SUMMER TRAINING REPORT SUBMITTED TOWARDS THE PARTIAL FULFILLMENT OF POST

GRADUATE DEGREE IN INTERNATIONAL BUSINESS

“IMPACT OF THE UNLIMITED PLAN ON THE CONSUMER USAGE

AND FORMULATING ITS WAYS TO ENHANCE REVENUE”

SUBMITTED BY:
VAIBHAV TYAGI
MBA-IB (2009-2011)
Roll No: A1802009623

INDUSTRY GUIDE FACULTY GUIDE

Vikas Vikram Aditya Kumar Gupta

Sr. Manager- Product marketing Professor, AIBS

AMITY INTERNATIONAL BUSINESS SCHOOL, NOIDA

AMITY UNIVERSITY UTTAR PRADESH

0
 CERTIFICATE OF APPROVAL

This is to certify that the project report entitled “IMPACT OF THE UNLIMITED PLAN ON THE
CONSUMER USAGE AND FORMULATING ITS WAYS TO ENHANCE REVENUE” is submitted to
Marketing department, Reliance Communications Ltd by Mr. Vaibhav Tyagi in the partial
fulfillment of the requirement of MBA(IB) program at Amity International Business School,
Noida. This study is a bonafide research work carried out by for a period of 9 weeks from 10-05-
2010 to 10-07-2010.

Date: 10.06.2010 Vikas Vikram

Place: New Delhi (Sr. Manager- Product marketing)

1
 ACKNOWLEDGEMENTS

Through this report, I take the opportunity to express my sincere gratitude to all those who have helped
me in making my training at Reliance Communications Ltd. (Delhi circle), a success.

First of all I would like to thank the academic fraternity at, AMITY INTERNATIONAL BUSINESS SCHOOL,
NOIDA for having such a system in place, where students are given opportunities to learn about their
areas of interest, as part of training and internship programs.

I would like to thank my faculty guide Mr. ADITYA KUMAR GUPTA, Faculty member AIBS, NOIDA without
whom it would not been possible for me to undergo training at Reliance Communications Ltd. His
regular guidance and help has given shape to my project and evolved it to its current being. He has been
a source of inspiration and motivated me to perform to the best of my abilities.

I express my deepest sense of gratitude towards MR. VIKAS VIKRAM, my guide and mentor at Reliance
Communications Ltd, for taking time out of his busy schedule and helping me, in every possible way, to
proceed with my work. He has been a constant help throughout the project and an impartial leader. I
would like to thank him for his selfless help and cooperation at every step.

Furthermore I wish to extend a warm gratitude to Mr. SUDESH JASWAL, for helping me throughout the
summer internship program and providing me with wonderful insights which helped me in
understanding the business as a whole. She has been extremely warm and kind hearted.

At last, I would like to thank all the TEAM MEMBERS of the office, who had contributed in completion of
the project. I acknowledge their efforts in making me understand the various business functions at
Reliance Communications Ltd and their guidance for developing the deliverables to the organization.

VAIBHAV TYAGI

A1802009623

MBA-IB (09-11)

2
 TABLE OF CONTENTS
Chapter No. Subject
1.0 Executive Summary 8
2.0 Introduction 9
a. Background 10
b. Purpose, Scope, and limitations 11
c. Objectives 11
d. Methodology 12

3.0 Industry Profile 15

a. Introduction 15
b. Review of literature on the industry 17
c. Growth chart 19
d. Major Companies(Competition in the market) 20
e. Market share of Major players 22
4.0 Company Profile
a. Introduction 23
b. Review of literature on the company 26
c. Promotional mix 28
d. SWOT 30
e. Upselling And Pack Penetration 31
f. Customer relationship management 46

5.0 Issues and challenges facing the organization 65

6.0 Recommendations 66
7.0 Bibliography 67
8.0 Annexure 69
9.0 Case Study 79
10.0 Synopsis of the project (150-200 words) 85

LIST OF FIGURES:

3
1.1 Top 10 countries by number of subscribers

2.1 Market share of all operators in India

3.1 Top 10 CDMA operators in the world

4.1 Business mix of Reliance ADAG

5.1 Verticals of marketing at Reliance

6.1 Strategies for promotion

7.1 Need for customer recharge prediction

8.1 CLV conceptual model

9.1 Methodology to evaluate

10.1 Recharge base VS churn percentage

11.1 Causes of churn

12.1 Customer profile

LIST OF TABLES:

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1.1 STV recharge data

2.1 Results after promotion of STVs

3.1 Incremental revenue statement due to increased recharge percentage

3.2 Costs involved in promotion

3.3 Net incremental revenue statement

4.1 Quantity of recharge

5.1 AON analysis

5.2 MOU analysis

5.3 MOU vs. RECHARGE analysis

6.1 Results of promo pack

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LIST OF ANNEXURES:

A-1 SMS reminder script

A-2 Tele calling script

A-3 IVR script

A-4 Specimen of MIS report (tele calling)

A-5 Record of daily track of STV recharge

A-6 Raw data for analysis

A-7 MOU trend analysis data

A-8 Primary research data sample

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LIST OF ABBREVIATIONS:

AON Age on network

ARPU Average revenue per user
ASP Advertising and sales promotion
CAF Customer application form
CDMA Code division multiple access
CLV Customer lifetime value
FSP Fixed service provider
GSM Global system for mobile communication
ICRA Indian credit rating agency
ILD International long distance
IVR Interactive voice response
MDN Mobile directory number
MIS Management information system
MNP Mobile number portability
MOU Minutes of usage
NLD National long distance
OFFNET Off-network calls
ONNET On-network calls
OTAF On the air function time
REC BASE Recharge base
SMS Short message service
STV Special tariff voucher
TRAI Telecom regulatory authority of India
USSD Unstructured supplementary services data
UNR Usage and revenue
VAS Value added services

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 EXECUTIVE SUMMARY

I
N today’s business environment the world is shrinking rapidly. Companies now are not
restricted by boundaries of countries. Technology is the main driving factor behind this
emergence of a closely knit business world. The need for faster communication and
decision making is gaining immense importance. Moreover, easier access to the web has been
very effective for the companies as well as its employees. In this emerging conquest for highly
customized products, there has been a growing demand for efficient tools for processing the
products and its related documents. All functions – such as sales, marketing, manufacturing,
service, and even human resources affect not only the bottom line but also a company’s
financial integrity.

The main aim of this project is to understand the various functions of marketing division in the
day to day business activities in the telecom sector. It also aims to identify the concern areas
after an in-depth analysis of the company’s operations and recommend solutions for the same.
It stresses on analyzing the key aspects of marketing like consumer behavior patterns and
revenue generation. It requires integration of various parameters needed to analyze the
possibilities of market segmentation and also CLV analytics in telecom sector. It mainly focuses
on increasing ARPU and decreasing customer churn. It also takes a step forward by looking into
various strategies adopted by Reliance Communications to remain affordable by the customers
yet generate high revenue.

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 INTRODUCTION
BACKGROUND:

India, like many other countries of the world, has adopted a gradual approach to telecom
sector reform through selective privatization and managed competition in different segments
of the telecom market.

To begin with, India introduced private competition in value-added services in 1992 followed by
opening up of cellular and basic services for local area to private competition. The Telecom
Regulatory Authority of India (TRAI) was constituted in 1997 as an independent regulator in this
sector. Competition was also introduced in national long distance (NLD) and international long
distance (ILD) telephony at the start of that current decade.

Despite asymmetry in initial market endowments between public sector incumbents and
private operators, the act of opening up of the market unleashed dynamism that was hitherto
latent in the sector.

Three types of players now exist in ' Telecom Industry India ' community -

• State owned companies like - BSNL and MTNL.

• Private Indian owned companies like - Reliance communications and Tata Teleservices.
• Foreign invested companies like – Vodafone, Bharti Tele-Ventures, Escotel, Idea Cellular,
BPL Mobile, Spice Communications etc.

The Indian mobile services market is highly competitive with six to eight players operating in
each of the 23 telecom circles that the country is divided into. The intensity of competition has
increased in recent months following the launch of GSM services by Reliance Communications
(RCom) and Tata DoCoMo, CDMA services by Sistema Shyam; and the continuing pan-Indian
GSM rollout by Aircel, Idea Cellular (Idea), and Vodafone Essar (Vodafone).

9
The competitive intensity is expected to increase even further as new licensees launch their
services and Mobile Number Portability (MNP) is introduced in India.

The recent increase in competition in the Indian mobile services market is evident from the
aggressive tariff plans being introduced by players, a move that has led to a decline in the
average revenue per user (ARPU), revenue growth, and profitability of the industry. Besides,
profitability of the mobile service providers is also being impacted by the increasing share of
low ARPU subscribers in incremental additions, the bulk of which is happening in the semi-
urban and rural areas where the mobile penetration rates are still low.

While India remains one of the fastest growing mobile services markets globally by subscriber
addition and still presents an opportunity for further growth, the rates of revenue growth and
margins of the mobile service providers are expected to decline as the intensity of competition
increases further.

Although some of the incumbent operators with strong financials, extensive networks, and
larger share of high paying customers would be better positioned to withstand the kind of
competitive pressures anticipated, high capital expenditure on 3G may well lead to continued
negative free cash flows and push up funding requirements. Intensified competition and the
aggressive pricing strategies adopted by the existing operators could challenge the
sustainability of the new entrants as breaking even at lower tariffs would take longer.

This would also imply delay in the generation of positive cash flows for the new entrants. Given
this scenario, it is likely that the Indian mobile services market would see some consolidation
over the medium to long term.

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PURPOSE AND SCOPE:

The main purpose of this project is to understand the various verticals of marketing function at
Reliance Communications. An in-depth analysis of the customer base was done based on the
primary data available, in order to gain insights into the consumer behavior patterns. Based on
these patterns further studies were conducted to develop revenue generating models for the
company.

This project helped me in gaining insights about how a telecom firm is dealing with the existing
price war, declining revenues and increasing competition. It is an opportunity for me to be a
part of the corporate world. Further, it will also help in reaching my objective of understanding
and analyzing the telecom industry as a whole.

The scope for doing this project is limited to the geographic boundaries of Delhi and NCR and
the data that is available while conducting the studies. The resources available are utilized to
the optimum. It will help me to understand the highly competitive environment and means of
tackling the surmounting pressure over the telecom sector.

OBJECTIVE:

The project has following objectives:

Understand the basic consumer behavior pattern and up selling products based on
these patterns.

