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IIMT SCHOOL OF MANAGEMENT

(ISM)

Business Environment

Semester – 2

Academic Year 2013-14

Module Leader

Ms. Neetu Ahmed

Submitted By

Rishabh Shukla

Post Graduate Diploma in

Management

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INDEX

1 Introduction of Indian Telecom Industry

2 History of Indian Telecom Industry

3 Introduction and History of Vodafone

4 Mission and Vision

5 Objective of Vodafone

6 Stakeholder engagement

7 Influence of Stakeholder

8 Financial Result of Vodafone

9 PEST Analysis

10 Porters Five Forces Model

11 Environmental Policy

12 Market Strategies

13 Organizational Structure

14 Awards and Recognition

15 Executive Summary

16 Conclusion

17 Reference

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1. Introduction

The Indian telecom industry is the fastest growing industry in the world. India is a world second

largest telecom market after the china. Telecom means is transfer information between two

people or two distance points in a space. Telecom regulatory authority of India (TRAI) have

provided an environment for service providers and implemented an all types of government

policy and regulatory framework. This sector is a very competitive. Because telecom sector is a

affordable tariffs to the consumer. Telecom sector are 898 million subscribers as on March 2013.

Telecom infrastructures are expected to increase a compound annual growth rate of 20% during

2008-15 to reach a 571000 tower in 2015. India has opportunities for telecom operator and is

one of the best markets for a telecom business. Telecom sector growths are also attracting a new

player in the telecom industry with the result that intensity of competitions is also increased.

Cellular services are divided into a two categories GSM (Global System for Mobile

Communication) and CDMA (Code Division Multiple Access). GSM company are basically in

India are Airtel, Idea, Vodafone, and a CDMA are provided by a Reliance, Tata Indicom.

www.trai.com (as on 27/03/2014)

Indian telecom markets are basically divided into a two parts, the Fixed Service provider and the

Cellular Service. Fixed Service network comprise a land lines basic service. BSNL and MTNL

are two major players in a fixed line service. BSNL and MTNL are covered a 90% of customer

in India.

Second types of service are available in India is a cellular Service and it’s basically divided into

a two category GSM (Global System for Mobile Communication) and CDMA (Code Division

Multiple Access). GSM sector, the major players are Vodafone, Airtel, Idea, Aircel and so on.

The national company BSNL are also provided a GSM service named “Cellone”. BSNL has a

large number of shares in semi urban and rural areas. The major companies are provided a

CDMA services in India are Reliance communication, Tata Indicom and so on.

www.cci.in (as on 27/03/2014)

Snapshot of Indian telecom industry

Data As on 31st March, 2013

Telecom Subscribers (Wireless + Wire line)

Total Subscribers 898.02 Million

Urban Subscribers 548.80 Million

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Rural Subscribers 349.22 Million

Market share of Private Operators 85.51%

Market share of Public Sector Operations 14.49%

Wireless Subscribers

Total Subscribers 867.80 Million

Urban subscribers 523.30 Million

Rural Subscribers 342.50 Million

Market share of Private Operators 87.76%

Market share of Public Sector Operators 12.24%

Wire line Subscribers

Total Subscribers 30.21 Million

Urban Subscribers 23.50 Million

Rural Subscribers 6.71 Million

Market share of Private Operator 87.76%

Market share of Public Sector Operator 12.24%

Internet / Broadband Subscribers

Total Subscribers 164.81 Million

Subscribers accessed internet through wireless

phone

143.20 Million

Telecom Financial Data (March 2013)

Gross Revenue Rs. 54283.78 Crore

Adjusted Gross Revenue during the quarter Rs. 35279.50 Crore

Monthly Average Revenue Per User for access

service

Rs. 104

www.trai.com (as on 27/03/2014)

2. History of Indian Telecom Sector

Indian telecom history can be started with the telegraph. Indian telecom and postal sector is the

world oldest. First electric telegraph was started in 1850 in between Calcutta and Diamond

Harbour. In 1851 telegraph opened for a use of British East India Company. Just after

construction was started of 4000 miles of telegraph lines between Kolkata and Peshawar with the

along of Mumbai, Agra, Chennai and Bangalore and it’s started on 1853. In 1854 telegraph

opened for a public. In 1880 Oriental Telephone Company and Anglo- Indian Telephone

company approaches to Indian government to opened a telephone exchange. Governor General

of India declared to open a Telephone exchange in India. The named of this exchange is Central

Exchange.

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Year wise telecom sector history

Pre-1902 – Cable Telegraph.

1902- Established a first wireless telegraph station between Sagar Island and Sandhead.

1913-14 – Started a first Automatic Exchange in Shimla.

1927- Started a first Radio- telegraph between Indian and UK.

1953- Introduced a 12 channel carrier system.

