Micro Analysis on Telecommunication industry In Indiadocshare01.docshare.tips/files/30385/303858122.pdf · Micro Analysis on Telecommunication industry In India ... Until the New

Micro Analysis on Telecommunication industry In

India

Presented By

Vyas Bhargav [13044311145]Modi Maunish [13044311039]Barot Pooja [13044311006]Chauhan Dhaval [13044311016]Parmer Ajay [13044311048]Nallabariki Laxmi [13044311040]

Presented To

Date : 16th December 2014

Introduction to Telecommunication Industry

History and evolution of telecom industry

The history of Indian telecom can be started with the introduction of telegraph. The Indian

postal and telecom sectors are one of the world’s oldest.

In 1850, the first experimental electric telegraph line was started

between Calcutta and Diamon Harbour. In 1851, it was opened for the use of the British East

India Company.

William O'Shaughnessy who pioneered the telegraph and telephone in India, A separate

department was opened in 1854 when telegraph facilities were opened to the public.

Telecom Regulatory Authority of India (TRAI) was created in 1997. It was formed

to act as a regulator to facilitate the growth of the telecom sector.

During this period that the Narsimha Rao-led government introduced the National

Telecommunications policy (NTP) in 1994 which brought changes in the areas like

Ownership, service and regulation of telecommunications infrastructure.

Milestone achieve by Telecom Industry in India

1902 – First wireless telegraph station established

1907 – First Central Battery of telephones introduced in Kanpur

1913–1914 – First Automatic Exchange installed in Shimla

1927 – Radio-telegraph system between the UK and India

1933 – Radiotelephone system inaugurated between the UK and India.

1953 – 12 channel carrier system introduced.

Major sectors of Telecommunication Industry of India

Telephony:

The telephony segment is dominated by private-sector and two state-run businesses. Most

companies were formed by a recent revolution and restructuring launched within a decade, directed

by ministry of communication and it.

Fixed Telephony:

Until the New Telecom Policy announced by Government-owned BSNL and MTNL were

allowed to provide land-line phone services.

Mobile telephony

In August 1995, Chief Minister of West Bengal, Shri Abhishek Yadav ushered in the cell phone

revolution in India by making the first call to Union Telecom Minister Sukhram.

Internet

The history of the Internet in India started with launch of services by VSNL on 15

August 1995. They were able to add about 10,000 Internet users within 6 months.

Broadcasting

Television broadcasting began in India in 1959 by Doordarshan, a state run

medium of communication, and had slow expansion for more than two

decades. The policy reforms of the government in the 1990s attracted private

initiatives in this sector.

On 16 November 2006, the Government of India released the radio policy which

allowed agricultural centers, educational institutions and civil society organizations

to apply for community based FM broadcasting license

Major players of Telecom Industry

Strategic Analysis

Strategic Group Mapping

Airtel

VODAFONE

5000

10000

20000

40000

50000

Idea

National GlobalGeographical Scope

Reliance

TATA BSNL

Net sales (in Crores)

X axis

Y axis

Competitive Profile Matrix

CRITICAL SUCCESS FACTORS

Weight VODAFONE Bharti Airtel Reliance Communication

Rating Score Rating Score Rating Score

Market share 0.12 3 0.36 4 0.48 3 0.36Customer service 0.10 4 0.4 3 0.3 2 0.2Customer Loyalty 0.06 2 0.12 4 0.24 2 0.12Financial Position 0.07 4 0.28 3 0.21 4 0.28Strong online present 0.05 2 0.1 4 0.2 3 0.15Profit Margin 0.11 3 0.33 4 0.44 3 0.33

Price competitiveness 0.11 3 0.33 3 0.33 2 0.22Value added service 0.04 4 0.16 3 0.12 2 0.08Proper speed and bandwidth 0.12 4 0.48 3 0.36 2 0.24Strong connectivity 0.10 4 0.4 4 0.4 1 0.10Billing Transparency 0.02 2 0.04 3 0.06 1 0.02Technical competence 0.02 2 0.04 4 0.08 1 0.02Handling of complaints 0.08 4 0.32 3 0.24 2 0.16Total 1 3.04 3.46 2.28

External Factor Evaluation Matrix

Key External Factors Weight Rating Weighted Score

Opportunities

Population 0.30 4 1.2

Changing Population psychograph 0.19 2 0.38

Increased Penetration level 0.12 1 0.12

FDI 0.12 3 0.36

Threats

Government Policies 0.15 3 0.45

New Technology 0.12 4 0.48Total 1 2.99

Porter’s Five Force Model

PEST Analysis

Political

Regulations

Political Opposition to participation by

the private players.

