Study and Comparative Analysis of Special Loyalty Program run by telecom operators Submitted By RITESH GOYAL UNDER THE GUIDANCE OF Prof. Sunita Srivastava A PROJECT SUBMITTED IN PART COMPLETION OF PGDM TO THE Chetana’s Institute of Management & Research
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Project Report- Study and Comparative Analysis of Special Loyalty Program Run by Telecom Operator- Vodafone -Jaipur (Raj.)
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Study and Comparative Analysis of Special Loyalty Program run by
telecom operators
Submitted By
RITESH GOYAL
UNDER THE GUIDANCE OF
Prof. Sunita Srivastava
A PROJECT SUBMITTED IN PART COMPLETION OF
PGDM TO THE
Chetana’s Institute of Management &
Research
Bandra (East), Mumbai 400 051.
July 2010
DECLARATION
This is to declare that the study presented by Ritesh
Goyal to Chetana’s Institute of Management and
Research, in part completion of the PGDM under the title
“Study and Comparative Analysis of Special Loyalty
Program run by telecom operators” had been done under
the guidance of Prof. Sunita Srivastava, HOD (Marketing)
- Chetana’s Institute of Management & Research, Bandra
(East), Mumbai and Mr. Amit Doria, Product Manager -
Vodafone Essar Digilink Ltd.
Ritesh Goyal
CERTIFICATE
This is to certify that the study presented by RITESH
GOYAL to the Chetana’s Institute of Management and
Research, in part completion of the PGDM under the title
“Study and Comparative Analysis of Special Loyalty
Program run by telecom operators” has been done under
the guidance of Mr. Amit Doria, Product Manager -
Vodafone Essar Digilink Ltd.
The project is in the nature of original work that has not
so far been submitted for any Diploma of Chetana’s
Institute of Management & Research or any other
University / Institute. References of work and related
sources of information have been given at the end of
each chapter.
Prof. Sunita Srivastava, Dr. M. V. DeshpandeHOD (Marketing) - CIMR Director - CIMR
ACKNOWLEDGEMENT
The Project Title “Study and Comparative Analysis of Special Loyalty Program run by telecom operators” has been conducted by me during 19th May, 2010 to 18th July, 2010 at Vodafone Essar Digilink Ltd. I have completed this project, based on the Primary research under the guidance of Mr. Amit Doria, Product Manager - Vodafone Essar Digilink Ltd. Jaipur and Prof. Sunita Srivastava, Chetana’s Institute of Management & Research, Bandra (East), Mumbai.
I owe enormous intellect debt towards my guides Mr. Amit Doria and Prof. Sunita Srivastava who have augmented my knowledge during my project course. They have helped me learn about the process and giving me valuable insight.
I am obliged to all those who have assisted and guided me during the course of research. My increased spectrum of knowledge in this field is the result of their constant supervision and direction that has helped me to absorb relevant and high quality information.
I would like to thank all the respondents without whose cooperation my study/project would not have been possible.
Last but not the least, I feel indebt to all those persons and organizations which have provided helped directly or indirectly in successful completion of this study.
Dated: RITESH GOYAL
Project Details
Trainee:-
Name: - Ritesh Goyal
Programme: - PGDM 2009-11
Project:-
Company Name: - Vodafone Essar Digilink Ltd.
Project Title: - Measuring various competition schemes and comparison of Special loyalty program of different telecom operators
Area of the Project: - Jaipur Rajasthan
Project Duration: - 2 month (19th May’10 to 18nd July’10)
Guide's Name: - Prof. Sunita Srivastava Mr. Amit Doria.
Designation: - H.O.D. Marketing Product Manager
College / Company: - Chetana’s Institute of Vodafone Essar
Management & Research Digilink Limited
TABLE OF CONTENTS
PagesTitle PageDeclarationCertificateAcknowledgementProject DetailTable of contentExecutive summary
Chapter 1: Introduction 3
1.1) Introduction to Company………………………………………………………………………. 41.1.1) Global Telecom Industry: Overview …………………………….................... 41.1.2) An Introduction – Indian Telecom Industry…………...……………….......... 8
i. Reform in Telecom Sector……………………...……………………….. 9ii. Major Players…………………………………..…………………........... 10
iii. Important Milestones………………………….…………………............ 111.1.3) Vodafone Essar Ltd……………………………………..…………................... 131.1.4) Vodafone Group plc…………………………………….…………................... 151.1.5) Essar Group…………………………………………….…………................... 161.1.6) History……………………………………………………………………......... 161.1.7) Milestones……………………………………………………………………... 18
1.2) Objective of Study…………………………………………………………........................ 191.3) Scope of Study…………………………………………………………………................. 201.4) Justification of Study……………………………………………………………….......... 201.5) Limitation of Study……………………………………………………………................. 211.6) Structure……………...…………………………………………………………………... 22
Chapter 2: Literature Review 24
2.1) About Topic………………………….………………........................................................ 252.2) Telecom Industry…………………………………….………………............................... 252.3) Current Scenario………………………………….….………………….......................... 292.4) Future Projections……………………………….…..…………....................................... 302.5) Importance of Schemes…………………………………...….………………………….. 31
2.5.1.2) Idea – Rajwada……………………..………………………….. 432.5.1.3) Airtel – Navratna………………….……………….................... 50
2.6) General Terms and Conditions………………………………………………………….. 642.7) General Privileges & Benefits…………………………………………………………... 66
Chapter 3 Methodology and Analysis 67
3.1) Methodology……………………………………………………………………………….683.2) Research Technique…………………………………………………..................................703.3) Comparison of Vodafone SKH with Airtel Navratna………………….………………….71
3.3.1) Parameters in terms of Likes / Dislike……………………………….................... 763.3.2) Degree of Significance………………………………………….………………... 803.3.3) Data Analysis…………………………………………………………….……….. 81
3.4) SWOT Analysis of SKH………………………………………………............................... 82
Chapter 4 Conclusion of Report 83
4.1) General Finding………………………………………………………………....................844.2) Interpretation………………………………………………………………….................... 844.3) Recommendation………………………………………………………………………….. 874.4) Conclusion……………………………………………………………................................ 88
Chapter 5 Bibliography 89
Appendix: Questionnaire on “Comparison of Special Loyalty Program”.
