A Research Report On INDIAN TELECOM INDUSTRIES

October 2011 A Research Report On INDIAN TELECOM INDUSTRIES By Islami Tijara Research Team © Copyright Reserved 2011 www.islamijitara.com October...
Author: Patricia Wilson
12 downloads 1 Views 870KB Size
October 2011

A Research Report On

INDIAN TELECOM INDUSTRIES

By Islami Tijara Research Team © Copyright Reserved 2011 www.islamijitara.com

October 2011

Indian Telecom Industry The Indian telecom Industry is one of the fastest-growing telecom markets in the world, with a huge potential to expand in the wireless segment. The Indian Telecommunications network with 892.55 million connections (as on July 2011) is the third largest in the world and the second largest among the emerging economies of Asia. The sector is growing at a speed of 45% during the recent years. This rapid growth is possible due to various proactive and positive decisions of the Government and contribution of both by the public and the private sectors. The telecom services have been recognized the world-over as an important tool for socio-economic development for a nation. It is one of the prime support services needed for rapid growth and modernization of various sectors of the economy. The Indian telecommunication sector has continued to record remarkable success throughout the year and has emerged as one of the key sectors that have been accountable for the growth of the Indian economy. The Indian telecom sector has shown robust growth during the past few years. It has also undergone a substantial change in terms of mobile versus fixed phones and public versus private participation. Market size The number of telephones has increased from 54.63 million as on 31st March, 2003 to 892.55 million as on 31st July, 2011. The subscription base in Wireline market is declining in contrast to wireless segment. The fixed line subscribers decreased from 41.33 million in 31st March, 2003 to 34.18 million in July, 2011. Public sector undertakings BSNL and MTNL have a major share of the wireline market covering about 85 per cent. MTNL is present in Delhi and Mumbai, while BSNL covers the rest of the country.

© Copyright Reserved 2011 www.islamijitara.com

October 2011 The unprecedented growth witnessed by Indian telecom sector has been possible because of wireless revolution. Wireless segment in India is much larger than the wireline and the major driver of the Telecom Industry. Wireless segment includes GSM & CDMA services. GSM continues to grow at a faster rate and the gap between the growth rates of GSM & CDMA has been widening. Wireless subscribers increased from 13.3 million as on 31st March, 2003 to 858.37million as on July, 2011. The Indian telecom sector is largely dominated by private operators that control a share of 87.9 per cent share of the entire sector. Among the top players in the telecom sector, Bharti Airtel owns the largest share at 19.89 per cent, followed by Reliance (16.86 per cent), Vodafone (16.66 per cent), Idea (11.20 per cent) state-owned BSNL (11.08 per cent). Reliance (22.80 per cent) and Bharti Airtel (22.63) has recorded the fastest growth rate in the month of July 2011. Vodafone (22.35 per cent), Uninor (15.86 per cent), Idea (15.03 per cent) and Aircel (9.12 per cent) have also recorded decent growth rate figures for the month of July, 2011, according to Telecom Regulatory Authority of India (TRAI) database. The number of telephone subscribers in India increased to 892.55 Million at the end of July, 2011 from 885.99 Million at the end of June 2011, thereby registering a growth rate of 0.74%. As far as broadband connections are concerned, The broadband subscribers grew from a meager 0.18 million to 12.50 Million in July-2011. It’s market share has been increasing every quarter. It is expected that by 2012 total broadband subscribers would hit 30 million.

© Copyright Reserved 2011 www.islamijitara.com

October 2011 Service Provider wise Market Share as on 31.07.2011

© Copyright Reserved 2011 www.islamijitara.com

October 2011 Service Providers’ share in net additions during the month of July 2011

Trend in Tele-density Tele-density in the country increased from 5.11% in 2003 to 74.44 % in July 2011. In the rural area teledensity increased from 1.49% in Mar 2003 to 35.93% in July 2011 and in the urban areas it is increased from 14.32% in Mar 2003 to 163.83 % in July 2011.This indicates a rising trend of Indian telecom subscribers.

