PROJECT REPORT ON CUSTOMER SATISFACTION SURVEY ON RELIANCE COMMUNICATION

SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF BACHELOR OF BUSINESS ADMINISTRATION (BBA) TRINITY INSTITUTE OF PROFESSIONAL STUDIES,DWARKA , NEW DELHI

UNDER THE GUIDANCE OF: MANDEEP KAUR

SUBMITTED BY: SAURABH KAUSHIK

ENROLLMENT NO-06724001709. BBA 5th semister SESSION: 2009-2012

TO WHOM SO EVER IT MAY CONCERN

This is to certify that the project work title SATISFACTION SURVEY ON CUSTOMER RELIANCE

COMMUNICATIONby SAURABH KAUSHIK is an authentic work carried out by him under my guidance and supervision in the Bachelor of Business Administration from TRINITY INSTITUTE OF PROFESSIONAL STUDIES, DWARKA. The report submitted has been founded satisfactory for the partial fulfillment of the degree of B.B.A

------------------------MANDEEP KAUR (PROJECT SUPERVISOR)

STUDENT DECLARATION
I hereby certify that the project report entitled CUSTOMER SATISFACTION COMMUNICATION requirement for to the Administration SURVEY Submitted award in degree of ON partial OF Bachelor RELIANCE fulfilment in of the Business

TRINITY

INSTITUTE

PROFESSIONAL

STUDIES,NEW DELHI is my original work and not submitted or the award of any other degree, diploma, fellowship, or any other similar title or prizes anywhere else.

SAURABH KAUSHIK ENROLLMENT NO. 06724001709

ACKNOWLEDGEMENT
I would like to take an opportunity to thank all the people who helped me in collecting necessary information and making of the report. I am grateful to all of them for their time, energy and wisdom. Getting a project ready requires the work and effort of many people. I would like all those who have contributed in completing this project. First of all, I would like to send my sincere thanks to MRS. MANDEEP KAUR for his helpful hand in the completion of my project.

SAURABH KAUSHIK BBA 5th semister

PREFACE
The telecom industry is one of the fastest growing industries in India. India has nearly 200 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. History of Indian Telecommunications started in 1851 when the first operational land lines were laid by the government near Calcutta (seat of British power). Telephone services were introduced in India in 1881. In 1883 telephone services were merged with the postal system. Indian Radio Telegraph Company (IRT) was formed in 1923. After independence in 1947, all the foreign telecommunication companies were nationalized to form the Posts, Telephone and Telegraph (PTT), a monopoly run by the government's Ministry of Communications. Telecom sector was considered as a strategic service and the government considered it best to bring under state's control. The first wind of reforms in telecommunications sector began to flow in 1980s when the private sector was allowed In in telecommunications equipment manufacturing. 1985,

Department of Telecommunications (DOT) was established. It was an exclusive provider of domestic and long-distance service that would be its own regulator (separate from the postal system). In 1986, two wholly government-owned companies were created: the Videsh Sanchar Nigam Limited (VSNL) for international telecommunications and Mahanagar Telephone Nigam Limited (MTNL) for service in metropolitan areas. In 1990s, telecommunications sector benefited from the general opening up of the economy. Also, examples of telecom revolution in many other countries, which resulted in better quality of service and lower tariffs, led Indian policy makers to initiate a change process finally resulting in opening up of telecom services sector for the private sector. National Telecom Policy (NTP) 1994

was the first attempt to give a comprehensive roadmap for the Indian telecommunications sector. In 1997, Telecom Regulatory Authority of India (TRAI) was created. TRAI was formed to act as a regulator to facilitate the growth of the telecom sector. New National Telecom Policy sector was in adopted India can in 1999 and cellular into two services were also launched in the same year. Telecommunication be divided segments: Fixed Service Provider (FSPs), and Cellular Services. Fixed line services consist of basic services, national or domestic long distance and international long distance services. The state operators (BSNL and MTNL), account for almost 90 per cent of revenues from basic services. Private sector services are presently available in selective urban areas, and collectively account for less than 5 per cent of subscriptions. However, private services focus on the business/corporate sector, and offer reliable, highend services, such as leased lines, ISDN, closed user group and videoconferencing.

EXECUTIVE SUMMARY
Cellular services can be further divided into two categories: Global System for Mobile Communications (GSM) and Code Division Multiple Access (CDMA). The GSM sector is dominated by Airtel, Vodfone-Hutch, and Idea Cellular, while the CDMA sector is dominated by Reliance and Tata Indicom. Opening up of international and domestic long distance telephony services are the major growth drivers for cellular industry. Cellular operators get substantial revenue from these services, and compensate them for reduction in tariffs on airtime, which along with rental was the main source of revenue. The reduction in tariffs for airtime, national long distance, international long distance, and handset prices has driven demand. Indian Telecom sector, like any other industrial sector in the country, has gone through many phases of growth and diversification. Starting from telegraphic and telephonic systems in the 19th century, the field of telephonic communication has now expanded to make use of advanced technologies like GSM, CDMA, and WLL to the great 3G Technology in mobile phones. Day by day, both the Public Players and the Private Players are putting in their resources and efforts to improve the telecommunication technology so as to give the maximum to their customers The Indian telecom sector can be broadly classified into Fixed Line Telephonyand mobile telephony. The major players of the telecom sector are experiencing a fierce competition in both the segments. The major players like BSNL, MTNL, VSNL in the fixed line and Airtel, Hutch, Idea, Tata, Reliance in the mobile segment are coming up with new tariffs and discount schemes to gain the competitive advantage. The Public Players and the Private Players share the fixed line and the mobile segments.

Currently the Public Players have more than 60% of the market share Market shares of public and Private Players Both fixed line and mobile segments serve the basic needs of local calls, long distance calls and the international calls, with the provision of broadband services in the fixed line segment and GPRS in the mobile arena. Traditional telephones have been replaced by the codeless and the wireless instruments. Mobile phone providers have also come up with GPRS-enabled multimedia messaging, Internet surfing, and mobile-commerce. The much-awaited 3G mobile technology is soon going to enter the Indian telecom market. The GSM, CDMA, WLL service providers are all upgrading themselves to provide 3G mobile services. Along with improvement in telecom services, there is also an improvement in manufacturing. In the beginning, there were only the Siemens handsets in India but now a whole series of new handsets, such as Nokia's latest N-series, Sony Ericsson's Wseries, Motorola's PDA phones, etc. have come up. Touch screen and advanced services technological have also handsets been are gaining in popularity. the mobile Radio incorporated

handsets, along with other applications like high storage memory, multimedia applications, multimedia games, MP3 Players, video generators, Camera's, etc. The value added services provided by the mobile service operators contribute more than 10% of the total revenue

TABLE OF CONTENTS Contents Page No.

1 . I n t r o d u c t i o n t o t h e I n d u s t r y .........................................................1 - 1 4 2 . I n t r o d u c t i o n t o t h e C o m p a n y ....................................................1 5 - 4 7 3 . R e s e a r c h M e t h o d o l o g y ..................................................................4 8 - 5 1 a. Title b. Objectives c. Scope of the Study d. Significance of the Study e. Research Design f. Sampling Methodology g. Limitations 4 . F a c t s & F i n d i n g s ...............................................................................5 2 - 5 8 5 . D a t a A n a l y s i s a n d I n t e r p r e t a t i o n ............................................5 9 - 7 0 6 . C o n c l u s i o n .........................................................................................7 1 - 7 3 7 . R e c o m m e n d a t i o n s .............................................................................7 4 - 7 5 8 . B i b l i o g r a p h y .....................................................................................7 6 - 7 7 9 . A n n e x u r e ..............................................................................................7 8 - 8 0 a . Q u e s t i o n n a i r e .......................................................................................7 9

CHAPTER - 1

PROFILE OF THE COMPANY

INTRODUCTION TO THE INDUSTRY

The leading cellular service providers have the following number of subscribers:

Bharti Airtel has the largest customer base with 31% market share, followed by Hutch and BSNL with each holding 22% market share. The 2008 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. The cellular phone industry is one of India's rapidly growing industries. Since the industry came into being in the mid 1990s, its average per annum growth rate has been a phenomenal 85 percent. By the end of 2008, the Indian cellular phone industry

had over 10 million subscribers. The industry has undergone a number of changes over the years. The National Telecom Policy 1999 was an important landmark in the development of the cellular telecom industry in India; the tariff rationalization and policy regulation introduced in the Policy helped the industry grow at the pace it did. The years 2007 and 2008 saw an increase in level of competition in the industry with more operators being given licenses, and fixed line providers also entering the mobile market. In 2003, Telecom Regulatory Authority of India (TRAI) announced regulation of interconnect user charges to resolve conflicts between cellular operators and fixed line operators. Keywords Cellular phone industry, 1990, per annum, growth rate, phenomenal, 85 percent, 2002, Indian cellular phone industry, 10 million, subscribers, policy National Telecom 2001, charges, Policy, 2002, 1999, tariff rationalization, India, TRAI, regulation, user competition, cellular

operators, mobile market, 2003, Telecom Regulatory Authority of interconnect conflicts, operators, fixed line operators The cellular phone industry is one of India's rapidly growing industries. Since the industry came into being in the mid 1990s, its average per annum growth rate has been a phenomenal 85 percent. By the end of 2008, the Indian cellular phone industry had over 10 million subscribers. The industry has undergone a number of changes over the years. The National Telecom Policy 1999 was an important landmark in the development of the cellular telecom industry in India; the tariff rationalization and policy regulation introduced in the Policy helped the industry grow at the pace it did. The years 2007 and 2008 saw an increase in level of competition in the industry with more operators being given licenses, and fixed line providers also entering the mobile market. In 2007, Telecom Regulatory Authority of India (TRAI) announced regulation of interconnect

user charges to resolve conflicts between cellular operators and fixed line operators Economic theory suggests that there is a positive correlation between infrastructure is one and of the economic most development. types of Telecommunications important

infrastructure. Communication is said to be the life-blood of economic activity. Systems of communication assume critical importance when globalization and contraction of geographic distances have become the order of the day. International studies indicate that for every one percent increase in the tale density (penetration rate of telecommunications) of a country, there is a corresponding increase of three percent in the gross domestic product of the country... The Indian telecommunications has been zooming up the growth curve at a feverish pace, emerging as one of the key sectors responsible for India's resurgent economic growth. India is set to surpass US to become the second largest wireless network in the world with a subscriber base of over 300 million by April, according to the the Telecom Regulatory Authority of India (Trai). The month of April 2008 will see India wireless subscriber base that currently stands at 250.93 million surpassing that of the US to become the second wireless network in the world. The year 2007 saw India achieving significant distinctions: having the world's lowest call rates (2-3 US cents), the fastest growth in the number of subscribers (15.31 million in 4 months), the fastest sale of million mobile phones (in a week), the world's cheapest mobile handset (US$ 17.2) and the world's most affordable colour phone (US$ 27.42) and largest sale of mobile handsets (in the third quarter). SEGMENT-WISE GROWTH Wireless segment has emerged as the preferred mode of telephone service by the consumers, reflected in the rising share of mobile phone connections to total connections. The share of mobile 4

