CELLULAR WAR

Presented To,

Prof. Suhas Rane
Presented By : Bhumika (08) Moh. Iqbal Khan (38) Kamaldeep Godara (29) Harendra (22)

BRIEF ABOUT THE INDUSTRY
1851 : First operational landline was laid down near kolkata. 1881 : The telephone sector started in india. 1985 : DOT was established, a service provider for domestic and long distant communication separate from postal system. 1986 : DOT converted into two a) VSNL b) MTNL 1997 : TRAI was established. 2000 : DOT came be known as BSNL

Facts About Ind.
Total Telecom Subscriber 429.72(March 2009) Million Wireless Subscriber 391.76 Wire line Subscriber India's urban mobile user India¶s rural mobile users 37.96
291.76

100

Telecom Services
Network Infrastructure companies: Cisco, Ericsson Telecom Solutions Providers : Mahindra, Aricent, IBM, Wipro

Telecom
Telecom Service Provider: Airtel, Idea, Reliance, Vodafone, Tata, Aircel Telecom Equipment Manufacturer: Nokia, Motorola, Samsung, LG, Panasonic

Industry Revenue
Year 2002-03 2003-04 2004-05 2005-06 2006-07 2008-09 Revenue(US$ billion) 9 10 11 15 20 32

Subscriber Growth of Wireless (GSM & CDMA) in Million

FDI in Telecom Sector (US$ million)
2500
2345.38

2000

1500
1275.65

FDI in Telecom Sector (US$ million)

1000
680 521

500

129

116

0

2008-09

2007-08

2006-07

2005-06

2004-05

2003-04

GSM has a Market Share of 76% 76%

Reliance has Registered a 7.2 % Market In CDMA

PORTER¶S FIVE FORCES

Force 1 The Degree of Rivalry Very less time to gain advantage by an innovation Price wars

Force 2 The Threat of New Entrants 

Economies of scale Distribution channels Customer Switching Costs

Force 3 The Threat of Substitutes VOIP (Skype, Messenger etc.) Online Chat Email Satellite phones

Force 4 Bargaining Power Of Buyer 
Lack of differentiation among the service provider  Cut throat competition  Customer is price sensitive  Low switching costs

Force 5 Bargaining Power Of Supplier

Large number of suppliers

Initial Days

SWOT
Strength ‡ ‡ Largest India Service provider in Weakness ‡ Till recently did not own mobile towers ‡ Failure of MTN deal will signal no real market investment ‡ Data services not delivering on its high expectations

Strategic alliance with Syntel, Nokia and Sony gives them access to best global technologies

Opportunities ‡ Strategic partnership with Blackberry ‡ Focus on expanding business in rural areas ‡ Tie up with other companies in ³Indus Towers´

Threats ‡ Presence of strong competitors ‡ Increasing competition from GSM & CDMA ‡ Potential entry of global players

REASON FOR SUCCESS
Maximizing Customers¶ product and service experiences. In touch with current market trends. Proper positioning of brand in the market. Brand Consistency. Value Addition to products and services Differentiating itself from other players. Promotional offers.

NEW CHALLENGES FOR AIRTEL
Vodafone¶s entry in Indian telecom market posed 1st real threat to BAL¶s supremacy. Vodafone planned to invest $ 2 billion to establish and introduce new 3G technologies. Vodafone entry increased competition and better services to customer. Entry of new players like Reliance and Tata in GSM. New player expected to break oligopoly on market. Airtel did not have plans to start CDMA. BSNL, Reliance, Tata are players in both GSM & CDMA.

