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AKHIL MAURYA SANKALP DHEER HARI SHANKAR NANDA NAMAN KULSHRESTHA
an increase of 2.22 million in April 2010.05 million in April 2010. 2010.India Telecom Industry The Indian telecommunications industry is one of the fastest growing in the world. the number of telephone subscriber base in the country reached 653. .92 million as on May 31.49 per cent from 638. The overall tele-density (telephones per 100 people) has touched 55. According to the Telecom Regulatory Authority of India (TRAI).53 million at the end of May 2010 from 601.71 per cent.38. The wireless subscriber base has increased to 617. registering a growth of 2.
Next thing would be consolidation in the industry which is already happening in the telecom tower business. Sistema has started its operations under the name of MTS by providing 1 million minutes free. Entry of 4-5 players : Licenses were granted to 6 new players. Unitech. It has also given 3G license for BSNL without giving it to other providers.. Sistema.RISK FACTORS Affecting Industry Regulation and compliance : The regulatory authority in India has delayed the 3G auction and sets up new guidelines every now and then. . Airtel and Vodafone which has launched iPhone 3G phone were left in the dark with 3G phones without any 3G service. All the players should think out of the box and come up with IDEAS. etc. New players and offers like these would seriously dent the expansion plans of established players.
expansion is still tough. Capital for expansion : This is the biggest criteria for smaller players. that is one option. With fierce competition comes the talent poaching. Attracting and managing talent and intellectual capital : This is a tough one. Indus Towers is one such example. Not every company can do the same but. . as the new players are backed up by some heavy-weights. Companies should have some talent retention measures in place. BSNL has recently announced about leasing its towers. Airtel has restructured its business into 9 verticals to retain talent. This is where sharing infrastructure comes into picture. While there are no smaller players. Initiatives like these will help both the older and newer players to penetrate into new markets.
Indian telecom companies should outsource aggressively and focus on expanding their network and services. Ask Laila-Airtel partnership for local search. Strategic partnerships like these should be nurtured and maintained. It is the value Added services which matter. There were bunch of partnerships which happened in the last 2 months. Management of strategic partnerships : Providing free SMS s or call rates at 40 paise per minute are no longer the differentiators. AmarChitraKatha . Inappropriate processes and systems to support exponential business growth experienced over past 4-5 years : This is where investing in IT and the right tools is crucial. BSNL has recently tied up with Hungama portal for music and game downloads. These are the operations that should be outsourcing so that the telecom companies can focus on their core areas. . IDEA and Bharat Matrimony have tied up for VAS.Vodafone.
Forecasting returns from technology and infrastructure investments Privacy and security risks Contain and reduce costs Manage consolidation and mergers & acquisition : This would tie back to point #2 of entry of new players and a possible consolidation in the telecom business and the tower business. .
Same case will be applicable to the telecom companies. This is a potential risk. this would be high on the radar for the companies.a Chinese company. Reliance sources most of its equipment from ZTE . Lack of protection for digital intellectual property : This could be next for Indian telecom. Satyam scam has just shown the world how dependent one can become on the outsourcing services. . For example. Corporate social responsibility and sustainability : With the Satyam scam jolting India Inc. Too soon but might take 2-3 years for this to become a risk Concentration of equipment manufacturers : Sourcing from a single supplier or a bunch of supplier could lead to great dependency.
Only if they can manage these risks. . it is the tier 2 and rural areas which will provide the next big leap. With the major cities already saturated and having a tele-density in excess of 80%. Indian telecom sector is all set for the second revolution. 32% is the overall tele-density of India. A wide gap and even bigger opportunity for the telecom providers.