TELECOM REPORT

MARKETING PROJECT

Submitted by
Vinamrata Gandhi (B14060)
Aayush Sharma (B14126)
Akshay Pandita (B14129)
Gagandeep Singh (B14143)
Karan Chhabra (B14149)
Mugdha (B14157)

Contents
INTRODUCTION TELECOM SECTOR ....................................................................................... 2
MAJOR PLAYERS .............................................................................................................................. 4
Airtel .................................................................................................................................................. 4
Vodafone ............................................................................................................................................ 4
Idea Cellular ...................................................................................................................................... 4
ENVIRONMENTAL ANALYSIS ....................................................................................................... 5
Political .............................................................................................................................................. 5
Economic............................................................................................................................................ 5
Social .................................................................................................................................................. 5
Technology ......................................................................................................................................... 5
Environmental ................................................................................................................................... 6
Legal ................................................................................................................................................... 6
MARKETING MIX OF VODAFONE ............................................................................................... 7
Product ............................................................................................................................................... 7
Price.................................................................................................................................................... 7
Place ................................................................................................................................................... 7
Promotion .......................................................................................................................................... 8
BUSINESS MODEL ............................................................................................................................. 9
Airtel .................................................................................................................................................. 9
Vodafone ............................................................................................................................................ 9
TRENDS IN TELECOM INDUSTRY .............................................................................................. 11
MARKETING STRATEGY OF VODAFONE ................................................................................ 12
Segmentation ................................................................................................................................... 12
Targeting.......................................................................................................................................... 12
Positioning ....................................................................................................................................... 12
COMPETITOR ANALYSIS.............................................................................................................. 14
Wireless Market share .................................................................................................................... 14
Threat of a fresh entrant ................................................................................................................ 15
Competition in the 3 g network ..................................................................................................... 15
Number portability ......................................................................................................................... 15
LATEST NEWS AND ARTICLES ................................................................................................... 17
CONCLUSION ................................................................................................................................... 19
REFERENCES .................................................................................................................................... 20

INTRODUCTION TELECOM SECTOR

Globally the telecom industry is in the midst of a transformational shift, driven by a huge
surge in data traffic on telecom networks. A number of mobile operators are rolling out 4G
networks across the globe. A number of wireline operators are rolling out Fiber to the
home, providing enormous bandwidth up to 100 Mbps to the subscribers. Users will be able
to gravitate to fastest, most reliable and best priced wireless networks available. The
migration of speed seeking data users to 4G may be accompanied by a rise in volume of
voice calls on legacy 2G and 3G networks. Operators are offering very competitive tariffs to
encourage more of their subscriber base to use mobile data services. 4G customers are likely
to generate higher Average Revenue Per User (ARPU) than 3G customers.
Major Achievements and Underachievement of India Telecom sector (Comparing with
National Telecom Policy 1999)
ACHIEVEMENTS
Tele density of 7 by 2005 and 15 by

UNDERACHIEVEMENTS
Strengthen R&D efforts and provide an

2010.

impetus to build world-class

manufacturing capabilities.

Achieved 78.5 by June 2013

Making tariff structure more

affordable.

Lowest tariffs in the world

Increase rural tele density from 0.4 to

4 by 2010.

Achieved rural tele density of 41.9

by June 2013

Achieve telecom coverage of all

Achieve efficiency and transparency in

spectrum Management
Provide reliable media to all exchanges
by 2002.
Encourage development of telecom
facilities in
Remote, hilly and tribal areas of the
country.

villages.

Sector related skill development.

> Broadband penetration.

Achieved coverage of 97.6% by

June 2011

High speed data and multimedia

capability provided to all towns with a
population greater than 2 lakhs.

