shyam krishnan

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West Bengal University of Technology

Summer Project Report

Market Potential for Data Products in Bangalore

At

Aircel Cellular Limited

By

Shyam Krishnan

WBUT Regn No: 101360710098 of 2010- 2012

WBUT Roll No: 13600910102

Army Institute of Management,

Kolkata


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GUIDANCE-cum-COMPLETION CERTIFICATE

This is to certify that Mr. Shyam Krishnan, WBUT Regn. No101360710098 of 2007- 2009 , WBUT Roll No. 13600910102 , hasundertaken the project titled Market Potential for Data Productsin Bangalore under our guidance from 15 th July2011 to 25 th July

2011 at Aircel Cellular Limited and has completed the said projectsuccessfully.

(Vineeth R)

External Guides Full Signature

Channel Head -South

Aircel Cellular Limited

(Mr. Protik Basu)

Internal Guides Full Signature

Army Institute of Management,

Kolkata

Organization Seal


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Executive Summary

In modern age Internet, connection is taken as the scale of development of any economy. Itcontributes 2.5 % to the GDP growth of any country. IT implementation in corporate has createda huge demand for data product. The Internet service providers are providing innovative productfor better productivity. Aircel group, Indias seventh largest GSM mobile service provider witha subscriber base of over 51.83 million provides data connectivity service through various modesof connection like DSL, Leased Line and Radio Frequency to the corporate.

The project entitled A Study on the Market Potential of Aircels Corporate Data Connectivityand Internet Services in Bangalore, is a detailed study on data product market in corporatesector in Bangalore. Due to the huge IT market in Bangalore area, there is a huge demand for thedata products , thus creating a very lucrative market for ISPs. The main objective of the project isto find out the market potential of Airtel and various shortcoming of Internet Service Provider(ISP) providing service in Bangalore. At first, an extensive literature survey was done about the

product and market. Then a list of large, small, and medium scale industries is prepared from

various sources. Then a specified group of industries was chosen representing each segment whowere later contacted to know their preference for the internet service providers. After futurerecollection of data the sample size was further reduced to 150 for simplification of datainterpretation. Analysis was predominantly based on brand preference, price factor and service

provided by the existing ISPs to the corporate customers of Bangalore. The collected data isanalyzed by applying tools like MS Excel and SPSS. Though it was seen that Airtel is the marketleader in the SME sector, Aircel has a huge potential for growth. The main hurdle in Aircel is thelack of brand knowledge in the market about the various business solutions that are provided byAircel. Aircel should concentrate on generating more brand awareness in the market along withmaintaining its USPs like best technology at the best available price.


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THE COMPANY


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Aircel Group

Aircel Group is a telecommunication service provider in India. The company is engaged inmobile services and enterprise services. Aircel Group was founded by Mr. C.Sivashankaran in1994 and started functioning from 1999. The headquarters of Aircel Group is located in Chennai.Currently, Aircel is a joint venture between Maxis Communications of Malaysia and the Reddyfamily of Chennai. Maxis have a 74% stake in Aircel and the remaining 26% is with SindyaSecurities & Investments Private Limited (Sindya Securities & Investments Private Limited is

promoted by P. Dwarakanath Reddy and Suneeta Reddy (daughter of ApolloHospitals Chairman Prathap C. Reddy).

Aircel has a subscriber base of over 46.52 million, as of September 2010. It has a market share of

6.76% among the GSM operators in the country. As on date, Aircel is present in all 23 telecomcircles (including Andhra Pradesh, Assam, Bihar & Jharkhand, Chennai, Delhi & NCR, Gujarat,Haryana, Himachal Pradesh, Jammu & Kashmir, Karnataka, Kerala, Kolkata, Madhya Pradesh,Mumbai, North East, Orissa, Punjab, Rajasthan, Rest of Maharashtra & Goa, Rest of Tamil

Nadu, Rest of West Bengal, Uttar Pradesh East, Uttar Pradesh West) as per the company plans to become a pan-India operator by 2010. Aircel is the market leader in mobile services in Tamil Nadu.

The table below shows the amount of subscribers for the top seven providers in India.

Operators Market share Subscriber Base

Airtel Bharti 20.84% 143.29

Reliance 17.06% 117.34

Vodafone 16.80% 115.55

TATA 11.50% 79.07

BSNL 11.39% 78.32

Aircel 6.76% 46.52

Unitech 1.64% 11.27


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Additionally, Aircel has also obtained permission from Department of Telecommunications(DoT) to provide International Long Distance (ILD) and National Long Distance (NLD)telephony services. These services are provided to the enterprise customers through thesubsidiary Aircel Business Solutions.

Mission Statement:

We are conditionally committed to exceeding our customers expectations. We will providenetwork and services that are innovative and reliable, allowing our customers any time anywherecommunications. We will attract, develop, and retain an exceptional team of people. We are

committed to enhancing the quality of real life in the community in which we operate. We willmeet the financial expectation of our shareholders.

