telicommunication in india

8/19/2019 telicommunication in india

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STUDENT’S UNDERTAKING

I hereby declare that the Project Work with the title “A Study On Investment In TheMutual Funds In India submitted by me !or "artial !ul!illment o! the de#ree o! $%&om%

'(onours) under the *uru *obind Sin#h Indra"rastha +niversity is my ori#inal work and

has not been submitted earlier to any other +niversity !or the !ul!illment o! there,uirement !or any course o! study%

I also declare that no cha"ter o! this manuscri"t in whole or in "art has beenincor"orated in this re"ort !rom any earlier work done by others or by me% (owever-

e.tracts o! any literature which has been used !or this re"ort has been duly

acknowled#ed "rovidin# details o! such literature in the re!erences%

Signature

/ame0 Abhay Tri"athi

1oll /o%0 23456577758


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CERTIFICATE OF SUPERVISOR

This is to certi!y that Mr% Siddhant Mishra- a student o! $%&om '(onours) in a 9a#annathInternational Mana#ement School under the *uru *obind Sin#h Indra"rastha +niversityhas worked under my su"ervision and #uidance !or his "roject work and "re"ared a

Project 1e"ort with the title “A Study On Investment In The Mutual Funds In India%

The "roject which he is submittin# is his #enuine and ori#inal work to the best o! my

knowled#e%

Pooja Rana

Assistant Professor


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ACKNOWEDGE!ENT

$e!ore we #et into thick o! thin#s- I would like to add a !ew words o! a""reciation !or the

"eo"le who have been a "art o! this "roject ri#ht !rom its ince"tion% The writin# o! this

"roject has been one o! the si#ni!icant academic challen#es I have !aced and without thesu""ort- "atience- and #uidance o! the "eo"le involved- this task would not have been

com"leted% It is to them I owe my dee"est #ratitude%

It #ives me immense "leasure in "resentin# this "roject re"ort on “A Study On

Investment In The Mutual Funds In India% It has been my "rivile#e to have a team o! "roject is a result o! sheer hard work- and determination "ut in by me with the hel" o! my

"roject #uide%

I hereby take this o""ortunity to add a s"ecial note o! thanks !or Pro!!essor Pooja 1ana-

who undertook to act as my mentor des"ite his many other academic and "ro!essional

commitments% (is wisdom- knowled#e- and commitment to the hi#hest standardsins"ired and motivated me% Without his insi#ht- su""ort- and ener#y- this "roject wouldn:t

have kick0started and neither would have reached !ruit!ulness%

I also !eel heartiest sense o! obli#ation to my library sta!! members ; seniors- whohel"ed me in collection o! data ; resources material ; also in its "rocessin# as well as in

dra!tin# manuscri"t% The "roject is dedicated to all those "eo"le- who hel"ed me while

doin# this "roject%

A"#a$ Tri%at#i

&'()*)+++),


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C#a%ter )

Intro-u.tion


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/istor$

The history o! telecommunication industry started with the !irst "ublic demonstration o!

Morse:s electric tele#ra"h- $altimore to Washin#ton in 5766% In 572D o! the stock se"aration o! tele"hone

manu!acturin# !rom "rovision o! tele"hone service and the com"ulsory licensin# o!

"atents owned by AT;T on a non0discriminatory basis% It was telecommunication act o!

544= that true com"etition was allowed% The act o! 544= o"ened the market to all

com"etitors% AT;T bein# the !irst telecommunication com"any "aved the road !or the

telecommunication industry as well as set the "olicy and standards !or others to !ollow%


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Te0e.o11uni.ation in In-ia

IndiaEs telecommunication network is the second lar#est in the world based on the total

number o! tele"hone users 'both !i.ed and mobile "hone)% It has one o! the lowest call

tari!!s in the world enabled by the me#a tele"hone networks and hy"er0com"etition

amon# them% It has the worldEs third0lar#est Internet user0base% Accordin# to the Internet

and Mobile Association o! India 'IAMAI)- the Internet user base in the country stood at

542 million at the end o! 9une- 3258% Major sectors o! the Indian telecommunication

industry are tele"hony- internet and television broadcast Industry in the country which is

in an on#oin# "rocess o! trans!ormin# into ne.t #eneration network- em"loys an

e.tensive system o! modern network elements such as di#ital tele"hone e.chan#es-

mobile switchin# centres- media #ateways and si#nalin# #ateways at the core-interconnected by a wide variety o! transmission systems usin# !ibre0o"tics or Microwave

radio relay networks% The access network- which connects the subscriber to the core- is

hi#hly diversi!ied with di!!erent co""er0"air- o"tic0!ibre and wireless technolo#ies% T(- a

relatively new broadcastin# technolo#y has attained si#ni!icant "o"ularity in the

Television se#ment% The introduction o! "rivate FM has #iven a !illi" to the radio

broadcastin# in India% Telecommunication in India has #reatly been su""orted by the

I/SAT system o! the country- one o! the lar#est domestic satellite systems in the world%

India "ossesses a diversi!ied communications system- which links all "arts o! the country

by tele"hone- Internet- radio- television and satellite%

Indian telecom industry underwent a hi#h "ace o! market liberaliGation and #rowth since

the 5442s and now has become the worldEs most com"etitive and one o! the !astest

#rowin# telecom markets% The Industry has #rown over twenty times in just ten years-

!rom under 8< million subscribers in the year 3225 to over 76= million subscribers in the

year 3255% India has the worldEs second0lar#est mobile "hone user base with over

434%8< million users as o! May 3253% It has the worldEs second0lar#est Internet user0base

with over 822 million as o! 9une 325>%

The total revenue o! the Indian telecom sector #rew by


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also has hel"ed to increase the trans"arency o! #overnance with the introduction o! e0

#overnance in India% The #overnment has "ra#matically used modern telecommunication

!acilities to deliver mass education "ro#rammes !or the rural !olk o! India%


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2eginning of te0e.o11uni.ation in In-ia

The era o! telecommunication in India started !rom the year o! 57>5 with the initiative

