Telecomunication industry in india

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TELECOMMUNICATION INDUSTRY IN

INDIA (2011)

Presented by – Abhinav GoelGaurav BansalShivam GuptaSumit Dhanuka



OVERVIEW

The Indian telecom industry has become one of theworld‘s most progressive telecom markets with massiveinvestments by both private and government sectors.

The two key catalysts to the growth of this sector are :

Increasing network coverage and competitive tariffs. It is governed by the Telecom Regulatory Authority of

India (TRAI).

It is the second largest telecommunication network in

the world in terms of subscribers after China.



SOME IMPORTANT NUMBERS

The number of telephone subscribers was 846.32 million atthe end of March 2011, recording a growth rate of 1.79%.

The overall tele-density (telephones per 100 people)reached 72.08 at the end of April 2011.

The broadband subscription reached 12.01 million inMarch, growing by 1.17 per cent.

The Indian Global System of Mobile Communication(GSM) cellular subscriber base reached 590.19 million inApril.

The industry will reach $80 billion in revenues by next yearat an astounding CAGR (compound annual growth rate) of25%.

The industry will employ a stupendous 1 crore employeesmaking it one of the biggest value creators in India.

The mobile subscriber base is projected to grow at a



KEY PLAYERS The Indian telecom sector is highly competitive as well as

fragmented. There are as many as 15 players who striveto gain competitive edge in the Mobile Network Market. Asof September April 2011:

Top Indian Telecom Companies: • Bharti Airtel

• BSNL

• Vodafone Essar

• Reliance

• Idea Cellular

• Tata Communications

• Tata Teleservices

• Aircel

• MTNL

• TTML

(the remaining share is held by other small operators,accordin to TRAI

COMPANY MARKET SHARE

(%)Bharti Airtel 19.19

Vodafone 16.77

Reliance 16.56

Idea 11.13

BSNL 11.12

Tata 10.93

Aircel 6.77



Market Share & Revenue



Market Leader

1.Having the largest

Market Share;Consumers‘ Choice

2.Leads its competitors

to price changes;Competitor3.Introduces new

products; Innovation

4.Has a large DistributionCoverage; Selling

5.Promotes Intensely;

Advertising



• Expand the total market by – Finding new users

– Creating new uses, and

– Encouraging more usage

• Protect its current market share by – Adopting defense strategies

• Increase its market share – Note the relationship between market share

and profitability

Market Leader‘s objectives:



Bharti Airtel Ltd. -It is the largest India mobileoperator by subscriber base that operates in 19countries across South Asia, Africa and the ChannelIslands. Airtel also offers fixed line services andbroadband services.

Sunil Bharti Mittal is the Chairman and Managing

Director of the company. It is listed on both NSE and BSE.

As on June 2011:

Subscriber Base – 169 million

Shares in issue - 3,797,530,096



COMPANY NAME BHARTI AIRTEL

Year of establishment 1985

Company Profile Bharti Tele-Ventures Limited was

incorporated on July 7, 1995 forpromoting investments intelecommunications services. Itssubsidiaries operate telecomservices across India. Its operationsare broadly handled by the Mobility

group and the Infotel group. It alsooffers IPTV and DTH services.

Global Presence/ MarketingNetwork

It provides mobile & fixedwireless services using GSMtechnology across 23 telecom circlesacross India , Sri Lanka, Bangladesh

and now in 16 countries of Africa.

Future Prospect It is planning to set up 3000 moretowers as part of enhancing theirrural coverage and will now focus on

rural and semi-urban areas.



Airtel is the largest cellular service provider in Indiaand fifth largest in the world.

Airtel won 3G spectrum in 13 circles ranging from

Delhi to Jammu & Kashmir for Rs. 12,295 crores. Bharti Airtel wins broadband spectrum in four circles:Maharashtra, Karnataka, Punjab and Kolkata for Rs.3314.36 crores.

