Idea Cellular

IDEA Cellular

Project on

IDEA CELLULAR

MARKETING STRATEGY

IDEA Cellular

A Project

Report On

“A Study Of Consumer Durable Marketing Strategy For

"Idea Cellular"

With Special References to

Sanjeev Bhardwaj

Under The Guidance Of

Prof. Sanjeev Bhardwaj

Submitted To

Sanjeev Bhardwaj

University Of C.C.S Univ.

Roll No.- 9174526

Submitted By

Ruchi Goel

IDEA Cellular

STUDENT DECLARATION

IDEA Cellular

I hereby declare that this project report titled “The Study

of Consumer Durable Market with Special Reference to

PSN District” in Idea Cellular is executed as per

the course requirement for the post graduate

program in management. I have not been submitted

by me or any other person to any other university or

institution for degree or diploma. It’s my own work.

Ruchi Goel

IDEA Cellular

ACKNOWLEDGEMENT

IDEA Cellular

I express my sincere gratitude to my industry guide

channel development manager of Tata Communication

Ltd, for his able guidance, continuous support and

cooperation throughout my project, without which the

present work would not have been possible. I would

also like to thank the entire team of Idea Cellular,

for the constant support and help in the successful

completion of my project. Also, I am thankful to my

faculty guide Sanjeev Bhardwaj of my institute, for

his/her continued guidance and invaluable

encouragement.

IDEA Cellular

EXECUTIVE SUMMERY

IDEA Cellular

IDEA Cellular is a leading GSM mobile services operator in India with over 53

million subscribers, under brand IDEA.

IDEA Cellular is a publicly listed company, having listed on the Bombay Stock

Exchange (BSE) and the National Stock Exchange (NSE) in March2007. A

frontrunner in introducing revolutionary tariff plans, IDEA Cellular has the distinction

of offering the most customer friendly and competitive Pre Paid offerings, for the first

time in India.

Idea’s mission-

“We will delight our customers while meeting their individual communication needs

anytime, anywhere.” Idea’s mission tells us what they are and what they are doing at

the present. Their values are Integrity, commitment, passion, seamlessness and speed

are imperfect. Their values are in perfect sync with their mission because these values

are of paramount importance for the successful achievement of their mission. Idea’s

SWOT shows us that their parent company (Aditya Birla), existing footprint and that

obsession for innovation are their major strengths while their concentration on a few

circles, their late entry into many new circles and high debt-equity ratio can be cited

as their weaknesses. Falling regulations, growing rural market and 3G services are the

factors that bring new opportunities for Idea. New entrants (ever increasing number of

IDEA Cellular

telecom operators in India) and new technology (can be an opportunity as well) pose

threats for Idea. External environment analysis shows that competitive rivalry is very

high, bargaining power of customers is high, bargaining power of suppliers is low,

threat from new entrants and substitutes are also high. This clearly reveals the fact

that Idea is in an extremely competitiveenvironment. E.g. the ongoing tariff war in the

highly competitive Indian telecom market has been taking new shape with every

passing day and it has reached new heights now. Operators have been announcing

new promotional schemes including reduction in tariffs for voice call, slashing

roaming charges and many more such lucrative offers. Recently floated idea of per

second call rates has further aggravated competition among telecom players with

every operator seemingly imitating others for retaining their market share. Telecom

sector is all set to see more severe competition. New entrants, falling tariff rates, new

technology and new regulations (mobile number portability) are going to cause big

changes to this sector. In such a situation the way forward for a player like Idea, who

is not the market leader, is not to initiate a price war but to concentrate on new

differentiated products and services. They have come out with many ‘firsts’ in India

and that is what Idea is remembered for.

IDEA Cellular

INTRODUCTION

IDEA Cellular is a publicly listed company, having listed on the Bombay Stock

Exchange (BSE and the National Stock Exchange (NSE) in March 2007.Idea Cellular

is a leading GSM mobile service operator with pan India licenses. With a customer

base of over 36 million in 15 service areas, operations are soon expected to start in

Orissa and Tamil Nadu-the first steps in providing pan India services covering over

90% of India's telephony potential.

A frontrunner in introducing revolutionary tariff plans, IDEA Cellular has the

distinction of offering the most customer friendly and competitive Pre Paid offerings,

for the first time in India in an increasingly segmented market.

Customer Service and Innovation are the drivers of this Cellular Brand. A brand

known for many firsts, Idea was the first to launch GPRS and EDGE in the country.

Idea has received international recognition for its path-breaking innovations when it

IDEA Cellular

won the GSM Association Award for "Best Billing and Customer Care Solution" for

2 consecutive years. IDEA Cellular is part of the Aditya Birla Group, India's first

truly multinational corporation.

The group operates in 25 countries, and is anchored by over 100,000 employees

belonging to 25 nationalities. The Group has been adjudged 'The Best Employer in

India and among the Top 20 in Asia' by the Hewitt-Economic Times and Wall Street

Journal Study 2007.

Idea Cellular (Idea) is one of the leading providers of wireless communication

services in India. The company is part of the Aditya Birla Group. It provides wireless

and long distance voice and internet services to consumer and enterprise markets.

IDEA Cellular is a publicly listed company, having listed on the Bombay Stock

Exchange (BSE) and the National Stock Exchange(NSE) in March 2007.IDEA

Cellular is a leading GSM mobile services operator in India with over 53 million

subscribers, under brand IDEA. It is a pan India integrated GSM operator covering

the entire telephony landscape of the country. The company also has a presence in

telecom infrastructure market through a stake in Indus Towers and other subsidiaries.

The company primarily operates in India. It is headquartered in Mumbai, India. The

company recorded revenues of INR101, 484.1 million ($2,214.4 million) during the

financial year ended March 2009 (FY2009), an increase of 50.6% over 2008. The

operating profit of the company was INR14, 314.3 million($312.3 million) in

FY2009, an increase of 2.8% over 2008. Its net profit was INR9, 008.7

million($196.6 million) in FY2009, a decrease of 13.6% over 2008.A frontrunner in

introducing revolutionary tariff plans, IDEA Cellular has the distinction of offering

the most customer friendly and competitive Pre Paid offerings, for the first time in

India.

Mission- “We will delight our customers while meeting their individual

communication needs anytime, anywhere.”With a mission of delighting its customers

while meeting their individual communication needsanytime, anywhere, IDEA offers

IDEA Cellular

seamless coverage to roaming customers traveling to any partof the country, as well

as to international traveling customers across over 200 countries. IDEA Cellular has

partnership with over 400 operators to ensure that customers are always connected

while on the move, within the country or other parts of the world.

ABOUT US

IDEA Cellular

IDEA Cellular is a publicly listed company, having listed on BSE & NSE in March

2007. It is the 3rd largest mobile services operator in India with wireless revenue

market share at 15 %

in Q1 FY 2013, and

subscriber base of

over 117 million. Idea

has consistently

stayed ahead of the

industry in VLR

reporting, and has the

3rd highest base of

active subscribers.

Idea is a pan-India

integrated GSM

operator and has its

own NLD and ILD operations, and ISP license.

IDEA Cellular

With traffic in excess of a billion minutes a day, Idea ranks among the Top 10 country

operators in the world. Idea operates across all 22 service areas with 2G services and

3G services spread in over 3,000 towns and 10,000 villages.

Idea has a network of over 97,000 2G and 3G cell sites covering the entire length and

breadth of the country. Idea has nearly 4,000 Service Centres servicing Idea

subscribers across the country, including over 650 special Experience Zones for 3G

promotion. Idea’s service delivery platform is ISO 9001:2008 certified, making it the

only operator in the country to have this standard certification for all 22 service areas

and the corporate office.

Idea’s thought leadership on Mobile Number Portability (MNP) has enabled it to stay

as the top gainer with highest net gain, with over 3.7 million mobile users preferring

Idea network.

Idea’s strong growth in the Indian telephony market comes from its deep penetration

in non-urban & rural markets. It has the highest share of rural subscribers as a

percentage of total subscribers, amongst other GSM players. In fact, 2 out of every 3

new Idea subscribers come from rural/ semi-urban India.

Idea won the ‘Best Brand Campaign’ at the esteemed World Communication Awards

2011. It also recently won 3 Awards at the ET Telecom Awards 2012, in the

following categories Customer Experience Enhancement, Excellence in Marketing

and Innovative products, respectively.

It is also the winner of ‘The Emerging Company of the Year Award’ at The Economic

Times Corporate Excellence Awards 2009. IDEA Cellular also received the

prestigious Avaya GlobalConnect Award for being the ‘Most Customer Responsive

Company’ in the Telecom sector in the year 2010. The company has received several

other national and international recognitions for its path-breaking innovations in

mobile telephony products & services. It won the GSM Association Award for ‘Best

Billing and Customer Care Solution’ for 2 consecutive years. It was awarded ‘Mobile

IDEA Cellular

Operator of the Year Award – India’ for 2007 and 2008 at the Annual Asian Mobile

News Awards.

IDEA Cellular is an Aditya Birla Group Company, India’s first truly multinational

corporation. The group operates in 33 countries, and is anchored by more than

132,000 employees belonging to 42 nationalities.

IDEA Cellular

COMPANY PROFILE

IDEA Cellular Ltd is a leading GSM mobile services operator in India with

over 72 million subscribers, under brand IDEA. The company is a pan India

integrated GSM operator covering the entire telephony landscape of the country, and

has NLD and ILD operations. They offer affordable and world-class mobile services

to varied segments of mobile users. The company is an Aditya Birla Group

Company. They offers basic voice and short message service (SMS) services to

high-end value added and general packet radio service (GPRS) services, such as

Blackberry, Datacard, Mobile TV and Games. Their subsidiaries include Swinder

Singh Satara and Co Ltd, Aditya Birla Telecom Ltd, Idea Cellular Services Ltd, Idea

Cellular Infrastructure Services Ltd, Idea Cellular Towers Infrastructure Ltd and

Carlos Towers Ltd. IDEA Cellular Ltd was incorporated in the year 1995 with the

IDEA Cellular

name Birla Communications Ltd. The company obtained licenses for providing

GSM-based services in the Gujarat and Maharashtra Circles following the original

GSM license bidding process. In the year 1996, the company changed the name

from Birla Communication Ltd to Birla AT&T Communications Ltd following joint

venture between Grasim Industries and AT&T Corporation. In the year 1997, they

commenced operations in the Gujarat and Maharashtra Circles. In the year 2000, the

company merged with Tata Cellular Ltd, thereby acquired original license for the

Andhra Pradesh Circle. In the year 2001, they acquired the RPG Cellular Ltd and

consequently, they acquired the license for the Madhya Pradesh (including

Chattisgarh) Circle. Also, they obtained the license for providing GSM-based

services in the Delhi Circle following the fourth operator GSM license bidding

process. The name of the company was changed from Birla Communications Ltd to

Birla Tata AT&T Ltd. In the year 2002, the name of the company was further

changed to Idea Cellular Ltd and also, they launched the 'Idea' brand name. They

commenced commercial operation in Delhi circle. In June 3, 2002, they acquired

Swinder Singh Satara & Company Ltd through a share purchase agreement. In the

year 2004, the company acquired Escotel Mobile Communications Ltd

(subsequently renamed as Idea Mobile Communications Limited). They

commercially launched EDGE services 2005 and became the first operator in India

to do so. In the year 2005, the company won an Award for the 'Bill Flash' service at

GSM Association Awards in Barcelona, Spain. They sponsored the International

Indian Film Academy Awards. In the year 2006, the company became a part of the

Aditya Birla Group subsequent to the TATA Group transferring their entire

shareholding in the company to the Aditya Birla Group. They received Letter of

Intent from the DoT for a new UAS License for the Mumbai Circle. Also, they

received Letter of Intent from the DoT for a new UAS License for the Bihar Circle

through Aditya Birla Telecom Ltd. During the year 2006-07, the company

commenced National Long Distance service to carry part of the Company's own

IDEA Cellular

traffic. They launched commercial mobile services in the service areas of Rajasthan,

Uttar Pradesh (East) and Himachal Pradesh. They made Initial Public Offering and

raised Rs 25,000 million. They won an award for the 'CARE' service in the 'Best

Billing or Customer Care Solution' at the GSM Association Awards in Barcelona,

Spain. During the year, the company entered into a ten years business transformation

pact to integrate, innovate, and transform its business processes and IT infrastructure

with International Business Machines (IBM). They signed USD 500 million contract

with Nokia Siemens Networks to expand and strengthen the Company's network.

