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Human Resource Management

Topic:-HR practices of two organizations Airtel &Vodafone

Profile of Airtel & Vodafone .

Role of HR.

Employer Rankings.

Compensation.

Job Description.

Comparative analysis.

India government suggestion.

Trai Recommendations on 2G spectrum.

Business Strategy.===========================================================================

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Company Profile of Airtel

We are one of worlds leading providers of telecommunication services with presence in all

the 22 licensed jurisdictions (also known as Telecom Circles) in India, and operations in

Srilanka, Bangladesh and Africa. We served an aggregate of 207.8 million customers as of

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December 31, 2010; of whom 199.6 million subscribe to our GSM services and 3.2 million

use our Telemedia Services either for voice and/or broadband access delivered through DSL.

We are the largest wireless service provider in India, based on the number of customers as of

December 31, 2010. We offer an integrated suite of telecom solutions to our enterprise

customers, in addition to providing long distance connectivity both nationally andinternationally. We also offer Digital TV and IPTV Services. All these services are rendered

under a unified brand "airtel".

The company also deploys, owns and manages passive infrastructure pertaining to telecom

operations under its subsidiary Bharti Infratel Limited. Bharti Infratel owns 42% of Indus

Towers Limited. Bharti Infratel and Indus Towers are amongst top providers of passive

infrastructure services in India.

Inthe2000s,telecommunications(telecom)companyBhartiAirtelLimited(BAL)wasthemarketleader in the Indian telecom market. It had established itself as the leader in the market bydifferentiating itself with its focus on building a strong brand through innovation in sales,marketing, and customer service, and an innovative cost effective business model. Analystsalso credited BAL with negotiating the regulatory hurdles in this emerging market andcompetition very effectively. This enabled it to become profitable despite the Indian telecommarket having the lowest tariffs in the world.

Some analysts opined that BAL's unique business model had become the benchmark foremerging markets. Mobile telephony in India was experiencing the fastest growth in the worldand India was already one of the leading markets in terms of mobile subscriber base. Despite

Average Revenue per User (ARPU) figures in the country being quite low compared to manyother markets, it was viewed as an attractive market as mobile penetration of the market,particularly in the huge rural areas in India, was still low. With the developing market in theWest reaching high levels of saturation (70% in US and 100% in some European markets), manyglobal telecom operators were looking at emerging markets for their growth and this made Indiaa prime target market for these firms. The market in India was also expected to witness manychanges with the introduction of new technologies and mobile number portability.

BAL had been facing serious threats to its leadership position. On the one hand, there was theonslaught from global players such as Vodafone and Virgin Mobile, and on the other, the threatfrom established Indian companies such as Reliance Communications Ltd., Tata Teleservices

Ltd., and the state-owned Bharat Sanchar Nigam Ltd (BSNL). Moreover, the market wasexpected to witness the entry of some more Indian and foreign companies. BAL had respondedto investing heavily in expanding its network, technology, and marketing. It was trying to coverall segments of the population -from the tech-savvy youth population who coveted the latestvalue-added services (VAS) to the Bottom of the Pyramid (BoP) segment who would be satisfiedwith a low-cost offering.

In early 2008, BAL, which still dominated the Indian telecom market and was the world's tenth

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largest telecom company, was also readying itself to replicate its success story in some otheremerging markets.

Company profile of vodafone

Vodafone was launched in Fiji on 5 July 1994. Vodafone Pacific owns a 49 per cent interest inVodafone Fiji and Telecom Fiji Ltd owns the remaining 51 per cent. The company is a GSM 900network operator using the Ericsson switch. There have been continuous upgrades of the switchto be in line with the advancement in technology, services and support. Vodafone began thebusiness with 13 radio base stations covering all major centres. Currently there are 70 radio basestations around the country in all the urban centres, along highways and in several rural locationscovering 50 of the population. The current plans are to install 8 more radio stations by the end ofthe year.

Indian Telecom Industry & role of HR in it, With emphasis

on Airtel & vodaphone1. The Indian telecommunications has been zooming up the growth curve at a feverish pace,

emerging as one of the key sectors responsible for India's resurgent economic growth. Indiais has surpassed US to become the second largest wireless network in the world with asubscriber base of over 300 million in April, according to the the Telecom RegulatoryAuthority of India (Trai). The year 2007 saw India achieving significant distinctions: 1having the world's lowest call rates 2-3 US cents 2 the fastest growth in the number ofsubscribers 15.31 million in 4 months 3 the fastest sale of million mobile phones in a week 4the world's cheapest mobile handset US$ 17.2 5 the world's most affordable color phone US$27.42 1

2. 6 largest sale of mobile handsets in the third quarter Segment-wise growth Wireless segmenthas emerged as the preferred mode of telephone service by the consumers, reflected in therising share of mobile phone connections to total connections. 1. The share of mobile phoneshas increased from 71.69 per cent at the end of March 2006 to 87.68 per cent at the end ofMay 2008.

