Bangalore

A study on customer satisfaction and loyalty towards Airtel prepaid service provider in Gurgaon

In partial fulfillment of the Course: Dissertation In Term VIII of the Post Graduate Program in Management (Batch: Aug. 2009 2011)

Prepared by: Garima Singh Registration No: 09PG200 Under the Guidance of Prof. Jacob Alexander

Bangalore Post Graduate Program in Management Aug. 2009 2011 (Term VIII) Declaration This is to declare that the report entitled A study on customer satisfaction and loyalty towards Airtel prepaid service provider in Gurgaon is prepared for the partial fulfillment of the course: Dissertation in Term VIII (Batch: Aug 20092011) of the Post Graduate Program in Management by me under the guidance of Prof Jacob Alexander. I confirm that this dissertation truly represents my work. This work is not a replication of work done previously by any other person. I also confirm that the contents of the report and the views contained therein have been discussed and deliberated with the Faculty Guide. Signature of the Student :

Name of the Student (in Capital Letters)

: GARIMA SINGH

Registration No

: 09PG200

Post Graduate Program in Management

Certificate

This is to certify that Ms. Garima Singh, Regn. No. 09PG200 has completed the dissertation entitled A study on customer satisfaction and loyalty towards Airtel prepaid service provider in Gurgaon under my guidance for the partial fulfillment of the Course: Dissertation in Term VIII of the Post Graduate Program in Management (Batch: Aug. 2009 2011).

Signature of Faculty Guide:

Name of the Faculty Guide: Prof. Jacob Alexander

EXECUTIVE SUMMARY

The Indian Mobile telecommunications service sector, in spite of providing high service quality and striving for Customer satisfaction, is characterized by dynamic Customer activities and provider switching. By 2012, the prepaid subscriber base will cross 683 million and post-paid subscriber base will exceed 53 million subscribers. The mobile phones are progressively becoming cheaper and affordable for people in the country with the increase in disposable income that improves the quality of life in India. People are showing interest in new technologies like the option to access internet using a mobile phone. Besides, mobile service providers are also adding new schemes, offers and technology advancement in their services. This has resulted in more and more consumers are buying mobile phones and switching between different service providers. By using the consumption system perspective on mobile services and mobile phone, I have provided the explanation on the factors of Customer switching. The project aims at understanding the Marketing strategies at Airtel and its impact on the perception of Airtel Cellular Services. It has been seen that it is far more costly to win a new customer than it is to maintain an existing one. And there is no better way to retain a customer than to exceed his expectations. For this purpose it is essential to know the level of customer satisfaction. So this study is a one of a kind study where an attempt has been made to know the consumer preferences and behavior they show towards a particular operators product and services and their level of satisfaction while dealing with those. The focus of my research was the measurement of

customer satisfaction level for the services provided by Bharti Airtel. The research was done for the customers of Bharti Airtel. There can be no better opportunity to interact with the customers of an organization. Finally the results of the research verify the fact that keeping the customer satisfied is the best strategy not only to retain the existing customers but also to expand the business to new horizons.

TABLE OF CONTENTS

S.NO
1. 2 3. 4 5. 6. 7. 8. 9. 10. 11.

CHAPTER NAME
INTRODUCTION INDUSTRY PROFILE COMPANY PROFILE LITERATURE REVIEW RESEARCH ANALYSIS DATA ANALYSIS FINDINGS AND DICUSSIONS RECOMMENDATIONS CONCLUSION REFERENCES ANNEXURE

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6 14 29 38 41 45 58 61 63 65 67

1. INTRODUCTION

Customer satisfaction, a term frequently used in marketing, is a measure of how products and services supplied by a company meet or surpass customer expectation. Customer satisfaction is defined as "the number of customers, or percentage of total customers, whose reported experience with a firm, its products, or its services (ratings) exceeds specified satisfaction goals." It is seen as a key performance indicator within business and is often part of a Balanced Scorecard. In a competitive marketplace where businesses compete for customers, customer satisfaction is seen as a key differentiator and increasingly has become a key element of business strategy. Within organizations, customer satisfaction ratings can have powerful effects. They focus employees on the importance of fulfilling customers expectations. Furthermore, when these ratings dip, they warn of problems that can affect sales and profitability. These metrics quantify an important dynamic. When a brand has loyal customers, it gains positive word-of-mouth marketing, which is both free and highly effective. Therefore, it is essential for businesses to effectively manage customer satisfaction. To be able do this, firms need reliable and representative measures of satisfaction. In researching satisfaction, firms generally ask customers whether their product or service has met or exceeded expectations. Thus, expectations are a key factor behind satisfaction. When customers have high expectations and the reality falls short, they will be disappointed and will likely rate their experience as less than satisfying. For this reason, a luxury resort, for example, might receive a lower satisfaction rating than a budget moteleven though its facilities and service would be deemed superior in absolute terms.

Purpose:

Customer satisfaction provides a leading indicator of consumer purchase intentions and loyalty. Customer satisfaction data are among the most frequently collected indicators of market perceptions. Their principal use is twofold: 1. Within organizations, the collection, analysis and dissemination of these data send a message about the importance of tending to customers and ensuring that they have a positive experience with the companys goods and service. 2. Although sales or market share can indicate how well a firm is performing currently, satisfaction is an indicator of how likely it is that the firms customers will make further purchases in the future. Much research has focused on the relationship between customer satisfaction and retention. Studies indicate that the ramifications of satisfaction are most strongly realized at the extremes. On a five-point scale, individuals who rate their satisfaction level as 5 are likely to become return customers and might even evangelize for the firm. (A second important metric related to satisfaction is willingness to recommend. This metric is defined as "The percentage of surveyed customers who indicate that they would recommend a brand to friends." When a customer is satisfied with a product, he or she might recommend it to friends, relatives and colleagues. This can be a powerful marketing advantage.) Individuals who rate their satisfaction level as 1, by contrast, are unlikely to return. Further, they can hurt the firm by making negative comments about it to prospective customers. Willingness to recommend is a key metric relating to customer satisfaction.

Measuring Customer Satisfaction:

Organizations need to retain existing customers while targeting non-customers. Measuring customer satisfaction provides an indication of how successful the organization is at providing products and/or services to the marketplace. Customer satisfaction is measured at the individual level, but it is almost always reported at an aggregate level. It can be, and often is, measured along various dimensions. A hotel, for example, might ask customers to rate their experience with its front desk and check-in service, with the room, with the amenities in the room, with the restaurants, and so on. Additionally, in a holistic sense, the hotel might ask about overall satisfaction with your stay. As research on consumption experiences grows, evidence suggests that consumers purchase goods and services for a combination of two types of benefits: hedonic and utilitarian. Hedonic benefits are associated with the sensory and experiential attributes of the product. Utilitarian benefits of a product are associated with the more instrumental and functional attributes of the product (Batra and Athola 1990). Customer satisfaction is an ambiguous and abstract concept and the actual manifestation of the state of satisfaction will vary from person to person and product/service to product/service. The state of satisfaction depends on a number of both psychological and physical variables which correlate with satisfaction behaviors such as return and recommend rate. The level of satisfaction can also vary depending on other options the customer may have and other products against which the customer can compare the organization's products. Work done by Parasuraman, Zeithaml and Berry (Leonard L) between 1985 and 1988 provides the basis for the measurement of customer satisfaction with a service by using the gap between the customer's expectation of performance and their perceived experience of performance. This provides the measurer with a satisfaction "gap" which is objective and quantitative in nature. Work done by Cronin and Taylor propose the "confirmation/disconfirmation" theory of combining the "gap" described by Parasuraman, Zeithaml and Berry as two different measures (perception and expectation of performance) into a single measurement of performance according to expectation.

