Motorola Case

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M A N A G E M E N T

C A S E

Turnaround @ Motorola

India-Mobile Devices Business through

the HR Lever

Pallavi Srivastava and Jyotsna Bhatnagar

describes a real-life situation

faced, a decision or action taken by an individual

manager or by an organization at the strategic, functional or operational level

KEY WORDS Turnaround Strategic HRM High Performance Work

System Talent Management Employee Engagement

India

June 5, 2006: Motorola Unveiled the First Indian MOTOSTAR— Abhishek Bachchan

D

ressed in black jacket and denim, Abhishek Bachchan, the rising Bollywood1

star, was present at the function where he was officially declared as the Motostar for Motorola cell phones. Abhishek fitted in as the iconic “MOTOSTAR,” joining the elite club of tennis top seed, Maria Sharapova; soccer player, David Beckham; and Bono, the pop star, as a brand ambassador for Motorola globally. Motorola’s brand quotient of youthful spirit, courage, smartness, and dar-ing-to-be-different approach, was in sync with Abhishek’s bold and adventurous attitude, looks, and unconventional style. Both had a rich heritage. Yet this was no mere celebrity endorsement. Before the stardom dawned on him, Abhishek was declared a flop by the media. “Before he succeeded, he struggled for five years. Seventeen of his movies were a box office flop,” quipped Sudhir Agarwal, Director-Sales for mobile devices, Motorola India. Motorola struggled in the same way in India before making a comeback in mobile devices in 2006.

The deal with Bollywood actor, Abhishek Bachchan, marked a relatively new celebrity track for the company—teaming up with non-US stars who appeal to inter-national markets, or even individual foreign countries. This was something which Motorola had never done before. It took some convincing for the marketing team under the leadership of Lloyd Mathias, Director-Marketing, Mobile Devices Busi-ness (MDB), Motorola, India to win more dollars from Schaumburg2 _{to localize the}

flavour of advertising in India.

Past Performance of Motorola in India

Motorola started selling mobile phones in India in 1995 and was one of the first telecom companies to enter the country. However, it failed to capitalize on its early mover advantage. That gave competitors like Nokia a near monopoly on the mar-ket. According to Gartner India estimates, Motorola’s market share kept on falling and was very low, just 1.8 per cent, in early 2005. The company lost out completely before it realized it.

1_{Mainstream Hindi film industry} 2_{Headquarters of Motorola Inc.}

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The reasons were an improper product portfolio, ineffi-cient distribution system, lack of branding, improper market campaigns, and non-focus on people manage-ment strategy. Also, the team was not well-equipped. Only 7-8 people were handling the mobile handsets di-vision which was then known as the Personal Commu-nications Division. In India, marketing was not a separate function; it merely meant reporting to sales. The team was not fully geared for this. The distributors did not have Motorola as their core business. On the whole, fo-cus on the mobile phone business was missing.

Motorola realized that India was a great low-cost hub for software development but failed to see the consumer potential. In a land of 1.1 billion people, the company had a sales team of only five employees. It offered only five models of phones. The market was completely domi-nated by Nokia which had a better distribution system, a strong brand presence and also a product portfolio cus-tomized for the Indian customers with features like flash-lights, useful in a country where blackouts are common. Despite the fact that Motorola had one of the largest software development centres in India and 40 per cent of the software in its phones was designed in India, the Indian consumer was not interested in buying the phone. Many of them were not even aware of its presence. The company’s first cell phones here were transplants from the U S market, with nothing tailored to the Indian way of life. Luring the Indian customers as well as the In-dian telecom talent to Motorola proved to be quite dis-appointing.

Enter Ed Zander

On January 5, 2004, Edward J Zander was selected as the Chairman and Chief Executive Officer of Motorola Inc., by the Motorola board of directors. He succeeded Chris Galvin who retired in September of 2003 as the Head of the electronics giant, ending a three generation reign of his family. Zander successfully reorganized the company, oversaw the introduction of several exciting new products, and sharpened Motorola’s focus on in-novation and operational efficiency.

