Market potential analysis towards internet data card

WEST BENGAL UNIVERSITY OF TECHNOLOGY

SUMMER PROJECT REPORT

ON

MARKET POTENTIAL ANALYSIS TOWARDS INTERNET DATA
CARD

SPECIAL REFERENCE

TO

VODAFONE

From 20th June 09-5th August 09

BY

PROSENJIT.R.SAHA

WBUT Regn No: 081670710070 of 2008-2009

WBUT Roll No: 08167009084

MANAGEMENT INSTITUTE OF DURGAPUR

Rajbandh

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PREFACE

The MBA course is well structured and integrated course of business studies. The main
objective of practical training at MBA level is to develop skill in student by supplement
to the theoretical study of business management in general. Industrial training helps to
gain real life knowledge about the industrial environment and business practices. The
MBA course provides student with a fundamental knowledge of business and
organizational functions and activities, as well as an exposure to strategic thinking of
management.

In every professional course, training is an important factor. Professors give us
theoretical knowledge of various subjects in the college but we are practically exposed
of such subjects when we get the training in the organization. It is only the training
through which I come to know that what an industry is and how it works. I have learn
about various departmental operations being performed in the industry, which would,
in return, help me in the future when I will enter the practical field.

Training is an integral part of MBA and each and every student has to undergo the
training for 2 months in a company and then prepare a project report on the same after
the completion of training.

During this whole training I got a lot of experience and came to know about the
management practices in real that how it differs from those of theoretical knowledge
and the practically in the real life.

In today‟s globalize world, where cutthroat competition is prevailing in the market,
theoretical knowledge is not sufficient. Beside this one need to have practical
knowledge, which would help an individual in his/her carrier activities and it is true
that “Experience is best teacher”.

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ACKNOWLEDGEMENT

An individual cannot do project of this scale. I take this opportunity to express my

acknowledgement and deep sense of gratitude to the individuals for rendering valuable

assistance and gratitude to me. Their inputs have played a vital role in success of this

project. I would like to express my sincere thanks to all those instrumental in this

project Work. First, I would to thank Prof. Dr. N.C.Ghosh (Director of Management

Institute of Durgapur) Prof. A.K. Ghosh, (Principal Department of Business Administration),

for giving me this opportunity to do this project and learn from it. I am thankful to

Vodafone for giving me helpful information to complete this project (Research).I

express my sincere thanks to Mr. Koushik (Sales Manager), Mr. Bibhas Chandrs, (Asst

Professor & HOD, MBA department) Sr.Lecturer R.K.Jha (MID faculty), for helping me

in giving me all relevant information about the product and service. My heart full

thanks to the whole staff and customers of Vodafone, who gave me continuous support

in every possible manner to gain practical knowledge in Industry. Finally, I would like

thank all lecturers, friends and my family for the kind of support and to all who directly

or indirectly helped me in preparing this project report.

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EXECUTIVE SUMMARY

Estimating the market or market potential for a new business or business expansion is
critical in determining the economic feasibility of a venture. Estimating the market
potential will determine if the market is large enough to support the businesses. This
checklist will address a number of questions that need to be answered before an
estimate can be calculated.

What type of customer will buy the product or service?

Where are these customers located?

How often do they use it?

What is the Competition?

What are people paying?

What is the Potential for the Market to Develop?

What is my share of the Market?

Estimating the market potential for a business is critical in evaluating its viability and
provides an estimate of the maximum total sales potential for a given market. Once the
estimated market potential has been calculated, it is possible to determine if the market
is large enough to sustain the proposed business or sustain an addition competitor in
the marketplace. It is important to remember that the estimated market potential sets an
upper boundary on the market size and can be expressed in either units and/or sales.
Unless there are no direct or indirect competitors, a business will capture a share of the
total estimated market potential not all of it.

The following provide the steps and data necessary to estimate the market potential.
These will be discussed in detail later.

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Key Steps in Estimating Market Potential:

1. Define your target market and market segments.

2. Define the geographic boundaries of your market.

3. Determine the average annual or monthly consumption.

Growth on the Data Cards especially happen when business travelers, academicians as
well as other professionals need to access emails and corporate applications as well as
personal requirements during urgent trips and travels. The cutthroat competition in the
telecommunication sector of India posed a great threat to the development of Vodafone.
The project aims to identify the market potential of Vodafone in the internet data card
in Burdwan, Durgapur and Asansol markets.

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Contents
Page no.

I. The company……………………………………………………………………….
II. Literature Survey…………………………………………………………………..
Chapter 1: About Indian Telecom Industry…………………………………….
Chapter 2: Broadband services to derive internet penetration in India……..
Chapter 3: The drivers for penetration of broadband in India……………….
Chapter 4: India, an ideal destination for investment in telecom sector…….
Chapter 5: History of Indian Telecom Industry………………………………..
Chapter 6: Facts about Indian telecom industry……………………………….
Chapter 7: Experts review on Indian telecom sector………………………….
Chapter 8: The Internet in India…………………………………………………
Chapter 9: India Telecom Report: Internet and Broadband Services………..
III. Methodology……………………………………………………………………….
Chapter 1: How the project has been carried out……………………………..
Chapter 2: Data Collection………………………………………………………
Chapter 3: Statistical models used……………………………………………....
IV. About the Data Card……………………………………………………………..
V. Analysis and Results………………………………………………………………
Chapter 1: Market Potential Analysis…………………………………………..
Chapter 2: Development of Hypothesis and its testing……………………….
Chapter 3: Graphs and charts……………………………………………………
VI. Conclusions and recommendations……………………………………………..
VII. Annexre……………………………………………………………………………..
VIII. Bibliography……………………………………………………………………………

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The company

Vodafone Essar in India is a subsidiary of Vodafone Group Plc and commenced
operations in 1994 when its predecessor Hutchison Telecom acquired the cellular
license for Mumbai. Vodafone Essar now has operations in 22 circles with over 65.92
million customers. The company is a joint venture of Essar Communication Holdings
Ltd and the UK-based Vodafone Group. Vodafone has partnered with the Essar Group
as their principal joint venture partner for the Indian market. They are in the business of
cellular telephony. Over the years, Vodafone Essar, under the Hutch brand, has been
named the „Most Respected Telecom Company‟, the „Best Mobile Service in the country‟
and the „Most Creative and Most Effective Advertiser of the Year‟. Vodafone is the
world‟s leading international mobile communications company. It currently has equity
interests in 27 countries across 5 continents and 40 partner networks with over 303
million proportionate customers worldwide. Vodafone has partnered with the Essar
Group as its principal joint venture partner for the Indian market. Essar Global Limited
(EGL) is a diversified business group spanning the manufacturing and services sectors
of Steel, Energy, Power, Communications, Shipping & Logistics, and Projects. The
group has operations and investments in India, Canada, USA, Africa, the Middle East,
the Caribbean and South East Asia and employs 30,000 people worldwide. Vodafone
Essar Ltd provides services like 3G, which are based on 1800 MHz and 900Mhz GSM
digital technology. They offers voice and data services. In addition, they offers postpaid
connections activation, prepaid SIM cards and recharge coupons sale, service
activation/deactivation, postpaid tariff plan change, customer query resolution,
prepaid/postpaid SIM card replacement and up gradation, mobile number change, and
information on and subscription of value added services through stores. The Essar
Group is Vodafone‟s principle partner in India. The Essar Group is a diversified
business corporation with a balaned portfolio of assets in manufacturing and service

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sectors of Steel, Energy, Power, Communications, Shipping prots & Logistics and
Projects.

About Hutchison-Essar Vodafone Negotiations

The name Vodafone comes from “Voice data fone” HQ in Berkshire, England, is the
world‟s leading international mobile communications group with 29Million revenues
27 countries, 303 million customers, 40 partner networks. Advanced mobile
telecommunications services provided by vodafone are 3G, data related services. The
Joint venture - 67% stake by HTIL and 33% owned by Essar.HTIL – Li Ka-Shing , Essar
– Ruia Family.HTIL is HK Based Telecom Company and Essar is India based diversified
corporation 4th largest cellular operator in India 74.08 million customer.

Vodafone’s Objective

To venture into the world‟s most lucrative cellular market

Strengthen its operation worldwide

To obtain the majority stake of Hutchison

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Literature survey

CHAPTER 1: ABOUT INDIAN TELECOM INDUSTRY

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In recent years, the Indian telecom industry has witnessed phenomenal growth. A
conducive business environment, favorable demographic outlook and the political
stability enjoyed by the country have contributed to the growth of the industry. India
achieved the distinction of having the world's lowest call rates (2–3 US cents), the fastest
sale of million mobile phones (1 week), the world's cheapest mobile handset (USD 19)
and the world's most affordable colour phone (USD 31).

