INDIAN SERVICE INDUSTRY

Sandip Mitra | Service Marketing| PCL I

THE INDIAN ECONOMY
PARAMETER INDIA CHINA USA
Population 1.15 billion 1.40 billion 0.30 billion
GDP $ 3.50 trillion $ 8.77 trillion $ 14.30 trillion
GDP Growth Rate 8.5 % 10 % 2.5 %
Per capita Income $ 2950 $ 6567 $ 37,500
External Trade $ 180 billion $ 1.20 trillion $ 1.01 trillion
Forex Reserves $ 283 billion $ 2454 billion $ 129 billion
Inflation 8.5 % 3.5 % 1.1 %
Agriculture 17 % 10.6 % 1.2 %
Industrial 28.2 % 46.8 % 21.9 %
Service 54.9 % 42.6 % 76. 9 %
  

THE INDUSTRY SECTORS

• Industrial growth back on track
• Increase in infrastructure
spending
• Substantial growth in
investment activity
• Recuperating external demand
• Stability & improvement in
financial markets
• Improvement in consumer
sentiment
• Waning uncertainty in
employment
• Increase in disposable income
and consumption activity
INDUSTRY SECTORS IN SERVICE
• Banking • Logistics
• Insurance • Public Administration
• Tourism • Consulting
• Retail • Legal Practice
• Education • Franchising
• Hospitality • Social Services
• Healthcare • Personal Services
• Media • Business Services
• BPO / KPO • IT
• ITES • Software
• Real Estate • E-business
SECTOR WISE COMPOSITION OF SERVICE

Service Sector Value

Banking $ 270 billion
Retail $ 242.0 billion
Travel & Tourism $ 120.0 billion
Healthcare $ 75.0 billion
Telecom $ 74.6 billion
IT-BPO $ 71.7 billion
Insurance $ 60.0 billion
Education $ 40.0 billion
IT-Services $ 26.9 billion
Media & Entertainment $ 13.1 billion
IT-Engg., R&D, Software products $ 7.3 billion
GROWTH RATE OF SERVICE SECTORS
2000-09 2005-08 2006-07 2007-08* 2008-09#
(Avg) (Avg)

3Services 9.0 11.1 11.3 10.8 9.4

.
       (62.0) (63.0) (64.5)
  3.1 Trade, Hotels, Transportation, 10.6 12.4 13.4 12.4 9.0
Storage and Communication

  3.2 Financing, Insurance, 8.7 12.3 13.8 11.7 7.8

Real Estate and Business Services

  3.3 Community, Social and Personal 6.4 6.5 5.7 6.8 13.1
Services

  3.4 Construction 10.2 12.7 11.8 10.1 7.2

4Real GDP at Factor Cost 7.2 9.4 9.7 9.0 6.7

STRUCTURE OF INDIA’S GDP (CURRENT PRICES)
(PERCENTAGE OF TOTAL)
Industry Sector 2005-06 2007-08
1 Agriculture, forestry & fishing 18.80 17.61

2 Mining & Quarrying 2.87 2.59

3 Manufacturing 15.86 16.55
4 Electricity, gas & water supply 1.97 1.79

5 Construction 8.07 7.86

6 Trade, hotels, transport & 24.9 25.3
communication
7 Financing, Insurance, real estate 13.8 14.28
& business services
8 Community, Social & personal 13.7 13.32
services
TRENDS IN SERVICE MARKETING
• Focus in Customer Service & customer satisfaction
• Focus on service value and customer lifetime value
• Focus on Information technology
• Focus on globalisation
• Focus on Innovation
• Focus on Quality standards
• Focus on customisation
INDIAN TELECOM INDUSTRY
Parameter Factors
Strengths Huge untapped market
High growth rate
FDI upto 100 % allowed
High ROI
Lower Capital Expenditure
Weakness Poor telecom infrastructure
Late adoption of new technology
Most competitive market
Government regulation
Opportunities VAS
Better quality service
Boost to telecom manufacturing cos.
Horizontal Integration
Threats Government Policies & bureaucracy
Declining ARPU
Content Piracy