The usual measures of customer satisfaction involve a survey with a set of statements using a Likert Technique or scale. The customer is asked to evaluate each statement and in term of their perception and expectation of performance of the organization being measured. Their satisfaction is generally measured on a five-point scale.

Customer satisfaction data can also be collected on a 10-point scale. Regardless of the scale used, the objective is to measure customers perceived satisfaction with their experience of a firms offerings. It is essential for firms to effectively manage customer satisfaction. To be able do this, we need accurate measurement of satisfaction. Good quality measures need to have high satisfaction loadings, good reliability, and low error variances. In an empirical study comparing commonly used satisfaction measures it was found that two multi-item semantic differential scales performed best across both hedonic and utilitarian service consumption contexts. According to studies by Wirtz & Lee (2003), they identified a six-item 7-point semantic differential scale (e.g., Oliver and Swan 1983), which is a six-item 7-point bipolar scale, that consistently performed best across both hedonic and utilitarian services. It loaded most highly on satisfaction, had the highest item reliability, and had by far the lowest error variance across both studies. In the study, the six items asked respondents evaluation of their most recent experience with ATM services and ice cream restaurant, along seven points within these six items: please me to displeased me, contented with to disgusted with, very satisfied with to very dissatisfied with, did a good job for me to did a poor job for me, wise choice to poor choice and happy with to unhappy with. A semantic differential (4 items) scale (e.g., Eroglu and Machleit 1990), which is a four-item 7point bipolar scale, was the second best performing measure, which was again consistent across both contexts. In the study, respondents were asked to evaluate their experience with both products, along seven points within these four items: satisfied to dissatisfied,

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favorable to unfavorable, pleasant to unpleasant and I like it very much to I didnt like it at all. The third best scale was single-item percentage measure, a one-item 7-point bipolar scale (e.g., Westbrook 1980). Again, the respondents were asked to evaluate their experience on both ATM services and ice cream restaurants, along seven points within delighted to terrible. It seems that dependent on a trade-off between length of the questionnaire and quality of satisfaction measure, these scales seem to be good options for measuring customer satisfaction in academic and applied studies research alike. All other measures tested consistently performed worse than the top three measures, and/or their performance varied significantly across the two service contexts in their study. These results suggest that more careful pretesting would be prudent should these measures be used. Finally, all measures captured both affective and cognitive aspects of satisfaction, independent of their scale anchors. Affective measures capture a consumers attitude (liking/disliking) towards a product, which can result from any product information or experience. On the other hand, cognitive element is defined as an appraisal or conclusion on how the products performance compared against expectations (or exceeded or fell short of expectations), was useful (or not useful), fit the situation (or did not fit), exceeded the requirements of the situation (or did not exceed).

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Customer Loyalty:
Customer loyalty can be defined as the totality of feelings or attitudes that would incline a customer to consider the re-purchase of a particular product, service or brand or re-visit a particular company, shop or website. Customer loyalty has always been critical to business success and profitability. Customer loyalty is determined by three factors: relationship strength, perceived alternatives and critical episodes. Major factors that negatively affect customer loyalty: the customer moves out of the service area the customer no longer has a need for the products or service more suitable alternative providers become available poor handling of a critical episode Engendering and enhancing customer loyalty is a core objective of loyalty marketing a strategy employed by businesses in order to increase the loyalty of customers and other stakeholders in the drive to meet and exceed commercial objectives. The fundamental assumption in loyalty marketing is that keeping existing customers is considerably less expensive than acquiring new ones. Reichheld and Sasser claimed that only a 5% improvement in customer retention can lead to an increase in profitability between 25% and 85%, depending upon industry sector. Therefore increased customer loyalty has a direct relationship with increased profitability. The increased profitability associated with customer loyalty occurs because: acquisition costs only occur at the beginning of a relationship, so the longer the relationship, the lower the amortized cost account maintenance costs decline as a percentage of total costs (or as a percentage of revenue)
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long-term customers tend to be less inclined to switch, and also tend to be less price sensitive long-term customers may introduce new customers via word of mouth long-term customers are more likely to purchase add-ons satisfaction breeds habit, meaning that long-term customers are less likely to switch to competitors, making it less likely for competitors to enter the market or gain market share long-term customers are less expensive to service because they are familiar with the process and require less active familiarization loyal customers are more consistent in their buying behavior high levels of repeat customers makes employees jobs easier, which feeds back into improved customer service It is also important that marketing departments assess as best they can the profitability of each customer or business segment, whether in a business-to-consumer (B2C) or business-to-business (B2B) context. Not all customers are profitable and striving to maintain the loyalty of unprofitable customers or partners is not always commercially viable. Analyzing customers relationship costs with revenue can demonstrate this and it is best business practice to terminate those relationships, which are found not to be profitable.

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2. INDUSTRY PROFILE

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INTRODUCTION
The Indian telecommunications industry is one of the fastest growing in the world. The industry has witnessed consistent growth during the last year on the back of rollout of newer circles by operators, successful auction of third-generation (3G) and broadband wireless access (BWA) spectrum, network rollout in semi-rural areas and increased focus on the value added services (VAS) market. According to the Telecom Regulatory Authority of India (TRAI), the number of telephone subscriber base in the country reached 742.12 million as on October 31, 2010, an increase of 2.61 per cent from 723.28 million in September 2010. With this the overall tele-density (telephones per 100 people) has touched 62.51. The wireless subscriber base has increased to 706.69 million at the end of October 2010 from 687.71 million in September 2010, registering a growth of 2.76 per cent. Meanwhile, Indian Global System of Mobile Communication (GSM) telecom operators added 17.45 million new subscribers in November 2010, taking the all-India GSM cellular subscriber base to 526.18 million, according to the Cellular Operators Association of India (COAI). The GSM subscriber base stood at 508.72 million at the end of October 2010.

HISTORY
History of Indian Telecommunications started in 1851 when the first operational land lines were laid by the government near Calcutta (seat of British power). Telephone services were introduced in India in 1881. In 1883 telephone services were merged with the postal system. Indian Radio Telegraph Company (IRT) was formed in 1923. After independence in 1947, all the foreign telecommunication companies were nationalized to form the Posts, Telephone and Telegraph (PTT), a monopoly run by the government's Ministry of Communications. Telecom sector was considered as a strategic service and the government considered it best to bring under state's control.

The first wind of reforms in telecommunications sector began to flow in 1980s when the private sector was allowed in telecommunications equipment manufacturing. In 1985, Department of
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Telecommunications (DOT) was established. It was an exclusive provider of domestic and longdistance service that would be its own regulator (separate from the postal system). In 1986, two wholly government-owned companies were created: the Videsh Sanchar Nigam Limited (VSNL) for international telecommunications and Mahanagar Telephone Nigam Limited (MTNL) for service in metropolitan areas. In 1990s, telecommunications sector benefited from the general opening up of the economy. Also, examples of telecom revolution in many other countries, which resulted in better quality of service and lower tariffs, led Indian policy makers to initiate a change process finally resulting in opening up of telecom services sector for the private sector. National Telecom Policy (NTP) 1994 was the first attempt to give a comprehensive roadmap for the Indian telecommunications sector. In 1997, Telecom Regulatory Authority of India (TRAI) was created. TRAI was formed to act as a regulator to facilitate the growth of the telecom sector. New National Telecom Policy was adopted in 1999 and cellular services were also launched in the same year. Telecommunication sector in India can be divided into two segments: Fixed Service Provider (FSPs), and Cellular Services. Fixed line services consist of basic services, national or domestic long distance and international long distance services.

