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GROUP 2 SECTION A

Telecom group 2 section a

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Page 1: Telecom group 2 section a

GROUP 2

SECTION A

Page 2: Telecom group 2 section a

EXECUTIVE SUMMARY

INTRODUCTION

ENVIRONMENT SCAN

PRESENT SCENARIO

FUTURE PROSPECTS

OPPORTUNITIES & CHALLENGES

EMPLOYMENT PROSPECTS

INSIGHTS

Page 3: Telecom group 2 section a

The telecom industry has been studied in detail, with focus on world data

The various factors which are currently influencing the telecom industry are studied using PEST

analysis

The telecom industry, with respect to India , has been studied for both wired & wireless segments

Future prospects with focus on implications of Telecom industry on others, have been looked into

Insights into the potential focus areas of Telecom industry, have been looked into

Future research areas have been identified

Page 4: Telecom group 2 section a
Page 5: Telecom group 2 section a

Industry Insights

60716 Crore

Revenue

933.01 Million

Subscribers

97%

Wireless

Subscribers93%

Prepaid

Subscribers

Airtel

22%

Vodafone

18%

IDEA

15%

Reliance

12%Tata

7%

Aircel

7%

Unitech

4% BSNL

12%

Others

3%

Market Share of Major Players

Channel Structure

• 2 tiered

distribution

model

• For mass

market

reach

• Focused on

prepaid

• Exclusive

• Sales and

service

• Primary

focus on

post-paid,

terminals &

data

• Selling

directly to

the end

customer

• Focused on

post-paid

• Large

format

outlets/chai

n stores

• Future

growth

driver for

Data & 3G

• Enterprise

VGE

National

A/C

SME

• Includes

fixed line

and data

Indirect

Channel

Exclusive

Retail

Direct

Channels

Modern

TradeB2B Business

Monthly ARPU:

Rs 113

Idea Recorded

highest Net Adds

Wireless Market

Share Rural: 41%

Urban:59%

22 Circles

Highest Wirless

Subscribers: UP

East

Key Pointers

Sector Overview

Page 6: Telecom group 2 section a

TelecomFixed line

(wireline)

Mobile

Wireless

Internet

services

Comprises establishments operating and maintaining switching and

transmission facilities to provide direct communications via airwaves

Consists of companies that operate and maintain switching and

transmission facilities to provide direct communications through landlines,

microwave or a combination of landlines and satellite link-ups

Includes internet service providers (ISPs) that offer broadband internet

connections through consumer and corporate channels

Source: Aranca Research

Page 7: Telecom group 2 section a

Source: Telecom Regulatory Authority of India, Business Monitor

Page 8: Telecom group 2 section a

About 6.9 billion mobile connections globally, which are growing at an annual rate of 7.36%

Around 2 billion internet users globally which is expected to reach approx. 5 billion by 2020

Mobile 4G services has 2.85% of the world market penetration at the end of 2013 while 3G had that of 28.45%

China has largest mobile subscriber base of approx.1 billion people

India ranks second with close to 900 million mobile subscribers

Global Enterprise Mobility Market to grow by 15% annually in terms of revenue from 2013-2020Global Enterprise Mobility Market to grow by 15% annually in terms of revenue from 2013-2020

ARPU is stagnating to around $24.6 while Minutes of Use (MoU) show an upward trend around 296 per connection

Telecom industry is in the midst of a transformational shift, driven by a huge surge in data traffic on telecom networks

More emphasis is laid globally to deal with challenges like spectrum exhaustion, greater speed of mobile data connectivity

Source: Aranca Research

Page 9: Telecom group 2 section a

39.140.8

37.3

33.3 33.2 32.1

0

5

10

15

20

25

30

35

40

45

FY13 FY12 FY11 FY10 FY09 FY08

Wireline/Wireless Revenues ( $ Bn)

Wireless and wire line revenues in India• Wireless and wireline revenue increased at a CAGR of 10.4 per

cent to US$ 39.1 billion over FY06-13

Composition of telephone subscribers

in India• The wireless segment (96.6 per cent of

total telephone subscriptions)

dominates the market, while the wire

line segment accounts for the rest

58%

39%

2%1%

Urban

WirelessRural Wireless

Urban

Wireline

Source: Telecom Regulatory Authority of India, Business Monitor

Page 10: Telecom group 2 section a

Changing Value Chain

Source: http://www.atkearney.com/operations/ideas-insights/article/-

/asset_publisher/LCcgOeS4t85g/content/rewriting-india-s-shared-services-playbook/10192