One of the fastest growing cellular markets in the world in terms of number of
subscriber additions – 261.07 million (March 2008)

 Expected to reach total subscriber base of about 500 million by 2010 (i.e., more
than one phone for every household)

 Annual growth rate of the telecom subscribers – 42 percent (2008–09)

 More GSM subscribers than fixed-line subscriber

 Total telecom subscribers – 300.49 million (March 2009 Cellular + Fixed Line

 Tele density – 26.22 percent (March 2009)

 Number of new mobile subscribers added last quarter – 27.62 million (March
2009)

 ARPU for GSM – USD 5.28* (USD./sub/ month)

 Telecom equipment market – USD 34,100 million (2008–09)

 Handset market – USD 7,250 million (2008–09)

 Telephony services (mobile and basic) and Internet services dominate the Indian
telecom services.

The Indian telecom market generated revenues of approximately USD 32 billion in
2008–09. It registered a CAGR of approximately 32 percent from 2002–03 to 2008–09.
The CAGR from 2008–09 to 2011–12 is expected to stabilize at 21 percent. Apart from

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mobile telephony services, other value-added services are also gaining importance. The
Indian telecom services can be divided predominantly into basic, mobile and Internet
services. It also comprises smaller segments, such as radio paging services, Very Small
Aperture Terminals (VSATs), Public Mobile Radio Trunked Services (PMRTS) and
Global Mobile Personal Communications by Satellite (GMPCS). The growth witnessed
in the mobile services and Internet services segments was much higher as compared to
other services, such as basic services and radio paging services which are nominal in
terms of numbers.

Source** TRAI

Revenues of Indian Telecom Industry: 2002–08 (USD billion)

CHAPTER 2 : Broadband services to drive Internet penetration in India

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The emergence of private players and new technologies has provided a strong impetus
to the growth of Internet and broadband services. The quality and penetration of these
services have undergone changes, with significant improvement in the telecom
infrastructure. The Internet subscriber base registered a CAGR of 60 percent for the
period 1997–98 to 2007–08.

Source: TRAI report 2008

BSNL and MTNL caters to more than two-thirds of Internet subscribers in India. Private
players are catching up fast due to increased penetration of Internet and broadband
services in India. The telecom market will experience high penetration of Internet
services with the support from government policies and introduction of novel
technologies in India. The total no. of Broadband Subscribers of these 13 Service
Providers have increased from 3.1 million to 3.82 million by adding 0.72 million
(23.35%) subscribers in the quarter ending March, 2008.

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Source: TRAI report on market shares of telecom companies in India.

CHAPTER 3: The drivers for penetration of broadband in India

The drivers for penetration of broadband in India are:

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Decreasing cost per line: The decrease in cost per line has come from two factors-
decrease in the cost of equipment and from the inherent advantage of wireless
when adding new lines. The base stations which cost $3000-$5000 is now costing
$400-$800 from the end of 2008. The CPE (Customer Premise Equipment) which
costs $200-$400 is now costing $30-$80 from the end of 2008. The cost of a
wireless network is high in the first stage of deployment, because of factors like
taking up space for tower, erecting the tower, cabling, housing, and connecting
the tower to the network, installing base stations, etc. However, once those costs
are recovered from enterprise services, adding new subscriber will come at a
minimal cost.

Decreasing operating expense: We are witnessing more and more infrastructure
sharing between various operators which was completely absent before.
Especially, in rural networks, this infrastructure sharing has turn out to be mere
common sense. The operators who own the spectrum are now reselling the
spectrum to other smaller players who will mushroom in various parts of India
to cater to non-metros. In addition, the coming of Virtual Network Operators will
add to competition.

Decreasing cost of PC (or similar device): With projects like one laptop per
person, and other initiatives, the cost of PC is going to be less than Rs. 5000 by
the end of 2009. Other concepts like Novatium, if they tend to be aggressive can
also make a marginal impact on the penetration of broadband. (BSNL is rolling
out its broadband services to one lakh schools across the country from December
2008)

Social attitudes and habits embracing broadband facilities: Every school in India
is going to have a PC and also an internet connection. Those kids who never
knew PCs will now be used to using them at these schools. These kids in turn
will make way for their families owning a PC and therefore an Internet

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connection. All government employees are now moving towards using PCs and
broadband connectivity.

More Indian content: What will further fuel the penetration is the content which
is more relevant to the masses of India. Subscribers would like to see more
content tailored to their needs and desires. More Indian language content, more
applications suitable to Indian social context will come up in the next few years
which will in turn contribute to increasing broadband penetration.

Broadband connection:

6.22 million (March 2009) "Present scenario" In the fixed line arena, BSNL and MTNL
are the incumbents in their respective areas of operation and continue to enjoy the
dominant service provider status in the domain of fixed line services. For example
BSNL controls 79%; of fixed line share in the country.

On the other hand, in the mobile telephony space, Airtel controls 21.4% subscriber base
followed by Reliance with 20.3%, BSNL with 18.6% &, Vodafone with 14.7%, subscriber
base (as per June 2009 data)

CHAPTER 4: India, An Ideal Destination for Investments in Telecom
Sector

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India is an ideal destination for investments in the telecom sector, the reasons are as
follows:

1. World‟s largest democracy

2. Independent judiciary

3. Skilled and competitive labour force

4. Fifth largest telecom network in the world; second largest among the emerging
economies after China

5. on an average, about 6–7 million new users added per month, making India the
world‟s fastest growing wireless services market

6. Liberal Foreign Investment Regime–FDI limit increased from 49 percent to 74
percent; the rural telecom equipment market is also open to large investments

7. Among the countries offering the highest rates of return on investment

8. The large untapped potential in India‟s rural markets–1.9 percent teledensity in rural
markets as compared to the national level of 18 percent

9. Expected to become the second largest telecom market by 2010

10. The government promoting telecom manufacturing by providing tax sops and
establishing telecom specific Special Economic Zones

11. Fully repatriable dividend income and capital invested in telecom equipment
manufacturing.

CHAPTER 5 : HISTORY OF INDIAN TELECOM INDUSTRY

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 1881 Telecom Services Introduced in India.

 1947 Posts, Telegraph and Telephones(PTT) come under the aegis of the

Ministry of Communication.

 1985 The Department of Telecommunication (DoT) comes into existence which

would be a self regulator.

 1986 DoT converted into two wholly government-owned companies: The Videsh

Sanchar Nigam Limited (VSNL) for international telecommunications and

Mahanagar Telephone Nigam Limited (MTNL) for service in metropolitan areas.

 1996 Cellular Services launched in India. Introducing private players in the

market.

 1997 Telecom Regulatory Authority of India (TRAI) formed.

 2000 DoT becomes a corporation, Bharat Sanchar Nigam Limited (BSNL).

 2005 Foreign Direct Investment (FDI) increased to 74%.

 2008 India becomes 2nd largest Telecom Market in the World.

CHAPTER 6: Facts about Indian Telecom Industry

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 The Indian Telecom sector is third largest network in the world.

 Subscriber numbers already crossed 250 million.

 Average growth rate of over 40% in respect of subscribers.

 Monthly additions of above 7 million phones.

 Growth impetus from wireless segment with 84% wireless and 16% wired.

 National teledensity at 26%.

 Rural teledensity stands at 7%, while the urban at 57%.

 Further access is provided by 54 lakh PCOs and 5 lakh VPTs.

 9 million Internet and 2.5 million broadband subscribers.

 More than a thousand cities have been provided with broadband connectivity

out a total of five thousand cities.

CHAPTER 7: EXPERTS REVIEW ON INDIAN TELECOM SECTOR

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Girija (1998), in its article “Socioeconomic Implications of Telecommunications
Liberalization: India in the International Context” says that Telecommunications
restructuring have evolved differently in Asia and Latin America. While Asian
governments have moved cautiously in bringing changes to the sector, Latin American
nations have implemented radical ownership and market transformations. The Indian
telecommunications reform falls in between these two general regional trends. The
choice of a high component of competition, increased private participation, and no
privatization of the national carrier set conditions that will trigger unique
socioeconomic effects. This article identifies and highlights the likely implications of the
Indian reform on key economic and social issues, such as the cost of services, cross-
subsidies, network interconnection, private investments, universal services,
employment, and the possible rise of an information-intensive economy. It does so by
comparing and contrasting the Indian experience with dominant reform strategies
elsewhere in the developing world.

