Special report on communication sector
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    Special report on communication sector Special report on communication sector Document Transcript

    • www.TheEquicom.com +919200009266 Page 1 REPORT ON TELECOM SECTOR
    • www.TheEquicom.com +919200009266 Page 2 PREFACE:- India's tele density has improved from under 4% in March 2001 to around 78% by the end of March 2013. Cellular telephony continues to be the fastest growing segment in the Indian telecom industry. The mobile subscriber base (GSM and CDMA combined) has grown from under 2 m at the end of FY00 to touch 919 m at the end of March 2012 (average annual growth of nearly 65% during this 13 year period). Tariff reduction and decline in handset costs has helped the segment to gain in scale. The cellular segment is playing an important role in the industry by making itself available in the rural and semi urban areas where tele density is the lowest. The fixed line segment continues to decline in terms of the subscriber base. It has declined to 30.58 m subscribers in March 2013 from 32.17 m in March 2012. The decline was mainly due to substitution of landlines with mobile phones. As far as broadband connections (>=256 kbps) are concerned, India currently has a subscriber base of 13.8 m. Broadband penetration received a boost from the auction of broadband spectrum. The network providers have stated that they would be looking at boosting the contribution of data to their revenues. This bodes well for the future of broadband services. Given the low tariff environment and relatively low rural and semi urban penetration levels, demand will continue to remain higher in the foreseeable future across all the segments. High capital investments, well-established players who have a nationwide network, license fee, continuously evolving technology and lowest tariffs in the world. Improved competitive scenario and commoditization of telecom services has led to reduced bargaining power for services providers.
    • www.TheEquicom.com +919200009266 Page 3 TABLE OF CONTENT: INTRODUCTION: HISTORY OF TELECOM SECTOR IN INDIA: NEW RELEASE UPDATE OF TRAI: OVERVIEW ON TELECOM BUSINESS: EXPANTION OF THE NETWORK: PRESENT STATUS OF TELECOM SECTORE: IMPRESSIVE GROWTH IN TELECOM SECTORE: MAJOR PLAYERS IN THE INDIAN TELECOM SECTORE: TECHNICAL VIEW ON STOCKS: CONCLUSION PAGE- 5 PAGE- 6 PAGE- 7 PAGE- 8 PAGE- 9 PAGE- 10 PAGE- 4 PAGE- 4 PAGE-11&12 PAGE-13
    • www.TheEquicom.com +919200009266 Page 4 INTRODUCTION: The telecom industry is one of the fastest growing industries in India. India’s more than 100 million telephone network is the third largest network in the world after China and USA. With a growth rate of 45%, Indian telecom industry has the highest growth rate in the world. In terms of phones, India occupies the fifth position, after China, USA, Japan and Germany. The development of world class telecommunication infrastructure is the key to rapid economic growth and to bring social change of the country. Indian telecommunication sector has undergone a major process of transformation through significant policy reforms, particularly beginning with the announcement of NTP 1994 and was subsequently re-emphasized and carried forward under NTP 1999. Driven by various policy initiatives, the Indian telecom sector witnessed a complete transformation in the last decade. It has achieved a phenomenal growth during the last few years and is poised to take a big leap in the future also. Such rapid growth in the communication sector has become necessary for further modernization of Indian economy through rapid development in IT. HISTORY OF TELECOM SECTOR IN INDIA: The first wind of reforms in telecommunications sector began to flow in 1980s when the private sector was allowed in telecommunications equipment manufacturing. In 1985, Department of Telecommunications (DOT) was established. It was an exclusive provider of domestic and long- distance service that would be its own regulator (separate from the postal system). In 1986, two wholly government-owned companies were created: the Videsh Sanchar Nigam Limited (VSNL) for international telecommunications and Mahanagar Telephone Nigam Limited (MTNL) for service in metropolitan areas. In 1990s, telecommunications sector benefited from the general opening up of the economy. Also, examples of telecom revolution in many other countries, which resulted in better quality of service and lower tariffs, led Indian policy makers to initiate a change process finally resulting in opening up of telecom services sector for the private sector. National Telecom Policy (NTP) 1994 was the first attempt to give a comprehensive roadmap for the Indian telecommunications sector. In 1997, Telecom Regulatory Authority of India (TRAI) was created. TRAI was formed to act as a regulator to facilitate the growth of the telecom sector. New National Telecom Policy was adopted in 1999 and cellular services were also launched in the same year.
