lead in defining service as "activities, benefits or satisfaction which are offered for sale or provided in connection with sa

A PROJECT REPORT

ON

development of service marketing business in IndiaN conteXtIN THE PARTIAL FULFILLMENT OF THE REQUIREMENT OF

MASTER OF BUSINESS ADMINISTRATION (MBA) (SESSION 2009-2011) SUBMITTED TO G.B.T.U. LUCKNOW

UNDER THE SUPERVISION OF

PROF. S.K.GROVER

(Faculty of Management)

SUBMITTED BY:

Ankit SinghalM.B.A. 4th Sem.Roll No.-0911470009

GHAZIABAD

DECLARATIONI hereby declare that the project report entitled Development of Service Marketing Business in Indian Context which is submitted in partial fulfilment of the requirement of the degree of Masters of Business Administration to Gautam Buddha Technical University, is my original work and has not been submitted earlier to this or any other Institution to the best of my knowledge. The content of the report is based on second hand data and is collected from internet sources, technical journals, magazines and books. ANKIT SINGHAL MBA 2ND YEAR

(2009-2011)

PREFACEAs a part of the partial fulfilment of MBA programme at INSTITUTE OF PROFESSIONAL EXCELLENCE & MANAGEMENT, this project was undertaken under the mentorship of Prof. S.K. GROVER.As we all know SERVICE MARKETING is the trend followed by the world today. This project report helped me to go through the details of the services and service marketing in the field of Insurance and Telecommunication. While collecting the data I was able to understand the past, present and the future of the Service marketing with its objectives, benefits and the limitations.

The purpose of this study was to have the through knowledge about the past present and future of the Service Marketing in Indian context.

ACKNOWLEDGEMENTMy project dealing with the Development of Service Marketing Business in Indian Context provided me an exposure in Service Marketing. I owe gratefulness to some of the people for being present all the time whenever the help was required in completion of the report.At the outset Ill wish to acknowledge the entire staff of Institution (IPEM). Special appreciation extended to Prof. S.K. GROVER (Faculty MBA) who helped me in shaping the project and the research work.

A heart felt thanks to the staff, who helped in draft preparation of this report.

DatePlace

Ankit Singhal

TABLE OF CONTENTSCERTIFICATE

DECLARATION

ACKNOWLEDGEMENT

PREFACE

1. INTRODUCTION 1-522. OBJECTIVE 52-533. SCOPE OF THE STUDY 53-544. USE AND IMPORTANCE OF THE STUDY 54-55 5. RESEARCH METHODOLOGY 55-566. ANALYSIS and DATA COLLECTED 57-657. FINDINGS 65-668. CONCLUSION 66-679. RECOMMENDATIONS 67-6810. LIMITATIONS 68-69 11. BIBLIOGRAPHY 69-70INTRODUCTION OF SERVICE MARKETING

lead in defining service as "activities, benefits or satisfaction which are offered for sale or provided in connection with sale." This definition provides limited view of service differently in valuing the output of a society. The definition does not provide for valuing service involved in producing the tangible goods.

Philip Kotler and Boom (1984) Philip Kotler and Boom defined service as "any activities or one party can offer to another that is essentially intangible and does not result in the ownership of anything.Its production may or may not be tied to a physical product.

Lehtinen (1983) According to Lehtinen a service product is "an activity or a series of activities which take place in interaction with a contact person or a physical machine and which provides consumer satisfaction." This definition recognises the services that are provided by machines such as vending machines and ATMs, besides the services provided by the contact persons.

NOW, WHY SERVICE MARKETING USED

The basic questions that confront everyone is why should there be a separate learning on service marketing? Are the marketing concepts and techniques that are developed for the manufacturing sector not applicable to services? Do services require distinctive strategies in marketing? The answers to the questions provides the basic platform for an understanding of service marketing

A different marketing approach is necessary for service marketing, because service differ from goods in many respect. The following are the differences between physical goods and services.

Services are intangible. Goods are intangible.

Services are heterogeneous where goods are homogeneous.

Services are produced in buyer-seller interactions. Goods are produced in the factory.

Services can not be stored. Goods can be stored.

In the sale of services, transfer of ownership will not take place whereas in the case of goods it does take place.

CHARACTERISTICS OF SERVICES Services have basically six characteristics that greatly effect the design of marketing programmes. They are: Intangibility

Inseparability

Variability

Perishability Customer participation No ownership

SERVICES have increasingly assumed an important role in the economic development of many countries, are emerging as service economies or service societies. An economy is called a service economy when the contribution of the service sector to the GDP of the nation is more than 50 percent. USA was the first economy to be declared as a service economy way back in 1948 with about 53 percent contribution of the service sector to the GDP of the nation. There is an argument that the statistics of service sectors contribution in many countries is a underestimation of the truth, since the value of the service produced by manufactures of goods in the industrial sector is not included in service output value. As such, there is a large hidden service sector that is not classified under the service sector.

Services are becoming a critical source of wealth in many ways to the economies. Economies experienced increase in employment with the growth in service sector. While employment in the manufacturing sector is receding every year, employment in the service sector rising. Even in times of economic recession, unlike in the manufacturing sector, the service sector has kept employment up.

All human beings are service producers as well as consumers. We cannot imagine our life in the absence of service. Transportation, education, communication, health care, hospitality, entertainment, banking, information technology, electricity and a host of services have become a part of our lives. In fact, the concept of services as old as humankind and began when man started serving himself (self-servicing). When a part of the society became affluent, it started utilising the services of other at a price. Then services became a business proposition. Over the years, services have grown in different ways throughout the world. However, until the beginning of the20th century, the focus of the economies was to produce more and more tangible goods and sell agricultural and manufactured product. Services such as accounting, banking, insurance and transportation were considered as support to the manufacturing units.

In the beginning, throughout the world most services were in the public sector. Most organisations enjoyed the status of monopoly. The situation of excessive demand over supply and absence of competition or negligible competition led many service organisations to be insensitive to the marketing literature developed until the 1970s depicted manufacturing organisations and suggested that the same philosophies and technology be applied to the service organisations also.

SERVICE SECTOR IN INDIAN ECONOMY INDIA has been pursuing a planned approach for achieving economic growth and development. Taking stock of the situation after independence, the economists of the country developed a growth model. As a result, a planned era of developed were categorised into sectors, in the order of priorities. They are: primary sector, secondary sector and the tertiary sector. The primary sector includes agriculture, animal husbandry, fishing and forestry. The secondary sector

Covers services, including distribution. The allotment of funds and the focus to the primary sector and the next two focussed on the secondary sector. From the Sixth Five Year Plan onwards, the focus has been on the tertiary sector. As a result, the service sector started growing

The share of the agriculture sector in the GDP of the country was 57.1% in 1950-51, that is, in the beginning of the planned era. Service occupy second position with 28.6% and the contribution of industries to the GDP was 14.3%. There has been significant change. The share of agriculture has down to 24.7%; the service sector became the major contribution of industry to the GDP wad 26.4%. REASONS FOR GROWTH OF SERVICESIN INDIA

The following are the reasons for growth of service in India.

Economic Affluence Changing Role of Women

Cultural Changes IT Revolution

Development of Market

Increased Consciousness of Health Care

Economic Liberalisation

Export Potential

Service Tax KEY SERVICE BUSINESSES IN INDIA

In order to provide a better understanding on the development of services in India and their significance in the economic prosperity of the country, a brief description of the following key services is presented.