INDEX OF FINGERS
Chapter 1: IntroductionFig 1.1: Distribution of global Mobile Services Revenues……………………………… 6Fig 1.2: Subscriber Base of Top 20 Operators in World……………………………….. 7Fig 1.3: Organisation Structure of Vodafone Essar Ltd……………………………….. 14Fig 1.4: Map showing Vodafone Enterprise footprint…………………………………. 15
Chapter 2: Literature ReviewFig 2.1: Market Share – Rural and Urban……………………………………………… 26Fig 2.2: Wireline Market Share - Rural and Urban……………………………………. 27Fig 2.3: Wireless Market Share - Rural and Urban……………………………………. 28Fig 2.4: Wireless Operators Market share……………………………………………… 28
Chapter 3 Methodology and AnalysisFig 3.1: Comparison of Category System……………………………………………….. 72Fig 3.2: Comparison based on Point / Runs System……………………………………. 73Fig 3.3: Comparison on activation system…………………………………………….... 74Fig 3.4: Comparison on Bonus Card System…………………………………………… 75Fig 3.5: Comparison on Tertiary Points / Runs………………………………………… 76Fig 3.6: Comparison based on party…………………………………………………….. 77Fig 3.7: Comparison based on Gifts…………………………………………………….. 78Fig 3.8: Comparison based on program………………………………………………… 79
INDEX OF TABLES
Chapter 2: Literature ReviewTable 2.1: Subscriber Base and Teledensity – Rural and Urban………………………. 26Table 2.2: SKH Second Recharge v/s Runs…………………………………………….. 36Table 2.3: SKH Bonus Card…………………………………………………………….. 39Table 2.4: Bonus Card sold v/s Runs…………………………………………………… 40Table 2.5: Rajwada Points System……………………………………………………… 46Table 2.6: Rajwada Criteria System…………………………………………………….. 47Table 2.7: Rajwada Prices System………………………………………………………. 48Table 2.8: Navratna Points System……………………………………………………… 54Table 2.9: Navratna Privileges…………………………………………………………... 57
Chapter 3 Methodology and Analysis Table 3.1: Degree of Significance……………………………………………………….. 80Table 3.2: Analysis is on the basic of Degree of significance and Liking / Disliking……81
Executive summary
The Indian telecom industry has been regularly beating targets. Recently, the telecom subscriber
base exceeded the targeted 500 million almost 15 months before the end – 2014 deadlines. Going
by the current growth, it is estimated that India will have 800 million mobile subscribers in 2012.
In wireless segment GSM, CDMA and FWP wireless subscriber base has increase from 471.73
million in September 2009 to 488.40 million at the end of October 2009 at a monthly growth rate
of 3.53%.
Vodafone Essar is the Indian subsidiary of Vodafone Group and commenced operations in 1994
when its predecessor Hutchison Telecom acquired the cellular license for Mumbai. The company
now has operations across the country with over 106.34 million customers. Vodafone is the
world's leading international mobile communications group with approximately 341 million
proportionate customers as on 31 March 2010. Vodafone currently has equity interests in 31
countries across five continents and around 40 partner networks worldwide. Vodafone Essar is
owned by Vodafone 67% and Essar Group 33%. It is the second largest mobile phone operator in
terms of revenue behind Bharti Airtel, and third largest in terms of customers. Vodafone Essar
Digilink Limited operates as a subsidiary of Vodafone Essar Limited in Rajasthan, UP (EAST)
Haryana after acquiring AirCel Digilink in 2003. TRAI Report on the Indian Telecom Services
Performance Indicate that Vodafone gross revenue change Rs 5,500.82 crore from quarter March
2009 to Rs 5,470.53 in quarter June 2009.
This is an internship report regarding study and comparative analysis of various loyalty program
run by telecom operators for special category retailers. The main objective of this project is to
compares this scheme and come up with precise suggestion for Vodafone - Special Loyalty
Program so that Vodafone take the adequate action in order to enhance the sales to withstand the
highly competitive market situation and amplify its market share.
Project basically deals with identifying various internal and external factors that are effects
loyalty program. Since last decade the telecom industry in India has been totally revolutionized.
The industry has became one of the fastest growing industry. This has made the research work as
interesting as it is challenging. The cut throat market competition for expansion of overall
subscriber base has resulted to the everyday launch of new and innovative schemes by the
service operators.
As usual being the king the customer (for company it’s a retailer) has variety of choices and
services at their disposal. Such a competitive market situation, has made the customer (for
company it’s a retailer) to behave in a highly volatile manner. Thus to sustain in the market, any
telecom operator company today is required to continuously evolve and innovate both the
product and the schemes in order to be upgraded on retailers expectation scale. One of the result
of such an innovation is the schemes called,
Vodafone - ‘Score Kya Hai’ (SKH)
also the subject of my study.
Score Kya Hai (SKH) is designed keeping in mind the interest of all Vodafone partners across
the country. These retailers are top retailers partners in the country, the short listed on the basis
of Activation count, Lapu Recharge and Bonus Card.
My Research Methodology involved two basic approaches: ‘study various competition schemes’
and the ‘comparing special loyalty program’. As a part of study various competition schemes, I
studied the Airtel – ‘Navratna’ and Idea – ‘Rajwada’. The research technique which used are
Judgment and Snowball sampling. For comparing loyalty program, I had compare Navratna with
SKH on different parameters, the research technique which used is Stratified sampling. In this
questionnaire survey was conducted within the Jaipur (Rajasthan) region to identify the retailers’
needs and requirements and also to know about their perception regarding the schemes.
Chapter 1: Introduction
1.7) Introduction to Company1.1.1) Global Telecom Industry : Overview1.1.2) An Introduction – Indian Telecom Industry
iv. Reform in Telecom Sectorv. Major Players
vi. Important Milestones1.1.3) Vodafone Essar Ltd1.1.4) Vodafone Group plc1.1.5) Essar Group1.1.6) History1.1.7) Milestones
1.8) Objective of Study1.9) Scope of Study1.10) Justification of Study1.11) Limitation of Study1.12) Structure
1.1) Introduction to Company
1.1.1) GLOBAL TELECOM INDUSTRY: AN OVERVIEW
Think of telecommunications as the world's biggest machine. Strung together by complex
networks, telephones, mobile phones and internet-linked PCs, the global system touches nearly
all of us. It allows us to speak, share thoughts and do business with nearly anyone, regardless of
where in the world they might be. Telecom operating companies make all this happen.
