asha and alpa

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SUMMER PROJECT REPORT

ON

A COMPREHENSIVE STUDY ON MARKET OFPREPAID CARD SERVICES OF

Submitted by:

KODIYATAR ASHA V.

PATEL ALPA N.

Academic year: 2006-08

Submitted to:

AES PG IBM, AhmedabadGujarat University

Date: 17-7-08


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DECLARATIONS

We, undersigned, Ms. Asha Kodiyatar and Ms. Alpa Patel student of MBAsemester II from AES PGIBM, Ahmedabad, declare that we have prepared thisproject report on a COMPREHENSIVE STUDY ON MARKET OF PREPAIDCARD SERVICES OF RELIANCE COMMUNITATION, Ahmadabad.

We also declare that this project report is our own preparation and not copy from

anywhere else.


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Acknowledgement

We learn in Management is Manage + Men + T (Time, Task, etc.). We allagree with this statement & wish to include that it would have been not possibleto complete this project without help and support of many people.

We are thankful to Mr. Bhupendra Shivhare (Mar- Com Depart RelianceCommunication) who helped us in each and every phase of our project and whowas with us for the entire Project preparation task. we are also thankful to Mrs.Bijal Mehta (Project guide) and Mr.A.H.Karlo (Director) of Who gave us avaluable opportunity of involving us in real life assignment. We are also gratefulto Mr.Hitansu (Lab) for giving us valuable guidance during the making of thereport.

A Comprehensive Study On Market of Prepaid Card Services Is humblypresented here, for kind appraisal. Sincere comments, Suggestions and criticalevaluations.

We are also indebted to all lecturers, Friends and associate for their valuableadvice, stimulated suggestions and over whelming support, without which theproject would not have been a success.

.


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Preface

Student with out practical Knowledge is just like a bird without wings

Practical training is tool to develop conceptual & analytical ability in student.According to M.B.A schedule, Students are required to under go practical studyto understand the company. Global market, newer industrial developing era, andto achieve basic skill and ability which is helpful in M.B.A.

My objective in preparing this project is to capture this excitement and challengein the increased commuting time, convenience has become a priority for satisfytheir basic need like communication.

My project will provide some insight to the company in knowing the effectivenessof print and outdoor Medias and also the consumer awareness towards thecompany.


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Table Of Content

Sr. No. Particulars Page No.1 Acnoknowledgement 32 Preface 43 Industry Information 6

a) History Of Telecommunication 6b) Deregulation 7c) Manufacturing 7d) Alcatel in India 8e) The Usefulness Of Telecom 10f) Major Players Of the Cellular Services Provider 11g) Analysis Of The Industry 12

h) Ecological and Health Factors 13i) Future trend and Scenario 15j) Indian Telecom Industry at a glance 16

4 COMPANY INFORMATION 24a)Introduction 24b)An overview ADA Group 25c)History and develop 26d)Major group Companies 28e)Introduction of Reliance Communications 31f)Co visions / mission 34g)Org. Beliefs and Values 35h)Corporate Governance 36i)An Exciting Future at Reliance Communications 38j)Department Structure 40RESEARCH 41

5 a)Research Objective 41b)Research Methodology 41c) Research Design 42d)Sampling Plan 42e)Sampling Size 42f)Source Of Data 44

g)Contact Method & Research Instruments 446 DATA INTERPRETATION 457 FINDINGS & SUGGESTION 508 CONCLUSION 529 ANNEXURE 5310 BIBLIOGRAPHY 56


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INDUSTRYPROFILE

BRIEF HISTORY OF TELECOMMUNICATIONS IN INDIA

Economic liberalization has been very fruitful for Indian telecommunicationsindustry and brought along significant progress. One of the important features ofthe liberalization process was that the entire spectrum of telecom services wasthrown open to the private sector and the operation of market dynamics. Startingfrom basic telephone with manual exchange to formation of MahanagarTelephone Nigam Limited (MTNL) in 1986, India has seen a lot of changes,though slowly. The National Telecom Policy (NTP) announced on May 13, 1994

brought along the concept of telecommunication for all and telecommunicationwithin the reach of all. It visualized universal service covering all villages and itis satisfying to know that out of the nearly 6-lakh villages in the country, about 4-lakh villages have been provided with telecom services. The objective of thegovernment is to see that before the end of year 2002 all villages are providedwith basic telecom services, keeping in mind that the quality of telecom serviceshas to be of world standard.

Further in 1995 a multimedia center with video conferencing facility was openedfollowed by providing commercial ISDN services. As a result of liberalizationfollowed by competition in the telecom services, the Government of India set up

the Telecom Regulatory Authority of India (TRAI) in 1997. This was restructuredin 2000 and an appellate authority Telecom Disputes and Settlement AppellateTribunal (TDSAT) was set up. The biggest landmark in 2001 was when MTNLinvested U.S. $300 million for operations in Bangladesh and Nepal and this yeargovernment control over the country's telecommunication sector undergoes achange with the privatization of Videsh Sanchar Nigam Ltd. (VSNL). Theprivatization of Indias largest telephone service provider is being considered amilestone in telecommunication history of India.

Before liberalization VSNL had a monopoly over international long distance (ILD)calls. The end of government monopoly has made a tremendous impact on the

telecom sector as far as customers are concerned. While on the one hand VSNLwill begin to face the challenge posed by private companies such as BhartiTelesonic, on the other hand consumers have already started enjoying a declinein ISD tariffs and improved services in international telephony. In fact, prominentInternet service providers have announced tariffs slash of up to about Rs. 25from Rs. 55 per minute (between Delhi and New York). India has a huge ISDmarket which accounts for transactions of about Rs. 7,500 crore. Due to veryhigh tariffs, the number of calls India receives is much higher than calls made


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from India. The present ISD ratio of outgoing to incoming calls is about 1:5.Various players are working towards an improvement to this ratio.

In 1986, telecom operations for Delhi and Mumbai were moved out of theDepartment of telecommunications (DoT) and given to Mahanagar Tele-phone

Nigam Ltd (MTNL), a public sector corporation. Following that, the governmentlaunched BSNL (Bharat Sanchar Nigam Limited) in an effort to corporate theremainder of DoT, empowering the new company to venture into areas like basic,cellular and Internet services. BSNL has the goal of providing telephone ondemand by 2002. Another important player is the Videsh Sanchar Nigam Ltd(VSNL), the international access network. VSNL will remain a monopoly until2002.

Deregulation

The Telecom Policy of 1994 saw liberalization of the sector. Since even aver-age telecom services were difficult for the government to provide, basic andvalue added services were thrown open to private players. However, due toinexperience in dealing with such developments, some policy steps to regulatecompetition led to confusion. As a result of the new Telecom Policy of 1999,MTNL and VSNL are gaining strength. India has also opened up the bandwidthsegment for overseas communication to the private sector. India now has a totalcapacity of 29 million lines. The Long Distance Transmission Network has300,000 kilometers of terrestrial network including 100,000 kilometers of opticalfiber. Fully automatic national and international subscriber dialing service is

available almost everywhere in the country. Inter-national communications haveimproved thanks to the use of satellite communication and submarine links.

The voice and non-voice telecom services include data transmission, fax, mobileradio, radio paging, V-SAT and leased line. A dedicated packet switched publicdata network, I-NET, with global access is also available.

Manufacturing

While public and private operators are the cornerstones of the Indian telecomindustry, there are many manufacturers in the fray. These include public sectorundertakings like Hindustan Teleprinters Ltd. and Indian Telephone Industries(I.T.I. Ltd.). Additionally, there are private telecom equipment makers includinglocal companies and the Indian subsidiaries of foreign companies such asAlcatel. The jelly filled cables segment still remains the largest in terms ofturnover.


