2013

MTS

CUSTOMER LIFECYCLE MANAGEMENT

Sumit Kalra | IBS BANGALORE

A REPORT ON CUSTOMER LIFECYCLE MANAGEMENT

BY:-SUMIT KALRA ENROL. NO.:-12BSP1683

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A REPORT ON CUSTOMER LIFECYCLE MANAGEMENT

BY Sumit Kalra (12BSP1683)

MTS

A report submitted in the partial fulfillment of the requirements of PGPM Program of IBS Bangalore

Date of submission:-

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AUTHORIZATION DECLARATION

I hereby declare that all the work shown in my project is true to my knowledge and belief, and the project has been completed at MTS, DELHI circle.

I have prepared this project, on the basis of my understanding of the subject matter, and have not copied it from any source. This project and the research study undertaken was conducted over a span of 3 months from MARCH 12th 2013 to 31st May 2013, under the guidance of my company and faculty guide. This project is a result of my extensive research, hard work, commitment and sincerity to my work.

This project is meant for a partial fulfilment of the MBA program of IBS Bangalore Business School. All the information used in the project is confidential in nature and is restricted to use for the purpose of project work only.

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ACKNOWLEDGEMENT

Armed with only theoretical expertise in hand, the Summer Internship Project in one of the well established Company in India MTS was a wonderful learning experience. The success of the project depends on the encouragement and several others who motivated me. I take this opportunity to express my gratitude to all those who have been instrumental in the completion of this project. I express my sincere gratitude to Company Guide Mr. Pranay Handa (Product manager U&R, Marketing dept.) who gave me this golden opportunity to work in the organization and took special interest for the success of the project. I would like to thank him for his valuable time, advice, and guidance, which enabled this report to occur. I would also like to thanks Mr. Debajyoti Mal (Marketing Head, MTS Delhi Circle) who provided me with such great opportunity to work and learn with MTS. I would like to express my gratitude towards members of MTS for their kind cooperation and encouragement which helped me in completion of this project. I am also thankful to Mr R Harish (Faculty Guide, IBS Bangalore) for his continuous support throughout my training period.

Mr. R Harish Dean (Academics) Faculty Guide

Mr. Pranay Handa Specialist, Voice (U&R) Project Guide

Mr. Debajyoti Mal Head Marketing MTS Delhi

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Table of Contents
EXECUTIVE SUMMARY .................................................................................................................................. 7 BACKGROUND ............................................................................................................................................. 10 Sistema Shyam TeleServices Ltd. ....................................................................................................... 10 BACKGROUND OF THE INDUSTRY AND FUTURE PROSPECTS ................................................... 11 Data uptake in India is low by global standards ..................................................................................... 14 Low Internet/ broadband penetration ...................................................................................................... 15 Need and significance of the project .......................................................................................................... 20 OBJECTIVE:- ............................................................................................................................................. 20 METHODOLOGY ...................................................................................................................................... 21 LIMITATIONS OF THE PROJECT ............................................................................................................... 22 Customer Lifecycle Management ............................................................................................................... 22 Literature behind CLM ............................................................................................................................ 26 Customer Lifecycle Management Through Retailers.................................................................................. 34 Literature Behind CLM through Retailers ............................................................................................... 34 METHODOLOGY ...................................................................................................................................... 35 Retail CLM Process .................................................................................................................................. 36 Analysis ................................................................................................................................................... 40 BR Interview (Main Issues and Feedback) ............................................................................................. 41 MARKET SURVEY ......................................................................................................................................... 46 COMPETITIVE MAPPING ............................................................................................................................. 51 TARIFF RATES ANALYSIS (DATA) .................................................................................................. 55 Prepaid analysis ...................................................................................................................................... 56 REFERENCES ........................................................................................................................................... 57

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EXECUTIVE SUMMARY
ORGANISATION DESCRIPTION COMPANY NAME- MTS ADDRESS- A-194 Okhla Industrial Area, New Delhi WORK- Providing Telecom services I did my summer internship program here from 12th March to 31st May 2013 and was placed in the marketing department of MTS. TITLE OF THE PROJECTCustomer Lifecycle management OBJECTIVE: The purpose of the project Customer Lifecycle management is to understand the perceptions of customers towards different offers and their satisfaction with the services offered by MTS in particular and to segment the customers according to their usage so as to target them. The project comprises of studying the market potential of MTS with respect to other operators and also the plans provided by MTS in comparison to other operators. This will ultimately help me in finding out the untapped markets and how to exploit it to the fullest and to the advantage of the company. The major part of the project deals with as to how to communicate effectively in the already cluttered telecom market and help the company to extract revenue from the target customer.

The Purpose of the project studying Customer lifecycle management through Retailers is to understand the perceptions of Branded retailers (BRs) towards different offers and satisfy them with different offers by studying their behavior. This would help us in generating extra revenue for the company as well as the Branded Retailers (BRs).

The Project involves studying the BRs issues and their perception towards different offers. The project requires to be in constant touch with the BRs to bring out maximum sale of the offers to the customers

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FINDINGS AND CONCLUSIONS

Customer lifecycle management (Voice) This project helped me to understand the segmentation process being used by the company MTS or more generally being used in the telecom sector. It also helped me to understand how different offers are being provided to different customers according to their ARPU, Age on network, Maximum denomination etc. It helped me to get customer insights by visiting various markets which also helped me to understand the position of MTS in the market as well as that of its competitors also. Findings The low tariff rates offered by MTS give it an edge over the competitors. The presence of MTS in CDMA only act as an hindrance in the sale of MTS sims as CDMA sims work only in particular CDMA phones only but the GSM sims can work in most of the handsets.

Retail BR-CLM This project gave me an opportunity to understand the concept of Branded retail (BR) stores. Our goals were: To make the BRs aware about the importance of Retail CLM for BRs as well as the company. To understand the issues faced by the BRs. Increase the CLM tried percentage by the BRs.