3. With such growth projection, this industry is likely to see increased investments. In fact, totalinvestment is projected at US$ 76.6 billion during the eleventh plan period (2007-12). Privatesector is estimated to continue its dominant share, accounting for 67 per cent of the totalprojected investment while public sector accounts for the rest. Top players The top playersbased on cellular subscriber (in millions) base were Cellular services can be divided into two

categories: Global System for Mobile Communications (GSM) and Code Division MultipleAccess (CDMA). The GSM sector is dominated by Airtel, Vodafone-Hutch, and IdeaCellular, while the CDMA sector is dominated by Reliance and Tata Indicom. Surprisingly,CDMA market has increased its market share up to 30% thanks to Reliance Communication.However, across the globe, CDMA has been losing out numbers to popular GSM technology,contrary to the scenario in India reasons for growTh 5

4. The two major reasons that have fuelled this growth are 1. low tariffs 2. falling handset

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prices. problems faced The bottlenecks for ' Indian Telecom Industry ' are: Slow reform process. Low penetration. Service providers bears huge initial cost to make inroads and achieving break-even is difficult. Lack of infrastructure in semi-rural and rural areas, which makes it difficult to make inroads into this market segment as service providers haveto incur a huge initial fixed cost. Huge initial investments. Limited spectrum

availability and interconnection charges between the private and state operators. ruralTelecom markeT an emergIng markeT According to numbers compiled by the TelecomRegulatory Authority of India, nearly 21 per cent of the mobile user base now reside in thevillages of India, where a few years ago none of the operators wanted to venture. As onSeptember 2007, out of the 209 million mobile users in the entire country, 43 million were inrural areas. 6

5. Rural India will wrest 40 percent of new telecom market Indias rural telecom connectivity ispoised for explosive growth in the next five to 10 years, grabbing a 40 percent share of thenew market, a study released Wednesday said. Of the estimated new 250 million Indianwireless users, in next 5-10 years approximately 100 million will be from rural areas, saidthe study by the Federation of Indian Chambers of Commerce and Industry (Ficci) and Ernst

and Young. Operators have demonstrated they can achieve profitability by reducing fixedcosts, controlling variable costs and carefully tailoring services to the requirements of theircustomers. A similar model with minor customization could be emulated in the rural areas.The government will roll out new incentives for mobile networks in rural India. Its alsoplanned that the ultra-low cost handset of approximately Rs.840 ($20) to the market withbuilt-in subsidies, lifetime validity and minimal maintenance costs have promoted mobileusage in remote areas. Moreover, operators could learn from business models that have beenexperimented across the developing world for expanding rural connectivity. Reasons for ruralinclination Far from being considered as a social obligation, offering telecom services inrural areas has now become the hot spot for private telecom operators. Nearly 75 per cent ofthe mobile users in the villages are now owned by private operators as cellular phones catch

the imagination of rural consumers. Until now, state-owned Bharat Sanchar Nigam Ltd wasknown to be the only significant rural telecom operator in the country. Analysts said that theshare of rural telecom consumers will continue to increase as operators have initiated anaggressive roll-out plan to cover remote areas of the country. This is primarily driven by aslump in the growth rate of mobile user base in the metro and urban areas. According to thedata released by the Cellular Operators Association of India Circle C and Circle B Statessuch as Bihar, Kerala, Madhya Pradesh and Punjab are showing better growth ratescompared to the metros. Therefore, most of the mobile operators are investing heavily insetting up infrastructure in these circles. 7

6. The telecom regulator has suggested a number of initiatives to make mobile connection

attractive, including lower entry cost to make it more affordable. In a hi-tech market liketelecom, Schumpeter's view that competition through innovation is more important than priceholds significance. Technology advancements, lower costs and competition translate this intobenefits for the consumer. Moreover, competition drives innovation.quot; - Poonam MadanSarmah, Head of Research, Genesis PR. quot;We are looking at making the phone a moreuseful product than just an instrument to exchange voices. We want to be identified as a greatvalue-added service provider.quot; - Harit Nagpal, Vice President (Corporate Marketing),Vodafone Talented persons are like frogs in a wheelbarrow, which can jump at any point of

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time when they sense opportunities human resource managemenT The goal of humanresource management is to help an organization to meet strategic goals by attracting, andmaintaining employees and also to manage them effectively. 8

