The project “Business potential of data solutions in the Kolkata SME market” has been done during my Summer Internship Program at Vodafone India during February to May of 2011, as a partial fulfillment of the requirement of PGPM program of IBS Kolkata.


The Summer Internship Program at Vodafone India was a great learning experience for me. The project was quite interesting as the telecom industry is a highly evolving industry in India with intense competition and lots of changes happening.

The project would not have been a smooth run for me without the help of lots of people. I would like to mention Mr. Saugat Kumar's (company guide) help at Vodafone with respect to practical exposure to the telecom industry. He had given me thorough insight into the dynamics of the telecom industry and also facilitated practical exposure through variety of activities. I would also like to acknowledge Mr. Siddhartha Kar's (marketing manager) guidance regarding project formulation, questionnaire designing and chalking out a plan towards effective execution of the project. Also, there were a lot of other people at Vodafone, who helped me to understand this industry and work through my project.

In the academic front, I would like to mention the support of my faculty guide Prof. Bhaskar Basu and my SIP coordinator Dr. Subir Sen. They have given me constant guidance throughout my project regarding academics and SIP formalities.

Most importantly, I am grateful to my family who had been always supportive and encouraging in all my endeavors.












Table of Contents



Executive Summary






Telecom Industry: Market Scenario



Global Scenario



Indian Scenario



Indian Telecom Industry



Indian Telecom Industry Framework



Indian Telecom Circles



Vodafone: About the Company



Vodafone: SWOT Analysis



Description of the Project in Brief



Objectives of the Project



Kolkata SME Market



Vodafone: Products & Services



Summary of the Work Done






Limitations of the Study



Questionnaire Design



Analysis of the Market Survey









Appendix (Questionnaire)



Bibliography & References



As part of my Summer Internship Program of IBS Kolkata, I got an opportunity to do an assignment at Vodafone India. The project was “Business potential of data solutions in the Kolkata SME market”. Vodafone is one of the premier telecom companies globally and getting an opportunity to work there helped me gain a lot of exposure in the corporate world.

The Telecom is a high volume industry in India with lot of competition. The Telecom industry in India is divided into 23 circles and around 14 telecom service providers are presently operating in these circles. The most prominent among the service providers are Vodafone, Airtel, Reliance Communication, Tata Teleservices, BSNL, MTNL, Idea Cellular, Aircel, Uninor etc. The telecom products and services can be broadly classified into voice and data. The data solutions primarily include data cards, Blackberry services, mobile internet, internet leased line and wireline broadband. Vodafone's business operations are broadly classified into business and consumer divisions. My project was in the business division and was focused into the SME market of Kolkata. For Vodafone, a SME company is typically a company with annual turnover ranging from 10 to 250 crore rupees. The SME market of Kolkata is highly diversified with companies ranging from various industries, which include manufacturing, engineering, IT/ ITES, healthcare, education, hospitality, financial services, travel & tourism, logistics, real estate, trading (whole sellers/ retailers), pharmaceuticals, etc.

In the initial phase of my summer internship at Vodafone, I was required to do secondary research about the telecom industry (both national and global). From the secondary research, I learnt a great deal about the major telecom companies, telecom products & services, evolution of telecom technologies and the key operational issues of the telecom industry. Next I was given exposure to field operations through tele-marketing, visiting SME clients, traveling with the sales team, visiting distributors of the company and market mapping. The field exposure helped me to get a feel of the market at the basic level. This exposure later proved to be hugely beneficial when I started doing market survey.

The methodology of the project was to do a market research on a sample (consisting of SME companies in the Kolkata area). For time constraints, the sample size was kept at 65. Questionnaire was designed and market survey was conducted. Analysis was done on the data collected, ranging from SME company profiles, market size of the sample with respect to different products, client perception regarding various attributes of telecom service providers, competition among service providers and future SME market implications.

From the initial analysis it was found that the SME clients are highly demanding with respect to value they are getting and the price of the products. They were highly aware of their business's end to end operations and knew very well what kind of products would add value to their business operations. Regarding data solutions, wireless data has huge potential in the coming years.

The whole project helped me to learn a lot about the telecom industry and also get exposure to the sales & marketing operations of a MNC company like Vodafone.


