Critical Success Factors of Mobile Telephony Companies

exact SUCCESS FACTORS OF THE MOBILE TELEPHONY COMPANIES run IN THE EASTERN voice BY AMARTYA DHAR(08BS0000240) ICFAI BUSINESS SCHOOL 10. 12. 09 censorious SUCCESS FACTORS OF MOBILE TELEPHONY COMPANIES OPERATING IN THE EASTERN REGION SUBMITTED BY AMARTYA DHAR(08BS0000240) SUBMITTED TO PROF BHASKAR BASU 2 ABSTRACT India, the worlds quickest- exploitation vigorous profits market, has added a magnetic disc 16. 02 whiz million million wise radiocommunication reviewers in edge 2009, which be the highest ever additions in a iodine month till now.As the country continues to add approximately 10-11 million vernal connections individu eachy month, the target of 500 million scream lectors by 2010 is evaluate to be met in advance. 3 INTRODUCTION The Indian restless tele cry set industriousness is highly competitive with increasing number of workers the companies ar on the lookout station for computes polariating their table service from the competitors. When a j ob takes a product to market, whether it is a basic product like corn or a highly engineered pressing like the digital camera the caller-out must take hold the product itself compelling (Frances X. Frei HBR April 2008).With price cuts and attractive rental schemes being offered by each and every service supplier the two above mentioned factors argon no longer the factors which crowd out guarantee a large consumer human foot . That is why the industrious phone companies be continuously on the lookout for factors which can give them a competitive edge. This project is an effort to hear out the searing succeeder factors which are necessary for the achievement of a wandering telephony company in the present scenario. The information come been collected through secondary research , primary research with the inspection and repair of questionnaires was in like manner done. CURRENT INDIAN TELECOM SECTOR SCENARIO Indias telecom sector has made rapid progress since the an nouncement of the National telecom Policy 1999 (NTP-1999). Since 2000, the telecom sector has been a notice contributor to the Indian economys impressive performance registering sustained high offshoot consecrates. Predominantly, over the last three stratums, the telecom sector has grown remarkably in the range of 29% 47%. Growth in expeditious phones was the principal driver for telecom evolution in the country as they wee-wee been in other parts of the world.Currently, India continues to be one of the fastest growing telecommunication markets in the world. A progressive regulatory regime, vane expansion by operators, reduction in tariffs and cost of handsets, which essenti all in ally view the service affordable for the common users, all acted as demand sponsor to the growth of the telecom sector. Growth of the Telecom Sector in India category (End March) 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 expeditious Fixed Total Additions (during cal revokear year) 21. 84 (28. 5) 41. 96 (42. 4) 65. 54 (46. 7) 94. 65 (46. 0) 129. 21 (43. 0) 35. 61 56. 5 98. 78 165. 11 261. 09 391. 76 40. 92 41. 42 41. 54 40. 75 39. 42 37. 96 76. 53 98. 37 140. 32 205. 86 300. 51 429. 72 5 The prompt sector has grown from near 10 million lectors in 2002 to around 35. 61million in 2003-04. The year 2004 was a watershed year for the fixed- hound services in India, as mobile subscribers outnumbered fixed phone subscribers. In October 2004, the number of mobile phone users in India has crossed the number of fixed-line subscribers for the first fourth dimension. So the year 2004 can be viewed upon as a landmark year in the history of Indian mobile telephony.Today, the mobile subscribers are not solitary(prenominal) much more than the land-line subscriber in the country, but their number is also increasing at a much faster pace. This was along the judge lines as, for the past few years, mobile phone subscriptions are growing at much faster rate than fixed phone sub scriptions with al some all in the lead operators focusing more on wireless. Consequently, between March 2005 and March 2009, the country has added around 335 million in the altogether wireless subscribers to reach a entire of 391. 76 million however, the fixed line subscriptions rescue declined by 3. 46 million, down to 37. 6 million over the identical degree, partially reflecting the substitution effect. During the year 2008-09 around 0. 13 million aver be on subscribers per month surr interceptered their land-line phone services except in the month of March which witnessed take in additions of0. 23 million rude(a) subscribers. However, the telecom analysts opine that the fixed line telephony segment is definitely poised for growth in the access years as the telephone operators are increasingly focusing on enhancing broadband penetration levels in the country and looking at introducing unseasoned value added services to enhance the experience of customers.BSNL is plannin g to use new technologies much(prenominal) as internet protocol television (IPTV) for tapping the fixed-line market. Tele-density Tele-density (the number of telephone subscribers per 100 people)grew initially slowly from 7. 2 in March2004 to 12. 8 in March 2006, but thereafter galloped to a level of 36. 