Chowdary (1999) discusses how Telecom reform, or de-monopolization, in India has
been bungled. Shaped by legislation dating back to the colonial era and post Second
World War socialist policies, by the mid-1980s India realized that its poor
telecommunications infrastructure and service needed reform. At the heart of the
problem lay the monopoly by the government‟s Department of Telecommunications
(DOT) in equipment, networks and services. The National Telecom Policy 1994 spelt out
decent objectives for reform but tragically its implementation was entrusted to the DOT.
This created an untenable situation in which the DOT became policymaker, licenser,
regulator, operator and also arbitrator in disputes between itself and licensed
competitors. He discusses the question: „Why did India get it so wrong? and What India
should do now?

Anand (1999), in his article named “India's economic policy reforms” says that India
was embarked on economic reforms in July 1991, in the wake of a balance of payments
crisis. In this article, an attempt is made to review two books and a set of World Bank

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reports concerning the progress of these reforms. Issues concerning economic policy,
impact of the reforms on poverty, sectoral issues relating to agriculture, industry and
infrastructure are briefly discussed. As reforms enter a more difficult phase, several
challenges remain. Some of this fall under the “economic agenda'' of measures needed
to maintain economic growth; others can be termed the “development agenda'' - of
improving human development. Progress with regard to the former is not sufficient to
produce results concerning the latter.

Bhattacharya (2000) constructs a vision of the Indian telecommunication sector for the
year 2020. The paper aims at isolating agents of change based on international
experiences and situates India in the development continuum. The agents of change
have been broadly categorized into economic structure, competition policy and
technology.

Das (2000), in her paper described the Liberalisation of the Indian telecommunications
services which started in mid nineties with no change in the existing public monopoly
structure, entirely controlled by Department of Telecommunications (DoT). In order to
evaluate any proposed industry structure, it is essential to analyse the production
technology of DoT so as to determine the rationale of liberalisation and sustainability of
competition. Accordingly, the researcher estimates a frontier multi-product cost
function for DoT, where the cost function has been duly modified to account for the
production technology of a public monopoly. The study finds that although DoT
displays high allocation inefficiency, it is still a natural monopoly with very high degree
of sub additively of cost of production. This study implies that the choice of any reform
policy should consider the trade-off between the loss of scale and scope economies and
cost saving from the reduction in inefficiency of the incumbent monopoly in the event
of competition.

Rao (2000), in her article named “Internet service providers in India”, provides a broad
view of the role of an Internet service provider (ISP) and the factors to be considered

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before entering the ISP market. Describes the Internet/ISP scene within India and
discusses the configuration of local, regional and national level ISPs, and the supporting
infrastructure. She also identifies the various success factors. The global Internet
scenario is discussed regarding the phases of the Internet in India, i.e. pre and post
commercialization. The main players are described: ERNET, NICNET, STPI, VSNL,
MTNL, Satyam Infoway and Bharti-BT. The financial and legal implications are
highlighted in the Indian context. Many companies entered the nascent ISP business in
India due to deregulation. Building local content, foreknowledge of new Internet
technologies, connecting issues, competitiveness, etc. would help in their sustainability.
She concludes that though many companies entered the nascent ISP businesses in India
due to deregulation, many of them are unlikely to survive in the longer term.

Vrmani (2000) estimates the contribution of telecommunication (or telecom) services to
aggregate economic growth in India. Estimated contribution is distinguished between
public and private sectors to highlight the impact of telecom privatization on economic
growth. Knowledge of policy determinants of demand of telecom services is shown to
be essential to enhance growth contribution of telecom services. Using a recent sample
survey data from Karnataka State in South India, price and income determinants of
demand for telecom services are estimated by capacity of telephone exchanges
Estimation results offer evidence for significant negative own price elasticity and
positive income elasticity of demand for telecom services.

Narinder (2004), in his article “Enhancing Developmental Opportunities by Promoting
ICT Use: Vision for Rural India” talks about the foremost benefits of Information and
Communication Technologies (ICTs) in developing countries that can be helpful in
improving governance including public safety and eradication of illiteracy. The benefits
of ICTs have not reached the masses in India due to lack of ICT infrastructure,
particularly in rural areas, where two-third of the population of the country lives. Even
in cities and suburban areas, use of ICTs is not popular due to lack of awareness to its
use, computer illiteracy, and absence of practical applications. India is the largest

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country in South Asia, with a population of over one billion people and its telecom
sector is presently experiencing fast growth phases. However telephony penetration in
villages is less than two percent of the rural population and about 15 percent of the
villages are still without any telephony service. Universal access to ICTs in rural areas
has been planned and is being implemented through Public Tele Info Centers having
voice data and video, as majority of villagers in India cannot afford a separate home
connection. Illiteracy in rural areas is as high as 40 percent and in some tribal belts
hardly about 20 percent people are literate. There are 35 million children in age group of
6–11 years, who are out of school and one out of four drops out during primary classes.
Education and training, therefore, must be given the top priority if advantages of ICTs
are to be harnessed. Indian economy is agriculture based and employs maximum
workforce. Improvement in agriculture productivity can help in reducing rural poverty.
Adoption of ICT in agriculture will play an increasingly important role in crop
production and natural resource management. The other critical factor is technological
challenges for universal access to ICTs to bring down the network access cost.

Nikam, Ganesh, Tamizhchelvan (2004), analyses that changing face of India in
bridging the digital device. He reiterated - “India lives in villages” said the Father of the
Nation, Mahatma Gandhi. With 1,000 million people and 180 million households, India
is one of the biggest growing economies in the world. With the advent of the
Information, Communication and Technology (ICT) revolution, India and its villages
are slowly but steadily getting connected to the cities of the nation and the world
beyond. Owing to the late Rajiv Gandhi, India is now a powerful knowledge economy,
and though India may have been slow to start, it certainly has caught up with the West
and is ahead in important respects. The Government, the corporate sector, NGOs and
educational institutions have supported rural development by encouraging digital
libraries, e-business, e-learning and e-governance. The aim of this paper is to touch
upon and highlight some of the areas where, by using ICT, the masses have been
reached in this way. A follow-up paper will outline collections of significant cultural

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material which, once national IT strategies are fully achieved, could form part of a
digitally preserved national heritage collection.

Dey (2004), in her article talks about the discussions between the Federal
Communications Commission (FCC) and communications policy makers and
regulators in other countries and how they have gleaned several clusters of issues
where further research would directly benefit them. Recently, there have been two
notable shifts. First, as the acceptance of the competition model over the monopoly
model for telecommunications markets takes deep effect in regulators all over the
world, questions regarding process and procedure for regulation are becoming ever
more urgent. This paper discusses current questions regarding decision making,
enforcement, and understanding consumer issues that arise often in the FCC's
discussions with other regulators. Second, technological change is potentially shifting
market definitions. In the FCC's discussion with other regulators over the last two
years, the overlap of wireline telecom, wireless telecom and cable television has become
more pronounced.

Singh (2005), in his article “The role of technology in the emergence of the information
society in India” describes the role that information and communication technologies
are playing for Indian society to educate them formally or informally which is
ultimately helping India to emerge as an information society. Though India has a huge
population, the illiteracy rate is also huge in this country. The paper has taken an
approach to find the historical situation and present the prevailing scenario as well as
the change that are taking place with the application of ICT to the advantage of the
society in different areas including daily life. India is making all out efforts to be
counted among the developed nations of the world. The article also describes the
considerable attention India is taking for application of technology, development of
infrastructure and human resource for meeting national needs. Basically India is
building an information society. Technology has helped society to cut across the
traditional boundaries for getting converted into anemerging information society. The

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study concludes that The Indian software and services industry has significantly helped
to boost the Indian economy. In IT-enabled services too, India has been clearly
perceived to be the dominant hub. The Indian software sector is being recognized as the
single largest contributor to incremental market capitalization in India but the sector is
still small in terms of contribution to GDP, especially when compared to other large
sectors in the economy like agriculture and manufacturing. Similarly, the
telecommunication sector has contributed a lot but still has a considerable way to go.
The paper also enforces that comparisons of India‟s telecommunication statistics with
those of developed and other emerging economies show that the country is still far
behind its contemporaries.

Banka (2006) gives an overview of the mergers and acquisitions in the
telecommunication industry. According to him Governments decision to raise the
foreign investment limit to 74% is expected to spur fresh rounds of mergers and
takeovers in India. He foresees a sector that represents humongous opportunity waiting
to be tapped by Indian and foreign conglomerates.

