1

PREFACE
Preparing a project of this nature is an arduous task and I was fortunate enough to get support from a large number o persons. I wish to express my deep sense of gratitude to all those who generously helped in successful completion of this report by sharing their invaluable time and knowledge. It is my proud and previledge to express my deep regards to Respected HOD Dr.Pramesh Gautam, Head of Department of Business Management , SWAMI VIVEKANAND INSTITUTE OF TECHNOLOGY, SAGAR for allowing me to undertake this project. I feel extremely exhilarated to have completed this project under the able and inspiring guidance of Miss Sweta Rajput she rendered me all possible help me guidance while reviewing the manuscript in finalising the report. I also extend my deep regards to my teachers , family members , friends and all those whose encouragement has infused courage in me to complete to work successfully.
ANKIT JAIN MBA 1 ST SEM..

ACKNOWLEDGEMENT
Preparing a project of this nature is an arduous task and I was fortunate enough to get support from a large number o persons. I wish to express my deep sense of gratitude to all those who generously helped in successful completion of this report by sharing their invaluable time and knowledge. It is my proud and previledge to express my deep regards to Respected , Head of Department

Dr.Pramesh Gautam, Department of Business

Management , SWAMI VIVEKANAND INSTITUTE OF TECHNOLOGY SAGAR for allowing me to undertake this project. I feel extremely exhilarated to have completed this project under the able and inspiring guidance of He rendered me all possible help me guidance while reviewing the manuscript in finalising the report. I also extend my deep regards to my teachers , family members , friends and all those whose encouragement has infused courage in me to complete to work successfully.

ANKIT JAIN MBA IST SEM.

DELCLARATION BY THE CANDIDATE

Date : I declare that the project report titled " MARKETING STRATEGY OF TOP FIVE BRANDS OF TELECOMMUNICATION" on Market Segmentation is nay own work conducted under the supervision of Miss Shweta Rajput Department of Business Management,

SWAMI VIVEKANAND INSTITUTE OF TECHNOLOGY SAGAR To the best of

my knowledge the report does not contain any work , which has been submitted for the award of any degree , anywhere.

ANKIT JAIN MBA IST SEM.

CERTIFICATE

The project report titled " " MARKETING STRATEGY OF TOP FIVE
BRANDS OF TELECOMMUNICATION " been prepared by ANKIT JAIN MBA

IST SEM., under the guidance and supervision of MISS SHWETA RAJPUT for the partial fulfillment of the Degree of MBA.

Signature of the Supervisor

Signature of the Head of the Department

Signature of the Examiner

CONTENTS
PREFACE

 ACKNOWLEDGEMENT CERTIFICATE DECLARATION CHAPTER I INTRODUCTION ABOUT PROJECT AN INSIGHTOF COMPANY HISTORY MISSION AND VISION STANDING POSITION OF COMPANY BRAND VALUE CHAPTER II OBJECTIVE OF THE STUDY CHAPTER III RESEARCH METHODOLOGY CHAPTER IV MARKET ANALYSIS OVERVIEW BRANDS CHAPTER V CONSUMER GROUPS CONSUMER BEHAVIOUR CHAPTER VI PRODUCT PROFILE PLAN FOR PRODUCT MIX PRODUCT RANGE CHAPTER VII MARKETING STRATEGY PRICING POSITION AND DISTRIBUTION PROMOTION CHAPTER VIII ABOUT COMPETITORS COMPETITOR FOR PRODUCT PRICE OF COMPETITOR PRODUCT CHAPTER IX DATA ANALYSISAND INTERPRETATION CHAPTER X LIMITATION CHAPTER XI CONCLUSION & SUGGESTION BIBLIOGRAPHY QUESTIONNAIRE

ABOUT PRODUCT
During June 1996, Devashih started as Devashish Investment, a family firm with partners Krishnakant Desai and His son Ashish Desai as partners. Senior Partner Krishnakant Desai had long experience as Accountant in Bardoli

Sugar

Factory

and

in

Sardar

Bagayat

(co-operative

Mandali).

Devashish Investments with a gallop start as Financial Advisors due to overwhelming support from surrounding residents of Bardoli areas was converted into Devashish Securities Pvt. Ltd. within three years. Company has pleasure to introduce our selves as leading Investment counseling company in and around Bardoli. Our aim is full satisfaction of our valued Customers and our motto is Service before self. Devashish also have our two sister concern, Devashish Commodities Pvt. Ltd., and Devashish Advisory Services Pvt. Ltd. Devashish Commodities Pvt. Ltd. is approved recognized member of Indias only Multi-commodities Exchange(MCX), having rating of Asias third Commodity Exchange are operating in Surat, Songadh, Unai, Palsana, Bharuch, Ankleshwar & Kamrej.

Business

Broking Equity Broking

Derivatives Broking Commodity broking

Devashish Securities Pvt. Ltd. is one of the leading providers of broking services to individuals and institutions in the equity, derivatives and commodities segment in around the areas of Bardoli. Company proactively delivers the full depth and breadth of our broking services to clients through a network of our branches and franchises across the South Gujarat. Distribution

Mutual Funds Insurance Life-non Life Initial public offering (IPO)

With the objective of meeting all the investment needs of our clients, we provide distribution services of mutual funds and IPOs. We are an AMFI

registered mutual fund distributor and are also registered with all the AMCs in India to sell the schemes offered by them. Our distribution network is backed by in-depth & comprehensive research and a strong team for marketing and sales support. Devashish has a dedicated team exclusively for research on mutual funds and IPO. Company provides monthly publications on mutual fund activity and fund recommendations and also furnishes reports on New Fund Offers (NFO) and forthcoming IPOs recommendations. Our recommendations are objective and unbiased. For us, the clients growth is the top priority. Consistent delivery of high quality advice on mutual funds and IPO investment has established us as a competent and reliable distributor across the South Gujarat. We are also amongst the few investment firms that offer the facility to invest in mutual funds and IPO online, giving our clients freedom from paperwork and making investing convenient for them. Depository Service o Shares Devashish depository business helps us in providing integrated financial solutions to our clients. It is led by a team of professionals and the latest technological expertise, dedicated exclusively for the depository services. This creates a seamless transaction platform for clients to execute trades through Devashish Securities Pvt. Ltd. Business and settle them through Devashish Securities Pvt. Ltd. Depository Services. Why Choose Devashish Personal Relationship At Devashish, company believes that it is not just the product or service that we are offering; it is a relationship with our clients which makes us alive. Being a client you deserve a personal relationship based on trust, reliability, understanding and respect. This relationship is the real wealth for us from whom we will make our value & Image in the Market. Our aim is full satisfaction of our valued Customers and our motto is Service before self.

We believe to fulfill your need first & ultimately its the way to fulfill the need of ours Comprehensive Research Company can help you for better financial portfolio solutions through our indepth, unbiased research. Whether you want help managing your own portfolio or want us to manage it for you, youll get investment guidance and portfolio planning thats right for you. Our research team will offer excellent investment opportunities, will help you identify significant market trends, and will make sure that the information reaches you at the earliest. We provide an integrated approach of fundamental and technical research Array of products and services Company offer wide range of investment products and services that makes your Portfolio sounds enough for saving and support. Equities, derivatives, commodities, depository, IPOs, mutual fund, Pan Card Collection center no matter what investment-related service or product you need, you can get it at Devashish

TELECOM INDUSTRY

The Indian telecommunications sector has been zooming up the growth curve at a feverish pace, emerging as one of the key sectors responsible for India's resurgent economic growth. It is the fastest growing telecommunication market in the world, and with 264.77 million telephone connections, is the third largest telecom market and the second largest among the emerging economies of Asia with an average growth of over 90%. In fact, India has achieved its target of reaching 250 million telephone subscribers by 2007, two months before time. Simultaneously, overall tele-density has increased to 23.21 percent. Today, the Indian telecom industry represents unique opportunities for U.S. companies in the stagnant global scenario. According to Broadband Policy 2004, Government of India achieves the target of 9 million broadband connections and 18 million internet connections in 2007. In the last 3 years, two out of every three new telephone subscribers were wireless subscribers. Consequently, wireless now accounts for 54.6% of the total telephone subscriber base, as compared to only 40% in 2003. Wireless subscriber growth has bypassed 2.5 million new subscribers per month in the 2007. The wireless technologies currently in use are Global System for Mobile Communications (GSM) and Code Division Multiple Access (CDMA). There are primarily 9 GSM and 5 CDMA operators providing mobile services in 19 telecom circles and 4 metro cities, covering more than 2300 towns across the country.