Findings The major issue faced by the BRs was of customer care and network coverage. BRs were satisfied with the commission structure and the commission paid to them by the company. Conclusion During this project the Retail CLM tried percentage reached the stipulated mark and most of the issues of the BRs were either resolved or were conveyed to the respected authorities for proper action.

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BACKGROUND

Company / Business unit Profile:

COMPANY NAME- MTS ADDRESS- A-194 Okhla Industrial Area, New Delhi WORK- Providing Telecom services DEPARTMENT: Marketing BUSINESS UNIT: Usage and Revenue (U & R) Sistema Shyam TeleServices Ltd. (SSTL) is a venture, involving equity participation by Sistema Joint Stock Financial Corporation of Russia (SISTEMA JSFC), the Russian Federation and the Shyam Group of India. Sistema JSFC is the majority shareholder in the Company. MTS India is an Indian subdivision of Russian Mobile Tele Systems Telecommunication Company headquartered in New Delhi, India. It provides wireless voice, broadband Internet, messaging and data services in India. MTS India is a subsidiary of Russian

conglomerate Sistema and operates across India with over 16 million customers. SSTL is credited to have introduced a number of innovations in the Indian telecom industry. The Company is the pioneer of Half Paisa per Second Calling in the country. SSTL is also the first telecom operator in the country to launch prepaid High Speed Mobile Broadband. It was the first telecom operator to launch High Speed mobile broadband in Jharkhand and Sikkim. SSTL has been focused on creating a strong portfolio of devices catering to customers across various segments .The company has taken mobile broadband to another level with the launch of HSD services on National Highways.

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BACKGROUND OF THE INDUSTRY AND FUTURE PROSPECTS

The table below shows how the telecom industry via both the wire line as well as the wireless has shown a tremendous growth over the past few years. Table 1:-Growth of telephone over the years (In millions)

(Table 1) Source: www.dot.gov.in

Changes in structure of composition of Telecom Sector Wire line vs. Wireless The growth of wireless services has been substantial, with wireless subscribers growing at a compounded annual growth rate (CAGR) of 57.1% since 2004. Wireless has overtaken wire lines. The share of wireless phones has increased from 46.54% in 2004 to 95.54% in December, 2010.

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Source: www.dot.gov.in (Figure 1) After years of splendid growth, wireless subscriber base shrunk by 7.7 percent during June 2012January 2013, primarily due to removal of inactive subscribers. Active subscribers continued to grow modestly at 1.8 percent over June 2012 - January 2013 period but nowhere close to the growth of 11 percent recorded during the same period a year ago. Industry estimate expects total subscriber base will continue to slide in FY14 and recover mildly in FY15. Active subscribers will continue to grow though at much lesser pace than their historical average. One of the biggest inhibitors for growth of VAS industry is inverted revenue-share model where telecom operators keep 60-70 percent of VAS revenue, which needs to be reversed. After reduction in 3G tariffs by 70-80 percent in May 2012, the traffic has gone up exponentially. Partial roll-out of 3G has been one of the key reasons for poor adoption as 3G BTS deployment is just 12 percent of total. FY12 saw the continuance of growth for the Indian telecom market, which witnessed a 12% year on year increase in its subscriber base during the 12-month period. At the end of March 2012, the countrys total telecom subscriber base (fixed plus mobile) stood at about 951 m.

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Source: - Care research report (Figure:-2) Growth remained robust in the GSM mobile space. GSM added 115 m subscribers during the year. After a robust 46% year on year increase in subscriptions during FY11, the growth in GSM industry has slowed down to 17% year on year in FY12. The year saw the apex court of the country cancelling the disputed 2G licenses that were issued in 2008. The cancellation caused the exit of Etisalat and Batelco from the sector During FY12, India's mobile subscriber base grew by 13% year on year, from 812 m to 919 m, while the fixed subscriber base declined by about 7%, from 34.73 m to about 32.71 m. Trend in Teledensity Teledensity is an important indicator of telecom penetration in the country. There has been phenomenal spurt in the growth of teledensity in the country with the evolution of new wireless technologies. The tele-density level stood at about 76% by the end of the fiscal.

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Source: www.dot.gov.in (Figure 3)

DATA SEGMENT The data/broadband story in India has always remained just a nice story. While the telecom industry in the rest of the world obtains 35-50% revenues from non-voice services, India derives only 18% of sales from non-voice/ data services. We see a number of key factors of the data supply chain falling in place and believe India is on the verge of a data revolution. Data growth could help offset the slowdown in voice revenues for the industry, by adding 500 bps to revenue CAGR over the next three years.

Figure 4: Expect data to thrive over half of incremental revenues over next three years.

Data uptake in India is low by global standards

Globally, the telecom industry obtains only 50-65% of its revenue from plain voice services. The rest of revenue (35-50%) comes from non-voice services (SMS, retail and corporate data, Internet, VAS etc.). As seen in the Figure 10 below, this is true even of EMs like China and Malaysia. However, India seems an outlier with less than 18% of telecom industry revenues coming from non-voice services. This manifests in the form of low Internet/ broadband penetration.

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We believe this is an unsustainable position, and data revenues should start picking up, taking India closer to world average especially given the recent launch of 3G services in the country.

Figure 5: Data contribution to Indian Telecom Industry revenues is unsustainably low

Source: Company data, Credit Suisse estimates

Low Internet/ broadband penetration Unlike the rapid uptake in mobile voice telephony by India in recent years (penetration 68%), the broadband industry remains a poor cousin of its mobile voice counterpart. Internet penetration is struggling to even reach 10% a third of the world average of 29%.In fact given its size India is actually helping pull down the world average by around 400 bps.

