Creation of a new pricing plan in telecommunication company in B2B segment

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FEDERAL STATE EDUCATIONAL INSTITUTION

OF HIGHER EDUCATION

NATIONAL RESEARCH UNIVERSITY

HIGHER SCHOOL OF ECONOMICS

Saint Petersburg School of Economics and Management

Department of Management

Creation of a new pricing plan in telecommunication company in B2B segment

Bachelor's thesis

In the field 38.03.02 `Management'

Rudenko Polina Stepanovna

Saint Petersburg 2020

Abstract

Eventually, most actions which happens in the business segment are changing with a great influence and help of communication services and tools. Telecommunication services now are playing a key role in any organization because they coordinate all spheres of business from mobile cellular and the Internet connection in offices to the payment and safety with signaling systems. The market is occupied by four main providers, and each of them is trying to lure competitors' clients. The need of this project appeared in autumn when the company measured the customer loss due to aggressive politics of Tele2. The goal of this propose is to create a new pricing plan for the exact telecommunication company to avoid customer drain to the Tele2. There are four main tariff lines with different filling: number of gigabytes, SMS, volume of minutes and unlimited Internet connection. Each line is designed for its own purposes. These existing hidden plans should be combined and discounted according to their filling with minutes, sim-cards amount and the Internet gigabytes. As an expected result new tariff plans have to be cheaper and do not inferior in contents of Tele2 “pots”. The new pricing plan should be created out of existing ones, but not public. Several methods are used successively to develop a tariff: for the implementation plan, a Gantt chart is used, for positioning descriptive statistics and competitive analysis are taken, and regression is used to calculate the optimal set of services. Also, correlation coefficient shows the interconnection inside the tariff plan. All calculations were made in SPSS program As a consequence, the equation is created for adjusting new price based on existing technical and filling abilities. The proposed model allows to offer the company a solution to improve tariffs and become more attractive to customers.

Keywords: tariff plan, telecommunication company, telecommunication services, the Internet, sim-card, competitiveness, discount, small and medium-sized enterprises (SME), gigabytes, SMS, pricing policy, minutes, voice, volumeIntroduction

pricing plan competitor

The telecommunications industry is one of most developing in the modern business (Ministry of Digital Development, Communications and Mass Media of the Russian Federation, 2019). If twenty years ago communications were associated only with cellular, now it has become more wide - streaming television, the Internet, voice mail and many other opportunities and services. This sphere is popular for many reasons. The modern society is impossible to imagine without constant interconnection and exchange of news and communications, which in modern time has become an essential part of our life. Rapid progress of information society depends directly on the development of telecommunications. In this regard, one of the most important goals in the field of ICT is to create conditions for the spread of modern communication networks in all localities of the country and to introduce quality standards for telecommunications services and Internet access (Ministry of Digital Development, 2020).

For the last 20 years the market of telecommunication changed a lot. In 1999 “VimpelCom” made a small revolution - they created a new offer for the potential customers. They dropped a pack with a phone, sim-card and payment card 10 dollar's value - the total price was 49 dollars (1078 rubles). This is how the war of prices started. The beginning of the 2000s It was marked by a rapid increase in the number of mobile subscribers - it doubled each year - and the rapid expansion of federal operators (MTS, VimpelCom and Megafon) into the regions. Federal operators gradually swallowed up regional ones. The more subscribers there were, the cheaper were their services; this made it possible to reduce prices and acquire new subscribers. In 2004 Russian government created the Communications Act, and it became a law. One of its important points was the creation of the Universal Service Reserve: a fund where all operators are required to pay 1.2% of the revenue from any communication services. Therefore, the government instructed Rostelecom to provide all Russians with basic communication services: a payphone and Internet access. The rapid growth of the telecommunications industry made regulatory innovations necessary. Practically very important was the rule of the law on communications - pays those who call. Before creation of this rule, mobile operators could take money from both sides of the conversation. What is more, the subscriber appeared the ability to choose between a subscription and time-based system for paying for local telephone services. Year by year the market of telecommunications continued growing and B2B communications transformed.

The world of business in 21st century cannot exist without stable the cellular network and the Internet connection. Millions of trades are done by a phone call or online every day. Video conferences, calls, cloud services, BigData, corporate mobile communication - all these tools became an inherent part of the company's communication instruments. An important driver for the development of B2B segments is Internet of things services, including “vertical” solutions. In addition to Internet of things a significant part of this area is based on the development of video surveillance systems and video analytics. In B2B, the so-called cloud services segment begins to play an increasing roles segment. The major role plays the cellular network and the Internet, and many aspects become important when company chooses a telecommunication provider: the quality of the connection, number of sim-cards and amount gigabytes are weight. This is one of the most competitive markets in Russia, the niche is occupied by four big providers (Megafon, VimpelCom, MTS and Rostelecom in governmental and business sector). Competition between providers intensified, and customers learned to refuse services providers and effortlessly move from one company to another and often again to return to the first or go already to the third.

