penetrarion in rural telecom

8/14/2019 Penetrarion in Rural Telecom

1/40

A

Project Report

On

PENETRATION IN RURAL

TELECOM

Submitted as SIP Program of Masters of

Business Administration

TO

Institute of Business Management and

Research,Ahmedabad

Developed By

UTKARSH SINGH

Guide

Mr. ANISH

Zonal Manager

Bharti Airtel


2/40

2

Acknowledgement

I should like to thank Mr.Anish for having provided me with this opportunity to work on

such an interesting topic under her invaluable guidance.

I am also thankful to Mr. Meharban Singh, R.S.O. Hatta and Mr. Samit Agarwal, R.S.D.

Hatta for extending help and valuable inputs in the process of discussion.

My thanks are also due to all those people who agreed to give time out of their busy

schedule and provided us with various insights and information about the project.

Finally I should like to thank all the village people, whose names are unknown to me, for

extending their unconditional hospitality wherever possible and also for participating in

informal discussions with us to quench our desire to catch a glimpse of rural life while

working on the project.

Penetration in Rural Telecom


3/40

2

COVER PAGE

1. Introduction 4

2. Evolution of the industry-Important

Milestones.. 5

3. Journey of telecom sector after 1992s

Liberation policy 6

4. Major Players in different segments of Indian

telecom industry.. 7

5. Economical factors.. 8

6. Telecommunication Market in India.. 10

7. Rural telecom in India.... 11

8. Bharti Airtel . 15

9. Bharti Airtel in Rural Market 23

10. Research report. 25

11. Conclusion.. 38

Pen

etration in Rural Telecom


4/40

2

The telecom network in India is the fifth largest network in the world meeting up

with global standards. Presently, the Indian telecom industry is currently slated to

an estimated contribution of nearly 1% to Indias GDP.

Introduction

The Indian Telecommunications network with 110.01 million connections is the fifthlargest in the world and the second largest among the emerging economies of Asia.

Today, it is the fastest growing market in the world and represents unique opportunities for

U.S. companies in the stagnant global scenario. The total subscriber base, which has

grown by 40% in 2005, is expected to reach 250 million in 2007.

According to Broadband Policy 2004, Government of India aims at 9 million

broadband connections and 18 million internet connections by 2007. The wireless

subscriber base has jumped from 33.69 million in 2004 to 62.57 million in FY2004- 2005.

In the last 3 years, two out of every three new telephone subscribers were wireless

subscribers. Consequently, wireless now accounts for 54.6% of the total telephone

subscriber base, as compared to only 40% in 2003. Wireless subscriber growth isexpected to bypass 2.5 million new subscribers per month by 2007. The wireless

technologies currently in use are Global System for Mobile Communications (GSM) and

Code Division Multiple Access (CDMA). There are primarily 9 GSM and 5 CDMA

operators providing mobile services in 19 telecom circles and 4 metro cities, covering 2000

towns across the country.



5/40

2

Evolution of the industry-Important

Milestones

History of Indian Telecommunications

Year

1851 First operational land lines were laid by the government near Calcutta (seat ofBritish power)

1881 Telephone service introduced in India

1883 Merger with the postal system

1923 Formation of Indian Radio Telegraph Company (IRT)

1932 Merger of ETC and IRT into the Indian Radio and Cable Communication Company(IRCC)

1947 Nationalization of all foreign telecommunication companies to form the Posts,Telephone and Telegraph (PTT), a monopoly run by the government's Ministry of

Communications

1985 Department of Telecommunications (DOT) established, an exclusive provider ofdomestic and long-distance service that would be its own regulator (separate from

the postal system)

1986 Conversion of DOT into two wholly government-owned companies: the VideshSanchar Nigam Limited (VSNL) for international telecommunications and

Mahanagar Telephone Nigam Limited (MTNL) for service in Metropolitan areas.

1997 Telecom Regulatory Authority of India created.

2000 DoT becomes a corporation, BSNL

2008 3-G Service is launched



6/40

2

Journey of telecom sector after 1991s

liberalization policy



7/40

2


Basic Services

Operators

BSNL

MTNL

Reliance

TTSL

GSM Services

Operators

Airtel

Vodafone

Idea

Reliance

BSNL

Major Players in different segments

of Indian telecom industry


8/40

2

ECONOMICAL FACTORS

# Market Share

Market Shares of Key India Mobile Operators, 2008


Airtel

TTSL

Reliance

MTNL

BSNL

CDMA Services

Operators

Reliance

BSNL

TTSL

Internet Services

Operators


9/40

2

# Market growth rate:

The high growth rates are likely to continue in the foreseeable future. Telecom

industry is posting high growth in phone subscribers. The number of

subscribers increased by 33.8% to 74.31 million for the period Apr-Feb 04, compared to the corresponding period in the previous year.

Growth in mobile phone subscribers is over 100% through out the year. The highest

growth was in May 03 when mobile subscribers increased by 679% to 2.26 million over

corresponding month of previous year. The growth rate was slowest in Feb. 04 at 111% to

1.67 million.

In February 04, 1.67 million (including WLL (M)) mobile phones subscribers were

added. Compared to Jan.04, WLL (mobile) phones increased by 5.4% to 7.02 million,

where as cellular phones increased by 5.6% to 24.65 million. Compared to Jan.04, mobile

companies registered subscriber increase of 4% to 7.67 million in metros, 5% to 9.01

million in A circle, 6% to 6.94 million in B circle and 10% to 1.02 million in C circle.

GSM and CDMA subscription numbers:

YearGSM Subscribers

(millions)GSM Annual

growthCDMA Subscribers

(millions)CDMA Annual

growth

2000 3.1 94% - -

2001 5.05 76% - -

2002 10.5 91% 0.8 -

2003 22.0 110% 6.4 700%

2004 37.4 70% 10.9 70%

2005 58.5 57% 19.1 75%

2006 105.4 80% 44.2 131%

2007 180.0 71% 85.0 92%



10/40

2

India Telecom Subscribers, 2002-2008

Telecommunication Market in India

Telecommunication Market in India is one of the most rapidly growing industries in

India. It is considered to be a real boon not only to the country's economy but also to its

inhabitants as it has made life easier and faster altogether.

The telecom industry in India has grown phenomenally in 5 years. In 2000, the

telephone facility was available to only 3 people out of every 100 persons, whereas in

2005 it went up to 10.66 persons as against every 100 people. This outstanding growth in

the Indian telecom industry is considered to be one of the most attractive attributes in the

exponential accretion of wireless phones across the country. The government of India is

planning up for an increase in the production of telephones by 2007 accounting for around

23 telephones in every 100 persons by launching 250 million phones in the country. Oneof the largest contributors in the alarming success of the telecom industry in India has

been the wireless market that has leaded the telecom revolution in India.

