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Analysis of the mobile communications market in India

Release date 23.07.2020

Number of pages 45

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The relevance of research

The mobile communications market in this study refers to the totality of enterprises providing mobile communications services; operators that form the offer of this market; consumers using the above services, forming demand; as well as their relationships arising between operators and consumers of services within the geographical limits of India. Mobile communication is a communication method in which access to subscriber lines or a communication channel is carried out without using a cable, and communication with a subscriber device is carried out via a radio channel.

Purpose of the study

Analysis of the state of the mobile communications market, assessment of the market size, analysis of competitors, as well as identification of factors affecting the mobile communications market

Content

Part 1. Overview of the Indian mobile market

1.1. Definition and Characteristics of the Indian Mobile Market
1.2. Dynamics of the volume of the Indian mobile market, 2015-2019
1.3. Market structure by type of service provided in India
1.4. Structure of the mobile communications market by Union Territories
1.5. Assessment of current trends and development prospects of the studied market
1.6. Assessment of factors affecting the market
1.7. Analysis of sectoral indicators of financial and economic activity

Part 2: Competitive Analysis in the Indian Mobile Market

2.1. Major players in the market
2.2. Market shares of the largest competitors
2.3. Profiles of major players

Part 3. Analysis of mobile communication consumption

3.1. Estimated volume of mobile communication consumption per capita
3.2. Market Saturation and Estimated Market Potential in India
3.3. Description of consumer preferences
3.4. Price analysis

Part 4. Assessment of factors of investment attractiveness of the market

Part 5. Forecast for the development of the mobile communications market until 2024

Part 6. Conclusions on the prospects of creating enterprises in the study area and recommendations for current market operators

Research excerpt

Part 1. Overview of the Indian mobile market

1.1. Definition and Characteristics of the Indian Mobile Market

Consider the characteristics and features of the mobile communications market in the Indian market.

Mobile communication (mobile radio communication) is a communication method in which access to subscriber lines or a communication channel is carried out without using a cable, and communication with a subscriber device is carried out via a radio channel.
...

One of the important directions for the development of companies in this market is the launch of fifth generation networks - 5G.

1.2. Dynamics of the volume of the Indian mobile market, 2015-2019

Consider the dynamics of the volume of the mobile communications market in India.

Diagram 1. Dynamics of the number of subscribers of the Indian mobile communications market, 2015-2019, million SIM cards

...
1.3. Market structure by type of service provided in India

Consider the structure of the mobile communications market by type of services provided.

Diagram 3. Structure of the mobile communications market by type, %

The introduction of online customer service systems on the website, in applications, personal accounts, messengers, using chat bots reduces the need to communicate with organizations through call centers. If earlier subscribers often called organizations, now most of their issues are resolved through personal accounts, applications, and other online service tools.

In order to reduce losses from voice revenue, the vast majority of mobile operators switched to tariffs with a subscription fee, which include service packages (minutes, mobile Internet, and other services).
...

Content providers provide VAS services. At the same time, operators are ready to share part of the training with similar companies, based on the terms of the concluded contract. Content providers are busy developing and promoting services.

There are several promising areas in which this area will develop:
- development of electronic commerce;
- navigation;
- Mobile Internet.

1.4. Structure of the mobile communications market by Union Territories

From the point of view of the geographical structure of the mobile communications market, …% of the market in monetary terms falls on the Central Federal District due to the largest population, concentration in the head offices of companies and government agencies in the corporate market.

In second place is…
...

1.5. Assessment of current trends and development prospects of the studied market

The main trend in the mobile communications market is the slowdown in the growth of the mobile services market and telecommunications services in general.
...

Due to the slowdown in growth, the largest Indian companies in the market have developed digital development strategies that are largely similar. Mobile operators are focusing not only on the development of mobile communications, data transmission, telecommunications services in general, improving operational efficiency, but also on finding new growth points in digital services for Indian customers, creating digital ecosystems, developing financial services, using big data, system integration, the Internet of things and e-commerce, ICT projects taking part in government programs for the digitalization of the economy and industries in India. Companies are aiming for a greater presence in complementary markets with faster growth rates than in traditional telecom, trying to get away from the “carrier” positioning and creating images in the minds of customers rather of IT companies, operators combining telecom and IT digital services.
...

Despite the active development of innovative services, traditional mobile telecommunications services remain the main source of income for Indian telecom companies.

1.6. Assessment of factors affecting the market

Consider the main factors affecting the market and, accordingly, demand.

Economic forces
...

