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Submitted To: Submitted BY:

Sonu Dua Sir Nakul Kumar
Roll no: A (07)
Reg. no: 10901295
Sec. no: RS1906




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The telecommunications industry was about a $4 trillion sector in 2010, including about
$1.3 trillion in total revenues in the US.

Telecommunication is the transmission of information, over significant distances, for the

purpose of communication. In earlier times, telecommunications involved the use of visual
signals, such as beacons, smoke, semaphore telegraphs, signal flags, and optical
heliographs, or audio messages via coded drumbeats, lung-blown horns, or sent by loud
whistles, for example. In the modern age of electricity and electronics, telecommunications
now also includes the use of electrical devices such as telegraphs, telephones, and
teletypes, the use of radio and microwave communications, as well as fiber optics and their
associated electronics, plus the use of the orbiting satellites and the Internet.


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Telecommunications industry deals with the activities and services of electronic

systems for transmitting messages through cables, telephone, radio or television.

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Two major factors responsible for the growth of telecommunications industry are
use of modern technology and market competition. One of the products of modern
technologies is optical fibers, which are being used as a medium of data transmission
instead of using coaxial or twisted pair cables. Optical fibers can carry a high
volume of data and are easier to maintain and install. Uses of communication
satellites make this telecommunications industry a booming industry.

The use of mobile network has a crucial role behind the growth of an improved
telecommunications industry. Leading companies are showing their interest to invest
in this telecommunications industry.

Telecommunications industry is going to be a digitized one. Use of ISDN (Inter

Services Digital Network) makes this telecommunication industry a total digitalized
system and eventually enhanced the speed and quality of digital communication.

The introduction of these advanced technologies makes the telecommunications

industry a competitive one, where a number of multinational companies have shown
their interest to invest in this industry and consequently the prices are reduced, the
quality is also improved. During the period of 1990, the telecommunication industry
showed a speedy growth in terms of investment and eventually increased the
competition. The competition between the companies led to the decline of revenues.

!!!

Telecommunication industry has created immense employment opportunities. Most

of the employees in this industry are engaged in large establishments, although there
are some small establishments, where a large number of small contractors are
involved. Fifty five percent of all workers are engaged in office and administrative
support occupations. The other occupations of this industry relate to installation,
maintenance, and repair.

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c uncovers the fact that this industry has a huge business
potentiality and is going to be a booming industry. Telecom industry analysis also
reveals that this industry will provide an immense employment opportunity in the
coming years.

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Phoenix Center research revealed that in the coming years, there will be a healthy
competition among the providers of telecommunication services. At the same time,
the price will be lower and quality will be higher. The new telecommunications
technologies will replace the traditional telecom services. Statistical data also reveals
that the telecommunications industry is going to be a dynamic and booming industry
in the near future. The telecom industry comprises of complex network of services
like telephones, mobile phones and internet services.

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Throughout the world, telecom industry are being controlled by private companies
instead of government monopolies. Traditional telecom technologies are also being
replaced by modern wireless technologies, specifically in case of mobile services.
One of the major objectives of telecom industry is to enhance the quality and speed
of Internet technology.
These days, telecom industry is more concerned with texts and images (Internet
tech), rather than voice (telephone service). Most of the research works are going on
Internet accessibility, specifically on data applications and broadband services. The
other major division of telecom industry is mobile network sector, where lots of
innovative research works are going on. Previously the traditional telephone calls
used to earn the maximum revenues, but these days mobile service is going to
replace traditional telephone services.

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Telecom industry in India has a big market potentiality and is a fast growing sector.
Government of India is eager to reconstitute this telecom industry by enacting effective
policies for more investments from foreign companies, which results in a very competitive
and deregulated market in the world.

Indian telecom industry is growing at a great pace & India is expected to become a
manufacturing hub for telecom equipment. Indian telecom equipment manufacturing sector
is set to become one of the largest sectors globally by 2010. Due to rising demand for a
wide range of telecom equipment, particularly in the area of mobile telecommunications,
has provided excellent opportunities to domestic and foreign investors in the manufacturing
sector.




Government of India implemented the unified access licensing regime, which enables basic
and cellular mobile service to use any modern technology. In 1997, Telecom Regulatory
Authority of India (TRAI) was formed to facilitate the growth of the telecom sector in
India.

