Trends and Business Plan in Telecommunication Sector

Presented by
Ankur Rohilla (12DM029)
Aman Vijay (12DM017)
Ankit Sharma (12DM026)
Atul Makharia (12DM042)
Ishita Tuli (12DM057)
Janani Rengarajan (12DM059)

Under the guidance of

Prof. Sunil Sangra

Table of Contents
1. Trends in Telecommunication sector
2. 5 business ideas
3. Bharti Airtel Limited - Company overview
4. Products and services
4.1.
Products & Services description
4.2.
Competitors comparison
4.3.
Technology
4.4.
Future strategies
5. Market Analysis
5.1.
Market segmentation
5.2.
Market needs
5.3.
Industry analysis
5.4.
Main competitors
5.5.
SWOT analysis of the service
6. Strategy and Implementation
6.1.
Marketing strategy
6.1.1. Positioning statement
6.1.2. Promotion strategy
6.1.3. Distribution pattern
7. Technology integration
7.1.
ERP system cost
7.2.
Tiers of ERP cost
7.3.
ERP implementation cost
7.4.
SaaS ERP cost
7.5.
Cost of ERP
7.6.
APP development
7.7.
Toll tax scanner device
8. Financial Analysis
8.1.
Financial projections
8.2.
Revenue model
8.3.
Investment
8.4.
Key financial points
8.5.
Assumptions
9. Conclusion
9.1.
General Assumptions
9.2.
Challenges
10. References

Chapter 1 - Trends
The telecommunication sector has evolved into a more sophisticated long term segment over
the period of years. The following are the trends identified in the telecom sector:
1. Media Communication
Newspaper, company websites, e-cards
Tv Advertisements, ads in you tube videos
Televisions
Pay per click
Magazines
2. Going Green
E- newspapers
E- bills
E-books
E-brochures
3. Social communication
Fb, twitter, linkedin, google +
Paper click
Individual pages and communities in fb
4. Voice communication
Mobile phones, apps, gtalk, viber, smart phones
5. Mass communication
Public speeches
Campaigns
Journalism
Public relations
Broadcasting
Anshan
6. Non verbal communication
Emotional
Sign languages, postures, gestures
7. Written communication
Letters
Emails
Memos
Telegraghs
8. Cloud computing
Data sharing
Cyber security
9. Liberal communication
RTI (Right to info)
Liberal arts, paintings for social cause
10. IMC
E-commerce
11. ICT

 ERP
12. Innovation technology
Prototyping
Simulation
Data mining
13. Corporate communication
Intranet, bulletins
14. Audio visual communication
Smart tv
Video conf
Online web streaming
15. GPS
16. Zomato
17. Globalisation
18. Cultural convergence
19. Inter cultural adoption
20. Communicating through environment (colours, ambience, textures, wallpapers)
21. Personalized communication
IVR
Farmers getting information through sms
Bill enquiry through sms
Call centers
Online advertisement based on personal interests through tracking
22. Education
Online teaching
Educomp
Online exams
23. Outdoor marketing
Billboards, stickers, posters, banners
Search engines, blogs
Newsletters, classifieds ads,
24. Direct marketing
telemarketing, catalogs,
shopping channels, internet sales,
text messaging, fliers, coupons, direct selling,
grassroots/community marketing
25. morale communication
motivational speeches

Chapter 2 - 5 business ideas

Based on the above trends and integrating with other common sectors like education, we
came up with 5 major business ideas. They are as follows:
Online carpooling portal/website:

With the continuous increase in oil prices, travelling cost are now contributing a major
share in the total household expenditures. Therefore, carpooling could prove to be an
effective cost reducing idea.
The business idea is to come up with a web site/portal where in both the car owners and
ride-sharers can register. During registration, both the type of users has to enter their
details with ID proof (could be DL or voter ID). The website would contain two sets of
data. One set of data would be used by the car owner to enter their details: point of origin,
destination point, time, number of people traveling, preference for rides sharers
(male/females). In the same manner, the ride sharers have to share details regarding the
journey. The car riders would have to pay the car owners on the basis of predetermined
fixed per km prices. There would be real time updates on the website. The revenue
generation would be purely through advertisements on the web site.
Drawbacks:
Security for female employees was a major concern in this idea. As the crime rates are
rapidly increasing in present scenario, providing a secure trip to the commuters was a
difficult issue to address.
Confidentiality and credibility of the data was also a regard to look upon.
DTH newspaper
The idea is basically to introduce the daily newspaper service straight into the television
sets. E-reading is trend that is quite popular these days. So AIRTEL can introduce a
newspaper service in their DTH set top boxes with a minimal subscription fee. Since the
newspaper text would be opened on a television screen, visibility too, wont be an issue.
Drawbacks:
People might be reluctant to change to the new service as generally they feel comfortable
reading through papers and books rather than reading from a television or computer
screen for a longer time. Hence, this resistance might reduce the customer base and
narrow down the target segment which in turn will not lead to profitability.
All in one entertainment device for cars
Airtel can introduce an all-in-one entertainment device for cars, which would act as a
GPS device, a video watching device, and a music system. It can also be connected to
internet for browsing purposes and to download songs, videos and maps on the go,
thereby, reducing the hassle of having different devices for different purposes.
Drawbacks
As all these services are almost available in smart phones and the pace for smart phones
in India is still increasing, coming up with another similar service or device will not be
an attractive business.

 Smart driving license card

The business idea is to bring up a centralised system for generating license cards and to
increase the utility of the same. The License card can be used as an identity proof and the
new service will also allow the commuters to use it for paying toll charges and challans /
fine imposed for violating traffic rules by using the Airtel money service.
As there is always a need for convergence, convenience and faster service, this idea
seemed to be interesting, viable and need of the hour. Hence, this idea has been chosen
for further business plan.
All in one home wireless solution
Airtel can introduce an all in one wireless system which would take care of internet,
DTH connections and landline connections with a single router to cater to all the devices.
The device can use help of Wi-fi Signals to empower all the devices at once. It would
further lessen the cost of installation of a hefty network of wires in households.
Portal for interaction between students and companies
Now-a-days, Google and other search engines provide a lot of information regarding all
the business units, companies and various industry sectors. Because of many fake
websites, the credibility and accuracy of the information is lost. This makes it difficult
for the graduate and post graduate students to obtain useful and primary data about the
various companies while doing their projects.
The business idea is to build an online platform with a trusted source where all the
national and international companies can share their profile and other information. The
educational institutions can have collaboration with particular industries or companies
specific to their domain. The students can then post their questions and get the required
relevant details with accuracy. As many students are working on various projects during
their course curriculum, the organisation can make use of their ideas and encourage them
to work on certain projects on a short term basis also. This will help the organisations to
meet their objectives as well as the students to gain good knowledge and real time
experience. Confidentiality can be maintained by sharing the primary data only to the
colleges/institutions that have registered or collaborated.
Drawbacks
The companies might not accept to share their primary data to all the students or
institutions.
Confidentiality of the data after providing to the students is a big question to be
addressed.

After analysing the feasibility of various ideas and prioritizing them, Smart driving license
card has been chosen and the business plan along with marketing, technology integration
strategies, financial projections and cash flows has been made. For this process, Bharti Airtel
Limited is taken as our client.

Chapter 3 - Company Overview

Bharti Airtel Limited, commonly known as Airtel, is an Indian multinational
Telecommunications Services Company headquartered in New Delhi, India. It operates in 20
countries across the world and it has GSM network in all countries, providing 2G,3G and 4G
services depending upon the country of operation. Airtel is the worlds fourth largest mobile

telecommunication company by subscribers over 275 million as of recent data. Airtel also
provides fixed telephony, broadband and subscription television services.
Airtel is credited with pioneering the business strategy of outsourcing all of its
business operations except marketing, sales and finance and building the minutes factory
model of low cost and high volumes. Its network base stations and microwave links are
maintained by Ericsson and Nokia Siemens Network whereas IT support is provided by IBM.
In 2012, Bharti Airtel made a contract with Alcatel- Lucent for setting up an Internet protocol
access network across the country. This helped the consumers access internet at faster speed
and high quality internet browsing on mobile handsets.
Airtel also transformed the organisational structure as they expanded their portfolio.
The new structure has two distinct Customer Business Units with clear focus on B2C and
B2B segments.
Worldwide presence:

Coverage map of Bharti Airtel across 20 countries

Source: Wikipedia

Different services like 3G, 4G, Airtel money, Wifi, Smart Drive, Network Experience
centre are provided by Airtel and it has captured a large market till present day. It also
provides several other services like Telemedia, Digital Television, Enterprise business
solutions,Android based tablet and broadband connections. Airtel is the 6th most valued
brand according to an annual survey conducted by Brand Finance and The Economic Times
in 2010. It occupied around 20.62% market share in India at the end of November 2012.

Chapter 4
Products and Services
4.1. Product and Service Description

Driving licenses in India are issued by individual states via their "Regional Transport
Authorities/Offices" (RTA/RTO). The common "All India Permit" allows the licensee to drive
throughout the country. For obtaining a license to drive vehicles, the minimum age is 18.
Drivers have to appear for an oral or written test, depending on the state, to earn a learner's
licence, which is valid for 6 months. Drivers then have to pass a driving test to get a
permanent license. If the driver does not follow the traffic rules, then a fine is issued, known
as Challan and an endorsement is put on the license. An excessive number of endorsements
may lead to cancellation of license.
The current process could be innovated and made user friendly and more systematic
by using the communication trend of Information Communication Technology. Entire
process could be made simpler and transparent by implementation of centralised software.
Software could be built which can be controlled by the RTO. Smart License Card would
be generated. The software helps in the entire process of getting the license, providing the
available slot, processing of the fee needed, online written test of the rules and information of
the license holder. The software would also record entire information of the license holder.
Further, we make collaboration with Airtel Service Providers to avail the airtel Money
service.
A mobile application will be developed in such a way that it will be able to scan the chip on
the license card and the number will be recorded. In case of a fine or challan imposed on the
driver, the payment for the fine will be automatically transferred through Airtel Money
service.
Similarly, the same procedure can be used to pay toll fees as this would reduce the tiresome
and long waiting in queues and it makes the process much simpler and easy.
A separate online database will be created so that all the records can be tracked about each
individual. The number of times the driver is imposed upon a fine it will be automatically
updated in his record. The record would be available and transparent to everyone. This will
help in maintaining records of license holder of every state. In this way there could be a
systematic flow of information which would be cost effective and time efficient and it would
be very helpful to keep the records of criminals too.
The service of paying fine and toll fee using Airtel money service is open to all the
subscribers even if they use different network service provider.
Hence with this idea long complex procedure of licensing can be avoided and it would be
beneficial for the card holder, RTO officers, police officials and government.

4.2. Competitive Comparison

The online platform for issuing new license combines several features like online
application form, slot booking, written test and evaluation. This will remove all the
intermediaries like driving schools and broker agents to whom a separate commission has to
be paid. It makes the process more straight forward and transparent. All the RTO offices in
different cities will be integrated in the database. The candidate will be able to choose the