Analyze reasons for customer attrition and finding solutions to the impending problems.

To make logical and practically feasible suggestions in order to make improvements in
the system thereby making it swift, efficient and more profitable.

Analyze the traffic patterns of various segments in the CDMA category.

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METHODOLOGY:

To achieve the objective of the project following methodology will be used.

Collection of data
• Data is collected from two sources, Internal and External.
• Internal data is collected from the activities within the firm like new product
development, customer records etc.
• External data is collected through primary and secondary research.

Primary Research
• Understanding the work though communication with its employees.
• Tele calling customers in order to gain insights into their feedback
• Visiting various Reliance mobile stores and reliance world stores to gain feedback

Merits of Primary data:

• It is original in nature.
• It is more reliable authentic and accurate.
• It is generally free from bias.
• It exactly matches the needs of project.

Secondary Research
• Collecting secondary data to understand the market of the product as a whole.
• Collection of the database of the company and its competitors.
• Reading annual reports of company and its competitors.
• Reading papers published by ICRA and other market research firms, on industry analysis
of telecom sector.

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Merits of secondary data:
• It is readily available.
• It is much less expensive as compared to primary data.
• It is less time consuming as compared to primary data.

LIMITATIONS OF THE STUDY:

• There is a possibility of respondents’ bias or no response bias while conducting

the primary research.
• The sample taken for the primary research might not be true representative of
the total population.
• Inadequacy of data.
• Competitive analysis is majorly dependant on secondary resources of data.
• Control sample might be adulterated due to word-of-mouth.

Research methodology is a way to systematically do the job. It may be understood as a

science of studying how research is done scientifically. The most desirable approach with
regards to the selection of the research methodology depends on the nature of particular
work, time and resources available along with the desire level of accuracy.

Research Type Descriptive Research

Data Source Primary Data

Research Instrument MIS system

Type of Questionnaire Structured

Sampling Unit Data collected directly

Sampling Method Judgmental

INDUSTRY PROFILE:

INTRODUCTION
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The telecom industry is one of the fastest growing industries in India. India has nearly 200
million telephone lines making it the third largest network in the world after China and USA.
With a growth rate of 45%, Indian telecom industry has the highest growth rate in the world.
History of Indian Telecommunications started in 1851 when the first operational land lines were
laid by the government near Calcutta (seat of British power).

Telephone services were introduced in India in 1881. In 1883 telephone services were merged
with the postal system. Indian Radio Telegraph Company (IRT) was formed in 1923.

After independence in 1947, all the foreign telecommunication companies were nationalized to
form the Posts, Telephone and Telegraph (PTT), a monopoly run by the government's Ministry
of Communications. Telecom sector was considered as a strategic service and the government
considered it best to bring under state's control.

In 1986, two wholly government-owned companies were created: the Videsh Sanchar Nigam
Limited (VSNL) for international telecommunications and Mahanagar Telephone Nigam Limited
(MTNL) for service in metropolitan areas.

Telecommunication sector in India can be divided into two segments: Fixed Service Provider
(FSPs), and Cellular Services. Fixed line services consist of basic services, national or domestic
long distance and international long distance services. The state operators (BSNL and MTNL),
account for almost 90 per cent of revenues from basic services. Private sector services are
presently available in selective urban areas, and collectively account for less than 5 per cent of
subscriptions.

Cellular services can be further divided into two categories: Global System for Mobile
Communications (GSM) and Code Division Multiple Access (CDMA).

The GSM sector is dominated by Airtel, Vodafone-Hutch, and Idea Cellular, while the CDMA
sector is dominated by Reliance Communications and Tata Indicom. Opening up of international
and domestic long distance telephony services are the major growth drivers for cellular
industry.

14
India surpasses the USA as the world’s second largest mobile market. The last five years have
witnessed the number of phones more than quadruple in India, taking the total number to
300.5 million at the end of March 2008. 73.7% of the country’s mobile customers are
subscribed to GSM and the remainders are CDMA customers.

Mobile growth is forecasted to remain in the double digits until the end of the forecasted
period, with an average growth rate of 22.8% between 2007 and the end of 2012.

At that time, mobile subscribers are forecasted to have reached 643.0 million and a penetration
rate of 51.8%.With over 1.1 billion inhabitants and a highly competitive telecom market, India is
and will remain one of the world’s most dynamic and promising telecom markets for the next
five years, even surpassing China in terms of market vitality.

REVIEW OF LITERATURE:

RNCOS, May 2008, “Indian Telecom Analysis (2008-2012)”

(www.research and markets.com)

The report provides a detailed study of the Indian telecom sector and gives an analysis of the
competitive environment in the industry. It gives an insight into the fixed, mobile, Internet and
broadband services in terms of players, number of subscribers, and market share in India. The
report also discusses the growth drivers, opportunities, and future outlook of the Indian
telecom sector to help clients identify growth opportunities in the market.

With a strong population of over 1.1 Billion, India has become one of the most dynamic and
promising telecom markets of the world. In recent times, the country has emerged as one of
the fastest growing telecom markets in the world. During 2003-2007, the country witnessed the
number of phones increasing more than triple and total tele-density rising from 5.1% to 18.2%.
The major key findings from this report are as follows:

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 • The total telecom subscription in India surged at a CAGR of over 38% from fiscal 2003 to
fiscal 2007, making the country the third largest telecom market in the world.
• Mobile phones accounted for 80.2% of the total telephone subscriber base at the end of
March 2007.
• The Internet subscriber base in the country, as on March 31, 2007, stood at 9.3 Million
as compared to 6.9 Million on March 31, 2006 registering a growth of 34.8%.
• By fiscal 2010, Indian will require around 330,000 telecom network towers.

To meet this enormous need, the telecom operators are resorting to network infrastructure
sharing.
The major key issues & facts analyzed are as follows:

• The current scenario of the Indian telecom sector.

• The factors critical to the success of the industry.
• The opportunities exist for the Indian telecom market.
• The future outlook of the telecom market in India.
• The emerging technologies in the Indian telecom sector.
• The major players in the Indian telecom market and how are they performing.

Impact of Increased Competition on Mobile Service Industry:

(www.icra.in)
The report provides an overview of the financials of the telecom industry and various players in
the Indian telecom sector. It gives a detailed analysis of the competition prevalent in the Indian
telecom industry. It summarizes the reasons for declining revenues, increasing price war,
increasing rate of customer attrition and also the importance of value added services for mobile
service providers.
The facts that the report presents are as follows:

• The Indian mobile services market is highly competitive with six to eight players
operating in each of the 23 telecom circles that the country is divided into.

16
 • Most telecom operators reported a decline in revenues from mobile services in Q2,
2009-10 despite growth in their mobile subscriber base.

• With mobile penetration in the urban areas having reached high levels already (urban
tele-density was 87.18% as against rural tele-density of 15.35%, both as in June 2009),
subscriber additions are expected to happen largely in the semi-urban and rural areas,
which in turn would impact ARPU further.

• With TRAI recommending introduction of MNP, the domestic telecom sector appears
poised for a paradigm shift. The reasons for seeking the introduction of MNP are
compelling : to promote competition among mobile service operators so that service
levels can improve further and to provide users the right to change operators at minimal
cost and with minimal inconvenience.

• Currently, the contribution of VAS to the total mobile revenues of Indian telecom
operators is just 9-10%, which is significantly lower than the same of operators in the
developed markets.

After 3G, TD-LTE may drive telecom

(April 9, 2010. Economic times)

This article talks about continuous innovation in the telecom sector on the technology front. It
details the big leaps that the telecom took from 2G to 3G and now to TD-LTE.

TD-LTE , or Time Division Long Term Evolution, caters to peak download speeds of 100 Mbps on
mobile phones, compared to the 20 Mbps for 3G and 40 Mbps for Wimax. LTE brings to the

17
table additional spectrum, more capacity, lower cost, and is essential to take mobile broadband
to the mass market.

US-based Qualcomm and Sweden's Ericson aim to piggyback on TD-LTE , hoping that it will help
them gain a toe-hold in India, the world's fastest growing mobile market . Qualcomm is to
participate in the broadband wireless access (BWA) spectrum auction. If it does secure its bid in
the auction, India could well become the first country after China to roll out TD-LTE.

The government has slotted the sale of two 2.3 GHz blocks of spectrum on April 11, providing
20 MHz spectrum in each of the country's 22 telecom circles. The base price has been set at $
385 million. However, Qualcomm will need an Indian partner for its TD-LTE foray in the country
since foreign direct investment is limited to 74%.

The US Telco aims to use the 2.3 GHz spectrum band offered for TD-LTE-based BWA services.
Sources in the know told TOI that the company would bid aggressively to corner one of the two
BWA slots up for sale.

GROWTH CHART OF TELECOM INDUSTRY:

18
 Fig 1.1

Source: Operator's Website, Press Release & Regulatory

MARKET STRUCTURE:

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Telecom reforms across the world are energizing businesses and people. Long considered a
natural monopoly, recent technological developments have facilitated competition in this
sector leading to increased access to telecom services and gains in efficiency and quality of
service. India has emerged as an international destination for processing and distribution of
information.

Availability of infrastructure for electronically transferring and assessing information are critical
to maintaining the competitive advantage that it currently enjoys and embracing telecom
reforms is a part of achieving that goal. Though the results of telecom reforms the world over
have been positive on average; domestic political economy and institutions have impacted
every country experience and India is no exception. India’s economic liberalization program
began in 1991.

Aimed at raising the economy from low-growth equilibrium and putting it on a sustained
growth path, these reforms targeted a wide range of sectors – from international trade to
finance and infrastructure. Following these reforms, traditional sectors such as agriculture and
industry that used to contribute nearly 70 per cent of the GDP now constitute an increasingly
smaller share of economic output.

Simultaneously, there has been rapid growth in the service sector that now contributes nearly
48 per cent to GDP (1998) and is growing at 8 per cent per annum. Indian policy-makers also
increasingly recognized the need for reforms and investment in telecommunication
infrastructure in order to realize the forecasted economic and social growth rate of the country.
It has been shown that investment in telecommunications infrastructure leads to economic
growth in various ways.

While telecommunication investment itself leads to growth by creating a demand for the
goods and services used in their production, the economic returns on this investment are far
greater than the returns from the investment alone. The multiplier effect of telecom
investment on GDP is likely to be higher because of both the direct and indirect effect that this
investment has on production.