Goals and Values

Customers:

Our customers are our most valued assets. We will strive to exceed their expectations at all time by providing them with superior services that embody value, innovation, quality, and care.

People:

Our people are our greatest resources. We will attract, train, and retain the best. We willchallenge them to develop their full potential in the context of our company goals.

Integrity:

We will maintain and strive for the highest levels of personal and professional integrity andhonesty in all ours dealings. We will keep our promises.

Respect:

We will treat with respect & dignity all people we deal with.


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Excellence:

We are committed to excellence in all what we do. There will be no place for mediocrity.

Work:We will promote a work environment that embraces creativity, promotes empowerment, andencourages teamwork, innovation, prudent risk taking, honest and open communication, andrespectful iconoclasm

Quality :

The hallmark of our internal and external outputs and processes will be quality. This will pervadeevery aspect of our functioning.

Achievements

The major achievementsof Aircel are:

Ranked 6 th largest GSM mobile provider in India, within a span of 11 years.

1st company to introduce Wimax technology in India.

Aircel was honored at the World Brand Congress 2009 with three awards: Brand Leadership in Telecom Marketing Campaign Marketing Professional of the Year.

Aircel was honored by CMAI INFOCOM National Telecom Award , 2009 for, Excellence in Marketing of New Telecom Service .

Aircel was voted as the 3 rd Most Admired Mobile Service brand in a pan-india survey in2008.(Drizzlin Media)

Aircel had been selected as the best regional operator in ,2008 by Tele.net Publication .


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the country, based on the number of customers. This segments constitutes the largest portion of the companys business, both in terms of total revenues and total customer.

2. Aircel Business Solutions : This is the sub part of Aircel CellularLimited which executes the ILD, NLD,WIMAX operations for AircelCellular. This arm provides secure, scalable, seamless , reliable and customisedintegrated solutions of data communications to corporate, small and medium scaleenterprises, thus offering total telecom solutions through a single window.

3. Dishnet Wireless Limited : This arm provides broadband services which also usesWIMAX technology in the difffrent circles .

Product Profile

Many broadband technologies such as Cable modem, DSL, Leased lines etc have evolved and being used by existing subscriber as connection as a medium for communication. Provision of broadband usinf DSl technology is a predominant in India as the connection to the subscribers premises cab ve easily provided using the existing copper wire connected to subscribers premises. It shows that 86% of total broadband connections are using DSL connection. Figure below shows the technology wise broadband connection in India.

Given below is the market share for various Data Subscribers as on 31 st 2010:-


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The high bandwidth connection is very low as compared to the expansion of corporate in India.In among the various types of connection for higher bandwidth , Leased Line is the best solution.The corporates use these. Most of the low and medium enterprises prefer other means ofcommunication like DSL, Cable Modem, Wireless, etc.

Aircel Business Solution

Aircel Business Solutions (ABS), a Strategic Business Unit of Aircel, isv headquartered in NewDelhi, India and is part of Maxis Communication Berhad. Addressing the SME and enterprisemarkets, ABS has successfully deployed Fiber and WiMAX networks and offers Internet, MPLSVPN, NPLC, VoIP and a host of services in 36 of Indias top business cities. ABS has securedlicensed spectrum in the 2.6, 3.3 and 5.7 GHz frequency bands in 44 cities across the country.

Premium Internet Services

Aircel Business Solutions offers high performance internet bandwidth services for itscustomers which could be offered over any kind of last mile. In order to meet customerexpectations of uptimes and redundancies, Aircel ensures high speed and a redundant

backbone. Moreover, with monitoring tools to check, measure and monitor the backbone,Aircel allows its customers to buy the bandwidths as per expectation and deploys the last

mile connectivity over Wimax, Fiber or P2P radio.

Aircel Business Solutions currently offers the following services to its enterprise Customers.

Premium Internet bandwidth (1:1) Shared Internet Bandwidth (1:2 and 1:4) Preferred Route Internet Data Center Internet

National Private Leased Circuit Services

NPLC stands as an acronym for National Private Leased Circuit which essentially means aPoint to Point private leased circuit over the domestic infrastructure of Aircel. NPLC Circuitoffers highly available, reliable and secure connectivity to enterprises with largecommunication requirements. NPLC Circuits are delivered to customers on the Aircelsseamless NLD network having pan India coverage. Aircels NPLC network is deployedusing state of the art Dense Wavelength Division Multiplexing (DWDM) Technology.


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MPLS Service

Business applications form the most critical element of any enterprise as their performance is

directly related to the business revenues. Network is a core enabler and an Enterprise looksfor a high performance network that enables them to launch, roll and implement businessapplications at a speedy rate and with the desired treatment required for respectiveapplication. Aircels MPLS service guarantees the application performance on its carriergrade core network.

Aircel offers MPLS Connectivity in 3 flavors.