While building Motorola’s strategy in Asia, Zander focused on the high-growth markets (HGMs). HGM re-gion covers 107 countries across Africa, Middle East, Indian sub-continent, South East Asia, with exceptions like Australia and Singapore, which are very mature markets and had a much higher mid- and high-tier

pro-portion and therefore smaller growth than the develop-ing markets actually represent.

India: The Headquarters for High Growth Markets

The market dynamics was chaotic. India was to be the world economic giant by 2020 as suggested by the Goldman Sachs Report, 20073_{. The talent pool of telecom}

engineers was being fished by the leading players in the market, namely, Nokia and Samsung. India was the hap-pening place for telecom sector. (Exhibit 1).

Suddenly, there was a realization that the Indian telecom market was the fastest growing market in the world. The entire focus of Motorola Inc. started shifting back to India. It had to move fast… even faster than the competition. However, the edge was lost. The top man-agement was in a pensive mood to regain the market and then rule it. It had to be done at double speed with the right kind of talent pool.

A core team was created to harness the ‘India fac-tor’. On August 22, 2005, Zander, announced that the company had established India as its headquarter for the High Growth Markets (HGM) because of the coun-try’s strategic importance to Motorola’s global opera-tions and the highest growth rate and potential within the identified HGMs and the geographic advantage. The Personal Communications Division of Motorola India was rechristened as the Mobile Devices Business (MDB). Allen Burnes, Vice President, HGM, Mobile Devices, Motorola Inc., was appointed to head this turnaround. He came to India along with his team of Senior Direc-tors — Michael Warren-Smith, Director Finance, HGM; Steen Ronholt, Director Business Operations, HGM; Andre Kangas, Director Product Marketing, HGM; and David Taylor, Director Strategy, HGM. Burnes, Warren-Smith and Taylor had done amazingly well in the emerg-ing markets of Russia. They were brought in to deal with a similar situation in India. (Exhibit 2)

The company was facing the challenge of develop-ing cost-effective solutions in the price-sensitive market of India. Motorola’s market share in India had been con-sistently falling in the last few years. By the end of 2005, Motorola invited international consultants, McKinsey, to undertake a study to find the India-specific features for its mobile handsets.

3_{Source: http://www.usindiafriendship.net/viewpoints1/Indias_} Rising_Growth_Potential.pdf retrieved on 28.05.2007.

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Motorola considered India to be very strategic from two perspectives—firstly, as a development hub and secondly, as a market. (Refer to the background note on ‘Big Opportunities’). On the product development front, close to 40 per cent of the software for cellular phones was being developed in India. As a market, with grow-ing consumerism, it was the fastest growgrow-ing mobile market (Exhibit 3). Motorola decided to launch a host of mobile handsets at different price levels to gain a greater market share. It started revamping its Indian operations and renewed focus on this high-growth market under the supervision of its emerging marketing expert, Allen Burnes.

Recruitment and Formation of Management Team

An entirely new team was created to handle the mobile devices division. While the strategy for the Indian sub-sidiary was already under the supervision of Motorola’s emerging marketing expert, Allen Burnes, the new team was expected to bring in a fresh approach in implemen-tation of the plans. The company charted an aggressive plan to capture a bigger pie of the mobile handset mar-ket in the country with a revamped product strategy to tap both the top end and entry level markets.

Redemption began with aggressively recruiting the right people. As an HR strategy, they left out people from No.1 players in the corporate world. They scanned for personal experiences of people in beating No.1 play-ers. What were the factors that excited them and what challenges were they looking for? They looked for peo-ple with technical competency and the ability to fight back. They went for people who had worked in turna-round situations and were eager to face challenges and perform. Reddam quotes, “The culture fit was an im-portant criterion for talent acquisition. We aggressively poached employees who were hungry to perform; who could fight back and had a passion and energy to work.” There was an aggressive out-of-the-box buying of tal-ent from all sectors for sales and marketing. Though the telecom sector dominated the recruitment strategy, some were lateral talent “buy-ins”. In 2005, when Agarwal left the local giant, Bharti Telecom, to run the sales for Motorola in India, he was among a group of 45 new hires. Similarly, Lloyd Mathias of PepsiCo, a renowned name in the area of brand turnarounds, also joined as the Di-rector - Marketing. The HR dilemma was whether to build or to buy talent. They decided to aggressively buy talent. The second dilemma was how much breadth and

depth they should go for in the team. It was synchro-nized with Motorola’s commitment towards India and its business strategy.