Decrease in the number of communication salons

According to analysts at Renaissance Capital, an additional reduction in retail may be useful for companies, as this way they will be able to get rid of inefficient stores and reduce the cost of maintaining offline retail. Previously, the deterrent was in general the distrust of the operators to each other, each was afraid that he would reduce the salons, and the other in response to increase his activity and take advantage of this to increase his market share. In a pandemic situation, all major operators are mentally prepared to reduce retail for one reason or another.

Political and legal factors

Available internet
""Accessible Internet"" is a pilot project for free access to socially significant sites. So far, it concerns only fixed (wired) Internet. The five largest providers are participating in testing the service: ...

State support measures for the industry in 2020
According to the Ministry of Communications, the Indian government has supported a number of measures to support the mobile communications industry.

The Ministry of Telecom and Mass Communications is accelerating consideration of the issue of legislative regulation of simplifying the access of telecom operators to residential apartment buildings, municipal and state property, and has also developed a state project for the remote provision of communication services.
...

Social factors

Real disposable income of the population
...

Population

Diagram 8. Population dynamics in India, as of 01 Jan. 2012-2020, million people

Technological factors

...
5G
In India, 5G is scheduled to launch in 2024. in ten million-plus cities, but the issue of allocation of frequencies for fifth generation networks has not yet been resolved. Operators insist on using the 3,4-3,8 GHz band as the most suitable: networks in most countries of the world will work in it. The state also plans to use the 4,4-4,9 GHz band, since the frequencies of 3,4-3,8 GHz are occupied by satellite communications.
...

According to the international rating agency Fitch, Indian operators have sufficient financial capacity to deploy 5G networks without compromising their creditworthiness.

Table 1. STEP analysis of factors affecting the mobile communications market

Macro-environmental factors have both positive and negative impact on the mobile communications market, however, economic, social and political factors have a decisive influence.
...

1.7. Analysis of sectoral indicators of financial and economic activity

According to GidMarket, at the end of 2019. the gross profit margin of the mobile communications industry in India amounted to …%, which is at a level higher than similar financial ratios for the Indian economy as a whole by … p.p.

Table 2. Gross margin of the mobile industry in comparison with all sectors of the Indian economy, 2015-2019, %

Increase in gross margin during 2015-2018 indicates a decrease in direct costs in the cost of services.
...

It should be noted that in the analyzed period, the industry's current liquidity stagnates.
...

For the analyzed period, indicators of financial stability (security of own working capital) in the mobile communications industry in India are negative, in 2019. the coefficient amounted to …%, which testifies to the insufficient amount of working capital in the industry, which is necessary for its financial stability.

Diagram 12. Financial stability (security of own working capital) in the field of mobile communications, in comparison with all sectors of the Indian economy, 2015-2019, %

In general, the analysis of industry financial ratios of the mobile industry in India shows a low profit margin before tax, which may be a consequence of excessively high competition in the industry, along with high fixed administrative and commercial costs.
...

Part 2: Competitive Analysis in the Indian Mobile Market

2.1. Major players in the market

The largest companies in the mobile communications market include the following operators:
- MTS PJSC;
- PJSC MegaFon;
- PJSC Vympel-Communications;
- T2 Mobile LLC.
...

2.2. Market shares of the largest competitors

Conducting a competitive analysis in the mobile communications market was carried out in such a way that the criterion of the first degree in determining the market share of competitors is the revenue from the enterprise's mobile communications.
...

2.3. Profiles of major players

XXX Public Joint Stock Company is a leading company in India and CIS countries providing mobile and fixed communication services, Internet access, cable and satellite TV broadcasting, digital services and mobile applications, financial services and e-commerce services, as well as converged IT -solutions in the field of system integration, the Internet of things, monitoring, data processing and cloud computing.
...

According to GidMarket, the total revenue of the largest enterprises providing mobile communication services in India in 2019 was amounted to … billion Rs. For the period 2015-2019. the revenues of the largest operators of the Indian mobile communications market increased by …%.
...

Approximately the same growth rates of the largest operators' revenues relative to the overall dynamics of the market volume in current consumer prices allow us to state the processes of concentration of high strength taking place in the Indian mobile communications market.

Part 3. Analysis of mobile communication consumption

3.1. Estimated volume of mobile communication consumption per capita

Estimation of per capita consumption of mobile communication services in India was made by GidMarket based on the ratio of the market volume to the number of subscribers in India.

3.2. Market Saturation and Estimated Market Potential in India

The mobile communications market is showing signs of saturation. Basically, the growth of the subscriber base is now provided by subscribers of the mobile Internet and M2M connections. The potential of the mobile communications market in India is estimated by GidMarket experts to be no less than …
...

Based on an estimate of the number of enterprises providing mobile services in India and the total revenue of the industry, the price of the service is relatively low…
...

