OPTIMISATION OF

TELECOMMUNICATION
COSTS
( PRI + VOIP)
PROJECT LEADER : MR. AJIT JAIN
AHMEDABAD BRANCH

SPONSOR : MR. MOHAN NAIR

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Optimizing tele-communication cost at all branches
Crack team leader: Mr. Ajit Jain; Sponsor : Mr. Mohan Nair
Initiative Description
Reduce communication expense at the
branches by installing digital PRI, VOIPs
at branches
Rationale
Telecommunication costs can be significantly reduced by:
a. Moving to digital from analogue boxes
b. Installing digital PRIs
c. Hire lease lines for branches with high telecom costs
Savings estimates
Total telecommunication cost from branches= ~90 lacs
Estimated share to other branches and HO = 40% => 36 lacs
Telecom bill from HO to all branches = 25 lacs
Total telecom bill = 61 lacs
Number of lease lines required to connect all branches = 40
Total cost of lease lines @60,000 per line = 24 lacs/annum
Total savings = 37 lacs
Team members
Mr. Mohan Nair, Mr. Cyril Lobo, Mr. Anil Joshi, Miss Khurshid F.
Laher.
Commercial Division/ L&D function – Wave 1
Activity Plan
Phase 1: Demand assessment Time line
• List the present Communication and Data 15/05/09
Transmission needs at a sample branch
• Map telecommunication bill between branches in "to"
to "from" format
• Identify branches with highest telecom expenses
Phase 2: Create baseline cost structure 30/05/09
• Estimate the average cost of the various utilities
• List the different schemes under which these utilities
are registered
• Classify branches in different buckets based on
demand assessment and cost structure
Phase 3: Defining customized solutions
• Review all possible options available e.g. BRI from 15/06/09
PRI, FCT, Voice Over IP
• Find viable technical solutions with help of GIL
• Analyze the options available and cost benefit to
define custom solutions for branches
Phase 4: Pilot at Ahmadabad branch 30/06/09
Phase 5: National rollout and review 15/09/09 –
• Establish the savings based on the Pilot 15/12/09
• Implement the solution at 10 other branches
• Review for 3 mths, If successful, implement at all
locations
: Current stage
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VARIOUS COMMUNICATION & DATA FACILITY AT
BRANCH

• Mobile to Mobile
• Landline
• Fax
• RF Connectivity
• Lease Line
• ISDN Lines
• Data Transmission
• Video Conferencing VOIP
• Internal Communication
• Communication between Branch Locations
• Communication with HO & Branches
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MAP TELECOMMUNICATION BILL

• To prepare a format to capture the

information.

• Identify landline communication from

(total bill amount) and expected percentage
of communication from Branch to HO.

• Details of Landline.

4
 AREAS OF SAVINGS

• Landline to Mobile
• ISDN Rentals
• ISDN Pulse Rate
• Video Conferencing
• Warehouse to Office Landline Communication
• Intra-Branch and HO Communication
• ISDN Data Communication Cost
• Showroom to Office Landline Communication Cost

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 SAMPLE CASE OF EXPECTED SAVINGS -
AHMEDABAD BRANCH

Mode of Expected Installation

S. No. Description Remarks
Saving Saving p.m. Cost

1 Landline to Mobile Installing FCT Rs. 5000/- Rs. 8500/- Installed

BRI Card
2 ISDN Rs. 2400/-
(6 Lines)

Reducing Pulse Rs. 45000/- Installed

Rate from Rs.
3 ISDN Data Cost Rs. 6000/-
1.10 to Re. 0.65
p.

HO  Pending
4 VOIP Rs. 20000/-
Communication implementation

  TOTAL   Rs. 33400/-    

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 TIPS FOR REDUCING
TELECOMMUNICATION
EXPENSES WITH THE
AVAILABLE
INFRASTRUCTURE AT
BRANCHES
7
 Approach to Optimise Tele-communication Costs at
Branches

Branch Levers Target setting and

Tracking
prioritization identification implementation
• Collect data on tele- • One location multiple • Create monthly work • Track the financial
 communication costs
across all branches
 landlines to be covered
under single plan.
plan for each branch benefit from the
implemented levers

 • Converting landlines to • Implement identified

• Analyze tele- PRI lines. initiatives/levers in • Identify further
 communication costs each branch opportunities for tele-

• Fixing of FCT.
to identify top branches communication cost
and prioritize
 • Monthly reporting from reduction
• Creating awareness of
various pulse rates. each identified branch
on the levers
 • Increase mobile-to-mobile
use with CUG.

 • Using PRI to BRI card for

ISDN and VC.

 • Using VOIP.

