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Reliance Infocomm

"Our strategy is to make money on scale, not from skimming the market," Anil Ambani said.

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ACKNOWLEDGEMENT I would like to thank from deep of our heart our esteemed faculty Dr.

Madhvendra Mishra for providing me with a rare combination of professional expertise and personal touch. It would have been impossible to complete our paper on such a big group without his valuable suggestions and able guidance. It is hard to envisage the problems i would have faced without them. I would also like to thank all other persons who helped us on various occasions and kept our morale up and things going.

KANIKA ARORA(MBA200514)

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ABSTRACT
Reliance Infocomm offers a complete range of telecom services, covering mobile and fixed line telephony including broadband, national and international long distance services, data services and a wide range of value added services and applications that will enhance productivity of enterprises and individuals. Reliance IndiaMobile, the first of Infocomm's initiatives was launched on December 28, 2002, the 70th birthday of the Reliance group founder, Shri. Dhirubhai H. Ambani. This marks the beginning of Reliance's dream of ushering in a digital revolution in India by becoming a major catalyst in improving quality of life and changing the face of India. It aims to achieve this by putting the power of information and communication in the hands of the people of India at affordable costs. RIC is currently offering its wireless services in 1,100 towns and cities across India. In January 2004, Reliance Infocomm (RIC) acquired 100 per cent of the undersea cable company, FLAG Telecom for US$ 211 million through Reliance Gateway Net Limited, a wholly owned subsidiary of RIC. Reliance WebWorld : Reliance's strategy of vertical integration Reliance WebWorld is the retail interface initiative of the Infocomm juggernaut and a part of Reliance's strategy of vertical integration.

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INDEX

RELIANCE GROUP VISION MISSION FACTS RELIANCE INFOCOMM PLANS AND IMPLEMENTATION STRATEGY TO PROMOTE INFOCOMM VALUE CHAIN TECHNOLOGY ENTRY STRATEGIES MARKETING STRATEGY STRATEGY OF SINGLE PLAN STRATEGY OF Delayed-Launch PREPAID STRATEGY PORTER’S FIVE COMPITITIVE FORCES SWOT: TIEUPS AND ACQUISITIONS CABLE AND WIRELESS FLAG Telecom CRITICISM ON STRATEGY ADOPTED BY RELIANCE

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RELIANCE GROUP

ABOUT The Reliance Group was founded by Dhirubhai H. Ambani is India's largest business house. Total revenues : Rs 99,000 crore Cash profit : Rs 12,500 crore Net profit : Rs 6,200 crore Exports : Rs 15,900 crore Reliance Group revenue is equivalent to about 3.5% of India's GDP. The Group contributes nearly 10% of the country's indirect tax revenues and over 6% of India's exports. Reliance is trusted by an investor family of over 3.1 million - India's largest. Every 4th investor in India has Reliance shares. Reliance is the only Indian private company to make the Fortune 500 list of the world’s largest corporations FACTS Some facts about Reliance Group:

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Company Profile The Reliance Group founded by Dhirubhai H. Ambani (1932-2002) is India's largest business house with total revenues of over Rs 99,000 crore (US$ 22.6 billion), cash profit of Rs 12,500 crore (US$ 2.8 billion), net profit of Rs 6,200 crore (US$ 1.4 billion) and exports of Rs 15,900 crore (US$ 3.6 billion). The Group's activities span exploration and production (E&P) of oil and gas, refining and marketing, petrochemicals (polyester, polymers, and

intermediates), textiles, financial services and insurance, power, telecom and infocomm initiatives. The Group exports its products to more than 100 countries the world over. Reliance emerged as India's Most Admired Business House, for the third successive year in a TNS Mode survey for 2003.

