Final report sip at reliance communications ltd. (2)

0

5/14/2010

A REPORT

ON

VALUE ADDED SERVICES (VAS)

At

BY:

(VANSHAJ ANAND)

09BSHYD0956

RELIANCE COMMUNICATIONS LIMITED

Value Added Services at Reliance Communications Ltd.

IBS Hyderabad Page 1

A REPORT

ON

VALUE ADDED SERVICES (VAS)

BY:

(VANSHAJ ANAND)

09BSHYD0956

RELIANCE COMMUNICATIONS LIMITED

A Report Submitted In Partial Fulfillment of the Requirements of MBA Program of IBS Hyderabad

Distribution List:

Mrs. Chanda Mahajan (Manager –Value Added Services, Reliance Communications Ltd.)

Dr. Manas Ranjan Tripathy (Professor IBS, Hyderabad)

Date of submission: 14 May, 2010



AUTHORIZATION

This is to certify that the project report entitled “Value Added Services” is submitted to Marketing department, Reliance Communications Ltd by Mr. Vanshaj Anand in the partial fulfillment of the requirement of MBA program at IBS Hyderabad. This study is a bonafide research work carried out by for a period of 14 weeks from 22-02-2010 to 21-05-2010.

Date: 14.05.2010 Chanda Mahajan

Place: New Delhi (Manager- Value Added Services)



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, IBS Hyderabad, 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 Dr. Manas Ranjan Tripathy, Faculty Member IBS, Hyderabad, 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 Mrs. Chanda Mahajan, my guide and mentor at Reliance Communications Ltd, for taking time out of her busy schedule and helping me, in every possible way, to proceed with my work. She has been a constant help throughout the project and an impartial leader. I would like to thank her for her selfless help and cooperation at every step.

At last, I would like to thanks 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.



ABSTRACT

In 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 company 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 for its Value Added Services. 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 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.



TABLE OF CONTENTS

Authorization iii

Acknowledgement iv

Abstract v

1. Objective 10

2. Introduction 11

2.1 Background 11

2.2 Purpose and Scope 12

2.3 Methodology 13

3. Review of Literature 15

4. Industry 18

4.1 Introduction 18

4.2 Market Structure 19

4.3 Competition in the Market 20

5. Company Profile 22

5.1 Introduction 22

5.2 Vision 24

5.3 Business Mix 24

6. Value Added Services 25

6.1 Introduction 25

6.2 Need for MVAS 26

6.3 Understanding of Different MVAS Categories 28

6.4 Pillars of MVAS 31

6.5 Understanding Role of Different Entities 33

6.6 MVAS Access Modes 35

7. VAS Market Analysis 37

7.1 Introduction 37

7.2 VAS Access Devices 37

7.3 Reliance Vs Competitors 39



8. VAS Promotion 46

8.1 Introduction 46

8.2 Promotional Strategy Adopted for the Project 48

8.2.1 Campaign Design Through SAS Marketing Automation 48

8.2.2 Tele-Calling 55

8.2.3 Up-Selling 58

8.2.4 Training to Customer Touch Points 60

9. Market Research for Retail Integration 63

9.1 Research design 63

9.1.1 Type of Research Design 63

9.1.2 Information Needs 63

9.1.2.1 Data collection from secondary sources 63

9.1.2.2 Data collection from primary sources 64

9.1.3 Measurement and scaling procedure 64

9.1.4 Questionnaire development and pretesting 64

9.1.5 Sample design 65

9.1.6 Field Work 66

9.1.7 Data analysis 66

10. Market Research to analyze Customer Behavior for VAS 74

10.1 Introduction 74

10.2 Methodology 74

10.3 Research Design 75

10.3.1 Type of Research 75

10.3.2 Information Needs 75

10.3.2.1 Data collection from secondary sources 75

10.3.2.2 Data collection from primary sources 76

10.3.3 Measurement and scaling procedure 76

10.3.4 Questionnaire development and pretesting 76

10.3.5 Sample Design 77

10.3.6 Field Work & Data Collection 78

10.4 Analysis 79

10.4.1 Data Analysis 79



10.4.2 Industry Analysis-Porter’s five forces Model 96

10.4.3 SWOT Analysis 97

11. Findings 98

12. Conclusion 101

13 Recommendations 103

14. Annexure 107

15. References 109

16. Glossary 117

LIST OF FIGURES

Fig. no.

Description Page no.

4.1 Top 10 countries by number of subscribers 19

4.2 Market share of all operators in India 21

5.1 Top 10 CDMA operators in the world 23

5.2 Business mix of Reliance ADAG 24

6.1 Pillars of MVAS 31

6.2 VAS Revenue Distribution 34

6.3 VAS Revenue Access Modes 36

7.1 GPRS Penetration 38

8.1 VAS Promotional Strategy Adopted for Project 48

8.2 Strategy for Retail Integration 60

8.3 Steps Devised for Training Customer Touch Points 61

9.1 Total footfall 67

9.2 Retailer’s Knowledge for VAS 67

9.3 Retailers fully aware of VAS 68

9.4 Customers that come enquiring for VAS 68

9.5 Ususal VAS activations 69

9.6 Major VAS service 69

9.7 Retailer will promote if given incentives 70

9.8 Incentive expected 70



9.9 Retailer's Total Footfall 71

9.10 Percentage of Reliance Customers Visit per day / Retailer 72

9.11 Growth Opportunity 73

9.12 Awareness amongst retailers 73

10.1 Methodology for research 74

10.2 Respondent’s Age Group 79

10.3 Respondent Occupation 80

10.4 Customer’s Average monthly Bill 81

10.5 Customer’s Average monthly VAS expenditure 82

10.6 Subscriber Type amongst customers 83

10.7 Age & Awareness of value added services Cross tabulation 84

10.8 Occupation & Awareness of value added services Cross tabulation 84

10.9 SPSS output-Scree Plot 92

10.10 Relative importance of factors 95

10.11 Porter’s five forces Model 96

10.12 SWOT Analysis of Reliance Communication Ltd. 97

13.1 Strategy for Creating Awareness 104



LIST OF TABLES

Table no.

Description Page no.

7.1 Data Platform Comparison 44

9.1 Sampling Design 66

9.2 Retailer’s total footfall 71

9.3 Percentage & count of reliance customers 72

10.1 Sampling design 78

10.2 Customer’s age group 79

10.3 customer’s occupation 80

10.4 Customer’s Monthly bill 80

10.5 customer’s monthly VAS expenditure 81

10.6 Network & subscriber type cross tabulation 82

10.7 Age & Awareness of value added services Cross tabulation 83

10.8 Occupation & Awareness of value added services Cross tabulation 84

10.9 VAS Awareness with different age groups 85

10.10 Frequency distribution table for chi square test of Independence 86

10.11 SPSS output-Correlation Matrix for drivers of Value Added Services Customer

Behavior

87-88

10.12 SPSS output -KMO and Barlett’s Test 89

10.13 SPSS output-Eigen values and variance explained 90

10.14 SPSS output-Communalities before and after extraction 91

10.15 SPSS output-Component matrix before rotation 91-92

10.16 SPSS output-Rotated component matrix 93

10.17 Relative Importance of the factors 94-95

11.1 Factors & Variables after data reduction 99

13.1 Recommendation for Data platform 103

13.2 OBD/Tele-Calling calculation 104

13.3 target set example for RMS’s 105



1. OBJECTIVE

The project has following objectives:

� To understand the significance and benefits of VAS (Value Added Services) in revenue generation.

� To study and analyze Value Added Services of Reliance and its major competitors, and learn the basics of promotions for VAS.

� To make recommendations pertaining to improvement of VAS. � Up-Selling VAS and its integration with the Retail Network of Reliance

Communications. � To carry out a market research with the help of a survey and a questionnaire with

Reliance retailers and analyze the data to help the organization strategize VAS integration with the retail network.

� To carry out a market research with the help of a survey and a questionnaire with Reliance customers and analyze the data to help the organization strategize VAS promotions.

� To make effective use of various management and statistical tools and segment the customer base for effective target and promotion.



2. INTRODUCTION

2.1 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 the 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). 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.

2.2 PURPOSE AND SCOPE

The main purpose of this project is to understand the various verticals of marketing function at Reliance Communications for its Value Added Services (VAS). An in-depth analysis of the data platform and 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 and the importance of VAS in revenue generation. 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.



2.3 METHODOLOGY

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

• 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

• Reading annual reports of company and its competitors. • Reading papers published by ICRA, IMRB and other market research firms, on industry

analysis of telecom sector.

1. VAS Market Analyses

• Understanding the project through communication with its employees.

• Learning about the VAS products and services by going through R-world i.e. the Data Platform of Reliance/ Voice Portal/ CRBT and SMS- services, to know and understand the product.

• Comparison with other operators regarding their Data Platform and Voice Portal.

2. VAS Promotion

• Out Bound Dialing (OBD) and Message promotion to customer’s MDN i.e. creating a SMS Blast.

• Segregating various customers on basis of their current balance and promote accordingly, for which queries are run on Microsoft Access and respective MDN’s are retained for OBD and Promotional Messages.

• Going through daily customer base for in-bound and out-bound calls and check the conversion rate.

• Designing campaigns on statistical analyses software i.e. SAS Marketing Automation, for promotional messages.

• Visit INDIA Calling which is the Reliance Communication’s approved Tele-calling agency and check the work flow and help improve efficiency and effectiveness of contactibility of customers and promote VAS more effectively to increase the conversion percentage.



3. Up-Selling VAS through Retail Network & Training to customer touch points for promotion of VAS

• Field work which involves visiting various locations under each cluster, all around the

city and communicate with RMS’s and RW’s. • Visiting various sales channels and motivate them to push for sales and help with any of

their queries regarding VAS. • RETAIL Integration : Reaching the retail network and integrating it with VAS and

introduce sales through this retail network, motivating them through various incentives. Initialize the process with a survey research and analyze the retailer’s behavior followed by the launch of e-Retailer.

• Training to Customer Touch Points for promotion of VAS and hence increase the sales. It involves setting up a training program for all the customer touch points at the head office (Delhi circle) and train them about VAS through presentations and discussions and push them for sales and revenue generation through VAS.

• Field visits to various channels and collecting feedback, report the Head Office. This helps in keeping a track of where the project is heading through the retail channel.

4. Market Research to analyze Customer Behavior regarding VAS

• Designing of the questionnaire aiming at the awareness, liking and usage of Value Added Services by Reliance subscribers.

• Getting the questionnaire filled by the customers and take their feedback. • Analyzing the data collected using Statistical tool SPSS 13.0 for Windows. • Report preparation.



3. 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:

• 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.

• 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.



Mobile Value Added Services in INDIA: (A Report by IAMAI & eTechnology group @ IMRB) The report provides a clear and precise definition of MVAS, its various categories existing in India, the MVAS still evolving and thus changing ecosystem along with the current revenue sharing scheme between various entities, its drivers and barriers along with its future in India. The facts that the report presents are as follows:

• The Current Mobile VAS industry is estimated at Rs. 5780 crore by end June 2008 and is estimated to grow steadily at 70% over the next two years to touch Rs. 9760 crores by end June 2009 and Rs.16520 crores by end June 2010.

• MVAS currently contributes around 9% to the operator’s revenue. It is expected to grow

over 12 % by June 2010.

• As ARPU declines, the challenge for operators is to increase revenues by differentiating their offerings and develop alternative revenue streams by offering more value added services to the existing subscribers.

• In terms of market share, 92% of the subscriber base in India is on pre-paid connection,

with the remaining 8% on post-paid subscriptions. This has also given rise to opportunities for generating increased revenue, through exploring potential Value Added Services (MVAS) like subscription packs of news, alerts etc and more exclusive roaming services tailored to pre-paid subscribers.

• Decrease in ARPU despite increase in MOU: Though the subscriber base is growing at a rapid pace and has positively impacted industry revenues, operator margins also have shrunk owing to competition and lower “Average Revenue per User” (ARPU) as the major growth is coming from bottom of the pyramid. As ARPU declines and voice gets commoditized, the challenge is to develop alternative revenue streams and retain customers by creating a basis for differentiation in high-churn markets.

• Need for differentiation: There is a greater need among the telecom operators to

differentiate themselves from each other.



4. INDUSTRY

4.1 INTRODUCTION

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.

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.



Fig 4.1 Source: Operator's Website, Press Release & Regulatory

4.2 MARKET STRUCTURE

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.

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.

4.3 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 Aircel 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. 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.






5. COMPANY PROFILE: RELIANCE COMMUNICATIONS LIMITED

5.1 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. 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. 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.


The following attributes define future leadership at Reliance Communications:

• Customer centricity. • 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.

5.2 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.

5.3 BUSINESS MIX

Fig 5.2 Source: Annual Report of Reliance Communications, 2007-2008



6. VALUE ADDED SERVICES

6.1 INTRODUCTION As we have seen, Telecommunication has moved beyond providing just basic voice calls. The mobile phone has evolved from a mere communication device to an access mode with an ability to tap a plethora of information and services available in the ecosystem. This is the reason why it is now being referred to as the ‘fourth screen’, after Cinema halls, Television and PC.

Defining VAS But the fundamental question that remains is how VAS is defined. A clear MVAS definition is not only required to clear the air among the MVAS providers but it will also have an impact on the dynamics of the Value chain. A detailed definition of VAS might have an impact on the licensing issues surrounding VAS.

Let’s look at different VAS definitions floating in the market.

Basic definition of a VAS

Value Added Service (VAS) in telecommunication industry refers to non-core services, the core or basic services being standard voice calls and fax transmission including bearer services. The value added services are characterized as under:-

• Not a form of core or basic service but adds value in total service offering.

• Stands alone in terms of profitability and also stimulates incremental demand for core or basic services

• Can sometimes be provided as stand alone.

• Do not cannibalize core or basic service. • Can be add-on to core or basic service and as such can be sold at premium price.

• May provide operational synergy with core or basic services.