phones has increased from 71.69 per cent at the end of March 2006 to 87.68 per cent at the end of May 2008. While total mobile subscriber base was 277.92 million, wire line subscriber base was 39.05 million. Consequently, overall tele-density has increased to 27.59 per cent at the end of May 2008. India is likely to be second largest mobile market in the BRIC nations, with 560 million mobile users representing the next great growth curve for both mobile and interactive eMarketers. Also, private sector has become the dominant player in the industry. While public sector companies added 53.6 million subscribers during 1998-2007, private companies have added a whopping 133.58 million subscribers during the same period. The dominance has been much more pronounced in the mobile market, where private operators have added 124.68 million subscribers, while public sector operators added only 31.79 million subscribers. INVESTMENT The booming domestic telecom market has been attracting accelerating amount of investment. During April 2000 to March 2008, cumulative FDI inflows into the Indian telecommunications sector amounted to US$ 3.84 billion, accounting for 6.81 per cent of the total FDI inflows into the country. In fact, the surge in mobile services market is likely to see investment worth about US$ 24 billion by 2010, going by industry estimates. This is understandable, when seen that the number of mobile subscribers is estimated to increase to 600 million by 2012, according to Standard Chartered Bank, implying a mobile in the hands of every second person in the country The Bharti Group, which operates in 23 circles, continues to be the country's largest cellular operator, with 50 lakh subscribers. BSNL, which operates in 22 circles, has a subscriber base of 37 lakh subscribers. Thus BSNL 5 stands second largest cellular marketing industries, according to a report by

operator in terms of subscriber base at the end of the fiscal ending March 31, 2007, displacing Vodafone from the second position. Vodafone, which operates in only eighteen circles, is the third largest operator with a subscriber base of 32 lakh. Unlike fellow public sector undertaking, MTNL, which operates in Mumbai and Delhi, BSNL has been a very aggressive player in the market. "Cellular operators who expected BSNL to go the MTNL way, were taken by surprise and did not take effective steps to counter it, till it was too late in the day," said a telecom analyst. Belying fears of a slowdown in cellular subscriber acquisitions, the cell club has reported a 7.92% growth, the highest growth in any month so far, during March 2005. Year-on-year, the cellular subscriber base in the country has almost doubled in March 2005, and is expanding at the rate of 25% per year thereafter. The cellular subscriber club expanded by 21.31 lakh last month. This is much higher than 5.9 lakh subscribers added in February 2005 and 2.13 lakh in January 2005. Idea, which operates in Seven circles, is the fourth largest operator with a subscriber base of 17.80 lakh, higher than BPL's 11.31 lakh subscribers across four circles. The subscriber numbers per operator drop sharply with the sixth largest operator, Spice Communications, having a subscriber base of 9.40 lakh, followed by Reliance Telecom's 8.9 lakh subscribers. MTNL is the ninth largest operator, with a base of 8.32 lakh subscribers. While the subscriber base-jumped by 3.38% to 44.39 lakh in the metros, subscriber base of category A circles of Maharashtra, Gujarat, Andhra Pradesh, Karnataka and Tamil Nadu jumped by 10.18 % to reach 43.64 lakh. Category B circles of Kerala, Punjab, Haryana, Uttar Pradesh (West), Uttar Pradesh (East), Rajasthan, Madhya Pradesh and West Bengal recorded a jump of 10.69%, with a total base of 33.74 lakh subscribers. Circle C has reported 12.74 % growth with subscriber numbers jumping to 5.08 lakh. 6

Among the metros, while Mumbai added 1,63,180 subscribers, higher than the 1,58,646 added by Delhi, the Capital's cellular subscriber base of over 80 lakh is still higher than Mumbai's 66.89 lakh. While the cellular industry has been on roll for the first three quarters of the previous financial year with an average of 16.75 lakh monthly additions in the third quarter, the first two months of 2007 had seen the growth slowing down. With a population of around 1.1 billion growing at roughly 1.7 per cent a year, India is potentially one of the most exciting GSM markets in the world. After two rather difficult years, the past 12 months have seen the region's promise beginning to come to fruition. Much of this success can be attributed to the stabilisation of the licensing and regulatory environment. India's telecommunications have undergone a steady liberalisation since 1994 when the Indian government first sought private investment in the sector. More significant liberalisation followed in 1996 with the licensing of new local fixed line and mobile service providers. However, it has been the government's New Telecom Policy (1999) that has had the most radical impact on the development of GSM services. 'The policy's mission statement is 'affordable communications for all, there is a genuine commitment to creating a modern and efficient communications infrastructure that takes account of the convergence of telecom, IT and media. In addition, the policy places significant emphasis on greater competition for both fixed and mobile services.' Competition in the mobile sector has already had a visible impact on prices with calls currently costing less than 9 cents per minute. This means that service costs have fallen by 60 per cent since the first GSM networks became live in 1995. It also helps explain why a recent Telecom Asia survey revealed that more than 70 per cent of Indian mobile subscribers felt that prices were now at a reasonable level. One of the challenges facing GSM operators in India is the diversity of the coverage regions -from remote rural regions to 7

some of the most densely populated metropolitan areas in the world. India has more than 40 networks, which cover the seven largest cities, over 7000 towns and several Lacs Delhis. Such depth of coverage has required enormous investment from India's operators. It is estimated that more than Rs200 billion had been invested in India's GSM industry by mid-2000, a figure that is set to be supplemented by a further Rs. 300 billion over the next five years. The good news is that subscriber growth is beginning to look healthy. With India's low PC penetration and high average Internet usage -at 14-20 hours a month per user it is comparable to the US -the market for mobile data and m-commerce looks extremely promising. WAP services have already been launched in the subcontinent and the first GPRS networks are in the process of being rolled out. In the year ahead, GSM India will work with its members to realise the potential of early packet services in anticipation of the award of 3GSM licences. INDIA FASTEST GROWING GSM MART India is expected to have 145 million GSM (global system for mobile communications) customers by 2007-08 compared to 26 million subscribers as on March 2005, according to the Global Mobile Suppliers Association. "For GSM, India is a success story. It is one of the fastest growing markets with its subscriber base doubling in 2005. At this pace, the target of 150 million subscribers by 2007-2008 is definitely achievable," Alan Hadden, president of GSA, said at a news conference in New Delhi. Globally, the GSM market reached 1 billion users in February 2005, he said, adding GSM accounted for 80 per cent of the new subscriber growth in 2005."Almost every Latin American operator has chosen GSM. In North America GSM growth is bigger than CDMA (code division multiple access)," he said. Commenting on the raging debate over GSM versus CDMA in mobile services arena, Hadden said: "GSM is the world's most successful mobile standard with over 1 billion users, and 8 is an open mobile

standard. It also supports automatic international roaming, which is a major contributor to business plans." INDIAS GSM MOBILE FIRMS REVENUE UP 30 PCT Indias private telecoms firms offering GSM-based mobile services reported a 24 percent rise in revenue in the year to March 2007 but said future growth rates could slow because of heavy taxes on the nascent industry. Although Indias mobile sector is the worlds fastest growing major wireless market, it is amongst the highest taxed industries in the country. Mobile carriers pay as much as 25 percent of their revenue as licence fee, spectrum charges and other taxes. The Cellular Operators Association of India (COAI) said revenue for fiscal 2003/04 stood at 83.08 billion rupees ($1.86 billion) compared with 64 billion rupees a year earlier. According to T.V. Ramachandran, director general at COAI, These revenue growth rates cannot be maintained unless there is a concerted effort by the government to cut excessive levies and allow sharing of infrastructure But the potential to do much better exists as there is still huge demand in the sector. Ramachandran said the sector was still losing money but declined to elaborate. a doubling of the GSM (Global Sales jumped because of System of Mobile

Communications) user base as more people entered the flourishing market thanks to one of the lowest call rates in the world. But the monthly average revenue per user, a key measure of profitability, declined 17.4 percent to 432 rupees in the fourth quarter Growth compared with 523 rupees in the first quarter due to a cut in tariffs and excessive competition among companies. slowing, demand untapped: The association has not included the financial performance and the GSM-user base of state-run firms Bharat Sanchar Nigam Ltd, the second-ranked player, and Mahanagar Telephone Nigam Ltd, Ramachandran said. There are 150 million GSM customers and more than 96 million users of the rival CDMA-based mobile services in the country.

The pace of growth in monthly additions is slowing after just 1.25 million users took up the service in April compared with 1.9 million in the previous month and 1.63 million in February. Ramachandran blamed the slowdown on a majority of small GSM operators being unable to expand networks into rural swathes where demand remained largely untapped. Our surpluses are not enough to cover costs of network expansion and financing charges on loans. We are making money only to cover operating expenses, he said. Carriers are now subsidising handset costs to woo users into the underpenetrated industry forecast to have more than 250 million customers by 2007. Roughly three percent of Indians own a mobile phone compared with about 20 percent in China. About a dozen firms such as Bharti Airtel Ltd, 28 percent owned Ltd by Singapore the Indian Telecommunications, sector. GSM operators are not the only ones who are worried about the rapid strides made by CDMA mobile players Reliance Infocomm and Tata Indicom in the Indian cellular market? The GSM suppliers both handset and equipment who incidentally also have their other foot firmly placed in the CDMA pie, are beginning to lose some sleep over what was earlier termed as `niche and `minuscule data carriage market by the operators Apart from the strong success of the two CDMA operators whose networks are based on code division multiple access (CDMA), the miserable showing of the four global standard for mobile (GSM) based networks that launched general packet radio service (GPRS) service for data connectivity in last three years, has the vendors worried. Global mobile Suppliers Association (GSA) now believes that even though India will primarily remain a voice traffic-led market in next two-three years, the data traffic component will Reliance Infocomm and

GSM-unit of Vodafone group battle in the hotly competitive

10

grow by 25-30 per cent, an optimism that its trying to make GSM operators feel as well. THE CDMA CHALLENGE CDMA players had launched their services with CDMA 2000 1Xbased networks, which can give hi-speed, always-on connectivity to the Internet, and other data services. GSM operators, on the other hand, have had to migrate from the frustrating experience of WAP (wireless application protocol) to GPRS, which has not significantly improved the subscribers experience of surfing the Net on/from mobile. The top brass of GSA, an organisation comprising Nokia, Siemens, Ericsson, Alcatel and Lucent Technologies - met on Tuesday in the capital to persuade the operators to adopt EDGE (Enhanced Data rates for GSM Evolution) and leave GPRS behind as a dream gone sour. Only Airtel, Vodafone, BPL Mobile and Idea Cellular had launched GPRS, but the data transfer speeds of GPRS have been abysmal. The field trials gave a speed of around 54 kbps, but the actual speeds have not exceeded 14-18 kbps, a major reason why GPRS growth has been so slow. As against the total GSM cellular base of 5.61 crore, the country has between 2,80,000 lakh GPRS users only. In comparison, the two CDMA operators have about 120 lakh connections. All these sets are data compliant. Though no figures are available as to how many use these for data services, the figure is believed to be respectable as a percentage ratio for CDMA. But first, the EDGE! Bharti Cellular is close to commercially launching its EDGE service in Delhi and Mumbai by end May or early June, sources said. The company was the first to conduct field trials in November with its equipment supplier Ericsson. Idea too held EDGE field trials in February this year with its vendor Nokia. Vodafone and BPL are yet to hold the trials. The two companies would eventually migrate to EDGE, but perhaps after seeing the response to Bhartis service. 11