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On December 28th 2002, Reliance Infocomm created a history by connecting more than 600 cities by a 60,000 Km Tera-bit capacity optical fiber cable. The total Capex for Reliance Infocomm was expected to be around 25,000 Cr but it was soon revised to 18,000 Cr. This fall in the capex was attributed to the fall in the international telecommunication equipment prices. Till 2003, around 9600 Cr of this capex is spent and the rest is expected to be spend in the next 18 to 24 months. Reliance Infocomm offers a complete range of telecom services, covering mobile and fixed line telephony including broadband, national and international long distance services, data services and a wide range of value added services and applications that enhances productivity of enterprises and individuals. As per the equity structure of Reliance Infocomm, Reliance Industries (RIL) and the Ambanis hold 45 per cent each with employees 10 per cent equity. Reliance India Mobile, the first of Infocomm's initiatives was launched on December 28, 2002, the 70th birthday of the Reliance group founder, Shri. Dhirubhai.. Reliance Infocomm wishes to extend its efforts beyond the traditional value chain to develop and deploy telecom solutions for India's farmers, businesses, hospitals, government and public sector organizations.

Vision "We will leverage our strengths in executing complex global-scale projects to make leading edge information and communication services affordable by all individual consumers and businesses in India. We will offer unparalleled

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value to create customer delight and enhance business productivity. We will also generate value for our capabilities beyond Indian borders while enabling millions of India's knowledge workers to deliver their services globally". Mission "Make the tools of infocomm available to people at an affordable cost, they will overcome the handicaps of illiteracy and lack of mobility", Dhirubhai Ambani charted out the mission for Reliance Infocomm in late 1999.

Corporate Philosophy The corporate philosophy that reliance Infocomm follow is short, simple and succinct - "Think big. Think differently. Think fast. Think ahead. Aim for the best".

Idea behind Reliance Infocomm

"Make the tools of Infocomm available to people at an affordable cost, they will overcome the handicaps of illiteracy and lack of mobility", Dhirubhai Ambani charted out the mission for Reliance Infocomm in late 1999.

Growth Working at breakneck speed, from late 1999 to 2002, Reliance Infocomm built the backbone for a digital India - 60,000 kilometers of fiber optic backbone, crisscrossing the entire country. The valuation of Reliance
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Infocomm, the telecom and convergence major of the Reliance group, has been pegged at about Rs 60,000 Crore (roughly around $13 billion), even as six major private equity investors are understood to be in the race for a 10 per cent stake in the company. Presently Reliance Info has 8.5 million subscribers, taking the post-paid and pre-paid subscribers together. The company expects to hit the 10 million subscriber mark by September, and 15 million by March 2005. The company achieved a break-even in September 2003, and ended fiscal 2004 with a small net profit. Reliance Industries has a current market capitalization of about Rs 80,100 crore. Reliance Infocomm closed a $300 million syndicated term loan with a final maturity of seven years, in the company's first international borrowing. This is the largest international debt to be raised by any Indian telecom company, The company will have to pay 1.7% plus Libor in the first year for the $300 million loan. Alliances: 1. Reliance Infocomm and Intel join hands to accelerate the Internet revolution in India. Intel powered PCs and laptops to provide users instant Internet connectivity through Reliance India Mobile and other wireless products. 2. Reliance Infocomm brings Railway Booking windows to your mobile handsets Reliance Infocomm launches Railway Ticket Booking as part of R World in New Delhi, in association with Indian Railways

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Easy menu driven navigation on R World makes ticket booking most convenient ...from anywhere, anytime. No need to remember train names and reservation codes.



No need to plan your visit to the reservation counter or wait in queues.