The state operators (BSNL and MTNL), account for almost 90 per cent of revenues from basic services. Private sector services are presently available in selective urban areas, and collectively account for less than 5 per cent of subscriptions. However, private services focus on the business/corporate sector, and offer reliable, high- end services, such as leased lines, ISDN, closed user group and videoconferencing. Major services and market potentiality of Telecom industry in India Telecommunication sector in India is primarily subdivided into two segments, which are Fixed Service Provider (FSPs) and Cellular Services. Telecom industry in India constitutes some essential telecom services like telephone, radio, television and Internet. Telecom industry in India is specifically emphasizing on latest technologies like GSM ( Global System for Mobile Communications), CDMA(Code Division Multiple Access), PMRTS(Public Mobile Radio

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Trunking Services), Fixed Line and WLL(Wireless Local Loop ). India has a prospering market specifically in GSM mobile service and the number of subscribers is growing very fast.

Cellular services can be further divided into two categories: Global System for Mobile Communications (GSM) and Code Division Multiple Access (CDMA). The GSM sector is dominated by Airtel, Vodafone-Hutch, and Idea Cellular, while the CDMA sector is dominated by Reliance and Tata Indicom. Opening up of international and domestic long distance telephony services are the major growth drivers for cellular industry. Cellular operators get substantial revenue from these services, and compensate them for reduction in tariffs on airtime, which along with rental was the main source of revenue. The reduction in tariffs for airtime, national long distance, international long distance, and handset prices has driven demand. Customer Centricity Telecommunications companies recognize that becoming customer centric is the key to their long term competitive advantage, as many players offer similar features. Customer centricity depends on having a single view of the customer data that gives clear insight into the customer behavior, purchasing patterns, and segmentation. Telecom organizations need access to data that is accurate, reusable, and productive, so that they can create a holistic, real-time view of their customers. Opportunities With the arrival of 3G, various operators in India are particular about providing faster and more robust Internet, better access of data services including e-commerce, social networking, audiovideo conferencing, and many other broadband applications with very high speed. The deployment of 3G services is also likely to help the emergence of new VAS. The demand for value added services is likely to surge given that 'Gen Y' are more inclined to use the smartphones and adopt the VAS services. Moreover, with the implementation of mobile number portability, the service providers need to focus more on developing VAS as a service differentiator to retain their existing customers besides attracting the new ones.

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Convergence, Consolidation, and Competition Today, numerous industry challenges are forcing telecom companies to streamline operations and increase competitive agility. These challenges include:

Convergence of Services: Telecom companies are bundling broadband, voice, wireless, video and other emerging technologies together, as well as a variety of value added content, in an effort to remain competitive, offer seamless services and attract more customers.

Industry Consolidation: Ongoing mergers and acquisitions have resulted in duplicate systems and applications across the organization, which have made it difficult to integrate data, realize cost benefits and capitalize on new revenue opportunities.

Increased Competition and Diminishing Revenue Streams: With new players entering the market, telecommunications companies are competing strongly and selling products and services beyond their core offerings and at much cheaper prices. This is resulting in less revenue from traditional sources, more pressure on profit margins, and an urgency to find new revenue streams by investing in new technologies such as VoIP or fixed/mobile convergence.

To combat these challenges and improve operational efficiency, telecom organizations are investing in new IT applications that support product and service bundles, enhancing or replacing their existing operational support systems (OSS) and business support systems (BSS), consolidating redundant systems, implementing automated service provisioning and customer self service, etc.

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Value-Added Services (VAS) Market Mobile value added services (VAS) include text or SMS, menu-based services, downloading of music or ring tones, mobile TV, videos and sophisticated m-commerce applications. As per a report, India Telecom 2010 released by KPMG in December 2010, currently, the VAS market is worth US$ 2.45 billion-US$ 2.67 billion, which is around 10 per cent of the total revenue of the wireless industry. The share of VAS in wireless revenue is likely to increase to 12-13 per cent by 2011, on the back of increased operator focus on VAS due to continuous fall in voice tariffs, increasing penetration of feature rich handsets, availability of vernacular content and increased user adoption of VAS applications.