Insurance

Transport

Telecommunications

Software

Electricity

Postal services

Tourism

INSURANCE

In India, the insurance business started the beginning of the 19th century. Marine insurance was the earliest form of insurance that was transacted in India. Marine insurance was followed by fire insurance. Many foreign companies established their branches in India, looking at the business prospects. In 1907, the India Mercantile Insurance company was established as the first company in the Indian origin. The nationalisation of insurance business was a major milestone in the development of insurance business in India. The life insurance business was nationalised in 1956 by taking over 245 private insurers business. The General Insurance Corporation (GIC) was established in 1972 by taking over the business of 107 insurers. The GIC has four subsidiaries, namely National Insurance, Oriental Insurance, New India Assurance and United India Insurance. Apart from Life Insurance Corporation (LIC) and GIC are the most popular insurance companies in life and non-life insurance business respectively. These two companies with a well-defined market system and distinguished portfolio occupy the mega market share in the total insurance in India.

In the absence of competition from the private sector, the insurance business in India has not grown to its potential. As per the findings of the Malhotra Committee, Insurance organisation have achieved only 22% market coverage. Indian insurance market accupies 23rd position in the world insurance market, representing a poor 0.34% (1988). The insurance market in India is underdeveloped. Out of one billion people in India, only 35 million are covered by insurance

India is now recognised as a fast emerging market for insurance. The Indian insurance market is expected to be 25 billion $ in 2010 on an assumption of 9.7% real annual growth in the GDP. With the passing of the IRDA Act in 2000, the insurance market in India has been opened to the private sector. As a result, as many as 34 insurance companies entered the market, in collaboration with foreign companies by the end of 2002-03. The market has now have become highly competitive and challenging.

The LIC is the biggest personal insurance company in India. It has 7 zonal offices. 100 divisional offices and 2008 branch offices and 2008 branch offices spread all over the country. The agency network of the corporation is considered the biggest and also the strongest. The business of the company has grown significantly over the years. In 1956, the company has grown significantly over the years. In 1956, the company made a business of Rs. 1200 crores. By the end of 1999, the volume of business rose to Rs. 20,000 crores and is expected to increase to Rs. 1,40,000 crores by 2010.

The GIC has a network of 4200 offices spread across the country. Its business has increased from Rs. 185 crores in 1972 to Rs. 9,158 crores in 1999, recording a 50 times growth. Some important definitions used in the project:Before starting my project on life insurance I had to know what is life insurance, what are the merits of life insurance why person need it and who can buy life insurance policy, as we meet any persons for making him an advisor these are basic question people ask as they are not much aware of these things.What is Insurance?It is used with reference to financial protection against a possibility, such as fire, accidental damage, theft, or medical expenses: motor insurance, house hold insurance, travel insurance, health insurance. Insurance is the protection of life and assets against unforeseen circumstance.

It ensures protection of economic value of asset.

It is a social security tool

It is a risk transfer mechanism.

The insurance institute of India was established in 1955 for the purpose of imparting insurance education to persons engaged or interested in insurance. The institute conducts written examinations at various levels and arranges tuition services, both oral and postal.Mechanism: -

The basic mechanism of insurance works with the principle where people exposed to the risks come together and pool funds to protect each and individual against risk. Therefore, risk is spread out .The insurance companies collect money in advance and creates a fund from which losses are paid.

Risk is defined as the possibility of adverse results flowing from any occurrence. Insurance reduces the impact of risk on the owner and those who depend on the asset .It must however be noted that, only economic or financial losses can be compensated. For example, the emotional support that the breadwinner provides can neither be evaluated nor compensated. However, the financial support can be evaluated and compensated.Why Insurance? or Need For Insurance

The need for insurance comes from the need to safeguard our family. If you care for your familys needs you will definitely consider insurance. Today insurance has become even more important due to the disintegration of the prevalent joint family system, a system in which a number of generations co-existed in harmony, a system in which a sense of financial security was always there as there were more earning members. Times have changed and the nuclear family has emerged. Therefore you need to save a part of income for the future too.a) Temporary needs / threatsThe original purpose of insurance remains an important element, namely providing for replacement of income on death etc.

b) Regular Savings / Family ProtectionProviding for one's family and oneself, as a medium to long term exercise (through a series of regular payment of premiums). This has become more relevant in recent times as people seek financial independence for their family.c) Investment

Put simply, the building up of savings while safeguarding it from the ravages of inflation. Unlike regular saving products, investment products are traditionally lump sum investments, where the individual makes a one off payment.

d) Old age provisionProvision for later years becomes increasingly necessary, especially in a changing cultural and social environment. One can buy a suitable insurance policy, which will provide periodical payments in one's old age.

e) Children benefit

Provision for the education, marriage and start in life for the children.

f) Special needs provision

Protection against loss arising out of accident, disability, sickness, loan repayment on death.

Who can buy an insurance policy? Any person above 18 years of age, who is eligible to enter into a valid contract, can go for an insurance policy.

Role of insurance in economic development: -

Insurance premium collected by insurance companies are invested in various development projects. They provide the much needed cash for economic development and growth. LIC (Life Insurance Corporation of India) used this money to invest in infrastructure development e.g. housing loans, sewage systems and electricity.

Role of insurance in nation building: -

Insurance benefits society by:-

Providing relief to the insured from any mishap.

Reducing the burden of the government in providing relief to old citizens.

Placing large sums of money at the disposal of the government for development of the economy.

Insurance company operations: -

The process of creating a product, making it available to consumers, ensuring customer satisfaction is integral to an insurance company.

Creating the product: -

The functional areas that are involved in the creation of a product are: -

1. Actuarial.

2. Accounting.

3. Marketing & Information systems.

4. Agents, brokers & sales representatives.

5. Underwriting.

8. Claim administration.

The creation of a product involves the following stages: -

1. Idea generation.

2. Comprehensive business analysis.

3. Technical designing.

4. Implementation.

5. Product introduction.

6. Sales monitoring and review.There are two different branches of insurance: -

Life insurance.

Non-life or General insurance.

Life Insurance: -

A policy that will pay a specified sum to beneficiaries upon the death of the insured.

Or

An agreement that guarantees the payment of a stated amount of monetary benefits upon the death of the insured.

Life insurance is nothing but a contract with an insurance company under which the insured (purchaser) pays a premium in exchange for coverage of specified losses. It insures the life of a person. Human life is an income-generating asset. This asset can be lost through unexpected death or made non-functional through sickness or disability caused by an accident. There is no certainty that an accident will happen. On the other hand there is a certainty that death will happen, but its timing is uncertain.

Life insurance is a branch of insurance in which compensation is made available to designated survivors of a deceased person, or to a person on their own survival after a fixed term of years, in return for payments, or premiums. Life assurance is based on the mathematics of probability, which determines the level of premium to be paid, and on compound interest, which determines the growth over time, through investment, of the fund constituted by the intake of premiums. The two together ensure an adequate fund to provide the compensation required.Is life insurance a saving instrument? Life insurance is mainly considered as a saving instrument rather than an investment avenue as it promotes compulsory savings besides reducing tax burden on the policyholder. It is the only saving instrument, which covers the life risk besides giving tax concession both at entry (premium paid) and at exit points. The section 10 (D) of the income tax act totally exempts payment of tax on any amount received as bonus against life insurance policies.

Life Insurance:

Does not protect the asset.

Does not prevent its loss.

It is not a contract of indemnity.

Only economic or financial losses can be compensated not emotional support.

Four main types of insurance policies: -

Term assurance (Only in the term).

Whole-life assurance (Whole-life).

Pure endowment (Only on the survival of the selected term).

Annuity. (A form of pension in which an insurance company makes a series of periodic payments to a person (or) his dependents over a no. of years. (Term) in the return for the money paid to the insurance company either in a lump sum (or) in instalments.