Use any credit card - Master, Visa, Diners or Amex to book your ticket and get it delivered at your door step



Facilities to be extended to other cities in keeping with the rollout plans of IRCTC

COMPANY ANALYSIS Reliance Infocomm has US $ 5 Billion investment in state of the art Infrastructure which Lead to the explosive growth in Tele-density. It is fully integrated player with Pan India footprint and has aggressive roll out to capture dominant market share and create an entry barrier. It uses CDMA 1x Technology and has received FSP Licenses in 18 Telecom circles. It has First Call Center of 2,000 seats in Mumbai. It is focusing on following areas: E-Commerce Video on Demand Global Supply Chains Wireless Voice Software Revolution
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Universal Internetworking Intelligent Homes VoIP (Voice over Internet Protocol) Interactive Television Unified Messaging Virtual Reality Visual Communication Speech Recognition Next Generation Corporations Broadband Portal Digital Multimedia Library Continuously Upgradeable Networks Telecommuting

Reliance Infocomm lacks Transparency at end user level and is not spreading Technological Awareness. The company is also subjected to the thefts and forgery regarding Handsets provided by company. It is also facing many legislative barriers form government as well as its competitors.

New, Effective Marketing Model Earlier, Reliance had considered appointing channel partners, but dumped the plan once the DSA idea cropped up. (The DSA(direct sellers associations) model is applicable only for a few months.) The DSA model offers several advantages. One, the DSA and his staff can do personalized, direct marketing—in a manner not achievable by channel partners—at no

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expense to Reliance. Reports are that DSAs are utilizing all tools like fax, email, telephone, cable TV network, and one-to-one meetings to tell prospective customers about ‘Reliance India Mobile’. This is also building more hype for the service and allowing Reliance to spend a lot less on advertisement, but more importantly, enabling it to reach out to the optimally potential audience. From customer acquisition to verification and validation of the supporting documents, to collection of cheques and depositing them at the Reliance collection center, DAEs will handle all the back-end operations. Reliance is thus saved of huge amount of time, effort and money. The very appointment of a DSE ensures one connection for Reliance, as that’s one of the conditions for becoming a DSE. Thus, even before the start of the service, the company has a base of around 200,000 subscribers, whereas BSNL was able to get the same number four weeks after the launch of its CellOne cellular services. The model neatly combines the best features of the traditional channel model and the ‘Amway’ model. Reliance gets a ready subscriber base of 200,000 DAEs by default. Moreover, a whole bunch of backend operations is ‘outsourced’ to the DAEs for no fee. Single-Plan Initially, the company has opted for a single plan—Dhirubhai Ambani Pioneer Offer—so as to maximize the impact among subscribers and make achieving the magical number easier. The uniformity of one plan also helps customers grasp it easily and make them do a clear-cut comparison with

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other GSM and CDMA services. This speeds up the decision-making process of the customer, and in case a wrong decision is made, a 100-percent buyback allows subscribers to return their phones without any deduction within three months. Thereafter, an amount will be deducted depending upon the number of months left. Since there is one plan, it is easier for DAEs to make a sales pitch and close the deal at the earliest. However, in view of the high initial investment, the plan offers two schemes—normal and finance. For the normal scheme, one has to pay around Rs 21,000, while for the finance scheme; one pays an initial amount of 3,000 and postdated cheques of Rs 21,600.
The single plan allows better logistics management, which can result in significant savings for Reliance.

Implementation of the plans Reliance Infocomm Highlights 1999 The Dream, 1999 "Make a phone call cheaper than a postcard and you will usher in a revolutionary transformation in the lives of millions of Indians" - Dhirubhai Ambani (pic) equation illustration The Reality, November 15 Reliance Infocomm begins Project Planning 2000 May 10 Optic fibre laying process commences in Gujarat, Andhra Pradesh & Maharashtra

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2001

May 1 First Media Convergence Node made "Ready for Electronics" at Jaipur

2002

January 15 First Base Transceiver Station (BTS) made "Ready for Electronics" February 25 Obtains International Long Distance License from Govt. of India December 22 Commissions 1st Optic Fibre Backbone ring December 24 Establishes 1st Point of Interconnect (POI) in New Delhi December 27 Hon'ble Prime Minister of India, Atal Behari Vajpayee einaugurates Reliance Infocomm Hon'ble Union Minister for Parliamentary Affairs, Information Technology and Communications, Pramod Mahajan, inaugurates NNOC

2003

January 15 Introduces Dhirubhai Ambani Pioneer Offer for Reliance IndiaMobile service February 14 Launches Reliance WebWorld in top 16 cities March 31 Launches International Long Distance Services

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April 3 Commissions all backbone rings April 25 Introduces colour handsets May 1 Launches Reliance IndiaMobile Service commercially in top 92 cities with one million customers. June 10 Launches India's first wireless Point of Sale (POS) July 1 Introduces "Monsoon Hungama" Offer: Instant multimedia mobile phone and connection for just Rs 501.