This wireless market has attracted a number of consumer attentions, which has

brought in larger investiture to India. The Total Market comprising of semi-conductors in

India stood at USD 2.82 billion in 2005 within which the telecommunication industry

acquired about 45.4 percent of the total market. The telecom market in India had acquired

around 8 percent of the Indian Total Available Market for semi-conductors that were

valued at USD 1.14 billion.

The equipments for telecommunication are usually imported in bulks in the name of

CBUs and SKDs. This import-trading sector in the telecommunication industry is reflected

in the Total Market and the Total Available Market. Some of the major telecommunication

P

enetration in Rural Telecom


11/40

2

markets in India include wireless handsets found in GSM and CDMA range, wireless

switches, wireless infrastructure equipments, PBX systems, electronic push button

telephones, access network instrumentation, modems and VoIP phones. Among all these

sectors, the wireless handsets and wireless infrastructure acquires around 88 percent of

the total market of telecom industry which is considered to be the largest share in the

Telecommunication Market in India as accounted in 2004. In the Total Available Market,wireless switches are the most leading sector, as it possesses a domestic manufacturing

base.

The Telecommunication industry in India comprises a range of semi-conductor

elements namely DSPs, Analog ICs, ASICs, and Micro controllers. While the wireless

sector in the telecom market in India was growing leaps and bounds, DSPs acquired the

largest share and brought in large dividends as compared to the other semi-conductors.

The wireless sector was not such a high-profiled one before but with the advent of ITI and

other multinational corporations, the wireless sector of the telecom market started looming

large and it also experienced a craze in the wireless equipments. It is assumed to be one

of the biggest drivers in the telecom market in the recent future.

The Telecommunication Market in India is climbing the ladder of success quite

rapidly by introducing newer and innovative sectors which are absolutely technology

based as well. The government of India has confirmed the phenomenal success of the

telecom industry that will be achieved by it in the years to come.

Rural Telecom in IndiaRural markets in India constitute a wide and untapped market for many products and

services which are being marketed for the urban masses. There is a demand for

telecommunication services to be provided to in these areas. Till now it was government

which was trying to reach the villages through various initiates, but the rural tele-density is

very poor and can be improved only through the introduction of modern and suitable

technology along with participation from the private operators. The paper here would like

to make a strong case for the use of mobile technology for rural areas versus the land line,

and that the initiative has to come from the private telecom operators rather than the

government end. The various marketing issues related to marketing of telecommunication

services in rural areas area seen through the 4 As framework (Awareness, Affordability,Acceptability and Availability) and the experiences of other countries studied for learning.

The structure of paper is as follows, the first section would give a brief introduction to rural

markets in India and the current status of telecommunication services. Section two talks

about the linkage which exists between the telecommunication services and development,



12/40

2

followed by a detailed section on the Bottom of the pyramid and 4 As model to address

rural telecommunication issues. Next section looks at the successful experiences of four

countries in rural telecommunication in rural areas. In the conclusion the implications are

brought out for the Indian market.

India lives in villages, close to 72 percent of Indian population lives in rural areas. In

the country we have 6.36 lakh villages out of which only 13 percent have population above

2000. The rural economy contributes nearly half of the countrys GDP (ETIG 2002-03)

which is mainly agriculture driven and monsoon dependant. More than 50 percent of the

sales FMCG and Durable companies come from the rural areas. The McKinsey report

(2007) on the rise on consumer market in India predicts that in twenty years the rural

Indian market will be larger than the total consumer markets in countries such as South

Korea or Canada today, and almost four times the size of todays urban Indian market and

estimated the size of the rural market at $577 Billion. Census of India defines rural as any

habitation with a population density less than 400 per sq. km., where at least 75 percent of

the male working population is engaged in agriculture and where there exits no

municipality or board, and the same definition being accepted for the paper here. Amarketer trying to market his product or service in the rural areas is faced by many

challenges; the first is posed by the geographic spread and low population density in the

villages in the country. The table below gives us the population and village size details in

the country.

Table 1: Rural Population Statistics

Population Number of Villages Percentage of total villages

Less than 200 114267 17.9

200-499 155123 24.3

500-999 159400 25

1000-1999 125758 19.7

2000-4999 69135 10.8

5000-9999 11618 1.8

10000 & above 3064 0.5

Total 636365 100


13/40

2

P


Mobile Subscriber Base

The second challenge is from the low purchasing power and limited disposable incomes in

these parts of the country. But this has been changing in the last few decades with

agricultural growth rate faster in the1990s and 80s than the 1970s (CMIE 1996). Green

revolution through the introduction of hybrid seeds, fertilizers and systematic irrigation had

a major impact on agricultural productivity, and combined with it was a price policy which

ensured minimum support price, and in turn insulated the farmers from market risk, cheap

input policy and a stable demand (Vyas 2002). These all lead to a quantum jump in the

income of farmers in the country. Initially the impact of green revolution could be seen only

in the prosperous agricultural states of the country but now slowly its influence has spread

across the country with the increase in irrigation (Bhalla & Singh 2001). Though the

income levels overall are still very low there are many pockets of prosperity which have

come up in the rural areas in the country. According to NCAER 2002, the number of rural

middle class house holds at 27.4 million is very close to their urban counterpart at 29.5

million. The improvement in the support prices being offered to farmers also has an impact

on the disposable income with the farmers. And between, 1981-2001 there has beentremendous improvement in the literacy levels, poverty and rural housing in the villages of

the country. Rural literacy levels have improved from 36 percent to 59 percent, the number

of below poverty houses have declined from close to half to 46 percent and the number of

pucca houses have doubled from 22 percent to 41 percent. These figures provide us with

a clear picture that rural India with the increase in agricultural income and improving

standards is on the verge of becoming a large untapped market which marketers have

been aspiring for a very long period of time.


14/40

2

P

enetration in Rural TelecomAccording to the NCAER Rural Infrastructure Report (2007), the demand for

telecommunication services are surging across rural India, as middle class and upper

classes are growing in most villages but the teledenisty levels are very low 1.67 per 100

makes it an attractive market for marketers. The next section specifically looks at the

current status of rural telecom and the technology perspective. Residents compared with

average of 8.59 overall and 25.90 in Indian cities. Table below gives us the details of the

urban rural divide.