1960- Started a first subscriber trunk dialling commissioned between Kanpur and

Lucknow.

1976- Introduced a first digital microwave junction.

1980- Established a first satellite earth station for domestic communication at

Sikandarabad (UP)

1995-Stated a first mobile telephone service for non commercial basic n 15 August 1995

in Delhi.

1995- Internet introduced in India in 15 August 1995. Internet started in Mumbai,

Calcutta, Chennai and Pune.

www.cci.in (as on 27/03/2014)

3. Introduction and History of Vodafone

Vodafone India is a public limited company in a telecommunication sector. Vodafone founded in

1984 in London, United Kingdom. Vodafone are provided a different type of product in world

such as fixed line and telephony service, internet service and digital television. Vodafone stated

in India 1994 in Mumbai, Maharashtra. Vodafone are operating its operation in all over the India.

Today time Vodafone is a second largest company in India with a 153 million customers.

Vodafone has a very long term planning in India. Vodafone are saying that they are wanted to

provided an innovative, customer friendly products in India.

Hutchison Max telecom Ltd. is started in 1992 after a joint venture of Hutchison Whampoa and

Max group. Hutchison are getting a licence in Mumbai circle for its operations in 1994.

Hutchison was starting its operations in Delhi circle in 1999 and Kolkata in 2000. In 2005

Hutchison are renamed in Hutchison Essar Ltd. they are getting a licence in 13 circles in India.

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In 2007 Vodafone are purchase a 67% share in Hutch. Vodafone buy a rest of the share in 2011.

www.vodafone.com (As on 27/03/2014)

Key Milestone of Vodafone-

1992- Hutchison and Max group established a Hutchison Max.

2000- They are started its operation in Delhi, Calcutta and Gujarat through a acquisition.

2001- They are getting licences to operate its operation in Karnataka, Andhra Pradesh and

Cheenai.

2003- They are purchased an AirCel Dig link which is already operated in a Rajasthan, Haryana

and UP East.

2005- They are acquired a BPL company licence in three other circle.

2007- Vodafone company purchase a 67% share of Hutch for $ 10.7 billion.

2008- Vodafone is getting a licence in remaining the entire circle and stated its operation in

Madhya Pradesh, Orissa, Bihar and North East state.

2011- In 2011 Vodafone buy out a rest of the share of Hutch in $5.46.

www.vodafone.com (As on 28/03/2014)

4. Mission and Vision

Mission-

Vodafone mission is be are make a diverse and ethical company, operating a responsibility very

well and providing a services that are very suitable for society and customer.

Vision-

Vodafone vision is to enrich a customer through a unique power of mobile communication.

www.vodafone.com (As on 28/03/2014)

5. Objectives of Vodafone

Vodafone says that they want to be the top mobile service provider of India.

Vodafone strategic objectives are innovating and deliver on customer’s total

communication needs.

Creating brand awareness.

www.indiaserver.com (As on 29/03/2014)

6. Stakeholder engagement

Stakeholder are affected the all of the company. Vodafone are listen and communicating with

stakeholder. They are always receiving a feedback from its stakeholders. Vodafone is providing

an all of the benefits to its stakeholders. In any of the cases stakeholders are positively respond

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so they are explain a position of the company in honestly and openly. Our stakeholders are

included an investor, employees and suppliers etc. Stakeholders are directly affected a company

business.

www.vodafone.com (As on 30/03/2014)

Stakeholder

Group

How we engage

Customer Vodafone communicated with their consumer in time by time in different

medium such as retail outlet, customer care and conducting a different type of

survey for knowing to consumer.

Employees Employees are a very important part of any of the organization so they are

always getting a feedback to employees through conducting a survey.

Shareholders They are always conducted a meeting through a events, conferences call and

one-to-one meetings form knowing a different point of view its shareholders.

Supply chain

partner

Vodafone always tries to make a very good relationship with their suppliers.

Vodafone always conducting a different type of workshops and events for

maintain a relationship with their suppliers.

Government Vodafone always follow a government rules and regulations. Vodafone always

tries to follow a government rules and regulations.

Community Vodafone consult with their local people for understanding their services and

facility.

www.vodafone.com (As on 30/03/2014)

7. Influence of Stakeholders-

Stakeholders are a part of the any of organization. How the stakeholders are influenced a

organization. Vodafone are a different stakeholder.

Customer- Vodafone always tried to provide a good care of services to its consumer because

Vodafone are expect a consumer is a cash cow. So they are always tries to not an overcharge to

consumer. They are always tried to making a consumer happy.

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Employees- Vodafone beliefs that after a consumer employee is a very important part of the

organization. So Vodafone tries to staff is well trained and proper knowledge of their product

and services which they are offered. Vodafone always recruiting a best people and investing

money for improving their skills. Vodafone always motivated to its employees by setting up a

goal and providing a reward.

