Â Œconsumer Behavior Study While Buying New Mobile

“CONSUMER BEHAVIOR STUDY WHILE BUYING NEW MOBILE CONNECTIONS”WITH RESPECT TO TAT
A INDICOM
Dissertation Submitted to the

Padmashree Dr. D.Y. Patil University
in partial fulfillment of the requirements for the award of the Degree of
MASTERS IN BUSINESS ADMINISTRATION
Submitted by:
Venugopal Arravelli N
(Roll No.MBA-IB-0801035)
Research Guide:
Mrs.Surya Bhamre
Department of Business Management
CBD Belapur, Navi Mumbai
2008-2010
DECLARATION
I hereby declare that the dissertation “consumer behavior study while buying new
mobile connections” submitted for the MBA Degree at Padmashree Dr. D.Y. Patil U
niversity’s Department of Business Management is my original work and the disser
tation has not formed the basis for the award of any degree, associate ship, fel
lowship or any other similar titles.
Place: Mumbai
Date:
(_________________)
Signature of the Student
Certificate
This is to certify that the dissertation entitled “CONSUMER BEHAVIOR STUDY WHIL
E BUYING NEW MOBILE CONNECTIONS” is the bona fide research work carried out by M
r. Venugopal Arravelli N. student of MBA, at Padmashree Dr. D.Y. Patil Universit
y’s Department of Business Management during the year 2008-2010, in partial fulf
illment of the requirements for the award of the Degree of Master in Business Ma
nagement and that the dissertation has not formed the basis for the award previo
usly of any degree, diploma, associate ship, fellowship or any other similar tit
le.
______________________
(Mrs Surya Bhamre)
__________________
(Dr. R. Gopal,)
Director,
Department of Business Mgt,
Padmashree Dr. D.Y. Patil University)
Place: Mumbai
Date:
ACKNOWLEDGEMENTS
In the first place, I thank Mrs Surya Bhamre , Lecturer, Department of Business
Management, Padmashree Dr. D.Y. Patil University, Navi Mumbai for having given m
e her valuable guidance for the project. Without her help it would have been imp
ossible for me to complete the project.
I would also like to thank the various people from the service industry who have
provided me with a lot of information and in fact even sharing some of the conf
idential company documents and data – many of which I have used in this report a
nd without which this project could not have been completed.
I would be failing in my duty if I do not acknowledge with a deep sense of grati
tude the sacrifices made by my parents and thus have helped me in completing the
project work successfully.
Place: Mumbai
Date:
Signature of the student.
CONTENTS
Chapter No Title Page No
A List of Tables 15
B List of Figures 16
C List of Abbreviations
1 Executive Summary 1
2 Objective of the Study 2
2.1 Need of the study 3
2.2 Scope of the study 5
3 Research Methodology 6
3.1 Statement of the problem 9
3.2 Limitation of the study 10
4 Review of Literature 11
5 Tata company profile 13
6 About Tata Teleservice 18
7 Introduction
7.1 Consumer buying behavior while buying new mobile connection
22
7.2 Factors effecting Consumer Buying behavior 24
7.3 Consumer Buying Decision Process
27
8 Analysis Of Mobile Communication Spread And Its Implications In
India 32
9 Future mobile communication in india 38
10 Details about service providers 39
11 Data Analysis and interpretation 52
12 Suggestions 81
13 Conclusion 83
14 ANNEXURE 85
14.1 QUESTIONAIRE
BIBLIOGRAPHY 91
ARTICLES 145
CONSUMER BEHAVIOR STUDY WHILE BUYING NEW MOBILE CONNECTIONS
“CONSUMER BEHAVIOR STUDY WHILE BUYING NEW MOBILE CONNECTIONS”WITH RESPECT TO TAT
A INDICOM
Dissertation Submitted to the

in partial fulfillment of the requirements for the award of the Degree of
MASTERS IN BUSINESS ADMINISTRATION
Submitted by:
Venugopal Arravelli N
(Roll No.MBA-IB-0801035)
Research Guide:
Mrs.Surya Bhamre
Department of Business Management
CBD Belapur, Navi Mumbai
2008-2010
EXECUTIVE SUMMARY
Consumer behavior during taking new mobile connections is a vast topic to study.
In order to analyze the subject minutely the topic is being divided into three
parts. First part of my project is all about designing a suitable questionna
ire so that the various variable factors that the consumer behavior and their ef
fectiveness in molding the same can be studied. The next part is dedicated to se
lection a suitable sample size of consumers using mobile connections and taking
their feedback through the questionnaire. Well in the last part of my study is d
evoted on doing the analysis and interpretation from the feedback collected from
the respondents. Then application of suitable statistical tool is decided on to
arrive at some results. Based on these results, a conclusion will be drawn ther
eafter which will stand as an ultimate result of my study in the concerned field
so called “CONSUMER BEHAVIOR STUDY WHILE BUYING NEW MOBILE CONNECTIONS”
The services structure can be renewed based on the provide suggestions and recom
mendations which can help to increase the client base and increase the market sh
are in the concerned field as the findings will basically revolve around the mos
t favored services by the investors and locate the core areas where the services
can be improved further according to the market demand.
OBJECTIVE OF THE STUDY:
1. To ascertain the attributes which influenced the customer’s in selecting a pa
rticular cell phone services provider.
2. To study the consumer’s satisfaction towards different cellular service provi
ders.
3. To assess the general problems faced by the cellular service users.
4. To offer valuable suggestions to improve the customer base of Tata Indicom.
NEED OF THE STUDY:

Exchange of information becomes the necessity of life to a common man. In the mo
dern world an individual tends to communicate anything to everything right from
the place where he/she stands. Even while riding a vehicle he / she wants to com
municate within a fraction of second at quick speed with clear voice, without an
y disturbance like line crossing, out of order, etc ; most of which lack in the
connectivity given by the department of telecommunication.
Cellular service providers emerge as a boon quench such a thirst, thus by provid
ing facilities, which a common man cannot imagine. Though the telecom industry h
as its origin in the recent past and the growth has been excellent. Day by day m
any new competitors enter the market with new attractive schemes, provide additi
onal facilities, add new features to existing ones, reduce the charges of incomi
ng and outgoing calls, introduce varieties of handsets, models a healthy competi
tion that benefits the subscribers. Hence in this context, it is important to st
udy the various attributes or factors which shape the consumers mind during taki
ng or switching over to new mobile connections. In terms of value- addition to t
he organization, this study will definitely help the Company to grow in future.
As, we all are aware of the fact that a fierce competition is going on, in order
to stay alive in the market place. In this situation, one competitor tries to p
enetrate through the loop holes of the other competitor. This project will visua
lize all sorts of loop holes which the Tata Indicom possesses right now and will
also give a complete insight to all types of problems such as, whether the prod
ucts & services are competent enough to fight back their competitor’s products &
services or not
SCOPE OF THIS STUDY:
The present study is contained to Mumbai and it is decided to consider Airtel, T
ata Indicom and other cell phone service rendered to the customers. In Mumbai t
here are 11 cellular services available - Airtel, Aircel, Tata Indicom, TataDoco
mo, MTNL, Loop, Idea, virgin, Vodafone and Reliance Comm,MTS. The main objective
s of this study is to analyze the customer behavior during taking new mobile con
nections and consumers of different cellular service providers of Mumbai city h
as been taken for the current research work.
RESEARCH METHODOLOGY –
Research is a systematic effort to gain new knowledge.
Research is a movement of knowledge from known to unknown from the available pla
ce to the required place. Research methods:
Those methods which are used by the researcher during the course of studying are
research problem are termed as research methods.
Research methodology:
The research methodology, not only the research methods are but also consider th
e logic behind the methods. They are in the contest of our research studied. And
explain why we are using a particular method or techniques and we are not using
others.
Descriptive research design:
In includes surveys, and facts finding enquires of different kinds. The major pu
rpose of descriptive research is description of state of affairs as it exists at
present. The main character of this method is that the researcher has no contro
l over the variables. He can report what has happened? Or what is happening?
Nature of data:
Primary data –
Interviews
Questionnaires
Personal observations
Secondary data –
Journals
Reports
Books
Websites
Collection of data:
The data were collected from the respondents through the distribution of questio
nnaire.
Area of the study- This study covers Mumbai city only.
Sample size - The sample size covered for the purpose of this study is 30
DEVELOPING THE QUESTIONNAIRE:

The following four questions need to be answered in designing an effective set o
f questions or a questionnaire:
1) Will the respondent have the information/knowledge needed to answer the que
stions?
2) Will the respondent understand the questions?
3) Will the respondent likely to give a true answer?
4) Will the formulation of the question bias the response
Basically in the beginning some sample questionnaires were developed and where a
dministered directly on the clients. This was the trail method included for pilo
t testing and the final questionnaires were prepared thereafter assessing the fe
edback and result of the test.
Tools for analysis:
Along with the usual statistical tools such as tables, percentages, barcharts, I
have used hypothesis-test for analyzing the data and arriving at the conclusion
.
Statement of problem:
In our country the growth of service marketing especially telecom industry is st
ill in its infancy stage, as compared to the industrially advanced countries. It
is for the fact that the economy of our country has been in the developing stag
e. There are various cellular service services providers in our country and they
are playing an essential role in fulfilling the needs of the customers. Now-a-d
ays, the customers are more dynamic. Their taste, needs and preference can be ch
anging as per current scenario. Hence the development of
cellular industry mainly depends on the customer satisfaction. However the follo
wing questions may arise regarding customer satisfaction
1. Does the cell industry satisfy the social responsibility?
2. What are the expectations by the customer’s regarding service provided by the
cell phone service provider?
3. Whether the service provided by cell phone industry is satisfying the custome
rs?
4. Are the facilities available adequate to satisfy the customers?
Limitations of the study -

Though the detailed investigation is made in the present study, still there are
following limitations.
• This study is restricted only to them Mumbai . So, the results may not be appl
icable to other areas.
• This study is based on the prevailing customer’s satisfaction. But the custome
r’s satisfaction may change according to time, fashion, technology, development,
etc.
• As per the population of the study is huge, a sample size of 30 sample respond
ents is only covered till now.
• Lack of awareness about the Company’s products & services among the customers
may hamper the primary data collection.
• Data collection of exact data for the research is not possible because there i
s a gap between what respondent say and what they actually do.
• Information provided by the customers may not be accurate. They may hide some
of the information at the time of filling up the questionnaires.
REVIEW OF LITERATURE
A brief literature would be of immense help to the researcher in gaining insight

into selected problem. The researcher would gain good background knowledge of t
he problem by reviewing certain studies. A reference to these entire studies wil
l be related in the context of the shaping the present study.
1. Samuel, “customer satisfaction for cellular services, a study with a referenc

e to BPL and Aircel mobile connections and services”, an unpublished M.Phil. Dis
sertation, submitted to Bharathiar University, Coimbatore, December 2002.
2. Sree Nandhini, in her study shows that attitude of the respondents using cell
connections was not influenced by either education or occupation and income.
3. Sree Nandhini, “an investigation of user perception and altitude to cellular
phone in Coimbatore”, an unpublished submitted to Bharathiar University, Decembe
r, 2001.
4. P. Adhavan (2003), in his study “existing customer relation” found that the d
ealer’s service regarding Aircel cellular is highly satisfactory.
5. Hutchison’s managing director Asin Ghosh 2005 says in the article,

“Telecommunication” telecommunication is such a huge sector and it is so easy to
be reduced by its different points, but thankfully we were”
6. Asin Glosh, “telecommunication” business world 27th January 2003.
7. Consumer behavior – consumer psychology while buying products edited by leon
schiffman
8. consumer behavior model – edited by Hawkins ,best coney
9.consumer behavior in Indian perpertive –edited by suja nair –Himalaya publicat
ions
10.consumer satisfaction concept – edited by walker
TATA COMPANY PROFILE

History
The beginnings of the Tata Group can be traced back to 1868, when Jamsetji Nusse
rwanji Tata established a trading company dealing in Opium in Bombay present it
is calling as Mumbai. This was followed by the installation of Empress Mills in
Nagpur in 1877. Taj Mahal Hotel in Bombay was opened for business in 1903. Sir
Dorab Tata, the eldest son of Jamsetji became the chairman of the group after hi
s fathers death in 1904. Under him, the group ventured into steel production (19
05) and hydroelectric power generation(1910). After the death of Dorab Tata in 1
934, Nowroji Saklatwala headed the group till 1938. He was succeeded by JRD Tata
. The group expanded significantly under him with the establishment of Tata Chem
icals (1939), Tata Motors and Tata Industries (both 1945), Voltas (1954), Tata T
ea (1962), Tata Consultancy Services (1968) and Titan Industries (1984). Ratan T
ata, the incumbent chairman of the group succeeded JRD Tata in 1991
Engineering
• TAL Manufacturing Solutions exports titanium-composite floor beams that
are installed in the Boeing 787 aircraft.
• Tata AutoComp Systems Limited (TACO) and its subsidiaries, auto-componen
t manufacturing
• Tata Motors (formerly Tata Engineering and Locomotives Company Ltd (TELC
O)), manufacturer of commercial vehicles (largest in India) and passenger cars
• Jaguar and Land Rover
• Tata Projects
• Tata Consulting Engineers Limited
• Telco Construction Equipment Company
• TRF Bulk Material Handling Equipment & Systems and Port & Yard Equipment
s.
• Voltas, consumer electronics company
• Voltas Global Engineering Centre
Energy
• Tata Power is one of the largest private sector power companies. It supp
lies power to Mumbai, the commercial capital of India and parts of New Delhi.
Chemicals
• Rallis India
• Tata Pigments
• Tata Chemicals, headquartered in Mumbai, India, Tata Chemicals has the l
argest single soda ash production capacity plant in India. Since 2006 Tata Chemi
cals has owned Brunner Mond, a United Kingdom-based chemical company with operat
ions in Kenya and the Netherlands.
• Advinus Therapeutics, headquartered in Bangalore, Indian, a Contract res
earch organization focused on drug discovery and development for Pharmaceutical,
Agro and Biotech industries.
Services
• The Indian Hotels Company
• Tata Housing Development Company Ltd. (THDC)
• Tata-AIG General Insurance, a joint venture with AIG
• Tata-AIG Life Insurance, a joint venture with AIG
• Tata Advanced Systems Limited
• Tata Asset Management
• Tata Financial Services
• Tata Capital
• Tata Investment Corporation
• Tata Quality Management Services
• Tata Share Registry
• Tata Strategic Management Group (TSMG) is one of the largest consulting
firms in South Asia.
• Tata Services
Consumer Products
• Tata Salt, i-Shakti Salt, Tata Salt Lite
• Tata Ceramics
• Infiniti Retail
• Tata Tea Limited is the world s second largest manufacturer of packaged
tea and tea products. It also owns the Tetley brand of tea sold primarily in Eur
ope.
• Titan Industries manufacturers of Titan watches
• Sonata Watches A watch product by TATA
• Trent (Westside)
• Tata Sky
• Tata International Ltd - Leather Products Division
• Tanishq jewellery
• Star Bazaar
Information systems and communications
• Computational Research Laboratories
• INCAT
• Nelco
• Nelito Systems
• Tata Business Support Services (formerly Serwizsol)
• Tata Consultancy Services Ltd. (TCS) is Asia s largest software company
with 2008-09 revenues being over US$ 6 bn.
• Tata Elxsi is another Software and Industrial design company of the Tata
stable. Based in Bangalore and Trivandrum. One of the leading companies in the
animation industry of India.
• Tata Interactive Systems
• Tata Technologies Limited
• Tata Teleservices
• Tatanet
• Tata Communications, formerly VSNL, the Indian telecom giant, was acquir
ed in 2002. Tata-owned VSNL acquired Teleglobe in 2005.
CMC Limited
ABOUT TATA TELESERVICES
Communications is the Tata Group’s largest investment and the Group’s objective
is to provide end-to-end telecommunications solutions for business and residenti
al customers across the nation, and internationally. The Group’s communications
activities are currently spread primarily over four companies—Tata Teleservices
Limited (TTSL) and its associate Tata Teleservices (Maharashtra) Limited (TTML),
Tata Communication (erstwhile VSNL) and Tata Sky. Together, these companies cov
er the full range of communications services, including:
Telephony Services: Fixed and Mobile
Media and Entertainment Services: Satellite TV
Data Services: Leased Lines, Managed Data Networks, IP/MPLS VPN, Dial-up Interne
t, Wi-Fi and Broadband
Value Added Services: Mobile and Broadband Content/Applications, Calling Cards,
Net Telephony and Managed Services Infrastructure Services: Submarine Cable Ban
dwidth, Terrestrial Fiber Network and Satellite Earth Stations and VSAT Connecti
vity
Tata Teleservices is part of the INR Rs. 2, 51,543 Crores
Tata Group that has over 80 companies, over 3, 30,000 employees and more than 3.
2 million shareholders. With a committed investment of INR 36,000 Crores (US$ 7.
5 billion) in Telecom (FY 2006), the Group has a formidable presence across the
telecom value chain. Tata Teleservices spearheads the Group’s presence in the te
lecom sector. Incorporated in 1996, Tata Teleservices was the first to launch CD
MA mobile services in India with the Andhra Pradesh circle. Beginning with its a
cquisition of Hughes Telecom (India) Limited in December 2002 [now renamed Tata
Teleservices (Maharashtra) Limited], which provides services in the Mumbai and R
est of Maharashtra telecom circles, the company has swung into expansion mode an
d currently has a pan-India state-of-the-art network.
Having pioneered the CDMA 2000 technology platform in India, Tata Teleservices h
as established a 3G-ready robust and reliable telecom infrastructure in partners
hip with Motorola, Ericsson and Lucent. The company has also received the licens
e from the Department of Telecommunications to launch GSM services as well. With
this launch set for early 2009, TTSL is on the threshold of emerging as a true-
play dual technology telecom operator. In November 2008, Tata Teleservices enter
ed into an agreement with Japanese telecom major NTT DOCOMO, as part of which th
e Japanese company acquired a 26% stake in TTSL for USD 2.7 billion. The transac
tion marks a key step in the strategic evolution of Tata Teleservices, as it mov
es towards a pan-India dual network presence. On a broader level, the transactio
n is also expected to mark the beginning of a relationship of broader co-operati
on between Tata companies and the Nippon Telegraph and Telephone Corporation (NT
T). The potential benefits and synergies from the alliance with DOCOMO cut acros
s marketing, handset development and technical support, all of which are expecte
d to create new opportunities for both companies. The alliance will also acceler
ate Tata Teleservices’ GSM plans and help the company penetrate the market with
advanced technology and new VAS offering. Tata Teleservices’ bouquet of telephon
y services includes mobile services, wireless desktop connections, public booth
telephony and wire line services. Other services include value-added services su
ch as voice portal, roaming, post-paid Internet services, 3-way conferencing, gr
oup calling, Wi-Fi Internet, USB Modem, data cards, calling card services and en
terprise services. Some of the other products launched by the company include pr
epaid wireless desktop connections, public phone booths, new mobile handsets and
new voice and data services such as BREW games, voice portal, picture messaging
, face book, M commerce applications, polyphonic ring tones, interactive applica
tions like news, cricket, astrology, etc
In Feb 2008, TTSL announced that it would provide CDMA mobile services targeted
towards the youth, in association with the Virgin Group on a Franchisee model ba
sis.
Tata Teleservices Provides mobile services under 3 Brand names:
• Tata Indicom (CDMA Mobile operator)
• Tata DoCoMo (GSM Mobile operator)
• Virgin Mobile (CDMA Mobile operator)
• Virgin Mobile (GSM Mobile operator)
Market Data
Tata Indicom in April 2009, crossed the 35 million subscribers mark in the wirel
ess category with an overall subscriber base of over 36 million.
Tata Teleservices is no. 2 slot in terms of Market Share in Delhi NCR region wit
h a subscriber base of 5 million.
Rural Telecom
TTSL also maintains a distribution network across villages , where in people are
appointed and trained by TTSL – who visit villages on a bicycle or a two-wheele
r at defined times on defined days of the week, selling recharge vouchers and se
rvicing equipment; each runner covers between 200 to 300 customers.
The company joined hands with Tata Chemicals, Tata Kisaan Sansar network, dissem
inating information through these centres and using them as local distributors.
INTRODUCTION TO CONSUMER BEHAVIOR STUDY WHILE BUYING A NEW MOBILE CONNECTIONS