Layer 3 MPLS VPN

Aircel delivers MPLS (multi protocol label switching) VPN (virtual private network) Network that offers Triple play services for organizations seeking a flexible, high performance, private VPN network. Built on carrier-grade platforms, Aircel MPLS coreoffers foolproof security, superior traffic delivery, ease of manageability with highavailability

Layer 2 MPLS VPN

Aircel offer Layer 2 connectivity to customers with traditional offerings such as ATM, FrameRelay, and serial/Point-to-Point Protocol (PPP) services. Aircel delivers Layer 2 services onits core MPLS backbone network using Any Transport over MPLS thereby keeping theinvestments made by an enterprise intact and seamlessly supporting Layer 2 protocols on itsMPLS core. Aircel MPLS core offers foolproof security, superior traffic delivery, ease ofmanageability and high availability.

Multicast VPN

Aircels IP multicast VPN solution is designed on its meshed MPLS network backbone that provides high performance to the customer applications. With Aircel Multicast VPN service,the transmission of applications such as business conferencing, distance learning, corporatecommunications and the distribution of software or news is both easier and more efficient.


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THE PROJECT


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Purpose and Scope of the study

According to Vaishnavi and Kuechler (2005) research is "an activity that contributes to theunderstanding of a phenomenon." They further explain phenomenon as "a set of behaviors ofsome entity (ies) that is found interesting by the researcher or by a group". Understandingaccording to them is "knowledge that allows prediction of the behaviour of some aspect of the

phenomenon."

According to Saunders, Lewis and Thornhill (2003) research is finding something in anorganized way to enhance knowledge in any given subject. According to Sekaran (2000) it is:An organized, systematic, data based critical, objective, scientific inquiry or investigation into aspecific problem undertaken with the purpose of finding answers or solutions to it.

According to Saunders, Lewis and Thornhill (2003) the 3 key aspects of research comprise of - primary research in which information is gathered particularly for the study that is beingconsidered; secondary research or desk research where the information is easily available withthe organisation or some previous study has been conducted around the research topic; andtertiary research- here the secondary research that has been conducted by some other researcheris used to derive the conclusion.

To adopt a reasearch method one has to identify what is to be studied and what are the attributesof the topic being studied. The main purpose of the project is find the market potential forcorporate data connection in a particular location.For this study we selected Banglore as it is thehub of the IT revolution of India and would truly reflect the market outlook and potential forcorporate data connection.. The company being analyzed is Aircel on the basis of its strategiesused to identify different market segments and position its products.

As the main objective of the study is qualitative, it is clear that the purpose of the study is clearlyknow; hence we would be using a Descriptive Research Design.

Descriptive research, describes data and characteristcs about the population or phenomenon being studied. Descriptive research answers the question who, what, where, when and how.


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Philip Kotler states the objective of descriptive research is to describe things, such as themarket potential for a product or the demographics and attitudes of the cinsumer who buy the

product.( Kotler et al, 2006, p.122). In order to understand the very purpose of the study theobjectives of the study are as given below.

Objectives of the Study:

The scope of the study can be divided into 2 i.e, the primary objective and the secondaryobjectives. The primary objectives specify the core benefit that is belived to be achieved from thestudy and the secondary objective the subsidary benefits. Given below are the objectives that areto fullfilled by the study:

Primary Objectives

To identify the market potential of Aircel in the corporate data connectivity products andthe internet services market in Banglore.

Secondary Objectives

To identify the present market share of various ISP in the market.

To identify the level of satisfaction of the customers towards the various ISPs.

To compare and analyze the various data services provided by the various ISPs.

The competitor analysis of the ISP in the market.

Analysis on the problem faced by the customers on the services provided by the variousISPs.

A brief analysis on the strength and weaknesses of the various ISP in the market.


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Research Methodology

Sources of Data Collection

Sources of data collection refer ti the carious sources through which the required data for the purpose of study was collected. These sources can be either direct or otherwise primary sourcesand indirect sources or secondary sources. The main sources of data collection for this study are:

Primary Sources

A questoinnair was prepared to match the requirements of the study. This wa used for thecollection of data from various respondents. The various methods that were used for thecollection of data were:

1. Direct Interview Method:

The IT /Computer /Network in-charges of the various corporate were met personally with prior appointment and were interviewed personally.

2. Tele-calling Method:

The respondents from corporate in were telephoned in to collect the necessary datarequired for the study.

3. Direct Email Method:

The questionnairs were emailed to the respondents and their replies were used.

Secondary Sources

1. Annual reports, newsletters etc of the various ISPs.


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2. Annual reports, newletters, reports, etc of various telecom regulatory and statutaryauthorities and other government establishments such as TRAI, DOT, etc.

