AIMA-Project

Chapter 1

Executive Summary

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The telecom industry in India has been growing at a scorching pace in recent years. Teledensity, which was languishing at 2% or so in 1999, has shown an impressive jump to around 8% in 2003. We have moved decisively from an environment that was monopolized by state-owned companies, and in which there was huge unmet consumer demand for telecom services, to one that is characterized by intense competition among several players, and availability of quality telecom services on demand at very affordable prices. Much of this has happened because of the Wireless revolution taking place in the country, as is happening globally. The Government, on its part, has played a key enabling role by deregulating and liberalizing the industry, ushering in competition, and paving the way for growth. While there were regulatory uncertainties earlier, resulting in litigation, these have all been addressed now. So what will be the next stage in the growth trajectory of Indias telecom industry? In this report, I analyze the factors that have driven growth, in the backdrop of trends in the global industry. Thereafter, the report presents the views on how the industry is expected to shape up in the future, and the factors that will drive the next phase of industry growth. The global telecom industry, which was in the throes of recession in recent years, is now looking up. With the global economy getting back into the growth mode, telecom budgets of enterprises worldwide are expected to increase, and telecom companies financials, which were awash in red, are expected to return to black in the next couple of years. Wireless dominance is the governing theme, with theWireless subscriber base overtaking the Wireline subscriber base in 2003. Increasingly, Wireline subscribers are expected to cut the cord and migrate to Wireless, while new users will pick Wireless as their first phone. Competition-induced sharp decline in tariffs and handset prices, which have made Wireless highly affordable, and aggressive promotion of prepaid offerings by operators are the key factors responsible for the success of Wireless. The growth trends in Indian telecom mirror those in the global industry. Wireless has been the principal growth engine, accounting for two-thirds of the total telecom subscriber additions during the last three years. This report is designed to give readers (Solution Vendors like Wipro) market size information and projections for a five-year period based on economic data, primary Alliance Business Academy Page 2 of 74

AIMA-Project research, vendor reviews and research from industry-specific secondary sources. This report presents a top-level forecast of communications industry IT spending across the five components of ARPU, Subscriber base, Market share and Revenue. Additional forecast data has been included to outline the opportunities in wireline, wireless, cable/satellite, ISP/OSP and media subsectors as well as the solution-level opportunity in BSS, OSS, corporate administration and other solution-level spending. The numbers demonstrate the opportunities within a specific market or market segment. Regional economic conditions, historical spending behavior and extrapolated data from business strategies have been analyzed and compiled to provide insightful IT spending patterns.

1.1 - Objectives of the research

1. To do an extensive research analysis and prepare a comparative research report on the tier-2-telcos (telecom service providers) across India. 2. To identify the key concern areas (pain areas) and thereby identifying the business opportunity for Wipro. 3. To assist Wipros marketing team in developing a comprehensive website for Wipros customer to have an easy access. 4. To find out the growth opportunities for Wipro to deliver the next-generation offerings. 5. To develop the marketing collaterals (brochures, mailers etc.) for Wipros Telecom Vertical.

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1.2 - Key Findings

1. Total subscriber base has crossed 86 Million. 2. Mobile phone subscriptions have reached 42 million in over 2000 cities. (Growth of >100% over last year) 3. Tele-density >8 ,achieved 15 months ahead of plan. 4. India expected to be the third-largest telecom and ICT market by 2010 with 100 million mobile subscribers. 5. Tariff drop Too steep too soon ( Rs.16/min to Rs.1/min in less than 5 years) 6. The total industry revenues for 2003-04 were around Rs. 8308 crores, up from Rs. 6,400 crores in 2002-03, showing an increase of 30% over the year. 7. On the other hand the total cellular subscriber base of the private GSM operators doubled from 10.1 million subscribers at the end of March 2003 to 20.5 million by the end of March 2004. 8. Thus, the growth of subscribers was not matched with an equivalent / proportionate growth in the industry revenues as more and more marginal / lowend subscribers opted for the service during the year. 9. The ARPUs of the private GSM operators have dropped by 17% in 2003-04 from Rs. 523 per subscriber in Q1 to Rs. 432 in Q4. Thus, the affordability of services for subscribers was further enhanced during the year, which in turn fuelled subscriber growth. 10. In fact it is estimated that the number of subscribers with a monthly ARPU of less than Rs. 500 has gone up from 28% in 2002 to 46% in 2003.

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AIMA-Project 11. As a result of the above, the industry is operating on wafer thin margins leaving it with inadequate resources to fund network expansion and growth to remote, rural and unserved areas. 12. Coupled with the low ARPUs, the industry is also been greatly challenged by the high costs of duties & levies that have been imposed on the sector. 13. Further, the operators are burdened with a significant access deficit charge, which is adding to the cost of service. 14. In addition to the above, significant levies were also imposed on the industry on account of sales tax, service tax, import duties on handsets, etc. 15. In fact it is estimated that the total burden on the sector on account of the licence fees, spectrum & access deficit charges imposed by the Government is estimated to be around 25%. 16. It is thus important to rationalize the cost structure of the industry, not only to bring it in line with best international practices, but also to ensure that telecom is not treated as a revenue generator but as a critical infrastructure that is vital for balanced economic growth.

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Chapter 2

Telecommunication Industry An Overview

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2.1 - Worldwide Telecom Scenario

The global telecom industry has weathered the storm, and prospects are now looking up. Global economic growth is expected to drive up enterprise telecom spending on account of: Growth in business activity; Increase inWireless spending; and Increased adoption and implementation of IP VPNs. Wireless dominance and technology substitution are expected to be the governing themes: Wireline toWireless migration will gain in strength worldwide, eroding Wireline voice revenue; Integrated voice service with seamless roaming between Wireline and Wireless networks is the future solution; and There will be an accelerated migration from legacy data to IP based services. Subscriber volume growth will come mainly from the emerging markets, with India and China bringing in most of the numbers. The pricing environment is expected to remain soft for most services, as competition among operators will remain stiff. Operators with a cost advantage will use price-cutting as a strategy to gain and control market share.

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AIMA-Project 2003 2005 is driven by more rational needs to grow profitably

Focus on :
ROI tighter budgets, consolidation of resources Reducing Opex by improving operational efficiency New Value Added Services (VAS) and Consolidation into a Single Service Delivery Platform (SDP).

North America evolving to stay afloat

Sluggish revenue growth in Fixed Line Mobile Growth helping in sustaining. Brutal competition -leading to outsource for significant cost reduction.

