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DEPARTMENT OF AGRICULTURAL MARKETING,
COOPERATION AND BUSINESS MANAGEMENT.
Seminar-II
Report on
“INDIAN TELECOM INDUSTRY
-...
2
Rashmi Ranjan Moharana, M. Sc. (Agri.), 2016
CERTIFICATE
This is to certify that the Seminar entitled “Indian Telecom
In...
3
Rashmi Ranjan Moharana, M. Sc. (Agri.), 2016
ACKNOWLEDGEMENT
I would like to express my gratitude to our course teacher ...
4
Rashmi Ranjan Moharana, M. Sc. (Agri.), 2016
INDEX
Sl. No. Particulars Page No.
1 Introduction 6
2 Global Telecom Scenar...
5
Rashmi Ranjan Moharana, M. Sc. (Agri.), 2016
List of Figures:
Fig.
No.
Titles Page No.
1 Highlights of Telecom Subscript...
6
Rashmi Ranjan Moharana, M. Sc. (Agri.), 2016
INTRODUCTION:
Telecom in the real sense means transfer of information betwe...
7
Rashmi Ranjan Moharana, M. Sc. (Agri.), 2016
in India, 2015). Broadband connections increased to 13.30 million. The top ...
8
Rashmi Ranjan Moharana, M. Sc. (Agri.), 2016
Source- TRAI press release, 1st September, 2015
Fig. 02 Overall teledensity...
9
Rashmi Ranjan Moharana, M. Sc. (Agri.), 2016
Fig. 04: Status of mobile taiffs in World shows Mobile Tariffs in India is ...
10
Rashmi Ranjan Moharana, M. Sc. (Agri.), 2016
Players share the fixed line and the mobile segments. Currently the Public...
11
Rashmi Ranjan Moharana, M. Sc. (Agri.), 2016
Establishment:
 1851- First operational landlines were laid by government...
12
Rashmi Ranjan Moharana, M. Sc. (Agri.), 2016
Major players of telecom industry & year of establishment:
1) Bharti airte...
13
Rashmi Ranjan Moharana, M. Sc. (Agri.), 2016
MARKET SIZE:
 Driven by strong adoption of data consumption on handheld d...
14
Rashmi Ranjan Moharana, M. Sc. (Agri.), 2016
Source- TRAI press release, 1st September, 2015
Fig 08: Market share of ma...
15
Rashmi Ranjan Moharana, M. Sc. (Agri.), 2016
REGULATORY FRAMEWORK:
The Department of telecommunications (Government of ...
16
Rashmi Ranjan Moharana, M. Sc. (Agri.), 2016
Functions of Telecom Organizations:
Dept. of Telecom: Policies & Licensing...
17
Rashmi Ranjan Moharana, M. Sc. (Agri.), 2016
TDSAT
 An integrated & comprehensive dispute settlement mechanism.
 Set ...
18
Rashmi Ranjan Moharana, M. Sc. (Agri.), 2016
OPPORTUNITIES:
 Rural teledensity can be increased.
 Broadband penetrati...
19
Rashmi Ranjan Moharana, M. Sc. (Agri.), 2016
 Threat of New Entrants is high because of the concept of network sharing...
20
Rashmi Ranjan Moharana, M. Sc. (Agri.), 2016
• Making it Happen - by striving to change the status quo, innovate and en...
21
Rashmi Ranjan Moharana, M. Sc. (Agri.), 2016
SUMMARY:
According to the UNCTAD, there is a direct correlation between th...
22
Rashmi Ranjan Moharana, M. Sc. (Agri.), 2016
to research firm IDC. India's mobile subscriber base is expected to cross ...
23
Rashmi Ranjan Moharana, M. Sc. (Agri.), 2016
CONCLUSION:
 India will emerge as a leading player in the virtual world b...
24
Rashmi Ranjan Moharana, M. Sc. (Agri.), 2016
DEPARTMENT OF AGRICULTURAL MARKETING, CO-OPERATION AND
BUSINESS MANAGEMENT...
25
Rashmi Ranjan Moharana, M. Sc. (Agri.), 2016
pragmatically used modern telecommunication facilities to deliver mass edu...
26
Rashmi Ranjan Moharana, M. Sc. (Agri.), 2016
References:
http://www.ibef.org/industry/telecommunications.aspx
http://ww...
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Telecom Industry in India- A Brief Review

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Seminar presentation on Indian telecom Industry. Covers all the latest data in FY16 and all important issues and theories in brief. Further details in depth have to get derived from several sources.
2016
Rashmi Ranjan Moharana
M. Sc. (Agri.)
University of Agricultural Sciences, Bengaluru.

