Telecom Sector

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TELECOM INDUSTRY

ISBM Kolkata

Pre liberalization

Historically telecom network in India was owned and managed by Government as it is considered as a strategic service. At that time the Telecom industry was monopoly in nature.

Current Scenario in Telecom Industry

India is 4th largest market in Asia after China, Japan and South Korea.

India is the 5th largest in the world and 2nd largest among emerging economies of Asia.

Contribution of telecom sector in terms of revenue is 2.1 % of GDP as compared to 2.8% in developed economies.

REFORMS IN TELECOM SECTOR

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.

POLICY REFORM

Phase-1The decade of 1980's 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

Phase-2 In 1990s, telecommunications 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

Phase- 3NTP 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.

CLASSIFICATION OF TELECOM SECTOR

Fixed line telephony

Mobile Telephony

Internet Telecom equipments

BSNL and MTNL account for 90% revenue for basic services.

25 private companies providing cellular services in 19 telecom circles and 4 metro cities, covering 1500 towns across the country.

There is no restriction on the number of internet companies and more than 185 companies are operational.

Growth in the telecom equipment market resulted in increasing demand for telecom services.

Private sector available in 18 circles and collectively account for 10% of revenue.

Presently, there are five private service operators in each area, and an state operator

Growing demand of corporate for applications such as electronic commerce, Internet leased lines, ISDN, VPN etc is driving the growth of the internet services market.

Key players like BSNL, BHARTI, RELIENCE, TATA, BPL and HUTCHISON will drive equipment market growth.

KEY INDIAN COMPANIES

KEY INDIAN COMPANIES contd..

TELECOM SERVICE PROVIDERS AND EQUIPMENT MAJORS

• Largest pure-play GSM service provider in

• Has over 15 million subscribers

• Promotes and supports a range of telecommunications

products and services in India in association with licensed operators.

• Has invested in Bharti Airtel and also Network i2i is a 50:50 Joint Venture between Bharti and SingTel, connecting Chennai to Singapore

• Has a 10% stake in Bharti telecom, an integrated service provider

• Represents the largest foreign investment in the telecom services sector in India

• Nortel offers a suite of products and solutions across two broad categories Carrier Networks (incorporating Wireless Networks, Wire line Networks and Optical Networks) and Enterprise Networks.

• In India since 1991. Has an R&D centre in Bangalore

Airtel was Established in 1985, Bharti (Airtel) has been a pioneering force in the Telecom Sector.

Bharti Airtel is one of India's leading private sector providers of telecommunications services

An aggregate of 30,267,763 customers in that 28,611,732 GSM (Global System for

MobileCommunications) mobile and 1,656,031

broadband & telephone Customers.

Bharti airtel is planning to invest about $8 billion by the year 2010.

The businesses at Bharti Airtel have been structured into three individual strategic business units (SBU’s)

1) Mobile services

2) Broadband &

3)Telephone services(B&T) & enterprise

services.

The mobile service group provides GSM mobile services across India in 23 telecom circles

MAJOR PLAYERS IN TELECOM SECTORService Provider No. of CDMA

SubscriberNo. of GSM Subscriber

RELIANCE 2.7CR

TATA 1.07CR

AIRTEL 3.37 CR

MTNL 24.98 LAKH

BSNL 2.44 CR

VODAFONE 2.44 CR

IDEA 1.3 CR

SPICE 25.56 LAKH

BPL 10.62 LAKH

AIRCEL 48 LAKH

MARKET SHARE MAJOR PLAYERS IN TELECOM SECTOR

Business Division

• Mobile-• Prepaid : Enter the world of limitless possibilities with Airtel Prepaid. • Postpaid : Life becomes much simpler with your Airtel Postpaid. It

gives you theunlimited freedom to reach out to people in your special way.

• Black berry : the world’s most powerful instant e-mail mobile

• Home Phone-• Fixed Line:- Airtel welcomes you to its world of telephony services,

which offers you world class• services with its cutting edge technology.• Wireless-Avail of the convenience of a mobile phone on a fixed line,

without any cables disturbing• the ambience of your living room!

