of the Aditya Birla Group-IDEA Cellular is an Aditya Birla Group Company,
India's firsttruly multinational corporation. The group operates in 25 countries, and is
anchored byover 1, 30,000employees belonging to 30 nationalities. The Group has
been adjudged the6th Top Company for Leaders in Asia Pacific Region' in 2009, in a
survey conducted byHewitt Associates, in partnership with The RBL Group, and
Fortune. The Group has alsobeen rated The Best Employer in India and among the
Top 20 in Asia' by the Hewitt-Economic Times and Wall Street Journal Study
2007.Their promoters-1. Aditya Birla Nuvo Limited2. Grasim Industries Limited3.
Hindalco Industries Limited4. Birla TMT HoldingsPrivate Limited
Weaknesses
 IDEA Cellular

High Debt-Equity Ratio: The Company's Debt-Equity ratio is high as compared to

its peers.Moreover, the Company needs the approval of the lenders under its
financingarrangements before undertaking certain significant corporate actions.
Concentration: The Company revenues are derived solely from providing mobile
servicesand it is dependent on four of the Established Circles for a significant
proportion of itsrevenues.
The Company had accumulated losses amounting to Rs. 19.23 billion and Rs. 17.23
billionfor financial years 2005 and 2006 respectively. The Company may not be in a
position to paydividends until it clears its accumulated losses.
Opportunities
The Indian telecommunication industry is expected to continue to enjoygrowth due
to itslow teledensity and increasing affordability of mobile telephone and services.
The stronggrowth in the sector continues, mainly due to expansion of telecom
networks to rural India,the reduced cost of entry and the reduced cost of handsets.
Low penetration, moreparticularly in rural India, provides opportunity for further
growth, and your company, an
incumbent GSM player with 900 MHz spectrum in about half of India, is well
positioned totap this opportunity.
The contribution of service sector to the GDP has improved significantly from 29%
in 1950to 54% in 2005. This is primarily due to growth of information-technology
and informationtechnology enables services. This will further stimulate the demand
for mobiletelecommunication services.
The regulatory environment is improving and there is greater clarity in existing
rules andprocedures. This would enable operators in improving network quality. Also
raising of fundswill become easier due to greater predictability of operational
environment.
Competition from new technologies is an inherent threat. While the planned 2100
MHzspectrum auction for 3G services will lead to additional cash outflow, it will also
 IDEA Cellular

open newrevenue streams. The Companys strong balance sheet and market standing,
positions it toparticipate effectively in such auction.
Threats
There is intense competitionin the Indian telecommunication industry. Idea Cellular
facessignificant competition from private companies that have a pan-India footprint
such asBharti Airtel, Tata Teleservices and Reliance Communication Ventures. Also
it facescompetition from government owned companies such as BSNL and MTNL.
Alternative technology is evolving very rapidly in the telecommunications industry.
Forinstance, Wi-Fiand Wi-Maxwhich allows for voice data transfer have been
tested andhandsets with such technology maysoon be available in the Indian market.
Moreover,satellite communication voice data transport medium like Skypemay
become a seriouscompetitor in the long distance voice data transfer business.
Porters five forces -Analysis the external environment
1.Competitive rivalry within the Industry a.Principal competitors-
Major competition comes from the industry leader Bharti Airtel. Bharti Airtelhas
24.3%customer market share and 33.8% revenue market share.
Vodafone India has 18.8% customer market share and 20.7% revenue market share.
Idea Cellular has 11.2% subscribers market share and 12.1% revenue market share
BSNL has subscriber share of 12.7% and mere 10.2% of revenue share
Reliance Communications is the worst performerwith 18.9% customer market
shareand pathetic 11.5% revenue market share.(Data mentioned are by end of August
2009)b.Salient strengths -
BSNL has taken full advantage of its wide network and fixed line subscriber
base,and has established itself as the provider with maximum coverage over
thecountry.
While Bharti Airtel has dominated the scene with wide reach, innovativepackages,
catchy ads, and has emerged the leader of the pack.
Reliance Communications also has the wide network to its advantage.
 IDEA Cellular

Tata tele-services banks on the Tata-trust factor to gain foothold in the market.
Vodafone is hitting the Indian market in a huge way. They have large cashreserves
at their disposal to wipe out the competition in future.Weaknesses-
BSNL lines are mostly marred by congestion,bottlenecks and they have failed
tocapture the attention of the customers with attractive offers.
Unstable range and poor customer support are Airtels minuses.
Ambiguous schemes have reduced Reliances popularity.
TATA Indicom has not really been able to fully capitalize its goodwill
factor.c.Their basis for competition-Vodafone and Idea are comparatively new
entrants into the market and hencethe rest of the competition has anadvantage over
them. Also both these brands haveundergone rebranding more than once, and
subsequently have had hiccups with peoplenot realizing the transformation. Giants
like BSNL, Airtel and Reliance have widenetworks in the nooks and crannies of
thecountry, while Idea is still to open account inseveral states.
2.Bargaining Power of Customers
The bargaining power of customers determines how much customers can impose
pressureon margins and volumes. Customers bargaining power is likely to be high
because
Customersuse multiple mobile services these days and hence have a good
knowledge of the pros and cons of each service provider.
Telecommunication industry comprises a number of operators
The industry operates with high fixed costs
The product is not much differentiated and can be replacedby substitutes
Switching to an alternative product is relatively simple and is not related to high
costs
Customershave low margins and are price sensitive
Thecustomer knows about the production costs of the product.
3.Bargaining power of suppliers
 IDEA Cellular

In this industry there is less number of suppliers compared to other industries such as
themanufacturing or textile industry.I.Mobile handset suppliers although there are
many handset suppliers in the country,some service providers have their own handset
manufacturing units operating inthecountry like the Reliance Classic and Tata
Indicom (backward integration). Some of thetelecom companies also have some
collaboration with major handset manufacturerslike Samsung, L.G, and the
Blackberry for their CDMA services.II.Some other suppliers include optical fibre
suppliers and aluminium (for the constructionof towers) suppliers. Here the suppliers
have a limited bargaining power.III.Another important one is the software assistance
where the suppliers have some edge.Major solution providers include TCS, Infosys,
Wipro, etc. While Reliance and Tata havetheir own software services other players
like Vodafone and Idea depend on the abovementioned software service providers.
4.Threat ofnew entrants
Indian telecom sector provides unprecedented opportunities for foreign companies
invarious areas such as 3G, virtual private network, international long distance calls,
valueadded services etc.The market is witnessing M&A activities that are leading to
consolidations in the industry.This trend has assisted companies in expanding their
reach in the Indian telecom market tooffer better services to the customers. The Indian
telecom industry has always attractedforeign investors. In fact, the cumulative FDI
inflow, from August 1991 to March 2007, inthis sector amounted to $3,892.19
million. This makes telecom the third largest sector toattract FDI since the
liberalization.
Although the entry barriers are in place like license and high fixed costs, still we
observemany new players emerging from the state-level to national-level. This
includes Aircel,Virgin, Spice and Unitech.
5.Threat from substitutes
Telecom sector offers a wide range of services in India such as wireline, CDMA,
GSM,internet, VoIP, IP etc.Internet telephone is emerging as a best substitute for the
 IDEA Cellular

