CHAPTER I

Why Customer Preference for ³Postpaid Connection´

Industry Overview

Telecom Industry in India
Telecom industry in India has a big market potentiality and is a fast growing sector. Government of India is eager to reconstitute this telecom industry by enacting effective policies for more investments from foreign companies, which results in a very competitive and deregulated market in the world. The sector ranks second in the world, with over 509.03 million telephone subscriptions by Sep 2008 end. The fast track growth of the Indian telecom industry has made it a key contributor to India¶s progress. India adopted a phased approach for reforming the telecom sector right from the beginning. Privatization was gradually introduced, first in value-added services, followed by cellular and basic services. An independent regulatory body, Telecom Regulatory Authority of India (TRAI), was established to deal with competition in a balanced manner. This gradual and thoughtful reform process in India has favored industry growth. Today, there are more than 509 million telecom subscribers in India. Every month, 10-14 million new subscribers are added. Upcoming services such as 3G and WiMax will help to further augment the growth rate. Furthermore, the Indian economy is slated to sustain its 7-9 per cent growth rate in the near future. This is supported by the political stability that the country is experiencing currently. India¶s demographic outlook makes it one of the largest markets in the world. A conducive business environment is also created by a favorable regulatory regime. There exists enormous business potential for telecom companies on account of the country¶s low tele-density, which is close to 19 per cent presently. Indian Telecom sector, like any other sector in the country, has gone through many phases of growth and diversification. Starting from telegraphic and telephonic systems in the 19th

century. and WLL to the much awaited great 3G (Third Generation) Technology in mobile phones. the field of telephonic communication has now expanded to advanced technologies like GSM. . CDMA.

there is huge untapped potential for mobile phone penetration in rural India. There is still a big room for further growth.84 million and BSNL of about 53. . The growth in 2008 was led by Bharti Airtel.7 million mobile phone users as of September 2009 compared to 346. It implies that one out of every three Indian has a telephone connection. To put this growth into perspective.5 million customers added every month.98 million by the end of August 2009. taking the telecom penetration to over 36 per cent. Telecom sector contributed 3. the largest globally. The country added 113.51 million customers as of September end. The Indian telecom industry has been growing rapidly at a CAGR of 40. In fact. The teledensity in rural areas being a little more than 10 per cent against the national average of 33.89 million in the corresponding period a year ago and the total number of telephone connections (wireless and wireline) is 509. Bharti had 110. The country had 471.03 million as of September end.4 per cent by 2010. Vodafone had 82.23 per cent.63 per cent from 2003 to 2008.26 million new customers in 2008. with an average 9.21 million by the end of September 2009 as compared to 6.4 per cent to India¶s gross domestic product in for the year 2008 and is expected to contribute 5.35 million. The total Broadband subscriber base has reached 7.50 per cent growth in 2008. Bharti has more customers than the state-owned BSNL¶s mobile and landline users combined. the country¶s cellular base witnessed around 48.Segment Analysis India's growth story in the telecom space shows no signs of slowdown. The growth will primarily driven by the rise in communications demand from semi urban and rural India. the country¶s largest communications provider. Even there is a huge potential in broadband segment.

Key points .

Prepaid connections accounted for more than 89 per cent of all mobile connections in 2007 and are expected to grow to more than 92 per cent of the connection base by 2012. Indian mobile connection market continues to be dominated by prepaid subscribers. Prepaid subscribers are expected to adopt data services faster than the post-paid segment.2012 and the total services revenue for postpaid connections is expected to grow at 15 per cent CAGR during the same forecast period.India is highly price Sensitive market and has lowest tariff rates in the world . Which is highly price sensitive market due to vendors will continue to focus on below $25 cost handset. Data revenues for the prepaid segment are projected to grow at 29 per cent CAGR during the forecast period as compared to 22 per cent CAGR for the post paid subscribers during the same period. the prepaid subscriber base will cross 683 million and postpaid subscriber base will exceed 53 million subscribers. The total services revenue for prepaid connections is expected to grow at 18.Presence of 14 Cellular service Providers makes into a highly competitive Market. By 2012. The growth engine for Indian cellular service provider is rural market in coming years. Introduction .9 per cent CAGR for the period 2008 .India is a second largest and fastest growing telecom market.

A mobile connection in which one uses a mobile connection with a SIM card and pay the monthly bill at the end of the month is a Postpaid mobile connection. In this mobile connection one uses the SIM card to pay monthly bill based on rentals, plan charges and the usage charges. In the case of a prepaid mobile connection a person first pay by card and then uses the phone for general utility. While on the other hand postpaid accounts are referred as use and pay type. In a Postpaid connection one can find two types of components: The first component is the monthly rental that the subscriber pay to the mobile service provider and the other component is the usage charges. The uses charges generally vary from the kind of that have been used by the customer. Competitive plans are very evenly introduced by the service providers so as to attract the maximum number of customers. An engagement with corporate for closed user group connections allow for subsidized calls to the other group members. For this purpose generally lower tariffs on monthly rentals and usage fees are taken. Why people choose to have a Postpaid Plan? Generally because of the reason that the benefits of a prepaid connection are very limited. In prepaid one pays the advance for a specific number of minutes, once the time run-out of hands the phone is needed to be recharged for the next number of days and the due balance is needed to be increased in amount. While in case of a postpaid plan one is needed to pay after the end of the month. There is no time limit in case of a postpaid plan. No contract is signed for any particular period of time and one can talk endless without giving an account to the balance remaining-due. The prepaid mobile bills are just the formalities as voucher cards while the post-plans are bill like, where one pays after the end of month for all the minutes which one has used. Most of the postpaid mobile plans connection provides unlimited minutes for talking whether one is talking just on nights or only on nights and weekends.

