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A REPORT ON

A Study of Buying and Usage Behavior

of Mobile Service Providers

by

ARPITKUMAR M. MANKAR

Under the Guidance of

Prof. DILIP JOSHI

INSTITUTE OF MANAGEMENT AND COMPUTER

STUDIES, THANE

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A REPORT ON

A Study of Buying and Usage Behavior of Mobile Service

Providers

Submitted By

ARPITKUMAR M. MANKAR

(MS0809073)

Under the Guidance of:

Prof. DILIP JOSHI

A Project Report submitted in partial fulfillment of the requirements of

THE MMS PROGRAM (Class of 2009)

INSTITUTE OF MANAGEMENT AND COMPUTER STUDIES, THANE

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CERTIFICATE

This is to certify that Mr. ARPITKUMAR MANKAR is a bonafide student

of Master of Management Studies (MMS) program of this institute for the

academic year 2009-2010

He has successfully completed the project work towards partial fulfillment

of Master of Management Studies (MMS) degree course on the topic

A Study of Buying and Usage Behavior of Mobile Service Providers

_________________ _________________ _________________

Signature Signature Signature

(Internal Guide) (External Examiner) (Director)

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DECLARATION

I do hereby declare that the project entitled “A STUDY OF BUYING AND USAGE

BEHAVIOR OF MOBILE SERVICE PROVIDERS” has been prepared and

submitted as a part of the curriculum for the degree of Master in Management

Studies (MMS), ASM’s Institute of Management and Computer Studies, Thane.

I also declare that the dissertation is the result of my effort and has not been

submitted to any other organization or university.

ARPITKUMAR MANKAR

MMS II (MARKETING)

(MS0809073)

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Contents CHAPRTER 1: INTRODUCTION ............................................................................... 10

1.1 Introduction ............................................................................................................. 10

1.2 Background ............................................................................................................. 12

1.3 Objectives of Study ................................................................................................. 12

1.4 Rationale behind the study ...................................................................................... 13

1.5 Scope of Study ........................................................................................................ 13

CHAPTER 2: LITERATURE REVIEW...................................................................... 15

CHAPTER 3: RESEARCH METHODOLOGY ......................................................... 17

3.1 Research Design: .................................................................................................... 17

3.2 Sampling Procedure: ............................................................................................... 17

3.3 Data Collection: ...................................................................................................... 18

3.4 Questionnaire Design .............................................................................................. 18

3.5 Limitations .............................................................................................................. 19

CHAPTER 4: RESEARCH FINDINGS ....................................................................... 20

CHAPTER 5: RECOMMENDATIONS ....................................................................... 34

CHAPTER 6: CONCLUSION....................................................................................... 36

References ......................................................................................................................... 37

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ACKNOWLEDGEMENT

The study carries impression of many who helped in making this project a success, who

helped me by giving valuable feedback and suggestions from time to time.

I would like to thank Prof. Dilip Joshi for his valuable guidance at every step during

preparation of this project through valuable support and feedback whenever needed.

I would also like to thank the library staff of Institute of Management and Computer

Studies, for their help and cooperation they have provided with various books, magazines

and journals while preparing this report.

Finally, I would like to thank all friends and other teaching and non-teaching staff of

Institute of Management and Computer Studies, for their emotional and other support

they gave from start to end of my project.

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Lists of figures and illustrations:

Fig. 1: Bar graph of ‘Top-of-Mind’ share for customers of mobile service providers

Fig. 2: Buying Behavior of consumer of mobile service provider

Fig. 3: Parameters rated 1 to 5 (1 being lessat important adn 5 being most important) while buying a sim card

