TELECOM SECTOR AIBS

1. TELECOM SECTOR
Presented by:-
Anupam Tiwari
Gaurav Shanker Mathur
Navdeep Bishnoi
Shoaib Rizvi
Abhishek Malla
Gaurav Gupta

2. Overview Of Telecom Industry
 Indian Telecom sector, like any other industrial
sector in the country, has gone through many
phases of growth and diversification.
 Starting from telegraphic and telephonic systems in
the 19th century, the field of telephonic
communication has now expanded to make use of
advanced technologies like GSM, CDMA, and WLL
to the great 3G Technology in mobile phones.
 Day by day, both the Public Players and the
Private Players are putting in their resources and
efforts to improve the telecommunication
technology so as to give the maximum to their
customers.

3. Telecommunication industry can be divided
into
 Fixed line Telephony
 Public Players
- Subscribers
 Private Players
◦ Subscribers
Mobile Telephony
 Public Players
- Subscribers
 Private Players
◦ Subscribers

4. Market shares of Public Players in
Indian Fixed Line Telephony

5. Market shares of Public Players
in Indian mobile telephony

6. Investment
 The Indian telecom sector can be broadly classified
into Fixed Line Telephony and mobile telephony.
The major players of the telecom sector are
experiencing a fierce competition in both the
segments.
 The major players like BSNL, MTNL, VSNL in the
fixed line and Airtel, Hutch, Idea, Tata, Reliance in
the mobile segment are coming up with new tariffs
and discount schemes to gain the competitive
advantage.
 The Public Players and the Private Players share
the fixed line and the mobile segments. Currently
the Public Players have more than 60% of the
market share.

7. Market shares of public and
Private Players
 Both fixed line and mobile segments serve the
basic needs of local calls, long distance calls and
the international calls, with the provision of
broadband services in the fixed line segment and
GPRS in the mobile arena.
 Traditional telephones have been replaced by the
codeless and the wireless instruments. Mobile
phone providers have also come up with GPRS-
enabled multimedia messaging, Internet surfing,
and mobile-commerce..

8.  Along with improvement in telecom services, there is
also an improvement in manufacturing. In the beginning,
there were only the Siemens handsets in India but now a
whole series of new handsets, such as Nokia's latest N-
series, Sony Ericsson's W-series, Motorola's PDA
phones, etc. have come up.
 Touch screen and advanced technological handsets are
gaining popularity. Radio services have also been
incorporated in the mobile handsets, along with other
applications like high storage memory, multimedia
applications, multimedia games, MP3 Players, video
generators, Camera's, etc..

9. The leading cellular service providers have
the following number of subscribers:
• Reliance
 Tata
 Airtel
 MTNL
 BSNL
 Hutch
 Idea
 Spice
 BPL
 Aircel

10. Performance
 The Indian telecom industry has witnessed a significant upswing
and is presently on a high speed growth path, enjoying a growth
rate of ~45 % p.a., among the highest in the World. India currently
has ~550 million telecom subscribers, translating to a tele-density of
~46%.
 According to Business Monitor International, India is currently
adding 8-10 million mobile subscribers every month. It is estimated
that by 2012, around half the country's population will own a mobile
phone.
 This would translate into 612 million mobile subscribers, accounting
for a tele-density of around 51%. Meanwhile, authorities believe
current broadband subscriptions are ~20 million and internet
subscriptions are ~40 million.

11. Strengths
 Huge Customer potential
◦ Tele density still being 48% and rural tele-density
21%.
◦ The broadband subscribers grew from 0.18 million in
2005 to6.2 million as on 30 April 2009 and about 7.98
million, at the end of the December 2009.
 High return on Investment
◦ Easier to create economies of scale thereby
increasing return on investment
 Liberalization efforts by Govt.
◦ The share of private sector in total telephone
connections is now 82.33% as per the latest statistics
available for December 2009 as against a meager 5%
in 1999.

12. Weakness
 Poor Telecommunication Infrastructure
◦ Result : Large number of call drops.
 Late adopters of New Technology
◦ India will be among the last countries in the
world to get access to 3G technology. Some
estimates suggest that nearly 132 countries
across the world already have 3G technology
and mobile services in one form or the other.
 Most competitive market
◦ 10 to 12 companies offer mobile services in
most parts of India, globally, the average is 4.
 A market strongly regulated by
Government.

13. Opportunities
 Value added Services (VAS)
◦ The mobile value added services include,
text or SMS, menu based services,
downloading of music or ringtones, mobile
TV, videos, streaming, sophisticated m-
commerce applications etc.
◦ Mobile banking, Mobile Ticketing etc
 Boost to Telecom Manufacturing
Companies
◦ Production of telecom equipments in value
terms has increased from Rs. 412700 million
(2007-08) to Rs.488000 million during 2008-
09 and expected to increase to Rs. 575840

14. Threats
 Telecommunication Policies
◦ e.g. Trai's 2G direction affecting new players
most notably Tata Teleservices, Norway’s Telenor
and Essar-owned Loop Telecom
◦ Renewal of 2G license on the basis of market
rates of 3G auctions
 Declining ARPU (average Revenue per user)
◦ E.g. price wars like per-second billing which is
deflating revenues and making sure the ‘survival
of the fittest’
 Partiality on the part of the Govt.
◦ E.g. Allowing 3G service in a PSU (MTNL,BSNL)
before auctioning to Private Sector .

15. Future Prospects
 Given the exciting times ahead, the sector is a huge
employment generator, likely to generate over ~3 lakh new
jobs over the coming 5 years.
 There is a huge demand for qualified and skilled
professionals with technical knowledge and hands on
experience. In order to fulfill their rapid growth plans, players
lure talent with handsome rewards.
 Suitably skilled candidates can expect a significant premium
salary even at the starting level, due to the challenges the
industry is facing in terms of finding and recruiting proper
talent. Industry experts believe that the talent crunch in this
sector will push salaries even further than the current 15%
hike.

16. Future Prospects
 Given the exciting times ahead, the sector is a huge
employment generator, likely to generate over ~3 lakh new
jobs over the coming 5 years.
 There is a huge demand for qualified and skilled
professionals with technical knowledge and hands on
experience. In order to fulfill their rapid growth plans, players
lure talent with handsome rewards.
 Suitably skilled candidates can expect a significant premium
salary even at the starting level, due to the challenges the
industry is facing in terms of finding and recruiting proper
talent. Industry experts believe that the talent crunch in this
sector will push salaries even further than the current 15%
hike.