REPORT ON DIVERSIFYING THE BUSINESS TO AIRLINES SECTOR OR RETAIL SECTOR OR TELECOM SECTOR

AIRLINES
IMPORTANCE OF AIRLINES IN INDIA: Growing Tourism Improving Infrastructure Globalization

 PRESENT SCENARIO:
 In the financial year 2006-07 there has been a significant 22.3 percent growth in passenger traffic in the domestic airports while the aircraft movement recorded a growth by 14.2 percent.

CLASSIFICATION OR TYPE OF AIRLINES:

 Scheduled air transport service, which includes domestic and international airlines.  Non-scheduled air transport service, which includes charter operators and air taxi operators.  Air cargo service, which includes air transportation of cargo and mail.

 ADVANTAGES IN AIRLINES:

 Foreign equity allowed  Low entry barriers  Attraction of foreign shores  Rising income levels and demographic profile  Untapped potential of India's tourism:

RETAIL SECTOR
INDIAN RETAIL HAS EVOLVED INTO A MAJOR GROWTH OPPORTUNITY:
 Retailing Industry in India is estimated at INR 15.5 trillion growing at CAGR of 15 to 20 % Organized Retail accounts for 5-8% which is lowest compared to its peers in BRIC countries Brazil (38%), Russia (33%) and China (20%). The Organized Retail has been growing at 35% CAGR. The retail and wholesale sector in India accounts for approx 14% of GDP in terms of employment, the sector is second largest employer providing over 10% of all formal jobs.

CRITICAL ISSUES IN INDIAN RETAIL SECTOR:  Supply Chain  Innovation and Marketing  Private Label products  GST will benefit retailers  Workforce management practice is at nascent stage  Sustainability and green marketing

TYPES OF RETAIL SECTOR TO INVEST:

 Food and Grocery Retail  Apparel Retail  Gems and Jewelers Retail  Pharmaceutical Retail  Music Retail  Book Retail  Consumer Durables Retail

TELECOM SECTOR:
While the global economic downturn has adversely affected almost all the industry sectors, the Telecom Industry stands out as an exception. Large investments have been planned in the sector during the ensuing year on the back of rapid pace of subscriber additions, introduction of new technologies such as 3G, Wi-Max, Internet Protocol Television (IPTV) etc. and Re1gulator driven initiatives. All major players in the industry are banking with us and 88% of the exposure of the sector is in the CAG portfolio.

 THE TELECOM INDUSTRY CONSISTS OF TWO SEGMENTS:

 Telecom Service Providers  Telecom Equipment Manufacturers TELECOM SERVICES CAN BE DIVIDED INTO THE FOLLOWING SEGMENTS:
 WIRELESS SEGMENT CONSISTING of Global System for

Mobile  Communications (GSM) & Code Division Multiple Access (CDMA) (Mobile)  Wire line Segment (Fixed Line)  Internet and Broadband Segment

 REGULATORY INITIATIVES AND POLICIES: TRAI, facilitates rollout of new technologies and applications, keeps check on tariffs, allocates spectrum and recommends improvement to the Government and Industry. TRAI has slashed the termination fee paid by operators by 33%, which will help Telecom companies reduce their Local as well as National Long Distance (NLD) tariffs by upto 20%.

 3G SERVICES IN INDIA: In India, 3G handset proliferation would be the single biggest driver of 3G services, at least in the preliminary phase, as it would widen the target base for 3G service providers. Currently, 20-30% of the total handsets in the market are capable of accessing 3G services and approximately 8% of incremental handsets sold every month are 3G enabled.

 AVERAGE REVENUE PER USER (ARPU): With the rapid pace of subscriber additions, the industry is also characterized by declining ARPU. Industry wide GSM and CDMA ARPUs have declined (since 2004) at an annual rate of 12% and 20%, respectively. KEY CONCERN AREAS: Spectrum allocation Price wars License fee

 INVESTMENTS OUTLAY:
 Unitech Wireless backed by Telenor Norway has announced a Telecom Infrastructure Project with an investment Rs.10,000 crs. spread over 3 years. The Company plans to initially roll out in eight circles.  Idea Cellular has announced an infrastructure development project in Orissa, involving a cost of Rs.1,000 crs. The Company had also announced a Rs.1,000 crs. GSM Expansion Project in Tamil Nadu.  Tata Teleservices intends to go in for a Rs.1,000 crs. GSM expansion project.