20
However, it has also been shown that since telecommunications infrastructure is characterized
by network externalities the positive growth effects of investment in this sector are subject to
having achieved a critical mass in a given country’s communications infrastructure.

COMPETITION IN THE MARKET:

A characteristic of telecom industry is heavy dependency on Advertisement and Promotional

Strategies-Each company viz. Airtel, Vodafone, Reliance Communications, Tata Indicom and
BSNL spend lots of funds on acquiring Indian movie stars and sport stars. Thus due to the cost
of heavy expenditure on Advertisement the industry is more or less a very heavy revenue
generating industry for a lot of other sectors.

A characteristic of this kind of Competition is the close interdependence between the different
companies regarding each company’s policy decisions. These companies have to monitor each
activity of its competitors and even a little ignorance can prove very costly. Like, when Reliance
started the ONE-INDIA plan, Airtel, Vodafone and others also started and pushed similar plans.

21
 Fig 2.1 Source: Operator's Website, Press Release & Regulatory

In this kind of competition the major players occupy a very high market share and these players
could dictate terms for the other players but in Indian Telecom Industry all the players are very
close in terms of market share so the question of dictating terms comes only when a company
takes the First-mover Advantage. Then it could dictate terms for the particular time period but
again the other companies are always at their heels so the question of keeping the advantage
for a long time doesn’t seek in.

COMPANY PROFILE: RELIANCE

COMMUNICATIONS LIMITED

INTRODUCTION

Reliance Communications Limited founded by the late Shri Dhirubhai H Ambani (1932-2002) is
the flagship company of the Reliance Anil Dhirubhai Ambani Group. The Reliance Anil Dhirubhai
Ambani Group currently has a net worth in excess of Rs. 63000 crore, cash flows of Rs. 12000
crore, net profit of Rs. 8000 crore and zero net debt.

RCOM is India’s largest integrated and fully converged communications service provider in the
private sector, and has been rated among “Asia’s Top 5 Most Valuable Telecom Companies”.
Reliance Communications is India's foremost and truly integrated telecommunications service
provider.

22
The Company, with a customer base of over 100 million including over 2 million individual
overseas retail customers, ranks 4th among the Top 10 Telecom companies in the world by
number of customers in a single country.

Reliance Communications corporate clientele includes 2,100 Indian and multinational

corporations, and over 800 global, regional and domestic carriers. Reliance Communications
has established a pan-India, next generation, integrated (wireless and wireline), convergent
(voice, data and video) digital network that is capable of supporting best of- class services
spanning the entire communications value chain, covering over 20,000 towns and 450,000
villages.

It owns and operates the world's largest next generation IP enabled connectivity infrastructure,
comprising over 175,000 kilometers of fiber optic cable systems in India, USA, Europe, Middle
East and the Asia Pacific region.

The Reliance Communications network consists of 60,000 kilometers of optical fiber cables
spanning the length and breadth of India. These cables can carry thousands of billions of bits
per second and can instantly connect one part of the country with another.

This physical network and its associated infrastructure will cover over 600 cities and towns in 18
of the country's 21 circles, 229 of the nation’s 323 Long Distance Charging Areas and broadband
connectivity to over 190 cities.

This infrastructure will be backed by state-of-the-art information management systems and a

customer-focused organization. Reliance Communications objective is to create value for our
customers.

Reliance will innovate ceaselessly so that state-of-the-art technology can be leveraged to create
products and services that are affordable. Reliance has a demonstrated track record of
conceptualizing, and executing complex, multi-billion dollar projects in a timely and cost
effective manner.

23
Reliance Communications is committed to delivering products and services of world class
quality to customers. It has attracted the best people in each of its businesses, by empowering
people, providing attractive growth opportunities, and creating a world class working
environment.

Reliance Communications believes that knowledge resides in people, and has, accordingly,
always built its growth plans around people. It is a youthful enterprise, with a strong
entrepreneurial spirit, fostering an environment that facilitates informality and flexibility, and
emphasizes depth of planning and speed of execution.

Fig 3.1

Source: Operator's Website, Press Release & Regulatory

The following attributes define future leadership at Reliance Communications:

• Customer centricity.

24
 • Initiative and an attitude of ownership.
• Passion for excellence and an ability to energize.
• Problem solving and an innovative "can do" mindset.
• Entrepreneurship and stretch.

The strong underlying fundamentals of the Indian economy, and the latent demand potential in
our markets, provide the platform for building world scale businesses. Reliance
Communications leadership in its several businesses is centered around its ability to build world
scale assets, obtaining the benefits of economies of scale, and competing on an even level with
the global peer group.

Reliance Communications leverages its core competencies to create a sustainable competitive

advantage in its various businesses. Today, Reliance Communications is revolutionizing the way
India communicates and networks, truly bringing about a new way of life.

REVIEW OF LITERATURE

VISION: Reliance Communications has a vision to leverage its strengths to execute complex
global-scale projects to facilitate leading-edge information and communication services
affordable to all individual consumers and businesses in India. It also aims to offer unparalleled
value to create customer delight and enhance business productivity. It also focuses on
generating value for their capabilities beyond Indian borders and thus enabling millions of
India's knowledge workers to deliver their services globally.

BUSINESS
MIX

25
 Fig 4.1

Source: Annual Report of Reliance Communications, 2009-2010

It covers an entire range of products and services:

26
 • Wireless
• Tower
• Globalcom
• Enterprise
• Home
• Other businesses

MARKETING AT RELIANCE COMMUNICATIONS:

At reliance we have three verticals of marketing which include every functional aspect of the
business that a telecom firm undertakes.

Fig 5.1

27
The various divisions of marketing at reliance involve a bundle of activities. Customer
acquisition basically involves increasing the subscriber base and thereby increasing the
revenues generated. On the other hand UnR functions to increase the Average revenue per
user (ARPU). This primarily involves cross selling and up selling of products in order to gain
maximum revenue from the existing customers. This accounts for the maximum amount of the
revenue generated by the company.

The third and a very important aspect of marketing at Reliance Communications is the
MARCOM (Marketing communications). This team handles the branding, advertising and sales
promotion for the company thereby creating the brand itself. It works well in coordination with
the other verticals of marketing since the other two focus on customization and segment
marketing while branding generally focuses on mass marketing.

SWOT ANALYSIS

28
Strengths Weakness

• Branding Image
• Low Entry Cost • Distribution problem
• Commission Structure • Limited product portfolio-
• Fast Activation Process Only Mobile
• Network • Lack of Competitive Strength
• Connectivity • Limited Budget
• Data GPRS

Opportunity Threat

• Preference of GSM over • Political destabilization.

CDMA • New Entrants
• New Specialist Application • IT Development
• Rural Telephony • Market Demand
• New Market, Vertical, • Seasonality, Weather Effects
Horizontal
• Competitors` Vulnerabilities

UPSELLING AND PACK PENETRATION

UPSELLING:

29
Up selling is a sales technique designed to increase the sales invoice. It’s an important business
concept as it requires sales people to not be order takers, but instead be active sellers. Up
selling involves promoting upgrades or add-ons to customers that are extra purchases and
increase sales. When you up sell you offer the customer another product for purchase.

Customers tend to be very sale- or bargain-focused. Highlighting special offers will increase
conversion rates and improve basket size. For example, if users put a regular chicken into their
shopping basket, you can suggest an organic chicken on special that might cost a little more
than the regular chicken, but one they might not normally consider at full price. Similarly at
Reliance, UnR forms a major chunk of the marketing function.

CROSS SELLING:

Cross-selling is defined as "the action or practice of selling among or between established

clients, markets, traders, etc." or "that of selling an additional product or service to an existing
customer". In practice businesses define cross-selling in many different ways. Elements that
might influence the definition might include: the size of the business, the industry sector it
operates within and the financial motivations of those required to define the term.

The objectives of cross-selling can be either to increase the income derived from the client(s)
or to protect the relationship with the client(s). The approach to the process of cross-selling can
be varied. Unlike the acquiring of new business, cross-selling involves an element of risk that
existing relationships with the client could be disrupted. For this reason it is important to
ensure that the additional product or service being sold to the client(s) enhances the value the
client(s) get from the organization.

BUSINESS CHALLENGE:

Today’s service providers face a tough market environment. There is little differentiation in
basic e-mail capabilities, and many providers offer e-mail at no cost. In this type of

30
environment, customers often chase the lowest price, using their service provider only as a
means of access.

Once online, subscribers often go elsewhere for e-mail and other services such as basic
calendaring, address books, and instant messaging. With no incentive to remain loyal,
subscribers are even more likely to leave — which in turn perpetuates the cycle. Other factors
— such as number portability for wireless services — are accelerating this trend for wireless
providers.

Against this backdrop, there continues to be upward pressure on operating costs. In many
cases, service providers face challenges to increase top-line revenue and reduce churn, while at
the same time maintaining or even reducing costs.
In order to accomplish these goals, many service providers are evaluating their existing
infrastructure and alternatives, looking for ways to improve services and reduce costs through
consolidation, performance improvements, and better support. Looking to attract and retain
customers, many service providers are examining their options for new markets, as well as
value-added and more profitable services.

• Increasing Average Revenue Per User (ARPU)

As features and capabilities for standard e-mail mature, there is a relentless drive toward
commodity pricing. U.S. service providers offer basic e-mail service for as little as ten dollars per
month. The shifting profile of the global subscriber base will contribute significantly to the
declining average revenue per user (ARPU).

Many analysts say that developed countries will reach maximum penetration within the next
two to three years, which is expected to drive downward pressure on pricing as service
providers fight to maintain their subscriber bases. Worldwide, it is expected that new

31
subscriber growth will come from developing and emerging economies such as the Far East —
typically areas with a lower price threshold.

As barriers to entry into the service provider market fall and the market expands, the number
of service providers will also grow, shrinking the market share of existing providers and
increasing competition for subscribers. Developing new services to retain existing customers
and, at the same time, attract new customers is essential for maintaining a place in this
dynamic market.

• Attracting and Retaining Consumer and Business Customers

Most service providers do not share subscriber turnover statistics, though industry reports
suggest that larger Internet service providers have larger churn rates. In the U. S., churn rates
for the top ten service providers range from less than one percent to almost five percent
monthly1. For a service provider with 500,000 subscribers, this translates to a loss of up to
25,000 subscribers a month.