Today the market is won not only by those providers for which all departments work efficiently based on important customer information, but also by aggressive marketing policy and dumping. Providers who correctly identify customer segments and needs increase customer's loyalty and attract new ones. Personalized service helps strengthen customer relationships. As a result, on such a specific market the customer drain is highly expected and telecommunication companies are trying to be as flexible as they could. It is extremely important for companies to retain clients and build strong and trustful relationships: most customers use several services of one provider: mobile communications (cellular and the Internet), fixed internet and wi-fi and sometimes television. When a customer cancels one service, most often he also refuses the rest of the service package. Under the influence of strong negative emotions that forced them to leave the operator drained clients usually willingly share the reasons of leaving. This entails can become the reason of rumors and the loss of other customers.

The problem for the company X appeared when Tele2, which mostly operates in business to customers and business to business sectors providing the mobile network, became a part of Rostelecom. In November 2019 the company renewed tariff plans called “My Team” for corporate clients in the end of 2019. “My team” is one of the most flexible tariffs - customers can choose filling themselves: number of sim-cards, gigabytes, minutes to talk, SMS and MMS and the price depend on the elected services. Among the telecommunication companies this type of tariffs are called “pots”. Even when the customer chooses the maximum of all listed services it would be cheaper than buying a tariff for each employee. This aggressive pricing policy of Tele2 has led to the customer loss for the company X. Hence, the company decided to adjust their hidden corporate tariffs to be more demanded and retain existing customers.

The aim of this project is to recreate tariff plans and make adaptive model for the further pricing changes.

In order to make this project successful list of objectives should be gained:

to understand how price works on oligopolistic market

to calculate the loss of customer drain;

to study telecommunication metrics;

to identify all competitors' “pots”;

to download all hidden tariff plans of company X;

to use statistical tools for the calculations;

to combine and discount these plans for creating own “pots”;

to compare competitors' “My Team” with new tariffs;

to present them the company.

The research will show how changes and adjustments are made in telecom sphere on the practical basis in international companies, how company is ready to adapt for market challenges even being on the top. The main limitation could be the confidentiality of information - especially financial indicators because it is business to business segment, in this case all financial indexes will be multiplied by a coefficient. Moreover, official data and methods for calculating the cost and price of services per minute is confidential. In addition, there is no accurate pricing data at Tele2. Data is considered for only one year but not a several years period.

The paper is divided into a certain segment and structured in a special order. In the first part presented a theoretical background on the telecommunications both technical and managerial parts. Also, discussed customers' preferences in telecommunication and main competitors. Second part of the project is situation analysis with the market description, how telecommunications adapt to constant changes and current economic situation and why the project is needed. The project parts show a detailed description of the calculations and conclusions made, a solution for the company is also presented. In final the importance and academic contribution with limitations faced during the project are demonstrated.

1. Theoretical background

This project will be focused on developing of a new pricing policy and adjustment model out of existing hidden in company but do not face relevant needs. In this paper main attention in theoretical background will be paid on telecommunication sector and creation of a new tariff plan.

This part will be oriented on definition of customers preferences in telecommunication service. Then will be discussed the role of firsts-mover advantage in telecommunication networks and development of telecommunication infrastructure. Finally, will be made an overview to the general creation of the tariff plans.

The importance of this project is defined by the company's need, and the theoretical background is making the current situation in the telecommunication sphere understandable to the aim of the project.

The range of professional terminology will be used:

Coverage - the area which is called “cells” where the mobile and internet connection is the strongest; (EY 2013)

Hidden tariff plan - tariff plan, which is not listed on the website, it can only be offered by the company to the consumer under various circumstances. (VEON official website)

In the paper some abbreviations are used: Gb - gigabytes, TP - tariff plan, telecom - telecommunications.

1.1 Customer preferences in telecommunication service

The telecommunications industry is now of the leading position of the information era: it provides bigdata, voice, graphics and video transmission, the Internet at boosting higher speeds. While fixed telephony was once the main service in the industry, wireless or mobile services, and cable and satellite communications constitute a growing part of the industry. One of the fastest growing and important sectors of the telecommunications industry is the mobile telecommunications sector, which is becoming one of the most vulnerable infrastructures in most countries. This happened as the result of tremendous technological progress and an increase in the number of network operators in the competitive market. (Shin et al., 2011). Various of researches in developed countries payed focused their studies on telecommunication in mobile services only and their influence on the market of telecommunications (Grzybowski, 2005; Kim, Byun, & Park, 2004). Customer preferences were mostly measured by rankings or ratings. The main challenges for the author is the explanation and interpretation of results to avoid falsification due to data could not reflect the reality (Shin et al., 2011)

The strongest connection to the brand creates service quality. Also, the comparison of price for mobile services and salaries showed the interdependence, by the way one-time discounts cannot influence the situation with the brand loyalty, sales have to be permanent or compensate the future costs for a consumer (Shin et al., 2011).