Market Size
Indias GSM operators added 2.58 million rural subscribers in April 2014, taking the total to
297.16 million. Also, Cellular Operators Authority of Indias (COAI) data suggests that the
overall GSM subscriber base increased by 4.97 million in April 2014 taking the total GSM
subscriber base to 726.90 million customers.
The COAI data also suggests that telecom provider Bharti Airtel provided the most number
of customers in the month of April, about 990,000 new subscribers followed by Vodafone
and Idea Cellular.
Data traffic powered by third-generation (3G) services grew at 146 per cent in India in 2013,
higher than the global average, according to an MBit Index study by Nokia Siemens
Networks (NSN).
With Bharti Airtel becoming the second largest telecommunications provider in Nigeria and
Tata Communications entering into strategic partnerships with countries such as Australia,
Germany, Austria and Malaysia, it can be observed that Indian telecommunication providers
are doing quite well in the global market.

MAJOR PLAYERS
Airtel
Bharti Airtel Limited is a leading global telecommunications company with operations in 20
countries across Asia and Africa. Headquartered in New Delhi, India, the company ranks
amongst the top 4 mobile service providers globally in terms of subscribers. In India, the
company's product offerings include 2G, 3G and 4G wireless services, mobile commerce,
fixed line services, high speed DSL broadband, IPTV, DTH, enterprise services including
national & international long distance services to carriers. In the rest of the geographies, it
offers 2G, 3G wireless services and mobile commerce. Bharti Airtel had nearly 287 million
customers across its operations at the end of Dec 2013.

Vodafone
British multinational telecommunications company headquartered in London and with its
registered office in Newbury, Berkshire. It is the world's 2nd-largest mobile
telecommunications company measured by both subscribers and 2013 revenues (in each case
behind China Mobile), and had 434 million subscribers as of 31 March 2014. In India it is
the second largest mobile network operator in India after Airtel by subscriber base. It is based
in Mumbai, Maharashtra. It has approximately 160 million customers as of December 2013.
It offers both prepaid and post-paid GSM cellular phone coverage throughout India with good
presence in the metros

Idea Cellular
Idea Cellular is an Aditya Birla Group Company, India's first truly multinational corporation.
Idea is a pan-India integrated GSM operator offering 2G and 3G services, and has its own
NLD and ILD operations, and ISP license. With revenue in excess of $4 billion; revenue
market share of nearly 15%; and subscriber base of over 121 million in FY 2013, Idea is
Indias 3rd largest mobile operator. Idea ranks among the Top 10 country operators in the
world with a traffic of over 1.5 billion minutes a day.

ENVIRONMENTAL ANALYSIS
Macro environments are hard to control for any business organization. PESTEL analysis will
help to find out the external factors which affect the potential of Vodafone.

Political
Political factor is one of the macro factor which play important role to develop
telecommunication operating business in any country. It may include from the government
licensing process, legal issues, regulation etc. to various pressure of pressure group. These
factors play vital role to build infrastructure for any network operating industry.

Economic
The rates of economic growth, inflation, income distribution process etc are the economic
factors which also influence the growth of telecommunication operating network. Growing
income or increase in purchasing power (Rs 12000 in 2002 to Rs 3300 in 2008) which may
help to increase in the usage of Vodafone. Similarly falling prices of handset could affect the
market of Vodafone. Rising in telecommunication density which will target 45% by 2010 is
also challenge.

Social
Growing demand for broad band services among youth which affect the level of competition
in telecommunication sector. Increase in urban population which may affect the market of
Vodafone. Rapid urbanization and rapid increase in income increase more competition for
Vodafone in India.

Technology
Some of technological advancement in India is CDMA- there are already three big players in
this segment Reliance, Tata. 3G- value added services potential still to be tapped fully.
2G/3G- GSM currently commands 70% of mobile subscribes in India. These current
scenarios of technological advancement in Indian telecommunication market could pressure
Vodafone also. Vodafones competitors are now offering the same GSM hand set as
Vodafone. So these all prove more external pressure and new challenge for Vodafone.

Environmental
The Indian government is forcing Vodafone and other telecommunication operators to be
environmental friendly. Like while putting up towers any negative externalities given out will
have to be paid by a fully social cost by Vodafone.