HISTORY
In 1880, two telephone companies namely The Oriental Telephone Company Limited and The Anglo-Indian Telephone Company Limited approached the Government of India with the objective of establishing Telephone Exchanges across the country. Initially, the Government denied the permission as it wanted to exercise its monopoly power over the promising industry once it emerged. By the following year, it changed its

decision and finally on 28 the January, 1882, license was granted to The 0 Oriental Telephone Company Limited of England for opening telephone exchanges at Kolkata, Mumbai, Chennai and Ahmadabad.

Evolution of the industry-Important Milestones

History of Indian Telecommunications
YEAR

1851 1881 1883 1923 1932 1947

First operational land lines were laid by the government near Calcutta (seat of British power) Telephone service introduced in India Merger with the postal system Formation of Indian Radio Telegraph Company (IRT) Merger of ETC and IRT into the Indian Radio and Cable Communication Company (IRCC) Nationalization of all foreign telecommunication companies to form the Posts, Telephone and Telegraph (PTT), a monopoly run by the government's Ministry of Communications Department of Telecommunications (DOT) established, an exclusive provider of domestic and long-distance service that would be its own regulator (separate from the postal system) Conversion of DOT into two wholly government-owned companies: the Videsh Sanchar Nigam Limited (VSNL) for international telecommunications and Mahanagar Telephone Nigam Limited (MTNL) for service in Metropolitan areas. Telecom Regulatory Authority of India created. Cellular Services are launched in India. New National Telecom Policy is adopted. DoT becomes a corporation, BSNL

1985

1986

1997 1999 2000

2001

Convergence Bill to promote, facilitate and develop the carriage and content of communications tabled in the Parliament. Policy for GMPCS service has been announced. Policy for PMRTS has been announced. Policy for UMS was announced.

1 1

2002

VSNL came under private management. International Long Distance Service opened for private competition. Internet telephony was started.

VISION and Mission Quality Policy Dedication: Company dedicates ourselves in consistently delivering more than customer expectations and believes in customer delight. To achieve this, we have utilized our human and technological resources to provide superior quality financial services. Efficiency: We are efficient and committed to total quality by putting our best at our resources and services at optimum cost and strive continually to improve ourselves, our team and our services to get total customer satisfaction. Valuation: Company will achieve our objectives through creation of a strong, responsive, and innovative organization by a total quality commitment and by emphasizing on total customer satisfaction, wealth & Value creation of stakeholders through profitable growth and providing best working environment to our employees Mission: To create enduring value for customers and stakeholders by providing total quality products & Services at optimum cost, through creation of a strong, responsive and innovative organization and strive constantly to

improve ourselves, our team & our services to meet customer expectation.

1 2

STANDING POSITION OF COMPANY

TELECOM: The word Telecom (which is an abbreviated version of '

telecommunication) in real sense refers to the transfer of information between two distant points in space. This meaning however, has been subjected to modifications in accordance with further innovations made be the Telecom Industry. Industry: A clear indication of the way in which human effort has been harnessed as a force for the commercial production of goods and services is the change in meaning of the word industry. Coming from the Latin word industrial, meaning "diligent activity directed to some purpose," and its descendant, Old French industries, with the senses "activity," "ability," and "a trade or occupation," our word (first recorded in 1475) originally meant "skill," "a device," and "diligence" as well as "a trade." BRAND VALUE An Industry Analysis is an assessment of the profitability of an industry. In order to perform this assessment, your objective is to characterize the driving forces of competition within an industry. The purpose of this analysis is to help management create and maintain a competitive advantage that allows the company to excel in the industry. The purpose of industry analysis is to review prevailing conditions within specific industry and its segments. The company's industry obviously influences the outlook for the company. Even the best stocks can post mediocre returns if they are in an industry that is struggling.

Targets (by 2010):

1 3

500 million telephone connections Broadband: 20 million subscribers Geographical coverage: 90% Rural Connections: 80 million

Scope

Showcase the latest products, formulation and capabilities. Opportunities for transfer of technology, setting up of R&D base with International firms. Joint ventures, collaborations and investment opportunities. Supply of machineries, process control equipments, projects and services etc. One-to-one business meetings and networking opportunities.

Indian Economy
An economy is the system of human activities related to the production, distribution, exchange, and consumption of goods and services of a country or other area. The composition of a given economy is inseparable from technological evolution, civilization's history and social organization, as well as from Earth's geography and ecology, India's economy is on the fulcrum of an ever increasing growth curve. With positive indicators such as a stable 8-9 per cent annual growth, rising foreign exchange reserves, a booming capital market and a rapid rise in FDI in the last year, India has emerged as the second fastest growing major economy in the world. The economy has been growing at around 9 per cent in the past two years recording a growth rate of 9 per cent and 9.4 per cent in 2005-06 and 2006-07 respectively. Significantly, the industrial and service sectors have

been contributing a major part of this growth, suggesting the structural 4 transformation underway in the Indian economy. For example, industrial and services sectors have logged in a 10.9 and 11 per cent growth rate in 2006-07 respectively, against 9.6 per and 9.8 cent in 2005-06. Similarly, manufacturing grew by 9.1 per cent and 12.3 per cent in 2005-06 and 2006-07 and trade, hotel, transport and communication recorded a growth of 10.4 per cent and 13 per cent, respectively. Independent Indias economic development program has been based on the key objectives of self-reliance and social equity. Till the eighties, Indias industrial policy created Indias industrial base under a system of licensing, exchange excessive strict controls protection foreign and from

imports, which protected even inefficient and internationally non-competitive enterprises. In program 1991 of the Central economic

Government embarked on a liberalization. This included, among others removal of governmental control, rationalization of regulation, attracting Foreign Investment. The government has also identified the infrastructure sector (Power, Telecommunications, and Transportation) as a key target and is taking steps to attract investments in the area. Encouraged by economic developments over the past decade, the government is committed score a GDP growth rate 9% by the year 2005. The fact is that the Indian economy is growing faster than ever before. Between 1992-93 and 1997-98, India's GDP at 1980-81 prices has recorded a trend growth rate of 5.4 per cent. Never once has the growth rate fallen below 5 per cent since 1991-92 when it grew by only 1 per cent and when the economic liberalization process started.

