CHAPTER 1

INDIAN TELECOM SECTOR

1.0 Introduction

India's telecommunication sector is growing very fast. As per the report of Telecom
Regulatory Authority of India (TRAI), total subscription now stands at 1167.96 million
as on March 2017. Out of this, 705.50 million connections were in rural and tribal area,
whereas 462.46 million in the urban area. As there is tough competition in telecom,
domestic ventures are providing the lowest call tariffs with strong network. If we
consider internet user-base, it is on third position all over the world. Indian telecom
industry moved upward after new Indian economy policy 1991. It raised new
opportunities for foreign investors to invest in the Indian telecom market. After 2001,
telecom authorities have issued licenses to private companies as work very liberal.
Some of the private companies such as Bharti Airtel, Idea Cellular Limited and
Vodafone Essar Limited are performing very well in Indian telecom market since two
decades.

Further, the government has increased the foreign stake by 74% and reduced license
fee. Now companies need to focus on proper market survey and attractive plans. The
growth of the internet industry is very fast. According to detail published by Telecom
Regulatory Authority of India, as on March 2017, India has 396.35 million internet
connections.

The journey of telecom was the telegram which introduced by the Indian postal
department. It was not working as an autonomous body at initial stage. It just occupied
a small space in the department of public work. The first electric telegraph line was
started by the British East India Company in 1850. The Oriental Telephone
Company Limited (OTCL) and the Anglo-Indian Telephone Company Limited
(AITCL) were two companies those approached the government of India. In 1881,
Oriental Telephony Company of Britain got a license to initiate for telephone exchange
in cities. In India, first telephone exchange was established in West Bengal in 1882,
which had a total of 94 users. It was a starting of telecom journey.

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Today, the telephony industry is led by private ventures and most of them launched
within a decade. Telecom sector is directed by the ministry of communication and
information technology and the department of telecommunication. Almost every
telecom company has gained advance network spectrum.

1.1 Growth of Indian Telecom Sector

As per new Indian economic policy 1991, doors were opened for private investors,
which changed the telecom sector very fast. As per the new Indian economic policy
1991, doors were opened for private investors, which changed the telecom sector very
fast. Many private ventures like Idea, Hutch and Airtel, etc. entered in the market. They
not only earned a high profit, but also created a lot of job opportunities in the market.
Later on, the price war started among the companies which changed policies and
practices of telecom sector completely. Now companies are concentrating on value-
added services like SMS pack, Internet-data pack, roaming free recharge, etc. There
were two types of SIM at introducing stage named CDMA (Code Division Multiple
Access) and GSM (Global System for Mobile) but by the time the difference between
these two techniques was removed. In the last two years while Reliance launched Jio,
change the definition of the telecom market. It is the stage where companies were even
not able to recover their cost because Jio was launched on lowest to lowest cost. When
it was introduced, it was free for 90 days. Companies faced high-level competition and
need to change their strategies with immediate effect. Meanwhile, many new telecom
companies entered the market like Videocon, Virgin, etc. but Jio affected all. It
compelled all telecom service providers to thing, again and again, to sustain in the
market.

The Indian telecom market is one of the highest challenged and innovative markets in
the world. More than 12 crores of mobile connections are sold every month. Wireless
telephones are growing, whereas wire-based phones were decreasing. The wireless
share 97% of the telephones of the total phones. 78% of telephone services are provided
by the private sector.

Mobile number portability is a new scheme which has raised a huge competition among
the companies to sustain their existing customers. Now companies not only focus on
new customers, but also take care of existing subscribers.