1.2 First-mover advantage

The dominant role on the telecommunication market plays the first-mover advantage which offers technological leadership, assets purchasing and cost settings (Bijwaard, Janssen, & Maasland, 2008; Whalley & Curwen, 2006). According to Whalley & Curwen (2011): “Kerin et al. (1992) questioned the extent to which first-mover advantages exist, other authors have chosen to highlight the existence of first-mover disadvantages. For example, later entrants will benefit from the market-making efforts of the first mover in terms both of creating the market as well as resolving technological uncertainties (Lieberman & Montgomery, 1988, p. 47). New entrants may exploit technological changes as they compete against the first mover but, by drawing on Scherer (1980) and Lieberman and Montgomery (1988) suggested that this was not as one-sided as was implied given that there were examples of first movers proving themselves to be aggressive followers of technological change. In other words, the incumbent waited until the later entrants demonstrated the viability of the technology before aggressively adopting the technology itself”.

Coeurderoy with Durand in 2004 probed the interconnection between first mover advantage and the market shares of a company. Early movers created the rules and conditions for the new entrants these conditions made the market acceptance highly difficult for newcomers. Order of entering a market in future influenced the market shares of a company and their position.

1.3 Telecommunication infrastructure

Information and telecommunication infrastructure (ITСI) is an organizational and technical association of software, computing and telecommunications facilities and the relationships between them, which provides information, computing and network services. The components of a corporate ITCI are, as a rule, geographically distributed, under one system administration, and follow a unified management and development policy, including the methods used to implement the reliable functioning of services. Reliability of ITСI components is maintained at a high level through proper design, testing, installation and comprehensive maintenance, including support for all necessary software updates. However, traditional methods to achieve the required reliability of hardware are insufficient, because technology and physical laws limit their reliability (Masich, 2018). Information and telecommunication infrastructure are a technological system intended for data transmission over a communication line. In recent years, the process of globalization of various fields of activity intensified a need new in ways of ensuring work and implementation of new telecommunication technologies. The telecommunications sector provides access to information resources, data transfer, business interaction, everyday communications of the population. The level of development of telecommunications infrastructure and its relevance by the population allows us to assess the readiness of the economy and society for digital transformation (Adrakhmanova & Utyatina, 2018). Telecommunication infrastructure is directly related to the development of these processes. Information and telecommunication infrastructure components (Lee, Gholami, & Tong, 2005):

Disclosure of information systems;

Increase their effectiveness;

Ensuring the general principle of development, creation and improvement of operation.

Telecommunication infrastructure plays a huge role in economic development of the country (Roller & Waverman, 2001). Litan and Rivlin (2001) states that influence of growth in economy and the Internet development depends on reducing cost strategy and corporate engagement.

1.4 Tariff plan creation and pricing policy in telecommunications

The process of creation of a new tariff plan is very labor and time consuming, there is no model which can be used by all operators. It depends not only on developers' need but also on competitors, investors and potential consumers. The new tariff plan should be attractive for the target audience, but at the same time company needs to reduce expenses on creation and launching (Bogdanova et al., 2018). The general formula of tariff plan creation: determination of previous set of subscribers, identification of the most needed services. Then needs of company and investors should be measured and only after than begins the prosses of creation, agreement and launching. According to Bogdanova and Neklyudov (2018): “From time to time modifications are issued, and new tariff plans are developed. Therefore, there are a number of tariff plans offered by a telecommunications company, which may exist simultaneously. However, not all of them are available by open access for subscribers. All of the foregoing considerations concern already existing tariff plans. However, one of the main streams in a telecommunications company's tariff policy is developing new tariff plans. The reasons that force the company to develop new tariff plans are serious rivalry on the telecommunications market, the high-tech nature of the market, as well as active changing of subscribers' consumption paradigms relating to services on offer”.