Airtel acquired Zain‘s African operations for $10.7billion to increase its base to more than 180 millionglobally.

Airtel won the ‗Most Preferred Cellular Service

Provider Brand‘ award at the CNBC Awaaz Consumer Awards in Mumbai for the 6th year in a row.

Airtel has received the prestigious Business World-FICCI-SEDF Corporate Social Responsibility Award2009-2010. The FICCI Socio Economic DevelopmentFoundation (FICCI-SEDF) and Businessworld CSR





Market Challenger

1.Having a marketshare below themarket leader‘sshare.

2.Competesaggressively in orderto extend market

share.



Market Challenger‘s Objectives

The Market Challengers‘ strategic objective isto gain market share and to become theleader eventually.

How?• By attacking the market leader

• By attacking other firms of the same size

• By attacking smaller firms



Reliance communications

Reliance Communications (formerlyReliance Infocomm), along withReliance Telecomand Flag Telecom,is part of Reliance CommunicationsVentures (RCoVL).

According to National Stock

Exchange data, AnilDhirubhaiAmbani controls 66.77 per cent ofthe company, which accounts formorethan 1.36 billion shares.

It is the flagship company of theReliance-Anil DhirubhaiAmbaniGroup, comprising of power(Reliance Energy), financial services(RelianceCapital) and telecominitiatives of the Reliance ADAG.

It uses CDMA2000 1xtechnology for

its existing CDMA mobile services,and GSM-900/GSM-1800

Subscriber base :- 144.8million



SWOT Analysis

Strengths Mobile Communications

Arm of a Large, Well-

Funded, Well-ConnectedandAmbitious IndianConglomerate

Economies of Scale

From Large SubscriberBase

Expertise in a BusinessModel That Allows It toMaintain HighProfitabilityFrom Lower-

Weaknesses

Cost Structure

Disadvantage WithSubscribers SpreadAcross TwoDifferentMobileNetworks

Low ARPU ComparedWith Competitors

Weakness in RuralMarkets

Brand Positioning

Limited Availability ofValue-Added Services



Opportunities

Aggressive Move Into theRural Market

Use Upcoming MobileNumber Portability as"Launching Pad" toGrabMarket Share ofHigher ARPU Users — and Ramp Up Focus onDataRevenue

Overseas Investments

Lease Spare Capacity onIts CDMA Network to

Mobile Virtual

Threats

Quicker ThanExpected Slowing ofGrowth in the IndianMarketplace

New competition.



Types of Attack Strategies

• Frontal attack

• Flank attack• Encirclement attack

• Bypass attack

• Guerrilla attack

Market Challenger‘s Strategies



Market Follower

1.Only imitates the

ideas andinnovations of theleaders to earn

profits2.Has no incentive ofacquiring hugemarket share

3.Creates no threat forthe leaders andchallengers

4.Has low barrier and

costs in exiting the



• The only objective of a follower is to earn highprofits on already made innovations through―product imitation‖.

• Four broad follower strategies: – Counterfeiter (which is illegal)

– Cloner e.g. the IBM PC clones

– Imitator e.g. car manufacturers

imitate the style of one another

– Adapter e.g. many Japanese firms are excellentadapters initially before developing into challengersand eventually leaders

Market Follower‘s Objectives andStrategies



Idea Cellular is a part of Aditya Birla Group and they arethe leading GSM Mobile service provider in India withabout 90 million subscribers.

They are offering both pre-paid and post paid mobileservice and were the first to offer Enhanced Data Ratesand General Packet Radio Service for the evolution ofGSM in India.

IDEA Cellular is a publicly listed company on both NSE

and BSE. The group operates in 26 countries, and is anchored by

over 130,600 employees belonging to 40 nationalities. TheGroup has been adjudged the ‗6th Top Company for Leaders in Asia Pacific Region‘ in 2009

Mr. Kumar Mangalam Birla is the Chairman of thecompany.