Not long ago, the telecommunications industry was comprised of a club of big national and
regional operators. Over the past decade, the industry has been swept up in rapid deregulation
and innovation. In many countries around the world, government monopolies are now privatized
and they face a plethora of new competitors. Traditional markets have been turned upside down,
as the growth in mobile services out paces the fixed line and the internet starts to replace voice as
the staple business.
Plain old telephone calls continue to be the industry's biggest revenue generator, but thanks to
advances in network technology, this is changing. Telecom is less about voice and increasingly
about text and images. High-speed internet access, which delivers computer-based data
applications such as broadband information services and interactive entertainment, is rapidly
making its way into homes and businesses around the world. The main broadband telecom
technology - Digital Subscriber Line (DSL) - ushers in the new era. The fastest growth comes
from services delivered over mobile networks.
Of all the customer markets, residential and small business markets are arguably the toughest.
With literally hundreds of players in the market, competitors rely heavily on price to slog it out
for households' monthly checks; success rests largely on brand name strength and heavy
investment in efficient billing systems. The corporate market, on the other hand, remains the
industry's favorite. Big corporate customers - concerned mostly about the quality and reliability
of their telephone calls and data delivery - are less price-sensitive than residential customers.
Large multinationals, for instance, spend heavily on telecom infrastructure to support far-flung
operations. They are also happy to pay for premium services like high-security private networks
and videoconferencing.
Telecom operators also make money by providing network connectivity to other telecom
companies that need it, and by wholesaling circuits to heavy network users like internet service
providers and large corporations. Interconnected and wholesale markets favor those players with
far-reaching networks.
DISTRIBUTION OF GLOBAL MOBILE SERVICES REVENUES
Fig 1.1: Distribution of global Mobile Services Revenues
369.33
252.3
171
160.1153.4123.1
109.7
90
83.88
71.4
67.2
66.8
66.0265.7
63.361.4
53.54 5352.842.81
Subsciber Base of Top 20 Operators in World(in millions)
China Mobile (China)Vodafone (United Kingdom)Telefónica / Movistar / O2 (Spain)China Unicom (China)América Móvil (Mexico)T-Mobile (Germany)Orange / France Télécom (France)Telenor (Norway)MTS (Russia)AT&T Mobility (United States)Verizon Wireless (United States)Bharti Airtel (India)SingTel (Singapore)Telecom Italia / TIM (Italy)VimpelCom (Russia)MTN Group (South Africa)NTT DoCoMo (Japan)Orascom Telecom (Egypt)Sprint Nextel (United States)Telkomsel (Indonesia)
Fig 1.2: Subscriber Base of Top 20 Operators in World
1.1.2) AN INTRODUCTION - INDIAN TELECOM INDUSTRY
The telecom services have been recognized the world-over as an important tool for socio-
economic development for a nation. Telecommunication is one of the prime support services
needed for rapid growth and modernization of various sectors of the economy. It has become
especially important in recent years because of enormous growth of information technology and
its significant potential for the impact on the rest of the economy. In the past decade or so the
distinction between communications & IT has been diminishing with emerging common
infrastructures blurring the differentiation between content & carrier methods. At the same time,
as has been the case in most of the developed world, the combination of enhanced computing
power and improved telecommunications- equated by some to the introduction of steam power in
the 18th century and electricity in the 19th, has spurred a major improvement in the productive
capacities of the economies.
India is perceived to have a special comparative advantage in information technology and in IT
enabled services. The extent of advantage depends critically on high quality telecommunication
infrastructure. Telecom infrastructure is treated as a crucial factor to realize the socio-economic
objectives in India.
i) Reforms in Telecom Sector:
Telecommunications is one of the few sectors in India, which has witnessed the most
fundamental structural and institutional reforms since 1991. Considering the great potential for
the growth of telephone demand with the accelerated growth of economic activities, the
Government of India announced the National Telecom Policy in 1994 and the New Telecom
Policy in 1999. The National Telecom Policy provides for private sector participation to
supplement the efforts of DoT in basic telephone services. The opening up of the basic services
provided a big opportunity for private & foreign investors. More policy initiatives included
Addendum to NTP -1999, Broadband Policy 2004, amendment to Broadband Policy 2004 etc.
To a great extent the perceived linkage between communications, information technology and
growth has shaped the Indian telecommunications policy, market perception and consequently
industry activity. Access to information infrastructure has been seen as a prerequisite not just to a
robust IT industry but also to broad based growth and competitiveness in all other services and
industries. The entire sector is now open to unrestricted competition in all segments except
cellular services where spectrum is a limiting factor. The reforms process in the telecom sector is
still on, aiming to remove the balance hurdles and limitations. One such hurdle is ensuring
expansion of sustainable connectivity in rural areas. To encourage rural telephony, the
government has set up a universal service fund earlier. Broadband policy has been announced
with a view to providing better quality of services. One of the aims of this policy is to make rural
connectivity remunerative and sustainable.
The opening of the sector has not only lead to rapid growth but also helped a great deal towards
maximization of consumer benefits. The tariffs have been falling continuously across the board
as result of healthy and unrestricted competition. Besides, as a result of the various measures and
initiatives taken by the Government, India is now fast emerging as one of the leading telecom
nations. Since beginning of the Ninth Plan, the telecom services have registered a consistently
high growth rate of more than 20 percent per annum. The robust private sector participation has
resulted in unprecedented growth in the cellular and WLL services. The growth of network has
been very encouraging but still a lot need to be done so that India remains a front- runner in
information revolution.
ii) Major Players
There are three types of players in telecom services:
• State owned companies (BSNL and MTNL).
• Private Indian owned companies (Reliance Infocomm, Tata Teleservices,).
• Foreign invested companies (Vodafone-Essar, Bharti Tele-Ventures, Idea Cellular, BPL
Mobile, Spice Communications, etc.).
iii) Evolution of the industry-Important Milestones
(History of Indian Telecommunications)
1851: First operational land lines were laid by the government near Calcutta (seat of British
power).
1881: Telephone service introduced in India.
1883: Merger with the postal system.
1923: Formation of Indian Radio Telegraph Company (IRT).
