Project 1 Impact of External Environment On Telecom Industry
Submitted to
By Group 1
Dr. Nitika Sharma
Group Members
Akash Raj Anil Behal Anurag Singh Amit Kanabar Bharti Verma Deepak Raja
Table of Content
1. 2. 3. 4. 5. 6. 7.
Executive Summary Introduction PESTEL Analysis HR Challenges and Recruitment The major challenges faced by the HR in recruitment Liberalization and reforms in Telecom sector since early 1990's till date Recent Trends in Recruitment in telecom industrya. Outsourcing
· Advantages of outsourcing b. Poaching/Raiding c. E-Recruitment d. Training and Development in Telecom Sector
· Training Institutes e. Compensation
· Entry level compensation compensation · Managerial level compensation f. Performance appraisal appraisal in call centre
Executive Summary: The Indian telecommunications has been zooming up the growth curve at a feverish pace, emerging as one of the th e key sectors responsible responsib le for India's resurgent resurgen t economic growth. India is has surpassed US to become the second largest wireless network in the world with a subscriber base of over 300 million in 2008, according to the Telecom Regulatory Authority of India (TRAI). The Government of India has taken many proactive initiatives which have provided a framework for the rapid growth of the telecom industry in a very short span of time. The report provides a detail study of the Indian telecom sector and presents an analysis of the competitive environment prevailing in the industry. The development of telecom sector is based on various political reasons like Liberalization, reduced excise duty and many more policies, Social culture factors like the change in the consumer behaviour, knowledge about the technology, Economical factors like increase in high disposal income, cheap charges for using a network connection. This growth needs huge resources i.e. Capital and Human Resources. It analyses how the telecom industry managed the Human resource for the development of industry as well the benefits of its employee. The Human Resource management adopted different Human Resource management policies to keep the employee satisfied in the rapidly changing external environment before and after2000. We also look after how the changes in external environment affect the Recruitment, Selection, performance appraisal, Compensation policies in detail.
Introduction: Telecommunications in India can be traced back to the 19th century when the British East India Company introduced telegraph services in India. The past two decades have been considered as the golden period for the telecommunications industry in India with exponential growth and development in terms of technology, penetration, as well as policy. All this has paralleled with the liberalization in this sector and huge investment by both domestic and foreign investors. The modern system of communications in India started with the establishment of telegraph network. In order to ensure telegraph network’s exclusivity and establish government control over electronic communications, various telegraph statutes were enacted by the Government of India which laid the foundation of the present regulatory framework governing telecommunications (both wired and wireless). In early days, India witnessed increasing number of wired telephone connections. Even when wireless communication was introduced in the form of cellular phones, it was not immediately accepted by the Indian masses, mainly on account of high price of cellular phones as well as high tariff structure prevalent at that point in time. Gradually, Graduall y, with the price of cellular handset han dset as well as mobile (wireless) tariff reducing there was increasing adoption of wireless communications. Today the Indian telecom industry is already witnessing the lowest telecom tariff globally. Like elsewhere, telecommunications in India started as a state monopoly. In the 1980s, telephone services and postal services came under the Department of Posts and Telegraphs. In 1985, the government separated the Department of Post and created the Department of Telecommunications (“DoT”). As part of early reforms, the government set up two new public sector undertakings: Mahanagar Telephone Nigam Limited (“MTNL”) and Videsh Sanchar Nigam Limited (“VSNL” ). MTNL looked after telecommunications operations in
two megacities, Delhi and Mumbai. VSNL provided international telecom services in India. DoT continued to provide telecommunications operations in all regions other than Delhi and Mumbai. It is important to note that under this regime, telecommunication services were not treated to be a necessity that should be made available to all people but rather a luxury possible for select few. In the early 1990s the Indian telecom sector, which was owned and controlled by the Indian government, was liberalized and private sector participation was permitted through a gradual process2. First, telecom equipment manufacturing sector was completely deregulated. The government then allowed private players to provide value added services (“VAS”) such as paging services. In 1994, the government unveiled the National Telecom Policy 1994 (“ NTP 1994”). NTP 1994 recognized that existing government resources would not be sufficient to achieve telecom growth and hence private investment should be allowed to bridge the resource gap especially in areas such as basic services. As markets and telecom technologies started converging and the differences between voice (both fixed and wireless) and data networks started blurring, the need for developing the modern telecom network became an immediate necessity. Accordingly, private sector participation was allowed in basic services. The government anticipated that a major part of the growth of the country‟s GDP would be reliant on direct and indirect contributions of the telecom sector and accordingly the need for a comprehensive and forward looking telecommunications policy was felt. This then paved way for New telecom te lecom Policy 1999 (“ NTP 1999 ”) which largely focused on creating an environment for attracting continuous investment in the telecom sector and allowed creation of communication infrastructure by leveraging on technological development. India is likely to be second largest mobile market in the BRIC nations, with 560 million mobile users representing the next great growth curve for both mobile and interactive marketing industries, according to a report by E- Marketers. Mobile telephony continues to fuel growth in the Indian telecom sector with mobile subscriber base projected to grow at a CAGR of around 6.6% during 2011-12 - 2014-15.
