Telecommunications Industry in India
The telecom sector in India is a booming market now. India is the world’s second largest mobile phone user with a total subscriber base of 894 million as of December 2011, and the third largest internet user with a subscriber base of 121 million as of December 2011. The total market values according to experts are $75.88 billion with a y-o-y growth rate of 26% and generate employment for about 10 million people. The services sector generates revenue of about $62.31 billion (FY 2010-2011) and the equipment sector generates about $25.75 billion.
Factsheet as of Dec, 2011:
Particulars | Wireless | Wired | Total |
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of England to operate telephone exchanges at Calcutta, Bombay, Madras and Ahmedabad with a total of 93 subscribers. The first wireless telegraph was established in 1902 between Sagar Islands and Sandheads. In 1927 the first international radio-telegraph system was introduced in India between the UK and the Indian Dominion. In 1933 radio-telephone link was established between India and UK.
Industry in the post-independence era:
The industry saw a slow but steady growth in telephone as it was still seen by most of the people as a luxury item. The growth figures below stakes the claim
Major milestones in telecom industry post-independence are shown below:
* 1953 – 12 channel carrier system introduced.
* 1960 – First STD line commissioned between Lucknow and Kanpur.
* 1975 – PCM introduced between Bombay and Andheri.
* 1976 – Digital microwave junction introduced.
* 1979 – Optical fibre commissioned in Pune.
* 1980 – First satellite communication earth station established at Sikandrabad (UP).
* 1983 – First analog Stored Program Control exchange for trunk lines est. at Mumbai.
* 1984 – C DOT est. for indigenous development and production of digital exchanges.
* 1995 – First mobile telephone service started on non-commercial basis on 15 August 1995 in Delhi. Internet services were introduced in Delhi, Bombay, Calcutta, Madras and Pune.
The telecom industry comprises of complex network services like telephones, mobile phones and internet. In this report we have used two methods to analyse the telecom industry environment and understand its dynamics. The two methods are 1) SWOT analysis and 2) Porter’s 5 forces analysis.
In the traditional SWOT analysis the Strengths, Weaknesses, Opportunities and Threats are analysed to arrive at a conclusion whether the industry is profitable/will be profitable in future or not.
High Customer Potential: The total population of India is 1205 million (July 2012 estimate). The overall teledensity as per factsheet for wireless telecom is 74.15 and 2.71 for wireless telecom.
The teledensity of the rural population for wireless and wired telecom service is only 36.56 and 0.92 which shows that not all households have access to telecom services. This shows a large customer potential. Even the teledensity for fixed wired telephony for urban users is 6.85 whereas the wireless telephony is 161.01. This shows that most people favour mobiles to fixed land lines. But in any case the growth potential is very high in India.
High growth rate: India has shown a very high growth rate in the telecom services sector. The following data shows the growth of various aspects of the Telecom industry.
The CAGR of Wired, Wireless, Internet and Broadband are -3.115%, 37.51%, 16.41% and 39.04% respectively. Although the wired telecom services have shown a negative growth but the other services like Wireless telecom, Internet and...