The title of my project is “Consumer Behavior Study while buying a New Mobile Co
nnections” first of all we need to understand that “What is consumer buying beha
vior?” Before business can develop marketing strategies, they must understand wh
at factors influence buyer’s behavior and how they make purchase decisions to sa
tisfy their needs and wants. Buyers are moved by a complex set of deep and subtl
e emotions. Their behavior result from deeply held values and attitudes; their p
erception of the world and their place in it, from common sense, impulse or just
plain whimsy. There are also several stages through which the consumer exhibit
before deciding to purchase goods or services. These include 5 steps which are:
problem or need recognition, information search, alternative evaluation, purchas
e and post-purchase evaluation. IMPORTANCE OF CONSUMER SATISFACTION The needs to
satisfy customer for success in any commercial enterprise is very obvious. The
income of all commercial enterprise is derived from the payments received for th
e products and services supplied to its customers. If there is no customer there
is no income and there is no business. Then the core activity of any company is
to attract and retain customers. It is therefore no surprise that Peter F Druck
er the renowned management Guru, has said “to satisfy the customers is the missi
on and purpose of every business”. Satisfaction of customer is essential for ret
ention of customer’s and for continuous sales of the products and services of th
e company to customers. This establishes the needs for and the importance of cus
tomer satisfaction. The satisfaction of consumers is different from one to anoth
er. Became, each consumer has the different behavior in their life. So, the mark
eter satisfies the consumer, he must very well know the behavior of consumer.
CONSUMER BUYING BEHAVIOR
Consumer behavior refers to the mental and emotional process and the observable
behavior of consumers during searching, purchasing and post consumption of a pro
duct or service.
Consumer behavior involves study of how people buy, what they buy, when they buy
and why they buy. It blends the elements from psychology, sociology, socio-psyc
hology, anthropology and economics. It also tries to assess the influence on the
consumer from groups such as family, friends, reference groups and society in g
eneral. Buyer behavior has two aspects: the final purchase activity visible to a
ny observer and the detailed or short decision process that may involve the inte
rplay of a number of complex variables not visible to anyone.
FACTORS AFFECTING CONSUMER BUYING BEHAVIOR

Consumer buying behavior is influenced by the major three factors:
1. Social Factors
2. Psychological Factors
3. Personal Factors.
A. SOCIAL FACTORS
Social factors refer to forces that other people exert and which affect consumer
s’ purchase behavior. These social factors can include culture and subculture, r
oles and family, social class and reference groups.
Example:
By taking into consideration Reference group, these can influence/ affect the co
nsumer buying behavior. Reference group refers to a group with whom an individua
l identifies herself/ himself and the extent to which that person assumes many v
alues, attitudes or behavior of group members. Reference groups can be family, s
chool or college, work group, club membership, citizenship etc.
Reference groups serve as one of the primary agents of consumer socialization an
d learning and can be influential enough to induce not only socially acceptable
consumer behavior but also socially unacceptable and even personal destructive b
ehavior. For example, if fresher student joins a college / university, he/she wi
ll meet different people and form a group, in that group there can be behavior p
atterns of values, for example style of clothing, handsets which most of group m
ember prefer or even destructive behavior such as excessive consumption of alcoh
ol, use of harmful and addictive drugs etc. So, according to how an individual r
eferences him / her to that particular reference group, this will influence and
change his/her buying behavior.
B. PSYCHOLOGICAL FACTORS
These are internal to an individual and generate forces within that influence he
r/his purchase behavior. The major forces include motives, perception, learning,
attitude and personality.
Example:
Attitude is an enduring organization of motivational, emotional, perceptual and
cognitive processes with respect to some aspect of our environment. Consumer for
m attitude towards a brand on the basis of their beliefs about the brand. For ex
ample, consumers of Sony products might have the belief that the products offere
d by Sony are durable; this will influence those customers to buy Sony products
due to this attitude towards the brand.
C. PERSONAL FACTORS
These include those aspects that are unique to a person and influence purchase b
ehavior. These factors include demographic factors, lifestyle, and situational f
actors.
Example:
Lifestyle is an indicator of how people live and express themselves on the basis
of their activities, interests, and opinions. Lifestyle dimension provide a bro
ader view of people about how they spend their time the importance of things in
their surroundings and their beliefs on broad issues associated with life and li
ving and themselves. This is influenced by demographic factors and personality.
E.g. A CEO or Manager is likely to buy more formal clothes, ties and shoes or PD
As and less informal clothes like jeans as compared to a Mechanic or Civil engin
eer. So according to their lifestyle and profession, the buying behavior of peop
le differs from one another.
CONSUMER BUYING DECISION PROCESS

Consumer buying decision process is the processes undertaken by consumer in rega
rd to a potential market transaction before, during and after the purchase of a
product or service.
Consumer decision making process generally involves five stages-:

Problem Recognition
Purchase decision making process begins when a buyer becomes aware of an unsatis
fied need or problem. This is the vital stage in buying decision process, becaus
e without recognizing the need or want, an individual would not seek to buy good
s or service. There are several situations that can cause problem recognition, t
hese include:
• Depletion of stock
• Dissatisfaction with goods in stock
• Environmental Changes
• Change in Financial Situation
• Marketer Initiated Activities
Stage I:
It’s when a person recognizes that she/he cannot make a call from her mobile pho
ne that’s when she/he recognizes that her phone has been damaged i.e. the phone
has hardware problems and needs to be repaired or buying a new piece.
Information Search
After the consumer has recognized the need, he / she will try to find the means
to solve that need. First he will recall how he used to solve such kind of a pro
blem in the past, this is called nominal decision making. Secondly, a consumer w
ill try to solve the problem by asking a friend or goes to the market to seek ad
vice for which product will best serve his need, this is called limited decision
making.
Sources of information include:
• Personal sources
• Commercial Sources
• Public sources
• Personal experience
STAGE II: The user of the phone after recognizing that her phone is damaged, sh
e will eventually try to find out how she can repair her phone. If she cannot re
pair it herself she will ask a friend to help out, if the friend cannot solve th
e problem she will go to mobile repair shop, if they also cannot repair it then
she will try to find which mobile phone is good and that can serve her need. In
this process of information collection it will yield awareness of set of brands
of mobile connections she can buy.
Alternatives evaluation
Consumers’ evaluates criteria refer to various dimension; features, characterist
ics and benefits that a consumer desires to solve a certain problem. Product fea
tures and its benefit is what influence consumer to prefer that particular produ
ct. The consumer will decide which product to buy from a set of alternative prod
ucts depending on each unique feature that the product offers and the benefit he
/ she can get out of that feature.
STAGE III : When that user got enough information concerning the different brand
s of mobile connections available in the market, she will decide which kind of a
mobile phone and brand she’s going to buy depending upon her need for that part
icular mobile, either a mobile for multimedia and entertainment, Smartphone or c
lassic phone.
Purchase Action
This stage involves selection of brand and the retail outlet to purchase such a
product. Retail outlet image and its location are important. Consumer usually pr
efers a nearby retail outlet for minor shopping and they can willingly go to a f
ar away store when they purchase items which are of higher values and which invo
lve higher sensitive purchase decision. After selecting where to buy and what to
buy, the consumer completes the final step of transaction by either cash or cre
dit.
STAGE IV: After selecting brand of the phone and model from different alternativ
es of mobile connections, she will make a final decision of where to buying that
phone and make the final transaction procedures.
Post-purchase Actions
Consumer favorable post-purchase evaluation leads to satisfaction. Satisfaction
with the purchase is basically a function of the initial performance level expec
tation and perceived performance relative to those expectations. Consumer tends
to evaluate their wisdom on the purchase of that particular product. This can re
sult to consumer experiencing post purchase dissatisfaction. If the consumer’s p
erceived performance level is below expectation and fail to meet satisfaction th
is will eventually cause dissatisfaction, and so the brand and/ or the outlet wi
ll not be considered by the consumer in the future purchases. This might cause t
he consumer toinitiate complaint behavior and spread negative word-of-mouth conc
erning that particular product.
STAGE V :
If she decided to buy a multimedia phone she will try to compare the quality of
music it provides and pictures taken if they meet her expectations. If she will
find that her expectation are meeting she will be satisfied, if she found that t
here are more additional features that she did not expect this mobile phone to h
ave, she will be delighted, otherwise, she will be dissatisfied. Since my title
is “Consumer behavior during taking new mobile connections”, I need to do the su
rvey of existing/new consumers of the service of different cellular service prov
iders. Hence, my project is totally based on comparative analysis of different a
ttributes shaping the consumer behavior during taking new mobile connections. Ti
ll date I have completed the survey of 150 consumers of different cellular servi
ce providers and I got many Suggestions & Recommendations from the customers.
ANALYSIS OF MOBILE COMMUNICATION SPREAD AND ITS IMPLICATIONS IN INDIA

History of Cellular Telephony in India
Initially Department of Telecommunications (Dot) was the only monopoly operator
in the country. Telecommunication sector was recognized by the Government of Ind
ia as one of the few basic infrastructure sectors for the country. Under the Gov
ernment policy of economic liberalization, privatization and competition in Indi
a, private sectors have been allowed to enter the public telecommunication field
(where Government was a monopoly). In 1992 telecommunication sector in India wa
s liberalized to bridge the gap through government spending and to provide addit
ional resources for the nation’s telecom target. The objective of the reform was
making the telecommunications within the reach of all, thereby achieving univer
sal service, covering all villages and bringing the telecommunication services t
o the world standard, while protecting the defense and security needs of the cou
ntry.
In 1993 the telecom industry got an annual foreign investment of Rs 20.6 million
. In 1994 license for providing cellular mobile services was granted by the Gove
rnment of India for the Metropolitan cites of Delhi, Mumbai, Kolkata and Chennai
. Initially Cellular mobile services were duopoly (i.e. not more than two cellul
ar mobile operators could be licensed in each telecom circle), under a fixed lic
ense fee. In 1995, government opened up 19 more telecom circles and issued mobil
e licenses. To regulate and settle disputes Telecom Regulatory Authority of Indi
a was set up in 1997 and in 1999 National Telecom Policy was announced by the Go
vernment of India. In order to speed up the development of the telecom sector, a
ll telecom services were opened up for private sector participation. Unrestricte
d entry is allowed in the basic services, national and international long distan
ce service, in global mobile personal communication by satellite
(GMPCS) service, VSAT and Public Mobile Radio Trunked Service (PMRTS). All telec
om sectors under Dot was handed over to new public Sector Undertaking viz, Bhara
t Sanchar Nigam Limited (BSNL) which was registered under Company’s Act in 1st O
ctober 2005.BSNL covers the entire country except Delhi and Mumbai Metros which
are under Mahanagar Telephone Nigam Limited (MTNL).
Major Service providers in India
Two different technologies are deployed by the mobile operators in India namely
GSM and CDMA.The GSM service providers are Bharti, BSNL, Vodafone , IDEA, Aircel
, Reliance, Spice, MTNL,Vergin and loop, whereas the CDMA service providers are
TATA, HFCl, Shyam, and Reliance. Figure 1 shows the market share of each service
provider in India. India’s mobile market is dominated by foreign companies for
high end telecom equipments, handsets; transmission equipments etc., Nokia, Sams
ung, and Motorola are the three important vendors for handsets. Other vendors wh
o have their share in this market are L.G, Alcatel, Sony Ericsson, Siemens, Nati
onal Panasonic, Philips, Mitsubishi, and Sagem Micromaxx, fly etc
MOBILE SUBSCRIBER STATISTICS
Recently, mobile connections in India have crossed the 100- million mark, which
means over nine in 100 Indians have a phone. Adding on to this benevolent and ha
ppy information, telecom companies are anticipating the number will nearly trebl
e in the next two years. According to a survey, by 2006, the cellular networks a
re expected to cover 3, 50,000 (out of 6, 07,000) villages, covering 450 million
people.
NOTE:-HUTCH IS NOW VODAFONE,BPL IS NOW LOOP

SOURE:- WWW.SCRIBD.COM
Market Share of both mobile and wire line Service Providers in India
GSM Subscribers
As per the data released by the Cellular Operators Association of India (COAI),
the total number of GSM subscriptions in India reached 288.3 Million in the rece
ntly ended fiscal, with an addition of 10.84 Million new subscribers in March 20
09, Released in Business Standard.
The figures released were excluding the subscriptions recorded by Reliance Commu
nications, the CDMA service provider which has recently launched its GSM service
s, as the Company did not disclose its GSM numbers separately. On adding estimat
ed 2.5-2.7 Million GSM subscribers for Reliance Communications, the overall incr
ease for GSM subscribers will reach 13.54 Million..
The number of mobile users in India surged amid gloomy economic conditions and t
his is due to the efforts of companies trying to increase the sales at the end o
f the fiscal year. The industry experts believe that fiscal year 2009-10 will wi
tness monthly incremental growth of 14-15 Million subscribers. In addition, mobi
le penetration is anticipated to increase to 50% from the current level of 35% b
y the end of 2009-10.
Besides, the COAI has projected that there will be nearly 500 Million GSM subscr
ibers in India by the end of the current fiscal year while the figure will cross
the 800 Million mark by 2012.
CDMA Mobile Subscribers