EXTERNAL ENVIRONMENT ANALYSIS:
DEMOGRAPHIC ENVIRONMENT: ENVIRONMENT:
Demographic environment mainly consists of characteristics of population like age, gender, ethnic origin, race, sexual orientation and social class. These forces have a lot of impact on the organization. Large pool of professionals, growing literacy rate and large youth population makes India very favorable for growth of Mobile Industry. In case of Airtel, it has always targeted the entire population unlike virgin mobiles (youth target). Airtel has never discriminated between the customers on basis of income level. It has bought out schemes for all generations and income levels of the society. ECONOMIC ENVIRONMENT:
Economic factors mainly include growth, interest rates, exchange rates and inflation rates. These are the factors that mainly have a major impact on the operation of the business and various decisions that are taken. India is a developing country with a lot of potential and growth still to come. It has a good GDP growth rate of 7% even during economic meltdown and hence provides ideal ground for many foreign players to enter in to the Indian market. This growth is mainly fuelled by manufacturing and service sector growth. Wireless penetration has significantly increased and so has Airtel customer base. Hence economic are very fit for Mobile Industry to explore its full potential in India. POLITICAL AND LEGAL ENVIRONMENT
Political factors are how and to what degree a government intervenes in the economy. The unprecedented growth of the Indian telecom industry has been well supported by the policy reforms. Some of the key Highlights are:January 2010
• Proposal to Waiver of License fees in Rural Areas 2009
• Regulatory on Quality of Services for Telecom Sector Sector • Interconnection Regulation for Broadcasting Broadcasting Sector • Interconnection Usage Charge Regime • Resale of International Private Leased Circuit (IPLC) • GoM has been constitutes to decide the pricing of 3G Spectrum
2008
• Guidelines for 3G Spectrum Auction issued. Foreign Players allowed to bid. • DoT issues 121 Letters of Intent (LoIs) for UAS licences • Guidelines for Mobile Number Portability Services • DoT allows active infrastructure sharing 2007
• Dual Technology Allowed 2006
• Number portability proposed 2005
• An attempt to boost rural telephony was made • FDI limit was raised from 49 to 74 per cent 2004
• Intra-circle merger guidelines were established • Broadband Policy 2004 was formulated to target 20 million internet users by 2010 2003
• Calling Party Pays (CPP) implemented • Unified Access Licensing (UAL) regime established • Reference i nterconnect order issued 2002
•
ILD services unlocked to competition
•
Go-ahead to CDMA technology
•
Initiation of internet telephony in India
•
Reduction of license fees
2001
• Additional licenses in basic and cellular services services • Reduction of license fee • Limited launch of CDMA WLL (M) • Reduction of GSM cellular tariff
• Widening of service coverage by the then players • Initiation of 3rd and 4th GSM operator networks TECHNICAL ENVIRONMENT:
Technical environment mainly consists of the technological aspects such as R&D, automation, technological incentives and rate at which technology changes. These can be an important aspect as far as barriers to entry are concerned. Furthermore technological shifts can affect costs, quality, and lead to innovation. The Indian telecom sector offers immense opportunities for foreign companies in areas such as 3G, virtual private network, VAS (value added services) etc.
VPN Rural Telephony
4G Growth Avenues
3G
VAS
Infrastructure sharing
WiMAX
3G Services:
With the advent of 3G Indian telecom industry was not able to gain as much revenue as they had expected from the new technology. The success of 2G still outshines that of 3G. 3G model failed because of several factors likelike•
High Cost of acquiring the telecom circles. circl es.
•
Different handsets are required to enable 3G.
•
Initial cost is high.
4G Services:
With technology rapidly changing Indian telecom market is looking forward to 4G technology which will enable them to garner more revenues, since it overcomes the defects of 3G such as it does not require change of handsets and initial cost is also low as compared to 3G. However the advantages are numerous such as data speed is very high and the coverage area is also far better then 3G in terms of area covered by each tower. Infrastructure Sharing:
Optimizing Costs In the midst of the telecom boom, common infrastructure will improve coverage and quality of calls and reduce the costs. Active Infrastructure sharing has started in 2008 which enables sharing of Antenna systems, Cables and transmission systems, Backhaul (core infrastructure with switches and networking). Value Added Service (VAS)
Rolling out of advanced VAS has been possible due to Technological advancement and hence creating more value for Buyers and Sellers. A number VAS are being offered by various telecom players across the globe ranging from Missed call alerts to cricket updates as well as covering completely different regions such as Astrology, numerology, Call me back tunes etc. The telecom market generates good sizeable amount of its revenue from these services. Airtel has a range of all these features and through its leadership strategy is always the first one to come up with new schemes and tariffs rates, which are later on being followed by other players in the industry.
