Telecom Sector Analysis

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PROJECT REPORT ON

“SECTOR ANALYSIS – TELECOM INDUSTRY

&

A CASE STUDY OF: IDEA CELLULAR LTD.”

SUBMITTED

IN PARTIAL FULFILLMENT OF THE REQUIREMENTS

FOR THE AWARD OF DEGREE OF

POST GRADUATE DIPLOMA IN BUSINESS MANAGEMENT (PGDBM)

SUBMITTED BY

PRAJAKTA M. DIWAN

PGDBM - FINANCE

BATCH: 2007-09

UNDER THE GUIDANCE OF

PROF. V. S. DATE

[pic]

N.L.DALMIA INSTITUTE OF MANAGEMENT STUDIES & RESEARCH

SHRISHTI, SECTOR 1, MIRA ROAD (E), MUMBAI 401104

CERTIFICATE

This is to certify that Prajakta M. Diwan, a student of N.L. Dalmia Institute of Management Studies and Research, has successfully completed the project titled ““SECTOR ANALYSIS – TELECOM INDUSTRY & A CASE STUDY OF: IDEA CELLULAR LTD.”,under my supervision and guidance as a partial fulfillment of the requirements of PGDBM course ,Batch 2007-2009.

The information submitted is true and original to the best of my knowledge.

Place:Mumbai

Date:

DECLARATION

I, Prajakta M. Diwan, a PGDBM student of N. L. Dalmia Institute of Management Studies and Research hereby declare that, I have completed my project on “SECTOR ANALYSIS – TELECOM INDUSTRY & A CASE STUDY OF: IDEA CELLULAR LTD.” in the academic year 2007-09.

The information submitted is true and original to the best of my knowledge.

Signature:

Prajakta M. Diwan

PGDBM Finance

ACKNOWLEDGEMENT

The success of any project is the result of hard work & endeavour of not one but many people and this project is no different.

I would like to express my gratitude towards my project guide Prof. V. S. DATE for his encouragement and support throughout my project. Without his help and guidance, this in-depth exposure to all aspects of SECTOR ANALYSIS – TELECOM INDUSTRY & a CASE STUDY OF: IDEA CELLULAR LTD. would not have been possible.

My heartfelt thanks to PROF. P. L. ARYA for providing me with the infrastructure for the project and also the entire faculty, who have provided me the knowledge and guidance that has facilitated the successful preparation and completion of the project.

I am also indebted to all other sources from which I have drawn information and all those persons from whom I have received help and advice in completing this project.

Prajakta M. Diwan

PGDBM Finance

Executive Summary6

Telecom Industry Overview9

India to have 541.3mn mobile subscribers by FY201113
Incumbent operators to lord over newer entrants17
Spectrum remains the biggest concern19
Infrastructure Sharing - Gaining ground22
Indian Broadband Sector - A sorry tale23
Fixed Line subscriber base24
Recent Industry Developments27
Mobile Number Portability ( mnp) - A 'contingent liability'33 Global Examples Of MNP Implementation :Hongkong & Taiwan35
Conclusion36
Outlook36

Infrastructure Sharing37

Business Case37

Infrastructure Sharing – Driven by Cost Dynamics42
Government support for Infrastructure Sharing53

Case Study – IDEA CELLULARLtd.59

Company Description in Brief.59
Circle of Operations.60
Investment Argument62
Weaknesses & Concerns63

Valuation of Bharti Airtel Ltd.66

Methodology Of Discounted Cash Flow67
Methodology Of Fair Value Calculation..68
Assumtions & Key Inputs.69
Calculation of FCFF & Net Operating Working Capital70
Forecasting of Future Cash Flows & Intrinsic Value71

References72

Executive Summary

Enabling policies, competition, strong GDP growth power subscriber numbers

The Indian Mobile Telecom Industry has been one of the best examples of the success of the Indian Government's reforms programme. The sector has grown at a scorching pace over the past few years aided by enabling regulations,...
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