CERTIFICATE

This is certified that Sakshi Arora, M.Com(Commerce), student of K.P.

Uccha Shiksha Sansthan Jhalwa Prayagraj, affiliated to Prof. Rajendra
Singh (Rajju Bhaiya) University, Prayagraj, has completed Dissertation
work on “An evaluation of the performance of commercial bank in
India during the last 2004-05 to 2013-14” the year 2023-24 for M.Com.
Degree under my supervision and guidance. The presentation of the
Dissertation work is her original work.

DATE: SUPERVISOR
AMAN SINGH
(COMMERCE)
 DECLARATION

SAKSHI ARORA, M.Com (Commerce) student of K.P. Uccha Shiksha

Sansthan Jhalwa Prayagraj declares the dissertation work.

“PERIOD” Conducted under the able guidance of AMAN SINGH is my

original effort which has not been presented elsewhere as to my best
knowledge and belief.

SAKSHI ARORA
(M.Com. Student)
MARKETING STRATEGIES OF CELLULAR
SERVICES (A STUDY ON
VISAKHAPATNAM URBAN CELLULAR
CUSTOMERS WITH A SPECIAL FOCUS
ON BSNL, AIRTEL AND VODAFONE)
 Historical Perspective

“Tomorrow the hearts of the civilized world will beat in

a single pulse, and from that time forth forevermore
the continental divisions of the earth will, in a
measure, lose those conditions of time and distance
which now mark their relations.”
(Times of London : 1858, when the first trans‐Atlantic telegraph cable
was built from England to the United States and Queen Victoria and
President Buchanan exchanged messages)

4
The Evolution of Telecom Services and its Reflections in India

“The Americans have need of the telephone, but we do not. We

have plenty of messenger boys.”
(Sir William Preece,
Chief Engineer of the British Post Office, 1876.)

• The history of modern telecommunication services originated with

the invention of electrical telegraph by an American artist‐turned
inventor Samuel F. B. Morse in 1837.
• The British started telegraph services in India at Calcutta in the year
1850.
• In 1854 the Telegraph Act was enacted in India.
• In Kerala the telegraph offices started functioning at Trivandrum,
Kollam and Alleppey in the year 1864.
5
The Evolution of Telecom Services and its Reflections in India…

• The revolution in the field of telecommunication started in the world

with the invention of telephone by Alexander Graham Bell in 1876.
• The Oriental Telephone Company Limited of England opened
telephone exchanges at Calcutta, Bombay, Madras and Ahmadabad
within five years after the invention of the telephone.
• The first manual telephone exchange with 100 line capacity was
installed in Kerala at Ernakulum in the year 1923.
• In 1889, Almon B. Strowger developed automatic mechanical
switching system named as Strowger switching system.
• The Travancore State Telephone System maintained by the Travancore
Electricity Department established the first auto exchange in
Trivandrum in the year 1948.
• The Travancore State Telephone System was taken over by the Indian
postal department in 1950.
6
The Evolution of Telecom Services and its Reflections in India…

• The electro‐mechanical switching systems, (cross‐bar telephone

exchanges) were fairly common in the developed countries
during 1950s. In Kerala the first cross‐bar telephone exchange
was installed at Ernakulam in the year 1968.
• In the year 1973, the first STD (subscriber trunk dialing) route in
Kerala opened between Trivandrum and Kottayam.
• In 1975, the first Trunk Automatic Exchange (TAX)
commissioned in Trivandrum and STD services started from
Trivandrum to Delhi. In the same year, the telecommunication
wing was separated from Indian postal department and
Department of Telecommunications (DoT) was formed.
• In 1979 STD PCOs (Public Call Offices) opened in Kerala.

7
The Evolution of Telecom Services and its Reflections in India…

• Although a separate government department was formed for

telecom services, the progress of telecom services sector was
substantially in a very slow pace in Kerala.
• The accesses to the telephone services even through the public
call offices were alien to the vast majority of general public.
They depended on the telegraph service available through the
post offices for their immediate long distance communication
needs.
• The telegraph services were one of the major businesses of
post offices at that period.

8
The Evolution of Telecom Services and its Reflections in India…

• The digital telephone exchanges were introduced in Kerala during the

year 1985. Within a short span of ten years the digital switching
systems replaced all its predecessors.
• This sudden technological change caused a crucial human resource
issue in the telecom department. The manpower requirements for
the management of digital telephone exchanges were very few as
compared to the earlier systems. Even though the excess employees
were redeployed in clerical and other cadres, the progressive
computerisation further complicated this issue.
• The legacy of government setup, interventions of trade unions, legal
battles related to promotions and cadre issues made human resource
management still a complicated problem in DoT (Department of
Telecommunications) turned BSNL (Bharat Sanchar Nigam Limited).

9
The Evolution of Telecom Services and its Reflections in India…

• Although the telecom revolution was took place in the world,

the telephone facilities in India were confined only to the upper
class of the Indian society till 1990s. Even in the late 1990s, ten
year old waiting lists were existed in the telephone exchanges
of Kerala to get the ordinary telephone connections.
• The telegraph services were quite popular till the introduction
of subscriber’s trunk dialling (STD) facility in landline telephone
networks. In Kerala the STD facility in telephones became
widespread in the latter part of 1990s.
• The telegraph service lost its glory with the further
advancements in landline and mobile telecommunication
networks. The 163‐year‐old telegraph services in the country
were closed by July 2013.
10
The Evolution of Telecom Services and its Reflections in India…

• In India in late 1990s the access to internet services was

introduced in landline networks in a very limited manner
through dial‐up modems.
• In early 2000s the broadband internet services were introduced
in India. The demand for broadband is primarily conditioned
and driven by the penetration of internet and personal
computers. The penetration of broadband, internet and
personal computers in the country was 0.02%, 0.4% and 0.8%
respectively at the end of December, 2003.
• In order to accelerate the growth of broadband services, the
Government of India introduced the broadband policy in 2004.

