Swot Analysis of Rcom - Free Essay Example

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 m illion 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 RD 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