IDEA Cellular

Project on

IDEA CELLULAR
MARKETING STRATEGY

IDEA Cellular

A Project Report On

A Study Of Consumer Durable Marketing Strategy For

"Idea Cellular" With Special References to Sanjeev Bhardwaj Under The Guidance Of Prof. Sanjeev Bhardwaj Submitted To Sanjeev Bhardwaj University Of C.C.S Univ. Roll No.- 9174526 Submitted By Ruchi Goel

IDEA Cellular

STUDENT DECLARATION

IDEA Cellular

I hereby declare that this project report titled The Study of Consumer Durable Market with Special Reference to PSN District in Idea Cellular is executed as per the course requirement for the post graduate program in management. I have not been submitted by me or any other person to any other university or institution for degree or diploma. Its my own work.

Ruchi Goel

IDEA Cellular

ACKNOWLEDGEMENT

IDEA Cellular

I express my sincere gratitude to my industry guide channel development manager of Tata Communication Ltd, for his able guidance, continuous support and cooperation throughout my project, without which the present work would not have been possible. I would also like to thank the entire team of Idea Cellular, for the constant support and help in the successful completion of my project. Also, I am thankful to my faculty guide Sanjeev Bhardwaj of my institute, for his/her continued guidance and invaluable

encouragement.

IDEA Cellular

EXECUTIVE SUMMERY

IDEA Cellular

IDEA Cellular is a leading GSM mobile services operator in India with over 53 million subscribers, under brand IDEA. IDEA Cellular is a publicly listed company, having listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) in March2007. A frontrunner in introducing revolutionary tariff plans, IDEA Cellular has the distinction of offering the most customer friendly and competitive Pre Paid offerings, for the first time in India. Ideas missionWe will delight our customers while meeting their individual communication needs anytime, anywhere. Ideas mission tells us what they are and what they are doing at the present. Their values are Integrity, commitment, passion, seamlessness and speed are imperfect. Their values are in perfect sync with their mission because these values are of paramount importance for the successful achievement of their mission. Ideas SWOT shows us that their parent company (Aditya Birla), existing footprint and that obsession for innovation are their major strengths while their concentration on a few circles, their late entry into many new circles and high debt-equity ratio can be cited as their weaknesses. Falling regulations, growing rural market and 3G services are the factors that bring new opportunities for Idea. New entrants (ever increasing number of

IDEA Cellular
telecom operators in India) and new technology (can be an opportunity as well) pose threats for Idea. External environment analysis shows that competitive rivalry is very high, bargaining power of customers is high, bargaining power of suppliers is low, threat from new entrants and substitutes are also high. This clearly reveals the fact that Idea is in an extremely competitiveenvironment. E.g. the ongoing tariff war in the highly competitive Indian telecom market has been taking new shape with every passing day and it has reached new heights now. Operators have been announcing new promotional schemes including reduction in tariffs for voice call, slashing roaming charges and many more such lucrative offers. Recently floated idea of per second call rates has further aggravated competition among telecom players with every operator seemingly imitating others for retaining their market share. Telecom sector is all set to see more severe competition. New entrants, falling tariff rates, new technology and new regulations (mobile number portability) are going to cause big changes to this sector. In such a situation the way forward for a player like Idea, who is not the market leader, is not to initiate a price war but to concentrate on new differentiated products and services. They have come out with many firsts in India and that is what Idea is remembered for.

IDEA Cellular

INTRODUCTION

IDEA Cellular is a publicly listed company, having listed on the Bombay Stock Exchange (BSE and the National Stock Exchange (NSE) in March 2007.Idea Cellular is a leading GSM mobile service operator with pan India licenses. With a customer base of over 36 million in 15 service areas, operations are soon expected to start in Orissa and Tamil Nadu-the first steps in providing pan India services covering over 90% of India's telephony potential. A frontrunner in introducing revolutionary tariff plans, IDEA Cellular has the distinction of offering the most customer friendly and competitive Pre Paid offerings, for the first time in India in an increasingly segmented market. Customer Service and Innovation are the drivers of this Cellular Brand. A brand known for many firsts, Idea was the first to launch GPRS and EDGE in the country.

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

IDEA Cellular
won the GSM Association Award for "Best Billing and Customer Care Solution" for 2 consecutive years. IDEA Cellular is part of the Aditya Birla Group, India's first truly multinational corporation. The group operates in 25 countries, and is anchored by over 100,000 employees belonging to 25 nationalities. The Group has been adjudged 'The Best Employer in India and among the Top 20 in Asia' by the Hewitt-Economic Times and Wall Street Journal Study 2007. Idea Cellular (Idea) is one of the leading providers of wireless communication services in India. The company is part of the Aditya Birla Group. It provides wireless and long distance voice and internet services to consumer and enterprise markets. IDEA Cellular is a publicly listed company, having listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange(NSE) in March 2007.IDEA Cellular is a leading GSM mobile services operator in India with over 53 million subscribers, under brand IDEA. It is a pan India integrated GSM operator covering the entire telephony landscape of the country. The company also has a presence in telecom infrastructure market through a stake in Indus Towers and other subsidiaries. The company primarily operates in India. It is headquartered in Mumbai, India. The company recorded revenues of INR101, 484.1 million ($2,214.4 million) during the financial year ended March 2009 (FY2009), an increase of 50.6% over 2008. The operating profit of the company was INR14, 314.3 million($312.3 million) in FY2009, an increase of 2.8% over 2008. Its net profit was INR9, 008.7 million($196.6 million) in FY2009, a decrease of 13.6% over 2008.A frontrunner in introducing revolutionary tariff plans, IDEA Cellular has the distinction of offering the most customer friendly and competitive Pre Paid offerings, for the first time in India. Mission- We will delight our customers while meeting their individual communication needs anytime, anywhere.With a mission of delighting its customers while meeting their individual communication needsanytime, anywhere, IDEA offers

IDEA Cellular
seamless coverage to roaming customers traveling to any partof the country, as well as to international traveling customers across over 200 countries. IDEA Cellular has partnership with over 400 operators to ensure that customers are always connected while on the move, within the country or other parts of the world.

ABOUT US
IDEA Cellular IDEA Cellular is a publicly listed company, having listed on BSE & NSE in March 2007. It is the 3rd largest mobile services operator in India with wireless revenue market share at 15 % in Q1 FY 2013, and subscriber base of

over 117 million. Idea has consistently

stayed ahead of the industry in VLR

reporting, and has the 3rd highest base of active subscribers.

Idea is a pan-India integrated GSM

operator and has its own NLD and ILD operations, and ISP license.

IDEA Cellular
With traffic in excess of a billion minutes a day, Idea ranks among the Top 10 country operators in the world. Idea operates across all 22 service areas with 2G services and 3G services spread in over 3,000 towns and 10,000 villages. Idea has a network of over 97,000 2G and 3G cell sites covering the entire length and breadth of the country. Idea has nearly 4,000 Service Centres servicing Idea subscribers across the country, including over 650 special Experience Zones for 3G promotion. Ideas service delivery platform is ISO 9001:2008 certified, making it the only operator in the country to have this standard certification for all 22 service areas and the corporate office. Ideas thought leadership on Mobile Number Portability (MNP) has enabled it to stay as the top gainer with highest net gain, with over 3.7 million mobile users preferring Idea network. Ideas strong growth in the Indian telephony market comes from its deep penetration in non-urban & rural markets. It has the highest share of rural subscribers as a percentage of total subscribers, amongst other GSM players. In fact, 2 out of every 3 new Idea subscribers come from rural/ semi-urban India. Idea won the Best Brand Campaign at the esteemed World Communication Awards 2011. It also recently won 3 Awards at the ET Telecom Awards 2012, in the following categories Customer Experience Enhancement, Excellence in Marketing and Innovative products, respectively. It is also the winner of The Emerging Company of the Year Award at The Economic Times Corporate Excellence Awards 2009. IDEA Cellular also received the prestigious Avaya GlobalConnect Award for being the Most Customer Responsive Company in the Telecom sector in the year 2010. The company has received several other national and international recognitions for its path-breaking innovations in mobile telephony products & services. It won the GSM Association Award for Best Billing and Customer Care Solution for 2 consecutive years. It was awarded Mobile

IDEA Cellular
Operator of the Year Award India for 2007 and 2008 at the Annual Asian Mobile News Awards. IDEA Cellular is an Aditya Birla Group Company, Indias first truly multinational corporation. The group operates in 33 countries, and is anchored by more than 132,000 employees belonging to 42 nationalities.

IDEA Cellular

COMPANY PROFILE

IDEA Cellular Ltd is a leading GSM mobile services operator in India with over 72 million subscribers, under brand IDEA. The company is a pan India integrated GSM operator covering the entire telephony landscape of the country, and has NLD and ILD operations. They offer affordable and world-class mobile services to varied segments of mobile users. The company is an Aditya Birla Group Company. They offers basic voice and short message service (SMS) services to high-end value added and general packet radio service (GPRS) services, such as Blackberry, Datacard, Mobile TV and Games. Their subsidiaries include Swinder Singh Satara and Co Ltd, Aditya Birla Telecom Ltd, Idea Cellular Services Ltd, Idea Cellular Infrastructure Services Ltd, Idea Cellular Towers Infrastructure Ltd and Carlos Towers Ltd. IDEA Cellular Ltd was incorporated in the year 1995 with the

IDEA Cellular
name Birla Communications Ltd. The company obtained licenses for providing GSM-based services in the Gujarat and Maharashtra Circles following the original GSM license bidding process. In the year 1996, the company changed the name from Birla Communication Ltd to Birla AT&T Communications Ltd following joint venture between Grasim Industries and AT&T Corporation. In the year 1997, they commenced operations in the Gujarat and Maharashtra Circles. In the year 2000, the company merged with Tata Cellular Ltd, thereby acquired original license for the Andhra Pradesh Circle. In the year 2001, they acquired the RPG Cellular Ltd and consequently, they acquired the license for the Madhya Pradesh (including Chattisgarh) Circle. Also, they obtained the license for providing GSM-based services in the Delhi Circle following the fourth operator GSM license bidding process. The name of the company was changed from Birla Communications Ltd to Birla Tata AT&T Ltd. In the year 2002, the name of the company was further changed to Idea Cellular Ltd and also, they launched the 'Idea' brand name. They commenced commercial operation in Delhi circle. In June 3, 2002, they acquired Swinder Singh Satara & Company Ltd through a share purchase agreement. In the year 2004, the company acquired Escotel Mobile Communications Ltd (subsequently renamed as Idea Mobile Communications Limited). They

commercially launched EDGE services 2005 and became the first operator in India to do so. In the year 2005, the company won an Award for the 'Bill Flash' service at GSM Association Awards in Barcelona, Spain. They sponsored the International Indian Film Academy Awards. In the year 2006, the company became a part of the Aditya Birla Group subsequent to the TATA Group transferring their entire shareholding in the company to the Aditya Birla Group. They received Letter of Intent from the DoT for a new UAS License for the Mumbai Circle. Also, they received Letter of Intent from the DoT for a new UAS License for the Bihar Circle through Aditya Birla Telecom Ltd. During the year 2006-07, the company commenced National Long Distance service to carry part of the Company's own

