FINAL Project EDit Copy

8/8/2019 FINAL Project EDit Copy

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Contents

1. INTRODUCTION ................................ ................................ ................................ ............................. 3

2. TELECOM SECTOR IN INDIA ................................ ................................ ................................ ............ 5

2.1 CDMA ................................ ................................ ................................ ................................ ...... 9

2.2 GSM ................................ ................................ ................................ ................................ ....... 10

3. TELECOM OPERATORS IN INDIA ................................ ................................ ................................ ... 12

3.1 POST-PAID CELLULAR SERVICES ................................ ................................ .............................. 12

3.2 PRE-PAID CELLULAR SERVICES ................................ ................................ ................................ 12

4. PRE-PAID MARKET ................................ ................................ ................................ ....................... 13

4.1. MARKET SIZE AND THE SHARE OF PRE-PAID SERVICE USERS ................................ ............. ..... 14

4.2 ARPU OF PRE-PAID CUSTOMERS................................ ................................ ............................. 15

5. ADVANTAGES AND DISADVANTAGES OF PRE-PAID CUSTOMERS ................................ .................. 16

6. CONSUMER BUYING BEHAVIOR ................................ ................................ ................................ ... 18

6.1 IMPORTANCE OF CONSUMER BUYING BEHAVIOUR ................................ ................................ 19

6.2 CONSUMER PERCEPTION ................................ ................................ ................................ ....... 20

6.3 CONSUMER ATTITUDE................................ ................................ ................................ ............ 22

6.4 WHY CONSUMERS PERCEPTION IS IMPORTANT FOR TELECOM SERVICE PROVIDERS? ........... 23

7. CRM IN THE TELECOM SECTOR................................ ................................ ................................ ..... 24

7.1 CRM ................................ ................................ ................................ ................................ ....... 26

7.2 DETERMINANTS OF CRM ................................ ................................ ................................ ........ 26

7.3 STAGES OF DEVELOPMENT OF CUSTOMER RELATIONSHIP ................................ ..................... 27

7.4 FUNCTIONS OF CRM ................................ ................................ ................................ ............... 28

7.5 CUSTOMER TOUCH-POINTS- SALES PEOPLE ................................ ................................ ............ 29

7.6 MODELS FOR CRM ................................ ................................ ................................ ................. 30

7.7 MANAGING CUSTOMER RELATIONSHIPS ................................ ................................ ................ 32

7.8 APPLICATION OF CRM IN TELECOM SECTOR ................................ ................................ ........... 34

8. REASONS FOR RETENTION OF A CUSTOMER ................................ ................................ ................ 36

8.1 WITH A PARTICULAR SERVICE (GSM / CDMA) ................................ ................................ ......... 39

8.2 WITH A SERVICE PROVIDER (AIRTEL, IDEA, VODAFONE, etc.) ................................ .................. 39

9. NUMBER PORTABILITY ................................ ................................ ................................ ................. 40

9.1 PROS & CONS ................................ ................................ ................................ ......................... 42

9. 2 BENEFITS FOR CUSTOMERS ................................ ................................ ................................ ... 44

9. 3 BENEFITS FOR THE OPERATORS ................................ ................................ ............................. 45

10. PRE-PAID SCENARIO- EXPECTED CHANGE ................................ ................................ ................... 46


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11. WHAT DO CONSUMERS WANT? ................................ ................................ ................................ . 49

11.1 Research Methodology ................................ ................................ ................................ ........ 49

11. 1. A Need of the study ................................ ................................ ................................ ........ 49

11. 1. B Research objectives ................................ ................................ ................................ ..... 49

11. 1. C Scope of the study ................................ ................................ ................................ ....... 49

11. 1. D Limitations of the study ................................ ................................ ............................... 49

11. 1. E Sources of data collection ................................ ................................ ............................ 49

11. 1. F Sampling procedure ................................ ................................ ................................ ..... 50

11. 1. G Research Design ................................ ................................ ................................ .......... 50

11. 1. H Sample size ................................ ................................ ................................ ................. 50

12. DATA ANALYSIS AND INTERPRETATION ................................ ................................ ...................... 51

12. 1 Factors affecting the pre-purchase decision ................................ ................................ ........ 51

12. 2 Most used service ................................ ................................ ................................ ............... 52

12. 3 Factors important in a cellular service ................................ ................................ ................. 53

12. 4 Customers reasons for choosing the CCSP (Current Cellular Service Provider)..................... 54

12. 5 Level of satisfaction with CCSP ................................ ................................ ............................ 55

12. 6 Understanding consumers perception towards their CCSP................................ .................. 56

12. 7 Contemplation to switch to other CSP ................................ ................................ ................. 59

12. 8 Parameters influencing the switch ................................ ................................ ....................... 60

12. 9 Number portability - reason to switch ................................ ................................ ............... 61

12. 10 Reasons for switching to another CCSP ................................ ................................ .............. 62

13. SUGGESTIONS & RECOMMENDATIONS ................................ ................................ ...................... 63

13. 1 Summary of Analysis ................................ ................................ ................................ ........... 63

13. 2 Suggestions ................................ ................................ ................................ ......................... 64

BIBLIOGRAPHY ................................ ................................ ................................ ................................ . 66

LISTS OF FIGURES & TABLES ................................ ................................ ................................ ............. 67


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emerging as kings in the market, as is the case with any market in a competitive

environment.

The beneficiaries of the competition being consumers, the telecom players in todays

environment are required to design and deploy customer-centric strategies not only to grab

a share in the market but also to sustain in the market in the long-run. The players have

realized the importance of constant service-quality delivery to the customers for long-run

sustainability. Customer relationship signifies identifying the needs of the customers and

stretching out ways and means to satisfy them. To be precise, it means achieving high

customer profitabilitycustomer revenues over and above customer costs, which demands

matching customer expectations with customer satisfaction.


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2. TELECOM SECTOR IN INDIA

Telecom industry in India has undergone a revolution in the recent years. The country is

ranked second worldwide in terms of having the largest telecommunication network, after

China. With the ongoing investments into infrastructure deployment, the country is

projected to see high penetration of Internet, broadband and mobile subscribers.

In 1994, as per the objectives laid down in the telecom policy, the Indian government

liberalized the Telecom sector by allowing private sector participation for both basic and

value-added services. Change in economic thinking coupled with lack of resource s to

upgrade and invest in infrastructure forced this policy change. As an initial and immediate

result of privatization, the private players were given licenses to provide Cellular Services

initially in four metro cities and subsequently, they were given licenses to operate in 19

cities apart from the four metros. As for the Basic Services, the government in the

beginning, decided to adopt a duopoly strategy, by allowing only two players to operate in a

telecom circle, of which one is the private player other than the existing government owned

service provider. Despite the government making several concentrated efforts through theFive-year plans, to provide good communication system to the people of the country, due to

increasing population, non -accessibility to remote rural areas and non-availability of

adequate resources, the national tele-density stood at 1.1 in 1995-96, which was far from

the global average of 12 at the same period.

The change of government paved way for reforms in the sector and the New Telecom Policy

(NTP) of 1999 was initiated to overcome the flaws in the telecom policy announced in 1994,

and to go with the Supreme Court recommendations to allow unrestricted entry in the

telecom sector. The primary objective of the NTP was to increase the national tele-density

to 15 by the year 2010. This meant installation of 130 million more lines at an estimated

expenditure of about Rs.5000 b illion from the year 2000 to 2010. This investmentrequirement could not have been met by DoT alone. In order to meet the investment

targets, it was imperative that multiple players be allowed to compete in the market.

During the monopoly service provider regime, where only one government owned telecom

service provider existed, the market forces of demand and supply were controlled by the

monopoly service provider. The demand was very high, not adequately matched by the

supply of telephone lines. Telephones were not given on demand and people had to wait for

a telephone connection for years. Reports reveal that th e waiting time in the pre-

privatisation era was more than a year, in some areas the waiting time was more than 5

years. Lack of adequate investments in capacity improvement and exchange automation

also contributed to this long waiting time. Another factor that contributed to this was thehuge demand for telephone service in a 100-crore populated country. For one telephone

service provider to cater to the communications requirement of the entire country was an

uphill task.


