Escolar Documentos
Profissional Documentos
Cultura Documentos
to Sikkim Manipal University, India, is my original work and not submitted for
the award of any other degree, diploma, fellowship, or any other similar title or
prizes.
I am very much grateful to Mr. Umesh Vijay Rai (Product Head), Idea
Cellular Ltd, Mumbai for support for completing this project.
My father Mr Arjun Lal Jaiswal and Mrs Lekha Jaiswal were always
supporting me and encouraging me with their best wishes.
Part I ..................................................................................... 9
AN OVERVIEW ......................................................................... 9
INDIAN TELECOM INDUSTRY ........................................................ 9
Executive summary ....................................................................10
1. Introduction ...................................................................11
1.1. The Indian Telecom Industry ............................................11
1.2. Major Players..................................................................13
1.3. Company Market Shares ..................................................20
1.4. Telecom Policy Environment .............................................22
1.4.1. TRAI ..............................................................................23
1.4.2. Unified Licensing .............................................................28
1.5. Major Market Trends........................................................30
1.6. Important Statistics.........................................................33
1.7. Constraints.....................................................................35
2. Overview of Idea Cellular Ltd ............................................36
2.1. Introduction ...................................................................36
2.2. History of the organization ...............................................42
3. Study of department related for specialization ....................47
Part II ................................................................................... 48
PROJECT OVERVIEW................................................................48
1. Introduction ...................................................................49
2. Aims and objectives.........................................................57
2.1. Problem Statement: Credit Risk and Bad Debt ....................58
3. Methodology ...................................................................63
3.1. Research Methodology: Six sigma DMAIC..........................67
List of Figures
Figure 1 Market share distribution ................................................21
Figure 2 Indian Telecom Statistics ................................................34
Figure 3 Department Drilldown tree ..............................................47
Figure 4 DMAIC Methodology .......................................................68
Figure 5 Drilldown tree................................................................82
Figure 6 SIPOC ..........................................................................83
Figure 7 Current Bad Debts .........................................................84
Figure 8 COCP vs COIP % contribution (Customer) .........................85
Figure 9 COCP vs COIP % contribution (Amount) ...........................86
Figure 10 EBU Bad Debts Percentage ............................................87
Figure 11 Boxplot of EBU.............................................................88
Figure 12 Pareto Chart hub (Population)........................................89
Figure 13 Pareto Chart hub (Revenue) ..........................................90
BSNL
On October 1, 2000 the Department of Telecom Operations,
Government of India became a corporation and was renamed
Bharat Sanchar Nigam Limited (BSNL).
BSNL is now Indias leading Telecommunications Company and the
largest public sector undertaking. It has a network of over 45
million lines covering 5000 towns with over 35 million telephone
connections.
BHARTI
Established in 1985, Bharti has been a pioneering force in the
telecom sector with many firsts and innovations to its credit,
ranging from being the first mobile service in Delhi, first private
basic telephone service provider in the country, first Indian
company to provide comprehensive telecom services outside India
in Seychelles and first private sector service provider to launch
National Long Distance Services in India. Bharti Tele-Ventures
Limited was incorporated on July 7, 1995 for promoting
investments in telecommunications services. Its subsidiaries
operate telecom services across India. Bhartis operations are
broadly handled by two companies: the Mobility group, which
handles the mobile services in 16 circles out of a total 23 circles
across the country; and the Infotel group, which handles the NLD,
ILD, fixed line, broadband, data, and satellite-based services.
Together they have so far deployed around 23,000 km of optical
fiber cables across the country, coupled with approximately 1,500
nodes, and presence in around 200 locations. The group has a total
customer base of 6.45 million, of which 5.86 million are mobile and
588,000 fixed line customers, as of January 31, 2004. In mobile,
Bhartis footprint extends across 15 circles.
MTNL
MTNL was set up on 1st April 1986 by the Government of India to
upgrade the quality of telecom services, expand the telecom
network, introduce new services and to raise revenue for telecom
development needs of Indias key metros Delhi, the political
capital, and Mumbai, the business capital. In the past 17 years, the
company has taken rapid strides to emerge as Indias leading and
one of Asias largest telecom operating companies. The company
has also been in the forefront of technology induction by converting
100% of its telephone exchange network into the state-of-the-art
digital mode. The Govt. of India currently holds 56.25% stake in
the company. In the year 2003-04, the company's focus would be
not only consolidating the gains but also to focus on new areas of
enterprise such as joint ventures for projects outside India, entering
into national long distance operation, widening the cellular and
CDMA-based WLL customer base, setting up internet and allied
services on an all India basis.
