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A Study Of Telecom Industry


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Presentation on 'Telecom Industry' made by MBA students of Jhunjhunwala Business School, Faizabad.

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A Study Of Telecom Industry

  1. 1. Presented by: akash Agrawal MonuSagar rawalaniVArsha maurya Anmol rastogi
  2. 2.  Telecommunication is the exchange of information over significant distances by electronic means. Telecom stands as one of the most essential elements of the business world in terms of “Connecting the World”.
  3. 3. Historically telecom network in Indiawas owned and managed byGovernment as it is considered as astrategic service. At that time theTelecom industry was monopoly innature.
  4. 4.  Reforms in telecom sector began in 1980 with telecom manufacturing being opened for private sector followed by NATIONAL TELECOM POLICY (NTP) in 1994 and 1999. In 1990 telecom revolution in many countries which resulted in better quality of service with lower tariff rates force Indian policy makers to open up telecom sector for private players.
  5. 5. Phase13 phases Phase 2 Phases 3
  6. 6. The decade of 1980s saw private sector being allowed in telecommunications equipment manufacturing.Mahanagar Telephone Nigam Limited (MTNL) and Videsh Sanchar Nigam Limited (VSNL) were formed. A telecom commission was set up to give focus to telecommunications policy formation
  7. 7.   In 1990s, telecommunication sector also benefited from the general opening up of the economy. NTP 1994 was the first attempt to give a comprehensive roadmap for the Indian telecommunications sector. Availability of telephones on demand (targeted by 1997) . Universal service covering all villages and one pco per 500 persons in urban areas at the earliest (targeted to be achieved by 1997) . Telecom services at affordable and reasonable prices .
  8. 8. NTP 1999 brought in the third generations of reforms in the Indian Telecommunications sector.FDI increase from 49% to 74%.Internet telephony in 2002.Launch of CDMA technology.3-6 operator in each circle.Intra circle merger guidelines.Broadband policy 2004.
  9. 9. Indian IndependentGovernment Bodies Bodies
  10. 10. They formulate various policies and pass laws to regulate the telecom industry in India. Handle spectrum Wireless Planning and Coordination allocation & management (WPC) DoT – Licensee and frequency Department of Telecommunications management for telecom Exclusive policy making Telecom Commission body of DoT Group on Telecom and IT (GoT-IT) Handles ad hoc issues of the telecom industry
  11. 11. They undertake various research activities and monitor the quality of service provided in the Indian telecom industry. They also provide various recommendations to improve the status of telecom operations in India.Telecom Regulatory Authority of India Independent regulatory body(TRAI)Telecom Disputes Settlement and AppellateTribunal (TDSAT) Telecom disputes settlement body
  12. 12. Telecom Regulatory Authority of IndiaAbbreviation TRAIFormation 1997 Created by Telecom Regulatory AuthorityLegal status of India Act, 1997Purpose/focus Independent regulator Mahanagar Doorsanchar Bhawan,Headquarters Jawaharlal Nehru Marg, New Delhi 110 002Region served IndiaChairman J. S. SarmaWebsite
  13. 13. TYPE PublicINDUSTRY TelecommunicationsFOUNDED 2004FOUNDER(S) Dhirubha AmbaniHEADQUARTERS Navi Mumbai, Maharashtra, IndiaAREA SERVED IndiaKEY PEOPLE Hasit Shukla, (President) Fixed-line and mobile telephony, broadbandPRODUCTS and fixed-line internet services, digital television, IT and network service.EMPLOYEES 28,065 (2010)PARENT Reliance GroupWEBSITE
  14. 14. Public companyTYPE (BSE: 532454 NSE: BHARTIARTL)INDUSTRY TelecommunicationsFOUNDED 7 July 1995 (1995-07-07)FOUNDER(S) Sunil Bharti MittalHEADQUARTERS New Delhi, IndiaKEY PEOPLE Sunil Bharti Mittal (Chairman) and (MD)PRODUCTS Fixed-line and mobile telephony, broadband and fixed-line internet services, digital television, IPTV and network services
  15. 15. TYPE Public BSE: 500483TRADED AS NSE: TATACOMM NYSE: TCLINDUSTRY Telecommunications networkFOUNDED 1986FOUNDER(S) JRD TataHEADQUARTERS Mumbai, Maharashtra, IndiaKEY PEOPLE Ratan Tata (Chairman)EMPLOYEES 6,457 (2010)PARENT Tata GroupWEBSITE
  16. 16. PUBLICTYPE BSE: 532822 NSE: IDEAINDUSTRY TelecommunicationsFOUNDED 1995HEADQUARTERS Santacruz East, Mumbai, India Kumar Mangalam BirlaKEY PEOPLE (Chairman) Mobile telephony, WirelessPRODUCTS Internet serviceEMPLOYEES 6,481 (2010) Aditya Birla Group (49.05%)PARENT Axiata Group Berhad (15%) Providence Equity (10.6%)WEBSITE
  17. 17. TYPE State-owned enterpriseINDUSTRY TelecommunicationsFOUNDED 19th century, incorporated 2000HEADQUARTERS New Delhi, India Rakesh Kumar UpadhyayKEY PEOPLE (CMD) Fixed line and mobile telephony, InternetPRODUCTS services, digital televisionEMPLOYEES 281,635 (March 2011)WEBSITE
