India is the second largest telecommunications market in the world with around 900 Million subscribers at present. Since its liberalization in 1994, the industry has seen considerable growth with enactment of different regimes and entry of new players. However, in the last few years, the industry has been affected by the constant regulatory disputes and intense business environment leading to price war.
The objective of this study is to analyse the impact of New Economic Policy, 1991 on the Telecommunication (Voice) industry. However, as the major developments in the industry have taken place only from 1994, we have analysed the impact of National Telecom Policy, 1994 and New Telecom Policy, 1999 for our study. The purpose of this study is also to analyse the business environment of the industry, find out growth drivers for the industry, the market attractiveness for new entrants and incumbents.
3. INDUSTRY ANALYSIS
3.1. Evolution of Telecommunication Industry in India
New Economic Policy of 1991
In 1991, India had only 5,000,000 telephone subscribers and the services were provided in the country by MTNL and DoT. However, delicensing of telephone manufacturing equipment in 1991 led to most of the telecommunication equipment being manufactured in India. This development paved way for the establishment of telecom infrastructure in India for future years.
National Telecom Policy – 1994
A major breakthrough in the Indian Telecommunication industry was liberalization of the industry in the National Telecom Policy in 1994 (NTP-94) when two private service providers were given licenses in each service area (Government being the third telecom player in the area). The licenses were initially given for 10 years which could be extended b...
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...he substitute providers may give a probable competition.
4. Incumbent acquiescent: There are lot of incumbent players in the industry. Most of them are at economic loss. In order to avoid such losses after entry price, a new entrant need to enter as a huge size. So that they can breakeven easily.
5. Access to distribution channel: There are many rules and regulations set by the government which provides barriers to the new entrant in accessing distribution channels. Willing parties to industry may be discouraged due to the domestic regulations. The regulations forbids concentration of seller.
6. Access to suppliers: With so many suppliers, new entrants will have their freedom to choose their suppliers in establishing their infrastructure. But there is lot of cost involved in setting up the billing and operational support systems. It is moderate for the industry.
The Telecommunications Act of 1996 can be termed as a major overhaul of the communications law in the past sixty-two years. The main aim of this Act is to enable any communications firm to enter the market and compete against one another based on fair and just practices (“The Telecommunications Act 1996,” The Federal Communications Commission). This Act has the potential to radically change the lives of the people in a number of different ways. For instance it has affected the telephone services both local and long distance, cable programming and other video services, broadcast services and services provided to schools. The Federal Communications Commission has actively endorsed this Act and has worked towards the enforcement and implementation of the various clauses listed in the document. The Act was basically brought into existence in order to promote competition and reduce regulation so that lower prices and higher quality services for the Americans consumers may be secured.
In the 1990s, the telecommunications market was rapidly changing with the addition of new entrants from a competition standpoint that were forcing WorldCom to decrease prices. Long term leases for
In a competitive environment where market is changing instantly, organizations are in a fix to design a strategy that could market their products enticing the consumers to buy their products and services. Market is the arena for business gladiators who fight out for maximum share and profitability and this is possible only through effective marketing strategy. Competing in present economy means finding ways to break out of commodity status to meet customers’ needs better than competing firms (Ferrell and Hartline, 2010). The intensity of competition has increased after the introduction of media and internet where the companies present their product in the best way through advertisements, product reviews, blog entries, etc. With the advancement in technological innovations, companies have found various ways of providing services to the consumers in a cheaper and effective way and this has resulted in communication revolution in late 1990’s as the cellular technology was unfold in most of the regions. Singtel Optus Pty Limited (Optus) is one such company that has evolved during this period as a leader in integrated communications and this paper is assumed to make an analysis of the company’s marketing strategy and its financial position in the market industry.
The market is dominated by a few large suppliers rather than a fragmented source of supply. There are no substitutes for the particular input. The suppliers customers are fragmented, so their bargaining power is low. The switching costs from one supplier to another are high. There is the possibility of the supplier integrating forwards in order to obtain higher prices and margins.
