INDIAN TELECOM INDUSTRY OVERVIEW
315 mn mobile subscribers by September 2010
39 mn fixed line subscribers by September 2010
Crossed 25% teledensity mark in March 2010
10.42 mn subscribers added in month of October 2010
There are 6-7 telcos operating in each of 23 license areas. Airtel, Reliance, Vodafone & BSNL, who are “the Big 4” have 74% market share
Growth is expected to continue and even accelerate, reaching a projected 496 mn mobile subs by 2010.
Fixed vs. Mobile
PORTER FIVE ANALYSIS : Threat from New Entrants
Supply Side Economies Of Scale
• declining ARPU
• Infrastructure tenancy costs
• Other FC like BPO
Demand Side Benefits
• Brand pull exists to some extent for brands like airtel /idea/ Vodafone
Customer Switching Costs
• Cost of new connection low
• Proposed number portability
• Extremely high infrastructure setup costs
• Spectrum License cost
Established brand image
Reliability of network
Uneven access to Distribution Channels
Not a factor
Restrictive Govt Policy
Spectrum and license allocation
3G and Number portability policy still unclear.
74% FDI cap.
Minimum requirement of number of towers.
Power of the buyer
Lack of differentiation among the service provider
Cut throat competition
Customer is price sensitive
Low switching costs
Number portability to have negative impact
Supplier Bargaining Power
Large number of suppliers.
Shared tower infrastructure.
Limited pool of skilled managers and engineers especially those well versed in the latest technologies. •
Medium cost of switching since changing their hardware would lead to additional cost in modifying the architecture. •
Overall influence on the industry – medium
Rivalry among Existing Competitors
High Exit Barriers
High Fixed Cost
6-7 players in each region
3 out of 4...
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