Price continues to be the top reason to switch providers, but it is not the only one. Attracting
and retaining customers requires developing services that promote loyalty. Creating services
that customers cannot get elsewhere — and on which they depend — is the best way to
develop devoted subscribers.

Customer support, service availability, and uncontrolled spam are also major factors in
customer churn. In the wireless market, number portability has accelerated customer turnover
from a user perspective, most service providers offer few reasons to keep customers from
switching to less expensive providers. Value-added services and tightly integrated services,
however, provide incentives for customers to stay.

32
 • Reducing Costs
Many service providers point to spam and viruses as the single biggest factor associated with
increasing costs. Each day, the largest providers filter out billions of messages, and it is
estimated that over 60 percent of all message traffic is spam. Some providers report that up to
90 percent of e-mails are spam. In addition to the time and cost associated with reducing spam,
service providers also spend hundreds of millions of dollars each year to stop viruses from
spreading. It’s a lot of effort just to deliver the mail.

But spam and viruses are not the only issues affecting costs. Poor scalability and performance,
increasing licensing fees, and the high cost of maintaining infrastructure and supporting
customers also contribute to rising costs. Not to mention the fact that overall message traffic is
growing. And, at the same time, some messaging vendors are ending support for existing
product lines, forcing costly migration to other products or to other vendors.

THE NEED FOR UPSELLING AND CROSS SELLING AT R-COMM:

After launching various products as per the customers requirement such as pay per second,
pay per call, pay per minute. Now Reliance introduced a new offer which is on pay per month
basis called:-
SIMPLY UNLIMITED OFFER:
1) Local pack @ 299:
o This pack is designed for people who heavily makes calls from reliance to
reliance mobile or to other operators. With this pack, the customer avails
unlimited local calls onnet and 30 mins free offnet daily (i.e 900 mins per
month).
2) National Pack @599:
o This pack is designed for people who heavily makes calls from reliance to
reliance mobile or to other operators. With this pack, the customer avails
unlimited localcalls onnet (Local+Std) and 30 mins free offnet (Local+Std) daily
(i.e 900 mins per month).

33
STVs contribute around 8% to the total revenues generated by the company thus making it an
important component of the profit pie.
CASE FOCUS:
The project aimed at impact of the unlimited plan on the consumer usage and formulating its
ways to enhance revenue and also to understand the usage pattern. This project focused on
analyzing the effectiveness of these STVs as a customer retention tool.
CASE DATA
To begin with the analysis, the data in the month of April was analyzed. It was seen that the
target customer’s for 299 whom we can target are between 400-600 and 600-1000.

Rchg
299
Total
Local Offnet STD STD
SLAB % Rchg Total Og Ild
onnet local onnet offnet
April
0 2% 10 0 0 0 0 0 0
1 - 25 3% 39 11 2 6 0 2 0
25 - 50 2% 91 36 8 19 2 5 0
50 - 100 3% 117 73 20 39 3 9 0
100 - 200 7% 187 151 39 82 6 20 0
200 - 400 17% 290 301 93 152 11 37 0
400 - 600 14% 404 495 173 229 18 59 0
600 -
1000 19% 514 781 343 290 35 84 1
> 1000 31% 588 2181 1559 282 133 117 0
Grand
Total 100% 413 960 586 213 55 70 0
61% 22% 6% 7% 0%

Table 1.1
Thus it was seen that 14% of the customers were the segmented customers.

The Objective of this project, thus, was to increase this recharge percentage from 48% to at
least 60%.

34
 Rchg
599
Total
Total Local Offnet STD STD
SLAB % Rchg Ild
Og onnet local onnet offnet
April
0 3% 13 0 0 0 0 0 0
1 – 25 3% 56 10 1 4 2 3 0
25 – 50 1% 80 36 4 11 8 11 0
50 – 100 2% 135 74 8 18 17 26 0
100 – 200 5% 195 152 13 39 37 53 1
200 – 400 9% 285 303 28 77 78 101 0
400 – 600 10% 409 502 52 120 142 156 1
600 -
1000 19% 538 788 81 166 264 229 1
> 1000 62% 914 2586 207 179 1677 374 1
Grand
Total 100% 666 1632 130 141 997 271 1
16% 18% 127% 34% 0%
Table 1.2
Thus it was seen that we have to target customers below 62%.
METHODOLGY:
• Primary research:
The major requirement of the project was to increase our on net community. The
research and the surveys conducted were mainly primary in nature and involved
telephonic interviews of such customers who had taken up the STV’s recharge in the
month of June and not in May. For keeping the process simple yet free from errors, a
sample size of 30 people was taken. 30 customers for each of the special tariff voucher
were interviewed to make the sample a true representative of the population.

FINDINGS:
Following were the findings of the varied response from the customers:

35
 (x axis=
MRP of the
STV)

(y axis=
percentage
of

Fig 6.1

A= wasn’t aware of expiry or didn’t remember

B= didn’t need the STV anymore

C=others

Responses:

1) STV Rs.27/ -

• 50% of the respondents said that either they were not aware that the voucher was
valid only for 30 days or they forgot that the validity had expired.
• 20% of the respondents said that their calls are mostly off net.
• 30% of the respondents pointed out varied reasons like they did not feel the need
to recharge, or the shopkeeper gave them incomplete or incorrect information
regarding the STV.

36
 2) STV Rs.29/ -

• 45% of the respondents replied that they did not need the voucher during this
period.
• 40% of the respondents cited that either they were not aware that the voucher
was valid only for 30 days or they forgot that the validity had expired.
• Rest of the respondents gave various reasons.

3) STV Rs.79/-

• 60% of the respondents replied that they did not need the voucher during this
period.
• 25% of the respondents cited that either they were not aware that the voucher
was valid only for 30 days or they forgot that the validity had expired.
• Rest of the respondents gave various reasons.

4) STV Rs.77/-

• 50% of the respondents find it expensive

• 30% of the customers said that they mostly call STD off nets
• Few said that they were unaware about the validity of 30 days.
• Remaining cited various reasons.

PROBLEM AREAS:

37
It was seen that most of the respondents who had taken various STVs cited that either they
were unaware of the 30 days validity or they forgot to get the recharge. Reliance did not have
any feature to notify customers on the expiry of special tariff vouchers.
In order to overcome this problem it was suggested that these customers must be reminded
about the expiry of their tariff vouchers and by emphasizing the benefits of these products the
customers were encouraged to recharge with the STVs.

STRATEGY ADOPTED:

A communication plan was devised for the customers in order to notify them on the expiry of
the special tariff vouchers.

There are three basic tools for communication that are generally used by the UnR team in
order to notify the customers and promote the various new offers to the customers. The first
one is the short message service (SMS) that are sent by the company to its customers. SMSes
are known to be a very effective communication tool if used properly after identifying the
target base.

The second method of communication is the Interactive Voice Response (IVR) in which, a pre-
recorded message is relayed on the target MDNs. This method is not known to be as effective
as SMS, because it has been observed that many people disconnect the call before listening to
complete message being relayed.

The third and most expensive method of customer communication is the Tele-calling. Reliance
communication has outsourced it tele-calling needs to an agency where the CDMA telecalling is
handled by 6 telecallers trained by that particular agency. This method though expensive, is
known for the “human-element” involved in the process.

People generally tend to retain the message longer since the whole process is more “customer-
involving” as compared to the other two methods.

38
 Fig 7.1

Following was the communication plan devised to notify customers about the expiry of the
various tariff vouchers:

1. On a daily basis a list of all those customers was generated whose STV validity was
expiring within following two days.
2. All such customers were sent reminder SMSes a day before the expiry, on the day of
expiry and a day after expiry.
3. Also the customers were reminded about the expiry of STVs on the date of expiry of the
validity through IVR messages.
4. Customers who were using the STVs of Rs.59 and Rs. 77 were also informed about the
expiry date through telecalling.

PROMOTION FOR 299 AND 599 : -

39
Since this plan of 299 n 599 main task was to lock maximum customers in the the reliance
community before the implementation of MNP.so for that promotion should be proper.

Following communication plan was devised:

1. Television promotion: An advertisement was made featuring Hrithik for the promotion
of the “Simply unlimited” plan. It was shown on the television on various channels for
whole 1 month.

2. Radio: Promotion of the simply unlimited plan was also done through radio “BIG FM”

3. “Simply unlimited” was also promoted through Hoardings. These banners were shown
on all the prime location across the capital. So that the public will get to know about the
plan.

4. Posters: Posters of all PCOs were changed showing the “Simply unlimited” plan.

5. Communication to all the retailers, web world across the capital was done
simultaneously.

Result of this aggressive promotion was clearly evident from the huge recharging percentage.

OBSERVATION AND RESULTS:

40
 Fig 8.1

Renewal recharge percentage for the month June

7 May-28 June 2010

MRP Total Rech % Rech not rech %
299 17248 8527 64% 36%
599 10440 4614 50% 50%
Total 25946 11711 57% 43%
Table 2.1

INCREMENTAL REVENUE STATEMENT:

41
Once the increase in percentage of repeat recharge with the special tariff voucher is seen, it is
important to calculate the incremental revenue as compared to the month before promotion.

MRP earlier rech % now rech % differential % total incremental

first 15 days after 15 base
days
299 54% 64% 10% 9900 32076
599 48% 50% 2% 8700 7570
grand total 185176
Table 3.1

There are certain types of costs associated with all the promotional activities undertaken by a
company. The profit that is earned out of such activities is the net incremental revenue after
taking into account all direct and latent costs.

The costs associated with each of the tool of communication are summarized below:

Activity cost/month/units cost/day/unit units used total cost/month

IVR 16500/30000ivrs 0.0183 1000 550
telecalling 12500/person 416.67 4 50000
total/month 50550
Table 3.2

Thus, the net incremental revenue is calculated by subtracting the costs from the total
incremental revenue, as shown below.

42
MRP earlier rech % now rech % differential % total base incremental
299 54% 64% 10% 17300 32076

599 48% 50% 2% 10500 7570

grand total 185176

net incr
rev/month 134626
Table 3.3

WAY FORWARD:

It was seen that after the customers were reminded about the validity expiry of the STVs, the
repeat recharge percentage had drastically increased from 54% in May to 64% in June. For the
purpose of consistency, since the data before promotion was only taken for 15 days, even after
promotion the data for 15 days was considered.