nearest city and perform the driving test during the time slot fixed while registration. As all
the details of the candidate are recorded in the database during registration, he will be able to
get his license immediately after the test is cleared. This will reduce time to a great extent and
provide much more convenience.
Similarly, the toll and fine payment made by using the Airtel money service will be an
extension of the existing service, thereby, provides a competitive edge to Airtel. As none of
the other telecom providers are providing this service at present, Airtel will have a first mover
advantage and this will help them to capture large amount of market share. Airtel has
around192 million subscribers in India as of July 2013 and a huge portion of them use
smartphones. So this application can be affordable and useful to a major population in India.
4.3. Technology
This service provides the integration of various services like online platform,
microcontroller based chip, mobile application for scanning the bar code, RFID scanner and
money transfer through mobile phones. It has all the latest technologies at a more convenient
and user friendly manner. The incorporation of latest technologies and trends provide higher
competitive edge among the other network providers.
4.4. Future strategies
The service can be expanded pan India making it a centralised process and it can be
operated on a long term strategy. A major need of the present day scenario- faster and quick
service in a convenient manner will be satisfied by this service. The whole of Indian market
segment, particularly the segment with smartphones and airtel subscribers will be targeted.
The service can be further expanded in the later stages with a card having a magnetic strip so
that the same card can be used as an identity proof as well as a debit card to swipe in petrol
pumps etc.

Chapter 5
Market Analysis
10.1.

Market Segmentation

The market has been segmented on the basis of three parameters

Demographic: Age 18 +
Behavioural: Product users Mobile users
People who own two- wheelers and cars
Geographical: Pan India
10.2.

Market Needs

One of the main aspects of the service provided by the company is payment at toll plazas
automatically through Smart Driving License Card. There is a dire need of a solution to the
problems faced by commuters who come across toll bridges. Millions of commuters pay toll
taxes every day. The waiting time at a toll bridge in Delhi/NCR is quite long. On an average,
a commuter has to wait for 15 minutes at the toll Plaza.

Gurgaon toll plaza

[Source: http://articles.timesofindia.indiatimes.com/2009-02-05/delhi/28003060_1_toll-plaza-exclusive-lanedelhi-gurgaon ]

This problem has reached such heights that once even police had to intervene. At
times when people were experiencing difficulties due to heavy traffic snarls while commuting
from Noida to Delhi and Delhi to Noida via DND Flyway, the authorities had to make the
travel toll-free during peak hours. The Delhi Noida Direct Flyway (DND) had been made
toll-free for peak hours (9-10am and 5-7pm) till February 22, 2013. Therefore, to curb the
waiting time, the company aims to come up with a price appropriate solution.
Another aspect of the service provided by Airtel is to provide a solution wherein the
users of the service would be able to pay their fine by simply using airtel money and smart

driving license card. All they would require is to have an app enabled smartphone capable of
clicking photographs. This service would provide convenience to the customers and would
remove the burden of visiting their local court just for the sake of payment.
One more aspect of the service provided by the company is an online portal which
helps in getting a new license. This kind of service is extremely useful because generally
government offices, especially RTOs are quite slow in providing any kind of service.
Formation of long queues in a government office is not a new phenomenon and everyone has
undergone this problem from time to time. There is already an online portal for passports and
visas but there is no kind of portal for getting a new license. There is a need for a centralised
system which can be accessed from any part of India and retrieve details of any citizen who
has a license card.
10.3.

Industry analysis

The telecom industry hopes to hit 1 billion subscription mark by 2014, even after
witnessing negative growth. The company is currently the market leader with about 183
million subscribers (about 20.62% market share). The government decision to allow up to
100% FDI would encourage the company to raise equity. Also, the company could face
competition from international players.
10.4.

Main Competitors

Since the project would involve collaboration with government agencies, the
company would get exclusive rights for the n number of years. Thereafter, the company could
face competition from other major telecom players such as Vodafone and Idea.

10.5.

SWOT analysis for the service

Strength
Customer convenience
Increase usage among existing
airtel users
Organised licensing process
Fully centralised, trasparent, well
structured
Complete record of each inividual
Easily affordable
User friendly

Weakness
Difficult to distinguish between
passenger vehicles and
commercial vehicles
Target segment is small and it is
taken only as a test market.

SWOT
Opportunities
Airtel money service can be
further expanded to be used in
petrol pumps etc
License card can be used as a
one stop aolution thereby
avoiding debit and credit cards .
All features can be combined
into one.
The process can be expanded to
whole of India in future.
Users of other service providers
can also be attracted to airtel by
this new feature.