India, which is already the world s second-largest CDMA market, now has 100 mill
ion subscribers using mobile telephony based on the on the technology and it is
expecting to add another 100 million subscribers in the next two years.
The CDMA Development Group (CDG) -- a trade association -- today said that there
are now more than 100 million CDMA subscribers in India.
"The country has added 50 million subscribers in India in just two years. Going
forward we expect to add another 100 million subscribers in the next two years,"
CDG executive director Perry LaForge said. CDMA or Code division multiple acce
ss is a popular mobile technology. In India operators such as Tata Teleservices,
Reliance Communications and Siestema Shyam Telelink offer mobile services based
on this technology.
Attributing this rapid growth to the availability of affordable devices and low
tariffs, As a result, CDMA reached 50 million subscribers in India twice as fas
t as any competing cellular technology.
He further added the recently-introduced CDMA mobile broadband solutions are poi
sed to have a similar significant impact on increasing broadband penetration in
the country.
TELECOM IN RURAL INDIA

India has an urban population of about 26.8% and rural population is about 73.2%
. And there are over 600,000 villages in India. But a vast section of the rural
sector is still cut off from the benefits of telecom services. The rural populat
ion of around 700 million is waiting for its share of economic growth. Initially
the big telephone companies focused only on urban centers, which they felt were
more profitable. However, this mindset is gradually changing with the realizati
on that there is equal, if not bigger money in rural areas.
FUTURE OF MOBILE COMMUNICATION IN INDIA
India initially started with GSM technology for mobile communication. Being a te
chnology neutral country, India later allowed for CDMA technology also. Now 2.75
G EDGE technologies has been implemented and used. BSNL has got license for brin
ging 3G into operation. Trials are being conducted for 3G implementation in the
four metropolitan cities of India. Commercial 3G will be started by March 2007 W
ith the dwindling revenues of the operators from the data and voice there is a n
eed to look at newer applications to fuel growth of the telcos.TV on Mobile has
emerged as a solid and potent answer to this consumer yearning. South Korea, Chi
na, South Africa, Australia and Europe have seen this need and have acted upon t
he same by implementing TV on Mobile. India is around the corner for implementat
ion of similar technology for the benefit of consumers, operators, content provi
ders and Government. It promises to be a USD 1 billion industry by 2010, if road
maps are created and implemented properly.
DETAILS ABOUT SERVICE PROVIDERS:

AIRCEL:
Aircel is a mobile phone service provider in India. It offers both prepaid and p
ostpaid GSM cellular phone coverage throughout India. Aircel is a joint venture
between Maxis Communications of Malaysia and Apollo Hospital Enterprise Ltd of I
ndia. Maxis has a 74% stake in Aircel and the remaining 26% is with Apollo Hospi
tals. It is India’s fifth largest GSM mobile service provider with a subscriber
base of over 27.7 million, as of October 31, 2009. It has a market share of 12.8
% among the GSM operators in the country. As on date, Aircel is present in 18 of
the total 23 telecom circles (including Andhra Pradesh, Assam, Bihar & Jharkhan
d, Chennai, Delhi & NCR, Himachal Pradesh, Jammu & Kashmir, Karnataka, Kerala, K
olkata, Mumbai, North East, Orissa, Rest of Maharashtra & Goa, Rest of Tamil Nad
u, Rest of West Bengal, Uttar Pradesh East, Uttar Pradesh West) and with licence
s secured for the remaining 5 telecom circles, the company plans to become a pan
-India operator by 2010. Additionally, Aircel has also obtained permission from
Department of Telecommunications (DoT) to provide International Long Distance (I
LD) and National Long Distance (NLD) telephony services. It is also a category A
ISP. It is also having the largest service in Tamilnadu.
Aircel Business Solutions (ABS), part of Aircel, is an ISO 9000 certified compan
y. ABS is a registered member of WiMAX forum – both in the Indian and Internatio
nal Chapters. ABS’ product range includes enterprise solutions such as Multiprot
ocol Label Switching Virtual Private Networks (MPLS VPNs), Voice over Internet P
rotocol (VoIP) and Managed Video Services on wireless platform including WiMAX.
Aircel has won many awards for its services. Aircel was honored at the World Bra
nd Congress 2009 with three awards, Brand Leadership in Telecom, Marketing Campa
ign & Marketing Professional of the Year. Aircel was honored by CMAI INFOCOM Nat
ional Telecom Award 2009 for, ‘Excellence in Marketing of New Telecom Service’.
Aircel had been selected as the best regional operator in 2008 by Tele.net. Airc
el was rated as the top mid-size utility company in Business World’s ‘List of Be
st Mid-Size Companies’ in 2007. Aircel got the highest rating for overall custom
er satisfaction and network quality in 2006 by Voice and Data.
In latest news, Maxis, Aircel s majority stake holder, raised RM11.2 billions (U
SD 3.36 billions)for its shareholders, making it the largest IPO in Malaysia and
Southeast Asia.
Bharti Airtel:
Telecom giant Bharti Airtel is the flagship company of Bharti Enterprises. The B
harti Group has a diverse business portfolio and has created global brands in th
e telecommunication sector. Bharti has recently forayed into retail business as
Bharti Retail Pvt. Ltd. under a MoU with Wal-Mart for the cash & carry business.
It has successfully launched an international venture with EL Rothschild Group
to export fresh agro products exclusively to markets in
Europe and USA and has launched Bharti AXA Life Insurance Company Ltd under a jo
int venture with AXA, world leader in financial protection and wealth management
. Airtel comes to you from Bharti Airtel Limited, India’s largest integrated and
the first private telecom services provider with a footprint in all the 23 tele
com circles. Bharti Airtel since its inception has been at the forefront of tech
nology and has steered the course of the telecom sector in the country with its
world class products and services. The businesses at Bharti Airtel have been str
uctured into three individual strategic business units (SBU’s) – Mobile Services
, Airtel Telemedia Services & Enterprise Services. The mobile business provides
mobile & fixed wireless services using GSM technology across 23 telecom circles
while the Airtel Telemedia Services business offers broadband & telephone servic
es in 94 cities. The Enterprise services provide end-to-end telecom solutions to
corporate customers and national & international long distance services to carr
iers. All these services are provided under the Airtel brand.
Globally, Bharti Airtel is the 3rd largest in-country mobile operator by subscr
iber base, behind China Mobile and China Unicom. In India, the company has a 24.
6% share of the wireless services market, followed by 17.7% for Reliance Communi
cations and 17.4% for Vodafone Essar.In January 2010, company announced that Man
oj Kohli, Joint Managing Director and current Chief Executive Officer of Indian
and South Asian operations, will become the Chief Executive Officer of the Inter
national Business Group from 1st April 2010. He will be overseeing Bharti s over
seas business. Current Dy. CEO, Sanjay Kapoor, will replace Manoj Kohli and will
be the CEO with effective from 1st April, 2010.
The total is 121,714,243 or 30.86% of the total 394,349,733 GSM mobile connectio
ns in India till December 2009; and presently the Number 1 operator in India.
On the 9th of May, 2009 Airtel signed a major deal with Manchester United Footba
ll Club. As a result of the deal, Airtel gets the rights to broadcast the matche
s played by the team to its customers.
Reliance
The late Dhirubhai Ambani dreamt of a digital India – an India where the common
man would have access to affordable means of information and communication. Dhir
ubhai, who single-handedly built India’s largest private sector company virtuall
y from scratch, had stated as early as 1999:”Make the tools of information and c
ommunication available to people at an affordable cost. They will overcome the h
andicaps of illiteracy and lack of mobility”.
It was with this belief in mind that Reliance Communications (formerly Reliance
Info Comm) started laying 60,000 route kilometers of a pan-India fiber optic bac
kbone. This backbone was commissioned on 28 December 2002, the auspicious occasi
on of Dhirubhai’s 70th birthday, though sadly after his unexpected demise on 6th
July 2002.
Reliance Communications has a reliable, high-capacity, integrated (both wireless
and wire line) and convergent (voice, data and video) digital network.
It is capable of delivering a range of services spanning the entire Info Comm (i
nformation communication) value chain, including infrastructure and services – f
or enterprises as well as individuals, applications, and consulting.
Today, Reliance Communications is revolutionizing the way India communicates and
networks, truly bringing about a new way of life.
Tata Teleservices
Tata Teleservices is part of the INR Rs.120000 Crore (US$ 29 billion) Tata Group
, that has over 87 companies, over 330,000 employees and more than 2.8 million s
hareholders. With a committed investment of INR 36,000 Crore (US$ 7.5 billion) i
n Telecom (FY 2006), the group has a formidable presence across the telecom valu
e chain.
Starting with the major acquisition of Hughes Tele.com (India) Limited [now rena
med Tata Teleservices (Maharashtra) Limited] in December 2002 the company swung
into an expansion mode. With the total investment of Rs.19,924 Crore, Tata Teles
ervices has created a pan India presence spread across 20 circles that includes
Andhra Pradesh, Chennai, Gujarat, Karnataka, Delhi, Maharashtra, Mumbai, Tamil N
adu, Orissa, Bihar, Rajasthan, Punjab, Haryana, Himachal Pradesh, Uttar Pradesh
(E), Uttar Pradesh (W), Kerala, Kolkata, Madhya Pradesh and West Bengal. Tata Te
leservices has a strong workforce of 6000. In addition, TTSL has created more th
an 20,000 jobs, which will include 10,000 indirect jobs through outsourcing of i
ts manpower needs. Today, Tata Teleservices Limited along with Tata Teleservices
(Maharashtra) Limited serves over 21 million customers in over 4000 towns. With
an ambitious rollout plan both within existing circles and across new circles,
Tata Teleservices offers world-class technology and user-friendly services in 20
circles.
TTML Organization
Tata Teleservices Maharashtra Limited (TTML) spearheads the Tata Group’s presenc
e in the Indian telecom sector by being the premier telecommunication service pr
ovider, licensed, to provide services in Maharashtra (including Mumbai) and Goa.
Formerly Hughes Tele.com (India) ltd., the company was renamed to Tata Teleserv
ices Maharashtra Ltd subsequent to the acquisition of 70.83% equity shareholding
by TATA Group in December 2002. The company’s shares are traded on the Bombay S
tock Exchange (BSE) and the National Stock Exchange (NSE). Tata communications L
td. unites the industry and market expertise VSNL, VSNL international, Teleglobe
, Tata Indicom Enterprise Business Unit, VGSL and CIPRIS to become the leading i
ntegrated provider of telecommunications solutions. The global reach and industr
y expertise of Tata communications drives and delivers a new world of communicat
ions. The company leverages its Tata Global Network, vertical intelligence and l
eadership immerging markets to deliver value-driven, globally managed solutions.
Vodafone
Vodafone, the world’s leading international mobile communications company, has f
ully arrived in India brand will be lunched in India from 21st September onwards
. The popular and endearing brand, Hutch, will be transitioned to Vodafone acros
s India. This marks a significant chapter in the evolutic brand change over the
next few weeks will be unveiled nationally through a high profile campaign cover
ing all important media. Vodafone, the world’s leading mobile telecommunication
company, completed the acquisition of Hutchison Essar in May 2007. Asim Ghosh, m
anaging director, Vodafone Essar, said “We have had a great innings as Hutch in
India and today marks a new begin that created Hutch, but an acceleration into t
he
future with Vodafone’s global expertise..” the Vodafone mission is to be the com
munications leader in an increasingly connected world – enriching customers live
s, helping increased by delivering their total communication needs.
About Vodafone Essar Limited:

Vodafone Essar in India is a subsidiary of Vodafone Group plc and commenced oper
ations in 1994 when its predecessor Hutchison tele Vodafone Essar now has operat
ions in 16 circles covering 86% of India’s mobile customer base, with over 34.1
million customers. Over the year, Vodafone Essar, under the hutch brand, has bee
n named the Most Respected Telecom Company, the Best Mobile sender effective adv
ertiser of the year. Vodafone is the world’s leading international mobile commun
ications company.
It now has operation network with over 200 million customers worldwide. Vodafone
has partnered with the Essar Group as its principal joint venture partner. The
Essar Group is a diversified business corporation with interests spanning the ma
nufacturing and service sectors like steel, energy, construction. The group has
an asset base of over Rs.400 billion and employer over 20,000 people.
BSNL
Bharat Sanchar Nigam Ltd. formed in October, 2000, is World’s 7th largest Teleco
mmunications Company providing comprehensive range of telecom services in India:
Wire line, CDMA mobile, GSM Mobile, Internet, Broadband, Carrier service, MPLS-
VPN, VSAT, VolP services, IN Services etc. Within a span of five years it has be
come one of the largest public sector units in India.
BSNL has installed Quality Telecom Network in the country and now focusing on im
proving it, expanding the network, introduces 3g new telecom services with ICT a
pplications in villages and wining customer’s confidence. Today, it has about 47
.3 million line basic telephones. capacity, 4 million WLL capacity, 20.1 million
GSM capacity, more than 37382 fixed exchanges, 18000 BTS, 287 Satellite Station
s, 480196 km of OFC Cable, 63730 km of Microwave Network connecting 602 District
s, 7330 cities/towns and 5:5 Lakh villages. BSNL is the only service provider, m
aking focused efforts and planned initiatives to bridge the Rural-Urban Digital
Divide ICT sector. In fact there is no telecom operator in the country to beat i
ts reach with its wide network giving services in every nook and corner of count
ry and operates across India except Delhi and Mumbai. Whether it is inaccessible
areas of Siachen glacier and North-eastern region of the country, BSNL serves i
ts customers with its bouquet of telecom services. BSNL is number one operator o
f India in all services in its license area. The company offers vide ranging and
most transparent tariff schemes designed to suite every customer.
BSNL cellular service, Cellone, has more than 17.8 million cellular customers, g
arnering 24 percent of all mobile users as its subscribers. That means that almo
st every fourth mobile user in the country has a BSNL connection. In basic servi
ces, BSNL is miles ahead of its rivals, with 35.1 million basic phone subscriber
s, that is, 85 percent share of the subscriber base and 92 percent share in reve
nue terms. BSNL has more than 2.5 million WLL subscribers and 2.4 million intern
et customers who access internet through various modes namely, Dial-Up, Leased L
ine, DIAS, Account Less Internet (CLI). BSNL has been adjudged as the number one
ISP in the country. BSNL has set up a world class multi-gigabit, multi-protocol
convergent IP infrastructure that provides convergent services like voice, data
and video through the same Backbone and Broadband Access Network. At present th
ere are 0.6 million Data One broadband customers. The company has vast experienc
e in Planning, Installation, network integrating and maintenance of Switching an
d Transmission Networks and also has a world class ISO 9000m certified telecom t
raining institute.
Scaling new heights of success, the present turnover of BSNL is more than Rs.351
, 820 million (US $8 billion) with net profit to the tune of Rs.99, 390 million
(US $2.26 billion) for last financial year. The infrastructure asset on telephon
e alone is worth about Rs.630, 000 million (US $14.37 billion). BSNL plans to ex
pand its customer base from present 47 million lines to 125 million lines by Dec
ember 2007 and infrastructure investment plan to the tune of Rs.733 crores (US $
16.67 million).
TATA DOCOMO
Tata DOCOMO is Tata Teleservices Limited s (TTSL) telecom service on the GSM pla
tform-arising out of the Tata Group s strategic alliance with Japanese telecom m
ajor NTT DOCOMO in November 2008. Tata Teleservices has received a pan-India lic
ense to operate GSM telecom services, under the brand Tata DOCOMO and has also b
een allotted spectrum in 18 telecom Circles. TTSL and has already rolled out its
services in various circles.
The launch of the Tata DOCOMO brand marks a significant milestone in the Indian
telecom landscape, as it stands to redefine the very face of telecoms in India.
Tokyo-based NTT DOCOMO is one of the world s leading mobile operators-in the Jap
anese market, the company is clearly the preferred mobile phone service provider
in Japan with a 50 per cent market share.
NTT DOCOMO has played a major role in the evolution of mobile telecommunications
through its development of cutting-edge technologies and services. Over the yea
rs, technologists at DOCOMO have defined industry benchmarks like 3G technology,
as also products and services like the i-modeTM, mobile payment and a plethora
of lifestyle-enhancing applications. Today, while most of the rest of the indust
ry is only beginning to talk of LTE technology and its possible applications, DO
COMO has already started conducting LTE trials in physical geographies, not just
inside laboratories!
DOCOMO is also a global leader in the VAS (Value-Added Services) space, both in
terms of services and handset designs, particularly integrating services at the
platform stage. The Tata Group-NTT DOCOMO partnership will see offerings such as
these being introduced in the Indian market under the Tata DOCOMO brand.
Tata DOCOMO has also set up a Business and Technology Cooperation Committee, co
mprising of senior personnel from both companies. The committee is responsible f
or the identification of key areas where the two companies will work together. D
OCOMO, the world s leading mobile operator, will work closely with the Tata Tele
services Limited management and provide know-how on helping the company develop
its GSM business.
Despite being a late entrant, Tata Indicom, TTSL s CDMA brand, has already estab
lished its presence and is the fastest-growing pan-India operator. Incorporated
in 1996, Tata Teleservices Limited is the pioneer of the CDMA 1x technology plat
form in India. Today, Tata Teleservices Limited, along with Tata Teleservices (M
aharashtra) Ltd, serves over 37 million customers in more than 320,000 towns and
villages across the country offering a wide range of telephony services includi
ng Mobile Services, Wireless Desktop Phones, Public Booth Telephony and Wire-lin
e Services.
VIRGIN MOBILE
Virgin is a leading branded venture capital organisation and is one of the world
s most recognised and respected brands. Conceived in 1970 by Sir Richard Branso
n, the Virgin Group has gone on to grow very successful businesses in sectors ra
nging from mobile telephony to transportation, travel, financial services, media
, music and fitness.
Virgin has created more than 200 branded companies worldwide, employing approxim
ately 50,000 people, in 29 countries. Global branded revenues in 2008 exceeded £
11 billion (approx. US$17 billion).
DATA ANALYSIS , INTERPRETATION AND FINDINGS
CONSUMER PREFERENCE TOWARDS CELL PHONE

