Telecommunication

Industry After

Introduction

History

Introduction to Telecom Sector

Reliance Communication

Other Players of Telecom Industry

Analysis of Reliance Communication

Role of Government

CONTENTS

INTRODUCTION

Introduction• Indian telecommunications network is second largest

network in the world after China with over 375 Million subscribers

• India is also the fastest growing telecom market in the world and has emerged as a major base for the telecom industry

• The teledensity of the Country has increased from 18% in 2009 to 45% in December 2012.

• Thus Indian telecom sector has come a long way in achieving its dream of providing affordable and effective communication

• As a result common man today has access to this most needed facility.

TELECOM SUBSCRIBER BASE IN INDIA

• The mobile sector has grown from around 10 million subscribers in 2008 to reach 375 million by early 2012 registering an average growth of over 90%.

• Low tariffs coupled with falling handset prices have fuelled this growth

• Foreign telecom companies have entered Indian market which has still got huge potential (vodafone).

• Indian Telecom market is valued at around $100 billion (Rs.400,000 crore).

• India’s rural telephone density has been languishing at around 1.9%.

• Telecom Subscribers to cross 1.5 billion by 2015 and 5 billion by 2020.

History• Indian Telecommunications sector was

monopolized by BSNL

• In the year 1999, Government of India initiated a number of changes in the telecommunications and regulatory and policy department

• Hoped to facilitate an increase in telecommunication penetration, which stood at 1.29% in 1995

• With an eye on telecommunication penetration of 15% by 2013

TELECOMMUNICATION

• Technical: “telecom in the real sense means transfer of information between to distinct points in space”

• Managerial: “telecom is a huge & varied bastion of technologies ,companies ,services & politics that is truly global in nature”

Different Services of Telecom Sector:

Competitive tariffs

VAS applications on Device

Spectrum management

Broadband expansion in Rural

Content Regulation of Data

Reduce Circles to relax Roaming

Alternate Technologies (Solar/Wind

for power back-up)

Challenges of Telecomm. Industry

Telecom sector now• Total telephone subscriber base in the country reached

935.18 million

• Total Wireless subscriber base stood at 904.23 million

• Wire line subscription stood at 30.95 million

• Total Broadband subscriber base has reached to 14.81 million

• FDI in telecom sector during April-June 2012-13 stood at US$ 8 million, as per the Department of Industrial Policy & Promotion

• Huge investments of around US$ 112.6 billion in the next five years plan (2012-2017).

• BSNL and MTNL are expected to make investments of US$ 22.5 billion during the five years

• Private sector is expected to invest US$ 90 billion in expanding their infrastructure,

• The Government has recently announced 74 per cent of foreign direct investment (FDI) in DTH, and mobile TV.

Telecommunication Tariffs in India, one of the Lowest

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MARKETING MIX : 4P’S

• P-Products• P-Price• P-Place• P-Promotion

MARKETING MIX

PRODUCTSCell Phone

PRICELower end

segment to super premium end

PLACEExclusive

showroom, shopping

mall, chain store

PROMOTINPrint media,

mass media & electronic

media

4P’S• PRODUCT• Pre-paid• Post-paid• Wireless handheld value added services (VAS) PRICE• Customer based pricing strategies• Flexible pricing mechanism PLACE• Wide and extensive presence and it provide services

in India PROMOTION• Large scale print and video advertising• Big celebrities like Anushka Sharma, M.S Dhoni,

Abhishek etc…

RELIANCE COMMUNICATIONS

Type Public BSE: 532712

Industry Telecommunications

Founded 2004

Founder Dhirubhai Ambani

Headquarters Navi Mumbai, Maharashtra

Area served India

Key people Anil Ambani (Chairman )Satish Seth (MD)

Products

WirelessTelephoneInternetTelevisionData CardsRecharge Vouchers

Revenue Rs 22,948 crore (US$ 4.89 billion)

Operating income Rs 9,305 crore (US$ 1.98 billion)

Net income Rs 6,045 crore (US$ 1.29 billion)

Total assets Rs 102,207 crore (US$ 21.77 billion)

Total Equity Rs 1,032 crore (US$ 219.82 million)

Employees 31,884

Parent ADAG

1st Rank in CDMA Telecom Market of India with Total Subscriber Base (Both GSM & CDMA) of 102.44 Million & Market Share in CDMA Of 59.39 %. 6th Rank in Purely GSM Market with Total Subscriber Base of 16.31 Million & Market Share in GSM Market is of 3.87 %.

