1. PUNJAB TECHNICAL
UNIVERSITY
Assignment on
SWOT Analysis
Of
“Indian Telecom Industry”
WITH SPECIAL REFERENCE OF “RETAIL INDUSTRY”
In partial fulfillment of the requirement of two years full time
Masters of Business Administration (MBA) Program (2009-
2011)
Of
Asian Business School, Noida 201301
UNDER THE GUIDENCE OF: SUBMITTED BY:

2. SUSHIL KUMAR HEERA SINGH
3rd Semester
ACKNOWLEDGEMENT
I am indebted to a multitude of persons who have provided me with
valuable help during our endeavor of research. The project would not have
seen the illumination of the day without the efforts of the many who
managed the show in the wings. I am thankful to all people who have put in
great efforts and gave me guidance for the successful completion of the
project.
I am indeed grateful to Sushil Kumar for providing me the guidance,
advice, constructive suggestions and faith in my ability inspired to perform
well who gave me a valuable opportunity of involving me in studying this
project. Preparing a project of this nature is an arduous task and I am
fortunate enough to get support from a large number of people to whom we
shall always remain grateful.
Finally, I thank all those who directly and indirectly contributed to this
project.

3. Heera Singh
Contents
1. INTRODUSTION OF INDUSTRY ANALYSIS
2. PROFILE OF RETAIL INDUSTRY
• Growth of Industry
• Structure of Industry
• Nature of the Product
• Nature of Competition
• Government Policies
3. SWOT ANALYSIS
• Strengths
• Weaknesses
• Opportunities
• Threats
4. CONCLUSIONS
5. BIBLIOGRAPHIES

4. TELECOM INDUSTRY

5. INDUSTRY ANALYSIS
INTRODUCTION!
All industry is a group of firms that have similar technological structure of
production and produce similar products or services. Companies are
distinctly classified to give a clear picture about their manufacturing process
and products or services.
Industries can be classified on the basis of the business cycle, that means,
according to their reactions to the different phases of the business cycle.
They are classified into growth, cycle, and defensive cyclical growth
industry.
GROWTH INDUSTRY

6. The growth industries have special features of high rate of earnings and
growth in expansion, independent of the business cycle. The expansion of
the industry mainly depends on the technological change.
CYCLICAL INDUSTRY
The growth and the profitability of the industry move along with the
business cycle. During the boom period they enjoy growth and during
depression they suffer a set back
DEFENSIVE INDUSTRY
Defensive industry defies the movement of the business cycle
CYCLICAL GROWTH INDUSTRY
This is a new type of industry that is cyclical and at the same time growing.
INDUSTRY LIFE CYCLE
The industry life cycle theory is generally attributed to Julius Grodensky.
The life cycle of the industry is separated into four well defined stages such
as
-Pioneering Stage
-Rapid Growth Stage
-Maturity and Stabilization Stage
-Decline Stage

7. POINEERING STAGE
The prospective demand for the product is promising in this stage and the
technology of the product is low. The demand for the product attracts many
producers to produce the particular product .There would be severe
competition and only fittest companies survive this stage. The producers try
to develop brand name, differentiate the product and create a product
image. This would lead to non-price competition too. The severe
competition often leads to the change of position of the firms in terms of
market shares and profit. In this situation, it is difficult to select companies
for investments because the survival rate is unknown.
RAPID GROWTH STAGE
This stage starts with the appearance of surviving firms from the pioneering
stage. The companies that have withstood the competition grow strongly in
market share and financial performance. The technology of the production
would have improved resulting in low cost of production and good quality
products. The companies have stable growth rate in this stage and they
declare dividend to the shareholders. It is advisable to invest in the shares
of other companies. In this stage growth rate is more than the industry’s
average growth rate.
MATURITY AND STABLISATION STAGE
In the stabilization stage, the growth rate tends to moderate and the rate of
growth would be more or less equal to the industrial growth rate of the
gross domestic product growth rate. Symptoms of obsolescence may

8. appear in the technology. To keep going technological innovations in the
production in process and products should be introduced. The investors
have to closely monitor the events that take place in the maturity stage of
industry.
DECLINING STAGE
In this stage, demand for the particular product and the earnings of the
companies in the industry7 decline. The specific feature of the declining
stage is that even in the boom period; the growth of the industry would be
low and decline at a higher rate during the investment in the shares of
these types of companies leads to erosion of capital.
CONSIDERABLE FACTORS OF INDUSTRY ANALYSIS
GROWTH OF THE INDUSTRY
The historical performance of the industry in terms if growth and profitability
should be analyzed. Industry wise growth is published periodically by the
Center for Monitoring Indian Economy. The past variability in return and
growth in reaction to macro economic factors provide an insight into the
future. Even though history may not repeat in the exact manner, looking
into the past growth of the industry, the analyst can predict the future.
COST STRUCTURE AND PROFITABILITY