The Telecom Industry has evolved a great deal over the past two decades. Advancement in communication and information technology has changed the industry structure dramatically. Earlier our communication needs were restricted to landline phones. But now almost everybody has a mobile phone connection. Mobile phones have changed our lives immensely. It has given us the power of communication anytime anywhere. At present the industry is going through tremendous transformation with the convergence of telecommunication, information technology and computer technology and thus making vast resources of information available in the palm of our hands. Wireless internet is the latest trend in the industry with the advent of 3G technology and in the long term there should be information boom, with gradual advancement towards LTE (long term evolution) and 4G. Wireless internet boom has already been experienced outside India mainly in North American, European and South East Asian markets. It has entered India quite late with roll out of 3G and is expected to create huge impact in our social and professional lives.

This project is only concerned with the business potential of data solutions. Before going deep into the project let me give a brief idea about the telecommunication industry, telecommunication technologies, major telecom players and various products & services.



  • By the end of 2010, there was an approximately 5.3 billion mobile cellular subscriptions worldwide, including 940 million subscriptions to 3G services.
  • Access to mobile networks is now available to 90% of the world population and 80% of the population living in rural areas.
  • People are moving rapidly from 2G to 3G platforms, in both developed and developing countries. In 2010, 143 countries were offering 3G services commercially, compared to 95 in 2007.
  • Towards 4G: a number of countries have started to offer services at even higher broadband speeds, moving to next generation wireless platforms - they include Sweden, Norway, Ukraine and the United States.
  • Mobile cellular growth is slowing worldwide. In developed countries, the mobile market is reaching saturation levels with on average 116 subscriptions per 100 inhabitants at the end of 2010 and a marginal growth of 1.6% from 2009-2010.
  • At the same time, the developing world is increasing its share of mobile subscriptions from 53% of total mobile subscriptions at the end of 2005 to 73% at the end of 2010.
  • In the developing world, mobile cellular penetration rates was expected to reach 68% at the end of 2010 - mainly driven by the Asia and Pacific region. India and China alone were expected to add over 300 million mobile subscriptions in 2010.
  • In the African region, penetration rates would reach an estimated 41% at the end of 2010 (compared to 76% globally) leaving a significant potential for growth.
  • The number of Internet users has doubled between 2005 and 2010.
  • In 2010, the number of Internet users would surpass the two billion mark, of which 1.2 billion would be in developing countries.
  • A number of countries, including Estonia, Finland and Spain have declared access to the Internet as a legal right for citizens.
  • With more than 420 million Internet users, China is the largest Internet market in the world.
  • While 71% of the population in developed countries are online, only 21% of the population in developing countries are online. By the end of 2010, Internet user penetration in Africa would reach 9.6%, far behind both the world average (30%) and the developing country average (21%).
  • While in developing countries 72.4% of households have a TV, only 22.5% have a computer and only 15.8% have Internet access (compared to 98%, 71% and 65.6% respectively in developed countries).
  • At the end of 2010, half a billion households worldwide (or 29.5%) would have access to the Internet.
  • In some countries, including the Republic of Korea, Netherlands and Sweden, more than 80% of households have Internet access, almost all of them through a broadband connection.
  • The number of people having access to the Internet at home has increased from 1.4 billion in 2009 to almost 1.6 billion in 2010.
  • There has been strong growth in fixed (wired) broadband subscriptions, in both developed and developing countries. At the end of 2010, fixed (wired) broadband subscriptions would reach an estimated 555 million globally (or 8% penetration), up from 471 million (or 6.9% penetration) a year earlier.
  • Despite these promising trends, penetration levels in developing countries remain low: 4.4 subscriptions per 100 people compared to 24.6 in developed countries.
  • The developing world's share of fixed (wired) broadband subscriptions is growing steadily. By the end of 2010, the developing world would account for an estimated 45% of global subscriptions (up from 42% five years earlier).
  • Africa still lags behind when it comes to fixed (wired) broadband. Although subscriptions are increasing, a penetration rate of less than 1% illustrates the challenges that persist in increasing access to high-speed, high-capacity internet access in the region.