BRANAD VALUE Promotion of rural telephony and accessibility of telephones to remote areas is an important thrust area of the department. The Universal Service Obligation Fund (USOF) of India is one of the few operational USO Funds in the world. The scope of USOF covers rural and remote areas with public access and individual household telephones in Net High Cost rural and remote areas. Under USOF, a scheme has been launched by the Government to provide support for setting up and managing 7871 number of infrastructure sites spread over 500 districts in 27 states of the country for the provision of mobile services. The infrastructure so created, shall be shared by three service providers for provision of mobile services including other Wireless Access Services like Wireless on Local Loop (WLL) using Fixed/Mobile terminals in the specified rural and remote areas, where there is no existing fixed wireless or mobile coverage. Mobile services through these shared towers are targeted to be made operational in a phased manner by May 2008. Broadband Recognizing the potential of Broadband service in the growth of GDP through enabling the development of knowledge based society, the government has announced Broadband Policy 2004. Several measures have since been taken to promote broadband in the country. As a result of these measures, broadband subscribers grew from a meager 0.18 million as on 31, March 2005 to 2.61 million, up to September 2007. INVESTMENT AND GROWTH In 2005-2006, the

1 5

telecom industry witnessed a growth of 21% with total revenue of Rs. 86,720 crores, and It is the total investment that will the be rising to Rs. 2, 00,660 crores. projected industry telecom

enjoying over 150% growth in the next 4-6 years. The growth also requires a 6 huge investment by the players in the sector. Bharti Airtel is planning to invest about $8 billion by the year 2010. Liberalization policy and some socio-economic factors are mainly responsible for the immense growth in the sales volumes. The lifestyle of the people has changed. They need to be connected to the other people all the time. With the lowering down of the tariffs the affordability of the mobile phones has increased. The finance sector has also come up with loans for handsets on 0% interest. Mobile services providers are also expanding their coverage area by installing more and more antennas and other equipments. Budget 2007 has brought disappointment to the telecom sector. Mobile service providers have been asked to cut down their roaming rentals as well as their long distance and international call tariffs. This has led to discontent on the part of the service providers. However, Telecom Regulatory Authority of India (TRAI) is of the opinion that this will lead to increased use of roaming, which will ultimately lead to more revenue generation. Moreover, with cheaper handsets and lesser tariffs, it is expected that by the year 2010 there will be over 500 million subscribers in the Indian telecom market. The Total Market (TM) for semiconductors in India in 2005 is estimated at $2.82 billion and the telecommunications market accounts for about 45.4 percent of the TM. The Total Available Market (TAM) for semiconductors in India was valued at $1.14 billion in 2005 and the telecommunications market accounts for 8.0 percent of the TAM. Bulk of the telecommunication equipment is imported as CBUs and SKDs. The larger share of the imports in the telecommunication market reflects in the higher TM and lower TAM. The study is comprehensive and it covers all the major telecom products contributing the semiconductor TM and TAM. The major markets of the telecommunication industry that are covered in this study include Wireless handsets (GSM and CDMA), Wireless infrastructure equipment , Wire line switches, Access network equipment, Electronic push button telephones, PBX systems, Modems and VoIP phones. The wireless handsets and wireless infrastructure equipment together hold major share of about 88 percent of the telecommunication TM in 2004. However, with respect to TAM, wire line

switches are the major segment due to the presence of domestic 7 manufacturing base.

Telecoms and Indias Growth

Communications is the fastest growing sector in Indias economy. The average compound rate of growth the economy works out to 24.02 cent per annum since the turn of millennium (Table 2). No other sector of the economy has The clocked such a rate of growth. of per this

sector accounts for about 4 per cent of GDP and the recent high rate of growth has contributed to about 11 per cent of the growth in overall GDP of the country. In information and communications technology (ICT), it is again communications that is more important. This is evident from a dataset on ICT spending developed by World Information Technology and Services Alliance (2006), of the total spending on ICT by India, about 63 per cent was in communications. The communication sector comprises both services and equipment manufacturing, although in the above characterization the data

refers only to the services segment. The domestic production of telecom 8 equipments has shown some impressive increases during the period since 2001, but it accounts for only about 15 per cent of the total telecoms industry. With some fluctuations, the equipment sector is slowly seeing a decrease in its share in the total revenues of the telecommunications industry.

1 9

OBJECTIVE OF THE STUDY

To study the emerging trend of telecom sector To study the opportunity exist for telecom market To know the future out let of telecom sector To know the emerging technologies in the telecom sector To study the financial performance of telecom sector

2 0

RESEARCH METHODOLOGY
According to Green and Tall A research design is the specification of the methods and procedures for acquiring the information needed. It is the overall operational pattern or framework of the project that stipulates which information is to be collected, from where it is to be collected and by what procedures This research process based on primary data analysis and secondary data analysis will be clearly defined to meet the objectives of the study.

I chose the primary sources to get the data. A questionnaire was designed in accordance with our mentor in Ketchup. I chose a sample of about 30 corporate customers

I collected some data from the secondary sources like published Company documents, internet etc. Research Design A research design is the arrangement of conditions for collections and analysis of data in a manner that aims to combine relevance to the research purpose with economy in procedures. It is a descriptive cross sectional design .It is the conceptual structure with in which research is conducted; it constitutes the blueprint for the collection, measurement and analysis of data. It is needed because it facilitates the smooth sailing of the various research operations, thereby making research as efficient as possible yielding maximal information with minimal expenditure of effort, time and money.

In the preliminary stage, my research stage constituted of exploratory study by which it is clear that the existence of the problem is obvious .So, I can directly head for the conclusive research. Sampling Plan Sampling plan is a distinct phase of research process. In this stage I have to determine who is to be sampled, how large should be the needed sample and how sampling unit is to be selected. Population In my research, I have defined my population as a complete set of customers of Sagar City. Sample Survey As compared to census study, a sample study has been conducted by us because of: Wide range of population, it was impossible to cover the whole population Time and money constraints. Sample Unit In this survey I took the list of customers from the dealers of Ketchup Sampling Technique Sampling technique implies the method of choosing the sample items, the two methods of selecting sample are: Probability method. Non-probability method. Probability method is those in which every item of the universe has an equal chance of the inclusion in the sample. Non-probability methods are those that do not provide every item in the universe with known cause of being included in the sample. The selection process is partially subjective. For my study, I employed the Non-probability sampling technique, in which I got the data of the customers from the dealer of Ketchup.

2 1

2 2

MARKET ANALYSIS
There are three types of players in telecom services: State owned companies BSNL MTNL Private Indian owned companies Reliance Communication Tata Teleservices Bharti airtel Tata Communication Foreign invested companies Vodafone-Essar Bharti Tele-Ventures Idea Cellular

2 3

CONSUMER BEHAVIOUR In microeconomics, preference of consumers and other entities are modeled with preference relations. Completeness is more philosophically questionable. In mostapplications, S is an infinite set and the consumer is not conscious of all preferences.However, preference can be interpreted as a hypothetical choice that could be maderather than a conscious state of mind. In this case, completeness amounts to anassumption that the consumer can always make up their mind whether they areindifferent or prefer one option when presented with any pair of options. Consumer preferences The underlying foundation of demand, therefore, is a model of how consumers behave. The individual consumer has a set of preferences and values w hosedeterminations are outside the realm of economics. They are no doubt dependent uponculture, education, and individual tastes, among a plethora of other factors. Themeasure of these values in this model for a particular good is in terms of the realopportunity cost to the consumer who purchases and consumes the good. If anindividual purchases a particular good, then the opportunity cost of that purchase isthe forgone goods the consumer could have bought instead.We develop a model in which we map or graphically derive consumer preferences.These are measured in terms of the level of satisfaction the consumer obtains fromconsuming various combinations or bundles of goods. The consumers objective is tochoose the bundle of goods that provides the greatest level of satisfaction as they theconsumer define it. But consumers are very much constrained in their choices. These constraints aredefined by the consumers income, and the prices the consumer pays for the

goods.We will formally present the model of consumer choice. As we go along, we willestablish a vocabulary in order to explain the model. Development of the model will be in three stages. After a formal statement of the consumers objectives, we will mapthe consumers preferences. Secondly, we present the consumers budget constraint;and lastly, combine the two in order to examine the consumers choices of goods.Before a new product can be made, or an existing one varied, someone must have theidea of doing so. Since market research as a business activity is conducted and paidfor by firms, the investigation of consumer wants and preferences is fairly welldefined by the spheres of interest that exist within the firm. There is little point inasking the public the open-end questions, "What do you need, or want? What shall wemake?" The consensus appears to be that consumers themselves scarcely ever o riginate new product ideas, that development of a specific product represents thefunctioning of creativity in business, and that such creativity may be found amongtechnical research, production engineering, market research, or sales staff, a ll of whom have been responsible for one idea or another.Considering the magnitude of choice that confronts the American public, it is easy tounderstand why this is true. Any household consumer is likely to deal in a far greater variety of products and purchases than any firm, and any consumer's suggestions for new items cover a broader field than that of any business interest. The firm is orientedto production and marketing; the consumer, to his own needs and to an unlimitedrange of alternatives.One acceptable alternative, for consumers, might conceivably be for drug companiesto develop a toughening needed for protection, and agent for the feet world so that shoes are no longer then for

2 4

of fashion to insist that bare feet are the epitome of style. Thus, consumers' suggestions rarely furnish new product ideas, either becauseconsumers are inarticulate about their own needs, or because they lack the technicalcompetence to specify feasible alternatives.