9. The cost structure, that is the fixed and variable cost, affects the cost of
production and profitability of the firm. Higher the fixed cost component,
greater sales volume is required to reach the firm’s breakeven point. Once
the breakeven point is reached and the production is on the track, the
profitability can be increased by utilizing the capacity to full. Once the
maximum capacity is reached, again capital has to be invested in the fixed
equipments. Hence, lower the fixed cost, adjustability to the changing
demand and reaching the break even points are comparatively easier.
NATURE OF THE PRODUCT
The products produced by the industries are demanded by the consumers
and other industries. The investor has to analyse the conditions of related
goods producing industry and the end user industry to find out the demand
for industrial goods.
In the case of consumer goods industry, the change in the consumers’
preference, technological innovations and substitute products affect the
demand.

10. NATURE OF THE COMPETITION
Nature of the competition is an essential factor that determines the demand
for the particular product, its profitability and the price of the concerned
company scrip. The supply may arise from indigenous producers and
multinationals. If too many firms are present in the organized sector, the
competition would be severe. The competition would lead to a decline in
the price of the product. The investor before investing in the scrip of a
company should analyze the market shares of the particular company’s
product and should compare is with the top five companies.
GOVERNMENT POLICY
The government policies affects the very, never of the industry and the
effects differ from industry to industry. Tax subsidies and tax holidays for
export oriented products. Government regulates the size of the production
and the pricing of certain products. When selecting an industry, the
government policy regarding the particular industry should be carefully
evaluated. Liberalization and deli censing have brought immense threat to
the existing domestic industries in the sectors.
RESEARCH AND DEVELOPMENT

11. For any industry to survive the competition in the national and international
markets, products and production process have to be technically
competitive. This dependent on the research and development in the
particular industry. Economies of scale and new market can be obtained
only through research and development. The percentage of expenditure
made on research and development should be studied diligently before
making an investment.
SWOT ANALYSIS
The above mentioned factors themselves would become strengths,
Weakness, opportunity and threat (swot) for the industry. Increase in the
demand for the industry’s product becomes its strength; presence of
numerous players in the market, that competitor becomes the threat to a
particular company in the respective industry. The progress in the research
and development in the particular industry is an opportunity and entry of
multinationals in the industry and cheap imports of the particular products
are threat to that industry. In this way the factors have to be arranged and
analyzed in swot analysis.

12. TELECOM IN INDIA
The Indian telecommunications market has been displaying sustained high
growth rates. Riding on expectations of overall high economic growth and
consequent rising income levels, it offers an unprecedented opportunity for
foreign investment. A combination of factors is driving growth in the
telecom market, promising rich returns on investments.
Over the past 10 years, India has registered the fastest growth among
major democracies, having grown at over 7 per cent in four years during
the 1990s. It represents the fourth largest economy in terms of Purchasing
Power Parity. According to a recent Goldman Sachs report, over the next
fifty years, Brazil, Russia, India and China - the BRIC economies- could
become a much larger force in the world economy. It reports, “India could

13. emerge as the world’s third largest economy and of these four countries;
India has the potential to show the fastest growth over the next 30 to 50
years”. The report also states that, “Rising incomes may also see these
economies move through the ‘sweet spot’ of growth for different kinds of
products, as local spending patterns change. This could be an important
determinant of demand and pricing patterns for a range of commodities”.
The share of the services sector as a percentage of total GDP is also
predicted to rise from the current 46 per cent to about 60 per cent by 2020.
Population projections from the Planning Commission of India suggest that
the share of the working age population (15-64 years) in total population
will grow from the current 59 per cent to about 65 per cent, translating into
882 million by year 2020.According to the Vision 2020 document for the
Planning Commission of India, the country will witness continued
urbanization. The urban population is expected to rise from 28 per cent to
40 per cent of total population by 2020.Future growth is likely to be
concentrated in and around 60 to 70 large cities, each having a population
of one million or more.Over the years, spending power has steadily
increased in India. Between 1995 and 2002, nearly 100 million people
became part of the consuming and rich classes. Over the next five years,
180 million people are expected to move into the consuming and very rich

14. classes. On an average, 30-40 million people are joining the middle class
every year, representing huge consumption spending in terms of the
demand for mobile phones, televisions, scooters, cars, credit goods and a
consumption pattern associated with rising incomes.
NATURE OF THE COMPETITION
MARKET PLAYERS:

15. No. Service Total sub Market Trends
Providers figures share (%)

16. 1. BHARTI AIRTEL 58037920 25.40 Integrated Telco, with presence in all
sectors - Cellular, Basic, National Long
Distance (NLD) & International Long
Distance (ILD). Currently offering only
GSM based cellular services. No CDMA
based cellular services being offered.
2. RELIANCE 52540000 22.99 Operating GSM wireless services in 7
COMMUNICATIO circles and subsequently acquired
NS Madhya Pradesh circle from RPG.
Reliance is currently focusing on rollout
of CDMA based wireless services.
3. VODAFONE 44126243 19.31 Pure play GSM mobility player offering
ESSAR cellular services in 16 circles. Has been
working on a model of being associated
with the high ARPU subscribers
4. BSNL 34251334 14.99 Incumbent operator, virtual monopoly in
the basic services. Very strong NLD
operator; and, has been able to quickly
ramp up GSM subscribers due to
nationwide network reach. Pan country
presence in both basic (except Mumbai
and Delhi) and cellular services.
5. IDEA 24001573 10.50 A 3 way GSM mobility joint venture
between Tatas, Birlas and AT&T Wireless
offering cellular services
in 11 circles.
6. AIRCEL 6805066 2.98 Operates only in Metro(Chennai) and
Circle A(Tamil Nadu)
7. SPICE 4210669 1.84 Pure play GSM based mobility player
offering services in 2 circles – Punjab
and Karnataka.

17. 8. MTNL 3241851 1.42 Integrated incumbent operator also
offering GSM based mobility in Delhi and
Mumbai.
9. BPL 1294762 0.57 Pure play cellular operator along with
Spice and Aircel.
the demand in the telecom industry in year 2007 is around 230 million
now we will see does the main players in the industry has the
capacity to fulfil the appetite of the demand side.
Here we are considering only the top 2 companies which almost
consist 50% of the market shares.
• Bharti Airtel
• Reliance communications

18. About ReliAnce infocomm:-
The Late Dhirubhai Ambani dreamt of a digital India — an India where the
common man would have access to affordable means of information and
communication. Dhirubhai, who single-handedly built India’s largest private
sector company virtually from scratch, had stated as early as 1999: “Make
the tools of information and communication available to people at an
affordable cost. They will overcome the handicaps of illiteracy and lack of
mobility.” It was with this belief in mind that Reliance Communications
(formerly Reliance Infocomm) started laying 60,000 route kilometers of a
pan-India fibre optic backbone. This backbone was commissioned on 28
December 2002, the auspicious occasion of Dhirubhai’s 70th birthday,
though sadly after his unexpected demise on 6 July 2002. Reliance

19. Communications has a reliable, high-capacity, integrated (both wireless
and wire line) and convergent (voice, data and video) digital network. It is
capable of delivering a range of services spanning the entire Infocomm
(information and communication) value chain, including infrastructure and
services — for enterprises as well as individuals, applications, and
consulting. Today, Reliance Communications is revolutionizing the way
India communicates and networks, truly bringing about a new way of life.
Vision:-India’s leading integrated telecom company Reliance
Communications is the flagship company of the Anil Dhirubhai Ambani
Group (ADAG) of companies. Listed on the National Stock Exchange and
the Bombay Stock Exchange, it is India’s leading integrated
telecommunication company with over 60 million customers. Our business
encompasses a complete range of telecom services covering mobile and
fixed line telephony. It includes broadband, national and international long
distance services and data services along with an exhaustive range of
value-added services and applications. Our constant endeavor is to
achieve customer delight by enhancing the productivity of the enterprises
and individuals we serve. Reliance Mobile (formerly Reliance India Mobile),
launched on 28 December 2002, coinciding with the joyous occasion of the
late Dhirubhai Ambani’s 70th birthday, was among the initial initiatives of

20. Reliance Communications. It marked the auspicious beginning of
Dhirubhai’s dream of ushering in a digital revolution in India. Today, we can
proudly claim that we were instrumental in harnessing the true power of
information and communication, by bestowing it in the hands of the
common man at affordable rates. We endeavor to further extend our efforts
beyond the traditional value chain by developing and deploying complete
telecom solutions
Board of director:-
Shri Anil D. Ambani – Chairman
Prof. J Ramachandran
Shri S.P. Talwar
Shri Deepak Shourie
Shri A.K.Purwar