1932: Merger of ETC and IRT into the Indian Radio and Cable Communication Company
(IRCC).
1947: Nationalization of all foreign telecommunication companies to form the Posts, Telephone
and Telegraph (PTT), a monopoly run by the government's Ministry of Communications.
1985: Department of Telecommunications (DOT) established an exclusive provider of domestic
and long-distance service that would be its own regulator (separate from the postal system).
1986: Conversion of DOT into two wholly government-owned companies: the Videsh Sanchar
Nigam Limited (VSNL) for international telecommunications and Mahanagar Telephone Nigam
Limited (MTNL) for service in metropolitan areas.
1997: Telecom Regulatory Authority of India created.
1999: Cellular Services are launched in India. New National Telecom Policy is adopted.
2000: DoT becomes a corporation, BSNL
2000: National Long Distance opened for private participation without any restriction on the
number of operators.
2002: Universal Service Obligation Fund
2003: Unified Access Services: Unified access license regime operators are free to provide,
within their area of operation, services, which cover collection, carriage, transmission and
delivery of voice and/or non-voice messages over Licensee’s network by deploying circuit,
and/or packet switched equipment.
2004: Broadband Policy: The main emphasis is on the creation of infrastructure through various
technologies that can contribute to the growth of broadband services. These technologies include
optical fibre, Asymmetric Digital Subscriber Lines (ADSL), cable TV network; DTH etc.
1.1.3) Vodafone Essar Ltd:
Vodafone Essar is a one of the major player of mobile telecommunications in India.
Headquarter located in Mumbai Maharashtra, India. Vodafone Essar formerly known
as Hutchison Essar is a cellular operator in India that covers 23 telecom circles in India based
in Mumbai. Vodafone Essar is owned by Vodafone 67% and Essar Group 33%. It is the second
largest mobile phone operator in terms of revenue behind Bharti Airtel, and third largest in terms
of customers.
On February 11, 2007, Vodafone agreed to acquire the controlling interest of 67% held by Li Ka Shing Holdings in Hutch-Essar for US$11.1 billion, piping Reliance Communications, Hinduja Group, and Essar Group, which is the owner of the remaining 33%. The whole company was valued at USD 18.8 billion. The transaction closed on May 8, 2007. Despite the official name being Vodafone Essar, its products are simply branded Vodafone. It offers both prepaid and postpaid GSM cellular phone coverage throughout India with good presence in the metros.
Vodafone Essar provides 2.75G services based on 900 MHz and 1800 MHz digital GSM
technology, offering voice and data services in 23 of the country's 23 license areas. It is among
the top three GSM mobile operators of India.
Vodafone Essar is spending somewhere in the region of Rs. 250 crores on this high-profile
transition being unveiled today. Along with the transition, cheap cell phones have been launched
in the Indian market under the Vodafone brand. The company also plans to launch co-branded
handsets sourced from global vendors as well. China's ZTE, which is looking to set-up a
manufacturing unit in the country, is expected to provide several Vodafone handsets in India.
Earlier this year, Vodafone penned a global low-cost handset procurement deal with ZTE.
Organisation Structure:
Fig 1.3: Organisation Structure of Vodafone Essar Ltd.
1.1.4) Vodafone Group plc
Vodafone Group plc is a British multinational mobile network operator headquartered
in Newbury, England. Vodafone is the world's largest mobile telecommunication network
company, based on revenue, and has a market value of about £71.2 billion (November 2009). It
currently has operations in 31 countries and partner networks in a further 40 countries. Based on
subscribers, it is the world's second largest mobile phone operator behind China Mobile and
over Telefónica, with over 427 million subscribers in 31 markets across 5 continents as of
2009. In the UK, its home ground, Vodafone has badly underperformed in the last few years due
to brisk change in administration. It has slipped from first to third largest telecom operator
generating a revenue of £4.9 billion from its 18.7 million customers in 2008-09. As of March 31,
2009, the company employs more than 79,000 people worldwide.
The name Vodafone comes from voice data fone, chosen by the company to "reflect the
provision of voice and data services over mobile phones".
Vodafone owns 45% of Verizon Wireless, the largest wireless telecommunications network in
the United States, based on number of subscribers. The Total Revenue is more than £44.47
billion (2010), Profit is more than £8.645 billion (2010), Total assets is more than £156.98
billion (2010) and Total equity is more than £90.38 billion (2010). Vodafone is managed by Sir
John Bond (Chairman), Vittorio Colao (CEO), John Buchanan (Deputy Chairman) and Andy
Halford (CFO)
A map showing Vodafone Global Enterprise’ footprint. Vodafone Operating Countries Vodafone's partners and affiliates
Source: 2009 TRAI Report on the Indian telecom services performance Indicators
Table 2.1: Subscriber Base and Teledensity – Rural and Urban
Jun-08
Sep-08
Dec-08
Mar-09
Jun-09
5% 15% 25% 35% 45% 55% 65% 75% 85% 95%
Jun-08 Sep-08 Dec-08 Mar-09 Jun-09
Rural 0.252 0.256 0.27 0.284 0.293
Urban 0.748000000000007
0.744000000000007
0.730000000000001
0.716000000000001
0.707000000000001
Market Share - Rural and Urban
Fig 2.1: Market Share – Rural and Urban
Wireline Services:-
The Wireline subscriber base declined from 37.31 million in September 2009 to 37.25 million at
the end of October 2009. BSNL and MTNL hold 85.46% of the wireline market share. However,
they lost .12 million subscribers in the month of October 2009.Overall wireline teledensity in
now 3.18.
Rural wireline subscriptions declined at a faster rate than urban subscriptions, leading to
reduction in the share of the rural subscriber base.
Jun-08
Sep-08
Dec-08
Mar-09
Jun-09
5% 15% 25% 35% 45% 55% 65% 75% 85% 95%
Jun-08 Sep-08 Dec-08 Mar-09 Jun-09
Rural 0.291 0.286 0.282 0.279 0.275
Urban 0.709000000000001
0.714000000000001
0.718000000000001
0.721000000000001
0.725000000000001
Wireline Market Share - Rural and Urban
Fig 2.2: Wireline Market Share - Rural and Urban
Wireless Services:
Indian’s wireline base increase from 1.6 million at the beginning of 2000 to over 325 million in
October 2008. This has been achieved with successive years of sharp subscriber growth – 69% in
2004, 58% in 2005, 97% in 2006 and 57% in 2007. Since wireless penetration was
approximately 28% in 2008, there is still large potential for future growth. Indian’s operators
have not still exhausted the full potential of domestic telecom market. It is expected that wireless
growth will increasingly emerge from rural India. In 2012, rural subscriber will account for
almost half the total wireless base.