7. The process involves carrying out a skills analysis of the existing workforce, carrying outmanpower forecasting, and taking action to ensure that supply meets demand. This mayinclude the development of training and retraining strategies. Through HRP an organizationstrives to have the right number & the right kind of people at the right place at the right time.recruITmenT According to Edwin B. Flippo, Recruitment is the process of searching thecandidates for employment and stimulating them to apply for jobs in the organization.Recruitment is the activity that links the employers and the job seekers. Usually, therecruitment process starts when a manger initiates an employee requisition for a specificvacancy or an anticipated vacancy. However, Recruitment is a continuous process wherebythe firm attempts to develop a pool of qualified applicants for the future human resourcesneeds even though specific vacancies do not exist

8. laTesT Trends In recruITmenT 1. OUTSOURCING The outsourcing firms help the

organization by the initial screening of the candidates according to the needs of theorganization and creating a suitable pool of talent for the final selection by the organization.Outsourcing firms develop their human resource pool by employing people for them andmake available personnel to various companies as per their needs. In turn, the outsourcingfirms or the intermediaries charge the organizations for their services. 2.POACHING/RAIDING Buying talent (rather than developing it) is the latest mantra beingfollowed by the organizations today. Poaching means employing a competent andexperienced person already working with another reputed company in the same or differentindustry; the organization might be a competitor in the industry. A company can attract talentfrom another firm by offering attractive pay packages and other terms and conditions, betterthan the current employer of the candidate. But it is seen as an unethical practice and not

openly talked about. It has become a challenge for human resource managers to face andtackle poaching, as it weakens the competitive strength of the firm. 3. E- Recruitment Manybig organizations use Internet as a source of recruitment. E- recruitment is the use of 11

9. technology to assist the recruitment process. They advertise job vacancies through worldwideweb. The job seekers send their applications or curriculum vitae i.e. CV through e mail usingthe Internet. Alternatively job seekers place their CVs in worldwide web, which can bedrawn by prospective employees depending upon their requirements. Top 5 Job Sites 1www.naukri.com2

10. Flexible work arrangements are on the rise. Sixty percent of employers offer flexible workplans now usually alternative schedules (shifted start and quit times), condensed workweeks or telecommuting, while 39 percent expect to offer some form of flex-time in 08. 3)Online candidate screening will grow, and not only the use of qualifying pre-applicationquestions, but full-blown searching of social networking sites and search engine checks. 4)Video & audio Resume will be preferred as is a way for job seekers to showcase theirabilities beyond the capabilities of a traditional paper resume. The video resume allowsprospective employers to see, hear and get a feel for how the applicant presents themselves.5) Retiree rehiring will increase as companies remain pressured from the loss of moreexperienced workers. Twenty-one percent say they are likely to rehire retirees from other

http://www.naukri.com/http://www.naukri.com/http://www.naukri.com/

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companies in 2008; another 14 percent plan to provide incentives for workers at orapproaching retirement age to stay on with the company longer. The numbers here arentlarge, but this trend wont go away. 6) Recruiting diversity workers, especially workersbilingual, will continue to be an important focus of recruiters. Survey respondentsparticularly noted mature workers. 7) Freelance or contract hiring will continue to be a key

part of the workforce mix, with 31 percent of employers anticipating a working relationshipwith freelancers or contractors this year. 8) Perks and benefits will receive more attentionfrom companies wanting to remain competitive in attracting and keeping workers. In light ofrising healthcare costs, nearly one- in-five employers (19 percent) report their companiesplan to offer more comprehensive or better health benefits to employees in 2008. Ten percentplan to enhance or add perks such as bonuses, discounts, company cars, stock options, freechildcare, educational reimbursement, transit passes and wellness programs. 9) One in four(26 percent) of the surveyed companies are likely to provide more promotions and careeradvancement opportunities in 2008. More than half of workers stated that a companysability to offer career advancement is more important than salary, so employers are takingaction to carve out career paths for employees. Twenty-seven percent of workers say they are

dissatisfied with pay, but 67 percent of workers reported they received a raise in 2007. Aquarter of the surveyed workers plan to change jobs within the next two years: 41 percent areleaving their jobs to find a position with better pay and/or career advancement opportunities;8 percent are changing careers; 7 percent say they want to find a company where they wouldfeel appreciated; 7 percent are retiring; and 5 percent plan to start their own business. Thissurvey was released by CareerBuilder.com conducted by Harris Interactive, trackingprojected hiring trends for 2008. The 2008 Job Forecast survey is based on the responses of3,016 hiring managers and human resource professionals in private-sector companies. 13

11. Around 1 lakh people in its workforce. The telecom sector has a huge demand for the trainedand qualified engineers and other professionals specializing in telecommunications.Compensation: According to various studies in recent times, the telecom sector offers the

best salary packages at the entry level i.e. an average of 20k. The average hike in salariesacross the various levels in the telecom sector ranges from 15 to 20 percent. Incentives alsoform a part of the compensation till the middle levels. Attrition and retention: Although thesector faces the moderate attrition rates of 20 to 25 percent, the HRs prime strategic functionin the sector is retaining the talent and employee engagement. The only functional area whichfaces the high attrition rate is the sales people in the telecom industry.