Thomas (2007), in his article describes the contribution made by telecommunications in
India by the state and civil society to public service, this article aims to identify the
state‟s initial reluctance to recognize telecommunications provision as a basic need as
against the robust tradition of public service aligned to the postal services and finds
hope in the renewal of public service telecommunications via the Right to Information
movement. The article follows the methodology of studying the history of
telecommunications approach that is conversant with the political economy tradition. It
uses archival sources, personal correspondence, and published information as its
research material. The findings of the paper suggests that public service in
telecommunication is a relatively „„new‟‟ concept in the annals of Indian
telecommunications and that a deregulated environment along with the Right to
Information movement holds significant hope for making public service
telecommunications a real alternative. The article provides a reflexive, critical account

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of public service telecommunications in India and suggests that it can be strengthened
by learning gained from the continual renewal of public service ideals and action by the
postal services and a people-based demand model linked to the Right to Information
Movement. All studies done by the researcher suggests that the right to information
movement has contributed to the re-vitalization of participatory democracy in India
and to a strengthening of public service telecommunications.

Cygnus Business Consulting & Research Pvt. Ltd. (2008), in its “Quarterly
Performance Analysis of Companies (April-June 2008)” has analysed the Indian telecom
industry in the awake of recent global recession and its overall impact on the Indian
economy. The analysis is done in the background of wake of global recession and rising
inflation. Cygnus estimates, the Indian telecom industry is expected to maintain the
growth trajectory in the next quarter as well. With almost 5-6m subscribers are being
added every month, and the country is witnessing wild momentum in the telecom
industry.

Maheshwari (July-September 2008), in her report analysed the Indian telecom industry
and ascertain that Indian telecommunications has been zooming up the growth curve at
an mounting pace, and India is has surpassed US to become the second largest wireless
network in the world. This growing subscriber base is basically created by tapping into
rural India, which is an emerging market for the industry. The estimate for the next five
to ten years is that the rural market will form 40 % of the subscriber base. The study has
analysed the human resource management process of the industry, and specially the
latest trends of recruitment of this massively growing industry.

Anderson (2008), in his single executive interview titled “Developing a route to market
strategy for mobile communications in rural India An interview with Gurdeep Singh,
Operations Director, Uttar Pradesh, Hutch India” suggests that managers need to go
beyond traditional approaches to serving the poor, and innovate by taking into account
the unique institutional context of developing markets. His practical implication says

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that the experience of Hutchison Essar in India provides some important lessons for
mobile network operators (MNOs) and other firms in other developing markets who
are hoping to serve the rural poor: Hutchison has recognized the value of corporate and
noncorporate partners. The company has proactively established relationships with
individual entrepreneurs, and has provided has provided development support to
other partners such as distributors. The company has recognized the value of
leveraging existing local institutions, and has seen gaps in local infrastructure or
missing services as potential opportunities rather than barriers to growth. The company
has seen the rural market as an opportunity – not just an obligation to be served
because of universal service obligations. Also this article demonstrates that MNOs can
deliver availability and affordability to achieve increased individual or household
penetration through business model innovation.

Mani (2008) addresses a number of issues arising from the growth of telecom services in
India since the mid-1990s. It also discusses a number of spillover effects for the rest of
the economy and one of the more important effects is the potential to develop a major
manufacturing hub in the country for telecom equipment and for downstream
industries such as semiconductor devices. The telecom industry in India could slowly
become an example of the service sector acting as a fillip to the growth of the
manufacturing sector. A beginning towards this has been made. The formation of a
Telecom Equipment Export Forum and the announcement of the Indian Semiconductor
Policy 2007 are steps in this direction. Success crucially depends on the response of the
private sector to these incentives. Given the importance that a regulatory agency can
play in this crafting, no effort should be lost in strengthening the powers of the TRAI.
The benefits to the Indian economy from having both a strong services and
manufacturing segments in the telecom sector cannot be undermined.

Narayana (2008) estimates the contribution of telecommunication (or telecom) services
to aggregate economic growth in India. Estimated contribution is distinguished
between public and private sectors to highlight the impact of telecom privatization on

26

economic growth. Knowledge of policy determinants of demand of telecom services is
shown to be essential to enhance growth contribution of telecom services. Using a
recent sample survey data from Karnataka State in South India, price and income
determinants of demand for telecom services are estimated by capacity of telephone
exchanges. Estimation results offer evidence for significant negative own price elasticity
and positive income elasticity of demand for telecom services.

Sharma (2009) deals with the major challenges faced by India‟s telecom equipment
manufacturing sector, which lags behind telecom services. Only 35% of the total
demand for telecom equipment in the country is met by domestic production. This is
not favourable to long-term sustained growth of the telecom sector. The country is also
far behind in R&D spending when compared to other leading countries. India needs to
see an increase in R&D investment, industry-academia-government partnership, better
quality doctoral education and incentives to entrepreneurs for start-ups in telecom
equipment manufacturing. In 2006-07, 65% of the total consumption of equipment was
met through imports. This trend has far-reaching implications for the economy and
should not be allowed to continue for long. In a country like India which has a problem
of massive unemployment, the manufacturing sector should be promoted to create
more employment opportunities.

Shah (February, 2009), has analysed Indian telecom industry and studied the sector
keeping in mind three companies; namely Bharti, R.Comm and idea in the background
of recent global meltdown. The study suggests that though there is no sign of
slowdown in this sector, but surely a strong turmoil is going on in the industry. The
study states that the sector is fairly immune from the current economic downturn &
does provide a good defensive bet in medium term. With the help of newer
technologies, wireless penetration is expected to increase in the near future, which is
basically fuelling the growth of the sector. While the 3G / Broadband adoption would
ensure long term growth momentum, the article has thoroughly investigated about the
intense competitive scenario, pricing pressure, high capital intensity & substantial

27

regulatory uncertainties currently faced by the industry. The article has also described
the cause of being relatively safe of this industry. The causes described by Shah are
increasing rural coverage, rising affordability, declining handset/subscription costs,
substantially low tariffs & established brand/distribution. However, the study also
cautions the telecom industry that a steeper economic slowdown could start impacting
the subscriber usage patterns as well as operator capital investments & thereby could
substantially restrict revenue growth rates going forward.

CHAPTER 8: THE INTERNET IN INDIA

28

Internet History and Culture

The history of the Internet in India can be traced back to the early 1990‟s when ERNet, a
division of the Department of Electronics (DoE), and NICNet (Department of Statistics)
began to experiment with Internet services. But it was not until 1995 that government
owned VSNL (Videsh Sanchar Nigam Limited), became the country‟s 1st official
Internet Service Provider (ISP).

In 1997, the rise to power of the Bharatiya Janata Party (BJP) was accompanied by a
series of legislations that opened up opportunities for business online. One of the most
significant changes during this period was The New Telecommunications Policy of
1999, which ended VSNL‟s ISP monopoly and mandated that any Indian company with
a maximum foreign equity of 49% could provide hosting services.

Over time this policy has led to a rise in the number of Indian web hosting companies,
although the tough unregulated market has caused many to close. These pieces of
legislation ushered in a new era of internet growth that has increased steadily. As early
as 2000, foreign companies including Yahoo, Ebay and MSN began establishing web
portals in the country and examining India‟s strong e-commerce potential.

While the industry has been mainly free from content regulation, some high profile
instances of censorship have occurred and as of July 2006, the Indian government had
directed ISPs to block seventeen websites, including some hosted on the Geocities,
Blogspot and Typepad domains.

According to studies into the demographics of internet users in India, most users are
located near the country‟s main population centers including Delhi and Bangalore.
While figures on the exact number of internet users varies, it was estimated that
between 22 and 30 million people were online in 2007 with a 3% penetration of India‟s
market, although penetration in major urban areas is believed to be as high as 9%.
Industry experts have predicted this number to balloon to 100 million by 2010, making
India one of the world‟s fastest growing markets.

29

The early years of the internet saw users connecting primarily in public spaces such as
Internet cafes and kiosks, but this is rapidly changing. Reports from consulting
company JuxtConsult suggest that beginning in 2007, the majority of internet users are
opting for personal computing, with 59% of new users using home based connections,
up from 19% the year before.

Business Outlook

India‟s e-commerce and IT sectors continue to hold promise and are expected to grow
steadily in the coming years, despite a weak global economy and lack of infrastructure.
The growth is largely driven by requests for outsourced services including web site
design and Search Engine Optimization.

Throughout India, web site design services are readily available in major cities and the
low cost of web design is one of the main factors companies cite when choosing to
outsource web design to India. Although accurate figures on the amount spent on
online advertising are difficult to verify, trends suggest rapid growth and the need for
Search Engine Optimization Companies and Search Engine Optimization Specialists
steadily increasing.