9 in March 2009 . Notwithstanding such remarkable achievement, it is necessary to note that India yet lags far behind countries like Brazil and China, where the tele-density is over 50. Chinas subscriber base is whopping.According to the Chinas Ministry of Information persistence (MII), by the end of calendar 2007, Chinas gross subscriber base consisting of fixed and mobile users had touched 912 million. Of the gross subscribers base, mobile subscribers have numbered 547 million and 6 fixed-line subscribers about 365 million at the end of declination 2007. However, Indias tele-density is much higher compared to the neighboring countries like Pakistan, Bangladesh and Nepal. The t elecom subscriber base in the fiscal year 2008-09 has reached a new milestone, as more than 129. 1 million telephone subscribers have been added during April 2008 March2009 registering a growth of 43%. As indicated in the Table , the growth of mobile phone subscribers during the fiscal year 2008-09 has been phenomenal at 50%. Total subscribers & Teledensity In India 7 Monthly Growth Rate Of Indias Telephone subscribers 2008-09 The mobile subscriber base in the country is growing at such a fast pace that mobile operators are breaking the record for net additions almost every second month. India, the worlds fastest-growing mobile services market, has added a record 16. 2 million new wireless subscribers in March 2009, which are the highest ever additions in a single month till now. As per telecom analysts, this was the highest growth recorded inwardly a 30-day period in any country. The previous best was 15. 41 million in January 2009. Consequently, the total number of mobile subscr ibers (GSM, CDMA & WLL (F) at the end of March 2009 has touched 391. 76 million as compared to 315. 31 million in September 2008 and 261. 09 million in March 2008. In new-fashioned years, smaller towns have fuelled further growth in mobile telephony .An interesting revelation is that currently, the cellular subscriber base is growing at a faster rate in Circles B and C as compared to Circle A and metropolitan cities. Interestingly, the bulk of the new mobile users are from the rural areas. As the country continues to add about 10-11 million new connections each month, the target of 500 million telephone subscribers by 2010 is expect to be met in advance. 8 RECENT DEVELOPMENTS Acquisitions Sahara India Investment Corporation has acquired 11. 7% stake in Chennai-based telecom company STel Ltd, for an undisclosed amount.STel has attests to operate in several northern and east states. As per telecom analysts the deal can be worth around Rs 250 crore, if STels stake sale in Bahrain Te lecommunications earlier this year is taken as the benchmark. Cell Phone for agricultural Areas A mobile phone that can be charged by a common pencil battery cell entrust be launched by neighboring year. Techtium, the Israeli hybrid battery manufacturer is having discussions with distinct cellular phone manufacturing companies to make and market these low-cost handsets.This technology testament be revolutionary, especially for rural areas in countries where availability of power is a major problem. The company has already launched a mobile phone in collaboration with Philips, which not only runs on the lithium battery, but also uses a single AAA battery as aback-up option. Investments Telecom player Aircel Ltd get out be investing Rs 1,000 crore in Andhra Pradesh (AP) by 9 declination 2009, as part of its $5 billion pan-India expansion plan stagger over the next 3 to 5 years. The amount will be used to build base stations, install switches, create a data centre and enhance retail presence in AP.New Ventures Indias fifth largest telecom service provider, Aircel has launched its GSM mobile services in Indias financial capital, Mumbai, Maharashtra. The company is the s howeverth service provider in Mumbais saturated market and has to compete with six well set up telecomcompanies Airtel, MTNL, Vodafone Essar, Idea, Reliance, Tata Teleservices and grummet Mobile. Aircel has around 1,000 cell sites in Mumbai and will be increasing it to around 2,000 sites by the year-end. The company has presence in 17 circles among 22 circles in the country. Maxis Communications (Malaysia) holds a majority stake of 74% in Aircel.The company commenced operations in 1999 and became the leading mobile operator in Tamil Nadu within 18 months. Aircel began its outward expansion in 2005 and met with unprecedented succeeder in the Eastern frontier circles. Tata Communications (formerly VSNL) an Rs 800 crore data and communications service provider company, has announced its p articipation in the $600 million new westward AfricanCable System (WACS). The consortium includes Angola Telecom, Broadband Infraco, Cable &Wireless, MTN, Telecom Nambia, Portugal Telecom, Sotelco, Telkom SA, Togo Telecom and Vodacom.The operators have recently signed a construction and maintenance agreement and run contract for the implementation of the WACS. ZTE Chinese telecom equipment provider, which has provided infrastructure to Indian telecom companies like Reliance Communication, Tata Teleservices, Aircel and Loop Telecom, has found a novel substance to expand profession in India. Recently, ZTE has tied up with China discipline Bank for financing mobile operators in India for upgradation of the telecom infrastructure.The new dodge adopted by ZTE is not only to compete with following, well established players like Ericsson, Nokia-Siemens, but also to adjoin its market share in Indias fastest growing telecom sector. 10 With 35. 53 cardinal net additions during the Qua rter, Total Wireless (GSM + CDMA) subscriber base increased to 427. 