!rom #ovt% o! India near the city o! &alcutta now known as olkata% (owever the ra"id

#rowth in telecom industry came into "icture a!ter the year o! 3223028 onwards as the

more number o! service "roviders came into e.istence% Since 3223028 there is ra"id

chan#e in the technolo#y and increase in numbers o! subscribers in the Indian telecom

industry till now% The !ollowin# are the milestones in the Indian telecom industry%

57>5 First o"erational land lines were laid by the #overnment near &alcutta%

5775 Tele"hone services introduced in India%

5778 Mer#er with "ostal system%

5438 Formation o! Indian radio Tele#ra"h &om"any%

5483 Mer#er o! ?T& and I1T into Indian 1adio and &able &ommunication

&om"any%

546< /ationaliGation o! all !orei#n telecommunication com"anies to !orm the"osts- tele"hone and tele#ra"h- a mono"oly run by the #overnment:s ministry o!

communications%

547> e"artment o! telecommunication established - an e.clusive "rovider o!

domestic and lon#0distance services that would be its own re#ulator%

547= &onversion o! dot into two wholly #overnment @ owned com"anies the

JS/B !or international telecommunication and MT/B !or services in metro"olitan

areas%

544< Telecom re#ulatory authority created%

Telecommunication is im"ortant not only because o! its role in brin#in# the bene!its o!

communication to every corner o! India but also in servin# the new "olicy objectives o!

im"rovin# the #lobal com"etitiveness o! the Indian economy and stimulatin# and

attractin# !orei#n direct investment% Indian Telecom industry is one o! the !astest #rowin#


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telecom markets in the world% In telecom industry- service "roviders are the main drivers

whereas e,ui"ment manu!acturers are witnessin# #rowth and decline in successive

,uarters as sales is de"endent on order undertaken by the com"anies%

Today the Indian telecommunications network with over 8 Million subscribers is

second lar#est network in the world a!ter &hina% India is also the !astest #rowin# telecom

market in the world with an addition o! 40 52 million monthly subscribers% The teledensity

o! the &ountry has increased !rom 57D in 322= to 88D in ecember 3227- showin# a

stu"endous annual #rowth o! about >2D- one o! the hi#hest in any sector o! the Indian

?conomy% The e"artment o! Telecommunications has been able to "rovide state o! the

art world0class in!rastructure at #lobally com"etitive tari!!s and reduce the di#ital divide

by e.tendin# connectivity to the unconnected areas%

India has emer#ed as a major base !or the telecom industry worldwide% Thus Indian

telecom sector has come a lon# way in achievin# its dream o! "rovidin# a!!ordable and

e!!ective communication !acilities to Indian citiGens% As a result common man today has

access to this most needed !acility% The re!orm measures cou"led with the "roactive

"olicies o! the e"artment o! Telecommunications have resulted in an un"recedented

#rowth o! the telecom sector%

There is a cut0throat com"etition in the Telecom industry as more and more advancedtechnolo#y is develo"ed in very short time% Once the "eo"le #et addicted to 3*

technolo#y by the time new "layers come u" with latest technolo#y called 8* and ?*?%

The thrust areas "resently areK

5% $uildin# a modern and e!!icient in!rastructure ensurin# #reater com"etitive

environment3% With e,ual o""ortunities and level "layin# !ield !or all stakeholders%8% Stren#thenin# research and develo"ment !or manu!acturin#- value added services%

6% ?!!icient and trans"arent s"ectrum mana#ement>% To accelerate broadband "enetration=% +niversal service to all uncovered areas includin# rural areas%


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1ecent thin#s to watch in Indian telecom sector areK

5% 8* and $WA auctions3% MJ/O8% Mobile /umber Portability

6% /ew Policy !or Jalue Added Services>% Market dynamics once the recently licensed new telecom o"erators start rollin# out=% Services%


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make use o! advanced technolo#ies like *SM- &MA- and WBB to the #reat 8*

Technolo#y in mobile "hones% ay by day- both the Public Players and the Private

Players are "uttin# in their resources and e!!orts to im"rove the telecommunication

technolo#y so as to #ive the ma.imum to their customers%

The wireless subscriber crossed the 3=5 million subscriber mark at the end o! the

!inancial year in com"arison to the subscriber base o! 5=>%55 million at the end o! March-

3224% It added 4>%4 million subscribers in the !inancial year 3227024 re#isterin# an

annual #rowth rate o! about >7%53D% The total subscriber base o! wireless services has

#rown !rom 88%=4 million in March- 2> to 3=5%2< million in March- 24%


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2a.3groun-

Indian telecommunications sector has under#one a major "rocess o! trans!ormation

throu#h si#ni!icant "olicy re!orms- "articularly be#innin# with the announcement o! /TP

5446% (istorically- the "rocess o! e."ansion o! the network was rather slow- bein# owned

and mana#ed by the *overnment under the assum"tion that telecommunications was a

natural mono"oly best run as a state0owned mono"oly% $y the early 5442s- this conce"t

o! a natural mono"oly was increasin#ly challen#ed in many countries by technolo#ical

chan#es- es"ecially in the wireless !ield and by laudable success in several countries in

lowerin# the cost o! services !or common man% Policy makers in our country be#an

"rocess o! re!orms in the 5442s that led to #radual usherin# in com"etition !or #reater

consumer wel!are- "articularly in terms o! lowerin# o! tari!!s and im"rovement in ,uality o!

service%


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First P#ase 4 T#e Eig#ties

Telecom re!orms in India be#an in the 5472s with the launch o! a “Mission $etter

&ommunication "ro#ram% Private manu!acturin# o! customer "remise e,ui"ment was

allowed in 5476 and the &enter !or evelo"ment o! Telematics '&0OT) was established

!or the develo"ment o! indi#enous technolo#ies% Private !ranchises were !reely #iven !or

"ublic call o!!ices 'P&Os) that o!!ered local- domestic and international callin# services%