© Copyright Reserved 2011 www.islamijitara.com

October 2011

Growth Drivers, Trends and Services 3G & Broadband Wireless Services (BWA): With the arrival of 3G, telecom companies are enable to offer additional value added services(VAS) such as high resolution video and multimedia services in addition to voice, fax and conventional data services with high data rate transmission capabilities. Broadband Wireless Services (BWA) will become a predominant platform for broadband roll out services. 3G will not only lead to introduction of new VAS applications but will also give a boost to initiatives an new revenue streams such as m-education, m-governance, telemedicine and most importantly will become the backbone for the broadband penetration. There will be significant increase in the number of persons accessing the internet from their mobile platforms. © Copyright Reserved 2011 www.islamijitara.com

October 2011 Mobile Number Portability (MNP):Since the national launch, MNP has hit the 10 million mark thus around 2.22 million subscribers are porting on a monthly basis. It has affected the churn rate of operators; however, the figures are not as significant as expected. In 2011-12, operators would witness stabilization of churn owing to MNP as they would try to counter it by means of improved services to their subscribers. Introduction of MNP further increases the already intense competition and will keep service providers on their toes to attract and retain customers. There will be a greater focus on quality and service to retain subscribers. Shift of Focus from Urban to Rural: With rural teledensity at about 33 % as compared to urban teledensity of 157.32 %, the next wave of growth will come from rural areas. Broadband will get a boost with the launch of the National Broadband Plan. Operators have already started focusing on the rural market. Financial Services on Mobiles: There will be a significant increase in the banking and other financial services, as well as other payments being offered on the mobile platform. With dedicated efforts in the implementation of allocation of the UID, this has the potential to facilitate financial services significantly in the coming year. Brand differentiation: One of the key differentiator between operators would be the VAS offerings they have in their portfolio and the quality of service they are providing. This is expected to gain momentum, with the introduction of MNP and 3G.

© Copyright Reserved 2011 www.islamijitara.com

October 2011 Telecom Sector Company Snapshot Bharti Airtel Bharti Airtel is the largest GSM (Global System for Mobile Communication) mobile service provider in India and the 5th largest integrated telecom operator in the world. It provide telecommunication services in all the 22 licensed jurisdictions in India and in Sri Lanka. It has presence in Bangladesh and Africa. The company operates in four strategic business units, namely Mobile, Telemedia, Enterprise and Digital TV.

Key Financial of Airtel

38,016

35,610

34,014

Net Sales PBIDT 13,260 9,067 7,717

201103

13,925 10,131 9,426

PBIT

13,516 10,310

PAT

7,744

201003

200903

© Copyright Reserved 2011 www.islamijitara.com

October 2011 IDEA Cellular IDEA Cellular Ltd is a leading GSM mobile services operator in India with over 72 million subscribers, under brand IDEA. IDEA Cellular limited is third largest operator (revenue term) in the country with a revenue market share of approximately 14%. Idea operates in all 22 telecom circles.

Idea Cellular 15,333

11,850 9,857

Net Sales PBIDT PBIT

PAT 3,284

3,003 1,280

201103

845

1,732 1,054

201003

3,248 2,005 1,001

200903

© Copyright Reserved 2011 www.islamijitara.com

October 2011 Reliance Communications Reliance Communications Limited is India's largest private sector information and communications company, with over 100 million subscribers. Rcom operates throughout the country and across the spectrum of wireless, wireline and long-distance voice, data, video and internet communications services. The operator is split into three business units, namely Wireless, Global and Broadband. Reliance offers wireless services through its CDMA and GSM networks.

KEY FINANCIALS OF RCOM 13,611

12,291

12,130

Net Sales

7,784

PBIDT 5,851

PBIT 4,803

PAT

3,244 1,733

1,581

479

(13) 201103

(758)

201003

200903

© Copyright Reserved 2011 www.islamijitara.com

October 2011 The telecom sector in India is a major contributor to the economy and is a vital employment generating industry for thousands of professionals. With a direct impact on the socio economic structure of the country, the sector has been able to successfully surpass the targets set up by the policy makers. The dynamism displayed by the government and the private sector for uplifting the telecom sector has been recommendable and speaks volumes about the efforts behind the success story. With the initiation of enhanced technology (3G, BWA) and consumer services (MNP); introduction of utility MVAS to the endconsumers, and various regulatory and policy reforms (National Broadband Plan, Telecom Equipment Manufacturing Policy, and NTP-2011), India seems to be well poised to witness the sustainable growth in the sector.

© Copyright Reserved 2011 www.islamijitara.com