2 5

PRODUCT PROFILE BHARAT SANCHAR NIGAM LIMITED (BSNL)

Founded in 2000, Bharat Sanchar Nigam Ltd. is India's largest public sector Telecommunications Company providing a wide variety of telecom services. Its service range covers Wire line, CDMA mobile, GSM Mobile, Internet, Broadband, Carrier service, MPLS-VPN, VSAT, VoIP services, IN Services, etc. In 2005-06, the BSNL earned revenues of Rs. 40,177 crore, representing a growth rate of 11.32 % over the previous year. BSNL's Board of Directors consists of CMD Shri A.K. Sinha & five full time DirectorsDirector of Human Resource Development (HRD), Director of Planning & New Services, Director Operations, Director Finance and Director of Commercial & Marketing. BSNL offers both fixed line and mobile services with broadband connections.

2 6

BHARTI-AIRTEL
Established in 1995 by Sunil Mittal as a Public Limited Company, Airtel is the largest telecom service provider in Indian telecom sector. With market capitalization of over Rs. 1,360 billion, Airtel has 31% of total market share of GSM service providers. Providing GSM services in all the 23 circles, Airtel was the first private player in telecom sector to connect all states of India. Also, Airtel is the first mobile service provider to introduce the lifetime prepaid services and electronic recharge systems. After establishing itself in the domestic market, Airtel is now spreading its wings in US by providing its mobile service under the name 'CALLHOME' to the NRIs. Having achieved huge success in mobile services- postpaid and prepaid- Airtel has now entered fixed-line telephony providing broadband services in 92 cities across India. The company has an optical fiber network of 35,016 km and a customer base of 35,440,406 GSM mobile and 1,819,083 broadband subscribers. Airtel is listed on The Stock Exchange, Mumbai (BSE) and The National Stock Exchange of India Limited (NSE).

2 7

Bharti Airtel
Bharti group plans to roll out cellular services under Airtel brand in SAARC countries like Bhutan, Nepal, Maldives, etc. It will soon start exploratory talks with relevant telecom regulators to secure GSM licenses to operate 2G/3G mobile services in these countries. It has no plans to take the Airtel brand to Pakistan. Bharti's bid to enter SAARC markets comes at a stage when the Indian govt is trying to play a decisive role in bringing about a sharp reduction in the ultrahigh global roaming rates within the SAARC group. Bharti Airtel plans to kick off cellular services in Sri Lanka by April 2008. While telecom penetration in Sri Lanka is 30%, there's a huge opportunity for new entrants. Bharti Airtel and Western Union today decided to jointly develop and pilot a Mobile Money Transfer service in India. They expect the service to be launched within the next six months. Only banks and the Indian Post, through money orders, are currently allowed such transfers.

RELIANCE INFOCOMM
Established in 2002, Reliance communication is the wholly owned subsidiary of Anil Dhirubhai Ambani Group of Companies providing the telecommunication services.

Reliance offers prepaid and postpaid mobile services with R-world and 8 fixed line services with broadband services. During the financial year 200506, Reliance's subscriber base had crossed the mark of 25 millions. Having its operations in 673 cities, Reliance Communications offers a wide range of telephony The company's line varies from providing Fixed Telephony to wireless telephony Reliance only telecom company that is providing mobile services over both- CDMA and GSM networks. With an optical fiber network of 80,000 kms, the company aims at providing best services to its customers. It also has 15,000 Base Transceiver Stations across the country providing reliable wireless network. Line services mobile services. is the services. business

Reliance Communication
RCom has an upper edge over all its rivals and is a step ahead than the major telecom players. Department of Telecom has awarded an India GSM license to Reliance Communications. The company had already paid the requisite license fee of Rs 1,651 crore for an India GSM license on October 19, 2007, after DOT, in its new telecom policy, had said telcos could offer services using dual technology. The license will guarantee that RCom will be in queue for GSM spectrum ahead of the 46 others that have applied for licenses recently. The development comes even as leading GSM players have challenged the policy of allowing dual technology in the telecom tribunal.

RCom will now have to wait for DOT to allot 4.4 MHz of GSM spectrum 9 in each of the circles to launch commercial operations.

IDEA CELLULAR
Established by AT&T, Aditya Birla Group and Tata Group as joint venture, Idea Cellular, is a part of Aditya Birla Nuvo, a flagship company of the Aditya Birla Group, Idea is growing its network in 11 circles. Idea offers both prepaid and post paid services in the GSM network. Having 13% market share, Idea has a base of 2.3 crores subscribers all over the country. A threeyear contract was signed between Idea cellular and Ericsson for GSM expansion. The network will now cover Maharashtra, Gujarat, Rajasthan, Madhya Pradesh and Himachal Pradesh telecom circles (operator-licensed areas). Idea is also in the process of setting up new networks to provide wider coverage area to its subscribers. It also keeps on announcing attractive discount schemes for the value added services. Idea was the first cellular service provider to launch GPRS and EDGE in the country. For the very first time in India, 'Background Tones', 'Group Talk', 'Super Power', 'Women's Card', etc. were launched by Idea. Idea has remained popular among the customers because of tariff plans such as free I -I calls, '2 Minutes Outgoing Free', and other discount schemes and GPRS enabled services.

Idea Cellular

Aditya Birla group firm Idea Cellular is a wireless telecom company, 0 operating in various states of India. Idea Cellular was the first to offer flexible tariff plans for prepaid customers. It also offers GPRS services in urban areas. The Ericsson Idea Cellular $100m contract could be a precursor to Idea Cellular getting spectrum from the Government to commence services in the Circle. The company will also be responsible for network deployment and integration, as well as managed services including network and field operations. Rollout is planned to begin shortly, with commercial launch rescheduled for May 2008.

TATA TELESERVICES:
Established in 1996, Tata Teleservices, one of the 96 companies of Tata Group, has its network in 20 circles. It is the first company to launch CDMA mobile services in India. With investment of Rs.36, 000 crores during financial year 2005-06, Tata Teleservices has reached the mark of 1.07 crore subscribers. The company covers a wide range of services like Mobile services, Wireless Desktop Phones, Public Booth Telephony and Wire line services. It also offers some value added services like voice portal, roaming, post-paid Internet Services, 3-way conferencing, group calling, Wi-Fi Internet, USB Modem, data cards, calling card services and enterprise services.

Tata Teleservices has partnered with Motorola and Ericsson for 1 providing reliable services to its customer base. Tata Teleservices Limited along with Tata Teleservices (Maharashtra) Limited serves over 15.9 million customers (with 75% increase in FY 2007 over March 06-sub base) covering over 3200 towns. Income from Telecommunication reached to 1,095.13, with 7.9 lakhs mobile subscribers and 8.3 lakhs fixed wireless subscriber. Formerly named as Hughes Tele.com (India) Ltd., Tata Teleservices Maharashtra Limited (TTML) with 70.83% equity shareholding by TATA Group is the premier telecommunication service provider licensed to provide services in Maharashtra (including Mumbai) and Goa. In February 2002, the Government of India released 25% of VSNL's equity to Tata Teleservices.