Network Development

Network Management

Platform Development

and operations

Marketing and Product Development

SalesService

DeliveryBilling and Collection

Network Development

Network Management

Platform Development

and operations

Marketing and Product Development

SalesService

DeliveryBilling and Collection

Traditional Telecom Value chain

Emerging Telecom Business Model in India

Page 11: Telecom group 2 section a
Page 12: Telecom group 2 section a

Political-Government Stability

-Taxation Laws

-Policy reforms

-International Relations

-Interconnection Regulation for Broadcasting

Sector

Economic-GDP growth trends

-Inflation Rate

-Per Capita Income

-Interest rates

-Industrial production

-Lifestyle Changes

-Consumer Activism

-Population Mix and Growth Rate

-Labor Cost

-Regional Shift in Population

-R&D Spending

-Technology Transfer

-Internet Penetration for Business Transactions

-New and customized offerings

-Technological shifts affects costs, quality and

leads to innovation

PESTSocial Technological

Page 13: Telecom group 2 section a

Telecom Regulatory Authority of India(TRAI)

Independent regulator in India

Established on 20th February 1997

Regulate telecom services, fixation/revision of tariffs services

Fair and transparent policy environment, promotes level playing field

Tariff, Interconnection and services

Department of Telecommunication(DOT)

Part of Ministry of Communication and Information Technology

Formulate policies for accelerated growth

Responsible for grant of licenses

Enforces wireless regulatory measures by monitoring wireless transmission of all users

Telecom Disputes Settlement and Appellate Tribunal (TDSAT)

Dispute involving parties like licensor, licensee, service provider and consumers are resolved by TDSAT

Any direction, order or decision of TRAI can be challenged by appealing in TDSAT

Cellular Operators Associations of India(COAI)

Official voice for Indian telecom industry

Interacts & exchange ideas directly with Ministries, Policy makers, Regulators & Service providers

Source: TRAI Website

Page 14: Telecom group 2 section a

These Industries are dependent on network but also growth of network is dependent on these sectors

E commerce: As e-commerce increases more connectivity and speed will be required

Banking: As law becomes more lenient, provides opportunity for extra revenue

Other Industries

Telecommunication towers plays a major role

Availability and quality of towers effect the industry

Pricing of services have direct impact on cost

Sharing of towers allows operator to have less assets

Major players are Bharti Infratel ltd, Reliance Infratel Ltd. , Nokia Siemens network, Indus towers

Infrastructure

Mobile phones and telecommunications are complementary

Increase in use of services as handsets become cheaper

Technology advancement, requirement of high speed

Mobile phones

Page 15: Telecom group 2 section a
Page 16: Telecom group 2 section a

2013*

Number of Subscriber: 898 million

FY16E

Number of subscriber:1.2 billion

Robust demand

• India is the world’s second-largest telecommunications market, with 898.02 million subscribers as of March 2013

• With 70 per cent of population staying in rural areas, the rural market will be a key growth driver in coming years

Attractive opportunities

• Telecom penetration in the nation’s rural markets is expected to increase to 70 per cent by 2017 from the 41.0 per cent as of March 2013

• India is expected to feature among the top 10 broadband markets by 2013

High ratings

• The country has a strong telecommunication infrastructure

• In telecommunication ratings, India ranks ahead of peers in the West and Asia

Policy support

• The government has been proactive in its efforts to transform India into a global telecommunication hub; prudent regulatory support has also helped

• National Telecom Policy 2012 proposes unified licensing, full MNP and free roaming

Source: BMI (Business Monitor international) Report, Aranca Research

Notes: * - figure for 2013 is up to March 2013; MNP - Mobile Number Portability; E - Estimates (2016E - Estimates for 2016)