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 Table 1.1: Telecom Sector at a Glance

Years Description
1984 Entry of private ventures in telecom related material
1986 Startup Mahanagar Telephone Nigam Limited and Videsh Sanchar
Nigam Ltd.
1988 To set up telecom authority
1991 Privatization and Liberalization in new economic policy
1993 Announced national telecom policy.
1997 Telecom Regulatory Authority of India (TRAI) was established.
2000 Publicly owned BSNL established
2000 Long Distance based services opened to competition
2000 Launched Code Division Multiple Access technology
2000 Reduction of license fee
2002 Privatization of VSNL
2002 Launched mobile service by BSNL
2003 Calling party pay was implemented
2004 Broadband technology was launched
2005 Investment from abroad increased upto74%.
2006 Proposed Number Portability Scheme (NPS)
2008 Government issued license to five new players.
2009 Airtel became the first company who crossed 100 million users
2010 Allotment of 3G spectrum to major telecom companies.
2016 Started with Mobile Number Portability Scheme
2017 Introduced Virtual Network Operators
2018 Introduced new national telecom policy
2018 Introduced National Digital Communications Policy

The journey of telecom sector introduced in the year of 1986 when MTNL started in the
telecom ministry in India. The new Indian economy policy gave a boost to telecom
sector when the doors opened for foreign ventures. In 1997, TRAI was established to
monitor and control in telecommunication field. Later on, new technology introduced
time to time. The next drastically change was to introduce mobile number portability. In
2018, the government introduced a new telecom policy to raise turnover, foreign
investment and employment opportunities.

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1.1.1 Structure of Telecom Industry in India
Departments under Government

 Planning department takes care of spectrum allotment.

 Department of Telecommunication (DoT) helps the government in allotment of
licenses.
 Department of telecom regulatory helps in executing the policies.

Independent Bodies

 Telecom Regulatory Authority of India (TRAI)

 Telecom Disputes Settlement and Appellats Tribunal (TDSAT)

1.1.2 Telecom Regulatory Authority of India (TRAI)

Regulation of telecom was introduced for the purpose of supervision in telecom sector,
which included services, tariff plans, commitment to customers, etc. It was established
on 20th February 1997 and presently working under the chairmanship of Mr. R.S.
Sharma whereas Mr. Ravi Shankar Parsad is the Telecom Minister. It is working to
provide a fair and transparent environment in the telecom sector. The area of TRAI
includes: settlement of tariffs, network issues, service betterment, dish services and
mobile number portability scheme. The main achievement of this regulation is
introduced when an important change in telecom sector regarding call drops. Now
onwards company has to compensate with rupee one (maximum three calls in a day) if
call drop exists there.

Some basic features of TRAI:

 It is applicable in all over India.

 It is an autonomous body with a common seal and work as per direction of

telecom provision. It plans to implement new telecom policy 2018 with an
objective to create 45 lakh jobs by 2023. Along with connections, it is working
for broadband also with a connectivity objective up to 50 megabits per second.

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  Telecom sector is trying to solve call drop problem on urgent basis. The Even
Prime Minister is also serious towards this problem and monitoring at personal
level. As a statement given by the telecom minister “The cause of call drops is
the people who hamper installation of mobile towers due to fear of radiation”.

Table 1.2: Indian Telecom Market Structure as of November 2017

Market Leaders Reliance Jio, Bharti Airtel
Market Challengers Vodafone Essar Limited, Idea Cellular Limited
Market Follower Tata Teleservices, Bharat Sanchar Nigam Limited,
Mahanagar Telephone Nigam Limited.

As per table 1.2, Airtel and Reliance are the market leaders as per revenue generation.
Vodafone Essar and Idea Cellular are market challengers. Tata services, BSNL and
MTNL are market followers.

1.1.3 Brief Study of Selected Indian Telecom Companies

Bharti Airtel

Bharti Airtel is a big venture which provides mobile connections and broadband
facility. Airtel (GSM) has approx. 354.54 million connections as on November 2017
with a 25.4% market share and covered 14 circles. It was introduced on July 1995. Mr.
Sunil Kumar Bharti is the head of the group. As Airtel acquired “Telenor” and Reliance
introduced Jio, other companies like Vodafone and Idea reported declines in this metric.
Approximately 1.50 million customers were declined of Tata tele-services. Further,
Airtel telecom got approvals from the financial authorities and the Unique Identification
Authority of India (UIDAI) for enrollment of customers for their payments through
bank named “Airtel Payment Bank” which started its functioning in February 2017.
One month later the RBI had asked the bank to stop customer‟s registration due to
opening of accounts for customers without their knowledge. The penalty was imposed
with RBI scrutinized documents and found guilty. UIDAI suspended Bharti Airtel and
Airtel payments, bank in December 2017.

