Micro Analysis on

Telecommunication industry In
India
Presented By
Vyas Bhargav
Modi Maunish
Barot Pooja
Chauhan Dhaval
Parmer Ajay
Nallabariki Laxmi

Presented To
[13044311145]
[13044311039]
[13044311006]
[13044311016]
[13044311048]
[13044311040]
Date : 16th December

Introduction to
Telecommunication Industry

History and evolution of telecom

industry
The history of Indian telecom can be started with the introduction of telegraph. The Indian
postal and telecom sectors are one of the worlds oldest.

In

1850,

the

first

experimental

electric

telegraph

line

was

started

between Calcutta and Diamon Harbour. In 1851, it was opened for the use of the British East
India Company.
William O'Shaughnessy who pioneered the telegraph and telephone in India, A separate
department was opened in 1854 when telegraph facilities were opened to the public.

 Telecom Regulatory Authority of India (TRAI) was created in 1997. It was formed
to act as a regulator to facilitate the growth of the telecom sector.
During this period that the Narsimha Rao-led government introduced the National
Telecommunications policy (NTP) in 1994 which brought changes in the areas like
Ownership, service and regulation of telecommunications infrastructure.

Milestone achieve by Telecom Industry in India

1902 First wireless telegraph station established
1907 First Central Battery of telephones introduced in Kanpur
19131914 First Automatic Exchange installed in Shimla
1927 Radio-telegraph system between the UK and India
1933 Radiotelephone system inaugurated between the UK and India.
1953 12 channel carrier system introduced.

Major sectors of Telecommunication

Industry of India
Telephony:
The telephony segment is dominated by private-sector and two state-run businesses. Most
companies were formed by a recent revolution and restructuring launched within a decade, directed
by ministry of communication and it.
Fixed Telephony:
Until the New Telecom Policy announced by Government-owned BSNL and MTNL were
allowed to provide land-line phone services.
Mobile telephony
In August 1995, Chief Minister of West Bengal, Shri Abhishek Yadav ushered in the cell phone

 Internet
The history of the Internet in India started with launch of services by VSNL on 15
August 1995. They were able to add about 10,000 Internet users within 6 months.
Broadcasting
Television broadcasting began in India in 1959 by Doordarshan, a state run
medium of communication, and had slow expansion for more than two
decades. The policy reforms of the government in the 1990s attracted private
initiatives in this sector.

 On 16 November 2006, the Government of India released the radio policy which
allowed agricultural centers, educational institutions and civil society organizations
to apply for community based FM broadcasting license

Major players of Telecom Industry

Strategic Analysis

Strategic Group Mapping

50000

Airtel

Y axis
40000

Net sales
(in Crores)

VODAFONE
Idea

20000

Reliance
10000
5000
BSNL

National

TATA

Geographical Scope

Global

X axis

Competitive Profile Matrix

CRITICAL SUCCESS
FACTORS
Market share
Customer service
Customer Loyalty
Financial Position
Strong online present
Profit Margin
Price competitiveness
Value added service
Proper speed and bandwidth
Strong connectivity
Billing Transparency
Technical competence
Handling of complaints
Total

Weight

0.12
0.10
0.06
0.07
0.05
0.11
0.11
0.04
0.12
0.10
0.02
0.02
0.08
1

VODAFONE

Bharti Airtel

Reliance Communication

Rating

Score

Rating

Score

Rating

Score

3
4
2
4
2
3
3
4
4
4
2
2
4

0.36
0.4
0.12
0.28
0.1
0.33
0.33
0.16
0.48
0.4
0.04
0.04
0.32
3.04

4
3
4
3
4
4
3
3
3
4
3
4
3

0.48
0.3
0.24
0.21
0.2
0.44
0.33
0.12
0.36
0.4
0.06
0.08
0.24
3.46

3
2
2
4
3
3
2
2
2
1
1
1
2

0.36
0.2
0.12
0.28
0.15
0.33
0.22
0.08
0.24
0.10
0.02
0.02
0.16
2.28

External Factor Evaluation Matrix

Key External Factors

Weight

Rating

Weighted
Score

Population

0.30

1.2

Changing Population psychograph

0.19

0.38

Increased Penetration level

0.12

0.12

FDI

0.12

0.36

Government Policies

0.15

0.45

New Technology
Total

0.12
1

0.48
2.99

Opportunities

Threats

Porters Five Force Model

PEST Analysis
Political

Economic

Regulations

Cost of calls Being Driven Down.

Political Opposition to participation by

Worldwide Recession- Both Boon &

the private players.