A value added service may demonstrate one or more of these characteristics and not necessarily all of them. In some cases, the value added service becomes so closely integrated with the basic offering that neither the user nor the provider acknowledge or realize the difference. A classic example is of P2P SMS. Some of the operators do not consider P2P SMS as part of their VAS revenue.



Definition as per TRAI

In the Unified Access Service License (UASL), VAS is defined as follows- “Value Added Services are enhanced services which add value to the basic teleservices and bearer services for which separate licence are issued”

The Government of India issues licenses for the following Value Added Services:- 1. Public mobile trunking service 2. Voice mail service 3. Closed users group domestic 64 kbps data network via INSAT satellites system 4. Videotex service 5. GMPCS 6. Internet 7. Audiotex 8. Unified messaging service

The above definition supports a free market but can be broadened to incorporate new service categories and players in the supply chain. For mobile telecommunication market, a simple definition of VAS would be-

Mobile Value Added Services are those services that are not part of the basic voice offer and are availed separately by the end user. They are used as a tool for differentiation and allow mobile operators to develop another stream of revenue.

6.2 NEED FOR MVAS Over the last 5 years, the telecom industry has understood the importance of MVAS. Given the declining ARPU and increasing competition among operators it’s imperative to focus on alternate revenue streams. That’s where there is a felt need for capitalizing on the Value Added Services Market. The reasons for the increasing importance of MVAS can be classified as: • Decrease in ARPU despite increase in MOU: Though the subscriber base is growing at a rapid pace and has positively impacted industry revenues, operator margins also have shrunk owing to competition and lower “Average Revenue per User” (ARPU) as the major growth is coming from bottom of the pyramid. As ARPU declines and voice gets commoditized, the



challenge is to develop alternative revenue streams and retain customers by creating a basis for differentiation in high-churn markets. • Need for differentiation: There is a greater need among the telecom operators to differentiate themselves from each other.

• Number of Licensees: With increasing number of licensees (98 UASL, and 37 cellular licenses) in the telecom space the average numbers of operators in many circles have increased to 5-6 operators offering more choices to the consumer. Thus the competition among the operators has increased tremendously. Therefore it is very important for them to differentiate themselves from the others. Now that voice has got commoditized these operators are using MVAS for their differentiation and marketing these services heavily for creating awareness among the consumers.

• Decreasing Call Rates: In order to attract consumers with relatively low purchasing powers primarily from Semi Urban and Rural India the operators have drastically reduced the call rates making it affordable to even the lower segment of society. The tariff in India is one of the lowest at Rs.1 per minute as compared to the tariff in developed nations like USA and UK where the call rates are Rs.13 and Rs7-8 respectively.

Table 6.1 Source: Broadband and Internet India

• 3G bidders who are non operators: The arrival of new technologies will give rise to greater competition as many non operators are also bidding for the 3G licenses. Department of Telecom has planned to allow five 3G operators in each circle depending on the availability of spectrum. Therefore there would be a greater need to differentiate one self in order to attract new customers and retain the existing ones.

Country Tariff Charges

(approx.)

USA Rs 13 per min

UK Rs 7-8 per min

France Rs 7-8 per min

Brazil Rs 6 per min

India Rs 1 per 2 min



• Saturation in Metro and Urban Market: The metro/urban areas offer high level of penetration and have significant mobile subscribers. In such a highly saturated market with the entry of MVNO’s the competition will get fierce. Therefore capitalizing on value added services will give operators opportunity to increase ARPU by providing premium services.

Metro Circle

Mobile

Penetration

Delhi 90%

Mumbai 70%

Chennai 89%

Kolkata 47%

Punjab 46%

Table 6.2 Source: Broadband and Internet India

• Increasing need and demand from consumers: In addition to the above supply side

reasons the ‘pull effect’ from consumers asking for more than just basic telephony is also a key driver for MVAS services. Today most of the consumers are seeking more from their communication device apart from just mobility and desire to stay connected.

6.3 UNDERSTANDING DIFFERENT MVAS CATEGORIES All the value added services address some need of the end consumer whether it is psychological, monetary or convenience. Based on the need fulfillment of the end user, we have grouped Mobile VAS into three broad categories.

• Entertainment VAS - The key differentiating factor of Entertainment VAS is the mass appeal it generates. These provide entertainment for leisure time usage. These not only generate heavy volume (owing to its mass appeal) but also heavy usage. An example of these kinds of services is Jokes, Bollywood Ringtones, CRBT (Caller Ring Back Tone) and games. These services continue to be popular and have been key revenue generators for the Indian mobile VAS market. This is a high value MVAS and will continue to show growth. Other popular Entertainment VAS driving the market are dating and chatting



services. The service was first introduced 2 years back and is now being offered by all the operators. Each circle generates about Rs 30 lakhs per month. This service is not only growing fast but also witnessing less churn as compared to other MVAS. Owing to its sticky nature, it requires comparatively less marketing efforts and cost. Entertainment VAS has the potential to remain a key contributor to Mobile VAS industry. To sustain the MVAS growth, it is the responsibility of the industry to keep discovering/innovating killer applications like CRBT (Caller Ring Back Tone) at regular intervals

• Info VAS- These services are characterized by the useful information it provides to the end user. The user interest comes in from the personal component and relevance of the content. Apart from mobile, alternate modes are available to access Information VAS like Newspaper, TV, and Internet. E.g. of Info VAS is information on movie tickets, news, banking account etc. They also include user request for information on other product categories like real-estate, education, stock updates, etc. Information VAS needs to target the right person at the right time with the right content.

• mCommerce VAS (Transactional services)- These are the services which involve some transaction using the mobile phone. An example of this kind of service is buying movie tickets using mobile phone or transfer of money from one bank account to the other. These can broadly be classified into 2 types - Mobile banking and Mobile payments. Though in a nascent stage, off late many initiative have been taken in mCommerce space. A number of application providers are in the market with different business models. Some are focusing on mpayment, some on incorporating mCommerce into it while others on mbanking aspects. This year has seen the launch of mbanking service by Indian’s largest private sector bank which has given mbanking a much needed thrust. Almost all the operators are conducting pilot exercises for mCommerce services using different access modes like GPRS, USSD, STK, etc. A big boost to mcommerce has come from the RBI which recently came out with some guidelines. mCommerce penetration continues to be small but awareness is increasing. Operators are betting on technologies like USSD to make the service handset agnostic. The current marketing focus is primarily on mobile bill payment and mbanking. Industry is betting on tripling number of mCommerce users within this year. This is discussed in greater detail in the subsequent sections.



ENTERTAINMENT

VAS

INFORMATION

VAS

MCOMMERCE

Definition

These services provide

entertainment foe

leisure time. These

services usually

generate mass appeal.

These are the services

which provide some

useful information to

the end user. The user

interest comes from

personal or relevant

component of the

content.

These are the services

which involve some

transaction on mobile.

Current Status

Entertainment VAS is

driving the VAS market

both in terms of

volume and revenue.

Information VAS is

getting popular with

different categories

depending on the

relevance.

mCommerce is

currently in embryonic

stage.

Drivers

Industry focus is on

Entertainment VAS

with new players

coming from media and

movie houses. Eg:

STAR, Rajshri.

Entities using mobile as

another channel to

deliver information is

driving Information

VAS. Eg: Stock update,

bank account

information etc.

RBI guidelines are

expected to give a big

boost to mBanking.

Challenges

Currently, music is the

biggest component.

Challenge is to drive

the other content and

services like games.

1. Marketing is the

biggest challenge

since information

need differs across

different segments.

2. Credibility of the

source is another

challenge since

there are various

other alternative

sources for

Information VAS.

1. Identifying the best

access mode for

mCommerce is the

biggest challenge.

2. Handset

penetration and

usage of GPRS is

low in India.

3. Security concerns.

Future Status

It is expected to remain

the VAS driver for next

few years.

It is going to be key to

address the needs of

growing rural market.

It has the potential to

become one of the key

drivers of VAS once the

security concerns are

addressed.

Table 6.3: Different MVAS categories



6.4 PILLARS OF MVAS The growth of MVAS is based on 4 pillars- Access devices, Content, Technology and Infrastructure.

Fig. 6.1 Source: Mobile Value Added Services in INDIA:

(A Report by IAMAI & eTechnology group @ IMRB)

1. Access devices Access devices play an important role in the usage of different MVAS categories. The lack of features like GPRS, GPS, Java in handsets make a number of MVAS futile. Therefore the affordable availability of such features is a key factor in determining the size of the target audience to a large extent. A recent example is service operators preference for USSD as an mpayment mode instead of GPRS for the simple reason that USSD is handset agnostic. Another access device which will soon see the light-of-the-day in India is MID (Mobile Internet Devices). Even technology companies like Intel are increasing the power of mobile platforms with a specially designed low cost processor called Atom.



2. Content Is content really the king? It does not seem so, looking at the percentage revenue share collected by Content aggregators and Content owners of the total MVAS pie. Add to it the pirated content and side loading in the India market; it does not present a rosy picture. The content depends a lot on geography and is not transportable across borders. Both IPR (e.g. music label) and white label content (e.g. cricket) is available in the market. But on the other hand, much of the content being consumed is being generated for other media. But because of the same reason we say a wide variety of content being available especially in the Entertainment category. For content aggregators/developers/owners to play a significant role in the category, relevant content needs to be generated. They need to play a larger role from merely being a content aggregator and transporter. Investment needs to be made keeping in mind the long term benefit and not the short term ROI. Another factor which impedes the content development is marketing of MVAS. A lot of content and services die prematurely or do not realize their full potential because of lack of sufficient and focused marketing efforts. Currently, packaging and marketing of content is primarily in the hand of operators. The stakeholders are currently not sharing the burden again citing reasons of lack of sufficient returns. Regional content will give a boost to the MVAS market. It has tasted success in the Indian market but the challenge is to generate relevant content not only catering to regional differences but also in different languages.

3. Infrastructure Infrastructure requirement needs to be met to harness the potential of different technologies. Setting up infrastructure especially in the rural areas is going to play a major role in the growth of MVAS.

4. Technology

There are 2 aspects to technology. One is the technology platform itself and the second is the communication technology. On one hand technology platforms are independent of geography and are transportable across borders unlike content which needs to have a regional flavor for e.g. mobile payment platform, IVR, etc. Though there are challenges in case of platforms like speech recognition given the high number of languages and dialects spoken in India. Communication technology is also independent of geography but depends on regulation issues for e.g. 3G



6.5 UNDERSTANDING THE ROLE OF VARIOUS ENTITIES

Content Aggregators/Developers:

The MVAS growth has given birth to a new entity which aggregates content originally designed for some other media, from different sources. Some of the content aggregators also develop content especially for mobile phones for e.g. mobile games. On one hand they coordinate with operators and on the other, with content owners and smaller aggregators. Another key role played by them is handling of the IPR related issues - thus reducing the burden of the mobile operators. Content Owners These are the actual owners of the content who hold the copyright of the same. Though the content is developed for some other media, the MVAS has started contributing significantly to their overall revenue generation. A good example is of CRBT which is giving good revenue to the music labels. They mostly provide content to Content Aggregators but also some times interact directly with the operators. In recent cases, Content owners sell the content directly to handset manufacturers for e.g. Nokia tied up with Om Shanti Om providing exclusive songs, wallpapers, games, etc.

Traditional Media Companies Media companies like TV channels and FM channels have also joined the bandwagon. All the big TV channels have started selling their content through short codes. STAR has even launched a mobile division named STAR Mobile Entertainment to provide mobisodes and mobile related content. The key revenue source for the media channels is Voting in shows like Indian Idol and contest participation in shows like Paanchvi Paas. Post the success of talent hunt shows and contests like KBC, the TV slots have been flooded with such shows and other reality shows. Though the initial euphoria has not sustained, voting and contest participation continue to contribute significantly.

Technology Enablers Technology partner & platform enablers handle software platforms and authoring tools. Thus they provide the backbone to all the MVAS being provided. The technology backend include solutions like Televoting system, Voice portal, etc.



Short Code Providers These are the companies who own a short code (e.g. 58888, 53456 etc) which is sold to a third party client for some keyword and a specific period. On one hand they need to tie up with the operators to ensure their short code works across subscriber base and on the other hand they sell their short code to other companies like real estate, hospitals, etc. who advertise their products using the short code.

Handset manufacturer The handset manufacturers have joined the bandwagon and have started tying up with Content owners to provide pre loaded content on their handsets. Content converter Since most of the content in MVAS is originally designed for some other media, it needs to be converted into mobile compatible format. This is where content converters enter the value chain. They interact with the operators and work closely with them.

Fig. 6.2

Source: Mobile Value Added Services in INDIA: (A Report by IAMAI & eTechnology group @ IMRB)



6.6 MOBILE VAS ACCESS MODES The growth of MVAS market is dependent on the various modes available to the end consumer for accessing MVAS. Presently, the modes of MVAS access can be classified as:

Short Message Service (SMS) Platform

SMS was the first mode introduced for accessing MVAS. MVAS market is currently dominated by SMS in terms of revenue. The SMS platform is used by telecom operators to provide a variety of services such as information services like news alerts, cricket scores, chatting services, etc.

Voice Platform

Interactive Voice Response (IVR) system is used to deliver Voice based Value Added services to the consumers. In this system, the end user interacts with a computerised system to tap the service. The end users can select the options available on the service either through numbers on the keypad or using speech recognition system. Voice based services are offered in a variety of languages to cater to the diversified Indian population. This mode becomes more significant when dealing with the non-metros and rural India. Voice access contributes to more than one-third of the total MVAS revenue

GPRS/WAP Platform

GPRS currently contributes around 6-7% of the overall MVAS revenue. The high price of data access acts as a barrier towards usage of GPRS. The primary drivers for the adoption and usage of mobile internet are availability of cheap data-enabled handsets and lowering of GPRS tariff by mobile operators. GPRS is an effective medium of accessing MVAS, but is restricted by relatively lower consumer base.