Page 17: Telecom group 2 section a

0

5

10

15

20

25

30

FY06 FY07 FY08 FY09 FY10 FY11 FY12

• The number of internet subscribers increased at a

CAGR of Internet subscriptions (in million) 19.7 per

cent to 25.3 million in 2012 from 8.6 million in 2006

• By 2016, internet subscriptions are expected to rise

to 215.0 million, with a penetration rate of 16.2 per

cent

Source: Telecom Regulatory Authority of India, Business Monitor

International, Aranca Research

Note: CAGR - Compound Annual Growth Rate

Page 18: Telecom group 2 section a

2.3

3.9

6.3

8.8

11.9

13.8

15.1

0

2

4

6

8

10

12

14

16

FY07 FY08 FY09 FY10 FY11 FY12 FY13

Broadband subscriptions (in million)

Source: Telecom Regulatory Authority of India, Aranca Research

Note: CAGR - Compound Annual Growth Rate

BSNL, 66

Airtel, 9.3

MTNL, 7.2

Others, 17.5

Market break-up by broadband subscriptions

(FY13)

Source: Telecom Regulatory Authority of India, Aranca Research

Notes: BSNL - Bharat Sanchar Nigam Ltd;

MTNL - Mahanagar Telephone Nigam Ltd

Page 19: Telecom group 2 section a

21.7

17.6

14.2

14

11.7

7.7

6.9

3.71.41.1

Wireless market share in terms of Total

Subscribers

Bharti Airtel

Vodafone

Reliance

Idea

BSNL

Tata

Aircel

Unitech

Sistema

Others

• Bharti Airtel is the market leader, with a 21.7 per

cent share of total subscription; Vodafone follows

with a 17.6 per cent share market share

• The top five players – Bharti Airtel, Vodafone,

Reliance, Idea, and BSNL – account for over 79 per

cent of the total subscribers

Source: Telecom Regulatory Authority of India, Aranca Research

Note: BSNL - Bharat Sanchar Nigam Limited

Page 20: Telecom group 2 section a

14.6

22.8

33.7

49.6

68

76

70.9

0 20 40 60 80

FY07

FY08

FY09

FY10

FY11

FY12

FY13

TeleDensity

• GSM services continue to dominate the wireless market

with an 91.5 per cent share (March 2013); CDMA

accounts for the remaining 8.5 per cent

• The mobile segment’s teledensity surged 4.8x from 14.6

percent in FY07 to 70.9 per cent in FY13

Source: Telecom Regulatory Authority of India, Aranca Research

Notes: Teledensity - The number of telephone lines for every 100 people in a

country,

GSM - Global System for Mobile Communications, CDMA - Code Division

Multiple Access

Page 21: Telecom group 2 section a

Total fixed line subscription stood at 30.2 million, while teledensity reached 2.5 per cent due to wide usability of wireless segment

in FY13

BSNL is the market leader with a 67.7 per cent share followed by MTNL with 11.5 per cent market share

BSNL, MTNL, and Bharti together account for 90.0 per cent of the total fixed-line market

Source: Telecom Regulatory Authority of India, Aranca Research

Page 22: Telecom group 2 section a
Page 23: Telecom group 2 section a
Page 24: Telecom group 2 section a
Page 25: Telecom group 2 section a

Highlights of the Minute factory Model

• Improving affordability to gain positive elasticity

• Focus on producing the lowest cost minute whilst

maintaining / growing margins

• Drive affordability

More users

More usage

• Increased scale of minutes

Driving operating leverage

Page 26: Telecom group 2 section a

Depth Interview

Analysis Results

•Incentives (COCA)

•Rapport With Salesman

•Product Features

•Knowledge About Products

Sales force motivation

Key take

away

Sales Force Training

Activity Duration Conducted By

Induction Training

Module

1 month ASM+ Trainer

Field Training 2 weeks TSM

Re Fresher Training

Module

2 weeks Trainer

Product Quizzes Trainer

Sales Force Recruitment &

Incentives

Salesman Hired

by Distributor

Company pays incentive on

attainment of Targets

17% 32%Turn

Over

Rate

18% 25%

Retailer Incentive Plans

Benefits given in Cash or Kind

Few Companies Use

Gimmicks to Increase

Retailers Self Esteem

Serves as the Biggest

Motivator to Push for Product

Zonal Target

Distributor-wise

Target

Beat-wise Target

(Set by Zonal Business

Manager)

(Set by Area Sales Manager)

(Set by Territory Sales

Manager)

Concentrate on performance

related incentives to build

higher level of motivation

Turnover rate on higher side

as they lack a sense of

ownership because of the

hiring pattern

Good understanding of

telecom fundamentals and

networking basics is essential

part of training

Target Setting

Airtel

Navranta

Vodafone

Champ

Pre Paid Channel Analysis

Non reimbursements of travel

expenditure for salesman acts

as a deterrent

Page 27: Telecom group 2 section a
Page 28: Telecom group 2 section a

*Deloitte Report: Tmt India Predictions 2014

MIM’s will carry more

than twice the volume

(50 billion versus 21

billion per day) of

messages sent via

SMS’s

The demand for ruggedized device platforms based on tablets &

smartphones is expected to rise rapidly in next few years

2014 is likely to mark a new

era in growth of mobile

video in India. India will see

several OTT, DTH and

telecom operators

themselves trying to

leverage this opportunity

Page 29: Telecom group 2 section a

http://www.deloitte.com/assets/Dcom-

India/Local%20Assets/Documents/Thoughtware/2014/Telecom_Enabling_growth_and_serving_the_masses.pdf

Trends in Telecom- Spreading Education

Market size of Indian education sector is expected to increase to 6024.1 billion by FY15

74.0483.4

657075808590

India World

Literacy Rate 2011(%)Telecom enabled access to education

• Access to education in the remote areas via interactive learning – audio

and video

• Improve subject coverage as well as delivery

• Help students in accessing the content directly

• Help teachers in developing their skills and knowledge

The Emerging promise of m-education

• Educational e-Books and e-Courses

• Game-or Simulation-based learning tools

• “English Seekho” (Learn English) one of the service offered by Tata DoCoMo

• Students can access that anytime, anywhere and allowing them to learn at an independent pace

• Customisation of instructions and adjustment of difficulty levels by tracking responses to several different

questions

Page 30: Telecom group 2 section a

Trends in Telecom- Health Care

Development in telecom and other related technologies are contributing to improved quality outcomes

Tele-medicine and Tele-healthcare• Healthcare professionals are now sharing information, holding consultations using mobile broadband

• Videoconferencing equipment is helping in to bring a physician and medical facilities as close to a patient as

possible ways in which these technologies work •Store & forward mode - information stored on the digital camera is forwarded. Ex – pictures, MRI, X-Rays, CT Scans

•Two way interactive television – videoconferencing

M-health• M-health services make use of mobile devices to deliver healthcare

solutions such as health alerts, updates and patient monitoring systems•Home monitoring

•Connected medical environments

•Clinical remote monitoring

•Assisted living and clinical trials

http://www.deloitte.com/assets/Dcom-

India/Local%20Assets/Documents/Thoughtware/2014/Telecom_Enabling_growth_and_serving_the_masses.pdf

Page 31: Telecom group 2 section a

Advantage of reach and cost vis-à-vis other banking delivery channels

Banks partner with mobile service providers and other entities

M-Banking & M-Payments Inter–account fund transfer

Account inquiry

Stock trading

Bill payment

Ticketing

Country

No. of Bank Branches

(per 1 lakh)

No. of

ATM’s

(per 1 lakh)

India 10.6 8.9

China 23.81 49.56

Brazil 46.15 119.63

http://www.deloitte.com/assets/Dcom-

India/Local%20Assets/Documents/Thoughtware/2014/Telecom_Enabling_growth_and_serving_the_masses.pdf

Page 32: Telecom group 2 section a

Several players betting on convergence1

Indigenous manufacturing: less imports, more job creation , security2

Inclusion of greener energy services in telecom3

Adoption of telecom services embedded in applications. Ex: Kindle

Launch of Reliance Jio will be a game-changer in Indian telecom: Moody‘s4

1-Deloitte Report: Tmt India Predictions 2014

2-Telecom Sector Roadmap for Innovation 2010-2020

3-http://timesofindia.indiatimes.com/tech/it-services/Green-Telecom-DoT-accepts-TRAIs-recommendations/articleshow/9386473.cms

4- http://www.domain-b.com/companies/companies_r/Reliance_Industries/20140623_mukesh_ambani.html

Content owners

Content aggregators

Mobile video platform

developersApp stores

Payment gateways

Telecom operators

OEM’s OTT

Page 33: Telecom group 2 section a
Page 34: Telecom group 2 section a

Strengthen R&D efforts, provide an impetus to build world-class manufacturing capabilities

Achieve efficiency and transparency in spectrum management

Provide reliable media to all exchanges by 2020

Encourage development of telecom facilities in remote, hilly and tribal areas of the country

Sector related skill development

Broadband penetration

http://www.deloitte.com/assets/Dcom-

India/Local%20Assets/Documents/Thoughtware/2014/Telecom_Enabling_growth_and_serving_the_masses.pdf

http://blog.euromonitor.com/2013/08/special-report-the-telecom-consumer-in-2020.html

China and India will be the world’s online

superpowers, with the two countries making up

over 1.0 billion Internet users by 2020, or around

a third of the world’s total users. Opportunities

for online businesses will be expansive,

especially in Internet retailing and m-commerce

services targeted at the countries’ huge rural

populations

Page 35: Telecom group 2 section a
Page 36: Telecom group 2 section a

• Increasingly using social media sites Facebook and Twitter, apart from professional networks such as LinkedIn

• Hiring through social media is expected to grow by more than 50% this year from 2013

• Telecom sector's hiring increased 36% in August from a year earlier, according to the Naukri Job Speak Index

• Hiring in the industry is expected to remain fairly healthy over the next few quarters; 4G technology and Reliance Jio

Infocomm's entry will lead to surge in recruitments

http://articles.economictimes.indiatimes.com/2013-10-02/news/42617658_1_telecom-sector-speed-new-leader

http://economictimes.indiatimes.com/industry/telecom/telecom-firms-relying-on-social-media-to-hire-talent/articleshow/43571741.cms

3 key skill sets for employees

Speed

Technical Expertise

Ownership & Accountability

HIRING

Page 37: Telecom group 2 section a

• The surge in the subscriber base has necessitated a network expansion covering a wider area,

thereby creating a need for significant investment in telecom infrastructure

• To curb costs and focus on core operations, telecom companies have been segregating their tower

assets into separate companies

• Creating separate tower companies has helped telecom companies lower operating cost and

improve capital structure, and also provided an additional revenue stream

Rising Competition

Higher operating cost and

debt burden

Focus on tower

sharing to reduce cost

Segregation of towers

into separate

companies

Emergence of Tower Industry

Page 38: Telecom group 2 section a

0 5 10 15 20 25 30 35

Others

GTL Infra

Bharti Airtel

Viom Networks

Bharat Sanchar Nigam

Reliance InfraTel

Indus Tower

Market share of tower companies in 2010

(based on towers owned)

ITTC

28%

Telcos

owned

72%

Ownership of towers (2010)

The growing need for towers and rise in tower sharing have led to emergence of independent telecom tower

companies (ITTCs) along with the Telecos-owned Tower companies

Source: Aranca Research

Page 39: Telecom group 2 section a

Aircel plans to set up 200 more XPRESS stores in the country, targetting model XPRESS stores to 500 by the middle of 2015

Reliance Jio Infocomm has signed deals with Ascend Telecom Infrastructure and Tower Vision to share their towers to roll out its much awaited high speed data and voice services sooner and at a lower cost across India

Vodafone India has extended its Project Samridhi to Karnal in rural Haryana, in a bid to boost sales and provide employment opportunity to women in the region

Reliance Communications (RCom) has entered into inter-circle roaming partnerships with Aircel and Tata Teleservices Ltd to offer 3G services on a pan-India basis

Tata Communications has entered into strategic partnerships with NEXTDC in Australia, Interxion in Germany and Austria, and Pacific Link Telecom in Malaysia

Vodafone Business Services (VBS) launched managed video conferencing service for enterprises to offer an experience of world class virtual face-to-face-like interaction with various participants anytime, anywhere.