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Telecommunication sector in India is primarily subdivided into two segments, which are
Fixed Service Provider (FSPs) and Cellular Services. Telecom industry in India constitutes
some essential telecom services like telephone, radio, television and Internet. Telecom
industry in India is specifically emphasizing on latest technologies like GSM (Global
System for Mobile Communications), CDMA(Code Division Multiple Access),
PMRTS(Public Mobile Radio Trunking Services), Fixed Line and WLL(Wireless Local
Loop ). India has a prospering market specifically in GSM mobile service and the number
of subscribers is growing very fast.
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Telecom industry in India has a major role in Indian economy. The Indian government is
also enforcing some effective telecom policies and regulations for the infrastructural
growth of this industry. Indian telecom market provides a tele-density of 8.5 percent as
registered in the year 2004. A number of leading multinational telecommunication
companies are approaching and showing their interest to invest for the telecom industry in
India. Telecommunication industry of India ranked sixth among all the telecommunication
sectors in the world. In the year 2004, the total number of telephone subscriptions were
US$93.2.

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Bharat Sanchar Nigam Limited) Mahanagar Telephone Nigam Limited (MTNL),

Videsh Sanchar Nigam Limited (VSNL), Bharti Airtel, Tata Teleservices, SIFY Ltd.
are the major telecommunications service providers in India.

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 c  stands for "olitical, conomic, ocial, and cechnological analysis" and
describes a framework of macro-environmental factors used in the environmental scanning
component of strategic management. Some analysts added egal and rearranged the
mnemonic to SLEPT; inserting nvironmental factors expanded it to PESTEL or PESTLE,
which is popular in the United Kingdom. The model has recently been further extended to
STEEPLE and STEEPLED, adding education and demographic factors. It is a part of the
external analysis when conducting a strategic analysis or doing market research, and gives
an overview of the different macro environmental factors that the company has to take into
consideration. It is a useful strategic tool for understanding market growth or decline,
business position, potential and direction for operations.

The growing importance of environmental or ecological factors in the first decade of the
21st century have given rise to green business and encouraged widespread use of an
updated version of the PEST framework. STEER analysis systematically considers Socio-
cultural, Technological, Economic, Ecological, and Regulatory factors.


  

u The Communications Act 2003,

u Environmental Concerns,
u Internet Regulation,
u Concerns Over Radiation From Mobile Telephones,
u Converged Regulation,
u Telecommunications Ombudsman,

 

u Fluctuations in The Economy,

u Overall Economy Of UK,

 

u Shift Towards The Information Society,

u Mobile Society,
u Commercialization Of the Home,
u Increasing Need For Communications,
u Internet At Home,
u Changing Population Demographics,

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u Wireless And Mobile Communications,

u Convergence,
u Residential VoIP,
u Real-Time and On-Demand Communications,


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1. c#  % , It comes as no surprise that in the capital-intensive

telecom industry the biggest barrier to entry is access to finance. To cover high fixed
costs, serious contenders typically require a lot of cash. When capital markets are
generous, the threat of competitive entrants escalates. When financing opportunities
are less readily available, the pace of entry slows. Meanwhile, ownership of a
telecom license can represent a huge barrier to entry. In the U.S., for instance,
fledgling telecom operators must still apply to the Federal Communications
Commission (FCC) to receive regulatory approval and licensing. There is also a
finite amount of "good" radio spectrum that lends itself to mobile voice and data
applications. In addition, it is important to remember that solid operating skills and
management experience is fairly scarce, making entry even more difficult.
2. %!!,At first glance, it might look like telecom equipment suppliers
have considerable bargaining power over telecom operators. Indeed, without high-
tech broadband switching equipment, fiber-optic cables, mobile handsets and billing
software, telecom operators would not be able to do the job of transmitting voice
and data from place to place. But there are actually a number of large equipment
makers around. There are enough vendors, arguably, to dilute bargaining power.
The limited pool of talented managers and engineers, especially those well versed in
the latest technologies, places companies in a weak position in terms of hiring and
salaries.
 3. %  -, With increased choice of telecom products and services, the
bargaining power of buyers is rising. Telephone and data services do not vary much,
regardless of which companies are selling them. For the most part, basic services are
treated as a commodity. This translates into customers seeking low prices from
companies that offer reliable service. At the same time, buyer power can vary
somewhat between market segments. While switching costs are relatively low for
residential telecom customers, they can get higher for larger business customers,
especially those that rely more on customized products and services.
4. '"  ", Products and services from non-traditional telecom
industries pose serious substitution threats. Cable TV and satellite operators now
compete for buyers. The cable guys, with their own direct lines into homes, offer
broadband internet services, and satellite links can substitute for high-speed business
networking needs. Railways and energy utility companies are laying miles of high-
capacity telecom network alongside their own track and pipeline assets. Just as
worrying for telecom operators is the internet: it is becoming a viable vehicle for
cut-rate voice calls. Delivered by ISPs - not telecom operators - "internet telephony"
could take a big bite out of telecom companies' core voice revenues.
5. !'
', Competition is "cut throat". The wave of industry
deregulation together with the receptive capital markets of the late 1990s paved the
way for a rush of new entrants. New technology is prompting a raft of substitute
services. Nearly everybody already pays for phone services, so all competitors now
must lure customers with lower prices and more exciting services. This tends to
drive industry profitability down. In addition to low profits, the telecom industry
suffers from high exit barriers, mainly due to its specialized equipment. Networks
and billing systems cannot really be used for much else, and their swift
obsolescence makes liquidation pretty difficult.