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Subsequent to the announcement made in the NTP 1999, the government started issuing

licenses to multiple private service providers to provide services in each telecom circle. The

private service providers started their operations in the year 2000. Thus, the sector that was

characterized by a monopoly market structure slowly moved into a competitive

environment, with multiple players offering a variety of services. The competitive

environment is also witnessing a change in the preference patterns of the consumers, which

is evident from their acceptance of private products in the last four years. Thanks to

privatisation, the telecom industry of India is now witnessing a gradual and steady shift from

a monopoly market to a competitive market. The market witnesses multiple service

providers, providing the basic as well as value-added services to the subscribers.

Privatisation of the sector and the subsequent multiple entry of private service providers

into the market, have made the state owned telecom players wake up to reality and realize

the importance of satisfying a customer. BSNL and MTNL had lost 2 million fixed line

subscribers as on December 2003, and the PSUs are pulling up their sleeves to fight the

competition.

The industry is experiencing a transformation from being a monopoly market to a

competitive market. When there is monopoly, the customers are left with no choice but to

accept whatever is given by the monopoly service provider, but in a competitive

environment, consumers can exert their preferences and the service providers need to map

the consumer expectations and match them with their product and service delivery in order

to sustain in the market. The market, now with private players and a competitive

environment, has necessitated the re-structuring of the functions of players. With

liberalization and subsequent de-monopolisation in the telephone segment, the scene has

changed. The competitive environment has stolen a big share of subscribers from DoT. With

privatisation in the Indian Telecom industry, the most excited are the consumers, who are

emerging as kings in the market, as is the case with any market in a competitive

environment.

According to our new analytical study on the sector Indian Telecom Analysis (2008 -2012),

mobile telephony continues to fuel growth of th e Indian telecom sector, with mobile

subscribers projected to grow at a CAGR of around 11% between 2009-10 and 2013-14.

Other segments of the industry such as Internet and broadband are also anticipated to

witness strong growth in terms of both subscriber addition and network infrastructure

deployment over the forecast period.

Tele-density in India has improved significantly over the recent years and has reached

around 51% in the fiscal year 2009-10, owing to improving network infrastructure. The

launch of advanced telecom services like 3G and IPTV will also drive the growth in Indian

telecom subscriber base over the forecast period. Furthermore, mobile handset market isalso expected to register a robust growth in near future.

The report provides a detailed study of the Indian telecom sector and gives an analysis of

the competitive environment prevailing in the industry. The Indian telecom industry has

achieved tremendous growth consolidating a subscriber base of 560 million by end 2009.

By end 2010 we are hopeful of crossing our 11th Five Year Plan target of 600 million

connections two years ahead of schedule, said Gurudas Kamat, Indian Minister of State

for Communications & IT, speaking at the Convergence 2010 he said,

Telecommunications have emerged as a springboard of ICT applications with economy-


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wide impact. A whole range of information based industry applications have come up

creating new sources of employment and earning. Kamat emphasized that the need of the

hour was enabling the mobile device to empower the masses through customized value

added services for rural applications.

India has got around 11 mobile service providers including both the GSM (Global System for

Mobile) and CDMA (Code division Multiple access) service. Among this 11, the re are 8 GSM

service providers and 3 CDMA service providers.

1) BSNL/MTNL (Bharat Sanchar Nigam Limited/ Mahanagar Telecom Nigam Limited)- It is

the largest telecom company in India with 24% market share and currently the customer

base is around 90 million. This customer base includes fixed line phones, mobiles and DSL

lines. Its an government company with market value of around 100 Billion.

2) Airtel - Bharti Enterprises - Its world's third largest single country mobile operator with

around 110 million sub scribers, the chairman of the company is Sunil Mittal. Airtel provides

fixed and mobile teleservices and it has recently launched Digital Television DTH service and

broadband service also. Airtel has around 24% market share in India.

3) Reliance Communications - This was formerly known as reliance Infocom. Its a private

company in which Anil Dhirubahi Ambani holds around 67% share. It has 17% market share

in India. Reliance had initially started with the CDMA service but now has extended it to

GSM also. It also provides service like Mobile broadband services, mobile service, fixed line

service, Internet service.

4) Vodafone Essar - Initially this was marketed under brand Hutchisson Essar, but Vodafone

took over and now it is known as Vodafone Essar. The market share is around 24% for

vodafone and it operates in 33 circles in India. It provides only GSM mobile service in India.

5) Tata Teleservices Its a part of one of the world's largest conglomerate Tata Group under

Chairman Rata Tata. It markets under 3 different brands, Tata Indicom, Virgin Mobile and

recently it started the brand Tata Docomo which is a venture between Japanese mobile

giant NTT docomo and Tata Teleservice. Tata Indicom is a CDMA provider, it provides

cellular, Mobile broadband, fixed line services. Virgin is a CDMA player which provides

cellular as well as wireless internet. Tata Docomo is a GSM player which provides only

mobile service.

6) Idea Cellular - Currently the Aditya Birla group holds about 49% share of Idea cellular. It

has a market share of about 15% in India with around 48 million subscribers. It provides

GSM mobile service and wireless Internet for laptops.

7) Aircel - It is India's 5th largest GSM service provider with subscriber base of about 27

million. Its a joint venture between Maxis Communication, Malaysia and Apollo Hospital

Group, India. It has a market share of about 13% in India. Currently it provides only GSM

mobile service.

8) Uninor - It is the 8th GSM service that started its operation in India. Its a merger between

Unitech India and Telenor, Norway.


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9) MTS - Its a CDMA/GSM player which is a merger between Shyam group, India and Sistema

group, Russia.

10) Loop Mobile The cellular services provided by the BPL electronics group, although the

services are not provided PAN India but it has a fair presence in the major cities of the

country.

11) Videocon The newest to enter the competitive market of cellular service providers in

Mumbai was the Dhoot group with the same name of their other businesses as Videocon.

Functioning with the GSM technologies , Videocon offers to be best network providers in

Mumbai.


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2.1 CDMA

Code division multiple access (CDMA) is a channel access method utilized by various radio

communication technologies. It should not be confused with the mobile phone standards

called CDMA-One and CDMA2000 (which are often referred to as simply CDMA), which use

CDMA as an underlying channel access method.

One of the basic concepts in data communication is the idea of allowing several transmitters

to send information simultaneously over a single communication channel. This allows

several users to share a bandwidth of different frequencies. This concept is called

multiplexing. CDMA employs spread-spectrum technology and a special coding scheme

(where each transmitter is assigned a code) to allow multiple users to be multiplexed over

the same physical channel. By contrast, time division multiple access (TDMA) divides access

by time, while frequency-division multiple access (FDMA) divides it by frequency. CDMA is a

form of spread-spectrum signalling, since the modulated coded signal has a much higher

data bandwidth than the data being communicated.

An analogy to the problem of multiple access is a room (channel) in which people wish to

communicate with each other. To avoid confusion, people could take turns speaking (time

division), speak at different pitches (frequency division), or speak in different languages

(code division). CDMA is analogous to the last example where people speaking the same

language can understand each other, but not other people. Similarly, in radio CDMA, each

group of users is given a shared code. Many codes occupy the same channel, but only users

associated with a particular code can understand each other.

Each user in a CDMA system uses a different code to modulate their signal. Choosing the

codes used to modulate the signal is very important in the performance of CDMA systems.

The best performance will occur when there is good separation between the signal of a

desired user and the signals of other users. The separation of the signals is made bycorrelating the received signal with the locally generated code of the desired user. If the

signal matches the desired user's code then the correlation function will be high and the

system can extract that signal. If the desired user's code has nothing in common with the

signal the correlation should be as close to zero as possible (thus eliminating the signal); this

is referred to as cross correlation. If the code is correlated with the signal at any time offset

other than zero, the correlation should be as close to zero as possible. This is referred to as

auto-correlation and is used to reject multi -path interference.

Major operators in India with CDMA technology: -

y Reliancey Tata- Indicom, Virgin.

y MTS


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2.2GSM

GSM, Global System for Mobile Communications: originally from Groupe Spcial Mobile, is

the most popular standard for mobile telephony systems in the world. The GSM Association,

its promoting industry trade organization of mobile phone carriers and manufacturers,

estimates that 80% of the global mobile market uses the standard. GSM is used by over 3

billion people across more than 212 countries and territories. Its ubiquity enables

international roaming arrangements between mobile phone operators, providing

subscribers the use of their phones in many parts of the world. GSM differs from its

predecessor technologies in that both signalling and speech channels are digital, and thus

GSM is considered a second generation (2G) mobile phone sys tem. This also facilitates the

wide-spread implementation of data communication applications into the system.

The ubiquity of implementation of the GSM standard has been an advantage to both

consumers, who may benefit from the ability to roam and switch carriers without replacing

phones, and also to network operators, who can choose equipment from many GSM

equipment vendors. GSM also pioneered low-cost implementation of the short message

service (SMS), also called text messaging, which has since been suppor ted on other mobile

phone standards as well. The standard includes a worldwide emergency telephone number

feature (112).

Newer versions of the standard were backward-compatible with the original GSM system.

For example, Release '97 of the standard added packet data capabilities by means of

General Packet Radio Service (GPRS). Release '99 introduced higher speed data transmission

using Enhanced Data Rates for GSM Evolution (EDGE).

GSM networks operate in a number of different carrier frequency ranges (separated into

GSM frequency ranges for 2G and UMTS frequency bands for 3G), with most 2G GSM

networks operating in the 900 MHz or 1800 MHz bands. Where these bands were alreadyallocated, the 850 MHz and 1900 MHz bands were used instead (for example in Canada a nd

the United States). In rare cases the 400 and 450 MHz frequency bands are assigned in some

countries because they were previously used for first-generation systems. Most 3G GSM

EDGE networks in Europe operate in the 2100 MHz frequency band. Regardless of the

frequency selected by an operator, it is divided into timeslots for individual phones to use.

This allows eight full-rate or sixteen half-rate speech channels per radio frequency. These

eight radio timeslots (or eight burst periods) are grouped into a TDMA frame. Half rate

channels use alternate frames in the same timeslot. The channel data rate for all 8 channels

is 270.833 kbit/s, and the frame duration is 4.615 ms. The transmission power in the

handset is limited to a maximum of 2 watts in GSM850/9 00 and 1 watt in GSM1800/1900.

GSM has used a variety of voice codec to squeeze 3.1 kHz audio into between 6.5 and 13

kbit/s. Originally, two codec, named after the types of data channel they were allocated,

were used, called Half Rate (6.5 kbit/s) and Full Rate (13 kbit/s). These used a system based

upon linear predictive coding (LPC). In addition to being efficient with bitrates, these codec

also made it easier to identify more important parts of the audio, allowing the air interface

layer to prioritize and better protect these parts of the signal.


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GSM was further enhanced in 1997[13] with the Enhanced Full Rate (EFR) codec, a 12.2

kbit/s codec that uses a full rate channel. Finally, with the development of UMTS, EFR was

re-factored into a variable-rate codec called AMR-Narrowband, which is high quality and

robust against interference when used on full rate channels, and less robust but still

relatively high quality when used in good radio conditions on half -rate channels.

GSM has used a variety of voice codec to squeeze 3.1 kHz audio into between 6.5 and 13

kbit/s. Originally, two codecs, named after the types of data channel they were allocated,

were used, called Half Rate (6.5 kbit/s) and Full Rate (13 kbit/s). These used a system based

upon linear predictive coding (LPC). In addition to being efficient with bitrates, these codec

also made it easier to identify more important parts of the audio, allowing the air interface

layer to prioritize and better protect these parts of the signal. GSM was further enhanced in

1997[13] with the Enhanced Full Rate (EFR) codec, a 12.2 kbit/s codec that uses a full rate

channel. Finally, with the development of UMTS, EFR was re-factored into a variable-rate

codec called AMR-Narrowband, which is high quality and robust against interference when

used on full rate channels, and less robust but still relatively high quality when used in good

radio conditions on half-rate channels.


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3. TELECOM OPERATORS IN INDIA

The major telecom operators in India are near to 15 in numbers, but all of them are not

present all across the country but a decent competition exists between 11 of the top listed

cellular services providers. Amongst these 11 operators the giants are from both the

government and the private sectors. From the government sector the major players areMTNL and BSNL. They offer services in both the technologies like GSM and CDMA. Their

services are available in both post-paid and pre -paid.

Similarly from the private sector the major operators a re from TATA, Reliance, Bharti, Aditya

Birla groups. They also provide services in CDMA & GSM. In terms of payment they also

provide options of post-paid and pre-paid. The customers have various options of payment,

they can choose from a wide spectrum of service providers and payment modes. Usually it is

observed that the customers chose to purchase the pre-paid services more than the post

paid services. During the research done as the part of this report this information came out

as a fact.

3.1 POST-PAID CELLULAR SERVICES

Most of the telecom operators provide Post-paid services to their customers; the customers

are majorly from the corporate sectors and the people who require communicating

uninterruptedly to their business partners. The telecom operators provides these clients

with various schemes and discounts so as to create a long term relationship that results into

profits of the company due to increased MOU. The companies usually have different

departments dealing with their post-paid customers, but there are some companies which

only deal with post-paid customers only. To name a few companies that provide post-paid

services are; Airtel, Vodafone, Idea, Aircel, Tata -DoCoMo, MTNL, BSNL, LOOP, Videocon, etc.

3.2 PRE-PAID CELLULAR SERVICES

All the telecom operators provide pre-paid services. The pre-paid services are widely

preferred because it gives a chance to the customers to get to know the service provider

and also test the services of the operator. The companies fight for the market share in this

segment and have different departments to deal with the different needs of the customers.

The schemes and promotional offers that is provided to the customers are much more

lucrative than the post-paid service this is done to get the market share of other operators.

The pre-paid calling and communication are not the main source of revenue for the

companies but the data and others services used by the customers generate the revenue.

The companies which provide pre-paid services in Mumbai are; Airtel, Vodafone, Idea, BSNL/MTNL, Reliance, Tata-DoCoMo, Aircel, Virgin mobile, MTS, Loop Mobile, Tata- Indicom, Videocon.


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4. PRE-PAID MARKET

The total number of cellular service users in the country can be divided into two; Pre -paid &

Post-paid. Here in this report our concern revolves around the needs and expectations of

the pre-paid cellular service users. The sample of the research also comprises of the same so

as to give a clear idea of pre-paid customers. Since the risk is near to nothing on switching toone operator to other in such competitive market, what can be the reasons for the

customers to stick or switch to any other operators? When the market is such that on

paying only a small amount of Rs. 50 a customer can change his service provider what

makes him stay and the same can be asked as he switches from one operator to other. In

such cases the frequency of changing the operators has not been taken into account along

with the multiple service users, as it is assumed that the loyalty to a particular operator is

not existent in that segment of the customers they are simply price sensitive and tend t o get

a better deal. It has been observed that the main revenue generation doesnt happen

through the pre-paid customers rather it happens through the post-paid customers yet the

companies give utmost importance to their pre-paid customers and try to lure them with

attractive schemes and promotional offers. The ARPU and the MOU come into play whileaccounting the revenue generated from the customers. Comparatively the pre-paid market

is far bigger than the post-paid market and the number of customers keeps on changing

from one brand to other brand yet the numbers increase in the companys portfolio

because of the potential users joining in everyday in number of millions and the rural

market being explored as the technical hurdles getting lowered. As these ru ral markets are

exploring the cellular services for the first time they tend to purchase the pre -paid

connections from a variety of operators coming in everyday. So as the companies explore

these rural markets they tend to play the initial game of customer acquisition on the basis of

competitive pricing and offer cut throat competition to other operators. The best prices till

date in the pre-paid market have been provided by the Reliance communications group and

have been giving competition to the other players but the other operators dont tend toagree to this and rightly so because most of them are competing on a different

technology(GSM) whereas the technology used by RIL is CDMA which is a cheaper mode of

communication and was not primarily meant for mobile communication but the technical

advancement and some modification made it possible and RIL ventured into the business at

the right time and changed the whole scenario of communication in India.

Other big players in the market which provide a good pric e for the customers are; Vodafone,

Airtel, Idea and some new entrants like Tata-DoCoMo & Aircel promises good deals for the

customers. The market share is predominantly calculated on the two differentiating types of

technology i.e. GSM & CDMA. In CDMA Reli ance gets the maximum share and in GSM it is

Airtel from the Bharti group who manages to be in the sweet spot.


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4.1. MARKET SIZE AND THE SHARE OF PRE-PAID SERVICE USERS

India at present has more than 500 million subscribers and the major market share is o wned

by private players. Every quarter the TRAI releases a compiled report of every operational

quarter. In the last quarter the telecom companies have faced losses in the revenues but the

subscriber base has increased.

Here is a quick peek into the market share [MS] of various mobile companies in India at the

end of Dec-2009. Read Subscriber MS as SIM based MS.

y Bharti Airtel Subscribers 22.6% while Revenue is the highest at 29.1%, saw a

decline of 1.1% in the Dec quarter.

y Reliance Communications Subscribers 17.9% and Revenue of 15.2%

y Vodafone India Subscribers 17.4% and Revenue of 20.8% managed to buck the

trend and gain 0.3% revenue market share.

y BSNL Subscribers 12% and Revenue of 9% is unable to arrest the downfall.

Witnessed 0.5% decline in QoQ of revenue market share

y Idea Cellular Subscribers 11% and Revenue of 12.7% had a successful quarter

amidst the Per Second Billing Chaos as it increased its revenue market share by

100bps during the quarter.

y Tata Teleservices Subscribers at 10.9% while Revenue share was at 7.1% .

y Aircel Performance was better as it managed to have a subscriber market share of

5.9% and a revenue market share of 4% with the latter witnessing a growth of 0.3%

QoQ.

Source TRAI, AUSPI,COAI and company reports.

According to latest available data i.e. TRAI report after Dec09, these were the relative

findings.

y Total wireless subscribers at the end of this quarter are 525.09 million.

y Percentage change over the previous quarter was 11.31%.

y The Urban subscribers were more than double of the Rural Subscribers.

y The GSM subscribers exceeded 3 times the CDMA subscribers.

y Till date the Tele-density of the country is yet to reach 50% and found to be 44.72%.

y Whereas the urban Tele-density is 103.20% and Rural was 19.95%. Huge scope in the

rural market to expand for the Telecom companies.

y Percentage of pre-paid subscribers is way more than that of Post-paid subscribers

i.e. 95.18%.


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4.2 ARPU OF PRE-PAID CUSTOMERS

ARPU or the Average Revenue per User is the basis term for the accounting of revenue in

Telecom sector. The ARPU is based on the MOU i.e. the Minutes Of Usage. The major

revenue is generated through the calling and roaming facilities provided by the operators.

The revenue is calculated QoQ. The pre-paid ARPU contributes to the blended ARPU.

Table 1: ARPU of Pre-paid customers

Circle category Postpaid Prepaid Blended ARPU

Circle A 513 128 149

Circle B 465 122 132

Circle C 487 117 128

Metro 615 121 184

All India 530 124 144

The revenue generated can be allocated to different heads as per their generation patterns.

The revenue for an operator can come from many resources such as the calling, roaming,

rentals, SMS etc. The break up for the last quarter has been provided here along-with the

comparison of earlier quarter.

Table2: Total Revenue Increase

Item Sep-09 Dec-09

Rental Revenue 26.6% 27.6%

Revenue from Calls 56.0% 56.1%

Revenue from Roaming 1.9% 1.5%

Revenue from SMS 5.1% 5.6%

Other Revenues * 10.4% 9.1%

* Other revenue includes revenue from other value added services, installation etc.


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5. ADVANTAGES AND DISADVANTAGES OF PRE-PAID CUSTOMERS

Is it worthwhile signing a contract with a cell phone carrier?

This is the most important question that comes into a customers mind before making a

purchase decision of a cellular service provider. How does the customer reach to a decisionis a critical thing to be analysed. There are a set of questions he asks to himself.

y Do I need my cell phone for work?

y Will I be calling mainly friends and family?

y Will I be making out of state calls or international calls?

Prepaid cell phones are ideal for people who do not intend signing contracts and do not

intend to use the cell excessively. There many advantages and disadvantages with using this

type of cell phone.

The main advantage of prepaid cell phones is the combination of freedom and control thatthey offer. With a prepaid cell phone, you're not locked into a multi -year plan with a set

number of minutes per month during specific calling times, additional charges if you exceed

the limit and a costly fee if you break the contract. You're free to talk whenever you want,

as long as you want, until you run out of minutes. And you don't have to pay a month ly bill.

Talking one month and less the next makes no difference, and leftover minutes roll over

from one month to the next. Plus, if you want to change to a different type of plan, a

prepaid phone gives you the freedom to switch whenever you want.

The main advantage of prepaid cell phones is the lack of a contract. Because you are not

tied to any specific company or monthly rate, you can spend as much or as little as yourbudget allows. If you don't use your phone much, prepaid cell phones make a lot of se nse,

as you don't have to pay a fixed amount for minutes that go to waste.

Another good advantage of prepaid cell phones is that there is no credit check required to

open an account. This is great for teenagers or for those with no credit history.

Prepaid cell phones don't require a deposit to open an account, unlike many other plans.

Prepaid cell phones are a great option for parents who want their children to have a phone

but want to have control over how much they spend.


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Theseadvantagesmakea prepaid phone work particularly well for:

y Occasional cell phone users: If you only use a cell phone for emergencies and

perhaps a few calls a week, you don't need a fancy phone or a complicated billing plan. A

prepaid phone may work well, but make sure you know about any time limit on unused

minutes.

y Short-term users: Buy it, use it on vacation or while your regular cel l phone is missing

or broken and then throw it away.

y Trial users: Before committing to a long-term cell phone plan, use a prepaid phone

for a month or two to gauge what your (or your teenager's) actual usage will be. Then you

can find a plan with the minutes and calling times to match.

y Young adults and others with no credit history or credit card debt : Buying a prepaid

cell phone doesn't require a long-term contract and credit check, so students with part-time

jobs or older adults with no use of credit or a less -than-perfect credit record can get a phone

easily.

Inagistthemainadvantages ofusinga prepaid cell phone:

y No credit check required

y No deposit required

y No monthly rental fee

y No termination fee if you decide not to use your phone again

y No service fee

y A large selection of phones available including camera cell phones

y Always in control of call costs

While a prepaid cell phone offers many advantages, it also can present problems for its

users. One of the biggest problems is the cost per minute, a serious disadvantage for anyone

who talks a lot on a cell phone.

y Prepaid cell phones are more expensive to use. The cost per minute is usually 2-3

times higher than the price per minute under contract plans.

y Unless you are organized and keep track of your credit, you run the risk of running

out of minutes when you most need them.

y Calls and SMS Text will be more expensive per minute than using a bill phone.

y Some carriers will put a time limit on your credit (you will need to use it up within a

certain time or else it will be classed as invalid).


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6. CONSUMER BUYING BEHAVIOR

Consumer Buying Behavior is the behavior that a consumer display while buying the product

or a service. Each and every consumer has his/her own buying behavior that he displays it

during purchase of different products. This behavior displayed by the consumer is the result

of a number of influences which he/she receives from the environment. These influencescan be categorized into four factors viz. Cultural factors, Social factors, Personal factors and

Psychological factors.

Cultural Factors

Culture, subculture and social classes are particularly important in buying behavior. Culture

is the fundamental determinant of a persons wants and behavior. Each culture consists of

smaller subcultures that provide more specific identification a nd socialization of its

members. Subculture includes nationalities, religions, racial groups and geographic regions.

Social Factors

In addition to cultural factors a consumers behavior is influenced by such social factors asreference groups, family and social roles and statuses. A persons reference group consists

of all the groups that have a direct (face to face) or indirect influence on the persons

attitudes or behavior. Groups that have direct influence on a person is called as membership

groups. Some membership groups are also called as primary groups, such as family, friends,

neighbors and coworkers with whom the person interacts fairly continuously and informally.

People also belong to secondary groups such as religious, professional and trade union

groups which tend to be more formal and require less continuous interaction. Aspirational

groups are those a person hopes to join; dissociative groups are those whose values and

behavior an individual rejects. The family is the most important consumer buying

organization in society, and family members constitute the most influential primary

reference group. A person participates in many groups-families, clubs, organizations. Thepersons position in each group can be defined in terms of role and status. A role consists of

the activities a person is expected to perform. Each role carries a status.

Personal Factors

A buyers decisions are also influenced by personal characteristics. These include the buyers

age in the life cycle, occupation, economic circumstances, lifestyle and personality and self

concept. People buy different goods and services over a lifetime. They eat baby food in the

early years, most foods in the growing matured years and special diet in the later years.

Occupation also influences consumption patterns. A blue collar worker may buy work

clothes, work shoes and lunch boxes. A company president may buy expensive suits, air

travel and country club membership. People from same subculture, social classes andoccupation may lead quite different lifestyles. A lifestyle is a persons pattern of living in the

world expressed in activities, interest and opinions.

Psychological Factors

A persons buying choices are influenced by four major factors viz. motivation, perception,

learning, believes and attitudes.


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6.1 IMPORTANCE OF CONSUMER BUYING BEHAVIOUR

The study of consumer behavior focuses on how individuals make their decisions to spend

their available resources (time, money, effort) on consumption related items or

consumption related aspects (What they buy? When they buy? How they buy?). It is also the

study of individuals, or organizations and the processes consumers use to search, select, use

and dispose of products, services, experience, or ideas to satisfy needs and its impact on the

consumer and society.

The consumer buying decision goes through the following stages:

y Problem recognition

y Information search

y Evaluation of alternatives

y Purchase decision

y Purchase

y

Post purchase evaluation

Buyer behavior is deeply rooted in psychology with dashes of sociology thrown in just to

make things more interesting. Since every person in the world is different, it is impossible to

have simple rules that explain how buying decisions are made. But those who have spen t

many years analyzing customer activity have presented us with useful guidelines in how

someone decides whether or not to make a purchase. The evaluation of marketing concept

from mere selling concept to consumer oriented marketing has resulted in buyer behavior

becoming an independent discipline.

The growth of consumerism and consumer legislation emphasizes the importance that is

given to the consumer. Some consumers are characterized as being more involved in

products and shopping than others. A consumer who is highly involved with a product

would be interested in knowing a lot about it before purchasing. Hence he reads brochures

thoroughly, compares brands and models available at different outlets, asks questions, and

looks for recommendations. Thus consumer buying behavior can be defined as heightened

state of awareness that motivates consumers to seek out, attend to, and think about

product information prior to purchase. Consumer behavior is important to successfully

market to different market segments to survive in the market.


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6.2 CONSUMER PERCEPTION

It is selection, organization, and interpretation of marketing and environmental stimuli into

a cohesive picture. Perception is a mental process, whereby an individual selects data or

information from the environment, organizes it and draws significance or meaning from it.

Perception is basically a cognitive or thinking process and an individuals activities,

emotions, feelings etc. are based on his perception of his perception of his surroundings or

environment. Perception being an intellectual and cognitive process will be subjective in

nature. This means that different people may perceive the same environment differently.

Characteristics affecting perception:

Characteristic effecting perception can be divided into sensory elements and structural

elements. The sensory elements are as follows.

Color: Color has important sensory connotations. Evidence suggests that red is regarded as

warm, sensual and not intimidating. Blue is seen as conforming and is re garded to be color

that attempts to convey friendlier image. Pepsi attempt to cash on the blue color of the

Indian cricket team during the recent World Cup cricket matches has received a similar

response. Many retailers in Mumbai call it Ghaslet Pepsi. This is because Indians are more

used to identify blue with kerosene and their long term association with blue color of

kerosene led to call blue Pepsi as Ghaslet.

Taste: Taste is another sensory factor that will condition consumers brand perceptions. The

importance of taste is illustrated by P&G blunder when it first introduced Pringles potato

chips. The chips were packed in an easy-to-stack cylindrical can to avoid breakage of chips.

The consumers responded by saying that the packaging resembles a tennis ball can. Further

consumers felt that the chips tasted like tennis ball.

Smell: Smell is important for food products and cosmetics products. In one study, two

fragrances were added to the same facial tissue. Consumers perceived one facial issue as

elegant and expensive and the other as a product to use in the kitchen.

Sound: Sound is another important sensory stimulus. Advertisers have traditionally used

accent to convey status and authority. Even in case of serials, voice is being used to create

an impact on the masses.

Feel: The feel of certain products will also influence consumers perceptions. Softness is

considered a desirable attribute in many paper products. Feel is also a means of

determining quality. Consumer often use of a textile fabric, clothing, carpeting, or furnitureto evaluate quality. For example, a smooth, velvety feel in textile fabrics is considered an

indication of quality.


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Thestructuralelementsareas follows:

Intensity and Size: The brighter and advertisement and larger the size, more it is able to

attract the attention of potential consumers. Such large advertisements can be in the form

of full page advertisements in newspapers or in the form of large hoardings on the road.

Position: Attraction towards and advertisement depends largely on the place where it is

positioned. Positioning includes the page of a newspaper. Similarly, the placement of

product for display on shelves at the retail outlet plays an important role in attracting the

attention of the consumers.

Contrast: A black and white advertisement with a small spot used by Jet Airways is likely to

attract attention. A quite commercial after a loud program can attract attention like the

advertisement of De Beers diamond after listening to a frantic rock show.

Novelty: It is observed that anything which is different from what is normally expectedtends to attract attention like an unusual bottle shape or different packaging material.

Repetition: Advertisements are repeated often to enable consumers to brand recall as well

as stimulate them and create a strong desire for interest in the purchase of the product.

Repetition is particularly important in case of low involvement convenience goods like soaps

and toothpastes.


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6.3 CONSUMER ATTITUDE

Consumers attitude is a hypothetical construct that represents an individual's degree of like

or dislike for an item. Attitudes are generally positive or negative views of a person, place,

thing, or event- this is often referred to as the attitude object. People can also be confl icted

or ambivalent toward an object, meaning that they simultaneously possess both positive

and negative attitudes toward the item in question. Attitudes are judgments. They develop

on the ABC model (affect, behavior, and cognition). The affective response is

an emotional response that expresses an individual's degree of preference for an entity.

The behavioral intention is a verbal indication or typical behavioral tendency of an

individual. The cognitive response is a cognitive evaluation of the entity that constitutes an

individual's beliefs about the object. Most attitudes are the result of either direct experience

or observational learning from the environment

Attitudes can be changed through persuasion and we should understand attitude change as

a response to communication. Experimental researches into the factors that can affect the

persuasiveness of a message include:

Target Characteristics: These are characteristics that refer to the person who receives and

processes a message. One such trait is intelligence - it seems that more intelligent people

are less easily persuaded by one-sided messages. Another variable that has been studied in

this category is self-esteem. Although it is sometimes thought that those higher in self-

esteem are less easily persuaded, there is some evidence that the relationship between self-

esteem is actually curvilinear, with people of moderate self-esteem being more easily

persuaded than both those of high and low self -esteem levels (Rhodes & Woods, 1992). The

mind frame and mood of the target also plays a role in this process.

Source Characteristics: The major source characteristics are expertise, trustworthinessand interpersonal attraction or attractiveness. The credibility of a perceived message has

been found to be a key variable here; if one reads a report about health and believes it

came from a professional medical journal, one may be more easily persuaded than if one

believes it is from a popular newspaper. Some psychologists have debated whether this is a

long-lasting effect and Hovland and Weiss (1951) found the effect of telling people that a

message came from a credible source disappeared after several weeks (the so-called

"sleeper effect"). Whether there is a sleeper effect is controversial. Perceived wisdom is that

if people are informed of the source of a message before hearing it, there is less likelihood

of a sleeper effect than if they are told a message and then told its source.

Message Characteristics: The nature of the message plays a role in persuasion. Sometimespresenting both sides of a story is useful to help change attitudes.


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6.4 WHY CONSUMERS PERCEPTION IS IMPORTANT FOR TELECOM SERVICE

PROVIDERS?

Perception is our way of looking at things. Perception is the trigger or the immediate cause

which leads to product being sold. When a consumer wants to buy a product, he does a lot

of research on it regarding the benefits he can acquire from it. One of the main reasons asto why a consumers perception towards a service provider is so important is because if he

doesnt have any knowledge about the service/ brand, how it performs, then how is going to

end up buying it if he intends to. Even if he isnt a potential customer, it is always good to

have an idea about what the consumer thinks about the service in the competitive cellular

service market. Whether the consumer perceives it as an honest brand, an imaginative

brand, an innovative brand, a successful brand or a reliable brand speaks about the brand

personality of the service provider. Consumers might want the brand to give splendid

mobile connectivity pleasure; might want the brand to add an image to his/her lifestyle;

might want the service to be technologically up-to-date; might want the brand to give

excellent network both in the city as well as in the highway and might also want it to give

excellent pricing options. So it is always good to know how consumers perceive the brand/service as it gives an idea on how to make the service better so that it does well in the

market.


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7. CRM IN THE TELECOM SECTOR

With the Indian economy showing signs of a continued and robust growth in the coming

years, telecom cannot have a different outlook. Recent developments in the Indian telecom

sector have brought the world focus on what is being pronounced as the fastest growing

telecom market in the world. While crossing the landmark 500 million subscribers hasindeed brought Indian telecom sector in the big league telecom markets, the best ever rate

of growth that we see is the added silver lining. No wonder the world focus is on India,

which in all modesty is bound to become the second largest telecom sector in the world,

after China. The telecom story unfolding in India has enough spice for any aggressive player

because the market is just growing and will continue to see more action.

The telecommunications market, in the last few years, has seen incredible Technological

advancement, which has fuelled massive consumer adoption and brutal competition driven

by commoditization. To drive profits operators must increase the average lifetime value per

customer and minimize the service cost even as service choices increase. Common to all of

our customers in the telecom sector is an abiding belief in delivering the best service tocustomers by investing in technology that empowers consumers and service agents to have

intelligent, productive conversations. In a marketplace where consumers are increasingly

aware of their choices, consistent service quality is the foundation of a durable brand.

An effective CRM system includes tools such as a skilled customer care staff and leading

edge automation and workflow management software platforms. With this tool, it is

possible for a telecom company to track sales enquiries, trouble tickets, emails, telephone

calls, and customer satisfaction surveys.

Telecom, especially mobile telecom, is a highly competitive and increasingly mature market.

As network coverage, handsets, and price plans become less important as differentiators,customer service is increasingly seen as the key factor in customer acquisition and customer

retention. Mobile telephony providers face a significant challenge to introduce and support

the range of new products and services such as email, multimedia messaging, and

synchronization with handheld devices, etc. For such an amount of service offering service

quality has to be that the subscribers can relate to and stick to the brand. Organizations

would like to reduce the costs of customer care by deflecting calls to web -based service

channels, preferably to self-service. With the commoditization of products and services,

fuelled by greater access to competitive information over the web, customer service is one

of the few ways organizations can themselves and increase market share.

The National

Telecom Agency's Decisions By Complaints Boards:-

a. The Telecommunications Complaints Board

The Telecommunications Complaints Board processes and makes the final administrative

decision in cases involving complaints about the National Telecom Agency's decisions and

case processing, which, under statutory provisions or rules laid down in pursuance thereof;

belong under the Telecommunications Complaints Board. This includes the Agency's

decisions regarding competitive conditions and interconnection in the telecommunications

sector and fixing of maximum prices.


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b. The Telecommunications Consumer Board

The Telecommunications Consumer Board processes and makes the final administrative


related case processing, which, under statutory provisions or rules laid down in pursuance

thereof, belong under the Telecommunications Consumer Board. This includes TDC's

compliance with subscription terms, the terms for handling the universal service obligation

and compliance with fixed maximum prices.

Need for CRM in Telecom Sector:-

The beneficiaries of the competition being consumers, the telecom players in todays

environment are required to design and deploy customer-centric strategies not only to grab

a share in the market but also to sustain in the market in the long-run. The players have

realized the importance of constant service-quality delivery to the customers for long-run

sustainability. Customer relationship signifies identifying the needs of the customers and

stretching out ways and means to satisfy them. To be precise, it means achieving high

customer profitabilitycustomer revenues over and above customer costs, which demandsmatching customer expectations with customer satisfaction. The high cost of customer

acquisition is making todays businesses understand the importa nce of retaining the

customers for long-run sustainability.

Customer Relationship Management (CRM) aims at narrowing the gap between the

company and its customers. In Telecom Sector, CRM plays a vital role in not only bringing

the customers close to the company, but also in identifying the changing behavioural

pattern of the customers. In technology-dynamic markets like telecom, an efficient CRM

system is essential, since the customer attrition is high due to the presence of close

substitutes and near-zero switching costs. The book aims at throwing light on the CRM

practices commonly followed in the telecom sector and their applicability to several aspectsof the service delivery process.


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7.1 CRM

The most important question to be asked at this point of time is What is Customer

Relationship Management (CRM)?

CRM is the development and maintenance of mutually beneficial long-term relationships

with strategically significant customers. It is an IT enhanced value process, which identifies,

develops, integrates and focuses the various competencies of the firm to the voice of the

customer in order to deliver long-term superior customer value, at a profit to well identified

existing and potential customers.

CRM is understood for the benefits of the custome rs but it has an underlined benefit for the

companies also, as it increases the much needed trust and faith in the customer and

provider relationship. When this trust and faith is attained the churning or the switch to

other providers doesnt take place.

CRM is a business philosophy based on upon individual customers and customised products

and services supported by open lines of communication and feedback from the participating

firms that mutually benefit both buying and selling organisations.

The buying and selling firms enter into a learning relationship, with the customer being

willing to collaborate with the seller and grow as a loyal customer. In return,, the seller

works to maximize the value of the relationship for the customers benefit.

In short, CRM provides selling organisations with the platform to obtain a competitive

advantage by embracing customer needs and building value-driven long-term relationships.

7.2 DETERMINANTS OF CRM

Trust

The willingness to rely on the ability, integrity, and motivation of one company to serve the

needs of the other company as agreed upon implicitly and explicitly.

Value

The ability of a selling organisation to satisfy the needs of the customer at a comparatively

lower cost or higher benefit than that offered by competitors and measured in monetary,

temporal, functional and psychological terms.

In addition to trust and value, salespeople must understand customer needs and problems,

meet their commitments, provide superior after sales support, make sure that the customer

is always told the truth (must be honest) and have a passionate interest in establishing and

retaining a long-term relationship (e.g., have long-term perspective).