RESEARCH METHODOLOGY

Method of data collection
Primary data collection

The primary data collected through well designed questionnaire. The questionnaire through which data was gathered and collected consisted of questions which were mostly objective in nature.

Secondary data collection
The secondary data for the study got from visiting Cellular service Providers outlets and gathering informative materials and published information. Current information regarding the subject and company will be getting from newspapers, business magazines, customer care executives, journals, internet, and by referring certain books on Indian Telecom Sector.

Method of sampling
Sampling technique
Sampling procedure: Probability convenience sampling method Sample size: 200 respondents were selected for analysis.

Method of sampling
The method used for sample technique was non Probability convenience sampling method. This method is used because it is known previously as to whether a particular person will be asked to fill the questionnaire. Convenient sampling is used because only those people will be asked to fill the questionnaires who were easily accessible and available to the researcher.

Frame work of Analysis
The collected data was to be analyzed by using statistical technique like Percentage Analysis. The data was to be analyzed by using Statistical Program for Social Sciences (SPSS) software.

Type of Study
The study conducted is a conclusive descriptive statistical study; by this study I come to the decision which is precise and rational. The study is conclusive because after doing the study I come to a conclusion regarding the position of the mobile connections in the minds of respondents of different groups. The study is statistical because throughout the study all the similar samples are selected and group together. All the similar responses are taken together as one and their percentages are calculated.

so the respondent will be limited so cannot be treated as a whole population and the respondent may be biased.500 Rs.Thus.501-1000 Rs1001-1500 More than 1500 11 Total 179 90 61 17 . this. conclusive descriptive statistical study is the best study for this purpose as it provides the necessary information which is utilize to arrive at a concrete decision. Limitation of the Study The research will be conducted in a limited area . Test Results Mobile Connection type in Chennai and Expense Per Month Cross tabulation Mobile Connection type in Bareilly Prepaid Expense Per Month Up to Rs.

Postpaid Total 7 97 8 69 4 21 2 13 21` 200 Inference: From the table it be shown that about 90 out of 97 are spending less than Rs. Mobile Connection type in Chennai and Rating on Call charge rate Cross tabulation . Mobile Connection type in Chennai and Network Availability Cross tabulation Mobile Connection type in Bareilly Prepaid Postpaid Total Network availability Total Very good 22 1 23 62 6 68 Good Satisfied 79 10 89 11 2 13 bed 5 2 7 Very bed 179 21` 200 Inference: From the table it be shown that about 79 out of 89 are satisfied with Network availability and are having prepaid connection and 10 out of 89 have postpaid connection.500 and have Prepaid connection and just 7 out of 97 are spending less than and have Postpaid connection. Mobile Connection type in Chennai and Customer Profession type Cross tabulation Mobile Connection type in Bareilly Prepaid Postpaid Total Customer profession type Total Service person 100 11 111 Business man 21 1 22 Student 52 9 61 House wife 6 0 6 179 21 200 Inference : From the table it be shown that about 100 out of 111 are service Professional with having prepaid connection and 11 out of 111 are having postpaid connection.

. Mobile Connection type in Chennai and Reason for Choosing a particular connection Cross tabulation. Mobile Connection type in Bareilly Prepaid Postpaid Total Reason for choosing a particular connection Usage control cost 96 11 107 Switching freedom 70 7 77 Cheaper call charges 9 1 10 Less hassle involved 4 2 6 Total 179 21` 200 Inference : From the table it be shown that about 96 out of 107 are opting the particular connection with having prepaid connection and 11 out of 107 are having postpaid connection.Mobile Connection type in Bareilly Prepaid Postpaid Total Rating on call charge rate Very good 35 3 38 41 3 44 Good Satisfied 89 13 102 10 1 11 Bad 4 1 5 Very Bad Total 179 21` 200 Inference : From the table it be shown that about 89 out of 102 are satisfied with the charge rates with having prepaid connection and 13 out of 102 are having postpaid connection.

More than 49 % of the respondents spend Less than 500 Rupees per month and just 6.Findings: It is found that Aircel is the Market Leader in Chennai with 32% market share and Lowest market share is of BSNL with just 5% .5 % of the respondents are satisfied with the customer care services provided by their Cellular Services. It is found that majority of respondents about 89. .5% of the respondents is using Postpaid connection in Chennai among the respondents. It is found that about 44.5 % using prepaid connection and just 10. It is found that more than 50% of the respondents believe that the customer care Executives Behavior is Warm and Helpful and just 1.5 % of the Respondent believes that they are lazy and very slow in Responding.5 % of the respondent spends above 1500 Rupees per month.

It is found that about 67 % of the overall respondents are satisfied with their service providers and just 2. More than half of Respondents ( 53%) are using their particular connections to control cost of mobile usage.5% of the respondent uses the same number for more than 3 years. It is found that 56% of the respondents uses their connections for 1-2 years and there are 1. About 52% of the respondents are satisfied with their service providers call rates and just 3% respondent says its very bad.It is analyzed that about 44.5% says they are not happy with their service providers.5 % of the respondents are satisfied with the Network Availability by their service Provider. It is found that about 40% of the respondents are satisfied with the Value added services provided by their service providers. It is found that more than 50% of the respondents are service Professionals and second largest respondent Group is of Students. . It is found that about 69 % of the respondents prefer GSM Technology service providers.

5 % of the respondents are Satisfied with the customer care services so there is room for improvement in the customer care services for cellular services as the customer care services are the pillars which play a very vital role in the cellular services. . the cellular service providers needs to bring More VAS to increase ARPU . the company which provide the best customer service will the winner at the end. It is seen that about 49% of the respondent spend less than Rs 500 on the cellular service .Suggestion It is seen that just 44. It is observed that about only 45% of the respondent are satisfied with the network availability by their service provider . the network quality is one of the primary reason of the Aircel being a market leader in Tamil Nadu . that is the reason that ARPU (Average Revenue Per User ) of the Cellular service Providers are very Low now . so for competing with aircel other service providers must enhance their network quality . so to increase the ARPU .

