INTRODUCTION

Communication in India
India's telecommunication network is the second largest in the world based on the total number of telephone users (both fixed and mobile phone). It has one of the lowest call tariffs in the world enabled by the mega telephone networks and hyper-competition among them. It has the world's third-largest Internet user-base with over 137 million as of June 2012. Major sectors of the Indian telecommunication industry are telephony, internet and television broadcasting.

Telephony
The telephony segment is dominated by private-sector and two state-run businesses. Most companies were formed by a recent revolution and restructuring launched within a decade, directed by ministry of telecommunication and IT, department of telecommunication and ministry of finance. Since then, most companies gained 2G, 3G and 4G licenses and engaged fixedline, mobile and internet business in India. On landlines, intracircle calls are considered local calls while inter-circle are considered long distance calls. Foreign Direct Investment policy which increased the foreign ownership cap from 49% to 74%. Currently Government is working to integrate the whole country in one telecom circle. For long distance calls, the area code prefixed with a zero is dialed first which is then followed by the number (i.e. To call Delhi, 011 would be dialed first followed by the phone number). For international calls, "00" must be dialed first followed by the country code, area code and local phone number. The country code for India is 91. Several international fiber-optic links

include those to Japan, South Korea, Hong Kong, Russia, and Germany. Some major telecom operators in India include Airtel, Vodafone, Idea, Aircel, BSNL, MTNL, Reliance Communications, TATA Teleservices, Infotel, MTS, Uninor, TATA DoCoMo, Videocon, Augere, Tikona Digital.

Fixed Telephony
Until the New Telecom Policy was announced in 1999, only the Government-owned BSNL and MTNL were allowed to provide land-line phone services through copper wire in India with MTNL operating in Delhi and Mumbai and BSNL servicing all other areas of the country. Due to the rapid growth of the cellular phone industry in India, landlines are facing stiff competition from cellular operators. This has forced land-line service providers to become more efficient and improve their quality of service. Landline connections are now also available on demand, even in high density urban areas. India has over 31 million main line customers.

Mobile Telephony
In August 1995, Chief Minister of West Bengal, Shri Jyoti Basu ushered in the cellphone revolution in India by making the first call to Union Telecom Minister Sukhram. Sixteen years later 4th generation services were launched in Kolkata. With a subscriber base of more than 929 million, the Mobile telecommunications system in India is the second largest in the world and it was thrown open to private players in the 1990s. GSM was comfortably maintaining its position as the dominant mobile technology with 80% of the mobile subscriber market, but CDMA seemed to have stabilized its market share at 20% for the time being. By May 2012 the country had 929 million mobile subscribers, up from 350 million just 40 months earlier. The mobile market was continuing to expand at an annual rate in excess of 40% coming into 2010.

According to data provided by Minister of State for Communications and IT Milind Deora, as of 30 November 2012, India has 7,36,654 base transceiver stations (2G GSM & CDMA, and3G). Of those, 96,212 base transceiver stations provide 3G mobile and data services. Out of India's 640 districts, 610 districts are covered by 3G services as of 30 November 2012. The country is divided into multiple zones, called circles (roughly along state boundaries). Government and several private players run local and long distance telephone services. Competition has caused prices to drop and calls across India are one of the cheapest in the world. The rates are supposed to go down further with new measures to be taken by the Information Ministry. In September 2004, the number of mobile phone connections crossed the number of fixed-line connections and presently dwarfs the wire line segment by a ratio of around 20:1. The mobile subscriber base has grown by a factor of over a hundred and thirty, from 5 million subscribers in 2001 to over 929 million subscribers as of May 2012. India primarily follows the GSM mobile system, in the 900 MHz band. Recent operators also operate in the 1800 MHz band. The dominant players are Airtel, Reliance Infocomm,Vodafone, Idea cellular and BSNL/MTNL. There are many smaller players, with operations in only a few states. International roaming agreements exist between most operators and many foreign carriers. The government allowed Mobile number portability (MNP) which enables mobile telephone users to retain their mobile telephone numbers when changing from one mobile network operator to another. India is divided into 22 telecom circles:

Background of AIRTEL
Bharti Airtel Limited, commonly known as Airtel, is an Indian telecommunications services company headquartered at New Delhi, India. It operates in 20 countries across South Asia, Africa and the Channel Islands. Airtel has GSM network in all countries in which it operates, providing 2G, 3G and 4G services depending upon the country of operation. Airtel is the world's fourth largest mobile telecommunications company with over 261 million subscribers across 20 countries as of August 2012. It is the largest cellular service provider in India, with 183.61 million subscribers as of November 2012. Airtel is the third largest in-country mobile operator by subscriber base, behind China Mobile and China Unicom. Airtel is the largest provider of mobile telephony and second largest provider of fixed telephony in India, and is also a provider of broadband and subscription television services. It offers its telecom services under the airtel brand, and is headed by Sunil Bharti Mittal. Bharti Airtel is the first Indian telecom service provider to achieve Cisco Gold Certification. It also acts as a carrier for national and international long distance communication services. The company has a submarine cable landing station at Chennai, which connects the submarine cable connecting Chennai and Singapore. Airtel is credited with pioneering the business strategy of outsourcing all of its business operations except marketing, sales and finance and building the 'minutes factory' model of low cost and high volumes. Several operators have since copied the strategy. Its networkbase stations, microwave links, etc.is maintained by Ericsson, Nokia Siemens Network and Huawei, and business support is provided by IBM, and transmission towers are maintained by another company (Bharti Infratel Ltd. in India). Ericsson agreed for the first time to be paid by the

