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Aircel Case Study Essay

ACKNOWLEDGEMT The successful culmination of any project is due to the multi faced help directly or indirectly rendered by various people during the execution of the project. I express my foremost gratitude to AIRCEL DISHNET COMPANY Ltd Jammu branch ,and Collage of management, School of business, for providing me an opportunity to gather information for my project. AT DISHNET WIRELESS LTD. AIRCEL

The people who actually facilitated this piece of study, taught me the corporate culture and in the same breath taught me how to deal with man power, I owe the growth in my learning curve to these people: Company Guide – Dishnet Wireless ltd, Aircel I would like to acknowledge my obligations to MR. SURANDER KATARIA (Head HR- NORTH) Dishnet Wireless Ltd, Aircel bank for granting me the permission for the project work. Mr. MILAN (Asst Manager HR Deptt) From the first day of my induction, he has been there throughout to facilitate my work ensuring that my work tenure was smooth. Mr.

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SHAMEEN MOHAMAD ( HEAD OF VAS ) I am highly indebted to my Project guide or Mentor Mr. SHAMEEN under whom we done the work and for his warm and constant guidance . I express my deep gratitude and sincere thanks to him. Last but not the list I wish my gratitude to the person who directly or indirectly help me to complete my project. Thanks Chetan Sharma PREFACE Master of Business Administration is a course, which combines both theory and its applications as its contents of study in the field of management.

As part and parcel of this course, every aspirant has to undergo an ‘in – company training’ in an organization. The purpose of this training is to expose the student of management sciences with real life situations existing in the organization and to provide an insight into the various functions who can visualize things what they have been taught in classrooms. Actually, it is the life force of management. It is in practical training that the effectiveness of management itself is realized. I was fortunate enough to do my training in AIRCEL DISHNET LTD.

As a complementary to training, every trainee has to prepare and submit a report on the working of the organization. This report is in continuation of that tradition. It is an attempt to present an account of practical knowledge and observations gathered during the training. Chetan Sharma DECLARATION I hereby declare that the project report on “VALUE ADDED SERVICE IN AIRCEL pvt. ltd. is written and submitted by me to ____________________________________towards the fulfillment for the study of MBA. This project is based on my knowledge and database gained from the company.

The report written is original work of me. The contents provided are true to the best of my knowledge and belief. I further declare that, this project report is not been copied and submitted to any other university for any other degree, or requirement course. Chetan Sharma 2008 MBE 05 TABLE OF CONTENTS 1. INTRODUCTION ? About telecom sector in India. ? Basic structure of Indian telecom. 2. COMPANY PROFILE ? AIRCEL in Delhi ? Value added service ( VAS ) 3. ABOUT THE PROJECT ? Targets and Tasks Assigned 4.

RESEACH METHODOLOGY ? PROBLEM DEFINATION ? RESEARCH DESIGN ? Type of research design ? Method of collection data ? Scaling technique ? Sampling technique ? Field work 5. METHODOLOGY DATA Analysis 6. FINDINGs 7. RECOMMENDATIONS & SUGGESTIONS 8. ANNEXURES 9. BIBLIOGRAPHY INTRODUCTION TELECOMMUNICATION The word telecommunication was adapted from the French word telecommunication. It is a compound of the Greek prefix tele-, meaning ‘far off’, and the Latin communicare, meaning ‘to share’. Telecommunication is the transmission of signals over a distance for the purpose of communication.

In modern times, this process almost always involves the sending of electromagnetic waves by electronic transmitters but in earlier years it may have involved the use of smoke signals, drums or semaphore. Today, telecommunication is widespread and devices that assist the process, such as the television, radio and telephone, are common in many parts of the world. There is also a vast array of networks that connect these devices, including computer networks, public telephone networks, radio networks and television networks.

Computer communication across the Internet, such as e-mail and instant messaging, is just one of many examples of telecommunication. The basic elements of a telecommunication system are: • a transmitter that takes information and converts it to a signal for transmission • a transmission medium over which the signal is transmitted • a receiver that receives and converts the signal back into usable information Often telecommunication systems are two-way and devices act as both a transmitter and receiver or transceiver.

For example, a mobile phone is a transceiver. Telecommunication over a phone line is called point-to-point communication because it is between one transmitter and one receiver, telecommunication through radio broadcasts is called broadcast communication because it is between one powerful transmitter and numerous receivers. A collection of transmitters, receivers or transceivers that communicate with each other is known as a network. Digital networks may consist of one or more routers that route data to the correct user.

An analogue network may consist of one or more switches that establish a connection between two or more users. For both types of network, a repeater may be necessary to amplify or recreate the signal when it is being transmitted over long distances. This is to combat attenuation that can render the signal indistinguishable from noise. The shaping of a signal to convey information is known as modulation. Modulation is a key concept in telecommunications and is frequently used to impose the information of one signal on another.

Modulation is used to represent a digital message as an analogue waveform. This is known as keying and several keying techniques exist — these include phase-shift keying, frequency-shift keying, amplitude-shift keying and minimum-shift keying. Bluetooth, for example, uses phase-shift keying for exchanges between devices. HISTORY OF GSM The Group Special Mobile (GSM ) was created in 1982 by European Conference of postal and Telecommunications Administrations (CEPT) with the objective of developing a standard for a mobile telephone system that could be used across Europe.

In 1989, GSM responsibility was transferred to the European Telecommunications Standards Institute (ETSI). The phase I of the GSM specifications were published in 1990. The first GSM network was launched in 1991 by Radiolinja in Finland. By the end of 1993, over a million subscribers were using GSM phone networks The growth of cellular telephone systems started in the early 1980s, particularly in being operated by 70 carriers across 48 countries. The Global System for Mobile communications (GSM: originally from Group Special Mobile) is the most popular standard for mobile phones in the world.

GSM service is used by over 2 billion people across more than 212 countries and territories. The ubiquity of the GSM standard makes international roaming very common between mobile phone operators, enabling subscribers to use their phones in many parts of the world. From the point of view of the consumers, the key advantage of GSM systems has been higher digital voice quality and low cost alternatives to making calls such as the Short Message Service (SMS). The advantage for network operators has been the ability to deploy equipment from different vendors because the open standard allows easy inter-operability.

