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A
PROJECT REPORT
OF
MARKETING MANAGEMENT
ON
Idea Cellular Limited
SUBMITTED TO:
PROF. BHAVESH VANPARIA
SUBMITTED BY:
AMIN PATTANI
ROLL NO. 08100
SEM – II, GROUP
- II
TOLANI INSTITUTE OF MANAGEMENT STUDIES Page1
Telecom Industry in India:
The telecom industry is one of the fastest growing industries in India. India has
nearly 200 million telephone lines making it the third largest network in the world
after China and USA. With a growth rate of 45%, Indian telecom industry has the
highest growth rate in the world.
Much of the growth in Asia Pacific Wireless Telecommunication Market is spurred by
the growth in demand in countries like India and China. India‘s mobile phone
subscriber base is growing at a rate of 82.2%.
China is the biggest market in Asia Pacific with a subscriber base of 48% of the total
subscribers in Asia Pacific. Compared to that India’s share in Asia Pacific Mobile
Phone market is 6.4%. Considering the fact that India and China has almost
comparable populations, India’s low mobile penetration offers huge scope for
growth.
History of Indian Telecommunications:
Started in 1851 when the first operational land lines were laid by the government
near Calcutta (seat of British power). Telephone services were introduced in India in
1881. In 1883 telephone services were merged with the postal system. Indian Radio
Telegraph Company (IRT) was formed in 1923.
After independence in 1947, all the foreign telecommunication companies were
nationalized to form the Posts, Telephone and Telegraph (PTT), a monopoly run by
the government's Ministry of Communications. Telecom sector was considered as a
strategic service and the government considered it best to bring under state's
control.
The first wind of reforms in telecommunications sector began to flow in 1980s when
the private sector was allowed in telecommunications equipment manufacturing. In
1985, Department of Telecommunications (DOT) was established. It was an
exclusive provider of domestic and long-distance service that would be its own
regulator (separate from the postal system). In 1986, two wholly government-
owned companies were created:
TOLANI INSTITUTE OF MANAGEMENT STUDIES Page2
the Videsh Sanchar Nigam Limited (VSNL) for international telecommunications and
Mahanagar Telephone Nigam Limited (MTNL) for service in metropolitan areas. In
1990s, telecommunications sector benefited from the general opening up of the
economy. Also, examples of telecom revolution in many other countries, which
resulted in better quality of service and lower tariffs, led Indian policy makers to
initiate a change process finally resulting in opening up of telecom services sector
for the private sector.
National Telecom Policy (NTP) 1994 was the first attempt to give a comprehensive
roadmap for the Indian telecommunications sector. In 1997, Telecom Regulatory
Authority of India (TRAI) was created. TRAI was formed to act as a regulator to
facilitate the growth of the telecom sector. New National Telecom Policy was
adopted in 1999 and cellular services were also launched in the same year.
Telecommunication sector in India can be divided into two segments: Fixed Service
Provider (FSPs), and Cellular Services. Fixed line services consist of basic services,
national or domestic long distance and international long distance services. The
state operators (BSNL and MTNL), account for almost 90 per cent of revenues from
basic services. Private sector services are presently available in selective urban
areas, and collectively account for less than 5 per cent of subscriptions. However,
private services focus on the business/corporate sector, and offer reliable, high- end
services, such as leased lines, ISDN, closed user group and videoconferencing.
Cellular services can be further divided into two categories: Global System for
Mobile Communications (GSM) and Code Division Multiple Access (CDMA). The GSM
sector is dominated by Airtel, Vodfone-Hutch, and Idea Cellular, while the CDMA
sector is dominated by Reliance and Tata Indicom.
TOLANI INSTITUTE OF MANAGEMENT STUDIES Page3
Opening up of international and domestic long distance telephony services are the
major growth drivers for cellular industry. Cellular operators get substantial revenue
from these services, and compensate them for reduction in tariffs on airtime, which
along with rental was the main source of revenue. The reduction in tariffs for
airtime, national long distance, international long distance, and handset prices has
driven demand.
Introduction of Idea Cellular Limited:
Idea Cellular is a part of the US $24 billion Aditya Birla Group and a leading GSM
mobile services operator with licenses to operate in 13 telecom service areas in
India. The company has operations in Delhi, Himachal Pradesh, Rajasthan, Haryana,
Uttar Pradesh (W) & Uttaranchal, Uttar Pradesh (E), Madhya Pradesh & Chattisgarh,
Gujarat, Maharashtra & Goa, Andhra Pradesh and Kerala with the planned
expansion into Mumbai, Bihar & Jharkhand.
Idea’s footprint will cover nearly 70 percent of India’s telephony potential. Idea
Cellular had 16.13 Million subscribers as on June 30, 2007, and had a market share
of 15.4 percent as on June 30, 2007 in its 11 service areas of operation.
History of Idea Cellular Limited:
Idea Cellular's history dates back to the year 1995, when it was incorporated as
Birla Communications Services The following year, the company entered into a joint
venture with Grasim Industries and the global telecom giant AT&T. The same year,
its name was changed to Birla AT&T Communications Limited. A merger with Tata
Cellular Limited took place in 2000. In 2002, the company created the brand ‘Idea'
and changed its name to Idea Cellular Limited. The same year it launched
operations in Delhi and crossed the one million subscriber base; in 2005, it crossed
the subscriber base of five million.
In 2006, the Tata Group transferred all its shares to the Aditya Birla Group and the
group became the largest shareholder in the company. In 2007, Idea came with an
IPO and got listed on the
TOLANI INSTITUTE OF MANAGEMENT STUDIES Page4
Marketing Report on Idea Cellular Ltd.
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