With the rapidly increasing high-bandwidth content and applications on the Internet, there is a growing demand for higher-speed connections. For example, at the minimum broadband speed of 256 kbps, downloading a high-quality movie takes almost 1½ days - compared to 5 minutes at a connection speed of 100 Mbps.

With increase in GDP per capita, the propensity to consume increases and thus increases the availability of various services. In the above figure, GDP per capita and the penetration level of broadband services are mapped against each other. Countries like USA, Switzerland, France, Italy, Spain, Belgium and Canada have high per capita GDP and the broadband penetration is also high in these countries. South Korea has comparatively low per capita GDP but very high broadband penetration. On the other hand, UAE and Saudi Arabia have comparatively high per capita GDP, but their broadband penetration is low. Brazil, Russia and China have comparatively low per capita GDP and their broadband penetration is also low. India is nowhere in the picture in terms of broadband penetration.

Data business is seeing a steady growth across global markets. In 2010, data revenue generated per subscriber is highest in US & Canada followed by Western Europe, Asia Pacific and Eastern Europe.

According to Vodafone, the future of telecom business lies in the mobile data category with majority of the revenue share being generated from there. In 2014, an estimated $337bn revenue will be generated from mobile data business, almost $138bn increase from 2010.

India and China are the two emerging economies with substantial number of mobile customers and still having average mobile penetration level at 45% and 54% respectively, thus making them highly lucrative markets for mobile phone service providers.

With a high GDP growth, market customers growth and potential for SIM penetration, India is a high value market.

Figure: Market Share of Telecom Service Providers Globally (by number of subscribers)


Globally, China Mobile is in the first position (522m subscribers), followed by Vodafone (333m), Telefonica (202m), America Movil (201m) and Telenor (172m). Two Indian companies Bharti Airtel (125m) and Reliance Communication (100m) are in the top 15 list.


The number of telephone subscribers in India increased from 671.69 million in Jun-10 to 723.28 million at the end of Sep-10, registering a sequential growth of 7.68% over the previous quarter as against 8.11% during the QE Jun-10. This reflects year-on-year (Y-O-Y) growth of 42.09% over the same quarter of last year. The overall tele-density in India has reached 60.99 as on 30th September 2010.

Subscription in Urban Areas grew from 452.59 million in Jun-10 to 487.07 million at the end of Sep-10, taking the Urban Tele-density from 128.20 to 137.25. Rural subscription increased from 219.09 million to 236.21 million, and the Rural Tele-density increased from 26.43 to 28.42. The share of Rural subscribers has increased slightly to 32.66% in total subscription from 32.62% in Jun-10.

About 66.83% of the total net additions have been in Urban areas as compared to 63.47% in the previous quarter. Rural subscription recorded a decline in rate of growth during the quarter, from 9.18% in Jun-10 to 7.81% in Sep-10. Rate of growth for Urban subscription increased marginally from 7.61% in QE Jun-10 to 7.62% in QE Sep-10.

With 52.21 million net additions during the quarter, total wireless (GSM + CDMA) subscriber base registered a growth of 8.21% over the previous quarter and increased from 635.51 million at the end of Jun-10 to 687.71 million at the end of Sep-10. The year-on-year (Y-O-Y) growth over the same quarter of last year is 45.79%. Wireless Tele-density reached 57.99.

Wireline subscriber base further declined from 36.18 million at the end of Jun-10 to 35.57 million at the end of Sep-10, bringing down the wireline Tele-density from 3.06 in Jun-10 to 3.00 end of Sep-10.

Internet subscribers increased from 16.72 million at the end of Jun-10 to 17.90 million at the end of Sep-10, registering a quarterly growth rate of 7.02%. Top 10 ISPs together hold 95% of the total Internet subscriber base.

Number of Broadband subscribers increased from 9.47 million at the end of Jun-10 to 10.30 million at the end of Sep-10, registering a quarterly growth of 8.79% and Y-O-Y growth of 42.93%. The growth in the number of Broadband subscribers during the quarter and also on Y-O-Y basis is more or less similar to the growth in the overall telephone subscriber base.