Fig. 4: Amount of money spend per month on mobile recharge

Fig. 5: Time spend talking per day on mobile phone

Fig. 6: Individual preference for a call

Fig. 7: Time preference of an outgoing call on weekly basis

Fig. 8: Topic/ subject of discussion

Fig. 9: Various parameters on which duration of call depends

Fig. 10: Subject of SMS sent on weekly basis

Fig. 11: Individuals to whom SMSs are send in a week

Fig. 12: Graph showing number of individuals having GPRS enabled phones

Fig. 13: Graph showing number of customer using GPRS in GPRS enabled phone

Fig. 14: Graph showing amount of data downloaded per week in MB

Fig. 15: Purpose of using GPRS

Fig. 16: Plans used for GPRS by consumers

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Abbrivations and keywords

MoU: Minutes Usage

ARPU: Average Revenue per User

VAS: Value added Services

CDMA: Code Device Multiple Access

GSM: Global System for mobile communication

Mobile Service Providers, SMSs, GPRS, call rates,

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Abstract

The telecom industry is one of the fastest growing industries in India. India has

nearly 400 million telephone lines making it the second largest network in the world after

China, with a growth rate of 40%, Indian telecom industry has the highest growth rate in

the world. Opening up of international and domestic long distance telephony services are

growth drivers in the industry. Cellular operators now get substantial revenue from these

services, and compensate them for reduction in tariffs on air time, which along with

rental was the main source of revenue. The reduction in tariffs for airtime, national long

distance, international long distance, and handset prices has driven demand.

The research done is exploratory type. There are various factors on which

consumers use their mobile service providers. These factors have been studied through

various cities and various consumers through questionnaires. These questionnaires were

sent through e-mails. Analysis of data was done through graphs and charts. Different

factors, their importance and growth area in each sectors was found out in this research

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CHAPRTER 1: INTRODUCTION

1.1 Introduction

Over the past few years, the Indian mobile market has recorded an exponential

growth that has exceeded the expert’s expectations. The Indian mobile subscriber base

grew by approximately 48.5% in 2008 (http://wirelessfederation.com/news/14151-india-

welcomes-2009-with3469mn-mobile-subscribers). The low call rates, affordable mobile

handsets, and the changing socioeconomic status of the customers along with the

regulatory reforms have resulted in the Indian mobile sector to expand from around 10

million subscribers in 2002 to reach 370 million by 2008

(http://www.theindusview.com/Telecom.html).

The GSM players constitute 75% of the total market with Bharti-Airtel, BSNL,

Vodafone, and Idea being the major players. The Code Division Multiple Access

(CDMA) players such as Reliance and Tata Indicom have maintained a reasonably stable

market share of 25% over the past few years (Business Standard, April 2009). Bharti-

Airtel is the market leader with about 23.2% market share and has recently crossed 100

million subscription base (Hindustan Times, June 05, 2009). According to a report by the

global consulting and research firm, Gartner Inc., the Indian mobile service is expected to

grow at a compounded annual rate of 18%, exceeding 700 million subscription base by

2012 (Business Standard, July 02, 2008)

Market is estimated at $26 bn with the mobile penetration to increase by 38% by

2011 (www.reuters.com). The rural penetration would reach 58% in 2011 up from an

abysmal 2% in 2006. The prepaid services would be an important driver for this

exponential growth and would account for 93% of the total subscribers. The bulk of the

market being voice services, the data services could make up as much as 30% with the

Average Revenue Per User (ARPU) falling to $59.5 from $82 by 2011 (The Financial

Express, July 19, 2007).

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The average revenue per user (ARPU) for GSM service providers has declined by

12.4 per cent to Rs 144 in quarter ending December, 2009 from Rs 164 in the September

quarter. ARPU for CDMA players declined by 7 per cent to Rs 82 in quarter ended

December, 2009 from Rs 89 in quarter ended September, according to figures released by

telecom regulator TRAI.

Minutes of Usage (MoU) per subscriber for GSM mobile services declined by

2.82 per cent, from 423 in September quarter to 411 in December quarter, 2009.

However, there was an increase in MoU per subscriber for CDMA mobile services of 3.2

per cent from 308 in September quarter to 318 in December quarter, 2009.

The number of telephone subscribers in India increased from 509.03 million at the

end of September 2009 to 562.16 million at the end of December, 2009, registering a

growth of 10.4 per cent. The overall teledensity in India has reached 47.88 as on

December 31, 2009. (Business Standard, April 07, 2010)

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1.2 Background

India is competing for global leadership, and within a few decades the effort will

become reality. Indian technological developments have largely been insulated from

episode of global technological inconsistencies, and over the year, India has built

resilience to shocks and now less vulnerable to output volatility. Technological level and

education standard are steadily growing, and almost all the state governments and central

government are heading toward a breakthrough in the field of communication

technology. This will make the way for advanced consumer satisfaction in all the fields.

