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电信行业及其收益
自电信行业产生以来已经发展了很多，也在世界经济的增长中发挥着重要作用(wiki, n.d.)。电信在早期使用的是视觉手势和口头信号，到19世纪30年代开始使用电报，经过20世纪的革命目前已经演变为无线通信的形式。据估计,2008年全球电信行业已经达到了3.85万亿 (普伦基特研究,2010)。
印度电信行业是世界上增长最快的，其客户超过了7亿人,是世界上第二大的电信网络(印度电信管理局,2010)。泰国电信有超过6000万的电信用户，它的电话普及度为95%止点(NTC -报告，2009)。
目前的研究强调对印度和泰国的环境分析,还基于分析对这两者进行了比较。
泰国电信行业
概述
电信用户(2009年9月)
总手机用户
邮资已付的用户
预付费用户
固话用户
电话普及度
泰国电信概述表(来源:NTC-TDC报告,2009)
泰国电信行业的环境分析
政治环境
泰国电信行业公司在1992年成立民主政府之前一直处于泰国军方的控制下 (思蒂, n.d.)。
Telecom Industry And Revenue Capabilities Economics Essay
Telecommunications has progressed a long way since its existence playing a critical role in the growth of world economy (wiki, n.d.) The telecommunication which involved use of visual gestures and oral signals in its earlier times to the use of telegraphs in the 1930s has evolved into the current form with the revolution of wireless telecommunication in the 20th century. It is estimated that the telecom industry has attained worldwide revenue of 3.85 trillion in 2008 (Plunkett Research, 2010).
Indian telecom industry is the world’s fastest growing telecom industry with a customer base of more than 700 million and has the second largest telecom network in the world (TRAI, 2010). Thai telecom has over 60 million telecom subscribers with a tele-density of 95% (NTC- TDC Report 2009).
The current research highlights environmental analysis of India and Thailand and also draws comparison between the two based on the analysis.
Thailand Telecom Industry
Overview
Telecom Subscribers(As on Sept 2009)
Total Mobile Subscribers
Post paid Subscribers
Pre paid Subscribers
Fixed Line Subscribers
Tele-density
Thai Telecom Overview Table (Source: NTC-TDC Report, 2009)
Environmental Analysis of Thailand Telecom Industry
Political
Thai telecom sector was under the corporate governance of Thai military until a democratic government came to existence in 1992 (Zita, n.d.). Following the power shift, the two state owned enterprises telephone Organization of Thailand (TOT) and Communication Authority of Thailand (CAT) undertook development of the sector in partnership with private sector under an agreement Build-Transfer-Operation (BTO) (Ibid.). In the year 2001 Thai telecom transformed itself to a more liberalized framework headed by NTC, adopting a much transparent licensing scheme. But the law upheld the BTO regulations signed earlier which caused chaos among few of the private enterprises. (Ibid.) This has ensured that the TOT and CAT could gain revenue as long as the BTO is valid (Ibid.) (See Appendix A). Never the less this led to increase in competition within the industry especially in the cellular and broadband markets (Ibid.). The new framework abolished the monopoly which existed in the industry and was a boon for its growth. Even though the policies of NTC contributed to the growth of telecom sector, the absence of quality regulatory rules and unclear regulations has left the service providers take command of the market (Moller, 2010). Recent reports suggest that the foreign companies operating in Thailand has voiced their displeasure in the Thai government’s policies in delaying the implementation of new technologies which are available in the other parts of the world (Ibid.).
Source: NTC Thailand (Telecom Structure)
Economic
Since 2006, the country has suffered a slowdown in investment due to the political turmoil during the period. (Amorn, 2009) This has created lack of confidence among investors delaying many investments (Ibid.). This together with the economic slowdown resulted in the decrease in revenue of the telecom sector during 2008 (Monetary policy Group, 2009) (See Appendix B). But the situation changed by 2009 as the number of subscribers increased in every quarter during this period (Cottrell, 2010). The GDP of the Thai economy was 4% in 2009 and the telecom sector has contributed 4% of the GDP (National Economic Development, 2010). The mobile phone market has created almost 400 billion baht, equivalent to 13 billion US dollar, to Thai economy (Hill and Knowlton, 2008). Furthermore, it offered more than 150,000 employment opportunities, 15,000 direct and 135,000 indirect and multiplier effect jobs for Thailand (Ibid.).
