Final report sip at reliance communications ltd. (2)

5/14/2010
A REPORT
ON

VALUE ADDED SERVICES (VAS)
At

BY:
(VANSHAJ ANAND)
09BSHYD0956

RELIANCE COMMUNICATIONS LIMITED

0

Value Added Services at Reliance Communications Ltd.
A REPORT
ON

VALUE ADDED SERVICES (VAS)
BY:
(VANSHAJ ANAND)
09BSHYD0956
RELIANCE COMMUNICATIONS LIMITED

A Report Submitted In Partial Fulfillment of the Requirements of
MBA Program of IBS Hyderabad

Distribution List:

Mrs. Chanda Mahajan (Manager –Value Added Services, Reliance
Communications Ltd.)

Dr. Manas Ranjan Tripathy (Professor IBS, Hyderabad)

Date of submission: 14 May, 2010

IBS Hyderabad Page 1


AUTHORIZATION

This is to certify that the project report entitled “Value Added Services” is submitted to
Marketing department, Reliance Communications Ltd by Mr. Vanshaj Anand in the partial
fulfillment of the requirement of MBA program at IBS Hyderabad. This study is a bonafide
research work carried out by for a period of 14 weeks from 22-02-2010 to 21-05-2010.

Date: 14.05.2010 Chanda Mahajan

Place: New Delhi (Manager- Value Added Services)



ACKNOWLEDGEMENTS

Through this report, I take the opportunity to express my sincere gratitude to all those who have
helped me in making my training at Reliance Communications Ltd. (Delhi circle), a success.

First of all I would like to thank the academic fraternity at, IBS Hyderabad, for having such a
system in place, where students are given opportunities to learn about their areas of interest, as
part of training and internship programs.

I would like to thank my faculty guide Dr. Manas Ranjan Tripathy, Faculty Member IBS,
Hyderabad, without whom it would not been possible for me to undergo training at Reliance
Communications Ltd. His regular guidance and help has given shape to my project and evolved
it to its current being. He has been a source of inspiration and motivated me to perform to the
best of my abilities.

I express my deepest sense of gratitude towards Mrs. Chanda Mahajan, my guide and mentor at
Reliance Communications Ltd, for taking time out of her busy schedule and helping me, in every
possible way, to proceed with my work. She has been a constant help throughout the project and
an impartial leader. I would like to thank her for her selfless help and cooperation at every step.

At last, I would like to thanks all the TEAM MEMBERS of the office, who had contributed in
completion of the project. I acknowledge their efforts in making me understand the various
business functions at Reliance Communications Ltd and their guidance for developing the
deliverables to the organization.



ABSTRACT

In today’s business environment the world is shrinking rapidly. Companies now are not restricted
by boundaries of countries. Technology is the main driving factor behind this emergence of a
closely knit business world. The need for faster communication and decision making is gaining
immense importance. Moreover, easier access to the web has been very effective for the
company as well as its employees. In this emerging conquest for highly customized products,
there has been a growing demand for efficient tools for processing the products and its related
documents. All functions – such as sales, marketing, manufacturing, service, and even human
resources affect not only the bottom line but also a company’s financial integrity.

The main aim of this project is to understand the various functions of marketing division in the
day to day business activities in the telecom sector for its Value Added Services. It also aims to
identify the concern areas after an in-depth analysis of the company’s operations and recommend
solutions for the same. It stresses on analyzing the key aspects of marketing like consumer
behavior patterns and revenue generation. It requires integration of various parameters needed to
analyze the possibilities of market segmentation in telecom sector. It mainly focuses on
increasing ARPU and decreasing customer churn. It also takes a step forward by looking into
various strategies adopted by Reliance Communications to remain affordable by the customers
yet generate high revenue.



TABLE OF CONTENTS

Authorization iii
Acknowledgement iv
Abstract v
1. Objective 10
2. Introduction 11
2.1 Background 11
2.2 Purpose and Scope 12
2.3 Methodology 13
3. Review of Literature 15
4. Industry 18
4.1 Introduction 18
4.2 Market Structure 19
4.3 Competition in the Market 20
5. Company Profile 22
5.1 Introduction 22
5.2 Vision 24
5.3 Business Mix 24
6. Value Added Services 25
6.1 Introduction 25
6.2 Need for MVAS 26
6.3 Understanding of Different MVAS Categories 28
6.4 Pillars of MVAS 31
6.5 Understanding Role of Different Entities 33
6.6 MVAS Access Modes 35
7. VAS Market Analysis 37
7.1 Introduction 37
7.2 VAS Access Devices 37
7.3 Reliance Vs Competitors 39


8. VAS Promotion 46
8.1 Introduction 46
8.2 Promotional Strategy Adopted for the Project 48
8.2.1 Campaign Design Through SAS Marketing Automation 48
8.2.2 Tele-Calling 55
8.2.3 Up-Selling 58
8.2.4 Training to Customer Touch Points 60
9. Market Research for Retail Integration 63
9.1 Research design 63
9.1.1 Type of Research Design 63
9.1.2 Information Needs 63
9.1.2.1 Data collection from secondary sources 63
9.1.2.2 Data collection from primary sources 64
9.1.3 Measurement and scaling procedure 64
9.1.4 Questionnaire development and pretesting 64
9.1.5 Sample design 65
9.1.6 Field Work 66
9.1.7 Data analysis 66
10. Market Research to analyze Customer Behavior for VAS 74
10.1 Introduction 74
10.2 Methodology 74
10.3 Research Design 75
10.3.1 Type of Research 75
10.3.2 Information Needs 75
10.3.2.1 Data collection from secondary sources 75
10.3.2.2 Data collection from primary sources 76
10.3.3 Measurement and scaling procedure 76
10.3.4 Questionnaire development and pretesting 76
10.3.5 Sample Design 77
10.3.6 Field Work & Data Collection 78
10.4 Analysis 79
10.4.1 Data Analysis 79


10.4.2 Industry Analysis-Porter’s five forces Model 96
10.4.3 SWOT Analysis 97
11. Findings 98
12. Conclusion 101
13 Recommendations 103
14. Annexure 107
15. References 109
16. Glossary 117

LIST OF FIGURES

Fig. no. Description Page
no.
4.1 Top 10 countries by number of subscribers 19
4.2 Market share of all operators in India 21
5.1 Top 10 CDMA operators in the world 23
5.2 Business mix of Reliance ADAG 24
6.1 Pillars of MVAS 31
6.2 VAS Revenue Distribution 34
6.3 VAS Revenue Access Modes 36
7.1 GPRS Penetration 38
8.1 VAS Promotional Strategy Adopted for Project 48
8.2 Strategy for Retail Integration 60
8.3 Steps Devised for Training Customer Touch Points 61
9.1 Total footfall 67
9.2 Retailer’s Knowledge for VAS 67
9.3 Retailers fully aware of VAS 68
9.4 Customers that come enquiring for VAS 68
9.5 Ususal VAS activations 69
9.6 Major VAS service 69
9.7 Retailer will promote if given incentives 70
9.8 Incentive expected 70


9.9 Retailer's Total Footfall 71
9.10 Percentage of Reliance Customers Visit per day / Retailer 72
9.11 Growth Opportunity 73
9.12 Awareness amongst retailers 73
10.1 Methodology for research 74
10.2 Respondent’s Age Group 79
10.3 Respondent Occupation 80
10.4 Customer’s Average monthly Bill 81
10.5 Customer’s Average monthly VAS expenditure 82
10.6 Subscriber Type amongst customers 83
10.7 Age & Awareness of value added services Cross tabulation 84
10.8 Occupation & Awareness of value added services Cross tabulation 84
10.9 SPSS output-Scree Plot 92
10.10 Relative importance of factors 95
10.11 Porter’s five forces Model 96
10.12 SWOT Analysis of Reliance Communication Ltd. 97
13.1 Strategy for Creating Awareness 104


LIST OF TABLES

Table no. Description Page no.