There is an increase convergence in perception, institutional structure, choice of

instrument and communication strategy in telecom policy making. The government’s

dream of providing ‘urban service to rural areas’ will come true only if certain hindrances

are removed. This study is done during the month of February and March in various

urban cities across India to understand the consumer buying and usage behavior for

mobile service providers and problem they are facing. In depth study was undertaken to

analyze preference pattern, problem of cellular phone services.

1.3 Objectives of Study

• to understand various factors that are affecting the buying pattern of consumer of mobile service provider

• to understand the usage behavior of consumer of various mobile services provided by mobile service providers

• to understand various growth drivers that can be used by mobile service providers for growth of the company

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1.4 Rationale behind the study

In this competitive world each and every organization needs to be best in their

competitive area. Everyone utilize their all available resources which they are having.

The creativity factor is considered important in any advertising agency.

It is not enough to simply state a firm’s goal as maximizing the present value of

total profit since this does not differentiate it from other firms and says nothing

about how this objective is to be achieved. Instead, a business and marketing plan should

suggest how the firm can best put its unique resources to use to maximize stockholder

value. The company needs to give value to their products and services. This is done

through use of advertising agency.

Hence this study is done to know how various growth factors in mobile service

industry that will help the organizations to maximize their service usage and create a need

of their product and services in the mind of the customers. This is done by knowing the

type of consumer the company is working on and what is their present condition and

competitive environment in the market. Through questionnaire various factors are

considered and the usage and buying pattern of consumer will be projected.

1.5 Scope of Study

The study can help to know various factors that affect mobile service providing industry.

It also tells about various aspects that should be considered while preparing a marketing

plan. The research done in this study only relates to consumer perspective of the services

and hence no study is done with respect to service provider’s viewpoint. A related study

can be done for studying perception gap between mobile service provider and their

customers which could help to serve customer better.

Despite the significant advances in technology and mobile industrial research,

little is known regarding the impact of various factors and their outcomes under different

market conditions. Different market forces may jointly affect the market and outcome

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relationship. Two market factors of particular interest to mobile service providers and

researchers are market dynamism and competitive intensity, which have received

heightened attention in recent research of firm performance because of accelerated

technology development and globalization of markets (Cui, Griffith, and Cavusgil 2005).

For mobile service providing industry, market dynamism and competitive intensity

constitute both market opportunities and challenges, and they are likely to moderate the

impact of same. The study can also help in understanding various market factors which

can affect growth of mobile industry. These can be market dynamics, competency,

technology etc.

The purpose of this study is to understand various factors that are affecting buying and

usage behavior of mobile service providers consumers. Thus, more studies can help in

examining the relationships of industry expectation on total market at different levels of

market dynamism and competitive intensity. Specifically, it can help in examining both

the linear and nonlinear relationships between the two and the outcomes of same.

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CHAPTER 2: LITERATURE REVIEW

Debnath (2008) explains that the prime focus of the service providers is to create

a loyal customer base by benchmarking their performances and retaining existing

customers in order to benefit from their loyalty. With the commencement of the

economic liberalization in 1991, and with a view to expand and improve telecom

infrastructure through the participation of the private sector, the Government of India

permitted foreign companies holding 51 percent equity stake in joint ventures to

manufacture telecom equipment in India. The Indian Government has announced a new

policy, which allows private firms to provide basic telephone services. There had been a

monopoly of the state-owned department of telecommunications. However, several

companies are expected to benefit from the policy change.

Jha (2008), in his study analyzed that it is the youth which is the real growth

driver of the telecom industry in India. Considering this fact, the paper is an attempt to

give a snapshot of how frequently young people use their mobile phones for several\

embodied functions of the cell phones. Data was collected from a sample of 208 mobile

phone owners, aged between 20 and 29. The study sheds light on how gender, monthly

voucher amount and years of owning mobile phones influence the usage pattern of this

device. Findings of the study would be helpful for the telecom service providers and

handset manufacturers to formulate a marketing strategy for different market segments.