EDGE holds the promise of delivering data speeds of around 170180 kbps (as against the theoretical speed of around 380 kbps) which, if achieved, promises the launch of many data applications. The scalable cost of migrating from GPRS to EDGE is not too high and mainly comprises software upgrades in case of a modern network such as Bharti and Hutch, claimed chairman of GSA India chapter Rakesh Malik. Will GSM maintain its headstart? At the GSM Evolution Forum held in New Delhi, GSA president Alan Hadden predicted that GSM growth will far outstrip CDMA as was happening globally. He felt India could have as many as 200 million GSM subscribers by 2007-2008, up from nine million in December 2004. According to GSA, there are over 1.1 billion GSM subscribers worldwide as against 250 million CDMA customers. The revenue of top 25 global operators from data averages 18 per cent and 22 of these operators run GSM networks. Overall, there are 76 operators in 50 countries that have committed to deploy EDGE. Almost every country has a GSM-based network and even those US operators, which operated on now-defunct TDMA technology, were migrating gradually to GSM, not CDMA, pointed out Hadden at the GSM Evolution Forum. The Forum is a global GSA program to assist the operators for evolution to third generation (3G) technologies. People are using their phones for much more than voice. Fifteen networks have commercially launched EDGE as it can run 3G like services in the existing spectrum for the operators without needing a 3G license. Even the migration to a fullfledged 3G level of Wideband CDMA (WCDMA) will be smooth with EDGE, said Hadden. Besides, the automatic roaming provided by GSM networks in almost 200 countries is a power that CDMA doesnt give you. We know for sure that almost 20-25 per cent of the revenue for some GSM operators comes from roaming customers, he added. But CDMA is no pushover with Korea and Philippines as the shining 12

jewels in its crown. The first CDMA 2000 1X was commercially deployed in October 2000. Already, 81 operators have launched 77 CDMA 2000 1X networks whereas nine have launched services based on 1xEV-DO platform across Asia, the Americas and Europe. At least, 16 new 1X and six 1xEV-DO networks are scheduled to be deployed in 2004, according to CDMA Development Group. EV-DO and EV-DV are the next level of evolution on the CDMA 2000 1X platform, capable of delivering services comparable to 3G WCDMA. Where are the models? What will matter a lot in this war will be the availability of EDGE compliant handsets at affordable rates. While the two CDMA operators have been giving out handsets that can give hispeed data transfer, same has not been the case with GSM. Even now, GPRS handsets have not become commonplace and GPRS feature is found only in mid and high-end segment handsets. End sum game When the networks deploy EDGE, subscribers can expect the delivery of advanced mobile services such as easy downloading of video and music clips, full multimedia messaging, besides highspeed Internet and e-mail access, provided their handset supports all this. But the real cruncher will be the migration at a later stage to 3G technologies such as WCDMA, EV-DO or EV-DA as and when the government decides what to do with the 3G licences. WCDMA for example promises delivery of a phenomenal 2 megabytes per second (mbps), equivalent to what a leased line in many middle level corporates gives. More importantly, WCDMA will spawn a whole new range of full motion audio-video applications, including video telephony. GSM lobby may continue to remain gung ho over the future of their technologies over that boosted by the American firms Qualcomm and Motorola, but Indian market could well throw an interesting scenario that industry experts will do well to watch. In the 13

coming months, Reliance plans to offer its CDMA subscribers much more than what GSM players intend to deliver through their EDGE for their subscribers. Who succeeds in this battle for mobile customers eyeballs is most difficult to predict. A Korea and Japan may not be waiting to happen in India, but India will probably be more like the Chinese market with both standards co-existing. For now, GSM rules! The telecom industry is one of the fastest growing industries in India. India has nearly 200 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. History of Indian Telecommunications started in 1851 when the first operational land lines were laid by the government near Calcutta (seat of British power). Telephone services were introduced in India in 1881. In 1883 telephone services were merged with the postal system. Indian Radio Telegraph Company (IRT) was formed in 1923. After independence in 1947, all the foreign telecommunication companies were nationalized to form the Posts, Telephone and Telegraph (PTT), a monopoly run by the government's Ministry of Communications. Telecom sector was considered as a strategic service and the government considered it best to bring under state's control. The first wind of reforms in telecommunications sector began to flow in 1980s when the private sector was allowed In in telecommunications equipment manufacturing. 1985,

Department of Telecommunications (DOT) was established. It was an exclusive provider of domestic and long-distance service that would be its own regulator (separate from the postal system). In 1986, two wholly government-owned companies were created: the Videsh Sanchar Nigam Limited (VSNL) for international telecommunications and Mahanagar Telephone Nigam Limited (MTNL) for service in metropolitan areas.

14

In 1990s, telecommunications sector benefited from the general opening up of the economy. Also, examples of telecom revolution in many other countries, which resulted in better quality of service and lower tariffs, led Indian policy makers to initiate a change process finally resulting in opening up of telecom services sector for the private sector. National Telecom Policy (NTP) 1994 was the first attempt to give a comprehensive roadmap for the Indian telecommunications sector. In 1997, Telecom Regulatory Authority of India (TRAI) was created. TRAI was formed to act as a regul ator to facilitate the growth of the telecom sector. New National Telecom Policy was adopted in 1999 and cellular services were also launched in the same year. Telecommunication sector in India can be divided into two segments: Fixed Service Provider (FSPs), and Cellular Services. Fixed line services consist of basic services, national or domestic long distance and international long distance services. The state operators (BSNL and MTNL), account for almost 90 per cent of revenues from basic services. Private sector services are presently available in selective urban areas, and collectively account for less than 5 per cent of subscriptions. However, private services focus on the business/corporate sector, and offer reliable, highend services, such as leased lines, ISDN, closed user group and videoconferencing. Cellular services can be further divided into two categories: Global System for Mobile Communications (GSM) and Code Division Multiple Access (CDMA). The GSM sector is dominated by Airtel, Vodfone-Hutch, and Idea Cellular, while the CDMA sector is dominated by Reliance and Tata Indicom. Opening up of international and domestic long distance telephony services are the major growth drivers for cellular industry. Cellular operators get substantial revenue from these services, and compensate them for reduction in tariffs on airtime, which along with rental was the main source of revenue. The reduction in tariffs for airtime, national long distance, international long distance, and handset prices has driven demand.

15

Indian Telecom sector, like any other industrial sector in the country, has gone through many phases of growth and diversification. Starting from telegraphic and telephonic systems in the 19th century, the field of telephonic communication has now expanded to make use of advanced technologies like GSM, CDMA, and WLL to the great 3G Technology in mobile phones. Day by day, both the Public Players and the Private Players are putting in their resources and efforts to improve the telecommunication technology so as to give the maximum to their customers The Indian telecom sector can be broadly classified into Fixed Line Telephonyand mobile telephony. The major players of the telecom sector are experiencing a fierce competition in both the segments. The major players like BSNL, MTNL, VSNL in the fixed line and Airtel, Hutch, Idea, Tata, Reliance in the mobile segment are coming up with new tariffs and discount schemes to gain the competitive advantage. The Public Players and the Private Players share the fixed line and the mobile segments. Currently the Public Players have more than 60% of the market share We tend to think of branding as a modern day phenomenon. Certainly, during the late 1990s and the early 2000s, branding emerged as a significant area of emphasis not only for companies and their products, but also for municipalities, universities, other non-profit organizations and even individuals. ubiquitous. Branding became Many of us also know that Proctor & Gamble and

other consumer product companies began branding their products in earnest in the mid-to-late 1800s. But more interesting to me is how far back in time branding goes. For instance, companies that sold patented medicines and tobacco began branding their products as early as the early 1800s. Around the same time, some fraternities and sororities branded their pledges (literally) during initiation rites as a form of identification and bonding, a practice that has long since been identified as hazing and therefore abandoned. But that is still recent history -- relatively.

16

Between the 1600s and 1800s, criminals were branded (again literally) as a form of punishment and identification. For As instance, in England, they branded an S on a person's cheek, while in France, they branded a fleur de lis on the shoulder. repugnant as it may be to us today, slaves were also branded roughly during the same time period to connote ownership. In the 1200s, England required bread makers, goldsmiths and silversmiths to put their marks on goods, primarily to insure honesty in measurement. craft guilds. But branding goes back even further. Greece, Rome and India. As far back as 1300 BC, potter's marks were used on pottery and porcelain in China, Branding of cattle and livestock go So, back as far as 2000 BC. And archaeologists have found evidence of advertising among Babylonians dating back to 3000 BC. how far back does branding go? At least 5000 years. What is more interesting to me are underlying needs from which branding originated: to insure honesty, provide quality assurance, identify source or ownership, hold producers responsible, differentiate, as a form of identification and to create emotional bonding. Interestingly, people value brands for many of the same reasons today. Clearly, history provides some insight and perspective on modern day branding In the Medieval times, printers also used marks as did paper makers (watermarks) and various other

17

INTRODUCTION TO THE COMPANY RELIANCE GROUP PROFILES Reliance Anil Dhirubhai Ambani Group, an offshoot of the Reliance Group founded by Shri Dhirubhai H Ambani (19322002), ranks among Indias top three private sector business houses in terms of net worth. The group has business interests that range from telecommunications (Reliance Communications Limited) to financial services (Reliance Capital Ltd) and the generation and distribution of power (Reliance Energy Ltd). Reliance ADA Groups flagship company, Reliance Communications, is India's largest private sector information and communications company, with over 60 million subscribers. It has established a pan-India, high-capacity, integrated (wireless and wireline), convergent (voice, data and video) digital network, to offer services spanning the entire infocomm value chain. Other major group companies Reliance Capital and Reliance Energy are widely acknowledged as the market leaders in their respective areas of operation.

Reliance Energy Ltd.

Reliance Mutual Fund

Harmony

Reliance Communications

Reliance Life Insurance

Reliance Anil Dhirubhai Ambani Group

Reliance General

Reliance Portfolio Management Service

18

Insurance 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 Indias had largest stated and private as early sector as company Make to virtually the people from of an at scratch, 1999: tools

information

communication

available

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 Dhirubhais 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 for spanning enterprises the as entire well as infocomm individuals, (information applications, and and communication) value chain, including infrastructure and services 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 countrys 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 Indias capital markets, the champion of shareholder interest.