Govt support to promote FDI in Telecom
sector.

Bane.
Middle class consumer base growing
due to accelerated economic growth.

Socio-Cultural
High End Phones becoming status

Technology
Strong Fiber Optic Network.

symbol.
Due to Intimate family bonding in

Utilization of E- Commerce facilities.

Indian Culture, there is need to

remain connected.
Tech Savvy Generation.

Efficient Customer Care Services.

OT Analysis
OPPORTUNITY

Porters Diamond Model

Chance

Firm Strategy, Structure

and Rivalry

Factor Conditions

Demand Conditions

Related and Supporting

Industries

Government

Firm Strategy, Structure, and Rivalry

Intensive competition in the country has

Factors Conditions

Presence of skilled labor pool.

made it possible for service providers to

Rapidly developing & increasing

offer the service with lowest fare in the

disposable incomes of consumers.

world profitably.
Many new handsets have been launched.

Increasing demand due to changing

lifestyles and growing attraction for
mobiles with new features.

Related supporting Industries

Handset players are setting up manufacturing bases in India for better operation
management.

Many telecom equipment & Software companies are based in India.

Various value added service providers and content developers are present in India.

Demand Conditions
India has a large middle class.
Growing affordability and lifetime free
schemes have created a market at the bottom of
the pyramid.
Low tele density offers huge future
potential.

Governments
The government extends full
support to industry through
reform processing.
Policies are in place to safeguard
the interests of service providers
as well as those of consumers.

Financial Analysis

Ratio Analysis
Debt Equity Ratio
Name of Company

Year
2011

2012

2013

Vodafone South

0.61

0.71

0.64

TATA Communication

0.63

0.67

0.79

Hexacommunication

0.50

0.71

0.37

Bharti Airtel

0.43

1.17

0.35

Total

2.17

3.26

2.15

Industry total

0.54

0.82

0.53

0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
2011

2012

2013

Current Ratio
Name of Company

Year
2011

2012

2013

Vodafone South

0.39

0.36

0.38

TATA Communication

1.23

0.58

0.64

Hexacommunication

0.51

0.58

0.51

Bharti Airtel

0.49

0.54

0.50

Total

2.62

2.06

2.03

Industry total

0.66%

0.52%

0.51%

0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
2011

2012

2013

Name of Company

Year

Net Profit Analysis

2011

2012

2013

Vodafone South

7.51

12.06

13.97

TATA Communication

6.47

14.87

18.35

Hexacommunication

22.52

22.65

22.04

Bharti Airtel
Total

16.72
53.22

14.23
63.81

16.78
71.14

Industry total

13.305%

15.95%

17.785%

20
18
16
14
12
10
8
6
4
2
0
2011

2012

2013

Average collection period

Name of Company

Year
2011

2012

2013

Vodafone South

1.21

0.90

0.66

TATA Communication

0.43

0.42

0.53

Hexacommunication

3.07

4.71

3.57

Bharti Airtel
Total

0.17
4.88

0.16
6.19

0.16
4.92

Industry total

1.22%

1.5475%

1.23%

1.8
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
2011

2012

2013

Trend Analysis (Sales)

Name of Company

Year
2011

2012

2013

Vodafone South

6277.33

11512.4

12736.7

TATA Communication

3611.77

4091.77

4416.12

Hexacommunication

2943.45

3379.1

3666.1

Bharti Airtel

38017.7

41603.8

45350.9

Total

50850.25

60587.07

66169.82

Industry total

12712.56

15146.76

16542.45

18000
16000
14000
12000
10000
8000
6000
4000
2000
0
2011

2012

2013

Expenditure Trend
Name of Company

Year
2011

2012

2013

Vodafone South

6277.33

11512.4

12736.7

TATA Communication

3611.77

4091.77

4416.12

Hexacommunication

2943.45

3379.1

3666.1

Bharti Airtel

38017.7

41603.8

45350.9

Total

50850.25

60587.07

66169.82

Industry total

12712.56

15146.76

16542.45

18000
16000
14000
12000
10000
8000
6000
4000
2000
0
2011

2012

2013

Business Plan

Franchise of uninor set up in Mehsana

Telewings Communications (operating under the brand name Uninor), is an Indian mobile network
operator based in Gurgaon, Haryana, India.

The company is a subsidiary of Telenor Group, a telecommunications company headquartered in

Oslo, Norway, and Telenor now owns 100% of the stake in Telewings Communications.