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Alcatel in India

Alcatels initial presence in India was through a partnership with Indian

Telephone Industries (I.T.I.Ltd.)Forged in the early 1980s.This partnership wasrenewed in 1991 and 1999 to incorporate technological changes in line with thetrends in the industry. In 1991, Alcatel created a joint venture with an Indianpartner, buying back its shares in 2000; Alcatel now has a fully owned subsidiary,Alcatel India Ltd, which offers the complete suite of telecom solutions andservices to meet the needs of this challenging market. Alcatel has investedheavily in India in terms of infrastructure and human resources. It operates amanufacturing facility in Gurgaon, near Delhi, an enterprise-businessorganization in Bangalore, and software centers in Bangalore, Chennai andGurgaon. This accounts for 800 employees. Beyond this, approximately 2,000Indian software engineers contribute to Alcatels worldwide high tech

development program through subcontracting agreements. Alcatel has emergedas the single largest supplier of digital switching in India with 50%marketshareachieved through manufacturing by I.T.I.Ltd.since 1982 and that of its own since1993.Alcatel supplied the first national packet switched data network, I-NET II, forBSNL (the recently corporative part of the Indian Department ofTelecommunications).


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Introduction

Three forces--Telecommunication, Information and Globalization--arerestructuring every aspect of business and society. Telecom professionals arethe key players in this transformation. They play a crucial role as leaders in the

changing dynamics of global communications, internetworking, the Internet, e-commerce, mobile and wireless communications strategy.

Modern age is the age of convergence and fusion for telecommunications. Thisfusion of telecommunications, broadcasting and information technologies hasresulted in amazing discoveries. Voice over IP, television web casting overInternet and video on demand is a reality. Telecommunications is a key tomodern economy infrastructure. Telecommunications when linked with computerbecomes Information Technology, which is the most dominating technology of

today as it influences the entire spectrum of the economy. IT practically covers allaspects of business, technology, manufacturing and other services.

Today the networks and companies will no longer be categorized on the basis ofonly voice, data or video services they provide. They have to become info-communications companies providing a bundle of services.

Telecommunication has now become the backbone of any modern economy dueto its all-pervasive nature of running through almost every human transaction -commercial, digital or even personal. The emerging new economy, powered bytechnology and dictated by the digital revolution is incredibly forcing the telecom

industry to grow more than ever before.

The changing lifestyle of human beings enhanced by Internet, facilitated bymobile communications and enriched by e-commerce would give a real boost tothis industry. As trade and industry grows, telecom services also have to expandcommensurately because it is one of the greatest infrastructure and life-blood forthe modern trade and commerce.

For the second populous country in the world and the fifth one in terms ofpurchasing power parity, an average total tele-density of 4.4 basic telephones,rural tele-density of just 1 basic telephone and around 0.5 cellular telephones per

100 people points towards its potential for growth. Against this backdrop, inadvanced countries the tele-density is averaging in 50-60 (basic telephone)range.

India's telephone network with 38.45 million direct exchange lines (DEL), as of 31March 2002, is one of the largest in the world and the third largest amongemerging economies (after China and Republic of Korea).


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Monopolized by the government, the sector was a big victim of huge operationalinefficiency and customer apathy till recently. However, the opening up ofeconomy per se has improved remarkably the service conditions. The scenario isundergoing dramatic changes day by day. Private players are now flocking to thissector with unexpected enthusiasm and the scenario is set to witness fierce

competition, both in basic telephony, cellular, international, national long distanceand other value-added services.

In developed countries telecom industry is viewed as the prime mover of GDPgrowth as telecommunications is significant for economic development since 1%increase in telephone density leads to a 3% increase in the GDP. (This statisticalinformation is quoted from the websitehttp://www.indiainfoline.com/nevi/vsmt.html).

The Usefulness of Telecom

India has a huge disparity of income among its people. One reason for this is thelack of education. In the days when telecom was a state monopoly, thegovernment introduced education classes through the state run TV channel.Even now, huge numbers of students who cannot afford to go to regularschools/colleges watches these classes. An estimated 3.5 million students areenrolled in various distance education universities throughout the country. Someforeign universities have seen this potential market and set up programs.Computer education is a route to generating more employment and prosperity.Due to the lack of proper telecom infrastructure in the interiors of the country,

there is general lack of awareness of global developments. The spread oftelecommunications will help tap this potential market. And the sheer magnitudeof the market will continue to beckon global players for years to come.

Telecommunications services are used for a variety of purposes. Moderncommunities and businesses have come to rely on these services for:

Social contact such as keeping in touch with friends and relatives and fororganizing social activities;

Business purposes which cover a wide range of uses from customercontact and business transactions to inter-company communications;

Emergency use for summoning police, ambulance and fire brigades; Cultural and entertainment use; Educational use where telecommunications services or applications

replace or augment traditional delivery of education;


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MAJOR PLAYERS OF THE CELLULAR SERVICE

PROVIDERS

1) BSNL (Cell one) BSNL is the largest telecom operator in the country. Itprovides fixed line as well as cellular services. It has been offering cellularservices in Bihar and Kolkata on a pilot basis since January 2002.

2) BhartiTele Services (AIRTEL) It offers services in the fixed, cellular,domestic long distance and international long distance services. Bhartiscellular services sold under the Airtel brand are available in 15 cities acrossthe country. The company also has fixed line operations sold under theTouchtel Brand.

3) Idea Cellular Idea cellular is a cellular service provider operating inMaharashtra, Gujarat, Andhra Pradesh, Delhi and Madhya Pradesh, Goa.TheTatas own about one-third of this new company, formed after the merger ofTata Cellular and Birla-AT-T. In Gujarat its competitors are Hutch and Bharti.

4) TATA it operates in the telecom sector through TATA Infocom. It has thelicense to provide cellular services in seven circles covering 13 states andKolkata.It also has acquired licenses for domestic and long distance services

market.

5) Hutchison Hutchison has been offering cellular services for several yearsnow, In Delhi as Hutchison Essar, in Kolkata as Hutchison telecom, in Gujaratas Fascel and Mumbai as Hutchison MaxHutch sells its services under thebrand names of Orange (in Mumbai only) and Hutch at other places.


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ANALYSIS OF THE INDUSTRY

Different factors

Political factors:

Cellular mobile service providers (CMSPs) are licensed to operate in designatedgeographical areas. There has been deregulation, thereby increasing thecompetitive pressures. These CMSPs had to pay an entry fee and subsequentlyan annual license fee as a percentage of their revenue to the Department ofTelecommunications. Players are expected to grapple with complex issues ofnew technologies and an evolving regulatory framework.

Economic factors:

Initially it was seen as a status symbol whereas now it is believed as a

necessity. Owning a cell is no more a prestigious issue. The per capitaexpenditure in rural areas of Gujarat is Rs. 6,612 p.a. as against that of India Rs.5,832 (13.37% higher). The same for the urban area is Rs. 10,704 as againstthat of India Rs. 10,260 (4.32% higher).

Socio cultural Factors:

With a population of five crores, Gujarat has a substantial potential to grab inmore mobile users. They have started focusing on maximizing their averagerevenue per user.

Technological factors:

As mentioned earlier, the industry has invested huge amounts to setup itshardware, software as well as its infrastructure.

It is highly dependent on mobile manufacturers for its research anddevelopment. For new developments, additional quality aspects, or for newproduct features, the industry has to rely on mobile manufacturers like Nokia,Samsung and its like, while for software development it depends upon thesoftware like UNIX.

Legal Factors:

The industry has to follow the norms and regulations laid down by the regulatoryauthorities like TRAI (Telecom Regulatory Authority of India) and COAI (CellularOperators Association of India).


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ECHOLOGICAL AND HEALTH FACTORS

Especially from the environmental pollution point of view under the ecologicalfactor, the telecom industry was considered as pollution free industry. But aftersome scientific findings the analysts conclude that the waves from the cell tower

can create some hazards to the environment, which can badly affect on thephysics of live bodies.

Facts regarding this issue are given below:

The WAVES and radiation from mobile phone towers can affect the health ofthose in the vicinity. The point raised by Director Health Services (DHS) Dr.C.P. Bansal and head of Neurology Department at PGI, Dr. S.Prabhakar addsto the problems the administration is facing on account of these towers.

The issue was raised at a meeting of the officers of UT administration, PGI,

Health Department, Air Force and Department of Telecom (DoT) in which the twosaid the probable impact could be on the heart or brain, depending on thelocation of these towers.

Explaining, Dr. Bansal said the 30 meter horizontal area around the towers wasnot safe, and precautions must be taken if a person has to go within three meterof these.

