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A Study on Customer Retention at

AIRTEL

DESERTATION REPORT

On

CUSTOMER RETENTION STRATEGY ATAIRTEL,

BANGALORE.

In partial fulfillment of the requirement

Of award of MBA degree

Submitted By

Arjun sagar.K.

(Reg No. 06KXCM6001)

Under the guidance of

Sri. Jeevananda.S.

Master of Business Administration

Bangalore University

Surana College PG Centre

Bangalore - 560060

SURANA P.G. CENTRE 1


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2006-08

DECLARATION

I hereby declare that the research work embodied in the dissertation entitled

Customer Retention Strategy at AIRTEL, Bangalore, has been carried

out by me under the guidance and supervision ofSri. Jeevananda.S,

Surana p.g centre Bangalore

I also declare that this dissertation has not been submitted to any

University/Institution for the award of any Degree/Diploma.

Place: Bangalore

Date: (ARJUN SAGAR.K)



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ACKNOWLEDGEMENT

I am happy to express my deep sense of gratitude to Dr.V.Prabhudev(Director, Surana p.g centre, Bangalore), andMr. Jagadeesh. R.S(Assistant

Sales Manager, Airtel) for their encouragement, guidance and many valuable

ideas imparted to me for my project.

I extend my sincere thanks to Mr. Jeevananda.S (Internal Guide,

Surana p.g centre, Bangalore) for providing me all the information required

and the guidance through out the project without which this project would

not have been possible.

I have gained a lot of knowledge, both theoretical and practical,

throughout the course of carrying out this project; I also learnt a lot about the

intricacies of the actual business world.

With special regards I would also like to sincerely thank all my

lecturers and friends for their help in completing my project successfully.

Place: Bangalore

Date: (ARJUN SAGAR.K)



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CONTENTS

Chapters Title Page no

Chapter-1 Introduction 1-13

Background of the study.

Components of life time value of customer:

Integrated Customer RelationshipManagement

Current scenario of customer retention.

Stratifies For Retaining Customer

Chapter-2 Research Methodology 14-17

Statement of the problem.

Scope of the study:

Objectives of the study

Research Design:

Sampling Technique.

Actual collection of data.

Limitation of the study.

Chapter-3 Review of literature 18-28

Purpose of review.

Methodology of literature review.Conclusions from literature review.



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Chapter-4 Company profile 29-46

Introduction

Key strengths & Future plans

Vision , mission

Bharthi valuesAirtel Advertising

Chapter-5 Data analysis and inferences 47-71

Chapter-6 Summary of findings, suggestion &conclusion 72-79

Bibliography 80

Annexure 81-84

LIST OF TABLES

Table. No. Table depicting Page. No.

1 Table showing data based on age. 47

2Table showing data based on rating of call quality.

483 Table showing data based on rating of the network

coverage.49

4 Table showing data based on concern of call dropping 50

5 Table showing data based on ability to call at the firstattempt

51

6 Table showing data based on the calls made to thecustomer care help line in the last one-month.

52

7 . Table showing data based on finding the InteractiveVoice Response System (IVRS) user friendly

53



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8 Table showing data based on finding the executivesfriendly with a helpful attitude

54

9 Table showing data based on rating the ability to giveinformation about various rate/plans/schemes/offers

55

10 Table showing data based on the registration ofquery/complaint in the last one month

56

11 Table showing data based on the rating the ability to listenand understand the query/concern

57

12 Table showing data based on answering mode of thequery/concern satisfactorily

58

13 Table showing data based on getting a follow up call toresolve the query/concerns

59

14 Table showing data based on communication about thelaunch of new rates plans/schemes/offers in time

60

15 Table showing data based on communication about the

procedure/mode to upgrade the rate plans/schemes/offers

61

16 Table showing data based on finding theAIRTELadvertisement relevant and easy to understand

62

17 Table showing data based on receiving the monthly billswell in advance before the due date

63

18 Table showing data based on finding the payment reminderthrough SMS/calls useful:

64

19 Table showing data based on finding the bills error free 65

20 Table showing data based on rating of the AIRTELservices.

66

21Table showing data based on rating of the AIRTEL overallservices 67

22 Table showing data based on the activation/cancellation ofoffers/services like roaming STD/ISD etc taking placewithin the time committed

68

23 Table showing data based on the plan changes taking placewithin the time committed

69

24 Table showing data based on rating the time taken forservice restoration in case of barring/suspension

70

25 Classification of the data based on preference betweenprepaid and postpaid cellular service of AIRTEL

71

List of chart



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Chart. No. Chart depicting Page. No.

1 Chart showing Airtel user based on age group. 47

2 Chart showing Rating of call quality 48

3 Chart showing Rating of the network coverage 49

4 Chart showing concern of call dropping 50

5 Chart showing ability to call at the first attempt 51

6 Chart showing call made to customer care in the last onemonth.

52

7 Chart showing user friendliness of the Interactive VoiceResponse System (IVRS).

53

8 . Chart showing ability to information about various plans 54

9 Chart showing ability to information about various valueadded services

55

10 Chart showing registration of query/concern in the last onemonth

56

11 Chart showing ability to listen and resolve the query. 57

12 Chart showing answering the query/concern satisfactorily 58

13 Chart showing follow up of call to resolve thequery/concern

59

14 Chart showing communication about the launch of new

plans /schemes

60

15 Chart showing communication about the procedure toupgrade the new plans

61

16 Chart showing finding the AIRTEL advertisement relevant 62

17 Chart showing receiving the bill on time 63

18 Chart showing finding the payment reminder throughSMS/calls useful.

64

19 Chart showing finding the bills error free 65

20 Chart showing rating of the AIRTEL Services 66



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21 Chart showing rating of the overall AIRTEL Services 67

22 Chart showing Activation/Cancellation of services 68

23 Chart showing plan changes taking place within the timecommitted

69

24 Chart showing rating of the time taken for service

restoration.

70

25 Chart showing preference between Prepaid and Postpaid. 71

Executive Summary



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Topic: Customer retention strategy at Airtel

Customer retention is the key business issue. Effective churnmanagement allows the company to stay ahead of its competitors,

increases profitability and improves investor confidence.

There are no simple solutions; must adopt aggressive strategies

which cut across the customer lifecycle and underpin all business

processes. Customer Retention is not given the attention due to it, by

most firms. It has been found that customer retention has more impacton profits than market share, economies of scale and other variables

that are considered to provide competitive to a firm.

In fact, it has been found that companies, which reduce

customer defections by 5 per cent, could boost profits from 25 per cent

to 85 per cent.

The whole gamut of Customer Relation Management strategies

center around the basic idea of RETENTION so as to get the mass out

of their existing or potential customers.



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CHAPTER-1

INTRODUCTION



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Background of the study.

The premise of the telecommunications business is simple- there is no billing, no

revenue and hence, no profit, with the usual threat of survival. In the highly competitiveand growing Indian market, Bharti Tele-Ventures Limited Group Company is the leading

wireless access, data solutions, and long distance services provider. it has well

understood that the only way it can sustain and grow is by being price competitive, with

services that meet customer expectations for quality and continuous availability.