Figure 6 : Internet penetration in India is far behind the world average

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Source: Company data, Credit Suisse estimates

Potential for Further Growth Figure 7:-outlook of telecom sector

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According to the industry estimates the voice and data tariffs will need to be rationalised in 2013 to sustain the telecom industry. Operators will leverage on innovative pricing strategies and launch new tariff plans to position themselves competitively in the industry. Voice and text revenues are declining or becoming stagnant but operating costs are increasing exponentially. An increasing number of operators and the implementation of regulatory policies like mobile number portability lead to increased churn rates. The likely, loss of almost 10% of revenues from loss of intercircle roaming charges will further hit the operators in 2013. Competitive pressure and price wars are forcing operators to reassess the pricing of voice and data services. Although consumers are signing up for mobile broadband in record numbers, often encouraged by flat-rate pricing, networks are becoming congested and are either running slowly or denying access entirely. Data traffic is not translating into equivalent increase in average revenue per MB. Also, the quality of service has gone down in order to comply with the new EMF radiation norms. Poor quality of service translates into poor user experience. Unhappy customers are voicing their displeasure but seem unwilling to pay more to improve service. There is a strong need for more rational pricing, especially in the mobile market. Firstly, this is forcing operators to move away from unlimited plans and promotional offers. Secondly, this is pressing them to consider an increase in the tariffs in urban areas to compensate for the rural operations47. However, Industry estimates expects that the tariff hike will be gradual in 2013 - either in the form of removing discounts or increasing tariffs nominally, so as to prevent a sudden drop in volumes due to a significant hike48.This trend has already begun with many operators discontinuing the promotional offers and freebies49.They are gradually increasing the voice and SMS tariffs of both, prepaid and postpaid plans, to support network infrastructure upgrades. The consensus view on global data pricing has been that the only way to attract subscribers is to offer unmetered data. Moreover, the consensus also suggests that once made, the offer of unmetered data pricing can never be withdrawn without enormous customer backlash50.However, Deloitte predicts that in 2013 network operators in India both wireless and wire line are likely to stay away from unlimited data pricing plans and become stricter towards fair usage policies.

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Specifically, power users will almost certainly be billed for how much data they use, and may be even charged for when they use it and also what kind of data is being used. Moving away from unlimited is only the first step a key question is what kind of metering will work best. Should charges be similar to utilities such as water or electricity? On the other hand, a pure metered pay per byte used could dramatically reduce revenues for carriers. Many service providers offer tiered service, with various caps on total bits used in a billing period. But, once these caps are exceeded, each additional bit can be prohibitively expensive or the speed is likely to be drastically reduced to few kbps. These coverage charges may make sense from the carriers perspective as they create an incentive for the consumer to opt for more expensive plans. However, it leads to unhappy customers either due to bill shock or due to poor user experience after the capped usage. In order to stop the subscriber loss and to grow market share, Deloitte predicts that in 2013 operators will be leveraging on innovative pricing strategies to position themselves effectively against their competition. For example, recently an operator had launched a unique All Share Postpaid Plan, which allows up to 10 members within a family or group to enjoy free sharing of voice, data and SMS on a single bill51. Having one contract, stops users from picking different tariff plans from different operators and also helps providers to acquire and manage a single account instead of separate subscriptions, eventually reducing subscriber acquisition and management costs. Also to develop targeted services and tariff plans, operators will increasingly leverage on the customer analytics, which provides a more detailed view of the customers usage patterns, leading to new revenue sources. Continuous innovation in the telecom sector has enabled operators to provide telecom service to people at lowest tariff rates. Operators have been continuously reducing CAPEX and OPEX through innovative business models (outsourcing core network operations and network sharing) and marketing service offerings (per second billing, bundling offers, micro-prepaid).

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Figure 8

Figure 9

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Need and significance of the project

OBJECTIVE:The purpose of the project Customer Lifecycle management is to understand the perceptions of customers towards different offers and their satisfaction with the services offered by MTS in particular and to segment the customers according to their usage so as to target them. The project comprises of studying the market potential of MTS with respect to other operators and also the plans provided by MTS in comparison to other operators. This will ultimately help me in finding out the untapped markets and how to exploit it to the fullest and to the advantage of the company. The major part of the project deals with as to how to communicate effectively in the already cluttered telecom market and help the company to extract revenue from the target customer.

The Purpose of the project studying Customer lifecycle management through Retailers is to understand the perceptions of Branded retailers (BRs) towards different offers and satisfy them with different offers by studying their behaviour. This would help us in generating extra revenue for the company as well as the Branded Retailers (BRs). The Project involves studying the BRs issues and their perception towards different offers. The project requires to be in constant touch with the BRs to bring out maximum sale of the offers to the customers

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 The Purpose of the project Competitive Mapping is needed to understand where MTS stands among the major players in the market. The changes if any from other players will help in differentiating it with their features and can be used to make a strong hold in the market. The Project involves gathering data of different companies through market visits and some secondary data will also be used. The comparison of different products will help us in making changes to our current portfolio and help us to serve the customer in a better manner.

METHODOLOGY
Conducting marketing surveys Market surveys were conducted so as to know about the various schemes offered by our competitors in the market. Interviewing customers as well as retailers to get useful insights into the customer behavior. Customer feedback is most important to a company because it lets the company to focus efforts on understanding the needs of the customers, meeting or exceeding those needs which will help company get the benefits of customers future patronage and that of many new customers.. Analyzing the data about the customers and segmenting the customers into various homogeneous groups. The customers or the subscribers of the company are segmented into various homogeneous groups according to various criterias for example according to Age on network. Segmentation is basically done to study the behaviour of the various homogeneous groups which show same characteristics so that specific offers can be provided to the customers according to their requirements. Designing offers to the customers according to their usage so as to increase the usage by the customers and ultimately revenue of the company.
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In telecom industry after acquiring the customer and segmenting them according to various criterias like ARPU,FAVORITE LEG etc, offers are provided to the customers which suits their needs and help to realize revenue for the company, that is customized offers are provided to the customers which benefit both the customers and the company.

LIMITATIONS OF THE PROJECT

All the information about the customer behaviour cannot be collected accurately. The behaviour or pattern of customer usage may change over time. The data collected from customers for a particular area may not be applicable to the customers of other areas The scope of the project is only limited to the Delhi circle of the company. Performance measurement is done on the basis of facts provided by the retailers and websites only. Inadequacy of data maybe another problem, in such a situation actual data may be substituted with estimated data on certain assumptions. There may be judge mental error.