Dr. Prabhakar said as the wave effect was in the horizontal direction, the towershould not be lower than the neighboring buildings. Secondly, maintenanceworkers should climb the towers only when they are switched off or if they are

wearing protective gear, according to minutes of the meeting. UT officials saythough no exact number is available, a number of towers in the city are lowerthan the surrounding buildings.

The Air Force officers said they needed to know the exact location of every towerin the city even if they did not fall in the take-off and approach funnel of aircraft.The officers added these towers should be provided with a continuous red lightas per the rules.

On this, officials of DoT and Telecom Regulatory Authority of India (TRAI) saidthe specific location of each tower was cleared by Standing Advisory Committee

on Frequency Allocation (SACFA) in which all concerned departments ofgovernment of India were involved. The Air Force Headquarters gives nod onlyafter consulting the field formations concerned.

There are 168 mobile towers in the city out of which 15 are in residential areas,according to a recent administration survey.


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Some other issues showing negative effect onhealth

Degenerative diseases like Alzheimers and Parkinsons might be linked to

exposure to cell phone magnetic fields. Heavy mobile users are involved in twice as many fatal road accidents

than light user globally. Worldwide, risk of a car accident is four times greater when the driver is

using his mobile phone or soon after call. Carrying a mobile in the hip pocket or a cell phone holder on the waist can

cut sperm count by nearly 30%. A 2004 report from the U.S confirms the ability of low level magnetic fields

to cause DNA damage and brain cell death in rats. Radiation from a cell phones antenna can cause the formation of

micronuclei red flags for cancer in the brain, especially among children.

70% of the microwave radiation emitted by cell phones is absorbed by thehead, creating hotspots in the brain, said by one British and twoAmerican studies.

Studies in Sweden and Switzerland show that radiation from mobile phone callsdisturbs sleep.


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FUTURE TREND AND SECINARIO OF TELECOMSECTOR

The New Perspective Plan for 2010 outlines government projections, targets andObjectives for the telecom sector.

Perspective Plan for 2010:

Taking into account the liberalization policies of the government through the NewTelecom Policy and various objectives and targets set therein, it had becomenecessary to frame a New Prospective Plan that would cover a period up to theyear 2010, hence the plan.

Objectives of the Perspective Plan:

Consolidation of the network and maintaining high quality of service comparableto international standards is the key aim of the plan.

Other objectives of the Perspective Plan are:

The telephone connection shall be provided on demand and it shall besustained.

The network shall be made fully digital. All the technologically obsolete analog

exchanges will be replaced with digital exchanges.

To provide digital transmission links up to all SDCAs during the Ninth Planperiod.

Digital connectivity shall be made available to all the exchanges by 2007.

Extensive use of optical fiber system in the local, junction, and long distancenetwork so as to make available sufficient bandwidth for the spread of Internetand information

Technology

ISDN services shall be extended to all the district headquarters, subject todemand.

To provide Intelligent Network Services, progressively, all over the country.


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TREND

Experts say that future of telecommunication will brighter and it will becomebrightest when government interventions will less. There will be very high growthin telecom market. It will be growth three times in future. In telecom market there

will be trend of CDMA and GSM. Fixed line phones will also increase but not asfaster as cellular will. There will be great revolution in numbers of internet users.Indian telecommunication will become hi-tech in future.

TELECOM REGULATORY AUTHORITY OF INDIA

INTRODUCTION

Telecom Regulatory Authority Of India, a statutory and quasi-judicial body wasformed by an Act in Indian Parliament to regulate the vast telecom sector. Thenecessity to form such a regulatory body in line with SEBI, IRDA etc. was feltwhen the telecom sector was open to private sector. Plainly speaking its jobcould be comparable to an umpires of a game field. It has been given the libertyto act without the intervention of bureaucracy or some self-serving politicians,

The skirmishes encompassing TRAI came to limelight due to conflict among

various telecom operators. Thats exactly the duty of this regulatory body, as hasbeen entrusted with the statutory power, umpiring on behalf of the public forsmooth telecom service.

If one reviews the sequence of its orders/regulations, chronologically, to varioustelecom operators and the crucial policy changes with regards to servicechanges, the monopolistic and arbitrary attitude is clearly visible.

Unfortunately, Its a matter of concern that INTER CONNECT USAGE REGIMEordered by the same agency is being reviewed again by itself within two monthsof its enforcement. It could have been reviewed before it has been implemented

or could have been kept for public perception or operators opinion. If an telecomregulator of a country having almost 7 crores telephone connections could act insuch a haste manner without taking into consideration of aspects of technicalfeasibility, accounting, public psyche etc. into oblivion.

Though operators have the requisite expertise technically and financially toprovide cheaper telecom service, TRAI is there only to make it costlier. e.g.


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BSNL and RELIANCE . If they could offer cheaper telecom services them, TRAIshould not prevent them in the name of PREDATORY PRICING .

Its appropriate time to review the role of TRAI and other Statutory Regulatorybodies by the public forum and parliament as well, rather than giving it a free

reign to act on this way to the tune of certain players.

Telecom Regulatory Authority of India (TRAI) and its First judgment On April 25,1997, the recently constituted Telecom Regulatory Authority of India (TRAI) gaveits first judgment -- a landmark one, delivered with speed and style. This

judgment and its no-nonsense approach could well set the stage for things tocome.

TRAI quashed DoTs (Department of Technology) order of January 29, whichhad sought to hike rather steeply, the price of calls made by users of ordinary

fixed line phones to cellular subscribers in the non-metro areas.

Even the cellular operators, whose stand was accepted by the TRAI, wouldaccept privately that the respondent DoT was poorly served by many of itsofficers and lawyers who were entrusted with the task of representing DoTscase.

They seemed to have cut a very sorry figure before TRAI, ignoring or not beingprepared by reading pertinent papers, such as tender documents, theclarifications offered to would-be bidders, or the correspondence that DoT washaving with the operators later. Since the tender documents mentioned that

tariffs would be the same for circles and metros, it would have made sense forDoT to seek legal advice on how to correct a mistake, if that is what it was. Anappeal to TRAI could perhaps have been recourse, as the body is in charge oftariffs.

Fixed line users pay local call rates when they dial a cellular number in the fourmetros (Calcutta, Chennai, Delhi, and Mumbai). But users in the circles (whichare typically the same as states) would be charged Rs10 per call for the samefacility, if the DoT order in question had not been quashed.

DoT had raised current rates on grounds that such charges were low and

allowed users in the circles which are much larger than metros, to make longdistance calls without paying STD charges. On the face of it, DoT is entitled towant to change this state of affairs. But in trying to correct one injustice to itself, itmanaged to inflict several on the users and other service providers.

The cellular operators lost no time in going to the courts, since TRAI did not thenexist. The courts in turn took an enlightened decision to pass the matter on toTRAI on March 3, as the body had been formally constituted by then.


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TRAI took a few weeks to give its judgment and ruled against the Department ofTelecom. The body was not persuaded about the justness of DoTs order.

Nor was TRAI particularly impressed by the operators contention that DoT wasnot authorized to raise these tariffs. The judgment clearly says that the order of

DoT to raise the tariff was passed before the TRAI was formally constituted andduring the said period in question, the DoT was the sole body with the power toamend tariffs.

Function of Telecom Regulatory Authority of India

The main functions of the TRAI would be to recommend entry of new

service providers, ensure technical compatibility and effective connectivitybetween different service providers, regulate arrangement of revenuesharing derived by the service providers and ensure compliance of termsand conditions of license.

Besides, the TRAI would facilitate competition and promote efficiency andsustained growth of telecommunications services, monitor the quality ofservice provided by the service providers, inspect the equipment used andrecommend the types to be used by the service provider and settledisputes between service providers.

It would adjudicate disputes, which arise between service providers orbetween a service provider and a group of consumers.

It would not touch matters, which lie within the purview of the Monopoliesand Restrictive Trade Practices Act and the consumer farm.


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MAIN ISSUES RAISED IN THE CONSULTATION PAPER:

1. Cost of Internet Telephony in comparison to PSTN Telephony

Normally Internet Telephony is considered to be less costly than theconventional PSTN Telephony. Important reasons for this are policyrelated namely non-payment of settlement rate and differentInterconnection or Access charges. A closer look may, therefore, berequired to compare cost related to networks.