The sense of urgency was palpable. That year, Motorola CEO, Edward Zander, visited India to an-nounce that the company’s offices in Gurgaon, near Delhi, would be Motorola’s new headquarters for “high-growth markets” in Asia and Africa. He charged the new recruits with bringing about a Motorola renaissance in the booming Indian market which resulted in an eight-fold growth in the market share. The brand value of Motorola also jumped from not being even amongst the top 50 to No. 5 position.

Roadblocks

All this progress was not without any constraints. Ini-tially, the turnaround started with resistance from the older employees. It was also a challenge to balance the global and local HR and to convince the corporate head-quarters for the local requirements. Motorola India had to convince the parent company about the special needs of the Indian market – for larger phonebooks, high fre-quency sound, lower recharge times, heat and dust. Fi-nalizing the budget also took away the time advantage which resulted in a slowdown in accumulating the headcounts. Yet, from a pocketful of 8 employees in 2005, the year 2006 saw a dramatic rise to 75 employees who were passionate, hungry, ready to fight, and willing to perform. Excitement was reaching new heights. The HR leader gave a serious thought to building the excitement further and sustaining the energy for the action of hold-ing the turnaround bull by its horns with an engine of a team of 75 individuals ready for the war. It kick-started with ‘Prarambh’.

‘Prarambh’: Learning the Motorola Ropes

Prarambh4_{anchored the engagement of employees. It}

was supported by the top management, Allen Burnes, celebrity cricket commentator, Harsha Bhogle, and the HR leader, Raghuram Reddam. Everything was happen-ing very fast. It took MDB nearly a month to formally induct its employees as they were spread all over the country and it took time for all of them to get together. ‘Prarambh’ was customized to the Indian point of view. The success stories of Indians like Padmashree Warrior,

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Mohan Kumar, and others who had done extremely well at Motorola India and had risen from the ranks, was nar-rated to the new recruits. The induction in Motorola worldwide is conducted through a mix of online and classroom training but MDB wanted its employees to do it on their own.

Reddam at MDB went for two interventions—‘Hai

Dum-I’ and ‘Hai Dum-II’—and challenged its team

mem-bers to perform. They put up a boxing ring and roped in the celebrity cricket commentator, Harsha Bhogle, who added the punch by asking, “Do you have it in you? Then go and beat them!” Allen Burnes also spoke to them and motivated them. They were encouraged to deliver at any cost. The employees had unconstrained energy that made them work for 24x7x365. Ed Zander had once stated, “We don’t care about our titles; we don’t care about our offices; we don’t care about entitlements; we just care about winning. We laugh, we kid, we have fun, and the people below us have fun and there are no se-crets here.” This was true at MDB. This was the engage-ment communication which moved the already present excitement in the new team. “You are the best guys. Hai

dum?” (“Do you have it in you?”)

The Motorola culture and values were ingrained in them through the iMOTO campaign which introduced them to the qualities to be possessed by a Motorolan. They were taught the values which defines their com-pany. The campaign said, “Customers are first, last, and everything in between. Customer delight starts here. We were the original high-tech start-up. We’ve changed the world before, and we will again. We operate ethically, and there are no excuses for doing anything else. We treat people with respect and seek out and promote di-versity of every kind. We’re not settling for anything except the #1 spot. We not only will excel, we will win. We work for one company, with one vision, one brand, one stock, and one exciting future.”(See Exhibit 4)

Anchoring the Passion of the Employees

The HR team had only two members — Raghuram Reddam, the HR Director, who was with Motorola since 1996, and a fresh management recruit designated as the HR Manager. Together they thought of innovative ways to recognize the talent pool. Their focus was on how to implement the HR Vision and Mission (Exhibit 5). The strong focus was on employee growth, happiness, in-volvement, and high energy. It was the trajectory of growth that kept them motivated. The career prospects

attracted employees to Motorola. Recognition for their efforts kept the employees further engaged and ener-gized. The team was very lean with people having mul-tiple accountability and responsibilities. It was the richness of the job that drove them to perform against deadlines. It was the challenges that carried them through. The growth was happening exponentially. This achievement was so exciting that it kept the employees fully engaged.