mobile telephony because it ischeaper and video can also be added. The increasing
use and penetration of internet in thecountry also augments this. Other facilities on the
internet such as Google talk, YahooMessenger, Rediff Bol are used at an
unprecedented level by the youngsters of this country.These are the major substitutes
for the mobile telephony. Maybe this is on of the reasonswhy the major service
providers also have their presence in internet service.

Strategy

Build
leading-edge
IP-leveraged
solutions
advanced by
our
unmatched
global
infrastructure
and
leadership in emerging markets.
 IDEA Cellular

BOARD OF DIRECTOR

Director Name Designation

Kumar Mangalam Birla Chairman
Himanshu Kapania Managing Director
Biswajit Anna
Non Executive Director
Subramanian
Rajashree Birla Non Executive Director
Rakesh Jain Non Executive Director
Shridhir Sariputta
Alternate Director
Hansa
Hansa Wijayasuriya Alternate Director
Juan Villalonga
Nominee
Navarro
R C Bhargava Independent Director
Arun Thiagarajan Independent Director
Mohan Gyani Independent Director
P Murari Independent Director
Tarjani Vakil Independent Director
G P Gupta Independent Director
Sanjeev Aga Director
Pankaj Kapdeo Company Secretary
 IDEA Cellular

ANALYSIS OF THE
MARKETING STRATEGY OF IDEA CELLULAR

COMPANY PROFILE:
Idea is the 3rd largest mobile services operator in India, in revenue terms, and
recorded a subscriber base of over 100 million or 17.28%(Approx.) of the total mobile
connections in India as of 31st January 2012. As on 31st January 2012, the company
is leading the MNP (Mobile Number Portability) race, with a net gain of close to 11
million subscribers. The company also leads all other competitors in having the most
active subscriber base, scoring highly on the VLR statistics. Ideas Revenue for the
year 2011 stands at $3.43 Billion. Currently Idea is the 6th largest mobile operator by
 IDEA Cellular

subscriber base. Idea cellular acquired 3G licenses in 11 telecom circles for Rs.
5768.59 Cr during the spectrum auction in May 2010.3G services have already been
launched in 7 circles out of the 11 circles that Idea has acquired licenses. Idea Cellular
is planning to be a world-class internet service provider (ISP) in India. It is working to
establish state of the art infrastructure.

CURRENT SITUATION ANALYSIS:

Porters five forces:
 IDEA Cellular

SWOT ANALYSIS:

CURRENT CUSTOMER SEGMENTATION

Idea Cellular currently segments its customer profile into 2 basic groups:
1) Prepaid Customers and
2) Postpaid Customers
Prepaid Customers are generally the personal use customer group i.e. non
institutional. This segment accounted for around 80% of the customer base (2008
figures) and the remaining 20% was accounted for by the postpaid customer base.
The customer base is also segmented into groups according to the monthly revenue
generated:
 IDEA Cellular

The segmentation here is done as:

1)VIP customers: These are the customers who form the VIP group as the name
suggests and comprises of MPs, MLAs, industrialists and other high profile
customers. These are given high attention in services as they are key to
implementation of services across their regions.
2)Corporate Customers: These are the customers having more than five connections
to their name and generate revenues in excess of Rs. 10000 a month. These are
usually institutionally driven connections and are post-paid customers. Service quality
in terms of Value Added Services provided including preferential customer service
treatment is provided to retain these high value accounts.
3) Platinum Customers: These are the customers whose current monthly expenditure
on Idea Cellular Services is in excess of Rs.1500 per month. The revenue generated
from these accounts includes Voice, Data and VAS services. Around 60% of these are
from the post-paid group while the remaining 40% are from the pre-paid group.
Institutional Customers account for around 70% of the post-paid base while the
remaining are the personal usage customers.
4) Gold Customers: These are the customers providing revenues to the company
between Rs.1000 and Rs.1400 a month. The pre-paid base is again smaller in this
segment accounting for nearly 35% of the customers. A healthy split is found between
personal and institutional usage customers.
5) Silver Customers: This customer group provides revenues in the range of Rs.750 to
Rs.999 to Idea Cellular each month. Pre-paid user group is in the range of around
55% while institutional sales account for around 80% of the post-paid group.
6) Medium Volume users: These are the customers generating between Rs.220 to
Rs.750 each month. Prepaid customers form around 65% of the group while this
group accounts for approximately 30% of the whole customer base of Idea Cellular.
7) Low Volume customers are the customers generating revenues less than Rs.250 per
 IDEA Cellular

month

Tier 1 Metropolitan Circle:

Tier 2 Urban Circle:

Tier 3 Urban Circle:

 IDEA Cellular

Target Market:
The Target Market is the high revenue generating segment of the Platinum and
Gold Customers. It is strategic for the company to increase user base in these two
segments as they generate a steady income source and most being post-paid, the
company is usually assured of ease of collection of bills.
Major Benefits for these customers:
These are even given treatment in Customer care.
These are generally high data usage group and hence given dedicated Time Slots
when their data usage is detected to maximize usage and revenue generation as a
result.
The Metropolitan and Urban circles have mobile density of 134% as compared to
29% in rural areas. Hence, more focus should be on expanding in rural segments.
With the advent of 3G services and increasing number of smart phones, operators
should focus on advanced value added services like live streams, mobile money etc.
Strategy makers should think on the pricing policy of postpaid plans of corporates
and affordability of the consumers to beat the competition. Company should come
with new ideas & innovations to increase the sales & market shares. Company should
focus more and more on advertising to promote services in corporate world.
The Aditya Birla Group IDEA Cellular is an Aditya Birla Group Company, India's
first truly multinational corporation. The roots of the Aditya Birla Group date back to
the 19th century in the picturesque town of Pilani, set amidst the Rajasthan desert. It
 IDEA Cellular