2. Quality of Service

Internet is a best effort service in terms of guarantee for Quality of Service(QOS). Its degraded quality may have implications for consumeracceptability.

3. Who should be allowed to provide Internet Telephony

Various possibilities may be considered, ranging from only ISPs, beingallowed to provide Internet Telephony or only BSOs/NLDOs beingpermitted to Open entry for all creating a new type of service namelyInternet Telephony Service.

4. Tariff and Interconnection Charge Policy for Internet Telephony

It is difficult to unbundle the various elements of an IP based network toseparate out the cost of local call, long distance call and international callsas in PSTN. In this background different charging principles like Volumebased charging, Flat Rate charging or Time dependent charging forInternet Telephony may have to be considered.

5. Contribution to Universal Service Fund (USO)

Normally all the providers of Telecom service are required to contributetowards USF as a share of their revenue. It is to be deliberated whetherInternet Telephony Service Provider (ITSP) will be treated similarly or not?


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6. Level Playing Field Issues

The existing BSOs/NLDOs have to pay entry fee, license fee and aresubject to rollout obligations etc. What would be the effect of these factorson Level Playing Field with ITSP if their terms and conditions are not the

same?

7. Digital Divide

Would the introduction of Internet Telephony enlarge the digital divide? Ifso, what policy should be followed to address such a possibility.

8. Impact on Infrastructure Development

Whether the Introduction of Internet Telephony would adversely affect thegrowth of Telecom infrastructure in the country or would it imply a faster

spread of Telephony.

Comments on the issues raised in the Consultation Paper are to be provided by15.12.2001 to TRAI. This paper is also available on TRAI's Website(www.trai.gov.in). The various issues will be deliberated upon during the OpenHouse Consultations planned to be held in the next two months in major cities.

DRIVING FORCES

While it is important to judge what growth stage an industry is in, there is mostanalytical value in identifying the specific factors causing fundamental industryand competitive adjustments. Industry and competitive conditions are changebecause forces are in motion that creates incentive or pressure for change.These dominant forces are called driving forces.

The most common driving forces for Indian Telecom Industry are.

Product innovation.

Product innovation can shake up the structure of competition by

broadening an industrys customer base rejuvenation industry growth, andwidening the degree of product differentiation among rival sellers.Successful new product introductions strengthen the market position ofthe innovation companies, usually at the expense of companies that stickwith their old products or are slow to follow with their own versions of thenew product.


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In the telecom sector, now a day, so many innovations are to be done intelephone instruments as well as in the way of the services provided bythe companies.

Technological change.

Advances in technology can dramatically alter an industrys landscape,making it possible to produce new and better products at lower cost andopening up whole new industry frontiers.

The telecom industry is highly depending on the technology. Right now wehave so many latest technologies available which are becoming expiredue to the newly coming technology everyday in products, services,networking and every dimension of telecom sector.

Marketing innovations.

The marketing innovations are also very important driving forces as somany international companies as well as other national private companiesenter in the industry. We have the example of BSNls marketing strategies,after the entry of Reliance, TATA, hutch and other players.

Entry or exit of major firms.

The entry of one or more foreign companies into a market once dominated

by domestic firms nearly always sakes up competitive conditions.Likewise, when an established domestic firm form another industryattempts entry either by acquisition or by launching its own start-upventure, it usually applies its skills and resources in some innovativefashion that pushes competition in new direction.

The classic examples are the Indian telecom sector after entry ofReliance, TATA, AT&T and other biog giants.

Diffusion of technical know how across more companies and morecountries.

As knowledge about how to perform a particular activity or execute aparticular manufacturing technology spreads, any technically basedcompetitive advantage held by firms orig9inally possessing this know-howerodes. The diffusion of such knowledge can occur through scientific

journals.


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In the Indian telecom industry, we can see the effect of this factor by theexample of Idea cellular, a joint venture of Birla, AT&T and Bharti.

Regulatory influences and government policy changes.

Government regulatory actions can often force significant changes inindustry practices and strategic approaches. Deregulation has proved tobe a potent procompetitive force in the telecom industry

INDIAN TELECOM INDUSTRY AT A GLANCE

Overview

Telecom industry, in India can be viewed as essential for the socioeconomicdevelopment of the country and a major integrating factor for the diverse nation.It becomes an important factor for the growth of our country and the developmentof various businesses. It serves as an important channel to integrate the nation,especially the vast rural section of our population.

Learning from the experience of developed countries, India moved towardsprivatization of telecom by adopting Telecom Policy of 1994. Telephonepenetration in India is currently 3.5%. Cellular phone distribution is about 0.25%.

The Union Ministry of Communication supervises all operations of the industryand determines policy guidelines. The Telecom Regulatory Authority of India

(TRAI) is the regulatory body that determines toll rates and act as a disputesettlement body. Many players have entered the market. The major players areBharti Airtel, Reliance Infocomm, BSNL, Hutch and Idea. In the developedcountries, growth in telecom is in value added services, but in the developingcountries like India, the priority is on providing basic telephony and using telecomto improve peoples lives. Circle: Circles are defined by telecom regulations. Acircle typically covers the full state, and in some cases neighboring states, forexample, Maharashtra and Goa is one circle. Similarly Jharkhand & Bihar,Madhya Pradesh & Chhatishgarh, West Uttar Pradesh and Uttaranchal are someother example of combined circle. UP is the only state which is divided into twotelecom circles, West UP and East UP. In January 1995 tenders were invited for

cellular services in 20 telecom circles. The circles were roughly analogous withstates of India and were divided into A, B and C categories. These categoriesasked on the perceived business potential. Table on next page shows categorywise division of circles


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Category A Category B Category C

Maharashtra Kerala Himmachal Pradesh

Gujarat Punjab Bihar

Andhra Pradesh Haryana Orissa

Tamil Nadu Uttar Pradesh (West) AssamUttar Pradesh (East) North East

Rajasthan

Madhya Pradesh

West Bengal

When you make calls within your own circle, they are called Intra Circle andwhen you make calls to places outside your own circle, they are Inter Circle.

Technology

Since the first system began commercial operation in 1991, Global System forMobile Communication (GSM) has become the globally accepted standard.Wireless service operators around the world have selected GSM basedtechnologies for the advanced digital wireless communications network. CodeDivision Multiplexing Access (CDMA) introduced by Tata teleservice for the firsttime in 2002, also revolutionized the telecom sector. Government of India hastaken steps to permit 100% Foreign Direct Investment (FDI) in order to attractforeign players who will bring their technical expertise and know how.

Size

Indian telecom industry has 50 million line telephones network including mobilephones. The growth rate in mobile phone industry is almost 100% per year.However, the tele density is just 5% as against the world average of 15%.

According to Cellular Operators Association of India (COAI) the industry,expected to be among the worlds fastest growing mobile markets this decade.


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COMPANYPROFILE

RELIANCE ADA GROUPYour browser may notsupportdispl ay ofthisimage.

Think Bigger Think Better

The Reliance Anil Dhirubhai Ambani Group is among Indias top three privatesector business houses on all major financial parameters, with a marketcapitalization of Rs 100,000 crore (US$ 22 billion), net assets in excess of Rs31,500 crore (US$ 7 billion), and net worth to the tune of Rs 27,500 crore (US$ 6billion)

Across different companies, the group has a customer base of over 50 million,

the largest in India, and a shareholder base of over 8 million, among the largestin the world.

Through its products and services, the Reliance - ADA Group touches the life of1 in 10 Indians every single day. It has a business presence that extends to over4,500 towns and 300,000 villages in India, and 5 continents across the world.

The interests of the Group range from communications (RelianceCommunications) and financial services (Reliance Capital Ltd), to generation,transmission and distribution of power (Reliance Energy), infrastructure andentertainment.


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RELIANCE ADA GROUP STRUCTURE

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COMPANIES OF ADA -GROUP

RELIANCE CAPITALReliance Capital is one of Indias leading and fastest growing private sectorfinancial services companies, and ranks among the top 3 private sector financialservices and banking companies, in terms of net worth.

The company has interests in asset management and mutual funds, life andgeneral insurance, private equity and proprietary investments, stock broking andother activities in financial services.

