Industry & Company Analysis

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Industry and Company Analysis

Strategic Management

Submitted By:
Pushpendra Parikh - 151


Economic Trends:
Indian economy is the second fastest growing economy in the world. It lags only behind China. The manufacturing as well as the service sector have been performing well since the last 4 years. Though agricultural sector performance is not much impressive, it has been able to maintain its growth rate of 3-4%. The demographics as well as the governments liberal stand to foreign players entry has given a much needed impetus to the economy. A lower interest rate scenario coupled with higher disposable incomes has fuelled a massive consumption binge by the Indian citizens. Most of the industry be it banking, real estate, telecom,IT/ITES,etc have had a remarkable growth over the last few years. Though the recent sub-prime crisis has definitely spell troubles for the economy we are favorably placed to weather this storm due to astute fiscal & monetary policy of the government.

Industry Trend:
Indian telecom sector has been one of the major beneficiary of the liberalization policy of the Government. The entry of the private players as well as the foreign players have dramatically changed the way people communicate.

Mobile which in the 1990 were considered a status symbol has now found its way into the hands of common man. This has been made possible due to opening of the telecom sector to private & the foreign players.

We are seeing the emergence of new technology like 3G,VOIP,IPTV, Broadband which will enhance the users experience.The world's leading telecom handsets manufacturers, such as Nokia, Samsung, Motorola and LG have their presence in India, along with leading global service companies and infrastructure majors, such as Vodafone, AT&T, Ericsson, Alcatel, Singapore Telecom and Siemens.

Telecom equipment is itself a big industry if we assume that the requirement of the telecom equipment would be around 32000 crore in 2008-09.In July 2008, the cumulative revenues of cellular, fixed line, national long distance, international long distance, broadband, radio trunking and VSAT services, had risen to a humongous US$ 30,888 billion registering a growth of 21.3 per cent, as revealed in a Voice & Data survey. The Indian telecom market had generated revenues around US$ 20 billion in 2006-07.

Telecom sector has been in a high growth phase ever since the government has liberalized the sector. This is being reflected in the growth of wireless subscribers & the broadband subscribers, Indian telecom wireless subscriber base is only next to China garnering almost 360mn subscriber. The broadband subscriber base has also crossed the 5mn mark.

Indian wireless subscriber addition has been around 9-10mn per month over the last months & that is expected to sustain going forward.

As per Gartner estimates , Indian Mobile subscriber will touch 600mn by the end of 2010. That’s speaks volumes about the potential of Indian telecom market.

Having already achieved the distinction of boasting the lowest call rates, the fastest growth in number of subscribers, the fastest sales of million mobile phones, the cheapest mobile handset and the world's most affordable colour phone, India offers an unprecedented opportunity for telecom service operators, infrastructure [pic] vendors, manufacturers and associated services companies.

Driving Forces:
➢ Rising Incomes level
➢ Economic Growth
➢ Affordability
➢ Business expansion into global territories.
➢ Need for seamless communication.
➢ Rising PC penetration & hence need for higher data speeds. ➢ Mobile becoming a necessity.
➢ Cellular teledensity still only around 31% as on 31st Oct 08. ➢ Rural area teledensity at around 6%.
➢ A higher proportion of youth in the population. ➢ Choice of mobiles galore.

Growth Potential...
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