Source: Aranca Research

Page 40: Telecom group 2 section a
Page 41: Telecom group 2 section a

Best opportunities for Indian telcos to pursue to capitalize on explosion in the mobile Internet user base

India will leapfrog into online and digital services over the next three to five years—opening up an extraordinary opportunity for telcos to become the primary gateway to the digital life

Ecare and Estore

Media Content and

Services

Mobile app for

SME’s

M -payments

Four Areas that hold vast potential for Telcos

Source : http://www.atkearney.com/communications-media-technology/ideas-insights/featured-article/-/asset_publisher/4rTTGHNzeaaK/content/creating-the-next-

multibillion-dollar-online-opportunities-in-telecoms/10192

Page 42: Telecom group 2 section a

In developed markets(South Korea and the Netherlands), "over-the-top“ (OTT) mobile messaging applications now constitute a significant threat to telecommunications carriers' SMS-messaging revenues

Reasons for OTT Tipping

Technology

readiness

A cost incentive to

adopt OTT

The strength of the

OTT alternative

The social

propensity to adopt

OTT

3G and better network that enables accessibility

Smartphone penetration at high levels

Opportunity to arbitrage between data and SMS costs

High cost of SMS incentivizes to switch to inexpensive OTT

Relative Mix of Smartphones in age 18-24 years

Individual person social group is biggest influencer

Significant market penetration by given OTT app

Concentration of single Os platform with integrated IM

OVER THE TOP Tipping

Page 43: Telecom group 2 section a

Fixed and mobile telecommunications operators are pragmatically melding different technologies in order to deliver the performance customers want at costs that make sense.

Source : Mckinskey Report on Choosing Network Technology by Duarte Bacelar Begonha and Sergio Osle

Three factors that make choosing right suite of network technologies

1. Changes in demand

2. New Technologies

3. Regulatory moves

Several predictions regarding tomorrow’s telecom environment can be made

The networks of the future will integrate fixed and mobile services

Network quality, speed, and enabled services will, from the customer's perspective, become key differentiating factors

These new technologies and regulatory opportunities open broad options for operators

Page 44: Telecom group 2 section a

Emergence of Mobile Videos

Mobile video market has developed because of:

(i) Increased Smartphone penetration

(ii) Improved high speed mobile networks

(iii) Increasing demand for mobile video, and

(iv) Influx of new mobile video service providers

But it is in nascent stage, India will see several OTT, DTH and telecom operators themselves trying to leverage this opportunity

To be successful, focus of the players would remain on:

• Targeted Content: Customer segments / content preferences etc.

• Historic & Internal Analytics: Behavior analytics / trend analytics etc.

• Innovative Service Models: Live streaming / on-demand streaming / limited downloads etc.

• Innovative Business Models: Content owner’s share / operator’s share / customer wallet / sponsorship

etc.

• Quality of Service: Connectivity / better quality at lower speeds etc.

Source : TMT predictions by Deloitte ,2014

Page 45: Telecom group 2 section a

Increase in the rural market penetration remains the mantra to improve market share

Introduction of new and efficient technologies such as M2M and cloud computing

Make available fresh spectrum that will meet the demands of the growing data usage

Indian mobile operators and equipment vendors need to develop energy-efficient networks by deploying renewable energy sources

Use of business analytics and big data to address challenges faced by Telecom companies

Reducing vulnerability to security attacks

Page 46: Telecom group 2 section a

In 1995,Incorporated as Birla Communications Limited, Obtained licenses for providing GSM-based services in the Gujarat and Maharashtra

In 1996, Changed name to Birla AT&T Communications Limited

In 1997,Commenced operations in the Gujarat and Maharashtra Circles

In 2000, Merged with Tata Cellular Limited, thereby acquiring original license for the Andhra Pradesh Circle

In 2001, Acquired RPG Cellular Limited and consequently the license for the Madhya Pradesh (including Chattisgarh) Circle

In 2002, Changed name to Idea Cellular Limited and launched "Idea" brand name and Commenced commercial operations in Delhi Circle

In 2004, Acquired Escotel Mobile Communications Limited, Reached the four million subscriber mark

In 2006, TATA Group transferring its entire shareholding in the Company to the Aditya Birla Group. Reached the 10 million subscriber mark

In 2007Won an award for the "CARE" service in the "Best Billing or Customer Care Solution" at the GSM Association Awards in Barcelona, Spain. Same year reached 20 million subscriber

