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    Market Potential for Broadband Services in the

    Small and Medium Enterprises in the Bangalore

    Metropolitan Region

    A DISSERTATION SUBMITTED IN PARTIAL FULFILLMENT OF

    THE REQUIREMENTS FOR THE AWARD OF MBA DEGREE OF

    BANGALORE UNIVERSITY.

    BYMOHSIN MEMON

    Reg. Number: 05XQCM6047

    UNDER THE GUIDANCE OF

    DR K V PRABHAKAR

    SENIOR PROFESSOR, MPBIM, BANGALAORE

    M P BIRLA INSTITUTE OF MANGEMENT

    (ASSOCIATE BHARATIYA VIDHYA BHAVAN)

    43, RACE CORUSE ROAD, BANGALORE 560001

    MAY 2007

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    DECLARATIONI hereby declare that this dissertation is the result of research work

    carried out by me under the guidance of Dr K. V. Prabhakar, Senior

    Professor, M. P. Birla Institute of Management, Bangalore.

    I also declare that this dissertation is the result of my own efforts and has

    not been submitted to any other university or institution for the award of

    Degree/Diploma/Fellowship or other similar title. .

    Place: Bangalore

    Date: (Mr. Mohsin Memon)

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    CERTIFICATE

    I hereby certify that the research work embodied in this

    dissertation entitled "Market Potential for Broad band Services in

    Small and Medium Enterprises in Bangalore Metropolitan Region

    has been carried out by Mr. MOHSIN MEMON under my

    guidance and supervision.

    Place: Bangalore (Dr.K.V.Prabhakar)

    Date: (Research Guide)

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    CERTIFICATE

    This is to certify that this dissertation entitled "MarketPotential for Broad Band Services in Small and MediumEnterprises in Bangalore Metropolitan Region, is an offshoot

    of research work carried out by Mr. Mohsin Memon, under the

    guidance and supervision of Dr. K.V. Prabhakar, Senior

    Professor, MPBIM, and Bangalore.

    Place: Bangalore (Dr. Nagesh Malavalli)

    Date: Principal

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    ACKNOWLEDGEMENT

    I express my profound gratitude to all those who have been helpful

    in the completion of the dissertation work. I thank Prof. Nagesh Malavalli,

    Principal, M. P. Birla Institute of Management, Bangalore for his academic

    support. I wish to place on record my deep sense of gratitude to

    Dr.K.V.Prabhakar for his guidance throughout the period of investigation

    andpreparation of this dissertation.

    I would like to thank all the respondents for having patiently

    answered the questionnaire and giving their time for me. I would like to

    thank my friends for their valuable suggestions and especially

    PRABHAKAR JHA (my junior) for his co operation through out project.

    Place: Bangalore (Mr. Mohsin Memon)

    Date:

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    C O N T E N T S

    Serial no. Particulars Page no.

    1 Declaration 02

    2 Certificate 03

    3 Certificate 04

    4 Acknowldgement 05

    5 Executive summary 07-10

    6 Chapter 1 -Introduction 11

    7 Chapter 2- An overview of broadband services 12-13

    8 Chapter 3-Profile of the companies. 14-159 Chapter 4-General information about respondents 16

    10 Chapter 5- Research 17-18

    11 Chapter 6-Data analysis and inferences. 19-27

    12 Chapter 7-Summary of major research finding 27

    13 Chapter 8-Recommendations 28

    14 annexure

    bibliography 29

    websites and journals 30

    questionaire 31-33

    Direction for further research 34

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    EXECUTIVE SUMMARY

    The companies that survive the longest are the ones that work out whatThey can uniquely give to the world. Not just growth or money but their excellence.

    Among the various modes of communication, Internet is the fastest and

    probably the cheapest. The term Broadband refers to any type of transmission technique

    that carries several data channels over a common wire. There are various players inindustry have always been in the forefront of technology and has revolutionized

    telecommunications with its world-class products and services. Like Bharti Tele-Ventures

    through its subsidiaries offers fixed line, long distance and broadband services, reliancecommunication is coming with fiber optical to make one more revolution is the industry ,

    while BSNL is continuing with high speed connection. .

    One of the important markets for broad band services is small and medium scale

    enterprise, and here I have taken into consideration Bangalore metropolitan region. There

    are various purposes of the services in the industry depending upon the nature of business.And player in the industry have provided different schemes according to their requirement.