RELIANCE COMMUNICATIONS LIMITED

The flagship company of the Reliance ADA Group, Reliance CommunicationsLimited, is the realization of our founders dream of bringing about a digitalrevolution that will provide every Indian with affordable means of communicationand a ready access to information.

The company began operations in 1999 and has over 20 million subscriberstoday. It offers a complete range of integrated telecom services. These includemobile and fixed line telephony; broadband, national and international long

distance services, data services and a wide range of value added services andapplications aimed at enhancing the productivity of enterprises and individuals.

RELIANCE ENERGY LIMITED

Reliance Energy Limited, incorporated in 1929, is a fully integrated utilityengaged in the generation, transmission and distribution of electricity. It ranksamong Indias top listed private companies on all major financial parameters,

including assets, sales, profits and market capitalization.

It is Indias foremost private sector utility with aggregate estimated revenues ofRs 9,500 crore (US$ 2.1 billion) and total assets of Rs 10,700 crore (US$ 2.4billion).

Reliance Energy Limited distributes more than 21 billion units of electricity to over25 million consumers in Mumbai, Delhi, Orissa and Goa, across an area that


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spans 1,24,300 sq. kms. It generates 941 MW of electricity, through its powerstations located in Maharashtra, Andhra Pradesh, Kerala, Karnataka and Goa.

The company is currently pursuing several gas, coal, wind and hydro-basedpower generation projects in Maharashtra, Uttar Pradesh, Arunachal Pradesh

and Uttaranchal with aggregate capacity of over 12,500 MW. These projects areat various stages of development.

Reliance Energy Limited is vigorously participating in emerging opportunities inthe areas of trading and transmission of power. It is also engaged in a portfolio ofservices in the power sector in Engineering, Procurement and Construction(EPC) through a network of regional offices in India.

RELIANCE HEALTH

In a country where healthcare is fast becoming a booming industry, RelianceHealth is a focused healthcare services company enabling the provision ofsolution to Indians, at affordable prices. The company aims at providingintegrated health services that will compete with the best in the world. It alsoplans to venture into diversified fields like Insurance Administration, Health careDelivery and Integrated Health, Health Informatics and Information Managementand Consumer Health.

Reliance Health aims at revolutionizing healthcare in India by enabling ahealthcare environment that is both affordable and accessible through

partnerships with government and private businesses.

RELIANCE MEDIA & ENTERTAINMENT

As part of the Reliance - ADA Group, Reliance Entertainment is spearheadingthe Groups foray into the media and entertainment space. RelianceEntertainments core focus is to build significant presence for Reliance in theEntertainment eco-system: across content and distribution platforms. The key

content initiative are across Movies, Music, Sports, Gaming, Internet & mobileportals, leading to direct opportunities in delivery across the emerging digitaldistribution platforms: digital cinema, IPTV, DTH and Mobile TV.

Reliance ADA Group acquired Adlabs Films Limited in 2005, one of the largestentertainment companies in India, which has interests in film processing,production, exhibition & digital cinema.


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Reliance Entertainment has made an entry into the FM Radio business throughAdlabs Radio www.big927fm.com. Having won 45 stations in the recent bidding,BIG 92.7 FM is already Indias largest private FM radio network with 12 radiostations across the country as on 28th February 2007, with many more to belaunched in the coming months.

Other major group companies

Reliance Capital and Reliance Energy are widely acknowledged as the marketleaders in their respective areas of operation.

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Reliance Energy Ltd. Reliance Mutual Fund

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Harmony Reliance Communications


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Reliance General Insurance Reliance Anil Dhirubhai Ambani Group



Reliance Life Insurance Reliance Portfolio Management Service


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FOUNDER

Dhirajlal Hirachand Ambani popularly known as Dhirubhai Ambani has becomecorporate Indias living legend. A high school dropout from Chorvad in Gujarats

Junagadh district, the son of a Gujarati schoolteacher, he went on to become thefounder-patriarch of the giant Reliance-ADA Group.

Think big. Think differently. Think fast. Think ahead. Aim for the best was thephilosophy of the founder, the legendary Dhirubhai Ambani. He believed inproviding Better, cheaper and faster services.

As with all great pioneers, there is more than one unique way of describing thetrue genius of Dhirubhai: The corporate visionary, the unmatched strategist, theproud patriot, the leader of men, the architect of Indias capital markets, and thechampion of shareholder interest. But the role Dhirubhai cherished most was

perhaps that of Indias greatest wealth creator. In one lifetime, he built, startingfrom the proverbial scratch, Indias largest private sector enterprise.

When Dhirubhai embarked on his first business venture, he had a seed capital ofbarely US$ 300 (around Rs 14,000). Over the next three and a half decades, heconverted this fledgling enterprise into an Rs 60,000 crore colossusanachievement which earned Reliance a place on the global Fortune 500 list, thefirst ever Indian private company to do so.

Dhirubhai is widely regarded as the father of Indias capital markets. In 1977,when Reliance Textile Industries Limited first went public, the Indian stock market

was a place patronized by a small club of elite investors which dabbled in ahandful of stocks.

Undaunted, Dhirubhai managed to convince a large number of first-time retailinvestors to participate in the unfolding Reliance story and put their hard-earnedmoney in the Reliance Textile IPO, promising them, in exchange for their trust,substantial return on their investments. It was to be the start of one of greatstories of mutual respect and reciprocal gain in the Indian markets. UnderDhirubhais extraordinary vision and leadership, Reliance scripted one of thegreatest growth stories in corporate history anywhere in the world, and went onto become Indias largest private sector enterprise.

Through out this amazing journey, Dhirubhai always kept the interests of theordinary shareholder uppermost in mind, in the process making millionaires outof many of the initial investors in the Reliance stock, and creating one of theworlds largest shareholder families.


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CHAIRMAN

Regarded as one of the foremost corporate leaders of contemporary India, AnilDhirubhai Ambani is the Chairman of all listed Group companies, namely:Reliance Communications, Reliance Capital, Reliance Energy and RelianceNatural Resources Limited.

Mr. Ambani is a Bachelor of Science from the University of Bombay and an MBAfrom The Wharton School, University of Pennsylvania, USA.

Till recently, he also held the post of Vice Chairman and Managing Director inReliance Industries Limited (RIL), Indias largest private sector enterprise.

Anil D Ambani joined Reliance in 1983 as Co-Chief Executive Officer, and wascentrally involved in every aspect of the companys management overthe next 22 years.

He is credited with having pioneered a number of path-breaking financialinnovations in the Indian capital markets. He spearheaded the countrys firstforays into the overseas capital markets with international public offerings ofglobal depositary receipts, convertibles and bonds. Starting in 1991, he directedReliance Industries in its efforts to rise over US$ 2 billion. He also steered the100-year Yankee bond issue for the company in January 1997.

He is a member of:

Wharton Board of Overseers, the Wharton School, USA. Central Advisory Committee, Central Electricity Regulatory Commission Board of Governors, Indian Institute of Management, Ahmedabad Board of Governors Indian Institute of Technology, Kanpur

In June 2004, he was elected for a six-year term as an independent member ofthe Rajya Sabha, Upper House of Indias Parliament a position he chose to

resign voluntarily on March 25, 2006.


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INTRODUCTION TO RELIANCE COMMUNICATIONS

ADA GROUP

Reliance Communications is the flagship company of the Anil Dhirubhai AmbaniGroup (ADAG) of companies. Listed on the National Stock Exchange and theBombay Stock Exchange, it is Indias leading integrated telecommunicationcompany with over 30 million customers.

The business encompasses a complete range of telecom services coveringmobile and fixed line telephony. It includes broadband, national and internationallong distance services and data services along with an exhaustive range ofvalue-added services and applications. The constant endeavor is to achievecustomer delight by enhancing the productivity of the enterprises and individualswe serve.

Reliance Mobile (formerly Reliance India Mobile), launched on 28 December2002, coinciding with the joyous occasion of the late Dhirubhai Ambanis 70thbirthday, is among the initial initiatives of Reliance Communications. It markedthe auspicious beginning of Dhirubhais dream of ushering in a digital revolutionin India. Today, it can proudly claim that they were instrumental in harnessing thetrue power of information and communication, by bestowing it in the hands of thecommon man at affordable rates.