The whole gamut of Customer Relation Management strategies center around the

basic idea of RETENTION so as to get the mass out of their existing or potential

customers. Retention rate is a very good indicator of repeat buying behavior and is a

fairly good indicator of future behavior. Retention rate is a good indicator - not of loyalty

but of the lack of it; in other words, a low retention rate can signal that the customers are

not loyal, but a high retention rate does not necessarily indicate a strong loyalty.

Improving customer retention rate leads to significant increase in profits; profitability is

determined by three factors:

Industry retention rate:

First an assessment of average industry retention rate is required; the lower the

industry retention rates, the lower the leverage effect on profits. Current industry

retention rates have a direct impact on long-term customer value. When retention rates

are 50% or below, the average customer stays with the firm for two years or less. If a

firm improves its retention rates from 50% to 55%, the average retention increases to 2.2

years from 2.0 years. In contrast, if average retention rates in an industry are relatively

high, in the order of 75% or greater, then an increase of 5% in customer retention has a

far greater impact. The key to estimating average retention rates is to examine switching

cost in the industry. It is recognized that in industries with low average retention rates

individual firms may, through inventive strategies and service excellence programs,

improve their retention rates to significantly higher levels than the industry average.



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Segmentation issues:

Basic segmentation issues need to be addressed to determine if viable segment

exist and can be identified; otherwise there may be more profitable avenues for the firm

to pursue. _Attracting and keeping the highest-value customers is the corner stone of a

successful marketing program_. Underlying this statement is the necessary condition that

the market can be segmented and that identifiable segments vary in customer value. The

direct way to test this necessary condition is to apply volume segmentation to the market.

When high, medium, low and non-user segment exists and can be identified; the potential

rewards from focusing customer retention programs on the high users can be substantial.

Retention improvement for this segment could lead to significant increase in profits .An

insightful approach is one that combines volume segmentation and margins by customer

group.

Benefit segmentation is another approach, which may assist in determining the

viability of retention strategies. In particular, the firm is seeking to identify and measure

segments that value benefits beyond economy (i.e., the price sensitive segment). Benefits

such as reliability, responsiveness, confidence, and security offer the firm the opportunity

to establish a relationship with a particular segment. Customer seeking economies do not.

Components of life time value of customer:The firm needs to assess its ability to calculate the long-term value of a customer

or segments; in many case the necessary information may not available. Long-term

customer value (LTV) is based on the concept of customers as sources or streams of

profitable revenue, resulting from both their own increasingly knowledgeable usage and

the patronage of others whom they recommend their service supplier. The revenue curve

is determined by the degree to which each of the components-customer acquisition cost,

base profit, profits from increased purchases and higher balances, reduced operating cost,

profit from referrals, and profit from prices premium-contribute to profits over time.

LTV is likely to be significant when the following characteristics are present:



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1. High marketing expenses to obtain a new customer.

2. High administration cost to enter the customer into the firms system.

3. Relatively low servicing costs.

4. Reasonable margins on sales

5. High sales volume per customer.

6. High word of mouth.

The presence of the above factors will enhance the LTV of customers. The

individual firms needs to assess the degree to which these factors are present in

determining the potential of increasing profits through customer retention.

Customers of today are becoming smarter, more price conscious more demanding, that

led the customer to churn. We can categories the customers based on churn-frequency:

The habitual churner: who likes to change suppliers frequently? The benefits of

change.

Exploring the Value of Customer Retention

Customer retention is not only a cost effective and profitable strategy, but in

today's business world it is necessary. This is especially true when we remember that

80% of our sales come from 20% of your customer and clients. With these statistics we

need to address the question: why most marketing and sales campaigns are designed for

the new customers.

Sophisticated technology and database equipment have made it possible for

specialized firms to make attempts towards customer retention through database

marketing programs. Establishing a detailed client database will allow these companies to



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keep track of personal information and individual preferences of all their customers.

This enables them to provide better service and value. Just like the corner grocery

store owner keeps information on 200 customers in his head, the large superstore can

now keep track of 20,000 customers through its customer database. With effective

implementation of customer databases, companies will be able to re-establish contact

with customers, and will be able to work successfully towards increasing customer

retention, repeat sales, and customer referrals.

Churn: the loss of customers and the resulting loss in revenue for service

providers to achieve the objectives of the database and customer retention programs, the

entire campaign should be designed and carried out with the customer in mind. The

exercise will only be effective if the customer recognizes and associates some value with

being part of our database.

When Do Prospects Become Customers?

As the focus of our program shifts from acquisition to retention, the goals become

those of establishing loyalty, advancing the relationship and building a sense of

community, participation and affinity. As with prospecting, however, the data strategy

should also help determine whether customers do or do not meet the

Companys criteria for retention.

We need to look for factors that will feed back into the acquisition cycle to

reduce marketing costs, increase success rates or both. We also need to look for trends in

the length of customer relationships and determine if steps can be taken to avert the loss

of customers at critical points along theway. Even a small improvement in retention can

result in a significant rise in profitability and our overall ROI. Since all organizations

continually update customer data, reviewing and analyzing the data will identify

opportunities where up selling, cross- selling and service sales can be increased.



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The development of the data strategy as it relates to retention issues should

address suchquestions as:

What characterizes our best customers, and what keeps them loyal?

How do the information and service needs of new customers differ from those of

established customers?

Is it necessary to keep all prospect information once a customer relationship is

established?

What changes does the organization need to make as the relationship goes along?

How many service calls did customers place?

Why does one group or class of customers respond to opportunities when another

does not?

Choice of a CRM Platform



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A companys choice of a CRM solution will affect its ability to collect, analyze

and use the data. A balanced CRM solution should offer thefunctionality the organization

needs and provide the agility to help users address changing demands in the marketplace.

The ideal CRM solution should be timely in that it is quick to install and deploy, and it

should be cost-effective from its initial deployment through its long- term use.

All information about a particular customer should be in one database (not

separate databases for marketing, sales or support), and everyone in the organization

should be looking at the same data. Universal access to information by all departments

makes it possible to present a unified face to each customer.

In addition, the CRM solution should be customizable to reflect the unique

business outlook and preferences of the organization using it. It should be readily

reconfigurable to record new types of information or to discontinue collecting

information that is no longer relevant or is not useful. In short, it should be adaptable to

new requirements as the needs of the organization evolve.

Todays Internet technology enables companies to use customized relationshipmanagement services hosted by application service providers (ASPs). An Internet-based

solution can make it easy for prospects and customers to use self-service tools and

information request forms via the Web. The CRM solutions offered by the best ASPs

include management and administrative tools to monitor application usage and provide

expected levels of service.

Developing an effective data strategy for the CRM process is a way to develop the

information you need to better run your company. Ultimately, it comes down to deciding

whom we intend to pursue as prospects and retain as customers. The CRM solution

should provide us with the tools and flexibility to support that quest on an ongoing basis.

Intelligent analysis of data can indicate whether a companys activities are in line



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with its goals for customer acquisition and retention. It can be crucial to both the speed

and the quality of the companys response, and it can influence the future direction of the

product and service offerings.

Most importantly, a well-developed data strategy and its effective use

in concert with the

CRM system will allow us to be selective in the types of customers with

whom we choose to deal.

Integrated Customer Relationship Management

The development of the Customer Relationship Management

(CRM) marketing practice has made more and more people realize the

importance of strong customer relationship in building sustainable

competitive advantages in their market competitions and in generating

sustainable profits in the long run.

