EXECUTIVE SUMMARY We are in the era of entertainment through mobile handsets. Downloading a ring tone watching your favorite movie of tracking cricket score the list of activity that you can do using your cell phone is endless. To supplement stagnant voice revenues cellular operator are now turning to VAS to boost revenues in both data and value added voice service. Both Air Tel and Vodafone has deep rooted presence in the Indian telecom sector through there wide product offerings and excellent distribution network In this report I have tried to analyze the present scenario of Indian telecom sector the real aim of the project is to study the satisfaction and response towards services provided by Air Tel and Vodafone, but many sub objectives are also included under this project so as to make it comprehensive one. I complement this with the internal study of the companies – history, business areas etc. to analyze how well poised the company are to complete or rather just exist in this market that is proving itself to be the most competitive in post liberalization Indian economy. 1
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EXECUTIVE SUMMARY
We are in the era of entertainment through mobile handsets. Downloading a ring tone
watching your favorite movie of tracking cricket score the list of activity that you can do
using your cell phone is endless. To supplement stagnant voice revenues cellular operator
are now turning to VAS to boost revenues in both data and value added voice service.
Both Air Tel and Vodafone has deep rooted presence in the Indian telecom sector through
there wide product offerings and excellent distribution network
In this report I have tried to analyze the present scenario of Indian telecom sector the real
aim of the project is to study the satisfaction and response towards services provided by
Air Tel and Vodafone, but many sub objectives are also included under this project so as
to make it comprehensive one.
I complement this with the internal study of the companies – history, business areas etc.
to analyze how well poised the company are to complete or rather just exist in this market
that is proving itself to be the most competitive in post liberalization Indian economy.
Primary data was collected in which focus group study was conducted to design the
customer survey questionnaire with a sample size of 50 respondents. This survey was
conducted in Dehradun, secondary data was collected through websites articles etc. Data
thus collected was analyzed and report.
1
Introduction
The telecommunications sector has become an important key in the development of the economy
of developing as well as developed countries. This results from the saturated markets, de-
regulation of telecommunications industry (removal of monopoly rights, especially enjoyed by
state-owned telecoms networks), increasing number of mobile service providers, enormous
technical development and intense market competition. Szyperski & Loebbecke (1999) wrote
that this increasing economic importance and benefits of telecommunications firms motivated
many management scholars (especially marketing experts) to devote attention to this sector.
Wilfert (1999); Gerpott (1998); and Booz. Allen and Hamilton (1995) pointed out that marketing
strategies are very important in telecommunications services because once customers have
subscribed to a particular telecommunications service provider, their long-term link with this
provider is of greater importance to the success of the company than they are in other industry
sectors. Hence, service providers need to form a continous lasting relationship with their
customers to know them better and satisfy their needs adequately. to maximize customer
satisfaction, focus should be on service quality and customer-oriented services. Switching barrier
on the other hand is affected by switching costs (e.g. loss cost, move-in cost, and interpersonal
relationships) and was revealed to have an adjustment effect on customer satisfaction and
customer loyalty.
customer satisfaction is the only single measure that better capture the range of services, prices
and quality and more so, this measure is an important performance indicator useful for both
regulators and mobile service providers.
In this dissertation report, I have conducted a comparative customer satisfaction between two
major telecom service providers in India. I tried to know the factors that satisfy/dissatisfy a
mobile user. Airtel and Vodafone are the two major market players in telecom industry of India.
I have conducted the survey from both of these customers. I have conducted this survey in
Dehradun with the help of 50 respondents.
2
Literature Review
Customer satisfaction, as a construct, has been fundamental to marketing for over three decades.
As early as 1960, Keith (1960) defined marketing as “satisfying the needs and desires of the
consumer”. Hunt (1982) reported that by the 1970s, interest in customer satisfaction had increase
to such an extent that over 500 studies were published. This trend continued and by 1992,
Peterson and Wilson estimated the amount of academic and trade articles on customer
satisfaction to be over 15,000.