Reliance after 2002 when it sold its Reliance Handset in only 500 Rs. R-Com had launched a new tariff model for its pre-paid customers, which offers Unlimited talk time for a flat monthly fee.

• Reliance Communications is the flagship company of the Anil Dhirubhai Ambani Group of companies.

• Reliance Mobile (formerly Reliance India Mobile), launched on 28 December 2004, coinciding the joyous occasion of the late Dhirubhai Ambani’s 70th birthday.

• Reliance Communications Limited provides integrated converged telecommunications services to individual, enterprise, and carrier customers in India and internationally.

• It has a strategic alliance with GetJar Inc., an applications store, to offer catalog of approximately 65,000 free mobile applications.

BOTH GSM PLAYER &

CDMA PLAYERPAN in 23 Circles.

BE - Domain Study - Telecom 17

Reliance contribution in telecom sector

• 2006 -Nokia and Reliance Communications Ltd have joined hands to market the Nokia 1255 mobile handset in India at a price of Rs 1,999.

• 2007-Reliance Communications rolled out a range of mobile handsets priced at between Rs 777 and Rs 888, saving by half to one-third the existing entry level mobility costs in the country.

• Reliance Communications Ltd has launched Money Transfer through mobile phones across the country through it's tie-up with ICICI Bank.

• 2009- Reliance Communications announced its partnership with Microsoft for offering email support, chat, photo-sharing, content back-up and other applications.

•

• On Nov 27 introduced one paisa per SMS for both GSM and CDMA customers, triggering a war of tariffs on data services from voice calls.

• 2010- Announced an unlimited internet access plans called -Mobile Net Plan, of both post paid as well as pre paid can access unlimited mobile internet at Rs

99 per month.

• A structural shift over the last few years has propelled real GDP expansion to over 8 per cent in the last 4 years, with the last two years recording a growth rate in excess of 9 per cent.

Reliance

• Unlimited FREE incoming calls

• Free value added services like voice mail, call wait etc.

• Free text messaging

• Free Rworld data applications

• Rconnect – Internet through Mobile

Other Mobile Services

• Charged Incoming calls

• Charged value added services

• Text messages were charged

• No data applications

• No provision for connecting to the Internet

Comparison

Other Players of Indian Telecom Industry There are three types of players in telecom services:• State owned companies (BSNL and MTNL)• Private Indian owned companies (Reliance Communication, Tata Teleservices)• Foreign invested companies (Vodafone Essar, Bharti Airtel, Idea )

I WANT ONLY 1 SIM CARD

23%

19%17%13%

11%

10%

5% 1% 1%

Service Provider Market

Airtel

Reliance Communication

Vodafone

BSNL

Idea

Tata Indicom

Aircel

MTNL

Others(Loops,MTS etc)

• Bharti Airtel Limited, commonly known as Airtel, is an Indian telecommunications services company headquartered at New Delhi, India.

• Airtel is the world’s third largest mobile telecommunications company with over 261 million subscribers across 20 countries as of August 2012. 

• It is the largest cellular service provider in India, with 186.41 million subscribers as of October 2012. 

• Airtel is the third largest in-country mobile operator by subscriber base, behind China Mobile and China Unicom.

• Airtel is the largest provider of mobile telephony and second largest provider of fixed telephony in India,

BHARTI AIRTEL

04/07/2010

Type Public (BSE: 532454)

Industry Telecommunications

Founded 7 July 1995

Founder Sunil Bharti Mittal

Headquarters New Delhi, India

Area served Worldwide

Key peopleSunil Mittal(Chairman) & (MD)Sanjay Kapoor (CEO)

Products

WirelessTelephoneInternetSatellite television

Revenue ▲ US$ 7.254 billion (2009)

Operating income ▲ US$ 2.043 billion (2009)

Net income ▲ US$ 1.662 billion (2009)

Total assets ▲ US$ 11.853 billion (2009)

Employees 25,543 (2009)

ParentBharti Enterprises (64.76%)SingTel (30.5%)Vodafone (4.4%)

1st Rank in Telecom Market of India with Subscriber Base of 127.6 Million & Market Share Of 30.25 % ( TRAI , GSM Subscriber Base March 2010 Report )

Bharti is now the world's third-largest, single-country mobile operator and Fifth-largest integrated telecom operator.