Total employment in Telecom Sector
The mobile penetration in 2001 was 13.3 million which eventually increased to 60 million in 2009. (NTC-TDC Report, 2009)
Source: Total Access Communication
Today, Thailand is one of the fastest growing regions in the cellular phone industry in South East Asia, over 73% Thai have been own at least a mobile phone, the rate of mobile market growth at 16.9% in 2009 (Ibid.). Furthermore, the voice communication service is more popular than non-voice services with 98.38% revenue generated from the former (Ibid.).
Social
According to Phya Anuman Rajadhon, “In this country, the village is the unit, and the people's habits, and customs were based mainly on agriculture and religion” (Rajadhon, 2002). The growth in the telecom sector has helped in global food safety by being able to trace the products from farms to store shelves. Thus it has improved social development and commercial trade in the country (CAT telecom, 2010). The telecom industry has also helped another key revenue generator, the tourism industry by networking the industry fueling its growth and thus the economy (NTC-TDC Report, 2009). But the Thai telecom has been ineffective and completely out in the area of business use of Information and Communication technology (ICT) services which has restricted the growth in economy (Ibid) (Appendix C). The government is planning to invest more into educating the society to ensure efficient use of ICT (Ibid.).
Technology
The Thai telecom uses the 2G spectrum for its cellular subscription and broad band for its internet connectivity (NTC, 2009). The main technologies in cellular communication are GSM and CDMA and for broadband is fixed line networking (fiber optics) (Ibid.). But further improvement is necessary in fixed line networking with ensuring internet service providers can connect to fixed line networking with ease (Ibid.). The NTC had revised the licensing for 3G spectrum attracting more foreign investors to the market (Phromchanya, 2010). But the recent reports suggest the court has stayed the 3G auction putting more pressure on private operators, making Thai the only country in South East Asia without 3G technology (Reuters, 2010).
Micro Analysis of Thailand Telecom Industry
Michael Porter’s five forces
Rivalry among competitors
Advanced info Services (AIS) and Total Access Communication (DTAC) are the market leaders in Thailand in the cellular GSM sector with more than 80% of total share whereas Hutchison CAT Wireless Multimedia(HCWT) are the single CDMA operators with 0.8 million subscribers by second quarter of 2010 (LexisNexis, 2010). TRUE telecom is the market leader in the broadband sector (Ibid.). The total number of cellular subscribers is more five times the fixed line subscribers with more service providers in direct competition with one another (NTC-TDC Report, 2009). There is no chance for competitors to challenge the existing cellular sector with AIS and DTAC holding a clear margin ahead of others. The Hutchison’s recent decision to withdraw from the GSM market due to limited growth opportunities proves the superiority of AIS and DTAC in the market (LexisNexis, 2010). The approval of the Thai government allowing CAT to acquire full stake of Hutchison’s CDMA would result in a monopoly of CDMA services in the country (Wireless Federation, 2010). The clear dominance of few telecom players over its competitors has meant there is too little growth for the rivals making it unattractive for companies to enter into.
Source:NTC
Power of consumers
With very limited competition in the market with very few telecom companies holding a clear margin over their competitors the power of consumer can be considered very moderate. Due to the lack of vision from the government and in some cases the monopoly of CAT; the subscribers are often the receiving end of outdated or no services. For example the Internet penetration in Thailand is about 20% but only 5% of total population has access to internet at home due to lack of infrastructure, the ADSL broadband service (NTC TDC-Report, 2009). But the introduction of number portability by the end of 2010 has been encouraging and will certainly affect the consumer decisions in future (fever, 2010) But at present, the limited quality service providers have decreased the bargaining power of the consumer.#p#分页标题#e#
Power of supplier
The telecom industry needs equipments for fixed line and cellular operations. As the telecom suppliers are usually global business houses which are quite high in number the power of suppliers is usually less. But the lack of Information Communication Technology in the nation has meant that does not have any backward integration and is reliant on the suppliers making the power of suppliers moderate (TDC-NTC 2009). But the foreign investors who are aware of the consequences play a major role in ensuring the suppliers have limited power over the telecom. The lack of proper regulations gives an advantage to the suppliers who could compromise for quality which in turn have negative impact on the telecom operator.