28 Million at the end of June-09, and wireless Tele-density reached 36. 64. 4. Wireline subscriber base declined to 37. 54 Million at the end ofJune-09, taking the wireline teledensity to 3. 22. 5. Internet subscribers increased to 14. 5 million at the end of June2009 registering a quarterly growth rate of 3. 80%. However, this growth rate is lower than the growth rate seen in the previous quarter (5. 3%). 6. Share of Broadband subscription in total Internet subscription increased from 46% in Mar-09 to 47% in June-09. 86. 66% of the Broadband subscribers are using Digital Subscriber Line (DSL) technology. 7. come tax revenue Per User (ARPU) for GSM- honorable Mobility service declined by 10% from Rs. 205 in QE Mar-09 to Rs. 185 in QE Jun-09. 11 8. ARPU for CDMA Full mobility service declined by 7. 2% from Rs. 99 in QE Mar-09 to Rs. 2 in QE June-09 9. ARPU for dialup Internet usage increased by 2. 97% from Rs. 236 . 47 in QE March 2009 to Rs 243. 50 for the quarter endingJune 2009 10. MOU per subscriber for GSM Full mobility service continued to show a declining trend. It declined by 6. 19% from 484 in QE Mar-09 to 454 in QE Jun-09. The outgoing MOUs declined by 5. 30% and incoming by 7. 04%. 11. MOU per subscriber for CDMA-full mobility service declined by 4% from 357 (Q. E March 2009) to 342 (Q. E June 2009). The shell MOUs declined by 2. 7% and Incoming MOUs declined by 5. 2%. 12. Gross Revenue (GR) nd Adjusted Gross Revenue (AGR) of Telecom Sector for the QE June-09 has been Rs 39,108. 33 Crore and Rs. 29,732. 52 Crore respectively. There has been a reduction of 3. 3% in GR as compared to previous quarter. AGR has shown slight increase of 0. 02% vis-a-vis previous quarter. 13. Average licence fee as percentage of AGR is 8. 43% in June-09 as against 8. 4% in previous quarter. 14. The wireline Service Providers met the QoS parameters of Customer Care Service (Closures)and retort time to the customer for assistance %age of calls answered (electronically)within 20 sec 15.The performance of wireline servce providers modify as compared to the previous quarter, in respect of parameters Provision of Telephones, Faults repaired by next working day,Mean Time to Repair, Call Completion Rate, Customer Care go (Shifts and Additional Facilities) and Time taken for refund of deposits 16. The wireline service performance has deteriorated in this quarter, as compared to the previous quarter, in respect of Faults incidences, Metering & billing credibility, Response time to the customer for assistance %age of calls answered (electronically) within 40 sec & %age of calls answered by operator (voice to voice). 2 Market Share Rural & urban 25. 225. 6% 74. 4% 13 Service Area wise entrance (Wireless +Wireline) Subscribers 14 Subscribers (Rural & Urban) & Market share 15 List of Cellular Mobile (GSM & CDMA) Service Providers currently providing service As on 30th June 2009 The operat ors currently operating(a) in Kolkata are Airtel,Vodafone ,Tata Teleservices,Idea, Reliance telecom, Aircel separate, BSNL etc. Bharti is the leading service provider in this region . 16 circumstantial SUCCESS FACTOR critical Success Factors (CSFs) are the critical factors or activities required for ensuring the success your business. The limit was initially used in the world of data analysis, and business analysis. precise Success Factors have been used significantly to present or bring out a few key factors that organizations should focus on to be successful. critical success factors refer to the limited number of areas in which satisfactory results will ensure successful competitive performance for the individual, department, or organization.Identifying CSFs is crucial as it allows self-coloureds to focus their efforts on building their capabilities to determine the CSFs, or even allow firms to decide if they have the capability to build the requirements necessary to meet sarcastic Success Factors (CSFs). Types of Critical Success Factor There are four basic types of CSFs They are 1. Industry CSFs resulting from specific industry characteristics 2. scheme CSFs resulting from the chosen competitive strategy of the business 3. Environmental CSFs resulting from economic or technological changes and 4. impermanent CSFs resulting from inborn organizational needs and changes.Five key sources of Critical Success Factors MAIN ASPECTS OF Critical Success Factors and their use in analysis CSFs are tailored to a firms or managers particular smudge as different 17 situations (e. g. industry, division, individual) lead to different critical success factors. Rockart and Bullen presented five key sources of CSFs 1. 2. 3. 4. 5. The industry, Competitive strategy and industry localization, Environmental factors, Temporal factors, and Managerial position (if considered from an individuals calculate of view). Each of these factors is explained in greater item below. The Industry Critical success factorIndustry There are some CSFs common to all companies operating within the same industry. unlike industries will have unique, industryspecific CSFs An industrys set of characteristics define its own CSFs Different industries will thus have different CSFs, for example research into the CSFs for the Call centre, manufacturing, retail, business services, health care and education sectors showed each to be different after starting with a hypothesis of all sectors having their CSFs as market orientation, development orientation, entrepreneurial management style and organizational flexibility.In