However, the currently popular CRM marketing practice often

produces disappointing outcomes. Surveys after surveys, a surprisingly

high rate of failure have been reported for CRM practices. The failure

rate of CRM systems ranges from 50% to over 80%. The major CRM

system developers received much lower customer satisfaction scores

than companies in other industries did. The more popular this

marketing practice gets, the more people realize that the current CRM

practice hardly manages customer relationship.

Integrated Customer Relationship Management (ICRM) is the

latest marketing strategy developed to meet the challenges raised

from daily marketing consulting services, as the existing marketing

theories and practices fail to solve the problems companies have in

their efforts to build strong customer relationship.



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Integrated Customer Relationship Management (ICRM) provides

a theoretical framework to define and to construct customer

relationship under market competitions. ICRM also provides a practical

guideline for the practice of effective Competitive Customer

Relationship Management.

The business philosophy behind ICRM is to put customer needs in

the center of marketing practices and integrates all major marketing

functions (including database marketing) into the Customer

Relationship Management process. The ultimate goal of the ICRM

practice is to help companies achieve sustainable competitive

advantages through strong customer relationship.

Current scenario of customer retention.

In the cellular sector, churn rates in the region of 30% are not

unusual, but a fewCompanies have managed to achieve rates of around 15%. Churn

management products are profiled and a model shows the typical cost

reductions available from a churn management programme.

No single measure will effectively combat churn. An approach is

required which focuses effort on each business area, most valuable

customers, and maximizing return on investment is required.

Key strategies include:



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Incentives and tariff bundles which target the most profitable

customers.

Loyalty schemes which are appropriate to the value of the business

saved.

Acquisition strategies which attract the right type of customer,

reducing fraud and bad debt.

Proactive customer service.

Customer retention solutions combine award-winning data

warehousing and analytics, consulting services, and industry-specific

data architectures to offer:

Accurate reporting on who is leaving your company.

Insights into the major factors influencing the decision to leave.

Industry-leading accuracy for predicting which customers are likely to

churn in the near future.

Proactive, rules-based analysis of account behavior.

An accurate early-warning alert system.

Flexible and scalable technology that can keep up with the

company's growth .



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Benefits Of Customer Retention

Customer retention affects both revenues and costs in the

equation of profitability:

Profit =Revenue Cost

Revenues are enhanced due to increased sales and costs are lowered

due to lesser generation and marketing costs of such revenues.

Scholars have outlined six economic benefits of customer

retention:

a) Saving on customer acquisition or replacement costs,

b) A guarantee of base profits as existing customers are likely to

a minimum spend per period,

c) Growth in per customer revenue over time,

d) A reduction in relative operating costs as firms can spread the

cost over many more customers and over a longer period,

e) Free of charge referrals of new customers from existing

customers, and

f) Price premiums as current customers usually do not wait for

promotions or price reduction before they make their purchases

Certain non-economic benefits from customer retention are:

increased customer trust, commitment and cooperation.



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Stratifies For Retaining Customer

In service marketing, customer retention has been

conceptualized as resulting from customer perceptions of services

quality and customer satisfaction. Scholars have advocated four steps

as essential to retain customers:

a) Define the market structure,

b) Segment the customer base and determine segment value,

c) Identify the segments service needs, and

d) Implement a segmented service strategy.

Seven Tips to CRM Success

1. Define your business objectives and goals against which results can

be measured

2. Given each CRM product, focus on three dimensions: People,

processes and technology.

3. Establish systematic approach to product management includingteam development, IT, marketing, services, sales management as well

as software.



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4. Clearly identify corporate and customer needs. research the

requirements and behavior of customers and guideposts to an

effective delivery of services.

5. Manage organizational change effectively. the human factor is

imperative to a projects success.

6. Invest in training-more essential than any piece of software.

7. Focus on proactive selling, relationship building so as to effectively

up sell and cross-sell.

Goals of CRM

To provide better customer service.

To make call centers more efficient.

To cross sell products more effectively.

To help sales staff close deals faster.

To simplify marketing and sales processes.

To discover new customers.

To increase customer revenues

.

What are the keys to successful CRM implementation?

Break CRM project down into manageable pieces by setting up

pilot programs and short-term milestones. Pilot project should

incorporate all the necessary departments and groups that get

projects rolling quickly and should be small and flexible enough

to allow make changes during implementation.

CRM plans should include a scalable architecture framework.



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The system should be flexible and expandable according to

data it might collect in future.

What data is collected and stored should be measured

carefully. The impulse will be to

Grab and then store EVERY piece of data, but there is often no

reason to store data. Storing useless data is waste of time and

money.

Recognize the individuality of customers and respond

appropriately. A CRM system

should, for example, have built-in pricing flexibility.

What causes CRM projects to fail?

Lack of an interactive communication among everyone in the

customer relationship chain can lead to technology being implemented

without proper support or buy-in from users. For example, if the sales

force is not completely sold on the systems benefits, they may not

input the kind of demographic data that is essential to the programs

success. One Fortune 500 company is on its fourth try at CRM

implementation, primarily because its sale force resisted all the

previous efforts to share customer data.

... A Few Thoughts worth Remembering About Customer

Retention:

"A customer service program must hold everyone in the organization

accountable."



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"The way we treat our employees is directly related to how they in turn

treat customers."

(Joe Sperry, Consultant to the telecommunications industry)

"In cellular, 1% churn can be translated into roughly $500,000 in

revenue."

"...96% of customer churn is lost with no feedback to provider."

"...A company has to determine its customer's definition of quality

service and then measure its performance against those expectations."

"One bad-mouthing customer can cost you 10 new customers." (Larry

Harris, President, Crico Communications paging company)



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CHAPTER-2RESEARCH

METHODOLOGY

Statement of the problem.

How can a service firm evaluate when retention strategies pay-

off?



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How does a service firm identify right strategies to retain

customers rather than acquiring the new customers?

This is more expensive as the saying goes that It is five times more

profitable to spend your marketing dollars to retain the customers that

you have than to use the dollars to beat the bushes for new

customers?" most people would agree with this statement.

Scope of the study:

For many firms improving customer retention rates can lead to

significant increase in profitability; 5% increase in retention can

increase profitability from 25% to over 85%. the more customers the

firm can retain over time, the more likely the firm will achieve greater

profitability and growth. recognizing the benefits of customer

retention, many firms are investing substantial resources in

relationship management programs to improve profitability.

Customer retention is not only a cost effective and profitable

strategy, but in today's business world it is indispensable. this is

especially true when we remember that 80% of our sales come from

20% of our customer and clients.



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Objectives of the study

To examine the current customer retention strategies being

deployed by AIRTEL.

To identify the faults/deficiencies in the existing customer

Retention Strategies.

To understand the importance of the components of Life Time

Value of Customers.

To understand the intricacies of Customer Relationship

Management.

Research Design:

This study employs systematic, objective and quantitative Research techniques using a

well-structured questionnaire. Customer Retention Strategies have been studied

extensively in the mobile service industry. the research investigation is restricted to the

existing/potential customers of AIRTEL in the Bangalore Metropolitan Area. the primary

data was collected using a well structured questionnaire. the descriptions also involve

cross analysis of respondents from different consumer segments entailing age, preference,

and usage as variable parameters.