Threats
Other service providers can come
up with a similar service.
Already existing sensors can be
upgraded .

Chapter 6

Strategy and Implementation

6.1.
Marketing strategy
6.1.1. Positioning statement
The company would position the product as a secure, cost effective and multi -utility
technology adding to the role played by the traditional smart card. The service is positioned
as meeting the universal customer expectations more choices and more convenience. The
USP of our service is quick payment, centralised system and transparency.
6.1.2. Promotion strategy
Marketing and sales promotion for Smart driving license will be done in two phases.
The first phase will be focusing on the Marketing promotion, while the second phase will be
focusing on reaching out to the customers and providing detailed information through various
ways of sales promotions.
Phase 1
Marketing promotion
1. Free- Toll Ride: The service is for the people who go through daily hassles of long
waiting time at the toll gate and challan payments. The target customers are people
who drive 2 wheelers and 4 wheelers.
In this promotional activity, we will open the toll gates for 5 mins during peak hours
and allow vehicles to pass through without collecting any charges. Digital board at the
top of toll gate will give a message Free Ride sponsored by Airtel. This promotion
has been planned to be executed 8 times in a month (twice in a day- once in a week)
during rush hours.
Cities targeted: 1. Delhi 2. Mumbai 3. Kolkata 4. Pune 5. Chandigarh 6. Hyderabad
7. Bangalore 8. Jaipur. The promotion will be done in alternate days in all the above
mentioned cities so that a large number of viewers can be attracted all over India and a
trigger will be created about the forthcoming service and the product.
Cost Analysis:
During rush hour, nearly 2 lakh vehicles use the toll road daily.
No. of cars that pass through toll gate off peak hrs: 100/5min
No. of cars that pass through toll gate during peak hours: 25/5 min
Average number of vehicles in a lane: 50/5 min ( source : Approximation)
Targeted customers through this promotion in 1 month = No. of lanes*no. of vehicle
in one lane* no. of times in a month = 32*50*8 = 12,800
Avg. toll cost per vehicle = Rs. 30
Total cost on this advertisements = Rs. 3,84,000/city
For 7 cities = 7*3,84,000 = Rs.26,88,000
Approximated to Rs.30 lacs

2. Facebook advertisement:
Full page advertisementDuring the initial launch of the product, the company would promote it through full
page advertisement. The advertisement would appear on the log in page and on the
log out page.
Cost Analysis
Advertisement cost for 1 day Rs 40,00,000
No of days 7
Total cost for the campaign 4000000 * 7 = Rs. 2, 80, 00,000
3. TV advertisement:
The company would also promote the product through TV advertisements. The Ad
campaign would be a 15 second advertisement broadcasted 3 times in a day (evening
slot).
Cost Analysis
Cost of a 15 second advertisement - Rs. 3,50,000
Number of times broadcasted in a day 3
Number of days broadcasted in a month - 30
Total cost of advertisement for a month - 3,50,000 *3*30 =Rs. 3,15,00,000
Phase 2
CAB Service Providers (MERUCABS, EASYCABS etc.)
Another user segment of toll plazas are cab service providers who pass
through the toll on a daily basis. Approximately 50% of the traffic at toll plazas is of
cab drivers. Therefore, to promote this service, Airtel can have tie-ups with these cab
service providers and provide demos of the smart driving license card which the
company aims to launch. This can be beneficial in word of mouth advertising in
probably the biggest potential segment for the service.
Corporate Organizations
Corporate organizations such as IBM, TCS, INFOSYS, and CONVERGYS
employ a vast number of employees which are daily users of toll plazas. Airtel can
probably promote its service by giving free demos to people at higher positions in the
company and can also hold seminars within the organization, explaining about the
service that the company aims to provide. Company can also take interviews of the
people who would be provided demos and they can tell their personal experience of
using the service. This, in-turn would act as testimonials for the company.
Newspapers