SERVICE PROVIDERS
S.NO NAME OF THE
CELLULAR
SERVICE
PROVIDER NUMBER OF
RESPONDENTS PERCENTAGE
OF
RESPONDENTS
1 AIRCEL 03 10%
2 AIRTEL 08 27%
3 TATA DOCOMO 02 7%
4 RELIANCE 02 7%
5 MTNL 01 3%
6 VODAFONE 02 7%
7 IDEA 01 3%
8 VIRGIN 01 3%
9 LOOP 06 20%
10 TATA INDICOM 04 13%
TOTAL 30 100
CONSUMER PREFERENCE TOWARDS CELLPHONE SERVICE PROVIDERS
CONSUMER’S PREFERENCE TOWARDS CELL PHONE SERVICE PROVIDERS ON THE BASIS OF AGE G
ROUP
SR.NO NAME
OF
CELLUL-AR
SERVICE
PROVIDE-R
UPTO 25 YEARS
25-35 YEARS
35-55 YEARS
MORE THAN 55
YEARS
TOTAL
NO.
OF RESP
OND
ENTS %
OF RESP
OND
ENTS NO.
OF RESP
OND
ENTS %
OF RESP
OND
ENTS NO.
OF RESP
OND
ENTS %
OF RESP
OND
ENTS NO.
OF RESP
OND
ENTS %
OF RESP
OND
ENTS NO.
OF RESP
OND
ENTS %
OF RESP
OND
ENTS
1 AIRTEL 3 10% 4 13% 1 4% 0 0
8 27
2 AIRCEL 3 10% 0 0 0 0 0 0
3 10
3 TATA DOCO 0 0 2 7% 0 0 0
0 2 7
4 VODAFONE 1 3.5% 1 3.5% 0 0 0
0 2 7
5 TATA INDICOM 0 0 2 6.5% 2 6.5% 0
0 4 13
6 RELAINCE 0 0 0 0 1 3.5% 1
3.5% 2 7
7 IDEA 1 3% 0 0 0 0 0 0
1 3
8 LOOP 3 10% 3 10%
6 20
9 MTNL 1 3%
1 3
10 VIRGIN 1 3%
1 3
Continue--
INFERENCE:
Among respondents up to 25 years of age group, majority of them (i.e. 27%) are
using AIRTEL followed by AIRCEL users (10%).
Consumers in the age group of 25 – 35 years 13% of respondents mostly prefer A
IRTEL and 7% of the respondents are using TATA DOCOMO
of customers, who are in the age group of 35 – 55 years are using TATA INDICOM
.
In (above – 55 years) 33.33% respondents are using Airtel and 3.5% of respond
ents are using Reliance.
CONSUMER’S PREFERENCE TOWARDS CELL PHONE

SERVICE PROVIDERS ON THE BASIS OF AGE GROUP
COMPOSITION OF RESPONDENTS ON THE BASIS OF

MARITAL STATUS
SR.NO MARITAL
STATUS
NUMBER OF
RESPONDENTS
PERCENTAGE
OF
RESPONDENTS
1 MARRIED 5 17
2 UNMARRIED 25 83
TOTAL
INFERENCE:
The married respondents using mobile connections are about 17%, and the unmarrie
d respondents using mobile connections are about 83%.
COMPOSITION OF RESPONDENTS ON THE BASIS OF MARITAL

STATUS

EDUCATION QUALIFICATION
SR.NO EDUCATION
QUALIFICATION NO.RESPONDENT % OF RESP-
ONDENTS
1 UNDERGRADUATE 5 17
2 GRADUATE 5 17
3 POST GRADUATE 15 50
4 PROFESSIONAL 5 17
TOTAL 30 100
INFERENCE:
The majority of the respondents 50% (POST GRADUATION) are Using mobile connectio
ns and 17% (undergraduates),17% Using graduate respondents are using mobile conn
ections 17 % Using professional
EDUCATION QUALIFICATION

OCCUPATION
SR.NO OCCUPATION
NUMBER OF
RESPONDENTS
PERCENTAGE
OF
RESPONDENTS
1 BUSINESS
5 17
2 PROFESSIONAL
5 17
3 EMPLOYEE
5 17
4 HOME MAKER
5 17
5 STUDENT
10 33
TOTAL 30 100
INFERENCE:
The Student are using mobile connections in 33.33% and the house maker are using
mobile connections in 17% only.
COMPOSITION OF RESPONDENTS ON THE BASIS OF OCCUPATION
COMPOSITION OF RESPONDENTS ON THE BASIS OF INCOME (PER MONTH)
S.NO INCOME NUMBER OF

RESPONDENTS PERCENTAGE
OF
RESPONDENTS
1 BELOW 5000 10 33
2 BETWEEN 5000-
10000 5 17
3 BETWEEN 10000-
15000 5 17
4 BETWEEN 15000-
20000 7 23
5 ABOVE 20000 3 10
TOTAL 30
COMPOSITION OF RESPONDENTS ON THE BASIS OF INCOME
PER(MONTH)
TABLE SHOWING VARIOUS FACTORS INDUCING TO

PURCHASE THE MOBILE CONNECTIONS
SR.NO INFLUENCING
FACTOR NUMBER OF RESPONDENTS PERCENTAGE OF RESPONDENTS
1 FAMILY
MEMBER 5 17
2 NEIGHBOURS 5 17
3 RELATIONS 5 17
4 FRIENDS 10 33
5 ADVERTISEMENT 00 00
6 DEALERS 5 17
7 OTHERS 0 00
TOTAL 30 100
INFERENCE:
On the basis of purchasing the cellular connections 33.% of the respondents are
induced by their friends, and neighbors have the least effect on the respondents
(17%) in inducing them to buy a particular mobile connection.
TABLE SHOWING VARIOUS FACTORS INDUCING TO

PURCHASE THE MOBILE CONNECTIONS

PURPOSE OF PURCHASE OF THE CELL CONNECTIONS
SR.NO PURPOSE NO.RESPONDENTS PERCENTAGE OF RESPONDENTS

1 FOR BUSINESS 10 33
2 FOR PERSONAL 20 67
TOTAL 30 100
INFERENCE:
It can be inferred from here that 33.% of the respondents are using their cellul
arconnection for their business, and 67.% of the respondents are using cellular
connection for their personal usage.

PURPOSE OF PURCHASE OF THE CELL CONNECTIONS

USEFULNESS OF MOBILE CONNECTIONS
SR.NO USAGE NUMBER OF

RESPONDENT PERCENTAGE
OF RESPONDENT
1 INCOMING 0 0
2 OUTGOING 0 0
3 BOTH 28 93
4 SMS 0 0
5 VAS 2 7
TOTAL 30 0
INFERENCE:
About 93% of the respondents are using cell connections for incoming and
Outgoing both, but only 7% of respondents are only using cell connections for VA
S.
USEFULNESS OF MOBILE CONNECTIONS
INFLUENCING FACTORS TO PURCHASE THE CELL PHONE

(ANOTHER VIEW)
SR.NO FACTORS NUMBER OF RESPONDENT %OF RESPONDENTS

1 BRAND IMAGE 10 33
2 AVAILABILTY 10 33
3 CUSTMER CARESERVICE 5 17
4 SERVICE CHARGES 5 17
TOTAL
INFERENCE:
33% of respondents are purchasing the particular service by its brand image, and
17.% of respondents are choosing the particular service provider by their servi
ce charges.
FACTORS INFLUENCING TO PURCHASE A PARTICULAR MOBILE CONNECTION
CONSUMER’S SATISFACTION LEVEL ON THE BASIS OF PERFORMACE OF THE MOBILE CONNECTI

ON SEVICE PROVIDERS
SR.NO SATISFACTION
LEVEL
HIGE SATISFACTORY
SATISFACTORY NON
SATISFACTORY TOTAL
NO.RESP
% OF RESPON
NO.RESP
% OF RESPON
NO.RESP
% OF RESPON
NO.RESPOND %
RES
PONDENT
1 PRICE 20
67 10 33 30
2 PERFORMANCE
20
67 10 33 30
3 SCHEMES
20 67 00 00 10 33 30
4 PERIODICAL OFFERS
20
67 0 0 10 33 30
5 OUT GOING CALLS
20
67 10 33 30
CONSUMER’S SATISFACTION LEVEL ON THE BASIS OF PERFORMACE OF THE MOBILE CONNECTI

ON SEVICE PROVIDERS
CONSUMER’S ATTITUDE TOWARDS THE IMPORTANCE OF HAVING A MOBILE CONNECTION
SR.NO NATURE NUMBER OF RESPONDENTS PERCENTAGE

OF RESPONDENTS
1 NECESSITY 20 67
2 STATUS 4 13
3 LUXURY 0 0
4 COMPLUSION 6 20
TOATAL
INFERENCE:
67.% of the respondents are states that mobile connections are necessity, and 13
% of respondents are only states that mobile connections are Status.
PREFERANCE TOWARDS PREPAID AND POST PAID
SR.NO RESPONDENTS % OF RESPONDENTS

PREPAID 23 76%
POST PAID 7 24%
AWARENESS OF DETAILS RELATING TO MOBLIE CONNECTION
SR.NO AWARE NEUTRAL UNAWARE
SCHEME 28 2 0
BALANCE OF TALK CHARGES 30 0 0
PERIODICAL OFFERS 10 5 15
COMPOSITION OF DIFFICULTIES PHONE CONNECTION (prepaid/postpaid)

YES NO
15 15
SUGGESTIONS
Tata Indicom and Vodafone should try to expand their customer’s networ
k.
RELAINCE and MNTL should try to attract the young people. (Up to25yea
rs)
Aircel, Tata Indicom and Vodafone should try to attract old peoples al
so.
All the service providers are made good advertisements for their servi
ce. Because, advertisements are take little part for influencing the consumers.
All the service providers should try to increase post paid users.
75% of the peoples are unaware about the various services rendered by
their service provider. So the service providers should try to make awareness o
f their customer services to their customers.
Reliance, Tata Indicom should attract the customers by reducing their
price.
Virgin mobile , Reliance customers are highly dissatisfied about the p
erformance of the service provider. So they should try to add some advanced feat
ures towards their services.
Tata Indicom and Vodafone should give periodical offers to their custo
mers.
Tata Indicom should increase their network strength to attract more c
ustomers.
CONCLUSION
India has one of the world’s largest telecommunication networks. The telecom sto
ry continues to be the best evidence of the efficacy of the reforms process. In
just six years, the number of mobile subscribers has gone from just about one mi
llion to 100 million, a subscriber base that only four other countries China, th
e US, Japan and Russia can boast of. None can doubt the correlation between this
explosive growth in numbers and the steep decline in the cost of the mobile pho
ne and of its usage. Effective tariffs have dropped from over Rs.14 a minute to
Re 1, bringing the phone within reach of people even below the middle-class. The
Government may have, therefore, landed itself a winner in the mobile phone, but
the task of taking telecom to the other 90 per cent of the population will call
for even greater innovation in policymaking, technology and marketing. Still th
ree-fourths of the land mass is not illuminated by a cellular signal and the pri
ce of the instrument is beyond the reach of a substantial section of the populat
ion let alone the charges for its use. These issues, of course, can be resolved
by decisive policy action, such as a creative use of the Universal Services Obli
gation fund that now has over Rs.70 billion, releasing adequate spectrum to oper
ators in the metros, and a proactive investment policy that invites many more eq
uipment manufacturers to set up base in this country.
The road for India achieving the top most position in telecommunication is no lo
nger a dream as India is nearing China in all aspects in few years India will ov
er power all countries and achieve its target of top most position in telecom in
dustry.
ANNEXURE
QUESTIONNAIRE
Dear Sir/Madam,
I am conducting a survey on consumer (existing/new) behavior during taking new m
obile-connections. Kindly spare some of your valuable time to go through the que
stionnaire & give your view on this topic. The information provided by you would
be kept confidential & only be used for improving customer service.Personal det
ails (Put tick mark (√) in appropriate box.)
Name __________________________
Age □ 0-25yrs □ 25-35yrs □ 35-55yrs □ > 55yr.
Gender: □ Male □ Female
Marital status: married □ unmarried □
Occupation: _____________________
Qualification: Undergraduate □ Graduate □ Post-graduate □
Professional
Specify) Income group Monthly income
a) Below 5000 b) Between 5000-10000
c). Between 10000-15000 d). Between 15000-20000
1. Please name the cellular service/connection you are currently using

a) Airtel
b) Tata Indicom
c) Vodafone
d) virgin mobile
e) Reliance Comm
f) Aircel
g) MTNl
h) Idea
i) Tata docomo
j) loop
2. Who influenced you to by the particular cell phone service provider?
a) Family Member
b) Neighbors
c) Relations
d) Friends
e) Advertisement
f) Dealers
g) Others
3. Why do you buy the mobile connection?

a) For business
b) For personal
4. For which purpose are you using your mobile connection (Service Provider) mai
nly for?
a) Incoming
b) Outgoing
c) Both
d) SMS Messaging
e) V-A-S
5. What factor influenced you to decide your Cellular service provider?

a)Brand Image
b)Availability
c)Customer care service
d)Service charges
6. Satisfaction level about your cell phone service provider?

