Study of Telecom Sector

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  • 1. BIRLA INSTITUTE OF TECHNOLOGY-NOIDA SUBMITTED TO :- Mrs. Rachna Prateek
  • 2. KHUSHBU CHAUDHRY MBA/4505/08 GAURAV GOEL MBA/4507/08 KHUSHBU KUMARI MBA/4511/08 PRERNA SRIVASTAVA MBA/4514/08 SATENDER SRIVASTAVA MBA/4562/08 SHASHI RANJAN MBA/4566/08 HEENA GAUR MBA/4568/08 STUDY OF TELECOM SECTOR GROUP MEMBERS
  • 3. CONTENTS
    • PROFILE OF PLAYERS
    • CLASSIFICATION
    • COMPETITIVE ENVIRONMENT
    • BUSINESS PORTFOLIO
    • STRATEGY OF LEADER
    • REACTION TO COMPETRTION
    • HOW CUSTOMER BENEFITED
    • CONCLUSION
    • OVERVIEW OF TELECOM SECTOR
    • MARKET STRUCTURE
    • CLASSIFICATION OF TELECOM SECTOR
  • 4. TELECOM SECTOR
    • India is 4 th largest market in Asia after China, Japan and South Korea.
    • India is the 5 th largest in the world and 2 nd largest among emerging
    • economies of Asia.
    • Contribution in terms of revenue is 2.1 % of GDP as compared to 2.8% in
    • developed economies.
      • India is the leading SMS user, followed probably by Philippine
      • World’s fastest Growing Telecom Market - 8 Million plus subscriber addition
      • per month
      • Fastest sale of a million mobile phones – 1 Week
      • World’s cheapest mobile handset made in India – US$17.2 Now plans web
      • enabled phone at $12.
      • World’s Most affordable color phone made in India – US$27.42
      • Third largest in the world after China and US- soon to overtake US tele-
      • density 23.21 %.
  • 5. INDIA Private players were allowed in Value Added Services National Telecom Policy (NTP) was formulated 1994 1997 Independent regulator, TRAI, was estd NTP-99 led to migration from high-cost fixed license fee to low-cost revenue sharing regime 1999 2000 2002 BSNL was estd by DoT
    • ILD services was opened to competition
    • Go-ahead to the CDMA technology
    • Internet telephony initiated`
    • Reduction off licence fees
    2003
    • Calling Party Pays (CPP) was implemented
    • Unified Access Licensing (UASL) regime was introduced
    2004
    • Intra-circle merger guidelines were estd.
    • Broadband policy 2004 was formulated —targeting 20 mn subscribers by 2010.
    2005
    • Attempted to boost Rural telephony.
    • FDI limit increased from 49 to 74%.
    2006 Number portability was proposed (pending) Decision on 3G services (awaited) 2007 EVOLUTION OF TELECOM SECTOR 1992
  • 6. MARKET STRUCTURE
    • Divided into 23 circles, 4
    • metros, 19 circles
    • Further divided into A, B and C
    • category based on economic
    • parameters and revenue
    • potential
    • B & C circles have a population
    • of 300 million, equivalent to
    • that of Pakistan & Bangladesh
    • combined
    METRO Circles Gujarat Rajasthan Maharashtra Orissa Andhra Pradesh Karnataka Tamil Nadu Kerala Madhya Pradesh Uttar Pradesh E Bihar West Bengal Punjab Himachal Pradesh Haryana Jammu & Kashmir Uttar Pradesh W CHENNAI MUMBAI DELHI KOLKATA C Circles B Circles A Circles
  • 7. CLASSIFICATION OF TELECOM SECTOR Fixed line telephony Mobile Telephony Internet Telecom equipments
      • BSNL and MTNL account for 90% revenue for basic services.
    25 private companies for providing cellular services in 19 telecom circles and 4 metro cities, covering 1500 towns across the country.
      • There is no restriction on the number of internet companies and more than 185 companies are operational.
      • Growth in the telecom equipment market resulted in increasing demand for telecom services.
