Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
Submitted To:
V. M. Patel Institute of Management,
Ganpat University,
Khe rva.
This is to certify that the contents of this report entitled MICRO ANALYSIS OF INDIAN
TELECOMMUNICATION INDUSTRY by (BHARGAV VYAS 13044311145), (MAUNISH MODI
13044311039),
(POOJA
BAROT
13044311006),(DHAVAL
BAROT
13044311016),(AJAY
This report has not been submitted either partly or fully to any other University or Institute for award
of any degree or diploma.
Date :
Place :
CANDIDATES STATEMENT
I/We hereby declare that the work incorporated in this report entitled MICRO ANALYSIS OF
INDIAN TELECOMMUNICATION INDUSTRY in partial fulfillment of the requirements for the
award of Master of Business Administration (Semester - III) is the outcome of original study
undertaken by me/us and it has not been submitted earlier to any other University or Institution for the
award of any Degree or Diploma.
13044311006)
13044311048)
Date :
Place :
ii
Preface
This marketing research project report highlights the market potential of the telecommunication
industry in India. Which include Airtel, Idea, Reliance GSM telecommunication, Vodafone, BSNL.
Theoretical Knowledge of Marketing Research is being applied practically to carry out this study to
understand the market potential for telecommunication industry.
As a partial fulfillment of the Course M.B.A.(Master of Business Administration). The candidate is
required to undertake a project that would help would help him to enhance his knowledge.
It is with great sincerity and enthusiasm that we take up the challenge that this field has placed before
us and to hope to succeed with guidance from our professors.
13044311006)
13044311048)
Date :
Place :
iii
Acknowledgement
We are the student of V.M.Patel institute of Management, Kherva we express our sincere gratitude
towards all those people who have helped us in the preparation of this project, which has been a
learning experience.
We would like express our special gratitude to our respected (Dr.) Mahendra Sharma, Prof & Head
of V.M.Patel Institute of management who has given us the opportunity to do this project of
management Research Project-I. And also given us the guideline to complete our research report on
Indian Telecommunication Industry
We would like express our special gratitude to our respected Ms Harsha Jariwala Faculty of
V.M.Patel Institute of management Member all concern persons who have provided us help through
her information, guidance and all kinds of support, which was required for preparation of this report.
Without her help it would have been difficult for us to complete our Management Project- I.
Working on the project is hard, need hard work and concentration. What made it possible is the
support we received from those around us. We thank everybody who has directly or indirectly helpful
in project report.
As always, we value your recommendation and thoughts about the report. Your comments regarding
coverage and contents will be most welcome, as will you calling my attention to specific errors,
deficiencies and oversights.
13044311006)
13044311048)
Place: Kherva
Date:
iv
Executive Summary
The Telecommunication Industry is considered as having potential for investment in India. India has
witnessed rapid growth in Telecommunication services. This expected to soar in the next few years.
Since the Indian sky was open for the private sector in 1990, the industry has gone from initial
euphoria, to subsequent despair, and the hope in the wake of the move of the revenue sharing.
As in well known, worldwide the growth in telecommucation bears a close relationship to GDP
growth. The Indian market is still in the developing stage and the country can expect to witness a
robust rate of growth as Indias economy expands and continue to grow at a high rate over a next few
years.
The major players in Indian Telecommunication Industry are Airtel, Vodafone, Idea, Reliance
communication and BSNL
The project highlights the important issues that have been in the lime light since the very long time,
mainly those of history and Indian scenario, industry structure major Telecommunication players, a
market share of different companies, important regulatory bodies, analysis (PEST Analysis, OT
Analysis, Five Force model and 7 ps), future challenges of telecommunication industry etc.
Abbreviation
DOT
:-
Department of Telecommunication
TRAI
:-
GSM
:-
CDMA
:-
NTP
:-
NLD
:-
NTP -99 :-
ILD
:-
VAS
:-
DIPP
:-
FDI
:-
M&A
:-
ISP
:-
VOIP
:-
VPN
:-
BSNL
:-
ADS
:-
NSE
:-
BSE
:-
NYSE
:-
PESTEL:-
NCAER :-
COE
:-
Center of Excellence
SLA
:-
LOI
:-
Letter of Intent
MOU
:-
Memorandum of Understanding
NGN
:-
CONTENTS
Candidates Statement
ii
Preface
iii
Acknowledgments
vi
Executive summery
Abbreviations Used
vi
Index
Chapter no
Title
Page no.
Introduction
1-22
1.1
1.2
1.3
1.3.1 Telephony
1.3.4 Internet
1.3.5 Broadcasting
1.4
10
1.5
13
1.6
14
1.7
17
1.8
17
17
18
18
18
19
Conclusion
22
23-34
2.1
Vodafone
24
2.2
Bharti Airtel
27
2.3
Idea Cellular
29
2.4
BSNL
31
2.5
Reliance Communication
33
34-66
3.1
36
3.2
38
3.3
41
3.4
44
3.5
48
3.6
OT Analysis
57
3.7
59
3.8
62
Financial Analysis
67-82
4.1
Introduction
68
4.2
Objectives
69
4.3
Ratio Analysis
70
72
74
77
79
81
Business Plan
83-99
Executive Summery
84
5.1
Company Introduction
85
5.2
Company Description
86
5.3
87
5.4
88
5.5
88
5.6
Government Policy
88
5.7
89
5.8
Method of Distribution
90
5.9
91
5.10
Source of Finance
95
5.11
Price Plans
96
5.12
Cost of Project
98
5.13
99
100-105
6.1
101
6.2
Findings
102
6.3
Limitation
103
6.4
Conclusion
104
Bibliography
Annexure
Chapter 1
INTRODUCTION
Page | 1
1.1
India's telecommunication network is the second largest in the world based on the total number
of telephone users. It has one of the lowest call tariffs in the world enabled by the mega
telephone networks and hyper-competition among them. It has the world's third- largest Internet
user-base. According to the Internet and Mobile Association of India, the Internet user base
in the country stood at 190 million at the end of June, 2013. Major sectors of the Indian
telecommunication industry are telephony, internet and television broadcast Industry in the
country which is in an ongoing process of transforming into next generation network, employs
an extensive system of modern network elements.
such as digital telephone exchanges, mobile switching centers, media gateways and gateways at
the core,
interconnected
by a
wide
using fibre-
optics or Microwave radio relay networks. The access network, which connects the subscriber to
the core,
technologies. DTH, a relatively new broadcasting technology has attained significant popularity
in the Television segment.
The introduction of private FM has given a fillip to the radio broadcasting in India.
Telecommunication in India has greatly been supported by the INSAT system of the country,
one of the largest domestic satellite systems in the world. India possesses a diversified
communications system, which links all parts of the country by telephone, Internet, radio,
television and satellite.
Telecommunication has supported the socioeconomic development of India and has played a
significant role to narrow down the rural- urban digital divide to some extent. It also has helped to
increase the transparency of governance with the introduction of e-governance in India. The
government has pragmatically used modern telecommunication facilities to deliver mass
education programmes for the rural folk of India.
Page | 2
1.2
The history of Indian telecom can be started with the introduction of telegraph. The Indian postal
and telecom sectors are one of the worlds oldest. In 1850, the first experimental electric
telegraph line was started between Calcutta and Diamond Harbour. In 1851, it was opened for
the use of the British East India Company. The Posts and Telegraphs department occupied a
small corner of the Public Works Department
The construction of 4,000 miles (6,400 km) of telegraph lines connecting Kolkata and Peshawar
in the north along with Agra, Mumbai through Sindwa Ghats, and Chennai in the south, as well
as Ootacamund and Bangalore was started in November 1853. William O'Shaughnessy, who
pioneered the telegraph and telephone in India, belonged to the Public Works Department, and
worked towards the development of telecom throughout this period. A separate department was
opened in 1854 when telegraph facilities were opened to the public
In year 1880, two telephone companies namely The Oriental Telephone Company Ltd. and The
Anglo-Indian
Telephone
Company
Ltd.
approached
the Government
of
India to
establish telephone exchanges in India. The permission was refused on the grounds that the
establishment of telephones was a Government monopoly and that the Government itself would
undertake the work.
In 1881, the Government later reversed its earlier decision and a license was granted to
the Oriental Telephone Company Limited of England for opening telephone exchanges
at Calcutta, Bombay, Madras and Ahmadabad and the first formal telephone service was
established in the country. On 28 January 1882, Major E. Baring, Member of the Governor
General of India's Council declared open the Telephone Exchanges in Calcutta, Bombay and
Madras. The exchange in Calcutta named the "Central Exchange" had a total of 93 subscribers in
its early stage. Later that year, Bombay also witnessed the opening of a telephone exchange.
Liberalization of Indian telecommunication industry started in 1981 when Prime Minister Indira
Gandhi signed contracts with Alcatel CIT of France to merge with the state owned Telecom
Company, in an effort to set up 5,000,000 lines per year. But soon the policy was let down
Page | 3
Pitroda,
US-based Non-resident
Indian
NRI and
former Rockwell
Page | 4
Page | 5
1.3
The Indian Telecommunication industry is consisted of 4 sectors. Viz. Telephony, Internet, Data
centers and Broadcasting. The in-depth explanation of these sectors is given below.
1.3.1 Telephony
The telephony segment is dominated by private-sector and two state-run businesses. Most
companies were formed by a recent revolution and restructuring launched within a decade,
directed by ministry of communication and it.
Since then, most companies gained 2G, 3G and 4G licenses and engaged fixed- line, mobile and
internet business in India. On landlines, intra-circle calls are considered local calls while intercircle are considered long distance calls. Foreign Direct Investment policy which increased the
foreign ownership cap from 49% to 74%.Now it is 100%.
