Cellular Wars

Presented By: Aarti Gudhka Bhavik Desai Nisha Nair Vinit Shah

Industry background
Major driving force of the Indian economy. Contributes about 1.5% of the GDP. The industry that was earlier growing at 45%-CAGR has stagnated over the last few years due to increased competition

Industry Profile.
Effective communication infrastructure is very much important to any countrys socio-economic progress. Connections: 1991-5.07 million 2012-903.73 milloin. Second largest network in the world. Grown to 44.56% compounded annually.

Industry Profile. (Contd)

Pre-paid has a market share of more than 97% The industry that was earlier growing at 45%-CAGR has stagnated over the last few years due to increased competition Airtel with a 20% market-share is the market leader

Market Share:

Industry Trends:
Impact of Mobile Number Portability. Cancellation of 122 licenses Draft-National Telecom Policy 2011 Foreign Expansion & FDI Rural Expansion:

Tariff Wars

Company Profile: Idea Cellular

1995- IDEA Cellular limited, a GSM mobile services provider was established as Birla Communications. 1996-entered into a joint venture with AT&T Corporation and Grasim Industries, forming Birla AT&T Communications Limited 2000-brand IDEA was created a second merger with Tata Cellular Limited

Contd
2006- Acquired all the shares from TATA group to become the largest shareholder 2007- Went public 2009- became a pan-India operator 2011- reached the milestone of 100 million subscribers

Vision and Mission Statement

Vision: To be the most customer focused mobile service brand, continuously innovating to help liberate our customers from the shackles of time and space companies. Mission: We will delight our customers while meeting their individual communication needs anytime anywhere. It shows the commitment of the company in serving an individuals needs without compromising on the quality of service.

Company Profile: Airtel

Largest telecom operator in India Fully integrated player offering end to end telecom solutions 1995- Started as Bharti Tele-Ventures in Delhi Operates in 22 circles in India Has the largest customer base with 19.58% market share

Vision and Mission Statement:

Vision: By 2015 Airtel will be the most loved brand, enriching the lives of millions. Mission: We at Airtel always think in fresh and innovative ways about the needs of our customers and how we want them to feel. We deliver what we promise and go out of our way to delight the customer with a little bit more.

SBUs of Airtel:
Mobile Services Broadband & Telephone Services
2G/3G Rural Market

Fixed Line
Broadband DTH

Enterprise Services

Carrier Corporate

PEST Analysis
Political
Lowest tariff rates in the world
FDI ceiling in the telecom sector has been raised to 74% Mobile number portability (MNP) implementation Obligations are defined regarding 3G auction and bidding Amendments related to security features have been made

Economical
Growing subscriber base
Approximately 30% of the service tax revenue is contributed by telecom sector. One of the major sectors providing direct employment

Social
Idea Cellular
Gained maximum number Customer through MNP Won prestigious Golden Peacock Award for its innovative product My gang in 2008, for college students. Their advertisement punch line An idea can change your life created self image of the brand It has taken some serious issues prevailing in the society like Tree saving and raising the issues of population through its advertisements

Airtel
Airtel new advertisement Jo Tera Hai Woh Mera Hai and Har ek Friend Zaruri Hota Hai. The company has targeted the youth segment acting as a means of staying connected always.

Technological
Idea Cellular
Idea Cellular invests huge amount in the innovation embedded solution to enhance its technology, network, wireless space and Customer Relationship Management
They use OLTP, CICS software to optimize the data security, network and mobility management

Airtel
First wireless service provider which supplies roaming services, International and long distance communication services and Value Added Services.
Bharti Airtel has high-speed optic fiber network which spans 126,357 kms all over India.

Porters 5 forces Analysis

Potential Entrants

Low

Suppliers Power

Industry Rivalry

Buyer Power

Low

High

Subbstitut es

High

SWOT Analysis: Idea

Strength -3rd largest mobile service operators. -ISO certified across 22 centres. -Strong Distribution channel. Weakness

-Less fund raising capacity

-Incurred losses till 2010

Opportunities
-Untapped landscape -New Technologies Threats -Regulatory environment -Increased Competition.

-Growing overseas
-Strong strategic partnership

SWOT Analysis: Airtel

Strength: -Very focused on telecom -Leadership in telecom industry -International Submarine cables. Opportunity -Untapped landscape -New Technologies -Growing overseas Threat: -Regulatory environment. -Increased Competition. Weakness: -Outsourcing of core systems -Improper customer service.

BCG Matrix: Idea

BCG Matrix: Airtel

Strategies Adopted: Idea Cellular

Idea mobile Commerce Service Ltd. provides Mobile Banking Services through an alliance with AXIS Bank with a facility titled IDEA Cash

Merger with Spice Communication Ltd.

Joint Ventures: Indus Towers Ltd. in which Aditya Birla telecom Ltd. holds a 16% stake, is a Joint Venture with the Bharti Infratel & Vodafone Essar & provides passive infrastructure services in 15 service areas

Strategies: Bharti Airtel

Acquisitions and Mergers: Zain, Telecom Seychelles

Partnership with world class partners- IBM, Tech Mahindra, Spanco, NSN, Huawei, Spanco, Avaya and State Bank of India etc.
Group tower company, Bharti Infratel. Joint venture: Airtel- Ericsson- This is an agreement for 5 years , according to this Ericsson will manage and optimize and modernize and upgrade Airtels mobile networks in Africa. Shares in-- Singtel (32.15%) &Vodafone (4.4%)

Marketing Strategies: Idea Cellular

IDEA targets its ads towards the various plans that it offers with its What an IDEA campaigns. IDEA has focussed on increasing awareness among the Indian consumers. It has associated itself with popular Indian TV properties like KBC and Filmfare Awards. It has also sponsored three IPL teams Mumbai Indians, Deccan Chargers and Delhi Daredevils.

With the resounding success of the IPL, this has given IDEA, pan-India recognition.

Marketing Strategies: Idea Cellular

Marketing Strategies: Airtel

Airtel has focussed on conveying its brand image and improving brand equity through its advertising Airtel has concentrated on establishing itself in the global arena. It was the title sponsor for the T20 Champions League and the Indian Formula-1 Grand Prix. Added to this is its partnership with Manchester United FC, the worlds most popular Football Club to give it global visibility.

Marketing Strategies: Airtel

Strategies: Successful or Not: Idea Cellular

The MNP factor proved to be beneficial to IDEA. Idea leads the industry in attracting MNP. Idea is now into manufacturing of Smartphones which was not able to get the market as expected.

Strategies: Successful or Not: Airtel

Maximum market share about 27.61% in GSM segment More than 50% of people disliked the image change. Bharti Airtels rebranding strategy was not as effective as it had to be, Maximum customer complaints has resulted loss of 3.2lakh customers after introduction of MNP

Lessons to Draw

Pricing

Establishment of Distribution Channel

Untapped Markets