Also, they singed a USD 343 million contract for GSM expansion with Ericsson in

the Maharashtra, Gujarat, Rajasthan, Madhya Pradesh and Himachal Pradesh service

areas. In June 2006, Escorts Telecommunications Ltd became the subsidiary of the

company and subsequently was renamed as Idea Telecommunications Ltd. In

February 2007, they acquired 10,000,000 equity shares of Rs. 10 each of Aditya

Birla Telecom Ltd, a company holding License to operate in the telecom service

area of Bihar, for a purchase consideration of Rs 100 million. During the year 2007-

08, the company expanded their network from 4432 cities and towns to 13308 cities

and towns. They formed three new subsidiaries namely, Idea Cellular Services Ltd,

Idea Cellular Infrastructure Services Ltd and Idea Cellular Tower Infrastructure Ltd.

The main purpose of Idea Cellular Services Ltd is to provide manpower services to

Idea Cellular and Idea Cellular Infrastructure Services Ltd & Idea Cellular Tower

Infrastructure Ltd are meant for hiving off Idea's passive infrastructure network. In

December 2007, the company in association with Bharti Airtel and Vodafone Essar

formed a joint venture, namely Indus Tower to provide passive infrastructure

services in India to all operators on a non discretionary basis. In February 2008, the

company received the Unified Access Services Licences for the telecom service

areas of Punjab, Karnataka, Tamilnadu including Chennai, North East, West Bengal,

Kolkatta, Jammu & Kashmir, Orissa and Assam. During the year 2008-09, the

company acquired 40.8% stake in Spice Communications Ltd (Spice), having

IDEA Cellular

operations in Punjab and Karnataka service areas, from MCorp Global

Communications Pvt Ltd, the erstwhile promoters of Spice. They launched services

in Mumbai, Orissa, Tamil Nadu (including Chennai), Jammu & Kashmir, Kolkata

and West Bengal. In addition, Aditya Birla Telecom Ltd, a wholly owned

subsidiary, launched operations in Bihar (including Jharkhand) service area. During

the year, the company made a tie-up with Indian Oil Corporation, the largest

petroleum company in India, to use their petrol pumps and gas agencies for branding

and distribution of Idea SIM Cards and Recharge Vouchers. They were the first

operator in India to launch Nokia Life Tools in association with Nokia. They

launched 'International Airtime Transfer', a unique VAS service, whereby NRI

community can directly recharge the prepaid mobiles of Idea subscribers in India

through several international merchants and the web in Gulf, the USA and UK.

During the year, the company launched NetSetter Data Cards and Blackberry

solutions to cater to their data-savy consumer segments. As per the scheme of

arrangement, the company de-merged their passive infrastructure assets in the

service areas of Andhra Pradesh, Delhi, Gujarat, Uttar Pradesh (both East & West

including Uttarakhand), Haryana, Kerala, Rajasthan and Mumbai to Idea Cellular

Towers Infrastructure Ltd, a wholly owned subsidiary, with an appointed date of

January 1, 2009. During the year 2009-10, the company expanded their pan-India

presence through service launches in Orissa, Tamil Nadu, Jammu & Kashmir,

Kolkata, West Bengal, Assam and North East service areas, thereby making it a

nationwide service provider. As one of Idea's new VAS activities, the company

launched 'Buddy Recharge' - a unique peer-to-peer talk time transfer product. They

also launched Oongli Cricket during the IPL season. During the year, the company

launched a standardized self care portal 'CARE' which gives information to the

customer on products / tariffs and information of their account such as billed

amount, last recharge, last calls, unbilled amount, etc. They were the first operator to

launch 'Pre Tones', which is an innovative VAS service which allows the user to

IDEA Cellular

listen to the caller tones of his / her own choice while making an outgoing call

instead of listening to the respondent's caller tone. As per the scheme of

arrangement, the company telecom operations of the Bihar service area along with

certain assets and liabilities of Aditya Birla Telecom Ltd, a wholly owned subsidiary

was de-merged and transferred to the company with effect from March 1, 2010.

Spice Communications Ltd which had operations in the Punjab and Karnataka

service areas, and licenses for National and International Long Distance operations

was amalgamated with the company with effect from March 1, 2010. Also, Carlos

Towers Ltd became a subsidiary company pursuant to the amalgamation of Spice

Communications Ltd with the company. In April 2010, the company received a

License for

providing

pan India

Internet

Services

(ISP

License). In

the 3G

Spectrum

auction, the

company

emerged as

a winner in 11 Service Areas viz. Maharashtra, Gujarat, Andhra Pradesh, Kerala,

Punjab, Haryana, Uttar Pradesh (E), Uttar Pradesh (W), Madhya Pradesh, Himachal

Pradesh and Jammu & Kashmir, at a total cost of Rs 5,768.59 crore. During the year

under review, the company became a pan India operator following the roll out of

services in the remaining service areas of Orissa, Tamilnadu (including Chennai),

Jammu & Kashmir, West Bengal, Kolkata, North East and Assam. In January 20,

IDEA Cellular

2011, the Company launched mobile number portability (MNP), an invite to all

Indian mobile customers to change their wireless operator, while retaining their

mobile number. In March, 2011 Company launched 3G services in 9 out of these 11

service areas. The Company also entered into bilateral roaming arrangement for the

service areas of Mumbai, Bihar, Karnataka, Delhi, Kolkata and Tamil Nadu

(including Chennai), with leading quality operators, enabling it to offer 3G services

in 15 service areas. The company is in the process of launching 3G services in

Jammu and Kashmir service area. The 3G spectrum for Punjab service area has not

been earmarked by DoT to the Company for commercial usage as yet, and hence

Company has not been able to launch 3G service there until now. The company is

now installing 3G cell sites to capture the future wireless broadband data market.

IDEA Cellular

HISTORY

COMPANY HISTORY - IDEA CELLULAR LTD.

IDEA Cellular

We were incorporated as Birla Communications Limited on March 14, 1995

and granted a certificate of commencement of business on August 11, 1995. Our

registered office was in Mumbai, Maharashtra. Our name was changed to Birla AT&T

Communications Limited on May 30, 1996 following the execution of a joint venture

agreement dated December 5, 1995 between AT&T Corporation and Grasim

Industries Limited pursuant to which the Aditya Birla Group held 51% of our Equity

Share capital and AWS Group held 49% of our Equity Share capital. Our registered

office was transferred from Industry House, 1st Floor, 159 Church Gate Reclamation,

Mumbai 400 020, Maharashtra to Suman Tower, Plot No. 18, Sector 11, Gandhinagar

382011 Gujarat on October 22, 1996. With effect from January 1, 2001 following our

merger with Tata Cellular Limited the joint venture agreement between AT&T

Corporation and Grasim Industries Limited dated December 5, 1995 was replaced by

a shareholders agreement dated December 15, 2000 entered into between Grasim

Industries Limited on behalf of the Aditya Birla Group, Tata Industries Limited on

IDEA Cellular

behalf of the Tata Group and AT&T Wireless Services Inc. on behalf of the AWS

Group following which our name was changed to Birla Tata AT&T Limited on

November 6, 2001. Consequent to the introduction of the “Idea” brand, our name was

changed to Idea Cellular Limited on May 1, 2002. The AWS Group exited from the

Company on September 28, 2005 by selling 371,780,740 Equity Shares of the

Company, which constituted 50% of the holding of AT&T Cellular Private Limited in

our equity share capital, to ABNL and by transferring the remaining 371,780,750

Equity Shares to Tata Industries Limited. The Tata Group ceased to be a shareholder

of the Company on June 20, 2006 when Tata Industries Limited and Apex

Investments (Mauritius) Holding Private Limited (formerly known as AT&T Cellular

Private Limited) sold all their shares in the Company to the Aditya Birla Group.

On October 26, 2006, P5 Asia Investments (Mauritius) Limited (“P5 Asia”) acquired

14.60% of our Equity Share capital. Under a Governance and Exit Rights Agreement

dated October 23, 2006 between P5 Asia, ABNL and Birla TMT, so long as an initial

public offering has not occurred and P5 Asia holds no less than 10% of our Equity

Shares, ABNL and Birla TMT are required to procure that (a) our Company and its

Subsidiaries shall not take or pursue any of the following actions without P5 Asia’s

prior consent (such consent to be obtained in a board and/or shareholders resolution)

including in respect of (i) any merger with, acquisition of, or amalgamation or

consolidation with another company or business; (ii) assuming or permitting to exist

any borrowings or indebtedness in the nature of borrowings if the amount of all such

borrowings of our Company and its Subsidiaries would exceed Rs. 6,800 million; (iii)

entering into a new line of business; (iv) increasing our authorized or issued share

capital; or (v) entering into a joint venture and (b) our Company makes available to

P5 Asia certain financial information relating to our Company and its Subsidiaries

such as monthly management accounts, quarterly unconsolidated balance sheet and

profit and loss account and the annual audited consolidated balance sheets and profit

IDEA Cellular

and loss accounts.

P5 Asia also has a right to appoint one director to our Board so long as it holds at least

10% of our total issued and outstanding Equity Shares. Mr. Biswajit Subramanian has

been appointed to our Board by P5 Asia pursuant to the exercise of the above right. In

addition, any IPO of our Equity Shares requires P5 Asia’s written consent, and,

further, in any such IPO, P5 Asia has the right to offer for sale such number of Equity

Shares representing up to 10% of the total Equity Shares which are held by it. By its

letters dated December 2, 2006 to ABNL and Birla TMT, P5 Asia has given its

written consent for the Issue and has confirmed that it does not intend to offer for sale

any of the Equity Shares held by it in such Issue.

We, either directly or through our Subsidiaries, provide mobile services in the Andhra

Pradesh, Delhi, Gujarat, Haryana, Kerala, Madhiya Pradesh, Maharashtra and Uttar

Pradesh (West) Circles, and have recently launched services and as such are in the

process of fully rolling-out our network in the Uttar Pradesh (East), Rajasthan and

Himachal Pradesh Circles pursuant to licenses issued by the DoT.

IDEA Cellular

MAJOR EVENTS

The chronology of key events of the Company from incorporation is set out below:

1995: Incorporated as Birla Communications Limited Obtained licenses for providing

GSM-based services in the Gujarat and Maharashtra Circles following the original

GSM license bidding process

1996: Changed name to Birla AT&T Communications Limited following joint

venture between Grasim Industries and AT&T Corporation

1997: Commenced operations in the Gujarat and Maharashtra Circles

1999: Migrated to revenues share license fee regime under New Telecommunications

Policy (“NTP”)

2000: Merged with Tata Cellular Limited, thereby acquiring original license for the

Andhra Pradesh Circle

IDEA Cellular

2001: Acquired RPG Cellular Limited and consequently the license for the Madhya

Pradesh (including Chattisgarh) Circle Changed name to Birla Tata AT&T Limited

2001: Obtained license for providing GSM-based services in the Delhi Circle

following the fourth operator GSM license bidding process

2002: Changed name to Idea Cellular Limited and launched “Idea” brand name .

Commenced commercial operations in Delhi Circle . Reached the one million

subscriber mark

2003: Reached the two million subscriber mark

2004: Completed debt restructuring for the then existing debt facilities and additional

funding for the Delhi Circle. Acquired Escotel Mobile Communications Limited

(subsequently renamed as Idea Mobile Communications Limited) Reached the four

million subscriber mark First operator in India to commercially launch EDGE

services

2005: -Reached the five million subscriber mark -Turned profit positive

-Won an award for the “Bill Flash” service at the GSM Association Awards in

Barcelona, Spain Sponsored the International Indian Film Academy Awards

-Sponsored the International Indian Film Academy Awards

2006: -Became part of the Aditya Birla Group subsequent to the TATA Group

transferring its entire shareholding in the Company to the Aditya Birla Group

-Acquired Escorts Telecommunications Limited (subsequently renamed as Idea

Telecommunications Limited) -Restructuring of debt -Launch of the New Circles

-Reached the 10 million subscriber mark -Received Letter of Intent from the DoT for

a new UAS License for the Mumbai Circle.

IDEA Cellular

-Received Letter of Intent from the DoT for a new UAS License for the Bihar

Circle through Aditya Birla Telecom Limited. ABNL, the parent of Aditya

-Birla Telecom Limited, pursuant to a letter dated November 22, 2006, agreed to

transfer its entire shareholding in Aditya Birla Telecom Limited to the Company for

the consideration of Rs. 100 million.