was here that Seth Shiv Narayan Birla started trading in cotton, laying the foundation
for the House of Birlas.
Through India's arduous times of the 1850s, the Birla business expanded rapidly. In
the early part of the 20th century, our Group's founding father, Ghanshyamdas Birla,
set up industries in critical sectors such as textiles and fibre, aluminium, cement and
chemicals. As a close confidante of Mahatma Gandhi, he played an active role in the
Indian freedom struggle. He represented India at the first and second round-table
conference in London, along with Gandhiji. It was at "Birla House" in Delhi that the
luminaries of the Indian freedom struggle often met to plot the downfall of the British
Raj. Ghanshyamdas Birla found no contradiction in pursuing business goals with the
dedication of a saint, emerging as one of the foremost industrialists of pre-
independence India. The principles by which he lived were soaked up by his
grandson, Aditya Vikram Birla, Group's legendary leader. Mr. Aditya Birla dared to
dream of setting up a global business empire at the age of 24. He was the first to put
Indian business on the world map, as far back as 1969, long before globalisation
became a buzzword in India. At the time of his untimely demise in 1995, the Group's
revenues crossed Rs.8,000 crore globally, with assets of over Rs.9,000 crore,
comprising of 55 benchmark quality plants, an employee strength of 75,000 and a
shareholder community of 600,000.
 IDEA Cellular

MANAGEMENT DISCUSSIONS

Sector Growth
The year was marked by the uncommonly large new service launches by new
licensees,leading to an over-crowded sector. Resultant hyper-competitive market
conditions led to asteep decline in tariffs and introductory offerings of free minutes.
Consequently, while subscriber growth was high, the sector revenue growth slowed to
5.1% compared to 22.3% inthe preceding year.
Regulatory
Some major regulatory developments for the period were:
TRAI on MNP Regulation and porting charges
The TRAI on November 20, 2009 issued the Mobile Number Portability (MNP)
portingcharges regulation. As per it, the porting charges (paid by the subscriber to
theRecipient Operator) should not exceed Rs. 19 per request. The per port transaction
charges(payable by the Recipient Operator to the Mobile Number Portability Service
Provider) forprocessing the porting request of a mobile number, has been fixed at Rs.
19. Extension of timeline for implementation of MNP The DoT, keeping in view the
 IDEA Cellular

complexity and enormity of the testing involved before MNPis implemented, and the
present status of implementation by some operators, has extendedthe timeline for
implementation of MNP from June 30, 2010 to October 31, 2010.
Amendment in licensing conditions on equipment purchase
The DoT, vide its letter of December 03, 2009 and subsequent clarifications, issued
anamendment in the licensing conditions (valid for CMTS, UASL, NLD & ILD) for
telecomequipment purchase. Licensees, before issuing purchase orders relating to
telecomequipment, are required to make an application giving details of the original
equipmentmanufacturer / supplier for security clearance from the DoT. The revert
from the DoT onapplications is to come within 30 days, failing which the licensee can
take it as a deemedapproval.
Auction of 3G and BWA Spectrum
The DoT, on February 25, 2010 issued Notice Inviting Applications (NIA),
fromprospective bidders to participate in the auction of 3G and BWA spectrum. As
per the NIA,3 slots of 3G spectrum were available in 17 service areas and 4 slots were
available in 5service areas, while in the case of BWA, 2 slots were available in each
service area forauction. The NIA included auctioning rules, timelines and other
procedural requirements.The 3G auction started on April 09, 2010 and concluded on
May 19, 2010 after 183 rounds ofbidding. The BWA auction started on May 24, 2010
and concluded on June 11, 2010 after 117rounds of bidding.
WPC order to increase spectrum
charges and Petition against the
same . The WPC, on February
25, 2010 revised the spectrum
charges, with effect from April
1,2010 for GSM and CDMA
operators as under:
 IDEA Cellular

GSM CDMA Existing Charges (% Revised Charges

Spectrum Spectrum of AGR) (% of AGR)
Upto 2X4.4 Upto 2X5
2% 3%
MHz MHz
2X6.2 2X6.25 3% 4%
4% (for up to 10
2X8.2 2X7.5 5%
MHz
GSM and CDMA
2X10.2 2X10 spectrum) 6%
2X12.2 2X12.5 5% (for 12.5 MHz 7%
GSM spectrum)
2X15.2 2X15 6% 8%

The Company, along with other aggrieved operators, filed a joint petition against
theWPC order. The Honble TDSAT vide its order dated 26th March, 2010, was
pleased togrant an interim stay, subject to the condition that in the event the petition
isdismissed, the petitioner shall pay the spectrum charges along with interest at such
rateas may be determined. The TDSAT order included direction to the petitioners to
continuepaying spectrum charges at the applicable rate till further orders. The
respondent (DoT)was directed not to give effect to the above impugned notification
till the matter isdisposed off. The TDSAT also directed for separate petitions to be
filed by each of thepetitioners. The Company has complied by filing a separate
petition.
 IDEA Cellular

TDSAT order on Carriage Charges

The TDSAT, vide its judgment dated May 21, 2010 has upheld the BSNL stand and
allowedthe distance based carriage charging with effect from May 11, 2005 while
stating, interalia, that the impugned orders of the TRAI cannot be sustained and
consequently settingthem aside.
Discussion on Consolidated Financial Statements and Operational Performance
Subscriber Base
As on March 31, 2010, the company had 63.82 mn subscribers representing a
48.4%increase compared to the subscriber base of 43.02 mn on March 31, 2009.
Revenues
Revenues and Other Income for the year ended March 31, 2010, stood at Rs. 124,990
mn,as compared to Rs. 101,544 mn during the previous year, showing a growth of
23.1%, in asector which grew at 5.1%. VAS Revenues grew at 43.2% over the
previous year. Revenuesfrom Long Distance services, and from Passive
Infrastructure, forming part of totalrevenues after inter segment eliminations, were Rs.
858 mn, and Rs. 677 mn respectively.Growth in Other Income was predominantly due
to reversals arising from conversion of leaseagreements from finance lease to
operating lease.
Operating Expenses
Operating Expenses stood at Rs. 90,399 mn vis--vis Rs. 73,180 mn for the
previousyear. The contributors to the total Operating Expense of 72.3% were
Personnel Expenditure5.2%, Network Operating Expenses 25.0%, License and WPC
charges 10.8%, Roaming and AccessCharges 14.4%, Subscriber Acquisition and
Servicing Expenses 9.3%, Advertisement &Business Promotion Expenditure 3.4%
and Administration & Other Expenditure 4.3%.
Profit before Interest, Depreciation and Amortisation
The Company generated a Profit before Interest, Depreciation and Amortisation of
Rs. 34,591 mn for the year ended March 31, 2010, a growth of 22% compared to the
 IDEA Cellular