Customer Lifecycle Management

Generally Customer Lifecycle Management, or CLM is the measurement of multiple customer related metrics, which, when analyzed for a period of time, indicate performance of a business. Key idea behind CLM is managing the customer lifecycles to maximize customer retention and profitability rates. CLM is often misunderstood to be the same principle idea as CRM.CLM however has a key difference from CRM-the added factor of time .A brief definition of CLM can be the measurement of the success of the companys CRM program

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In the past, operators looked to the quality of the network, then later to products and services to provide the necessary market differentiation. The result is that, although today's telecoms customers now have a huge choice of high quality services and products, paradoxically they see little difference between the offerings of each operator. They do not know the products and they feel a lack of customer service. Today's telecoms customers are very demanding. With so many competing operators offering similar services and products, combined with number portability and handset subsidies, they have little loyalty and will churn at the earliest opportunity to get a new handset or slightly better tariff. Heightened competition and overcapacity are pushing down prices for telecom carriers, putting higher pressure on margins and profitability. To address this multitude of challenges, telecom leaders need to focus on core performance, understand customer segments, and develop sustainable business strategies. Research has shown that improving the customer experience, i.e. how a customer feels about the way they are approached by a company, has a significant, positive impact on revenues and longterm customer value. The customer life cycle is a term used to describe the progression of steps a customer goes through when considering, purchasing, using, and maintaining loyalty to a product or service. The customer life cycle can be broken into seven distinct steps: reach, acquisition, hand holding, customer maintenance, fulfillment services, service enablers and retention. In layman's terms, this means getting a potential customer's attention, teaching them what you have to offer, turning them into a paying customer, and then keeping them as a loyal customer whose satisfaction with the product or service urges other customers to join the cycle.

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Reach

Customer Retention

Customer Acquistion

Service Enablers

Hand Holding

Fullfiment Services

Customer Maintenaince

Reach: It is to draw a potential customers attention by introducing our product to them. Customer Acquisition: Customer Acquisition is the process of identifying and attracting potentially profitable customers. The customer contacts the CSR (Customer Service Representative) and the CSR engages the customer with the various products and services offers by selling them to the customer. A customer who is purchasing the products & services needs to be activated in the system and for this various details about the customer are required:

The customer may have to fill up an application form providing personal detail. Validate the identity of the customer in order to prevent fraud. Service Provider need to carry out a credit check on the customer and assign appropriate credit class based on credit history and monthly income tec.

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Offer appropriate products which are provisioned at the network to provide the service.

Hand Holding/On boarding: Refers to the mechanism through which new customers acquire the necessary knowledge, skills, and behaviors to become aware of the products, features of the products and services offered. Customer Maintenance: Once the customer is acquired, it is required to manage and retain the customer which involves:

Interacting & communicating with the customer for sales and collection activities. These interactions can be recorded in different formats like Notes, voice recordings etc., This data can be used to analyze the behavior of the customer and helps the service provider to better services in order to retain the customer

Handling trouble tickets raised by the customer against any problem they face with the network or invoice etc. This data can also be used to analyze the behavior of the customer and helps the service provider for the betterment of the services in order to retain the customer.

Handling any bill disputes and adjustments rose in between the customer and service provider.

Query Management is also taken care under it.

Fulfillment Services:

Customer usage is collected from the network and then it is rated based on the defined rate plans and billed to apply product rentals and required discounts, adjustments etc.

Once a bill is generated, it is delivered to the end customer demanding for the revenue against the services provided.

Customer makes the payments against the received invoices.

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Back office supports in fulfillment of services also takes care of transaction processing.

Service Enablers: Segmentation: Market segmentation is a concept and a process well known and largely used worldwide, in most business environments. It is basically a process of grouping customers into homogenous groups in order to optimize the use of resources and increase efficiency, be it in terms of product adoption, communication and branding, distribution or pricing.

Retention: It costs significantly less to retain an existing customer than to attract a new one. Sound Telecom develops proven Customer Retention Programs that involve personal calls to existing customers to remind them of the benefits your company provides and prevent them from leaving. Your customers will appreciate the effort and youll retain their business.

Literature behind CLM

My project CLM (VOICE) aims to understand the customer behavior so as to increase the revenue of the company. The Project includes the following: Customer on boarding Customer handholding Micro segmentation Customized offerings Usage and revenue enhancements
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Customer Onboarding

Customer on boarding includes all steps from Customer acquisition to building trust and customer loyalty early in the relationship.

Customer Handholdind

Customer handholding is providing very close support,showing a customer for example,exactly what to do, step by step as opposed to giving them general guidelines and letting them make the decisions.

Micro segmentation

The customers or the subscribers of the company are segmented into various homogeneous groups according to various criterias for example according to Age on network

Customized Offering

provide customized offers to the customer. In telecom industry after acquiring the customer and segmenting them according to various criterias like ARPU,FAVORITE LEG etc,offers are provided to the customers which suits their needs and help to realize revenue for the company

U&R Enhancement

After acquiring customers and segmenting them according to various criterias, Customized offerings are provided to the customers which are beneficial to the customers as well as the company.

Customer on boarding Customer on boarding includes all steps from Customer acquisition to building trust and customer loyalty early in the relationship. MTS customer acquisition model includes following phases:1. Preparation In this phase the product and services to be offered are determined or decided and the difference between our services and the competitors services is determined. Next the proper ways to communicate the products and services is decided along with whom to target 2. Evaluation This phase is about KNOWING OUR CUSTOMERS Here aim is to gain confidence of customer and understanding competition 27 | P a g e

 Also understanding what creates value for the customer

3. Presentation Here we try to provide information about our product and company to the customer so that the customer can decide what product or service to buy. Care is also taken to ensure that the solution s to the problems of the buyer is also given.