7.1 Data Platform Comparison 44
9.1 Sampling Design 66
9.2 Retailer’s total footfall 71
9.3 Percentage & count of reliance customers 72
10.1 Sampling design 78
10.2 Customer’s age group 79
10.3 customer’s occupation 80
10.4 Customer’s Monthly bill 80
10.5 customer’s monthly VAS expenditure 81
10.6 Network & subscriber type cross tabulation 82
10.7 Age & Awareness of value added services Cross tabulation 83
10.8 Occupation & Awareness of value added services Cross tabulation 84
10.9 VAS Awareness with different age groups 85
10.10 Frequency distribution table for chi square test of Independence 86
10.11 SPSS output-Correlation Matrix for drivers of Value Added Services Customer 87-88
Behavior
10.12 SPSS output -KMO and Barlett’s Test 89
10.13 SPSS output-Eigen values and variance explained 90
10.14 SPSS output-Communalities before and after extraction 91
10.15 SPSS output-Component matrix before rotation 91-92
10.16 SPSS output-Rotated component matrix 93
10.17 Relative Importance of the factors 94-95
11.1 Factors & Variables after data reduction 99
13.1 Recommendation for Data platform 103
13.2 OBD/Tele-Calling calculation 104
13.3 target set example for RMS’s 105



1. OBJECTIVE

The project has following objectives:

To understand the significance and benefits of VAS (Value Added Services) in revenue
generation.
To study and analyze Value Added Services of Reliance and its major competitors, and
learn the basics of promotions for VAS.
To make recommendations pertaining to improvement of VAS.
Up-Selling VAS and its integration with the Retail Network of Reliance
Communications.
To carry out a market research with the help of a survey and a questionnaire with
Reliance retailers and analyze the data to help the organization strategize VAS integration
with the retail network.
To carry out a market research with the help of a survey and a questionnaire with
Reliance customers and analyze the data to help the organization strategize VAS
promotions.
To make effective use of various management and statistical tools and segment the
customer base for effective target and promotion.



2. INTRODUCTION
2.1 BACKGROUND

India, like many other countries of the world, has adopted a gradual approach to telecom sector
reform through selective privatization and managed competition in different segments of the
telecom market.

To begin with, India introduced private competition in value-added services in 1992 followed by
opening up of cellular and basic services for local area to private competition. The Telecom
Regulatory Authority of India (TRAI) was constituted in 1997 as an independent regulator in this
sector. Competition was also introduced in national long distance (NLD) and international long
distance (ILD) telephony at the start of the current decade.

Despite asymmetry in initial market endowments between public sector incumbents and private
operators, the act of opening up of the market unleashed dynamism that was hitherto latent in the
sector.

Three types of players now exist in ' Telecom Industry India ' community -

• State owned companies like - BSNL and MTNL.
• Private Indian owned companies like - Reliance communications and Tata Teleservices.
• Foreign invested companies like – Vodafone, Bharti Tele-Ventures, Escotel, Idea
Cellular, BPL Mobile, Spice Communications etc.

The Indian mobile services market is highly competitive with six to eight players operating in
each of the 23 telecom circles that the country is divided into. The intensity of competition has
increased in recent months following the launch of GSM services by Reliance Communications
(RCom) and Tata DoCoMo, CDMA services by Sistema Shyam; and the continuing pan-Indian
GSM rollout by Aircel, Idea Cellular (Idea), and Vodafone Essar (Vodafone). The competitive
intensity is expected to increase even further as new licensees launch their services and Mobile
Number Portability (MNP) is introduced in India.

The recent increase in competition in the Indian mobile services market is evident from the
aggressive tariff plans being introduced by players, a move that has led to a decline in the
average revenue per user (ARPU), revenue growth, and profitability of the industry. Besides,
profitability of the mobile service providers is also being impacted by the increasing share of low
ARPU subscribers in incremental additions, the bulk of which is happening in the semi-urban
and rural areas where the mobile penetration rates are still low.

While India remains one of the fastest growing mobile services markets globally by subscriber
addition and still presents an opportunity for further growth, the rates of revenue growth and


margins of the mobile service providers are expected to decline as the intensity of competition
increases further.

Although some of the incumbent operators with strong financials, extensive networks, and larger
share of high paying customers would be better positioned to withstand the kind of competitive
pressures anticipated, high capital expenditure on 3G may well lead to continued negative free
cash flows and push up funding requirements. Intensified competition and the aggressive pricing
strategies adopted by the existing operators could challenge the sustainability of the new entrants
as breaking even at lower tariffs would take longer.

This would also imply delay in the generation of positive cash flows for the new entrants. Given
this scenario, it is likely that the Indian mobile services market would see some consolidation
over the medium to long term.

2.2 PURPOSE AND SCOPE
The main purpose of this project is to understand the various verticals of marketing function at
Reliance Communications for its Value Added Services (VAS). An in-depth analysis of the data
platform and customer base was done based on the primary data available, in order to gain
insights into the consumer behavior patterns. Based on these patterns further studies were
conducted to develop revenue generating models for the company.

This project helped me in gaining insights about how a telecom firm is dealing with the existing
price war, declining revenues and increasing competition and the importance of VAS in revenue
generation. It is an opportunity for me to be a part of the corporate world. Further, it will also
help in reaching my objective of understanding and analyzing the telecom industry as a whole.

The scope for doing this project is limited to the geographic boundaries of Delhi and NCR and
the data that is available while conducting the studies. The resources available are utilized to the
optimum. It will help me to understand the highly competitive environment and means of
tackling the surmounting pressure over the telecom sector.


2.3 METHODOLOGY
To achieve the objective of the project following methodology will be used.

Research Work

• Understanding the work though communication with its employees.
• Tele calling customers in order to gain insights into their feedback
• Visiting various Reliance mobile stores and reliance world stores to gain feedback
• Reading annual reports of company and its competitors.
• Reading papers published by ICRA, IMRB and other market research firms, on industry
analysis of telecom sector.

1. VAS Market Analyses

• Understanding the project through communication with its employees.
• Learning about the VAS products and services by going through R-world i.e. the Data
Platform of Reliance/ Voice Portal/ CRBT and SMS- services, to know and understand
the product.
• Comparison with other operators regarding their Data Platform and Voice Portal.

2. VAS Promotion

• Out Bound Dialing (OBD) and Message promotion to customer’s MDN i.e. creating a
SMS Blast.
• Segregating various customers on basis of their current balance and promote accordingly,
for which queries are run on Microsoft Access and respective MDN’s are retained for
OBD and Promotional Messages.
• Going through daily customer base for in-bound and out-bound calls and check the
conversion rate.
• Designing campaigns on statistical analyses software i.e. SAS Marketing Automation,
for promotional messages.
• Visit INDIA Calling which is the Reliance Communication’s approved Tele-calling
agency and check the work flow and help improve efficiency and effectiveness of
contactibility of customers and promote VAS more effectively to increase the conversion
percentage.