The high ARPU (Average Revenue per User) can be achieved only by Providing the new innovative services like Nokia Weather service for Farmers in India which cost just Rs.It is observed that just 40% of the respondent is satisfied with the value added services provided by their service providers it means there is still a lot of room for the new innovative VAS services which can increase the service providers revenue and attracting new subscribers. Based on the literature findings.Total cost of Ownership (TCO) is a major factor in deciding about the type of connection and that is the Reason that Mostly customer prefer Prepaid connection as the TCO is less in prepaid compared to Postpaid connection . it is possible to prepare an instrument to measure the preference of customer in term of prepaid and postpaid connections . People Prefer Mostly the GSM Technology because of the facility to change the SIM Frequently whereas this facility is not available in CDMA. Conclusion Thus. With the launch of the 3G Technology the VAS will be the dominant factor in future to decide about the type of connection that will be chosen by the customer.Customer service and Value added Service (VAS) are Critical in Mobile services which act as a differentiator for Service Provider and help customer in deciding about the mobile connections type .2 / Per day only which they Provide with the Collaboration of different service Providers .

Mobile Phone Service Providers .

8 billion people.800 crore (Rs 388 billion). a . it has joined a consortium of global telecom operators to announce the launch of the EASSy cable system -.Mobile Phone Service Providers 1. telemedia.4 billion). BSNL Bharat Sanchar Nigam Limited saw a drop in its revenue for the second consecutive year to post Rs 30.The company is structured into four strategic business units -.7 billion. Bharti Airtel Bharti Airtel retained its leading position among telecom service providers and posted a growth of five per cent to end 2009-10 fiscal with revenues of Rs 38. Sunil Bharti Mittal is the chairman and managing director of the company.000 km undersea cable connecting Africa to Europe. 2. enterprise and digital TV.mobile.240 crore (Rs 302.the 10. Recently. The company has with operations in 18 countries with a footprint covering 1. Bharti Airtel bought the African operations of Kuwait-based Zain Telecom for $10. In March 2011.

even though it retained the number two position among telecom players.200 crore (Rs 232 billion).378 3G connections since February 2010. It is the world's leading international mobile communications group with approximately 347 million proportionate customers as on 30 June 2010 and has around 40 partner networks worldwide. Reliance Communications Reliance ADA Group's flagship company. integrated (wireless and wireline). Vodafone Essar recorded 13. with over 100 million subscribers.34 million customers. 4. It has operations across the country with over 106. Vodafone Essar The Indian subsidiary of Vodafone Group. Reliance Communications reported a negative growth of 3.drop of 14 per cent.3 billion). Vittorio Colao is Vodafone chief executive. The company has reported around 6 crore (600 million) 2G connections and 9. data and video) digital network.It has established a pan-India. All major towns and cities are covered through BSNL network.The company commenced operations in 1994 when its predecessor Hutchison Telecom acquired the cellular license for Mumbai. convergent (voice.68 million subscribers. to offer services spanning the entire infocomm value chain.7 per cent growth to emerge as the third largest player with revenue of Rs 23. BSNL currently is the largest wire line service provider in India. Gopal Das is the new chairman and managing director of BSNL.130 crore (Rs 221. With over 71. It is India's largest private sector information and communications company.5 per cent with revenue of Rs 22. Vodafone Essar. 3.73. and Marten Pieters is managing director and CEO. highcapacity. Idea Cellular . Anil D Ambani is the chairman of the company 5. BSNL offers both fixed line and mobile services with broadband connections.

It is the first company to launch CDMA mobile services in India. The company holds leadership position in emerging markets.390 crore (Rs 113. serves nearly 70 million customers in more than 450.000 crore (Rs 110 billion). 7. Virgin Mobile.Tata Indicom (CDMA services). It enjoys a pan-India presence through existing operations in all of India's 22 telecom circles.000 towns and villages across the country. Tata Teleservices. Tata Communications Tata Communications reported revenue of Rs 11.Tata Communications leverages its advanced solutions capabilities and domain expertise across its global and pan-India network to deliver managed solutions to multi-national enterprises. . The Tata Global Network includes one of the most advanced and largest submarine cable networks. It launched mobile operations in January 2005 under the brand name Tata Indicom. Tata DOCOMO (GSM services).900 core (Rs 69 billion). Idea offers both prepaid and post paid services. one of the 96 companies of Tata Group.Established in 1996. and nearly 1 million square feet of data center and collocation space worldwide. Tata Teleservices Ltd. along with Tata Teleservices (Maharashtra) Ltd. It is a pan-India operator with services being made available in all parts of the country. It has posted revenue of Rs 6. with connectivity to more than 200 countries across 400 PoPs. a Tier-1 IP network. Idea was the first cellular service provider to launch General Packet Radio Service (GPRS) and Enhanced Data rates for GSM Evolution (EDGE) in the country. Tata Wacky (which is the brand for fixed wireless phones).Idea Cellular is part of the Aditya Birla Group and has bagged fifth position with a revenue of Rs 11.9 billion). Kumar Mangalam Birla is the chairman of the group. has its network in 20 circles.It is a leading GSM mobile services operator in India with 67 million subscribers. Tata Photon (the company's brand that provides a variety of options for wireless mobile broadband access) and T24. Srinath Narasimhan is the managing director and CEO of Tata Communications. Tata Teleservices Tata Teleservices spearheads the Tata Group's presence in the telecom sector. Tata Teleservices operates under five different brands -. service providers and Indian consumers. 6.