Reliance endeavors to further extend our efforts beyond the traditional valuechain by developing and deploying complete telecom solutions for the entirespectrum of society.

BOARD OF DIRECTORS

Shri Anil D. Ambani - Chairman Prof. J Ramachandran Shri S.P. Talwar Shri Deepak Shourie


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A DREAM COME TRUE

The Late Dhirubhai Ambani dreamt of a digital India an India where thecommon man would have access to affordable means of information andcommunication. Dhirubhai, who single-handedly built Indias largest private

sector company virtually from scratch, had stated as early as 1999: Make thetools of information and communication available to people at an affordable cost.They will overcome the handicaps of illiteracy and lack of mobility.

It was with this belief in mind that Reliance Communications (formerly RelianceInfocomm) started laying 60,000 route kilometers of a pan-India fiber opticbackbone. This backbone was commissioned on 28 December 2002, theauspicious occasion of Dhirubhais 70th birthday, though sadly after hisunexpected demise on 6 July 2002.

Reliance Communications has a reliable, high-capacity, integrated (both wireless

and wire line) and convergent (voice, data and video) digital network. It iscapable of delivering a range of services spanning the entire infocomm(information and communication) value chain, including infrastructure andservices for enterprises as well as individuals, applications, and consulting.

Today, Reliance Communications is revolutionising the way India communicatesand networks, truly bringing about a new way of life.

Reliance Communications Limited (RCOM) announced its auditedconsolidated financial results for the twelve months ended March 31, 2007.

Highlights of the financial performance in this period are:

Net Profit of Rs. 3,163 crore (US$ 734 million), higher by 612% compared to NetProfit of Rs. 444 crore (US$ 103 million)

EBITDA at Rs. 5,720 crore (US$ 1327 million), growth of 126%. EBITDA marginexpands to 40% from 24%, with continued expansion in profitability across allbusinesses Personal, Global and Enterprise

Revenue growth of 34% at Rs. 14,468 crore (US$ 3,357 million) fromRs. 10,766 crore (US$ 2,498 million)

Shareholders Equity (Net Worth) increases to Rs. 22,931 crore (US$ 5,320million) from Rs. 11,742 crore (US$ 2,724 million) among thetop three companies in India


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Conservative capital structure - Net Debt to Equity Ratio down to 8%,from 28% last year

Commenting on the results, Mr. Anil Dhirubhai Ambani, Chairman,Reliance Communications Limited, said:

We are delighted at the many firsts and record achievements at RelianceCommunications, in the first year of our listing.

We have created more than Rs. 60,000 crore (US$ 13.9 billion) of wealth forour 2 million shareholders, in the very first year.Profits increased more than 6 times during the year, and with the 10% maidendividend, we have become the first telecom company in India to rewardshareholders through a dividend payout. Profitability has shown a consistentupward trend, and in the fourth quarter ended March 31, 2007, our net profitscrossed the Rs. 1,000 crore (US$ 238 million) mark. We are the fifth Indian

company to reach this landmark, and the first to achieve this in the very firstyear of listing.

During the year, each of our businesses recorded strong revenue growth andexpanded their margins, deriving leverage from the growing scale of operations.We look forward to another record year in FY 2007-08, and will endeavor toaccelerate our momentum of customer acquisitions, increase our share of thegrowing market, and further enhance profitability to maximizeoverall shareholder value.

During the year, RCOMs market capitalization crossed Rs. 1,00,000 crore (US$23 billion), making RCOM one of Asias 5 most valuable telecom companies, andone of Indias top 10 listed companies


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ADA GROUP VISION

Reliance Communications envisions a digital revolution that will bring about aNew Way of Life. A Digital Way of Life, for a New India .

To build a global enterprise for all our stakeholders, and A great future for our country, To give millions of young Indians the power to shape their destiny, The means to realize their full potential

With mobile devices, net ways and broadband systems linked to powerful digitalnetworks, Reliance Communications will usher fundamental changes in thesocial and economic landscape of India.

Reliance Communications will help men and women connect and communicatewith each other. It will enable citizens to reach out to their work place, home and

interests, while on the move. It will enable people to work, shop, educate andentertain themselves round the clock, both in the virtual world and in the physicalworld. It will make available television programmes, movies and news capsuleson demand. It will unfurl new simulated virtual worlds with exhilaratingexperiences behind the screens of computers and televisions.

Users of Reliance Communications full range of services would no longer needaudiotapes and CDs to listen to music. Videotapes and DVDs would not benecessary to see movies. Books and CD ROMs would not be needed to geteducated. Newspapers and magazines would not be required to keep abreast ofevents. Vehicles and wallets will become unnecessary for shopping.

Reliance Communications will disseminate information at a low cost. "Make atelephone call cheaper than a post card". These prophetic words of DhirubhaiAmbani will be a metaphor of profound significance for RelianceCommunications. Reliance Communications will regularly unfold newapplications. Continually adapt new digital technologies. Create new customerexperiences. Constantly strive to be ahead of the world.

Reliance Communications will transform thousands of villages and hundreds oftowns and cities across the country.

Above all, Reliance Communications will pave the way to make India a globalleader in the knowledge age.


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ADA GROUP VALUES

SHAREHOLDER INTEREST We value the trust of shareholders, and keep theirinterests paramount in every business decision we make, every choice weexercise

PEOPLE CARE We possess no greater asset than the quality of our humancapital and no greater priority than the retention, growth and well-being of ourvast pool of human talent

CONSUMER FOCUS We rethink every business process, product and servicefrom the standpoint of the consumer so as to exceed expectations at everytouch point

EXCELLENCE IN EXECUTION We believe in excellence of execution in large,complex projects as much as small everyday tasks. If something is worth doing, it

is worth doing well.

TEAM WORK The whole is greater than the sum of its parts; in our rapidly-changing knowledge economy, organizations can prosper only by mobilizingdiverse competencies, skill sets and expertise; by imbibing the spirit of thinkingtogether -- integration is the rule, escalation is an exception

PROACTIVE INNOVATION We nurture innovation by breaking silos,encouraging cross-fertilization of ideas & flexibility of roles and functions. Wecreate an environment of accountability, ownership and problem-solving basedon participative work ethic and leading-edge research

LEADERSHIP BY EMPOWERMENT We believe leadership in the new economyis about consensus building, about giving up control; about enabling andempowering people down the line to take decisions in their areas of operationand competence

SOCIAL RESPONSIBILITY We believe that organizations, like individuals,depend on the support of the community for their survival and sustenance, andmust repay this generosity in the best way they can

RESPECT FOR COMPETITION We respect competition because theres more

than one way of doing things right. We can learn as much from the success ofothers as from our own failures


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CORPORATE GOVERNANCE

Great corporations, like individuals, are known for their unwavering commitmentto ethical values and principles. At Reliance - ADA Group, we remain steadfast inour resolve to uphold the highest standards of integrity, transparency and

governance.

For us, corporate governance is not just about adhering to the formal letter of thelaw, but about embracing the substantive spirit that lies underneath; to movebeyond the statutory obligations.

The key aspects of our corporate governance practice are:

Monitoring of executive and director compensation Providing autonomy to the Board Implementing rigorous disclosure and transparency norms

MONITORING OF EXECUTIVE AND DIRECTOR COMPENSATION

Across each of the group companies, a Remuneration Committee assesses theoverall compensation structure and policies of the organization and makesrecommendations. These form the basis for formulating the companys executiveremuneration framework.

The Remuneration Committee consists of non-executive directors, a majority of

whom are independent. The Chairman of the Committee is an IndependentDirector. The Remuneration Committee works with full autonomy, and is free ofany managerial interference. The Committee is also empowered to call uponprofessional advice, both from within and outside the company, in the dischargeof their duties.

PROVIDING AUTONOMY TO THE BOARD

The Board of Directors of each of the group companies consists of eminent

individuals with diverse experience and expertise. The respective Board acts withautonomy and independence in exercising strategic supervision, discharging itsfiduciary responsibilities, and in ensuring that the management observes thehighest standards of ethics, transparency and disclosure.

The Board of Directors reviews all information details and transactions relating tosignificant business decisions, including strategic and regulatory matters. Every


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member of the Board, including non-executive directors, has access to allrelevant information about their respective companies.

