TATA TELESERVICES

REASONS BEHIND DECLINING

PROFITS Anurag Pandey

Apoorv Sharma
Arun Koul
Brijendra Dubey
Chandrabhan
Singh
JayaSheela
About TTS
Tata Teleservices spearheads ,TATA group’s
presence in telecom sector.
Serves a combined user base of around 70 million
Spans across a 450,000 towns ,cities and villages
across the country.
Regarded as the pioneer of CDMA 1x technology.
Has been selected as “least congested network” in
India since 5 consecutive years.
Serves as TTS(Maharashtra)ltd. In Maharashtra
circle.
TTS Product Bouquet
Tata Teleservices operates under following
brands:
• Tata Indicom (CDMA)
• Tata Docomo (GSM)
• Virgin Mobile (Targeting Youth)
• Tata Photon (Wireless Broadband )
• Tata Sky (DTH Satellite provider)
• Tata Walky (Fixed wireless)
Tata Indicom
Tata Teleservices introduced its mobile services in
India, by launching Tata Indicom in January 2005.
Tata Indicom enjoys a pan India presence in 22 telecom
sectors.
It offers services such as News, Games, Faith and
Prayers, Ringtones, Streaming TV, Fun Shows, Video
Zone, Song Download Express, Cricket, Internet Surfing,
Astrology, and Mobile Office among others as part of its
VAS.
Offers various competitive tariff plans, aimed at
providing substantial talk time at lesser prices.
Tata Docomo
Tata Docomo was launched in 2008.
 NTT DOCOMO is one of the world’s leading
mobile operators—in the Japanese market, the
company is the clear market leader, used by over
50 per cent of the country’s mobile phone users.
First to introduce pay per second tariff plan.
Also introduced pay per character SMS plan.
Has introduced “pay as per use paradigm”,
which other telecom majors had to emulate.
Virgin Mobile
Provides CDMA services under a franchisee
model with TTS
This model helped the companies to position
itself as youth brand
It further helped TTS to expand its consumer
base in the market
Tata photon
Wireless broadband services provided by TTS.
20 times faster than prevalent wireless
technologies.
Tata photon services are present across 35 cities
in India.
Tata photon plus is a 3g wireless technology.
Provides niche services like photon TV and also
Tata photon mobile.
Tata Sky
Dth service provide by Tata teleservices.
Uses sky brand of British sky broadcasting.
Launched with star group which owns 2o % stake.
Uses mpeg-2 digital compression technology.
Offers superior video quality and provides value
added services like movies on order, bill payments
etc.
Tata sky HD was launched in 2010,offering cutting
edge high definition picture quality.
Tata sky plus allows 90 hours of video recording.
Recent collaborations by TTS
In 2008 TTS entered into a strategic alliance with
NTT DOCOMO, Japan.
NTT DOCOMO picked up a 26% stake in TTS.
TTS and DOCOMO started TATA DOCOMO, a
GSM service, spanning 17 out of 22 telecom sectors
in India.
In Feb 2008, TTSL announced that it would
provide CDMA mobile services targeted towards
the youth, in association with the VIRGIN group
on a Franchisee model basis.
Top 12 wireless operators in 2009
CDMA MARKET SHARE 2009
Profit and Expenses Data(2002-10)
Purchases of Compensa
Finished tion to Indirect Ad Marketing
YEAR Profit After Tax Goods Employees Taxes Expenses Expenses
2002 -148.05 2.04 11.06 0.01 3.19 5.27
2003 -195.43 4.48 15.32 0.01 7.07 7.07
2004 -381.57 5.93 51.91 1.81 41.98 29.96
2005 -786.4 6.19 87.46 3.86 66.36 82.83
2006 -1664.07 4.57 166.67 6.76 169.5 217.14
2007 -1878.21 0.82 242.03 7.33 265.99 340.04
2008 -2062.52 72.32 283.68 18.27 317.42 1147.52
2009 -1813.76 128.69 378.02 8.85 396.18 791.46
2010 -1814.31 112.3 511.79 7.15 369.01 703.05
THE PARADOX
 From 2002 to 2010 the SALES in monetary
terms have constantly increased .
 During the same period, the MARKET SHARE
has also increased .
 But PROFITS HAVE CONSTANTLY
DECLINED during THIS VERY PERIOD .
 What could be the REASON ???
 This is what we intend to find during the course
of this project.
REGRESSION ANALYSIS

 INDEPENDENT VARIABLES:
Profit
 Dependent variable
Advertising expenses
Marketing expenses
Purchases
Employee compensations
Indirect taxes
CONCLUSION
• The company is still in an expansion phase in the
last decade.
• Company hasn’t been shy of spending heavily
on Advertising .
• TTS is focusing on increasing market share and
not on profitability.
• Their ARPU has been decreasing steadily, faster
than their competitors’.