Non-Life (Or) General Insurance: -

It insures everything except life.

i.e. vehicle, electronic, furniture, medical, home (or) building, industry etc.LIFE INSURANCE INDUSTRY IN INDIAMany may not be aware that the life insurance industry of India is as old as it is in any other part of the world. The first Indian Life Insurance Company was the Oriental life Insurance Company, which was started in India in 1818 at Kolkata. A number of players (over 250 in life and about 100 in non-life) mainly with regional focus flourished all across the country. However, the Government of India, concerned by the unethical standards adopted by some players against the consumers, nationalized the industry in two phases in 1956 (life) and 1972 (non-life). The insurance business of the country was then brought under two public sector companies, Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC).INSURANCE SECTOR REFORMS

In 1993, Malhotra Committee headed by former Finance Secretary and RBI Governor was formed to evaluate the Indian industry and give its recommendations. The Malhotra committee was set up with the objective of complementing the reforms initiated in the financial sector.

The reforms were aimed at creating a more efficient and competitive financial system suitable for the requirements of the economy keeping in mind the structural changes currently underway and recognizing that insurance is an important part of the overall financial system where it was necessary to address the need for similar reforms

The committee came up with the following major provisions:-

Private Companies with a minimum paid up capital of Rs. 1 bn should be allowed to enter the industry.

Foreign companies may be allowed to enter the industry in collaboration with the domestic companies.

No Company should deal in both Life and General Insurance through a single entity.

Reforms were initiated with the passage of Insurance Regulatory and Development Authority (IRDA) Bill in 1999. IRDA was set up as an independent regulatory authority, which has put in place regulations in line with global norms.

CURRENT STATUS OF INSURANCE MARKET IN INDIA

The Life Insurance market in India is an underdeveloped market that was only tapped by the state owned LIC till the entry of private insurers. The penetration of life insurance products was 19 percent of the total 400 million of the insurable population. The state owned LIC sold insurance as a tax instrument, not as a product giving protection. Most customers were under- insured with no flexibility or transparency in the products. With the entry of the private insurers the rules of the game have changed.

The 16 private insurers in the life insurance market have already grabbed nearly 9 percent of the market in terms of premium income. Innovative products, smart marketing and aggressive distribution, that's the triple whammy combination that has enabled fledgling private insurance companies to sign up Indian customers faster than anyone ever expected. Indians, who have always seen life insurance as a tax saving device, are now suddenly turning to the private sector and snapping up the new innovative products on offer.

Saturation of markets in many developed economies has made the Indian market even more attractive for global insurance majors. With the per capital income in India expected to grow at over 6% for the next 10 years and with improvement in awareness levels, the demand for insurance is expected to grow at an attractive rate in India.

Market Expansion:

There has been an overall expansion in the market. This has been possible due to improved awareness levels thanks to the large number of advertising campaigns launched by all the players. The scope for expansion is still unlimited as virtually all the players are concentrating on large cities and towns except by LIC to an extent there was no significant attempt to tap the rural markets.

New Product Offerings:

There has been a plethora of new players, mainly from the stable of their international partners. Customers have tremendous choice from a large variety of products from pure term insurance to unit-linked investment products. Customers are offered unbundled products with a variety of benefits as riders from which they can choose. More customers are buying products and services based on their true needs and not just traditional money-back policies, which are not considered very appropriate for long-term protection and savings.

Customer Service:Not unexpectedly, this was one area that witnessed the most significant change with the entry of new players. There is an attempt to bring in international best practices in service and operational efficiency though use of latest technologies. Advice and need based selling is emerging through much better trained sales force and advisors. There is improvement in response and turnaround times in specific areas such as delivery of first policy receipt, policy document, premium notice, final maturity payment, settlement of claims etc.

Distribution Channels:

Till date insurance agents still remain the main source through which insurance products are sold. The concept is very well established in the country like India but still the increasing use of other sources is imperative. It therefore makes sense to look at well balanced, alternatives channels of distribution.

LIC has already well established and have an extensive distribution channel and presence. New players may find it expensive and time consuming to bring up a distribution channel to have an advantage.

At present the distribution channels that are available in the market are: Direct Selling Corporate Agents Group Selling Brokers and Cooperative Societies BancassuranceTo make all these channels a success the companies have to be very alert and skillful to know how to use these channels in a proper way. Bancassurance is one of the most upcoming channels of distribution.

THE INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY

Reforms in the Insurance sector were initiated with the passage of the IRDA Bill in Parliament in December 1999. The IRDA since its incorporation as a statutory body in April 2000 has fastidiously stuck to its schedule of framing regulations and registering the private sector insurance companies.

The other decisions taken simultaneously to provide the supporting systems to the insurance sector and in particular the life insurance companies, was the launch of the IRDAs online service for issue and renewal of licenses to agents.

The approval of institutions for imparting training to agents has also ensured that the insurance companies would have a trained workforce of insurance agents in place to sell their products, which are expected to be introduced by early next year.

Since being set up as an independent statutory body the IRDA has put in a framework of globally compatible regulations. In the private sector 16 life insurance and 10 general insurance companies have been registered.

Section 14 of IRDA Act, 1999 lays down the duties, powers and functions of IRDAThe important functions of IRDA are as follows:

To exercise all powers & functions of controller of Insurance.

Protection of the interest of the policyholders.

To issue, renew, modify, withdraw or suspend certificate of registration.

To specify requisite qualification & training for insurance intermediaries & agents

To promote & regulate professional organization connected with Insurance.

To conduct Inspection/investigations etc.

To prescribe method of Insurance Accounting.

To regulate investment of funds & margins of solvency.

To adjudication upon disputes.

To conduct inspection & audit of insurers, intermediaries & other organizations concerned with Insurance.

