A PROJECT REPORT

ON DISTRIBUTION EXPANSION AND MARKET

SERVICES

(IN RURAL AREAS OF AMBAH & PORSA) AT

CITYCENTER,G WALIOR

FOR THE PARTIAL FULFILLMENT OF THE AWARD OF MASTER OF BUSINESS ADMINISTRATION

Submitted to: Submitted by- HEAD OF THE DEPARTMENT M.B.A.-III SEM.

(Batch 2008-2010)

IPS College of Technology & ManagementBela Ki Babadi Shivpuri Link Road Gwalior (M P)

ACKNOWLEDGEMENT

A successful research could not be done without any inspiration, guidance and help from different person in the society of modern corporate world.

This project report is the result of collective efforts made by me and my senior staff who give me their full support and valuable time.

First I would like to thank mr. Sudhir Bhadoriya sir, who give us an opportunity to work in the Asian world largest telecom company.

I will also like to thank mr. Jitendra sir who share his valuable experience with us &. also mr. Prakash sir (RSO) under who’s guidance i completed my summer training.

The complition of the project is impossible without the help of these experienced persons

By working under these experienced persons I got an opportunity to learn more and more.

In last I will also like to thanks my friends Ranjit & Achal who support me during my summer training .& also to FOS of the company.

DECLARATION:

I ………….student of M.B.A. III sem from IPS Group of college of TECHNOLOGY & MANAGEMET , Gwalior (M.P.) declare that all the information, facts and figures represented in this report are actually inside on my experience and in the market research in analyzing the “Distribution expansion and market services” with special reference to Bharti Airtel, GWALIOR.

Anil Raythour M.B.A.

Date: / /Place: Gwalior

INDEX:

Topic

• Introduction • Acknowledgement• Declaration• About Sunil bharti mittal ( CEO & Chairman)• Bharati Tele Ventures• Airtel • Airtel’s Enterprise Services • Airtel reach 100 million customer• Objective• Location of low revenue site• Findings• Marketing Strategy in Rural Areas• Suggestions• List of new outlets • Conclusion

ABOUT SUNIL BHARATI MITTAL

Chairman and Managing Director of Bharti Group, India's largest GSM-based mobile phone service provider.

Sunil Mittal can be called as originator of cellular phone revolution in India. He is the founder, Chairman and Managing Director of Bharti Group and runs India's largest GSM-based mobile phone service.

Sunil Bharti Mittal's father was an M.P. Sunil did not followed his father's footsteps. After graduating from Punjab University in 1970s, he set up a small bicycle business in Ludhiana in partnership with his friend. By

1979, Sunil Mittal realized that his ambitions could not be fulfilled in Ludhiana, so he moved out to Mumbai from Ludhiana.

He spent a few years in Mumbai and in 1982, Sunil Mittal started a full-fledged business selling portable generators imported from Japan. This gave him a chance to acquaint himself with the nitty-gritty's of marketing and advertising. His business was running smoothly but later on the government banned the import of generators as two Indian companies were awarded licenses to manufacture generators locally.

In 1986, Sunil Bharti Mittal incorporated Bharti Telecom Limited (BTL) and entered into a technical tie up with Siemens AG of Germany for manufacture of electronic push button phones. Gradually he expanded his business and by early 1990s, Sunil Mittal was making fax machines, cordless phones and other telecom gear.

In 1992, when the Indian government was awarding licenses for mobile phone services for the first time, Sunil Mittal clinched Delhi cellular license in collaboration with French telecom group Vivendi. In 1995, Sunil Mittal founded Bharti Cellular Limited (BCL) to offer cellular services under the brand name AirTel. Soon, Bharti became the first telecom company to cross the 2-million mobile subscriber mark. Bharti Cellular Limited also rolled out India's first private national as well as international long-distance service under the brand name IndiaOne. In 2001, BCL entered into a joint venture with Singapore Telecom

International for a $650-million submarine cable project, India's first ever undersea cable link connecting Chennai in India and Singapore.

Today, Sunil Mittal runs a successful empire with a market capitalization of approximately $ 2 billion and employing over 5,000 people. He has been honored with several awards. Sunil Bharti Mittal was chosen as one of the top entrepreneurs in the world for the year 2000 and amongst 'Stars Of Asia', by 'Business Week'. He also received IT Man of the Year Award 2002 from Dataquest and CEO Of the Year, 2002 Award (World HRD Congress).

