Strategic analysis of Telecom sector

STRATEGIC ANALYSISOF TELECOMMUNICATION SECTOR

PRATIK PANDEY13HM24

COMPANIES

TELECOM SECTOR• In 1881, Oriental Telephone Company Limited of

England was the first company to open telephone exchanges at Calcutta, Bombay, Madras and Ahmedabad.

• Now, India is the world's second-largest telecommunications market, with 922 million subscribers and service revenues of Rs. 54,284 crore as on 31st December 2013 (TRAI).

• Major Companies are BSNL, MTNL, RELIANCE, TATA DOCOMO, IDEA, AIRCEL, VODAFONE etc.

TELECOM SECTOR

• Source: (Press Release No. 13/2014)TRAI.

Number of Telecom Subscribers


Service Provider wise Market Share as on 31st January, 2014.


Service Provider wise net subscriber addition during January, 2014

• All data's in Millions.• Source: (Press Release No. 13/2014)TRAI

Service Provider wise Market Share of wire line subscribers as on 31st January, 2014

• Source: (Press Release No. 13/2014)TRAI

Company ProfilesCOMPANY

INFORMATION

BSNL BHARTI AIRTEL

RELIANCE COMMUNICATONS

IDEA CELLUAR

INDUSTRYTelecom Telecom Telecom Telecom

TYPEState-owned enterprise

Public company BSE: 532454 NSE:BHARTIARTL

Public company

NSE: RCOMBSE: 532712

PublicBSE: 532822NSE: IDEA

FOUNDED 1st October,2000

7 July 1995 2004 1995

HEAD QUARTERS

New Delhi, India

New Delhi, India

Mumbai, India Santacruz East, Mumbai, India

KEY PEOPLE R.K. Upadhyay(Chairman & MD)

Sunil Bharti Mittal

Anil Ambani (President)

Kumar Mangalam Birla(Chairman)

.COMPANY

INFORMATION

BSNL BHARTI AIRTEL

RELIANCECOMMUNICATONS

IDEA CELLUAR

Products Fixed line and mobile telephony, Internet services, digital television, IPTV

Fixed line and mobile telephony,broadband and fixed-line internet services, digital television and IPTV

mobile telephony,broadband and fixed-line internet services, digital television and IPTV

Mobile telephony, Wireless broadband

Revenue Rs.279.33 billion(2011-12

Rs.419.31 billion (2012

Rs.218 billion (2013)

15389.00 crore (2011)

Net income Rs. 88.51 billion (2011–12)

Rs.53,700 million (2012)

Rs.6.72 billion (2013)

844.60 crore (2011)

Employees 244,891 (as on 19 November 2013)

21,299 (2012) 18,070 (2013) 6,481 (2010)

Owner(s) Government of India

Bharti Enterprises (52.7%)[3][4]SingTel (15.57%)[3][4]Vodafone (4.4%)

Reliance Group Aditya Birla Group (49.05%)Axiata Group Berhad (19.96%)Providence Equity (10.6%)

BSNL

MISSION: • Be the leading telecom service provider in India with global

presence.

• To Provide world class telecom infrastructure to develop country's economy.

• Leveraging technology to provide affordable and innovative products/services across customer segments

VISION: • To become the largest telecom Service Provider in Asia

BSNLTagline/ Slogans Connecting India; BSNL hai to bharosa hai

USP SMS rates are reasonable; high speech quality and is capable of delivering high bandwidth using DSL technologies

Segment Senior citizens, Conservative audiences

Target Group Middle class from urban and rural areas

Positioning Most reliable and low priced service

S W

T

Strengths• Alliances with Ericsson and Cisco Systems • IT alliances with HP Compaq, interconnecting alliances • Selling capacity of 25 million per annum • Has an excellent network coverage across India

Opportunities

•Strong strategic alliances with network companies may help BSNL Communication to focus on marketing its services

•Untapped rural markets

•

Threats

•Competitors low price offering

•2. Saturation point in Basic telephony service

•3.Mobile Number Portability

O

Weaknesses

Suffers from high call dropping rates and a reduction in brand equity

Has a major presence only in C’ Circle

Low brand visibility and low brand loyalty

SWOT ANALYSIS

BHARTI AIRTELMISION:

• “We at Airtel always think in fresh and innovative ways about the needs of our customers and how we want them to feel. We deliver what we promise and go out of our way to delight the customer with a little bit more”

VISION:• “To be globally admired for telecom services that

delight customers”

BHARTI AIRTELTagline/ Slogans Express yourself

USP Top brand in India and Brand connect

Segment Elite class of people; Corporates

Target Group Elite class above 25 years age; YUPS(Young Upward Professionals)