19

But the role Dhirubhai cherished most was perhaps that of Indias greatest wealth creator. In one lifetime, he built, starting from the proverbial scratch, Indias largest private sector enterprise. 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 colossusan 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 Indias 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 Dhirubhais extraordinary vision and leadership, Reliance scripted one of the greatest growth stories in corporate history anywhere in the world, and went on to become Indias 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 worlds largest shareholder families.

20

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. 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 Indias leading integrated telecommunication company with over 60 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 achieve customer delight by enhancing 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 Ambanis 70th birthday, was among the initial initiatives of Reliance Communications. It marked the auspicious

21

beginning

of

Dhirubhais

dream

of

ushering

in

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. 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. Latest Offer by the Reliance Communication

Reliance Communication , previously

is a cellular operator in

India that covers 16 telecom circles in India. Despite the official name being Reliance Communication , its products are simply branded Reliance Communication. It offers both prepaid and postpaid GSM cellular phone coverage throughout India and is especially strong in the major metros. Reliance Communication provides 2G services based on 900 MHz and 1800Mhz digital GSM technology, offering voice and data services in 16 of is the country's by 23 licence areas. Reliance 52%, Communication owned Reliance Communication

Group 33%, and other Indian nationals, 15%.

22

On 11 February 2007, Reliance Communication agreed to acquire the controlling interest of 67% held by Li Ka Shing Holdings in for US$11.1 billion, pipping Reliance Communications, Hinduja Group, and Group, which is the owner of the remaining 33%. The whole company was valued at USD 18.8 billion. . The transaction closed on 8 May 2007. Previous brands In December 2006, re-launched the "" brand nationwide, consolidating its services under a single identity. The Company entered into agreement with NTT DoCoMo to launch i-mode mobile Internet service in India during 2007. The company used to be named getting the necy government , reflecting the name of its with regards to the previous owner, . However, the brand was marketed as . After approvals acquisition of a majority by the Reliance Communication Group, the company was rebranded as Reliance Communication . The marketing brand was officially changed to Reliance Communication on 20 September 2007. In Mumbai, it was earlier known by the name Orange, a brand that used to be marketed by its former owner, . Still earlier it was known as Max Touch and AceTel even before that. On September 20, 2007 becomes Reliance Communication in one of the biggest brand transition exercises in recent times. Reliance Communication is spending somewhere in the region of Rs 250 crores on this high-profile transition being unveiled today. Along with the transition, cheap cell phones have been launched in the Indian market under the Reliance Communication brand. There are plans to launch co-branded handsets sourced from global vendors as well. A popular daily quoted a Reliance Communication director as saying that "the objective is to leverage Reliance Communication Group's global scale in bringing millions of low-cost handsets from across-the-world into India." While there is no revealing the prices of the low-cost Reliance Communication handsets, the 23

industry is abuzz that prices might start at Rs 666, undercutting Reliance Communications' much-hyped 'Rang Barse' with cheap handsets beginning at Rs 777. Meanwhile, Reliance Communication sources said there would be no discounts or subsidized handset offers -- rather handsetbundled schemes for customers. Incidentally, China's ZTE, which is looking to set-up a manufacturing unit in the country, is expected to provide several Reliance Communication handsets in India. Earlier this year, Reliance Communication penned a global low-cost handset procurement deal with ZTE. Growth of In 1992 (1992-2005) Whampoa and its Indian business partner established a

company that in 1994 was awarded a licence to provide mobile telecommunications services in Mumbai (formerly Bombay) and launched commercial service as By the time of Max in November 1995. Analjit Singh of Max still holds 12% in company. Telecom's Initial Public Offering in 2004, Whampoa had acquired interests in six mobile telecommunications operators providing service in 13 of India's 23 licence areas and following the completion of the acquisition of BPL that number increased to 16. In 2006, it announced the acquisition of a company that held licence applications for the seven remaining licence areas. In a country growing as fast as India, a strategic and well managed business plan is critical to success. Initially, the company grew its business in the largest wireless markets in India - in cities like Mumbai, Delhi and Kolkata. In these densely populated urban areas it was able to establish a robust network, well known brand and large distribution network -all vital to long-term success in India. Then it also targeted business users and high-end post-paid customers which helped to consistently generate a higher Average Revenue Per User ("ARPU") than its competitors. By adopting this focused growth plan, it was able to

24

establish leading positions in India's largest markets providing the resources to expand its footprint nationwide. In February 2007, Telecom announced that it had entered into a binding agreement with a subsidiary of Reliance Communication Group Plc to sell its 67% direct and indirect equity and loan interests in Limited for a total cash consideration (before costs, expenses and interests) of approximately US$11.1 billion or HK$87 billion. 1992: Whampoa and Max Group established Max 2000: Acquisition of Delhi operations Entered Calcutta and Gujarat markets through acquisition 2001: Won auction for licences to operate GSM services in Karnataka, Andhra Pradesh and Chennai 2003: Acquired AirCel Digilink (ADIL circles and renamed it under brand 2004: Launched in three additional telecom circles of India namely 'Punjab', 'Uttar Pradesh West' and 'West Bengal' 2005: Acquired BPL, another mobile service provider in India was often praised for its award winning advertisements which all follow a clean, minimalist look. A recurrent theme is that its message Hello stands out visibly though it uses only white letters on red background. Another recent successful ad campaign in 2003 featured a pug named Cheeka following a boy around in unlikely places, with the tagline, Wherever you go, our network follows. The simple yet powerful advertisement campaigns won it many admirers Reliance Communication subscriber base The Reliance Communication subscriber base according to COAI Cellular Operator Association of India as of March 2008 was: Delhi - 3,216,769 Mumbai - 3,451,567 Chennai - 1,174,589 Subsidiary) which operated in Rajastan, Uttar Pradesh East and Haryana telecom

25

Kolkata - 1,974,177 Maharashtra & Goa - 2,610,389 Gujarat - 6,010,594 Andhra Pradesh - 2,601,458 Karnataka - 2,850,346 Tamil Nadu - 3,180,820 Kerala - 2,001,133 Punjab - 1,645,501 Haryana - 1,282,208 Uttar Pradesh (West) -2,858,429 Uttar Pradesh (East) -3,508,355 Rajasthan - 2,934,598 West Bengal & Andaman and Nicobar - 2,825,310 The total is 44,126,243 or 22.93% of the total 192,355,939 GSM mobile connections in India till March 2008. Reliance Communication does not operate in Assam, Bihar, Himachal Pradesh, Jammu & Kashmir, Madhya Pradesh, Orissa and the North Eastern States Reliance Communication Deal (Including Quote & unquote) Reliance Communication announced on February 11 that it had decided to pay $11.1 billion in cash and assume $2 billion in debt to buy a 67% stake in , one of India's largest mobile operators with more than 22 million subscribers. Reliance Communication's purchase of the controlling interest in - or , as it is commonly called from Hong Kong-based shipping and real estate baron Li Ka-Shing values the company at nearly $19 billion, which is twice as much as the first round of bidders in January thought it was worth. Four days later, the Aditya Birla group's Idea Cellular -- another large mobile phone services provider with 12.4 million subscribers -- found more than $27 billion in investor money bidding for its stock during the company's initial public offering,

26

which had intended to raise some $480 million. The IPO was oversubscribed by 57 times, according to media reports. As both transactions show, India's mobile phone market is red hot -- which begs the question whether it is too hot. Are these enormous valuations justified by the market's growth potential? Their view is that while it might appear that these transactions are overvalued, the market has lots of growth potential. As such, a shakeout -- if it occurs is unlikely in the near future. The growth numbers explain most of the market's fervor. India's cell phone user population doubled during the past year to 150 million at the end of 2006. More than 6 million new subscribers are signing up for mobile services each month, making India the world's fastest growing mobile market. Cell phones are not just a way to keep in touch with loved ones in a country that loves to talk, but in a booming economy they also become workstations for millions in India's unorganized sectors. Reliance Communication's India-born CEO Arun Sarin said in a speech in Barcelona recently that he expects the 150 million subscriber base -- which represents a penetration rate of just 13% -- to grow to 500 million in a few years. Much of this growth is expected to come from more than 600,000 Delhis where millions of Indians live. "We are really excited to move into the rural areas," Sarin said in his speech. "Whenever we get into these rural areas, we find people love to talk. They light up our base says stations immediately." Wharton marketing professor Jagmohan Raju enterprise valuations at the level of Reliance Communication's payment for might not appear to be justified using conventional analysis tools, but he agrees with Sarin that most of the growth in the future will come from the lower end of the market in rural India. "The way to justify these valuations is not to base them on how many subscribers [the acquiring company plans] to have,.The numbers are justified based on a prediction of higher value-added services, and also some sense of how mobile phones can be used for 27

marketing. Will the mobile handset be a device that will be used to send ads -- perhaps video ads -- to subscribers? Can you add more services and more value at the lower end, with somebody else subsidizing the cost of the phones?" He says these valueadded services could go beyond ring tones and text messaging to bringing television and advertising to handsets. A.T. Kearney's Indian operation, believes that Reliance Communication's deal is good for shareholders of both companies as well as consumers. "This is a deal priced to perfection," he says. "It is a good strategic fit all around." this transaction secures Reliance Communication's position as a major player in the global telecom industry and gives the company a strategic presence in Asia. Like other global telecom firms, Reliance Communication is looking for growth in Asia because markets like the U.S. which has an 80% penetration rate for cell phones -offer little growth potential. This deal is also a "huge windfall for the guys,". "They could not have wished for anything more." He believes that Reliance Communication will now go about trying to increase its market share from 15% at present to at least 25% in the next few years. In the process, from Reliance Indian Communication mobile firms will such face as strong competition Reliance