reality each organization has its own unique goals so while these may be some industry standard not all firms in one industry will have identical CSFs. Some trade associations offer benchmarking across possible common CSFs. Competitive strategy and Competitive position or strategy The nature of position in the marketplace or the adopted 18 industry posit ion Critical success factor strategy to gain market share gives rise to CSFs Differing strategies and positions have different CSFs Not all firms in an industry will have the same CSFs in a particular industry.A firms current position in the industry (where it is relative to other competitors in the industry and also the market leader), its strategy, and its resources and capabilities will define its CSFs The values of an organization, its target market etc will all impact the CSFs that are appropriate for it at a given point in time. Environmental Factors Critical success factor Environmental changes Economic, regulatory, political, and demographic changes create CSFs for an organization. These relate to environmental actors that are not in the subdue of the organization but which an organization must consider in developing CSFs Examples for these are the industry regulation, political development and economic performance of a country, and population trends. An example of environ mental factors affecting an organization could be a de-merger. Temporal Factors Temporal factors These relate to short-term situations, often crises. These CSFs may be important, but are usually short-lived. Temporal factors are temporary or one-off CSFs resulting from a specific event necessitating their inclusion.Theoretically these would include a firm which lost executives as a result of a plane come down requiring a critical success factor of rebuilding the executive Critical success factor Critical success factor Critical success factor 19 group. Practically, with the evolution and integration of markets globally, one could entreat that temporal factors are not temporal anymore as they could exist regularly in organizations. For example, a firm aggressively building its business internationally would have a need for a core group of executives in its new markets.Thus, it would have the CSF of building the executive group in a specific market and it could have this every year for different markets. Managerial Position Critical success factor Critical success factor Managerial role An individual role may experience CSFs as performance in a specific managers area of righteousness may be deemed critical to the success of an organization. Managerial position. This is important if CSFs are considered from an individuals point of view.For example, manufacturing managers who would typically have the following CSFs product quality, inventory subordination and cash control. In organizations with departments focused on customer relationships, a CSF for managers in these departments may be customer relationship management. INFORMATION FOR WRITING CRITICAL SUCCESS FACTORS (CSFs) For the organization following the CSF method, the foundation for writing good CSFs is a good understanding of the environment, the industry and the organization In order to do so, this requires the use of information that is readily available in the public domain.Externally, industry inf ormation can be sourced from industry associations, news articles, trade associations, prospectuses of competitors, and uprightness/analyst reports to name some sources. These would all be helpful in building knowledge of the 20 environment, the industry and competitors. Internally, there should be plenteous sources available to management from which to build on their knowledge of the organization.In most cases, these wont even have to be anything published as managers are judge to have a good understanding of their organization Together, the external and internal information already provides the basis from which discussion on CSFs could begin. USING CRITICAL SUCCESS FACTORS FOR STRATEGIC AND BUSINESS PLANNING I have considered t following factors to be the critical success factors for the mobile service providers of the eastern region. 1) CONCEIVE AND DESIGN a)GSM b)CDMA 21 c)3G 2) HUMAN RESOURCE 3) MARKET a) announce b) Sales offers c) Network Coverage. ) Customer Service e) V alue Added Service. 4) MANAGEMENT a) Planning. b) organizational Structure. 5) FINANCE a) Budget System. 22 FINDINGS The cellular subscriber base is growing at a faster rate in West Bengal, Bihar, Kerala,Himachal Pradesh, Punjab as compared to Maharashtra, Tamilnadu, Andra Pradesh and metropolitan cities. The number of subscribers for the urban sector is more for every service provider in comparison with the rural sector, the monthly addition of new subscribers for the urban sector is also more than the rural sector . The period april 2008-march2009 has saw a phenomenonal addition of 129. 1 million telephone subscribers, an increase of 43%. Total wireless (GSM + CDMA) subscriber base increased from 391. 76 million in march -09 to 427. 29 million at the end of june-09, showing a growth of 9. 07%. Airtel and Vodafone was found out to be leading service providers of Kolkata. 23 REFERENCES 1)www. trai. gov. in 2)Harvard railway line Review (Article by Frances X. FreiApril 2008) 3)Harv ard Business Review(Article by Christopher W. HartMarch 2007) 4)www. hindu. com 5)Competitive strategy by Michael E. Porter 6)Competitive wages by Michael E. Porter 24