Share of Broadband subscription in total Internet subscription increased from 56.7% in Jun-10 to 57.6% in Sep-10. 86.89% of the Broadband subscribers are using Digital Subscriber Line (DSL) technology.

Average Revenue Per User (ARPU) for GSM-Full Mobility service declined by 10.16%, from Rs.122 in QE Jun-10 to Rs.110 in QE Sep- 10, with Y-O-Y decrease of 33.1%.

ARPU for CDMA - full mobility service declined by 1.34%, from Rs.74 in QE Jun-10 to Rs.73 in QE Sep-10. ARPU for CDMA has declined by 17.5% on Y-O-Y basis.

GSM subscription continues to grow at a faster rate. At the end of Sep-10, GSM subscribers constituted 84.12% of the wireless market.

The GSM subscribers were 578.49 million at the quarter ending Sep-10 as against 527.62 million at the end of the previous quarter, showing a growth of 9.64%. Bharti with 143.29 million subscribers continues to be the largest GSM mobile operator, followed by Vodafone (115.55 million).

The CDMA subscriber base increased to 109.22 million during the quarter ending Sep-10 from 107.88 million at the end of previous quarter, thereby showing a growth rate of 1.23%. Reliance with 55.29 million subscribers continues to be the largest CDMA mobile operator. However, in terms of net additions during the quarter, Sistema added the highest number of subscribers (1.54 million), followed by Tata (1.20 million), rest of the service providers recorded decline in subscribers.

Figure: Market Share of Telecom Service Providers (GSM) in India (by number of subscribers in million, 2010)





The Telecom Regulatory Authority of India (TRAI) is the independent regulator established in 1997 by the Government of India to regulate the telecommunications business in India.


The Telecom Commission and the Department of Telecommunications are responsiblefor policy formulation, licensing, wireless spectrum management, administrative monitoring of PSUs, research and development and standardization/validation of equipment etc.


The Wireless Planning and Co-ordination (WPC) Wing of the Ministry of Communications, created in 1952, is the National Radio Regulatory Authority responsible for Frequency Spectrum Management, including licensing and caters for the needs of all wireless users (Government and Private) in the country. It exercises the statutory functions of the Central Government and issues licenses to establish, maintain and operate wireless stations. WPC is divided into major sections like Licensing and Regulation (LR), New Technology Group (NTG) and Standing Advisory Committee on Radio Frequency Allocation (SACFA). SACFA makes the recommendations on major frequency allocation issues, formulation of the frequency allocation plan, making recommendations on the various issues related to International Telecom Union (ITU), to sort out problems referred to the committee by various wireless users, etc.


TDSAT (Telecom Disputes Settlement & Appellate Tribunal) was set up in May 2000 by the government of India. The TDSAT was set up so that it can adjudicate over disputes that arise in the telecommunication sector. TDSAT was established with the view to protect the interest of the consumers and service providers of the telecommunication sector and also to encourage and ensure the growth of the telecommunication sector. The various functions of TDSAT (Telecom Disputes Settlement & Appellate Tribunal) are that it can adjudicate any disputes that arise between a group of consumers and service providers, a licensee and a licensor, and also between two or more than the service providers.


The Indian telecom sector is divided into 23 circles which are as follows:

Business Potential of Data Solutions in the Kolkata SME MarketPage 1

Soumya Santa Dwari


PGPM 2010 - 12, IBS Kolkata

  • Andhra Pradesh
  • Assam
  • Bihar and Jharkhand
  • Chennai
  • Delhi & NCR
  • Gujarat
  • Haryana
  • Himachal Pradesh
  • Jammu & Kashmir
  • Karnataka
  • Kerala
  • Kolkata
  • Madhya Pradesh & Chhattisgarh
  • Maharashtra and Goa (except Mumbai)
  • Mumbai
  • North East
  • Orissa
  • Punjab
  • Rajasthan
  • Tamil Nadu (except Chennai)
  • UP(E)
  • UP(W)
  • West Bengal (except Kolkata)

Business Potential of Data Solutions in the Kolkata SME MarketPage 1

Soumya Santa Dwari


PGPM 2010 - 12, IBS Kolkata



Vodafone Group plc is a global telecommunications company headquartered in London, United Kingdom. It is the world's largest mobile telecommunications company measured by revenues and the world's second-largest measured by subscribers (behind China Mobile), with around 341 million proportionate subscribers as of November 2010. It operates networks in over 30 countries and has partner networks in over 40 additional countries. It owns 45% of Verizon Wireless, the second largest mobile telecommunications company in the United States measured by subscribers.

