Reliance Communication Internship Report by Vikas Dubey

Summer Internship Report

On

“TARIFF WARS BETWEEN THE TELECOM PLAYERS & HOW

TO INCREASE THE INCREMENTAL REVENUE MARKET SHARE (IRMS) FOR RELIANCE COMMUNICATIONL LIMITED”

By

Vikas Dubey A0102209092

MBA (M&S) Class of 2011

Under the Supervision of

S.K.Laroiya Professor

Department of Economics

In Partial Fulfillment of Award of Master of Business Administration

AMITY BUSINESS SCHOOL AMITY UNIVERSITY UTTAR PRADESH

SECTOR 125, NOIDA - 201303, UTTAR PRADESH, INDIA 2010

AMITY UNIVERSITY UTTAR PRADESH

AMITY BUSINESS SCHOOL

DECLARATION

I, Vikas Dubey student of Masters of Business Administration (Marketing and Sales) from Amity Business

School, Amity University Uttar Pradesh hereby declare that I have completed Summer Internship on

“TARIFF WARS BETWEEN TELECOM PLAYERS AND HOE TO INCREASE INCREMENTAL MARKET REVENUE

MARKET SHARE (IRMS) FOR RELIANCE COMMUNICAION” as part of the course requirement.

I further declare that the information presented in this project is true and original to the best of my

knowledge.

Date: 10/07/10 Vikas Dubey

Enroll. No: A0102209092

Place: Noida MBA (M&S) Class of 2011

`

AMITY UNIVERSITY UTTAR PRADESH

AMITY BUSINESS SCHOOL

CERTIFICATE

I hereby certify that Vikas Dubey students of Masters of Business Administration (Marketing and

Sales) at Amity Business School, Amity University Uttar Pradesh has completed Summer Internship on

“TARIFF WARS BETWEEN TELECOM PLAYERS AND HOE TO INCREASE INCREMENTAL MARKET REVENUE

MARKET SHARE (IRMS) FOR RELIANCE COMMUNICAION”, under my guidance.

Dr. S.K. Laroiya

(Lecturer/Asst. Prof./Prof.)

Department of Economics

Contents

S.No. Chapter Name Page No.

1 Introduction 01

2 History 02

3 Vision 02

4 Corporate Profile 03

5 Chairman’s Profile 04

6 Organizational Setup 06

7 Product and services 07

8 Distribution and channel partners 16

9 Competitors 18

10 Tariff war 20

11 Way to increase the market share 25

12 Reliance and 3G 34

13 Findings 36

14 Recommendation 38

15 Conclusion 39

INTRODUCTION:-

The Late Dhirubhai Ambani dreamt of a digital India — an India where the common man would

have access to affordable means of information and communication. Dhirubhai, who single-

handedly built India’s largest private sector company virtually from scratch, had stated as early

as 1999: “Make the tools of information and communication available to people at an affordable

cost. They will overcome the handicaps of illiteracy and lack of mobility.”

It was with this belief in mind that Reliance Communications (formerly Reliance Infocomm)

started laying 60,000 route kilometers of a pan-India fiber optic backbone. This backbone was

commissioned on 28 December 2002, the auspicious occasion of Dhirubhai’s 70th birthday,

though sadly after his unexpected demise on 6 July 2002.

Reliance Communications has a reliable, high-capacity, integrated (both wireless and wireline)

and convergent (voice, data and video) digital network. It is capable of delivering a range of

services spanning the entire infocomm (information and communication) value chain, including

infrastructure and services — for enterprises as well as individuals, applications, and consulting.

Today, Reliance Communications is revolutionising the way India communicates and networks,

truly bringing about a new way of life.

Facts figures:-

• Founded: - 2004

• Founder: - Dhirubhai Ambani

• Headquarters: - Navi Mumbai, Maharashtra, India

• Key people: - Anil Ambani (Chairman)

Satish Seth (MD)

• Revenue: - Rs 22,948 crore (US$ 5.12 billion) (2009)

• Operating income: - Rs 9,305 crore (US$ 2.08 billion) (2009)

• Net income: - Rs 6,045 crore (US$ 1.35 billion) (2009)

• Total assets: - Rs 102,207 crore (US$ 22.79 billion) (2009)

• Total equity: - Rs. 1,032 crore (US$ 230.14 million) (2009)

• Employees: - 31,884 (2009)

HISTORY:-

Late Dhirubhai Ambani had a vision of making tools of communication available to commoners

thereby allowing them to overcome barriers of mobility. Likewise, Reliance Communications is

capable of delivering services covering entire gamut of information and communication value

chain. Their products and services include infrastructure setting, applications and consultancy.

Reliance Communications was set up as Reliance Infocomm in 1999 and from 2000 onwards

laying of optical fibers started in Maharashtra, Gujarat and Andhra Pradesh. Reliance Infocomm

was inaugurated in 2002 and first of interconnect (POI) was established in New Delhi in same

year. Also in that year, Reliance Communications commissioned their 1st optic fiber backbone.

In 2005, this company launched global roaming facility and CDMA services. Reliance

Communications was formed in 2006 and listed in Bombay and National stock exchanges.

Reliance Communications Limited founded by the late Shri. Dhirubhai H Ambani (1932-2002)

is the flagship company of the Reliance Anil Dhirubhai Ambani Group. It is India's foremost

truly integrated telecommunications service provider. With a customer base of over 36 million

including close to one million individual overseas retail customers, Reliance Communications

ranks among the top ten Asian Telecom companies. Its corporate clientele includes 600 Indian,

250 multinational corporations and over 200 global carriers and owns and operates the world's

largest next generation, IP enabled connectivity infrastructure, comprising over 150,000

kilometers of fiber optic cable systems in India, USA, Europe, Middle East and the Asia Pacific

region.