BHARATI TELE- VENTURES

Bharti Airtel formerly known as Bharti Tele-Ventures LTD (BTVL) is the largest cellular service provider in India, with more than 124 million subscribtions as of February 2010. With this, Bharti is now the world's third-largest, single-country mobile operator and sixth-largest integrated telecom operator. It also offers fixed line services and broadband services. It offers its TELECOM services under the Airtel brand and is headed by Sunil Bharti Mittal. The company also provides telephone services and broadband Internet access (DSL) in top 95 cities in India. It also acts as a carrier for national and international long distance communication services. The company has a submarine cable landing station at Chennai, which connects the submarine cable connecting Chennai and Singapore.

It is known for being the first mobile phone company in the world to outsource everything except marketing and sales.

Its network operations are provided by Ericsson, business support by IBM and transmission towers by another company. Ericsson agreed for the first time, to be paid by the minute for installation and maintenance of their equipment rather than being paid up front. This enables the company to provide pan-India phone call rates of Rs. 1/minute (U$0.02/minute).

The businesses at Bharti Airtel have always been structured into three individual strategic business units (SBU's) - Mobile Services, Airtel Telemedia Services & Enterprise Services. The mobile business provides mobile & fixed wireless services using GSM technology across 23 telecom circles while the Airtel Telemedia Services business offers broadband & telephone services in 95 cities and has recently launched a Direct-to-Home (DTH) service, Airtel Digital TV. Shahrukh Khan is the brand embassador of the mobile company and Kareena Kapoor and Saif Ali Khan are the brand embassadors of the DTH company. The company provides end-to-end data and enterprise services to the corporate customers through its nationwide fiber optic backbone, last mile connectivity in fixed-line and mobile circles, VSATs, ISP and international bandwidth access through the gateways and landing station.

VISION:

• BY 2010 AIRTEL WILL BE THE MOST ADMIRED BRAND IN INDIA

• LOVED BY MORE CUSTOMERS.

• TARGETED BY TOP TALENT.

• BENCHMARKED BY MORE BUSINESS.

AIRTEL

Airtel comes to you from Bharti Tele-Ventures Limited - a part of the biggest private integrated telecom conglomerate, Bharti Enterprises. A consortium of giants in the telecommunication business. In it's six years of pursuit of greater customer satisfaction, AirTel has redefined the business through marketing innovations, continuous technological up gradation of the network, introduction of new generation value added services and the highest standard of customer care.

Bharti is the leading cellular service provider, with an all India footprint covering all 23 telecom circles of the country. It has over 12 million satisfied customers.

Cellular telephony was introduced in India during the early 1990s. At that time, there were only two major private players, Bharti (Airtel) and Essar (Essar) and both these companies offered only post-paid services. Initially, the cellular services market registered limited growth.

Moreover, these services were mostly restricted to the metros. Other factors such as lack of awareness among people, lack of infrastructural facilities, low standard of living, and government regulations were also responsible for the slow growth of cellular phone services in India.

Although the cellular services market in India grew during the late 1990s (as the number of players increased and

tariffs and handset prices came down significantly) the growth was rather marginal. This was because the cellular service providers offered only post-paid cellular services, which were still perceived to be very costly as compared to landline communications.

Following this realization, the major cellular service providers in India, launched pre-paid cellular services in the late 1990s. The main purpose of these services was to target customers from all sections of society (unlike post-paid services, which were targeted only at the premium segment.

Airtel is a brand of telecommunication services in India, Bangladesh and in Sri Lanka owned and operated by Bharti Airtel. It is the largest cellular service provider in India in terms of number of subscribers. Services are offered under the brand name Airtel: Mobile Services (using GSM Technology), Broadband & Telephone Services (Fixed line, Internet Connectivity(DSL) and Leased Line), Long Distance Services and Enterprise Services (Telecommunications Consulting for corporates). It has presence in all 23 circles of the country and covers 71% of the current population (as of Financial Year 2007). Airtel has also launched 16Mb/s broadband plans in India, making it the first ISP to do so.