1. Highly Satisfied 2.Satisfied 3.Non-Satisfied
a)Price □ □ □
b) Performance □ □ □
c) Schemes □ □ □
d) Periodical Offers □ □ □
e) Out going call Charges □ □ □
7. You consider owing a mobile connection as a -

a) Necessity
b) Status
c) Luxury
d) Compulsion
8. Which type of scheme is most preferable by you?

a) Prepaid
b) Postpaid
9. Are you aware of the following details relating in your mobile connection (P
re / Postpaid connection)
1.Aware 2.Neutral 3.Unaware
a) Scheme □ □ □
b) Balance of Talk charges □ □ □
c) Periodical offers □ □ □
10. Do you face any difficulty in your cell phone connection?

a) Yes □
b) No □
11. What is your valuable suggestion / opinion about your cell

phone service provider ?
12. If you are a existing customer of Tata Indicom then which type of value adde
d services do you want to incorporate in Tata Indicom
____________________________________________________________________
13. As per your opinion how can you improve the existing brand you are using? An
y recommendations for Tata Indicom if you have to.
________________________________________________________________________________
______________
______________________________________________________________________________
BIBLIOGRAPHY -
BOOKS-
• Philip Kotler, Marketing Management, 11th Ed, Princeton-Hall India 2003
• Marketing Research-Naresh .K.Malhotra
• Business Research methods : ICMR Publication
• Marketing Management - V.S. Ramaswamy,
• Research Methodology - C.R.Kothari
• Operation Research – Vittal
• Business Week
• The Times
• Market Areas Analysis (Author: Dr. Jean-Paul Rodriguez).
JOURNALS-
• Business India
• 4Ps of Marketing
INTERNET SOURCE-
• http: www.google.com
• http:www.wikipedia.org
• http: www.yahoo.com
• http: www.economicstimes.indiatimes.com
• http :www.thehindubusinessline.com
• www.tataindicom.com
ARTICLES
HISTORY OF CELLULAR SERVICE PROVIDERS -----BY THOMAS WILLIAMS
The Evolution of Wireless Telephone Service in the United States

The Wireless Industry Trade Association (CTIA) estimates that there are nearly 2
35,000,000 wireless subscribers in the United States as of today on its web site
posting. That is quite an accomplishment for an industry that started less than
25 years ago.
This wireless telephone evolution was really started by AT&T prior to its divest
iture. This narrative is not about how great and wonderful AT&T was, but rather
about how the wireless industry got its start. At the beginning, it was called t
he cellular mobile telephone industry and what follows tells the real story of h
ow it began, which company was first to launch service and how it evolved commer
cially over the past 24 years.
AT&T s Bell Telephone Laboratories was one of the early inventors of Cellular Te
lephone Service in the United States. AT&T had been working on the concept of ce
llular telephone service or "Advanced Mobile Phone Service" (AMPS) since the mid
-sixties.
AT&T was developing cellular mobile telephone service to replace Mobile Telephon
e Service (MTS) and Improved Mobile Telephone Service (IMTS) as both of these ex
isting technologies for mobile telephone service could not provide enough call c
apacity to meet the demands of the market place for mobile telephone service.
AT&T through its Regional Telephone Company, Illinois Bell Telephone, conducted
a market trial of its new cellular service called AMPS in the late 70 s and earl
y 80 s in Chicago, Illinois. AT&T enlisted the aid of Motorola Corporation and O
KI Data Corporation to provide the in-car mobile telephone units for the service
trial that would be open to 3000 corporate users from the Chicago Region s Fort
une 500 Companies.
The original trial system built by AT&T consisted of three (3) radio towers loca
ted in Chicago that were linked to a single mobile telephone switching office (M
TSO) that was located in a suburb of Chicago. The MTSO was a call processing swi
tch with an integrated computer that was able to track a mobile originated call
being handled by one of the three radio towers, that we call cell sites today, a
nd hand the call to another of the three towers when a vehicle with an AMPS tele
phone was moving from one geographic area to another geographic area covered by
one of the three test radio towers.
AT&T deemed the test successful and the FCC granted licenses for the service to
AT&T in all of the Metropolitan Statistical Areas (MSA s) served by AT&T s Bell
Operating Companies.
Since AT&T was being sued by the Justice Department for anti-competitive behavio
r in the market place during the market test, other non-AT&T radio service provi
ders were able to convince the Federal Government that they too should be allowe
d to provide cellular mobile telephone service in markets awarded to AT&T s Bell
Operating Companies. Further, after allowing other companies to provide cellula
r mobile phone service in competition with AT&T, the FCC ruled that all areas of
the country, even those not served by AT&T s operating companies would be open
to competition. There were now 306 MSA s within the United States were two compa
nies in each MSA were to be granted licenses to provide cellular service; a wire
line company and a non-wireline company.
The original cellular radio systems that were to be deployed by AT&T, its compet
itors and other independent telephone companies, were designed to operate utiliz
ing analog radio technology and were restricted to radio spectrum within the 800
MHZ band range.
Upon reaching an agreement with the U.S. Justice Department, AT&T agreed to dive
st itself of all of its local Bell Operating Companies. These local Bell Operati
ng Companies were allowed by the Justice Department to Regionalize and thus Regi
onal Bell Operating Companies (RBOC s) were formed in 1982. Included in the Dive
sture Agreement was the requirement for AT&T to transfer its cellular service li
censes to the newly incorporated Regional Bell Operating Companies. The Regional
Bell Operating Company for the Midwest was known as Ameritech.
Ameritech assumed ownership of the original AT&T market trial cellular system in
Chicago when the AT&T license for cellular service was transferred to the newly
formed RBOC.
Throughout 1982 and for most of 1983, Ameritech expanded the original market tri
al system to serve the metropolitan Chicago area. On October 13, 1983, Ameritech
, the wireline company, launched the country s first commercial cellular radio s
ystem with nine cell sites and was in business to begin offering service under t
he Ameritech Mobile brand. Since a portion of the service area for the new syste
m was in an area where local phone service was provided by an independent teleph
one company, known as CenTel, CenTel became a partner in the launch system.
Shortly after Ameritech launched its commercial system, a consortium of media co
mpanies in the Washington D.C. area launched their cellular system, branded as C
ellular One, the non-wireline company of the 80 s, systems were being built and
launched in just about every major city in the United States. The list of compan
ies building and launching systems was long; the RBOC s; Ameritech, Bell Atlanti
c, Pacific Telesys, US West, South Western Bell, Bell South, Nynex, The Independ
ents; Contel, GTE, CenTel, TDS, AllTel, Century, the non-wireline companies; Cel
lular One, Mc Caw, MCI, CCI, Comcast, large media consortiums and others too num
erous to list.
While systems were being built in the major cities, the FCC begin to offer cellu
lar mobile telephone service licenses for rural America via auction to anyone wi
shing to serve rural America. These rural licenses, similar to the licenses awar
ded in the MSA s would be awarded to a wireline and non-wireline company. By the
early 90 s all areas called Rural Service Areas or RSA s had at least one licen
see. Companies such as Dobson, Centennial, the RBOC s, Midwest, Pacific Telecom,
Thumb Cellular, Illinois Valley, and others were all in the rush to build and l
aunch service. The last RSA to receive cellular service was in Barrow, Alaska. B
arrow, Alaska was located in the last RSA to receive service. Service was launch
ed in February 1993. The licensee providing service to that RSA was a partnershi
p among the Native American peoples of northern Alaska and Pacific Telecom Cellu
lar.
During the initial build out of the cellular systems throughout the United State
s, the manufactures supporting the new Cellular Industry were busy developing ne
w cellular telephones and new mobile telephone switching equipment. The first po
rtable handheld cellular telephone was introduced by Motorola in 1984, briefcase
cellular phones and transportable cellular telephones were available from OKI,
Panasonic, and Mitsubishi. General Electric introduced its line of car phones. A
udiovox and Nokia introduced smaller portable handsets. Motorola introduced its
new "Flip" Phone called the Star-Tac in 1989. With each passing year, new callin
g features were available; voice mail, three way calling, call forwarding from s
witch manufacturers such as AT&T information System, Nokia, Motorola, Northern T
elecom, Ericsson and Alcatel. Cellular Mobile Phone Service had arrived in the U
nited States.
But this was just the beginning; the communications act of 1996 would write the
next chapter for the evolution of the wireless telephone industry in the United
States. More on that chapter later!
Telecom Sector in India: Vision 2020
Manas Bhattacharya*, IES

(Deputy Director General (Finance), Department of Telecommunications, Ministry o
f Communications & IT, Government of India)
Introduction
The purpose of this paper is to construct a vision of Indian telecom sector for
the year 2020, i.e., about two decades from now. Development being a continuous
process, the choice of the year 2020 is just an arbitrary division of time, a pr
e-defined time horizon to take stock of what is likely to be achieved.
Pre-portrayal of a stage of development in future requires understanding of the
process of change, the dynamics that set law of motion. In attempting to do so,
the present paper deciphers the recent past.
Process of change is often volatile and responsive to intervention and global ci
rcumstances impacting it. In such an inherently dynamic situation it is convenie
nt to assume that cross-country experiences incubate the most recent seeds of ch
ange. This is because countries at various stages of development encapsulate dev
elopmental experiences that occur with the passage of time.
The present paper isolates the agents of change based on international experienc
es and situates India in this development continuum. The agents of change, as ob
served from international perspective, have been broadly categorized into econom
ic structure, competition policy and technology. Economic reforms and liberaliza
tion have driven telecom sector through several transmission channels of which t
hese three categories are of major significance.
The paper, as it unfolds, is divided into six sections. Section 1 gives a brief
account of the era of competition that was heralded in Indian telecom sector and
the results achieved. Analysis of the results, particularly comparison with oth
er major countries intrigued further discussions on economic structure, synergy
between telecom and IT, competition policy and technology in sections 2,3.4 and
5 respectively. Logical extension of the arguments, as they developed, extended
to a vision for 2020 in each of these sections. The paper concludes in section 6
.
The current policy configurations of India’s telecom sector have been listed in
the Appendix.
1. Reforms and Performance
India, like many other countries of the world, have adopted a gradual approach t
o telecom sector reform through selective privatization and managed competition
in different segments of the telecom market. To begin with, India introduced pri
vate competition in value-added services in 1992 followed by opening up of cellu
lar and basic services for local area to private competition. The Telecom Regula
tory Authority of India (TRAI) was constituted in 1997 as an independent regulat
or in this sector. Competition was also introduced in national long distance (NL
D) and international long distance (ILD) telephony at the start of the current d
ecade .
The current policy stance affecting telecom sector in India is presented in the
Appendix. Two state-owned public sector incumbents with a large existing subscri
ber base dominate the fixed line service. As on December 31, 2001, the two Publi
c Sector Enterprises (PSEs), BSNL and MTNL owned 34.73 million Direct Exchange
Lines (DELs) against 0.45 million privately owned DELs. These two PSEs were allo
wed belated entry into the cellular segment in the beginning of the present deca
de. Consequently, their cellular subscriber base is tiny compared to the private
operators. Out of 7.3 million cellular subscribers in the country in June 2002,
they had only 0.2 million subscribers .
Despite asymmetry in initial market endowments between public sector incumbents
and private operators, the act of opening up of the market unleashed dynamism th
at was hitherto latent in the sector. This is evident from a number of performan
ce indicators. In terms of overall size of main telephone lines in operation, I
ndia ranked 14th in the world in 1995. The rank improved to 7th position in 2001
(Table 1).
Table 1: Top 14 countries in the world in terms of number of main telephone line
s in operation
Country No. of lines in 1995
(‘000) Ranks (1995) No. of lines in 2001
(‘000) Ranks (2001)
USA 159,735.2 1 190,000.0 1
Japan 62,292.0 2 76,000.0 3
Germany 42,000.0 3 52,280.0 4
China 40,705.7 4 179,034.0 2
France 32,400 5 34,032.9 9
UK 29,411.4 6 34,710.0 8
Russia 25,018.9 7 35,700.0 6
Italy 24,845.0 8 27,303.0 10
Korea, Rep. 18,600.0 9 22,724.7 11
Canada 17,567.0 10 20,319.3 12
Spain 15,095.4 11 17,427.0 14
Brazil 13,263.0 12 37,430.8 5
Turkey 13,215.7 13 18,900.9 13
India 11,978.0 14 34,732.1 7
Source: World Telecommunication Development Report 2002, ITU
Network expansion in India was accompanied by an increase in productivity of tel
ecom staff measured in terms of ratio of number of main telephone lines in opera
tion to total number of full time telecom staff (Table 2).
One way of looking at the welfare gains to subscribers is to watch the trend in
prices for telecom services, whether such prices came down in the competitive re
gime. What consumer ultimately pays includes rental as well as telecom tariffs.
Because of complications involved in summarizing differential rates applicable t
o peak and non-peak hours, a convenient proxy for the change in telecom prices c
ould be constructed in terms of observed trend in revenue earned from telephone
services at constant prices expressed as a ratio of number of main telephone lin
es in operation. Table 2 shows a significant decline in this ratio since 1995 in
Indian fixed line segment. It may be noted that the National Telecom Policy was
announced in May 1994. Steps were intensified to introduce private competition
in the basic and cellular services thereafter. The beginning of the declining tr
end in per line revenue at constant prices coincided with the period, which witn
essed emergence of competitive pressure in the sector.
Table 2: Trend in productivity and price
Year Number of main telephone lines in operation per full-time telecom staff
Telephone service revenue at constant prices (CPI: 1995=100) per main telephone
line in operation
(Rs. ‘000)
1991 15.58 9.13
1992 17.65 10.25
1993 20.32 11.04
1994 23.38 10.17
1995 28.45 9.23
1996 33.90 6.12
1997 41.89 5.62
1998 50.93 4.92
1999 62.97 4.24
Source: Computed from the data published in the Year book of Statistics: Telecom
munication Services, 1991-2000, ITU
Table 3 shows the long run trend in supply and demand of DELs. The number of DEL
s in operation (i.e., main line in operation) has been taken as supply whereas d
emand has been computed by adding the number of subscribers in the waiting list
to the number of DELs in operation. However, it needs to be kept in mind that th
e number in the waiting list, in certain cases, is unlikely to reflect potential
demand for telecom services in the economy. The market potential may be much mo
re than what is revealed through waiting list because the number in the waiting
list reveals demand registered in those areas where telecommunication facilities
are available and reasonable expectations exist for demand to be fulfilled. In
the areas where telecom infrastructure is not adequate, demand may not get regi
stered at all and remain suppressed.
Table 3: DEL: Supply and demand
(millions)
Year ending
March 31 Direct Exchange Lines
(DELs) Waiting List Demand
1981 2.15 0.45 2.6
1983 2.47 0.66 3.13
1985 2.90 0.84 3.74
1987 3.49 1.12 4.61
1989 4.17 1.42 5.59
1991 5.07 1.96 7.03
1993 6.80 2.85 9.65
1995 9.80 2.15 11.95
1997 14.54 2.89 17.43
1999 21.59 1.98 23.57
2001 32.44 2.92 35.36
Source: Indian Telecommunication Statistics 2002, Ministry of Communications, Go
vernment of India.
The figure below shows an interesting phenomenon. Total demand tends to exceed s
upply by a margin, which does not get narrowed down as supply expands. It shows
that market for fixed line is supply constrained and demand tends to increase as
supply expands. The figure also reveals that there is significant growth in sup
ply of DEL in the 90s, the eventful decade of sectoral reforms. The growth momen
tum is sustained in the current decade with a positive supply gap.
Total demand
Waiting List
Del
Table 4 indicates tele-density for the countries included in Table 1 as measured

