OpStrat OnlineCase R2

Transcend'15 OpStrat Case Study

Shine Telecom Surat
Raghu Bhai was born in a small princely state near Surat in Gujarat. He studied at Sister
Nivedita School and Junior College at Rajkot. This institution catered to the wards of the rich or the royal families. Teachers were used to handling aristocratic behavior of their students, but
Raghu Bhai was quite the reverse. He was innovative and an entrepreneur to the core. He revolted when a teacher advised class 9 students to learn the value of working with their own hands during the summer vacation. Raghu accepted the challenge from that teacher of earning
Rs. 1,500 during the summer vacation without any help from his parents. The year was 1963 and
1,500 were quite a large amount those days.
Raghu knew that the widowed daughter of their gardener made detergent powder in the servant’s quarter of their palace. The sale of this detergent produced resources for the gardener’s daughter to live. All her customers swore by the quality of her product. Raghu purchased a large consignment of this powder and had it packed as ‘Shine’ detergent. He roamed from place to place on his cycle and sold Shine detergent directly to the customers. He over sold the detergent and some orders booked by him had to be executed by others since his vacation had ended. He had earned a clear profit of Rs. 1771 through Shine detergent sales. The name Shine stuck to
Raghu all through the years of his School and Junior College. Raghu Bhai was forgotten, but
Shine came to the minds of the students and the teachers alike in subsequent years.
Needless to say that Shine Industries were set up at Surat in 1967, i.e. after Raghu passed out of the Sister Nivedita School and Junior College. The parents had lost the privy purses which
Govt. of India used to give to the Princesses whose state had merged with Indian Union after independence. Lack of resources made young Raghu pay special attention to Shine Industries.
The product handled by Shine Industries changed from detergent to nylon fabrics, oil and so on.
Shine Industries was a big name in India in 2001. Statistically this company was recognized to be one of the fastest growing enterprises in the world during the twentieth century.
Telecommunication in India had gone through a lot of changes and in 2001 mobile telephones were getting new lease of life due to continuously reducing tariffs. Mobility was being redefined with each passing day. Raghu Bhai decided to launch Shine Telecoms at Surat towards the end of 2001. The company was to provide limited mobility through technology called WILL. This was a cheaper alternative and the government had been kind to it by offering

liberal terms to the companies offering limited mobility using this technology. Shine Telecoms launched mobile phones based on WILL technology and therefore offered limited mobility. The company scrapped the bottom and decided to work on low profits and high volumes. It planned to get additional profit by providing the handsets to the clients. These instruments were specially made and were meant only for the network of Shine Telecoms. Hence every client who entered
Shine Telecom, had to create a long-term unbreakable relationship with the company by having to buy these exclusive handsets.
The launch of the service was well organized and was aggressively advertised over the
TV, through bill boards and advertisement in press. The tariff was cleverly structured so as to make an already cheap service appear much cheaper than the services of the other companies available at that time. The service appeared to be almost at par with the fixed line telephone expenses. Shine Telecom also announced various limited period schemes which were hugely attractive. Finally Shine Telecoms offered specially tailored packages to some classes of subscribers like the share holders of Shine Industries. Bookings poured in. There were long queues in many big cities outside Shine Telecom offices. Many customers had to spend a full working day to get a Shine Telecom mobiles telephone connection. The press and the professionals in the field were totally baffled by the response received by Shine Telecoms mobile phones. Shine Telecoms network had quickly over taken the networks of many other initially bigger and much older companies. It was declared second largest network in the country in 2003.
Trouble soon besieged the functioning of Shine Telecom. The network had just not been planned for the quantum of connections it was being called upon to provide/handle. The growth rate was frightening and the network engineers were sure that the ability to get calls connected to and from mobile telephones of Shine Telecom network will become unacceptable very shortly.
Connectivity actually deteriorated to much worst levels than those anticipated by Shine Telecom team. Many innovative techniques were introduced to hide poor connectivity. Nevertheless there were queues of angry clients to return their instruments and surrender the connection. Secondly there were serious problems with the billing software of the system. This resulted in bills being faulty and being delayed. Many subscribers received bills bunched together. There were too many billing errors. Lastly the other mobile telephone service providers complained to the telecom regulatory authority about WILL system being given better commercial terms. Shine
Telecom managed to salvage the situation by paying hefty sum to the government as penalty.
This additional burden had to be passed on to the subscribers. This was done by giving full mobility to the subscribers. The bill started becoming more and more inflated and subscribers were truly fed up.
Analyze the functioning of the service provided by Shine Telecom to their mobile telephone clients using WILL technology. Were the problems due to the needs of customer base that starved of connectivity or was it due to the personality of Raghu Bhai? What went wrong and how can the service be set right now?