Published in: Government & Nonprofit
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Telecom Industry in India- A Brief Review

  1. 1. DEPARTMENT OF AGRICULTURAL MARKETING, COOPERATION AND BUSINESS MANAGEMENT. Seminar-II Report on “INDIAN TELECOM INDUSTRY - A Brief Review” Course Title- Seminar Course No. : AMC-581 (1+0) Submitted To: Dr. M.S. GANAPATHY, Professor and Seminar Teacher, Dept .of AMC & BM, UAS, GKVK, Bengaluru-65 Submitted By: RASHMI RANJAN MOHARANA, PALB-4128, Sr. M.Sc. (Ag.) in Ag.Maco., Dept. of AMC & BM, UAS, GKVK, Bengaluru-65. UNIVERSITY OF AGRICULTURAL SCIENCES, GKVK, BENGALURU- 560 065. (2014-16)
  2. 2. 2 Rashmi Ranjan Moharana, M. Sc. (Agri.), 2016 CERTIFICATE This is to certify that the Seminar entitled “Indian Telecom Industry- A Brief Review” submitted by Mr. Rashmi Ranjan Moharana, I.D. No. - PALB-4128 in partial fulfillment of the requirement for the degree of M.Sc. (Agri.) in Agricultural Marketing & Cooperation to the University of Agricultural Sciences, GKVK, Bengaluru-65, is a report of seminar done by him during the period of his study in the department under my guidance and supervision. Dr. M.S. Ganapathy, Seminar Teacher & Professor, Dept. of Ag. Maco & BM, UAS, GKVK, Bengaluru-65.
  3. 3. 3 Rashmi Ranjan Moharana, M. Sc. (Agri.), 2016 ACKNOWLEDGEMENT I would like to express my gratitude to our course teacher Dr. M.S. Ganapathy, Professor and Seminar Teacher whose contribution in stimulating suggestions and encouragement helped me to coordinate my seminar report and writing this report. FurtherI would like to thank all supporters especially my major advisor Mr. T.N. Venkata Reddy, Assistant professor who gave valuable suggestions and advised in completing this report. I also extend my heartfelt thanks to my beloved family and well- wishers for their support. FinallyI thankall the people and friends who directly or indirectly supported me in bringing out this seminar report. Place: GKVK, Bengaluru. Rashmi Ranjan Moharana Date: 28-06-2016
  4. 4. 4 Rashmi Ranjan Moharana, M. Sc. (Agri.), 2016 INDEX Sl. No. Particulars Page No. 1 Introduction 6 2 Global Telecom Scenario 8 3 Overview of Indian telecom industry 9 4 History of telecom industry in india 10 5 Market structure 11 6 Major players of telecom industry & year of establishment 11 7 Market size 12 8 Regulatory framework 15 9 Functions of Telecom Organizations 16 10 Role of TRAI & TDSAT in Indian Telecom Growth 16 11 India Telecom Investment Opportunities 17 12 Developments in telecom industry 17 13 Opportunities 17 14 Challenges 18 15 Case Study (Airtel) 18 16 Summary 21 17 Government initiatives 22 18 Conclusion 23 19 References 23
  5. 5. 5 Rashmi Ranjan Moharana, M. Sc. (Agri.), 2016 List of Figures: Fig. No. Titles Page No. 1 Highlights of Telecom Subscription 7 2 Overall teledensity 8 3 Global Telecom market 8 4 Status of mobile taiffs in World shows Mobile Tariffs in India is one of the Lowest 9 5 Growth in total subscribers 10 6 Composition of telecom subscribers 10 7 Market share of major operators in India as on February 2014 13 8 Market share of major operators in India 14 9 Total Telephone subscribers 14
  6. 6. 6 Rashmi Ranjan Moharana, M. Sc. (Agri.), 2016 INTRODUCTION: Telecom in the real sense means transfer of information between two distant points in space. Telecom is a huge and varied fastness of technologies, companies, services and politics that is truly global in nature. Telecom stands as one of the most essential elements of the business world in terms of “Connecting the World”. India's telecommunication network is the second largest in the world based on the total number of telephone users (both fixed and mobile phone). It has one of the lowest call tariffs in the world enabled by the mega telephone networks and hyper-competition among them. It has the world's third largest Internet user base. According to the Department of Telecommunication of India (DoT), as on March 2015, India has 302.35 million internet connections. Major sectors of the Indian telecommunication industry are telephony, internet and television broadcast Industry in the country which is in an ongoing process of transforming into next generation network, employees an extensive system of modern network elements such as digital telephone exchanges, mobile switching centers, media gateways and signaling gateways at the core, interconnected by a wide variety of transmission systems using fibre optics or Microwave radio relay networks. The access network, which connects the subscriber to the core, is highly diversified with different copper pair, optic fibre and wireless technologies. DTH, a relatively new broadcasting technology has attained significant popularity in the Television segment. The introduction of private FM has given a fillip to the radio broadcasting in India. Telecommunication in India has greatly been supported by the INSAT system of the country, one of the largest domestic satellite systems in the world. India possesses a diversified communications system, which links all parts of the country by telephone, Internet, radio, television and satellite. Indian telecom industry underwent a high pace of market liberalization and growth since the 1990s and now has become the world's most competitive and one of the fastest growing telecom markets. The Industry has grown over twenty times in just ten years, from under 37 million subscribers in the year 2001 to over 846 million subscribers in the year 2011. India has the world's second largest mobile phone user base with over 929.37 million users as of May 2012. It has the world's second largest Internet user base with over 300 million as of June 2015. The total revenue of the Indian telecom sector grew by 7% to 2,832 billion rupees (US$42 billion) for 2010–11 financial year, while revenues