The Board appoints a number of Committees to focus on well-defined areas ofresponsibility, with a clear mandate to make time-bound recommendations, and,

where specified, use the authority vested in them by the Board to take crucialdecisions.

IMPLEMENTING RIGOROUS DISCLOSURE ANDTRANSPARENCY NORMS

Each of the Group companies adheres to all disclosure and transparency normsrelating to corporate governance. We are committed to public disclosure, in aclear and timely manner, of our financial accounts, including both segment and

consolidated accounts, and the level and means of remuneration of our directorsand top executives. We also give out clear information on related- partytransactions, if any, that are undertaken within the group.

We strictly comply with all governance codes, listing agreements, otherapplicable laws and regulations, and, not least, our self-avowed corporate valuesand objectives.


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AN EXCITING FUTURE AT RELIANCECOMMUNICATIONS

Reliances service is based on a very simple principle: provide the world's bestcustomer experience.

This reliance has achieved through a winning combination of globalcompetencies, pioneering technology and state-of-the-art customer-centricsystems and processes.

Reliances mission of changing lives across India meant that it needed to have anationwide presence something it has achieved in a relatively short span oftime. Reliances dream of helping people create, transfer and apply knowledgechallenged them to bring together contemporary communication technology fromacross the world.

Now their operations are spread across 673 cities and span a host of variouskinds of services. Reliances business is organized around the followingcategories: wireless, wire line, wholesale, and the Web world and villagetelephony. The work is executed through different work centers like Engineering,Internet data centers, Billing and Collection centers, Systems and Applicationcenters in ERP, CRM, OSS billing, revenue assurance and functions likeCommercial, Finance, HR and IT. It manages this integrated diversity by leadingwith trust. What differentiates them and fuels their growth is leadership.

The following attributes define future leadership at Reliance Communications:

Customer centricity. Initiative and an attitude of ownership. Passion for excellence and ability to energies. Problem solving and an innovative "can do" mindset. Entrepreneurship and stretch.


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RELIANCE COMMUNICATIONS

Corporate Office: MUMBAI

Address:

Reliance Communication Ltd.Dhirubhai Ambani Knowledge CityNavi Mumbai 400709, India.

Tel No. : 3037 3333

Registered Office: GUJARAT

Reliance Communication Ltd. Reliance House,

Near Mardia Plaza, Off C.G.Road,

Ahmedabad-380006. India.

Tel No. : 3233 1401


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FUNCTIONAL DEPARTMENT AT RCOM

The allocation of work for various group of people are differently allocated whichknown as department, in order to achieve the goal of the organization. Theorientation and the activity are different with variety of role in each of the

department so that we need to understand the importance and contribution ofefforts made by the persons. All such efforts take the form of transactions andwhich finally comes to commercial department in form of transaction activitywhich has been officially recorded in books of accounts of company. Eachdepartment plays very vital role and the flow of activity is also mappedaccordingly. Telecom is different field then other company thus its very essentialto understand the Departmental activity process.

1. HR and Administration2. Marketing and Sales Department3. Technical & Network Department

4. Commercial & Legal Department or Finance Department5. Customer Care

GUJARAT ZONE DISTRIBUTION

NORTH GUJARAT

CIRCLE HEAD OFFICE AHMEDABAD SUB CLUSTER OFFICE - MEHESANA

CENTERAL GUJARAT

CLUSTER HEAD OFFICE BARODA

SOUTH GUJARAT

CLUSTER HEAD OFFICE SURAT

SAURASHTRA

CLUSTER HEAD OFFICE RAJKOT SUB CLUSTER OFFICE - GANDHIDHAM


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RESEARCH

Research objective

Research objectives include the objective of research of the researcher beforestarting any research. The researcher should determine the objective or the goalof the research for the smooth functioning of study. Predetermine objectiveshould be of such that researcher fulfils in the certain period of time at minimumcost.

Following are the research objectives, which we have developed

To check the extent of consumer satisfaction about the product andservices provided by Reliance Communication..

To identify the key success factors of the industry. To study the different environmental factors of the industry. To analyze the different competitive forces of the industry. To know the opportunities and threats of the industry. To know about the industry structure with current scenario and with major

players.

RESEARCH METHODOLOGY

This research is basically done to full fill my goal of to check the Market ofPrepaid Card Services Of Reliance Communication.

The initial work started with a series of brain storming session to come to acommon list of objectives to be satisfied during the research and to prepare aprecise plan of action to ensure the fulfillment of the objectives in a systematicmanner.

The method selected for the project was the survey method. The flow of work forthe same was as under:


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Research Design

Descriptive Research includes survey and fact-finding inquires of different kinds.It is a systematic and rigid design where there is pre-defined sampling method.The major purpose of descriptive research is description of the state of affairs as

it exists at present. Our research is based on studying the consumer awarenessTowards Pre Paid Card Services

Exploratory Research includes gathering of preliminary information that willhelp to define the problems and suggest hypothesis. So the appropriate designfor our research is Descriptive as well as Exploratory Research.

Sampling Plan

Marketing researchers usually draw conclusions about large groups ofconsumers by studying a small sample of the total consumer population.

A Sample is a segment of population selected to represent the population as awhole. Designing the sample requires three decisions.

1. Who is to be surveyed (what sampling unit)

2. How many people should be surveyed (what sampling size)

3. How should the people in the sample be chosen (what samplingprocedure)

Sampling Size

Customers 200

The selected size of sample shall be enough to get broader perception of thepeople in these areas.

I have chosen a sample size of 150 customers for market survey and 50 retailersfor market survey.

Also I have assumed that customers and retailers surveyed throughquestionnaires will provide us with truthful data.


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Scope of the study

This study shall help the managers in taking various decisions like:

Which companys sales are higher and why?

Which service Pre-paid or Post-paid is in demand and why?

What company should do to sale the Post-paid in retail outlets?

Are the retailers satisfied with profit margin and of differentcompany in this industry?

How many people are satisfied with the after sales service of Ideaas well as their competitors?

How many people want to buy the service of Idea as well their

competitors post-paid or Pre-paid?

Limitation of the study:

The euthenics of the conclusion of this study might be affected by the followinglimitations.

The sample size is of 150 for customers and 50 for retailers and this maynot exactly reflect the opinions of the entire population.

The study is limited to Ahmedabad and Rajkot City only. The conclusion is dependent on the respondents personal bias.


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Source of Data

The data has been collected both from Primary sources as well as Secondarysources.

Primary Data: Information Collected for specific purpose at hand. The primarydata has been collected by undertaking a survey.

Secondary Data: Information that already exists somewhere, having beencollected for another purpose. The secondary data has been collected throughvarious sources such as: Libraries, Internet, Companies Website, Magazines,News papers etc.

Contact MethodThe customers were contacted personally. Personal Interview was carried outfrom each of the member of the group.

Research Instruments

The information was collected with the help of Questionnaire. The Questionnaireincludes both Open-ended as well as Close-ended questions. I Have Included 11

Close Ended Questions And 2 Open Ended Questions in My Questionnaire .

Sample size

I have chosen a sample size of 150 customers for market survey and 50 retailersfor market survey.

Also I have assumed that customers and retailers surveyed throughquestionnaires will provide us with truthful data


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DATA INTERPRETATION

My questionnaire includes Ten questions and two sub questions with thecombination of open ended and closed ended questions. Here I am presentingthe analysis of the data that I have collected through questionnaires.

1) What types of Mobile Connection you are using for your Mobile?

Prepaid

Postpaid

From The Above Study we can Find that the 78.50% People are HoldingPrepaid Card Services From Various Telecom Company Whether Just21.5% People Are Using Post Paid Services For Their Mobile.

2) Which Telecom companys connection you are using for your mobile?

Vodafone BSNL Airtel Idea Reliance TATA Virgin

According to survey of people those who are having mobile 26 percentage ofThem are Using Vodafone While 20 percentage of population were usingAirtel, 16 Percentage of People Using Idea cellular service while 16percentage were using Reliance Telecom Services. 19.5 percentages wereusing services of BSNL and that of 2.5 percentages were of Tata using thedifferent services provided by the company.

3) (If Prepaid then) Are You Satisfied with your Prepaid Customer CareServices?

