Professional Documents
Culture Documents
Overview : The case examines the emergence of BSNL as the leading company in the
Indian telecom industry in early 21st century. It explores in detail the changes taking
place in the industry through the early 1990s - primarily the entry of private players and
the emergence of cellular telephony. It focuses on the various products and strategies
adopted by BSNL for its growth and the future course of action.
Analysis : We will look at the case through the 4C framework: Context, Company,
Consumers and the Competition. The critical issues in each of these aspects and the
future course of action
Context( Background): There was tremendous growth in the telecom sector. The key
stakeholders involved are the Operators and the customers. The market was divided into
postpaid and prepaid users. The key issues here were
• High growth in prepaid users
• ARPU declining at the rate of more than 5%
• High Churn rate
• Less usage of Value Added service in the prepaid segment
Company: Bharat Sanchar Nigam Limited (BSNL) was formed on October 1, 2000. It is
the largest telecom service provider of India offering the full range of communication
services. It intends to make available affordable and effective communication for
citizens. The Value proposition is as follows
• Availability of affordable communication to all citizens
• Improve the quality of telecom services
Consumer:
Firstly let us look at the position in Value Network and the Segmentation of the
Customers
Content Providers
Equipment Manufacture
Key takeaway is that BSNL needs to have the right kind of infrastructure.
In this aspect we will look at the 7Ps framework and analyze it from that point of view.
Price : The pricing was based on usage as per the tariff, apart from the installation. The
revenues were collected prior( for the prepaid users) or post usage.
The BSNL – Bharat Sanchar Nigam Ltd., is the largest telecom service provider of India
offering the full range of communication services – basic land line, wireless
mobile(CDMA), Leased line circuits, Internet telephony, etc. catering to various
segments SOHO ( Small office Home office), Corporate, Individuals, Business groups. In
terms of the revenue yield it is found that 15% of the subscriber yields more than 85% of
the revenue and this group when distilled further who result in a 5 % of the customer
population yielding 50 – 60% of the billing. In a competitive environment it is this group
of customers who are most vulnerable to be lured away by the private operators
(competitors). The following information has made an attempts to define the various
relationship markets present in the segment.
The price is based on the usage charges as per tariff apart from the installation cost.
Discounts are offered to heavy callers.
The promotion very limited till recently. However now logos, brands names for different
services, slogans (Connecting India) etc have been coined. Very recently advertisement
in the print media as well as television commercials has been released. (www.bsnl.co.in)
The people have a key role to play since it is a service sector. However this is the weakest
link in the marketing mix since the monopoly attitudes have hardly changed at the
ground level.
The process is another one of the neglected Ps. A lot of corrective processes have being
provided for after the complaints by line up of escalations, meeting the senior officials
etc. Yet the preventive/ proactive processes are not sufficient/ (work –in – progress).
The physical evidence (being a service sector) depends on the maintenance of front end
staff dealing with customer care, the office premises and facilities available there, toll
free numbers, call centers.
The main problem is faced by the company is that it cannot handle its existing customers
in an right manner like partly customers are satisfied with the service and partly are still
need to be satisfy, this can be done only through taking customer care as main area
while segmentation.
The Company has identified the high callers or those who make calls worth more than
Rs.5, 000/- per month as the high calling segment. This kind of segmentation purely
based on the revenue yield alone results in a heterogeneous group of high calling
individuals, companies, corporate with inter city presence. Neither has this group been
refined further for preferential differentiation nor are any of the measures specified in
the customer care specifically targeted towards this groups. Of course the system
corrections undertaken would benefit the high callers as well. Hence apart from
providing certain billing discounts or special meeting time the issues cannot be very
clearly addressed.
If one were to use this model for classifying this segment further it would be seen that
about 10% would be in the Hostage category. They are vocal, corner the available
resources for servicing and are complaining in nature. And the experience of the BSNL
managers is that this category normally contributes less to the revenue pool and hence
would not be attractive to the competition. A majority about 60%of the segment would be
in the Mercenary category, ready to make a shift, about 20% would be in the defector
and terrorist segment (this would include the media and think tank users of the
communications) would be make use of every opportunity to spread the negative image
and a loyal group of about 10% who are satisfied and stay with the company through the
problems.
BSNL should reward the loyal group by giving strength to their voice, try to neutralize
the impact of the defector terrorist group using pressure strategy and try to move the
Mercenary to the Loyal group. It should also know how to shake off the hostage group
without explicitly stating so.
1) The High calling segment is distilled further on the basis of revenue yield and country
wide presence.
They should be given classified as Platinum, Gold, Silver, classic groups based on their
total countrywide billing and these member subscribers should be eligible for country
wide facilities. The senior officers, frontline and other staff should be educated about the
value of these groups and they should be provided with premium service.
3) Being a public company major problem can be of over staff which need to be cut off
but instead of cutting the staff company can use its some employees in marketing their
product as they working in the company since many years they have more knowledge
about the company and the services which company offers.
4) The provision of total solutions still remain a myth as the customer has to still run
between various wings ( Circuits, Basic phone, Mobile, Internet, Long distance) for their
communication needs. Nodal points for interacting should be provided. This would
actually help the company sell more as a corporate group having Leased Circuits will
also need land lines for office/ residences, mobile communication needs for their officers
and sales staff etc.
INTERVIEW WITH A.K. SINHA, CHAIRMAN AND MANAGING DIRECTOR.