11
 The Telecom Business Trends in India
• The broadband policy 2004, defines the broadband connectivity as
an ‘always‐on’ data connection that is able to support interactive
services including internet access and has the capability of the
minimum download speed of 256 Kilo bits per second (Kbps). to
an individual subscriber from the point of presence (POP) of the
service provider intending to provide broadband service where
multiple such individual broadband connections are aggregated.
• The technology options to provide broadband services are optical
fibre technologies, digital subscriber lines (DSL) on landline copper
loop, cable television network, satellite media, and terrestrial
wireless technologies.
• The broadband services through the existing landline network
became a golden opportunity for landline telecom service
providers.
12
 The Telecom Business Trends in India…
• The landline subscriptions increased from 2.3 million in the year
1981 to 32.44 million in the year 2000 in India.
• The beginning of the twenty first century witnessed the world
wide overwhelming growth of mobile telecom services. In the year
2002, with one billion users worldwide, mobile communications
for the first time surpassed fixed‐line subscribers.
• Ingo Vogelsang (2009) describes the phenomenon of FMS (Fixed to
Mobile Substitution). The main explanatory factors for the
increased FMS in wealthy countries seem to be the demand
substitution from large price reductions in mobile relative to fixed
services and demand shifts arising from network effects and the
relative quality increase of mobile handsets or services. Lower or
reduced switching costs may have played some role, as has the
stimulating effect of the universal spread of mobile.
13
 The Telecom Business Trends in India…
• The mobile subscriptions exceeded fixed line connections in India
in the year 2004. Although the mobile connections overtook
landline connections, the land line segment was growing till the
year 2006 and reported a subscriber base of 41.54 million. The
landline industry has been showing declining trends since 2006.
The fixed phones were widely substituted by mobile phones in
India due to convenience and low pricing of the fast growing
mobile telecom services.
• At this declining stage of landline telephone services, the landline
broadband services gave some hope to the landline telecom
services sector. To an extent the broadband services provide value
addition to the landline telephone services. In the wired access
category, the landline broadband is the most preferred technology
option as it constitutes 84.81% of total broadband subscribers.
14
 The Telecom Business Trends in India…
• Chun‐Yao Huang (2011) elaborated that people in developing
countries have been able to skip landline‐based
telecommunication systems by directly adopting mobile phones
and enjoying their convenience. Such an observation is usually
labelled as leapfrogging. Relative to landlines, a mobile system
is relatively cost efficient in infrastructure investment.
• Indeed, many people in developing countries benefit greatly
from the relatively accessible mode of mobile telecom services.
Telecom leapfrogging happens in within‐country sense in which
people directly jump to mobile systems without the stepping
stone of landlines.

15
 The Telecom Business Trends in India…
• The present developments in telecommunication services
sector show that the leapfrogging is not only applicable to
landline telephone services but also to landline broadband
services. The advancements of wireless broadband services
raise unpleasant signals for the landline broadband services.
• In India the broadband customer base fetched 164.81 million by
March 2013. Out of this, 143.20 million customers (86.88%)
belong to wireless broadband services.
• The wireless broadband services become increasingly
favourable to the customers than the wired access broadband
services. The upcoming mobile telecom generations will
probably make the wireless broadband more and more
advantageous to the customers.
16
 The Business Role of BSNL Starts
• During the pre‐liberalization regime in the country, the business
of telecommunication services was fully managed under
government monopoly. The whole telecom business in all
regions other than Mumbai and Delhi were carried out directly
by the government department, the Department of
Telecommunications (DoT).
• In Mumbai and Delhi the telecom business was the monopoly
of a Government owned company called MTNL (Mahanagar
Telephone Nigam Limited).
• The Government of India corporatized the operations and
telecom business wing of DoT on 1st October 2000 and named
it as Bharat Sanchar Nigam Limited (BSNL).

17
 The Business Role of BSNL Starts…
• The BSNL operates as a public sector enterprise. Initially BSNL
concentrated only on fixed line (landline) telecom business. By
the end of the year 2002, BSNL also started operating mobile
communication services.
• In India by the end of March 2013, the number of the landline
subscriptions came down to 30.21 million. The public sector
landline telecom service providers are BSNL and MTNL. The
private sector landline telecom service providers are Reliance,
Bharati Airtel, Tata, Quadrant, Sistema and Vodafone.
• Even in the decline stage of the landline industry the private
sector providers have substantially improved their positions.
• The BSNL is the most adversely affected service provider in the
down turn of landline industry.
18
 The Mobile Revolution Starts with Radio
• In 1895, Guglielmo Marconi transmitted wireless signals across
a distance of more than a mile, an event that may consider the
birth of radio.
• During the Second World War radio telephony links were
utilized for military gains. Hand‐held radio transceivers became
available from 1940s. In the United States, engineers from Bell
Labs began to work on a system to allow mobile users to place
and receive telephone calls from automobiles, leading to the
inauguration of mobile service on 17th June 1946 in St. Louis,
Missouri, USA.

19
 The Mobile Paging Era
• During the same period, along with mobile telephony, mobile
paging services also appeared in the telecom world.
• The pager was primarily a one‐way communication system that
receives and displays numeric or text messages.
• One of the first practical paging services was launched in 1950
for physicians in the New York City. Physicians paid US$12 per
month for the service and carried a 200 gram pager that would
receive messages within 40 kilometres from a single transmitter
tower.
• The system was manufactured by the Reevesound Company and
operated by Telanswerphone.

20
 The 1G Mobile Telephony
• The Motorola was the first company to produce a handheld
mobile phone. On 3rd April 1973 Martin Cooper, a Motorola
engineer and executive, made the first mobile telephone call
from handheld subscriber equipment in front of reporters,
placing a call to Dr. Joel S. Engel of Bell Labs, USA.
• The further developments in mobile telephony gave birth to the
first generation (1G) mobile telecommunication services.
• The first generation mobile networks launched in early 1980s
were designed with primary focus on voice communications ‐
analog in nature ‐ and facilitated localized wireless services.

