The Comparative Analysis on

EFFECTIVENESS OF RETAIL CHANNELS

Submitted by

KILARU NAVEEN BABU

ROLL NO-09230

BATCH XVII

2009-11

UNDER THE GUIDANCE OF

Mrs V.JAYASHREE

Project Submitted in partial fulfillment for the award of the degree of

Post graduate diploma in management (PGDM)

VIGNANA JYOTHI INSTITUTE OF MANAGEMENT

(APPROVED BY AICTE, MINISTRY OF HRD, GOVT OF INDIA)

BACHUPALLY, HYDERABAD

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 DECLARATION

I Naveen Babu Kilaru hereby declare that this project report entitled “Effectiveness Of
Retail Channels” at RELIANCE COMMUNICATIONS is the original and bonafide work
undertaken by me in partial fulfilment of the requirement of the course of PGDM.

I also declare that this project is the result of my own effort and it is not submitted to any
other institution or university for the award of any degree/diploma certificate or published
any time before. However, In an attempt to make this project my best effort, I have also
collected information from various other secondary sources

Place:

Date: (KILARU NAVEEN BABU)

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 CERTIFICATE

This is to certify that the project report entitled “Effectiveness Of Retail Channels” being
submitted to Vignana Jyothi Institute of Management is a bonafide work done by Mr.Kilaru
Naveen Babu, bearing roll no. 09230,a student of Post Graduate Diploma in Management
(PGDM) XVII-batch under my guidance and supervision.

Place:

Date: (Mrs.V.Jayashree)

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 ACKNOWLEDGEMENT

This project work seeks a synergy between the theories of the academic world and the
realities and limitations of an organizational division. I take this opportunity to express my
gratitude to my guides both in the academia and Reliance Communications and colleagues
who have helped me in this endeavor.

I wish to express my deep sense of gratitude and offer my heartiest regards to my project
guide Mrs.V.Jayashree. This project would not have been the light of the day without her
guidance.

I express my special thanks to Placement Coordinator and other faculty members for their
cooperation and encouragement.

I am extremely indebted to our respected project guide, Mr. Aditya Donepudi, Mktg Dept of
Reliance Communications for his regular guidance and help was invaluable in achieving the
objectives of the project. He inspired and encouraged me to work all through the training
period.

Further I would like to thank Mr.Purnachandra Rao Narra, Team Leader for guiding me
patiently with valuable inputs at every stage of the project and bringing out the best in me. I
wish to specially thank to all the RMS Managers and staff members for the support and help
they have provided in this project directly or indirectly.

Date: 6th June, 2010

Place: Hyderabad (Naveen Babu Kilaru)

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 SYNOPSIS

AIM
The aim of this survey is to analyse critically the Effectiveness of Retailers preference,
behaviour, and their satisfaction in Reliance with other Competitors in telecom sector at
Hyderabad, Andhra Pradesh.

RESEARCH OBJECTIVES
• To understand the Retailers preference in telecom sector.
• To study the service provider’s service quality in the telecom sector.
• To study the Retailers satisfaction and understand the current market scenario in telecom
sector.

COMMERCIAL VIABILITY OF THE STUDY

In today’s scenario communication has become much faster day by day. One of them is the
growth of telecom sector. Today many organisations provide services for telecom purpose.
This study will help to understand Retailer preference and their satisfaction by the services
provided by different organisations in this sector.it will also help these organisations to form
various strategies and getting the results from marketing efforts.

RESEARCH METHODOLOGY
In this study Retailers of telecom sector, dealing in the products and services of various
telecom operators were selected. The study exploited both primary and secondary sources of
data. The primary sources comprised of the observed behaviour of employees consisting of 4
main categories divided over 6 subcategories. The categories consisted of Basic
Infrastructure, Man power, Process and Product related categories. The Comparative
Analysis of Reliance with other networks were done. The weightage was given according to
the points observed in various stores at Hyderabad. Total weightage of 100 was assigned for
each category. The weightage was also given to all the subcatogories. The study consisted of
10 areas dealing in both prepaid and post-paid product and services. The data was collected
from the store managers who were Retailers for products and services of all telecom

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operators operating in Hyderabad. The data gathered were analysed and interpreted using
simple arithmetic calculations, Sum, Medians and Bar-Chart were calculated and prepared for
each category. The secondary source basically consisted of books, internet, articles,
magazines, project report and newspaper.

LIMITATIONS
The limitation of the study is that the all network areas from Hyderabad i.e. the capital city of
Andhra Pradesh have been taken into account. In this survey only the view of Retailers has
been taken into account but neither the view of the company nor the satisfaction level of the
customers is taken into account, and as we know retailers behaviour is at times monetarily
motivated one so some of the response may be biased. However the study has provided
encouraging results and there is scope for deriving more information if a more rigorous study
is conducted at district levels to cover the entire state. The study is totally limited to the stores
located near to Somajiguda and primarily 10 areas located in Hyderabad.

SUMMARY
The development of the telecom sector has experienced a major process of transformation in
terms of its growth, technological content and market structure in the last decade. The study
aims to analyse that with the increase in competition in the telecom service, higher levels of
Retailer satisfaction with affordable price for end users and improved quality of services are
achieving or not .The study also shows whether the Retailer who deals with various service
providers product and service are satisfied with the service quality and allied parameter
attached to it or not. As competition in telecom sector is increasing day by day and all
operators are in a run to increase their subscriber base, at times tend to ignore the satisfaction
level of the Retailers, who play a vital role in delivering the end service to the customer. The
operators in order to lure customer, comes out with attractive customer schemes but in spite
of increase in their subscriber base and revenue, sometimes neglects the Retailers satisfaction
and profitability. So this study is a one of a kind study where an attempt has been made to
know the Retailers preference and behaviour they show towards a particular operator’s
product and services and their level of satisfaction while dealing with those.

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 CONTENTS

S.No Title Page

no

1. Synopsis/ Summary ……………………………………………….. 5

2. Reliance Communications Profile…………………………………. 8

3. Introduction of RETAIL sector……………………………………. 29

4. Introduction of TELECOM sector………………………………… 42

5. Telecom regulatory authority of india…………………………….. 51

6. Scope and Significance of the study……………………………… 61

7. Objectives of the Study…………………………………………… 62

8. Methodology……………………………………………………… 63

9. Analysis and Interpretation……………………………………….. 64

10. Conclusion and Recommendations………………………………. 68

11. Bibilography………………………………………………………

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 RELIANCE COMMUNICATIONS LIMITED

PROFILE

8|Page
Overview:

The Late Dhirubhai Ambani dreamt of a digital India — an India where the common
man would have access to affordable means of information and communication. Dhirubhai,
who single-handedly built India’s largest private sector company virtually from scratch, had
stated as early as 1999: “Make the tools of information and communication available to
people at an affordable cost. They will overcome the handicaps of illiteracy and lack of
mobility.”

It was with this belief in mind that Reliance Communications (formerly Reliance
Infocomm) started laying 60,000 route kilometers of a pan-India fiber optic backbone. This
backbone was commissioned on 28 December 2002, the auspicious occasion of Dhirubhai
70th birthday, though sadly after his unexpected demise on 6 July 2002.

Reliance Communications has a reliable, high-capacity, integrated (both wireless and

wire line) and convergent (voice, data and video) digital network. It is capable of delivering a
range of services spanning the entire information and communication value chain, including
infrastructure and services for enterprises as well as individuals, applications, and consulting.

Today, Reliance Communications is revolutionizing the way India communicates and

networks, truly bringing about a new way of life.

Reliance Communications will offer a complete range of telecom services, covering

mobile and fixed line telephony including broadband, national and international long distance
services, data services and a wide range of value added services and applications that will
enhance productivity of enterprises and individuals.

Reliance India Mobile, the first of Reliance Communications' initiatives was launched
on December 28, 2002, the 70th birthday of the Reliance group founder, Shri. Dhirubhai H.
Ambani.

This marks the beginning of Reliance's dream of ushering in a digital revolution in

India by becoming a major catalyst in improving quality of life and changing the face of
India. It aims to achieve this by putting the power of information and communication in the
hands of the people of India at affordable costs.

9|Page
Reliance Communications will extend its efforts beyond the traditional value chain to
develop and deploy telecom solutions for India's farmers, businesses, hospitals, government
and public sector organizations.

A DREAM COME TRUE

The Late Dhirubhai Ambani dreamt of a digital India — an India where the common man
would have access to affordable means of information and communication. Dhirubhai, who
single-handedly built India’s largest private sector company virtually from scratch, had stated
as early as 1999: “Make the tools of information and communication available to people at an
affordable cost. They will overcome the handicaps of illiteracy and lack of mobility.”

It was with this belief in mind that Reliance Communications (formerly Reliance Infocomm)
started laying 60,000 route kilometres of a pan-India fibre optic backbone. This backbone
was commissioned on 28 December 2002, the auspicious occasion of Dhirubhai’s 70th
birthday, though sadly after his unexpected demise on 6 July 2002.

Reliance Communications has a reliable, high-capacity, integrated (both wireless and

wireline) and convergent (voice, data and video) digital network. It is capable of delivering a
range of services spanning the entire infocomm (information and communication) value
chain, including infrastructure and services — for enterprises as well as individuals,
applications, and consulting.

Today, Reliance Communications is revolutionising the way India communicates and

networks, truly bringing about a new way of life.

Few men in history have made as dramatic a contribution to their country’s economic
fortunes as did the founder of Reliance, Sh. Dhirubhai H Ambani. Fewer still have left
behind alegacy that is more enduring and timeless. As with all great pioneers, there is more
than one unique way of describing the true genius of Dhirubhai: the corporate visionary, the
unmatched strategist, the proud patriot, the leader of men, the architect of India’s capital
markets, and the champion of shareholder interest.

But the role Dhirubhai cherished most was perhaps that of India’s greatest wealth creator. In
one lifetime, he built, starting from the proverbial scratch, India’s largest private sector
enterprise.
    

10 | P a g e
When Dhirubhai embarked on his first business venture, he had a seed capital of barely US$
300 (around Rs 14,000). Over the next three and a half decades, he converted this fledgling
enterprise into a Rs 60,000 crore colossus—an achievement which earned Reliance a place on
the global Fortune 500 list, the first ever Indian private company to do so.

Dhirubhai is widely regarded as the father of India’s capital markets. In 1977, when Reliance
Textile Industries Limited first went public, the Indian stock market was a place patronised
by a small club of elite investors which dabbled in a handful of stocks.

Undaunted, Dhirubhai managed to convince a large number of first-time retail investors to

participate in the unfolding Reliance story and put their hard-earned money in the Reliance
Textile IPO, promising them, in exchange for their trust, substantial return on their
investments. It was to be the start of one of great stories of mutual respect and reciprocal gain
in the Indian markets.

Under Dhirubhai’s extraordinary vision and leadership, Reliance scripted one of the greatest
growth stories in corporate history anywhere in the world, and went on to become India’s
largest private sector enterprise.

Through out this amazing journey, Dhirubhai always kept the interests of the ordinary
shareholder uppermost in mind, in the process making millionaires out of many of the initial
investors in the Reliance stock, and creating one of the world’s largest shareholder families.
 
  The late Dhirubhai Ambani dreamt of a digital India
— an India where the common man would have
access to affordable means of information and
communication. Dhirubhai, who single-handedly
built India’s largest private sector company virtually
from scratch, had stated as early as 1999: “Make the
tools of information and communication available
to people at an affordable cost. They will
overcome the handicaps of illiteracy and lack of
mobility.”
It was with this belief in mind that Reliance
Communications (formerly Reliance Infocomm)

11 | P a g e
 started laying 60,000 route kilometres of a pan-India
fibre optic backbone. This backbone was
commissioned on 28 December 2002, the auspicious
occasion of Dhirubhai’s 70th birthday, though sadly
after his unexpected demise on 6 July 2002.
     
