a look at the International Marketing practices followed in the Telecommunication / Telecom sector

1. Industrial marketing
Telecommunications Industry
Presented By:
Balagopal P (301)
Aditya Cheema (304)
Nachiket Kulkarni (311)
Ishan Parekh (315)
Dishank Shah (318)
Dhruv Kalia (324)

2. Introduction to the industry, sector and the company.

3. 3
Indian Telecom Industry – A Lucrative Option
In recent years, the Indian telecom industry has witnessed phenomenal growth. A conducive business environment,
favourable demographic outlook and the political stability enjoyed by the country have contributed to the growth of the
industry. India achieved the distinction of having the world's lowest call rates (2–3 US cents), the fastest sale of million mobile
phones (1 week), the world's cheapest mobile handset (USD 19) and the world's most affordable colour phone (USD 31).
Indian Telecom Industry
 One of the fastest growing cellular markets
in the world in terms of number of
subscriber additions – 19.35 million in 3
months (April to June 2007)
 Expected to reach total subscriber base of
about 500 million by 2010 (i.e., more than
one phone for every household)
 Annual growth rate of the telecom
subscribers – 47 percent (2006–07)
 More GSM subscribers than fixed-line
subscribers
Indian Telecom Industry – Facts
 Total telecom subscribers – 225.21 million
(June 2007)
 Tele density – 19.86 percent (June 2007)
 Number of new mobile subscribers added
every month – 7.34 million (June 2007)
 ARPU for GSM – USD 6.6 per month
 Telecom equipment market – USD 17,100
million (2006–07)
 Handset market – USD 4,750 million
(2006–07)

4. 4
9 10 11
15
20
43
0
10
20
30
40
50
2002-03 2003-04 2004-05 2005-06 2006-07 ….. …. 2009-10
Revenues(USDbillion)
Revenues of Indian Telecom Industry: 2002–07 (USD billion)
Telecom Services – India
The Indian telecom services can be divided predominantly into basic, mobile and Internet services. It also comprises smaller segments,
such as radio paging services, Very Small Aperture Terminals (VSATs), Public Mobile Radio Trunked Services (PMRTS) and Global
Mobile Personal Communications by Satellite (GMPCS).
The growth witnessed in the mobile services and Internet services segments was higher as compared to other services, such as basic
services and radio paging services.
Registered an
annual growth of 33
percent in 2006–07
The Indian telecom market generated revenues of approximately USD 20 billion in 2006–07. It registered a CAGR of
approximately 22 percent from 2002–03 to 2006–07. The CAGR from 2006–07 to 2009–10 is expected to stabilise at 21
percent. Apart from mobile telephony services, other value-added services are also gaining importance.
Telephony services (mobile and basic) and Internet services
dominate the Indian telecom services

5. Exciting Possibilities
Booming
Telecom
Market
Technologies Devices Services Applications

6. Global Fibre Optic Industry
0
5
10
15
20
25
30
North
America
Asia Western
Europe
Eastern
Europe
Others
Growth YoY (%)
Growth YoY (%)

7. Indian Fibre Optic Industry
• CAGR – 36%
• Major growth in demand since Broadband Policy
of 2004
• Increased adoption by cable TV segment, multi-
service operators & e-Government initiatives
• Unprecedented growth in telecommunications -
$50 billion till date in 2011.
The beginning of an always – connected future..

8. Indian Fibre Optic Industry –
Segmentation (on the basis of buyers)
Buyers
Government
Incumbents
Telecom Power Oil & Gas
E-
Governance
Private
Incumbents
Cable TV Telecom
Multi-
Service
Operators
Broadband
Support

9. Indian Fibre Optic Industry –
Segmentation (on the basis of price)
Low End
Middle
End
High End
• Low price, Low
technology
• Main Players –
Bhagyanagar
India, Shilpi Cable
• High Commercial Use
• Main Players – Vindhya
Telelinks, Surana
Telecom
• High emphasis on
application
• Main Players – Sterlite
Technologies, Finolex

10. Finolex
• A private sector conglomerate founded in 1985
• Consists of:
▫ Finolex Cables
▫ Finolex Industries
▫ Finolex J-Power Systems
▫ Finolex Plasson Industries

11. Introduction, products, competitors and its market share.

12. History of Finolex
• 1945 – Chabbaria Bros. came to Pune from Karachi
and started a small shop selling electric cables
• 1956 – Started a small scale industrial unit
manufacturing PVC industrial cables for automobile
industry
• 1983 – IPO of Finolex Cables Ltd.
• 1993 – Started manufacturing Optic Fibres Cables
• Today:
▫ Turnover exceeds $750 million
▫ Listed in BSE, NSE, Luxemburg Stock Exchange
▫ Only “Superbrand” cable company in India

13. Finolex Cables
• India’s largest manufacturer of electrical &
telecommunication cables
• Manufacturing facilities at Pune, Goa &
Uttarakhand
• Product application range is used for electrical
usage, transmission of voice, data & images for
domestic, commercial & industrial applications.

