Telecom Industry:
Telecommunication is communication over
long distance by means of technology involving various types of electromagnetic
signals.
Phone,
instant messaging, texting, emailing, etc. are all forms of telecommunications.
The
Global Telecom Industry:
The telecom industry worldwide is set to
reach around $2.3 trillion. Estimates suggest that the industry would grow to
$2.7 trillion by 2017. This represents a CAGR of 2.5%.
Below is a list of the 10 largest Telecom
companies in the world and facts and figures related to them:
1.
AT&T- Valued at $75.5bn,
AT&T is the largest telecom company in the world. Based out of Dallas, US,
the company generated $128bn of revenues and a profit of $18bn in 2013. The CEO
is Randall Stephenson and the company is looking for a growth that beats the
industry average. On May 18, 2014, AT&T announced it had agreed to
purchase DirecTV.
In the deal, which has been approved by boards of both companies, DirecTV
stockholders will receive $95 a share in cash and stock, valuing the deal at
$48.5 billion. Including assumed debt, the total purchase price is about $67.1
billion. The deal was aimed at increasing AT&T's market share in the pay-TV
sector; its existing U-Verse brand has modest market share (5.7 million users
compared to DirecTV's 20 million US customers as of 2014) and operates in only
22 states.
2.
China Mobile – Valued at $55bn,
China Mobile is the 2nd largest telecom company in the world. The
state-owned telecommunications company is the leading mobile phone service
supplier in China and claims to have the world's largest mobile network and
world's largest mobile customer base.
3.
Verizon – Valued at $53bn,
Verizon is the third largest telecom company in the world. Based out of New
York in the US and with LowellMcAdam as its chairman and CEO, Verizon has
consistently given some great results. With 120bn in revenue and 23 bn in
profit it stands as one of the largest profit producing companies in the world
4.
Vodafone – Valued at $40bn,
Vodafone is the 4th largest Telecom company in the world. Their CEO
Vittorio Colao and they are based in London, United Kingdom. Their annual revenue was 43bn pounds and
their profits was 439million pounds.
The
Indian Scenario:
The Indian telecom industry is a $39bn
(2013 figures). World over, telecom services have been recognized the as an
important tool for socio-economic development of a nation. It is most important
service needed for rapid growth and modernization of various sectors of the
economy. India is currently the world’s second-largest telecommunications
market and has registered phenomenal growth in the past few years. The reasons
for growth of the telecom sector in India are reform measures by the Government
of India, a private sector which is very active, and wireless technology.
The National Telecom Policy 2012 (NTP-2012)
was announced to increase public good by facilitating secure, reliable and
affordable telecommunication and broadband services in India. This along
with the free flow of foreign direct investment (FDI) has made the
telecommunications sector one of the most competitive and a top five employing
sector in the country. The telecommunications sector attracted foreign
investment to the tune of US$ 14bn in the period April 2000 to March 2014.
India’s GSM operators
added 2.58 million subscribers from rural India in April 2014, taking the total
to 297.16m. Also, Cellular Operators Authority of India’s (COAI) data implies
that the total GSM subscriber base increased by 5 million in April 2014 making
the total GSM subscriber base to 726.90m customers.
The COAI data also reports
that telecom provider Airtel provided the most number of customers in April,
about 1million new subscribers with Vodafone and Idea Cellular following.
It has been
forecasted by Ericsson that India's subscriber base will grow from 795m in 2013
to 1.145 billion subscribers by 2020.
Investment that have
taken place in the Telecom industry:
The telecom sector in India is
growing rapidly and due to this, there have been large investments recently.
Some of the ones worth noting are as follows:
- Aircel, to expand its retail business in India, plans to set up
200 more XPRESS stores in the country, with a view to taking the total number of these
franchisee stores to 500 by mid 2015.
- Reliance Jio Infocomm has signed deals with Tower Vision
and Ascend Telecom Infrastructure to share their towers. Ascend Telecom
has 4,250 while Tower Vision has a portfolio of 8,400 towers. These deals
will help the telecom unit of Reliance Industries to roll out its high
speed data and voice services sooner and at a lower price bracket across
India.
- Vodafone India has expanded its Project Samridhi to Karnal
in Haryana, with a view to boost sales and provide
employment opportunity to the rural women in the region. As per the
project, Vodafone has appointed a hundred women, to sell prepaid recharges
and e-top-ups.
- Reliance Communications (RCom) has entered into inter-circle
roaming partnerships with Tata Teleservices Ltd and Aircel to offer 3G services on a all-India
basis. This will enable Reliance Com’s GSM customers to access 3G services
while on roaming even outside its home network.
- Tata Communications has entered into strategic partnerships
with Interxion in Germany and Austria, the Australian company NEXTDC, and
Pacific Link Telecom in Malaysia. These partnerships will help the
company to expand data centre footprints in newer geographies.
- Vodafone Business Services (VBS) launched video
conferencing service for enterprises to offer an experience of best
in the world virtual face-to-face-like interaction with various
participants whenever you like, anywhere. The service offers seamless
conferencing experience and does not depend on device and network limits.
With the recent emphasis on telecom,
it is well set to become one of the fastest growers in the market.
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