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Airtel group has been structured with four types of business named mobile, tele-media,
enterprise and digital tv and also started operating 21 countries with a covering of 1.95
billion people. In December 2009, the company bought foreign based venture Zain
services for $11.08 billion. Further, it has announced to launch the “EASSY” cable
system which covers around 9,000 kilometers (proposed) undersea cable connecting
from Africa to Europe. Further on, it tie-up with an Ericsson company to come-out with
advanced speed based technology 5G.

Vodafone Essar

Vodafone is British based multinational telecommunication group with headquarters in

London. As per the report of November 2017, 178 million users are using Vodafone
connections. Vodafone has its own network in 25 countries and partner network in 47
countries. As per the report of the London stock market, the rank of Vodafone as a
venture is 10th, which is a sign of growth and achievement at financial term. It launched
3G network in 2011 and first city who receive 3G services is Lucknow (Uttar Pardesh).
In 2012, the company launched a new international roaming package with a nominal
charge.

Idea Cellular

Idea Cellular belongs to Aditya Birla group, offering 2G, 3G and 4G mobile services
since 1995. As per the report published on 31st December 2017, Idea is holding 16.74 %
market share with a growth rate of 1.25% in the telecom sector. Idea has 195 million
users as of November 2017 (24, 31,472 users increased in the month of December,
2017). It has provided GSM licenses in their circles since 2003.
On 21st May 2010, it bought 3G spectrums in 61 million for 12 circles, later on
launching 4G LTE services in more than 300 cities of North India.

Tata Tele-services

Tata Teleservices has been owned by the Tata group which has been working since
November 2008 and operates under the brand name “Tata DoCoMo”. In 2011, all users
of Tata group migrated to the Docomo including – Indicom (CDMA), Tata Docomo
(GSM), Walky, INTERNET. With effect from July 2014, it was decided not to provide

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postpaid services all over the country. Tata paid 600 million for 3G spectrum in 10
circles. Tata Services are very popular in semi-urban and rural area. Bollywood actor
Ranbir Kapoor was the brand ambassador for North India whereas South Indian
superstar Ram Charan Teja was for south. Its main achievement that Tata was the first
company in the private sector who launched 3G services in India. In 2017, Bharti Airtel
announced to acquire Tata DoCoMo as cash free and debt free. Before merging, Tata
group had a debt of Rs. 40,000 crores which had been cleared by the group. Tata
Teleservices worked as a joint venture with Virgin group which is associated with
Richard Branson group. As per the report of the Global Brand Trust, 2013, Tata was in
65th position among India's most trusted brands.

Reliance Jio

India‟s telecom industry is facing an intense competition in current scenario due to

entry of Reliance Jio Infocomm Limited (Mukesh Dharubhai Ambani Group). It creates
through cut competition in the telecom market. It introduced on 5th September, 2016 at
Mumbai with a free package of voice call for first six months, than cut-rate data
services provided by it and increased the expectation of customers in the telecom sector.
It offers 4G instead of 2G and 3G, which is a technical challenge for other operators. It
announced that it acquired 17 million users in the first month, which is fastest growth.
On 21th July 2017 introduced its first affordable 4G with features, powered by keys,
named as Jio phone. The price announced for it is ₹0 with a refundable security of
₹1500 which can be withdrawn back from the users after three years. This phone was
released for beta users on 15 August 2017 and pre-booking for regular users started
after a week. The company has fixed a network of around 260,000 km of cables (fiber)
in the country, will be partnering with local cable operators at city level. The guy is a
venture of Reliance Infocomm Limited who creates digital technology, offering
broadband services with reasonable price, smart devices and other mobile related
facilities.