Separate tables were furnished under specific headings, these were analyzed with

the help of descriptive analysis and percentage, and the data was analyzed and

interpreted. Detailed charts are developed showing the data obtained from the

respondents; the data collected from the respondents were organized, processed and

tabulated to depict the results.

Since our research investigation is highly qualitative in nature, the research data

has not been subjected to rigorous quantitative treatment. it is our belief and conviction

that the qualitative analysis is as useful as quantitative analysis in drawing significant

inferences and making projections.



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Sampling Technique.

Since the population for the study is quite large and since the study is limited by

the constraints of resources and time, complete enumeration of the population by census

method was not possible. hence, the project used random sampling technique.

Respondents were mostly selected from the youth segments, who were the major

respondents of the survey. the advantage of this technique is that it is both economical

and reasonably reliable.

Sample size.

The sample size comprises 100 respondents. the sample size of 100 respondents is

considered by us to make reasonable projection in the study of this kind.

Sample description.The sample description includes customers of Airtel in both prepaid and postpaid

sections. the youth segment was taken as the respondents because they are more prone to

switch to different service providers and usually they are the trendsetters. hence it is our

strong belief if we could develop strategies to retain them, its easier to retain the other

segments too.

Instrumentation technique.

Structured questionnaire.

Observation technique.



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Tables/charts.

Actual collection of data.

Data has been collected from various sources, there is a combination of both

primary and secondary data that has been used in this research. a well administered

questionnaire has formed the main profitable source of the primary data collection. this

enabled us to capture a first hand insight into the actual findings of the research.

Published articles relating to customer retention in the mobile service industry and

also papers submitted by renowned people have formed the source of secondary data.

Articles have been sourced from magazines and journals dealing with current issues in

mobile service industry. Internet has been a major secondary source for the extraction of

the experts opinion.

Limitation of the study.

This study was restricted to the city of existing customers of

AIRTEL in Bangalore

Metropolitan Area and therefore the results of this study can not

be generalized.

Due to the time constrain, an extensive research could not be

undertaken, therefore the sample size was restricted to 100

respondents only.



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Analysis of the data obtained from the questionnaire was done

on the assumption that the respondents gave the correct

information to the best of their knowledge.

Preferences and responses of customers could change over a

period of time necessitating periodical surveys.

CHAPTER-3

REVIEW OF LITERATURE



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Purpose of review.

The purpose of literature review is to explore the historical and

current scenarios of the customer retention rate in the mobile service

industry and general industry as a whole to retain customer.

Over and above, the purpose of the literature review is to

understand in totality the foundation of the research problem. The

abstracts in the following pages are some of the key literature

reviewed in this project:

SAS Powers Churn Management At Bharati Cellular

Using Enterprise Miner software and OLAP technologies, Bharti

built models that predict the customer propensity to churn and provide

information to drive product strategy. Every time a customer calls to

complain about network congestion, Anil Nayar knows that he/she's

only a drop call away from switching over to a rival cellular services

provider. that's a big reason why Anil Nayar, President (Mobility),

Bharti Tele-Ventures doesn't wait for complaints before starting to

troubleshoot.



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Instead, Nayar and his team pick up the truck load of data that

they maintain on their 7.37 lakh subscribers, crunch it to find out who's

most likely to dump Bharti's AirTel in favor of a rival operator. that

done, the next step is to figure out how to keep these potential

'churners' from leaving.

But does churn management work? Sure, says Nayar, pointing

out that prior to its implementation, the churn ratio at Bharti touched a

peak of 3 percent, but now it's a little over 2 percent. Still, that's not

really the point Nayar wants to make. Says he: If we hadn't done

anything about it, the rate could have gone beyond 3 percent.

considering that the average cost of customer acquisition in the mobile

business is as high as INR 3000, retention directly impacts the bottom

line.

Bharti cottoned on to churn management way back in November

1999, when in one of its quality meetings it was noticed that the

single-biggest factor in opportunity cost (or nonconformance in

telecom-speak) was churn. immediately, the company set about

pulling in all the data it had on it's customers. the idea was to melddiscreet bits of data into an intelligent whole, why customer

retention is important and its benefits of to the company something

that would betray the churner. was it poor service, network

congestion, or ill suited tariff plans that the customer was most

complaining about? If the probability of churn could be predicted

accurately, then not only could glitches in service be fixed, but the

bottom line could be improved.

As Bharti started dialoguing and looking for ways and means to

make sense of customer data, it led to American data mining major

SAS' churn management solution. Its software tools allow the user

to sift through enormous quantities of data that the business generates



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to find hidden trends and patterns that will help in customer retention.

Explains Gourish Hosangady, CEO & Managing Director, SAS

India, the online application enables a company to build a 360

degree view of its customers, and create customer specific strategies

for greater loyalty.

Customer retention, however, is only one part of churn

management. it also makes the overall organization much more

effective by identifying potential problems and opportunities.

Bharti was able to optimize its coverage by studying customer

complaints and usage behavior. In another busy commercial market, it

was prompted to set up extra powerful transmitters because an

analysis of the complaints revealed that there were more users

operating out of basement offices.

The end result of such analysis is that it allows Bharti to manage its

network investment much more effectively.

So how do the churns tools work? It starts with a search

database, where information is stored in a structured manner. Data

mining software pulls together all the raw data in whatever forms it is

held into one system and combs through it using artificial intelligence

techniques or complex mathematical models. the SAS data mining

techniques predict a customer's likelihood of cancellation or switchover

by scoring them on a scale of 0 to 1. if a customer scores 0.73 it

means there's a 73 percent chance of his/her churning. Ergo, the lower

the score, the more contented the customer. Once you know the

scores, it is easy to figure out which customers (like defaulters) to let

go.



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Bharti did not stop at churner identification. It went a step ahead

and used the data warehousing tool to launch new products. For

example, when statistics showed that a number of pre-paid subscribers

in Delhi were not locals, but business visitors who subscribed to AirTel

back in their hometowns, Bharti launched regional roaming for pre-

paid subscribers. Says Nayar, Data is a powerful resource, and it is up

to you to find business insights in it.

'Telcos Have To Minimise Customer Churn'

It's a fiercely competitive market, and for mature entrants in any

sector whether it is telecom, banking, insurance or retailing

retaining profitable customers is now the number one business plan.

SAS, a leader in business intelligence tools, provides operational

and analytical CRM (customer relationship management) solutions for

companies such as Citibank, Stan Chart, Orange, Good lass Nerolac

and BPL. these help in gathering data at the various multi-channel

customer contact points and in planning, targeting, acting and learningfrom the data generated. Recently, SAS implemented its customer

retention solutions at AirTel to reduce a big problem telecom carriers

are facing today churn. That means losing customers to another

carrier.

Gourish Hosangady, managing director and CEO, SAS India,

explains how IT solutions can help tackle churn, the common

denominator in the worlds liberalised telecommunications industry,

which is now hitting India too.

How bad is the problem of churn, and why is the telecomindustry more vulnerable than the other sectors?



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Customer acquisition and retention has been a concern for all

industries, but more so for the highly liberalized telecom sector. The

entry of the fourth cellular operator has fiercely increased competition

in this industry and so it is imperative to understand the reasons for

churn and to contain them. In India, the month on month churn is

estimated at 3.5%.