Govt support to promote FDI in Telecom

sector.

Economic

Cost of calls Being Driven Down.

Worldwide Recession- Both Boon &

Bane.

Middle class consumer base growing

due to accelerated economic growth.

Socio-Cultural

High End Phones becoming status

symbol.

Due to Intimate family bonding in

Indian Culture, there is need to

remain connected.

Tech Savvy Generation.

Technology

Strong Fiber Optic Network.

Utilization of E- Commerce facilities.

Efficient Customer Care Services.

OT Analysis

OPPORTUNITY

Porter’s Diamond Model

Firm Strategy, Structure and Rivalry

Demand Conditions

Related and Supporting Industries

Factor Conditions

Chance

Government

Firm Strategy, Structure, and Rivalry

Intensive competition in the country has

made it possible for service providers to

offer the service with lowest fare in the

world profitably.

Many new handsets have been launched.

Factors Conditions

Presence of skilled labor pool.

Rapidly developing & increasing

disposable incomes of consumers.

Increasing demand due to changing

lifestyles and growing attraction for

mobiles with new features.

Related supporting Industries

Handset players are setting up manufacturing bases in India for better operation

management.

Many telecom equipment & Software companies are based in India.

Various value added service providers and content developers are present in India.

Demand Conditions

India has a large middle class.

Growing affordability and lifetime free

schemes have created a market at the bottom of

the pyramid.

Low tele density offers huge future

potential.

Governments

The government extends full

support to industry through

reform processing.

Policies are in place to safeguard

the interests of service providers

as well as those of consumers.

Financial Analysis

Ratio Analysis

Debt Equity Ratio

Name of Company Year

2011 2012 2013

Vodafone South 0.61 0.71 0.64

TATA Communication 0.63 0.67 0.79

Hexacommunication 0.50 0.71 0.37

Bharti Airtel 0.43 1.17 0.35

Total 2.17 3.26 2.15

Industry total 0.54 0.82 0.53

2011 2012 20130

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

Current Ratio


2011 2012 2013





Total 2.62 2.06 2.03

Industry total 0.66% 0.52% 0.51%

2011 2012 20130

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

Net Profit Analysis


2011 2012 2013




Bharti Airtel 16.72 14.23 16.78

Total 53.22 63.81 71.14

Industry total 13.305% 15.95% 17.785%

2011 2012 20130

2

4

6

8

10

12

14

16

18

20

Average collection period


2011 2012 2013





Total 4.88 6.19 4.92

Industry total 1.22% 1.5475% 1.23%

2011 2012 20130

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

Trend Analysis (Sales)


2011 2012 2013

Vodafone South 6277.33 11512.4 12736.7



Bharti Airtel 38017.7 41603.8 45350.9

Total 50850.25 60587.07 66169.82

Industry total 12712.56 15146.76 16542.45

2011 2012 20130

2000

4000

6000

8000

10000

12000

14000

16000

18000


2011 2012 2013

Vodafone South 6277.33 11512.4 12736.7



Bharti Airtel 38017.7 41603.8 45350.9

Total 50850.25 60587.07 66169.82

Industry total 12712.56 15146.76 16542.45

Expenditure Trend

2011 2012 20130

2000

4000

6000

8000

10000

12000

14000

16000

18000

Business Plan

Telewings Communications (operating under the brand name Uninor), is an Indian mobile network

operator based in Gurgaon, Haryana, India.

The company is a subsidiary of Telenor Group, a telecommunications company headquartered in

Oslo, Norway, and Telenor now owns 100% of the stake in Telewings Communications.

Uninor serves more than 3 crore customers in the states of Uttar Pradesh, Uttarkhand, Bihar,

Jharkhand, Maharashtra, Goa, Gujarat and Andhra Pradesh. The mobile service provider targets youth

and other communities within the Indian mass market

Franchise of uninor set up in Mehsana

Vision

Empower societies we provide the power of digital communication, enabling everyone to

improve their lives, build societies and secure a better future for all.

