The annual Indian communication
industry performance survey, V&D 100 1999 reveals that the total communications market
size for the fiscal 1998-99 was at Rs 25,365.22 crore. The Top 100 companies or the
V&D 100 Club contributed Rs 23,262.32 crore. Apart from this, the 390 other companies
that we covered contributed Rs 1,602.90 crore. Plus the companies which we missed or could
not get any information about, together must have pooled in roughly Rs 500 crore to the
industry kitty, thereby taking the total market size to Rs 25,365.22 crore.
Modus Operandi |
The entire exercise of V&D100 started in April of this year, with the sending of questionnaires to about 1,000 probable communications companies which deal in communications in some way or the other — in terms of products or services. Only 260 companies filled up the questionnaire and sent the it back to us, which speaks of the openness and transparency most of these companies keep harping about. However, we were able to get company information from informal and other sources for another 230 companies. So, altogether a total of 490 companies have been covered in the V&D 100 survey. Though ideally, a lot of factors such as profitability, market capitalisation rate, corporate image, geographical reach, customer satisfaction levels, innovativeness etc were intended to be included to ranking parameters, the kind of response and co-operation we got did not allow us. Finally, the rankings were done only on the basis of revenues from communications products and services. In some cases the companies |
"The Top 10 Club"
companies notched up 67.95 percent of the total revenue as their combined turnover was
estimated to be Rs 17237.88 crore. This indicates that communications industry is still
dominated by large players. But considering the fact there are too many market segments
here and the number of players comparatively low, it is expected that this dominance of
the Top 10 companies over the industry will go down and more local and niche area players
will emerge.
The V&D 100 Club
The Top 10
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face="Times New Roman" size="2">There has been no change in the positions of the Top 6
companies. VSNL still retains the # 1 position with a turnover of Rs 7,189.60 crore, an
increase of 12.41 percent from last years turnover of Rs 6,395.80 crore. MTNL is firmly
sitted on the # 2 position with a turnover of Rs 5,443.89 as the next competitor ITI still
has a long way to go as it has a modest turnover of Rs 1,600.00 crore. TCIL is placed at #
4 position and Sterlite is placed at # 5 with a turnover of Rs 562 crore. The Top 6
companies have not only retained their positions, but have also shown a growth of more
than 12 percent with only exception being Sterlite which has grown by only 2.18 percent.
Global Telesystems has
maintained its # 7 position even with a growth of 13.55 percent. HFCL is a surprise
entrant in the Top 10 as the company with an impressive growth of 115.69 percent.
HTL Ltd has retained its # 8 position and has grown by 28.57 percent. A marginal increase
of 6.93 percent has pushed Wipro Infotech at the # 9 position and at the bottom of the
table is Usha Beltron, with a turnover of Rs 243.90 crore.
The V&D100 Club has 106
companies under its fold , as there were a few tie-ups for some ranks. GEIL Projects &
Services Ltd and Enkay Telecom were tied up at the 40th rank, with a turnover of Rs 70
crore; Punwire Mobile Communications Ltd and Skycell Communications Ltd were tied up at
the 79th place with a turnover of Rs 26.00 crore; Microwave Communications and Telstra
V-Comm were placed at 87th position with a turnover of Rs 24 crore; and Meera Agencies Pvt
Ltd, Syntel Telecom, and Tata Infotech Ltd were all tied up at 97th position with a
turnover of Rs 20.00 crore. One hopes that in the years to come as shakeout and
consolidations take place on the one hand and more players come up on the other, there
will be stiffer competition between the players and each competitor will have to fight
harder to have a position in V&D100 Club.
V&D 100–The Top 10 Club (1998-99) |
|||||
Company | Turnover (Rs Crore) (1998-99) |
98-99 Rank | Turnover (Rs Crore) (1997-98) |
97-98 Rank | Growth (in percent) |
VSNL | 7189.60 | 1 | 6,395.80 | 1 | 12.41 |
MTNL | 5443.89 | 2 | 4,645.54 | 2 | 17.18 |
ITI | 1600.00 | 3 | 1,270.00 | 3 | 25.98 |
TCIL | 639.00 | 4 | 560.00 | 4 | 14.10 |
Sterlite | 562.00 | 5 | 550.00 | 5 | 2.18 |
Global Tele-Systems | 539.50 | 6 | 475.11 | 6 | 13.55 |
HFCL | 392.11 | 7 | 181.79 | – | 115.69 |
HTL Ltd | 360.00 | 8 | 280.00 | 8 | 28.57 |
Wipro Infotech | 267.88 | 9 | 250.50 | 10 | 6.93 |
Usha Beltron | 243.90 | 10 | 230.00 | – | 6.04 |
As many as 30 companies in the
V&D 100 Club are JVs primarily between MNCs and Indian companies. Plus there are 22
MNCs. This clearly displays a good hold that MNCs have on the Indian communications market
space as well as the fact that they have a high level of interest in India. These JVs have
the financial muscle or the technical expertise to support the Indian partners as they are
in the process of consolidating their brands in the Indian market. The presence of 11
public sector companies says that they are there by virtue of being an old and established
company but it also means that these public sector units are gearing up to face the
growing threat from the private sector. While in some cases they are likely to succeed, in
some case they will not. In the future we are likely to see more PSUs exiting from the
V&D100 Club, if they do not perform well.
