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Industrial Marketing - Telecommunications / Telecom Sector

a look at the International Marketing practices followed in the Telecommunication / Telecom sector

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Industrial Marketing - Telecommunications / Telecom Sector

  1. 1. Industrial marketing Telecommunications Industry Presented By: Balagopal P (301) Aditya Cheema (304) Nachiket Kulkarni (311) Ishan Parekh (315) Dishank Shah (318) Dhruv Kalia (324)
  2. 2. Introduction to the industry, sector and the company.
  3. 3. 3 Indian Telecom Industry – A Lucrative Option In recent years, the Indian telecom industry has witnessed phenomenal growth. A conducive business environment, favourable demographic outlook and the political stability enjoyed by the country have contributed to the growth of the industry. India achieved the distinction of having the world's lowest call rates (2–3 US cents), the fastest sale of million mobile phones (1 week), the world's cheapest mobile handset (USD 19) and the world's most affordable colour phone (USD 31). Indian Telecom Industry  One of the fastest growing cellular markets in the world in terms of number of subscriber additions – 19.35 million in 3 months (April to June 2007)  Expected to reach total subscriber base of about 500 million by 2010 (i.e., more than one phone for every household)  Annual growth rate of the telecom subscribers – 47 percent (2006–07)  More GSM subscribers than fixed-line subscribers Indian Telecom Industry – Facts  Total telecom subscribers – 225.21 million (June 2007)  Tele density – 19.86 percent (June 2007)  Number of new mobile subscribers added every month – 7.34 million (June 2007)  ARPU for GSM – USD 6.6 per month  Telecom equipment market – USD 17,100 million (2006–07)  Handset market – USD 4,750 million (2006–07)
  4. 4. 4 9 10 11 15 20 43 0 10 20 30 40 50 2002-03 2003-04 2004-05 2005-06 2006-07 ….. …. 2009-10 Revenues(USDbillion) Revenues of Indian Telecom Industry: 2002–07 (USD billion) Telecom Services – India The Indian telecom services can be divided predominantly into basic, mobile and Internet services. It also comprises smaller segments, such as radio paging services, Very Small Aperture Terminals (VSATs), Public Mobile Radio Trunked Services (PMRTS) and Global Mobile Personal Communications by Satellite (GMPCS). The growth witnessed in the mobile services and Internet services segments was higher as compared to other services, such as basic services and radio paging services. Registered an annual growth of 33 percent in 2006–07 The Indian telecom market generated revenues of approximately USD 20 billion in 2006–07. It registered a CAGR of approximately 22 percent from 2002–03 to 2006–07. The CAGR from 2006–07 to 2009–10 is expected to stabilise at 21 percent. Apart from mobile telephony services, other value-added services are also gaining importance. Telephony services (mobile and basic) and Internet services dominate the Indian telecom services
  5. 5. Exciting Possibilities Booming Telecom Market Technologies Devices Services Applications
  6. 6. Global Fibre Optic Industry 0 5 10 15 20 25 30 North America Asia Western Europe Eastern Europe Others Growth YoY (%) Growth YoY (%)
  7. 7. Indian Fibre Optic Industry • CAGR – 36% • Major growth in demand since Broadband Policy of 2004 • Increased adoption by cable TV segment, multi- service operators & e-Government initiatives • Unprecedented growth in telecommunications - $50 billion till date in 2011. The beginning of an always – connected future..
  8. 8. Indian Fibre Optic Industry – Segmentation (on the basis of buyers) Buyers Government Incumbents Telecom Power Oil & Gas E- Governance Private Incumbents Cable TV Telecom Multi- Service Operators Broadband Support
  9. 9. Indian Fibre Optic Industry – Segmentation (on the basis of price) Low End Middle End High End • Low price, Low technology • Main Players – Bhagyanagar India, Shilpi Cable • High Commercial Use • Main Players – Vindhya Telelinks, Surana Telecom • High emphasis on application • Main Players – Sterlite Technologies, Finolex
  10. 10. Finolex • A private sector conglomerate founded in 1985 • Consists of: ▫ Finolex Cables ▫ Finolex Industries ▫ Finolex J-Power Systems ▫ Finolex Plasson Industries
  11. 11. Introduction, products, competitors and its market share.
  12. 12. History of Finolex • 1945 – Chabbaria Bros. came to Pune from Karachi and started a small shop selling electric cables • 1956 – Started a small scale industrial unit manufacturing PVC industrial cables for automobile industry • 1983 – IPO of Finolex Cables Ltd. • 1993 – Started manufacturing Optic Fibres Cables • Today: ▫ Turnover exceeds $750 million ▫ Listed in BSE, NSE, Luxemburg Stock Exchange ▫ Only “Superbrand” cable company in India