3. Various journals, magazines and reports published by the state government of Karnataka.

4. Reprots and publications of the various associations connected with business andindustry.

5. The data sheet collected from the various channel partners of Aircel.

6. The syudy reports of various market research firms.

7. Various other news and media sources.

Sampling Design

Sampling design deals with the design or the framework that is adopted for the purpose ofsampling and data collection. This includes the defining of the population, sampling size of thestudy, sampling technique adopted for the purpose of sampling, etc. A brief description of thesampling design is provided below:

Population

The population is the small and the medium business and enterorises that are operating in theBanglore area with an internet connection. There are appooximately around 1000 suchcompanies in from which the sample was selected.

Sampling Frame

The sampling frane are the corporate directories and various yellow pages such as Just Dial.com,Askliala.com, Click India and other yellow pages.


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Sampling Technique

The sampling technique means the methodology adopted by the researcher in order to identifythe elements or the sample that is required from the population. For this study a simple randomsampling without replacement is used as the sampling technique, which means that every itemhas an equal chance of being included from the sample frame and since it is a sampling withoutreplacement an item is selected once and only once from the frame.

Sample Size

The sample size that was selected was 250 and N value for the simple random sample was 200.

Statistical Tool Used

The data was entered,analysed and processed systematically according to statistical tool calledMicrosoft Excel which was used for easy calculation and tabulation.


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DATA COLLECTION& ANALYSIS


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Data Collection

Current Scenario in Internet Market in Karnataka

India is ranked 74 th globally for high broadband adoption, with speeds of 5 Mbps and Ranked100 th globally for broadband adoption, speed over 2Mbps.

India ranked 114 th for average connection speed, at 849 Kbps.

India ranked 8th

, with 3.3 observed attack trafic.

India ranked 20 th globally for number of unique IP addressed seen by Akamai, with over3 million IPs.

SL.No State/Telecom Circle

Broadband subscribers (As on30.01.2011)

1 Maharashtra (including Mumbai, Goa) 2937434

2 Delhi* 1555040

3 Tamilnadu (including Chennai) 1482335

4 Karnataka 1130385

5 Kerala 1059800

6 Andhra Pradesh 1025703

7 Gujarat 787710

8 Uttar Pradesh (including Uttarakhand) 568936

9 Rajasthan 512549

10 West Bengal (including Kolkata) 504255

11 Madhya Pradesh (includingChhattisgarh) 418091

12 Punjab 305230

13 Haryana 235201

14 Orissa 172405


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15 Bihar (including Jharkhand) 146148

16 Assam 67098

17 Himachal Pradesh 57422

18 Jammu & Kashmir 46650

19 North East** 37605

20 Andaman & Nicobar 5045

TOTAL 10737850

Source Akamai Publishes, Stat of internet report Mar2011.

Karnataka for the first time has completed 1,000,000 in the the year 2010 for the number of

subcribers. This is majorily because of the inceased IT presence and the favourable conditions prevailing in the state for the IT industry. Banglore has always been know for the IT industry andhence it is quite immenient that the major share of the internet connection in Karnataka was

present in Banglore. Also we can see that the number of the high speed internet users ismaximum in Karnataka. This augers well for the fact that the IT hub of India is Karnataka andthat too Banglore to be specific.

Aircel is the sixth major player to enter the Banglore industry for corporate data connections.Hence the infrastructure is not as omipresent as Airtel, Reliance or Tata.

Number of subscribers according to Bandwidth of Inetrnet Usage in Karnataka

Speed No of Subscribers Total Subscribers

2 MBPS 41361 3.66%

Total 1130385 100.00%


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It has also been found that the average hours spend and average usage per week of internet has been on an increasing trend which would also show that the industry is on a growth mode. Theaverage weekly hours speed on internet has increased from 9.3 hrs in 2008 to 20% in 2010 whichis more than a steep rise of 100%. This shows a vast untapped market which is open for theinternet market in India.

SWOT Analysis of Banglore Market

Strengths

Banglore is the IT hub of India.

Have a high industry base.

High Tele-Density area.

Close to Chennai and Cochin which are theinternational gateway for India.

Large multinational companies are either

present or are coming to Banglore.

Weaknesses

High cost of infrastructure.

Most of the companies are satisfied with theDSL connection.

Oppurtunity

Introduction of the right based on broadbandconnection.

Improvement of government policies regardingISP.

Reduction in tariff as competion increase tocreate product diffrenciation on price.

Threats

Banglore market is heavily dependent on theIT market. Hence global recession hits theBanglore the hardest.

Nearby location like Chennai, Hyderabad andCochin are poaching and eating up shares ofthe IT industry.


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Micheal Porters FIVE FORCE Analysis of the Aircel Market in Banglore

Micheael porters Five Force analyses the 5 main factors that govern the competition in anymarket. Here the analysis of the data connectivity market with the help of Five Force is done soas to analyze the competion that is heppening in the market. The main factors are :

Threat of New Entry

New entrants to an industry bring new capacity and a desire to gain market share that puts

pressure on prices, costs and the rate of investment necessary to compete. In case of dataconnectivity market of Banglore the new entry threats are:

1. Government Policies

The policies that are adopted by the government and other independenrt bodies rgargovern rge data connectivity division are very improtant part of the analysis. The policiesthat are adopted in the field of new entry are to an extent liberal from the authorities.Licenses are granted to 6 new players like Unitech and Sistema. Sistema has alreadylaunched its operations under MTS which are into wireless data connectivity and is quiteemminent that they will soon enter the data connectivity market.