1.1.4 Foreign Direct Investment in Indian Telecommunication Sector

Today, as discussed telecommunication sector is the fastest growing sector in India over
the last decade. It is due to new Indian economy policy 1991 which attract telecom

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companies to invest in Indian telecom market. It raised competition among domestic
and foreign ventures. At the initial stage, foreign contribution was allowed up to 26%
means a 74 % investment must be from domestic market. Later on, foreign investment
raised from 74% to 100% in this sector. The FDI flow in the telecom sector is 89235.75
million over the period of 2016.

Table 1.3 Foreign Direct Investments in India

Total Total Inflow in

% of FDI inflows
Investment in Telecommunication Industry
Periods in telecom area
India (Rs. in Rs. in Ten Growth rate
over total FDI
Ten million) million in percent

2012-13 89153.26 2691.25 -

3.15
93263.56 2252.52
2013-14 -20.67 2.19
(103.26) (79.13)
14566.68 5077.26
2014-15 85.24 3.27
(158.00) (184.34)
202502.66 11684.81
2015-16 324.68 5.77
(224.62) (424.68)
172570.14 12269.66
2016-17 345.93 7.11
(191.42) (445.93)
162665.79 7542.04
2017-18 174.11 8.64
(180.43) (274.11)
248754.05 9011.53
2018-19 227.52 9.62
(275.92) (327.52)

Foreign telecom investors are performing very well in Indian telecom market from last
one decade. It was initially allowed with 74%, but by the recent decision, it hike 74% to
100%. In 2012-13, FDI flow was 89153.26 (Rs. in Ten million) whereas in 2018-19 it is
248754.05 (Rs. in Ten million) with a growth rate of 227 %, which is tremendous in the
telecom sector.

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1.2 Marketing

Marketing is a broad concept including the action of market research, promoting and
advertising, selling products or services and after sale services. It is a process which
starts with the customers need and over with customer satisfaction. According to Philip
Kotler “Marketing is all about satisfying customer/consumer need through an exchange
process”. The marketing starts with market survey and over with delivering to the final
customer. It included: market research (What, When and Why customers need a
product), market targeting and market segmentation (selection of the types of
customer), decided logistic channel, price and promotion based practices to satisfy
customer satisfaction. Further marketing is not only to provide the product or service to
customers, but to ensure whether they were satisfied with delivering products or not.

Marketing is a core function within an organization as it is responsible to serve

customers to fulfill their needs and ensuring the delivery. Marketing is a process which
starts with market information to know what a customer wants. Further, marketing
includes dividing the market on the basis of geographical/demographical features,
forecasting of market, the study of consumer behavior, market survey, marketing mix,
and customer relationship management, mode of distribution and after sale services.

1.2.1 Marketing Practices

Marketing practices encompassed selection and analysis of the target market, creating
and planning for an appropriate marketing mix with a goal to satisfy the last user. It
describes as marketing philosophies which helps a company to find out customer needs
and fulfil them as they required as the primary factor. Secondly, it provides products or
services at lower cost in the competitive era (Philip Kotler, 2003; H. March, 2004).
Dann and Dann (2011) state that marketing practices were actions that require some
level of interactivity to enable implementation. In other words, some marketing
concepts were used to work out for customer‟s satisfaction. It can be described as the
present status of the potential market and availability of resources in upcoming era.
Marketing practices included customer at first and also decided that how to sell goods
to them. Effective marketing practices describe high level plans and operations. It‟s
mainly based on delegation of authorities and responsibilities and secondly expansion
of qualified personnel.

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1.2.2 Marketing Mix

Marketing mix includes product, price, place, promotion, process, people and physical
evidence. In other words, it is a set of the 7Ps of marketing.

Product

The product aspects of dealing with the actual goods or services which satisfy the end
needs. A product can be tangible or intangible. In case of a telecom service, it is
intangible. It is basically a SIM used for communicating through a mobile handset.
Further, it includes its core benefits like clarity in voice, quality of network coverage,
easy to get customer care, the proper response from customer helpline, activation of
additional services, recharge/bill payment, facility and deactivation of additional
services.