Several studies have shown that it costs about five times to gain a new customer as it does to
keep an existing customer (Naumann, 1995) and this results into more interest in customer
relationships. Thus, several companies are adopting customer satisfaction as their operational
goal with a carefully designed framework. Hill and Alexander (2000) wrote in their book that
“companies now have big investment in database marketing, relationship management and
customer planning to move closer to their customers”. Jones and Sasser (1995) wrote that
“achieving customer satisfaction is the main goal for most service firms today”.
Increasing customer satisfaction has been shown to directly affect companies’ market
share, which leads to improved profits, positive recommendation, lower marketing
expenditures (Reichheld, 1996; Heskett et al., 1997), and greatly impact the corporate
image and survival (Pizam and Ellis, 1999).
Customers who perceive that they receive value for money are more satisfied than
customers who do not perceive they receive value for money.
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Several studies have shown that perceived value is significant determinant of customer
satisfaction (Anderson et al. (1994); Ravald and Gronroos (1996); and McDougall and
Levesque, 2000). Turel and Serenko (2006) in their investigation of mobile services in
Canada suggested that the degree of perceived value is a key factor affecting customer
satisfaction.
Past research studies suggested that there are four features, which are key drivers of the
customer value of cellular services: network quality, price, customer care, and personal
International Relation and RE & Administration & Personnel.Officers are selected from the
premier Indian Administrative Service and Indian Revenue Service and also from the Indian
Telecom Service.
Bangalore Regional Office
TRAI Bangalore Regional Office is the office set up for ensuring compliance of tariff related
guidelines and effective monitoring of retail tariff of telecommunications, broadcasting and cable
services in the Kerala and Karnataka region. The current Advisor, Telecom Regulatory Authority
of India is Dr. Sibichen K Mathew IRS. Earlier TRAI has been operating only from Delhi and
monitors performance of operators by relying on the data received from service providers and its
own agencies. Now, the new office will help the regulator in assessing required information
directly on the field. The Advisor is assisted by two Dy Advisors and 2 Senior Research Officers.
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COMPANIES PROFILE
AIRTEL
AND
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VODAFONE
Bharti Airtel
Bharti Airtel Limited, commonly known as Airtel, is an Indian multinational telecommunication
services, company headquartered in New Delhi, India. It operates in 20 countries across South
Asia, Africa, and the Channel Islands. Airtel has a GSM network in all countries in which it
operates, providing 2G, 3G and 4G services depending upon the country of operation. Airtel is
the world’s second largest mobile telecommunications company by subscribers, with over 275
million subscribers across 20 countries as of July 2013. It is the largest cellular service provider
in India, with 192.22 million subscribers as of August 2013. Airtel is the Second largest in-
country mobile operator by subscriber base, behind China Mobile.
Airtel is credited with pioneering the business strategy of outsourcing all of its business
operations except marketing, sales and finance and building the 'minutes factory' model of low
cost and high volumes. The strategy has since been copied by several operators. Its network—
base stations, microwave links, etc.—is maintained by Ericsson and Nokia whereas IT support is
provided by IBM and transmission towers are maintained by another company (Bharti Infratel
Ltd. in India). Ericsson agreed for the first time to be paid by the minute for installation and
maintenance of their equipment rather than being paid up front, which allowed Airtel to provide
low call rates of 1/minute (US$0.02/minute). During the last financial year (2009–10),
Bharti negotiated for its strategic partner Alcatel-Lucent to manage the network infrastructure for
the tele-media business. On 31 May 2012, Bharti Airtel awarded the three-year contract to
Alcatel-Lucent for setting up an Internet Protocol access network (mobile backhaul) across the
country. This would help consumer’s access internet at faster speed and high quality internet
browsing on mobile handsets.
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Sunil Bharti Mittal founded the Bharti Group. In 1983, Mittal was in an agreement with
Germany's Siemens to manufacture push-button telephone models for the Indian market. In
1986, Mittal incorporated Bharti Telecom Limited (BTL), and his company became the first in
India to offer push-button telephones, establishing the basis of Bharti Enterprises. By the early
1990s, Sunil Mittal had also launched the country's first fax machines and its first cordless
telephones. In 1992, Mittal won a bid to build a cellular phone network in Delhi. In 1995, Mittal
incorporated the cellular operations as Bharti Tele-Ventures and launched service in Delhi.