21
 The 1G Mobile Telephony …
• The major first generation systems were: AMPS (Advance
Mobile Phone System) of United States of America, TACS (Total
Access Communications System) of Europe and NMT (Nordic
Mobile Telephony) of Scandinavian countries.
• The systems were known as ‘cellular systems’ because coverage
areas were split into smaller areas or ‘cells’ for facilitating
frequency reuse.
• Each cell is served by a Base Transceiver Station (BTS) commonly
known as mobile tower.
• The use of first generation mobile telecom services was limited
mainly in developed counties. The first generation services
didn’t have any root in India.

22
 The Mobile Revolution in India
• The public access mobile telecommunication services in India
started with mobile radio paging services.
• India opened up Radio Paging Service in the year 1992 and
awarded licenses for 27 cities and 19 Circles (States) through an
open tendering process.
• The service was commercially launched in 1995. The licensed
radio paging service providers in Kerala were: BPL Wireless
(Circle paging license including cities of Ernakulam and
Trivandrum), Punwire Mobile (Circle paging license excluding
cities of Ernakulam and Trivandrum), Telesistem (City paging
license to operate on cities of Ernakulam and Trivandrum), and
Eider PWI Com (City paging license to operate on Trivandrum
city).
23
 The Mobile Revolution in India…
• The Government fixed ceiling for the tariff of radio paging
services. The ceilings fixed on rental were Rs. 150 for both
numeric and alphanumeric pagers. This ceiling has since been
revised by TRAI (Telecom Regulatory Authority of India) to Rs.
175 and Rs. 300 per month for numeric and alphanumeric
pagers respectively.
• It is interesting to look at the cost of pagers available at that
time in India. The costs vary with functional utility of the
devices such that the cost of numeric pager was of the order of
Rs. 1300. The indicative prices of alpha numeric pagers were:
Rs. 1500 for single line pager, Rs. 1600 for two line pager, and
Rs. 2000 for four line pager. In March 2000, the pager customer
base in Kerala was nearly fifteen thousand against the national
figure of 7.33 lakhs. 24
 The 2G Mobile Telephony
• The great success in continued research and developments of
mobile telephony caused the worldwide commercial launch of
second generation (2G) public access mobile phone services in
1990s.
• The 2G systems were digital in nature, had enhanced voice
capability, better radio spectrum management, wider coverage
area and better mobility.
• The prominent 2G technologies are European based GSM
(Global System for Mobile Communication) technology and US
based CDMA (Code Division Multiple Access) technology.
• These technologies were mainly used for mobile voice services.
The 2G technologies support data services with low bit rates,
ranging from 9.6 Kbps to 14.4 Kbps.
25
Introduction of 2G & the End of Mobile Pagers
• The second generation mobile communication services started in
India in 1996. In Kerala the services started in the same year. At
that time the mobile telephony was not a threat to paging services
due to its luxurious nature.
• But in the subsequent years the cost of the cellular telephony was
coming down very fast. The radio paging industry struggled hard
to sustain. Meanwhile the pager companies targeted customers
those who could not afford mobile phones but wish to remain stay
connected while away from the normal workplace or home. In
order to attract this segment, the radio paging service providers
offered affordable communication facility, in conjunction with the
availability of public call offices (PCO). But in due course the
mobile telecom services became cheaper and more widely
available. This caused the disruption of pager innovation.
26
 The 2.5G
• In early 2000s the focus of wireless companies shifted to enhance
data rates due to high market expectations for the same. By the
year 2001, improved versions of second generation technologies
such as GPRS (General Packet Radio Service), EDGE (Enhanced
Data for GSM Evolution) and CDMA 2000 ‐ 1x RTT (Radio
Transmission Technology) were introduced. These technologies are
commonly known as 2.5G technologies, offering data services such
as voicemail, e‐mail, location‐based services (LBS), web surfing
and other m‐commerce applications with data speed of the order
of 384 Kbps.
• The 2.5G mobile telecom services popularized in India from the
year 2005 onwards. These services are still widely used in the
country due to the barriers in the advancement of third
generation (3G) technologies.
27
 The 3G
• The third generation mobile communication systems promise
faster communication services, including voice, video and data.
This technology was born resulted from the vision of ITU
(International Telecommunication Union).
• The ITU introduced the concept of 3G technology in the mid‐
1980s known as IMT‐2000 (International Mobile
Telecommunications ‐2000).
• The IMT‐2000 was the result of collaboration of many entities,
inside the ITU and agencies outside the ITU such as 3GPP (Third
Generation Partnership Project), 3GPP2 (Third Generation
Partnership Project Two), and so on.

28
 The 3G…
• The 3GPP group was responsible for the development and growth of
the UMTS (Universal Mobile Telecommunications Systems)
technology. The UMTS is the evolutionary 3G system of the GSM
(Global System for Mobile communication) family.
• The 3GPP2 group was responsible for the development and
standardization of CDMA2000 (Code Division Multiple Access 2000)
based 3G systems.
• The ITU’s global standard for 3G, the IMT‐2000 had opened the way
for enabling innovative applications and services like multimedia
entertainment, infotainment and location‐based services.
• On 1st October 2001, the 3G services were commercially launched by
NTT DoCoMo in Japan. According to ITU, 3G services should provide
data rates of 144 Kbps for vehicular, 384 Kbps for pedestrian and 2
Mbps for indoor environment.
29
 The 3G in India
• On 11th December 2008, India entered the 3G arena with the
launch of 3G enabled mobile and data services by the
government owned telecom company, Mahanagar Telephone
Nigam Limited (MTNL) in Delhi and then in Mumbai.
• MTNL has become the first 3G mobile service provider in India.
After MTNL, another State owned operator Bharat Sanchar
Nigam Limited (BSNL) launched 3G services on 22nd February
2009 in Chennai and later launched 3G nationwide.
• The auction of 3G wireless spectrum was announced in April
2010 and 3G Spectrum allocated to private 3G service providers
on 1st September 2010.