Churn costs European and US telcos close to $4 billion each year.

The annual churn rates globally of 25% to 30%. Carriers at the upper

end of this spectrum get no return on investment on new subscribers

because it takes typically three years to pay back the cost of replacing

each lost customer with a new one.

In your experience, what are the commonest reasons for

customers to switch from one service provider to another?

Some of the common driving factors for churn are poor performance,

poor customer care, rate plans and handset issues. Weve for instance

found that contact centers can drive away customers to a rival serviceprovider if a customer has to wait long before his problem is looked

into.

Globally, handset issues have made a difference too for instance, a

Telco not being able to provide GSM or CDMA service. Regarding

churn, something interesting thats been noticed is that its much

higher in the case of pre -paid services, with a churn rate of 8:1, than

in post-paid service where the rate is 3:1.

The idea of pre-paid cards is that the customer will mature to

become a post-paid one and so it pays to retain him too. After all, its



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five times more expensive to acquire a new customer than to retain an

existing one.

What are the best ways to prevent these high rates of

customer churn?

Effective customer service could be a deterrent to churn.

Branding and service differentiators also help in taking customers

away from competitors. All this wouldnt be difficult if you have proper

operational and analytical CRM tools in place that would help segment

and analyses customer behavior and predict their propensity to churn.

In a rapidly changing telecom market, it is necessary to

proactively strategize and service customers so as to retain the high

value ones. Analytical customer retention solutions would help identify

the high-, mid- and low-value customers and the valuable ones who

are most likely to cancel services, and their reasons for doing so. They

would also help in better campaign targeting and a more focused

strategy.

In the case of a client such as Sprint, what kind of demands

would a company thats a global leader in the telecom industry

have and how would CRM solutions help?

Our solutions give Sprint a central repository that makes things

easy for its marketers. The multidimensional data base (MDDB) thatSprint has, let internal sales and marketing groups research customer

information from their desktops via the Sprint intranet.



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Cellular Operators Turn To Software To Check Churn *

Indians may not change their mobile handsets too often, but

when it comes to cellular service providers, churn rates here are one of

the highest in the world --- 5-6 per cent per month, which largely

occurs in the pre-paid segment.

With the going slated to get tougher as fourth operators swinginto action, existing players have started harnessing software tools to

enable better churn predictions. The reasons for churn differ with each

market. Airtel, the Bharti groups cellular service, found dropped calls

and wrong tariff plans to be the chief culprits in Delhi. BPL Mobile in

Mumbai makes a distinction between voluntary churn, for reasons like

change of city or loss of handsets, and involuntary churn, prompted by

issues like large unsettled bills where the customer becomes

untraceable.

India being an emerging market has higher churn rates as

compared to developed markets like Australia and Hong Kong,

according to research firm Gartner. Says Gartner analyst Kobita Desai,

Developed markets like Australia and Hong Kong have a monthly

churn rate of 3 per cent, which usually occurs in the post-paid

segment. India, being an emerging market, is driven by the pre-paid

segment.

Airtel has been one of the earliest adopters of software to control

churn in the Indian market. the company implemented SAS Institutes



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customer retention solution a year ago in Delhi and plans to do the

same for Mumbai, when it launches services. BPL Mobile (Mumbai)

president and COO Deepak Verma said the company is in talks with

both SAS and computer associates to adopt a similar solution. its rival

Orange is also expected to follow suit.

While software solutions predicting churn are suddenly popular

with Indian companies now, they have been in use for about five years

in Europe and the US, said SAS India CEO and managing director

Gourish Hosangady. BPL currently uses an in-house software package

to predict churn. With volumes increasing, we need a more

specialized package which will build in more parameters to monitor

customer behavior. it will also help us to target the right customers

when we acquire subscribers, since this would have an impact on long-

term retention. Retention costs are at least five time lower than new

acquisitions, says BPLs Verma.

BPL puts the annual industry churn rate at 48 per cent in the pre-

paid segment and 30 per cent in the post-paid segment. BPLs case forgetting focused on churn solutions seems logical in the light of Airtels

imminent entry in the Mumbai market. In Delhi, Airtel has implemented

the SAS solution only in the post-paid segment, but plans to extend it

to the pre-paid segment as well, according to Mohit Deora, chief

marketing officer, Airtel (Delhi).An example of how the solution helps

is with respect to tariffs plans. We were able to realign tariff plans best

suited to customers and rationalize their billing cycles, said Deora

* Times news network [Thursday, July 18, 2002 7:58:43 am]

Customer Retention: Integrating Lifetime Value into Marketing

Strategies. *



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Everyone wants to retain their existing customers. few

companies, however, are implementing positive strategies aimed at

retention. Most companies are organized for acquisition.

Their advertising and sales programs are designed to find and

promote their products and services to new customers. the companies

are organized on a product or brand basis, not on a customer segment

basis. while they all have customer service departments, and most

have a customer service toll free number, they lack an integrated

marketing strategy that is directed at retention, and that defines

retention as the measurement of success. in this article, we will

explore the meaning of a retention strategy, showing how it can be set

up, and how lifetime value can be used to measure it.

You have often heard it said that "It is five times more profitable

to spend your marketing dollars to retain the customers that you have

than to use the dollars to beat the bushes for new customers." most

people would agree with this statement, even though they have no

way of proving it. Indeed, the majority of large American and Canadian

firms today are experimenting with database marketing programs

aimed, in large part, at retention. most of these companies are not yet

sure whether their experiments will be successful. a significant number

of the programs will fail and ultimately be scrapped. how do such

programs work? Lets look at the theory. I like to go back to the old

corner grocer. Prior to 1950, most groceries in the US and Canada weresold in small grocery stores. The proprietor would meet you at the

door. he knew you by name. He knew your preferences. He would put

things aside for you. he built his business through recognizing his

customers and doing favors for them. Customers were loyal to these

stores because of the recognition and personal attention they received.



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these small stores have been virtually wiped out through the advent of

supermarkets. Supermarkets have a much wider variety of goods.

The average grocery store had 800 SKUs on their shelves.

Supermarkets today have 30,000 SKUs. Mass marketing took over.

Prices came down. variety increased. food purchases fell from 31% of

the average family budget in 1950 to about 10% today; yet the food

we buy with that 10% is better in quality and quantity to what we

bought with 31% in 1950. We have all gained.

At the same time, we have lost something valuable. Companies

today have tens of thousands in some cases millions-- of customers.

we do not know who they are. We cannot recognize them and talk to

them as the old corner grocers did. Loyalty has disappeared.

Customers are loyal until tomorrows newspaper, when they see a

coupon for something at another store and whoosh, they are gone.

what is true of grocery stores is also true of department stores, drug

stores, hardware stores, office supply stores, banks, movie theatres

virtually every sales organization today.

What has begun to change this picture has been the advent of

computers. In the years, computers have become so sophisticated and

powerful, and their prices have become so inexpensive, that it is

possible to keep in a computer today the kind of information that the

old corner grocer kept in his head, and to use that information to

recognize and do favors for our customers. by setting up a customer

database, and using it to start a dialog with their customers, some

companies have been able to reestablish contact with their customers

designed to build loyalty, referrals and repeat sales. Retention building

is possible.