Nekyudov (2017) in his dissertation expresses that the cessation of the extensive growth in the telecommunications services market and the increasing competition between main telecommunication companies, forced the problems of forming its equal pricing policy. This contributes to the fact that the strategy of the formation of the company is reoriented by management from the field of extensive expansion towards intensification. This happened due to the diversification of tariff plans and companies are trying to take into account customers preferences. The need of creating a concept and methodology for creating new tariff plans based on the preferences of telecommunication customers companies of the Russian Federation have not been fully developed yet and not commo for Russian companies in general. “This is largely due to the fact that previously there was no need for objectivity and accuracy in taking into account customer preferences from telecommunications companies, which contributed to a significant decrease in consumer loyalty, expressed in increasing subscriber churn of several leading telecommunications companies in recent years,”- Nekluydov(2017). The use of data analyzing methods to assess the preferences of mobile consumers in practice is unsystematic and often useless. But at the same time, theoretical studies of both international and domestic authors on the case of tariff policy formation are taken into account. All this necessitates can be improved by existing mechanisms for the formation of the tariff policy of a telecommunications company. These mechanisms are based on an integrated approach using methods of intellectual analysis and mathematical modeling. Mostly the research was based on development various information-logical models for the customizing of a lean pricing policy of a telecommunications company based on the analysis of customers profiles. This principle gives the telecommunications company opportunity to maximize profits not affecting subscribers' interests. Based on user's cellular analysis the artificial data mining techniques can be used. All tariff lines can be characterized by a standard set of certain characteristics that differ in their values. While choosing a tariff the subscriber is motivated by certain need that determined by his own preferences and therefore by consumer behavior. If while using telecom services, the customer experiences bad quality of connection caused by the specifics of this tariff plan or company's policy that can lead to a decrease in subscriber loyalty to a brand. Certain characteristics of this is the change of the outflow of subscribers for each subscriber cluster using a specific group of tariff plans.

In a competitive environment, the successful conduct of a business largely depends on the ability to focus on the client and offer services that match his needs (Kukharenko & Borovskiy, 2017). A service created in accordance with the identified demand is an unconditional value for the consumer and becomes the key to successful market activity of the company and the source of its competitive advantages. The service has the best consumer and price characteristics than the service of competitors Thus, the pricing policy of the company is a key element of the marketing mix (Andreeva et al., 2015). The change in marketing strategies in the telecommunication business was determined by the stages of development of national industry markets, the conditions and guidelines of the companies. But within the framework of any marketing concept, the formation of a flexible and adapted to the needs of customers tariff policy refers to the key marketing tasks of telecom operators (Kukharenko, 2015). An effective way to solve such problem is determined by the development prospects of various telecommunication companies (Kukharenko et al., 2013). In most tariff lines payments by subscribers are based on pre-paid base (fee for installing telecommunication equipment and network connection), a monthly fee (for a month, a half year or a year), and payment for current traffic. (Kukharenko et al., 2017) Each of these components has a different effect on subscribers' satisfaction and engagement, the company's income and its financial stability. Determining the optimal tariff structure, that is, the relationship between different forms of payments, justifying the cost of package offers are the most important tasks of a telecommunication company at the stage of economic justification of investment projects (Kukharenko et al., 2014). Tariff policy is also an important tool for managing the life cycle of telecommunication services (Kukharenko, 2005). Increasing information needs of subscribers contribute the growth of their requirements for such characteristics as quality of services (Kukharenko, 2012), accessibility of services, quality of intercommunications (Nikulina et al., 2012). These characteristics could be put into the category of priority factors of consumer's loyalty, so the creation of loyalty programs by companies on the basis of purely economic incentives, with the help of discounts, bonuses or other benefits, becomes insufficient; if, apart from a more favorable price, the client does not hold anything, he seeks to turn to another operator offering services that more closely meet the requirements of the client (Kukharenko et al., 2017). Currently, mobile services are provided either with a predefined availability and quality (as a rule, this is the provision of inter-operator services or services to small corporate clients) or according to an additional service level agreement for corporate commercial clients or state-owned companies (Kukharenko, 2017). Recently, mobile services are provided with a already stated availability and quality (Committed Information Rate) or according to an additional service level agreement for corporate commercial clients or state-owned companies, sometimes companies can offer special prices and discounts for the corporate clients. For individuals, operators usually offer standard services without guarantees of availability and quality (Devyatkin et al., 2012). For the last five years, the three most popular mobile services: voice mobile communications, mobile Internet access and short messages are represented by a large line of tariffs and additional options (Kukharenko, 2012). However, an analysis of the tariff offers of mobile operators does not reveal the presence in the tariffs and options of the ability of the subscriber to adjust the quality of the provision of communication services or the quality of the provision of technical support in case of problems encountered by subscribers during the operation of the service (Kukharenko, 2017). Technical capabilities for providing services with differentiated quality characteristics to mass users exist (Butenko et al., 2008). Moreover, while creating a new pricing policy technological, economical, and industrial.

