Market Sizing and Future Growth Potential of Telecom in ABS Segment

Prepared By: Jatin Trikha Manish Garg Supreet Singh

About Bharti Airtel
Bharti Airtel Ltd formerly known as (Bharti Tele-Ventures Ltd), incorporated in 7th July,1995 is part of Bharti Enterprises and is India’s Leading provider of Telecom Services. Bharti Airtel has been structured into 3 individual SBU’s.

Telemedia Services Mobile Services

Enterprise Services

About the Project
 The project included Market Research of the

corporate/SME(Small and Medium Enterprises) segment in a small part of the Delhi/NCR zone. Data collected was obtained through telephonic interview as well as direct interviews.
 The project was undertaken to find out concentration of

different service providers of landline and broadband (DSLDigital Service Line), and different influencing factors while selecting a particular service provider.
 The target of the project is focused on the high revenue

customers who are currently using landline and broadband service from service providers other than Airtel..

OBJECTIVE OF THE STUDY
The project “Market sizing and future growth potential of telecom in the ABS segment” is carried out with following objective:
 To find out concentration of different service providers in corporate

sector in Delhi/NCR region.
 To find out different factors which influence customers in selecting any

service provider.  
 To know different parameters by using which better services can be

provided to corporate clients.
 To determine customer’s satisfaction level and reasons of

dissatisfaction.  
  To calculate ARPU(Average Revenue Per User) factor.

Important Metrics
Average Revenue Per User(ARPU) is computed by dividing company’s total revenues during certain period by its average customers in the same period. A higher ARPU is better for the company. Churn is calculated by dividing the total number of disconnections during the certain period by the average customers in the same period. A lower churn is better for the company. MoU(Minutes of Usage) is the duration for which a customer uses the network. Higher MoU is better for the company. Subscriber Base refers to the number of individuals that use or subscribe to company’s services.A larger subscriber base is better for the company.

Competitors
The main competitors of the company are:
 MTNL/BSNL  Reliance Communication  Tata Indicom
S.No. Wired-Line Service Provider Bharti Airtel Limited Reliance Communications Tata Teleservices Total Subscribers Share in %

1 2 3 4 5 6 7

2,756,254 1,115,693 929,564

7.28 2.95 2.45 9.45 77.09 0.46 0.32

Mahanagar Telephone 3,575,909 Nigam Ltd. Bharat Sanchar Nigam 29,149,831 Ltd. HFCL Infotel 162,044 STL 122,573

Current Market Share

Research Methodology
Research Plan Data Sources Research Design Research Approach Sampling Unit Sample Size Data Collection Used Primary Data and Secondary Data Descriptive study Questionnaire Corporate Offices of Delhi/NCR 230 Direct and Telephonic interview

Analysis
1. Analysis of Satisfaction of Customers:
Airtel Satisfied with Service Not Satisfied with Total Service 138 33 171 Other 222 78 300 Total 360 111 471

Null Hypotheses:The number of Airtel customers who are satisfied with the
service are more in number as compared to other operators. Alternate Hypotheses:The number of Airtel Customers who are satisfied with the service are less in number as compared to other operators.
Observed 138 Expected 130.7 O–E 7.3 (O - E)2 53.29 (O - E)2/E 0.41

222

229.3

-7.3

53.29

0.23

33

40.3

-7.3

53.29

1.32

78

70.7

7.3

53.29

0.75 ∑(O-E)2/E = 2.71

 Observed Value is 2.71, which is the Chi-square value  Degree of freedom (υ) = (r-1) (c-1) = (2-1) (2-1) = 1  The tabulated value on.01 confidence interval is as follows:

Tabulated value, .01, 1= 3.84

  The observed value of 2.71 is less than Critical

table value of 3.84, so the decision is to accept null hypothesis. Hence I accept null hypothesis and this shows that the number of Airtel customers who are satisfied with the service are more in number as compared to other operators.

