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EXECUTIVE SUMMARY

Idea is the flagship that comes from Idea Cellular Limited - a part of the biggest

private integrated telecom conglomerate, Idea Enterprises. Idea Enterprises has been at the

forefront of technology and has revolutionized telecommunications with its world class

products and services. Established in 1976, Idea has been a pioneering force in the telecom

sector with many firsts and innovations to its credit. Idea strives hard to make the quality of

your life better to its esteem customers. For them customers are unique, and so are their

needs. And because of its customers individuality they have a set of services pertinent to its

them!

Each of the department namely, Marketing, Finance, HR, and production are studied

in depth in order to understand the correct working of the department in the context of its

organization structure. The Marketing and HR department of the company was

impressive .The way they handle the issues, the way they market the products, the

relationship maintained by them with their dealers, the excellent distribution network which

they have and the counseling and importance given to the employee, the leave encashment

system and their ability to raise the ale capacity was very striking.

The ability to deliver goods quality product and services has resulted in the growth of

the company. They consistently high quality service every time, which in turn brings

customer back. Idea cellular tries to understand the needs of it customer and upgrade the

qualities of it product for increased customer satisfaction. The company’s main aim I to

create a better and safer environment for all. Keep itself abreast of latest international

standard and practices in all the fields.

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CONTENTS

PAGE NO.

1. INDUSTRY PROFILE 3

2. COMPANY PROFILE 17

3. MCKINSEY’S 7S FRAMEWORK 35

4. SWOT ANALYSIS 42

5. ANALYSIS OF FINANCIAL PERFORMANCE 44

6. FINDINGS AND SUGGESTIONS 50

7. CONCLUSION 54

8. LEARNING EXPERIENCE 56

9. BIBLIOGRAPHY 57

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INDUSTRY PROFILE:

INDUSTRY OVERVIEW

Background

The Indian Telecommunications network is the third largest in the world and the

second largest among the emerging economies of Asia. Today, it is the fastest growing market

in the world. The telecommunication sector continued to register significant success during

the year and has emerged as one of the key sectors responsible for India’s resurgent India’s

economic growth.

Growth

This rapid growth has been possible due to various proactive and positive decisions of

the Government and contribution of both by the public and the private sector. The rapid

strides in the telecom sector have been facilitated by liberal policies of the Government that

provide easy market access for telecom equipment and a fair regulatory framework for

offering telecom services to the Indian consumers at affordable prices.

Wire line Vs Wireless

It has also undergone a substantial change in terms of mobile versus fixed phones and

public versus private participation. The preference for use of wireless phones has also been

predominant in the sector. Participation of the private entities in the telecom sector is rapidly

increasing rate there by presenting the enormous growth opportunities. There is a clear

distinction between the Global Satellite Mobile Communication (GSM) and Code Division

Multiple Access (CDMA) technologies used and the graph below shows the divide between

the two.

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Segment wise Status

Wire line Services

With increasing penetration of the wireless services, the wireline services in the

country is becoming stagnant. On the other hand, Broadband demand has picked up and

promises to stabilise fixed line growth.

GSM Sector

In terms of the Global System for Mobile Communication (GSM) subscriber base this

now places India third after China and Russia.China had 401.7 million GSM subscribers

CDMA Services

CDMA technology was introduced in India as a limited mobility solution. The

introduction of CDMA services has created competition, lowered tariffs and offered many

citizens access to communication services for the first time

Internet Services

Internet services were launched in India on August 15, 1995. In November 1998 the

government opened up the sector to private operators. A liberal licensing regime was put in

place to increase Internet penetration across the country. The growth of IP telephony or grey

market is also a serious concern. Government loses revenue, while unlicensed operation by

certain operators violates the law and depletes licensed operators market share. New services

like IP-TV and IP-Telephony are becoming popular with the demand likely to increase in

coming years. The scopes of services under existing ISP license conditions are unclear.

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Manufacture of Telecom Equipment

Rising demand for a wide range of telecom equipment, particularly in the area of

mobile telecommunication, has provided excellent opportunities to domestic and foreign

investors in the manufacturing sector. The last two years saw many renowned telecom

companies setting up their manufacturing base in India. Ericsson has set up GSM Radio Base

Station Manufacturing facility in Jaipur. Elcoteq has set up handset manufacturing facilities

in Mysore. Nokia set up its manufacturing plant in Chennai. LG Electronics set up plant of

manufacturing GSM mobile phones near Pune.

The Government has already set up Telecom Equipment and Services Export

Promotion Forum and Telecom Testing and Security Certification Centre (TETC). A large

number of companies like Alcatel, Cisco have also shown interest in setting up their R&D

centers in India. With above initiatives India is expected to be a manufacturing hub for the

telecom equipment.

POLICY AND INITIATIVES

Regulatory Framework

The Telecom Regulatory Authority of India (TRAI) was set up in March 1997

as a regulator for Telecom sector. The TRAI’s functions are recommendatory,

regulatory and tariff setting in telecom sector.

Telecom Disputes Settlement and Appellate Tribunal (TDSAT) came into existence in

May, 2000. TDSAT has been empowered to adjudicate any dispute –

Between a licensor and a licensee

Between two or more service providers

Between a service provider and a group of consumers

Hear and dispose of appeal against any direction, decision or order of TRAI

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Tariffs for telecommunication services have evolved from a regime where tariffs were

determined by Telecom Regulatory Authority of India to a regime where tariffs are largely

under forbearance. TRAI intervenes by regulating the tariffs for only those services, the

markets of which are not competitive.

Universal Service Obligation Fund (USOF) exclusively for meeting the Universal

Service Obligation was established in April, 2002. The Universal Service Levy is presently 5

per cent of the Adjusted Gross Revenue (AGR) of all telecom service providers except the

pure value added service providers like Internet, Voice Mail, E-Mail service providers etc.

Indian Telegraph Act has been amended in October’2006 to provide support for all telegraph

services including mobile and broadband to bridge the digital divide. With the introduction of

the Unified Access Licensing Regime, operators can offer telecom access services to

consumers in a technology neutral manner, subject to fulfilling certain conditions.

Introduction of this regime has also broken the legal/regulatory impasse between the cellular

and basic service providers. Issuance of Intra-Circle Merger and Acquisition Guidelines

provide investors an opportunity to take stakes in existing telecom operations.

Government Initiatives

The Government has taken the following main initiatives for the growth of the Telecom

Sector:

• All telecom services have been opened up for free competition for unprecedented

• growth

• 217 (Information Technology Agreement) ITA-I items are at zero Customs Duty.

• Specified capital goods and all inputs required to manufacture ITA-I, items are at zero

• Customs Duty

• Availability of low cost mobile handsets

• The international Long Distance Services (ILDS) opened with effect from April 2002.

• Calling Party Pays (CPP) regime was implemented with effect from 1st May

• Guidelines for Unified Access Service License regime were issued in November

2003,

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• 27 licenses out of 31 Basic Service Licenses were converted to Unified Access

Service Licenses

• In April 2004, license fee for Unified Access Service Providers (UAS) was reduced by

2 per cent

• License fee for infrastructure Provider-II reduced from 15 per cent to 6 per cent of the

• Adjusted Gross Revenue and spectrum charges between 2 to 4 per cent in June 2004

• Entry fee for NLD licenses was reduced to Rs. 2.5 Crore from Rs. 100 Crore. Entry

fee for ILD reduced to Rs. 2.5 Crore from Rs. 25 Crore

• Lease line charges have been reduced to make the bandwidth available at competitive

prices to facilitate growth in IT enabled services

• One India plan i.e. single tariff of Re. 1/-per minute to anywhere in India was

introduced from 1st March 2006 by the Public Sector Undertakings. This tariff was

emulated by most of the private service providers also. This scheme has led to death

of distance in telecommunication and is going to be instrumental in promoting

National Integration further

• The robust telecom network has also facilitated the expansion of BPO industry that is

having 500,000 employees now and adding 400 employees per day.

• Annual license fee for National Long Distance (NLD), International Long Distance

(ILD), Infrastructure Provider-II, VSAT commercial and Internet Service Provider

ISP) with internet telephony (restricted) licenses was reduced to 6 per cent of

Adjusted Gross Revenue (AGR) with effort from Jan 2006.

• The Government’s policy is neutral on use of technology by telecom service providers

subject to availability of scarce resources such as spectrum etc.

• Licence Fees 6-10 per cent of Adjusted Gross Revenue (AGR)

Foreign Direct Investment Policy

Foreign Direct Investment (FDI) was permitted in the telecom sector beginning with

the telecom manufacturing segment in 1991 - when India embarked on economic

liberalisation. FDI is defined as investment made by non-residents in the equity capital of a

company. For the telecom sector, FDI includes investment made by Non-Resident Indians

(NRIs), Overseas Corporate Bodies (OCBs), foreign entities, Foreign Institutional Investors

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(FIIs), American Depository Receipts (ADRs)/Global Depository Receipts (GDRs) etc.