    OBJECTIVE OF THE RESEARCH

    To understand market potential (small and medium scale enterprise) in respect of

    broadband services.

    To assess the requirement of the broad band services in small and medium enterprises.

    To identify the present dissatisfaction factor in respect of broadband services.

    To examine the factors stimulating the need for the broad band services.

    To identify the possible value addition in broad brand services

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    SIGNIFICANCE OF RESEARCH WORK

    1. This research work helps the service provider to know aboutmarket potential in respect of broadband services.

    2. To know the requirement of broadband services in small andmedium enterprises.

    3. This will help service provider to know the dissatisfaction factorof their customers that can be easily eliminated.

    4. To know what are the values that can be added in thebroadband services that will delight the customers .

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    MAJOR FINDINGS

    1.The major usages for the broadband service is for datatransfer (59%),

    2.Followed by voice conferencing (28%).

    3.BSNL is the major player in the industry covering63% of market share, followed by 31% AirTel and

    Reliance communication 6%.

    4.Most of SMEs uses 512 kbps (56%0 and 256 kbps(34%) for the business operation

    5.Almost half of SMEs spends Rs. 2500 to Rs.5000 onthe Broad band, while 21% and 26% spends on around

    Rs.5000 to Rs.1000, and Rs.500 to Rs. 1000respectively.

    6.More and less, all SME are satisfied with services.

    7.Major dissatisfaction factors:

    a.Varying speeds, these the major factor, that

    almost all the respondents are complainingabout.

    b.Sudden break is also leads to dissatisfactionamong the users

    8. More and less, all SME are satisfied with services

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    Recommendations

    Based on our research findings, the following

    recommendations emerge:

    1) The main recommendation that catches attention straightaway is

    the need and scope for enhancing awareness of broad band services

    and their benefits to business operations Many organization uses it

    but as facility not as utility.

    2) The scope for popularizing Customer Support/Services and the

    other Value Added Services, particularly ERP/CRM through

    publicizing their commercial viability through reduced

    costs/increased returns should be explored with research backup.

    3) Many organizations, which are currently employ broad band

    services in the business, are seeking high speed as over and above

    what is currently available, so there is potential for the high speed

    like 2mb etc.

    4) There is some dissatisfaction factors like, speed variation and

    disconnection The Company should focus on this critical factors.

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    CHAPTER 1

    INTRODUCTION

    All progress is born of enquiry. Doubt is better than over- confidence, for it leads to

    enquiry and enquiry leads to investigation- HOUSON MAXIM.

    Gone are the days of monopoly gone are the days of supernormal

    profit . Companies are shifting from the customer satisfaction to the mantra of

    customer delight in the battle field of market. Since todays market are saturated

    and market being very highly competitive, it is very necessary for every organization

    to analyze and understand the total market potential available to them. There is a

    need to capture the customers' perceptions and their satisfaction towards the

    broadband services provided by the company. The customers' perceptions are more

    significant than the market realities. The customers of the select organizations are

    corporate (small and medium scale enterprises). Thus it is very important to

    understand the precise requirements of the customers (and value addition thereof) for

    the broadband services.

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    CHAPTER 2

    AN OVERVIEW OF BROADBAND

    SERVICES

    Broadband is the word of the day. High-speed, high-capacity, always-on, interactiveservices are universally regarded as the future of telecommunications. The potential for

    broadband is enormous. The applications made possible, such as telemedicine, distancelearning, real time sign language interpreting and others, offer innovative ways to live,

    work and learn.

    Yet there is still a perception that broadband is about speed. Most discussions of thetechnology center around who is providing it and who isn't subscribing to it. Demand isreferred to as the biggest problem in broadband today. Services are available, but people

    are not signing up. It is said there is no "killer" application (killer app) to convince people

    they need broadband.

    This is true, there is no single killer app. In fact, there are countless applications that aretremendously valuable. For a patient in rural Georgia who needs specialized health care

    from an urban hospital, telemedicine is a killer app. For students in a low-income school

    district who have textbooks that are older than they are, distance learning that connects

    them to dazzling research and resources is a killer app. Broadband's power lies in the

    flexibility of the technology. It can be used by different people and communities toaddress different problems in different ways.