Like other cellular standards GSM allows network operators to offer roaming services which mean subscribers can use their phones all over the world. GSM is a cellular network, which means that mobile phones connect to it by searching for cells in the immediate vicinity. GSM networks operate in four different frequency ranges. Most GSM networks operate in the 900 MHz or 1800 MHz bands. Some countries in the Americas (including the United States and Canada) use the 850 MHz and 1900 MHz bands because the 900 and 1800 MHz frequency bands were already allocated. pic]The GSM logo is used to identify compatible handsets and equipment. There are four different cell sizes in a GSM network • macro • Micro • Pico • Umbrella cells. The coverage area of each cell varies according to the implementation environment. Macro cells can be regarded as cells where the base station antenna is installed on a mast or a building above average roof top level. Micro cells are cells whose antenna height is under average roof top level; they are typically used in urban areas.

Pico cells are small cells whose diameter is a few dozen meters; they are mainly used indoors. Umbrella cells are used to cover shadowed regions of smaller cells and fill in gaps in coverage between those cells. The network behind the GSM system seen by the customer is large and complicated in order to provide all of the services which are required. It is divided into a number of sections and these are each covered in separate articles. • The Base Station Subsystem (the base stations and their controllers). • The Network and Switching Subsystem (the part of the network most similar to a fixed network).

This is sometimes also just called the core network. • The GPRS Core Network (the optional part which allows packet based Internet connections). All of the elements in the system combine to produce many GSM services such as voice calls and SMS ] Subscriber identity module(SIM) One of the key features of GSM is the Subscriber Identity Module (SIM), commonly known as a SIM card. The SIM is a detachable smart card containing the user’s subscription information and phonebook. This allows the user to retain his or her information after switching handsets.

Alternatively, the user can also change operators while retaining the handset simply by changing the SIM. Some operators will block this by allowing the phone to use only a single SIM, or only a SIM issued by them; this practice is known as SIM locking, and is illegal in some countries. In the United States, Canada, Europe and Australia, many operators lock the mobiles they sell. This is done because the price of the mobile phone is typically subsidised with revenue from subscriptions and operators want to try to avoid subsidising competitor’s mobiles.

A subscriber can usually contact the provider to remove the lock for a fee, utilize private services to remove the lock, or make use of ample software and websites available on the Internet to unlock the handset themselves Some providers will unlock the phone for free if the customer has held an account for a certain period. Third party unlocking services exist that are often quicker and lower cost than that of the operator. In most countries removing the lock is legal. In countries like India, Pakistan, Indonesia, Belgium, etc. , all phones are sold unlocked.

However, in Belgium, it is unlawful for operators there to offer any form of subsidy on the phone’s price. This was also the case in Finland until April 1, 2006, when selling subsidized combinations of handsets and accounts became legal though operators have to unlock phone free of charge after a certain period (at most 24 months). CHANGES WITH THE CHANGING TECHNOLOGY Technological changes in telecommunications and computers have radically changed the business scenario. In turn, the new demands of business have spurred many telecom-based technological innovations.

In order to exploit these innovations for competing in global markets, the business community the world over has been putting pressure on governments to revise the policy, regulation, and structure of the telecom sector. Several Countries across the world have responded by restructuring the state-controlled telecom service provider, increasing private participation, and deregulating service provision. The emergent organizations have attempted to be more responsive to the business needs and have evolved mechanisms to remain competitive even under tremendous pressures.

Over the past several years, developing countries have also recognized the important role a responsive, business-oriented, and technologically advanced telecom sector plays in the growth of the economy. Many developing countries now see the constraints of estate monopoly in telecom as standing in the way of a response to the twin challenges of spurring internal growth and competing in an increasingly global economy. Past experience of reform across many countries suggests that the fundamental issue that must be addressed in telecom reform is effective separation of the basic functions of policy making, operational management, and regulation ITU Report 1989). The Second level of consideration is access to capital and human resources. The third level of concern is the introduction of competition for efficiency. Competitions perhaps more important than right ownership, if ever there was anything like it, in bringing about efficiency. The Indian telecom sector was wholly under government ownership until 1984, and was characterized by underinvestment, outdated equipment, and growth well below the potential of the market. In the mid-1980s, telecom was included by the government as a part of the so-called .

Technology Missions a set of dedicated, welfare-oriented, and well focused programmes then implemented at national level. The DoT and the Precursor to Reform In one of the earliest steps towards reforms and boosting indigenization efforts, the government set up the Centre for Development of Telematics (C-DOT) in 1984 with the objective of initiating and managing research in the switching and transmission segments. Subsequently, the government separated the Department of Post and Telegraph in 1985 by setting up the Department of Post and the Department of Telecommunications. In 1986 two new public sector corporations.

The Mahanagar Telephone Nigam Limited (MTNL) and the Videsh Sanchar Nigam Limited (VSNL). were set up under the Department of Telecommunications (DoT). The MTNL, which was carved out of the Dot, took over the operation, maintenance, and development of telecom services in Bombay and New Delhi. The VSNL was set up to plan, operate, develop, and accelerate international telecom services in India. The government created the corporate organizations in orderto allows decision making autonomy and flexibility and facilitates public borrowings that would not have been possible under a government framework.

However, policy formulation, regulation, and several key decision areas remained with the DoT. A new organization, the Telecom Commission, was created in 1989 with a wide range of executive, administrative, and financial powers to formulate and regulate policy and prepare the budget for the DoT. The Telecom Commission had four full-time members’ managing technology, production, services, and finance and four part-time members representing the Planning Commission, Department of Finance, Department of Industry, and Department of Electronics.