30
 The Growth of Mobile Telephony in India
• The initial growth rate was very low in mobile segment due to varied
reasons such as premium pricing of services, lower network coverage
and relatively high cost of mobile handsets.
• The subsequent favourable policy matter decisions of the
government, ever growing mobile communication technologies and
competition among mobile service providers helped mobile telecom
services industry to grow in India in a rapid manner.
• The mobile phone subscriptions enhanced from the relatively small
figure of 1.88 million in March 2000 to 867.8 million in March 2013.
The number of mobile telecom services providers became 13 by
March 2013. The service providers and their market share are Airtel
(21.69%), Vodafone (17.56%), Reliance (14.17%), Idea (14.01%), BSNL
(11.66%), TATA (7.65%), Aircel (6.92%), Uninor (3.65%), Sistema
(1.37%), MTNL (0.58%), Loop (0.35%), Videocon (0.23%), and
Quadrant (0.16%). 31
 The 4G

• The fourth generation mobile telecom services marketed as 4G

LTE (Long Term Evolution) is a standard for wireless
communication of high‐speed data for mobile phones and data
terminals.
• It is based on UMTS (Universal Mobile Telecommunications
Systems) network technologies, increasing the capacity and
speed using a different radio interface together with core
network improvements. This standard is developed by the
3GPP.

32
 The 4G
• The world’s first generally available LTE service for the public
was launched by the TeliaSonera AB, a dominant telephone
company and mobile network operator in Sweden and Finland.
The services were launched in Oslo, Norway and Stockholm,
Sweden on 14th December 2009.
• Samsung introduced world’s first LTE Mobile phone on
September 2010. The LTE specification provides downlink peak
rates of 300 Mbps and uplink peak rates of 75 Mbps. The LTE
has the capacity to manage fast‐moving mobiles and supports
multi‐cast and broadcast streams.
• In India the 4G services were introduced at Kolkata by the
telecom service provider Airtel on 10th April 2012.

33
Performance of Mobile Service Providers in Kerala (1997 ‐2004)

7 BSNL
Mobile Subscribers in Lakhs

6 Escotel
5

4 BPL

3
Airtel
2

1
Reliance
0
1997 1998 1999 2000 2001 2002 2003 2004
Year

35
 The Market Growth 2004‐2007

• At the end of the year 2004, the Idea cellular bought over the
telecom company Escotel.
• In the year 2005 Tata Teleservices also entered in the mobile
telecom services market and the number of mobile operators
became six in Kerala.
• The mobile telecom service providers in Kerala as on December
2005 with their respective subscriber base and market share
were: BSNL (11.89 lakhs, 36.18%), Idea (7.66 lakhs, 23.31%),
Airtel (5.17 lakhs, 15.74%), BPL (4.26 lakhs, 12.96% ), Reliance
(2.52 lakhs, 7.67%) and Tata (1.36 lakhs, 4.14%). The total
mobile customer base became 32.86 lakhs.

36
 The Market Growth 2004‐2007…

• In the year 2006, BPL was taken over by Hutchison Essar and
the mobile services were branded as Hutch.
• In 2007, Hutch was taken over by Vodafone.
• The presence of multiple operators further boosted the
competition in mobile telecom market of Kerala.
• The BSNL continued at the top in market share till the year
2007. The market share of BSNL was 26.19% with 23.97 lakhs of
mobile connections as per the figures in August 2007.
• The Idea was at the second position with a market share of
22.21% and subscriber base of 20.33 lakhs.
• The total mobile customer base of Kerala enhanced to 91.53
lakhs.
37
Performance of Service Providers in Kerala (2007‐2013)
90

80

70

60

50
Subscribers in Lakhs

40
Airtel

30

20

10 MTS

Videocon
0
2007 2008 2009 2010 2011 2012 2013

Year Source: trai.gov.in

38
The Declining Trends of Landline Industry in Kerala

40

35
Landline Connections in Lakhs

TOTAL
BSNL
30

25

20

15

10

5
PRIVATE SECTOR
0
2006 2007 2008 2009 2010 2011 2012 2013
Year 2006 ‐ 2013

Source: trai.gov.in

39
 Marketing Strategies
“We don’t care. We don’t have to. We’re the phone company.”
Lily Tomlin
American Actress, 1976.

• The successful marketing strategies are formulated through the

right combination of services marketing mix, the seven Ps,
specifically product, price, place, promotion, people, physical
evidence and process.
• The product strategy, pricing strategy, distribution (place)
strategy, promotion strategy, people strategy, physical evidence
strategy and process strategy are widely utilised by the telecom
service providers to design, develop, differentiate and
implement their marketing strategies.
41
 Product Strategies

• The basic essentials of product in mobile telecom services are

its core functional benefits. The key functional benefits desired
by majority of the mobile telecom customers are voice clarity,
geographical network coverage and easiness to get connected
to the network.
• The frequent travellers outside the State consider roaming
facility and the internet savvy customers consider the easiness
in activation of internet services also as the core service
benefits.
• In third generation (3G) services along with these
characteristics, the core benefits also include easiness in
handset settings for mobile internet facility and speed of data
access. 42
 Product Strategies…
• The product is lifted to the augmented level with suitable customer support
and customer care activities and the maintenance of high level of quality of
service.
• The customer support activities related to the mobile telecom services are:
easiness to get a new mobile connection ‐ the SIM (Subscriber Identity
Module) card with friendly processes and procedures, availability of mobile
service recharge facility or recharge cards at convenient locations (for
prepaid customers), helpful assistance from retailers, and customer
convenient bill payment facilities (for post‐paid customers).
• The customer care activities are: easiness in activation of additional services,
easiness in deactivation of services availed as and when required, easiness
to access customer care helpline, easiness to get the right customer care
person on the phone to get the required support or information, and the
ability to solve problems at customer care.