FINANCIAL PERFORMANCE
Heading Net Revenue from Operations Net Profit/Loss Before Tax
40000 35000 30000 25000 20000
FINANCIAL PERFORMANCE

FY¶05 7944.19 1564.27

FY¶ 06 11290.58 2285.8

FY¶ 07 17887.99 4601.37

FY¶ 08 25939.37 6972.54

FY¶ 09 34155.03 8161.53

Net Revenue from Operations Net Profit before Tax

15000
10000 5000 0

FY' 05

FY' 06

FY' 07

FY' 08

FY' 09

AIRTEL STRATEGY
‡ They are giving importance to rural penetration and high end users. ‡ By emphasizing rural markets they are paving way for the future, expanding their network ‡ Airtel is trying to expand it further ‡ Focusing on Value Added Offering and Schemes to expand market and gain customer loyalty

AIRTEL STRATEGY
BUSINESS PROCESS MANAGEMENT
‡ Process Innovations and Continuous Improvement through People Involvement ‡ Problem Investigation by "Fact Based - Root Cause Analysis"

CUSTOMER-DEFINED BUSINESS PROCESSES
Based on Customer Specifications, AirTel have webbed many business processes on the following concepts: ‡ Delivery time ‡ Turn around time ‡ Lead-time ‡ Time to market ‡ Other performance indicators

AIRTEL STRATEGY
NATURALLY, THE TARGET CUSTOMER WAS CLEARLY DEFINED: "We positioned AirTel as an aspirational and lifestyle brand, in a way that trivialized the price in the mind of the consumer. It was pitched not merely as a mobile service, but as something that gave him a badge value,³ ‡ In 1999, the rules of the game changed. The New Telecom Policy came into effect, replacing license fees with a revenue-sharing scheme and extending the license period from 10 to 20 years. ‡ Now, cellular service operators could drop their prices and target new customer segments. ‡ In 2002, Airtel signed on music composer,A R Rahman and changed its tune to "Live every moment": Rahman's signature tune for Airtel is, perhaps, the most downloaded ringtone in India. But that was just part of the ongoing communication. ‡

AIRTEL Recommendation 
Airtel should consider acquisition of domestic and local GSM service providers, thereby increasing its market share. E.g. , acquisition of Spice. It has to be quick to adapt to and bring new emerging technologies like 3G and 4G in India at affordable cost. It should start Mobile Bill Payment Van services. It should put more focus on entering into new countries and establishing itself as a global brand. It should expand its rural network coverage to widen its customer base.

AIRTEL AD CAMPAIGNS

RELIANCE COMMUNICATIONS
STARTED ON 28TH DEC, 2002 ON DHIRUBHAI AMBANI¶S 70TH BIRTHDAY. IT WAS CALLED RELIANCE INFOCOMM, NOW KNOW AS RELIANCE COMMUNICATIONS. FIRST AD FEATURED DHIRUBHAI AMBANI AND MUKESH AMBANI. THE MAIN AIM WAS ³TO PROVIDE MOBILES TO EVERYBODY´ INTRODUCED CDMA TECHNOLOGY IN INDIA

Reliance - SWOT
STRENGTH  Low Entry Cost  Commission Structure  Fast Activation Process  Network  Connectivity  Data GPRS OPPORTUNITY  Preference of GSM over CDMA  No. portability offer  Rural Telephony  Invest in International Market - Collaboration WEAKNESS  Distribution problem  Customer Care Service

THREAT  Political Decline  New Entrants  Market Demand

STRATEGIC WEAPONS OF RELIANCE

COST LEADERSHIP DIFFERENTIATION

ADVERTISING & PROMOTIONAL STRATEGY Achievement in business magazines, newspapers. Advertising Agency Reliance Spent $2 billion creating a GSM network in major cities. Free minutes to users Cutting down on Capital Expenditure Most of its initiatives like the Mobile TV, RIL India calling card, internet on the move and One India Plan (launched by RCL even before BSNL)

ADVERTISING & PROMOTIONAL STRATEGY 
µGo Colour campaign -nBaton baton mein rang chaa gaye hain) and µBus batan dabao campaign¶ was popular  Cheap lifetime validity offers and a phone @ Rs 777  Customer Generation - Tapping into Internal  Advertising ± Educating Masses and Evoking Passions  RWorld ± Reliance Way of Putting the World in Your Hands  Product Innovations - Connecting with Every Section of Society  Customer Service

Thank

You