Background One. Tel was launched by Jodee Rich and Brad Keeling in 1995 (Cook, 2001). At first, it looked to get the advantages from deregulation of the telecommunication industry by reselling other network’s capacity and making money through stock market speculation. Rich and Keeling tried to increase the company’s shares rather than profit the company (Cook, 2001). Initially, One.
The suppliers bargaining power is generally strong because of the big monopolies and the high importance of purchasing components and operating system, therefore it decreases the profitability of the market players.
Telecommunications gained mainstream attention in the early 90’s; however the initial key market was business men and women, who used their phones whilst being on the move and so allowing them to communicate with their companies with ease. Though in the modern era, telecommunication went through segmentation in the market trends, and now in this day and age it would be difficult to find someone who does not own some form of mobile technology. Many phone providers battle to provide the best service for their customers (Figure 1).
The industry growth has slowed significantly from 4 percent in 2010 to 0.9 percent in 2013. Aside from the weak economic growth since the end of recession, two other key factors behind the slow expansion of the industry are the wireless market entering a more mature stage and the the potential start of the declining phase for traditional TV service with companies such as Netflix stealing a huge chunk of market share from cable and satellite companies. Even with the maturing of the wireless segement and the changes in the demand for TV services , the future remains bright for the industry as the demand for Bandwidth continues to increase rapidly especially for online streaming. We will thus see a growing number for consumers upgrading the mobile internet and data packages to benefit from faster connection speed.
The changes in the technological can influence many part of societies. When the AT&T Company introduce their new product and services which is wireless and wire line technology will effects occur primarily through the new products, processes, and materials. Thus, changes in technological also often can achieve higher market share and earn higher return because, newly emerging technology from AT&T could derive competitive advantages. For example, internet today becoming more remarkable capability to provide information easily, quickly, effectively, and also can create more value for customer in the future and to anticipate future trends.
After this decision internet distributors and Express respectively has to be considered as strong competitor due to the price-sensitivity of the electronic industry. Therefore A/S should work on its company image to highlight their advantages compared to discounters. Therefore A/S has to point out that they are aware of being not the cheapest but nevertheless will create more benefit for the customers by offering service and competence.
This system connects, accumulates, processesas well as provides imperative information to all parties thus enhancing continuity in the procurement process. However, if valid output is to be expected, features as well as requirements of the procurement process must be compatible to current system technologies (Giner, et al, 2011). The harmonization of suppliers as enhanced through the adoption of electronic sourcing enables firms to readily identify new potential suppliers for specific needs when old suppliers` capabilities are in question. The adoption of E-tendering that supports sending requests of pricesand information to suppliers as well as receiving suppliers responses improves on procurement efficiencies as it leads to significant cost reductions thus leading to better procurement performance through cost savings.For this system to achieve desired results however,all users must beready and willing to adopt the new systemsso enable seamless adoption and consequently ensure optimal
The growth of services sector in our economy is a step forward in the development of Indian economy. In day to day life of an individual the use of mobile phones acts as necessity in getting connected with people for one or the other purpose. India has a largest variety of smartphones available for the users. Because of the fast technologies in smartphones & in market, the networks and services providers of telecom must be updated so as to meet the requirements of people. Indian telecommunication industry is considered to be one of the fastest growing telecom industries in the world. The mounting up of the subscribers reaches to an approximate 800 billion plus users in telecom sector. The industry is growing at as pace in such a way that it will reach a level beyond the telecom markets of USA &
Success Factors for Growth in the Indian Telecom Market. In India’s highly competitive market, Bharti must be mindful of how to keep its core competencies ahead as well as trying to develop new ones.
The topic chosen for the study is “Market potential for Vodafone 3G services inBijapur”. This study will help Vodafone to understand the different customers using internet services of Vodafone.