The most interesting observation
was in terms of the type of activities of the players. Out of the 100 companies, 44 belong
to the services and 56 to the equipment category. This means that the service industry
still has a long way to go, as they are logically expected to overtake the vendors dealing
in products only. This is specially true of a new market like India where a lot of
investments are going into developing infrastructure backbone. Infrastructure companies
have started making their mark as 15 companies feature in the V&D 100 Club. Also,
non-telecom players like the Power Grid, GAIL, and the Railways, which though have not
been covered in the V&D 100 survey, are enhancing their networks as opening of long
distance telephony has given them enough width to leverage on in the future. The
infrastructure equipment industry grew by 24 percent. In future one can see a huge
investment by the utilities companies in the area of communications and such companies
becoming dominant players.
The V&D 100 Club has 18
companies from the cellular sector. These companies have not done well but the sheer
number of subscribers help them in pushing their revenue base. As
Segment-wise Break-up | ||||
Segments | Numbers | Total Revenue | Percent | Average |
Cellular | 18 | 1367.29 | 5.88 | 75.96 |
Infrastructure | 15 | 4048.37 | 17.41 | 269.89 |
Networking/Structured Cabling | 15 | 745.47 | 3.20 | 49.70 |
Telecom Cables | 12 | 1807.68 | 7.78 | 150.64 |
Integration | 9 | 536.95 | 2.30 | 59.66 |
VSAT | 8 | 297.08 | 1.28 | 37.13 |
Multi Product | 7 | 775.5 | 3.34 | 110.78 |
Paging | 6 | 183.29 | 0.78 | 30.54 |
T&M | 4 | 126.54 | 0.54 | 31.63 |
Businesscom | 3 | 265.45 | 1.14 | 88.48 |
Personal Communication | 3 | 155.65 | 0.68 | 51.88 |
Telecom Software | 2 | 260.08 | 1.12 | 130.04 |
Multiple Services | 2 | 12633.49 | 54.30 | 6316.74 |
Others | 2 | 59.48 | 0.25 | 29.74 |
Total | 106 | 23262.32 | 100.00 | 219.45 |
other services have not been
doing well, the cellular service providers had a definite advantage over others and state
wide circle operators was encashing on that as 1998-99 was the year for circle operators
and not metros.
Around 15 networking/structured
cabling companies feature in the V&D 100 Club. This was primarily due to the fact that
the networking industry grew by 92 percent in the fiscal 1998-99 and registered an
all-time high of Rs 537 crore. In future we might see an increase in the number of
companies dealing in such products as everybody will try to jump into the networking
bandwagon. This will result in drop in prices and shakeouts. Only those companies will
survive which will provide more value to its customers.
Integration accounted for Rs
536.95 crore whereas VSATs accounted for Rs 297.08 crore. In terms of numbers, the
installed capacity of VSATs in the country increased from 6,000 to 8,490 registering a
growth of 41.5 percent. This is another pointer to the fact that users are looking for
complete solutions. As more and more corporate houses go in for networking, the market for
network integration will increase in size and one can see a multiple of big players
emerging to cater to it.
Even though paging contributed
only around Rs 183.29 crore in the V&D 100 Club, six companies were able to make their
positions in the Club. If the paging services had done well, the V&D 100 Club would
have accomodated more players. The same story goes for the cellular too. The interesting
fact for both paging and cellular is that they are not doing well in the areas where they
were tried first, but are doing well in the new areas that they have been introduced.
Surely, there is a market for this service, its only a matter of conducive environment and
right strategies, before we see some more paging and cellular companies entering the
V&D 100 Club.
Four T&M companies figured in
the V&D 100 Club in spite of the non-buying of the private operators. The DoT
purchases and large scale buying from GAIL, Power Grid, and the
Railways compensated the
industry.
With three basic service
operators having already started the services in MP, Maharashtra, and Andhra Pradesh,
chances are that these operators and many that will start the service in the coming fiscal
have a fair chance to make to the V&D 100 Club. Radio Trunking and Internet companies
still have a long way to go as they are still busy in collecting the requisite number of
subscribers to make a mark in the market.
face="Arial" size="1">Data Collection in Delhi by
Prastut Consulting Pvt Ltd