Motorola had an enabling culture. It was one com-pany which supported flexi-timing, telecommuting, and fun at work. Working at Motorola meant a 24x7 job, where speed and delivery at any cost were the biblical words, to be honoured under any circumstances—a cul-ture which motivated them to perform. Lack of formally established systems was in fact a supporter instead of being a barrier. An employee felt like a new entrepre-neur— willing to work, willing to perform, full of zeal and energy.

To further build the capability and the competency, the HR team founded the Bravo Awards to recognize and reward employees for their outstanding perform-ance during each quarter (Exhibit 6). The rewards in-cluded cash prizes, certificates of merit, and recognition from the General Manager, etc. The identification of an outstanding performer was based on performance and behaviour like sheer hard work, high team collabora-tion, and so on. The evaluation was done by the imme-diate supervisor and vetted by the Business Head and the HR Head. They were looking for a ‘wow’ perform-ance, outstanding behavioural competency, and team competency.

Raghuram Reddam, added, “Everyone works hard here and does not want to go home early. No retooling is required as the talent is fresh. They have an inbuilt pressure and are hungry to work and win.” They had many on-the-spot recognition awards which were won by 60 per cent of the employees in the organization. Quarterly ‘town hall’ meetings were initiated to com-municate current and future business strategies and also recognize top talent.

Learning and Development Interventions

With so much of action happening, there was no time for growth and career planning of employees. The sys-tems and processes were not clear. It was towards the end of 2006 that MDB focused on capability building of its employees. It established a Sales Academy to train

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and hone their skills. Three-day workshops were con-ducted for various functional areas like service, field engineering, product marketing, marketing, sales, and finance. OD-focused functional interventions were car-ried out. Diagnostic exercises were conducted with lead-ers to find out the vision they had for their team, the various tools of engagement they need to employ, and how they wanted the execution to happen. All this was not forced upon the leader. If a particular function did not desire or the leader was not ready, such measures were pulled back. Reddam challenged them and incited their vision, interaction, group dynamics, execution, etc. (Tables 1, 2, and 3)

The first of its kind leadership meet was called Jaipur Post. The leadership team with all the functional lead-ers was taken away to Jaipur’s Sumodh Palace for a three-day vision building exercise and to finalize the business strategy for MDB. The Organization Develop-ment diagnostics were probed into by a leading OD con-sultant of India. It had to be followed up in March next year. But HR failed to keep up the momentum. The HR leader had to reorient the design of his workshop to sus-tain the diagnostic.

Achievements

The achievements were many. Motorola developed an innovative and rapidly expanding product portfolio aimed at different categories of users, across Global Sys-tem for Mobile Communications (GSM), Code Division Multiple Access (CDMA) for the high growth markets. The Marketing Team of MBD was known as one of the best marketing teams in India. The Sales Team was ad-judged as the Best Business Team in Motorola Global Mobile Devices Sales Conference. MDB also got the recognition for being the product champions, best brands, etc. Till the beginning of 2005, brand Motorola was nowhere. By 2006, it was known among the top 5 brands in India. By the end of 2006, MDB reflected a dramatic eight-fold growth of about 14 per cent market share5_{which was truly remarkable.}

The Road Ahead for HR

At the end of 2006, the HR function was under high pres-sure to keep the employees engaged and sustain their

energy and excitement. The HR team was making ef-forts to engage with all employees, keeping themselves aware of the signs of breakdown and stress in the team members. Every alternate Fridays, events like quiz, get-togethers, etc., were arranged for the team to unwind. The team also tried to keep track of those who were less engaged or were likely to be poached by the competi-tors. This they could find out by realizing a dip in their performance and also with the help of unofficial grape-vine. They would sound each other on the employees and the team would go in for informal chat sessions with such employees.

