debt fund analysis

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debt fund analysis

  1. 1. FUNDAMENTAL ANALYSIS OF TELECOM SECTOR
  2. 2.  WWW.TRAI.GOV.IN www.moneycontrol.com Ernst & Young report Indian Cellular Association, January 2011
  3. 3.  The Telecom Industry in India is in its growth stage private operators also are providing services which is giving rise to more choice. The Telecom sector in India is experiencing a stage of Mature Growth This is leading to an increase in the level of supply and lower prices. Profit Margins will start declining over time. The new players in the industry are: Datacomm S Tel Ltd Unitech Wireless Ltd By Cell Telecommunications Swan Telecom Pvt. Ltd
  4. 4.  1851: First operational landline was laid down near Kolkata. 1881: The telephone sector started in India . 1985: DOT(Department of telecom) was established . 1986: DOT converted into two a) VSNL b) MTNL 1986:Department reorganized the Telecommunication Circles with the Secondary Switching Areas as basic units. 1994 : First National Telecom Policy was introduced and the sector was opened up for privatization. 1998: First tariff order issued in –thus reforms effective from 1998.
  5. 5.  1999 : The second National Telecom Policy was introduced to take the telecom sector to next level. 2004 : The policy for Broadband was defined with the aim to increase the internet penetration in India. Broadband was define initially as 128 Kbps which was later changed to 256 kbps. Thursday, Jan 20. The MNP scheme was launched first in Haryana in Nov 2010 and now all set to be implemented in all around the nation. 27th September 2011 - 100 SMS per day per SIM for all the customers.
  6. 6. Service Provider wise Market Share as on 31.10.2011
  7. 7.  Reasons for high growth are changes or initiatives taken in the recent years.1. One Indian Plan launched in 2006 heated up the price war in India.2. New Licenses given by Government in 2008 added up in ongoing competition – 120 new licenses awarded.3. Lowest tariffs in the world with local calls reaching 10 paise/min and STD tariffs dropping to 50 paise/min from high tariffs of 17 Rs/min in 19944. Reduction in Handset prices has made mobile a common weapon tool.
  8. 8. 1. Threat of New Entrants - Low2. Bargaining Power of Suppliers – High3. Bargaining Power of Buyers – High4. Threat of Substitute Products – Low5. Intensity of Rivalry among Competitors - High
  9. 9.  Bharti Airtel  Idea Cellular Ltd. Liquidity Ratios  Liquidity Ratios Debt/Equity 0.27  Debt/Equity 0.85 Current Ratio 0.82  Current Ratio 0.61 Quick Ratio 0.77  Quick Ratio 0.51 Interest Cover 45.69  Interest Cover 4.13
  10. 10. RETURN ON CAPITAL EMPLOYEDSR. TELECOM 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10NO. PLAYERS1. AIRCEL 10.16 5.95 6.77 6.48 3.7632. BSNL 10.09 9.94 9.05 4.97 1.46 0.333. TATA 11.41 11.52 10.28 6.53 6.23 4.589 TELECOM4. BHARTI 19.27 20.74 29.06 27.95 28.4 32.725 AIRTEL5. IDEA 7.52 10.44 14.96 16.92 20.64 23.912

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