in terms of number of main lines per 100 inhabitants.
Table 4: Number of main telephone lines per 100 inhabitants
Country 1995 2001
USA 60.73 66.45
Japan 49.61 59.69
Germany 51.33 63.48
China 3.30 13.81
France 56.01 57.35
UK 50.18 57.78
Russia 16.91 24.33
Italy 43.33 47.06
Korea, Rep. 41.24 47.60
Canada 59.85 65.51
Spain 38.50 43.11
Brazil 8.51 21.69
Turkey 21.44 28.52
India 1.29 3.38
Source: World Telecommunication Development Report 2002, ITU
Above table indicates that despite phenomenal achievement in terms of network ex
pansion, the size of the population is responsible for India’s low tele-density
. A comparison between Table 1 and Table 4 reveals that countries with smaller n
etwork sizes than India are having much higher tele-densities. However, in terms
of total tele-density, i.e., the sum of fixed-lines and mobile subscribers per
100 inhabitants, India’s comparative ranking in the world improved from 160 in 1
990 to 145 in 2000, an improvement by 15 positions . Nevertheless, closing the d
igital divide in terms of tele-density remains a daunting task.
The present paper estimates that in order to attain the network size of USA in 2
001 India has to expand its number of operational telephone lines at a compound
annual growth rate (CAGR) of 23.44 per cent between 2002 and 2020. The correspon
ding growth rates to reach China and Japan’s levels are 23.06 per cent and 17.63
per cent respectively. Even that is not going to mean much in terms of tele-den
sities in comparison to most of the countries cited in Table 4. Assuming no chan
ge in India’s size of population (i.e., assuming population size to remain at 20
01 level of 1.03 billion), India’s tele-density will be 18.48 lines per 100 peop
le even if India’s network size reaches the level of USA. Considering the fact t
hat India’s DEL grew at a CAGR of 19.4 per cent during 1995-2000, significant ef
fort would be needed to step up growth rate above 23 per cent.
Understanding telecom growth prospect would require understanding of the sources
of growth --- what accounts for cross-country differences in growth experiences
. Countries do differ among themselves in respect of their economic structure, s
ectoral policies and technological changes. Assuming these three to be key drive
rs of growth it can be said that ‘Vision 2020’ of Indian telecom sector will be
shaped in an important way by the evolving economic structure, sectoral reforms
including competition policy and technology trend.
2. Economic Structure
It has been observed that ‘growth in the number of new telephone subscribers has
far exceeded the growth in the global economy’ in the last twenty years . This
shows that aggregate growth alone does not determine telecom expansion and there
may be need to look at composition of growth as well. However, influence of e
conomic structure on telecom expansion (or for that matter on achievable level o
f tele-density) does not find explicit consideration in today’s literature on te
lecom economics as much as the other two factors, i.e., competition and technolo
gy. One plausible reason could be because of the importance that has been attach
ed to income gap as a factor explaining digital divide. Moreover, income gap, by
itself subsumes differences in certain structural characteristics and therefore
diverts the focus of attention from structural gap to income gap . Proponents o
f ‘income determinism’ may stop short of addressing structural factors because o
f their primary concern regarding income transfer between the developed to the d
eveloping countries as the only way to address the problems of digital divide. S
tructural issues, on the other hand, are more pertinent to the believers of ‘lea
pfrogging’ capabilities of the countries who are on the wrong side of the divide
. It is for them that the present paper goes on to prove that the effectiveness
of direct promotion of telecommunications as a complementary policy to overall
macroeconomic reforms will be determined in an important way by how structural i
ssues in the economy are addressed.
In the first place, it is noteworthy that there are countries with per capita in
come less than that of India but with higher tele-density. As for instance, Boli
via had per capita income of US$ 2380 in 2000 compared to US$ 2390 for India. B
olivia’s tele-density was 6.05 in that year against 3.20 for India. Moldova had
a tele-density of 13.33 with a per capita income of US$ 2240. Georgia, with a p
er capita income of US$ 2470 had a much higher tele-density of 13.86. Though Ecu
ador had a little higher per capita income of US$ 2920 compared to India, tele-d
ensity was significantly higher at 10.00. It was also noted that these countries
had either more equitable income distribution than India (measured in terms of
percentage of population living on less than $2 a day) or had a higher weightage
of value added by the service sector in the Gross Domestic product (GDP) or bot
h.
A comparative picture of India vis-à-vis these countries in respect of the two a
foresaid characteristics are presented in Table 5.
Table 5: Structural characteristics and tele-density, 2000
Country Tele-density
(per 100 inhabitants) Per capita income
($ PPP) Percentage of population living on less than $2 a day Value added by t
he service sector in the Gross Domestic product (GDP)
(%)
Moldova 13.33 2240 38.4 53
Bolivia 6.05 2380 51.4 48
India 3.20 2390 41.4 46
Georgia 13.86 2470 Less than 2 52
Ecuador 10.00 2920 52.3 64
Source: (i) Year book of statistics, 1991-2000, ITU; (ii) World Development Repo
rt 2002.
In order to examine the generality with which such relationships manifest in a l
arger sample of countries, tele-density was regressed on percentage of populatio
n living on less than $2 a day and per capita income over a cross-section of 77
countries for the year 2000 to yield the following results:
Tele-density = 9.63 – 0.1563** (Percentage of population living on less than $2
a day) + 0.0019**(Per capita income)
R2 = 0.82;
** : Significant at 1%.
The result shows that income distribution has a much larger coefficient than per
capita income and therefore emphasizes the fact that telecom development strate
gy should have substantial equity component built into it.
To assess the significance of service sector in telecom development, tele-densit
y has been regressed on percentage contribution of value added by the service se
ctor in GDP over a cross-section of 115 countries for the year 2000. The followi
ng result was obtained:
Tele-density = - 31.54 + 0.9267** (Percentage contribution of value added by the
service sector in GDP)
R2 = 0.48;
** : Significant at 1%.
The result indicates a strong association between service sector growth and tele
com development implying that future telecom expansion will depend significantly
on the proliferation of services in the economy.
As a matter of strategy, it can be said that targeted intervention through acces
s promotion can be potentially instrumental in delivering growth with equity. Ac
cess promotion means expansion of telecommunication and therefore will cause gro
wth to occur . Consequently, a broad based access promotion strategy would lead
to more equitable growth.
The first step towards broad based access promotion in India was initiated in th
e eighties when Public Call Offices (PCOs) were given private franchises for bot
h domestic and long distance services. Total number of PCOs grew from 0.2 millio
n in 1993 to 0.9 million in 2001. The Eighth Plan (1992-97) targeted at provisio
n of Panchayat phones in 360,000 villages. Thrust on Universal Service Obligati
on (USO) as a part of broad based telecommunication development strategy began
with the National Telecom Policy of 1994 and was reinforced as one of the object
ives of the New Telecom Policy 1999 (NTP-99). The licenses for the basic service
s, for which open tenders were invited in January 1995,contained an obligatory p
rovision in the agreement for the private operators to provide 10 per cent of th
e DELs as Village Public Telephone (VPT). NTP-99 targeted complete rural coverag
e by the end of 2002 providing Village Public Telephones in all the 0.6 million
villages with emphasis on ‘availability, accessibility and affordability’ . By
the end of January 2001, 0.4 million villages have been covered. Share of rural
areas in total number of DELs in the country stood at about 22.6 per cent in Jan
uary 2002, increasing from 21.4 per cent in March 2001 . The trend is suggestive
of potential scope of expansion of telecommunication in the rural sector.
Though USO is mandatory for the basic service operators, other service providers
are also allowed to participate in it subject to technical feasibility. The sub
sidy element of the USO will be financed from a fund generated through Universal
Service Levy (USL), i.e., levy of certain percentage of license fees charged fr
om different service providers. As a follow up of NTP 99 and subsequent recommen
dations of the TRAI, The Universal Service Support Policy (USSP) came into effec
t from April 1, 2002 and the Department of Telecommunications (DOT) issued detai
led guidelines for implementation . Apart from expansion of VPTs, the guidelines
also envisaged upgradation of VPTs to Public Telecom and Information Centers (P
TICs) to provide data transmission facilities and installation of high speed PTI
Cs (HPTICs) in the Short Distance Charging Areas (SDCAs) with broadband access.
Allocation of subsidy will be to the bidder quoting lowest amount of subsidy, ch
osen through a multi-layered bidding process subject to a ceiling of the benchma
rk cost estimated by the DOT on the basis of efficiency criteria .
So far, the public sector incumbents have spearheaded expansion of rural telepho
ny with very little contribution by the private sector. By the end of December 3
1, 2001, out of 0.4 million villages, the private operators covered only 718 vil
lages and the rest was by the public sector.
Private sector presence is prolific in Public Call Offices (PCOs) and Internet K
iosks in the cities and towns . However, there are certain pilot projects in the
rural sector working to evolve cost effective wireless technological solutions
in partnership with local service providers. Many such projects have developed a
pplications based on local content and software in Indian languages and user-fri
endly icons for illiterate people .
Telecommunications have emerged as a springboard of ICT applications with econom
y-wide ramifications. There are plenty of anecdotal evidences to show that tele
com is improving life chances across the strata of the society tiding over the ‘
divide’. A whole range of information based industry and applications have come
up creating new sources of employment and earning with welfare enhancing conseq
uences for the wealthy and the poor. As a meta-technology, ICT has caused rapid
innovations to occur in all other areas of material sciences. As a fabric of inf
ormation society, ICT has improved access in the fields of education, healthcare
, governance and all aspects of business services. It has also improved the abil
ities of the poor to manage risks and mitigate vulnerabilities through provision
of timely information.
Vision 2020 is a vision of information society and knowledge economy built on th
e edifice of ICT. In India, the aggressive expansion of public sector telecommun
ications infrastructure in hitherto uncharted territories of geographically remo
te locations would unleash latent economic energies and market forces, which wil
l erode the very foundation of perceived lack of profitability of rural investme
nt among the private investors. Once this is achieved, Vision 2020 will be a vis
ion of wealthier and more equal society full of creativity, innovation and compe
tition.
3.Telecom and IT
The vision of telecommunications in 2020 is a vision of information society buil
t on an edifice where IT and telecommunications merge. Rapid technological conv
ergence has already implied a symbiotic overlap between the development strategi
es of IT and telecommunications. Part of today’s IT is ‘telecom writ large’, it
flourishes on the telecom-network and in turn permits modern day telecommunicati
ons to use sophisticated IT-software. Hardware is a common platform for both IT
and telecom.
There is a legacy vision derived from export-success of India’s software that ha
s given rise to optimism regarding India’s growing pre-eminence in global IT can
vas. Such a vision builds on a much larger vision of all round development of IT
that pervades wide cross-section of Indian economy and society. Deeper analysis
shows that there is need for a comprehensive IT development strategy to ensure
India’s durable presence in the global software market. As discussion in the sub
sequent paragraphs will show, ‘enclave’ type development of software with exclus
ive focus on export can not bring about desired benefits if such a strategy igno
res the linkages between export and the domestic market. Vision 2020, therefore,
is a much larger vision.
First, it is to be appreciated that foreign exchange contribution of software ex
port net of import of hardware is roughly fifty per cent . Net foreign exchange
contribution will increase if India is able to develop a strong base of hardware
.
Second, scrutiny of the structure of India’s software export vis-à-vis the emerg
ing dynamics of the global market reveals that India has marginal presence in th
e fastest growing segment of the global IT market consisting of software package
s and software products . India’s close competitors, on the other hand, have ach
ieved greater success through diversification of exports with software packages
. There is, therefore, need for India to climb value chain with more innovative
software products in the international market. This is possible when India is ab
le to broad-base the development of IT with a strong and large domestic market s
upporting innovation and its diffusion along with the growth of component manufa
cturing base. Appropriate synergy between the domestic and export market will be
key to enduring success of Indian IT sector in overseas market and development
of state-of-the art telecom infrastructure is a prerequisite to both.
Finally, development of human resources through IT education, training and skill
development is fundamental to the whole process.
Two important indicators of IT penetration in Indian market are Internet use and
availability of Personal Computers (PCs). There has been significant expansion
in both during the last decade (Table 6).
Table 6: Growth in availability of Personal Computers and estimated number of In
ternet users
Year Estimated number of Internet users Availability of Personal Compute
rs
1992 1,000 410,000
1993 2,000 560,000
1994 10,000 800,000
1995 250,000 1,200,000
1996 450,000 1,500,000
1997 700,000 2,000,000
1998 1,400,000 2,700,000
1999 2,800,000 3,300,000
2000 5,00,0000 4,600,000
Note: Data for 1991 on Internet users is not available. The series start from 19
92 because data on both is available from this year.
Source: Yearbook of statistics, 1991-2000, ITU
Despite impressive growth in the number of Internet users and availability of PC
s, India remains on the wrong side of the divide (Table 7). Number of users of I
nternet is still a negligible fraction of India’s total population. Per capita a
vailability of PC is also very low.
Table 7: Internet penetration and PC availability, 2001