Customer handholding Customer handholding is providing very close support, showing a customer for example, exactly what to do, step by step as opposed to giving them general guidelines and letting them make the decisions. In Telecom and other industries also the first 90 days of the customer lifecycle are considered crucial for building for building a good and long lasting relationship with the customer. MTS provides customer handholding to the customers who are in the early stage of relationship that is whose AGE ON NETWORK is less than 90 days. Special offers are provided to these customers or special care is taken of them as these customers qualify for BABY CARE (as called in MTS) MICRO SEGMENTATION The customers or the subscribers of the company are segmented into various homogeneous groups according to various criterias for example according to Age on network. Segmentation is basically done to study the behavior of the various homogeneous groups which show same characteristics so that specific offers can be provided to the customers according to their requirements.

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In MTS segmentation of the customers is done according to the following criterias:ARPU (average revenue per user) Customers are segmented according to the average revenue generated from each customer or subscriber which are Fringe Mass High usage

Age on network (AON) AON for a customer is the duration (in days) since customer has joined the network Favorite Leg Customers are segmented according to their calling patterns. For example some people mostly make local calls, some STD etc.

CUSTOMIZED OFFERINGS Telecommunications companies are perfectly positioned to learn about their customers because these customers provide personal information every day. Telecoms are at the center of their customers digital universe. No other industry has access to the wealth of digital information about their customers on a daily basis. What websites they visit, what topics they search for, who they call, what apps they download all this information is being passed across the telecommunications network and can be analyzed and evaluated to determine a customers preferences .Apart from this the information about the customer calling pattern also helps to provide customized offers to the customer. In telecom industry after acquiring the customer and segmenting them according to various criterias like ARPU,FAVORITE LEG etc, offers are provided to the customers which suits their needs and help to realize revenue for the company, that is customized offers are provided to the customers which benefit both the customers and the company.
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USAGE AND REVENUE ENHANCEMENT After acquiring customers and segmenting them according to various criterias, Customized offerings are provided to the customers which are beneficial to the customers as well as the company. The offers are provided to the customers such that the usage of the customer is increased leading to the increase in the revenue for the company. Providing offers to the customers helps to retain customers hence decreasing the churn rate providing a strong customer or subscriber base to the company which helps to drive the revenue for the company.

A sample grid showing how the segmentation is being done in case of voice in MTS: Figure8a
Acquisition and Baby Care AON AON < 30 days AON > 30 days Max Deno On-net All <20 21-50 51-97 98-144 144+ 40 pe 40 85 99 149 297 85 109 145 500/199 off-net 50 pe 70 40 pe 40 40 pe 40 85 109 145 500/98 40 pe 40 85 109 145 500/98 Fav Leg STD Balanced

Figure 8b
Active Healthy Marginal Max Deno On-net <20 21-50 51+ 30 | P a g e 50 Pe 50 75 85 off-net 50 Pe 50 85 85 Fav Leg STD 50 Pe 50 85 85 Balanced 50 Pe 50 85 85

Figure 8c
Active Healthy Fringe Max Deno On-net <20 21-50 51-97 97+ 50 Pe 50 99 99 99 off-net 50 Pe 50 85 109 109 Fav Leg STD 50 Pe 50 85 145 145 Balanced 50 Pe 50 85 109 109

Figure 8d
Active Healthy Mass Max Denomination <20 21-50 51-97 98-144 145-194 194+ Fav Leg On-net 99 99 99 149 297 297 off-net 75 75 109 199 500/199 500/199 STD 75 148 109 145 500/98 500/98 Balanced 75 75 109 145 500/98 500/98

Figure8e
Active Healthy High Value Max Denomination <50 51-97 98-144 145-194 194-294 294+ Fav Leg On-net 149 99 149 297 297 297 off-net 75 109/98 199 500/98 500/98 500/98 STD 85 109/98 145 500/98 500/98 500/98 Balanced 85 145 145 500/98 500/98 500/98

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Figure 8f
Dormancy Grid Max Denomination On-net Potential Inactive <20 21-50 51-97 98-144 144+ Days of Dormancy 5-15 Day 16-30 Day 31-60 Day Inactive <20 30 pe 40 30 pe 40 30 pe 40 50 pe 70 off-net

Activity Level

Fav Leg STD 30 pe 30 70 Pe 70 100 pe 115 150 pe 200 500 Max Deno 51-97 100 pe 130 70 pe 100 50 pe 70 50 pe 70 Balanced

Dormant/ Inactive

20-50 50 pe 60 40 pe 55 40 pe 55 50 pe 70

98+ 150 pe 215 150 pe 215 50 pe 70 50 pe 70

Analysis of the above figures In the grid shown above the customers are segmented according to :1. Age on network 2. Favourite Leg On-net (calls on same network) Off-net(calls on other network) STD calls

3. Average revenue per customer 4. Week on week usage drop 5. Active/inactive 6. Maximum Denomination 7. Days of dormancy

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In figure8a the various offers offered to the people with Age on network less than 90 days are displayed. This section of people with age on network less than 90 days is called BABY CARE. Here the people with AON less than 30 days are offered plan of 50pe70 so as to prompt them to increase their usage. Other customers in this section are provided offers according to the Maximum denomination and Favorite leg such that they opt for a recharge of higher denomination than their usual one. In figures 8b, 8c, 8d, 8e the offers are provided according to the Average revenue realized from each user. Here customers are divided in four categories:1. Active Healthy Marginal Users with ARPU less than or equal to 50 fall in this category. 2. Active Healthy Fringe Users with ARPU between51 to 100 fall in this category. 3. Active Healthy Mass Users with ARPU between101 to 300 fall in this category. 4. Active Healthy High value Users with ARPU greater than 300 fall in this category. Here customers are provided offers considering their ARPU and maximum denomination such that they opt for a recharge of higher denomination than their usual one. In figure f offers are provided according to the customer categorization on basis of: Potential inactive Days of dormancy

Here customers are provided offers according to their days of dormancy (inactivity) and maximum denomination. Customers who are in category of potential inactive are given offers of Full talk time or Extra talk time so as to lure them to recharge their number and hence increase their revenue as well as revenue for the company.