Present FDI Policy for the Telecom sector:

• In Basic, Cellular Mobile, National Long Distance, International Long Distance, Value

Added Services and Global Mobile Personal Communications by Satellite, FDI is limited

to 49 per cent (under automatic route) subject to grant of licence from the Department of

Telecommunications and adherence by the companies (who are investing and the

companies in which investment is being made) to the licence conditions for foreign equity

cap and lock-in period for transfer and addition of equity and other license provisions.]

• Foreign Direct Investment up to 74 per cent permitted, subject to licensing and

security requirements for the following:

- Internet Service (with gateways)

- Infrastructure Providers (Category II)

- Radio Paging Service

• FDI up to 100 per cent permitted in respect to the following telecom services:

- ISPs not providing gateways (Both for satellite and submarine cables)

- Infrastructure Providers providing dark fibre (IP Category I)

- Electronic Mail

- Voice Mail

The above is subject to the following conditions:

- FDI up to 100 per cent is allowed subject to the condition that such companies

would divest 26 per cent of their equity in favour of Indian public within 5

years, if these companies are listed in other parts of the world.

- The above services would be subject to licensing and security requirements,

wherever required.

- Proposals for FDI beyond 49 per cent shall be considered by Foreign Investment

Promotion Board (FIPB) on a case-to-case basis.

• In the manufacturing sector 100 per cent FDI is permitted under the automatic route.

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• In Basic, Cellular Mobile, paging and Value Added service, and Global Mobile Personal

Communications by Satellite, FDI is permitted up to 49 per cent (under automatic route)

subject to grant of license from Department of Telecommunications

• Foreign direct investment up to 74 per cent permitted, subject to licensing and security

requirements for the Internet Service (with gateways), Infrastructure Providers (category-

II), Radio Paging Service

• FDI up to 100 per cent permitted in respect of

- ISPs not providing gateways (both for satellite and submarine cables),

- Infrastructure Providers providing dark fibre (IP Category I);

- Electronic Mail; and

- Voice Mail

• FDI up to 49 per cent is also permitted in an investment company, set up for making

investment in the telecom companies licensed to operate telecom services. Investment by

these investment companies in a telecom service company is treated as part of domestic

equity and is not set of against the foreign equity cap.

• Manufacturing - 100 per cent FDI is permitted under automatic route.

• FDI is subject to the following conditions

• FDI up to 100 per cent is allowed subject to the conditions that such companies would

divest 26 per cent of their equity in favour of Indian public in 5 years, if these companies are

listed in other parts of the world.

• The above services would be subject to licensing and security requirements,

Wherever required.

• Proposals for FDI beyond 49 per cent shall be considered by FIPB on case to case basis

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COMPETITION OVERVIEW

Major Players

There are three types of players in telecom services:

• State owned companies (BSNL and MTNL)

• Private Indian owned companies (Reliance Infocomm, Tata Teleservices,)

• Foreign invested companies (Hutchison-Essar, Idea Tele-Ventures, Escotel, Idea

Cellular, BPL Mobile, Spice Communications)

BHARAT SANCHAR NIGAM LIMITED (BSNL)

Name : Bharat Sanchar Nigam Limited (BSNL)

Year of Establishment : 2000

Company Profile

Bharat Sanchar Nigam Ltd. is World's 7th largest Telecommunications Company

providing comprehensive range of telecom services in India: Wireline, CDMA mobile, GSM

Mobile, Internet, Broadband, Carrier service, MPLS-VPN, VSAT, VoIP services, IN

Services etc. Within a span of five years it has become one of the largest public sector unit in

India. It has a network of over 45 million lines

Global Presence/ Marketing

Covering 5000 towns with over 35 million telephone connections.

Acquisitions / Strategic Alliances Future Prospect

BSNL plans to expand its customer base from present 47 millions lines to 125

million lines and infrastructure investment plan to the tune of Rs. 733 crores (US$ 16.67

million) in the next three years.

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MAHANAGAR TELEPHONE NIGAM LIMITED (MTNL)

Name : Mahanagar Telephone Nigam Limited (MTNL)


Company Profile

MTNL was set up by the Government of India to upgrade the quality of telecom

services, expand the telecom network, introduce new services and to raise revenue for

telecom development needs of India.s key metros. MTNL with a market share of about 13%

of the National telecom Network has a customer base of 5.92 million. The Govt. of India

currently holds 56.25% stake in the company.

Acquisitions / Strategic

MTNL has formed a Joint Venture company Nepal by the name of United Telecom

Ltd. (UTL) in collaboration with Telecom Consultants India Limited (TCIL) in 2001 for

providing WLL based basic services in Nepal. MTNL has set up its 100% subsidiary

Mahanagar Telephone Mauritius Limited.(MTML) in Mauritius, for providing basic, mobile

and international long distance

.

VIDESH SANCHAR NIGAM LIMITED (VSNL)

Name : Videsh Sanchar Nigam Limited (VSNL)


Company Profile

The Videsh Sanchar Nigam Limited (VSNL) – a wholly Government owned corporation. The

company operates a network of earth stations, switches, submarine cable systems, and value

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added service nodes to provide a range of basic and value added services and has a dedicated

work force of about 2000 employees. VSNL's main gateway centers are located at Mumbai,

New Delhi, Kolkata and Chennai.


The company has 52 subsidiaries in 21 countries as well as operations across four

continents.


VSNL acquired Nasdaq-listed Teleglobe International Holdings Ltd for $239 million

in 2005 Videsh Sanchar Nigam Ltd acquired Tyco Global Network, submarine cable system,

for USD 130 million in 2005

Future Prospect

The company plans to expand its wholesale voices services across the EU, to

effectively enable enterprise customers and retail voice carriers to connect to India. VSNL is

adding its capacity to meet the overwhelming demand for connectivity to India in the

wholesale voice services domain. The company is also offering flexible agreements and

charging methods to meet the growing demands of the wholesale voice market

RELIANCE COMMUNICATION

Name : Reliance Communications


Company Profile

Reliance Telecom's cellular services are available in 340 towns within its eight-circle

footprint. Reliance Infocomm also offered for the first time in India, mobile data services

though its R- World mobile portal. This portal leverages the data capability of the CDMA 1X

network. Reliance Infocomm offers a complete range of telecom services covering mobile

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and fixed line telephony including broadband, national and international long distance

services, data services and a wide range of value added services and applications aimed at

enhancing productivity of enterprises and individuals.


Reliance Communications has IP-enabled connectivity infrastructure comprising over

150,000 kilometers of fiber-optic cable systems in India, the US, Europe, Middle East, and

the Asia Pacific region.


International wholesale telecommunications service provider, FLAG Telecom

amalgamates with Reliance Gateway, a wholly owned subsidiary of Reliance Infocom in

2004

TATA TELESERVICES

Name : Tata Teleservices


Company Profile

Tata Teleservices is a part of the $12 billion Tata Group, which has 93 companies,

over 200,000 employees and more than 2.3 million shareholders. Tata Teleservices’ bouquet

of telephony services includes Mobile services, Wireless Desktop Phones, Public Booth

Telephony and Wireline services. Other services include value added services like voice

portal, Call service, post-paid Internet services, 3-way conferencing, group calling, Wi-Fi

Internet, USB Modem, data cards, calling card services and enterprise services.

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Tata Teleservices has presence in across 19 circles that includes Andhra Pradesh,

Chennai, Gujarat, Karnataka, Delhi, Maharashtra, Mumbai, Tamil Nadu, Orissa, Bihar,

Rajasthan, Punjab, Haryana, Himachal Pradesh, Uttar Pradesh (E), Uttar Pradesh (W),

Kerala, Kolkata, Madhya Pradesh and West Bengal.


Tata Teleservices has acquired Hughes Tele.com (India) Limited [now renamed Tata

Teleservices (Maharashtra) Limited] in 2002

Future Prospect

The company is also expanding its footprint, and has paid Rs. 4.17 billion ($90

million) to DoT for 11 new licenses under the IUC (interconnect usage charges) regime.

VODAFONE

Name : Vodafone

Year of Establishment

Acquired majority stake in Hutch Essar in India, by buying out complete stake of

Hutch in 2007, Essar is still minority stakeholder in company

Company Profile

Vodafone Essar in India is a subsidiary of Vodafone Group Plc and commenced

operations in 1994 when its predecessor Hutchison Telecom acquired the cellular licence for

Mumbai. Vodafone Essar now has operations in 16 circles covering 86% of India's mobile

customer base, with over 45.78 million customers. Vodafone Essar, under the Hutch brand,

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has been named the 'Most Respected Telecom Company', the 'Best Mobile Service in the

country' and the 'Most Creative and Most Effective Advertiser of the Year'. It has operations

in 25 countries across 5


Continents and 40

Network

Partner networks with over 200 million customers worldwide.