3. Up-Selling VAS through Retail Network & Training to customer touch points for
promotion of VAS

• Field work which involves visiting various locations under each cluster, all around the
city and communicate with RMS’s and RW’s.
• Visiting various sales channels and motivate them to push for sales and help with any of
their queries regarding VAS.
• RETAIL Integration: Reaching the retail network and integrating it with VAS and
introduce sales through this retail network, motivating them through various incentives.
Initialize the process with a survey research and analyze the retailer’s behavior followed
by the launch of e-Retailer.
• Training to Customer Touch Points for promotion of VAS and hence increase the sales. It
involves setting up a training program for all the customer touch points at the head office
(Delhi circle) and train them about VAS through presentations and discussions and push
them for sales and revenue generation through VAS.
• Field visits to various channels and collecting feedback, report the Head Office. This
helps in keeping a track of where the project is heading through the retail channel.

4. Market Research to analyze Customer Behavior regarding VAS

• Designing of the questionnaire aiming at the awareness, liking and usage of Value Added
Services by Reliance subscribers.
• Getting the questionnaire filled by the customers and take their feedback.
• Analyzing the data collected using Statistical tool SPSS 13.0 for Windows.
• Report preparation.



3. REVIEW OF LITERATURE

RNCOS, May 2008, “Indian Telecom Analysis (2008-2012)”
(www.research and markets.com)

The report provides a detailed study of the Indian telecom sector and gives an analysis of the
competitive environment in the industry. It gives an insight into the fixed, mobile, Internet and
broadband services in terms of players, number of subscribers, and market share in India. The
report also discusses the growth drivers, opportunities, and future outlook of the Indian telecom
sector to help clients identify growth opportunities in the market.

With a strong population of over 1.1 Billion, India has become one of the most dynamic and
promising telecom markets of the world. In recent times, the country has emerged as one of the
fastest growing telecom markets in the world. During 2003-2007, the country witnessed the
number of phones increasing more than triple and total tele-density rising from 5.1% to 18.2%.
The major key findings from this report are as follows:

• The total telecom subscription in India surged at a CAGR of over 38% from fiscal 2003
to fiscal 2007, making the country the third largest telecom market in the world.
• Mobile phones accounted for 80.2% of the total telephone subscriber base at the end of
March 2007.
• The Internet subscriber base in the country, as on March 31, 2007, stood at 9.3 Million as
compared to 6.9 Million on March 31, 2006 registering a growth of 34.8%.
• By fiscal 2010, Indian will require around 330,000 telecom network towers.

To meet this enormous need, the telecom operators are resorting to network infrastructure
sharing.
The major key issues & facts analyzed are as follows:

• The current scenario of the Indian telecom sector.
• The factors critical to the success of the industry.
• The opportunities exist for the Indian telecom market.
• The future outlook of the telecom market in India.
• The emerging technologies in the Indian telecom sector.
• The major players in the Indian telecom market and how are they performing.


Impact of Increased Competition on Mobile Service Industry:
(www.icra.in)

The report provides an overview of the financials of the telecom industry and various players in
the Indian telecom sector. It gives a detailed analysis of the competition prevalent in the Indian
telecom industry. It summarizes the reasons for declining revenues, increasing price war,
increasing rate of customer attrition and also the importance of value added services for mobile
service providers.

The facts that the report presents are as follows:

• The Indian mobile services market is highly competitive with six to eight players
operating in each of the 23 telecom circles that the country is divided into.

• Most telecom operators reported a decline in revenues from mobile services in Q2, 2009-
10 despite growth in their mobile subscriber base.

• With mobile penetration in the urban areas having reached high levels already (urban
tele-density was 87.18% as against rural tele-density of 15.35%, both as in June 2009),
subscriber additions are expected to happen largely in the semi-urban and rural areas,
which in turn would impact ARPU further.

• With TRAI recommending introduction of MNP, the domestic telecom sector appears
poised for a paradigm shift. The reasons for seeking the introduction of MNP are
compelling: to promote competition among mobile service operators so that service
levels can improve further and to provide users the right to change operators at minimal
cost and with minimal inconvenience.

• Currently, the contribution of VAS to the total mobile revenues of Indian telecom
operators is just 9-10%, which is significantly lower than the same of operators in the
developed markets.


Mobile Value Added Services in INDIA:
(A Report by IAMAI & eTechnology group @ IMRB)

The report provides a clear and precise definition of MVAS, its various categories existing in
India, the MVAS still evolving and thus changing ecosystem along with the current revenue
sharing scheme between various entities, its drivers and barriers along with its future in India.

The facts that the report presents are as follows:

• The Current Mobile VAS industry is estimated at Rs. 5780 crore by end June 2008 and is
estimated to grow steadily at 70% over the next two years to touch Rs. 9760 crores by
end June 2009 and Rs.16520 crores by end June 2010.

• MVAS currently contributes around 9% to the operator’s revenue. It is expected to grow
over 12 % by June 2010.

• As ARPU declines, the challenge for operators is to increase revenues by differentiating
their offerings and develop alternative revenue streams by offering more value added
services to the existing subscribers.

• In terms of market share, 92% of the subscriber base in India is on pre-paid connection,
with the remaining 8% on post-paid subscriptions. This has also given rise to
opportunities for generating increased revenue, through exploring potential Value Added
Services (MVAS) like subscription packs of news, alerts etc and more exclusive roaming
services tailored to pre-paid subscribers.

• Decrease in ARPU despite increase in MOU: Though the subscriber base is growing at
a rapid pace and has positively impacted industry revenues, operator margins also have
shrunk owing to competition and lower “Average Revenue per User” (ARPU) as the
major growth is coming from bottom of the pyramid. As ARPU declines and voice gets
commoditized, the challenge is to develop alternative revenue streams and retain
customers by creating a basis for differentiation in high-churn markets.

• Need for differentiation: There is a greater need among the telecom operators to
differentiate themselves from each other.



4. INDUSTRY
4.1 INTRODUCTION
The telecom industry is one of the fastest growing industries in India. India has nearly 200
million telephone lines making it the third largest network in the world after China and USA.
With a growth rate of 45%, Indian telecom industry has the highest growth rate in the world.
History of Indian Telecommunications started in 1851 when the first operational land lines were
laid by the government near Calcutta (seat of British power).

Telephone services were introduced in India in 1881. In 1883 telephone services were merged
with the postal system. Indian Radio Telegraph Company (IRT) was formed in 1923. After
independence in 1947, all the foreign telecommunication companies were nationalized to form
the Posts, Telephone and Telegraph (PTT), a monopoly run by the government's Ministry of
Communications. Telecom sector was considered as a strategic service and the government
considered it best to bring under state's control.

In 1986, two wholly government-owned companies were created: the Videsh Sanchar Nigam
Limited (VSNL) for international telecommunications and Mahanagar Telephone Nigam
Limited (MTNL) for service in metropolitan areas.

Telecommunication sector in India can be divided into two segments: Fixed Service Provider
(FSPs), and Cellular Services. Fixed line services consist of basic services, national or domestic
long distance and international long distance services. The state operators (BSNL and MTNL),
account for almost 90 per cent of revenues from basic services. Private sector services are
presently available in selective urban areas, and collectively account for less than 5 per cent of
subscriptions. Cellular services can be further divided into two categories: Global System for
Mobile Communications (GSM) and Code Division Multiple Access (CDMA). The GSM sector
is dominated by Airtel, Vodafone-Hutch, and Idea Cellular, while the CDMA sector is
dominated by Reliance Communications and Tata Indicom. Opening up of international and
domestic long distance telephony services are the major growth drivers for cellular industry.

India surpasses the USA as the world’s second largest mobile market. The last five years have
witnessed the number of phones more than quadruple in India, taking the total number to 300.5
million at the end of March 2008. 73.7% of the country’s mobile customers are subscribed to
GSM and the remainders are CDMA customers.

