This presentation is for Service Operations and strategies in Telecom Sector. It might be useful for all

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
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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 world
Mobile 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 & China
19%
12%
62%
China
7%
India
USA
Others
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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 5G
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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 India’s top 10
wireless service providers’ market
shares as on 31st August 2012.
Bharti
Reliance
Vodafone
BSNL
Tata
Idea
Aircel
MTNL
Others
1% 1%
5%
23%
11%
9%
19%
13%
18%
Source : TRAI
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6. Analyzing Indian Telecom Market
Average Revenue per user (ARPU)
264 INR / sub / month
Minutes of usage per user per
month (MoU)
500 Min / sub /month
Tariff Rates
Reducing Margin
Coverage
Subscriber Base
Competition
260 million
84% Privatization
Source: KPMG
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7. Telecom Service Management
Service
Management
Reducing
Operating Cost
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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-Fi
General packet radio service (GPRS)
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9. Major Changes in the
Telecommunications Industry
Changes in
regulations
Changes in
competition
Required changes
in the skills and
resources of
telecom operators
Changes in
markets and
customers
Technological
changes
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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" solutions
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11. Strategic segmentation of the
operators activities
Types of services
Systems consulting and
engineering/out-sourcing
Audio-visual services
Information services
Telecommunications
services
Transmission/fixed network
Mobile
Fixed
Analogic
Digital
Transmission/Radio
Analogic + Optical
Digital
+ Intelligent
Satellite links
Production of contents
Broadcasting
Production of contents
Distribution of contents
Data
Voice
Pictures
Data
Voice
Large
international
companies Operators
Professions, Large
small
companies
businesses multilocations
Types of
Clients
Technologies
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12. Administration and Control
 Deals with various aspects of telecommunications
 Telecommunication services, R&D, standardization of
equipment, 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 services
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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
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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 an
analysis industry performance (from a regulatory, investment and industry point
of view)
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15. Future strategies
 Acquiring other telecom companies
 Diversifying telecom services
 Developing new value added services
 Need of understand process of change
 Global circumstances and impact
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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?
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17. Lets consider a case study and various points discussed
earlier:
AIRTEL
…A Case Study
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18. Porters Five Force Model
Potential
Entrants
New
Entrants
Buyer
Power
Industry
Rivalry
Supplier
Power
Substitute
(Threat)
Competitive Rivalry
for Airtel
o The
Rivalry in
and will
increase
players
industry.
Competitive
India is high
continue to
as
new
enter the
o 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 strategy
Rural 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 player
Low Cost Strategy
• BSNL is a low-cost service
provider of many services
• This strategy has helped
BSNL in penetrating the
Indian telecommunication
market
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20. Reliance Communications
Reliance
Communications, previou
sly known as Reliance
Infocom
Competitive
strategy
• Initiated mobile data
services through its R
world mobile portal
Digital revolution
in the Indian
telecom industry
Reliance
currently offers
its services in
340 towns
Integrated Service
• From the
beginning, Reliance
believed in providing
integrated
communication
services to its
customers
Eight circle
footprints
Large 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 Sector
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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 smooth
Tower Providers
• Towers remains a problem due to few Tower provider
• Bargaining power of Tower providers if High
Handset 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
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22. Buyer
Power
Switching
cost is low.
Number
portability
The Voice
and
message
based
services are
moving
toward a
commodity
The
customers
are
demanding
more value
for money
which has
lead to
Introduction
of pay per
second
plans.
Buyers are
wanting
more and
more value
added
service at
cheaper
prices
Hence the
companies
have to now
focus on
Customer
Delight and
not
Customer
Satisfaction
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23. Threat of
Substitut
es
The VOIP is getting popular for E.g. Skype, Vonage
etc.
Video Conferencing
CDMA
Potential for New Entrants
The potential for new
entrant is also high
The 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
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24. Opportunities
 The Rural Landscape:
•
•
Massive opportunity for Airtel to expand its customer base
Rural Household comprise of 70 % of India’s 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 operators
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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.
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