Acquisitions / Strategic Alliances Future Prospect

Vodafone Essar is expecting to touch over 35 million customers across 400,000 shops

and thousand of hutch’s own employees along with employees of its business associates.

CHALLENGES AND OPPORTUNITIES

Opportunities

The telecom sector has been one of the fastest growing sectors in the Indian economy

in the past 4 years. This has been witnessed due to strong competition that has brought down

tariffs as well as simplification of policy environment that has promoted healthy competition

among various players..

The mobile sector alone has been growing rapidly and has emerged as the fastest

growing market in the whole worlds. Currently of a size nearing 70 million (GSM and

CDMA), this sector is expected to reach a size of nearly 200 million subscribers by financial

year 2011. The government has eased the rules regarding inter circle and intra circle mergers.

This has led to a slew of mergers and acquisitions in the recent past. Also as the sector is

moving closer to maturity, further consolidation is a reality and this will lead to the survival

of more profitable players in this segment In order to further promote the use of Internet in

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the country the government is taking proactive steps to develop this sector with the help of

the various players in this segment. For this purpose, the use of broadband technology is

being mooted and this will go a long way in improving the productivity of the Indian

economy as well as turn out to be the next big opportunity for telecom companies after the

mobile communications segment Non-voice services and VAS are the gold mines. The big

takeoff is expected with the rollout of 3G services in early 2007, once the spectrum issues are

sorted out. Internet users base fast reaching near the English speaking population base. Local

language and content required for further growth Infrastructure equipment cost is down to a

fraction of what prevailed just a few years ago.

Operators can plan better expansion plan now increased viability for the operators to

expand to semi-urban and rural markets, hence, Accelerate growth further It’s not without

reason that India is tipped to be the world’s third-larges economy by 2050! No wonder if it

happens much earlier Investors can look to capture the gains of the Indian telecom boom and

diversify their operations outside developed economies that are marked by saturated telecom

markets and lower GDP growth rates.

At a time when global telecom majors are struggling to cope with their losses and the

rollout of 3G networks, which has been a non-starter for close to a year now; India, with its

telecom success story, represents an attractive and lucrative destination for investment.

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COMPANY PROFILE

In 2000, Idea Cellular was a company providing mobile services in Andhra Pradesh.

When Birla-AT&T brought Maharashtra and Gujarat to the table, the merger of these two

entities was a reality. Thus Birla-Idea-AT&T, popularly known as Idea, was born and was

later branded as !dea.

Then Idea set sights on RPG’s operations in Madhya Pradesh which was successfully

acquired, helping BaIdea have a million subscribers, and the licence to be the fourth operator

in Delhi was clinched.

In 2004, Idea (the company had by then been rechristened) bought over the Escorts

group’s Escotel gaining Haryana, Uttar Pradesh (West) and Kerala — and licences for three

more — UP (East), Rajasthan and Himachal Pradesh. By the end of that year, four million

Indians were on the company’s network. In 2005, AT&T sold its investment in Idea, and the

year after Ideas also bid good bye to pursue an independent telecom business. And Idea was

left only with one promoter, the AV Birla group. When the company’s stock listed on the

bourses in March 2007, its subscriber base was 13 million with presence in 11 circles. In less

than three years, the subscriber numbers have more than quadrupled. The public issue was

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oversubscribed 50 times and raised Rs 2,450 crore. In June 2011, Idea Cellular bought out

BK Modi’s stake in Spice Communications for Rs 2,700 crore adding Punjab and Karnataka

circles. Modi’s joint venture partner, Telekom Malaysia, invested Rs 7,000 crore for a

14.99% stake in Idea. Just around then, Idea’s subsidiary, Aditya Birla Telecom sold a 20%

stake to US-based Providence Equity Partners for over Rs 2,000 crore.

In 2000, Idea Cellular was a company providing mobile services in Andhra Pradesh.

When Birla-AT&T brought Maharashtra and Gujarat to the table, the merger of these two

entities was a reality. Thus Birla-Idea-AT&T, popularly known as BaIdea, was born and was

later branded as !dea.

Then Idea set sights on RPG’s operations in Madhya Pradesh which was successfully

acquired, helping BaIdea have a million subscribers, and the licence to be the fourth operator

in Delhi was clinched.

In 2004, Idea (the company had by then been rechristened) bought over the Escorts

group’s Escotel gaining Haryana, Uttar Pradesh (West) and Kerala — and licences for three

more — UP (East), Rajasthan and Himachal Pradesh. By the end of that year, four million

Indians were on the company’s network. In 2005, AT&T sold its investment in Idea, and the

year after Ideas also bid good bye to pursue an independent telecom business. And Idea was

left only with one promoter, the AV Birla group. When the company’s stock listed on the

bourses in March 2007, its subscriber base was 13 million with presence in 11 circles. In less

than three years, the subscriber numbers have more than quadrupled. The public issue was

oversubscribed 50 times and raised Rs 2,450 crore. In June 2011, Idea Cellular bought out

BK Modi’s stake in Spice Communications for Rs 2,700 crore adding Punjab and Karnataka

circles. Modi’s joint venture partner, Telekom Malaysia, invested Rs 7,000 crore for a

14.99% stake in Idea. Just around then, Idea’s subsidiary, Aditya Birla Telecom sold a 20%

stake to US-based Providence Equity Partners for over Rs 2,000 crore.

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KEY PEOPLE

BOARD OF DIRECTORS –

Mr. Kumar Mangalam Birla (Chairman)

Smt. Rajashree Birla

Mr. M.R. Prasanna

Mr. Saurabh Misra

Mr. Sanjeev Aga (Managing Director)

Mr. Arun Thiagarajan

Ms. Tarjani Vakil

Mr. Mohan Gyani

Mr. Biswajit Anna Subramanian

Mr. Gian Prakash Gupta

MANAGEMENT TEAM – CORPORATE LEADERSHIP TEAM

Mr. Sanjeev Aga, Managing Director

Mr. Anil J. Jhala, Chief Financial Officer

Mr. Anil K. Tandan, Chief Technology Officer

Mr. Prakash K. Paranjape, Chief Information Officer

Mr. Pradeep Shrivastava, Chief Marketing Officer

Mr. Amar Babu R K, Chief Service Delivery Officer

Mr. Vinay K. Razdan, Chief Human Resource Officer

Mr. Rajat K. Mukarji, Chief Corporate Affairs Officer

Mr. Rajesh K. Srivastava, Chief Materials & Procurement Officer

Mr. Ambrish Jain, Chief Operating Officer, Corporate

Mr. Himanshu Kapania, Chief Operating Officer, Corporate

CIRCLE HEADS

Mr. Iyer Subbaraman S., Chief Operating Officer, Andhra Pradesh

Mr. Rajendra Chourasia, Chief Operating Officer, Delhi & NCR

Mr. Gururaj D. Kulkarni, Chief Operating Officer, Gujarat

Mr. Cherian Peter, Vice President - Operations, Haryana & Himachal Pradesh

Mr. T. G. B. Ramakrishna, Chief Operating Officer, Kerala

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Mr. S. Sashi Shankar, Chief Operating Officer, Madhya Pradesh & Chattisgarh

Mr. P. Lakshminarayana, Chief Operating Officer, Maharashtra & Goa

Mr. Virad Kaul, Chief Operating Officer, Uttar Pradesh (West)

Mr. Subodh K. Srivastav, Vice President - Operations, Uttar Pradesh (East)

Mr. Puneet Krishnan, Vice President - Operations, Rajasthan

CUSTOMER SERVICE

The company has its retail outlets under the "My Idea" banner. The company has also

been the first to offer flexible tariff plans for prepaid customers]. It also offers GPRS services

in urban areas.

Idea Cellular won the GSM Association Award for "Best Billing and Customer Care

Solution" for 2 consecutive years. IDEA Cellular has been recognized as the 'Most Customer

Responsive Company' in the Telecom sector, at the prestigious Avaya Global Connect

Customer Responsiveness Awards.

HOLDING

Initially the Birlas, the Ideas and AT&T Wireless each held one-third equity in the

company. But following AT&T Wireless' merger with Cingular Wireless in 2004, Cingular

decided to sell its 32.9% stake in Idea. This stake was bought by both the Ideas and Birlas at

16.45% each.

