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Telecom Industry Analysis

Presented by- Akshaya Mali

The Telecom Industry - India


Telecom industry contributes 1% to the G.D.P of India Second Largest Telecom Market

Lowest tariff charges in the world Wireless Subscribers 315.3 Mn Wireline Subscribers 38.4 Mn Teledensity 30.6

22 Circles - 4 Categories ( Metro, A, B & C) Bharti Airtel Largest player with presence in 22 Circles 48 companies provide service in the industry TRAI, DoT and COAI are the major bodies .

Mobile subscriber base


3

Porters 5 Forces Analysis


4

Customer Bargaining Power

Threat of New Entrants

Threat from Competition

Threat of Substitutes

Supplier Bargaining Power

Threat of new entrants


5

LOW

Huge License Fees to be paid upfront & High gestation period

Entry of MVNOs & WiMAX operators


Spectrum Availability & Regulatory Issues Infrastructure Setup Cost - High

Rapidly changing technology


Lack of customer loyalty Economies of scale is high.

Switching cost is less.


Access to the distribution channel is comparatively easy.

Threat from Competition


6

HIGH

Wireless Market Top 4 garnering 75% market share

Numerous competitors. High exit barriers. High fixed cost. Customer loyalty is less and to switch from one operator to the other

is cheaper. Price wars between various operators. Although operator tries to differentiate services but it persist for only some duration because other competitors soon copies it.

Customer Bargaining Power


8

HIGH

Lack of differentiation among Service Providers


Cut throat Competition Low Switching Costs

Number Portability will have negative Impact


Buyer has full information.

Suppliers Bargaining Power


Price Sensitivity (Low) Cost of product relative to total cost (Low) Product differentiation (Low) Competition between suppliers(High) Bargaining Power (Low) Size and concentration of suppliers relative to products (Low) Buyers switching cost (Low) Buyers information (High) Suppliers ability to forward integrate (Low)

LOW

Threat of Substitutes
10

HIGH

Landline

DIMINISHING MARKET

CDMA
Video Conferencing VOIP - Skype, Gtalk, Yahoo Messenger e-Mail & Social Networking Websites

BROADBAND SERVICES

Conclusion

LOW

HIGH

THREAT OF SUBSTITUTE THREAT OF ENTRY SUPPLIER POWER

THREAT OF SUBSTITUTE S
BUYER POWER INDUSTRY RIVALRY