Pricing

This refers to what is exchanged for the product/service. In case of telecom service,
price is for getting talk time, SMS facility, etc. by the users. There is a price war among
the telecom companies. Companies decide their price according to competitors.

Premium Pricing: It is suitable for new venture where price will be always higher as
compared to other companies in the same segment. This price strategy is not applicable
in current market scenario.

Penetration pricing: Under these practices, companies were offering their goods were
serviced at the lowest price as compared to competitors. It is because the company
wants to raise their market share on priority basis. After achieving a strong market
penetration, they raised their price to cover their backlog.

Economical pricing: Idea cellular limited followed economy pricing strategy which is
based on lowest price. A Company which, is financially sound can do it. It just creates
trouble for small companies.

Price skimming: It is a short term policy used when there is a monopoly in the market.
Until privatization of telecom sector, Bharat Sanchar Nigam Limited got skim. Their
call charges are very high and enjoyed a high turnover.

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Psychological pricing: It is a psychology based strategy which is adopted by most of
the telecom companies. They offer attractive price of their service like Rs. 199-, Rs.
299/- etc.

Bundle pricing: Companies adopt bundling price strategy to sell multiple products
together for a lower price. This method is very effective when some of the products are
not selling separately. Telecom companies are offering various facilities together like
almost every telecom company is providing internet-pack, SMS pack with call rates.

Place

It refers to the channel of distribution used to sell a product. Telecom sector sells their
products through a retailer or outlet. It is a matter of study that which way of
distribution is more effective.

Promotion: How to inform a customer about a product? All the aspects to

communicate a customer are included in the promotion. These are advertising,
promotion, branding, personal selling, etc. Telecom sector is also spending a huge
amount on promotion. They are hiring Bollywood celebrities, sport personalities for the
promotion of their product.

There are three types of promotion based marketing practices which have been
adopted by almost every telecom company.

1. Pull Promotion Practice

2. Push Promotion Practice

3. Hybrid Promotion Practice

Push Promotion Practice

 Selling through outlet

 Negotiation with retailers

 Trade Show promotion

 Efficient supply chain

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Pull Promotion Practice

 Advertisement effectiveness

 Word of mouth referrals

 Customer relationship management

 Discount and attractive schemes

Hybrid Promotion Practice

Hybrid promotion practice is the combination of pull and push market tactics. It is the
combination of both.

People

People also very important aspect in marketing mix which included employees those
deliver the services along to customers In the case of telecom service, it is technical
support through call center. These call centers provide technical assistance to their
users. It is an important factor because many of the users change their service company
due to negative response by the staff of the call center.

Process

It is really a very important aspect in marketing mix. No business can survive without a
proper process which included a way to work. The systems and processes of the
company affect the execution of the service. It could be your way of selling a particular
connection, payment system (pre-paid/post-paid), distribution channel (through an
outlet / retailer), after sales services (customer care) to ensure that a business is running
effectively.

Physical Evidence

The customer is paying to get something which can be seen; touch of felt is included in
physical evidence. In the telecom industry, it is a chip which enables to communicate.

1.2.3 Marketing Practices Adopted by Selected Telecom Companies

Airtel was the first telecom company who introduced product differentiators in Indian
telecom market. At their pick period, the company accelerated their market expansion
and differentiated their telecom services with maximum geographical coverage. It