Unstructured Supplementary Services Data (USSD) Platform

USSD is a session based mechanism for delivery of service to the end consumer. The services are delivered through a continuous interactive session, unlike SMS where the interaction needs to broken to separate messages. USSD presently contributes around 2-3% of the MVAS revenues, but the industry holds a positive perspective towards its adoption as a means of accessing MVAS.



Multimedia Message Service (MMS) Platform MMS allows sending messages that include sending multimedia objects such as images, audio and video along with text messages. MMS market in India is still in a nascent stage. Presently, the growth of this segment is restrained by high-price and limited availability of MMS handsets in India. The current MVAS market is estimated at Rs 5930 crore as on June 2008. The market is currently dominated by SMS as the mode of accessing MVAS. SMS contributes around 49% to the overall MVAS revenues. This consists of P2P, A2P and P2A services.

Fig.6.3: VAS Revenue Access Modes



7. VALUE ADDED SERVICES (VAS) MARKET ANALYSIS

7.1 INTRODUCTION

The goal of market analyses is to determine the attractiveness of a market and to understand its evolving opportunities and threats and relate it to the strengths and weaknesses of the firm and its product/service.

First task is always to know all about your field of work, the market for which the product is meant, the technology involved and your product itself. Before setting my feet into the department and extending my work responsibilities, my first job is to know everything about the product, its market and services offered through VAS in Reliance.

Under the initial step of market analyses, following are the areas to study and look upon:

• Know your product: A detailed study of all the VAS products and services of Reliance Communications.

• Know the technology and the market

• Who are your customers: Know the customer base for these services and to push and promote VAS throughout my term of internship.

• What is the worth: Study the percentage revenue added through VAS.

• Know your competitors: A detailed comparison of VAS Data Platform (R-World) at Reliance with all other major Telecom players in the market.

7.2 VAS ACCESS DEVICES

For access of Value Added Services, feature rich handsets are needed which enable easy access and display/storage of contents. There has been phenomenal growth in mobile subscriber base but the low feature handsets continue to be in majority. Basically price is the biggest driver in purchasing of handsets. The lack of feature rich mobile handsets thus continues to be a barrier to the growth of Mobile Value Added Services. It is expected that the prices of feature rich mobile handsets will decline with increasing competition among manufacturers and also because of technological advancement.



GPRS Handsets Currently the penetration of GPRS enabled handsets are close to 26% in India as against 99% in South Korea and 76% in Japan. Of the total mobile subscribers in India 65 million possess GPRS-enabled handsets. Of all those who posses GPRS enabled handsets only 20-25% of them have got the GPRS activated and only about 15% use it. Even in case of developed nations like South Korea and Japan not more than 50% of the subscribers owning GPRS enabled handsets use it. Shown under in fig 7.1

Fig. 7.1

This clearly indicates that the consumer today engage more in text based services than the web based applications. Therefore for MVAS to grow to its full potential the handset manufacturers will have to look at ways to manufacture GPRS enabled phones which are affordable and user friendly. Moreover they would also need to increase its awareness and educate the consumers on how to use GPRS.

3G Handsets The market for 3G in the country is expected to be huge with over 65 million wireless subscribers, who use their handsets to access data services on the Web. These subscribers are currently using mobile handsets which are internet-enabled and are potential broadband subscribers with the deployment of advanced wireless technologies such as 3G. According to Indian Cellular Association (ICA) about 5% of mobile users already have handsets that can workon 3G spectrum. In addition, out of all those possessing the 3G enabled handsets the number of people who would use 3G services would be determined by the quality of content available. Unlike most other countries, we are looking at 3G services not only as premium services but also as an extension of 2G. Since our broadband penetration is abysmal, 3G would



provide a much required boost to it. Given that mobile phones are much cheaper as compared to PCs, the demand for broadband on mobile is expected to be much greater. More importantly, 3G will solve problems more in rural India. Therefore the shift towards 3G would depend on affordability of handsets along with the quality of content available.

Bluetooth Penetration The mobile handset market in India is worth $7-billion. The hands-free mobile revolution seems to be revolutionizing the use of Bluetooth-enabled headsets. As a category it is now coming out of the clutches of the accessories market and establishing a niche of its own. Established branded mobile handset players today are actively looking at making headsets part of their package offering to customers. India is a major IT hub and it comes as no surprise that the Indian Bluetooth headset market is expected to grow at a compound annual growth rate (CAGR) of 74% in India vis-à-vis 48% in China. According to Industry experts, the professional headset market in India is expected to grow at a CAGR of 21% over the next five years, which will be driven by the contact centres and IT enterprise segment through addition of new seats and replacement of handsets by headsets. In the year 2007-08, India shipped close to 85 million mobile handsets, compared to 66 million units shipped in the previous year, registering a year-on-year growth of around 29 per cent. This could be attributed to the huge influx of ultra-low cost Chinese and operator-branded handsets that have sharply brought down the average selling price (ASP) of entry-level handsets and cconsumers need for changing phones as frequently as within 8-12 months. This growth is an outcome of a burgeoning mobile services market and lower entry barriers across various customer categories, as average selling prices of handsets is constantly falling and has gone down to as low as Rs.599 in the wake of a highly competitive landscape with close to 25 vendors. Handsets costing less than Rs 3,000 account for 70% on the market, and nearly half of these cost less than Rs 2, 000. Yet interestingly the average cost of a phone sold in India is Rs5,000. This could be attributed to the growing number of high-end phones being shipped to India. In FY 2008 EDGE and WCDMA-enabled mobile phones contributed 15.4 per cent and 3.1% respectively of the total mobile phone shipments compared to 7.4% and 1.2%, in 2006-07.

7.3 RELIANCE Vs COMPETITORS Though reliance is one of the largest telecom operators in India, the competition is not much far less than being fierce. There are many telecom operators in India and more are joining in the pool of operators through recent FDI’s and joint ventures. In a few months Delhi region will become the only city in the world where there will be 12 telecom operators serving its people. For any company to be successful, it shall have clear knowledge about its competitors, product substitutes and entry/exit barriers as in accordance to Porter’s Model.



Major competitors of Reliance Communications for its Value added services are:

• Airtel

• Vodafone

• Idea • Aircel

To study the market of VAS for Reliance Communication it is necessary to know all about the competitor’s products and services. Below is the comparison table of Reliance and its major competitors for Value Added Services – DATA PLATFORM

VAS DATA PLATFORM COMPARISON

AIRTEL

IDEA

VODAFONE

RELIANCE

AIRCEL

FASHION & GLAMOUR

HOT & SPICY

Under application

store in special offers

HOT n NEW

KREENA KAPOOR

SPCL subscribe at

various given charges as per

your convenience to get updates

cover girls on demand, stylish riya sen, wonder girls, valentine

beauties

FTV BEACH BEAUTIES,

FREE ROMANTIC

VIDEOS, HOT BIKINI

VIDEOS, FHM SWIMSUIT

GIRLS, FREE MODEL PHOTOS

wallpapers, videos and images available

PLUS HOLLYWOOD HOTTIES which has images and

animations



FUN ZONE PICK OF THE DAY + DIRECT

LINKS

WHAT'S NEW HOT n NEW PICK OF THE DAY

games, animations, wallpapers,

videos.


videos.

love messages, new zoozoos,

new games 2010


videos.

GAME Rs 50, ANIMATION Rs 15, IMAGE

Rs 10 SEND FREE

SMS X X X X

an application which is

downloadable and you can send a

particular number of free messages

daily.

SET HELLO TUNE

X X CALLER TUNES

X

search hello tune by name of song, movie or album

Various categories as, Set caller tune, music box, busy

caller tune, my lib, copy other tune

BEST SELLERS X BEST PICKS HOT n NEW WHAT'S NEW games,

animations and wallpapers

divine blessings, nature

downloads, mahamantras

Ads, latest movies and

games

LATEST MOVIE

REVIEWS

MOVIES + Yahoo MOVIES

NOT SPECIFICALLY MENTIONED

MOVIE MASALA

MOVIES

Latest movies , Bollywood

Gossip, HOT babes, Fashion,

Astrology, English NEWS, HINDI NEWS

Latest movies , Bollywood

Gossip, HOT babes, Fashion

Latest movie ad banner

latest movies like 3 idiots, MNIK

etc. Sub categorized as , latest movies,

name of a latest movie, hot

hollywood, young n restless babes,

goa tamil superhit

All the latest movies and

videos of the related movie @ Rs 10 & Rs 15

APP CENTRAL "MENU”: a APPLICATION OTHERS SERVICES +



separate link for all applications

available on IDEA.

STORE SPECIALS

1400+ applications

divided among various categories

Less applications as compared to

Airtel

MANNY APPLICATIONS

SUB CATEGORISED ACCORDINGLY

IMAGES AND VIDEOS

Given as a Direct link.

VIDEOS… DIRECT LINK /

DISTRIBUTED ALL OVER THE

PAGE

COOL VIDEOS

includes animations and wallpapers of

actors & actresses based on different

categories

fashion video, 2009 best movies @ Rs 15, Love indi pop song, WWE Divas,

categories like, carwash bikini, studio X hotties, beach beauties,

best of splitsvilla, swimsuit, classic comedies, yoga, wet n wild, best

of roadies, magic in a minute, khatron ke

khiladi, models.. Etc

some videos shown as icon @

Rs 15

MUSIC MUSIC MP3 SONGS NOTHING SPECIFICALLY

MENTIONED BY THE NAME

OF MUSIC

MUSIC

Latest Hits, Top Chartbusters,

Bollywood Hits, Devotional, Best of 2009, Music

maestros, Bollywood

Classics, Ghazals, Pak music, Airtel

Jingle, Lyrics, Love hits

full songs>>> international hits, bollywood latest, golden classics, bhakti sagar, full album @ Rs 50, a

full song @ Rs 25, wallpapers @ Rs 10, animations

@ Rs 15true tones @ Rs 20, polytones @ Rs

Polytones @ Rs 10, Truetones @ Rs 15 and MP3 @ Rs 15 of all the latest songs

and more Categories are

also given. Like, hollywood,

instrumental, top 10 etc.



10

MOVIES MOVIES X MOVIE MASALA

MOVIES

includes animations and wallpapers of

actors & actresses based on the

movie name you select

latest movies like 3 idiots, MNIK

etc. Sub categorised as , latest movies,

name of a latest movie, hot

hollywood, young n restless babes,

goa tamil superhit

All the latest movies and

videos of the related movie @ Rs 10 & Rs 15

GAMES GAMES GAMES GAMES GAMES What's New- Games, Best

Games, Games Club. Priced

between Rs 30- Rs 99

download @ Rs 30

name of the game, new

games, cricket, bollywood,

racing, adventure, action, strategy

etc.. Rs 20

Name of the game + sub categories

like new releases, latest gamesgames

of last decade, cartoon

gamesaction & adventure, priced @ Rs 49 and Rs

99

top games, cricket games, puzzle games,

bollywood games, action,

racing, adventure, all @

Rs 50 or 99. Special games @

Rs 15, Email & Chat CHAT +

YAHOO MAIL INTERNET GIVEN IN

SOCIAL NETWORKING

SERVICES + MAIL

various chat rooms available

NEWS & SPORTS

NEWS+ LIVE IBN NEWS

NEWS under INTERNET

NEWS n TV NEWS

NDTV news room- regional news, world & national news, business news, sports news.

SPORTS ZONE- manchester

SPORTS are given under

MENU which is a separate link on the home page.

News>>> TOI, IBN LIVE, DNA,

BBC, more…

Headlines, aajtak online, Sun TV, CNBC tv online,

UTVi online, NDTV online, CNBC awaaz

online, Asianet Online, WOW tv,

general news, finance news, international news, sports

news.



Table 7.1: Data Platform Comparison

united, ESPN sports

subscription, mobile espn,

BPL-latest buzz, F1 latest news,

goal.com, Roger Federer spl,

Australian Open

BBC world news, …. Almost

everything related to

SERVICES FOR YOU

SERVICES INTERNET

m-commerce- airtel bill

payement, airtel recharge, movie,

air tickets, recharge DTH,

DG toll, shopping,

insurance. m-banking, mobile apps, important alert, wayfinder nnavigator, get DTH- spl offer, get broadband.

Sensex, security

community, yahoo mail, book

your tickets, astrology

Business & Finance>>>

money control, BSE, NSE,

CNBC, TRACK YOUR STOCKS

FULL TRACKS X MP3 SONGS FULL SONGS Timeless classics,

Valentines spl. Full songs @ Rs 20. many songs mentioned there for download.

full songs>>> international hits, bollywood latest, golden classics, bhakti sagar, full album @ Rs 50, a

full song @ Rs 25

latest movie names with song name and a few more categories. Download @ Rs

25

HOLLYWOOD SIZZLERS

X WHAT'S HOT HOT n NEW WHAT'S HOT

GAMES SHOP GAMES GAMES GAMES



Here above “X” means: Not Available

Auditing and Recommendation:

After the completion of VAS market Analysis the next step comes of auditing and recommendation to my company guide for the following matters:

Propose services that are not included under VAS at Reliance to increase its competency in the market.

1. Products and services those are not available on R-World in comparison with other operators.

2. New product and services that can be included on R-World (Reliance Data Platform). 3. Ways to improve the look and feel of the Home page. 4. Ways to improve the link for various Products & Services, i.e. the access for customers.



8. VALUE ADDED SERVICES (VAS) PROMOTION

8.1 INTRODUCTION

Being such a big commercial house, Reliance Communications undertakes bigger responsibilities for better execution of its entire process. The entire process of promotion is balanced in various forms for the existing customers of Reliance Communication. Apart from the conventional methods of promotions through posters and billboards, Promotional Messages are sent to customers on daily basis to promote VAS directly. For this purpose campaigns are designed and scheduled on daily basis for both GSM and CDMA customers through SAS Marketing Automation.

• Promotional text messages are sent on customer’s MDN regarding various products and services of VAS. These may be contests, festival based messages, event based etc.