previousyear. The operating profit margin for the current financial year stood at 27.7
% comparedto 27.9% for the previous year.
Depreciation, Amortisation and Finance Charges
Depreciation & Amortisation expenses increased to Rs. 20,149 mn for the year
endedMarch 31, 2010 showing an increase by 43.6%, as against Rs. 14,028 mn for the
previousyear. Net finance charges for the year decreased by 19% from Rs. 4,945 mn
to Rs. 4,005 mn,mainly due to foreign exchange fluctuations.
Profits and Taxes
For the year ended March 31 2010, Cash Profit from operations stood at Rs. 30,555
mn, agrowth of 31.1% over the previous year. The Profit before Tax for the year stood
at Rs. 10,754 mn, an increase of 14.5% over the previous year. The tax charge for the
year,mainly consisting of deferred tax liability, stood at Rs. 1,215 mn. The Net Profit
for theyear ended March 31, 2010 was Rs. 9,539 mn, resulting in a net profit margin
of 7.6%.
Capital Expenditure
During the year ended March 31, 2010, the Company (including the erstwhile
SpiceCommunications Limited) incurred a capital expenditure of Rs. 39,814 mn.
Balance Sheet
During the year, the paid-up equity share capital of the company increased by Rs.
1,997.43 mn, due to issuance of 199.15 mn equity shares to the shareholders of
erstwhileSpice Communications Limited upon its amalgamation with the Company
and issuance of 0.59mn equity shares to the employees pursuant to exercise of stock
options granted underEmployee Stock Option Scheme, 2006. The total shareholders
funds stood at Rs. 113,704 mn as at March 31, 2010.
The Gross Block stood at Rs. 270,585 mn, and Net Block including Capital Work
inProgress (CWIP) stood at Rs. 187,143 mn as at March 31, 2010. Treasury
investments inmutual funds decreased by Rs. 9,148 mn during the year and stood at
11,304 mn as at March31, 2010. During the year, Current Assets decreased due to
 IDEA Cellular

utilization of surplus fundslying in fixed deposits, and hence the net Current
Liabilities as at March 31, 2010 stoodat Rs. 4,050 mn.
Human Resources
The Company, through its participative work environment, skill development
activities,and by championing the values of commitment, integrity, passion,
seamlessness and speed,promotes strong bonding with its employees. During the year,
it has again undertakensharing of value creation by granting another tranche of
Employee Stock Options to theeligible employees.
The findings of the Organisation Health Study (OHS) have been analysed, which are
veryencouraging, and concern areas are being suitably addressed. The employee
strength onrolls stood at 6,763 as on March 31, 2010.
Risk Management
The Risk Management framework of the Company ensures, amongst others,
compliance withthe requirements of Clause 49 of the Listing Agreement. The
framework establishes riskmanagement across all service areas and functions of the
Company, and has in placeprocedures to inform the Board Members about the risk
assessment and minimization process.These processes are periodically reviewed to
ensure that the management of the Companycontrols risks through a defined
framework. The various risks, including the risksassociated with the economy,
regulations, competition, foreign exchange, interest rateetc., are monitored and
managed effectively.
Internal Control Systems
The Company has appropriate internal control systems for business processes,
coveringoperations, financial reporting and compliance with applicable laws and
regulations.Clearly defined roles and responsibilities for all managerial positions drive
adherence ofdefined processes. Process controls are reviewed periodically and
strengthened given theinherent nature of operational fraud risks in telecom sector. The
operating parameters arealso monitored and controlled. Regular internal audits and
 IDEA Cellular

checks ensure that theresponsibilities are executed effectively. The audit committee of
the Board of Directorsactively reviews the adequacy and effectiveness of internal
control systems and suggestsimprovements for strengthening them, as appropriate.
Opportunities, Risks, Concerns and Threats
The Indian wireless sector is going through a testing phase of over-capacity ledhyper-
competition. Lower tariff and high introductory offers have resulted in multiple
SIMownership, reduced realization per minute of use and the conversion of paying
minutes tonon-paying minutes, leading to slowing down of revenue growth for the
sector. Themultiplicity of SIM ownership has made the subscriber numbers and
related metricsmeaningless to gauge the strength of the business. However, the
Company has been able toexploit its incumbency strengths and drive efficiencies
through evolved processes, and hasdemonstrated enhanced competitive strength
during this testing phase.
The telecom sector is characterised by technology changes. Competition from
newtechnologies is an inherent threat.
However, your Company, with the spectrum in 900/1800 MHz and in 2100 MHz, has
anattractive spectrum footprint to adapt to future technology changes. This, along
with thestrong balance sheet, and a power brand, positions the company to make the
best of futureopportunities in a growth sector.
The Company requires certain approvals, licenses, registrations and permissions
foroperating its business. In addition, regulators may amend license conditions, norms
forspectrum allocation, spectrum charges, merger and acquisition rules etc. which
may have asignificant impact on the Companys business. The Company, however, is
hopeful thatthe policy changes will be equitable.
The Companys business is dependent on key vendors to supply critical
networkequipment and services. Besides, its ability to provide quality mobile network
andexpanding its area of operations and the subscriber base is also dependent on the
spectrumallocation by the government. The Company believes in partnering with
 IDEA Cellular

vendors who are ofinternational repute, and with whom it builds long term
relationships.
Outlook
The business models of telecom operators are being stress-tested by overcapacity
ledhyper-competition. With several licensees operating at tariffs lower than cost,
theeventual phasing out of this period of over-capacity is inevitable. The Company,
with afocus on strengthening its leadership position in its incumbent service areas,
and acalibrated and measured approach to newer service areas, is well placed to
emergecompetitively stronger. The telecom sector provides lucrative long term
opportunities forstrong operators, of which the Company is one of a handful.
Cautionary Statement
Statements in the Management Discussion and Analysis describing the
Companysobjectives, projections, estimates, expectations may constitute a "forward-
lookingstatement" within the meaning of applicable securities laws and regulations.
Actualresults could differ materially from those expressed or implied. Important
factors thatcould make a difference to the Companys operations include economic
conditionsaffecting demand/supply and price conditions in the domestic markets in
which the Companyoperates, changes in the Government Regulations, tax laws and
other statutes and otherincidental factors.
Strategy in Global Context For Idea Cellular Ltd.
Introduction to Internal Analysis:
Internal analysis is a vital strategic management tool that helps in identifying the
strengths andweaknesses of an organization. These strengths and weaknesses, give an
organization certainadvantages and disadvantages to meet the needs of its target
markets. Both strengths andweaknesses should be identified from the customers
perspective, because customers often perceive what the organization couldnt identify.
(David, 2008)
Importance of conducting an internal analysis:
 IDEA Cellular