Threat of new entrants
The telecom sector in the country as mentioned above is dominated by few operators such as AIS, DTAC and CAT. These existing players are strong and hold the major share in the market. The new firms are also reluctant to invest in the current scenario and are waiting for a more transparent policy structure especially in fixed line (broadband) and 3G spectrum licenses. Also the fact that the mobile market has around 62 million customers, 101% of total population has meant there is little scope for growth has prevented new firms from investing. Thus the current scenario is unattractive for new entrants to enter the market (Scandasia, 2010).
When a new company enters the market they will have to introduce new plans and offers which are much reliable, cheap and cost effective than the other providers. Also new entries will have to set up a broad and efficient coverage for its network which enables users to communicate and use its services effectively. This will involve cost of setting up the network and also to bring in cheaper plans and services. Reducing the tariff rates and plans means that the company will have to sacrifice on its costs.
The number portability to be implemented by the end of this year has encouraged for the new firms (Fevre, 2010). Hence these factors, it is certainly difficult for the new entrant due to the high switching cost, especially, the capital requirement to set up the signal as well as the dominance of current rivals.
Threat of substitutes
The substitutes for telecom sector as the VOIP and email services. The VOIP services include use of software such as Skype and yahoo and could be treated a minor threat. But the insufficient infrastructure meaning the broadband service is limited in the country has meant these substitutes do not pose any major threat to the telecom sector (Appendix 3). Thus the lack of substitutes is not a positive sign after all for new corporate to enter the market.
Thailand Telecom: Five Force Diagram
Overview of Indian Telecom Industry
Telecom Subscribers(As on March 2010)
Total Subscribers
% change over previous year
Urban Subscribers
Rural Subscribers
Tele-density
Overview of the telecom Industry (Source: TRAI Annual Report 2009)
Environmental Analysis of Indian Telecom Industry
Political
The political situation in India is very stable with a strong democratic coalition government headed by the Indian National Congress ruling the country. In spite of different ideologies within political parties, economic liberalization through foreign direct investment has been accepted as a key factor for the development of the nation (See Appendix B1). The investor friendly policies by the government have encouraged both domestic and foreign investors especially the telecom investors sensing the rapid growth opportunities in the telecom industry. Business houses ranging from small and medium sized enterprises to fortune 500 companies have invested in the telecom sector due to sheer size and potential of the market (See Appendix B2). “Recognizing that the telecom sector is one of the prime movers of economy, the Government’s regulatory and policy initiatives have been directed towards establishing a world-class telecommunications infrastructure in the country” (Levi, 2007). The government has designed the policies such that the state owned and private operators enjoy the same level of playing field generating a sense of equality among the investors.
The main regulatory bodies in the telecommunication sector are the Telecom Regulatory Authority of India (TRAI) and Telecom Disputes settlement & Appellate Tribunal (TDSAT). (See Appendix B3) The regulatory body monitors the telecom sector based upon “The Telecom Policy 1999”, created recognizing the importance of telecom sector in the social and economic growth of the nation (TRAI, 2005). The Telecom Policy 1999 prescribes the rules for investment and operation including incentives and concession for operators for state owned and private companies (Ibid.) (See Appendix B4).
Economy
Indian economy is the fourth largest in the world with reference to GDP where the country’s Gross Domestic Product (GDP) expanded by an annual rate of 8.8% in the second quarter of 2010. Telecom sector has brought in an “all-inclusive growth” to the nation, contributing to GDP rise and provided employment opportunities. In the year 2010, the telecom industry has contributed 5.6% in GDP. The telecom industry also attracted an FDI of $2.35b in 2009, which was about 10% of the total FDI during the period (Mediamughals, 2009).