Sets world record - acquires one million customers in 10 days July 3 Launches R Connect Internet connection cable Aug 26 Introduces Reliance IndiaPhone Fixed Wireless Phone and Terminal September 20 "Navratri" a data service in R-World posts a world record of 10 million downloads on the first day of the launch. September 30 R World clocks a phenomenal 1 billion hits in 1 month October 6

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Launches integrated broadband centre at Reliance WebWorld, Bangalore October 24 Deploys pilot of Home Netway in Mumbai October 30 Reliance becomes India's largest mobile service provider within 7 months of commercial launch November 3 Customer base touches 5 million November 12 Migrates to Unified License Regime November 16 Launches National Roaming November 21 Launches International SMS to 159 countries launched December 19 Adds 4500th Contact Centre Executive Contact Centre becomes the largest such facility deployed by any single Indian Service Provider 2004 January 12 International wholesale telecommunications service provider, FLAG Telecom amalgamates with Reliance Gateway, a wholly owned subsidiary of Reliance Infocomm February 9 Launches RIM Prepaid with attractive offer - For Rs 3500 get a Motorola C131 mobile phone and Rs 3240 worth of re- charge

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vouchers instantly and stay connected for 1 year February 17 Reliance subsidiary Flag Telecom announces FALCON Project - a major new Middle East Loop Terabits Submarine Cable System with links to Egypt and Hong Kong via India March 22 Reliance Infocomm launches multi-player gaming on RIM handsets - a first in India April 05 Reliance IndiaMobile introduces International Roaming facility to 172 countries, 300 networks April 23 Reliance Infocomm introduces first ever auction facility on Mobile phones through R World. May 27 Reliance Infocomm receives the Most Promising Service Provider of the Year 2003 (Asia Pacific) award at the Asia Pacific Technology Awards instituted by Frost & Sullivan. June 8 Reliance Infocomm introduces World Card - a Prepaid International calling card for affordable and convenient ISD calls from India. July 29 Announces India's First MPLS Global VPN Solution in partnership with MCI August 5

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Launches the first regional Customer Contact Centre in Chennai September 6 Mukesh D. Ambani, Chairman, Reliance Infocomm, receives Voice & Data "Telecom Man of the Year" award September 9 Introduces Railway Ticket booking from R World data applications suite of Reliance IndiaMobile October 12 Mukesh Ambani voted the world’s most infuential telecom person by UK-based publication Total Telecom. October 19 Reliance Infocomm bags the CDMA Development Group's 3G CDMA Industry Achievement Award for International Leadership. 2005 January 04 Reliance introduces first e-recharge facility in CDMA in India. January 24 Reliance IndiaMobile announces mega rural plan to cover 4 lakh villages and 65 crore Indians by December 2005. June 27 Shri Anil D Ambani is appointed Chairman of Reliance Infocomm.

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Present Situation And Future Plans • The impact of the Infocomm business on the consolidated results of Reliance Industries Limited for the year ended March 2004 is a loss of Rs 265 crore (US$ 61 million). • The Reliance Infocomm team is planning to put these problems behind and the customer will see a discernible difference. • Reliance Infocomm is also focusing on service quality and delivery and our valued customers can expect a substantial improvement in customer experience in the coming months. With the acquisition of Unified Access Services Licenses, all legal wrangling is now behind it. • Reliance Infocomm is expanding services from about 1,100 towns to about 5,000 towns in a phased manner, in order to reach un-served markets. This second phase expansion will result in Reliance Infocomm services being available to over 100,000 villages. • On completion of this expansion, Reliance Infocomm will have a capacity to cater to 40 million mobile subscribers. Reliance Infocomm will thus be well on its way to achieving a commanding position in the wireless communication market in India. • Data applications have been a key differentiating factor for Reliance Infocomm. • They will fortify this position further with new data services that vast sections of ordinary Indians can use, some of which will be in Indian languages. In this context, a significant ongoing technology effort by

