Project Report

Project Report

TATA-DOCOMO

Prepared by:

1. Ajay Karanwal (eMEP-09-001)

2. Krishnamurthy K Kallapur (eMEP-09-015)
3. Mukesh Jain (eMEP-09-021)
4. Parag Vaidya (eMEP-09-023)
5. Santosh Kinikar (eMEP-09-028)
6. Satyajeet Shah (eMEP-09-029)
7. Vinay Lomate (eMEP-09-042)

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Table of Contents

Table of Contents.............................................................................................................................2
Introduction......................................................................................................................................5
Situation Analysis............................................................................................................................6
Customers/Context.......................................................................................................................6
Competitors..................................................................................................................................7
Company......................................................................................................................................8
Collaborators..............................................................................................................................10
Objectives......................................................................................................................................11
Strategy..........................................................................................................................................11
Segmentation..............................................................................................................................11
Targeting....................................................................................................................................13
Positioning.................................................................................................................................14
Marketing Mix...............................................................................................................................15
Product.......................................................................................................................................15
Place...........................................................................................................................................16
Promotion...................................................................................................................................16
Price...........................................................................................................................................17
Implementation..............................................................................................................................18
Budget........................................................................................................................................18
Activity Schedule.......................................................................................................................19
References......................................................................................................................................20

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Abbreviations
CDMA Code Division Multiple Access
GSM Global System for Mobile Communication
CAGR Compounded Annual Growth Rate
Mn Million
VAS Value Added Services
USO Universal Service Obligation
ARPU Average Revenue Per User
Cr Crore
IVR Interactive Voice Response

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Introduction
TATA DOCOMO, is TATA Teleservices Limited's (TTSL) telecom service on the GSM
platform-arising out of the TATA Group's strategic alliance with Japanese telecom major NTT
DOCOMO in November 2008. TATA Teleservices has received a pan-India license to operate
GSM telecom services, under the brand TATA DOCOMO and has also been allotted spectrum in
18 telecom Circles.

India the second largest mobile market in the world, and is also among the fastest growing
mobile markets globally. Though this presents very high growth potential and opportunities,
TATA-DOCOMO by virtue of being a late entrant in this market also faces significant
challenges to penetrate and establish a stable share in the Indian telecom market.

This is an overall marketing plan of TATA-DOCOMO for Oct 2009 -10.

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Situation Analysis
CUSTOMERS/CONTEXT
If we look at Indian share globally in this segment, India, a relatively late entrant into mobile
services, has benefited from a significant decline in mobile network costs during the last three to
four years. As compared with a capital cost of US$50-90/subscriber to provide mobile service, it
costs as much as US$200-350/subscriber to provide fixed-line services. This and the added
benefit of mobility have led to stagnation in the total fixed line subscriber base, which along with
the significant growth in the mobile base has translated into India having one of the highest ratios
globally of mobile subscribers to total telecom subscribers.
Exhibit 1: Mobile subscribers’ percentage

India the second largest mobile market in the world is also among the fastest growing mobile
markets globally. The total number of mobile subscribers in India has increased from 6.4 Mn in
March 2002 to around 350 Mn in December 2008 at a CAGR of 81% aided by a significant
increase in network coverage and a continual decline in tariffs and handset prices.

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Exhibit 2: Growth in Indian Mobile Subscriber base

Considering the above factors supported by Exhibit 1 and 2, DOCOMO a global leader in the
VAS (Value-Added Services) space wanted to grow more into Indian Geography.

COMPETITORS
Telecom Industry in India is dominated by major players like Bharti-Airtel, BSNL, Reliance,
Vodafone, and IDEA with share market strength as per Exhibit 3, 4 and 5 given below.
Competition is very intense due to low points of differentiation.
Exhibit 1: Competition portfolio

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Exhibit 2: Competition region wise

Exhibit 3: Wireless subscriber Indian market share

India Wireless Connections (September 2009)
Sep-09 Aug-09 Additions Market Share
Bharti Airtel 110511416 107996533 2514883 23.43%
RCOM 86117663 84112632 2005031 18.26%
Vodafone 82846046 80874460 1971586 17.56%
BSVL 58756598 57304404 1452194 12.46%
Idea Cellular 51454402 50058471 1395931 10.91%
TATA Teleservices 46796033 42789210 4006823 9.92%
Aircel 25728633 24415514 1313119 5.45%
MTNL 4680141 4662833 17308 0.99%
Loop Telecom 2495087 2417446 77641 0.53%
Sistema Shyam 1960532 1732125 228407 0.42%
HFCL 379654 380288 -634 0.08%
All Operators 471726205 456743916 14982289 100.00%

