telecom industry analysis_v1.3

7/31/2019 Telecom Industry Analysis_v1.3

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8/26/12

Telecom Industry Analysis

Submitted By

A-14: Nikhil SinghalA-15: Niraj AgrawalA-22: Prateek Sharma


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Industry Overview

15 Major Players

960 Million Subscriber

65% Urban

35% Rural

4% contribution to GDP

Teledensity

Urban: 169/100

Rural: 40/100

Current worth around $25 billion


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Division


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Growth and Revenue

FY 11-12: 15%

Subscribers base 1998-2012: +900% (Y-o-Y)


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Regulatory Framework

Telecom Regulatory Authority of India (TRAI)

Recommendatory

Regulatory

Tariff setting

Facilitator to Competition

Telecom Disputes Settlement and AppellateTribunal (TDSAT)

Companies

Department Of Telecom(telegraph,telephone,wireless and data

Policy


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a or ayers an ar eShare


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Porter 5 Forces


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Threat of substitutes

Some Substitutes:

VOIP (Skype, Messenger etc.)

Online Chat

Email

Satellite phones

None of the above a major threat in current scenario, but a

potential threat for near future.


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Power of supplier

Large number of suppliers.

Shared tower infrastructure.

Limited pool of skilled managers and engineers especially those

well versed in the latest technologies.

Medium cost of switching since changing their hardware would

lead to additional cost in modifying the architecture.

Overall influence on the industry - Medium


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Rivalry among competitors

High Exit Barriers

High Fixed Cost

6-7 players in each region

3 out of 4 BIG, present in each region

Price wars


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Bargaining power of customer

Lack of differentiation among the service provider

Cut throat competition

Customer is price sensitive

Low switching costs

Number portability to have negative impact

Overall influence on the industry - High


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Threat of New Entrants

Declining Average Revenue Per User.

Infrastructure tenancy costs.

Brand pull exists to some extent for brands likeAirtel / Idea/ Vodafone.

Extremely high infrastructure setup costs

Spectrum License cost- Lotteries, auctions.

Incumbent Advantages: Established brand image,Reliability of network

Overall threats to the industry - Low


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SWOT Analysis


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Strengths Fastest growing telecom market.

Formulation of policies in tune with the growthrequirement.

Adaptation of technological development i.e.

Mobile Number Portability(MNP), Next generationNetwork (NGN), 3G and Broadband WirelessAccess(BWA), IPv6 etc.

Establishment of Regulatory / Dispute resolution

bodies. Framework for responsive Customer Grievance

Mechanism.

Liberal FDI policy.

Healthy competition resulting in the most


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Opportunities

Teledensity growth in the country can be

accelerated.

For creation of telecom infrastructure in rural andremote areas.

Laying off Optical Fibre Cable to uncovered areasand effective utilization of the existing resources toprovide backhaul connectivity.

Country has a huge Broadband potential.

Development of local content/application.

Development of affordable equipment at thecustomer end.

Adoption of emerging technologies.


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Threats

Non availability of adequate spectrum for telecomservices

Cyber threats on ICT networks, leading to securityconcerns.

Obsolesce of existing network elements due to fastchanging telecom technologies.

Intense Competition & Shortage of Bandwidth

Telecom policies and scams

Declining ARPU

Partial government policies


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e ecom n us ry: us nessRisk


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PEST Analysis

ore gn n s o n


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ore gn un s ow nIndustry

0

2

4

6

8

10

12

FDI Investments (million US $)


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Financial Analysis - Ratios

0

2

4

6

8

10

12 Debt-Equity

0

2

4

6

8

10

12Long Term Debt-Equity Ratio

0

2

4

6

8

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Current Ratio


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0

2

4

6

8

10

12

Interest CoverRatio

0

2

4

6

8

10

12Fixed Asset Turnover Ratio

0

2

4

6

8

10

12

Debtor Turnover Ratio


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0

2

4

6

8

10

12

PBIDTM (%)

0

2

4

6

8

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APAT

0

2

4

6

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PBITM (%)

0

10

20

30

40

50

60

PBDTM (%)


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0

2

4

6

8

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12

CPM (%)

0

2

4

6

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ROCE(%)

0

2

4

6

8

10

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RONW(%)


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Lifecycle Analysis

Current Stageof Telecom

Industry


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Conclusion


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Thank You

telecom industry analysis_v1.3

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