2007:- Won an award for the "CARE" service in the "Best Billing or Customer Care

Solution" at the GSM Association Awards in Barcelona, Spain -Initial Public Offering

aggregating to Rs. 28,187 million and Listing of Equity Shares on the Bombay Stock

Exchange and the National Stock Exchange -Merger of seven subsidiaries with Idea

Cellular Limited -Reached the twenty million subscriber mark

2008- Idea Cellular Ltd has informed that the Board of Directors of the Company at

its meeting held on October 20, 2008, inter alia, has appointed the following persons

as Directors on the Board of the Company:

1. Mr. R C Bhargava - Independent Director (Additional Director)

2. Mr. P Murari - Independent Director - (Additional Director)

3. Dr. Hans Wijayasuriya - Non Executive Director (Nominee of TM International

Bhd).

-Idea acquired 9 licences for Punjab, Karnataka, Tamil Nadu & Chennai, West

Bengal, Orissa, Kolkata, Assam, North East and Jammu & Kashmir -Acquired Spice

Communications with the operating circles of Punjab and Karnataka

-Launched services in Mumbai metro in the largest single metro city launch, ever

-Launched services in Bihar

IDEA Cellular

2009 -Subscriber base as on December 31, 2009: 57,611,872

-Idea becomes a pan-India operator -Emerging Company of the Year - fastest

growing mobile operator in the world’s fastest growing telecom market

- IDEA wins prestigious Golden Peacock Award 2008 for My Gang

- IDEA and Babajob launch a unique wap portal for job seekers in the informal sector

- Firstsource & Idea announce a five-year Outsourcing Partnership.

2010- Idea Cellular - Auction of 2.1 GHz band (3G Spectrum)

- Idea Cellular ties up with Indian Railways

- Idea cellular wants to provide 3G services in 4 circles out of the 11 that it has, for

the same it has contacted Nokia Siemens Networks for deployment of equipment and

services.

- Nation gives a thumbs up to Idea Oongli Cricket

- IDEA Cellular recognized as the 'Most Customer Responsive Company' in the

Telecom sector by Avaya GlobalConnect

2011 - In order to provide assistance to 700 million mobile users regarding the

services of mobile number portability, idea cellular has started a helpline number just

before the three days of its launch.

- Launch of 'Idea MyCash', Powered by Axis Bank

- Idea introduces special International Roaming offer

- Idea user becomes first Indian to win ‘Panchkoti Mahamoney’ on KBC

- Idea wins ‘Best Brand Campaign’ at the prestigious World Communication Awards.

2012- Department of Telecom (DoT) has said that the proposal of Malaysia based

Axiata group to raise 1 per cent stake in Idea cellular to 21 per cent would not create

any fresh security threat for the country.

- Idea Cellular declared as winner in 2G Spectrum auction

- Idea, one of the leading telecom brands in India, continues to buzz in the global

IDEA Cellular

arena! It has now bagged the prestigious World Communication Awards 2012 (WCA)

under the ‘Best Brand Campaign’ category at the recently held awards ceremony in

London.

- Idea Cellular launched its new communication campaign, with a catchy jingle which

has immediately gone viral! ‘Idea Rings All India’, the new advertisement from Idea,

depicts the diversity, footprint, and seamlessness of our country, and how Idea’s

customers benefit from its pan-India network. - Idea wins at the prestigious World

Communication Awards 2012, second year consecutively

- ‘Ivory’ from Idea most affordable Android 4.0 Smartphone launched in India.

IDEA Cellular

Inception and growth

In 2000, Tata Cellular was a company providing mobile services in

Andhra Pradesh. When Birla-AT&T brought Maharashtra and

Gujarat to the table, the merger of these two entities was a reality.

Thus Birla-Tata-AT&T, popularly known as Batata, was born and

was later rebranded as IDEA.

Then Idea set sights on RPG’s operations in Madhya Pradesh which

was successfully acquired, helping Batata have a million subscribers,

and the licence to be the fourth operator in Delhi was clinched.

In 2004, Idea (the company had by then been rechristened) bought

over the Escorts group’s Escotel gaining Haryana, Uttar Pradesh

(West) and Kerala — and licences for three more — UP (East),

Rajasthan and Himachal Pradesh. By the end of that year, four

million Indians were on the company’s network. In 2005, AT&T sold

its investment in Idea, and the year after Tatas also bid good bye to

pursue an independent telecom business. And Idea was left only with

one promoter, the AV Birla group. Rs 2,700 crore adding Punjab and

Karnataka circles. Modi’s joint venture partner, Telekom Malaysia,

invested Rs 7,000 crore for a 14.99% stake in Idea. Just around then,

Idea’s subsidiary, Aditya Birla Telecom sold a 20% stake to US-

based Providence Equity Partners for over Rs 2,0000 crore.

IDEA Cellular

Holding

Initially the Birlas, the Tatas and AT&T Wireless each held one-third

equity in the company. But following AT&T Wireless' merger with

Cingular Wireless in 2004, Cingular decided to sell its 32.9% stake in

Idea. This stake was bought by both the Tatas and Birlas at 16.45%

each.

Tata's foray into the cellular market with its own subsidiary, Tata

Indicom, a CDMA-based mobile provider, cropped differences

between the Tatas and the Birlas. This dual holding by the Tatas also

became a major reason for the delay in Idea being granted a license to

operate in Mumbai. This was because as per Department of

Telecommunications (DOT) license norms, one promoter could not

have more than 10% stake in two companies operating in the same

circle and Tata Indicom was already operating in Mumbai when Idea

filed for its licence.

The Birlas thus approached the DOT and sought its intervention, and

the Tatas replied by saying that they would exit Idea but only for a

good price. On 10 April 2006, the Aditya Birla Group announced its

acquisition of the 48.18% stake held by the Tatas at Rs. 40.51 a share

amounting to Rs. 44.06 billion. While 15% of the 48.14% stake was

acquired by Aditya Birla Nuvo, a company in-charge of the Birlas'

new business initiatives, the remaining stake was acquired by Birla

IDEA Cellular

TMT holdings Private Ltd., an AV Birla family-owned company.

Currently, Aditya Birla Group holds 49.1% of the total shares of the

company. Malaysia based Axiata controls a 14.99% stake in the

company.

3G

On 19 May 2010, the 3G spectrum

auction in India ended. Idea paid

5768.59 crores for spectrum in 11

circles. The circles it will provide

3G in are Andhra Pradesh,

Gujarat, Haryana, Himachal

Pradesh, Jammu & Kashmir,

Kerala, Madhya Pradesh, Maharashtra & Goa, Punjab, Uttar Pradesh

(East) and Uttar Pradesh (West).

On 28 March 2011, Idea launched 3G services in Gujarat, Himachal

Pradesh and Madhya Pradesh. The launch cities were Ahmedabad,

Shimla and Indore. This makes Idea the sixth private operator (eighth

overall) to launch its 3G services in the country following Tata

Docomo, Reliance Communications, Airtel, Aircel and Vodafone.

IDEA Cellular

Idea currently supports up to 21.1 Mbit/s over 2G speeds of 256

kbit/s. However, different handsets support different speeds, from 384

kbit/s, 3.6 Mbit/s, 7.2 Mbit/s or 21.1 Mbit/s. Speeds also depend on

the 3G plan/recharge that users opt for.

The operator announced that IDEA 3G services will be available in

200 towns of 11 3G circles by mid-April 2011, progressively growing

at the rate of ten towns per day to cover 750 towns by mid-2011 and

4000 towns by the end of 2012.

Idea cellular has announced a cut of 70% in the tariff of its 3G

services.

On 23 November 2011 Idea Cellular launched two affordable 3G

handsets in India: Idea 3G Smartphone Blade priced at 7,992 and

Idea 3G Smartphone priced at 5,850. Both handsets are based on

Android 2.2 Froyo.

Idea has also launched a Dual-SIM Android smartphone in India on

June 15, 2012 named as Idea ID-918 at a price point of Rs.5,994

($108 approx.) It features Android v2.3 OS, 3.2-inch capacitive

touchscreen, 3G, Wi-Fi and 3.2 MP rear facing camera.

On 5 March 2013 Idea launched another 3G smartphone called Idea

Zeal 3G which is a Dual SIM phone with 3 Megapixel camera.

IDEA Cellular

Pan India 3G Coverage

Airtel, Vodafone and Idea have begun collaborating to provide 3G

coverage to their customers pan India. The agreement aims to

provides for these companies to offer 3G services to their customers

in circles where they have not won any spectrum. It is expected that

the 3 companies will be able to provide 3G services in all circles in

India except Orissa where the three have not won any spectrum.

Holding

Initially the Birlas, the Tatas and AT&T Wireless each held one-third

equity in the company. But following AT&T Wireless' merger with

Cingular Wireless in 2004, Cingular decided to sell its 32.9% stake in

Idea. This stake was bought by both the Tatas and Birlas at 16.45%

each.

Tata's foray into the cellular market with its own subsidiary, Tata

Indicom, a CDMA-based mobile provider, cropped differences

between the Tatas and the Birlas. This dual holding by the Tatas also

became a major reason for the delay in Idea being granted a license to

operate in Mumbai. This was because as per Department of

Telecommunications (DOT) license norms, one promoter could not

have more than 10% stake in two companies operating in the same

IDEA Cellular

circle and Tata Indicom was already operating in Mumbai when Idea

filed for its licence.

The Birlas thus approached the DOT and sought its intervention, and

the Tatas replied by saying that they would exit Idea but only for a

good price. On 10 April 2006, the Aditya Birla Group announced its

acquisition of the 48.18% stake held by the Tatas at Rs. 40.51 a share

amounting to Rs. 44.06 billion. While 15% of the 48.14% stake was

acquired by Aditya Birla Nuvo, a company in-charge of the Birlas'

new business initiatives, the remaining stake was acquired by Birla

TMT holdings Private Ltd., an AV Birla family-owned company.

Currently, Aditya Birla Group holds 49.1% of the total shares of the

company. Malaysia based Axiata controls a 14.99% stake in the

company.

3G

On 19 May 2010, the 3G spectrum auction in India ended. Idea paid

5768.59 crores for spectrum in 11 circles. The circles it will provide

3G in are Andhra Pradesh, Gujarat, Haryana, Himachal Pradesh,

Jammu & Kashmir, Kerala, Madhya Pradesh, Maharashtra & Goa,

Punjab, Uttar Pradesh (East) and Uttar Pradesh (West).

On 28 March 2011, Idea launched 3G services in Gujarat, Himachal

Pradesh and Madhya Pradesh. The launch cities were Ahmedabad,

IDEA Cellular

Shimla and Indore. This makes Idea the sixth private operator (eighth

overall) to launch its 3G services in the country following Tata

Docomo, Reliance Communications, Airtel, Aircel and Vodafone.

Idea currently supports up to 21.1 Mbit/s over 2G speeds of 256

kbit/s. However, different handsets support different speeds, from 384

kbit/s, 3.6 Mbit/s, 7.2 Mbit/s or 21.1 Mbit/s. Speeds also depend on

the 3G plan/recharge that users opt for.

The operator announced that IDEA 3G services will be available in

200 towns of 11 3G circles by mid-April 2011, progressively growing

at the rate of ten towns per day to cover 750 towns by mid-2011 and

4000 towns by the end of 2012.

Idea cellular has announced a cut of 70% in the tariff of its 3G

services.

On 23 November 2011 Idea Cellular launched two affordable 3G

handsets in India: Idea 3G Smartphone Blade priced at 7,992 and

Idea 3G Smartphone priced at 5,850. Both handsets are based on

Android 2.2 Froyo.

Idea has also launched a Dual-SIM Android smartphone in India on

June 15, 2012 named as Idea ID-918 at a price point of Rs.5,994

($108 approx.) It features Android v2.3 OS, 3.2-inch capacitive

touchscreen, 3G, Wi-Fi and 3.2 MP rear facing camera.

IDEA Cellular

On 5 March 2013 Idea launched another 3G smartphone called Idea

Zeal 3G which is a Dual SIM phone with 3 Megapixel camera.