Mobile growth is forecasted to remain in the double digits until the end of the forecasted period,
with an average growth rate of 22.8% between 2007 and the end of 2012. At that time, mobile
subscribers are forecasted to have reached 643.0 million and a penetration rate of 51.8%.With
over 1.1 billion inhabitants and a highly competitive telecom market, India is and will remain
one of the world’s most dynamic and promising telecom markets for the next five years, even
surpassing China in terms of market vitality.



Fig 4.1 Source: Operator's Website, Press Release & Regulatory

4.2 MARKET STRUCTURE

Telecom reforms across the world are energizing businesses and people. Long considered a
natural monopoly, recent technological developments have facilitated competition in this sector
leading to increased access to telecom services and gains in efficiency and quality of service.
India has emerged as an international destination for processing and distribution of information.

Availability of infrastructure for electronically transferring and assessing information are critical
to maintaining the competitive advantage that it currently enjoys and embracing telecom reforms
is a part of achieving that goal. Though the results of telecom reforms the world over have been
positive on average; domestic political economy and institutions have impacted every country
experience and India is no exception. India’s economic liberalization program began in 1991.


Aimed at raising the economy from low-growth equilibrium and putting it on a sustained growth
path, these reforms targeted a wide range of sectors – from international trade to finance and
infrastructure. Following these reforms, traditional sectors such as agriculture and industry that
used to contribute nearly 70 per cent of the GDP now constitute an increasingly smaller share of
economic output.

Simultaneously, there has been rapid growth in the service sector that now contributes nearly 48
per cent to GDP (1998) and is growing at 8 per cent per annum. Indian policy-makers also
increasingly recognized the need for reforms and investment in telecommunication infrastructure
in order to realize the forecasted economic and social growth rate of the country. It has been
shown that investment in telecommunications infrastructure leads to economic growth in various
ways. While telecommunication investment itself leads to growth by creating a demand for the
goods and services used in their production, the economic returns on this investment are far
greater than the returns from the investment alone. The multiplier effect of telecom investment
on GDP is likely to be higher because of both the direct and indirect effect that this investment
has on production.

However, it has also been shown that since telecommunications infrastructure is characterized by
network externalities the positive growth effects of investment in this sector are subject to having
achieved a critical mass in a given country’s communications infrastructure.

4.3 COMPETITION IN THE MARKET
A characteristic of telecom industry is heavy dependency on Advertisement and Promotional
Strategies-Each company viz. Airtel, Vodafone, Reliance Communications, Tata Indicom and
Aircel spend lots of funds on acquiring Indian movie stars and sport stars. Thus due to the cost of
heavy expenditure on Advertisement the industry is more or less a very heavy revenue
generating industry for a lot of other sectors. A characteristic of this kind of Competition is the
close interdependence between the different companies regarding each company’s policy
decisions. These companies have to monitor each activity of its competitors and even a little
ignorance can prove very costly. Like, when Reliance started the ONE-INDIA plan, Airtel,
Vodafone and others also started and pushed similar plans. In this kind of competition the major
players occupy a very high market share and these players could dictate terms for the other
players but in Indian Telecom Industry all the players are very close in terms of market share so
the question of dictating terms comes only when a company takes the First-mover Advantage.
Then it could dictate terms for the particular time period but again the other companies are
always at their heels so the question of keeping the advantage for a long time doesn’t seek in.



5. COMPANY PROFILE: RELIANCE
COMMUNICATIONS LIMITED

5.1 INTRODUCTION
Reliance Communications Limited founded by the late Shri Dhirubhai H Ambani (1932-2002) is
the flagship company of the Reliance Anil Dhirubhai Ambani Group. The Reliance Anil
Dhirubhai Ambani Group currently has a net worth in excess of Rs. 63000 crore, cash flows of
Rs. 12000 crore, net profit of Rs. 8000 crore and zero net debt.

RCOM is India’s largest integrated and fully converged communications service provider in the
private sector, and has been rated among “Asia’s Top 5 Most Valuable Telecom Companies”.
Reliance Communications is India's foremost and truly integrated telecommunications service
provider. The Company, with a customer base of over 100 million including over 2 million
individual overseas retail customers, ranks 4th among the Top 10 Telecom companies in the
world by number of customers in a single country.

Reliance Communications corporate clientele includes 2,100 Indian and multinational
corporations, and over 800 global, regional and domestic carriers. Reliance Communications has
established a pan-India, next generation, integrated (wireless and wireline), convergent (voice,
data and video) digital network that is capable of supporting best of- class services spanning the
entire communications value chain, covering over 20,000 towns and 450,000 villages.

It owns and operates the world's largest next generation IP enabled connectivity infrastructure,
comprising over 175,000 kilometers of fiber optic cable systems in India, USA, Europe, Middle
East and the Asia Pacific region. The Reliance Communications network consists of 60,000
kilometers of optical fiber cables spanning the length and breadth of India. These cables can
carry thousands of billions of bits per second and can instantly connect one part of the country
with another.

This physical network and its associated infrastructure will cover over 600 cities and towns in 18
of the country's 21 circles, 229 of the nation’s 323 Long Distance Charging Areas and broadband
connectivity to over 190 cities. This infrastructure will be backed by state-of-the-art information
management systems and a customer-focused organization. Reliance Communications objective
is to create value for our customers. Reliance will innovate ceaselessly so that state-of-the-art
technology can be leveraged to create products and services that are affordable. Reliance has a
demonstrated track record of conceptualizing, and executing complex, multi-billion dollar
projects in a timely and cost effective manner. Reliance Communications is committed to
delivering products and services of world class quality to customers. It has attracted the best
people in each of its businesses, by empowering people, providing attractive growth

opportunities, and creating a world class working environment. Reliance Communications
believes that knowledge resides in people, and has, accordingly, always built its growth plans
around people. It is a youthful enterprise, with a strong entrepreneurial spirit, fostering an
environment that facilitates informality and flexibility, and emphasizes depth of planning and
speed of execution.


The following attributes define future leadership at Reliance Communications:

• Customer centricity.
• Initiative and an attitude of ownership.
• Passion for excellence and an ability to energize.
• Problem solving and an innovative "can do" mindset.
• Entrepreneurship and stretch.

The strong underlying fundamentals of the Indian economy, and the latent demand potential in
our markets, provide the platform for building world scale businesses. Reliance Communications
leadership in its several businesses is centered around its ability to build world scale assets,
obtaining the benefits of economies of scale, and competing on an even level with the global
peer group.


Reliance Communications leverages its core competencies to create a sustainable competitive
advantage in its various businesses. Today, Reliance Communications is revolutionizing the way
India communicates and networks, truly bringing about a new way of life.

5.2 VISION
Reliance Communications has a vision to leverage its strengths to execute complex global-scale
projects to facilitate leading-edge information and communication services affordable to all
individual consumers and businesses in India. It also aims to offer unparalleled value to create
customer delight and enhance business productivity. It also focuses on generating value for their
capabilities beyond Indian borders and thus enabling millions of India's knowledge workers to
deliver their services globally.

5.3 BUSINESS MIX

Fig 5.2 Source: Annual Report of Reliance Communications, 2007-2008



6. VALUE ADDED SERVICES

6.1 INTRODUCTION

As we have seen, Telecommunication has moved beyond providing just basic voice calls. The
mobile phone has evolved from a mere communication device to an access mode with an ability
to tap a plethora of information and services available in the ecosystem. This is the reason why it
is now being referred to as the ‘fourth screen’, after Cinema halls, Television and PC.

Defining VAS

But the fundamental question that remains is how VAS is defined. A clear MVAS definition is
not only required to clear the air among the MVAS providers but it will also have an impact on
the dynamics of the Value chain. A detailed definition of VAS might have an impact on the
licensing issues surrounding VAS.

