Industry Analysis_Tower Companies - With CommentsV1

7/29/2019 Industry Analysis_Tower Companies - With CommentsV1

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Telecom InfrastructureTelecom Industry Analysis

Presented By:Abhishek AgarwalNirmal TomThomas GeorgeMadhusudan Verma

Amrit Dutta

Focus Area: Tower Construction Companies


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IndustryOverview

Tower Industryin India

Major PlayersIndustryAnalysis

Issues &Challenges


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Key Highlights

second largest network in the world.

lowest call tariffs in the world. revenue: 33,350 million USD.

industry has grown over 20 times in just

10 years.

expected CAGR: 15%

Chronology of Events:

1933- Radio Telephone system

introduced

1960- First STD route in UP 1979- First Optical Fiber System

1995- First mobile phone service, Delhi

1995- Internet introduced in metros

2002- Subscriber Base: 10.5 millions

2012- Subscriber Base: 960 millions

Key Statistics: Telephone

Fixed Lines: 31.53 million

Mobile phones: 930 million Tele-density: 79.28%

Rural Tele-Density: 33%

Key Statistics: Internet

Household Access: 137 million

Broadband Household Access: 14.31million

Internet Service Providers: 155

Household Access (%): 10.2%

Source: www.wikipedia.com


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Subscribers Statistics

Source: www.trai.gov.in


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Regulatory Framework: TRAI- formed under the TRAI Act 1997.

Objective: provide a transparent policy environment.

Mission: to create and nurture an environment which will enable

the quick growth of the telecommunication sector in the country.

Some of the functions include:

recommendation for new service provider.

ensure compliances.

monitor quality of service.

protect interests of consumer.

dispute settlement.


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IndustryOverview



Issues &Challenges


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Tower capacity addition at a CAGR of above 30% during FY 2006 to FY 2011

Number of towers in the country is ~400,000 today

May be a ground based tower (GBT) or a roof top tower (RTT)


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Industry Types: Formed through JVs like Indus towers.

Formed through de-merger like Reliance Infratel.

Independent tower companies like GTL.

Role: site planning & acquisition, obtaining of necessary regulatory

approvals, erection & commissioning of tower and allied

equipment. After the site starts radiating, the site maintenance including

provision of support services such as back-up power, air-

conditioning and security.


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IndustryOverview



Issues &Challenges


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Indus Towers Ltd.

JV b/w Bharti , Vodafone & Aditya Birla Telecom

Portfolio of more than 1,10,559 towers

HQ: New Delhi, Chairman- Akhil Gupta


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Bharat Sanchar Nigam Limited

State Owned Enterprise, Govt. of India

69000 towers

HQ: New Delhi, Chairman- RK Upadhyay


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Reliance Infratel Limited

Subsidiary of Reliance Communications Ltd.

45,000 towers

HQ: Mumbai, Chairman- Anil Ambani


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Viom Networks Limited

JV between Tata Teleservices & Quippo

Over 40000 towers

HQ: Gurgaon, Chairman- Subodh Bhargava


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Bharti Infratel Limited

Independent tower company by Bharti Group

Over 34000 towers

HQ: Gurgaon, Chairman- Sunil Bharti


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GTL Infrastructure Limited

Independent tower company.

Over 30,000 towers

HQ: Mumbai, Chairman- Manoj Tirodkar


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IndustryOverview



Issues &Challenges

STRENGTHS WEAKNESSES


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STRENGTHS

High Customer Potential

Second largest and fastest growing market

High FDI inflow

Huge Private sector small and medium

business base Booming semiconductor design industry

WEAKNESSES

Late adopters of new technology

High entry barrier due to huge investment

Lack of low cost long term financing

Low R & D, low patents and technology

standards still evolving Slow regulatory reforms

Primarily voice market

High imports and negligible export of hi-tech

products

OPPORTUNITIES

3G and 4G services

MVAS for healthcare, education, banking and

entertainment

Enormous equipment export potential

Employment Providing fibre connectivity to villages

Booming handset market

Foreign investment in the form of equity or

technology

Rural market Penetration

THREATS

Regulatory and legal policies

Political instability due to scams

Competition from foreign players

International trade agreements

Weak IPR agreements Indian tax levies and duties imposed

POLITICAL ECONOMIC


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POLITICAL

Better Regulatory Framework

Spectrum from Government.

Corruption & Scams

Taxation laws

Political Stability Special Incentives

ECONOMIC

GDP trends

less profit margins

capital intensive

high competition leading to price wars

high interest rates unemployment levels

SOCIAL

Modernization

Increasing Urbanization

Diversity in Population Life Expectations

Birth Rates

TECHNOLOGICAL

Govt. spending in R&D

Rate of obsolescence

Cost of technologyLevel of Productivity improvement.

ENVIRONMENTAL

Level of Harm to Env.

Level of priority towards development

NGOs

REGULATORY

Large no. of Players

Pricing Mechanism

Dispute settlement mechanism

Level of restrictions

Functioning methodology


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Degree of Rivalry:

High

High Exit Barriers

High Fixed Cost

Price Wars

Threat of New Entrants:

Low

Well Established Brands

Limited Spectrum

Availability

Licensing Requirements

Bargaining

Power of

Suppliers:

Medium

Limited No. of

Suppliers

Threat of

Substitutes: Low

VOIP

Online Chat

E-mail

Bargaining

Power of Buyers:

High

HighCompetition

Price Sensitive

Low SwitchingCost (MNP)


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IndustryOverview



Issues &Challenges


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Effective security system for Protection of Telecom Infrastructure

Need for evolving uniform policy for addressing Right Of Way(ROW)

issues

Availability of affordable Customer Premises Equipment(CPE)

Availability of adequate power for Telecom infrastructure

Addressing various issues related to EMF radiation

Need of encouragement for development of content/application as

per the regional requirement for wider

and faster penetration of broadband.

Availability of adequate spectrum need

for promoting R & D, Product

Development and indigenousmanufacturing


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Thank you!!

Industry Analysis_Tower Companies - With CommentsV1

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