IntroductionThe telecom services have been recognized the world-over as an important tool for socio-economic development for a nation. It is one of the prime support services needed for rapid growth and modernization of various sectors of the economy. Indian telecommunication sector has undergone a major process of transformation through significant policy reforms, particularly beginning with the announcement of NTP 1994 and was subsequently re-emphasized and carried forward under NTP 1999. Driven by various policy initiatives, the Indian telecom sector witnessed a complete transformation in the last decade. It has achieved a phenomenal growth during the last few years and is poised to take a big leap in the future also. Status of Telecom SectorThe Indian Telecommunications network with 621 million connections (as on March 2010) is the third largest in the world. The sector is growing at a speed of 45% during the recent years. This rapid growth is possible due to various proactive and positive decisions of the Government and contribution of both by the public and the private sectors. The rapid strides in the telecom sector have been facilitated by liberal policies of the Government that provides easy market access for telecom equipment and a fair regulatory framework for offering telecom services to the Indian consumers at affordable prices.Presently, all the telecom services have been opened for private participation.TheGovernment has taken followingmain initiatives for the growth of the Telecom Sector:LiberalizationThe process of liberalization in the country began in the right earnest with the announcement of the New Economic Policy in July 1991. Telecom equipment manufacturing was delicensed in 1991 and value added services were declared open to the private sector in 1992, following which radio paging, cellular mobile and other value added services were opened gradually to the private sector. This has resulted in large number of manufacturing units been set up in the country. As a result most of the equipment used in telecom area is being manufactured within the country. A major breakthrough was the clear enunciation of the governments intention of liberalizing the telecom sector in the National Telecom Policy resolution of 13th May 1994.National Telecom Policy 1994In 1994, the Government announced the National Telecom Policy which defined certain important objectives, including availability of telephone on demand, provision of world class services at reasonable prices, improving Indias competitiveness in global market and promoting exports, attractive FDI and stimulating domestic investment, ensuring Indias emergence as major manufacturing / export base of telecom equipment and universal availability of basic telecom services to all villages. It also announced a series of specific targets to be achieved by 1997.Telecom Regulatory Authority of India (TRAI)The entry of private service providers brought with it the inevitable need for independent regulation. The Telecom Regulatory Authority of India (TRAI) was, thus, established with effect from 20th February 1997 by an Act of Parliament, called the Telecom Regulatory Authority of India Act, 1997, to regulate telecom services, including fixation/revision of tariffs for telecom services which were earlier vested in the Central Government.TRAIs mission is to create and nurture conditions for growth of telecommunications in the country in manner and at a pace, which will enable India to play a leading role in emerging global information society.One of the main objectives of TRAI is to provide a fair and transparent policy environment, which promotes a level playing field and facilitates fair competition. In pursuance of above objective TRAI has issued from time to time a large number of regulations, orders and directives to deal with issues coming before it and provided the required direction to the evolution of Indian telecom market from a Government owned monopoly to a multi operator multi service open competitive market. The directions, orders and regulations issued cover a wide range of subjects including tariff, interconnection and quality of service as well as governance of the Authority.The TRAI Act was amended by an ordinance, effective from 24 January 2000, establishing a Telecommunications Dispute Settlement and Appellate Tribunal (TDSAT) to take over the adjudicatory and disputes functions from TRAI. TDSAT was set up to adjudicate any dispute between a licensor and a licensee, between two or more service providers, between a service provider and a group of consumers, and to hear and dispose of appeals against any direction, decision or order of TRAI.New Telecom Policy 1999The most important milestone and instrument of telecom reforms in Indiaisthe New Telecom Policy 1999 (NTP 99). The New Telecom Policy, 1999 (NTP-99) was approved on 26th March 1999, to become effective from 1st April 1999. NTP-99 laid down a clear roadmap for future reforms, contemplating the opening up of all the segments of the telecom sector for private sector participation. It clearly recognized the need for strengthening the regulatory regime as well as restructuring the departmental telecom services to that of a public sector corporation so as to separate the licensing and policy functions of the Government from that of being an operator. It also recognized the need for resolving the prevailing problems faced by the operators so as to restore their confidence and improve the investment climate.Key features of the NTP 99 include: Strengthening of Regulator. National long distance services opened to private operators. International Long Distance Services opened to private sectors. Private telecom operators licensed on a revenue sharing basis, plus a one-time entry fee. Resolution of problems of existing operators envisaged. Direct interconnectivity and sharing of network with other telecom operators within the service area was permitted. Department of Telecommunication Services (DTS) corporatized in 2000. Spectrum Management made transparent and more efficient.All the commitments made under NTP 99have been fulfilled; each one of them, in letter and spirit, some even ahead of schedule, and the reform process is now complete with all the sectors in telecommunications opened for private competition.National Long DistanceNational Long Distance opened for private participation. The Government announced on 13.08.2000 the guidelines for entry of private sector in National Long Distance Services without any restriction on the number of operators. The DOT guidelines of license for the National Long Distance operations were also issued.Highlights - NLD Guidelines Unlimited entry for carrying both inter-circle and intra-circle calls. Total foreign equity (including equity of NRIs and international funding agencies) must not exceed 74%. Promoters must have a combined net worth of Rs.25 million. Private operators will have to enter into an arrangement with fixed-service providers within a circle for traffic between long-distance and short-distance charging centres. Seven years time frame set for rollout of network, spread over four phases. Any shortfall in network coverage would result in encashment and forfeiture of bank guarantee of that phase. Private operators to pay one-time entry fee of Rs.25 million plus a Financial Bank Guarantee (FBG) of Rs.200 million. The revenue sharing agreement would be to the extent of 6%. Private operators allowed to set up landing facilities that access submarine cables and use excess bandwidth available. Licence period would be for 20 years and extendable by 10 years.International Long DistanceIn the field of international telephony, India had agreed under the GATS to review its opening up in 2004. However, open competition in this sector was allowed with effect from April 2002 itself. There is now no limit on the number of service providers in this sector. The licence for ILD service is issued initially for a period of 20 years, with automatic extension of the licence by a period of 5 years. The applicant company pays one-time non-refundable entry fee of Rs.25 million plus a bank guarantee of Rs.250 million, which will be released on fulfillment of the roll out obligations. The annual licence fee including USO contribution is @ 6% of the Adjusted Gross Revenue and the fee/royalty for the use of spectrum and possession of wireless telegraphy equipment are payable separately. At present 24 ILD service providers (22 Private and 2 Public Sector Undertaking) are there. As per current roll out obligations under ILD license, the licensee undertakes to fulfill the minimum network roll out obligations for installing at least one Gateway Switch having appropriate interconnections with at least one National Long Distance service licensee. There is no bar in setting up of Point of Presence (PoP) or Gateway switches in remaining location of Level I Taxs. Preferably, these PoPs should conform to Open Network Architecture (ONA) i.e. should be based on internationally accepted standards to ensure seamless working with other Carriers Network.Universal Service Obligation FundAnother major step was to set up the Universal Service Obligation Fund with effect from April 1, 2002. An administrator was appointed for this purpose. Subsequently, the Indian Telegraph (Amendment) Act, 2003 giving statutory status to the Universal Service Obligation Fund (USOF) was passed by bothHouses of Parliament in December 2003. The Fund is to be utilized exclusively for meeting the Universal Service Obligation and the balance to the credit of the Fund will not lapse at the end of the financial year. Credits to the Fund shall be through Parliamentary approvals. The Rules for administration of the Fund known as Indian Telegraph (Amendment) Rules, 2004 were notified on 26.03.2004.The resources for implementation of USO are raised through a Universal Service Levy (USL) which has presently been fixed at 5% of the Adjusted Gross Revenue (AGR) of all Telecom Service Providers except the pure value added service providers like Internet, Voice Mail, E-Mail service providers etc. In addition, the Central Govt. may also give grants and loans.An Ordinance was promulgated on 30.10.2006 as the Indian Telegraph (Amendment) Ordinance 2006 to amend the Indian Telegraph Act, 1885 in order to enable support for mobile services, broadband connectivity, general infrastructure and pilot project for new technological developments in rural and remote areas of the country. Subsequently, an Act has been passed on 29.12.2006 as the Indian Telegraph (Amendment) Act 2006 to amend the Indian Telegraph Act, 1885.USFO has initiated action to bring mobile services within the ambit ofUniversal Service Obligation Fund (USOF)activities. Under this initiative, 7387 mobile infrastructure sites are being rolled out, in the first phase, across 500 districts and 27 states of India. This scheme will provide mobile services to approximately 0.2 million villages which where hitherto deprived of the same.As on 30th June 2010, 7183 shared towers have been set up under the First Phase of the scheme. TheUSOFof DOT has proposed to set up about 10,128 additional towers in order to extend the mobile coverage in other uncovered areas under the Second Phase of the Scheme.