from telecom equipment segment stood at rupees 1,170 billion (US$17 billion). of India and has played a significant role to narrow down the rural urban digital divide to some extent. It also has helped to increase the transparency of governance with the introduction of e-governance in India. The government has pragmatically used modern telecommunication facilities to deliver mass education programmes for the rural folk of India. Indian Telecom market is one of the fastest growing markets in the world. With its 302.35 million Telephone connections, it is the second largest network in the world after China. It is also the second largest wireless network in the world. Wireless telephones are increasing at a faster rate. "Private operators hold 91.58 per cent of the wireless subscriber market share whereas BSNL and MTNL, the two PSU operators held only 8.42 per cent market share," TRAI said. The share of private sector in total telephones is 86.09%. Telephony was introduced in India in 1882. The total number of telephones in the country stands at 1035.18 million, while the overall teledensity has increased to 81.82 per cent as of 30 November 2015. and the total numbers of mobile phone subscribers have reached 1009.46 million as of May 2015. The mobile teledensity had increased to 79.78 per cent in November 2015. In the wireless segment, 6 million subscribers were added in November 2015. The wire line segment subscriber base stood at 25.72 million. (Source- Telecommunications statistics
  7. 7. 7 Rashmi Ranjan Moharana, M. Sc. (Agri.), 2016 in India, 2015). Broadband connections increased to 13.30 million. The top five ISPs in terms subscriber base were BSNL (9.96 million), Bharti Airtel (1.40 million), MTNL (1.09 million), Hathway (0.36 million) and You Broadband (0.31 million).Thus Indian telecom sector has come a long way in achieving its dream of providing affordable and effective communication facilities to Indian citizens. As a result common man today has access to this most needed facility. Source- TRAI press release, 1st September, 2015 Fig. 01 Highlights of Telecom Subscription
  8. 8. 8 Rashmi Ranjan Moharana, M. Sc. (Agri.), 2016 Source- TRAI press release, 1st September, 2015 Fig. 02 Overall teledensity Global Telecom Scenario Global telecom firms are growing from strength to strength in 2015. Positive market trends in mobile broadband, cloud computing, and big data management have ensured the steady growth of firms even while telecom operators have struggled to generate revenue. Most countries already have, or are now in the process of developing, national broadband network policies for fixed broadband. Source- IDC Website Fig. 03 Global Telecom market
  9. 9. 9 Rashmi Ranjan Moharana, M. Sc. (Agri.), 2016 Fig. 04: Status of mobile taiffs in World shows Mobile Tariffs in India is one of the Lowest OVERVIEW OF INDIAN TELECOM INDUSTRY: Indian Telecom sector, like any other industrial sector in the country, has gone through many phases of growth and diversification. Starting from telegraphic and telephonic systems in the 19th century, the field of telephonic communication has now expanded to make use of advanced technologies like GSM, CDMA, and WLL to the great 3G & 4G Technologies in mobile phones. Day by day, both the Public Players and the Private Players are putting in their resources and efforts to improve the telecommunication technology so as to give the maximum to their customers. India is currently the world’s second-largest telecommunications market and has registered strong growth in the past decade and half. The Indian mobile economy is growing rapidly and will contribute substantially to India’s gross domestic product (GDP), according to report prepared by GSM Association (GSMA) in collaboration with the Boston Consulting Group (BCG). The liberal and reformist policies of the Government of India have been instrumental along with strong consumer demand in the rapid growth in the Indian telecom sector. The government has enabled easy market access to telecom equipment and a fair and proactive regulatory framework that has ensured availability of telecom services to consumer at affordable prices. The deregulation of foreign direct investment (FDI) norms has made the sector one of the fastest growing and a top five employment opportunity generator in the country. The Indian telecom sector can be broadly classified into Fixed Line Telephony and mobile telephony. The major players of the telecom sector are experiencing a fierce competition in both the segments. The major players like BSNL, MTNL, VSNL in the fixed line and Airtel, Idea, Tata, Reliance in the mobile segment are coming up with new tariffs and discount schemes to gain the competitive advantage. The Public Players and the Private 0.23 0.22 0.19 0.17 0.16 0.11 0.11 0.11 0.09 0.05 0.05 0.04 0.03 0.02 0 0.05 0.1 0.15 0.2 0.25 Belgium Italy UK France Brazil Philippines Taiwan Argentina Malayasia HongKong Thailand Pakistan China India
  10. 10. 10 Rashmi Ranjan Moharana, M. Sc. (Agri.), 2016 Players share the fixed line and the mobile segments. Currently the Public Players have more than 70 per cent of the market. Fig. 05 Growth in total subscribers Fig. 06 Composition of telecom subscribers HISTORY OF TELECOM INDUSTRY IN INDIA: Well Postal means of communication was the only mean communication until the year 1850. In 1850 experimental electric telegraph started for first time in India between Calcutta (Kolkata) and Diamond Harbor (southern suburbs of Kolkata, on the banks of the Hooghly River). In 1851, it was opened for the use of the British East India Company. Subsequently construction of telegraph started through out India. A separate department was opened to the public in 1854. Dr.William O’Shaughnessy, who pioneered the telegraph and telephone in India.