The name Vodafone comes from voice data fone, chosen by the company to "reflect the provision of voice and data services over mobile phones".

Its primary listing is on the London Stock Exchange and it is a constituent of the FTSE 100 Index. It had a market capitalization of approximately £92 billion as of November 2010, making it the third largest company on the London Stock Exchange. It has a secondary listing on NASDAQ.

Vodafone's operations are categorized in two divisions:

  • Consumer - This division caters to the B2C market and primarily operates like a FMCG company.
  • Business - This division caters to the B2B market and operates more like a corporate services company.

Vodafone India's ‘Business' division is operational in 9 circles. Vodafone's Business division operates through marketing & sales team and service team. The marketing & sales team again operates through

  • KAM (key account manager) - They give direct and highly customized service to the corporates and government and are meant for organizations having annual turnover greater than rupees 100 crores.
  • Channel Partner - CP is responsible for giving service to small organizations having annual turnover less than rupees 100 crores.



Diversified geographical portfolio with strong mobile telecommunications operations in Europe, the Middle East, Africa, Asia Pacific and to some extent the US

Superior brand image

Very good network infrastructure

Innovative products and services

Strong presence in the urban areas


Business highly concentrated in the European area than other global markets

Weak presence in the rural areas


High growth emerging markets, BRICS countries comprising Brazil, Russia, India, China and South Africa

Consolidation in the telecom industry

Research and development of new telecom technologies


Highly competitive market with key players indulging in price wars

Matured European market with very high penetration rates


We have to explore the SME market of Kolkata region and identify client needs in terms of data solutions. We also need to compare Vodafone with its competitors in terms of product offerings in the areas of business data solutions for the SME segment. Finally, we need to evaluate the business potential of the Kolkata SME segment in terms of data solutions for Vodafone, both at present and in the near future.


  • To find & understand the requirement of data solutions in Kolkata SME base (business sector specific data solution requirements).
  • To estimate the market size of data solutions in the Kolkata SME base.
  • To compare the data solutions of Vodafone with its competitors.
  • To forecast future product/ service requirements in Kolkata SME base.


The Kolkata region is largely composed of SME companies rather than large MNC's. For Vodafone, a SME would typically be a company, whose annual turnover is in the range of rupees 10 to 250 crores. Vodafone (Kolkata circle) has divided Kolkata region into 6 zones - CBD 1 (central business district), CBD 2, North, South, Howrah and Hoogly. The main concentration of SME business in Kolkata is in the central business district area comprising of Dalhousie, BBD Bag, Esplanade, Central Avenue, Burrabazaar, AJC Bose Road, Chowringhee, Park Street, Park Circus, Camac Street, Shakespeare Sarani, Sarat Bose Road, Minto Park, etc. A lot of SME companies in Kolkata will also fall in the IT/ ITES category, which are mainly concentrated at Sector V, Salt Lake and Rajarhat New Town.

Typical features of a SME would be:

  • Small workforce
  • Unorganized
  • Will look for more value for money
  • Less buying power compared to corporates
  • Key decision maker would be one or two individuals for all operations


The various products and services of Vodafone that we are dealing with are as follows:

Wireless Data Solutions (2G/ 3G)

§ Data Cards/ USB Dongles

§ Blackberry Plans

§ Vodafone Mobile Connect

Fixed Line

§ Voice

§ Data

Machine to Machine Solutions

§ Telemetry Solutions

§ Vehicle Tracking/ People Tracking/ Asset Tracking Solutions

§ Security Solutions

  • Bulk SMS
  • Toll Free Numbers
  • Audio/ Video Conferencing
  • VPN (virtual private network)
  • GVN (global virtual number)/ Interactive SMS
  • 3G specialized products

§ Office in a Box (1 3G simcard, 1 fixed line slot, 4 slots - LAN + Wi-fi)

§ Wi-mi (1 3G simcard, 5 Wi-fi connections)


  • Initially, we did secondary research on global & Indian telecom market, evolution of telecom technologies, SME market, latest trends in the telecom industry (3G, 4G, Machine to Machine solutions, LTE) and various telecom products & services.
  • Next, we were given field exposure in terms of tele-marketing, traveling with FOS (Fleet on Street) team, visiting SME clients, visiting company channel partners and market mapping.
  • Next, we designed questionnaire keeping in mind the project objectives.
  • Finally, we conducted market survey.

