INTERNATIONAL BUSINESS STRATEGY ASSIGNMENT

TATA TELESERVICES STRATEGY REPORT

AKANKSHA JAIN JAYPEE BUSINESS SCHOOL

E.NO 10609133

1. INTRODUCTION Communications is among the Tata Groups larger investments, with over $7.5 billion already committed. The Groups objective is to provide end-to-end telecommunications solutions for business and residential customers across the nation and internationally. The Groups communications activities are currently spread primarily over four companiesTata Teleservices Limited, its associate Tata Teleservices (Maharashtra) Limited, Tata Communications (erstwhile VSNL) and Tata Sky. Together, these companies cover the full range of communications services, including:

Telephony Services: Fixed and Mobile Media & Entertainment Services: Satellite TV Data Services: Leased Lines, Managed Data Networks, IP/MPLS VPN, Dial-up Internet, Wi-Fi and Broadband

Value-added Service: Mobile and Broadband Content/Applications, Calling Cards, Net Telephony and Managed Services

Infrastructure Services: Submarine Cable Bandwidth, Terrestrial Fiber Network and Satellite Earth Stations and VSAT Connectivity.

TATA TELESERVICES Tata Teleservices Limited (TTL) spearheads the Tata Groups presence in the telecom sector. Incorporated in 1996, TTL is the pioneer of the CDMA 1x technology platform in India and embarked on a growth path after the acquisition of Hughes Telecom (India) Limited [renamed Tata Teleservices (Maharashtra) Limited] by the Tata Group in 2002. It launched mobile operations in January 2005 under the brand name Tata Indicom and today enjoys a pan-India presence through existing operations in all of Indias 22 telecom Circles. The

company is also the market leader in the fixed wireless telephony market. The companys network has been rated as the Least Congested in India for six consecutive quarters by the Telecom Regulatory Authority of India through independent surveys. Tata Teleservices Limited has also established a significant presence in the GSM space despite having entered the market less than two years ago in a joint venture with NTT DOCOMO of Japan, and offers differentiated products and services under the Tata DOCOMO brand name. Tata DOCOMO arises out of the Tata Groups strategic alliance with Japanese telecom major NTT DOCOMO in November 2008. Tata DOCOMO has received a pan-India license to operate GSM telecom servicesand has also been allotted spectrum in 18 telecom Circles. The company has rolled out GSM services in all of these 18 telecom Circles in the quick span of just over a year. Tata DOCOMO marks a significant milestone in the Indian telecom landscape, and has already redefined the very face of telecoms in India, being the first to pioneer the per-second tariff optionpart of its Pay for What You Use pricing paradigm. Tokyo-based NTT DOCOMO is one of the worlds leading mobile operatorsin the Japanese market, the company is the clear market leader, used by over 50 per cent of the countrys mobile phone users. Tata Teleservices Limited has also become the first Indian private telecom operator to launch 3G services in India under the brand name Tata DOCOMO, with its recent launch in all the nine telecom Circles where it bagged the 3G license. In association with its partner NTT DOCOMO, the Company finds itself favourably positioned to leverage this first-mover advantage. With 3G, Tata DOCOMO stands to redefine the very face of telecoms in India. Tokyo-based NTT DOCOMO is one of the worlds leading mobile operatorsin Japan, the company is the clear market leader, used by nearly 55 percent of the countrys mobile phone users. TTL recently entered into a strategic partnership agreement with the Indian retail giant Future Group to offer mobile telephony services under a new brand nameT24on the GSM platform. The exciting new brand was unveiled in February and the company announced the commercial launch of GSM operations under the brand name T24 in June, starting with the city of Hyderabad. It has now launched T24 GSM services in all 18 Circles where TTL has a GSM licence to operate its services. In December 2008, TTL announced a unique reverse equity swap strategic agreement between its telecom tower subsidiary, Wireless TT Info-Services Limited, and Quippo Telecom Infrastructure Limitedwith the combined entity kicking off operations with