  11. 11. 11 Rashmi Ranjan Moharana, M. Sc. (Agri.), 2016 Establishment:  1851- First operational landlines were laid by government near Calcutta  1881- Telephone services introduced into India.  1883- Merger with postal system.  1923- Indian radio telegraph company formed.  1932- Merger of ETC and IRT Indian radio and cable communication company  1851- First operational landlines were laid by government near Calcutta  1881- Telephone services introduced into India.  1883- Merger with postal system.  1923- Indian radio telegraph company formed.  1932- Merger of ETC and IRT Indian radio and cable communication company  1995- Entry of GSM in india triggering telecom revolution. BPL mobile services launched.  1997- Telecom regulatory authority of india formed in January.  1999- NTP-99. national telecom policy with reformed goals set.  2000- 1st October BSNL created.  2005- ILD & NLD annual license fees reduced from 15% to 6%.  2008- 3G guidelines issued, spectrum allocation through auction, foreign players allowed to bid.  2009- TRAI announces rules & regulations to be followed for mobile number portability.  2010- BSNL 1st one to launch WIMAX service. MARKET STRUCTURE:  Divided into 22 circles  4 metros  19 circles  Further divided into A, B and C category based on economic parameters and revenue potential  Each circle has a licenses  Four operators per circle are allowed  Licenses are saleable
  12. 12. 12 Rashmi Ranjan Moharana, M. Sc. (Agri.), 2016 Major players of telecom industry & year of establishment: 1) Bharti airtel-1985 2) BSNL-2000 3) Vodafone Essar-2007 4) Reliance communications-1999 5) Idea cellular-1995 6) Tata communications-1986 7) Tata teleservices-1996 8) Aircel-1999 9) MTNL-1986 10) TTML-1998 Bharti Airtel is holding the lead position in India. The company is dealing with four major categories namely digital television, enterprise, telemedia and mobile. BSNL or Bharat Sanchar Nigam Limited is the oldest player in the telecom sector in India and they hold the pride of being the first to connect even remote villages through their telephone service. Vodafone Essar began its operations in the year 1994 and the company has operations all over India with more than 106.34 million customers. Reliance is one of the largest private sector companies in the information and telecommunication sector in India. Idea Cellular is a part of Aditya Birla Group and they are the leading GSM Mobile service provider in India. They are offering both pre-paid and post paid mobile service. Tata Communications influence its domain expertise and advanced solutions across India and global network, hold the pride of being the first to introduce CDMA mobile services in India. The company introduced its mobile operations in the year 2005 under the brand name of Tata indicom. Aircel have earned the status of the leading mobile operator in the state of Tamil Nadu in India. The company has emerged as leader in the North Easter states of India within a short period of its launching. Mahanagar Telephone Nigam Limited or MTNL has grabbed a customer base of 8.06 million in Mumbai and Delhi. They have become the leaders in technology induction by converting its telephone exchange network into digital mode. TTML is another telecommunication company under the Tate group. The company has more than 6 lakh subscribers in the telecom circles of Mumbai, Goa and Maharashtra.