Broadband & Services

Entertainment

Calling Cards

Wireless Internet

• Data Card

• USB Modem

FINANCIAL ANALYSIS OF BHARTI AIRTEL LIMITED

Statement showing Financial Pattern of ShareholdersAs on 31st December’08

Category of shareholder

Number of shareholders

Total number of sharesNumber of shares held in de materialized form

% of shares (A+B)

A) Shareholding of Promoter and Promoter Group

1) Indian

Bodies Corporate 1 859986028 859986028 45.3

2) Foreign

B)Public shareholding

1) Institutions

Mutual Funds/ UTI 277 56288764 56288764 2.97

Financial Institutions/ Banks

37 1346888 1346888 0.07

Insurance Companies 13 65100704 65100704 3.43

Foreign Institutional Investors

951 417407488 417407488 21.99

Contd..Category of shareholder

Number of shareholders

Total number of sharesNumber of shares held in de materialized form

% of shares (A+B)

2) Non-institutions

Individuals

Individual shareholders holding nominal share capital up to Rs. 1 lakh

171215 13639169 13633219 0.72

Individual shareholders holding nominal share capital in excess of Rs. 1 lakh

164 6116485 6116485 0.32

Foreign National 2 140 140 0

Foreign Companies 2 4459591 4459591 0.23

Non-resident Indians 3135 1093146 1093146 0.06

Foeign Banks 3 1582 1582 0

Trusts 17 2112473 2112473 0.11

Clearing Members 382 852697 852697 0.04

Overseas Corporate Bodies

1 5178500 5178500 0.27

GRAND TOTAL 178348 1898216194 1599828459 100

Industry Analysis

Market Price of the Equity

Profit Analysis Particulars

Quarter Ended

31-Dec-08 30-Sep-08 30-Jun-08 31-Mar-08 31-Dec-07

Profit(+)/Loss(-) from Ordinary Activities before tax

215797 131060 237052 182482 144838

Net Profit(+)/Loss(-) from Ordinary Activities after tax

201729 160478 204679 179230 141984

Increase/Decrease Profit(%)

25.71 -21.60 14.20 26.23

Reserves excluding Revaluation Reserves

2408609 2203130 2040038 1834023 -

Basic EPS before Extraordinary items (in Rs.)

10.63 8.45 10.78 9.44 7.48

Diluted EPS before Extraordinary items (in Rs.)

10.63 8.45 10.77 9.44 7.47

Net Sales Year End 2008

Company Name Last Price Change % Change Net Sales

(Rs. cr)

Bharti Airtel 722.30 -20.00 -2.69 25,761.11

Reliance Comm 249.20 10.00 4.18 14,792.05

Idea Cellular 53.50 0.05 0.09 6,719.99

MTNL 74.85 -1.95 -2.54 4,722.52

Tata Comm 495.15 2.60 0.53 3,283.30

TataTeleservice 20.15 0.40 2.03 1,707.19

Tulip Telecom 501.20 67.85 15.66 1,216.44

Spice Comm 36.00 3.40 10.43 957.85

HFCL Infotel 7.45 0.44 6.28 248.88

Net Sales(Rs. Cr)

Advertisement & sales promotion

Contd..

OUTCOME OF THE CAMPAIGN

Group Company wise % market share - Sep'2008

Oct’2008

Sl.No.

Name ofCompany

Total SubFigures

% MarketShare

Total SubFigures

% MarketShare

1 Bharti Airtel 77479215 33.16% 80199747 33.18%

2VodafoneEssar 54624809 23.38% 56703506 23.46%

3 BSNL 39166943 16.76% 39811109 16.47%

4 IDEA 30380163 13.00% 31582937 13.07%

5 Aircel 13878243 5.94% 14659298 6.06%

6RelianceTelecom 9206127 3.94% 9582695 3.96%

7 Spice 3599744 1.54% 3637129 1.50%

8 MTNL 3677782 1.57% 3743879 1.55%

9 BPL 1663904 0.71% 1807902 0.75%

All India 233676930 100.00% 241728202 100.00%

Addition of 2.7 Million customers in a month

Challenges

• India centric – Major revenues from India• Falling ARPU • Intense Competition & Shortage of

Bandwidth• New Players coming in India• Uncertain Economic conditions • Mobile Number Portability - upcoming

Challenge.

FUTURE PROSPECT OF TELECOM SECTOR

Telecom sector targets announced by Government of India

500 million subscribers by 2010

20 million broadband subscribers by 2010

India poised to be a USD 40 bn - 45 bn telecom market by FY 2010

Thank You