In 1996, cellular service was extended to Himachal Pradesh. In 1999, Bharti Enterprises acquired
control of JT Holdings, and extended cellular operations to Karnataka and Andhra Pradesh. In
2000, Bharti acquired control of Skycell Communications, in Chennai. In 2001, the company
acquired control of Spice Cell in Calcutta. Bharti Enterprises went public in 2002, and the
company was listed on Bombay Stock Exchange and National Stock Exchange of India. In 2003,
the cellular phone operations were rebranded under the single Airtel brand. In 2004, Bharti
acquired control of Hexacom and entered Rajasthan. In 2005, Bharti extended its network to
Andaman and Nicobar. This expansion allowed it to offer voice services all across India. In
2009, Airtel launched its first international mobile network in Sri Lanka. In 2010, Airtel acquired
the African operations of the Kuwait based Zain Telecom. In March 2012, Airtel launched a
mobile operation in Rwanda.
Airtel launched "Hello Tunes", a Caller ring back tone service (CRBT), in July 2004 becoming
to the first operator in India to do so. The Airtel theme song, composed by A.R. Rahman, was the
most popular tune on that year.
On 26 February 2013, Airtel announced that it had deployed Ericsson's Mobile Broadband
Charging (MBC) solution and completely modernised its prepaid services for its subscribers in
India. As a part of the deal, Ericsson's multi service MBC suite allows prepaid customers to have
personalized profile based data charging plans. Prepaid customers will be able to customize their
data plans across mobility, fixed line and broadband by cross bundling across multiple domains
(2G, 3G, 4G/LTE & Wi-Fi). It will also offer flexible multi service charging in geographical
redundant mode, making Airtel the first operator to implement geographical redundancy at such
a large scale. In May 2013, Bharti Infotel paid Rs 50,000 as compensation to a customer "for
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unfair trade practices". The customer alleged that the company continued to aggressively demand
payment despite customer requests for disconnection of service.
Airtel's initial corporate structure concentrated on the hierarchy of the operations inside the
company as a whole. The structure depicted the corresponding operation/region of different in-
charges and it didn't hold anyone responsible for each of its services. So, the company found it
better to restructure its corporate hierarchy. The transformed organizational structure has two
distinct Customer Business Units (CBU) with clear focus on B2C (Business to Customer) and
B2B (Business to Business) segments. Bharti Airtel's B2C business unit will comprehensively
service the retail consumers, homes and small offices, by combining the erstwhile business units
– Mobile, Telemedia, Digital TV, and other emerging businesses (like M-commerce, M-health,
M-advertising etc.). The B2C organization will consist of Consumer Business and Market
Operations.
Airtel operates in the following countries:
Country Site Remarks
BangladeshAirtel Bangladesh
Airtel Bangladesh had about 8 million customers as on Sep 2013.[
Burkina Faso
Airtel Burkina Faso
Airtel Burkina Faso is the dominant player with 1,433,000 customers representing 50% market share.
Chad Airtel ChadAirtel Chad is the No. 1 operator with 69% market share.
Democratic Republic of the Congo
Airtel DRCAirtel is the market leader with almost 5 million customers at the end of 2010.
Gabon Airtel GabonAirtel Gabon has 829,000 customers and its market share stood at 61%.
Ghana Airtel GhanaAirtel Ghana had about 1.76 million customers at the end of 2010.
India AirtelAirtel is the market leader with almost 193.4 million customers as on 30 Sep 2013.
Kenya Airtel KenyaAirtel Kenya is the second largest operator and has 4 million customers.
MadagascarAirtel Madagascar
Airtel holds second place in the mobile telecom market in Madagascar, has a 39% market share and over 1.4 million customers.
Malawi Airtel Airtel Malawi is the market leader with a
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Malawi market share of 72%.
Niger Airtel NigerAirtel Niger is the market leader with a 68% market share.
Nigeria Airtel NigeriaRepublic of the Congo
Airtel Congo B
Airtel Congo is the market leader with a 55% market share.
RwandaAirtel Rwanda
Airtel launched services in Rwanda on 30 March 2012.