Thus it was seen that if customers were reminded of the expiry of STV, the repeat recharge
ratio improved a lot. Taking these results into consideration, the company decided to create an
automated process wherein all those customers whose STV was about to expire were to be
reminded to take up the recharge, and the SMSes were sent by a computer generated database
on a daily basis. Till the time this system becomes functional, this database is generated
manually using MS Access.

CUSTOMER RELATIONSHIP
MANAGEMENT:
43
The industry today confronts the following challenges:

• Growing Customer Demand: Mass customization rather than mass marketing by

understanding customer preferences and behaviors
• Need for Revenue Optimization: Measuring and predicting ROI of Telecom companies
to maximize profits and minimize loss
• Growing Competition: Globalization of markets and consumers, de-regulation, resulting
in competition.

Fig9.1

CUSTOMER LIFETIME VALUE:

“Customer Lifetime value (CLV) is usually defined as the total net income that can be
obtained from a customer during their time in the system. CLV is a key metric in analyzing
customer churn, revenue and managing campaigns.”

44
 - Hoekstra and Huizingh, 1999

Fig 10.1

Figure: CLV - Conceptual Model

It is important to note that CLV of future customers is also referred to as Customer Equity (CE)
and this value helps in estimating the overall firm value.

CLV – One Solution for Key Business Process Outcomes and Issues:
• Acquisition: Better spend analysis and planning to acquire customers.
• Targeting: Identification of customer segment with maximum profitability for
focused campaigns.
• Return on investment (ROI): Realistic estimation of firm value.
CASE DATA:

In this study the customer database of Reliance communications (CDMA Prepaid) was analyzed.
The data at hand was collected for the period of April 2010 – June 2010. The data was analyzed
month on month and was totally based on the monthly usage of the particular MDN.

45
The customers who were using a particular connection for a while and there MOU was more
than 400, if in any particular month the usage for the same was constantly over 400 MOUs to
600 minutes of usage, the customer was assumed to be the segmented in that particular
month.

To keep the data free from any error arising on the account of coincidental drop in the MOU,
the numbers were also checked for usage in next two months and only those customers were
considered to have whose MOU were consistently higher for three consecutive months. Further
the data was categorized on different variables so as to form a basis to be able to predict the
recharge in coming months.

CASE FOCUS:

As mentioned previously customers’ value to a company is at the heart of all customer

management strategy.

The setup in telecom sector makes it hard to define customer recharge based on customer
profitability. The definition of the recharge in this case is based on the current usage indicator
(C1).

This indicator C1 tells whether the customer is currently using the prepaid services or not. This
simple definition makes it easy to detect the exact moment of recharge.

Those customers without a C1 indicator before the time period were not included in the
analysis. This definition made possible to focus on active customers and detect the high usage
customers. The major focus of this case is to find strong recharging predictors in order to
identify the characters that can lead to customer satisfaction and thus develop customer
retention tools.

46
METHODOLOGY:

47
Fig 11.1Details MRP 299 MRP 599
Total No of Rchg (nos) 2906 2838

Avg/day (nos) 484 473

FRC/day (nos) 19 36
Avg Loss in Rchg/Cust (Rs) -35 -56
Total Gain In Recharging (in 6 days)
12.6 Lac
(considering 249/999/490)

48
From the above table we can analyze that in the first 6 days, the customers who does recharge
of Rs.249/490/999 fell back to the simply unlimited plan and recharged with amount Rs 299
local pack and Rs 599 National pack. Total Gain in recharging in the 6 days came out to be 12.6
Lac. Also the new acquisition increased constantly.

COMPETITIVE SCENARIO:

Competition Unlimited local on net/min Unlimited on net/min

TATA

Free 30 local off net min/day Free 30 off net min/day

Sunday Free 60 local off net/min Sunday Free 60 off net/min
Validity 30 days validity 30 days

REASONS :

• Secondary Research:
Exhaustive secondary research was conducted in order to frame probable reasons for
revenue. The industry considers the following reasons to be the most common reasons
for customer attrition in telecom circles.

49
 Fig 12.1

• Primary Research:

During the primary research, a sample of 200 customers was taken. These were the
customers that had recharged during the month of May and were interviewed to
provide insights into the actual reasons.
Following were the responses of the survey. The customers were contacted through the
alternate contact numbers available in the database by the Customer Application forms
or CAFs.

50
FINDINGS:

Fig 13.1

Total MDNs 1014

No contact available 600
Not connected 327
Connected 87
Responses:

Never used that no. 32 37%

Poor network 25 29%
No particular reason 10 11%
Use it for STD 12 14%
Others 8 9%

51
During the research following were the main observations that helped build insights into the
customer satisfaction levels and reasons for high attrition:

• Of the 1000 customers of the sample, only 40% customers had alternate contact details.
This pointed towards poor database management by the sales force.

• Out of the contacted people, 37% responded that they never used any such Reliance
CDMA service.
• 29% of the interviewed customers cited that they stopped using the service due to poor
network and call drops due to the same.

• Almost 14% of the customers said that they used the number only at times for STD calls
as Reliance provides cheapest call rates for STD calls in the industry.

RECOMMENDATIONS:

• LTV(Long term Voucher) for 3 to 6 months with objective to lock the customers before
the implementation of MNP.
• STV(Short term voucher) for 15 to 20 days with the same objective to accumulate the
customers in the network before the implementation of MNP.

PROFILE OF CUSTOMERS

There are certain input variables required to design a recharge prediction model. In this case the input
variables are the categories on the basis of which customers are profiled.

The mobile phone user market has been segmented on the following parameters: -

1. Network connectivity

52
 2. Value for Money (Call rates and full talk time)
3. Value Added Services (caller tunes, Games etc. and the charges for these value added
services)

For a pre-paid customer, customer service is not of utmost importance as very rarely he
uses this service, customer care service is more used in the post-paid segment.

Though most post paid card users are not sensitive towards price and consider network
connectivity and customer services as important.

Customer information, when all combined, can be very large. It may consist of dozens of
fields. Analyzing data with many variables with conventional tools is a challenge. The data
being produced in this report has been analyzed using MS Access.

The customers are profiled on the following parameters:

Fig 14.1

DATA ANALYSIS:

53
Most of the data analysis was done using the database MS Access. Data mapping, data
extraction, data mining, all such activities were undertaken by running queries on Access.

On the basis of above mentioned categories, data was extracted from the database and the
targeted customers were subjected to the following analysis:

1) AGE ON NETWORK:

From the data available for last five months, all those MDNs who were high end user were
extracted.

Once these MDNs were available, they were mapped against their OTAF dates in order to find
out the average AON of the churned customers.

Following were the findings from that analysis:

1 2 3 4 5 6 7 8 9 10 11 1
YEAR
FEB 13% 14% 13% 13% 9% 11% 5% 10% 11% ― ― ―
MAR 10% 18% 7% 11% 11% 8% 10% 5% 9% 10% ― ―
APR 16% 15% 13% 6% 9% 9% 6% 8% 4% 7% 8% ―
MAY 11% 17% 10% 12% 5% 7% 7% 6% 7% 3% 6% 7%

Average 12% 16% 11% 11% 8% 9% 7% 7% 8% 7% 7% 7%

Maximum churn rate is seen during the initial four months of

joining the network.
Table 5.1

2) MOU ANALYSIS:

54
Every month the customers who recharged, were categorized on the basis of their minutes of
usage in the previous month i.e. the month before which they recharged

Following were the results of this analysis:

MOU May June

50-100 16% 13%
100-200 9% 8%
200-400 6% 6%
600-1000 57% 64%
> 1000 20% 25%
Table 5.2

It was seen that 50% of the customers used less than or equal to 400 minutes of talk time.

55
 3) MOU VS RECHARGE ANALYSIS MATRIX:

Segmentation of total base:

Recharge May – 2010
BUCKET
<> 50 - 75 75 - 100 300 - 400 400 - 500 500 - 1000 > 1000 TOTAL
0 2290385 2195 8601 492 1295 4360 2825 2222104
1 - 25 79721 4038 5057 141 65 256 42 89320
25 - 50 32725 6059 3428 109 32 143 25 42521
50 - 100 44546 16426 8276 354 88 347 51 70088
MoU 100 - 200 51770 32692 18150 1643 470 896 107 105728
200 - 400 42544 29406 20652 9968 3250 3273 312 109405
400 - 600 16317 8822 7052 24489 8343 5938 436 71397
600 - 1000 12868 5311 4518 38246 30178 26236 1392 118749
> 1000 16695 6159 4911 23265 24516 79366 31188 186100
TOTAL 2577001 108824 73423 102261 71961 129344 37653 3678369

Table 5.4

Once the total subscriber base was categorized, the categories of the recharged customers
were expressed as a percentage of these slabs.

HIGH
Value seeker True User
400
Mins
Miser
Casual
200
0 HIGH
Rs
Cum Top-up Recharging

Percentage of customers recharged in various categories w.r.t total base:

56
 1 - 50 50 - 100 100 - 150 - 200 - > 300
150 200 300
>1000 49% 30% 30% 15% 13% 11%
600 – 1000 32% 20% 15% 14% 10% 10%
400-600 24% 19% 14% 11% 9% 9%
200 - 400 20% 15% 16% 10% 7% 6%
100 – 200 37% 15% 10% 9% 8% 6%
50 - 100 14% 10% 9% 8% 7% 5%
25 - 50 17% 11% 10% 8% 6% 5%
> 25 18% 13% 11% 9% 8% 4%
Table 5.5

When compared to the total base, it was observed that of all the customers (from total base)
who lie in the slab of “MOU ≤ 400 and top up = 200”, 50% of them recharged in the next
month.

WEEKLY MOU ANALYSIS:

For all those customers who recharged in June, the weekly MOU in the month of May was
analyzed. It was observed that for all the customers, whose MOU in the third week in a
particular month, had decreased by more than 45% over the second week formed one-fourth
of the customers who recharged in the next month.

57
Total customers recharged in June = 191742

Customers whose MOU had decreased by more than 45% in the third week of May= 410784

Customers whose MOU had decreased by more than 45% in the third week of May and who
recharged in June = 50971

Thus, of the customers who recharged 26% exhibited this trend.

4) Quality of service:

To realize the satisfaction levels of the customers with the services provided by CDMA
prepaid it was necessary to have an insight into customer perception. For this, the
customer call data to the customer care center was analyzed.

58
 The customers who had recharged in a particular month were mapped against the SR
data in order to find out the number of calls made by the customer to the customer
care center prior to recharging. It was seen that only 0.5% of the customers who
recharged made calls to customer care center while others didn’t. This suggested that
most of the prepaid recharge takes place without any prior notification to the service
provider.

