Group-O

Ragini Iyer(052)
Rishabh Khandhar(058)
Sandeep Agrawal(070)
Sria Majumdar(083)
Sushant Gupta(087)
Abhishek Singh(096)
AGENDA

• Objectives
• Indian Telecom Industry
• Key Factors
• Market Structure
• India’s Growing Market
• Reliance Communications
• Analysis
Group-O• Question & Answers 2
OBJECTIVES
• Telecom Sector Analysis
– Market Shares
– Average Revenue per User (ARPU)
– Market Structure
• Reliance Communications
– Cost Management
– Economics of Information
– Externalities
– First mover advantage
– SWOT analysis
– Strategy for profitable Growth
–Group-O
CSR Initiative 3
INDIAN TELECOM INDUSTRY

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 KEY FACTORS

• Supply : BSNL, MTNL, Bharti Airtel, Reliance

Communication, Vodafone, Idea Cellular, Aircel, Tata
Teleservices
• Demand: Expected telecom subscriber base by 2012 –
900 million; driven by rural demand
• Bargaining power of supplier: Reducing - due to
competitive scenario
• Bargaining power of customers: Increasing - due to
competitive scenario
• Competition: Increasing dayGroup-O
by day 5
 MARKET STRUCTURE
• Oligopoly Market – Herfindahl-Hirschman Index
• Top 5 companies market shares
• <40% - Highly Competitive
• 40% to 60% - Moderately Competitive
• >60% - Oligopoly

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INDIA’S GROWING MARKET

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RELIANCE COMMUNICATIONS

• Dhirubhai Ambani’s vision – “To bring the power of

communication to every Indian by making calling on
the phone cheaper than sending a postcard”
• An Integrated Telco:
Wireless • #2 in India, #4 Globally(single country)

Enterprise • Largest global private submarine cable n/w

• One stop shop for all large corp. for
Globalcom communication, n/w and IT infra need
Home • National DTH Business, rich content access

Infratel • 200k+ slots,Group-O

provides space & connectivity 8
RCOM AT A GLANCE

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FINANCIAL HIGHLIGHTS

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DYNAMIC LANDSCAPE

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COST MANAGEMENT

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 REVENUE PER MINUTE

• Pricing – Driven by
Sequential Game
Theory
• Call prices have fallen
amid stiff competition
• RCOM-the only
operator which has held
on to the RPM over last
4 quarters Group-O 13
URBAN & RURAL MARKET

 India’s Tele-density is 44.87%

 Rural tele-density is just 18.97%, urban 101.38% (2009)
 Targets Rural Market
 Established a pan-India (wireless and wire line),
convergent (voice, data and video) digital network
covering over 20,000 towns and 500,000 villages
 Launch OF BharatNet High-speed Wireless Internet
service PLAN
 Expanding rural services with Grameen VAS
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ECONOMICS OF INFORMATION

• Internal Information
– Decision for launching different
plans:
– Launching Value added services
• External Information
– Competitor information
–Group-O
Acquiring 3G licenses 15
 FIRST MOVER ADVANTAGE

• Launch of 3G Lab (1st Sep., 2009) : Cost

reduction, simpler for adoption
• Strategic partnership with Acer : Launch of a
Netbook with Embedded Wireless Broadband
connectivity
 EXTERNALITIES

• Network Externalities
– Most important for any telecommunication company
– A positive externality as the purchase by a number of
people leads to bandwagon effect
– Network effects become significant after critical mass
is achieved
– Discourages monopoly with existence of a number of
networks
 SWOT ANALYSIS
Strengths
• Part of well-funded and well-
connected Indian Conglomerate
• Economies of scale from large
subscriber base
• Expertise in a business model to
maintain high profitability from
lower-yielding subscribers
Opportunities
• Aggressive move into the rural market
• Use mobile number portability as
"launching pad" to grab market share
of higher ARPU users
• Lease spare capacity on its CDMA
network to mobile virtual network
operators
Weaknesses
• Cost structure disadvantage with
subscribers spread across two different
mobile networks
• Low ARPU compared with competitors
weakness in rural markets
• Limited availability of value-added
services
Threats
• Quicker than expected slowing of growth
in the Indian marketplace
• Mobile number portability risks
accelerating churn of subscribers from
CDMA to GSM
• New competitors
 MACRO ENVIRONMENT

Revenue

Effect of Videoconferencing
• Major change in the industry
• Adapted with changing business environment
• Invested in videoconferencing solutions
 CSR INITIATIVE

• Buzzword of the day – essential for any company

• Organised internal campaigns for voluntary blood
donations
• “Little Genius”- provides poor children an opportunity to
explore the digital world
• ‘e-Shikshit’ – help people in rural areas to access
information
• Eye care services -Rural terrain in Kerala
• Support & services to children suffering from Cleft lip
• Encouraged employees to Group-O
support social endeavours 20
STRATEGY FOR
GROWTH

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Thank You

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