Let’s look at different VAS definitions floating in the market.

Basic definition of a VAS

Value Added Service (VAS) in telecommunication industry refers to non-core services, the core
or basic services being standard voice calls and fax transmission including bearer services. The
value added services are characterized as under:-

• Not a form of core or basic service but adds value in total service offering.
• Stands alone in terms of profitability and also stimulates incremental demand for
core or basic services
• Can sometimes be provided as stand alone.
• Do not cannibalize core or basic service.
• Can be add-on to core or basic service and as such can be sold at premium price.
• May provide operational synergy with core or basic services.

A value added service may demonstrate one or more of these characteristics and not necessarily
all of them. In some cases, the value added service becomes so closely integrated with the basic
offering that neither the user nor the provider acknowledge or realize the difference. A classic
example is of P2P SMS. Some of the operators do not consider P2P SMS as part of their VAS
revenue.


Definition as per TRAI

In the Unified Access Service License (UASL), VAS is defined as follows-

“Value Added Services are enhanced services which add value to the basic teleservices and
bearer services for which separate licence are issued”

The Government of India issues licenses for the following Value Added Services:-
1. Public mobile trunking service
2. Voice mail service
3. Closed users group domestic 64 kbps data network via INSAT satellites system
4. Videotex service
5. GMPCS
6. Internet
7. Audiotex
8. Unified messaging service

The above definition supports a free market but can be broadened to incorporate new service
categories and
players in the supply chain.

For mobile telecommunication market, a simple definition of VAS would be-

Mobile Value Added Services are those services that are not part of the basic
voice offer and are availed separately by the end user. They are used as a tool for
differentiation and allow mobile operators to develop another stream of revenue.

6.2 NEED FOR MVAS

Over the last 5 years, the telecom industry has understood the importance of MVAS. Given the
declining ARPU and increasing competition among operators it’s imperative to focus on
alternate revenue streams. That’s where there is a felt need for capitalizing on the Value Added
Services Market.

The reasons for the increasing importance of MVAS can be classified as:

• Decrease in ARPU despite increase in MOU: Though the subscriber base is growing at a
rapid pace and has positively impacted industry revenues, operator margins also have shrunk
owing to competition and lower “Average Revenue per User” (ARPU) as the major growth is
coming from bottom of the pyramid. As ARPU declines and voice gets commoditized, the

challenge is to develop alternative revenue streams and retain customers by creating a basis for
differentiation in high-churn markets.

• Need for differentiation: There is a greater need among the telecom operators to differentiate
themselves from each other.

• Number of Licensees: With increasing number of licensees (98 UASL, and 37 cellular
licenses) in the telecom space the average numbers of operators in many circles have
increased to 5-6 operators offering more choices to the consumer. Thus the competition
among the operators has increased tremendously. Therefore it is very important for them
to differentiate themselves from the others. Now that voice has got commoditized these
operators are using MVAS for their differentiation and marketing these services heavily
for creating awareness among the consumers.

• Decreasing Call Rates: In order to attract consumers with relatively low purchasing
powers primarily from Semi Urban and Rural India the operators have drastically
reduced the call rates making it affordable to even the lower segment of society. The
tariff in India is one of the lowest at Rs.1 per minute as compared to the tariff in
developed nations like USA and UK where the call rates are Rs.13 and Rs7-8
respectively.

Country Tariff Charges
(approx.)
USA Rs 13 per min
UK Rs 7-8 per min
France Rs 7-8 per min
Brazil Rs 6 per min
India Rs 1 per 2 min

Table 6.1 Source: Broadband and Internet India

• 3G bidders who are non operators: The arrival of new technologies will give rise to
greater competition as many non operators are also bidding for the 3G licenses.
Department of Telecom has planned to allow five 3G operators in each circle depending
on the availability of spectrum. Therefore there would be a greater need to differentiate
one self in order to attract new customers and retain the existing ones.


• Saturation in Metro and Urban Market: The metro/urban areas offer high level of
penetration and have significant mobile subscribers. In such a highly saturated market
with the entry of MVNO’s the competition will get fierce. Therefore capitalizing on value
added services will give operators opportunity to increase ARPU by providing premium
services.

Metro Circle Mobile
Penetration

Delhi 90%
Mumbai 70%
Chennai 89%
Kolkata 47%
Punjab 46%

Table 6.2 Source: Broadband and Internet India

• Increasing need and demand from consumers: In addition to the above supply side
reasons the ‘pull effect’ from consumers asking for more than just basic telephony is also
a key driver for MVAS services. Today most of the consumers are seeking more from
their communication device apart from just mobility and desire to stay connected.

6.3 UNDERSTANDING DIFFERENT MVAS CATEGORIES

All the value added services address some need of the end consumer whether it is psychological,
monetary or convenience. Based on the need fulfillment of the end user, we have grouped
Mobile VAS into three broad categories.

• Entertainment VAS -

The key differentiating factor of Entertainment VAS is the mass appeal it generates.
These provide entertainment for leisure time usage. These not only generate heavy
volume (owing to its mass appeal) but also heavy usage. An example of these kinds of
services is Jokes, Bollywood Ringtones, CRBT (Caller Ring Back Tone) and games.
These services continue to be popular and have been key revenue generators for the
Indian mobile VAS market. This is a high value MVAS and will continue to show
growth. Other popular Entertainment VAS driving the market are dating and chatting

services. The service was first introduced 2 years back and is now being offered by all the
operators. Each circle generates about Rs 30 lakhs per month. This service is not only
growing fast but also witnessing less churn as compared to other MVAS. Owing to its
sticky nature, it requires comparatively less marketing efforts and cost. Entertainment
VAS has the potential to remain a key contributor to Mobile VAS industry. To sustain the
MVAS growth, it is the responsibility of the industry to keep discovering/innovating
killer applications like CRBT (Caller Ring Back Tone) at regular intervals

• Info VAS-

These services are characterized by the useful information it provides to the end user.
The user interest comes in from the personal component and relevance of the content.
Apart from mobile, alternate modes are available to access Information VAS like
Newspaper, TV, and Internet. E.g. of Info VAS is information on movie tickets, news,
banking account etc. They also include user request for information on other product
categories like real-estate, education, stock updates, etc. Information VAS needs to target
the right person at the right time with the right content.

• mCommerce VAS (Transactional services)-

These are the services which involve some transaction using the mobile phone. An
example of this kind of service is buying movie tickets using mobile phone or transfer of
money from one bank account to the other. These can broadly be classified into 2 types -
Mobile banking and Mobile payments. Though in a nascent stage, off late many initiative
have been taken in mCommerce space. A number of application providers are in the
market with different business models. Some are focusing on mpayment, some on
incorporating mCommerce into it while others on mbanking aspects. This year has seen
the launch of mbanking service by Indian’s largest private sector bank which has given
mbanking a much needed thrust. Almost all the operators are conducting pilot exercises
for mCommerce services using different access modes like GPRS, USSD, STK, etc. A
big boost to mcommerce has come from the RBI which recently came out with some
guidelines. mCommerce penetration continues to be small but awareness is increasing.
Operators are betting on technologies like USSD to make the service handset agnostic.
The current marketing focus is primarily on mobile bill payment and mbanking. Industry
is betting on tripling number of mCommerce users within this year. This is discussed in
greater detail in the subsequent sections.