Airtel is facing a lot of flack from its customers, as people have become dissatisfied with its customer care services. (www.consumercomplaints.in - Indian Consumer Complaints Forum)

Airtel Sri Lanka

In December 2008, Bharti Airtel rolled out third generation services in Sri Lanka in association with Singapore Telecommunications. SingTel is a major player in the 3G space in Asia. It operates third generation networks in several markets across Asia.

Airtel's operation in Sri Lanka, known as Airtel Lanka, commenced operations on the 12th of January 2009.

Airtel in Bangladesh

In January 2010, it was announced that the Bangladesh Telecommuncations Regulatrory Commission (BTRC) of The People's Republic of Bangladesh had given Bharti Airtel the go ahead to acquire a 70% stake in the Bangladesh business of Abu Dhabi based Warid Telcom. The latter had till date invested a total of $600 million, with plans to bring their Bangladesh investments to the $1 billion mark. Airtel's 70% stake in the company is said to be at a cost of an initial $300 million.

Touchtel

Until September 18, 2004, Bharti provided fixed-line telephony and broadband services under the Touchtel brand. Bharti now provides all telecom services including fixed-line services under a common brand "Airtel".

BlackBerry

On 19 October 2004 Airtel announced the launch of a BlackBerry Wireless Solution in India. The launch is a result of a tie-up between Bharti Tele-Ventures Limited and Research In Motion (RIM).

Digital TV

On 9 October 2008, Airtel joined the DTH bandwagon in India with Airtel Digital TV, a Direct-to-Home Television service.

iPhone 3G

The Apple iPhone 3G was rolled out in India on 22 August 2008 via Airtel & Vodafone.

Merger talks

In May 2008, it emerged that Bharti Airtel was exploring the possibility of buying the MTN Group, a South Africa-based telecommunications company with coverage in 21 countries in Africa and the Middle East. The Financial Times reported that Bharti was considering offering US$45 billion for a 100% stake in MTN, which would be the largest overseas acquisition ever by an Indian firm. However, both sides emphasize the tentative nature of the talks, while The Economist magazine noted, "If anything, Bharti would be marrying up," as MTN has more subscribers, higher revenues and broader geographic coverage. However, the talks fell apart as MTN group tried

to reverse the negotiations by making Bharti almost a subsidiary of the new company.

In May 2009, Bharti Airtel again confirmed that it is in Talks with MTN and companies have now agreed discuss the potential transaction exclusively by July 31, 2009. Bharti Airtel said in a statement “Bharti Airtel Ltd is pleased to announce that it has renewed its effort for a significant partnership with MTN Group".

Talks eventually ended without agreement, some sources stating that due to the South African government opposition.

Acquisition Talks

On 14, February 2010 a statement issued exclusively to the Ghana News Agency by Zain Ghana, said "the Board of Directors of Kuwait's Zain Group, after its meeting on February 14, 2010, issued a resolution to accept a proposal received from Bharti Airtel Limited (Bharti) to enter into exclusive discussions until 25 March 2010, regarding the sale of its African unit, Zain Africa BV." The offer was for $10.7 billion.

“This potential transaction does not include Zain’s operations in Morocco and Sudan and remains subject to due diligence, customary regulatory approvals and signing of final transaction documentation,” Bharti said. The deal would provide Bharti access to 15 more countries in the region, adding around 40.1 million subscribers to its already 125 million-plus user base. With Bharti already

having presence in five overseas markets,after the deal, it would increase its global presence across 20 regions. The combined revenue of the two entities would be around $12 billion.

Recently a shareholder of Zain Nigeria, Broad Communications, secured an injunction against the company from managing its subsidiary in that country because Zain was destroying shareholder value. Experts have said the developments in Nigeria could have implications for the Bharti acquisition.

Sponsorship

Bharti Airtel signed a five-year deal with ESPN Star Sports to become the title sponsor of the Champions League Twenty20 cricket tournament. The tournament itself is named "Airtel Champions League Twenty20."

Airtel 3G

Airtel plans to launch the nationwide 3G services in India in the second quarter of 2010.