Two lar#e cor"orate entities were s"un o!! !rom the e"artment o! Telecommunications-

e%#% Mahana#ar Tele"hone /i#am Bimited 'MT/B) !or elhi and Mumbai and Jidesh

Sanchar /i#am Bimited 'JS/B) !or all international services% Si#ni!icantly- this be#an the

"rocess o! cor"oratiGation o! services that had hitherto been under a #overnment

de"artment% A hi#h0"owered Telecom &ommission to direct telecommunications "olicies

was set u" in 5474 with !ull "owers o! the *overnment%

Se.on- P#ase 4 T#e Ear0$ Nineties

The second "hase o! re!orm commenced with the #eneral liberaliGation o! the economy

in the early 5442s and announcement o! a /ew ?conomic Policy '/?P)05445% Telecom

e,ui"ment manu!acturin# was de0licensed in 5445 and value0added services were

declared o"en to the "rivate sector in 5443- !ollowin# which radio "a#in#- cellular mobile

and other value added services were o"ened #radually to the "rivate sector% /ational

Telecom Policy was announced in 5446- with a major thrust on universal service and

,ualitative im"rovement in telecom services and also- o"enin# o! "rivate sector

"artici"ation in basic tele"hone services% An inde"endent statutory re#ulator was

established in 544


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"rivate "roviders to “mi#rate !rom !i.ed license !ee re#ime to a revenue sharin# re#ime%

The second ,ualitative di!!erence was that the re#ulator was stren#thened- domestic

lon# distance services were o"ened to the "rivate sector- and the state0owned basic

service "rovider under the e"artment o! Telecommunications was cor"oratised%


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Introduction to the Sam"le

&om"anies


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INTRODUCTION

2/ARTI AIRTE I!ITED

$harti Airtel Bimited- the com"anyEs e.istence was marked in the year 544>% It is aleadin# Indian telecommunication service "rovider throu#h three strate#ic business units

namely Mobile Services- $roadband ; Tele"hone Services and ?nter"rise Services% The

com"any has started with "rovidin# mobile service to sin#le circle entity and now it

#rown to o!!er services to all 38 telecom circles o! India% One o! the lar#est inte#rated

"rivate telecom service "roviders with an all India mobile !oot"rint- throu#h a combination

o! or#anic and inor#anic #rowth%

urin# the year 544


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&ellular Btd and $harti In!otel Btd have been mer#ed with the com"any in the year o!

3226% Subse,uently $harti $roadband Btd and Satcom $roadband ?,ui"ment Btd has

become the subsidiaries o! the com"any a!ter the above said mer#er% urin# the year

322> $harti Airtel Btd e."and its win# to 1ajasthan and /orth ?ast &ircles also by the

ac,uisition o! $harti (e.acom- which owns Bicenses to o"erate cellular services in the

1ajasthan and /orth ?ast &ircles%

$harti Airtel Btd noted as EIndian Mobile O"erator o! the Lear 322>E by Asian Mobile

/ews- became the to"0most Telecom &om"any and was !eatured amon#st the to" three

com"anies across the sectors in the ?T >22 "ublished in 9une 322> and the com"any

Introduced Stock and Port!olio Tracker on the mobile in association with the $ombay

Stock ?.chan#e- it was the !irst o! its kind% The a#reement was emer#ed with ?ricsson

and the com"any in 322>02= to "rovide mana#ed services and e."ands its *SM*P1Snetwork into rural India in 5> circles under mana#ed ca"acity e."ansion% urin# the year

322=02< $harti Airtel has entered into a#reement with Microso!t to o!!er so!tware and

services !or the Small and Medium business market in India% The com"any also has an

a#reement with *oo#le to o!!er services on Airtel Mobile% Also an a#reement with Adani

*rou" to connect Mundra Port and s"ecial ?conomic None% A Three year contract with

/okia at an estimated value o! +SH622 million to e."and its mana#ed

*SM*P1S?*? networks in ei#ht Airtel circles and de"loy a "an India WAP solution

across its networks%

The com"any was con!erred many awards durin# the year 322=02


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"roject in India% This initiative enable 3> million o! /1IEs to remit their money to India

throu#h mobile "hones%

urin# the year 322


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2ran- %ositioning "$ 2#arti Airte0

!ar3et seg1entation

*eo#ra"hical se#ment 'metro"olitans ; cities India)

emo#ra"hic se#ment 0 middle income #rou"s

Peo"le a#e #rou" o! 32 to 37 year


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Target 1ar3eting

Peo"le who livin# in cities and towns%

Poor or middle income #rou" "eo"le%

Loun#sters in bi# cities%

$usinessmen

Positioning

&reatin# brands 'Shahrukh khan ; Sachin Tendulker)

Ads and "romotions

Promotion !or study o! "oor childrens%

!ar3eting 1i5

PriceK low "rice strate#y

PlaceK ma.imum outlets and service centers

ProductK verities available !or various #rou"s

PromotionK various schemes !or "re0"aid and "ost0"aid


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!ARKETING STRATEGIES OF AIRTE6

Targets t#e rura0 In-ia

The main tar#eted customers o! Airtel are !rom rural India%

$y o!!erin# chea" and li#ht mobile sets Idea attracts most o! the customers o! small

villa#es and towns%

Offering .#ea% #an-sets

AI1T?B o!!ers chea" and !ree connections to all customers%

The cost !or these sets was 1s0


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IDEA CEUAR I!ITED

I?A &ellular Bimited- a "art o! the Aditya $irla *rou" and an IndiaEs leadin# *lobal

System !or Mobile communication '*SM) Mobile Services o"erator was be#an its

journey in the year 544> as in the name o! $irla &ommunications Bimited !or "rovidin#

*SM0based services in the *ujarat and Maharashtra &ircles% Bater the com"any has

licenses to o"erate in all 33 Service Areas% Presently- o"erations e.ist in 55 Service

Areas coverin# elhi- Maharashtra- *oa- *ujarat- Andhra Pradesh- Madhya Pradesh-

&hattis#arh- +ttaranchal- (aryana- +P0West- (imachal Pradesh- +P0?ast- 1ajasthan

and erala% With a customer base o! over 36 million- I?A &ellularEs !oot"rint currently

covers a""ro.imately =2D o! IndiaEs telecom "o"ulation% The com"anyEs o"erational 55