In 2013, became third largest service provider by subscriber base

Source :http://www.ideacellular.com/aboutus/history

Page 47: Telecom group 2 section a
Page 48: Telecom group 2 section a

A pan India pure wireless play 2G-GSM service provider

Third largest operator in India, by Mobility Revenues and VLR subscribers

Holds 3G Spectrum (2100 & 900 MHz) in 12 service areas, which covers ~80% of Idea revenues and 57% of Industry revenues

Provides 3G services in 21 service areas, including Intra-Circle Roaming (ICR) arrangement for 10 service areas

Voice Minutes Carried ~1.82 billion per day during Q1FY15

Owns 9,495 towers, with a tenancy of 1.57

Holds 16% stake in Indus Towers through its subsidiary ABTL

Approximately 84,000 km optical fibre

Page 49: Telecom group 2 section a

22%

18%

14%

13%

7%

7%0.5%

0.2%1%

4%0.3%

13%

1%BhartiVodafoneIDEARelianceTataAircelLoop MobileQuadrantSistemaUnitechVideoconBSNLMTNL

No. of Total

Subscribers

135.79 millions

No. of Rural

Subscribers74.72 millions

Maximum Net Additions Dec’13

to Mar’147.10 million

Highest Rate of Growth5.52%

Page 50: Telecom group 2 section a

Provides passive infrastructureservices in 15 service areas Leading independent tower

companyin the world with around 113,500towers and tenancy ratio of 2.09 (asof June 30, 2014) Combined revenue market share

ofthree shareholders is 71.3% Idea benefits by reduced capex,speed to market, and embedded valueof shareholding

Page 51: Telecom group 2 section a
Page 52: Telecom group 2 section a

STRENGTH

Reputation of Brand

Technology innovation used in Idea

Advertising and promotion in Idea

High quality network structure

WEAKNESS

No Broadband service

Low coverage in India

Market leader only in North India

Direct to Home Service is not available

OPPORTUNITIES The Indian telecommunication industry is growing at faster rate

Low penetration, more particularly in rural India

New services, like internet, 3G, 4G

Intense competition

Customers loyalty is low

Increasing cost of promotion

Increased network cost

SWOTTHREATS

Page 53: Telecom group 2 section a

Mounting losses have forced small/new telecom providers to exit or

selectively close operations

Cost per minute for Idea has improved with scale, while ARPM uptick has

helped drive margin improvement

Page 54: Telecom group 2 section a

Sales Model of Service Outlets

COCO COFO FOFO

Company Owned , Company Operated Company Owned , Franchise Operated Franchise Owned , Franchise Operated

Outlets are large in size

High level of control

Outlets are large in size Outlets are small in size

Moderate level of control Low level of control

Types of Service outlets of IDEA

FOFO

Sales Model of My Idea (MI) Store

Out-bound sales In-bound sales

Front Desk executives (FDE)

Number depends upon category of outlet

Generally 1-2 FDEsNumber mandated by Idea

Number of FOS per MI : 5

Feet on street (FOS)

Direct control of the company ,

On Ideas pay roll Direct control of Franchise Partner,

On FPs pay roll

Page 55: Telecom group 2 section a

Idea's 3G services start from

chattisgarh, Gujarat and Hp & MP

It Plans progressive pan-India rollout of 'Gold Standard' 3G services to ensure

unmatched customer experience

To enjoy Video Conferencing, Video on Demand, Mobile TV and high-speed

Internet, Introduces Time based Billing plan for 3G services

Idea has traditionally focused

on growth from semi-urban

heartlands of India and will continue to drive its 3G services

from these industrial,

agricultural and educational region.

Page 56: Telecom group 2 section a
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At different points of time, idea has launched different campaigns. Most the campaigns, advertisement focus on the social issues and try to solve the problem by using mobile phones. Some of the famous campaigns are as listed below

Focused on making consumer awareness, with its campaign on internet it is making consumer more awareness about the benefit of Internet

Differentiated from other competitors by providing the benefits like detail billing, etc to every user

Environmental friendly campaign- Use mobile save paper

Health related campaign- Walk while you talk

Education for all- use of mobile to teach students remotely

Social- Use of mobile to vote and take social & community decisions

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