Jun-08
Sep-08
Dec-08
Mar-09
Jun-09
5% 15% 25% 35% 45% 55% 65% 75% 85% 95%
Jun-08 Sep-08 Dec-08 Mar-09 Jun-09
Rural 0.247 0.252 0.269 0.285 0.295
Urban 0.705000000000001
0.748000000000006
0.731000000000001
0.715000000000001
0.705000000000001
Wireless Market Share - Rural and Urban
Fig 2.3: Wireless Market Share - Rural and Urban
25%
18%
17%
13%
9%
10%
8%
Wireless Operators Market share
Bharti AirtelRcomVodafoneBSNLTata TeleIdeaOthers
Fig 2.4: Wireless Operators Market share
2.3) Current scenario:
GSM and CDMA are the two main competing network technologies deployed by cellular service
providers’ world over.
GSM (Global System for Mobile Communications) originated in Europe in 1990. The GSM Association
is an international organization founded in 1987, dedicated to developing, providing and overseeing the
worldwide wireless standard of GSM. At the end of June 2009, GSM subscribers constituted 77% of
the wireless market. The GSM subscribers were 328.83 million at the QE June 2009 as against
297.26 million at the end of the previous quarter, showing a growth of 10.62%. Bharti Airtel
with 102.37 million subscribers continues to be the largest GSM mobile operator followed by
Vodafone with 76.45 million and Idea with 47.09 million.
CDMA (Code Division Multiple Access ) is a proprietary standard designed by Qualcomm Inc in United
States and has been the dominant network standard for North America and parts of Asia. It became an
international standard in 1995. The CDMA subscribers’ base increased to 98.46 million during the
QE June 2009 from 94.49 million at the end of the previous quarter. Reliance is largest CDMA
mobile operator with 54.19 million subscribers, followed by Tata Teleservices with 37.12
million.
2.4) Future Projections:
India to reach 600m mobile connections by 2011*
Mobile phone connections in India will reach 600 million in five years time as handsets and
tariffs become more affordable for the urban population. It is expected that the urban populations
of India to reach high levels of mobile phone saturation in five years time, to the extent where
many phone users will have two or more handset connections. A large portion of this growth will
arise from pre-paid connections, driven by the increasing affordability of handsets and tariffs
amongst India’s lower middle classes.
“The phenomenal growth in the Indian mobile phone market has largely been driven by
urban consumption. We expect this to continue with urban geographies achieving saturation
levels similar to current Western European markets in the next five years. Mobile connections
in rural geographies will be constrained by coverage of network infrastructure and
affordability of handsets which will limit consumption to no more than 150 million by 2011”
- Raj Modi, Research Director at Centre for Telecoms Research.
2.5) Importance of Schemes
The rising competition in telecom industry led to cut-throat competition, a company can only
survive in this market when their program to be better than competitors programs, and for these
they timely update their marketing activity. For better improvement they compare their activity
with other competitor marketing activity. So that company can take the adequate action in order
to enhance the sales to withstand the highly competitive market situation and amplify its market
share.
For enhancing the sales they want to build retailer base stronger and loyal. Keeping in mind that
every retailer sells companies products with the intention of earn profit. These profits are in term
of profit margin which they get while selling new connection and ETop. Higher margin attracts
more retailers towards company which reciprocates into higher sales. Company cannot give
higher margin to the Retailers beyond limit as per the standard of TRAI.
For this the companies have introduced schemes to appreciate only those retailers who have
shown their sincere efforts towards company in terms of increasing sales. Some schemes are
made by the company only for top retailers; these schemes are termed as Loyalty programs.
2.5.1) Loyalty Programs
Loyalty programs are structured marketing efforts that reward, and therefore encourage, loyal
buying behavior — behavior which is potentially of benefit to the companies. For these
companies had created membership number that identifies the retailer as a member in a loyalty
program.
A company may issue a membership number to a retailer who can later use it as a form of
identification while dealing with the company. By presenting the membership number, the
purchaser from company gives special discounts or allotment of points that can be redeemed
later.
As in loyalty program only Top retailers are enrolled. High sale from retail counter influences
the company. Companies give special right or immunity to these particular top retailers for their
sincere efforts for bringing up these companies to the position it is currently standing at and these
program / schemes are just a platform for the company to express their gratitude. These
privileges are just a way to show that companies care for these retailers.
The rising competition in telecom industry led to tuff competition in Special loyalty program.
Each company wants their program is better than competitor program, for these they timely
update their program / scheme.
Special Loyalty Program run by these telecom operators are as follow
Vodafone – ‘Score Kya Hai’
Idea – ‘Rajwada’
Airtel – ‘Navratna’
Telecom operators also runs various other several programs / schemes, but those scheme are
quantity oriented not quality oriented. These special loyalty programs are quality oriented.
No other telecom operators accept Vodafone, Airtel and Idea run such loyalty program.
2.5.1.1)
1) Vodafone Score Kya Hai (SKH)
1.1) About Vodafone Score Kya Hai (SKH)1.2) Selection of Retailers 1.3) Registration process
1.3.1) Registration method
1.4) Base of Target1.4.1) Runs System
a) Activation Count:b) Revenue (recharge)c) Bonus Card Sold
c.1) About Bonus Cardc.2) Other Bonus Cardsc.3) Bonus Card sold v/s Runs
1.5) FD (Fix Deposit) 1.6) Reward and Recognition1.7) Current Status 1.8) Party Details
Vodafone Score Kya Hai (SKH)
1.1) About Vodafone Score Kya Hai (SKH):
Vodafone present it’s a customer loyalty program – Score Kya Hai (SKH).
Score Kya Hai (SKH) is designed keeping in mind the interest of all Vodafone partners across
the country. These retailers are top retailers partners in the country, the short listed on the basis
of Activation count, Lapu Recharge and Bonus Card.