14 Apr, 09 01 May, 09 15 May, 09 15 June, 09 30 June, 09

 Completed

 Near completion

 Started
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 Average Tele-communication Costs of Branches

TELECOMMUNICATION EXPENSES

120% 120%

CUM M P E RCE NTAGE

80% 80%
P E RCE NTAGE

Information flow difficult

being highly technical

40% 40%

20%
16%
12%
9% 8% 8% 8%
6% 5% 5%
1% 1% 0% 0% 0% 0% 0% 0% 0% 0% 0%
0% 0%
Ban Ah Cha Triv Luc Bhu Gu Mu Hyd Vis
Delh Che Kolk Pun Bho Raip Koc Patn Jaip Ran
galo med ndig and NCR kno w a w a mba era hak
i nnai ata e pal ur hi a ur chi
re aba arh rum w nes hati i bad apat

Percentage 20% 16% 12% 9% 8% 8% 8% 6% 5% 5% 1% 1% 0% 0% 0% 0% 0% 0% 0% 0% 0%

Cumm. Percentage 20% 36% 49% 58% 66% 74% 82% 88% 93% 98% 99% 100 100 100 100 100 100 100 100 100 100
2.75 1.69 1.15 1.10 0.19
0.66 PARAMETER IA IA IA IA IA IA
2.21 1.24 1.12 0.83 0.63 0.10 IA IA IA
IA = Information Awaited 9
 Top 7 branches account for almost 80% of total
Tele-Communication Costs

Tele-Communication Costs of Branches

100

80

60

Information flow difficult

40 being highly technical

20

0
Delhi Chennai Kolkatta Bangalor Ahmedab Pune Chandiga Bhopal Raipur Kochi Patna Trivandru NCR Jaipur Lucknow Bhuwane Guwahati Ranchi Mumbai HyderabadVishakhapatna
mi
e ad rh m shwar

Tel. Exps.
(Rs Lacs.) 2.75 2.21 1.69 1.24 1.15 1.12 1.10 0.83 0.66 0.63 0.19 0.10 IA IA IA IA IA IA IA IA

Focus on these 7 branches in first wave

IA = Information Awaited
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 8 categories of levers identified to reduce Tele-Communication Costs

A B
Commercial levers Non commercial levers
A1 B1
Convert all lines into one rental minimum pulse rate with Creating awareness of various pulse rates
group billing • Different usage attract different pulse rate.
• Advantage of total rental as Free Calling Value with • Matrix to be made and create awareness for
minimum pulse rate. optimising use.
• Sample matrix given.
A2
Converting Landlines to PRI Lines B2
• Tata offers PRI line with 30 channels at 65 p. pulse rate. Increase mobile-to-mobile use with CUG
• Convert to PRI where billing more than Rs. 15000/-. • Depending on Service provider, encourage different
• EPABX worth Rs. 3.5 L. offered free. businesses to go into one service provider.
• Maximise mobile-to-mobile use under CUG.
A3
Fixing of FCT
• Check IP instrument availability.
• Install FCT card at multiple locations.
• Cover them under CUG Plan.

A4
Converting ISDN lines to BRI lines
• Wherever PRI lines available, install PRI to BRI card.
• Advantage of pulse rate from Rs. 1.10 to Rs. 0.06p.
• Rental zero (included in PRI rent)
* Showroom to office / Video Conferencing.

Not all levers will be applicable to all branches, specific levers to be identified for each branch
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 8 categories of levers identified to reduce Tele-Communication Costs

Commercial levers
A5
Encourage use of mobile for STD
• Mobile to mobile / mobile to landline, STD rate per
minute is Re. 1/-.
• STD outside circle Rs. 1.30.
• Encourage use of mobile for STD.

A6
Installing VOIP
• Check for statutory compliance.
• Wherever IP instrument available install VOIP.
• Arrange for 64 KBPS extra band width.
• Communicate through VOIP for STD inter-branch /
HO communication.

Not all levers will be applicable to all branches, specific levers to be identified for each branch
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 8 levers to reduce Tele-Communication Costs

Levers description Savings estimate

1 Convert all lines into one rental minimum pulse rate with group billing TBC

2 Converting Landlines to PRI Lines TBC

3 Fixing of FCT TBC

4 Converting ISDN lines to BRI lines TBC

5 Encourage use of mobile for STD TBC

6 Installing VOIP TBC

7 Creating awareness of various pulse rates TBC

TBC
8 Increase mobile-to-mobile use with CUG

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 Matrix indicating cost for various options in
1 Tele-Communications at Ahmedabad Branch

Cost comparison of different service providers Implication

• Communication from mobili-

Landline
to-mobile or mobile-to landline
Vodaphone Vodaphone Airtel Airtel is cheaper.
within STD
CUG Others CUG Others • All STD, mobile-to-mobile or
Gujarat
Vodaphone CUG 0.00 0.20 0.30 0.30 0.70 1.00 mobile-to-landline is cheaper.
Vodaphone Others 0.20 0.20 0.30 0.30 0.70 1.00 • Calling from landline (with FCT) tp
Airtel CUG 0.30 0.30 0.00 0.15 0.60 1.00 mobile / landline is cheaper.
Airtel Others 0.30 0.30 0.15 0.15 0.60 1.00 • Calling from mobile-to-mobile,
Landline within Gujarat 0.65 0.65 0.65 0.65 0.22 1.00 same service provider, with CUG /
without CUG is cheaper, than
using cross service provider.
• Landline to Landline within State,
in some cases is cheaper.
• Encouraging Mobile usage as
compared to Landline generally
would be cheaper.