For promotion via newspapers, Airtel can target both Hindi as well as English
newspapers. For Hindi newspapers we choose DAINIK JAAGRAN since it is the
most widely read local language newspaper (With 16.429 million readers*) and as for
English newspapers, Airtel must target TIMES OF INDIA as it is the most widely
read English newspaper (with 4.9 million readers*). In the advertisement we can show
the various benefits of using the service. We also plan to attach a prototype of the
smart driving license along with the newspaper so that people will have a real time
feel of the product and its application.
(*The values shown here are based upon the 2010 INDIAN READERSHIP SURVEY)

Cost Analysis
Times of India = Rs. 75000000
Regional newspaper = Rs. 100228000
Total = Rs. 17,52,28,000
Social Networks ( Facebook)
Social networks such as Facebook have emerged as a brilliant platform to
promote a business idea and spread awareness about the services we aim to offer.
More and more companies have started to invest heavily for promotion through
facebook since it serves as the right platform to attract the target segment. We can
create a facebook page describing the service that we offer and that page can be
promoted through the existing facebook page of Airtel. Once we have garnered
enough audience to view and review our posts we can go in to promote our posts to
reach out to an even more vast audience.
Cost Analysis
Cost of Ad per day = Rs. 2500
For 1 year = Rs.2500* 365 = Rs. 912500
6.1.3. Distribution Patterns
Counter service in RTO offices:
In order to make this service easily accessible and user friendly, we will be providing an
online platform to acquire the driving license card for new candidates. For all those who
already have a license card and who want to avail this service, a separate Airtel help desk will
be provided in all the RTO offices. They can approach them and provide the necessary
document and the old license. It will be exchanged for a new one and sent through courier to
their respective contact addresses. This will eliminate the tedious process for the customers
making them to wait for a long time.
Airtel users:

Information guidelines and help will be provided by the customer care help desk in all the
Airtel offices.
Non Airtel users:
A common helpline number will be made available for all the non airtel users so that they can
get the required information and guidance to use this service.

Chapter 7

Technology Integration
In order to implement the whole centralised system, we are dividing India into 6 major
zones and each zone will cover few states out of which one state will be selected as the
central contact for that particular zone (represented in bold).
1)

North Zone
Jammu and Kashmir
Himmachal Pradesh
Uttarakhand
Punjab
Harayana
New Delhi
Uttar Pradesh

2)

South Zone
Andhra Pradesh
Karnataka
Tamilnadu
Kerala

3)

East Zone
Bihar
Jharkhand
West Bengal
Orissa

4)

West Zone
Rajasthan
Gujarat
Maharashtra

5)

North-East Zone
Arunanchal Pradesh
Meghalaya
Assam
Nagaland
Tripura
Manipur Mizoram

6)

Central zone
Madhya Pradesh
Chattisgrah
Delhi

Each state would have an ERP software collaborated with the Master State of that zone which
will maintain entire record of the data of all the states under it.
The master state would gather information about all its zonal states and will be collaborated
to central zone Delhi where entire information of all the states would be recorded. So each
zone will be connected with north zone as a base zone though which all the other zones will
also get operated. This would help in centralizing the whole process and easy to operate.
A centralised licensing process would be structured where through a common website entire
process of e-booking of license date and availability of slot, online driving test would be
maintained. The same website would contain the entire record of the license number.
Total cost of ERP system to be implemented would be approximately 18 crore Rupees.
7.1. ERP System Cost
How much does an ERP system cost? It depends on the number of users. It depends on the
level of sophistication and complexity of the solution. It depends on the size and complexity
of the implementation project. And it depends on installation of hardware along with the
software.
7.2. Tiers of ERP Cost