The company is also expanding its footprint, and has paid Rs. 4.17
billion ($90 million) to DoT for 11 new licenses under the IUC
(interconnect usage charges) regime. The new licenses, coupled
with the six circles in which it already operates, virtually gives the
CDMA mobile operator a national footprint that is almost on par
with BSNL and Reliance Infocomm. The company hopes to start off
services in these 11 new circles by August 2004. These circles
include Bihar, Haryana, Himachal Pradesh, Kerala, Kolkata, Orissa,
Punjab, Rajasthan, Uttar Pradesh (East) & West and West Bengal.
The company's ADRs are listed on the New York Stock Exchange
and its shares are listed on major Stock Exchanges in India. The
Indian Government owns approximately 26 per cent equity, M/s
Panatone Finvest Limited as investing vehicle of Tata Group owns
45 per cent equity and the overseas holding (inclusive of FIIs,
ADRs, Foreign Banks) is approximately 13 per cent and the rest is
owned by Indian institutions and the public. The company provides
international and Internet services as well as a host of value-added
services. Its revenues have declined from Rs. 70.89 billion ($1.62
billion) in 2001-02 to Rs. 48.12 billion ($1.1 billion) in 2002-03,
with voice revenues being the mainstay. To reverse the falling
revenue trend, VSNL has also started offering domestic long
distance services and is launching broadband services. For this, the
company is investing in Tata Telservices and is likely to acquire
Tata Broadband.
Tata
Teleservices
11%
Reliance Com
+ RTL
17%
BSNL
12%
Vodafone
Essar
17%
Figure 1 Market share distribution
It was not until late 2003 that the issue was finally resolved, under
considerable government pressure, when cellular operators agreed
to withdraw their many cases against the fixed-line operators. Fixed
operators would in effect be allowed to enter the mobile business;
in return, the government granted cellular players several
concessions, including lower revenue-share arrangements
estimated to total over $210 million. Perhaps most notably, the
government announced its intention to adopt a unified access
licensing regime, which would in the future provide a single,
technology-neutral license for fixed and cellular operators. The hope
is that this new license category will prevent a repeat of the recent
controversy, and allow new technologies to enter the Indian market
without requiring a wholesale rewrite of licensing laws.
MERGERS
Demand for new spectrum as the industry grows and the fact the
spectrum allocation in done on the basis of number of subscribers
will force companies to merge so as to claim large number of
subscribers to gain more spectrum as a precursor to the launch of
larger and expanded services. However it must also be noted that
this may very well never happen on account of low telecom
penetration.
-100
100
200
300
400
500
600
Total telephone
subscriber base
GSM Subscribers
CDMA Subscribers
(Wireline + Wireless)
Aug-08
Monthly additions
(Wireless)
Broadband subscribers
34
1.7. Constraints
Slow pace of the reform process.
The sector requires players with huge financial resources due to the
above mentioned constraint. Upfront entry fees and bank
guarantees represent a sizeable share of initial investments. While
the criteria are important, it tends to support the existing big and
older players. Financing these requirements require a little more
liberal approach from the policy side.
2.1. Introduction
The company has its retail outlets under the "Idea n' U" banner.
The company has also been the first to offer flexible tariff plans for
prepaid customers. It also offers GPRS services in urban areas.
New Service Areas The New Service Areas are Uttar Pradesh
(East), Rajasthan, Himachal Pradesh, Bihar, Mumbai, Karnataka,
Punjab, Orissa, Chennai & Tamil Nadu, Jammu & Kashmir, Kolkata
& West Bengal, and Assam & North East.
2009
2008
2007
2006
Restructuring of debt
Received Letter of Intent from the DoT for a new UAS License
for the Mumbai Circle.
Received Letter of Intent from the DoT for a new UAS License
for the Bihar Circle through Aditya Birla Telecom Limited.
ABNL, the parent of Aditya Birla Telecom Limited, pursuant to
a letter dated November 22, 2006, agreed to transfer its
entire shareholding in Aditya Birla Telecom Limited to the
Company for the consideration of Rs. 100 million.