PORTERS FIVE FORCE MODEL:Porter's five forces" is a framework for the industry analysis and business strategy development developed by Michael Porter of Harvard business School in 1979. An unattractive industry is the one where the combination of forces acts to drive down overall profitability. A very unattractive industry would be one approaching "pure competition".
Potential Entrants
Threat of New Entrants
Rivalry among existing Firms
Suppliers
Industry competitors
Bargaining Power of
Buyers
Bargaining Power of Buyers
Suppliers
Substitutes
Threat of Substitute Products or Services
Porters five force of Model includes: I. II.
Threat of new Entrants Bargaining power of Buyers
III.
Bargaining power of Suppliers
IV.
Threat of Substitute products or services
V.
Rivalry among existing firms.
1. Threat of New Entrants: It is not only the existing players that posses a threat to the firm but the possibility of a new player al together can also have significant impact on the strategic decisions that are to be taken by that firm. Theoretically, any firm should be able to enter or exit a market and if there is a free entry/exit in a market then profits are very less in that industry because it shall have maximum number of players and hence the customer base is divided and so is the margin. Telecom industry has high entry barriers because: 1. Initial setup cost for equipments and infrastructure is very high 2. License fee required to operate in a particular region is very expensive. 3. Oligopolistic structure doesn’t allow a firm to have competitive advantage since the strategies
followed by a firm shall quickly be copied or retaliated heavily by other players of the firm. 4. It is difficult to achieve product differentiation since all the players shall offer the same product. 5. Break even point is difficult to obtain since a new entrant will have difficulty in attaining the customer base and build the same brand that has been built over years by other players like Vodafone, Airtel, reliance etc.
2. Intensity of Rivalry among Firms: In the traditional economic model, competition drives profit to zero. But competition is not perfect and firms are not unsophisticated price takers, rather they strive for competitive advantage. The industry concentration or the number of business units operating within a particular industry indicates the rivalry among them. If the number of businesses operating in a industry is small that means that rivalry among them will also be low and vice versa. In the case of telecom sector there are only few major pan India operators like Airtel, BSNL, Reliance, Tata Indicom, Vodafone etc. but rivalry among them is very high. Each operator is trying to grab the t he maximum market share and they even try to woo the customers of other operators to join their network. Also there is very little product differentiation between different operators. If one operator introduces a new scheme then with a few days or in some case the next day similar schemes are offered by the rival operators. This almost negates any first mover’s advantage which any operator may have. But telecom industry has a major
advantage as it is one of the fastest growing sector of the country (growing in the range of 20-40% in past 3 years) so all the operators can stay in the industry without any shakeout happening. Also India has a huge untapped rural market which Airtel can exploit. Here we shall discuss two large competitors of Airtel – BSNL & Reliance – and discuss their strategies 1. Bharat Sanchar Nigam Ltd.
BSNL is a state owned service provider in India and is the seventh-largest telecommunication company in the world. It offers wide range of services in India, such as wireline, CDMA mobile, GSM mobile, internet, broadband, carrier, MPLS-VPN, VSAT, VoIP etc. BSNL is the largest operator in basic services in India with its cellular in India with its services helping it to establish its presence as the largest operator in rural areas. Rural Penetration: BSNL is playing a leadership role in developing the telecom infrastructure in rural areas. It has been successful in increasing its cellular subscriber base by pioneering its services in the rural terrain. Its services cover the whole of India, except Delhi and Mumbai, which are covered by MTNL, the other state-owned player. Low Cost Strategy: BSNL is a low-cost service provider of many services. This strategy has helped BSNL in penetrating the market.
2. Reliance Communications Reliance Communications, previously known as Reliance Infocom, brought about a digital revolution in the Indian telecom industry by providing India’s vast population with affordable means of
information and communication. Reliance Infocom, with the aim of making mobile calls cheaper than postcards, built a 60,000 kilometer long fibre optic backbone, crisscrossing the entire country. Reliance currently offers its services in 340 towns with its eight circle footprints; it also initiated mobile data services through its R-world mobile portal. This portal leverages the data capability of the CDMA 1X network. Integrated Service From the beginning, Reliance believed in providing integrated communication services to its customers. The company claims that it sells a greater number of handsets compared to those sold by market leader, Nokia. Large Distribution Network Reliance has created the largest chain of digital entertainment and communication stores – Reliance Web World. The company is also expanding its reach aggressively through retail outlets, sales agents and electronic recharge outlets. Other Competitors include include Vodafone, Idea Idea & TaTa DoCoMo DoCoMo along with other other minor players like Aircel, Spice, MTN etc having less than 10% combined market share.