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Customer Lifecycle Management Through Retailers

This project included: Meeting all the BRs , taking feedback, collecting every data regarding MTS(containing their perception, as well as their feedback and problems) Explaining the CLM drive scheme to every Branded Retailers. Remaining constantly in touch with each BR, regarding the status of the drive and push them to increase the percentage CLM tried.

Literature Behind CLM through Retailers

The basic aim of the project is to show various means where we touch base the customer indirectly through Branded Retail stores (BRs) by providing personalised offers to the customers through a message which is being delivered to the BR, when BR sends a message to MTS containing the customers number. The objective is to increase the revenue base of the MTS by upgrading the customer to buy recharge of higher denomination. Also the objective is to create a sense of confidence among the customers w.r.t the brand because of the reallocation of 2G licenses and the cancellation of licenses of some of the operators by TRAI because of the 2G scam.

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METHODOLOGY

The first part included a mapping of customers recharge pattern by using the already available data with MTS. The primary data involved all the recharge being bought by the customers either through Branded retailers or the open retailers in the market. The second part of the project gives a background to the objective that the company wants to achieve. It involved basic segmentation of the customers according to their recharge pattern in past 6 months. The customers were divided into segments by looking at their previous data usage and then each customer was targeted and an exclusive data plan was designed for the customer keeping in minds his needs. The effectiveness of the project was tapped constantly by monitoring the penetration level of the CLM drive i.e. the number of CLM tried by the retailers and the final phase after this phase would be to improve correct hit (conversion) rate. Also the brief about the CLM drive was being provided by us to each BR. The brief included every detail regarding the CLM drive. A personalised interview of each BR was conducted to know about their feedback for the company, their way of working, issues faced, thus trying to remove any issue from MTS side to improve service to the BR and indirectly the customer.

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Retail CLM Process

Customer comes for recharge

BR checks the offer

BR receives the message indicating the offer

Customer accepts or rejects the offer

BR explains the offer

After all the BR visits and brief about the CLM drive the offers were re launched with new offers. Some of the offers being provided according to segmentation were as follows: Table 2: DATA OFFERS Recharge Value (INR) 348 498 798 998 999 1298 1545
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Data Available (GB) 1.5 3 6 6 10 Unlimited 15 Unlimited 15

Validity (Days) 30 30 30 90 30 30 90

Extra benefits (GB) 1 1.5 3 3 2 Movie tickets 2 Movie tickets 5

Commission for BR(INR) 20 20 20 30 50 75 75

Table 3: VOICE OFFERS Recharge Value (INR) 85 109 145 195 295 495 500 Talktime Available 95 130 180 250 380 650 600 Validity (Days) 30 30 30 30 30 30 LTV Extra Benefit
5 L/N SMS with 1 day validity 5 L/N SMS with 1 day validity 5 L/N SMS with 1 day validity 5 L/N SMS with 1 day validity 5 L/N SMS with 1 day validity 5 L/N SMS with 1 day validity

Commission for BR(INR) 5 10 10 15 15 20 20

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Penetration Rate:
MARCH DATA (For Comparison)
BR
BR-Classic Telecom BR-Jai Bhagwan Naveen Kumar BR-VK Vashisth BR-Mobile Care BR-Navkar Communication BR-Kala Communication BR-Anmol Telecommunication BR-Roop Communication BR-Perfect Solutions BR-Satguru Teleservices BR-Nikky Enterprises BR-Shree Balajee Telecom BR-Goel Associate BR-SK trading BR-Gaurav Telecom BR-Angrish Enterprises BR-Simran Mobile Gallery Total

March Total Recharge 594 368 299 258 289 243 204 125 156 131 94 94 103 53 94 52
61 3218

March CLM % Tried Tried 168 28% 37 10% 6 2% 94 36% 163 56% 89 37% 61 30% 1 1% 33 21% 29 22% 17 18% 66 70% 9 9% 11 21% 18 19% 8 15% 36 59%
846

26%

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APRIL DATA:
BR
BR-Classic Telecom BR-Jai Bhagwan Naveen Kumar BR-VK Vashisth BR-Mobile Care BR-Navkar Communication BR-Kala Communication BR-Anmol Telecommunication BR-Roop Communication BR-Perfect Solutions BR-Satguru Teleservices BR-Nikky Enterprises BR-Shree Balajee Telecom BR-Goel Associate BR-SK trading BR-Gaurav Telecom BR-Angrish Enterprises BR-Simran Mobile Gallery

April Total Rech

555 348 262 308 244 187 157 139 128 114 121 91 71 84 86 42 57

CLM Tried
237 92 54 199 158 119 73 57 74 51 56 88 35 47 51 9 68

% Tried 43% 26% 21% 65% 65% 64% 46% 41% 58% 45% 46% 97% 49% 56% 59% 21% 119% 49%

Total

2994

1468

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MAY DATA:
BR
BR-Classic Telecom BR-Jai Bhagwan Naveen Kumar BR-VK Vashisth BR-Mobile Care BR-Navkar Communication BR-Kala Communication BR-Anmol Telecommunication BR-Roop Communication BR-Perfect Solutions BR-Satguru Teleservices BR-Nikky Enterprises BR-Shree Balajee Telecom BR-Goel Associate BR-SK trading BR-Gaurav Telecom BR-Angrish Enterprises BR-Simran Mobile Gallery

April Total Rech

464 299 164 266 208 131 131 138 103 91 77 50 83 92 92 32 36

CLM Tried
256 81 68 216 190 75 62 78 61 46 62 67 28 73 39 9 50

% Tried 55% 27% 41% 81% 91% 57% 47% 57% 59% 51% 81% 134% 34% 79% 42% 28% 139% 59%

Total

2457

1461

Analysis
The above table displays the total recharge as well as the CLM tried by the Branded Retailers. The March data shows the percentage of CLM tried before our visit and the other tables show the CLM tried after the visit. It is clear from the tables that the % CLM tried increased month on month as we were constantly in touch with the BRs and all their issues were either solved or passed on to the respective departments for further action. During the project period the %CLM tried (North) increased from 26% to 59% which is more than the value in any other circle.
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BR Interview (Main Issues and Feedback) During the project 19 Branded retail stores were visited and were interviewed.