Uninor serves more than 3 crore customers in the states of Uttar Pradesh, Uttarkhand, Bihar,
Jharkhand, Maharashtra, Goa, Gujarat and Andhra Pradesh. The mobile service provider targets youth
and other communities within the Indian mass market

Vision
Empower societies we provide the power of digital communication, enabling everyone to
improve their lives, build societies and secure a better future for all.

Mission
Were here to help our customers, We exist to help our customers get the full benefit of
being connected. Our success is measured by how passionately they accept us and make
us a part of their life.

Objectives of company
Capture the market through provide innovative product in telecom segment.
To achieve higher level of satisfaction through quality telecom.
To achieve high market share in telecom segment.

Process for taking Franchise of Uninor

Step 1 :
Centre sends LOI, signs MOU.
Centre submits following legal papers & certifications: Bank Statements for last 6 months + IT Returns of 1 years)
Company Profile with Pictures of Existing Infrastructure. Pan card Snapshot Required.
Step 2 :
Centre is called to sign SLA with Uninor.
Step 3 :
The guarantee approval and audit by Uninor.
Step 4 :
Centre has to ensure that all that is mentioned in the company profile and other legal papers & certification is true and
correct.
Step 5 : Centre has to send LOI & sign MOU

List of Documents required for

Franchise

STP Analysis of UNINOR in

Mehsana

Partnership deed (MoA / AoA )

License from Govt. (shop registered under
municipality)

Segments: Geographic, and demographic Wise

urban and rural area.

Sales Tax number (TIN number)

PAN number for business
Gumasta-dhara certificate

Target groups: We are targeting young students

middle class and lower class.

Telephone/Fax connection (land line)

Positioning: We are set our positioning on the base

of service quality and lower price

Marketing & Sale promotion

Personal sales
Internet / Interactive Selling
Consumer oriented sales Promotion

High rich in rural & urban

Demonstration

Free sample

Profit Oriented Sales Promotion

Dealer incentive
Employee Allowance

Sources of Finance
Bank Statement
Personal Savings
Friends and Relatives

TRAI recommendations to terms and conditions

for unified license.
Delinking Spectrum from License
TRAI has highlighted the change in the Government's

Promoter Lock-in
Value Added Services

policy with respect to the previous regime where spectrum Tripartite agreement
was linked to the Unified Access Service Licence (UASL). Performance Guarantee
Substantial Equity/Cross-Holding Requirement
The draft of the UL (AS) makes reference to the crossholding restriction that prohibited any shareholder from
holding no more than 10% of the equity.

Penalties

Cost Of Project
Sr.no.

Particulars

Amount

Site on Rent

25000

Computer (23500*3)

70500

Furniture

50000

Machinery & Equipments (Zerox machine)

5000

Raw material expenses ( blank paper)

2000

Marketing and Sales Promotion Expenses

Staff Salary

head office ( experienced ) 1 * 15000

Computer operator

3 * 7500

Labor

1 * 2500

Other Expenses
Total

40000
10000
2,02,500

Cash on Hand

47500

Cost of project

2,50,000

Estimated Profit and Loss

Particular
Sales

Year (2014-15)
345000

Commission

6,900

Sim Recharge com.

13800
Total income

3,65,700

Expenditure
Salary

40,000

Electricity bill

6,000

Rent

25,000

Miscellnious exp.

10,000
Total Exp.

81,000

Net Profit

2,84,700

Findings, Limitation & Conclusion

Findings
New entrants can take advantage of gaps in the offerings
of these aging pioneers, or find innovation ways to market
product or service.
Re-examining high levies.

Enhancing skill sets

Bringing down operators capex.

Impact of global economic downturn

Rational policy for spectrum allocation.

Data revenues to provide 'Buffer.

Limitation
We have collected the secondary data where we cannot able to get exact information
About the telecommunication industry privilege in the market as based in past data
and hence cannot be reliable guide to future performance as future is dependent on
other factors.

Conclusion
The technology improvement has helped the sector to perform better and has also
expanded the meaning of the term "telecommunication" from just audio message
transformation to virtual presence of person. the sector clearly shows a scope for
future.
In our opinion, instead of taking a short-term view of paying capacity, the telecom
companies should focus on a long -term game. There is one word that telecom
companies are hearing a lot these days-"Volumes".

 There are challenges like porting time, allocation of capital and operational porting
costs among positive and will be set once the committee submits its final report
on he same.
The margins and profits of almost the telecom companies have been increasing.
In fact there are cases where significant portions of profit of international telecom
companies have been from their operations in India.
India has the advantage of using the latest technology and so it is in a
better
position when compared to many other countries as far as introduction of NGN is