  13. 13. 13 Rashmi Ranjan Moharana, M. Sc. (Agri.), 2016 MARKET SIZE:  Driven by strong adoption of data consumption on handheld devices, the total mobile services market revenue in India is expected to touch US$ 37 billion in 2017, registering a Compound Annual Growth Rate (CAGR) of 5.2 per cent between 2014 and 2017, according to research firm IDC.  India's mobile subscriber base is expected to cross 500 million! subscribers by the end of FY2015 from 453 million subscribers at the end of FY2014.  According to a study by GSMA, smartphones are expected to account for two out of every three mobile connections globally by 2020 making India the fourth largest smartphone market.  The broadband services user-base in India is expected to grow to 250 million connections by 2017, according to GSMA.  India added the highest number of net mobile phone subscriptions of 13 million during the third quarter of 2015.  International Data Corporation (IDC) predicts India to overtake US as the second- largest smartphone market globally by 2017 and to maintain high growth rate over the next few years as people switch to smartphones and gradually upgrade to 4G.  In spite of only 5 per cent increase in mobile connections in 2015, overall expenditure on mobile services in India is expected to increase to US$ 21.4 billion in 2015, led by 15 per cent growth in data services expenditure, as per research firm Gartner.  The Indian telecom sector is expected to generate four million direct and indirect jobs over the next five years according to estimates by Randstad India. Source- https://en.wikipedia.org/wiki/Telecommunications_in_India Fig. 07 Market share of major operators in India as on February 2014
  14. 14. 14 Rashmi Ranjan Moharana, M. Sc. (Agri.), 2016 Source- TRAI press release, 1st September, 2015 Fig 08: Market share of major operators in India Source- https://en.wikipedia.org/wiki/Telecommunications_in_India Fig. 09 Total Telephone subscribers 234.11 185.47 160.08 94.68 65.95 50.72 4.78 5.12 3.08 Airtel Vodafon e IDEA BSNL Aircel Uninor Videocon MTNL Loop Number of Subscribers as of August 2015 (in Millions)
  15. 15. 15 Rashmi Ranjan Moharana, M. Sc. (Agri.), 2016 REGULATORY FRAMEWORK: The Department of telecommunications (Government of India) is the main governing body for the industry. Telephone Regulatory Authority of India (TRAI) assists the Government of India (GoI) to take timely decisions and introduce new technologies in the country.
  16. 16. 16 Rashmi Ranjan Moharana, M. Sc. (Agri.), 2016 Functions of Telecom Organizations: Dept. of Telecom: Policies & Licensing Telecom Engineering Centre (TEC): Standardisation,Technology Management & Interaction with players etc. Centre for Development of Telematics (C-DOT): R& D Telecom Dispute Settlement & Appellate Tribunal : Dispute Settlement. Telecom Consultants of India Ltd : Telecom Regulatory Authority of India(TRAI) : Project Execution & Consultancy. Regulation to facilitate competition & technology development. Concerns:  Advent of 4G  Licensing and sale of spectrum  Below cost pricing and industry profitability  Managing competition  Security  Managing M&A Role of TRAI & TDSAT in Indian Telecom Growth: TRAI  Setup in 1997  Protection of Consumer Interest  Nurture Conditions for Growth of Telecom in India  Major Activities  Reduced levies on Operators.  Reduced upper limit in tariff (Local, STD & ISD) and other Inter-operators tariffs.  Directives on number of network access service providers.  Policy guidelines on new services like 3G, WIMAX, Internet Telephony, Radio Paging, VSAT, etc.  Regular monitoring of Quality of Service parameters
  17. 17. 17 Rashmi Ranjan Moharana, M. Sc. (Agri.), 2016 TDSAT  An integrated & comprehensive dispute settlement mechanism.  Set up on 29th May 2000 & started hearing w.e.f. Jan 2001  83% cases disposed off from 2001 till 2007 TRAI & TDSAT provided healthy atmosphere for healthy growth of Telecom sector (Teledensity from 1.57 in 1997 to 24 in December 2007) India Telecom Investment Opportunities:  Second largest telecom penetration, world’s highest monthly additions. 943 Mn. Subscribers  Indian Telecom sector to witness huge investments to the tune of $ 110 Bn. during 2012-2017  Telecom Subscribers to cross 1.5 Bn. by 2015, 5 Bn. by 2020.  About 25 per cent ( Appx. 300 million) would be 3G/4G subscribers, which would require scaling up the infrastructure.  About $70 Bn. estimated investment for 2G, 3G/4G and WIMax networks, while $ 25 Bn. would be required to set up an extra 200,000-odd telecom towers across the Country.  The total investment in the pan-India Broadband rollout is expected to be $ 20 Bn., while another $ 20 Bn. will be invested in augmenting the transmission network.  MERGERS: Demand for new spectrum as the industry grows and the fact the spectrum allocation is done on the basis of number of subscribers will force companies to merge so as to claim large number of subscribers to gain more spectrum as a precursor to the launch of larger and expanded services. However it must also be noted that this may very well never happen on account of low telecom penetration. Developments in telecom industry: 1. 3G & 4G Technology In India  These are convergence of various Second Generation telecommunication systems.  The technology is intended for SMARTPHONES - multimedia cell phones.  Video broadcasting and other e-commerce services such as, stock transactions and e- learning will now be made possible much faster.  It offers 3 Mbps speed for downloading, which is very high as compared to that of the 2G technology.  These technologies provide for internet surfing, downloading, e-mail attachment downloading, audio-video conferencing, fax services and many other broadband applications. 2. Reliance launched BIG TV. 3. Airtel launched Digital TV. 4. All players are going to launch net usage by USB (plug & surf from anywhere).