Europe Cautious Optimism

Incumbent operators are heavily in debt and still smarting under enormous bill for 3G licenses. Eastern Europe -Projected growth - 6.3 percent CAGR till 2006 and has increased affinity for COTS products

APAC Increasing Market Share

Low Tele density in South Asia High growth opportunities Increased service add-ons (e.g. MMS and MASP) are spurring for Mature markets

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Worldwide IT Spend in Telecom - Trends

At 8.9 % of revenues, IT is a major spend in CSP as compared to other industries However, exuberant expenditure of 99-00 has given way to cuts Overall IT spend is expected to grow only by 22% between 2003-2006 Outsourced component in telecom is 15% of total IT spending. Wireline (57%) dominates the spend over Wireless (24%) and Cable (15%) BSS is 48% of total external spending while OSS is 34%. Others constitute 18%. Most companies prefer short-term (less than 3 years) deals as opposed to longterm contracts

Figure 2.1

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2.2 - Indian Telecom Scenario

At the start of the 1990s, telecommunications was a government monopoly. The Department of Telecommunication (DoT) was the sole supplier of phone connections in the country, except in Delhi and Mumbai, where MTNL, also totally government controlled, was the supplier. International communications was the preserve of VSNL, also a government-owned entity. Together, they constituted what might be called the DoT family. In a country with a population of almost a billion, there were just 5.1 million phone lines in 1990 roughly one for every 200 people. The DoT made telecom policy implemented it, and acted as the regulator. A phone was considered a luxury, so those who used theirs a lot were charged at a higher rate. Around the time, the Indian state neared bankruptcy, and was even forced to sell some of its gold reserves to stay afloat. Rapid liberalization and the dismantling of state monopolies was not just a path to faster economic growth, but also of quickly refilling the state coffers. In 1994, the National Telecom Policy was announced, which allowed the private sector to bid for licenses in different states. The DoT, an entity directly threatened by this, was put in charge of formulating and implementing this policy. The policy did not address key questions essential for the private sector to function in this area, including those of rights of way to lay cables, and spectrum allocation for wireless communications. The over enthusiasm of the private sector for what it saw as boundless possibilities for growth in a telecommunications starved country let it to bid absurdly high sums for licenses. The combination was sure recipe for disaster.

Indias success in becoming the global economic power will be determined in large part by the countrys ability to provide a robust telecommunication infrastructure with high quality services. Until recently telecommunications in India were a state-run monopoly characterized by severely limited deployment and coverage, serving less than six percent of the countrys population. However, the country has been making great strides to catch up to neighbors such as China and Malaysia, whose economies have benefited from the opening of their

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AIMA-Project markets and by permitting foreign investment. In 2004, there has been a flurry of activity in Indias telecommunication sector as regulatory and policy changes encourage domestic and foreign investment, competition among players intensifies, and the number of subscribers has grown be double digit rates. Liberalized licensing rules have fuelled a boom, particularly in mobile communications. The TRAI (Telecom Regulatory Authority of India) reports that of the nearly 4 million subscribers added in July and August 2004, close to 90 percent were mobile subscribers. While these changes are exciting and crucial to the countrys development, they bring with them the inevitable headaches that beset telecom operators : Increasingly complex operating environments, difficult technology decisions, and relentless competition that spawn price wars and customer churn. Telecom operators, if they are to remain viable, must quickly find and nourish a profitable customer base while providing support for a national economy on the rise. Profitable customers are business customers and business customers demand high quality services. That means, in addition to resolving capital funding and deployment issues, telecom operators have to put in place strategies for effective network and service management.

India has been one of the worlds foremost contributors with respect to information technology and business process outsourcing IT & BPO services. For the last few years, India has been, and certainly will be for next few years, one of the foremost models for the telecom community around the globe. The primary reason for this has been the Indian Governments initiatives to realize their goal of opening up the countrys telecom sector to private investment. The government has recognized and supported the role telecom infrastructure can play in the economic development of India.

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AIMA-Project Some of the key points on the governments agenda have been : To issue licences permitting a number of Indias telecom operators to compete and offer telecom services. This has driven growth in excess of 100 per cent- of the wireless market and has made telecom services available at extremely competitive rates for Indias large population. To allow global companies to participate in Indias market by providing telecom infrastructure and related services to telecom service providers. To encourage the introduction of new technologies from the technology leaders of the world with a minimum lag time. To achieve a tele-density of 7 per 100, 15 months ahead of plan To reach a tele-density of 15 by 2010 currently, this also seems likely to be achieved ahead of plan. To build the size of the telecom service industry-now US$ 12.25 billion, up from US$ 10.24 billion last year. To increase Indias undersea cable connectivity to other parts of the world-the Singtel / Bharti joint ventures i2i cable links India to the worlds highest capacity system in Singapore. The telcos in India include global players such as Hutchison, Singtel (through it joint venture partner Bharti Televentures), Indias corporate giants such as Reliance Infocomm, Tata Group, and the incumbent Government operators BSNL and MTNL. All these telcos are working on a number of initiatives to offer a wide variety of telecom services to customers. The telcos currently offer a wide range of services in India including : Wireless connectivity based on GSM or CDMA State of the art technology wireline networks Broadband and Internet connectivity VASs such as location-based services, push to talk, messaging, multilingual SMS and host of content-based applications among others. MPLS and VoIP

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Indian Telecom - Evolution

Figure 2.2

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Chapter 3

Company Profile

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With utmost respect to Human Values, we promise to serve our Customers with Integrity, through Innovative, Value for Money solutions, by Applying Thought, day after day

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3.1 - About Wipro

History
Wipro Limited is the first PCMM Level 5 and SEI CMM Level 5 certified IT Services Company globally. Wipro provides comprehensive IT solutions and services, including systems integration, Information Systems outsourcing, package implementation, software application development and maintenance, and research and development services to corporations globally. In the Indian market, Wipro is a leader in providing IT solutions and services for the corporate segment in India offering system integration, network integration, software solutions and IT services. Wipro also has profitable presence in niche market segments of consumer products and lighting. In the Asia Pacific and Middle East markets, Wipro provides IT solutions and services for global corporations. Wipros ADSs are listed on the New York Stock Exchange, and its equity shares are listed in India on the Stock exchange - Mumbai, and the National Stock Exchange, among others. Wipro is into IT services, Consumer and Lighting Products, Fluid Power and Healthcare Systems. Wipros three business units are Wipro Technologies, Wipro Infotech and Wipro Consumer and Lighting. Wipro Fluid Power was spun off, as a separate fully owned subsidiary company in 2002. Wipro ePeripherals is a group company formed in 2000 with a focus on peripherals. Wipro has a joint venture with GE Medical Systems called Wipro GE Medical Systems Limited. Wipro made its beginnings in 1945 when the Western India Vegetable Products Limited was incorporated in Maharastra state, India. The company was started as a oil crushing unit making hydrogenated cooking oil. Later, in1970s Wipro embarked on an ambitious phase of expansion. The vegetable products factory gradually grew into a consumer products group, manufacturing soaps and then entered the InfoTech area. Diversification and

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AIMA-Project restructuring to meet the market demands have been Wipros strong points in its 50 odd years of existence. Within five years, its turnover went up from Rs 40.82 million in 1965-66 to Rs.104.09 million in 1970-71. The first diversification came about in 1975, into hydraulic cylinders and fluid power components. The original factory in Amalner diversified into soaps, toiletries, baby care products. Later Lighting products were added. In early 80s when India was on the threshold of an IT boom, Wipro entered the Infotech area and tasted early success in its R & D. An energetic, committed team of professional R & D and marketing managers was brought together in Bangalore in 1980. In a small lab at the Indian Institute of Science (IISc), the team developed the first Indian mini computer based on Intel 8086 chip. Their professionalism, innovation and insistence on quality were to make Wipro the No. 1 listed Infotech company in the country - in just 15 years. With the success of R & D in India it was natural for Wipro to look at the global market to grow the business. That was also the time when India was entering the era of liberalization. Wipro saw a big opportunity in the global market using the untapped talent pool in India. Within four years of entering the global market with IT services, Wipro became the second largest exporter of IT services. That was the beginning of our most profitable business, Wipro Technologies. It was in the early eighties that Wipro made its foray into the Infotech arena. An energetic, committed team of professional R & D and marketing managers came together in Bangalore in 1980. With this began the Wipro Infotech story. In a small lab at the Indian Institute of Science (IISc), the team developed the first Indian 8086 chip.

