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then investment takes place and reverse happens when economy is low. Thus necessary to analyze all variables properly.
GDP of $ 4057787 million. India is the second fastest growing economy in the world. Indias GDP growth rate in Q2 of FY 2012 is 7.7 %. It was 8.5 % in 2010-11. The slowdown is expected to continue as India's central bank continues to raise interest rates to control inflation.
INFLATION
Despite large scale tightening of the monetary policy by
the RBI and other steps taken by the government, inflation continues to remain close to the double digit mark. CPI in India was 8.43 percent in July 2011. WPI based inflation was 10 percent in the year 2010-11. In May 2011 it was 9.1 percent. This is way above the 5 percent mark considered as the growth promoting inflation level or the normal inflation level by the RBI.
INTEREST RATES
RBI continues to raise interest rates to control inflation.
The Reserve Bank of India (RBI) has raised interest rates 11 times since March 2010.
FOREIGN TRADE
Financial year 2010-11 was exceptionally good for Indian
exporters, with overall exports amounting to US$ 245.5 billion, the sector registered a growth of 37.7 percent in 2010-11. The government announced export sops as part of the fiscal packages offered during the crisis period gave the sector the much needed impetus. The government supported by reducing interest by 2% on pre and post shipment export credit. This revived the badly hit labour intensive export oriented industries.
FOREX RESERVE
In April 2010, Indias foreign exchange reserves were US$
reserves in the world with more than US$ 300 billion of foreign reserves.
FOREIGN INVESTMENT
In 2010-11, foreign investment flows into India saw a dip
of about 17 percent. The dip was largely on account of a slowdown in FDI and not because of portfolio investment. FDI flows in India in 2009-10 were of US$ 37.7 billion and in 2010-11 it came down to US$ 27 billion. Portfolio flows were of US$ 32.4 billion in 2009-10, and fell to about US$ 31.5 billion in 2010-11. Out of a total of top 25 sectors, 15 sectors saw a dip in FDI flows in 2010-11. First reason being the state of the macro-economy, which is far from comfortable. Second is environment sensitive policies in certain sectors, slow movement on resolving the land acquisition problem and issues of governance and corruption that have been grabbing headlines and showing the country in poor light.
EXCHANGE RATES
The Indian Rupee has depreciated against all the major global
currencies with depreciation of 1.1%. First reason for the bearish view regarding the INR is deterioration in the current account due to moderation in exports, continuous rise in imports and a possible slowdown in invisible receipts. Second is the expected slowdown in funds flows into India.
in May 22, 2010 growth was 15.1%. Bank credit to the commercial sector showed a growth of 21.3% till May 21, 2011. Net bank credit to the govt. went up by 17.9%. Net foreign exchange assets of the banking sector registered a growth of 7.6% during the same time period.
only after China. India ranked sixth among all the telecommunication sectors in the world Tele-density has improved to 49% by the end of March 2010 Telecom subscription in surged at a CAGR of over 38% from fiscal 2003 to 2007 India has one of the fastest growing telecom markets in the world Go strong in global economic recession 74% to 100% FDI is permitted for various telecom services
scarce.
Power of Suppliers
Enough vendors, arguably, to dilute bargaining power. Limited pool of talented managers and engineers well
Power of Buyers
Increased choice of telecom products and services, the
Availability of Substitutes
Cable TV and satellite operators now compete for
buyers.
Competitive Rivalry
Rush of new entrants Competitors lure customers with lower prices and more
exciting services High exit barriers, mainly due to its specialized equipment
Strengths
High Customer Potential High Growth Rate High return on Investment
Weakness
Poor Telecom Infrastructure Most Competitive Market Strongly regulated by Govt
SWOT ANALYSIS
Opportunities
More Quality Services Value added services Telecom equipment exports Horizontal Integration scope in content related services
Threats
Telecom Policies Declining ARPU Partiality on the part of Govt
and cellular circles and ended the DOT monopoly over long distance services
Imposed a one time entry fee based on profitability
Granted the TRAI, the exclusive to fix tariffs Introduced a revenue sharing arrangement or a
telecom sector
Telecom sector has perfect market competition Many buyers & Sellers Products similar in Nature, many substitutes Prices are determined by supply & demand
Experiencing a Mature Growth Stage. Due to rapid growth of sales and profit margins, new players resulting in more competitors. lead to an increase in the level of supply and lower prices. Profit Margins has declined. Competition is on the basis of price as the product innovations are replaced by process innovation. Possibilities of innovation in products and processes is not foreseeable in the future Deliver value proposition to the customer at the lowest possible cost in the fastest possible way