Legal
Vodafone is in only one legal force that it is to provide safety in the use of its services
through the handsets they sell and provide. So this means that development cost will need to
be done to produce handsets that attract low radiation.
Vodafone is one of the popular brand in telecommunication industry of Indian and able make
different position in the mind of Indian customers. However the telecommunication is one of
the most competitive businesses in India but Vodafone seem quite successful to fulfil the
requirement of various customers by offering different services in India. Technology is one of
the crucial factors for this industry and growing demand of young customers are increasing
day by day so company should try to follow the more latest technology which will help them
to be more strong among competitor.

MARKETING MIX OF VODAFONE

Product
Product is the major variable in marketing mix, because without product no other
variables can work. Product refers to tangible, physical products as well as services
(netmba.com).

The brand Vodafone was itself able to sell its products in the Indian market but
Vodafone introduced various suitable and affordable ranges of products and services
for the various range of customers in India.

For the low income customers, Vodafone provided facilities of pre-paid mobiles and
for the high income customers, Vodafone served with their post-paid mobiles.

Vodafone also introduced easy to use, low cost handsets addressing the rural
community of India who cannot afford mobile phones at high prices.

Price
Price plays an important part in the buyer/seller relationship. A trust develops
between seller and buyers, who mutually agree that prices will be set at a fair level. A
significance of price can be reduced when the factors such as quality and reliability of
service delivery is equal or greater than the price buyer is paying for the product
(Lancaster and Reynolds, 2004).

In case of India, Vodafone is in a low price strategy to gain high market share of the
people who are in the rural areas of India and cannot afford higher or premium prices.

As 71% of total population of India lives in rural part (CIA, fact-book 2008),
Vodafone has taken this strategy to reach out to the higher volume of people.

Vodafone has introduced various products with the range of prices which a customer
has option to choose and customers also receive the quality service they pay for their
products.

Place
Vodafone has opened maximum number of outlets in each and every part of India.
The outlets are direct distribution through their own distributors, indirect distribution
through associate distributors to the local retailers, who provide products and services
to the local customers.

Vodafone has also established many service centres in almost every part of India, so
that the customer is always satisfied with the products and services of Vodafone and
we can see that the customers of Vodafone are significantly increasing every month.

Vodafone is also selling their products and services through their own website as well.

Promotion
The promotional mix comprises of advertising, sales promotion, selling and public
relations (Lancaster & Reynolds, 2004). Promotion refers to the method used to
inform the customers about the products and convincing them to buy. Vodafone has
used this strategy since its inception in India as Vodafone Essar.

Vodafone's advertisements and promotions were hearty welcomed by the audiences.

Introduction of the advertisement of Zoo Zoos and pug was a great sensation which
also got popularity in many social networking sites like Facebook etc.

Actor Irfan Khan's advert was highly popular due to his style. Vodafone also
sponsored many sporting events and Indian Premier League helped Vodafone to
create attraction in customers. Other sponsorship like MTV reality show named Splits
villa which was famous in the circle of Indian youngsters also helped Vodafone to
gain good success in a very short span of time.

Vodafone has introduced various new beneficial schemes/offers to attract the

customers like various talk time offers, validity offers, Bonus Cards, Tariff offers, low
cost handsets etc. for the prepaid users and ISD, STD, SMS, MMS offers, iPhones
and Blackberry handsets to the post-paid users.

BUSINESS MODEL
Airtel
Diverse portfolio of services and presence in:

MOBILE

TELEMEDIA

SERVICES

SERVICES

DIGITAL TV

TOWER

AIRTEL

INFRASTRUCTURE

BUSINESS

Wireless Mobile

Fixed

Pan India DTH

Bharti Infratel owns

Services to

services in 20

telephony and

operations

35,515

large

countries

broadband

towers 1 across 11

enterprises

internet (DSL

circles

and carriers

+ IPTV)

Market leader in

3.3M

Amongst the top Bharti Infratel owns

Single point

India, both in

broadband &

three players

42% stake

of contact for

revenue and

internet

with 8.8 M

in Indus Tower which all

number of

customers

3subscribers

has

subscriber

telecom needs

112,615 towers
across 15 circles

Vodafone
Customers

Assets

Revenue

Shareholder
renumeration

Reinvestment
in business

Cash Flow

Assets
Vodafone considers the following components as its assets- Supplier relationships,
Networks, Distribution, People & Brand.

