Tata Communications Company Analysis
COMPANY ANALYSIS
TATA COMMUNICATIONS
- INDUSTRY ANALYSIS
- TRENDS:
Indian communication industry is one of the fastest growing industries in the world. It is estimated that it will achieve second position in the international telecom market. As per the statistical report published by Telecom Regulatory Authority of India (TRAI), in January 2010 the total no. of telephone users in India were 787.28 million and this figure crossed 806.13 million in January 2011. Thus Indian Communication industry has registered the growth of 2.39%. The wireless telephone subscribers figure reached to771.18 million in January 2011 from 752.19 million during the same period in 2010.
An increase in the revenues generated from both landline as well as mobile facilities triggered the growth of the communication industry. As per the Business Monitor International report, India is all set to include around 8 to 10 million cellular phone subscribers on monthly basis. At this tempo, the Indian communication industry is expected to encompass more than half of the population of India i.e. 612 million cellular phone users by mid 2012.
In addition, as per a research carried out by Nokia, the communications sector of India is estimated to surface as the biggest driving factor in India's GDP by contributing about 15.4% by the fiscal year 2014.
- COMPETITORS ANALYSIS:
PROMINENT PLAYERS:
There are mainly three types of competitors in telecom industry:· 1) State owned companies (BSNL AND MTNL).
2) Private Indian owned companies (RELIANCE INFOCOMM, TATA COMMUNICATIONS, TATA_TELESERVICES)·
3) Foreign invested companies (HUTCHISON-ESSAR,BPL, SPICE)
- SWOT ANALYSIS OF COMMUNICATIN INDUSTRY:
STRENGTHS:
- An attractive business environment with many emerging local as well as foreign players.
- Strong mobile- communication development, with latest technologies offering attractive services at faster pace.
- Due to faster growth of industry always attractive to foreign investors.
WEAKNESSES:
- Delayed execution of important policies due to issues among TRAI, Telecom ministry.
- Limited spectrum availability as well as interconnection charges issue between the private and state operators.
- Wireless Business services as well as prepaid services are growing at faster pace while wired services and post-paid services are lagging behind.
- Lower tariff plan, high levies and duties that reflects lack of funds to reinvest in this business which demands constant funds.
OPPORTUNITIES:
- Regulator recommended foreign players participation without any local player.
- All service providers are keen to provide more services which is great opportunity for them.
- Telecom industry is likely to see an excellent growth of services in rural as well as semi-urban areas.
THREATS:
- High 3G service charges may reflect negative influence on demand for licenses.
- Average Revenue Per User i.e. APRU is falling due to price war between different players.
- Huge capacity requirements can hamper the fast growth in mobile sector.
- PEST ANALYSIS OF COMMUNICATION INDUSTRY:
POLITICAL FACTORS:
The political factors affecting telecom industry are the ways in which the government interferes with the industry. Government puts confinements on the tariffs and phones that the telecommunications industry can produce and all new emerging technologies must stick to stringent set of government rules. Also safety and privacy regulations are required to be followed by the telecom industries as per the government policies.
ECONOMIC FACTORS:
The main factors influencing telecommunication industry are inflation rates, interest rates, GDP trends, price control, devaluation and revaluation, etc. Rival communication industries need to stay competitive but most companies have had to raise prices of services during the period of global recession. Competitive companies try to overcome others by offering alluring validity period offers to customers
SOCIAL FACTORS: