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A Study of A Study of Telecom Telecom IndustryIndustry

Presented by:Swati Tiwari

Priyanka Singh

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Agenda• Introduction• Overview of telecom industry• History of telecom industry• Scope of telecom industry• Players of telecom industry• Major market trends• Future trends in telecom industry• Developments in telecom industry• Conclusion

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Telecom in the real sense means transfer of information between two distant points in space

Telecom is a huge and varied fastness of technologies, companies, services and politics

that is truly global in naturetruly global in nature

Telecom stands as one of the most essential elements of the business world in terms of “Connecting the World”

Introduction

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History of Telecom Industries

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Cont…………..

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Overview of Telecom Industies• Indian Telecom sector, like any other industrial sector

in the country, has gone through many phases of growth and diversification. Starting from telegraphic and telephonic systems in the 19th century, the field of telephonic communication has now expanded to make use of advanced technologies like GSM, CDMA, and WLL to the great 3G Technology in mobile phones. Day by day, both the Public Players and the Private Players are putting in their resources and efforts to improve the telecommunication technology so as to give the maximum to their customers.

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• The Indian telecom sector can be broadly classified into Fixed Line Telephony and mobile telephony. The major players of the telecom sector are experiencing a fierce competition in both the segments. The major players like BSNL, MTNL, VSNL in the fixed line and Airtel, Hutch, Idea, Tata, Reliance in the mobile segment are coming up with new tariffs and discount schemes to gain the competitive advantage. The Public Players and the Private Players share the fixed line and the mobile segments. Currently the Public Players have more than 70% of the market share.

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Fixed-line Telephony

Public Players Subscribers

Private Players Subscribers

Mobile Telephony

Public Players Subscribers

Private Players Subscribers

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India• India has a 700 million people living in 638,000 villages

– per-capita income of $ 0.40 per day)• As per DoT statistics 500,000 villages have telephone access.As per DoT statistics 500,000 villages have telephone access.

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Scope of Telecom Industries• Public & private player

20%

18%

21%

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• Divided into 22 circles– 4 metros – 19 circles

• Further divided into A, B and C category based on economic parameters and revenue potential

• Each circle has a licenses– Four operators per circle

are allowed– Licenses are saleable

METRO Circles

Gujarat

Rajasthan

Maharashtra Orissa

Andhra Pradesh

Karnataka

Tamil Nadu

Kerala

Madhya Pradesh

Uttar Pradesh E

Bihar

West Bengal

Punjab

Himachal Pradesh

Haryana

Jammu & Kashmir

Uttar Pradesh

W

CHENNAI

MUMBAI

DELHI

KOLKATA

C Circles

B Circles

A Circles

Market structure

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Players of Telecom Industries• Airtel• BSNL• Vodafone• Reliance• Idea

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AIRTEL Established in 1995 by Sunil Mittal as a Public Limited

Company, Airtel is the largest telecom service provider in Indian telecom sector. With market capitalization of over Rs. 1,360 billion, Airtel has 31% of total market share of GSM service providers. Providing GSM services in all the 23 circles, Airtel was the first private player in telecom sector to connect all states of India. Also, Airtel is the first mobile service provider to introduce the lifetime prepaid services and electronic recharge systems.

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BSNL (Bharat Sanchar Nigam Ltd.)

• Founded in 2000, Bharat Sanchar Nigam Ltd. In 2005-06, the BSNL earned revenues of Rs. 40,177 crore, & In 2007-08, the BSNL earned revenues of Rs.38,053 crores. India's largest public sector Telecommunications Company providing a wide variety of telecom services. Its service range covers Wireline, CDMA mobile, GSM Mobile, Internet, Broadband, Carrier service, MPLS-VPN, VSAT, VoIP services, IN Services, etc.

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VODAFONE• Vodafone Essar in India is a subsidiary of Vodafone

Group Plc and commenced operations in 1994 when its predecessor Hutchison Telecom acquired the cellular licence for Mumbai. Vodafone Essar now has operations in 20 circles with over 54.63 million customers. Vodafone is the world’s leading international mobile communications company. It now has operations in 25 countries across 5 continents and 40 partner networks with over 269 million customers worldwide. Vodafone has partnered with the Essar Group as its principal joint venture partner for the Indian market.

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RELIANCE Established in 2002, Reliance communication is the

wholly owned subsidiary of Anil Dhirubhai Ambani Group of Companies providing the telecommunication services. Reliance offers prepaid and postpaid mobile services with R-world and fixed line services with broadband services. In 673 cities, Reliance Communications offers a wide range of telephony services. With an optical fiber network of 80,000 kms, the company aims at providing best services to its customers.

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IDEA• Established by AT&T, Aditya Birla Group and Tata Group

as joint venture, Idea Cellular, is a part of Aditya Birla Nuvo, a flagship company of the Aditya Birla Group, Idea is growing its network in 11 circles. Idea offers both prepaid and post paid services in the GSM network. Having 13% market share, Idea has a base of 2.3 crores subscribers all over the country. A three-year contract was signed between Idea cellular and Ericsson for GSM expansion. The network will now cover Maharashtra, Gujarat, Rajasthan, Madhya Pradesh and Himachal Pradesh telecom circles (operator-licensed areas).

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Market Strategy of Vodafone• Our strategic objective is - Innovate and deliver on customer’s

total communications needs.• Vodafone too, needed to educate

consumers about cellular telephony:- -Can I call std? -Can I use my phone in a lift? -what is airtime?

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Commercial Strategy of Vodafone• Rebranding -Stores -Mass media coverage• Innovative distribution to reach the customer -Exclusive shops -Hub and spoke -Associate distributions• Customer service -Shops and call centers -Vans -Help desks

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Market Strategy of Airtel

• We positioned Airtel as an inspirational and lifestyle brand, in a way that trivialized the price in the mind of the consumer. It was pitched not merely as a mobile service, but as something that gave him a badge value.

• Airtel strategy us to be a leader in -Innovations -network -offers and services

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Competitive Analysis (Positioning Strategy)

• Vodafone has veered towards warmth and emotions.

• Vodafone used the powerful visual imagery of a dog.

• Airtel is focused on functionally and efficiency.

• Airtel choose to use music, which is not nearly as effective.

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Competitive Analysis (Target Audience)

• They are targeting middle class person as their target audience.

• It can be justified by their product like chota recharge.

•A group or class of persons enjoying superior intellectual or social or economic status

•Up market professionals

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Ad-Campaign by AIRTEL (Digital TV)

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Ad-Campaign by VODAFONE

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The telecoms trends in India will have a great impact on everything from the humble PC, internet, broadband (both wireless and fixed), cable, handset features, talking SMS, IPTV, soft switches, and managed services to the local manufacturing and supply chain.This report discusses key trends in the Indian telecom industry, their drivers and the major impacts of such trends affecting mobile operators, infrastructure and handset vendors.

Higher acceptance for wireless servicesIndian customers are embracing mobile technology in a big way (an average of four million subscribers added every month for the past six months itself). They prefer wireless services compared to wire-line services, which is evident from the fact that while the wireless subscriber base has increased at 75 percent CAGR from 2001 to 2006, the wire-line subscriber base growth rate is negligible during the same period.

MAJOR MARKET TRENDS

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• In fact, many customers are returning their wire-line phones to their service providers as mobile provides a more attractive and competitive solution. The main drivers for this trend are quick service delivery for mobile connections, affordable pricing plans in the form of pre-paid cards and increased purchasing power among the 18 to 40 years age group as well as sizeable middle class – a prime market for this service.

Some of the positive impacts of this trend are as follows.

According to a study,18 percent of mobile users are willing to change their handsets every year to newer models with more features, which is good news for the handset vendors. The other impact is that while the operators have only limited options to generate additional revenues through value-added services from wire-line services, the mobile operators have numerous options to generate non-voice revenues from their customers

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Some examples of value-added services are ring tones download, coloured ringback tones, talking SMS, mobisodes (a brief video programme episode designed for mobile phone viewing) etc. Moreover, there exists great opportunity for content developers to develop applications suitable for mobile users like mobile gaming, location based services etc. On the negative side, there is an increased threat of virus – spread through mobile data connections and Bluetooth technology – in mobile phones, making them unusable at times. This is good news for anti-virus solution providers, who will gain from this trend. they are created

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Future Trends• Convergence of technologies & the ability of

private players to offer it to the market faster than the incumbent operator.

• “The telecom industry in 2012 will be very different from the one we know today. Developing strong partnership skills, focusing on customer user groups, embracing Internet services and starting to talk the language of Web 2.0 will enable the carriers to thrive well into the future,"

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Developments in telecom industry• 3G Technology In India3G or Third Generation technology is a convergence of

various Second Generation telecommunication systems. The technology is intended for SMARTPHONES - multimedia cell phones. Video broadcasting and other e-commerce services such as, stock transactions and e-learning will now be made possible much faster. It offers 3 Mbps speed for downloading, which is very high as compared to that of the 2G technology. The 3G technology provides for internet surfing, downloading, e-mail attachment downloading, audio-video conferencing, fax services and many other broadband applications.

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Reliance launched Big TV

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Airtel has launched digital TV

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Vodafone +Airtel+ Apple is going to launch iphone.

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All players are going to launch net usage by USB (plug & surf from

anywhere)

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Conclusion • In this changing landscape, the winners will be those companies

that understand consumers' needs, focussing on usability and actually giving control back to the users. The losers will be the ones that focus on overly technical product differentiation that the majority of consumers will not understand and therefore not use.

Inevitably, the global telecom majors are taking notice and Nokia, LG and Motorola have put up factories to manufacture mobile phones after years of saying that the Indian market was better supplied from abroad. Nokia’s former chairman Jorma Ollila was quite clear why the company was finally moving to India. “We estimate that India will become the world’s second biggest mobile device market when measured by volumes in the year 2010.” Other market research companies have estimated that India will, in fact, overtake China when it comes to selling mobile instruments by around 2009.

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THANK YOU…..