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adopted penetration pricing strategy. It was the first company who introduced tariff
plans with free incoming calls and become the market leader in the market till 2007.
Other follower companies offered free incoming calls later on. In the year 2008, Idea
cellular captured the market through their counter attach strategy. The advertisement
policy of Vodafone had given a positive edge during the initial period of telecom
sector‟s growth. The advertisement with a slogan “Where ever you go, our network
follows” is very popular which is through a pug dog. This advertisement introduced
when Vodafone was Hutch and continued. Bharti Airtel hired Shahrukh Khan to
Kareena Kapoor for brand endorsement followed by other companies. Vodafone is
using “Wherever you go, our network follows” to show their sound network quality and
later on use the tagline “Power to you” to explain their value added services. Tata
Docomo and other new small ventures adopted guerrilla attach approach to survive in
the market against the market giant such as Idea cellular, Bharti Airtel and Vodafone.
This attaches is effective when the market is divided into two or more segments and
market leaders didn‟t satisfy the needs of customers. In the year 2009, Tata Tele-
services launched per second paying scheme, pricing approach in the extremely
competitive Indian telecom market and followed by others with immediate effect. In
2010, Idea cellular limited adopted defense market approach. Bharti Airtel was
introduced match box strategy to distribute their products. It's based on the theory that
Airtel will be there, where match boxes are available. It was followed by other telecom
companies later on. Vodafone Essar Limited was the first who introduced push strategy
which is used force to sell the product. It means selling a company‟s product through
showroom of the company.

Bharti Airtel

 Airtel provides a wide range of value added services like SMS, data, caller
tunes, pre-paid/post-paid plans and variety of tariffs especially after the
introduction of mobile number portability.

 Airtel basically targeted to young segment and launched 4G networks to attract

them.

 It used a 2-Tier distributed network system which is simple and effective also.
Under 2-tier distribution network, Airtel divided the distribution system in rural

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 and urban segment separately to focus more and more on services and also
maintain Airtel relationship centers to build good relationship with users.

 Promotion related practices used by Airtel were attractive which, reinforced by

its tagline “Express Yourself” and later on “Har Ek Friend Zarori Hota Hai”
which targeted to youth segment. It expresses that there is a need to talk with
your friend/ loved and Airtel will help you at a nominal price with a good
network.

 Unique music tune was its practice which makes it popular. It's composed by
A.R. Rahman and became very popular in a short period.

 Bharti Airtel has established around 15,000 service centers in remote areas of
India with an aim to expand this network in an untouched area.

 Airtel invested in electronic media with a plan and make a brand itself. It
expanded its range and explained it properly among the users. Sachin Tendulkar
too has been brand ambassador who helped to get a good response.

 Airtel, focus on the senior age segment also and introduced a special pack with a
discount on any one number to connect with their child who living away.

 The company target to female segment through SMS facility regarding special
beauty and lifestyle tips. The company also targeted high income segment
through their corporate plans.

 For the young age users, Airtel offered „Friends‟ scheme where young couples
can talk to each other at a tariff discount especially late night playing with a
specific number.

 It's believed that consumers of maturity age much conscious towards value
added services so partnered with HTC and Blackberry offer various schemes.

 The company started life time validity scheme of Rs. 149/- (UNLIMITED
Local, STD+ roaming calls and 28GB (1GB/day) along with 100 SMS/day for
28 days) for the middle lower class segment.

 The company always focuses on Indian occasions like on the festival day
customers get a special recharge rate.

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  Airtel introduces international plans time to time for users. A popular plan is
with a recharge of Rs. 33/- a user can talk in the US, Canada at 3paisa/per
second with a validity of 27 days.

 The data plan for internet users is also very attractive. 6GB data will get in Rs.
175/- with a validity of 28 days.

Vodafone Essar Limited

Vodafone India Limited, based in Mumbai, is the second largest mobile network
in the country after Airtel by the number of users. As of December 2013, the
company had a total of 160 million users. Vodafone bought Essar for $5.46
billion in 2011. This means that Vodafone now owns more than 74% of the
Indian Business in the Essar takeover while the Indian investors in accordance
with the country‟s laws will own the remaining 26%.

 Vodafone remembered for “Chota recharge”. It introduced a recharge coupon of

10/- Rs. for the poorest segment to avoid financial burden.

 The company tried to upgrade their technology from 3G to 4G successfully.

 The company had an experienced team of relationship managers to maintain

bonds with customers.

 A company focused on network quality to connect easily.

 As Vodafone bought the Hutch brand and invested a huge amount on it. There
financial condition was not good so they invented „zoo-zoo‟ character to reduce
their advertisement cost. It was a good decision by Vodafone. They advertise
their schemes, tariff plan through the „zoo-zoo‟ characters.