Pan India 3G Coverage

Airtel, Vodafone and Idea have begun collaborating to provide 3G

coverage to their customers pan India. The agreement aims to

provides for these companies to offer 3G services to their customers

in circles where they have not won any spectrum. It is expected that

the 3 companies will be able to provide 3G services in all circles in

India except Orissa where the three have not won any spectrum.[10]

IDEA Cellular

3G Coverage

Idea’s 3G service is currently available in the following cities in 14

telecom circles[11]

Telecom

Circle

State/Region

No. of

Towns

Cities/Towns

Andhra

Pradesh

Andhra

Pradesh 13

Akiveedu, Amalapuram,

Choutuppal, Hyderabad,

Jaggaiahpet, Kamareddy,

Machilipatnam, Narsapur,

Palakol,

Tadepalligudem,Mandapeta,

Vizag, Vizianagaram,

Vijayawada, Yanam, Siddipet,

Warangal,

Gujarat Gujarat 2 Ahmedabad, Daman

Haryana Haryana 87

Ambala, Bhiwani, Hansi, Hisar,

Jhajjar, Panipat, Rewari,

Rohtak,Adampur, Agroha,

Asandh, Asauda, Badli, Baljattan,

Barsi Barwala-His, Bawal, Beri,

Bhadra, Bhalgarh, Bilaspur-Nh8,

IDEA Cellular

Bolni, Charkhidadri, Dabwali,

Dharuhera, Dighal, Farookhnagar,

Fatehabad, Gannaur, Gar-

Shahjanpur, Garhiharsu,

Gharaunda, Gohana, Hailymandi,

Hodal, Ismaila, Ismailabad,

Jakhoda, Jamalpur-Ggn, Jhansa,

Jind, Julana, Kahanaur, Kaithal,

Kalanaur, Kalka, Kaninakhas,

Karnal, Kassan, Khatiwas,

Kohand, Kori Kalan, Kosli,

Kundli, Kurukshetra, Ladwa,

Madhuban, Mahendragarh,

Manesar, Meham, Naraingarh,

Narnaund, Narwana, Nilokheri,

Nuh, Palwal, Panchgaon, Pinjore,

Pundri, Punhana, Pinangwan,

Radaur, Rania, Rohad,

Samalakha, Sampla, Shahbad,

Silkho, Sirsa, Sohna, Sonipat,

Tatarpur, Tauru, Tohana, Tosham,

Uchana, Uklana, Yamunanagar.

IDEA Cellular

Himachal

Pradesh

Himachal

Pradesh 5

Shimla, Baddi, Mandi,

Sundernagar, Dharamshala

Jammu &

Kashmir

Jammu &

Kashmir 0

Madhya

Pradesh 4 Indore, Bhopal, Gwalior, Jabalpur

Madhya

Pradesh

Chhattisgarh 8

Raipur, Durg & Bhilai, Bilaspur,

Champa & Jhangir, Korba,

Ambikapur, Raigarh,

Rajnandgaon, Baloda Bazar,

Dhamtari, Kanker, Jagdalpur,

Bhatapara, Gwalior tilda

Maharashtra† 17

Ahmednagar, Akola, Amravati,

Aurangabad, Bhusawal,

Buldhana, Gondia, Jalgaon, Jalna,

Sangli, Kolhapur, Nagpur,

Nanded, Nashik, Parbhani, Pune,

Raigad, Solapur,

Maharashtra

and Goa

Goa 3 Ponda, Panaji, Margao

Punjab Punjab 0

Kerala Kerala 18 Trivandrum, Kochi, Kozhikode,

Alleppey, Aluva, Thrissur,

IDEA Cellular

Irinjalakuda, Punalur, Adoor,

Thalassery, Koyilandy, Cherthala,

Kannur, Kottayam, Malappuram,

Manjeri, Parappanagadi, Munnar,

Kothamangalam, Adimali

Delhi Delhi 2 Delhi, NCR

Kolkata Kolkata 1 Kolkata

Kanpur Kanpur 1 Kanpur

Uttar

Pradesh

(East)

Eastern Uttar

Pradesh 6

Allahabad, Azamgarh, Ballia,

Jhansi, Lucknow, Sitapur,

Faizabad, Raebareli, Gorakhpur,

Varanasi, Jaunpur

Uttar

Pradesh

(West)

Western

Uttar Pradesh 12

Dehradun, Haridwar, Kotdwara,

Roorkee, Rudrapur, Haldwani,

Nainital, Moradabad, Rampur,

Gajraula, Joya, Pilkhuwa,

Bilaspur

Idea’s 3G service recently launched in Mumbai with 3G network

sharing agreement with Airtel. [Idea has launched 3G services in

Chennai, Delhi & NCR network sharing with Vodafone]

IDEA Cellular

Subscriber base

Idea's subscriber base as at the end of August 2011 according to the

statistics, is totalling to 98,441,714 or 16.09% (Approx.) of the total

mobile connections in India.

Idea leads all other telecom operators in India in the MNP (Mobile

Number Portability) race, with a net gain of 10,31,380 subscribers as

on 31 August 2011.

Idea also leads all other competitors in having the most active

subscriber base, scoring highly on the VLR statistics. Visitor

Location Register (VLR) is basically a temporary database of the

subscribers who have roamed into the particular area, which it serves.

Each base station in the network is served by exactly one VLR; hence

a subscriber cannot be present in more than one VLR at a time.

Customer service

The company has its retail outlets under the "My Idea" banner. The

company has also been the first to offer flexible tariff plans for

prepaid customers. It also offers GPRS services in urban areas.

Idea Cellular won the GSM Association Award for "Best Billing and

Customer Care Solution" for 2 consecutive years

IDEA Cellular

IDEA Cellular has been recognized as the 'Most Customer

Responsive Company' in the Telecom sector, at the prestigious Avaya

GlobalConnect Customer Responsiveness Awards 2010

Competitors

Idea competes with 14 other mobile operators throughout India. They

are Aircel, Airtel, BSNL, Loop Mobile, MTNL, MTS, Ping Mobile,

Reliance Communications, S Tel, Tata DoCoMo, Tata Indicom,

Uninor, Videocon, Virgin Mobile and Vodafone.

IDEA Cellular

IDEA’S STRATEGY

Idea is not the market leader in India. They were operating in a few circles earlier and

wereconsidered a regional player. Recently Idea started operations in many states as

part of theirnational roll out plan and they have operations in 2200 towns in India.

Idea has been focusingon value added services (VAS) from its inception which is

reflected in its products. They havealways taken extra care in providing customer

friendly and competitive Pre Paid offerings.Differentiation and innovation can be

associated with Idea right from its beginning. It’s clearfrom the following:

� Super Power', ‘2 Minutes Outgoing Free’, ‘Lifelong offer’, ‘Women'sCard’,

'LifetimeIdea'etc are some of the offerings of IDEA.

� IDEAisthe first cellular company to launch music messaging with 'Cellular

Jockey','Background Tones', 'Group Talk',a voice portal with 'Say IDEA'and a

complete suite of Mobile EmailServices.

� They are also providing GPRS and EDGE services for transferring data.

IDEA Cellular

� The new product introduced by IDEA is the EDGE enabled USB Data Card which

isnamed as 'NetSetter'. Initially ‘NetSetter’ was offered to post paid customers only.

Nowit is available to prepaid customers in selected circles.

IDEA’s partnership with IIFA for 10th Anniversary Awards, its association with

MumbaiIndians in IPL and major sought after programs in television like MTV

Roadies and IdeaStar singerclearly shows its marketing strategies. They always seek

something differentand is always in touch with the youth of the country as they easily

switch to otherservices.

� Their ad campaign showing AbhishekBachanin different settings but all clearly

showingtheir corporate social responsibility is great. Their approach is different from

others.

� Idea was the first to provide one rupee STD calls in the country. Now when every

oneelse gives per second billing and also 50 paisaper minute, Idea offers at 49

paisaperminute.As far as Idea is concerned it should not start a price war with

Vodafone and other large playersin the industry. This is because Vodafone has a lot

ofmoney with them to suffer the losses andeventually emerge as the winner and it is

almost doing that. Idea can only afford to come outwith some differentiated tariff plan

that does not result in a war with the leaders like Airtel andVodafone. Indian telecom

is already in trouble with the lowest tariff in the world.Differentiation and innovation

is the way forward for Idea in this already bleeding industry,otherwise it will be a

severe bloodshed.

IDEA Cellular

ANALYSIS THE INTERNAL ENVIRONMENT.

Strength

� Attractive existing footprint–The subscriber base under brand Idea, increased from

24million as of end March 2008 to 43.02 million as of end March 2009, a growth of

around79%, taking its national market share to 11%.

� Original licensee in seven of the Established Circles, providing incumbency

advantages-Theestablished service areas are Delhi, Andhra Pradesh, Gujarat,

Maharashtra, Haryana, Kerala,Madhya Pradesh and Uttar Pradesh (West). The New

Service Areas are Uttar Pradesh (East),Rajasthan, Himachal Pradesh, Bihar, Mumbai,

Karnataka, Punjab, Orissa, Chennai & TamilNadu, Jammu & Kashmir, Kolkata &

West Bengal, and Assam & North East.

� Market leader in two of, and established positions in the remainder of, the

EstablishedCircles.

� Strong distribution channels.

� High quality network structure.

� Innovation –always comes out with new products.IDEA is the winner of ‘The

EmergingCompany of the Year Award' at The Economic Times Corporate Excellence

IDEA Cellular

Awards 2008-09.The company has received several other national and international

recognitions for itspath-breaking innovations inmobile telephony products & services.

It won the GSMAssociation Award for “Best Billing and Customer Care Solution” for

2 consecutive years. Itwas awarded “Mobile Operator of the Year Award -India” for

2007 and 2008 at the AnnualAsian Mobile News Awards.

� A national brand

� Human Resources -The Company through its participative work environment,

skilldevelopment activities, and by championing the values of commitment, integrity,

passion,seamlessness and speed, promotes strong bonding with its employees. During

the year, ithas again undertaken sharing of value creation by granting another tranche

of employeestock options to the eligible employees. The findings of

OrganizationHealth Study (OHS)have been analyzed, which are very encouraging,

and concern areas are being suitablyaddressed. The employee strength onrolls stood at

6,481 as on March 31, 2009.

� Attractive growth –From 11.8 million subscribers in 2006 to 24 millionin 2008

,then to 43million by end of March 2009 and to 51 by end of 2009 is really a great

performance fromIdea.

� Part of the Aditya Birla Group-IDEA Cellular is an Aditya Birla Group Company,

India's firsttruly multinational corporation. The group operates in 25 countries, and is

anchored byover 1, 30,000employees belonging to 30 nationalities. The Group has

been adjudged the‘6th Top Company for Leaders in Asia Pacific Region' in 2009, in a

survey conducted byHewitt Associates, in partnership with The RBL Group, and

Fortune. The Group has alsobeen rated ‘The Best Employer in India and among the

Top 20 in Asia' by the Hewitt-Economic Times and Wall Street Journal Study

2007.Their promoters-1. Aditya Birla Nuvo Limited2. Grasim Industries Limited3.

Hindalco Industries Limited4. Birla TMT HoldingsPrivate Limited

Weaknesses

IDEA Cellular

� High Debt-Equity Ratio: The Company's Debt-Equity ratio is high as compared to

its peers.Moreover, the Company needs the approval of the lenders under its

financingarrangements before undertaking certain significant corporate actions.

� Concentration: The Company revenues are derived solely from providing mobile

servicesand it is dependent on four of the Established Circles for a significant

proportion of itsrevenues.

� The Company had accumulated losses amounting to Rs. 19.23 billion and Rs. 17.23

billionfor financial years 2005 and 2006 respectively. The Company may not be in a

position to paydividends until it clears its accumulated losses.

Opportunities

� The Indian telecommunication industry is expected to continue to enjoygrowth due

to itslow teledensity and increasing affordability of mobile telephone and services.

The stronggrowth in the sector continues, mainly due to expansion of telecom

networks to rural India,the reduced cost of entry and the reduced cost of handsets.

Low penetration, moreparticularly in rural India, provides opportunity for further

growth, and your company, an

incumbent GSM player with 900 MHz spectrum in about half of India, is well

positioned totap this opportunity.

� The contribution of service sector to the GDP has improved significantly from 29%

in 1950to 54% in 2005. This is primarily due to growth of information-technology

and informationtechnology enables services. This will further stimulate the demand

for mobiletelecommunication services.

� The regulatory environment is improving and there is greater clarity in existing

rules andprocedures. This would enable operators in improving network quality. Also

raising of fundswill become easier due to greater predictability of operational

environment.

� Competition from new technologies is an inherent threat. While the planned 2100

MHzspectrum auction for 3G services will lead to additional cash outflow, it will also

IDEA Cellular

open newrevenue streams. The Company’s strong balance sheet and market standing,

positions it toparticipate effectively in such auction.

