The Indian Telecom Industry (Rationale

for choosing the industry)

 India is currently the world’s second-largest
telecommunications market with a subscriber base of 1.20
billion and has registered strong growth in the past decade
and half.
 The mobile industry is expected to create a total economic
value of Rs 14 trillion (US$ 217.37 billion) by the year 2020.
 It would generate around 3 million direct job opportunities
and 2 million indirect jobs during this period.
 India’s smartphone market grew 14 per cent year-on-year to
a total of 124 million shipments in 2017.
 Rise in mobile-phone penetration and decline in data costs
will add 500 million new internet users in India over the
next five years, creating opportunities for new businesses.
 The monthly data usage per smartphone in India is
expected to increase from 3.9 GB in 2017 to 18 GB by 2023.
Rural/Urban composition of Telephone
Subscribers
Market Share of Service Providers
 PESTLE Analysis 1/2

 PESTLE analysis of any industry sector investigates

the important factors that are affecting the industry
and influencing the companies operating in that
sector.
 PESTLE is an acronym for political, economic, social,
technological, legal and environmental analysis.
 Political factors include government policies relating
to the industry, tax policies, laws and regulations,
trade restrictions and tariffs etc.
 The economic factors relate to changes in the wider
economy such as economic growth, interest rates,
exchange rates and inflation rate, etc.
 PESTLE Analysis
 Social facts often look at the cultural aspects and include
health consciousness, population growth rate, age
distribution, changes in tastes and buying patterns, etc.
 The technological factors relate to the application of new
inventions and ideas such as R&D activity, automation,
technology incentives and the rate of technological
change.
 The industry's major service is the practice of law, which is
providing legal services to individuals, businesses,
government, and non profits which is Legal analysis.
 Environmental analysis of an industry studies whether the
industry is working environmental friendly and following
the ethics or not.
Political Analysis
Telecom Industry in 1980s
– 1st Phase of Reform
 Telecom reforms in India began in the 1980s with the
launch of a “Mission Better Communication” program.
Private manufacturing of customer premise equipment
was allowed in 1984 and the Center for Development of
Telematics (C-DOT) was established for the development
of indigenous technologies.
 Private franchises were freely given for public call offices
(PCOs) that offered local, domestic and international
calling services.
 Two large corporate entities were spun off from the
Department of Telecommunications, e.g. Mahanagar
Telephone Nigam Limited (MTNL) for Delhi and Mumbai
and Videsh Sanchar Nigam Limited (VSNL) for all
international services.
 Liberalisation Phase
 The second phase of reform commenced with the general
liberalization of the economy in the early 1990s and
announcement of a New Economic Policy (NEP)-1991.
 1991 telecom equipment manufacturing was de-licensed and
value-added services were declared open to private sector.
 1992 radio paging, cellular mobile and other value added
services were opened to private sector.
 1994 National Telecom Policy was announced and enhanced
growth of private sector.
 The most important landmark in telecom reforms came with
the New Telecom Policy 1999 (NTP-99).
 There were major developments on the policy front post year
2000. Establishment of Bharat Sanchar Nigam Ltd (BSNL)
(2000), privatisation of VSNL (2002).
 Increase in FDI limits from 49% to 74% (2005) and proposal
for mobile number portability (2006) which paved way for the
remarkable growth in the sector.
Reforms to Continue
 The government has fast-tracked reforms in the
telecom sector. Some of the other major initiatives
taken by the government are as follows:
 The Government of India is soon going to come
out with a new National Telecom Policy 2018 in
lieu of rapid technological advancement in the
sector over the past few years. The policy has
envisaged attracting investments worth US$ 100
billion in the sector by 2022.
 The Government of India is working to digitally
connect the rural and remote regions in the
country.
Economic Analysis
Economic Analysis
 India is currently the 2nd largestt users telecommunication
market and has the 3rd highest number of internetin the world.
 India’s telephone subscriber base expanded at a CAGR of 17.44
per cent, reaching 1,206.22 million during FY07–18.
 Tele-density (defined as the number of telephone connections for
every 100 individuals) in India, increased from 18.3 per cent in
FY07 to 92.84 per cent in FY18.
 Total telephone subscriber base and tele-density reached 1,147.71
million and 88.26 per cent, respectively, in April 2018.
 With daily increasing subscriber base, there have been a lot of
investments and developments in the sector. The industry has
attracted FDI worth US$ 30.08 billion during the period
April 2000 to December 2017, according to the data released
by Department of Industrial Policy and Promotion (DIPP).
 India will emerge as a leading player in the virtual world by
having 700 million internet users by 2025, as per a Microsoft
report. Internet economy expected to touch Rs 10 trillion (US$ 155
billion) by 2018, contributing around 5 per cent to the
country’s GDP.
 WIRELESS SUBSCRIPTION
(IN MILLION)

Mobile Subscribers base has constantly increased over the years

Drivers of Growth
 Increase in disposable incomes.