The creation of the MTNL, its subsequent operations, and the relationship of the personnel employed in the MTNL to their counterparts in the DoT raised questions about the organizational structure most suited for this sector. Therefore, in 1991, upon government initiative, the high-powered Athreya Committee submitted a report on the appropriate organizational structures for this sector. The report recommended: ? Placing both policy and regulatory mechanisms under the Telecom Commission. ? Breaking up of the DoT into zonal corporations under the government. Setting up of a corporation, initially in the public sector, to handle the long-distance network. ? Allowing value-added services (VASs) to be provided by the private sector. ? Indicating general liberalization in production of equipment giving autonomy to R and training institutions. ? Subsequently, other studies for reforms had been commissioned, but in the absence of public debate, and employee and union concerns regarding the consequences of implementation. ? The government did not formally adopted any report..

Since 1997, there were several statements in the media by key decision makers and the Communications Minister calling for corporatization of the DoT. However, there was very little public information or debate regarding the sequence of decisions leading to corporatization or the form of corporate structure. ? Since 1995, there was increasing pressure from international organizations such as the WTO to review the monopoly status of theVSNL and the Dot’s monopoly in international long-distance communication respectively. The government had undertaken to ?

Review the monopoly status of the VSNL in 2004 and the possibility of opening of long distance in 1999. ? The VSNL continued to have a monopoly over international telecom and broadcast transmission. It had planned to enter the long-distance market but the DoT hampered its plans. In 1999, the government created the Department of Telecom Services (DTS), who’s Secretary was appointed from the Indian Telecom Services (ITS) cadre, and the DoT from the erstwhile the DoT, who’s Secretary was appointed from the Indian Administrative Services (IAS).

This was done ostensibly to separate the service provision component (DTS) from that of policy making (DoT). In reality this was to accommodate the conflict caused by the government’s decision to appoint a Secretary to the department from the IAS, as DoT employees wanted the Secretary to be from the ITS. When the DTS Secretary retired, the government appointed an IAS officer in his place, which again led to agitation and further bifurcation of the DTS into the Department of Telecom Operations (DTO) and DTS.

The DTS was to be headed by an IAS officer responsible for the MTNL, VSNL, Telecommunications Corporation of India Limited (TCIL), Indian Telephone Industries Ltd. (ITI), and Hindustan Teleprinters Limited (HTL) as well as for formulating the strategy for corporatization. The DTO was responsible for managing the telecom network. ? The government’s view has been that a person from outside the ITS cadre would be better able to oversee the corporatization of ? the DoT since in the past senior management of the erstwhile DoT, mostly from the ITS, had resisted any kind of change ? ? Although an outsider Secretary was ostensibly to facilitate corporatization, it is not clear how, without the requisite mandate from the employees and especially the senior managers, he/she would be able to lead such a major task. This is not to say that the ITS cadre was better equipped to handle this task. What was missing was an overall strategy and an indication of the direction of change to inform the administrative changes. The government seemed to view corporatization as an administrative decision rather than a process. The Athreya Committee report as well as subsequent reports on restructuring may be viewed as the initiation of a process of ? examining organizational options. The reports, however, did not accord due attention to the need for autonomy in financial and ? Operational decision making. Management incentives that would have allowed these organizations to increase profitability and raise capital from markets had been only very sketchily outlined Thus access to capital would have been a problem. ? Besides the limitations, the suggested changes were superficial since most . estructured. Organizations showed too much of a ? Control and rule orientation and continued to work in much the same manner as before. ? Inability of top management and political executives to address the need to make the DoT more competitive could be cited as a failure. Given the large base of employees who had been entrenched in a typical bureaucratic mode of functioning providing ? Customer orientation and a commercial approach were, and continue to be, the most difficult tasks. The DoT had no specific training policy in this regard.

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Though there were several training centers, these were not equipped to provide management training. The restructuring was far more concerned with form than content. ? Areas like identifying the mechanisms for acquiring new core ? Capabilities, developing appropriate incentives, and nurturing a climate in which change could take place were lacking. Telecommunications Regulatory Authority of India (TRAI) The Telecommunications Regulatory Authority of India or TRAI (established in 1997) is the independent regulator established by the Government of India to regulate the telecommunications business in India.

Notwithstanding anything contained in the Indian Telegraph Act, 1885, the functions of the Authority shall be to- (a) Make recommendations, on a request from the licensor, on the following matters, namely: (i) need and timing for introduction of new service provider; (ii) terms and conditions of license to a service provider; (iii) revocation of license for non-compliance of terms and conditions of license: (iv) Measures to facilitate competition and promote efficiency in the operation of telecommunication services so as to facilitate growth in such services. v) Technological improvements in the services provided by the service providers. (vi) Type of equipment to be used by the service providers after inspection of equipment used in the network. (vii) measures for the development of telecommunication technology and any other matter relatable to telecommunication industry in general; (b) Discharge the following functions, namely:- i) ensure compliance of terms and conditions of license; (ii) notwithstanding anything contained in the terms and conditions of the license granted before the commencement of the Telecom Regulatory Authority (Amendment) Ordinance,2000, fix the terms and conditions of inter-connectivity between the service providers; (iii) Ensure technical compatibility and effective inter-connection between different service providers. iv) regulate arrangement amongst service providers of sharing their revenue derived from providing telecommunication services; (v) lay down the standards of quality of service to be provided by the service providers and ensure the quality of service and conduct the periodical survey of such service provided by the service providers so as to protect interest of the consumers of telecommunication services; (vi) lay down and ensure the time period for providing local and long distance circuits of telecommunication between different service providers; (vii) maintain register of interconnect agreements and of all such other matters as may be provided in the regulations; (viii) keep register maintained under clause (viii) open for inspection to any member of public on payment of such fee and compliance of such other requirement as may be provided in the regulations; (ix) ensure effective compliance of universal service obligations: (c) Levy fees and other charges at such rates and in respect of such services as may be determined by regulations. (d) Perform such other functions including such administrative and financial functions as may be entrusted to it by the Central Government or as may be necessary to carry out the provisions of this act.