IDEA Cellular
traffic. They launched commercial mobile services in the service areas of Rajasthan, Uttar Pradesh (East) and Himachal Pradesh. They made Initial Public Offering and raised Rs 25,000 million. They won an award for the 'CARE' service in the 'Best Billing or Customer Care Solution' at the GSM Association Awards in Barcelona, Spain. During the year, the company entered into a ten years business transformation pact to integrate, innovate, and transform its business processes and IT infrastructure with International Business Machines (IBM). They signed USD 500 million contract with Nokia Siemens Networks to expand and strengthen the Company's network. Also, they singed a USD 343 million contract for GSM expansion with Ericsson in the Maharashtra, Gujarat, Rajasthan, Madhya Pradesh and Himachal Pradesh service areas. In June 2006, Escorts Telecommunications Ltd became the subsidiary of the company and subsequently was renamed as Idea Telecommunications Ltd. In February 2007, they acquired 10,000,000 equity shares of Rs. 10 each of Aditya Birla Telecom Ltd, a company holding License to operate in the telecom service area of Bihar, for a purchase consideration of Rs 100 million. During the year 200708, the company expanded their network from 4432 cities and towns to 13308 cities and towns. They formed three new subsidiaries namely, Idea Cellular Services Ltd, Idea Cellular Infrastructure Services Ltd and Idea Cellular Tower Infrastructure Ltd. The main purpose of Idea Cellular Services Ltd is to provide manpower services to Idea Cellular and Idea Cellular Infrastructure Services Ltd & Idea Cellular Tower Infrastructure Ltd are meant for hiving off Idea's passive infrastructure network. In December 2007, the company in association with Bharti Airtel and Vodafone Essar formed a joint venture, namely Indus Tower to provide passive infrastructure services in India to all operators on a non discretionary basis. In February 2008, the company received the Unified Access Services Licences for the telecom service areas of Punjab, Karnataka, Tamilnadu including Chennai, North East, West Bengal, Kolkatta, Jammu & Kashmir, Orissa and Assam. During the year 2008-09, the company acquired 40.8% stake in Spice Communications Ltd (Spice), having

IDEA Cellular
operations in Punjab and Karnataka service areas, from MCorp Global Communications Pvt Ltd, the erstwhile promoters of Spice. They launched services in Mumbai, Orissa, Tamil Nadu (including Chennai), Jammu & Kashmir, Kolkata and West Bengal. In addition, Aditya Birla Telecom Ltd, a wholly owned subsidiary, launched operations in Bihar (including Jharkhand) service area. During the year, the company made a tie-up with Indian Oil Corporation, the largest petroleum company in India, to use their petrol pumps and gas agencies for branding and distribution of Idea SIM Cards and Recharge Vouchers. They were the first operator in India to launch Nokia Life Tools in association with Nokia. They launched 'International Airtime Transfer', a unique VAS service, whereby NRI community can directly recharge the prepaid mobiles of Idea subscribers in India through several international merchants and the web in Gulf, the USA and UK. During the year, the company launched NetSetter Data Cards and Blackberry solutions to cater to their data-savy consumer segments. As per the scheme of arrangement, the company de-merged their passive infrastructure assets in the service areas of Andhra Pradesh, Delhi, Gujarat, Uttar Pradesh (both East & West including Uttarakhand), Haryana, Kerala, Rajasthan and Mumbai to Idea Cellular Towers Infrastructure Ltd, a wholly owned subsidiary, with an appointed date of January 1, 2009. During the year 2009-10, the company expanded their pan-India presence through service launches in Orissa, Tamil Nadu, Jammu & Kashmir, Kolkata, West Bengal, Assam and North East service areas, thereby making it a nationwide service provider. As one of Idea's new VAS activities, the company launched 'Buddy Recharge' - a unique peer-to-peer talk time transfer product. They also launched Oongli Cricket during the IPL season. During the year, the company launched a standardized self care portal 'CARE' which gives information to the customer on products / tariffs and information of their account such as billed amount, last recharge, last calls, unbilled amount, etc. They were the first operator to launch 'Pre Tones', which is an innovative VAS service which allows the user to

IDEA Cellular
listen to the caller tones of his / her own choice while making an outgoing call instead of listening to the respondent's caller tone. As per the scheme of arrangement, the company telecom operations of the Bihar service area along with certain assets and liabilities of Aditya Birla Telecom Ltd, a wholly owned subsidiary was de-merged and transferred to the company with effect from March 1, 2010. Spice Communications Ltd which had operations in the Punjab and Karnataka service areas, and licenses for National and International Long Distance operations was amalgamated with the company with effect from March 1, 2010. Also, Carlos Towers Ltd became a subsidiary company pursuant to the amalgamation of Spice Communications Ltd with the company. In April 2010, the company received a License for providing pan Internet Services (ISP License). In the Spectrum auction, the company emerged as a winner in 11 Service Areas viz. Maharashtra, Gujarat, Andhra Pradesh, Kerala, Punjab, Haryana, Uttar Pradesh (E), Uttar Pradesh (W), Madhya Pradesh, Himachal Pradesh and Jammu & Kashmir, at a total cost of Rs 5,768.59 crore. During the year under review, the company became a pan India operator following the roll out of services in the remaining service areas of Orissa, Tamilnadu (including Chennai), Jammu & Kashmir, West Bengal, Kolkata, North East and Assam. In January 20, 3G India

IDEA Cellular
2011, the Company launched mobile number portability (MNP), an invite to all Indian mobile customers to change their wireless operator, while retaining their mobile number. In March, 2011 Company launched 3G services in 9 out of these 11 service areas. The Company also entered into bilateral roaming arrangement for the service areas of Mumbai, Bihar, Karnataka, Delhi, Kolkata and Tamil Nadu (including Chennai), with leading quality operators, enabling it to offer 3G services in 15 service areas. The company is in the process of launching 3G services in Jammu and Kashmir service area. The 3G spectrum for Punjab service area has not been earmarked by DoT to the Company for commercial usage as yet, and hence Company has not been able to launch 3G service there until now. The company is now installing 3G cell sites to capture the future wireless broadband data market.

IDEA Cellular

HISTORY
COMPANY HISTORY - IDEA CELLULAR LTD.

IDEA Cellular

We were incorporated as Birla Communications Limited on March 14, 1995 and granted a certificate of commencement of business on August 11, 1995. Our registered office was in Mumbai, Maharashtra. Our name was changed to Birla AT&T Communications Limited on May 30, 1996 following the execution of a joint venture agreement dated December 5, 1995 between AT&T Corporation and Grasim Industries Limited pursuant to which the Aditya Birla Group held 51% of our Equity Share capital and AWS Group held 49% of our Equity Share capital. Our registered office was transferred from Industry House, 1st Floor, 159 Church Gate Reclamation, Mumbai 400 020, Maharashtra to Suman Tower, Plot No. 18, Sector 11, Gandhinagar 382011 Gujarat on October 22, 1996. With effect from January 1, 2001 following our merger with Tata Cellular Limited the joint venture agreement between AT&T Corporation and Grasim Industries Limited dated December 5, 1995 was replaced by a shareholders agreement dated December 15, 2000 entered into between Grasim Industries Limited on behalf of the Aditya Birla Group, Tata Industries Limited on

IDEA Cellular
behalf of the Tata Group and AT&T Wireless Services Inc. on behalf of the AWS Group following which our name was changed to Birla Tata AT&T Limited on November 6, 2001. Consequent to the introduction of the Idea brand, our name was changed to Idea Cellular Limited on May 1, 2002. The AWS Group exited from the Company on September 28, 2005 by selling 371,780,740 Equity Shares of the Company, which constituted 50% of the holding of AT&T Cellular Private Limited in our equity share capital, to ABNL and by transferring the remaining 371,780,750 Equity Shares to Tata Industries Limited. The Tata Group ceased to be a shareholder of the Company on June 20, 2006 when Tata Industries Limited and Apex Investments (Mauritius) Holding Private Limited (formerly known as AT&T Cellular Private Limited) sold all their shares in the Company to the Aditya Birla Group.

On October 26, 2006, P5 Asia Investments (Mauritius) Limited (P5 Asia) acquired 14.60% of our Equity Share capital. Under a Governance and Exit Rights Agreement dated October 23, 2006 between P5 Asia, ABNL and Birla TMT, so long as an initial public offering has not occurred and P5 Asia holds no less than 10% of our Equity Shares, ABNL and Birla TMT are required to procure that (a) our Company and its Subsidiaries shall not take or pursue any of the following actions without P5 Asias prior consent (such consent to be obtained in a board and/or shareholders resolution) including in respect of (i) any merger with, acquisition of, or amalgamation or consolidation with another company or business; (ii) assuming or permitting to exist any borrowings or indebtedness in the nature of borrowings if the amount of all such borrowings of our Company and its Subsidiaries would exceed Rs. 6,800 million; (iii) entering into a new line of business; (iv) increasing our authorized or issued share capital; or (v) entering into a joint venture and (b) our Company makes available to P5 Asia certain financial information relating to our Company and its Subsidiaries such as monthly management accounts, quarterly unconsolidated balance sheet and profit and loss account and the annual audited consolidated balance sheets and profit

IDEA Cellular
and loss accounts.

P5 Asia also has a right to appoint one director to our Board so long as it holds at least 10% of our total issued and outstanding Equity Shares. Mr. Biswajit Subramanian has been appointed to our Board by P5 Asia pursuant to the exercise of the above right. In addition, any IPO of our Equity Shares requires P5 Asias written consent, and, further, in any such IPO, P5 Asia has the right to offer for sale such number of Equity Shares representing up to 10% of the total Equity Shares which are held by it. By its letters dated December 2, 2006 to ABNL and Birla TMT, P5 Asia has given its written consent for the Issue and has confirmed that it does not intend to offer for sale any of the Equity Shares held by it in such Issue.

We, either directly or through our Subsidiaries, provide mobile services in the Andhra Pradesh, Delhi, Gujarat, Haryana, Kerala, Madhiya Pradesh, Maharashtra and Uttar Pradesh (West) Circles, and have recently launched services and as such are in the process of fully rolling-out our network in the Uttar Pradesh (East), Rajasthan and Himachal Pradesh Circles pursuant to licenses issued by the DoT.

IDEA Cellular

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

1995: Incorporated as Birla Communications Limited Obtained licenses for providing GSM-based services in the Gujarat and Maharashtra Circles following the original GSM license bidding process 1996: Changed name to Birla AT&T Communications Limited following joint venture between Grasim Industries and AT&T Corporation 1997: Commenced operations in the Gujarat and Maharashtra Circles

1999: Migrated to revenues share license fee regime under New Telecommunications Policy (NTP)

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

IDEA Cellular
2001: Acquired RPG Cellular Limited and consequently the license for the Madhya Pradesh (including Chattisgarh) Circle Changed name to Birla Tata AT&T Limited

2001: Obtained license for providing GSM-based services in the Delhi Circle following the fourth operator GSM license bidding process 2002: Changed name to Idea Cellular Limited and launched Idea brand name . Commenced commercial operations in Delhi Circle . Reached the one million subscriber mark

2003:

Reached

the

two

million

subscriber

mark

2004: Completed debt restructuring for the then existing debt facilities and additional funding for the Delhi Circle. Acquired Escotel Mobile Communications Limited (subsequently renamed as Idea Mobile Communications Limited) Reached the four million subscriber mark First operator in India to commercially launch EDGE services

2005: -Reached the five million subscriber mark -Turned profit positive -Won an award for the Bill Flash service at the GSM Association Awards in Barcelona, Spain Sponsored the International Indian Film Academy Awards -Sponsored the International Indian Film Academy Awards

2006: -Became part of the Aditya Birla Group subsequent to the TATA Group transferring its entire shareholding in the Company to the Aditya Birla Group -Acquired Escorts Telecommunications Limited (subsequently renamed as Idea Telecommunications Limited) -Restructuring of debt -Launch of the New Circles -Reached the 10 million subscriber mark -Received Letter of Intent from the DoT for a new UAS License for the Mumbai Circle.

IDEA Cellular
-Received Letter of Intent from the DoT for a new UAS License for the Bihar Circle through Aditya Birla Telecom Limited. ABNL, the parent of Aditya -Birla Telecom Limited, pursuant to a letter dated November 22, 2006, agreed to transfer its entire shareholding in Aditya Birla Telecom Limited to the Company for the consideration of Rs. 100 million.

