1.Service Operation systems and strategies of Telecommunication Sector Presented by:1

2. Agenda Telecom Sector An overview Telecom Sector in India Telecom market Operators Share Indian Telecom market Analysis Telecom Service Management Types of Product Major Changes in telecom sector Strategic Segmentation Administration & Control Telecom Policies Future Strategies Health effect of Cell phones Sector analysis case Airtel 2 3. Telecom Sector An Overview Telecommunication An important tool for Social economic development One of the Prime support service Impact on Economy Multiplier effect One of the fastest growing markets in the worldMobile Subcriber base % Share (World)Global Scenario : Generate USD 1.4 Trillion (Year 2009) Asia Pacific region : Expecting highest growth in next 5-10 years 16% increase in India & China 12% increase in Latin America China Largest Telecom operator 50% Rural market Japan 3rd largest : 30 Million broadband users after US & China19%12% 62%China7%IndiaUSAOthers 3 4. Indian Telecom Sector One of the fastest growing market in the world 787.29 million Connections 2nd largest wireless network 18 million connections being added every month Share of Wireless phones 95.54% Overall Tele-density 66.17% (Urban 148%, Rural 31.22% Steadily increasing) Total Broad band connections 10.74 million Advanced Technology GSM, CDMA, WLL, 3G, 4G and upcoming 5G4 5. Market share of wireless service operators in India Operators Share Private operators hold 88.49 percent of the wireless market share (based on subscriber base) where as BSNL and MTNL, the two PSU operators hold only 11.51% market share, according to the Telecom Regulatory Authority of India (TRAI). This is a list of Indias top 10 wireless service providers market shares as on 31st August 2012.Bharti Reliance Vodafone BSNL Tata Idea Aircel MTNL Others1% 1% 5%23%11% 9%19%13% 18%Source : TRAI5 6. Analyzing Indian Telecom Market Average Revenue per user (ARPU)264 INR / sub / monthMinutes of usage per user per month (MoU)500 Min / sub /monthTariff RatesReducing Margin Coverage Subscriber Base Competition260 million 84% Privatization Source: KPMG6 7. Telecom Service Management Service Management Reducing Operating Cost7 8. Type of Products Global System for Mobile Communications (GSM) Code division multiple access (CDMA)Worldwide Interoperability for Microwave Access (WiMAX) Enhanced Data rates for GSM Evolution (EDGE) High Speed Packet Access (HSPA) Wi-FiGeneral packet radio service (GPRS) 8 9. Major Changes in the Telecommunications Industry Changes in regulationsChanges in competitionRequired changes in the skills and resources of telecom operatorsChanges in markets and customersTechnological changes 9 10. Deregulation is bringing about: Loss of market share Reduction of tariffs and lower profit margins The development of new telephone services and uses The phenomenon of the increasing segmentation of markets The globalisation of markets and competition On-going changes in competitive environments, technologies and markets A market-place increasingly oriented towards the search for"tailor-made" solutions10 11. Strategic segmentation of the operators activities Types of servicesSystems consulting and engineering/out-sourcing Audio-visual services Information services Telecommunications services Transmission/fixed networkMobile FixedAnalogic Digital Transmission/Radio Analogic + Optical Digital + Intelligent Satellite linksProduction of contents Broadcasting Production of contents Distribution of contents Data Voice Pictures Data VoiceLarge international companies OperatorsProfessions, Large small companies businesses multilocationsTypes of ClientsTechnologies11 12. Administration and Control Deals with various aspects of telecommunications Telecommunication services, R&D, standardization ofequipment, and international relations C-DOT: Generation of digital switching items DOT wings: i) TEC (ii) WPC Private providers: in 1992 for independent regulation TRAI to regulate telecom services, including fixation/revision of tariffs for telecom services12 13. Telecom Policies New Telecom Policy 1999 (NTP-99) Permitting of interconnectivity and sharing of infrastructure Separation of the policy and licensing functions of DoT NLD & ILD for voice and data traffic providers USO Fund in April 2002 for internet, Voice Mail, and Email service NFAP-2002 cater to the conflicting demands on the spectrum 13 14. Policies Reforms have involved more than just privatization Market liberalization and introduction of new laws and regulations Regulations, regulators and regulated industries interact in complicated ways that in turn affect the development of the industry Close relationship between the nature of a regulatory regime and investment behavior of the firms subject to that regime Discuss this by providing consistent set of indicators that allow for ananalysis