Unified Access ServicesUnified access license regime was introduced in November2003. Unified Access Services operators are free to provide, within their area of operation, services, which cover collection, carriage, transmission and delivery of voice and/or non-voice messages over Licensees network by deploying circuit, and/or packet switched equipment. Further, the Licensee can also provide Voice Mail, Audiotex services, Video Conferencing, Videotex, E-Mail, Closed User Group (CUG) as Value Added Services over its network to the subscribers falling within its service area on non-discriminatory basis.The country is divided into 23 Service Areasconsisting of 19 Telecom Circle and 4 Metro Service Areas for providing Unified Access Services (UAS).The licence for Unified Access Services is issued on non-exclusive basis, for a period of 20 years, extendable by 10 years at one time within the territorial jurisdiction of a licensed Service Area. The licence Fee is 10%, 8% & 6% of Adjusted Gross Revenue (AGR) for Metro and Category `A, Category `B and Category `C Service Areas, respectively. Revenue and the fee/royalty for the use of spectrum and possession of wireless telegraphy equipment are payable separately.The frequencies are assigned by WPC wing of the Department of Telecommunications from the frequency bands earmarked in the applicable National Frequency Allocation Plan and in coordination with various userssubject to availability of scarce spectrum.Internet Service Providers (ISPs)Internet service was opened for private participation in 1998 with a view to encourage growth of Internet and increase its penetration. The sector has seen tremendous technological advancement for a period of time and has necessitated taking steps to facilitate technological ingenuity and provision of various services. The Government in the public interest in general, and consumer interest in particular, and for proper conduct of telegraph and telecom services has decided to issue the new guidelines for grant of licence of Internet services on non-exclusive basis. Any Indian company with a maximum foreign equity of 74% is eligible for grant of licence.Broadband Policy 2004Recognizing the potential of ubiquitous Broadband service in growth of GDP and enhancement in quality of life through societal applications including tele-education, tele-medicine, e-governance, entertainment as well as employment generation by way of high-speed access to information and web based communication; Government has announced Broadband Policy in October 2004. The main emphasis is on the creation of infrastructure through various technologies that can contribute to the growth of broadband services. These technologies include optical fibre, Asymmetric Digital Subscriber Lines (ADSL), cable TV network; DTH etc. Broadband connectivity has been defined as Always On with the minimum speed of 256 kbps. It is estimated that the number of broadband subscribers would be 20 million by 2010. With a view to encourage Broadband Connectivity, both outdoor and indoor usage of low power Wi-Fi and Wi-Max systems in 2.4 GHz-2.4835 GHz band has been delicensed. The use of low power indoor systems in 5.15-5.35 GHz and 5.725-5.875 GHz bands has also been delicensed in January 05.The SACFA/WPC clearance has been simplified. The setting up of National Internet Exchange of India (NIXI) would enable bringing down the international bandwidth cost substantially, thus making the broadband connectivity more affordable.The prime consideration guiding the Policy includes affordability and reliability of Broadband services, incentives for creation of additional infrastructure, employment opportunities, induction of latest technologies, national security and brings in competitive environment so as to reduce regulatory interventions.By this new policy, the Government intends to make available transponder capacity for VSAT services at competitive rates after taking into consideration the security requirements. The service providers permitted to enter into franchisee agreement with cable TV network operators. However, the Licensee shall be responsible for compliance of the terms and conditions of the licence. Further in the case of DTH services, the service providers permitted to provide Receive-Only-Internet Service. The role of other facilitators such as electricity authorities, Departments of ITs of various State Governments, Departments of Local Self Governments, Panchayats, Departments of Health and Family Welfare, Departments of Education is very important to carry the advantage of broadband services to the users particularly in rural areas.Target has been set for 20 million broadband connections by 2010 and providing Broadband connectivity to all secondary and higher secondary schools, public health institutions and panchayats by 2010.In rural areas, connectivity of 512 KBPS with ADSL 2 plus technology (on wire) will be provided from about 20,000 existing exchanges in rural areas having optical fibre connectivity. Community Service Centres, secondary schools, banks, health centres, Panchayats, police stations etc. can be provided with this connectivity in the vicinity of above-mentioned 20,000 exchanges in rural areas. DOT will be subsidizing the infrastructure cost of Broadband network through support from USO Fund to ensure that Broadband services are available to users at affordable tariffs.Tariff ChangesThe Indian Telecom Sector has witnessed major changes in the tariff structure. The Telecommunication Tariff Order (TTO) 1999, issued by regulator (TRAI), had begun the process of tariff balancing with a view to bring them closer to the costs. This supplemented by Calling Party Pay (CPP), reduction in ADC and the increased competition, has resulted in a dramatic fall in the tariffs. ADC has been abolished for all calls w.e.f. 1st October 2008. The peak National Long Distance tariff for above 1000 Kms. in 2000 has come down from US$ 0.67 per minute to US$ 0.02 per minute in 2009. The International Long Distance tariff from US$ 1.36 per minute in 2000 to US$ 0.16 per minute in 2009for USA, Canada & UK. The mobile tariff for local calls has reduced from US$0.36 per minute in 1999 to US$ 0.009 - US$ 0.04 per minute in 2009. The Average Revenue Per User of mobile is between US$ 5.06 - US$ 7.82 per monthForeign Direct Investment (FDI)In Basic, Cellular Mobile, Paging and Value Added Service, and Global Mobile Personal Communications by Satellite, Composite FDI permitted is 74% (49% under automatic route) subject to grant of license from Department of Telecommunications subject to security and license conditions.(para 5.38.1 to 5.38.4 of consolidate FDI Policy circular 1/2010 of DIPP)FDI upto 74%(49% under automatic route) is also permitted for the following: Radio Paging Service Internet Service Providers (ISP's)FDI upto 100% permitted in respect of the following telecom services: - Infrastructure Providers providing dark fibre (IP Category I); Electronic Mail; and Voice MailSubject to the conditions that such companies would divest 26% of their equity in favor of Indian public in 5 years, if these companies were listed in other parts of the world.In telecom manufacturing sector 100% FDI is permitted under automatic route.The Government has modified method ofcalculation of Direct and Indirect Foreign Investment in sector with caps and have also issuedguidelines on downstream investment by Indian CompaniesGuidelines for transfer of ownership or control of Indian companies in sectors with caps from resident Indian citizens to non-resident entities have been issued.Investment Opportunities and IncentivesAn attractive trade and investment policy and lucrative incentives for foreign collaborations have made India one of the worlds most attractive markets for the telecom equipment suppliers and service providers. No industrial license required for setting up manufacturing units for telecom equipment. 100% Foreign Direct Investment (FDI) is allowed through automatic route for manufacturing of telecom equipments.

Payments for royalty, lumpsum fee for transfer of technology and payments for use of trademark/brand name on the automatic route.

Foreign equity of 74% (49 % under automatic route) permitted for telecom services - basic, cellular mobile, paging, value added services, NLD, ILD, ISPs - and global mobile personal communications by satellite. Full reparability of dividend income and capital invested in the telecom sector.Network ExpansionThe telecom sector has shown robust growth during the past few years. It has also undergone a substantial change in terms of mobile versus fixed phones and public versus private participation. The following table shows the growth trend of telecom sector from last five years:The number of telephones has increased from 54.63 million as on 31.03.2003 to 621.28 million as on 31.03.2010. Wireless subscribers increased from 13.3 million as on 31.03.2003 to 584.32 million as on 31.03.2010. Whereas, the fixed line subscribers decreased from 41.33 million in 31.03.2003 to 36.95 million in 31.03.2010. The broadband subscribers grew from a meager 0.18 million to 8.76 million as on 31.03.2010.Trend in Tele-densityTele-density in the country increased from 5.11% in 2003 to 52.74 % in March 2010. In the rural area tetedensity increased from 1.49% in Mar 2003 to 24.31% in March 2010 and in the urban areas it is increased from 14.32% in Mar 2003 to119.45% in March 2010.This indicates a rising trend of Indian telecom subscribers.Rural TelephonyApart from the 200.77million fixed and WLL connectionson March 2010 provided in the rural areas, 570000 uncovered VPTs have been provided as on March 2010. Thus, 96% of the villages in India have been covered by the VPTs. More than 3 lakh PCOs are also providing community access in the rural areas. Further, Mobile Gramin Sanchar Sewak Scheme (GSS) a mobile Public Call Office (PCO) service is provided at the doorstep of villagers. At present, 2772 GSSs are covering 12043 villages. Also, to provide Internet service, Sanchar Dhabas (Internet Kiosks) have been provided in more than 3500 Block Headquarters out of the total 6337 Blocks in the country. The target of 80 million rural connections by 2010 have already met during year 2008 itself. USOF subsidy support scheme is also being utilized for sharing wireless infrastructure in rural areas with about 19,000 towers by 2010.Performance of telecom equipment manufacturing sectorAs a result of Government policy, progress has been achieved in the manufacturing of telecom equipment in the country. There is a significant telecom equipment-manufacturing base in the country and there has been steady growth of the manufacturing sector during the past few years. The figures for production and export of telecom equipment are shown in table given below:

(Rs. in crore)YearProductionExport

2002-0314400402

2003-0414000250

2004-0516090400

2005-06178331500

2006-07236561898

2007-08412708131

2008-094880011000

2009-1050000 (projected @ 18%)13500(projected @ 25%)

Rising demand for a wide range of telecom equipment, particularly in the area of mobile telecommunication, has provided excellent opportunities to domestic and foreign investors in the manufacturing sector. The last two years saw many renowned telecom companies setting up their manufacturing base in India. Ericsson set up GSM Radio Base Station Manufacturing facility in Jaipur. Elcoteq set up handset manufacturing facilities in Bangalore. Nokia and Nokia Siemens Networks have set up their manufacturing plant in Chennai. LG Electronics set up plant of manufacturing GSM mobile phones near Pune. Ericsson launched their R&D Centre in Chennai. Flextronics set up an SEZ in Chennai. Other major companies like Foxconn, Aspcom, Solectron etc have decided to set up their manufacturing bases in India. The Government has already set up Telecom Equipment and Services Export Promotion Council and Telecom Testing and Security Certification Centre (TETC). A large number of companies like Alcatel, Cisco have also shown interest in setting up their R&D centers in India. With above initiatives India is expected to be a manufacturing hub for the telecom equipment.OpportunitiesIndia offers an unprecedented opportunity for telecom service operators, infrastructure vendors, manufacturers and associated services companies. A host of factors are contributing to enlarged opportunities for growth and investment in telecom sector: An expanding Indian economy with increased focus on the services sector Population mix moving favorably towards a younger age profile Urbanization with increasing incomesInvestors can look to capture the gains of the Indian telecom boom and diversify their operations outside developed economies that are marked by saturated telecom markets and lower GDP growth rates.Inflow of FDI into Indias telecom sector during April 2000 to Feb. 2010 was about Rs 405,460 million. Also, more than 8 per cent of the approved FDI in the country is related to the telecom sector.Research & DevelopmentIndia has proven its dominance as a technology solution provider. Efforts are being continuously made to develop affordable technology for masses, as also comprehensive security infrastructure for telecom network. Research is on for the preparation of tested infrastructure for enabling interoperability in Next Generation Network. It is expected that the telecom equipment R & D shall be doubled by 2010 from present level of 15%. Modern technologies inductions are being promoted. Pilot projects on the existing and emerging technologies have been undertaken including WiMax, 3G etc. Emphasis is being given to technologies having potential to improve rural connectivity. Also to beef up R&D infrastructure in the telecom sector and bridge the digital divide, cellular operators, top academic institutes and the Government of India together set up the Telecom Centres of Excellence (COEs). The main objectives of the COEs are as follows: Achieve Telecom Vision 2010 that stipulates a definite growth model and take it beyond. Secure Information Infrastructure that is vital for countrys security. Capacity Building through Knowledge for a sustained growth. Support Planned Predictive Growth for stability. Reduce Rural Urban Digital Divide to reach out to masses. Utilize available talent pool and create environment for innovation. Management of National Information Infrastructure (NII) during Disaster Cater the requirement of South East Asia as Regional Telecom LeaderTo achieve these objectives seven Centre of Excellences in various field of Telecom have been set up with the support of Government and the participation of private/public telecom operators as sponsors, at the selected academic institutions of India. The details of COEs are enumerated below: - TCOEs CentresSr. No.Associate InstituteSponsorWork Assigned

1IIT KharagpurVodafone Essar & Texas InstrumentsNext Generation Network (NGN) & Network Technology

2IIT DelhiBharti AirtelTelecom Technology & Management

3IISC (Indian Institute of Science), BangaloreAircel & Texas instrumentInformation Security & Disaster Management of Infrastructure

4IIT KanpurBSNL & AlphionTechnology Integration, Multimedia & Computational Mathematics

5IIT ChennaiReliance CommunicationTelecom Infrastructure & Energy

6IIT MumbaiTata TeleservicesRural Applications

7IIM AhmedabadIdea CellularPolicy, Regulation, Governance, Customer care & Marketing

3G & Broadband Wireless Services (BWA)The government has in a pioneering decision, decided to auction 3G & BWA spectrum. The broad policy guidelines for 3G & BWA have already been issued on 1stAugust 2008 and allotment of spectrum has been planned through simultaneously ascending e-auction process by a specialized agency. New players would also be able to bid thus leading to technology innovation, more competition, faster roll out and ultimately greater choice for customers at competitive tariffs. The 3G will allow telecom companies to offer additional value added services such as high resolution video and multi media services in addition to voice, fax and conventional data services with high data rate transmission capabilities. BWA will become a predominant platform for broadband roll out services. It is also an effective tool for undertaking social initiatives of the Government such as e-education, telemedicine, e-health and e-Governance. Providing affordable broadband, especially to the suburban and rural communities is the next focus area of the Department.BSNL & MTNL have already been allotted 3G & BWA spectrum with a view to ensuring early roll out of 3G & WiMax services in the country. They will pay the same price for the spectrum as discovered through the auction. While, Honble Prime Minister launched the MTNLs 3G mobile services on the inaugural function of India Telecom 2008 held on 11thDecember 2008,BSNL launched its countrywide3G servicesfrom Chennai, in the southern Tamil Nadu state on 22ndFebruary 2009.Mobile Number Portability (MNP)Mobile Number Portability (MNP) allows subscribers to retain their existing telephone number when they switch from one access service provider to another irrespective of mobile technology or from one technology to another of the same or any other access service provider. The Government has announced the guidelines for Mobile Number Portability (MNP) Service Licence in the country on 1stAugust 2008 and has issued a separate Licence for MNP service w.e.f. 20.03.2009. The Department of Telecommunication (DoT) has already issued licences to two global companies (M/s Syniverse Technologies Pvt. Ltd. and M/s MNP Interconnection Telecom Solutions India Pvt. Ltd.) for implementing the service. MNP is to be implemented in whole country in one go by 31.10.2010Targets Set By the Government1. Network expansion 800 million connections by the year 2012.2. Rural telephony 200 million rural subscribers by 2012 Reduce urban-rural digital divide from present 25:1 to 5:1 by 2010.3. Broadband 20 million Broadband connections by 2010 Broadband with minimum speed of 1 mbps. Broadband coverage for all secondary & higher secondary schools and public health care centres by the end of year 2010. Broadband coverage for all Grampanchayats by the year 2010 Broadband on demand is every village by 20124. Manufacturing Making India a hub for telecom manufacturing by facilitating more and more telecom specific SEZs. Quadrupling production in 2010. Achieving exports of 10 billion during 11thFive year plan.5. Research & Development Pre-eminence of India as a technology solution provider. Comprehensive security infrastructure for telecom network. Tested infrastructure for enabling interoperability in Next Generation Network. 8. International Bandwidth Facilitating availability of adequate international bandwidth at competitive prices to drive ITES sector at faster growth.Indian Telecommunications at a glance