The learning that we achieved by doing the above tasks are of tremendous value for the execution of our project. It not only gave us an insight into how we were going to approach the project but also an invaluable ground level market exposure. From the field exposure we got a clear picture about the micro level sales operations of the telecom business, the Kolkata SME market overview and most importantly the soft skills of client handling. The learning outcomes of the activities undergone are briefly described below.


Learning Outcomes

Secondary Research

Got an overview of the telecom sector (global & national)

Became aware of the major telecom companies

Came to know about the various telecom products & services

Learnt about the evolution of telecom technologies

Also learnt about the latest trends in the telecom industry

Got an idea of the SME sector business structure

Tele Marketing

Learnt the art of sales pitch

Learnt about telephone etiquette

Got an idea of how to communicate to a business client

Learnt about how to influence a potential customer and close a deal

Traveling with FOS

Got an idea about the basic level sales and client handling operations of a telecom company

Got practical experience of face to face business negotiations

Learnt about how to keep business relationship with clients

Channel Partner visits

Learnt about the sales & distribution of a telecom company in the B2B sector

Got an idea of the operations of a channel partner

Learnt about how company and channel partner operations are integrated

SME client visits

Got a feel of the Kolkata SME companies

Became aware of the client expectations from a telecom service provider

Got an idea of the client's perception of Vodafone and its products & services

Learnt about how to professionally handle clients and responsibly execute tasks

Market Mapping

Exploration of the Kolkata business areas and identification of prospective clients

Became aware of the streets of Kolkata in the business localities and the important office buildings

Questionnaire Design

What information to capture in order to fulfill our project objectives

How to frame questions so that we can capture the desired information


Sample size will be 65 SME companies in the Kolkata area consisting of Vodafone accounts as well as its competitor accounts.

Primary research

§ Vodafone management and sales team

§ Vodafone channel partners

§ Client visits and market survey

Secondary research

§ Internet

§ Books and journals

§ Magazines and newspapers

Qualitative analysis to explore (using bar charts, pie charts, line diagrams & scatter plots)

§ Client characteristics

§ Client perceptions

§ Client awareness

§ Client needs (present & future)

Quantitative analysis to explore (using Excel)

§ Competitor analysis

§ Relationship with business sector & product requirements

§ Relationship with client perception & purchase behavior


  • Time constraints: Kolkata SME market is quite huge and telecom data solutions are continuously evolving, thus 3 months is very short duration to do an in-depth analysis.
  • Availability of secondary data: SME market is largely unorganized, so collection of data from the internet, journals, magazines, published reports and industry white books is largely difficult.
  • Information sharing: Most of the SME companies do not follow industry best practices and lack transparency, therefore gathering information from these companies is a tedious job.
  • Reach to top management: Getting information and gaining access to the top management via the gatekeeper, receptionist and the clerk are quite difficult.

15. QUESTIONNAIRE DESIGN (see appendix for questionnaire)

Questions 1 - 7: To get an overview of the company regarding the business sector, no. of employees, annual turnover, company decision maker, no. of offices.

§ Business sector divided into 16 categories to capture the Kolkata SME market

§ Annual turnover and no. of employees: Options have been categorized into 5 slots keeping in mind that for Vodafone, a SME company's annual turnover will be between rupees 10 to 250 crores.

Questions 8 - 10: To get an idea about the company's telecom service provider, annual telecom expenditure and the telecom services presently used by the company.

§ Telecom service provider: Taken into account major telecom companies like Vodafone, Airtel, Reliance, Tata Teleservices, BSNL, Aircel, Idea Cellular, MTS and Uninor.