Vodafone – Score Kya Hai (SKH) is started two and half year ago. The duration of each SKH is
of 4 month. SKH offers equal opportunities for every retailer to earn on the basic of their
performance. The best retailers can get ranges of electronic items & other useful products.
The Target is determined by a combination of Activation count, LAPU Recharge and Bonus card
sold. At each slab, retailer will have access to an exclusive set of benefits, privileges and
rewards.
There is grand party at the end of each Vodafone: - Score Kya Hai (SKH)
In party retailers have the chances to meet- ZSM, ZBM & other known persons of
Vodafone.
Cultural program during the event.
Talk show, about the company performance.
Drink & Dinner also there.
1.2) Selection of Retailers:
The selection of retailers are base on performance which they shown in terms of New
Connection sold, recharge or E-Top and Bonus card sold in resent past by retailer and also runs
retailer scored in last SKH.
1.3) Registration process:
Company automatically select retailer who is eligible for SKH according to its past performance,
also company itself assign target to retailers, target is base on its slab and its past performance in
SKH.
1.3.1) Registration method:
The AM of the company informs the retailers about their target, which the retailer has to achieve
in the period of SKH (4month). Company also timely informs retailers about their target through
SMS.
Vodafone also provide a book to retailer which contain all the detail about SKH, such as what is
the future plan of company, how a retailer can get maximum benefit from this schemes.
1.4) Base of Target:
Target for Retailers are base on Past Performance. For achieving the target, retailers have to
score Runs. The Scoring of the runs is base on Runs System which is base on:
1. Activation Count
2. Revenue (recharge)
3. Bonus Card Sold
1.4.1) Runs System:
The Runs system will use for selecting those retailers who has shown there sincere effort towards
Vodafone. A retailer can score runs throw prepaid activation, postpaid activation, LAPU
Recharge even from Bonus Card sold to the customer.
a. Activation Count:
The activation is counted only when he/she fulfill all the 4 conditions (PAC, CIF, RES and OTF)
PAC - Command which is send to telecom operators for activation of connection.
CIF (Customer Information Form) - Deposition of true document of customer on time.
RES - First Recharge and usage of connection.
OTF - Second Recharge.
According to amount of Second Recharge done by retailers Runs are given.
Second Recharge Runs
Rs. 14 SR 1 Run
Rs. 28 SR 3 Run
Rs. 37 SR 2 Run
Rs. 48 SR 4 Run
Rs. 98 SR 5 Run
Rs. 175 SR 6 Run
RES 5 by the end of the month only then the Runs is counted.Table 2.2: SKH Second Recharge v/s Runs
b. Revenue (recharge):
Retailer can score run by E-Top also. If a retailer do single recharges of Rs. 200 retailer get - 1
run per recharge
c. Bonus Card Sold: - Retailers can score Runs by selling bonus card also:
c.1) About Bonus Card
Bonus Card introduces by Vodafone keeping in mind the customer needs. Customer can select
any of Bonus Card and enjoy the benefits. There is large number of benefits which customers get
from Bonus Card:
Rs 4 Bonus Card
Customer can select the following offers with the Rs 4 Bonus Card. By Calling 121 (toll free).
These products are at a price of only Rs 4 by deduction from the account balance. This way
customer has an easy option of subscribing to this product through balance deduction, without
doing a recharge, if customer has sufficient balance in their account.
Deduction (from core account balance)
Benefits Validity ends on
Rs. 4 10 Local / STD minutes Same day midnight (day of activation product ) 1 dayRs 4 Vodafone to Vodafone at
20p/minuteRs 4 100 Local/ National SMSRs 4 40 Vodafone to Vodafone local
night minutesNext day midnight ( day after
activating product)
Note:
To activate the product, customer needs to dial 121 IVR
After dialing 121, customer will hear his best offer then the Daily Pack Offer
information.
Customer can listen to all the benefits under the product and subscribe to whichever pack
he wishes through the IVR itself and opt for daily validity pack priced at Rs.4.
Customer needs to have at least Rs 4 Balance at the time of subscription.
Customers who already have same service, and Opt for any pack then would be told to
complete his existing balance/service first before applying it.
Packs will be activated within 1 hour of receipt of request on 121 IVR.
These products are not recharged based product i.e can’t be activated through e-top
recharges.
c.2) Other Bonus Cards:
There is many other Bonus Cards which is available for customer. From these bonus cards not only customer can enjoy benefit but also retailer can also score Runs. These Bonus cards are as follow:
Bonus Card MRP (Rs) Benefits
BC 12 12 Local Vodafone to Vodafone night call (11pm to 6am) -10p/min.Local SMS – 10p/SMS.
Vodafone to Other network calls – 1.2p/secValidity – 365 days
Call Gulf @ 6.99
18 Call rate 6.99Rs/minGulf Countries applicable UAE, Saudi Arabia, Qatar, Kuwait, Bahrain
Validity – 30 daysBC 21 (Apne
Minutes)21 Night minutes(11pm to 6am) – 210
Tariff Validity 15 daysBC 22 22 Local Vodafone to Vodafone(11pm to 6am) @ Re1 for 20 min
Tariff Validity 15 days. Not applicable for per second subscribersBC 24 24 All calls to USA & Canada @2,25/min
Validity 30 daysBC 34 34 All local and STD @ 50 p/min
BC 59 (Apne Minutes)
59 120 Local Vodafone to Vodafone minutesValidity of Free Minutes - 15 days
BC 79(Apne Minutes)
79 Local Vodafone to Vodafone -150p/min.Local SMS –150.
Validity of free minutes - 15 days.BC 99 99 Local Vodafone -225.
Validity of free minutes - 30 days.BC 199 199 400 Local and STD minutes, 400 Local and STD SMSBC 149 149 : 300 STD minutesBC 298 298 720 Local Vodafone to Vodafone minutes
Talk Value (Rs) – 10Validity - 30 days
Table 2.3: SKH Bonus Card
Salient features:-
1. Available for all prepaid customers.2. Local Vodafone – Vodafone minutes can be used for 24 hrs.3. On recharging with local minute pack of Rs 79, customer will get 150 local Vodafone –
Vodafone minutes and 150 local SMS.4. Available through E-top only.
c.3) Bonus Card sold v/s Runs
By selling above bonus card retailer can score Runs. The Runs are base on Bonus Card.