18,000 towers, thereby becoming the largest independent entity in this spacewith the highest tenancy ratios in the industry. Today, the combined entitywhich has been rechristened as VIOM Networks- has a portfolio of nearly 45,000 towers. Tata Teleservices Limited, along with Tata Teleservices (Maharashtra) Limited, serves over 88 million customers in more than 450,000 towns and villages across the country, with a bouquet of telephony services encompassing Mobile Services, Wireless Desktop Phones, Public Booth Telephony and Wireline Services across a total of five brands vis a vis Indicom, Docomo, Virgin Mobile, Walky (the brand for fixed wireless phones), the Photon family (the companys brand that provides a variety of options for wireless mobile broadband access) and a strategic alliance for T24.

2. ENVIRONMENTAL CONCERNS: ISSUES 1. COST OPTIMISATION: Rapidly growing enterprises today need to optimize costs even as they step up investments to stay competitive. With the increasing geographic spread, communicating with a dispersed workforce and clientele becomes a key issue. Technology, which offers the edge, also brings forth the challenge of managing disparate vendors and solutions. With the need of spending on voice and data services, telecommunication forms one of the top non-operating expenses for enterprises. Recent research shows that migration to new technologies can save up to 33.45 percent of the expenses being made on the present architecture. While the uptake of new technologies can offer multiple savings, a holistic view of your communication network is thus crucial for actual cost optimization. Choosing a suitable service provider and the optimal solution can reduce CAPEX through outsourced telecommunication management and OPEX through reduced administrative activities, there by improve organizational efficiency and strongly supporting cost optimization. SOLUTION a) Recognizing enterprise needs, TTSL has developed a bouquet of solutions to optimize total cost of ownership (TCO) across verticals. TTSL solutions implemented have shown huge cost reductions. b) From basic data and voice services to high-end mobility and conferencing solutions, TTSL provides scalable, user-friendly and cost-effective solutions that enhance business agility. This includes closed user group (CUG) calling a popular feature availed by corporate clients that helps reduce cost to communicate internally. TTSL adds dimension to the existing CUG feature with a seamless CUG offering across Mobile, Walky, Wireline (POTS, PRI, Centrex, LDID & BRI) and Tata Docomo. c) Other attractive options include zero-investment EPBX for fixedline voice services, lowest-cost handsets with attractive features for CDMA mobile and enterprise prepaid services, the innovative Insta Conferencing solution that is extremely user-friendly and preferable to travel, attractive pricing and cost flexibility in Blackberry services that includes an OPEX-based model for a period of 12-18 months with convenient handset bundling, and TTSLs Managed Enterprise Network Services (MENS), which provides assured cost savings for legacy VPN and leased circuit

networks. 2. BUSINESS CONTINUITY Faced with demanding customers and stringent regulatory requirements, companies need to be proactive about business continuity planning. Cost-effective and efficient Business Continuity Management (BCM) strategies go a long way in building organizational resilience and protecting brand reputation in a volatile and high-risk global working environment. While regulatory requirements drive BCM in the banking sector, corporate governance and business strategy encourages it in FSI, TMT, manufacturing and the other sectors. 3. ENTERPRISE MOBILITY Enterprises are looking to centralize their mobility solutions in order to reduce costs and ensure effective, integrated mobilization of resources. This, in turn, will support improved productivity and flexibility. As multi-country mobility becomes pervasive, the focus is on managing costs optimizing international roaming costs and mobile contracts while ensuring secure, reliable connectivity. There is a premium, therefore, on innovative tools that promote real-time collaboration. a) An effective design and management of enterprise infrastructure along with the preparedness for addressing a pandemic situation is crucial to a business continuity strategy. b) With its diversified portfolio of services, TTSL can partner with enterprises and work collaboratively in planning network redundancies, load balancing, enabling network storage and restoring services, thus providing a complete business continuity solution. TTSLs business continuity solutions include cuttingedge Enterprise Data services, and pan-India, Fixed Line voice services. a) TTSL networking products and solutions enable employees to work where they can be most effective, while they maintain robust communication with stakeholders like customers, associates, supervisors and corporate leadership, helping the organization become leaner and agile. b) The portfolio of enterprise mobility services from TTSL include CDMA/ GSM mobile services that offer value added services like pooling of free calling minutes in a central account, closed user group (CUG) for Mobile, Walky, Wireline (POTS, PRI, Centerex, LDID & BRI) and Tata Docomo, which help customers optimize telecom cost. c) TTSL also offers fully managed and cost effective Conferencing services around voice and video that can track ongoing conferences through web.