MARKETING STRATEGY
Two major factors responsible for the growth of telecommunications industry are use of modern technology and market competition. One of the products of modern technologies is optical fibers, which are being used as a medium of data transmission instead of using coaxial or twisted pair cables. Optical fibers can carry a high volume of data and are easier to maintain and install. Use of communication satellites makes this telecommunications industry a booming industry. The use of mobile network has a crucial role behind the growth of an improved telecommunications industry. Leading companies are showing their interest to invest in this telecommunications industry. Telecommunications industry is going to be a digitized one. Use of ISDN (Inter Services Digital Network) makes this telecommunication industry a total digitalized system and eventually enhanced the speed and quality of digital communication.

3 2

The introduction of these advanced technologies makes the telecommunications industry a competitive one, where a number of multinational companies have shown their interest to invest in this industry and consequently the prices are reduced, the quality is also improved. During the period of 1990, the telecommunication industry showed a speedy growth in terms of investment and eventually increased the competition. The competition between the companies led to the decline of revenues. World telecom industry is an uprising industry, proceeding towards a goal of achieving two third of the world's telecom connections. Over the past few years information and communications technology has changed in a dramatic manner and as a result of that world telecom industry is going to be a booming industry. Substantial economic growth and mounting population enable the rapid growth of this industry. Research works associated with world telecommunication industry: A number of research works are being carried out all over the world to improve the quality and speed of transmission. Research works are also done on the basis of the users' needs. The objective of the research work is to provide quality and affordable service to the consumers. Market potentiality of world telecommunication industry: The world telecommunications market is expected to rise at an 11 percent compound annual growth rate at the end of year 2010. The leading telecom companies like AT&T, Vodafone, Verizon, SBC Communications, Bell South, and Qwest Communications are trying to take the advantage of this growth. These companies are working on telecommunication fields like broadband technologies, EDGE(Enhanced Data rates for Global Evolution) technologies, LANWAN inter networking, optical networking, voice over Internet protocol, wireless data service etc. Economical aspect of telecommunication industry: World telecom industry is taking a crucial part of world economy. The total revenue earned from this industry is 3 percent of the gross world products and is aiming at attaining more revenues. One statistical report reveals that approximately 16.9% of the world population has access to the Internet. Present market scenario of world telecom industry: Over the last couple of years, world telecommunication industry has been consolidating by allowing private organizations the opportunities to run their businesses with this industry. The Government monopolies are now being privatized and consequently competition is developing. Among all, the domestic and small business markets are the hardest.

Statistical report Phoenix Center research revealed that in the coming years, there will be a healthy competition among the providers of telecommunication services. At the same time, the price will be lower and quality will be higher. The new telecommunications technologies will replace the traditional telecom services. Statistical data also reveals that the telecommunications industry is going to be a dynamic and booming industry in the near future. The telecom industry comprises of complex network of services like telephones, mobile phones and internet services. Telecom industry trends Throughout the world, telecom industries are being controlled by private companies instead of government monopolies. Traditional telecom technologies are also being replaced by modern wireless technologies, specifically in case of mobile services. One of the major objectives of telecom industry is to enhance the quality and speed of Internet technology. These days, telecom industry is more concerned with texts and images (Internet technologies), rather than voice (telephone service). Most of the research works are going on Internet accessibility, specifically on data applications and broadband services. The other major division of telecom industry is mobile network sector, where lots of innovative research works are going on. Previously the traditional telephone calls used to earn the maximum revenues, but these days mobile service is going to replace traditional telephone services. Telecom industry analysis from the experts point of view Telecom industry is a vast and diversified industry and needs a huge capital to invest. That is why the competitors of this industry should be such that they can meet that demand. From the

3 3

MARKETIN STRATEGY

In the early 1960s, Professor Neil Borden at Harvard Business School identified anumber of company performance actions that can influence the consumer decision topurchase goods or services. Borden suggested that all those actions of the companyrepresented a Marketing Mix. Professor E. Jerome McCarthy, also at the arvardBusiness School in the early 1960s, suggested that the Marketing Mix contained 4elements: product, price, place and promotion. In popular usage, "marketing" is thepromotion of products, especially advertising and branding. However, in professionalusage the term has a wider meaning which recognizes that marketing is customer-centered. Products are often developed to meet the desires of groups of customers or even, in some cases, for specific customers. E. Jerome McCarthy divided marketing intofour general sets of activities. His typology has become so universally recognized that hisfour activity sets, the Four Ps, have passed into the language. Product:

The product aspects of marketing deal with the specifications of the actualgoods or services, and 4 how it relates to the end-user's needs and wants. The scope of aproduct generally includes supporting elements such as warranties, guarantees, andsupport. Pricing: This refers to the process of setting a price for a product, including discounts.The price need not be monetary - it can simply be what is exchanged for the product or services, e.g. time, energy, psychology or attention. Promotion: This includes advertising, sales promotion, publicity, and personal selling,branding and refers to the various methods of promoting the product, brand, or company. Placement (or distribution): refers to how the product gets to the customer; for example, point of sale placement or retailing. This fourth P has also sometimes been The Indian Institute of Planning & Management, New Delhi called Place, referring to the channel by which a product or services is sold (e.g. onlinevs. retail), which geographic region or industry, to which segment (young adults,families, business people), etc. also referring to how the environment in which theproduct is sold in can affect sales. These four elements are often referred to as themarketing mix, which a marketer can use to craft a marketing plan. The four Ps model ismost useful when marketing low value consumer products. Industrial products, services,high value consumer products require adjustments to this model. Services marketing mustaccount for the unique nature of services. Industrial or B2B marketing must account for the long term contractual agreements that are typical in supply chain transactions.Relationshi p marketing attempts to do this by looking at marketing from a long termrelationship perspective rather than individual transactions.As a counter to this, Morgan, in Riding the Waves of Change

DISTRIBUTION Company

Franchisee

Distributor

Dealer

Dealers

Customer

Customer

3 5

ABOUT COMPETITORS
In 1991, India had just five million telephone subscribers. As at the end of July 2007, there were 233 million subscribers, an average annual growth rate of over 27 per cent per annum. No other country in the world, other than China, has shown such high rates of growth (see Table3). Teledensity too which was below one telephone per 100 population has now risen sharply to about 20. Among the infrastructure industries,

telecommunications is the only one that has shown significant improvements over the reform period. Consequently, it is generally opined that a revolution of

sorts is taking place in the Indian telecoms industry. There are at least seven 6 dimensions of this growth performance that merit our attention. (i) Dominance of Wireless Technology: The Indian telecom sector is now heavily dominated by wireless technologies, which include cellular mobile and fixed wireless technologies. In fact, almost the entire increase in the availability of telephones has been contributed by wireless technologies. India has one of the highest ratios of wireless to wire-line services, which is now almost five (Table 3, p 39). In fact what is interesting is that since 2005, the wire-line services have started falling. A number of factors explain this decrease in the popularity of fixed telephones, which has now become a worldwide trend. This heavy reliance of wireless technologies, while extremely positive from the availability point of view, has some implications for the diffusion of the internet in the country. This will be analyzed in some detail in one of the subsequent sections. (ii) Growing Market for Telecom Handsets: As a corollary of the above, it is seen that there has been a steady increase in the average number of mobile subscribers per month since 2003. In 2003, on an average 1.5 million new subscribers were added to the existing stock. This increased to 6.4 million until September 2007. These large increases in the number of mobile handsets have strong positive implications for the telecom equipment industry and specifically the mobile handsets industry, which means that close to six million handsets are being sold every month. Consequently, a huge domestic market for telecom equipment has suddenly emerged in the country spawning the creation of a significant manufacturing base. Chennai has become a thriving cluster for mobile handsets manufacturing and this has important implications for the downstream industries such as the semiconductor industry. This point will be discussed at some depth in the fourth section. (iii) Increasing Privatization: The share of the private sector in the overall telecoms industry has been raising and the ratio of private to

