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 organization is able to build a barrier to new entrants in parcel industry. It is very expensive to set up the services that are equal to the existing organizations. There is high fixed cost associated with establishing the required international transport network. This includes ground transportation vehicles, depots, plants and a retail
Effective competition is widely seen as a key to the development of telecommunications services. The ability of new telecommunications networks to interconnect fairly and efficiently with existing networks is critical to the development of competition. AT&T has undergone numerous changes since its inception in the late 19th century. The McKinsey 7 S framework as applied by Pascale is recommended to manage the changes they are facing to adopt a greater competitive presence in the global economy. In conjunction with this framework, numerous other models were applied to analyse the global competitive position of AT&T. Recommendations for a revised strategy and direction for AT&T have been made throughout this document including two scenarios of how the telecommunications industry might develop towards 2000, while outlining the impact on AT&T.
There has been an increasing demand of telecommunication services in the last few decades which has led to an all time high demand of global operations in businesses , their capital investment as well as mobilization of the resources. This has further resulted in a lot of changes in the lifestyle of the people within specific geographies that includes an increasing demand for the latest of technology as well.
Telecom Market is currently under immense pressure to generate revenues and increase sales by enhancing and widening the product portfolio.
The Irish telecommunication industry was developed by the direct involvement of the Irish government, which created a state owned monopoly industry in Ireland. A monopoly market is not efficient as a lack of competition leads to inefficiency, restricts customer choice and exploitation of the customer by charging high prices in the market can occur. A new regulation was much needed. Under the world trade organization act Ireland was given until 2000 to open up its telecom market , in spite of this the Irish government decided to advance the deadline to 1st of December 1998 (Essick, 1998).The Irish telecommunication industry was now fully liberalized . I will now access the attractiveness of the industry by using Porter’s five forces.
The telecommunications industry is changing creating the need for a more competitive company. The changes that are happening are that there is greater competition in the market with foreign firms such as China Netcom and China Telecom are entering the UK market[1] increasing the number of firms. Also the European Union is looking to improve competition by breaking open the telecommunication markets further by giving national authorities stronger powers[2]. The type of competition is also changing in recent times as firms grow in size and capability as they merge. The recent trend being the buy out broadband and telephone companies so that firms are then able to offer bundled services[3].
BA#v=onepage&q=price%20of%20cell%20phone%20in%201980s&f=false Chowdhury. R. Evolution Of Mobile Phones: 1995 - 2012. (n.d.). Retrieved from http://www.hongkiat.com/blog/evolution-of-mobile-phones/ MobiThinking. Global mobile statistics 2013 Part A: Mobile subscribers; handset market share; mobile operators. (n.d.). Retrieved from http://mobithinking.com/mobile-marketing-tools/latest-mobile-stats/a#subscribers Poole. I. History of Mobile Phone. (n.d.). Retrieved from http://www.radio-electronics.com/info/cellulartelecomms/history/mobile-cell-phone.php UMTS World. History of UMTS and 3G development. (n.d.). Retrieved from http://www.umtsworld.com/umts/history.htm WorldMapper. Cellular Subscribers 1990. (n.d.). Retrieved from http://www.worldmapper.org/display.php?selected=333
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).
ITI produces electronic equipment pertaining to telecom sector. ITI’s wireline equipment is its major product. Being a product for usage for wireline provider, it is a complementary product for the telecom service provider. Thus its demand rises, if demand for wireline rises, and falls if demand for wireline falls. This indicates that ITI’s sales are dependent on demand in market for wireline connections (DOT).
Bharti Airtel Ltd. has been structured into three individual strategic business units (SBU’s) Mobile Services, Airtel Telemedia Services & Enterprise Services. The mobile business provides mobile & fixed wireless services using GSM technology across 22 telecom circles while the Airtel Telemedia Services business offers broadband & telephone services in 95 cities and has recently launched a Direct-to-Home (DTH) service, Airtel digital TV. The company provides end-to-end data and enterprise services to the corporate customers through its nationwide fibre optic backbone, last mile connectivity in fixed-line and mobile circles, VSATs, ISP and international bandwidth access through the gateways and landing station
The key driver for innovation in telecommunication industry is to improve the economy by attracting potential companies to invest in the country. The accessibility, quality and price of communication services are the most important points to consider when choosing a new place for establish a business.
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.
people who bought a mobile phone in India picked up a Nokia. Many of them had made their
'Incoming free for lifetime' is the latest mantra of telecom service providers in India. The launch of prepaid cards with lifetime validity for incoming calls is just another attempt to chain customers to a single service provider for life! In India, about 78 per cent of the mobile users are prepaid cardholders and this segment is growing at a very fast pace. And telecom operators are now wooing this segment with newer offers. According to operators, the advantage of this scheme is that a prepaid user can continue to receive incoming calls 'for life' even after the recharge period is over, as against the current system of restricted validity, based on the value of the recharge package.
New entrants: menace of new entrants is related to factors from which, barriers of entrance difficulties of entry, high investments required... e.g. entry costs to argan domain are not that high.