Wipro tied up with GE Medical Systems to set up a Joint Venture in 1992. In 1997, Wipro launched Six Sigma, the internal quality rejuvenation process to ensure

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AIMA-Project that its quality standards are world class. In simple terms, Six Sigma involves reducing defects to 3.4 in a million actions needed to do a process. For a company that is driven by a passion for quality, it was the logical thing to do. Another first, in December 2001, Wipro became the worlds first PCMM level organization. Wipro has transcended from being a service provider to being a consultant, guide and trusted partner. Today, Wipro stands at the firmament, as a trusted and experienced provider of a comprehensive range of IT services, solutions and products. An experience that now spans the globe.

Milestones
1980: Diversification into Information Technology 1990: Incorporation of Wipro-GE medical systems 1992: Going global with global IT services division 1993: Business innovation award for offshore development 1999: Wipro's market capitalization is the highest in India 2000: Listed on NYSE as WIT 2001: Ranked India's most valuable company by Business Today 2002: Ranked the 21st software services company in the world by Business Week

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Introduction to the world of Wipro

The number that defines Wipro Rs. 58.81 billion ($ 1.35 bn) revenues for the FY 2003-04 Featured in Forbes Best Under a Billion for 2003 (Forbes, October 2003) The number that place Wipro Top Leadership Company in Asia Pacific -leadership survey 2003 Hewitt 5th 'Most Profitable Global IT Services Companies - Business Week, June 24 2002 Among the Top 100 Infotech Companies worldwide Business Week, June 24, 2002 Listed on NYSE on October 19th, 2000 (NYSE : WIT) The number that make it happen 30,000 + employees

Wipro's vision for 2004 is...

Business leadership Among the top 10 Information Technology Services companies globally and # 1 Information Technology company in India. Customer leadership The #1 choice of the customer through innovative solutions and Six Sigma processes. People leadership Among the top 10 most preferred employers globally by creating an environment of empowerment, intellectual challenge and wealth sharing. Brand leadership Wipro Brand to be among the top 5 most admired brands in India.

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Wipros Diversified Business Matrics

Wipro Limited
Offers IT Services in North America, Europe and Japan Offers IT Services and IT products in India, Middle East and Asia Pacific
Offers a wide range of consumer products soaps, toiletries, lighting products and hydrogenated cooking oils Offers world class hydraulic cylinders for construction equipment, as well as truck hydraulic components

Wipro Technologies

Wipro Infotech

Wipro Consumer Care & Lighting

Wipro Fluid Power

Figure 3.1

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Wipro Technologies
Wipro Technologies is the global IT services business division of Wipro Limited. Working in over 20 offices around the world, Wipro Technologies uses powerful technologies to provide services for business transformation and product realization as well as complete solutions for the service provider markets.

Wipro Infotech
Wipro Infotech is a division of Wipro Limited and provides customers with high value Information Technology Solutions, Infrastructure, Services and Platforms in India and is all set to offer high end Technology Services and Solutions for the Asia Pacific and the Middle East market.

Wipro Consumer Care and Lighting

Wipro Consumer care and Lighting is the FMCG arm of Wipro Limited which continuously introduces innovative products and adds value to existing brands, each of which is the promise of good health and value for money. Its brands include Santoor, Wipro Shikakai, Wipro Active and Wipro Baby Soft.

Wipro Fluid Power Limited

Wipro Fluid Power was Wipros first diversification in 1975, to address the hydraulic equipment requirements of mobile original equipment manufacturers in India. Over the past 25 years, the Wipro Fluid Power business unit has become a leader in the Hydraulic Cylinders and Truck Tipping Systems markets in India. Wipro Fluid Power intends growing its business by leveraging its dominant market share in India to serve the global manufacturing requirements of Hydraulic Cylinders and Truck Tippers.

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Wipro GE Medical Systems Limited

Wipro GE Medical Systems, is a joint venture between Wipro and General Electric Company. A part of GE Medical Systems South Asia, it caters to customer and patient needs with a commitment to uncompromising quality. Wipro GE is the market leader with unmatched distribution and service reach in South Asia and is Indias largest exporter of medical systems. Wipro GE pioneered the manufacture of Ultrasound and Computed Tomography systems in India and is a supplier for all GE Medical Systems products and services in South Asia.

Wipro Spectramind
Wipro Spectramind, is Indias largest third-party offshore BPO provider. It partners with the clients to provide full spectrum of BPO services from high-end customer interaction to transaction processing and knowledge-based services. It further cluds their vast IT solution experience and a diverse domain expertise to offer these services to customers across industry verticals.

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Wipros Quality Orientations

PC Well-defined skill sets, role based competency mapping, ease of MM replaceability Level The worlds first PCMM Level 5 company in Dec 2001 5 Reinforcing our technical competence with this quality standard for TL Telecom 9000 Worlds first Software Services company to be certified in Nov 2001 Six Sigm a
Sustaining Continuous process improvements by eliminating causes of defects Started in 1997. 1000+ projects initiated till date

SEICMM Level 5

For driving in-depth and Continuous process improvements The Worlds 1st IT Services Company Achieved in 1998

ISO 9001

Figure 3.2

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Wipros Global Footprint

Figure 3.3 32 Development centers 33 sales offices 1 Disaster recovery center

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3.2 - About Wipro Infotech

Wipros IT business was established in the year 1981 and is part of the US $1.35 Billion (FY 2003-04) Wipro Limited. A global provider of Enterprise and Technology software services, Wipro Limited has the highest market capitalization amongst the IT companies in India and also ranks amongst the Top 3 Most Admired Companies, in India. Wipro is a publicly listed company - traded on the Stock Exchange in India and the US (NYSE Ticker: WIT). Wipro Infotech, is the IT Services, Solutions & Products division of the Rs. 58,800 million Wipro Limited. With a successful quarter (quarter ended September 30, 2004), the revenue touched Rs. 19.8 billion (Rs. 1,979 Crores), an increase of 44% year on year. Profit Before Interest & Tax (PBIT) has grown by 88% year on year to Rs. 4.7 billion (Rs. 465 Crores). With over two decades of experience, Wipro has stamped its presence on the Indian market and leads the Indian IT industry. Headquartered at Bangalore, our business spans India, Asia Pacific and the Middle East. By collaborating with Wipro, organizations garner the power of tried and tested frameworks, strong domain knowledge, and a large pool of certified technology specialists and best of breed alliances. We bring to market tailor-made, industry specific solutions that help meet your business challenges while increasing operational efficiency. We have leveraged our two-decade old expertise and experience in meeting the IT needs of enterprises that enables us to offer comprehensive IT solutions that encompass bestof-breed products, best-practice IT services and best-in-class enterprise solutions. We help architect, implement and manage the entire IT lifecycle of our customers through a complete portfolio of IT Services. Our services are backed by over two decades of experience handling complex integration projects in India and abroad. Multiplatform expertise, extensive reach and tested delivery mechanisms help us deliver reliable, high-quality, cost-effective IT services.