ENTERTAINMENT INFORMATION MCOMMERCE
VAS VAS
These are the services
These services provide which provide some These are the services
entertainment foe useful information to which involve some
Definition leisure time. These the end user. The user transaction on mobile.
services usually interest comes from
generate mass appeal. personal or relevant
component of the
content.
Entertainment VAS is Information VAS is mCommerce is
driving the VAS market getting popular with currently in embryonic
Current Status both in terms of different categories stage.
volume and revenue. depending on the
relevance.
Industry focus is on Entities using mobile as RBI guidelines are
Entertainment VAS another channel to expected to give a big
with new players deliver information is boost to mBanking.
coming from media and driving Information
Drivers movie houses. Eg: VAS. Eg: Stock update,
STAR, Rajshri. bank account
information etc.

Currently, music is the 1. Marketing is the 1. Identifying the best
biggest component. biggest challenge access mode for
Challenge is to drive since information mCommerce is the
the other content and need differs across biggest challenge.
services like games. different segments. 2. Handset
2. Credibility of the penetration and
source is another usage of GPRS is
challenge since low in India.
Challenges there are various 3. Security concerns.
other alternative
sources for
Information VAS.
It is expected to remain It is going to be key to It has the potential to
the VAS driver for next address the needs of become one of the key
Future Status
few years. growing rural market. drivers of VAS once the
security concerns are
addressed.
Table 6.3: Different MVAS categories


6.4 PILLARS OF MVAS

The growth of MVAS is based on 4 pillars- Access devices, Content, Technology and
Infrastructure.

Fig. 6.1
Source: Mobile Value Added Services in INDIA:

1. Access devices

Access devices play an important role in the usage of different MVAS categories. The lack of
features like GPRS, GPS, Java in handsets make a number of MVAS futile. Therefore the
affordable availability of such features is a key factor in determining the size of the target
audience to a large extent. A recent example is service operators preference for USSD as an
mpayment mode instead of GPRS for the simple reason that USSD is handset agnostic. Another
access device which will soon see the light-of-the-day in India is MID (Mobile Internet Devices).
Even technology companies like Intel are increasing the power of mobile platforms with a
specially designed low cost processor called Atom.


2. Content

Is content really the king? It does not seem so, looking at the percentage revenue share collected
by Content aggregators and Content owners of the total MVAS pie. Add to it the pirated content
and side loading in the India market; it does not present a rosy picture. The content depends a lot
on geography and is not transportable across borders. Both IPR (e.g. music label) and white label
content (e.g. cricket) is available in the market. But on the other hand, much of the content being
consumed is being generated for other media. But because of the same reason we say a wide
variety of content being available especially in the Entertainment category. For content
aggregators/developers/owners to play a significant role in the category, relevant content needs
to be generated. They need to play a larger role from merely being a content aggregator and
transporter. Investment needs to be made keeping in mind the long term benefit and not the short
term ROI. Another factor which impedes the content development is marketing of MVAS. A lot
of content and services die prematurely or do not realize their full potential because of lack of
sufficient and focused marketing efforts. Currently, packaging and marketing of content is
primarily in the hand of operators. The stakeholders are currently not sharing the burden again
citing reasons of lack of sufficient returns. Regional content will give a boost to the MVAS
market. It has tasted success in the Indian market but the challenge is to generate relevant content
not only catering to regional differences but also in different languages.

3. Infrastructure

Infrastructure requirement needs to be met to harness the potential of different technologies.
Setting up infrastructure especially in the rural areas is going to play a major role in the growth
of MVAS.

4. Technology

There are 2 aspects to technology. One is the technology platform itself and the second is the
communication
technology.

On one hand technology platforms are independent of geography and are transportable across
borders unlike content which needs to have a regional flavor for e.g. mobile payment platform,
IVR, etc. Though there are challenges in case of platforms like speech recognition given the high
number of languages and dialects spoken in India. Communication technology is also
independent of geography but depends on regulation issues for e.g. 3G


6.5 UNDERSTANDING THE ROLE OF VARIOUS ENTITIES

Content Aggregators/Developers:

The MVAS growth has given birth to a new entity which aggregates content originally designed
for some other media, from different sources. Some of the content aggregators also develop
content especially for mobile phones for e.g. mobile games. On one hand they coordinate with
operators and on the other, with content owners and smaller aggregators. Another key role
played by them is handling of the IPR related issues - thus reducing the burden of the mobile
operators.

Content Owners

These are the actual owners of the content who hold the copyright of the same. Though the
content is developed for some other media, the MVAS has started contributing significantly to
their overall revenue generation. A good example is of CRBT which is giving good revenue to
the music labels. They mostly provide content to Content Aggregators but also some times
interact directly with the operators. In recent cases, Content owners sell the content directly to
handset manufacturers for e.g. Nokia tied up with Om Shanti Om providing exclusive songs,
wallpapers, games, etc.

Traditional Media Companies

Media companies like TV channels and FM channels have also joined the bandwagon. All the
big TV channels have started selling their content through short codes. STAR has even launched
a mobile division named STAR Mobile Entertainment to provide mobisodes and mobile related
content. The key revenue source for the media channels is Voting in shows like Indian Idol and
contest participation in shows like Paanchvi Paas. Post the success of talent hunt shows and
contests like KBC, the TV slots have been flooded with such shows and other reality shows.
Though the initial euphoria has not sustained, voting and contest participation continue to
contribute significantly.

Technology Enablers

Technology partner & platform enablers handle software platforms and authoring tools. Thus
they provide the backbone to all the MVAS being provided. The technology backend include
solutions like Televoting system, Voice portal, etc.


Short Code Providers

These are the companies who own a short code (e.g. 58888, 53456 etc) which is sold to a third
party client for some keyword and a specific period. On one hand they need to tie up with the
operators to ensure their short code works across subscriber base and on the other hand they sell
their short code to other companies like real estate, hospitals, etc. who advertise their products
using the short code.

Handset manufacturer

The handset manufacturers have joined the bandwagon and have started tying up with Content
owners to provide pre loaded content on their handsets.

Content converter
Since most of the content in MVAS is originally designed for some other media, it needs to be
converted into mobile compatible format. This is where content converters enter the value chain.
They interact with the operators and work closely with them.

Fig. 6.2
Source: Mobile Value Added Services in INDIA:


6.6 MOBILE VAS ACCESS MODES

The growth of MVAS market is dependent on the various modes available to the end consumer
for accessing MVAS. Presently, the modes of MVAS access can be classified as:

Short Message Service (SMS) Platform

SMS was the first mode introduced for accessing MVAS. MVAS market is currently dominated
by SMS in terms of revenue. The SMS platform is used by telecom operators to provide a variety
of services such as information services like news alerts, cricket scores, chatting services, etc.

Voice Platform

Interactive Voice Response (IVR) system is used to deliver Voice based Value Added services to
the consumers. In this system, the end user interacts with a computerised system to tap the
service. The end users can select the options available on the service either through numbers on
the keypad or using speech recognition system. Voice based services are offered in a variety of
languages to cater to the diversified Indian population. This mode becomes more significant
when dealing with the non-metros and rural India. Voice access contributes to more than one-
third of the total MVAS revenue

GPRS/WAP Platform

GPRS currently contributes around 6-7% of the overall MVAS revenue. The high price of data
access acts as a barrier towards usage of GPRS. The primary drivers for the adoption and usage
of mobile internet are availability of cheap data-enabled handsets and lowering of GPRS tariff by
mobile operators. GPRS is an effective medium of accessing MVAS, but is restricted by
relatively lower consumer base.

Unstructured Supplementary Services Data (USSD) Platform

USSD is a session based mechanism for delivery of service to the end consumer. The services
are delivered through a continuous interactive session, unlike SMS where the interaction needs to
broken to separate messages. USSD presently contributes around 2-3% of the MVAS revenues,
but the industry holds a positive perspective towards its adoption as a means of accessing
MVAS.