Yes

No


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As per above survey 78 percent were satisfied with their Prepaidcard services provided by the company, while 22 percent werenot satisfied with the after sale service provided TelecomCompany.

4) (If No then) do you wants to Change your mobile Services?

Yes

No

From the research it is Found that the 28.5 percentage Of People wants

to Changes in their Mobile services which are provide by thereTelecom company Whether 71.5 Percentage Of People Are dontwants to make any Changes in There available services.

5) (If No then) Do you want any improvement in the below mentioned services?

Network Terrific Plan Validity Period Talk time Call Rates Innovative Service Powerful SMS service

According to Respondents Maximum People Wants to Change in TheirNetwork Services, 39 of them Wants changes in Call Rates and 33 PeopleNeed Changes in SMS Services, 44 of Them Wants to get Improvement inTalk time, Whether 39 people wants to get Reduce Their Call Rates Whichis Provide by There Telecom Company.

6) Are you getting all the information on Product, Services, Offers and Scheme

of Reliance Communications?

Yes

No


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As Per the Research We Come to Know that the 56.5 Percentage of Peopleware having Information of Product, Services, Offers and SchemesOf Reliance Communication While 43.5 Percentage People are not awareAbout It.

7) What is your Opinion for Talk time Available in per Recharge?

Satisfied Not Satisfied

Need Improve Cant Say

According to the sample taken we have assessed that most of the users are

very much satisfied with Talk time Available in per Recharge, 18 Percent OfThem Not Satisfied Whether 13 Percentage Of Them Wants Improvement Inthere Available Services

8) Are you aware of all the Value Added Service which are currently provided byReliance Communications? (Select from below)

Voice mail service 3-way call conferencing

Call waiting

Call hold

Call divert M-blog Yahoo messenger MMS

Mobile Mail Web Mail

Caller Tunes Talking Messaging Service (TMS)

In Above Research We Found That the People are Not 100 Percent Aware

of All Services Provide by R-Com. There are Many Value Added ServiceLike Call Waiting, Call Divert, M-Blog, Caller Tunes Are Highly Famous inPeople But Some Exception are also their with Value Added ServicesProvide By Reliance Communications.


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9) As per Your Opinion Which Telecom Company is Best Service Provider?(Give Rank)

Vodafone BSNL Airtel

Idea

Reliance

TATA

Virgin

As Per Above Survey Vodafone Is the Best service Provider,28.5 percentageof People Believe That the Airtel Is Good Service provider,13.5 Percentageof People Having Opinion That BSNL Is also One Of the Good telecomCompany, and 7 percentage People Believe That Reliance and Idea is AlsoBest Services Provider in Telecom Industry.

10) If you get a chance to Switch Over to other Telecom Services, then whichCompany would you prefer?


Idea Reliance TATA

Other

According to Respondents we have Observe that the 35.5 Percentage PeopleWants to Switch over on Vodafone Then after Airtel Having SecondPreference for Changing Mobile Services and 24.5 Percentage Of peopleWants To Switch over On Reliance If They Get Chance to Change TheirMobile Pre Paid Card Services.

11) What is Your Opinion about Reliance Mobile Prepaid Card Services?

Good Best Better

Average Cant Say

]


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As per the Respondents We have Found that the 25 Percentage of peopleHaving Opinion about Reliance Prepaid Card Service Is Good, 19percentage people Believe that it is Best And 20 percentage HavingOpinion that It is Average. Whether 24.5 percentages that are using OtherMobile Services they cant say about its Prepaid Services.


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Findings&Suggestions

Findings

Following are the findings of the research done on the extent of Pre paid CardServices of Reliance Communication

1. from the study we have seen that most of the Reliance mobile users arein Pre Paid Card segment

2. Majority of the users from the sample size perceive Reliance Telecom asa good telecom service provider company.

3. Reliance Telecom is successful in attracting users of the other companies.4. Most consumers are satisfied with the network connectivity of the

company.5. Tariff charges of the company are also not found exorbitant by the users.6. According to research instruments provided by the company are also up to

the mark.7. Scheme and offers are provided by the company are also designed by

keeping the benefit of the consumers in the mind.8. Internet facility provided by Reliance Telecom to the users Reliance Broad

Band is also found satisfying the As Per customer needs.9. The level of unsatisfaction is also prevailing among the users but is very

low in extent.

Suggestions

1. Reliance Telecom should launch attractive offers and schemes particularlyin land line segment in order to increase number of switchers and tocompete BSNL.

2. Company should increase the quality of its services and should undertakethe promotion activity in a way by which they reach more closer to the

consumers.3. Reliance Telecom already have a good infrastructure and also have good

network connectivity but then also it should increase its connectivity invillages area, towns and state highways by installing mobile towers overtheir.

4. In order to increase the market share the company should still lower downits tariff charges in order to compete with other players.

5. It should introduce some good and stylist handsets at affordable rates.


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6. Company should do the efforts in order to increase the internet speed.7. Among the respondents some have complains relating to bill and there are

complains from several respondents that their are unnecessary calls fromthe company relating to New Services.

8. Company should also make efforts to increase the quality of after sales

services.9. Company should also see to customers are properly answered after thesales is maid


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Conclusion

ConclusionAfter studying and analyzing the customer responses I have conclude that theoverall attractiveness of the telecom industry is moderately high and theconsumers of the Reliance Communication are also well satisfied by the productsand services provided by the company. The followings are the main reasons forthis conclusion.

The companys most consumers are happy with their operators product andservices

The companys overall growth potential is high. The competition currently permits adequate profitability for the company. The competitive forces are moderate and they do not create more stress

on the company in the way of its growth. Companys promotional activities and advertisements are capable of

attracting new users.

Company has tremendous potential and strength in terms of trained technicalmanpower, training centers, and software development potential, motivated andenthusiastic industry players along with foreign investment backup. Companyalso has an excellent R&D and training standards.

New rules, liberalization and deregulation can and is bringing about significantprogress. According to former World Bank economist Surjit Bhalla, every 10million new phones lines add 0.5% to annual economic output. This meansincreased productivity because these inexpensive phones prove to be a lifelinefor business.

Thus India is definitely in a win-win situation but its players need to unite andwork really hard. It seems that telecom is becoming more exciting than Softwareand can well become more stable than the software industry has been.


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Annexure

QUESTIONNAIRE

Name: - .

Address: - ..

...

...

Contact No: - .

1) What types of Mobile Connection you are using for your Mobile?

Prepaid

Postpaid

2) Which Telecom companys connection you are using for your mobile?


Idea Reliance TATA

Virgin

3) (If Prepaid then) Are You Satisfied with your Prepaid Customer CareServices?

Yes

No


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4) (If No then) do you wants to Change your mobile Services?

Yes

No

5) (If No then) Do you want any improvement in the below mentioned services?

Network Terrific Plan

Validity Period Talk time

Call Rates Innovative Service

Powerful SMS service

6) Are you getting all the information on Product, Services, Offers and Scheme ofReliance Communications?

Yes

No

7) What is your Opinion for Talk time Available in per Recharge?

Satisfied Not Satisfied

Need Improve

Cant Say

8) Are you aware of all the Value Added Service which are currently providedby Reliance Communications? (Select from below)

Voice mail service 3-way call conferencing

Call waiting Call hold

Call divert M-blog

Yahoo messenger

MMS

Mobile Mail Web Mail

Caller Tunes Talking Messaging Service (TMS)

9) As per Your Opinion Which Telecom Company is Best Service Provider?(Give Rank)


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Idea Reliance TATA

Virgin

10) If you get a chance to Switch Over to other Telecom Services, thenwhich Company would you prefer?


Idea Reliance TATA

Other

11) What is Your Opinion about Reliance Mobile Prepaid Card Services?

Good Best Better

Average Cant Say

12) Any Suggestion for Reliance Prepaid Card Services?

13) Whats Your Suggestion for Service Charge, Call Rates, ValidityPeriod Provide by Reliance Mobile Services?


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BIBLIOGRAPHY

The websites concerned are

gm.relianceada.com

www.reliancecommunications.co.in

www.telecom.com

www.indianinfoline.com

www.relianceadagroup.com

www.dhirubhai.net

asha and alpa

Documents