Table 2: Rural Urban Divide

Rural Urban

0.01 mn Mobile Phones 75.685 mn

13.9 mn Fixed Lines 36.988 mn

0.01% Private Operator share 53.54%

Approx 20 Lakh PCOs Approx 35 Lakh

Approx 14 mn Total Number of Phones Approx 112 mn

Approx 2% Teledensity Approx 31%

15% (by 2007) Teledenisty Targets 43%

The characteristics of the rural areas, low population density and spread out

population, difficult topographical and climatic conditions make it difficult to provide

telecommunication service of acceptable quality by traditional means at affordable prices

(CDOT, 2007). But with the development of new appropriate technology like wireless

technologies have been accepted that it is possible to overcome these difficulties.


15/40

2

Wireless technology has been proposed to be the first viable infrastructure to rural and

underdeveloped areas.

P

enetration in Rural TelecomBHARTI AIRTEL

If there is one sector that exemplifies the success of Indias reforms, it is probably

telecom. And within telecom, if there is one company that is a shining example of

entrepreneurship in action, it is undoubtedly Bharti. Sunil Mittal certainly backed the right

horse when he chose Indias fledgling, high-risk telecom sector. And under hisstewardship, Bharti Airtel has galloped away to become Indias largest mobile company

with a subscriber base of 100 million.

The figures tell an incredible story. In the last seven years, the companys sales have

risen 783 times to Rs 36,962 crore in 2008-09. In the same period, its net profit improved a

whopping 65,492 times, from Rs 12 lakh to Rs 7,859 crore.

A small company with an incredible passion for growth and innovation, thats how I

would describe Bharti Airtels modest beginning in 1995. The passion has only grownbigger over the years, Sunil Mittal once said in the groups in-house magazine. Mittal had

set up the company in 1985 and it collaborated with Siemens AG of Germany to make

electronic push button phones. At that time, Mahanagar Telephone Nigam Ltd used to

provide traditional rotary dial phone sets. Since telephone subscribers were usually

affluent, Bhartis push button instrument was a big hit.
http://timesofindia.indiatimes.com/articleshow/4577705.cmshttp://timesofindia.indiatimes.com/articleshow/4577705.cmshttp://timesofindia.indiatimes.com/articleshow/4577705.cms


16/40

2

Mittal also started selling cordless phones. From there to mobile telephony was a

logical leap. In 1992, when the Narasimha Rao government announced the new telecom

policy, the group bid for a mobile telephone services licence through a new company,

Bharti Cellular. In 1994, it was awarded the licence for Delhi circle. The next year, it began

its mobile phone service under the brand name, Airtel.


Later, the company went into rapid expansion mode through a series of takeovers.

In 1997, the holding company, Bharti Televenture, acquired a 74% stake in JT Mobile,

which used to operate in Karnataka, Andhra Pradesh and Punjab. To expand operations in

Chennai, the company acquired a 95.3% stake in Bharti Mobinet from Crompton Greaves

and other partners. It also ventured into the submarine cable business through a joint

venture with SingTeli2i, Bharti Aquanet, in which Bharti had a 51% stake. This rapid

growth needed regular infusions of funds. In 1999, Bharti secured Rs 1,300 crore from

Warburg Pincus. That proved to be a smart investment Warburg earned Rs 8,500 crore

a return of around 550% when it exited Bharti in 2005. In 2000, Bharti got a majorboost when global telecom major Singapore Telecommunication (SingTel) joined as a

strategic partner. At present, SingTels effective stake in Bharti Airtel is 31%.

In 2002, Bharti Airtel raised Rs 8,300 crore from the stock market through an initial

public offer. That provided the company a much-needed war chest at a time when the

mobile telephony business had been shaken up by the entry of Reliance Industries.

In the years since, Bharti has gone from strength to strength. In 2002-03, Bharti Airtel

had an EBIDTA (earning before interest, depreciation, tax and amortization) loss of Rs 54

crore. In 2003-04, it earned a profit of Rs 815 crore, which rose to Rs 1,819 crore in 2004-05, Rs 4,360 crore in 2005-06 and Rs 7,451 crore in 2006-07. Its EBIDTA margin

improved from 17% in 2003-04 to 40% in 2006-07 and to 42% in 2007-08.

The businesses at Bharti Airtel have been structured into Three individual strategic

business units (SBUs)

1) Mobile services

2) Broadband &

3) Telephone services (B&T) & enterprise services.

The mobile services group provides GSM mobile services across India in 23 telecom

circles.

VISSION:-

First private telecommunications company to
http://timesofindia.indiatimes.com/articleshow/4577705.cmshttp://timesofindia.indiatimes.com/articleshow/4577705.cmshttp://timesofindia.indiatimes.com/articleshow/4577705.cmshttp://timesofindia.indiatimes.com/articleshow/4577705.cmshttp://timesofindia.indiatimes.com/articleshow/4577705.cmshttp://timesofindia.indiatimes.com/articleshow/4577705.cmshttp://timesofindia.indiatimes.com/articleshow/4577705.cms


17/40

2

launch long distance services.

Benchmarked by more business

Targeted by top talent

Penetration in Rural Telecom Loved by more customers

By 2010 Airtel will be the most admired brand in India

Loved by more customers

Targeted by top talent

Benchmarked by more businesses

To build India's finest business conglomerate by 2020

Supporting education of underprivileged children through Bharti Foundation

Strategic Intent:

To create a conglomerate of the future by bringing about Big Transformations through

Brave Actions.

MISSION:-

We at Airtel always think in fresh and innovative ways about the needs of our customers

and how we want them to feel. We deliver what we promise and go out of our way to

delight the customer with a little bit more.

We will meet the mobile communication needs of our customers through Error-free

service delivery

Innovative products and services

Cost efficiency

Unified Messaging Solutions

CORE VALUES

Empowering People - to do their best


18/40

2

Being Flexible - to adapt to the changing environment and evolving customer needs

Making it Happen - by striving to change the status quo, innovate and energize new

ideas with a strong passion and entrepreneurial spirit


Openness and transparency with an innate desire to do well

Creating Positive Impact with a desire to create a meaningful difference in society.

GOAL/OBJECTIVES

To undertake transformational projects that has a positive impacton the society and

contribute to the nation building process.

To Diversify into new businesses in agriculture, financial services and retail business

with world-class partners

To lay the foundation for building a conglomerate of future

GROWTH STORY

Bharti Airtel Limited has maintained its growth momentum in its operational and

financial results. The consolidated total revenues for the quarter ended December 31,

2007 is at Rs. 69501 mn grew by 41% on a year-on-year basis. The net profit during the

quarter was Rs. 14285 mn, a growth of 38% from the corresponding quarter of last year.

For the 9-month ended December 2007, the revenues grew by 46.6% whereas the net

profit was up by 63.9%. Bharti has over 57.3mn customers, as on December 31, 2007, an

increase in the total customer base of 70.1%, over the corresponding period last year and

maintained its leadership position through an improved market share of all India mobile

subscribers at 23.6% as on December 31, 2007.