3. Bargaining Power of Suppliers: Similar to buyer power, suppliers also exert pressure on companies. If there is only one or two supplier of the major raw material for any industry then suppliers can exert great pressure on the firms. The supplies in Mobile sectors primarily comprise of Switch Suppliers, Tower Service providers and the Handset providers. Network Equipments: There are limited numbers of Network Equipment providers like ZTE, Nokia Siemens, Ericsson, and Huawei. Due to increase in demand and limited suppliers the power of these suppliers are high and may impact the t he growth plan of the operators if supplies are not smooth.
Tower Providers: Though the new sharing technology has enhanced the utilization of towers i.e. now a single tower can be shared by many telecom players by keeping their transmitting and receiving antennas at different height and since they use different frequencies, as a result by keeping proper space between the antennas that is avoiding inter-frequency overlap ensures that tower is working at
its maximum output efficiency. But still the coverage remains a problem due to few Tower providers. The bargaining power of Tower providers if High. Handset Suppliers: Nokia, Samsung, LG, Sony, iPhone and numerous other players. The bargaining power of Handset Suppliers is less as they are also competing amongst themselves. As a result we see that because of inter rivalry existing between the handset suppliers they become fragmented and hence their bargaining power with the buyers decreases. From the above three suppliers we can make out that suppliers have high bargaining power in two cases (Network equipments & Tower Providers) but Handset providers have a low bargaining power. Thus we can say that the t he bargaining power of suppliers in this case is high.
4. Bargaining Power of Buyers: The power of buyers is the impact which the customers have on any industry. If there are few buyers and large number of supplies then buyers set the price. However we see that in case of Telecom Industry the buyers are in huge number and scattered throughout the country that is the buyers in this case are fragmented and as a result the power of buyers to bargain from the supplier decreases to a great extent. The end consumer has to accept the terms and condition (in this t his case the tariffs and other plans) offered by the firm. The customer is only benefited in case there is tough competitive rivalry within the firm. In telecom market, since the competitive structure is oligopolistic in nature a single firm cannot have any control over the market. Because of the price war that was started by entry of TATA DoCoMo all the other players in the market had to decrease the prices of their tariffs and hence customer was the one that benefited the most from this price war. However one more aspect that can be looked upon is that bargaining power of buyers has increased with increase in number of suppliers and also due to regulatory policies that are being setup by the TRAI (Telecom Regulatory Authority of India). The policy here being referred to is the number portability that was introduced in 2011. This enabled the users to switch their operator by keeping same number and thereby opt for a scheme that was more suitable to their pockets. However even with the number portability policy being implemented implemented by TRAI, it didn’t change the dynamics of their revenue system. Telecom in the present day holds low l ow brand loyalty and brand switching is becoming more and more a norm. This would be more rampant when the clearance of free transfer of number while changing the service takes place. The end user should now be targeted more like a retail customer than that of specialty goods.
5. Threat of Substitutes: In porter model substitute products refer to products of other industry. As more substitutes become available, the demand becomes more elastic since the customers have more choice. Also the presence of substitutes constraints the ability of firms in industry to raise price. In the recent years with the advent of internet into the domain of mobile, the demarcation between the two sectors has faded. As high speed internet is made available on the mobile phones the role of phone calls and short messaging services will diminish, which are a major source of revenue for the telecom companies in India. The use of software like SKYPE and Gtalk will be the order of the day. Recently even social networking websites such as Facebook has come up with video chat options and Google recently came up with a VoIP service which enables a user to send SMS and call other person right from his gmail account by installing a small add-on software which is also available free of cost. The software works similar to a phone which can be recharged with amount and can be used in similar way as a mobile phone is being used. This has created a new theatre for the telecom companies to look into for revenue generation because if they are not prepared the losses due to the inclusion of internet based communication devices would be a lot. Along with substitutes available there is always a threat from a different technology such as CDMA (Code Division Multiple Access). This technology has got higher initial setup cost but maintenance cost is very low as compared to the GSM model. Also the capacity to more number of users is more in case of CDMA. This technology is not much of success in India, however it is used in many developed countries including Japan where in the major market has been captured by CDMA players. Initially when this technology was introduced it had several technical glitches, however with passage of time this technology (CDMA) was trimmed to better version and since then has been providing tough competition to its age old rival – GSM. Airtel also faces threat of substitution from different products. Airtel operates in mobile telephony and the substitutes of mobile telephony are landlines, broadband and internet. Major chunk of India’s
landline is under state owned BSNL and MTNL. However since the sector has been opened to the private players by the t he government of India, even Airtel has started up with its fixed landline services. In case of internet service Airtel has started up with its own internet services such as 3G internet in order to retain customers. Hence we see that Airtel is also giving a tough fight to the substitutes that are trying to penetrate tthe he wireless market.