Positioning Aspirational and lifestyle brand; Premium category

S W

T

Strengths•Largest Telecom operator in the world with 207.8•Only Indian operator, with VSNL, that has an international submarine cable•4.High brand visibility •5.Strong advertising with celebrity brand ambassadors

Opportunities•Fast expanding cellular market

•Latest and low cost technology •Untapped rural market

•

Threats

O

Weaknesses

•Price competition from BSNL and MTNL

• Untapped Rural Market

•New entrant's low price offering

•Saturation point in Basic telephony service

•Mobile Number Portability

SWOT ANALYSIS

Reliance Communications

MISSION:• Meeting and exceeding Customer expectations with a segmented

approach• Establishing, re-engineering and automating Processes to make

them • customer centric, efficient and effective

VISION: • By 2015, be amongst the top 3 most valued Indian companies,

providing Information, Communication & Entertainment services, and being the industry benchmark in Customer Experience, Employee Centricity and Innovation

Reliance Communications Tagline/ Slogans Karlo Duniya mutthi mein

USPConnection with handset

Segment

Lower and lower middle

Target GroupVillagers, poor, Daily wagers

PositioningWorld in your hands

S W

T

Strengths• Flexible plans • Good advertising • High brand visibility • Celebrity brand ambassadors • Ability to attract customers with various plans



•

Threats

O

Weaknesses






SWOT ANALYSIS

IDEA CELLUAR

Mission:• We will delight our customers while meeting

their individual communication needs time anywhere. We survive because of our customers.

VISION: • To be the most customer-focused mobile service

brand, continuously innovating to help liberate our customers from the shackles of time & space.

IDEA CELLUARTagline/ Slogans An idea can change your life

USP Big brand with great service

Segment Middle and upper middle class

Target Group Students (majority out station), workers, labourers

Positioning Smartness that comes with using Idea

S W

T

Strengths•.Flexible plans • Good advertising • High brand visibility • Celebrity brand ambassadors • Ability to attract customers with various plans



•

Threats

O

Weaknesses






SWOT ANALYSIS

COMPARISONCOMPANY

ANALYSIS BSNL BHARTI AIRTEL RELIANCE

COMMUNICATIONS IDEA CELLUAR

Strengths

IT alliances with HP Compaq, interconnecting alliances Selling capacity of 25 million per annum Has an excellent network coverage across India

Largest Telecom operator in the world with 207.8

Only Indian operator, with VSNL, that has an international submarine cable

Flexible plans

Good advertising

Ability to attract customers with various plans

Good advertising High brand visibility

Celebrity brand ambassadors

Weakness

Suffers from high call dropping rates.

Low brand visibility and low brand loyalty

Price competition from BSNL and MTNL

Untapped Rural Market





COMPARISONCOMPANY

ANALYSIS BSNL BHARTI AIRTEL RELIANCE

COMMUNICATIONS IDEA CELLUAR

Opportunities

Adoption of Next Generation Networks (NGN) is global . Untapped rural markets

Fast expanding cellular market

Latest and low cost technology Untapped rural market





Threats

Low price of Competitors

Mobile Number Portability

Saturation point in Basic telephony service


Saturation point in Basic telephony service


New entrant's low price offering


Porter five forces analysis

Porter five forces analysis

• Threats of new entry : Low

• Bargaining power of Suppliers : Medium

• Bargaining power of Buyers : High

• Internal and External rivalry : High

• Threats of Substitutes : High

Critical success factors• Product quality, employee attitudes(particularly

BSNL), manufacturing flexibility, and brand awareness.

• Explore rural market

• Proper market segmentation

• Better network services (Reliance and BSNL)

Competitive Advantages• BSNL has an advantage in that it does have to pay the 8-12 per cent

revenue share that other private operators do to the government as licence fees.

• BSNL does not have to pay the large share of the revenue as interconnect charges for routing the landline calls and STD calls.

• In 2011, Idea acquired 3G licences for 11 circles for Rs 5,800 crore.• Reliance is a well known brand and it adds advantage in terms of

brand visibility.• Bharti’s acquisition of Zain, gives Bharti the access to Africa.

CONCLUSION

• From the study it is found that PSU’s like BSNL and MTNL has lost its grip in telecom sector because of poor governance and very less marketing strategies. Private sectors are gaining more market share. Though the threats of new entry are very less, the completion among the existing players is very high. The swot analysis and Porters five forces model shows very little difference among the companies, because the companies provide exactly the same products and services.

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Strategic analysis of Telecom sector