The Telecommunications Industry in India -- Michael Porter's Five Forces Analysis
Submitted To: - Prof. AVIJAN DUTTA
Date Of Submission:- 4th feb,2009
NAME ROLL NO. Submitted By:- Ashish Vatshayayan 03 Rajesh chaudhary 28 Anurag Yadav 34 Dheeraj Kumar 38 Ambarish Anand 44 Sarangdhar 56
India continues to be one of the fastest growing telecom markets in the world. Reforms introduced by successive Indian governments over the last decade have dramatically changed the nature of telecommunications in the country. The sector ranks second in the world, with over 225.7 million telephone subscriptions by 2008-end. The fast track growth of the Indian telecom industry has made it a key contributor to India’s progress. India adopted a phased approach for reforming the telecom sector right from the beginning. Privatization was gradually introduced, first in value-added services, followed by cellular and basic services. An independent regulatory body, Telecom Regulatory Authority of India (TRAI), was established to deal with competition in a balanced manner. This gradual and thoughtful reform process in India has favored industry growth. Today, there are more than 225 million telecom subscribers in India. Every month, 6-7 million new subscribers are added. Upcoming services such as 3G and WiMax will help to further augment the growth rate. Furthermore, the Indian economy is slated to sustain its 7-9 per cent growth rate in the near future. This is supported by the political stability that the country is experiencing currently. India’s demographic outlook makes it one of the largest markets in the world. A conducive business environment is also created by a favorable regulatory regime. There exists enormous business potential for telecom companies on account of the country’s low teledensity, which is close to 19 per cent presently. The Indian telecom industry is growing at the fastest pace in the world and India is projected to be the second largest telecom market globally by 2010.
The Telecommunications Industry in India in Michael Porter's Five Forces Analysis :
It uses concepts developed in Industrial Organization economics to derive five forces that determine the competitive intensity and therefore attractiveness of a market. Porter referred to these forces as the micro- environment, to contrast it with the more general term macro-environment. They consist of those forces close to a company that affect its ability to serve its customers and make a profit. A change in any of the forces normally requires a company to re-assess the marketplace.
1.RIVALRY AMONG EXISTING COMPETITORS
Competition in Indian Telecom Industry
There are three types of players in telecom services:
• State owned companies (BSNL and MTNL).
• Private Indian owned companies (Reliance Infocomm,TataTeleservices. • Foreign invested companies (Vodafone, Bharti Tele-Ventures, Idea Cellular, Spice Communications) .
On October 1, 2000 the Department of Telecom Operations, Government of India became a corporation and was renamed Bharat Sanchar Nigam Limited (BSNL). BSNL is now India’s leading telecommunications company and the largest public sector undertaking. It has a network of over 45 million lines covering 5000 towns with over 35 million telephone connections. The state-controlled BSNL operates basic, cellular (GSM and CDMA) mobile, Internet and long...