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A Project Report On


In Partial fulfillment of the requirements for M.B.A. Program In

V. M. Patel Institute of Management Ganapat Vidyanagar, KhervaSubmitted by: Shikha Agarwal-02 Darshana Barot-03 Vaishali Rathod-49 Sejal Tandel-56


PrefaceIn the changing scenario, service sector is a major contributor GDP, and also is a major service provider in our country. Our report revolves around one of the service providers known as cellular operators, which is part of telecom industry. It is a growing new wave of business, which has started attracting a lot of government attention, foreign direct investment private players. We have tried to study the cellular sector from various aspects, which directly or indirectly have an impact on it. We were dependent on Internet and print media to collect information. the telecom sector as a whole is very dynamic, so figures keep changing every fortnight and because of that we had to use slight old data for analyzing the sector. This report shows the telecom industry, various organizations that are part of the industry, and highlights the cellular sector from marketing as well as financial perspectives. This report enlightens the reader about the sector in a phase manner and ultimately ends with a conclusion that this industry is the key to generate prospering economies in India.


Acknowledgement. Teamwork is the key to success in any project. In the same way, to make this project report successful, number of persons deserves their rightful credit. We would like to thank our north Gujarat University, for giving us this opportunity that has really enlightened our vision. Our sincere thanks to shri surya mukherjee (director) without whom this report would not have seen the light at the end of the day. Also we are grateful to all our faculties especially miss Priyanka Pathak, and shri Prashant Sharma for their valuable guidance. Last but not the least we are grateful to our librarian shri deepakbhai for his constant support all throughout the process of reportmaking. Shikha Agarwal Darshna Barot Vaishali Rathod Sejal Tandel


Executive SummaryOur report on telecom industry especially, the cellular sector is a collection and analysis of the various sides of the cellular sector. It is segmented into four parts, starting from background and ending at the profiles of prominent players in the industry. This report initially focuses on the birth of cellular services, their background, and various govt. organizations playing a vital part on the sector and their implications. The second phase is a window to the technology that shows a glimpse of the high tech age in which this service is operating. Now in the third phase the focus is on marketing aspects, the key players, number of cellular subscribers, competitors, their analysis via porters model, and by swot. The last phase concentrates on financial parameters about the industry as well as some companies. Thus, overall, this study encompasses, the cellular sectors surrounding enviourment along with characteristics pertaining to the inside of the industry. It becomes clearly visible after carrying out this research that the cellular sector is growth oriented, focused, techno-savvy, and prospering in the mixed economy of our nation in a very rapid manner.


ContentsPART-I INTRODUCTION Chapters: 1. Introduction: Indian Cellular Industry 2. Background 3. Chronology of Indian Cellular Industry 4. Contribution of The Cellular Industry to The Indian Economy PART-II TECHNOLOGICAL OVERVIEW OF CELLULAR INDUSTRY Chapters: 1. Introduction to Cellular Technology 2. GSM Technology 3. WAP Technology 4. Roaming PART-III CELLULAR INDUSTRY FROM MARKETING PERSPECTIVE Chapters: 1. The Mobile Customer 2. Performance of Cellular Industry in 2003 3. Porters Five Force Model 4. SWOT Analysis PART-IV CELLULAR INDUSTRY FROM FINANCIAL PERSPECTIVE Chapters: 1. Investment Pattern and FDI inflow 2. Impact of Budget on Cellular Sector 3. Performance Analysis of Bharti 4. Performance Analysis of BSNL 5 6 7 18 47 49 50 55 56 57 58 59 66 87 90 93 94 96 98 103 108 109




INTRODUCTION Chapters:1. Introduction: Indian Cellular Industry 2. Background 3. History of Indian Cellular Industry 4. Chronology of Indian Cellular Industry 6. Contribution of The Cellular Industry to The Indian Economy


Chapter 1:

Introduction: Indian Cellular Industry

Cellular industry is one of the fastest growing services industries in the country and world as well. The cellular market in India continues to grow at an annual reat of 75%. A number of stumbling blocks have fallen and many more are expected to come tumbling down soon. According to the Gartner Report, the Indian telecom services market will touch Rs. 700 billion by 2006. Private operators have made mobile telephony the fastest growing (over 100% p.a.) in India. Now they are venturing into more traditional areas such as long distance and international fixed line calling. Three main private groups Bharti, Tata and Reliance are braving the hazards of competing with the private sector incumbents. This is boom time for the consumers, who have been paying among the worlds highest tariffs so far. The Indian government has merged the IT and Telecom Ministries to speed up reform and has tabled the Communication Convergence Bill in the Parliament to enable the common regulation of the Internet, broadcasting and telecom. An independent regulatory body and dispute settlement body is fully functional.


Chapter 2:


The Indian cellular industry is controlled by the state. The Department of Telecommunication (DOT), reporting to the ministry of communication is the key body for policy issues and regulation, apart from being a basic service provider in rest of country. Mahanagar Telephone Nigam Ltd. (MTNL) is the operator in Mumbai and Delhi circles. By an act of the regulatory agency. The key players in the sectors are,

Government Bodies:1. Ministry of Communications: (MOC) All the operator of this sector come under the preview of MOC, It is responsible for all major policy changes, planning, supervision, spectrum control etc. 2. Department of Telecommunication: (DOT) DOT was formed in 1985 when the department of posts and Telecommunication was separated into department of posts and Telecommunication. Till 1986, it was only telecom services provider in India. It played a role beyond services provider by acting as a policy maker, planner, developer as well as an implemented body. In spirit of being profitable, non-corporate entity status ensured that it did not have to pay taxes. DOT depends on Govt. for its expansion plans and funding. Its pivotal role in the Indian telecom sector has got diluted after formation of TRAI. 3. Telecom Regulatory Authority of India: (TRAI) TRAI was founded to act as an independent regulatory body different tariff packages for different services areas, this become important, as DOT was a regulatory as well as player. Founded by an act of parliament. The main function of the body was to finalize the toll rates and settle disputes between players. An independent regulatory in critical as the sector witnesses the competition. The other entities in the sector under the control of MOC are the two public sector telecom equipment manufacturers, namely Indian Telephone Industries Ltd. (ITI) and Hindustan Teleprinters Ltd. (HTL). Both these companies are facing financial problems because of product obsolesces, poor management and over staffing. Telecommunication consultants India Ltd. (TCIL) another PSU was founded in 1978 to undertake consultancy services in the field of telecom. In addition there are a number of telecom equipment manufacture in private sector. Of this jelly field cables is the biggest segments. The Govt. through DOT and other player and enjoys an effective monopoly. DOT orders are finalized by tender system. Given the resources crunch and delays in finalizing orders most of these companies are facing financial problems.


Cellular Operators Association of India (COAI):To establish and sustain a world-class cellular infrastructure and deliver the benefits of affordable mobile communication services to the people of India. The Cellular Operators Association of India (COAI) was constituted in 1995 as a registered, non - profit, non - governmental society dedicated to the advancement of communication - in particular of modern communication through Cellular Mobile Telephone Services. The main objective of the COAI is to protect, promote and upgrade mobile cellular operations in India and also to look after the common and collective interests of its members. COAI has emerged as the official voice for the Indian cellular industry and interacts directly with. The Policy Maker the Ministry of Communications & IT, The Licensor the Department of Telecommunications (DoT); The Regulator the Telecom Regulatory Authority of India (TRAI); The Spectrum Management Agency Wireless Planning & Coordination Wing (WPC); The incumbent PTT & National Long Distance Operator Bharat Sanchar Nigam Ltd (BSNL); The incumbent International Long Distance Operator Videsh Sanchar Nigam limited (VSNL); Private sector participants in telecom; Apex Chamber Of Commerce Confederation of Indian industry (CII), Federation of Indian Chambers of commerce & Industry (FICCI), Associated Chambers of Commerce & Industry (ASSOCHAM); Sectoral Telecom Associations; etc.


The key objectives of the COAI include : a). To continuously improve the standards and competitiveness of the Cellular Industry and to attain the status of world class infrastructure and deliver the benefits of affordable mobile telephony services to the people of India. b).