43
 Product Strategies…
• The quality of service and brand value of telecom service providers are also
reflected in product related strategies.
• The five distinct dimensions of quality of service suggested by Parasuraman
A. et al. (1988) are tangibility, reliability, responsiveness, assurance and
empathy.
• The elements of tangibility are physical facilities, equipments, and
appearance of personnel.
• The reliability is concerned with ability to perform the promised service
dependably and accurately.
• The responsiveness is the willingness to help customers and to provide
prompt service.
• The assurance deals with the knowledge and courtesy of employees and
their ability to inspire trust and confidence in customers.
• The empathy is concerned with caring and individualized attention the firm
provides for its customers. 44
 Product Strategies…

• The features, benefits, quality, and the identity of the product are
emerged through the brand name. The corporate image of the
service provider is reflected in the brand value.
• The telecom service providers mainly segmented the customers
based on demographic profiles such as age, gender, locality (Urban
or Rural), educational levels, employment status and income.
• The core benefits’ requirements are different for different
segments, accordingly the companies positioning their products
for targeting the specific segments.
• The post‐paid customers are considered as premium category as
they are high paying group and very less in numbers
(approximately 3% of mobile customer base) as compared to
prepaid customers.
45
 Pricing Strategies

• The pricing strategy has direct impact on revenue and profit of

any organisation. Even though the pricing is simply the
exchange value of the product or service, the pricing strategies
depend on the objectives of pricing. The objectives of pricing
are different for different service providers. The objectives may
be to produce fair profit, profiteering, market growth, price
leadership or to enhance the image of the firm to attract more
customers or to strategically counter the competitors.
• In Kerala during mid‐2000s, with the presence of multiple
telecom operators, the competition in the mobile market
stepped up and price wars start. Pricing became the major
strategy of all telecom operators.
46
 Pricing Strategies

• Varieties of tariff plans are introduced by the telecom service

providers to attract customers of multiple segments. Special Tariff
Vouchers (STV) for voice, data and SMS allows customers to make
calls, SMS and access internet comparatively at low‐priced rates,
sometimes on unlimited manner. When one operator introduces
an STV, immediately others launched competitive versions.
• Xavier M. J. (2007) described copability (copying + ability) as a
marketing strategy in a turbulent environment. As the patent rules
and intellectual property rights are not applicable in copying a
strategy introduced by one telecom service providers by others,
copability became a widely utilised strategy among the telecom
service providers.

47
 Pricing Strategies

• In addition to STVs, top‐up recharge cards, electronic recharge

facility, credit recharge facility, validity extenders, separate and
combo tariff structures for voice, data and SMS were also
introduced in the market.
• Exclusive tariff plans are launched for closed user groups such as
friends, lovers, family, official groups, or business groups.
Customised special tariff packages for individuals were also
offered by certain telecom service providers.
• In India the customers are enjoying one of the lowest mobile
tariffs in the world. This is mainly due to the intense competition
in pricing among mobile telecom service providers.

48
 Distribution (Place) Strategies

• The distribution strategy is to provide effective place convenience

for the customers to avail products and services of the service
provider. It is related to the distribution pattern, channel
management, and retailer network of the telecom service
providers.
• The private sector providers mainly adopted intensive distribution
strategy, which involves the use of all possible outlets to distribute
the products and services.
• The public sector provider BSNL in the initial stages mainly
resorted to exclusive distribution strategy, in which the outlets
deal exclusively the BSNL products.

49
 Promotion Strategies
• The effectiveness of marketing mostly depends on promotion ‐ the
integrated marketing communication.
• The telecom companies use a mix of various promotional tools such
as: advertisements, sales promotion, direct selling, events,
experiences and public relations.
• The prominent among them are: promotional phone calls to the
customers, price reduction offers, extra talk time offers, SMS package
offers, internet package offers, free trial of newly introduced services,
free add‐on SIM card, facility to make calls even at zero balance on
credit basis for prepaid customers, extending continued services even
at non‐payment of bills due to delay or oversight for post‐paid
customers, displays and demonstrations at the point of sales, and
specialized pricing offers exclusively for individual customers.
50
 People Strategies

• The customer care personnel, maintenance staff, persons

representing the organisation, the customers, and other
customers in the service environment play vital roles in services
marketing.
• The private telecom service provider’s strategically manage the
people element primarily through outsourcing. The customer care
and call centre personnel are professionally trained employees
provided by external agencies. The telecom service providers
extend excellent backend support for the outsourced customer
touch points. They utilise the IT capabilities for extending service
to these touch points which in turn reflect in the customer service.

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 People Strategies…
• All human elements involved in service delivery or service assurance
influence the buyer’s perceptions.
• The private telecom companies have a limited number of experience centres
or relationship centres or customer care centres at main towns and cities.
These centres are managed by the franchisees.
• The service provider will dictate the terms to the franchisee with respect to
code of conduct, dress code, personal grooming, telephone etiquettes,
expected attitude and behaviour to be shown by the employees engaged by
the franchisees while interacting with customers.
• The franchisee also benefitted from these win‐win business relationships.
The franchisees hire employees with extreme dealing skills and impart them
sufficient knowledge along with adequate IT support to deal with customers.
• It is observed that the employees at customer support centres are
youngsters especially females.
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 People Strategies…

• The BSNL manages their customer contact points largely

through their own resources and employees.
• The general observation shows that the employees at customer
touch points lack soft skills and knowledge to deal with
customers as compared with the private sector providers. The IT
support is inadequate to deal with customers. The workforce is
also aged.
• The maintenance personnel of BSNL in landlines are highly
unprofessional in appearance, skill sets, knowledge level and
even at attitude and behaviour towards customers.
• The government employee attitude is predominant in BSNL.

