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Telecom Industry Group10

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    TELECOM INDUSTRY

    Group 10: -

    Akshita Wahi

    Atul Kumar

    Nitin Kumar

    Sonal Bhupta

    Vaibhav Kumar

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    The following slides are example questions using thelayouts in the Quiz Show template. View them in slideshow to see the answer animations.

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    EVOLUTION OF TELECOM INDUSTRY

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    PRESENT SCENARIO

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

    India is the 5 th largest in the world

    2 nd largest among emerging economies of Asia.

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

    Lowest tariff charges in the world.

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    INDIAN TELECOM INDUSTRY FACTS

    One of the fastest growing cellular markets in the world in terms ofnumber of subscriber additions 19.35 million in 3 months.

    Expected to reach total subscriber base of about 500 million by2014 (i.e., more than one phone for every household)

    Annual growth rate of the telecom subscribers 47 percent

    More GSM subscribers than fixed-line subscribers Total telecom subscribers 225.21 million (June 2012)

    Tele density 19.86 percent (June 2012)

    Number of new mobile subscribers added every month 7.34 million(June 2012)

    Handset market USD 4,750 million (2012-13)

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    MAJOR

    PLAYERS

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    MARKET SHARE OF WIRELESSSERVICE PROVIDERS

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    MARKET SHARE OF CDMA PROVIDERS

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    Competition Extent

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    EMERGING MARKETS Africa, Asia, Eastern Europe, Middle East and Latin America.

    Wireless technologies and services enabling communication explosion over last decade

    Nature of markets and competitive dynamics is undergoing an important shift.

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    COMPETITION

    Competition in the telecom space will now be focused on quality and not merely the

    number of subscribers. It has changed from reliability and scale of networksto choice and flexibility of

    services

    Reliance Communicationsmove to offer Apples latest iPhone 5c and 5smodels bundled with unlimited voice calls, SMS and 3G mobile internet for a fixedmonthly fee over two years is significant for at least three reasons : -

    Proves competitions still alive in India

    Tie-up with one of the best smartphone company

    The RCom-Apple deal breaks new ground--allows purchase of a high-end smartphone ininstalments with free voice, SMS and uncapped 3G data usage plans.

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    Bezeq was the Israeli monopolythat controlled all international

    calls coming out of Israel.

    In 1997, 15 years ago, themonopoly was broken,competition was allowed, and

    telephone rates dropped throughthe floor! International callsbecame cheap.

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    COST

    STRUCTURE

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    COST STRUCTURE OF INDIAN

    TELECOM INDUSTRY The telecom sector is characterised by very large investment

    costs

    High fixed cost Industry suffers from high fixed cost which

    prove an entry barrier for new entrants

    High Sunk Costs These Include - Infrastructure tenancy costs,Customer Switching Costs, Falling ARPU etc.

    Wage shares are at about 1/3 of the total operating costs

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    MAJOR COSTS INVOLVED

    Infrastructure costs

    Spectrum costs

    Government Licences

    Joint Ventures, mergers and acquisitions

    Cost for sharing of infrastructure resources

    Operating costs

    Sunk Costs

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    INFRASTRUCTURE COSTS

    Investments in telecom networks can be divided into the followingfunctional elements:

    Terminal equipment

    Access Network

    Switching

    Transmission/Long line

    Other (buildings etc.)

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    ANNUAL SPECTRUM COSTS

    The license fee and the spectrum charges given by theTelecom Service Providers during the last three years isgiven in the following Table:

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    COST BREAKUP

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    COST BREAKUP

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    GROSS REVENUES OF OPERATORS

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    PAT MARGINS OF OPERATORS

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    Key Success

    Factors

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    The Telecommunications industry today is a key enabler of

    productivity across economies and societies. Not only a significant contributor towards the economic activities of

    countries, but also towards the growth of other industries.

    In recent times, developing nations have witnessed significanttransformation within this sector due to the impact it has had on

    their economies.

    The booming and emerging economies of China and India have beenimpacted the most by the rapid growth of the Telecom industry inthe past decade.

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    HRM STRATEGY

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    STRATEGIC ROLE OF HRM

    o Employee Service Assurance

    o Talent acquisition

    o Employee engagement & development

    o Attrition Management

    o Policy and Programs

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    Talent acquisition:

    As per the New Telecom Policy, about 2.8 million jobs will be available by 2015

    Employee engagement & development:

    Employee Engagement Activities are mainly conducted for the lower rankedsales force, people who are out on the field.

    Common activities are: Induction programme for new employees.

    Employee suggestion systems / quick responses.

    Best employee awards.

    Team building activities.

    Leadership/career development activities

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    Attrition Management

    Attrition rate is high.

    The growth of the industry prompted the government to allow

    more players on the field.

    This led to large scale migration of intellectual capital betweenorganizations.

    Hence focus is on methodology and techniques to increase

    employee engagement and reduce attrition.

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    Policies & programs Telecom specific training for:

    Processes management

    Operations & Maintenance

    Installations

    Budgeting

    Planning

    Sales-marketing

    Distribution

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    Porter's Five Forces

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    S

    Largesttelecominfrastructurein the world

    (US$108.98Billion)

    High-performingcableequipment.

    GlobalOperationalcosts down by2.9%

    Pioneer in GPStechnology

    Globalimpressivebrand image

    Robust research

    anddevelopmentdepartment(Annual patentfees revenuefrom variousorganizations atUS$2.9 Billion)

    Strengths

    SWOT ANALYSIS

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    W

    LowestAverageRevenue PerUser in India'stelecom possesa significant

    problem onduration ofReturn onInvestments.

    Will have toinvestheavily ininfrastructureas the

    interconnectivity chargesare going tobe high

    PoorTelecommunicationInfrastructure

    due to whichthere is largenumber ofcall drops.

    Mostcompetitive

    marketE.g.-10 to 12

    companies offermobile servicesin most parts ofIndia, globally,the average is 4.

    Difficult toenter

    because ofrequirementof hugefinancialresources.

    Late adopters of

    New Technology.

    Weaknesses

    SWOT ANALYSIS

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    O

    Acquisitionor mergercan lowercost of entry

    in Indianscenario.

    TRAI andDoT areefficienttelecomregulators as

    comparedwith agenciesin othercountries .

    Discountedvalue addedservice couldbe beneficialfactor

    Wirelessmarket in

    metros issaturated butrural areas ismajorlyuntapped..

    Newtechnologies

    like LTE,Wi-max

    The relativeyoung

    generation ofthe populousalso adds tothe lucrativemarket of thesmartphones.

    Opportunities

    SWOT ANALYSIS

    SWOT ANALYSIS

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    T

    Cut throatcompetition inIndia is the

    biggest threat.

    Importantdecisionsimpactingeconomic growthand welfare are

    difficult to passdue to the vestedinterests ofvarious politicalparties andgroups

    Developing owntelecominfrastructurewill be a

    challenge as toget the lawspassed will takeconsiderabletime

    Threats

    SWOT ANALYSIS

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    VALUE CHAIN ANALYSIS

    VALUE CHAIN ANALYSIS

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    VALUE CHAIN ANALYSIS

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