Currently Government is working to integrate the whole country in one telecom circle. For long
distance calls, the area code prefixed with a zero is dialed first which is then followed by the
number. For international calls, "00" must be dialed first followed by the code, area and
local phone number. The country code for India is 91. Several international fiber-optic links
include those to Japan, South Korea, Hong Kong, Russia, and Germany. Some major telecom
operators in India include Airtel, Vodafone, Idea, Aircel, BSNL, MTNL, Reliance
Communications, TATA Teleservices, Infotel, MTS, Uninor, TATA DoComo, Videocon,
Augere, Tikona Digital.
quality of service. Land- line connections are now also available on demand, even in high density
urban areas. India has over 31 million main line customers.
in
the
1800 MHz
band.
The
dominant
players
Infocomm, Vodafone, Idea cellular and BSNL/MTNL. There are many smaller players, with
operations in only a few states. International roaming agreements exist between most operators
and many foreign carriers. The government allowed Mobile number portability (MNP) which
enables mobile telephone users to retain their mobile telephone numbers when changing from
one mobile network operator to another.
Page | 7
1.3.4 Internet
The history of the Internet in India started with launch of services by VSNL on 15 August 1995.
They were able to add about 10,000 Internet users within 6 months. However, for the next 10
years the Internet experience in the country remained less attractive with narrow-band
connections having speeds less than 56 kbit/s. In 2004, the government formulated its broadband
policy which defined broadband as "an always-on Internet connection with download speed of
256 kbit/s or above." From 2005 onward the growth of the broadband sector in the country
accelerated, but remained below the growth estimates of the government and related agencies
due to resource issues in last-mile access which were predominantly wired- line technologies.
This bottleneck was removed in 2010 when the government auctioned 3G spectrum followed by
an equally high profile auction of 4G spectrum that set the scene for a competitive and
invigorated wireless broadband market. Now Internet access in India is provided by both public
and private companies using a variety of technologies and media including dial- up,xDSL,
coaxial cable, Ethernet, FTTH, ISDN, HSDPA (3G), WiFi, WiMAX, etc. at a wide range of
speeds and costs. The country has the world's third largest number of Internet users with over
205 million in October, 2013.
Wireless Internet
2nd Generation Internet is the most prevalent in India. Wireless ISPs in India use
both CDMA and Edge technologies for 2G.
India's wireless Internet frequencies are
Page | 8
1.3.5 Broadcasting
Television broadcasting began in India in 1959 by Doordarshan, a state run medium of
communication, and had slow expansion for more than two decades. The policy reforms of the
government in the 1990s attracted private initiatives in this sector, and since then, satellite
television has increasingly shaped popular culture and Indian society. However, still, only the
government owned Doordarshan has the license for terrestrial television broadcast. Private
companies reach the public using satellite channels; both cable television as well as DTH has
obtained a wide subscriber base in India. In 2012, India had about 148 million TV homes of
which 126 million has access to cable and satellite services.
Giving rise to several channels in regional languages, especially Hindi. The main news channels
available were CNN and BBC World. In the late 1990s, many current affairs and news channels
sprouted, becoming immensely popular because of the alternative viewpoint they offered
compared to Doordarshan.
Some of the notable ones are AajTak and STAR News, CNN-IBN, Times Now, initially run by
the NDTV group and their lead anchor, Prannoy Roy. Over the years, Doordarshan services also
have grown from a single national channel to six national and eleven regional channels.
Nonetheless, it has lost the leadership in market, though it underwent many phases of
modernization in order to contain tough competition from private channels.
On 16 November 2006, the Government of India released the radio policy which allowed
agricultural centers, educational institutions and civil society organizations to apply for
community based FM broadcasting license. Community Radio is allowed 100 watts of Effective
Radiated Power with a maximum tower height of 30 meters. The license is valid for five years
and one organization can only get one license, which is non-transferable and to be used for
community development purposes.
Page | 9
1.4
Telecommunication services in India can be divided into two broad segments, wire line services
and wireless services. While the wire line services include the fixed line telephony, wireless
services comprise mobile, WLL (F) and WLL (M). On the whole, the Indian telecom industry
has made significant progress; however, the source of emergence of this growth in terms of
wireless and wire line segments has undergone substantial change in the past few years. The wire
line segment, which accounted for a major share of the telecom industry during beginning of the
current decade, has witnessed a decline in its subscriber base in the last 2 years. The subscriber
base of the wire line segment, which reached a peak of 41.54 mn during FY06, has witnessed a
declining trend since then. The subscriber base of the wire line segment has declined to 37.96 mn
in FY09 from its peak in FY06. On the other hand, the growth in subscriber base of the wireless
segment has increased substantially over these years. The subscriber base of the wireless
segment has increased from around 6.70 mn in FY02 to as much as 391.76 mn in FY09. Over
these years, not only the number of wireless subscribers but also the pace of its growth has
increased substantially.
Page | 10
Other telecommunication services such as internet services, broadband services, VSAT, also
have evolved gradually and have become an integral part of the Indian telecom industry. Thus,
broadly the Indian telecommunication industry can be classified into the following segments:
Internet services
Wire line
Market share in the wire line subscription as on February, 2012
In the basic telecom services or wire line services the incumbent Bharat Sanchar Nigam
Limited (BSNL) has the majority share in the market. This is due to the expanse of the
infrastructure available to the incumbent, and its ability to provide basic telecom services in the
rural and remote areas. The private wire line service providers do not have the capital to invest in
building such infrastructure and there is no profit in such capital investment as well. Therefore,
the private players mainly concentrate in urban areas where they can earn more revenue.
Page | 11
Wireless
Market share in the wireless subscription as on February, 2012
The pie chart clearly shows that currently the private sector dominates the cellular market.
However, this was not the case in the beginning. The changes in the market structure were due to
the changes in telecom policy in 1999. The growth rate of number of wireless subscribers from
1996-2011 in the graph below, clearly depicts the growth in wireless subscribers after the change
in policy in 1999. Currently, the three main players in the mobile services sector are Vodafone,
Reliance and Bharti
Page | 12
1.5
Contribution to GDP
According to the UNCTAD, there is a direct correlation between the growth in mobile
teledensity and the growth in GDP per capita in developing countries, which tend to have a high
percentage of rural population. The share of the telecom services industry in the total GDP has
been rising over the past few years (the telecom sector contribution in GDP went up from 2.52%
in FY05 to 2.83% in FY07).
Page | 13
Employme nt
Page | 14
1.6
Currently, both public sector players as well as the private sector players are actively catering to
the rapidly growing telecommunication needs in India. Private participation is permitted in all
segments of the telecom industry, including ILD, DLD, basic cellular, internet, radio paging, et
al. The broad structure of the telecom industry (in terms of service providers) is depicted in the
diagram below:
Public Sector:
After the privatization of VSNL in 2002, only two premier PSUs, MTNL and BSNL operate in
India and provide various telecom services. As noted earlier, MTNL operates in Delhi and
Mumbai and BSNL provides services to the remaining country. In the post-liberalization era,
these PSUs not only have made significant progress but also have provided stiff competition to
their private counterparts.
Private Sector:
Private operators have played a very crucial role in the growth of the telecommunication
industry, primarily in the mobile services. With the liberalization of the telecom industry, the
private sector has been increasing its foothold in the telecom services space. After the
introduction of NTP-99, the contribution of private players towards telecom services has
Page | 15
witnessed rapid strides. While the private sector is instrumental in providing both fixed line as
well as wireless services, it is mainly active in the wireless segment. The fixed lines account for
only about 2% of private sector's total subscriber base. While some private players have a panIndia presence, there are many regional players that cater to only certain service areas.
Page | 16
1.7
Page | 17
Types of player
State owned
companies
BSNL
MTNL
Private indian
owned
companies
TataTeleservices
Foreign invested
companies
Reliance
Infocomm
Spice
communicatin
Idea Cellular
Vodafone,
Bharti
different product or (market-specific) service, and the products combine to satisfy a common
need. It is contrasted with horizontal integration. Vertical integration has also described
management styles that bring large portions of the supply chain not only under a common
ownership
There are three varieties: backward (upstream) vertical integration, forward (downstream)
vertical integration, and balanced (both upstream and downstream) vertical integration.
Telephone companies in most of the 20th century, especially the largest (the Bell System) were
integrated, making their own telephones, telephone cables, telephone exchange equipment and
other supplies.
1.7.6 Product Innovation
As technological convergence redefines business models across nearly every industry,
companies have a growing appetite for innovation in order to survive and thrive in a fast-paced
and unpredictable environment. While few business leaders question the need for innovation,
many companies face numerous challenges when it comes to applying it successfully to drive
higher returns.
Telecom Innovations A Services & Products is a service within the TELESEEQ Platform, which
allows access to a huge amount of news and information on innovative services & products in
the Telecom, IT and Media industries.
Topicfocused papers, presenting industry innovations Concise and compelling information on
new technologies Key information that goes straight to the point.
Page | 19
Page | 20
recommendation on MPN (Mobile Number Portability) has made it all the more important for
the companies to charge lower tariffs besides providing better services to retain subscribers.
Economies of Scale:
Existing players enjoy certain degrees of economies of scale that help them offer lower unit
pricing to customers. A notable part of the investments are one-time and are referred to as sunk
costs i.e operator can only exit this particular market at considerable costs. Investments in
telecom networks can be divided for the following functional elements:
-Terminal equipment
-Access Network
-Switching
-Transmission/Long line
-Other (buildings etc.)
The biggest barrier is the availability for credit financing which is highly dependent on many
external factors. However, to minimize this high deployment costs, service providers have
started considering infrastructure sharing, which has been discussed in Industry Transformation.