Major Investments The booming domestic telecom market has been attracting huge amounts of investment which is likely to accelerate with the entry of new players and launch of new services. According to the Department of Industrial Policy and Promotion (DIPP), the telecommunications sector which includes radio paging, mobile services and basic telephone services attracted foreign direct investment (FDI) worth US$ 1,062 million during April-October 2010-11. The cumulative flow of FDI in the sector during April 2000 and October 2010 is US$ 9,993 million. As per an industry report the telecom industry witnessed merger and acquisition (M&A) deals worth US$ 16.60 billion during April-December 2010, which represented 28.26 per cent of the total valuation of the deals across all the sectors during the period analysed. There were 10 inbound, outbound and domestic M&A deals in the telecom sector during the first nine months of the current fiscal. The biggest M&A deal in the sector was made by telecommunications service provider Bharti Airtel through the acquisition of Zains African mobile services operations in 15 countries. The deal involved a transaction of US$ 10.7 billion. In another deal, Bharti Airtel acquired 100 per cent stake of Telecom Seychelles Ltd for US$ 62 million. Other major M&A deals included the acquisition of 95 per cent stake in Infotel Broadband for US$ 1,032.26 million by Reliance Industries and 26 per cent stake of US-based mobile chipmaker Qualcomms Indian arm for US$ 57.72 million by Indias Tulip Telecom and Global
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Holding. Further, India-based GTL Infrastructure Ltd has bought 17,500 telecom towers of Aircel Ltd. for US$ 1,702.95 million. Going Global In March 2010, Bharti Airtel bought the African operations of Kuwait-based Zain Telecom for US$ 10.7 billion, driving the Indian player into the league of top ten telecom players globally. The Reserve Bank of India (RBI) has liberalized the investment norms for Indian telecom companies by allowing them to invest in international submarine cable consortia through the automatic route. In April 2010, RBI issued a notification stating As a measure of further liberalization, it has now been decided to allow Indian companies to participate in a consortium with other international operators to construct and maintain submarine cable systems on co-ownership basis under the automatic route. The notification further added, Accordingly, banks may allow remittances by Indian companies for overseas direct investment. Tele-medicine With increase in cell phone users to around 700 million and introduction of 3G services soon in the country, remote treatment and diagnosis of patients through mobile phones would become a reality in the near future. In fact, a few telecom operators and value-added service developers are planning to use mobile phones for diagnostic and treatment support, remote disease monitoring, health awareness and communication. The Gujarat health department plans to connect all villages through its telemedicine network. The state government has so far expanded the reach of telemedicine services from 53 villages in 2008 to 453, and hopes to cross 500 villages soon. Jay Narayan Vyas, state health minister, said First thing we plan to do is to start the 104 service over the phone. People can call up and talk to paramedics in call centers who can suggest the primary action to be taken in case of any health emergency. Also, they would be able to suggest generic and over the counter drugs. 3G Services The Department of Telecom has taken the pioneering decision of launching of 3G services by BSNL and MTNL and initiation of process for auction of spectrum for 3G services to private
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operators. Allocation of spectrum for 3G and BWA services was done through a controlled simultaneous, ascending e-auction process. All the 71 blocks that were put up for auction across the 22 service areas in the country were sold, leaving no unsold lots. Auction for 3G spectrum ended on May 19, 2010 after 183 rounds of intense bidding over a span of 34 days. The Government is expected to morph revenue worth US$ 14.6 billion. All the available slots across 22 circles have been sold to seven different operators. A pan-India bid for third generation spectrum stood at US$ 3.6 billion. The Anil Ambaniled Reliance Communication bagged the highest number of 13 circles at a cost of US$ 1.9 billion, followed by Bharti Airtel in 12, Idea in 11 and Vodafone and the Tatas in nine circles each, according to the Department of Telecommunications. MTNL and BSNL will have to pay US$ 1.42 billion and US$ 2.2 billion respectively. 3G spectra have already been allotted to successful bidders for commercial use on September 1, 2010 as per the timelines indicated in the Notice Inviting Application (NIA) and in the Letter of Intent issued after the bid amounts were deposited. The 3G spectrum has been allotted to AirTel, Aircel, Vodafone, S Tel, Reliance, Idea Cellular and Tata Cellular Services who won the bids through the electronic auction spread over a period of 34 days in respect of 3G and 16 days in respect of BWA. The BWA spectra have also been assigned to the successful bidders which are Aircel, Augere, Tikona, Qualcomm, Infotel and Bharti. 3G & BWA spectrum would enable users to have value added services like video streaming, mobile internet access, higher & faster data downloads. Manufacturing The Indian telecom industry manufactures a vast range of telecom equipment using state-of-theart technology. As per a press release by the Ministry of Communications & Information Technology, the production of telecom equipments in value terms is expected to increase from US$ 10.87 billion during 2008-09 to US$ 11.87 billion in 2010-2011. Favourable factors such as policy moves taken by the Government, incentives offered, large talent pool in R&D and low labour cost can
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provide an impetus to the industry. Exports increased from US$ 89.24 million in 2002-03 to US$ 3 billion in 2009-10 accounting for 26 per cent of the total equipment produced in the country and it is expected to increase to US$ 3.33 billion in 2010-11. Meanwhile, telecom regulator TRAI has released a consultation paper on Encouraging Telecom Equipment Manufacturing in India seeking views of stakeholders for promoting research and development (R&D) and manufacturing of telecom equipment in the country. The consultation paper issued on December 28, 2010 aims at discussing, debating and finalizing measures for promotion of R&D and creation of intellectual property as well as manufacture of telecom equipment and electronic components in India. Further, the Indian mobile handsets market continued to grow in the third quarter 2010 as well to record a quarter-on-quarter growth of 3.6 per cent to touch 40.08 million units in the quarter, according to market intelligence firm IDCs India Quarterly Mobile Handsets Tracker. The year 2010 is expected to end with total mobile handset sales of 155.9 million units. The study further showed that the Finnish handset maker Nokia had the largest share of 31.5 per cent in terms of units shipped during the third quarter of 2010. Nokia was followed by the Chinese brand GFive in terms of unit shipments market share and Korean handset manufacturer Samsung occupied the third slot. According to a report by technology researcher Gartner Inc, India ranks fourth in manufacturing telecom equipment in the Asia-Pacific (Apac) region. The country has a 5.7 per cent share of the regions total telecom equipment production revenue of US$ 180 billion in 2009. We expect India to move up to the third spot (after China and South Korea) with a share of 8.5 per cent of the total (estimated) Apac telecom equipment production revenue of US$ 277 billion by 2014, Gartner said. The firm estimates Indias telecom equipment production revenue to grow at a CAGR of 17.1 per cent to reach US$ 22.6 billion in fiscal 2014. India will be the fastest growing telecom equipment production market in the Apac region over the next five years, it predicts. Rural Telephony

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The rural Telephone connections have gone up from 3.6 million in 1999 to 12.3 million in March 2004 and further to 200.77 million in March 2010. Their share in the total telephones has constantly increased from around 14 per cent in 2005 to 32.75 per cent at the end of October 2010. The rural subscribers have grown to 243.04 million at the end of October 2010. The wireless connections have contributed substantially to total rural telephone connections; it stands at 233.95 million in October 2010. During 2010-11, the growth rate of rural telephones was 21.05 per cent as against 18.69 per cent of urban telephones. The private sector has contributed to the growth of rural telephones as it provided about 84.27 per cent of rural telephones during October 2010. The government plans to connect all revenue villages in India either through landline, mobile or WLL by February 2011. We have already connected about 96 per cent of the revenue villages. The remaining 25,000 villages will have connectivity by February 2011, stated Mr Sachin Pilot, Minister of State for Communications and IT. Further, the Government, under Bharat Nirman II Programme, has envisaged providing broadband coverage to all 250,000 Gram Panchayats by 2012. Policy Initiatives The government plans to formulate a comprehensive National Telecom Policy 2011 including the recognition of Telecom as infrastructure and as an essential service, encouraging Green Telecom, steps to accelerate migration from IPv4 to IPv6 at the earliest, release of IPv6 standards by Telecom Engineering Centre for implementation in the country, etc., as per a press release by the Ministry of Communications & Information Technology. Further, the government plans to take concrete steps towards finalization of National Broadband Plan including strategy for implementation and initiation of steps for roll out of optical fiber. The government has taken many proactive initiatives to facilitate the rapid growth of the Indian telecom industry.

In the area of telecom equipment manufacturing and provision of IT-enabled services, 100 per cent FDI is permitted
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No cap on the number of access providers in any service area. In 2008, 122 new Unified Access Service (UAS) licenses were granted to 17 companies in 22 services areas of the country

Revised subscriber based criteria for allocation of Global System of Mobile Communication (GSM) and Code Division Multiple Access (CDMA) spectra were issued in January 2008

To provide infrastructure support for mobile services a scheme has been launched to provide support for setting up and managing 7,436 infrastructure sites spread over 500 districts in 27 states. As on December 31, 2009, about 6,956 towers had been set up under the scheme According to the Consolidated Foreign Direct Investment (FDI) Policy document, the FDI limit in telecom services is 74 per cent subject to the following conditions:

This is applicable in case of Basic, Cellular, Unified Access Services, National/ International Long Distance, V-Sat, Public Mobile Radio Trunked Services (PMRTS), Global Mobile Personal Communications Services (GMPCS) and other value added Services

Both direct and indirect foreign investment in the licensee company shall be counted for the purpose of FDI ceiling. Foreign Investment shall include investment by Foreign Institutional Investors (FIIs), Non-resident Indians (NRIs), Foreign Currency Convertible Bonds (FCCBs), American Depository Receipts (ADRs), Global Depository Receipts (GDRs) and convertible preference shares held by foreign entity. In any case, the Indian shareholding will not be less than 26 per cent

FDI up to 49 per cent is on the automatic route and beyond that on the government route. FDI in the licensee company/Indian promoters/investment companies including their holding companies shall require approval of the Foreign Investment Promotion Board (FIPB) if it has a bearing on the overall ceiling of 74 per cent. While approving the investment proposals, FIPB shall take note that investment is not coming from countries of concern and/or unfriendly entities

The investment approval by FIPB shall envisage the conditionality that the Company would adhere to license Agreement

FDI shall be subject to laws of India and not the laws of the foreign country/countries

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The Road Ahead According to a report published by Gartner Inc in June 2009, the total mobile services revenue in India is projected to grow at a compound annual growth rate (CAGR) of 12.5 per cent from 2009-2013 to exceed US$ 30 billion. The India mobile subscriber base is set to exceed 771 million connections by 2013, growing at a CAGR of 14.3 per cent in the same period from 452 million in 2009. This growth is poised to continue through the forecast period, and India is expected to remain the worlds second largest wireless market after China in terms of mobile connections. The Indian mobile industry has now moved out of its hyper growth mode, but it will continue to grow at double-digit rates for next three years as operators focus on rural parts of the country, said Madhusudan Gupta, senior research analyst at Gartner. Growth will also be triggered by increased adoption of value-added services, which are relevant to both rural and urban markets. Mobile market penetration is projected to increase from 38.7 per cent in 2009 to 63.5 per cent in 2013, according to Gartner. The much-awaited mobile number portability was launched on November 25, 2010 in Haryana and will be available to more than 700 million subscribers from January 20, 2011 across the country. As continued efforts of the Government to increase competition in the market and to provide wider choice to customer, Mobile Number Portability will be an important step.