21. BHARTI AIRTEL
We are one of Asia’s leading providers of telecommunication services with
presence in all the 22 licensed jurisdictions (also known as Telecom
Circles) in India, and in Srilanka. We served an aggregate of 133,708,496
customers as of April 30, 2010, in India; of who 130,616,487 subscribe to
our GSM services and 3,092,009 use our Telemedia Services either for
voice and/or broadband access delivered through DSL. We are the largest
wireless service provider in the country, based on the number of customers
as of April 30, 2010. We offer an integrated suite of telecom solutions to our
enterprise customers, in addition to providing long distance connectivity

22. both nationally and internationally. We also offer DTH and IPTV Services.
All these services are rendered under a unified brand “Airtel”.
The company also deploys, owns and manages passive infrastructure
pertaining to telecom operations under its subsidiary Bharti Infratel Limited.
Bharti Infratel owns 42% of Indus Towers Limited. Bharti Infratel and Indus
Towers are the two top providers of passive infrastructure services in India.
Partners
Mobile Services Nokia Siemens, Ericsson, Huawei
Network
Equipment Telemedia & Long Nokia Siemens, Juniper, Cisco,
Distance Services Alcatel Lucent, ECI, Tellabs
Information Technology IBM
IBM Daksh, Hinduja TMT,
Call Centre Operations Teleperformance,
Mphasis, Firstsource & Aegis
Equity Partner {Strategic} Singtel

23. SUNIL MITTAL…..
SWOT Analysis
Strengths
• Strong mobile growth(around 10%) , with latest technology being
offered at faster pace
• An attractive business environment witnessed by number of foreign
players entering Indian market
• A vast untapped rural population which needs telecom services at
their fingertips
Weaknesses

24. • Wireless business segment is growing faster than wire line and more
demand is coming for pre-paid services
• The falling SIM card, lower tariff plan led to lower APRU
• Delayed implementation of key policies because of dispute among
TRAI, telecom ministry
Opportunities
• All of the providers are keen to provide more content which provides
great opportunity for content providers
• Regulator has recommended that foreign player can participate
without any local partner
• The government will cut the license fee by 33% for those operators
which has over 95% residential coverage
Threats
• 3 G spectrum charges are more and which will have negative impact
on demand for licenses
• Due to price war , APRU is falling and further deterioration will lead to
significant decline
in top line growth

25. • Capacity constraint may hamper the expected growth in Mobile
segment
• MNP will become reality in 2010, it will add further pressure to
operator to retain the
Existing customer
CONCLUSION
In our opinion, instead of taking a short-term view of paying capacity, the
telecom companies should focus on a long-term game. There is one word
that telecom companies are hearing a lot these days-“Volumes”. They need
volumes to sustain the network and the large employee base they have
enrolled. In this regard, companies like Reliance and Tata’s have been
aggressive over the final rollout of connections to PCO owners. Reliance is

26. giving upto 30% commission on each call. How they market and distribute
these connections is a tough battle indeed. If and when the carrier access
codes are introduced, there could be a tough fight among these outlets, as
far as prices are concerned. Yet, prices can go down further by almost 40%
of the present structure. Part of the price cuts could be because of tax
exemptions, if and when these companies can lobby for the same. The
other part could be earning through volumes.
New players like Virgin Mobile, which already has an international presence
in close to 17 countries are entering India. It is doing so in collaboration
with Tata Teleservices. The target market for Virgin Mobile is the youth,
which in India is around 54% of its population.
There are challenges like porting time, allocation of capital and operational
porting costs among participants and other interconnect issues. Yet, the
atmosphere around the MNP issue looks positive and will be set once the
committee submits its final report on the same.
The telecom sector is attracting significant domestic and global investment.
The capital investment made by the telecom service industry during 2006-
07 was around $8.5 billion, out of which $550 million was foreign direct
investment. The margins and profits of almost all the telecom companies

27. have been increasing. In fact there are cases where a significant portion of profit of international
telecom companies has been from their operations in India.India is well prepared for the introduction of NGN (Next-Generation Networking). Being a
late starter in the telecom scenario, India has the advantage of using the latest technology and so it is in a better position when compared to many
other countries as far as introduction of NGN is concerned. Besides, the TRAI has identified introduction of NGN as a priority area. It has been noted
that mobile telephony is growing at an annual rate of over 90 percent. Besides the basic telephone service, there is a huge potential for different Value
Added Services (VAS). In fact, the real potential for telecom service growth is still lying untapped.
BIBLIOGRAPHY
• www.trai.gov.in
• www.scribd.com
• www.dot.gov.in
• Google search engine

28. • PriceWaterHOuse Coopers
• Motilal Oswal Securities Ltd.