Idea's foray into the cellular market with its own subsidiary, Idea Indicom, a CDMA-

based mobile provider, cropped differences between the Ideas and the Birlas. This dual

holding by the Ideas also became a major reason for the delay in Idea being granted a license

to operate in Mumbai. This was because as per Department of Telecommunications (DOT)

license norms, one promoter could not have more than 10% stake in two companies operating

in the same circle and Idea Indicom was already operating in Mumbai when Idea filed for its

license.

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The Birlas thus approached the DOT and sought its intervention, and the Ideas replied

by saying that they would exit Idea but only for a good price. On 10 April 2006, the Aditya

Birla Group announced its acquisition of the 48.18% stake held by the Ideas at Rs. 40.51 a

share amounting to Rs. 44.06 billion. While 15% of the 48.14% stake was acquired by Aditya

Birla Nuvo, a company in-charge of the Birlas' new business initiatives, the remaining stake

was acquired by Birla TMT holdings Private Ltd., an AV Birla family-owned company.

Currently, Aditya Birla Group holds 49.1% of the total shares of the company. Malaysia

based Axiata controls a 14.99% stake in the company.

3G

On 19 May 2010, the 3G spectrum auction in India ended. Idea paid 5768.59 crores

for spectrum in 11 circles. The circles it will provide 3G in are Andhra Pradesh, Gujarat,

Haryana, Himachal Pradesh, Jammu & Kashmir, Kerala, Madhya Pradesh, Maharashtra &

Goa, Punjab, Uttar Pradesh (East) and Uttar Pradesh (West).

On 28 March 2011, Idea launched 3G services in Gujarat, Himachal Pradesh and

Madhya Pradesh.[5] The launch cities were Ahmedabad, Shimla and Indore. This makes Idea

the sixth private operator (eighth overall) to launch its 3G services in the country following

Tata Docomo, Reliance Communications, Idea, Aircel and Vodafone.

Idea currently supports up to 21.1 Mbps over 2G speeds of 256 Kbps. However, different

handsets support different speeds, from 384 Kbps, 3.6 Mbps, 7.2 Mbps or 21.1 Mbps. Speeds

also depend on the 3G plan/recharge that users opt for.[6]

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The operator announced that IDEA 3G services will be available in 200 towns of 11

3G circles by mid-April 2011, progressively growing at the rate of ten towns per day to cover

750 towns by mid-2011 and 4000 towns by the end of 2012.

3G Coverage

Idea’s 3G service is currently available in the following cities in 11 telecom circles:

Source

Telecom Circle State/Region No. of

Towns

Cities/Towns

Andhra Pradesh Andhra Pradesh 0

Gujarat Gujarat 2 Ahmedabad, Daman

Haryana Haryana 8 Ambala, Bhiwani, Hansi, Hisar, Jhajjar,

Panipat, Rewari, Rohtak

Himachal Pradesh Himachal Pradesh 5 Shimla, Baddi, Mandi, Sundernagar,

Dharamshala

Jammu & Kashmir Jammu & Kashmir 0

Madhya Pradesh Madhya Pradesh 3 Indore, Bhopal, Gwalior

Chhattisgarh 0

Maharashtra and

Goa

Maharashtra† 3 Nagpur, Nashik, Pune

Goa 3 Ponda, Panaji, Margao

Punjab Punjab 0

Delhi Delhi 1 Delhi

Kolkata Kolkata 1 Kolkata

Uttar Pradesh (East) Eastern Uttar

Pradesh

6 Allahabad, Azamgarh, Jhansi, Kanpur,

Lucknow, Sitapur

Excluding Mumbai

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HRIHE, HASSAN

SUBSCRIBER BASE

Idea's subscriber base as at the end of January 2011 according to the is as follows

Maharashtra and Goa - 12,075,220

Madhya Pradesh and Chhattisgarh - 8,401,422

Andhra Pradesh - 7,831,260

Kerala - 6,398,170

Kolkata -10,001,804

Gujarat - 6,632,034

Uttar Pradesh (West) & Uttarakhand - 7,361,534

Delhi - 3,609,746

Haryana - 2,847,079

Uttar Pradesh (East) - 4,935,224

Rajasthan - 2,823,910

Himachal Pradesh - 479,882

Mumbai - 1,822,280

Bihar & Jharkhand - 4,280,626

Tamil Nadu & Chennai - 1,202,343

Orissa - 985,737

Punjab (Spice) - 4,160,189

Karnataka (Spice) - 3,775,443

West Bengal - 1,728,308

Assam - 206,140

Jammu & Kashmir - 93,072

North East India except Assam - 128,807

Totaling to 84,289,641 or 10.93% (Approx.) of the total mobile connections in India.

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HRIHE, HASSAN

COMPETITORS

Idea competes with 14 other mobile operators throughout India. They are Aircel, Idea

Cheers Mobile, BSNL, Loop Mobile, MTNL, MTS, Ping Mobile, Reliance Communications,

S Tel, Tata DoCoMo, Tata Indicom, Uninor, Videocon, Virgin Mobile and Vodafone.

HISTORY - IDEA CELLULAR

We were incorporated as Birla Communications Limited on March 14, 1995 and

granted a certificate of commencement of business on August 11, 1995. Our registered office

was in Mumbai, Maharashtra.

Our name was changed to Birla AT&T Communications Limited on May 30,

1996 following the execution of a joint venture agreement dated December 5,1995

between AT&T Corporation and Grasim Industrie S Limited pursuant to which the ditya

Birla Group held 51% of our Equity Share capital and AWS Group held 49% of our

Equity Share capital. Our registered office was transferred from Industry House, 1st

Floor, 159 Church Gate Reclamation, Mumbai 400 020, Maharashtra to SumanTower,

Plot No. 18,

Sector 11, Gandhinagar 382011 Gujarat on October 22, 1996. With effect from January

1, 2001 following our merger with Tata Cellular Limited the joint venture agreement

between AT&T Corporation and Grasim Industries Limited dated December 5, 1995 was

replaced by a shareholders agreement dated December 15, 2000 entered into between

Grasim Industries Limited on behalf of the Aditya Birla Group, Tata Industries Limited

on behalf of the Tata Group and AT&T Wireless Services Inc.on behalf of the AWS

Group following which our name was changed to Birla Tata AT&T Limited on

November 6, 2001. Consequent to the introduction of the “Idea” brand, our name was

changed to Idea Cellular Limited on May 1, 2002.

The AWS Group exited from the Company on September 28, 2005 by selling

371,780,740 Equity Shares of the Company, which constituted 50% of the holding of

AT&T Cellular Private Limited in our equity share capital, to ABNL and by transferring

the remaining 371,780,750 Equity Shares to Tata Industries Limited.

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HRIHE, HASSAN

The Tata Group ceased to be a shareholder of the Company on June 20,2006

when Tata Industries Limited and Apex Investments (Mauritius) Holding Private imited

(formerly known as AT&T Cellular Private Limited) sold all their shares in the

Company to the Aditya Birla Group. On October 26, 2006, P5 Asia Investments

(Mauritius) Limited (“P5Asia”) acquired 14.60% of our Equity Share capital. Under a

Governance and Exit Rights Agreement dated October 23, 2006 between P5 Asia,

ABNL and Birla TMT, so long as an initial public offering has notoccurred and P5 Asia

holds no less than 10% of our Equity Shares,ABNL and Birla TMT are required to

procure that

(a) our Company and its Subsidiaries shall not take or pursue any of the following

actions without P5 Asia’s prior consent(such consent to be obtained in a board

and/or shareholders resolution) including in respect of:

(i) Any merger with, acquisition of, or amalgamation or consolidation with

another company or business;

(ii) Assuming or permitting to exist any borrowings or indebtedness in the nature

of borrowings if the amount of all such borrowings of our Company and its

Subsidiaries would exceed Rs. 6,800 million

(iii) Entering into a new line of business.

(iv) Increasing our authorized or issued share capital; or

(v) Entering into a joint venture and

(b) our Company makes available to P5 Asia certain financial information relating to our

Company and its Subsidiaries such as monthly management accounts, quarterly

unconsolidated balance sheet and profit and loss account and the annual audited

consolidated balance sheets and profit and loss accounts. P5 Asia also has a right to

appoint one director to our Board so long as it holds at least 10% of our total issued

and outstanding Equity Shares. Mr. Biswajit Subramanian has been appointed to our

Board by P5 Asia pursuant to the exercise of the above right. In addition, any IPO of

our Equity Shares requires P5 Asia’s written consent, and, further, in any such IPO,

P5 Asia hasthe right to offer for sale such number of Equity Shares representing up to

10% of the total Equity Shares which are held by it. By its letters dated December 2,

2006 to ABNL and Birla TMT, P5 Asia has given its written consent for the Issue and

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HRIHE, HASSAN

has confirmed that it does not intend to offer for sale any of the Equity Shares held

by it in such Issue.