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AIMA-Project Our IT services are crowned by in-depth Consulting Skills that are reinforced by a keen understanding of the key role that technology plays in enabling business. The Consulting portfolio includes Strategic Consulting Services, IT Governance & Optimization Consulting, Process Consulting, Business Continuity and Risk management Consulting

Global Footprints across industry verticals

Banking & Finance Government Healthcare Telecom Oil and Gas Utilities

IT services
Services Solutions

Consulting
Strategy Consulting eGovernance Strategic Cost Reduction Business Transformations Security Governance

Products
Notebooks Desktops Servers Storage & Enterprise products

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3.3 - Wipro in Telecom

Today Telecom & Internet Service Providers are faced with stiff challenges of maximizing revenues & optimizing costs in the wake of deregulation, Mergers & Acquisitions, and acute competition. Wipros Best of Breed OSS/BSS alliances combined with world class services and technical domain expertise helps service providers overcome these challenges by maximizing Average Revenue Per User (ARPU). This comes from a team that forms part of the worlds first TL 9000 certified organization.

3.3.1 - Subsegment Focus Areas

Integrated Service Providers (Wireline, Wireless, IP Services) Internet Service Providers (dialup, VPN, VoIP, etc.) Wireless Services Providers (GSM, CDMA, WLL, 2.5G, 3G) Fixed Line Service Providers Broadband Service Providers (DSL, Cable, Fiber) Telecom Carriers (long haul, metro, submarine; ATM, FR, IP, MPLS) Internet Data Centers (hosting, managed services)

3.3.2 - Solution Areas:

1. OSS Solutions

Network & Service Provisioning Mediation Inventory Management & GIS SLA & Performance Mgmt. Fault Management Order Management Billing Fraud Management & Revenue Assurance Data Warehousing CRM ERP & SCM

2. BSS Solutions

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AIMA-Project 3. Application Integration 4. Telecom Services

Voice Technologies (Voice Portals, Unified Messaging etc.)

5. Wireless Application through SMS, WAP based services, IP Telephony.

Product Offerings :
Desktop, Storage, RISC Computing Servers

Service Offerings :
Systems Integration services Solution architecting Design of Production, Staging, Testing, Development & Training Environments Hardware server sizing Vendor management Program management Business process definitions Functional and Technical specification designs Data migration services Training services Software Development Services Adapter development services for providing point solutions Product realization services Enhancing and customizing third-party OSS/BSS solutions for specific needs Management services 24x7 application support services Vendor management services Training services Network management services

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Consulting Services :
Business Process Consulting Technology Consulting Design Selection

3.3.3 - Wipro Advantage

Strong Domain knowledge : running into many hundreds of person-years, enabling us to design intelligent solutions to IT-centric business problems. End to end solution : offering consisting of a complete array of IT solutions and services ranging from application development, e-business and enterprise solutions to infrastructure solutions and VLSI design.

Low Total Cost of Ownership : resulting into 35% cost savings and 10% productivity enhancements. Time-to-Market advantage : Wipro, with its vast resources, is able to offer up to 75% time-to-market advantage, crucial to verticals such as Telecom. Scalability : Wipro can ramp up its resources with Quality to meet the most stringent of client requirements, onsite and offshore, resulting in faster implementation and cost savings.

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3.3.4 - Wipros Solution Delivery Approach

Wipro offers complete lifecycle Business & IT Services to Telecom & Internet Service Providers. We ensure cost effective solutions to our customers through an optimal combination of onsite and offshore delivery. Wipro Telecom Practice Lifecycle Approach is outlined below.

Figure 3.4

3.3.5 Global Alliances

1. BSS : Suntec Xacct, Portal, Lucent, Elitecore 2. OSS : Metasolve, Netcracker, Micromuse, Granite, HP 3. Wireless Applications : Converglabs

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Chapter 4

Research Methodology and Analysis

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Purpose of the Project

The telecom industry in India has been growing at a scorching pace in recent years. Teledensity, which was languishing at 2% or so in 1999, has shown an impressive jump to around 7% in 2003. We have moved decisively from an environment that was monopolized by state-owned companies, and in which there was huge unmet consumer demand for telecom services, to one that is characterized by intense competition among several players, and availability of quality telecom services on demand at very affordable prices. Much of this has happened because of the Wireless revolution taking place in the country, as is happening globally. The telecom sector continues to be one of the key vertical markets that IT vendors fight to have a slice of, as service providers continuously try to bring greater efficiencies into their current operations. In this fierce competitive scenario Operators will need to rapidly grow their subscriber base while simultaneously maintaining customer loyalty. The ability to segment customers, identify the best among them and maximize their value will determine success. The future value will reside in ownership of the customer relationship and provision of diversified services. This implies a trend towards bundled service offerings. For provision of bundled services, operators will need to have strategic alliances with intermediaries through whom traditional commercial transactions can be executed. Operators with the best interface strategies will succeed in maintaining customer loyalty. The ability to keep operating costs under control, like network capex (capital expenditure) and operating expenses, various Wireless operators have moved towards infrastructure sharing and outsourcing network activities. The operators should also pay rigorous attention to recognizing and retaining revenue by implementing revenue assurance solutions to plug revenue leakage. Thus the comparative analysis of these telcos will give a detail insight to Wipros telecom vertical to effectively target the telecom service providers and help them in achieving their business goals and objectives. Precisely, rapid expansion of telecom industry, the diversified telecom product offerings, various range of services and low-cost business model & IT investment, have Alliance Business Academy Page 32 of 74

AIMA-Project necessitated the requirement of choosing the business partner who can help the telcos increase their revenue and optimize their cost and capture the largest market share. Hence the topic chosen is very relevant in the present corporate scenario and has emerged from my area of interest.