It helps to identify an organizations own capabilities, assessing the following things:

What makes us different from competitors?
What is the general market condition of our business?
What are the problems and complaints that customers are facing with our products
in theindustry, and how can we deal with them effectively?
 IDEA Cellular

PROFIT ANALYSIS

Physical Resources:
Idea cellular is a public listed company having license to operatein 22 areas.
Presently its operations exist in 11 service areas, having a customer base of 24million
covering more than 60 % of the total Indian telecom population. (Capitaline,
2009)Currently Idea cellular has its corporate office in Mumbai, and a registered
office in Gujarat. Itscircle offices are located in 17 states. Presently it has partnership
agreements with somerenowned organizations such as, Cellebrum India Pvt. Ltd., and
NDTV for VAS (value addedservices), and for roaming Bharti Telesoft, for marketing
communication it has tied up withLowe India Pvt. Ltd. and for network, Nokia and
Ericson are its biggest partners. (Bureau E. ,2009)
 IDEA Cellular

Reputation Resources:
Being a part of Indias first multinational group, Aditya Birla,and being the third
largest telecom service provider, it carries a strong reputation in the Indiantelecom
industry. It is also listed in Bombay Stock Exchange (BSE) as well as National
Stock exchange. It has been awarded Emerging Company of the year by Economic
times in 2009(The Economic Times, 2009) It has won an award for Care services in
the best billing or ustomer care at the GSM association award in Barcelona, Spain.
The company won prestigiousGolden Peacock Award for its innovative product My
gang in 2008. Idea cellular limited isalso an official sponsor of IIFA awards (Idea
Cellular, 2008)
Organizational Resources:
Along with Idea Cellular, Aditya Birla Group is consideredas one of the most ethical
companies in India and it reflects in all of its operations. The company hasmaintained
cordial relations with its suppliers and distributors. The company holds annual
awardfunctions to reward its suppliers, distributors and employees. It gives bonuses
and dividends to itsshareholders and employees every year.
Financial Resources:
The current ratio and the quick ratio of Idea Cellular (CurrentAssets/Current
Liabilities) is 1.38:1 and 1.3:1 which show they can convert their assets into cash
easily and pay their current liabilities (Capitaline, 2009). In the same way
their working capital is $1.5 billion which shows that they have huge cash for daily
basesoperation and financial works. If we talk about their shareholder funds which
includegeneral reserve and equity share capital is $ 23 billion and total long term debt
is $6 billion which is less than their capital, so it helps them to get loan easily (Idea
Cellular Revenue, 2009). Revenues for Ideas 13 operating service areas for Q1 at Rs.
26 milliongrew by 13.9% in 2009 (The Financial Express, 2009). Similarly, they
invest in almostevery big mutual fund companies, such as in ABN Amro Mutual
Fund, ICICI PrudentialMutual Fund, SBI Mutual Fund, HDFC Mutual Fund, and
 IDEA Cellular

Birla Sun Life Mutual Fund.So we can say base on the data, the company has strong
financial management resources(Capitaline, 2009).
Intellectual Resources analysis:
Idea Cellular has separate R&D departmentwhich helps to increase market share. It
invests a huge amount in advertisement such as theyhave brand ambassadors such as
Abhishek Bacchan and Mumbai Indians (Indian PremiereLeague). Idea has positioned
themselves as young smart and innovative (Idea Cellular Revanue,2009). Their
advertisement punch line An idea can change your life created self image of
the brand that other players were not able create in a short span of time. Moreover, in
the year 2008it collaborated with Geodesic, an innovator in communication and
entertainment applications onmobile for providing Idea radio a radio service for its
customers.

Technological Resources analysis:

Idea Cellular invests huge amount in theinnovation embedded solution to enhance its
technology, network, wireless space andCustomer Relationship Management (Our
Partners, 2009). For this, they signed a deal of $19.2 million with IBM (USA base
Software Production Company). Idea uses IBMwebspare application server for data
and financial transaction, Oracle Siebel customer data integration for Customer
Relationship Management and Supply Chain Management,they use OLTP (Online
Transaction Process), CICS (Customer Information ControlSystem) software to
optimize the data security, network and mobility management (IdeaPortal, 2009). Idea
Cellular uses Vehicle Tracking System by GIS (Global ProcessingSystem).

VRHN: Idea Cellular

VRHN analysis is considered as the foundation of internal analysis. Whatever an
organization possesses is generally considered as a resource or capability. Financial
 IDEA Cellular

resources, plant,equipments, technology, brand equity and organizational expertise all

can be considered asresources. Therefore, in order to have a competitive advantage an
organization has to make surethat its resources are valuable, rare, hard to imitate and
non substitutable.
Value:
The Indian Telecom sector is the biggest telecom sector in the world, which has
not been affected by economic downturn (Antony A. & Ghosh D., 2008). Due to
change in per capita income, and providing good service, it is growing rapidly. Many
multinational companiessuch as AT&T (USA), MTN (South Africa), Vodafone (UK)
are trying to take control in India, but the domestic players like Airtel and Idea
Cellular are trying to stop them to become a marketleader. Idea cellular has great
goodwill in India, because of many reasons such as, it is a publiclisted company, part
of 12$ billion of Indias first multinational group Aditya Birla Group,which has
operations in 18 countries (Idea Cellular, 2009). Even though, Idea wasnt the
first player in the telecom industry to launch GPRS, it has been awarded by The
Economic Times in2009 as emerging company of the year (The Economic Times,
2009). So its product has positiveimage between consumers.
Rarity:
As we know infrastructure and technology is not at par in India. So, Idea has tie
upswith IBM, Oracle, Nokia and Ericson. They provide good software which Idea
cannot get inIndia due to technology. Idea use IBM webspare application server for
data and financialtransaction, Oracle Siebel customer data integration for Customer
Relationship Management andSupply Chain Management OLTP (Online Transaction
Process) software to optimize the datasecurity, network management. (The Financial
Express, 2008)
Hard to imitate:
In India, every telecom company has to follow same rules andregulations laid down
by TRAI (Telecommunication Regularity Authority of India) and DoT.One company
 IDEA Cellular

cannot copy anothers product, service name or punch line because of

RegisteredTrademarks and Copyrights (TRAI, 2009), but they can start same service
at same price withdifferent name such as Idea came up with a unique plan Idea
Women Calling Card and MyGang then in few days Airtel started Family and
Friends, when Idea started GPRS service,Airtel and Vodafone also launched similar
services with a different name and when Idea reducedcall charges and launched easy
recharge, others also did the same thing. The punch line of IdeaCellular An idea can
change your life cannot be imitated; the quality of product, network andservice
cannot be imitated.
Not Substitutes:

Due to same call tariffs and similar bandwidth Idea can be easilysubstituted. There are
many telecom service providers who offer services at almost same pricesuch as Airtel,
Vodafone and Tata Indicom. Therefore if people are not satisfied with theservices or
ongoing plans, they can easily step out and use the services of other players.

