BIRLA INSTITUTE OF TECHNOLOGY-NOIDA SUBMITTED TO :- Mrs. Rachna Prateek
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
PROFILE OF PLAYERS
STRATEGY OF LEADER
REACTION TO COMPETRTION
HOW CUSTOMER BENEFITED
OVERVIEW OF TELECOM SECTOR
CLASSIFICATION OF 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
India is the leading SMS user, followed probably by Philippine
World’s fastest Growing Telecom Market - 8 Million plus subscriber addition
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 %.
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
Calling Party Pays (CPP) was implemented
Unified Access Licensing (UASL) regime was introduced
Intra-circle merger guidelines were estd.
Broadband policy 2004 was formulated —targeting 20 mn subscribers by 2010.
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
Divided into 23 circles, 4
metros, 19 circles
Further divided into A, B and C
category based on economic
parameters and revenue
B & C circles have a population
of 300 million, equivalent to
that of Pakistan & Bangladesh
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
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.
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
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.
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
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
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
POSITION OF PLAYER IN MARKET Source COAI
Classification of Players Based on Market Share
FROM PREVIOUS SLIDE
Change in working age group
28% urban population
Rising Income Level
Demand for VAS & Broadband services Among Youth
99% subscriber are Pre-Paid
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.
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
Disputed 3G spectrum
Lack of transparency in spectrum/licence allocation
74% FDI Investment
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
Broadband & Telephone (B&T) services
Blackberry Wireless Handheld
Value Added Services (VAS)
Instant Balance Enquiry
24Hr recharge Facility
Caller line identification
Call divert,wait & Hold
Airtel Live Portal
SMS based Information Service
BSNL MPLS VPN
Post paid mobile
Call Hold/Call Wait/ Call Conference
Call Divert Blackberry
Post paid mobile
Home Calling Cards
Gulf Calling Cards
World Calling Cards
Magic Box Handset
Value Added Services (VAS)
Value Added Services (VAS)
Doctor on Call
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.
Matchbox Strategy- Rural Market
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.
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
Acquisition of Spice by IDEA.
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 .
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.