Kalavani (2006) in their study analyzed that majority of the respondents have

given favorable opinion towards the services but some problems exist that deserve the

attention of the service providers. They need to bridge the gap between the services

promised and services offered. The overall customers’ attitude towards cell phone

services is that they are satisfied with the existing services but still they want more

services to be provided.

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Chris (2003) has analyzed ‘Telecom advertising in print media.’ This research

attempted to investigate why Telecom theme are used in advertisement, and the motives

that lead companies and advertisers to use sport celebrities and sport concept in

advertisements. From study it has been revealed that the appearance of sport celebrities in

advertising endorsement occurred more often in Telecom magazines than in other

magazines, because their target group is more acquainted with athletes. The sport

celebrities that dominated each printed media are related with their target group

characteristics.

Kalpana and Chinnadurai (2006) in their study titled “Promotional Strategies of

Cellular Services: A Customer Perspective” analyzed that the increasing competition and

changing taste and preferences of the customer’s all over the world are forcing companies

to change their targeting strategies. The study revealed the customer attitude and their

satisfaction towards the cellular services in Coimbatore city. It was found that

advertisement play a dominant role in influencing the customers but most of the

customers are of opinion that promotional strategies of cellular companies are more sale

oriented rather than customer oriented.

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CHAPTER 3: RESEARCH METHODOLOGY

3.1 Research Design:

Exploratory research design is used in this study. The main purpose of the study is

formulating a problem for more precise investigation. The major emphasis in this study is

discovery of ideas and insights. This research design enables more flexibility in research

and study various aspect of problems under study.

The surveys of various literatures were done to understand various aspects related

to factors affecting the mobile service providers industry. This included survey of various

journals having Indian background and various texts related to advertising and creativity.

Articles from newspapers and magazines were also studies to understand the dynamics of

the mobile service providers market.

3.2 Sampling Procedure:

A sample design is a definite plan determined before any data are actually

collected for obtaining a sample from a given population. (Kothari, 2004) Probability

sampling, also known as random sampling or chance sampling was used for selection of

various samples. In this it ensures the law of Statistical Regularity which states that if on

an average the sample chosen is random one, the sample will have same composition and

characteristics as that of universe. The sample chosen were from metro cities and few

Tire-1 cities of India. These cities were New Delhi, Mumbai, Pune, Bengaluru, Raipur

and Nagpur.

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3.3 Data Collection:

a. Primary data: Simple random sampling was done to get the responses from the

samples. The data was collected through questionnaire. The questionnaire was

send through e-mails to all respondents. The questionnaire was in structured

format wherein there is definite, concrete and pre-determined questions. The

questions were presented with exactly same wording and in the same order to all

respondents.

b. Secondary data: Secondary data are data that are already available. Following

published data were used for getting secondary data:

a. Technical and Trade Journals

b. Magazines and newspaper

c. Reports and publications of various associations connected to mobile

service providers industry

d. Reports prepared by research scholars and universities etc.

3.4 Questionnaire Design

Understanding consumer perceptions, needs and usage of mobile service

providers was the main aim of the questionnaire. Designing a questionnaire for the same

is not as easy as it looks at first sight (Beri, 2003). Primary data has to be extremely

careful in deciding what information is to be collected, questions to be formulated and the

sequence of the questions.

Combinations of open and close ended questionnaire were used. Open ended

questions were used for knowing various needs, preferences and choices for various

parameters of mobile service providers etc.

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Close ended questions were used to know other aspects which were related to

mobile parameters and their ratings. Ratings were done to know the importance of

various factors that are affecting the mobile service providing industry. Questionnaires

were in structured format and were sent through e-mails.

3.5 Limitations

All the studies have limitations. First, this study was conducted for only few

major cities in India. The lifestyle and living cost of each of these cities differ in itself.

Also individuals differ from each other. The study was mostly concentrated on urban

lifestyle and rural usage was not studied in this study. It has been seen that most of the

rural market is been developing day by day. Because of low cost per call and SMSs

eventually, mobile service market is been concentrating more on rural market today.