Kolkata.The company posted a revenue of Rs 4. Tamil Nadu. Today. It is a joint venture between Maxis Communications Berhad of Malaysia and Sindya Securities Investments Private Limited. Jammu & Kashmir.650 crore (Rs 36.700 crore (Rs 47 billion) to move to the number eight slot. UP(West). Aircel commenced operations in 1999 and became the leading mobile operator in Tamil Nadu. It emerged a market leader in Assam and in the North Eastern provinces within 18 months of operations. Kerala. 8. West Bengal.to Rs 3.25 per cent stake in the company. Bihar. The government currently holds 56. . Madhya Pradesh and Punjab. Delhi. Himachal Pradesh. The company was in the forefront of technology induction by converting 100 per cent of its telephone exchange network into the state-of-the-art digital mode. the company has a foothold in 21 circles including Chennai. UP(East).5 billion). Assam. Today it has more than 9. North East.06 million in the two metro cities of Delhi and Mumbai. Kuldip Singh is chairman & managing director of MTNL.000 GSM mobile connections. Orissa. MTNL Mahanagar Telephone Nigam Limited (MTNL)'s revenue dropped nearly by a fifth highest among the top 10 players -.00. Karnataka. Andhra Pradesh. whose current shareholders are the Reddy family of Apollo Hospitals Group of India. Aircel Aircel recorded the highest growth of 37. It has over 43 million customers in the country.2 per cent among operators in 2009-10. Maharashtra & Goa . Mumbai.Anil Sardana is the managing director of Tata Teleservices.The company has achieved a customer base of 8.

000 subscribers.300 crore (23 billion. .TTML The third Tata group company is this arena. TTML leads the Tata group's presence in the telephony sector in the telecom circles of Maharashtra and Goa. Kishor Chaukar is the chairman of TTML. TTML commenced landline operations in 1998 and has the largest wire line base in Mumbai and Maharashtra amongst all private operators. among the top ten telecom players in India. This helped the group's earning go past the Rs 20. with revenues of Rs 2.000 crore (Rs 200 billion) mark. Tata Teleservices Maharashtra Limited (TTML) is ranked number 10. including Mumbai. The company has over 600.

Hardware is a common platform for both IT and telecom. Competition Policy . µenclave¶ type development of software with exclusive focus on export can not bring about desired benefits if such a strategy ignores the linkages between export and the domestic market. Such a vision builds on a much larger vision of all round development of IT that pervades wide cross-section of Indian economy and society. As discussion in the subsequent paragraphs will show. therefore. Vision 2020. is a much larger vision. Rapid technological convergence has already implied a symbiotic overlap between the development strategies of IT and telecommunications.Telecom and IT The vision of telecommunications in 2020 is a vision of information society built on an edifice where IT and telecommunications merge. There is a legacy vision derived from export-success of India¶s software that has given rise to optimism regarding India¶s growing pre-eminence in global IT canvas. Deeper analysis shows that there is need for a comprehensive IT development strategy to ensure India¶s durable presence in the global software market. it flourishes on the telecom-network and in turn permits modern day telecommunications to use sophisticated IT-software. Part of today¶s IT is µtelecom writ large¶.

Japan. are presented below: 1. Taiwan and Thailand. 5.Countries often differed in pattern of sequencing and the speed of liberalization. . Privatization of state owned incumbents but deferred competition through exclusivity granted to private investors: Hong Kong. Competition in the fixed line segment with state owned incumbents: China. Korea. Simultaneous introduction of privatization and competition: Japan and Sri Lanka. 4. Introduction of second domestic long distance carrier first: China The sector ministry exercises regulatory functions: China. Heterogeneity of routes to sectoral reforms. Opening up of competition in the international services first: Korea. classified into different combination of policies and approaches to telecom reform. India and Korea. Indonesia. Malaysia. Pakistan and Singapore. Malaysia and the Philippines. Opening up of local market to competition first: Hong Kong. as seen from the examples of some of the Asian countries. 3. Malaysia. Indonesia. 2. India and Singapore. Competition has been controlled within limit by state policy through licensing of limited number of market players in certain segments granting thereby a period of exclusivity to the operators.

Though private sector has been licensed and they are laying infrastructure. In India. Separate regulator with the responsibility for interconnection lying with the dominant operator while regulator is responsible for arbitration of disputes: Hong Kong. Differences in . In most countries. Basic service in India is still limited to one private operator competing with state owned incumbents in the circles. This was gradually increased to licensing of four operators in each of the four metros and thirteen circles. competition in cellular telephony was allowed in a duopoly mode. metros are still in the grip of public sector monopoly and it will take a while before private competition takes place. Pakistan and Philippines. restricting the number of licensees or imposing geographic limitations has limited competition.1. for instance.

China did not allow private entry in the telecom sector and limited competition between state-owned entities of the ministries. Many countries in Asia restricted foreign equity participation. Malaysia. equipment and supervision through Business Cooperation Contracts (BCCs). within Asia. Singapore and Thailand have opted for CDMA. Indonesia. China. the Philippines. Korea. China. India. private entry was allowed through Build Operate and Transfer (BOT) mode while the network was controlled by the state. For example. the Philippines and Thailand limited foreign equity below fifty per cent. whereas Hong Kong. µCompanies like AT&T and Cingular are increasingly moving to GSM¶. in USA. It is interesting to note that competing technological standards have also limited competitions. µChina is going with some CDMA as . India.modes of privatization have been observed in other countries. In Vietnam. Countries are divided in their technical options for mobile networks. network was publicly managed with foreign operators participating in provision of training. several countries are now opting for more than one standards. Korea. In Thailand. Indonesia and Malaysia have opted for GSM in cellular mobile network. While Europe predominantly opted for Global System for Mobile communications (GSM) technology and USA for Code Division Multiple Access (CDMA). However. For example.