VISION:-

“We will leverage our strengths to execute complex global-scale projects to facilitate

leading-edge information and communication services affordable to all individual

consumers and businesses in India. We will offer unparalleled value to create customer

delight and enhance business productivity. We will also generate value for our capabilities

beyond Indian borders and enable millions of India's knowledge workers to deliver their

services globally.”

Reliance Communications is now among the three most valuable private sector companies in

India, and the five most valuable telecom companies in Asia. In the current Fiscal, Reliance

Communications will spend Rs 16,000cr to further expand and strengthen its network coverage

across India and the rest of the world.

In addition to organic growth, Reliance Communications will leverage the advantages derived

from this impressive financial platform to explore and pursue any significant

Opportunities available in the telecommunications sector. "We are currently evaluating a number

of inorganic opportunities in select international markets to further expand our footprint,"

Ambani said.

Reliance Communication’s One India, One Tariff plan allowed millions to connect across India

at just one rupee a minute. The company was the first one to break the Rs 1,000 entry-barrier

with the launch of the lowest-cost classic brand handset at Rs 777.

As per its expansion plan, Reliance Communications will have the single largest wireless

network in the world, covering over 900 mn Indians or more than 15% of the global population.

It will cover 23,000 towns or every single Indian habitation with a population of over 1,000.

Reliance Communications will cover almost 100% of all rail routes, providing seamless voice,

video, radio, and Internet connectivity to 14 mn commuters every day. It will also cover almost

100% of all national highways, and 84% of all state highways, giving millions of users the power

to talk, text, surf, play, chat or simply stay in touch across nearly the entire length of India's

2,00,000-km-long road network. Having achieved tremendous growth, the main challenge for

Reliance Communications is to improve quality of service and ARPU. Its enterprise business is

also not in a position to compete with the global majors. Stock market valuations may boost the

fortunes of an entrepreneur, but Ambani needs to address the issues faced by the growing mobile

customer base, especially in India, where bureaucracy takes pride in checking the businessman.

CORPORATE PROFILE:-

Organizations, like individuals, depend for their survival, sustenance and growth on the support

and goodwill of the communities of which they are an integral part, and must pay back this

generosity in every way they can... This ethical standpoint, derived from the vision of our

founder, lies at the heart of the CSR philosophy of the Reliance – ADA Group.

While we strongly believe that our primary obligation or duty as corporate entities is to our

shareholders – we are just as mindful of the fact that this imperative does not exist in isolation; it

is part of a much larger compact which we have with our entire body of stakeholders: From

employees, customers and vendors to business partners, eco-system, local communities, and

society at large.

We evaluate and assess each critical business decision or choice from the point of view of

diverse stakeholder interest, driven by the need to minimize risk and to pro-actively address

long-term social, economic and environmental costs and concerns.

For us, being socially responsible is not an occasional act of charity or that one-time token

financial contribution to the local school, hospital or environmental NGO. It is an ongoing year-

round commitment, which is integrated into the very core of our business objectives and strategy.

Because we believe that there is no contradiction between doing well and doing right. Indeed,

doing right is a necessary condition for doing well.

Board of Directors

• Shri Anil D. Ambani - Chairman

• Prof. J Ramachandran

• Shri S.P. Talwar

• Shri Deepak Shourie

• Shri A.K.Purwar

CHAIRMAN'S PROFILE:-

Regarded as one of the foremost corporate leaders of contemporary India, Shri Anil D Ambani,

48, is the chairman of all listed companies of the Reliance ADA Group, namely, Reliance

Communications, Reliance Capital, Reliance Energy and Reliance Natural Resources limited. He

is also Chairman of the Board of Governors of Dhirubhai Ambani Institute of Information and

Communication Technology, Gandhi Nagar, Gujarat. Till recently, he also held the post of Vice

Chairman and Managing Director of Reliance Industries Limited (RIL), India’s largest private

sector enterprise.

Anil D Ambani joined Reliance in 1983 as Co-Chief Executive Officer, and was centrally

involved in every aspect of the company’s management over the next 22 years. He is credited

with having pioneered a number of path-breaking financial innovations in the Indian capital

markets. He spearheaded the country’s first forays into the overseas capital markets with

international public offerings of global depositary receipts, convertibles and bonds. Starting in

1991, he directed Reliance Industries in its efforts to raise over US$ 2 billion. He also steered the

100-year Yankee bond issue for the company in January 1997.

ORGANIZATIONAL SET UP

CHAIRMAN

PRESIDENT PRESIDENT PRESIDENT

(PRESONAL BUSINESS) (ENTERPRISES BUSINESS) (HOME BUSINESS)

SENIOUR V.P

V.P

GM

DGM

AGM

SENIOUR MANAGER

MANAGER

DUPTY MANAGER

ASST. MANAGER

MANAGEMENT TRAINING

Product and Services:-

Reliance Mobile is the only operator in the country with CDMA and GSM dual technology. Our

next generation GSM network lets you enjoy seamless coverage across India and unleashes a

world of endless possibilities. Beyond calling and messaging, it lets you e-mail, MMS, download

videos, get live cricket scores, listen to music of your choice, blog and even surf the Net. All this

made vey simple, flexible and convenient to meet your every demand. So let's get started and

explore our unparallel services that will bring alive your conversations and enrich your every

experience like never before.

Prepaid and postpaid are two options for the customer for all these

services. As far as the prepaid is concerned it is widely used. But reliance mobiles focus mainly

to the postpaid. Because postpaid generate a fixed revenue. But prepaid is also very important.

Reliance Communication

Limited

Reliance

Based

Phone

Mobiles

CDMA GSM

FWP (walky

talky)

Reliance

PCO

Net connect

Product Price

• FWP (Hello) 1,400/- Rs

Activation charges + 50/- Rs

(model 2258)

• Data card (Net connect) 1,499/-Rs

Activation charges + 125/- Rs

• Reliance PCO 750/-Rs

FRC(first recharge) +1,500/- Rs

• Prepaid Sim card

GSM 49/- Rs

CDMA 200/- Rs

• Postpaid connection

GSM 100/- Rs

(Security Deposit) +250/- Rs

CDMA 200/- Rs

(Security Deposit) +250/- Rs

• Reliance base mobile MRP

For Prepaid Base Tariff (GSM & CDMA):-

All Local/Intra Circle Calls Rs.1.00

All STD Calls Rs.1.50

Roaming

All Incoming &

Local Outgoing

calls

Rs.1.00

All STD

Outgoing calls

Rs.1.50

SMS

Local Rs.1.00

Application Rs.3.00

National Rs.1.50

international Rs.5.00

International Call Rates :

Countries/Region All other Plans

USA, Canada, Fixed lines in Europe, Australia, New Zealand Rs.6.40 per min.

Mobile phones in Europe, Bangladesh, Bhutan, Maldives, Gulf,

Middle East, UAE, Africa, Rest of World

Rs. 9.19 per min.

Cook Island, Cuba, Diego Garcia, Guinea Bissau, Nauru, Norfolk

Island, Sao Tome, Sakhalin, Solomon Island, Tokelau, Tuvalu,

Vanuatu

Rs. 40.00 per min.

Popular Postpaid Tariff Plans (CDMA):-

Tariff plans

Plan name Simple

PPC 299

Simple

PPS 199

Simple 399

modified

Simple

99

My truly

unlimited

995

My unlimited

on-net 770

Available

with

All

Handsets

All

Handsets

All Handsets All

Handsets

All

Handsets

All Handsets

Monthly

Rental

Rs. 299 Rs. 199 Rs. 399 Rs. 99 Rs. 995 Rs. 770

Free usage Rs 299 (up

to 897

min)

Rs 150

(15000

sec)

Rs 399 for

local +STD

TT and Rs 399

(L+N) SMS

Rs 99

worth

SMS

(L+N)

Rs 995 free

on net SMS

(L+N)

On net mobile

unlimited free

SMS

Local 50 paisa 50 paisa 50 paisa 50 paisa Rs 1 50 paisa

National 50 paisa 50 paisa 50 paisa 50 paisa Rs 2 Rs 1

International Rs 5 Rs 5 Rs 5 Rs 5 Rs 5 Rs 5

Call

Local, Intra-

Circle

Reliance

(RIM, FWP,

fixed line)

Rs 1/call

upto 3 min

1p/sec 50 paisa 50 paisa FREE FREE / 50

paisa^

GSM &

other mobile

Rs 1/call

upto 3 min

1p/sec 50 paisa 50 paisa 50 paisa 50 paisa

Fixed line Rs 1/call

upto 3 min

1p/sec 50 paisa 50 paisa 50 paisa 50 paisa

Inter – circle

Reliance

(RIM, FWP,

fixed line)

Rs 1/call

upto 3 min

1p/sec 50 paisa 50 paisa FREE FREE / Rs 1^

GSM &

other mobile

Rs 1/call

upto 3 min

1p/sec 50 paisa 50 paisa Rs 1 Rs 1

Fixed line Rs 1/call

upto 3 min

1p/sec 50 paisa 50 paisa Rs 1 Rs 1

^ Reliance mobile to reliance hello.

L = local

N = national

Add-ons:-

• Unlimited On net 99:- Intra – circle reliance mobile to reliance mobile free.

• Unlimited On net 149:- Intra – circle CDMA to CDMA and GSM.

Popular Postpaid Tariff plans (GSM):-

Parameters PPC 299 PPS 199 Simple 99 Simple 399

Monthly rental Rs 299 Rs 199 Rs 99 Rs 399

Free RTL -RTL

min(Rs)

299 150 NA 399

Free P2P (L+N)

SMS (Rs)

NA NA 99 399

Outgoing rates

With in groups Rs 1/ 3 min 1 paisa / sec 50 paisa/ min 50 paisa/ min

Local RTL –

RTL

Rs 1/ 3 min 1 paisa / sec 50 paisa/ min 50 paisa/ min

Local R CDMA Rs 1/ 3 min 1 paisa / sec 50 paisa/ min 50 paisa/ min

Local other

GSM

Rs 1/ 3 min 1 paisa / sec 50 paisa/ min 50 paisa/ min

Local LL Rs 1/ 3 min 1 paisa / sec 50 paisa/ min 50 paisa/ min

On net STD Rs 1/ 3 min 1 paisa / sec 50 paisa/ min 50 paisa/ min

STD Rs 1/ 3 min 1 paisa / sec 50 paisa/ min 50 paisa/ min

SMS

Local 50 paisa 50 paisa 50 paisa 50 paisa

National 50 paisa 50 paisa 50 paisa 50 paisa

International Rs 5 Rs 5 Rs 5 Rs 5

• Roaming 450 plan:-

Benefits: - On roaming customer will get free incoming, On-net outgoing @ 50 paisa/ min. other

calls @ Rs1/min.

• Local pack 75:-

Benefits:- All calls @ 30 paisa/min. with add on pack Rs 75 per month.