d) In addition, TTSL offers state-of-the-art Enterprise Data services as well as the PRI-like wireless land line Walky service. Capable of instant installation, it reduces turnaround times for customers, even while offering benefits like single number, common number and hotline services. e) Enterprises can also opt for the extremely convenient and highspeed Tata Photon connections of 1 Gbps and above with Ethernet interface or very attractively priced TTSL Blackberry Enterprise services that function as productivity multipliers and cost savers. Hybrid Enterprise Prepaid service can convert variable telecom expenses into fixed cost while Smart services and Domain solutions offer a platform for companies to expand and grow. 4. PRODUCTIVITY ENHANCEMENT The metrics to measure productivity may vary significantly between sectors, Information and Communication Technologies (ICT) have been the key enablers to enhanced productivity all across. Research has shown that by leveraging effective ICT services, enterprises in growing markets can attain business productivity growth of between 33%-65%, depending on the scale of business and the industry in which they operate. Communication solutions rationalize and simplify the task of assembling, processing, analyzing and transmitting information, enabling enterprises to accomplish information-related tasks quickly and effectively. Seamless enterprise-wide connectivity with easy access to information, irrespective of the location, is invaluable. It a) TTSL has developed a range of services that enable the achievement of superior enterprise productivity. The goal is simple: maximized productivity at minimized costs. From basic data and voice services to high-end mobility and conferencing solutions, TTSL provides scalable, user-friendly and costeffective solutions that enhance business productivity. b) TTSL solutions include an innovative, fully managed, userfriendly Conferencing service. This cost-effective solution offers multiple solutions around voice and video, reduces a companys carbon footprint by tracking ongoing conferences through web and interoperability, even while promoting greater enterprise agility and simplified communication.

optimizes resource usage, improves collaboration and supports more rapid decision- making all of which contribute to higher all-round productivity.

c) In addition, TTSL offers state-of-the-art Enterprise Data services as well as the PRI-like wireless land line Walky service. Capable of instant installation, it reduces turnaround times for customers, even while offering benefits like single number, common number and hotline services. a) TTSL provides a number of solutions enabling enterprises to optimize their communications. TTSL attempts to give an enterprise CIO a complete, 360 degree overview of the organizations telecom and IT infrastructure and enable a single vendor, single bill and single point of contact, thus simplifying communications. b) TTSL has been committed to offer single window communication solutions to enterprises through its host of services such as the fully managed and cost effective Conferencing service, the fully scalable and secure Road Warrior service, the state of the art Enterprise Data services, pan-India Fixed Line voice services, the extremely convenient and fast Tata Photon services, 3G Wireless Connectivity, Broadband services at blistering speeds and highly attractively priced Blackberry Enterprise services. a) TTSL partners with enterprises to effectively address the sustainability issue and maximize business dividends. TTSL enables them to achieve both commercial and environmental sustainability through a portfolio of communication services that are targeted to achieve the business objective. b) Enterprises in pursuit of attaining enterprise sustainability and

5. SIMPLE COMMUNICATIONS

A scattered workforce, multiple suppliers and varied processes have underlined the growing intricacies of enterprise communications. Maintaining this complex mix, managing multiple networks and securing communication channels that use a range of mobile devices poses a formidable challenge. As communication architecture becomes more complex, enterprises need to be equipped to leverage its potential. Simplified and streamlined communications between enterprises and clients offers companies a competitive advantage they can serve clients faster and better. Having a single point of contact facilitates the working of an enterprise. It enables enhanced focus on core competencies, while improving productivity parameters.