Page | 21
1.8 Conclusion
In the given chapter we are studying about basic information of telecommunication industry in
India and their history, growth, various milestone achieved by this industry and also understand
about telephony, internet, and broadcasting. The graphical and numerical explanation of this
industry also cover in this chapter. We are also study about current situation of
telecommunication industry India and further we want to study about major players of this
industry in next chapter.
Page | 22
Chapter : 2
Major Player of the industry
Page | 23
2.1 Vodafone
Vodafone Group plc is a British multinational telecommunications company headquartered
in London and with its registered office in Newbury, Berkshire.] It is the world's 3rd- largest
mobile telecommunications company measured by both subscribers and 2013 revenues (in each
case behind China Mobile and SingTel), and had 434 million subscribers as of 31 March 2014.
Vodafone owns and operates networks in 21 countries and has partner networks in over 40
additional countries.[4] Its Vodafone Global Enterprise division provides telecommunications and
IT services to corporate clients in over 65 countries.
Vodafone has a primary listing on the London Stock Exchange and is a constituent of the FTSE
100 Index. It had a market capitalization of approximately 89.1 billion as of 6 July 2012, the
third- largest of any company listed on the London Stock Exchange.[5] It has a secondary listing
on NASDAQ.
network license. Final ownership of Racal-Millicom, Ltd was 80% Racal, with Millicom holding
15% plus royalties and venture firm Hambros Technology Trust holding 5%. According to the
UK Secretary of State for Industry, "the bid submitted by Racal-Millicom Ltd provided the
best prospect for early national coverage by cellular radio.
Page | 25
Page | 26
stations,
microwave
links,
etc.is
maintained
Siemens
Network whereas IT support is provided by IBM and transmission towers are maintained by
another company (Bharti Infratel Ltd. in India) Ericsson agreed for the first time to be paid by
the minute for installation and maintenance of their equipment rather than being paid up front,
which allowed Airtel to provide low call rates of 1/minute .
Page | 27
Sunil Bharti Mittal founded the Bharti Group. In 1983, Mittal was in an agreement with
Germany's Siemens to manufacture push-button telephone models for the Indian market. In
1986, Mittal incorporated Bharti Telecom Limited (BTL), and his company became the first in
India to offer push-button telephones, establishing the basis of Bharti Enterprises. By the early
1990s, Sunil Mittal had also launched the country's first fax machines and its first cordless
telephones. In 1992, Mittal won a bid to build a cellular phone network in Delhi. In 1995, Mittal
incorporated the cellular operations as Bharti Tele-Ventures and launched service in Delhi. In
1996, cellular service was extended to Himachal Pradesh.
In 1999, Bharti Enterprises acquired control of JT Holdings, and extended cellular operations to
Karnataka and Andhra Pradesh. In 2000, Bharti acquired control of Skycell Communications, in
Chennai. In 2001, the company acquired control of Spice Cell in Calcutta. Bharti Enterprises
went public in 2002, and the company was listed on Bombay Stock Exchange and National
Stock Exchange of India. In 2003, the cellular phone operations were rebranded under the single
Airtel brand. In 2004, Bharti acquired control of Hexacom and entered Rajasthan. In 2005,
Bharti extended its network to Andaman and Nicobar. This expansion allowed it to offer voice
services all across India. In 2009, Airtel launched its first international mobile network in Sri
Lanka. In 2010, Airtel acquired the African operations of the Kuwait-based Zain Telecom. In
March 2012, Airtel launched a mobile operation in Rwanda.
Airtel launched "Hello Tunes", a Caller ring back tone service, in July 2004 becoming to the first
operator in India to do so. The Airtel theme song, composed by A.R. Rahman, was the most
popular tune on that year.
During the 200910 financial year, Bharti negotiated for its strategic partner Alcatel-Lucent to
manage the network infrastructure for the tele- media business. On 31 May 2012, Bharti Airtel
awarded the three-year contract to Alcatel-Lucent for setting up an Internet Protocol access
network (mobile backhaul) across the country. This would help consumers access internet at
faster speed and high quality internet browsing on mobile handsets.
In May 2013, Bharti Infotel paid Rs 50,000 as compensation to a customer "for unfair trade
practices". The customer alleged that the company continued to aggressively demand payment
despite customer requests for disconnection of service.
Page | 28
in
11
circles.
The
circles
it
will
provide
3G
areAndhra
Pradesh, Gujarat, Haryana, Himachal Pradesh, Jammu & Kashmir, Kerala, Tamilnadu,Madhya
Pradesh, Maharashtra & Goa, Punjab, Uttar Pradesh (East) and Uttar Pradesh (West).
Page | 29
On 28 March 2011, Idea launched 3G services in Gujarat, Himachal Pradesh and Madhya
Pradesh.[5] The launch cities were Ahmedabad, Shimlaand Indore. This makes Idea the sixth
private operator (eighth overall) to launch its 3G services in the country following Tata
Docomo, Reliance Communications, Airtel, Aircel and Vodafone.
Idea currently supports up to 21.1 Mbit/s over 2G speeds of 256 kbit/s. However, different
handsets support different speeds, from 384 kbit/s, 3.6 Mbit/s, 7.2 Mbit/s or 21.1 Mbit/s. Speeds
also depend on the 3G plan/recharge that users opt for.
Idea cellular has announced a cut of 70% in the tariff of its 3G services.
On 23 November 2011 Idea Cellular launched two affordable 3G handsets in India: Idea 3G
Smartphone Blade priced at
Page | 30
Page | 31
distance calling rate under OneIndia plan, however, the success of the scheme is not known and
BSNL faces bleak fiscal 2009-2010 as users flee.
Presently there is an intense competition in Indian Telecom sector and various Telcos are rolling
out attractive schemes and are providing good customer services. But situation as on 2012,
BSNL will be third largest operator (Service) and No 1 access operator in the country. As per the
TRAI Report 2011-12, BSNL became the most trustworthy brand due to its loyalty towards
customers and its rule.
Access Deficit Charges (ADC, a levy being paid by the private operators to BSNL for providing
service in non-lucrative areas, especially rural areas) has been slashed by 20% by TRAI, w.e.f. 1
April 2009.[17] The reduction in ADC may hit the profits of BSNL.
BSNL has started 3G services in 290 cities and acquired more than 600,000 customers. It has
planned to roll out 3G services in 760 cities across the country in 2010-11. according to users
and big sources BSNL's 3G data speed is much higher than other operator and also it is
competitively cheap.
Broadband services: The shift in demand from voice to data has revolutionized the very nature of
the network. BSNL is poised to cash on this opportunity and has planned for extensive expansion
of the Broadband services. The Broadband customer base of 3.56 Million customer in
March'2009 is planned to be increased to 16.00 million by March 2014. On 13 June 2012, BSNL
employees participated called off an earlier planned nationwide strike against discriminatory
policies of BSNL management upon promise by Management to resolve the Demands of the
protesting unions.
In March 2013, BSNL was also (according to one study) a major transit point for internet spam
Page | 32
Communications
Ltd.
(commonly
called RCOM)
is
an
Indian Internet
Wireless segment
Global segment: national and international long-distance operations (and the wholesale
operations of its subsidiaries)
Reliance Tech Services is the IT services wing of Reliance Anil Dhirubhai Ambani group. It
provides IT consultancy, business process outsourcing and software development for
Reliance Communications and other ADA group companies.
Reliance Globalcom owns the Fiber-Optic Link Around the Globe undersea cable system
On 19 May 2010, the 3G spectrum auction in India ended. Reliance Communications paid
58642.9 million for spectrum in 13 circles. The circles it will provide 3G in
are Delhi, Mumbai, Kolkata, Punjab, Rajasthan, Madhya Pradesh, West Bengal, Himachal
Pradesh, Bihar, Odisha, Assam, North East, Jammu & Kashmir. RCOM recently has started
to offer 3G services through network sharing in the states where it does not hold license for
3G operations. Reliance provides 3G services in Uttar Pradesh East through Aircel's 3G
network and in Uttar Pradesh West through Tata Docomo's 3G network and it allows Tata
Docomo customers to roam on Reliance's network in Delhi, where Tata Docomo does not
operate. On 11 June 2010, the broadband wireless access (BWA) or 4G spectrum auction in
Page | 33
auction across
22
circles,
the
other
than state-
licence.
In 2011 Reliance provided up to 28 Mbit/s data rate in India with its MIMO technology.
On 31 January 2013, Reliance announced its partnership with Lenovo to market co-branded
smartphones in India. The smartphones were said to use the Android operating system and
have dual-core processors.
Page | 34
Chapter 3
Analysis of Indian Telecommunication
Industry
Page | 35
50000
Airtel
40000
net sales (in
crores)
20000
Vodafone
Idea
Reliance
10000
5000
Y
Tata
BSNL
X
National
Global
Geographical Scope
Page | 36
Inte rpretation
In order to visualize the segmentation of strategic groups, it is useful to design a "map" (MllerStewens 2005):
For this purpose we have determine two variable which is helpful in classify the strategic
groups. These criteria form the X axis, where we have sketch as the geographical scope
i.e national and global. We have use these criteria, which are of high importance in terms
of the behaviour of the competitors presence.
Thereafter on Y axis we have took different variable that is net sales are in crores of
companies in the sector has been positioned on the map.
Bharti Airtel
: 49918.50
Vodafone
: 39800.60
Idea
: 26431.97
Tata Communication
: 4376.40
The last step is to divide the companies into strategic groups. The companies which are
closest to each other form a strategic group. Additionally we have illustrate the net sales
of the strategic groups by the size of the circles.
note : the size of the circles does not represent the market shares in this figure.