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There is one key principle at work here, however. database

marketing only works to build retention if the customer benefits from

the retention strategies. It works if the customer says to herself, "Im

glad that Im on that database, because" The company running the

database has to complete the sentence by designing and running

programs that capture the loyalty of their customers. if the customer

does not see some value to herself in the database activities, she will

chuck out your newsletters unread. She will ignore your

communications.

She will leave your gold cards in her top bureau drawer. for the

database program to be successful, the marketer must design the

program from the customers point of view. if you can come up with a

strategy that makes customers happy, then they will reward you with

something that you want, but which costs them next to nothing:

loyalty. What are these strategies?

Membership cards and membership programs Welcome and thank you communications

Satisfaction surveys, followed up by phone calls and letters

Beefed up customer service, empowered to solve problems

Enhanced technical support with follow up satisfaction calls

Frequent buyer programs which permit customers to build up equity

Event driven communications that are meaningful to the customers

lives

Databases that keep track of customers purchases, preferences,

complements and complaints, which are used to carry out loyalty

building services and dialogs.



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Integrated marketing programs where the advertising, direct

communications, customer service, database marketing and sales

programs are all orchestrated together and designed to build loyalty.

Segmentation of the customer base by lifetime value groups, and

different marketing programs designed for each segment. Article by:

Arthur Middleton Hughes

Methodology of literature review.

Methodology of literature review encompasses different facets of

information sources concerning customer retention. It started withsearch in the Management Magazines, Text Books, and lots of other

Marketing Text and Journals.

Information on customer retention strategies were mostly

available on the web sites, lots of articles and presentation on the web

sites were analyzed and used in the research for better understanding

of the topic. (A list of website has been provided in the Annexure)

Conclusions from literature review.

After an extensive literature review, the study has revealed the

following conclusions:

Everyone wants to retain their existing customers; it is five times

more profitable to spend the marketing dollars to retain the

customers than to use the dollars to beat the bushes for new

customers.



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SAS' churn management solution. It is software tools that

allow the user to shift through enormous quantities of data that

the business generates to find hidden trends and patterns that

will help in customer retention.

The online application enables a company to build a 360-degree

view of its customers, and create customer specific strategies for

greater loyalty.

The SAS data mining techniques predict a customer's likelihood

of cancellation or switchover by scoring them on a scale of 0 to

1.

It is necessary to proactively strategize and service customers so

as to retain the high value ones.



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CHAPTER-4

COMPANY PROFILE



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Bharati Tele-Ventures Ltd. (BTVL)

The premise of the telecommunications business is simple- there is no billing, no

revenue and hence, no profit, with the usual threat of survival. In the highly competitive

and growing Indian market, Bharti Tele-Ventures Limited Group Company is the leading

wireless access, data solutions, and long distance services provider. it has well

understood that the only way it can sustain and grow is by being price competitive, with

services that meet customer expectations for quality and continuous availability.

Bharti Tele-Ventures Ltd (BVTL) was incorporated on July 7, 1995 as a public

limited company. BTVL is a leading private sector provider of telecommunications

services. By the end of April 2004, it had an aggregate of 7.6 million customers, out of

which over 7 million were mobile customers. Among the 23 circles in India, the company

offers mobile services in sixteen, it also provides fixed line services in 5 circles.

The company complements its mobile and fixed-line services with national and

international long distance service. it has a submarine cable landing station at Chennai,

which connects the submarine cables between Chennai and Singapore. By leveraging its

nation-wide fibre optic backbone, last mile connectivity in fixed line and mobile circles,

VSATs, ISP and international bandwidth access through the gateways and landing

stations, the company provides reliable end to end data and enterprise services including

VSAT and internet services to the corporate customers.



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Business is conducted through its subsidiaries. the company holds 99.7% in

Bharti Cellular Limited mobile circles except the circles of Punjab, AP, Karnataka, where

it holds 100%.

It even holds 100% in Bharti Infotel Limited which operates in fixed line, long

distance and group data services. Finally, Bharti Aquanet Ltd. holds 51% and also owns

landing station in Chennai. base. this has made Bharti the largest GSM mobile service

provider in the country

Fixed-Line: Bharti was the first private sector operator to provide fixed-line services in

India. Currently they provide fixed-line services in the circles of Madhya Pradesh,

Chattisgarh, Haryana, Delhi, Karnataka, and TamilNadu. the circles have high

telecommunications revenue potential especially for carrying data traffic.

Long-distance, group data and enterprise services: Long distance and enterprise

services gets enormous support from the submarine cable landing station at Chennai. this

also facilitates the company to offer best value to the customers. the company matches

the mobile and fixed-line services with national and international long distance services

and provides these services across India.

Mobile footprint

The company believes that the demand for mobile services in India will continue

to grow rapidly as a result of the following factors:

Lower tariffs and handset prices over time.

Constant growth in the category of Pre-paid customers



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Continued development of Indias economy leading to greater economic growth.

Greater variety and usage of value added services.

Strategies of the Company

Capture maximum telecommunications revenue potential with minimum

geographical coverage.

Position itself to tap Data transmission opportunities and offer advanced mobile

Data services.

Focus on satisfying and retaining customers by ensuring high level of customer

satisfaction.

Leverage strengths of its strategic and financial partners

Emphasizes on Human Resource Development to achieve operation efficiencies.

Focus on Telecommunication to enable the company to better anticipate industry

trends and capitalize on new telecommunications related business opportunities.

Human Resources



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It has been ranked as the 14th best employer amongst the top 25 companies in

India. It is also the only company whose HR Department has received a special award for

aligning People Systems to business need.

Their strong beliefs that people are the key differentiators and make the biggest

difference for a successful business has encouraged and made them to create an

organization powered by unique structure, systems and leadership style.

The company nurtures an environment where people are respected and their

uniqueness is valued. This has resulted in a vibrant, productive, people oriented and

progressive workplace.

Their business and people philosophy is guided with a framework of strong values

and has resulted in differentiating them as an employer of choice in todays market place.

Formal job description documents are issued to all the employees clearly

mentioning key results area. They believe that an individual can be effective only when

he/she knows what is expected of him/her.

This has helped the company in setting goals, communicating to each of the

employees about the expectations from them and also in establishing role clarity.

Key Strengths

Bharti Tele-Ventures have created strong brand name recognition and a reputation

for offering high quality services to its customers. Not only does it have a quality

management team with a vision and proven execution skills, it also has strong

relationships with international strategic and financial investors. Some of them are:

Sins Tel, Warburg Pincus, International Finance Corporation, Asian Infrastructure

Fund Group and New York Life Insurance.

Future Plans

The company is considering the proposal of pumping in Rs.2,000 cr in

the current fiscal, out of which around 65% of the investment is

expected in the mobility business and the balance in fixed-line

services. The company has also plans to list on the NASDAQ in 2005-5,



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which is likely to be another trigger. In terms of top line revenue,

mobile telephony services are expected to fetch about 60% and the

rest is expected to come from fixed-line services. The company is also

planning to acquire companies in East Asia, West Asia and Africa. It

also intends to raise Rs.3, 000cr through a planned overseas listing.