public actually crossed unity in 2006. This again is due to the fact that the 7 public sector is more dominant in wire-line (or fixed) and the private sector is dominant in the wireless (mobile) segment. This sort of a structure is largely the product of historical reasons. The two public sector service providers (BSNL and MTNL) dominated the wire-line sector, while the private sector was able to dominate the new wireless technology. In fact it was only in the late 1990s, early 2000s that the government allowed the public sector entities to provide wireless communication services. (iv) Competition Fixed v/s Mobile and GSM v/s CDMA: An interesting feature of the industry is that after a very long time, it has suddenly become very competitive. There are three dimensions to this competition. First, it is competition between two standards or technologies, namely, the Global System for Mobile Communications (GSM) v/s Code Division Multiple Access (CDMA) standards. Second, it is competition between various service providers, although this competition was restricted to public policy designed spaces or markets known as telecom circles. A yet another dimension is the type of market. There are essentially three types of markets based on the geographic coverage of the service. They are: (i) the local telephone market; (2) long distance or national telecom services; and (3) foreign or the overseas market. We focus here on all the three dimensions of competition between the service providers. Competition in Fixed and Mobile Technologies: The markets for mobile services are much more competitive than the one for fixed line services. In the latter, the incumbent service provider, BSNL continues to have the lions share of the market. However, the existence of mobile communication services has made the market for fixed line services contestable and as a result despite high concentration, the prices of fixed telecom services kept falling or kept under check over the last five years or so. (a) Competition in Fixed Telephone Services: If one goes by overall summary measures of domestic competition, the market for fixed telephone services is much more concentrated than the one for mobile services. For instance (as on May 31, 2007), The market for fixed telecom services is highly concentrated in all the telecom circles, although in seven of them, namely, Delhi-NCR, Chennai, Madhya Pradesh, Mumbai, Punjab and

Karnataka, the H-Index has a value less than 0.8. Of course, this does not mean that the market for fixed telecom services is not competitive. There are two dimensions to this level of competition for fixed services. First, the consumers are increasingly substituting mobile for fixed services, so the fixed service providers face intense competition from mobile services. Second, the existence of the telecom regulator too has acted as a check on the dominant service provider, Bharat Sanchar Nigam (BSNL), from charging high prices. Instead what one sees is a significant improvement in the performance of BSNL during this period.1 First of all, BSNL is one of the leading profit-making central public sector enterprises in the country: in 2005-06 it made a net profit of Rs 8,940 crore one of the few non-oil public sector enterprises (PSEs) in the top 10 profit-making PSEs in the country. Three areas where the firm has made performance improvements are: (i) considerable reductions in the number of consumers on the waiting list for a connection; (ii) reductions in the number of faults per subscriber; and (iii) number of personnel per 1,000 subscribers. On all the three indicators BSNL has made substantial progress [Department of Telecommunications 2007] and I argue that this is entirely due to the force of competition leading to efficiency gains for this rather monopolistic firm which has had a previous history of being completely impervious to the demands of consumers. (b) Competition in Mobile Services Industry: Compared to the fixed services, mobile services industry has a number distinguishing features. First, the industry started as one dominated by private sector enterprises and the government licensing religiously than followed one a policy of managed competition by more service provider in a telecom circle. In fact majority of the 28 circles have at least four services providers and in a number of cases there are six service providers well. In short, right through inception the government envisaged an oligopolistic form of competition. Second, most of these private sector enterprises had some of foreign equity holding of sorts. Third all of them are the of

3 8

based on new technologies that were state-of-the art. Fourth, the conduct of 9 the industry was, relatively speaking, more regulated by the newly created independent regulatory agency, the Telecom Regulatory Authority of India (TRAI). Fifth, it is the rapid growth of this industry that has catapulted the communications sector into one of the major growth-contributing sector of Indias economy. Sixth, the mobile communications industry, especially the equipment part of the industry is the second largest in the world (next to China) and therefore has attracted considerable FDI in the manufacture of handsets leading to the employment of skilled manpower. Seventh, India is supposed to be having the cheapest mobile telecom tariffs in the world. Since all the services providers were new and had the same vintage of technology, their competition was more in terms of price and conditions of sale and of late these two aspects are much in public scrutiny thanks to the timely intervention, on various occasions, by the regulator. If one computes the H-Index for the industry, at the national level (which is not exactly a meaningful as some of the providers are only at specific telecom circles), it shows a mild increase: the H-Index for the industry increases from 0.1370 in 2002 to 0.1593 in 2007. Most of the service providers have focused on specific regional markets, with the exception of Bharti (the largest mobile service provider). In fact, there are only four service providers who have a presence in at least 20 of the 29 circles. It is also interesting to see that the circles where BSNL has a monopoly position are also those with very low revenue potential. In other words, the private sector providers have positioned themselves in the most revenue earning circles. Also it is seen that it is the circles with high revenue earning potential where there has been an increase in the intensity of competition in the metros of Delhi, Mumbai and Chennai for instance. Competition between Mobile Standards: It was seen above that mobile phones were introduced in the country towards the latter half of the 1990s and specifically in 1997. Ever since that year and until the end of 2002, the market was dominated by just one technology, namely, GSM. But in December 2002, a Reliance

Info-com launched CDMA services across 17 circles on a countrywide basis. 0 CDMA has since been growing faster than GSM, although there are some year-to-year variations (see Figure 3, p 41). Most Indian consumers are unaware of the nitty-gritty of the two technologies. So the deciding factor between the two technologies is often based on price and other conditions of offer such as the coverage of the service ease of obtaining a new connection and whether a handset is available at a reduced price as part of the deal. Given this sort of a possibility of perfect substitution between the two types of technologies, the existence of the two standards has made both the markets for GSM and CDMA services very competitive. This is especially so when the market for CDMA services is highly concentrated with just two service providers accounting for almost the entire output. This is further indicated by the higher Herfindhal Index for CDMA services. What is being argued here is that despite being highly concentrated, CDMA service providers have to compete with GSM service providers and this has prevented the CDMA service providers from wielding any excessive market power. One of the most important institutional requirements for competition to emerge and sustain is the introduction of number portability. Number portability allows a customer to move from one mobile service to another within GSM, and also between GSM and CDMA, while retaining the same number. TRAI had recommended in March 2006 to the Department of Telecommunications (DoT) that mobile number portability be introduced by April 2007. (v) Price of Telecom Services: One of the more direct effects of this competition is lower prices. Before the deregulation of the telecom services industry and indeed the entry of mobile service providers, telecom consumers were periodically subjected to increases in the tariff. This has now been effectively checked. The price of telecom services basically follows a two-part tariff, both in the case fixed and mobile services: first an activation charge followed by a charge for each type of calls. For mobile communication consumers then there is the additional cost of of