Government Initiatives The Government has taken the following main initiatives for the growth of the Telecom Sector: ‡ All telecom services have been opened up for free competition for unprecedented growth .¶ India is using CDMA in Wireless in Local Loop (WLL).well. Multiple technological standards fragment market rendering base stations purchased from one company unworkable with switches bought from another company potentially limiting the scope of exploitation of economies of scale that could accrue in a multi-vendor environment.

Entry fee for ILD reduced to Rs. ‡ Entry fee for NLD licenses was reduced to Rs. 2. single tariff of Re.e.per minute to anywhere in India was introduced from 1st March 2006 by the Public Sector Undertakings. Calling Party Pays (CPP) regime was implemented with effect from 1st May 2003 ‡ Guidelines for Unified Access Service License regime were issued in November 2003. 100 Crore. 1/.5 Crore from Rs. 25 Crore ‡ Lease line charges have been reduced to make the bandwidth available at competitive prices to facilitate growth in IT enabled services ‡ One India plan i. ‡ License fee for infrastructure Provider-II reduced from 15 per cent to 6 per cent of the Adjusted Gross Revenue and spectrum charges between 2 to 4 per cent in June 2004. This tariff was emulated by most of the private service providers . Specified capital goods and all inputs required to manufacture ITA-I. 2. 27 licenses out of 31 Basic Service Licenses were converted to Unified Access Service Licenses ‡ In April 2004. license fee for Unified Access Service Providers (UAS) was reduced by 2 per cent.5 Crore from Rs. items are at zero Customs Duty ‡ Availability of low cost mobile handsets The international Long Distance Services (ILDS) opened with effect from April 2002.‡ 217 (Information Technology Agreement) ITA-I items are at zero Customs Duty.

VSAT commercial and Internet Service Provider (ISP) with internet telephony (restricted) licenses was reduced to 6 per cent of Adjusted Gross Revenue (AGR) with effort from Jan 2006. . Infrastructure Provider-II. For the telecom sector. ‡ Annual license fee for National Long Distance (NLD). ‡ The Government¶s policy is neutral on use of technology by telecom service providers subject to availability of scarce resources such as spectrum etc. International Long Distance (ILD).when India embarked on economic liberalisation. Overseas Corporate Bodies (OCBs). foreign entities. American Depository Receipts (ADRs)/Global Depository Receipts (GDRs) etc. ‡ License Fees 6-10 per cent of Adjusted Gross Revenue (AGR) Foreign Direct Investment Policy Foreign Direct Investment (FDI) was permitted in the telecom sector beginning with the telecom manufacturing segment in 1991 . This scheme has led to death of distance in telecommunication and is going to be instrumental in promoting National Integration further ‡ The robust telecom network has also facilitated the expansion of BPO industry that is having 500.also. Foreign Institutional Investors (FIIs).000 employees now and adding 400 employees per day. FDI includes investment made by Non-Resident Indians (NRIs). FDI is defined as investment made by non-residents in the equity capital of a company.

ISPs not providing gateways (Both for satellite and submarine cables) .Electronic Mail .Radio Paging Service ‡ FDI up to 100 per cent permitted in respect to the following telecom services: . Value Added Services and Global Mobile Personal Communications by Satellite. ‡ Foreign Direct Investment up to 74 per cent permitted.Internet Service (with gateways) .Present FDI Policy for the Telecom sector: ‡ In Basic. subject to licensing and security requirements for the following: . International Long Distance. FDI is limited to 49 per cent (under automatic route) subject to grant of licence from the Department of Telecommunications and adherence by the companies (who are investing and the companies in which investment is being made) to the licence conditions for foreign equity cap and lock-in period for transfer and addition of equity and other license provisions.Infrastructure Providers (Category II) . National Long Distance.Voice Mail The above is subject to the following conditions: . Cellular Mobile.Infrastructure Providers providing dark fibre (IP Category I) .

Radio Paging Service.FDI up to 100 per cent is allowed subject to the condition that such companies would divest 26 per cent of their equity in favour of Indian public within 5 years. . ‡ In the manufacturing sector 100 per cent FDI is permitted under the automatic route. FDI is permitted up to 49 per cent (under automatic route) subject to grant of license from Department of Telecommunications ‡ Foreign direct investment up to 74 per cent permitted. Cellular Mobile. paging and Value Added service. . Infrastructure Providers (category-II). and ..Electronic Mail. and Global Mobile Personal Communications by Satellite.The above services would be subject to licensing and security requirements. ‡ In Basic. subject to licensing and security requirements for the Internet Service (with gateways). .ISPs not providing gateways (both for satellite and submarine cables). . wherever required. ‡ FDI up to 100 per cent permitted in respect of .Infrastructure Providers providing dark fibre (IP Category I). if these companies are listed in other parts of the world.Proposals for FDI beyond 49 per cent shall be considered by Foreign Investment Promotion Board (FIPB) on a case-to-case basis.

Voice Mail ‡ FDI up to 49 per cent is also permitted in an investment company. ‡ Proposals for FDI beyond 49 per cent shall be considered by FIPB on case to case basis. set up for making investment in the telecom companies licensed to operate telecom services. ‡ Manufacturing . wherever required. Investment by these investment companies in a telecom service company is treated as part of domestic equity and is not set of against the foreign equity cap. if these companies are listed in other parts of the world. .100 per cent FDI is permitted under automatic route.. ‡ FDI is subject to the following conditions FDI up to 100 per cent is allowed subject to the conditions that such companies would divest 26 per cent of their equity in favour of Indian public in 5 years. ‡ The above services would be subject to licensing and security requirements.

Major Players There are three types of players in telecom services: ‡ State owned companies (BSNL and MTNL) ‡ Private Indian owned companies (Reliance Infocomm. Escotel. BPL Mobile. Idea Cellular. Spice Communications). Tata Teleservices.) ‡ Foreign invested companies (Hutchison-Essar. Bharti Tele-Ventures. .

