econonics reliance communication

8/8/2019 Econonics Reliance Communication

1/22

Group-ORagini Iyer(052)Rishabh Khandhar(058)

Sandeep Agrawal(070)

Sria Majumdar(083)

Sushant Gupta(087)

Abhishek Singh(096)


2/22

AGENDA

Objectives

Indian Telecom Industry

Key Factors

Market Structure

Indias Growing Market

Reliance Communications

Analysis

Question & AnswersGroup-O 2


3/22

OBJECTIVES

Telecom Sector Analysis Market Shares

Average Revenue per User (ARPU)

Market Structure

Reliance Communications

Cost Management

Economics of Information

Externalities First mover advantage

SWOT analysis

Strategy for profitable Growth

CSR InitiativeGroup-O 3


4/22

INDIAN TELECOM INDUSTRY

Group-O 4


5/22

KEY FACTORS

Supply : BSNL, MTNL, Bharti Airtel, Reliance

Communication, Vodafone, Idea Cellular, Aircel,Tata Teleservices

Demand: Expected telecom subscriber base by2012 900 million; driven by rural demand

Bargaining power of supplier: Reducing - due tocompetitive scenario

Bargaining power of customers: Increasing - dueto competitive scenario

Competition: Increasing day by dayGroup-O 5


6/22

MARKET STRUCTURE

Oligopoly Market Herfindahl-Hirschman Index

Top 5 companies market shares

60% - Oligopoly

Group-O 6


7/22

INDIAS GROWING MARKET

Group-O 7


8/22

RELIANCE COMMUNICATIONS

Dhirubhai Ambanis vision To bring the power of

communication to every Indian by making calling on

the phone cheaper than sending a postcard An Integrated Telco:

Group-O 8

#2 in India, #4 Globally(single country)Wireless

Largest global private submarine cable n/wEnterprise One stop shop for all large corp. for

communication, n/w and IT infra needGlobalcom

National DTH Business, rich content accessHome

200k+ slots, provides space & connectivityInfratel


9/22

RCOMAT A GLANCE

Group-O 9


10/22

FINANCIAL HIGHLIGHTS

Group-O 10


11/22

DYNAMIC LANDSCAPE

Group-O 11


12/22

COST MANAGEMENT

Group-O 12


13/22

REVENUE PERMINUTE

Pricing Driven by

Sequential Game

Theory

Call prices have fallen

amid stiff competition

RCOM-the only

operator which has held

on to the RPM over last

4 quarters Group-O 13


14/22

URBAN & RURAL MARKET

Indias Tele-density is 44.87%

Rural tele-density is just 18.97%, urban 101.38% (2009)

Targets Rural Market

Established a pan-India (wireless and wire line),

convergent (voice, data and video) digital networkcovering over 20,000 towns and 500,000 villages

Launch OF BharatNet High-speed Wireless Internet

service PLAN

Expanding rural services with Grameen VAS 14


15/22

ECONOMICSOF INFORMATION

Internal Information

Decision for launching different

plans:

Launching Value added services

External Information

Competitor information

Acquiring 3G licensesGroup-O 15


16/22

FIRST MOVER ADVANTAGE

Launch of 3G Lab (1st Sep., 2009) : Costreduction, simpler for adoption

Strategic partnership with Acer : Launch of aNetbook with Embedded Wireless Broadband

connectivity


17/22

EXTERNALITIES

Network Externalities

Most important for any telecommunication company

A positive externality as the purchase by a number of

people leads to bandwagon effect Network effects become significant after critical mass

is achieved

Discourages monopoly with existence of a number of

networks


18/22

SWOT ANALYSIS

Strengths

Part of well-funded and well-

connected Indian Conglomerate

Economies of scale from large

subscriber base

Expertise in a business model tomaintain high profitability from

lower-yielding subscribers

Weaknesses

Cost structure disadvantage with

subscribers spread across two different

mobile networks

Low ARPU compared with competitors

weakness in rural markets

Limited availability of value-added

services

Opportunities

Aggressive move into the rural market

Use mobile number portability as

"launching pad" to grab market share

of higher ARPU users

Lease spare capacity on its CDMA

network to mobile virtual network

operators

Threats

Quicker than expected slowing of growth

in the Indian marketplace

Mobile number portability risks

accelerating churn of subscribers from

CDMA to GSM

New competitors


19/22

MACRO ENVIRONMENT

Effect of Videoconferencing

Major change in the industry

Adapted with changing business environment

Invested in videoconferencing solutions


20/22

CSR INITIATIVE

Buzzword of the day essential for any company

Organised internal campaigns for voluntary blooddonations

Little Genius- provides poor children an opportunity to

explore the digital world

e-Shikshit help people in rural areas to accessinformation

Eye care services -Rural terrain in Kerala

Support & services to children suffering from Cleft lip

Encouraged em loyees to su ort social endeavoursGroup-O 20


21/22

STRATEGY FOR GROWTH

Group-O 21


22/22

Group-O 22

econonics reliance communication

Documents