Figure 1. Pricing factors for tariff costs identification

(Nekrasova, Aksenova, 2012)

1.6 Main competitors in Russian market and their strategies

As the market of telecommunications is highly segmented among the companies, the market is occupied by three main competitors - these are the federal mobile operators operating under the brands MTS, Beeline and MegaFon (Trepakov, 2017). Tariffs of mobile operators are extremely dynamic. Marketers of all operators actively monitor trends and consumer preferences, and in accordance with this, they constantly change both the names and the essence of the tariffs themselves. For example, in 2018, the word “hype” was recognized as the most fashionable word, and “MTS” timely released a package tariff with this name (Orlova, 2019). Not surprisingly, he became one of the most popular in the lineup, especially among young people. Each of the operators is trying to think of something new, special. Innovative solutions and innovative business models are one of the main trump cards in the competition (Alekseev et al., 2018). Indeed, today the field of telecommunications has become an integral part of our daily lives, a phone or tablet can be seen at everyone and at any age (Orlova, 2019). However, all techniques do not have any significance without an appropriate tariff plan. That is why every operator is trying to impress and catch consumer's preference in order to keep him in the conditions of fierce for subscriber preferences competition (Sidorenko et al., 2016). But MegaFon differs a little from its main competitors with a unique tariff line. Its idea is not based on the amount of services - the Internet and minutes, but primarily on how a subscriber spends time on the Internet and exact services. They made a tariff for those who cannot live without YouTube, a tariff plan for music subscriptions, a tariff for social media and messengers addicted (MegaFon, webxite).

The operator's tariffs are very variable and fast appearing and closing - every company has at least one leading tariff plans and some supportive lines and theese lines are constantly changing. MegaFon refused to include SMS messages in the package, as it was replaced by messengers a long time ago and provided free access to the most popular of them at all tariffs. As for MTS, this operator offers several interesting tariffs. Like other operators, MTS follows the trends and introduced custom tariffs (Orlova, 2019).

While travelling, the first thing every subscriber thinks about is communicating with the home and calls price. That is why, the user carefully approaches the choice of a tariff plan in order not to think about the cost per minute in a roaming (Orlova, 2019). In 2018 MTS launched the “Zabugorishche” tariff line, according to which tariff package subscribers can use home minutes and the Internet abroad. The minimum cost of subscription to the service is 390 rubles per day, which is charged only while using the connection in roaming (MTS, website). There are small restrictions, including the geographical component of use. Against the background of such an offer from MTS, Beeline services do not seem so attractive: three times less minutes for the same money; the list of countries is limited, also, they rank the country by popularity and personal relations. But the most convenient in this function - is that the service does not require activation, it is automatically activated after the first call abroad. At the same time, MegaFon launched the Roaming Goodbye service. The main difference is the advantage of this proposal, the absence of restrictions on the use of different tariffs. The operation allows you to use the price of calls in roaming for all subscribers (Orlova, 2019). Thus, using flexible and adjusting tariff plans, leading mobile operators are competing for customer's loyalty and increasing the competitiveness of companies (Makarov & Galkov, 2013).

1.7 Tariff plans' costs

According to Mobiset.Ru the methodology for the formation of operator services is based on costs, which are divided into two types: basic and indirect. The basic costs include: rental channels; purchase costs network equipment, payment for transit operator services, expenses for roaming and other services of other operators, depreciation costs for tangible and intangible assets, radio frequency payment; payment supervisory authorities (including those that go past the budget), expenses the operation of network equipment, production wages employees and deductions to extrabudgetary funds. Indirect (overhead) costs include salaries of managers and business services, room service, depreciation of low value and wearing items including office and household materials, transportation costs. Also, marketing expenses are included: costs of audit and consulting, banking, legal, security, information services and online conferences. Based on all expenses, each telecommunication company forms a set of services that will be demanded among customers the social layer to which it is directed, and which will respond costs required for commissioning and maintenance.

The operator should proceed, in first of all, from the personal preferences of the subscriber and his solvency. To enable the client to form their own future service package and refuse unnecessary options. It significantly increases consumer interest in the operator of their choice (Ermeev, 2017).

2. Analysis of situation

The market of telecommunications is highly segmented and occupied by four main competitors. For the better understanding of current situation, each company should be presented, and strong sides have to be described. Today Russia follows the scenario of technological development, repeats global international trends: high-speed communication and Internet access technologies are developing rapidly; the supply and consumption of modern information and digital services is growing; the demand for high-quality diverse informational, educational and entertaining content is increasing.

