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MOBILE INDUSTRY. Through Michael Porter’s Five Forces Ana lysis Presented By- Anubhav Bhushan. Existing Competitive rivalry. Major Players State owned companies - BSNL, MTNL Pvt. Indian owned companies-Reliance, Tata Tel Foreign invested companies-Vodafone, Idea, Spice.
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MOBILE INDUSTRY Through Michael Porter’s Five Forces Analysis Presented By- AnubhavBhushan
Existing Competitive rivalry • Major Players • Stateowned companies - BSNL, MTNL • Pvt. Indian owned companies-Reliance, Tata Tel • Foreign invested companies-Vodafone, Idea, Spice
Negotiating power of buyer • Service provider are the main driver whereas equipment manufacturers are witnessing growth and decline in successive quarter as sales is dependent on order undertaken by companies.
Negotiating power of supplier • Role of supplier is almost negligible • Mobile handset supplier • Nokia, Sony Ericsson,Motorola,Siemans • Some companies have their own like Reliance and Tata indicom • Tie up with other companies like Reliance have tie up with Samsung and LG
Negotiating power of supplier Contd......... • Optical fibre supplier, Aluminium supplier - Bargaining power is limited • Software service provider-TCS,INFOSYS,WIPRO have bargaining power
Threat from new entrants • Various opportunities for foreign companies in various areas such as- 3G, international long distance call, Value added service • 3rd largest sector to attract FDI in post liberalisation era • Large no. Of player are emerging in the market on the national level from its state level existence such as- Aircel, Virgin, Spice, Idea, Uninor
Substitute to product • Wide range of service are available- • VoIP ,Broadband carrier. • Internet telephone- Emerging as the best option
Nature of Industry • Perfect competition • Differentiation practice by different player • various offer • free issue of SIM • Less call rate • Relative strength and weakness • BSNL -- Network in every nook and corner, network busy • Airtel
Strength • Huge wireless subscriber potential. • One of the fastest growing sector. • Consumers are ready to pay for cutting edge services. • FDI limit are 74%.
Weakness • Wide scales of consumer churn in this sector. Now the number portability is coming up so it will increase the consumer churn rate. • Value Added Services (VAS) is restricted because of literacy and language problems. • Problem of limited spectrum availability and the issue of interconnection charges between the private and state operators.
Opportunities • To offer more VAS on GSM, CDMA. • Language independent services. E.g. sending the message in local language, information available in local language. • Foreign investments in form of equity or technology.
Threat • Weak Intellectual Property Rights (IPR). • Threat of low cost service providers. • A huge initial fixed cost is required to make a mark in rural markets. Achieving break-even under these circumstances may prove to be difficult.
Emerging Trend • Growth rate - CAGR of around 15% • Launch of advanced telecom service like 3G and IPTV will advance the growth of industry. • 5.5 million Indians are signing up each month. • GSM subscriber base increases by 13.7 million in January
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