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  • 8/2/2019 adeel, BPSM



    An Assignment for

    Business Policy and Strategy Making


    Yusra Iqba

    Prateek Singh

    Adeel RahmanMolla Asmare

    Jahir Alam

    Shahira Shahir

    Kulsum Siddiqui

    Zoha Fatima

    DeDeDeDepartment of Businesspartment of Businesspartment of Businesspartment of Business AdministrationAdministrationAdministrationAdministration

    Faculty of Management Studies And ResearchFaculty of Management Studies And ResearchFaculty of Management Studies And ResearchFaculty of Management Studies And ResearchAligarh Muslim UniversityAligarh Muslim UniversityAligarh Muslim UniversityAligarh Muslim University

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    Contribution by the Authors is as FollowsContribution by the Authors is as FollowsContribution by the Authors is as FollowsContribution by the Authors is as Follows----

    YYYYusra Iqbal:usra Iqbal:usra Iqbal:usra Iqbal: Introduction, Strategic Environment, GeneralIntroduction, Strategic Environment, GeneralIntroduction, Strategic Environment, GeneralIntroduction, Strategic Environment, General

    Environment,Environment,Environment,Environment, Organisational Appraisal, BalanceOrganisational Appraisal, BalanceOrganisational Appraisal, BalanceOrganisational Appraisal, Balanced Score Card, andd Score Card, andd Score Card, andd Score Card, and

    SWOT Analysis, Continuum of international industry, StrategicSWOT Analysis, Continuum of international industry, StrategicSWOT Analysis, Continuum of international industry, StrategicSWOT Analysis, Continuum of international industry, Strategic

    Group MappingGroup MappingGroup MappingGroup Mapping

    Prateek Singh:Prateek Singh:Prateek Singh:Prateek Singh: CSR, Cooperative Environment, Task Environment,CSR, Cooperative Environment, Task Environment,CSR, Cooperative Environment, Task Environment,CSR, Cooperative Environment, Task Environment,

    SAP,SAP,SAP,SAP, and Competitive Strategyand Competitive Strategyand Competitive Strategyand Competitive Strategy

    Adeel Rahman : Corporate GovernanceAdeel Rahman : Corporate GovernanceAdeel Rahman : Corporate GovernanceAdeel Rahman : Corporate Governance

    Molla Asmare : Four linkage ModelMolla Asmare : Four linkage ModelMolla Asmare : Four linkage ModelMolla Asmare : Four linkage Model

    Zaheer AlaZaheer AlaZaheer AlaZaheer Alam: Finam: Finam: Finam: Financial Ratio interpretationncial Ratio interpretationncial Ratio interpretationncial Ratio interpretation

    Shahira Shahir: Competitor AnalysisShahira Shahir: Competitor AnalysisShahira Shahir: Competitor AnalysisShahira Shahir: Competitor Analysis

    Kulsum Siddiqui: Competitive StrategyKulsum Siddiqui: Competitive StrategyKulsum Siddiqui: Competitive StrategyKulsum Siddiqui: Competitive Strategy

    Zoha Fatima:Zoha Fatima:Zoha Fatima:Zoha Fatima: --------

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    Brief HistoryBrief HistoryBrief HistoryBrief History

    Business DefinitionBusiness DefinitionBusiness DefinitionBusiness Definition

    Vision and MissionVision and MissionVision and MissionVision and Mission

    Corporate GovernanceCorporate GovernanceCorporate GovernanceCorporate Governance

    Corporate Social ResponsibilityCorporate Social ResponsibilityCorporate Social ResponsibilityCorporate Social Responsibility

    StrategicStrategicStrategicStrategic AuditAuditAuditAudit

    Environmental AppraisalEnvironmental AppraisalEnvironmental AppraisalEnvironmental Appraisal

    Organisational AppraisalOrganisational AppraisalOrganisational AppraisalOrganisational Appraisal

    Competitor and CompetitiveCompetitor and CompetitiveCompetitor and CompetitiveCompetitor and Competitive SSSStrategytrategytrategytrategy

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    Brief HistoryBrief HistoryBrief HistoryBrief History

    Reliance Communications was set up as Reliance Infocomm in 1999 and from 2000

    onwards laying of optical fibers started in Maharashtra, Gujarat and Andhra Pradesh.

    Reliance Infocomm was inaugurated in 2002 and first of interconnect (POI) was

    established in New Delhi in same year. Also in that year, Reliance Communications

    commissioned their 1st optic fiber backbone. In 2005, this company launched global

    roaming facility and CDMA services. Reliance Communications was formed in 2006

    and listed in Bombay and National stock exchanges.

    Business DefinitionBusiness DefinitionBusiness DefinitionBusiness Definition

    Reliance Communications Limited is engaged in the business of providing

    telecommunications services. The Company has five segments: Wireless segment

    includes wireless operations of the Company; Broadband segment includes broadband

    operations of the Company; Global segment include national long distance and

    international long distance operations of the Company and the wholesale operations of

    its subsidiaries; Investment segment includes investment activities of the Group

    companies, and Other segment is consists of the customer care activities and direct to

    home (DTH) activities. As of March 31, 2011, the Company had approximately 136

    million wireless subscribers. During the fiscal year ended March 31, 2011, the Company

    launched high definition (HD) set top box (STB). On December 6, 2010, the Company

    acquired Reliance Mobile Commerce Limited. On January 31, 2011, the Company

    acquire Reliance Communications Maharashtra Private Limited.

    Reliance Communications services may be differentiated into consumer service and

    enterprise service.

    Consumer servicesoffered by Reliance Communications include mobile

    service, wireless terminal and phone, Reliance landline, netconnect,

    broadband connection, BlackBerry, and Reliance IPTV

    Enterprise servicesof Reliance Communications comprise audio

    conference, office centrex, video conferencing, internet data center (IDC),

    BlackBerry, broadband services, and public call operator.

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    We will leverage our strengths to execute complex global-scale projects to facilitate

    leading-edge information and communication services affordable to all individual

    consumers and businesses in India. We will offer unparalleled value to create

    customer delight and enhance business productivity. We will also generate value for

    our capabilities beyond Indian borders and enable millions of India's knowledge

    workers to deliver their services globally.


    To attain global best practices and become a world-class communication

    service provider guided by its purpose to move towards greater degree of

    sophistication and maturity.

    To work with vigour, dedication and innovation to achieve excellence inservice quality, reliability, safety and customer care as the ultimate goal.

    To consistently achieve high growth with the highest levels of productivity.

    To be a technology driven, efficient and financially sound organisation.

    To contribute towards community development and nation building. To be a responsible corporate citizen nurturing human values and concern

    for society, the environment and above all, the people.

    To promote a work culture that fosters individual growth, team spirit and

    creativity to overcome challenge and attain goals.

    To encourage ideas, talents and value systems.

    To uphold the guiding principle of trust, integrity and transparency in all aspects

    of interpretation and dealings.

    Corporate GovernanceCorporate GovernanceCorporate GovernanceCorporate Governance

    Organisations, like individuals, depend for their survival, sustenance and growth on

    the support and goodwill of the communities of which they are an integral part, and

    must pay back this generosity in every way they can.

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    This ethical standpoint, derived from the vision of the founder, lies at the heart of the

    CSR philosophy of the Reliance Group.

    At reliance they strongly believe that their primary obligation or duty as corporate

    entities is to their shareholders, they say we are just as mindful of the fact that this

    imperative does not exist in isolation; it is part of a much larger compact which we

    have with our entire body of stakeholders: From employees, customers and vendors

    to business partners, eco-system, local communities, and society at large.

    They evaluate and assess each critical business decision or choice from the point of

    view of diverse stakeholder interest, driven by the need to minimize risk and to pro-

    actively address long-term social, economic and environmental costs and concerns.

    For Reliance, being socially responsible is not an occasional act of charity or that

    one-time token financial contribution to the local school, hospital or environmental

    NGO. It is an ongoing year-round commitment, which is integrated into the very core

    of our business objectives and strategy.

    Reliance Communications Limited has maintained the highest standards of corporate

    governance principles and best practices by adopting the Reliance Group -Corporate Governance Policies and Code of Conduct as is the norm for all

    constituent companies in the group. These Policies and Code prescribe a set of

    systems, processes and principles, which conform to the best international standards

    and are reviewed periodically to ensure their continuing relevance, effectiveness and

    responsiveness to the needs of investors both local and global and all other


    The Companys philosophy on Corporate Governance envisages the attainment of

    the highest levels of transparency, accountability and equity, in all facets of its

    operations and in all interactions with its stakeholders, including shareholders,

    employees, the government, lenders and the society. The Company believes that all

    its operations and actions must serve the underlying goal of enhancing long-term

    shareholder value. In their commitment to practice sound governance principles, they

    are guided by the following core principles:

    1. Transparency

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    To maintain the highest standards of transparency in all aspects of interactions

    and dealings.

    2. Disclosure

    To ensure timely dissemination of all price sensitive information and matters of

    interest to stakeholders.

    3. Empowerment and accountability

    To demonstrate the highest levels of personal accountability and to ensure that

    employees consistently pursue excellence in everything they do.

    4. Compliances

    To comply with all the laws, rules and regulations applicable to the Company.

    5. Ethical conduct

    To conduct the affairs of the Company in an ethical manner.

    6. Stakeholders interest To promote the interests of all stakeholders including

    customers, shareholders, employees, lenders, vendors and the community.

    Governance practices beyond regulatory requirements

    Governance practices go beyond the mere letter of statutory and regulatory

    requirements. With this in mind, there are a number of policy documents and

    following set of governance practices:

    A. Values and commitments

    They have set out and adopted a policy document on values and commitments

    of Reliance Communications. They believe that any business conduct can be

    ethical only when it rests on the nine core values viz; honesty, integrity, respect,

    fairness, purposefulness, trust, responsibility, citizenship and caring.

    B. Code of ethics

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    Policy document on code of ethics demands that employees conduct the

    business with impeccable integrity and by excluding any consideration of

    personal profit or advantage.

    C. Business policies

    Cover a comprehensive range of issues such as fair market practices, insider

    information, financial records and accounting integrity, external communication,

    work ethics, personal conduct, policy on prevention of sexual harassment,

    health, safety, environment and quality.

    D. Separation of the Boards supervisory role from the executive management

    In line with the best global practices, they have adopted the policy of separating

    the Boards supervisory role from the executive management. They have also

    split the posts of Chairman and CEO.

    E. Prohibition of insider trading policy

    There is a policy on prohibiting trading in the equity shares of the Company,

    based on insider or privileged information.

    F. Policy on prevention of sexual harassment

    It aims at promoting a productive work environment and protects individual

    rights against sexual harassment.

    G. Whistle blower policy

    Whistle Blower policy encourages disclosure in good faith of any wrongful

    conduct on a matter of general concern and protects the whistle blower from

    any adverse personnel action.

    H. Environment policy

    The Company is committed to achieving excellence in environmental

    performance, preservation and promotion of clean environment. These are the

    fundamental concern in all business activities.

    I. Risk management

    Ensure that the management controls various business related risks through

    means of a properly defined framework.

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    J. Boardroom practices

    i. Chairman

    In line with the highest global standards of corporate governance, the

    Board has separated the Chairmans role from that of an executive in

    managing day-to-day business affairs.

    ii. Board charter

    The Board of Directors has adopted a comprehensive charter, which sets

    out clear and transparent guidelines on matters relating to the composition

    of the Board, the scope and function of various Board committees etc.

    iii. Board committees

    The Board constituted Audit Committee, Nomination/ Remuneration

    Committee and Shareholders/ Investors Grievances Committee. The

    Board rotates the Chairman of these Committees once in two years.

    iv. Tenure of independent directors

    Tenure of independent directors on the Board of the Company shall not

    exceed nine years, subject to their re-appointment on retirement by

    rotation as per statutory provisions.

    v. Independent directors interaction with shareholders

    Member(s) of the Shareholders / Investors Grievances Committeeinteract with shareholders on their suggestions and queries, if any, which

    are forwarded to the Company Secretary.

    vi. Lead independent director

    Recognizing the need for a representative and spokesperson for the

    independent directors, the Board has appointed an independent director

    as the lead independent director. The lead independent director performs

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    the following roles in addition to the role of a non-executive independent


    preside over all executive sessions of the Boards independent


    work closely with the Chairman to finalized the information flow,

    meeting agenda and meeting schedules;

    liaise between the Chairman and the independent directors on the


    take a lead role along with the Chairman in the Board evaluation


    The position of the lead independent director is rotated.

    vii. Training of Board Members

    The Board members are periodically given formal orientation and training

    with respect to the Companys vision, strategic direction, core values

    including ethics, corporate governance practices, financial matters and

    business operations. The Directors are facilitated to get familiar with the

    Companys functions at the operational levels. Periodic presentations are

    made at the Board and Committee Meetings, on business and

    performance updates of the Company, global business environment,

    business strategy and risks involved. The Board members are also

    provided with the necessary documents/brochures, reports and internal

    policies to enable them to familiarize with the Companys procedures and

    practices. Periodic updates and training programs for Board members are

    also conducted on relevant statutory changes and landmark judicial

    pronouncements encompassing important laws.

    viii. Meeting of independent directors with operating team

    The independent directors of the Company meet in executive sessions

    with the various operating teams as and when they deem necessary.

    These discussions may include topics such as, operating policies and

    procedures, risk management strategies, measures to improve

    efficiencies, performance and compensation, strategic issues for Boardconsideration, flow of

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    information to directors, management progression and succession and

    others as the independent directors may determine. During these

    executive sessions, the independent directors have access to members of

    management and other advisors, as the independent directors may

    determine and deem fit.

    ix. Commitment of directors

    The meeting dates for the entire financial year are scheduled in the

    beginning of the year and an annual calendar of meetings of the Board

    and its committees is circulated to the directors. This enables the directors

    to plan their commitments and facilitates attendance at the meetings of the

    Board and its committees.

    K. Governance practices being followed to promote the interests of our


    Reliance communication has introduced several trend setting governance

    practices to improve stakeholders satisfaction. Some of the major ones among

    them are:

    i. Customers

    They have taken various customer caring initiatives, which give various

    services to subscribers at all times. They also have captive contact centers

    having one of the largest facilities accommodating approx. 9,500 personnel

    on round the clock shift basis. In addition to this, there are various on line

    measures on Reliance World platform which also gives ready access to the

    customers. Customers can view and pay their bills online and manage their

    account information online.

    ii. Employees

    They are committed in making Reliance Communications a Great Place to

    Work and hence the pursuit has been to drive Employee Engagement

    through multiple platforms, events and extensive Employee communications

    involving employees and their families. This is aimed at increasing the

    Happiness Quotient of employees, employee retention, employeeengagement score, thereby leading to higher productivity, better quality of

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    products and services and thus creating Happy Customers. Continuous effort

    has been in re-engineering Organization Design work flows and processes,

    enhanced automation, enabling to evolve into an efficient, productive and

    agile organization. In the hyper competitive market scenario, it is imperative

    that there is not only surpassing of Annual targets, but also outperformance

    of competition. They have introduced Incremental Revenue Market Share

    (iRMS) as a critical measure for rewarding individual and team

    achievements, thereby, institutionalizing an objective and transparent, high-

    performing culture. This, in conjunction with quarterly performance

    assessment and payouts, has helped to build a healthy employee stake in

    the Business, align employees completely with Business goals and enable

    them to get immediate rewards. They are relentlessly driving capability,

    leadership and culture building and acquiring, developing and retaining

    talent. The leadership development process is aligned to the Reliance DNA,

    which identifies high potential talent on a periodic basis and provides

    necessary learning interventions to help them take on larger responsibilities

    and roles.

    iii. ShareholdersThe Company recognizes the importance of two way communication with

    shareholders and of giving a balanced report of results and progress and

    responds to questions and issues raised in a timely and consistent manner.

    To ensure this, the Companys corporate website; has

    information for institutional and retail shareholders alike. Shareholders

    seeking information may contact the Company directly throughout the year.

    They also have an opportunity to ask questions in person at the AnnualGeneral Meeting. Shareholders can contact RCOM via dedicated

    shareholders contact points as provided in this report or through any of

    Investor Service Centers of the Companys Registrars and Transfer Agents

    spread in more than 84 cities across India, details of which are available on

    the Companys website.

    iv. Lenders

    The Company has been prompt in honoring all debt obligations to its lenders.

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    v. Society

    The Company, in keeping with its Corporate Social Responsibility policy, focuses on

    healthcare, education, and other social initiatives.

    L. Role of the Company Secretary in Governance Process

    The Company Secretary plays a key role in ensuring that the Board

    procedures are followed and regularly reviewed. The Company Secretary

    ensures that all relevant information, details and documents are made

    available to the directors and senior management for effective decision

    making at the meetings. The Company Secretary is primarily responsible to

    ensure compliance with applicable statutory requirements and is the

    interface between the management and regulatory authorities for

    governance matters. All the Directors of the Company have access to the

    advice and services of the Company Secretary.

    Corporate Social Responsibility undertaken by

    reliance communications

    Trust / Foundation for CSR No

    CSR Areas

    1. Children

    2. Education

    3. Healthcare

    Three main CSR activities

    1. Education

    2. Children

    3. Healthcare

    Publish Sustainability Report No

    Member of Global Compact No

    CSR activities in brief

    Social Commitment

    they have undertaken several important initiatives

    and measures in the area

    of education and healthcare, signifying our

    continued and long-standing

    commitment to social and community welfare.

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    Instances of social responsibilitiesInstances of social responsibilitiesInstances of social responsibilitiesInstances of social responsibilities

    Plants over 500 samplings in Bangalore University Campus aspart of its CSR initiative

    Reliance Communications, Indias largest and only telecom service provider to

    offer nationwide GSM and CDMA services as part of its Corporate Social

    Responsibility program today launched Vriksha Abhiyan a tree planting

    initiative in Bangalore. As part of this initiative, over 500 samplings were

    planted in the premises of The Bangalore University Campus at Gnana

    Bharathi in Kengeri. The saplings that were planted include Simarouba(Lakshmi Taru), Neem and Honge (Pongamia Pinnata)

    The RCOM Vriksha Abhiyan was inaugurated by the Guest of Honour,

    Rashmi the Cine Star from the popular movie Duniya. Over 200 RCOM

    employees and their families participated in this program.

    In a statement release to press on the occasion Mr. Rupak Agarwal,

    Karnataka Circle Head Reliance communications said We are delighted to

    spend quality time on a noble initiative like tree planting which is essential in

    todays context. We are committed to conserving the environment in and

    around us with many more such initiatives. He added

    Reliance Communications as part of its CSR (Corporate Social Responsibility)

    has undertaken such programs in Himachal Pradesh and Kerala. Besides this,

    Harmony for Silvers is yet another significant initiative which conducts

    programs such as Senior citizens run etc.

    RCOM Partners With SNDT Women's University

    To jointly promote education among challenged children

    To create resource hub

    Sponsors Tarang 2010

    First ever initiative in Mumbai

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    As part of its ongoing Reliance Anil Dhirubhai Group CSR initiatives, Reliance

    Communications has partnered with S.N.D.T Women's University, Mumbai for

    creating a resource hub aimed at promoting education among physically and

    mentally challenged children. To this end, the two are jointly organizing Tarang

    2010 at SNDT campus in Juhu, Mumbai on February 11, 2010. More than 30

    organizations which are directly involved with the special needs of these hapless

    children have been invited to this major event. This will be the first time in

    Mumbai that such an event is being planned.

    Taranga 2010 was a curtain raiser endeavoring to increase sensitivity of the

    society toward children with special needs, promote Special Education as a

    career option among the youth, sensitize teachers in normal schools about

    children with special needs and accelerate the pace of inclusive education and

    enhance the knowledge base about the subject among the experts and develop

    viable tools and strategies to help such children. Providing the technical inputs

    on the subject as well as necessary tools to create the platform for the

    knowledge sharing i.e. helplines etc.We is sure that our joint efforts will benefit

    thousands of physically and mentally challenged children and inspire other

    organizations to contribute their best

    Tarang 2010 was attended by most of the renowned special schools in Mumbai

    and Navi Mumbai. Over 1500 visitors comprising parents, teachers, policy

    makers, students, parents of special students, special educators, decision

    makers and other important people will grace the event. Educational and therapy

    equipment companies, book distributors /book publishers and pharmaceutical

    companies will display their products and services.

    The national education policy is laying emphasis on inclusive education

    wherein children with special needs have to be integrated into the mainstream

    educational system. Efforts are being made to benefit a large majority of such

    children from the Tarang initiative.

    There is a special fair being organized as the first of a series of events. This fair

    will provide a platform where all the stake holders relating to disabilities/ Special

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    Education can come together and share their opportunity/skill sets. It will also

    create awareness about the scope of Special Education as a career option.

    Around 450 special children from various special schools across Mumbai will be

    competing in various events like singing, dancing, painting etc. This event will

    give differently-enabled children an opportunity, to mingle with children with

    different disabilities.

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    Environmental APPRAISAL

    Strategic Environment

    Market Definition and size

    Today, there are more than 225 million telecom subscribers in India. Every month, 6-

    7 million new subscribers are added. Upcoming services such as 3G and WiMax will

    help to further augment the growth rate.

    Furthermore, the Indian economy is slated to sustain its 7-9 per cent growth rate in

    the near future. This is supported by the political stability that the country is

    experiencing currently. Indias demographic outlook makes it one of the largest

    markets in the world. A conducive business environment is also created by a

    favourable regulatory regime.

    There exists enormous business potential for telecom companies on account of the

    countrys low teledensity, which is close to 19 per cent presently. The Indian telecom

    industry is growing at the fastest pace in the world and India is projected to be the

    second largest telecom market globally by 2010.

    Snapshot for the Indian telecom industry for the quarter

    ended March 2011:

    Data as on 31st March 2011

    Telecom Subscribers (Wireless +Wireline)

    Total Subscribers 846.32 Million

    per cent change over the previous quarter 7.50 per cent

    Urban Subscribers 564.08 Million (66.65 per cent)

    Rural Subscribers 282.23 Million (33.35 per cent)

    Market share of Private Operators 85.11 per cent

    Market share of PSU Operators 14.89 per cent

    Teledensity 70.89

    Urban Teledensity 157.32

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    Rural Teledensity 33.79

    Wireless Subscribers

    Total Wireless Subscribers 811.59 Million

    per cent change over the previous quarter 7.90 per cent

    Urban Subscribers 538.05 Million (66.30 per cent)

    Rural Subscribers 273.54 Million (33.70 per cent)

    GSM Subscribers 698.37 Million (86.05 per cent)

    CDMA Subscribers 113.22 Million (13.95 per cent)

    Market share of Private Operators 88.01 per cent

    Market share of PSU Operators 11.99 per cent

    Teledensity 67.98

    Urban Teledensity 150.06

    Rural Teledensity 32.75

    Wireline Subscribers

    Total Wireline Subscribers 34.73 miillion

    per cent change over the previous quarter -1.03 per cent

    Urban Subscribers 26.04 Million (74.97 per cent)

    Rural Subscribers 8.69 Million (25.03 per cent)

    Market share of Private Operators 17.39 per cent

    Market share of PSU Operators 82.61 per cent

    Teledensity 2.91

    Urban Teledensity 7.26

    Rural Teledensity 1.04

    Village Public Telephones (VPT) 0.58 Million

    Public Call Office (PCO) 3.33 Million

    Internet & Broadband Subscribers

    Total Internet Subscribers 19.67 Million

    per cent change over the previous quarter 5.29 per cent

    Broadband Subscribers 11.89 Million

    Telecom Financial Data (for the QE Mar-11)

    Gross Revenue during the quarter US$ 9,816.68 Million

    per cent change in GR over the previousquarter

    6.05 per cent

    Share of Public sector undertaking's inGR

    18.00 per cent

    Adjusted Gross Revenue (AGR) US$ 6,787.64 Million

    per cent change in AGR over the previous 5.16 per cent

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    ARPU for Access Services Rs 100

    Market Growth

    The opening of the telecom sector to the foreign investors has not only led to rapid

    growth in subscriber base but also helped a great deal towards maximization of

    consumer benefits, particularly in terms of price discovery following the moderate

    approach in tariffs. The success of the Indian telecommunications sector has

    become the cynosure of the world and has made the country a truly attractive

    investment destination.Presently India has one of the lowest tariffs and one of the

    fastest growing teIecom markets in the world.

    Exports of telecom has also increased from US$ 2.36 billion in 2008-09 to US$ 2.89

    billion during 2009-10 and is expected to increase to US$ 3 billion in 2010-11.

    The number of telephone subscribers in India increased from 787.3 million

    in Dec 2010 to 846.3 million at the end of March 2011, registering a

    sequential growth of 7.5 per cent over the previous quarter as against 8.8

    per cent during the quarter ending December 2010. This reflects year-on-

    year (Y-O-Y) growth of 36.2 per cent over the same quarter of last year.

    The overall Teledensity in India has reached 70.9 as on 31st March 2011.

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    Subscription in urban areas grew from 527.5 million at the end of Dec-10

    to 564.1 million at the end of March 2011, taking the urban teledensity from

    147.9 to 157.3. Rural subscription increased from 259.8 million to 282.2

    million, and the rural teledensity increased from 31.2 to 33.8. The share ofrural subscribers has increased to 33.3 per cent in total subscription from

    33 per cent at the end of December 2010.

    About 61.9 per cent of the total net additions have been in urban areas as

    compared to 63.2 per cent in the previous quarter. Rural subscription

    recorded a decline in rate of growth during the quarter. It declined from 9.9

    per cent in December 2010 to 8.6 per cent in quarter ending March 2011.

    Rate of growth for urban subscription also declined from 8.3 per cent in

    quarter ending December 2010 to 6.9 per cent in quarter ending March


    With 59.4 million net additions during the quarter, total wireless

    (GSM+CDMA) subscriber base registered a growth of 7.9 per cent over the

    previous quarter and increased from 752.2 million at the end of December

    2010 to 811.6 million at the end of March 2011. The year-on-year (Y-O-Y)

    growth over the same quarter of last year is 38.9 per cent. Wireless

    teledensity increased from 63.2 to 67.9.

    Wireline subscriber base further declined from 35.1 million at the end of

    December 10 to 34.7 million at the end of March 2011, bringing down the

    wireline teledensity from 2.9 at the end of December 2010 to 2.9 at the end

    of March 2011.

    Internet subscribers increased from 18.7 million at the end of December

    2010 to 19.7 million at the end of March 2011, registering a quarterly

    growth rate of 5.3 per cent. Top 10 ISPs together hold 94.8 per cent of the

    total Internet subscriber base.

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    Number of Broadband subscribers increased from 10.9 million at the end

    of December 2010 to 11.9 million at the end of March 2011, registering a

    quarterly growth of 8.2 per cent and Y-O-Y growth of 35.5 per cent.

    Share of Broadband subscription in total Internet subscription increased

    from 58.8 per cent in December 2010 to 60.4 per cent in March 2011. 86.1

    per cent of the Broadband subscribers are using Digital Subscriber Line

    (DSL) technology.

    Gross Revenue (GR) and Adjusted Gross Revenue (AGR) of Telecom

    Sector for the quarter ending March 2011 has been US$ 9.77 billion and

    US$ 6.76 billion respectively. There has been an increase of 6.1 per cent

    and 5.2 per cent in GR and AGR respectively as compared to previous

    quarter. The year on year (Y-O-Y) growth in GR and ARG over the same

    quarter in last year has been 13 per cent and 9.2 per cent respectively.

    Pass-through charges accounted for 30.8 per cent of the GR for the

    quarter ending March 2011. The quarterly and the year-on-year (Y-O-Y)

    growth rates of pass-through charges for quarter ending March 2011 are

    8.1 per cent and 22.8 per cent respectively.

    Market Share

    The market share of Reliance Communications has been seen to be declining. The

    Revenue in 2009 stood at 19,234.79. In 2010 it dropped to 16009.77 crore and in

    2011 a further drop made it stand at 12614.02 crore at the close of the previous

    financial year.

    Assessing the Dynamics of the Environment

    Turbulence Level


    Complexity 2

    Familiarity of 3

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    General Environment


    Political FutureThe Ambani image has taken a beating. They are known for their political

    connections, but these connections have cost their reputation, brand name and

    investor confidence.

    Legal Future

    The Comptroller and Auditor General found that the 2G spectrum allocation had

    caused a loss of 01.76 lakh crore to the government. One plank of the Central

    Bureau of Investigations (CBIs) criminal conspiracy charge in the 2G scam is that

    Swan Telecom, was used as a front company by Reliance Telecom, a unit of

    Reliance Communication Ltd, to illegally apply for telecom licences in 2007

    A sum of 900 crore issued by Reliance Communications in favour of Swan Telecom

    has been identified. This could spell serious trouble for the Reliance communication

    Chairman and other bigwigs of the company

    Sociocultural Future

    The company in order to better its image has initiated ventures in a variety of social

    development programmes related to education and particularly e learning of English

    language by the masses.




    Rapidity of


    Visibility ofFutute


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    Sincce the 11th five year plan talks about inclusive growth from every direction, the

    social initiatives may benefit Reliance to a certain extent.

    Reliance Group is running a programme called Tarang for the mentally challenged

    children and it has been quite a success.

    Also, Reliance Communication was the first company in India to issue bills in braille

    for visually impaired customers.

    Economic futureWeak finances, persistently high inflation and policy inertia have considerably

    weakened the Indian government's position today.

    India weathered the 2008 crisis well, but there are fears that this time round the

    country is not even ready for a crisis of much lesser magnitude, let alone a full-blown

    debt default in Europe or a possible US recession.

    Morever the inflation has pushed up the intrest rates and exchange rates too are

    quite high. The inflation has driven prices to the roof and in such times consumer

    does not have much disposable income to spend on communication

    Technological Future

    The technology being employed by Reliance Communication at present is current.

    The company has come in the 3G spectrum and moved into a host of other interne

    related products and services like wireless, telecom infrastructure, Globalcom and

    DTH and IPTV etc and other Tech services by leveraging internal IT development


    Environment Future

    Although Reliance Group has made endeavours for energy management systems

    and in the field of energy use and environment conservation but as such Reliance

    Communication is not involved in any environment campaigns.

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    Task Environment

    Porters Five Forces Model

    Threat from new entrants.

    Reliance Communications (RCom) President-Wireless, S P Shukla, said

    existing players had the crucial time-advantage, as new entrants would take

    time to build a quality network and infrastructure.


    1.Ease in distribution and quality service-the new entrants would have to operate

    on the less-efficient 1,800 MHz spectrum, compared with 900 MHz used by existing

    players. This would hamper their efforts to provide quality services, while

    existing players were already providing 2.5 G services using 900 MHz

    spectrum, Bharti Airtel, RCom, Vodafone-Essar and state-owned BSNL and

    MTNL are the existing players.

    2.Brand loyaltyAs many as six new licencees, including Unitech Wireless,

    Shyam Sistema, Loop Telecom, Etisalat DB Telecom India and S-Tel are

    planning to launch services. Aircel, which started operations in 1999, is also

    considered a new player, as it had got additional licences. so the people are

    not so much aware of such companies and they would continue to stick to the

    brand which they have been getting the services.

    3.Strong Capital baseCDMA majors like Tata Teleservices Ltd (under the

    Tata DoCoMo brand) and RCom have rolled out GSM services and existing

    players like Idea Cellular are expanding operations.

    4.Economies of scaleWhile competition for the new operators is tough, it

    will not affect existing players, as consumers always move towards a multi-

    device lifestyle, and the appetite for content and communication is growing.

    And existing service providers were well placed to provide this, said Media

    Tek India Technologys director, business development, Arun Gupta.

    Bargaining Power of customer

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    Mobile Number Portability has brought a big solution to those aiming to

    change their service provider but to keeping the same no was the main issue

    especially for the businessman , it isnt necessary that the same trend may

    carry over to the rest of the country as some local factors could influence it,

    but the numbers are worth looking at.

    We have a little table which reflected the percentage of dropped calls that

    subscribers faced across various operators. It stated that Reliance and Loop

    faced the highest percentage of dropped calls. The latest article has actual

    operator specific numbers(As of January 16th) -

    Reliance GSM and CDMA combined lost over 13,500 subscribers

    Bargaining Power of Suppliers

    The current network expansion undertaken by Reliance is the largest wireless

    network expansion undertaken by any operator across the world.Under the

    agreement, Huawei will supply and provide services for CDMA & GSM base

    stations, including BSC (Base Station Controller) and switches, and help to

    create first class all-IP Next Generation Network infrastructure. The

    technology provided by Huawei is expected to bring down Reliance

    Communications' total cost of ownership (TCO) by enabling a significantly

    faster and more cost-effective expansion of existing CDMA & GSM network

    services. It will also enhance the company's competitive advantage in

    attracting new subscribers

    RCom already operates a GSM network, and though clever use of CDMA

    licenses has become the country's largest CDMA operator. The company's

    CDMA network has been engaged in a sharp price war with the GSM

    operators, and it is presumed will seek to undercut the GSM service when its

    national network is ready. According to figures from the Mobile World, RCom

    had some 31.3 million CDMA subscribers at the end of September along with

    5 million GSM customers.The contract will play a significant role in Reliance

    Communications' planned roll out of its pan-India CDMA and GSM network

    expansion, that seeks to extend its next generation, integrated (wireless and

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    wire-line) convergent (voice, data and video) digital network to over 20,000

    towns and 600,000 villages creating India's largest telecom network.

    Competitor in themarketExtent of exit barriers- there is no way to exit, as this business requires huge

    investment and reliance is one among those who has such a huge paid up

    capital to take risk associated in the telecom sector where scenario is quite

    versatile and company requires huge capital back up to stand against those


    Amount of fixed cost

    fixed cost is quite high and when all 9 telecom sector went for 3G auction.

    All 9 telecom firms qualify for 3G auction. Though the government had fixed a

    reserve prices of Rs. 3,500 crore for all-India 3G spectrum, the bid could be

    much higher as the number of operators in the fray outweighs the number of

    slots available.The government could garner at least about Rs. 20,000 crore, if

    one takes into account only the reserve price.

    Competitive structure of industry

    As we move into the next round of our success journey, we shall aggressively

    expand our GSM network and CDMA mobile broadband network. We shall be

    having a renewed focus on customer-centric innovations and enhancing the

    overall Customer Experience.

    We rolled out CDMA mobile broadband network offering Internet speed up to

    3.1Mbps in 62 cities, and will add another 63 cities within the next 100 days,

    taking the total number of cities covered to 125 offering Reliance Netconnect

    Broadband+ service. Our market leadership in the CDMA space combined

    with our recent entry into pan-India GSM service gives us an opportunity to

    aggressively pursue revenue growth. As the company move into the new

    fiscal year, we continue to see some select tariff changes from the competition

    in the industry. The industry continues to remain challenging with

    hypercompetition, saddled with high customer acquisition costs with exuberant

    trade schemes in the mobile industry, and is expected to continue for few

    more quarters. A major shift seems to be happening on the use of multipleSIM phones as its popularity continues to rise rapidly. As the cult of multiple

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    SIMs grows, some of the prevalent per user KPIs like ARPU, MoU/Sub etc.

    are getting relatively less relevant in the industry.

    Threat to new substitute

    Various new schemes makes things possible for public to look for substitute

    and alternatives in terms of plans and switching to other service provider.

    for ex-Reliance SMART GSM service, during its relaunching in Kolkata offered

    all local calls @ 35p/min for 6months and got a huge response, though after

    using 6months most of subscribers are back to their previous operator.

    Docomos per second pulse offer doesnt make most of my friends excited.

    New GSM operators are unable to offer a robust network at first, and as

    subscriber base increases, you will face more problems as seen with Aircel &

    Reliance GSM!!

    another instance, Online marketing Tata Docomo doing the job better than

    even Virgin Mobile !! They are present on Orkut, Facebook, Bigadda, Twitter

    and different telecom based forums. NO COMPETITION from other operators

    in this from different value added services we can see options

    available to the public.

    Co-operative Environment

    Anil Ambani-promoted Reliance Communications (RCom), the country's

    second-largest mobile phone company by customers, is in advanced talks to

    ink a near $1.5-billion, multi-vendor managed services outsourcing deal with a

    clutch of telecom gearmakers such as China's ZTE, Huawei and Sweden's

    Ericsson, For the first time, the Anil Ambani flagship is looking to hand over

    operations, planning, maintenance and management of its country-wide

    CDMA and GSM networks to a cluster of vendors as opposed to a single

    entity.RCom's mobile networks have for the past three years been managed

    by Alcatel Lucent Managed Solutions - a 67:33 JV between Alcatel Lucent and

    RCom. The contract is an annualised one and is slated to come up for renewal


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    Over the years, since RCom's networks have become more complex,

    involving cross-vendor technologies and equipment, especially, after the

    company won third generation, or 3G, airwaves, it is actively considering

    migration to a multi-vendor, multi-year managed services execution model, an

    executive directly aware of the development.

    "Talks are on with some of the biggest global telecoms gear makers since the

    objective is to scale up the quality of network management operations by

    several notches to enhance the quality of services," said another executive,

    who did not wish to be named.

    Outsourcing key operational functions, a concept pioneered by Bharti Airtel,

    has been the low-cost, high-volume business model employed by most mobile

    phone companies in India. The networks of all leading mobile phone firms in

    the country - Bharti Airtel, Vodafone, Tata Tele, reliance comm. and Idea - are

    being managed by either Ericsson, Finland-based Nokia Siemens, Alcatel-

    Lucent or Chinese players such as Huawei and ZTE.

    Even new entrants such as Unitech Wireless (Uninor), Loop and Sistema-

    Shyam have outsourced the management and maintenance of their networks

    to foreign vendors.

    RCom executives declined to respond to ET's specific email query on whether

    Alcatel-Lucent will be compensated if the company's managed network

    services contract is not renewed. They also did not Reliance Communications

    ties up with Cisco to launch Business Internet Services for SMEs in Pune

    Reliance Communications Bundled Offering aimed at promoting IT adoptionby Small and Medium Enterprises

    Ties up with Cisco to offer single window IT solutions for SMEs and reduce

    entry costs

    Offerings do not require any capital expenditure

    Available anywhere, everywhere in Pune City through Wireless Broadband


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    Reliance Communications, India's largest integrated telecom service provider and

    Cisco Systems, the worldwide leader in networking have joined hands to launch

    Reliance Business Internet Servicesfor Small and Medium Enterprises in Pune. The

    launch of Reliance Business Internet Services, enabled by the state-of-the-art

    Wireless Broadband Network recently deployed by the company, is a composite

    bundled suite aimed at fuelling IT adoption by SMEs by considerably reducing the

    high entry costs.

    As part of an ambitious project to create an overarching digital infrastructure,

    RelCom initiated development of an optic fiber network covering 116,000 km and

    providing revolutionary data, video and value-added services across 640,000

    villages, 2,500 towns and cities of India.

    The mammoth and complex project required a highly robust supply chain. Other

    concerns being faced in creating the distribution network were:

    No existing System Highly scalable supply chain needed to meet the peaks in market

    demandSystem to handle 2000 concurrent users across 37 Regional warehouses,

    110 City Distribution Centers and over 2000 POSSerial No. Tracking of handsets

    required - from OEM to end customer

    Business processes not fully defined extensible system required to swiftly map

    new processes Macro management & micro information requirements

    extensive MIS reporting. To meet the requirement in short span of time,

    eBizNET helped RelCom in developing and deploying an IT solution for the

    extended supply chain from OEMs in Korea to the end customer Meeting Market

    Demands with Robust Distribution Solution for Reliance CommunicationsAccelerated

    Business Growth with eBizNET - WMS Solution for Alpha Comm Enterprises, Inc TM



    Leveraging domain expertise in supply chain and distribution network, eBizNET

    conceptualized, developed and implemented a distribution solution within a

    record time of 50 days. The highly scalable and robust solution carried

    multicompany, multi-site and multi-user capability and was preferred over SAP WM

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    other Tier 1 systems. A full functionality WMS with PDT support and ability to

    handle complex reverse logistics was incorporated in the solution.

    Status information was available on every handset from the time it left OEM till it

    reached a customer. An Interface Manager was built to integrate with various Host

    comment on whether RCom would exit the Alcatel-Lucent JV in case the company

    opts for a new set of global vendors.

    "RCom continually explores all options to improve its network and services, in

    keeping with globally evolving technologies and standards, through our own

    capacities or through partnerships with leading global vendors. Any new partnership

    demonstrates this business ethic as well as our ongoing growth in the Indian market.

    It is independent of our existing business partnerships," an RCom spokesman said in

    a written response to ET's email query.

    Though specific deal details are not available, two people familiar with the talks said

    the multi-year managed services contract could be benchmarked at roughly $20

    million a year, per circle. "The final size of a multi-vendor managed services deal of

    this scale could exceed billion dollars by a long shot since it will involve a long-term

    tenure," said one of the executives quoted above.

    The latest discussions come barely three months after RCom lost two frontline

    executives in charge of networks, Arun Sur and Jagbir Singh, to ZTE and Bharti

    Airtel, respectively.

    systems SAP, Selectica & Clarify along with standard interfaces made

    available for data exchange with host systems.

    Ranked among top 3 out of 22 systems being utilized at RelCom, the highly

    user configurable, scalable and extensible solution covered Pre-Airport

    Operations, Airport Receipt & Dispatch to Warehouse, Warehouse

    Management, Reports & Performance Monitoring, Track and Trace with POD,

    POS Order Management and Channel Inventory Status as part of solution

    scope. As post implementation, over 250 executives were trained in a short

    span of 2 weeks and a 24x7 help desk was setup for providing continued

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    solution support. Global view of inventory, sales and receivables across the

    distribution network enabling better access and control on the supply chain

    Extensive reporting capabilities and performance monitoring

    Ability to trace individual handset anywhere in the distribution networkSeamless integration of supply chain headquarter with all host systems

    High operational efficiency

    After the implementation of eBizNET Distribution Solution, RelCom

    launched Reliance IndiaMobile Services and created history by signing up

    over 1 million subscribers in just 10 weeks of launch from 111 cities thus

    capturing nearly 60% of the incremental post-paid market or 25% of the total

    postpaid segment.

    Later, the customer base further increased to 6 million in the span of 10

    months post launch. which helped reliance communication to achieve

    economies of scale and to come up with tools and products in market at the

    right time.

    Analysing The Cooperative EnvironmentAnalysing The Cooperative EnvironmentAnalysing The Cooperative EnvironmentAnalysing The Cooperative Environment

    Four Links Model

    A.Formal cooperative links

    Formal cooperative linkages can take many business forms but are usually

    bounded together by some form of legal contract And some of those legal

    forms of collaboration of RCOM with other companies are listed below.

    Rcom-radio Netherlands worldwide deal: Reliance communication

    (Rcom) had signed an agreement with broadcast company radio

    Netherlands worldwide. Under the agreement, Rworld ,the mobile portal

    from Rcom, would offer 24/7 live streaming of radio Netherlands worldwide

    and will show case its RNW WAp news feed on R world, which includes

    regularly updated international news.

    (Source: Business Standard Date: 18.02.2011 Edition: New Delhi Page No. :


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    Reliance Communications signs strategic alliance with GetJar to

    create Indias largest and free mobile Apps Store; MUMBAI, INDIA

    APRIL 27, 2010 Reliance Communications (BSE: RCOM), Indias largest

    and only telecom operator offering nationwide CDMA and GSM mobile

    services, and GetJar, the worlds second largest app store announced today

    a strategic alliance between the two companies. According to this alliance,

    GetJar will offer Reliance Communications its extensive catalog of over

    65,000 free mobile applications. Reliance Communications over 100 million

    subscribers will gain immediate access to GetJars massive library of

    applications via a GetJar apps store through RCOMs VAS platform R-

    World. GetJar will also enable RCOM to offer its Apps Store to a large

    bandwidth of mobile handsets across multiple brands and not remain

    restricted to a few high-end smartphones. Reliance Communications will

    offer the GetJar Apps Store across GSM and CDMA networks.

    As the worlds largest independent app store, GetJar is the most cost

    effective, easy and scalable distribution channel RCOM will be able to

    leverage in order to generate traffic to its network. With over 300% growth

    year-on-year, GetJar averages nearly two million downloads per dayglobally. In India where mobile phones have become an important part of

    everyones livelihood the country is adding more mobile phone subscribers

    each month than any other.

    We wanted to partner with the largest, most experienced, open application

    catalog provider to address virtually any device being used by our

    customers, said Mr. Anil Pande, Head VAS, Reliance Communications,

    Our partnership with GetJar means that all Reliance Communications

    customers will instantly have access to thousands of applications ranging

    from games, shopping and lifestyle applications to sports, entertainment and

    productivity applications.

    Our agreement with Reliance Communications allows it to immediately

    connect its customers with over 65,000 free applications with very little

    effort, said Ilja Laurs, founder and CEO of GetJar. It made a great deal ofsense to partner with Indias largest integrated communication service

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    provider as GetJar is also the fourth most visited mobile site in India. We are

    very excited to offer our catalog of free applications through Reliance

    Communications R-World platform.

    Reliance Communications customers will have access to thousands of

    applications ranging from games, social networking, sports, entertainment

    and productivity applications. Popular apps such as Facebook Mobile,

    Yahoo!, Fandango and eBuddy can be easily downloaded to over 2300

    handsets across all major platforms. RCOM will offer the service at 50 paise

    per MB of usage. The application download and use by itself will be free of


    The GetJar alliance is part of RCOMs strategy to offer a comprehensive

    Apps Store service that will include its white-field Apps store RWorld2.0 and

    GetJars third party service offering over 65,000 mobile applications in all.

    RCOM application store strategy is directly linked to increase in data traffic,

    increase in data plan adoption and sale of other services through the use of

    free applications. The enabler of enhanced data usage is possible when a

    key element is given away for free. The free applications in RCOMs Apps

    Store strategy will help achieve mass mobile data plan adoption and mobile

    internet use. This will be the immediate upside to its strategic alliance with


    Following the alliance with GetJar, Reliance Communications joins a list of

    leading global companies using GetJars flexible, open app store approach

    including Sprint, Sony Ericsson, 3UK, The Carphone Warehouse and VirginMobile France.

    RCOM & Nokia join hands for a first-of-its-kind multi-faceted

    business partnership: Reliance communications Indias largest integrated

    telecom operator and Nokia India today jointly announced a first-of-its-kind multi-

    faceted business alliance. The RCOM Nokia alliance will aim to foster greater use

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    of mobile services, giving consumers an opportunity to get richer experiences and

    do more with their phones.

    The RCOMNokia partnership is structured on a one-of-its-kind blue-print to

    engage with the Indian consumes to offer an array of unmatched & innovative

    mobile, data and services offerings in India.

    The business partnership with Nokia is in line with the multitude of innovations

    lined-up by the two companies to take mobility to the next level. The alliance covers

    1. Making available Ovi Life Tools services targeted at the rural and semi-urban segments for

    Reliance customers

    2. Exclusive offers on Ovi Music Unlimited (OMU) devices including Nokia 5530, Nokia

    5800, Nokia X6 16 GB, Nokia X6 8 GB and Nokia 5235 for faster music downloads

    * An exclusive offer on Reliance Netconnect Broadband + USB Datacards on the purchase of


    3. Special data packages for Nokia GPRS phones (other than OMU-enabled devices).

    Ovi Life Tools, a range of innovative and personalized services covering

    Agriculture, Education and Entertainment targeted at both urban and rural

    consumers will be an integral component of this RCOM & Nokia alliance. The two

    companies will jointly create an enabling environment to address the information

    gaps in rural & semi-urban India by making available Ovi Life Tools for Reliance


    Reliance will offer Ovi Life Tools services in two versions, Subscription and Pay

    per Use. While the Subscription Service for education and entertainment services

    will be offered at Rs.30/Month and the agriculture service at Rs.60/Month. The Pay-

    per-Use will be priced at Rs.3/Request.

    Mobile Music has become increasingly popular among the Indian consumers.

    According to some estimates close to 40% young people prefer to listen to music on

    their mobile phones. To make it easier for consumers, RCOM GSM customers can

    download music upto 12GB data usage (approximately 2400 songs) from Nokias

    breakthrough music service Ovi Music Unlimited (OMU) using Nokias OMU-

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    enabled phones including Nokia 5530, Nokia 5800, Nokia X6 16 GB, Nokia X6 8

    GB and Nokia 5235. Consumers can also purchase Reliance Netconnect

    Broadband+ Datacards at an exclusive price of Rs. 1999/- along with the purchase

    of Nokia OMU-enabled devices.

    As part of this alliance, RCOM is also offering mobile data bundle of 1.2GB on

    Nokia GPRS enabled handsets (other than the OMU-enabled phones). In addition,

    RCOM is offering up to 1800 free on-net minutes bundled with Nokia 1800. These

    free voice minutes and mobile data bundles has a validity of six months.

    B.Collaboration link with complementors

    Reliance Communications and Polycom Forge Partnership To Jointly Drive

    Market Opportunities in India: Mumbai - March 17, 2010: Reliance

    Communications (BSE: RCOM), Indias largest and only telecom operator offering

    nationwide CDMA and GSM mobile services, has forged a partnership with Polycom

    Inc. (Nasdaq: PLCM), the global leader in tele-presence, video and voice solutions,

    to introduce world's first wireless, high-resolution video conferencing service. The

    service will be marketed through Reliance ADA Group's retail arm, RelianceWebstore Limited.

    Bundling the easy-to-use Polycom QDX 6000 video conferencing system with

    dedicated VPN connectivity through the Reliance Netconnect Broadband+ wireless

    broadband data card, the service significantly lowers the price barrier to adopting

    video conferencing and is expected to be a mass enabler of video conferencing

    usage across multiple industry verticals inIndia.

    The jointly developed offering will extend affordable, plug-and-play video

    conferencing to organizations of all sizes, enabling them to realize immediate

    productivity and efficiency benefits from real-time, face-to-face visual communication.

    Besides small and medium enterprises (SMEs), education, event management,

    media & entertainment, and hospitality are among the sectors likely to take

    advantage of the flexible and affordable video conferencing service developed by

    Reliance and Polycom.

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    Reliance Webstore Limited already offers wired video conferencing services to over

    1500 corporate clients through its network of over 200 video conference suites at

    Reliance World stores across the country.

    Commenting on its partnership with Polycom, Mr Sarup Chowdhary, Director & CEO,

    Reliance Webstore Limited said, Reliance World operates the world's largest

    network of video conferencing suites. Through our alliance with Polycom, we are

    making video conferencing a simple plug-and-play operation that can be deployed

    and used virtually anytime, anywhere.

    The Polycom QDX 6000 video conferencing system delivers high-resolution video

    and CD-quality audio, along with simple-to-use content sharing capabilities even at

    a bandwidth of 256 kbps. Customers of the wireless video conferencing service will

    be able to connect to any industry standards-based video conferencing system,

    anywhere in the world. The wireless nature of the service also makes it suitable for

    out-of-office events. Using this service, even family events like weddings, parties and

    ceremonies can be webcast live by event managers on a pay-per-use basis.

    Mr Hansjoerg Wagner, Vice President and Managing Director, Polycom Asia Pacific,

    said, The wireless video conferencing solution jointly developed by Polycom and

    Reliance is truly a unique innovation on a global scale. Although mobile broadband

    exists in many markets, India is the first country in the world to deliver a wireless

    video conferencing service. Through our partnership with Reliance Communications,

    and our relationships with other leading vendors in the Unified Communications

    ecosystem, Polycom sees that visual communications will be ubiquitous within two to

    three years.

    Leveraging Reliance Webstore's extensive retail reach, the service is being

    commercially rolled out in over 40 Indian cities. The service will be expanded to more

    cities in a phased manner. The Wireless Video Conferencing service will ride on

    Reliance Communications telecom infrastructure backbone. Reliance

    Communications extensive pan-India, next generation, integrated, convergent digital

    network spans over 190,000 route kilometers of fibre optic cable systems. Thisnetwork is capable of supporting best-of-class services spanning the entire

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    communications value chain.

    Universal music has got in to an exclusive partnership agreement with reliance

    communication: to provide its catalogue of music on the operators plat form and

    develop other music related properties. While the deal let universal make money by

    sharing its digital library Rcom will get share of the revenue as subscriber use the


    Rcom said investment would be made by both the parties to offer 360

    degree music experience to customer across all plat form including voice,

    WAp, web, ivr ,blog and through on ground events. Subscriber of the service

    will access to music down loads, video streaming, live concerts and ring

    tone on 3g mobile phones when this services will fully operated in the


    universal has catalogues of 300000 tracks and it will be offered to the

    customers called simply. Additionally we will have music concerts in India

    and with 3g rollout users will have access to this live concert said ROB

    WELL, senior vice president digital universal music group international.

    ( source : Business Standard Date : 05.08.2010 Edition: Mumbai Page No. :


    Intel collaborates with Asus and RCom for affordable computing:

    While broadband Internet has spread far and wide in our country, theres a

    sizable population, which is still in the dark. In order to reduce that, Intel has

    teamed up with Reliance Communications (RCom) and Asus to accelerate

    broadband penetration. They hope to accomplish this by offering affordable

    computing devices, which is where the Asus X101 Meego powered netbook

    comes in.

    C. Informal cooperative linkages

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    These are cooperative links and network occasions which Rcom link for a mutual

    or common purpose without legally binding contractual relationship and some of

    the following are among from those relationships

    RCOM Partners With SNDT Women's University

    To jointly promote education among challenged children

    To create resource hub

    Sponsors Tarang 2010

    First ever initiative in Mumbai

    Mumbai, February 11, 2010 : As part of its ongoing Reliance Anil Dhirubhai

    Group CSR initiatives, Reliance Communications has partnered with

    S.N.D.T Women's University, Mumbai for creating a resource hub aimed at

    promoting education among physically and mentally challenged children. To

    this end, the two are jointly organizing Tarang 2010 at SNDT campus in

    Juhu, Mumbai on February 11, 2010. More than 30 organizations which are

    directly involved with the special needs of these hapless children have been

    invited to this major event. This will be the first time in Mumbai that such an

    event is being planned.

    Taranga 2010 is a curtain raiser endeavoring to increase sensitivity of the

    society toward children with special needs, promote Special Education as a

    career option among the youth, sensitize teachers in normal schools about

    children with special needs and accelerate the pace of inclusive education

    and enhance the knowledge base about the subject among the experts and

    develop viable tools and strategies to help such children.

    Speaking on the occasion, Krishnan S Kumar, Sr. Vice President,

    Reliance ADA Group CSR remarked, We are glad to partner with SNDT

    Womens University in this noble cause. We shall be providing the technical

    inputs on the subject as well as necessary tools to create the platform for the

    knowledge sharing i.e. helplines etc.We is sure that our joint efforts will

    benefit thousands of physically and mentally challenged children and inspire

    other organizations to contribute their best.

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    Tarang 2010 will be attended by most of the renowned special schools in

    Mumbai and Navi Mumbai. Over 1500 visitors comprising parents, teachers,

    policy makers, students, parents of special students, special educators,

    decision makers and other important people will grace the event.

    Educational and therapy equipment companies, book distributors /book

    publishers and pharmaceutical companies will display their products and


    The national education policy is laying emphasis on inclusive education

    wherein children with special needs have to be integrated into the

    mainstream educational system. Efforts are being made to benefit a large

    majority of such children from the Tarang initiative.

    There is a special fair being organized as the first of a series of events. This

    fair will provide a platform where all the stake holders relating to disabilities/

    Special Education can come together and share their opportunity/skill sets. It

    will also create awareness about the scope of Special Education as a career


    D. Cooperation link with government

    The Department of Information Technology (DIT), Government of India

    proposes to facilitate the establishment of a net work of more than 100,000

    internet enabled Information and Communication Technology (ICT) access

    points termed as Common Services Centres (CSC). The CSCs are meant to

    provide high quality and cost effective video, voice and data content, in the

    areas of E-Governance, Education, Health, Tele-medicine, Entertainmentand other government and private services.

    The goal of the CSC Project is to empower the rural community and to bring

    about social change through modern technologies. With a large and

    heterogeneous geographical area, the private and civil society sectors are

    expected to play an active role in development and implementation of the

    CSC Project in supplementing the Governments' efforts to realize its vision

    for the project.

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    Continuum of International Industry

    Mapping Strategic GroupsMapping Strategic GroupsMapping Strategic GroupsMapping Strategic Groups

    Idea, Vodafone, Airtel


    BSNL, MTNL Tata docomo,

    Reliance Comm

    Product Line Breath


    A picture of the more critical areas which can have a relationship of the strategic

    posture of the firm in the future.



    DirectionDirectionDirectionDirection Competitive strengths / WeaknessCompetitive strengths / WeaknessCompetitive strengths / WeaknessCompetitive strengths / Weakness

    Finance High cost of capital, reserves & surplus required

    and high initial cost, capable of makingeconomies of scale.

    Marketing Fierce competition, company position insecure,

    low acceptance of products and temporary usageso long as the scheme continues. Late market

    entry for GSM mobile services.

    Operational quality of service is poor, excellent -parts &

    components available.

    Personnel Quality of management & personnel not par withcompetition, customer grievances and high load

    on personnel to work in this extensive selling



    Multi Domestic

    Reliance Comm.

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    General HighQuality experienced

    top management

    take reactive stance instead of proactiveapproach.

    SWOT Analysis of Reliance Communication Ltd.


    1.Low Entry Cost 2. Commission Structure

    3.Fast Activation Process 4.Network

    5.Data GPRS


    1.Branding Image 2. Distribution problem 3.Lack

    of Competitive Strengt 4. Entry in GSM market

    5.Quality of service


    1.New Specialist Application 2.Rural

    elephony 3.New Market

    .Vertical& Horizontal Integration

    5.Competitors` Vulnerabilities


    1.New Entrants 2. IT Development 3.Market

    Demand 4.Number Portability Service


    Lack of communication between retailers and distributor

    Consumer switching to other networkseasily with the help of Number

    Portability services

    Lack of improper distribution channel

    All retailers are not aware of new scheme of RCOM

    Lack of effective sales promotion and advertisement

    Retailer doesnt get claim at proper time

    No visit of TSM or any other person to the retailers shop


    Customer Satisfaction

    Retailer Satisfaction

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    Increase in Sale

    Sales Promotion

    Proper Distribution Channel

    Also entry into the GSM market meant that now consumers can switch

    network provider if they are dissatisfied as was not the case with CDMA where

    the switching cost for subscriber was high because of the network providers

    handset that they had to buy.

    With consistently poor quality of service delivery, the subscribers which it

    acquired with GSM because of low pricing, were now at liberty to shift to other

    networks as was not the case with CDMA where subscriber had to stick with

    Reliance Communication despite unsatisfactory services.



    (1) Value chain Analysis

    Step 1 Activity Analysis

    Reliance Communications has established a pan-India, next

    generation, integrated (wireless and wireline), convergent (voice, data

    and video) digital network that is capable of supporting best-of-class

    services spanning the entire communications value chain, covering

    over 24,000 towns and 600,000 villages.

    Reliance Communications owns and operates the worlds largest next

    generation IP enabled connectivity infrastructure, comprising over

    2,77,000 kilometers of fibre optic cable systems in India, USA,Europe, Middle East and the Asia Pacific region.

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    Step 2 Value Analysis

    Continuous service- users report that the network has deterioratedover time

    Ease of Payment Online payment facility available. Hubs opened

    everywhere along with retail shops catering to the rural areas.

    Step 3- Evaluate Changes and Plan for Action.

    Communication network needs to be upgraded to deal with an increased traffic so

    that service level does not go down

    (2) Quantitative analysis

    Financial- Ratio Analysis

    Key Financial Ratios of Reliance Communications Ltd.Mar '11 Mar '10 Mar '09

    Investment Valuation Ratios

    Face Value 5.00 5.00 5.00

    Dividend Per Share 0.50 0.85 0.80

    Operating Profit Per Share (Rs) 2.04 10.63 25.34

    Net Operating Profit Per Share (Rs) 58.77 65.67 73.09

    Free Reserves Per Share (Rs) -- 233.03 239.16

    Bonus in Equity Capital -- -- --

    Profitability Ratios

    Operating Profit Margin(%) 12.85 16.18 34.66

    Profit Before Interest And Tax

    Margin(%)0.82 4.75 20.91

    Gross Profit Margin(%) 0.87 5.03 21.84

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    Cash Profit Margin(%) 2.74 2.32 20.70

    Adjusted Cash Margin(%) 5.77 2.32 20.70

    Net Profit Margin(%) -6.00 3.33 30.47

    Adjusted Net Profit Margin(%) -5.40 3.33 30.47

    Return On Capital Employed(%) 1.03 1.97 4.80

    Return On Net Worth(%) -1.57 0.94 9.29

    Adjusted Return on Net Worth(%) -4.41 -2.33 2.57

    Return on Assets Excluding Revaluations 233.26 244.66 250.43

    Return on Assets Including Revaluations 233.26 244.66 250.43

    Return on Long Term Funds (%) -2.44 2.12 5.34

    Liquidity And Solvency Ratios

    Current Ratio 1.84 1.37 1.45

    Quick Ratio 1.81 2.14 2.70

    Debt Equity Ratio 0.65 0.48 0.60

    Long Term Debt Equity Ratio 0.46 0.38 0.44

    Debt Coverage Ratios

    Interest Cover 1.16 1.36 4.12

    Total Debt to Owners Fund 0.65 0.48 0.60

    Financial Charges Coverage Ratio 5.09 2.39 5.12

    Financial Charges Coverage Ratio Post

    Tax12.78 2.59 6.84

    Management Efficiency Ratios

    Debtors Turnover Ratio 7.18 8.42 11.72

    Investments Turnover Ratio 39.63 41.20 --

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    The operating profit for the year is 421.89crores.

    Where as the reported net profit is (-757.99) crores means loss of 757.99

    crores. This difference is because of amount of depreciation charged which

    is 2,855.62crores. The profit and loss account shows decreasing trend

    from the year 2008-09 till date.

    The current ratio of the company has improved it is 1.84 and ideally it

    should be 2.

    Fixed Assets Turnover Ratio -- -- --

    Total Assets Turnover Ratio 0.15 0.16 --

    Asset Turnover Ratio 0.30 0.63 0.76

    Number of Days In Working Capital 259.59 286.38 386.03

    Profit & Loss Account Ratios

    Material Cost Composition 0.53 0.37 0.19

    Imported Composition of Raw Materials

    Consumed-- -- --

    Selling Distribution Cost Composition -- 4.89 5.12

    Expenses as Composition of Total Sales 7.68 6.26 9.23

    Cash Flow Indicator Ratios

    Dividend Payout Ratio Net Profit -- 42.71 4.02

    Dividend Payout Ratio Cash Profit 5.73 10.27 2.86

    Earning Retention Ratio -- 117.36 85.48

    Cash Earning Retention Ratio 83.48 38.57 94.08

    AdjustedCash Flow Times 43.20 73.51 9.47

    Earnings Per Share -3.67 2.32 23.27

    Book Value 233.26 244.66 250.43

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    Quick ratio is 1.81 which good and also it is very close to current ratio

    which means that its assets are highly liquid in nature.

    Debt-equity ratio of the company is 0.65 which means that against each

    rupee of an equity there is a debt of 65 paisa.

    The book value of the share is 233.26 Rs.

    Total equity dividend paid in current year is 103.20 crores which is less

    than what was paid last year (175.44) crores.

    Total expenditure is same as compared to ladt year but the income has


    Sales turnover shows about 10% decrease from the last year so as the netsale also

    The income from other sources has decreased from 2,455.17 crores to

    484.25 crores.

    Non financial qualitative analysis

    Market RankingThe Forbes Global 2000 companies.

    Reliance Communications 742

    So we see that Reliance Communications ranks 742nd

    out of 2000 of the worlds best


    According to the companys Annual report 2010-11, The company ranks among the Top 4

    Telecom companies in the world by number of customers in a single country. Reliance Communications

    corporate clientele includes 2,100 Indian and multinational corporations, and over 800 global, regional

    and domestic carriers.

    (3) Qualitative Analysis

    Corporate cultureCorporate cultureCorporate cultureCorporate culture They put customer first at all times, and built long term relationship with


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    They believe in interpretation and keep every commitment that they make.

    They strive to operate with honesty and integrity interpretation all their


    They seek to treat every individual with dignity and respect. They try to approach every endeavour with zeal & an attitude towards



    (1) Benchmarking



    Market Cap.

    (Rs. cr.)



    (Rs. Cr.)

    Net Profit

    (in Cr)


    Assets(in Cr.)

    Bharti Airtel 395.25 150,097.38 38,015.80 1400 56,009.10

    Vodafone 297.00 145,625.8 37,067.90 797 24239.80

    Tata Comm 187.20 5,335.20 3,409.00 162.56 9,222.46

    Idea Cellular 94.70 31,310.77 15,389.00 154.1 22,888.18

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    TataTeleservice 17.05 3,234.72 3,128.24 80.23 4,036.17



    83.70 17,275.90 11,989.19 (-757.99) 79,597.22

    MTNL 30.30 1,908.90 3,841.21 (-1099.5) 14,102.17

    (2) Historical Analysis

    The graphs show a decreasing trend in terms of Revenue, Net worth and Net Profit to such an extent

    that the company has had huge losses in the previous financial year ie 2010-11. The increase in

    subscribers can be attributed to the expansion in the companys market because of the introductionof a host of new internet based services.


    Balanced Score CardBalanced Score CardBalanced Score CardBalanced Score Card











    Subscibers(in Mn)












    Net Worth (in Cr)

    Net Worth (in






    Year '




    Revenue (Rs. Mn)

    Revenue (Rs.







    Year '09 Year '10 Year '11

    Net Profit (in Cr)

    Net Profit

    (in Cr)



    Objectives Measures

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    Increase market share and size extensively Expansion in scope of services provided



    Retain and attract new customers

    Penetration of every segment of all markets

    related to communication

    Providing low cost and establishing a nation-

    wide, high capacity, integrated (wireless and

    wire-line) and convergent (Voice, data and

    video) digital network, to offer services thatspan the entire communication value chain

    infrastructure, services for enterprises and

    individuals, applications and consulting.




    Corporate citizenship

    Social measures

    Integration of work force

    Social benefit programs for education etc


    and Growth



    CAPITALhiring world-class talent and

    supporting them with an

    enabling organisational

    framework.Continuing personal

    development is the constant

    obligation of all employees and

    constant responsibility of all

    Executives, Managers and


    Invested in 50,000 person training days and

    state-of-the-art e-learning facilities. We are

    introducing several progressive and

    employee friendly HR practices in e-HR,Employee Self Service, Performance

    Management System, 360 Feedback and

    Leadership Development initiatives.


    and Growth





    Organisational Expansion Increasing the scope of services

    Employee data tracking

    Crafting marketing Strategy

    Developing cross functional linkages

    Learningand Growth





    respect for the development of

    the employee

    acquiring skills to solve specific

    problems but also expanding

    minds to address problems and

    opportunities which have not

    become apparent

    building a non-hierarchical and

    open work environment work

    culture marked by positiveenergy, team work and


    Customer centricity

    Developing initiative and

    attitude of ownership

    Entrepreneur &Stretch

    selfhelp and guidance to foster commonpurpose and cohesion

    Promoting result-driven meritocracy.

    invigorating physical work settings

    challenging assignments and career


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    Competitors and Competitive Strategy

    Competitor analysis in strategic management is an assessment of the strengths and

    weaknesses of current and potential competitors. This analysis provides both an offensive and

    defensive strategic context to identify opportunities and threats. Profiling coalesces all of the

    relevant sources of competitor analysis into one framework in the support of efficient and

    effective strategy formulation, implementation, monitoring and adjustment.

    In this project we analysis the competitor of Reliance Communication to identify their

    strengths and weaknesse