Reliance Communications has a reliable, high-capacity, integrated (both wireless and
wireline) and convergent (voice, data and video) digital network. It is capable of delivering a
range of services spanning the entire infocomm (information and communication) value
chain, including infrastructure and services — for enterprises as well as individuals,
applications, and consulting.

Today, Reliance Communications is revolutionising the way India communicates and

networks, truly bringing about a new way of life.
 
Think big. Think different. Think ahead.
 
  Dhirubhai preached — and personally practised —
one mantra throughout his life: Dream with
conviction.

He built the Reliance empire from scratch and, in a

short span of 25 years, it catapulted to become one
of the top Fortune 500 corporations of the world —
an achievement unparalleled in history.

He was deeply rooted in traditional Indian values,

and at the same time, Dhirubhai possessed a very
modern outlook - truly that of a 21st century
person. His corporate philosophy was short, simple
and incredibly effective: “Think big. Think
different. Think fast. Think ahead. Aim for the
best.” This was clearly reflected in his passion for
mega-sized projects, as well as his fascination for
cutting-edge technology and desire to always
achieve the highest possible productivity. At

12 | P a g e
 Reliance, Dhirubhai was a pillar of inspiration for
one and all. By practicing what he preached, he
inspired and encouraged everyone to surpass the
best in the world.
     
Dhirubhai fully realised that true empowerment of the people is possible only through
education. Being an effective communicator, he continued to inspire, guide, educate and
motivate everyone through his communications. He was a firm believer in the power of
information and communication, and how it can be utilised and turned to the advantage of
one and all, by making time and distance irrelevant.

He would always say that if a telephone call could be made cheaper than a postcard, it would
transform every home, empower every Indian, remove every obstacle to opportunity and
growth, and tear apart every barrier that divides Indian society. He was convinced that
infocom could energise enterprises, drive governance, and render learning an interesting
experience, apart from making life exciting.

Keeping his conviction as our credo, Reliance Communications is committed to transform

Dhirubhai’s dream into a reality.

FOUNDER
Few men in history have made as dramatic a contribution to their country’s economic
fortunes
as did the founder of Reliance, Sh. Dhirubhai H Ambani. Fewer still have left behind a legacy
that is more enduring and timeless.

As with all great pioneers, there is more than one unique way of describing the true genius of
Dhirubhai: The corporate visionary, the unmatched strategist, the proud patriot, the leader of
men, the architect of India’s capital markets, the champion of shareholder interest.But the
role Dhirubhai cherished most was perhaps that of India’s greatest wealth creator. In one
lifetime, he built, starting from the proverbial scratch, India’s largest private sector enterprise.

When Dhirubhai embarked on his first business venture, he had a seed capital of barely US$

13 | P a g e
300 (around Rs 14,000). Over the next three and a half decades, he converted this fledgling
enterprise into a Rs 60,000 crore colossus—an achievement which earned Reliance a place on
the global Fortune 500 list, the first ever Indian private company to do so.

Dhirubhai is widely regarded as the father of India’s capital markets. In 1977, when Reliance
Textile Industries Limited first went public, the Indian stock market was a place patronised
by a small club of elite investors which dabbled in a handful of stocks.

Undaunted, Dhirubhai managed to convince a large number of first-time retail investors to

participate in the unfolding Reliance story and put their hard-earned money in the Reliance
Textile IPO, promising them, in exchange for their trust, substantial return on their
investments. It was to be the start of one of great stories of mutual respect and reciprocal gain
in the Indian markets.

Through out this amazing journey, Dhirubhai always kept the interests of the ordinary
shareholder uppermost in mind, in the process making millionaires out of many of the initial
investors in the Reliance stock, and creating one of the world’s largest shareholder families.

WORK ENVIRONMENT

Where merit is rewarded

Reliance Communications is in the process of setting up best-in-class work facilities across

major cities in India. At Mumbai, the Dhirubhai Ambani Knowledge City (DAKC) hosts
more than 10000 professionals with a range of office complexes, food courts, avenues and
boulevards, fountains and video conferencing.

Apart from the physical work setting, Reliance Communications is fostering a work culture
marked by positive energy, team work and performance ethic.

We are committed to building a non-hierarchical and open work environment and a result-
driven meritocracy.

14 | P a g e
15 | P a g e
RELIANCE COMMUNICATIONS

Reliance Communications Limited

Public
Type
BSE: 532712

Industry Telecommunications

Founded 2004

Founder(s) Dhirubhai Ambani

Headquarters Navi Mumbai, Maharashtra, India

Area served India

Anil Ambani
(Chairman)
Key people
Satish Seth
(MD)

Wireless
Telephone
Internet
Products Television
Data Cards
Recharge Vouchers
VC

Rs 22,948 crore (US$ 5.12 billion)

Revenue
(2009)

16 | P a g e
 Operating Rs 9,305 crore (US$ 2.08 billion)
income (2009)

Rs 6,045 crore (US$ 1.35 billion)

Net income
(2009)

Rs 102,207 crore (US$ 22.79

Total assets
billion) (2009)

Rs. 1,032 crore (US$ 230.14

Total equity
million) (2009)

Employees 31,884 (2009)

Reliance Anil Dhirubhai Ambani

Parent
Group

Reliance Telecom Limited

Reliance Globalcom Limited
Reliance Tech Services
Subsidiaries Reliance Communications
Infrastructure Limited (RCIL)
Reliance Big TV Limited
Reliance Infratel Limited

Website Rcom.co.in
VISION

“We will leverage our strengths to execute complex global-scale projects to facilitate leading-
edge information and communication services affordable to all individual consumers and
businesses in India.

We will offer unparalleled value to create customer delight and enhance business
productivity.

We will also generate value for our capabilities beyond Indian borders and enable millions of
India's knowledge workers to deliver their services globally.”

17 | P a g e
NATURE OF ACTIVITY

Reliance Communications will offer a complete range of telecom services, covering

mobile and fixed line telephony including broadband, national and international long distance
services, data services and a wide range of value added services and applications that will
enhance productivity of enterprises and individuals.

Reliance India Mobile, the first of Reliance Communications' initiatives was launched
on December 28, 2002, the 70th birthday of the Reliance group founder, Shri. Dhirubhai H.
Ambani.

This marks the beginning of Reliance's dream of ushering in a digital revolution in

India by becoming a major catalyst in improving quality of life and changing the face of
India. It aims to achieve this by putting the power of information and communication in the
hands of the people of India at affordable costs.

Reliance Communications will extend its efforts beyond the traditional value chain to
develop and deploy telecom solutions for India's farmers, businesses, hospitals, government
and public sector organisations.

FINANCIAL RESULT

NET PROFIT UP BY 70.8% TO RS. 5,401 CRORE (US$ 1,350 MILLION) REVENUES
HIGHER BY 31.8% AT RS. 19,068 CRORE (US$ 4,765 MILLION) EBITDA HIGHER BY
43.3% AT RS. 8,199 CRORE (US$ 2,049 MILLION)

RCOM IS THE MOST PROFITABLE INTEGRATED TELECOM COMPANY IN INDIA

EBITDA MARGIN EXPANDS FROM 39.5% TO 43.0%, HIGHEST IN INDIA
BOARD APPROVES 1 5% DIVIDEND - RCOM REMAINS THE ONLY LISTED
TELECOM COMPANY IN INDIA TO REWARD 2 MILLION SHAREHOLDERS

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DIVIDEND PAYOUT OF RS. 181 CRORE NET WORTH EXPANDS TO RS. 25,643
CRORE (US$ 6.4 BILLION) AND NET DEBT-EQUITY RATIO PLACED AT A
CONSERVATIVE 0.39: 1 AGGRESSIVE NETWORK EXPANSION ACCELERATED
WITH RS. 21,204 CRORE (US$ 5.3 BILLION) CAPITAL EXPENDITURE DURING THE
YEAR FY 2008 CAPEX LARGEST IN INDIAN TELECOM SECTOR ONLY COMPANY
TO HAVE NATIONWIDE GSM & CDMA SERVICES IN INDIA

Mumbai, April 30, 2009

Reliance Communications Limited (RCOM) today announced its audited consolidated

financial results for the year ended March 31, 2009.

Highlights of the financial performance for the year are:

 Net Profit of Rs. 5,401 crore (US$ 1,350 million), higher by 70.8% compared to
Net Profit of Rs. 3,164 crore (US$ 71 7 million) in the last year.
 EBITDA at Rs. 8,199 crore (US$ 2,049 million), growth of 43.3%. EBITDA
margin expands from 39.5% to 43.0% with strong contributions across all
businesses -Wireless, Global and Enterprise
 Revenue growth of 31.8% at Rs. 1 9,068 crore (US$ 4,765 million) from Rs.
14,468 crore (US$ 3,280 million).

 Return on Net Worth for the year is 33.7% reflecting improved resource
utilization.

 Shareholders Equity (Net Worth) increases to Rs. 25,643 crore (US$ 6.4 billion)
-among the top three companies in India.

 Conservative capital structure - Net Debt to Equity Ratio maintained at a

conservative level of 0.39:1, despite capex spend of Rs. 21,204 crore (US$ 5.3
billion) during the year.

Commenting on the results, Mr. Anil Dhirubhai Ambani, Chairman, Reliance

Communications Limited, said:

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“Reliance Communications had a record year and we are confident of improved
performance in the future.”

Financial Results Summary

(Rs. Crore)

Particulars 12 months ended 12 months ended Increase /

31/3/08 31/3/07 (Decrease)

Turnover

Wireless 15,214 10,728 41.8%

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 Global 5,475 5,177 5.8%

Broadband 1,787 1,144 56.2%

Diversified 431 372

Total (post eliminations) 19,068 14,468 31.8%

EBITDA

Wireless 6,085 3,984 52.7%

Global 1,403 1,271 10.4%

Broadband 865 519 66.6%

Diversified (122) 26

Total (post eliminations) 8,199 5,721 43.3%

EBITDA margin 43.0% 39.5% 3.5 ppt

Depreciation 2,805 2,465 13.8%

Financial Charges (net) (400) -

Exceptional items 1,283 30

PBT 7,076 3,225 119.4%

Tax 284 62

PAT (before minority 6,793 3,163

interest)

Share of minority interest 1,392 -

PAT (after minority 5,401 3,163 70.8%

interest)

21 | P a g e
BUSINESS REVIEW:

Wireless:

Reliance Communications added 4.6 million wireless customers during the quarter,
compared to 4.0 million in the corresponding quarter last year. At the close of the quarter,
RCOM had 41million wireless customers. During the quarter, RCOM’s ARPU marginally
declined to Rs.339. However, wireless revenue per minute (RPM) remained stable at 0.75
paisa, as against an industry-continuous decline.

Global:

FLAG Telecom continued its momentum of major new contract wins while expanding
presence into new countries and making strong progress on the department of its “Next
Generation Network” project. Overall, long distance volumes increased by 22%
compared to the corresponding quarter last year to cross 754 crore (7.5 billion) minutes.
Volumes in the international retail calling card showed creditable improvement despite
increased competition and the customer base now exceeds 1.4 million.

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EBITDA of the Global business during the quarter ended December 31, 2007 was at Rs.
343 crore (US$ 87 million) and EBITDA margin was at 25.8%.

BROADBAND:

The number of access lines increased to 900,000 at the end of the quarter, a 70% increase
from 530,000 in the corresponding quffarter last year. Leveraging its network of 25,000 km.
of metro fiber optic cables, RCOM expanded its wire line connectivity by 91% to more
than 727,000 buildings from 380,000 buildings in the corresponding quarter last year.

New orders booked by the business during the quarter grew by 48% over the preceding
quarter. Reliance Communications has a market share of over 50% of new business
acquisitions in the enterprise connectivity space. The Broadband business achieved revenue
growth of 44.4% to Rs 456 crore (US$ 116 million), and EBITDA grew by 49.5% to Rs. 222
crore (US$ 56 million). EBITDA margin was at 48.7% in the quarter ended December 31,
2007, from 47% in the corresponding quarter in the previous year.