Bharti’s Mission

To be globally admired for telecom services that delight customers.We will meet global standards for telecom services that delight customers through:

• Customer Service Focus

• Empowered Employees

• Cost Efficiency

• Unified Messaging Solutions

• Innovative products and services

• Error- free service delivery

AIRTEL`S ENTERPRISE SERVICES

The company is structured into four strategic business units - Mobile, Telemedia, Enterprise and Digital TV. The mobile business offers services in India, Sri Lanka and Bangladesh. The Telemedia business provides broadband, IPTV and telephone services in 94 Indian cities. The Digital TV business provides Direct-to-Home TV services across India. The Enterprise business provides end-to-end telecom solutions to corporate customers and national and international long distance services to telcos.

Bharti Airtel offers GSM mobile services in all the 23-telecom circles of India and is the largest mobile service provider in the country, based on the number of customers.

The group offers high speed broadband internet with a best in class network. With Landline services in 94 cities we help you stay in touch with your friends & family and the

world. Get world class entertainment with India’s best direct to home (DTH) service digital TV in more than 150 cities

Enterprise Services provides a broad portfolio of services to large Enterprise and Carrier customers. This division comprises of the Carrier and Corporate business unit. Enterprise Services is regarded as the trusted communications partner to India's leading organizations, helping them to meet the challenges of growth.

Discover the magical experience of digital enterainment with Airtel. From DVD quality picture and sound,the best and widest variety of channels and programmes to the best on-demand content on Airtel Live, your tv viewing

experience change forever with digital TV from Airtel!

Bharti Airtel crosses 100 million customers mark

New Delhi, May 15, 2009: Bharti Airtel, Asia’s leading Integrated Telecom services provider, today announced that it has crossed the 100 million customers mark. This milestone makes the company the 3rd largest single country mobile services operator and sixth largest in-country integrated telecom operator in the world.

Bharti Airtel is structured into three strategic business units - Mobile services, Telemedia services and Enterprise services. The mobile business offers services in India and Sri Lanka. The Telemedia business provides broadband and telephone services in 95 cities, DTH services and has recently forayed into the IPTV services. The Enterprise business provides end-to-end telecom solutions to corporate customers and national and international long distance services to carriers. All these services are provided under the Airtel brand. Airtel’s high-speed optic fibre network currently spans over 101,337 Rkms covering all the major cities in the country. The company has two international landing stations in Chennai that connects two submarine cable systems - i2i to Singapore and SEA-ME-WE-4 to Europe.

OBJECTIVE:

The objective of my project report is to study the reasons of distribution gap in rural areas and effectiveness of distribution channel in rural areas of Ambah & Porsa.under this project following points are covered.

• Find out the reasons of less number of outlet in rural areas.

• Convince the people about airtel schemes and services.

• To open new outlets where number of outlets are less than five.

• Study the problems of rural retailers.• Convince the rural retailers to provide airtel services

who does not provide airtel services.

LOCATION OF LOW REVENUE SITE:

Following are the low revenue areas. In these areas number of retailers are less than five. This is the main reason of low revenue from these site.list of low revenue areas are following.

SITE ID

TEHSIL VILLAGE DISTRIBUTER

mp5951 Porsa Shyampur kalan

Prakrati telecom thara

Mp5952 Porsa Dharamgarh Shyam oil mill porsaMp4726 Ambah Thara Prakrati telecom tharaMp5941 Ambah Bareh Sunil enterprises

ambahMp5948 Ambah Kirranch Shyam oil mill porsaMp5953 Porsa Raipur Parmar kirana rajudhaMp2234 Porsa Mahua Prakrati telecom tharaMp2238 Ambah Esah Tomar telecom dimniMp2253 Ambah Roophati Prakrati telecom tharaMp2250 Porsa Kontharkalan Parmar kirana

rajaudhaMp2233 Porsa Useth Prakrati telecom tharaMp2423 Porsa Kichol Parmar kirana

rajaudhaMp3582 Porsa Harahar ka

puraShyam oil mill porsa

Mp1444 Porsa Kasmada Prakrati telecom thara

FINDINGS

• People in rural areas are not aware about new schemes launched by distributor and company.

• Numbers of retailers are very less in these villages. • Rural distributor set target to retailers.if retailer

doesnot sell five sim in a month then distributor does not provide balance on lapoo sim.

• Rural distributor doesnot go regularly in villages to provide balance and other services.

• Rural distributor does not provide less than 500 Rs recharge on lapoo sim.