6. SUSTAINABLE GROWTH Sustainable businesses participate in environmentally friendly activities to ensure that all processes, products, and manufacturing activities adequately address current environmental concerns while maintaining a profit. A successful sustainability strategy is a key bottom-line necessity for any company, and information and

communication technologies (ICT) are an important enabler for the commercial as well as environmental sustainability of an enterprise. The choice of optimal ICT solutions fosters sustainable growth for organizations by improving operational efficiency, delivering savings by consolidating, converging global infrastructure, facilitating worldwide collaboration thereby enabling them to reduce employee travel, lower carbon footprint, enhance brand reputation, improve customer and employee satisfaction, and provide cost as well as energy savings.

growth could explore TTSLs powerful services such as the fully managed and cost-effective Conferencing services, state-of-theart Enterprise Data services, the fast and convenient wireless high speed connectivity and the near indispensable machine solutions that are part of TTSLs Smart services and Domain solutions.

3. PROPOSED TEN YEAR STRATEGY (2010-20)

Creation of Tata Sustainability Solutions (TSS)

Centralized Consulting Support for All Business Units Increased Transparency. Financial Independence. Management Development. Fundraising Ease and Scalability. Strategic Continuity. Consistency of Business Practices.

Local Sensitivity with Global Reach Once the new companys sustainability support structure is in place, business unit management (in collaboration with TSS) can begin exploring initiatives that reflect each units target market need, their unique business expertise, and the future direction of sustainability within the community. Although these initiatives will be tracked in aggregate by TSS, the vast majority of the initiatives (with the exception of certain Social Works projects) will reside on the books of each business and must pass the same EVA analysis as any other project. The determination of what constitutes and EVA-supported initiative versus traditional social philanthropy will be determined by the TQMS process. STRATEGIC PLAN IMPLEMENTATION & TIMELINE Specific EVA and Net Present Value (NPV) supported initiatives for consideration include: Leveraging Tatas CSR core competency into a sustainability software consulting practice, Increase Tata Teas competitiveness by formalizing sustainability efforts through Rainforest Alliance Certification, Efforts to reduce energy usage through conservation efforts in the hotel chain and through supply chain management, and

ELV initiatives for Tata Motors.

SUBSIDIARY LEVEL STRATEGY: Strategy of TATA Indicom has many promotional programs like Television advertisement Calls free with special recharge offer Free downloading for internet facility Handset Upgrade program for all the individual post paid customers. Seasonal discount with purchase of handset etc

TATA Indicom products have different pricing strategies. There are two types of pricing strategies. They are market skimming and market penetration. Skimming means fixing at high price and selling to those customers who are less price sensitive. Penetration means fixing at low price initially. TATA Indicom follows their product by fixing the price at high.ie; market skimming. The price include the hand set and connection charge. Special Tariff Vouchers by TATA INDICOM Tata indicom presents a wide range of attractive plans like Pay Per Call Plan, Pay Per Second Plan, Pay Per Call FLEXI Plan. You can upgrade your base plan to any of the available plans. Following as Pay Per Call FLEXI Plan Tata indicom proudly presents the new Avatar of Pay Per Call Plan which will give Value for money to its customers - benefit on both short & long calls.
Pay Per Call FLEXI offer is valid on all calls made by Tata Indicom subscribers to any

mobile phone or land line connection, on any network.

 Subscriber can speak for as long as 5 minutes and have to pay Rs.1 for any local call and only Rs.2 for any STD call across any network.