Bonus Card Runs10 -25 1 Run per BC26 -50 1.5 Run per BC51 -100 2 Run per BC
100< 3 Run per BCTable 2.4: Bonus Card sold v/s Runs
1.5) FD (Fix Deposit): -
Retailers with the intention of retaining their savings Runs for a fixed period for some future use
can apply for a fixed deposit account. Retailers can FD their Runs during the Retailer’s meet at
the end of SKH. A fixed deposit account allows retailers to deposit their Runs for a set period of
time, thereby earning a higher rate of interest in return. Throw this retailer can approach higher
range of item which are in the slab and can also get extra benefits. There is minimum amount of
Runs which must be deposit in FD which is decided by Vodafone.
1.6) Reward and Recognition
The program is divided in different parts. The program aims to recognize and reward partners
keeping in mind their score Runs.
These rewards will be duly presented to the respective members at the end of each SKH period,
in presence of all the members.
1.7) Current Status
For current status update, a retailer can send massage from its lapu number and get its current
status. Retailer also periodically gets its regular update from Area Manager or Vodafone
representative.
1.8) Party Details:
Vodafone organized a grand retailer’s meet for selected retailers in Rajasthan after successfully
completion of scheme. This member’s/retailer’s meet was organized with a view to felicitate the
efforts of member’s/retailers and to make them feel privileged and special. During the event
cultural program adds more glitz. Celebrity during the events and breathe taking performance
and enthralled the gathering.
The start of event with the talk show, Talk show displays the company performance in recent
past time. There is standard dinner and drink available in the event. Only Qualified
members/retailers are invited in the party, the approximately these is a gathering of 400 to 500
people. There is one pass for one member/retailer, these passes as well as other information
about event are given to the retailer at it outlet by the Vodafone representative or Area Manager.
Members/Retailers has to come by its own, company has no responsibility for transportation.
Members/Retailers have to bring pass otherwise he/she will not be allow in the event.
In this event performing retailers of Retail Engagement Program (REP) were also rewarded.
Range of electronic item and other useful products are given as prizes. Any reward given to
member cannot be exchange for cash, revoked or cancelled by the member/retailer, Member /
retailer can make FD (Fixed Deposit) of scored runs till next SKH, on this FD retailer gets extra
benefits in terms of runs. Vodafone accepts no responsibility for any variation in the prize
values.
Award was given to the retailer as per his achievement in the program and Product he/she was
enrolled in. Retailer cannot go for lower slab prize if he is not able to achieve the target. The
Vodafone reserves the right to delay or postpone the same.
During the party retailers have the chances to meet- ZSM, ZBM & other known persons of
Vodafone so that they feel importance. In event there are lots of other surprise prices are also
given. Prizes have to be collected within a month of notification or prizes will be forfeited at the
sole discretion of Vodafone. No compensation will be due to the retailer who fails to claim the
prize within the stipulated time. Collection instruction will be provided in the same notification.
Vodafone decision on all aspect of the program, winner, etc will be final and binding. No
correspondence in this regard will be entertained. The decisions made by Vodafone are final and
binding in all manners and no appeals shall be entertained for any reasons whatsoever. Vodafone
is not responsible for and shall not be liable for late, lost, misdirected or unsuccessful efforts to
notify winner.
2.5.1.3)
2) Idea Rajwada
2.1) About: - Idea Rajwada2.2) Registration process
2.2.1) Registration method
2.3) Bases of Target2.4) Points System2.5) Criteria2.6) Price System2.7) Customer Scheme:2.8) Current Status
Idea Rajwada
2.1) About: - Idea Rajwada
Idea present it’s a customer loyalty program – Rajwada, The Elite Partner Club.
Rajwada is designed keeping in mind the interest of all Idea partners across the country 5 th
Rajwada (1June – July). These retailers are mainly top retailers partners in the country, the short
listed on the basis of Activation count and Lapu Recharge.
The duration of each Rajwada is of 2 month. In Rajwada offers 3 levels of opportunities to earn
more on the basic of their performance – Swarn, Rajat and Kansya . The performing retailers of
every slab are given a chance to win range of electronic item and other useful products.
This level is determined by a combination of your activation count and LAPU Recharge. At each
level, retailer will have access to an exclusive set of benefits, privileges and rewards.
Selection of Retailers: The selection of retailers are base on New Connection sold in last quarter,
recharge or E-Top done by retailer and points retailer scored in last quarter
2.2) Registration process
Company automatically select retailer who is eligible for Rajwada according to its past
performance, also company itself assign the category for retailer.
2.2.1) Registration method
The TM of the company informs the retailers about their target, which the retailer has to achieve
in the period of Rajwada (2month). Company also timely informs retailers about their target
through SMS.
Idea also provide a book to retailer which contain all the detail about Rajwada, such as what is
the future plan of company, how a retailer can get maximum benefit from this schemes.
Retailer are divided into three category (3 Dwar) which are
1. Gold (Swarn)
2. Silver (Rajat)
3. Kansya (Bronze)
2.3) Bases of Target
Target for Retailers are base on past performance. Target is effected by:
1. Activation
2. Revenue (recharge)
Target of retailer is base on sum of Etop and New Activation done in past two month:
Etop Balance + New Activation = Target for retailers
Target also gets affected by BLR of the retailer.
2.4) Points System
The Point system will use for selecting qualified retailers of all three dwar. A retailer can score
points throw prepaid activation, postpaid activation and LAPU Recharge of Idea.
But activation points are base on PAC, CIF and RES. When all 3conditions fulfill then only
points are counted.
PAC – Command which is send to telecom operators for activation of connection.
CIF – Deposition of true document of customer on time.
RES – First recharge and usage of connection.
Condition Points
Prepaid Activation 15 point/act
Postpaid Activation 15 point/act
Recharge Sold 3 point/ 200lapu
Table 2.5: Rajwada Points System
Points of one Rajwada can be carrying forward in next Rajwada. But points are valid till the last
day of ongoing financial year (31/march/2010). In simple sense point score in Rajwada during
April – May can be carry forward in next Rajwada but points valid till the last date of that
financial (31/march).