COMPANY
TATA DOCOMO, is TATA Teleservices Limited's (TTSL) telecom service on the GSM
platform-arising out of the TATA Group's strategic alliance with Japanese telecom major NTT
DOCOMO in November 2008. TATA Teleservices has received a pan-India license to operate
GSM telecom services, under the brand TATA DOCOMO and has also been allotted spectrum in
18 telecom Circles. TTSL has already rolled out its services in various circles.

It offers both prepaid and postpaid GSM cellular phone with presence in 11 circles including
Madhya Pradesh & Chhattisgarh, Orissa, Maharashtra & Goa, Karnataka, Kerala, Tamil Nadu
and West Bengal. It has become very popular with its one second pulse especially in semi-urban
and rural areas. They are launching their service from the south of India to central, east and
north.

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The launch of the TATA DOCOMO brand marks a significant milestone in the Indian telecom
landscape, as it stands to redefine the very face of telecoms in India.

SWOT Analysis:
Strengths Weakness
Early Mover - Pioneer in India on one second Signal Strength
billing concept.

Innovative pricing models for almost Customer Service

everything be it voice calls, VAS services, and
IVR interactions.
Global leader in value added services. Low Price – Low Quality trap (due to
excessive focus on only price based
USP : Value Added Services like selling)
- Timed SMS
- Diet SMS
- Comix-on-the-go
- Interactive GPRS application,
- TATA i-Channel
Strong Alliance: Trusted TATA brand
combined with proven technological edge of
NTT DOCOMO.
Plans affordable by common people
Active in social media sites like Twitter,
Facebook, StumbleUpon, Technorati etc, one
of their strategies for marketing their products
and creating an online presence
Opportunities Threats
Scope to expand the coverage across the Cut-throat competition from other
growing Indian market : major service providers
VAS services market to grow to 450 billion
rupees by 2010
Introduce new plans targeted to internet users No strong POD other than price
Introduce 3G compliant services since Late entrant in Indian market
DOCOMO has the expertise in 3G
Introduce new combined plans like SMS, TRAI’s plan to introduce Mobile
Internet, calling integrated offers Number portability in early 2010
Association with Microsoft to launch the new
generation Windows Mobile 6.5 smart phones
TRAI’s plan to introduce Mobile Number
portability in early 2010
VAS for rural segment like integration with e-
choupal, mandi prices, weather information,
fish shoal movement etc.

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COLLABORATORS
TATA Teleservices is the pioneer of CDMA 1X technology platform in India with market share
of around 8.2% by 2008. TATA DOCOMO arises out of the TATA Group’s strategic alliance
with Japanese telecom major NTT DOCOMO in November 2008. TATA DOCOMO has
received a pan-India license to operate GSM telecom services—and has also been allotted
spectrum in 18 telecom Circles.

TATA DOCOMO has leveraged TATA’s brand image in India to form alliances with leading
players in the respective segments:
• Samsung has exclusively partnered with TATA DOCOMO to launch Galaxy i7500 in India.
• The new stylish Blackberry Curve 8250 smart phone is being launched in collaboration with
TATA DOCOMO offerings, is now on its way to appeal to a broad spectrum of retail and
business customers who want an exceptional mobile experience with the ease of mobile
access to every facility
• Leverage TATA Indicom’s presence across India for distribution channel partnership.
• Association with Microsoft to launch the new generation Windows Mobile 6.5 smart phones

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Objectives
Increase TATA DOCOMO’s GSM consumer base to 45 million by October 2010.

Strategy
SEGMENTATION
Demographic Segmentation (Age)

The Wireless Industry crossed 452.91 million-subscribers mark as by end of May 2009. This
total subscribers base of 452.91 million comprise of 298.15 million GSM and 105.51 million
CDMA subscribers. During the financial year 2008-09 around 130.67million subscribers were
added with a growth rate of 50.00% as compared to 58.12% growth during the year 2007-08.