This study only deals with the usage of mobile service providers in urban areas.

Studies can be done to know the rural market and the usage of same in these areas. There

can be wide difference in buying and usage pattern of both these studies.

Moreover only people from age group from 20-40 was selected for study. Both

the age group, below 20 years and above 40 years, did not respond to the questionnaire.

Therefore it cannot be said that the results from the study is also applicable for all age

groups. Since the lifestyle, work culture and peers and groups of both age group differ

completely from age group of 20-40, results may vary for these both age group.

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CHAPTER 4: RESEARCH FINDINGS

The responses of the questionnaire from the customers are been described through

graphical representation below. The responses state the buying and usage behavior of the

customers on more or less large scale.

Q1. Listing the name of mobile service providers customers know

Fig. 1: Bar graph of ‘Top-of-Mind’ share for customers of mobile service providers

Question of listing the names of mobile service providers, that a customer, know

was done to know the ‘top-of-mind’ share of various service providers among customers.

From the responses given, it can be seen that Vodafone and Airtel has close competition

for top of mind share amongst customers. Both these brands are well know and are in

close competition with each other.

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A number of new mobile players have entered the market over the past year

offering low tariffs forcing incumbent players to join the price war. Bharti Airtel's market

share declined from 24.7 per cent to 22.7 per cent during the period even as its share of

net additions fell from 25.9 per cent in 2008 to 15.9 per cent. (The Hindu, January 22,

2010)

Q2. Statement which describes consumer while buying a mobile sim

Fig. 2: Buying Behavior of consumer of mobile service provider

Bar 1: Consumers gather information from net and then decide the service provider.

Bar 2: Consumers buying depends on sim their family/ friends / relatives use.

Bar 3: Consumers discuss with colleagues, friends and family before buying a sim. Bar 4: Consumer know enough to make their own decision about service providers Bar 5: Consumers know about every service providers, their offers and what they are buying

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Most of the consumers before buying a mobile sim, likes to discuss with friends and

family and then choose a mobile service providers. Also customers are themselves aware

enough to make their own decisions. Other than consulting friends and family members,

most people are either aware of various service providers, their offers etc. or like to find

themselves through sources like internet.

This decision made is however not so quick because of two reasons:

a. Customers don’t like to change their service provider once they start a service

b. Instead of low investment initially, they like to think on other parameters such as

services, offers, coverage strength etc.

Q3. Importance of various parameters while buying a sim card

Fig. 3: Parameters rated 1 to 5 (1 being lessat important adn 5 being most important) while buying a sim card

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It can be seen from the graph that the most important factor customers considers

while buying a mobile sim card is the local call rates (77%). On the other hand, no

respondent considers advertisements or roaming charges as important factor while buying

a sim card.

On the other hand, advertisements are rated as least important factor considered

while buying a mobile sim card (40%). The other important factors which are considered

very important for buying a sim card are coverage area (50%) and local SMS rates (39%).

Similarly local SMS rates and coverage area are the other two important factor to be

considered by respondents (37%).

Q4. What amount of money is spending on mobile recharge per month?

Fig. 4: Amount of money spend per month on mobile recharge

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Q5. Time spend per hour talking on mobile phone

Fig. 5: Time spend talking per day on mobile phone

Q6. Rating on the basis of number of calls made to different individuals on weekly basis.

Fig. 6: Individual preference for a call

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The graph states that most of the people (48%) make calls to their best friends or

loved ones on daily basis. Other customers (34%) makes call to their friend on same

basis. The rest 28% of customers like to call their parents or brother and sister on daily

basis. Similarly about 19% of people makes call to their brother or sister rarely.

Often call are made to friends, colleague and parents (70%). There is not clear

variation between individuals to whom calls are been made rarely and to whom calls are

been made often. This differs from person to person and also on various other factors.

