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INDIAN TELECOM INDUSTRY OVERVIEW <ul><li>315 mn mobile subscribers by September 08 </li></ul><ul><li>39 mn fixed line subs...
Fixed vs. Mobile
No of new subscribers
 
Threat from New Entrants <ul><li>Supply Side Economies Of Scale </li></ul><ul><li>declining ARPU </li></ul><ul><li>Infrast...
Threat from New Entrants (Cont.) <ul><li>Customer Switching Costs </li></ul><ul><li>Cost of new connection low </li></ul><...
Threat from New Entrants (Cont.) <ul><li>Incumbent Advantages </li></ul><ul><li>Established brand image  </li></ul><ul><li...
Threat from New Entrants (Cont.) <ul><li>Restrictive Govt Policy </li></ul><ul><li>Spectrum and license allocation </li></...
Power of the buyer <ul><li>Lack of differentiation among the service provider </li></ul><ul><li>Cut throat competition </l...
Supplier Bargaining Power <ul><li>Large number of suppliers. </li></ul><ul><li>Shared tower infrastructure. </li></ul><ul>...
Rivalry among Existing Competitors  <ul><li>High Exit Barriers </li></ul><ul><li>High Fixed Cost </li></ul><ul><li>6-7 pla...
Market Share
Presence in States
Threat of Substitutes <ul><li>Some Substitutes: </li></ul><ul><ul><li>VOIP (Skype, Messenger etc.) </li></ul></ul><ul><ul>...
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Telocom porter

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Telocom porter

  1. 2. INDIAN TELECOM INDUSTRY OVERVIEW <ul><li>315 mn mobile subscribers by September 08 </li></ul><ul><li>39 mn fixed line subscribers by September 08 </li></ul><ul><li>Crossed 25% teledensity mark in March 08 </li></ul><ul><li>10.42 mn subscribers added in month of October 08 </li></ul><ul><li>There are 6-7 telcos operating in each of 23 license areas. Airtel, Reliance, Vodafone & BSNL, who are “the Big 4” have 74% market share </li></ul><ul><li>Growth is expected to continue and even accelerate, reaching a projected 496 mn mobile subs by 2010 </li></ul>
  2. 3. Fixed vs. Mobile
  3. 4. No of new subscribers
  4. 6. Threat from New Entrants <ul><li>Supply Side Economies Of Scale </li></ul><ul><li>declining ARPU </li></ul><ul><li>Infrastructure tenancy costs </li></ul><ul><li>Other FC like BPO </li></ul><ul><li>Demand Side Benefits </li></ul><ul><li>Brand pull exists to some extent for brands like airtel /idea/ vodafone </li></ul>
  5. 7. Threat from New Entrants (Cont.) <ul><li>Customer Switching Costs </li></ul><ul><li>Cost of new connection low </li></ul><ul><li>Proposed number portability </li></ul><ul><li>Capital Requirement </li></ul><ul><li>Extremely high infrastructure setup costs </li></ul><ul><li>Spectrum License cost </li></ul>
  6. 8. Threat from New Entrants (Cont.) <ul><li>Incumbent Advantages </li></ul><ul><li>Established brand image </li></ul><ul><li>Reliability of network </li></ul><ul><li>Uneven access to Distribution Channels </li></ul><ul><li>Not a factor </li></ul>
  7. 9. Threat from New Entrants (Cont.) <ul><li>Restrictive Govt Policy </li></ul><ul><li>Spectrum and license allocation </li></ul><ul><li>3G and Number portability policy still unclear. </li></ul><ul><li>74% FDI cap. </li></ul><ul><li>Minimum requirement of number of towers. </li></ul>
  8. 10. Power of the buyer <ul><li>Lack of differentiation among the service provider </li></ul><ul><li>Cut throat competition </li></ul><ul><li>Customer is price sensitive </li></ul><ul><li>Low switching costs </li></ul><ul><li>Number portability to have negative impact </li></ul>
  9. 11. Supplier Bargaining Power <ul><li>Large number of suppliers. </li></ul><ul><li>Shared tower infrastructure. </li></ul><ul><li>Limited pool of skilled managers and engineers </li></ul><ul><li>especially those well versed in the latest </li></ul><ul><li>technologies. </li></ul><ul><li>Medium cost of switching since changing their </li></ul><ul><li>hardware would lead to additional cost in </li></ul><ul><li>modifying the architecture. </li></ul><ul><li>Overall influence on the industry - medium </li></ul>Physical Infra Supplier Network Infrastructure <ul><li>-Ericsson </li></ul><ul><li>-Siemens Networks </li></ul><ul><li>Cisco </li></ul><ul><li>-Huawei </li></ul>Information Technology -IBM -TCS Passive Infrastructure -Bharti Infratel -Indus Towers Call Center Outsourcing -IBM Daksh -Mphasis -Hinduja TMT -Aegis BPO -Nortel
  10. 12. Rivalry among Existing Competitors <ul><li>High Exit Barriers </li></ul><ul><li>High Fixed Cost </li></ul><ul><li>6-7 players in each region </li></ul><ul><li>3 out of 4 BIG-Four present in each region </li></ul><ul><li>Very less time to gain advantage by an innovation (Eg. Caller tunes, life time card) </li></ul><ul><li>Price wars </li></ul>
  11. 13. Market Share
  12. 14. Presence in States
  13. 15. Threat of Substitutes <ul><li>Some Substitutes: </li></ul><ul><ul><li>VOIP (Skype, Messenger etc.) </li></ul></ul><ul><ul><li>Online Chat </li></ul></ul><ul><ul><li>Email </li></ul></ul><ul><ul><li>Satellite phones </li></ul></ul><ul><li>None of the above a major threat in current scenario. </li></ul><ul><li>Price-Performance trade-off very high. </li></ul><ul><li>Issues of mobility and penetration with the substitutes. </li></ul>

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