This has been witnessed due to strong competition that has brought down tariffs as well as simplification of policy environment that has promoted healthy competition among various players.Challenges & Opportunities The telecom sector has been one of the fastest growing sectors in the Indian economy in the past 4 years.6 per cent in March 2001. Currently of a size nearing 70 million (GSM and CDMA). from 3. .28 million mobile subscribers additions were registered in July 2006. this sector is expected to reach a size of nearly 200 million subscribers by financial year 2008. 5. Due to this reason. compared to 4.78 million in June and 4.25 million in May. telecom density in the country has risen to over 12 per cent at the end of January 2006. The mobile sector alone has been growing rapidly and has emerged as the fastest growing market in the whole worlds. More than 200 million subscribers addition is expected by July 2007.

Also as the sector is moving closer to maturity. Internet users base fast reaching near the English speaking population base. Operators can plan better expansion plan now. Local language and content required for further growth. hence. once the spectrum issues are sorted out. the use of broadband technology is being mooted and this will go a long way in improving the productivity of the Indian economy as well as turn out to be the next big opportunity for telecom companies after the mobile communications segment. For this purpose. further consolidation is a reality and this will lead to the survival of more profitable players in this segment. It¶s not without reason that India is tipped to be the world¶s third-larges economy by 2050! No wonder if it happens much earlier. This has led to a slew of mergers and acquisitions in the recent past. Infrastructure equipment cost is down to a fraction of what prevailed just a few years ago. Increased viability for the operators to expand to semi-urban and rural markets. accelerate growth further.The government has eased the rules regarding inter circle and intra circle mergers. . In order to further promote the use of Internet in the country the government is taking proactive steps to develop this sector with the help of the various players in this segment. Non-voice services and VAS are the gold mines. The big takeoff is expected with the rollout of 3G services in early 2007.

with its telecom success story. India. which has been a non-starter for close to a year now. represents an attractive and lucrative destination for investment. .Investors can look to capture the gains of the Indian telecom boom and diversify their operations outside developed economies that are marked by saturated telecom market and lower GDP growth rates. At a time when global telecom majors are struggling to cope with their losses and the rollout of 3G networks.

CHAPTER II Aircel .

Assam. Uttar Pradesh West) as per the company plans to become a pan-India operator by 2010. Mumbai. As on date. Orissa. UTSB has a 74% stake in Aircel and the remaining 26% is with Apollo Hospitals. . It is India¶s Seventh largest GSM mobile service provider with a subscriber base of over 51. Rest of West Bengal. Madhya Pradesh. Rest of Tamil Nadu. Karnataka. Kolkata. Punjab. Aircel has also obtained permission from Department of Telecommunications (DoT) to provide International Long Distance (ILD) and National Long Distance (NLD) telephony services. Additionally. Rest of Maharashtra & Goa. as of January 31. North East.72% among the GSM operators in the country. Bihar & Jharkhand. It has a market share of 6. Himachal Pradesh. It also has the largest service in Tamil Nadu. 2011. Gujarat.83 million. Uttar Pradesh East. Chennai. Delhi & NCR. Kerala. Aircel is present in all 23 telecom circles (including Andhra Pradesh. Aircel is a joint venture between Maxis Communications of Malaysia and Apollo Hospital Enterprise Ltd of India. Haryana. It offers both prepaid and postpaid GSM cellular phone coverage throughout India.Introduction to Aircel Aircel group is a mobile phone service provider in India. Rajasthan. Jammu & Kashmir.

In our first decade of operations. formed in 1994. It is a partnership of two flourishing brands. Aircel met with extraordinary success in the Eastern frontier circles. each a leader on its own turf. Our project pipeline is robust.Aircel word The Aircel Group is a result of alliance between Maxis Communications Berhad of Malaysia (74% equity) and Apollo Hospital Enterprise Ltd of India (26% equity). Aircel commenced operations in 1999. swiftly rolling out in new circles in the near future. In addition to our leadership position in Tamil Nadu. We worked hard and achieved that success by remaining focused on growth opportunities. During this period. we concentrated on building our foundations in the southern part of the country. Soon after our company began with its expansion in 2005 and has now set its sight on becoming a pan India operator. our company gained a strong foothold in 10 circles. Today. Aircel has a vision of delighting its customers by giving them the respect they deserve. offers affordable and outstanding mobile services to a vast subscriber base in India. We pride ourselves on customer satisfaction and managed to emerge as the market leaders in Assam and North Eastern states within 18 months of operations. Aircel operates in 18 telecommunication circles and the company is ready to embark on a dynamic expansion plan. to provide better access to our customers. The Aircel Group. allowing for sustainable long-term growth. and soon emerged as the regional market leaders. . Our goal is to provide our customers with exemplary service and persistently look for new ways to surpass their expectations.

allowing for sustainable long-term growth. In our first decade of operations. we concentrated on building our foundations in the southern part of the country. Soon after our company began with its expansion in 2005 and has now set its sight on becoming a pan India operator. offers affordable and outstanding mobile services to a vast subscriber base in India. we will continue to deliver superior services to our customers and will do our best to live up to their high expectations. All offerings are stimulating and at the same time extremely unique as Aircel continues to re-invent itself constantly to deliver the best and most up-to-date services. trust and excitement. The Aircel Group is a result of alliance between Maxis Communications Berhad of Malaysia (74% equity) and Apollo Hospital Enterprise Ltd of India (26% equity). Our goal is to provide our customers with exemplary service and persistently look for new ways to surpass their expectations.Aircel recognizes the tremendous growth in its customer base. We worked hard and achieved that success by remaining focused on growth opportunities. Aircel commenced operations in 1999. confidence and reliance among all stakeholders by anticipating their desires and fulfilling the same efficiently. formed in 1994. We have also got an authorization from the Department of Telecommunications for ILD and NLD telephony services and are now on track to realize our dream of becoming a nationwide player by the year 2010. each a leader on its own turf. Aircel offers its customers. It is a partnership of two flourishing brands. services and products that are easy to understand and use. and soon emerged as the regional market leaders. creativity. Our project pipeline is robust. Aircel has a vision of delighting its customers by giving them the respect they deserve. . The Aircel Group. The brand instils a felling of pride. With our foundations deeply set on our brand vales of simplicity.