2.1 Competitor analysis

To begin with “MTS” the largest telecommunication operator in Russia. It was found in 1993. In the early 2000s MTS started residual active international expansion, concentrating on the markets of CIS countries. According to the data and annual report the active client base is equal 104,7 million subscribers and the best quality of coverage all over the Russia. MTS offers a huge variety of B2C products starting from regular cellular and unlimited Internet connection and finishing with MTS banking and subscriptions to streaming platforms, online libraries, Steam and other entertainment opportunities. But it also concentrates on B2B market offering BigData, media marketing tools, payment systems, IT of things, IT security in addition to telecommunications, wi-fi and the fixed Internet connection. Based on the annual report the income from B2B segment is 50% out of the total revenue of the company (60,4 billion rubles), which is equals 30,1 billion rubles. These numbers show how important for the company to invest money in corporate segment development, because as it was said earlier - now there are more sim cards for the regular customers than customers. That's why, MTS now pay attention on new business developments. An important driver for the development of B2B segments will be IoT services, including “vertical” solutions. In addition to IoT, a significant part of this area is based on the development of video surveillance systems and video analytics. In B2B, the cloud services development begins to play an increasing role.

The second by size and coverage is MegaFon, it was founded in 1993 and now operates in Russia, Tajikistan, Abkhazia and South Ossetia. According to the data by 2019 MegaFone has 75,2 million subscribers, which is 0,32% less than in 2018. According to a study by Ookla's Speedtest service developer, which results were quoted by Forbes in July 2019, MegaFon provides customers with the fastest mobile Internet in Russia. The average data transfer rate in the MegaFon network, according to the results of the study, turned out to be 1.5 times higher than similar indicators of other operators. As of 2019, MegaFon has more than 238.5 thousand base stations in Russia, of which 98.1 thousand in 4G format (Forbes). MegaFon has the same activity as MTS but with small differences. Few years ago, MegaFon bought back all remaining shares on the Moscow Exchange. For this, he paid investors 659.26 ruble per share. In the financial world, this process is called delisting. It means that the company's shares can no longer be bought on any exchange in the world. Securities of MegaFon have been traded on the stock exchange since 2011. During this time, the operator paid high dividends. In 2013-2016, the yield was about 10%. In 2016, the company began to have difficulties: capitalization decreased, and shares were excluded from the MSCI Russia stock index. Large investors began to sell their shares in the company. In March 2019, MegaFon made a mandatory buyback of its shares and increased its stake to 99.2%. On June 3, 2019, trading in MegaFon shares also ceased on the Moscow Exchange (Rbc magazine). It means that all telecommunication companies share with competitors the market shares in order to build open and fair competitiveness. But MegaFon stopped sharing this information, which is leading to some confusions of the competitors.

The third company is VimpelCom, as two previous ones it was founded in 1993. Comparing with MTS and MegaFon VimpelCom is a part of international group Veon Ltd., with operates in Asia, Africa and post-soviet countries, the company is mostly traded on New York Exchange. VimpelCom was the first company in Russia which started working not only with mobile connection, but also with fixed internet connection. In 2019 Beeline won five nominations for one of the most prestigious customer support awards in Russia and the CIS - Crystal Headset. The operator won in the nominations “Best Program / Practice for Studying and Understanding Clients”, “Best Small Contact Center”, “Best Practice for Outgoing Interaction with Customers” and was also highly rated by the jury in the category “Best Small Team for Customer Service”, “The best outbound team.” But, unfortunately now the company's market share is less than MegaFon's and MTS, so they have decided to start very aggressive politics. Due to this new politics the company has decided to change the organizational structure and the heads of the company. The following units are formed in the Beeline organizational structure: commercial unit, a unit for strategy and client experience, a unit for legal support, interaction with public authorities and compliance.

The fourth company is Rostelecom - it provides services of broadband Internet access, interactive television, cellular communications, local and long-distance telephone communications, etc. It occupies a leading position in the Russian market of high-speed Internet access, pay TV, data storage and processing, as well as cybersecurity. In the mass market, the company is developing a line of services for the family, including basic communication services and digital solutions for Smart Home, online education, gamers, etc. The company also creates ecosystems of digital solutions for business, both for large federal corporations and for small and medium enterprises. It acts as an executor of various government programs in the field of information technology: the creation and development of e-government infrastructure (including the governmental services portal). Most governmental tenders are won by Rostelecom, because company's president and chairmen are politicians. Rostelecom is traded on Moscow Exchange. It is a key participant in the priority national program “Digital Economy” and implements federal technology and IT projects (Tass, 2017). In 2020 Rostelecom consolidated the fifth telecommunication operator - Tele2. On February 2, Rostelecom and VTB signed binding documents on the transaction, confirming the previously announced parameters: Rostelecom acquires a 17.5% stake in Tele2 for 42 billion rubles, 27.5% for 66 billion rubles from an additional issue of Rostelecom shares in favor VTB. The state operator receives another 10% of Tele2 in exchange for 10% of its own ordinary shares, which are on the balance of the subsidiary Mobitel LLC (Rostelecom subsidiary) - the amount of the contract is 24 billion rubles (Inretfax, 2020). Why have Rostelecom bought Tele2 - Rostelecom is still the largest and most powerful operator in the market of fixed communication systems such as the internet and phone connection. At the same time, Tele2 was not very successful on the fixed services market but it's activity on the mobile market has always been extremely profitable. Rostelecom find a way to enter the mobile market quickly - to buy Tele2, this led to success in both directions: fixed and mobile communication. According to the data by 2019 Tele 2 has 45,9 million clients. The chart below presents the change in subscribers amount in 2019. It can be seen that Tele2 has the most significant growth - 1,88 million of new subscribers, whereas VimpelCom loses their clients (-0,92 mln subscribers). MegaFon's and MTS's customer base is growing too and the gap between those companies is reducing.