CORPORATE DEVELOPMENTS:

RCOM received start-up spectrum to offer nationwide GSM services

RCOM recently received start-up spectrum to offer nationwide GSM services. RCOM plans
to launch GSM services all over India. The launch of nationwide GSM services would enable
RCOM to effectively target the fast-growing GSM market. Reliance Telecom, a subsidiary of
RCOM already offers GSM services in 8 circles. We will now be nationwide GSM & CDMA
player.

RCOM partners with Microsoft to deliver IPTV in India on the Microsoft Media room
Platform

Reliance Communications Limited founded by the late Shri. Dhirubhai H Ambani (1932-
2002) is the flagship company of the Reliance Anil Dhirubhai Ambani Group. The Group
currently has a market capitalization of over Rs.3,20,000 crore, net worth in excess of
Rs.40,000 crore, cash flows of Rs.9,000 crore, net profit of Rs. 5,000 crore and zero net debt.

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Rated among "Asia's Top 5 Most Valuable Telecom Companies", Reliance Communications
is India's foremost and truly integrated telecommunications service provider. The company,
with a customer base of over 43 million including over 1.4 million individual overseas retail
customers, ranks among the Top 10 Asian Telecom companies by number of customers.
RCOM corporate clientele includes 1850 Indian and multinational corporations, and over 200
global carriers.

Reliance Communications has established a pan-India, next generation, integrated (wireless

and wire line), convergent (voice, data and video) digital network that is capable of
supporting best-of-class services spanning the entire infocomm value chain, covering over
15,000 towns and 400,000 villages. Reliance Communications owns and operates the world's
largest next generation IP enabled connectivity infrastructure, comprising over 165,000
kilometers of fiber optic cable systems in India, USA, Europe, Middle East and the Asia
Pacific region.

BUSINESS

India’s leading integrated telecom company Reliance Communications is the flagship

company of the Anil Dhirubhai Ambani Group (ADAG) of companies. Listed on the National
Stock Exchange and the Bombay Stock Exchange, it is India’s leading integrated
telecommunication company with over 100 million customers.

Our business encompasses a complete range of telecom services covering mobile and fixed
line telephony. It includes broadband, national and international long distance services and
data services along with an exhaustive range of value-added services and applications. Our
constant endeavour is to provide an enhanced customer experience and achieve customer
satisfaction by upscaling the productivity of the enterprises and individuals we serve.

Reliance Mobile (formerly Reliance India Mobile), launched on 28 December 2002,

coinciding with the joyous occasion of the late Dhirubhai Ambani’s 70th birthday, was among
the initial initiatives of Reliance Communications. It marked the auspicious beginning of
Dhirubhai’s dream of ushering in a digital revolution in India. Today, we can proudly claim
that we were instrumental in harnessing the true power of information and communication, by
bestowing it in the hands of the common man at affordable rates.

24 | P a g e
We endeavour to further extend our efforts beyond the traditional value chain by developing
and deploying complete telecom solutions for the entire spectrum of society.
 

WIRELESS

Reliance Mobile

With over 100 million subscribers across India, Reliance Mobile is

India’s largest mobile service brand. Reliance Mobile services
now cover over 24,000 towns, 6 lakh villages, and still counting.

We have achieved many milestones in this short journey. In 2003,

AC Nielsen voted Reliance Mobile (formerly Reliance India
Mobile) as India’s Most Trusted Telecom Brand. In July 2003, it
created a world record by adding one million subscribers in a
matter of just 10 days through its ‘Monsoon Hungama’ offer.
What sets Reliance Mobile apart is the fact that nearly 90 per cent of our handsets are data-
enabled, and can access hundreds of Java applications on Reliance Mobile World.

Reliance Mobile has ushered in a mobile revolution by offering advanced multimedia

handsets to the common man at very affordable rates. This innovative low pricing has
increased the number of mobile phone users and its result is clearly reflected in the meteoric
rise in India’s tele-density over the past four years.

Our pan-India wireless network runs on CDMA2000 1x technology, which has superior voice
and data capabilities compared to other cellular mobile technologies. CDMA2000 1x is more
cost-effective as it utilises the scarce radio spectrum more efficiently than other technologies
do. Enhanced voice clarity, superior data speed of up to 144 kbps and seamless migration to
newer generations of mobile technologies are some of its key differentiators.
 

R WORLD
 
The R World suite of Reliance Mobile is a unique Java-based
application. Its uniqueness lies in the fact that it enables complex
25 | P a g e
 
With over 150 data applications offering varied services - unique to any wireless service in
India - R World is truly a treasure house of knowledge, information, entertainment and
commerce
Reliance Group

Reliance Communications, formerly known as Reliance Infocomm, along with Reliance

Telecom and Flag Telecom, is part of Reliance Communications Ventures (RCoVL).Reliance
Communications Limited (BSE: 532712) founded by the late Shri Dhirubhai H Ambani
(1932-2002) is the flagship company of the Reliance Anil Dhirubhai Ambani Group. The
Reliance Anil Dhirubhai Ambani Group currently has a net worth in excess of Rs. 64,000
crore (US$ 13.6 billion), cash flows of Rs. 13,000 crore (US$ 2.8 billion), net profit of Rs.
8,400 crore (US$ 1.8 billion).The Equity Shares of RCOM are listed on Bombay Stock
Exchange Limited and National Stock Exchange Limited. The Global Depository Receipts
and Foreign Currency Convertible Bonds are listed on Luxembourg Stock Exchange and
Singapore Stock Exchange respectively.

Company Overview

Reliance Communications is India's truly integrated telecommunications service provider.

The Company has a customer base of 1050 million including over 2.5 million individual
overseas retail customers. It ranks among the Top 5 Telecom companies in the world by
number of customers in a single country. Reliance Communications corporate clientele
includes 2,100 Indian and multinational corporations, and over 800 global, regional and
domestic carriers. A pan-India, next generation, integrated (wireless and wireline),
convergent (voice, data and video) digital network that is capable of supporting best-of-class
services spanning the entire communications value chain,covering over 24,000 towns and
600,000 villages has been established by Reliance Communications. Reliance
Communications owns and operates the next generation IP enabled connectivity
infrastructure[3], comprising over 190,000 kilometers of fiber optic cable systems in India,
USA, Europe, Middle East and the Asia Pacific region.

NOTABLE AWARDS

 Anil Ambani – The Telecom Person of the Year 2008 by Light Reading

26 | P a g e
  Most Promising Service Provider of 2003 (Asia Pacific) Award instituted by Asia
Pacific Technology from Frost & Sullivan
 RCOM adjudged the World’s Top CDMA Operator at the Global CDMA Industry
Achievement Awards
 Reliance Mobile amongst the "Top 10 Most Trusted Brands“ & rated as "India's Most
Trusted Service Brand 2009“ by "The Economic Times“

 Reliance Mobile" voted as No.8th in "India's Most Admired Marketers“. The

youngest Indian brand amongst the "Top 10" and ahead of P&G, Hero Honda,
Samsung, LG, Colgate and Cadbury's.

 Reliance Mobile, India's Top 25 Marketers Awards 2009, Pitch, November 09

 Mobile Marketing Award(Los Angeles) at Global level for cross-media integration on
digital and mobile medium of Reliance GSM launch campaign (Go For It!).

 Best Advert game award conferred by World Brand Congress for digital advertising
game hosted on Zapak.com
 CMOs Council Brand Leadership Award to Reliance Communications,
November'2009
 World Brand Congress, Chair for Yr.2009-10 granted to RCOM, November'2009
 Business Today along with TAM rated Simply Reliance TVC as the most watched Ad
in the month of October 2009.
 Total Network TVC s Kedarnath & Highway rated as No.1 campaign in India for the
month of Aug 08 & Sept 08
 Most awarded single brand for Creative Excellence ABBY Awards 2007(Advertising
Agency Association of India)
 Fair &Lovely Scholarship on Reliance Mobile wins at MMA Awards, USA.

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 INTRODUCTION OF RETAIL AND TELECOM SECTOR

The customers are very important and play a very crucial role in any process of marketing.
Today the customers are kings of the market because the customer’s loyalty and customer’s
preference are built by the products and services offered to the customers and they seek for
more benefits and money’s worth for the amount they spend. But these services and products
are delivered to the end customers only by the Retailers who work as the end medium in the
whole chain of sales. That is where the concept of Retailers preference and Retailers
behaviour comes because the Retailers make the marketers rethink about designing their
services; because of the important role they play in the whole chain. They have to think about
the market strategies, Retailer behaviour, Retailers taste etc also. Many marketers are smart
enough to understand Retailers needs, wants and demands and perform beyond their
expectation i.e.they delight them. it provides them growth , profitability and creativity with
lot of inventions.
Whenever we talk of growth and development of a nation, hardly can there be
anyone who can ignore the vital contribution of Telecommunication sector. Today it has
become a lifeline for us, in the absence of which we feel we are separated from the world at
large. The importance of telecommunication product and service has gone deep in the life of
people that after three essentials of human being i.e. food, shelter and clothing the fourth one
that can be added comfortably is the communication. A gadget and a service which can be
found in everyone’s palm ranging from rickshaw-puller to big businessmen. Now talking of
India, which is still a developing country, the importance of telecommunication as a sector
can be very well understood. Indian telecom sector has been doing exceptionally well in the
past decade. Its structural and institutional reforms have provided tremendous growth
opportunity to his sector. India has nearly 250 million telephone lines making it the third
largest network in the world after China and USA. With a growth rate of 45%, Indian telecom
industry has the highest growth rate in the world. And in this context whenever we talk of
mobile telephony, Vodafone as a brand must be taken in to account. Nowadays there is lot of
competition between different telecom operators who in order to add more subscriber base to
the existing figures comes out with attractive customer schemes and virtually there is a tug of
war between operators to get more market share. But in this fierce competitive war to get

28 | P a g e
more subscriber base, many a times the Retailers who play a vital role in the whole chain of
sales and who influence customers for a service provider are sometimes ignored. So from this
study an attempt has been made to understand the psychology, behaviour, preference and
satisfaction at the Retailer level. In this competitive market for a service provider to get an
edge over other operator, in addition to other prevailing factors a operator must clearly
understand the behaviour, preference and satisfaction level of Retailers, which will help them
to design effective strategies to get more sales and increase subscriber base and shift push
sales to pull sales. The study delves into how the Retailer behaves and their expectation level
from a particular service provider and how it can be effectively managed.

RETAILING

Retailing consists of the sale of goods or merchandise from a very fixed location, such as

a department store, boutique or kiosk, or by mail, in small or individual lots for
direct consumption by the purchaser. Retailing may include subordinated services, such as
delivery. Purchasers may be individuals or businesses. In commerce, a "retailer" buys goods
or products in large quantities from manufacturers orimporters, either directly or through
a wholesaler, and then sells smaller quantities to the end-user. Retail establishments are often
called shops or stores. Retailers are at the end of the supply chain.
Manufacturing marketers see the process of retailing as a necessary part of their
overall distribution strategy. The term "retailer" is also applied where a service provider
services the needs of a large number of individuals, such as a public utility, like electric
power.

Shops may be on residential streets, shopping streets with few or no houses or in a shopping
mall. Shopping streets may be for pedestrians only. Sometimes a shopping street has a partial
or full roof to protect customers from precipitation. Online retailing, a type of electronic
commerce used for business-to-consumer (B2C) transactions and mail order, are forms of
non-shop retailing.

Shopping generally refers to the act of buying products. Sometimes this is done to obtain

necessities such as food and clothing; sometimes it is done as a recreational activity.
Recreational shopping often involves window shopping (just looking, not buying) and
browsing and does not always result in a purchase.