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 Physical Evidence Strategies
• The physical evidence is the environment in which the service is delivered
and where the firm and customer interact, and any tangible components
that facilitate performance or communication of the service.
• The private telecom service providers are keen in proving their presence
through employee dresses, uniforms, brochures, tariff booklets, business
cards, and glow sign boards etc. The ever‐changing tariff is immediately
updated and made available to retailers and customers. Their physical
presence is evident even in the remote rural villages of Kerala.
• The BSNL mainly rely upon their customer care centre and telephone
exchange network for proving the physical presence. As part of creating the
tangibility, the telecom service providers seem to offer newly introduced
value added services to customers for free trail for a limited period. This is
followed by various sales promotion techniques to enthuse the customers to
become the subscribers of the services. The advertisements, hoardings,
events, and public relations also help building the physical evidence.
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 Process Strategies
• The actual procedures, mechanisms, and flow of activities by
which the service is delivered are termed as process.
• The private sector providers widely utilise the retailer network to
distribute their products and services. The process and procedures
to avail mobile connections and associated services from private
sector providers are very simple as compared to BSNL.
• Their retailers are motivated by trade schemes, incentives and
proper back end support to push their products.
• Even though the BSNL procedures and process have been
improved from the highly bureaucratic DoT era, it is still below the
competitors’ benchmarks.
• The single window concept is not yet a reality in BSNL especially
with respect to landline segment.
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 Review of Marketing Strategies of Telecom Service Providers

• The market pioneer strategy was adopted by the service providers

Escotel followed by BPL when they introduced mobile telecom services
in Kerala in the year 1996.
• They maintained the position as product innovators as the services were
new‐to‐the‐world products.
• Orville C. Walker Jr. et al. (2008) suggest three important strategic
marketing programs for pioneers. They are mass‐market penetration,
niche penetration and skimming. The skimming was the strategy adopted
by early mobile service providers in Kerala.
• The ego bolstering needs of upper ‐upper segment of Kerala were
stimulated by these telecom companies to market the services.
• The high end positioning of mobile services were continued till the entry
of the service providers Airtel and BSNL in the mobile telecom market of
Kerala during the later part of the year 2002.

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 Review of Marketing Strategies of Telecom Service Providers…

• The outgoing call charges were more than Rs 32/‐ per minute and
incoming call charges were Rs 16/‐ per minute. Gradually they reduced
the tariff. During 1998‐99 periods the effective call charges decreased to
Rs 16/‐ per minute. The mobile call charges further reduced to Rs
4/minute by March 2002.
• The market expansion was the growth market strategy adopted by BSNL.
They differentiated the product offering targeted to the needs of various
potential segments. The BSNL at their introductory stage itself
differentiated their mobile telecom service with maximum geographical
coverage and connectivity. In order to accelerate the market expansion
they also practiced penetration pricing strategy. The BSNL introduced
tariff plans with outgoing call charges as low as Re 1/‐ per minute. The
BSNL was the first mobile telecom operator in Kerala introduced tariff
plans with incoming calls free of charge. The BSNL became the market
leader in Kerala within three years.
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 Review of Marketing Strategies of Telecom Service Providers…

• Subsequently all mobile operators adopted market follower

strategy and mobile incoming calls became absolutely free. The
competition in the market gradually enhanced. The minimum
effective local call charges in cellular mobile services declined to
77 paise per minute by September 2003.
• The core product benefit of mobile telecom service, the
geographical network coverage was substantially improved in
Kerala due to the share‐growth strategies of the followers. The
focus of the telecom service providers gradually shifted from
the upper and the middle class to the common people of
Kerala.

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 Review of Marketing Strategies of Telecom Service Providers…

• In the growth stage of mobile telecom service in Kerala, the

service providers widely utilised the pull strategy to promote
their product and services.
• In a pull strategy the manufacturer uses advertising, promotion,
and other forms of communication to persuade consumers to
demand the product from intermediaries, inducing the
intermediaries to order it.
• The advertisement with celebrity endorsement is a strategy
followed by many companies to pull the customers. The choice
of the celebrity is critical. The celebrity should have high
recognition, high positive affect, and high appropriateness to
the product.

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 Review of Marketing Strategies of Telecom Service Providers…

• The BPL advertisements were endorsed by the popular

Malayalam cine artist Mohanlal. In the year 2006, BPL was
taken over by Hutchison Essar and the mobile services were
branded as Hutch. The advertisement strategy of Hutch had
given a positive edge for the promotion of their products than
other telecom service providers.
• The pug dog advertisement of Hutch with the caption “Where
ever you go our network follows” was so popular at that time.
Even after the takeover of Hutch by Vodafone in the year 2007,
the pug dog advertisement continued.

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 Review of Marketing Strategies of Telecom Service Providers…

• The celebrity endorsement advertisement strategy is also followed

by the Idea Cellular with the actor Abhishek Bachchan and Aircel
with the cricketer M. S. Dhoni. The Bharti Airtel, which used
several celebrities from Shah Rukh Khan to Kareena Kapoor to
Sachin Tendulkar to A. R. Rahman earlier, now features unknown
faces for its ‘Jo tera hai, wo mera hai...’ series. Tata Docomo had
endorsement deal with the actor Ranbir Kapoor. The Tata Indicom
and the Reliance promoted their services with Kajol and Hrithik
Roshan respectively. The BSNL formerly used celebrities Preity
Zinta, Deepika Padukone and Abhinav Bhindra in their
advertisements.
• The celebrity endorsement strategy was not adopted by the
service provider Vodafone.
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 Review of Marketing Strategies of Telecom Service Providers…