• These promotional Messages are designed and scheduled as a campaign on daily basis with the help of SAS Marketing Automation (SAS Customer Intelligence studio 5.1)

VAS has also been now promoted through various Events all around in the city. These events take form of promotional activities at various occasions like festivals and concerts. With these promotional activities the company is able to sell VAS products and services directly to the customers without involving any channel in between like RMS’s (Reliance Mobile Store) and RW (Reliance World).

Tele-Calling or OBD (Out Bound Dialing)

VAS promotion is also done via Tele-calling which involves calling customers based on their Current Balance criteria and offering them various products and services related to VAS. This is done by INDIA CALLING which is the approved Tele-calling agency for Reliance Communication. A database is created consisting of customer MDN’s and their response to the call. In Delhi circle, Tele-calling is an effective means of promotion as it involves more interaction with the customer. Customer feels much more involved and benefits are discussed at that very moment and satisfaction level is reached every time.



Up-Selling VAS through Retail Network

Up-selling is a technique whereby a salesperson induces the customer to buy more expensive products and services. It is a process wherein the salesperson persuades the purchaser or the customer to buy more and more products/services. Here, in my project I will do the up-selling through the retail network of reliance with the customer touch points and pursue them to sell the product/services to customers they meet everyday. The Retail Network of Reliance is wide-spread all around the circle (Delhi/NCR) with almost 150 RMS’s and around 40 RW’s. Considering its wide-spread reach and penetration in the market it is the biggest and most effective customer touch point and hence, Up-selling for me which requires inducing these front end salesperson to sell the product/services shall increase the revenue and hence ARPU. Training to customer touch points for promotion of VAS Customer touch points are the interface of a product/service with customers and the employees. These are Communications channels with which companies interact directly with prospects and customers. Traditional touch points include face-to-face (in-store or sales representatives), phone and mail. Digital touch points include web services, e-mail and potentially mobile phone. Training to customer touch points for promotion of VAS is a very essential and critical step to enhance sales and revenue. Training various customer touch points that includes RMS’s and RW’s include basic knowledge creation, importance in revenue generation and setting up targets. This is a step taken by the company recently looking up the market scenario and realizing the necessity to increase VAS sales as it is the only means left to increase the ARPU level in this ongoing price war industry. Realizing the fact that VAS holds the future of revenue generation this is a major step taken to train the touch points regarding VAS and make them realize its importance and set them up with targets to achieve growth.



8.2 PROMOTIONAL STRATEGY ADOPTED FOR THE PROJECT

Fig. 8.1

8.2.1 Campaign Design through SAS Marketing Automation It is done on SAS Marketing Automation (SAS Customer Intelligence studio 5.1)

SAS Marketing Automation provides marketers with an easy to use solution to plan, test and execute marketing campaigns of any size or level of complexity. SAS' proven capabilities for campaign management, analytics, data integration and business intelligence, along with flexible deployment options, empower marketers to create and deliver the right campaign at the right time.

Benefits

1. Easily create marketing campaigns. 2. Coordinate campaign activities across the enterprise. 3. Improve marketing performance. 4. Lower total cost of ownership by maintaining compatibility with existing systems. 5.

Training to customer touch points for promotion of VAS

FSD's of Reliance Mobile Store FSD's of Reliance Web World

Up-Selling VAS through Retail Network

Reliance Mobile Stores Reliance World Store

Direct Promotion to Subscribers

Promotional Messages Tele-Calling / OBD



Features

• Customer segmentation, profiling and testing • Campaign planning, execution and management • Campaign measurement and analysis • Advanced analytics • Administration and security • Flexible deployment options

A campaign is designed everyday for a burst of promotional messages to the customer base regarding various offers and schemes available under the VAS basket. The designing of campaign is accomplished through a series of various steps like selecting the service base (GSM or CDMA), the area (DELHI), schedule date and the communication (the message content). The communication needs to be precise and accurate with a limited amount of characters that the system supports. The content is usually in a mix of language for better interpretation by the customer and key words highlighted to attract the same. A text for example: “FREE CALLER TUNE: AAJ har rechrg par paaye FREE caller t une 7 din tak. No Subscription fee! Tune charge: Rs10.Auto-renewal 7 din baad.Reliance”

Stepwise Campaign Design Process on SAS The first step as you can see below in the screenshot is to log in the SAS with the username and passwords provided by the company, and then select the “New Campaign” design option. The username and password is provided by the company to selective employees only, thus it was one of the limitations of my project where I was not having the direct access for SAS and had to use it on my company guide’s system. After logging the next step is to select one of the succeeding options to get started with SAS. For designing a campaign the option “Campaigns” is selected under the sub section “New”.



• After getting into SAS the following screen appears on which the scheduling is done using various tools of this software.



• On the right side of the screen you can see the various options of scheduling which helps creating a flowchart like structure to prepare the campaign schedule wise in the form of a flowchart.

• The “select” option from the right side is selected to create a box like structure and then the properties of the box are chosen by clicking the option for properties and the box is set for that particular schedule.

• The first box created as in following screen shot is selected for properties and chosen for business type and then the particular business type is selected (GSM or CDMA, prepaid or postpaid).





• Similarly, all the scheduling necessities are selected as shown under and are then linked up together to form one single step for the schedule and then are linked up with other steps to prepare a flowchart like structure.



• The steps are bounded together by selecting a box named “CELL”, which is used to accumulate all the previous steps as one step and bind them together to link up with the next step.

• The next step as you can see is the communication, which holds the particular Promotional Message to be sent on the customer base.

• The cell named communication is selected from the right side of the screen and then its properties are edited according to the message we want to send.

• As we can see in the screen shot, after getting into the properties of the cell, there is a particular field wherein the Promotional Message is copied and then this particular message is sent to the customer base for VAS promotion.



As we can see above the message is copied in the field named “SMS text”. After this scheduling, the whole process is sent for approval for the particular date and then the message is sent to the selected customer base.

8.2.2 Tele-Calling

VAS promotion is also done via Tele-calling which involves calling customers based on their Current Balance criteria and offering them various products and services related to VAS. This is done by INDIA CALLING which is the approved Tele-calling agency for Reliance Communication. A database is created consisting of customer MDN’s and their response to the call. In Delhi circle, Tele-calling is an effective means of promotion as it involves more interaction with the customer. Customer feels much more involved and benefits are discussed at that very moment and satisfaction level is reached every time. The customer base is prepared and devised on the current balance basis and provided to INDIA CALLING. The performance is measured by their net contactibility and conversion rate. The daily MIS report is generated by the system and provided to the VAS department and then it is filtered as required by running queries in Microsoft Access. The steps involved regarding preparation of the base required is as under:

• The first step is to import the text file into access and filter the base to get only the MDN’s (Mobile Directory Number) and the current balance:



• The next step is to run the query as required of the current balance, i.e. segregating on the

basis of the current balance to generate different base of customer MDN’s and target the service accordingly, the one below is showing the query design of current balance between Rs 3 and Rs 15:

• After designing the query, it is run to get the wanted customer MDN’s:



• Similarly other queries are run as according to the current balance to segregate the base and target accordingly. The screen shot below gives the detail of queries in the left side of the window:

As we can see from the above steps, the base is segregated according to the current balance of the customer and we get different bases for targeting our services to those customers through



tele-calling done by INDIA CALLING. The final files are exported in the “text” format which contains all the MDN’s as according to the condition of current balance.

8.2.3 Up-Selling

Upselling 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. Upselling 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.

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 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 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 monthly. 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. 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.

Fig. 8.2

Covering the geographical area Delhi/NCR for the project of Up-Selling required visits to a number of Reliance Mobile Stores (RMS) and Reliance World (RW) in each 8 clusters as divided by the company for its geographical area of operation. Pushing for VAS sales was done at every store visited and along it getting the feedback for devising future strategies for Retail Integration was the aim of this part of project. The Up-Selling report was submitted to the company as my feedback and is attached along in the annexure.

8.2.4 Training To Customer Touch Points for VAS Sales and Promotion

It involves acquisition of knowledge, skills, and competencies as a result of the teaching of vocational or practical skills and knowledge that relate to specific useful competencies. It forms the core of apprenticeships and provides the backbone of content. In addition to the basic training required for a trade, occupation or profession recognize today the need to continue training beyond initial qualifications: to maintain, upgrade and update skills throughout working life. People within many professions and occupations may refer to this sort of training as professional development.

Devising Strategies for next

level i.e. Retail Integration

Feedback to comapny with

Up-Selling

Report

Push for VAS sales at RMS &

RW

Visit RMS & RW



Training to customer touch points was done for the following reasons:

• To educate the front end people about VAS as Revenue generator • To make them realize the importance of VAS

• To make them aware regarding various services under VAS

• To push them for VAS sales to earn incentives

• To further educate people they daily come in contact

Fig. 8.3 (Steps Devised for Training Customer Touch Points)

Conducted a 2 hour training program everyday for a week duration regarding VAS at Reliance for the FSD’s of Reliance Mobile Store and Reliance World Stores. It included basic knowledge of VAS products and services, to make the attendees understand about VAS and the importance of VAS in terms of Revenue Generation. A presentation was given regarding this and an interesting environment was created including discussion on VAS and also all the participants were administered a quiz in the end. Prizes were also given to the winners of the quiz session. Apart from this, trainees were constantly encouraged to promote and push the sales of VAS at their respective customer touch points to win incentives and help increase VAS revenue in the circle. GPRS leaflets describing ways to activate GPRS were also distributed.

Agenda

• Content

• Schedule

Communication

• Invite attendees

• Reminder Mails and notifications

Execution

• Take on with the program

• Close the program with feedback to company



The training program had to be strategized right from the first step of devising the agenda, schedule and the content along with the quiz. The following steps of strategy was devised and executed.



9. Market Research for Retail Integration

9.1 RESEARCH DESIGN

A research design is a framework or blue print for the marketing research project. The methodology and techniques designed is the program that guides the investigator in the process of collecting, analyzing and interpreting data. The specifications of the details of how the research was conducted is given below:

9.1.1 TYPE OF RESEARCH

In the initial phase of the project exploratory research was conducted .The main objective of exploratory research was to define the problem more precisely, identification of relevant course of action and gaining additional insights. Qualitative research was the main objective to have deeper understanding of the problem.

The following exploratory studies were employed:

1. Interviews with the employees of the organization. 2. Interviews with retailing experts to determine the trends ,such as diversification of Value

Added Services offered by the operator, growing competition and consumer perception.

The insights from the exploratory research were verified using descriptive research. Single cross-sectional study was conducted. Information was collected from a given sample of population only once by drawing the sample of respondents from target population. The objective of exploratory research was to identify various factors which influence sales and promotion of VAS through the retail network.

9.1.2 INFORMATION NEEDS

9.1.2.1 Data collected from secondary sources

Secondary data was important to the project to gain understanding of the problem more clearly, for developing appropriate research design and to interpret primary data more insightfully. The e-Retail phenomenon has been largely overlooked for quite some time. However, a number of studies have attempted to investigate this phenomenon, mainly through empirical surveys in different countries and market segments.



The main sources of secondary data was

• Company’s revenue reports i.e. revenue generated through different channels.

9.1.2.2 Data collected from primary sources

The primary data was collected from the survey through one on one interview with the retailer. Questionnaire was used to record the responses.

9.1.3 MEASUREMENT AND SCALING PROCEDURE

To rate the importance of various factors Likert scale was used that required the respondent to indicate their degree of agreement and disagreement. Likert scale was chosen due to its advantages over other scaling techniques.

The following advantages were observed in using Likert scale:

1. Easy to construct and administer 2. Multivariate techniques like factor analysis can easily be applied.

9.1.4 QUESTIONNAIRE DESIGN

There were three objectives that were kept in mind while designing the questionnaire:

1. Questionnaire must translate the information needed into a set of specific questions that the respondents can and will answer.

2. It must uplift, motivate, and encourage the respondent to get involved in the interview, to cooperate and to complete the interview.

3. It should minimize response error.

The questionnaire comprised of close ended questions to capture the perception of the retailer. The questionnaire was pre-tested and timed to take approximately 10(+5 minutes) for a respondent to complete. The questionnaire was structured and designed to reduce the level of “respondent fatigue” to an extent that was practically possible.

Pre- test and Pilot test

After designing the questionnaire, a pre-test was conducted and a pilot testing was carried out. The aim of testing the questionnaire was to minimize measurement error.

The Pre Test was conducted the in three ways:

1. Literature review (Secondary data) 2. Expert opinion 3. Cognitive recognition



The questionnaire was discussed among the marketing team of Reliance Communication Ltd. and Key decision makers. The following questions were asked:

1. Are the questions and responses valid and reliable? 2. Are they appropriate? 3. Are they both necessary and sufficient?

Then, the questionnaire was administered to a small number of people drawn from the population of interest through personal interviews. The time required to complete each questionnaire was measured, additional information which was provided to clarify directions and question wording was analyzed. Debriefing was carried out and there feedback was noted.

The questionnaire was then revised as needed.

Pre testing aimed at following:

1. Identifying sources of potential non-sample error: 2. Identifying error the respondent makes due to the questionnaire; 3. Identifying errors due to the method of delivery or errors caused by sequencing; and 4. Identifying errors caused by the interaction of these factors.

Following were the benefits of pre –testing of questionnaire:

1. Reduced survey development time 2. Reduced survey costs 3. Improved the quality of data collected

The pilot study was a simulation of the full project, including the questionnaire, and all other aspects. A sample of 25 responses were obtained, coded, and analyzed. Questions that were not providing useful data were discarded, and the final revisions of the questionnaire were made.

9.1.5 SAMPLE DESIGN

Sample design covers the method of selection, the sample structure and plans for analyzing and interpreting the results. Sample design affects the size of the sample and the way in which analysis is carried out.

The sample design in the project is based on Probability sampling which is built around the concept of random selection. This permits justifiable inference from the sample to the population, at quantified level of precision. Probability sampling also guard against sample bias in a way that selection by judgment or convenience cannot. Systematic sampling was chosen for the survey.



Sampling Design

Target Population

Retailers of various locations be it strategically placed in a market or placed in a relatively less crowded market.

