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About The Telecom Industry

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Abhijit Jain
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42 views4 pages

About The Telecom Industry

Uploaded by

Abhijit Jain
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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About the Telecom Industry

Right now, India is the world's second-biggest telecom market with a supporter
base of 1.16 billion and has enlisted solid development in the most recent
decade. The Indian mobile economy is developing quickly and will contribute
generously to India's Gross Domestic Product (GDP) as per a report arranged
by GSM Association (GSMA) as a team with Boston Consulting Group (BCG). In
2019, India outperformed the US to turn into the second biggest market as far
as number of application downloads.

The liberal and reformist approaches of the Government of India have been
instrumental alongside solid shopper interest in the quick development in the
Indian telecom area. The Government has empowered simple market
admittance to telecom hardware and a reasonable and proactive
administrative structure, that has guaranteed accessibility of telecom
administrations to purchaser at moderate costs. The liberation of Foreign
Direct Investment (FDI) standards have made the area one of the quickest
developing and the best five business opportunity generator in the nation.

India positions as the world's second biggest market regarding absolute web
clients. The quantity of web supporters in the nation expanded at a CAGR of
21.36% from FY16 to FY20 to arrive at 743.19 million in FY20. Absolute remote
information utilization in India became 9.35% quarterly to arrive at 22,854,131
TB in Q4FY20.

India is likewise the world's second-biggest media communications market. It's


absolute phone supporter base and tele-thickness arrived at 1,177.97 million
and 87.37%, individually, in FY20.

Net income of the telecom area remained at Rs. 252,825 crore (US$ 35.87
billion) in FY20.
If we break down the sector based on technology 98.28% comprise of Wireless
and only 1.75% forms the wireline technology. And based on region the
division is 44.27% in Rural areas and 55.73% in urban areas.

Throughout the following five years, ascend in cell phone infiltration and
decrease in information costs will add 500 million new web clients in India,
making open doors for new organizations.
Porter’s Five Forces Model Analysis
When it comes to industry analysis Porter’s Five Forces model is one the most
widely used tool. It analyses the industry on the following five parameters.

1. Bargaining Power of Buyers.


2. Bargaining Power of Suppliers.
3. Rivalry among Existing Competitors.
4. Threat of Substitutes Products.
5. Threat of New Entrants.

Bargaining Power of Buyers: Indian consumer, who is the buyer in this


respect is highly price sensitive. This simply means that price has high
priority in Buyers decision making. In the recent decade this industry has
changed a lot, especially with the entry of Jio and disrupting the market.
Jio with its strong capital made the services quite affordable. So, now
there is low switching cost and easy mobile number portability which
gives the customer high bargaining power resulting in high competition
amidst the companies.

Bargaining Power of Suppliers: There are not many players who are
providing the supplies for this sector. Thus, the suppliers have the upper
hand here, they enjoy high bargaining power here. Not only that there
are less suppliers but also the cost of switching from one supplier to
other is quite high which further strengthens the bargaining power of
the suppliers.
Rivalry among Existing competitors: As already discussed above we
know that the cost of switching for customers is quite low and the
customer is highly price sensitive, this increases the competitiveness
among the service providers. Adding on if we see region wise there are
around 5 to 6 players in each region, this also leads to intense
competition. High exit barriers also act as icing on the cake to intensify
this competition further.

Threats of substitute products: This parameter of the analysis is quite


straight forward. There are no substitutes available for this in the
market. This is the very best available in the market and has also became
an integral part of our life. Thus, we can say that there is hardly any
threat of substitute products.

Threat of New Entrants: In India this sector faces very strict government
regulations. Bodies like TRAI are there to regulate this sector. Hence, it is
not easy for anyone to just enter this market. Further the infrastructure
required to set up a telecom company is very high. It incurs a lot of cost
in setting up and maintain this infrastructure. Thus, it is a continuous
process, due to which players are not easily convinced to enter this
market. At last, the difficulty in achieving economies of scale is also quite
high. This all sums up to low threat of new entrants.

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