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Telecom Market Dynamics and Competition Analysis

The document discusses the telecom industry in India. There is healthy rivalry between multiple private, public, and foreign operators, providing customers with competitive options. While suppliers have bargaining power due to various technologies required, buyers have high bargaining power due to over 10 operators available. New market entrants face high infrastructure and licensing costs. The industry is characterized by high rivalry between existing competitors and low threat of substitutes currently.

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Emanuel Prakash
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10 views4 pages

Telecom Market Dynamics and Competition Analysis

The document discusses the telecom industry in India. There is healthy rivalry between multiple private, public, and foreign operators, providing customers with competitive options. While suppliers have bargaining power due to various technologies required, buyers have high bargaining power due to over 10 operators available. New market entrants face high infrastructure and licensing costs. The industry is characterized by high rivalry between existing competitors and low threat of substitutes currently.

Uploaded by

Emanuel Prakash
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd

Basic Services : Fixed (Land line) Wireless: - CDMA, GSM

Handset Market Internet Services

Rivalry: Multiple operators: public, private & foreign. Healthy rivalry between the different players is playing into the hands of the customer, who is gaining the most out of this rivalry. Bargaining Power of suppliers: telecom operators. indeed,without high-tech broadband switching equipment, fiber-optic cables,mobile handsets & billing software, & telecom operators The suppliers are far too many and the operators are very few compared to the number of suppliers. This reduces the bargaining power of the suppliers due to competition among the suppliers. Bargaining Power of Buyers: For every buyer there are 10 to 15 operators available in the market this gives the buyer very high bargaining power, he gets to choose the best bargain he gets in the market.

Threat of New entrants:


Supply Side Economies Of Scale Infrastructure tenancy costs Other FC like BPO Demand Side Benefits Brand pull exists to some extent for brands like airtel /idea/vodafone

Customer Switching Costs Cost of new connection low Proposed number portability Capital Requirement Extremely high infrastructure setup costs Spectrum License cost
Incumbent Advantages Established brand image Reliability of network Uneven access to Distribution Channels Not a factor

Restrictive Govt Policy Spectrum and license allocation 3G and Number portability policy still unclear. 74% FDI cap. Minimum requirement of number of towers.

Power of the buyer : Lack of differentiation among the service provider Cut throat competition Customer is price sensitive Low switching costs Number portability to have negative impact

Supplier Bargaining Power Large number of suppliers. Shared tower infrastructure. Limited pool of skilled managers and engineers especially those well versed in the latest technologies. Medium cost of switching since changing their hardware would lead to additional cost in modifying the architecture. Overall influence on the industry - medium Rivalry among Existing Competitors : High Exit Barriers High Fixed Cost 6-7 players in each region 3 out of 4 BIG-Four present in each region Very less time to gain advantage by an innovation (Eg. Caller tunes, life time card) Price wars

Threat of Substitutes : Some Substitutes: -VOIP (Skype, Messenger etc.) -Online Chat -Email -Satellite phones None of the above a major threat in current scenario. Price-Performance trade-off very high. Issues of mobility and penetration with the substitutes

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