Communications. Price wars are likely as the battle heats up, and these will ultimately benefit Indian consumers. "They will get a better global franchise and access to technology and features as India becomes the tech battleground. Significantly, Reliance Communication has signed a deal with India's biggest mobile operator, Bharti Airtel, to share the costs of infrastructure development in rural areas. "In the developed world, you have guaranteed power supply, but [in India] the power supply to your base station battery is uncertain, and that adds to the cost,". "The fact that Reliance Communication and Bharti Airtel are going to share base stations in rural areas is a good sign, because it has a multiplier effect." He sees the same 28

underlying fundamentals driving the record subscriptions for Idea Cellular's IPO. "These are highly correlated," he says. "Those are mind-boggling numbers, and further validate the growth story for mobile phone services in India." Hardly anyone questions Reliance Communication's optimism about the growth potential of mobile telephony in rural India. In fact, Sarin has expressed a desire to also acquire the 33% stake held by Mumbai's group, and if that doesn't pan out, he is keen on forging a successful partnership with the Ruia family that runs the group. "Given that technological uncertainty, rapid change and disruptive innovation are a way of life in the mobile industry, it is almost certain that companies such as Reliance Communication are making big ICT (information, communications and technology) investments factor in the intangibles. He the real option value" for Reliance Communication to gain a presence "in the world's hottest market" cannot be underestimated. "Investors are placing a premium on being there," he says. "ICT investments tend to pay off in new and unexpected ways over time for those who make the initial investments and have the ability to respond in an agile fashion." According to Boston Consulting Group in New Delhi says that in the M&A world, "like beauty, value lies in the eyes of the acquirer," and the valuation arithmetic plays out differently for each bidder. "That is why it is often difficult to say that there is a premium paid on the discounted cash flows of the acquired entity. The premium is typically based on two things: One is the synergies you can extract and the second is the option value or the strategic value you place on the business." He adds that it is inconceivable for a global player to be locked out of the Indian market. "At the end of the day -- not now, but three years from now as per CEO of the Reliance Communication Customer Service Clearly, Reliance Communication will face me-too competitors as it attempts to increase revenue and profitability with value-added 29

services in the face of the lower ARPUs (average revenue per user) that industry analysts predict. ARPUs for Indian mobile phone service providers range from $10 to $20 a month, and currently occupies the top slot. So where does its competitive edge lie? Britain, Reliance Communication sets itself apart from the competition with "above-average customer service." He describes Indian customer service levels as "abysmal" and notes that Reliance Communication could use its strengths in that department to increase ARPUs from higher-end customers and reduce customer churn. "It's about training your work force as you manage growth, and Reliance Communication has that capability, "Any player capable of doing that in the current Indian scenario will have to attract and retain a fickle and undertrained workforce. If it is executed well, this strategy can lead to significant rents." Reliance Communication's edge here, he says, could be that its service levels will be "hard to replicate" for Indian mobile service providers as "it may not be part of their DNA." One of the key issues in valuations is the reliability of revenue recognition, and that will come with more post-paid subscribers than prepaid," he says. "The U.S. market has more post-paid subscribers than prepaid ones." Market estimates put prepaid mobile phone users in India at about 80% of the total. The gains are manifold for providers that are able to win over more postpaid users. "Post-paid services are easier to manage, and have fewer intermediaries," he says. "Right now, companies have to pay huge margins to retailers in India who sell these prepaid cards." Reliance Communication will face with its acquisition is ensuring synergies and integration across the two companies. "This is where the rubber meets the road. The high-growth, high-volume and low-margin Indian market is significantly different from the rest of Reliance Communication's acquisitions. Reliance Communication will do well to emulate the lean model of [Bharti] 30

Airtel, but it also has the opportunity to segment the consumer base and exercise price and service quality differentiation." The Reliance Communication deal is a precursor of more bigticket transnational deals in the Indian marketplace. "With Indian firms becoming aggressive and attacking the incumbents in their home markets, the leaders in those markets will also try to make big moves. We have seen that happen in the business process outsourcing industry (such as Citigroup, IBM and GE expanding their Indian presence), and we will see it happening in IT too." Who moves first in these strategic wars before the other guy blinks will be decisive, Bhattacharya adds. "One option is to wait and get attacked. Or they [foreign companies] will look at defending themselves by launching their own attack." As competition for India's mobile market heats up, a shakeout -and possibly mergers is likely, but A.T. Kearney's believes this will not happen anytime soon. "The market is still in its early stages," he says. "Penetration is still low, and the cell phone has become accessible technology for everyone. It is perhaps the one device that has broken the caste/economic barrier with ease." predicts that eventually India's penetration rates could rise as high as those in the U.S., though it is hard to predict how long that might take. "The market will grow and rural penetration will continue for the next three or four years," he says. Once that market is saturated, "a shakeout is natural, but that will happen a few years out." Until then, though, there should be enough room for India's mobile services operators to grow without stepping on one another's toes. TARIFF STRUCTURE Prepaid Tariffs Reliance communication Prepaid Ready Cellular Card and Recharge Cards are available, all over the city at over retail outlets including 24-hour outlets. Reliance communication Ready Cellular Card and Recharge Cards are available, all over the city at over retail outlets including 24-hour outlets. 31

Reliance Communication Prepaid Regular 449 SUK Pulse Rate Price of Pack (Rs.) Free Airtime on Pack (Rs.) Incoming Calls (Rs.) 60 sec Rs.449 Nil Free while in home network Reliance GSM / Communication CDMA (10 Digit) LOCAL RATES (Rs./min) STD RATES (Rs./min) ISD (Rs./min) USA, Canada, Europe Rs.6.40 (Fixed Line), Australia, Singapore, Hong Kong, Thailand, Malaysia, Indonesia, New Zealand. Gulf, Europe (Mobile), SAARC countries, Africa & Rest of the world Rs.9.20 Rs.1.20 Rs.2.75 Rs.2.00 Rs.2.75 Landline / WLL Rs.2.40 Rs.2.75

Cuba, Sao Tome & Rs.40.00 Principe, Guinea Bissau, Diego Garcia, Nauru, Solomon Islands, Vanuatu, Cook Islands, Tuvalu, Tokelau, Norfolk Island, Sakhalin SMS (Rs.) Local National International Other Details Rs.1.20 Rs.2.00 Rs.5.00

*Rs 50 Local Reliance Communication -Reliance Communication Mobile tal per month for 6 months 32

* First month Reliance Communication -Reliance Communication credit wit 72hrs of activation & balance credit by 1st week of every month) *The SMS charge as applicable is per 160 characters * Validity- 24 months. POSTPAID Reliance Communication Postpaid allows you to choose from a variety of affordable talk plans, convenient payment options and host of rich features. So get set to enjoy a world of limitless possibilities! Reference Tarif Packages (RTP) ON TIME CHARGES Activation Charges Rs. 600 Membership Fee NA Security Deposit Rs. 1000 MONTHLY CHARGES (FIXED) Rs. 524 Bill plan Charge Rs. 425 Monthly Rental Rs. 99 Clip NA MONTHLY CHARGES (OPTIONAL) Clip Rs. 99 Reliance Communi cation Local Rates Rs. 1.99 STD RATES 50 200 Km 200 500 Km 500 + Km ISD USA, Canda, Europe (Fixed Rs. 7.20 Line), Austalia, Singapore, Hong Kong, Thailand, Malaysia, Indonesia, new Zealand Gulf, Europe (Mobile), SAARC Rs 9.99 Countries, Africa & Rest of the world Cuba, Sao tome & Principle, Rs. 40.00 Guinea Bissau, Diego Garcia, Nauru, Solomon Islands, Vanuatu, Cook Island, Tuvalu, Tokelau, Norfolk Island, Sakhalin

GSM / CDMA (10 Digit) Rs 1.99

Landline / WLL Rs 1.99

33

SMS Local Rs. 1.50 National Rs. 2.00 International Rs. 5.00 Value Added Services (Rs.) Rs. 3.00 Reliance Communication One Standard 150 ONE TIME CHARGES Activation Charges Membership Fee Rs 250 Rs 250 (Converts into security after 24 months) Security Deposit NA MONTHLY CHARGES (FIXED) Rs. 150 Bill Plan Charge Rs. 51 Monthly Rental Rs. 99 Clip NA MONTHLY CHARGES (OPTIONAL) Clip Rs. 50 Bissau, Diego Garcia, Nauru, Solomon Islands, Vanuatu, Cook Islands, Tuvalu, Tokelau, Norfolk Island, Sakhalin SMS Local Rs 1.50 National Rs 2.00 Intentional Rs. 5.00 VAS Rs. 3.00 This Bill Plan is also available under Advance Rental of Rs. 900 for 2 years. Local Pack Reliance Communication to other local mobiles (non Reliance Communication) At Rs 1 / min

Monthly rental Rs 25 per months/STD Pack

Airtel to other mobiles (non Reliance Communication) & fixed lines nos. at Rs 2/min.

Monthly rental Rs 75 per month/Special service offer for Reliance for Communication Reliance Telephone customers availing Communication

Mobile services

34

If you already have Reliance Communication Telephone service, you can buy a new Airtel Mobile connection under Reliance Communication One Standard 150 Plan. Benefits:

Non security deposit. No membership / activation fee Enjoy calls to your Airtel fixed line no. at just 60 P / min. Monthly rent of Rs 25 for reduced call rates to your Airtel fixed line has been waived off for 1 year.

For details, call us 516-12345 Advance Rental benefits (1year scheme) Pay an advance rent of Rs 999 and enjoy Reliance Communication One Standard 150 plan at Zero monthly rental for one year. Advance rental of Rs 999 gives you a rental discount of Rs 150 every month for the next 2 months. All other options and charges are as per the existing Reliance Communication One Standard 150 Plan. Reliance Communication one Standard 249 ONE TIME CHARGES Activation Charges Membership Fee Rs 250 Rs 250 (Converts into after 24 months) Security Deposit NA MONTHLY CHARGES (FIXED) Rs. 249 Bill Plan Charge Rs. 150 Monthly Rental Rs. 99 Clip NA MONTHLY CHARGES (OPTIONAL) Clip Rs. 50 Reliance GSM / Communi CDMA cation (10 Digit) LOCAL RATES Re. 1.00 Rs. 1.25 STD RATES 50-200Km Rs. 2.00 Rs. 2.40 200 500 Km Rs. 2.00 Rs. 2.40 500 + Km Rs. 2.00 Rs. 2.40

security

Landline / WLL Rs. 1.25 Rs. 2.40 Rs. 2.40 Rs. 2.40

35

ISD USA, Canda, Europe (Fixed Rs. 7.20 Line), Austalia, Singapore, Hong Kong, Thailand, Malaysia, Indonesia, new Zealand Gulf, Europe (Mobile), SAARC Rs 9.99 Countries, Africa & Rest of the world Cuba, Sao tome & Principle, Rs. 40.00 Guinea Bissau, Diego Garcia, Nauru, Solomon Islands, Vanuatu, Cook Island, Tuvalu, Tokelau, Norfolk Island, Sakhalin SMS Local Rs. 1.50 National Rs. 2.00 International Rs. 5.00 Value Added Services (Rs.) Rs. 3.00 You also enjoy 25 FREE local mobile to mobile SMS

36

Senior Citizen Plan ONE TIME CHARGES Activation Charges Membership Fee Security Deposit MONTHLY CHARGES (FIXED) Bill Plan Charge Monthly Rental Clip Cuba, Sao Tome & Principle, Guinea Bissau, Diego Garcia, Nauru, Solomon Islands, Vanuatu, Cook Islands, Tuvalu, Tokelau, Norfolk Island, Sakhalin SMS Local National International VAS With Senior Citizen Plan Rs. 250 Rs. 250 (Concerts into security deposit after 24 months) NA Rs. 150 Rs. 51 Rs. 99 NA

Rs. Rs. Rs. Rs.