RESULTS:

Maximum churn rate is seen during the initial Two months of joining the network.

Customer recharged without prior notice.

When compared to the total base, it was observed that of all the customers (from total
base) who lie in the slab of “MOU ≤ 400 and top up = 200”, 50% of them recharged in
the next month.

Customers, whose MOU in the third week of a particular month had decreased by more
than 45% over the second week formed one-fourth of the customers who recharged in
the next month.

RETENTION MARKETING - A SYSTEMATIC APPROACH TO INCREASE RECHARGE:

59
At Reliance Communications we developed a systematic approach to identify the root causes of
customer recharge, and created an integrated program of activities to address them. This
enabled the organization to launch a program for much more dramatic improvements over
regular UnR activities.

At the product level, a customer retention tool was developed in order to provide more value
to customers and entice them to stay on network for a longer period of time.

Though it is a short term strategy the results show that such activities if continued and also
improved over time, could prove to be highly beneficial for the organization.

 DEVLOPING A CUSTOMER RETENTION TOOL:

It was proposed that a product must be devised, keeping this subset of customers in
mind who are high user. This product must provide some extra benefit to the customers
at a low price point so that the customers who don’t intend to stay on the network for
too long are somehow convinced of the benefits and end up beginning regular usage.
The product so developed was priced at Rs. 299/-. It did not provided a core talk time
.But customers can get unlimited Reliance-Reliance local calls and additionally 30
minutes per day to other operators.
This promo pack was sold only to those customers who had a higher probability of
usage.
Another product developed was priced at Rs. 599/-. It also did not provide a core talk
time. But customers can avail Reliance – Reliance Local+STD calls and additionally 30
minutes per day (Local+STD) to other operators.

 TESTING THE PRODUCT ON A SAMPLE BASE:

In the month of May, this scheme was implemented. Rather than extending the offer to
all the customers with a high probability of usage, it was suggested that first the
effectiveness of such a scheme must be tested on a monthly basis.

60
 Week on week a list of customers was generated whose MOU were consistently
between 400-600. Such customers were offered to recharge with the pack within the
coming week to avail the benefit of this pack. These packs were offered to these
customers because it was observed that most of the customers who recharged used
their mobiles majorly for STD calling.
 RESULTS OF THE SCHEME:

APRIL
8-14 may 15-21 may 22-28 may avg.
Recharge
uptake percentage 6.5% 4.7% 5.7%

regular usage
87% 88% 92% 231.3
after uptake

no usage after
13% 12% 8% 6.7
uptake

no uptake 93.5% 95.3% 94%

regular usage
57% 56% 61% 26.7
after no uptake

no usage 43% 42% 39% 1.4

TABLE 6.1
• The scheme was offered to customer base of almost 3lakh customers every week in the
month of May.
• The uptake percentage was found to be quite high at almost 16%.

61
 • Almost 90% of the customers, who took the offer, became regular users in the next
month as opposed to only 60% in case of those who did not take the offer.
• Average recharge in the month of April, by the customers who took the offer and
became regular users was Rs.231.30.
• This amount was almost 17% higher than those who did not recharge with the promo
pack.
• The total revenue generated by this pack thus was approximately Rs. 26, 00,000/-.

From the above mentioned results it was clear that this pack was quite successful in winning
back the customers. After reviewing the root causes of the problem, assessing priorities, and
looking at an integrated set of drivers, we developed a comprehensive program and bottom-
line targets:

• Developed near-term tactical solutions to increase overall recharging by approximately

16%.

• Proposed more strategic solutions to further increase overall revenue.

THE ROAD AHEAD:

• It is an exercise in futility to invest in acquiring new customers and increasing

the on net community . Though retaining a customer might require seven times
more effort than acquiring one it definitely makes more economic sense.
• Even from a long term perspective maintaining a good relationship with not just
profitable customers but all prospective customers will pay huge dividends. Only
a customer management system can provide a better understanding of the
customer, the operators’ most valuable asset.

62
 • It is important to deliver value to the customer and put in place offers that tie in
the customer. New products and services development is essential to ensure
loyalty.

• A Usage & revenue management solution can help devise more attractive
incentives, tariff bundles, loyalty schemes and proactive customer service along
with acquisition strategies to attract the right type of customer, thus reducing
fraud and bad debt—all key to a better bottom line.

THE BOTTOM LINE:

As the wireless industry evolves, and use of wireless Internet services expands, customer MOU
is expected to increase, which will lead to further destruction of shareholder value. Wireless
operators recognize the problem is growing but most have failed, so far, to effectively manage
it. Although many companies have there postpaid churn management system in place the task
ahead is to analyze and counter customer churn in the prepaid segment.
Without having to make major new investments in support systems, this approach helps to
maintain the base of key customers, increase customer acquisition effectiveness, and reduce
bad debt. In the end, this will provide a fundamental improvement in customer retention —
with real and long-lasting benefits to the bottom line.

63
ISSUES AND CHALLENGES FACING THE
ORGANIZATION

• Around 15% of the respondents that there is network problem with RCOMM, on
the other hand they found its competitors viz. Airtel, BSNL, TATA indicom
network connectivity of very good to good level.

• Around 16% retailers which are under puja enterprises distributor projected
problem with distributors. They don’t get schemes communicated in time by
distributor and distributor does not provide RCV & e-Top.

64
 RECOMMENDATION
On the basis of extensive study and research, here are some recommendation
and suggestion which may help the company to market the product and service
more profitability and increase its share in the Telecom market.

1. PROMOTIONAL ACTIVITIES
The company expand the budget allocation for promotional campaign in
center Bihar & Jharkhand. It has affected the sale service brand image of
Reliance especially in Jharkhand. Low supports in promotion have lead
to fluctuation in sale

There may be some useful tools which can be summed as follows:-

(1) Advertising – advertising should have a clear objective and message, which
has not been found in recent ads. Reliance is a faster growing
provider service in each state .every offers and schemes they should
show with proper message for benefit to the customer. Customers
want continuously exposure in Cable and Local newspapers.
(2) Persuasive Advertising :- Now there is a need of persuasive advertising for
Reliance service which can be moved into the category of
“comparative advertising”. It will help the company to establish the
superiority of its brand service through specific comparison of one or
more attributes and features.
(3)Technical Expertise:- The advertisement should show the companies
expertise, experience and pride in market the product service sale.

2. PRODUCT QUALITY AND TECHNICAL FEATURES

As for as some hand set mobile product quality is concerned, there is an urgent
need of technical up gradation of Reliance mobile product line. It would be
beneficial for company to launch some colors mobile hand set with the some added
feature and minimum price.

BIBLIOGRAPHY
65
BOOKS
Research Methodology byC R Kothari
Research Methods by Suresh C. Sinha and Anil K. Dhiman
Marketing Management by Philip Kotler
Essentials of Marketing research by Paurav Shukla

JOURNALS
[1] Ahola J., RintaRunsala E., Data mining case studies in customer profiling.
Research report TTE1200129, VTT Information Technology (2001).

[2] Au W., Chan C.C., Yao X.: A Novel evolutionary data mining algorithm with applications to
churn prediction. IEEE Transactions on evolutionary computation, Vol. 7, No. 6, Dec 2003.

[3] Bauer H., Hammerschmidt M., Braechler M.:The customer lifetime value concept and its
contribution to corporate valuation.Yearbook of Marketing and Consumer Research, vol. 1
(2003).

[4] Buckinx W., Van den Poel D.: Customer base analysis: partial detection of behaviorally loyal
clients in a noncontractual FMCG retail setting. European Journal of Operational Research 164
(2005) 252268

[5] Buckinx W., Verstraeten G., Van den Poel D.: Predicting customer loyalty using the internal
transactional database. Expert Systems with Applications xxx (2005)

[6] Candy J., Temes G.: Oversampling deltasigma data converters: theory, design, and
simulation. IEEEPC02741. New York (1992)

[7] The Radicati Group, Sun Java Communications Suite Total Cost of Ownership, 2005, available
at www.sun.com/software/products/communications/communications_tco_study
/wp_sun_java_ comm_suite_tco2005.pdf

[8] Rider Research. (2008). Mobile Media 2008: The Third Screen for Entertainment,
Buckingham: Rider Research.

[9] Palmer, M and Taylor, P. (2008). “Google homes in on revenues from phones” Financial Mail
13 February 2008 [Online]. Available at: http://www.ft.com/cms/s/0/667f13de-da60-11dc-
9bb9-0000779fd2ac.html?nclick_check=1 (Accessed: 14 Feb 2008).

[10] Syniverse Technology. (2004). A Global Perspective on Number Portability. US: Syniverse
Technology.

66
[11] McLeod, D. (2007). “Breakthrough nears” Financial Mail, 8 June 2007 [Online]
http://free.financialmail.co.za/ (Accessed: 8 June 2007).

[12] Middle East Africa Wireless Analyst (2007). MTN ponders hefty charges for VoIP users.
MAEWA Volume 5 Issue 6, 21 March 2007.

[13] Mobile Messaging Analyst. (2007a). U.S. avoids Europe’s MMS errors. Mobile Messaging
Analyst, November 2007.

[14] Mobile Messaging Analyst. (2007b). Mobile e-mail the messaging application to watch in
2008. Mobile Messaging Analyst, November 2007.

[15] MobileYouth. (2008). mobileYouth® 2008 report (2) – marketing & advertising, Vodacom
Intranet [Online]. Available at:
http://vodactls1/wizcat/Search_2006_New_look/adv_search_response.asp (Accessed: 25 Sep
2008).

[16] Mozer M. C., Wolniewicz R., Grimes D.B., Johnson E., Kaushansky H. Predicting Subscriber
Dissatisfaction and Improving Retention in the Wireless Telecommunication Industry. IEEE
Transactions on Neural Networks, Special issue on Data Mining and Knowledge Representation
(2000).

[17] Pindyck R., Rubinfeld D. Econometric models and econometric forecasts.