2007:- Won an award for the "CARE" service in the "Best Billing or Customer Care Solution" at the GSM Association Awards in Barcelona, Spain -Initial Public Offering aggregating to Rs. 28,187 million and Listing of Equity Shares on the Bombay Stock Exchange and the National Stock Exchange -Merger of seven subsidiaries with Idea Cellular Limited -Reached the twenty million subscriber mark

2008- Idea Cellular Ltd has informed that the Board of Directors of the Company at its meeting held on October 20, 2008, inter alia, has appointed the following persons as Directors on the Board of the Company: 1. Mr. R C Bhargava Independent Director (Additional Director)

2.

Mr.

Murari

Independent

Director

(Additional

Director)

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

-Idea acquired 9 licences for Punjab, Karnataka, Tamil Nadu & Chennai, West Bengal, Orissa, Kolkata, Assam, North East and Jammu & Kashmir -Acquired Spice Communications with the operating circles of Punjab and Karnataka

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

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

-Idea becomes a pan-India operator

-Emerging Company of the Year - fastest

growing mobile operator in the worlds fastest growing telecom market - IDEA wins prestigious Golden Peacock Award 2008 for My Gang

- IDEA and Babajob launch a unique wap portal for job seekers in the informal sector Firstsource & Idea announce a five-year Outsourcing Partnership.

2010- Idea Cellular - Auction of 2.1 GHz band (3G Spectrum) Idea Cellular ties up with Indian Railways

- Idea cellular wants to provide 3G services in 4 circles out of the 11 that it has, for the same it has contacted Nokia Siemens Networks for deployment of equipment and services. Nation gives a thumbs up to Idea Oongli Cricket

- IDEA Cellular recognized as the 'Most Customer Responsive Company' in the Telecom sector by Avaya GlobalConnect 2011 - In order to provide assistance to 700 million mobile users regarding the services of mobile number portability, idea cellular has started a helpline number just before the three days of its launch. Launch Idea of 'Idea MyCash', special Powered International by Axis Bank offer

introduces

Roaming

- Idea user becomes first Indian to win Panchkoti Mahamoney on KBC - Idea wins Best Brand Campaign at the prestigious World Communication Awards.

2012- Department of Telecom (DoT) has said that the proposal of Malaysia based Axiata group to raise 1 per cent stake in Idea cellular to 21 per cent would not create any fresh security threat for the country. Idea Cellular declared as winner in 2G Spectrum auction

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

IDEA Cellular
arena! It has now bagged the prestigious World Communication Awards 2012 (WCA) under the Best Brand Campaign category at the recently held awards ceremony in London.

- Idea Cellular launched its new communication campaign, with a catchy jingle which has immediately gone viral! Idea Rings All India, the new advertisement from Idea, depicts the diversity, footprint, and seamlessness of our country, and how Ideas customers benefit from its pan-India network. - Idea wins at the prestigious World Communication Awards 2012, second year consecutively - Ivory from Idea most affordable Android 4.0 Smartphone launched in India.

IDEA Cellular

Inception and growth

In 2000, Tata Cellular was a company providing mobile services in Andhra Pradesh. When Birla-AT&T brought Maharashtra and Gujarat to the table, the merger of these two entities was a reality. Thus Birla-Tata-AT&T, popularly known as Batata, was born and was later rebranded as IDEA. Then Idea set sights on RPGs operations in Madhya Pradesh which was successfully acquired, helping Batata have a million subscribers, and the licence to be the fourth operator in Delhi was clinched. In 2004, Idea (the company had by then been rechristened) bought over the Escorts groups Escotel gaining Haryana, Uttar Pradesh (West) and Kerala and licences for three more UP (East), Rajasthan and Himachal Pradesh. By the end of that year, four million Indians were on the companys network. In 2005, AT&T sold its investment in Idea, and the year after Tatas also bid good bye to pursue an independent telecom business. And Idea was left only with one promoter, the AV Birla group. Rs 2,700 crore adding Punjab and Karnataka circles. Modis joint venture partner, Telekom Malaysia, invested Rs 7,000 crore for a 14.99% stake in Idea. Just around then, Ideas subsidiary, Aditya Birla Telecom sold a 20% stake to USbased Providence Equity Partners for over Rs 2,0000 crore.

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Holding

Initially the Birlas, the Tatas and AT&T Wireless each held one-third equity in the company. But following AT&T Wireless' merger with Cingular Wireless in 2004, Cingular decided to sell its 32.9% stake in Idea. This stake was bought by both the Tatas and Birlas at 16.45% each. Tata's foray into the cellular market with its own subsidiary, Tata Indicom, a CDMA-based mobile provider, cropped differences between the Tatas and the Birlas. This dual holding by the Tatas also became a major reason for the delay in Idea being granted a license to operate in Mumbai. This was because as per Department of Telecommunications (DOT) license norms, one promoter could not have more than 10% stake in two companies operating in the same circle and Tata Indicom was already operating in Mumbai when Idea filed for its licence. The Birlas thus approached the DOT and sought its intervention, and the Tatas replied by saying that they would exit Idea but only for a good price. On 10 April 2006, the Aditya Birla Group announced its acquisition of the 48.18% stake held by the Tatas at Rs. 40.51 a share amounting to Rs. 44.06 billion. While 15% of the 48.14% stake was acquired by Aditya Birla Nuvo, a company in-charge of the Birlas' new business initiatives, the remaining stake was acquired by Birla

IDEA Cellular TMT holdings Private Ltd., an AV Birla family-owned company. Currently, Aditya Birla Group holds 49.1% of the total shares of the company. Malaysia based Axiata controls a 14.99% stake in the company.

3G

On 19 May 2010, the 3G spectrum auction in India ended. Idea paid 5768.59 crores for spectrum in 11 circles. The circles it will provide 3G in are Andhra Pradesh, Himachal Kashmir,

Gujarat, Pradesh,

Haryana, Jammu &

Kerala, Madhya Pradesh, Maharashtra & Goa, Punjab, Uttar Pradesh (East) and Uttar Pradesh (West). On 28 March 2011, Idea launched 3G services in Gujarat, Himachal Pradesh and Madhya Pradesh. The launch cities were Ahmedabad, Shimla and Indore. This makes Idea the sixth private operator (eighth overall) to launch its 3G services in the country following Tata Docomo, Reliance Communications, Airtel, Aircel and Vodafone.

IDEA Cellular Idea currently supports up to 21.1 Mbit/s over 2G speeds of 256 kbit/s. However, different handsets support different speeds, from 384 kbit/s, 3.6 Mbit/s, 7.2 Mbit/s or 21.1 Mbit/s. Speeds also depend on the 3G plan/recharge that users opt for. The operator announced that IDEA 3G services will be available in 200 towns of 11 3G circles by mid-April 2011, progressively growing at the rate of ten towns per day to cover 750 towns by mid-2011 and 4000 towns by the end of 2012. Idea cellular has announced a cut of 70% in the tariff of its 3G services. On 23 November 2011 Idea Cellular launched two affordable 3G handsets in India: Idea 3G Smartphone Blade priced at 7,992 and Idea 3G Smartphone priced at 5,850. Both handsets are based on Android 2.2 Froyo. Idea has also launched a Dual-SIM Android smartphone in India on June 15, 2012 named as Idea ID-918 at a price point of Rs.5,994 ($108 approx.) It features Android v2.3 OS, 3.2-inch capacitive touchscreen, 3G, Wi-Fi and 3.2 MP rear facing camera. On 5 March 2013 Idea launched another 3G smartphone called Idea Zeal 3G which is a Dual SIM phone with 3 Megapixel camera.

IDEA Cellular Pan India 3G Coverage Airtel, Vodafone and Idea have begun collaborating to provide 3G coverage to their customers pan India. The agreement aims to provides for these companies to offer 3G services to their customers in circles where they have not won any spectrum. It is expected that the 3 companies will be able to provide 3G services in all circles in India except Orissa where the three have not won any spectrum. Holding Initially the Birlas, the Tatas and AT&T Wireless each held one-third equity in the company. But following AT&T Wireless' merger with Cingular Wireless in 2004, Cingular decided to sell its 32.9% stake in Idea. This stake was bought by both the Tatas and Birlas at 16.45% each. Tata's foray into the cellular market with its own subsidiary, Tata Indicom, a CDMA-based mobile provider, cropped differences between the Tatas and the Birlas. This dual holding by the Tatas also became a major reason for the delay in Idea being granted a license to operate in Mumbai. This was because as per Department of Telecommunications (DOT) license norms, one promoter could not have more than 10% stake in two companies operating in the same

IDEA Cellular circle and Tata Indicom was already operating in Mumbai when Idea filed for its licence. The Birlas thus approached the DOT and sought its intervention, and the Tatas replied by saying that they would exit Idea but only for a good price. On 10 April 2006, the Aditya Birla Group announced its acquisition of the 48.18% stake held by the Tatas at Rs. 40.51 a share amounting to Rs. 44.06 billion. While 15% of the 48.14% stake was acquired by Aditya Birla Nuvo, a company in-charge of the Birlas' new business initiatives, the remaining stake was acquired by Birla TMT holdings Private Ltd., an AV Birla family-owned company. Currently, Aditya Birla Group holds 49.1% of the total shares of the company. Malaysia based Axiata controls a 14.99% stake in the company. 3G On 19 May 2010, the 3G spectrum auction in India ended. Idea paid 5768.59 crores for spectrum in 11 circles. The circles it will provide 3G in are Andhra Pradesh, Gujarat, Haryana, Himachal Pradesh, Jammu & Kashmir, Kerala, Madhya Pradesh, Maharashtra & Goa, Punjab, Uttar Pradesh (East) and Uttar Pradesh (West). On 28 March 2011, Idea launched 3G services in Gujarat, Himachal Pradesh and Madhya Pradesh. The launch cities were Ahmedabad,

IDEA Cellular Shimla and Indore. This makes Idea the sixth private operator (eighth overall) to launch its 3G services in the country following Tata Docomo, Reliance Communications, Airtel, Aircel and Vodafone. Idea currently supports up to 21.1 Mbit/s over 2G speeds of 256 kbit/s. However, different handsets support different speeds, from 384 kbit/s, 3.6 Mbit/s, 7.2 Mbit/s or 21.1 Mbit/s. Speeds also depend on the 3G plan/recharge that users opt for. The operator announced that IDEA 3G services will be available in 200 towns of 11 3G circles by mid-April 2011, progressively growing at the rate of ten towns per day to cover 750 towns by mid-2011 and 4000 towns by the end of 2012. Idea cellular has announced a cut of 70% in the tariff of its 3G services. On 23 November 2011 Idea Cellular launched two affordable 3G handsets in India: Idea 3G Smartphone Blade priced at 7,992 and Idea 3G Smartphone priced at 5,850. Both handsets are based on Android 2.2 Froyo. Idea has also launched a Dual-SIM Android smartphone in India on June 15, 2012 named as Idea ID-918 at a price point of Rs.5,994 ($108 approx.) It features Android v2.3 OS, 3.2-inch capacitive touchscreen, 3G, Wi-Fi and 3.2 MP rear facing camera.

IDEA Cellular On 5 March 2013 Idea launched another 3G smartphone called Idea Zeal 3G which is a Dual SIM phone with 3 Megapixel camera.