Key highlights

Mobile services have been the major contributory with 81% share in the total

revenues during the quarter. This growth is attributed to the addition in the subscriber base


19/40

2

of more than 6 mn taking the total mobile subscriber base to 55.1 mn as on December

2007.

The enterprise business remains under pressure with margins narrowing, due to a

combination of lower tariffs and increased competition. Telemedia (broadband/fixed-line)

segment has registered significant growth with the revenue increasing by 22% and the

P

enetration in Rural Telecomoperating profit grew by 97%. The margin for this segment during the quarter has

increased from 27% as on Q3FY07 to 43.4% as on Q3FY08.

Bhartis mobile-network expansion remains on track with population coverage

increasing from 54% in Q3FY07 to 68% in Q3FY08. The total network sites have

increased to 60,299 network sites, up from 34,307 in 3QFY07 (Y-o-Y increase of 75.8%).

Mobile ARPUs declined just 2% Q-o-Q to Rs358, while Minutes of Use rose 1% Q-o-Q to

474 minutes. In lines with our expectation there has been a reduction in the operating cost

mainly in the access and interconnection charges, which have reduced from 16.8% in

Q3FY07 to 15% in Q3FY08.As a result the operating margins have increased from 40.3%

in Q3FY07 to 41.8% in Q3FY08.

The depreciation and interest cost were more than our expectation during the quarter

as well as for the nine months ended 2007. Consequently there has been a minor

reduction in the net profit margins for FY09E to 24.8% (against our expectation of 24.9%)

and for FY10E to 26.1% (against our expectation of 26.3%). For the nine months ended

December 2007, the revenues increased by 46.6% to Rs.191485.9 mn. The operating

profit was up by 57% at Rs.79617.6 mn. The OPM has improved from 38.8% in 9mFY07

to 41.6% in 9mFY08. The NPM has improved from 21.0% in 9mFY07 to 23.5% in

9mFY08.

On the basis of the subscriber growth in the third quarter we have revised our

subscriber projections upwards not only for the Industry but also for the Bharti Airtel. This

has in turn resulted in revision in the revenues from the mobile segment. However we

have moderated the growth in revenues for the enterprise carrier segment on the back of

lower tariffs and increased competition in this segment. We have revised the subscriber

growth projections upwards for Bharti on the back of strong growth witnessed by the

company in the last three quarters. Despite increasing competition and the regulatory

policies we believe that with strong Bharti Airtel Limited Result Update ACMIILfundamentals and financial performance Bharti will continue to be the market leader with

22.8% market share by the end of FY 2008. Accordingly, we maintain a BUY

recommendation on Bharti Airtel Ltd with a price target of Rs.1175.

Major Developments


20/40

2

In a major boost to its expansion plans, the company has also been allotted

additional 2G spectrum in five telecom circles, Gujarat, Uttar Pradesh (West), Assam,

West Bengal and Haryana. Importantly, the company is also slated to receive additional

radio frequencies in five other circles, Rajasthan, Andhra Pradesh, Bihar, Tamil Nadu and

Chennai, within the next couple of days.


Although the company has been allotted spectrum as a means of the interim

measure, Bharti is also looking for alternative technology solutions for overcoming

spectrum scarcity. At the same time the company is confident about the growth being

witnessed in the subscriber base which would make them eligible for additional spectrum

on the basis of the revised TRAI norms. Eight leading international investors comprising of

Temasek, The Investment Corporation of Dubai (ICD), Goldman Sachs, Macquarie, AIF

Capital, and Citigroup & India Equity Partners (IEP) have agreed to invest $1Bn in Bharti

Infratel Limited. The enterprise valuation has been agreed to be in the range of USD 10 to

12.5 Billion, and the final valuation will be determined on the basis of Bharti InfratelLimiteds actual operating performance in FY 2008-09. During the quarter ended

December 31, 2007 the company has allotted 1,28,367 new equity shares comprising of

42,967 shares upon conversion of convertible bonds (FCCBs) and 85,400 shares to the

employees of the company upon exercise of stock options as per ESOP Scheme 2005. As

a result the paid up equity share capital of the company stands increased to Rs. 18978.4

mn on December 31,

Brand analysis

1. SWOT Analysis

Strength1. Bharti Airtel has more than 9.33 crore customers. It is the largest cellular provider InIndia, and also broadband and telephone services-as well as many other communicationservices to both domestic and corporate customers.2. .Other stakeholders in Bharti Airtel include Sony-Ericssion, Nokia and Sing tel, with

which they hold a strategic alliance. This means has access to knowledge and technology

to other parts of the telecommunication world.

3. The company has covered the entire nation with its network. This has underpinnedits large and rising customer base.

4. Latest deal between Bharti Airtel and South Africa based MTN company will givecompany a height in the Indian telecom

Weakness1. An often cited original weakness is that when the business was started by SunilMittal over 15 years ago, the business has little knowledge and experience of how a


21/40

2

cellular telephone system actually worked. So the started-up business had to outsource toindustry experts in the field.2. Until Airtel recently did not own its own towers, which was a particular strength of

some of its competitors such as Vodafone. Towers are important if your company wishes

to provide wide coverage nationally


3. The fact that Airtel has not pulled off a deal with South Africas MTN could signalthe lack of any real emerging market investment opportunity for the business once theIndian market becomes mature.

Opportunity

1. The company possesses a customized version of the Google search engine whichwill enhance broadband services to customers. The tie-up with Google can only enhancethe Airtel brand, and also provide advertising opportunities in Indian for Google.2. Global telecommunication and new technology brands see Airtel as a key strategic

player in the Indian market. The new iphone will be launched in India via an Airteldistributorship. Another strategic partnership is held with Blackberry wireless solutions.3. Despite being forced to outsource much of its technical operations in the early days,this allowed Airtel to work from its own blank sheet of paper, and to question industryapproaches and practices-for example replacing the Revenue-per-customer model with aRevenue-Per-Minute model which is better suited to India, as the company moves tosmall villages and town.4. The company is investing its operation in 120,000 to 160,000 small villages every

year. It sees that less well-off consumers may only be able to afford a few tens ofRupees per call, and also so that the business benefits are scalable using itsMatchbox strategy.5. Bharti Airtel is embarking on another joint venture with Vodafone Essar and Idea

Cellular to create a new independent tower company called INDUS Towers. This newbusiness will control more than 60% of Indias network towers. IPTV is another potentialnew service that could underpin the companys long-term strategy.