• In the growth stage of mobile telecom services industry in Kerala, the

telecom service providers were very keen in designing and publishing
advertisements in popular media. As part of the advertisement strategy the
telecom companies inserted catching captions and ad slogans in their
advertisements. The noticeable stuff among them are: Idea: ‘An Idea can
change your life’, Airtel: ‘Express Yourself’, BSNL: ‘Connecting India Faster’,
and MTS: ‘A step ahead’. Previously Vodafone was using ‘Wherever you go
Our network follows’ signifying the importance of network coverage the
service. Then they used the taglines ‘Power to you’ and ‘Make the most of
Now’ to describe the usefulness of various value added services. To show
the customer care effectiveness, Vodafone used another caption ‘Happy to
Help’. The lowest ever tariff of telecom services due to hyper competition in
the market and the trends of market saturation negatively reflected in the
revenue of the service providers. As part of reducing the operational
expenditure, recently the telecom companies put restrictions on their ad
campaigns. The advertisements became very rare for BSNL as compared to
the private sector providers.
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 Review of Marketing Strategies of Telecom Service Providers…

• The BSNL was the market leader till 2007. In the year 2008, the private
sector provider Idea through the frontal attack strategy captured the
major market share and became the market leader.
• The Idea implemented frontal attack strategy against BSNL by
differentiating its products and services accessible to all segments with
attractive pricing, advertisements and sale promotion techniques.
• In the year 2009 the service providers Tata Docomo, MTS, Aircel, and
Uninor and started mobile telecommunication services in Kerala. By the
year 2010 the service provider Videocon also entered in the mobile
telecom market of Kerala. The mobile network coverage of these
operators was limited only in cities and towns.
• They primarily adopted flanking and encirclement strategies and
sometimes guerrilla attack to compete with market giants such as Idea,
BSNL and Vodafone.

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 Review of Marketing Strategies of Telecom Service Providers…

• A flank attack is appropriate when the market can be broken into two or
more large segments, when the leader and or other major competitors hold
strong position in the primary segment, and when no existing brand fully
satisfies the needs of customers in at least one other segment.
• A challenger may be able to capture a significant share of the total market
segment by concentrating primarily on one large untapped segment. This
usually involves developing product features or services tailored to the
needs and preferences of the targeted customers, together with appropriate
promotional and pricing policies to quickly build selective demand.
• An encirclement strategy involves targeting several smaller untapped or
underdeveloped segments in the market simultaneously. The idea is to
surround the leader’s brand with a variety of offering aimed at several
peripheral segments. This strategy makes most sense when the market is
fragmented into many different applications segments or geographical
regions with somewhat unique needs or tastes.

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 Review of Marketing Strategies of Telecom Service Providers…

• When well‐ established competitors already cover all major segments of

the market and the challenger’s resources are relatively limited, flanking,
encirclement or all‐out frontal attacks may be impossible. In such cases,
the challenger may be reduced to making surprise raids against its more
established competitors called guerrilla attacks. The newly entered
operators concentrated mainly in urban and semi‐urban areas. Although
their mobile coverage was limited only in cities and towns, they
strategically positioned their mobile telecom services as the second
option for urban Keralites. They positively differentiated their services in
other elements of marketing mix especially in pricing and promotion.
Tata Docomo became the most successful among the new entrants with
these strategies. The Aircel initiated guerrilla attack with attractive 2G
internet economic packages for the segment of students and youth.

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 Review of Marketing Strategies of Telecom Service Providers…

• The late entrants attack the leading telecom service providers with loss
leader pricing strategy and explored the urban markets. In the loss leader
pricing an initial low price is charged in the hope of getting more
business at subsequently better prices. The risk associated with the
initial low price is that, it may become the price for all times to come.
They targeted the urban youth with attractive voice and data plans. The
availability of affordable dual SIM mobile phones in the market also
became great support for their strategy. The low pricing became
prevailed among these operators because they are also lacking the core
benefit issue of mobile telecom service, the sufficient mobile network
coverage. In practice the customers began to primarily utilize these
mobile connections in the available coverage areas. These telecom
service providers also focused the segment of non‐moving urban
customers.

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 Review of Marketing Strategies of Telecom Service Providers…

• In the year 2009 itself, when Tata DoCoMo first introduced pay
per second billing, it was an innovative pricing strategy in the
extremely competitive Indian telecom market. Immediately all
other operators became the followers of this strategy and also
started offering pay per second plans.
• In 2012 TRAI (Telecom Regulatory Authority of India) intervened
and ordered that there has to be at least one tariff plan each for
both post‐paid and pre‐paid subscribers with pay per second
pulse across all service providers so as to enable the subscribers
to compare the tariffs offered by different service providers.

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 Review of Marketing Strategies of Telecom Service Providers…

• The strategic attacks of new entrants’ further gravitate the competition

in the market. The market leaders resorted to position defense
strategies. The most basic defensive strategy is to continually strengthen
a strongly held current position‐ to build an impregnable fortress capable
of repelling attacks by current and or future competitors. This strategy is
nearly always the part of a leader’s share‐maintenance efforts. By
shoring up an already strong position, the firm can improve the
satisfaction of current customers while increasing the attractiveness of
its offering to new customers with needs and characteristics similar to
those of earlier adopters. The Idea is the most successful mobile telecom
service provider in Kerala with their position defense strategy. The Idea
consistently maintains their market leadership in mobile telecom
services for the last six years. The service providers BSNL and Vodafone
are also successful to an extent in position defense, and occupy the
second and third positions respectively in the market.
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 Review of Marketing Strategies of Telecom Service Providers…

• The prominent private sector telecom service providers

established distinctive channel management systems to deliver
their products and services. The Airtel distribution strategy was
proclaimed as match box strategy ‐ where ever match boxes are
available, Airtel mobile telecom products such as SIM (Subscriber
Identity Module) cards and recharge coupons are also invariably
available. This strategy was also adopted by almost all prominent
private players. The private telecom service providers ensure
maximum reach ‐ the availability of their products at almost all the
multi brand retail outlets of Kerala.
• Thus the private sector providers mainly adopted this intensive
distribution strategy, which involves the use of all possible outlets
to distribute their products and services.