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MAJOR PLAYERS:
1) Reliance Communications Limited Established in 2002, Reliance communication is the wholly owned subsidiary of Anil Dhirubhai Ambani Group of Companies providing the telecommunication services. 2) Bharti Airtel Limited Established in 1995 by Sunil Mittal as a Public Limited Company, Airtel is the largest telecom service provider in Indian telecom sector. With market capitalization of over Rs. 1,360 billion, Airtel has 31% of total market share of GSM service providers. 3) BSNL Founded in 2000, Bharat Sanchar Nigam Ltd. is India's largest public sector

Telecommunications Company providing a wide variety of telecom services. Its service range covers Wireline, CDMA mobile, GSM Mobile, Internet, Broadband, Carrier service, MPLSVPN, VSAT, VoIP services, IN Services, etc. 4) MTNL MTNL has successfully converted its telephone exchange network to the digital mode systems. Having a customer base of more than 6 million, MTNL has showed a growth of over 30% during financial year 2005-06. 5) Ericsson Ericsson has a wide network of more than 140 countries and more than 30% market share. Ericsson's parent company Teleonsktiebolaget L M Ericsson was established in 1876.

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6) Nokia Nokia is one of the leaders in the Indian market providing telecom equipments. Its product range starts from a handset of Rs. 2000-3000 and goes to N series, which amounts to more than Rs. 25000-30000. 7) Siemens Communications Siemens is one of world's largest companies providing electrical engineering products and services. Siemens covers a wide range of services in the electronic arena, such as energy, construction, transportation, lighting, information and communication. 8) Idea Cellular Limited Aditya Birla Group and Tata Group as joint venture, Idea Cellular, is a part of Aditya Birla Nuvo, a flagship company of the Aditya Birla Group, Idea is growing its network in 11 circles. 9) Tata Teleservices Tata Teleservices, one of the 96 companies of Tata Group, has its network in 20 circles. It is the first company to launch CDMA mobile services in India.

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3. COMPANY PROFILE

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Bharti Airtel Limited commonly known as Airtel, is an Indian telecommunications company that operates in 19 countries across South Asia, Africa and the Channel Islands. It operates a GSM network in all countries, providing 2G or 3G services depending upon the country of operation. Airtel is the fifth largest telecom operator in the world with over 207.8 million subscribers across 19 countries at the end of 2010. It is the largest cellular service provider in India, with over 152.5 million subscribers at the end of 2010. Airtel is the 3rd largest in-country mobile operator by subscriber base, behind China Mobile and China Unicom. Airtel also offers fixed line services and broadband 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 this Cisco Gold Certification. To earn Gold Certification, Bharti Airtel had to meet rigorous standards for networking competency, service, support and customer satisfaction set forth by Cisco. The company also provides land-line telephone services and broadband Internet access (DSL) in over 96 cities in India. 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. It is known for being the first mobile phone company in the world to outsource everything except marketing and sales and finance. Its network (base stations, microwave links, etc.) are maintained by Ericsson, Nokia Siemens Network and Hawaii, business support by IBM and transmission towers by another company (Bharti Infratel Ltd. in India). CORE BUSINESS DIVISIONS Mobile Services: They offer mobile services using GSM technology on 900MHz and 1800MHz bands, and are the largest wireless service provider in the country, based on the Number of customers: Their 85,650,733 mobile customers accounted for a market share of 24.7% of wireless market, as on December 31, 2008. They offer post-paid, pre-paid, roaming and value added services through our extensive sales and distribution channel covering 1,069,706 outlets. Their network is present in 5,057 census towns and 401,882 non-census towns and villages in India, thus covering approximately 79% of the countrys population.

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Telemedia Services :They provide broadband (DSL) and telephone services (fixed line) in 95 cities with growing focus on new media and entertainment solutions such as DTH and IPTV. They had 2,619,461 customers as on December 31, 2008 of which 37.9% were subscribing to broadband/internet services. Their product offerings in this segment include supply and installation of fixed-line telephones providing local, national and international long distance voice connectivity and broadband Internet access through DSL. The strategy of their Telemedia business is to focus on cities with high revenue potential, except for DTH which is an all- India offering. Airtel digital TV is available to customers through 23,200 retail points in 120 cities across the country. Enterprise Services: Enterprise Services provides a broad portfolio of services to large Enterprise and Carrier customers. This division comprises the Carrier and Corporate business units. Enterprise Services is regarded as the trusted communications partner to India's leading organizations, helping them to meet the challenges of growth. Carriers: Carrier business unit provides long distance wholesale voice and data services to carrier customers as well as to other business units of Airtel. It also offers virtual calling card services in the overseas markets. The business unit owns a state of the art national and international long distance network infrastructure enabling it to provide connectivity services both within India and connecting India to the world. The national long distance infrastructure comprises of 90,205 kms of optical fiber, over 1,500 MPLS and SDH POPs and over 1,250 POIs with the local exchanges, providing a pan India reach. The international infrastructure includes ownership of the i2i submarine cable system connecting Chennai to Singapore, consortium ownership of the SMW4 submarine cable system and investment in capacities across a number of diverse submarine cable systems across transatlantic and transpacific routes. In recent past we have announced investments in new cable systems such as Asia America Gateway (AAG), India Middle East and Western Europe (IMEWE), Unity North, EIG (Europe India Gateway) and Eastern Africa Submarine Cable System (EASCS). Corporate: This business unit delivers end to end telecom solutions to Indias large corporate. It serves as the single point of contact for all telecommunication needs for corporate customers in India by providing full suite of communication services across data, voice and managed services.

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It specializes in providing customized solutions to address unique requirements of different industry verticals; BFSI, IT, ITeS, Manufacturing and distribution, media, education, telecom, Government and PSUs and retail among others. Backed by the alliances with leading technology companies worldwide and state of the art infrastructure, it offers complete range of telecom solutions. These solutions enable corporate to network their offices within India and across the globe, provide them infrastructure to run business critical applications and provide them means to connect with their customers, vendors and employees. Products of Airtel SIM (Security Identification Module) The base product of company, required for new subscriber. Now Airtel provides this sim with 64kb memory. The cost of sim to company is Rs 40/- with life time option. The sim is provided to the company at free of cost which the retailer can sale at maximum Rs 100/- . LAPU: A SIM is provided to retailers from the company at free of cost for providing easy recharge service. Only regular retailers have this facility. This SIM has a memory of 128kb and specially designed for easy recharge purpose. A retailer has minimum 5 easy recharge customers per month. Recharge voucher: In Every 1000 rupees of easy recharge the retailer must have to keep 33% of paper voucher where the distributor has to keep 35%. Recharge vouchers are available at different costs from Rs 10/- on words and easy recharges are available from Rs 30/- on words. Paper voucher is maximum available up to Rs 120/- where easy recharge is available up to RS 10,000/-.
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Airtel PCO & iBox: Airtel provide PCO facility in two ways. 1. iBox (Coin Box) 2. PCO (like BSNL land line facility) Airtel Vision To provide global telecom services and delight customers By 2010, we want Airtel to be the most admired brand in India. Loved by more customers Targeted by top talent Benchmarked by more business

Airtel Mission We will meet the mobile communication needs of our customers through: Error-free service delivery Innovate products and services Cost efficiency Unified messaging solutions

Values

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We will always put our customers first. We will always trust and respect each other. We will respect our associates as we respect each other. We will work together through a process of continuous improvement.