Page | 37
Weight
VODAFONE
Bharti Airtel
Reliance
Communication
Rating
Score
Rating
Score
Rating
Score
Market share
0.12
0.36
0.48
0.36
Customer service
0.10
0.4
0.3
0.2
Customer Loyalty
0.06
0.12
0.24
0.12
Financial Position
0.07
0.28
0.21
0.28
Strong online
present
0.05
0.1
0.2
0.15
Profit Margin
0.11
0.33
0.44
0.33
Price
competitiveness
0.11
0.33
0.33
0.22
Value added
service
0.04
0.16
0.12
0.08
0.12
0.48
0.36
0.24
Strong
connectivity
0.10
0.4
0.4
0.10
Billing
Transparency
0.02
0.04
0.06
0.02
Technical
competence
0.02
0.04
0.08
0.02
Handling of
complaints
0.08
0.32
0.24
0.16
Total
3.04
3.46
2.28
Page | 38
It is a tool that compares the firm and its rivals and reveals their relative strengths and
weaknesses.
Unde rstanding the tool
In order to better understand the external environment and the competition in a particular
industry, firms often use CPM. The matrix identifies a firms key competitors and compares
them using industrys critical success factors. The analysis also reveals companys relative
strengths and weaknesses against its competitors, so a company would know, which areas it
should improve and, which areas to protect.
Weight
Each critical success factor should be assigned a weight ranging from 0.0 (low importance) to
1.0 (high importance). The number indicates how important the factor is in succeeding in the
industry. If there were no weights assigned, all factors would be equally important, which is an
impossible scenario in the real world. The sum of all the weights must equal 1.0. Separate factors
should not be given too much emphasis (assigning a weight of 0.3 or more) because the success
in an industry is rarely determined by one or few factors. In our project, the most significant
factors are Market share (0.12), Price Competitiveness(0.11), Strong Connectivity (0.10).
Rating
The ratings in CPM refer to how well companies are doing in each area. They range from 4 to 1,
where 4 means a major strength, 3 minor strength, 2 minor weakness and 1 major
weakness. Ratings, as well as weights, are assigned subjectively to each company, but the
process can be done easier through benchmarking.
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The score is the result of weight multiplied by rating. Each company receives a score on each
factor. Total score is simply the sum of all individual score for the company. The firm that
receives the highest total score is relatively stronger than its competitors. In our Project, the
strongest performer in the market is Bharti Airtel (3.46 points) and its main competitor is
Vodafone (3.04 points)
The same factors are used to compare the firms. This makes the comparison more
accurate.
The analysis displays the information on a matrix, which makes it easy to compare the
companies visually.
The results of the matrix facilitate decision- making. Companies can easily decide which areas
they should strengthen, protect or what strategies they should pursue.
Page | 40
Opportunities
Population
0.30
1.2
0.19
0.38
0.12
0.12
FDI
0.12
0.36
Government Policies
0.15
0.45
New Technology
0.12
0.48
Total
Threats
2.99
When using the EFE matrix we identify the key external opportunities and threats that are
affecting or might affect a company by analysing the external environment with the tools like
PEST analysis, OT Analysis.
EFE Matrix. The ratings in external matrix refer to how effectively companys current strategy
responds to the opportunities and threats. The numbers range from 4 to 1, where 4 means a
superior response, 3 above average response, 2 average response and 1 poor response.
Ratings, as well as weights, are assigned subjectively to each factor. In our Project, we can see
that the companys response to the opportunities is rather poor, because only one opportunity has
received a rating of 4, while the rest have received the rating of 1. The company is better
prepared to meet the threats, especially the first threat.
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Benefits
The matrix have the following benefits:
Easy to understand. The input factors have a clear meaning to everyone inside or
outside the company. Theres no confusion over the terms used or the implications of the
matrices.
Easy to use. The matrix do not require extensive expertise, many personnel or lots of
time to build.
Focuses on the key internal and external factors. Unlike EFE only highlight the key
factors that are affecting a company or its strategy.
Multi-purpose. The tools can be used to build SWOT analysis, IE matrix, GE-McKinsey
matrix or for benchmarking.
Limitations
Easily replaced. EFE matrix can be replaced almost completely by PEST analysis,
SWOT analysis, competitive profile matrix and partly some other analysis.
Page | 42
Doesnt directly help in strategy formation. Both analyses only identify and evaluate
the factors but do not help the company directly in determining the next strategic move or
the best strategy. Other strategy tools have to be used for that.
Too broad factors. SWOT matrix has the same limitation and it means that some factors
that are not specific enough can be confused with each other. Some strengths can be
weaknesses as well, e.g. Changing population psychograph, which can be a strong and
valuable Changing population psychograph or a poor Changing population psychograph.
The same situation is with opportunities and threats. Therefore, each factor has to be as
specific as possible to avoid confusion over where the factor should be assigned.
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He said that these forces jointly determine the competitive intensity of a firm within the industry.
Strength of these forces leads to lower profitability of an organization and vice versa.
Wheelen& Hunger (2002) also considered Porters approach for industry analysis but he also
included sixth force i.e. relative power of other stakeholders. The Porters model provides an
easy and simple approach for industry analyses. This model also provides an opportunity to take
Page | 44
important decisions like whether to enter in a particular industry or to leave it. This is also a very
simple tool in the hands of strategists to determine the profitability position of a firm.
present and future of mobile service payment by using Porters five competitive forces model
(consumer power, merchant power, new e- payment service, traditional payment service and
competition between m-payment service providers and four contingency forces like social
environment, commercial environment, technological environment and
legal/regulatory
environment. They were in view that factors like social environment and traditional payment
service were never considered earlier in research work. Little consideration was given to the five
factors like commercial environment, legal/regulatory environment, merchant power, new epayment services and competition between m-payment service providers.
While highly studied factors were technological environment and consumer power. According to
them there is no clear relationship between mobile service payments, electronic payments,
traditional service payments and banking services. Furthermore he also stressed that business to
business commerce should also be given more attention.
framework of five forces is not applicable in case of religious organization. Since instead of five
forces, the force of mission, faith and loyalty determines organizational efficiency and
profitability.
Analysis
We have analyzed the performance of Bharti Airtel by considering Porter five forces model.
Bharti Airtel has strong rivals in telecommunication sector of India like BSNL and Vodafone.
Initially, it had only two competitors but now this figure has jumped to more than ten. All these
companies are providing similar services with the same capabilities. Although it has enhanced its
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investment in last few years and working hard to expand its network yet the presence of strong
competitors is a major threat for its successful survival. The detail data are available in the first
section.
Although subscribers are not concentrated, not purchase in bulk but still can easily switch for
better quality, coverage and rates. In this context subscribers position is strong. Bharti is the
leading operator in Access segment in terms of number of subscribers. However, in term of net
additions during the quarter, Idea recorded the highest growth of 7.66 million, followed by
Bharti (6.29 million) and Vodafone (4.88 million).
The conclusion from the analysis is shown in tabulated form (Table 2).
Page | 46
Table 2
Forces
Intensity of competitons
High
Medium Low
Forces
V.
Conclusion
So far very little analysis is done on telecom sector using Porter five forces model. Analysis
indicates that although to meet competition the top service provider is struggling hard but the
presence of strong rivals has put a challenge. From above discussion, we may conclude that the
presence of rivals is the main area that needs companys management serious attention.
Company may follow the strategy of horizontal integration by taking the decision of merger or
acquisition with any of its one or two rivals. The leader should offer special packages for
students / education sector since they are the main service users.
Page | 47
1. Political Factors
India is politically very unstable, whenever the government changes, its policies are also changed
and that hampers the functioning of every business sector, so is the telecom sector affected.
1. National Telecom Policy 1994
In 1994, the Government announced the National Telecom Policy which defined certain
important objectives, including availability of telephone on demand, provision of world class
services at reasonable prices, improving Indias competitiveness in global market and promoting
exports, attractive FDI and stimulating domestic investment, ensuring Indias emergence as
major manufacturing / export base of telecom equipment and universal availability of basic
telecom services to all villages. It also announced a series of specific targets to be achieved by
1997
2. New Telecom Policy 1999
The most important milestone and instrument of telecom reforms in India is the New
TelecomPolicy 1999. The New Telecom Policy, 1999 was approved on 26th March 1999, to
become effective from 1st April 1999. NTP-99 laid down a clear roadmap for future reforms,
contemplating the opening up of all the segments of the telecom sector for private sector
participation. It clearly recognized the need for strengthening the regulatory regime as well as
restructuring the departmental telecom services to that of a public sector corporation so as to
separate the licensing and policy functions of the Government from that of being an operator. It
also recognized the need for resolving the prevailing problems faced by the operators so as to
restore their confidence and improve the investment climate.
Page | 48
Strengthening of Regulator.
Private telecom operators licensed on a revenue sharing basis, plus a one-time entry fee.
Direct interconnectivity and sharing of network with other telecom operators within the
service area was permitted.
The entry of private service providers brought with it the inevitable need for independent
regulation. The Telecom Regulatory Authority of India (TRAI) was, thus, established with effect
from 20th February 1997 by an Act of Parliament, called the Telecom Regulatory Authority of
India Act, 1997, to regulate telecom services, including fixation/revision of tariffs for telecom
services which were earlier vested in the Central Government.
TRAIs mission is to create and nurture conditions for growth of telecommunications in the
country in manner and at a pace, which will enable India to play a leading role in emerging
global information society. One of the main objectives of TRAI is to provide a fair and
transparent policy environment, which promotes a level playing field and facilitates fair
competition. In pursuance of above objective TRAI has issued from time to time a large number
of regulations, orders and directives to deal with issues coming before it and provided the
required direction to the evolution of Indian telecom market from a Government owned
monopoly to a multi operator multi service open competitive market. The directions, orders and
regulations issued cover a wide range of subjects including tariff, interconnection and quality of
service as well as governance of the Authority.