We, either directly or through our Subsidiaries, provide mobile services in the

Andhra Pradesh, Delhi, Gujarat, Haryana, Kerala, Madhya Pradesh, Maharashtra and

Uttar Pradesh (West) Circles, and have recently launched services and as such are in the

process of fully rolling-out our network in the Uttar Pradesh (East), Rajasthan and

Himachal Pradesh Circles pursuant to licenses issued by the DoT.

MAJOR EVENTS

The chronology of key events of the Company from incorporation is set out below:

1995: Incorporated as Birla Communications Limited Obtained licenses for providing

GSM-based services in the Gujarat and Maharashtra Circles following the original GSM

license bidding process

1996: Changed name to Birla AT&T Communications Limited following joint venture

between Grasim Industries and AT&T Corporation

1997: Commenced operations in the Gujarat and Maharashtra Circles

1999: Migrated to revenues share license fee regime under New Telecommunications

Policy (“NTP”)

2000: Merged with Tata Cellular Limited, thereby acquiring original license for the Andhra

Pradesh Circle.

2001: Acquired RPG Cellular Limited and consequently the license for the Madhya Pradesh

(including Chattisgarh) Circle Changed name to Birla Tata AT&T Limited

2001: Obtained license for providing GSM-based services in the Delhi Circle following the

fourth operator GSM license bidding process

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HRIHE, HASSAN

2002: Changed name to Idea Cellular Limited and launched “Idea” brand name.

Commenced commercial operations in Delhi Circle . Reached the one million subscriber

mark.

2003: Reached the two million subscriber mark

2004: Completed debt restructuring for the then existing debt facilities and additional

funding for the Delhi Circle. Acquired Escotel Mobile Communications Limited

(subsequently renamedas Idea Mobile Communications Limited) Reached the four million

subscriber mark. First operator in India to commercially launch EDGE services.

2005: - Reached the five million subscriber mark

-Turned profit positive

- Won an award for the “Bill Flash” service at the GSM Association Awards in

Barcelona, Spain Sponsored the International Indian Film Academy Awards

- Sponsored the International Indian Film Academy Awards

2006:

- Became part of the Aditya Birla Group subsequent to the TATA Group transferring its

entire shareholding in the Company to the Aditya Birla Group

- Acquired Escorts Telecommunications Limited (subsequently renamed as Idea

Telecommunications Limited)

- Restructuring of debt

- Launch of the New Circles

- Reached the 10 million subscriber mark

- Received Letter of Intent from the DoT for a new UAS License for the Mumbai Circle.

- Received Letter of Intent from the DoT for a new UAS License for the Bihar

- Circle through Aditya Birla Telecom Limited. ABNL, the parent of Aditya

- Birla Telecom Limited, pursuant to a letter dated November 22, 2006, agreed to transfer

its entire shareholding in Aditya Birla Telecom Limited to the Company for the

consideration of Rs. 100 million.

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HRIHE, HASSAN

2007

- Won an award for the CARE service in the Best Billing or CustomerCare Solution at

the GSM Association Awards in Barcelona, Spain

- Initial Public Offering aggregating to Rs. 28,187 million and Listing of Equity Shares

on the Bombay Stock Exchange and theNational Stock Exchange

- Merger of seven subsidiaries with Idea Cellular Limited

- Reached the twenty million subscriber mark

2011

- Idea Cellular Ltd has informed that the Board of Directors of theCompany at its

meeting held on October 20, 2011, inter alia, has appointed the following persons as

Directors on the Board of the Company:

1. Mr. R C Bhargava - Independent Director (Additional Director)

2. Mr. P Murari - Independent Director - (Additional Director)

3. Dr. Hans Wijayasuriya - Non Executive Director

(Nominee of TM International Bhd).

- Idea acquired 9 licences for Punjab, Karnataka, Tamil Nadu & Chennai, West Bengal,

Orissa, Kolkata, Assam, North East and Jammu &Kashmir

- Acquired Spice Communications with the operating circles of Punjab and Karnataka

- Launched services in Mumbai metro in the largest single metro city launch, ever

- Launched services in Bihar 2009

- Subscriber base as on December 31, 2009: 57,611,872

- Idea becomes a pan-India operator

- Emerging Company of the Year - fastest growing mobile operator in the world’s fastest

growing telecom market

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HRIHE, HASSAN

AWARD AND ACHIEVEMENT

The company has its retail outlets under the "My Idea" banner. The company has also

been the first to offer flexible tariff plans for prepaid customer. It also offers GPRS services

in urban areas Idea Cellular won the GSM Association Award for "Best Billing and Customer

Care Solution" for 2 consecutive years.

IDEA Cellular has been recognized as the 'Most Customer Responsive Company' in

the Telecom sector, at the prestigious Avaya Global Connect Customer Responsiveness

Awards 2011.

Vision:

One of the most common Vision statements I’ve come across is ‘to be the most

profitable company’ or ‘to be the #1 in the category’.

Mission

The Indian telecommunications market for mobile services is divided into 23

“Circles”. There are four “metropolitan” Circles, covering the cities of Mumbai, Delhi,

Kolkata and Chennai, and 19 Circles classified by theGovernment as category “A”, category

“B” or category “C”, which cover the rest of India. These classifications are based principally

on a Circle’s revenue generating potential, with metropolitan and category A Circles having

the highest revenue potential.

Established Circles

We operate in the metropolitan Circle of Delhi, the category A Circles of Andhra

Pradesh, Gujarat and Maharashtra, and the category B Circles of Haryana,

Kerala, Madhya Pradesh and Uttar Pradesh (West).

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HRIHE, HASSAN

Licenses for the Maharashtra and Gujarat Circles were awarded to us in

December 1995, with network rollout and commercial launch achieved in 1997.

Subsequently, in January 2000, we merged with Tata Cellular Limited, the mobile operator in

the Andhra Pradesh Circle, and integrated its operations into ours byJanuary 2001. In

February 2001, we acquired RPG Cellcom Limited, the mobile operator in the Madhya

Pradesh Circle, with full integration of this Circle with

ours achieved by June 2001. We acquired the license for the Delhi Circle during the fourth

mobile license auction in October 2001, with network rollout and

commercial launch by November 2002. Escotel Mobile Communications Private Limited

(“Escotel”), which we acquired in January 2004, was awarded the originallicenses in the

Circles of Haryana, Uttar Pradesh (West) and Kerala. We re-branded these Circles and

integrated them with ours by June 2004

.

New Circles

In connection with the acquisition of Escotel, we also acquired Escorts

Telecommunications Limited (“Escorts”), which was awarded licenses for the

New Circles. Due to certain existing license conditions we were unable to complete the

transfer of shares of Escorts until June 2006. However, we ensured

that Escorts met the first phase of network requirements for these New Circles in June 2005

in accordance with the relevant licenses (as amended following the

payment of a penalty by us on behalf of Escorts).

Following significant investment by us in the roll-out of the network in the New

Circles, amounting to approximately Rs. 4,678 million upto September 30,

2006, we were able to achieve full commercial launch of mobile services in the New Circles

between September and November 2006 in a manner which also met the network roll-out

requirements of the licenses which were to be completed by

June 2007.

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HRIHE, HASSAN

Area of operation

Idea's subscriber base as at the end of January 2011 according to the is as follows

Maharashtra and Goa - 12,075,220

Madhya Pradesh and Chhattisgarh - 8,401,422

Andhra Pradesh - 7,831,260

Kerala - 6,398,170

Kolkata -10,001,804

Gujarat - 6,632,034

Uttar Pradesh (West) & Uttarakhand - 7,361,534

Delhi - 3,609,746

Haryana - 2,847,079

Uttar Pradesh (East) - 4,935,224

Rajasthan - 2,823,910

Himachal Pradesh - 479,882

Mumbai - 1,822,280

Bihar & Jharkhand - 4,280,626

Tamil Nadu & Chennai - 1,202,343

Orissa - 985,737

Punjab (Spice) - 4,160,189

Karnataka (Spice) - 3,775,443

West Bengal - 1,728,308

Assam - 206,140

Jammu & Kashmir - 93,072

North East India except Assam - 128,807

Totaling to 84,289,641 or 10.93% (Approx.) of the total mobile connections in India.