minute for installation and maintenance of their equipment rather than being paid up front, which allowed Airtel to provide low call rates of 1/minute (US$0.02/minute). During the last financial year (200910), Bharti negotiated for its strategic partner Alcatel-Lucent to manage the network infrastructure for the tele-media business. On 31 May 2012, Bharti Airtel awarded the three-year contract to Alcatel-Lucent for setting up an Internet Protocol access network (mobile backhaul) across the country. This would help consumers access internet at faster speed and high quality internet browsing on mobile handset Sunil Mittal founded the Bharti Group. In 1983, Mittal was in an agreement with Germany's Siemens to manufacture push-button telephone models for the Indian market. In 1986, Mittal incorporated Bharti Telecom Limited (BTL), and his company became the first in India to offer push-button telephones, establishing the basis of Bharti Enterprises. By the early 1990s, Sunil Mittal had also launched the country's first fax machines and its first cordless telephones. In 1992, Mittal won a bid to build a cellular phone network in Delhi. In 1995, Mittal incorporated the cellular operations as Bharti Tele-Ventures and launched service in Delhi. In 1996, cellular service was extended to Himachal Pradesh. In 1999, Bharti Enterprises acquired control of JT Holdings, and extended cellular operations to Karnataka and Andhra Pradesh. In 2000, Bharti acquired control of Skycell Communications, in Chennai. In 2001, the company acquired control of Spice Cell in Calcutta. Bharti Enterprises went public in 2002, and the company was listed on Bombay Stock Exchange and National Stock Exchange of India. In 2003, the cellular phone operations were rebranded under the single Airtel brand. In 2004, Bharti acquired control of Hexacom and entered Rajasthan. In 2005, Bharti extended its network to Andaman and Nicobar. This expansion allowed it to offer voice services all across India. In

2009, Airtel launched its first international mobile network in Sri Lanka. In 2010, Airtel acquired the African operations of the Kuwait based Zain Telecom.In March 2012; Airtel launched a mobile operation in Rwanda.

Background of VODAFONE
Vodafone Group Plc is a British multinational telecommunications company headquartered in London and with its registered office in Newbury, Berkshire. It is the world's second-largest mobile telecommunications company measured by both subscribers and 2011 revenues (in each case behind China Mobile), and had 439 million subscribers as of December 2011. Vodafone owns and operates networks in over 30 countries and has partner networks in over 40 additional countries. Its Vodafone Global Enterprise division provides telecommunications and IT services to corporate clients in over 65 countries. Vodafone also owns 45% of Verizon Wireless, the largest mobile telecommunications company in the United States measured by subscribers. Vodafone has a primary listing on the London Stock Exchange and is a constituent of theFTSE 100 Index. It had a market capitalisation of approximately 89.1 billion as of 6 July 2012, the third-largest of any company listed on the London Stock Exchange. It has a secondary listing on NASDAQ. The name Vodafone comes from voice data fone, chosen by the company to "reflect the provision of voice and data services over mobile phones. The evolution of 'Vodafone' brand started in 1982 with the establishment of 'Racal Strategic Radio Ltd' subsidiary of Racal Electronics plc - UK's largest maker of military radio technology. The same year, Racal Strategic Radio Ltd formed a joint venture with Millicom called 'Racal Vodafone', which would later evolve into the present day Vodafone.

On 28 July 2000, the Company reverted to its former name, Vodafone Group plc. In April 2001, the first 3G voice call was made on Vodafone United Kingdom's 3G network. In 2001, the Company acquired Eircell, the largest wireless communications company in Ireland, fromeircom. Eircell was subsequently rebranded as Vodafone Ireland. Vodafone then went on to acquire Japan's third-largest mobile operator J-Phone, which had introduced camera phones first in Japan. On 17 December 2001, Vodafone introduced the concept of "Partner Networks", by signing TDC Mobile of Denmark. The new concept involved the introduction of Vodafone international services to the local market, without the need of investment by Vodafone. The concept would be used to extend the Vodafone brand and services into markets where it does not have stakes in local operators. Vodafone services would be marketed under the dual-brand scheme, where the Vodafone brand is added at the end of the local brand. (i.e., TDC Mobil-Vodafone etc.) In 2005, Vodafone entered into a title sponsorship deal with the McLaren Formula One team, which has since traded as Vodafone McLaren Mercedes. In May 2011, Vodafone Group Plc bought the rest of the shares of Vodafone Essar from Essar Group Ltd with value of $5 billion and became a solely owned of Vodafone Essar. In April 2012, Vodafone announced an agreement to acquire Cable & Wireless Worldwide (CWW) for 1.04 billion. Vodafone was advised by UBS AG, while Barclays and Rothschild advised Cable & Wireless. The acquisition will give Vodafone access to CWW's fiber network for businesses, enabling it to take unified communications solutions to large enterprises in UK and globally; and expand its enterprise service offerings in emerging markets. On 18 June 2012, Cable & Wireless' shareholders voted in favors of the Vodafone offer, exceeding the 75% of shares necessary for the deal to go ahead.