  18. 18. 18 Rashmi Ranjan Moharana, M. Sc. (Agri.), 2016 OPPORTUNITIES:  Rural teledensity can be increased.  Broadband penetration is just 0.25%, hence vast scope.  BPO business is growing fast: Telecom can ride on it.  Value added services like M-Commerce, M-Marketing, Special Information, Ring tones, etc. offer venues of additional revenue.  As globalization is increasing, more percentage of global business for Indian telecom.  Technologies like NGN, 3G, WiMAX, will open up new frontier of business. CHALLENGES:  No. of operators are increasing per circle: hence more competition  ARPUs are going down  Cost/ Customer is very high in rural areas  Spectrum – a scare commodity  Infrastructure readiness in rural  International Bandwidth is costly Case Study (Airtel): Company Background: Established in 1995 by Sunil Bharti Mittal, currently the Chairman and MD of Airtel. Telecom giant Bharti Airtel is the flagship company of Bharti Enterprise. Bharti Airtel Limited, (commonly known as Airtel), is India’s largest integrated and the first private telecom services provider with services in all the telecom circles. Bharti Airtel is structured into three strategic business units - Mobile services, Telemedia services, Enterprise services and Digital TV services. The mobile business provides mobile & fixed wireless services using GSM technology. Target Market: Airtel has two major customer segments (demographically) in the mobile telephony services:  Students and young professionals who use the prepaid services (use convenient recharge/load)  Premium and upper middle class customers, who value time and have the paying capacity. They are mostly post-paid users (billed on a monthly basis) Airtel has mobile services in all the telecom circles in India (geographically). The concentration is mostly in urban and sub-urban areas where mobile users are more).
  19. 19. 19 Rashmi Ranjan Moharana, M. Sc. (Agri.), 2016  Threat of New Entrants is high because of the concept of network sharing (as seen in the case of Tata Indicom and Virgin Mobile).  A number of foreign investors in this sector also causes threat to be high.  Threat of Substitutes is high due to the availability of landline, CDMA, and various voice and video facilities being offered on the internet (VoIP).  Bargaining power of buyers is high due to lack of differentiated of the product, cut throat competition and the availability of number porting facilities.  Bargaining power of suppliers is also high as the number of telecom network equipment suppliers are not many, and there is a dependency upon them in terms of the type and configuration of equipments being procured.  Industry rivalry is also high as a number of players are trying to acquire more and more of the market share (in terms of subscribers) in view of the falling ARPU. Airtel is good in quality but has relatively higher prices (hence lower score). Airtel has substantial network coverage, but at a higher price. Airtel is considered the best brand with high no of products/services/plans offered. Airtel and Vodafone provide the best customer services, with large no of outlets. VISION By 2020 Airtel will be the most loved brand, enriching the lives of millions MISSION “We at Airtel always think in fresh and innovative ways about the needs of our customers and how we want them to feel. We deliver what we promise and go out of our way to delight the customer with a little bit more” VALUES • Empowering People - to do their best • Being Flexible - to adapt to the changing environment and evolving customer needs
  20. 20. 20 Rashmi Ranjan Moharana, M. Sc. (Agri.), 2016 • Making it Happen - by striving to change the status quo, innovate and energize new ideas with a strong passion and entrepreneurial spirit • Openness and transparency - with an innate desire to do good • Creating Positive Impact – with a desire to create a meaningful difference in society Long Term Objectives: STRATEGIC: Continue market leadership and increase the market share 1. Technical Enhancement: Equip technically to stand against competitors (extension of 3G to all 22 circles in India & introduction of 4G in the top 10 cities) 2. Bottom of the pyramid: Provide connectivity to in the low income group in rural area targeting a teledensity of more than 50% is currently 33.8% only 3. Increase Usage: By value added services like m-commerce (mobile wallet), Airtel can increase its ARPU by 20% from the current level of Rs 194 per month. FINANCIAL: Grow at higher than industry rate and create value for shareholders 1. Increase Market Share: Continue to grow at a higher rate to maintain market leadership 2. Dividends for Shareholders: Pay progressive dividends to the share holders. 3. Cash Reserves: Maintain cash reserves to invest in R&D and network development.