Source: TRAI
Even though it’s difficult to calculate the full employment potential of telecom industry it is roughly calculated that the industry provides employment opportunities to 10 million people, 3 million direct employments and 7 million indirect employments (Economic Times, 2007). Growth in the number of telecom subscribers is driven by the entrance of new services providers, strong competition, flexible plans and aggressive marketing campaigns. The fall of mobile prices and the more reduced tariff for distance based calls has also fueled the economic growth. A total of 117 million mobile handsets were sold in 2009 alone revealing the potential growth of Indian Mobile market. When considering a region, the growth in telecom industry has a positive impact on the economic activity of a region, contributing to an average growth rate of 5% or more (Business India Intelligence, 2010). The tele-density has reached more than 50% in the fiscal year 2009-10, powered by improved network infrastructure. The telecom sector is bound to grow at a CAGR of around 11% between 2008 and 2012 fueled by the increase in mobile subscribers (TRAI, 2010). The country is fourth largest economy in terms of purchasing power parity (PPP) with a high potential consumer market with 300 million people constituting branded market, growing 8% per annum which provides attractive investment in telecom (Govt. of India, 2010).
Source: TRAI Annual Reports
Social
Further, analyzing the socio cultural aspects of the country, the standards of living in India has grown tremendously. Census report indicates that proportion of people aged between 15 and 59 is around 60% in 2010 and this figure is estimated to reach 65% by 2020 (Govt. of India Ministry of Labour and Employment India, 2010). In absolute numbers it is estimated that around 63.5 million new entrants in the working age group making India the youngest nation in the world (Ibid.). This provides a huge potential for domestic as well as foreign investment in the telecom sector.
Technology
Moving towards the technological aspects of the nation, India today is one of the top ranked countries in the field of research and development. From building its own space satellite to developing the super computer, rated among the top 10 supercomputers, Indian science has proved its dominance in the emerging scenario and competitive market. The Indian telecom has also witnessed immense growth and diversified over the past decade with the aid of newer technologies. From Fixed line telephone to wireless networks, the country has seen a huge transition with technology such as GSM, CDMA and fiber optic communication. Further, the recent launch of 3G and IPTV will fuel the growth of telecom industry in coming years.
Structure of Telecom Industry
Source: TRAI
Geography
India’s varied geographical area provides potential foreign investment opportunities in the telecom sector (Levi, 2007). The mountainous regions within the North East and Central India are a prospective and challenging market for foreign investors (Ibid.). Also the huge digital divide which exists within the regions is a key concern of the government and opportunity lies in the telecom industry to reduce this divide (Ibid.).
Microanalysis of Indian Telecom Industry
Michael Porter’s five forces Analysis
Rivalry among competitors
The telecom industry is capital intensive with a lot of money spend on fixed costs, developing the infrastructure and on spectrum license. This has raised the exit barrier pretty high forcing the competitors to be innovative to sustain. But the technical and marketing innovation is short lived due to the lack of intellectual property protection laws allowing the competitors to adapt a more innovative strategy within a short span. The emergence of six to seven players within a region with 3 or even 4 major players has forced the companies to adapt quickly to gain profit. Also the emergence of new competitors like TATA-DOCOMO has made the competition even fiercer. The introduction of second billing voluntary by TRAI has added a new dimension to the competition. This has had an adverse effect on EPS and net profit of the existing operators. These factors have made the telecom industry unattractive for companies to enter into.#p#分页标题#e#
Source: TRAI
Power of consumers
The Indian telecom industry is the fastest growing industry with 700 million telephones, the wireless subscribers constituting a major share with 67 million connections (TRAI, 2010). The number of broadband subscribers has also increased to 9 million in March 2010 with an annual growth of 41% (Ibid.). The increased completion and the commoditization of the telecom industry have resulted in the increased bargaining power of consumers. There is a wide range of options available to the consumers in the telecom industry which has forced the operators to provide the best service at cheapest rate. Furthermore, a bulk of customers is from the middle class, who are very price sensitive in nature. Low switching cost and lack of differentiation among the subscribers has also increased the subscriber power in the market. Also the newly introduced number portability will give more power to the consumer allowing them to switch to better service providers (The Hindu, 2010).
Power of suppliers
The telecom industry needs many equipments ranging from mobile phone handsets, fiber optics and aluminum cable providers and software suppliers. There are a large number of suppliers in the market, thus providing a lesser bargaining power to the suppliers. The major telecom companies like reliance, tata and airtel have backward integration in the mobile handset, software development and network tower business thereby minimizing the bargaining power of suppliers. The telecom companies have hired skilled managers and engineers who are well versed in technologies increasing the pressure on suppliers. The high switching cost for equipments and software has forced the supplier to be tied to a customer which is positive for the industry. The quality of products and services provided by the supplier has a great impact on the growth of a company and affects the industry reputation as a whole.