Retention of talent was a burning issue for HR since they had poached aggressively when building the tal-ent pool. Now, their pool was open to the market. A talent pool with a killer attitude. The success story of eight-fold growth added more fuel to the fire of reten-tion. The competitors’ antennae were up; they were eye-ing the capable passionate talent pool of Motorolans at MDB. In a market where skill and the right attitude are not in abundant supply, this was a major challenge for HR. For this purpose, the whole organization was mapped to identify the critical talent for MDB. The pro-cess included a robust risk assessment model and a robust risk analysis format which cannot be shared for reasons of confidentiality. The attrition rate of MDB employees was presently almost negligible but would it continue to be so? Will MDB be able to provide the same challenges that would keep its team members hooked to it keeping in mind their hunger for challenges? How can their passion and energy be sustained? How could Reddam sustain the disruptive innovative com-petency of the Team? Some other issues like career plan-ning and management and capability building of the employees were also bothering him. While Mr. Reddam had enough reasons to be worried about, he was some-how optimistic—optimistic for an even brighter future for MDB, confident of a much better performance by his able talent pool.

BRAVO! Recognition Award

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Behavior Level: Choose One Result Level: Choose One

Behavior 3 - Outstanding 2 - Significant 1 - Noteworthy 4,500 - 15,000 2,000 - 10,000 750 - 6,000 1 - Noteworthy 6,000 - 40,000 4,500 - 15,000 2,000 - 20,000 2 - Significant 20,500 - 100,000 6,000 - 40,000 4,500 - 15,000 3 - Outstanding Result

1 - NOTEWORTHY : Demonstrated behaviour or accomplishment above and beyond normal expectations

2 - SIGNIFICANT : Reach-out performance or accomplishmnet that results in an identifiable and measurable impact on Motorola goals.

3 - OUTSTANDING : Break-through perfromance reflecting recognizable impact on Motorola goals.

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Table 1: Structured Interventions Used for People Development

Capability Building Organization Culture Motivation

Training in functional and behavioural skills/ Moto values (iMOTO campaign, MYMOTOLIFE competencies at all functions and levels recognition of demonstrated values)

Multi-tier leadership development Ethics and compliance rigour Team building initiatives

(BDI, ELA/DLA) through education/ Training

Cross-functional and diverse business Employee engagement actions Coaching and mentoring for

skills (TRP) high-potentials

Executive coaching and mentoring “Winning teams” (through facilitating Recognition mechanisms team dynamics, conflict resolution

and cross-functional synergy)

Sales force effectiveness (sales academy) Personal growth and development

(communications skills, interper-sonal skills, and individual growth) Quality/ Six Sigma training

Table 2: MDB- A Progression from Current State to Future State (discovered in an organization diagonostic)

Current State Future State

Level of integration Individual businesses and functions A set of businesses which are individually optimized with low level of integration and collectively integrated

Stage of life cycle Build-up state leading to early Maturity; being better armed with capabilities to sustain stage of maturity the growth as dictated by financial and market opportunities Drivers for A combination of market dynamics and Clear strategic moves with the skilled and capable exponential growth renewed focus on growing the India team resource pool

Competency of A team not completely integrated A team which brings in market intelligence and is the team towards shared goals and objectives equipped with the capability to create exponential growth

in market share

Table 3: Eleven Best-in-Class Organizational Levers to Drive Strategy and Execution Success* Lever Description

Strategy The extent to which each business strategy is thought through, what strategic decisions are executed and then how each business is aligned with these decisions both at business and at a country level.

Leaders The extent to which each business has the quantity and quality profile of leaders needed to define and achieve its strategy. It also determines whether the business has an effective process for assessing the performance of current leaders, along with identifying and developing future leadership talent aligned to critical roles.