12. Here rankings of the ten companies in the Indian Telecom sector are given on the basis oftheir workforce relationship factors. Ten companies were selected on random basis from thesector. The companies were given a consolidated rank on a scale of 1-10 on the basis of sumof their individual ranks on various HR practices, procedures, policies and parameters like

recruitment practices, compensation policies, work culture, recognition for good work,retention, training and development, performance appraisals et al. The scores areconsolidated on the basis of data collected through recent surveys and studies by renownednames like Business Today, Hewitt, IDC Data Quest, NASSCOM and naukrihub.com hrchallenges In recruITmenT In the last few years, the job market has undergone somefundamental changes in terms of technologies, sources of recruitment, competition in themarket etc. In an already saturated job market, where the practices like poaching and raidingare gaining momentum, HR professionals are constantly facing new challenges in one of

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their most important function- recruitment. They have to face and conquer various challengesto find the best candidates for their organizations. The major challenges faced by the HR inrecruitment are: 1. Adaptability to globalization The HR professionals are expected andrequired to keep in tune with the changing times, i.e. the changes taking place across theglobe. HR should maintain the timeliness of the process 2. Lack of motivation Recruitment

is considered to be a thankless job. Even if the organization is achieving results, HRdepartment or professionals are not thanked for recruiting the right employees andperformers. 3. Process analysis The immediacy and speed of the recruitment process are themain concerns of the HR in recruitment. The process should be flexible, adaptive andresponsive to the immediate requirements. The recruitment process should also be costeffective. 4. Strategic prioritization The emerging new systems are both an opportunity aswell as a challenge for the HR professionals. Therefore, reviewing staffing needs andprioritizing the tasks to meet the changes in the market has become a challenge for therecruitment professionals. 5. Attracting highly talented ones - The number of highly talentedprofessionals is less. All the big MNC's are trying to attract these people with high salaries,perks, incentives etc. There is a tough competition among these companies to get these

candidates on their roles.13. Our Vision & promise By 2010 Airtel will be the most admired brand in India: Loved by

more customers Targeted by top talent Benchmarked by more businesses We at Airtel always think in fresh and innovative ways about the needs of our customers and how wewant them to feel. We deliver what we promise and go out of our way to delight the customerwith a little bit more Bharti Airtel Telecom giant Bharti Airtel is the flagship company ofBharti Enterprises. The Bharti Group, has a diverse business portfolio and has created globalbrands in the telecommunication sector. Airtel comes to you from Bharti Airtel Limited,Indias largest integrated and the first private telecom services provider with a footprint in allthe 23 telecom circles. Bharti Airtel since its inception has been at the forefront oftechnology 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 structured into threeindividual strategic business units (SBUs) - Mobile Services, Airtel Telemedia Services &Enterprise Services. The mobile business provides mobile & fixed wireless services usingGSM technology across 23 telecom circles while the Airtel Telemedia Services businessoffers broadband & telephone services in 94 cities. The 18

14. fuTure developmenT In the mobile business, Bharti Airtel plans to make considerableinvestments in Network expansion to establish presence in all census towns and over 500,000villages across India by 2010, thereby covering 95% of the countrys total population. Thecompanys strategic focus will be on further strengthening the Airtel brand through best-in-class customer service, which is backed by wide national distribution. The Airtel subscriber

base according to COAI - Cellular Operator Association of India

15. Enters into the league of the worlds top telecom companies, moves towards top 5 global mobile companies Adding 25000 towers every month expanding their network all overIndia. Wide range of Value Added Services like ringtones, caller tunes, news etc One of the 1st company to introduce mobile banking, mobile bill payments etc For Employees It has 25000 employees & with increase in network, it has wide prospects. Provide attractive salary to employees, performance turnover, ESOPS( Employee Stock Options

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Programme) Provides an opportunity for career growth from Management trainee toCEO. Gives an opportunity to employee to grow vertically as well as horizontally. Gives an opportunity to move any part of the country considering they have networkeverywhere.. TargeTs Aggressive efforts are on to provide a superior network service that is congestion-free and to help customers get connected the first time. Also, the SMS

capacity is sought to be raised from the current 5,500 messages per second to 6,500 messagesper second by March 2009. After establishing itself in the domestic market, Airtel is now spreading its wings in US by providing its mobile service under the name 'CALLHOME' tothe NRIs. adverTIsemenTs Airtels advertising campaigns are always admired. Their idea ofcreating a signature ringtone with A R Rehman was brilliant; and they still continue to usethat tone. In a masterstroke they elevated the brand without having to talk of talk time , ratesetc. Then came the almost magical Express Yourself campaign stunningly executed withexcellent imagery and creativity. It showcased the ubiquitous utility of the mobile phonethrough the situations ( a fighting couple, a bride entering church, an irate mob) butconverted a rational purchase decision to an extension of ones voice. And from that Bhartismarket share has kept increasing to being the biggest mobile service provider. 22