Service Areas are broken u" into ?stablished and /ew Service Areas% The established

service areas are elhi- Andhra Pradesh- *ujarat and Maharashtra- (aryana- erala-

Madhya Pradesh and +ttar Pradesh 'West) and the /ew Service Areas are +ttar

Pradesh '?ast)- 1ajasthan and (imachal Pradesh%

&han#ed its name to $irla AT;T &ommunications Bimited !ollowed by joint venture

between *rasim Industries and AT;T &or"oration in the year 544=% A!ter a year- in 544


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million subscriber mark and the !irst o"erator in India to commercially launched ?*?

services 322>% 1eached the !ive million subscriber mark in the year 322> and I?A won

an Award !or the E$ill FlashE service at *SM Association Awards in $arcelona- S"ain% The

&om"any became a "art o! the Aditya $irla *rou" in the year 322=- subse,uent to the

TATA *rou" trans!erred its entire shareholdin# in the &om"any to the Aditya $irla *rou"%

In the same year 322=- I?A ac,uired ?scorts Telecommunications Bimited

'subse,uently renamed as Idea Telecommunications Bimited)%

The &om"any reached the 52 million subscriber mark and also launched /ew &ircles !or

obtain more and more customers% I?A has e.tended its reach to >22 towns in Andhra

Pradesh in Au#ust o! the year 322=% 1eceived Better o! Intent !rom the oT !or a new

+AS Bicense !or both Mumbai and $ihar &ircles% A$/B- the "arent o! Aditya $irla

Telecom Bimited- a#reed to trans!er its entire shareholdin# in Aditya $irla TelecomBimited to the &om"any !or the consideration o! 1s% 522 million% In 322


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2RAND POSITIONING 28 IDEA

!ar3et seg1entation

*eo#ra"hical se#ment 'rural India)

emo#ra"hic se#ment 0 middle income #rou"s

Target 1ar3eting

Peo"le livin# in small towns and villa#es%

Poor and middle income #rou"s%

Loun#sters in bi# cities%

$usinessmen

Positioning

&reatin# brands

Ads and "romotions

!ar3eting 1i5

Price K low "rice strate#y

Place K ma.imum outlets and service centers


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Product K verities available !or various #rou"s

PromotionK various schemes !or "re0"aid and "ost0"aid

Ser7i.es %ro7i-e- "$ IDEA

• Mobile services with *SM technolo#y

• Fi.ed0line connections

• /ational and international lon# distance services• JSAT- Internet services and network solutions

• $roadband services

Ser7i.es %ro7i-e- "$ IDEA6

mobile services with *SM technolo#y

!i.ed0line tele"hone services

+niversal Internetworkin#

JoIP 'Joice over Internet Protocol)

Interactive Television

Jisual &ommunication

$roadband Portal


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Telecommutin#


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C#a%ter '

O"je.ti7e of t#e Stu-$


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O"je.ti7es

The main object o! the "resent study is to e.amine the overall !inancial e!!iciency o! the

selected telecom com"anies% More s"eci!ically it seeks to dwells u"on mainly the!ollowin# issuesK

5% To assess the li,uidity mana#ement e!!iciency3% To observe the !inancial "er!ormance "osition and areas o! weakness- i! any8% To investi#ate the "ro!itability o! the com"anies%6% To analyGe the market o! com"anies


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iterature Re7ie9

A non0systematic literature review was undertaken to identi!y the !inancial ratios included

in articles in "eer0reviewed journals- industry "ublications- and articles in ma#aGines and

news"a"er%

To identi!y ratios in "eer0reviewed articles- searches o! academic databases usin#

keywords such as “!inancial mana#ement- “Solvency- “"ro!itability and li,uidity and

“ratio analysis were undertaken% Articles "ublished "rior to 544> were e.cluded !rom the

searches in order to ensure that only the most recent studies were included% This

e.clusion was im"ortant because o! the many chan#es in telecom since 544> and the

likely lower relevance o! articles "rior to these chan#es% 1atios were selected !rom the

articles i! results showed that they were statistically si#ni!icant in e."lainin# a dimension

o! Telecom &om"any s !inancial "er!ormance- such as "ro!itability or !inancial distress%‟

To identi!y ratios in industry "ublication- the websites o! various or#aniGations were

reviewed% Some o! the major literature reviewed is @

BaGaridis and Try!onidis '322=) conducted a cross sectional study by usin# a sam"le o!

585!irms listed on the Athens Stock ?.chan#e !or the "eriod o! 322503226 and !ound

statistically si#ni!icant relationshi" between "ro!itability- measured throu#h #ross

o"eratin# "ro!it and cash conversion cycle and its com"onents% $ased on the results

analysis o! annual data by usin# correlation and re#ression tests- they su##est that

mana#ers can create "ro!its !or their com"anies by correctly handlin# the cash

conversion cycle and by kee"in# each com"onent o! the conversion cycle at an o"timum

level% *arcia0Terual et al '322


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relationshi" between the time it takes !or !irms to collect cash !rom their customers and

"ro!itability- there e.ists a hi#hly si#ni!icant "ositive relationshi" between the "eriod taken

to convert inventories to sales and "ro!itability and there e.ists a hi#hly si#ni!icant

"ositive relationshi" between the time it takes !or !irms to "ay its creditors and

"ro!itability%

Praveen kataria in his study attem"ted to "redict cor"orate sickness o! the com"anies%

Financial in!ormation about all the sick com"anies was collected !or !ive years be!ore

sickness% (ealthy com"anies were matched with the sick com"anies on the basis o!

industry com"osition siGe% >6 !inancial ratios and 7 macro economic variables were taken

to study their e!!ect alon# with !inancial ratios% Two #rou" linear discriminate analyses

were a""lied in two "arts% In the !irst "art- only !inancial ratio was taken in discriminate

analysis- while the macroeconomic variable was included alon# with the !inancial ratios

in the second "art% The result showed that macroeconomic variable had very little im"act

on discriminate !unction

1ekha Pai dealt with the "rediction o! industrial sickness usin# multi"le discriminate

analyses% The data set constitutes 35 !inancial ratios o! 86 Indian sick com"anies in