  21. 21. 21 Rashmi Ranjan Moharana, M. Sc. (Agri.), 2016 SUMMARY: According to the UNCTAD, there is a direct correlation between the growth in mobile teledensity and the growth in GDP per capita in developing countries, which tend to have a high percentage of rural population. The share of the telecom services industry in the total GDP has been rising over the past few years. The Indian telecommunication industry employs over 400,000 direct employees and about 85% of these employees are from government owned companies. The ratio of number of subscribers to employees, an indication of efficiency and profitability, is much higher for private companies than for government companies. Foreign direct investment has been one of the major contributors in the growth of the Indian economy, and therefore, the need for higher FDI is felt across sectors in the Indian economy. The telecom sector has played a crucial role in attracting FDI in India. The share of telecom sector in the total FDI inflows in India has gone up to 18% in FY15 as compared with just 3% in FY05. The telecom sector requires huge investments for its expansion as it is capital intensive and FDI plays a vital role in meeting the fund requirements for expansion of the telecom sector. Telecom accounts for almost 10% of the total FDI inflows in the country and has been the third largest sector to attract FDI in India in the post liberalization era. Driven by strong adoption of data consumption on handheld devices, the total mobile services market revenue in India is expected to touch US$ 37 billion in 2017, registering a Compound Annual Growth Rate (CAGR) of 5.2 per cent between 2014 and 2017, according
  22. 22. 22 Rashmi Ranjan Moharana, M. Sc. (Agri.), 2016 to research firm IDC. India's mobile subscriber base is expected to cross 500 million subscribers by the end of FY2015 from 453 million subscribers at the end of FY2014. According to a study by GSMA, smart phones are expected to account for two out of every three mobile connections globally by 2020 making India the fourth largest smart phone market. The broadband services user-base in India is expected to grow to 250 million connections by 2017, according to GSMA. India added the highest number of net mobile phone subscriptions of 13 million during the third quarter of 2015. International Data Corporation (IDC) predicts India to overtake US as the second-largest smart phone market globally by 2017 and to maintain high growth rate over the next few years as people switch to smart phones and gradually upgrade to 4G. In spite of only 5 per cent increase in mobile connections in 2015, overall expenditure on mobile services in India is expected to increase to US$ 21.4 billion in 2015, led by 15 per cent growth in data services expenditure, as per research firm Gartner. GOVERNMENT INITIATIVES: The government has fast-tracked reforms in the telecom sector and continues to be proactive in providing room for growth for telecom companies. Some of the other major initiatives taken by the government are as follows:  The Telecom Regulatory Authority of India (TRAI) has directed the telecom companies or mobile operators to compensate the consumers in the event of dropped calls with a view to reduce the increasing number of dropped calls.  With a view to encourage consolidation in the telecom sector, the Government of India has approved the rules for spectrum trading that will allow telecom companies to buy and sell rights to unused spectrum among themselves. The Union Cabinet chaired by the Prime Minister, Mr Narendra Modi, gave its approval to the guidelines on spectrum sharing, aimed to improve spectral efficiency and quality of service, based on the recommendations of the Telecom Regulatory Authority of India (TRAI).  The Central Government’s several initiatives to promote manufacturing in the country, such as ‘Make in India’ campaign appears to have had a positive impact on mobile handsets manufacturing in the country. Companies like Samsung, Micromax and Spice had been assembling handsets in the country already. Xiaomi and Motorola, along with Lenovo have also started assembly of smartphones in India. Firms like HTC, Asus and Gionee too have shown interest in setting up a manufacturing base in the country.  The Government of India plans to roll out free high-speed wi-fi in 2,500 cities and towns across the country over the next three years. The program entails an investment of up to Rs 7,000 crore (US$ 1.06 billion) and will be implemented by state-owned Bharat Sanchar Nigam Ltd (BSNL).
  23. 23. 23 Rashmi Ranjan Moharana, M. Sc. (Agri.), 2016 CONCLUSION:  India will emerge as a leading player in the virtual world by having 700 million internet users of the 4.7 billion global users by 2025, as per a Microsoft report.  With the government’s favorable regulation policies and 4G services hitting the market, the Indian telecommunication sector is expected to witness fast growth in the next few years. References: Bharti Airtel Annual Report 2010 – 2011 http://www.trai.gov.in/ http://indiainbusiness.nic.in/newdesign/index.php?param=industryservices_landing/371/2 http://www.airtel.in/ https://en.wikipedia.org/wiki/Bharti_Airtel https://en.wikipedia.org/wiki/Telecommunications_in_India https://www.airtel.in http://www.airtel.in/wps/wcm/connect/about+bharti+airtel/Bharti+ Airtel/Investor+Relations/Company+Profile/PG_Company_Profile?countrytabs=1 http://investorzclub.blogspot.com/2011/04/telecom-companies-market-share.html http://www.marketingteacher.com/swot/bharti-airtel-swot.html# http://www.financialexpress.com/news/bharti-airtel-says-q4-india-arpu-drops-12/786275/ http://www.ibef.org/industry/telecommunications.aspx