Irwin/McGrawHill (1998). ISBN 0071188312

WEBSITES
• www.google.com
• www.coai .in
• www.auspi .in
• www.rcom.co.in
• www.reliancemobile.com

ANNEXURES

67
 A-1

SMS REMINDERS:

59 Apke night pack ki validity samapt hone wali hai.Raat mein unlimited FREE Reliance 151
network par calls karne ke liye jaldi Rs59 se rechrg karein.Reliance

29 Apke night pack ki validity samapt hone wali hai.Raat mein unlimited FREE Reliance 151
network par local calls ke liye jaldi Rs29 se rechrg karein.Reliance
77 Ab 77 ke Rechg par payein 1st Onnet call @50p/min . after 1st call subsequent onnet calls for 136
the day at 20p/min. valid for 30 days. Reliance

27 Apke tariff pack ki validity samapt hone wali hai.Sabhi local reliance calls sirf 20p/m 142
mein pane ke liye jaldi Rs27 se rechrg karein.Reliance
299 Reliance Dhamaka! Ab Simply Unlmtd baatein karen kisi bhi LOCAL number par sirf Rs-299 138
mein. To activate sms LOCAL to 51111. T&C. Reliance

599 Reliance Dhamaka! Ab Simply Unlmtd baatein karen sabhi STD ya LOCAL phone par Rs 599 138
mein.To activate sms NATIONAL to 51111. T&C. Reliance

A-2

TELECALLING SCRIPT:

Bright Night pack 59/-

68
Namaskar sir,

Main reliance mobile ki taraf se <name> bol raha/rahi hoon. Main apke kewal 2 minute lena chahunga.

Sir darasal apne pichle mahine night pack recharge karwaya tha, jismey apko sabhi reliance calls ratri ke
11 baje se subah 6 baje tak BILKUL MUFT mil rahi thi. Yahi nahi, doorsi sabhi mobile calls KEWAL AADHI
DARON par uplabdh thi. Is pack ke keemat matr 59 rupay ki thi.

Sir iski validity 30 din ki thi aur ab yeh expire ho chuka hai.

En suvidhao ka labh uthate rehne ke liye 59/- ka recharge jald se jald karwayein. Yeh ek seemit avdhi
offer hai.

Sir janna chahunga ki kya aap AAJ yeh recharge kara lenge?

Reliance mein baat karney ke liye apka dhanyawaad, apka din mangalmay ho.

Onnet Pack 77/-

Namaskar sir,

Main reliance mobile ki taraf se <name> bol raha/rahi hoon. Main apke kewal 2 minute lena chahunga.

Sir darasal apne pichle mahine 77/- ka ek recharge karwaya tha, jismey apko sabhi local aur STD reliance
to reliance calls KEWAL 20P PRATI MINUTE mein mil rahi thi.

Sir iski validity 30 din ki thi aur ab yeh expire ho chuka hai.

En suvidhao ka labh uthate rehne ke liye 77/- ka recharge jald se jald karwayein. Yeh ek seemit avdhi
offer hai.

Sir janna chahunga ki kya aap AAJ yeh recharge kara lenge?

Reliance mein baat karney ke liye apka dhanyawaad, apka din mangalmay ho.

A-3

IVR SCRIPT:

69
 Namaskar, yeh call apko jankari dene ke liye hai ki apke night calling pack ki validity AaJ samapt ho
rahi hai. UNLIMITED FREE local aur STD calls reliance network par kartey rehne ke liye turant 59
rupay se recharge karein. Free calls raat 11 baje se subah 6 baje tak manya hongi. Isi ke saath anya
sabhi calls keval AADHI daron par uplabdh hongi. Toh phir der kis baat ki, aaj hi 59 rupay se recharge
59 karein aur is offer ka laabh uthate rahein. Dhanyavad.

Namaskar, yeh call apko jankari dene ke liye hai ki apke night calling pack ki validity AaJ samapt ho
rahi hai. UNLIMITED FREE local reliance to reliance calls kartey rehne ke liye turant 29 rupay se
recharge karein. Free calls raat 11 baje se subah 6 baje tak manya hongi. Toh phir der kis baat ki, aj
2 29 hi 29 rupay se recharge karein aur is offer ka laabh uthate rahein. Dhanyavad.

Namaskar, yeh call apko jankari dene ke liye hai ki apke local pack ki validity aaj samapt ho rahi hai.
Sabhi local reliance to reliance calls KEVAL 20p prati minute mein kartey rehne ke liye turant 27 rupay
27 se recharge karein.Dhanyavad.

Namaskar, yeh call apko jankari dene ke liye hai ki apke tariff pack ki validity aaj samapt ho rahi hai.
SABHI STD aur local reliance to reliance calls KEVAL 20p prati minute mein kartey rehne ke liye
77 turant 77 rupay se recharge karein. Dhanyavad.

70
 A-4

A SPECIMEN OF MIS REPORT:

Status
Executive Calling 1

Total Data 39

Called 39
Answered 15
% Answered 38%

Unanswered 24
No Answer 24

Status
Executive Calling 6

Total Data 182

Called 182
Answered 61
% Answered 34%

Unanswered 121
No Answer 121

71
 A-5

RECORD OF DAILY TRACK OF 299 n 599 RECHARGE

12/5/2010

MRP Total Rech % Rech

Local pack 299 2210 665 43%
National
pack 599 3656 610 42%
Total 5946 1275 45%
Sample 299 138 457 41%
Sample 599 222 428 35%
Total 1597 684 43%

10/5/2010
MRP Total Rech % Rech
Local pack 299 1875 427 41%
National
pack 599 3108 384 40%
Total 1887 931 44%
Sample 299 119 448 40%
Sample 599 196 366 34%
Total 1397 582 42%

72
 MRP Total Rech % Rech
Local pack 299 712 182 40%
National
pack 599 874 218 38%
Total 20132 8383 42%
Sample 299 110 246 42%
Sample 599 183 162 34%
Total 1297 529 41%

8/5/2010
MRP Total Rech % Rech
Local pack 299 10 7 41%
National
pack 599 15 10 39%
Total 25 17 41%
Sample 299 34 33 35%
Sample 599 54 54 35%
Total 1100 87 38%

A-6

RAW DATA FOR ANALYSIS:

MDN_NO mou_apr mou Rech rech

73
 slab May slab
8010001XYZ 400 >400 >249 >200
8010001XYZ 400 >400 >249 >200
8010001XYZ 400 >400 >249 >200
8010008XYZ 400 >400 >249 >200
8010008XYZ 400 >400 >249 >200
8010011XYZ 400 >400 >249 >200
8010013XYZ 400 >400 >249 >200
8010013XYZ 400 >400 >249 >200
8010015XYZ 400 >400 >249 >200
8010017XYZ 400 >400 >249 >200
8010017XYZ 400 >400 >249 >200
8010023XYZ 400 >400 >249 >200
8010025XYZ 400 >400 >249 >200
8010027XYZ 400 >400 >249 >200
8010027XYZ 400 >400 >249 >200
8010038XYZ 400 >400 >249 >200
8010043XYZ 400 >400 >249 >200
8010046XYZ 400 >400 >249 >200
8010049XYZ 400 >400 >249 >200
8010049XYZ 400 >400 >249 >200
8010057XYZ 400 >400 >249 >200
8010060XYZ 400 >400 >249 >200
8010064XYZ 400 >400 >249 >200
8010069XYZ 400 >400 >249 >200
8010071XYZ 400 >400 >249 >200
8010071XYZ 400 >400 >249 >200
8010074XYZ 400 >400 >249 >200
8010077XYZ 400 >400 >249 >200
8010077XYZ 400 >400 >249 >200
8010077XYZ 400 >400 >249 >200
8010079XYZ 400 >400 >249 >200
8010082XYZ 400 >400 >249 >200
8010082XYZ 400 >400 >249 >200
8010082XYZ 400 >400 >249 >200

A-7

MOU TREND ANALYSIS DATA

Jun mou May %

mou change
645.85 1010.86 -36%

74
 1693.27 2742.34 -38%
66.25 97.27 -32%
86.92 133.32 -35%
99.75 145.63 -32%
475.73 751.17 -37%
1474.46 2318.61 -36%
214.14 335.03 -36%
925.58 1325.59 -30%
1679.88 2492.32 -33%
2431.36 3741.58 -35%
883.08 1270.83 -31%
1025.26 1577.34 -35%
99.76 159.86 -38%
30.43 44.58 -32%
476.39 703.04 -32%
338.12 496.74 -32%
120 189.56 -37%
414.03 675.8 -39%
1983.4 2925.95 -32%
112.02 170.67 -34%
79.22 118.27 -33%
276.01 416.41 -34%
254.49 376.47 -32%
68.76 110.2 -38%
300.03 473.57 -37%
393.79 636.1 -38%

A-8
PRIMARY RESEARCH DATA SAMPLE:

Alt No response
8010001XYZ
8010001XYZ
8010001XYZ
9871776XYZ nc
9015808XYZ nc
8010001XYZ
8010001XYZ
9312876XYZ nc
9991183XYZ nc
8010002XYZ
9015597XYZ confused
9871060XYZ nc
8010591XYZ nc

75
8001101XYZ nc
8010003XYZ
8001101XYZ nc
8010003XYZ
8010004XYZ
9955903XYZ nc
9311111XYZ nc
8010004XYZ
9010268XYZ nc
9891063XYZ
9555613XYZ nr
8010028XYZ nc
8010006XYZ
8010006XYZ
9811560XYZ nc
8010008XYZ
8010008XYZ
9313962XYZ nc
9971643XYZ nr
9560488XYZ nc
8001101XYZ nc
8001101XYZ nc
8010009XYZ
9990999XYZ nc
9312851XYZ never used that no.
8010009XYZ
9716802XYZ nc
8010010XYZ
8001101XYZ nc
8010001XYZ
9717877XYZ nr
8010010XYZ
8010010XYZ
8010010XYZ
8010011XYZ
8010011XYZ
9818040XYZ Nr
8010012XYZ
8010012XYZ
8010012XYZ
9899179XYZ Nc
8001101XYZ
9718342XYZ never used that no.
8010012XYZ
8010012XYZ
8010013XYZ
9910184XYZ Nr

76
8010013XYZ
9312213XYZ Nc
8010015XYZ
9983274XYZ Nc
9818964XYZ Nc
9717263XYZ Nc
8010016XYZ
8010016XYZ
8001101XYZ
8010016XYZ
8001101XYZ
8010514XYZ
8010016XYZ
9868324XYZ never used that no.
9811292XYZ moved to other city
8010016XYZ
8001101XYZ

77
 Deleted: ¶

CASE STUDY
ROLE OF SERVICE SECTOR IN ECONOMY

The Indian economy witnessed GDP growth rate of 6.9% on top of a high 8.5% growth achieved
in the preceding year. The spirit that the economy has achieved was demonstrated by the fact
that this growth of 6.9% took place in the face of deficient monsoons, steeps hike globally in oil
and steel prices and a change in the government in the center.
While the industrial sector registered a growth of 8.3% reflecting good spirits in manufacturing
activities, service sector maintained its earlier momentum and grew by 8.6%. However the
agricultural sector, growth increased by only 1.1% due to erratic monsoon. In spite of a
deceleration in the overall growth rate, the continuing momentum in the growth of industry
and service sectors has kept business confidence at high level.
The Indian economy has finally reaped the benefits of just over a decade of reforms.
Economists now expect the Indian and Chinese economies to be the world's growth engines in
the 21st Century. The economy has recorded a growth rate of 6% per annum since 1990,
reducing poverty by 10% points in the process. Industry is no longer a State monopoly. Almost
all sectors have been opened up to the private sector. Import licensing has been abolished.
Foreign exchange reserves have climbed rapidly from USD 40 billion in March 2001 to USD 50
billion in March 2002 to 142 billion in June of 2006. As with any growing economy the sectoral
composition of GDP has been changing with the services sectors showing an increased share
and that of agriculture declining to 20%. The fastest growing sector in the economy has been
the services sector, which now accounts 50% of GDP.