Pan India 3G Coverage

Airtel, Vodafone and Idea have begun collaborating to provide 3G coverage to their customers pan India. The agreement aims to provides for these companies to offer 3G services to their customers in circles where they have not won any spectrum. It is expected that the 3 companies will be able to provide 3G services in all circles in India except Orissa where the three have not won any spectrum.[10]

IDEA Cellular
3G Coverage

Ideas 3G service is currently available in the following cities in 14 telecom circles[11] Telecom Circle No. of Towns

State/Region

Cities/Towns Akiveedu, Choutuppal, Jaggaiahpet, Amalapuram, Hyderabad, Kamareddy, Narsapur,

Andhra Pradesh

Andhra Pradesh

Machilipatnam, 13 Palakol,

Tadepalligudem,Mandapeta, Vizag, Vijayawada, Warangal, Vizianagaram, Yanam, Siddipet,

Gujarat

Gujarat

Ahmedabad, Daman Ambala, Bhiwani, Hansi, Hisar, Jhajjar, Panipat, Rewari, Agroha,

Haryana

Haryana

87

Rohtak,Adampur,

Asandh, Asauda, Badli, Baljattan, Barsi Barwala-His, Bawal, Beri, Bhadra, Bhalgarh, Bilaspur-Nh8,

IDEA Cellular Bolni, Charkhidadri, Dabwali,

Dharuhera, Dighal, Farookhnagar, Fatehabad, Shahjanpur, Gannaur, Gar-

Garhiharsu,

Gharaunda, Gohana, Hailymandi, Hodal, Ismaila, Ismailabad,

Jakhoda, Jamalpur-Ggn, Jhansa, Jind, Julana, Kahanaur, Kaithal, Kalanaur, Karnal, Kohand, Kundli, Kalka, Kassan, Kori Kaninakhas, Khatiwas, Kosli, Ladwa,

Kalan,

Kurukshetra,

Madhuban, Manesar,

Mahendragarh, Meham, Naraingarh,

Narnaund, Narwana, Nilokheri, Nuh, Palwal, Panchgaon, Pinjore, Pundri, Radaur, Samalakha, Punhana, Rania, Sampla, Pinangwan, Rohad, Shahbad,

Silkho, Sirsa, Sohna, Sonipat, Tatarpur, Tauru, Tohana, Tosham, Uchana, Uklana, Yamunanagar.

IDEA Cellular Himachal Pradesh Jammu Kashmir Himachal Pradesh & Jammu Kashmir Madhya Pradesh & Shimla, Baddi, Mandi,

Sundernagar, Dharamshala

Indore, Bhopal, Gwalior, Jabalpur Raipur, Durg & Bhilai, Bilaspur,

Madhya Pradesh Chhattisgarh 8

Champa

&

Jhangir,

Korba, Raigarh,

Ambikapur, Rajnandgaon, Dhamtari, Baloda

Bazar,

Kanker,

Jagdalpur,

Bhatapara, Gwalior tilda Ahmednagar, Akola, Amravati, Aurangabad, Maharashtra Maharashtra 17 and Goa

Bhusawal,

Buldhana, Gondia, Jalgaon, Jalna, Sangli, Kolhapur, Nagpur,

Nanded, Nashik, Parbhani, Pune, Raigad, Solapur, Goa 3 0 18 Trivandrum, Kochi, Kozhikode, Alleppey, Aluva, Thrissur, Ponda, Panaji, Margao

Punjab Kerala

Punjab Kerala

IDEA Cellular Irinjalakuda, Punalur, Adoor,

Thalassery, Koyilandy, Cherthala, Kannur, Kottayam, Malappuram, Manjeri, Parappanagadi, Munnar, Kothamangalam, Adimali Delhi Kolkata Kanpur Uttar Pradesh (East) Delhi Kolkata Kanpur 2 1 1 Delhi, NCR Kolkata Kanpur Allahabad, Eastern Uttar Pradesh 6 Jhansi, Azamgarh, Lucknow, Ballia, Sitapur,

Faizabad, Raebareli, Gorakhpur, Varanasi, Jaunpur Dehradun, Haridwar, Kotdwara,

Uttar Pradesh (West)

Western Uttar Pradesh

Roorkee, 12 Nainital, Gajraula, Bilaspur

Rudrapur, Moradabad, Joya,

Haldwani, Rampur, Pilkhuwa,

Ideas 3G service recently launched in Mumbai with 3G network sharing agreement with Airtel. [Idea has launched 3G services in Chennai, Delhi & NCR network sharing with Vodafone]

IDEA Cellular
Subscriber base

Idea's subscriber base as at the end of August 2011 according to the statistics, is totalling to 98,441,714 or 16.09% (Approx.) of the total mobile connections in India. Idea leads all other telecom operators in India in the MNP (Mobile Number Portability) race, with a net gain of 10,31,380 subscribers as on 31 August 2011. Idea also leads all other competitors in having the most active subscriber base, scoring highly on the VLR statistics. Visitor Location Register (VLR) is basically a temporary database of the subscribers who have roamed into the particular area, which it serves. Each base station in the network is served by exactly one VLR; hence a subscriber cannot be present in more than one VLR at a time. Customer service The company has its retail outlets under the "My Idea" banner. The company has also been the first to offer flexible tariff plans for prepaid customers. It also offers GPRS services in urban areas. Idea Cellular won the GSM Association Award for "Best Billing and Customer Care Solution" for 2 consecutive years

IDEA Cellular IDEA Cellular has been recognized as the 'Most Customer Responsive Company' in the Telecom sector, at the prestigious Avaya GlobalConnect Customer Responsiveness Awards 2010

Competitors
Idea competes with 14 other mobile operators throughout India. They are Aircel, Airtel, BSNL, Loop Mobile, MTNL, MTS, Ping Mobile, Reliance Communications, S Tel, Tata DoCoMo, Tata Indicom, Uninor, Videocon, Virgin Mobile and Vodafone.

IDEA Cellular

IDEAS STRATEGY

Idea is not the market leader in India. They were operating in a few circles earlier and wereconsidered a regional player. Recently Idea started operations in many states as part of theirnational roll out plan and they have operations in 2200 towns in India. Idea has been focusingon value added services (VAS) from its inception which is reflected in its products. They havealways taken extra care in providing customer friendly and competitive Pre Paid offerings.Differentiation and innovation can be associated with Idea right from its beginning. Its clearfrom the following: Super Power', 2 Minutes Outgoing Free, Lifelong offer, Women'sCard, 'LifetimeIdea'etc are some of the offerings of IDEA. IDEAisthe first cellular company to launch music messaging with 'Cellular Jockey','Background Tones', 'Group Talk',a voice portal with 'Say IDEA'and a complete suite of Mobile EmailServices. They are also providing GPRS and EDGE services for transferring data.

IDEA Cellular
The new product introduced by IDEA is the EDGE enabled USB Data Card which isnamed as 'NetSetter'. Initially NetSetter was offered to post paid customers only. Nowit is available to prepaid customers in selected circles. IDEAs partnership with IIFA for 10th Anniversary Awards, its association with MumbaiIndians in IPL and major sought after programs in television like MTV Roadies and IdeaStar singerclearly shows its marketing strategies. They always seek something differentand is always in touch with the youth of the country as they easily switch to otherservices. Their ad campaign showing AbhishekBachanin different settings but all clearly showingtheir corporate social responsibility is great. Their approach is different from others. Idea was the first to provide one rupee STD calls in the country. Now when every oneelse gives per second billing and also 50 paisaper minute, Idea offers at 49 paisaperminute.As far as Idea is concerned it should not start a price war with Vodafone and other large playersin the industry. This is because Vodafone has a lot ofmoney with them to suffer the losses andeventually emerge as the winner and it is almost doing that. Idea can only afford to come outwith some differentiated tariff plan that does not result in a war with the leaders like Airtel andVodafone. Indian telecom is already in trouble with the lowest tariff in the world.Differentiation and innovation is the way forward for Idea in this already bleeding industry,otherwise it will be a severe bloodshed.

IDEA Cellular

ANALYSIS THE INTERNAL ENVIRONMENT.

Strength
Attractive existing footprintThe subscriber base under brand Idea, increased from 24million as of end March 2008 to 43.02 million as of end March 2009, a growth of around79%, taking its national market share to 11%. Original licensee in seven of the Established Circles, providing incumbency advantages-Theestablished service areas are Delhi, Andhra Pradesh, Gujarat, Maharashtra, Haryana, Kerala,Madhya Pradesh and Uttar Pradesh (West). The New Service Areas are Uttar Pradesh (East),Rajasthan, Himachal Pradesh, Bihar, Mumbai, Karnataka, Punjab, Orissa, Chennai & TamilNadu, Jammu & Kashmir, Kolkata & West Bengal, and Assam & North East. Market leader in two of, and established positions in the remainder of, the EstablishedCircles. Strong distribution channels. High quality network structure. Innovation always comes out with new products.IDEA is the winner of The EmergingCompany of the Year Award' at The Economic Times Corporate Excellence

IDEA Cellular
Awards 2008-09.The company has received several other national and international recognitions for itspath-breaking innovations inmobile telephony products & services. It won the GSMAssociation Award for Best Billing and Customer Care Solution for 2 consecutive years. Itwas awarded Mobile Operator of the Year Award -India for 2007 and 2008 at the AnnualAsian Mobile News Awards. A national brand Human Resources -The Company through its participative work environment, skilldevelopment activities, and by championing the values of commitment, integrity, passion,seamlessness and speed, promotes strong bonding with its employees. During the year, ithas again undertaken sharing of value creation by granting another tranche of employeestock options to the eligible employees. The findings of

OrganizationHealth Study (OHS)have been analyzed, which are very encouraging, and concern areas are being suitablyaddressed. The employee strength onrolls stood at 6,481 as on March 31, 2009. Attractive growth From 11.8 million subscribers in 2006 to 24 millionin 2008 ,then to 43million by end of March 2009 and to 51 by end of 2009 is really a great performance fromIdea. Part of the Aditya Birla Group-IDEA Cellular is an Aditya Birla Group Company, India's firsttruly multinational corporation. The group operates in 25 countries, and is anchored byover 1, 30,000employees belonging to 30 nationalities. The Group has been adjudged the6th Top Company for Leaders in Asia Pacific Region' in 2009, in a survey conducted byHewitt Associates, in partnership with The RBL Group, and Fortune. The Group has alsobeen rated The Best Employer in India and among the Top 20 in Asia' by the Hewitt-Economic Times and Wall Street Journal Study 2007.Their promoters-1. Aditya Birla Nuvo Limited2. Grasim Industries Limited3. Hindalco Industries Limited4. Birla TMT HoldingsPrivate Limited

Weaknesses

IDEA Cellular
High Debt-Equity Ratio: The Company's Debt-Equity ratio is high as compared to its peers.Moreover, the Company needs the approval of the lenders under its financingarrangements before undertaking certain significant corporate actions. Concentration: The Company revenues are derived solely from providing mobile servicesand it is dependent on four of the Established Circles for a significant proportion of itsrevenues. The Company had accumulated losses amounting to Rs. 19.23 billion and Rs. 17.23 billionfor financial years 2005 and 2006 respectively. The Company may not be in a position to paydividends until it clears its accumulated losses.

Opportunities
The Indian telecommunication industry is expected to continue to enjoygrowth due to itslow teledensity and increasing affordability of mobile telephone and services. The stronggrowth in the sector continues, mainly due to expansion of telecom networks to rural India,the reduced cost of entry and the reduced cost of handsets. Low penetration, moreparticularly in rural India, provides opportunity for further growth, and your company, an incumbent GSM player with 900 MHz spectrum in about half of India, is well positioned totap this opportunity. The contribution of service sector to the GDP has improved significantly from 29% in 1950to 54% in 2005. This is primarily due to growth of information-technology and informationtechnology enables services. This will further stimulate the demand for mobiletelecommunication services. The regulatory environment is improving and there is greater clarity in existing rules andprocedures. This would enable operators in improving network quality. Also raising of fundswill become easier due to greater predictability of operational environment. Competition from new technologies is an inherent threat. While the planned 2100 MHzspectrum auction for 3G services will lead to additional cash outflow, it will also

IDEA Cellular
open newrevenue streams. The Companys strong balance sheet and market standing, positions it toparticipate effectively in such auction.