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Reliance Infocomm is in Multi-lingual Speech Recognition in ten Indian languages. • Reliance acquired Flag Telecom in January 2004. Flag Telecom has a 55,000-kilometer long sub-sea optic fibre cable that connects sixteen of the world's top twenty businesses centers and reaches 75% of the world population. • Flag Telecom will also enable Reliance Infocomm reach out to global markets. • Having initiated a digital mobile revolution, the next big initiative of Reliance Infocomm is in bringing about a broadband revolution in India. • Reliance Infocomm is rolling out broadband services on its network in a comprehensive manner covering all products available in the narrow to broadband range. For organizations, broadband will involve access to high-speed connectivity to make transactions efficient, functions seamless and new economic opportunities abundant. • For homes, Reliance Infocomm broadband services will bring highspeed connectivity to avail exciting digital information, education and entertainment services. • Broadband services will also open tremendous opportunities for users to participate in the growing knowledge economy, through interactive services in education, health, entertainment, travel, banking and a host of other sectors. • More importantly, it will help improve productivity of all sectors of the economy and help bring about a knowledge revolution in India.

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• India will soon have the largest digital infrastructure in the world and will be among the largest mobile and broadband markets in the world.The dream at Reliance is that India should be known as Broadband Bharat.Reliance Infocomm will enable a Broadband Bharat that is attuned to the information age. • Reliance Industries has invested Rs 10,463 crore (US$ 2,393 million) in equity and convertible preference shares of Reliance

Infocomm.With investments in the last mile, these assets will be leveraged to generate superior returns from the Infocomm business in the ensuing future. • Reliance Infocomm may go public in 2005, Mukesh Ambani, chairman of Reliance Industries said in New York on 07th October 2004. Tele-Density for India (per 1000): 1997 - 2003

60 50 40 30 20 10 0 97-98 98-99 99-00 2000-01 2001-02 2002-03
20 23 29 44 36 54

Planning to invest Rs 25,000 crore in the Infocomm project, Reliance has already put in more than Rs 15,000 crore for infrastructure like optical fiber network

As per the equity structure of Reliance Infocomm, Reliance Industries (RIL) and the Ambanis hold 45 per cent each with employees/associates holding 10 per cent equity.

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Integrated strategy across an extended infocomm value chain:

STRATEGY TO PROMOTE INFOCOMM VALUE CHAIN

Dhirubhai Ambani Entrepreneur Program:

The operation, to be carried out under the aegis of Dhirubhai Ambani Entrepreneur Program (DAEP), would offer DSAs the attractive proposition of participating in future businesses of Reliance like insurance, petroleum retailing, and LPG retailing. Initially it was decided to appoint around 2,00,000 DSA across the country, who in turn were required to rope in just 50 subscribers each to achieve the 10-million magical mark. For becoming a DAE, one has to provide a security deposit of Rs10,000 and buy a WLL (M) connection and undergo a training of one day and pass a test.

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Reliance Infocomm worked backwards by looking at what the customer could afford and came to the conclusion that he can support average revenue per user (ARPU) of Rs 450 to Rs 500 a month. Then it worked out what kind of investment would be required to sustain these revenues and make money. It also leveraged economies of scale to reduce costs. Reliance realised that the main capital investment in building a fibre optic backbone is the cost of digging. Reliance has put in eight ducts across the country. Its network is future proof for the next 50 years. When new capacity is needed it has to only blow the fibre at a very small incremental cost which will be difficult to match.