16. People in the rural markets are ready to go mobile and the growth depends on the strengthand the quality of the network. Distribution has been growing at a rapid pace and Airtel willbe in easy reach for all customers in the State. We want to increase the brand presence andbecome far more local

17. 98% of organizational success depends upon efficient employee selection The TalenTacquIsITIon / recruITmenT process The recruitment process is the basic procedure, howeverthere are few changes in different departments, for e.g. IT dept & Customer Care dept cannothave same type of recruitment process as the abilities & skills required are different indifferent department. However the basic process is as following : 1. Prepare theorganizational chart with the support of respective departments based on industry norms &

projection of growth. 2. Co-ordinate with all departments for their manpower requirements.3. Create the job profile and person specification as per department requisition. 4. Create thecompany profile for advertising the company to attract prospective candidates & also for theconsultants etc. 26

18. Follow internal or external methods of Recruitment Commonly used External Methods i. Co-ordinate with recruitment agencies & HR consultants e.g.. HEED Consultancy, ABCConsultancy etc ii. Advertisements in print e.g.. Times Ascent, Hindustan Times etc iii. Web- in own website or portals like naukri.com, monster.com etc. iv. Campus RecruitmentsCommonly used Internal Methods (IJR Internal Job Requirement) i. Employees Referral ii.Transfer & Promotions 6. Application Scrutiny & Preliminary Screening . 7. Shortlist for

preliminary interview telephonic, video conferencing, personal interview. 8. Organizingfurther rounds of interview with department heads etc depending upon the position. 9.Briefing company profile to potential candidates, convincing them about the organisationalstrength & about their career path & Compensation. 10. Providing offer letter to selectedcandidates & help them in joining formalities within the organization. 11. Induction,followed by training as required. 12. Taking monthly/quarterly feedback from the departmentabout the candidates who have joined. 13. Organizing market survey of salaries, jobopportunities etc.

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19. When we progress your application, you will be contacted by phone and informed of the nextsteps, which may include an initial telephone interview or face-to-face interview. Step Four Assessments and Reference Checks When you progress to the next stages, for some roles youmay be required to participate in psychometric assessments and for all roles there will bereference checks, so please be prepared to provide at least two professional referees for us to

contact. These referees must ideally be people you have reported to in prior positions - or atleast people who have working knowledge of your abilities and experience. Step Five - BeingMade an Offer If you are successful in becoming the preferred candidate, you will be advisedof the offer by telephone and promptly provided with a written employment agreement. Theoffer of employment is valid for a finite period of time and requires your acceptance bysignature and its return to our HR Department.

Telecom Sector Employer RankingsIndia stands as one of the largest and fastest growing telecom markets of the world. Having more than

264.77 million telephone connections and the subscribers base growing steadily at a rate of around

82.2 percent, Indian telecom market currently stands at the third position in the global market. Theyear 2007 was stated as the Year of Broadband in India.

India is fast emerging as the Telecom hub of the world both in terms of the growing demand, size of

the market, setting up of the manufacturing facilities in India by leading players across the world and,

the inflow of FDI, which is currently the highest in all the sectors of Indian industry. The Indian

telecom market can be divided into three segments: the mobile (wireless) market,

Compensation:According to various studies in recent times, the telecom sector offers the best salary packages at

the entry level i.e. an average of 20k. The average hike in salaries across the various levels in thetelecom sector ranges from 15 to 20 percent. Incentives also form a part of the compensation tillthe middle levels.

Job Description :Monitor and coordinate Payroll Operation processes to deliver consistent error-free payrolloutput across the organization. Provide support for integrating the Payroll Management Systemwith Oracle HRMS & other systems for better service delivery. Looking after Retirals like PF,Gratuity, Superannuation coordination with the Third party vendors, employees , Finance & HR.

Timely & Accurate Payroll service delivery for business entities/circles.1.Interface with payrollcoordinators at business entities/circles for timely inputs to the vendor.Checking completeness and accuracy of inputs as per policies/guidelines.Interface with the Vendor for processing of inputs and timely output delivery to the payrollcoordinatorsCheck and confirm effectiveness of payroll processing with payroll coordinators and outsourcepartner and devise & implement processes for improvement.Provide necessary support in Implementation of payroll automation and integration with Oracle

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HRMS1.Analysis of current policies/process and provide basic rules for automation of payrollprocessCheck and confirm local practices/systems followed in the business units and policy/processgaps across organisation, prepare overall guidelines and provide required information forautomation.