2. Capital Requirement

Though the initial investment requirement for entering the business is huge, thecompanies have a good chance of recovering the cost within a few years, as the return ofinvestment is very good in the industry.

3. Technology

Technology is always a threat to data connectivity business. Because of the constantevolution of technology every new company that enters the industry brings with it thelatest technology. Also most of the international players who are entering the industry are


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bringing with them technology that are currently higher than that which is present in themarket. Like for example MTS introduced high end bandwidth for affordable prices

bundled with wireless connectivity. This has lead to the decrease in usage of wiredconnection in homes and movement of these into the MTS market share.

4. Distribution Channel

Small firms called channel partners are the channel that are used by the ISPs to sell thereconnections in the SME market. These firms have bundled packages with majorcompanies like computers from HP, internet connection from Aircel, etc. Most SMEshave contracts with these firms as it is easier to deal with smaller firms than mmajorcompanies. These firms are not regulated by my restrictions are hence they change

partners very frequently leading to the destruction of the distribution channel.

Hence we can conclude that even though the chances of new entry into the market is averageright now, we will see the market opening up more and more within the next few years. Thismeans that all the exisiting players in the market have to be very careful as all these new playerswould bring with them standards that are beyond the market level present at that time.

Bargaining Power of the Customer

Powerful customers can capture more business by forcing down prices, demand for better qualityor serviceand generally by plaing industry participant against one another, all at the expense ofindustry profitiablity. In Banglore the bigger customer are from the IT industry and theEducational industry and they can force the ISPs to reduce the prices.

1.

Diffrenciation among the ISPs

There is not much to differenciate among the ISPs so far as the product is concerened.They all provide the same product, i.e the inetrent space to communicate. The majordiffrenciation happens in the price and bandwidth segment.Here also the customers have


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a wide variety of choice. The existing players are trying very hard to lessen thediffrenciation and this has lead to very low diffrenciation among the ISPs, except in somecases.

2. Switching Cost

The switching cost is very high incase of Leased line , but with the entry of new playerslike Reliance who are ready to waive of the initial costs to gain customers has lead to thereduction of the switching cost and hence stability of customer base for a single ISP.

3. Increasing number of ISPs

As the ISPs in the market are increasing leading to various choices for the customers.Thus the customers have a wide choice from which he can choose depening upon the bestoption avaliable.

Hence we can conclude rgar rgere exists high customer bargaining power. So the ISPs must bevery careful in the customer satisfaction metrics. As a slight dissatisfaction on the part of thecsutomer can lead to the loss of a customer to another player.

Rivalry among the existing players

Rivalries among the companies take many forms like price discounting, advertisements, service

improvement and new product introduction. When an analysis of the data market in Banglorewas done, the image which came up was quite similar.


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1. Number of ISPs

The number of ISPs is an imporatnt determinant of the level of rivalry that exists in themarket. Right now there are 16 ISPs that are present in the market which has lead to ahigh level of competition.

2. Price Factor

The price plays an impprtant role in the rivalry as it is one of the few product

diffrenciators that are avaliable to the ISP. A good pricng policy is mandatory for the ISPas that will make sure that the company makes a profit and survives on the long run.

3. Exit Barriers

The exit barriers in the country as well as the state has been simplified so that no ISP hasto endure a loss and continue in the market. This means that the exit barriers arefavourable for decreasing the effect of the weak player affecting the scenario and thusincreasing the rivalry.

Hence the rivalry among the competitors is high but is not steep as the weker ones are alwaysexting the market. But the level of competitionis maintained by the companies to gain moremarket share and hence increase the profit margin.

Bargaining Power of the Supliers

The bargaining power of the suppliers is very low in the industry as there are many suppliers fora single service. There is not much of a product diffrence and hence this factor has a minimalaffect on the market scenario.


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Threat of Substitutes

There are no substitutes in the market for data connectivity. This is one market which cannottake in substitutes. Hence the question of threat of substitutes are nill in the market

Summary of the Micheal Porters Five Force Analysis

Forces Analysis Remarks

Threat of New EntryMedium[ High in the

next 2 years]Present ISP must prepare

themselves.

Bargaining Power of theCustomer

HighCustomer satisfaction is the

key.

Rivalry among the existing players

High Attain more customers.

Bargaining Power of theSupliers

Low Supplier side is always safe.

Threat of Substitutes Nil Nil


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Primary Data Analysis and Interpretations

Primary data analysis and interpretations are done so that useful information can be derived fromthe data collected. Here the researcher performs the necessary analysis to satisfy the objectivesset for the research.