By using its own software specialists, Reliance was able to put up the Java platform on its mobile phones at virtually 10 per cent of what it costs companies in the US to do so. By setting up a centralised security system based in Mumbai for the entire network Reliance Infocomm was able to reduce manpower needs from 10,000 to just 200 software engineers.

TECHNOLOGY

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Reliance Infocomm uses Qualcomm Inc.’s Code Division Multiple Access (CDMA) 2000 1 X technology. This technology handles better voice quality & higher data rates as compared to GSM.

Reliance Infocomm has tied up with Kyocera for supply of high end PDAs. Reliance has procured around 50,000 PDAs. The PDAs will be focused for high end users whereby one can use it both as a phone as well as a PDA.

The phone will be used for making voice calls whereas PDA will be utilized to provide wireless data access for web clippings, HTML, SMS and e-mail. Using speakerphone facilities one can use PDA while one is making voice call.

ENTRY STRATEGIES

By deciding to use PDAs for high end market they have not only done value addition to their services but also they have decided to cater for the segment where margins are high. Infocomm's strategy from the beginning was simple. It started operations late, after the market had stabilised to a degree. But eventually when it did, it did it with a splash. Its aim was to acquire critical mass quickly by undercutting competition This was because it saw that the telecom industry was heading towards an oligopoly.

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Although this meant huge losses in the short term, Reliance understood that only a few telecom operators would remain in the next few years.

MARKETING STRATEGY Reliance preferred DSA over channel partners. The DSA model offers several advantages. Firstly, the DSA and his staff can do personalized, direct marketing—in a manner not achievable by channel partners—at no expense to Reliance. Secondly, DSAs are utilizing all tools like fax, e-mail, telephone, cable TV network, and one-to-one meetings to tell prospective customers about ‘Reliance IndiaMobile’. Thirdly, this is also building more hype for the service and allowing Reliance to spend a lot less on advertisement, but more importantly, enabling it to reach out to the optimally potential audience.

Fourthly ,from customer acquisition to verification and validation of the supporting documents, to collection of cheques and depositing them at the Reliance collection center, DAEs will handle all the back-end operations. Reliance is thus saved of huge amount of time, effort and money. For becoming a DAEP, one has to provide a security deposit of Rs 10,000 and buy a WLL (M) connection. He has to also undergo a training of one day and pass the test that follows. . The DAE will get Rs 10,000 back if he is able to get 10 connections. For the next 14 transactions, he gets no incentives, but for 25–49 connections, the incentives are at the rate of Rs 100 per transaction; for 50–74 connections, the rate is Rs 200; and for 75–99 connections the rate is Rs 300. Thereafter, incentives are at the rate of Rs
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400 per transaction. In order to recover his investment, the DAE has to bag a minimum of 50 connections. The very appointment of a DAE ensures one connection for Reliance, as that’s one of the conditions for becoming a DAE. Thus, even before the start of the service, the company has a base of around 200,000 subscribers, whereas BSNL was able to get the same number four weeks after the launch of its CellOne cellular services. The model neatly combines the best features of the traditional channel model and the ‘Amway’ model. Reliance gets a ready subscriber base of 200,000 DAEs by default. Moreover, a whole bunch of backend operations is ‘outsourced’ to the DAEs for no fee.

STRATEGY OF SINGLE PLAN Initially, the company has opted for a single plan—Dhirubhai Ambani Pioneer Offer—so as to maximize the impact among subscribers and make achieving the magical number easier. The uniformity of one plan also helps customers grasp it easily and make them do a clear-cut comparison with other GSM and CDMA services. This speeds up the decision-making process of the customer, and in case a wrong decision is made, a 100-percent buyback allows subscribers to return their phones without any deduction within three months. The single plan allows better logistics management, which can result in significant savings for Reliance.

