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PORTERS FIVE FORCES ANALYSIS ON

INDIAN TELECOMMUNICATION
INDUSTRY (WIRELESS)
BY,
RAKESH S K
GIRIRAJ NAVANDER
ANJANI KRISHNA K S
NARLA VENKAT NIKHIL
AJAY MILIND HALEPATY
KOPPINENI V N S ROHIT KUMAR

INTRODUCTION
Analysing the prospects of T-Mobiles entry into the Indian
telecommunication industry market.
T-Mobile International AGis a Germanholding companyforDeutsche
Telekom AG's various mobile communications subsidiaries outside Germany.
Based inBonn,Germany, itssubsidiariesoperatesGSM,UMTSandLTEbasedcellular networksinEurope, the United States,Puerto Ricoand theU.S.
Virgin Islands.
Globally, T-Mobile International subsidiaries have a combined total of
approximately 230 million subscribers.

INDIAN TELECOMMUNICATION
INDUSTRY
(WIRELESS)
It is the second largest in the world based on the number of telephone
users.
Indian telecom industry underwent a high pace of market liberalisation and
growth since the 1990s and now has become the world's most competitive
and one of the fastest growing telecom markets.
With a current subscriber base of 1,002 million, the total mobile services
market revenue in India is expected to touch US$ 37 billion in 2017.
The introduction of Mobile Number Portability (MNP) in India has made the
Indian Telecom market more competitive, in terms of service offerings and
quality.

VALUE CHAIN

PORTERS FIVE FORCES


MODEL
Porters Five Forces model is named after Michael E Porter that takes
into consideration five market forces that play out on any given company
or industry.
The five forces are
Power of Buyers
Power of Suppliers.
Threat of Substitutes.
Threat of new entrants.
Industry rivalry.
This model examines these forces that help us determine a given
companies strengths and weaknesses.
Porters Five Forces is also a way to view the potential risks to which
any given company may be exposed.

POWER OF BUYERS
Buyers maintain less product differentiation as all the companies offer similar
products for similar prices.
Buyer has no switching cost and low new connection cost.
Buyer has easy information access about the prescience of other operators in
the market.
Individual customers do not have any competition among themselves whereas
the enterprise costumes such as IT companies or Banks have competition
among themselves.
From the above points it can be concluded that the power of buyers is HIGH.

POWER OF SUPPLIERS
There exists 4 types of suppliers for the industry who are:
Government
Mobile Tower Companies
Sim Card Manufacturers
Mobile Phone Handsets
As there are number of suppliers providing Tower services hence their bargaining power is less
and also there is no threat of forward integration from them.
Sim Cards are manufactured in India and the operators procure the sim card from more than one
supplier so their bargaining power is less.
From the above points it can be concluded that the Power Of Suppliers is Low.

THREAT OF SUBSTITUTES
Threats from Substitutes Presence and easy availability of substituted products is a great threat for the
successful survival of any organization since it can enforce the company to cut the price of its product.
The revenue of the GSM or CDMA telephone service providers is being effected by the introduction of
internet telephonic services such as Whatsapp and Viber.
Customer spending on internet services for their mobiles is currently increasing at a faster rate when
compared to the voice calling services.
Issue of portability, reliability and flexibility associated with mobile phones, along with the switching
cost associated with the substitutes make mobiles a preferred choice.
From the above points it can be concluded that the threat of substitutes is MODERATE.

BARRIERS OF ENTRY
As this is a capital intensive industry one of the entry barrier is access to finance.
Also obtaining a telecom license can be a barrier to entry but license fee has
been reduced for new entrants.
Industry offers opportunity in areas such as rural telephony, 3g, ISD and also has
led to the entry of many foreign investors into the industry.
As the products are similar in nature new entrants will have nothing really
innovative to offer to the consumers.
From the above points it can be concluded that the entry barriers for a new
company into the industry is very HIGH.

INDUSTRY RIVALRY
The current market leader Bharti Airtel
faces high industry rivalry as the other
major players have a closer market
share.
All these companies are providing
similar services with the same
capabilities.
The market is highly value-driven and
price sensitive, companies are in
continuous pressure to deliver new
services while improving customer
experience and loyalty.
Innovation in the value added services
are quickly copied making industry
rivalry more prominent.

CONCLUSION
HIGH
POWER OF BUYER
INDUSTRY RIVALRY
MODERATE
ENTRY BARRIERS FOR NEW
ENTRANTS
THREAT OF SUBSTITUTES

LOW
POWER OF SUPPLIERS

Conclusion- T-mobile should not enter the Indian Telecom Industry even though the
power of suppliers is low as the entry barriers are high, and also in order to sustain
in a competitive industry would be a major challenge for the organization as there
are well established companies in the market, and the buyer enjoys the high
bargaining power.

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