Popular Postpaid tariff plans for FWP (Hello):-

Plan name Simply

399 full

value

Simply

PPC 299

Simply 199 Unlimited

on-net STD

775

Unlimited on-

net# 299

Monthly

Rental (Rs)

399 224 199 775 299

Free usage

(Rs)

399 299 149 NA 110

Unlimited

on-net pack

Rs 99 or

149

Rs 99 or

149

Rs 99 or 149 NA NA

SMS

Local 50 paisa 50 paisa 50 paisa 50 paisa 50 paisa

National 50 paisa 50 paisa 50 paisa 50 paisa 50 paisa

International Rs 3 Rs 3 Rs 3 Rs 3 Rs 3

Call

Local, Intra-

Circle

Reliance

(RIM, FWP,

fixed line

GSM )

50

paisa/min

Rs 1/ 3

min

50 paisa/min FREE FREE

other mobile 50

paisa/min

Rs 1/ 3

min

50 paisa/min 50

paisa/min

Rs 1/ min

Fixed line 50

paisa/min

Rs 1/ 3

min

50 paisa/min 50

paisa/min

Rs 1/ min

Inter – circle

Reliance

(RIM, FWP,

GSM ,fixed

line)

50

paisa/min

Rs 1/ 3

min

50 paisa/min

FREE

Rs 1/ min

other mobile 50

paisa/min

Rs 1/ 3

min

50 paisa/min Rs 1/ min Rs 1/ min

Fixed line 50

paisa/min

Rs 1/ 3

min

50 paisa/min Rs 1/ min Rs 1/ min

• # On net includes intra circle CDMA (RIM), GSM (smart), FWP (Hello), and Fixed

line.

Popular postpaid plans for data card (Net connect):-

Description Zero

rental

plan

#

Unlimited

plan

Platinum

plan

# Swift

40 +

# Swift

30

Freedom at

night

Plan Available

with

Mobile/

Hello/

Net

connect/

USB

modem

Net connect Net

connect

Mobile/

Hello/

Net

connect/

USB

modem

Mobile/

Hello/

Net

connect/

USB

modem

Mobile/

Hello/ Net

connect/

USB

modem

Monthly charges

(Rs)

NA 799 1500 400 300 400

Data

usage

Peak(06:00

hrs- 22:00

hrs)

60 paisa

/ min

NA NA 40 hours 15 hours 50 paisa/

min

Off peak

(22:00 hrs

– 06:00

hrs)

30 paisa/

min

NA NA 40 hours 30 hours NA

Free data usage in

GB

NA 20

(*unlimited)

Unlimited NA NA 20

(*unlimited)

Additional data

usage

NA Rs 2/MB NA 50

paisa/min

50

paisa/min

50

paisa/min

Free SMS/month NA 100 local

SMS/

month

100 local

SMS/

month

100 local

SMS/

month

100 local

SMS/

month

NA

Note: - 10.50 % of bill will be charged as service tax.

Distribution and channel partners:-

Postpaid connections

Customer

care

DSA (Direct

Sales

Associate)

Retailer Distributors Direct

sales

team

Corporate

sales team

Reliance

web

world

Prepaid connections

Customer

care

Retailer Reliance

web

world

Distributors

Channel and channel partners:-

In Reliance communication limited, Distributor and DSA are the main channel partners. But

apart from it there is another channel partner which is like taking a franchise of reliance and do

the business according to him, there is no involvement of company in sales of the product.

Here distributor is assigned for a territory and has a big

business and then comes DSA who has not a particular territory but he can sale the products in a

particular state.

Manufacturing

State Head office

Zonal office

Distributors

DSA (direct sales associate) Distributor’s sales team Retailer

Consumer

Channel partner

Channel partner

Competitors:-

In Madhya Pradesh & Chhattisgarh region, the competition is very tough. Here there are

following competitors.

• TATA Telecommunication Limited

• Vodafone Essar

• Bharti Airtel

• Idea cellular

• BSNL

• Virgin mobiles

• Aircel (about to launch)

But among all of these following are the main competitors.

• TATA

• Vodafone

• Airtel

• Idea

These 4 telecom players are doing well for a long time. Airtel was the 1st private telecom player

who launched the services for MP&CG region. This is the cause they have got the highest

market share in the market. After that TATA and idea came into the existence and done very

good job. Vodafone has recently launched there services in MP&CG region. With new offers it

has increased lots of customers in a short span of time.

Services provided but the competitors:-

Airtel provides 3 services GSM (prepaid and postpaid), FWP (Postpaid), Broadcom (postpaid).

Airtel

GSM FWP (Fixed

Wire-line

Phone)

Broadcom

Vodafone provides GSM sim cards both in prepaid and postpaid. They do not provide data cards

in MP&CG.

Idea provides GSM and Data-card and both are available in prepaid and postpaid.

TATA Telecommunication Limited is the main and strong competitor for Reliance

Communication Limited because the give customer all the services which we provides. Like:

• They have TATA docomo in GSM, reliance has Smart (now it is merged).

• They have TATA indicom in CDMA, reliance has reliance India mobile.

Vodafone

GSM

Idea

GSM Data card

TATA

GSM Data card FWP (Fixed

Wire-less

Phone)

CDMA

• They provide data cards as TATA photon and reliance provides as Net-connect.

• Both provide FWP (Fixed wireless phone).

In prepaid, now a day every telecom player is providing the same facility. Like, if a customer

buys any new prepaid connection he has option to go with all call @ 1paisa/sec or all call @50

paisa/ min.

But in postpaid there is great competition. That is why, in MP&CG there is a big tariff war.

Tariff comparison:-

(CDMA)

Reliance TATA Reliance TATA Reliance TATA

Plan name Simple 99 149 Rental Simple PPS

199

249 rental Simple

399

modified

399 rental

Rental (Rs) 99 149 199 249 399 399

Free Talk

value

NA NA 15000 sec Rs 200 Rs 399

(L+N)

Rs 300

(L+N)

Free SMS Rs 99 150 NA 250 Rs 399

(L+N)

Rs 399

(L+N)

Outgoing

rates

Local (same

network)

50 paisa/

min

30 paisa/

min

1 paisa/ sec 1 paisa/

sec

50 paisa/

min

30 paisa/

min

Local (other

network)

50 paisa/

min

30 paisa/

min


sec

50 paisa/

min

30 paisa/

min

STD 50 paisa/

min

50 paisa/

min


sec

50 paisa/

min

50 paisa/

min

SMS

Local 50 paisa 50 paisa 50 paisa 50 paisa 50 paisa 50 paisa

National 50 paisa 50 paisa 50 paisa 50 paisa 50 paisa 50 paisa

International Rs 5 Rs 5 Rs 5 Rs 5 Rs 5 Rs 5

• In low rental plans reliance has 99 rental but in TATA rental is 149 but local calls @30p.