Details of the Data Analysed

The following is the summary of the data collected.

Number of Samples: 200

Even though there are only 200 data samples some data have backup connection also whichresults in dual connection and hence needs to be entered again. Hence we have calculated eachconnection irrespective whether backup or primary as a fresh entry.

Company Total Connections Total

Companies with only Primary Connection 112 112

Companies with Backup Connection 88 176

Total 200 288

Hence there would be 288 connection on which the analysis would be done to judge thesituation.


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Airtel, Tata teleservices and Reliance Communictions are the major share holders in the industryand these are the competitors whose market share has to be grabbed by Aircel. Also we do havefringe players like Hathway whose share can be captured if some innovative methods are used.


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29 | P

ous producor each of then Relianc

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30 | P a g e

with experiments. It has also been seen that unlike the existing players some of the new playersare ready to wave of the installation charges which is quite a huge amount. This helps the clientsto swithc ISPs without much hassel.

In case of broadband DSL lines, Airtel is the major player which occupied 64% of the marketshare. This is followed by BSNL,Reliance and TATA. This market leadership of Airtel in

broadband is basically because of the brand name created in this format of business. It constantlyrenews its offers and brings in new offers to keep the customer intrested.

BSNL and TATA Telecommunications are also coming up with new and improved servicemeasures from their part which is why these players also have a decent share. Reliance is another

player which has grown exponentially in a matter of few years. Reliances exponential growth isdue to the cheap and versatile offers that they provide. Also Reliance Infocomm has started towaive of the primary installation charges which has in a way acquired a lot of custoners.

DSL/Broadband occupies 80% of the market share in India but in Banglore market this reducessignificantly when we consider the corporate market. This is because DSL connection is a goodand cheap form of connection but it is very unrelaible conmapred to ILL. Hence most majorcorporates prefer ILL. Also with the reducation in prices of ILL, most SMEs can also afford ILL.


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ISP M

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irtel and Tashows thatally prefer all the ots backup co

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31 | P

the marketrefer Airteary and b

ons sharesircel being

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shareand

ckuphavenew


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32 | P a g e

entrant this shows that is trying to cover up the lost ground by actually entering the backupmarket which will give it brand name and a significant market share also. It is hence clear thatAirtel is market leader in the Banglore Market and is the preffered choice and is also thetrendsetter for all the other ISPs.


36/56

ISP M

Tha abo primaryAirtel ishave moconnecti

rket Sha

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e figure shonnectionsthe most pre than onen. So this

e for Bac

ISPsAircelAirtel

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eliance

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ws the mar ch as back

effered ISPconnectionagain sho

kup Con

ket share of p connecti. This alsouse Airtels the trust

ections

the variousns, additio

mean tat ths one of itcreated by

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ISPs for coal connecti

e major per s connectioAirtel in t

r of Subsc1232

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33 | P

ibers

er than thealso we se

ompaniese of the prihich force

a g e

mainthathich

marys the


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34 | P a g e

customer to choose Airtel more and more. Aircel also have an increased prescence here showingthat it is slowly coming into the leased line market using the backup connection as the mode ofdisplacement of its competitators.


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Satisfa

Aircel

AirtelBSNL

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border liother ISsatisfiedcustome

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omers 38 wchance of c customerseir marketllowed byand hence

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ere dissatisanging theare the lowhare.AirtelTATA. Thhe brand na

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ssatisfied

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35 | P

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ISP an

ISP

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From thcategoridiverse.

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rtel is spreis offeredrs are low

36 | P

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l thealsoause


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37 | P a g e

of customer loyalty towards Brand Airtel. Aircel is slowly coming up the table and should be amajor competitor in the next 2-3 years.


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No of

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42/56

Custo

From ththere comore anwere:

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39 | P

illing to upould be spa interviews.

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radee forThey

ains


43/56

Choice

From thsystem acustomewho aresatisfacti

of ISP fo

above tablre from Air satisfactioready to u

on model o

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um numbernd preferenarest compice provid t them and

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of customee of the cutitor is TArs should tain a custo

who prefer stomer towaA which h

ry to emuler share in

A

40 | P

to upgraderd Airtel as 34% custte the custthe market.

irtel5%

a g e

thered theomeromer


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Churni

The whchurningexisting

Compar that ther complet

provider

ng Mark

le responsi market coSP to anot

d to the upe is a lot o analysis t as they ha

t Conditi

bility goesdition. In Ber is quite e

radation faf dissatisfa avoid losie a chance

n

o the Saleanglore masy and hen

ctor more ction among of mark o increase t

and Mark ket the cone the sales

ustomer are the custot share. Their market

eting teamditions foream should

willing toers and

s also is ashare.

to get theustomer totake a full t

switch the Ience the Igood sign

41 | P

ull advantaswitch frooll of the sa

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e ofonee.

howsdo aming


45/56

New IS

The tablintervienew custcustome

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nt

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of the cu been theatisfied wittrants like

tomers. Itajor marke Airtel. Alsircel whic

42 | P

as foundsharehold

o we see th shows th

a g e

hiler thet thet the


46/56

43 | P a g e

customers are ready to experiment with the ISP connection, though most customer stated that itwould be first as a backup and later into the primary connection.