Sampling Frame Retailers of south and central cluster of Delhi/NCR region

Sampling Technique Systematic sampling Sample size 25

Execution

Sequentially sample the population elements ,collect and analyze the data at each stage

Table 9.1: Sampling Design

9.1.6 FIELD WORK

Field work was conducted from 19.04.2010 to 22.04.2010 in Delhi. The data was collected through one-on-one interviews. The location map of the areas to be covered can be found in Annexure II.

9.1.7 DATA ANALYSIS

As the sample size was only 25, not much analysis could be done for the same. Also, the main aim of the research was to understand the retailer’s perspective regarding VAS integration through incentives and hence promotion to end customers.

To get a clear picture of the retailer response a frequency analysis was done wherein the frequency of retailer’s response was analyzed. The analysis is done using SPSS 16.0 for windows.

Following are the graph representations regarding the frequency of retailers for each question asked and the interpretation drawn along.



Fig. 9.1: Total footfall

Interpretation This is the first question asked which is the “total footfall of your store”. This question is asked to get an idea regarding the total number of customers at an average that the retailer is serving on daily basis. The response is highest for 100-150 customers per day.

Fig. 9.2: Retailer’s Knowledge for VAS

Interpretation This is the second questin asked which is “know completely about VAS”. This question is asked to get to know the awareness they have regarding VAS before launching the incentive scheme. The highest response is “Disagree”



Fig. 9.3: Retailers fully aware of VAS

Interpretation This is the third question asked which is “fully aware of major services”. This question is asked to get to know the awareness they have regarding major services of VAS like CRBT, MCA, GPRS etc., before launching the incentive scheme. The highest response is “Agree”, ie 15 out of 25 retailers are aware of major Value Added Services.

Fig. 9.4: Customers that come enquiring for VAS

Interpretation This is the fourth question asked which is “how many customers come enquiring for VAS”. This question is asked to get to know the awareness customers have regarding VAS and their usage, if they are using these services and buying them. The highest response is “1-10”, ie 25 out of 25 retailers say that only 1-10 customers come enquiring for value added services on daily basis.



Fig 9.5: Ususal VAS activations

Interpretation This is the question asked which is “customers usually come for activations like”, with options given ie. CRBT, MCA, Cricket, GPRS or ANY OTHER. This question is asked to get to know the demand and usage of these particular services. The highest response is “AGREE”, ie 19 out of 25 retailers agree that customers if come for any VAS service activation then those services fall in this category only.

Fig. 9.6: Major VAS service

Interpretation This is the question asked which is “for which service do customers usually come”, with options given ie. CRBT, MCA, Cricket, GPRS or ANY OTHER. This question is asked to get to know the demand and usage of these particular services. The highest response is for the service“MCA”, ie 13 out of 25 retailers say that mostly customers come for MCA under Value Added Services. And the second highest being CRBT for which 11 out of 25 retailers agreed.



Fig. 9.7: Retailer will promote if given incentives

Interpretation This is the question asked which is “will promote if given incentive”. This question is asked to know if the retailer is interested in promoting and pushing Value Added Services if given incentives. The highest response is for “AGREE”, ie 16 out of 25 retailers say that they will promote and push Value Added Services if given incentives.

Fig 9.8: Incentive expected

Interpretation This is the question asked which is “incentive I expect”. This question is asked to know the incentive that the retailer expect for promoting and pushing Value Added Services. The highest response is for “15-20%”, ie 17 out of 25 retailers say that they will promote and push Value Added Services if given incentives of about 15-20%.



Total Footfall

of Customers

Retailer's

Total Footfall

10-50 0

50-75 2

75-100 6

100-150 13

>150 4

Table 9.2: Retailer’s total footfall

Fig. 9.9: Retailer's Total Footfall

0

26

13

4

Retailer's Total Footfall

10-50

50-75

75-100

100-150

>150



Percentage of

Reliance Customers

Visit per day /

Retailer

Count of

Retailer

10% 3

20% 13

30% 9

Table 9.3: percentage & count of reliance customers

Fig. 9.10: Percentage of Reliance Customers Visit per day / Retailer

Percentage of Reliance Customers

Visit per day / Retailer

10%

20%

30%



GROWTH OPPORTUNITY

Fig. 9.11: Growth Opportunity

Fig. 9.12: Awareness amongst retailers

Action Taken Looking at the response of the survey with the retailer’s conclusion was made to launch the e-Retailer scheme without any hesitation as the maximum number of retailers is ready willingly to promote and push for Value Added Services if they are given incentives. The scheme launched was regarding the same guidelines, which included a certain percentage of incentive for retailers for activating or subscribing the customer with CRBT i.e. Caller Ring Back Tone as Value Added Service.

0

2

4

6

8

10

12

14

16

Low Medium High

Awareness amongst Retailers

Low

Medium

High

5075

100

150

200

5

5

5

5

5

0

50

100

150

200

250

1 2 3 4 5 6

Number of Customers

Come enquiring for VAS

Total footfall



10. Market Research to Analyze Customer Behavior for VAS

10.1 INTRODUCTION It is essential for any firm to undergo a market research and analyze where its product/service stand in the market and recognize factors which can help increase the revenue and take the organization into the right direction for its product/services. It helps in deciding the action plan and frame strategies in order to increase its sales and awareness amongst the masses. In my project I carry out a research with the help of a survey by coming in contact with the customers and let know their awareness, liking and usage of value added services with the help of a questionnaire and followed by its analyses using SPSS. This helps the organization know how their product/services is doing in the market and hence strategize VAS promotions accordingly.

10.2 METHODOLOGY The methodology adopted and devised is as under:

Fig. 10.1: Methodology for research

Exploratory Research

Questionnaire Design

Survey Research

Data Collection

Data processing and analysis



10.3 RESEARCH DESIGN

A research design is a framework or blue print for the marketing research project. The methodology and techniques designed is the program that guides the investigator in the process of collecting, analyzing and interpreting data. The specifications and the details of how the research was conducted are given below:

10.3.1 TYPE OF RESEARCH

In the initial phase of the project exploratory research was conducted .The main objective of exploratory research was to define the problem more precisely, identification of relevant course of action and gaining additional insights. Qualitative research was the main objective to have deeper understanding of the problem.

The following exploratory studies were employed:

3. Interviews with the employees of the organization. 4. Interviews with retailing experts to determine the trends, such as awareness of Value

Added Services offered by the operator, demand for services in market, growing competition and consumer perception.

The insights from the exploratory research were verified using descriptive research. Single cross-sectional study was conducted. Information was collected from a given sample of population only once by drawing the sample of respondents from target population. The objective of exploratory research was to identify various factors which influence sales and behavior regarding Value Added Services amongst end users.

10.3.2 INFORMATION NEEDS

10.3.2.1 Data collected from secondary sources

Secondary data was important to the project to gain understanding of the situation more clearly, for developing appropriate research design and to interpret primary data more insightfully. The customer phenomenon has been largely overlooked for quite some time. However, a number of studies have attempted to investigate this phenomenon, mainly through empirical surveys in different countries and market segments.

The main sources of secondary data were



1. Government bodies-TRAI, CSO, COAI 2. Research Publications

10.3.2.2 Data collected from primary sources

The primary data was collected from the survey through one on one interview with the customer. Questionnaire was used to record the responses.

10.3.3 MEASUREMENT AND SCALING PROCEDURE

To rate the importance of various factors Likert scale was used that required the respondent to indicate their degree of agreement and disagreement. Likert scale was chosen due to its advantages over other scaling techniques.

The following advantages were observed in using Likert scale:

3. Easy to construct and administer 4. Multivariate techniques like factor analysis can easily be applied.

10.3.4 QUESTIONNAIRE DESIGN

There were three objectives that were kept in mind while designing the questionnaire:

4. Questionnaire must translate the information needed into a set of specific questions that the respondents can and will answer.

5. It must uplift, motivate, and encourage the respondent to get involved in the interview, to cooperate and to complete the interview.

6. It should minimize response error.

The questionnaire comprised of close ended questions to capture the perception of the retailer. The questionnaire was pre-tested and timed to take approximately 10(+5 minutes) for a respondent to complete. The questionnaire was structured and designed to reduce the level of “respondent fatigue” to an extent that was practically possible.

Pre- test and Pilot test

After designing the questionnaire, a pre-test was conducted and a pilot testing was carried out. The aim of testing the questionnaire was to minimize measurement error.

The Pre Test was conducted the in three ways:

4. Literature review (Secondary data) 5. Expert opinion



6. Cognitive recognition

The questionnaire was discussed among the marketing team of Reliance Communication Ltd. and Key decision makers. The following questions were asked:

4. Are the questions and responses valid and reliable? 5. Are they appropriate? 6. Are they both necessary and sufficient?

Then, the questionnaire was administered to a small number of people drawn from the population of interest through personal interviews. The time required to complete each questionnaire was measured, additional information which was provided to clarify directions and question wording was analyzed. Debriefing was carried out and there feedback was noted.

The questionnaire was then revised as needed.

Pre testing aimed at following:

5. Identifying sources of potential non-sample error: 6. Identifying error the respondent makes due to the questionnaire; 7. Identifying errors due to the method of delivery or errors caused by sequencing; and 8. Identifying errors caused by the interaction of these factors.

Following were the benefits of pre –testing of questionnaire:

4. Reduced survey development time 5. Reduced survey costs 6. Improved the quality of data collected

The pilot study was a simulation of the full project, including the questionnaire, and all other aspects. A sample of 25 responses were obtained, coded, and analyzed. Questions that were not providing useful data were discarded, and the final revisions of the questionnaire were made.

10.3.5 SAMPLE DESIGN

Sample design covers the method of selection, the sample structure and plans for analyzing and interpreting the results. Sample design affects the size of the sample and the way in which analysis is carried out.

The sample design in the project is based on Probability sampling which is built around the concept of random selection. This permits justifiable inference from the sample to the population, at quantified level of precision. Probability sampling also guard against sample bias



in a way that selection by judgment or convenience cannot. Systematic sampling was chosen for the survey.

Sampling Design

Target Population Reliance Customers for both GSM and CDMA connection in Delhi region.

Sampling Frame Customers of Delhi/NCR region Sampling Technique Systematic sampling

Sample size 125

Execution

Sequentially sample the population elements ,collect and analyze the data at each stage

Table 10.1: sampling design

10.3.6 FIELD WORK and DATA COLLECTION Field work was conducted from 1.05.2010 to 10.05.2010 in Delhi. The data was collected through one-on-one interviews. The location map of the areas covered can be found in Annexure II. Data was collected through the survey conducted on various people at Reliance Mobile Stores and Reliance World Stores. Data was collected by visiting various stores in the Delhi/NCR region. To accumulate a sample of 125 a questionnaire was prepared and the respondent’s response was taken at these stores which also gave an opportunity to discuss and converse regarding Value Added Services.



10.4 ANALYSIS 10.4.1 DATA ANALYSIS

Demographic Details

Age Group

Number of

Respondents

Falling in Age

Group

18-25 32

25-35 50

35-40 37

40-50 6

>50 0

Table 10.2: customer’s age group

Fig. 10.2: Respondent’s Age Group

Interpretation As we can see from the chart above, maximum of the respondents fall in the age group of 25-35 years. This age group represent the working class, be it the service class or self-employed people. Hence, from this detail of demographic we can take a look at the major segment which uses mobile phone actively and targeting various Value Added Services to this class will be beneficial to the company.

32

50

37

6

Number of Respondents Falling in Age Group

18-25

25-35

35-40

40-50

>50



Occupation Respondent

Segment

Self Employed 27

Service 66

Student 26

House Wife 6

Another 0

Table 10.3: customer’s occupation

Fig. 10.3: Respondent Occupation

Interpretation As we can see from the chart above, maximum of the respondents fall in the service class segment. Hence, from this detail of demographic we can take a look at the major segment which uses mobile phone actively and targeting various Value Added Services to this segment will be beneficial to the company.

Monthly Bill

Number of Customers

with particular

Monthly Bill

Rs. 150-250 6

Rs. 250-350 31

Rs. 350-500 6

Rs. >500 82

Table 10.4: Customer’s monthly bill

27

66

266

0

Respondent Segment

Self Employed

Service

Student

House Wife

Another



Fig. 10.4: Customer’s Average monthly Bill

Interpretation The above chart reflects the amount of usage amongst the respondents. How much they use their mobile phone on a monthly basis which gets reflected in their monthly bill. We can see here that the usage is pretty good as majority of respondents pay a monthly bill of over Rs 500.

Monthly

Expenditure

Number of

Customers with

Monthly VAS

Expenditure

Rs. 0 53

Rs. <50 43

Rs. 50-100 23

Rs. >100 6

Table 10.5: customer’s monthly VAS expenditure

0

20

40

60

80

100

Rs. 150-

250Rs. 250-

350Rs. 350-

500 Rs. >500

6 31

6

82

Number of Customers with

particular Monthly Bill

Number of Customers

with particular Monthly

Bill



Fig. 10.5: Customer’s Average monthly VAS expenditure

Interpretation The above chart reflects the amount of VAS usage amongst the respondents. How much they use Value Added Services on their mobile phone on a monthly basis which gets reflected in their monthly VAS Expenditure. We can see here that the usage is not good as majority of respondents expend Rs. 0 on value added services. Only around 30 respondents spend a fair amount towards VAS.

Network & Subscriber type Cross tabulation

Count

Subscriber type

Total Prepaid Postpaid

Network CDMA 17 71 88

GSM 37 0 37

Total 54 71 125

Table 10.6: Network & subscriber type cross tabulation

0

10

20

30

40

50

60

Rs. 0 Rs. <50 Rs. 50-

100

Rs.

>100

5343

236

Number of Customers with

Monthly VAS Expenditure

Number of Customers

for Monthly VAS

Expenditure



Fig. 10.6: Subscriber Type amongst customers

Interpretation This cross tabulation shows the ratio of respondents falling in prepaid or postpaid category. This is a part of customer profiling to understand the survey sample. Maximum number of respondents falls in the CDMA category of network with majority postpaid connections while under GSM network all of them are prepaid customers.