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STRATEGY OF Delayed-Launch Reliance has launched the network on 27 December, 2002, and was planning to launch services on 14 January, 2002. By end of March 2003, plans are to cover 637 towns and cities. Since the services rollout had got delayed, Reliance was trying to entice customers by saying that subscribers can access the network for free till March, while services would be commercial only from April 2002. This tactic appeared to be aimed at capturing those potential subscribers who would have opted for Tata Teleservices’ CDMA services or other GSM services because of Reliance’s delayed launch. They didn’t mind using the service free of cost for a couple of months. As that happened, Reliance was be able to start commercial services with a large number of subscribers from day one. Meanwhile, it also got time to test the quality of the network and iron out interconnect and other such issues before doing the commercial launch of the service. PREPAID STRATEGY Reliance has always emphasized on prepaid. Prepaid services account for 95% of cellular revenues. Even on the WLL (M) front, the company has opted for a prepaid model. This is basically a low risk strategy. Prepaid helped Reliance in two ways. One, the revenue loss, for which the cellular industry average is estimated at 10–15 percent, can be reduced to a minimum of 5 percent. The revenue loss is mainly due to three reasons—

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bad debt on account of collection problems, fraud, and revenue leakage. Prepaid automatically addresses all the three problems. Two it can help in funding for network expansion. In India, even though prepaid is not known to yield high average revenue per user (ARPU), it certainly is a proven tool for bolstering bottom lines. PORTER’S FIVE COMPITITIVE FORCES Threat of New Entrants: Many new entrants like Tata Indicom, Hutch, Airtel etc. are becoming major concern for thought. These companies are providing threats to Reliance Infocomm. Therefore the Reliance Infocomm has changed its strategy accordingly in the past also. Up to now, Reliance has the benefit of less call rate and strong brand image. But with the entrance of Tata in this field increases the problems of Reliance Infocomm. Reliance Infocomm is following the strategy of market penetration by providing low cost service but Tata Indicom also adopt this strategy and provide services at cheaper rate than Reliance Infocomm. Besides this, Reliance Infocomm has a strong customer base which has strong faith in Reliance Group. Thus Reliance is able to compete with its competitors easily. Bargaining Power of Suppliers: Reliance Infocomm purchases handsets from LG, Samsung and Nokia. They purchase handset in such a bulk quantity that every supplier want

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to sell their product. Thus the bargaining power of suppliers is very less. Bargaining Power of Customers: Reliance Infocomm is already providing services at a cheaper rate. Therefore the bargaining power of its customer is very less. But now Tata Indicom launches its mobile service at very cheaper rate. Thus customers have more options now. It would increase the bargaining power of customers. Threats of Substitute Products and Services: Reliance Infocomm is providing mobile services as well as landline connections to its customers. Many substitute mobile services are providing threats to Reliance Infocomm. It includes BSNL, Hutch, Airtel etc. These services are more costly than the Reliance Infocomm mobile service. Intensity of Rivalry among competing firms: Reliance Infocomm has intense rivalry with BSNL, Airtel, Hutch, Tata Indicom. These all are trying to attract the customers by providing more and more benefits.

Ranking In Telecomm Sector According to latest survey conducted by “Business world” published on 8th Nov 2004 in telecommunication sector Reliance Infocomm have been
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ranked 3 in 2004 while it was 11th in 2003 the list was topped by Bharti Tele-ventures & 2nd was Tata Teleservices. The criteria were as follows. Dues all quality of top management, depth &quality of talent, ability to attract & retain talent, belief in transparency, ethics, social responsibility, quality of product & services, response to customer needs, corporate/ product brand management, dynamism, speed of response to change, belief in innovation, global in competitiveness, consistent performance, returns to share holders, value creation for stake holders, ability to cope with recession

SWOT ANALYSIS; Strength: There is much strength that Reliance Infocomm can count on and boast off.

