By: ISHITA SHAHPGDM 2011-13

Summer Intern, IDEA CELLULAR LIMITEDEnrollment no:030301046

Pricing Strategy Adopted in 3G Technology Within Telecom Sector

Contents…

• Overview of Company.• Competition.• SWOT Analysis.• Objective of SIP.• Target.• Working Strategy.• Achievement.• Learning and Experience.

The Company: Introduction • The company was incorporated as Birla Communications

Limited on March 14, 1995 and commenced business on August 11, 1995.

• Registered office was in Mumbai, Maharashtra.• The company 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 Industries Limited.

• Changed name to Idea Cellular Limited and launched "Idea" brand name in 2002.

• It provides wireless and long distance voice and internet services to consumer and enterprise markets

• Idea became a pan-India operator in 2009

• The market positioning of Idea reflects the strength of its brand considering the fact that Idea added 11 out of its total 22 service areas in the past four years.

• Today, it is a pan-India player with commercial 2G operations in 22 service areas, and 3G in nine of these circles.

• Its subscriber base has grown multifold, from 7.37 million in March 2006 to 89.5 million in March 2011.

• Idea holds 16 per cent stake in Indus Towers, a joint venture with other telecom majors Bharti Airtel and Vodafone.

• Indus Towers is the world's largest tower company with over one lakh towers.

Vision: To be the most customer-focused mobile service brand, continuously innovating to help liberate our customers from the shackles of time & space.

Mission : We will delight our customers while meeting their individual communication needs time anywhere. We survive because of our customers.

Founding Fathers

Mr. G. D. Birla and Mr. Aditya Birla

Integrity

Passion

Commitment

Speed

Seamlessness

OVERVIEW OF 2G AND 3G• 2G NETWORK:

– Evolved from 1G– First system that used digital

signals– Improve speech quality,

coverage and security.– It introduced data services for

mobile,starting wth SMS text messages

• TECHNOLOGY USED IN 2G

• Divided into TDMA and CDMA based standards depending upon

multiplexing used.

– TDMA Standards: (a) GSM (Global System Mobile) (b) Interim Standard 136(IS-136) (c) Pacific Digital Cellular(PDC)

3g network

• 3rd generation mobile communication.

• It offers high speed data rate.

• Offers wide range of services.

• Increased bandwidth.

Road to 3g

where lies the difference???• 2G use different switching techniques for voice and data, where

3G uses single switching for any kind of data.

• 2G is circuit-switched, but 3G is packet-switched.

• GSM uses TDMA technology with narrowband 200Khz, 3G (WCDMA) use CDMA technology with broadband 5Mhz.

• 2G has low data rate, voice oriented services.•

3G has higher data rate and data oriented services3G enables Multiplexing of services with different quality

requirements on a single connection, e.g. speech, video and packet data.

GSM EVOLUTION FOR DATA ACCESS

Gsm,9.7kbps,1997

Gprs115kbps2000

Edge384kbps2003

Umts2mbps2003+

Wireless Access Evolution

Broadband New Services Efficiency

Broadband

Subscribers

Voice

Coverage Mobility

Voice Quality Portability Capacity

Broadband Network

Simplification Cost of

Ownership

Entry into 3G 3G

• Idea's 3G services start from chattisgarh, Gujarat and Hp & MP•

It Plans progressive pan-India rollout of 'Gold Standard' 3G services to ensure unmatched customer experience in 200 towns by April '11 and 4,000 towns by 2012. To enjoy Video Conferencing, Video on Demand, Mobile TV and high-speed Internet, Introduces Time based Billing plan for 3G services

• Idea has traditionally focused on growth from semi-urban heartlands of India and will continue to drive its 3G services from these industrial, agricultural and educational region.

Product Offerings

TIER 1- Metropolitan CircleCustomer Segmentation Description

Products pre-paid and post-paid mobile services

Services GPRS, voice and SMS based entertainment services, call-forwarding, call conferencing, regional, on-net, national and international roaming, GSM gateways, vehicle tracking; and Automatic Meter Reading

Channels Direct Outlets

Unique Competencies 6 SIGMA, Net Setter Data Cards & Blackberry Solution, largest customer base,, market leader in the Maharashtra, Strong distribution channels

The Customer:

TIER 2- Urban CircleCustomer Segmentation Description

Products pre-paid and post-paid mobile services

Services GPRS enabled information services like internet browsing, data cards and mobile email, call-forwarding, Ring Back Tones, background Music, voice and SMS chat, ringtones, horoscopes, expert advise and subscription services;

Channels Both Direct & Indirect

Unique Competencies 6 SIGMA, High quality network structure, Centralization of several applications.