creativity. With our foundations deeply set on our brand vales of simplicity. We have also got an authorization from the Department of Telecommunications for ILD and NLD telephony services and are now on track to realize our dream of becoming a nationwide player by the year 2010. to provide better access to our customers. confidence and reliance among all stakeholders by anticipating their desires and fulfilling the same efficiently. swiftly rolling out in new circles in the near future. Aircel operates in 18 telecommunication circles and the company is ready to embark on a dynamic expansion plan. our company gained a strong foothold in 10 circles. Aircel recognizes the tremendous growth in its customer base. services and products that are easy to understand and use. trust and excitement.In addition to our leadership position in Tamil Nadu. All offerings are stimulating and at the same time extremely unique as Aircel continues to re-invent itself constantly to deliver the best and most up-to-date services. we will continue to deliver superior services to our customers and will do our best to live up to their high expectations. Aircel offers its customers. Business solution . We pride ourselves on customer satisfaction and managed to emerge as the market leaders in Assam and North Eastern states within 18 months of operations. During this period. Today. Aircel met with extraordinary success in the Eastern frontier circles. The brand instils a felling of pride.

Our products ranging from premium internet services. These business solutions aim at generating value for consumers by effectively utilizing technology to advance their day to day processes. Aircel Services  My aircel.Technology related business solutions are an indispensable part of trade and commerce in today¶s marketplace. Let us assist you in implementing innovative business solutions customized to your needs and make your day to day business processes more efficient by simplifying your busy world. Aircel offers a comprehensive range of business related applications to empower every aspect of your business. . Today every company needs unique technology related solutions specific to their individual environment. Keeping the same in mind. MPLS VPN and Smart Stream provide a gamut of services that will support your needs. Our business enhancement solutions are aimed at generating profitable results for your enterprise. E-Conferencing.

 Pocket Internet  Dialer Tunes  Missed call Alert  Music on demand  Face book voice update  Pocket learing  Movie partner  Voice station  MMS  Blyk on aircel  Doctor on call  Job alert  Live astrology .

Different . Then the task of drawing inferences was accomplished with the help of percentage and graphic method. classified and tabulated manually and with help of computer. it was compiled.Chapter III Competitive Study between Aircel & Vodafone And Data Analysis After the data collection.

NO. DEMOGARPHIC FEATURES OF REPONDENTS 1. the survey was being done and following interpretation was being drawn. A B PARTICULARS MALE FEMALE NUMBER 39 11 %AGE 78% 22% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Male Femal e INTERPRETATION: The graphical representation of the table shows that out of 50 respondents 39 were male and 11 were female 2. Sex ratio of the respondents S. AGE GROUP OF RESPONDENTS . Keeping in mind the objectives of the study.suggestions given by me to the Company after analyzing the views of every respondent are also given in the report.

36% 25-35.NO. 3. and rest were above 45.S. A B C D PARTICULARS Matriculate Intermediate Graduation Post-Graduation NUMBER 8 17 19 56 %AGE 16 34 38 12 . A B C D PARTICULARS 15-25 25-35 35-45 Above 45 NUMBER 21 18 6 5 %AGE 42% 36% 12% 10% INTERPRETATION: The graphical representation of the table shows that out of total respondents 42% were of age 15-25. 12% 35-45.NO. LITERACY RATE AMONG THE RESPONDENTS S.

Who is your current service provider? S. A B C PARTICULARS Aircel Vodafone Other NUMBER 14 25 11 %AGE 28 50 22 . 8 were matriculate.NO.INTERPRETATION: The graphical representation of the table shows that out of total respondents postgraduate.17 were intermediate.19graduateand rest 6 were 4.

Aircel INTERPRETATION The 14 person were used Air Tel and 25 person were used vodaphone and 11 were used other. For how long you are using this mobile connection? Aircel S. 5. A B C PARTICULARS Less than 6 month 6 to 12 months Above 12 months NUMBER 2 3 9 %AGE 14% 21% 65% .NO.

A B C PARTICULARS Less than 6 month 6 to 12 months Above 12 months NUMBER 1 2 8 %AGE 9% 18% 73% .NO.NO.Interpretation Two person were used since six month and three were used since twelve months and nine were used since two year. Vodafone S. A B C PARTICULARS Less than 6 month 6 to 12 months Above 12 months NUMBER 1 3 21 %AGE 4% 12% 84% INTERPRETATION The one person were used since six months and three were used since one year and twenty were used since two year Other S.

6. What was the reason for choosing this mobile connection? Aircel S. A B C D PARTICULARS Recommended by friend and relative Recommended by retailer Brand image Advertisement NUMBER 5 2 1 6 %AGE 36% 14% 7% 43% .NO.INTERPRETATION The one person were used since six months and two were used since one year and eight were used since two year.

A B C D PARTICULARS Recommended by friend and relative Recommended by retailer Brand image Advertisement NUMBER 6 2 8 10 %AGE 24% 8% 28% 40% INTREPRETATION: Six were recommended by friends and relative and two were by retailer and seven were by brand image and ten were by advertisement.INTREPRETATION: Five were recommended by friends and relative and two were by retailer and one was by brand image and six were by advertisement. Vodafone S.NO. A B C D PARTICULARS Recommended by friend and relative Recommended by retailer Brand image Advertisement NUMBER 2 2 6 1 %AGE 18% 18% 55% 9% .NO. Other S.

