Final Eco PPt - With Movie

8/4/2019 Final Eco PPt - With Movie

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Would cheaper rates bring in more profits?


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Evolution of Mobile Telecom Sector

in India The Indian Government

announced NTP inSeptember 1994.

Foreign equity participationup to 49 per cent was allowedin basic telecom services

Mobile phones came to Indiaon 31stJuly95 with anoutgoing call rate @16.80/min and incoming @8/min.
http://www.mobilephone.co.in/wp-content/uploads/2010/01/Mobile-phones-history-in-inida.jpg


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Evolution of Mobile Telecom Sector

in India(Contd.)

The reasons for such heftycall rates were:- high license fee imposed by

the govt.

lack of competition. High fixed cost.

In 1995-96 only 3000 peoplewere having cell phones. Even

4 years later, as the price wastoo high to generate sufficientdemand, mobile phoneindustry was in heavy losses

with less than 2 millionsubscribers.
http://www.mobilephone.co.in/wp-content/uploads/2010/01/Mobile-phones-history-in-inida.jpg


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NTP99 and its impact

NTP 99 Reduction in license fee Incoming was made free

Reduction in call rates(byalmost 60%).

Increase in number of

customers.

Increase in number ofservice providers.

0

100200

300

400

500

600

700

800

900

1999 2006 2011

Millions

Millions


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Further reduction in call rates

2G Scam

122 licenses at very lowprices

85 companies with littleor no experience

Increase in number ofservice providers.

0

100200

300

400

500

600

700

800

900

1999 2006 2011

Millions

Millions


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Mobile subscriptions and Mobile

Handsets Mobile subscriptions demand is closely related to the demand

for mobile handsets.

Mobile handset is a complementary product for mobile

subscription. The price of Mobile handset went down from 15000 in the year

1995 to 1000 in 2011.

Which in turn increased the demand for mobile subscriptions.


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The Indian telecommunication industry is the

world's fastest growing industry The Indian telecommunication industry is the world's fastest growing

industry with 826.93 million mobile phone subscribers as of April 2011.

It is also the second largest telecommunication network in the world in

terms of number of wireless connections after China.Rank Country Number of mobilephone

Population % of population Last updated

World Over 5 billion 6,909,500,000 2010

1 China 896,200,000 1,341,000,000 67.1 May 2011

2 India 840,282,797 1,210,193,422 70.23 May 2011

3 United States 302,947,098 310,866,000 96 Dec 2010


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Reduction in call rates Increase in no. of

new consumers.

Increase in usageand multipleconnection.

Reduction in the callrates and mobileprices.

Decline in ARPU butincrease in TR.

New Users

Multiple

Connections

Increased Usage

0% 50% 100% 150%

Market Penetration

ARPU


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Demand correlation with income

Demand for mobile phones in India is positively correlated with increase in income.

India's economy has been growing at a stellar pace in recent times and people have shared this

growth.

Today's chart of the day shows how the per capita income in India has been on the rise.

Indias per capita income doubles in 7 years to Rs38,084 million.

Wireless telecom market in India is experiencing the phase of high growth for past few years.Overall mobile subscribers in India have increased from 165.11 million in March 2007 to 771.18

million January 2011. As a result, mobile tele-density jumped from 14.61% to 64.74%.

Income in India was rising. This increased the demand for mobile handsets and hencemobile subscriptions.


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Indian wireless telecom market is witnessing unprecedentedgrowth mainly driven by high income growth

According to Vodafone survey Em= 2.45.

Mobile subscribers targeted all income groups:

High- internet and online payment facilities.

Middle- cheap handsets with loads of features.

Low- Life time validity on pre-paid cards.

Demand correlation with income(Contd.)


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Mobile phone v/s fixed phone Reduction in the price of

mobile subscriptions hasreduced the demand for fixedphone.

Percentage change in quantitydemanded for fixed phone topercentage change in price ofmobile subscriptions is positivebetween them so they aresubstitutes.

Hence, the increase in demandfor mobile subscription hasadversely affected fixed phonemarket.

0

1

2

3

4

56

7

Fixed phones perMobile Phones

Fixedphonesper

MobilePhones


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Market SpoilerJapans NTT DoCoMo collaborated with Tata

Teleservices and launched the Tata DoCoMo in Indiaon 10thJune 09.

DoCoMo launched Pay Per Second and Pay PerCharacter talk and SMS plans respectively.

All competitors were forced to reduce their prices too.

As a result TR reduced for the entire market, includingDoCoMo.

Hence reducing prices will only spoil the marketfurther for the service providers.


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Other Sources of Revenue Tie-ups

Reality Shows

Value Added Services Mobile Internet Users

Data Card

Broad Band


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Tie-UpsAirtel with Nokia and Radio Mirchi

Vodafone with ICICI Bank

Aircel with Facebook

Idea Cellular with Yahoo! and Geodesic


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REALITY SHOWS Reality shows like Big Boss, Indian Idol, Nach Baliye etc.,

which engage audiences are increasing day by day.

On an average, a popular reality television show getsaround 7 million text messages per episode. At Rs. 4 perSMS, it adds Rs. 28 million per episode. Over a year, it sumsupto around Rs. 1460 million. On a 50-50 split between the

production house and the mobile operator, it works out toRs. 730 million to the mobile operator.


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MOBILE VALUE ADDED SERVICES
http://mediasplash.in/wp-content/uploads/2010/05/3.jpg


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MOBILE INTERNET USERS

0.00%

2.00%

4.00%

6.00%8.00%

10.00%

1998

2

001

2004

2

007

2

010

Penetration %

Penetration %

0

50

100

150

1998

2000

2002

2004

2006

2008

2010

Internet users (inmillion)

Internetusers (in

million)

India has 100 millioninternet users. Thisincludes approximately 40million mobile internet

users also.

Delhi tops the countrywith 10% of its 2 cr userssurfing the internet fromtheir mobile phones.


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DATA CARD

Most telecom operators have entered this market .

The data card segment is estimated to be worth Rs740 cr in the financial year 2009-10

Sales of data cards is expected to grow from 11 mnin 2009-10 to 20 mn by the end of 2011.


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BROADBAND Broadband connection

base grew by 3.39% duringJuly 2010, up from 9.45

million at the end of June2010.

India has 10.52 million

broadband users (tillOct.2010), constituting6.0% of the population.

0

10

20

30

40

50

60

70

80PERCENT OF SHARE

PERCENT OF SHARE


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Mobile Number Portability

25% of the respondents arewilling to part with their currentservice provider.

Vodafone and Aircel Port-in toPort-out ratio are 2.12 and 2.51respectively.

Airtel has a ratio of 1.27

Worst hit are Reliance CDMA

and GSM and Tata Tele CDMAwith ratios of 0.01, 0.05 and 0.06respectively


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Mobile Number Portability

Vodafone's India service revenueup by 16.7%

Reliance income fell 71% to

Rs13.5bn in March 11 end fromRs 46.6bn


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Trends in MarketDespite high

elasticity

Airtel prevails inNorth

Vodafone in West

Aircel in South Idea in East


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By

Aditi Pattanayak

Ajay Raja

Ankit Pancholi

Anurag Kalra

Arjun Jain

Avishek MehtaChirag Kriplani

Dhananjay Singh

Hanuman Asopa

Vritika Sharma

Documents

Final Eco PPt - With Movie