Age & Awareness of value added services Cross tabulation

Count

I am aware of value added services

Total Strongly

Disagree Disagree Neutral Agree Strongly Agree

Age 18-25 0 6 7 13 6 32

25-35 0 6 22 22 0 50

35-40 6 17 14 0 0 37

40-50 6 0 0 0 0 6

Total 12 29 43 35 6 125

Table 10.7: Age & Awareness of value added services Cross tabulation



Fig. 10.7: Age & Awareness of value added services Cross tabulation

Interpretation This cross tabulation shows the ratio of respondents falling in respective age group and their awareness regarding value added services. A chi-square test has also been performed under to throw light upon this tabulation. From the chart above we can see that maximum number of respondents who agree for VAS awareness fall in the age group 25-35.

Occupation & Awareness of value added services Cros s tabulation Count


Total Strongly

Disagree Disagree Neutral Agree Strongly Agree

Occupation Self Employed 6 11 5 5 0 27

Service 0 12 31 17 6 66

Student 0 6 7 13 0 26

House Wife 6 0 0 0 0 6

Total 12 29 43 35 6 125

Table 10.8: Occupation & Awareness of value added services Cross tabulation



Fig. 10.8: Occupation & Awareness of value added services Cross tabulation Two variable Chi square test of Independence

Awareness

Age Group

18-25 25-35 35-40 40-50 >50

Aware 19 22 0 0 0

Unaware 13 28 37 6 0

Table 10.9: VAS Awareness with different age groups

In this case the research question is: Is age independent of Value Added Services Awareness?

Ho=There is no significant difference of awareness with age.

H1=There is significant difference of awareness with age.



Awareness

18-25 25-35 35-40 40-50 >50

observed

Expected

(O-E)2/E

Observed

Expected

(O-E)2/E

Observed

Expected

(O-E)2/E

Observed

Expected

(O-E)2/E

Observed

Expected

(O-E)2/E

TOTAL

Aware 19 16 4.5 22 25 4.5 0 18.5 171.125

0 3 4.5 0 0 0 62.5

Unaware

13 16 4.5 28 25 4.5 37 18.5 171.125

6 3 4.5 0 0 0 84

TOTAL

32 50 37 6 0

Table10.10: Frequency distribution table for chi square test of Independence

χ2= 369.25

df =(c-1)(r-1)

= 4

Taking α = 0.05

χ2 critical = 9.49

Null hypothesis is rejected since, χ2 ≥ 9.49

So there is significant difference in the level of awareness of users for age as criterion.

Analysis of Factors

Factor analysis attempts to identify underlying factors that explain a pattern of correlations within the set of observed variables. Variables under consideration for the research are:

a) Awareness of Value Added Services b) Value for money/ services worth its charges c) If services are useful d) Variety of services e) Using these services f) Will soon subscribe to these ser vices g) Not aware of all kinds of services h) Pocket does not allow to subscribe these services i) Aware of them in other operators



j) Use Mobile Internet k) Mobile internet convenience l) Enjoy Caller Ring Back Tones

Factor analysis will identify small number of factors that explain most of the variance observed in these variables.

Correlation Matrix

I am

aware

of

value

added

service

s

These

servic

es are

worth

its

charg

es.

These

servic

es are

useful

for

me.

There is

variety of

services

according

to my

needs.

I am

alrea

dy

using

these

servic

es.

I will

soon

subscri

be to

one of

the

service

s.

I am

not

awar

e of

all

the

kind

of

servic

es.

My

pocket

does

not

allow

me to

subscri

be to

any of

these

service

s.

I am

aware

of

these

service

s in

Vodafo

ne /

Airtel /

Idea /

Aircel

I often

use my

mobile

phone

for

browsi

ng

interne

t.

Interne

t

throug

h

mobile

is very

conven

ient.

I enjoy

caller

ring

back

tones/

hello

tunes

on my

phone

Correlation I am aware of value

added services

1.000 0.509 0.714 0.728 0.508 0.463 -

0.257

-0.191 0.016 0.402 0.516 0.587

These services are

worth its charges.

0.509 1.000 0.776 0.626 0.777 0.623 0.017 -0.213 0.084 0.758 0.640 0.699

These services are

useful for me.

0.714 0.776 1.000 0.806 0.828 0.699 0.044 -0.095 0.236 0.641 0.632 0.824

There is variety of

services according

to my needs.

0.728 0.626 0.806 1.000 0.699 0.591 0.265 -0.140 0.159 0.618 0.742 0.732

I am already using

these services.

0.508 0.777 0.828 0.699 1.000 0.589 0.015 -0.034 0.401 0.865 0.724 0.907

I will soon

subscribe to one of

the services.

0.463 0.623 0.699 0.591 0.589 1.000 0.063 -0.076 0.349 0.400 0.466 0.509

I am not aware of

all the kind of

services.

-0.257 0.017 0.044 0.265 0.015 -0.063 1.000 0.073 -0.011 0.033 0.069 0.061

My pocket does

not allow me to

subscribe to any of

these services.

-0.191 -0.213 -0.095 -0.140 -0.034 -0.076 0.073 1.000 0.009 -0.218 -0.209 0.058

I am aware of these

services in

Vodafone / Airtel /

Idea / Aircel

0.016 0.084 0.236 0.159 0.401 0.349 -

0.011

0.009 1.000 0.344 0.245 0.191

I often use my

mobile phone for

browsing internet.

0.402 0.758 0.641 0.618 0.865 0.400 0.033 -0.218 0.344 1.000 0.749 0.773

Internet through

mobile is very

convenient.

0.516 0.640 0.632 0.742 0.724 0.466 0.069 -0.209 0.245 0.749 1.000 0.738



I enjoy caller ring

back tones/hello

tunes on my

phone.

0.587 0.699 0.824 0.732 0.907 0.509 0.061 0.058 0.191 0.773 0.738 1.000

Sig. (1-

tailed)

I am aware of value

added services

0.000 0.000 0.000 0.000 0.000 0.002 0.016 0.430 0.000 0.000 0.000

These services are

worth its charges.

0.000 0.000 0.000 0.000 0.000 0.427 0.009 0.176 0.000 0.000 0.000

These services are

useful for me.

0.000 0.000 0.000 0.000 0.000 0.312 0.147 0.004 0.000 0.000 0.000

There is variety of

services according

to my needs.

0.000 0.000 0.000 0.000 0.000 0.001 0.060 0.038 0.000 0.000 0.000

I am already using

these services.

0.000 0.000 0.000 0.000 0.000 0.433 0.352 0.000 0.000 0.000 0.000

I will soon

subscribe to one of

the services.

0.000 0.000 0.000 0.000 0.000 0.242 0.199 0.000 0.000 0.000 0.000

I am not aware of

all the kind of

services.

0.002 0.427 0.312 0.001 0.433 0.242 0.209 0.453 0.357 0.222 0.248

My pocket does

not allow me to

subscribe to any of

these services.

0.016 0.009 0.147 0.060 0.352 0.199 0.209 0.460 0.007 0.010 0.261

I am aware of these

services in

Vodafone / Airtel /

Idea / Aircel

0.430 0.176 0.004 0.038 0.000 0.000 0.453 0.460 0.000 0.003 0.017

I often use my

mobile phone for

browsing internet.

0.000 0.000 0.000 0.000 0.000 0.000 0.357 0.007 0.000 0.000 0.000

Internet through

mobile is very

convenient.

0.000 0.000 0.000 0.000 0.000 0.000 0.222 0.010 0.003 0.000 0.000

I enjoy caller ring

back tones/hello

tunes on my

phone.

0.000 0.000 0.000 0.000 0.000 0.000 0.248 0.261 0.017 0.000 0.000

a.

Determinant

= 4.00E-006

Table 10.11: SPSS output-Correlation Matrix for drivers of Value Added Services Customer Behavior

Assumptions: The data is assumed to be distributed normally for each pair of variables and observations are independent of each other. The assumption of normality is important to generalize the results of the analysis beyond the sample collected.

Data screening

Since SPSS will always find a factor solution to a set of variables the solution will have any real meaning if variable analyzed are not sensible. The inter-correlation among the variables is checked to ensure the reliability of factor analysis. The correlation matrix is created as a part of main factor analysis.



Preliminary analysis

Table 10.11 shows bridged version of R-matrix. The top half of the table contains Pearson correlation coefficient between all pairs of variables. The matrix can be used to check the pattern of relationship. Since the values with significance greater than .05 are less than 0.9 so singularities is not a problem in our analysis.

All variables in the research correlates fairly well and none of the correlation coefficient are particularly large; therefore there is no need to consider eliminating any questions at this stage.

Table 10.12 shows the Kaiser-Meyer –Olkin measure of sampling adequacy and barlett’s test of sphericity. The KMO statistic varies between 0 and 1.A value of 0 indicates that the sum of partial correlation is large relative to the sum of correlations, indicating diffusion in the pattern of correlation (hence factor analysis is likely to be inappropriate).Kaiser (1974) recommends accepting values greater than 0.5 as acceptable (values below this leads to increase in sample size).The value of KMO is .706 which fall in range so factor analysis is appropriate to be used in this research.

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .706

Bartlett's Test of Sphericity Approx. Chi-Square 1.481E3

df 66

Sig. .000

Table 10.12: SPSS output -KMO and Barlett’s Test Barlett’s Test of sphercity measures the null hypothesis that the original correlation matrix is an identity matrix. For factor analysis to work we need some relationship between variables and if the R-matrix were an identity matrix then all correlation coefficient would be zero, There fore significance of this test is very important. For this research the barlett’s test is highly significant (p<0.001) and therefore factor analysis is appropriate.

Factor Extraction

Table 10.13 list the Eigen values associated with each linear component (factor) before extraction, after extraction and after rotation. The Eigen value associated with each variable indicates the variance explained by that particular linear component and SPSS also displays the Eigen value in terms of percentage of variance explained. The first few factors explain larger variance whereas subsequent factors explain only small amount of variance.



Total Variance Explained

Component Initial Eigen values Extraction Sums of Squared Loadings

Rotation Sums of Squared Loadings

Total % of Variance

Cumulative %

Total % of Variance

Cumulative %

Total % of Variance

Cumulative %

1 6.463 53.858 53.858 6.463 53.858 53.858 6.441 53.678 53.678

2 1.259 10.494 64.351 1.259 10.494 64.351 1.215 10.125 63.803

3 1.115 9.293 73.644 1.115 9.293 73.644 1.181 9.841 73.644

4 1.015 8.457 82.101

5 0.768 6.403 88.504

6 0.571 4.761 93.265

7 0.330 2.754 96.018

8 0.189 1.574 97.593

9 0.131 1.089 98.682

10 0.076 0.637 99.319

11 0.050 0.416 99.735

12 0.032 0.265 100.000

Extraction Method: Principal Component Analysis.

Table 10.13: SPSS output-Eigen values and variance explained

The Eigen values associated with these factors are again displayed (and the percentage of variance explained) in the columns labeled Extraction Sum of Squared loadings. The values in this part of the table are same as the values before extraction except that the values for the discarded factors are ignored (hence the table is blank after fourth factor).In the final part of the table (labeled rotation sum of square loadings), the Eigen values of the factors after rotation are displayed. Rotation has the effect of optimizing the factor structure and one consequence for these data is that the relative importance of the four factors is equalized.

Table 10.14 shows the table of communalities before and after extraction. Principal component analysis works on the initial assumption that all variance is common; therefore before extraction the communalities are all 1.The communalities in the column labeled Extraction reflect the common variance of the data structure. After extraction some of the factors are discarded and so some information is lost. The amount of variance in each variable that can be explained by the retained factors is represented by communalities after extraction.



Communalities

Initial Extraction I am aware of value added services 1.000 0.727

These services are worth its charges. 1.000 0.734

These services are useful for me. 1.000 0.841

There is variety of services according to my needs. 1.000 0.829

I am already using these services. 1.000 0.906

I will soon subscribe to one of the services. 1.000 0.559

I am not aware of all the kind of services. 1.000 0.884

My pocket does not allow me to subscribe to any of these services.

1.000 0.366

I am aware of these services in Vodafone / Airtel / Idea / Aircel 1.000 0.755

I often use my mobile phone for browsing internet. 1.000 0.718

Internet through mobile is very convenient. 1.000 0.695

I enjoy caller ring back tones/hello tunes on my phone. 1.000 0.823

Extraction Method: Principal Component Analysis. Table 10.14: SPSS output-Communalities before and after extraction

Component Matrix

Component

1 2 3

I am aware of value added services 0.701 -0.479 -0.086

These services are worth its charges. 0.846 -0.093 -0.100

These services are useful for me. 0.916 -0.034 -0.082

There is variety of services according to my needs. 0.863 0.047

-0.286

I am already using these services. 0.926 0.160 0.151

I will soon subscribe to one of the services. 0.704 -0.045

0.249

I am not aware of all the kind of services. 0.036 0.722

-0.602


-0.166 0.543 0.208

I am aware of these services in Vodafone / Airtel / Idea / Aircel

0.314 0.381 0.715

I often use my mobile phone for browsing internet. 0.839 0.105

0.055



Internet through mobile is very convenient. 0.828 0.031

-0.093

I enjoy caller ring back tones/hello tunes on my phone. 0.897 0.133

-0.038

Extraction Method: Principal Component Analysis.

a. 3 components extracted.

Table 10.15: SPSS output-Component matrix before rotation

This output also shows the component matrix before rotation .Table 10.11 contains the loadings of each variable onto each factor. By default SPSS displays the entire loadings .This matrix is not particularly important for interpretation.

The justification of extracting 3 factors is given by scree plot. The scree plot output is shown below with a thunderbolt indicating the point of inflexion on the curve.

Fig. 10.9

SPSS output-Scree Plot

Factor Rotation

Table 10.16 shows the rotated component matrix which is a matrix of the factor loadings of each variable onto each factor. The variables included in the factor are highlighted to indicate the association of the variable with the factor. Orthogonal rotation is used because of the assumption that the factors are theoretically unrelated to each other.



