Telecom Sector Analysis

Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved.

PRESENTATION ON COMPARATIVE ANALYSIS OF PUBLIC AND PRIVATE PLAYER OF TELECOM INDUSTRY (BASED ON CUSTOMER SURVEY)

Presented by- Group I

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STATUS OF TELECOM SECTOR

 Historically telecom network in india was owned and managed by govt as it is considered as a strategic service.

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INDIA’S POSITION IN TELECOM SECTOR

 India is 4th largest market in asia after china, japan and south korea.  Indian telecom network is 8th largest in the world and 2nd largest among emerging ecomomies.  Contribution of telecom sector in terms of revenue is 2.1 % of GDP as compared to 2.8% in developed economies.

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REFORMS IN TELECOM SECTOR  Reforms in telecom sector began in 1980 with telecom manufacturing being opened for private sector followed by national telecom policy(ntp) in 1994 and 1999.  In 1990 telecom revolution in many countries which resulted in better quality of service with lower tariff rates force Indian policy makers to open up telecom sector for private players

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CLASSIFICATION OF TELECOM SECTOR

1. Fixed line telephony  Current market size of rs.30164 crore with 43 million lines.  BSNL and MTNL account for 90% revenue for basic services.  Private sector avilable in 18 circles and collectively account for 10% of revenue.  Private sector offer high end services like leased lines, isdn, videoconferencing as a result ARPU ( av. revenue per user is more for private players). PANKAJ GUPTA ICFAI NATIONAL COLLEGE AGRA

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CLASSIFICATION OF TELECOM SECTOR 1. Mobile telephony  There are 25 private companies providing cellular services in 19 telecom circles and 4 metro cities, covering 1500 towns across the country.  Presently, there are five private service operators in each area, and an state operator.  Almost 80% of the cellular subscriber base belongs to the pre-paid segment.  The dot has allowed cellular companies to buy rivals within the same operating circle provided their combined market share did not exceed 67 per cent.  Previously, they were only allowed to buy companies outside their circle. PANKAJ GUPTA ICFAI NATIONAL COLLEGE AGRA

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CLASSIFICATION OF TELECOM SECTOR 3. Internet Internet has become very easily accessible with cyber cafes.  There is no restriction on the number of internet companies and more than 185 companies are operational.  Internet telephony has been allowed officially from 1 april 2002.  The growing demand of corporates for applications such as electronic commerce, internet leased lines, ISDN, VPN etc is driving the growth of the internet services market. PANKAJ GUPTA ICFAI NATIONAL COLLEGE AGRA

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MARKET SHARE OF PRIVATE AND PUBLIC PLAYERS  The public players and the private players share the fixed line and the mobile segments.  Currently the public players have more than 60% of the market share.  Bharti airtel has the largest customer base with 31% market share, followed by hutch (vodafone) and bsnl with each holding 22% market share.  The value added services provided by the mobile service operators contribute more than 10% of the total revenue. PANKAJ GUPTA ICFAI NATIONAL COLLEGE AGRA

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KEY INDIAN COMPANIES • BSNL - Incumbent service provider and World's 7th largest

Telecommunications Company providing comprehensive range of telecom services in India

• Services include Wireline, CDMA mobile, GSM Mobile, Internet, Broadband, Carrier service, MPLS-VPN, VSAT, VoIP services, IN Services etc.

• MTNL - State owned operator covering the cities of Mumbai an Delhi • Provides both fixed and mobile services • Bharti Airtel - Integrated operator with presence in all segments • Leads the mobile segment in the country

• Reliance Communications - Largest player in India in the CDMA segment • Plans a GSM network

• Tata Teleservices - Integrated operator (with VSNL) with presence in all segments • Provides CDMA services in 20 circles

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TELECOM SERVICE PROVIDERS AND EQUIPMENT MAJORS • Has a 10% stake in Bharti telecom, an integrated service provider

• Represents the largest foreign investment in the telecom services

sector in India •IDEA operates in eight telecom “circles,” or regions, in Western India, and has received additional GSM licenses to expand its network into three circles in Eastern India -the first phase of a major expansion plan that it intends to fund through an IPO, according to parent company Aditya Birla Group

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MAJOR PLAYERS IN TELECOM SECTOR SERVICE PROVIDER

NO OF CDMA SUBSCRIBER

RELIANCE

2.7CR

TATA

1.07CR

NO OF GSM SUBSCRIBER

AIRTEL

3.37 CR

MTNL

24.98 LAKH

BSNL

2.44 CR

VODAFONE

2.44 CR

IDEA

1.3 CR

SPICE

25.56 LAKH

BPL

10.62 LAKH

AIRCEL

48 LAKH PANKAJ GUPTA ICFAI NATIONAL COLLEGE AGRA

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TECHNOLOGY USED IN TELECOM SECTOR 1.Gsm (global system for mobile communication) 2.Cdma (code division multiple access ) 3. Wireless local loop (WLL) 4. 3g technology

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Research Methodology    

1.Research Objectives To compare public and private telecom player on the bases of product/service features. To compare public and private telecom player on the bases of tariff plans. To compare public and private telecom player on the network and VAS (value added services). To compare public and private telecom player on the bases of customer services.

