21-12-2012, 02:07 PM
VODAFONE MARKETING STRATEGY
1VODAFONE.docx (Size: 623.04 KB / Downloads: 58)
Industry profile
Introduction:
The telecom network in India is the fifth largest network in the world meeting up withglobal standards. Presently, the Indian telecom industry is currently slated to an estimatedcontribution of nearly 1% to India’s GDP.The Indian Telecommunications network with 110.01 million connections is the fifthlargest in the world and the second largest among the emerging economies of Asia
Today, it is the fastest growing market in the world and represents unique opportunitiesfor U.S. companies in the stagnant global scenario. The total subscriber base, which hasgrown by 40% in 2005, is expected to reach 250 million in 2007.According to Broadband Policy 2004, Government of India aims at 9 million broadbandconnections and 18 million internet connections by 2007. The wireless subscriber basehas jumped from 33.69 million in 2004 to 62.57 million in FY2004- 2005. In the last 3years, two out of every three new telephone subscribers were wireless subscribers.Consequently, wireless now accounts for 54.6% of the total telephone subscriber base, ascompared to only 40% in 2003. Wireless subscriber growth is expected to bypass 2.5million new subscribers per month by 2007. The wireless technologies currently in useare Global System for Mobile Communications (GSM) and Code Division MultipleAccess (CDMA). There are primarily 9 GSM and 5 CDMA operators providing mobileservices in 19 telecom circles and 4 metro cities, covering 2000 towns across the country.
History of Cellular Telephony in India:
The technology that gives a person the power to communicate anytime, anywhere - hasspawned an entire industry in mobile telecommunication. Mobile telephones have become an integral part of the growth, success and efficiency of any business / economy.The most prevalent wireless standard in the world today, is GSM. The GSM Association(Global System for Mobile Communications) was instituted in 1987 to promote andexpedite the adoption, development and deployment and evolution of the GSM standardfor digital wireless communications.The GSM Association was formed as a result of a European Community agreement onthe need to adopt common standards suitable for cross border European mobilecommunications. Starting off primarily as a European standard, the Groupe SpecialeMobile as it was then called, soon came to represent the Global System for MobileCommunications as it achieved the status of a world-wide standard. GSM is today, theworld's leading digital standard accounting for 68.5% of the global digital wirelessmarket.
Cellular Industry in India
The Government of India recognizes that the provision of a world-classtelecommunications infrastructure and information is the key to rapid economic andsocial development of the country. It is critical not only for the development of theInformation Technology industry, but also has widespread ramifications on the entireeconomy of the country. It is also anticipated that going forward, a major part of the GDPof the country would be contributed by this sector. Accordingly, it is of vital importanceto the country that there be a comprehensive and forward looking telecommunications policy which creates an enabling framework for development of this industry.
Cellular Market Structure in India
As in other countries, in India, the Cellular Mobile Service Providers (CMSPs) arelicensed to operate in designated geographical operating areas. The service areas includefour metro areas and 18 circles categorized as A, B and C. (The categorization is basedon the revenue Proceedings of the 36th Hawaii International Conference on SystemSciences).
The potential with category C circles in the lower end of the scale. For example themetros account for 40% of the subscriber population, with Category-A, B and Caccounting for 33%, 23% and 4% respectively. The CMSPs had to pay an entry fee andsubsequently annual license fee as a percentage of their revenue to the Department of Telecommunications.The entry and license fees varied according to the service area, highest for metros andlowest for Category-C circles. Some of the CMSPs could not fulfill their licensingobligations and their licenses were revoked leading to a monopoly situation in certainareas. Apart from these charges, each CMSP has to share the revenue with the longdistance operators for carrying inter-service area calls.In profitable metros and circles, the competition is severe and the market is split betweenthe two operators. In a price-cap regulated market, the operators use appropriate pricingstrategy to win customers and win market share.In highly price-elastic markets, such as in India, as the service provider reduces the price,the subscriber base increases considerably, and so is the network traffic. The increasednetwork traffic decreases the performance and the quality of service, inviting customersto switch. Being a new entrant in a metro area, the government operator reduced theairtime charges to such an extent that the subscriber base increased suddenly leading to poor network performance.
The Churn in the Cellular Industry:
As like the other products Cellular industry has not been left untouched from the Churn(switching over). During the survey this fact comes to the fore. According to the cellular operators, there is a normal seven to eight percent churn in the customers, especially in
the pre-paid category. Among the post-paid customers, the Churn is much lower abouttwo-three percent.They say that one significant change that has happened in the last few months, more sosince lowering of the tariffs, is that the bias in favour of incoming calls as far as callcharges are concerned — incoming calls has been set free while they are chargingreasonably only for the outgoing ones — has changed. A tariff re-balancing has definitelytaken place.This means that the cellular operators are encouraging their subscribers to not just receivecalls, but also make calls — increasing the usage of the service. With falling tariffs,cellular operators are convinced that increasing usage is one way to ensure that averagerevenue per user (ARPU) does not fall very low. The industry figure for ARPU is believed to be about Rs.1,100 while it may vary from operator to operator. The operatorsare also concentrating on introducing more value added services to the customers. Value-added services have not really taken off. Only the SMS (short messaging service) hasreally caught on, but operators like Bharti are bringing in services like music messagingand concierge facility for its subscribers.
GSM Subscribers
The cumulative All India GSM subscriber base rose to 72.12 million in April2006 from 69.19 million in March 2006 which is a growth of 4.23% for a month under review [4]. Table I shows the subscribers growth rate for one month along with marketshare of each provider with coverage
CDMA Mobile Subscribers
The total cumulative all India CDMA subscriber base rose by 0.97 million from 23.25million in March 2009 to 24.22 million in April 2009, representing a growth of 4.2% in the month under review. A summary picture of the company wise performance is given in Table II.
Mission:
Vodafone is primarily a user of technology rather than a developer of it, and this fact isreflected in the emphasis of our work program on enabling new applications of mobilecommunications, using new technology for new services, research for improvingoperational efficiency and quality of our networks, and providing technology vision andleadership that can contribute directly to business decisions.
Vision:
Our Vision is to be the world’s mobile communication leader – enriching customers’lives, helping individuals, businesses and Communities be more connected in a mobileworld.
History:
In 1982 Racal Electronics plc's subsidiary Racal Strategic Radio Ltd. won one of two UK cellular telephone network licenses. The network, known as Racal Vodafone was 80%owned by Racal, with Millicom and the Hambros Technology Trust owning 15% and 5%respectively. Vodafone was launched on 1 January 1985. Racal Strategic Radio wasrenamed Racal Telecommunications Group Limited in 1985. On 29 December 1986Racal Electronics bought out the minority shareholders of Vodafone for GB£110 million.In September 1988 the company was again renamed Racal Telecom and on 26 October 1988 Racal Electronics floated 20% of the company. The flotation valued Racal Telecomat GB£1.7 billion On 16 September 1991 Racal Telecom was demerged from RacalElectronics as Vodafone Group.In July 1996 Vodafone acquired the two thirds of Talkland it did not already own for £30.6 million. On 19 November 1996, in a defensive move, Vodafone purchased PeoplesPhone for £77 million, a 181 store chain whose customers were overwhelmingly usingVodafone's network. In a similar move the company acquired the 80% of AstecCommunications that it did not own, a service provider with 21 stores.