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The TRAI Act was amended by an ordinance, effective from 24 January 2000, establishing a
Telecommunications Dispute Settlement and Appellate Tribunal (TDSAT) to take over the
adjudicatory and disputes functions from TRAI. TDSAT was set up to adjudicate any dispute
between a licensor and a licensee, between two or more service providers, between a service
provider and a group of consumers, and to hear and dispose of appeals against any direction,
decision or order of TRAI.
4. Wars and Conflicts
The country is presently peaceful and in coming future their is no chance of any war in the
country ,so investing in the india is quiet good and meaningful .
Regarding conflicts the country is having internal political conflict , which in result are little bit
harmful for investing as government stability is not very strong.
2. Economic Factors
1. Economy situation
GDP -$1876.80 billion (2014)
GDP growth 1.2%
Inflation 5.52% (October 2014)
The Indian economy is growing at normal rate , and most important the population of India the
mostly youth , so entering in the Indian market will be a good sign of investment , the
government of India is putting good effort in encouraging the FDI in the country by providing
tax benefits.
2. Economy Trends
The continuing dominance of youth - Youngsters are different from oldies in a hundred ways,
and anyone can make a long list of the differences. How this will affect Indian society cannot
really be predicted, except to say that it will be more mobile (think more migrants), and more
Page | 50
volatile (stronger responses to frustrations-- one manifestation being the spread of extremist Left
ideology in some 60 districts).
It will adapt faster to new trends, and marketers will be encouraged to focus on low-cost
products and services because youngsters usually have less money. It will probably mean that the
two-parent home (for nurturing children) will remain the predominant norm for long, and that
there will be a strong saving habit because families will be planning (among other things) for
their children's educational future.
India's increasing openness to the world - The foreign trade component of India's GDP (if we
include trade in both goods and services, like software) is now about 55 per cent -- nearly three
times what it used to be. Foreign institutional investors own about 25 per cent of India's listed
stock. And Indian firms were buying three overseas companies a week, through 2006.
A country that is open to the world reacts in fundamentally different ways from a closed system
(of the kind that India used to be).
There is greater self-confidence, faster acceptance of new influences and ideas, a willingness to
accept global benchmarking, and a speedier response to changing circumstance. It is simply a
more adaptive and therefore a more efficient system. Translate that to mean more productivity
growth.
The growth of the middle class- In 2013-14, the National Council for Applied Economic
Research forecasts it will be 200 million. Marry that with growing urbanisation, and it is a safe
guess that well over a third of all Lok Sabha constituencies will have a sizeable middle class and
urban voter base. Think, then, of the many changes this might bring about. The obvious point is
about growth of consumption, but we can go beyond that.
The spread of connectivity and awareness- A country that has 5 million phones and another with
180 million; between a country with 10 million TV sets and one with 120 million; between a
country whose trucks move at 25 km per hour on the highways (counting the time taken for
stops), and 50 km per hour.
Page | 51
Voice Mail
An attractive trade and investment policy and lucrative incentives for foreign collaborations have
made India one of the worlds most attractive markets for the telecom equipment suppliers and
service providers.
No industrial license required for setting up manufacturing units for telecom equipment.
Automatic approval of 100 percent foreign equity, technology fee up to US $ 2 million, royalty
up to 5 percent for domestic sales and 8 percent for exports in telecom manufacturing projects.
Foreign equity of 80% (49 % under automatic route) permitted for telecom services - basic,
cellular mobile, paging, value added services, NLD, ILD, ISPs - and global mobile personal
communications by satellite.
Full reparability of dividend income and capital invested in the telecom sector.
Page | 52
3. Social Factors
1. Age distribution:
The telecom industry in India like Vodafone, Airtel, Idea etc are selling their products according
to various age distribution basis. They make the schemes available to youngsters with low call
rates and messages schemeFor adults if we see make call rates low in std section.
2. Change in tastes and preferences :
As we know price war is going on so the customer can shift over to next brand which cost less
to him so the company has to go according to the needs and preferences of the customer.
3. Social welfare :
Many companies are doing social welfare and taking initiatives for that we can examine the
latest e.g. of idea cellular co. For example on 26 Nov 2009 that it collected money for the victims
of 26/11 attack by the subscribers of idea when any call was made.
4. .Cons umer buying patterns :
The buying behaviour of the customers in India is changing , the customers are shifting to buy
the new products and service according the offers and schemes available to them.
4. Technological Factors
1. Replacement Technology
Technology in India is replacing very fast with change in time, as the economy is growing the
technology is also, so the company bringing new technology will be very successful.
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2. Research funding
Govt is providing various tax benefits and subsidies to the players which are in research and
development fields of telecom sector , the govt has also open various research institutes where
the research is done with the collaboration of various private research companies .
Telecommunications companies with 3G services will no longer be allowed to avail of tax breaks
found under Section 80 IA of the Income Tax Act.
The tax breaks under Section 80 IA are given to companies building infrastructure. In the
telecommunications sector, companies can choose a 10 year period out of the first 15 years of
operations to qualify for the tax benefits.
Companies can choose to avail of a 100 percent exemption on taxable profit in its first five years
and a 30 percent exemption for the next five years.
3. Innovation potential
Innovations potential in India for technology is very high as the internet and broadband and 3G
and 4G services are still niche so coming in India is very profitable.
5. Legal Factors
Until 1985, the Indian Telegraph Act of 1885 and the Wireless Telegraph Act of 1932 provided
the legal basis for the central government's telecommunications monopoly. Under these laws,
posts and telecommunications were combined in one P&T department run by the Ministry of
Communications. In the late 1970s and early 1980s protests against poor service by subscribers,
politicians, industrialists, and business leaders coincided with global and national pressure for
liberalization. As a result, a parliamentary committee was established in 1981, which
recommended numerous structural and service improvements.
A separate Department of Telecommunications (DoT) was established in 1985, under the
Ministry of Communications and two supposedly public sector undertakings (PSUs)(VSNL and
Page | 54
MTNL) were created to expand, develop, and manage crucial segments of the Indian
telecommunications system.
The National Telecom Policy (NTP) of 1994 provided the basis for liberalizing the
telecommunication market. It recognized the importance of liberalization and private sector
participation as key elements of economic development. With the entry of private sector in the
provision of telecommunication services a need was felt to have an independent regulatory body.
The above requirement was indicated in the guidelines issued for entry of private sector in basic
telecom service. Accordingly, Telecom Regulatory Authority of India (TRAI) was established in
the year 1997 in pursuance of TRAI (Ordinance) 1997, which was later replaced by an Act of
Parliament, to regulate the telecommunication services. Legal framework of telecom in India is
supported by TRAI (Telecom Regulatory Authority of India), having purpose of Independent
regulator to control telecom industry.
India continues to be one of the fastest growing telecom markets in the world. Reforms
introduced by successive Indian governments over the last decade have dramatically changed the
nature of telecommunications in the country.
6. Ecological Factors
In present scenario, telecommunication services are widely used all over the world. People
extensively use telephone services, internet services and many more. Initially, there were wired
phones which are not hazardous to our health and also to the environment. Now, more than 80
million people use pocket-sized cellular phones as a principal form of communication and many
researches proved that these smaller phones, with their smaller antenna, increase exposure to
microwaves and pose a potential health threat to the frequent user.
Wireless Technology Research (WTR), formed by the Cellular Telecommunications Industry
Association (CTIA) to research the effects of cellular phones, has indicated several health
problems traceable to radiation exposure due to phone use like many cases of people suffering
from brain tumour, memory loss, and genetic damage in human blood. A recent study indicated
that the number of immune cancer cells doubled in mice exposed to microwaves.
Page | 55
Cognitive effects: A 2013 study examined the effects of exposure to radiation emitted by
standard GSM cell phones on the cognitive functions of humans. The study confirmed the
existence of an effect of exposure on response times to a spatial working memory task, as well as
the fact that exposure duration may play a role in producing detectable effects on performance.
Health hazards of base stations: Another area of concern is the radiation emitted by the fixed
infrastructure used in mobile telephony, such as base stations and their antennas, which provide
the link to and from mobile phones. This is because, in contrast to mobile handsets, it is emitted
continuously and is more powerful at close quarters. Base station emissions must comply with
safety guidelines. Several surveys have found increases of symptoms depending upon proximity
to electromagnetic sources such as mobile phone base stations.
Page | 56
3.6 OT Analysis
A Scan of the internal and external environment is an important part of the strategic planning
process. Environmental factors internal to the firm usually can be classified as strengths (S)or
Weaknesses (w), and those external to the firm can be classified as opportunities (O)or threats
(T). Such an analysis of the strategic environment is referred to as a SWOT analysis.
The SWOT analysis provides information that is helpful in matching the firms resources and
capabilities to the competitive environment in which it operates. As such, it is instrumental in
strategy formulation and selection. The following diagram shows how a OT analysis fits into an
environmental scan:
Opportunity
Population
providers, as the number of population without telecom service is also very high. The
industry has to target India's huge population to grow.
Changing Population Psychograph : population psychograph is also changing
previously telecom service was thought as an emergency service, now it has become an
essential part of life in our country.
Increased Penetration Level: All the organizations of the industry are trying to increase
their penetration level, in other word to increase the tele-density of the country. The
urban Indian population gives a real growth prospect to the industry.
FDI : The foreign direct investment in telecom has been hiked up from 49% to 74%. This
move is positive for the sector, as it requires investments of Rs 700- 900 million over the
next 5 years. FDI inflow by 2004 was 9950.94 cores in telecom. Countries like Europe,
Korea, and Japan telecom are likely to enter India, as India is seen as fastest growing
telecom market in world.