1.50 2.00 5.00 3.00

You can take 3 Friends and Family numbers:

Reliance Communication to Reliance Communication no.) Rs. 0.5 / min. Reliance Communication no.) Rs 1.5 / min to Reliance Communication

(1local (1 STD

ISD calls to US / Canada / South East Asia / Australia / New Zealand) Rs. 9.99 / min

You also get FREE alert subscription worth Rs 30 / alert or 3 months on:

News Astrology Health Tips

The SMS charges as applicable is per 160 Characters PROMOTIONAL STRATEGY Reliance Communication to Touch Tomorrow with a new brand vision The Mobile promoted Reliance Communication cellular service will go in for repositioning of its brand image. The new brand

37

ethos is portrayed in two distinct fashions - the tag line "Touch Tomorrow", which underscores the leading theme for the new brand vision, followed by "The Good Life", which underscores a more caring, more customer centric organization. Aimed at reengineering its image as just simply a cellular service provider to an all out information communications services provider, Touch Tomorrow is meant to embrace the new generation of mobile communication services and the changing scope of customer needs and aspirations that come along with it The new communication is about a new dimension in the cellular category that goes beyond the Internet, SMS, roaming, IVRS, etc but which engulfs the whole gamut of wireless digital broadband services that will constitute tomorrows cellular services. The new campaign is in two phases - the first of which will communicate overall brand philosophy and the second products and services. According to Mr. Jagdish Kini, Chief Operating Officer, Mobile Limited, Karnataka "We are adopting a new brand- platform Touch Tomorrow - not only to reflect our corporate ethos but also business strategy". The new identity will have the logo in Red, Black and White colours along with lower case typography to convey warmth. Reliance Communication will incorporate the latest branding in all of its communication and will soon be going in for an enhanced promotional drive to establish the brand's presence. LIFE TIME PLAN PRE-PAID card users need not worry anymore about recharging their coupons every month. Company has launched a plan that allows users to take a pre-paid connection with lifetime validity for a one time payment of Rs. 999. Subscribers availing themselves of this scheme will also get full talk time for the recharge coupon they purchase and also have the option to buy Taiwanese manufactured Bird mobile handsets for as low as Rs. 1,399.

38

The

move

is

aimed

at

stopping

the

churn

in

the

pre-paid

subscriber base. Once a subscriber takes this plan, he will always be an Reliance Communication subscriber whether the mobile is being used or not. MARKET SITUATION At the time of launch The first mover in the market was Reliance Communication which launched its services in Delhi in Aug 1995 (Informal launch). Essar Cell phone followed by launching its services informally in Oct 95. At this point of time, the market was at a nascent stage, awareness level was low and both operators independently tried to spread awareness and educate the people Once the networks were commercially launched, it became a number game with a multitude of schemes being offered to woo customers Initially the cell phone was perceived as a status symbol and utility took a back seat The target segment in Delhi were corporate and the high income group. installed was for 1.5 lakh subscribers. The average capacity This coupled with the In the first two

steep license fee paid to DOT put pressure on the operators to break-even by rapidly expanding their markets. crashing. COMPETITIVE SITUATION Reliance Communication launched its services before Essar and skimmed the market picking up the bulk of the high usage premium clients. This is a very competitive industry with the two companies differentiating either on value-added services or price. Reliance Communication is perceived as the high quality provider and has a premium image. Essar, on the other hand, is perceived Reliance Communication as the lower end service provider. years, this led to a number of schemes being offered and prices

positions itself as the market leader on the basis of the number of subscribers. Essar is trying to counter this by emphasising on the reach of its network and the quality of its service. However,

39

Essar is somewhat not been very successful largely due to the inconsistency in advertising To promote themselves, both the players have been dependent on tactical advertising However, they have restrained from using comparative advertising Hoardings have been a very popular medium for carrying the advertisements Reliance Communication has also been advertising on television using the Telecom name. SALES DEPARTMENT AND STRATEGY A. Major Accounts (Direct Channel) Handles corporate (named and famed) accounts Forecasting of sales Mapping the accounts Providing after sales support to the subscribers. Maintaining call reports for records. Providing Feedback to the marketing department regarding the requirement of the market. B. IDC (indirect Channel) C. Handling distribution Maintaining records and level check of the channel partner Liaisoning between the channel partner and the company. Target achievement Training the executives of the channel

Distribution Support 1. Logistics Monitor handset and SIM card requirements of channel partners and co-ordinate with stores Settle areas of concerns such as incentive claims of channel partners

2.

Rental Provide cellular services (SIM cards) on rent. Provide cellular phones on rent Useful for people visiting Delhi for a short interval.

40

3 4 5.

Telesales Call customers and generate sales lead. Follow up with the customers, if they need any assistance Pass on the sales lead to the channel department. Audit Consultant to the Reliance Communication showrooms. Monitor Retail Locate shops to open retail counters. Monitor the retail counters. the operations at the Reliance Communication distribution outlets Organize training.

MARKET SEGMENTATION Segmentation is beneficial because of better predictability of the target consumer group, minimization of risk exposure, better ability to fine-tune a product / service to the requirement of target buyer and the resultant ease in designing a proper designing marketing mix strategy In this case segmentation is on the bade of income. In evaluating different market segments the company looks at two factors The overall attractiveness of the segments and the company's objectives & resources The present market for Cellular phones, pagers and conventional phones is as follows Premium Upper Lower X X X X X X Middle Upper X X X Lower X X Economy Upper Lower X -

Cellular Phones Pager Conventional

Phones X Market Segment Targeted TARGET MARKET SEGMENT Reliance Communication has targeted the premium and upper middle class. The rationale behind it is that only those segments should be targeted who value time and have the paying capacity.

41

It Is also planning to target the business tourists during their stay in the capital About 60% of the clientele are top executives of corporate houses. About 15% are foreign organisations and the rest are During the introduction professionals and small businessmen.

stage there was intense pressure to get consumers across to hook up with their brand, because getting them to switch brand loyalty later would be hard So far Reliance Communication marketers have been concentrating totally on the business executive class but now that the basic viable volumes has beer) built up and prices have declined to a certain extent they are planning to venture further a field. POSITIONING The product is sought to be positioned as a business efficiency tool. a lifestyle revolution and a status symbol The emphasis is to remove misconception that the cellphone is an expensive means of communication and drive home the point that the cellphone is actually a day-to-day utility PRODUCT POLICY AND PLANNING The product or service is the heart of the marketing mix. Without a product or a service customers' needs cannot be satisfied. The to basic be a product first promise all by Reliance time. It Communication has recognised is the mobility. Reliance Communication 's main marketing strategy is mover the

significance of making the first move-- because in the field of Communication & Information Technology changes occur at a tremendous pace. Effective product segmentation has to be carried on continuously because basic services can be and will be copied and in time become expected component of the product. Reliance Communication available. seeks to carry out this segmentation through

provision of new information services and making new facilities The product policy and planning depends on the stage 42

of the product life cycle.

At present the cellular phone market Since, the premium segment is

has reached the maturity stage. middle-middle class.

nearing saturation the company targeting the upper middle and In order to do so Reliance Communication is trying to optimise the price performance package by offering suitable "product bundling". This involves the selection of the suitable hardware (handset) and its software (its services.) with reasonable price in order to deliver maximum price performance to its customers. In addition, it offers free Airtime services and other concessions to make the prices and thus the product more attractive. 24 hours customer service. Only price doesn't serve as an effective differentiator, value added services become the effective differentiator. THE "VALUE ADDED SERVICES" PROVIDED FROM RELIANCE COMMUNICATION ARE:i) Voice Mail service This system is similar to the answering machine - if the user is not able to answer a call for some reason the caller can leave messages in the voice mail box which can be later retrieved by the user ii) Short Message Service The short message service is like a two-way pager. It gives an option of sending and receiving text messages directly from one mobile phone to another without the intervention of an operator. iii) Mobile Fax 1 Data Service This service helps the subscriber to send and receive Faxes, access E-mail, download computer files from other systems and remotely log on to another computer and surf the Internet. iv) Cash Card The cash card is a pre-paid and pre-activated card which allows the buyers to buy air time in advance. All it requires is the payment of an initial amount. This is a useful service for people It has also opened a

43

who travel to Delhi often and those who want to control the expenses on their calls. v) Caller ID Displays calling person's number. vi) Outgoing call restriction To prevent or limit outgoing calls, for example, in peak hours. Also possible to exclude one or several countries, or any geographical region, to permit only local calls, or to limit the outgoing calls to a listed number. viii) Call forward Incoming calls can be forwarded to another fixed or mobile phone. Besides these some other services provided by Reliance Communication are - Call conferencing, Call Broadcast et cetera. It is in the operators -Interest that they not only get many subscribers but also get them to use the mobile facility frequently. In the early stages getting increases to subscribe may be easier than getting them to talk since they will find it costlier to use the mobile phone as compared to a conventional phone [if is believed that initially cellphones would be used buy] viii) Roaming Facility Roaming facility is available while the subscriber is travelling. The billing is done in the home network (Delhi). Roaming facility is available manually* as well as semi-automatically. Once a subscriber is In any other city or country, where a GSM network is available, simply insert the SIM card of the local operator Into your handset and start talking. * ** Manual Roaming means a separate SIM card is provided for each city Semi automatic roaming means one card has the facility for different cities.

44

RELIANCE ORIENTATION.

COMMUNICATION

'S

MARKETING

Since this is a high-involvement expensive product, the service provider has to fully take care of the customers. a) b) c) d) e) They take personal responsibility to "get" the answer for any problem faced by the customer They anticipate customers' problems and take pro-active steps to prevent them They give answers to the questions & requests, quickly & efficiently. They have a positive tone & manner while interacting with customers. They end the interaction on a positive or a humorous note-making the last 30 seconds count. Reliance Communication realises that attracting people 'Is easy but converting them into loyal customers is hard, hence emphasis is on maintaining a 'Smiling and a Friendly Atmosphere' to please and retain the customer. PRICE AND PRICING POLICY RELIANCE COMMUNICATION market is price sensitive. has realised that the Indian Therefore it care of the has come up

with various innovative tariff schemes to take needs of different category of customers- Generally, the cellular services are more expensive than the land line based telephone services. a fee to the government for using airtime. This is due to the reason that the operating companies are required to pay

45

MARKETING STRATEGY ADOPTED BY RELIANCE COMMUNICATION Reliance has spent a considerable amount on advertising its mobile phone service, Reliance Communication. kiosks in and around Delhi. The objective behind designing a promotion campaign for the Reliance Communication services is to promote the brand awareness and to build brand preferences. It is trying to set up a thematic campaign to build stronger brand equity for Reliance Communication. Since the cellular phone category itself is too restricted, also the fact that a Cellular phone is a high involvement product, price doesn't qualify as an effective differentiator. The image of the service provider counts a great deal. Given the Cell phone category, it is the network efficiency and the quality of service that becomes important. What now the buyer is looking at is to get the optimum priceperformance differentiator Brand awareness is spread through the' campaigns and brand preference through brand stature. Reliance Communication 's campaign in the capital began with a series of 'teaser' hoardings across the city,' bearing just the company's name and without explaining what Reliance Communication was. In the next phase the campaign associated Reliance Communication with Cellular only thereafter was the Cellular connection brought up. Vans with Reliance Communication logos roamed the city, handing out brochures about the company and its services to all consumers. About 50,000 direct callers were sent out. well phone. entrenched in the Delhiitess When the name was mind, the Reliance package. This also serves as an effective Besides print advertising, the company had put up large no of hoardings and

Communication campaign began to focus on the utility of Cell In the first four months alone Airtei's advertisement spend exceeded Rs. 4 crores. 46

As of today the awareness level Is 60% unaided.