(As on 31stMarch 2010)Rank in world in network size 3rd

Tele density (per hundred populations) 52.74

Telephone connection (In million)

Fixed 36.95

Mobile 548.32

Total 621.28

Village Public Telephones inhabited (Out of 5,93,601 uncovered villages)5,69,385

Foreign Direct Investment (in million)(from April 2000 till March 2010) 4070

Licenses issued

Basic 2

CMTS 38

UAS 241

Infrastructure Provider I219

ISP (Internet) 371

National Long distance 29

International Long Distance 24

After putting the line on the Insurance sector, the other service sector I would like to discuss about is the Telecommunication Industry. The media scenario in India has undergone a spectacular change since Independence. From the days of bullock cart, we have traveled down the modern age of satellite technology and cyberspace. The country has been witnessing a revolution in communication technology. Ever since the beginning of planned development in the country, the role of mass media in the development process has been recognized significantly. With the launching of grass roots democratic structures, followed by vigorous efforts to implement Right to Information, Rural Health Mission, Drinking Water Mission, Rural Electrification, Rural Employment, Empowerment of Women, and renewed enthusiasm to spread the light of Literacy, the mass media is now at an advantageous position to meet the challenges of rural uplift in this 21st century. Rural upliftment has always been remained a prime concern of all governments in India. The Indian economy is pre-dominantly rural. More than 72 per cent of the Indian popu lation reside in villages and rural areas. Rural women are a vital part of Indian economy and one-third of national labourforce and a major contributor to the survival of the family. Government is making continued efforts to provide equitable growth opportunities to rural women by the ways of empowerment and upgrading the information infrastructure in rural and remote areas. For many years now, the press, particularly regional and local vernacular press, the All India Radio and the national television Doordarshan have been putting out programmes for benefit of the rural people. The recent boom in satellite television combined with governments decentralization policy in telecommunication sector have been in the process of transforming the rural information and communication infrastructure to a great extent. In this paper, a detail study has been carried out how the telecom media has been flourishing and contributing towards the rural development process in India.Indian Telecom Revolution

The reforms undertaken in the telecommunication sector since 1991 has resulted in unprecedented growth of the telecommunication in India. At the time of Indian Independence (1947), the newly formed nation had 84,000 fixed telephone lines for its population of 350 million. Thirty-three years later in 1980, the number of telephones raised to 2.5 million and 12,00 public telephones for a population of 700 million, out of which only 3 per cent of Indias 6,07,491 villages had telephone service where more than 75 per cent of the countrys population resides. Today, India is having 100 million telephone network is one of the largest in the world while in terms of number of phones, our country stands fifth largest network after China, USA, Japan, and Germany. With a shift from Hexagonal Policy in 1980-91 to Grampanchyat Public Telephone Service in 1991-94, the quantity of public telephones in rural areas rose from 48,828 to over 2,06,000 in 1991 and in total by 1999 India had an installed network of over 25 million telephone lines spread over 300 cities, 4,869 towns, and 3,10,897 villages. The real telecommunication revolution in rural India occurred during 1988-98, the number of villages with some sort of telephone facility increased from 27,316 to 3,00,000 villages (half of all Indias villages). During the first year of the present UPA government from May 2004 onwards, an all time growth has been achieved by adding 2.36 crore phones where as the number of phones provided in the country up to 1995 was only about 2.2 crore. By 2000, it was about 6,50,000 PCOs providing reliable telephone service all over India including remote, rural, terrain, and tribal areas. Similarly, the position with regard to rural Direct Exchange Lines (DELs) increased from 16.48 lakh in 1995 to 122.72 lakh as on 31 March 2004 in rural areas. The government has sanctioned Rs 200 crore for Universal 88 Indian Media Studies Journal Vol.1 No.1. July-Dec. 2006 Dr. J.S. Giri Rao & S.N. Pattnaik Service Obligation (USO) fund to support the operation and maintenance of more than 5.3 lakh village public telephones (VPTs) and rural DELs. Presently, more than 87 per cent of the Indian villages have already been covered by VPTs provided by BSNL. Besides, apart from these, BSNL has also provided all 133 lakh rural DELs in the country. The latest form of communication revolutionizing both urban and rural (to some extent) India is mobile telephony. It was in 1995 introduced in India and just after 3 years, the user capacity was around one lakh cellphone users in four metro cities and another 5,00,000 or so cellphone users existed in other towns and cities, a number that is very quickly progressing. The year 2003-04 showed a record growth of 40 per cent in the total number of telephone connections (fixed+WLL+CMPs). The total number of telephone connections as on 31 March 2004 were 765.4 lakh comprising 464.8 lakh fixed lines and cellular connections provided by BSNL and MTNL and 300.6 lakh by private sector. The latest information shows that the total number of phones as on end of September 2005 (both mobile and land line) rose to 1128.8 lakh out of which 478.3 lakh were land line phones while 650.5 lakh mobile phones. India has set itself a target of 2500 lakh telephones by 2007, of which around 2000 lakh are expected to be on mobile network. To meet the target, the country should be adding around 50 lakh telephones every month.(all in lakhs) 2005-06 March 31 June 30 September 30 Addition Mobile 522.2 573.8 650.5 128.3 Landline 459.1 469.0 478.3 19.2 (all in lakhs) 2004-05 March 31 June 30 September 30 Addition Mobile 336.0 394.7 429.8 93.8

Landline 425.8 434.5 438.0 12.2 The tele-density which was 5.11 per cent as on 31 March 2003 has increased to 10.38 per cent by October 1, 2005. In recent past, it was calculated that every moth more than 20 lakh phones get added (i.e., 70,000 persons are provided phones everyday). In terms of rural telephony, according to the available data as on 31 March 2004, of the total 6,07,491 Indian villages, 5,22,347 villages (86 per cent) have covered with village public telephones (VPTs). Similarly, it is noticed that the participation of the private sector has given major boost in growth and development of telecommunication system from 21 per cent to 39 per cent during the Technology for Rural Development period 31 March 2003 to 31 March 2004 in both urban and rural area.Out of additional 219.2 lakh telephones connected during the period, 186.1 lakh were provided by the private sector. Besides, a continuous positive shift has been observed in the use of mobile telephony in recent past and contribution of private sector in this regard is highly remarkable. The share of mobile (cellular mobile phones (CMP)+Wireless in Local Loop (WLLfixed) which has increased from 23.77 per cent as on March 31, 2003 tomore than 44 per cent (261.55 lakh CMPs and 75.45 lakh WLL) as on March 31, 2004. The users preference in favour of mobile phones against fixed phones continued and as a result of mobile phones grew by about 160 per cent while the fixed phones grew by 3 per cent during the above said period. Based on the resources availability of the Bharat Sanchar Nigam Limited (BSNL), Indias largest government-owned telecom company, it plans to provide 367.67 lakh new connections during Tenth Five Year Plan (2002-07). The following table gives the broad details of expansion programme envisaged by the Company during the Tenth Plan.

The future growth of telecommunication scenario in India seems to be quite bright. It is estimated by 2007, the country will have 250 million telephone connections, out of which 180-200 million telephones will be mobile phones. By the same period, the tele-density in our country will rise to 22 per cent and around 50 per cent contribution in this sector would be provided by public sector operators. It is also expected that by 2007 every village in India will be connected with telecom network, the mobile phones would play a major role in this endeavor. Similarly, the growth of telecommunication network would pave the way for internet revolution in our country. It is estimated that internet connection will rise to 18 million by 2007 from 5.4 million in December 2004. If the telecom connections rise as per the estimation and target, it is expected further 40 million internet connections by 2010. With the increasing competition among service providers in telecom sector, it is expected that the tariff rates will come down benefiting the consumers.

