Telecom Sector Study

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  • Telecom Sector Study

    1. 1. Telecom Sector Study
    2. 2. Equilibrium Rumblings Identity crisis Refocus Dynamic competition 2001 1999 1998 1995- 1996 1997 1994 2000 2002 2003 Upto 1994 National Telecom Policy, 1994 New Telecom Policy, 1999 2004 Unified Licensing Regime <ul><li>State regulated firms </li></ul><ul><li>Strategy heavily influenced by Government and Regulators </li></ul><ul><li>Limited customer choice </li></ul><ul><li>Threats of privatisation </li></ul><ul><li>Fully adjusted marketplace </li></ul><ul><li>No distinction between incumbents & challengers </li></ul><ul><li>Wide range of customer choice </li></ul><ul><li>Normal market forces apply </li></ul><ul><li>Technological advances lead to substitutes </li></ul><ul><li>Niche players evolve / Call-back operators provide service </li></ul><ul><li>Regulators formed </li></ul><ul><li>Competition begins </li></ul><ul><li>Traditional assumptions challenged </li></ul><ul><li>Marketing and sales focus </li></ul><ul><li>Increasing competition </li></ul><ul><li>Losing key competencies </li></ul><ul><li>Competitors find niche or die out </li></ul><ul><li>Industry settles </li></ul><ul><li>Greater emphasis on shareholder value </li></ul><ul><li>Focus on customer satisfaction </li></ul>Life Cycle Stage of Indian Telecom
    3. 3. <ul><li>Revenue to increase 3 times in the next 5 years </li></ul><ul><li>Current teledensity of 8.8 % set to increase to 20% in the next 5 years beating </li></ul><ul><li>Government targets by 3 years </li></ul><ul><li>Growth rate about 2.5 million subscribers per month </li></ul><ul><li>Mobile subscriber base has surpassed the fixed lines </li></ul>Indian Telecom– on the cusp of paradigm shift
    4. 4. Telecom Market <ul><li>7th largest telecom network in the world </li></ul><ul><li>Telecom network growth rate 30% </li></ul><ul><li>Fixed lines 44.76 million </li></ul><ul><li>Wireless connections 48 million </li></ul><ul><li>Size (2003) US$ 9 billion </li></ul><ul><li>2010 (projected) US$ 23 billion </li></ul>
    5. 5. Telecom Services Market <ul><li>Share in total revenue of </li></ul><ul><li>Wireline services to fall from half to 30% </li></ul><ul><li>Wireless services to rise to half </li></ul><ul><li>Data revenue to rise from 2% to 8% </li></ul>Over next 5-8 years
    6. 6. Rising Teledensity & Telephone Subscribers <ul><li>India is targeting 250 million users by 2007 </li></ul><ul><li>India needs $30 billion to meet a target of one phone for every five people by 2010 </li></ul><ul><li>Total telecom revenues expected to almost triple from US$ 9 billion in 2002 to US$ 23-25 billion by 2007. </li></ul>
    7. 7. Telecom Equipment Market <ul><li>Telecom equipment market size US$ 19.4 billion </li></ul><ul><li>Telecom handset market US$ 8.4 billion </li></ul><ul><li>size </li></ul>2004 - 08 (estimated)
    8. 8. <ul><li>Subscriber base : Almost 1.5 million wireless subscribers added every month </li></ul>The Mobile Market <ul><li>GSM 37.37 mn </li></ul><ul><li>CDMA 11mn </li></ul><ul><li>Number of networks(GSM) 70 </li></ul><ul><li>Number of cities covered(GSM) 2000 </li></ul>
    9. 9. Market Share of Major Players
    10. 10. Market Share of Major GSM Players
    11. 11. Market Share of Major CDMA Players
    12. 12. National Telecom Policy (NTP) - 1999 Impact of NTP-99 on mobile subscriber uptake <ul><li>Migration from fixed to revenue share license fee regime </li></ul><ul><li>Liberalised long distance sector </li></ul>
    13. 13. <ul><li>FDI limit increased from 49% to 74%. </li></ul><ul><li>Virtually complete deregulation </li></ul><ul><li>Unified Access Service License </li></ul><ul><li>Interconnection Usage Charge (IUC) </li></ul><ul><li>Broadband Policy announced. Targets 20 million broadband subscribers by 2010. </li></ul><ul><li>Exemption from customs duty for import of MSCs (Mobile Switching Centre) </li></ul>Policy Advantage
    14. 14. India outshining China In the 9th year of wireless operation China 6.8 million India 28 million Subscriber In millions Years India Vs China in comparable years of service
    15. 15. <ul><li>Market share in telecom: 21.7% </li></ul><ul><li>Market share in GSM Segment: 29.0% </li></ul><ul><li>Customer base growth rate: 5.69% </li></ul><ul><li>Services Provided: </li></ul><ul><ul><li>Airtel Prepaid </li></ul></ul><ul><ul><li>Airtel Postpaid </li></ul></ul><ul><ul><li>Blackberry Wireless Handheld </li></ul></ul><ul><ul><li>Value Added Services </li></ul></ul>Airtel: Major player in Indian Telecom Sector
    16. 16. <ul><ul><li>Strength: </li></ul></ul><ul><li>Presence in all the telecom circles </li></ul><ul><li>Developed Infrastructure in place </li></ul><ul><li>Strong and loyal consumer base </li></ul><ul><ul><li>Weaknesses: </li></ul></ul><ul><li>Presence only in GSM </li></ul><ul><li>Weak communication in comparison of competition </li></ul><ul><li>High attrition rates in the industry </li></ul>Airtel: SWOT Analysis
    17. 17. Airtel: SWOT Analysis <ul><ul><li>Opportunities </li></ul></ul><ul><li>Market on a rise </li></ul><ul><li>Favorable Govt. Policies </li></ul><ul><li>Leverage form existing Infrastructure </li></ul><ul><li>Rapidly turning into an entertainment media </li></ul><ul><ul><li>Threats </li></ul></ul><ul><li>Entrance of global players </li></ul><ul><li>Risk of Technology obsoletion and continuous need of up gradation </li></ul><ul><li>No distinction between new entrants and incumbents </li></ul>
    18. 18. <ul><li>www.indiainfoline.com </li></ul><ul><li>www.ifeb.org </li></ul><ul><li>www.economictimes.com </li></ul><ul><li>www.myiris.com </li></ul>References
    19. 19. Thank You

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