This implies

that if potential or knowledgeable consumers are asked to name a Cellular phone service provider that is on the top of his/her mind 60% of them would name Reliance Communication. it -is 100% (by giving clues and hints etc.). Brand strength of a product or the health of a brand is measured by the percentage score of the brand on the above aided and the unaided tests. The figures show that Reliance Communication is a healthy and a thriving brand. Every company has a goal, which might comprise a sales target and a game plan with due regard to Its competitor. its marketing strategy. Reliance Communication's campaign strategy is designed keeping in mind The tone, tenor and the stance of the visual ads are designed to convey the image of a market leader in terms of its market share. It tries to portray the image of being a "first mover every time" and that of a "market leader". The status of the product in terms of its life cycle has just reached the maturity stage in India. It is still on the rising part of the product life cycle curve in the maturity stage. The diagram on the left hand side shows the percentage of the users classified into heavy, medium and low categories. types of users. Reliance Communication, keeping in mind the importance of the customer retention, values its heavy users the most and constantly indulges in service innovation. neglected. The population which has just realised the importance of cellular phones has to be roped in. It is for this reason that the service Concerts provider offers a plethora of incentives and discounts. Communication in order to promote sales. chosen with economy in mind. 47 But, since heavy users comprise only 15 - 20% of the population the other segment cannot be The right hand side shows the revenue share earned from the three As for aided

like the "Freedom concert" are being organised by Reliance The media channel is The target segment is not very

concrete but, there is an attempt to focus on those who can afford. The print advertisements and hoarding are placed in those strategic areas which most likely to catch the attention of those who need a cellular phone. the target audience. Besides this, other promotional strategies that Reliance Communication has adopted are. (i) People who have booked Reliance Communication services have been treated to exclusive premiers of blockbuster movies. Reliance Communication has tied up with Lufthansa to offer customer bonus miles on the German airlines frequent flier's programs. (ii) There have been educational campaigns, image campaigns, pre launch advertisements, launch advertisements, congratulatory advertisements, promotional advertisements, attacking advertisements and tactical advertisements DISTRIBUTION Company The product promise (which might cost different 1 higher) is an important variable in determining

Franchisee Dealer Customer

Distributor Dealers

Customer

The- company whose operations are concentrated in and around Delhi. It 27 Franchisees and 15 Distributors- They also have 8 'instant access cash card counters- Each franchises or distributor can have any number of dealers under him as long as the person is approved and by the Reliance employ an Communication officer authority. by Each franchises has to invest Rupees Ten Lakhs. to obtain a franchise should recruited Reliance Communication . This person acts as an liaison between the 48

company and the franchises. The franchises can it any number of dealers as long as their territories do not has overlap. not been But very The For unfortunately Reliance Communication

successful in controlling territorial overlaps of dealers. franchises can carry out his 1 her own promotional strategy. contributes 25% of the money. receive the same commission. the liaison officer on a

this the company contributes 75% of the money and the franchise The dealers under the franchisee The franchises and the dealer day-to-day basis to Reliance

obtain the feedback from the customers and they are sent through Communication. The dealer has to invest Rupees. One Lakh as an initial investment. The dealer of Reliance Communication is not allowed to provide any other operators' service. Target set for distributors and the dealers is 100 -150 activations per month. Hence the dealers can also go for their own The promotions like banners and discounts on festivals etc.

dealer provides service promptly. The consumer on providing the bill of purchase for the handset and proof of residence has only to wait an hour before getting connected. The staff of the dealers and the franchisees are provided training by the Reliance Communication personnel. The complaints encountered by the franchisees and dealers are either handset being non-functional or the SIM Card not getting activated. Anything more complicated is referred to the main Reliance Communication office in Delhi. SERVICES OF RELIANCE COMMUNICATION Reliance Communication Prepaid Cell phone connection Go mobile with a Reliance Communication Prepaid cell mobile phone and control how much you spend with the best Prepaid cell phone tariff plan. Buy a special Prepaid mobile handset for your Reliance Communication Prepaid cell phone connection with our Prepaid mobile handset offers. To keep talking without any talk time or validity hassles make use of our flexible recharging options for your Reliance Communication Prepaid SIM cards: 49

Prepaid recharge cards, eTopUp and Direct Top-Up. Its easy to find a Prepaid recharge top up too: weve got Prepaid outlets everywhere, so that you can stay connected wherever you are. And thats not all you can also subscribe to our unique Prepaid cell phone services and Prepaid mobile phone offers and make the most of your Reliance Communication Prepaid SIM cards in India. Prepaid mobile phone tariff plan Reach out to the world with a Reliance Communication Prepaid SIM card without worrying about mobile Prepaid recharge minutes and Prepaid phone rates. Select a Prepaid mobile phone tariff plan that works for you. Choose your Prepaid mobile phone tariff plan Prepaid phone services Subscribe to Reliance Communications unique Prepaid cell phone services and make the most of your Reliance Communication mobile phone. For our Prepaid cellular services, click here Bonus Cards Charge your Prepaid phone and enjoy slashed Prepaid phone rates with Bonus Cards for your Reliance Communication Prepaid cell phone tariff plans. Read more Reliance Communication Postpaid Go Reliance Communication with a new Reliance Communication Postpaid connection and talk without worrying about your bill. Become a Reliance Communication Postpaid user with a Postpaid mobile every handset penny for your spend SIM by by making the use of Reliance Reliance Communications mobile handset offers. Make the most out of you choosing right Communication Postpaid talk plan. And if you want to know which plan suits your usage best, ask us well be happy to help. Whats more you can also subscribe to our Reliance Communication Postpaid offers and reduce expenses even more. Take a look at the various services we have for you and use your phone for many more than just making calls. And when it comes to paying you bill thats easy too! Weve got a wide variety of 50

Reliance Communication Postpaid bill payment options. Choose the payment option that works best for you. If you need help, come to us well be happy to help! Sounds good? Check out all the benefits that come along with a Reliance Communication Postpaid SIM card, and itll sound even better! World Calling Cards Save up to 30% on your ISD & STD calls with World Calling Card from Reliance Communication for your Reliance Communication mobile phones. World Calling Card from Reliance Communication is a Prepaid long distance calling card that you can use with your Reliance Communication Prepaid and Postpaid mobile phones to make ISD & STD calls. Thats right you dont need individual ISD calling cards and STD calling cards anymore. With the help of this Prepaid World Calling Card, you can keep a tab on your long-distance call expenses. Plus no security deposit. Its easy to buy World Calling Cards in India. World Calling Cards are available at your nearest Reliance Communication Store, Reliance Communication Mini Store or at any shop that displays the World Calling Card sign. World Calling Card rates Make the most of your Reliance Communication mobile phone while making long distance calls with the special World Calling Card rates meant to help you save money. Check out World Calling Card rates International Prepaid calling cards Scratch the silver foil on the cell phone calling card for India to get your secret 12-digit PIN. Dial the toll free number on the back or 50118 / 50218 and enter the PIN from your Prepaid World Calling Card. To make an STD call with your Prepaid mobile phone card, dial 0 followed by the STD code and then the phone number.

Gulf Calling Card

51

Now you can call the Gulf at the lowest possible calling card rates with the best Prepaid phone card for the Gulf. Reliance Communication Home Calling Card Heres a way you can save on your international roaming bill while calling home use the Prepaid Home Calling Cards from Reliance Communication to call to India to anywhere else in the world while travelling abroad. Reliance Communication Home Calling Card is a Prepaid calling card that allows you to make calls from landlines, PCOs & mobile phones from over 100 countries. And helps you save up to 90% as compared to International Roaming charges! So talk more, spend less and always stay connected. Home Calling Card rates Make the most of your Reliance Communication Prepaid & Postpaid cell phone while making long distance calls with the unique Home Calling Card rates and save money. Check out the Home Calling Card rates Need help with your Reliance Communication Prepaid Home Calling Card for India? For dialing instructions, country/city codes information, access number information, card expiration date or anything else, just call Reliance Communication Care on 111 (toll free). Mumbai subscribers should call 50119 (toll free) Reliance Communication PCO Want to start making some money? Install a Reliance Communication PCO in your house or shop, and start earning today with fixed cellular terminals. Its easy to install, maintain and use and provides uninterrupted service. It doesnt even take up that much space! Read more Reliance Communication Handy phone Introducing the landline thats loaded with all the features of a cell phone including low call rates. And Reliance Communication Handy phone arent that expensive either. You can make one yours for as little as Rs 1999. 52

Key features: Calls to any 3 Reliance Communication numbers @ 20p / min Calls to all local mobile phones @ 40p / min Free local & STD calls every month

53

CHAPTER - 2

RESEARCH METHODOLOGY

54

RESEARCH METHODOLOGY a) Title: Customer Satisfaction Survey on Reliance Communication i. Title Justification Keeping in mind the above considerations, the purpose of this project report is to enable the marketer to understand customers needs and maximise wealth generation taking Reliance communication as a special case of mobile services i.e. CDMA technology and GSM technology is a tool surrounded with many misconceptions and hence a marketer has to create awareness. The report would highlight the problems within the industry regarding the mobile service plan of the various Mobile vendors. b. Objective Objective One: To assess the nature of Reliance communication marketing, penetration strategy in view of customer satisfaction; Objective Two: To analyze the customer satisfaction behavior and customer delight behavior of the Reliance communication c. Scope of the Study 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 by 2010. In April 2008, India overtook the US as the second largest wireless influence market, of and as a pointer to the increasing Indians global have Indian telecom companies, seven

featured in the list of the world's 100 most influential telecom leaders, compiled by Global Telecoms Business, an industry magazine. According to CRISIL Research estimates, eight infrastructure sectors, which include the telecom sector, are expected to draw more than US$ 345.28 billion investment in India by 2012. satisfaction to sustain the business. d. Significance of the Study And the growing telecommunication industry required lot of customer

55

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. Fixed line capex is projected to be US$ 3.2 billion, and mobile capex is likely to touch US$ 9.4 billion. Further, according to a report by Gartner Inc., India's mobile subscriber base is projected to exceed 737 million connections by 2012 growing at a compound annual growth rate (CAGR) of 21 per cent and India is likely to remain the world's second largest wireless market after China in terms of mobile connections. The overall cellular services revenue in India is projected to grow at a CAGR of 18 per cent from 2008-2012 to exceed US$ 37 billion. Cellular market penetration will rise to 60.7 per cent from 19.8 per cent in 2007. GSM companies added over 6.3 million new customers in June 2008, (excluding the GSM subscriber base of Reliance Telecom) crossing the 212 million mark, with a growth of 3.07 per cent over May 2008, according to the Cellular Operators' Association of India (COAI). e. Research Design Data has been collected through one to one interaction and discussion with various people who are involved in the business of mobile services as Sales manager, mobile services, Marketing Manager Customers and others. Newspapers, Internet, Magazines and Journals would provide ample material about latest trends and practices in insurance industry. Reliance communication organizes various outdoor activities to boost its business and brand. Interaction with customers during such outdoor activities would enable to understand the success ratio of such kind of outdoor activities. Various products of the company would be discussed with respect to their benefits and advantages. Various insurance players would be compared with respect to their market share and products that they offer.