    Private sector available in 18 circles and collectively account for 10% of revenue. Presently, there are five private service operators in each area, and a state operator
      • Growing demand of corporate for applications such as electronic commerce, Internet leased lines, ISDN, VPN etc is driving the growth of the internet services market.
      • Key players like BSNL, BHARTI, RELIENCE, TATA, BPL and HUTCHISON will drive equipment market growth.
  • 8. TELECOM PLAYER
  • 9. AIRTEL
    • Owner- Sunil Bharti Mittal
    • Bharti Airtel formerly known as Bharti Tele- Ventures Limited (BTVL) is a JV between Singtel and Bharti Telecom.
    • Providing GSM services in all the 23 circles,
    • Airtel offers broadband and telephone services in 94 cities.
    • First cellular operator to set up cellular showrooms ‘Airtel Connect’.
    • First cellular company to install a second mobile switching centre
    • Tenth largest telecom company in the world
  • 10.
    • Vodafone Essar in India is a subsidiary of Vodafone Group Plc and commenced
    • operations in 1994 when its predecessor Hutchison Telecom acquired the cellular
    • license for Mumbai.
    • Vodafone Essar now has operations in 20 circles with over 54.63 million customers.
    • Vodafone is the world’s leading international mobile communications company.
    • It now has operations in 25 countries across 5 continents and 40 partner networks with
    • over 269 million customers worldwide.
    • Vodafone has partnered with the Essar Group as its principal joint venture partner for
    • the Indian market.
    VODAFONE
  • 11. RELIANCE
    • Established in 2002, Reliance Communication is the wholly owned
    • subsidiary of Anil Dhirubhai Ambani Group of Companies.
    • Offers prepaid and postpaid mobile services with R-world and fixed line
    • services with broadband services.
    • In 673 cities, Reliance Communications offers a wide range of telephony
    • services.
    • With an optical fiber network of 80,000 kms, the company aims at providing
    • best services to its customers.
    • Recently Reliance has entered in the GSM technology
  • 12. Aircel is the leading mobile operator company in TamilNadu. The company reached this landmark within 18 months after its operations started in 1999.In December 2003 it also launched itself commercially in Chennai soon established itself as a market leader. The fastest growing telecom operator company in India has now decided to spread its wings in the whole Indian Telecom market till by 2009.The 10 million customer owing company has emerged as a market leader in Assam and in the North-Eastern India within 18 months. AIRCEL
  • 13. POSITION OF PLAYER IN MARKET Source COAI
  • 14. Classification of Players Based on Market Share
    • FROM PREVIOUS SLIDE
    • Market challengers
    • Vodafone
    • BSNL
    • Followers
    • Idea
    • Nichers
    • Aircel
    • BPL
    • New Entrant
    • 1. Reliance
  • 15. COMPETITIVE ENVIRONMENT
  • 16. CHANGING DEMOGRAPHIC
    • Change in working age group
    • 28% urban population
    • Rising Income Level
    • Demand for VAS & Broadband services Among Youth
    • 99% subscriber are Pre-Paid
  • 17. TECHNOLOGY
    • CDMA – Already there are big players in this
    • segment, viz. Reliance, Tata, etc.
    • 3G – Value added services potential still to
    • be tapped fully
    • 2G/3G – GSM Currently commands 70% of
    • mobile subscribers in India
    • Shortage of bandwidth
    • Threat of substitute
    • Low supplier bargain power.
  • 18. ECONOMIC ENVIRONMENT
    • GDP growth rate - Averaged around 7.9 % from 2002-2008
    • Rising Tele-density – Target of 45% by 2010
    • Growing per capita income/disposable Income
      • Rs 12000 in 2002 to Rs 33000 in 2008)
    • Falling Handset Prices
    • Fluctuation in Inflation
  • 19. POLITICAL ENVIRONMENT
    • Disputed 3G spectrum
    • Lack of transparency in spectrum/licence allocation
    • 74% FDI Investment
  • 20. FACTORS FOR COMPETITIVE ENVIRONMENT
      • LOW TELEDENSITY AROUND 21%
      • DECLINING ARPU & AMOU
      • HIGH CUSTOMER BARGAINING POWER
      • LOW SUPPLIER BARGAINING POWER
      • HIGH THREAT OF SUBSTITUTE
      • HIGH THREAT OF NEW ENTRANTS
  • 21.