Threats
There is intense competitionin the Indian telecommunication industry. Idea Cellular facessignificant competition from private companies that have a pan-India footprint such asBharti Airtel, Tata Teleservices and Reliance Communication Ventures. Also it facescompetition from government owned companies such as BSNL and MTNL. Alternative technology is evolving very rapidly in the telecommunications industry. Forinstance, Wi-Fiand Wi-Maxwhich allows for voice data transfer have been tested andhandsets with such technology maysoon be available in the Indian market. Moreover,satellite communication voice data transport medium like Skypemay become a seriouscompetitor in the long distance voice data transfer business. Porters five forces -Analysis the external environment 1.Competitive rivalry within the Industry a.Principal competitorsMajor competition comes from the industry leader Bharti Airtel. Bharti Airtelhas 24.3%customer market share and 33.8% revenue market share. Vodafone India has 18.8% customer market share and 20.7% revenue market share. Idea Cellular has 11.2% subscribers market share and 12.1% revenue market share BSNL has subscriber share of 12.7% and mere 10.2% of revenue share Reliance Communications is the worst performerwith 18.9% customer market shareand pathetic 11.5% revenue market share.(Data mentioned are by end of August 2009)b.Salient strengths BSNL has taken full advantage of its wide network and fixed line subscriber base,and has established itself as the provider with maximum coverage over thecountry. While Bharti Airtel has dominated the scene with wide reach, innovativepackages, catchy ads, and has emerged the leader of the pack. Reliance Communications also has the wide network to its advantage.

IDEA Cellular
Tata tele-services banks on the Tata-trust factor to gain foothold in the market. Vodafone is hitting the Indian market in a huge way. They have large cashreserves at their disposal to wipe out the competition in future.WeaknessesBSNL lines are mostly marred by congestion,bottlenecks and they have failed tocapture the attention of the customers with attractive offers. Unstable range and poor customer support are Airtels minuses. Ambiguous schemes have reduced Reliances popularity. TATA Indicom has not really been able to fully capitalize its goodwill factor.c.Their basis for competition-Vodafone and Idea are comparatively new entrants into the market and hencethe rest of the competition has anadvantage over them. Also both these brands haveundergone rebranding more than once, and subsequently have had hiccups with peoplenot realizing the transformation. Giants like BSNL, Airtel and Reliance have widenetworks in the nooks and crannies of thecountry, while Idea is still to open account inseveral states.

2.Bargaining Power of Customers

The bargaining power of customers determines how much customers can impose pressureon margins and volumes. Customers bargaining power is likely to be high because Customersuse multiple mobile services these days and hence have a good knowledge of the pros and cons of each service provider. Telecommunication industry comprises a number of operators The industry operates with high fixed costs The product is not much differentiated and can be replacedby substitutes Switching to an alternative product is relatively simple and is not related to high costs Customershave low margins and are price sensitive Thecustomer knows about the production costs of the product.

3.Bargaining power of suppliers

IDEA Cellular
In this industry there is less number of suppliers compared to other industries such as themanufacturing or textile industry.I.Mobile handset suppliers although there are many handset suppliers in the country,some service providers have their own handset manufacturing units operating inthecountry like the Reliance Classic and Tata Indicom (backward integration). Some of thetelecom companies also have some collaboration with major handset manufacturerslike Samsung, L.G, and the Blackberry for their CDMA services.II.Some other suppliers include optical fibre suppliers and aluminium (for the constructionof towers) suppliers. Here the suppliers have a limited bargaining power.III.Another important one is the software assistance where the suppliers have some edge.Major solution providers include TCS, Infosys, Wipro, etc. While Reliance and Tata havetheir own software services other players like Vodafone and Idea depend on the abovementioned software service providers.

4.Threat ofnew entrants

Indian telecom sector provides unprecedented opportunities for foreign companies invarious areas such as 3G, virtual private network, international long distance calls, valueadded services etc.The market is witnessing M&A activities that are leading to consolidations in the industry.This trend has assisted companies in expanding their reach in the Indian telecom market tooffer better services to the customers. The Indian telecom industry has always attractedforeign investors. In fact, the cumulative FDI inflow, from August 1991 to March 2007, inthis sector amounted to $3,892.19 million. This makes telecom the third largest sector toattract FDI since the liberalization. Although the entry barriers are in place like license and high fixed costs, still we observemany new players emerging from the state-level to national-level. This includes Aircel,Virgin, Spice and Unitech.

5.Threat from substitutes

Telecom sector offers a wide range of services in India such as wireline, CDMA, GSM,internet, VoIP, IP etc.Internet telephone is emerging as a best substitute for the

IDEA Cellular
mobile telephony because it ischeaper and video can also be added. The increasing use and penetration of internet in thecountry also augments this. Other facilities on the internet such as Google talk, YahooMessenger, Rediff Bol are used at an unprecedented level by the youngsters of this country.These are the major substitutes for the mobile telephony. Maybe this is on of the reasonswhy the major service providers also have their presence in internet service.

Strategy
Build leading-edge IP-leveraged solutions advanced by our unmatched global infrastructure and leadership in emerging markets.

IDEA Cellular

BOARD OF DIRECTOR
Director Name Designation

Kumar Mangalam Birla Chairman Himanshu Kapania Biswajit Anna Subramanian Rajashree Birla Rakesh Jain Shridhir Sariputta Hansa Hansa Wijayasuriya Juan Villalonga Navarro R C Bhargava Arun Thiagarajan Mohan Gyani P Murari Tarjani Vakil G P Gupta Sanjeev Aga Pankaj Kapdeo Managing Director Non Executive Director Non Executive Director Non Executive Director Alternate Director Alternate Director Nominee Independent Director Independent Director Independent Director Independent Director Independent Director Independent Director Director Company Secretary

IDEA Cellular

ANALYSIS OF THE
MARKETING STRATEGY OF IDEA CELLULAR

COMPANY PROFILE:
Idea is the 3rd largest mobile services operator in India, in revenue terms, and recorded a subscriber base of over 100 million or 17.28%(Approx.) of the total mobile connections in India as of 31st January 2012. As on 31st January 2012, the company is leading the MNP (Mobile Number Portability) race, with a net gain of close to 11 million subscribers. The company also leads all other competitors in having the most active subscriber base, scoring highly on the VLR statistics. Ideas Revenue for the year 2011 stands at $3.43 Billion. Currently Idea is the 6th largest mobile operator by

IDEA Cellular
subscriber base. Idea cellular acquired 3G licenses in 11 telecom circles for Rs. 5768.59 Cr during the spectrum auction in May 2010.3G services have already been launched in 7 circles out of the 11 circles that Idea has acquired licenses. Idea Cellular is planning to be a world-class internet service provider (ISP) in India. It is working to establish state of the art infrastructure.

CURRENT SITUATION ANALYSIS:

Porters five forces:

IDEA Cellular

SWOT ANALYSIS:

CURRENT CUSTOMER SEGMENTATION

Idea Cellular currently segments its customer profile into 2 basic groups: 1) Prepaid Customers and 2) Postpaid Customers Prepaid Customers are generally the personal use customer group i.e. non institutional. This segment accounted for around 80% of the customer base (2008 figures) and the remaining 20% was accounted for by the postpaid customer base. The customer base is also segmented into groups according to the monthly revenue generated:

IDEA Cellular
The segmentation here is done as:

1)VIP customers: These are the customers who form the VIP group as the name suggests and comprises of MPs, MLAs, industrialists and other high profile customers. These are given high attention in services as they are key to implementation of services across their regions.

2)Corporate Customers: These are the customers having more than five connections to their name and generate revenues in excess of Rs. 10000 a month. These are usually institutionally driven connections and are post-paid customers. Service quality in terms of Value Added Services provided including preferential customer service treatment is provided to retain these high value accounts.

3) Platinum Customers: These are the customers whose current monthly expenditure on Idea Cellular Services is in excess of Rs.1500 per month. The revenue generated from these accounts includes Voice, Data and VAS services. Around 60% of these are from the post-paid group while the remaining 40% are from the pre-paid group. Institutional Customers account for around 70% of the post-paid base while the remaining are the personal usage customers.

4) Gold Customers: These are the customers providing revenues to the company between Rs.1000 and Rs.1400 a month. The pre-paid base is again smaller in this segment accounting for nearly 35% of the customers. A healthy split is found between personal and institutional usage customers.

5) Silver Customers: This customer group provides revenues in the range of Rs.750 to Rs.999 to Idea Cellular each month. Pre-paid user group is in the range of around 55% while institutional sales account for around 80% of the post-paid group. 6) Medium Volume users: These are the customers generating between Rs.220 to Rs.750 each month. Prepaid customers form around 65% of the group while this group accounts for approximately 30% of the whole customer base of Idea Cellular. 7) Low Volume customers are the customers generating revenues less than Rs.250 per

IDEA Cellular
month

Tier 1 Metropolitan Circle:

Tier 2 Urban Circle:

Tier 3 Urban Circle:

IDEA Cellular

Target Market: The Target Market is the high revenue generating segment of the Platinum and Gold Customers. It is strategic for the company to increase user base in these two segments as they generate a steady income source and most being post-paid, the company Major These are is usually Benefits even given assured of for treatment ease of collection of bills.

these in Customer

customers: care.

These are generally high data usage group and hence given dedicated Time Slots when their data usage is detected to maximize usage and revenue generation as a result. The Metropolitan and Urban circles have mobile density of 134% as compared to 29% in rural areas. Hence, more focus should be on expanding in rural segments. With the advent of 3G services and increasing number of smart phones, operators should focus on advanced value added services like live streams, mobile money etc. Strategy makers should think on the pricing policy of postpaid plans of corporates and affordability of the consumers to beat the competition. Company should come with new ideas & innovations to increase the sales & market shares. Company should focus more and more on advertising to promote services in corporate world. The Aditya Birla Group IDEA Cellular is an Aditya Birla Group Company, India's first truly multinational corporation. The roots of the Aditya Birla Group date back to the 19th century in the picturesque town of Pilani, set amidst the Rajasthan desert. It

IDEA Cellular
was here that Seth Shiv Narayan Birla started trading in cotton, laying the foundation for the House of Birlas.

Through India's arduous times of the 1850s, the Birla business expanded rapidly. In the early part of the 20th century, our Group's founding father, Ghanshyamdas Birla, set up industries in critical sectors such as textiles and fibre, aluminium, cement and chemicals. As a close confidante of Mahatma Gandhi, he played an active role in the Indian freedom struggle. He represented India at the first and second round-table conference in London, along with Gandhiji. It was at "Birla House" in Delhi that the luminaries of the Indian freedom struggle often met to plot the downfall of the British Raj. Ghanshyamdas Birla found no contradiction in pursuing business goals with the dedication of a saint, emerging as one of the foremost industrialists of preindependence India. The principles by which he lived were soaked up by his grandson, Aditya Vikram Birla, Group's legendary leader. Mr. Aditya Birla dared to dream of setting up a global business empire at the age of 24. He was the first to put Indian business on the world map, as far back as 1969, long before globalisation became a buzzword in India. At the time of his untimely demise in 1995, the Group's revenues crossed Rs.8,000 crore globally, with assets of over Rs.9,000 crore, comprising of 55 benchmark quality plants, an employee strength of 75,000 and a shareholder community of 600,000.

IDEA Cellular

MANAGEMENT DISCUSSIONS

Sector Growth
The year was marked by the uncommonly large new service launches by new licensees,leading to an over-crowded sector. Resultant hyper-competitive market conditions led to asteep decline in tariffs and introductory offerings of free minutes. Consequently, while subscriber growth was high, the sector revenue growth slowed to 5.1% compared to 22.3% inthe preceding year.