Payroll Query resolution1.Resolution of escalated one-to-one queries from Payroll Coordinatorsand Outsource Processor/VendorUnderstand, gather the data and provide resolution to escalated queries from employees relatedto payroll process.Implementation of various types of Dashboard / Metric Report .1. Dashboards/reports fordecision makingIdentify gaps in existing processes and undertake projects for improvement in the servicedelivery & policy/statutes compliance.

Comparative analysis of sales and distribution between

airtel & vodaphone1. This project aims to study the distribution channels, sales network and service patterns of

the telecom sector through an analytical and comparative study of two leading companies-Bharti Airtel Limited. & Vodafone Ltd. The project also tries to bring out the shortcomings,if any, in the present system and thus recommends suggestions to improve the same. Theproject also gives insights into the various financial terms, norms of the sales and servicedepartments as per the guidelines of the telecom industry. The project was designed afterdetailed discussion with the company officials on three parameters i.e. distribution network,service network and sales functioning. The project also includes the insights given by thedealers and officials of the company. Firstly, the project discusses the distribution network

of the two companies and the functions carried out by the channel members. Bharti AirtelLimited being the largest services provider in India definitely has a wider reach and morenumber of dealers than vodafone. The project also covers the financial terms of thecompany with the dealers and that of the dealers with the customers. Secondly, the projectdiscusses the sales functioning of the two companies, which includes aspects such as thehierarchy of the sales department prevalent in the company; the responsibilities andfunctions of the sales force, their performance appraisal structure etc.

2. Finally the project covers the service network of the two companies which deals with theafter sale services and their effectiveness provided by both the companies and variouscomplaints and queries are handled by them. Acknowledgements

3. The objective of this project on sales and distribution is to do an analytical and comparativestudy of the sales, service and distribution function of two players from the chosen businesssector. The business sector chosen for this purpose is the fast growing telecom sector, andthe players chosen for study from this sector are: Bharti Airtel Limited Vodafone Limited

4. Interviews & Discussions with the company officials, dealers and Sales people.Questionnaires were used to record data. LIMITATIONS: It was difficult to ask for timerequired for a detailed discussion on the questionnaire & therefore several aspects of the

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questionnaire were answered briefly. The company officials did not divulge details aboutcompetitive sales policies, strategies & certain financial terms with dealers as they find it tobe a confidential piece of information of the company. Indian Telecom Market SIZE Indiais the fifth largest telecom services market in the world; $17.8 billion revenues in FY 2005 Industry grew by about 36% in FY 2005 over FY 2004 The Indian telecom market size of

over $8.3 billion is expected to treble itself by year 2011-2012, according to Ernst &Young. "The Indian telecom market size of over $8.3 billion is expected to treble itself byfinancial year 2012. Thus there is a significant opportunity for telecom players. Telecommarket has grown at about 25% p.a. over the last 5 years Wireless segment subscriberbase grew at 85% p.a.: fixed line segment at about 10% p.a.

5. STRUCTURE The Indian telecom market has both public and private sector companiesparticipating: Public sector has over 60% market share, down from 90% in 2000 Privatecompanies have added subscribers at a CAGR of 192% since 2000 Mobile operators havedeployed both CDMA ( 16 million users) and GSM (55 million users) wireless networks Value added service features constitute 10% of revenue today (2 % in 2001) POLICY 74% to 100% FDI permitted for various telecom services FIPB approval required for

foreign investment exceeding 49% in all telecom services 100% FDI permitted in telecomequipment manufacturing India has a telecom policy aims to encourage private andforeign investment , Highlights are An independent regulator the Telecom RegulatoryAuthority of India (TRAI) Revenue-share model for license issued by the Government fortelecom services in India. Unified access licenses are available for providing telecomservices on a pan-India basis Planned opening up of National Long Distance (NLD),International Long Distance (ILD) and other value added services. COMPANY SERVICESINVESTOR Cellula Basi NLD ILD r c 1.Bharti Televentures Yes Yes Yes Yes Vodafone,Singapore Telecom, Warburg Pincus 2.Reliance Infocomm Yes Yes Yes Yes RelianceGroup

6. Increasing affordability-low tariffs, easy payments plans and handset financing Increasedcoverage and availability of mobile services 2. Investment opportunity of $22 billion acrossmany years: Telecom Devices and Software for Internet, Broadband and Direct To HomeServices. Set Top boxes, Gateway exchange, Modem, Mobile handsets and consumerpremise equipments, Gaming Devices, EPABX, Telecom Software Telecom Services forvoice and data via a range of technologies Applications and Content development rangingfrom gaming to education

7. Selection of channel members/dealers Airtel follows a strict policy in selection of thedealers, and therefore it is necessary to fulfill the following pre- requisites to be eligible tobecome a dealer: 1) The dealers should have a sound financial background. The financial

capability of a dealer is solely depended on the discretion of the company officials. 2) Thedealers should have a good market reputation, since the dealers help the customers informing the first impression a customer has about the company. 3) The dealer should have agood previous track record,i.e of timely payments, no criminal background etc. 4)Thedealers should have good market penetration. The companies ability to gain maximumcustomers in this era of competition solely depends on the penetration the dealers have inthe market. 5)The last criterion of dealers selection for Airtel is the area the dealers cover.This would include different geographical areas which are covered by a dealer.