 To attract new generation, it provided low cost mobile-handsets. Later, due to

competition raised by Jio, decreased their price by 50%.

 It promoted itself with the slogan “Change is good…… Hutch is now

Vodafone”

 Vodafone used direct distribution system of distribution. It owns and managed

stores to sale connections. Latest in Vodafone emphasized on after sales services
through their stores.

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  Vodafone‟s payment system is also good. For postpaid customers, the company
introduced “Kiosks” a self service machine which get payment and work as a
human being.

 Vodafone focused on rural market instead of urban. It is because of much

attention of the huge potential market of telecom. It also focused on middle and
lower class people to raise quantitative sale.

 The company introduced various plans for students. So their target is the
students those were good buyer of the market.

 Vodafone used low cost price policy to gain higher market share.

Idea Cellular Limited

 The idea is related to Aditya Birla group and mainly focused on prepaid
connection.

 'An Idea can change your life,' is a very popular slogan which has drawn a
drastic sales volume. Abhishek Bachchan was the brand ambassador who
emphasized on innovative ways to use the cellular technology.

 It offered very attractive tariff rate of Rs.0.5 per local call per minute and got
popularity.

 It is the company who spent a huge amount on advertisement and promotion.

Their promotion tools were also unique and effective. The company used public
transport vehicles or bus shelters and printed inside and outside.

 The company divided the users on a demographic basis very effectively and
made separate plan for each segment.

 It has introduced advanced network technology named 4G internet services in

metro cities and tie-up with Microsoft for technology enhancement to survive in
a tough market while the government announced to introduce mobile number
portability scheme.

 Idea provided a combo pack of value added services included post-paid and pre-
paid SIM, variety of tariffs, SMS pack, free roaming services etc.

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  Very keen worked out on prices (pocket friendly) and service options to go
nearly the rival companies so that they can retain the loyalty of its customers.

 Idea realized that the impact of a good and strong marketing plan and hence has
decided to follow an aggressive distribution marketing practice and opened
various outlets in cities.

 Company is spending a big amount through Indian Premium League (cricket)

and tried to boost their sales.

Tata Teleservices Limited

Tata Docomo is a collaboration of Tata tele-service, limited and Japanese

telecom company NTT Docomo, which launched in 2008 with GSM facility. It
is working with 18 telecom circles. The main objective of Tata is to increase the
number of users and market share. In the initial stage, it was providing Code
Division Multiple Access (CDMA) service, but after tying up with Japan based
company, they also offered Global System for Mobile Telecommunication
(GSM) service.

 Tata Docomo has a good range of products and facilities. It provides only
prepaid service with a good quality network and clarity in voice calls.

 The most attractive plan of Tata was a 1 second pulse plan. It also offered
0.02/second plan.

 Tata has launched its own handset in September 2010.

 Docomo launched innovative mobile internet offering, which allowed two users
to use their favorite website at a fixed cost. It means those were interested in a
single website, need to pay only 10/- per day, whereas for a combo pack of
various websites, need to pay only 25/-.

 Under the brand diet-SMS, Docomo introduced a novel pricing policy for text
messages. It bills to their customers by the character rather than per message.

 It hired to Ranbir Kapoor a famous Bollywood actor as a brand ambassador and

spent a huge amount of IPL matches.

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  As per Tata Docomo market practice, every day is different, then why have a
fixed plan? For that a subscriber need to dial *141# to get their daily plan.

Reliance Jio

The man behind the concept of Jio is Mr. Mukesh Ambani who believed that a man
either pays for calls or internet, but not both. His strategy was very clear to provide
maximum benefits without cost. Jio changed the scenario of telecom market and created
a digital world. It started with a capital of 30 billion dollars and without making a profit
as providing everything free. Jio achieved their target of 100 million subscribers in 100
days. It provided free SMS, voice calling, video, music content, roaming and
applications. There seemed to be no promotional activities for Jio, no brand ambassador
help to sell product. They believed on “word of mouth” publicity which completely
depends on customer satisfaction. Once, a customer used Jio SIM, referred to it his
friends and family. The free services ended by 31th March, 2017. The users could avail
the existing services for Rs. 399 for 3 months. Ultimately, Reliance did a fair job for
both customers and marketers. It is a proof that the marketing strategy of Reliance that
users of other companies switch to Jio.