HR CHALLENGES IN RECRUITMENT Recruitment is a function that requires business perspective, expertise, ability to find and match the best potential candidate for the organization, diplomacy, marketing skills (as to sell the position to the candidate) and wisdom to align the recruitment processes for the benefit of the organization. The HR professionals – handling the recruitment function of the organization- are constantly facing new challenges. The biggest challenge for such professionals is to source so urce or recruit the best people peo ple or potential candidate candid ate for the organization. organizati on. In the last few years, the job market has undergone some fundamental changes in terms of technologies, sources of recruitment, competition in the market etc. In an already saturated job market, where the practices like l ike poaching and raiding raid ing are gaining momentum, HR professionals are constantly cons tantly facing new challenges challen ges in one of their most important impo rtant functionrecruitment. They have to face and conquer various challenges to find the best candidates for their organizations.
The major challenges faced by the HR in recruitment are:
Adaptability to globalization – The HR professionals are expected and required to keep in tune with the changing times, i.e. the changes taking place across the globe. HR should maintain the timeliness of the process Lack of motivation – Recruitment is considered to be a thankless job. Even if the organization is achieving results, HR department or professionals are not thanked for recruiting the right employees and performers. Process analysis – The immediacy and speed of the recruitment process are the main concerns of the HR in recruitment. The process should be flexible, adaptive and responsive to the immediate requirements. The recruitment process should also be cost effective. Strategic prioritization – The emerging new systems are both an opportunity as well as a challenge for the HR professionals. Therefore, reviewing staffing needs and prioritizing the tasks to meet the changes in the market has become a challenge for the recruitment professionals.
Liberalization and reforms in Telecom sector since early 1990's till date are briefed below: 1991-92:
1. On 24th July 1991, Government announced the New Economic Policy. 2. Telecom Manufacturing Equipment license was delicensed in 1991. 3. Automatic foreign collaboration was permitted with 51 per cent equity by the collaborator. 1992-93:
Value added services were opened for private and foreign players on franchise or license basis. These included cellular cell ular mobile phones, radio paging, p aging, electronic mail, voice mail, mail , audio text services, videotext services, data services using VSAT's, and video conferencing. 1994-95:
1. The Government announced a National Telecom Policy 1994 in September 1994. It opened basic telecom services to private participation including foreign investments. 2. Foreign equity participation up to 49 per cent was allowed in basic telecom services, radio paging and cellular mobile. For value added services the foreign equity cap was fixed at 51 per cent. 3. Eight cellular licenses for four metros were finalized. 1996-97:
1. TRAI was set up as an autonomous body to separate the regulatory functions from policy formulations and operational o perational functions. functions . 2. Coverage of the term "infrastructure" expanded to include telecom to enable the sector to avail of fiscal incentives such as tax holiday and concessional duties. 3. An agreement between Department of Telecommunication (DoT) and financial institutions to facilitate funding of cellular and basic telecom projects. 4. External Commercial Borrowing (ECB) limits on telecom projects made flexible with an increased share from 35 per cent to 50 per cent of total project cost. 5. Internet Policy was finalized. 1998-99:
FDI up to 49 per cent of total equity, subject to license, permitted in companies providing Global Mobile Personal Communication (GMPC) by satellite services. 1999-00 1. National Telecom Policy 1999 was announced which allowed multiple fixed Services operators and opened long distance services to private operators. 2. TRAI reconstituted: clear distinction was made between the recommendatory and regulatory functions of the Authority. 3. DOT/MTNL was permitted to start cellular mobile telephone service. 4. To separate service providing functions from policy and licensing functions, Department of Telecom Services was set up. 5. A package for migration from fixed license fee to revenue sharing offered to existing cellular and basic service providers. 6. First phase of re-balancing of tariff structure started. STD and ISD charges were reduced by 23 per cent on an average. 7. Voice and data segment was opened to full competition and foreign ownership increased to 100 per cent from 49 per cent previously. 2000-01:
1. TRAI Act was amended. The Amendment clarified and strengthened the recommendatory power of TRAI, especially with respect to the need and timing of introduction of new services provider, and in terms of licenses to a services provider.