Even with this new growth, entrepreneurs considering starting an SEO company in
India are advised to be cautiously optimistic. Competition among web site promotion
firms on the rise, although there are still opportunities for expert search engine
optimization and marketing professionals.

While outsourcing for SEO, web and graphic design have proved to be profitable, e-
commerce in general is still in the nascent phases even as Internet advertising
expenditures continue to grow. While industry giants Yahoo, Google, Microsoft and
Rediff.com are doing well and continue to dominate the e-commerce landscape, most
portals are still working towards financial success, citing cost of customer acquisition
and lack of reliable high speed broadband as major sticking points.

30

CHAPTER 9: India Telecom Report: Internet and Broadband Services

31

The Telecom Regulatory Authority of India released a comprehensive report on the
growth of Indian telecommunication Industry for quarter ending March 2009.

Internet & Broadband services have been unable to emulate the growth that is seen by
Indian Mobile sector, but it is growing steadily nevertheless. The Indian government
has heady plans when it comes to Broadband and Internet services growth. To achieve
is 500 million subscriber base in next 3 years seems to be near impossible target !

Lets look at the where Indian Internet & Broadband services stand for the quarter
ending March 2009:

Indian Internet & broadband services snapshot

Internet & Broadband Subscribers
Total internet subscribers (including 13.54 million
Broadband)
% of Growth During the Quarter 5.30%
Broadband Subscribers 6.22 million
Wireless Data Subscriber 117.82 million

According to TRAIs report, India currently has only 13.54 million Internet subscribers,
which includes broadband. This is a ridiculously low number !

Even the growth rate is only 5.3%, we seriously have problems when it comes to
internet penetration. While the wireless data internet subscriber show close to 118
million subscribers majority of them are GPRS connections on mobiles, which according
to me should not be counted a internet subscribers.

Indian Internet Subscriber Growth

32

SOURCE: TRAI REPORT MARCH 2009

 There were 13.54 million subscribers at the end of March 2009 as compared to
12.85 million Internet Subscribers at the end of December 2008, registering a
growth of 5.30%.

 The growth rate is higher as compared to growth rate of 5.01% at the end of
December 2008.

 Besides above , there were 117.82 wireless data customers at the end of March
2009 ( capable of accessing data services including internet through mobile
handsets (GSM/CDMA))

 Broadband Subscriber Growth – The number of Broadband subscribers (with a
download speed of 256 kbps or more) was 6.22 million at the end of March 2009
as compared to 5.52 million at the end of December 2008. The growth rate of
broadband subscribers in this quarter is 12.68%.

33

Technology Used to Access Internet

SOURCE : TRAI REPORT 2009

Broadband Subscribers Share (Technology wise)- Out of total 6.22 million
Broadband,

 5.364 million are DSL based;

 0.474 million Cable Modem;

 0.244 million Ethernet LAN;

 0.042 million Fiber;

 0.072 million Wireless ;

 0.020 million Leased Line;

 0.002 Million use other technologies.

34

Internet Subscriber Growth Quarter to Quarter

Growth of Internet and Broadband Services

QE QE QE QE QE % of % of % of % of
Mar June Sep Dec Mar growt growt grow Gro
2008 2008 2008 2008 2009 h h th wth
over over over over
Mar June Sep Dec
08 (12 08(9 08 (6 08(3
mont mont mont mont
hs) hs) hs) hs)
1.Subscriber
base(in
million)
i).Internet 11.09 11.66 12.24 12.85 13.54 22.09 16.12 10.62 5.37
ii)Wireless 65.50 75.97 88.27 101.10 117.82 79.88 55.09 33.48 16.54
internet
iii)Broadband 3.87 4.38 4.90 5.52 6.22 60.72 42.01 26.94 12.68
connection(>=
256kbps
download
speed)
2.Minutes of 220 225 212.34 214.23 226.58 2.99 0.70 6.71 5.76
use(Dial up
internet)(MO
U/Sub/Month)
3.ARPU(Dial 220 225 213.08 221.97 236.47 7.49 5.10 10.98 6.53
up
internet)(Rs/S
ubs/Month)
*Accessing internet through wireless (GSM/CDMA) networks.

Although Indian Broadband connections have doubled in last one year, the growth rate
is still not enough. With a country population of close to 1.2 billion, 6.22 million
broadband connections is just ridiculous.

METHODOLOGY
35

CHAPTER 1: How the project has been carried out
Following figure shows an overview over the works proceed.

Methodology

Interviews, questionnaire, d
Printed Litrature iscussions, homepages
, etc.

Secondary Data Primary Data

Theory Chapter Emprical Chapter

Data Presentation

Market Potential

Analysis

Conclusion & Proposal

CHAPTER 2: Data Collection

36

As the used methodic in figure shown, there are two types of data; primary and
secondary data.

Primary data

In this project primary data has been collected by:

Interviews with existing internet users for collecting of background information
such as: products explanation; market situation in Burdwan, Durgapur, Asansol;
and contact information for distributors.

Deep going discussions have been done with Vodafone´s representatives in the
investigated markets to apply information and further discussions after the
questionnaires.

Questionnaires have been used for extracting information from representatives
and distributors about internet usage. The questionnaires are used to get exactly
and comparable answers in questions.

Primary data has given answer in following questions in each of the studied markets:

Competitors name and position

Customers and the different segments they belongs.

Awareness of internet data cards and awareness of Vodafone‟s product.

Technology used for internet connections.

Perception of potential customers towards internet data card.

Secondary data

Printed literatures are used to get relevant theories for this Project. Printed
literatures are articles and books in telecom sector and marketing.

Homepages are used for information about competitors, features of different
companies data cards, tariff plans and price of different products.

37

Secondary data has given answer in following questions in each of the studied markets:

Information about competitors

Information about features and different products of the competitors.

Information about tariff plans and prices of data cards.

Information about different technologies used to connect internet.

Information about indian telecom sector.

Information about the current scenario.

CHAPTER 3: STATISTICAL MODELS USED

38

The statistical models and analysis methods which are used in this project are as
following:

 Chi-square test (χ2 test)

Chi square distribution is an important contineous probability distribution, first
formulated by Helmert and then discovered by Karl Pearson.

 ANALYSIS OF VARIANCE

Analysis of Variance (ANOVA) can be used to test for the equality of three or
more population means using data obtained from observational or experimental
studies.

 NORMAL DISTRIBUTION (z test)

Normal distribution is an important contineous probability distribution having
two parameters m and σ. Normal distribution plays a very important role in
Statistical theory and , in particular, in Sampling theory.

39

Objectives of the project

The objectives of this project is to find the answers to following questions:

1. What is the current situation in the market of Internet Data Cards at Asansol,

Durgapur & Burdwan?

2. Is there any significant difference between the markets?

3. What is the total market potential of these three markets?

4. What are the different segments in the market that uses Internet Data Cards.

5. The awareness of internet data card in the market and the awareness of

Vodafone‟s data card in the market.

6. Who are the competitors of Vodafone?

7. What people are paying for using internet?

8. What type of technology is more preferred to connect internet?

9. How potential customers perceive towards the internet data card?

40

About the data card

A data card is a modem which can be connected to the PCs or Laptops any where any
time to get connected with the internet. A data card comes with different verities and
models, some of the models of data cards of different service providers are mentioned
below.

Table shows different companies in data card business, their products and their prices.

Company Product Name Technology Price in Rs.
Used
Vodafone Vodafone Mobile Connect Edge PCMCIA 6499/-
Data Card
Vodafone Mobile Connect USB USB 2599/-
Modem

Vodafone Mobile Connect 3G USB 5499/-
USB stick( Broadband)
BSNL Huawei - EC 321 USB 2800/-
BSNL EVDO (Broadband) USB 7500/-
TATA Plug 2 Surf photon USB 2499/-
INDICOM
Plug 2 Surf photon whiz USB 2249/-
Data for laptops PCMCIA 2499/-
Photon+ (Broadband) USB 3500/-
Reliance Net Connect MG880 USB Modem USB 2490/-
Huawei EC-121 USB Modem USB 2500/-
Net connect PCMCIA Card PCMCIA 2500/-
Net Connect Broadband plus USB 3500/-
(Broadband)
Airtel USB Modem USB 2999/-

41

A DATA CARD OF USB TECHNOLOGY

A PCMCIA CARD

A BROADBAND DATA CARD OF USB
TECHNOLOGY

42

ANALYSIS AND RESULTS

CHAPTER 1: MARKET POTENTIAL ANALYSIS

I made a survey on the different outlets of the companies selling data cards; I asked
them, on an average how many data cards were sold by them in a month? Then we got
the following results:

Survey report of Burdwan

Company Units/pm Average
Reliance 250-300 275
Tata Indicom 200-250 225
Bsnl 300-350 325
Airtel 05-010 7.5
Vdafone 15-20 17.5
Total market potential 850

Survey Report of Durgapur

Reliance 375-400 387.5
Tata Indicom 350-400 375
Bsnl 400-450 425
Airtel 05-010 7.5
Vdafone 25-30 27.5
Total market potential 1222.5

Survey Report of Asansol

Reliance 300-350 325
Tata Indicom 350-375 362.5
Bsnl 400-450 425
Airtel 05-010 7.5
Vdafone 15-20 17.5
Total market potential 1137.5

43

Total market potential of Asansol, Durgapur & Burdwan is calculated by summing up
the average monthly sale by each company in these areas.