• In per sec plan reliance has rental 199 but in TATA rental is 249. Reliance is costly.

• Both provide 399 plans but in TATA local @30p STD@50p, but reliance all call@50p.

GSM:-

Reliance Vodafone Airtel Idea TATA

Plan name Simple PPS 199 Talk local 199 Freedom 249 Seconds 199 NA

Rental (Rs) 199 199 249 199 NA

Free Talk

value

Rs 150

(R-R)

199 mins (Local) 10500 sec

(Local)

15000 sec NA

Free SMS NA NA 150 (Local) 200 NA

Outgoing

rates

Local (same

network)

1 paisa/ sec 50 paisa/ min 1 paisa/ sec 1 paisa/ sec NA

Local (other

network)

1 paisa/ sec 50 paisa/ min 1.2 paisa/ sec 1 paisa/ sec NA

STD (same

network)

1 paisa/ sec Rs 1.50 / min 1 paisa/ sec 1 paisa/ sec NA

STD (same

network)

1 paisa/ sec Rs 1.50 / min 1.2 paisa/ sec 1 paisa/ sec NA

SMS NA

Local 50 paisa 50 paisa 50 paisa 50 paisa NA

National 50 paisa Rs 1 60 paisa 50 paisa NA

International Rs 5 Rs 5 Rs 5 Rs 5 NA

• In per sec plans with GSM, Vodafone is not providing per sec plan in postpaid, but rest of

players provide like reliance provides in 199 rental, Airtel in 249, idea in 199.

• As far as the call rates are concerned, reliance and idea is giving flat all calls @

1paisa/sec, but in Airtel for same network it is 1piasa/sec but for other it is 1.2paisa/sec. it

means in terms of outgoing call rates Airtel is charging more then the rest.

• If we talk about the SMS, all players charge local SMS@ 50 paisa/SMS and international

@ Rs 5/SMS, but for national SMSs reliance and idea provides @ 50p/SMS, Airtel

charge 60p. And Vodafone charge Rs 1/ SMS. Here Vodafone is costly.

Reliance Vodafone Airtel Idea TATA

Plan name Simple 399 Talk double 299 FTV 299 Value 299 NA

Rental (Rs) 399 299 299 299 NA

Free Talk

value

Rs 399

(R-R)

299 mins (V-V

Local)

299 500 min NA

Free SMS 399 299 150 (Local) 200 NA

Outgoing

rates

Local (same

network)

50 paisa/ min 50 paisa/ min 49 paisa/ min 40 paisa/ min NA

Local (other

network)

50 paisa/ min 50 paisa/ min 99 paisa/ min 40 paisa/ min NA

STD (same

network)

50 paisa/ min Rs 1.50 / min Rs 1.50 / min 50 paisa/ min NA

STD (same

network)

50 paisa/ min Rs 1.50 / min Rs 1.50 / min 50 paisa/ min NA

SMS NA

Local 50 paisa 50 paisa 49 paisa 50 paisa NA

National 50 paisa Rs 1 49 paisa 50 paisa NA

International Rs 5 Rs 5 Rs 5 Rs 5 NA

• Customer who wants a per min plans in a cheep rates and having more then 500/- Rs

usage per month for them, Reliance customers can go with 399 rental, but rest of

operators are providing 299 plan.

• In reliance customer gets double of rental, Rs 399 as TV, and 399 for SMS. Same in

Vodafone rental is 299 but benefit is 598. But Airtel and idea you will not get it.

• In Airtel call chargers is so costly compared to rest, so if customer wants all calls @ 50p,

he can have an add-on 35/- Rs/ month and his all call and SMS will be @50p.

• Now if we compare all the players idea is providing the better facilities in the lower rental

of 299. Reliance provides all@50p in 399 rental, but idea charge 40p for local and 50p

for STD. However reliance gives double of rent and idea give benefit of 400 in 299 rent.

Data Card:-

Reliance Reliance TATA Idea Airtel

Plan name Platinum plan Unlimited

799

My unlimited Unlimited Surf 699

Rental 1500 799 799 699 699

Usage Unlimited Unlimited

(20 GB)

Unlimited Unlimited Unlimited

Speed Up to 144 Kbps Up to 144

Kbps

Up to 153

Kbps

Up to 238

Kbps

Up to 256

Kbps

Additional

charges

NA Rs 2/ MB NA NA NA

• The cost of device (data card) is quit equal. (Airtel has not launched data card.)

• In TATA unlimited usage plan the rent is 799. But in idea and Airtel rent is 699, here

reliance is giving so called unlimited plan where limit is 20 GB.

• But if customer wants the unlimited plan then he can go with platinum plan rental is

1500/- Rs per month which is costlier then the rest.

• As far as the speed is concerned Idea is giving speed up to 238 Kbps which is the fastest

then the rest. Where TATA photon gives speed upto 153 Kbps and reliance Net connect

gives 144 Kbps, which is the slowest among the all telecom players.