ERP software and suppliers are often discussed in term of tiers. Tier 1 products include the
biggest products and vendors that serve the largest companies needs. In many cases, these
companies compete for enterprise-wide contracts with ERP as a component of those
agreements. Tier 2 and 3 mid- and small-market system vendors oftentimes have a tighter
focus on a given opportunitys needs rather than on managing the myriad components of a
larger enterprise as a whole, including the non-ERP software needs of an enterprise.
Additionally, Tier 2 and 3 solutions can align better to the budgets and specific pain points of
small and midsized customers.
Tier 1software is typically more costly than Tier 2 or 3, though in the end the final cost for
any solution for a given opportunity may be remarkably similar.
7.3. ERP Implementation Costs
ERP software price is only a part of the total ERP system cost. Following a common rule,
software is 30% of total implementation cost, hardware might be another 20%, and half of the
total goes for implementation services, data conversion, consulting and training. These
percentages can vary quite a bit from 30-20-50 but the point is this: the software is usually
quite a bit less than half of the total cost and in some cases could be as little as 10% of the
total.
Cost of ERP = 18 crore
Cost of software = 30% of total cost
Cost of hardware = 20% of total cost
50% cost for implementation services, data conversion consulting and training
7.4. SaaS ERP Costs
Most ERP system suppliers now offer a Software-as-a-Service (SaaS) deployment option for
their systems (and some suppliers are SaaS-only). SaaS is a monthly subscription pricing
paradigm. There is no up-front software license cost and no hardware or operating system
cost (the system is hosted in the cloud) but monthly or annual costs will be higher than the
maintenance fee with normal licensing. Again, compare costs on a TCO basis over a
reasonable timeframe to understand your total expense.
7.5. Cost of ERP
The total cost of ERP ownership includes the costs of packaged software, hardware,
professional services (for ongoing maintenance, upgrades and optimization) and internal
costs. Based on the ERP survey conducted by Meta Group in 2002, the average cost of ERP
ownership for each zone is Rs. 1.5 crore.
Now the data of all the License users will get filled in this ERP system which would make the
database for it. It includes their details like Address, Contact, and Vehicles owned, Pan Card
Number, the fines made by them and penalties paid.

7.6. APP Development

An application which can scan the license card will be developed by Airtel. The cost incurred
in developing the app would be from 50,000 to 1 lakh.
When a fine is imposed on the driver he will use his smart phone app - turn it on, enter its
username and password and the balance money will automatically get deducted through airtel
money service. For this facility to be carried forward, the app should be recharged through
Airtel money. Also an e-record of the fine made and penalty paid would be recorded through
the ERP software which is directly linked with app developed.
The online system connected though the ERP will give all the details and the amount of fine
could be filled and message will be generated and will be given to the card holder. This will
be convenient for both card holder and police. At present, the license gets retained by the
RTO office and licensee has to make lot of efforts to get it from court and many other
complications are involved.
There is the facility of recharging that will be provided by Airtel and a minimum balance of
1000 rs will be maintained.
A licensees previous records can also be easily kept under vigilance and if someones track
record is not so good and he keeps on committing the mistakes, his license could even be
cancelled. Airtel can give warning messages to frequent defaulters with time to remind their
image as a license holder in the eyes of Government.
There are two ways of payment system, pre-paid and post-paid. In prepaid a balance will be
maintained and in post-paid monthly bill will get generated.
7.7. Toll tax scanner device
Now the license card can be used as a toll tax card too, where the device is placed at the toll
and the device would scan the license number and the money would be deducted through
airtel money. Software is built in the device which is directly integrated to the ERP
centralized software. So after scanning it will detect the license number and deduct money
through airtel money. Record would get updated in the software also.
Hence a license card can work as an Identity proof, a money transfer device for fines and also
as toll taxpaying card. Hence customers need not to carry different cards for different
purposes.
Positives are, better way to keep records of people, people will follow traffic rules, less
complex, more convenient, time saving, less chances of corruption, control over activities of
people.