Threats

� There is intense competitionin the Indian telecommunication industry. Idea Cellular

facessignificant competition from private companies that have a pan-India footprint

such asBharti Airtel, Tata Teleservices and Reliance Communication Ventures. Also

it facescompetition from government owned companies such as BSNL and MTNL.

� Alternative technology is evolving very rapidly in the telecommunications industry.

Forinstance, “Wi-Fi”and “Wi-Max”which allows for voice data transfer have been

tested andhandsets with such technology maysoon be available in the Indian market.

Moreover,satellite communication voice data transport medium like “Skype”may

become a seriouscompetitor in the long distance voice data transfer business.

Porter’s five forces -Analysis the external environment

1.Competitive rivalry within the Industry a.Principal competitors-

� Major competition comes from the industry leader Bharti Airtel. Bharti Airtelhas

24.3%customer market share and 33.8% revenue market share.

� Vodafone India has 18.8% customer market share and 20.7% revenue market share.

� Idea Cellular has 11.2% subscribers market share and 12.1% revenue market share

� BSNL has subscriber share of 12.7% and mere 10.2% of revenue share

� Reliance Communications is the worst performerwith 18.9% customer market

shareand pathetic 11.5% revenue market share.(Data mentioned are by end of August

2009)b.Salient strengths -

� BSNL has taken full advantage of its wide network and fixed line subscriber

base,and has established itself as the provider with maximum coverage over

thecountry.

� While Bharti Airtel has dominated the scene with wide reach, innovativepackages,

catchy ads, and has emerged the leader of the pack.

� Reliance Communications also has the wide network to its advantage.

IDEA Cellular

� Tata tele-services banks on the Tata-trust factor to gain foothold in the market.

� Vodafone is hitting the Indian market in a huge way. They have large cashreserves

at their disposal to wipe out the competition in future.Weaknesses-

� BSNL lines are mostly marred by congestion,bottlenecks and they have failed

tocapture the attention of the customers with attractive offers.

� Unstable range and poor customer support are Airtel’s minuses.

� Ambiguous schemes have reduced Reliance’s popularity.

� TATA Indicom has not really been able to fully capitalize its goodwill

factor.c.Their basis for competition-Vodafone and Idea are comparatively new

entrants into the market and hencethe rest of the competition has anadvantage over

them. Also both these brands haveundergone rebranding more than once, and

subsequently have had hiccups with peoplenot realizing the transformation. Giants

like BSNL, Airtel and Reliance have widenetworks in the nooks and crannies of

thecountry, while Idea is still to open account inseveral states.

2.Bargaining Power of Customers

The bargaining power of customers determines how much customers can impose

pressureon margins and volumes. Customers bargaining power is likely to be high

because

� Customersuse multiple mobile services these days and hence have a good

knowledge of the pros and cons of each service provider.

� Telecommunication industry comprises a number of operators

� The industry operates with high fixed costs

� The product is not much differentiated and can be replacedby substitutes

� Switching to an alternative product is relatively simple and is not related to high

costs

� Customershave low margins and are price sensitive

� Thecustomer knows about the production costs of the product.

3.Bargaining power of suppliers

IDEA Cellular

In this industry there is less number of suppliers compared to other industries such as

themanufacturing or textile industry.I.Mobile handset suppliers –although there are

many handset suppliers in the country,some service providers have their own handset

manufacturing units operating inthecountry like the Reliance Classic and Tata

Indicom (backward integration). Some of thetelecom companies also have some

collaboration with major handset manufacturerslike Samsung, L.G, and the

Blackberry for their CDMA services.II.Some other suppliers include optical fibre

suppliers and aluminium (for the constructionof towers) suppliers. Here the suppliers

have a limited bargaining power.III.Another important one is the software assistance

where the suppliers have some edge.Major solution providers include TCS, Infosys,

Wipro, etc. While Reliance and Tata havetheir own software services other players

like Vodafone and Idea depend on the abovementioned software service providers.

4.Threat ofnew entrants

Indian telecom sector provides unprecedented opportunities for foreign companies

invarious areas such as 3G, virtual private network, international long distance calls,

valueadded services etc.The market is witnessing M&A activities that are leading to

consolidations in the industry.This trend has assisted companies in expanding their

reach in the Indian telecom market tooffer better services to the customers. The Indian

telecom industry has always attractedforeign investors. In fact, the cumulative FDI

inflow, from August 1991 to March 2007, inthis sector amounted to $3,892.19

million. This makes telecom the third largest sector toattract FDI since the

liberalization.

Although the entry barriers are in place like license and high fixed costs, still we

observemany new players emerging from the state-level to national-level. This

includes Aircel,Virgin, Spice and Unitech.

5.Threat from substitutes

Telecom sector offers a wide range of services in India such as wireline, CDMA,

GSM,internet, VoIP, IP etc.Internet telephone is emerging as a best substitute for the

IDEA Cellular

mobile telephony because it ischeaper and video can also be added. The increasing

use and penetration of internet in thecountry also augments this. Other facilities on the

internet such as Google talk, YahooMessenger, Rediff Bol are used at an

unprecedented level by the youngsters of this country.These are the major substitutes

for the mobile telephony. Maybe this is on of the reasonswhy the major service

providers also have their presence in internet service.

Strategy

Build

leading-edge

IP-leveraged

solutions

advanced by

our

unmatched

global

infrastructure

and

leadership in emerging markets.

IDEA Cellular

BOARD OF DIRECTOR

Director Name Designation

Kumar Mangalam Birla Chairman

Himanshu Kapania Managing Director

Biswajit Anna

Subramanian Non Executive Director

Rajashree Birla Non Executive Director

Rakesh Jain Non Executive Director

Shridhir Sariputta

Hansa Alternate Director

Hansa Wijayasuriya Alternate Director

Juan Villalonga

Navarro Nominee

R C Bhargava Independent Director

Arun Thiagarajan Independent Director

Mohan Gyani Independent Director

P Murari Independent Director

Tarjani Vakil Independent Director

G P Gupta Independent Director

Sanjeev Aga Director

Pankaj Kapdeo Company Secretary

IDEA Cellular

ANALYSIS OF THE

MARKETING STRATEGY OF IDEA CELLULAR

COMPANY PROFILE:

Idea is the 3rd largest mobile services operator in India, in revenue terms, and

recorded a subscriber base of over 100 million or 17.28%(Approx.) of the total mobile

connections in India as of 31st January 2012. As on 31st January 2012, the company

is leading the MNP (Mobile Number Portability) race, with a net gain of close to 11

million subscribers. The company also leads all other competitors in having the most

active subscriber base, scoring highly on the VLR statistics. Idea’s Revenue for the

year 2011 stands at $3.43 Billion. Currently Idea is the 6th largest mobile operator by

IDEA Cellular

subscriber base. Idea cellular acquired 3G licenses in 11 telecom circles for Rs.

5768.59 Cr during the spectrum auction in May 2010.3G services have already been

launched in 7 circles out of the 11 circles that Idea has acquired licenses. Idea Cellular

is planning to be a world-class internet service provider (ISP) in India. It is working to

establish state of the art infrastructure.

CURRENT SITUATION ANALYSIS:

Porter’s five forces:

IDEA Cellular

SWOT ANALYSIS:

CURRENT CUSTOMER SEGMENTATION

Idea Cellular currently segments its customer profile into 2 basic groups:

1) Prepaid Customers and

2) Postpaid Customers

Prepaid Customers are generally the personal use customer group i.e. non

institutional. This segment accounted for around 80% of the customer base (2008

figures) and the remaining 20% was accounted for by the postpaid customer base.

The customer base is also segmented into groups according to the monthly revenue

generated:

IDEA Cellular

The segmentation here is done as:

1)VIP customers: These are the customers who form the VIP group as the name

suggests and comprises of MPs, MLAs, industrialists and other high profile

customers. These are given high attention in services as they are key to

implementation of services across their regions.

2)Corporate Customers: These are the customers having more than five connections

to their name and generate revenues in excess of Rs. 10000 a month. These are

usually institutionally driven connections and are post-paid customers. Service quality

in terms of Value Added Services provided including preferential customer service

treatment is provided to retain these high value accounts.

3) Platinum Customers: These are the customers whose current monthly expenditure

on Idea Cellular Services is in excess of Rs.1500 per month. The revenue generated

from these accounts includes Voice, Data and VAS services. Around 60% of these are

from the post-paid group while the remaining 40% are from the pre-paid group.

Institutional Customers account for around 70% of the post-paid base while the

remaining are the personal usage customers.

4) Gold Customers: These are the customers providing revenues to the company

between Rs.1000 and Rs.1400 a month. The pre-paid base is again smaller in this

segment accounting for nearly 35% of the customers. A healthy split is found between

personal and institutional usage customers.

5) Silver Customers: This customer group provides revenues in the range of Rs.750 to

Rs.999 to Idea Cellular each month. Pre-paid user group is in the range of around

55% while institutional sales account for around 80% of the post-paid group.

6) Medium Volume users: These are the customers generating between Rs.220 to

Rs.750 each month. Prepaid customers form around 65% of the group while this

group accounts for approximately 30% of the whole customer base of Idea Cellular.

7) Low Volume customers are the customers generating revenues less than Rs.250 per

IDEA Cellular

month

Tier 1 Metropolitan Circle:

Tier 2 Urban Circle:

Tier 3 Urban Circle:

IDEA Cellular

Target Market:

The Target Market is the high revenue generating segment of the Platinum and

Gold Customers. It is strategic for the company to increase user base in these two

segments as they generate a steady income source and most being post-paid, the

company is usually assured of ease of collection of bills.

Major Benefits for these customers:

These are even given treatment in Customer care.•

These are generally high data usage group and hence given dedicated• Time Slots

when their data usage is detected to maximize usage and revenue generation as a

result.

The Metropolitan and Urban circles have mobile density of 134% as• compared to

29% in rural areas. Hence, more focus should be on expanding in rural segments.

With the advent of 3G services and increasing number of smart phones,• operators

should focus on advanced value added services like live streams, mobile money etc.

Strategy makers should think on the pricing policy of postpaid plans• of corporates

and affordability of the consumers to beat the competition. Company should come

with new ideas & innovations to increase the sales & market shares. Company should

focus more and more on advertising to promote services in corporate world.

The Aditya Birla Group IDEA Cellular is an Aditya Birla Group Company, India's

first truly multinational corporation. The roots of the Aditya Birla Group date back to

the 19th century in the picturesque town of Pilani, set amidst the Rajasthan desert. It

IDEA Cellular

was here that Seth Shiv Narayan Birla started trading in cotton, laying the foundation

for the House of Birlas.

Through India's arduous times of the 1850s, the Birla business expanded rapidly. In

the early part of the 20th century, our Group's founding father, Ghanshyamdas Birla,

set up industries in critical sectors such as textiles and fibre, aluminium, cement and

chemicals. As a close confidante of Mahatma Gandhi, he played an active role in the

Indian freedom struggle. He represented India at the first and second round-table

conference in London, along with Gandhiji. It was at "Birla House" in Delhi that the

luminaries of the Indian freedom struggle often met to plot the downfall of the British

Raj. Ghanshyamdas Birla found no contradiction in pursuing business goals with the

dedication of a saint, emerging as one of the foremost industrialists of pre-

independence India. The principles by which he lived were soaked up by his

grandson, Aditya Vikram Birla, Group's legendary leader. Mr. Aditya Birla dared to

dream of setting up a global business empire at the age of 24. He was the first to put

Indian business on the world map, as far back as 1969, long before globalisation

became a buzzword in India. At the time of his untimely demise in 1995, the Group's

revenues crossed Rs.8,000 crore globally, with assets of over Rs.9,000 crore,

comprising of 55 benchmark quality plants, an employee strength of 75,000 and a

shareholder community of 600,000.

IDEA Cellular

MANAGEMENT DISCUSSIONS

Sector Growth

The year was marked by the uncommonly large new service launches by new

licensees,leading to an over-crowded sector. Resultant hyper-competitive market

conditions led to asteep decline in tariffs and introductory offerings of free minutes.

Consequently, while subscriber growth was high, the sector revenue growth slowed to

5.1% compared to 22.3% inthe preceding year.

Regulatory

Some major regulatory developments for the period were:

TRAI on MNP Regulation and porting charges

The TRAI on November 20, 2009 issued the Mobile Number Portability (MNP)

portingcharges regulation. As per it, the porting charges (paid by the subscriber to

theRecipient Operator) should not exceed Rs. 19 per request. The per port transaction

charges(payable by the Recipient Operator to the Mobile Number Portability Service

Provider) forprocessing the porting request of a mobile number, has been fixed at Rs.