• People buy small recharge voucher card in villages rather than e recharge. so shopkeeper in villages sell recharge card while these shopkeepers arenot retailer of airtel.

• Shopkeepers sell the recharge voucher of Rs.10,25,50 for Rs 11,26,52 respectively .it means they earn more than 10% on each card sell.while in e recharge they earn only 2.5%. so shokeepers arenot interested to become retailer.

• Retailers in rural areas donot submit sim document in time. So company stop services on sim so people do not buy sim from rural retailers.

• Retailers in villages not provide latest scheme to customer.

• Retailers and customers are not satisfied with network (signal problem).

• We can hardly found posters and glow signboard of airtel at rural retailer’s shop in rural areas.

• Due to less advertisement of schemes in villages the retailers and customers’ do not get aware of the new scheme of airtel on time.

• Distributors of airtel donot provide any discount to the retailers on purchase.

• Two or more rural distributors are working in same areas.

• Mostly retailers of rural areas are not well educated so they find difficulty in e recharge.

• There are more demands of “life time plan” but due to congestion in the network, customers of rural areas do not want to buy it.

• Retailers do not get the claim on time.• Retailers donot receive posters,pemplets,signboard

and other accessories related with new schemes on time.

• Rural distributor does not collect documents and other papers on time from retailers.

• Distributors provide the balance and recharge voucher to retailers only on cash payment while distributor of urban areas provide credit facility to retailers.

• Another relevation was that customer seemed very peeved with the amounts they had to pay for local and STD calls.

One of the biggest problem in rural areas is low ARPU.people are not investing money on mobile

Marketing strategy in Rural area:

In the rural area we face mainly 3 types of customers:

• Customers who don’t know anything about product….

These are the customers who are willing to buy product or services but they are unknown to them. Although there is a less percentage of this kind. To attract these customers the role of outlet store or R.D. is crucial because they will buy what they get from shop.

• Aware customers….This category holds the huge percentage. They are not bised with product and firstly gather knowledge about all available products and services and then take decision.

• Customers showing extra knowledge.....This is the most difficult category to face. These peoples have their own perception and they are bised towards the product or services. It is difficult to change there mentality some times. So in case of rural customer the role and responsibilities of the outlets is different. Some times old relations and the popularity of the seller also plays role. The point is this ‘Outlets are the businessmen they want to earn money, so they will sell which give them more income. In rural areas the customer is almost neutral and depend to the outlet,

so providing extra benefit to them will work in increasing subscriber base.’ The second category which interfere during selling product or serviceis old customers. These are the free advertiser of the company, Before selling the product or service their opinion is taken by the seller so satisfaction of old customers is essential.

Suggestions:

• First of all Airtel must improve the efficiency of the

network to cater the customer base in rural areas.• Airtel and its Distributors should advertise the running

schemes in villages.• Airtel should properly provide the promotional

material and other accessories to the retailers on time.• Airtel should focus on providing the attractive and

competitive tariff plans.• Retailers’ helpline no. should be improved more so

that retailers can take the advantage of it. • Distributors should provide discount and to the

retailers on the bulk purchase so that retailers can be motivated to sell.

There should not be area conflict among the distributors.• Enhance the relationship between Retailers &

Distributor in area to gain the retailers confidence.• Distributors should take care that the field boys cover

all shops (including newshops) in the market.1.As every company is eying towards the rural subscribers competition is increasing constantly. The only way to cross this is to ensure more reliability and faith in company brand. This can be done by several ways -• To make the brand more reliable and to raise faith on brand company can go for CSR (Corporate Social Responsibility). As building Bus Stops, by supplying water

tanks (Water is the biggest problem in rural areas in summers), by opening Pyaus, give signboard near the schools etc.• Plantation is a good idea as this will help protecting environment and a level on tree guard is the effective advertisement of the company. This type of plantationcan also be done in villages connecting roads.2. Low awareness about new product and service is the most difficult problem in rural areas. People have no knowledge about the new schemes. To make it known to every one some steps can be taken –• Make sure that the R.D.s are trying to show the information on the display boards. (A display board can be given to every R.D. and big outlets so that they can write“AAJ KA OFFER”. Company is doing work in this direction but in ground level idea is not working because they are not made aware about the benefits of it.)• There is a mentality of rural subscriber that the person who can repair there mobile phones is the best for getting recharges. Company can invite this kind of mechanics for training sessions. This will help to increase customers in rural market.• Any scheme given to the retailers is made available to them in no time so some times they are unable to be beneficial. If they will make known one day before theyget advantage.3. This is bigger problem in the rural area because due to shortage of electricity rural population can not attracted by electronic advertisement, so to attract the rural populationstrong advertisement is strongly needed.

