Telecom Equipment Industry

Introduction

Indian telecom is the fastest growing telecom industry in the world

2008-09 20% growth

Growing at an
average rate of
2007-08 24% growth 16% per annum
since 2003
2006-07 43.5% growth

Liberal Government policies

Telecommunications sectors attracting a major chunk of the FDI to India
 Top 10 Indian Telecom Equipment Players

Company  Revenue (In Rs Crore) Growth (%)  07-08 Rank

  FY 07-08 FY 08-09    
Nokia 15000 16567 10 1
Ericsson 8000 10310 29 2
Nokia Siemens Networks 7779 9840 26 3

Alcatel Lucent 7000 8050 15 4

Wipro 5585 5692 2 5
Cisco 5046 4693 -7 6
TCS 3978 4233 6 7
Infosys 3605 3926 9 8
ZTE 3000 4800 60 9
Huawei 2700 6240 131 New

Source: Cybermedia's Voice&Data Annual June 2009

 Market Segments

Voice Solutions, Routers, Switches, Structured cabling,

Modem, Audio Video Conferencing, Network Storage

Enterprise
Equipment

Broadband infrastructure
Wireless infrastructure Carrier Mobile Handsets
Equipment Phones Fixed Phones
Telecom software
Transmission
Cables, WiMAX
 Top 10 Mobile Handset Players in 2008-09

Company FY 07-08 FY 08-09 Growth (%)  Market Share

Nokia 15000 16567 10% 64

Samsung  1500 2590 73% 10

Sony Ericsson 3083 1555 -50% 6

ZTE 850 1440 69% 5.6

LG  1500 1165 -22% 4.5

Motorola 1200 906 -25% 3.5

Haier 300 388 29% 1.5

Huawei 320 360 13% 1.3

Others 250 939 275% 3.6

Total 24003 25909 8% 100

Source: Cybermedia's Voice&Data Annual June 2009 Revenues in Crores

 Market Share of Handset Players in 2008-09

LG , 4.5
ZTE, 5.6 Motorola, 3.5
Huawei, 1.3 Nokia
Sony Ericsson, 6
Haier, 1.5
Samsung 
Samsung , 10 Others, 3.6
Sony Ericsson

ZTE

LG 

Motorola

Huawei

Haier

Nokia, 64 Others

Source: Cybermedia's Voice&Data Annual June 2009 Revenues in Crores

 Market Structure

Parameter Telecom Equipment Industry

Sellers Several small and big corporates

Buyers Telecom Service Providers, Corporates, Urban

and rural population
Product Features, cost, user-friendliness
Differentiation
Entry / Exit Govt. regulated

The Handset manufacturing industry can be categorized as a OLIGOPOLISTIC

COMPETITION, where there is marginal product differentiation and any
change in price by one firm will affect others.
 Demand for Mobile Handsets in India

The ICA estimates the Indian handset market to have a volume of

130 million units this year worth Rs. 30,000 crores, up from 101
million units in 2008 for a volume of Rs. 26,000 crores. In 2011, the
handset market is expected to touch a volume of 145 million and a
value of Rs. 35,000 crores. Source: Economic times

*ICA (The Indian Cellular Association), apex body of the range of mobile
industry players barring the mobile operators.
 Factors influencing Demand

Increase in the Mobile subscriber base:

Mobile Subs.Base (millions)

2008

2007

2006

2005

2004

0 50 100 150 200 250 300 350 400

Mobile Subs.Base (millions)

 Demand forecasting using Linear Regression
Output
Total handsets MobileSubs.Base
Year sold(millions) (millions)
2009 132.52 397.92
2010 154.8 473.47
2011 177.08 549.02
2012 199.36 624.56

Total handse
2013 221.64 700.11
CAGR=11%
800.00
y=75.547x- 151376
700.00 2
R =0.9594
600.00
500.00

Year sold(million
400.00
300.00
y=22.28x- 44628
200.00 2
R =0.9574
100.00
0.00

2004 15
2002 2004 2006 2008 2010 2012 2014

Total handsets manufactured(millions)

MobileSubs.Base(millions)
Linear (Total handsets manufactured(millions))
Linear (MobileSubs.Base(millions))
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