Internal Factor Analysis:

STRENGTH:
Brand reputation:
Idea cellular is a part of Aditya Birla Group, a multinational havingoperations in 25
countries. The reputation of being the first Indian multinational and part of 100fortune
companies carries a lot of strength which Idea cellular enjoys being the part
of prestigious group. (Idea Cellular, 2008) Profit margin has been increasing at high
rate
. The profit margin of Idea cellular in relation toits competitors like Bharati Airtel and
Vodafone has grown relatively about 4% from 2006-07 which was 11% to 15% in
2007-08. It is strength for the organization as it is likely to give them acompetitive
edge. (Q3 result: Idea cellular, 2008)
 IDEA Cellular

Financial strength:
The current ratio and the quick ratio of Idea Cellular (Current
Assets/CurrentLiabilities) is 1.38:1 and 1.3:1 which show they can convert their assets
in to cash easily and pay their current liabilities (Capitaline, 2009). In the same way
their working capital is $1.5 billion which showsthat they have huge cash for daily
bases operation and financial works. If we talk about their shareholder funds which
include general reserve and equity share capital is $ 23 billion and total long term debt
is $6 billion which is less than their capital, so it helps them to get loan easily
(Capitaline, 2009).
Market share:
The overall market share of Idea cellular is increasing at a healthy rate. It iscurrently
operating in an industry which is expected to grow at a rate of 1.3 $ trillion in
revenueaccording to a US based research agency (Insight research corporation New
Jersey). Thus we caninfer from this fact that Idea cellular has a huge target audience,
as it has expanded its operationsin almost all parts of India (The Money control,
2008).
Technology innovation:
Being the first player in the telecom industry to start GPRS services inIndia, and even
starting unique products, such as My gang and Idea radio, the
technologicalinnovation of the organization can act as strength to the company in the
long run (The Hindu,2008).
Strong advertising and promotion:
Idea cellular is known in the industry for its aggressive promotional and advertising
techniques, such as having Abhishek Bachan, a famous Bollywoodstar as part of its
advertising punch line What an idea Sir Ji proved effective in carrying out
the promotional campaigns throughout the country (Money Outlook, 2001).
Strategic alliance:
 IDEA Cellular

Idea cellular has strategic alliance with IBM and Oracle. Both have a unique brand
image for providing best in class software solutions like CRM (Customer
RelationshipManagement) and OLAP (Online Analytical Processing). It has also tie
ups with leading mobile producers like Nokia. This shows that the organization is
dedicated towards providing superior services to its customers. (Idea Portal, 2009)
Weakness:
No presence in Broadband or internet service:
BSNL, Airtel, Reliance communications, Tata,all of them offer broadband services.
Reliance communications as well as Tata are now offeringhigh broadband access
through Data cards. It thus adds value to their respective brands. Not being a
broadband service provider is therefore a big weakness for them.
Less PAN India presence:
Idea cellular limited has a low PAN (Presence across nation) India presence as
compared to its rivals Airtel and Reliance communications. Airtel and Reliance
havealways been the first ones in expanding their operation expeditiously as
compared to other players in the industry.
Target only North India:
Idea Cellular is the market leader in North India, but they have asmall market share in
South India. Now recently it has made its presence in Tamilnadu.
Not a player of Direct to Home Service:
Idea cellular is not a player of DTH services.Players like Reliance and Bharti Airtel
have a strong presence in DTH services. Looking at thefuture prospects of DTH
services the giants like Tata, Airtel and Reliance who are the leadingmobile service
providers in the country have entered the arena of DTH. The DTH industry isexpected
to touch a base of 40-50 million subscribers by 2015.
Not a big player in urban market:
Plan for next three years
 IDEA Cellular

The company is having high operating cost i.e. the company is not utilizing its
recourses properly, since by the Internal-External (IE) matrix the company falls in the
grid of Grow and Build which also suggeststhat the company can go intense and
aggressive strategy of market penetration or the alternative of goingfor the vertical
integration. According to the QSPM analysis as well the alternative for going for
thevertical integration was the most attractive one. The company should also come up
with new service likeTata Docomo has come up Billing per pulse rate in order to
increase the market share. In the BCGmatrix Idea Cellular falls in the Stars category.
Idea Cellular should also try to acquire or tie up withother companies such as
Vodafone and Hutch and Airtel and MTN tried to tie-up in order to catch up withthe
competition and the growth of the industry. They acquired spice in past and they have
tie-up withEricson but they do not have any type of advantage in term of internet
service or upcoming 3G service.Idea should come up with new service for new
segment of customers, try to focus on urban market whichis again found out to be best
alternative from the QSPM analysis.

Idea Cellular is considered as rural market leader but theydo not have good market
share in urban area. They have 70 % market share in rural area and 32% market share
in urban area.
IDEA Cellular
 IDEA Cellular

Importance of understanding competition:

When a company positions its product in the market, it tries to position its brand
uniquely amongother brands present in the market. Therefore it is critical to
understand the strengths,weaknesses, opportunities and threats of each of those
competitors along with the industrystructure itself. This knowledge is important
because its the competition that helps us to own theunique benefit in our customers
mind that our competitors have not addressed and cannot easilyaddress in the future.
Rational behind identifying the competitors:
Analyzing the competitors is an essential component of corporate strategy. Knowing
about thecompetitors and their profile will help the concerned organization in
knowing its weaknesses thatit may exploit. A detailed profile of the competitors, helps
an organization in getting an in depthdescription of the competitors background, its
unique selling proposition, financial condition, itsstrategies, the products and the
market share.
 IDEA Cellular

Analysis of CPM and IFE:

 IDEA Cellular

With the analysis of the competitive profile matrix (CPM) we can conclude that the
companysstrategy in the Nature care segment is better than that of their existing and
latent competitors, onthe other hand the company has to adopt new strategy to
strengthen their position in the healthcare segment. As the analysis of internal factor
evaluation (IFE) we can say that the companysstrategy is aligned with the strength
and weakness of their organization.We have also recognized how the study of internal
factor and competition will help indetermining the strategy for the organization.
TOWS MATRIX
The TOWS matrix is an important matching tool that helps in developing four types
of strategies;
1. SO strategies use a firms internal strengths to take advantage of
externalopportunities.