Q7. Rating for time preference for a call made by individuals on weekly basis

Fig. 7: Time preference of an outgoing call on weekly basis

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The graph shows the time preference for a call made by customers on weekly

basis. It is seen that most of the calls are done from 7pm to 11pm (58%). On the other

hand there are very rare calls done from 1 am to 9am (80%). On an average most people

like to make a call from 9am to 7pm.

Q8. Topic or Subject of discussion for a call

Fig. 8: Topic/ subject of discussion

The topic of discussion is very vast and ranges on wide basis for making a call.

This can range from general inquiry to personal issues (Tecor and Jha, 2008). Mostly

people talk on general issues (30%). Other reason why customers make a call is to ask

information, to ask about their friends and loved ones. On the other hand there are equal

numbers of people who talks very often and who rarely talk about best friends and loved

ones (22%).

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From the graph it can be concluded that there is no specific topic which a person

wants to discuss with other person. It can be seen that there are almost equal number of

responses (18-21 respondents) who likes to talk very often on information, news and/or

about loved ones and friends.

Also when one makes a calls, there are no fixed topics for calls and a call may be mixture

of various topics on different range depending on duration of call (Tecor and Jha, 2008)

Q9. Various parameters on which duration of call depends

Fig. 9: Various parameters on which duration of call depends

From the graph it can be seen that mostly it’s the person, individual who is talking

to, on whom duration of call depends. It can be seen that 65% people state that their

duration of call depends on individual to whom they are talking.

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Also, 39% of people state that their duration of call rarely depends on service

provider and their call charges. Other two factors which determine the duration of call are

work they are involved in and time of call.

Q10. Subject of SMS

Fig. 10: Subject of SMS sent on weekly basis

The SMSs send vary and are here classified into four major categories viz:

inquiry, greetings, entertainment and information.

Most people like to make inquiry about individual through SMS (40%). These are

questions which involve where, how, what and why about recipient of SMS. Other

important subject of sending SMSs are entertainment like seasons, days and celebration,

jokes questions etc. This constitute of about 38%. Equal numbers (30%) of people ask

about information like news, update, questions etc. on average basis on SMS.

There are only 19% people who ask information on very rarely basis and prefer to

make a call instead of SMS.

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Q11. Individuals to whom SMSs are send

Fig. 11: Individuals to whom SMSs are send in a week

From the graph it can be seen that most of the SMSs are sent to best friends and

loved ones and friends (51% each). These SMSs vary in subject from general information

to greeting and entertainment.

There were no individuals who sent SMSs on often basis to their parents. On the

other hand SMSs sent to parents are on very rare basis (84%). On average most people

send SMSs to colleagues (47%) constituting of information and questions about work or

greetings SMSs. Also on very rare basis or on sometimes basis SMSs are sent to brothers

and sisters (64%).

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Q12. Is the phone used GPRS enabled?

Fig. 12: Graph showing number of individuals having GPRS enabled phones

Q13. Do customers use GPRS in GPRS enabled phone?

Fig. 13: Graph showing number of customer using GPRS in GPRS enabled phone

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Q14. Amount of data downloaded per week

Fig. 14: Graph showing amount of data downloaded per week in MB

It can be seen from the graph that there are almost 57% people download less than

9 MB per week data per week. This contradicts the statements and usage pattern

predicted by mobile service providers after introduction of GPRS enabled phones in

Indian market which states that the mobile service providers are expecting the usage of

net to increase on mobile and will prove to be major competitor to internet service

providers (Chris, 2003). There are very less people who download data more than 20

MB per week (18%).

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Q15. Purpose of using GPRS

Fig. 15: Purpose of using GPRS

It can be seen that mostly people use GPRS for checking mails and for chatting

(30%). Also it is closely followed by surfing internet for fun and getting news and

updates from various sectors.

Also it can be seen that there are many people who don’t prefer GPRS for

downloading files from internet. Only 10% people use it on frequent basis and 44%

people rarely download file from internet.

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Q16. Plans of GPRS used

Fig. 16: Plans used for GPRS by consumers

It can be seen that 52% of people use unlimited download plans for using GPRS. Other

48% use plans which are based on amount of data downloaded from the internet.