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In today's economy, many news sources are filled with reports of the increasing levels of
telecommunication industry capital investments. As a telecom industry executive, where
can you turn for a business financing resource you can trust? Here are a few tips on finding
the right capital investment source for your telecom business.

First of all, look for a full service capital investment specialist. An industry leader is a
much more stable financing source than a smaller single service financier. Look for a major
corporation that offers asset based solutions, lines of credit and capital investment
programs as well as ordinary loans. Once you have found such a company, you can rest
assured that they are a full service organization suited to all your capital investment needs.

Next, investigate the capital investment company's track record of success. Have they been
able to deliver results for other telecommunications professionals in the recent past? What
are some of the companies for which they have obtained results? How much financial asset
did they obtain for these companies? Are any testimonials available from satisfied
customers? Find out what companies have walked the path you are about to embark on
before you commit to a business financing resource.

In addition, be sure to carefully examine their policy on customer service. As a business

financing resource, they should be willing and able to answer all your questions fully and
offer you the support that meets or exceeds your expectations. Make sure they have a full
staff to offer you quality client support services.

The Indian telecom market is expected to grow three fold by 2012 & market size over US $
8 billion. Moreover the government has set a target of 20 million broadband connections by
2010.
The National Telecom Policy 1999 targets tele-density at 15 per cent by 2010. This will
entail an investment of US $ 40- 50 billion over the next 6-8 years.

There is an immense opportunity for DTH in the Indian market which is almost 10 times
compared to the developed countries like the US and Europe. For every channel there is a
scope for broadcasting it in at least ten different languages. So every channel multiplied by
ten that is the kind of scope for DTH in the country. India¶s media players have all the
ingredients to develop a successful DTH industry. So currently there is a lot of pent-up
demand in the Indian market for DTH.
It is expected that by the year 2010 there will be over 500 million subscribers in the Indian
telecom market. Cellular subscriber base is projected to grow at a CAGR (Compounded
Annual Growth Rate) of 48 per cent & expected to reach 88 million in 2012.

Over 150% growth in telecom services is projected in 5 years. India will require large
investments in network infrastructure & India expected to be faster growing telecom
market in the world. Since the project expected to reach 30-40% per year 250 subscribers
in 2010.Total estimate of investment opportunity of USS 22 billion expected over the next
five years.
Investment opportunity of $22 billion across many areas:
 Telecom Devices and Software for Internet
 Broadband and Direct To Home Services
 Gateway exchange
 Set top box
 Modem
 Mobile handsets and consumer premise equipments
 Gaming devices
 EPABX
 Telecom Software
 Telecom Services for voice and data via a range of technologies.
With the rapid growth of the telecom network, there are further opportunities to expand the
telecom infrastructure and research and development.

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u Tax incentives under the current Budget
u Customs duty on convergence products to be reduced from 10% to 5%.
u Exemption from excise duty for specified inputs and raw materials for manufacture
of specified electronics/ IT hardware to lower the network cost for telecom service
providers.
u Specified parts of set top boxes and specified raw materials for use in the
IT/electronic hardware industry to be exempted from customs duty.
u Internet telecommunication service brought under the service tax net, and
countervailing duty on wireless data modem cards with exempted by way of excise
duty exemption.