Following its recent acquisition of Hexacom in Rajasthan, the Bharti

Group firm is considering the acquisition of one more company in the

country by the end of this financial year.

Company-AIRTEL

Airtel comes to us from Bharti Cellular Limited - a part of the

biggest private integrated telecom conglomerate, Bharti Enterprises.

Bharti provides a range of telecom services, which include Cellular,

Basic, Internet and recently introduced National Long Distance. Bharti

also manufactures and exports telephone terminals and cordless

phones. Apart from being the largest manufacturer of telephone

instruments in India, it is also the first company to export its products

to the USA.

Bharti Enterprises has been at the forefront of technology and

has revolutionizedTelecommunications with its world class products and services.

Established in 1976, Bharti has been a pioneering force in the telecom

sector with many firsts and innovations to its credit. Bharti has many

joint ventures with world leaders like Singtel (Singapore Telecom);



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Warburg Pincus, USA; Telia, Sweden; Asian infrastructure find,

Mauritius; International Finance Corporation, USA and New York Life

International, USA.

Bharti is the leading cellular service provider, with a footprint in 15

states covering all four metros and more than 7 million satisfied

customers.

Airtel's the leading mobile service provider is now present across 135

towns in Karnataka and is available over 58 showrooms and 13000

outlets .To help serve the customer better Airtel Karnataka has three

offices, one each in Bangalore (Bangalore Zone), Hubli (North

Karnataka) & Mangalore (South Karnataka).

Vision

T o make mobile communications a way of life and be the customers'

first choice.

Mission

To meet the mobile communication needs of customers through:

Error- free service delivery



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Innovative products and services

Cost efficiency

Unified Messaging Solutions

BHARTI VALUES

Innoventuring

Generate and implement entrepreneurial and innovative ideas, which

will continuously create new growth engines.

Customer First

Committed to delivering service beyond the expectations of the

customer. The quality of customer responsiveness clearly differentiates

us from others.

Performance Culture

Benchmark the processes and performance against world-class

standards. Distinguishing between performers and non-performers andby valuing achievement at the individual as well as the team level. A

culture of inclusiveness where feedback, learning and ideas are

actively encouraged, sought and acted upon.

Valuing Partnership

Committed to building exemplary relationship with the partners,

which stand on the principles of mutual trust and mutual growth.

Valuing People



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Nurture an environment where people are respected and their

uniqueness is valued. Belief that people are the key differentiators.

Responsible Corporate Citizenship

Committed to making a positive and proactive contribution to the

community. as a responsible corporate citizen the company will

contribute to and abide by environmental and legal norms.

Ethical Practices

Uphold the highest ethical standards in all internal and external

relationship. The company will not allow misuse or misrepresentation

of any kind.

Awards:

Consecutively for four years 1997, 1998, 1999 and 2000, AirTel has

been voted as the Best Cellular Service in the country and won the

coveted Techies award.

The Asia Pacific Award for the Most Innovative HR practices-2000

The Golden Peacock National Training Award for excellence in

Training practices-2000

The Golden Peacock National Quality Award-2001

Airtel & Visual Identity



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For a brand to be successful, it must build enduring relationships

with its different audiences. Integral to this relationship is the visual

image of the brand the consumer carries in his/her mind. The Airtel

brand image is created through the consistent application of a

carefully developed visual identity, which helps Airtel distinguish itself

in a cluttered market. Airtel's visual identity helps create instant brand

recall and strengthens the relationships that its audiences have with it.

The Airtel visual identity has different elements that work

together to create a strong and consistent identity for the brand. The

most important of these are:

The Airtel Logo



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The Airtel logo is a strong, contemporary and confident symbol

for a brand that is always ahead of the rest. It is a specially drawn

wood mark.

The Airtel Image style

It incorporates two solid, red rectangular forms whose counter form

creates an open doorway.

The Airtel Typographical style

The title case lettering with its capital 'A' was deliberately chosen

to reinforce the brand's leadership position. The red dot on the

letterform 'I' cues Airtel's focus on innovation. The words 'Express

Yourself' are wreintt in Humanist 777 BTtypeface, very much part of

the brand identity.

The Airtel Color Palette

The lettering is grey so that the pure black of Airtel is visually

unharmed.

Airtel Advertising

The relationship between advertising and visual identity is a

complex one and must be understood clearly. Campaigns are born in

response to market trends, to competitor activity, to new product

launches. Unlike visual identity, advertising must be constantly

reinvented to engage target audiences and garner mind share. yet,

applications in this area entail large budgets and are surely the most



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visible of all brand identity channels. they present extremely powerful

opportunities to reinforce Airtels visual identity and therefore can be

equally dangerous if they misuse or dilute it. remember that the way

an ad looks does not constitute Airtels visual identity.

The brand's visual identity is made up of the logo, the

typographical style, the color palette and the image style.

Services

Airtel Prepaid

Airtel Prepaid, the Ready Cellular Card from Airtel comes from

Bharti Enterprises, India's leading integrated telecom service provider.

Going mobile with Airtel Prepaid is a new way of life.

With a host of great features, also simple to use, Airtel Prepaid

makes everything that are dreamt and believed, possible

Aisi azadi aur kahaan?

Airtel Prepaid, the Ready Cellular Card from Airtel comes to you

from Bharti Enterprises, India's leading integrated telecom service

provider.



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Freedom Of Speech Redefined.

Going mobile with Airtel Prepaid is a new way of life. Some of the

many advantages that a customer will enjoy with Airtel Pre-paid.

Total Cost Control

Enjoy the liberty of total cost control with Airtel Pre-paid! Re-

charge as much as the customer feels the need to! This is called a

complete freedom!

No Rentals

Buy an Airtel prepaid card without having to pay any rentals!

No deposits

The Airtel prepaid card comes without having to pay heafty

deposits!

STD/ISDfacility till the last rupee

Now experience complete freedom like never before with Airtel!

The STD/ISD facility allows the customer to make long distance calls in

India and Overseas from the cellular phone!

Instant Balance Inquiry



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Check the talk-time instantly by calling the toll-free number!

60-second pulse

Airtel provides the customer with a 60-second pulse rate!

Freedom for the customer to experience like never before!

Instant Recharge

The customer can avail themselves of instant recharge on the

pre-paid card with just a few simple steps!

24-hour recharge facility

With the round-the-clock recharge facility, the customer

recharges Airtel prepaid card anytime, anywhere!

Caller Line Identification

Call Line Identification gives the customer the power to know thephone number of the calling party even before they answer the call,

thus giving them the choice to either reject or take the call. It provides

the added advantage of saving the incoming number directly in the

Handset Phone Book, so that the next time the customer want to call

the same person, they do not need to retype his/her number, simply

they can use the phone book.

Call Divert, Call Hold and Call Wait

The customer can avail themselves of special services like call

waiting, call hold and call divert all with their Airtel prepaid card!

Short Messaging Service (SMS)



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With Airtels Short Messaging Service (SMS), the customer can

send messages and jokes to their friends and colleagues, anytime

anywhere!

SMS based Information Services

With Airtel's SMS based information services, the customer can

get upto-the-minute cricket scores, order flowers as well as send

couriers or check their daily horoscope!

Voice Mail service

Voice Mail lets the customer receive messages even when their

handset is switched off or when they are outside the coverage area.