322225 and 87 contem"orary non sick com"anies- both selected irres"ective o! siGe and

industry cate#ory 8 years "rior to sickness% The multi"le discriminate analyses 'MS)

showed #reater accuracy in "redictin# industrial sickness u" to three years in advance%

The model was validated !urther usin# a test model- while e.hibited very hi#h "redictive

accuracy o! the "ro"osed model%

$erryman- '5478) indicated that Q"oor or Qcareless !inancial mana#ement is a major ‟ ‟

cause o! small business !ailure% In addition- a major survey by the Insolvency Practitioner

Society- '&IMA 5446) indicated that 32D o! + cor"orate !ailures 'the vast majority o!

which are small !irms) were due to bad debts or "oor credit mana#ement% Accordin# to

Peel and Wilson '5446)- “i! the !inancialworkin# ca"ital mana#ement "ractices in the

small !irm sector could be im"roved si#ni!icantly- then !ewer !irms would !ail and

economic wel!are would be increased substantially%


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C#a%ter ,

Resear.# !et#o-o0og$


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RESEARC/ DESIGN

Uni7erse of t#e Stu-$

The "resent study ado"ts an analytical and descri"tive research desi#n% The data o! the

sam"le com"anies '!or a "eriod o! Five years !rom 3255 to 325>) has been collected

!rom the annual re"orts and the balance sheet "ublished by the com"anies and the

websites o! the com"anies%

A !inite sam"le siGe o! !our com"anies listed on the /ational Stock ?.chan#e '/S?) has

been selected !or the "ur"ose o! the study% They are I?A &?BB+BA1 ; $(A1TI

AI1T?B%

The variables used in the analysis o! the data are ebt0?,uity 1atio '?1)- Bon# Term

ebt0?,uity 1atio- &urrent 1atio- Fi.ed Assets and ?arnin# Per Share '?PS)% While

inter"retin# the results- the statistical tool o! one0way Analysis o! Jariance 'A/OJA) has

been used%

Sa1%0e of t#e Stu-$

Sa1%0ing Te.#ni:ue; The study is done with s"ecial re!erence to "rivate sector

telecommunication com"anies% The reason bein# that the data or the !inancial

statements are readily available !or them% A"art !rom this- "rivate sector

com"anies have shown best "er!ormance in the "revious year so it is interestin#

to know the best "er!ormin# com"any out the selected sam"le com"anies% Thus-

the techni,ue o! C&onvenience Sam"lin#: is bein# ado"ted !or the study% The

election o! sam"le com"anies is made on the basis o! market ca"italiGation%

Sa1%0e Si


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Data Co00e.tion

Financial statements are the raw data collected !rom various websites such as

htt"Kmoney%livemint%com - htt"Kwww%moneycontrol%com and other com"any websites%

Ti1e Perio- of t#e Stu-$

The study has been conducted durin# 9anuary 325= to February 325=%

Too0s use- for Ana0$sis

Ratio Ana0$sis; 1atios have been calculated !or the "ast one year !or the

"ur"ose o! analysis% 1atios bein# desi#ned are named as 1eturn on Assets-

1eturn on &a"ital ?m"loyed- 1eturn on ?,uity- *ross Pro!it Mar#in- and /et Pro!it

Mar#in%

Finan.ia0 Ana0$sis

The section o! study embodies the calculation and analysis o! selected variables taken

into re!lection !or the study "ur"ose% The ratios are bein# calculated by the aid o! raw

data available on the concerned website% The raw data encom"asses Lear 1esult and

$alance Sheet o! the sam"le com"anies% A!ter calculation o! ratios- analysis o! individual

ratio is bein# done%

The ratios bein# calculated !or the "ur"ose o! analysis o! !inancial "er!ormance areK

1eturn on Assets

1eturn on &a"ital ?m"loyed

1eturn on ?,uity

*ross Pro!it Mar#in

/et Pro!it Mar#in

DATA COECTION !ET/OD

There two ty"e o! method o! data collection%


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5% Primary data3% Secondary data

Pri1ar$ -ata 9as .o00e.te- using t#e fo00o9ing te.#ni:ues

• Ruestionnaire Method

• irect Interview Method and

• Observation Method

The main tool used was- the ,uestionnaire method% Further direct interview method-

where a !aceto0!ace !ormal interview was taken% Bastly observation method has been

continuous with the ,uestionnaire method- as one continuously observes thesurroundin# environment he works in%

ata used !or the research work was Secondary in nature%

Pri1ar$ -ata;

Primary data is that which is the collected !or the !irst time and thus ha""en to be

ori#inated in character%

Se.on-ar$ -ata

Secondary data re!er to the data that has been already collected %the secondary data-

which has been used to carry out this study- are as !ollowK

&om"any:s internet site

Other relevant study material and websites%


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C#a%ter *

Data ana0$sis

=Profita"i0it$ an- !ar3et S#are>


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Profita"i0it$


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A %rofita"i0it$ ratio is a measure o! %rofita"i0it$- which is a way to measure a

com"anyEs "er!ormance% Profita"i0it$ is sim"ly the ca"acity to make a "ro!it- and a "ro!it

is what is le!t over !rom income earned a!ter you have deducted all costs and e."enses

related to earnin# the income%

2AANCE S/EET DATA

2/ARTI AIRTE IDEA CEUAR 2/ARTIAIRTE?