31

HRIHE, HASSAN

BACKGROUND

Idea Cellular Ltd

Industry :Telecommunications - Service Provider

Incorporation Year 1995

Chairman Kumar Mangalam Birla

Managing Director Himanshu Kapania

Company Secretary Pankaj Kapdeo

Auditor Deloitte Haskins and Sells

Registered Office Suman Tower Plot No 18, Sector 11,

Gandhinagar, 382011, Gujarat

Telephone 91-79-66714000

Fax 91-79-23232251

E-mail [email protected]

Website http://www.ideacellular.com

Face Value (Rs) 10

BSE Code 532822

BSE Group A

NSE Code IDEA

Bloomberg IDEA IN

Reuters IDEA.BO

ISIN Demat INE669E01016

Market Lot 1

Listing Mumbai,NSE

Financial Year End 3

Book Closure Month Sep

AGM Month Sep

Registrar's Name & Address Bigshare Services Pvt Ltd, E-2/3 Ansa Indl Est,

Saki Vihar Road, Sakinaka Andheri(E),

Mumbai - 400072. 91-22-28470652/53

91-22-28475207

32

mailto:[email protected]

HRIHE, HASSAN

DIRECTORS

Idea Cellular Ltd


Designation Name Remunerations

Chairman Kumar Mangalam Birla 80,000.00

Director Rajashree Birla 80,000.00

Director Sanjeev Aga 79,430,000.00

Director Arun Thiagarajan 130,000.00

Director Tarjani Vakil 140,000.00

Director Mohan Gyani -

Director Biswajit Anna Subramanian 80,000.00

Director Gian Prakash Gupta 110,000.00

Company Secretary Pankaj Kapdeo -

Director R C Bhargava 20,000.00

Director P Murari 40,000.00

Director Rakesh Jain 80,000.00

Nominee Juan Villalonga Navarro -

Alternate Director Shridhir Sariputta Hansa

Wijayasuriya

90,000.00

33

HRIHE, HASSAN

IDEA CELLULAR LTD


(Rs in Crs)

Subsidiary Name Carlos Tower Ltd

Year Mar 10

No Of Shares 50000

Face Value (Unit Curr.) 10

Investment Cost 0.05

Holding (%) 100.00

Subsidiary's Year end 201003

NP in Holding Co a/cs (PY) 0.00

NP not in Holding Co a/cs (PY) 0.00

NP in Holding Co a/cs (CY) 0.00

NP not in Holding Co a/cs (CY) -0.01

Equity Subscribed 0.05

Subsidiary 's Reserves -0.01

Fixed Assets 0.00

Net Current Assets 0.00

Sales Turnover 0.00

Profit After Tax -0.01

Product1 -

Product2 -

34

HRIHE, HASSAN

MCKINSEY’S 7S MODEL

Need For The Study

The need to undergo this training for a MBA student of Mysore University is to fulfill

the requirement of MBA Degree Course of Mysore University. This training is undertaken

during July 2011 and the main purpose of the training is to know the practical implication and

policies of the company.

Objectives of the Study

The objective of undergoing this training is to get the practical exposure of the

functional departments of the organization. During training, we study how the theoretical

knowledge is practically applied in different departments in the organization. During my

training I was also offered a research study titled , ” A Org Study On Idea Call service”. The

prime objective of the study was to know about the Idea customers who use the Call service

while they are out of the state.

There are many management approaches, which talk about managing the things and

operations in an organization one of the famous model to analyze the pattern of the

management is’ the 7 S model better known as Mckensy‘s 7 S this is because the two persons

who developed this model . Tom pet us and Robert waterman have been consultant at

Mckensy’s company at that time.

They described that as an organization is not just “structure but consist of 7 features

which can be distinguished into so hard 55 and soft S. They published their 7 S model in the

article of "Structure is not organization" (1980) and their books “The Art of Japanese

Management" and “In search of Excellence: (1982).

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HRIHE, HASSAN

The model is very much helpful in viewing the interrelationship of Strategy

formulation and interpretation. It focuses manager’s attention to a variety of activities that

many affect of the implementation of any Strategy. as the model originally developed as a

way of thinking more broadly about the problems of organizing effectively. It is or judge tool

for the implementation of strategies. While thinking comprehensively about a new Strategy

and the problem that arise in canopying it out. A manager must think about the ability of The

Company to get anything really accomplished as matter of moving a whole culture. Manager

need not to consider all factors of model for the successful implementation of any strategy.

The 7 S is mainly distinguished into Hard and Soft’s

The Hard elements are feasible and is to identity as they can be found in a strategy

statements corporate plans again: rational C banjoes and other documentation of the

company. They includes

Strategy

System

Structure

The soft Elements are basically feasible because of difficulty involved in describing them

as capabilities, values and element of corporate culture and frequently developing and

changing they include.

Style

Staff

Skills

Shared values

36

HRIHE, HASSAN

STRUCTRE :

How is the company/team divided?

What is the hierarchy?

How do the various departments coordinate activities?

How do the team members organize and align themselves?

Is decision making and controlling centralized or decentralized? Is this as it should be,

given what we’re doing?

Where are the lines of communication? Explicit and implicit?

Organizational strucutre means it offers more organizanal management and relationship.

It gives the perfect picture about the person who is to take what decision and to what extent,

which is aouthorised perform what all duties and who is greatere than whom.

It corrects and provides with clear data of all relationship and provides frame work

within which all duties and activities takes place and grow

37

HRIHE, HASSAN

CMD IDEA

DIRECTOROPERATIONS

DIRECTOR COMML&MKT

DIRECTOR PLANNING&NS

DIRECTOR HRD

CS&GM (legal)

SR.DDG(Vigilance)

CGMsT.circle/MD

Sr.DDG (CS)Sr.DDG (MS)Sr.DDG (NW&WS)Sr.DDG (PG)Sr.DDG (IT)Sr.DDG (NM)Sr.DDG (MIS)Sr DDG (TS)Sr. DDG (WS&I)CGM(MTCE Reg) -ETR -NTR - STR - WTRCGM (NCES)

CGM (T&D)

Sr.DDG (BBD)Sr.DDG (CMTSOM)DDG (CMTS)DDG (COMML)DDG (MKTG)DDG (REGULN)

Sr.DDG (ARC)Sr.DDG (BW)SR.DDG (ELEC)Sr.DDG (SP)Sr.DDG (SW)Sr.DDG (TX)Sr.DDG (NS)DDG (Broadband)DDG (MM)DDG (RN)DDG (TF)DDG (LTP)DDG (CTF)CGM (NETF)CGM (Project)-ETP-NTP-STP-WTPCGM (QA)CGM (RE)CGM (TS)CGM (TFs)-Jabalpur-Kolkata-Mumbai-Richhai

Sr.DDG (EST)Sr.DDG (PERS)DDG (IR)DDG (RESTR)DDG (SR)DDG (TRG)CGM, ALTICCGM,BRBRAITT

Andman & NicobarAndhra PradeshAssamBiharChattisgarhGujratHaryanaHimachal PradeshJhrakhandJammu & KashmirKarnatakaKeralaMadhaya PradeshMarashtraNorth East-INorth East-IIOrrisaPunjabRajasthanTamilnaiduUttar Pradesh(W)Uttar Pradesh (E)UttranchalWest BengalChennai TDKolkata TD

Sr.DDG (EFC)Sr.DDG (PF)Sr.DDG (FP)Sr.DDG (BBF)Sr. DDG (CA)Sr. DDG (IA)Sr. DDG (TRF)Sr. DDG (SPF)

DIRECTORFINANCE

ORGANIZATION CHARTOF IDEA

38

HRIHE, HASSAN

SKILLS:

What are the strongest skills represented within the company/team?

Are there any skills gaps?

What is the company/team known for doing well?

Do the current employees/team members have the ability to do the job?

How are skills monitored and assessed?

Skill is the distinctive capabilities or competences of personal or of the organization as

whole. In other words it is what the company does the best in way of selecting capable

personas and well trained person. In IDEA all employees are skilled and well educated, in

some area there is a need of training.

STYLE:

How participative is the management/leadership style?

How effective is that leadership?

Do employees/team members tend to be competitive or cooperative?

Are there real teams functioning within the organization or are they just nominal

groups?

Style basically means management behavior towards employees, customers, share

holders, suppliers, and every other person dealing with the company. A particular style

adopted by the company will have various implications over various people dealing with the

organization and thus it will have an impact over the relationship between the organization

and the other party.

With the shift with style in management IDEA is organization is able to improve

relationship with its internal and external customers over a period of time. It try to solve any

kind of disputes arising in the management activities to a peaceful dealings.

39

HRIHE, HASSAN

Authority flow from the top to bottom, thus the organization structure helps to grant the

authority to the people to carry out the duties of their jobs and determinations the

performance evaluation, management directs, coordinate and the control the activities.

STRATEGIES :

What is our strategy?

How do we intend to achieve our objectives?

How do we deal with competitive pressure?

How are changes in customer demands dealt with?

How is strategy adjusted for environmental issues?

Strategy is the choice of direction and action of the company adopt to achieve its

objectives in various situations. It explains the objectives of the organization and how the

company achieves them.

The company aims at customer satisfaction through high quality of service

The improvement in the performance is driven by a focus on cost reduction materials

and operating expenses as well as by increasing in sales volume.