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7.3 STAGES OF DEVELOPMENT OF CUSTOMER RELATIONSHIP

The Pre-relationship Stage

The event that triggers a buyer to seek a new business partner. You must evaluate at what

front your services were not up to the expectation of the customers and what went wrong.

Only after you know what were the reasons for your customers to look out for a new

operator you can take corrective measures.

The Early Stage

Experience is accumulated between the buyer and seller although a great degree of

uncertainty and distance exists. The seller must always tend to decrease these gaps and

distances, for this purpose he can make use of the SERVQUAL model of service marketing.

By the application of this model it becomes easier for the marketer to understand the needs

and wants gaps existing between the two parties involved in the business and hence the

corrective measures can be taken be taken. But it is rather suggested to have preventive

measures than having corrective measures because when the customers gets irritated no

matter what corrective measures are taken it is hard to earn him back therefore the

management must get into CRM even before there is a need.

The Development Stage

Increased levels of transactions lead to a higher degree of commitment and the distance is

reduced to a social exchange. When the commitment is higher, then the performance needs

to be more than expected. When this is done the customer is not just satisfied he is

delighted and this will eventually help in beneficial mutual long-term relationship.

The Long-term Stage

Characterised by the companies mutual importance to each other. The companies must

need to take extra care of their already existing customers because they have showed their

faith in the company and they need to be benefited for this. This can be done by giving extraprivilege for these key accounts. There are various types of key account management

principles applied in different organizations but in telecom sector this privilege is given only

to the corporate clients and not to all the customers who have been there with the

company for nearly a decade, the companies should also take into consideration, these

customers.

The Final Stage

The interaction between the companies becomes institutionalized. Once the companies

manage to get the customer to the final stage then the customers gets habituated to your

services and product and the promotion, advertisement and schemes become noise.


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7.4 FUNC

N

OF C

Dire

t f

ti

The bas c re re e s of a companythat is necessary to s rvive in thecompetitive market

place

y Profity Volume

y Safe uard

Indire

t f

ncti

ns

The actions that is necessary to convince thecustomer to participate in various marketing

activities !

y Innovation

y Market

y Scout

y Access

Fi"

u#

$

1Valu$

Creation Pro%

ess


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30/67

7.6 MODEL&

FOR CRM

Over theyears many marketing geniuses havecreated models CRM. These modelscome to

great use when the companies are trying to provide their customers with the ultimate

e'perience ofservice.

a) The Evans andL(

skin (1994) m)

delf)

reffective Relati)

nshi0

Marketing

Fi1

ure2 Effe2

ti3

e Relationship Marketin1

This model suggests that relationship marketing is an important source for CRM. The inputs

that the service providers need to give aresources that procure the understanding of the

customer e 4 pectations once they are well in place the ne 4 t step is to build beneficial

relationships with the service partners who actually are the face of the company. The

employeesshould also be given the decision making power and theyshould not bound with

the standardisation process i.e. empowering employees to take decision in favour of

customers always. This needs to be done keeping in mind that the total quality of theservice or the product should not be hampered at any point in time. Once all of this is

achieved the results are fruitful, it will givecustomer loyalty and satisfaction, quality of the

service will increase with definite increase in profitability.

Once all this is done the most important thing to do is taking customer feedback and then

integrating it for further improvements once all the customer feedbacks are positive the

motive of CRM will be fulfilled.


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b) The Br5

ckandBarcklay (1999) m5

delofselling partnerrelationship effectiveness

Fi6

ure 3:Bro7

kandBar7

klay Model- Seller Partnership

The model of Brock and Barcklay is a representation of the benefits that are achievable

when the selling partners share a good rapport and understanding with the company.

Generally in theservicesectors theselling partners become the face of thecompany, e.g. if

you order a burger at Mc Donald and thesales representative getsyou the wrong burger

you will alwayssay that Mc Donald did the mistake for you the sales representative isMc

Donald itself. Thesame is applicable to cellular service provider, seldom is thecustomer in

direct contact with the company even when he is talking to the customer care he is not

talking to thecompany but a bunch of outsourced call centre guys.Thus this modelsshows

the way on how to make the relationship with theselling partners more beneficial which inorder will provide the base for CRM and better relationships with thecustomer.


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7.7 MANAGING CUSTOMER RELATIONSHIPS

The global salesperson must be involved in the following activities in order to initiate,

develop and enhance the process that is aimed at building trust and commitment with the

customer.

Initiating the relationship

y Engage in strategic prospecting and qualifying

y Gather and study pre-call information

y Identify buying influences

y Plan the initial sales call

y Demonstrate an understanding of the customers needs

y Identify opportunities to build a relationship

y Illustrate the value of a relationship with the customer

The global salesperson must be involved in the following activities in order to initiate,

develop and enhance the process that is aimed at building trust and commitment with thecustomer.

Developing the relationship

y Select an appropriate offering

y Customise the relationship

y Link the solutions with the customers needs

y Discuss customer concerns

y Summarize the solution to confirm benefits

y Secure commitment

The global salesperson must be involved in the following activities in order to initiate,develop and enhance the process that is aimed at building trust and commitment with the

customer.

Enhancing the relationship

y Assess customer satisfaction

y Take action to ensure satisfaction

y Maintain open, two-way communication

y Work to add value and enhance mutual opportunities


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Qualifying prospectsforrelationship building:-

Everycustomer cant be and will never beyour loyal customer therefore it is advised that

you must prospect theclientsyou want to build relationships with. There are many ways to

identifyyour potential clients, a model for thesame is being provided below.

The model works on two parameters i.e. Opportunities for value addition and Potential

profitability of thecustomer.It isveryessential to take the profit into account before going

for a CRM. CRM involves a lot of monetarye 8 penditures but it will guaranty the benefits in

the future but everycompanyshould evaluate those profitsvia a measurable metricso that

they dont overspend in the areas which are unnecessary and can be avoided.

Fi9

ure 4: Identifyin9

PotentialClients

Relationship networks

The ultimate outcome of a successful CRM strategy is the creationof a unique company

asset known as a relationship network.A relationship network consists of thecompany and

its major customers with whom the company has established long and enduring business

relationships. The additional aspects of a global salespersonsjob are to:

y Managecustomer value

y Act ascustomer advocate

y Enhancecustomer loyalty and build a healthy& profitable network of relationships.


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7.8 APPLICATION OF CRM IN TELECOM SECTOR

The telecommunications market, in the last few years, has seen incredible Technological

advancement, which has fuelled massive consumer adoption and brutal competition driven

by commoditization. To drive profits in this business, you must increase the average lifetime

value per customer and minimize the service cost even as service choices increase. Common

to all of our customers in the telecom sector is an abiding belief in delivering the best

service to customers by investing in technology that empowers consumers and service

agents to have intelligent, productive conversations. In a marketplace where consumers are

increasingly aware of their choices, consistent service quality is the foundation of a durable

brand.

An effective CRM system includes tools such as a skilled customer care staff and leading

edge automation and workflow management software platforms. With this tool, it is

possible for a telecom company to track sales enquiries, trouble tickets, emails, telephone

calls, and customer satisfaction surveys. By the introduction to technology in telecom

operations it is also important to induce some tools that are able to measure the customer

satisfaction and their expectations from the organization. There are many companies who

have tools of CRM implemented in their organization but the lack of understanding about

the customer requirements fails them to act the way they were meant to be, this report

attempts to be an indicator of the customer requirements and hence provides details of the

pre purchase and post purchase states of mind of the customers.

Telecom, especially mobile telecom, is a highly competitive and increasingly mature market.

As network coverage, handsets, and price plans become less important as differentiators,

customer service is increasingly seen as the key factor in customer acquisition and customer

retention.