Figure 2. Number of subscribers in telecommunication

The mobile communications operator Tele2 received an award in five nominations of the “Crystal Headset” - the most prestigious professional competition in the industry of contact centers in Russia and the CIS countries in 2020. The means that the customers are the most loyal and committed to the brand. Tele2 follows the politics of low prices in both B2C and B2B segments.

2.2 Coronavirus influence on telecommunications

Year by year companies implement new technologies to attract new customers and retain the current ones. But in the February 2020 the Covid-19 stroke the world, and now businesses are trying to be find more cheap and flexible options and services. The pandemic of virus COVID-19 which flared up in different parts of the Earth, has brought into life many people, somewhere unexpected and on the contrary the changes are expected especially in business. Due to the announcement of quarantine in many countries, employees of many companies have to switch to a remote mode of work, which affected the work of the Internet. In addition to influencing the quality of the Internet, changes have occurred in the work of social networks, as well as streaming and other services. COVID-19 accelerated the digital transformation of enterprises - many had to transfer almost all the processes to online - and forced entrepreneurs to find new ways to use high technology and adapt in this situation to achieve their goals. Companies use all means to digitalize, including artificial intelligence and big data. Now telecommunication companies are trying to adjust for the current situation and create new ways of supporting and retaining clients.

MTS created a new tariff and began to do a newsletter with a proposal to switch to a preferential tariff for corporate clients who are struggling with coronavirus. The tariff is launched for doctors and medical personnel who work with patients with coronavirus.The tariff includes 600 minutes per month, 600 SMS and 10 GB of mobile Internet. The grace period when all these services are free for subscribers lasts three months. After this period, the subscription fee for the tariff will be 200 rubles. per month. Access to this tariff has already appeared in Moscow. Later it will become available to employees of medical institutions in other regions. Instructions for switching to a preferential tariff at the first stage will be received by more than 5,000 employees of infectious diseases hospitals.

To support businesses MegaFon has launched a special line of tariffs that provide Internet access without speed limits for those who work remotely and are not able to use a home wired network, the company's press service said. According to the press service, over the past few weeks, sales of modems and routers in MegaFon network stores have quadrupled, because due to the general transition to online and remote work, customers and businesses are trying to adapt for the current working situation. In this regard, the company offers its customers new tariffs "Download!". (RiaNews.Tomsk, 2020)

Beeline Business and Alfa Bank decided to cooperate and created additional anti-crisis measures to support small businesses. The companies are launching a special offer “We don't leave our own!”, Which will help small businesses to constantly keep in touch with colleagues and customers, as well as conduct vital financial operations even in crisis conditions. The anti-crisis offer includes the opening and free maintenance of an account with Alfa Bank, a complete set of payment instruments for settlements with counterparties and revenue management for the entire history of the client's relationship with the bank, as well as a communication package on favorable terms with a free 3-month period from Beeline Business. The offer is available for connection until May 31 of the current year.Beeline Business within the framework of the action will provide a free connection for 3 months, which includes:

mobile communication package (up to 500 minutes, up to 10 GB, 100 SMS per month);

cloud servises: call forwarding to mobile phones, virtual numbers for calls over the Internet;

SMS package: 1000 messages for corporate mailings on our own client base.

Alfa-Bank provides a perpetual "Free Forever" service package, which includes:

free opening and maintenance of an account for a business;

transfers up to 100,000 ? per month from an IP account to a personal account in Alfa Bank without commission;

three payments without any commission per month to partners in other banks;

all payments to the budget and tax authorities;

free issue of the first Alfa-Business plastic card and all digital B2B cards;

Free online banking and online bookkeeping.

Beeline Business also provides additional opportunities for customers of the “Don't give up!” Campaign. So, they will be able to connect “FTX Beeline” (FTX is a legal entity created specifically for the reception, processing, storage and transfer of fiscal data to the Federal Tax Service (FTS) of Russia) for free for one year and use the Internet for ticket offices without charging for three months. The operator also provides free access for two months to the staff monitoring system of employees “Unified Monitoring” and one month of access to the Mobile Enterprise application for tracking tasks, calls to customers and conducting effective sales. (Beeline, official website).