Threats1. Airtel and Vodafone seem to be having an on/off relationship. Vodafone which owneda 5.6% stake in Airtel business sold it back to Airtel and invested in its rival HutchisonEssar Knowledge and technology previously available to Airtel is now moves to one of itscompetitors.2. The quickly changing pace of the global telecommunication industry could temptAirtel to go along the acquision trail which may make it vulnerable if the world goes intorecession. Perhaps this was an impact upon the decision not to proceed with talks about

potential purchase of South Africas MTN in May 2008. This opened the door for the talksbetween Reliance Communication and MTN, allowing a competing Indian industrialist toinvest in the new emerging African telecommunication market.3. Bharti Airtel could also be target for the takeover version of other globaltelecommunication players that wish to move into the Indian market.


22/40

2


2. BCG Matrix

This model is used to identify company SBUs position in the market. This model identifiesthe SBUs strength, weaknesses, opportunities and threats on the basic of market growthrate and relative market share. This module is also known as growth share matrix.

The unit of company that has separate mission and objectives and that can beplaned independently from other businesses. Characteristics of SBU.

It may be brand or a product line or separate division of company.

It is having distinct mission and objectives.


23/40

2

It is managed by separate executive team.

Penetration in Rural Communication

Bharti Airtel in Rural Market

In the 2000s, telecommunications (telecom) company Bharti Airtel Limited (BAL) was the

market leader in the Indian telecom market. It had established itself as the leader in the

market by differentiating itself with its focus on building a strong brand through innovation

in sales, marketing, and customer service, and an innovative cost effective business

model. Analysts also credited BAL with negotiating the regulatory hurdles in this emerging

market and competition very effectively. This enabled it to become profitable despite the

Indian telecom market having the lowest tariffs in the world. Some analysts opined that


24/40

2

BALs unique business model had become the benchmark for emerging markets. Mobile

telephony in India was experiencing the fastest growth in the world and India was already

one of the leading markets in terms of mobile subscriber base. Despite Average Revenue

per User (ARPU) figures in the country being quite low compared to many other markets, it

was viewed as an attractive market as mobile penetration of the

Penetration in Rural Telecommarket, particularly in the huge rural areas in India, was still low. With the developing

market in the West reaching high levels of saturation (70% in US and 100% in some

European markets), many global telecom operators were looking at emerging markets for

their growth and this made India a prime target market for these firms. The market in India

was also expected to witness many changes with the introduction of new technologies and

mobile number portability.

Since 2007, BAL had been facing serious threats to its leadership position. On the

one hand, there was the onslaught from global players such as Vodafone and VirginMobile, and on the other, the threat from established Indian companies such as Reliance

Communications Ltd., Tata Teleservices Ltd., and the state-owned Bharat Sanchar Nigam

Ltd (BSNL). Moreover, the market was expected to witness the entry of some more Indian

and foreign companies. BAL had responded to investing heavily in expanding its network,

technology, and marketing. It was trying to cover all segments of the population from the

tech-savvy youth population who coveted the latest value-added services (VAS) to the

Bottom of the Pyramid (BoP) segment who would be satisfied with a low-cost offering.

In early 2008, BAL, which still dominated the Indian telecom market and was theworlds tenth largest telecom company, was also readying itself to replicate its successstory in some other emerging markets.

The technology trends, which drive the cost of deploying such low cost, lowpower requirement, low capacity infrastructure and large scale passive infrastructure,sharing is certainly going to be adapted in India. One of the major bottlenecks in suchdeployments is the backhaul cost. Apart from the government initiatives to promotepassive infrastructure in rural areas through the USO fund, the technologies for aneffective backhaul for the rural radio coverage are key to the Indian telecom growth, andservice providers are examining all possible options in adapting these.

There is a distinct possibility that broadband might be the future

technology to connect masses especially in rural area. This was witnessed in several

overseas markets. Customers abroad are experiencing a new telecom phase because

they can talk freely as free VoIP would be riding the broadband wave. Although, VoIPwould not be a major driver because the current voice tariff in India is almost equal if not

lower than the VoIP tariff in the other markets, the e-Governance and m- commerce

initiatives would be major drivers for broadband penetration. The natural growth path for

current wireless operators being HSPA, it should also be the preference in the urban

areas. However, there is potential for WiMax to compliment it in the rural areas.

Residences in rural areas, and SMEs in both rural and urban areas, would attract WiMax

with private and public sector companies playing key roles. Initiatives such as lifetime free


25/40

2

incoming calls, substantial reduction in long distance rates, value added services, have

been tried to boost the area in concern. Foray in to the rural market would ensure similar if

not better ARPUs.

Penetration in Rural TelecomResearch Report

RESEARCH METHODOLOGY

Research Objectives:

To study the Airtel reliability in rural sector.

To study the effect of sales promotions in telecom sector

Organization study of Airtel.

To study consumer behavior.

Limitations Of The Study

Reluctance on the part of the respondents to provide exact details.

Lack of sufficient time to cover the whole R.S. point as sample.

Product categories under study

Sim selling

Paper voucher recharging

E- recharging

P.C.O. connections

Research Design and Nature Of The Research:

(a) Primary Data Collection Method:

Survey method was used for primary data collection.


26/40

2

We used questionnaire as an instrument for survey method.

Penetration in Rural Telecom Structured questionnaire.

Type of questionnaire: Open ended and closed ended.

(b) Secondary Data Collection method:

Information from Related Peoples.

Information gathered from the citizens.

The nature of the research is basically of two types.

Basic Research

Applied Research

Basic Research is that intended to expand the body of knowledge in a field or to

provide knowledge for the others.

Applied Research is carried out for solving of a particular problem or for guiding a

specific decision, and usually its results are private.

Basic Research is generally for common purpose and Applied research is for specific

purpose.

Here the nature of the research is basic. The main sources for data collection are both

primary and secondary data sources.

Sample size:

The sample size for this project was households outlets providers and retailers

in the R.D. Point.

Assumptions

1) The area selected is assumed to represent whole universe of Indian rural

telecom market.


27/40

2

2) Data collected are assumed to be bias free from side of respondents,

interviewer or any other mediaries.


3) Whole research and analysis part based on data collected is carried out

under unbiased environment and without any influence of any factor

which can lead to deviation in result.

Duration of the Research:

The duration of the research was 50 days.

striking points in Rural market

To attract the rural customer company should work on these striking points -

Availability

The first challenge is to ensure availability of the product or service. India's627,000 villages are spread over 3.2 million sq km; 700 million Indians may live in

rural areas, finding them is not easy. However, given the poor state of roads, it isan even greater challenge to regularly reach products to the far-flung villages. Anyserious marketer must strive to reach at least 13,113 villages with a population ofmore than 5,000. Marketers must trade off the distribution cost with incrementalmarket saturation. To ensure full loads, the company depot supplies, twice aweek, large distributors which who act as hubs. These distributors appoint andsupply, once a week, smaller distributors in adjoining areas. More No. of outlets isthe good idea to ensure the availability of the products .