Chapter 8
Financial Analysis

8.1. Financial projections

Airtel as a company has been performing satisfactorily over the years. So, for a company of
such scale and financial strength this kind of service is fairly viable provided its cost
effective and the ROI is positive for the proposed service.
As per the business plan discussed in preceding portion we had to devise a detailed cost and
revenue structure.
Financial statements used to understand the financial viability of the project are following:
1. Income statement
2. Cash flow
Note: With 10 year projections
8.2. Revenue Model
Revenue generation: Revenue generation is one of the most important part of any company's
business model this where companies will get the funds to operate.
Target for the first of the business commencement is 6 lakh throughout the country which is
itself is on the lower side.
Average recharge a customer is expected to get in a month = Rs. 1500
To start with we will have 50000 customers across all four regions which will increase by
50000 every month.
In the very first year revenue generated through this model came out to be Rs.5,850,000,000.
Note: Growth in the revenue has been taken at 20% per year.
8.3. Investment
SYSTEM
ERP Cost
6 Systems
Software Cost
Hardware
Implementation
Total Cost

Cost In Crore
1.5
9
2.7 30% total cost
1.8 20% of total cost
4.5 50% of total cost
18 Crore

The major investment needed for our business idea was in the ERP systems and hardware and
software development.

Break up of investment in technology has been given in the above table, as we are planning to
come with the ERP system which would have centralized database management with online
connectivity.
8.4. Key financial points
After the financial analysis and budgeting of the business following are the points which have
come up :
1. The payback period of the business idea is 5.3 years approximately. Payback
period is the period in which a company covers its invested amount through business
operations.
2. Net present value of the project has come out to be Rs. 431,619,676. A positive NPV
is the sign of financial viability of the project .
3. The company would be able to make an accumulated profit of Rs.1,621,003,046 in
the 10 year of their operations.
8.5. Assumptions
1. Revenue has been growing at the rate of 20 % per year.
2. Depreciation has been taken at the rate of 15% on fixed asset.
3. The discount rate has been taken at the rate of 14%. This is the cost of equity which
has been used for discounting.
4. Service tax has been taken at the rate of 5%.
5. Operational expenses have been increasing at the rate of 5% every year.

Chapter 9
9.1. Assumptions

 We assume that this service is made centralized and controlled by the central govt.
The govt will partner with some private companies to construct the toll and full
infrastructure. So they must install the sensor which will detect the license card and
the chip.
Other service providers are coordinating for this service.

9.2. Challenges
1. Separate lane has to be provided for truck drivers which would be difficult in smaller
states.
2. Making it centralized can be a problem, as some states might not accept for this
proposal to be handed over to central govt.
3. Co-ordination with other network providers in order to make this service public and
accessible to everyone.
4. Only limited to smart phones users. Current population of India is 1.27 billion. Out of
this, 67 million people use smart phone with internet connection. Smart phones user
base is increasing by 52%, so the customer base will increase in the near future.
Hence, this challenge can be mitigated to certain extent.

Chapter 10
References

1. http://articles.timesofindia.indiatimes.com/2009-02-05/delhi/28003060_1_toll-plazaexclusive-lane-delhi-gurgaon
2. http://ibnlive.in.com/news/india-has-5548-crore-mobile-owners-1432-crore-internetusers/420444-11.html
3. http://articles.economictimes.indiatimes.com/2013-06-05/news/39764644_1_tablet-pcmarket-aakash-tablet-datawind
4. http://articles.timesofindia.indiatimes.com/2013-01-10/kanpur/36257352_1_smart-cardvaranasi-and-aligarh-rto-office
5. http://www.ciol.com/ciol/news/155506/up-rolls-smart-driving-licence-micro-chip
6. http://techcircle.vccircle.com/2013/05/30/india-has-67m-smartphoneusers-desi-netizens-more-open-to-sharing-everything-online-mary-meeker/
7. http://search.proquest.com/business/docview/1039650291/14062C316E37
AB18D92/1?accountid=145616
http://www.indiantollways.com/category/toll-plaza/
8. http://techcircle.vccircle.com/2013/05/30/india-has-67m-smartphoneusers-desi-netizens-more-open-to-sharing-everything-online-mary-meeker/
9. http://articles.timesofindia.indiatimes.com/2011-0402/gurgaon/29374429_1_toll-plaza-toll-tax-toll-gates