§ Annual telecom expenditure: Categorized into 5 options keeping in mind the annual turnover categorization. Typically it is expected that a SME company's annual telecom budget would be 1% of its annual turnover.

§ Telecom products & services currently in use: The main products & services which might be used by a SME are expected to be fixed line voice & data, wireless voice & data, bulk SMS, toll free numbers, M2M solutions, VPN, GVN, audio & video conferencing, etc. For each of the products in use, we will try to capture the satisfaction level (scaling 1 to 5) and also customer feedback.

Question 11: Company's key decision maker's awareness regarding telecom products and service providers.

§ Awareness regarding the product & services: In this case we will try to capture how aware the client is with the utility and functionality of the products & services.

§ Awareness regarding the service providers: This to capture the awareness level of the clients regarding the various telecom service providers with respect to each product & service.

Questions 12 - 17: To get a clear picture regarding the client needs, perception of the client with respect to telecom products & services and the key attributes that might influence the client's buying behavior.

§ Service provider choice and importance: Here we will try to capture the extent of influence of certain attributes on the client's buying behavior.

§ Comparison of different telecom service providers according to client's perception: Here we will try to get a comparative picture of the different service providers according to the client's perception with respect to certain attributes and products & services.

  • Questions 18 - 26: To analyze the client's future product requirements, changes in the client's business & thus its product requirements and the impact of telecom solutions on the client's business.
  • Scaling has been done from 5 to 1, 5 being the most preferable or the highest value and 1 being the least preferable or the lowest value.


The target companies of the market research belong to the SME category, with annual turnover ranging between 10 to 250 crore rupees. These companies belong to various business sectors such as manufacturing, engineering, IT/ ITES, financial services, healthcare, etc. Due to time constraints the sample size has been restricted to 65. The target companies are mainly located at Salt Lake Sector 5 and Central Kolkata. The analysis will cover companies' profile description, SME market size estimation (based on the sample) with respect to various telecom products specially data solutions, SME client perception regarding importance of certain attributes of telecom service providers, competition among the telecom companies and finally future implications in context of business potential in the Kolkata SME market.

Figure: Business Sector-wise Division of the Sample Companies

The companies in the sample mainly belong to the IT/ ITES sector (9 companies), followed by other services category (8 companies). The other services category mainly include CA companies, legal companies, consultancy, etc. Next comes banking & financial services and manufacturing (7 companies each). After that comes engineering and education (6 companies each).

From business sector to sector, the business operations of a company change a great deal and thus changes their product and service requirements.

Figure: Annual Turnover of the Sample Companies

Majority of the companies in the sample have annual turnover in the range 50 - 100 crore rupees. Only very few companies have turnover in the higher ranges. In total about 21 companies fall in the turnover category of 50 - 100 crore rupees. This is closely followed by the range 101 - 150 crore rupees, in which around 18 companies fall. Next comes the category of < 50 crore rupees, in which 17 companies fall.

More the turnover of a company, the propensity to invest for better functioning of business operations increases. Thus for companies with higher turnovers, their capacity to consume superior quality telecom products and services increases irrespective of the price.

Figure: Employee Strength of the Sample Companies

Majority of the target SME companies have employees in the range 50 - 100, with 19 companies falling in this category.

Figure: Annual Telecom Expenditure of the Sample Companies

Majority of the companies' annual telecom expenditure falls in the category of 1-50 lac rupees. Only six companies have annual telecom expenditure above 150 lac rupees.

Figure: Market Size of the Target Sample

Fixed line voice has the highest number of connections (1479 connections) in the target sample followed by data cards (592 connections) and blackberry (348 connections).

With the advent of 3G in India, the growth potential of wireless data solutions like data cards, blackberry services and internet on mobile is immense. In the coming years, wireless data will be the main revenue generator for telecom companies.

Figure: Fixed Line Voice Market Share among Target Companies

Airtel has the largest number of fixed line voice connections among the sample companies with number of connections at 563. BSNL comes second with number of connections at 458.

Figure: Internet Leased Line Market Share among Target Companies

In this case, Reliance (11 connections) is the market leader followed by Airtel (7 connections).