Every Retailer has given an appropriate target according to its past performance. If retailer
achieves the desired target in the period then only retailer gets extra benefits. But if retailer
doesn’t able to achieve its target then retailer has to give penalty, only then after the points are
going to carry forward. Retailers have to achieve 81% of his target otherwise points are going to
collapse. If pointes are more than 81% of his target then only the points are going to carry
forward. But retailer has to give penalty in term of points, so carry forward points will be:
2) Calculation at the end of second halfPerformance points at the beginning of program: 200Performance points at the end of first half: 250Performance points at the end of second half: 300
• Complimentary transfers will be provided as per the membership level.• Booking should be done at least 2 working days in advance.
3.7.2) VLCC Special Package:
Navratna offers special packages from VLCC. VLCC is present 50 cities across the country.
Retailers can avail the following benefits by showing Navratna membership card at VLCC
outlets or by just messing ‘VLCC Airtel’ to 55050
• 30% off on Slimming packages
• 30% off on Beauty Packages
• 15% off on Regular Salon Service
• Body Composition Analysis worth Rs 500/-
• Skin & Hair Analysis Worth Rs 500/-
Benefits are subjected to the following terms and Conditions:
• This offer cannot be combine with any ongoing offer, promotions & discounts
• This discount is valid at all VLCC outlets across India except the VLCC Spa at Vasant Vihar and Safdarjung Enclave, New Delhi.
• Discount valid on prior appointments only
• The discount offered are not applicable on International lines & Dermatological procedures
• The discounts are applicable on MRP
3.7.3) Ferns ‘N’ Petals (FNS):
By showing Navratna Membership card retailer can avail up to 15% discount at a FNP outlet.
FNP outlets are spread across 30 cities all over India. Here’s a simple breakdown of the offers
that retailers get:
• 10% discount for shopping up to Rs 1000/-• 12.5% discount for shopping up to Rs 1001/- to 1500/-• 15% discount for shopping of Rs 1501/- and above
3.8) Reward and Recognition
The program is divided in different parts. The program aims to recognize and reward partners
keeping in mind their increment growth achieved.
These rewards will be duly presented to the respective members at the end of each Navratna
period, in presence of all the members of that particular category. The first event took place at
the end of December ’08.
3.9) Base for Rewards:
In every Navratna the standing of members in their respective categories be determined
Rank will be based on calculations of retailer percentage growth of performance points in the
program period
Retailers must manage a minimum of 5% growth over the base performance points, to be eligible
for rewards
The following rewards will be given for category – Platinum, Gold & Silver
1) Top 30& Rankers Based on cumulative Incremental percentage growth*
Top 30% retailers in each category will be rewarded Gold Coin base on their respective category
Platinum Partner: - 15 Gm GoldGold Partner: - 10 Gm GoldSilver Partner: - 5 Gm GoldFor instance, if the Gold category has 100 members, the top 30 with the highest growth rate in
that particular Navratna, will be selected and rewarded
Top 10% Rankers based on Incremental % Growth (Both category are non-overlapping
rewards)
• Only applicable for the consistent partners • Top 10% rankers, for just the consistent partners, in each category will also be rewarded.
For instance, in the second Navratna, in a Gold category with 100 members, not only the top 30
rankers throughout the program period, but even the top 10 rankers for only the second Navratna
will also be rewarded.
Other Qualified retailers are also given Silver coin as a pacification price
Do you aware of special scheme “Score Kya Hai” offer by Vodafone ( mark).
Yes No
Do you aware of special scheme “Navratna” offer by Airtel ( mark).
Yes No
Scheme you like the most ( mark)
Score Kya Hai Navratna
Key points you like in registration process of Airtel “Navratna” and Vodafone “Score Kya Hai” ( mark).
Airtel “Navratna” Vodafone “ Score Kya Hai”
Registration Process
Registration method throw __ TM __ SMS __ Enrollment letter
Registration method throw __ AM __ SMS __ Enrollment letter
Target base on __ Activation __ E-Top
Target base on __ Activation __ E-Top __ Bonus card
Category -- (Platinum, Gold, Silver ) No such Category
Activation . Platinum - 500 per month . Gold – 200 per month . Silver -100 per month
Activation
No such hard & fast rule.
ETop . Platinum – Rs 5000 per day . Gold – Rs 3000 per day . Silver – Rs 2000 per day
ETop
No such hard & fast rule.
Key points you like in Points / Runs system in Airtel “Navratna” and Vodafone “Score Kya Hai” ( mark).
Airtel “Navratna” Vodafone “ Score Kya Hai”
Scoring of Points / Runs
Points system Runs System
Base on PAC + CIF + RES Base on PAC + CIF + RES + OTF
Activation _ 1 Prepaid connection - 1 point _ 1 Postpaid connection - 2 point
Second Recharge . Rs 14 SR – 1 Run Rs 28 SR – 3 Run . Rs 37 SR – 2 Run Rs 48 SR – 4 Run . Rs 98 SR – 5 Run Rs 175 SR – 6 Run . RES 5 by the end of the month
ETop _ Recharge of Rs 5000 - 1 point
ETop -- Single recharge of Rs 200 – 1 Run
No points on sell of Bonus Card Sell Bonus card & get additional runs . 10 - 25 – 1 Run per BC . 26 - 50 – 1.5 Run per BC . 51 - 100 – 2 Run per BC . 100 < – 3 Run per BC
No such point system T1M of retailer is 65% & above – 3 Run per alive subscriber
Timely performance tracking system _ TM _ SMS
Timely performance tracking system _ AM _ SMS
Method for calculation of Incremental Sales Growth No such difficult calculation
Key points you like in party of Airtel “Navratna” and Vodafone “Score Kya Hai” ( mark).
Airtel “Navratna” Vodafone “ Score Kya Hai”
Party Details
Invitation . SMS TM Invitation letter
Invitation . SMS AM Invitation letter
Price -- Gold & Silver coin . Top 30% retailers in each category will be reward . Platinum – 15gm gold coin . Gold – 10gm gold coin . Silver – 5gm gold coin . Other Qualified Retailers . Platinum – 30 gm silver coin . Gold – 20gm silver coin . Silver – 10gm silver coin
Price -- Ranges of electronic items & other useful products
Party
-- Location -- Cultural program -- Talk show -- Drink -- Dinner -- Gifts
Party
-- Location -- Cultural program -- Talk show -- Drink -- Dinner -- Gifts