Telecom is one of the fastest growing sectors in India with a growth of 21% and revenue of Rs 86,720 crore in the year 2006. The sector is expected to grow over 150% by 2012. With increase in competition between the major players like BSNL, MTNL, Hutchison Essar, BPL, Idea, Bharti Tele services, Tata, etc, the requirement for mobile analysts, software engineers, and hardware engineers for mobile handsets has increased. However, holding an engineering degree is not enough to survive in the Telecom Sector. There is constant need of updating of knowledge, skills, and attitudes. With this rapid growth in Telecom Sector, the need for trained professionals in bound to rise and so is the training need. The total training market in Telecom Sector is estimated to be Rs 400 crore.

Many top players are spending a huge amount on training and development, for example BSNL alone spends more than 100 crore on training and development of its employees through the Advanced Level Telecommunications Training Centre (ALTTC) and 43 other regional training institutes. Reliance has also established Dhirubhai Ambani Institute of Information and Communication Technology. In addition to that, Bharti has also tied-up with IIT Delhi for the Bharti School of Telecommunication Technology and Management.

With the increase in competition, availability of huge amount of information through internet, magazines, newspapers, TV, etc, and increased awareness among customers, the demand to impart proper training in non-technological areas like customer care and marketing has increased too.

Rapid technological changes, network security threat, mobile application development, growing IP deployment in the sector have brought back the training and development in the priority catalog. OBJECTIVESThe main objective of the study is to analyze the Development of the Service Marketing Business in Indian Context.Some other sub-objectives are:

1. To understand the development in Insurance sector and the telecommunication sector in India.2. To know the growth of Service marketing and special attention on Insurance and the telecommunication sector in india.

3. To analyse the future growth pattern.

SCOPE OF THE STUDYService marketing has emerged as one of the major and fast growing sector of the indian market. This report points out the issues which need to be addressed as far as further development of the Service Marketing is concerned. This report provides a roadmap of the service marketing process planning process on an organizationwide basis as well as within the other marketing function.This report defines Service Marketing and its benefits for organizations and outlines the steps in performing effective planning. It provides practical tips for implementing planning programs and closes with the discussion of the role of marketing professionals in strategic planning, including how to approach planning within the Marketing function itself.This study also cover the nature, features and characteristics of the service and service marketing which are very important to consider for the further development of the Service Marketing in INDIA. USE AND IMPORTANCE OF STUDYThis report will be useful in various ways such as:

In understanding the concept of the service marketing .

In understanding the latest trends in the Service Marketing.

In understanding the reasons for the development of the service marketing.As far as importance is concerned this study will put light on the Service Marketing in India and will provide the information regarding development of Insurance sector and Telecommunication sector. The latest trends can also be recognised and on that basis one can form a perception regarding the Service sector and its development in India.

RESEARCH METHODOLOGYThis report is purely based on secondary data and the data was particularly collested from various journals, magazines, newspapers and various internet sources.

So as per the requirement of the research I used Descriptive research in the study.

RESEARCH DESIGN:

A research design is the arrangement of conditions for collection and analysis of a data in a manner that aims to obtain complete and accurate information in the said studies.

The process has to start from grass root level and it was very important to understand the Service Marketing in Indian context.

The entire study was more of a Descriptive Research type and incorporated a formal study of the specific problems.

The data collected had to be systematically arranged, analysed and reported in a form congenial to take on the spot decisionsData collection and analysesService Sector in India today accounts for more than half of India's GDP. According to data for the financial year 2009-20010, the share of services, industry, and agriculture in India's GDP is 55.1 per cent, 26.4 per cent, and 18.5 per cent respectively. The fact that the service sector now accounts for more than half the GDP marks a watershed in the evolution of the Indian economy and takes it closer to the fundamentals of a developed economy.The boom in the services sector has been relatively "jobless". The rise in services share in GDP has not accompanied by proportionate increase in the sector's share of national employment. Some economists have also cautioned that service sector growth must be supported by proportionate growth of the industrial sector, otherwise the service sector grown will not be sustainable. In the current economic scenario it looks that the boom in the services sector is here to stay as India is fast emerging as global services hub.DATA COLLECTION AND ANALYSES OF LIC

DATA ANALYSES Of TELECOMMUNICATION

FINDINGS

Service Sector in India today accounts for more than 55% in Indian GDP.LIFE INSURANCE SECTOR1. LICs Contribution to five years plan increased from 184crores in 1956-61 to 218510 crores in XIth five year plan.

2. LICs has increased around 15% offices during the last decade.

3. For the development of Insurance sector all player are focus about resolving the grievances. ICICI prudential has resolve around 90% grievances.4. Customers have tremendous choice from a large variety of products from pure term insurance to unit-linked investment products because there is many player are available in Indian Market.TELECOM SECTOR1. Telecom is one of the fastest growing sectors in India with a growth of total revenue of US$ 3032.96 million in the year 2003 to US$17594.50million in the year 2007 and US$35782.92million is projected for the year 2013.2. Airtel has highest market share that is around 24%

3. The Indian Telecommunications network with 621 million connections (as on March 2010) is the third largest in the world.CONCLUSION

Service Sector in India today accounts for more than half of India's GDP. According to data for the financial year 2009-20010, the share of services, industry, and agriculture in India's GDP is 55.1 per cent, 26.4 per cent, and 18.5 per cent respectively. The fact that the service sector now accounts for more than half the GDP marks a watershed in the evolution of the Indian economy and takes it closer to the fundamentals of a developed economy.The boom in the services sector has been relatively "jobless". The rise in services share in GDP has not accompanied by proportionate increase in the sector's share of national employment. Some economists have also cautioned that service sector growth must be supported by proportionate growth of the industrial sector, otherwise the service sector grown will not be sustainable. In the current economic scenario it looks that the boom in the services sector is here to stay as India is fast emerging as global services hub.This report defines Service Marketing and its benefits for organizations and outlines the steps in performing effective planning. It provides practical tips for implementing planning programs and closes with the discussion of the role of Marketing professionals in strategic planning, including how to approach planning within the Marketing function itself. RECOMMENDATIONS

Recommendations To Insurance Sector1. First off all company should focused on reliability creation by good corporate governance, transparency in the function, quality of the services.

2. They should care about the right to information, education.3. Insurance sector requires special attention as it seems to one of the unaddressed sectors.

4. First of Motive of Marketing concept of LIC may be awareness with selling product intent. Recommendations To Telecommunication Sector

1. With this rapid growth in Telecom Sector, the need for trained professionals in bound to rise and so is the training need.

2. Regulatory framework is required for the further development.3. Advancement in technology is required as far as Telecommunication sector is concerned.4. Better strategies are required to groom the service sector in India.5. Implementation of policies and procedures is another way to groom service sector in India.LIMITATIONS1. Lack of authentic data because secondary data was used.

2. Service industry is considered as a tough nut to crack so more people were dissatisfied which enabled me to collect primary data.

3. Lack of time to conduct this particular report was the other major limitation.4. The researcher have limited knowledge about the Service sector which is also a limitation of this research reportBIBLIOGRAPHY

There are certain websites are as follows..

www.rbi.org.in www.irdaindia.org www.irdaonline.org www.licindia.in www.goggle.com www.encycopedia.com Books and Journals

M.Y. khan (Financial institution and services) Economic survey 2010

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