Reinvestment in the business:

Vodafone takes pride in having balance between capital expenditure and cash return
to shareholders

Customers:
Vodafone is one of the biggest mobile operators in the world with customer base of
404 million customers, out of which 90% are consumer customers, balance being
enterprise customers.

Cash flow
Vodafone accounted for 16 billion pounds for past three years. It has a strong cash
flow.

Revenue
Within mobile business, 51% of annual service revenue arises from consumers
monthly price plans, called in-bundled revenue. In-bundled revenue is an increasing
proportion of Vodafones business and is relatively stable compared to out-of-bundle
revenue, which is much more vulnerable to competitive and economic pressure.

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TRENDS IN TELECOM INDUSTRY

Slowdown in
subscriber growth

Subscriber numbers de-grew at the end of 2012 due

to new customer information regulations which forced
millions of disconnections.
Even in 2013 the subscriber base grew only by 5%, as
compared to 19% in 2011, and over 40% in 2010.

The network
comes back to life

Capex was estimated to shoot up by 40% in 2013

compared to the doldrums of 2012, but capex/sales
were still low at 12%.
This is way below the 20% to be expected for a
country where network roll out is still underway.

Focus on return
on capital

Despite capex constraints as well as debt reduction, the

industry is still relentlessly pursuing growth.
Return on invested capital increased from around 3%
last year to a forecast of 5% in 2013.
EBITDA margins are at 29.5%, thereby approaching
the emerging Asia average of 35%

Litigation

From 3G roaming to arbitrary penalties and fines,

sometimes in 10 year old cases, all fuelled uncertainty
for operators.
For 2014, positive steps are expected to streamline the
regulatory and legal landscape.

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MARKETING STRATEGY OF VODAFONE

Segmentation
Vodafone Essar is seen as much focused in segmentation in India. Vodafone as
segmented Indian Market as geographical segment where rural part of India is at
much attention because of the huge potential market for telecom.

Secondly, it has focused on the demographical segment where the middle and low
income group falls. Both the segment comprises the major population of the country.

Vodafone has also segmented the customer in terms of psychographic (students,

professionals etc.) and behavioural aspects (high users and low users) and have
provided the services as per the needs of the market and customers.

Targeting
After the segmentation, Vodafone has selected the target customers which it is
focusing on to sell its product and services.

Vodafone's is targeting its marketing strategy to the people living in small towns and
villages, lower or middle income group of population, youngsters and Business
peoples.

Vodafone's good network of distribution channel is helping to reach and provide

services to the people living in remote villages and areas of India.

Their prepaid service has attracted the lower or middle income group customers and
the youths. Products like iPhone and Blackberry are targeted towards the high income
people or business persons in India. They are offering series of differentiated products
to their respective markets.

Positioning
Vodafone has been successful to position itself in almost every part of India with its
excellent channel of distribution. And for creating sales and enquiry, it has introduced
various exciting advertisements and sales promotional activities.

The tag line used by Vodafone says wherever you go, our network follows, also
creates good image in customer's mind about the network coverage which is superior
and consistent.

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By the introduction of the advertisement character like Zoo Zoos also helped
Vodafone to position because the advert was highly appreciated by the customers and
was a great hit.

Cricket is thought as a religion in India, sponsorship in IPL 2020 cricket also

positioned Vodafone very well in the Indian market.

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COMPETITOR ANALYSIS
At first glance, the major Competitor are Bharti Airtel Ltd, Vodafone India Ltd, Idea Cellular
Ltd, Reliance and BSNL, but take a deeper dive into the numbers and it reveals a landmark
shift in Indias telecom sector: GSM incumbentsBharti Airtel, Vodafone and Idea
Cellularhave jointly crossed 56% in market share in terms of subscribers.