• Advertising is strongly needed in rural areas because in rural area “Jo Dikhta Hai Wo Bikta Hai” mentality is still working. (This thing is come in front of me in case ofFMCG products. Shopkeepers told me that several time they face the problem as ‘Mughe Amitabh Bachchan wala tel chahia’, ‘mughe Salman ki undergarments chahia’ etc.)• Electronic advertising will not work here because of electricity problem, so advertising via Banners, Posters, CSR, Advertisement on buses,walls will work here because they are appear to them every time.• Advertisement through buses will work. Company can paint it’s logo on buses and In other traveling means.4. To attract the customers for landline connections following points can be useful• Make it cheaper to the customers ( For a P.C.O. connection customer has to invest a minimum of 1700 Rs., Company can provide different plans to make it cheaper and can also expend it’s business to personal connections.)• Attract customer by internet connections (Now a days computers are available everywhere it will be a good idea to provide the high speed internet connections, this is useful in cities and tehseel places.)• Good networking facilities are essential• Company can offer free or low cost internet facility to the schools.5. One of the biggest problem in the rural area is Low ARPU (Low Average Revenue Per User) . People are not investing money on mobile. Here some points are lighten towards the problem –

• Low call rates can be offered.• Different value vouchers can be used.• SMS packs can be given to the customers as per requirement.

LIST OF NEW RETAILERS

Opening of New Outlets

Areas Covered: Mahua,Shyampurkalan,Dharamgarh,Thara,Bareh,Kirrayanch,Raipur,Esah,Roophati,Kontharkalan,Useth,Kichol,Harihar ka pura,Kasmada,Rached,Samsukh ka pura,Rajaudha

NAME VILLAGE MOBILE NUMBER

Pappu telecom Mahua 9993369314Suresh kirana Mahua 9993368946Radhe telecom Mahua 9630778776Brajmohan telecom

Mahua 9630315973

Sonu telecom Thara 9993369586Manoj telecom Thara 9752823440Kuldeep telecom Thara 9630778886Bhagwati telecom Useth 9981757348Ramlal kirana Useth 9981757194Mukesh telecom Useth 9752850235Prashant telecom Kasmada 9981757180Ajay kirana Kasmada 9993369162Ravi telecom Kasmada 9977124847Gaurav telecom Roophati 9981757144Bhadoriya kirana Bareh 9993275005Bhanu telecom Bareh 9993273302Bhadoriya telecom rached 9981704131Tomar telecom Rached 9893077791s.r. telecom Samsukh ka pura 9981704127Arabi singh Samsukh ka pura 9893012964Sunil enterprises Esah 9752408042

Anand kirana Esah 9993274931Sonu enterprises Esah 9993369586Parmar kirana Rajaudha 9981675766Shreya telecom Rajaudha 9993276281Sompal kirana Chand ka pura 9179110797Sharma std Shyampur kalan 9630778854Sunil telecom kichol 9993276416Maa telecom Kichol 9752823414Anil kirana Harihar ka pura 9993573986Harish telecom Harihar ka pura 9993573681Dilip jain Ranpur 9752408278Anni telecom kuthiana 9179110478Shambhu kirana Barbai 9981983691Hariom telecom Raipur 9179110619Prakash kirana kirrayanch 9893048329Manish kirana Dharmgarh 9893549681Jitendra telecom kontharkalan 9893049687Shyam kirana Shyampur kalan 9752394956

Conclusion:

Over two thirds of India's population live in rural surroundings and in these telecoms have not really made their presence felt to any real extent. Airtel is targeting the rural areas. Companies driving technology into this sector of the market the effect is likely to be a boom in telecoms demand. It is probable in these rural areas that cheap call rates will link with state-of-the-art technology to boost teledensity and offer more freedom.