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RETAIL INDUSTRY IN INDIA

The Indian retail industry is growing at a rapid pace, slowly inching towards becoming the
next big boom industry; in fact, retail India is heralded as one of the sunshine industries
accounting for nearly 11% of the country’s GDP. A surging economy, with policies that
create an environment conducive for investment, has revolutionised the Indian retail industry
which is turning out to be a perfect playing field for the leading global retail brands and the
small entrepreneurs trying to get a foothold in the industry. Though unorganised retailing is
still the dominant segment in the retail market, organised retailing has grown in tandem with
the global retail trends, slowly emerging from the shadows of unorganised retail and taking it
towards a higher growth trajectory. The vibrant economy leading to the increase in income
levels and spending potentials of the middle class has brought a complete reversal in the
behavioural pattern of the generally price conscious Indian consumers. For a rapidly growing
economy like India with a billion population (50 percent of them under the age of 25, and a
whopping 70 percent under 35), organised retailing is at a very nascent stage though it has the
potential to emerge as the biggest market in the near future.
The AT Kearney's Global Retail Development Index has identified India as the most
attractive destination for retail business, all set to become one of the top five retail markets of
the world in 10 years. The present government’s policy of allowing 100% FDI in the cash
and carry wholesale format, and 51% FDI in single brand retailing, along with significant
Franchisee agreements and other further liberalisation would propel the value of the Indian
retail industry to about US$1065 billion by 2016, with organised retail holding around 15.5%
of the total sales at US$165 billion.)

TRADITIONAL AND MODERN RETAILING

Traditional retailing (Indian unorganized retailing) constitutes a major share (around 97%)
of the total retail market in India, offering a stiff competition to the advent of organised retail.
Most of these ‘mom and pop’ outlets in the neighbourhood colonies and residential areas
have a fair advantage over organised retail as they have been in the business for years,
running from generation to generation and enjoys a closer relationship and kinship with the
consumers. Unorganised retail outlets consisting of kirana stores and street side vendors are

30 | P a g e
generally low cost ventures operated with cheap labour, smaller retail space and lower or
sometimes no taxes at all.

Modern retailing (Indian organised retailing) is geared for the big times with a vibrant
economy and a positive shift in the demography of the Indian population. The younger
generation with high disposable incomes in today’s consumerist global era are spending
more, demanding better service, and looking for quality products to keep up with the rapidly
changing lifestyles that come with exposure to the latest global trends and cultures. The
massive influx of young population(with high income) from rural hamlets to urban
settlements, phenomenal rise in the number of nuclear families with double incomes, greater
representation of women in the workforce and a general growth in prosperity make India a
hot destination for organised retail companies. Market analysts predict that organized retail in
India is poised to overtake the GDP growth in the next few years with favourable government
policies, rapid lifestyle changes, swing (positive) in the demographic pattern, and the steady
growth in the income levels.

INDIAN RETAIL – CATEGORIES, FORMATS AND PLAYERS

Unorganised retailers largely dominate the retail space in India, occupying a major chunk of
the business especially in the food and grocery segments. However, organised retail is slowly
and steadily picking up momentum in segments like apparels, footwear, and electronic
durables, and in various retail formats like departmental stores and supermarkets. The major
segments of organised retail in India would consist of Apparel and Accessories, Consumer
Durables, Home Decor, Telecom, Technology, Entertainment, Finance, Health and Wellness,
Food & Beverage, Travel, Automotive, Child Care etc.
Some of the more common formats of organised retail in India are Hypermarkets,
Supermarkets, Online Stores, Kirana Stores, Wholesale Retail Markets, Direct Marketing,
Convenience Stores, and Shopping Malls etc.
The Tatas, the Reliance Group, the Bharti Group, Aditya Birla Group, ITC, RPG Group, and
the Piramals et al are the leading retail companies with a stake in the organised retail sector in
India. These major Indian retail companies have been successfully running brands like
Westside, Big Bazar, Lifestyle, Foodworld, Music World, Subhiksa, Crossword, Wills
Lifestyle, Globus and Ebony to name a few. Benetton, Addidas, Reebok, Levis, Diary Farm,

31 | P a g e
KFC, Metro, Wal Mart, Marks & Spencers etc are some of the more popular global retail
brands that have set up retail business in India.
With 70 percent of the Indian population living in rural areas, where almost half of the
country's national income is generated, the rural market offers huge opportunities to serious
retail marketers looking for a long haul. Some of the prominent retailing companies have set
up shop in the rural sector introducing innovative business models, like Chaupal Sagar (an
ITC initiative), Project Shakti (HLL), Adhar Stores (Godrej Agrovet) Hariyalli Kishan Bazar
etc. These rural retail initiatives enable the farmers to access multiple services and products
like retail banking, fertilizers and chemicals, health products, farm needs etc.

INDIAN RETAIL - CHALLENGES

Indian retail industry still has to overcome a number of challenges and roadblocks, before it
establishes itself as an organised retail market at par with international standards. In India,
unorganised retail marketers still pose a serious challenge to the entry of any organised retail
player. Some debilitating factors in the progress of Indian retail may include:

» Huge gap in the demand and supply of trained work force

» Absence of efficient supply chain management system
» Small retail space (by international standards)
» Socio-economic and cultural diversity hampers in projecting an established model and
pattern of consumption
» Intrinsic complexity of retailing – low margins, danger of product obsolescence & constant
price changes
» Complex legislation and bureaucratic red tape resulting in difficult navigation
» Taxation that favours unorganised retail players
» High cost of operation
» Price conscious consumers with an age old culture of saving rather than spending

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GROWTH DRIVERS OF INDIAN RETAIL

Retail industry in India, however, has a huge growth potential, with opportunities existing in
multiple sectors and segments. Organised retailing in India in the near future would be driven
by:
» Liberalisation of the Indian Economy
» Rapid Urbanisation
» Sharp rise in the Per Capita Income
» Changing lifestyles
» Shift in the consumer shopping behaviour pattern.
» Increase of dual income nuclear families
» Internet revolution opening new doors to the global market
» Increasing population of young working people under 25
» High prospect of India becoming a sourcing base for international retail companies
» Availability of great quality real estate
» A billion population ( and rising)

RETAIL STORES-TYPES

Retail Stores

COCO COFO FOFO

RELIANCE WORLD RELIANCE MOBILE SHOPS

MOBILE STORE

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Retail channels are mainly divided into 3 parts namely:

1) COCO
2) COFO
3) FOFO

COCO

COCO means Company Owned and Company Operated. It is a group Retail store that can be
owned by company and appoint a manager on behalf of company for operations of the stores.
For RELIANCE, it has RW(RELIANCE WORLD) stores having total reliance mobiles, net
setters and the products related to communication are available. The demo of the products
also available here. The sales, services, bill payments, solution for queries also considered. It
has a quite a good no of employees with a big no of products.

COFO

COFO Means Company Owned and Franchise Operated. It is a pure telecom services store. It
is owned by Company and operated by a franchisee. Company will give commission to that
franchisee. It is a tender based activity conducted by Company. For RELIANCE, it has
RMS(RELIANCE MOBILE STORE) having only teleservices of the company. It is used for
sale of handsets, e-recharges, customer service, bill payments..etc. It having 3-4 desks and
10-15 employees for providing services to customers. Here FOS (Foot On Sales) employees
are for the collection of bills and for new connections. Here CRE (Customer Relationship
Executive) is the head of the store. Generally franchisee will become CRE. Here range of the
products is limited.

FOFO

FOFO Means Franchisee Owned and Franchisee Operated. In any company it is owned by
Franchisee and the Recruiting employees, networks recharges are totally operated by
Franchisee only. So it does not have any direct relationship with the Company. Generally all
mobile shops are come into this category. They will purchase from company and sell it to
customers. So here the purchase of mobiles and e-recharges only available. It is under private
persons hands. Here only 1-2 desks are available. The limited services are available here.
Basically retailers will come into account.

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MOST IMPORTANT FOR RETAILER.
Which is the most important aspect for a Retailer from business point of view?

IMPORTANT FOR RETAILER FROM BUSINESS POINT OF VIEW

60

50

40

30

20

10

0
NTWRK/SRV, MRG&SCHM, DSTR SRVS, DSE & FOS,

From the survey an attempt was also made to find as to what is the most important for a
Retailer whether its the network or services of a service provider or the Retailers own margin
and scheme that he gets from a operator or whether its the efficient service of a distributor
which gives him an extra mile or it’s the efficiency in service of the DSE or FOS. But
analysing the chart we can find out that majority of the Retailers vetoed for NETWORK and
SERVICE of a service provider which got 51% , followed by RETAILERS MARGIN AND
SCHEME and SERVICES OF DSE AND FOS at 19% and lastly comes the DISTRIBUTOR
SERVICE at 11%. The reason behind such response is that majority of the Retailers feel that
if the network and service of a operator are perfect other things will follow themeselve. The
main aim behind framing such a question was to know as to what is the hidden impulse of
Retailers in general is, either it is only to earn profit or whether they have any concern for the
other allied services provided by a service provider. Getting responses of such questions
largely help marketers to get the pulse of the Retailers and help them in designing appropriate
strategies to provide utmost satisfaction to both Retailers and end consumers.

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AVERAGE AMOUNT SPENT IN A NEW CONNECTION

What is the average amount that is spent by a customer in getting a new connection and the
usual amount of first recharge? From the analysis of the data and response sheet it was found
that presently in Assam circle the average amount spent by a customer in getting a new
prepaid connection varies from Rs.49 to Rs.99. This is mainly because of the reason that
presently all the operators are floating nearly similar customer scheme whereby a new
prepaid connection is available at Rs.49 without any talk time and validity and Rs.99 new
prepaid rolling connection with inbuilt Rs.10 talk time. Some service providers are giving
additional benefits within the same retail price in order to lure customers with attractive
offerings. Now regarding the average amount of first recharge out of the 115 Retailers’
surveyed response could only be gathered from 79 Retailers and after the analysis it was
found out that the average amount of first recharge is Rs.60. This figure is only a indicative
one as amount of first recharge varies from operator to operator and any new scheme
prevailing at the time when the new connection is taken.

FACTS AND FIGURES RELATING TO HANDSETS

Which handset is mostly demanded by customer, the average amount a customer wants to
spend for it, the features normally a customer wants and which handset the Retailer push or
prefer selling the most? From the survey conducted and from the analysis of the response of
Retailers in the Excel sheet following information has been gathered:-
Type of handset mostly demanded by the customer-
• RELIANCE HANDSETS
Average amount customer wants to spend –
• Rs. 1739 (Rupees one thousand seven hundred and thirty nine)
Features normally customers asks for –
• FM and COLOUR DISPLAY
Handset Retailers push or prefer selling the most –
RELIANCE HANDSETS
The reason as to why Reliance handsets are mostly demanded by the customer is that are
handsets are very well priced and with the LG features. Customers are able to get handset
along with sim card only at Rs.699 and moreover because of the reason that Reliance
handsets are compatible with sim cards .The average amount that a customer wants to spend

36 | P a g e
for a handset came at around Rs. 1740(approx) and within this price range the features
generally asked by the customer is that the handset should have colour display and FM radio
reception. The reason as to why most Retailers prefer selling Vodafone handset is that it
comes with two years replacement warranty which gives both Retailers and the customers’
peace of mind. From the survey it has also been found out that mostly the old and the aged
customers gives a price range to the Retailers while purchasing a handset and are not too
much bothered about the brand as to whether its LG, Nokia or Haier. Whereas young
customers(i.e youth) generally prefer buying branded handsets, and are not too much
concerned about the price range.
MORE CUSTOMERS FOR THE GOOD BUSINESS.
How you acquire more customers and what additional help do you need from a service
provider to increase your business further?
From the survey it was found out that, Retailers in order to acquire more new customers
generally do the following :-
• At times even sell RCV at credit
• Provide free connection
• Float schemes by reducing own margin
• Use canopy in nearby offices, colleges and organisations.
• Appointing sales person and generating lead
• Provide free service like photocopying of documents etc for customer
• Provide SMS alert to selected customer
• Give free gits like Parker pen and T-shirts with postpaid connection and small gifts with
prepaid connection. And regarding help from a particular service provider to increase their
business further they generally want the operator to do the following:-
• Should come up with more attractive Retailers schemes
• Should give credit on RCV and Easy-Recharge
• Should appoint new Retailers at a fixed distance i.e there should be some amount of
minimum distance between two Retailers
• Provide glowsign at the Retailers point and decorate the shop with attractive advertisements
• Increase RCV margin
• More good schemes for customers, which will increase sales
• Fast processing(i.e verification, simdelivery & activation )
• Should upgrade profitable Retailers point as bill payment centre
• Efficient distributor service

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• Should keep handset stock with Retailers
• Timely availability of cards
• Efficient FOS/DSE service.