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7 Ps of Airtel
1. PRODUCT

Airtel Pre-paid Airtel Post-paid Blackberry Wireless Handheld Value Added Services (VAS)

The different value added services provided by Airtel are-

Instant Balance Enquiry 24Hr recharge Facility Caller line identification Call divert, Call wait & Call Hold Multimedia messaging service (MMS) Airtel Live Portal SMS based Information Service Hello Tunes & Ring Tones GPRS

2. PRICE Customer based pricing strategies.

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Flexible pricing mechanism

3. PLACE

Airtel Customer Care Touch Points Distributors Retailers like E.g. Paan shops, grocery stores, chemists, outlet etc.

4. PROMOTION Large scale print and video advertising. Big celebrities like SRK and Sachin are roped in to endorse the product. In 2002 Airtel got its Signature tune from A.R. Rehman.

5. PEOPLE

Total Employees 25616 Dedicate and passionate workforce One of the best customer support

6. PROCESS

Process for services is very easy and customer can avail it very easily. 121 is the customer support no. which can be dialed from anywhere in India

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7. PHYSICAL EVIDENCE

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3. LITERATURE REVIEW

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Several studies on Customer satisfaction and loyalty are reported in the context of Banking Sector. A brief overview is presented below.

1. As per ( Dick and Basu , 1994).Customer loyalty is viewed as the strength of the relationship between an individuals relative attitude and repeat patronage. The relationship is seen as mediated by social norms and situational factors. Cognitive, affective, and conative antecedents of relative attitude are identified as contributing to loyalty, along with motivational, perceptual, and behavioural consequences

2. (Aaker, 1991) stated that in the customer centred business, survival remains to the degree that customer satisfaction is met. Previous research studies have shows that the repurchase intent was the main benefit of customer retention. However, some had identified multiple benefits like repurchase intent, price tolerance, willingness to recommend etc. In reaching retention, vendors should manage satisfaction and consequences of Customer Loyalty (Naranyandas, 1998). Loyalty too has a pyramid effect that suggests of having hierarchy in loyalty levels between customer and vendor. Change in loyalty level will manifest itself in the presence of specific attitude and behaviour

3. Based on a study by (Cooil et al., 2007) Customer loyalty and satisfaction are integral part of customer retention process. Customer Retention is a primary measure of loyalty. There is a positive relationship between changes in satisfaction and share of wallet. In particular, the initial satisfaction level and the conditional percentage of change in satisfaction significantly correspond to changes in share of wallet. Income and length of the relationship negatively moderate this relationship. Loyalty and retention although positively moderate with share of wallet it is necessary to examine the cost of maintaining the particular customer. It is not guaranteed that every customer retention generates contribution. Therefore the concept of Customer lifetime Value (CLV) plays an important role.

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4. (Rundel Thiele, 2005)In creating loyalty and thereby CLV, it would be prudent to explore qualities of loyalty. Two types of primary loyalty qualities had been identified in the previous researches, i.e. Attitudinal Loyalty and Behavioural Loyalty, out of which attitudinal loyalty could be the most important dimension for marketers to monitor

5. Rust et al., (1999) discuss the Customer Perceived Quality and Role of Customer Expectation Distribution. According to them exceeding customer expectation will still be required if the company seeks to delight customer. In the event of having low expectation of service quality and meeting it, researchers had found, had raised preference. Given the option to general customers two equally priced options, the customer will choose the one with higher expected quality, the research had established. They argued that a company should always focus on its most loyal customers. Retention point of view, less loyal customers tendency to defection is grater hence that sector should be defended with force. This research further suggested greater the experience a customer with a service provider greater the chances of meeting expectation in perceived value, hence retention.

6. Services Quality is considered as a major determinant in customer retention and building value relationship (Venetis and Ghauri, 2004). The quality of the service has various elements namely ; a)Reliability b) Responsiveness c) Assurance d) Empathy e)

Tangibles. as identified by Parasuraman et al.(1985).

7. According to Lovelock and Wright (2001), marketing managers in service organizations

make decisions regarding 8Ps i.e. Product, Place, Promotion and Education, Price and other user outlays, Process, Productivity and Quality, People and Physical evidence.

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4. RESEARCH ANALYSIS

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PROJECT TITLE:
A study on customer satisfaction and loyalty towards Airtel prepaid service provider in Gurgaon

RESEARCH PROBLEM
To study the different factors affecting customer satisfaction and loyalty towards Airtel prepaid service provider because of Mobile Number Portability, because of which consumers have less switching cost and competitors innovative and attractive services.

OBJECTIVES
To identify the factors affecting the customer satisfaction in Airtel service provider To identify the factors affecting the customer loyalty in Airtel service provider

HYPOTHESIS
H0: Mobile users do not perceive any difference in the services of different providers H1: Mobile users do perceive differences in the services of different providers H0: There is no significant difference in level of customer satisfaction towards different service providers. H1: There is a significant difference in level of customer satisfaction towards different service providers. H0: Mobile number portability does not impact customer loyalty H1: Mobile Number portability does impact customer loyalty.

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RESEARCH METHODOLOGY
RESEARCH DESIGN

The study will be descriptive in nature which will include both primary and secondary data analysis. As a part of a sample study a survey will be conducted on the customers of Gurgaon to prove or disprove the observed hypothesis and satisfy the mentioned objectives.

SOURCES OF DATA

Primary data will be collected with the help of a Questionnaire survey which will be conducted on customers of different Gurgaon regions. Secondary data will be collected from various published sources like websites, books, studies and reports.

SAMPLE DESIGN

A Sample survey will be conducted with respondents from various strata of society to make the study more accurate & meaningful. Respondents include people from service background, students, housewives, businessmen etc.

SAMPLE SIZE

A sample size of 150 was selected for comparative analyses of AirTel prepaid service provider with other service providers in Gurgaon City. The methods used in conducting this Marketing Research were Personal Interviews aided with Questionnaires.

SAMPLING PROCEDURE

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Primarily samples will be selected through Convenience Sampling technique wherein the respondents were selected as per the convenience of the researcher.

DATA GATHERING

Research data will be gathered through questionnaires circulated online through emails & social networking sites and in personal too. The feedback will be consolidated in a excel spreadsheet for further statistical processing.

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5.DATA ANALYSIS

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For analysis of the collected data the following tools will be used so that we can suggest the most statistically correct CRM initiatives:

1) Graphs will be used to plot the demographics of the respondents and study the frequencies. 2) Discriminant analysis will be used to classify the respondents into different groups based on their demographic profiles. The main purpose of a discriminant function analysis is to predict group membership based on a linear combination of the interval variables. The procedure begins with a set of observations where both group membership and the values of the interval variables are known. The end result of the procedure is a model that allows prediction of group membership when only the interval variables are known. A second purpose of discriminant function analysis is an understanding of the data set, as a careful examination of the prediction model that results from the procedure can give insight into the relationship between group membership and the variables used to predict group membership.
3) Friedman Rank Test will be used for knowing the perception of the respondents

towards different prepaid service providers.