SYSTEM :

What are the main systems that run the organization? Consider financial and HR

systems as well as communications and document storage.

Where are the controls and how are they monitored and evaluated?

What internal rules and processes does the team use to keep on track?

System in the 7’S frame work refers to all the rules regulations and procedure both formal

and informal that compliment the organization structure. System is an assembly of things

connected or interrelated So as to form a complex unity, or whole composed of parts in

orderly arrangement according to Some scheme or, plan. This has been defined as an

organized or complex whole an assemblage combination of things or parts farming or

complex unitary whole.

40

HRIHE, HASSAN

A system basically a combination of parts, subsystems, each part may have various

Subparts. When a sub. System is considered as a system without reference to the system.

Which it is or Points it has the same features of a system.

STAFF:

What positions or specializations are represented within the team?

What positions need to be filled?

Are there gaps in required competencies?

Staffing is the process of acquiring human resources for the organization and

assuming that they have the Potential to contribute to the achievement of the organizational

good. In the Mckensys 7 s team work the term staff has a specific connotation. The term

staff refers to way organizations introduce young recruits into the mainstream of their

activities. Company's people resources and how they are trained, developed and motivated.

Presently the IDEA has around 1951 employees and group A 13 employees group B 274

group C 1572 and group D 78 employees.

SHARED VALUES

What are the core values?

What is the corporate/team culture?

How strong are the values?

What are the fundamental values that the company/team was built on?

Shared values means that the employees share the same guiding values are things that

you would strive for even they were demonstrably not profitable. Values act as an

organization’s conscience, providing in times of crisis. Identifying corporate value is also the

first essential step in defining the organization’s role in the larger community in which it

functions. In IDEA all the workers are well informed and educated about their work and also

The organization goal and principles which helps in achievement of the goals.

SWOT ANALYSIS

41

HRIHE, HASSAN

Strengths

• Idea cellular has more than 65 million customers (July 2011). It is the largest cellular

provider in India, and also supplies broadband and telephone services - as well as

many other telecommunications services to both domestic and corporate customers.

• Other stakeholders in Idea cellular include Sony-Ericsson, Nokia - and Sing Tel, with

whom they hold a strategic alliance. This means that the business has access to

knowledge and technology from other parts of the telecommunications world.

• The company has covered the entire Indian nation with its network. This has

underpinned its large and rising customer base.

Weaknesses

• An often cited original weakness is that when the business was started by adithya birla

over 15 years ago, the business has little knowledge and experience of how a cellular

telephone system actually worked. So the start-up business had to outsource to

industry experts in the field.

• Until recently Idea did not own its own towers, which was a particular strength of

some of its competitors such as Hutchison Essar. Towers are important if your

company wishes to provide wide coverage nationally.

• The fact that the Idea has not pulled off a deal with South Africa's MTN could signal

the lack of any real emerging market investment opportunity for the business once the

Indian market has become mature.

Opportunities

• The company possesses a customized version of the Google search engine which will

enhance broadband services to customers. The tie-up with Google can only enhance the

Idea brand, and also provides advertising opportunities in Indian for Google.

• Global telecommunications and new technology brands see Idea as a key strategic player

in the Indian market. The new iPhone will be launched in India via an Idea distributorship.

Another strategic partnership is held with BlackBerry Wireless Solutions.

• Despite being forced to outsource much of its technical operations in the early days, this

allowed Idea to work from its own blank sheet of paper, and to question industry

approaches and practices - for example replacing the Revenue-Per-Customer model with a

Revenue-Per-Minute model which is better suited to India, as the company moved into

42

HRIHE, HASSAN

small and remote villages and towns.

• The company is investing in its operation in 120,000 to 160,000 small villages every year.

It sees that less well-off consumers may only be able to afford a few tens of Rupees per

call, and also so that the business benefits are scalable - using its 'Matchbox' strategy.

• Idea cellular is embarking on another joint venture with Vodafone Essar and Idea Cellular

to create a new independent tower company called Indus Towers. This new business will

control more than 60% of India's network towers. IPTV is another potential new service

that could underpin the company's long-term strategy.

Threats

• Idea and Vodafone seem to be having an on/off relationship. Vodafone which owned a

5.6% stake in the Idea business sold it back to Idea, and instead invested in its rival

Hutchison Essar. Knowledge and technology previously available to Idea now moves into

the hands of one of its competitors.

• The quickly changing pace of the global telecommunications industry could tempt Idea to

go along the acquisition trail which may make it vulnerable if the world goes into

recession. Perhaps this was an impact upon the decision not to proceed with talks about

the potential purchase of South Africa's MTN in May 2011. This opened the door for

talks between Reliance Communication's Anil Ambani and MTN, allowing a competing

Inidan industrialist to invest in the new emerging African telecommunications market.

• Idea cellular could also be the target for the takeover vision of other global

telecommunications players that wish to move into the Indian market.

Idea comes to you from Idea cellular Limited, India's largest integrated and the first

private telecom services provider with a footprint in all the 23 telecom circles. Idea cellular

since its inception has been at the forefront of technology and has steered the course of the

telecom sector in the country with its world class products and services. The businesses at

Idea cellular have been structured into three individual strategic business units (SBU's) –

Mobile

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HRIHE, HASSAN

FINANCIAL ANALYSIS

Fund Flow

Idea Cellular Ltd


(Rs in Crs)

Year Mar 10

Sources of funds

Cash profit 4221.14

Increase in equity 199.74

Increase in other networth 0

Increase in loan funds 0

Decrease in gross block 0

Decrease in investments 2173.68

Decrease in working capital 1561.39

Others 0

Total Inflow 8155.95

Application of funds

Cash loss 0

Decrease in networth 1090.59

Decrease in loan funds 1052.95

Increase in gross block 6012.41

Increase in investments 0

Increase in working capital 0

Dividend 0

Others 0

Total Outflow 8155.95

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HRIHE, HASSAN

Profit & Loss

Idea Cellular Ltd


(Rs in Crs)

Year Mar 10(12)

INCOME :

Sales Turnover 11,850.24

Excise Duty 0.00

Net Sales 11,850.24

Other Income 587.38

Stock Adjustments 0.00

Total Income 12,437.62

EXPENDITURE :

Raw Materials 0.02

Power & Fuel Cost 968.89

Employee Cost 563.78

Other Manufacturing Expenses 6,012.05

Selling and Administration Expenses 1,390.15

Miscellaneous Expenses 219.09

Less: Pre-operative Expenses

Capitalised

0.00

Total Expenditure 9,153.98

Operating Profit 3,283.64

Interest 563.71

Gross Profit 2,719.93

Depreciation 1,551.20

Profit Before Tax 1,168.73

Tax 0.00

Fringe Benefit tax 0.00

Deferred Tax 115.07

Reported Net Profit 1,053.66

Extraordinary Items 61.41

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HRIHE, HASSAN

Adjusted Net Profit 992.25

Adjst. below Net Profit -1,529.21

P & L Balance brought forward -405.28

Statutory Appropriations 0.00

Appropriations -484.46

P & L Balance carried down -396.37

Dividend 0.00

Preference Dividend 0.00

Equity Dividend % 0.00

Earnings Per Share-Unit Curr 3.19

Earnings Per Share(Adj)-Unit Curr

Book Value-Unit Curr 34.59

BS Consolidated

Idea Cellular Ltd


(Rs in Crs)

Year Mar 10

SOURCES OF FUNDS :

Share Capital 3,301.76

Reserves Total 8,026.15

Equity Share Warrants 0.00

Equity Application Money 44.45

Total Shareholders Funds 11,372.36

Minority Interest 0.00

Secured Loans 7,316.62

Unsecured Loans 542.68

Total Debt 7,859.30

Total Liabilities 19,231.66

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HRIHE, HASSAN

APPLICATION OF FUNDS :

Gross Block 27,064.66

Less: Accumulated Depreciation 8,890.68

Net Block 18,173.98

Lease Adjustment 0.00

Capital Work in Progress 546.47

Investments 1,130.37

Current Assets, Loans & Advances

Inventories 53.64

Sundry Debtors 465.56

Cash and Bank 289.99

Loans and Advances 2,853.83

Total Current Assets 3,663.02

Less : Current Liabilities and Provisions

Current Liabilities 3,844.72

Provisions 223.26

Total Current Liabilities 4,067.98

Net Current Assets -404.96

Miscellaneous Expenses not written off 0.00

Deferred Tax Assets 479.26

Deferred Tax Liability 693.46

Net Deferred Tax -214.20

Total Assets 19,231.66

Contingent Liabilities 3,012.71

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HRIHE, HASSAN

Key Financial Ratios

Idea Cellular Ltd


Mar 10

Key Ratios

Debt-Equity Ratio 0.62

Long Term Debt-Equity Ratio 0.55

Current Ratio 0.97

Turnover Ratios

Fixed Assets 0.62

Inventory 265.02

Debtors 31.20

Interest Cover Ratio 3.07

PBIDTM (%) 27.71

PBITM (%) 14.62

PBDTM (%) 22.95

CPM (%) 21.98

APATM (%) 8.89

ROCE (%) 9.20

RONW (%) 8.95

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HRIHE, HASSAN

Valuation Ratios

Idea Cellular Ltd


Mar 10

Price Earning (P/E) 20.52

Price to Book Value ( P/BV) 1.89

Price/Cash EPS (P/CEPS) 8.29

EV/EBIDTA 8.48

Market Cap/Sales 1.82

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HRIHE, HASSAN

FINDINGS

Based on the feedback obtained from the people the findings were as follows:

Most of the people use Call service either for regional Call or for national Call. Only a

negligible amount of people use international Call service.