Facilities provided by Reliance to their users are as follows:

1. Unlimited free voice calls (local and STD)

2. No roaming charges

3. Free internet surfing, music and movies

4. Unlimited SMS (Local and STD)

5. High speed 4G internet

Some other features of Reliance Jio:

 Jio hired a professional team of around 100 executives to maintain sound
relationship with customers with a target of 100 million users in 100 days.

 It was a common phenomenon that either a customer pays for text, calls or data.
Jio is working to provide all three in a package.

 Jio has been providing unlimited voice calls within a price of five hundred for
28 days. Remember validity time is 28 days instead of 30/31.

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  It abolishes roaming concept in the telecom sector

 Jio creates an app which will help to surfing movies, music and live till.

 Reliance focused on the network, but the performance is not up to the mark.

 Reliance chairman plans to inject 140 billion rupees into its Jio project to
compete Bharti Airtel Limited.

 Jio‟s capital expenditure is around one trillion rupees.

 In network field, its performance is fabulous. It introduced 4G network and plan

to come up with 5G network. It offered with a speed of 8-10 Mbps and invested
in 450000sq. Ft. of data centers.

 Jio money and Jio play were among the most popular applications.

 Bharti Airtel is trying to compete Reliance group with an offer of 30GB data
with a monthly plan.

 Jio Phone has been introduced with smart features and under a cost of fifteen
hundred rupees.

1.3 Challenges of Indian Telecom Market

There is tough competition in Indian telecom market. Companies are fighting on the
basis of product quality, price and promotion, etc. All are providing similar services
with the same capabilities means they have the same kind of tariff plans for their users.
Although it has enhanced its investment in the last few years and working hard to
expand its network yet the presence of strong competitors is a major threat to its
successful survival. The industry is facing slowdown in revenue growth and huge
pressure on profit margin, whereas competition is very high. There are some alternates
of voice calls such as what apps, Facebook messenger, twitter and email, applications
are very popular among users and it also dramatically reduce the voice revenue of
telecom operators and who is trying hard to avoid becoming just simple data channels
in the digital era. Secondly, Mobile Number Portability (MNP) also creates a huge
challenge for telecom companies to sustain their existing users or others. It is available
nationwide at nineteen rupees, only with a condition to provide the customer who has

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completed a period of 90 days (from the date of activation of the mobile connection)
with the current operator, to be eligible for porting to another operator.

By 2020, the government will launch 5G technology. It will be a huge change and big
revolution in the telecom industry. However, major telecom companies can profit from
it such as Apple, who is investing in 5G to support their smart phones. The involvement
of other companies is pressured to develop 5G technology because the availability of
spectrum is very limited. It will raise their financial burden also.

Telecom sector requires a huge amount of investment in buy spectrum, tower

setup and promotion. There business is completely based on debt, which is supplied by
banks. As per guidelines Reserve Bank of India, companies pressurize to pay their debt
as soon as possible.

India‟s telecom industry is facing an intense competition in current scenario due to

entry of Reliance Jio Infocomm Limited (Mukesh Dharubhai Ambani Group). It creates
through cut competition in the telecom market. It is introduced on 5th September, 2016
at Mumbai with a free package of voice call for first six months, than cut-rate data
services provided by it and increased the expectation of customers in the telecom sector.
It offers 4G instead of 2G and 3G, which is a technical challenge for other operators.

The industry‟s focus has now shifted from customer market shared (CMS) to revenue
market shared (RMS). This is because the multiplicity of SIM ownership has made the
subscriber numbers meaningless to gauge the strength of the business. The dual SIM is
contributing to 30%-35% of the new additions. There is a huge disparity between the
CMS and RMS as the higher CMS.

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