4) Independent sample T Test will be used for testing the validity of the research

hypothesis. 5) Factor analysis will be conducted in order to find out the important factors affecting their choice of a bank as per definition of the American statistical association Factor analysis is a data reduction technique for identifying the internal structure of a set of variables. Unlike other techniques like Regression analysis or ANOVA, factor analysis does not require that predictor and criterion variables be defined. Factor analysis attempts to identify the relationship between all variables included in the analysis set. Factor analysis is decomposition in nature in that it identifies the underlying relationships that exist within a set of variables. Factor analysis creates groups of metric variables (interval or ratio scaled) called factors. A factor is an underlying quality found to be characteristic of the original variables. Two types of factors exist. Common factors have effects shared
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in common with more than one observed variable. Unique factors have effects that are unique to a specific variable.

6) Regression analysis will be used to find out the most effective strategies in that lead to higher level of Customer Satisfaction. Regression analysis includes any techniques for modeling and analyzing several variables, when the focus is on the relationship between a dependent variable and one or more independent variables. More specifically, regression analysis helps us understand how the typical value of the dependent variable changes when any one of the independent variables is varied, while the other independent variables are held fixed.

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Demographic profile of the respondents

1. Age ratio of the respondents:

No. of respondents
30 25 20 15 10 5 0 <18 19-25 26-35 36-45 >45 No. of respondents

As per the research, the above graph shows that the majority of the respondents were from the age group of 19 to 25 years, mostly belonging to the youth group.

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2. Gender profile mix:

Gender

Female 46% Male 54%

From the above graph, we can see that there is almost an equal distribution of Male and Female among the respondents.

3. Occupation Profile of the respondents:

Occupation
40 30 20 10 0 Student Service Self employed Housewife Others

No. of Respondents

From the above graph, most of the respondents were either students or were into service
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Consumer behavior and preferences 1. Ranking of preferred service provider:

With the data collected through the survey, a Friedman rank test was conducted to find out the most proffered network provider. The respondents were asked to rank their favorite service providers in order of preference and they where accordingly analyzed to find out the most preferred brands. In the report the following hypothesis was also considered which will be accepted or rejected using this test. H0: Mobile users do not perceive any difference in the services of different providers

Friedman Rank test

Ranks Mean Rank Airtel Vodafone BSNL Tata Reliance 2.43 2.36 2.24 4.48 3.50

The above table shows that Vodafone is the most favored brand followed by BSNL and Airtel.
Test Statisticsa N Chi-Square Df Asymp. Sig. a. Friedman Test 100 150.211 4 .000

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The above test shows that there is a significant difference among the groups hence showing that the test is statistically significant. Hence we can reject the null hypothesis that mobile users do not perceive a difference between different service providers. Thus we can state that there is a significant difference in the preferences towards different service providers.

2. Customer satisfaction towards different service providers:

In order to know the customer satisfaction level towards different service providers first be needed to whether there is a significant amount of difference in the level of customer satisfaction towards different service providers. For this we tested the following Hypothesis using a One sample T-test. Ho: There is no significant difference in level of customer satisfaction towards different service providers H1: There is significant difference in level of customer satisfaction towards different service providers

One-Sample Statistics:

One-Sample Statistics N Airtel Vodafone BSNL TataDocomo Reliance 100 100 100 100 100 Mean 2.2800 2.9400 2.6800 3.1700 2.9900 Std. Deviation .86550 1.15312 1.29396 1.12864 1.15027 Std. Error Mean .08655 .11531 .12940 .11286 .11503

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One-Sample Test Test Value = 0 95% Confidence Interval of the Difference t Airtel Vodafone BSNL TataDocomo Reliance 26.343 25.496 20.712 28.087 25.994 df 99 99 99 99 99 Sig. (2-tailed) .000 .000 .000 .000 .000 Mean Difference 2.28000 2.94000 2.68000 3.17000 2.99000 Lower 2.1083 2.7112 2.4232 2.9461 2.7618 Upper 2.4517 3.1688 2.9368 3.3939 3.2182

The significance value is 0.00 hence there is a significant difference between the groups at confidence level 95% (The significance is less than 0.05) Hence we can reject the null Hypothesis and accept the alternate hypothesis that there is a difference in the level of consumer satisfaction towards different service providers.

3. Weighted Average Analysis:

As we know that there is a difference in the level of customer satisfaction towards different service providers we can calculate the weighted average score and plot a graph to know which brand has a higher level of customer satisfaction.

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Wieghted Average Score

400 350 300 250 200 150 100 50 0 Airtel Vodafone BSNL Tata Docomo Reliance

Score

From the above Graph we can observe that Vodafone enjoys the highest level of customer satisfaction followed by BSNL and Airtel.

4. Factors affecting the choice of a particular service provider:

Form the data collected from the respondent a Factor analysis was conducted to find out the most important factors affecting the choice of a particular service provider.

KMO and Bartlett's Testa Kaiser-Meyer-Olkin Measure of Sampling Adequacy. Bartlett's Test of Sphericity Approx. Chi-Square df Sig. a. Based on correlations .587 67.165 15 .000

From the above table we can observe the KMO Score which shows the relevance of the data for the test. The score of 0.587 shows that though the data is not excellent but it can be considered as it is more than 0.50.
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Total Variance Explained Compon ent 1 2 3 4 5 6 Total 1.954 1.273 .905 .844 .540 .485 Initial Eigenvalues % of Variance 32.561 21.212 15.076 14.061 9.008 8.083 Cumulative % 32.561 53.772 68.848 82.909 91.917 100.000 Rotation Sums of Squared Loadings Total 1.865 1.361 % of Variance 31.083 22.689 Cumulative % 31.083 53.772

Extraction Method: Principal Component Analysis.

From the above table it can be observed that two components explain the variance up to 53% the rest is unexplained by the given factors.

Rotated Component Matrixa Component 1 Advertisement BrandName Network Tarrifplan CustomerService Familynfriends -.457 .145 .610 .835 -.273 -.701 2 .289 .822 -.085 .072 .767 .021

From the rotated component matrix by the method of factor loading we can see that the following are the major factors affecting the choice of the service provider by the customers. Factor 1: Tariff plan & family and friends Factor 2: Brand name & Customer service
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5. Factors affecting the customer satisfaction in Airtel users:

A regression analysis was conducted to find out the significant factors affecting the level of customer satisfaction among Airtel users.

Regression Analysis
Model Summary Std. Error of the Model 1 R .931a R Square .868 Adjusted R Square .836 Estimate .55277

a. Predictors: (Constant), Call Rates, New Schems & Offers, Network, Value added services, SMS Rates, Roaming , Customers Service, Recharge outlets

The above R Square Value we can infer that the independent variables explain the changes in the dependent variable upto 86.8% which is a good figure.
Coefficientsa Standardized Unstandardized Coefficients Model 1(Constant) Network Customers Service New Schems & Offers Value added services Roaming Recharge outlets SMS Rates Call Rates B -2.826 .271 -.019 .846 .481 .031 .008 .130 .122 Std. Error 1.391 .111 .136 .087 .167 .105 .142 .117 .170 .180 -.013 .805 .248 .023 .005 .092 .072 Coefficients Beta t -2.033 2.446 -.140 9.670 2.881 .292 .054 1.115 .716 Sig. .050 .020 .889 .000 .007 .772 .957 .273 .479 95.0% Confidence Interval for B Lower Bound -5.652 .046 -.295 .668 .142 -.183 -.281 -.107 -.224 Upper Bound .000 .497 .257 1.024 .820 .245 .296 .367 .468

a. Dependent Variable: Customer Satisfaction

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The above table shows that Network, New Schemes & offers and Customer service are the significant factors affecting customer satisfaction among Airtel users as their significance value is below 0.05 at 95% confidence interval.

