cash management in telecom sector

1. Presentation on Cash
Management – Telecom sector
Presented by –
Dipanway Bhabuk

2. Overview of Telecom sector in India
 Telecom services have been acknowledged globally as an essential tool
for the socio-economic development of a nation. India is currently the
world’s second-largest telecommunications market and has registered
exceptional growth in the past few years.
 Telecommunications is one of the prime support services needed for rapid
growth and modernization of various sectors of the economy.
 The total mobile services market revenue in India will reach US$29.8 billion
in2014 and is expected to touch US$37 billion in 2017, registering a
compound annual growth rate (CAGR) of 5.2 per cent, according to
research firm IDC.
 The deregulation of foreign direct investment (FDI) norms have made the
sector one of the fastest growing and a top five employment opportunity
generator in the country.
 The number of telephone subscribers in India increased from 933 million in
March 2014 to 935.81 million (Wireless- 907.44 million, Wireline- 28.36 million)
in April 2014, as per data released by the Telecom Regulatory Authority
of India (TRAI).

3. What is Cash Management ?
 Cash assets management is rapidly emerging as a vital area in any business
organization. "cash assets management “ implies making sure that all the
business generated revenues are effectively controlled and utilized in the
best possible manner to result in gains for the organization. The
management of cash resources holds a central position in the area of short-
term financing decisions.

4. Important areas considered for Cash
Management
 To ensure that sufficient cash is available at each division or section for
routine operations.
 To ensure liquidity in all divisions of the organization.
 To identify surplus funds in certain divisions and transfer them to other
divisions requiring them.
 To invest surplus or idle funds in marketable securities in order to optimize
return on funds

5. Motives of holding cash.
 Transaction or Operation Needs.
 Speculative or Investment Needs.
 Precautionary or Safety Needs .

6. Tools for cash management.
 Cash budget is a tool for forecasting short-term cash requirements of an
enterprise.
 It provides the blueprint of the cash inflows and outflows in the immediate
future period.
 It assists the management in determining the surplus or the shortage of
funds in order to make suitable actions.

7. Ratios related to cash management .
 Current ratio.
 Cash position ratio.
 Cash to current liability ratio.
 Quick ratio.
 Cash interval ratio.

8. Comparison between the Major Companies
in Telecom sector
Name of the
company
Current ratio.
(times)
Quick ratio.
(times)
Cash position
ratio.(times0
Cash to
current
liability
ratio.(times)
Idea cellular
limited.
.266 .259 .0044 .014
Bharti Airtel 3.79 .263 .0053 .018
Reliance
communication

9. Balance sheet of telecom
companies.(2013)