Significance of Airtel
The unprecedented growth in the mobile is, perhaps, the most vivid facet of Indias economic transformation since the mid 1990s. Mobile technology and services came to India less than a decade ago. In the early days, a mobile was seen to be a fashion statement for the rich. Today, it is expected as a basic communication medium for all socioeconomic segments. As the pioneer and front runner, Airtel has been instrumental in leading and ushering in the mobile revolution in India. The Indian mobile market is, today, amongst the fastest growing and the most competitive in the world. Cellular Mobile Telephone Subscriber base has increased from 471.73 million in September 2009 to 525.09 million in December 2009, Airtel commands nearly 23% of the share of the market- making is the number one brand in the country. Airtels world class service and innovative products have enabled it to establish this position of leadership. Airtel is a brand of telecommunication services in India operated by Bharti Airtel.Bharti Airtel, formerly known as Bharti Tele-Ventures Limited (BTVL) is among India's largest mobile phone and Fixed Network operators. With more than 40 million subscriptions, the company is one of the world's fastest growing telecom companies. It offers its mobile services under the Airtel brand and is headed by Sunil Mittal, India's sixth richest man with a total worth of US$10 billion. The company is the only GSM operator to provide mobile services in all the 23 circles in India. The company also provides telephone services and Internet access over DSL in 14 circles. The company complements its mobile, broadband & telephone services with national and international long distance services. The company also has a submarine cable landing station at Chennai, which connects the submarine cable connecting Chennai and Singapore. The company provides reliable end-to-end data and enterprise services to the corporate customers by leveraging its

nationwide fibre optic backbone, last mile connectivity in fixed-line and mobile circles, VSATs, ISP and international bandwidth access through the gateways and landing station. Airtel is the largest cellular service provider in India in terms of number of subscribers.

Significance of Vodafone
In 1992, Hutchison Whampoa and its Indian business partner Max Group, established a company that in 1994 was awarded a licence to provide mobile telecommunications services in Mumbai and launched commercial services as Hutchison Max in November 1995. In Delhi, Uttar Pradesh (East), Rajasthan and Haryana, Essar Group was the major partner. But later Hutch took the majority stake. By the time of Hutchison Telecom's Initial Public Offering in 2004, Hutchison Whampoa had acquired interests in six mobile telecommunications operators providing service in 13 of India's 23 licence areas and following the completion of the acquisition of BPL Mobile that number increased to 16. In 2006, it announced the acquisition of a company (Essar Spacetel A subsidiary of Essar Group) that held licence applications for the seven remaining licence areas. Initially, the company grew its business in the largest wireless markets in India in cities like Mumbai, Delhi and Kolkata. In these densely populated urban areas it was able to establish a robust network, well-known brand and large distribution network all vital to long-term success in India. Then it also targeted business users and high-end post-paid customers which helped Hutchison Essar to consistently generate a higher Average Revenue Per User (ARPU) than its competitors. By adopting this focused growth plan, it was able to establish leading positions in India's largest markets providing the resources to expand its footprint nationwide.

In February 2007, Hutchison Telecom announced that it had entered into a binding agreement with a subsidiary of Vodafone Group Plc to sell its 67% direct and indirect equity and loan interests in Hutchison Essar Limited for a total cash consideration (before costs, expenses and interests) of approximately $11.1 billion. Hutch was often praised for its award winning advertisements which all follow a clean, minimalist look. A recurrent theme is that its message "Hi" stands out visibly though it uses only white letters on red background. Another successful ad campaign in 2003 featured a pug named Cheeka following a boy around in unlikely places, with the tagline, "Wherever you go, our network follows." The simple yet powerful advertisement campaigns won it many admirers. Ads featuring the pug were continued by Vodafone even after rebranding. The brand subsequently introduced ZooZoos which gained even higher popularity than was created by the Pug. Vodafone's creative agency is O&M while Harit Nagpal was the Marketing Director during the various phases of its brand evolution.

Comparative analysis of Airtel and vodafone

Innovation: The services provided by Vodafone are absolutely fantastic and one gets full network wherever he goes. Even in the remotest areas Vodafone has full network where other service provider hardly have any network. The schemes which are provided by Vodafone are Pro-active in nature i.e. he does not wait for something to happen but instead makes thing happen.

How Airtel can respond (benchmark): First up he must improve his network. He must have as many network tower as possible and go even in the remotest areas and have his network there too. He must come up with schemes which no other service provider is providing and become pro-active. At present Airtel is Reactive in nature i.e. he waits for other companies to come up with something new and then he follows him.