GSM PLAYER- PAN 23 CIRCLES

Bharti ‘s Famous “Minute Factory Model” combinedwith a low cost structure.Bharti Airtel an integrated Telecom Service Provider.

“Work is Love , not Stress “ - Sunil Bharti Mittal

• IDEA Cellular is part of the Aditya Birla Group, India's first truly multinational corporation.

• A leading GSM mobile services operator with over 38 mn subscribers.

• A brand known for their many firsts, IDEA is the only operator to launch General Packet Radio Service (GPRS) and EDGE in the country.

• Idea Cellular Limited was incorporated in 1995, and now ranks third in terms of all-India wireless revenue market share at 13.6 per cent.

• Idea ranks second with 23.6 per cent revenue market share.

IDEA CELLULAR

TypePublic

BSE: 532822NSE: 532822

Industry Telecommunications

Founded 1995

Headquarters Santa Cruz East, Mumbai, India

Keypeople

Kumar Mangalam Birla (Chairman) Sanjeev Aga (MD) Rajat Mukharjee (VP Corporate

Affairs)

Products Mobile

ParentAditya Birla Group (49.05%)Axiata Group Berhad (15%)Providence Equity (10.6%)

GSM PLAYER PAN IN ALL 23 CIRCLES

3RD Rank in Telecom GSM Market of India with Subscriber Base of 63.82 Million & Market Share of 15.13 % in GSM Market. ( TRAI ,March 2010 Report )

• Vodafone was formed in 1983 as a joint venture between Racal Electronics (a UK electronics firm) and Millicom (a US telecom company).

• Vodafone Essar in India is a subsidiary of Vodafone Group and commenced operations in 1994 when its predecessor Hutchison Telecom acquired the cellular license.

• Vodafone Essar, under the Hutch brand, has been named the ‘Most Respected Telecom Company’, the ‘Best Mobile Service in the country’ and the ‘Most Creative and Most Effective Advertiser of the Year’.

•  Vodafone has partnered with the Essar Group as its principal joint venture partner for the Indian market.

Vodafone Essar

Type Limited

Industry Mobiletelecommunications

Predecessor Hutchison Essar

Founded 1994

Headquarters Mumbai, Maharashtra

Products Mobile networks,Telecom services, Etc.

Owner(s) Vodafone Group (67%)Essar Group (33%)

Employees 10,000

2nd Rank in Telecom GSM Market of India with Subscriber Base of 100 Million & Market Share of 23.91 %. ( TRAI ,March 2010 Report )

GSM PLAYER PAN in 23 Circles

Vodafone ZOOZOO Magic

ANALYSIS OF RELIANCE COMMUNICATION

SWOT ANALYSIS

S : Strengths• Highly focused on Indian Telecom Market. Leadership in fast growing cellular segment• Huge network coverage• Proactive & innovation service• Strong Financials• Reliance is another name of “trust “&”ethics”• highly successful in minds of common man

W: WEAKNESS• No separate strategy for rural market• Distribution channel is not accurately categorized• No free local calls & STD calls packs offered by it• Small players giving strong competition in different

segmentation like call rates, GPRS,SMS Packs, Broadband Internet other VAS

• Customer lists not tested• Some gaps in range for certain sectors• Customer services staff need training

O : OPPORTUNITIES• Could develop new products• Local competitors have poor products• Profit margins will be good• End-users respond to new ideas• Can surprise competitor

• Environmental effects would favor large competitors• Market demand very seasonal• New scheme draw away the attention of customer

from the original product• Poor advertisement doesn’t attract the customer in

the competitive market

T : THREAT

• Build the National Infrastructure• Make Metro cities Wi-Fi enabled• Establish a regulatory framework for carriage and

content of telecommunication• Establish a single regulatory and licensing authorityDevelop ultra economy plans for poor people; to whom subscriber caller tune is still a luxuryEducate customers about the benefits of value added service

Customer care services provided to the active customer’s should be more efficient towards the problem solution

Role of Government :

Presented by:• Ankur 892• Krishna 918• Siddharth 906• Madhusudan 876• Hatim 878• Sapna 908• Harshika 877