Contribution of the project

The report offers a look at how IT vendors position their products and solutions to help service providers reduce costs and accelerate their ROI (Return On Investment) while bringing a new dimension to communication. Insights on competitive dynamics, revenue opportunities, partnerships and alliances, business models as well as adoption trends will be analyzed and discussed across all service segments in the telco space. Since the project intends to focus on finding the total IT investments of the Telcos, their current position in the market and finally the critical analysis of their concern areas (pain areas), hence the contribution made by it would be of the following nature : i) It would provide information to the management of Wipro on deciding their target segment. ii) It would help Wipro to specifically focus on the concern areas of various telcos. iii) It would give an insight to Wipro to develop their business plan (marketing plan) or business proposals for their clients. iv) Study provides the insights into the key drivers and inhibiters impacting market growth and development and value proposition of leading telcos.

Type of Research
This is an exploratory research

Sources of Data
Primary data will be collected by the means of Interview with the various people in the organization like o Business Heads o CIOs (Chief Information Officers) o CTOs (Chief Technical Officers)

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AIMA-Project The secondary data, which are the main sources of data for this project will be collected from o Internet o Company Websites o Newspaper articles o Telecom Journals / Magazines o In-house documents

Tools of Data Collection

1. Questionnaire : The partial list of questionnaire was prepared to be asked to the people (sample) at the time of interview. 2. Personal Interview : Personal Interview was done to collect the data on their (telcos) current and future IT spent, their partnership programs, etc The key questions asked during the interview were... i) To what extent does IT spending make up the total CAPEX (Capital Expenditure) among service providers? ii) Where are the pockets of opportunities for IT vendors in the telecommunications landscape? iii) How can IT vendors partner to bring their services or solutions to the telecommunications service providers? iv) How can service providers leverage new technologies and IT solutions to reduce churn and accelerate their return on investment?

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Sampling Plan
Sampling Technique : Non Probability Sample Size : 10 Telcos (telecom service providers) Sample Description : o Business Heads o CIOs (Chief Information Officers) o CTOs (Chief Technical Officers)

Tools used for the data analysis

MS-Excel

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Chapter 5

Industry Analysis of Telcos Across India

RESEARCH REPORT (Data as on March 2004)

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Cellular Service Providers across India

Figure 5.1

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Telcos Operating Circles

Service Provider No. of Circles

Service Area Andhra Pradesh, Karnataka, Punjab, Delhi, UP(W), MP, Maharashtra, Gujarat, Himachal Pradesh, Mumbai, Tamil Nadu, Kerala, Haryana, Chennai, Kolkata Delhi, Kolkata, Mumbai, Andhra Pradesh, Karnataka, Chennai, Gujarat, Punjab, Haryana, Rajasthan, UP(E) Delhi, Mumbai Gujarat, Madhya Pradesh, Andhra Pradesh, Maharashtra, Delhi Madhya Pradesh, West Bengal, Himachal Pradesh, Assam, Bihar, Orissa, NE Mumbai, Maharashtra, Kerala, Tamil Nadu Tamil Nadu, Chennai Punjab, Karnataka Andhra Pradesh, Karnataka, Punjab, UP(W), Madhya Pradesh, Maharashtra, Gujarat, Himachal Pradesh, Tamil Nadu, Kerala, Haryana, Chennai, Kolkata, UP(E), Rajasthan, West Bengal, Bihar, Orissa, North-East, Assam, J&K Kerala, Haryana, UP(W) Rajasthan

Bharti

15

Hutch

11

MTNL Idea

2 5

Reliance

BPL Aircel Spice

4 2 2

BSNL

21

Escotel Hexacom

3 1

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AIMA-Project Table 4.1

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5.1 - Overall Performance Indicator of Telecom Services

%age growth over FE 2003 (One Year)

Indicators

FE 2000

FE 2001

FE 2002

FE 2003

FE 2004

1) Subscriber's Base (in millions) i) Fixed ii) Mobile Gross Total iii) Internet iv) Broadband 26.65 1.90 28.55 0.95 NA 32.71 3.58 36.29 3.04 NA 38.33 6.54 44.87 3.42 NA 41.48 13 54.48 3.64 0.08 42.84 33.69 76.53 4.55 0.19 3 159 40 25 138

2) Traffic (MOU) (Minutes Of Use/ sub/month) * i) Mobile (Cellular)

197

223

218

225

302

34

3) ARPU (Avg. Revenue Per User) (Rs./sub/ month) ** i) Mobile (Cellular) ii) All Services (Fixed, Mobile, NLDO, ILDO)

1319

1113

884

634

469

-26

NA

NA

794

682

575***

-16

4) Teledensity (%age) Alliance Business Academy Page 40 of 74

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Population in million (Estimated) i) Fixed ii) Mobile Gross Total

1016 2.62 0.19 2.81

1032 3.17 0.35 3.52

1048 3.66 0.62 4.28

1069 3.88 1.22 5.10

1088 3.94 3.10 7.04

2 2 155 38

* Data regarding MOU for fixed lines not available ** Data regarding ARPU for fixed lines not available *** Estimated ARPU for all services combined Table 4.2

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Performance of Telcos
Mobile (Cellular & WLL (M)) Services Subscriber Base (in Million) %age growth over FE 2001 FE 2002 FE 2003 FE 2004 FE 2003 (One Year) 0.19 0.69 0.71 0.34 0.64 0.41 0.27 0.31 0.02 0.05 3.58 0.38 1.35 0.04 1.27 0.81 0.90 0.54 0.47 0.50 0.05 0.22 0.01 0.004 0.09 6.54 Table 4.3 0.54 3.07 2.29 2.16 1.28 1.13 0.73 0.64 0.59 0.16 0.35 0.03 0.03 0.13 13.00 7.26 6.50 5.53 5.15 2.73 1.88 1.29 1.21 0.99 0.63 0.46 0.03 0.03 0.26 33.69 1244.44 111.73 141.48 138.43 113.28 66.37 76.71 89.06 67.80 293.75 31.43 0.00p 0.00 100.00 159.15

Service Providers

FE 2000

Reliance Bharti BSNL Hutch Idea BPL Group Others Spice Escotel Tata/ Hughes MTNL HFCL Shyam Hexacomm Total

0.07 0.36 0.45 0.16 0.34 0.21 0.17 0.14 0.02 1.90

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Top Five Telcos Market Share

%age %age share on share on March04 March '03 March '04 March03 0.54 3.07 2.29 2.16 1.28 7.26 6.50 5.53 5.15 2.73 Table 4.4 4.15 23.62 17.62 16.62 9.85 21.55 19.29 16.41 15.29 8.10 Subscriber Base (in million)

Service provider

Reliance Bharti BSNL Hutchison Idea

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Subscriber Base(As on March '04)

Idea 10% Hutchison 19%

Reliance 27% Reliance Bharti BSNL Hutchison Idea

BSNL 20%

Bharti 24%

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5.2 - Category-Wise Subscriber Base & Market Share

Category Subscriber (In Million) Mar04 7.94 30.4 A Circle 9.71 37.1 28.3 B Circle C Circle All India 7.40 4.2 1.11 100 26.2 Table 4.5 106.13% 118.90% 119.32% 122.41% 78.85% % Share for Mar04 Growth Rate for Mar03Mar04

Metros

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40 35 30 25 20 15 10 5 0 Subscriber(In Million) Mar04 % share for Mar04 Metros 7.94 30.4 A Circle 9.71 37.1 B Circle 7.4 28.3 C Circle 1.11 4.2