  13. 13. Finolex Cables • India’s largest manufacturer of electrical & telecommunication cables • Manufacturing facilities at Pune, Goa & Uttarakhand • Product application range is used for electrical usage, transmission of voice, data & images for domestic, commercial & industrial applications.
  14. 14. Products Wires & Cables and Switches Compact Fluorescent Lamps (CFLs) Copper Rods PVC-U Pipes & Fittings and PVC Resins Chemicals Drip Irrigation System Optical Fibres
  15. 15. Optical Fibres (Types) Optical Fibres LWPF Low Water Peak Fibre LBLF Low Bend Loss Fibre NZDSF Non Zero Dispersion Shifted Fibre
  16. 16. Optical Fibres (Types) • Low water peak enables for lower attenuation of signals (up to 22%) • Guarantees stable loss over time LWPF (Low Water Peak Fibre) • Lower refractive index based cladding used to reduce bending loss • Consists of 2 types, viz. Low – Loss & Bend Insensitive LBLF (Low Bend Loss Fibre) • Dispersion point moved outside normal communications window • Four – wave mixing & other non – linear effects are minimized NZDSF (Non – Zero Dispersion – Shifted Fibre)
  17. 17. Competitors Sterlite Technologies Aksh Optifibre Vindhya Telelinks Bhagyanagar India Shilpi Cable Surana Telecom Birla Ericsson Paramount communication Tamil Telecom
  18. 18. Share in the Optical Fibre Market 31% 25% 22% 12% 10% Market share % Sterlite Technologies Birla Ericsson Finolex Aksh Optifibre Others
  19. 19. Global Customers of Finolex
  20. 20. Consists of various financial ratios.
  21. 21. Profitability Ratios -10 0 10 20 30 40 50 Mar '11 Mar '10 Mar '09 Mar '08 Mar '07 % Profitability Ratios Operating Profit Margin(%) Profit Before Interest And Tax Margin(%) Gross Profit Margin(%) Cash Profit Margin(%) Adjusted Cash Margin(%) Net Profit Margin(%) Adjusted Net Profit Margin(%) Return On Capital Employed(%) Return On Net Worth(%) Adjusted Return on Net Worth(%) Return on Assets Excluding Revaluations Return on Assets Including Revaluations Return on Long Term Funds(%)
  22. 22. Liquidity & Solvency Ratios 0 0.5 1 1.5 2 2.5 Mar '11 Mar '10 Mar '09 Mar '08 Mar '07 Liquidity & Solvency Ratios Current Ratio Quick Ratio Debt Equity Ratio Long Term Debt Equity Ratio
  23. 23. Management Efficiency Ratios 0 10 20 30 40 50 60 70 80 90 100 Mar '11 Mar '10 Mar '09 Mar '08 Mar '07 Management Efficiency Ratios Inventory Turnover Ratio Debtors Turnover Ratio Investments Turnover Ratio Fixed Assets Turnover Ratio Total Assets Turnover Ratio Asset Turnover Ratio Average Raw Material Holding Average Finished Goods Held Number of Days In Working Capital
  24. 24. Segmentation • Telephone Department • Government • Private. Service Provider • Wireless • Communication Tower Voice Transfer • International Data Transfer • Internet Data Transfer
  25. 25. Raw Material Suppliers Manufacturing Unit Production Quality Control Maintenance & Dispatch
  26. 26. Distribution strategy Large distribution network Fact file: 15000 dealer and retailers spread across the country Strategy: Intensive & Exclusive
  27. 27. manufacturer merchant customer manufacturer distributor retailer customer
  28. 28. Pricing Strategy Market Oriented Pricing • Setting a price based upon analysis & research compiled from the target market analysis Contribution Margin – based Pricing • Maximizes profit derived from an individual product based on product’s contribution margin per unit
  29. 29. Integrated Marketing Communications (IMC) Caspian Telecoms Hannover Messe IEEE Power & Energy Society Events
  30. 30. Integrated Marketing Communications (IMC) Promotions
  31. 31. • Finolex makes continuous investments in advertising and marketing promotions • Marketing activities include TV commercials aired nationally and press advertisements in national dailies • Proactive attitude to keep dealers and distributors involved through below-the-line promotions, dealer meets, training and workshop sessions, demonstrations and attractive incentives
  32. 32. SWOT Analysis • 20% growth in electrical cable industry • Industry growing alongwith economic growth • Fibre optics market picking up • Stiff competition from other companies • Changing Government policies • Introduction of small players may increase competition and malpractices • Premium product- 5 to 10% costlier • Telecom cable division not showing significant growth • Heavy duty electrical products not included in product line • 22-24% market share • Best quality- super brand • Large distribution network • FMS- ability to change as per profitability • Backward integration Strengths Weaknesses OpportunitiesThreats

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