    • www.TheEquicom.com +919200009266 Page 5 NEW RELEASE UPDATE OF TRAI: The Telecom Regulatory Authority of India (TRAI) puts on notice the cable TV subscribers of Digital Addressable Cable TV Systems (DAS) for non-submission of consumer application forms. TRAI releases draft amendments to the interconnection Regulations applicable for Digital Addressable cable Television Systems (DAS) and Tariff Order applicable for all addressable System. TRAI releases consultation paper on “Monopoly/ Market dominance in Cable TV services” Calling applications for filling up the post of Assistant in the Pay Band PB-2 Rs.9300-34800 with the grade pay of Rs.4200 in TRAI on deputation on Foreign Service basis. Quotation for procurement of APC make 10 KVA online UPS systems with latest feature along with three phase in & single phase out and two hours backup. TRAI issues Tariff Orders prescribing Standard Tariff Packages for set top boxes for Digital Cable TV subscribers and DTH subscribers. The Telecommunication (Broadcasting And Cable) Services (Sixth) (The Direct To Home Services) Tariff Order, 2013 TRAI releases “The Telecom Commercial Communications Customer Preference (Twelfth Amendment) Regulations, 2013”. Quality of Service (Code of Practice for Metering and Billing Accuracy) (Amendment) Regulation 2013 (Clarification)
    • www.TheEquicom.com +919200009266 Page 6 OVERVIEW ON TELECOM BUSINESS: As far as the fixed line business goes, the low penetration levels in the country and the increasing demand for data based services such as the Internet will act as major catalysts in the growth of this segment. Increasing choice and one of the lowest tariffs in the world have made the cellular services in India an attractive proposition for the average consumer. The penetration levels in urban areas have already crossed 100%. Therefore the main driver for future growth would be the rural areas where tele-density is around 39.22%. During FY12, a number of things were carried out. The Supreme Court cancelled the 2G licenses that were issued in 2008 by the erstwhile telecom minister. The Court also directed the regulator to formulate new rules for auctioning the spectrum and cancelled licenses. The cancellation of the licenses and subsequent TRAI's proposals on pricing of the new spectrum prompted the exit of 2 foreign operators from the country. The operators continued to operate on thin margins during FY12. Due to intense competition, tariffs continue to remain low. At the same time rising operating costs will force operating margins to continue remaining depressed during the current fiscal as well. In a latest move, operators have cut tariffs on the premium 3G services. Most of them have stated that the decline in tariffs would be offset by increase in volumes which would help boost 3G revenues. Indian consumers are known to be highly sensitive to price decrease and therefore this move to cut prices is expected to drive growth for 3G in the coming years.
    • www.TheEquicom.com +919200009266 Page 7 EXPANTION OF THE NETWORK: The telecom sector has shown robust growth during the past few years. It has also undergone a substantial change in terms of mobile versus fixed phones and public versus private participation. The following table will shows the growth of telecom sector since 2003: During 2012-13, the wireless connections grew at 84%, whereas landlines registered a negative growth. The number of Internet subscribers grew at 38%, while the broadband subscribers grew from a meager 2.16 million to 3.86 million during the year 2012-13. 12.88% 14.68% 16.96% 20.67% 0.56% 0.59% 4.87% 7.13% 8.52% 10.81% 0.33% NETWORK EXPANTION IDEA RELIANCE VODAFONE AIRTEL VIDEOCON MTNL UNINOR AIRCEL TATA BSNL LOOP
    • www.TheEquicom.com +919200009266 Page 8 PRESENT STATUS OF TELECOM SECTOR: Further, National Internet Exchange of India (NIXI) has been set up by DIT to ensure that Internet traffic, originating and destined for India is routed within India. This will substantially bring down the cost of Internet usage. It is expected that NIXI will take appropriate steps for increasing the utilization of such facilities. 184.19 147.7 116.4 97.17 61.57 40.12 5.12 2.26 3.03
    • www.TheEquicom.com +919200009266 Page 9 IMPRESSIVE GROWTH IN TELECOM SECTOR: According to the data released by the sectoral regulator, the Telecom Regulatory Authority of India (TRAI), the industry revenue grew at a sluggish pace of 2.9% to Rs 38,803 crore at the end of March, an increase of 1,082 crore from the quarter ending December when it had recorded Rs 37,731 crore in aggregate revenue. Buoyed by an 8.5% growth in the voice traffic over its network, the Aditya Birla Group's Idea Cellular BSE -0.12 % gained 90 basis points to earn 15.7% of the total revenue generated in the mobile telephony market during the quarter.