Countries falling in different income categories Internet users per 10,00
0 inhabitants PCs per 100 inhabitants
Low income countries
Of which
India 62.21
68.16 0.59
0.58
Lower middle income countries 264.94 2.45
Upper middle income countries 992.66 8.24
High income countries 3992.87 37.31
Source: ITU, World Telecommunication Development Report 2002
Internet kiosks, telekiosks, telecottages and cybercafes have emerged in importa
nt roles in expanding community access to ICT popularizing IT among the masses a
nd promoting domestic market. However, their expansion crucially hinges on the g
rowth of telecommunications infrastructure. In India, a spectrum of technologies
has been unleashed to connect remote villages, which includes Wireless in Local
Loop (WLL), wireless cum wired technology developed by C-DOT , radio systems, s
witching systems of different capacities integrated with underground cables, Cor
Dect and medium capacity satellite systems. Besides, a number of small-scale ICT
initiatives is already at work in different parts of the country (Box 1). It is
envisaged that with the growth of telecom infrastructure such examples would mu
ltiply and create an information society in not so distant a future.
Box 1: Harbingers of information society
SARI: Sustainable Access in Rural India (SARI) is a joint initiative between MIT
Media Lab, Center for International Development at Harvard, IIT Chennai and the
I-Gyan Foundation. The project is located in northern Madurai district of Chenn
ai. It seeks to provide voice and Internet connections in 1000 villages with the
use of CorDect system. Apart from provision of a kiosk in each village, connect
ions will be provided in schools, colleges and primary health centers. The proje
ct also provides for interest free loans and easy installments for purchase of c
omputers and training support to technical personnel. Continuous evaluation of t
he socio economic impact of the project is a part of the initiative .
n-Logue: ‘n-Logue’ is a company incubated by a group of professionals in IIT Che
nnai under private initiative. The company offers wireless equipment, multimedia
computer equipped with software in Indian language and other accessories to set
up cost effective Internet kiosks in partnership with local service providers.
Such kiosks are coming up in Madhya Pradesh, Rajasthan and Tamil Nadu .
M.S. Swaminathan Research Foundation: This project is located in Pondicherry of
South India. Village Knowledge Centers have been established under this project
with dedicated web sites of locally relevant information. The Foundation also di
sseminates knowledge and information through wireless radios to rural communitie
s .
The Warana Wired Village Project: This is a collaborative project between the ce
ntral and the state government, located on the banks of river Warana in Maharash
tra. It operates distributive accounts system for the Warana sugarcane cooperati
ve.
The Gyandoot Project: A joint initiative of the district collector of Dhar distr
ict of Madhya Pradesh and the District Rural Development Agency (DRDA). More tha
n thirty Community Information Centers (known as ‘Soochanalaya’), one for a grou
p of villages, have been set up to provide information on market rates of agricu
ltural products, land records, education, health, Panchayat related matters, gov
ernance issues, issue of certificates and registering complaints. E-mail facilit
ies in Hindi are available. Majority of these Centers are own and run by the vil
lage communities with costs borne by the Panchayats. Others are privately run an
d bank financed .
Tarahaat.com: This is a commercial project promoted by a Delhi based NGO, ‘Devel
opment Alternative’. The project provides online information centers for rural c
ommunities with interactive and graphic interface in some places at North India.
Hole-in-the wall initiative: A pilot project launched by the NIIT, a software co
mpany in urban slums by providing unmanned computers. Through continuous video m
onitoring it was found that despite language difficulties boys and girls from th
e neighbourhood developed access skills in web surfing and graphic designs even
without formal training.
Indiagriline: This is an online network of trading, contract management, banking
, retailing etc. promoted by EID Parry, a company dealing in food products .
School Net India: An initiative of the Infrastructure Leasing and Financial Serv
ices (IL&FS) to develop online multilingual content and CD-ROMs as supplementary
teaching aid in classrooms.
SEWA: Self-Employed Women’s Association (SEWA) is an NGO, which organizes poor a
nd self-employed women. SEWA has promoted online global marketing of the product
s turned out by their members .
Source: Sood, 2001 and other sources.
The list of anecdotes included in the Box is by no means exhaustive. With progre
ss of connectivity such examples will multiply bringing in its train benefits of
an information economy and society. According to one estimate, 600,000 jobs hav
e been created in cyberkiosks in India in addition to possible employment due to
spillover effects .
Employment benefit of ICT occurs across wide range of skill spectrum. Apart from
growth of employment and income at firm level due to ICT induced productivity g
rowth in a large number of industries, a whole range of ICT enabled activities a
nd services has started booming. Some such examples include operations like data
entry, preparation and maintenance of database, revenue accounting, preparation
of payroll, processing of insurance claims, human resource services, call cente
r operations, running of customer support centers, medical transcription, conten
t development and animation, web site services, software development, hardware r
epair and maintenance, systems engineering, systems design and integration etc.
The process of job creation and productivity growth is expected to bring about
market expansion supporting growth of domestic hardware and software industries
broadening the base of ICT development. This, in turn, will induce R&D spontanei
ty enabling India to transit from the status of an importer of sub-assemblies of
IT and telecom hardware to a higher state of development endowed with strong do
mestic manufacturing base of sophisticated hardware and software products boomin
g from indigenous ideas, innovation and comparative advantage. A modern telecomm
unication infrastructure will accelerate this process through provision of high-
speed communication links. In the global IT market India will be a major player
at the higher end of value chain based on perfect synergy between the domestic a
nd overseas market.
As in the past, state will play an important role in this development both as a
proactive policy maker and also by taking a position in the market. Major policy
trust of the government to promote IT was through provision of Technology Park,
fiscal incentives, simplification of administrative rules and procedures, promo
tion of institutional finance including venture capital and liberalization of fo
reign equity participation. In the area of software, policies to encourage globa
l presence included market support, overseas campaign for export promotion, qual
ity certification, information security management and R&D support. Indian IT co
mpanies have been allowed to issue ADR/GDR linked stock options to employees und
er favourable tax treatment. Approval mechanism has been simplified under automa
tic route permitting overseas business acquisition through ADR/GDR route. The IT
Action Plan on Hardware envisaged extending Export Oriented Unit (EOU) status t
o hardware manufacturing units and deemed export status to telecom manufacturers
.
Traditionally, state has been the most important source of demand for IT industr
y in India. The trend continues even today and government spending on IT is a k
ey driver of domestic demand for IT products. One reason is that the government
has significant market presence in many goods and services. The other reason is
that the government is consciously promoting the use of IT in activities within
its domain of activities. To undertake development of IT as a thrust area a sepa
rate ‘Ministry of Information Technology’ was formed in October 1999. Recently,
Ministry of Communications and Ministry of IT have been merged to form a single
‘Ministry of Communications & IT’.
Apart from encouraging use of IT in research and scientific areas, the governmen
t has also taken major initiative to computerize work of various ministries and
departments. Ministries and departments have come up with their websites with al
l the relevant details. Though computerization of many more areas within the gov
ernment are under implementation, significant results have already been achieved
in computerization of railway reservation, allocation of Permanent Account Numb
er (PAN) for income tax payers, processing of passport application, conduct of p
ublic examination, custom clearance, Regional Transport Offices, schemes under i
mplementation by the NGOs, vigilance information, VSAT based money orders under
the Department of Post, Supreme Court, land records, Parliament questions, debat
es and deliberations . Different ministries have been advised to earmark 2 to 3
percent of the budget on IT.
Many state governments have also declared IT policies and computerized records,
certificates, registration of deeds, issue of licences, various payments systems
etc.
Computerisation is also spreading very fast in the field offices of the governme
nt, financial and educational institutions. According to one estimate, 12,000 ou
t of 45,000 bank branches have implemented major computerization .
Legislative framework has been put in place with the enactment of the Informatio
n Technology Act 2000 recognising digital signature as means of authentication o
f government certificates. The act imparts legitimacy to contract through electr
onic means unless otherwise agreed. Indian Copyright Act of 1957 and its amendme
nt in 1994 outlaw software piracy.
The foundation of digital democracy has been laid to usher in an era of e-govern
ance, transparency and e-accountability. A recent study shows that the number of
Indians using Internet for accessing government services and products as a prop
ortion to total number of Internet users has increased from 22 percent last year
to 31 percent this year .
Growing legitimacy of IT based transactions in government has started catalyzing
the use of IT in private market and expanding the domain of e-business and e-co
mmerce reducing transaction costs significantly and increasing productivity.
In time to come, the battle against digital divide will be won and ICT will be l
everaged to benefit the poor. Apart from higher earnings associated with product
ivity gains and job creation, benefits for the poor will also result from risk m
itigation and reduction in vulnerability due to timely availability of informati
on on weather and market, guidance on improved farm practices and elimination of
exploitation by the intermediaries. There will be general improvement in the qu
ality of life of the poor through more responsive governance, improved delivery
in the social sector programmes, better quality of public services and more effe
ctive public expenditure with more efficient targeting and monitoring. E-educati
on and e-medicine will surmount all the access barriers to reach the remote and
isolated locations.
There has been substantial depletion in the stock of IT personnel in India throu
gh migration into USA and Europe. There is need to replete this stock and plan f
or increased availability of skilled manpower to meet the future demand. Educati
on, training and skill development will meet the demand for skilled manpower of
the industry and at the same time keep the cost of IT education, servicing and m
aintenance within reasonable limit. Trained manpower will also be an important s
ource of demand for IT products and services. The Government has taken steps to
increase the teaching facilities to double the number of technology students and
sponsored training institutes like Indian Institute of Information Technology a
nd Management at Allahabad, Bangalore, Kolkata and Hyderabad in addition to Indi
an Institute of Technology and Management at Gwaliar. Initiative has also been l
aunched to upgrade existing regional engineering colleges, give active support t
o the polytechnics and colleges and encourage private participation in training
in the field of IT. A society has been formed to extend accreditation to instit
utions at non-formal sector for certain courses and network services have been
launched to link academic and research communities.
Software in local languages is being increasingly available. Computers have also
been specially designed for use in the mass market .
Vision 2020 is a vision of IT for the masses. All round development of digital l
iteracy would put Indian society in complete command over the ICT tools. Availab
le indications suggest that IT education is gaining popularity . Perceived utili
ty of ICT as enabler of business processes would continue to enhance market for
IT education. Education will spur innovation, productivity and entrepreneurship.
A knowledge society will be formed with participation from the rich and the poo
r, men and women, young and old, organized and unorganized, government and the g
overned.
4. Competition Policy
Countries often differed in pattern of sequencing and the speed of liberalizatio
n. Competition has been controlled within limit by state policy through licensin
g of limited number of market players in certain segments granting thereby a per
iod of exclusivity to the operators. Heterogeneity of routes to sectoral reforms
, as seen from the examples of some of the Asian countries, classified into diff
erent combination of policies and approaches to telecom reform, are presented be
low :
1. Competition in the fixed line segment with state owned incumbents: China
, India and Korea.
2. Privatization of state owned incumbents but deferred competition through
exclusivity granted to private investors: Hong Kong, Indonesia, Malaysia, Pakis
tan and Singapore.
3. Simultaneous introduction of privatization and competition: Japan and Sr
i Lanka.
4. Opening up of local market to competition first: Hong Kong, India and Si
ngapore.
5. Opening up of competition in the international services first: Korea, Ma
laysia and the Philippines.
6. Introduction of second domestic long distance carrier first: China
7. The sector ministry exercises regulatory functions: China, Indonesia, Ja
pan, Korea, Malaysia, Taiwan and Thailand.
8. Separate regulator with the responsibility for interconnection lying wit
h the dominant operator while regulator is responsible for arbitration of disput
es: Hong Kong, Pakistan and Philippines.
In most countries, restricting the number of licensees or imposing geographic li
mitations has limited competition. In India, for instance, competition in cellul
ar telephony was allowed in a duopoly mode. This was gradually increased to lice
nsing of four operators in each of the four metros and thirteen circles. Basic s
ervice in India is still limited to one private operator competing with state ow
ned incumbents in the circles. Though private sector has been licensed and they
are laying infrastructure, metros are still in the grip of public sector monopol
y and it will take a while before private competition takes place. Differences i
n modes of privatization have been observed in other countries. In Thailand, pri
vate entry was allowed through Build Operate and Transfer (BOT) mode while the n
etwork was controlled by the state. In Vietnam, network was publicly managed wit
h foreign operators participating in provision of training, equipment and superv
ision through Business Cooperation Contracts (BCCs). China did not allow private
entry in the telecom sector and limited competition between state-owned entitie
s of the ministries. Many countries in Asia restricted foreign equity participat
ion. For example, China, India, Indonesia, Korea, Malaysia, the Philippines and
Thailand limited foreign equity below fifty per cent .
It is interesting to note that competing technological standards have also limit
ed competitions. Countries are divided in their technical options for mobile net
works. While Europe predominantly opted for Global System for Mobile communicati
ons (GSM) technology and USA for Code Division Multiple Access (CDMA), within As
ia, China, India, Indonesia and Malaysia have opted for GSM in cellular mobile n
etwork, whereas Hong Kong, Korea, the Philippines, Singapore and Thailand have o
pted for CDMA .
However, several countries are now opting for more than one standards. For examp
le, in USA, ‘Companies like AT&T and Cingular are increasingly moving to GSM’ .
‘China is going with some CDMA as well.’ India is using CDMA in Wireless in Loc
al Loop (WLL). Multiple technological standards fragment market rendering base s
tations purchased from one company unworkable with switches bought from another
company potentially limiting the scope of exploitation of economies of scale tha
t could accrue in a multi-vendor environment .
The way multiple technological standards may confuse regulatory stance leading t
o market failures can be seen from the recent experiences of several vendors whi
le trying to launch 3G in Europe. European Union has mandated a single technolog
ical standard called ‘Wideband CDMA’ (W-CDMA) for 3G coverage. Some of the compa
nies that sought to launch 3G services in September 2002 (deadline stipulated in
the licenses for tdr
he launch of services) faced the difficulties that networks and handsets of diff
erent vendors could not work with each other. ‘CDMA2000’, another standard for 3
G, which is working successfully in Asia and USA could not be adopted in Europe
because European operators did not have freedom to use ‘CDMA2000’ as per their l
icensing restrictions .
Which competition policies worked better than others? Literature cites certain d
evelopmental experiences to draw conclusions from ‘before and after’ and ‘with o
r without’ evaluations. The purpose here is to cite these references. In the abs
ence of more detailed information, examination of the validity of such conclusio
ns is not intended here.
Competition with privatization
World over, there is an observable trend of growing number of state owned teleco
m incumbents being privatized. In 2000, from among the member countries of the I
TU, those with fully or partially privatized incumbents outnumbered countries wi
th fully state-owned operators . It has been observed that ‘countries with a pri
vately owned incumbent operator account for 85 per cent of the world market by r
evenue. Those with fully state-owned operators, in mobile as well as fixed lines
, account for just two per cent.’
It has been suggested that privatization with competition works better than priv
atization without competition. For example, Chile started privatization in 1988
but did not limit competition through grant of exclusivity period or licensing o
bligations. Argentina, on the other hand, privatized in 1990, but granted seven-
year exclusivity period, which was subsequently extended by three years. Moreove
r, Argentina imposed licensing obligation in terms of stipulated growth rate of
6.5 per cent. In the decade following privatization, Chile far exceeded Argentin
a in terms of network growth. Moreover, starting with half of the tele-density,
Chile surpassed Argentina in ten years’ time .
The issue of granting a ‘period of shared exclusivity’ versus ‘allowing more ext
ensive market entry’ has been discussed in the literature. Experience of UK has
been cited in this context. Telecom expansion was reportedly much more rapid in
the United Kingdom (i) after the expiry of exclusivity period from 1982-90, that
was granted to Mercury, the second operator and (ii) after cable TV operators w
ere permitted to offer tele-services . Therefore, it was concluded that open com
petition was better than duopoly. Both USA and Canada lost in terms of their mob
ile tele-density-rankings in the world in the 90s. Two reasons which have been c
ited for this are: (i) persistence with regional duopoly for too long, and (ii)
slow transition from analog to digital systems .
Notwithstanding the merits of the above conclusions whatsoever, it can be argued
that privatisation of existing state-owned incumbent operator is not the only w
ay to promote private investment. Opening up of new services not preoccupied by
state monopoly can attract private investors, provided regulatory policies do no
t inhibit growth of private markets in such areas. Growth of private mobile oper
ators in India is a case in point. However, it is necessary for the regulatory a
uthority to ensure that state incumbent does not inhibit growth of competition .
Operationalisation of these ideas is not without hazards. A conflict of common
occurrence relates to interconnection issues. Interconnection between state-owne
d fixed line incumbent network and private mobile network has been a bone of con
tention in many countries. ‘…incumbent telecommunication operator, which often h
olds a monopoly…can set the price, typically at a high multiple of the actual co
st’ .
Independent regulator?
Sound regulation is a pre-requisite to healthy competition. Therefore, issue of
competition cannot be divorced from the issue of regulation. The autonomy that a
regulator enjoys from government control has often been given primacy over many
other factors in determining a regulator’s ability to discharge regulatory role
in an impartial manner. In reality, however, it is difficult to perceive indepe
ndent regulation as synonymous with impartial regulation. There are examples of
effective regulation under regulatory functions being performed by the governmen
t departments. Similarly, there are instances of ‘independent regulators that ha
ve been captured by market players’ .
What about non-sector specific regulation? New Zealand experimented with non-sec
tor specific regulation relying on Competition Commission of the country. This l
ed to protracted litigations and disputes on interconnection and network access
issues slowing down the progress of the sector. Finally, New Zealand enacted ‘Te
lecommunication Act’ in December 2000 and created a Telecommunication Commission
within the Competition Commission .
In India, TRAI Act was amended in January 2000, to remove some of the shortcomin
gs observed earlier. The legislation aimed at, inter alia, protection of interes
ts of service providers and consumers of telecom sector. With this amendment, re
commendatory functions were separated from enforcement functions. A separate Tel
ecom Disputes Settlement and Appellate Tribunal (TDSAT) was set up with both ori
ginal and appellate jurisdiction. It became mandatory for the central government
to seek prior recommendations of the TRAI before introduction of new services.
TRAI’s power to issue directions was restricted to only its enforcement function
s. Direct appeal to the Supreme Court of India against an order of TRAI was prov
ided for. Thus, neutrality of Indian telecom regulatory regime was ensured throu
gh reliance on multiple agencies for conflict resolution . TRAI had a proven rec
ord of maintaining neutrality. It had challenged several decisions of the Govern
ment of India .
In tune with the international development and evolution of technology, The Comm
unication Convergence Bill 2001 was introduced in the Parliament and is under co
nsideration of the Standing Committee of Parliament on Telecom and IT. ‘The Bill
aims at promoting, facilitating and developing, in an orderly manner, the carri
age and content of communications (including broadcasting, telecommunications an
d multimedia), to facilitate development of a national infrastructure for an inf
ormation based society, and to enable access thereto. It also seeks to provide a
choice of services to the people with a view to promoting plurality of news, vi
ews and information’ . Thus, regulatory regime in 2020 will be overarching, base
d on convergence, which apart from paving the way to a full-grown information so
ciety will enhance growth and productivity of telecommunications and IT through
exploitation of economies of scope and coverage.
Competition without privatization
Interestingly, there are other models of competition without privatization. Chin
a Telecom, one of the world’s major Public Telecommunication Operators (PTOs) is
still fully state-owned. Both China and Vietnam followed similar policies of co
mpetition without privatization. Competition has been allowed between ministries
of the governments. Participation of foreign investors has been allowed through
joint ventures. Both these countries have been very high achievers in terms of
progress of telecom sector . ‘The key underlying factor is the will of the state
to invest in, and prioritize, telecommunication development’.
There have been instances of repeated market failures arising out of impudent in
vestment decisions of the private operators. In Norway, license to provide 3G mo
bile services purchased for US$ 22 million was returned unused. Investment worth
several billion dollars were sunk and lost in the Iridium Global Mobile Persona
l Communications by Satellite (GMPCS) network project. Global Crossing went bank
rupt with debts over US$ 12 billion for a project of construction of 160,000 km
fiber optic network . One view is that too many competitors deciding ‘to build e
normous networks for which there was little demand’ were responsible for such cr
ashes . Market failures of such magnitudes create backlash in the industry and c
an potentially risk a global crisis. Such failures, if not avoided, would prove
too costly in terms of lost investment in a country like India. A calibrated app
roach through managed competition holds assurances for the investors of a reason
able time period for consolidation and therefore, seems to be a wiser strategy t
o follow.
Despite differences in competition regimes across the countries, the global tren
d is towards growing privatization and competition. India, with her commitment t
o reforms is already a part of this process. From the perspective of business or
ganisation, as the global experience suggests, this process is likely to undergo
an alternate cycle of differentiation and convergence. Convergent nature of tec
hnology may, by itself dictate mergers and acquisitions between companies in cer
tain cases. Network operators and service providers will have to merge with cont
ent developers to add value to their services. This is likely to create temporar
y oligopoly in the market till competition intensifies with the emergence of mor
e firms offering multiple services . India in 2020 will see competition among b
ig firms offering innovative value-added services to capture market through crea
tion of new digital needs and priorities. Regulatory environment will mature to
allow maximum flexibility and freedoms to encourage innovation and expansion, co
nsistent with this process of evolution.
5. Technology trend
Broadly speaking, technologies of mobile telecommunications and Internet are goi
ng to set the contours of further technological progress in the current decade a
nd the next. The most recent initiative aims at convergence of voice and data re
ceived from multiple sources, both web based and real time video streams, in mob
ile handheld devices. Global satellite systems, mobile handsets and calling card
s have made virtual presence possible almost everywhere and anywhere overcoming
the barriers of distance, topography and remoteness.
There has been phenomenal growth in mobile subscribers in the world in the ninet
ies, increasing from 11 million in 1990 to 941 million by the end of 2001. In 19
91, less than one per cent of the world population had a mobile phone. The propo
rtion has grown to the vicinity of one phone per every six people by the end of
2001. Similarly, one-third of the total number of countries of the world had cel
lular network in 1991. The ratio rose to over 90 per cent by end-2001 . Consider
ing that the fixed telephone lines numbered just over a billion in this year, it
is likely that mobile phones would surpass fixed line in 2002. It is interestin
g to observe that China has surpassed USA to become the largest mobile market of
the world. In Africa, mobile subscribers outnumber fixed line subscribers in mo
re than half the countries . Mobile telephony has emerged as the major growth dr
iver in this sector. But for expansion in mobile network, there would have been
hardly any growth in telecommunications in many countries. In developed countri
es, mobile phones have complemented fixed lines whereas in many developing count
ries with low-level fixed line penetration, mobile has already surpassed fixed l
ines filling up supply gaps created due to inadequate growth in the latter. It
has been observed that ‘the ability of a country to grow its mobile network to t
he point where it overtakes the fixed-line network is not a function of its weal
th…the crossover point can come as low as a fixed teledensity of 0.4 (for instan
ce, in Malwai) to as high as 75 (the case of Luxembourg) and at any point in bet
ween’ .
There are three important economic implications of mobile explosion for the deve
loping countries. First, by offering a viable techno-economic alternative it is
helping in improving telecom penetration bypassing shortages of fixed lines. Con
sequently, it is bringing along with it all concomitant economic benefits of enh
anced telecom accessibility. Second, it is promoting a better entrepreneurial cu
lture and supporting employment generation through proliferation of kiosks . Thi
rd, there has been a shift in investment burden from state to private sector and
the consumers .
Cellular mobile telephones subscribers in India increased from 77 thousand in 19
95 to 3.6 million in 2000. By March 2002, it has grown to 6.4 million. Cellular
subscribers in proportion to total number of telephone subscribers (basic plus c
ellular) has increased from 0.6 percent in 1995 to 14.6 percent in 2002. This is
still lower than the average of 24.6 percent achieved by the low-income countri
es in 2001. The corresponding ratio for lower middle-income countries is 41.8 pe
rcent, 52.8 percent for upper middle-income countries and 50.2 percent for high-
income countries. India is yet to experience mobile explosion of the scale other
countries have seen. One would expect a rapid growth in mobile telephony in com
ing decades. India has also achieved significant quality upgradation of its netw
ork in the 90s. Digital lines in proportion to total number of main telephone li
nes have increased from 87 per cent in 1995 to 99.8 percent in 1999.
Like mobile, the last decade witnessed phenomenal growth in Internet usage. In 2
001, 95 per cent of the countries were connected to Internet compared to 15 per
cent in 1990. There are about half a billion Internet users in the world in 2001
with subscribers numbering an estimated 230 million . It is also interesting to
note that in 1995 Internet users in developed countries were seven times more th
an the number of Internet users in the developing countries. In 2001, this gap h
as narrowed down to less than four times.
Initial stance of technology supporting expansion of Internet dictated revenue m
odel based on convergence between telecom and Internet. Internet is accessed pre
dominantly through dial up in old telephone lines. This has resulted in unequal
distribution of benefits between the dotcom operators and the telecom operators.
It has been observed that while dotcom operators ‘are failing to make money on
the Internet, telecom operators are. The reason is that they control the pipes o
ver which Internet traffic runs’ . ‘Incumbent telecom operators tend to be among
the largest Internet Service Providers (ISPs) in their countries’ . There are t
hree important implications of this development. First, it inhibits growth of co
ntent development as an independent specialized activity because revenue-share o
f the content developers depends on the first claim on revenue by the infrastruc
ture providers. Second, technical capabilities of telephone lines constrain deve
lopment of Internet infrastructure and conditions speed of download. Third, deve
loping countries are faced with major bottlenecks in the spread of Internet due
to shortage of telephone lines and high telephone charges. Technological answers
to these problems have already emerged in the forms of Integrated Services Digi
tal Networks (ISDN), wireless solutions and upgraded cable television networks e
nabling high-speed Internet access without clogging telephone lines. Use of VSAT
technology for Internet connectivity can also greatly enhance the speed of data
transmission . In the present decade and the next, one would hope to see faster
expansion and consolidation of these technologies ushering in Internet revoluti
on. Broadband access technologies, which include Digital Subscriber Lines (DSL)
and cable modem, permit faster download and graphic-intensive Internet applicati
ons. However, diffusion of this technology is so far minimal, particularly in th
e developing countries. Commercial exploitation of Internet crucially hinges on
the spread of broadband technology. The issue that confronts developing world is
how to create demand for broadband applications at the first instance. At the e
arly stage, government can play an important role to promote broadband usage in
e-education, e-governance, e-medicine to stimulate its demand .
Another convergent trend that has emerged is the use of Internet as carriers of
voice. Consequently, ‘increasing share of voice traffic shifted to the Internet,
to be carried as Voice over IP (VoIP)’ .
At the uppermost end of the convergent technology spectrum have already emerged
Third Generation (3G) mobile devices with the capability of access to mobile dat
a and voice . More than US$ 100 billion have been spent by the industry since 20
00 to acquire 3G license and spectrum. However, a full-grown market is yet to de
velop to assure investors’ return. Technical and commercial consolidation is exp
ected to take quite some time. By 2020, one would expect 3G to be within reach o
f wider section of Indian population.
The pace at which 3G is going to proliferate in India will depend upon, inter al
ia, the market demand for higher bandwidth data. There is a view that perhaps th
e present demand for high speed data (greater than 64 kbps) can be met cost effe
ctively with General Packet Radio Service (GPRS). While pent up demand for emerg
ing data-needs can be met by using 2G systems like Short Message Service (SMS),
GPRS etc., the drive for 3G in Indian market can come from ‘corporate roaming tr
affic via international visitors’ .
Substantial work needs to be done in developing 3G relevant contents so as to ex
pand its market. Initiative has already been launched in these areas. For exampl
e, Sonera (formerly Telecom Finland) has already launched information portal for
mobile phones including Internet localisation services . Future work in this ar
ea will be in the form of adding more value to the new services.
Advanced plans are necessary to develop vibrant industries for 3G applications.
This may call for investments. A synchronized growth of user industry and 3G tec
hnologies would ensure that pay-off period in investment is minimized. Developin
g knowledge based industry to provide mobile applications would reduce uncertain
ties regarding return from private investment in 3G technologies.
As a preparatory groundwork to usher in 3G, it is essential to demarcate areas w
here massive harmonization efforts would be needed. This would entail upgrading
hardware and software for high bandwidth multimedia services. Harmonization woul
d also be needed between the two emerging varieties of CDMA, i.e., wideband CDMA
that also supports fixed network and CDMA – 2000. Since it is likely that both
these solutions would ultimately support fixed and mobile applications, a marria
ge of the two would prevent technological fragmentation of the market.
There is need to develop deeper understanding of the evolution of new end-users
in the market for the mobile multimedia services. Multimedia service providers w
ill emerge as important shareholders in the network value chain. Countries shoul
d envision new partners, new entities, and new stakeholders in the business mode
ls. Multimedia portals will be important components of such business models.
There is need for further work to match regulatory perspectives emerging as a pa
rt of the convergence regime with the requirements of 3G. Another important area
of work will involve further thought over efficient billing model ---- a transi
tion from time dependent billing model to content dependent billing .
The revenue model in the telecommunications sector is going to change significan
tly in times to come. In many cases PTOs have started offering free Internet to
augment revenue from telephone lines . In the Philippines, a global leader in SM
S use in mobile handsets, revenue from SMS contributed a growing share of mobile
revenue. SMS proved to be much cheaper than voice call .
6. Conclusions
LDCs are experiencing fastest growth in telecom network. In the mid-90s, growth
in total telephone subscribers per 100 inhabitants of the LDCs surpassed that of
the developed countries. In 2001, LDCs surpassed emerging countries achieving t
he distinction of fastest among the three . Given the relationship between telec
om expansion and growth, there is hope for narrowing down of digital-divide, pro
vided, LDCs are able to sustain growth momentum in the long run. The vision is n
o doubt optimistic. It has been cited that some twenty years ago Tokyo had more
telephones than the whole of African continent whereas today Africa has more tha
n twice the number of main telephone lines than that of Tokyo . It is but natura
l that markets in high-income countries saturate while expansion in developing c
ountries continues unabated.
One notable break with the past is that with opening up of the developing econom
ies and widespread sectoral reforms, catching up process has become faster. Deve
loping countries with liberal policies have much better opportunity to leapfrog
than before. Mobile experience of the low-income countries bears testimony to th
is process. India is a participant in this global process. There is tremendous a
ppetite to absorb new technology. At the higher end of the market, India will mi
mic the most sophisticated telecom technology of the world and face all types of
uncertainties that are associated with any new technology anywhere in the world
. It will take time for the market for new technologies to consolidate. ‘Market
maturing’ will be a continuous process at some of the segments of telecom sector
. This holds good even today. Today’s market does not guarantee ‘reliable reven
ue stream’ to investors in new technology like VoIP, bradband and 3G since they
lack an existing client base . Side by side, a process of diffusion will continu
e unhindered in respect of established technology in the mass market.
What will be the telecom scenario in India in 2020?
To look forward, from now on, the growth momentum in the expansion of fixed line
network is likely to be sustained. This is the current phase of expansion devel
oping countries are passing through. In 2000, three out of four fixed lines were
installed in developing countries. China alone installed more fixed lines in 20
00 (35 million) than the entire developed world in 1999 and 2000 .
Once fixed line market is matured, mobile will crossover fixed line market. Indi
a is still much below the crossover point even by the standard of the low-income
countries. A mobile revolution is in the offing in India.
The next points of crossover will be between data and voice , and between mobile
and fixed-line Internet . This is going to take some time because this is yet t
o occur even in high-income countries. The process of technical consolidation an
d system integration of different competing standards in a single platform will
by itself take some time. The process of commercial consolidation will start the
reafter.
In order to guess the time frame over which such technological and commercial cy
cles may run their courses in future it may be of interest to look at the past e
xperiences. Going by the history, commercialisation of cellular mobile telecommu
nication services began in late seventies, when Japan took the lead in 1979. Man
y developed countries have reached saturation point only now though developing c
ountries are far from it. Similarly, market for Internet in the developing count
ries is yet to mature though the service commenced in late 1960s, when USA took
the lead in 1969. As rightly observed, ‘But for both these innovations, the full
extent of their impact on businesses and consumers is probably still to come. E
-commerce, for instance, is still in relative infancy and is expected to boom in
coming years as “old economy” firms re-orient their business processes around i
t. Similarly, the true potential of a mobile phone, as an integrated communicati
ons, entertainment and positioning device, is only beginning to be realized’ .
If past trend were any guide, it would be reasonable to hope that by 2020 India
would complete transition into digital switching and transmission, VoIP, broadba
nd and 3G. Though there would be always a small niche market in India, which wo
uld catch up with the cutting age of the technology, consolidation and expansion
of evolving technologies across the length and the breadth of the country will
follow with a lag.
Future vision of telecom is a vision of IT. Telecom will be the springboard of f
uture expansion of IT heralding in an information society. ICT will spread among
the masses and will spur innovation, entrepreneurship and growth. An expanding
domestic market will deepen the synergy between the domestic and the export mark
et and strengthen India’s presence in the high-value segment of the global trade
and investment. ICT benefits will spread among all, the rich and the poor, the
young and the old, the men and the women, the organized and the unorganized and
the government and the governed.
Appendix
Indian Telecom Sector: Recent Policies
1. All the villages shall be covered by telecom facility by the end of 2002
.
2. The Communication Convergence Bill 2001introduced in the Parliament on A
ugust 31, 2001 is presently before the Standing Committee of Parliament on Telec
om and IT.
3. National Long Distance Service (NLD) is opened for unrestricted entry.
4. The International Long Distance Services (ILDS) have been opened to comp
etition.
5. The basic services are open to competition.
6. In addition to the existing three, fourth cellular operator, one each in
four metros and thirteen circles, has been permitted. The cellular operators ha
ve been permitted to provide all types of mobile services including voice and no
n-voice messages, data services and PCOs utilizing any type of network equipment
, including circuit and/or package switches that meet certain required standards
.
7. Policies allowing private participation have been announced as per the N
ew Telecom Policy (NTP), 1999 in several new services, which include Global Mobi
le Personal Communication by Satellite (GMPCS) Service, digital Public Mobile Ra
dio Trunked Service (PMRTS), Voice Mail/ Audiotex/ Unified Messaging Service.
8. Wireless in Local Loop (WLL) has been introduced for providing telephone
connections in urban, semi-urban and rural areas promptly.
9. Two telecom PSUs, VSNL and HTL have been disinvested.
10. Steps are being taken to fulfill Universal Service Obligation (USO), its
funding and administration.
11. A decision to permit Mobile Community Phone Service has been announced.
12. Multiple Fixed Service Providers (FSPs) licensing guidelines were announ
ced.
13. Internet Service Providers (ISPs) have been allowed to set up Internatio
nal Internet Gateways, both Satellite and Landing stations for submarine optical
fiber cables.
14. Two categories of infrastructure providers have been allowed to provide
end-to-end bandwidth and dark fiber, right of way, towers, duct space etc.
15. Guidelines have been issued by the Government to open up Internet teleph
ony (IP).
Investment Policy Framework
1. Foreign Direct Investment of up to 100 percent permitted for the following:
- Manufacturing of telecom equipment
- Internet service (not providing international gateways)
- Infrastructure providers (Category I)
- E-mail service
- Voice mail service
- Call Centers and IT enabled services
- Internet service (providing international gateways)
- Infrastructure providers (Category II)
- Radio paging services
- National long distance service
- Basic telephone service
- Cellular mobile service
- Other value added service
4. Additional foreign investment through holding/investment company
5. Automatic approval for technology fee up to US$ 2 million, royalty up to 5 pe
rcent for domestic sales and 8 percent for exports in telecom manufacturing (hig
her amount through specific approvals)
6. Full repatriability of dividend income and capital invested in the telecom se
ctor
7. Fiscal incentives and concessions for the telecom sector:
- Amortization of license fee
- Tax holiday
- Rebate on subscription to shares/debentures
- Scope for tax exemption on financing through venture capital
- Import duty rates reduced for various telecom equipment
Source: (i) Annual Report, 2001-2002 and (ii) Indian Telecommunication Statistic
s 2002 (Policy Framework, Status and Trends), both published by the Department o
f Telecommunications, Ministry of Communications & IT, Government of India.