Customers The extent to which each business focuses on its customers, how value is created and evaluated so that overall profitable revenue stream is established to support business and brand equity.

Process The extent to which the core organization processes are understood and leveraged. It also determines how value is created and to what extent Six Sigma principles help optimize operational performance.

Business results The extent to which the business achieves its goals on key financial and performance metrics.

Structure The extent to which the business has an optimized structure that is aligned with its strategy and contains clear lines of authority, accountability, and responsibility in terms of collaboration and spans of control.

Technology The extent to which the underlying technologies within the business that directly or indirectly support strategic and customer facing activities are realized and optimized.

Innovation The extent to which the business has a desire to build capabilities and practices that foster a climate of imagina-tive ideas which are well-grounded against risk and judgement principles.

Talent The extent to which the business possesses talent with the critical skills, capabilities, and mindset it needs to achieve the strategy.

Engagement The extent to which the management team fosters a sense of alignment and how the core values, beliefs, and behaviours impact the organization’s ability to deploy its strategy.

HR Alignment The extent to which the key HR activity is aligned with the key strategies of each organization and how connec-tions are made.

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Table 4: The Timeline

January 2004 Edward J Zander became the Chairman and Chief Executive Officer of Motorola, Inc.

Second half of 2004 Motorola identified Africa, South West Asia, North Asia, and South East Asia as high growth markets (HGM) for the company.

August 22, 2005 Zander, announced the establishment of India as the company’s headquarter for the High Growth Mar-kets (HGM).

Nov 14, 2005 MDB announced joining forces with Bharti Teletech Ltd.

2005 Agarwal left local giant, Bharti Telecom, to run the sales for Motorola in India.

End of 2005 Motorola invited international consultants McKinsey to undertake a study to find India-specific features for its mobile handsets.

March 10th, 2006 Announced an alliance with DCM Shriram Consolidated Ltd. (DSCL)’s Hariyali Kisaan Bazaar chain of rural/semi-urban utility marts for sales and distribution of handsets.

March 13, 2006 Announced the establishment of a distribution agreement with ITC’s e-Choupal division for its Mobile Devices business.

June 5, 2006 Bollywood star, Abhishek Bachchan, became the MOTOstar. Second half of 2006 Slashed prices of its phones making them the cheapest.

End of 2006 The company was known among the top 5 brands in India; showed an eight-fold growth. BACKGROUND NOTE

Policy Reforms in the Telecom Sector

Policy reforms in the Indian telecom sector can be broadly clas-sified into three distinct phases:

Phase I: The Decade of 1980s saw private sector being allowed in telecommunications equipment manufacturing. Mahanagar Telephone Nigam Limited (MTNL) and Videsh Sanchar Nigam Limited (VSNL) were formed and a Telecom Commission was set up to give focus to telecommunications policy formation. Phase II: In 1990s, the telecommunications sector also benefited from the general opening up of the economy. NTP 1994 was the first attempt to give a comprehensive roadmap for the Indian telecommunications sector.

• Availability of telephones on demand (targeted by 1997) • Universal service covering all villages and one PCO per 500

persons in urban areas at the earliest (targeted to be achieved by 1997)

• Telecom services at affordable and reasonable prices • World standard quality of services.

Phase III: NTP 1999 brought in the third generations of reforms in the Indian telecommunications sector.

(Source: http://www.iimahd.ernet.in/ctps/telecomsector.htm retrieved on 20.04.2007).

Cellular Services

There are 25 private companies providing cellular services in 19 Telecom Circles and 4 metro cities, covering 1,500 towns across the country. Presently, there are five private service op-erators in each area, and an incumbent state operator. Almost 80 per cent of the cellular subscriber base belongs to the pre-paid segment.

Several GSM cellular service companies are climbing the EDGE bandwagon. Hutch has already started and Bharti has made test calls on the EDGE platform and the company is in talks with Siemens for EDGE-enabling some of its circles.

The DoT has allowed cellular companies to buy rivals within the same operating circle provided their combined market share did not exceed 67 per cent. Previously, they were only allowed to buy companies outside their circle.