COMPANY NAME IDEA

Year of establishment 1995

Company Profile Idea Cellular is part of the Aditya Birla

Group, which is India's first trulymultinational corporation. Aditya BirlaNuvo Ltd. holds 35.7 %, Birla TMTHoldings Ltd. 44.9 %, Grasim 7.5 %,and Hindalco 10.1 % in Idea.

Global Presence/ Marketing

Network

Has a customer base of over 17 million,

IDEA Cellular has operations in Delhi,Maharashtra, Goa, Gujarat, AndhraPradesh, Madhya Pradesh,Chhattisgarh, Uttaranchal, Haryana, UPWest,Himachal Pradesh and Kerala.

Future Prospect Idea also plans to enter rural andneglectedcircles as a strategy to gain subscribers.Other advancements in the telecomindustry will help it cut costs. Along with

its plan to go for a national longdistance license, it will also look at



Idea is the 3rd largest mobile services operator in India,in revenue terms. It became a pan-India integrated GSMoperator covering the entire telephony landscape of the

country, and expanded its NLD and ILD operations in FY2010.

IDEA is the winner of ‗The Emerging Company of theYear Award‘ at The Economic Times Corporate

Excellence Awards 2009. IDEA Cellular also received theprestigious Avaya GlobalConnect Award for being the‗Most Customer Responsive Company‘ in the Telecomsector in the year 2010.

The company has received several other national andinternational recognitions for its path-breakinginnovations in mobile telephony products & services.

It won the GSM Association Award for ‗Best Billing andCustomer Care Solution‘ for 2 consecutive years. It wasawarded ‗Mobile Operator of the Year Award – India‘ for



Market-Nicher

1. Targets a segment of

customers for itsbusiness purposes

2. Does not hold a bigmarket share, mostlyholding the least marketshare

3. Has/creates nocompetition in themarket

4. Is a leader in the smallersegment of the market

5. Have high margins,lower manufacturing

costs and chargeremium rices



• Niches aim to target a particular segment ofthe market to earn benefits

• Niches must create niches, expand the

niches and protect them – e.g. Nike constantly created new niches--

cycling, walking, hiking, cheerleading, etc

• What is the major risk faced by niches?

– Market niche may be attacked by larger firmsonce they notice the niches are successful

Niche's Objective and Strategies



VIRGIN MOBILE INDIA Virgin Mobile is India‘s first

national youth-focused mobileservice. ―Virgin Mobile‖ brandedservices are being offered to theIndian consumers by TataTeleservices through a brandfranchise with Virgin Mobile.

Virgin Mobile India is a jointventure between the Virgin Groupand Tata Teleservices to offer theVirgin Mobile brand of services inIndia.

Virgin Mobile services are beingsupported from 14 offices acrossIndia. Virgin Mobile brandedhandsets are available across50,000 outlets and its top upcards across 75,000 outlets

nationally. Virgin Mobile‘ brand isIndia‘s first national youth-focused

As of July 2011:Subscriber Base - 5 millionAnnual Turnover - 250 to

500 crores



COMPANY NAME VIRGIN MOBILE INDIA

Year of establishment Established as a joint venture in 2007.

Company Profile Virgin Mobile India provides Tata

Teleservices with experience andexpertise in designing, marketing andservicing of ―Virgin Mobile‖ brandedproducts for the youth segment.

Global Presence/ MarketingNetwork

The brand is available in 19 telecomcircles across top 550 cities in thecountry. While Virgin Mobile brandedservice can be enjoyed by customersin over 3,20,000 towns and villagesacross India, the focus on subscriberacquisition so far has been across top320 cities .

Future Prospect It is set to extend its customer base tomore cities by year end.



―[A] firm should `stick to its niching‘ but notnecessarily to its niche. That is why

multiple niching is preferable to singleniching. By developing strength in two ormore niches the company increases its

chances for survival.‖

Philip Kotler

Multiple Niching

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Telecomunication industry in india