Subscriber can discontinue Pay Per Call FLEXI tariff by recharging with Rs.8/- and get 90ps as local and Rs.1.50 as STD tariff. No daily decrement will be charged under this proposition. Prepaid Pay Per Call Plan Ab lambbi baat ghar ke phone ke saath. TATA Indicom is now powered with PAY PER CALL Tata Indicom proudly presents PAY PER CALL for prepaid indicom subscribers. With PAY PER CALL subscribers do not have to worry about their talktime as they can speak their heart's content. Subscriber can activate their phone with a starter kit available in market and then have to recharge with Rs.7/- voucher to avail PAY PER CALL benefit. Pay Per Second Plan 3 Pe 3 Free - Pay Per Second Plan. Lambi aur choti baton ke liye. Tata indicom proudly presents PAY PER SECOND with additional benefits for prepaid indicom subscribers. Subscriber can activate their phone with a starter kit available in market and then have to recharge with Rs.150/- voucher to avail PAY PER SECOND with 3 Pe 3 offer. For every 3 minutes of Local & STD call, you get the next 3 minutes free in the same call. Major highlights of PAY PER SECOND with 3 Pe 3 offer Subscriber pays just 1 paisa per Second for any Local & STD calls. For every 3 minutes of Local & STD call, subscriber gets the next 3 minutes free in the same call. Benefit will be applicable only till 12 minutes of a call after which subscriber will be charged as 1 paisa/sec. Incoming validity will be for Life but Tariff validity will be for 1 year. Subscriber can discontinue PAY PER SECOND tariff with Rs.8/- recharge voucher and get 90paisa as local and Rs.1.50 as STD tariff. No daily decrement will be charged under this proposition.

Note: Existing subscribers can migrate to PAY PER SECOND proposition with Rs.177 recharge voucher. Terms & Conditions apply.

JOINT VENTURESa) TTSL & NTT DOCOMO:

Tata DOCOMO has also become the first Indian private operator to launch 3G services in India, with its recent launch in all the nine telecom Circles where it bagged the 3G license. In association with its partner NTT DOCOMO, the Company finds itself suitably positioned to leverage this first-mover advantage. With 3G, Tata DOCOMO stands to redefine the very face of telecoms in India. Tokyo-based NTT DOCOMO is one of the world's leading mobile operatorsin Japan, the company is the clear market leader, used by nearly 55 per cent of the country's mobile phone users. NTT DOCOMO has played a major role in the evolution of mobile telecommunications through its development of cutting-edge technologies and services. Over the years, technologists at DOCOMO have defined industry benchmarks like 3G technology, as also products and services like i-Mode, e-wallet and a plethora of lifestyle-enhancing applications. Last year itself, while most of the rest of the industry was only beginning to talk of 4G technology and its possible applications, DOCOMO had already concluded conducting 4G trials in physical geographies, not just inside laboratories! DOCOMO is a global leader in the VAS space, both in terms of services and handset designs, particularly integrating services at the platform stage. The Tata Group-NTT DOCOMO partnership will see offerings such as these being introduced in the Indian market through the Tata DOCOMO brand. Tata DOCOMO has also set up a 'Business and Technology Coordination Council', comprising of senior personnel from both companies. The council is responsible for the identification of key areas where the two companies will work together. DOCOMO, the world's leading mobile operator, will work closely with the Tata Teleservices Limited management and provide knowhow to help the company develop its GSM business.

b) TTSL & VIRGIN MOBILE: UK based mobile company, virgin mobile forming a 50:50 JV with Tata TeleServices (TTSL). The JV will be more towards adding Value Added Services and handsets targeting youth, which comprises 50% of Indian mobile market, rather than owning the network. This implies that Tata Indicom would be a mass market brand, while Virgin would become a premium brand. However, there may be a conflict of interest as Essar already has a partnership with Virgin for opening mobile shops The Mobile Store throughout India. It is doubtable whether Tata would be able to fully leverage on its partner strength, as it has more to do with a brand rather than actual improvement in product offering. Tata also needs to merge all its telecom subsidiaries to derive a proper valuation and then offer a stake to raise funds In the CDMA space, Tata Teleservices is a laggard as compared to Reliance Communications, but given Virgins expertise in CDMA space in USA and South Africa, it will definitely benefit from the JV and expand its Indicom brand. Tata may also have a long term goal plan as given Tatas appetite to go global, these two companies may start their services in other countries too by acquiring stake of new operators or starting their own just as Airtel and Vodafone have done in Ireland. Venture Itch adds that Tatas has a scattered and multiple telecom businesses depriving it of providing a bundled offering. Tatas already have a partnership with UK based Sky Corp for its DTH business and may want to use the media and telecom business in close sync. The article also adds that Tatas, instead of following the trend of outsourcing network services has decided to do the same on its own. STRATEGIC ALLIANCETTSL & FUTURE GROUP: After the successful launch of the T24 GSM mobile service across 16 telecom circles in the country, Tata Teleservices Limited, Indias youngest and fastest-growing pan-India dualtechnology telecom operator, and retail giant Future Group today announced the launch of mobile telephony services on the GSM platform in the Mumbai and Rest of Maharashtra telecom Circles. T24 services are already up and running in Andhra Pradesh, Karnataka, Gujarat, West Bengal, Jharkhand, Chhatisgarh, Orissa, Punjab, Haryana, Rajasthan, Uttar Pradesh, Tamil Nadu, Kerala and Madhya Pradeshand have received heady response.