CURRENT UPDATES ON RETAIL INDUSTRY

(Last Updated: February 2010)

The Indian retail market, which is the fifth largest retail destination globally, has been ranked
as the most attractive emerging market for investment in the retail sector by AT Kearney's
eighth annual Global Retail Development Index (GRDI), in 2009. As per a study conducted
by the Indian Council for Research on International Economic Relations (ICRIER), the retail
sector is expected to contribute to 22 per cent of India's GDP by 2010.

With rising consumer demand and greater disposable income, the US$ 400 billion Indian
retail sector is clocking an annual growth rate of 30 per cent. It is projected to grow to US$
700 billion by 2010, according to a report by global consultancy Northbridge Capital. The
organised business is expected to be 20 per cent of the total market by then. In 2008, the
share of organised retail was 7.5 per cent or US$ 300 million of the total retail market.

A McKinsey report, 'The rise of Indian Consumer Market', estimates that the Indian
consumer market is likely to grow four times by 2025. Commercial real estate services
company, CB Richard Ellis' findings state that India's retail market has moved up to the 39th
most preferred retail destination in the world in 2009, up from 44 last year.

India continues to be among the most attractive countries for global retailers. Foreign direct
investment (FDI) inflows as on September 2009, in single-brand retail trading, stood at
approximately US$ 47.43 million, according to the Department of Industrial Policy and
Promotion (DIPP).

India's overall retail sector is expected to rise to US$ 833 billion by 2013 and to US$ 1.3
trillion by 2018, at a compound annual growth rate (CAGR) of 10 per cent. As a democratic
country with high growth rates, consumer spending has risen sharply as the youth population
(more than 33 percent of the country is below the age of 15) has seen a significant increase in
its disposable income. Consumer spending rose an impressive 75 per cent in the past four

38 | P a g e
years alone. Also, organised retail, which is pegged at around US$ 8.14 billion, is expected to
grow at a CAGR of 40 per cent to touch US$ 107 billion by 2013.

The organised retail sector, which currently accounts for around 5 per cent of the Indian retail
market, is all set to witness maximum number of large format malls and branded retail stores
in South India, followed by North, West and the East in the next two years. Tier II cities like
Noida, Amritsar, Kochi and Gurgaon, are emerging as the favoured destinations for the retail
sector with their huge growth potential.

Further, this sector is expected to invest around US$ 503.2 million in retail technology
service solutions in the current financial year. This could go further up to US$ 1.26 billion in
the next four to five years, at a CAGR of 40 per cent.

Moreover, many new apparel brands such as Zara, the fashion label owned by Inditex SA of
Spain, UK garment chain Topshop, the Marc Ecko clothing line promoted by the US
entrepreneur of the same name and the Japanese casual wear brand Uniqlo are preparing to
open outlets in India.

Buoyed by improved consumer spending, sales of listed retailers increased by 12 per cent in
the September 2009 quarter compared with the same period in 2008.

 Australia's Retail Food Group is planning to enter the Indian market in 2010. It has
ambitious investment plans which aim to clock revenue of US$ 87 million from the
country within five years from start of operations.
 British retail major Marks & Spencer (M&S) is looking at scaling up its India
operations and plans to open at least 50 more outlets in the country over the next few
years.
 Koutons Retail India plans to open 200 stores in FY11 in addition to its existing
1,400. Of the 200 stores, 100 would be family concept stores, which would include
women and children's wear.
 Reliance Footprint, part of Reliance Retail, plans to spend US$ 86.62 million to add
100 outlets across the country in two years to sell branded footwear. It currently has
16 outlets.
 Retail chain Suvidhaa Infoserve plans to open 1,000-1,200 new outlets every month
across the country and is eyeing a 100,000 strong network in the next two to three

39 | P a g e
 years. At present, the Mumbai-based firm has 18,000 convenient neighbourhood
stores called 'Suvidhaa Point' across the country in over 20 states and over 400 cities.
 Lifestyle International, part of the Dubai-based US$ 1.5 billion Landmark Group,
plans to have over 50 stores across India by 2012–13. These will include 35 Lifestyle
stores for retailing apparel, cosmetics and footwear, besides 15 Home Centres that sell
home furnishing goods.
 Watch maker, Timex India, is looking at increasing its presence in the country by
adding another 52 stores by March 2011 at an investment of US$ 1.3 million taking
its total store count to 120.
 Wills Lifestyle plans to expand its operations by opening 100 new stores in the next
three years. It also plans to concentrate on online buyers.
 Pantaloon Retail India (PRIL) is planning to invest US$ 77.88 million this fiscal to
add up to 2.4 million sq ft retail space at its existing operations. Pantaloon Retail is
also looking to hive off its value retail chain, Big Bazaar, into a separate subsidiary,
which may eventually go for an initial public offer (IPO). PRIL proposes to open 155
Big Bazaar stores by 2014, increasing its total network to 275 stores.

Policy Initiatives

 100 per cent FDI is allowed in cash-and-carry wholesale formats. Franchisee

arrangements are also permitted in retail trade.
 51 per cent FDI is allowed in single-brand retailing.

Road Ahead

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According to industry experts, the next phase of growth is expected to come from rural
markets.

According to a new market research report by RNCOS titled, 'Booming Retail Sector in
India', organised retail market in India is expected to reach US$ 50 billion by 2011.

 Number of shopping malls is expected to increase at a CAGR of more than 18.9 per
cent from 2007 to 2015.
 Rural market is projected to dominate the retail industry landscape in India by 2012
with total market share of above 50 per cent.
 Organised retailing of mobile handset and accessories is expected to reach close to
US$ 990 million by 2010.
 Driven by the expanding retail market, the third party logistics market is forecasted to
reach US$ 20 billion by 2011.

INDIAN TELECOM INDUSTRY

At 306.45 million connections Indian Telecom Industry till May 09, is the 3rd largest and
fastest growing in the world. The subscriber base has grown by 40% annually and is expected
to reach 250 million in 2007. Over the last 3 years, two out of every three new telephone
connections were wireless. Consequently, wireless now accounts for 54.6% of the total
telephone subscriber base, as compared to only 40% in 2003. Wireless subscriber growth is
expected to grow at 2.5 million new subscribers every month in 2007. The wireless
subscriber base skyrocketed from 33.69 million in 2004 to 62.57 million in FY 2004 -2005.
The wireless technologies currently in use Indian Telecom Industry 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 telecommunication
circles and 4 metro cities, covering more than 2000 towns across the country. And the
numbers are still growing for Indian Telecom Industry is regulated by 'Telecom Regulatory
Authority of India' (TRAI). It has earned good reputation for transparency and competence.
Three types of players exist in ' Indian Telecom Industry community.
• State owned companies like - BSNL and MTNL.
• Private Indian owned companies like - Reliance Infocomm and Tata Teleservices.
• Foreign invested companies like – Vodafone-Essar, Bharti Tele-Ventures, Idea Cellular,
BPL Mobile, Spice Communications etc.

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The Indian Telecom Industry services are not confined to basic telephone but it also extends
to internet, broadband (both wireless and fixed), cable TV, SMS, IPTV, soft switches etc. The
bottlenecks for Indian Telecom Industry are: Slow reform Process. Low-penetration. Service
provider’s bears huge initial cost to make inroads and achieving break-even is difficult. Huge
initial investments Limited spectrum availability and interconnection charges between the
private and state operators.

KEY PLAYERS IN INDIAN TELECOM INDUSTRY

The telecom industry of India has registered manifold growth in the recent years.
Personalized telecom access is essential necessity of life for increasing number of the people.
The sector offers unlimited prospects when we consider future growth. Both Public Players
and Private Players are enhancing their technologies and taking the telecom industry to a
much higher growth state. Not only service providers but also handset manufacturers are
contributing significantly to the industry and economy of India.
The top players in the industry are:
1) Reliance Communications Limited
2) Bharti Airtel Limited
3) BSNL
4) AIRCEL
5) Vodafone Essar
6) Idea Cellular Limited
7) Tata Teleservices

SCOPE OF TELECOM INDUSTRY

The telecom industry is growing at a great pace and the growth rate is expected to double
with every passing year. There are many new developments in the telecomm sector,
including the ingress of 3G technology that the Indian market is witnessing at present.

Public and Private Players

MTNL, BSNL, VSNL are the major Public Players, whereas Airtel, Idea, Hutch, Tata,
Reliance, BPL are the leading Private Players in the country. Some of them are entering
foreign markets as well. The Bharti Telecom will be launching its services for the NRIs in
the US with the help of Airtel CALLHOME service.

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The market shares of the leading public and Private Players

INVESTMENT AND GROWTH

In 2005-2006, the telecom industry witnessed a growth of 21% with a total revenue of
Rs.86,720 crores, and the total investment rising to Rs. 2,00,660 crores. It is projected that
the telecom industry will be enjoying over 150% growth in the next 4-6 years. The growth
also requires a 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. 

The telecom sector in the country has already adopted the latest technological advancements
to cater to the demands of the growing market. Telecom Expo India, Convergence India,
VAS India and IPTV India being organized year to year are all efforts in this direction. 

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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.
Also, the telecom industry this year will be focusing more on rural
areas to connect them with the urban areas so that the farmers and the small-scale industries
can have faster access to information related to weather and market conditions. 

EMPLOYMENT STATUS

With the coming of more and more projects, the telecom industry is going for high scale
recruitments. There is a huge demand for software engineers, mobile analysts, and hardware
engineers for mobile handsets. Besides, there are ample opportunities for marketing people
whose services are required to capture more and more customer base. The new projects,
setting up of new service bases, expansion of coverage areas, network installations,
maintenance, etc are providing more and more employment opportunities in the telecom
sector. 

REPORT ON INDIA'S MOBILE TELECOM SERVICES BUSINESS

India's mobile telecom sector is one of the fastest growing sectors. Unlike in the 1990s when
the mobile phone was an elitist product, mobile operators now tap a mass market with mass
marketing techniques. "Unified licensing" rules allow basic and mobile operators into each
other's territory, and have ushered in perhaps the final phase of industry consolidation. It
seems that only companies with deep pockets can effectively compete as primary operators
mobile markets. Economies of scale, scope, and end-to-end presence in long-distance as well
as local telecom, are desirable. There are, besides, new challenges. Operators are having to
find new growth drivers for the wire line business. There are problems of getting broadband
to take off, of technology choice, of when to introduce new technologies, and of developing a
viable business model in an era of convergence. This report analyses the changing features,
opportunities and challenges facing the basic and mobile telecom services business. It covers

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the regulatory environment, markets, new services and revenue sources, tariff structures,
economics of the industry, investment and technology issues, and the current and emerging
competitive environment.

GROWTH OF MOBILE TECHNOLOGY

India has become one of the fastest growing mobile markets in the world. The mobile
services were commercially launched in August 1995 in India. In the initial 5-6 years the
average monthly subscribers additions were around 0.05 to 0.1 million only and the total
mobile subscribers base in December 2002 stood at 10.5 millions. However, after the number
of proactive initiatives taken by regulator and licensor, the monthly mobile subscriber
additions increased to around 2 million per month in the year 2003-04 and 2004-05.Although
mobile telephones followed the New Telecom Policy 1994, growth was tardy in the early
years because of the high price of hand sets as well as the high tariff structure of mobile
telephones. The New Telecom Policy in 1999, the industry heralded several pro consumer
initiatives. Mobile subscriber additions started picking up. The number of mobile phones
added throughout the country in 2003 was 16 million, followed by 22 millions in 2004, 32
million in 2005 and 65 million in 2006. The only countries with more mobile phones than
India with 156.31 million mobile phones are China 408 million and USA 170 million.India
has opted for the use of both the GSM (global system for mobile communications) and
CDMA (code-division multiple access) technologies in the mobile sector. The mobile tariffs
in India have also become lowest in the world. A new mobile connection can be activated
with a monthly commitment of US$ 5 only. In 2005 alone 32 million handsets were sold in
India. The data reveals the real potential for growth of the Indian mobile market.