2. WO strategies are aimed at improving internal weaknesses by taking

advantage of external opportunities.

3. ST strategies use a firms strengths to avoid or reduce the impact of

external threats.

4. WT strategies are defensive tactics directed at reducing internal weaknesses

andavoiding external threats. After analyzing the SWOT analysis of Idea
cellular which has been done in the previous reportthe tows matrix can be
constructed as follows:

SO strategies:
Under Strength and opportunity strategy the company should penetrate the
ruralmarket as the number of mobile users in rural India is increasing at a fast rate, we
can say it is becoming very close to urban consumers. As the organizations carries a
good brand reputation of Aditya Birla Group, and being the first organization to
launch GPRS service, it should penetratethe rural market and offer other value added
services like GPRS at affordable prices. Brand promotion is required in this
 IDEA Cellular

perspective. The advertisements of Idea cellular give a touch of Indian villages, it

therefore can become successful in gaining a large pool of customers, but it hasto
maintain superior digital clarity that too at an affordable prices.
WO Strategies:
This strategy is a tool by which we can understand the weaknesses and comparethem
with the opportunities we have in hand, and making an effort to see how weaknesses
can beutilized in maximizing the available opportunities.Earlier the firm was targeting
the consumers of Northern India only. In its recent expansion planit has slowly
capture the other parts of India as well, but it has not been able to provide somevalue
added services like Direct to home and mobile broadband service like Tata and
Reliance.The reason behind providing these value added services is that it gives a
unique strength to thefirm and a kind of diversification. The result is broadening of
services and capability of jumpinginto other related services which can be very
securely connected with mobile services.
ST Strategies:
Looking at the strength of the firm the firm carries a brand name and the marketshare
of the company is increasing in other parts of India as well including north and
western parts of India. The companys promotional strategies are also proving
beneficial. The recentadvertisements have proved successful in executing the brand
communication to the consumers.But the threats cannot be ignored and these have to
be very carefully analyzed so that the threatscan be minimized into strengths. Poor
infrastructure and not upgrading the technology whenever the need arises is a big
threat and it has to be minimized to the maximum extent possible.Sometimes poor
execution of promotional activities can also damage the reputation of the firms.The
care has to be taken as to what technology is most suitable, with whom the firm
should tie
 IDEA Cellular

The Entire Telecom Industry is growing at a rate of 35% as compared to the base year
2006-07.This can be termed as a moderately growing Industry and it is expected to
grow in the comingyears. Also as per the latest report of TRAI, an apex body
regulating telecom affairs, the number of mobile subscribers has touched 50 crore.
Bharti Airtel is the market leader with 32% share for long time but now they are
losing their market share. Idea Cellular Limited has a share of 22% inthe total GSM
telecom market in India (as on July09) and it is growing at 18% annually.Presently
its operations exist in 11 service areas, having a customer base of 24 million
 IDEA Cellular

coveringmore than 60 % of the total Indian telecom population. (Capitaline, 2009)

Currently Idea cellular has its corporate office in Mumbai, and a registered office in
Gujarat. Its circle offices arelocated in 17 states. Presently it has partnership
agreements with some renowned organizationssuch as, Cellebrum India Pvt. Ltd., and
NDTV for VAS (value added services), and for roamingBharti Telesoft, for marketing
communication it has tied up with Lowe India Pvt. Ltd. and for network, Nokia and
Ericson are its biggest partners. (Bureau E. , 2009). So it comes under star.
Internal-External (IE) Matrix
The IE matrix is the strategic tool used to analyze the working condition and the
strategic position of the business. The IE matrix includes both the internal as well as
the external factorswhich will affect the business, based on the scores of internal
factor evaluation (IFE) andexternal factor evaluation (EFE) we determine the
companys position in the Matrix. The matrixis being divided into nine grids and the
relative position of the company in the grid will explaintheir strategy. The company
lies in the position of strong so it lies in the strong grid of the IEmatrix so the
company has to grow and build which suggests that the company should go
for intense and aggressive tactical strategies like market penetration, market
development or productdevelopment. The company can also consider the alternative
of backward, forward or horizontalintegration.
 IDEA Cellular

Strategy in Global Context For Idea Cellular Ltd.

Grow
Idea
AndBuildHoldAndMaintainHarvestOrDivest Quantitative Strategy Planning Matrix
(QSPM) The QSPM is a strategic planning approach for evaluating the possible set of
strategies, this act as ananalytical tool to for the comparison of the alternative
strategies. In the given case we are consideringfollowing three alternative strategies
for Idea this includes: -1.

Strategic Alternative 1:
Can go for backward integration such as Vodafone acquireHutch to increase market
share or forward like acquire distributers2.
 IDEA Cellular

Strategic Alternative 2:
Can go for marketing penetration: Target the urban segment;launch a new service
with same brand name like Tata Docomo has done Billing per pulse rate , provide
more high end services like GPRS, mobile internet services and providegood
customer service

Strategic Alternative 3:
Can go for the horizontal integration activities i.e. Airtel hasgone for Dish TV,
Reliance has gone for Big TV Evaluating the above mentioned strategies with
assigned weight to the strength, weakness,opportunities and threats present in front of
the company, and we have figure out that thestrategic alternative 2 i.e. Target the
urban segment; launch a new service with same brand name.Like Tata Docomo has
done, Provide more high end services like GPRS, mobile internet services and provide
good customer service. This strategy has the attractiveness score of 6.22.

Plan for next three years

The company is having high operating cost i.e. the company is not utilizing its
recourses properly, since by the Internal-External (IE) matrix the company falls in the
grid of Grow and Build which also suggeststhat the company can go intense and
aggressive strategy of market penetration or the alternative of goingfor the vertical
integration. According to the QSPM analysis as well the alternative for going for
thevertical integration was the most attractive one. The company should also come up
with new service likeTata Docomo has come up Billing per pulse rate in order to
increase the market share. In the BCGmatrix Idea Cellular falls in the Stars category.
Idea Cellular should also try to acquire or tie up withother companies such as
Vodafone and Hutch and Airtel and MTN tried to tie-up in order to catch up withthe
competition and the growth of the industry. They acquired spice in past and they have
tie-up withEricson but they do not have any type of advantage in term of internet
 IDEA Cellular

service or upcoming 3G service.Idea should come up with new service for new
segment of customers, try to focus on urban market whichis again found out to be best
alternative from the QSPM analysis.
IDEA Cellular
 IDEA Cellular

METHODOLOGY
 IDEA Cellular

The purpose of methodology is to describe the processinvolved in research work. This

includes the overall researchdesign, data collection method, the field survey and
theanalysis of data.For our project we did a small survey based on around 100 people
in the BIMTECH, Ansal Plaza, GIP mall and fewmore friends and relatives at
different places ranging fromage group of 15 to 30 yrs
 IDEA Cellular

QUESTIONARY DATA ANALYSIS

 IDEA Cellular

Q:1 ) Have you heard about the Idea cellular Ltd.?