 Greater network coverage.

 Greater affordability.

 Falling mobile phone prices.

 Falling call charges.

Export Share
 As per the report of the Times of India Business
(2015), the government is targeting to increase exports
of telecom products and services to USD 10 billion
(about Rs 62,000 crore) in the next five years.
 India’s telecom exports currently stands around Rs
32,000 crore, of which Rs 20,000 crore is products and
equipment and balance Rs 12,000 crore is from
services.
 Government is making efforts to reduce imports of
electronic products and to meet requirement of
domestic market through indigenous production.
Social Analysis
Social Analysis
 Change in lifestyle
 Fast-changing lifestyles are forcing telecom companies
to enlarge the breadth and depth of their services.
 Various companies in the entertainment sector to add
more services. For instance, Netflix, Amazon Prime etc
provide online entertainment.
 Broad Band service providers provide fiber-optic service
which includes digital television, voice and high-speed
internet services.
Employment Opportunities
 Several Career paths lead to the Indian Telecom Industry.
The telecom sector offers a variety of career options where
there is room for everyone a degree holder or a diploma
holder, a candidate with a part-time certification course or
one with a full-time degree.
 The Certificate Courses for employment in the industry are:
 Certificate in Telecom Engineering.
 Certificate in Information Technology.
 Certificate in Computer Science.
 Certificate in Management Information Systems.
 Certificate in Computer Forensics.
Technology Analysis
Technology Analysis
 Technology Used in India
 Code division multiple Access (CDMA)
 Global system for mobile communication (GSM)
 3G / 4G Technology

 Technology Impact
 Rapid Industrial growth rate induced by emerging
technologies
 Strong Fiber Optic Network
 Utilization of E-commerce facilities
 Productivity Improvement
Legal Analysis
 Legal Framework 1/2
 “Telecommunications” falls under the legislative
competence of the Union and not the States.
 Consequently the Legal framework governing
Telecommunication Sector is within the control of the
Union Government and the Parliament.
 In India Legal framework, covering telecom sector include
various services like internet, radio paging, voice mail, V
sat communications, E Commerce, broadcasting services
etc.
 Indian Legal framework with respect to telecom
infrastructure is made up of five main acts
 The Indian Telegraph Act 1885.
 The Wireless Telegraphy Act 1933.
 The Telegraph Wires (Unlawful Possession) Act 1950.
 The Cable Television Network (Regulation) Act 1996.
 Legal Framework 2/2
 “Indian Telecom Industry is regulated by an
independent body called Telecom Regulatory
Authority of India (TRAI)
 According to the amended TRAI act in 2000, the
functions of the original TRAI have now been divided
between two separate bodies.
 The Telecom Regulatory Authority of India (TRAI).
 The Telecom Disputes Settlement and Appellate
Tribunal.
 The Recommendatory and Regulatory functions are
vested with the TRAI while dispute settlement
functions are handled by the Appellate Tribunal
Environment Analysis
Environmental Analysis 1/2

 The strong growth of the telecom industry, and increased

equipment obsolescence have caused a dramatic rise in the
amount of electronic waste worldwide.
 Today, environmental issues have become one of the most
important factors to be considered in the telecom industry.
 Operators are paying increasing attention to their
environmental performance, and are cooperating more
closely with telecom equipment manufacturers.
 China Mobile for example, have launched the "Green
Initiative" program, which aims to save energy and reduce
emissions for its outsourcing system and complementary
equipment.
Environmental Analysis 2/2

 International regulations on environmental

protection, especially those for telecom operations and
manufacturing, are widely recognized and followed.
 ISO 14004:2004 provides guidelines on the elements of
an environmental management system and its
implementation.
 The process includes choosing the proper products
and networking solutions to reduce negative impact
on the environment.
SWOT Analysis of Airtel

One of the top telecommunication companies in India, Airtel has spread across
far and wide in the last 2 decades of its existence.