    • Broadband & Telephone (B&T) services
    • Enterprise services
    • Mobile services
      • Airtel Pre-paid
      • Airtel Post-paid
      • Blackberry Wireless Handheld
    • Value Added Services (VAS)
      • Instant Balance Enquiry
      • 24Hr recharge Facility
      • Caller line identification
      • Call divert,wait & Hold
      • MMS
      • Airtel Live Portal
      • SMS based Information Service
    BUSINESS PORTFOLIO
    • BSNL Landline
    • BSNL Mobile
    • BSNL WLL
    • BSNL Internet
    • BSNL Broadband
    • BSNL MPLS VPN
    • ISDN
    • Leased line
    • Video conferencing
    • Audio conferencing
    • Enterprise solutions
    • EPABX
    AIRTEL BSNL
  • 22. IDEA
    • Pre-Paid Mobile
    • Post paid mobile
        • Roaming
        • VAS
        • Call Management
        • CLIP  
        • Call Hold/Call Wait/  Call Conference
        • Call Divert   Blackberry
    VODAFONE
    • Pre-Paid Mobile
    • Post paid mobile
        • Roaming
        • VAS
        • Call Management
        • Home Calling Cards
        • Gulf Calling Cards
        • World Calling Cards
        • Magic Box Handset
        • Magi
        • iPhone 3G
  • 23. BPL
    • Prepaid Mobile
    • Postpaid Mobile
    • Recharge Coupons
    • Bill Payments
    • Value Added Services (VAS)
    • Service Inquiries
    • SIM Replacements
    • Handset Sales
    AIRCEL
    • Prepaid Mobile
    • Postpaid Mobile
    • Recharge Coupons
    • Bill Payments
    • Value Added Services (VAS)
      • Pocket Internet
      • Voice Station
      • Live Astrology
      • Doctor on Call
  • 24. STRATEGY
    • AIRTEL
      • OPERATIONAL STRATEGY
        • Higher emphasis on ARPU/min
        • A one stop shop for all telecommunication services
        • Exploring opportunities in international markets.
        • Hived off tower infrastructure into a separate entity.
        • Technology Outsource
      • MARKETING STRATEGY
        • Brand Positioning
        • Brand Repositioning
        • Matchbox Strategy- Rural Market
        • Internet Advertising
        • Celebrity Endorsement
        • Event Sponsorship
  • 25.
    • The First to launch full roaming service on pre-paid in the country.
    • The First to launch 32K SIM cards.
    • The First in Asia to deploy the multi band feature in a wireless network for efficient usage of spectrum.
    • The First to deploy Voice Quality Enhancers to improve voice quality and acoustics.
    • The First telecom company in the world to receive the ISO 9001:2000 certification from British Standards Institute
    • Launched a Rs 200-crore innovation fund for promoting entrepreneurship in the telecom sector.
    INNOVATIVE STRATEGY
  • 26. Reaction to Competitors
    • Heavy Investment to improve infrastructure
    • Reduced entry plan against Reliance scheme of Rs25 SIM Cards
    • First range of zero Processing Fee Prepaid Products. Airtel 'Happy Recharge‘
    • Implement of CRM for better customer support.
    • Formed new entity Indus Tower, in collaboration with Vodafone & IDEA
    • Foray in International market
    • Brand Re-Positioning
    • Acquisition of Spice by IDEA.
  • 27. How Customer Benefited
    • High customer bargain power
        • Low switching cost
        • Attractive schemes for new connection
        • Availability of all operator everywhere
        • Number portability will enhance
    • Better connectivity and voice quality at competitive price .
  • 28. CONCLUSION In this changing landscape the winner will be those competition that understand consumers need focusing on usability and actually giving control back to user. The looser will be one that focus on overly technical product differentiation that the majority of consumer will not understand and therefore not use it. Future strategy which make one to be leader in the market are more competitive tariff plans should be launch. More VAS should be provided. Focussing on the Rural market.
  • 29. THANK YOU