Provided that the recommendations of the Authority specified in the clause (a) of this sub-section shall not be binding upon the Central Government: Provided further that the Central Government shall seek the recommendations of the Authority in respect of matters specified in sub-clauses (i) and (ii) of clause (a) of this sub-section in respect of new license to be issued to a service provider and the Authority shall forward its recommendations within a period of sixty days from the date on which that Government sought the recommendations: Provided also that the Authority may request the Central Government to furnish such information or documents as may be necessary for the purpose of making recommendations under sub-clauses (i) and (ii) of clause (a) of this sub-section and that Government shall supply such information within a period of seven days from receipt of such request: Provided also that the Central Government may issue a license to a service provider if no recommendations are received from the Authority within the period of specified in the second provision or within such period as may be mutually agreed upon between the Central Government and the Authority. Provided also that if the Central Government has considered that recommendation of the Authority comes to a prima facie conclusion that such recommendation cannot be accepted or needs modifications, it shall, refer the recommendations back to the Authority for its reconsideration. Milestones in Telecom Reforms 1984 Manufacturing of subscriber terminal equipment opened to private sector. ? 1985 Telecom was constituted into a separate department with a separate board. ? 1986 MTNL and VSNL created as corporations. ? 1988 Government introduces in-dialing scheme. PABX services only within a building, or in adjoining buildings. ? 1989 Telecom Commission formed. ? 1991 Telecom equipment manufacturing opened to private sector. Major international players like Alcatel, AT, ? Ericsson, Fujitsu, and Siemens entered equipment manufacturing market. ? 1992 VAS sector opened for private competition. ? 1993 Private networks allowed in industrial areas. ? 1994 Licenses for radio paging (27 cities) issued. May 1994 New Telecom Policy announced. ? September 1994 Broad guidelines for private operator entry into basic services announced. ? November 1994 Licenses for cellular mobiles for four metros issued. ? December 1994 Tenders floated for bids in cellular mobile services in 19 circles, excluding the four metros, on a duopoly basis. ? January 1995 Tenders floated for second operator in basic services on a circle basis. ? July 1995 Cellular tender bid opened. ? August 1995 Basic service tender bid opened; the bids caused lot of controversy. A majority of bids were considered low. ? December 1995 LOIs issued to some operators for cellular mobile operations in circles. January 1996 Rebidding takes place for basic services in thirteen circles. Poor response. ? The Telecom Regulatory Authority of India (TRAI) formed by ordinance. ? October 1996 LOIs being issued for basic services. ? March 1997 The TRAI Act passed in Parliament. ? June 1998 Several VASs available through private operators. The first private basic service becomes operational. ? March 1999 Announcement of National Telecom Policy. ? January 2000 Amendment to the TRAI Act. ? August 2000 Announcement of Domestic Long Distance Competition Policy. ? October 2000 Planned Corporatization of DoT. BASIC STRUCTURE OF INDIAN TELECOM EVOLUTION OF THE INDIAN TELECOM MARKET 1. Penetration and growth

The Indian cell phone market essentially started in 1992 with the sale of licenses, which enabled the private sector to participate in the industry (COAI, 2006). In 1994, cellular service licenses were granted for the major metropolitan areas. This then expanded to 15 circles in the following year. Services were rolled out in 1995 – with Kolkata becoming the first city to get a cellular network in August 1995. However, in December 2000 – 5 years after launch of cellular licenses – penetration was still quite low. In fact, there were only about 3. 2 million subscribers, primarily in the major cities and large towns. The major driver for change was the Telecom Regulatory Authority of India (TRAI).

TRAI was instituted in 1997, and soon started building policies and regulations to push prices downward and spur competition. By December 2004, there were about 93mn phones in the country, of which 48mn subscribers were cellular (TRAI, Dec. 2005). The number of cellular phone users increased to about 76mn in December 2005 and about 89mn phones in March 2006 (Financial Express, Apr 2006) This trend indicates a CAGR of over 30%. Jorma Ollila, Chairman and CEO of Nokia, recently commented that “India is amongst the top 5 telecom markets in the world” (Light reading 2006) when he visited the country to reiterate his firm’s commitment to the market.

Indeed, no other country in the world has added 4-5mn mobile phones per month. Exhibit 1 shows the growth of the postpaid and prepaid market in India, including prediction for 2010. Player The Indian wireless market has both CDMA and GSM network operators. CDMA operators entered the picture and grew rapidly – Reliance, which owns about 70% of the CDMA market currently with ~ 20. 44 mn subscriptions, grew at over 114% year-on year in 2002-03 – one of the most explosive phone launches ever ( TRAI Jun 2003, Financial Express, Apr 2006). The overall CDMA subscriber base, though, is still about 22. 2% of the market – with Tata Teleservices taking up most of the remaining CDMA share.

The GSM players account for the remaining ~78% – with a market that is less dominated by one player. Bharti, state-owned BSNL, and Hutch control the largest parts of this market and have been adding subscribers at an impressive pace. As of April 2006, Bharti was the largest player by far, with 30. 37 mn subscribers. BSNL had a subscriber base of 20. 44mn, followed closely by Hutch with 22% of the GSM market and an overall share of 15. 02%. The Telecom Regulatory Authority of India overseas the evolution of this market. Since its establishment in 1997, this agency has made many key judgments – including statements on tariffs, quality of service, next generation networks, etc.

TRAI also releases quarterly reports on the state of the telecom industry – with special emphasis on tariffs, interoperability between networks, and usage (TRAI). Since Indian regulation makes it difficult for network operators to also sell phones (due to revenue share agreements), there is a completely parallel market for users to buy phones. In the GSM space, users go to handset providers to buy phones and then to network operators to get network services. Most global handset manufacturers are present in India – with Nokia leading the pack by far. In 2005, more than 31mn handsets were sold. Of this, Nokia captured about 60% share – over 18mn phones in one year. Motorola, which has a smaller share, is seeing growth with the introduction of more advanced phones including its Razr platform.