BR Name:-Jai Bhagwan Area:-Narela Person contacted:-Amit Garg Contact no:-9136045057 Average Footfall:-Around 40 Salespeople available:-2

ISSUES (BR) Not aware about the movie ticket scheme Bill not received on time by the customer due to which BR has faced Claw back issues Issues related to claw back Customer does not give much time to do CLM No brochure available for data postpaid plans No brochure for voice plans also Network problem in the nearby areas like DSIIDC etc. MNP taking a considerable amount of time due to which customer get irritated

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ISSUES (CUSTOMER) Pradeep Khatri (9999391592) Has Haryana datacard, wants to know if it can be converted to Delhi mts network.

Ashok Kumar Network Problem in his area(G 970 DSSIDC) Planning to take Idea sim because of the problem

Customer Visited:-7 Response to CLM 1. Will not be able to finish the promo TT in a month 2. Number not configured Misc. Side Board damaged, has sent mail many times but no action taken yet

BR Name:-GOEL ASSOCIATES

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AREA:-Samaypur Person contacted:-Mukund Goel Contact no:-9312243517 Average Footfall:-30-40 Salespeople available:-1 ISSUES (BR) Customer asks for ARP plan frequently. In this area there is less demand of the postpaid because mainly the customers are factory labourers. Demand for WLL by the factory owners. DST has different plans than the BRs which are cheaper also. Poor after sales service. Problems regarding SAC commission. ISSUES (CUSTOMER) Poor network in the nearby area.

Customer Visited:-2 Response to CLM Use is not much, and STV 199 is sufficient for me. Misc. Signboard working properly. Gives handbag with every post paid Data card.

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BR Name-Classic Telecom Area:-Burari Person contacted:-Rakesh Contact no:-9136063664 Average Footfall:-Around 50 Salespeople available:-1 ISSUES (BR) Customer complains about the network. Bill not reaching customer on time. Poor customer care service. Jan-Feb CLM commission not received. Less demand for MTS data card because of MTNL presence in the area. Postpaid data card cannot be deactivated before 90 days so customer is reluctant to buy.

ISSUES (CUSTOMER) Customer has Tata Photon and MTS but says speed is better in Photon but plans are good in MTS. Would be good if there is 1 or 2 GB UL plan.

Customer visited:-9 Response to CLM Out of 7 CLM tried on 5 and 2 took it. Misc. Side board damaged and in signboard lighting is not proper. 45 | P a g e

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MARKET SURVEY

Market research surveys provide a lot of insight into our potential customers, competitors, and target demographics. The market survey provides an idea about the customers and their wants and need, the buying behavior, the new product and acceptance and its potential market survey helps in short and long term forecasting, competitive products studies advertising effectiveness studies, packaging research, pricing studies, distribution channel etc.

Various market surveys were conducted and are being conducted by me in some of our potential as well as non-potential markets so as to learn about the Various products being sold in the market by the competition. Another purpose of the survey was to find out the reach of the MTS (voice) in various markets and to take feedback from the retailers who are either selling our product or not. Brief about Survey done Markets Visited: Nehru Place Jamia Nagar market Khanpur Tigri Masoodpur Mahipalpur Ashok Nagar

Method followed 1. Visiting the market as a prospective customer and enquiring about the various products offered by our company and our competitors. 2. Taking feedback from the retailer as an employee.

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SAMPLES of the feedback report are provided below:-

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Findings from the survey People have a mindset that MTS is going to close down operations in India. Penetration of our products is not good in markets like Masoodpur, Tigri and Nehru place. CDMA and RELIANCE are synonymous to people. MTS is selling good in market because of its low tariff rates and a good portfolio of products to cater to different categories of customers at low rates. In some markets retailers have complaints about MTS FOS(foot on street or salesperson) not visiting regularly which sometimes leads to unavailability of our products like Handsets, sim, Lapu load etc. in the market. Companies like Airtel, Vodafone have started point system (each point being of 85 paisa approx.) to reward the retailers selling their products. MTS Brochures were not available to the customers for reference and for comparison. Other companies like Idea, Vodafone have good visibility in the market but MTS has a long way to go.

Table4: CDMA Operator MTS TATA RELIANCE Selling price of Sim 200 to 250 RS 100 to 150 Rs 100 to 130 Rs Benefits Commission Retailer Talktime Rs130,Call 85 @30p/min for 1yr Get 101 mins for 3 40 months Rs60Talktime 40 Callrates@30p/min for 6 months to

The above table lists the selling price of the CDMA sims in the market visited and the commission realized by the retailer on selling these sims. From the above table one can easily deduce that the commission realized by selling MTS sim is the most so a retailer can earn high profits if he pushes our sim to the customer (which is the main idea of giving higher commission than our competitors).
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The data about the amount of recharge done for various operators was also collected which is listed below in the table. Table5
Operator MTS RELIANCE(CDMA+GSM) TATA(CDMA+GSM) Average Recharge done(Daily basis) Ranges from Rs500 to 3000 Ranges from Rs 1000 to 4000 Ranges from 500 to 2500

In the above table the data about the average recharge done varies from retailer to retailer and it also differs depending on the market surveyed. The above table gives the range in which the average recharge done falls for a particular operator. The table clearly indicates the average recharge done is maximum for Reliance (CDMA+GSM). But if we consider only the value of CDMA recharge done then it is maximum for MTS which implies that in the market visited MTS has considerable share of recharge done but if we compare this value to that of GSM) then this share would become negligible. Feedback /Issues (Retailer) Kalka comm.(Tigri) No MTS salesperson visited, less demand for MTS in the market. Mishra comm.(ashok nagar) Sale of MTS not good in the area so doesnt keep MTS sim. Gupta comm.(ashok nagar) Problem in activation of MTS sim, so not pushing MTS sims. Ansh comm.(ashok nagar) Network issue in MTS so don not sell MTS sims. Lovely comm.(Khanpur) Distributor is not paying attention to this area.
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Duggal comm.(Masoodpur) MTS sale not good, customer demanding MTS is very less, no proper service provided by the FOS and the distributor.