    What is Broadband?

    There are many competing definitions of broadband. The Federal Communications

    Commission (FCC) defines broadband (or high speed lines) as Internet services provided

    at speeds of at least 200 kilobits per second (Kbps) in one direction. TechNet, a group of

    high tech industry CEOs, places true broadband at 100 megabits per second (Mbps).Other estimates fall somewhere in between. But these speeds do not adequately define

    broadband. They are merely components.

    Broadband is high-speed, interactive, always-on, two-way communications provided bycable modems, telephone lines, satellites, fixed and terrestrial wireless, and fiber optics to

    the home. Broadband is notjust faster Internet, a better version of the 56 Kbps dial-up

    services that are utilized by the majority of Internet users. Such a definition is far too

    narrow.

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    Broadband is more appropriately defined as a connection platform, a gateway to

    information and services. It can be accessed from a home computer, a wireless handhelddevice and soon even accessed by household appliances. In fact, broadband is whatever

    the user wants it to be.

    Where is Broadband?

    Who has access to broadband? What areas of the country are the most and leastconnected? According to the Federal Communications Commission, broadband

    connections rose to 16.2 million access lines at the end of June 2002. 84% of the nation's

    zip codes had at least one broadband subscriber. The Yankee Group reported thatwireline broadband was available to 75% of U.S. households at the end of 2001 and

    estimated that figure would reach 85% at the end of 2002. But with this expanded

    deployment, only 10.4% of U.S. households used broadband in 2001.

    While deployment has increased, the access to broadband in the United States is still

    below that of many other countries. As of December 2001, 51.7% of households in SouthKorea, 19.7% of households in Canada and 13.4% of households in Sweden had access to

    broadband. The United States faces the potential of falling behind other countries in use

    of broadband for improving economic growth and delivery of social services.

    What barriers have caused the slow deployment and limited access? Economic

    uncertainty and regulatory complexity are two of the prime reasons. The

    telecommunications industry is currently suffering through a dramatic economic

    downturn, with huge financial shortfalls and the loss of hundreds of thousands of jobs. Insuch an environment, investment is curtailed and thus advanced services are not deployed

    because of their high costs. Second, and a partial cause of the economic problems, is a

    regulatory structure that creates disincentives and continues disparate treatment of broadband providers. With rules conceived for a voice and video world, broadband is

    limited to the slow rollout seen today.

    Beyond these issues, broadband is hampered by market failures. The market, by itsnature, does not serve all customers equally. Many individuals and communities are

    unable to access services because of geography, lack of basic technology and

    infrastructure, high subscription costs, and inaccessible platforms for people with

    disabilities. These factors lead to slow, uneven deployment and cause some communitiesnever to be served at all. In these areas, public policy intervention is necessary to ensure

    universal, affordable access to broadband. Measures designed to bring services and

    knowledge to communities where the market is not working, such as investmentincentives, government grant programs, and subsidies are an important component of the

    overall approach to broadband deployment.

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    CHAPTER 3

    PROFILE OF THE COMPANIES.

    Bharti Airtel Limited

    The company is a part of Bharti Enterprises, and is India's leading provider oftelecommunications services. The businesses at Bharti Airtel have been structuredinto three individual strategic business units (SBUs) - mobile services, broadband &

    telephone services (B&T) & enterprise services.

    The mobile services group provides GSM mobile services across India in 23 telecomcircles, while the B&T business group provides Broadband & telephone services

    in 90 cities. The Enterprise services group has two sub-units - carriers (long distance

    services) and services to corporates. All these services are provided under the Airtelbrand.

    Bharat Sanchar Nigam Ltd.

    Bharat Sanchar Nigam Ltd. formed in October, 2000, is World's 7th largest

    Telecommunications Company providing comprehensive range of telecom services inIndia: Wire line, CDMA mobile, GSM Mobile, Internet, Broadband, Carrier service,

    MPLS-VPN, VSAT, VoIP services, IN Services etc. Within a span of five years it has

    become one of the largest public sector unit in India.

    Reliance Communications Limited

    Reliance Communications is the flagship company of the Anil DhirubhaiAmbani Group (ADAG) of companies. Listed on the National Stock Exchange and

    the Bombay Stock Exchange, it is Indias leading integrated telecommunication

    company with over 30 million customers.