Regulatory
Some major regulatory developments for the period were: TRAI on MNP Regulation and porting charges The TRAI on November 20, 2009 issued the Mobile Number Portability (MNP) portingcharges regulation. As per it, the porting charges (paid by the subscriber to theRecipient Operator) should not exceed Rs. 19 per request. The per port transaction charges(payable by the Recipient Operator to the Mobile Number Portability Service Provider) forprocessing the porting request of a mobile number, has been fixed at Rs. 19. Extension of timeline for implementation of MNP The DoT, keeping in view the

IDEA Cellular
complexity and enormity of the testing involved before MNPis implemented, and the present status of implementation by some operators, has extendedthe timeline for implementation of MNP from June 30, 2010 to October 31, 2010. Amendment in licensing conditions on equipment purchase The DoT, vide its letter of December 03, 2009 and subsequent clarifications, issued anamendment in the licensing conditions (valid for CMTS, UASL, NLD & ILD) for telecomequipment purchase. Licensees, before issuing purchase orders relating to telecomequipment, are required to make an application giving details of the original equipmentmanufacturer / supplier for security clearance from the DoT. The revert from the DoT onapplications is to come within 30 days, failing which the licensee can take it as a deemedapproval. Auction of 3G and BWA Spectrum The DoT, on February 25, 2010 issued Notice Inviting Applications (NIA), fromprospective bidders to participate in the auction of 3G and BWA spectrum. As per the NIA,3 slots of 3G spectrum were available in 17 service areas and 4 slots were available in 5service areas, while in the case of BWA, 2 slots were available in each service area forauction. The NIA included auctioning rules, timelines and other procedural requirements.The 3G auction started on April 09, 2010 and concluded on May 19, 2010 after 183 rounds ofbidding. The BWA auction started on May 24, 2010 and concluded on June 11, 2010 after 117rounds of bidding. WPC order to increase spectrum charges and Petition against the same . The WPC, on February 25, 2010 revised the spectrum charges, with effect from April 1,2010 for GSM and CDMA operators as under:

IDEA Cellular GSM Spectrum Upto MHz 2X6.2 2X8.2 CDMA Spectrum 2X5 Existing Charges (% Revised of AGR) 2% 3% 4% (for up to 10 MHz GSM and CDMA 2X10.2 2X12.2 2X10 2X12.5 spectrum) 5% (for 12.5 MHz GSM spectrum) 2X15.2 2X15 6% 8% 6% 7% Charges

(% of AGR) 3% 4% 5%

2X4.4 Upto MHz 2X6.25 2X7.5

The Company, along with other aggrieved operators, filed a joint petition against theWPC order. The Honble TDSAT vide its order dated 26th March, 2010, was pleased togrant an interim stay, subject to the condition that in the event the petition isdismissed, the petitioner shall pay the spectrum charges along with interest at such rateas may be determined. The TDSAT order included direction to the petitioners to continuepaying spectrum charges at the applicable rate till further orders. The respondent (DoT)was directed not to give effect to the above impugned notification till the matter isdisposed off. The TDSAT also directed for separate petitions to be filed by each of thepetitioners. The Company has complied by filing a separate petition.

IDEA Cellular
TDSAT order on Carriage Charges The TDSAT, vide its judgment dated May 21, 2010 has upheld the BSNL stand and allowedthe distance based carriage charging with effect from May 11, 2005 while stating, interalia, that the impugned orders of the TRAI cannot be sustained and consequently settingthem aside. Discussion on Consolidated Financial Statements and Operational Performance Subscriber Base As on March 31, 2010, the company had 63.82 mn subscribers representing a 48.4%increase compared to the subscriber base of 43.02 mn on March 31, 2009.

Revenues
Revenues and Other Income for the year ended March 31, 2010, stood at Rs. 124,990 mn,as compared to Rs. 101,544 mn during the previous year, showing a growth of 23.1%, in asector which grew at 5.1%. VAS Revenues grew at 43.2% over the previous year. Revenuesfrom Long Distance services, and from Passive

Infrastructure, forming part of totalrevenues after inter segment eliminations, were Rs. 858 mn, and Rs. 677 mn respectively.Growth in Other Income was predominantly due to reversals arising from conversion of leaseagreements from finance lease to operating lease.

Operating Expenses
Operating Expenses stood at Rs. 90,399 mn vis--vis Rs. 73,180 mn for the previousyear. The contributors to the total Operating Expense of 72.3% were Personnel Expenditure5.2%, Network Operating Expenses 25.0%, License and WPC charges 10.8%, Roaming and AccessCharges 14.4%, Subscriber Acquisition and Servicing Expenses 9.3%, Advertisement &Business Promotion Expenditure 3.4% and Administration & Other Expenditure 4.3%.

Profit before Interest, Depreciation and Amortisation

The Company generated a Profit before Interest, Depreciation and Amortisation of Rs. 34,591 mn for the year ended March 31, 2010, a growth of 22% compared to the

IDEA Cellular
previousyear. The operating profit margin for the current financial year stood at 27.7 % comparedto 27.9% for the previous year. Depreciation, Amortisation and Finance Charges Depreciation & Amortisation expenses increased to Rs. 20,149 mn for the year endedMarch 31, 2010 showing an increase by 43.6%, as against Rs. 14,028 mn for the previousyear. Net finance charges for the year decreased by 19% from Rs. 4,945 mn to Rs. 4,005 mn,mainly due to foreign exchange fluctuations.

Profits and Taxes

For the year ended March 31 2010, Cash Profit from operations stood at Rs. 30,555 mn, agrowth of 31.1% over the previous year. The Profit before Tax for the year stood at Rs. 10,754 mn, an increase of 14.5% over the previous year. The tax charge for the year,mainly consisting of deferred tax liability, stood at Rs. 1,215 mn. The Net Profit for theyear ended March 31, 2010 was Rs. 9,539 mn, resulting in a net profit margin of 7.6%. Capital Expenditure During the year ended March 31, 2010, the Company (including the erstwhile SpiceCommunications Limited) incurred a capital expenditure of Rs. 39,814 mn.

Balance Sheet
During the year, the paid-up equity share capital of the company increased by Rs. 1,997.43 mn, due to issuance of 199.15 mn equity shares to the shareholders of erstwhileSpice Communications Limited upon its amalgamation with the Company and issuance of 0.59mn equity shares to the employees pursuant to exercise of stock options granted underEmployee Stock Option Scheme, 2006. The total shareholders funds stood at Rs. 113,704 mn as at March 31, 2010. The Gross Block stood at Rs. 270,585 mn, and Net Block including Capital Work inProgress (CWIP) stood at Rs. 187,143 mn as at March 31, 2010. Treasury investments inmutual funds decreased by Rs. 9,148 mn during the year and stood at 11,304 mn as at March31, 2010. During the year, Current Assets decreased due to

IDEA Cellular
utilization of surplus fundslying in fixed deposits, and hence the net Current Liabilities as at March 31, 2010 stoodat Rs. 4,050 mn.

Human Resources
The Company, through its participative work environment, skill development activities,and by championing the values of commitment, integrity, passion, seamlessness and speed,promotes strong bonding with its employees. During the year, it has again undertakensharing of value creation by granting another tranche of Employee Stock Options to theeligible employees. The findings of the Organisation Health Study (OHS) have been analysed, which are veryencouraging, and concern areas are being suitably addressed. The employee strength onrolls stood at 6,763 as on March 31, 2010.

Risk Management
The Risk Management framework of the Company ensures, amongst others, compliance withthe requirements of Clause 49 of the Listing Agreement. The framework establishes riskmanagement across all service areas and functions of the Company, and has in placeprocedures to inform the Board Members about the risk assessment and minimization process.These processes are periodically reviewed to ensure that the management of the Companycontrols risks through a defined framework. The various risks, including the risksassociated with the economy, regulations, competition, foreign exchange, interest rateetc., are monitored and managed effectively.

Internal Control Systems

The Company has appropriate internal control systems for business processes, coveringoperations, financial reporting and compliance with applicable laws and regulations.Clearly defined roles and responsibilities for all managerial positions drive adherence ofdefined processes. Process controls are reviewed periodically and strengthened given theinherent nature of operational fraud risks in telecom sector. The operating parameters arealso monitored and controlled. Regular internal audits and

IDEA Cellular
checks ensure that theresponsibilities are executed effectively. The audit committee of the Board of Directorsactively reviews the adequacy and effectiveness of internal control systems and suggestsimprovements for strengthening them, as appropriate.

Opportunities, Risks, Concerns and Threats

The Indian wireless sector is going through a testing phase of over-capacity ledhypercompetition. Lower tariff and high introductory offers have resulted in multiple SIMownership, reduced realization per minute of use and the conversion of paying minutes tonon-paying minutes, leading to slowing down of revenue growth for the sector. Themultiplicity of SIM ownership has made the subscriber numbers and related metricsmeaningless to gauge the strength of the business. However, the Company has been able toexploit its incumbency strengths and drive efficiencies through evolved processes, and hasdemonstrated enhanced competitive strength during this testing phase. The telecom sector is characterised by technology changes. Competition from newtechnologies is an inherent threat. However, your Company, with the spectrum in 900/1800 MHz and in 2100 MHz, has anattractive spectrum footprint to adapt to future technology changes. This, along with thestrong balance sheet, and a power brand, positions the company to make the best of futureopportunities in a growth sector. The Company requires certain approvals, licenses, registrations and permissions foroperating its business. In addition, regulators may amend license conditions, norms forspectrum allocation, spectrum charges, merger and acquisition rules etc. which may have asignificant impact on the Companys business. The Company, however, is hopeful thatthe policy changes will be equitable. The Companys business is dependent on key vendors to supply critical networkequipment and services. Besides, its ability to provide quality mobile network andexpanding its area of operations and the subscriber base is also dependent on the spectrumallocation by the government. The Company believes in partnering with

IDEA Cellular
vendors who are ofinternational repute, and with whom it builds long term relationships.

Outlook
The business models of telecom operators are being stress-tested by overcapacity ledhyper-competition. With several licensees operating at tariffs lower than cost, theeventual phasing out of this period of over-capacity is inevitable. The Company, with afocus on strengthening its leadership position in its incumbent service areas, and acalibrated and measured approach to newer service areas, is well placed to emergecompetitively stronger. The telecom sector provides lucrative long term opportunities forstrong operators, of which the Company is one of a handful. Cautionary Statement Statements in the Management Discussion and Analysis describing the

Companysobjectives, projections, estimates, expectations may constitute a "forwardlookingstatement" within the meaning of applicable securities laws and regulations. Actualresults could differ materially from those expressed or implied. Important factors thatcould make a difference to the Companys operations include economic conditionsaffecting demand/supply and price conditions in the domestic markets in which the Companyoperates, changes in the Government Regulations, tax laws and other statutes and otherincidental factors. Strategy in Global Context For Idea Cellular Ltd.

Introduction to Internal Analysis:

Internal analysis is a vital strategic management tool that helps in identifying the strengths andweaknesses of an organization. These strengths and weaknesses, give an organization certainadvantages and disadvantages to meet the needs of its target markets. Both strengths andweaknesses should be identified from the customers perspective, because customers often perceive what the organization couldnt identify. (David, 2008) Importance of conducting an internal analysis:

IDEA Cellular
It helps to identify an organizations own capabilities, assessing the following things: What makes us different from competitors? What is the general market condition of our business? What are the problems and complaints that customers are facing with our products in theindustry, and how can we deal with them effectively?

IDEA Cellular

PROFIT ANALYSIS

Physical Resources:
Idea cellular is a public listed company having license to operatein 22 areas. Presently its operations exist in 11 service areas, having a customer base of 24million covering more than 60 % of the total Indian telecom population. (Capitaline, 2009)Currently Idea cellular has its corporate office in Mumbai, and a registered office in Gujarat. Itscircle offices are located in 17 states. Presently it has partnership agreements with somerenowned organizations such as, Cellebrum India Pvt. Ltd., and NDTV for VAS (value addedservices), and for roaming Bharti Telesoft, for marketing communication it has tied up withLowe India Pvt. Ltd. and for network, Nokia and Ericson are its biggest partners. (Bureau E. ,2009)

IDEA Cellular Reputation Resources:

Being a part of Indias first multinational group, Aditya Birla,and being the third largest telecom service provider, it carries a strong reputation in the Indiantelecom industry. It is also listed in Bombay Stock Exchange (BSE) as well as National Stock exchange. It has been awarded Emerging Company of the year by Economic times in 2009(The Economic Times, 2009) It has won an award for Care services in the best billing or ustomer care at the GSM association award in Barcelona, Spain. The company won prestigiousGolden Peacock Award for its innovative product My gang in 2008. Idea cellular limited isalso an official sponsor of IIFA awards (Idea Cellular, 2008)

Organizational Resources:
Along with Idea Cellular, Aditya Birla Group is consideredas one of the most ethical companies in India and it reflects in all of its operations. The company hasmaintained cordial relations with its suppliers and distributors. The company holds annual awardfunctions to reward its suppliers, distributors and employees. It gives bonuses and dividends to itsshareholders and employees every year.