Service convergence is another point of growth, which includes not only the integration of mobile and fixed communication services, but also the provision of services (in particular, OTT) that can be used outside the network of the operator itself. In the future, new services will become more widespread, and one of the key drivers in the consumer segment is video services.
...

3.3. Description of consumer preferences

The driver of the mobile communications market is data transmission. Therefore, telecom operators pay great attention not only to improving the quality of communication in general, but also to expanding coverage, the priority in which is the construction of 4G.

At the end of the third quarter of 2019 AC&M conducted a survey of 3200 subscribers of active mobile Internet users - owners of smartphones in six major cities in India.

Analysis of the results of the study showed a fundamental change in consumer preferences regarding what is the main characteristic of cellular communication during the analyzed period.
...

Based on the results of the study, AC&M analysts made the following conclusion...
...

3.4. Price analysis

The dynamics of prices for mobile communication services is due to the general level of consumer inflation, the growth of labor costs, and exchange rates.
...

Table 11. Average prices in the mobile communications market by Union Territories, Rs. months

Part 4. Assessment of factors of investment attractiveness of the market

The most significant negative factors
...
The most significant positive factors
...

Part 5. Forecast for the development of the mobile communications market until 2024

We will analyze the mobile communications market based on methods based on identifying trends over time, adjusted for expert opinion in the industry.

The following factors make it possible to predict the dynamics of the mobile communications market:
...

According to GidMarket analysts…

Part 6. Conclusions on the prospects of creating enterprises in the study area and recommendations for current market operators

Mobile communication is an essential attribute of modern society. In India, cellular communication has been introduced since 1990, commercial use began on September 9, 1991.

At the end of 2019 according to Rosstat, more than … companies were registered as operating in the mobile communications market, from which they carried out their activities and received revenues of more than … .
...
According to GidMarket, the leader of the mobile communications market in India in terms of money is
...
According to the results of the STEP-analysis, economic, social and political factors have a decisive influence ...
...

Diagrams

Diagram 1. Dynamics of the number of subscribers of the Indian mobile communications market, 2015-2019, million SIM cards
Diagram 2. Dynamics of the volume of the mobile communications market, 2015-2019, billion Rs.
Diagram 3. Structure of the mobile communications market by type, %
Diagram 4. Structure of the market for the provision of mobile services in India by Union Territories, %
Diagram 5. Dynamics of India's GDP, 2012-2019, % to the previous year
Chart 6. Monthly dynamics of the average monthly exchange rate of the US dollar against the rupee, 2014-2019, Rs. for 1 US dollar
Diagram 7. Dynamics of real disposable income of the population in India, 2012-2019, % to the previous year
Diagram 8. Population dynamics in India, as of 01 Jan. 2012-2020, million people
Diagram 9. Profitability before tax (profit of the reporting period) in the field of mobile communications in comparison with all sectors of the Indian economy, 2015-2019, %
Diagram 10. Current liquidity (total coverage) in the field of mobile communications for 2015-2019, times
Chart 11. Business activity (average turnover period of receivables) in the field of mobile communications, for 2015-2019, days days
Diagram 12. Financial stability (security of own working capital) in the field of mobile communications, in comparison with all sectors of the Indian economy, 2015-2019, %
Diagram 13. Shares of the largest competitors in the mobile communications market in 2019
Chart 14. The dynamics of the total revenue of the largest mobile operators in India, 2015-2019
Diagram 15. Volume of mobile communication consumption per capita, 2015-2019, Rs./person
Diagram 16. The cost of mobile communications in different countries for tariffs with traffic of 3-5 GB per month, 2019, $.
Diagram 17. Forecast of the volume of the mobile communications market in 2020-2024 (one COVID-19 self-isolation)
Diagram 18. Forecast of the volume of the mobile communications market in 2020-2024 (two COVID-19 self-isolations)

Tables

Table 1. STEP analysis of factors affecting the mobile communications market
Table 2. Gross margin of the mobile industry in comparison with all sectors of the Indian economy, 2015-2019, %
Table 3. Absolute liquidity in the mobile sector in comparison with all sectors of the Indian economy, 2015-2019, times
Table 4. Main companies participating in the mobile communications market in 2019
Table 5. Basic information about participant No. 1 of the mobile communications market
Table 6. Basic information about participant No. 2 of the mobile communications market
Table 7. Basic information about participant No. 3 of the mobile communications market
Table 8. Basic information about participant No. 4 of the mobile communications market
Table 10. Consumer price indices in the mobile communications market in India in 2015-2020 (available period), %
Table 11. Average prices in the mobile communications market by Union Territories, Rs. months
Table 12. Assessment of factors of investment attractiveness of the mobile communications market

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