SeychellesAirtel Seychelles
Airtel is the leading comprehensive telecommunications services providers with over 55% market share of mobile market in Seychelles.
Sierra Leone
Airtel Sierra Leone
Sri LankaAirtel Sri Lanka
Airtel Sri Lanka commenced operations on 12 January 2009. It had about 1.8 million mobile customers at the end of 2010.
TanzaniaAirtel Tanzania
Airtel Tanzania is the market leader with a 38% market share.
UgandaAirtel Uganda
Airtel Uganda stands as the No. 2 operator with a market share of 38%.
ZambiaAirtel Zambia
Airtel Zambia is the market leader with 69% market share.]
Channel Islands† : JerseyGuernsey
Airtel DRCAirtel operates in the Channel Islands under the brand name Airtel–Vodafone through an agreement with Vodafone.
†Jersey and Guernsey are British Crown Dependencies. They are not independent countries. Therefore, Airtel's countries of operation is considered to be 20.
Mobile Services:
Airtel operates in all telecom circles of India. Its network is present in 5,121 census towns and
457,053 non-census towns and villages, covering approximately 86.6% of the country's
population as of September 2012. Airtel is the largest operator in rural India with 83.82 million
subscribers as of April 2013.
Airtel is the 6th most valued brand according to an annual survey conducted by Brand
Finance and The Economic Times in 2010.
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3G :
On 18 May 2010, the 3G spectrum auction was completed and Airtel paid the Indian government
122.95 billion (US$2.1 billion) for spectrum in 13 circles, the most amount spent by an
operator in that auction. Airtel won 3G licences in 13 telecom circles of India: Delhi, Mumbai,
Andhra Pradesh, Karnataka, Tamil Nadu, Uttar Pradesh (West), Rajasthan, West Bengal,
Himachal Pradesh, Bihar, Assam, North East, and Jammu & Kashmir. Airtel also operates 3G
services in Maharashtra & Goa and Kolkata circles through an agreement with Vodafone and in
Gujarat through an agreement with Idea. This gives Airtel a 3G presence in 15 out of 22 circles
in India. Airtel is fined by DoT 3.50 billion for not stopping offering 3G Services through
Roaming Pacts outside its Licensed Zones in Seven Circles.
On 20 September 2010, Bharti Airtel said that it had given contracts to Ericsson India, Nokia
Siemens Networks (NSN) and Huawei Technologies to set up infrastructure for providing 3G
services in the country. These vendors would plan, design, deploy and maintain 3G–HSPA (third
generation, high speed packet access) networks in 13 telecom circles where the company had
won 3G licences. While Airtel awarded network contracts for seven 3G circles to Ericsson India,
NSN would manage networks in three circles. Chinese telecom equipment vendor Huawei
Technologies was introduced as the third partner for three circles.
On 24 January 2011, Airtel launched 3G services in Bangalore, Karnataka – its largest circle by
revenue. With this launch, Airtel became the third private operator (fifth overall) to launch its 3G
services in the country following Tata Docomo and Reliance Communications. On 27 January
2011, Airtel launched 3G in Chennai and Coimbatore in Tamil Nadu. On 27 July 2011, 3G
services were launched in Kerala's 3 largest cities – Kochi, Kozhikode and Thrivanthapuram.
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Airtel 3G services are available in 200 cities through its network and in 500 cities through intra-
circle roaming arrangements with other operators. Airtel had about 5.4 million 3G customers of
which 4 million are 3G data customers as of September 2012.
4G :
On 19 May 2010, the broadband wireless access (BWA) or 4G spectrum auction in India ended.
Airtel paid 33.1436 billion (US$550 million) for spectrum in 4 circles: Maharashtra and
Goa, Karnataka, Punjab and Kolkata. The company was allocated 20 MHz of BWA spectrum in
2.3 GHz frequency band. Airtel's TD-LTE network is built and operated by ZTE in Kolkata and
Punjab, Huawei in Karnataka, and Nokia Siemens Networks in Maharashtra and Goa. On 10
April 2012, Airtel launched 4G services through dongles and modems using TD-LTE technology
in Kolkata, becoming the first company in India to offer 4G services. The Kolkata launch was
followed by launches in Bangalore (7 May 2012), Pune (18 October 2012), and Chandigarh,
Mohali and Panchkula (25 March 2013). Airtel obtained 4G licenses and spectrum in the telecom
circles of Delhi, Haryana, Kerala and Mumbai after acquiring Wireless Business Services Private
Limited, a joint venture founded by Qualcomm, which had won BWA spectrum in those circles
in the 4G spectrum auction.
