India Mobile Industry SWOT Analysis Report

India Mobile Industry SWOT Analysis Report

SWOT Analysis

India Mobile SWOT
Strengths	Strong mobile subscriber growth is continuing, with the market benefiting from a healthy degree of competition The mobile market plays host to a large number of strategic investors including Singapore's SingTel, Vodafone of the UK, Telekom Malaysia, Norway's Telenor, Etisalat of the United Arab Emirates, Japan's NTT DoCoMo and Russia's Sistema Regulatory framework is generally seen as having helped facilitate competition and an attractive business environment for telecoms sector investors; the government continues to loosen the restrictions on foreign participation in the telecoms market Demand for mobile value-added services is strong and expected to grow
Weaknesses	Mobile market is still highly skewed towards prepaid users; inactivity levels are understood to be high The dominance of prepaid services has contributed to declining mobile average revenue per user (ARPU) levels Disagreements between the Telecom Regulatory Authority of India (TRAI) and government ministries have led to delayed policy implementation in a number of areas The country's regulatory framework has been under intense spotlight amid corruption and mismanagement scandals, which could affect investor confidence in the long term. Despite major ongoing investments, mobile network infrastructures in rural areas remain limited
Opportunities	The government is currently considering recommendations made by the country's telecoms regulator to allow the operation of MVNOs in the mobile market The government will cut licence fees by up to 33% for those operators whose services cover over 95% of the residential areas in a calling circle Deployment of NGN infrastructure and the launch of new multimedia mobile handsets should have a positive impact on data service usage All of the leading operators have been actively deploying multimedia content services, providing opportunities for content providers The proportion of prepaid users relative to postpaid subscribers remains high; this provides the operators with opportunities to migrate prepaid users to contract tariffs
Threats	Uncertainty as to whether spectrum allocations for 3G services will be sufficient; severe lack of spectrum in nine of the 22 calling circles Network capacity, particularly in the mobile market, could struggle to keep up with demand MNP will make migration between operators easier, thus adding pressure on operators to retain existing customers Price war is possible with competition intensifying, while consolidation may not be a far-off reality

India Wireline SWOT
Strengths	Regulatory framework is generally seen as having helped facilitate competition and an attractive business environment for telecoms sector investors; government continues to loosen the restrictions on foreign participation in telecoms market Healthy competition exists in the broadband sector, where state-owned operators BSNL and MTNL compete against a number of privately owned operators, including Bharti Airtel, Hathway Cable and Tata Communications Broadband subscription growth is strong, with the market registering a 40% increase in subscribers during 2010
Weaknesses	The market for fixed telephone lines is shrinking Fixed-line market is dominated by state-owned operators BSNL and MTNL. In rural India, BSNL controls over 99% of the telephone infrastructure Broadband growth is limited by a dependence on DSL, which accounted for over 85% of the market at the end of 2009 Extremely low fixed-line penetration rate limits the scope for DSL broadband growth
Opportunities	The issuance of several international long-distance and national long-distance licences has created opportunities for new companies to develop a market presence Strong demand exists among businesses for fixed voice and data services In late 2008, the TRAI removed the restrictions governing the provision of national long-distance VoIP services Significant opportunities exist to develop a wide range of alternative broadband technologies, including WiMAX and fibre In August 2008, the DoT declared that operators would be permitted to use WiMAX networks to offer voice services Launch of IP-based television services by several operators has the potential to stimulate demand for broadband services With almost 49% of internet subscribers still using dial-up connections at the end of 2009, there is potential to migrate existing subscribers to high-speed services
Threats	Fixed-line sector may decline at a more rapid rate than envisaged, with potentially negative consequences for ADSL growth Danger that the development of IPTV services will be hampered by high costs, low broadband usage and slow speeds Potential of VoIP services to be banned due to security threat posed, as India's Intelligence Bureau remains unable to track calls as of yet