  18. 18. MAHANAGAR TELEPHONE NIGAM LIMITEDTYPE A publicly-listed state-owned enterprise NSE: MTNLTRADED AS BSE: 500108 NYSE: MTEINDUSTRY TelecommunicationsFOUNDED 1986HEADQUARTERS New Delhi, India Kuldip SinghKEY PEOPLE (Chairman & MD) Fixed-line and mobile telephony, broadbandPRODUCTS and fixed-line internet services, digital televisionEMPLOYEES 45,000 (2010)WEBSITE
  19. 19.  Cheap Calling Services Network Coverage Customer Care DTH Programme Packages Internet Speeds offered Number Series offered Push mail services
  20. 20.  Audio Conferencing Video conferencing Prepaid Mobile Postpaid Mobile Handsets Internet Home Phone Global Calling
  21. 21. Rank Country No. of Phones % of Population 1 95,23,10,000 71 2 86,57,08,379 71.59 3 32,75,77,529 103.9 4 22,74,00,000 118.2 5 22,42,60,000 154.5 6 16,82,64,000 73.1 7 12,12,46,700 95.1 8 10,88,94,518 65.4 9 10,70,00,000 130.1 10 Nigeria 9,05,83,306 64.7
  22. 22. Huge Customer potential : *) Wireless Teledensity increased from 67.98 to 71.11. *) Number of Broadband subscribers increased from 11.89 million at the end of Mar-11 to 12.35 million at the end of Jun-11, registering a quarterly growth of 3.89% and Y-O-Y growth of 30.37%.High Growth Rate: *) The Rural Wireless subscribers increased from 273.54 million at the end of Mar-11 to 289.57 million at the end of Jun-11.. *)Allowed FDI limit ranging from 74% to 100%.High return on Investment: *)Easier to create economies of scale thereby increasing return on investment.
  23. 23. Liberalization efforts by Govt.: *)The share of private sector in total telephone connections is now 84.33% as per the latest statistics available for June 2010 as against 5% in 1999.Lower capital expenditure: *)The Indian telecom market is a high density area, which means more population per tower. This means lower capital expenditure cost.
  24. 24. • Poor Telecommunication Infrastructure Result : Large number of call drops.• Late adopters of New Technology India will be among the last countries in the world to get access to 3G technology. Some estimates suggest that nearly 132 countries across the world already have 3G technology and mobile services in one form or the other.• Most competitive market ▫ 10 to 12 companies offer mobile services in most parts of India, globally, the average is 4.
  25. 25. • A market strongly regulated by Government.• Difficult to enter because of requirement of huge financial resources.• Wireless business segment is growing faster than wire line and more demand is coming for pre-paid services.
  26. 26.  4G Telecom services and 5G services. Value added Services (VAS)  Value added services like M-Commerce (Mobile banking, Mobile Ticketing , M-Marketing, Special Information, Ring tones, etc. offer venues of additional revenue. Boost to Telecom Manufacturing Companies:  Production of telecom equipments in value terms has increased from Rs. 412700 million (2007-09) to Rs.488000 million during 2008-09 and expected to increase to Rs. 575840 million during 2011-12. Telecom Equipment Exports:  Projected teledensity is 1 billion, 84% of population by 2012. the current teledensity is 73.97%.
  27. 27.  Providing fibre Connectivity to 2,50,000 village panchayat by 2012. More scope in content related services, since the consumer is influenced by local culture like Baisakhi, Chhath Puja, religious festivals like Diwali, Chrismas etc., National festivals like Independence Day etc.
  28. 28. MORE QUALITY SERVICE:  Mobile Number Portability forced the Service provider to improve their quality to avoid losing subscribers.  TRAI intentions of rolling out 4G or the fourth-generation technology, known as the ultra-broadband in 2-3 years raising fears rendering 3G services somewhat obsolete.• DECLINING ARPU (AVERAGE REVENUE PER USER): ▫ Telecom companies price wars like per-second billing which is deflating revenues and making sure the ‘survival of the fittest’. ▫ FEAR OF LOOSING LANDLINE CUSTOMERS: Wireline subscriber base declined from 34.73 million at the end of Mar-11 to 34.29 million at the end of Jun-11 with
  29. 29.  Indian Telecom market is one of the fastest growing markets in the world. With 900 million wireless & landline connections (July 2011), Indian telecom has become the second largest network in the world after China. Bharti airtel is the leading operator with 169.19 million wireless subscribers at the end of Jun- 11, followed by Reliance (143.27 million) and Vodafone (141.52 million). The share of private sector in total telephone is about 85.62% as on June 2011.
  30. 30. Contribution of telecom sector in terms ofrevenue is 2.1 % of GDP as compared to 2.8% indeveloped economies.About 18 million connections are being addedevery month.Wireless telephones are increasing at faster rate.The share of wireless telephones as on June, 2011 isabove 96% of the total phones.