Samsung, LG and Sony Ericcson all have reasonable market share as well – with LG catering almost exclusively to the CDMA space through a tie-up with Reliance. THE INDIAN MARKET – BASIC DEMAND TRENDS Demand for cellular services is interesting for a variety of reasons. Before catering to this market, service providers must consider unmet needs, price sensitivity, diversity in consumer profiles, and the skew in urban-rural markets. 1. Unmet needs Current Indian teledensity is 11. 43 (i. e. only 11. 43 phones both cellular and fixed line exist per 100 people) While that points to a staggering ~ 125mn phones already in the market, it also points to a large unmet demand. Specifically, peer countries have much higher teledensity. China has a mobile teledensity of 28. while in Malaysia, that number is 77. If India is to attain China’s teledensity in 5 years – up from its current penetration of ~ 7%, this implies an almost 4x increase in the number of phones. This would lead to demand for about 210mn additional phones in that time. 2. Young, growing, consuming market More than 95% of India’s population is under the age of 65. 70% of the country’s citizens are below the age of 36, and half of those are under 18. (Bharadwaj etal, 2005; Wikipedia; Census Maps; Answers. com). Further, the standard of living has been increasing: only 26% of the population is below the poverty line now, compared to over 50% in the mid-70s. Sinha, Jayant, 2005) Thus, the young, mobile segment of the population is quite large and more connected than any previous generation. In addition, it earns more and is more willing to spend on convenience products than previous generations. In fact, in some instances, consumer products like cell phones now have are a symbol of status. Young consumers are willing to buy new phones and are constantly looking for good deals and the opportunity to “trade up” to better products. 3. Value sensitivity The Indian consumer is also very price sensitive. Product managers have found that consumers in India will not buy products unless there is a clear value proposition – at the lowest possible price.

For instance, Nokia successfully introduced a customized version of their 1100 phone with features uniquely tailored to India – dust-resistant body and a built-in flashlight – making it very popular among truck drivers (Bharadwaj et al, 2006). The phone itself retails for about $40. Indians also expect a high quality of services at the lowest possible tariff rate. Thus, tariffs in India for voice services are among the lowest in the world. While average American carrier charges about 30-40 cents per minute, the corresponding rate for an Indian carrier is only about 2 cents per minute. (Cingular, T- Mobile, TRAI Dec 2006). 4) Pre-paid rules

Indian consumers choose plans and tariff structures that minimize monthly expenditure. Further, they also choose tariff plans that let them switch easily – especially since they shop on price. Thus pre-paid SIM cards are the dominant method of revenue generation. With this scheme, consumers buy a SIM card to use in their phones with a set amount of money on it (say ~$10). In addition, since receiving calls in India is free, very often consumers will only receive calls on their phones. And almost every cellular company has also introduced free incoming plans for 1-2years & lifetime free incoming plans. Thus, revenues per user are low, with pre-paid users contributing ~$5. 6 per month.

While the average post-paid user spends much more – contributing ~$19 per month – this is a small segment of the market in India. In 2006, for example, over 95% of new phone additions were pre-paid plans. (TRAI Dec 2006) (See Exhibit 1 for potential growth of pre-paid vs. post-paid in India). 5)Rural vs. Urban Market While growth in India is significant, there is a large difference between urban and rural markets. Teledensity varies wildly. For example, cities like Mumbai, Delhi, Chennai, and Kolkata have a teledensity around 49% while Circles B and C (which include far-less urban states) see a penetration of 2. 6% (See Exhibit 7 for market penetration in India varied by geographical areas).

Aslo, service providers pay Access Deficit charges to subsidize the (mainly government run) players that serve the unprofitable rural markets. However, as network operators run into an increasingly saturated market in cities, they are slowly turning to rural areas to grow. To enter these markets, carriers will have to make large capital investments, create low introductory pricing, and only offer a basic level of services. Although growth in rural markets will be slower and require a larger investment per customer, with no guarantee of the same amount of revenue, the thirst for communication and poor landline infrastructure makes rural India a unique opportunity for growth.

Consequently, operators are dropping prices to ensure they get their hands on the expanding customer pie and the large untapped market means that revenues from the voice market will drive the growth for the next few years. 6. Demographics The expected growth in the Indian GDP, 6-7 percent annually from 2005 to 2007, is a good indicator of the increased purchasing power of the population (Asian Development Bank – 2005). A greater percentage of the Indian population has higher levels of disposable income with which to purchase products and services. Along with lower connectivity costs and cheaper handsets, the mobile market in India is seeing a huge influx of subscribers who can now afford basic coverage. India is also experiencing changing demographics that have contributed to the explosion in the mobile market.

Approximately 70 percent of India’s 1. 1 billion population is between the ages of 15 and 40 (U. S Census Bureau-International Database, 2003). As a result, telecom players are looking at a young population with increased pay scales and more job opportunities. Furthermore, a high percentage of these Indians are still living at home and saving their salaries. Thus, this generation is able to spend a large percentage of their income on the purchase of entertainment and consumer electronics, including cell phones. 7. Role of Government The Indian government has played a significant role in setting the stage for growth in mobile telecommunications.

Through the oversight of the Telecom Regulatory Authority of India (TRAI), the government has made many changes to regulations and policies to remove hurdles and spark growth. First, the Indian government introduced the Unified Licensing Regime in 2003. This regime allows operators to offer any service through the technology of their choice, in any area in which they currently operate. Thus, all telecom services (including voice, data, cable TV, and radio broadcasting) can now be delivered through a single medium and are covered by a single license. Unified licensing shifted operator behavior and caused operators to start focusing on converged services and networks for cost efficiency – which, in turn, allows them to offer pricing conducive to rapid growth.

In addition, the Indian government has raised the maximum foreign direct investment (FDI) limit from 49 percent to 74 percent in Telecom Sector. The government also enacted the Access Deficit Charge (ADC) policy, which requires that a share of call revenue be paid to the government to assist in funding network expansion into rural areas. As of early 2005, several regulations were imminent. First, the launch of an “All India” license would give operators the right to provide all forms of service throughout India with one license. This structure would initiate the next phase of market consolidation, with the result likely being five to six main players.