Age Group Upto 30 (A) 30-50 (B) Above 50 (C)

Total GSM Base 298.15 million
Percentage 55% 30% 15%
Users 160 Mn 90 Mn 4.5 Mn
Source: TRAI

100% of age group of A + 50% of age group B + 50% CAGR = 300 Mn

Geographic Segmentation
Exhibit 4: Rural and Urban subscription share

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Segmentation Details:
 With the rural India growth story unfolding, the telecom sector is likely to see tremendous
growth in India's rural and semi-urban areas in the years to come. By 2012, India is likely to
have 200 million rural telecom connections at a penetration rate of 25 per cent. And
according to a report jointly released by Confederation of Indian Industry (CII) and Ernst &
Young, by 2012, rural users will account for over 60 per cent of the total telecom subscriber
base.
 India's rural majority today accounts for more than US$100 billion in consumer spending i.e.
the largest buyers as a group in the country and contributing significantly to India's GDP. In
99-00, for every $100 earned by a person residing in a rural area, a person in an urban area
earned approx. $182. Today, this gap has been reduced to $56.
 Saturation in Urban Market Teledensity at 71%, Rural India teledensity is less than 10%,
Scope of growth based on affordable tariffs
 The regulator has put thrust on rural rollouts and will provide aid through USO fund.

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TARGETING
Targeting (by Age)
Based on segmentation decided to go for Market segmentation as below,

Age Group Youth Middle Age Senior Citizen

Income High Medium Low

100% of age group of A+ 50% of age group B + 50% CAGR = 300 Mn

Considering 15% market capture in GSM market = 0.15*300 = 45 Mn

Target 34 million subscribers from the youth and middle age segment in urban segment, from the
total target of 45 million.

Targeting (by geography)

The Target market for the Rural Area will be the R1, R2 and R3 segments in the villages having
population of 2000 and above. This will allow DOCOMO to concentrate on the 50% of rural
population without incurring a very high cost for expansion of services to remote interiors with
low user densities.

Therefore target population for rural is 54% of 62 crores i.e. 33 crores (330 million) (as per
Exhibit 6)

Target 11 million subscribers from the rural segment from the total target of 45 million.

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POSITIONING
For all GSM mobile users across India who need simplified, affordable and savings oriented
cellular service, TATA DOCOMO is a 3G ready GSM telecom service provider that provides a
range of innovative Value added Services with out of the box pricing plans. Unlike the other
GSM service providers, TATA DOCOMO is a youthful and vibrant brand that is set to break the
conventional thinking by introducing new features and services for all classes of people.

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Marketing Mix
PRODUCT
• TATA DOCOMO having good range of services: TATA DOCOMO provides both postpaid
and prepaid services.
• TATA DOCOMO Quality network: TATA DOCOMO intends to have good quality network
which provides clarity in voice.
• Prepaid Plan Features
o 1p/ second - Anywhere In India
o Savings Alert After every Outgoing call
o ISD calls on 1 second charging
o Best SMS rates from TATA DOCOMO
o Pre activated STD, ISD and National Roaming without rental
o Anywhere in India Recharge with TATA DOCOMO
o Total Information control

 For the rural population, voice alone cannot be incentive enough to subscribe for a telephone
connection even with the availability of low cost handsets and all the recent tariff initiatives.
The mobile handset has to become a multipurpose instrument providing entertainment, news,
education, connectivity as well as a means to promote the financial and business interests.
Value added services viz. education, entertainment, tele-medicine, banking, IPTV etc. Some
of these services can be provided through text messaging. However, in order to make up for
the slow pace of development in the past and offer range of usage/ application, it is necessary
that both voice and broadband go and in hand as far as strategy for rural India are concerned.

 Locally relevant applications in local languages–

 Alerts to farmers on Mandi prices
 Vital, real-time information is available to fishing communities (e.g. sea wave
heights, satellite scan data about fish shoals) which is processed to make it usable to
non-technical users.
 Integrated package consisting of text-messaging services, voice services and an
Internet portal for rural areas. Farmers and fishermen can access the service to get
weather forecasts, price information, and employment opportunities outside the
agricultural industry.
 Temperature, humidity, wind speed & direction and rainfall information
 Tie up with initiatives like ITC e-choupal to provide real time information via
mobiles

 Mobile Banking for Rural India:-

 Paying insurance premium and utility bills
 Sending and receive money (through agents/post offices etc)