NEXT GENERATION NETWORKS

In the Next Generation Networks, multiple access networks can connect customers to a core
network based on IP(internet protocol) technology. These access networks include fibre
optics or coaxial cable networks connected to fixed locations or customers connected through
wi-fi as well as to 3G networks connected to mobile users. As a result, in the future, it would
be impossible to identify whether the next generation network is a fixed or mobile network
and the broadband wireless access would be used both for fixed and mobile services. It would
then be futile to differentiate between fixed and mobile networks – both fixed and mobile
users will access services through a single core network. Indian telecom networks are not so
intensive as developed country’s telecom networks and India's teledensity is low only in rural

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areas. 670,000 route kilometers of optical fibres has been laid in India by the major operators,
even in remote areas and the process continues. A rural network based on the extensive
optical fibre network, using Internet Protocol and offering a variety of services and the
availability of open platforms for service development, viz. the Next Generation Network,
appears to be an attractive proposition. Fibre network can be easily converted to Next
Generation network and then used for delivering multiple services at cheap cost.

CELLULAR SERVICE PROVIDERS

As on Apr 2007 India has 167 million mobile phone subscribers. Out of this 125 million are
GSM users and 41 million CDMA users. BSNL, Bharti Airtel, Hutch, Idea, Aircel, Spice and
MTL are the main GSM providers in India. Reliance Communications and Tata Indicom are
the main CDMA providers in India.

Bharti Airtel

Airtel is providing cellular services in Delhi, Mumbai, Kolkata, Chennai, Andhra Pradesh,
Gujarat, Haryana, Himachal Pradesh, Jammu and Kashmir, Karnataka, Kerala, Madhya
Pradesh, Maharashtra, Goa, Orissa, Punjab, Rajasthan, Tamil Nadu, UP and West Bengal.
Airtel is the No.1 cellular service provider in India using GSM technology. Airtel has 23%
market share in India with a total subscriber base of 38 million.

Reliance Communications

Reliance has both CDMA and GSM networks and total subscriber base of 29 million or 17%
market share. It has GSM network in Assam, Bihar, Himachal Pradesh, Kolkata, North East,
Madhya Pradesh, Orissa and West Bengal. Reliance has CDMA networks in other states and
cities.

Bharat Sanchar Nigam Limited (BSNL)

BSNL is a state owned telecom company which has GSM presence in almost every cities and
towns. BSNL has 27 million subscribers with a market share of 16%.

Hutch(Vodafone)

Hutch is another emerging GSM provider in India with coverage in Kerala, Mumbai, Delhi,
Kolkata, Chennai, Gujarat, Andhra Pradesh, Karnataka and Punjab with a total subscriber
base of 27 million.

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Tata Indicom

Tata Indicom is a main CDMA provider in India with 16 million subscribers all over India.
Tata Indicom has presence in almost every states and cities in India.

TECHNOLOGY

GSM vs. CDMA

GSM and CDMA are the two main competing network technologies deployed by cellular
service providers world over. Understanding the pros and cons of both the technologies will
help you make right decision according to your requirement. GSM (Global System for
Mobile Communications) originated in Europe in 1990. The GSM Association is an
international organization founded in 1987, dedicated to developing, providing and
overseeing the worldwide wireless standard of GSM. While CDMA (Code Division Multiple
Access) is a proprietary standard designed by Qualcomm Inc in United States and has been
the dominant network standard for North America and parts of Asia. It became an
international standard in 1995.However now, GSM networks have penetrated the United
States and the CDMA networks have spread in other parts of the world. People of both the
camps claim that their architecture is superior to the other.

The Technology:

Mobile personal communication systems use microwave frequencies above 800 MHz for
transmission and reception. All service providers operate in some pre allocated frequency
bands according to international standards. For operating in these microwave frequencies
there are following access methods:

 FDMA (Frequency Division Multiple Access) - FDMA puts each call on a separate
frequency.
 TDMA (Time Division Multiple Access) - TDMA assigns each call a certain portion
of time on a designated frequency.
 CDMA ( Code Division Multiple Access) - CDMA gives a unique code to each call
and spears it over available frequencies.
 GSM is a global standard based on TDMA. It is very popular in entire Europe, Middle
East and Asia while CDMA is the dominant technology in United States and some

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 parts of Asia. But how does it effects the ultimate consumer ? For understanding
further considerations may be helpful.

GSM vs CDMA

GSM

1.In case of GSM you can choose a handset seperately from a wide variety available in the
market. It should be GSM 900/1800 compatible for use in India.Then buy a pre-paid or post-
paid SIM card (Subscriber Identity Module that contains user account information) from any
of the GSM Service Providers like Airtel, Hutch, Idea, MTNL, BSNL, Aircel, Spice etc. Just
insert this SIM into your handset and start talking.

2. A very large range of handsets to choose from as the big handset companies like Nokia,
Motorola, SonyEricsson, LG, Samsung etc. are marketing their products through independent
distribution and retail network.

3. You can easily change the service provider and continue with the same handset

4.In GSM different frequencies are used across different cells but that does not mean that
voice clarity is necessarily compromised. Actually it depends upon the location and network
traffic too.

5. EDGE (Enhanced Data Rates for GSM Evolution) enabled GSM networks are comparable
in terms of download speed. Please note an EDGE enabled handset is also

6. GSM service providers are better networked globally to offer international roaming. But
you must check for roaming call rates and coverage in the regions or countries where you
visit frequently.

7. If you travel to other countries you can even use your same GSM cell phone abroad if it is
a quad-band phone (850/900/1800/1900 MHz). By purchasing a local SIM card with call
value and a local number in the country you are visiting, you can make calls against the card
to save yourself international roaming charges from your home service provider.

CDMA

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1. Handset is network locked. You buy a package from the Service Provider like Reliance or
Tata Indicom that includes a handset and a pre-paid or post-paid plan.Earlier it was difficult
to change the handset and keep the same number but now to change a Reliance handset in
future, you just need a handset change card costing a nominal amount.T-SIM enabled
handsets of Tata Indicom can be changed easily

2. Choice of handsets is limited to the models offered by the Service Provider. Although both
Reliance and Tata have now a range of entry level, mid-segment and features rich advance
handsets available with them.

3. You can't change service provider and continue with the same handset. It could be
technically possible but not easy.

4.Voice clarity is supposed to be better in CDMA network as it uses same frequency across
all cells.

5. Data Transfer Speed is traditionally more in case of CDMA. BREW(Binary Runtime

Environment for Wireless) technology which is exclusive to CDMA networks enables faster
data downloads.

6. Check for International roaming tie ups if you travel abroad frequently. Also check for the
coverage in the region where you intend to use your cellphone within India. Tata is soon
launching T-SIM to enable international roaming with one world one number concept.

7. CDMA phones that are not card-enabled do not have this capability.Also you must
consider the following while selecting a Service Provider:

 First of all you must check which Service Providers are providing services in the
areas where you will be using your phone
 If you want National or International Roaming then also check whether the Service
Provider you have chosen facilitates roaming in the regions or countries where you
visit frequently.
 Cost of owning a handset
 Cost of having a connection
 Fixed monthly expenses
 Usage charges.

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  Also it is helpful to check with the people using mobile in your area for the quality
of service.

TELECOM REGULATORY AUTHORITY OF INDIA

TRAI AND ITS ROLE.
The Telecommunications Regulatory Authority of India or TRAI (established 1997) is the
independent regulator established by the Government of India to regulate the
telecommunications business in India.
Responsibilities
Notwithstanding anything contained in the Indian Telegraph Act, 1885, the functions of the
Authority shall be to:
1. make recommendations, either suo motu or on a request from the licensor, on the following
matters, namely:
i. need and timing for introduction of new service provider;
ii. terms and conditions of license to a service provider;
iii. revocation of license for non-compliance for terms and conditions of license:
iv. Measures to facilitate competition and promote efficiency in the operation of
telecommunication services so as to facilitate growth in such services.
v. Technological improvements in the services provided by the service providers.
vi. type of equipment to be used by the service providers after inspection of equipment used
in the network.
vii. measures for the development of telecommunication technology and any other matter
relatable to telecommunication industry in general;
viii. efficient management of available spectrum
2. Discharge the following functions, namely:
i. Ensure compliance of terms and conditions of license;
ii. Notwithstanding anything contained in the terms and conditions of the license granted
before the commencement of the Telecom Regulatory Authority (Amendment)
Ordinance,2000, fix the terms and conditions of inter-connectivity between the service
providers;
iii. Ensure technical compatibility and effective inter-connection between different service
providers.
iv. Regulate arrangement amongst service providers of sharing their revenue derived from
providing telecommunication services;

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v. Lay down the standards of quality of service to be provided by the service providers and
ensure the quality of service and conduct the periodical survey of such service provided by
the service providers so as to protect interest of the consumers of telecommunication
services;
vi. Lay down and ensure the time period for providing local and long distance circuits of
telecommunication between different service providers;
vii. Maintain register of interconnect agreements and of all such other matters as may be
provided in the regulations;
viii. Keep register maintained under clause (viii) open for inspection to any member of public
on payment of such fee and compliance of such other requirement as may be provided in the
regulations;
ix. Ensure effective compliance of universal service obligations:
3. Levy fees and other charges at such rates and in respect of such services as may be
determined by regulations.
4. Perform such other functions including such administrative and financial functions as may
be entrusted to it by the Central Government or as may be necessary to carry out the
provisions of this Act:
 Provided that the recommendations of the Authority specified in the clause (a) of this
sub-section shall not be binding upon the Central Government
 Provided further that the Central Government shall seek the recommendations of the
Authority in respect of matters specified in sub-clauses (i) and (ii) of clause (a) of this
sub-section in respect of new license to be issued to a service provider and the
Authority shall forward its recommendations within a period of sixty days from the
date on which that Government sought the recommendations:
 Provided also that the Authority may request the Central Government to furnish such
information or documents as may be necessary for the purpose of making
recommendations under subclauses (i) and (ii) of clause (a) of this sub-section and
that Government shall supply such information within a period of seven days from
receipt of such request:
 Provided also that the Central Government may issue a license to a service provider
if no recommendations are received from the Authority within the period of specified
in the second provision or within such period as may be mutually agreed upon
between the Central Government and the Authority.

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  Provided also that if the Central Government having considered that recommendation
of the Authority comes to a prima facie conclusion that such recommendation cannot
be accepted or needs modifications, it shall, refer the recommendations back to the
Authority for its reconsideration, and the Authority may within fifteen days from the
date of receipt of such reference, forward to the Central Government its
recommendation after considering the reference made by the Government. After
receipt of further recommendation, if any, the Central Government shall take a final
decision.
NEW TELECOM POLICY-1999
Availability of affordable and effective communications for the citizens.
 To achieve a teledensity of 7 by the year 2005 and 15 by the year 2010
 To improve rural teledensity from the level of 0.4 to 4 by the year 2010.
 Create a modern, efficient and world class Telecommunications infrastructure taking
into account the convergence of IT, Media, Telecom and Consumer Electronics.
 Convert Public Call Offices (PCO’s) into Public Tele-info Centers having multi-
media capability like ISDN Services, Remote Database Access, Government and
Community Information Systems etc.
 Transform in a time-bound manner, the Telecommunications Sector to a greater
competitive environment in both urban and rural areas providing equal opportunities
and level playing field for all players.
 Strengthen Research and Development efforts in the country and provide an Impetus
to build world class manufacturing capabilities.
 Protect Defence and Security interest of the country.
 Enable Indian Telecom Companies to become truly Global Players.
 This Policy frame work focuses on creating an environment, which enables continued
attraction of investment in the sector and allows creation of Telecommunications
infrastructure by leveraging on Technological developments.
 The New Telecom Policy frame work looks at the Telecom Service Sector as follows:
 Cellular Mobile Service Providers, Fixed Service Providers and Cable
Service Providers, collectively referred to as ‘Access Providers’.
 Radio Paging Service Providers.
 Public Mobile Radio Trunking Service Providers.
 National Long Distance Operators.
 International Long Distance Operators.