TIER 3 – Rural Circle

Customer Segmentation Description

Products pre-paid and post-paid mobile services

Services Krishi Voucher,, Providing health care services

Channels Indirect

Unique Competencies usage of solar power for Base Transceiver Station (“BTS), frequency optimization techniques

Competition

MARKET SHARE

IDEA

RELIANCE

AIRTEL

TATA

VODAFONE

UNINORBSN

L

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

INDIAGUJARAT

INDIAGUJARAT

Price of net setter

PREPAID POSTPAID0

200

400

600

800

1000

1200

1400

1600

1800

IDEAMTSVODAFONEAIRTELRELIANCETATA PHOTON

Network of 3G in Gujarat

cities and towns

0

50

100

150

200

250

IDEATATA PHOTON

MTSRELIANCE

AIRTELVODAFONE

IDEATATA PHOTONMTSRELIANCEAIRTELVODAFONE

Strength• Reputation of Brand• Technology innovation used in

Idea• Advertising and promotion in

Idea• High quality network structure

Weakness

• No Broadband service• Low coverage in India• Market leader only in North

India• Direct to Home Service is not

available• Less market share in urban

market

Opportunities

• The Indian telecommunication industry is growing at faster rate

• Low penetration, more particularly in rural India.

• New 3G launch

Threats• Intense competition.• Customers loyalty is low• Increasing cost of promotion.• Increased network cost.

Project Title

Pricing Strategy Adopted in 3G Technology Within Telecom Sector

PRICING

• “Pricing strategy has been always more of the poker game than a science.”

• “Successful pricing is an art, not a science.”

Pricing Strategies

Penetration Pricing

Market Skimming

Influence of Elasticity

Influence of Elasticity

• Price Inelastic:• % change in Q < % change in P• e.g. a 5% increase in price would be met by a fall in sales of

something less than 5% • Revenue would rise• A 7% reduction in price would lead to a rise in sales of something

less than 7%• Revenue would fall• Price Elastic:• % change in quantity demanded > % change in price• e.g. A 4% rise in price would lead to sales falling by something more

than 4%• Revenue would fall• A 9% fall in price would lead to a rise in sales of something more

than 9%• Revenue would rise

POSTPAID:

MTS RELIANCE TATA IDEA VODAFONE AIRTEL

UNLIMITED ADVANCE RENTAL

USUAGE BASE PLAN

REGULAR USUAGE BASE PLAN

MONTHLY PLAN

REGULAR MY BEST PLAN

TIME BASE PLAN

UNLIMITED

ADVANCE SILVERPLAN CASH BACK OFFER

ADVANCE RENTAL

DAY-NIGHT PLANS GOLDEN PLAN

DEVICE FREE OFFER

PLATINUM PLAN

PREPAID:

MTS RELIANCE TATA IDEA VODAFONE AIRTEL

UNLIMITED MB PACKS MONTHLY REGULAR PLANS

USUSAGE BASE

MONTHLY

MONTHLY UNLIMITED

LONG VALIDITY

LONG VALIDITY

WEEKAND PLANS

POSTPAID TARIFF:

IDEA TATA MTS RELIANCE AIRTEL

1GB RS 200 - 549 450

2GB RS 349 - 649

3GB 599 - 699 670

5GB - 850 RS - 750 RS 750 RS

10GB 1250 1100 - 950 RS

15GB - 1400 1200 RS

PREPAID TARIFF

MTS RELIANCE IDEA AIRTEL VODAFONE

1GB 647 RS 345 RS 450 RS

2GB 595 RS

5GB 798 RS 800 RS 745 RS 750 RS 801 RS

10GB 999 RS 1000 RS 1245 RS 1051 RS

15GB 1298 RS 1300 RS

•To make a understanding about the CompanyIDEACELLULAR LTD.

•To make a understanding about the services which they provide

•To know about the customer base of the IDEACELLULAR.

Targets

• First week of our sip we were not given any such target, just we were told to sell the maximum dongles and prepare a competitive report on six major operators of telecom industry namely; AIRTEL, MTS, TATA, RELIANCE, VODAFONE.

• Third week we were given target of logging the five dongles.• We were also given 103 accounts individually of corporate

to be mapped.• Sixth week we were given a target to logged 4 dongles in ten

days and one idea smart phone.• We were also given a trainee to whom we have to trained

and also recruit one trainee from our source.

Strategy Employed

PROSPECT CALLS

SUSPECT CALLS

Corporate calling

Personal network

References

Achievements

• Was the first to achieve the highest loggings in the first week of sip and was awarded for the same.

• Finished the target of logging the five dongles in the second month.

• Had made more than 50 calls in the corporate• Mapped around 30 companies with all information

from turnover to no.of sim cards to data cards to number of employees etc.

Learning

• Basic Definition of sales• How to take decision• Team building, I to WE• Documentation, difference between the

company account and the individual account.• Hard core sales• Network building