The SWOT analysis of Airtel to understand the strengths, weaknesses,

opportunities and threats for the company are given in the coming slides.
 Strengths
 Renowned Telecom company: With its 19+ years of rich
experience in telecom industry this MNC had travelled far to
become world’s 3rd largest telecom operator overseas with
operations in nearly 20 countries.
 High Brand Equity: It is one of the pioneer brands in
telecommunication having a high brand recall and with a
whopping subscriber base.
 Extensive infrastructure: With the formation of Indus tower
& due to its partnership with Idea & Vodafone, the
infrastructure of Airtel has extended in all parts of the country
resulting into nationwide penetration.
 Strategic Alliances: The company has top notch stakeholders,
namely Sony Ericsson, Nokia and Singtel, and the recent one
being Apple. Such strategic alliances boost the brand equity
and the bottom line of the company.
 Torchbearer of the telecom Industry: With its number 1 spot
due to its excellent services in developing economies, Airtel has
interconnected the life of people in an highly efficient way.
 Weaknesses
 Outsourced Operations: Outsourcing operations
helped Airtel in lowering its cost. But on the other
hand, they are running the risk of being dependent on
some other companies which may affect its operations.
 Venturing into African operations: Although it’s
been 4 years that Airtel has acquired Zain’s Africa
business, but Airtel is still struggling to turn around
the unit which was bought at a whopping 9 billion
dollars.
 High Debt: With its acquisitions turning out to bad
investment, and credit being high and margins being
low, Airtel group is under high debt. Airtel does not
have as deep pockets as Vodafone / Reliance Jio.
Opportunities
 Strategic Partnership: Partnering with smart phone companies is going to
be a smart strategy as far as MNP (mobile number portability in India) is
concerned. This will ensure fixed cash flows in the future and a
higher customer base.
 Market Development: With fierce competition in the telecom industry &
shrinking margins, venturing out in new markets/developing economies will
prove fruitful for the company.
 VAS: VAS (Value Added services) is going to future of the telecommunication
industry & by specializing itself in this vertical Airtel can differentiate itself in
highly competitive market. With introduction of unique services, Airtel can
avail higher margins.
 Untapped geography of the current market: Although it is currently
providing 3G & 4G services, but these services are limited to specific
geographical locations. Expansion of these services to most of its regions will
help the company get more margins and customers.
 LTE: The whole wireless world is moving towards LTE (long term evolution or
4G). LTE for mobile broadband can be a good solution for India where fixed
broadband penetration is otherwise low. Airtel has taken the lead with this
version of LTE in 4 cities, but deployment needs to catch up pace. The
company lacks nationwide 3G license with spectrum in 13 out of 22 telecom
 Threats
 Government Regulatory Framework: With the auction of
spectrum & change in the government policies on a regular basis, it is
a potential threat to the stability & existence of this industry thereby
affecting the players.
 Competition: Price war in the home market and declining margins
due to this is adversely affecting the overall business of the group.
 MNP (Mobile number portability): MNP gives the customer
independence to change the service provider while retaining the
number and as Airtel charges are premium over other service
providers, it can see slump in subscriber base in coming years.
 Conclusion on Airtel:
 Airtel is fulfilling the needs of many people.
 The company should promote their product as attractively as possible.
 They should also maintain the market reputation they has and retain the
customers.
 The company has a tie up with many large organizations and which is because of
their service and reputation in the market.
 Hence, the organization should change its policies with the changing market and
maintain its position
 Though there is threat because of competition, they have enough opportunity to
sustain and grow from the current position.
 Topic Relevance
 Telecom Industry is one of the Fastest growing industry, has
seen medium-term intense changes because of innovation
achievements.
 The worldwide telecom industry will be gigantic in size and
scale by 2020, with around 6.6 billion one of a kind supporters,
7.8 billion cell phones and administrator incomes expanded to
$ 1.8 trillion from $ 1.3 trillion.
 New Technologies that will transform our future:-
 Telecoms will completely release the intensity of 5G
 Premium Content and Cross-Industry partnership in Telecom sector
 Artificial Intelligence and Machine Learning
 Connectivity in In-Flight(distinct advantage for carrier companies)
 Digitization to enhanced productivity
 India is also poised to grow at a very fast pace in this industry.
The telecom sector will bring in huge investment into the
country and provide lot of opportunity to people and
businesses.
 Telecom Industry will help the country grow in other areas by
providing better technology and faster connectivity.
Conclusion
 Telecom is taken as Booming sectors.
 The tide has turned for the telecom sector in India, as growth
and profitability has accelerated in recent times.
 Tower companies are reaping benefits of a turnaround in the
sector as operators have started investing in networks to boost
data penetration.
 However it is in the country's booming mobile segment in which
the major battles are being fought.
 Three major private players - Bharti, Reliance and Vodafone -
with more than 50 % share of the market between them , lead a
large field of mobile operators. State-owned enterprises -BSNL
and MTNL- have also been making their presence felt with a
combined market share of around 12 % .
 Consumers are getting addicted to connectivity and speed.
References
I have used various sources to extract information. However
the following sources are used in particular to collect the
data.
 https://www.ibef.org/industry/telecommunications.aspx
 https://en.wikipedia.org/wiki/Telecommunications_in_India
 https://www.telecomepc.in/about-us/telecom-sector-in-
india/
 https://www.bloombergquint.com/business/2017/09/19/jpmo
rgan-says-these-four-challenges-will-shape-the-indian-
telecom-recovery#gs.OC4KnqI
 https://www.marketing91.com/swot-analysis-of-airtel/