Swot Analysis of Rcom

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SWOT analysis of RCOM in 2006: Strengths: * Strong brand recognition * Well Integrated operations * Significant execution and technological capabilities * Strong distribution channel ( RWorld, FLAG Telecom ) * Unified License obtained by RCom in 8 circles Weaknesses: * Low ARPU compared to competitors * Weakness in Rural Market * Low capabilities in Ethernet and application delivery services Opportunities: * Low penetration Rates * Strategic Alliances ( FLAG) Global expansion due to resource based acquisition of FLAG * Huge GSM subscriber base (76. 67%) with economies of scale for GSM operators * Telecom policy in more in favor of GSM than CDMA * Higher ARPU in GSM sector Threats: * Increasing competition with domestic players * Decreasing ARPU due to competition * High regulation in Indian Telecom sector * Changing political scenario could change Regulations * High switching costs for customers to move to GSM Indian Telecom Industry in 2006 * India’s Telecom Network had 203 million connections Third largest in the world and the second largest among the emerging economies of Asia * One of the key sectors responsible for India’s resurgent India’s economic growth ( 1% of GDP ) * Contributed 30 percent to India’s total service tax revenue * Liberal Government policies to provide easy access to telecom equipment and fair regulatory framework * Robust growth in Tele-density (11. 4% in 2006) * Increasing preference to wireless service compared to landline ( 93 million users in 2006 ) * Increasing participation of private players. 7% share of Industry by PSUs * Great opportunities in GSM. 70% Technology market share of GSM IN 2006 * A liberal licensing scheme was set up to increase Internet penetration across the country with 10. 83 million subscribers in Dec 2006. Reliance communication had a 10. 32% subscriber base in Dec 2006 * The Government set up a Telecom Equipment and Services Export Promotion Forum and Telecom Testing and Security Certification Centre (TETC). Companies like Alcatel, Cisco began showing interest in setting up their R&D centers in India. Major players in the Market There were three types of players in telecom services: * State owned companies (BSNL and MTNL) * Private Indian owned companies (Reliance Infocomm, Tata Teleservices,) * Foreign invested companies (Hutchison-Essar, Bharti Tele-Ventures, Escotel, Idea Cellular, BPL Mobile, Spice Communications) The market share of various players on Internet and Wireless services is given in the Exhibit X below. Appendix

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