Nov 14, 2014
RELIANCE MANAGERSVENKATNEHAVASUDHAKAVITAYATIN
MARKET SWOT ANALYSIS
TELECOMMUNICATION SEGMENTS
INDUSTRY OVERVIEW - TELECOM
Subscriber growth 164
98
7653
44
0
60
120
180
2002 2003 2004 2005 Aug-06
CAGR - 38 %
Subscriber Growth - Mobile vs Fixed
4141
434238
143
52
7 13 34
0
35
70
105
140
175
2002 2003 2004 2005 2006
Mn
. su
bsc
rib
ers
Fixed (mn. subs) Mobile (mn. subs)
Segment Cellular reach (2003-04) Cellular reach (End 2006 - Est.)
Locations Population Locations Population
Urban ~ 1700 of 5200 towns
200 million ~ 4900 towns out of nearly 5200 towns
300 million
Rural Negligible Negligible ~ 350,000 out of 607,000 villages
450 million
ON 31ST AUGUST, 2008 – TOTAL CELLULAR SUBSCRIBERS = 30,02,97,160
MAJOR PLAYERS IN THE MARKET
Company Presence
Subscribers Jul 06 (mn)
Share (%)
Fixed Mobile Fixed Mobile
BSNL Government owned. Has ramped up GSM services. National presence (except Mumbai and Delhi)
37.4 17.7 74.7% 19.6%
MTNL Government owned. Operates in Delhi and Mumbai. 3.8 2.0 7.7% 2.3%
BhartiIntegrated operator, with presence in all sectors. Largest mobile services provider.
1.4 19.6 2.7% 21.7%
RelianceIntegrated operator. Plans expansion of GSM network apart from being the largest private CDMA operators.
3.0 17.3 6.0% 19.2%
Hutch Pure play GSM operator in 11 circles. 15.4 17.0%
IDEA Pure play GSM operator in 6 circles 7.4 8.2%
Tata Teleservices
Integrated operator (along with VSNL) with presence in all segments. Provides CDMA services in 20 circles
4.0 4.9 8.0% 5.4%
AircelOperates in 2 circles. Announced Plans to expand GSM footprint in North and North east
2.6 2.9%
Spice Pure play GSM player in 2 circles 1.9 2.1%
Others 0.4 1.4
Total 50 90
A DREAM COMES TRUE…“MAKE THE TOOLS OF INFORMATION AND COMMUNICATION AVAILABLE TO PEOPLE AT AN AFFORDABLE COST. THEY WILL OVERCOME THE HANDICAPS OF ILLITERACY AND LACK OF MOBILITY”
- DHIRUBHAI AMBANI
STARTED ON 28TH DEC, 2002 ON DHIRUBHAI AMBANI’S 70TH BIRTHDAY.
IT WAS CALLED RELIANCE INFOCOMM, NOW KNOW AS RELIANCE COMMUNICATIONS.
FIRST AD FEATURED DHIRUBHAI AMBANI AND MUKESH AMBANI.
THE MAIN AIM WAS “TO PROVIDE MOBILES TO EVERYBODY”
INTRODUCED CDMA TECHNOLOGY IN INDIA
PRICE SET TO ‘PENETRATE THE MARKET’
‘LOW’ PRICE TO SECURE HIGH VOLUMES
TYPICAL IN MASS MARKET PRODUCTS – CHOCOLATE BARS, FOOD STUFFS, HOUSEHOLD GOODS, ETC.
SUITABLE FOR PRODUCTS WITH LONG ANTICIPATED LIFE CYCLES
MAY BE USEFUL IF LAUNCHING INTO A NEW MARKET
PENETRATION PRICING
1. DHIRUBHAI AMBANI PIONEER OFFERFREE DIGITAL MOBILE PHONEUNLIMITED FREE INCOMING CALLSBILLING AT 15 – SECOND PULSE RATEONE – TIME DEPOSIT OF RS. 3000TELEPHONY CHARGES WERE RS. 600 PER
MONTHOUTGOING CALLS AT 10 PAISE FOR 15
SECONDSLONG DISTANCE CALLS AT 40 PAISE PER
MINUTE TO ANY RELIANCE PHONE ONLYFREE TEXT MESSAGING
2. MONSOON HUNGAMA SCHEME CAME OUT IN 1ST JULY, 2003CUSTOMERS WILL GET A MOBILE AT RS. 501
MONTHLY RENTAL OF RS. 200BIGGEST PROMOTIONAL SUCCESS IN THE HISTORY OF MOBILE PHONES
1 MILLION HANDSETS SOLD IN 10 DAYS
PRICES OF GSM HANDSET MOBILES FELL
3. PRE – PAID OFFERINGINTRODUCED IN FEB 2004GAVE CUSTOMERS FREE RECHARGE
VOUCHERS NEARLY THE COST OF THE HANDSET
CUSTOMER HAD TO PAY RS. 3500 FOR THE HANDSET
FREE RECHARGE VOUCHERS WORTH RS. 3240
AUTOMATIC ROAMING IN INDIA WITHOUT ANY EXTRA CHARGE
NO. OF SUBSCRIBERS IN MILLIONS
CUSTOMER GENERATION
DHIRUBHAI AMBANI ENTREPRENEURSHIP PROGRAM
ADVERTISING
R WORLD
PRODUCT INNOVATIONS
CUSTOMER SERVICE
CRITICIZED FOR CIRCUMVENTING EXISTING TELECOMMUNICATION POLICIES
MONSOON HUNGAMA GAVE RISE TO LOGISTICS, BILLING & COLLECTION PROBLEMS
EMERGENCE OF LEADERSHIP CRISIS
TWO YEARS OF LOSSES
STRONG MIX OF OWN & OUTSIDE CHANNELS INCLUDING DIRECT SALES AGENTS, RETAILERS, WEBWORLS & WEBWORLD EXPRESSES
OBTAINED LICENSES TO OPERATE IN 20 OF THE EXISTING 22 CIRCLES
ACQUIRED FLAG TELECOM FOR US$ 211 MILLION
PROFIT OF RS. 510 MILLION IN 2004-05
MOBILE REVOLUTION BROUGHT ABOUT BY RELIANCE
EXPANSION TO 640,000 VILLAGES AND OVER 5000 CITIES & TOWNS
PROVISION OF HIDGH SPEED NETWORKS
PROVISION OF THE LATEST TELECOMMUNICATION FACILITIES TO EVERY INDIAN AT THE PRICE OF A POST CARD