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Reason

The firstis the mhas capt

points to

s for swit

major reasoximum in sred the intards custo

hing

n for switcouth-east Aernet marke

er dissatis

Rea

Pri

Ser

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Bac

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Grand

ing is price.ia. Anothe

t. Other reaaction whic

ons C

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al Line

up

idth

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sons like Bh are contr

unt

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verified than is servic

andwidth,llables for t

t the cost fo and hereackup ande service p

44 | P

internet inirtel to an eBetter SLovider.

a g e

Indiaxtentalso


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Calculation for Approximate Market Potential

The market potential for Aircel in Banglore is calculated by the formula:

Market Potential=Percentage of Market Uncaptured by Aircel X Percentage of customersprospensity to switch to Aircel X Percentage of possible customers to switch to Aircel

Where, total market uncaptured by Aircel = 95%

Customers prospensity to switch to Aircel is calculated by Percentage of total customer whowould switch X Percentage of customer wishing to switch to Aircel .

Percentage of customer wishing to switch = 96/200 = 48%

Percentage of customers wishing to switch to Aircel = 28/96 = 29%

Percentage of customers prospensity to switch to Aircel = 14%

Percentage of possible customers to switch to Aircel is calculated by Percentage of totaldissatisfied customers X Percentage of dissatisfied customers of other ISPs.

Percentage of total dissatisfied customers : 59/200 = 29.5%

Percentage of dissatisfied customers of other ISPs : 58 / 59 = 98.30%

Percentage of possible customers to switch to Aircel = 29%

Market Potential = 3.85%.

Hence we can say tat Aircel would have a market potential of 3.85 % currently in theindustry which is a good sign for a company which is a new entrant in the market.


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FINDINGS ANDRECOMMENDATIONS


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Findings

Findings for Aircel

Aircel has a modest market share : Aircel has only 5% of the total market share in Bangalorecorporate market. A Large 95 % of the market is untapped which is captured by the other ISPs.The increasing trend of data market for corporate has also created a huge opportunity. Anotherfactor that should be kept in mind is that Aircel also has a medium dissatisfaction level amongthe existing customers. Not only expansion but retention of the existing customers is alsorequired.

Aircel has a huge potential to Grow : In two years time the company has grown to 5 % of thetotal market share and the market potential indicates another growth by 4% is a good indicatorfor the company. Aircel is slowly and steadily becoming a preferred service provider for the

corporate world.

General Findings for ISPs

Factors looked upon by various customers while choosing ISPs: The customers in theeducational institutions prefer price factor to other factors, as they do not have much to do withconnectivity. In case of the software companies, they look for service factor while going forinternet connectivity. This is because the work of software companies depends on the internetalone. The companies work will come to halt if there any problem occurs with the internetconnectivity. This is also the reason why the IT companies prefer additional ISP as backup /

parallel link.

Expenditure decide medium: The level of expenditure that every customer is ready to spenddetermines the medium of usage that is apt for him. Therefore, ISPs can find customer

purchasing power in order to target them for a particular medium.

Level of Satisfaction: The level of satisfaction is a key variable that influences the customers propensity to switch from the current ISP to another ISP. This means that ISPs will have tomaintain a good satisfaction level if they wish to retain their customers and need to find out thedissatisfied customers of other competitors and churn them to Aircel customer.

Competition: The main competitors for Aircel are the data market Bangalore are TATA, BSNL,Reliance, and Airtel. ISPs like Reliance, Airtel and Sify provide internet services t much cheaperrates compared to Aircel.

Number of systems: The number of systems connected to internet is also a major reason for thetype of connection. It is directly proportional to the total bandwidth use by the organization.


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Customers perception: Customers admire Aircel for its latest technology, reliability and speed.Airtel and TATA are chosen for reliability and service. Others are chosen for price.

Lack of customer awareness: Clear customer awareness on the functioning is missing which is

providing bad for the ISPs. ISPs are not ready to disclose some of the general facts to thecustomers such as if there exists a last mile connection with RF link, the customer may beexperiencing a slight drop in speed which the respective ISP does not disclose to him and alsothe customers are not ready to get acquitted with the facts about data connectivity.

Limitations and Constrains

All the data disclosed by the respondents are assumed to be true, No data validation methodolyare avaliable for the moment.

Time constraint- Since the duration of my summer project was only 6 weeks; it was not possibleto go deeply into the various dimensions of the project in detail to tab the total SME sector.

The study also takes into consideration only small and medium sized business, which doesntgive an exact position of the internet penetration.