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  Global Mobile Personal Communication by Satellite (GMPCS) Service
Providers.
 VSAT Based Service Providers.
 Other Service Providers.

DISPUTE RESOLUTION IN TELECOM SECTOR

i. With a view to provide a level playing field in a competitive environment, the
Government of India in 1997 established a statutory and autonomous regulator viz.,
The Telecom Regulatory Authority of India (TRAI) under the TRAI Act 1997.
ii. With a view to further strengthen the regulator the TRAI Act, 1997 was amended in
the year 2000 and a separate body viz., The Telecom Dispute Settlement and
Appellate Tribunal (TDSAT) was constituted for resolution of disputes in Telecom
Sector.

FUNCTIONS OF TDSAT
1. The TDSAT is Empowered to adjudicate any dispute between:
 Licensor and a Licensee.
 two or more Service Providers.
 a Service Provider and a Group of Consumers.
2. The Appellate Tribunal shall be guided by the Principles of natural justice and have powers
to regulate its own procedure.

3.The Appellate Tribunal has the same powers as are vested in a Civil Court, while trying a
Suit, in respect of following matters, viz.,
 Summoning and enforcing the attendance of any person and examining him on oath.
 Requiring the discovery and production of documents.
 Receiving evidence on Affidavits
 Requisitioning any public record or document or a copy of such record or document
from any office.
 Issuing commissions for the examination of the witnesses or documents.
 Reviewing its decisions.
 Dismissing an application for default or deciding it, ex-parte.

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  Setting aside any order of dismissal of any application for default or any order passed
by it, ex-parte, and Any other matter which may be prescribed.
Not withstanding anything contained in the Code of Civil Procedure, or any other Law, an
Appeal shall lie against any Order, not being an Interlocutory Order, of the Appellate
Tribunal to the Supreme Court of India on one or more of the grounds specified in Section
100 of that Code. The Appellate Tribunal consists of a Chair-Person and two Members
appointed by the Central Government.The Selection of Chair-Person and Members of the
Appellate Tribunal is made by the Central Government in consultation with the Chief Justice
of India.

TELECOM BUSINESS

48 lakhs Bharti Airtel has the largest customer base with 31% market share, followed by
Hutch and BSNL with each holding 22% market share.The 2007 budget has brought further
relief to the customers with the reduction in the tariffs, both local and long distance, and with
slashing down the roaming rentals. This is likely to lead to even more people going for
cellular services and more and more use of the value added services. However, landline
telephony is likely to remain popular, too, in the foreseeable future. MTNL, the largest
landline service provider, has recently taken some bold initiatives to retain its market share
and, if possible, expand it.

REVENUE AND GROWTH

The total revenue in the telecom service sector was Rs.86,720 crore in 2005-06 as against
Rs.71,674 crore in 2004-2005, registering a growth of 21%. The total investment in the
telecom services sector reached Rs.200,660 crore in 2005-06, up from Rs.178,831 crore in
the previous fiscal. Telecommunication is the lifeline of the rapidly growing Information
Technology industry. Internet subscriber base has risen to 6.94 million in 2005- 2006. Out of
this 1.35 million were broadband connections. More than a billion people use the internet
globally. The value added services (VAS) market within the mobile industry in India has the
potential to grow from $500 million in 2006 to a whopping $10 billion by 2009 (Music,
games to drive mobile VAS growth)

Finally, India is huge market and none of service providers can dare to ignore its potential.
That’s why Indian mobile service provider industry is growing leap and bounce for the last

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decade. This journery of 1 million to 50 million will keep it pace until each citizen in india
will have his own mobile. Industry has many phases in its growth. Now mobile doesn’t mean
a only a medium of communication. Services providers are now willing to provide varies
facilities like entertailment (music, video etc.) and even banking also. We can say that
business is transforming in e-commerce to m-commerce (mobile-commerce). In short we can
say drastic change has came in the industry along with expanding its base in subscribers, they
are keeping eye not only to offer new facilities but also to be the first to provide it.

CURRENT UPDATES ON TELECOMMUNICATIONS INDUSTRY

IBEF: February 15, 2010

 
The Indian telecommunications industry is one of the fastest growing in the world and India
is projected to become the second largest telecom market globally.

According to the Telecom Regulatory Authority of India (TRAI), the number of telecom
subscribers in the country increased to 562.21 million in December 2009, an increase of 3.5
per cent from 543.20 million in November 2009. With this the overall teledensity (telephones
per 100 people) has touched 47.89.

The telecom industry notched up US$ 8.56 billion in revenues during the quarter ended
December 31, 2009 helped by a recovery in earnings from both mobile and landline services.

According to Business Monitor International, India is currently adding 8-10 million mobile
subscribers every month. It is estimated that by mid 2012, around half the country's
population will own a mobile phone. This would translate into 612 million mobile
subscribers, accounting for a tele-density of around 51 per cent by 2012.

Moreover, according to a study conducted by Nokia, the communications sector is expected

to emerge as the single largest component of the country's GDP with 15.4 per cent by 2014.

The Indian equipment market was estimated at US$ 24 billion in FY09. Finnish giant Nokia
is the market leader, with over US$ 3.4 billion revenues in 2008-09, followed by Ericsson at
US$ 2.11 billion.

With the availability of the 3G spectrum, about 275 million Indian subscribers will use 3G-
enabled services, and the number of 3G-enabled handsets will reach close to 395 million by

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2013-end, estimates the latest report by Evalueserve.

According to a Frost & Sullivan industry analyst, by 2012, fixed line revenues are expected
to touch US$ 12.2 billion while mobile revenues will reach US$ 39.8 billion in India.

Moreover, in an attempt to boost auction of 3G spectrum, the government has allowed

prospective bidders to raise short-term funds from domestic market, which could be
refinanced through external commercial borrowings (ECBs) within 12 months. The
government is expected to mop up US$ 7.53 billion through the auction of 3G spectrum,
which is likely to be completed by March 2010. It has fixed the reserve price at US$ 753.74
million.

State-run telecom operator BSNL has rolled out 3G services in 318 cities with 856,000
subscribers. BSNL has plans to cross 400 cities by March 31, 2010 and this will be increased
to 760 cities by September 2010. And even as debate on 3G continues, TRAI has started
consultation on the next level of telecom services. Fourth generation or 4G offers download
at faster speeds.

VALUE-ADDED SERVICES MARKET

Currently, mobile value-added services (MVAS) in India accounts for 10 per cent of the
operator's revenue, which is expected to reach 18 per cent by 2010. According to a study by
Stanford University and consulting firm BDA, the Indian MVAS is poised to touch US$ 2.74
billion by 2010.

In a bid to increase revenue from add-on services, India's top two mobile firms, Bharti Airtel
Limited and Reliance Communications both plan to launch online mobile applications stores.

Bharti Airtel will provide more than 1,250 applications across 25 categories including games,
books and social networking on its applications store.

Reliance Communications’ first version of its applications store would go live for GSM
customers by the end of February 2010, and by the end of March 2010 an expanded version
would be available to its code division multiple access (CDMA) customers as well.

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MAJOR INVESTMENTS

The booming domestic telecom market has been attracting huge amounts of investment
which is likely to accelerate with the entry of new players and launch of new services.

 Norway-based telecom operator Telenor, has bought a further 7 per cent in Unitech
Wireless for a little over US$ 430.70 million. Telenor now holds 67.25 per cent. Last
year, it had bought a 60 per cent stake for US$ 1.23 billion.
 The government has approved the foreign direct investment proposal of the Federal
Agency for State Property Management of the Russian Federation to buy 20 per cent
stake in telecom service provider Sistema-Shyam for US$ 660.1 million.
 Tata Teleservices is planning to invest an additional US$ 1 billion in its recently-
launched GSM service Tata DoCoMo. It had already committed an investment of
US$ 2 billion for the GSM services when it was launched in June 2009.
 Reliance Infratel, the tower subsidiary of Reliance Communications (RCom), will
build 56,596 telecom towers by financial year 2010, increasing the total number of
towers to 100,000.
 BSNL, India's leading telecom company in revenue terms, will put in about US$ 1.16
billion in its WiMax project.
 Vodafone Essar will invest US$ 6 billion over the next three years in a bid to increase
its mobile subscriber base from 40 million at present to over 100 million.

MANUFACTURING

India's telecom equipment manufacturing sector is set to become one of the largest globally.
Mobile phone production is estimated to grow at a CAGR of 28.3 per cent from 2006 to2011,
totalling 107 million handsets by 2010. Revenues are estimated to grow at a CAGR of 26.6
per cent from 2006 to 2011, touching US$ 13.6 billion.

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RURAL TELEPHONY

Rural India had 76.65 million fixed and Wireless in Local Loop (WLL) connections and
551,064 Village Public Telephones (VPT) as on September 2008. Therefore, 92 per cent of
the villages in India have been covered by the VPTs. Universal Service Obligation (USO)
subsidy support scheme is also being used for sharing wireless infrastructure in rural areas
with around 18,000 towers by 2010.

POLICY INITIATIVES

The government has taken many proactive initiatives to facilitate the rapid growth of the
Indian telecom industry.

 100 per cent foreign direct investment (FDI) is permitted through the automatic route
in telecom equipment manufacturing.
 FDI ceiling in telecom services has been raised to 74 per cent.
 Introduction of a unified access licensing regime for telecom services on a pan-India
basis.
 Introduction of mobile number portability in a phased manner, starting in the fourth
quarter of 2008.
 The government is implementing a program of connecting 66,822 uncovered villages
under the Bharat Nirman programme.
 The Department of Telecommunications (DoT) has stated that foreign telecom
companies can bid for 3G spectrum without partnering with Indian companies. Only
after winning a bid, would they need to apply for unified access service licence
(UASL) and partner with an Indian company in accordance with the FDI regulations.

THE ROAD AHEAD

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The target for the 11th Plan period (2007-12) is 600 million phone connections with an
investment of US$ 73 billion. Apart from the basic telephone service, there is an enormous
potential for various value-added services.

According to the CII Ernst & Young report titled 'India 2012: Telecom growth continues',
revenue from India's telecom services industry is projected to reach US$ 54 billion in 2012,
as against US$ 31 billion in 2008.

TELECOM RETAIL IN INDIA

India has a promising future in telecom retail, with a large base of mobile subscribers, which
is increasing by the day.   There are many big international and domestic companies dealing
in the telecom sector on the manufacturing and the operating front, but there still is a big void
with a dire need for players in the telecom retail market in India. It is high time for telecom
retailers, especially the domestic retailers, to make their foray into this flourishing sector.
Telecom retailers are coming up with innovative outlets and stores, which serve as a one stop
shop for all mobile needs and solutions. Generally, a complete telecom solution provider
have avenues for customers to buy or repair products, value added services like ringtones,
and a host of media related services like DTH connections, ipods, cameras, games etc.
With many corporate giants venturing into this highly competitive market, the
mobile retailing sector is literally exploding in India. Mobile NXT, based in Bangalore, set
the precedent, making it the first company to enter the telecom retail space without any
background in the retail industry.  Pantaloon retail is another early player with a thriving
mobile retail business, popularly known as ConvergeM, with its three-pronged strategy –
(1) M Bazaar (Shop in shop with Big Bazaar stores),
(2) M Port (independent brand stores) and
(3) Gen M (kiosks in malls, multiplexes catering to impulse buying).
These outlets sell mobile handsets, accessories and refurbish used mobiles too. Essar
Telecom Retail too has its foothold in the Indian mobile retailing market with the launch of
its hallmark "The MobileStore" outlets (total telecom solution provider) across the country.  
Entry of international media brands like Virgin in India’s burgeoning mobile market has
completely changed the face of mobile retailing. ITC Limited’s eChoupal for rural mobile
marketing and DCM Shriram’s Hariyali Kissan Bazaar targeting the rural Indian consumer
are some of the companies waiting to have a slice of the Indian mobile retail market.