Rotated Component Matrix

Component

1 2 3


0.691 -0.345 -0.362

These services are worth its charges.

0.847 -0.054 -0.116

These services are useful for me.

0.915 -0.060 -0.021

There is variety of services according to my needs.

0.879 0.172 -0.163

I am already using these services.

0.920 -0.033 0.242

I will soon subscribe to one of the services.

0.687 -0.238 0.175

I am not aware of all the kind of services.

0.091 0.936 0.024


-0.162 0.281 0.510


0.282 -0.202 0.797

I often use my mobile phone for browsing internet.

0.837 -0.007 0.131

Internet through mobile is very convenient.

0.833 0.036 -0.029

I enjoy caller ring back tones/hello tunes on my phone.

0.901 0.073 0.082

Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization.

a. Rotation converged in 6 iterations.

Table 10.16: SPSS output-Rotated component matrix Interpretation

The contents of the variables is analyzed which is loaded on the same factor to identify the common theme.

The variables which load highly on factor 1 are services are worth its charges, services are useful, variety of services, already using these services, use mobile internet and use Caller Ring Back Tone/Hello Tunes. The factor 1 is labeled as: VAS Usage

The variables which highly load on factor 2 is: not aware of all the kind of services. The factor 2 is labeled as: VAS Awareness.



The variable which highly correlates with factor 3 is awareness of these services in Vodafone / Airtel / Idea / Aircel. The factor is labeled as: Substitute Awareness. Relative Importance of the factors*

The various factors which drive the user for the use of Value Added Services were analyzed for their relative importance in accordance with the responses through likert scale. The following table shows the frequency of responses for each attribute. The highlighted figure shows the maximum frequency of the degree of importance for an attribute.

Attributes 1 2 3 4 5 Strongly Disagree Strongly Agree

Aware of value added services

9.6% 23.2% 34.4% 28% 4.8%


0% 28% 33.6% 38.4% 0%


8.8% 14.4% 34.4% 37.6% 4.8%

There is variety of services according to my needs.

4.8% 14.4% 56.8% 24% 0%

Already using these services

8.8% 33.6% 0% 52% 5.6%


4% 28% 38.4% 29.6% 0%


0% 59.2% 8.8% 32% 0%


0% 71.2% 0% 28.8% 0%


0% 0% 4% 76% 20%

I often use my mobile phone for browsing internet.

0% 37.6% 28.8% 28% 5.6%


0% 23.2% 29.6% 37.6% 9.6%



I enjoy caller ring back tones/hello tunes on my phone.

4.8% 28% 9.6% 48.8% 8.8%

Table 10.17: Relative Importance of the factors

*Responses from Likert scale are treated as ordinal data because when using five levels,

assumption that adjacent levels are equidistant is not valid.

Fig10.10

Relative importance of factors

0 1 2 3 4 5

Aware of value added services



There is variety of services according to …

Already using these services



My pocket does not allow me to subscribe …

I am aware of these services in Vodafone / …

I often use my mobile phone for browsing …


I enjoy caller ring back tones/hello tunes …

Likert Scale Rating (5 point)



10.4.2 INDUSTRY ANALYSIS: PORTER’S FIVE FORCES MODEL

The Porter’s five forces tool is helpful to get the understanding of the potential of Indian telecom industry. The model provides useful insights about the Indian telecom Industry and its competiveness.

Fig 10.11: Porter’s five forces Model

MODERATE • Huge license fees to

be paid upfront & high gestation period

• Entry barriers have reduced

• Spectrum availability and regulatory issues

HIGH

• Intense rivalry in the industry due to large number of similar firms.

• Differentiation is low • Low customer

loyalty

LOW

• Low differentiation • Large number of

suppliers

HIGH

• Few switching cost • Undifferentiated

products

Threat of New Entry Competitive Rivalry

Supplier Power Buyer Power

MODERATE

• Low growth of Landlines

• Increasing use of VOIP

Threat of Substitution

Supplier

Power

Threat of

New Entry

Buyer

Power

Threat of

Substitution

Competitive

Rivalry



10.4.3 SWOT ANALYSIS

Analyzing an organization's competitiveness, involves an assessment of both the environmental and organizational factors that influence an organization's ability to compete effectively. SWOT analysis is one such method, where an organization's strengths, weaknesses, environmental opportunities and threats can be assessed.

The figure shows SWOT analysis of Reliance Communication Ltd.

Fig 10.12: SWOT Analysis of Reliance Communication Ltd.

STRENGTH1.PAN India Reach

2. Quality of network

3.Informative website

4.Strong Corporate governance

5.Wide Distribution channel

6.Part of Anil Dhirubhai Ambani

Group

WEAKNESS1.Customer GrievianceHandling

2.Low revenues from GPRS and mobile internet

3.Limited ad campaigns for value added services

OPPORTUNITIES1.Untouched International Market

2.Low penetration in Rural India provides opportunity for growth

4.Current teledensity 47.31 still low compared to developing countries

THREATS1.Competition from new entrants or Niche players entering into the market

2.Decling Average revenue per user(mainly due to multiple SIM scenario)

3.Manpower churning

4.Decreasing Customer Loyalty

5. Customer Churn after launch of Mobile Number Portability (MNP)



11. FINDINGS

1. About 50% of the respondents use VAS, but still the awareness is low.

2. 60% of the respondents say that they are not aware of all kinds of Value Added Services.

3. While doing the comparison for Data Platform for Reliance with its competitors, it was

found that many services were not available in reliance while also there were some

services which were not available in any other operator but in Reliance.

4. Data Platform targets only a few segments with Entertainment VAS as its priority and

other services of VAS were less in number.

5. The look, feel and navigation through the content were almost similar with its major

competitors like Vodafone & Airtel.

6. VAS promotions majorly rely upon its Promotional Messages which are sent through

SMS Blast. Other means of promotions be it BTL or ATL are very low. Events take a

handy place for promoting VAS in the city.

7. Contactibility is one of the major areas of concern to push VAS through SMS blast.

Many MDN’s from the customer base return negative contactibility. The contactibility is

of about only 40% of the total customer base that is used for tele-calling/OBD.

Conversion rate being high helps increasing the subscriber base but contactibility being

low decreases the number of people that can be converted into potential subscriber.

8. A visit to INDIA CALLING, which is the Reliance approved tele-calling agency, threw

light upon the current scenario of work flow being followed by them. There are

approximately 20-25 tele-calling agents for VAS subscription. Every agent is given a

customer base of around 200 MDN’s. it was found that almost half of the NDN’s turn

negative contactibility, and most of the man-hour is wasted by making several attempts to

same set of MDN’s.

9. It was found during Up-selling VAS through retail network that most of the Reliance

Mobile Stores (RMS) is not well informed regarding ongoing schemes of VAS. The

information flow from the HO to its retailers is not made very clear by the Zonal Sales

Executives (ZSE), because of which the information is not transferred to Reliance

customers.



10. Most of the RMS’s do not push VAS in the market as they don’t have proper

understanding about VAS products and services.

11. Most of the retailers have a total footfall of 100-150 customers per day but they don’t

push any of Value Added Service to them. 15 out of 25 retailers are aware of only few

major services of VAS like CRBT, MCA & GPRS.

12. 25 out of 25 retailers say that only 1-10 customers come per day to subscribe to any of

the value added services.

13. Retailers agree to push VAS if given incentives of around 15-20%.

14. Awareness amongst retailers is very low regarding Value Added Services.

15. The level of awareness amongst customers was found significant across different age

groups. The most aware segment being of age 25-35 years as compared to other age

groups.

16. More than 50% of customers spend greater than Rs. 500 on their monthly bill, and only 6

out of 125 customers spend more than 100 rupees on Value Added services.

17. A two variable chi-square test of independence revealed that there is significant

difference in the level of awareness of users for age as criterion.

18. The variables were grouped with the factors using data reduction technique factor

analysis.

Factor Variables

VAS Usage • Services are worth its charges

• Services are useful

• Variety of services

• Already using these services

• Using mobile internet

• Using CRBT

VAS Awareness Not aware of all kinds of services

Substitute Awareness Aware of these services in other operators

Table 11.1: Factors & Variables after data reduction



19. The relative importance of the factors was found out using non parametric tests. The most

important factors were identified as using CRBT; services are worth its charges, not

aware of all the services, aware of these services in other operators.

20. The 3rd factor which explains the substitute awareness is the major area of concern for the

company. This is because of low awareness amongst reliance users due to less mass

promotional activity for Value Added Services like advertisement campaigns.



12. CONCLUSION

Mobile VAS industry in India is undergoing a lot of structural changes. Mobile VAS industry is

poised to grow and contribute greater revenues to the telecom industry. Currently, the MVAS

market is fragmented and consists of a large number of small content providers. Consolidation of

MVAS market will happen, leading to emergence of few strong content providers. This would

enable content providers to command greater share of revenue in the MVAS ecosystem.

Being a strong revenue addition source, operators must engage themselves more into these

services as price war is gaining its strength over calling tariffs. Promotional strategies should be

devised to tap new segments and hold the customer from churning out.

MVAS market in India is largely dominated by urban population, with rural constituting around

15% of the total market. Rural MVAS market would witness marginal growth and would grow to

around 20% in the next couple of years (source: IMAI Report). The growth drivers would be

availability of vernacular content, entertainment services and voice based services.

The pricing strategy of the content is almost similar across all the services making no impact as

far as the importance and integrity of the service is concerned. Further, in an attempt to cater to

the expanding mobile subscribers in India, the telecom operators should price the content in a

manner suitable to the target respondent.

Mobile number portability will hit the industry. As far as the Government of India is concerned,

it is planning to launch number portability in the metros by March 2009 and in all the remaining

circles by September 2009. This would enable users to change service providers while retaining

the mobile number. Number portability is expected to have an interesting impact on the MVAS

industry. Currently, MVAS services are not a key decision making parameter while purchasing

the mobile phone connection. Therefore, with the introduction of number portability, operators

are expected to focus their energy and investment in providing better voice services. But once the

voice services (network, billing, etc.) cease to become a differentiating factor, the operators will

focus more on MVAS to differentiate themselves and hold on to their customers. This is

expected to give a boost to the MVAS industry.



Increasing the Knowledge and Awareness for various Value Added Services is a major concern

for telecom operators. Even if the knowledge is there, the content is not available easily or the

available content lacks technical integration. This is the major reason for the customer to churn

out of the service. This creates a mindset of not using the service again after so much of an effort

from the company to pursue the target customer to initiate a trial.

The study suggests that Value Added services is limited to a few niche groups, may be people

younger in age than people who have crossed 40 years of their age. The top reasons for this

variation in awareness and usage are because of high content targeted towards that particular age

segment like Entertainment Vas, than content which is useful for other age segments. The

variables can be grouped into four factors which drive VAS are:

a) The operator-pricing decisions and aggressive promotions

b) Awareness among masses.

c) The mobile market-market structure, price sensitivity etc.

d) The society-cultural and non-rational factors

Value Added Services is the child of aggressive competition in cellular Industry in India. The

impact of these services is not one-\directional, however it will typically erode and redistribute

revenues from dominant players towards followers and new entrants for example Aircel

&Vodafone.

The challenges faced by the Reliance Communication Ltd in the current scenario are:

1. To address customer retention in VAS market.

2. To address to lack of awareness and knowledge regarding VAS.

3. To develop VAS as the major revenue stream under ongoing Tariff war within the

telecom industry.

Armed with these insights, organization can develop marketing strategies that are better aligned

to their target customers. The phenomenon should be seen as a growth opportunity as the

analysis shows that there is huge scope of growth for VAS. The more tailored and personalized

the experience that Reliance Communication creates for their customers, the greater the

differentiation from their competitors and ultimately, the greater will be the success.



13. RECOMMENDATIONS

1. Recommendation for Data platform More content should be added to attract users, like:

A separate link “App. Central” For all the applications, launched a few months back by the name application store to enhance user time spend with greater variety of applications.

Games To attract the niche segment. More of like a games Club like in Vodafone and Airtel. IBIBO games and Facebook applications.

Mobile Internet Direct links like Gmail, Rediff, MSN, Google etc.

Chat central Gtalk, messenger etc. Lovers point Love quotes, messages, poetry etc. Education plus Guide for preparation of major competitive

examinations like GRE, GMAT, and TOEFL. Word Meaning Alert etc.

About Delhi University Again focusing the niche segment providing information about the university, last year cut off list, major colleges under university, contact details, etc.

Table 13.1: Recommendation for Data platform



2. Recommendation regarding VAS promotion

Fig: 13.1: Strategy for Creating Awareness

Create a brand for R-World which is the Data platform: “R-World, a world within……anything and

everything”.

3. Promotional Messages

• Match the Message to the Customer: The more we are able to define our various buyer

personas, the more we will be able to communicate a tightly focused and powerful message

that is relevant to a particular customer. For promotional messages, various services targeting

the niche segment should be promoted.

• Some promotion for Post-Paid Customers: Paying bills through phone can be conveyed along

other services.

4. OBD (Out Bound Dialing)

At present 25 Tele-calling agents working in INDIA Calling for reliance VAS promotion.

calls per day 220

approx. time on phone

per call

30

seconds

60

seconds

Total time in seconds 6600 13200

total time in hours per

day

1.83 3.67

Table 13.2: OBD/Tele-Calling calculation

Advertisement

Convey Benefits

Educate customers

Create Awareness



Contactibility at present: approx. 30 %

Conversion Rate: approx. 67-70 %

• Need to look into their operation; more calls can be made per day, utilizing man-hours more

efficiently. Company spends lacs of rupees every month on INDIA CALLING, targets should be set

for them and as the conversion rate is around 70% so more calls can increase contactibility and

hence increase more conversions.

• As per the current scenario, a customer base on the basis of current balance is only used, which

is not 100% contactable customer base. MOU base should be provided to improve contactibility,

as it defines the customer who uses their mobile phone for outgoing and incoming calls thus

describing their Minutes of Usage.