The players would have greater scale which would lead to higher cost efficiency and, ultimately, more flexibility, and allow even fixed line users to switch to mobile services seamlessly – possibly increasing competition in the market. Finally, the government needed to decide how to increase spectrum capacity, since 2G networks are nearing full capacity (“2G” stands for second generation cellular technologies, which are circuit-based, voice technologies deployed in the 1990s. This standard is being replaced around the world with “3G” networks that are faster . GROWTH OF TELECOM NETWORK (2009) With a strong population of over 1. 1 Billion, India has become one of the most dynamic and promising Telecom markets of the world.

In recent times, the country has emerged as one of the fastest growing telecom markets in the world. It has third largest telecom network and the second largest wireless network in the world. NETWORK EXPANSION ? The total number of telephones has reached 4297. 25 lakh as on March 31, 2009 as compared to3004. 92 lakh as on March 31, 2008. ? While 1292. 33 lakh connections were added during the twelve months of 2008-09, about 108 lakh connections were added every month during the current fiscal year. ? The tele density, as given in the following graph, has shown a sustained increase during last few years. It increased from 26. 22% in March 2008 to 36. 98% in March 2009. Tele density graph

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Cellular Service Providers As on Apr 2007 India has 167 million mobile phone subscribers. Out of this 125 million are GSM users and 41 million CDMA users. BSNL, Bharti Airtel, Hutch, Idea, Aircel, Spice and MTL are the main GSM providers in India. Reliance Communications and Tata Indicom are the main CDMA providers in India. Bharti Airtel Airtel is providing cellular services in Delhi, Mumbai, Kolkata, Chennai, Andhra Pradesh, Gujarat, Haryana, Himachal Pradesh, Jammu and Kashmir, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Goa, Orissa, Punjab, Rajasthan, Tamil Nadu, UP and West Bengal. Airtel is the No. 1 cellular service provider in India using GSM technology.

Airtel has 23% market share in India with a total subscriber base of 38 million. Reliance Communications Reliance has both CDMA and GSM networks and total subscriber base of 29 million or 17% market share. It has GSM network in Assam, Bihar, Himachal Pradesh, Kolkata, North East, Madhya Pradesh, Orissa and West Bengal. Reliance has CDMA networks in other states and cities. Bharat Sanchar Nigam Limited (BSNL) BSNL is a state owned telecom company which has GSM presence in almost every cities and towns. BSNL has 27 million subscribers with a market share of 16%. Tata Indicom Tata Indicom is a main CDMA provider in India with 16 million subscribers all over India.

Tata Indicom has presence in almost every states and cities in India Airtel has more than 100 million subscribers and BSNL has half as much. But, BSNL’s revenues was more than Airtel’s until now. For the first time Airtel has surpassed BSNL to become country’s number one telecom operator in terms of subscribers and revenues. There is a drop of 0. 4% in BSNL’s revenues when compared with the previous fiscal year. Airtel has increased its revenues by 39. 8%  – a very impressive growth. BSNL did not face the heat until now as the revenues weren’t dipping. That doesn’t hold good any more and it has to buck up or revamp before it turns into an Air India.

BSNL doesn’t have the same kind of excuses of Air India as it operates in a lucrative telecom market. The other operator which has seen a drop in revenues is MTNL. This is in spite of all the 3G spectrum and the leg-up both BSNL and MTNL got from the government. Giving subsidies and special treatment doesn’t work after all. Reliance saw a decent growth of 23. 1% and its revenues are 22341 crores. It is 3rd in line. The best growth in revenues was by IDEA Cellular at 50. 7%. Airtel and Reliance are the 2 India based operators to feature in the top 20 telecom operators by subscribers. Top 10 telecom service providers by revenues : | |Operator |Revenues |Revenues Revenues |Growth % | |Rank | |2006-07 |2007-08 |2008-09 | | |1 |Bharti Airtel |17888 |26436 |36962 |39. 8 | |2 |BSNL |40135 |35296 |35167 |-0. 4 | |3 |Reliance |14468 |18638 |22341 |23. 1 | |4 |Vodafone |10565 |15477 |22224 |43. 6 | |5 |IDEA Cellular |4413 |6720 |10125 |50. | |6 |Tata Comm |8857 |8263 |9963 |20. 6 | |7 |TTSL |5178 |5993 |6739 |12. 4 | |8 |MTNL |4923 |4729 |4487 |-5. 1 | |9 |Aircel |1507 |2528 |3425 |35. 5 | |10 |TTML |1422 |1730 |1323 |7. 8 | MARKET STRUCTURE OF TELECOM INDIA Telecom in delhi

In our state developmental challenges are many and almost every sector needs a special attention and package to grow. Since unprecedented progress in technology has made telecom sector one of the engines of growth, we want to see this sector progress to register increasing momentum in the growth of economy on all fronts. Every one percent growth in tele-density is accompanied by 3% growth in Gross Domestic Product and sometimes this growth has been reported above 5% in some surveys conducted in developing nations. The tele-density – the number of phones per 100 of population – in fact is the very important indicator adopted for measuring the performance of this sector and in Delhi it has risen from a mere 2. 08 in 2001-2002 to 7. 76 in 2005-06.

We have to bear in mind that development of the telecom infrastructure holds out a considerable promise for the development ofdelhi because of the economic benefits it will bring to state.. As far as telecommunication facilities in J state are concerned, there are over 16000 STD booths/PCOs, 366 telephone exchanges and 9 telegraph offices (CTOs/DTOs) regulating the services. The number of telephone connections has gone beyond 9 lakhs including phones of mobile segment. When this is compared with the phone level of 2001-02, it is interesting to note that there has been an addition of almost 7 lakh connections between 2001-02 and 2005-06. The mobile phones have contributed 67% to this growth. With mobile services launched only in August 2003, Delhi state has been a late entrant into the telecom sector.

Nonetheless, the teledensity of Delhi at the end of June 2006 was reported at 11, marginally short of the national average of 13. 7. we cannot ignore the fact that telecom penetration has been uneven across the urban and rural segments. While the urban tele-density of Delhi at 39. 86 compares favourably with the national average of 42. 65, rural tele-density at 0. 84 is much below the national average of 1. 85. However it is interesting to note that the average revenue per user (ARPU) for J at Rs. 440. 56 is much higher than the national average of Rs. 339. 49. This means that growth of telecom sector in Delhi is not likely to be hampered by demand side constraints.