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Revenue per Minute (RPM) [Incoming + Outgoing] Cellular Service: Postpaid Financia l Year FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 RPM % (Rs.) Change 6.55 4.82 3.67 2.55 1.79 NA -27% -24% -30% -30% Prepaid RPM (Rs.) 7.32 5.65 5.43 3.49 1.39 % Change NA -23% -4% -36% -60% Blended RPM (Rs.) 6.70 4.98 4.05 2.82 1.55 % Change NA -26% -19% -30% -45%

Table 4.6

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Subscriber Base & Market Share of Telcos [Cellular + WLL(M)]

Mar04 Telcos Reliance Bharti BSNL Hutchison Idea BPL Spice Escotel Tata MTNL Hexacom Shyam HFCL Others (Aircel, RPG etc.) Total Sub. Base Mar'03 5.41 30.17 22.98 21.63 12.80 11.31 6.40 5.87 1.47 3.47 1.32 0.33 0.32 6.43 72.65 65.04 55.36 51.48 27.33 18.83 12.08 9.89 6.25 4.63 2.57 0.27 0.29 10.26 %age share for Mar04 21.6 19.3 16.4 15.3 8.1 5.6 3.6 2.9 1.9 1.4 0.8 0.1 0.1 2.9

336.91 130 100

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AIMA-Project Table 4.7

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Subscriber Base & Market Share of Telcos (Cellular)

S.No Cellular Group Market Share No. of Subscribers (Mar04)

1.

Bharti Grp

24.9 %

65.04 lakh

2.

BSNL

20.1 %

52.54 lakh

3.

Hutchison Grp

19.7 %

51.48 lakh

4.

IDEA Grp

10.4 %

27.33lakh

5.

BPL Grp

7.2 %

18.83 lakh

6.

Others (Hexacom and Aircel)

4.9%

12.83 lakh

7.

Spice Grp

4.6 %

12.08 lakh

8.

Escotel Grp

3.8%

9.89 lakh

9.

Reliance Grp

3.0 %

7.90 lakh

10.

MTNL

1.4 %

3.60 lakh

Total

100%

261.54 lakh

Table 4.8

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Subscriber Base & Market Share of Telcos (WLL-M)

S.No . 1 2 3 4 5 6

CDMA Operators

No. of Subscribers 64,74,349 6,25,267 2,82,336 1,02,739 29,908 27,632 75,42,231 Table 4.9

Market Share (%) (Mar04) 85.84 8.29 3.74 1.36 0.40 0.37 100%

Reliance Infocomm Tata Teleservices BSNL MTNL HFCL Shyam Telelink Total

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5.3 - Trends in ARPU and Usage Pattern (MOU)

ARPU (per month during the year) - Cellular service (Rs.)
Postpaid Financi al Year FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 Prepaid Blended % % chang chang % ARPU e ARPU e ARPU change 1560 1501 1335 1176 1056 NA -4% -11% -12% 822 597 484 346 NA -27% -19% -28% -17% 1319 1113 884 634 469 NA -16% -21% -28% -26%

-10% 288 Table 4.10

MOU (sub./month) - Cellular Service (Incoming + outgoing)

Postpaid Financi al Year FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 MOU % per chang sub. e 238 312 363 460 590 NA 31% 17% 27% 28% Prepaid MOU per sub. 112 106 89 99 208 % chang e NA -6% -16% 11% 110% Blended MOU per % sub. change 197 223 218 225 302 NA 13% -2% 3% 34%

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Table 4.11

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Operational Revenue and Market Share for 2002-03

S. No Name of Company Service Provided Amount (Rs in crore) 25293.15 5806.53 4538.55 601.35 1102.5 359.59 261.89 89.48 58.87 222.4 125.58 1398.22 671.77 Market share % 55.38% 12.71% 9.94% 1.32% 2.41% 0.79% 0.57% 0.20% 0.13% 0.49% 0.27% 3.06% 1.47%

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

BSNL MTNL VSNL Data Access (I) Ltd Bharti Infotel Ltd TataTeleservices (Maharashtra) TataTeleservices HFCL Shyam Telelink Ltd AIRCEL LIMITED AIRCEL Digilink India Ltd. Bharti cellular Ltd. Bharti Mobile Ltd. BPL Mobile Communications Ltd. BPL Mobile Cellular Ltd. BTA Cellcom Ltd (RPG Cellcom) Escotel Mobile Communication Ltd. Fascel Ltd.

Basic Basic NLD/ILD ILD Basic /NLD/ILD Basic Basic Basic Basic Mobile Mobile Mobile Mobile Mobile

442.58 Mobile Mobile Mobile 412.48 88.86

0.97% 0.90% 0.19%

321.91 363.51

0.70% 0.80%

Mobile

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19 20 21 22 23 24 25 26

Hexacom India Ltd. Hutchison Essar Telecom Ltd. Hutchison Max Telecom Pvt Ltd. Hutchison Telecom East Ltd(Usha) IDEA Cellular Ltd. Reliance Telecom RPG Cellular Services Ltd. Spice communications Ltd Total Revenue

Mobile Mobile Mobile Mobile

115.34 533.44 766.89 204.3

0.25% 1.17% 1.68% 0.45%

Mobile Mobile Mobile Mobile

851.46 356.41 186.05 499.13

1.86% 0.78% 0.41% 1.09%

45672.24 100.00%

Table 4.12

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Telco Partners
MTNL
Joint Ventures with United Telecom Ltd. (UTL) Telecom Consultants India Pvt Ltd. (TCIL) VSNL NVPL (Nepal Ventures Pvt, Ltd.)

HFCL
Lucent Compaq Cisco Bell Nexxia Suntec Customers : TTL, Reliance, Bharati, VSNL, Shyam, Connect, Railways, Defence, GAIL, PGCIL, BSES.

BSNL
ISpatial Communication Pvt.

Subsidiaries
HFCL Infotel HTL Ltd. HFCL Satellite Comm. Ltd. Himachal Exicom Comm. Ltd.

AsiaNet
ER & DC Tech. Consultants CISCO USA SingTel Pan-Asian System (Hong Kong) Network Technologies SUN Services Philips India HCL Wipro System Integration

RPG Cellular
NTT & Hochu of Japan Star Paging of Hong Kong Sprint of USA

Idea
Nokia - GSM Ericsson - GSM Schlumberger Sema Billing system provider NDTV Indiatimes C2W Alcatel - Transmission Equip.