Financial Resources:
The current ratio and the quick ratio of Idea Cellular (CurrentAssets/Current Liabilities) is 1.38:1 and 1.3:1 which show they can convert their assets into cash easily and pay their current liabilities (Capitaline, 2009). In the same way their working capital is $1.5 billion which shows that they have huge cash for daily basesoperation and financial works. If we talk about their shareholder funds which includegeneral reserve and equity share capital is $ 23 billion and total long term debt is $6 billion which is less than their capital, so it helps them to get loan easily (Idea Cellular Revenue, 2009). Revenues for Ideas 13 operating service areas for Q1 at Rs. 26 milliongrew by 13.9% in 2009 (The Financial Express, 2009). Similarly, they invest in almostevery big mutual fund companies, such as in ABN Amro Mutual Fund, ICICI PrudentialMutual Fund, SBI Mutual Fund, HDFC Mutual Fund, and

IDEA Cellular
Birla Sun Life Mutual Fund.So we can say base on the data, the company has strong financial management resources(Capitaline, 2009).

Intellectual Resources analysis:

Idea Cellular has separate R&D departmentwhich helps to increase market share. It invests a huge amount in advertisement such as theyhave brand ambassadors such as Abhishek Bacchan and Mumbai Indians (Indian PremiereLeague). Idea has positioned themselves as young smart and innovative (Idea Cellular Revanue,2009). Their advertisement punch line An idea can change your life created self image of the brand that other players were not able create in a short span of time. Moreover, in the year 2008it collaborated with Geodesic, an innovator in communication and entertainment applications onmobile for providing Idea radio a radio service for its customers.

Technological Resources analysis:

Idea Cellular invests huge amount in theinnovation embedded solution to enhance its technology, network, wireless space andCustomer Relationship Management (Our Partners, 2009). For this, they signed a deal of $19.2 million with IBM (USA base Software Production Company). Idea uses IBMwebspare application server for data and financial transaction, Oracle Siebel customer data integration for Customer Relationship Management and Supply Chain Management,they use OLTP (Online Transaction Process), CICS (Customer Information ControlSystem) software to optimize the data security, network and mobility management (IdeaPortal, 2009). Idea Cellular uses Vehicle Tracking System by GIS (Global ProcessingSystem).

VRHN: Idea Cellular

VRHN analysis is considered as the foundation of internal analysis. Whatever an organization possesses is generally considered as a resource or capability. Financial

IDEA Cellular
resources, plant,equipments, technology, brand equity and organizational expertise all can be considered asresources. Therefore, in order to have a competitive advantage an organization has to make surethat its resources are valuable, rare, hard to imitate and non substitutable.

Value:
The Indian Telecom sector is the biggest telecom sector in the world, which has not been affected by economic downturn (Antony A. & Ghosh D., 2008). Due to change in per capita income, and providing good service, it is growing rapidly. Many multinational companiessuch as AT&T (USA), MTN (South Africa), Vodafone (UK) are trying to take control in India, but the domestic players like Airtel and Idea Cellular are trying to stop them to become a marketleader. Idea cellular has great goodwill in India, because of many reasons such as, it is a publiclisted company, part of 12$ billion of Indias first multinational group Aditya Birla Group,which has operations in 18 countries (Idea Cellular, 2009). Even though, Idea wasnt the first player in the telecom industry to launch GPRS, it has been awarded by The Economic Times in2009 as emerging company of the year (The Economic Times, 2009). So its product has positiveimage between consumers.

Rarity:
As we know infrastructure and technology is not at par in India. So, Idea has tie upswith IBM, Oracle, Nokia and Ericson. They provide good software which Idea cannot get inIndia due to technology. Idea use IBM webspare application server for data and financialtransaction, Oracle Siebel customer data integration for Customer Relationship Management andSupply Chain Management OLTP (Online Transaction Process) software to optimize the datasecurity, network management. (The Financial Express, 2008)

Hard to imitate:
In India, every telecom company has to follow same rules andregulations laid down by TRAI (Telecommunication Regularity Authority of India) and DoT.One company

IDEA Cellular
cannot copy anothers product, service name or punch line because of RegisteredTrademarks and Copyrights (TRAI, 2009), but they can start same service at same price withdifferent name such as Idea came up with a unique plan Idea Women Calling Card and MyGang then in few days Airtel started Family and Friends, when Idea started GPRS service,Airtel and Vodafone also launched similar services with a different name and when Idea reducedcall charges and launched easy recharge, others also did the same thing. The punch line of IdeaCellular An idea can change your life cannot be imitated; the quality of product, network andservice cannot be imitated.

Not Substitutes:
Due to same call tariffs and similar bandwidth Idea can be easilysubstituted. There are many telecom service providers who offer services at almost same pricesuch as Airtel, Vodafone and Tata Indicom. Therefore if people are not satisfied with theservices or ongoing plans, they can easily step out and use the services of other players.

Internal Factor Analysis:

STRENGTH:
Brand reputation:
Idea cellular is a part of Aditya Birla Group, a multinational havingoperations in 25 countries. The reputation of being the first Indian multinational and part of 100fortune companies carries a lot of strength which Idea cellular enjoys being the part of prestigious group. (Idea Cellular, 2008) Profit margin has been increasing at high rate . The profit margin of Idea cellular in relation toits competitors like Bharati Airtel and Vodafone has grown relatively about 4% from 2006-07 which was 11% to 15% in 2007-08. It is strength for the organization as it is likely to give them acompetitive edge. (Q3 result: Idea cellular, 2008)

IDEA Cellular Financial strength:

The current ratio and the quick ratio of Idea Cellular (Current Assets/CurrentLiabilities) is 1.38:1 and 1.3:1 which show they can convert their assets in to cash easily and pay their current liabilities (Capitaline, 2009). In the same way their working capital is $1.5 billion which showsthat they have huge cash for daily bases operation and financial works. If we talk about their shareholder funds which include general reserve and equity share capital is $ 23 billion and total long term debt is $6 billion which is less than their capital, so it helps them to get loan easily (Capitaline, 2009).

Market share:
The overall market share of Idea cellular is increasing at a healthy rate. It iscurrently operating in an industry which is expected to grow at a rate of 1.3 $ trillion in revenueaccording to a US based research agency (Insight research corporation New Jersey). Thus we caninfer from this fact that Idea cellular has a huge target audience, as it has expanded its operationsin almost all parts of India (The Money control, 2008).

Technology innovation:
Being the first player in the telecom industry to start GPRS services inIndia, and even starting unique products, such as My gang and Idea radio, the

technologicalinnovation of the organization can act as strength to the company in the long run (The Hindu,2008).

Strong advertising and promotion:

Idea cellular is known in the industry for its aggressive promotional and advertising techniques, such as having Abhishek Bachan, a famous Bollywoodstar as part of its advertising punch line What an idea Sir Ji proved effective in carrying out the promotional campaigns throughout the country (Money Outlook, 2001). Strategic alliance:

IDEA Cellular
Idea cellular has strategic alliance with IBM and Oracle. Both have a unique brand image for providing best in class software solutions like CRM (Customer RelationshipManagement) and OLAP (Online Analytical Processing). It has also tie ups with leading mobile producers like Nokia. This shows that the organization is dedicated towards providing superior services to its customers. (Idea Portal, 2009)

Weakness:
No presence in Broadband or internet service: BSNL, Airtel, Reliance communications, Tata,all of them offer broadband services. Reliance communications as well as Tata are now offeringhigh broadband access through Data cards. It thus adds value to their respective brands. Not being a broadband service provider is therefore a big weakness for them.

Less PAN India presence:

Idea cellular limited has a low PAN (Presence across nation) India presence as compared to its rivals Airtel and Reliance communications. Airtel and Reliance havealways been the first ones in expanding their operation expeditiously as compared to other players in the industry.

Target only North India:

Idea Cellular is the market leader in North India, but they have asmall market share in South India. Now recently it has made its presence in Tamilnadu.

Not a player of Direct to Home Service:

Idea cellular is not a player of DTH services.Players like Reliance and Bharti Airtel have a strong presence in DTH services. Looking at thefuture prospects of DTH services the giants like Tata, Airtel and Reliance who are the leadingmobile service providers in the country have entered the arena of DTH. The DTH industry isexpected to touch a base of 40-50 million subscribers by 2015.

Not a big player in urban market:

Plan for next three years

IDEA Cellular
The company is having high operating cost i.e. the company is not utilizing its recourses properly, since by the Internal-External (IE) matrix the company falls in the grid of Grow and Build which also suggeststhat the company can go intense and aggressive strategy of market penetration or the alternative of goingfor the vertical integration. According to the QSPM analysis as well the alternative for going for thevertical integration was the most attractive one. The company should also come up with new service likeTata Docomo has come up Billing per pulse rate in order to increase the market share. In the BCGmatrix Idea Cellular falls in the Stars category. Idea Cellular should also try to acquire or tie up withother companies such as Vodafone and Hutch and Airtel and MTN tried to tie-up in order to catch up withthe competition and the growth of the industry. They acquired spice in past and they have tie-up withEricson but they do not have any type of advantage in term of internet service or upcoming 3G service.Idea should come up with new service for new segment of customers, try to focus on urban market whichis again found out to be best alternative from the QSPM analysis.

Idea Cellular is considered as rural market leader but theydo not have good market share in urban area. They have 70 % market share in rural area and 32% market share in urban area.

IDEA Cellular

IDEA Cellular
Importance of understanding competition:
When a company positions its product in the market, it tries to position its brand uniquely amongother brands present in the market. Therefore it is critical to understand the strengths,weaknesses, opportunities and threats of each of those competitors along with the industrystructure itself. This knowledge is important because its the competition that helps us to own theunique benefit in our customers mind that our competitors have not addressed and cannot easilyaddress in the future.

Rational behind identifying the competitors:

Analyzing the competitors is an essential component of corporate strategy. Knowing about thecompetitors and their profile will help the concerned organization in knowing its weaknesses thatit may exploit. A detailed profile of the competitors, helps an organization in getting an in depthdescription of the competitors background, its unique selling proposition, financial condition, itsstrategies, the products and the market share.

IDEA Cellular

Analysis of CPM and IFE:

IDEA Cellular
With the analysis of the competitive profile matrix (CPM) we can conclude that the companysstrategy in the Nature care segment is better than that of their existing and latent competitors, onthe other hand the company has to adopt new strategy to strengthen their position in the healthcare segment. As the analysis of internal factor evaluation (IFE) we can say that the companysstrategy is aligned with the strength and weakness of their organization.We have also recognized how the study of internal factor and competition will help indetermining the strategy for the organization.