(Source: http://www.iimahd.ernet.in/ctps/cellular.htm retrieved on 20.04.2007).

Regulatory Structure

The lack of clarity in the regulatory structure has made it diffi-cult to predict the prospects for this industry. This uncertainty has best been typified by the issuance of a fourth license and the controversies with reference to limited mobility players. The cellular services was thrown open for third and fourth service providers in 2002. The number of service providers increased from 42 to 68 in the year 2002-03.

Source: http://www.iimahd.ernet.in/ctps/cellular.htm retrieved on 20.04.2007.

Growth Drivers

Opening up of international and domestic long distance te-lephony services are growth drivers in the industry. Cellular op-erators now get substantial revenue from these services, and compensate them for reduction in tariffs on airtime, which along with rental was the main source of revenue. The reduction in tariffs for airtime, national long distance, international long dis-tance, and handset prices has driven demand. India currently has one of the lowest telecom tariffs in the world.

According to Telecom Regulatory Authority of India, the number of mobile users in India is topping the charts and is steadily increasing; 67 million mobile phone users have been added to the list in the year 2007. There are now 207 million phone connections in the country.

According to Mr. Dayanidhi Maran, Union Minister of Com-munications and Information Technology, Government of In-dia, “We have proved to the world that you don’t have to have high tariffs to be profitable.” He refers to the surge in profits of mobile phone companies that came alongside a sharp decline in tariffs.

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Much of the expansion has been limited to urban areas. Now, the government’s focus would be shifting to boosting phone connections in villages, where two-thirds of India’s 1.1 billion people live. According to the government plan, the rural areas of the country will have a total of 50 million telecom subscrib-ers by 2007 by setting up 8,000 transmitting towsubscrib-ers in rural ar-eas.

Source: http://www.iimahd.ernet.in/ctps/cellular.htm retrieved on 20.04.2007, http://www.dmaran.nic.in/presscoverage_all.php retrieved on 23.05.2007.

Competition in the Mobile Handset Market

Data from the “Indian Mobile Market 2006” statistical hand-book reveals that mobile ownership will pass 100 million in 2007 as ‘the largest middle class in the world’ takes up owner-ship. With 115.3 million forecasted mobile owners in 2007, In-dia ranks 3rd in the world behind only China and the U S.

The Indian mobile owners are becoming younger as a result of cheaper calls, subsidized handsets, and widespread availability of pre-pay, lowering the barriers to ownership. Hence selling mobile phones to people in the poorest countries on earth has become a major focus of the world’s largest mobile handset manufacturers. Facing a slowdown in handset sales in the richer markets because of saturation, they have turned their attention to the three billion people who are living in areas where there are wireless networks, but who cannot afford to use them.

As a result, market leaders Motorola, Nokia, LG, Samsung, and Sony Ericsson are competing with each other to slash the cost of making a mobile phone, in an effort to appeal to millions of potential customers. They are also competing with the huge market in cheap, illegal mobile phone imports as well as stolen and second-hand phones.

Leading handset manufacturers like Nokia Corp., Motorola Inc., and Samsung Electronics Co. have set up factories here in recent years, while companies such as Vodafone PLC are ex-panding by acquiring local service providers.

Source: http://www.researchandmarkets.com/

reportinfo.asp?report_id=312540 retrieved on 23.04.2007. Motorola India- Mobile Devices Business (MDB)

Motorola is amongst the leading handset players in India. Its office is based at its headquarters in Gurgaon. The company of late has launched many phones in all segments - high-end, mid-range, and low-cost. Its MotoRazr, introduced in India in 2006, is a glitzy model and MotoRazr V3i followed it. This model is dipped in gold and has a trinket designed by Dolce & Gabbana. Its varied portfolio of products caters to every market segment. From iconic products like the MOTOPEBL, MOTORAZR, and SLVR series, its mass market products are known for their reli-ability and economy, and include several models on the C 11x and related platforms. And leading offerings in Linux based PDA phones.

