Telecommunications

 

Overview
With the second largest telecommunication network in the world, the number of Indian telephone subscribers stood at 1002.5 million as at May 2015. The Indian telecommunication industry is divided in the 3 sectors – telephony, internet and television broadcasting. The number of mobile users in India is increasing at an increasing rate; it hit 975.78 million as on May 2015. Increasing reliance on various media on people’s daily lifestyle has added to revenue potential of industry participants.
The regulatory authority for this industry is TRAI (Telecom Regulatory Authority of India). Indian telecommunication industry picked up pace after liberalization and privatization in 1991 and today, with a hyper competitive structure of suppliers, it has achieved the lowest call tariffs globally and has emerged to be the third largest internet user base in the world. The INSAT system in India, one of the largest domestic satellite systems in the world, helps this industry in gaining leverage for a smoother network and a larger customer reach. The country has a robust telecommunication infrastructure with proactive Government support which has aided it to grow at a CAGR of 5.2% as against the global growth rate of industry revenue at 5.3%.
Domestic Outlook
The major industry players are Bharti Airtel, Idea Cellular, Reliance Comm., Tata Comm., MTNL and Tata Teleservice. The graph comparing their market capitalization and net sales based on Telecomm – Services sector is shown as follows.

 

 

Buy Industry Analysis

Due to the ruthless competition that thrives in this industry, participants are forced to achieve cost efficiency with power to the buyers. With the support of The Telecom Equipment and Services Export Promotion Council (TEPC), long term partnerships or ventures can be built to promote cost efficiency or better, greener technologies in India.
 
Global Outlook
An early intervention of foreign investment in this sector has resulted in large market shares being captured away by foreign participants. Due to the revenue to the exchequer, Government too has not ruled in favor of domestic participants to drive out foreign competition.
 
A particular sector of this industry as illustrated above shows the struggle that Indian participants have to cope with to retain their customer base in India.
On a global scale, a rapidly rising middle class and access to affordable smart phones and various other media have not only increased potential customer base but also competition. With the current exports of about INR 32,000 crores, with 62.5% in products and equipment, and the remaining 37.5% in services, India aims to increase their telecommunication products and services to $10 Billion in the next five years with a CAGR at about 25% in exports.
The current issue of net neutrality as well as a large customer base of major participants has held their market share on shaky grounds. Most large players are able to create new customers through heavy advertisement costs and price slashes but are not able to retain their existing customer bases. Domestic participants must resort to indigenous production of equipment and achieve self-sufficiency in services to tighten their grip on national and international markets.

Future Potential
There is a capacious rural market in India which could hold immense potential for telecommunication industry in all its segments. Rapid urbanization and Government support to this industry add fuel to growth of industry participants. The emergence of Green telecom trend aims at reducing carbon footprints through decreased consumption of energy. Also, the recent BWA technologies by Reliance Jio being the only operator to bag the 4G spectrum is planning to roll out its 4G LTE services to 800 cities domestically in this year. With Hon’ble PM Narendra Modi’s JanDhan Yojna, an increased number of bank accounts has led to increased reliance on mobile banking which is a favorable turn of events for the telecommunication industry in terms of service sector.
With increased usage of Mobile Value Added Services (MVAS), cloud computing and global per capita incomes, there is vast potential for this industry to flourish, nationally and internationally.

What this report contains:

  • A detailed overview of the industry

  • Structure of the industry from both, domestic and international perspectives

  • Related industries that this industry has inter-dependencies with and their understanding

  • Detailed analysis of industry segments in terms of the value and depth of corresponding market

  • Analysis & insights about the elements and critical success factors of this industry using strategic models

  • A forecast on the state of this industry in 2020, predicting the growth and movement patterns for 2016 - 2020

  • Our professional analysis on the future of the industry based on strategic actions adopted by major industry participants

  • Quantitative estimates and forecasts of the growth prospects of the industry using revenue and financial forecasting models

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