19. Extension of timeline for implementation of MNP The DoT, keeping in view the

IDEA Cellular

complexity and enormity of the testing involved before MNPis implemented, and the

present status of implementation by some operators, has extendedthe timeline for

implementation of MNP from June 30, 2010 to October 31, 2010.

Amendment in licensing conditions on equipment purchase

The DoT, vide its letter of December 03, 2009 and subsequent clarifications, issued

anamendment in the licensing conditions (valid for CMTS, UASL, NLD & ILD) for

telecomequipment purchase. Licensees, before issuing purchase orders relating to

telecomequipment, are required to make an application giving details of the original

equipmentmanufacturer / supplier for security clearance from the DoT. The revert

from the DoT onapplications is to come within 30 days, failing which the licensee can

take it as a deemedapproval.

Auction of 3G and BWA Spectrum

The DoT, on February 25, 2010 issued Notice Inviting Applications (NIA),

fromprospective bidders to participate in the auction of 3G and BWA spectrum. As

per the NIA,3 slots of 3G spectrum were available in 17 service areas and 4 slots were

available in 5service areas, while in the case of BWA, 2 slots were available in each

service area forauction. The NIA included auctioning rules, timelines and other

procedural requirements.The 3G auction started on April 09, 2010 and concluded on

May 19, 2010 after 183 rounds ofbidding. The BWA auction started on May 24, 2010

and concluded on June 11, 2010 after 117rounds of bidding.

WPC order to increase spectrum

charges and Petition against the

same . The WPC, on February

25, 2010 revised the spectrum

charges, with effect from April

1,2010 for GSM and CDMA

operators as under:

IDEA Cellular

GSM

Spectrum

CDMA

Spectrum

Existing Charges (%

of AGR)

Revised Charges

(% of AGR)

Upto 2X4.4

MHz

Upto 2X5

MHz 2% 3%

2X6.2 2X6.25 3% 4%

2X8.2 2X7.5 4% (for up to 10

MHz 5%

GSM and CDMA

2X10.2 2X10 spectrum) 6%

2X12.2 2X12.5 5% (for 12.5 MHz 7%

GSM spectrum)

2X15.2 2X15 6% 8%

The Company, along with other aggrieved operators, filed a joint petition against

theWPC order. The Hon’ble TDSAT vide its order dated 26th March, 2010, was

pleased togrant an interim stay, subject to the condition that in the event the petition

isdismissed, the petitioner shall pay the spectrum charges along with interest at such

rateas may be determined. The TDSAT order included direction to the petitioners to

continuepaying spectrum charges at the applicable rate till further orders. The

respondent (DoT)was directed not to give effect to the above impugned notification

till the matter isdisposed off. The TDSAT also directed for separate petitions to be

filed by each of thepetitioners. The Company has complied by filing a separate

petition.

IDEA Cellular

TDSAT order on Carriage Charges

The TDSAT, vide its judgment dated May 21, 2010 has upheld the BSNL stand and

allowedthe distance based carriage charging with effect from May 11, 2005 while

stating, interalia, that the impugned orders of the TRAI cannot be sustained and

consequently settingthem aside.

Discussion on Consolidated Financial Statements and Operational Performance

Subscriber Base

As on March 31, 2010, the company had 63.82 mn subscribers representing a

48.4%increase compared to the subscriber base of 43.02 mn on March 31, 2009.

Revenues

Revenues and Other Income for the year ended March 31, 2010, stood at Rs. 124,990

mn,as compared to Rs. 101,544 mn during the previous year, showing a growth of

23.1%, in asector which grew at 5.1%. VAS Revenues grew at 43.2% over the

previous year. Revenuesfrom Long Distance services, and from Passive

Infrastructure, forming part of totalrevenues after inter segment eliminations, were Rs.

858 mn, and Rs. 677 mn respectively.Growth in Other Income was predominantly due

to reversals arising from conversion of leaseagreements from finance lease to

operating lease.

Operating Expenses

Operating Expenses stood at Rs. 90,399 mn vis--vis Rs. 73,180 mn for the

previousyear. The contributors to the total Operating Expense of 72.3% were

Personnel Expenditure5.2%, Network Operating Expenses 25.0%, License and WPC

charges 10.8%, Roaming and AccessCharges 14.4%, Subscriber Acquisition and

Servicing Expenses 9.3%, Advertisement &Business Promotion Expenditure 3.4%

and Administration & Other Expenditure 4.3%.

Profit before Interest, Depreciation and Amortisation

The Company generated a Profit before Interest, Depreciation and Amortisation of

Rs. 34,591 mn for the year ended March 31, 2010, a growth of 22% compared to the

IDEA Cellular

previousyear. The operating profit margin for the current financial year stood at 27.7

% comparedto 27.9% for the previous year.

Depreciation, Amortisation and Finance Charges

Depreciation & Amortisation expenses increased to Rs. 20,149 mn for the year

endedMarch 31, 2010 showing an increase by 43.6%, as against Rs. 14,028 mn for the

previousyear. Net finance charges for the year decreased by 19% from Rs. 4,945 mn

to Rs. 4,005 mn,mainly due to foreign exchange fluctuations.

Profits and Taxes

For the year ended March 31 2010, Cash Profit from operations stood at Rs. 30,555

mn, agrowth of 31.1% over the previous year. The Profit before Tax for the year stood

at Rs. 10,754 mn, an increase of 14.5% over the previous year. The tax charge for the

year,mainly consisting of deferred tax liability, stood at Rs. 1,215 mn. The Net Profit

for theyear ended March 31, 2010 was Rs. 9,539 mn, resulting in a net profit margin

of 7.6%.

Capital Expenditure

During the year ended March 31, 2010, the Company (including the erstwhile

SpiceCommunications Limited) incurred a capital expenditure of Rs. 39,814 mn.

Balance Sheet

During the year, the paid-up equity share capital of the company increased by Rs.

1,997.43 mn, due to issuance of 199.15 mn equity shares to the shareholders of

erstwhileSpice Communications Limited upon its amalgamation with the Company

and issuance of 0.59mn equity shares to the employees pursuant to exercise of stock

options granted underEmployee Stock Option Scheme, 2006. The total shareholders’

funds stood at Rs. 113,704 mn as at March 31, 2010.

The Gross Block stood at Rs. 270,585 mn, and Net Block including Capital Work

inProgress (CWIP) stood at Rs. 187,143 mn as at March 31, 2010. Treasury

investments inmutual funds decreased by Rs. 9,148 mn during the year and stood at

11,304 mn as at March31, 2010. During the year, Current Assets decreased due to

IDEA Cellular

utilization of surplus fundslying in fixed deposits, and hence the net Current

Liabilities as at March 31, 2010 stoodat Rs. 4,050 mn.

Human Resources

The Company, through its participative work environment, skill development

activities,and by championing the values of commitment, integrity, passion,

seamlessness and speed,promotes strong bonding with its employees. During the year,

it has again undertakensharing of value creation by granting another tranche of

Employee Stock Options to theeligible employees.

The findings of the Organisation Health Study (OHS) have been analysed, which are

veryencouraging, and concern areas are being suitably addressed. The employee

strength onrolls stood at 6,763 as on March 31, 2010.

Risk Management

The Risk Management framework of the Company ensures, amongst others,

compliance withthe requirements of Clause 49 of the Listing Agreement. The

framework establishes riskmanagement across all service areas and functions of the

Company, and has in placeprocedures to inform the Board Members about the risk

assessment and minimization process.These processes are periodically reviewed to

ensure that the management of the Companycontrols risks through a defined

framework. The various risks, including the risksassociated with the economy,

regulations, competition, foreign exchange, interest rateetc., are monitored and

managed effectively.

Internal Control Systems

The Company has appropriate internal control systems for business processes,

coveringoperations, financial reporting and compliance with applicable laws and

regulations.Clearly defined roles and responsibilities for all managerial positions drive

adherence ofdefined processes. Process controls are reviewed periodically and

strengthened given theinherent nature of operational fraud risks in telecom sector. The

operating parameters arealso monitored and controlled. Regular internal audits and

IDEA Cellular

checks ensure that theresponsibilities are executed effectively. The audit committee of

the Board of Directorsactively reviews the adequacy and effectiveness of internal

control systems and suggestsimprovements for strengthening them, as appropriate.

Opportunities, Risks, Concerns and Threats

The Indian wireless sector is going through a testing phase of over-capacity ledhyper-

competition. Lower tariff and high introductory offers have resulted in multiple

SIMownership, reduced realization per minute of use and the conversion of paying

minutes tonon-paying minutes, leading to slowing down of revenue growth for the

sector. Themultiplicity of SIM ownership has made the subscriber numbers and

related metricsmeaningless to gauge the strength of the business. However, the

Company has been able toexploit its incumbency strengths and drive efficiencies

through evolved processes, and hasdemonstrated enhanced competitive strength

during this testing phase.

The telecom sector is characterised by technology changes. Competition from

newtechnologies is an inherent threat.

However, your Company, with the spectrum in 900/1800 MHz and in 2100 MHz, has

anattractive spectrum footprint to adapt to future technology changes. This, along

with thestrong balance sheet, and a power brand, positions the company to make the

best of futureopportunities in a growth sector.

The Company requires certain approvals, licenses, registrations and permissions

foroperating its business. In addition, regulators may amend license conditions, norms

forspectrum allocation, spectrum charges, merger and acquisition rules etc. which

may have asignificant impact on the Company’s business. The Company, however, is

hopeful thatthe policy changes will be equitable.

The Company’s business is dependent on key vendors to supply critical

networkequipment and services. Besides, its ability to provide quality mobile network

andexpanding its area of operations and the subscriber base is also dependent on the

spectrumallocation by the government. The Company believes in partnering with

IDEA Cellular

vendors who are ofinternational repute, and with whom it builds long term

relationships.

Outlook

The business models of telecom operators are being stress-tested by overcapacity

ledhyper-competition. With several licensees operating at tariffs lower than cost,

theeventual phasing out of this period of over-capacity is inevitable. The Company,

with afocus on strengthening its leadership position in its incumbent service areas,

and acalibrated and measured approach to newer service areas, is well placed to

emergecompetitively stronger. The telecom sector provides lucrative long term

opportunities forstrong operators, of which the Company is one of a handful.

Cautionary Statement

Statements in the Management Discussion and Analysis describing the

Company’sobjectives, projections, estimates, expectations may constitute a "forward-

lookingstatement" within the meaning of applicable securities laws and regulations.

Actualresults could differ materially from those expressed or implied. Important

factors thatcould make a difference to the Company’s operations include economic

conditionsaffecting demand/supply and price conditions in the domestic markets in

which the Companyoperates, changes in the Government Regulations, tax laws and

other statutes and otherincidental factors.

Strategy in Global Context For Idea Cellular Ltd.

Introduction to Internal Analysis:

Internal analysis is a vital strategic management tool that helps in identifying the

strengths andweaknesses of an organization. These strengths and weaknesses, give an

organization certainadvantages and disadvantages to meet the needs of its target

markets. Both strengths andweaknesses should be identified from the customer’s

perspective, because customers often perceive what the organization couldn’t identify.

(David, 2008)

Importance of conducting an internal analysis:

IDEA Cellular

It helps to identify an organization’s own capabilities, assessing the following things:

• What makes us different from competitors?

• What is the general market condition of our business?

• What are the problems and complaints that customers are facing with our products

in theindustry, and how can we deal with them effectively?

IDEA Cellular

PROFIT ANALYSIS

Physical Resources:

Idea cellular is a public listed company having license to operatein 22 areas.

Presently its operations exist in 11 service areas, having a customer base of 24million

covering more than 60 % of the total Indian telecom population. (Capitaline,

2009)Currently Idea cellular has its corporate office in Mumbai, and a registered

office in Gujarat. Itscircle offices are located in 17 states. Presently it has partnership

agreements with somerenowned organizations such as, Cellebrum India Pvt. Ltd., and

NDTV for VAS (value addedservices), and for roaming Bharti Telesoft, for marketing

communication it has tied up withLowe India Pvt. Ltd. and for network, Nokia and

Ericson are its biggest partners. (Bureau E. ,2009)

IDEA Cellular

Reputation Resources:

Being a part of India’s first multinational group, Aditya Birla,and being the third

largest telecom service provider, it carries a strong reputation in the Indiantelecom

industry. It is also listed in Bombay Stock Exchange (BSE) as well as National

Stock exchange. It has been awarded “Emerging Company of the year” by Economic

times in 2009(The Economic Times, 2009) It has won an award for ‘Care services in

the best billing or ustomer care’ at the GSM association award in Barcelona, Spain.