6. Factors affecting customer loyalty among Airtel users

A regression analysis was conducted to find out the significant factors affecting customer loyalty. The test was conducted by taking the level of customer loyalty as the dependent variable. In the study the following Hypothesis was considered which will also be tested. H0: Mobile number portability does not impact customer loyalty H1: Mobile Number portability does impact customer loyalty.

Regression Analysis
Model Summary Std. Error of the Model 1 R .921a R Square .849 Adjusted R Square .828 Estimate .55922

a. Predictors: (Constant), Mobile Number Portability, Network Coverage, Switching Cost, Customer Service, Tariff Plan

The above R Square Value we can infer that the independent variables explain the changes in the dependent variable upto 84.9% which is a good level of explanation.

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Coefficientsa Standardized Unstandardized Coefficients Model 1(Constant) Network Coverage Tariff Plan Customer Service Switching Cost Mobile Number Portability a. Dependent Variable: Customer Loyalty B -.104 .409 .352 .539 -.175 .019 Std. Error .859 .133 .140 .132 .127 .134 .296 .273 .435 -.091 .010 Coefficients Beta T -.121 3.077 2.508 4.082 -1.380 .138 Sig. .904 .004 .017 .000 .176 .891 95.0% Confidence Interval for B Lower Bound -1.845 .140 .068 .272 -.431 -.254 Upper Bound 1.637 .678 .636 .807 .082 .291

From the above table we can observe that Network coverage, Tariff Plans and Customer Service are the significant factors affecting customer loyalty towards Airtel. From the above test we can also accept the null hypothesis that mobile no. portability does not impact the level of customer loyalty as its the significance value is 0.891 which is more than 0.05 in 95% confidence level hence it is not a significant variable

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6. FINDINGS AND DISCUSSIONS

58

We can summarize the findings from the above analysis in the following points: Most of the respondents for the survey were within the age group of 19-25 though the there were respondents from all the age groups hence ensuring a proper mix of opinion.

There was an equal composition of gender among the respondents hence ensuring that the research was free from any gender bias.

The occupational profile of the respondents show that most of the respondents were either students or into service.

From the Friedman rank test we can observe that Vodafone is the most preferred brand closely followed by BSNL and Airtel. The test also proved the hypothesis that Mobile users do perceive differences in the services of different providers.

The weighted Average analysis also shows that the overall satisfaction level towards the services of Vodafone, BSNL and Airtel are higher as compared to other service providers.

A One sample T-test was conducted to find out that there is significant difference in level of customer satisfaction towards different service providers.

With the help of a factor analysis we were able to find out the major factors affecting the choice of a particular service provider as follows: o Factor 1: Tariff plan & family and friends o Factor 2: Brand name & Customer service

With a regression analysis we were able to identify the major Factors affecting the customer satisfaction in Airtel users as: o Network o New Schemes & offers o Customer service

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With a regression analysis we were able to identify the major factors affecting customer loyalty among Airtel users as: o Network coverage o Tariff Plans o Customer Service

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7. RECOMMENDATIONS

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To catalyze the sales of Airtel Pre-paid services and capture maximum market share, Airtel should focus on the following points:

From the study, it is abundantly clear that Call rates lead the consumers to switch the service provider. So, mobile service providers need to satisfy the Consumer with minimum call rates.

Mobile service providers should invest more on improving their network coverage in order to retain their consumers and dominate the market in future too.

Mobile service providers have to provide more offers for family and friends. Enticing offers still hold a major sway, to decrease customer diversification and to maintain the brand name of the company.

Mobile service provider should satisfy their current consumers by providing them innovative offers which are attractive for the customers, because high customer demand will help in capturing large market share.

Mobile service provider should accept valid feedbacks from consumers regularly and make sure that they satisfy the consumers.

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8. CONCLUSION

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From the results obtained after analyzing the data collected, it is clear that although Airtel enjoys a very strong brand image in the market, yet it has to do a lot in building up relationships with its customers. One of the main objectives of this project was to identify the underlying expectations of the customers from Airtel. After analyzing the findings of the research, we can conclude that Airtel has a very good reputation in the market.

The study reveals that call rates play the most important role in switching the service provider followed by network coverage, value added service, Consumer care and advertisement which plays the least important role. It is found that there is a relation between switching the service provider and the factors (Customer service, service problem, usage cost, etc.). After analyzing the findings of the study, we suggest that cellular service providers concentrate more on increasing network stability and setting tariff rates competitively. The findings also suggest that managers of these mobile operators should shift focus on building corporate image and analyze more carefully the reason for consumers to switch brands in this industry in order to increase loyalty among these consumers.

This research also examined the relationship between switching cost, corporate image, trust and Customer loyalty. The research finds that although all the independent variables, switching cost, corporate image, and trust have certain degree of relationship with the dependent variable, Customer loyalty, only trust has the strongest relationship with Customer loyalty. To capture the highest market share in India, it needs to focus on its network service, new innovative offers and customer feedback.

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9. REFERENCES

65

Websites
www. marketresearchworld.net www.airtel.in www.rcom.co.in www.oppapers.com www.docstoc.com www.tatadocomo.com

www.airtelworld.com

Research Papers
Developing Motivational and Coaching Skills in Telecom Companies, Sayed Kadhem[2009].

A Study on Consumer Switching Behavior in Cellular Service Provider, M.Sathish, Far East Journal of Psychology [2011].

Books
Marketing Management, Philip Kotler, Kevin lane Keller, Abraham Koshy & Mithileshwar Jha, 13th edition. Consumers are looking for good relationship: Consumer service initiatives should mean business, Allossery, Patrick (2000). Service Marketing, Christopher Lovelock and Jochen Wirtz

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10. ANNEXURE

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QUESTIONNAIRE Customer Satisfaction Survey for Airtel

1 .Name

2. Age 3. Gender Male Female 4. Occupation Student Service Self employed Housewife Others 5. Are you a mobile user? YES NO 6. Rank the following mobile service providers based on your order of prefferencePlease assign only a unique rank against each service provider

1 Airtel Vodafone BSNL Tata Docomo

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1 Reliance

7. Which Mobile service provider are you currently using? Airtel BSNL Vodafone Idea Spice Reliance Docomo Others 8. What are the important factors affecting your choice of a particular service provider?

1.Very Important Advertisements Brand Name Network Tariff Plan Customer Service Family & friends

2.

4.

5.Least Important

9. Mark the level of satisfaction towards your current service provider?

1 Highly Satisfied

5 Highly Dissatisfied

For Airtel Users Only

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10. Since how long have you been using Airtel? Less than 1 month 2-6 months 6-12 months More than a year 11. Rate the following services of Airtel on the basis of your satisfaction

Excellent Network New Schemes & offers Call rates SMS Rates Roaming Recharge Outlets Value Added Services Customer Care

Very good

Fairly good

Average

Poor

12. Are you planning to change from Airtel as your service provider? Yes No 13. If No, What are the factors that encourage you to continue with Airtel? Superioir Network Coverage Better Tariff plans Promp Customer service High Switching Cost

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Other:

14. If Yes, What are the factors that encourage you to discontinue with Airtel? Poor Network Coverage Better Tariff plans by other service providers Poor Customer service Mobile Number portability Other:

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