 

2. Analysis of difference in use of Landline and Internet connection:
Airtel MTNL Others Total

Use of Voice lines

99

180

38

317

Use of Internet

72

62

20

154

Total

171

242

58

471

Null Hypothesis: There is no difference in use of Voice line and Internet for the same service provider. Alternative Hypothesis: There is difference in use of Voice line and Internet for the same service provider.

Chi-Square:
Observed 99 Expected 115.08 O–E -16.08 (O - E)2 258.56 (O - E)2/E 2.24

180

162.87

17.13

293.43

1.80

38

39.03

-1.03

1.06

0.02

72

55.91

16.09

258.88

4.63

62

79.12

-17.12

293.03

3.70

20

18.96

1.04

1.08

0.05

∑(O-E)2/E = 12.44

 Observed Value is 12.44, which is the Chi-square value.  Degree of freedom (υ) = (r-1) (c-1) = (2-1) (3-1) = 2  The tabulated value on.05 confidence interval is as follows:

Tabulated value, .05, 2= 5.99
 The observed value of 12.44 is greater than Critical table

value of 5.99, so the decision is to reject null hypothesis. Hence I accept Alternate hypothesis and there is difference in use of Voice line and Internet for the same service provider.

Total Number of DEL

Revenue from DEL

Internet Penetration

Accounts with same Service Provider for Voice and Data

Revenue Market Share(RMS) of Landline:
RMS = {(Total revenue of Airtel Landlines) / (Total Revenue of all Service Providers)} * 100 RMS = (3122600/7974300) * 100 RMS = 39.15%

Customer Market Share(CMS) of Landline:
CMS = {(Total Airtel Landlines) / (Total Landlines of all Service Providers)} * 100 CMS = (1985/5259) * 100 CMS = 38%

Average Revenue Per User(ARPU):
a. 100% Airtel Owned Account= 90370/35 = Rs. 2582 b. Partial penetrated Account= 24640/64 = Rs. 385

Limitations
 The limitation of the research work is that there might be a

chance that only those persons might be selected who prefer Airtel services over another operators.
 Another major limitation of the project is that the sample size

is small, so our result can have some tolerance level.
 Thirdly, it is difficult to calculate market share of the company

only on the basis of revenue.

Observations

The market research help me in finding the Customer market share and Revenue market share. The way Airtel is expanding its customer base is really good for the future of the company. If the company will carry on their business the way they are dealing with there are more chances that they will be the market leader very soon.

Factors helping their way out:
 The Brand “AIRTEL” is itself a reason for their success.  Their policy of retaining existing customers instead of just

acquiring new customers.
 The services company is providing to the customers are better

than its competitors.
 The network and services that the company is providing in

mobility is also helping in inducing the customer.  

Factors could prove to be obstacles in their way:

 In landline and broadband services Airtel is having a

limited network coverage and it is still to reach every part of the country unlike BSNL and MTNL.
 Company’s competitors are coming up with very

lucrative plans, so the company needs to cut down on its prices.  

Suggestions
 The USP (Unique Selling Proposition) of Airtel is its service so it

should be made maintained in order to increase the market share.
 The company can also work on acquiring the customers of its

competitors more aggressively than what they are doing at present.
 Among high end users there is maximum usage of local and

STD calls. Hence more flexible plans separately for local and for STD calls can be workout to gain extra market share.
 The company at the later stage can go for the whole market

instead of just a particular class of customers.
   

 According to my data analysis of 230 accounts Airtel’s Customer

Conclusions

Market Share is 38% and its Revenue Market Share is 39.15%.
 According to secondary data (Source TRAI) Airtel had a market

share of 7.28%, while MTNL is just a little ahead with a market share of 9.45% and Bharti Airtel will definitely overtake MTNL in coming years if it continue to provide same level of service.
 TTSL despite having presence in Bihar, HP, Orrisa other than

states where Airtel operates, have less than 3% of market share.
 Reliance is also far behind in fixed line with a market share of just

2.95%.
 The reason is the 360 degree aggressive marketing and branding

of Airtel and bringing broadband and telephone services under one umbrella.

Thanks!!!

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