Airtel launched 4G services on mobile from February 2014. The first city to get the service was
Bangalore. Airtel provides voice services for its TD-LTE subscribers through its existing GSM
network, which made it the first operator in India to combine voice with TD-LTE services
through GSM network. Airtel selected Nokia Siemens Networks to deploy its Circuit Switched
Fall Back (CSFB) voice solution in Airtel's TD-LTE network in Pune. With CSFB, the network
can transfer customers to GSM platform to make and receive voice calls while retaining the TD-
LTE network for data services.
Airtel had 100,000 4G subscribers as of January 2014.
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WiFi: Airtel has plans to launch WiFi services in India. It intends to start offering WiFi services
in Delhi NCR, Mumbai and Bangalore in initial phase. All plans will be on secure wireless
broadband internet with unlimited usage and will be session or time based. Users can use the
service by finding a hotspot, selecting 'airtel WiFi Zone', activating the voucher and then login to
start browsing.
Subscriber Base of Airtel
Bharti Airtel has about 243.336 million subscribers worldwide—232.95 million in India and
South Asia and 50.949 million in Africa as of the end of December 2011. The numbers include
mobile services subscribers in 19 countries and Indian Telemedia services and Digital services
subscribers.
India:
The Airtel wireless subscriber base according to Telecom Regulatory Authority of India (TRAI)
The Brand Trust Report 2011 published by Trust Research Advisory has ranked Vodafone as the
16th most trusted brand in India.
Controversies:
Vodafone India is involved in a Rs 11,000-crore tax dispute case with Indian government.
Timelines:
1992: Hutchison Whampoa and MAX group establish Hutchison Max
2000: Acquisition of Delhi operations and entry into Calcutta (now Kolkata) and Gujarat markets through Essar acquisition.
2001: Won auction for licences to operate GSM services in Karnataka, Andhra Pradesh and Chennai.
2003: Acquired AirCel Digilink (ADIL — ESSAR Subsidiary) which operated in Rajastan,
Uttar Pradesh East and Haryana telecom circles and rebranded it 'Hutch'
2004: Launched in three additional telecom circles of India namely Punjab, Uttar Pradesh (West) and West Bengal.
2005: Acquired BPL Mobile operations in 3 circles. This left BPL with operations only in Mumbai, where it still operates under the brand 'Loop Mobile'.
2007: Vodafone acquires a 67% stake in Hutchison Essar for $10.7 billion. The company is renamed Vodafone Essar. 'Hutch' is rebranded to 'Vodafone'.
2008: Vodafone acquires the licences in remaining 7 circles and starts its pending operations in Madhya Pradesh circle, as well as in Orissa, Assam, North East and Bihar.
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2011: Vodafone Group buys out its partner Essar from its Indian mobile phone business. It paid $5.46 billion to take Essar out of its 33% stake in the Indian subsidiary. It left Vodafone owning 74% of the Indian business.
2014: On 11 April Vodafone acquires 100 percent stake in Vodafone India.
Research Methodology
The methodology is the method used in the collecting the information, which assists for
the research problem.
Description of Research:-
Marketing research design specifies the procedure for conducting a research project. The
survey was conducted with the objective “To study the comparative analysis of customer
satisfaction of Airtel and Vodafone.
Data Collection Method:-
Primary data :-In this study the primary data is collected by survey research
i.e. systematic collection of information directly from the respondents.
Secondary Data: - The company’s websites and journals.
SAMPLING METHOD
Define Population:-Population is defined in terms of elements, sample units.
Sampling Unit:-Dehradun.
Sampling Frame:- Peoples from different areas in Dehradun.
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Sampling Method Selected:-Non Probability Sampling Method is chosen.
