Telecommunications Strategy

We help telecom companies and business units on critical strategic issues, ranging from which markets to target to which capabilities will yield a sustainable competitive advantage.
Global and regional telecom players face an increasing number of critical challenges, from traffic monetization to capital and labor productivity in mature markets to intensified competition in developing and emerging markets. We help a wide range of participants to understand these trends, including equipment and systems manufacturers, fixed- and mobile-service providers, and content and applications players. Our global practice serves incumbent companies in both mature and emerging markets, as well as new entrants in rapidly evolving markets in Asia and Africa. Given this broad perspective, McKinseys team can provide companies with uniquely informed strategic insight.

What we do
Our strategy work reflects the complex issues faced by telecom participants, and we bring demonstrable expertise in:
Corporate and portfolio strategy

More than 90 percent of telcos growth is determined by the dynamics of markets in which they compete. Accordingly, we help companies answer the most important strategic question where to play?by analyzing growth, profitability, and capital intensity of international and adjacent markets.
Business-unit strategy

Successful business unit strategies combine true sources of competitive advantage with privileged, granular insight to beat the market. We help operators identify pockets of opportunities and how to capture themincluding the level of commitment required in the boardroom as well as by the frontline managers.
Innovation strategy

Fewer than 10 percent of innovations become commercially successful, yet innovation is one of the greatest sources of competitive advantage, especially in telecom. We help companies develop the governance, processes, and skills needed to achieve continuous innovation at scale.
Regulatory strategy

Recent policy and regulatory regime changes illustrate how much of telecom companies value depends upon regulation. Whether it is meeting net neutrality standards, dissecting governments role in building new generation networks, or analyzing proposed taxes, McKinsey helps clients anticipate, understand and develop strategies to operate within regulatory environments.

Who we are
The 250 partners who lead McKinseys Telecom Practice bring broad strategy experience as well as specialized industry expertise in subsectors or organization functions and capabilities. Our strategy teams draw on McKinseys expertise and assets in areas such as corporat e finance, marketing and sales to provide operators with comprehensive support.

Recent examples of our work

Restructuring business portfolios to diagnose strengths and weaknesses and identify ways to maximize value creation Discovering ways to better leverage corporate or business-unit assets and capabilities for greater enterprise synergy and competitive impact Identifying the right mix of distinctive business, organizational, and technical capabilities needed to execute strategy effectively

Proprietary tools and insights

Our insights into winning strategies in telecom and, more generally, global business dynamic can be found in a variety of publications, including: Global Forces, research that incorporates original analysis and insight from more than 1,000 executives to identify five forces that will profoundly affect the global economy and their implications for global companies The Granularity of Growth, based upon proprietary research and written by three McKinsey strategists who dissect how to identify sources of growth in an era of hypercompetition and hyperglobalization NMIncite, a joint venture between Nielsen and McKinsey, analyzes consumer conversations in traditional and social media to gain real-time insights on products, topics, and brands. The analysis recently served as basis for a four-part series on mobile apps, including Transforming Branded Apps into Category Killers

Indian Telecom Industry

Last Updated: September 2013

Introduction India is the worlds second-largest telecommunications market, with 898 million subscribers as on March 2013. The sector's revenue grew by 13.4 per cent to reach US$ 64.1 billion in FY12. Telecom infrastructure in India is expected to increase at a compound annual growth rate (CAGR) of 20 per cent during 2008-15 to reach 571,000 towers in 2015. Internet traffic in India is expected to reach to 2.5 exabytes per month in 2017 from 393 petabytes per month in 2012, as per a Cisco study. In addition, the wireless connectivity in India is expected to grow at about 40 per cent traffic by 2017, up from 38 per cent in 2012. India has immense opportunities for telecom operators and is one of the best markets for telecom business. Right now, we feel the Indian market is ripe for M&A stories, highlighted Mr Dmitry Shukov, CEO, Sistema Shyam Teleservices (SSTL). Key Statistics India has recorded 55.48 crore mobile users as per Juxts study titled, India Mobile Landscape (IML) 2013. More than 29.8 crore, about 54 per cent, of these device owners are in rural areas as compared to 25.6 crore in cities and towns," added Mr Mrutyunjay, Co-founder, Juxt. The telecommunications industry attracted foreign direct investments (FDI) worth US$ 12,866 million during April 2000 to June 2013, an increase of 7 per cent to the total FDI inflows, according to data published by Department of Industrial Policy and Promotion (DIPP). Moreover, the cumulative revenue of telecom service providers was recorded at Rs 54,284 crore (US$ 8.32 billion) in the January-March 2013 quarter, as per Telecom Regulatory Authority of India (TRAI) data. Market Dynamics The Indian mobile phone market is highly competitive with more than 150 device manufacturers trying to attract the consumers with their schemes and offers. Most of these producers focus their efforts on the low-cost feature phone market, which constitutes over 91 per cent of overall mobile phone sales, offering a huge scope for growth. India added 1.49 million GSM subscribers in July 2013, taking the total GSM user base in India to 672.63 million. Moreover, in June 2013 the GSM telecom operators added 2.33 million new subscribers, to take the user base to 271.6 million at the end of the month, according to the data released by Cellular Operators Association of India (COAI) The GSM incumbentsBharti Airtel, Vodafone and Idea Cellularhave jointly crossed 70 per cent in revenue market share and had a 99.6 per cent share of the incremental revenues during the June 2013 quarter, as per the latest figures released by TRAI. The mobile value-added services (MVAS) market is expected to reach US$ 9.5 billion in 2015, from US$ 4.9 billion in 2012, as per a joint research report by Wipro Technologies and the Internet and Mobile Association of India (IAMAI). A total of 9.4 million smartphones were shipped into the country, registering a growth of 167.3 per cent on an annual basis. India also witnessed 73.5 million mobile handset shipments for the January-April 2013 period.