Company Units/pm
Reliance 987.5
Tata Indicom 962.5
Bsnl 1175
Airtel 22.5
Vdafone 62.5
Total Market Potential 3210

The result what we got is an average of 3210 units of data cards sold in the market of
Burdwan, Durgapur & Asansol.

44

CHAPTER 2: DEVELOPMENT OF HYPOTHESIS AND ITS TESTING

What is a Hypothesis?

A hypothesis is the assumption that we make about the population parameter. This can
be any assumption about a population parameter not necessarily based on statistical
data.

Development of Hypothesis:

There is no significant difference in the market potential of data cards at Burdwan,
Durgapur and Asansol markets.

H0 : The market potential remains same with respect to the cities across the competitive
brands.

H1 : There is a variance in the market potential with respect to the cities across the
competitive brands.

To test this hypothesis I have used Two Way ANOVA, as it is a Bivariate Analysis.

ANOVA TABLE

Source of Sum of squares(SS) D.F Mean Variance ratio
variation Square(MS)
Between cities 1.32 2 0.66
F1 = 0.20/0.66 = 0.30
Between 40.85 4 10.21
companies
F2 = 0.20/10.21 = 0.01
Residual(error) 1.63 8
Total 43.80 14

Conclusion table

D.F Level of F – observed F - tabulated Status of
significance Hypothesis
V1=8, V2 =2 5% 0.30 19.4 H0 Accepted
V1= 8, V2=4 5% 0.01 6.04 H0 Accepted

45

Decision: We accept the Null Hypothesis because we found out that there is no
significant difference among the competitive brands and the market potential of data
cards at Burdwan, Durgapur, Asansol.

Interpretation

From the above analysis, it was found that the market potential of Asansol, Durgapur,
and Burdwan does not very much, one of the reasons of this stability is that these three
towns are well developed, and presence of reasonable number of colleges offering both
professional and educational courses, especially private colleges offering professional
courses are involving technology as a part of their programme. Colleges providing free
laptops to the students, classroom teaching with help of power point presentations, etc
is some of the examples of adaptation of technology, and this young generation is very
much aware and adaptable towards the internet technologies, they use internet as a
medium to gather knowledge, for entertainment purposes etc. Again, these three towns
are rich in industry also and today as we all know industries are being globalized, so
there is a need for continuous connectivity, concepts like virtual offices, e banking,
online transactions etc are getting popular day by day. All this become have become
possible because of technology of Internet. As a product of FMCG category, the masses
are taking this product very consciously and the trial purchase of this product is very
high.

1. Development of hypothesis

There is a difference in the preference of different technologies used to connect internet.

H0 = All the different types technologies used to connect internet are equally preferred
by the customers.

H1 = All the different types of technologies used for connecting internet are not equally
preferred.

To test this hypothesis we did Chi-square test for Goodness of fit.

Sample size = 220

Value of χ2 d.f Level Tabulated value Status of
observed Hypothesis

29.56 3 5% 7.815 H0 Rejected

46

Decision: We reject the Null Hypothesis because we found out that the different
technologies used for connecting internet are not equally preferred.

Interpretation

In the research, it discovered that there are different types of technologies used by the
users of internet for internet connectivity. A simple landline connection attached with a
modem is traditionally used for internet connectivity; Bsnl is the market leader in this
type of technology. The data transfer speed in this type of technology is also very high,
comparing to other technologies available. Now days Multimedia mobile phones are
very popular among the masses, and all the telecom service providers both GSM and
CDMA are providing GPRS connections at a cheap rate. These mobile phones can be
connected to the PC‟s or Laptops for browsing internet, and this type of technology is
popular because of multiple usability of mobile phone and cheap tariff plans. The other
type of technology for connecting internet is Data Cards. Data Cards are USB modems
or PCMCIA modems which can be connected with the PC‟s (only USB one) and
Laptops (both USB and PCMCIA) through USB slot and laptops supporting PCMCIA
card slot for internet connectivity. With the introduction of 3G and Broadband service
in this technology the speed of browsing internet has increased drastically from 153.6
kbps to 3mbps and more. The biggest advantage of this type of technology is its
mobility, the user can connect internet anywhere till the time he/she is in the coverage
area of the service provider. The data card can also be used for receiving, sending SMS,
making, and receiving voice calls etc. The next type of technology used for internet
connectivity is cable connections or fiber optic cable connections provided by the local
service providers. This service is cheap and getting popular day by day with new
companies entering this segment.

2. Development of hypothesis

A significant relationship exists between the types of technologies used in internet
connections with the nature of occupation.

H0 = The types of technologies used to connect internet are independent of the
occupation categories.

H1 = The types of technologies used to connect internet are dependent of the different
occupation categories.

To test this Hypothesis we did Chi-Square test for Independence of attribute.

Sample size = 220

47

observed Hypothesis

11.263 6 5% 12.59 H0 Accepted

Decision: We accept the Null Hypothesis because we found out that different
technologies like data cards, mobile phones, landline phones, etc used for internet
connectivity are independent of occupation categories like students, jobholders and
businesspersons‟.

Interpretation

The research discovered that different technologies used to connect internet such as
Data cards, mobile and landline phones, cable connections etc are independent of
occupation categories, it means that there is no specific preference of a particular
technology by any specific occupation segment such as students, jobholders and
businesspersons. The preference of the technology depends on different factors. For
example, students continuing their studies from home probably opting for a landline or
cable connection, because of its low cost and low maintenance factors, while students
residing in rented apartments or hostels probably opting a Data card or Multimedia
mobile phone because of its mobility factor. In the same way jobholder who does, not
have to travel constantly opts for a fixed connection, and executives with constant
mobility chooses a Data card or Mobile phones to connect internet.

3. Development of Hypothesis:

A significant relationship exists between the types of technologies used for internet
connections with different categories of students.

H0 = The types of technologies used to connect internet are independent of the students
categories.

students categories.


Sample size = 59

48

observed Hypothesis

3.243 3 5% 7.81 H0 Accepted

Decision: We accept H0 Hypothesis because we found out that the technologies used
for connecting internet are independent of different categories of students such as
students of educational and professional courses.

Interpretation

The students are divided into two segments i.e., students perusing their professional
courses and students perusing their educational courses. The use of internet in the
educational course is less but it is constantly raising, where as the use of internet in
educational courses is very high. However, as the younger generation is very much tech
friendly, a PC or laptop has become a household product. It hardly matters anything for
a student what course he/she is perusing, they use internet for entertainment,
downloading, collecting information about different things, chatting, browsing etc. In
this, case the technology for connecting internet not at all dependent of student‟s
categories.


connections with different job categories.

H0 = The types of technologies used to connect internet are independent of the different
job categories.

job categories.


Sample size = 71

observed Hypothesis

3.32 6 5% 12.59 H0 Accepted

49

for connecting internet are independent of different categories of jobs such as private
jobs, government jobs and public sector jobs.

Interpretation

Jobs are divided into three categories here i.e., private jobs, public sector jobs and
government jobs, and internet is used greatly in this entire sector. Now the companies
are being globalised and all the processes are using online systems to operate, the
technology used for internet connection plays a significant role. The nature of the
internet connection depends on the profile of the job not on the category of the job.
Executives with fixed offices prefer fixed connections and executives with more
mobility prefer Data cards and mobile connections.


connections with different types of businesses.

H0 = The types of technologies used to connect internet are independent of the different
types of businesses.

types of businesses.


Sample size = 90

observed Hypothesis

2.764 6 5% 12.59 H0 Accepted

for connecting internet are independent of different types of businesses such
showrooms, franchisees, and other types of businesses.