INTREPRETATION: Two were recommended by friends and relative and two were by retailer and six were by brand image and one was by advertisement 7.NO. While purchasing a connection does advertisement plays any role? S. S. A B PARTICULARS Yes No NUMBER 42 8 %AGE 84% 16% INTERPRETATION: The forty two people were saying yes and eight were says no. A PARTICULARS Television NUMBER 31 %AGE 62% .NO.

9.NO. How well advertisements of the Aircel catch your attention? . A B C PARTICULARS Aircel Vodafone Any other NUMBER 21 24 5 %AGE 42% 48% 10% Aircel INTERPRETATION: mostly Vodafone have good advertisement 10.B C D Radio Newspaper Magazine 0 11 8 0% 22% 16% 8. From where you watch the advertisement most? INTERPRETATION: The mostly people sees advertisement in the television . Which telecommunication has good advertisements? S.

NO.NO.S. 11. A B C D PARTICULARS Very well Some what well Undicided Not at all NUMBER 26 10 6 8 %AGE 52% 20% 12% 16% . How well did the advertisement of Vodafone catch your attention? S. A B C D PARTICULARS Very well Somewhat well Undecided Not at all NUMBER 22 12 6 10 %AGE 44% 24% 12% 20% INTERPRETATION: The 22 person says very well and 12 person says some what well and 6 were undecided and 10 were says no.

INTERPRETATION: The 26 person says very well and 10 person says some what well and 6 were undecided and 8 were says no. 12. Based on advertisements made by company.NO. would you like to go for more connection for you or your family in future? . A B C PARTICULARS Yes No Undecided NUMBER 34 12 4 %AGE 68% 24% 8% INTERPRETATION: The 34 person says yes and 12 person says no and 4 person were no response. Do you think that advertisement made by company informs you about these new products? S. 13.

Do you collect any information search before making purchase? S.S.NO. A B C PARTICULARS Yes No Undecided NUMBER 38 7 5 %AGE 76% 14% 10% INTERPRETATION: The 38 person says yes and 7 people says no and 5 person were no response. 14. which sources are used? . A B No PARTICULARS Yes NUMBER 42 8 %AGE 84% 16% INTERPRETATION: The forty two person were saying yes and eight were says no 15.NO. If yes.

S. A B C D E F PARTICULARS Operator Reference Dealer Advertisement Magazine Reference from friends and relative Any other NUMBER 5 8 25 4 6 2 %AGE 10% 16% 50% 8% 12% 4% .NO.

6. 7. on many occasions the respondent groups gave us a cold holder.LIMITATIONS No project is without limitations and it becomes essential to figure out the various constraints that we underwent during the study. . 3. Some retailers did not answer all the questions or do not have time to answer. The following points in this direction would add to our total deliberations:1. which was being studied. Lack of proper information and experience due to short period of time. Some retailers/wholesalers gave biased or incomplete information regarding the study. Lack of time is the basic limitation in the project. During the study. 4. 5. 2. Some retailers/whole sellers refuse to cooperate with the queries. The respondents from whom primary data was gathered any times displayed complete ignorance about the complete branded range.

2.CONCLUSIONS 1. Maximum number of respondents were in favor of that. they would like to purchase more connection of the company with good advertisement policy. People like to watch advertisement on television mostly. . 3. 4. Maximum respondents were in favor of that. Respondents like to purchase new mobile connection based on advertisements. Vodafone¶s advertising is better than other companies.

Aircelworld. Sharma Research Methodology ± C. Kothari Websites: www.in .india.com www. All the material detailed below provides effective help and a guiding layout while designing this text report.R.com www.12 Market Research ± D.google. Books: Principles of Marketing ±Philip Kotler & Kevin Keller edi.com www.Vodafone.D. Magazines/Journals and Web Sites have been referred.BIBLIOGRAPHY In this project report. while finalizing and for analyzing quality problem in details the following Books.

c) Above 12 months 7. from where you watch the advertisement most a) Television . What were the reasons for choosing this mobile connection? a) Recommended by friends or relatives.QUESTIONNAIRE Dear Sir/Madam I am the student of MBA-4th Semester at Northern India Engineering College doing a project ³THE IMPACT OF ADVERTIS ING ON BUYER BEHAVIO UR: . Education: (a) Matriculate (b) Female (b) 25-35 (d) Above 45 (b) Intermediate (C) Graduation (d) Postgraduate 5. Age: (a) 15-25 (c) 35-45 4. b) 6 to 12 months. Sex: (a) Male 3.A STUDY ON A IRCEL V /S VODAF ONE´ Please co-operates to fill this questionnaire. Who is your current service provider? a) Aircel b) Vodafone c) Any other 6. While purchasing a connection advertising plays any role a) Yes b) No 9. For how long you are using this mobile connection? a) Less than 6 months. Name_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 2. 1. b) Recommended by retailers. c) Brand image d) Advertisement 8.

If yes. Do you collect any information search before making purchase? Yes No 15. How well did advertisement of the Aircel catch your attention? a) Very well b) Somewhat well C) Undecided d) Not at all. which sources are used? a) Magazines b) Dealers c) Operators references d) Advertisement e) Reference from friends and relatives f) Any other ³Thanks for your valuable time and co-operation´ . 12. Do you think that advertisement made by company informs you about there products? .b) Radio c) Newspaper d) Magazines 10.a) Yes b) No C) Undecided 14. Which telecommunication has creative advertising? a) Air Tel b) Vodafone c) Any other 11. How well did the advertisement of the Vodafone catch your attention? a) Very well b) Somewhat well C) undecided d) Not at all 13.