RELIANCE MANAGERSVENKATNEHAVASUDHAKAVITAYATIN

MARKET SWOT ANALYSIS

TELECOMMUNICATION SEGMENTS

INDUSTRY OVERVIEW - TELECOM

Subscriber growth 164

98

7653

44

0

60

120

180

2002 2003 2004 2005 Aug-06

CAGR - 38 %

Subscriber Growth - Mobile vs Fixed

4141

434238

143

52

7 13 34

0

35

70

105

140

175

2002 2003 2004 2005 2006

Mn

. su

bsc

rib

ers

Fixed (mn. subs) Mobile (mn. subs)

Segment Cellular reach (2003-04) Cellular reach (End 2006 - Est.)

Locations Population Locations Population

Urban ~ 1700 of 5200 towns

200 million ~ 4900 towns out of nearly 5200 towns

300 million

Rural Negligible Negligible ~ 350,000 out of 607,000 villages

450 million

ON 31ST AUGUST, 2008 – TOTAL CELLULAR SUBSCRIBERS = 30,02,97,160

MAJOR PLAYERS IN THE MARKET

Company Presence

Subscribers Jul 06 (mn)

Share (%)

Fixed Mobile Fixed Mobile

BSNL Government owned. Has ramped up GSM services. National presence (except Mumbai and Delhi)

37.4 17.7 74.7% 19.6%

MTNL Government owned. Operates in Delhi and Mumbai. 3.8 2.0 7.7% 2.3%

BhartiIntegrated operator, with presence in all sectors. Largest mobile services provider.

1.4 19.6 2.7% 21.7%

RelianceIntegrated operator. Plans expansion of GSM network apart from being the largest private CDMA operators.

3.0 17.3 6.0% 19.2%

Hutch Pure play GSM operator in 11 circles.   15.4   17.0%

IDEA Pure play GSM operator in 6 circles   7.4   8.2%

Tata Teleservices

Integrated operator (along with VSNL) with presence in all segments. Provides CDMA services in 20 circles

4.0 4.9 8.0% 5.4%

AircelOperates in 2 circles. Announced Plans to expand GSM footprint in North and North east

  2.6   2.9%

Spice Pure play GSM player in 2 circles   1.9   2.1%

Others  0.4 1.4

   

Total   50 90    

A DREAM COMES TRUE…“MAKE THE TOOLS OF INFORMATION AND COMMUNICATION AVAILABLE TO PEOPLE AT AN AFFORDABLE COST. THEY WILL OVERCOME THE HANDICAPS OF ILLITERACY AND LACK OF MOBILITY”

- DHIRUBHAI AMBANI

STARTED ON 28TH DEC, 2002 ON DHIRUBHAI AMBANI’S 70TH BIRTHDAY.

IT WAS CALLED RELIANCE INFOCOMM, NOW KNOW AS RELIANCE COMMUNICATIONS.

FIRST AD FEATURED DHIRUBHAI AMBANI AND MUKESH AMBANI.

THE MAIN AIM WAS “TO PROVIDE MOBILES TO EVERYBODY”

INTRODUCED CDMA TECHNOLOGY IN INDIA

PRICE SET TO ‘PENETRATE THE MARKET’

‘LOW’ PRICE TO SECURE HIGH VOLUMES

TYPICAL IN MASS MARKET PRODUCTS – CHOCOLATE BARS, FOOD STUFFS, HOUSEHOLD GOODS, ETC.

SUITABLE FOR PRODUCTS WITH LONG ANTICIPATED LIFE CYCLES

MAY BE USEFUL IF LAUNCHING INTO A NEW MARKET

PENETRATION PRICING

1. DHIRUBHAI AMBANI PIONEER OFFERFREE DIGITAL MOBILE PHONEUNLIMITED FREE INCOMING CALLSBILLING AT 15 – SECOND PULSE RATEONE – TIME DEPOSIT OF RS. 3000TELEPHONY CHARGES WERE RS. 600 PER

MONTHOUTGOING CALLS AT 10 PAISE FOR 15

SECONDSLONG DISTANCE CALLS AT 40 PAISE PER

MINUTE TO ANY RELIANCE PHONE ONLYFREE TEXT MESSAGING

2. MONSOON HUNGAMA SCHEME CAME OUT IN 1ST JULY, 2003CUSTOMERS WILL GET A MOBILE AT RS. 501

MONTHLY RENTAL OF RS. 200BIGGEST PROMOTIONAL SUCCESS IN THE HISTORY OF MOBILE PHONES

1 MILLION HANDSETS SOLD IN 10 DAYS

PRICES OF GSM HANDSET MOBILES FELL

3. PRE – PAID OFFERINGINTRODUCED IN FEB 2004GAVE CUSTOMERS FREE RECHARGE

VOUCHERS NEARLY THE COST OF THE HANDSET

CUSTOMER HAD TO PAY RS. 3500 FOR THE HANDSET

FREE RECHARGE VOUCHERS WORTH RS. 3240

AUTOMATIC ROAMING IN INDIA WITHOUT ANY EXTRA CHARGE

NO. OF SUBSCRIBERS IN MILLIONS

CUSTOMER GENERATION

DHIRUBHAI AMBANI ENTREPRENEURSHIP PROGRAM

ADVERTISING

R WORLD

PRODUCT INNOVATIONS

CUSTOMER SERVICE

CRITICIZED FOR CIRCUMVENTING EXISTING TELECOMMUNICATION POLICIES

MONSOON HUNGAMA GAVE RISE TO LOGISTICS, BILLING & COLLECTION PROBLEMS

EMERGENCE OF LEADERSHIP CRISIS

TWO YEARS OF LOSSES

STRONG MIX OF OWN & OUTSIDE CHANNELS INCLUDING DIRECT SALES AGENTS, RETAILERS, WEBWORLS & WEBWORLD EXPRESSES

OBTAINED LICENSES TO OPERATE IN 20 OF THE EXISTING 22 CIRCLES

ACQUIRED FLAG TELECOM FOR US$ 211 MILLION

PROFIT OF RS. 510 MILLION IN 2004-05

MOBILE REVOLUTION BROUGHT ABOUT BY RELIANCE

EXPANSION TO 640,000 VILLAGES AND OVER 5000 CITIES & TOWNS

PROVISION OF HIDGH SPEED NETWORKS

PROVISION OF THE LATEST TELECOMMUNICATION FACILITIES TO EVERY INDIAN AT THE PRICE OF A POST CARD