IDEA CEUAR

&urrent assets 1s m 333-252 5>6-=>= 568%=D

&urrent liabilities 1s m =86-68> 5-4>%=D

Free reserves 1s m >55->84 548->35 3=6%8D

/et worth 1s m =54->=6 382-33-378 5==-283 3 >%< 68%5D

ebt to e,uity ratio . 2%< 2%< 525%3D

Sales to assets ratio . 2%> 2%> 48%5D

Return on assets @ 6 B6& (*6&@

Return on e:uit$ @ +6* ),6( &6,@

Return on .a%ita0 @ )6B )6) ))&6+@

?."orts to sales D 2 2 0

Im"orts to sales D 6%2 6%3 4=%>D

?."orts '!ob) 1s m /A /A 0

Im"orts 'ci!) 1s m 8


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Return on Assets

Return on assets '1OA) is a !inancial ratio that shows the "ercenta#e o! "ro!it that a

com"any earns in relation to its overall resources 'total assets)% 1eturn on assets is akey "ro!itability ratio which measures the amount o! "ro!it made by a com"any "er dollar

o! its assets% It shows the com"anyEs ability to #enerate "ro!its be!ore levera#e- ratherthan by usin# levera#e% +nlike other "ro!itability ratios- such as return on e,uity '1O?)-

1OA measurements include all o! a com"anyEs assets @ includin# those which arise !rom

liabilities to creditors as well as those which arise !rom contributions by investors% So-1OA #ives an idea as to how e!!iciently mana#ement use com"any assets to #enerate

"ro!it- but is usually o! less interest to shareholders than some other !inancial ratios such

as 1O?%

1eturn on assets #ives an indication o! the ca"ital intensity o! the com"any- which will

de"end on the industry% &a"ital0intensive industries 'such as railroads and thermal "ower

"lant) will yield a low return on assets- since they must "ossess such valuable assets todo business% Shoestrin# o"erations 'such as so!tware com"anies and "ersonal services

!irms) will have a hi#h 1OAK their re,uired assets are minimal% The number will vary

widely across di!!erent industries% This is why- when usin# 1OA as a com"arative

measure- it is best to com"are it a#ainst a com"anyEs "revious 1OA !i#ures or the 1OA

o! a similar com"any%

Ca0.u0ation =for1u0a>

1eturn on assets is calculated by dividin# a com"anyEs net in.o1e 'usually annualin.o1e> by its total assets- and is dis"layed as a "ercenta#e% There are two acce"tableways to calculate return on assetsK usin# total assets on the exact date or average total

assetsK

1OA /et Income a!ter ta. Total assets 'or Avera#e Total assets)


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Return on Ca%tia0

Return on .a%ita0 e1%0o$e- '1O&?) is a measure o! the returns that a business is

achievin# !rom the ca"ital em"loyed- usually e."ressed in "ercenta#e terms%

&a"ital em"loyed e,uals a com"anyEs ?,uity "lus /on0current liabilities 'or Total

Assets U &urrent Biabilities)- in other words all the lon#0term !unds used by the

com"any% 1O&? indicates the e!!iciency and "ro!itability o! a com"anyEs ca"ital

investments%

1O&? should always be hi#her than the rate at which the com"any borrows otherwise

any increase in borrowin# will reduce shareholdersE earnin#s- and vice versa a #ood

1O&? is one that is #reater than the rate at which the com"any borrows%

&alculation '!ormula)


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1O&? ?$IT &a"ital ?m"loyed ?$IT '?,uity V /on0current Biabilities) ?$IT 'Total Assets 0 &urrent Biabilities)

Return on E:uit$

Return on e:uit$ 'ROE) is the amount o! net income returned as a "ercenta#e o!shareholders e,uity% It reveals how much "ro!it a com"any earned in com"arison to thetotal amount o! shareholder e,uity !ound on the balance sheet%

1O? is one o! the most im"ortant !inancial ratios and "ro!itability metrics% It is o!ten saidto be the ultimate ratio or the Cmother o! all ratios: that can be obtained !rom a com"any:s!inancial statement% It measures how "ro!itable a com"any is !or the owner o! theinvestment- and how "ro!itably a com"any em"loys its e,uity%


1eturn on e,uity is calculated by takin# a year:s worth o! earnin#s and dividin# them bythe avera#e shareholder e,uity !or that year- and is e."ressed as a "ercenta#eK

1O? /et income a!ter ta. ? ShareholderEs e,uity


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INCO!E DATA

/et Sales 1s m 435-8>5 85>-3=4 343%3D

Other income 1s m 36-27%>D

Total revenues 1s m 46=-584 832-566 34>%>D

*ross "ro!it 1s m 852-42> 526-26< 5 85-434 5=3%8D

*ross "ro!it mar#in D 88%< 86%3 47%=D

?!!ective ta. rate D >2%6 8>%8 568%2D

/et "ro!it mar#in D >%= 52%5 >>%=D

Gross Profit !argin

Gross %rofit 1argin =gross 1argin> is the ratio o! #ross "ro!it '#ross sales less cost o!sales) to sales revenue% It is the "ercenta#e by which #ross "ro!its e.ceed "roductioncosts% *ross mar#ins reveal how much a com"any earns takin# into consideration thecosts that it incurs !or "roducin# its "roducts or services% *ross mar#in is a #oodindication o! how "ro!itable a com"any is at the most !undamental level- how e!!iciently a

com"any uses its resources- materials- and labour% It is usually e."ressed as a"ercenta#e- and indicates the "ro!itability o! a business be!ore overhead costs it is ameasure o! how well a com"any controls its costs%

*ross mar#in measures a com"anyEs manu!acturin# and distribution e!!iciency durin# the"roduction "rocess% The hi#her the "ercenta#e- the more the com"any retains on eachdollar o! sales to service its other costs and obli#ations- the better the com"any isthou#ht to control costs% Investors use the #ross "ro!it mar#in to com"are com"anies inthe same industry and also in di!!erent industries to determine what are the most"ro!itable% A com"any that boasts a hi#her #ross mar#in than its com"etitors and industryis more e!!icient%


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*ross mar#in is calculated as #ross "ro!it divided by total sales 'revenue)%

*ross "ro!it mar#in *ross "ro!it 1evenue

Net Profit !argin

Net %rofit 1argin 'or %rofit 1argin- net 1argin- return on re7enue) is a ratio o!"ro!itability calculated as a!ter0ta. net income 'net "ro!its) divided by sales 'revenue)% /et"ro!it mar#in is dis"layed as a "ercenta#e% It shows the amount o! each sales dollar le!tover a!ter all e."enses have been "aid%