2005
2004
2003
2002
2001
2000
1999
1997
1996
1995
Drilldown Tree
Business
Profitability
Retails EBU
Customers Bad Customers Bad
Debts Debts
Not surprisingly, the telecom provider found the calls were resulting
in an unusually bad debt rate.
The Answer
A need of customer debt management solution specifically designed
for telecommunications providers.
After assessing the companys data and system, the Idea Cellular
team uncovered several challenges:
Based on the data that was available, the Idea Cellular team
found that, not surprisingly, one of the most powerful indicators
of future payment was previous call and payment behavior.
Once the credit models were complete, the Idea Cellular team
have developed a historical sample of customers, scored their
payment performance, and used that data to help establish the
proper credit limits to optimize revenue.
Added to that the growth in third party content and the losses
from bearing those costs, and it is clear that debt management
is becoming a key driver for telecommunications operators.
Out of Scope
Business Case
Measurement Matrix:
3. Methodology
Research methodology is one without which it is almost impossible
to reach at any tangible decision. Although various methods are
adopted to undertake this activity but the goal is almost same i.e.
to reach on a final decision or solution of the problem.
Solution of the problem comes when we have a proper framework
for the particular job. Hence to carry out any work of necessary to
chalk out a framework.
Organizational Support
and Milestones
Process Map
Metrics Plan/Example
Begin Developing
Y=f(x) Relationship
Determine Process
Baseline
Variation Diagram
Hypothesis Testing
of Potential Solutions
Validate Potential
Improvement by Pilot
Studies
Correct/Re-Evaluate
Potential Solution
Implement Statistical
Determine Process
Capability
Develop Transfer
Owner
Savings/Avoidance, Profit
Growth
Documentation
Communicate to
Business, Celebrate
For example:
Box Plot
Box Plot is an efficient method for displaying a five-number data
summary. The graph is called a boxplot and summarizes the
following statistical measures:
Median
Upper and lower quartiles
Minimum and maximum data values
Boxplots advantages
Graphically display a variable's location and spread at a
glance.
Provide some indication of the data's symmetry and
skewness.
SIPOC
SIPOC is a data collection form that assists in gathering
information about suppliers, inputs, processes, outputs, and
customers of a process.
It is used before constructing a flowchart since it helps gather
relevant information about the process.
Business
Profitability
Retails EBU
Customers Bad Customers Bad
Debts Debts
Suppliers
Management Process
Team Output
Input
Due Amount
Collections Reduction of Collected
Collection
data
Team Bad Debts
Customer Customer
Information
Billing Done
CRM & Circle
Reports
Payment
Retention Management
Collected Team
Sales team
IT Process
Boundary
Figure 6 SIPOC
3.2.2. Measure
This step involves developing a data collection plan for the
process and collecting data from many sources to determine
types of defects and metrics.
EBU Bad
Debts
EBU Bad Debts (Rs)
3%
1
2
Total
Revenue(Rs),
97%
COIP
Contribution
92%
COIP
Contribution
92%
EBU Total
Revenue(R
s), 97%
Retail Bad
Debts (Rs) ,
2%
Total
Revenue
(Rs) , 98%
Description
The fishbone diagram identifies many possible causes for an
effect or problem. It can be used to structure a brainstorming
session. It immediately sorts ideas into useful categories.
Sales Customer
Bad Debts
Poor /lower than expected Service
Better Service
Network issues Unwanted VAS Enrollment
Better Network
Conservative credit limit Customers voice remains unheard
Better Tariffs
approach System /Process Failure
On-boarding process Other advantages (premium nos,
Educating customer on payment modes entry cost, higher influence)
Service Competition
Profile mismatch
Procedural Gaps
LPC was a part of Bad Debts for Permanent disconnect (PD)
accounts as per Corporate SOP
Ageing correction.
3000000
2500000
Bad Debts (Rs)
2000000
1500000
1000000
500000
0
1st 2nd 3rd 4th
No of Contract
Bills not received (BNR) & After Sales Service are the two
critical factors.
> 24 months
6%
13-24
months
20%
0-6 months
54%
7-12 months
20%
3.3. Recommendations.
Service camps and mailers to educate and promote ECS.