Motorola has a significant presence in the Indian handset market. Most of the growth in the handset market is through entry-level devices in India. The company has been drawing on the technical skills of Indian engineers. The engineering centre at Bangalore is the largest for Motorola in the world. The com-pany has increased the number of its employees across the coun-try. The Indian cellular industry, which operates on low average revenues per user, is driving the company to innovate and offer elegant and simple products.

Service Providers (Members)

Aircel Digilink India Limited Haryana, Rajasthan, UP ( East)

Aircel Limited Chennai, Tamil Nadu www.aircel.com

Bharti Cellular Limited Delhi (Metro), Mumbai (Metro), Kolkata (Metro), Chennai (Metro), www.airtelworld.com Andhra Pradesh, Gujarat, Haryana, Himachal Pradesh,

Jammu & Kashmir, Karnataka, Kerala, Madhya Pradesh, Maharashtra and Goa, Orissa, Punjab, Rajasthan, Tamil Nadu, UP (West), UP (East), West Bengal

BPL Cellular Limited Mumbai (Metro), Kerala, Maharashtra and Goa, Tamil Nadu www.bplmobile.com Hutch Group Mumbai, Delhi, Kolkata, Chennai, Gujarat, Andhra Pradesh, www.hutch.co.in

Karnataka,Punjab www.orange.co.in

Idea Cellular Limited Andhra Pradesh, Maharashtra, Gujarat, Madhya Pradesh, www.ideacellular.com Kerala, Haryana, UP(W), Madhya Pradesh

Reliance Telecom Limited Assam, Bihar, Himachal Pradesh, Kolkata, Madhya Pradesh, www.ril.com North East, Orissa, West Bengal

Spice Communications Limited Karnataka, Punjab www.spiceindia.com

www.spicetele.com Source: http://www.coai.in/network-serviceproviders.htm retrieved on 27.04.2007.

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Big Opportunities

According to the research firm, Strategy Analytics, the market of ultra-low-cost handsets in India is growing at a phenomenal rate - more than 14 times faster than the global handset market. (Source: http://news.bbc.co.uk/2/hi/business/6339519.stm re-trieved on 23.04.2007).

Analysts project that the mobile phone market in India will continue to flourish. Recent estimates by iSuppli Corp. said that it can triple by 2011. (Source:

http://www.isaonline.org/docu-ments/weeklyroundup_apr _13_20_07.pdf. retrieved on 20.04.2007). In India mobile phones are not just used as a com-munication device for business or personal use but are also viewed as status symbols. The average Indian mobile subscriber is cost conscious. Although a majority of Indians use only voice or SMS services, multifunctional cell phones are increasing in demand which provide features like cameras, FM radio, internet access, video recording, etc.

Pallavi Srivastava is a Doctoral Candidate (HRM) at the

Man-agement Development Institute, Gurgaon, India. She has pub-lished paper at the 2nd World Conference on POM and 15th Annual POM Conference¸ Cancun¸ Mexico¸ April 30 - May 3, 2002, and also presented a paper in APROS 12 Conference, MDI, Gurgaon, December 9-12, 2007. Her papers are under review/accepted for publication in reputed refereed interna-tional journals. Her research interest lies in the areas of em-ployer branding, succession management, and innovative practices in HR.

e-mail: [email protected]

Jyotsna Bhatnagar, a Ph.D. from the Indian Institute of

Tech-nology (IIT), Delhi, is an Associate Professor in the HRM Area at the Management Development Institute, India. With over 50 international and national level research writings to her credit, she is to present her paper on ‘Strategic HRM –Media-tor Variables in India” at the Academy of Management Con-ference, USA, 2008. She is an Invited member of the Academy Of Management 2007-Carolyn Dexter International Best Paper Award Review Committee and the recipient of Excellence in Teaching Award, 2007-08, MDI and the MDI Best Faculty Award-PG Students’ Choice, 2006.

e-mail: [email protected]

You don’t have to be a fantastic hero to do certain things; to

compete. You can be just an ordinary person, sufficiently

motivated to reach challenging goals. The intense effort, the

giving of everything you’ve got, is a very pleasant bonus.

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