Multimedia Message Service (MMS) Platform

MMS allows sending messages that include sending multimedia objects such as images, audio
and video along with text messages. MMS market in India is still in a nascent stage. Presently,
the growth of this segment is restrained by high-price and limited availability of MMS handsets
in India. The current MVAS market is estimated at Rs 5930 crore as on June 2008. The market is
currently dominated by SMS as the mode of accessing MVAS.
SMS contributes around 49% to the overall MVAS revenues. This consists of P2P, A2P
and P2A services.

Fig.6.3: VAS Revenue Access Modes



7. VALUE ADDED SERVICES (VAS)
MARKET ANALYSIS

7.1 INTRODUCTION

The goal of market analyses is to determine the attractiveness of a market and to understand its
evolving opportunities and threats and relate it to the strengths and weaknesses of the firm and its
product/service.

First task is always to know all about your field of work, the market for which the product is
meant, the technology involved and your product itself. Before setting my feet into the
department and extending my work responsibilities, my first job is to know everything about the
product, its market and services offered through VAS in Reliance.

Under the initial step of market analyses, following are the areas to study and look upon:

• Know your product: A detailed study of all the VAS products and services of Reliance
Communications.
• Know the technology and the market
• Who are your customers: Know the customer base for these services and to push and
promote VAS throughout my term of internship.
• What is the worth: Study the percentage revenue added through VAS.
• Know your competitors: A detailed comparison of VAS Data Platform (R-World) at
Reliance with all other major Telecom players in the market.

7.2 VAS ACCESS DEVICES

For access of Value Added Services, feature rich handsets are needed which enable easy access
and display/storage of contents. There has been phenomenal growth in mobile subscriber base
but the low feature handsets continue to be in majority. Basically price is the biggest driver in
purchasing of handsets. The lack of feature rich mobile handsets thus continues to be a barrier to
the growth of Mobile Value Added Services. It is expected that the prices of feature rich mobile
handsets will decline with increasing competition among manufacturers and also because of
technological advancement.


GPRS Handsets

Currently the penetration of GPRS enabled handsets are close to 26% in India as against 99% in
South Korea and 76% in Japan. Of the total mobile subscribers in India 65 million possess
GPRS-enabled handsets. Of all those who posses GPRS enabled handsets only 20-25% of them
have got the GPRS activated and only about 15% use it. Even in case of developed nations like
South Korea and Japan not more than 50% of the subscribers owning GPRS enabled handsets
use it. Shown under in fig 7.1

Fig. 7.1
This clearly indicates that the consumer today engage more in text based services than the web
based applications. Therefore for MVAS to grow to its full potential the handset manufacturers
will have to look at ways to manufacture GPRS enabled phones which are affordable and user
friendly. Moreover they would also need to increase its awareness and educate the consumers on
how to use GPRS.

3G Handsets

The market for 3G in the country is expected to be huge with over 65 million wireless
subscribers, who use their handsets to access data services on the Web. These subscribers are
currently using mobile handsets which are internet-enabled and are potential broadband
subscribers with the deployment of advanced wireless technologies such as 3G. According to
Indian Cellular Association (ICA) about 5% of mobile users already have handsets that can
workon 3G spectrum. In addition, out of all those possessing the 3G enabled handsets the
number of people who would use 3G services would be determined by the quality of content
available. Unlike most other countries, we are looking at 3G services not only as premium
services but also as an extension of 2G. Since our broadband penetration is abysmal, 3G would

provide a much required boost to it. Given that mobile phones are much cheaper as compared to
PCs, the demand for broadband on mobile is expected to be much greater. More importantly, 3G
will solve problems more in rural India. Therefore the shift towards 3G would depend on
affordability of handsets along with the quality of content available.

Bluetooth Penetration

The mobile handset market in India is worth $7-billion. The hands-free mobile revolution seems
to be revolutionizing the use of Bluetooth-enabled headsets. As a category it is now coming out
of the clutches of the accessories market and establishing a niche of its own. Established branded
mobile handset players today are actively looking at making headsets part of their package
offering to customers. India is a major IT hub and it comes as no surprise that the Indian
Bluetooth headset market is expected to grow at a compound annual growth rate (CAGR) of
74% in India vis-à-vis 48% in China. According to Industry experts, the professional headset
market in India is expected to grow at a CAGR of 21% over the next five years, which will be
driven by the contact centres and IT enterprise segment through addition of new seats and
replacement of handsets by headsets.

In the year 2007-08, India shipped close to 85 million mobile handsets, compared to 66 million
units shipped in the previous year, registering a year-on-year growth of around 29 per cent. This
could be attributed to the huge influx of ultra-low cost Chinese and operator-branded handsets
that have sharply brought down the average selling price (ASP) of entry-level handsets and
cconsumers need for changing phones as frequently as within 8-12 months. This growth is an
outcome of a burgeoning mobile services market and lower entry barriers across various
customer categories, as average selling prices of handsets is constantly falling and has gone
down to as low as Rs.599 in the wake of a highly competitive landscape with close to 25
vendors.
Handsets costing less than Rs 3,000 account for 70% on the market, and nearly half of these cost
less than Rs 2, 000. Yet interestingly the average cost of a phone sold in India is Rs5,000. This
could be attributed to the growing number of high-end phones being shipped to India. In FY
2008 EDGE and WCDMA-enabled mobile phones contributed 15.4 per cent and 3.1%
respectively of the total mobile phone shipments compared to 7.4% and 1.2%, in 2006-07.

7.3 RELIANCE Vs COMPETITORS

Though reliance is one of the largest telecom operators in India, the competition is not much far
less than being fierce. There are many telecom operators in India and more are joining in the
pool of operators through recent FDI’s and joint ventures. In a few months Delhi region will
become the only city in the world where there will be 12 telecom operators serving its people.
For any company to be successful, it shall have clear knowledge about its competitors, product
substitutes and entry/exit barriers as in accordance to Porter’s Model.


Major competitors of Reliance Communications for its Value added services are:

• Airtel
• Vodafone
• Idea
• Aircel

To study the market of VAS for Reliance Communication it is necessary to know all about the
competitor’s products and services.
Below is the comparison table of Reliance and its major competitors for Value Added Services
– DATA PLATFORM

VAS DATA PLATFORM COMPARISON

AIRTEL IDEA VODAFONE RELIANCE AIRCEL

FASHION & HOT & SPICY Under application HOT n NEW KREENA
GLAMOUR store in special KAPOOR
offers SPCL
subscribe at cover girls on FTV BEACH wallpapers, videos PLUS
various given demand, stylish BEAUTIES, and images HOLLYWOOD
charges as per riya sen, wonder FREE available HOTTIES which
your convenience girls, valentine ROMANTIC has images and
to get updates beauties VIDEOS, HOT animations
BIKINI
VIDEOS, FHM
SWIMSUIT
GIRLS, FREE
MODEL
PHOTOS