The state-of-art technology Reliance Infocomm is offering-CDMA technology. The strong subscriber base over 10million subscriber’s in their kitty. Mobile with in the reach of common man. Affordable schemes. Comprehensive Network-The strong back bone high capacity network(terabit capacity) supported by fiber optic cables laid all over the country(60,000km) Offering Value Added services to it’s customer’s almost free of cost or with nominal charges. Reliance Infocomm was the first service provider to introduce finance option on handsets. Value Added Services: First Call Center of 2,000 seats in Mumbai

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Aggressive roll out to capture dominant market share and create an entry barrier CDMA 1x Technology

Weakness:

Marketing strategy. Restricted mobility through its WLL services. Hidden Cost- Not able to retain the roped in customers. It only catered to the needs of post paid customers. Fewer varieties of handsets available offering CDMA technology. Lacks Transparency at end user level Lacks to spread Technological Awareness

Opportunity:

Reliance Infocomm has timely and effectively used the technology where the Indian Telecom Market was lacking behind-Broad Band technology (CDMA) at affordable prices, thus capturing the market significantly. Using the CDMA technology, it has revolutionized the data transfer rates and low cost tariffs.

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In the area of E-Commerce, Video on Demand, VoIP(Voice over IP), Speech Recognition, Interactive Television, Intelligent Homes, Virtual Reality. Providing instant connection to the customers making a happy and satisfied customer base. Reliance Signs Amalgamation Agreement To Acquire Flag Telecom Group Limited-- Plans to acquire submarine network cables from FLAG Telecom($220 million dollars) which will drastically reduce the ISD rates. Reliance Infocomm and Microsoft TV to work together on NextGeneration India's Largest Private Sector Enterprise to Prototype and Trial Next- Generation TV Services On a New End-to-End IPTV Solution from Microsoft TV.

Threats:

The threat from BSNL for the calls being blocked or barred at LDCA level. Easy convertibility of the mobile handsets and reselling of lithium ion batteries. Thefts and forgery regarding Handsets provided by company To face many legislative barriers form government as well as its
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competitors Risk involved in financing the handsets.(Defaulters/Bad debts) Threat from operators such as BSNL, Aircel, Tata Tele Services each with the expanding networks to sustain the competitive market situation.

TIEUPS AND ACQUISITIONS CABLE AND WIRELESS Cable & Wireless has extended its global data network into India through a cooperative relationship with Reliance Infocomm that will enable it to extend its portfolio of global network services into India immediately to satisfy growing demand from multinational customers for managed international data network services in India. Local loop access to the network will be provided by Reliance Infocomm and covered by an SLA (service level agreement). Enterprises located outside of Mumbai, Bangalore, and Chennai will be able to use Reliance Infocomm's extensive nationwide network to connect to the Cable & Wireless global network.

FLAG Telecom FLAG Telecom Holdings is a global carrier's carrier. An acronym for Fiber Loop Around the Globe, FLAG operates fiber optic undersea cable system that spans from the UK to Japan (FLAG Europe-Asia) and a terabit transatlantic cable system (FLAG Atlantic-1). It also provides connectivity between Hong Kong, Seoul, Tokyo, and Taipei (FLAG North Asian Loop). The company's provides capacity leasing, colocation, IP transit, managed
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bandwidth, and VPN services among others. FLAG serves about 180 network service providers. The company is owned by Reliance Infocomm which is a subsidiary of Reliance Industries.

CRITICISM ON STRATEGY ADOPTED BY RELIANCE Reliance has come in for criticism for its recent back-door entry into the booming wireless market. While global system mobile communications companies with international investors like AT&T and Singapore Telecommunications bid for cellular licenses that have averaged hundreds of millions of dollars each in public auctions, Reliance received limitedmobility rights along with fixed-line licenses sold by the government at a fraction of the cost. By interconnecting different circles of limited-mobility services, Reliance has assembled a nationwide network comparable to that of the G.S.M. operators' systems.

Cellular operators accused Reliance of breaching regulations on limitedmobility phones. But Reliance turned the commercial dispute into a technological one, settled out of court, and became the prime beneficiary of a changed regulatory regime.

************************************************************* *************************************************************

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Biblography • www.businessworldindia.com • www.ril.com • www.relianceinfo.com • www.businessstandard.com • www.economictimes.com • Business Today (November 8’ 04)

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