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CHAPTER 5: RECOMMENDATIONS

There are various factors that are affecting usage of mobile service provider. The

study done was conducted in few urban cities and in age group of 20-40. Indian mobile

service industry sees growth in the Minutes of Usage (MoU) in teen and mid twenties

(Indian mobile services market to exceed $25 bn, The Financial Express, July 19, 2007.)

Overall growth of industry depends on various drivers that combines together and gives

the end results. The recommendation given below includes some of the factors that are

major contributors that affect mobile service providing industry.

• Separate plans should be made for people who are using mobile in more than one

state. In other words various plans for roaming should be developed to encourage

the same

• It can be seen that advertisements made does not influence the buying behavior of

the consumer. Mobile service providers are concentrating on making brand in the

market. This can be seen from the ‘top-of-mind’ shares which constitute two

major brands - Vodafone and Airtel. Mobile service providers should also

concentrate on making advertisements which can encourage to buy sim along

with creating brand name in the market.

• Minutes of Usage (MoU) per subscriber for GSM mobile services declined by

2.82 per cent, from 423 in September quarter to 411 in December quarter, 2009.

However, there was an increase in MoU per subscriber for CDMA mobile

services of 3.2 per cent from 308 in September quarter to 318 in December

quarter, 2009 (Business Standards, April 07, 2010).

• Thus it can been that there is low spending on mobile recharge, which does not

depend on other parameters. More efforts should be taken to increase Minutes of

Usage (MoU) to increase the Average Revenue per Usage (ARPU).

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• It can be seen that calls and SMSs are rarely been made for family and relatives.

Selected schemes can be structured to encourage calls for parents, brothers and

sisters and other relatives. Also it can be seen that duration of calls mostly

depends on person to whom individual is talking.

• Most of the calls are made from 6pm to 11pm. The calls done from 1am to

morning 7am are done in very rare cases. There are various schemes available like

low call rates, free night calling etc given by various service providers. But people

don’t call at these times. More efforts should be done to take measures for

increasing Minutes of Usage (MoU) during these time slots.

• Almost 60% of people use GPRS enabled phones but are not using GPRS or use

in very rare cases. The net downloads per week are less than 9 MB. This may be

due to monthly charges or speed or both. Measures should be taken to increase the

internet usage on mobile.

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CHAPTER 6: CONCLUSION

India has one of the lowest mobile phone tariffs in the world resulting in low

Average Revenue Per User (ARPU). The problem is that despite the average use of

mobile phones being the highest at 287 minutes a month, India has an average rate per

user (ARPU) of around $8 compared to global average ARPU of $ 21. There was a

decline of 7.4% in ARPU in 2005 since 2004. The ARPU would continue to drop by

about 5% while tariffs will decrease further by 15%. (Businessworld magazine, Industry

News, October 2008)

Indian market lacks behind in terms of Per minute Cellular tariffs (2.5 cents per

minutes) as compared to other countries such as China (3.5), Nepal (8.4) and Maldives

(14.4). On the other hand there is growth of 16% in the mobile service provider industry

(Telecomm Regulatory of India).

There are very few Value Added Services (VAS) which consumers use other than SMSs

or GPRS. These services include mobile music, mobile video and animations, mobile

contest and voting, mobile gaming, mobile alerts etc. These services and again their isafe

can differ from place to place and from person to person. Appropriate measures such an

sub-segmentation on the demographic and geographical basis can make a mobile service

provider company to penetrate more in market and thus can help to make strategic and

profitable decisions.

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References 1. India welcomes 2009 with 346.9 million mobile subscribers,

http://wirelessfederation.com/ news/14151-india-welcomes-2009-with-3469mn-

mobile-subscribers

2. http://www.theindusview.com/Telecom.html

3. Highest ever GSM additions in March, Business Standard, April 14, 2009.

4. Airtel crosses 100 million mark, Hindustan Times, June 05, 2009.

5. Gartner Predicts Indian Cellular Services Market to Surpass $37 bn by 2012,

Business Standard, July 02, 2008

6. Gartner sees rapid growth in Indian mobile market, www.reuters.com, July 18,

2007.

7. Indian mobile services market to exceed $25 bn, The Financial Express, July 19,

2007.

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