Even with all these adjustments the client drain is still very high, and the companies are trying to follow the chosen strategy before the pandemic has started, but now the need of the project became more significant.

Figure 3. Growth of traffic use

MTS said that during the Covid-19 the traffic in instant messengers and social networks has quadrupled, the Internet traffic has doubled, and in general traffic has increased by 40%. Beeline representatives announced a 15% increase in call volume and about a five percent increase in mobile Internet traffic. The load on the broadband Internet access network, according to their data increased on average by 20-30%. MegaFon, according to the company, did not record an increase in mobile Internet consumption, but reported an increase in daily traffic in the fixed-broad network to 60%. According to Rostelecom, the introduction of quarantine led to a slight increase in traffic, it increased by only 10%.

Tele2 also decided to support corporate customers during the spread of the Covid-19 infection. To help small and medium-sized businesses adapt to digital reality in a short time, the operator introduced a number of compensation measures in the B2B segment. Until May 31, 2020, new Tele2 customers will be able to activate the My Business M corporate tariff for 1 ruble. With the transition of organizations to remote work, Tele2 business subscribers began to use corporate communications more. The operator offered the business community a unique product “Now free, then profitable.” By May 31, 2020, new operator's customers can activate the “My Business M” tariff for only 1 ruble. The cost of the tariff is stored for one month. Such a solution will be optimal for any small business sector - the tariff offers 25 GB of Internet traffic, free social traffic (What's App, Viber and Instagram), as well as free access to Yandex.Maps and Yandex.Navigator. At the same time, Tele2 offers unlimited calls for calls within the company, as well as to all operator numbers throughout Russia. Such an offer will allow corporate clients to test communications, set up communication between employees and evaluate a package proposal, while saving the company's budget. The most popular service during the period of self-isolation among metropolitan B2B clients was target SMS.(Tele2, website)

2.3 General trends in telecommunication in 2019-2020

Market of telecommunications is not only adjusting for modern trends in business but create new technologies and services that organize and creates company's infrastructure. As market becoming more and more digitalized telecommunication companies implement new services and follow trends necessitated by the business needs:

Development of superfast connection 5G. “Having already built trust with their clients, they can leverage 5G connectivity to enable the whole B2B2X supply chain,” - Annders Lindbald

Managing Internet of things (IoT - is a system of interconnected computer devices, mechanical and digital systems that provide unique identifiers and transfer the data over the network without requiring human or human - computer affiliation (Rouse, 2019))

Cloud services. “The development of IT in 2019 is determined by such trends as the formation of a convenient digital ecosystem of solutions and the possibility of a quick reaction to market changes, the development of cloud technologies as well as the introduction of blockchain technology. In 2019, we devoted all our efforts to creating a reliable digital ecosystem of solutions for the automation and cloudification of infrastructure and services. In addition, we will focus on the mutual integration of infrastructure solutions,” - Frederic Vanoosthuyze, MegaFon's CTIO

Package tariff lines are the “new” trend in telecommunications. A package offer is a set of packages of all the main types of options - calls, SMS, MMS, the Internet for a very flexible monthly fee usually.

Each operator of the "Big Three" has in its assortment package offers. But they not much differ from each other. The main advantage of these tariffs is the ability to call without restriction the numbers of your operator within the home region throughout all Russia and fixed amount of the gigabytes, that can be enlarged if need after their exhaustion. And in 2019 Tele2 has dropped their first combined package for B2B segment, which became extremely successful due to cheap price and big filling. Tele2 has traditionally followed the strategy of the discounter operator. If while market research before launching of a network in a new region, the company suddenly discovers that one of the competitors has already been working there, Tele2 reduces the tariff prices to become cheaper than the competitor. Tele2 has never hesitated to lower the prices or no, the choice of the company always is falling on reduction of costs. But at the same time, due to such cheap prices the quality of cellular and connection is much lower than “Big Three”. But few years ago, Tele2 decided to change the strategy, the CEO Sergei Emdin mentioned that the world of telecommunications had changed, and the company needs new strategy. Their strategy and competitive advantage were already outdated. The telecom market is stagnating, there are no new subscribers.

It was chosen to switch from the discounting - cost differentiation approach to growth strategy, follow the creation of new products and services. The quality of products increased too, what has led to new potential risks on the market.

2.4 Tele2 and the need of project

Not long ago Tele2 introduced a new corporate tariff plan, “My Team” the uniqueness of which is that it is a shared tariff. It allows B2B customers to choose the optimal amount of communication services for the entire company and distribute it among employees. Now the corporate client forms the optimal ratio of minutes, gigabytes and SMS to the entire company. In the private account, the client can adjust the list of employees and distribute a common package of services between them. The client can manage the consumption of packages by his employees, which will better predict corporate communication costs.