FUN ZONE PICK OF THE WHAT'S NEW HOT n NEW PICK OF THE
DAY + DIRECT DAY
LINKS
games, games, love messages, games, GAME Rs 50,
animations, animations, new zoozoos, animations, ANIMATION
wallpapers, wallpapers, new games 2010 wallpapers, Rs 15, IMAGE
videos. videos. videos. Rs 10
SEND FREE X X X X
SMS
an application
which is
downloadable and
you can send a
particular number
of free messages
daily.
SET HELLO X X CALLER X
TUNE TUNES
search hello tune Various categories
by name of song, as, Set caller tune,
movie or album music box, busy
caller tune, my lib,
copy other tune
BEST SELLERS X BEST PICKS HOT n NEW WHAT'S NEW
games, divine blessings, Ads, latest
animations and nature movies and
wallpapers downloads, games
mahamantras
LATEST MOVIES + NOT MOVIE MOVIES
MOVIE Yahoo MOVIES SPECIFICALLY MASALA
REVIEWS MENTIONED
Latest movies , Latest movies , Latest movie ad latest movies like All the latest
Bollywood Bollywood banner 3 idiots, MNIK movies and
Gossip, HOT Gossip, HOT etc. Sub videos of the
babes, Fashion, babes, Fashion categorized as , related movie @
Astrology, latest movies, Rs 10 & Rs 15
English NEWS, name of a latest
HINDI NEWS movie, hot
hollywood, young
n restless babes,
goa tamil superhit
APP CENTRAL "MENU”: a APPLICATION OTHERS SERVICES +


separate link for STORE SPECIALS
all applications
available on
IDEA.
1400+ Less applications MANNY
applications as compared to APPLICATIONS
divided among Airtel SUB
various categories CATEGORISED
ACCORDINGLY
IMAGES AND Given as a VIDEOS… DISTRIBUTED COOL
VIDEOS Direct link. DIRECT LINK / ALL OVER THE VIDEOS
PAGE
includes fashion video, categories like, some videos
animations and 2009 best movies carwash bikini, shown as icon @
wallpapers of @ Rs 15, Love studio X hotties, Rs 15
actors & actresses indi pop song, beach beauties,
based on different WWE Divas, best of splitsvilla,
categories swimsuit, classic
comedies, yoga,
wet n wild, best
of roadies, magic
in a minute,
khatron ke
khiladi, models..
Etc
MUSIC MUSIC MP3 SONGS NOTHING MUSIC
SPECIFICALLY
MENTIONED
BY THE NAME
OF MUSIC
Latest Hits, Top full songs>>> Polytones @ Rs
Chartbusters, international hits, 10, Truetones @
Bollywood Hits, bollywood latest, Rs 15 and MP3
Devotional, Best golden classics, @ Rs 15 of all
of 2009, Music bhakti sagar, full the latest songs
maestros, album @ Rs 50, a and more
Bollywood full song @ Rs Categories are
Classics, Ghazals, 25, wallpapers @ also given. Like,
Pak music, Airtel Rs 10, animations hollywood,
Jingle, Lyrics, @ Rs 15true instrumental, top
Love hits tones @ Rs 20, 10 etc.
polytones @ Rs


10

MOVIES MOVIES X MOVIE MOVIES
MASALA
includes latest movies like All the latest
animations and 3 idiots, MNIK movies and
wallpapers of etc. Sub videos of the
actors & actresses categorised as , related movie @
based on the latest movies, Rs 10 & Rs 15
movie name you name of a latest
select movie, hot
hollywood, young
n restless babes,
goa tamil superhit
GAMES GAMES GAMES GAMES GAMES
What's New- download @ Rs name of the Name of the game top games,
Games, Best 30 game, new + sub categories cricket games,
Games, Games games, cricket, like new releases, puzzle games,
Club. Priced bollywood, latest gamesgames bollywood
between Rs 30- racing, adventure, of last decade, games, action,
Rs 99 action, strategy cartoon racing,
etc.. Rs 20 gamesaction & adventure, all @
adventure, priced Rs 50 or 99.
@ Rs 49 and Rs Special games @
99 Rs 15,
Email & Chat CHAT + INTERNET GIVEN IN SERVICES +
YAHOO MAIL SOCIAL MAIL
NETWORKING
various chat
rooms available

NEWS & NEWS+ LIVE NEWS under NEWS n TV NEWS
SPORTS IBN NEWS INTERNET
NDTV news SPORTS are News>>> TOI, Headlines, aajtak general news,
room- regional given under IBN LIVE, DNA, online, Sun TV, finance news,
news, world & MENU which is a BBC, more… CNBC tv online, international
national news, separate link on UTVi online, news, sports
business news, the home page. NDTV online, news.
sports news. CNBC awaaz
SPORTS ZONE- online, Asianet
manchester Online, WOW tv,


united, ESPN BBC world news,
sports …. Almost
subscription, everything related
mobile espn, to
BPL-latest buzz,
F1 latest news,
goal.com, Roger
Federer spl,
Australian Open
SERVICES FOR SERVICES INTERNET
YOU
m-commerce- community, Business &
airtel bill yahoo mail, book Finance>>>
payement, airtel your tickets, money control,
recharge, movie, astrology BSE, NSE,
air tickets, CNBC, TRACK
recharge DTH, YOUR STOCKS
DG toll,
shopping,
insurance. m-
banking, mobile
apps, important
alert, wayfinder
nnavigator, get
DTH- spl offer,
get broadband.
Sensex, security
FULL TRACKS X MP3 SONGS FULL SONGS
Timeless classics, full songs>>> latest movie
Valentines spl. international hits, names with song
Full songs @ Rs bollywood latest, name and a few
20. many songs golden classics, more categories.
mentioned there bhakti sagar, full Download @ Rs
for download. album @ Rs 50, a 25
full song @ Rs
25
HOLLYWOOD X WHAT'S HOT HOT n NEW WHAT'S HOT
SIZZLERS
GAMES SHOP GAMES GAMES GAMES

Table 7.1: Data Platform Comparison


Here above “X” means: Not Available

Auditing and Recommendation:

After the completion of VAS market Analysis the next step comes of auditing and
recommendation to my company guide for the following matters:

Propose services that are not included under VAS at Reliance to increase its competency in the
market.

1. Products and services those are not available on R-World in comparison with other
operators.
2. New product and services that can be included on R-World (Reliance Data Platform).
3. Ways to improve the look and feel of the Home page.
4. Ways to improve the link for various Products & Services, i.e. the access for customers.



8. VALUE ADDED SERVICES (VAS)
PROMOTION

8.1 INTRODUCTION

Being such a big commercial house, Reliance Communications undertakes bigger
responsibilities for better execution of its entire process. The entire process of promotion is
balanced in various forms for the existing customers of Reliance Communication. Apart from the
conventional methods of promotions through posters and billboards, Promotional Messages are
sent to customers on daily basis to promote VAS directly. For this purpose campaigns are
designed and scheduled on daily basis for both GSM and CDMA customers through SAS
Marketing Automation.

• Promotional text messages are sent on customer’s MDN regarding various products and
services of VAS. These may be contests, festival based messages, event based etc.
• These promotional Messages are designed and scheduled as a campaign on daily basis
with the help of SAS Marketing Automation (SAS Customer Intelligence studio 5.1)

VAS has also been now promoted through various Events all around in the city. These events
take form of promotional activities at various occasions like festivals and concerts. With these
promotional activities the company is able to sell VAS products and services directly to the
customers without involving any channel in between like RMS’s (Reliance Mobile Store) and
RW (Reliance World).

Tele-Calling or OBD (Out Bound Dialing)

VAS promotion is also done via Tele-calling which involves calling customers based on their
Current Balance criteria and offering them various products and services related to VAS. This is
done by INDIA CALLING which is the approved Tele-calling agency for Reliance
Communication. A database is created consisting of customer MDN’s and their response to the
call. In Delhi circle, Tele-calling is an effective means of promotion as it involves more
interaction with the customer. Customer feels much more involved and benefits are discussed at
that very moment and satisfaction level is reached every time.


Final report sip at reliance communications ltd. (2)

Final report sip at reliance communications ltd. (2)

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