Mobile Telephone Service – Customer Gap Analysis

General

Indian mobile industry was started almost 10 years before, because of Govt. regulation it couldn’t grow like China. As per current estimation India’s mobile services market is expected to grow at 28.3% CAGR through 2009. But the market is also very much competitive, all the players are keen to increase the market share, so the prices are getting slashed. The current players in the market are –

o Reliance Infocomm

o Bharati Telecom (AirTel)

o BSNL

o Tata Teleservice

o Spice Telecom

o Hutchison / Orange

o BPL Telecom

The industry is moving from the Growth stage to the Shakeout stage, although the market is growing fast, but the Cut-throat Competition is slashing the profit margins, which is very common in Later Growth stage and players those who don’t have strong financial back up are going to be sold to the stronger players. So it’s very clear that players with stronger brand and financial back up will make the future profit.

The bigger players are also operating in other Telecom areas like – Landline, ISP, Broadband, Corporate data & voice services etc, to become one stop solution provider, hence forth increase the market share, this clearly indicates the Sorry situation for the smaller players. Entry barrier for any new player is too strong.

Once the Shakeout period is over in next few years the Mobile Industry in India is likely to enter in matured market.

But there is a other theory too – the economic growth in India, currently the market is growing more on the Network area growth, providers are moving to smaller cities from big cities, demand is generated from ‘B’ class & ‘C’ class cities – middle class population. A major section of middle class population of India in smaller cities couldn’t enjoy the advantages of Telecom service due to the Govt. monopoly, poor capacity, regulations; they are the immediate customers of the Mobile operators. The Landline is no more the preferable choice for the new Telco users; people like to use mobile phones because of its added advantages and easy subscription. Also the middle class size is expected to grow in India in next decades, so the Mobile market in India will be probably in Growth – Shakeout phase for a longer period.

Also the Roadmap, which was thought by the Govt. earlier has become more like a roadblock for the growth, to keep the market competitive they introduced lot regulations and zoning concepts, which have become barrier for market growth and to play at Economies of scale, which are likely to change by the market dynamics and market forces. So the Growth – Shakeout phase is likely to continue for a while. Few years before the number of players were many, as TRAI had stringent laws in number of zone operations by single provider, but these are changing rapidly.

o Service Providers Offerings

India is a vast and complex market. The Indian Department of Telecommunications classifies the country’s telecom markets into “metro” and “A”, “B” and “C” circles or zones, based on how many potential subscribers they have. For example, the C circles refer to rural areas and are the least attractive sectors with very little wealth. The 1999 National Telecom Act defined a phased telecom deregulation with national operator, VSNL, privatized in April 2002.

The cellular market is divided into 4 metro areas, 5 circle A areas, 8 circle B areas and 5 circle C areas. When all the cellular licensees become operational, India will be served by 77 networks. This segmentation of the market and licensees has certainly not helped the growth of the Indian market. These Network is increasing very fast, as companies want to tap the middle class population in smaller cities, and technological development, they are able to increase the Network boundary with lesser investment and also the competition.

Indian mobile operators offerings are segmented in two broad categories – Pre-paid and Post-paid. Although mobile market is growing positively, the Post-paid market is declining and Pre-paid market is increasing by leaps and bounds.

TRAI regulations and Indian consumer behavior are causing for the growth in Pre-paid market. As the revenue in pre-paid offer is increasing in Circle ‘A’ and Circle ‘B’ for Economies at scale, the Pre-paid market share is going to be the more important. When Reliance InfoComm came into the market, they didn’t realize this initially, but very soon they came with Pre-paid offer.

o Brief on Customer Service Gap Model

First analyze the Provider Gap

o Market Information Gap – Not knowing what Customers Expect: The Company’s incomplete or inaccurate knowledge of customers’ service expectations.

Key Factors –

o Inadequate marketing research orientation Markham Managed IT Services

o Lack of upward communication

o Insufficient relationship focus

o Inadequate service recovery

2. Service Standards Gap – Not having right standard and design: The Company’s failure to translate accurately customers’ service expectations into specifications or guidelines for employees.

Key Factors –

o Poor service design

o Absence of customer-defined standards

o Inappropriate physical evidence and Servicescape

3. Service Performance Gap – Delivery lag: Lack of appropriate internal support systems (e.g., recruitment, training, technology, compensation) that enable employees to deliver to service standards.

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