The Brand T24, a joint venture between Future Group and Tata Teleservices Limited was unveiled after signing a strategic alliance in February 2010 -while the first telecom Circle to go live with the services was Andhra Pradesh, in June 2010. Shopping and talking on our mobile phones are among the two favorite activities for all of us in India. With T24, we have been able to develop a unique customer value proposition that combines these interests of the inspirational Indian. Customers will get shopping benefits for talking and talk-time benefits each time they shop, Mr Kishore Biyani, Group CEO, Future Group, said. We believe that with our partners, Tata Teleservices Limited, we have been able to develop a differentiated offering in the crowded telecom space and also increase the loyalty we enjoy among the millions of customers who patronize our stores. We aim to increase our base to 10 million loyal customers over the next three years, he added.

This is a unique marketing alliance between a retailer and a telecom operator in India and offers us direct access to millions of Future Group customers through its widespread retail presence across India, Mr Deepak Gulati, Executive President, Mobility Business Division, Tata Teleservices Limited, said. Going by the tremendous response that we have received since our first circle launch nine months ago, we have now set ourselves a target of achieving a subscriber base of 10 million happy customers in the next three years. This is a compelling offering from the House of Tatas, in keeping with our stated objective of constantly innovating to redefine the telecom experience in the country, he added.

In addition, customers will be rewarded with free talk-time for every purchase above Rs 350 made at any of the Future Group shopping outlets. For example, a T24 customer buying products worth Rs 3,001 at Pantaloons or Central will stand to gain Rs 150 worth of free talktime. Also, a customer spending Rs 2,001 in Big Bazaar will gain Rs 84 worth of free talk-time for every purchase. Plans will keep evolving to offer ever-more attractive options to the customer. T24 mobile telephony service has been progressively rolled out across the country over the last many months, through Future Groups retail networks in over 76 cities and 65 rural destinations. Customers visiting Future Group retail chains like Big Bazaar, Food Bazaar, Pantaloons, Central, Brand Factory, Home Town, eZone & Aadhar, among others, will be

offered this exclusive mobile connection and tariff plan, wherein they will get free talk-time based on their purchase at these stores. Customers will be provided the facility of recharging their T24 mobile at these stores and also at any Tata DOCOMO retailer. Customers will also be rewarded with special deals and promotions at Future Group retail outlets every time they buy paid recharge. Future Group retail chains attracted over 250 million customer footfalls in 200910. CONCLUSION: As the Tata Group continues to follow the inorganic route to growth, the challenges of integration need to be carefully dealt with. It is necessary for the group to take a look at some of their question marks like Voltas, Tata Teleservices and Tata Communications. Finally, given the brand equity of the Tata name, it is in the interest of newer companies to remain under the Tata Group. In the course of time, the group is expected to make many more acquisitions across the sectors it currently operates in, particularly in South East Asia, Europe and the United States. Given the relatively brighter prospects about the Indian economy compared to other developed economies, the future strategy also calls for a definite focus on the Indian market in sectors like steel, automobiles and infrastructure. The future strategy of the Tata group has been summarized quite elegantly by Ratan Tata in the following statement: We have two guiding arrows. One points overseas, where we want to expand markets for our existing products. The other points right here, to India, where we want to explore the large mass market that is emerging not by following but by breaking new ground in product development and seeing how we can do something that has not been done before.