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 Review of Marketing Strategies of Telecom Service Providers…

• At the same time every private service provider attempts to

enhance the extraction ‐ the percentage share of sales of their
products at each retailer outlet through push strategy. A push
strategy uses the manufacturer’s sales force, trade promotion
money, or other means to induce the intermediaries to carry,
promote, and sell the product to end users. This leads to launch of
very attractive trade schemes for the retailer network. The push of
the products of a particular service provider certainly depends on
the attractiveness of trade schemes and backend support
extended to the retailer network. This strategy makes prominent
private service providers’ products available at every nook and
corner of Kerala.

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 Review of Marketing Strategies of Telecom Service Providers…

• In the earlier stages the public sector provider BSNL adopted the
exclusive distribution strategy to distribute their products and services.
The exclusive distribution strategy means selling a company’s
products/brands in a market through the outlets that deals exclusively in
company’s products and do not sell any competing brands. These are
company’s authorised showrooms or outlets and the company has direct
control over price, promotion and inventory etc. of the product.
• In this strategy BSNL primarily utilised its own customer service centres,
telephones exchanges, and exclusive franchisees for the distribution of
products and services till the year 2008. The government legacy and
bureaucratic nature of BSNL customer care centres were incapable of
competing with distribution network of major private sector service
providers. Even though BSNL appointed franchisees for channel
management, the same were not effective as main private players’.
Eventually BSNL realised the situation and tried to build the retail
networks for intensive distribution. This attempt is being continued.
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 Review of Marketing Strategies of Telecom Service Providers…

• The landline telecom industry in Kerala has been declining since

the year 2007. As the part of profitable survivor strategy, the
landline service providers are trying value addition of landline
services by extending broadband internet facility to the landline
customers.
• The private landline service provider the Reliance has provided
the tariff options without rental component and offered it to
the customers with usage charges only, to get a competitive
advantage.
• Even though BSNL introduced prepaid tariff plans in landline
services it was not successful.

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 Review of Marketing Strategies of Telecom Service Providers…

• The discount pricing was the subsequent pricing strategy

adopted by BSNL in landline segment. They introduced landline
tariff plans with discounted annual rental basis. This helped
BSNL to ensure a committed period of at least one year from
plan opted landline customers.
• The private sector landline telecom service providers Reliance,
Tata and Airtel adopted the market development strategy by
exploring the opportunities in corporate segments. They
focused on urban business customers such as upcoming textile
showrooms, residential flats and other business establishments.

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 Review of Marketing Strategies of Telecom Service Providers…

• The prominent landline service provider BSNL experimented product

bundling of landline services with their mobile telecom services. In
this product bundling strategy, BSNL issued mobile connections free
of cost to all of their landline customers with mobile numbers
matched with the landline numbers. They promote the program
labelled as ‘Home SIM’ campaign. The customers are offered with
unlimited free calls between their landline and mobile connections.
This became a boost up for the landlines connections and helped
them to enhance the mobile customer base.
• The mobile telecom service providers also practiced the bundled offer
of mobile connection and handset. In order to attract the lower‐lower
segment, the MTS offered handset with mobile connection as low as
Rs 600/‐

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 Review of Marketing Strategies of Telecom Service Providers…

• The events and experiences put forth to the customers can be

used for enhancing the brand value and boosting the sales. The
public sector service provider BSNL repeatedly conducts the
events called BSNL melas. Special event pricing is the strategy
adopted by BSNL in these events. In the special event pricing
strategy sellers will establish special prices in certain occasions to
draw in more customers. These events help tangibilizing the
service offerings and provide the physical evidence for the
customers.
• The physical representation in services has a good promotional
appeal to customers. The physical evidence strategy of the service
providers Idea and Vodafone were proved through two well‐liked
Malayalam television programmes, ‘The Idea Star Singer' and ‘The
Vodafone Comedy Stars’.
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 Review of Marketing Strategies of Telecom Service Providers…

• The mobile telecom service provider Idea has been sponsoring the
Idea Star Singer programme in the television channel Asianet since
2006. It is a popular Malayalam music reality‐television
competition, broadcast regularly from Monday to Friday. The
program aims to discover the young promising music talents in
Kerala and the winner is determined by the viewers and panel of
judges based on the contestant’s skill in singing. This television
programme has enhanced the brand image of Idea among the
domestic viewers.
• The Vodafone Comedy Stars was a popular Malayalam reality‐
television competition, broadcast regularly by the channel Asianet
and was sponsored by Vodafone. This programme helped
Vodafone in their brand building.

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 Review of Marketing Strategies of Telecom Service Providers…

• Divestment is a strategy aimed at leaving markets or segments

of low attractiveness or segments where the firm does not have
the capacity to acquire or sustain a competitive advantage.

• The private sector service providers Videocon and Uninor have

already implemented the divestment strategy and withdrew
from the telecom services market of Kerala and the service
provider Aircel is at the verge of this strategy implementation.

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 Review of Marketing Strategies of Telecom Service Providers…

• The primary focus of marketing strategies of telecom service

providers is to seek competitive advantage and synergy through a
well‐integrated program of services marketing mix elements (the 7
Ps of product, price, place, promotion, people, physical evidence
and process) tailored to the needs and wants of potential
customers in that target market. The differentiation is the
powerful theme in developing marketing strategies. As Michel
Porter points out, “A company can outperform its rivals only if it
can establish a difference that it can preserve. It must deliver
greater value to customers or create comparable value at lower
cost or both”.
• It is clear that the different strategies adopted by BSNL and private
sector service providers have different dimensions of impact in
their marketing process.
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