Conclusions

I can be easily stated that the connectivity market is in growth stage in Bangalore. There is ahuge potential for the ISPs to grow and establish themselves. Only the main factor is that theyshould make necessary changes to their operations so that they become a unique player in themarket. This can be done through innovative technology, pricing, customer service policies, etc.

Aircel being just a marginal player has a large potential and also challenge in the market. To

increase their share in the ILL market they must try to convert the Brand Value generatedthrough innovative mobile services into data connection lines.

It is not the bigger or the faster working company that will win the race but the company that issmarter and more innovative. Sp ISPs must try to become more adaptive and smarter accordingto the market conditions prevailing.


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Recommendations

Suggestions for Aircel

Concentrate of sensitive markets: Aircel should concentrate on providing better services tocustomers situated in sensitive areas like Electronic City and Whitefield, where customer lookupon the services offered by the ISPs.

Last Mile Issues: Aircel should check each customer whom they have given connectivitythrough last mile, as the customers are in touch with only the channel partners. In case, if thechannel partner closes its operations, customers are not aware of whom to contact regarding the

problem with internet connectivity.

Aircel should target other ISPs: As more and more corporate are changing their service providers they should be targeted as new customers. The number of channel partners should beincreased to keep the eye on overall Bangalore market

Advancement in RF technology: There should be an advancement of technology in RFfrequency sector with lesser cost. That can create a larger market opportunity for Aircel as theorganization having branch offices at remote locations.

Other Sector: Aircel should not only target the IT sector but also educational institutes,corporate banks, micro finance institutes because they can have more potential than IT

companies as they have a large number of branches to be connected through internet.

General Suggestions

Improve satisfaction level: ISP needs to improve the general satisfaction level of the customer by providing them better services and faster connectivity methods. Try to solve the problem asfast as possible and also keep in touch with the customer through various medium so as to realizethe problem faster and resolve it.

ISPs needs to concentrate on one medium at a time: ISPs can concentrate on one medium of

usage at a time so that they can easily penetrate into the market and ISP with better brand valuecan contrite on broadband and vice-versa. Improvement in price can be made through themediums and also customer mapping can be done to find the potential customers for eachmedium with the expected expenditure.


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Improve customer awareness: The customer awareness has to be improving so that the newcustomers can understand their problems better and infact would help the ISP to improve theservices.

Higher Bandwidth: ISP needs to bring better bandwidth options to the market as the customerare willing for more and more bandwidth my means of higher allocations. This means they getmore and more at par with the international standards.

Better disaster Management: A better disaster management system has to be initiated for anyfuture problems. A permanent disaster recovery system must be set up to cover all the major

problems that may occur in the future. This can set as a cross functional team involving membersfrom all section of the company

Innovative VAS should be introduced as compared to the rivals.

Can target the dissatisfied customers: Aircel can target dissatisfied customers of other ISPs by providing additional services/ offers. There is a high level of dissatisfied customer of other ISPs.The problem faced with the internet connectivity is latency, billing, services and stability.


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Bibliography

1. Wikipedia online encyclopedia en.wikipedia.org/wiki/Aircel_ltd

2. www.justdial.com 3. Explore.oneindia.in/industry/telecommunication/

4. www.Aircel.com 5. www.akamai.com

6. Kotler, Phillip and Kevin , Keller Lane. 2006. Marketing Management. s.l. : Pearson Education,

2006 7. G.C.Beri, Marketing Research, Third Edition, Tata Mcgraw Hill Publishing Company Ltd

Naresh K. Malhotra, Marketing Research, Fourth Edition : Pearson Education, 2005


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Company Name :

Contact Name : Designation :

Type of Operations Software BPO/KPO Educ Manu Media Other

No. Computers 1 to 50 50 to 100 100 to 150 150 and above

No. of Offices How are they Connected (MPLS / VPN / P2P)

Primary Internet BB / ILL Bandwidth Cost / Year

Primary ISP Airtel BSNL Tata Aircel Reliance Other

Backup Internet BB / ILL Bandwidth Cost / Year

Primary ISP Airtel BSNL Tata Aircel Reliance Other

Connectivity Fiber Copper P2P RF Wi-Max

No. of Static IPs 2 to 8 8 to 16 16 to 32 32 and more

Rate the Service between 1 to 5 (5-Excellent to 1-Poor)Reliability Speed Connectivity Cost

Would you like to upgrade Your Connection?

YesNo

Would you like to change Your Connection?

YesNo

Which Connection would you prefer to change to?

Bandwidth intensive Applications Usage (Current & Future)

VOIP Solution In the near futureVideo Conference In the near future

ERP Application In the near futureMail Server Hosting In the near f utureCRM Software In the near futureCloud Application In the near future

Appendix-I


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Who decised the ISP and Bandwidth

Director / MD / CEOIT Manager Finance Manager Other

Factors for Finalizing ISP

PricingBrand NameReferenceOther

Do you need any Value Added Service from ISP?

Managed Services Any Other

Any Suggestions

shyam krishnan

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