2. Department of Telecom Services and Department of Telecom operations corporatized by creating Bharat Sanchar Nigam Limited. 3. Domestic long distance services opened up without any restriction on the number of operators. 4. Second phase of tariff rationalization started with further reductions in the long distance STD rates by an average of 13 per cent for different distance slabs and ISD rates by 17 per cent. 5. Internet Service Providers were given approval for setting up of International Gateways for Internet using satellite as a medium in March 2000. 6. In August 2000, private players were allowed to set up international gateways via the submarine cable route. 7. The termination of monopoly of VSNL in International Long Distance services was antedated to March 31, 2002 from March 31, 2004. 2001-02:
1. Communication Convergence Bill, 2001 was introduced in August 2001. 2. Competition was introduced in all services segments. TRAI recommended opening up of market to full competition and introduction of new services in the telecom sector. The licensing terms and conditions for Cellular Mobile were simplified to encourage entry for operators in areas without effective competition. 3. Usage of Voice over Internet Protocol permitted for international telephony service. 4. The five-year tax holiday and 30 per cent deduction for the next five years available to the telecommunication sector till 31st March 2000 was reintroduced for the units commencing their operations on or before 31st March 2003. These concessions were also extended to internet services providers and broadband networks. 5. Thirteen ISP's were given clearance for commissioning of international gateways for Internet using satellite medium for 29 gateways. 6. License conditions for Global Mobile Personal Communications by Satellite finalized in November 2001. 7. National Long Distance Service was opened up for unrestricted entry with the announcement of guidelines for licensing NLD operators. Four companies were issued Letter of Intent (LOI) for National Long Distance Service of which three licenses have been signed. 8. The basic services were also opened up for competition. 33 Basic Service licenses (31 private and one each to MTNL and BSNL) were issued up to 31stDecember 3 1stDecember 2001. 9. Four cellular operators, one each in four metros and thirteen were permitted with 17 fresh licenses issued to private companies in September/October 2001. The cell phone providers were given freedom freed om to provide, within their area of operation, o peration, all types of mobile services equipment, including circuit and/or package switches that meet the relevant International Telecommunication Union (ITU)/ Telecom Engineering Centre (TEC) standards. 10. Wireless in Local Loop (WLL) was introduced for providing telephone connection in urban, semi-urban and rural areas. 11. Disinvestment of PSU's in the telecom sector was also undertaken during the year. In February 2002, the disinvestment of VSNL was completed by bringing down the government equity to 26 per cent and the management of the company was transferred to Tata Group, a strategic partner. During the year, HTL was also disinvested. 12. Government allowed CDMA technology to enter the Indian market. 13. Reliance, MTNL and Tata were issued licenses to provide the CDMA based services
in the country. 14. TRAI recommended deregulating regulatory intervention in cellular tariffs, which meant that operators need no longer have prior approval of the regulator for implementing tariff plans except under certain conditions. 2002-03
1. International long distance business opened for unrestricted entry. 2. Telephony on internet permitted in April April 2002. 3. TRAI finalized the System of Accounting Separation (SAS) providing detailed accounting and financial system to be maintained by telecom service providers. 2003-04
1. Unified Access Service Licenses regime for basic and cellular services was introduced in October 2003. This regime enabled services providers to offer fixed and mobile services under one license. Consequently 27 licenses out of 31 licenses converted to Unified Access Service Licenses. 2. Interconnection Usage Charge regime was introduced with the view of providing termination charge for cellular services and enable introduction of Calling Party Pays regime in voice telephony segment. 3. The Telecommunication Interconnection Usage Charges Regulation 2003 was introduced on 29th October 2003 which covered arrangements among service providers for payment of Interconnection Usage Charges for Telecommunication Services and covered Basic Service that includes WLL (M) services, Cellular Mobile Services, and Long Distance Services (STD/ISD) throughout the territory of India 4. The Universal Service Obligation fund was introduced as a mechanism for transparent cross subsidization of universal access in telecom sector. The fund was to be collected through a 5 per cent levy on the adjusted gross revenue of all telecom operators. 5. Broadcasting notified as Telecommunication services under Section 2(i)(k) of TRAI Act. 2004-05:
1. Budget 2004-05 proposed to lift the ceiling from the existing 49 per cent to 74 per cent as an incentive to the cellular operators to fall in line with the new unified licensing norm. 2. 'Last Mile' linkages permitted in April 2004 within the local area for ISP's for establishing their own last mile to their customers. 3. Indoor use of low power equipments in 2.4 GHz band de-licensed from August 2004. 4. Broadband Policy announced on 14th October 2004. In this policy, broadband had been defined as an "always-on" data connection supporting interactive services including internet access with minimum download speed of 256 kbps per subscriber. 5. The Telecommunications (Broadcasting and Cable Services) Interconnection Regulation 2004 was introduced on 10th December 2004. 6. BSNL and MTNL launched broadband services on 14th January 2005. 7. TRAI announced the reduction of Access Deficit Charge (ADC) by 41 per cent on ISD calls and by 61 per cent on STD calls which were applicable from 1st February 2005. 2005-2006
