Pest Analysis of Telecommunication Industry

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  • Topic: Mobile phone, Bharti Airtel, Vodafone
  • Pages : 18 (4573 words )
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  • Published : August 27, 2012
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INTRODUCTION OF TELECOMMUNICATION INDUSTRY

Telecommunication is the transmission of messages over significant distances for the purpose of communication. In the modern age of electricity, telecommunications has involved the use of electric means such as the telegraph and telephone, the use of microwave communications and the use of fiber optics.

The telecom industry plays an important role in the world economy and global revenues in 2008 were ~USD 4 trillion, expected to grow at a steep 11% p.a. CAGR over the next 2 years. Almost half (~USD 1.7 trillion) of telecom revenues accrue from service revenue, and analysts believe this is expected to grow significantly to ~USD 2.7 trillion by 2013.

Approximately 20% of the world population has access to the Internet. The telecom industry is vast and offers a wide range of career opportunities on both the hardware and software fronts. These prospects include functional jobs in mobile telephony, internet protocol media systems, wireless communications, GSM, GPRS and CDMA technology, VoIP, data networks and optical networks amongst others.

The global leaders in the field are companies like AT&T, Vodafone, Verizon, SBC Communications and Qwest Communications, who are all trying to take the advantage of the industry’s spiraling growth. The focus of telecom companies going forward is likely to be on leveraging more sophisticated telecommunication platforms like broadband technologies, LAN-WAN inter networking, optical networking, voice over Internet protocol and wireless data service etc.

MARKET SHARE TELECOMMUNICATION COMPANY

Sl. No.| Name of Company| Total Sub Figures| Additions in Aug| % Market Share| 1| Bharti Airtel| 171,846,824| 1,150,298| 28.09%|
2| Vodafone Essar| 144,144,031| 1,133,024| 23.56%|
3| IDEA| 98,441,714| 2,330,239| 16.09%|
4| BSNL| 90,622,219| 388,057| 14.81%|
5| Aircel| 59,191,661| 602,312| 9.68%|
6| Uninor| 27,738,154| 349,488| 4.53%|
7| Videocon| 6,382,493| -652,383| 1.04%|
8| MTNL| 5,298,081| 32,932| 0.87%|
9| Loop Mobile| 3,181,967| 19,035| 0.52%|
10| Stel| 3,433,988| -67,259| 0.56%|
11| Etisalat| 1,477,495| 52,941| 0.24%|
12| All India| 611,758,627| 5,338,684| 100.00%|

Different Players of Indian Telecom Industry

There are three types of players in telecom services:

. State owned companies (BSNL and MTNL)
. Private Indian owned companies (Reliance Communication, Tata Teleservices) . Foreign invested companies (Vodafone Essar, Bharti Airtel, and Idea).

PORTERS FIVE FORCES MODEL ON TELECOM SECTOR IN INDIA

1. COMPETITIVE RIVALRY WITHIN AN THE INDUSTRY

This describes the intensity of competition between existing firms in an industry. Highly competitive industries generally earn low returns because the cost of competition is high. A Highly competitive market might result from:

i) Many players of about the same size; there is no dominant firm ii) Little differentiation between competitor’s products and services iii) A mature industry with very little growth; companies can only grow by stealing Customers away from competitors

There are majorly 3 types of players in the industry…

i) State owned players. (BSNL and MTNL)
ii) Private Indian players. (Reliance comm, Tata comm, Bharti Airtel) iii) Foreign invested companies. (vodafone, Idea cellular)

There has been a stiff competition in the telecom market market over a period of time. Let us talk about the current scenario.

At present has a subscribers base of above 6,47,44,985 with a market share of aprox. 15%. BSNL has an edge over private players as it has already started with 3G specturm services across India. BSNL is BSNL dedicatedly performing its work as it drives India into the next league of telecom supremacy by providing technologically advanced services to its discerning customers at an affordable cost.

On the private side, there has been a tough...
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