Threat of new entrants
The existing players in the telecom sector are well established with a strong network across the nation. The incumbents continue to grow with their brand value, network presence and economic stability. It is thus difficult of new entrants such as (TATA DOCOMO, unitec and MTS) to compete with the existing big players such as (airtel, Vodafone, Reliance and BSNL). The average revenue per user (ARPU) which is declining and the increasing cost of acquisition poses a serious threat to the entry of new competitors. The existing telecom companies are using 900MHz spectrum, whereas the new players are using 1800MHz spectrum, which is considered to be less efficient (Business Standard, 2010). This makes huge difference as far as the call qualities are concerned. With 1800MHz, the new players need to place more mobile signal towers as compared to the existing players who use a 900 MHz spectrum. This could affect the efficiency of the new players. Also the profit they could make is very low because of this. Also the infrastructure tenancy cost is very high and the returns from the investment are a long term process. But the tower sharing concept between the competitors has reduced the burden of high investment making the sector moderately attractive for them (Chaudhary, 2007). The number portability law allowing user to switch between competitors without changing the existing number has also encouraged new entrants to enter the market posing a threat for the existing players. Further, the capital required for high, infrastructure setup and acquiring spectrum license has negative impact on new entrants entering the market.
Threat of Substitutes
The threat of substitutes can be from within the telecom industry or outside. Technologies which are getting popular among people are the internet telephony, VOIP (Skype and messengers), email and satellite phones can be considered as a major threat in the future if not in the current scenario. Among them, VOIP has emerged as a major threat becoming increasingly popular among youngsters. But the current penetration rate of the substitutes does not possess any major threat the telecom sector. The price to performance trade off in the present telecom sector is pretty high thus dominating over the substitutes with a clear margin. The absence of any major threat is very encouraging for new corporate to enter into the market.
Indian Telecom: Five Force Diagram
Comparison between the Indian and Thai Telecom Industry
India has over 1 billion population of which 50% is estimated to be aged below 25 providing huge potential for investment.
Thailand has a population of around 65 million of which 70% of the population is aged between 15-70, a smaller market compared to India.
Economy
The GDP of the country is 8.8%; the telecom sector contributing 5.6% in GDP.
The Thailand recorded a GDP of 4% in Dec 2009; the telecom sector contributing 4% in GDP.
Political
India has a democratic constitution reelected every five years. The telecom sector is regulated by an independent body TRAI.
Thailand has a democratic constitution, but politically unstable. The telecom sector Is regulated by an independent NTC.
Technology
India is very rich in research and development in the field of technology.
Thailand is still lagging in the field of technology with few government initiatives in this sector.
Micro Analysis
India
Thailand
Competitiveness
The presence of four or five big players in each sub sectors (cellular, broadband and satellite services) in the market has led to tough competition.
There are only few dominant players in the market (DTAC, AIS in GSM and TRUE in broadband) leading to a much less competitiveness.
Supplier Power
The Indian telecom has both domestic as well as foreign suppliers reducing the bargaining power of suppliers. Moreover the backward integration measures by many mobile companies have led to the reduced bargaining power of suppliers.
The Thai telecom industry is dependent on foreign suppliers increasing the bargaining power of suppliers. The inability to develop ICT has also increased the bargaining power of suppliers
Consumer Power
The wide range of operators in the sector has increased the power of consumers. Also the newly introduced number portability has given more power to them.
There are a very few companies holding the majority of market share which has reduced the options for customers thereby reducing their power. Also the lack of clear regulatory policies has given more power to the companies than the consumers.
Substitutes
There is no major threat of substitutes for the telecom sector even though VOIP can be considered as an alternative.
The lack of infrastructure and technology has meant there is no major substitute for the telecom sector.
New Entrants
The well established network and services of existing companies has made it difficult for new entrants to make an impact in the market. But the introduction of technologies like 3G and VOIP and the change in regulatory policies has attracted few new entrants into the market.
The existing well dominant players make it difficult for the new entrants to survive in the market. Also the unclear government polices has caused new entrants from investing into the market.
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