FWP:-

Reliance TATA Airtel

Plan name Simple 199 149 rental Landline

Rental 199 149 NA

Free usage Rs 149 100 mins (L+N) 2500 mins (Airtel)

Free SMS NA 150 NA

Outgoing rates

Local (same

network)

50 paisa/ min 50 paisa/ min 75 paisa/ min

Local (other

network)

50 paisa/ min 50 paisa/ min 75 paisa/ min

STD (same network) 50 paisa/ min 50 paisa/ min Rs 1/ min

STD (other network) 50 paisa/ min 50 paisa/ min Rs 1/ min

SMS

Local 50 paisa/ min 50 paisa/ min NA

National 50 paisa/ min 50 paisa/ min NA

International Rs 5 Rs 5 NA

• In FWP segment Reliance and TATA has walky talkies but Airtel has wire-line phones.

• Here the device cost is quite equal.

• In this segment it is used for the office purpose, so people prefer low rental plans because

of large no of mobile user. Reliance charges all call and SMS @50p so does the TATA.

But the rental is 199 in Reliance and 149 in TATA.

• In Reliance customer has option to choose numbers like 6 digit number (Like BSNL

land-lines), or 10 digit numbers like mobile phones.

Way to increase market share:-

Market scenario:-

As far as the market share is concerned, Reliance Communication limited is the

second largest consumer based telecom player in the India. Reliance has the largest market share

in term of providing CDMA services. As per TRAI annual report-

Fig. 1 Market Share of Wireless operators (in %) as on 31st March 2009

Fig. 2 Market Share of Wireless operators (in %) as on 31st May 2010

Fig. 3 Subscriber base (In Millions) Market Share of CDMA operators (in %) as on 31st

March 2009

Fig. 4 Subscriber base (In Millions) Market Share of GSM operators (in %) as on 31st

March 2009

As it is earlier mentioned and shown in the annual reports and in the surveys, reliance

communication limited has the second maximum market in the whole country. We are currently

having 17.65% of the whole wireless (GSM+CDMA) market in India. And in CDMA reliance

has 55.71% and among all the GSM service providers Reliance has 6.73% of market share in

India. Among the CDMA providers it is the leading telecom company having 52.65 million of

customers across the country. And we have 20.02 millions GSM customers.

If we talk about the whole Indian telecommunication industry, the total number of

wireless (GSM+CDMA) subscribers has reached to 611 millions.

Reliance in last few years:-

Since Reliance had launched in 2002, it is seen ups and downs every years. Either it is

because of external or internal factors. In the starting it went down because at the time they have

started their business with the postpaid connection and there were no credit limit factor so they

couldn’t handle the market but after two three years they have overcame. Now in the whole

country there are 23 circles, in which reliance communication limited is operation in 21 circles

(Andhra Pradesh, Bihar, Chennai, Delhi, Gujarat, Haryana, Himachal Pradesh, Jammu &

Kashmir, Karnataka, Kerala, Kolkata, Madhya Pradesh, Maharashtra, Mumbai, Orissa, Punjab,

Rajasthan, Tamil Nadu, UP (E), UP (W) and West Bengal). In the beginning, Reliance has

focused more on CDMA operators and started their business as Reliance India Mobile (RIM) in

most of the circles, and for GSM they had Reliance Telecom Limited (RTL), which had its

operations in 8 circles (Assam, Bihar & Jharkhand, Calcutta, Himachal Pradesh, Madhya

Pradesh & Chhattisgarh, North east, Orissa, West Bengal), afterward they have launched their

GSM services in the rest of 13 circles. This is the main cause that in GSM service providing they

are on no. 5 among the rest.

In the last 5 years, the market share of Reliance is changing per year.

Market share of reliance in last 5 years

If we see to it then it is very easy to understand that on year 2005-06, Reliance has 19.21% of the

market share, however it ranked 3ed in that year, but in 2006-07 its market dipped to 16.96%. In

the year 2007-08 the company putted affords to make the market share up and it worked, they

captured 17.54 % of the market, along with the Reliance became India’s second highest

consumer based company and the same happened in the 2008-09 and share went up to 18.55 %

of the Indian wireless subscription. But in 2009-2010 its market share is decreased and now has

17.65 % of market share.

Now as far as the growth is concerned, reliance had growth of 65.65% in 2005-06

financial year, then in 2006-07 they had growth of 61.81%, in 2007-08 it was 63.51%, and in

2008-09 reliance had growth of 55.84%.

Reliance Communication is now focusing more on Value Added Services (VAS) then the

core products. Now they are more focusing to giving new and the best services (VAS) to the

customer like SMS, MMS, caller-tunes, alerts (cricket, football, missed call, jokes etc). If we talk

about the core products, they are more focused on selling maximum numbers of the Data-cards.

Because if a customer go with a data card, he has to buy the device which means customer is

willing to use the product for a long time it makes a fixed and certain amount which company

will get every month.

`In postpaid company is focusing to the maximum of the sales through the DSA’s (Direct

Sales Associates) and PTR (Post Through Retailer) every postpaid location. The numbers of the

DSA’s are decided according to the area.

DSA of Reliance Communication:-

As it is known that Direct Sales Agency/Associates is a

very important part for any business. But if we talk about the Reliance communication, here in

postpaid DSA’s are vary helpful for business.

The person who is already in the direct sales can be the

channel partner of reliance. And I was supposed to find this kind of firms. Like the person who

has any FMCG companies agency, owner of cyber café, computer hardware shops, mobile store

owner etc.

A DSA is authorized to deal in following services to sell:-

Direct Sales Associate

GSM

(Connections)

Mobiles

phones

CDMA

(Connections)

FWP

(Hello)

Data card

(Net connect)

Prepaid to

Postpaid

migration

Investment of DSA:-

To be a DSA, a firm needs following:-

1) D.D. of 50,000/- Rs as security deposit

2) TIN no of Firm

3) Registration no. of shop

4) Rent agreement of shop

5) PAN card of Firm’s owner

6) 2 passport size photo

7) Bank current account

8) 1 canceled check

9) 3 stamp paper, each of Rs 100/-

10) Address Proof

Some more things can be counted as investment which is not mandatory but very important, like

some items for the selves of the shop like:-

Mobiles phones worth Rs 10,000/-

Data cards worth Rs 10,000/-

FWP worth Rs 5,000/-

Overall if we calculate the initial investment, it would be around 1, 00,000/- Rs. Where 50,000/-

Rs is refundable.