calls according to whether it is post or prepaid. Based on estimates made by 1 TRAI (2006), I have obtained the minimum effective charge derived out of an outgoing usage of 250 minutes per month per quarter during 2003 through 2005. This is plotted for both fixed and mobile services as well. Although charges for both the calls have come down, a higher reduction is noticed in the case of mobile services. In fact, India now has one of the cheapest mobile tariffs in the world (Table 7) and this can give an additional fillip to the growth of ICT industry in the country. If one were to plot the price of telecom services and the number of subscribers, one can see an inverse relationship in the case of mobile services although in the case of fixed services such an inverse relationship is not visible. This is because of the relative advantages which mobile technology can bestow on its user. (vi) Institutional Support: An interesting feature of the growth of telecommunications industry in the 1990s and beyond, compared to the earlier period is the strong public policy support that the industry has received. It was manifested in the form of the following policies: (i) National Telecom Policy of 1994, (ii) Telecom Regulatory Authority Act of 1997, (iii) New Telecom Policy of 1999, and (iv) Broadband Policy of 2004. Of these four main policies, in my view, the most important piece of legislation that is determining the growth performance of the industry is the establishment of the regulatory agency TRAI.2 the 10-year history of telecommunications regulation in India can be divided into two phases: the first covering the period 1997- 2000, when TRAI had just been established and the second covering the period 2000 onward, when considerable amendments were made to the original TRAI Act. On the whole, TRAIs functioning has been marred by a number of bitter disputes between it, the DoT and the service providers, although in more recent times (especially

since 2001) it has been rather effective in shaping the conduct of the 2 industry in terms of pricing behavior and indeed in quality of service. TRAIs functions can be broadly categorized into two: recommendatory and mandatory. It is seen that in most of the important conduct variables such as the promotion of competition, pricing, technology and quality of service and in the efficient use of spectrum, etc, the pronouncements of TRAI are merely recommendatory and the final decision is to be taken by the government. The mandatory powers of TRAI are restricted to a number of technical issues such as fixing the terms and conditions of inter-connectivity between the service providers, laying down the standards of quality of service and to ensuring that these conditions are actually met by the service providers and ensuring the effective compliance of the Universal Service Obligation. After a detailed review of its functioning during the earlier period (1997-2000), Mani (2002) referred to the TRAI as a muddled regulator. This is because during this phase, TRAIs functions were poorly articulated, and it was generally viewed as driven by the well-organized and vociferous lobby of private phone service operators. TRAI did little to hide its pronounced contempt for the DoT and the state-owned providers, BSNL and MTNL. At the same time, it failed to ensure that private operators adhered to their license conditions. Its authority and credibility were undermined by court rulings that clearly exposed its lack of power. Its reputation suffered even more when it allowed the private operators to fight its court battles. In short, it would not be incorrect to state that there was regulatory capture during this first and initial phase of its operations. TRAIs recommendations to the government are binding only with respect to the non-compliance and efficient use of the spectrum. On the crucial issues of timing and licensing of new service providers, TRAIs recommendations are not binding. In sum, the TRAI has been reduced to a tariff setting body empowered only to fix tariffs and inter-connection charges and to set norms on quality of service. And on these two and especially on the tariff issue, TRAIs role is generally considered to be very satisfactory.

(vii) Growing R&D Outsourcing: It is generally held that India has 3 emerged as a major R&D hub. The Technology Information and Forecasting Assessment Council (TIFAC) (2007) study confirmed this commonly held proposition: R&D investment worth of $ 1.13 billion has flowed into India during the five-year period 1998-2003. The total receipts of R&D services have doubled from $ 221 million in 2004-05 to $ 519 million in 2005-06 [Reserve Bank of India 2006, p 1355].

Three Disquieting Features

In the previous section I have outlined several dimensions of the growth of the industry. All these were positive features the phenomenal growth of the industry, significant reductions in the waiting time to get a telephone connection and indeed in the price of telecom services. However, this growth has also been with some disquieting features. Three such disquieting features of the growth of the industry have been identified. They are: (1) the growing digital divide; (2) increased dependence on imports as far as the equipment is considered; and (3) the relatively low penetration of the internet in India. (i) The Growing Digital Divide: Several commentators, notably Desai (2006), had referred to the growing inequalities in the availability of telephones especially between states and indeed between the rural and urban areas within a state. This is so severe that the national picture that I presented above is only representative of the urban areas of some of the states. This growing digital divide, as it is usually referred to, is of course a reflection of the growing divides within the country as far as income and wealth is considered. The ratio of urban to rural tele-density, which was falling until 2002 has started rising again since 2003 and in 2005 was much higher than what was in 1996, when the mobile revolution was just about to begin. To illustrate, the ratio of urban to rural tele-density increased from 14 in 1996 to nearly 20 by the end of 2005 [Department of Telecommunications 2006]. A yet another dimension of the digital divide is the variation in teledensity across the various telecom circles (Table 9). Teledensity (in 2005) ranged from as high as 60 per 100 people in the national capital region to just two in the backward state of Chhattisgarh. The urban divide

within each of the telecom circles is presented in Table 9. It shows that 4 Kerala, Tamil Nadu (excluding Chennai) and Punjab have one of the lowest urban-rural divides, while Uttar Pradesh, Bihar and Assam have the highest digital divides. The table also shows that rural teledensity is significantly below the urban one across all the circles and even for the nation as whole it has remained at a very low level. This confirms phones the has oft-expressed remained view that an the telecom revolution spearheaded by the mobile largely urban phenomenon. The government has put in place an institutional arrangement for bridging the digital divide. Specifically, the National Telecom Policy of 1999 envisaged implementation of the Universal Service Obligation (USO) Fund to provide telecom services in rural, remote areas and non-remunerative areas. This fund is raised through a universal access levy, which is 5 per cent of the adjusted gross revenue earned by the service providers under various licenses. The Universal Service Support Policy for Implementation of USO took effect from April 1, 2002. It is administered by the DoT and it has three major components: (1) providing public shared access; (2) providing individual access; and (3) infrastructure support for mobile service providers. The latter policy is on the anvil and is yet to take shape. The overall performance of the USO fund is far from satisfactory, as cumulatively speaking only about a third of the funds accumulated have actually been disbursed. The service providers, excepting for the stateowned BSNL, are rather reluctant to provide shared access. However, the private providers are keen to participate in the provision of individual access in rural areas as it is more profitable than providing shared access [Department of Telecommunications 2007]. Hitherto, the USO funds have been utilized only for provision of fixed line connections. Given the fact that

the future is in mobile communications, it is prudent to involve mobile 5 service providers too. Some amendments made to the utilization of USO funds have expanded the scope of the funds to include more items.3 The following additional four items were included: (i) Creation of infrastructure for provision of mobile services in rural and remote areas; (ii) provision of broadband connectivity to villages in a phased manner; (iii) creation of general infrastructure in rural and remote areas for development of telecommunication facilities; and (iv) induction of new technological developments in the telecom sector in rural and remote areas. Only the first of four are in the form of some implementation. In fact, the four metros have ceased to be the major force behind the growth of the mobile connections in the country. Encouraging the growth of mobile communications in the other circles and the rural areas within the circles can increase tele-density in the country. Such increases in tele-density through mobile phones also have some negative consequences, which is discussed below.

(ii) Import Dependence for Telecom Equipment: The country had 6 earlier assiduously built up a domestic telecom equipment manufacturing industry in all the three segments of the industry, namely in switching, transmission and terminal equipment. Until 1985 or so, the manufacture of telecom equipment was exclusively reserved for the public sector, when in that year certain customer premises equipments like the Electronic Private Automatic Branch Exchanges (EPABX) were sector thrown open to the private in sector. In fact, the very first public enterprise established independent India, Indian Telephone Industries (ITI) was devoted to the manufacture of telephone switching and terminal equipment. In 1985, the government alone established the standfor laboratory, Centre

Development of Telemetric (CDOT) to develop a family of digital switching technologies, which it licensed to both government and private sector enterprises. In fact, Mani (2005) had argued that the C-DOT is credited with the establishment of a modern telecom equipment industry in the country. The governments policy of public technology procurement practiced through its DoT, which was the only telecom service provider for a very long time until the late 1980s also contributed to the emergence and sustenance of a domestic manufacturing industry in telecom equipment which fitted very well with the overall policy of import substitution that being followed. The deregulation of both the equipment and services industries, the liberalization of the economy, the virtual abandoning of the public technology procurement policy and above all the growth of the mobile communications industry put a leash on the growth of a domestic manufacturing industry. This is because both the research and production components of the industry focused only on fixed telephone technologies and with the mobile communications becoming very important, the demand for such equipment had to be increasingly met through imports. I have attempted to estimate the net self-sufficiency rate

for Indias telecom equipment industry during the period 1992-93 to 2004- 7 05.