    Our business encompasses a complete range of telecom services covering mobile andfixed line telephony. It includes broadband, national and international long distance

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    services and data services along with an exhaustive range of value-added services and

    applications. Our constant endeavor is to achieve customer delight by enhancing the

    productivity of the enterprises and individuals we serve

    Sify Limited

    Sify is the only integrated end-to-end e solutions provider in India. We design and

    develop a host of customized eCommerce and Network Connectivity Solutions that

    connect critical business systems and offer a seamless data network directly with

    customers, suppliers, vendors and staff.

    By ensuring uninterrupted and timely flows of information, Sify solutions help in quicker

    decision making and sharpen your competitive edge by compressing time to market aswell as increase financial efficiencies that result from better supply chain management

    and lower inventories.

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    CHAPTER 4

    GENERAL INFORMATION ABOUT RESPONDENTS

    Travel agencies

    Tour Operator and operations encompass a wide variety of toursand packages ranging from Europe & U.S.A. , gulf countries and have been catering to

    the travel needs of tourists visiting India, Nepal, Bhutan, Tibet, Sri Lanka and Maldivesfrom all over the world. In order to deliver the extreme level of professional and

    personalized services a with state of the art technology, most of the have associate offices

    in India and abroad. We are recognized by the Government of India, Ministry of Tourism& Reserve Bank of India and also members of various National & International

    Associations like IATO, TAAI, FHRAI, PATA COTAL, ASTA, KAT etc., many of

    them offer right from the basic planning to execution, professionalism and yet mostpersonalized service from ticketing to cars and coaches, stay in hotels trips, packages on

    simply meet and greet at the Airports.

    Software & IT :

    Bangalore is known for the software and it industry there are so many small and mediumscale enterprises in the industry.

    Their primary use for the broad band is:

    data transfer Voice Security ERP & CRM Software development

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    CHAPTER 5

    PROBLEM STATEMENT:

    To what extent the select corporate enterprises (small and medium) need broadband

    services and the magnitude of their utilization?

    RESEARCH OBJECTIVES:

    Following are the main objectives of the research:

    To understand market potential (small and medium scale enterprise) in respect

    of broadband services.

    To assess the requirement of the broad band services in small and medium

    enterprises.

    To identify the present dissatisfaction factor in respect of broadband services.

    To examine the factors stimulating the need for the broad band services.

    To identify the possible value addition in broad brand services.

    HYPOTHESES:

    H1: The need for broadband services and the application areas thereof

    Are associated.

    H2: The satisfaction/dissatisfaction of broadband services is a function of various

    Variables.

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    RESEARCH DESIGN:

    The research investigation is both qualitative and quantitative. We seek to collect the

    data through the structured questionnaire as well as through the personal interaction

    with the key personnel of the company chosen and the select medium and small

    enterprises. The scope of the research investigation is restricted to select medium and

    small enterprises in Bangalore city and the selection of these enterprises will be on

    stratified random sampling method. Initially, we plan to select 50 units with a

    possibility of increasing the sample size depending on the data adequacy and data

    congruence. The data so collected will be subject to quantitative treatment with the

    help of statistical tools and qualitative treatment with the help of rating scales; the

    inferences will be drawn accordingly.

    RESEARCH LIMITATIONS:

    Since the scope of this research investigation is restricted to Bangalore City and

    to a limited sample size of the units, the problem of generalization is obvious

    Time and resource constraints

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    CHAPTER 6

    DATA ANALYSIS AND INFERENCES

    HYPOTHESIS TESTING:

    H0: the industries use and broad bands width areindependent

    H1: the industrys use and broad bands width aredependent

    observed expected O - E (O - E) / E % of chisq

    128 540.160 -412.160 314.492 0.86

    128 540.160 -412.160 314.492 0.86

    256 540.160 -284.160 149.487 0.41

    256 540.160 -284.160 149.487 0.41

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    256 540.160 -284.160 149.487 0.41

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    256 540.160 -284.160 149.487 0.41

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    256 540.160 -284.160 149.487 0.41256 540.160 -284.160 149.487 0.41

    256 540.160 -284.160 149.487 0.41

    512 540.160 -28.160 1.468 0.00

    512 540.160 -28.160 1.468 0.00

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    512 540.160 -28.160 1.468 0.00