BPL Mobile
Nokia Motorola LHS

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5.4 - Telcos Technological Investments

1. BSNL : Digital switching technology like OCB,EWSD,AXE-10, FETEX, NEC etc. and widespread transmission network including SDH system upto 2.5 gbps, DWDM system upto 80 gbps, web telephony, DIAS, VPN, Broadband. Network management & surveillance system (NMSS). 2. IDEA : EDGE Compatibility, GSM, GPRS, CDMA, TDMA, Satellite Phones 3. BPL Mobile : Unique network design, the Qualnet, Camel Phase2 Intelligent n/w, GPRS, MMS, Mobile Browsing, JAVA Based games. 4. MTNL : CSMS (Customer Services Management System), FRS (Fault Repair Service), DQ (Directory Enquiry), FMS (Financial Management System), IVRS (Interactive Voice Response System) and accounting and billing systems. 5. AsiaNet : HFC Hybrid Fibre Coaxial, CATV, Video/Voice/Data Technologies 6. HFCL : Landline Telephone, Mobile Phone, PCOs, Centrex DSL, Intelligent n/w, ISDN, Leased Line, Internet leased line, CDMA, CorDECT, GSM, DLC. OSPMS is automated software for Outside Plant Management. The main features of OSPMS are: o OSP Network Element Management for Wireline & Wireless o OSP Network Element Management for Fibre - Backbone & Backhaul o Services Provisioning o Fault Management Assistance

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Future Plans
1. Spice : a. Plans to first consolidate its server environment thereby making server environment thereby making it easier to backup all the servers on the network onto the Quantum M1500 b. Planning to invest Rs.75/- crore to support its operations in the Karnataka cellular circle this year. 2. IDEA : a. Planning to invest Rs.100/- crore in UP(West) b. Planning to invest Rs.50/- crore in Haryana c. Plans to expand its Pre-Paid market. 3. MTNL : a. Plans to expand 15 lakh lines of GSM & CDMA technology in Delhi and Mumbai & Introduce convergent services like Video, Voice & Data or Copper line. b. Projects in Pipeline E-commerce, Billing mediation, Telecom software, New IT Policy, consultancy etc c. Preparing to offer GSM with 32K SIM d. Planning to acquire (Bid for) Rwanda Telecom (Africa). 4. HFCL : a. has applied for license in 7 states b. initiated steps to expand the fixed-line services to 100 towns by Sept 2004. c. Company is in the process of investing in IT system & OSS to meet the billing, regulatory and data warehousing. d. Successfully proposed a 70 million USD access network solution to the ministry of Kuwait. 5. BSNL : a. Plans to provide VASs through broadband & provide fibre-to-homes in 23 years. b. BSNL will invest Rs.14,700/- crore in expanding its primary GSM & CDMA based mobile telecom network during 2004-05 c. Planning to expand 15 million lines. 6. BPL Mobile : a. Plans to continue its investment to enhance its network infrastructure and maintenance. b. Plans to add 550 base stations across all its market. c. Planning to introduce for the first time in country the concept of Mobile Gaming Community. d. Planning to launch Push-to-talk and Caller Ring Back Tone. e. Making an investment to further enhance its coverage and capacity in Maharashtra & Goa. 7. Hutch : a. Plans to invest Rs.460/- crore in Punjab circle.

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AIMA-Project 8. Bharti : a. Bharti, The new plan includes Bharti rolling out its mobile services in 6 more circles i.e. J&K, UP-East, West Bengal, Orissa, Bihar and Rajasthan b. AirTel to expand its mobile services to 1000 new towns during 2004-05, out of which 300 towns to be added in the 6 new circles c. Across the 21 AirTel circles, mobile connectivity to be provided to 20,000 new villages by the end of this fiscal d. Network capacity to be scaled up to cater to more than 11 million subscribers e. Scaled up network will be capable of handling 4 billion call minutes per month f. AirTel to double its cell sites from 5000 to approx. 10,000 across the country g. 53 Mobile Switching Centers (MSCs) to be functional by the end of the year h. AirTel to invest approx. Rs. 300 crores to rollout its services in the east

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Other Information
1. Total Subscriber Base : 33.69 million (at the end of March 2004 as against 13 million last year) 2. Annual Growth Rate : 160 % 3. Change in Market Structure : a. During the year, BSNL started its services in 4 new circles (i.e. Assam, Chennai, J&K and North East. b. M/s. Escotels Punjab Circle operations have been over taken by M/s. Hutchison and now they are providing services in 11 circles. c. M/s. Aircel Digilink India Ltd. has been taken over by M/s. Hutchison Group. d. The name of RPG Limited has been changed as M/s. Aircel Cellular Ltd in Chennai. e. M/s. Reliance is operating in 22 circles in the country. 4. Highlights : a. Prepaid to Postpaid Ratio 75 : 25 at the end of March 2004 b. Prepaid segment has grown by 26.7 times whereas growth is Postpaid has been just 5.6 times in the last five years. c. ARPU for GSM cellular services has declined from Rs.1319 / month in 2000 to Rs.469 / month. i. ARPU for Postpaid Rs.1560 / month to Rs.1056 / month in last 5 years (decline of 32%) ii. ARPU for Prepaid Rs.822 / month to Rs.288 / month in last 5 years (decline of 65%) d. MOU (Minutes Of Use) per subscriber per month for GSM has increased from 197 to 302 (increased by 53%) i. Postpaid 238 to 590 (increased by 148%) ii. Prepaid 112 to 208 (increased by 85%) 5. Overall Telecom Sector Revenue for all operators for the year 2002-03 was Rs.45672 crores.

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State-Wise Wireless Market Size

Figure 5.1

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Chapter 6

Summary of Finding and Recommendations

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Findings and Recommendations

1. The industry is operating on wafer thin margins leaving it with inadequate resources to fund network expansion and growth to remote, rural and unserved areas. 2. Coupled with the low ARPUs, the industry is also been greatly challenged by the high costs of duties & levies that have been imposed on the sector. 3. As an application developer, ensure sound project management disciplines are introduced and, once in place, improve them. Build performance metrics. Seek certification from recognized bodies. Carefully consider and perhaps refuse high-risk projects. Understand the customers environment. 4. Take time to understand the SME market in the region. Enterprises interested in investing should consider partnering with an SME to gain access to customers, local knowledge and sales channels. However, remember the higher costs when compared to large enterprises. Ensure that solutions are cost-effective at the lower end of the market. 5. Be aware of levels of IT saturation as attempts to expand the enterprises customer base proceed. Test products in unsaturated markets. 6. Consider any unique economic conditions that may affect a vendors success as a new player in a market. 7. In these uncertain times, position growth and ROI to clients and prospects. 8. Position a specialist skills base to complement the multiskilled base of clients. 9. Use local vendors as channel partners. 10. Partner with local education facilities to attract local talent, reducing the skills gap and minimizing the need for inter-company transfers