 Applications for the health and education areas

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 Provide standard classroom content as part of broadband package
 Provide specialized e-classroom trainings
 Provide trainings for agriculture and livestock related areas – pay per use
 Provide technical (non agricultural sector) related trainings and certifications for
increasing employment opportunities – pay per use

 Applications for Department of Posts

 Applications to send the letters, greetings, messages etc electronically, only
generating hard copies at point of destination for distribution. This will save a lot on
logistics costs for department of posts. At the same time they can retain revenues.
 Applications for sending money orders through e-Money

PLACE
• It having good range of channels of distribution: As TATA already exist in this field of
telecommunications as TATA Indicom. It has wide range of channels of distribution to sell
TATA DOCOMO services
• Use TATA’s existing electronic retail chains like Croma for sales, distribution, returns and
customer service in urban areas.
• Tie-up with Department of Post
The Postal department has the required infrastructure and reach and also the expertise to
handle monetary transactions along with postal deliveries (money orders, stamps, savings
schemes, other miscellaneous services)
The Dept of Posts has a presence in every corner of the country. The Postman is a known
and recognized entity in even the smallest villages. He knows the people well in every
village and is well respected. He is also seen as a reliable and responsible Person since he
works with the government. He can also influence the decisions of the village folks due
to his unique position elaborated above. Postman can be used for credit verification,
address verification, training and support and can be given incentives for the same by the
telecom companies. TATA with its well respected brand and political clout can form this
alliance.
• Use Local Schools/Colleges etc for training in rural areas
The local schools will offer the presence of literate teachers who can be leveraged for
training the rural people in the use of mobile services and handsets. The teachers can also
serve as the voice through which the benefits can be communicated to the villagers.
• Dive-in stores in small cities.

PROMOTION
• Advertising: TATA DOCOMO following different style of advertising pattern in TV’s and
newspapers.
• Sales promotion: due to unique feature of TATA DOCOMO it helps the sales people to
decrease burden.
• Run promotions for mobile services and products during harvest season and festivals due to
the presence of higher disposable income during that period.

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• Run promotions through the local post office, gram panchayats, banks and schools, buses.
• Allow one month free service for the value added services as trial offers.
• Can introduce night free offer depending on customer reactions.
• Dive-in Stores
• Innovative and cost effective billing plans
• Give away/ freebies wrt milestone billing
• Social networking websites
• Cross selling and promotions with TATA’s other outlets like CROMA, Tanishq, TITAN

PRICE
Background:
 TATA DOCOMO is entering a market where:
o Product demand is highly price elastic.
o Substantial economies of scale are available.
o The product is suitable for a mass market (i.e. enough demand).
o The product will face stiff competition soon after introduction
o Because of the cut throat competition, price skimming will not work.

Pricing:
 The pricing objective is market penetration and to reach as many consumers as possible,
setting a low initial entry price, lower than the eventual market price, to attract new
customers. We expect that customers will switch to the new brand because of the lower price.
 This will help in fast diffusion and adoption. This will take the competition by surprise, not
giving them time to react.
 This will also create goodwill among the early adopters segment. This can create more sales
through word of mouth.

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Implementation
BUDGET
Considering 45 Mn market for next year, with ARPU of Rs. 165, the total revenue target will be
742 Cr.

Activity Budget Allocated Amount (in Cr)

Sales and Marketing 15% 111
Operating cost 22% 163
Salary 8% 60
Depreciation and 25% 185
Amortization
Administration 15% 111
Profit Expected 15% 111
Total 100% 742
(Figures are based on recent balance sheet from DOCOMO)

The marketing budget of 111 Cr is used for the Activity Scheduling and Implementation till Oct
2010.

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ACTIVITY SCHEDULE

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R EFERENCES
 Telecom Regulatory Authority of India (TRAI) Database and Reports
 Marketing Management by Philip Kotler, Kevin Lane Keller, Abraham Koshy,
Mithileshwar Jha.
 International Telecommunication Union Database
 BSE India website (http://www.bseindia.com)
 Telecommunication Services, Indian Industry: A Monthly Review, CMIE – November
2008
 Telecommunication Sector Report – March 2008, CRISIL
 Indian Telecommunication Sector - August 2007, IBEF Report
 Census 2001
 TATA DOCOMO and Competitors websites
 http://www.mplans.com
 http://www.knowthis.com

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