Process of rolling out a new DSA:-

After the submission of all the documents (above mentioned), with in 7 days he can start

his business in his area.

After the submission of the documents, POS code is generated with in 3 days

simultaneously CRT code is generated in 5 days. And finally SAP code is generated in 7 days.

After generation of SAP code DSA can begin his business in defined area. Basically SAP code is

used for billing.

Return On Investment (ROI):-

Now as far as the ROI is concerned, the investment is very low but

the return will be good if DSA just achieve his target.

Here the DSA has a flat target of 75 postpaid connections per month. Where he has the option to

sell:-

1) GSM SIM Cards [Known as SMART Mobile]

2) CDMA SIM Cards [Known as RIM (Reliance India Mobile)]

3) Data Cards [Known as Net-connect]

4) FWP (Walky Talky) [Known as Hello]

5) Prepaid to Postpaid Migration

If he sells any one of them then 1 connection will count.

Now as far as the commission is concerned the DSA gets the same

in 3 installments (For GSM and CDMA):-

Base

commission

Target based

incentive (75)

3ed Bill

incentive

Total

With Entry Cost 500/- 150/- 100/- 750/-

Without entry cost

400/- 150/- 100/- 650/-

Entry Cost:-

For a postpaid connection customer gives following:-

1) 250/- Rs as security deposit (refundable)

2) Activation charges:- Rs 100 for GSM, Rs 200 for CDMA & Data card, Rs 200 for Data

card, Rs 50 for FWP.

These 450/-, 350/- Rs (security deposit + activation charges) which customer pays is Entry Cost.

3) I.D proof.

4) Address Proof.

5) 1 passport size photo.

For A Data card DSA gets flat 400/- Rs.

For A prepaid to postpaid migration he gets flat 450/-Rs.

For A new connection who takes simple 99 plan he gets flat 400/- Rs.

Now If he just achieve the target he gets maximally.

75 × 750 = 56250/- per month

Let’s take 55,000/ month in round figure.

Expenses:-

Salary of 4 sales executive (4×2,500/-Rs) 10,000/- Rs

Convene of executive (4×2,500/-Rs) 10,000/- Rs

Shop rent 5,000/- Rs

Electricity bill + other expenses 5,000/- Rs

3ed Bill liability 5,000/- Rs

Total expenses 35,000/- Rs

Total income – Total expenses = Total profit

55,000 – 35,000 = 20,000/- Rs per month

So the conclusion is that he is investing just Rs. 1,00,000/- [where 50k is refundable] and he

earns 20,000/- per month. It means with in 21/2 months he’ll take out his invested money.

3ed

Bill liability:-

DSA has a 3ed bill liability on every connection. It means, DSA is responsible for

submission of 3ed bill of the customer. He has to find the customers who at least pay first 3 bills.

And if a customer doesn’t pay, reliance charge 100% claw back on the connection. It means he

will be charged 100 % of his commission in the next month.

Time duration of payments of commission:-

The payment is made in 3 installments but now it is made in 2 installments. In 1st

installment, Base commission and Target Based Incentive are paid. And 2ed installment (3ed bill

incentive) is paid according to the payments of 3ed bill of customers. 1st installment of

commission is paid with in the 45 days (on an average). Like if the payment of 1 month (01-

june-2010 to 30-june-2010) is to make and on of July 1, 2010 he submit his bill in the company

then he’ll get his 1st installments on of July 7, 2010 (if the bill is of > 1,00,000/- INR), or on July

14, 2010 or on July 21, 2010 (if the bill is of < 1,00,000/- INR).

There is another way to increase Direct Sales of postpaid through PTR.

PTR (Post Through Retailer):-

PTR (Post Through Retailer) is an important and easiest way to make a new postpaid

connection. It is very convenient way of migration of prepaid to postpaid connections. In the

PTR, retailer migrate prepaid connection to the postpaid connections. It talks minimum afford to

convince the customer for postpaid migration because he/she might be his regular customer.

It is not very difficult work to convince the retailer for PTR. Because they do their

business on the basis of commission on recharge vouchers and selling new prepaid sim cards

(most of the case).

While doing the PTR, a retailer gets 250/- for each connection and he can earn a margin

of 50/- Rs on every sim card. It means he will get 300/- Rs on every migration.

A retailer gets just 3% on a simple recharge. It means if he is doing a recharge of Rs 100

then he’ll get just Rs 3. If on an average a layman spend Rs 300 on mobile. It means a layman

who spends 300 Rs on mobile recharge in a month and is a permanent customer of that particular

retailer then retailer is earning just Rs 9 in month.

A retailer can be convinced by saying that we are providing you the commission of more

then 30 months if u does a single migration. Like you are getting 9/- Rs in a month from one

customer and now we’ll give you 300/- Rs for an each pre to post migration. And you can

calculate the earning 9/- Rs from one customer in month. How much time you will take to get

300/- Rs? More then 30 months! And it is very difficult that a single customer will come to you

for next 30 months and buy a 300/- Rs recharge per month for the same mobile number.

Retailers are also liable for the 3ed bill payment. They are also liable for 100% claw back.

Retailers must take following by every customer:-

1) 250/- Rs. As security deposit

2) Activation chargers 200/-Rs for CDMA, 100/- Rs for GSM.

3) 1 photo passport size

4) Address proof

5) Photo proof

The service of postpaid connection will start with in 48 hrs. After visiting the AV/CV team. Who

verify the address of customer and decide the credit limit of customer.

