2010

Analysis of Indian Telecom

Industry

Group – 7

Aishwarya Iyer – 09BSHYD050

Esha Sood – 09BSHYD0270

Ishwarya.B – 09BSHYD0326
A la rge populati on, low telephony penetra tion levels, and a rise
in consumers ' income and spending owing to strong economi c Priti – 09BSHYD0591
growth ha ve helped make India the fas test-growing telecom
ma rket in the worl d. Preetish Kumar – 09BSHYD0585
India's mobile phone ma rket is the fas test growing in the world,
Patel Manish – 09BSHYD0553
wi th companies adding some 20.31 million new cus tomers in
September 2010.
Swetha.C – 09BSHYD0222
The project is aimed at analysing the business strategies
adopted using different tools and also aims at identifying the
6/30/2010
reasons for the growth of mobile services sector in India.
1. Executive Summary:
Indian Telecom Industry Fact Book:

Total mobile phone subscribers: 509.03 million (Aug 2009)

Teledensity: 43.5 % (Aug 2009)

Average Addition of new mobile subscribers per month: 12.43 Million (Year 2009)

Fastest growing cellular telephony markets in the world

Average Revenue per User (ARPU) for GSM: INR 304 per month (September 2009)

Average Revenue per User (ARPU) for CDMA: INR 194 per month (September 2009)

More Wireless subscribers than Wireline subscribers

Minute of Usage (MoU) for GSM: 546 Minute per month (September 2009)

Minute of Usage (MoU) for CDMA: 425 Minute per month (September 2009)
TELECOME SERVICES IN INDIA:

The telecommunication network in India is one of the largest in the world providing wide-
ranging services such as basic, cellular, internet, radio paging, VSAT etc.

Telecom Services in India

Internet
PMRTS
VSATs
Radio Paging
GMPCs
Mobile Services

India is the fifth country to cross the 100 million mobile subscriber mark to join Russia,
Japan, United States and China. Indian Telecom Sector is one of the fastest growing sectors
of the economy, growing at an average of more than 20 percent over the last four years.
The country has an investment potential estimated at US$ 37 billion in 2005 and US$ 69
billion by 2010.

India has 48 million fixed telephone connections, growing at 22 per cent per annum and
almost 100 million cellular phone connections, growing at 100 per cent per annum. The
telecom network in the country comprises over 35,000 exchanges with switching capacity of
over 47 million, 427 digital trunk automatic exchanges, and over 326,271 route km of optical
fibre network. In addition to the two state-owned companies BSNL and MTNL, several
private players have established a significant presence in both the basic and cellular
markets.

The Indian telecommunications sector has undergone a major process of transformation

because of significant Government policy reforms during the recent years. The New
Telecom Policy, 1999 focused on creating an ideal environment for investment, establishing
communication infrastructure by leveraging on technological development and providing
affordable telecom services to all. These objectives of the policies have resulted in rapid
growth of subscribers and lower tariffs. With these major initiatives of the Government, the
mobile market in India will have a promising future.
Telecommunications reform in recent years in almost all developed and developing nations
created an opportunity to attract foreign direct investment. The investments have been
taking place mainly in the emerging "new" economy sector. The main drivers of this sector
are information technology (knowledge-based) and telecommunications reform. Among the
developing nations, the Indian economy fared better in attracting foreign direct investment
in this sector due to the economic reform measures started in 1991.
2. OBJECTIVE OF THE PROJECT:

The Project is undertaken with a view to analyse the business strategies that have been
adopted by the players in the India Telecom industry. Since the Telecom sector covers a
number of sectors, we will refine our study to analysis the mobile services sector.

The mobile Sector is majorly dominated by 4 major players namely Airtel, Vodafone,
Reliance and BSNL. The project will mainly concentrate on these players and the startegies
that have been adopted by these players to achieve a competitive advantage ove r the other
players in the log run.

2.1 PROPOSED METHODOLOGY:

Some methodologies by which the mobile services sector would be analysed are
undersigned below:

a) A fundamental analysis of the whole of telecom industry will be performed.

Fundamental analysis of a company involves in-depth examination of all possible
factors, which have bearing on the prospects of the company as well as its share
price. Fundamental analysis will be divided into 3 stages in sequential manner as
follows:

1. Economic analysis
2. Industry analysis
3. Company analysis

b) The PESTAL framework would be applied to the mobile services area in the telecom
industry. We intend to perform the PESTAL framework on mobile services sector
separately so as to understand the differences between the market plausibility of
the telecom sector in general as compared to the intricacies present in the mobile
services sector.
c) The FIVE FORCES FRAMEWORK would be applied to understand the competitive
rivalry between the major players in the mobile services sector. With this framework
we would also be comparing the substitutability of internet services (which is one of
 the major substitutable threat for mobile services sector) with that of mobile
services.
d) An inter firm comparison of major players in the mobile sector would be performed
so as to understand the business strategies adopted by each of the firms.
Under this head, each player eg: Airtel (say) would be analysed in depth which would
include analysing the:
. Penetration Strategies adopted
. Marketing Mix Adopted (4 P’s analysis)
. Marketing communications tools used to attract customers
(Rebranding exercises / Repositioning exercises adopted)
. Core competencies on which the player differentiates itself
. Sustainability in the market in terms of maintaining its competitive
advantage.
e) SWOT Analysis of the Mobile services sector in general would be performed.

f) Analysis of future prospects of the mobile players in the telecom industry.

4. DATA COLLECTION:
Research refers to the systemic method consisting of enunciating the problem, a
hypothesis, collecting the facts, analysing the facts and reaching the certain conclusion
either in form of solution towards the concerned problem or for some theoretical
formulation.

The study will be based on the facts collected by observation and internet.

Method of Data collection

Sources of secondary data:-

Books
Websites
Business Magazines
Annual reports of company

5. LIMITATION OF THE STUDY:

Only 4 companies out of a very large Indian telecom industry would be studied in this
process.

Availability of data will be the main limitation of this study.

Fundamental analysis involves lots of tools, but only selected tools may be used for the
study.

The study frame considered is very limited.

The study is limited to the general fundamental analysis that required to analyse the
business strategies of each firm.

The data used is mostly secondary data.

Only mobile service provider companies are selected for the purpose of study out of the
huge telecom sector.
6. REFERENCES:

http://en.wikipedia.org/wiki/Communications_in_India
http://www.slideshare.net/workosaur/indian-telecom-industry-presentation-060109
www.telecomindiaonline.com/
http://jiad.org/article63

www.trai.gov.in