They can listen to their messages whenever they feel like, from

anywhere in the world. Voice Mail can store up to 75 messages, with

each message of two-minute duration.

Airtel Postpaid

Airtel welcomes the customers to a vibrant world of unlimited

opportunities. More exciting, innovative yet simple new ways to

communicate, just when they want to, not just through words but

ideas, emotions and feelings; to give them the unlimited freedom to

reach out their special people in your special way.

Experience complete freedom

The Airtel Post-paid customer can enjoy the following facilities -

Easy Billing

The luxury of viewing details of their last 3 billing cycles and the

convenience of paying their Airtel bill online!



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Call Divert, Call Hold and Call Wait

Special services like call waiting, call hold and call divert all

with the Airtel

Postpaid connection!

Short Messaging Service (SMS)

With Airtel's Short Messaging Service (SMS), the customer sends

unlimited messages and jokes to their friends and colleagues, anytime

anywhere!

Caller Identification

Call Identification gives the customer the power to know the

phone number of the calling party even before they answer the call,

thus giving them the choice to either reject or take the call. it provides

the added advantage of saving the incoming number directly in theHandset Phone Book.

Voice Mail

Voice Mail lets the customer receive messages even when their

handset is switched off or when they are outside the coverage area.

They can listen to their messages whenever they feel like, from

anywhere in the world. Voice Mail can store up to 75 messages, with

each message of two-minute duration.

STD/ISD Facility

The STD/ISD facility allows the customer to make long distance

calls in India and Overseas from their cellular phone!



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Roaming (National and International)

Airtel's Roaming service allows you to use your mobile phone to

make or receive calls from almost anywhere in India and abroad! Enjoyroaming within the country as well as across international destinations!

Airtel MTV Card

The best offers and the coolest of bargains on the hippest stuff

on the market, download the hippest tunes from the hottest new tracks

and dress up your phone with the latest wallpapers, ring tones, picture

messages, screensavers and backgrounds! All this and loads more!

Only with the MTV Airtel SIM!

Airtel Roaming gives the customer two great options:



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Airtel National

The customers can enjoy roaming in India across 42 partners networks and over

750 cities.

Airtel International

The customer can roam across international destinations, in nearly 119 countries

including USA, Canada, and UK etc. with 284 partner networks.

Long Distance

The National Long-Distance facility allows the customers to make long distance

calls in India and Overseas from their cellular phone. This service is applicable to both

Postpaid and Prepaid customers

Specials:

E a s y C h a r g e

Recharge as and when customers like! New Airtel Prepaid brings to the nation a

never before 'Azadi'. Giving every Indian the right to be unconditionally, completely

free! Free to never run out of words, explore every opportunity, reach out to anyone,

anywhere and express themselves. the customers can discover the world of New Airtel

Prepaid; discover freedom like never before!

Other Value added services with Airtel

To subscribe for this service the customers can simply fill in the online AirTel

form. Once the form has been processed they will be contacted at the earliest to complete

the remaining formalities. if the customer wish they could walk up to any of the AirTel

showrooms across their city to apply for a connection and get activated instantly by



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paying in cash/ credit card.

Airtel Positioning-Repositioning

From _Touch Tomorrow_ top _ Live Every Moment_

In late 2002, Bharti Cellular Ltd. (Bharti), Indias largest cellular telephone

company released a television Commercial (TVC), which despite using the oft-repeated

celebrity endorsement route

was unusual in terms of its

celebrity selection. Instead of

using the usual movie

stars/sports celebrities, it

chose one of the countrys

most successful musiccomposers, AR Rahman to

promote its brand.

The campaign

attracted considerable media attention because this was the first time Rahman had agreed



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to do a television commercial and also because, Rahman had been paid Rs.10 mn for the

campaign, a sum usually unheard of, for celebrity endorsers in India. The campaign

received brickbats as well as bouquets in the media, both for the selection of Rahman and

the TVCs execution. However, Bharti claimed to have scored an ace in terms of getting

Rahman to compose five exclusive Symphonies downloadable as rind tones for Airtel

users.

The TVC was a part of the brand repositioning and restructuring efforts for Airtel,

as part of which, Bharti changed the brands tagline in early-2002 from touch tomorrow to

live every moment. thee company also decided to undertake a compressive brand-

building program and choose the slogan unlimited Freedom for the same. commenting on

these changes, company source said, Airtels brand identity and campaign will now have a

new younger and international look and feel that builds on the earlier positioning.

Bhartis massive media expenditure plans were no surprise, considering the fact

that it was the largest cellular telecom company in the country reaching over 600million

people in 16(out of 29) states in India. the company posted revenue of Rs.8.48 billion and

a net loss of Rs.1 billion in the financial year 2000-01. the Airtel brand (and the prepaid

card services brand, Magic) and top-of the mind recall amongst cellular phone users and

enjoyed a leadership position in most markets. Industry observers attributed it to Bhartis

strong brand and positioning strategies.



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Repositioning Airtel _ Once again!

Owing to consistent marketing efforts, the Airtel and Touch Tomorrow Campaign

became very popular. therefore Bhartis decision to withdraw this campaign (Touch

Tomorrow) in 2002 came as a surprise to many. the new campaign was accompanied by a

change in the logo as well.

The data behind the new logo was to give Airtel a younger look. the logo

symbolizes innovation, energy and friendliness.

As a part of its restructuring and repositioning exercise, Bharti unveiled new

brand Architecture. the proposed two-tiered architecture has categories under two head

wired and wireless. all the wireless products were placed under the Airtel brand, which

also included tango, free net and magic. according to company sources, the objective of

this new architecture was to establish Bharti as a global telecom company.

The company reportedly allocated Rs.1 for media coverage and other brand

building activities. Commenting on the new brand identity of Airtel, a Bharti

spokesperson said, Airtels brand identity and campaign will now have a new younger and

international look and feel that builds on the earlier position of _Touch Tomorrow_

injected with renewed energy and heightened optimism.



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CHAPTER-5

DATA ANALYSIS ANDINFERENCES.



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Quantative Data With Inferences And Observations

The quantitative data have been reinforced with our observations through personal

enquiry notes and inferences have been derived accordingly.

Table.No.1

Showing prepaid and postpaid customers based on age:

Source: primary data

Interpretation: more no. of users is in prepaid between the age group of 22-27 the

average the total percentage of both prepaid and postpaid is 50%.

Graph.No.1

Prepaid and postpaid customers based on age

0

510

15

20

25

30

35

40

45

50

prepaid postpaid total percentage

18-22

22-27

28-35

Source: Table no. 1

Inference: Maximum no. ofAIRTEL service user are in the age group of 22-27 and


Age Prepaid Postpaid Total Percentage

18-22 24 15 39 39%

22-27 26 24 50 50%28-35 5 6 11 11%

TOTAL 55 45 100 100%


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majority of them uses prepaid services. Also retention rare is high in this age group.

Table.No.2

Showing prepaid and postpaid customers based on rating of the call quality:

Category Prepaid Postpaid Total Percentage

Excellent 18 15 33 33%Very good 11 13 24 24%Good 20 14 34 34%Average 5 2 7 7%Poor 1 1 2 2%Total 55 45 100 100%

Source: primary data

Interpretation: 34% of both prepaid and postpaid customers rate the call quality as good