50

Interpretation

In this, research the businesses are divided into three categories i.e., the showrooms,
franchise and other types of businesses. Now days the online billing is getting
popularizing, most of the big showrooms and franchise are adapting this technique, by
this way the companies‟ gets information about their products performance in the
market, sales figures and other valuable information‟s. So it is important for the
franchise, showroom and other types of businesses to get connected with the server of
the companies and for that they need an internet connection, the type of connection
depends on the nature of the business, for regular transactions most of the time a fixed
connection is preferred. However, it s observed in the research that other types of
connections are also used.

6. Development of Hypothesis

There is a difference in the preference of service providers of internet connections in the
market.

H0 = All the different service providers of internet connections are equally preferred in
the market

H1 = All the different service providers of internet connections are not equally
preferred.


Sample size = 220

observed Hypothesis

47.98 5 5% 11.07 H0 Rejected

Decision: We reject the Null Hypothesis because we found out that the service
providers who are providing internet connections are not equally preferred.

Interpretation

The telecom companies present in the market provide the internet services. Some of
these companies like BSNL, Airtel, Tata indicom, Reliance are giants in this business,
and have established a good customer base. All these companies provide internet

51

connections through GPRS services, Data cards, fixed line connections and 3G.
Vodafone is comparatively new in this business but Vodafone is providing GPRS
services in the past also, but they are expanding now. The user of internet prefers the
service providers based on their requirements, such as tariff plans, net speed, network
quality etc, and different service providers specializes in different areas. Therefore, the
service providers are not equally preferred in the market.

7. Development of Hypothesis

There is a difference among the different purpose of using internet by the internet users.

H0 = the internet users uses internet equally for all the purposes, such as work,
entertainment, business etc.

H1 = the internet users does not prefer internet equally for all the purposes, such as
work, entertainment, business etc.


Sample size = 220

observed Hypothesis

17.19 3 5% 7.81 H0 Rejected

Decision: We reject the Null hypothesis because we found out that there is a difference
in the preference of using internet by the internet users.

Interpretation

The interfere of internet in our lives is getting more and more day by day, whatever you
want you can search it on the net with sitting at the comfort of your office or home.
Online shopping, banking, hotel reservations, ticketing and many more things can be
done by using internet, it‟s just one click of your mouse away. With this huge amount of
versatility, the preference of using internet by the users also differs according to their
requirements. For example a student most preferably use internet for collecting
information and for entertainment purpose, while a businessmen can use it for online
billing, while a job holder may use internet for reporting to his/her bosses, and that is
why all the uses of internet are not equally preferred by all the classes.

52

8. Development of Hypothesis for potential customer’s perception towards
different features of data card.
i. Cost of data card: Price plays an pivotal role in the purchase of data card.
H0 = Price plays an insignificant role in purchase of data card.
H1 = Price plays a significant role in purchase of data card.
ii. Installation of data card: Installation process of data card plays an important
role in the purchase of data card.
H0 = Installation process of data card does not play an important role in the
purchase.
H2 = Installation process plays an important role in the purchase decision.
iii. Durability of data card: Durability is an important feature, which the buyer
considers at the time of making purchase.
H0 = Durability of data card does not bothers the buyers purchase decision.
H0 = Durability of data card is an important factor, which affects the buyers
purchase decision.
iv. User friendliness: User friendliness of the product is an important factor for
purchasing the data card.
H0 = User friendliness plays an insignificant role in the purchase of data card.
H1 = User friendliness plays a significant role in the purchase decision of data
card.
v. Tariff plans: Tariff plans play a pivotal role in the purchase decision.
H0 = Tariff plans are not given much importance at the time of purchase.
H1= Tariff plans plays an important role at the time of purchasing the data
card.
vi. Speed of Internet: Speed of the internet provided by the service provider
plays an important role in the purchase decision of the data card.
H0 = Speed of the internet plays an insignificant role in the purchase.
H1 = Speed of the internet plays a significant role in the purchase of data card.

53

vii. After sales service: After sales service plays an pivotal role in the purchase of
data card.
H0 = After sale service is not an important factor of purchase decision.
H1 = After sale services plays an important role in the purchase decision of
the data card.
viii. Image of the company: image of the service provider plays a pivotal role in
the purchase of the data card.
H0 = The image of the company plays an insignificant role in the purchase of
the data card.
H1 = The image of the company plays a significant role in the purchase of the
data card.
The table below shows the perception of internet users towards different factors.
Feature Gran Hypothesi Stander Test Observe Tabl Status of
d s d error Statistic d value e hypothesi
mean of x s apply of Z value s
ztest(tw at
o tailed) 95%
Price 3.76 H0 : µ = 3 0.07 3.76 – 3 10.85 1.96 H0
H1 : µ ≠ 3 /0.07 Rejected
Installatio 3.80 H0 : µ = 3 0.07 3.80 – 3 10.81 1.96 H0
n H1 : µ ≠ 3 /0.07 Rejected
Durability 3.94 H0 : µ = 3 0.073 3.94 – 3 12.87 1.96 H0
H1 : µ ≠ 3 /0.073 Rejected
User 4.08 H0 : µ = 3 0.064 4.08 – 3 16.87 1.96 H0
friendly H1 : µ ≠ 3 /0.064 Rejected
Tariff 3.81 H0 : µ = 3 0.07 3.81 – 3 11.57 1.96 H0
Speed 4.12 H0 : µ = 3 0.06 4.12 – 3 18.66 1.96 H0

54

After sale 3.50 H0 : µ = 3 0.07 3.50 – 3 7.14 1.96 H0
service H1 : µ ≠ 3 /0.07 Rejected
Company’ 3.31 H0 : µ = 3 0.08 3.31 – 3 3.87 1.96 H0
s image H1 : µ ≠ 3 /0.08 Rejected

Interpretations

1. Price of the data card: In this research, it is discovered that price of the Data card
is playing an important role in the purchase decision of the customer; Data cards
with high prices are less preferred. BSNL is the only company in the market,
which is providing Data cards on rental basis, and it is one of the main reasons
behind BSNL‟s success. Reliance Communication and Tata Indicom is also
providing data cards at cheaper rates. Normal Data cards ranges from Rs 2000 to
Rs 3000 and 3G, Broadband Data cards range starts from Rs 3500 onwards.

2. Installation process: The installation process of data card should be simple and
can be easily understood by the user, because the user is the one who is going to
operate it with the machine, and if it is a complicated process then user might
think for other options. A user wants simplest process to get connected with the
internet, just plug in the data card and connect, if he/she needs to install some
special software‟s in the PC or Laptop for using the data card, it is not possible
for everyone to handle this installation process, so installation process plays an
pivotal role in the purchase decision.

3. Durability: Purchasing a Data card is mostly a long-term investment, so a Data
must have to be durable enough to meet the requirements of the user. A Data
card should not get over heated while in use, should be made up of un-breakable
plastic are some features of durable Data card.

4. User Friendly: A Data should be user friendly in operations. Apart from
connecting internet, Data cards comes with multiple features such as receiving

55

and sending SMS, making and receiving voice calls, etc, so all these functions
should be easy to operate, if it is little complicated it becomes a hassle for the
user and ultimately affects the purchasing decision.

5. Tariff Plans: Apart from the price of the Data, card how much the internet
service is costing to the pocket of the user is very important factor in the
purchase of any Data card. A internet user wants tariff plans which fits into
his/her budget and fulfills all the other requirements. Again BSNL is the market
leader in this segment with cheapest tariff plans and after that Reliance and Tata
Indicom comes.

6. Net Speed: The internet speed is very important for the users and slow internet
is not at all preferred in our fast moving lives. With the introduction of
Broadband and 3G in the market of Data cards, the competition has got even
tougher. Customers prefers internet with good downloading speed.

7. After Sale Service: After sales service like sending bills on time, keep the
customers updated with the new developments in different areas etc improves
the chances of increasing the sale of data card, and plays an important role in the
purchase decision of the customer also.

8. Image of the company: The goodwill created in the market through years of
providing superior service quality helps the company to sale its products,
because it‟s the image of the company in the minds of the customer who is going
to purchase the data card. If the brand is trusted in the market, it makes a
positive impact on the purchase decision.