iii) Low Penetration of the Internet: Internet services in India were launched in 1995 by Videsh Sanchar Nigam (VSNL). By the end of March 1998, the number of subscribers had barely reached 140,000. In November 1998, the government recognized the need for encouraging the spread of the internet in the country and opened the sector for provisioning of services by private operators. To date there are 389 ISP licensees, but only 135 are operational. Public sector providers dominate with 56 per cent of the market (2006).. Approximately 60 per cent of the users still use dial-up internet access. Broadband access was introduced in October 2004, but its diffusion remains low. According to TRAI estimates (Table 10, p 43), there were 9.27 million internet subscribers as of end March 2007 and 2.34 million broadband subscribers. Only about a quarter of the internet subscribers have changed over to broadband access technologies. Majority of the subscribers use the older dial-up technologies for accessing the internet. According to a recent study on internet in the country by the internet and Mobile Association of India (2006), almost 76 percent of PC users have taken internet connections. This means that the two technical reasons militating against the higher internet diffusion in the country is the lack of ownership of PCs and not having a fixed

telephone for accessing the internet. Although it is possible to access 8 internet over a mobile phone, the current generation of mobile technology that is common in the country is 2 G and 2.5 G. Of course, it is generally held that whenever the country moves over to 3G phones, accessing the internet over mobile phones is easier. But given the much higher prices of 3G handsets, it is not very likely that its diffusion will be high in the initial years. So the low internet diffusion in the country is a direct consequence of the country becoming too reliant on mobile phones.

4 9

DATA ANALYSIS AND INTERPRETATION

YEAR RATIO OPERATING MARGIN GROSS PROFIT MARGIN NET PROFIT MARGIN 2006 22.342 12.652 16.766 2007 32.756 19.906 13.414 2008 31.738 19.388 13.888 2009 26.33 14.232 16.762

Interpretation: The above graph represents averages of operating margin, gross profit margin, and net profit margin of five major companies. Operating profit margin and gross profit margin have slightly decreased as approximately 5.41% and 5.16% respectively. On other hand net profit margin has slightly increase as approximately 2.88%. It represent the profit of telecommunication industry has no influence in recession.

5 0

LEVERAGE RATIO:
Leverage ratios are also known as capital structure ratio. They measure the companys ability to meet its long-term debt obligation. They throw light on the long- term solvency of a company.

Total Debt equity ratio :

Debt equity ratio is calculated to measure the proportion of debts & equity in capital structure. This relationship is describing the lenders contribution for each rupee of the owners contribution is called debt equity ratio. This ratio is calculated by dividing by total debt by net worth.

Total debt Total debt equity ratio=_______________ Total asset Assets turnover ratio:
The assets turnover ratio measures the efficiency of a firm in

managing and utilizing its assets. Higher ratio indicates the more efficiency of company in managing and utilizing its assets. So it implies that company can expand its activity level without additional capital investment.

Sales Fixed asset turnover ratio=________________ Fixed asset Leverage ratio:

YEAR RATIO TOTAL DEBTEQUITY FIXED ASSET TURN OVER 2006 0.61 0.652 2007 0.638 0.69 2008 1.368 0.656 2009 0.648 0.526

5 1

Interpretation: The above chart represents the averages of total debt-equity ratio and fixed turn over. Debt equity ratio is calculated to measure the proportion of debts & equity in capital structure here the ratio is 0.648:1 indicate total debt proportion is more than total asset and the assets turnover ratio measures the efficiency of a firm in managing and utilizing its assets here the ratio is 0.526:1 indicate the efficiency of industry.

LIQUIDITY RATIO:
Liquidity ratios measure the companys ability to fulfil its short-term obligations and reflect its short-term financial strength or liquidity. The commonly used liquidity ratios are:

5 2

Current Ratios:
The current ratio is a measure of the firms short term solvency. It indicates the availability of the current assets in rupees for every one rupee of current liability. A ratio of greater than one means that the firm has more current assets than current claims.

Liquidity ratio:
YEAR RATIO CURRENT RATIO QUICK RATIO 2006 2.35 2.306 2007 1.4 1.362 2008 1.282 1.236 2009 1.388 1.33

Interpretation: The above chart represents averages of current ratio and quick ratio. Here current ratio and quick ratio have increase compare to previous year. It indicate current asset has more value than current liability.

5 3

Payout ratio:
YEAR RATIO DIVIDEND PAYOUT EARNING RETENTION 2006 16 83.58 2007 19.806 78.85 2008 25.75 76.87 2009 16.522 74.208

Interpretation: The above chart indicates averages of dividend payout ratio and earning retention ratio. Here dividend payout ratio has high changes as approximately 9.23% decrease to previous year and earning retention ratio has slightly decrease as approximately 2.66% to previous year.

PER SHARE RATIO: Earning Per Share

The value is maximized when market price of equity shares is maximized. EPS is one of the most important ratios which measure the net profit earned per share. EPS is one of the major factors affecting the dividend policy of the firm and the market price of the company. Growth in EPS is more relevant for pricing of shares from absolute EPS. Profit

5 4

Per share ratio:

YEAR RATIO ADJUSTED EPS ADJUSTED CASH EPS DIVIDEND PER SHARE 2006 12.396 18.612 1.7 2007 10.968 20.614 1.8 2008 12.94 22.322 1.85 2009 14.186 25.292 1.66

Interpretation: An above graph represents averages of earning per share, cash earning per share and dividend per share. Earning per share and cash earning per share have gradually increased as approximately 1.25% and 2.97% respectively. Here, dividend per share has look like a constant at that time.

5 5

Limitation of the Study

As the project based on the secondary data the data may not be updated. The data are collected from the various sources as they may not be accurate.

5 6

SUGGESTION AND CONCLUSION

The telecom sector is expected to grow up to 500 million subscribers

by 2010 so the investors have the largest opportunity in the service sector. Many of the multinational company in the telecom sector are investing in the Indian market so it became an opportunity for new investors in the telecom sector. As my finding is about increasing demand of wireless internet and broadband services. So the firms in this industry need to think about this increasing demand and provide more innovative products in wireless internet and broadband services. So that the telecommunication industry will grow in future. To make competitive advantage the Indian players have to provide free internet service to the students.

5 7

7. BIBLIOGRAPHY
Books: Donald R Cooper & Pamela S Schindler, Business Research Methods, Eighth Edition, Tata McGraw-Hill, New York, 2003

Punithavathy

Pandian,

Security

Analysis

&

Portfolio

Management Edition, Vikas Publishing Housing Pvt. Ltd, 2007. S.Kevin, Portfolio Management Second Edition, Prentice Hall of India Pvt. Ltd.

Websites: www.devashish.com

www.nseindia.com www.moneycontrol.com www.businesstoday.intoday.in http://www.bharatbook.com/telecom and IT

www.trai.gov.in

5 8

QUESTIONNAIRE NAME OCCUPATION AGE ADDRESS

1. Do you believe that mobile service providers come close to fulfilling the requirements for a personal communication system? No

Company

Yes

Airtel BSNL Idea RELIANCE TATA INDICOM 2. Do you find that mobile service providers as the most exciting and satisfying mobile standard? No

Company Airtel BSNL Idea RELIANCE TATA INDICOM

Yes

3. Do you believe that your service provider has a genuine commitment to creating a modern and efficient communications? No

Company Airtel BSNL Idea RELIANCE TATA INDICOM

Yes

Date

Place

Signature

5 9