    • www.TheEquicom.com +919200009266 Page 10 MAJOR PLAYERS IN THE INDIAN TELECOM SECTOR: AIRTEL: Airtel operates in all telecom circles of India. Its network is present in 5,121 census towns and 457,053 non-census towns and villages, covering approximately 86.6% of the country’s population as of September 2012. Airtel is the largest operator in rural India with 83.82 million subs. as of April 2013. IDEA: IDEA Cellular has been recognized as the 'Most Customer Responsive Company' in the Telecom sector, at the prestigious Avaya Global Connect Customer Responsiveness Awards 2010. Idea's subscriber base as at the end of August 2011 according to the statistics is totaling to 98,441,714 or 16.09% (Approx.) of the total mobile connections in India. TATA: May 23rd, 2013 - Tata Communications, a leading provider of A New World of Communications, today announces that it has signed a five-year strategic voice sourcing agreement with Vonage Holdings Corp. This partnership is a first of its kind between Tata Communications and a major Over-The-Top provider. RELIANCE: Reliance Group’s flagship company, Reliance Communications, is India's largest private sector information and communications company, with over 150 million subscribers. It has established a pan-India, high-capacity, integrated (wireless and wireline), Reliance Mobile services now cover over 24,000 towns, 6 lakh villages, and still counting.
    • www.TheEquicom.com +919200009266 Page 11 BHARTI AIRTEL As per our technical view BHARTI AIRTEL has consolidation phase so investors CAN TAKE LONG POSITION above 300 for the target 325 IDEA As per our technical view IDEA has consolidation phase & stochastic oscillators indicating sell signal so this consolidation is not good for investment so investors should not take any long position in IDEA.
    • www.TheEquicom.com +919200009266 Page 12 TATA COMMUNICATION As per our technical view TATA COMMUNICATION have making bullish engulf pattern & stochastic oscillators indicating buy signal so this is good for investment and investor CAN TAKE LONG POSITION above 180 for the target 200. RCOM As per our technical view RCOM has bullish trend & had broken its consolidation phase so investors CAN TAKE LONG POSITION above 135 for the target 145
    • www.TheEquicom.com +919200009266 Page 13 CONCLUSION: This report is based on our best research and various information of different informative sites. From the past few years in India telecommunication business has been altered. Earlier when telecom industry was dominant in the market but now it is transformed in to more competitive market with further competitors and provides additional services. In India there are so many leading and superior telecommunication service provider companies. The industry has recorded phenomenon growth during the last decade. In modern telecommunication technologies, the requirement for signal reliability is higher and higher but fading is the main challenge for signal reliability. Different types of techniques have been studied to mitigate this fading but MIMO (Multiple Input Multiple Output) has been studied extensively About TheEquicom THEEQUICOM is India's leading Research Tips Providing Company. THEEQUICOM offers all over India’s customers a unique combination of local insights and global perspectives, delivering independent information, opinions and solutions that help them make better informed business and investment decisions, improve the efficiency of markets and market participants, and help shape infrastructure policy and projects. Its integrated range of capabilities includes research and portfolio management; research on India's Equity & Commodity market; equity & commodity research; fund services & risk management advisory services. About TheEquicom Research THEEQUICOM Research is India's largest independent, integrated research house. We leverage our unique, integrated research platform and capabilities spanning the entire economy-industry-company spectrum to deliver superior perspectives and insights to over 350 domestic clients, through a range of subscription products and customized solutions. Disclaimer THEEQUICOM Research, a Division of THEEQUICOM Pvt Limited has taken due care and caution in preparing this Report. Information has been obtained by THEEQUICOM from sources which it considers reliable. However, THEEQUICOM does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. THEEQUICOM is not liable for investment decisions which may be based on the views expressed in this Report. THEEQUICOM especially states that it has no financial liability whatsoever to the subscribers/ users/ transmitters/ distributors of this Report. THEEQUICOM Research operates independently of, and does not have access to information obtained by THEEQUICOM Research Division, which may, in its regular operations, obtain information of a confidential nature which is not available to THEEQUICOM Research. No part of this Report may be published/reproduced in any form without THEEQUICOM prior written approval.