Telecom Infrastructure

Telecom Industry Analysis Focus Area: Tower Construction Companies

Presented By: Abhishek Agarwal Nirmal Tom Thomas George Madhusudan Verma Amrit Dutta

Industry Overview

Tower Industry in India

Industry Analysis

Major Players

Issues & Challenges

Chronology of Events:

Key Highlights
second largest network in the world. lowest call tariffs in the world. revenue: 33,350 million USD. industry has grown over 20 times in just 10 years. expected CAGR: 15% 1933- Radio Telephone system introduced 1960- First STD route in UP 1979- First Optical Fiber System 1995- First mobile phone service, Delhi 1995- Internet introduced in metros 2002- Subscriber Base: 10.5 millions 2012- Subscriber Base: 960 millions

Key Statistics: Telephone Fixed Lines: 31.53 million Mobile phones: 930 million Tele-density: 79.28% Rural Tele-Density: 33%

Key Statistics: Internet Household Access: 137 million Broadband Household Access: 14.31 million Internet Service Providers: 155 Household Access (%): 10.2%

Source: www.wikipedia.com

Subscribers Statistics

Source: www.trai.gov.in

Regulatory Framework:
TRAI- formed under the TRAI Act 1997. Objective: provide a transparent policy environment. Mission: to create and nurture an environment which will enable the quick growth of the telecommunication sector in the country. Some of the functions include: recommendation for new service provider. ensure compliances. monitor quality of service. protect interests of consumer. dispute settlement.

Industry Overview

Tower Industry in India

Industry Analysis

Major Players

Issues & Challenges

Tower capacity addition at a CAGR of above 30% during FY 2006 to FY 2011

Number of towers in the country is ~400,000 today

May be a ground based tower (GBT) or a roof top tower (RTT)

Industry Types:
Formed through JVs like Indus towers. Formed through de-merger like Reliance Infratel. Independent tower companies like GTL.

Role:
site planning & acquisition, obtaining of necessary regulatory approvals, erection & commissioning of tower and allied equipment. After the site starts radiating, the site maintenance including provision of support services such as back-up power, airconditioning and security.

Industry Overview

Tower Industry in India

Industry Analysis

Major Players

Issues & Challenges

Indus Towers Ltd. JV b/w Bharti , Vodafone & Aditya Birla Telecom Portfolio of more than 1,10,559 towers HQ: New Delhi, Chairman- Akhil Gupta

Bharat Sanchar Nigam Limited State Owned Enterprise, Govt. of India 69000 towers HQ: New Delhi, Chairman- RK Upadhyay

Reliance Infratel Limited Subsidiary of Reliance Communications Ltd. 45,000 towers HQ: Mumbai, Chairman- Anil Ambani

Viom Networks Limited JV between Tata Teleservices & Quippo Over 40000 towers HQ: Gurgaon, Chairman- Subodh Bhargava

Bharti Infratel Limited Independent tower company by Bharti Group Over 34000 towers HQ: Gurgaon, Chairman- Sunil Bharti

GTL Infrastructure Limited Independent tower company. Over 30,000 towers HQ: Mumbai, Chairman- Manoj Tirodkar

Industry Overview

Tower Industry in India

Industry Analysis

Major Players

Issues & Challenges

STRENGTHS High Customer Potential Second largest and fastest growing market High FDI inflow Huge Private sector small and medium business base Booming semiconductor design industry

WEAKNESSES Late adopters of new technology High entry barrier due to huge investment Lack of low cost long term financing Low R & D, low patents and technology standards still evolving Slow regulatory reforms Primarily voice market High imports and negligible export of hi-tech products

OPPORTUNITIES 3G and 4G services MVAS for healthcare, education, banking and entertainment Enormous equipment export potential Employment Providing fibre connectivity to villages Booming handset market Foreign investment in the form of equity or technology Rural market Penetration

THREATS Regulatory and legal policies Political instability due to scams Competition from foreign players International trade agreements Weak IPR agreements Indian tax levies and duties imposed

POLITICAL Better Regulatory Framework Spectrum from Government. Corruption & Scams Taxation laws Political Stability Special Incentives SOCIAL Modernization Increasing Urbanization Diversity in Population Life Expectations Birth Rates

ECONOMIC GDP trends less profit margins capital intensive high competition leading to price wars high interest rates unemployment levels TECHNOLOGICAL Govt. spending in R&D Rate of obsolescence Cost of technology Level of Productivity improvement.

ENVIRONMENTAL Level of Harm to Env. Level of priority towards development NGOs

REGULATORY Large no. of Players Pricing Mechanism Dispute settlement mechanism Level of restrictions Functioning methodology

Threat of New Entrants: Low Well Established Brands Limited Spectrum Availability Licensing Requirements

Bargaining Power of Buyers: High High Competition Price Sensitive

Degree of Rivalry: High High Exit Barriers

Bargaining Power of Suppliers: Medium Limited No. of Suppliers

High Fixed Cost

Price Wars

Low Switching Cost (MNP)

Threat of Substitutes: Low VOIP Online Chat E-mail

Industry Overview

Tower Industry in India

Industry Analysis

Major Players

Issues & Challenges

 Effective security system for Protection of Telecom Infrastructure Need for evolving uniform policy for addressing Right Of Way(ROW) issues Availability of affordable Customer Premises Equipment(CPE) Availability of adequate power for Telecom infrastructure Addressing various issues related to EMF radiation Need of encouragement for development of content/application as per the regional requirement for wider and faster penetration of broadband. Availability of adequate spectrum need for promoting R & D, Product Development and indigenous manufacturing

Thank you!!