5. Retail Network Integration

The need of the hour is to bring in more aggressiveness to sell Value Added Service. Targets should be

set for all RMS’s to sell VAS.

For example:

TARGETS FOR RMS'S

Service Subscriptions Amount/

subscription

Revenue

generated

130 RMS's

CRBT 100 30 3000 390000

MCA 100 15 1500 195000

Total 585000

Table 13.3: Target set example for RMS’s

6. VAS Awareness: More Awareness need to be spread amongst customers as well as retailers. Knowledge regarding benefits and usage should be spread to masses.

7. Mass communication: Regarding Value Added Services through ad campaigns, events and

concerts, Billboards etc.



8. Growth of M-commerce market: M-commerce has tremendous growth opportunity in India. High penetration of mobile phones would give a boost to this industry. The stakeholders need to work in tandem to ensure that issues like low awareness, security constraints, user friendliness and pricing of the services are aligned towards the consumers. The services that would provide boost to the m-commerce market in India are mobile marketing, mobile banking and mobile payment. A major step has been taken by RBI in issuing the mBanking guidelines.

9. Rural MVAS market: MVAS market in India is largely dominated by urban population,

with rural constituting around 15% of the total market. Rural MVAS market would witness marginal growth and would grow to around 20% in the next couple of years. The growth drivers would be availability of vernacular content, entertainment services and voice based services.

10. Location based Services: Location Based Services are capable of providing information to

the users based on their location. This would help the service providers provide relevant and timely information to the consumers as per their requirements. As the information available on GPS would increase, it would help the consumers to use location based services to their benefit. Local based services can be used for better management of sales force and transport department services.

11. Mobile Marketing: While using traditional media of marketing such as print, television, etc,

the marketers are not sure whether the consumer would take notice of the promotional campaign or not, the main advantage of mobile marketing is that since the marketing message is delivered on the mobile phone, a personal device, and the target respondent ends up taking notice of the campaign.



14. REFERENCES

• www.rcom.co.in • gm.relianceada.com

• myworld.relianceada.com • http://www.indiaonestop.com/fdi-telecom.htm

• http://www.trai.gov.in/Default.asp

• http://www.rcom.co.in/webapp/Communications/rcom/index.jsp

• http://trak.in/Tags/Business/category/telecommunication/

• Mobile Value Added Services in India: A report by IAMAI & e-Technology group @

IMRB

• Presentation and documents from Reliance Communications Ltd.

• Telecom sector in India: Vision 2020, Background paper, Department of Telecommunications, Ministry of Communications & IT, Government of India

• RNCOS, May 2008, “Indian Telecom Analysis (2008-2012)” (www.researchandmarkets.com)

• Impact of Increased Competition on Mobile Service Industry: (www.icra.in)

• Mobile Value Added Services in INDIA: (A Report by IAMAI & eTechnology group @ IMRB)

• Mobile Youth. (2008). mobile Youth® 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).

• CELLULAR OPERATOR ASSOSIATION OF INDIA.2009.ARPU & Revenue report. ( Chairman: Asim Ghosh).New Delhi

• INDIAN ASSOCIATON OF MOBILE AND INTERNET(IMAI),Mobile VAS in India.2008[online] Available from: http://www.iamai.in/Upload/Research/mobilevasinindia_25.pdf[Accessed 5 May, 2010]



• 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).

• TELECOM REGULATORY AUTHORITY OF INDIA. Performance Indicator Report(Chairman:J.S. Sharma).New Delhi: The Government of India

• MALHOTRA N.P, 2008. Marketing Research-An Applied Orientation Fourth Edition. New Delhi: Pearson Education

• Marketing Management by Kotler, Keller, Kiroshy & Jha.



15. ANNEXURES

A-1

Promotional Messages

FREE MEIN APNA BHAVISHYA JANIYE, HOLI offer sirf aapke liye. Aaiye Reliance World, bunglow rd, Kamla Nagar. 27-28 Feb. TnC apply RELIANCE FREE GIFTS LE JAAYEIN is HOLI par. Visit Reliance World Vasant Vihar, opp. Priya Cinema. 27-28 Feb. TnC apply RELIANCE

FREE GIFTS LE JAAYEIN is HOLI par. Visit Reliance World NFC (Local shopping center), behind Crown Plaza 27-28 Feb. TnC apply RELIANCE FREE CALLER TUNE:AAJ har rechrg par paaye FREE caller tune 7 din tak.No Subscription fee!Tune charge:Rs10.Auto-renewal 7 din baad.Reliance

VAS - Up selling Report

Laxmi Communications,

JAMRUDPUR, GK1

Met the head manager

Time: 11:30 AM Date: 4 March’10

• They are aware of this VAS activity • They attach the VAS enrollment form along with each new connection bought. • They didn’t receive the tracker. • They don’t push for sales, but just attach the form along the new connection form.



Eagle Radios

KALKAJI A-2

Met the head manager

Time: 11:30 AM Date: 5 March’10

They are aware of VAS. They complained about low promotional activity of Reliance for its VAS products/services. They say customers really don’t feel to use R-world, they fear of getting charged for even browsing. Customers are not aware of VAS due to low advertisements of VAS products/services.

• They are aware of this VAS activity • They are aware of the tracker • They attach the VAS enrollment form along with each new connection bought. • They don’t push for sales as they say, customers are not aware enough. • They complained about low advertisements regarding R-world Applications.

Sanjay Chowdhary

CR PARK

Time: 1:00 pm Date: 5 March’10

Met their sales people, they complained about the VAS selling. They said that customers come daily to get their subscription deactivated which itself gets activated when they buy a new connection.

• They are aware of this VAS activity • They are aware of the tracker • They attach the VAS enrollment form along with each new connection bought. • They don’t push for sales; only attach the VAS enrollment form along the new connection form. • They say, customers don’t want and hence they don’t even push for VAS sales.

B.S. Telecommunications

SANT NAGAR

Time: 2:30 PM Date: 4 March’10. Met their sales people, who said nobody wants to spend money for all these packs. They face customers everyday who complains about these services getting activated by themselves.

• They are aware of this VAS enrollment form • They are aware of the tracker • They don’t push for sales but add the form along the new connection form as just another formality. • They had bad feedback of customers regarding the sales of VAS products/services.



• They complained about low advertisements, which is the major concern to spread the knowledge regarding VAS to customers.

A3

ADBG Enterprises

CENTRAL MARKET, Lajpat Nagar

Time: 2:30 PM Date: 5 March’10

Met the staff

• Aware of VAS enrollment form • Don’t push for sales • Just add the VAS enrollment form along the new connection form as just another formality • They are aware of the tracker

Royal Tele Systems

MALVIYA NAGAR


Met the owner and the staff

• Aware of VAS enrolment form • Are not aware of the incentives • Have received the tracker • Not informed about the incentive plan by the ZSE • Don’t push for sales as they don’t take it much seriously, because they were never informed

regarding the incentives that they will get out of this.

Laxmi Narayan Tele Mart

SAKET


Met the owner and the staff

• Aware of VAS enrolment form • Are not aware of the incentives • Have received the tracker • Not informed about the incentive plan by the ZSE



Don’t push for sales as they don’t take it much seriously, because they were never informed regarding the incentives that they will get out of this, and also complained about the popularity of VAS amongst the customers because of low promotional activities like advertisements.

A4 VAT consultants Pvt Ltd.

L-7 OUTER CIRCLE, CP


Met the staff

• Aware of VAS enrolment form • Are not aware of the incentives for the month of March. • No idea about the tracker. • Not good communication from their ZSE.

AVM Enterprises TAGORE MARKET, KIRTI NAGAR Time: 4:30 PM Date: 9 March’10 Met the staff

• Aware of VAS enrolment form • Aware of the incentive scheme • They had the tracker, but had no idea what was it for • Don’t push much for sales; just attach the VAS form with CAF as a formality.

World Vision Network SHANKAR ROAD MARKET, RAJENDER NAGAR Time: 5:30 PM Date: 9 March’10 Met the staff

• Aware of VAS enrolment form • Aware of the incentive scheme • They had the tracker, but had no idea for what it was • Attach the VAS enrolment form along CAF as just another formality • Try to push for sales, but no subscription as of yet



A5

Questionnaire for Retailers

Dear Retailer, please fill in the following form and help us improve our service.

Please TICK the appropriate choice

Q1. What is the total foot fall of your store per day?

1. 10-50 2. 50-75 3. 75-100 4. 100-150 5. >150

Q2. How many of them are reliance customers?

1. 10% 2. 20% 3. 30% 4. 30-40% 5. >40%

Q3. I completely know about VAS?

1. Strongly Disagree 2. Disagree 3. Neutral 4. Agree 5. Strongly Agree

Q4. I am fully aware of MAJOR services under VAS? (which one…CRBT, MCA, etc…)


Q5. How many people come inquiring for VAS products?

1. 1-10 2. 11-20 3. 21-30 4. 31-40 5. >50

Q6. People usually come for particular VAS product activation like CRBT, MCA, Cricket, News

etc? (Specific service and approx number)


Q7. For which VAS service do people majorly come here?

1. CRBT 2. MCA 3. Cricket 4. GPRS 5. other (mention)

Q8. If people come for any VAS activation, I push for other services too?


Q9. Customers find it easy to activate VAS?


Q10. I will promote VAS if given incentives?




Q11. How much incentive do you expect to push VAS?

1. 5% ` 2. 10% 3. 15% 4. 15 %-20% 5. >20%

Questionnaire for Customers

Dear Customer, please fill in the following form and help us improve our service. We will be glad to serve you better in every possible way.

Please fill in your details and TICK the appropriate choice

Name:

Age:

1. 18-25 2. 25-35 3. 35-40 4. 40-50 5. >50

Gender: 1. Male 2. Female

Monthly family income:

1. 20,000 - 30,000 2. 30,000 - 40,000 3. 40,000 - 50,000

4. 50,000 - 60.000 5. 60,000 above

Occupation:

1. Self-employed 2. Service 3. Student 4. House Wife 5. Other

Network: 1. CDMA 2. GSM

Subscriber Type: 1. Prepaid 2. Postpaid

Monthly Bill : 1. <150 2. 150-250 3. 250-350 4. 350-500 5. >500

Monthly VAS expenditure: 1. None 2. <50 3. 50-100 4. >100



A6

Please tick the appropriate choice

Q1. I am aware of value added services.


Q2. These services are worth its charges.


Q3. These services are useful for me.


Q4. There is variety of services according to my needs.


Q5. I am already using these services.


Q6. I will soon subscribe to one of the services.


Q7. I am not aware of all the kind of services.


Q8. My pocket does not allow me to subscribe to any of these services.




A7

Q9. I am aware of these services in Vodafone / Airtel / Idea / Aircel


Q10. I often use my mobile phone for browsing internet.


Q11. Internet through mobile is very convenient.


Q12. I enjoy caller ring back tones/hello tunes on my phone.




16. GLOSSARY

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 CP Content provider FSP Fixed service provider GSM Global system for mobile communication ICRA Indian credit rating agency IVR Interactive voice response MDN Mobile directory number MIS Management information system MNP Mobile number portability MOU Minutes of usage MVAS Mobile Value Added Services OTAF On the air function time SMS Short message service TRAI Telecom regulatory authority of India

USSD Unstructured supplementary services data UNR Usage and revenue VAS Value added services

Term Description 3G 3G refers to third generation of mobile communications systems. It

enhances the services such as multimedia, high speed mobile broadband, internet access with the ability to view video footage on your mobile handset.

4G 4G refers to all IP packet switched networks, mobile ultra-broadband (gigabit speed) access and multi-carrier transmission.

ARPU A commonly used financial benchmark to measure the average revenue generated by a mobile carrier's moble subscriber,or"user'

Boston Group matrix

A means of analyzing and categorizing the performance of business units in large diversified firms by reference to market share and growth rates. It was developed by the Boston Consultancy Group (BCG)

Business Portfolio The business portfolio is the collection of businesses and products that make up the business

Brand loyalty

A strongly motivated and long standing decision to purchase a particular



product or service.

CDMA Code Division multiple access, a technique for multiplexing digital transmission of radio signals in which each voice or data call uses the whole radio band, and is assigned a unique code.

Churn Refers to the tendency of cell-phone subscribers to switch providers.

Competitive advantage

A competitive advantage is a clear performance differential over the competition on factors that are important to customers

Customer Loyalty Feelings or attitudes that incline a customer either to return to accompany, shop or outlet to purchase there again, or else to repurchase a particular product, service or a brand.

First Mover A form of competitive advantage that a company earns by being the first to enter a specific market or industry. Being the first allows a company to acquire superior brand recognition and customer loyalty. The company also has more time to perfect its product or service.

FSP Fixed Service Provider GPS A system of satellite ,computer and receivers that can determine latitude

and longitude of a given receiver(within its system )located on earth GSM Global system of mobile communication. A 2G system of communication. IOT Inter Operator Tariff MNP Mobile number portability (MNP) enables mobile telephone users to retain

their mobile telephone numbers when changing from one mobile network operator to another.

Porter's Five forces Model

An analytical Model developed by Michael E.Porter.The five forces in terms of which the model analyses business and industries are:Buyers,Suppliers,Substitutes,new Entrants and rivals.

Primary research data

Primary research data is data collected specifically for the market research project and obtained directly from the relevant source.

Qualitative research

Research that deals with information too difficult or expensive to quantify, such as subjective opinions and value judgments, typically unearthed during interviews or discussions group.

Quantitative research

Market research that concentrates on statistics and other numerical data, gathered through opinion polls, customer satisfaction surveys and so on.

Random Sampling A sampling method in which all the units in a population have an equal chance of appearing in the sample

Secondary research data

Secondary market data is the data that has been obtained analyses and used for other purposes or for general purposes.

SIM A subscriber identity module (SIM) securely stores the service-subscriber key (IMSI) used to identify a subscriber on mobile telephony devices (such as mobile phones and computers).

VAS Additional service that value to those already available on the network