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    512 540.160 -28.160 1.468 0.00

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    1024 540.160 483.840 433.392 1.19

    1024 540.160 483.840 433.392 1.19

    1024 540.160 483.840 433.392 1.19

    2048 540.160 1507.840 4209.089 11.51

    2048 540.160 1507.840 4209.089 11.51

    2048 540.160 1507.840 4209.089 11.51

    2048 540.160 1507.840 4209.089 11.51

    2048 540.160 1507.840 4209.089 11.51

    2048 540.160 1507.840 4209.089 11.51

    2048 540.160 1507.840 4209.089 11.51

    54016 54016.000 0.000 36554.616 100.00

    36554.62 chi-square

    98 df

    0.00E+00 p-value

    chi square- tabulated - 74.05

    Since tabulated value is less than Chi square calculatedvalue so null hypothesis rejected.

    Therefore industrys uses are dependent on broadbandwidth.

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    MARKET SHARE OF THE VARIOUS UNITSMARKET SHARE

    BSNL

    AIRTEL

    REL COMMN

    SIFY

    Name of the

    unitMARKET

    SHARE

    BSNL 63

    AIRTEL 31REL COMMN 6

    SIFY 0

    Inference:

    BSNL is controlling the major market share (63%) followed by AirTel (31%) then

    reliance communication (6%).

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    UTILIZATION OF BANDWIDTH:

    Inference:

    Major purposes of the usages of the broad band among the corporate is 512 kbps ,

    followed by 256 kbps. There is also scope for the 2mb to 8mb range.

    bandwidth with present connection %

    64kbps 0

    128kbps 0

    256 kbps 34

    512kbps 56

    1mb 3

    2mb or more 7

    %

    64kbps

    128kbps

    256kbps

    512kbps

    1mb

    2mb or more

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    SPENDING ON THE BROAD BAND:

    %

    500-1000

    1000- 2500

    2500-5000

    5000-10000

    Inference: Almost half of SMEs spends RS. 2500 to 5000 on the Broad band, while21% and 26% spends on around Rs. 5000 to 1000, and RS. 500 to 1000 respectively.

    expenditure per month %500-1000 4

    1000- 2500 26

    2500-5000 495000-10000 21

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    USES

    %

    data transfer

    voice conferencing

    video conferencingother( ERP/CRM)

    primary use %

    data transfer 59voice conferencing 28

    video conferencing 4

    other( ERP/CRM) 9

    Inference:

    The major usages for the broadband service is for data transfer (59%), followed by voiceconferencing (28%).

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    SATISFACTION/DISSATISFACTION:

    attribute %

    highly satisfied 48

    satisfied 40

    not satisfied 12

    Inference: More or less, all SME aresatisfied with the services.

    MAJOR DISSATISFACTION FACTORS:

    Varying speeds that almost all the respondents are complainingabout.

    Sudden break is also leads to dissatisfaction among the users.

    %

    highly satisfied

    satisfied

    not satisfied

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    CHAPTER 7

    Summary of major research findings:

    The major usages for the broadband service is for data transfer (59%),

    8. Followed by voice conferencing (28%).

    9. BSNL is the major player in the industry covering 63% of market share, followedby 31% AirTel and Reliance communication 6%.

    10.Most of SMEs uses 512 kbps (56%0 and 256 kbps (34%) for the businessoperation

    11.Almost half of SMEs spends 2500 to 5000rs on the Broad band, while 21% and26% spends on around 5000 to 1000 rs, and 500 to 1000 rs respectively.

    12.More and less, all SME are satisfied with services.

    13.Major dissatisfaction factors:

    a. Varying speeds, these the major factor, that almost all the

    respondents are complaining about.b. Sudden break is also leads to dissatisfaction among the users

    14.More and less , all SME are satisfied with services

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    Chapter 8:

    RECOMMENDATIONS:

    Based on our research findings, the following recommendations emerge:

    1) The main recommendation that catches attention straightaway is the need and scope

    for enhancing awareness of broad band services and their benefits to business

    operations Many organization uses it but as facility not as utility.

    2) The scope for popularizing Customer Support/Services and the other Value Added

    Services, particularly ERP/CRM through publicizing their commercial viabilitythrough reduced costs/increased returns should be explored with research backup.