14. Products
Wires & Cables and Switches
Compact Fluorescent Lamps (CFLs)
Copper Rods
PVC-U Pipes & Fittings and PVC Resins
Chemicals
Drip Irrigation System
Optical Fibres

15. Optical Fibres (Types)
Optical
Fibres
LWPF
Low Water Peak Fibre
LBLF
Low Bend Loss Fibre
NZDSF
Non Zero Dispersion Shifted
Fibre

16. Optical Fibres (Types)
• Low water peak enables for lower attenuation
of signals (up to 22%)
• Guarantees stable loss over time
LWPF
(Low Water
Peak Fibre)
• Lower refractive index based cladding used to
reduce bending loss
• Consists of 2 types, viz. Low – Loss & Bend
Insensitive
LBLF
(Low Bend
Loss Fibre)
• Dispersion point moved outside normal
communications window
• Four – wave mixing & other non – linear
effects are minimized
NZDSF
(Non – Zero
Dispersion – Shifted
Fibre)

17. Competitors
Sterlite Technologies
Aksh Optifibre
Vindhya Telelinks
Bhagyanagar India
Shilpi Cable
Surana Telecom
Birla Ericsson
Paramount communication
Tamil Telecom

18. Share in the Optical Fibre Market
31%
25%
22%
12%
10%
Market share %
Sterlite Technologies
Birla Ericsson
Finolex
Aksh Optifibre
Others

19. Global Customers of Finolex

20. Consists of various financial ratios.

21. Profitability Ratios
-10
0
10
20
30
40
50
Mar '11 Mar '10 Mar '09 Mar '08 Mar '07
%
Profitability Ratios
Operating Profit Margin(%)
Profit Before Interest And Tax Margin(%)
Gross Profit Margin(%)
Cash Profit Margin(%)
Adjusted Cash Margin(%)
Net Profit Margin(%)
Adjusted Net Profit Margin(%)
Return On Capital Employed(%)
Return On Net Worth(%)
Adjusted Return on Net Worth(%)
Return on Assets Excluding Revaluations
Return on Assets Including Revaluations
Return on Long Term Funds(%)

22. Liquidity & Solvency Ratios
0
0.5
1
1.5
2
2.5
Mar '11 Mar '10 Mar '09 Mar '08 Mar '07
Liquidity & Solvency Ratios
Current Ratio
Quick Ratio
Debt Equity Ratio
Long Term Debt Equity Ratio

23. Management Efficiency Ratios
0
10
20
30
40
50
60
70
80
90
100
Mar '11 Mar '10 Mar '09 Mar '08 Mar '07
Management Efficiency Ratios
Inventory Turnover Ratio
Debtors Turnover Ratio
Investments Turnover Ratio
Fixed Assets Turnover Ratio
Total Assets Turnover Ratio
Asset Turnover Ratio
Average Raw Material Holding
Average Finished Goods Held
Number of Days In Working Capital

25. Segmentation
• Telephone Department
• Government
• Private. Service Provider
• Wireless
• Communication Tower
Voice
Transfer
• International Data Transfer
• Internet
Data
Transfer

26. Raw Material
Suppliers
Manufacturing
Unit
Production Quality Control
Maintenance &
Dispatch

27. Distribution strategy
Large
distribution
network
Fact file:
15000 dealer
and retailers
spread across
the country
Strategy:
Intensive &
Exclusive

28. manufacturer
merchant
customer
manufacturer
distributor
retailer
customer

29. Pricing Strategy
Market
Oriented Pricing
• Setting a price based upon analysis &
research compiled from the target
market analysis
Contribution
Margin – based
Pricing
• Maximizes profit derived from an
individual product based on product’s
contribution margin per unit

30. Integrated Marketing Communications
(IMC)
Caspian
Telecoms
Hannover
Messe
IEEE Power
& Energy
Society
Events

31. Integrated Marketing Communications
(IMC)
Promotions

32. • Finolex makes continuous investments in
advertising and marketing promotions
• Marketing activities include TV commercials
aired nationally and press advertisements in
national dailies
• Proactive attitude to keep dealers and
distributors involved through below-the-line
promotions, dealer meets, training and
workshop sessions, demonstrations and
attractive incentives

33. SWOT Analysis
• 20% growth in electrical
cable industry
• Industry growing
alongwith economic
growth
• Fibre optics market
picking up
• Stiff competition from
other companies
• Changing Government
policies
• Introduction of small
players may increase
competition and
malpractices
• Premium product- 5 to
10% costlier
• Telecom cable division
not showing
significant growth
• Heavy duty electrical
products not included
in product line
• 22-24% market share
• Best quality- super
brand
• Large distribution
network
• FMS- ability to change
as per profitability
• Backward integration
Strengths Weaknesses
OpportunitiesThreats