Sample Size:-50 Respondents
Instrument:-Questionnaire
DATA ANALYSIS AND INTERPRETATION
1) Which brand of connection are you using?
Brand
Airtel Vodafone
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2) How long you have been using this connection?
0-2 years48%
2-5 years41%
5-10 years12%
Vodafone
50
0-2 years; 14; 56%
2-5 years; 8; 32%
5-10 years; 3; 12%
Airtel
3. How do you come to know about your brand?
T. V.36%
Newspaper24%
Friends and relatives28%
Other sources12%
Airtel
T.V.67%
Newspaper4%
Friends and relatives13%
other sources17%
Vodafone
51
4. Which of the marketing/sales scheme attracts you while purchasing a connection?
Good network52%
Discount scheme16%
Service package20%
Any other12%
Airtel
52
Good network47%
Discount scheme26%
Service package22%
Any other5%
Vodafone
5. Are you satisfied with connection activation of your brand?
6. Are you satisfied with present network coverage of your service provider?
Highly satisfied60%
Satisfied24%
Dissatisfied16%
Airtel
54
Highly satisfied48%
Satisfied32%
Dissatisfied16%
Strongly dissatisfied5%
Vodafone
7. Are you satisfied with present call rates?
Highly satisfied8%
Satisfied40%
Dissatisfied32%
Highly dissatisfied20%
Airtel
55
Highly satisfied13%
Satisfied43%
Dissatisfied39%
Highly dissatisfied5%
Vodafone
8. Are you satisfied with the value added services and packages given by your service provider?
Highly satisfied11%
Satisfied41%Dissatisfied
30%
Strongly dissatisfied19%
Airtel
56
Highly satisfied12%
Sattisfied44%
Dissatisfied32%
Strongly dissattisfied12%
Vodafone
9. Are you satisfied with customer care services of your service provider?
Highly satisfied24%
Satisfied47%
Dissatisfied24%
Strongly dissatisfied6%
Airtel
57
Highly satisfied18%
Satisfied41%
Dissatisfied36%
Strongly dissatisfied5%
Vodafone
10. Will you recommend your service provider to some one?
Yes88%
No12%
Airtel
58
Yes80%
No20%
Vodafone
FINDINGS
1. From the graph 2nd it can be analyzed that Airtel has more old customers in compare to
Vodafone.
2. From graph 3rd it can be analyzed that most of respondents are aware about Airtel and
Vodafone through T.V. advertisement, Vodafone has created more awareness through
T.V. advertisement in compare to Airtel.
3. From the graph 4th it can be analyzed that good network attracts the customer in compare
to any other feature and Airtel has a better network in compare to Vodafone.
4. From the graph 5th it can be analyzed that Airtel has 10% more satisfied customer in
compare to Vodafone on the basis of connection activation.
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5. From the graph 6th it can be analyzed that Airtel has more satisfied customer on in
compare to Vodafone on the basis of present network coverage.
6. From the graph 7th it can be analyzed Vodafone has more satisfied customer on the basis
of present call rates.
7. From the graph 8th it can be analyzed that Vodafone has slightly more satisfied customer in compare to Airtel on the basis of Value added service provided by them.
8. From the graph 9th it can be analyzed that Airtel has slightly more satisfied customer in
compare to Vodafone on the basis of Customer care services.
9. From the graph 10th it can be analyzed that Airtel’s customer recommend to someone
more than Vodafone’s customer.
Recommendations
According the research I suggest Airtel and Vodafone that
1. Both Companies must focus on their advertisement.
2. Both Companies must focus on to their customer care services.
3. Both companies must focus on connection activation.
4. Airtel should provide more value added services.
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Conclusion
1. Airtel has more satisfied customer in compare to Vodafone.
2. Vodafone has more satisfied customer on the basis of present call rates.
3. Both companies needs to pay attention on customer care services.
Date of accessed all websites – 24/04/2014 & 27/04/2014
QuestionnaireDear Sir/Madam,
I Vishal Kumar, student of PGDM of Doon Business School – Global, Dehradun. I am doing my dissertation project on “Comparative analysis of customer satisfaction of Airtel and Vodafone.” Please give your precious time for filling these details. Name :-