Page | 57
Threats
The threats to the industry are the following :
Government Policies - Government may provide licenses to many foreign operators,
which may already have pose a threat for the existing players in the industry.
New Technology can the Potential of changing the entire industry dynamics or even
create substitute of the telecom services existing.
To summarize the SWOT analysis we can draw the following framework for telecom
industry:
Figure: 3.1
OPPORTUNITY
THREATS
Population
Cnanging Population psychograpy
Increased penetration level
Increasing fiow of FDI
Page | 58
Figure: 3.2
Chance
Factor Conditions
Demand Conditions
Government
Page | 59
Factors Conditions:
Presence of skilled labour pool.
Rapidly developing incomes of consumers.
Increasing disposable incomes of consumers.
Increasing demand due to changing lifestyles and growing attraction for mobiles with
new features.
management.
Many telecom equipment & Software companies are based in India.
Various value added service providers and content developers are present in India.
Demand Conditions:
India has a large middle class of 300 million.
Growing affordability and lifetime free schemes have created a market at the bottom of
the pyramid.
Low tele density (-18%) offers huge future potential.
Page | 60
Governments:
Page | 61
1. Product / services
There is little difference between product and service, when a customer buys a physical product,
he can feel it, see it has tangible aspect whereas services have intangible aspect, a customer can
only benefit from the service only as it has performed by services provider such as operating a
patient consulting a lawyer, getting advise from tax advisor.
Vodafone, the mobile service brand of Vodafone Essar, has emerged as the ''Most Admired
Mobile Service Brand Online'' in India followed by Tata Indicom and Aircel in an pan-India
survey conducted by Drizzlin Media. The survey shows that Reliance Mobile emerged as the
least admired brand.
The term ''DoCoMo'' is usually accompanied by a barrage of wild, high-end mobile hardware, so
we have a tendency to sit up and pay attention whenever the storied name appears on a carrier
anywhere in the world. India's Tata Teleservices of which NTT DOCOMOholds a 26 percent
share is set to launch a newly- branded GSM service as Tata DoCoMo in the southern part of the
country this month, followed by a ''gradual'' expansion nationwide. The logo's pretty awesome,
the name's pretty awesome now we just need some Japanese domestic market handsets to go
along with it and we' ll be in business.
2.Price
In determining the prices of services, the one characteristic, which has great impact is their
perish ability and the fact that fluctuation in demand cannot be met through inventory . Hotels
and Airlines and telecom sectors offer lower rates during off season and lower telephone charges
for outstation call after peak Hours are the example of how pricing can be used.
Price of the all companies are very affordable for the customer and it is as par customers demand
Page | 62
A combination of a price war and a contentious proposal by the Telecom Regulatory Authority
of India, or TRAI, sent telecom stocks reeling. By the end of the week, shares of India's largest
telecom firm Bhatia Airtel LTD, Reliance communications Ltd and Idea Cellular Ltd had fallen
fall by 21.4% , 22% and 15%, respectively. The telecom regulator had recommended that persecond billing be made mandatory for mobile operators so users pay only by the second.
Following the adverse making reaction, Trai chairman J.S. Sharma clarified that the regulator
was considering making per-second billing one of the options that operators would have to offer,
and not only option. ''It's one of the ideas that is being worked upon. It's not as if any decision has
been taken.''
Tata Teleservices Ltd's Tata DoCoMo was the first operator to offer per-second billing
nationally. Vodafone EssarLtdlaunched a plan allowing users with a bonus card to call people in
neighbouring states but not in the same regional circle at 50 paise per minute. Idea, too, has also
highlighted a 50-paisa option as a key price point.
Reliance was the first service provider to offer a flat rate of 50 paisa for calls within India,
national roaming and text messages across networks on a minute' s worth of talk time.
Reliance' s stated objective is to offer a simple package to customers; but the new offer could be
a key card when number portability is launched.
3.Promotion
The fundamental difference which must be kept in mind while designing the promotion strategy
for services, is that customer rheas more on subjective impassions rather than concrete cvidence.
This is because of the inherent intangible nature of nature of services. Secondly, the customer is
likely to judge the quality of services on the actual services. Thirdly since it is difficult to sample
the services before paying for it, the customer finds it difficult to evaluate a product.
Page | 63
Pamphlets,
Hoardings,
Newspaper,
magazines
4. Place
The most important decision element in the distribution strategy relates to the issue of location
of the services so 83 to attract the maximum number of customer such as those of Doctors,
teachers, consultant, machinist etc, poses distribution constraints since they are to serve only
limited and fractional markets.
5. People
people constitute an important dimension in the management of services in their role both as
performers of service and as customer. They must, therefore, be well informed and provide the
kinds or services that win customer approval. People as performance of services are important
because ''A customer sees a company through its employees. The employee represents the first
line of contact with the customer. The firm must recongnize that each employee is a salesman for
the company services''.
Daily telecom e- newsletter with telecom world information, serving you with daily top Indian &
international new right there in you mailbox. updating people in just five minutes about the daily
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Telecom India Daily reaches out to Top professionals, decision makers, technocrats, engineers
associated with leading technology vendors, communications companies, infrastructure
Page | 64
providers, service providers, network integrators, telecom manufacturers and above all the
upcoming professionals - students, with a regular informative update on the latest developments
in the rapidly changing interactive media environment.
Highlights
An immense source of information and latest updates.
Keep employees up to date about the happenings in telecom.
Helping organizations to understand the ongoing business and improves the decision
power of people working within.
Information & data provided can be utilized to explore new areas. Stage for companies to
showcase their press releases.
Sales staff, marketing staff, corporate, students etc.
6. Physical Evidence
Clearness in doctors clinic, exterior appearances and interior decor of restaurant, the comfort of
the seating arrangement in a cinema hall, adequate facility for personal needs at the airport, all
contribute towards the image of the service and organization as perceived by the customer. The
common elements in these are that they all are physical, tangible and controllable aspects of a
service organization. They constitute physical evidence of the service Stores, logos
7.Process
Page | 65
In service organization, the system by which you receive delivery of service constitutes the
process. In fast food outlets the press comprises buying coupons at one counter and picking up
the food against that at another counter.
Services can be described on the basis of types of process used in the delivery of the service.
The three kinds of deliver process that are applicable in case of service product are line
operation, Job shop type of operation is mere use full. Hospital, restaurants and educational
institutions usually have these types of delivery process. Intermittent operations are use full when
the types of service is rarely repeated, Firms offering consultancy for projects use this kind of
delivery system. Advertising agencies also use intermittent delivery system since each
advertising campaign requires a unique set of input factors.
Page | 66
Chapter 4
Financial Analysis
Page | 67
Acquire or rent/lease certain machineries and equipment in the production of its goods;
Issue stocks or negotiate for a bank loan to increase its working capital;
Goals
Financial analysts often assess the following elements of a firm:
1. Profitability - its ability to earn income and sustain growth in both the short- and long-term. A
company's degree of profitability is usually based on the income statement, which reports on the
company's results of operations;
2. Solvency - its ability to pay its obligation to creditors and other third parties in the long-term;
3. Liquidity - its ability to maintain positive cash flow, while satisfying immediate obligations;
Both 2 and 3 are based on the company's balance sheet, which indicates the financial condition
of a business as of a given point in time.
4. Stability - the firm's ability to remain in business in the long run, without having to sustain
significant losses in the conduct of its business. Assessing a company's stability requires the use
Page | 68
of the income statement and the balance sheet, as well as other financial and non- financial
indicators. Etc.
Method
Financial analysts often compare financial analysis (of solvency, profitability, growth, etc.):
Past Performance - Across historical time periods for the same firm (the last 5 years for
example),
Future Performance - Using historical figures and certain mathematical and statistical
techniques, including present and future values, this extrapolation method is the main
source of errors in financial analysis as past statistics can be poor predictors of future
prospects.
Page | 69
Filtration :
Here we have done Filtrations for Financial Analysis. We have make this because we want some
standard Companies for Financial Analysis. So we got four Companies on the basis of filtration
criteria.
Step
1
2
Characteristics
Net Profit
EPS
Result
4
Above We have taken list of Companies on the basis of some companys characteristics. One is
net profit , among 35 companies we taken 10 companies which profit is above 100 cr. In 2013. In
which we got 6 companies.
Than after we have taken a earning per share as characteristics in which we got other final four
company which are taken for further financial Analysis.
No.
Name of Company
Vodaphone South
TATA Telecommunication
Hexacommunication
Bharti Airtel
Page | 70
The ratio analysis is the most important tools of financial analysis. The various groups of people
having different interest are interested in analyzing the financial information.
These groups use the analysis to determine particular financial characteristics of which they are
interested. The importance of ratio analysis can be summarized for various groups of peoples
vested with the diversified interests are as under:
1. For short term creditors The short term creditors like bankers and suppliers of materials can
determine the firms ability to meet its current obligation with the help of liquidity ratio and
quick ratio.
2. For long term creditors The long term creditors like debenture holders and financial
institutions can determine the firms long term financial strength and survival with the help of
leverage or capital structure ratio as debt equity ratio.
Page | 71
c) Is there any risk to the solvency of the firm due to the employment of excessive long term
debts?
4. For investors The investor can determine the magnitude and direction of the movements in
firms earning with the help of profitability ratio such as earning per share etc
Page | 72
Name of Company
Year
2011
2012
2013
Vodafone South
0.61
0.71
0.64
TATA Communication
0.63
0.67
0.79
Hexa communication
0.50
0.71
0.37
Bharti Airtel
0.43
1.17
0.35
Total
2.17
3.26
2.15
Industry total
0.54
0.82
0.53
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
2011
2012
2013
Creditors usually like a low debt to equity ratio because a low ratio (less than 1) is the indication
of greater protection to their money. But stockholders like to get benefit from the funds provided
by the creditors therefore they would like a high debt to equity ratio.