A) yes B) No
Interpretation: Most of the people are aware of the IdeaCellular Ltd.
Q: 2 .) From whom you come to know about this?
A) Family B) Colleague C) FriendsD) AdvertisementInterpretation: Advertisement
plays an important role tospread the awareness and other mediums also contribute.
Q:3 ) Any time you used the service
A) Always B) Most of the timeC) Sometimes D) Not at all
INTERPRETATION: Awareness about the idea is good but still it isnot able to create
the credibility for the brand in market. This is thereason they have less no. of
customers.
Q:4 ) Did you like the services?
A) Highly Satisfied B) Satisfied C) Neither satisfied nor dissatisfied D) Dissatisfied
E) Highly dissatisfied
INTERPRETATION: Subscriber are not that much satisfied withthe coverage of Idea.
Q5) Have you seen the advertisements of Idea Cellular ?A) Yes B)
Q:6) How would you rate that advertisement
A) Very good B.) Good C.) Neither good nor bad D.) BadE.) Very Bad
INTERPRETATION: People like the advertisement very much, eventhey are able to
recall the captions like walk when you talk, ek idea jo badal de apki duniya
Q:7 ) Where did you see/hear its advertisement ?
A) Television B) Radio C) InternetD) Print Media
INTERPRETATION: Almost everyone has seen itsadvertisement on Television and
its presence on internet isvery less.
Q:8 ) Did you think that it was effective enough tocommunicate the message?
A.) yes B.) No
 IDEA Cellular

INTERPRETATION: They are able to communicate themessage but still they are less
effective as compared toAirtel, Vodafone.
Q:9 ) Rate the features which you give the most priorty whileselecting the Mobile
Network.
INTERPRETATION: Network is the key decision maker whichinfluence people
while buying a new mobile network
 IDEA Cellular

FINDINGS AND SUGGESTIONS

 IDEA Cellular

People are known to the IDEA CELLULAR LTD. and itsservices but still
37% of the people use Airtel , 32% use Vodafone , 19% use reliance , around
10% use idea and 2% use virgin People are aware with the services i.e. marketing
communication is good.
50% of the people, even after being aware of the brand, have never used idea
cellular services.
Subscriber are not very much satisfied with the service. So, there is a needto improve
the coverage in terms of area as well as network.
Most of the subscriber suggested that the advertisement was goodenough to
communicate the message but what matters at the end isthe service provided by idea .
So, there is a need to improve thecoverage and connectivity of Idea .And other
suggestion which was given by the subscribers was thatthey liked Abhishek Bacchan
more as the Brand Ambassador for IDEA.
 IDEA Cellular

RECOMMENDATIONS

Should enhance its distributionsystem.

Should increase its coverage area.
Should become more customer-friendly.
Should plan to grow its market share.
 IDEA Cellular

LIMITATIONS
 IDEA Cellular

Despite the possible efforts in conducting the research, there were

some unavoidable situations, which limited the scope of the project.
Considering the population, the sample taken for present study seems
fake (means some of the address chosen for the collection of the data
were fake ) and hence further new channel partner has to be found
out.
Some of the channel partners were non-cooperative in giving
information. Time available for research was very short so certain
aspects have been overlooked. Dealers were hesitant to provide the
complete information due to fear of misuse of information.
Respondents may sometimes misinterpret the questions, leading to a
different answer
 IDEA Cellular

CONCLUSION
 IDEA Cellular

why IDEA
"Attracting and nurturing talent has become the single most dominant force
in business."Idea cellular recognizes human resources as a backbone for its long-term
success.We aim to be the best employer, attracting and retaining the best employees.
Our people are our greatest resource as they are our biggest differentiator. We
thereforehire the best professionals brimming with ideas and develop them for
futureleadership positions.!dea is all about participation and involvement - seek
opportunities, give opinionsand always speak your mind. And finally make a
difference within the company.We have focussed on conserving the best aspects of
our unique culture and on perpetuating what attracts people to join, and remain, at
iDEA
Communication strategy of idea is very good because most of the people are well
known to the service by idea .Being newto telecom industry, people are not confident
to go for it. Also,competitors of idea are very much powerful in communicatingas
well as providing the service.
And one thing which is focused is that the Brand Ambassador also plays an impotant
role in catching the attention of thecustomer because most of the people reported that
they likedAbhishek Bacchan more than Sariya Saran.
 IDEA Cellular

REFERENCES
 IDEA Cellular

Idea Journey(n.d.). Retrieved September 02, 2009, from Idea

Cellular:http://www.ideacellular.com/ShowBinary/BEA%20Repository/idea/Investor
Presentation/InvestorPresentationQ1FY10.pdf Some gap in Idea market opportunity
(2008, July 10). Retrieved August 29, 2009, from TheFinancial
Express:http://www.financialexpress.com/printer/news/333489/Anto Antony & Durba
Ghosh, E. B. (2008, December 20).
Telecom beats slowdown bluescontribute big to GDP growth
. Retrieved August 31, 2009, from The Economic
Times:http://economictimes.indiatimes.com/articleshow/3864667.cms
Budget
. (n.d.). Retrieved August 30, 2009, from India
Budget:http://indiabudget.nic.in/Bureau, E. (2009, august 25).
Features
. Retrieved 09 01, 2009, from The Economic
Times:http://economictimes.indiatimes.com/articleshow/4930919.cms
Conclusion
As a conclusion of this report we figure out that the companys strategy to t
arget the rural
segment;launch a new service with same brand name like Tata Docomo has done,
provide fast GPRS, mobileinternet services and provide good customer service
which is having the attractiveness score of 6.22
 IDEA Cellular

BIBLIOGRAPHY
 IDEA Cellular

There was immense need and flow of the information while

conducting the analysis as well as while writing the report, which was
gathered through various sources as mentioned below:
Internet
www.tata.com
Company profile Introduction of the co. & know how about their
products & services that they offer in market.
Products and services & its history
www.google.com It used for searching information about different
automobile manufacturing companies JOURNALS1. Products
manuals of Tata2.Sales module of Tata
www.wikipedia.com
www.scrib.com