    3) Many organizations, which are currently employ broad band services in the business,are seeking high speed as over and above what is currently available, so there ispotential for the high speed like 2mb etc.

    4) There are some dissatisfaction factors like, speed variation and disconnection Thecompany should focus on this critical factors.

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    ANNEXURE

    1 Select Bibliography:

    Books:

    1.David Aaker A., (Market research),John Wiley and sons8th Edition, June 2003

    2.Luck and Rubin (marketing research) Tata Mc Graw HillsPublishing company.

    3. David Faulkner and Cliff Bowman (Essence ofCompetitive Strategy), PHI Publications 2000

    4. Nirmalya Kumar (Marketing As Strategy), Penguin

    Publications, 2006

    1.Johnson G and K Scholes (Exploring MarketingStrategy), PHI Publications, 2000

    2.Carol H Anderson and Juliam W Vincze (StrategicMarketing), Bizantra Publications 2007

    3.Joel R Evans and Barry Burman (Marketing),Bizantra Publications 2007

    8. A Parusaraman, Dhruv Grewal, and R Krishnan(Marketing Research). Bizantra Publications 2007

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    Websites used:

    www.indiamart.comwww.bangalore.com

    www.karnataka.comwww.indiacom.com

    www.airtel.com

    www.bsnl.com

    www.relianceada.com

    Journals: Journal of Marketing

    Marketing Mastermind

    Effective Executive

    Harvard Business Review

    Business World

    Business Standard Economic Times

    Catalyst (Business Line)

    Strategist (Business Standard)

    Journal of Strategic Management

    Journal of Strategic Marketing ( Back Volumes)Times Publications

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    2. QUESTIONNAIRE

    MARKET POTENTIAL FOR BROADBAND SERVICES IN SMALL ANDMEDIUM ENTERPRISES IN BANGALORE CITY

    I am a student of M P Birla Institute of Management, Bangalore pursuing MBA Program.

    As a part of MBA Curriculum, I am carrying out a research survey on 'Market Potentialfor Broadband Services in Small and Medium Enterprises in Bangalore city'. I requestyou kindly to give your responses to the questions listed below. I sincerely assure you

    that your responses will be kept strictly confidential and will be used only for academic

    purpose.

    MR. Mohsin Memon

    1) Name of the Organization:

    2). Type of business organization:

    3) No of employees working in the organization.

    [ ] 10-50 [ ] 50-200

    [ ] 200-500 [ ] More than 500

    4) Is your company using broadband?

    [ ] Yes [ ] No

    5) If no, do you intend to use the broadband?

    5(a) If yes, who is your service provider?

    [ ] Dish TV [ ] Sify

    [ ] Airtel [ ] BSNL

    [ ] Reliance communications [ ] other (please specify) ..

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    6) What is the current spending on the broadband you have?

    ...

    7) What is current band width you are using now?

    8) What are the uses of broadband which you possess?

    [ ] Data conferencing

    [ ] Voice conferencing

    [ ] Video conferencing

    9) Are you satisfied with the customer service provided by the service provided?

    1. Yes; 2. No (Please tick the appropriate one)

    10) If yes, how quickly the service is provided?

    11) If no, please specify the complaints you made to the service provider:

    12) What are your views on the complaints management of the service provider?

    13) What are the overall deficiencies which you notice in the services provided by the

    Services Provider?

    Please specify..

    .

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    14) What are the possible future requirements in respect of band width in your

    organization? (Say next year)

    Please specify

    15) What are the attributes you would like to add in your broad band services?

    Please specify

    .

    ...

    16). Does the broadband services improve the productivity of your organization?1. Yes; 2. No (Please tick the appropriate one)

    17). If yes, how does the broadband services improve the productivity of yourOrganization:

    18) Any suggestion you would like to make to your service

    provider

    .

    THANK YOU VERY MUCH FOR SPARING YOUR VALUABLE TIME..

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    3. DIRECTIONS FOR FURTHER RESEARCH

    The following are the fertile areas for future research:

    1) Customer Support Services.

    2) Brand awareness and customer satisfaction of the major industry players

    3) Possible value addition which the industry can do to increase usage of broadband in

    small and medium enterprises.

    ************************************************************************