1. Budget 2005-2006 cleared a hike in FDI ceiling to 74 per cent from the earlier limit of 49 per cent. 100 per cent FDI was permitted in the area of telecom equipment manufacturing and provision of IT enabled services. 2. Annual license fee for National Long Distance Distance (NLD) as well as International Long Distance (ILD) licenses reduced to 6 per cent of Adjusted Gross Revenue (AGR) with effect from 1st January 2006. 3. BSNL and MTNL launched the 'One-India Plan' with effect from 1st March 2006 which enable the customers of BSNL and MTNL to call from one end of India to other at the cost of Rs. 1 per minute, any time of the day to phone. 4. TRAI fixed Ceiling Tariff for International Bandwidth, Ceiling Tariff for higher capacities reduced by about 70 per cent and for lower capacity by 35 per cent. 5. Regulation on Quality of Service of Basic and Cellular Mobile Telephone Telephone Services 2005 introduced on 1st July 2005. 6. BSNL announced 33 per cent cent reduction in call charges for all the countries for international calls. 7. Quality of Service (Code of Practice for Metering and Billing Accuracy) Regulation 2006 introduced on 21st March 2006. 11th plan (2007-20012) (2007-20012)
FDI in Telecom sector has increased in recent years with value of 81.62 billion with share of 10% in total inflow during January 2000 to June 2005. This is mainly in telecom services and not in telecom manufacturing sector. Therefore, it is essential to enhance the prospect for inflow of increased incr eased funds. The NTP 1999 sought to promote pr omote exports of telecom equipments and services. But till date export of telecom equipment remains minimal. Most of the state-of-the-art telecom equipments including mobile phones are imported from abroad. There is thus immense potential for indigenous manufacturing in India. Certain measures like financial packages, formation of a telecom export promotion council, creation of integrated facilities for telecom equipment through SEZ and encouraging overseas vendors to set up facilities in India, are required for making India a hub for telecom equipment manufacturing and attract FDI. The telecom sector has shown robust growth during the past few years. It has also undergone a substantial change in terms of mobile versus fixed phones and public versus private participation. The following table and discussions from the report of the working report on the telecom sector for the 11th plan (2007-2012) will show the growth of telecom sector since 2003
Recent Trends in Recruitment in telecom industryThe following trends are being seen in recruitment : OUTSOURCING
In India, the HR processes are being outsourced from more than a decade now. A company may draw required personnel from outsourcing firms. The outsourcing firms help the organization by the initial screening of the candidates according to the needs of the organization and creating a suitable pool of talent for the final selection by the organization. Outsourcing firms develop their human resource pool by employing people for them and make available personnel to various companies as per their needs. In turn, the outsourcing firms or the intermediaries charge the organizations for their services.
Advantages of outsourcing are:
Company need not plan for human resources much in advance. Value creation, operational flexibility and competitive advantage turning the management's focus to strategic level processes of HRM Company is free from salary negotiations, weeding the unsuitable resumes/candidates. Company can save a lot of its resources and time
POACHING/RAIDING “Buying talent” (rather than developing it) is the latest mantra being followed by the organizations today. Poaching means employing a competent and experienced person already working with another reputed company in the same or different industry; the organisation might be a competitor in the industry. A company can attract talent from another firm by offering attractive pay packages and other terms and conditions, better than the current employer of the candidate. But it is seen as an unethical practice and not openly talked about. Indian software and the retail sector are the sectors facing the most severe brunt of poaching today. It has become a challenge for human resource managers to face and tackle poaching, as it weakens the competitive strength of the firm.
E-RECRUITMENT Many big organizations use Internet as a source of recruitment. E- recruitment is the use of technology to assist the recruitment process. They advertise job vacancies through worldwide web. The job seekers send their applications or curriculum vitae i.e. CV through e mail using the Internet. Alternatively job seekers place their CV’s in worldwide web, which can be drawn by prospective employees depending upon their requirements. Advantages of recruitment are:
Low cost. No intermediaries Reduction in time for recruitment. Recruitment of right type of people. Efficiency of recruitment process.
Training and Development in Telecom Sector Telecom is one of the fastest growing sectors in India with a growth of 21% and revenue of Rs 86,720 crores in the year 2006. The sector is expected to grow over 150% by 2012. With increase in competition between the major players like BSNL, MTNL, Hutchison Essar, BPL, Idea, Bharti Tele services, Tata, etc, the requirement for mobile analysts, software engineers, and hardware engineers for mobile handsets has increased. However, holding an engineering degree is not enough to survive in the Telecom Sector. There is constant need of updating of knowledge, skills, and attitudes.