  24. 24. 24 Rashmi Ranjan Moharana, M. Sc. (Agri.), 2016 DEPARTMENT OF AGRICULTURAL MARKETING, CO-OPERATION AND BUSINESS MANAGEMENT UAS, GKVK, BENGALURU-65 Name: Rashmi Ranjan Moharana Date: 14/06/2016 Class: Sr. M.Sc. (Ag.) in Ag.Maco. Major Advisor: Mr. T. N. Venkatareddy I.D. No.: PALB-4128 Seminar Teacher: Dr. M. S. Ganapathy SEMINAR II SYNOPSIS Indian Telecom Industry- A Brief Review India's telecommunication network is the second largest in the world based on the total number of telephone users (both fixed and mobile phone). It has one of the lowest call tariffs in the world enabled by the mega telephone networks and hyper-competition among them. It has the world's third largest Internet user base. According to the Department of Telecommunication of India (DoT), as on March 2015, India has 302.35 million internet connections. Major sectors of the Indian telecommunication industry are telephony, internet and television broadcast Industry in the country which is in an ongoing process of transforming into next generation network, employees an extensive system of modern network elements such as digital telephone exchanges, mobile switching centers, media gateways and signaling gateways at the core, interconnected by a wide variety of transmission systems using fibre optics or Microwave radio relay networks. The access network, which connects the subscriber to the core, is highly diversified with different copper pair, optic fibre and wireless technologies. DTH, a relatively new broadcasting technology has attained significant popularity in the Television segment. The introduction of private FM has given a fillip to the radio broadcasting in India. Telecommunication in India has greatly been supported by the INSAT system of the country, one of the largest domestic satellite systems in the world. India possesses a diversified communications system, which links all parts of the country by telephone, Internet, radio, television and satellite. Indian telecom industry underwent a high pace of market liberalization and growth since the 1990s and now has become the world's most competitive and one of the fastest growing telecom markets. The Industry has grown over twenty times in just ten years, from under 37 million subscribers in the year 2001 to over 846 million subscribers in the year 2011. India has the world's second largest mobile phone user base with over 929.37 million users as of May 2012. It has the world's second largest Internet user base with over 300 million as of June 2015. The total revenue of the Indian telecom sector grew by 7% to 2,832 billion rupees (US$42 billion) for 2010–11 financial year, while revenues from telecom equipment segment stood at rupees 1,170 billion (US$17 billion). of India and has played a significant role to narrow down the rural urban digital divide to some extent. It also has helped to increase the transparency of governance with the introduction of e-governance in India. The government has
  25. 25. 25 Rashmi Ranjan Moharana, M. Sc. (Agri.), 2016 pragmatically used modern telecommunication facilities to deliver mass education programmes for the rural folk of India. According to the UNCTAD, there is a direct correlation between the growth in mobile teledensity and the growth in GDP per capita in developing countries, which tend to have a high percentage of rural population. The share of the telecom services industry in the total GDP has been rising over the past few years. The Indian telecommunication industry employs over 400,000 direct employees and about 85% of these employees are from government owned companies. The ratio of number of subscribers to employees, an indication of efficiency and profitability, is much higher for private companies than for government companies. Foreign direct investment has been one of the major contributors in the growth of the Indian economy, and therefore, the need for higher FDI is felt across sectors in the Indian economy. The telecom sector has played a crucial role in attracting FDI in India. The share of telecom sector in the total FDI inflows in India has gone up to 18% in FY15 as compared with just 3% in FY05. The telecom sector requires huge investments for its expansion as it is capital intensive and FDI plays a vital role in meeting the fund requirements for expansion of the telecom sector. Telecom accounts for almost 10% of the total FDI inflows in the country and has been the third largest sector to attract FDI in India in the post liberalization era. Driven by strong adoption of data consumption on handheld devices, the total mobile services market revenue in India is expected to touch US$ 37 billion in 2017, registering a Compound Annual Growth Rate (CAGR) of 5.2 per cent between 2014 and 2017, according to research firm IDC. India's mobile subscriber base is expected to cross 500 million subscribers by the end of FY2015 from 453 million subscribers at the end of FY2014. According to a study by GSMA, smart phones are expected to account for two out of every three mobile connections globally by 2020 making India the fourth largest smart phone market. The broadband services user-base in India is expected to grow to 250 million connections by 2017, according to GSMA. India added the highest number of net mobile phone subscriptions of 13 million during the third quarter of 2015. International Data Corporation (IDC) predicts India to overtake US as the second-largest smart phone market globally by 2017 and to maintain high growth rate over the next few years as people switch to smart phones and gradually upgrade to 4G. In spite of only 5 per cent increase in mobile connections in 2015, overall expenditure on mobile services in India is expected to increase to US$ 21.4 billion in 2015, led by 15 per cent growth in data services expenditure, as per research firm Gartner. The Indian telecom sector is expected to generate four million direct and indirect jobs over the next five years according to estimates by Randstad India. The employment opportunities are expected to be created due to combination of government’s efforts to increase penetration in rural areas and the rapid increase in smart phone sales and rising internet usage.
  26. 26. 26 Rashmi Ranjan Moharana, M. Sc. (Agri.), 2016 References: http://www.ibef.org/industry/telecommunications.aspx http://www.trai.gov.in/ http://indiainbusiness.nic.in/newdesign/index.php?param=industryservices_landing/371/2 http://www.airtel.in/ https://en.wikipedia.org/wiki/Bharti_Airtel https://en.wikipedia.org/wiki/Telecommunications_in_India

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