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8. RESPONSIBILITIES AND FUNCTIONS OF THE DEALERS Airtel believes inCustomer Loyalty and thus Airtel expects that their dealers apart from selling paintproducts should perform the following functions for better customer relationsmanagement: 1) Sales promotion through regular promotional schemes, road shows,campaigns etc. the expenses incurred by the dealers is shared by the company only if these

activities are for promotion of the company and not of the dealer. 2) Recruitment- doneunder the guidance of certain Airtel officials 3) Training and development of manpowerwith company assistance 4) Servicing according to the size of orders 5) Customer relationmanagement 6) Promote other products of the company The dealer should be in regulartouch with the customer, keep taking his feedback and ensure maximum customersatisfaction. The dealer should also try and convince the customer to try newer products ofthe company. The dealer has to thus cater to 3 major areas: Pre sale Selling Post saleservices

9. Company Background Vodafone limited Vodafone, the worlds leading internationalmobile communications company, has fully arrived in India. Vodafone Essar announcedtoday that the Vodafone brand will be launched in India from 21st September onwards. The

popular and endearing brand, Hutch, will be transitioned to Vodafone across India. Thismarks a significant chapter in the evolution of Vodafone as a dynamic and ever-growingbrand. The brand change over the next few weeks will be unveiled nationally through ahigh profile campaign covering all important media. Vodafone, the worlds leading mobiletelecommunication company, completed the acquisition of Hutchison Essar in May 2007and the company was formally renamed Vodafone Essar in July 2007. Asim Ghosh,Managing Director, Vodafone Essar, said "Weve had a great innings as Hutch in India andtoday marks a new beginning for us. Not as a departure from the fundamentals that createdHutch, but an acceleration into the future with Vodafone's global expertise."

Distribution network A supply chain is described that consists of all the parties and their supplied

activities that help us to create and deliver services to the final customer. The front channels arespecially kept in mind. ACTIVITIES: 1. Order 2. Handling 3. Storage 4. Display 5. Promotion 6.

Selling 7. Information and feedback. The channel structure Co. or direct sales Indirect sales

Misc. sales Business head DSA/DST Dealers G.M. Sales Manager Shop Owners Assist. Sales

Manager TLS Metro Shops Sales Consultants Telemarketing Executives Hutch Shops

Executives Field Executives Tele Marketing Executives

India government to take firms' views on telecom

regulator's suggestions

Bharti Airtel, Vodafone Essar, Idea oppose TRAI's proposal

to charge excess spectrum fee.

The Indian government and the telecom regulator said Friday they will meet with mobile phonecompanies who have opposed calls for a one-time fee on operators holding excess 2Gbandwidth, as the regulator tried to soothe concerns by saying the fee wouldn't be high.

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"We will discuss it in the ministry. Thereafter, due process will be taken up. If necessary, beforetaking any decision through the Telecom Commission, patient hearing will be given to allstakeholders," Communications Minister

Top operators such as Bharti Airtel Ltd., unlisted Vodafone Essar Ltd. and Idea Cellular Ltd.have opposed the proposal of a one-off charge, which the Telecom Regulatory Authority ofIndia, or TRAI, said should be linked to third-generation spectrum. Auctions for 3G bandwidthare ongoing.

The operators fear a charge would heap on yet more costs at a time when revenue and profit arealready being hurt by an intense tariff war in India, the world's fastest-growing telecom market.

Bharti condemned the TRAI's proposals after they were made public Tuesday, labeling them"shocking, arbitrary and impractical," while Vodafone Essar described them as "illogical,retrograde and perverse".

From Tuesday to Thursday, Bharti and Idea saw their share prices plunge 12.1% and 12.5%,respectively. However, the stocks staged a recovery Friday after the government said it wouldhear the companies' views, while they were also helped as the regulator said the one-time feewouldn't be high.

Bharti closed up 2.2% at INR264.45 on the Bombay Stock Exchange Friday, and Idea gained3.2% to INR56.95. Both outperformed the benchmark Sensex, which ended 1.6% lower.

TRAI's recommendations have been sent to the Telecom Commission in the Department ofTelecommunications for approval. The commission could accept or reject the suggestions orrevert to TRAI for clarification.

TRAI Chairman J.S. Sarma told reporters that the regulator would be meeting the companies.