Affordability

The second challenge is to ensure affordability of the product or service. With lowdisposable incomes, products need to be affordable to the rural consumer, most ofwho are on daily wages. Companies have addressed the affordability problem byintroducing small unit packs

Acceptability


28/40

2

The third challenge is to ensure acceptability of the product or services. With low

disposable income, products need to be acceptable to the rural consumer. Now as

the consuming willness is increasing in rural areas and mobiles coming as


essential part of the life it is necessary to make product acceptable to all categoryconsumers.

Awareness

The fourth challenge is to ensure acceptability of the product or services. Sincethere is a tough competition in Rural market and every company is aiming towards

the rural market it is necessary to ensure that there is a good awareness about thebrands.

General Introduction to the R.D. Point

R.S. Samit AgarwalR.S.O. Meharban singhR.D. Point - RanehR.D. - Anil Vyas

Sites - 8No. of subscribers 3,800 4,000Avg. revenue per month 1,70,000 - 1, 80,000 Rs

In the R.S. Point there is a fast growth rate of the company as 9 months earlier thesim selling target was 1200 sim/month and the revenue was nearly 12,00,000 Rswhich is now exceed up to more than 2000 sim/month and revenue is constantlytouching 25,00,000 Rs/month. So the growth rate in the sim selling is 19% permonth and the revenue generation growth is nearly 17% during per month. But inthe R.D. Point the growth rate is almost similar to that but this is the area wherecompetitors have strong appearing of. Here is a good customer base of othertelecom competitors and in the R.D. Point extra awareness is needed to excite thegrowth.


29/40

2


Reasons Of Slow Growth Rate

1. Strong appearance of the competitors

2. Lack of infrastructure in semi-rural and rural areas, which makes it difficult to make,inroads into this market segment as service providers have to incur a huge initial fixedcost.

3. Low awareness about the company policies.

4. Area is suffering due to poor advertising. If one person is traveling in the main roadone can not easily came to know about the availability of the company products.5. Due to high No. of mobile subscriber there is a congested space for landlineconnections.

Solutions to the problems

1. As every company is eying towards the rural subscribers competition is increasingconstantly. The only way to cross this is to ensure more reliability and faith in companybrand. This can be done by several ways -

To make the brand more reliable and to raise faith on brand company can go forCSR (Corporate Social Responsibility). As building Bus Stops, by supplying watertanks (Water is the biggest problem in rural areas in summers), by opening Pyaus,give signboard near the schools etc.

Plantation is a good idea as this will help protecting environment and a level on

tree guard is the effective advertisement of the company. This type of plantationcan also be done in villages connecting roads.

2. Low awareness about new product and service is the most difficult problem in ruralareas. People have no knowledge about the new schemes. To make it known to every onesome steps can be taken

Make sure that the R.D.s are trying to show the information on the display boards.(A display board can be given to every R.D. and big outlets so that they can writeAAJ KA OFFER. Company is doing work in this direction but in ground level ideais not working because they are not made aware about the benefits of it.)

There is a mentality of rural subscriber that the person who can repair there mobilephones is the best for getting recharges. Company can invite this kind ofmechanics for training sessions. This will help to excite the growth in rural market.

Any scheme given to the retailers is made available to them in no time so sometimes they are unable to be beneficial. If they will make known one day before theyget advantage.

3. This is bigger problem in the rural area because due to shortage of electricity rural

population can not attracted by electronic advertisement, so to attract the rural population

strong advertisement is strongly needed.


30/40

2


Advertising is strongly needed in rural areas because in rural area Jo Dikhta HaiWo Bikta Hai mentality is still working. (This thing is come in front of me in case of

FMCG products. Shopkeepers told me that several time they face the problem asMughe Amitabh Bachchan wala tel chahia, mughe Salman ki undergarmentschahia etc.)

Electronic advertising will not work here because of electricity problem, soadvertising via Banners, Posters, CSR, Advertisement on buses,walls will workhere because they are appear to them every time.

Advertisement through buses will work. Company can paint its logo on buses andIn other traveling means.

4. To attract the customers for landline connections following points can be useful

Make it cheaper to the customers ( For a P.C.O. connection customer has toinvest a minimum of 1700 Rs., Company can provide different plans to make it

cheaper and can also expend its business to personal connections.) Attract customer by internet connections (Now a days computers are available

everywhere it will be a good idea to provide the high speed internetconnections, this is useful in cities and tehseel places.)

Good networking facilities are essential Company can offer free or low cost internet facility to the schools.

5. One of the biggest problem in the rural area is Low ARPU. People are not investingmoney on mobile. Here some points are lighten towards the problem

Low call rates can be offered.

Different value vouchers can be used. SMS packs can be given to the customers as per requirement. Concentration should be made on VAS services.

This is the most striking point in above discussion. Concentration onVAS services is the key to increase ARPU. Following steps can be taken

Hello tune facility is the first VAS service which can do the job.Company can offer hello tunes on relatively lower rates. The moststriking point is to provide hello tunes related to the choice of thecustomer. In villages Film stars like Methuen Chakrawarti, SalmanKhan, Ajay Devgan, Akshay Kumar, Govinda are popular, soproviding hello tune of these stars will surely work. Other than thishello tunes of AARTIES and local LOKGEETS can also strike.

If in a village there are 100 connections of company and only25% of the customers are going with Hello tunes facility with monthlycharge of 20 Rs, so revenue is increased by Rs 500.The final ARPU isincreased by Rs.5 per user. In figures this is looking not exciting butyou can imagine the fact with a subscriber base of a R.S. Point and youfind it very exciting.


31/40

2


Now a days people are more conscious about there future. Theywant to know about there future. VAS service of Bhavikshfal is thesecond exciting service. In present conditions people are not usingthese facilities only due to high charges if possible makes this facilitycheaper and the sms type can be more in hindi. (Here I used theservice as Bhavikshfal not as Astrology, Because rural customersunderstand this most conveniently.)

There are several other services as Cricket, Funmessaging,Jokes are also helpful to increase ARPU.

If one person is using Airtel Live facility then he is charged with Rs6/minute. This seems

to be high charging and it tries to avoid using itself. Customers with Low income can not

afford this charging. If the charges are made cheaper customer with low income can affordthis and customers with high income will be the points of generating high revenue.

Marketing strategy in Rural area

In the rural area we face mainly 3 types of customers 1) Customers who dont know anything about product.