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“CONSUMER BEHAVIOR STUDY WHILE BUYING NEW MOBILE CONNECTIONS”WITH RESPECT TO TAT

Dissertation Submitted to the

CONSUMER BEHAVIOR STUDY WHILE BUYING NEW MOBILE CONNECTIONS

Dissertation Submitted to the

NEED OF THE STUDY:

DEVELOPING THE QUESTIONNAIRE:

Limitations of the study -

A brief literature would be of immense help to the researcher in gaining insight

1. Samuel, “customer satisfaction for cellular services, a study with a referenc

5. Hutchison’s managing director Asin Ghosh 2005 says in the article,

TATA COMPANY PROFILE

INTRODUCTION TO CONSUMER BEHAVIOR STUDY WHILE BUYING A NEW MOBILE CONNECTIONS

FACTORS AFFECTING CONSUMER BUYING BEHAVIOR

CONSUMER BUYING DECISION PROCESS

Consumer decision making process generally involves five stages-:

ANALYSIS OF MOBILE COMMUNICATION SPREAD AND ITS IMPLICATIONS IN INDIA

NOTE:-HUTCH IS NOW VODAFONE,BPL IS NOW LOOP

CDMA Mobile Subscribers

TELECOM IN RURAL INDIA

DETAILS ABOUT SERVICE PROVIDERS:

About Vodafone Essar Limited:

DATA ANALYSIS , INTERPRETATION AND FINDINGS

CONSUMER PREFERENCE TOWARDS CELL PHONE

CONSUMER PREFERENCE TOWARDS CELLPHONE SERVICE PROVIDERS

CONSUMER’S PREFERENCE TOWARDS CELL PHONE

COMPOSITION OF RESPONDENTS ON THE BASIS OF

COMPOSITION OF RESPONDENTS ON THE BASIS OF MARITAL

COMPOSITION OF RESPONDENTS ON THE BASIS OF

COMPOSITION OF RESPONDENTS ON THE BASIS OF

COMPOSITION OF RESPONDENTS ON THE BASIS OF INCOME (PER MONTH)

S.NO INCOME NUMBER OF

TABLE SHOWING VARIOUS FACTORS INDUCING TO

TABLE SHOWING VARIOUS FACTORS INDUCING TO

COMPOSITION OF RESPONDENTS ON THE BASIS OF

SR.NO PURPOSE NO.RESPONDENTS PERCENTAGE OF RESPONDENTS

COMPOSITION OF RESPONDENTS ON THE BASIS OF

COMPOSITION OF RESPONDENTS ON THE BASIS OF

SR.NO USAGE NUMBER OF

INFLUENCING FACTORS TO PURCHASE THE CELL PHONE

SR.NO FACTORS NUMBER OF RESPONDENT %OF RESPONDENTS

CONSUMER’S SATISFACTION LEVEL ON THE BASIS OF PERFORMACE OF THE MOBILE CONNECTI

CONSUMER’S SATISFACTION LEVEL ON THE BASIS OF PERFORMACE OF THE MOBILE CONNECTI

CONSUMER’S ATTITUDE TOWARDS THE IMPORTANCE OF HAVING A MOBILE CONNECTION

SR.NO NATURE NUMBER OF RESPONDENTS PERCENTAGE

PREFERANCE TOWARDS PREPAID AND POST PAID

SR.NO RESPONDENTS % OF RESPONDENTS

COMPOSITION OF DIFFICULTIES PHONE CONNECTION (prepaid/postpaid)

1. Please name the cellular service/connection you are currently using

3. Why do you buy the mobile connection?

5. What factor influenced you to decide your Cellular service provider?

6. Satisfaction level about your cell phone service provider?

7. You consider owing a mobile connection as a -

8. Which type of scheme is most preferable by you?

10. Do you face any difficulty in your cell phone connection?

11. What is your valuable suggestion / opinion about your cell

The Evolution of Wireless Telephone Service in the United States

Manas Bhattacharya*, IES

Table 4 indicates tele-density for the countries included in Table 1 as measured

Table 7: Internet penetration and PC availability, 2001

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