Debt equity ratio vary from industry to industry. Different norms have been developed for
different industries. A ratio that is ideal for one industry may be worrisome for another industry.
A ratio of 1 : 1 is normally considered satisfactory for most of the companies.
Page | 74
Conversely, a current ratio that is lower than industry norms may be a risky strategy that could
entail liquidity problems for the company.
Current ratio must be analyzed over a period of time. Increase in current ratio over a period of
time may suggest improved liquidity of the company or a more conservative approach to
working capital management. A decreasing trend in the current ratio may suggest a deteriorating
liquidity position of the business or a leaner working capital cycle of the company through the
adoption of more efficient management practices. Time period analyses of the current ratio must
also consider seasonal fluctuations.
Name of Company
Year
2011
2012
2013
Vodaphone South
0.61
0.71
0.64
TATA Communication
0.63
0.67
0.79
Hexacommunication
0.50
0.71
0.37
Bharti Airtel
0.43
1.17
0.35
Total
2.17
3.26
2.15
Industry total
0.54
0.82
0.53
Page | 75
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
2011
2012
2013
(Current ratio)
Industry standards
Current ratio must be analyzed in the context of the norms of a particular industry. What may be
considered normal in one industry may not be considered likewise in another sector.
Traditional manufacturing industries require significant working capital investment in inventory,
trade debtors, cash, etc, and therefore companies operating in such industries may reasonably be
expected to have current ratios of 2 or more.
However, with the advent of just in time management techniques, modern manufacturing
companies have managed to reduce the size of buffer inventory thereby leading to significant
reduction in working capital investment and hence lower current ratios.
In some industries, current ratio of lower than 1 might also be considered acceptable. This is
especially true of the retail sector which is dominated by giants such as Wal-Mart and Tesco.
This primarily stems from the fact that such retailers are able to negotiate long credit periods
with suppliers while offering little credit to customers leading to higher trade payables as
Page | 76
compared with trade receivables. Such retailers are also able to keep their own inventory
volumes to minimum through efficient supply chain management.
Importance
Current ratio is the primary measure of a company's liquidity. Minimum levels of current ratio
are often defined in loan covenants to protect the interest of the lenders in the event of
deteriorating financial position of the borrowers. Financial regulations of various countries also
impose restrictions on financial institutions to lend credit facilities to potential borrowers that
have a current ratio which is lower than the defined limits.
For the purpose of this ratio, net profit is equal to gross profit minus operating expenses and
income tax. All non-operating revenues and expenses are not taken into account because the
purpose of this ratio is to evaluate the profitability of the business from its primary operations.
Examples of non-operating revenues include interest on investments and income from sale of
fixed assets. Examples of non-operating expenses include interest on loan and loss on sale of
assets.
The relationship between net profit and net sales may also be expressed in percentage form.
When it is shown in percentage form, it is known as net profit margin. The formula of net profit
margin is written as follows:
Page | 77
Name of Company
Year
2011
2012
2013
Vodafone South
7.51
12.06
13.97
TATA Communication
6.47
14.87
18.35
Hexa communication
22.52
22.65
22.04
Bharti Airtel
16.72
14.23
16.78
Total
53.22
63.81
71.14
Industry total
13.305
15.95
17.785
20
18
16
14
12
10
8
6
4
2
0
2011
2012
2013
Page | 78
There is no norm to interpret this ratio. To see whether the business is constantly improving its
profitability or not, the analyst should compare the ratio with the previous years ratio, the
industrys average and the budgeted net profit ratio.
The use of net profit ratio in conjunction with the assets turnover ratio helps in ascertaining how
profitably the assets have been used during the period.
Name of Company
Year
2011
2012
2013
Vodafone South
1.21
0.90
0.66
TATA Communication
0.43
0.42
0.53
Hexa communication
3.07
4.71
3.57
Bharti Airtel
0.17
0.16
0.16
Total
4.88
6.19
4.92
Industry total
1.22
1.5475
1.23
Page | 79
1.8
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
2011
2012
2013
Page | 80
your
product,
you
might
shift
your
focus
to
marketing
to
women.
Year
2011
2012
2013
Vodaphone South
6277.33
11512.4
12736.7
TATA Communication
3611.77
4091.77
4416.12
Hexacommunication
2943.45
3379.1
3666.1
Bharti Airtel
38017.7
41603.8
45350.9
Total
50850.25
60587.07
66169.82
Industry total
12712.56
15146.76
16542.45
20000
15000
10000
5000
0
2011
2012
2013
Page | 81
Inte rpretation:
You may see here that Four companys average making sales avg. which is goes up in graph. It is
indicating that from 2011 to 2013 sales going up which means there is nothing any problem in
sales nd thats why profit margin also goes up. The reason is that internet user are become
increase day to day and Bharti Airtel have make less in charges in phone calls.
Expenses
Table : List of Company
Name of Company
Year
2011
2012
2013
Vodafone South
6315.94
8462.4
9241.4
TATA Communication
2780.9
3103.8
3447.18
Hexa communication
2029.72
2257.6
2555.7
Bharti Airtel
24677.4
27960.1
31880.2
Total
35803.96
41783.9
47124.48
Industry total
8950.99
10445.95
11781.12
14000
12000
10000
8000
6000
4000
2000
0
2011
2012
2013
Inte rpretation
You may see hare that Expenditure trend is going on increase due to sale also goes up. Expenses
are goes up from 8950.99 in 2011 to 31880.2 in 2013. Airtel Having a high charges of internet
package than vodaphone which is more costly call rate company.
Page | 82
Chapter 5
Business Plan
Page | 83
Executive Summary
Uninor Cellular Providers is taking advantage of an opportunity to become a highly
distinguished and recognized industry leader in the cellular communications industry. It is the
goal of our company to become established as the leading distributor of wireless
communications services.
In order to achieve this goal, Cellular Providers' critical success factors will be to identify
emerging trends and integrate them into Cellular Providers' operations, respond quickly to
technology changes/be there early, provide high-quality services, continue to invest time and
money in marketing and advertising, continue to expand into specialty markets, and stay ahead
of the "technology curve."
Uninor services are commercially available in 6 circles, covering a population footprint of 600
million people. Uninor serves more than 3 crore customers in the states of Uttar Pradesh,
Uttarkhand, Bihar, Jharkhand, Maharashtra, Goa, Gujarat and Andhra Pradesh. The mobile
service provider targets youth and other communities within the Indian mass market. In recent
Spectrum auctions Uninor secured fresh spectrum in 4 of its existing circles and in a new circle
of Assam.
Page | 84
Objectives
-
Vision
Empower societies we provide the power of digital communication, enabling everyone to
improve their lives, build societies and secure a better future for all.
Our vision to empower societies is a clear call to action. We bring vital infrastructure,
new services and products that stimulate progress, change and improvement.
Mission
Were here to help our customers We exist to help our customers get the full benefit of
Page | 85
being connected. Our success is measured by how passionately they accept us and make
us a part of their life.
5.2
Company Description
Type
Industry
Founded
Headquarters
Key people
Services
Owners
Employees
Parent
Website
private
Telecommunications
2009
Gurgaon, India
Jon Fredrik Baksaas (No minated CEO)
Mobile telephony Wireless internet
Jon Fredrik Baksaas
1,600
Telenor Group
www.uninor.in
Page | 86
Step 4 : Centre has to ensure that all that is mentioned in the company profile and
other legal papers & certification is true and correct.
Process Details :-
Page | 87
Gumasta-dhara certificate
Segments: Geographic, and demographic Wise urban and rural area and male as Well as
female.
Target groups: We are targeting young students middle class and lower class.
Positioning: We are set our positioning on the base of service quality and lower price
Improve infrastructure
Provide support for new technologies and establish technology up- gradation fund (TUF)
Page | 88
Consolidate acts into an Integrated telecom Legislation, simplify regulatory structure and
strengthen regulations
Identify hazards associated with industrial activity and take adequate steps for
Prevention and control
Page | 89
Submit written report regarding Notification of site at least three months before
commencing any activity using hazardous materials
Submit an up-to-date safety report at least ninety days before making any
modification
New and existing industrial activities to carry out safety auditand submit report within
30 days
Submit a safety audit update report once a year and forwarding a copy within 30 days
UNINOR(Distribution Channel)
Distributor
Retailer
Consumer
Uninor actively uses an electronic Distribution Management System, which pulls in data
from various sources.
All field sales managers have a handheld device connected to a central database,
providing real-time updates on sales and inventory numbers.
Page | 90
The Sales Tracking System ensures retailers do not run out of stock and are always
supplied with relevant products in real time.
Personal sales
Demonstration
Free sample
Dealer incentive
Employee Allowance
delinked from the license. Since the value of spectrum is determined by way of a market driven
process, the M&A activities should not be deterred by way of lock- in restrictions, which
substantially hinders acquisitions in this sector.
Value Added Services
The UL Recommendations state that the licensee must be allowed to provide voice mail services,
audiotex services, videoconferencing, unified messaging services and other 'value added
services' over its network for subscribers in its service area, on a non-discriminatory basis. The
TRAI notes that the current scope of value added services is limited and seeks to expand it in line
with its recommendation issued previously. TRAI had in May 2012, defined 'value added
services' to mean enhanced no-core services, which either add value to basic tele services (such
as standard voice calls, voice/non-voice messages, fax and data transmission) or those that can be
provided as standalone application services through telecommunication network.
Tripartite agreement
The TRAI has recommended that the tripartite agreement which must be executed between
licensor, licensee and lenders (as one of the conditions for transfer or assignment of licence),
should be modified to include spectrum and that this requirement be prescribed in the WOL
agreement.