With this rapid growth in Telecom Sector, the need for trained professionals in bound to rise and so is the training need. The total training market in Telecom Sector is estimated to be Rs 400 crores. Many top players are spending a huge amount on training and development, for example BSNL alone spends more than 100 crore on training and development of its employees through the Advanced Level Telecommunications Training Centre (ALTTC) and 43 other regional training institutes. Reliance has also established Dhirubhai Ambani Institute of Information and Communication Technology. In addition to that, Bharti has also tied-up with IIT Delhi for the Bharti School of Telecommunication Technology and Management. With the increase in competition, availability of huge amount of information through internet, magazines, newspapers, TV, etc, and increased awareness among customers, the demand to impart proper training in non-technological areas like customer care and marketing has increased too. Rapid technological changes, network security threat, mobile application development, growing IP deployment in the sector have brought back the training and development in the priority catalogue. Training Institutes Institutes o o o o o o o o o o o o o o o o o o o o o o o
Some of the major training institutes in Telecom Sector are: Bharat Ratna Bhim Rao Ambedkar Institute of Telecom Training National Academy of Telecom, Finance, and Management Man agement Advanced Level Telecom Training Centre Usha martin Academy of Communication Technology Initiatives Dhirubhai Ambani Institute of Information and Communication Technology Symbiosis Institute of Telecom Management Amity Institute of Telecom Technology and Management Bharti School of Telecommunication Technology and Management Preferred Training methods On-the-job training Brainstorming sessions Distant learning Workshop Short-term interactive sessions Seminar Online eLearning CBT training program Computer Lab Work Group study Instructor lead class room training Training Courses and Programs Basic Course in Mobile Communication
o o o o o o o o o
Symbian OS, the Mobile Operating System Binary Runtime Environment for Wireless Diploma in Mobile Communication Diploma in Wireless Technologies Foundation Course in Mobile Communication Advanced Diploma in Mobile Communication and Software Technology Internet Protocol Multimedia Subsystem ,IMS Certificate Course in Mobile Communication Voice Over IP
Compensation Entry level compensation
The sector is offering openings in banking, insurance, capital market, venture capital, mutual funds, bonds, commodities markets, etc. Compensation provided to fresh management graduates is also very lucrative. The sector is open for CA, CS, accountants, MBA in finance and commerce graduates.
Effective Communication Skills
Sound Technical Knowledge
Strong Commitment Level
Strong Analytical Skills
Apart from pay packages marketing people also get high incentives and perks. The industry provides for special allowances such as annual bonus, house rent allowances, mobile allowances, transportations, travel leaves, paid vacations, etc.
Figure: Average Salary offered in Indian Telecommunication Sector for Entry Level Jobs
Managerial level compensation
Telecommunication provides for excellent growth opportunities. In the global competitive environment experienced people have an upper hand in selecting an organization. Organizations need to offer most competitive packages and heavy perks to attract and retain the talented work force. Effective communication skills, good analytical skills and sound technical knowledge are must to have a respectable position in telecommunication sector. Organizations such as Idea Cellular, Tata Teleservices, Reliance Communications, Bharti Airtel, Nokia, Siemens, Ericson, Motorola, etc are advancing their technologies and providing most competitive compensation packages. People working in telecommunication sector are asked to work at stretch and in pressure. Also, the level of experience determines one’s level of compensation package and position in the industry. ind ustry.
Figure: Average Salary offered in Indian Telecommunication Sector for Managerial Level Positions
Performance appraisal in call centre Annual pay was defined to include base pay plus all pay for performance, such as individual commissions, group bonuses, and profit sharing, but excluded any overtime pay. On average, managers reported that the typical customer service agent earned INR 114,380 in 2004. This translated into $2,539 in US$ (2004). Pay levels were 30 percent higher in international centres (INR 121,444, US$2,687) compared to domestic centres (INR 94, 861, US$2,108). We found that there was considerable use of performance-based pay in both the international and domestic centres. While 17.5 percent of pay is performance-based in international call centres, the comparable figure is about 15.5 percent in domestic call centres. The performance of call centres depends importantly on the skills, abilities, and motivation not only of the frontline workforce, but also of supervisors and managers. The managers of call centres in this study have relatively high levels of formal education and experience in the industry. Over two-thirds of the managers in this study reported having a post-graduate college degree. Almost one-third of the managers have more than ten years of tenure with the same company, while another 62 percent have between one and ten years of service. Turning to managerial, we found that call centre managers earned an average annual Salary of INR 368,722 (US $8,194), with an average of INR 388,728 (US $8,638) in international centres and INR 293,142 (US $6,514) in centres serving the domestic market. For supervisors, pay averaged INR 191,405, with INR 222,101 in international centres and INR 146,541 in domestic centres.
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http://www.indianmba.com/Faculty_Column/FC701/fc701.html
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http://studygalaxy.com/ordinaryview2.php?rep=150
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http://traininganddevelopment.naukrihub.com/training-scenario/telecom/
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http://payroll.naukrihub.com/compensation/indian-industry/it-sector/entry-level- compensation.html
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http://payroll.naukrihub.com/compensation/indian-industry/telecommunication- sec ector tor /manageme /managementnt- l eve vell- compe compensation.ht nsation.ht ml
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