/et "ro!it mar#in is a key ratio o! "ro!itability% It is very use!ul when com"arin# com"aniesin similar industries% A hi#her net "ro!it mar#in means that a com"any is more e!!icient atconvertin# sales into actual "ro!it%


/et "ro!it mar#in Pro!it 'a!ter ta.) 1evenue


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!ar3et S#are


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Gr o9t# ?De.0ine in Su"s.r i"er s

Ser 7i.e

Pr o7i-er

Su"s.ri"er "ase Rate of Gr o9t#=@>

!ar 3et

S#ar e

De.4)*

=@>

!ar 3et

S#ar e

!ar 4)C =@>De.4)* !ar 4)C

Net

A--ition

2#ar ti ''&6A& ''(6*, +6+, *6&& ''6B' ',6&'

Joda! one 5%58 3%7< 57%65 57%6>

IDEA )C&6C* )CB6+) B6'B *6+, )C6C& )C6+*

1elianc

e 52 8%5< 3%4> 55%2< 55%52

Tata =


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Ser7i.e

Pr o7i-er

No6 of Tota0

Su"s.r i"e

No6 of Rur a0

Su"s.r i"e

Per .enta

ge of Rur a0

!ar 3et

s#ar e of Rur a0

2#ar ti ''(6*, )&B6A) *A6(& 'C6AA

Joda! one 578%77 48%36 38%8>

IDEA )CB6+) +(6'( CA6C+ ')6'(

$S/B 48%=6 86%>8 8=%7< 7%38

Air cel 75%62 37%=> 8>%32 =%78

1eliance

&omm% 552%=> 3%27 =%=3

Tata =%=3 56%54 85%53 8%84

Sistema 7%43 5%4= 35%47 2%6<

Ruadrant 3%4= 2%53 6%54 2%28

Jideocon


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Bist o! &ellular Mobile '*SM ; &MA) Service Providers curr ently"rovidin# service As on 85st March- 325>X

S06No6 Ser7i.e Pr o7i-er Ar ea of O%er ation

) 2#ar t A00

3 Aircel *r ou" All India

8 1eliance All India 'e.ce"t Assam ; /?)

6 1eliance Telecom Btd

olkata- MP- W$- (P- $ihar-Or issa- Assam ; /?

> Joda! on All India

= Tata Teleser vices All India e.ce"t Assam- /? ; 9;I

B IDEA A00

7 Sistema Shyam Telelink

Felhi- olkata- *ujarat-

Iarnata

ka

- Tamil /adu 'in

cl%&hennai)- Ierala- +P'W)- 4 $S/B All India 'e.ce"t Felhi ; Mumbai)

52 MT/B Felhi ; Mumbai

55 Ruadran Pun ja

53

Telewin#s

&ommunications M(- *ujarat- AP- +P'W)- +P'?)- $ihar

58

Jideocon

TelecommunicationsBtd

*ujarat- (aryana- +P'W)- +P'?)- MP- $ihar


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1ural Wir eless Subscriber base and Mar ket Shar e

Ser7i.e

Pr o7i-er

Su"s.r i"er

s at t#e

en- of !ar 4)C =in

Rura0

Su"s.r i"er s

@ of Rur a0su"s.ri"ers

in

!ar 3et S#of Rur a

Su"s.ri"e

De.4)* !ar 4)C De.4)* !ar 4)C De.4)* !a

2#ar ti ''A6&' )&)6'C )&B6A) *A6A) *B6A) 'C6B* 'C

Joda! one 578%72 48%8%3< 38%7> 38

IDEA )CB6+) +,6'C +(6'( CC6,) CA6C+ ')6)B ')

$S/B 7 3=%25 6%82 6

Telewin#s 6>%=3 58%== 56%54 85%82 85%53 8%6< 8

Sistema 7%7= 3%28 5%4> 33%>7 33%25 2%>3 2

Ruadrant 3% 3%>5 2%23 2

Jideocon 5 2%22 2%22 2%22 2%22 2%22 2

Total 4=4%74 848%86 656%57 65%=< 63%


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Age Grou% Gra%#

As we can see !rom the above #ra"h- the "eo"le who are in the a#e #rou" o! 35037

years are the ones who are the ma.imum users o! mobile "hones% This se#ment is the

one which #ives ma.imum business to the mobile o"erators% This se#ment constitutes

the youn# e.ecutives and other o!!ice #oin# "eo"le% They are =>D o! the total "eo"le

who were interviewed% The ne.t a#e #rou" are the

"eo"le who are 3708> years old% They are 32D o! the total% They are those who are at

home or have small business units etc% And the ne.t a#e #rou" is the youn#est

#eneration who are 5>035 years old% They are school and colle#e #oin# students and

carry mobile "hones to !launt% They are 5>D o! the total interviewed "eo"le%


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15%

55%

20%

10%

STUDENTS EXECUTIVES HOUSEHOLDS OTHERS

O..u%ation Gra%#

OCCUPATION

As the above #ra"h shows that >>D o! the total "eo"le interviewed are workin#% So-

these "eo"le are the ones who are the ma.imum users o! mobile "hones% They are the

youn# e.ecutives- mana#ers- Tele 0 callers etc% who re,uire mobile !or their o!!icial

"ur"oses% The ne.t cate#ory is the households- who are either housewi!e- small units

which o"erate !rom their homes etc% They are 32D o! the whole% The ne.t se#ment is

the students% They are 5>D o! the whole% And 52D o! the whole is cate#ories who are

the "ro!essionals%


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Ser7i.e Pro7i-er Gra%#

These are the total market share o! mobile user or "eo"le ca"tured by the mobile

"rovider com"any% There two major com"any in mobile "hone service sector Joda!one

and Airtel who res"ectively hold the market share with other com"any as 5


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20%

10%

60%

10%

Custo1er Ser7i.e At Airte0 Gra%#

CUSTO!ER SATISFACTION EVE

F+BBL PA1TIABBL

ISSATISFI? F+BBL ISSATISFI?