Performance Guarantee
TRAI has made specific recommendations on the performance bank guarantee (PBG) for (i)
compliance with conditions of the license agreement and (ii) PBG for roll-out obligations. With
respect to PBG of Rs. 10 (ten) Crores for compliance with conditions of the license agreement
and instructions of the DoT, the TRAI recommends that the condition must be deleted from the
license agreement and instead must be retained as a part of the WOL. With respect to PBG for
roll-out obligations, the TRAI recommends:
a. In respect of each of the service areas, except Delhi, Mumbai and Kolkata, PBG shall be
submitted for an amount of Rs. 14 (fourteen) Crores per service area. This PBG would be
valid for a minimum period of six (6) years, further extendable by two (2) years.
Page | 93
b. In case of Delhi, Mumbai and Kolkata PBG shall be submitted for an amount of Rs. 7
(seven) Crores per service area valid for a minimum period of two (2) years, further
extendable by two (2) years.
Penalties
The UL Recommendations state that the maximum financial penalty for major violations of
license terms and conditions should be reduced from Rs. 50 (fifty) Crores to Rs. 10 (ten) Crores,
a figure in proportion to the entry free, paid-up capital and net worth criteria of a licensee in each
service area. Currently, there are no stipulated guidelines on how the penalty should be imposed
and the DoT usually imposes with maximum penalties, even for minor violations.
TRAI has recommended that the penalty be levied on the basis of whether a violation is minor or
major and the recurrence of the violation. While the penalty prescribed is exclusive of the
liquidated damages prescribed in the license agreement, the UL Recommendations recommend
that the Dot must be given the right to cancel the license if a major violation is committed after
the fourth time.
Other Recommendations
The UL Recommendations have also suggested changes to the definition of Adjusted Gross
Revenue (AGR), in that intra-service area roaming revenues should not be excluded from Gross
Revenue for calculating the AGR of the service provider. Further, for levying spectrum charges,
it recommends that only the revenue from the wireless services must count towards AGR
calculation.
The TRAI has also suggested inclusion of two new clauses to the draft UL (AS). First clause
enables the TRAI to undertake regular spectrum audit for overlooking its efficient management.
The licensee will be required to provide relevant data, reports, test, equipment and other
accessories and permit inspection of its sites by TRAI personnel.
The second and the more important one suggests that the WOL must include a condition that
operators whose entire spectrum holding in a particular band (900MHz/ 1800MHz and 800MHz)
has been liberalized and must be permitted to share spectrum without any additional one-time
Page | 94
spectrum charge, subject to the guidelines issued by the Dot from time to time. However,
spectrum trading is not permitted at present.
The bank balance is also known as the balance per bank or balance per bank statement
and it refers to the ending balance appearing on a bank statement
A bank is a financial intermediary that accepts deposits and channels those deposits
into lending activities, either directly by loaning or indirectly through capital markets.
Personal Savings
The rst place to look for money is your own savings or equity. Personal resources can include
prot-sharing or early retirement funds, real estate equity loans, or cash value insurance policies.
Page | 95
Validity (day)
Key benefit
Rs.6
Rs.7
Rs.13
Rs.23
Rs.29
Rs.38
Rs.88
3
2
28
7
28
28
28
Rs.101
28
Rs.149
Rs.198
28
28
Rs.201
Rs.238
Rs.249
28
90
28
666 Sec for Local U2U & 666 Sec for Local U2O
Unlimited local U2U Calls Vaild for 2 Days
All Local calls @1.2p/2 sec
7000 sec Local U2U & 3000 sec Local U2O Valid for 7 Days
All Local calls @ 1p/2 sec for 28 days
30,000 Local U2U Secs for 28 days
Unlimited Local U2U Calls for 28 Days + 100 MB Data validity
1 Day
Unlimited Local U2U calls free;Local U2O calls @30p/min for
28 Days
26,000 Sec Local U2U and 24,000 Sec Local U2O for 28 Days
500 Minutes Local U2U and 500 Minutes Local U2O free for 28
Days and 100 MB data for 1 Day
900 All Local Mins
Unlimited Local U2U for 90 days
145,000 Sec Local U2U and 55,000 Sec Local U2O for 28 Days
Validity(days)
Benefits
Rs. 42
30
RS. 9
Rs. 14
Rs. 25
Rs. 27
30
1GB during 11 pm to 7 am
Rs. 47
14
Rs. 125
28
Rs. 151
30
SMS Pack
MRP
16
46
Validity(days)
28
28
Benefits
100 local and national SMS free
2,500 local + National SMS
Validity(days)
30
Benefits
America, Canada and U.K(landline)for 2ps/per seconds,
Bangladesh for 4ps/seconds, Nepal for 10ps/seconds,
Gulf country for 15ps/seconds.
ISD Pack
MRP
19
Page | 97
Particulars
Amount
Site on Rent
25000
Computer (23500*3)
70500
Furniture
50000
5000
2000
Staff Salary
Computer operator
3 * 7500
Labor
1 * 2500
Other Expenses
Total
40000
10000
2,02,500
Cash on Hand
47500
Cost of project
2,50,000
Page | 98
Year (2014-15)
345000
Commission
6,900
13800
Total income
3,65,700
Expenditure
Salary
40,000
Electricity bill
6,000
Rent
25,000
Miscellnious exp.
10,000
Total Exp.
81,000
Net Profit
2,84,700
Page | 99
Chapter :6
Conclusion and Limitations
Page | 100
Page | 101
6.2 FINDINGS
New entrants can take advantage of gaps in the offerings of these aging pioneers, or find
innovation ways to market product or service.
Re-examining high levies: The Indian telecom sector is one of the highest taxed sectors in the
developing world, through levies, which comprise service tax, revenue share, spectrum cess, and
value added tax.
Bringing down operators capex: To expand the telecom services, there will be greater
investment needs in the future. Telco's will have to engage on active and passive infrastructure
sharing.
Rational policy for spectrum allocation: The allocation of adequate spectrum is an urgent
requirement for and existing operators. A clear roadmap for future spectrum allocation has to be
drawn, whether it is a 2G or a 3G platform. operators need to be cautious in 'bidding' and should
not overpay for spectrum as that could disturb project economics.
Data revenues to provide 'Buffer': India's data revolution is going to be fuelled by 3G and
WIMAX. For the data revolution to reach villages, low-cost access devices, vernacular content,
and community initiatives such as E-governance need to be in place.
Enhancing skill sets: The sector will require specialist resources to support and sustain growth
over the next four to five years. And pressure on talent is expected to increase with the
deployment of 3G and WiMAX services. The private sector will need to reorient its focus on
talent development through training schools and facilitation programs that cater to the needs of
the telecom industry.
Impact of global economic downturn:The current financial crisis could have a low-to-medium
impact on the telecom sector in terms of rising costs of capital and reduction in discretionary
spending on the part of customers, among other determinants.
Page | 102
6.3 LIMITATION
We have collected the secondary data where we cannot able to get exact information about the
telecommunication industry privilege in the market as based in past data and hence cannot be
reliable guide to future performance as future is dependent on other factors.
Page | 103
6.4 CONCLUSION
The technology improvement has helped the sector to perform better and has also expanded
the meaning of the term "telecommunication" from just audio message transformation to virtual
presence of person. the sector clearly shows a scope for future.
In our opinion, instead of taking a short-term view of paying capacity, the telecom companies
should focus on a long -term game. There is one word that telecom companies are hearing a lot
these days- "Volumes". They need volumes to sustain the network and the large employee base
they have enrolled. In this regard, companies like reliance is giving up to 30% commission on
each call. If and when the carrier access codes are introduced, there could be a tough fight among
these outlets, as far as prices are concerned. Yet, prices can go down further by almost 40% of
the present structure. Part of the same . The other part could be earning through volumes. New
players like Virgin Mobile, which already has international presence in close to 17 countries are
entering India. It is doing so in collaboration with Tata Tele services. The target market for
Virgin Mobile is the youth, which in India is around 54% of its population. Mobile
number portability (MNP) is to introduced by Jan 2011. A neutral third - party operator is
likely to be licensed to provide an end toned MNP solution. MNP could well better service
quality. There are challenges like porting time, allocation of capital and operational porting
costs among positive and will be set once the committee submits its final report on the
same.
The telecom sector is attracting significant domestic and global investment. The capital
investment made by the telecom service industry during 2006-07 was around $8.5 billion,
out of which $550 million was foreign direct investment. The margins and profits of
almost ail the telecom companies have been increasing .In fact there are cases where
significant portions of profit of international telecom companies have been from their
operations in India.
India is well prepared for the introduction of NGN (Next-Generation Networking). Being a late
starter in the telecom scenario, India has the advantage of using the latest technology and
so it is in a better position when compared to many other countries as far as introduction of
NGN is concerned. Besides, the TRAI has identified introduction of NGN as apriority area. As
Page | 104
of today seem favourable toward the continued growth of the telecom industry. The target of
500 million telephone connection by the year 2010 is very much achievable. Ever with 300
million telephone connection, the tele-density of the country is only about 26 percent. It has
been noted that mobile telephone is growing at an annual rate of over 90 percent. Also, on an
average over eight million subscribers are being added every month. Beside the basic telephone
service, there is a huge potential for different Value Added Service (VAS). In fact , the real
potential for telecom service growth is still lying untapped.
Page | 105
BIBLOGRAPHY
BOOKS:
NEWS PAPER
1. Economies of time
2. Business standard
WEBSITES:
www.Wikipedia.org.(n.d).Retrieved 1123,2010, form
www.wikipedia.org:http://en.wikipedia.org/wiki/telecomm.ntml