The company won prestigiousGolden Peacock Award for its innovative product “My

gang” in 2008. Idea cellular limited isalso an official sponsor of IIFA awards (Idea

Cellular, 2008)

Organizational Resources:

Along with Idea Cellular, Aditya Birla Group is consideredas one of the most ethical

companies in India and it reflects in all of its operations. The company hasmaintained

cordial relations with its suppliers and distributors. The company holds annual

awardfunctions to reward its suppliers, distributors and employees. It gives bonuses

and dividends to itsshareholders and employees every year.

Financial Resources:

The current ratio and the quick ratio of Idea Cellular (CurrentAssets/Current

Liabilities) is 1.38:1 and 1.3:1 which show they can convert their assets into cash

easily and pay their current liabilities (Capitaline, 2009). In the same way

their working capital is $1.5 billion which shows that they have huge cash for daily

basesoperation and financial works. If we talk about their shareholder funds which

includegeneral reserve and equity share capital is $ 23 billion and total long term debt

is $6 billion which is less than their capital, so it helps them to get loan easily (Idea

Cellular Revenue, 2009). Revenues for Idea’s 13 operating service areas for Q1 at Rs.

26 milliongrew by 13.9% in 2009 (The Financial Express, 2009). Similarly, they

invest in almostevery big mutual fund companies, such as in ABN Amro Mutual

Fund, ICICI PrudentialMutual Fund, SBI Mutual Fund, HDFC Mutual Fund, and

IDEA Cellular

Birla Sun Life Mutual Fund.So we can say base on the data, the company has strong

financial management resources(Capitaline, 2009).

Intellectual Resources analysis:

Idea Cellular has separate R&D departmentwhich helps to increase market share. It

invests a huge amount in advertisement such as theyhave brand ambassadors such as

Abhishek Bacchan and Mumbai Indians (Indian PremiereLeague). Idea has positioned

themselves as young smart and innovative (Idea Cellular Revanue,2009). Their

advertisement punch line “An idea can change your life” created self image of

the brand that other players were not able create in a short span of time. Moreover, in

the year 2008it collaborated with Geodesic, an innovator in communication and

entertainment applications onmobile for providing “Idea radio” a radio service for its

customers.

Technological Resources analysis:

Idea Cellular invests huge amount in theinnovation embedded solution to enhance its

technology, network, wireless space andCustomer Relationship Management (Our

Partners, 2009). For this, they signed a deal of $19.2 million with IBM (USA base

Software Production Company). Idea uses IBMwebspare application server for data

and financial transaction, Oracle Siebel customer data integration for Customer

Relationship Management and Supply Chain Management,they use OLTP (Online

Transaction Process), CICS (Customer Information ControlSystem) software to

optimize the data security, network and mobility management (IdeaPortal, 2009). Idea

Cellular uses Vehicle Tracking System by GIS (Global ProcessingSystem).

VRHN: Idea Cellular

VRHN analysis is considered as the foundation of internal analysis. Whatever an

organization possesses is generally considered as a resource or capability. Financial

IDEA Cellular

resources, plant,equipments, technology, brand equity and organizational expertise all

can be considered asresources. Therefore, in order to have a competitive advantage an

organization has to make surethat its resources are valuable, rare, hard to imitate and

non substitutable.

Value:

The Indian Telecom sector is the biggest telecom sector in the world, which has

not been affected by economic downturn (Antony A. & Ghosh D., 2008). Due to

change in per capita income, and providing good service, it is growing rapidly. Many

multinational companiessuch as AT&T (USA), MTN (South Africa), Vodafone (UK)

are trying to take control in India, but the domestic players like Airtel and Idea

Cellular are trying to stop them to become a marketleader. Idea cellular has great

goodwill in India, because of many reasons such as, it is a publiclisted company, part

of 12$ billion of India’s first multinational group “Aditya Birla Group”,which has

operations in 18 countries (Idea Cellular, 2009). Even though, Idea wasn’t the

first player in the telecom industry to launch GPRS, it has been awarded by The

Economic Times in2009 as emerging company of the year (The Economic Times,

2009). So its product has positiveimage between consumers.

Rarity:

As we know infrastructure and technology is not at par in India. So, Idea has tie

upswith IBM, Oracle, Nokia and Ericson. They provide good software which Idea

cannot get inIndia due to technology. Idea use IBM webspare application server for

data and financialtransaction, Oracle Siebel customer data integration for Customer

Relationship Management andSupply Chain Management OLTP (Online Transaction

Process) software to optimize the datasecurity, network management. (The Financial

Express, 2008)

Hard to imitate:

In India, every telecom company has to follow same rules andregulations laid down

by TRAI (Telecommunication Regularity Authority of India) and DoT.One company

IDEA Cellular

cannot copy another’s product, service name or punch line because of

RegisteredTrademarks and Copyrights (TRAI, 2009), but they can start same service

at same price withdifferent name such as Idea came up with a unique plan “Idea

Women Calling Card and MyGang” then in few days Airtel started “Family and

Friends”, when Idea started GPRS service,Airtel and Vodafone also launched similar

services with a different name and when Idea reducedcall charges and launched easy

recharge, others also did the same thing. The punch line of IdeaCellular “An idea can

change your life” cannot be imitated; the quality of product, network andservice

cannot be imitated.

Not Substitutes:

Due to same call tariffs and similar bandwidth Idea can be easilysubstituted. There are

many telecom service providers who offer services at almost same pricesuch as Airtel,

Vodafone and Tata Indicom. Therefore if people are not satisfied with theservices or

ongoing plans, they can easily step out and use the services of other players.

Internal Factor Analysis:

STRENGTH:

Brand reputation:

Idea cellular is a part of Aditya Birla Group, a multinational havingoperations in 25

countries. The reputation of being the first Indian multinational and part of 100fortune

companies carries a lot of strength which Idea cellular enjoys being the part

of prestigious group. (Idea Cellular, 2008) Profit margin has been increasing at high

rate

. The profit margin of Idea cellular in relation toits competitors like Bharati Airtel and

Vodafone has grown relatively about 4% from 2006-07 which was 11% to 15% in

2007-08. It is strength for the organization as it is likely to give them acompetitive

edge. (Q3 result: Idea cellular, 2008)

IDEA Cellular

Financial strength:

The current ratio and the quick ratio of Idea Cellular (Current

Assets/CurrentLiabilities) is 1.38:1 and 1.3:1 which show they can convert their assets

in to cash easily and pay their current liabilities (Capitaline, 2009). In the same way

their working capital is $1.5 billion which showsthat they have huge cash for daily

bases operation and financial works. If we talk about their shareholder funds which

include general reserve and equity share capital is $ 23 billion and total long term debt

is $6 billion which is less than their capital, so it helps them to get loan easily

(Capitaline, 2009).

Market share:

The overall market share of Idea cellular is increasing at a healthy rate. It iscurrently

operating in an industry which is expected to grow at a rate of 1.3 $ trillion in

revenueaccording to a US based research agency (Insight research corporation New

Jersey). Thus we caninfer from this fact that Idea cellular has a huge target audience,

as it has expanded its operationsin almost all parts of India (The Money control,

2008).

Technology innovation:

Being the first player in the telecom industry to start GPRS services inIndia, and even

starting unique products, such as ‘My gang’ and ‘Idea radio’, the

technologicalinnovation of the organization can act as strength to the company in the

long run (The Hindu,2008).

Strong advertising and promotion:

Idea cellular is known in the industry for its aggressive promotional and advertising

techniques, such as having Abhishek Bachan, a famous Bollywoodstar as part of its

advertising punch line ‘What an idea Sir Ji’ proved effective in carrying out

the promotional campaigns throughout the country (Money Outlook, 2001).

Strategic alliance:

IDEA Cellular

Idea cellular has strategic alliance with IBM and Oracle. Both have a unique brand

image for providing best in class software solutions like CRM (Customer

RelationshipManagement) and OLAP (Online Analytical Processing). It has also tie

ups with leading mobile producers like Nokia. This shows that the organization is

dedicated towards providing superior services to its customers. (Idea Portal, 2009)

Weakness:

No presence in Broadband or internet service:

BSNL, Airtel, Reliance communications, Tata,all of them offer broadband services.

Reliance communications as well as Tata are now offeringhigh broadband access

through Data cards. It thus adds value to their respective brands. Not being a

broadband service provider is therefore a big weakness for them.

Less PAN India presence:

Idea cellular limited has a low PAN (Presence across nation) India presence as

compared to its rivals Airtel and Reliance communications. Airtel and Reliance

havealways been the first ones in expanding their operation expeditiously as

compared to other players in the industry.

Target only North India:

Idea Cellular is the market leader in North India, but they have asmall market share in

South India. Now recently it has made its presence in Tamilnadu.

Not a player of “Direct to Home Service”:

Idea cellular is not a player of DTH services.Players like Reliance and Bharti Airtel

have a strong presence in DTH services. Looking at thefuture prospects of DTH

services the giants like Tata, Airtel and Reliance who are the leadingmobile service

providers in the country have entered the arena of DTH. The DTH industry isexpected

to touch a base of 40-50 million subscribers by 2015.

Not a big player in urban market:

Plan for next three years

IDEA Cellular

The company is having high operating cost i.e. the company is not utilizing its

recourses properly, since by the Internal-External (IE) matrix the company falls in the

grid of Grow and Build which also suggeststhat the company can go intense and

aggressive strategy of market penetration or the alternative of goingfor the vertical

integration. According to the QSPM analysis as well the alternative for going for

thevertical integration was the most attractive one. The company should also come up

with new service likeTata Docomo has come up “Billing per pulse rate” in order to

increase the market share. In the BCGmatrix Idea Cellular falls in the Star’s category.

Idea Cellular should also try to acquire or tie up withother companies such as

Vodafone and Hutch and Airtel and MTN tried to tie-up in order to catch up withthe

competition and the growth of the industry. They acquired spice in past and they have

tie-up withEricson but they do not have any type of advantage in term of internet

service or upcoming 3G service.Idea should come up with new service for new

segment of customers, try to focus on urban market whichis again found out to be best

alternative from the QSPM analysis.

Idea Cellular is considered as rural market leader but theydo not have good market

share in urban area. They have 70 % market share in rural area and 32% market share

in urban area.

IDEA Cellular

IDEA Cellular

Importance of understanding competition:

When a company positions its product in the market, it tries to position its brand

uniquely amongother brands present in the market. Therefore it is critical to

understand the strengths,weaknesses, opportunities and threats of each of those

competitors along with the industrystructure itself. This knowledge is important

because it’s the competition that helps us to own theunique benefit in our customer’s

mind that our competitors’ have not addressed and cannot easilyaddress in the future.

Rational behind identifying the competitors:

Analyzing the competitors is an essential component of corporate strategy. Knowing

about thecompetitors and their profile will help the concerned organization in

knowing its weaknesses thatit may exploit. A detailed profile of the competitors, helps

an organization in getting an in depthdescription of the competitor’s background, its

unique selling proposition, financial condition, itsstrategies, the products and the

market share.

IDEA Cellular

Analysis of CPM and IFE:

IDEA Cellular

With the analysis of the competitive profile matrix (CPM) we can conclude that the

company’sstrategy in the Nature care segment is better than that of their existing and

latent competitors, onthe other hand the company has to adopt new strategy to

strengthen their position in the healthcare segment. As the analysis of internal factor

evaluation (IFE) we can say that the company’sstrategy is aligned with the strength

and weakness of their organization.We have also recognized how the study of internal

factor and competition will help indetermining the strategy for the organization.

TOWS MATRIX

The TOWS matrix is an important matching tool that helps in developing four types

of strategies;

1. SO strategies — use a firm’s internal strengths to take advantage of

externalopportunities.

2. WO strategies — are aimed at improving internal weaknesses by taking

advantage of external opportunities.

3. ST strategies — use a firm’s strengths to avoid or reduce the impact of

external threats.