56

Conclusions & recommendations

On our research, we have found out the followings:

1. Vodafone is not actively promoting its Data card products in the market, that‟s
the reason awareness about Vodafone‟s data card is very low, at the same time
awareness about the data cards in the market cannot be said bad, around 39% of
the respondents are aware of data cards.
2. Vodafone emphasizes on its high quality service, but the price at which they are
providing the services is a bit too high.
3. Vodafone mainly focusing on a niche segment in the market, i.e., they target
working professionals, executives, etc who needs to travel more frequently and
required to be connected with internet all the time.
4. We found out in the survey that, maximum of the population is using either
mobile phones or landline phones to get connected to the internet, the reason
behind this are :
 Cheaper tariff plans.
 Low installation cost.
 Multiple usability.
5. There is a strong competition between Bsnl, Reliance, Tata indicom and Airtel,
they have 30%, 21%, 17%, 15% market share respectively in our survey. It
establishes the fact that they have a good customer base and all four companies
are old players in the field of providing internet services, so it is not going to be
easy for Vodafone to crack the customer base of theirs.
6. Airtel and Bsnl have their expertise in providing internet connections through
mobile phones, landline connections and WLL phones. They are having a good
signal strength and network support in almost every villages and towns, as the
service is good Airtel charges a high tariff but at the same time Bsnl charges the
lowest tariffs. For Vodafone they lack in both, their tariffs are high and not have
strong coverage also.
7. Maximum of the population, those who are using internet are using it for an
average of 30 hrs in a month, and they spend on an average around Rs. 350 a
month on it, so there is a need for low cost service, which Vodafone presently is
not providing.
8. We asked to the respondents, who are having internet connections, what will be
the important factors for you while choosing a data card, as you are already

57

using an internet connection, the respondents gave more emphasis on the price
of the data card, the tariff plans and the speed of the internet. Vodafone lacks in
price of the data card and the tariff plans, its price & tariffs are high but its speed
it reasonably good. But because of providing data cards on rental basis and
lowest tariff plans Bsnl is the leader, then Reliance communication comes with its
cheaper data cards and attractive tariff plans and with reasonable speed, and
after that its Tata indicom with almost the same services as Reliance offers.
9. The market is having great potential and scope for development, as the use of
internet is increasing day by day and computers have become a part of our lives,
in the same way an internet connection is becoming necessary.
10. The companies are targeting students both educational and professional courses
(as courses are becoming more technology based), job holders (needs to be
connected with their offices) and show rooms (now online billing is started),
Vodafone needs to enter in new segments of the markets.
11. Vodafone is having a very strong product, but due to high prices and lack of
promotion its lagging behind.

Strategic recommendations

Following recommendations are essential for success in the future:

1. Vodafone should look to explore new segments in the market.
2. They have to be more prices competitive, as the competitors are charging low
prices, Vodafone cannot succeed with its high price tag, and they have to offer
more value for money product.
3. Vodafone should actively promote their products, as the other companies are
doing; they have to make aware of their products to the masses.
4. Vodafone is a multinational company; they should use their goodwill to capture
the market.

58

CHAPTER 3: GRAPHS AND CHARTS

1. Age of respondents

Age of respondents
250
200 235
150 190
100
50 105
70
0 No of Persons

total = 600
We went to 600 respondents (200 each from Burdwan, Durgapur, Asansol) and
asked them about there age. Maximum of the respondents were between the age
of 18-35

2. Occupation of the respondents

occupation of
respondents
400
300
200 290
220
100 No of Persons
90
0
Student Service Business
men
total = 600
We asked the respondents what they do?around 49% of the respondents were
students, from both professional and educatonal courses, around 36% were job
holders from different sectors like government sector, private sector etc, and the
remainig 15% were Business mens, they are showrooms, frenchaisis etc.

59

3. Have to a PC or Laptop?

Have a PC or
Laptop
400
300
340
200 260 No of
100 Persons
0
Yes No
total = 600
We asked the respondents that they are having or using a PC or Laptop? Around
57% of them out of 600 said yes they have or they use. This figure shows that a
computer is still not available in each home. Despite of goverments efforts the
results were not satisfactory.

4. Have internet connection or not ?

Have internet
connection
250
200
220
150
100 No of Persons
120
50
0
Yes No
total = 340
If the avalability of the computer is low, then the probability of having an
internet connection connected to it getting more less, this fact shows that only
64% out of 340 are connected to the internet and maximum of them are through
GPRS or GSM connections or through landlines.

60

5. Aware of data card or not?

Awareness of data
card
400

300 350

200 250 No of
100 Persons

0
Yes No
total = 600
The awareness about the data card is also low in the market, only 39% of
respondents out of 600 were aware of data cards, inspite of random advertisment
there is a lot more to be done, we need to educate our potential customers more
about the product.

6. Type of internet connection used by the respondents

Kind of internet connection
90
80
70 78
72
60
50
40
30 37 No of Persons
33
20
10
0
Data card Use mobile Use landline Other type of
phone to connection connections
connect to connect
total = 220
From the respondents who are having internet connection we asked them what
kind of connection they use? The maximum were in favour of Multimedia
Mobile phones connection through GSM/CDMA connections, and through
landline connections. Only 17% out of 220 uses data cards to connect internet.

61

7. Purpose of using internet.

Purpose of useing internet
80
70
60 74
50 63
40 51
30
20 32
10
0 No of Persons

total = 220
The purpose of using internet also indicates the requirement of internet. Internet
is becoming a part of our lives now days, job holders needs to be connected with
there offices (positioned globally) all the time. Students gets huge amount of
information on different subjects and topics from internet. Now days online
billing is getting popular, so all the showrooms, shops, franchisies needs to be
connected with the companies server all the time, and the companies gets instant
information about the sales position and revenue detatils. Internet is also used
for entertainment purpose, like chating, gaming, blogging ets, nowdays the
social networking sites like orkut.com, facebook.com, ets are very popular.

8. Awareness of Vodafone‟s Data card.

Awareness of
Vodafone data
card
600
500
543
400
300 No of
200 Persons
100 57
0
Yes No
total = 600
The awareness of Vodafones data card is very low in the market, its only 9.5% of
the total sample, the main reason behind this was because Vodafone doesnot
62

promote its products actively like others. Vodafone is having world class
poducts, but due to lack of promotion the awareness is very low.

63

Annexture
QUESTIONNAIRE

1. What is your Age?_______________________
2. Your occupation?
a. Student
b. Service holder
c. Business men
3. Do you use PCs of Laptop?
a. Yes
b. No
4. If you have a PC or Laptop then, do you have an internet connection on it?
a. Yes
b. No
5. Are you aware of internet data cards?
a. Yes
b. No
6. If you have an internet connection, then what kind of connection do you have?
a. Data card
b. Use mobile phone to connect to the internet
c. Use landline connection to connect to the internet
d. Other types of connections
7. If you have an internet connection, then which service provider is providing you this service?
a. BSNL
b. Reliance Communication
c. Tata indicom
d. Vodafone
e. Airtel
f. Others
8. In a month, on an average how many hours do you use internet?
a. 10 hrs to 15 hrs or >500 MB
b. 15 hrs to 30 hrs or 500 MB to 1 GB
c. 30 hrs to 45 hrs or 1 GB to 2.5 GB
d. 45 hrs & above or 2.5 GB and above
9. If you use internet regularly, then what is your average monthly expenditure?
a. Between Rs 300 to Rs 350
b. Between Rs 350 to Rs 500
c. Between Rs 500 to Rs 800

64

d. Rs 800 and above
10. If you are using internet, then what is your purpose behind using it?
a. For work purpose
b. For entertainment
c. For business
d. To collect information
11. What is your initial setup cost?
a. Below Rs 1500
b. Between Rs 1500 to Rs 2500
c. Between Rs 2500 to Rs 3500
d. Rs 3500 and above
12. Suppose you want to purchase an internet data card, please rate the importance of the
following factors in selecting a data card.
Factor Not Very
Important Important
Cost of Data card 1 2 3 4 5
Installation process 1 2 3 4 5
Durability 1 2 3 4 5
User friendly 1 2 3 4 5
Tariff plans 1 2 3 4 5
Speed 1 2 3 4 5
After sale service 1 2 3 4 5
Image of the company 1 2 3 4 5

13. Are you aware of Vodafone data card?
a. Yes
b. No

65

Bibliography
Information has been sourced from namely, books, newspapers, journals, industry
portals, government agencies, industry news and developments and through access to
database.

 http://www.capitaline.com/

 http://www.wikipedia.org/

 http://www.oecd.org/

 http://www.legalserviceindia.com/

 http://www.dot.gov.in/

 http://www.economictimes.indiatimes.com/

 http://www.ibef.org/

 http://www.domain-b.com/

 http://www.trai.gov.in/

 http://www.perry4law.wordpress.com/

 http://www.financialexpress.com

 http://www.pib.nic.in/

 http://www.emeraldinsight.com/

 http://www.search.epnet.com/

 http://www.rcom.co.in

 http://www.airtelworld.com

 http://www.vodafone.in

 http://www.airtel.in

 http://www.tataindicom.com

66

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