industry performance (from a regulatory, investment and industry point of view)14 15. Future strategies Acquiring other telecom companies Diversifying telecom services Developing new value added services Need of understand process of change Global circumstances and impact15 16. The Health Effects of Cell Phones What are the possible health effects caused by using cell phones? What kind of energy do cell phones emit, and does this emission cause cancer? Why RF energy is a concern? Is the risk of negative health effects from cell phones greater if you live closer to a tower? Is the risk of negative health effects from cell phones greater within children?16 17. Lets consider a case study and various points discussed earlier:AIRTEL A Case Study 17 18. Porters Five Force Model Potential EntrantsNew EntrantsBuyer PowerIndustry RivalrySupplier PowerSubstitute (Threat)Competitive Rivalry for Airtel o The Rivalry in and will increase players industry.Competitive India is high continue to as new enter theo The Competition is price and quality based. The entry of every new customer brings with competition. o Lets have a look 18 at 19. Bharat Sanchar Nigam Ltd. The seventh-largest telecommunication comp having wide range of services in India, such as wire line, CDMA mobile, GSM mobile, internet, broadband, carrier, MPLS Competitive strategyRural Penetration BSNL is the largest operator in basic services in India With its cellular services helping it to establish its presence as the largest operator in rural areas BSNL is playing a leadership role in developing the telecom infrastructure in rural areas It has been successful in increasing its cellular subscriber base by pioneering its services in the rural terrain Its services cover the whole of India, except Delhi and Mumbai, which are covered by MTNL, the other stateowned playerLow Cost Strategy BSNL is a low-cost service provider of many services This strategy has helped BSNL in penetrating the Indian telecommunication market19 20. Reliance Communications Reliance Communications, previou sly known as Reliance InfocomCompetitive strategy Initiated mobile data services through its R world mobile portalDigital revolution in the Indian telecom industryReliance currently offers its services in 340 townsIntegrated Service From the beginning, Reliance believed in providing integrated communication services to its customersEight circle footprintsLarge Distribution Network Reliance has created the largest chain of digital communication stores Retail outlets, sales agents and electronic recharge outlets Other Competitors being Idea, MTNL, Vodafone, Telenor, Spice, Orange Overall Competitive Rivalry is high in the Mobile Sector20 21. Supplier Power Network Equipment Nokia Siemens, Ericsson, Huawei The power of these suppliers are high and may impact the growth plan of the operators if supplies are not smoothTower Providers Towers remains a problem due to few Tower provider Bargaining power of Tower providers if HighHandset Suppliers Nokia, Samsung, LG, Sony, iPhone The bargaining power of Handset Suppliers is less Overall we can make out that the key supplies powers are high for Mobile Industry 21 22. Buyer PowerSwitching cost is low.Number portabilityThe Voice and message based services are moving toward a commodityThe customers are demanding more value for money which has lead toIntroduction of pay per second plans.Buyers are wanting more and more value added service at cheaper pricesHence the companies have to now focus on Customer Delight and not Customer Satisfaction22 23. Threat of Substitut esThe VOIP is getting popular for E.g. Skype, Vonage etc. Video Conferencing CDMAPotential for New Entrants The potential for new entrant is also highThe sharing business has reduced the capital The government is also requirement and thus issuing new licenses in bringing down the the current circles capital requirement for new player 23 24. Opportunities The Rural Landscape: Massive opportunity for Airtel to expand its customer base Rural Household comprise of 70 % of Indias Population. The growth in Rural segment is currently 8-10% per month New Technologies and Paradigms: 3 G ,4G and BWA etc provides a big opportunity to the company Strong Strategic Partnership for technologies: Singtel, which has helped in providing quality services to the customer due to technology transfer and technology partners who also drive development and solutions Value Added Services: These services bring both Value to customers and operators24 25. Threats Increased Competition may reduce share and /or Revenue: Operators migrating to GSM from CDMA technology. The market also saw entry of international and national long distance pressure of marketing expenditure in the coming year Substitutes: VOIP for e.g. Skype, Vonage etc. these services are a big threat to international long distance calls. 25 26. 26