Khushi comm.(Mahipalpur) Problem in sim activation (MTS), airtel, vodafone gives point on sim activation and recharge, reliance giving some commission on sim activation also.

Telepoint.com(Nehru Place) MTS better than Reliance and Tata. Falaq comm.(Jamia Market) MTS service and Network is good, don't sell reliance and Tata because their FOS are not available.

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COMPETITIVE MAPPING
The Purpose of the project Competitive Mapping is needed to understand where MTS stands among the major players in the market. The changes if any from other players will help in differentiating it with their features and can be used to make a strong hold in the market.

The Project involves gathering data of different companies through market visits and some secondary data will also be used. The comparison of different products will help us in making changes to our current portfolio and help us to serve the customer in a better manner.

Given below is the comparison between the FRCs of various operators:-

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Analysis of the Figure In the range of 0-20 Rs only MTS and Tata are offering the plan vouchers. A comparison between the vouchers of Tata (Rs 9) and MTS (Rs 13) leads to the conclusion that MTS` plan voucher is beneficial to the user as it provides the user with extra validity and other additional benefits. In the range of 40-95 Rs only Reliance and Aircel are offering the plan vouchers. A comparison between the different vouchers leads to the conclusion that the Reliance vouchers are more beneficial than the Aircels vouchers because of extra validity offered at almost the same price. In the range of 100-201 Rs MTS, Aircel and Tata are offering the plan vouchers. A comparison between the different vouchers leads to the conclusion that within this range the best benefits are offered by the MTS plan voucher of Rs 100.Also the plan voucher for Rs 123 provided by MTS is also beneficial as it offers low tariff rates compared to that of Tata and MTS in the same range.

Given next is the comparison of the TOP UP recharge of the various operators including MTS. The table below illustrates the various denominations in which the recharge is available and corresponding to these denominations are the values realized in each of the top up.

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Table6: TOP UP COMPARISON

MRP 10 20 30 40 50 60 70 100 110 120 130 150 180 200 220 250 300 330 350 400 440 450 500 550 1000 3000 MTS 7.90 15.80 23.70 32.60 41.50 NA 59.30 89 125 NA NA 175 NA 178 NA NA NA NA NA NA NA RELIANCE 7.90 15.80 23.70 NA 41.50 50.40 62.30 86 NA 120 NA 130.50 NA 175 235 219.50 264 355 NA 353 480 TATA 1 to 30 TT:- .79 to23.69 AIRCEL 7.90 15.80 23.70 32.60 41.50 to NA 59.30 86 97.9

31 to 9999 TT:-24.59 8896.07 (PF:-3 Rs)

130 31 to 9999 TT:-24.59 8896.07 250 31 to 9999 TT:-24.59 8896.07 350 31 to 9999 TT:-24.59 8896.07 450 31 to 9999 TT:-24.59 8896.07

to 180 200 NA NA 300 to NA NA NA to NA

NA 600 NA NA NA

NA 442 600 887 NA

NA 500 to NA 1100 3300

Analysis In the range of 10 to 50 Rs the Talk time offered by the companies is the same. In case of recharge of Rs 70 Reliance offers the maximum talk time. No other company offers extra talk time on recharge value between 100 to 200 Rs but MTS offers which provides it edge over its competitors.

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MTS does not offer any recharge in the range 200 to 450 Rs but other companies like Reliance, Aircel have recharges available in this range.

TARIFF RATES ANALYSIS (DATA) Table 7: Tariff rates

VALIDITY 250 MB 350 MB 500 MB UL 500 MB 700 MB 1 GB UL 1 GB 1 day 1 day 1 day 30 days 30 days 24 hrs 30 days 14 days 21 days 1.5 GB 2 GB UL 30 days 7 days 30 days 5 days 3 days 2 GB 3 GB UL 30 days 10 days 28 days 3 GB 4 GB UL 30 days 30 days 15 days 4 GB 5 GB UL/ month 5 GB 6 GB 60 days 180 days 30 days 30 days 90 days 6 GB UL 10 GB UL 11 GB UL 30 days 30 days 30 days 999 1099 798 998 901 1051 1205 1005 490 647 449 698 3990 800 750 855 649 801 379 755 248 348 298 699 225 179 449 455 705 355 96 299 98 255 250 255 MTS 52 76 101 348 501 99 RELIANCE 3G VODAFONE PHOTON

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12 GB UL

30 days 90 days

1099 1500 1298 1545 2501 1999 3000 5000 1300

15 GB UL 15 GB

30 days 90 days 180 days

25 GB 30 GB 32 GB

90 days 180 days 365 days

Prepaid analysis The 7-9 GB segment is untouched by any competitor at the moment so if we offer some plan in this category we could create a niche market there. MTS has an advantage in the segment below 350 MB as no other competitor at the moment is offering any such scheme. In the 10 GB portfolio MTS is at the lowest price when compared to the other competitors. In the 2-3 GB portfolio MTS has an upper hand as when compared to its competitors. Both in terms of the price as well as the usage offered. MTS lacks an yearly plan which Photon at the moment is offering. This could be a drawback for MTS in the future as this potential segment of consumers could be lost. MTS needs to have plans between 500 MB and 1 GB, as it is the only player not offering any plan at this moment. MTS can have plans with usage more than 25 GB with validity of more than 180 days. In the 4 GB plan only MTS and Vodafone are present and comparing the price of both the plans MTS is a clear winner. In 1GB category the price at which MTS offers the plan is much higher than its competitors. A plan in 5 GB segment is required, to cater to the competition offered by other companies.

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REFERENCES www.dot.gov.in/annualreport/2011/English AR 2010-11.pdf www.pwc.com/in/en/industries/telecom.jhtml Marketing Management by Kotler www.medianama.com/category/telecom/mobile/ Credit Suisse report on telecommunication www.mtsindia.com http://www.trai.gov.in/

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