TOWS MATRIX
The TOWS matrix is an important matching tool that helps in developing four types of strategies; 1. SO strategies use a firms internal strengths to take advantage of externalopportunities. 2. WO strategies are aimed at improving internal weaknesses by taking advantage of external opportunities. 3. ST strategies use a firms strengths to avoid or reduce the impact of external threats. 4. WT strategies are defensive tactics directed at reducing internal weaknesses andavoiding external threats. After analyzing the SWOT analysis of Idea cellular which has been done in the previous reportthe tows matrix can be constructed as follows: SO strategies: Under Strength and opportunity strategy the company should penetrate the ruralmarket as the number of mobile users in rural India is increasing at a fast rate, we can say it is becoming very close to urban consumers. As the organizations carries a good brand reputation of Aditya Birla Group, and being the first organization to launch GPRS service, it should penetratethe rural market and offer other value added services like GPRS at affordable prices. Brand promotion is required in this

IDEA Cellular
perspective. The advertisements of Idea cellular give a touch of Indian villages, it therefore can become successful in gaining a large pool of customers, but it hasto maintain superior digital clarity that too at an affordable prices. WO Strategies: This strategy is a tool by which we can understand the weaknesses and comparethem with the opportunities we have in hand, and making an effort to see how weaknesses can beutilized in maximizing the available opportunities.Earlier the firm was targeting the consumers of Northern India only. In its recent expansion planit has slowly capture the other parts of India as well, but it has not been able to provide somevalue added services like Direct to home and mobile broadband service like Tata and Reliance.The reason behind providing these value added services is that it gives a unique strength to thefirm and a kind of diversification. The result is broadening of services and capability of jumpinginto other related services which can be very securely connected with mobile services. ST Strategies: Looking at the strength of the firm the firm carries a brand name and the marketshare of the company is increasing in other parts of India as well including north and western parts of India. The companys promotional strategies are also proving beneficial. The recentadvertisements have proved successful in executing the brand communication to the consumers.But the threats cannot be ignored and these have to be very carefully analyzed so that the threatscan be minimized into strengths. Poor infrastructure and not upgrading the technology whenever the need arises is a big threat and it has to be minimized to the maximum extent possible.Sometimes poor execution of promotional activities can also damage the reputation of the firms.The care has to be taken as to what technology is most suitable, with whom the firm should tie

IDEA Cellular

The Entire Telecom Industry is growing at a rate of 35% as compared to the base year 2006-07.This can be termed as a moderately growing Industry and it is expected to grow in the comingyears. Also as per the latest report of TRAI, an apex body regulating telecom affairs, the number of mobile subscribers has touched 50 crore. Bharti Airtel is the market leader with 32% share for long time but now they are losing their market share. Idea Cellular Limited has a share of 22% inthe total GSM telecom market in India (as on July09) and it is growing at 18% annually.Presently its operations exist in 11 service areas, having a customer base of 24 million

IDEA Cellular
coveringmore than 60 % of the total Indian telecom population. (Capitaline, 2009) Currently Idea cellular has its corporate office in Mumbai, and a registered office in Gujarat. Its circle offices arelocated in 17 states. Presently it has partnership agreements with some renowned organizationssuch as, Cellebrum India Pvt. Ltd., and NDTV for VAS (value added services), and for roamingBharti Telesoft, for marketing communication it has tied up with Lowe India Pvt. Ltd. and for network, Nokia and Ericson are its biggest partners. (Bureau E. , 2009). So it comes under star. Internal-External (IE) Matrix The IE matrix is the strategic tool used to analyze the working condition and the strategic position of the business. The IE matrix includes both the internal as well as the external factorswhich will affect the business, based on the scores of internal factor evaluation (IFE) andexternal factor evaluation (EFE) we determine the companys position in the Matrix. The matrixis being divided into nine grids and the relative position of the company in the grid will explaintheir strategy. The company lies in the position of strong so it lies in the strong grid of the IEmatrix so the company has to grow and build which suggests that the company should go for intense and aggressive tactical strategies like market penetration, market development or productdevelopment. The company can also consider the alternative of backward, forward or horizontalintegration.

IDEA Cellular

Strategy in Global Context For Idea Cellular Ltd. Grow Idea AndBuildHoldAndMaintainHarvestOrDivest Quantitative Strategy Planning Matrix (QSPM) The QSPM is a strategic planning approach for evaluating the possible set of strategies, this act as ananalytical tool to for the comparison of the alternative strategies. In the given case we are consideringfollowing three alternative strategies for Idea this includes: -1.

Strategic Alternative 1: Can go for backward integration such as Vodafone acquireHutch to increase market share or forward like acquire distributers2.

IDEA Cellular
Strategic Alternative 2: Can go for marketing penetration: Target the urban segment;launch a new service with same brand name like Tata Docomo has done Billing per pulse rate , provide more high end services like GPRS, mobile internet services and providegood customer service

Strategic Alternative 3: Can go for the horizontal integration activities i.e. Airtel hasgone for Dish TV, Reliance has gone for Big TV Evaluating the above mentioned strategies with assigned weight to the strength, weakness,opportunities and threats present in front of the company, and we have figure out that thestrategic alternative 2 i.e. Target the urban segment; launch a new service with same brand name.Like Tata Docomo has done, Provide more high end services like GPRS, mobile internet services and provide good customer service. This strategy has the attractiveness score of 6.22.

Plan for next three years

The company is having high operating cost i.e. the company is not utilizing its recourses properly, since by the Internal-External (IE) matrix the company falls in the grid of Grow and Build which also suggeststhat the company can go intense and aggressive strategy of market penetration or the alternative of goingfor the vertical integration. According to the QSPM analysis as well the alternative for going for thevertical integration was the most attractive one. The company should also come up with new service likeTata Docomo has come up Billing per pulse rate in order to increase the market share. In the BCGmatrix Idea Cellular falls in the Stars category. Idea Cellular should also try to acquire or tie up withother companies such as Vodafone and Hutch and Airtel and MTN tried to tie-up in order to catch up withthe competition and the growth of the industry. They acquired spice in past and they have tie-up withEricson but they do not have any type of advantage in term of internet

IDEA Cellular
service or upcoming 3G service.Idea should come up with new service for new segment of customers, try to focus on urban market whichis again found out to be best alternative from the QSPM analysis.

IDEA Cellular

IDEA Cellular

METHODOLOGY

IDEA Cellular

The purpose of methodology is to describe the processinvolved in research work. This includes the overall researchdesign, data collection method, the field survey and theanalysis of data.For our project we did a small survey based on around 100 people in the BIMTECH, Ansal Plaza, GIP mall and fewmore friends and relatives at different places ranging fromage group of 15 to 30 yrs

IDEA Cellular

QUESTIONARY DATA ANALYSIS

IDEA Cellular

Q:1 ) Have you heard about the Idea cellular Ltd.? A) yes B) No Interpretation: Most of the people are aware of the IdeaCellular Ltd. Q: 2 .) From whom you come to know about this? A) Family B) Colleague C) FriendsD) AdvertisementInterpretation: Advertisement plays an important role tospread the awareness and other mediums also contribute. Q:3 ) Any time you used the service A) Always B) Most of the timeC) Sometimes D) Not at all INTERPRETATION: Awareness about the idea is good but still it isnot able to create the credibility for the brand in market. This is thereason they have less no. of customers. Q:4 ) Did you like the services? A) Highly Satisfied B) Satisfied C) Neither satisfied nor dissatisfied D) Dissatisfied E) Highly dissatisfied INTERPRETATION: Subscriber are not that much satisfied withthe coverage of Idea. Q5) Have you seen the advertisements of Idea Cellular ?A) Yes B) Q:6) How would you rate that advertisement A) Very good B.) Good C.) Neither good nor bad D.) BadE.) Very Bad INTERPRETATION: People like the advertisement very much, eventhey are able to recall the captions like walk when you talk, ek idea jo badal de apki duniya Q:7 ) Where did you see/hear its advertisement ? A) Television B) Radio C) InternetD) Print Media INTERPRETATION: Almost everyone has seen itsadvertisement on Television and its presence on internet isvery less. Q:8 ) Did you think that it was effective enough tocommunicate the message? A.) yes B.) No

IDEA Cellular
INTERPRETATION: They are able to communicate themessage but still they are less effective as compared toAirtel, Vodafone. Q:9 ) Rate the features which you give the most priorty whileselecting the Mobile Network. INTERPRETATION: Network is the key decision maker whichinfluence people while buying a new mobile network

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FINDINGS AND SUGGESTIONS

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People are known to the IDEA CELLULAR LTD. and itsservices but still 37% of the people use Airtel , 32% use Vodafone , 19% use reliance , around 10% use idea and 2% use virgin People are aware with the services i.e. marketing communication is good. 50% of the people, even after being aware of the brand, have never used idea cellular services. Subscriber are not very much satisfied with the service. So, there is a needto improve the coverage in terms of area as well as network. Most of the subscriber suggested that the advertisement was goodenough to communicate the message but what matters at the end isthe service provided by idea . So, there is a need to improve thecoverage and connectivity of Idea .And other suggestion which was given by the subscribers was thatthey liked Abhishek Bacchan more as the Brand Ambassador for IDEA.

IDEA Cellular

RECOMMENDATIONS

Should enhance its distributionsystem. Should increase its coverage area. Should become more customer-friendly. Should plan to grow its market share.

IDEA Cellular

LIMITATIONS

IDEA Cellular

Despite the possible efforts in conducting the research, there were some unavoidable situations, which limited the scope of the project. Considering the population, the sample taken for present study seems fake (means some of the address chosen for the collection of the data were fake ) and hence further new channel partner has to be found out. Some of the channel partners were non-cooperative in giving information. Time available for research was very short so certain aspects have been overlooked. Dealers were hesitant to provide the complete information due to fear of misuse of information. Respondents may sometimes misinterpret the questions, leading to a different answer

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CONCLUSION

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why IDEA "Attracting and nurturing talent has become the single most dominant force in business."Idea cellular recognizes human resources as a backbone for its long-term success.We aim to be the best employer, attracting and retaining the best employees. Our people are our greatest resource as they are our biggest differentiator. We thereforehire the best professionals brimming with ideas and develop them for futureleadership positions.!dea is all about participation and involvement - seek opportunities, give opinionsand always speak your mind. And finally make a difference within the company.We have focussed on conserving the best aspects of our unique culture and on perpetuating what attracts people to join, and remain, at iDEA Communication strategy of idea is very good because most of the people are well known to the service by idea .Being newto telecom industry, people are not confident to go for it. Also,competitors of idea are very much powerful in communicatingas well as providing the service. And one thing which is focused is that the Brand Ambassador also plays an impotant role in catching the attention of thecustomer because most of the people reported that they likedAbhishek Bacchan more than Sariya Saran.

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REFERENCES

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Idea

Journey(n.d.).

Retrieved

September

02,

2009,

from

Idea

Cellular:http://www.ideacellular.com/ShowBinary/BEA%20Repository/idea/Investor Presentation/InvestorPresentationQ1FY10.pdf Some gap in Idea market opportunity (2008, July 10). Retrieved August 29, 2009, from TheFinancial

Express:http://www.financialexpress.com/printer/news/333489/Anto Antony & Durba Ghosh, E. B. (2008, December 20). Telecom beats slowdown bluescontribute big to GDP growth . Retrieved August 31, 2009, from The Economic

Times:http://economictimes.indiatimes.com/articleshow/3864667.cms Budget . (n.d.). Retrieved August 30, 2009, from India

Budget:http://indiabudget.nic.in/Bureau, E. (2009, august 25). Features . Retrieved 09 01, 2009, from The Economic

Times:http://economictimes.indiatimes.com/articleshow/4930919.cms Conclusion As a conclusion of this report we figure out that the companys strategy to t arget the rural segment;launch a new service with same brand name like Tata Docomo has done, provide fast GPRS, mobileinternet services and provide good customer service which is having the attractiveness score of 6.22

IDEA Cellular

BIBLIOGRAPHY

IDEA Cellular There was immense need and flow of the information while conducting the analysis as well as while writing the report, which was gathered through various sources as mentioned below: Internet www.tata.com Company profile Introduction of the co. & know how about their products & services that they offer in market. Products and services & its history www.google.com It used for searching information about different automobile manufacturing companies JOURNALS1. Products

manuals of Tata2.Sales module of Tata www.wikipedia.com www.scrib.com