"Let me hear them first, what it is they have to say. We have already indicated to thegovernment, that we will be sending them the findings (after speaking to the companies)...so I'msure the government will wait before taking a final decision

Ficci proposed the meeting to thrash out the issue of

Trai recommendations on 2G spectrum

The Federation of Indian Chambers of Commerce and Industry (Ficci) will take up the cause of telecom

companies with the telecom regulator. The telecom companies are worried about the recommendations on2G spectrum made recently by the Telecom Regulatory Authority of India (Trai).

Come Thursday, Trai would hold a meeting with the operators that is being described as a grievances

session by the telecom companies. A team led by Ficci along with members from the Cellular Operators

Association of India (COAI) and the Association of Unified Telecom Service Providers of India (AUSPI)

will hold a closed door meeting with senior Trai officials.

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Sources in Trai said Ficci President Rajan Bharti Mittal, who is also the Vice-Chairman and Managing

Director of Bharti Enterprises and a Director and member on Bharti Airtel board, is leading the team.

Ficci's official spokespersons, when contacted, did not confirm or deny his participation in the meeting.

The meeting has been proposed by Ficci, to thrash out the issue of Trai's recommendations on 2G

spectrum. Some of the companies would have to shell out huge amounts of money for the additionalspectrum they hold. These include companies like Bharti Airtel and those who are yet to get spectrum

despite being ahead in the queue, like Tata Teleservice Ltd, if the recommendations are accepted by the

government.

Over the last few days, letters have been shot off by operators to the government seeking partial

acceptance of the recommendations. Trai too shot off letters to the government seeking to clarify its

position and on Tuesday has again written that the operators are unduly worried. It has pointed out that

the regulator was still examining the issues like payment of 3G prices for the additional 2G spectrum

beyond mandated by the government, fixed by the regulator.

In his letter, Trai Chairman J S Sarma has requested the government to hold back a final decision on two

of its recommendation till it gives a final suggestion. Trai had suggested that 3G price be adopted as

current price of spectrum in the 1800 megahertz band and that refarming of 800/900 MHz spectrum

should be examined. But in the same breath, Sarma has also said that Trai was initiating a separate

discussion on both the issues and these findings would be submitted to the government. Till then, it has

urged the government not to take any decision on these two.

On the other issues, the regulator reiterated that all other recommendations are integral recommendations.

If DoT has any difference of opinion on any of these recommendations, that can be referred back to the

regulator, before the Department of Telecom takes any decision.

Business Strategy

increasing competition from established mobile companies, fixed-line companies moving tomobile and internet companies moving into the mobile domain is one of the main challengesVodafone has to face. In addition, changing technology and therefore tastes, a regulatoryenvironment that is forcing down call costs, and the fact that Vodafones growth has traditionallybeen in mow mature markets have worked together to push the company towards five strategicobjectives. Business units have been aligned to strategy: Europe; Eastern Europe, Middle East,Africa, Asia Pacific, affiliates; and new businesses.

In Europe, the company plans to leverage regional scale to reduce costs and stimulate revenues.In order to reduce costs Vodafone plans to increase outsourcing, particularly of the customermanagement systems and IT development of billing and scale efficiencies will be enhancedthrough greater standardization in all areas across the Group, at the global level. The companysees scope to increase revenues in the fact that its customers only use their mobiles on averagefor four minutes a day. New bundles and tariffs, for example Vodafone Passport, which is afamily plan focusing on groups and roaming, will help in this respect as will targeting fixed to

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mobile substitution at the business level.

The potential for growth in emerging markets has to some extent been exploited by Vodafonealready, for example in South Africa and Egypt. The company plans to expand on success inthese markets by obtaining stakes in other emerging markets, and where possible, obtainingcontrol.

Vodafones third strategic objective is to deliver a total communications package to itscustomers. This will obviously require some innovation as well as a move into homes and officesthrough the integration of fixed and mobile services, although the latter will remain the focus.High speed internet services through HSDPA, DSL and Wi-Fi will be developed, as willintegrated mobile and PC services such as VoIP and instant messaging.

The companys fourth strategic objective is to actively manage its portfolio by focusing onacquisitions in specific geographic locations that are likely to offer strong growth and a return onthe cost of capital within three to five years. Vodafones policy to exit markets that are no longerattractive and where there is an opportunity to create value for shareholders has already been

seen in the sale of its stake in Japan in April 2006. GBP6 billion of the settlement will bereturned to shareholders. In answer to speculation over the position Vodafone holds in the USthrough Verizon Wireless, Chief Executive Arun Sarin, has stated that the expected continuedgrowth in the US market warrants Vodafones existing stake.

Vodafones final strategic objective is to align its capital structure and shareholder returns insuch a way as to support strategy. In order to do this, the company has announced that it willnow pay out 60% of adjusted earnings per share as opposed to 50%. Dividend per share is set toincrease with underlying earningsI