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

2) Aware customers.This category holds the huge percentage. They are not bised with

product and firstly gather knowledge about all available products and services andthen take decision.

3) Customers showing extra knowledge.....This is the most difficult category to face. These peoples have their

own perception and they are bised towards the product or services. It is difficult tochange there mentality some times.

So in case of rural customer the role and responsibilities of the outlets isdifferent. Some times old relations and the popularity of the seller also plays role. The

point is this Outlets are the businessmen they want to earn money, so they will sellwhich give them more income. In rural areas the customer is almost neutral anddepend to the outlet, so providing extra benefit to them will work in increasingsubscriber base. The second category which interfere during selling product or serviceis old customers. These are the free advertiser of the company, Before selling theproduct or service their opinion is taken by the seller so satisfaction of old customers isessential.


32/40

2

P

enetration in Rural TelecomAs per the data provided by the service providers, around 407112 villages are

having mobile coverage i.e. about 69% of villages are having the coverage. Takingadditional 90-100 million population as subscribers.around 180 million as the targetedrural subscribers in the country, as on Sep 2008, there are 90.76 million rural subscribers.Therefore, there is a need to plan for converting an

The strategy for increasing the telecom penetration in rural areas can beclassified in two categories:

A. Areas without mobile coverage

B. Areas already having mobile coverage

A. Areas without mobile coverage

Creation of infrastructure for provision of Mobile Services in rural and remote

areas:

(a) The assets constituting the infrastructure for provision of mobile services shall bedetermined by the Central Government from time-to-time.

(b) A percentage of the Capital Recovery for the infrastructure for provision of mobileservices shall be taken into account to determine the Net Cost.

Provision of Broadband connectivity to villages in a phased manner.

A percentage of the Capital Recovery for the infrastructure for broadband connectivityshall be taken into account to determine the Net Cost.

Creation of general infrastructure in rural and remote areas for development

of telecommunication facilities

(a)The items of general infrastructure to be taken up for development shall bedetermined by the Central Government from time to time.


33/40

2

(b) A percentage of the Capital Recovery for the development of general infrastructureshall be taken into account to determine the Net Cost.

P

enetration in Rural Telecom Induction of new technological developments in the telecom sector in rural and

remote areasPilot projects to establish new technological developments in the telecom sector, whichcan be deployed in the rural and remote area, may be supported with the approval of

the Central Government.

B. Areas already having mobile coverage

Affordability of Services

As compared to urban population, rural people are more cost conscious and

demanding as far as getting value for their money is concerned. Taking Rs 1000- 1500/ asthe minimum cost of a handset, the cost for owning a mobile connection works out to bearound Rs 1500-2000/-. As the reasons for owning a mobile phone in urban and ruralareas are very different, therefore for attracting rural people to subscribe to mobile phones,there is a need to increase its cost effectiveness. Some of the methods could be:-

1. Lowering the cost of the handsets

Although the service providers do not have direct control over handset costs, theycan and should work with manufacturers to ensure that handsets are both economicaland practical for the rural consumers. Some steps can be taken to lowering the productcost discussed below:-

Evaluate the design and specifications of handsets to ensure that they meet the

needs of the rural masses and do not contain extraneous features that push uptheir cost. Electricity is either unavailable or available for few hours in a number ofvillages; therefore, the handsets should have long-life batteries, built in flashlights


34/40

2

and capability to charge the batteries from alternate sources such as tractorbatteries and generators.

Reduce complexity and subsequent servicing costs by relying on standardizedkeypads, screens, and other parts.

Bundling of handsetsA large number of the rural population does not have asteady employment, therefore there is a need to lower the upfront cost of mobileacquisition. This can be achieved by bundling the hand set along with theconnection or offer handsets on an installment plan that increases over a period oftime along with the benefits to the user. In large number of countries, it is a normalpractice. However, in India, as the annual license fee is on the AGR of the serviceprovider and the cost of the handset is also taken as a part of the AGR, thereforethe service providers are not too keen to bundle the hand set along with theconnection.


2. Incentivizing a new mobile connection subscription -Telecom service providersshould come up with innovative confessional schemes for new subscribers

Providing locally relevant applications on Mobile

This could include applications on mobile regarding health, education, farming and other

local trade. With proper communication infrastructure, it may also be possible to movebusiness processes to rural regions. This should open up the growth potential of ruralIndian economy.

Mobile Banking for Rural India

In many developing countries, lack of banking facilities in the rural area combined witha proliferation of mobile services has created a unique opportunity for providing financialservices over the mobile network. Mobile phones are being used to transfer funds betweenpeople. These applications are working in countries like Philippines, Kenya, South Africa,Tanzania etc. These applications are driven by rural people who are looking for:

A safe place to keep money

Accessibility / liquidity The ability to turn electronic money into hard cash andvice versa at convenient locations (agents/ATMs)

Ability to transfer money To and from the financial institution, to makepayments and to remit money to friends and relatives.

Overcoming the language barrier


35/40

2

The literacy levels are very low in rural India. Majority of the handsets are inEnglish. So we should concentrate on region wise manufacturing of handsets inaccordance with the needs and wants of the target customers and manufacture handsetsin the major acceptable languages which will provide an ease in operation to thecustomers.

Tie-up with Department of Post

Increasing the customer outlets for mobile payments/recharging: Rural post officesshould be allowed to work as customer outlets for the telecom companies.

Local schools and community centers can provide the training needed to help localresidents and businesses in rural areas and take advantage of new informationtechnology.

The Dept of Posts has a presence in every corner of the country. The Postman is a

known and recognized entity in even the smallest of human settlements. He

personally knows every resident of his Beat, and in smaller towns/villages,

Penetration in Rural Telecomprobably is familiar with the people, their financial status, their needs, andrequirements for communication services based on the letters / money ordersbeing sent/received. The Postman can therefore be effectively used to educate thepotential Customers and First-Time Users about the uses and benefits of theServices being offered. Also, there can be no better system for address verificationand credit verification than the Postal Dept and more specifically the Postmanhimself. No agency can claim a similar level of familiarity with the Local residentsand this knowledge that the Postman has built over many years of doing his Beatcan never be replicated. This makes him the ideal agency for any kind of

verification.After the above discussion the main point which are to focused are -


36/40

2


Constraints in the Penetration of Rural Telecom

Acquisition of Land

The first major hurdle in the proliferation of towers in the rural areas is thatacquisition of land for BTS takes very long time. In large number of the cases, as the landbelongs to either forest deptt/tribal areas or gram panchayats, the formalities required tobe completed for taking the land on lease or outright purchase takes a long time andinvolves lot of effort.