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 Illustrative – For discussion only

Specific levers for each branch being identified currently

Commercial Levers Non-Commercial Levers

Landlines to Fixing ISDN to Use Mobile Installing Awareness of Mobiles under
Branches One rental PRI Lines FCT BRI Lines for STD VOIP Pulse Rates CUG

DELHI
CHENNAI
KOLKATTA
BANGALORE
AHMEDABAD
PUNE
CHANDIGARH
BHOPAL
RAIPUR
KOCHI
PATNA
TRIVANDRUM

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 Illustrative – For discussion only

Specific levers for each branch being identified currently

Commercial Levers Non-Commercial Levers

Landlines to Fixing ISDN to Use Mobile Installing Awareness of Mobiles under
Branches One rental PRI Lines FCT BRI Lines for STD VOIP Pulse Rates CUG

NCR
JAIPUR
LUCKNOW
BHUWANESHWAR

GUWAHATI

RANCHI

MUMBAI

HYDERABAD

VISHAKAPATNAM

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HIGHLIGHTS OF MINUTES OF MEETING WITH
MR. CYRIL LOBO
1.  Installation of FCT with the existing EPABX will reduce the cost for
people dialling from Landline to Mobile, specially the back office
people.  In the long run, it may be also beneficial to provide mobiles to
back office persons, who interact with either sales or warehouse
teams regularly.
 
2.  Wherever possible install PRI to BRI card, wherever ports are
available, to do away with ISDN lines, specially used for connectivity
between 2 locations in the same branch, like showrooms.
 
3.  At length it was discussed on the benefits of VOIP for which logical
partitioning will be required to be done at HO and which your team has
indicated is possible to do.
 
4.  The infrastructure and hardware required to implement VOIP is
available at Mumbai, but depending on the model of EPABX, hardware
will have to be installed at branches for making it compatible.
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 HIGHLIGHTS OF MINUTES OF MEETING WITH
MR. CYRIL LOBO
5.  With GIL a joint meeting will be held with your team, which Mr. Mohan Nair will co-
ordinate for the technical help required to spare the lease line bandwidth or go in for
additional band width.
 
6.  To start with in the coming week or two, two major branches like Delhi, Chennai and
one medium sized branch like Ahmedabad can be taken as a sample for installation of
VOIP.
 
All of us have jointly agreed that this can bring in good savings and reduction in telecom
expenses.
 
7.  With the calling rates from mobile-to-mobile coming down, it was also discussed that
negotiations with Tata should be done to reduce their pulse rate from Rs. 0.65 p. to
atleast Rs. 0.30 p.
 
8.  Reliance has launched their new product with high speed, Broadband Plus and we
should look into the possibility of getting a static IP address for suitability for data
communication between two locations within the same branch.

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 HIGHLIGHTS OF MINUTES OF MEETING WITH
MR. CYRIL LOBO
9.  To negotiate with Reliance people, a team at Mumbai / Ahmedabad, for possibility of
having the Broadband Plus connectivity at lower hardware cost and fixed charges for
unlimited use.
 
10. It was suggested that for Ahmedabad we can buy one or two sample hardware of
Broadband Plus and then experiment for various utilities.
 
11.  It was also discussed that it is possible to connect VOIP if IP EPABX is not available
through digital phones, like warehouse to office, but whether we will be able to restrict
these calls getting diverted to conference in another service providers services is to be
reviewed.
 
The details prepared of various options to this cost by Ahmedabad branch should be
circulated and explained more in detail to all concerned.
 
12.  If Tata agrees to pool the billing of showroom and office, and if office billing is more
than Rs. 50,000/-, then PRI connection at showroom can also be thought of.
 
13.  The BRI port can also be used for video conferencing.
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LOGICAL PARTITIONING LEGAL

Circular from the Secretary of

Communication giving clearance of

logical partitioning

making VOIP legal.

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HIGHLY TECHNICAL

Branches unable to give correct information.

Suggestion :

1. Appoint technical person

(Person in Ahmedabad identified and ready to
work at 3% of Hardware cost, travel and stay
extra)

2. E & E to co-ordinate.
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TECHNICAL TERMS

BRI - Basic Rate Interface (64 Kbps)

PRI - Primary Rate Interface (64x30+128 Kbps for

Digital)

VPN - Virtual Private Network

ISDN - Inter Server Digital Net

FCT - Fixed Cellular Terminal

VOIP - Voice Over IP

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