Reliance and 3G:-

Recently, Reliance Communication Limited has bid for the new 3G spectrum in India.

Among all the circles, Reliance Communication Limited had successfully get the license for 13

circles. They acquired it in 8584.78cr INR.

As per the TRAI and DoT norms, the Reliance will be able to provide its 3G based services from

1 September 2010.

The spectrum of following circles is bought in:-

• Delhi & NCR at Rs 3316.93 cr

• Mumbai: at Rs.3247.07 cr

• Punjab: at Rs.322.01 cr

• Kolkata: at Rs.544.26 cr

• Madhya Pradesh & Chhattisgarh: at Rs.258.4 cr

• Bihar & Jharkhand : at Rs.203.46 cr

• Rajasthan: at Rs.321 cr

• Orissa : at Rs.96.98 cr

• West Bengal: at Rs.123.36 cr

• Himachal Pradesh: at Rs.37.23 cr.

• Jammu & Kashmir : at Rs.30.30 cr

• Assam: at Rs.41.48 cr

• North East: Aircel, Bharti, Reliance at Rs.42.30 cr

Reliance communication and Bharti Airtel has bought license for maximum circles. There will

be a cut throat competition in next some months. Because BSNL and MTNL have already

launched the 3G services in more then 480 cities across the country. The pricing of the services

(like video calling, high speed data transfer through mobile etc) will be the toughest work. BSNL

and MTNL have already providing the services in very low prices. For example, BSNL is

providing the video calls @ 30p/min, which is very cheep according to the current marker

scenario. Reliance and rest of the companies have paid a huge amount to the govt. of India

(approx .seventy thousand crore). So this will be a great challenge for the marketers.

Findings:-

SWOT analysis

Strength

• Commission Structure

• Provides both GSM & CDMA

• Fast Activation Process

• Network

• Connectivity

• Data GPRS

Weakness

• Branding Image

• Distribution problem

• Limited product portfolio

• Lack of Competitive Strength

Opportunity

• Preference of GSM over CDMA

• Rural Telephony

• New 3G market in maximum

circles

• New Specialist Application

Threat

• Political destabilization.

• New Entrants

• IT Development

• Market Demand

Problem being faced:-

• Retailers are not motivated to sale the postpaid connections because of less sales

promotions of postpaid in comparison of prepaid.

• Lack of communication between retailers and the distributors or direct sales team.

• Customers are afraid of buying postpaid connection because of wrong billing.

• The commission of DSA’s is very less and just for one time, this is the cause the firms

are not motivated to be channel partner of reliance.

• Retailers are not aware of tariff plans of reliance.

• Distribution is not proper.

• Price of some services is more costlier then other players and the benefits are not

according to the high price. (like in data card 1500/- per month unlimited plan but the

speed is just 144 Kbps, where other players provides better speed in just Rs 700 to 800)

• Retailer doesn’t get claim at proper time (in case of prepaid)

• Penalty charges are so high. Like 100% claw back in 3ed bill case.

• Lesser focus on postpaid then prepaid by the distributors.\

• Lack of sales promotions and advertisements of postpaid.

Recommendations:-

• Retailer Satisfaction:-

Reliance should focus on retailer satisfaction, because the person who directly

interact with the customers. And their satisfaction will motivate them, and they will

suggest reliance to the customers. This can be done by proving them claims/commissions

on time

• Increase in Sale:-

Increase in sales can be better option for capturing the maximum market. This can

weather be done by DSA’s, PTR or by direct sales or corporate sales team.

• Sales Promotion:-

Sales promotion and advertisements of postpaid plan can be seen hardly in the

streets, on the retailers desks. It should be increased so that can make good a better

market for postpaid too.

• Proper Distribution Channel:-

The distribution of the product like sim cards, recharge vouchers are not proper. It

should be proper. The customer should get the product at the time of delivery at same

place he/she wants to.

• Customer Satisfaction:-

Reliance communication

Limited should focus more on the customer satisfaction. By providing them the best

services in the cheep rates. And the problem faced by the customer should be resolved as

soon as possible.

Conclusion:-

Indian economy is an emerging one and is growing very fast at the average GDP rate 8-

9% so in this emerging market competition level among telecommunication services provides

new players are coming who will necessarily intensify the competition. New products and new

schemes are being offered by the telecom service providers. The need for large information

capacity has grown tremendously due to the demand of real time information.

Telecommunication has now become a major information transmission system and telecom has

undoubtedly emerged as the most important industry in India. Indian telecom companies are

putting in their best offer to rope in major telecom operators of the world e.g. Vodafone, Aircel

and MTN etc. are playing their role in synergy with the operation of the Indian companies.

Process of acquisition and merger are in process and future will be only for those companies who

have an edge over others in the field. Service provided and the better quality of network etc. is

provided at affordable cost. In this process of competition it is assumed that only those

companies will survive who adopt suitable market strategy and technology innovation and up

gradation to suit the aspiration and demand of the consumer.

Reliance Communication Limited is the one of the oldest service provider in the Indian

telecom industry. They are providing the best services to customers in the cheep rates. The

management of company is very good to work. Employees are motivated to work. The company

is looking forward for the new 3G market. Creating new strategy for the new market would be

helpful to increase the market share. The IRMS can be increased by doing some amendments by

the employees in the field but not by making some new changes in the policies. Some new tariff

plan should be launched because all the companies are giving the plans in very cheep rates. They

also believe in customer satisfaction but now they should focus more on it. In this market

scenario, the competition is very tough, if they want to get more success they need to be hungry.

Bibliography:-

2005-06 annual report of TRAI




Web:-

www.rcom.co.in

www.bradbandindia.org

www.dot.gov.in

www.trai.gov.in

Reliance Communication Internship Report by Vikas Dubey

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