56

Primary Secondary

Data

has

been

collected annual

through reports of

discussions the

and

observation of various people involved in the business whereas Data through company, newspaper, magazines, journals and internet. f. Sampling Methodology i. ii. iii. iv. Chosen for comparison of customer satisfaction survey of Reliance Communication Sampling chosen with the Random method Sampling Area would be Delhi and NCR Sample Size: 100 Only Delhi & NCR region covered for this report because of not availability of time and resource. Also for sales and mobile services company are not sharing more internal information either on internet or ready to give.

g. Limitation

57

FACTS AND FINDINGS

58

FACTS AND FINDINGS 1 What is your age? (a) Under 18 (c) 31-50 Age of the customer 0-18 18-30 31-50 Over 50 2 Are you: (a) Male (b) Female (b) 18-30 (c) Over 50 Responses 17% 47% 22% 14%

Male Female

50% 50%

59

What is your profession? (a) Serviceman (c) Student (e) Farmer (b) Business Man (d) House Wife (f) Others Responses 30% 20% 25% 10% 0% 15%

Occupation of respondent Serviceman Business Man Student House wife/Girls Farmer Others

Do you consider the Reliance Communication has a (a) Yes (b) No

successful product?

Reliance communication successful product Yes No Responses 78% 22%

60

Does the Reliance Communication meet your needs better service on the market? (b) No (a) Yes

than other mobile

Reliance Communication fulfil the needs Yes No Responses 85% 15%

Do you think the Reliance Communication is a high quality product relative to other mobile phones service provider? (a) Yes (b) No

Quality Product Yes No

Responses 66% 34%

61

Is the Reliance Communication unique and innovative? (a) Yes (b) No

Reliance Communication uniqueness Yes NO Responses 72% 28%

8.

Does the Reliance Communication solve problems you had with your last mobile service Provider Company and allow you do carry out takes your last phone could not? (a) Yes Reliance Communication solve problems Yes NO Responses 68% 32% (b) No

62

Has the Reliance Communication reduced your mobile phone (a) Yes (b) No

costs?

Reliance Communication reduced your mobile phone costs Yes NO 10 Responses 42% 58%

What is your primary use for the Reliance Communication? (a) Phone calls (c) Email (e) Camera (b) Internet browsing (d) Music (f) Other Responses 16% 32% 23% 13% 7% 9%

Primary use for the Reliance Communication Phone Calls Internet Browsing E mail Music Camera Other

63

11

When buying the Reliance Communication what factor most influenced your decision? (a) Price (b) Reliance Communication brand (c) Available on the various call package (d) Products features (e) Other

Factor most influenced your decision Price Reliance Communication Brand Available with Various package Product features Others

Responses 12% 43% 4% 35% 6%

64

DATA ANALYSIS AND INTERPRETATION

65

DATA ANALYSIS AND INTERPRETATION

Interpretation: Over the 47% of the people of 100 people which is our sample size comes from age group of 18-30 while 22% customer has age group of 31-50 it is significant approach for this kind of survey because Reliance Communication targeting this age group more and more because this age group is technological savvy and has a good spending power of gadgets i.e. Reliance Communication Reliance Communication

66

Interpretation: It is known form the graph in our survey of 100 people , 50% Male and 50 % female contributed to give balance figure that what impact does it mean for Female and male.

67

Occupation of the respondents

15% 0% 10% 30% s ervic em an businessm an s tudent hous ewife 25% 20% farm er others

Interpretation: The occupation of the respondents was very much fluctuating. This is done so as to gain more knowledge about the different strata of the society. Also from the result clearly mentioned that 30 % people are service man including working in Private firm, MNC or multinational organization. While 25 % are student because we want to know that how new generation is aware about the impact of film on youth apart from this 10 % respondents is house wife why house wife a significant contribution purchasing of the product.

68

Interpretation:

Do

you

think

Reliance

Communication

is

successful product for end user this is significant contribution towards the study of the Reliance Communication new launched Reliance Communication new offer in the market where 78% people suggested that yes they think Reliance Communication has a successful product while 22% still believe no Reliance Communication is not made for the Indian customer because of the price and feature which is not supported to the Reliance Communication many features.

69

Interpretation: Meet your needs which one segment tells about the Indian mobile service industry growth while asking this question to the 100 customer 85% Reliance Communication using customer suggested that yes they are very happy and Reliance Communication meet all there expectation while they are using Reliance Communication also 15% customer suggested that no many feature is still not working so Reliance Communication is not worth for him.

70

Interpretation: As shown in the graph 66% people from our sample size i.e. 100 people still think Reliance Communication is a quality product and it is worth for buying while 34 % people still think out of 100 people it is not to worth of buying reliance communication but defiantly has a own unique feature but it is no an unique quality product.

71

Interpretation: According to our survey result 72% people think that yes Reliance Communication has a unique and very innovative product form the Reliance Communication because it has many unique feature which is generally not found with any company now facing with the customer who is not happy with the kind of service or feature that Reliance Communication distinctive uniqueness as compare to the other phone. Reliance Communication has in built and so deny that it has not any

72

Interpretation: This question targeting only those customer who buying Reliance Communication product Communication s in this phone. Now focus on the data finding by the survey result 68% customer says yes they purchase Reliance Communication because of the many features like internet connectivity which is solving business problem and the daily problem of the customer which is not available in the last phone of the customer. due to of their features and the and the new facilities that provided by the Reliance

73

Interpretation: To taking the market advantage by Reliance Communication we try to ask customer, is there any cost advantage they will get after purchasing Reliance Communication because most of the Indian customer is very price sensitive. 55% customer suggested that Reliance Communication reduced their cost because of the attachment plan with Airtel and Vodafone. While 48% people which is highly rich people suggested yes this phone is reduced phone expenses because of the feature and the other option is available in the phone.

74

Interpretation: Why people buying Reliance Communication this question will more focus on the primary uses of the people how it will affect the customer buying behavior of the people. 32% people out of 100 people suggested that they purchased Reliance Communication behavior also. because the wanted to access their internet Music and phone calls influenced people facility while checking internet influenced 23% customer buying purchasing behavior by 13% and 16% respectively.

75

Interpretation: Factor most influenced for purchasing of the Reliance Communication gives and insight to know about the customer perceive value through which company may cover more space in the market. Reliance Communication brand is the most influential Reliance Reliance thing for the customer of to the purchasing brand name the Reliance of the Communication while 43% people suggested that they go for Communication Communication. because 35% people purchase Reliance

Communication because of the product features that available with the Reliance Communication. Price is only influential by the 12% because as compare to the other nation cost of the Reliance Communication, Reliance Communication launched with the premium price of the phone

76

CONCLUSION

77

CONCLUSION With its target customer clearly defined, Reliance had to ensure its offerings were tailored to suit the group's preferences. The last insight, for instance, was a potential problem. Frequent handset changes fits in better with GSM technology. In CDMA technology (which Tata Teleservices and, therefore, Reliance offers), the SIM card is usually embedded in the phone. Which means a handset upgrade involves an entirely new connection, complete with new number. Reliance Mobile worked around it by introducing CDMA phones with RUIM (removable user identity module) technology, similar to GSM phones, offering users the convenience of upgrading their phones without having to change their number or re-entering their address book. Then, it was important to be pocket-friendly -young customers aren't likely to have huge disposable incomes, although they will demand cutting-edge technology and style. Reliance's handsets are therefore named and priced to appeal to its target audience -- Kewl retails at Rs 3,999, while vBling sells for Rs 2,500, which is about half the price at which competitors will sell similar handsets. "We looked at a combination of looks, features and more affordable handsets as the youth need style but also value Outrageous, flamboyant, unconventional maverick entrepreneur Richard Branson is all that, and more. So it really wasn't too surprising when the billionaire chairman and founder of the Reliance group decided to fling him down from the roof of a Mumbai five-star hotel last month. The bungee jump was his way of launching the Reliance Mobile brand in India. There is no point in Reliance doing anything, unless we can make a difference".

78

79

RECOMMENDATION

80

RECOMMENDATION Some of the recommendation for the Reliance communication would be following here. Reliance communication need to focus more in to middle segment of the customer because they are very price sensitive and they ready to take an advantage of this. Reliance communication need to focus more in to connectivity problem because customer satisfaction depends upon this. Reliance communication need to focus cheap availability of the Data Card which is one of the Internet provided by the company. Reliance communication need to change there customer segmentation like Tata Indicom which focus more towards luxury segment like Blackberry roll out. Customer Satisfaction is more or less depends upon what customer perceive with the brand and Reliance communication is the well discussed brand among the customer which is good sign for the company reliance can keep continue with this strategy.

81

BIBLIOGRAPHY

82

BIBLIOGRAPHY a) Books Referred to: 1. 2. Kotler Philip, "Marketing Management", Prentice Hall of Sirkin, Harold L; James W. Hemerling, and Arindam K. (2008-06-11). GLOBALITY: Competing with India, 2004. Bhattacharya

Everyone from Everywhere for Everything. New York: Business Plus, 304. ISBN 0446178292. b) Journals referred to (1) Harvard Business Review (2) Business Today c) Magazines referred to Insured India. d) Internet referred to: i. Sites (1) www.reliancelifeinsurace.com (2) www.IRDA.in ii. Search Engines www.google.co.in

83

ANNEXURE

84

QUESTIONNAIRE 1 What is your age? (a) Under 18 (c) 31-50 2 Are you: (a) Male 3 What is your profession? (a) Serviceman (c) Student (e) Farmer 4 (b) Business Man (d) House Wife (f) Others (b) Female (b) 18-30 (c) Over 50

Do you consider the Reliance Communication has a (a) Yes (b) No

successful product?

Does the Reliance Communication meet your needs better service on the market? (b) No (a) Yes

than other mobile

Do you think the Reliance Communication is a high quality product relative to other mobile phones service provider? (a) Yes 7 (b) No

Is the Reliance Communication unique and innovative? (a) Yes (b) No

8.

Does the Reliance Communication solve problems you had with your last mobile service Provider Company and allow you do carry out takes your last phone could not? (a) Yes 9 (b) No

Has the Reliance Communication reduced your mobile phone

85

costs? (a) Yes 10 (b) No

What is your primary use for the Reliance Communication? (a) Phone calls (c) Email (e) Camera (b) Internet browsing (d) Music (f) Other

11

When buying the Reliance Communication what factor most influenced your decision? (a) Price (b) Reliance Communication brand (c) Available on the various call package (d) Products features (e) Other

86