Falling cost of handsets and accessories coupled with innovative tariff plans has made initial entry cost affordable and this factor is largely contributing to the growing demand of phone connections. Take the case of mobile phone. This segment of phones is vital in a state like ours. These are the primary form of telecommunication in most emerging economies as on date. In other words, mobile phones have the capacity to revolutionize even small and tiny businesses and the people associated with these businesses can improve their earnings at a faster rate. Its efficient use can save time and money and provide quicker access to information. It’s no longer just something that only the rich can afford. Now, it’s a basic means of communication.

If such type of telecom facilities is made cost effective, it can help in fuelling rapid growth all round in the State. The main constraint to growth of telecom in the state stems from the supply side (service providers). These have resulted in the limitation on the expansion of services into unreached areas of the state. Even there has been no quality improvement of existing services. The lack of proper coordination between the three mobile service providers in the state, BSNL, Airtel, and Aircel, is creating difficulties for subscribers as far as smooth connectivity is concerned. Calls between services, within services, and to landline phones are difficult to get through.

It is notable that Reliance, which has a large presence in the rest of country, has yet to start its operations in the state despite having a license to do so now for the past two years. There is need to encourage competitive pressures through multi-operator scenario in J. As per the existing TRAI guidelines operators are obliged to provide connectivity to other operators at points of interconnect (POI) on their respective networks. AIRTEL has reported that BSNL which owns the largest network in J has not been able to comply with this obligation. There is urgent need that authorities who matter in telecom department take cognizance of this and sort out the impasse.

Let them bear in mind that interconnectivity is vital for healthy competition among service providers as it will improve the quality of service and cut down the cost. High capital and operating costs of telecom services in the state are put as major hindrances in the smooth development of the sector. The service providers also point out mountainous terrain that hinders the telecom signal thereby limiting the reach of each telecom tower. COMPANY PROFILE AIRCEL Maxis’ expansion into Indonesia and India is another milestone in our aspiration to be the regional communications leader of choice. The acquisition of a 51% stake in PT Natrindo Telepon Seluler (NTS), Indonesia and a 74% equity interest in Aircel, India provides new growth opportunities for Maxis.

These acquisitions give Maxis a strong foothold in two of the world’s most attractive high-growth, low-penetration markets. This marks the beginning of the new world of Maxis – a world beyond voice, and beyond borders |  | | |Maxis in INDONESIA | | | | | |On 29th April 2005, Maxis acquired 51% of PT Natrindo Telepon Seluler. Maxis is currently in the middle of rolling out a Java wide network to establish the | | |company as a national operator.

Th initial launch phase encompasses 1,300 BTS, providing both 2G and 3G services. NTS expects to have up to 480 employees by| | |launch date and to increase significantly upon launching. | | |Maxis in India Maxis completed the acquisition of a 74% stake in Aircel on March 21, 2006. Currently, Aircel has operations in 9 of the 23-telecom circles | | |of India – Chennai, Tamil Nadu, West Bengal, Orissa, Assam, North East, Jammu and Kashmir, Himachal Pradesh and Bihar. Aircel launched its services in Bihar| | |and Himachal Pradesh in December 2006 and also recently received the licenses to operate in the remaining 14-telecom circles of India giving it the ability | | |to become a pan-India player. | | | | |Maxis’ expansion into Indonesia and India is another milestone in our aspiration to be the regional communications leader of choice. The acquisition of a | | |51% stake in PT Natrindo Telepon Seluler (NTS), Indonesia and a 74% equity interest in Aircel, India provides new growth opportunities for Maxis. These | | |acquisitions give Maxis a strong foothold in two of the world’s most attractive high-growth, low-penetration markets. This marks the beginning of the new | | |world of Maxis – a world beyond voice, and beyond borders. MAP Maxis in Indonesia On 29th April 2005, Maxis acquired 51% of PT Natrindo Telepon Seluler. | | |Maxis is currently in the middle of rolling out a Java wide network to establish the company as a national operator.

The initial launch phase encompasses | | |1,300 BTS, providing both 2G and 3G services. NTS expects to have up to 480 employees by launch date and to increase significantly upon launching. Maxis in | | |India Maxis completed the acquisition of a 74% stake in Aircel on March 21, 2006. Currently, Aircel has operations in 9 of the 23 telecom circles of India -| | |Chennai, Tamil Nadu, West Bengal, Orissa, Assam, North East, Jammu and Kashmir, Himachal Pradesh and Bihar. Aircel launched its services in Bihar and | | |Himachal Pradesh in December 2006 and also recently received the licenses to operate in the remaining 14 telecom circles of India giving it the ability to | | |become a pan-India player.

Aircel expects to aggressively grow its subscriber base in India and is developing a broad range of new propositions for its | | |customers – from branding, to increased network coverage, to innovative product and service offerings, to refreshing customer experience. As of 31st | | |December 2006, Aircel serves more than 4. 5 million subscribers with a network comprising of almost 4,000 BTS. Aircel continues to be the market leader in | | |Tamil Nadu and Chennai circle. Aircel’s network provides 2G and GPRS services, and is EDGE capable. Aircel is also currently in the process of conducting 3G| | |Trials across different cities in India. In addition, Aircel is the first cellular operator in India to launch wireless Internet services using WiMAX | | |technology. It aims to immediately extend its WiMax coverage to over 20 cities to serve enterprise broadband customers.

Over the next few quarters, India is| | |expected to add new subscribers at the rate of 5 to 6 million per month. India offers huge opportunities for Aircel given the current low mobile | | |penetrations levels as well as challenges in terms of its geographic spread and low ARPU levels. | | |Aircel expects to aggressively grow its subscriber base in India and is developing a broad range of new propositions for its customers – from branding, to | | |increased network coverage, to innovative product and service offerings, to refreshing customer experience. | | |As of 31st December 2006, Aircel serves more than 4. 5 million subscribers with a network comprising of almost 4,000 BTS.