4. WT strategies — are defensive tactics directed at reducing internal weaknesses

andavoiding external threats. After analyzing the SWOT analysis of Idea

cellular which has been done in the previous reportthe tows matrix can be

constructed as follows:

SO strategies:

Under Strength and opportunity strategy the company should penetrate the

ruralmarket as the number of mobile users in rural India is increasing at a fast rate, we

can say it is becoming very close to urban consumers. As the organizations carries a

good brand reputation of Aditya Birla Group, and being the first organization to

launch GPRS service, it should penetratethe rural market and offer other value added

services like GPRS at affordable prices. Brand promotion is required in this

IDEA Cellular

perspective. The advertisements of Idea cellular give a touch of Indian villages, it

therefore can become successful in gaining a large pool of customers, but it hasto

maintain superior digital clarity that too at an affordable prices.

WO Strategies:

This strategy is a tool by which we can understand the weaknesses and comparethem

with the opportunities we have in hand, and making an effort to see how weaknesses

can beutilized in maximizing the available opportunities.Earlier the firm was targeting

the consumers of Northern India only. In its recent expansion planit has slowly

capture the other parts of India as well, but it has not been able to provide somevalue

added services like Direct to home and mobile broadband service like Tata and

Reliance.The reason behind providing these value added services is that it gives a

unique strength to thefirm and a kind of diversification. The result is broadening of

services and capability of jumpinginto other related services which can be very

securely connected with mobile services.

ST Strategies:

Looking at the strength of the firm the firm carries a brand name and the marketshare

of the company is increasing in other parts of India as well including north and

western parts of India. The company’s promotional strategies are also proving

beneficial. The recentadvertisements have proved successful in executing the brand

communication to the consumers.But the threats cannot be ignored and these have to

be very carefully analyzed so that the threatscan be minimized into strengths. Poor

infrastructure and not upgrading the technology whenever the need arises is a big

threat and it has to be minimized to the maximum extent possible.Sometimes poor

execution of promotional activities can also damage the reputation of the firms.The

care has to be taken as to what technology is most suitable, with whom the firm

should tie

IDEA Cellular

The Entire Telecom Industry is growing at a rate of 35% as compared to the base year

2006-07.This can be termed as a moderately growing Industry and it is expected to

grow in the comingyears. Also as per the latest report of TRAI, an apex body

regulating telecom affairs, the number of mobile subscribers has touched 50 crore.

Bharti Airtel is the market leader with 32% share for long time but now they are

losing their market share. Idea Cellular Limited has a share of 22% inthe total GSM

telecom market in India (as on July’09) and it is growing at 18% annually.Presently

its operations exist in 11 service areas, having a customer base of 24 million

IDEA Cellular

coveringmore than 60 % of the total Indian telecom population. (Capitaline, 2009)

Currently Idea cellular has its corporate office in Mumbai, and a registered office in

Gujarat. Its circle offices arelocated in 17 states. Presently it has partnership

agreements with some renowned organizationssuch as, Cellebrum India Pvt. Ltd., and

NDTV for VAS (value added services), and for roamingBharti Telesoft, for marketing

communication it has tied up with Lowe India Pvt. Ltd. and for network, Nokia and

Ericson are its biggest partners. (Bureau E. , 2009). So it comes under star.

Internal-External (IE) Matrix

The IE matrix is the strategic tool used to analyze the working condition and the

strategic position of the business. The IE matrix includes both the internal as well as

the external factorswhich will affect the business, based on the scores of internal

factor evaluation (IFE) andexternal factor evaluation (EFE) we determine the

company’s position in the Matrix. The matrixis being divided into nine grids and the

relative position of the company in the grid will explaintheir strategy. The company

lies in the position of strong so it lies in the strong grid of the IEmatrix so the

company has to grow and build which suggests that the company should go

for intense and aggressive tactical strategies like market penetration, market

development or productdevelopment. The company can also consider the alternative

of backward, forward or horizontalintegration.

IDEA Cellular

Strategy in Global Context For Idea Cellular Ltd.

Grow

Idea

AndBuildHoldAndMaintainHarvestOrDivest Quantitative Strategy Planning Matrix

(QSPM) The QSPM is a strategic planning approach for evaluating the possible set of

strategies, this act as ananalytical tool to for the comparison of the alternative

strategies. In the given case we are consideringfollowing three alternative strategies

for Idea this includes: -1.

Strategic Alternative 1:

Can go for backward integration such as Vodafone acquireHutch to increase market

share or forward like acquire distributers2.

IDEA Cellular

Strategic Alternative 2:

Can go for marketing penetration: Target the urban segment;launch a new service

with same brand name like Tata Docomo has done “Billing per pulse rate” , provide

more high end services like GPRS, mobile internet services and providegood

customer service

Strategic Alternative 3:

Can go for the horizontal integration activities i.e. Airtel hasgone for Dish TV,

Reliance has gone for Big TV Evaluating the above mentioned strategies with

assigned weight to the strength, weakness,opportunities and threats present in front of

the company, and we have figure out that thestrategic alternative 2 i.e. Target the

urban segment; launch a new service with same brand name.Like Tata Docomo has

done, Provide more high end services like GPRS, mobile internet services and provide

good customer service. This strategy has the attractiveness score of 6.22.

Plan for next three years

The company is having high operating cost i.e. the company is not utilizing its

recourses properly, since by the Internal-External (IE) matrix the company falls in the

grid of Grow and Build which also suggeststhat the company can go intense and

aggressive strategy of market penetration or the alternative of goingfor the vertical

integration. According to the QSPM analysis as well the alternative for going for

thevertical integration was the most attractive one. The company should also come up

with new service likeTata Docomo has come up “Billing per pulse rate” in order to

increase the market share. In the BCGmatrix Idea Cellular falls in the Star’s category.

Idea Cellular should also try to acquire or tie up withother companies such as

Vodafone and Hutch and Airtel and MTN tried to tie-up in order to catch up withthe

competition and the growth of the industry. They acquired spice in past and they have

tie-up withEricson but they do not have any type of advantage in term of internet

IDEA Cellular

service or upcoming 3G service.Idea should come up with new service for new

segment of customers, try to focus on urban market whichis again found out to be best

alternative from the QSPM analysis.

IDEA Cellular

IDEA Cellular

METHODOLOGY

IDEA Cellular

The purpose of methodology is to describe the processinvolved in research work. This

includes the overall researchdesign, data collection method, the field survey and

theanalysis of data.For our project we did a small survey based on around 100 people

in the BIMTECH, Ansal Plaza, GIP mall and fewmore friends and relatives at

different places ranging fromage group of 15 to 30 yrs

IDEA Cellular

QUESTIONARY DATA ANALYSIS

IDEA Cellular

Q:1 ) Have you heard about the Idea cellular Ltd.?

A) yes B) No

Interpretation: Most of the people are aware of the IdeaCellular Ltd.

Q: 2 .) From whom you come to know about this?

A) Family B) Colleague C) FriendsD) AdvertisementInterpretation: Advertisement

plays an important role tospread the awareness and other mediums also contribute.

Q:3 ) Any time you used the service……

A) Always B) Most of the timeC) Sometimes D) Not at all

INTERPRETATION: Awareness about the idea is good but still it isnot able to create

the credibility for the brand in market. This is thereason they have less no. of

customers.

Q:4 ) Did you like the services?

A) Highly Satisfied B) Satisfied C) Neither satisfied nor dissatisfied D) Dissatisfied

E) Highly dissatisfied

INTERPRETATION: Subscriber are not that much satisfied withthe coverage of Idea.

Q5) Have you seen the advertisements of Idea Cellular ?A) Yes B)

Q:6) How would you rate that advertisement……

A) Very good B.) Good C.) Neither good nor bad D.) BadE.) Very Bad

INTERPRETATION: People like the advertisement very much, eventhey are able to

recall the captions like walk when you talk, ek idea jo badal de apki duniya

Q:7 ) Where did you see/hear it’s advertisement ?

A) Television B) Radio C) InternetD) Print Media

INTERPRETATION: Almost everyone has seen it’sadvertisement on Television and

it’s presence on internet isvery less.

Q:8 ) Did you think that it was effective enough tocommunicate the message?

A.) yes B.) No

IDEA Cellular

INTERPRETATION: They are able to communicate themessage but still they are less

effective as compared toAirtel, Vodafone.

Q:9 ) Rate the features which you give the most priorty whileselecting the Mobile

Network.

INTERPRETATION: Network is the key decision maker whichinfluence people

while buying a new mobile network

IDEA Cellular

FINDINGS AND SUGGESTIONS

IDEA Cellular

•People are known to the IDEA CELLULAR LTD. and itsservices but still

37% of the people use Airtel , 32% use Vodafone , 19% use reliance , around

10% use idea and 2% use virgin People are aware with the services i.e. marketing

communication is good.

• 50% of the people, even after being aware of the brand, have never used idea

cellular services.

•Subscriber are not very much satisfied with the service. So, there is a needto improve

the coverage in terms of area as well as network.

•Most of the subscriber suggested that the advertisement was goodenough to

communicate the message but what matters at the end isthe service provided by idea .

So, there is a need to improve thecoverage and connectivity of Idea .•And other

suggestion which was given by the subscribers was thatthey liked Abhishek Bacchan

more as the Brand Ambassador for IDEA.

IDEA Cellular

RECOMMENDATIONS

• Should enhance its distributionsystem.

• Should increase its coverage area.

• Should become more customer-friendly.

• Should plan to grow its market share.

IDEA Cellular

LIMITATIONS

IDEA Cellular

Despite the possible efforts in conducting the research, there were

some unavoidable situations, which limited the scope of the project.

Considering the population, the sample taken for present study seems

fake (means some of the address chosen for the collection of the data

were fake ) and hence further new channel partner has to be found

out.

Some of the channel partners were non-cooperative in giving

information. Time available for research was very short so certain

aspects have been overlooked. Dealers were hesitant to provide the

complete information due to fear of misuse of information.

Respondents may sometimes misinterpret the questions, leading to a

different answer

IDEA Cellular

CONCLUSION

IDEA Cellular

why IDEA

"Attracting and nurturing talent has become the single most dominant force

in business."Idea cellular recognizes human resources as a backbone for its long-term

success.We aim to be the best employer, attracting and retaining the best employees.

Our people are our greatest resource as they are our biggest differentiator. We

thereforehire the best professionals brimming with ideas and develop them for

futureleadership positions.!dea is all about participation and involvement - seek

opportunities, give opinionsand always speak your mind. And finally make a

difference within the company.We have focussed on conserving the best aspects of

our unique culture and on perpetuating what attracts people to join, and remain, at

iDEA

•Communication strategy of idea is very good because most of the people are well

known to the service by idea .Being newto telecom industry, people are not confident

to go for it. Also,competitors of idea are very much powerful in communicatingas

well as providing the service.

•And one thing which is focused is that the Brand Ambassador also plays an impotant

role in catching the attention of thecustomer because most of the people reported that

they likedAbhishek Bacchan more than Sariya Saran.

IDEA Cellular

REFERENCES

IDEA Cellular

Idea Journey(n.d.). Retrieved September 02, 2009, from Idea

Cellular:http://www.ideacellular.com/ShowBinary/BEA%20Repository/idea/Investor

Presentation/InvestorPresentationQ1FY10.pdf Some gap in Idea market opportunity

(2008, July 10). Retrieved August 29, 2009, from TheFinancial

Express:http://www.financialexpress.com/printer/news/333489/Anto Antony & Durba

Ghosh, E. B. (2008, December 20).

Telecom beats slowdown bluescontribute big to GDP growth

. Retrieved August 31, 2009, from The Economic

Times:http://economictimes.indiatimes.com/articleshow/3864667.cms

Budget

. (n.d.). Retrieved August 30, 2009, from India

Budget:http://indiabudget.nic.in/Bureau, E. (2009, august 25).

Features

. Retrieved 09 01, 2009, from The Economic

Times:http://economictimes.indiatimes.com/articleshow/4930919.cms

Conclusion

As a conclusion of this report we figure out that the company’s strategy to t

arget the rural

segment;launch a new service with same brand name like Tata Docomo has done,

provide fast GPRS, mobileinternet services and provide good customer service

which is having the attractiveness score of 6.22

IDEA Cellular

BIBLIOGRAPHY

IDEA Cellular

There was immense need and flow of the information while

conducting the analysis as well as while writing the report, which was

gathered through various sources as mentioned below:

Internet

www.tata.com

Company profile Introduction of the co. & know how about their

products & services that they offer in market.

Products and services & its history

www.google.com It used for searching information about different

automobile manufacturing companies JOURNALS1. Products

manuals of Tata2.Sales module of Tata

www.wikipedia.com

www.scrib.com