Shareholders- shareholders is a very important part of the any of the organization because

they are invested a money and time in company. And they are always tried to get a good return

for its investment.

Supply chain partner- suppliers is a important part Vodafone always tried to deal a very

effectively with their suppliers and paid a timely because if you are not make a good relationship

with their suppliers so they are effect a image of the company.

Local community- Vodafone always participated in a different types of local and national

charity programme. Vodafone always tries to reduce a impact on environment so Vodafone

always participated in waste and energy saving activities and always concerns with a local

community.

Government- government is control a organization through a different laws and regulations

such as making a new regulations and increase and decrease a taxes etc.

www.vodafone.com (As on 30/03/2014)

8. Financial Result of Vodafone-

Key Financial Summary

Feb. 12(INR Millions) Feb. 13(INR Million)

Service Revenue 153,538 174,189

Total Revenue 155,116 175,813

EBITDA 39,638 49,930

Capital expenditure 24,261 17,047

Service Revenue breakup

Feb. 12 (INR Million) Feb. 13 (INR Million)

Voice 118,778 136,462

Messaging 7871 6393

Data 12,908 14,511

Fixed line 428 767

Other service 13,554 16,055

www.vodafone.com (As on 30/03/2014)

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9. PEST Analysis

Political Factors-

Political factor are affected a all of the industry. If government change so its policy also changed

and makes an effect of its functions. If any of the company want to open its business in outside

of country so company firstly check a political situation of country. India recently government

has launched a new telecom policy. In this policy government are planned a different new policy

such as government has planned a only one licence for operating a services in India. if only one

licences policy is started in India so its affect a operation of Vodafone in India because some of

the company are not have a licence to operate a all over the India but this policy they are receive

a licence for operating to all over the India. And the some other policies are maintained in this

policy such as Roaming free, providing a secure and high quality of services etc.

Economic Factor-

Indian economy is a growing at a faster rate in today time. India most of the population is youth

so investment in Indian market is a good for company. India most of the population is youngster

so its encouraged to company to focus on low cost products and services because young person

have a less money. The foreign trade component of India’s GDP is now 55 %. The Indian

government allow a FDI in India Telecom sector. Attractive investment policy and lucrative

incentives are attractive a telecom equipment suppliers and service provider. In the period of

recession Vodafone are affected by a recession. Vodafone are not only affected in India but it’s

affected in globally.

Social Factor- Most of the population is India is youngster so most of the company are

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making a policy according to the youngster needs. They make the scheme with low call rates and

message scheme. As we are now that today time consumer taste is change and price war is

opened in Indian market. Today time consumer changes a brand according to their needs and

preferences. Many of the telecom company work for a social welfare for example Idea Cellular

co. collected money for the victims 26/11 attack by the subscribers of idea when any call was

made. Indian government providing a different type of benefits such as tax benefits. Indian

government also opened a various research institute with the collaboration of private research

companies.

Technological Factor- Technology are always affects a telecom sector or Vodafone. Today

times many type of communication alternatives are available. Such as online chatting, yahoo

messenger, Skype, face book, what app, Line and many of the alternative software are available.

In a recent time viber are launched a service to free call in viber to viber so these type of

technology are always affected a Vodafone. And some other technological changes such as 3G,

4G technology are come in India so if you are want to lead a market so you are a need to

providing very good services. So theses types of technological changes are increase a company

cost and make an effect on company operations.

www.vodafone.com (As on 30/03/2014)

10. Porter’s Five forces Model

Porters five forces model we will be find out at which type of problems we are faced in business

and they are how to affect a business.

Bargaining power of customer- in case of Vodafone bargaining power of customer is very

high because there are many are many of the telecom operator are available in India so if

consumer are not satisfied with their services so they are joining a another network. For this

reason Vodafone always tried to provide good services in low quantity.

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Bargaining power of Suppliers- Vodafone existence in a globally and Vodafone is a one of

the world leading telecom company. Vodafone has very good controls to its suppliers so

bargaining power of suppliers is low.

Threat of substitute- Vodafone is one of the company launch a very good products and

services in a lower rate. Vodafone always up to dated for a market and technological changes. So

it’s very difficult to other company to make a similar substitute and services. So threat of

substitute is low.

Threat of entry- Threat of entry possible in when your product and service are not according

to the consumer needs and price is higher. Vodafone always study a market condition and change

prices according to the compared of other competitors. So it’s make a Vodafone to stay in a

market.