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Sooner or later, the telecom/mobile retailing is poised to attain the top spot as the single
largest electronic product, retailed in the country. With prices dropping at regular rates, and
competitions coming from across the board, mobile retailers need to position themselves with
a thorough knowledge and expertise of telecom retail in the organized retail market, to stay
ahead in the rat race. Telecom retail outlets should have facilities for buying mobile handsets,
connections, recharge vouchers, accessories, after sales services, bill payment, gaming,
mobile entertainment options, repairs and refurbishment, all under a single roof.

SCOPE OF THE STUDY

The scope of the study is limited to the post paid services offered by Reliance
Communication and other Network stores. Study objective is to examine the comparison of
various factors which influencing the customers of the selected 6 networks stores. The study
considered the areas of Hyderabad city. The sample under consideration consisted of the
stores of Reliance Communications and Other Competitor stores.

SIGNIFICANCE OF THE STUDY

This was a study on customer awareness and satisfaction for Reliance post paid products. The
title is very much significant considering the present global scenario. The awareness level is
the basic requirement for a company to sell its products in the market because if the
customers are not aware of the products, there would be no sale. Along with the awareness,
the companies have to keep a regular check on the satisfaction level of its customers to retain
them. The survey helps to find out the loopholes is the area of service being offered by the
company. Identifying those areas would help the company to minimize them and then they
can go for increasing customers.

OBJECTIVES OF THE STUDY

The following are the objectives of the study.

1. To study the problems faced by the respondents with Reliance Postpaid service.

2. To study customer satisfaction level on Reliance services.

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3. To find out consumer preferences compared with other networks.

4. To analyse the store characteristics compared to other stores.

5. To make suggestions in the light of the findings of the study.

METHODOLOGY

RESEARCH DESIGN:

The Research was conducted on the Retail stores located in Hyderabad. Out of all Retail
stores only 10 areas were taken for the study. So 10 areas,6 networks 60 as the sample size,
which are having largest walk in customers. The study contains mainly 4 categories like
Basic Infrastructure, Man Power Related, Process Related and Product Related. The sub
categories were taken and observed carefully. As per the observation, percentages were

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given. Through the observation, the analysis of the total categories and done comparative
analysis. Bar graphs were drawn for easy understanding.

SAMPLE DESIGN:

Sample Size: 60 stores

DATA COLLECTION:

The primary data was collected from the employees and Manager of the Reliance and Other
selected network stores.

The Secondary Data was collected from the Authorised Government Websites, Books,
Articles of Famous Authors, magazines, project report and newspapers.

ANALYSIS AND INTERPRETATION

The data totally belongs to the various networks mobile stores only. So the analysis about the
4 main categories is interpreted below.

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 BASIC INFRASTRUCTURE

Basic Infrastructure Weightag Airtel Relianc Idea Vodafon Aircel Docom

e e e o
No. of Desks 10 8 10 6 8 6 6
No. of Computers 10 8 4 6 10 4 6
Printer/credit card/power back 10 10 8 8 6 6 6
up
Singage board,Placcards 15 12 14 10 10 10 10
Feedback,Cheque drop boxes 15 10 12 10 10 10 10
Communication channels 20 15 10 15 15 20 20
(door
pull/push,posters,brochures)
Experience zone 20 15 20 10 15 15 10
(dummy,demo handsets,forms)
Total score 100 78 78 65 74 71 68

80

75

70

65

ANALYSIS:
60
From the above
55 data we can easily
Airtel Reliance Idea Vodafone Aircel Docomo
find out that
AIRTEL and
RELIANCE stores has good Infrastructure facilities with the score of 78. IDEA has least
Infrastructure facilities with score of 65. VODAFONE and AIRCEL has quite a good number
of systems, but usage of computers is low. DOCOMO has lower number of computers, but
the number of desks is equal to no of computers. So IDEA and VODAFONE must have to
increase their infrastructure facilities.

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 MAN POWER RELATED

Man power Related Weightag Airte Relianc Idea Vodafon Airce Docom
e l e e l o
Uniform 20 20 15 15 15 10 15
(T-shirt,Trouser,belt,badge)
Grooming 10 10 6 6 6 9 9
(Hair style,proper shave,ironed
dress)
Body Language & Mannerism 20 20 15 20 15 15 15
Customer Handling 30 20 20 30 20 20 20
Store Hygiene 20 15 15 10 15 20 20
(Cleaning,temp,light,painted)
Total score 100 85 71 81 71 74 79

90

85

80

75

70

65

60
Airtel Reliance Idea Vodafone Aircel Docomo

ANALYSIS:

From the above bar chart, we can analyse that AIRTEL has good Man power related work
with a high score of 85. Employees Uniform, hair style, Body Language and handling of
customers is very good in AIRTEL and not upto the mark in RELIANCE and VODAFONE
when compared to other stores. IDEA has done good work in this category. AIRCEL and
DOCOMO has satisfactory levels of dressing sense of Employees. So as per observation, the
Handling of customers in RELIANCE stores has to be improved.

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PROCESS RELATED

Process Related Weightag Airte Relianc Idea Vodafon Airce Docom

e l e e l o
Purchase of the new 30 25 20 25 20 25 25
connection
bill payments 20 20 15 15 15 20 15
E Recharge 10 10 8 8 6 8 6
Services 10 10 8 8 6 6 8
Activation/deactivation
Network/handset issues 10 8 6 10 6 8 8
General enquiry 20 8 8 8 6 10 8
Total score 100 81 65 74 59 77 70

90

80

70
60

50

40

30

20
10
0
Airtel Reliance Idea Vodafone Aircel Docomo

ANALYSIS:

From the above observed data, we can say that AIRTEL has easy process for new customer,
who is willing to take new connection with a high score of 81. RELIANCE has typical
process for taking a postpaid connection. So customer does not show the interest to take new
connection. IDEA and AIRCEL has almost same process for taking new connection. The
issues related to network, sim cards can be solved easily in AIRTEL and typical in
RELIANCE. So we can suggest to improve it in RELIANCE and VODAFONE by recruiting
the good number of employees.

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 PRODUCT RELATED

Product Related Weightag Airte Relianc Ide Vodafon Aircel Docom

e l e a e o
Range of the Product 20 15 20 15 15 10 10
Knowledge levels of the 30 25 20 30 20 25 20
Employees
Instant Solution for Queries 20 20 15 15 10 20 15
Demo of the New Product 10 4 6 6 8 10 10
Pricing of the Product 20 10 15 15 10 20 15
Total score 100 74 76 81 63 85 70

90

80

70

60

50

40

30

20

10

0
Airtel Reliance Idea Vodafone Aircel Docomo

ANALYSIS:

From the above primary data, we can find that IDEA got high score of 81 and Vodafone got
least score of 63. So showing the demo of product, price, knowledge levels of employees are
not up to level in DOCOMO. Here IDEA store employees has good knowledge levels and
VODAFONE employees has poor knowledge about the offers. The product range and pricing
has to be improved in VODAFONE and DOCOMO. So we can suggest that RELIANCE has
to improve in knowledge levels of employees and solution for queries.

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CONCLUSION:

From the above findings, we can conclude that the AIRTEL STORE has good Infrastructure,
good Employees and Quick process for taking New Connection.

Now taking into account the observation and findings and considering the parameters set in
the study, it can be concluded that out of the four essential parameters i.e,
 Basic Infrastructure
 Man Power Related
 Process Related
 Product Related

In these parameters, Product Related and Man Power Related quality of Airtel is ahead,
though it is closely followed by Reliance. In the other parameters, Basic Infrastructure and
Process Related quality of Reliance is ahead but closely followed by Airtel. Whereas Aircel
is ahead only in case of profit margin. So here we can clearly see that both Reliance and
Airtel are focussing on better service quality as a sales and distribution strategy, however for
Aircel the primary strategy is to lure the retailers with high profit margin. From the
observation and the findings of the survey it comes out clearly that the mobile stores play a
very vital role in acquiring customers by influencing their decision making in favour of the
service provider which the customers likes the most.
It also comes out clearly that infrastructure is not the only reason for which a customer buys a
particular brand but other aspects such as knowledge levels of employees, pricing of products
and services, timely settlement of claims are equally important.
The survey also brings out clearly that AIRTEL has good Customer Support centres for
quickly answering or solving problem of customer.
However from the survey it has also clearly come out that no doubt that the Knowledge
Levels of the Employees in IDEA are very good. The hygiene of DOCOMO store is very
good. The process of customer handling and uniform maintainance is good in AIRTEL. The
tariffs, plans, recharge vouchers and product related is good in RELIANCE.
As a result of which retailer does not feel comfortable in influencing a customer who needs
extensive network within the state. Sim delivery and activation is quick concerned when
compared the other networks with the RELIANCE.

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Then finally RELIANCE has so many stores with good offers compared to other services.
The hygiene of the RMS is also satisfactory. By the whole study we conclude that AIRTEL
stood as 1st place when compared to others followed by RELIANCE.

RECOMMENDATIONS TO RELIANCE

After the completion of the whole survey and going through the observations and findings, I
would like to put forward certain opinions from my end, which will definitely help Reliance
as a service provider to increase the satisfaction level of customers.
My recommendations are
 Regarding Basic Infrastructure, Reliance should try to increase the number of
computers for solving the issues related to sim cards and for reducing the waiting
time of customers.
 The way of responding to the customer has to be improved in Reliance
 The names of desks should be clearly mentioned for easily understanding of
customers.
 The placards, singage boards should be cleaned neatly and up to date.
 The handling of customers is not good in Reliance and the proper way of dressing,
hair grooming should be developed.
 The waiting time for bill payments is very high. It is taking 15-20 min for each
customer. So it must be reduced.
 The no. of employees are very less for doing recharges. So it is also taking much
time. It should be reduced by taking more employees for separate GSM, CDMA
recharges.
 The employee knowledge levels are low. So the training should be given for
improvement of the knowledge of Employees.

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 ABBREVIATIONS

VAS- Value Added Service

WAP- Wireless Application Protocol
DoT- Department of Telecom
TRAI- Telecom Regulatory Authority of India
BSNL- Bharat Sanchar Nigam Limited
GSM- Global System for Mobile communications
COAI- Cellular Operators Association of India
GPRS- General Packet Radio Service
DSE- Distributor sales Executive
FOS- Feet on Street
RTL- Reliance Telecom Limited
TDSAT- Telecom Dispute Settlement Appellate Tribunal
CDMA- Code Division Multiple Access
RCV- Re-Charge Voucher
SMS- Short Messaging Service
SIM- Subscriber Identification Module
MTNL- Mahanagar Telephone Nigam Limited

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 BIBLIOGRAPHY
Books:
 Philip Kotler, Marketing Management, 13th Edition, Pearson Education
 Philip Kotler, Retail Management, 7th Edition, Pearson Education

Reports:
 Current updates of IBEF survey

Articles:
 Naman Shah, submitted at IIPM, Ahmedabad (2007) “Critically analyze the customer
preference and satisfaction measurement in Indian Telecom Industry”

Websites:
1. www.rcom.co.in
2. www.dot.gov.in
3. www.google.com
4. www.trai.gov.in
5. www.coai.co
6. www.wikipedia.org
7. www.tcil-india.com

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 8. www.scribd.com
9. www.ibef.com
10. www.thehindubusinessline.com

ANNEXURES

1) XL Sheet of total analysis.

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