2. Research design  We have used explorative research design method as we have conducted a survey on customers to reveal the consumer behaviour towards telecommunication industry.  We have also used descriptive research design as we have described the trends and history of telecommunication industry based on the information from the existing sources. 3.Data Sources Primary data Questionnaires

Secondary data Journal and websites

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4. Questionnaire Design/ Formulation  We have used both Open ended and close ended questions. 

The users are interviewed through structured questionnaire.

5. Sample Design •Sample element/ unit: - we have interviewed 100 telecom customers. •Extent: - Delhi and NCR region. •Time frame: - 14 days •Sampling technique: - Non probability sampling technique (convenience sampling). •Sample size-100

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Findings/conclusion  After doing the study we can conclude that yes the Gap exist there in telecommunication industry. Consumers have a lot of expectations from their service provider that are not performed or deliver by their companies. we have conclude that consumer expect from public companies to improve its customer care service that can be found busy most of the times. Now users of public telecom companies have rated it as a best company for its post paid services but still they are not satisfied with some of company’s strategies. So this is the Gap between BSNL users and company performance. Then we have example of Delhi market leader- private sector. Users of private telecom are not satisfied with company fixed line services and their post paid service as they charge more as compared to the public companies. •Private company’s performance is good but Gap exists not just with a single company, but with all the companies in the industry. Various VAS (Value Added Services) provided by company does not seems to be Satisfying their users. Customers are not satisfied with SMS pack that is perceived costlier as Compare to public companies SMS packs. Users also found monthly low call rate pack costlier as well.

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•

Private players in the telecom industry are performing far better than the public players i.e., MTNL and BSNL. Private company in the industry is found to be delivering as per their customer expectations. That’s why customers have rated it not as satisfactory but excellent. But one has to pay more for superior service. Price is the potent Gap exists in between private company and public companies. But it should be noticed that Effective tariffs have dropped from over Rs 14 a minute to Re 1, bringing the phone within reach of people even below the middle-class.

 Looking at the competition trend, it seems that soon in future, rural schools will be having broadband and internet facilities as their part of studies as well as routine lives. There is availability of internet facility in many villages. But soon it will be taught in secondary and higher secondary schools in all villages and various technologies like 3G and various VAS have made the market more competitive and made easy for the users. Implementation of number portability and 3G technology have solved many problems and made easy and comfortable for the customers

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Limitations Carrying the survey was a general learning experience for us but we also faced some problems, which are listed here:

•The market of Telecommunication is too vast and it is not possible to cover each and every customers and dealers in the available short span of time. •Respondents were reluctant to discover complete and correct information. •Some of the respondents were using the service first time and they were not able to properly understand the terminology used in the questionnaire. •Due to human behaviour information may be biased.

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Recommendations After the complete analysis of entire STUDY we put forward a set of recommendations which are a follows: .1.Depending on the market conditions / competition from cellular or WLL-mobile service providers and also to suit local conditions, there should be flexible pricing mechanism (either at central or local level). 2.Private companies should immediately shift to 3g service replacing 2g network service. This will improve the quality of service to desired level and provide simultaneous integration with the nationwide network. The special distribution of the transmission. Towers should be increased to avoid “no signal pockets” 3.Public companies should establish widespread and conspicuous distribution to match that of the competitors. The distribution network shall make the product visible and available at convenient locations. 4.Public companies has to concentrate on its customer care service as most of the respondents are Found dissatisfied with company service. Even some of them have called it the worst customer care service provider in the market. But it is also rated as best company for non-usage of unfair means. So company can be competitive in the market by just investing in their customer care service. Users also found not satisfied with the network service to some Extent. So it can also improve it.

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5. Private companies is the market leader of the area according to our survey as most of our respondents are using private services. Company is also providing a good network service. But company users does not found satisfied with the fixed line service as they found it costly. And some of also said that customer care representatives are not knowledgeable and courteous as well. So company should improve its post-Paid customer care service.

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Bibliography Journal •Vatsal Goyal, the Indian Telecom Industry, IIM Calcutta, 2007

Websites: 1.

www.trai.gov.in

2. WWW.PDFCOKE.COM 3http://images.google.co.in/images 4. WWW.GOOGLE.COM

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Thank you

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