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11. If a vendors solution is e-business implementation, the positioning strategy needs to differ depending on the country targeted and where it is on the ebusiness hype cycle. Allow for market cynicism in some countries, and communicate the benefits of working through this to realize the profits. 12. Local vendors should use government support, education facilities and established local brands to help raise the barriers of entry to multinationals. 13. Communications service providers have reduced capital expenses in the United States; however, opportunity remains for revenue assurance strategies and improvements to IT systems. 14. The hardware market experienced negative growth in 2001 with the competition leading to price reductions for computers and peripheral devices. Further price reductions, coupled with replacement cycle, has lead to null growth in this fiveyear period for the U.S. market. 15. Wireless continues to gain momentum in IT spending in the Asia/Pacific region (17.6 percent) and Latin America (17.5 percent). Europe is recovering from 3Glicense debt, which will impede high growth (9.3 percent). 16. Asia/Pacific has experienced explosive adoption rates in broadband services. External spending in the cable/satellite sub sector is forecasted to have the highest growth rate of 16.1 percent. 17. Worldwide business support systems' market opportunity is $28.8 billion in 2000, growing at 8.2 percent to $42.7 billion by 2005. 18. Worldwide OSS market opportunity was $18.1 billion in 2000, growing at 9.3 percent to $28.3 billion by 2005. 2 Communications Industry Worldwide Market Forecast, 2000-2005

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AIMA-Project 19. Media (TV and radio broadcasting) is forecasted to be the fastest growing sub sector in North America (11.7 percent). 20. Total worldwide wireline external spending is expected to grow at 6.2 percent from $39 billion in 2000 to $53 billion in 2005. 21. It's imperative to target your solutions offerings specifically to the industry subsegment. Adoption rates vary accordingly. Investment priorities vary across BSS and OSS requirements. 22. Rapid changes have taken place within the industry. It is advisable to keep abreast of economic conditions and regulatory environment and carriers' competitive landscape. 23. Regional regulations and policies impact IT spending for the communications industry. Before targeting a specific region, understand the regional dynamics and bureaucratic underpinnings as well as governmental involvement in regulations. 24. Opportunities exist even in small-growth areas. It is important to leverage existing client base relations to develop further engagements. 25. Bias toward local players such as system integrators does exist in some regions. Further investigation of strategic partners may be necessary to establish relations.

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Recommendations
1. From Software to solution On one hand, with industry consolidation and operational cost containment, there is a downward demand for OSS ware. But on the other hand, there is a new demand for consulting services (from solution design to change management) that is a Greenfield opportunity. 2. The one big hot-button With limited budgets and resources, service providers are increasingly investing in solutions that drive sustainable improvements to business operations and that deliver enhanced capabilities to end-users. Vendors should be able to identify this one issue for each potential service provider customer and focus their ROI claims to the particular needs of this customer. 3. Let us do if for you Outsourcing is by far the most lucrative, resource-intensive customer care solution delivery method for vendors. A number of functions such as churn management, value analysis and call centers may be outsourced to vendors. However, we find that service providers in the region are highly reluctant to give up control over billing and some customer care functions by outsourcing the same to vendors. It may also gain some popularity with smaller service providers because an outsourced billing solution would be one less distraction from the critical path of getting a carrier up and running. 4. But if you insist on doing it yourself Although outsourcing may be a lucrative solution delivery method for vendors, it is important for vendors that they have the flexibility to provide solutions to service provider customers in the manner that they prefer. If vendors offer only one solution delivery method, then they are themselves restricting the set of service providers that they can acquire as customers. 5. Putting it together Optimally, billing solution vendors should look for professional service opportunities that are closely related to the software product. In this way, expertise and familiarity with the solution will be high, lowering the probability that the project will drag on longer than estimated and deteriorate the Alliance Business Academy Page 66 of 74

AIMA-Project project profit margin. In the deployment of OSS solutions, strong business partnerships between platform vendors, OSS vendors, and SIs are vital. Vendors should also cooperate with other vendors in billing, customer care, service fulfillment, and network management to get a head start in the design and deployment of adaptors for interfaces between products that would be inevitable during a deployment. This hands-on experience with related software is just as important as the alternative sales channels that some partnerships provide. Partnerships with SIs are also valuable, especially if leveraged correctly. In an ideal solution, a vendor would perform the integration that it is most capable of and have the best chance of profiting from while the system integrator performs the rest. 6. Creating market awareness A focus on customer needs throughout the research and product development cycle can help create a value proposition that creates customer satisfaction while still enabling profitability. It is important for vendors to have significant product differentiation and build brand awareness in the unique aspects of their solutions. The key for vendors is to determine the best, differentiated aspects of their solution, publicize these aggressively, and continue a position of dominance in this area. This is the best way to participate in a market where competition will put downward pressure on pricing for comparable solutions and premium pricing can only exist for unique product offerings.

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AIMA-Project 7. Broad cross-domain expertise From a technology standpoint, a system integrators experience in all of the major telecommunications verticals, such as wireless, wireline local, long distance, data communications, and Internet play a significant role in their ability to address the OSS/BSS challenges within a convergence market. It is important to cover a broad range of service providers in each of these segments, but more importantly, to cover those service providers that are converging either their own service offerings, or those that have merged with other organizations. Additionally, service providers of all sizes are now offering common types of services; many ISPs offer IP Telephony services, as do a number of traditional carriers. This creates an even stronger need for an in integrated OSS environment, thus requiring system integrators to work with different carrier environments.

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Chapter 7

Conclusion

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AIMA-Project I would like to conclude the above research report by mentioning some points here. India is among the fastest growing market in the world specially in the field of telecommunications. Large investments in the field of telecommunication have been made by the major telcos in the country as well as world. Indian government in also facilitating the growth of telecommunication in the country as telecom industry is one of the most important industry for the economic growth of India. Large investments are project by the enterprises using telecom software for eenablement. India is becoming the global hub for off shoring by the major telecom service providers. Due to increase in the FDI limit from 49% to 74%, new foreign players are expected to enter the market which will give open up the immense opportunities for the solution and service vendors. All above parameters or factor indicates that there is huge opportunity for the ISVs(Independent Software Vendors), Sis (System Integrators), Solution vendors, Service Providers and TEM (Telecom Equipment Manufacturers).

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Chapter 8

Bibliography

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Websites:
1. All telco websites like a. www.hutch.co.in b. www.bhartiteleventures.com etc 2. www.wipro.co.in 3. www.wipro.com 4. www.wiprocorporate.com

Books:
1. Marketing Management Philip Kotler

Magazines / Journals:
1. Voice and Data 2. Connect World 3. Communications India

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Chapter 9

Appendix

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Questionnaire
1. What are your current initiatives being planned in your organization? 2. What are the various technologies used in your business? (Current IT Spend the way forward in terms of IT/network resource deployment) 3. What are your current OSS / BSS solutions that are being deployed in your network? 4. How far is it effective? (Any concern areas) 5. What is the measure of effectiveness? 6. What is your satisfaction level towards it? 7. What are your key areas of concern? ( Ex : Business / Technical / Operational / Finance etc.) 8. Are you able to achieve your planned ROI? 9. What actions (steps) are you planning to address the concern areas? 10. What is the future expansion plan of your company? 11. Any specific application / solution deployment that is being planned? 12. What is decision-making process within your organization? 13. What are the key criteria (parameters) of selecting a particular solution / vendor / partner? 14. Whats your present market position? (vis--vis competition). Ex : Market share, growth planned, revenues etc 15. What are your USP / Competitive edge? 16. What are your short-term as well as long-term goals / objectives?

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