As the above #ra"h clearly shows that customer services at Airtel seems "oor% =2D o!

the "eo"le are dissatis!ied with the customer services "rovided by Airtel% They are the

ones who have the ma.imum share in the market but they are la##in# behind in the

customer services% 52D o! the "eo"le were !ully dissatis!ied with the customer services

o! Airtel% This could leave an im"act on the mind o! the consumer% (e can even switch

over his brand% 32D o! the "eo"le seemed "artially satis!ied with the customer services

and only 52D seem to be !ully satis!ied with Airtel:s customer services- which is a very

small amount%


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12%

64%

24%

!ont#0$ e5%ense gra%#

Peo"le on an avera#e s"end 1S >22 "er month as their mobile "hone e."ense% =6D

"eo"le s"end

!ont#0$ E5%ense

this amount% 36D "eo"le s"end 1S 822 "er month as their monthly mobile e."ense%

And the remainin# 53D had an e."ense more than 1S 5222- they could the ones

havin# sim connections or havin# cash cards and havin# a lot o! business calls on their

mobiles%


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!ar3et S#are of Wire0ess Te0e.o1 Pro7i-ers in In-ia;

8ear Airte0 Vo-afone I-eaRe0ian.e

=ADAG>2SN Air.e0 TATA Te0e9ings Siste1a

'Market Share in "ercenta#e D)

3226 )(6, 5>%8 +6) 35%= 5=%3 8%5 @ @ @

322> ') 56%4 (6B 32%8 54 8%6 3%5 @

322= ')6B' 57 3%4 >%87 @ @

322< ''6*( 5=%25 +6*( 5=%4= 57% +6( 57%>= 58%85 6%7 ))6&, 5=% 5%8<

3256 ''6B) 57%65 )6&) 53%3= 52%6=


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Y $ein# one o! the lar#est com"anies in India the com"any has achieved a de#ree o!

!ocus in its core business o! its "roducts%

Y It has a stron# brand name- su"erior ,uality "roducts and an enviable distribution

network%

Y It has a clear and well0de!ined or#aniGation structure and limits o! !inancial authority%

Y Increase in advertisement s"ends a!!ect the com"any:s mar#ins%

Y The com"anyCs bottom line !alls victim to the bloated and hi#hly "aid work!orce- which

a!!ects its mar#ins%

Wea3ness;

Y Bittle e!!orts over the Advertisin# o! "roducts%

Y istribution channel is not accurately cate#oriGed%

Y Premium "riced "roducts- hence can:t com"ete in low "rice se#ment%

Y /o se"arate strate#y !or rural market%

O%%ortunities;

Y The com"anyEs !inancial "er!ormance can receive a major boost !rom its cost reduction

e!!orts%

Y There is a lot o! sco"e o! "roduct and market diversi!ication%

Y ?."orts o! "roducts will also have hu#e chances in the comin# years%

Y Airtel:s business has am"le sco"e !or #ainin# market share !rom the unor#aniGed

sector% 1ural "enetration too holds vast "otential to brin# about #rowth%

T#reats


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Y The slowdown in the economy has restricted to"line #rowth o! most FM&* majors and

!or Airtel also it will be di!!icult to maintain historical #rowth rates in such a de"ressed

scenario%

Y &om"any:s major raw materials are in!luenced by #overnment "olicies controls as well

as va#aries o! the monsoons% Fluctuations in the "rices o! raw materials would have

si#ni!icant im"act on costs and mar#ins o! the com"any%

Moreover- inordinate hike in $road $and Internet "roducts would also

increases com"any:s "roduction and distribution cost%


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I!ITATIOINS OF T/E STUD8

The study has !ollowin# limitationsK

• The study has lack o! contact with com"any "ersonnel acted as hindrance in the

study%• The study is based on the limited knowled#e ; in!ormation "rovided by the

websites and so!tware available on internet%

• The siGe o! the sam"le is too small lookin# to the nature o! the study and due to

tome and money constraints relatively smaller sam"le was chosen%

• The basis o! selection o! sam"le !or the study was va#ue% 1andomly individuals

were "icked u" to "rovide their res"onses %• There are only !ive "arameters taken !or study however there are certain other

"arameters on the basis o! which accurate in!erence can be drawn%

• The ratin#s #iven are on the basis o! data available on internet however the

!uture e!!iciency o! the low "er!ormin# com"any can be better%

• The data taken !or the com"arison o! the sam"le com"anies are o! last !our

years !rom 3255 to 325>% (owever the accurate result can be drawn i! the data

taken ran#es !rom last ten years%


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Con.0usion

A!ter analyGin# the !indin#s o! the research- I can conclude that Airtel la##ed behind its

com"etitors as !ar as customer service and availability is concerned% The ma.imum no%

o! "eo"le who use the mobile is in the a#e #rou" o! 32 to 37% &ash cards are the most"o"ular ty"e o! mobile connections- as they are consumer !riendly and rechar#in# the

connection is not a "roblem%

Ma.imum no% o! "eo"le s"ends 1S >22 on their connections% As Airtel is the only

com"any havin# the ma.imum no o! mobile connections so it must seriously look into

the loo" holes o! the e.istin# customer service de"artment%

As we know that now Airtel has already launched its "roduct with lo#o “: Aisi aGaadi aur

kahan: has already became "o"ular in market% So we can say that in s"ite o! so many

com"etitors in the market Airtel is havin# a #ood "osition just because every time- it

tries its best to understand the need o! its im"ortant customers%

From the com"arison and dee" analysis o! every as"ect o! business o! both the

com"anies we can conclude that $harti Airtel has to more work in every !ield o!

communication business%

It is the time not only to survive but to sustain in the market !or a lon# time%

For this Airtel has to work on its all marketin# strate#ies- marketin#- "romotion- brand

ima#e%etc%

Airtel has to take Idea% Jery seriously and u"date its own strate#ies !rom time to time

and when the need arises%

With a##ressive marketin# strate#ies Airtel has to tar#et rural India as


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2i"0ogra%#$


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