Right of Way


37/40

2

In the rural area, for providing backhaul connectivity, if fiber or cable is to be laid then even

though the laying is along kuchha roads or through forest, but as the route involves

jurisdiction of multiple state and municipal agencies/panchayats, therefore to coordinating

different agencies and getting the requisite permission is time consuming. This state

agencies involved in the process takes a long time in granting the right of way and have

also started charging exorbitantly higher amount for the permission for the laying.

Backhaul connectivity

Unavailability of cheap and fast backhaul connectivity is one of the major hurdles infaster proliferation of telecom in rural areas. Unlike urban areas where optical fiber islargely deployed to provide the backhaul connection, about 80% of the rural BTS are onmicrowave system. Though, at many places OFC connectivity has been provided but theprovisioning cost is prohibitory high and as discussed subsequently, providing backhaulusing the satellite link is a cumbersome process.

Lack of Infrastructure sharing

According to industry estimate, cost of setting up a cellular tower (BTS) is variesfrom around Rs 3-4 million inclusive of equipment, power plant, etc. Though significantnumber of existing cell sites are already being shared by competing operators across thecountry, however, this is mainly in urban areas. In rural areas, sharing of infrastructureis yet to be attained at a significant level/rate.


Power Supply

In a number of villages the power supply is either not available or is available onlyfor few hours. As a result even if battery backup is provided for the BTS, due to availabilityof electricity for a very short duration, the batteries are not able to get fully charged.Further due to frequent interruption of power supply the life of these batteries getshortened which in turn increases operational cost to run services in rural areas.Unavailability of reliable power supply in semi-urban, rural and remote areas increasesoperational costs further because sufficient backup systems have to be maintained. As perthe statistics, out of 5, 93,731 inhabited villages (as per2001 census), 4, 73,136 (almost 80%) have been electrified up to March 2008. The remaining villages are to be covered by


38/40

2

2009 as per Bharat Nirman Programme under Rajiv Gandhi Grameen Vidhutikaran Yojna.However, in practice, the frequent and long interruptions in the electricity supply put alarge number of these villages at par with the non-electrified ones.

Operation and Maintenance cost

Maintenance costs of the network in rural areas are high as compared to urbanareas because of several factors such as poor transportation systems, difficulty in supplyof spare parts and non availability of skilled manpower etc. Due to lack of reliable power inrural areas there is substantial increase in the cost of diesel for running of the enginealternators for keeping exchanges, transmission equipment and BTSs in the liveconditions.Low Average Revenue per User (ARPU)

As per the license conditions the service providers are mandated to provide serviceto all without any discrimination. All subscribers, big and small, rich and poor, are entitledto get the same quality of service, tariffs and other conditions. However it is seen thatService Providers do not fulfill this license condition or at least are reluctant to venture intothe interior rural areas where expected ARPUs are low. The profit motive being of primaryimportance to all, the low ARPUs expected in the rural areas do not provide sufficientmotivation for the Service Providers to provide service in these areas.

Affordability of Services

Though the provisioning cost of telecom services has come down significantly inIndia, however in terms of purchasing power of individual, these are still high particularly interms of cost of the end equipments i.e. Cost of handsets, Modem, PC, UPS etc. As alarge proportion most of the rural population is having low income, the present cost oftelecom services is still prohibiting to them.


Low literacy levels (Relevant mainly for Broadband)

The literacy levels are very low in rural India. No matter how wired or connected a

rural community is, no matter GSM or CDMA, WiMax or 3G, broadband or dial-ups are in

place, without appropriate literacy to utilize the technology or the value added services thatit provides, the connectivity will have no value. Presently, more than 98% of computer

work is done in English. Apart from the issue of lack of skills in English, a large percentage

of the rural masses do not even have even sufficient reading and writing skill in their own

language. In order to help develop the habit of using the opportunities that a Broadband

offers, there is a need to develop content that is relevant, usable and understandable by

the local people. All the support and incentives offered for rural penetration would be of

consequence only if the content provided is relevant and usable. It is therefore, of utmost


39/40

2

importance that the contents developed should be in the vernacular language and the

application software should largely be menu driven and graphic as far as possible in order

to overcome the issue of illiteracy. In absence of these, there will be lack of demand

generation in rural areas, leading to a failure of the entire initiative.

Unavailability of locally relevant applications (Relevant mainly for Broadband)

India being a multi diverse country has different requirement from one geographical area

to the other area. However, the content being developed at present are meant to be used

universally even though it fulfils the requirement of a particular geographic area and not all

the whole country. Therefore unless content developer understands the local requirement

and develop customized contents, the demand for tele-communication will not increase.

The processing of information and converting it in such a form which become useful to the

end user and to transport such information through a reliable, accessible and convenient

transportation system are two requirements which can help in generation of demand for

telecommunications services and content services. As it is known that demand for telecom

services is not a direct demand, but a derived one. Users of telecommunication services

do not want to communicate per se, but to get and give information to others. Informationis a valuable element, and telecommunication is just the channel through which

information is made accessible and exploitable.

Conclusion

India adds 5 million mobile subscribers per month across the board and one

quarter of these become Bharti subscribers. Bharti has a firm commitment to growth and

aims to differentiate itself in India's highly competitive communications environment by

ensuring customer delight through personalized customer service. Bharti has a solidreputation in India, exemplified by a multitude of awards such as 2005 Indian Mobile

Operator of the Year byAsian Mobile News, and selection of its Airtel brand as India's

P


Most Preferred Mobile Service in the CNBC Awaaz consumer awards. The Company is

taking every bit of effort to penetrate into the rural area and above analysis shows how it is

trying its level best to achieve this. All the efforts are directed towards this.

Results & Benefits

Calling a single number from anywhere in India, Bharti wireless and wire linecustomers will be able to speak in English, Hindi, or four other regional languages


40/40

to complete routine transactions and subscribe to new services while the systeminteracts with them in a natural, conversational manner.

Virtualization' of the contact center infrastructure, consolidating multiple,geographically dispersed contact centers with separate telephone numbers to asingle phone number, and routing calls to available agents regardless of location.

This penetration will help in better connectivity and reduce the distances.

All of the four main players in the Indian mobile communicationsmarket Bharti, Reliance Idea and Bharat Sanchar Nigam Ltd are targetingthe rural areas of the Indian subcontinent. Over two thirds of India's populationlive in rural surroundings and in these telecoms have not really made theirpresence felt to any real extent. With three companies driving technology intothis sector of the market the effect is likely to be a boom in telecoms demand.It is probable in these rural areas that cheap call rates will link with state-of-the-art technology to boost teledensity and offer more freedom.


penetrarion in rural telecom

Documents