Source: TRAI
database

Wireless Market share

There are a total of 910 million wireless subscribers in India. Vodafone has the second largest
market share. The top 5 wireless players as of May 2014 , as per TRAI database are

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Threat of a fresh entrant

The competitive nature of Indian telecom industry has moderated post the cancellation of
telecom licenses of various operators in Feb 2012, however the entry of Reliance Jio
(services expected to be rolled out in 2015) is an imminent risk to competitive intensity

Competition in the 3 g network

Source: http://telecomblogs.in/blog/2010/05/21/3g-network-map-of-india/

Number portability
Number portability is expected to have severe effect on the loyalty of customers to brand. It
is expected that the service providers will have to make etra effort in terms of scheme and
services to not only woo new customers but more importantly to retain existing customers.
Idea was the first player to promote MNP through its 'No Idea, Get Idea' campaign that
highlighted the company's strength in network coverage, customer service delivery,
customised products and services and accurate billing.
Vodafone, for its post-paid users, has an 'Earn and Burn' programme that is open to premium
cardholders of Stanchart and HSBC; the scheme helped the operator add over 1.3 lakh new
users last year. It has also been running the 'My Delights' scheme that offers best deals and
discounts on restaurants, health & beauty and travel.

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LATEST NEWS AND ARTICLES

Ericsson wins Vodafone India's contract for payment solutions
Network solutions major Ericsson today said it has won a contract from Vodafone India to
deploy its payment solutions in seven circles for the country's second largest telecom
operator. The system enables a host of new services like flexible refill, community charging
and real time balance notifications among several other different voice and data offerings for
over 75 million prepaid customers
http://articles.economictimes.indiatimes.com/2014-08-12/news/52727736_1_vodafone-indiauttar-pradesh-five-new-circles

Vodafone launches 'Vodafone RED' for retail and enterprise customers

Vodafone India has launched a new postpaid plan called 'Vodafone RED' for retail and
enterprise customers. The company claims that the product is an industry's first-of-its-kind
initiative that goes beyond the conventional tariff plan with need for multiple rentals for voice
and data.
http://timesofindia.indiatimes.com/tech/tech-news/Vodafone-launches-Vodafone-RED-forretail-and-enterprise-customers/articleshow/40606654.cms

Vodafone India Q1 revenue up 10% at Rs 10,323 crore

Telecom operator Vodafone has reported increase of about 10% in its services revenue at Rs
10,323 crore in first quarter ended June 30, 2014-15.
The company had registered revenue of about Rs 9,375 crore in the April-June period of the
last fiscal, 2013-14.
http://timesofindia.indiatimes.com/tech/tech-news/Vodafone-India-Q1-revenue-up-10-at-Rs10323-crore/articleshow/38995891.cms

Vodafone's 3G user base triples in MP & Chhattisgarh

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Telecom services provider Vodafone India's 3G user base in Madhya Pradesh and
Chhattisgarh circle has tripled to over 30,000 during the first quarter of this fiscal. Vodafone
India has 48.7 lakh customers in the Madhya Pradesh and Chhattisgarh circle.
http://timesofindia.indiatimes.com/tech/tech-news/Vodafones-3G-user-base-triples-in-MPChhattisgarh/articleshow/37775848.cms

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CONCLUSION
Vodafone has been fully successful in applying their marketing mix strategy and STP
strategy in the vast Indian market; they are now securing their second place every year and
seeking opportunities to be the number one. As per the mission statement of Vodafone to be
the world leader in the field of communication, Indian market will surely help them to grow
the base of it as India has a huge potential in the telecommunication sector.

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REFERENCES
http://telecomblogs.in/blog/2010/05/21/3g-network-map-of-india
TRAI database
http://www.netmba.com
http://www.coai.com
http://www.vodafone.in
http://www.airtel.in
http://www.ideacellular.com

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