Figure: Wireline Broadband Market Share among Target Companies

In this case, Airtel (64 connections) has the largest presence with BSNL (47 connections) in the second position.

Figure: Data Cards Market Share among Target Companies

In this product category, Tata Teleservices (167 connections) is the market leader followed by Reliance (126 connections).

Figure: Blackberry Market Share among Target Companies

Vodafone has the largest number of Blackberry services subscribers (97 connections) among the sample companies and it is closely followed by Airtel (89 connections).

Figure: Client Perception with respect to the importance of the Telecom Service Providers' Attributes

Brand image would be that attribute of a company which explains how a customer would perceive that company. Higher brand value signifies that the customer will aspire to associate and relate with the brand. Lower brand value on the other hand signifies that the customer will most unlikely associate with the brand. Brand image of a company will largely depend on how it endorses its products, quality of its products and how extensively it penetrates the lives of people.

Quality in case of data solutions signifies the data transfer speed, network connectivity and network coverage.

Price in case of data solutions includes the one time investment in the equipment (blackberry handset, usb dongle, modems, etc) and also periodical subscription charges.

Customer service indicates how customer grievances are handled and also to what extent customer enquiries are addressed to.

Promotional offers are time to time endorsements to existing customers regarding best value deals so that they are delighted and remain loyal to the company.

Innovative solutions indicate how effective the company is in constantly improving their products and addressing the consumer needs by providing customized products and services.

User friendliness of products and services means how easily the customer can use the products and avail the services with negligible amount of glitches.

Professionalism and transparency indicate to what extent the company is receptive towards consumer needs and how information is shared without any distortions. For example, how company handles billing and customer complains.

Most of the clients regard quality and customer service as the two most important attributes for their choice of telecom service providers. Next come price and professionalism & transparency. Promotional offers are least important for them.

Vodafone has got the highest brand value from the sample clients and is followed by Airtel. This was quite expected owing to the fact that Vodafone spends a lot of money on advertisements and also does sponsorships in a big way. The ‘Zoo Zoo' campaign is already a big success.

The sample clients have rated Reliance as the most customer service oriented company. It is closely followed by Airtel and Vodafone.

In this regard, Vodafone scores the highest and is followed by Airtel and Reliance.

In this case, Reliance (4.2 score) scores highest in terms of quality, BSNL (4.1 score) scores highest in terms of price and Airtel (3.9 score) scores highest in terms of promotional offers.

In case of Blackberry services, Vodafone (4.6 score) scores highest in terms of quality, Tata Teleservices (4.2 score) scores highest in terms of price and Airtel (4.2 score) scores highest in terms of promotional offers.

In this case, Tata Teleservices (4.6 score) scores highest in terms of quality, BSNL (4.2 score) scores highest in terms of price and Tata Teleservices (4.1 score) scores highest in terms of promotional offers.

Among the sample companies, the ones who responded that they are most likely to switch their telecom service provider, the main reason for switching is over-priced followed by products & services below expectations.

Majority of the companies responded that there is a probability that the workforce of the company might increase.


  • The SME market is a lucrative market with high potential for wireless data solutions.
  • Quality and customer service are the two most important considerations for SME clients regarding telecom service provider choice.
  • Considering data solutions usage, companies belonging to sectors like IT/ ITES, education, financial services, other services, manufacturing and engineering are the frontrunners.
  • Fixed line market will be gradually stagnating.
  • With the advent of 3G, wireless data will be the high growth business vertical and largely revenue generation will happen from this segment.
  • In the wireless data market, Vodafone is in competitive position with respect to Blackberry services, but it is lagging behind others with respect to data cards.
  • Vodafone is superior to others in context to brand image and professionalism & transparency, but is behind others with respect to customer service.
  • Vodafone is a new entrant in the fixed line business and may stiff competition from existing players like Airtel, Reliance and BSNL.


  • Vodafone should focus on wireless data domain.
  • Vodafone has to improve in terms of customer service.
  • Vodafone has a lot to do regarding data cards with respect to product improvement and market penetration.
  • Vodafone should focus on business sectors that have large requirements for data solutions and those sectors primarily are IT/ ITES, education, financial services, other services, manufacturing and engineering.