Aircel continues to be the market | | |leader in Tamil Nadu and Chennai circle. | | |Aircel’s network provides 2G and GPRS services, and is EDGE capable. Aircel is also currently in the process of conducting 3G Trials across different cities| | |in India. In addition, Aircel is the first cellular operator in India to launch wireless Internet services using WiMAX technology. It aims to immediately | | |extend its WiMax coverage to over 20 cities to serve enterprise broadband customers. | | | | | |Over the next few quarters, India is expected to add new subscribers at the rate of 5 to 6 million per month.

India offers huge opportunities for Aircel | | |given the current low mobile penetrations levels as well as challenges in terms of its geographic spread and low ARPU levels | | | | | | | | | | | | | | | | | | | | |Aircel’s current and proposed footprint is illustrated below. | | | | | | | | MISSION STATEMENT We are conditionally committed to exceeding our customer’s expectations. e will provide network and services that are innovative and reliable, allowing our customers any time anywhere communications. we will attract, develop and retain an exceptional team of people. We are committed to enhancing the quality of real life in the community in which we operate. Wewill meet the financial expectation of our shareholders. OUR GOALS AND VALUES CUSTOMERS :our customers are our most valued assets. we will strive to exceed their expectations at all time by providing them with superior services that embody value, innovation, quality and care. PEOPLE: our people are our greatest resources. we will attract, train and retain the best. we will challenge them to develop their full potential in the context of our company goals.

INTEGRITY: We will maintain and strive for the highest levels of personal and professional integrity and honesty in all ours dealings. We will keep our promises. RESPECT: We will treat with respect & dignity all people we deal with. EXCELLENCE: We are committed to excellence in all what we do. there will be no place for mediocrity. WORK: We will promote a work environment that embraces creativity, promotes empowerment, encourages team work, innovation, prudent risk taking, honest and open communication and respectful iconoclasm QUALITY: the hallmark of our internal and external outputs and processes will be quality. this will pervade every aspect of our functioning. The various depts. and their functions in Delhi NCR are as Sales and Marketing Department

Customer Service Department Technical/networking Department Commercial Department Finance Department Revenue Assurance Department Human Resources Department Administration Department Vigilance Department Value Added Services When a network operators offers services using: • existing customer base • existing infrastructure • They add more value to the relationship between consumer and operator. Hence, these services are known as Value Added Services. Broad Classification of VAS offerings:- • Messaging – short codes, MMS, email • Music – mono tones, true tones, poly tones, mp3 tones, full songs, CRBT etc • Imagery – wallpapers, animations, screensavers, videos etc. Games – Branded, Unbranded • Text based – stock quotes, news etc. • Voice station • Caller ringtones VALUE ADDED SERVICES PROVIDED BY AIRCEL |VAS | | | |Delhi & NCR | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |3. Voice Station | | | |» Voice Station | | | |Aircel 55500 service offers you a host of never before services – from music on your mobile to tit-bits about celebrities. | |All you need to do is call 55500 from your Aircel mobile and follow the simple instructions to enter a world of information | |and entertainment. The service recognizes your voice and gives information based on the command given by you. |Music Messaging and Ringtones | |Prayers | |Perform pooja from your Aircel mobile. Listen to an exhaustive collection of devotional songs like Supbrapatham, Bhajans, | |Amman Songs, and Gayathri & Gurbani | |. | |Astrology Service | |You can check your horoscope for the day, by entering your birth date. Astro info is updated every day. | | | |News | |Get the latest news updates.

Information is available across Regional, State, National and International categories. | | | |Calls to 55500 services will be charged at Rs. 6/min. Conditions Apply. | | | |Sports | |Get the latest news and information about the happening in the sports world, like live commentary, scores, schedules etc | |. | |Jokes | |Smile with us by listening to the jokes. We have exhaustive collection which will make you burst in laughter for sure. | |Call rates Rs. 6/min. | | | | | | | | 3. 3 Missed Call Alerts Want to know who called you when your mobile was switched off or out of coverage area? Just subscribe to the Aircel Missed Call Alerts service (MCA). There are two simple ways of doing it. After subscribing to the monthly service, you will receive alerts on your mobile for all the missed calls at no extra cost. Pay as you use option You also have the option of not subscribing to the service. In this option you can get the missed call alerts for the every request you send. SMS Charges to 5899903: Rs. 3/SMS | 3. Dialer Tunes | | | |Aircel introduces Dialer Tunes! Get rid of boring Tring Tring and make your callers listen to latest tunes. Dial 56565, Registration Rs. 30/month, call Rs. 6/min & Rs. 15/song.. | |Song validity is for a period of 90 days. | |“Dialer tune” is a special service through which the calling party can hear a song or music instead of the default “Tring Tring” tune. | |In order to get the Dialer service activated the subscriber has to register with the Dialer Tune service by calling 56565 and follow the instructions played by IVR.

Once the | |user has registered for DIALER TUNE service the calling party will hear the song instead of the default ringing tune (“Tring Tring”). Subscriber will be confirmed with an SMS | |message of service activation. | | | |To change the selected song or to dedicate a special song to another user the subscriber has to call 56565 and follow the instructions which will play by IVR, While selecting | |the song it will play, whether to dedicate to all or a particular number. Through this the subscriber can dedicate a specific song for a specific subscriber.. |Whenever this subscriber calls, he or she will get to hear the special song dedicated to the calling number. Select a new song and either assigns the song for all the callers | |or to particular caller so that the previous song will be replaced with the newly selected song. Subscriber will be confirmed with an SMS message of song change. | |The user can deregister from the DIALER TUNE service by calling the short code 56565

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Aircel Case Study Essay
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ACKNOWLEDGEMT The successful culmination of any project is due to the multi faced help directly or indirectly rendered by various people during the execution of the project. I express my foremost gratitude to AIRCEL DISHNET COMPANY Ltd Jammu branch ,and Collage of management, School of business, for providing me an opportunity to gather information for my project. AT DISHNET WIRELESS LTD. AIRCEL

The people who actually facilitated this piece of study, taught me the corporate culture and

2018-10-21 07:02:18
Aircel Case Study Essay
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