Mission

We’re here to help our customers, We exist to help our customers get the full benefit of

being connected. Our success is measured by how passionately they accept us and make

us a part of their life.

Objectives of company

Capture the market through provide innovative product in telecom segment.

To achieve higher level of satisfaction through quality telecom.

To achieve high market share in telecom segment.

Process for taking Franchise of Uninor

Step 1 :

Centre sends LOI, signs MOU.

Centre submits following legal papers & certifications: Bank Statements for last 6 months + IT Returns of 1 years)

Company Profile with Pictures of Existing Infrastructure. Pan card Snapshot Required.

Step 2 :

Centre is called to sign SLA with Uninor.

Step 3 :

The guarantee approval and audit by Uninor.

Step 4 :

Centre has to ensure that all that is mentioned in the company profile and other legal papers & certification is true and

correct.

Step 5 : Centre has to send LOI & sign MOU

List of Documents required for Franchise

Partnership deed (MoA / AoA )

License from Govt. (shop registered under

municipality)

Sales Tax number (TIN number)

PAN number for business

“Gumasta-dhara” certificate

Telephone/Fax connection (land line)

Segments: Geographic, and demographic Wise

urban and rural area.

Target groups: We are targeting young student’s

middle class and lower class.

Positioning: We are set our positioning on the base

of service quality and lower price

STP Analysis of UNINOR in Mehsana

Personal sales

Internet / Interactive Selling

Consumer oriented sales Promotion

Demonstration

Free sample

High rich in rural & urbanMarketing & Sale promotion

Dealer incentive

Employee Allowance

Bank Statement

Personal Savings

Friends and Relatives

Sources of FinanceProfit Oriented Sales Promotion

TRAI recommendations to terms and conditions for unified license.

Delinking Spectrum from License

TRAI has highlighted the change in the Government's

policy with respect to the previous regime where spectrum

was linked to the Unified Access Service Licence (UASL).

Substantial Equity/Cross-Holding Requirement

The draft of the UL (AS) makes reference to the cross-

holding restriction that prohibited any shareholder from

holding no more than 10% of the equity.

Promoter Lock-in

Value Added Services

Tripartite agreement

Performance Guarantee

Penalties

Cost Of ProjectSr.no. Particulars Amount

1 Site on Rent 25000

2 Computer (23500*3) 70500

3 Furniture 50000

4 Machinery & Equipments (Zerox machine) 5000

5 Raw material expenses ( blank paper) 2000

6 Marketing and Sales Promotion Expenses -

7 Staff Salary

head office ( experienced ) 1 * 15000

Computer operator 3 * 7500

Labor 1 * 2500

40000

8 Other Expenses 10000

Total 2,02,500

Cash on Hand 47500

Cost of project 2,50,000

Estimated Profit and Loss

Particular Year (2014-15)

Sales 345000

Commission 6,900

Sim Recharge com. 13800

Total income 3,65,700

Expenditure

Salary 40,000

Electricity bill 6,000

Rent 25,000

Miscellnious exp. 10,000

Total Exp. 81,000

Net Profit 2,84,700

Findings, Limitation & Conclusion

New entrants can take advantage of gaps in the offerings

of these aging pioneers, or find innovation ways to market

product or service.

Re-examining high levies.

Bringing down operators capex.

Rational policy for spectrum allocation.

Data revenues to provide 'Buffer‘.

Enhancing skill sets

Impact of global economic downturn

Findings

Limitation

We have collected the secondary data where we cannot able to get exact information

About the telecommunication industry privilege in the market as based in past data

and hence cannot be reliable guide to future performance as future is dependent on

other factors.

Conclusion

The technology improvement has helped the sector to perform better and has also

expanded the meaning of the term "telecommunication" from just audio message

transformation to virtual presence of person. the sector clearly shows a scope for

future.

In our opinion, instead of taking a short-term view of paying capacity, the telecom

companies should focus on a long -term game. There is one word that telecom

companies are hearing a lot these days-"Volumes".

There are challenges like porting time, allocation of capital and operational porting

costs among positive and will be set once the committee submits its final report

on he same. The margins and profits of almost the telecom companies have been increasing.

In fact there are cases where significant portions of profit of international telecom

companies have been from their operations in India.

India has the advantage of using the latest technology and so it is in a

better

position when compared to many other countries as far as introduction of NGN is

concerned.