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Telecom Industry Analysis
Submitted By
A-14: Nikhil SinghalA-15: Niraj AgrawalA-22: Prateek Sharma
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Industry Overview
15 Major Players
960 Million Subscriber
65% Urban
35% Rural
4% contribution to GDP
Teledensity
Urban: 169/100
Rural: 40/100
Current worth around $25 billion
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Division
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Growth and Revenue
FY 11-12: 15%
Subscribers base 1998-2012: +900% (Y-o-Y)
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Regulatory Framework
Telecom Regulatory Authority of India (TRAI)
Recommendatory
Regulatory
Tariff setting
Facilitator to Competition
Telecom Disputes Settlement and AppellateTribunal (TDSAT)
Companies
Department Of Telecom(telegraph,telephone,wireless and data
Policy
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a or ayers an ar eShare
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Porter 5 Forces
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Threat of substitutes
Some Substitutes:
VOIP (Skype, Messenger etc.)
Online Chat
Satellite phones
None of the above a major threat in current scenario, but a
potential threat for near future.
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Power of supplier
Large number of suppliers.
Shared tower infrastructure.
Limited pool of skilled managers and engineers especially those
well versed in the latest technologies.
Medium cost of switching since changing their hardware would
lead to additional cost in modifying the architecture.
Overall influence on the industry - Medium
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Rivalry among competitors
High Exit Barriers
High Fixed Cost
6-7 players in each region
3 out of 4 BIG, present in each region
Price wars
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Bargaining power of customer
Lack of differentiation among the service provider
Cut throat competition
Customer is price sensitive
Low switching costs
Number portability to have negative impact
Overall influence on the industry - High
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Threat of New Entrants
Declining Average Revenue Per User.
Infrastructure tenancy costs.
Brand pull exists to some extent for brands likeAirtel / Idea/ Vodafone.
Extremely high infrastructure setup costs
Spectrum License cost- Lotteries, auctions.
Incumbent Advantages: Established brand image,Reliability of network
Overall threats to the industry - Low
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SWOT Analysis
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Strengths Fastest growing telecom market.
Formulation of policies in tune with the growthrequirement.
Adaptation of technological development i.e.
Mobile Number Portability(MNP), Next generationNetwork (NGN), 3G and Broadband WirelessAccess(BWA), IPv6 etc.
Establishment of Regulatory / Dispute resolution
bodies. Framework for responsive Customer Grievance
Mechanism.
Liberal FDI policy.
Healthy competition resulting in the most
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Opportunities
Teledensity growth in the country can be
accelerated.
For creation of telecom infrastructure in rural andremote areas.
Laying off Optical Fibre Cable to uncovered areasand effective utilization of the existing resources toprovide backhaul connectivity.
Country has a huge Broadband potential.
Development of local content/application.
Development of affordable equipment at thecustomer end.
Adoption of emerging technologies.
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Threats
Non availability of adequate spectrum for telecomservices
Cyber threats on ICT networks, leading to securityconcerns.
Obsolesce of existing network elements due to fastchanging telecom technologies.
Intense Competition & Shortage of Bandwidth
Telecom policies and scams
Declining ARPU
Partial government policies
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e ecom n us ry: us nessRisk
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PEST Analysis
ore gn n s o n
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ore gn un s ow nIndustry
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FDI Investments (million US $)
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Financial Analysis - Ratios
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Current Ratio
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Financial Analysis - Ratios
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Interest CoverRatio
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Debtor Turnover Ratio
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Financial Analysis - Ratios
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PBIDTM (%)
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APAT
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PBITM (%)
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PBDTM (%)
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Financial Analysis - Ratios
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CPM (%)
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ROCE(%)
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RONW(%)
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Lifecycle Analysis
Current Stageof Telecom
Industry
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Conclusion
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Thank You