The presentation sums up the telecom sector in India till 2015 and how the oligopoly market wars goes between the top companies. Also the kinked demand curve that is generated due to oligopoly market analysis. It has got it all!
2. DEFINITION OF OLIGOPOLY
An oligopoly market is much like a monopoly market, in which only one
company exerts control over most of the market. In an oligopoly, there
are at least two firms controlling the market. Usually, a scenario in
which a particular market is controlled by a small group of firms
The number of producers in oligopoly are lesser than that of perfect
competition and monopolistic competition.
It is a competition among few big sellers each one of them selling either
homogeneous or differentiated products.
3. THEORETICAL CHARACTERISTICS OF
OLIGOPOLY:
Profit maximization conditions
Ability to set price (price-makers)
limited Entry
less Number of firms
Product differentiation
Interdependence
Importance of advertising and selling costs
High cross elasticity “Production of Substitutive”
5. Types of Telecom Services in
India
Presently, there are three types of telecom services in India. They are
1) State Owned
2) Privately Owned
3) Foreign Invested
6. Indian telecom sector: a
comparative study 1/2
India’s telecommunication network is the third
largest in the world
It is based on the number of customer base and
there are more than 960 million telephone
subscribers and more than 121 million internet
users.
Airtel, Idea, Vodafone, Reliance communication,
Aircel, Tata Docomo, MTS, Uninor, Loop, BPL,BSNL,
MTNL and Videocon are major players in the Indian
Telecom sector
7. Indian telecom sector: a
comparative study 2/2
Talking about the recent times, it is seen that the mobile subscribers are
increasing rapidly in the rural areas.
But, that also has seen some of the worst months for new subscribers
as there were only 50 million new subscribers over the last 12 months.
8. GENERAL DEMAND TRENDS:
The regulatory reforms in the telecom sector from 2000 to 2011 can be
broadly classified into the following three distinct phases.
Phase 1 (2000–2003): Telecom sectors were opened up to
competition.
Phase 2 (2004–2007):Regulator encouraged competition and also set
the stage for future growth.
Phase 3 (2008–2011): More choices were brought in for consumers in
terms of technology and services.
9. Competitive rivalry
Due to high fixed cost, low average
revenue per user and high exit
barriers have created strong rivalry
in telecom sector.
There are more than 15 telecom
companies in India and at least five
to six are present in each circle.
To increase customer share if one
reduce its prices all do the same and
innovations are no longer an
advantage for particular company.
10. Share of Telecom Services in
GDP
There has been an increasing
share of telecom services in the
growth of GDP for India.
The reason for these is that the
government only allowed
private and foreign owned
companies in India after 2003.
Till then there were only state
owned companies that were
active.
11. Composition Of Telephone
Subscribers
If we take all the data in
consideration, then the pie
chart can be distributed like it is
shown here.
The wireline connection shows
landline connection and
wireless shows mobile phones.
The Urban sector keeps its edge
over the market with over 60%
of subscribers.
12. Wireline vs. Wireless
Wireline subscribers have been declined too much in the last two or
three years with the increasing competition of wireless communication
companies.
The trai report by government of India shows that there is almost 0.60
million loss of subscribers in every quarter of last two years bringing the
total share to just 2.47% out of the total 100.
But contradicting the situation, the Broadband internet connections
have increased from 14.98 million to 15.05 million in a single quarter
registering the yearly growth of a whopping 8.98%.
Similarly, the per capita average revenue has increased from 98 Rupees
to 105 Rupees in 2013.
13. Factors Affecting Telecom
Sector
There are some drawbacks of Oligopoly market and they are
1) High Exit Barriers
2) High Fixed Cost
3) Less time to gain advantage by innovation
4) Price Wars