Mobile telephony providers face a significant challenge to introduce and support the rangeof new products and services such as email, multimedia messaging, and synchronization

with handheld devices, etc. By implementing all this they are inducing the customers to

have an option of getting them associated with the service provider with a wider range of

offerings and once the customer starts using all the services its rare that he would consider

any other service provider.

Organizations would like to reduce the costs of customer care by deflecting calls to web-

based service channels, preferably to self-service. The self-service may sound a bit different

in the telecom sector but it is going to help in the long run to retain the customers. By

inducing self service we are actually getting the customer to interact more with the brand

and in this process a relationship is build. Once this self service is induced customer gets afeel of attachment towards the brand and considers it to be a part of life.


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With the commoditization of products and services, fuelled by greater access to competitive

information over the web, customer service is one of the few ways organizations can

themselves and increase market share. There are more than 13 odd players in Mumbai

circle and the mobile phones have more or less become a commodity, in a scenario like this

the only differentiator that the customers are going to experience is the different peoples

approach and the level of customer service in different organizations providing the cellular

service.

There are solution providers like SAS which help in customer retention tools. SAS Customer

Retention for Telecommunications provides ready-to-deploy models and a

telecommunications-specific data architecture that enables your organization to quickly gain

a better understanding of the variables that influence customer churn allowing you to

determine not only which customers are likely to leave, but why.

The solution offers:

Accurate reporting on who is leaving your company.

Insights into the major factors influencing the decision to leave.

Industry-leading accuracy for predicting who is likely to churn in the near future.

Flexible and scalable technology that can keep up with your company's growth.

Pre-built analytical data and process models that speed up implementation and ROI.

The government has set up agencies that concentrate its resources for the benefits of the

consumer of telecom services.

1. The Telecommunications Complaints Board

The Telecommunications Complaints Board processes and makes the final administrative


case processing, which, under statutory provisions or rules laid down in pursuance thereof;

belong under the Telecommunications Complaints Board. This includes the Agency's

decisions regarding competitive conditions and interc onnection in the telecommunications

sector and fixing of maximum prices.

2. The Telecommunications Consumer Board

The Telecommunications Consumer Board processes and makes the final administrative


related case processing, which, under statutory provisions or rules laid down in pursuance

thereof, belong under the Telecommunications Consumer Board. This includes TDC's

compliance with subscription terms, the terms for handling the universal service obligation

and compliance with fixed maximum prices.


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8. REASONS FOR RETENTION OF A CUSTOMER

In the competitive world of telecommunications, customer churn remains a pressing

concern and an expensive one. Global competition has raised the cost of acquiring new

customers, making it imperative to determine which customers are likely to churn, and

which you'd like to keep, so you can take the necessary steps to prevent them from leaving.Predicting churn and then designing cost-effective strategies to reduce it, however, are

extremely difficult undertakings for most telecommunications companies. Such projects

require organizing and analyzing huge volumes of data that are often difficult to access and

consolidate. Many telecom organizations simply lack the ability to support the complex data

mining and analytical tasks that are essential to combating churn.

Customer loyalty is viewed as the strength of the relationship between an individuals

relative attitude and repeat patronage. The relationship is seen as mediated by social norms

and situational factors. Cognitive, affective, and cognitive anteced ents of relative attitude

are identified as contributing to loyalty, along with motivational, perceptual, and behavioral

consequences (Dick and Basu , 1994).

In the customer centred business, survival remains to the degree that customer satisfaction

is met. Previous research studies have shows that the repurchase intent was the main

benefit of customer retention. However, some had identified multiple benefits like

repurchase intent, price tolerance, willingness to recommend etc. In reaching retention,

vendors should manage satisfaction and consequences of Customer Loyalty (Naranyandas,

1998). Loyalty too has a pyramid effect that suggests of having hierarchy in loyalty levels

between customer and vendor. Change in loyalty level will manifest itself in the pr esence of

specific attitude and behavior (Aaker, 1991).

Customer loyalty and satisfaction are integral part of customer retention process. CustomerRetention is a primary measure of loyalty. There is a positive relationship between changes

in satisfaction and share of wallet. In particular, the initial satisfaction level and the

conditional percentage of change in satisfaction significantly correspond to changes in share

of wallet. Income and length of the relationship negatively moderate this relationshi p (Cooil

et al., 2007). Loyalty and retention although positively moderate with share of wallet it is

necessary to examine the cost of maintaining the particular customer. It is not guaranteed

that every customer retained will generate contribution. Therefore the concept of Customer

Lifetime Value (CLV) plays an important role.

In creating loyalty and thereby CLV, it would be prudent to explore qualities of loyalty. Two

types of primary loyalty qualities had been identified in the previous researches, i.e.Attitudinal Loyalty and Behavioral Loyalty, out of which attitudinal loyalty could be the most

important dimension for marketers to monitor (Rundel Thiele, 2005).


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Rust et al., (1999) discuss the Customer Perceived Quality and Role of Customer

Expectation Distribution. According to them exceeding customer expectation will still be

required if the company seeks to delight customer. In the event of having low expectation of

service quality and meeting it, researchers had found, had raised preference. Given the

option to general customer two equally priced options, the customer will choose the one

with higher expected quality, the research had established. They argued that a company

should always focus on its most loyal customers. Retention point of view, less loyal

customers tendency to defection is grater hence that sector should be defended with force.

This research further suggested greater the experience a customer with a service provider

greater the chances of meeting expectation in perceived value, hence retention.

Services Quality is considered as a major determinant in customer retention and building

value relationship (Venetis and Ghauri, 2004). The quality of the service has various

elements namely; a) Reliability b) Responsiveness c) Assurance d) Empathy e) Tangibles.

as identified by Parasuraman et al.(1985).

According to Lovelock and Wright (2001), marketing managers in service organizations make

decisions regarding 8Ps i.e. Product, Place, Promotion and Education, Price and other user

outlays, Process, Productivity and Quality, People and Physical evidence.

Finally, since this research focused on ICT used by businesses it is appropriate to cite what

business to business (B 2 B) transactions means. Business customers means, those buy

goods and services for use in producing their own products and services or for resale to

others (Kotler and Armstrong, 2005).

The importance of ICT as a strategic tool is a moderating factor in determining the customer

loyalty. The information revolution is sweeping through the economies. No company can

escape from its effects. Dramatic reduction in the cost of obtaining, processing and

transmitting information is changing the way business is done (Porter and Millar, 1985).They have further elaborated that IT changes the rules of competition. Advances in IT itself

is changing the industry structure. It has become an increasingly important lever that

companies can use to create competitive advantage. In addition IT developments have

created a set of new businesses such as call centres and business processing outsourcing.

Relationship Marketing

In competitive business environment where there is an ongoing / continues desire for a

particular product or services , organizations focus their strategies not only on acquiring

customers, but also keeping them as long as possible and encouraging them to increase

purchase frequency by developing lasting relationships Relationship marketing recognizeslong term value to the company of keeping customers.

Berry (1983), defined relationship marketing as attracting, maintaining, and enhancing

customer relationships. He further emphasized that relationship marketing can be

applied: when there are competitive product alternatives for customers to choose from an d

when there is an ongoing and periodic desire for the product or servic es.

In service industry particularly in ICT industry such strategies play a very critical role in

enhancing retention. Attraction of new customers is an intermediate step in marketing


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process. Solidifying relationship and transforming them as loyal customers, serving

customers as clients too should be a part of marketing (Berry, 1983).

Subsequent thinking on relationship marketing further expanded and stressed on

profitability of relationship management. Companies are building customer relationship

management to build profitable, long term relationship (Kotler and Armstrong, 2005). It

implies discouragement to maintain relationship in the event profits are not foreseen.

Relationship marketing in recent past has emerged as a leading strategic element of

business. It has a direct effect on firms objective performance and also suggests that

relationship marketing is more effective when the relationships are more critical to

customers. Furthermore effectiveness is greater when relationships are built with an

individual than a firm/ institution (Robert et al., 2006)

Payne and Holt (2001) dealt in to diagnosing

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