The purpose for using the Call service are either personal or for official reasons. But

is widely used for personal reason.

It was inferred that around 55% of the people use their own cell phone for making

outgoing call while on Call.

The facilities that are widely use by the people while on Call are receiving call,

making outgoing call and to receive Sms.

The study reveled that around 62% of the people are not sure about the deposit/rental

charges that one has to pay for availing the Call service and 23% doesn’t know about this.

Only 26% of the people are aware of the per minute call charges charged by Idea

while they are on Call.

The study also reveled that about 75% of the customers spends up to Rs100 per month

in an average for the Call service used and only 4% more than Rs 200.

When asked about what steps taken by Idea would make them to use Call service

more often it was found that nearly 50% of the people wants the incoming calls to be made

free, 20% wants reduction in call charges.

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HRIHE, HASSAN

When asked about which connection is cheaper to use Call service, 32% felt that Pre-

paid connection is cheaper while 30% are with the opinion that it’s the same on Pre-paid and

Post-paid connections.

When asked regarding which mobile operator is charging the lowest fares for the Call

service, around 26% are with the view that all the cellular operators are charging the same

fares. 18% fells that Idea is cheaper and 20% feels that Reliance is cheaper to use while on

Call.

It is facing heavy competition from its competitors.

It should improve its services to rural area also.

Its signal strength to reach the for away areas is low.

It losing its customers due to inconvenient service rendered by it.

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HRIHE, HASSAN

SUGGESTIONS AND RECOMMENDATIONS

Idea should continuously improve the standards and competitiveness of the Cellular

service and should try to attain the status of world class infrastructure and deliver the benefits

of affordable mobile telephony services to the people of India.

It should maintain and upgrade the quality of services in terms of speech transmission,

ability to access services, coverage, security etc., to facilitate the expansion of cellular

services.

Idea should take more aggressive stand to safeguard its position as number one

cellular operator in Karnataka and also should attempt to strengthen its position in the entire

country.

Idea should undertake continuous efforts to ensure customer satisfaction.

Idea should strengthen - strong marketing, huge nationwide reach and financial

stability - to edge out its rivals in the western belt in the coming months.

They should come within the scenario of attractive packages, what will actually

benefit the customer.

Idea should start its operations in North-eastern states and in the state of Jammu &

Kashmir as this region are backward in Tele-communication.

They should spread its network to the entire parts of rural Karnataka and should

install few more towers in the urban regions to improve its connectivity.

The company should come up attractive offers and schemes in order to maintain its

existing customer and to attract its rival’s customers.

Idea should add more countries under its belt to provide seamless international Call

service.

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HRIHE, HASSAN

Idea should lower the call charges to its Call service customers. The Call service tariff

should be clearly communicated to the customers.

The rental and deposit charges that one has to pay for activating the Call service or

using the Call service services should be lowered and stated clearly to its customers.

Idea should make incoming free to its customers while on Call service as this will

induce more and more customers to use Call service service.

Idea should keep the Call service tariff lower than that of its competitors.

Idea per minute call charges charged for Call service customer are not uniform. This

is creating great confusion. So Idea must take necessary measure to bring uniformity in the

per minute call charges.

The international Call service tariff should be revisited.

The customers should be informed through sms regarding the network that they have

to select while they are on to Call service.

The customers should be able to get access to the Idea customer care of Karnataka

while they are on Call service for getting their queries solved.

The state of Maharashtra and Goa should be included under the zonal Call service area.

The company should come with attractive Call service package, what will actually

benefit its Call service customers, and would make more customers to use the Call service

service.

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HRIHE, HASSAN

CONCLUSION

Idea comes from Idea Cellular Limited - a part of the biggest private integrated

telecom conglomerate, Idea Enterprises. Idea is the leading cellular service provider, with a

footprint in 15 states covering all four metros. It has over eight million satisfied customers.

Idea, 28-percent-owned by Singapore Telecommunications Ltd., is India's market

leader for services using the GSM (Global System of Mobile Communications) standard. Its

India’s leading private sector provider of integrated telecommunications services with an

aggregate of 8.0 million mobile customers across the country & over 10 lakhs customers in

Karnataka. It is also the leading cellular service provider in Karnataka leaving behind all the

other operators. Today, Idea offers its customers choice and superior value for money with a

range of innovative value-added services backed by excellent customer service. The

customers can either opt for Pre-paid scheme or the Post-paid scheme. As a socially

responsible corporate citizen of Karnataka and the Category leader, Idea shall always be at

the forefront to support social initiatives.

In a survey conducted by TRAI in March 2003 for service quality – Idea Karnataka

has been Ranked BEST Cellular Service Provider in the country & is also the first operator to

be bestowed the ISO certification for quality standards The subscribers base for GSM-based

operator Idea Tele-Ventures Ltd, rose 4.3% to 8 million in July from 7.67 million the

previous month. Consecutively for four years 1997,1998, 1999 and 2000, Idea has been voted

as the Best Cellular Service in the country and won the coveted Techies award Call service is

defined as the ability for a cellular customer to automatically make & receive voice calls,

send & receive data, or access other services when travelling outside the geographical

coverage area of the home network, by means of using a visited network.

If the visited network is in the same country as the home network, this is known as

National Call service. If the visited network is outside the home country, this is known as

International Call service. Idea's Call service allows its customers use their mobile phone to

make or receive calls from almost anywhere in India and abroad.

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HRIHE, HASSAN

Idea Call service has two great options: Idea National Call service- 46 partner

networks Idea International Call service - 337 networks and 137 countries. Idea Call service

involves Call service between GSM networks, offers the convenience of a single number, a

single bill and a single phone with worldwide access to over 100 countries. Idea today

provides seamless Call service across 137 countries, 1024 cities across India and covers 151

towns in Karnataka. Services offered while on Call service depend on the visited Network. If

the visited network is supporting all the services offered by Idea in the home network, than

you can enjoy all those services.

The Call service charges are usually higher. When it comes to international Call

service the charges goes very high. Moving seamlessly from one coverage area to another

with no loss in connectivity is the standard feature of Idea Call service. You keep your

number, and all the Idea services will follow you.

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HRIHE, HASSAN

LEARNING EXPERIENCE

Learning Experience Gained

Without a sound and effective telecommunication system in India it cannot have a

healthy economy. The telecommunication system of India should not only be hassle free but

it should be able to meet new challenges posed by the technology and any other external and

internal factors.

Various service providers like Public Sector, Private Sector. are making sincere

efforts to meet the expectations of the customer by providing better products and services.

Idea cellular is one among the Top Three in private sector. The study has highlighted that the

Idea is mainly focusing on customers’ satisfaction through various services..The study

reveals that the Idea cellular continues to identify new areas and activities that require

attention, for example the very recent services like 3G.

The risk management skills, process, and practices that need to be developed and

strengthened. Highly focused on human resources initiative. An employee is given ample

opportunities to learn and grow.

Apart from these issues the Idea cellular has to concentrate on various aspects like: Provide

employment opportunities, provide better services, and focus on 3G, rural areas because they

constitute a major part for the development of GDP of any nation; better training has to be

given to the employees so that they can cope up with the latest technology which the Idea is

adopting now a days (3G).

In the present era, many services providers make their best effort to attract number of

customer towards them, which resulted in aggressive competition in telecommunication

industry. So, Idea must cope up with the latest technology so as to provide better services for

the customers, they must make an effort to study well the mindset of the customer and

provide new products and services. As all the service providers are trying to attract more

industry.

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HRIHE, HASSAN

BIBLIOGRAPHY

News paper: The times of India

Websites: www.ideacellular.com

www.google.com

Reference book: Research methodology by C R Kothari

IBA bulletins.

Brochures, Hand Books, Circulars, Magazines, Annual reports provided by idea

cellular

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