11. Environmental policy of Vodafone-

Vodafone is one of the companies who are taking a climate change in very seriously. So

Vodafone awarded a “green” brand in 2010. After receiving an award Vodafone started working

in the different initiatives:

Handset recycling

Universal and solar charges

Reduced packaging

E-billing

Environment sustainability is a part of the organization where company worked. Vodafone give a

one motto responsible business is one that is good for a environment. Vodafone are worked in a

different type of policy such as waste management, increasing a operational efficiency and

adopting a green initiatives. Vodafone want to be positive economic and social challenges

through a services and products. Last year Vodafone started a NGO with a partnership of Digital

green. This NGO dedicated to increasing a agriculture and productivity. This NGO provided a

information to farmer in every Sunday in Karnataka.

www.vodafone.com (As on 30/03/2014)

12. Marketing Strategies of Vodafone-

1- Targeting a rural market-

2- Offering cheap handset

3- Free support and services

4- Strong logistic and supply chain management

5- Target a youngster

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13. Economic contribution of Vodafone in India

Currently Vodafone are approximately 10% contribution in economy. Vodafone current revenue

is 36,000 Crore as on 31 March 2013. Vodafone say that their contribution is increased in 15-16

% in next 4-5 years in Indian economy.

www.timesofindia.com (As on 02/04/2014)

14. Organizational Structure of Vodafone-

Chairman- Sir John Bond

Executive Director- Vittorio Colao

Andy Halford

Michel Combes

Stephen Pusey

Deputy Chairman and Independent director- John Buchanan

Non-Executive Director- Alan Jebson

Samuel Jebson

Nick Land

Anne Lauvergeon

Luc Vandevelde

Anthony Watson CBE

Philip Yea

Renee James

Gerard Kleisterlee

www.vodafone.com (As on 30/03/2014)

15. Awards and Recognition of Vodafone

2007 company get a The Global 2000 award for Forbes.

In 2006 company are achieving an award in Caring company award by the Hong Kong

council of social services.

2005 company are listed in Asia top 150 company and getting an Asia’s Best

Conglomerate award.

2004 company are received an award Best Asian Country award.

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16. Executive Summary

Indian telecom sector has a fastest growing industry of the world. Indian telecom industry is

a second rank after a China. Indian telecom industry many of the players are available.

Vodafone is a one of the major player of the Indian telecom industry. Basically Vodafone

started its operation in India 2007 but before 2007 Vodafone are provided a service through

a different companies tie up. Vodafone is a British company and named Vodafone comes in

a world of voice, data and fone. Vodafone say that they are want to be a top service provider

in India. Vodafone are a different stakeholder such as consumer, employees, local

community, government etc. They all of the stakeholder affect a company business and

operation. But Vodafone are manage an all type of stakeholders are very well. Vodafone are

doing a work in a different type of environmental policy so they are achieved a different

awards for work in the field of environment. Vodafone contribute in India economy is very

well.

17. Conclusion

Vodafone is a second largest telecom company in India after an Airtel. Vodafone company

main aim is to providing a full satisfaction to its stakeholders. Vodafone Company is

provided a clear mission and vision. Vodafone tries to different types of work in the field of

environment and Vodafone contributed in India economy is a very well. Vodafone has a

different types of factor are affected such as political, economical, legal and technological

factor. Vodafone are achieved a different type of awards.

18. Reference

1- Welcome to the corporate Website of Vodafone group plc- Vodafone. 2014 Welcome to

the corporate website of Vodafone Group plc- Vodafone [ONLINE] Available at:

http://www.vodafone.com/content/index.html. [Accessed 28 March 2014].

2- Telecom Market ripe for consolidation: Vodafone India’s Marten Pieters- The Economic

Times. 2014 Telecom market ripe for consolidation: Vodafone India’s Marten Pieters- The

economics Times [Online] Available at:

http://economicstimes.indiatimes.com/industery/telecom/telecom-market-ripe-for-

consolidation-vodafone-indians-marten-pieters/articlehow/33477812.cms. [Accessed 29

March 2014]

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3- Indian Telecom Industry, Telecom Industry in India, Telecommunication. 2014. Indian

telecom industry, telecommunication [Online] Available at:

http://www.ibef.org/industery/telecommunications.aspx. [Accessed 30 March 2014].

4- Indian Telecom Industry 2014. Indian Telecom Industry [Online] Available at:

http://www.dnb.co.in/indiantelecomindustery/overview ti.asp. [Accessed 29 March 2014].

5-Indian Telecom 2013, 2014. India Telecom 2103 [Online] Available at:

http://indiatelecom.org/opportunities.php [Accessed 01 April 2014].

6-Indian telecom industry: Latest News& Video, Photo about Indian telecom industry | The

economics times 2014. Indian telecom industry [Online] Available at:

http://economicstimes.com/topic/indian-telecom-industery [Accessed at 01 April 2014].

7-Progress against objectives- Vodafone 2014. Progress against objectives- Vodafone

[Online] Available at:

http://www.vodafone.com/contenet/index/about/sustanablity/sustanabilityreport/issue/enviro

nemntfootprint/progressagaimstobjectives.html. [Accessed on 28 of March 2014]