To become an economic power, technology and economy need to be considered in an

integrated manner rather than as separate entities. With the opening up of economy, Indian
industry needs to be globally competitive. Hence, “what is required is a clear vision of what can
be achieved and how best to achieve it". The Indian Industry will have to support the nation in
acquiring economic leadership and progress by 2020. The foundation of this leadership will
depend to a great extent on the technological excellence of the firms.

DEFINITION AND MEANING

A service is an act or performance offered by one party to another. They are economic activities
that create values and provide benefits for customers at specific time and place as a result of
bringing about a desired change in or on behalf of the recipient of the service.

The term service is not limited to personal services like medical services, legal services,

78
professional services etc. according to marketing experts and management thinkers the
concept of service is a wider one. The term ‘services’ are defined in number of ways but not a
single one is universally accepted.

Following are some important definitions:

According to DONALD COWELL,

“Goods are produced, sold and consumed, where as services are sold and then produced and
consumed.”

According to WIKIPEDIA,
In economics and marketing, a service is the non-material equivalent of a good. Service
provision has been defined as an economic activity that does not result in ownership, and this is
what differentiates it from providing physical goods. It is claimed to be a process that creates
benefits by facilitating either a change in customers, a change in their physical possessions, or a
change in their intangible assets.

As per COMMUNICATION EXPERTS,

A type of task that is performed by a Service Element for a Service Consumer (client). A Service
is the actual product that a customer uses, such as a POTS line, cellular line, Internet Protocol
connection and so on.

CHARACTERISTICS

The distinct characteristics of services are mentioned below.

(1) Intangibility: Services are intangible we cannot touch them They are not physical objects.
According to Carman and Uhl a consumer feels that he has the right and opportunity to see,
touch, hear, smell or taste the goods before they buy them. This is not applicable to services.
The buyer does not have any opportunity to touch, smell, taste the services

(2) Perishability. Service has a high degree of perishability. Here the element of time assumes a
significant position. If we do not use it today, it is lost forever. If labour stops working, it is a
complete waste. It cannot be stored. Utilised or unutilised services are an economic waste. An
unoccupied building, an unemployed person, credit unutilised, etc. are economic waste.
Services have a high level of perishability.

(3) Inseparability: Services are generally created or supplied simultaneously. They are

79
inseparable. For an e.g., the entertainment industry, health experts and other professionals –
they create and offer their service at the same given time. Services and their providers are
associated closely and thus, not separable. Donald Cowell states 'Goods are produced, sold and
then consumed whereas the services are sold and then produced and consumed'.

(4) Heterogeneity: This character of services makes it difficult to set a standard for any service.
The quality of services cannot be standardised. The price paid for a service may either be too
high or too low as is seen in the case of the entertainment industry and sports. The same type
of services cannot be sold to all the consumers even if they pay the same price. Consumers rate
these services in different ways. This is due to the difference in perception of individuals at the
level of providers and users. Heterogeneity makes it difficult t

(5) Ownership: In the sale of goods, after the completion of process, the goods are transferred
in the name of the buyer and he becomes the owner of the goods. But in the case of services,
we do not find this. The users have only an access to services. They cannot own the services.
For e.g. a consumer can use personal care services or medical services or can use a hotel room
or swimming pool, however the ownership remains with the providers.

(6) Simultaneity: Services cannot move through channels of distribution and cannot be
delivered to the potential customers and users. Thus, either the users are brought to the
services or providers go to the users. It is right to say that services have limited geographical
area. According to Carman and Uhl, "Producers of services generally have a small size area of
operations than do the producers of items, largely because the producer must travel to get the
services or vice-versa.

When the producers approach the buyer time is taken away from the production of services
and the cost of those service is increased On the other hand it costs time and money for the
buyers to come to producers directly Here the economics of time and travel provide incentives
to locate more service centres closer to prospective customers, resulting in emergence of
smaller service centers.

(7) Quality Measurement: A service sector inquires another tool for measurement We can
measure it in terms of service level It is very difficult to rate or quantify total purchase. E g we
can quantify the food served in a hotel but the way waiter serves the customer or the behavior
of the staff cannot be ignored while rating the total process.

(8) Fluctuating Demand: Generally, the services are fluctuating in nature During the peak tourist

80
season there is an abnormal increase in the demand of services Therefore, while identifying the
salient features of services one cannot ignore the nature of demand For e g tourists go to hill
stations during summer season wherein public transport utilities are used substantially. This
indicates that flexibility is the important feature of service

INTRODUCTION:

The BSNL – Bharat Sanchar Nigam Ltd., is the largest telecom service provider of India offering
the full range of communication services – basic land line, wireless mobile(CDMA), Leased line
circuits, Internet telephony, etc. catering to various segments SOHO ( Small office Home office),
Corporate, Individuals, Business groups. In terms of the revenue yield it is found that 15% of the
subscriber yields more than 85% of the revenue and this group when distilled further who
result in a 5 % of the customer population yielding 50 – 60% of the billing. In a competitive
environment it is this group of customers who are most vulnerable to be lured away by the
private operators (competitors). The following information has made an attempts to define the
various relationship markets present in the segment.

DEFINING THE MARKETING MIX - 7 Ps

The product is provision of communication service( Basic Telephony, mobile ( CDMA, GSM)
technologies, Dedicated leased circuits, Voice over IP, Internet services)

The price is based on the usage charges as per tariff apart from the installation cost. Discounts
are offered to heavy callers.

The place of delivery is the customer premises/location.

The promotion very limited till recently. However now logos, brands names for different
services, slogans (Connecting India) etc have been coined. Very recently advertisement in the
print media as well as television commercials has been released. (www.bsnl.co.in)

The people have a key role to play since it is a service sector. However this is the weakest link in
the marketing mix since the monopoly attitudes have hardly changed at the ground level.

The process is another one of the neglected Ps. A lot of corrective processes have being
provided for after the complaints by line up of escalations, meeting the senior officials etc. Yet
the preventive/ proactive processes are not sufficient/ (work –in – progress).

81
The physical evidence (being a service sector) depends on the maintenance of front end staff
dealing with customer care, the office premises and facilities available there, toll free numbers,
call centers.

The main problem is faced by the company is that it cannot handle its existing customers in an
right manner like partly customers are satisfied with the service and partly are still need to be
satisfy, this can be done only through taking customer care as main area while segmentation.

CUSTOMER CARE & SEGMENTATION:

Apart from the marketing mix described above the steps taken towards customer care can be
taken through dividing them in different groups
These may be grouped into preventive processes, empowering the grass root level, work in
progress which are very critical in customer service/ improving service availability level, Bill
payments made easy and some measures quite frivolous as application form being made free.(
A typical example of the monopoly hangover).

The Company has identified the high callers or those who make calls worth more than Rs.5,
000/- per month as the high calling segment. This kind of segmentation purely based on the
revenue yield alone results in a heterogeneous group of high calling individuals, companies,
corporate with inter city presence. Neither has this group been refined further for preferential
differentiation nor are any of the measures specified in the customer care specifically targeted
towards this groups. Of course the system corrections undertaken would benefit the high
callers as well. Hence apart from providing certain billing discounts or special meeting time the
issues cannot be very clearly addressed.

Classification of customers (Jones and Sasser Model (1995) )

If one were to use this model for classifying this segment further it would be seen that about
10% would be in the Hostage category. They are vocal, corner the available resources for
servicing and are complaining in nature. And the experience of the BSNL managers is that this
category normally contributes less to the revenue pool and hence would not be attractive to
the competition. A majority about 60%of the segment would be in the Mercenary category,
ready to make a shift, about 20% would be in the defector and terrorist segment (this would
include the media and think tank users of the communications) would be make use of every
opportunity to spread the negative image and a loyal group of about 10% who are satisfied and
stay with the company through the problems.

82
BSNL should reward the loyal group by giving strength to their voice, try to neutralize the
impact of the defector terrorist group using pressure strategy and try to move the Mercenary
to the Loyal group. It should also know how to shake off the hostage group without explicitly
stating so

83
 SYNOPSIS
BUSINESS DEVELOPMENT – CDMA PREPAID

STUDENT: - Vaibhav Tyagi

INDUSTRY GUIDE: - Mr. Vikas Vikram

FACULTY GUIDE: - Mr. Aditya Kumar Gupta

Objective
To study the impact of the unlimited plan on the consumer usage and formulating its ways to
enhance revenue

Finding
The success behind the brand name of R com is in its massive marketing and bringing into
market customer suitable products

Recommendation
• LTV(Long term Voucher) for 3 to 6 months with objective to lock the customers before
the implementation of MNP.
• STV(Short term voucher) for 15 to 20 days with the same objective to accumulate the
customers in the network before the implementation of MNP.

Conclusion
My experience at R com has been extremely enriching and I have been bestowed with the best
possible practical knowledge in the field of Market Analysis and Customer Satisfaction.

I am highly obliged to Mr. Vikas Vikram for sharing his precious time with me to enhance my
knowledge in product marketing. I would to thank my Faculty Guide, Mr Aditya Kumar Guota
for his able guidance and support without which I would not have been able to shape my
project.

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