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Telecom Equipment Market India Telecom Equipment Market ‐ July 2013


Executive Summary

Market Overview

Drivers &  Challenges

Market Trends

 As per 20‐‐ ‐ ‐‐, telecom equipment worth INR x1 bn was consumed in India  Segment1 accounts for around x2% of the total telecom equipment industry in India  Telecom equipment import had grown at a CAGR of around x3% between 20‐‐ and 20‐‐  Currently segment2 generates maximum revenue, though future of segment3 looks promising Drivers:

Challenges:

 Growth in Wireless Subscriber Base  Next Generation Voice and Data Services  Government Initiatives and Progressive  Reforms in the Industry  IPv4 to IPv6 Migration

 Security Concerns  High Telecom Equipment Imports

 Telecom Equipment Certification  Android Smartphones and Tablets  Strengthening of R&D  Infrastructure Sharing Major Players

Competitive  L d Landscape

Company A

Company B

Company C

Company D

Company E

Company F

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•Economic Indicators •Economic Indicators •Introduction •Market Overview •Market Overview •Drivers and Challenges •Market Trends •Market Trends •Competitive Landscape •Strategic Insights St t i I i ht •Appendix

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Introduction Telecom Equipment ‐ Overview • Economic and social development of India is significantly influenced by its telecom industry y q p • Modern and robust telecommunication systems demand state‐of‐the‐art telecom equipment • Cellular network technology such as 3G and 4G, broadband internet services, telephony services, network  requirements and other telecom products and services has led to increased demand for telecom equipment • Telecom equipment can be broadly classified in carrier equipment, enterprise equipment and user devices segments Telecom equipment can be broadly classified in carrier equipment enterprise equipment and user devices segments • Alternatively, it can also be classified in two categories in terms of type of consumer  End‐user equipment are meant for general consumers and telecom network equipment find its takers amongst industrial and  institutional consumers

• In telecom network equipment category, fixed and mobile switches, base stations, routers, & transmission  In telecom network equipment category fixed and mobile switches base stations routers & transmission equipment largely represent active equipment, whereas towers, shelters & cables falls under passive equipment Segment1

Category1 Segment2

Telecom  Equipment

Segment3

Category2

Segment4 Segment5

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Majority of the countries are import‐dependent excepting  few which supply telecom equipment to the rest Market Overview – Global • Global telecom equipment market is expected to be affected by aspect1 in the coming years  Spending on element1 will be around INR x1 in 20‐‐, as compared to INR x2 in 20‐‐

• The country1, country2, country3 are the few countries distinctively leading in global telecom equipment production • Country4, country5, country6 and country7 are the major countries driven by exports • Majority of the other countries including country8, country9, country10, country11 and country12 are largely import  Majority of the other countries including country8 country9 country10 country11 and country12 are largely import dependent

Telecom Equipment Import‐Export, Production and Usage Levels – Global Country

Imports

Exports

Production

Consumption

China

Low/Medium/High

Low/Medium/High

Low/Medium/High

Low/Medium/High

France

Low/Medium/High

Low/Medium/High

Low/Medium/High

Low/Medium/High

Germany

Low/Medium/High

Low/Medium/High

Low/Medium/High

Low/Medium/High

Japan

Low/Medium/High

Low/Medium/High

Low/Medium/High

Low/Medium/High

South Korea

Low/Medium/High

Low/Medium/High

Low/Medium/High

Low/Medium/High

UK

Low/Medium/High

Low/Medium/High

Low/Medium/High

Low/Medium/High

US

Low/Medium/High

Low/Medium/High

Low/Medium/High

Low/Medium/High

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Significant demand exists for telecom equipment in India  but they are being catered by element1 Market Overview – India (‐/‐) • Growth in telecom sector has enabled telecom equipment companies to flourish in India, regardless of segmen1,  G th i t l t h bl d t l i t i t fl i h i I di dl f 1 segment2 or segment3 • While majority of the domestic telecom equipment companies started off as entity1, the focus is gradually shifting to element2

• As per 20‐‐ ‐ ‐‐, telecom equipment worth INR x1 bn was consumed in India • Segment1 accounts for around x2% of the total telecom equipment industry in India • Country1 and Country2 telecom equipment products dominate the market in India at present

Telecom Equipment – Market Size & Growth

Telecom Equipment – Domestic Consumption

INR bn b1 a1

a2

a3

2012

2013e

2014e

a5

a4

2015e

2016e

TELECOM EQUIPMENT MARKET IN INDIA 2013.PPT

c1

c2 6


Drivers & Challenges

Drivers

Challenges

Growth in Wireless Subscriber Base

Security Concerns

Next Generation Voice and Data  Next Generation Voice and Data Services

High Telecom Equipment Imports

Government Initiatives and  Progressive Reforms in the Industry IPv4 to IPv6 Migration

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Market Trends (‐/‐)

SAMPLE Mobile Battery

• Finding 1 Telecom Equipment  Certification

Strengthening of  g g R&D

 Sub‐finding 1

• Finding 2 • Finding 3

• Finding 4 • Finding 5 Fi di 5 • Finding 6

• Finding 7 • Finding 8 • Sub‐finding 2

• Finding 9 Finding 9

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Porter’s Five Forces Analysis

SAMPLE Threat of New Entrants

Impact

Impact

Impact Impact Bargaining Power of Suppliers

Competitive Rivalry

Bargaining Power of Buyers

Impact Threat of Substitutes

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Competitive Benchmarking (‐/‐) Public Trading Comparables (FY 20‐‐)  Company1

Company2

Company3

Market Capitalization (INR mn)

X1

Y1

Z1

Share Price (INR)

X2

Y2

Z2

EV/EBITDA (x)

S SAMPLE X3

Y3

Z3

EV/Revenue (x) /

X4

Y4

Z4

PE Ratio

X5

Y5

Z5

Note: Top 3 Public companies based on the Market Capitalization; Market Capitalization and product segments, Share Price and PE ratio is as of ‐‐/‐‐/20‐‐ TELECOM EQUIPMENT MARKET IN INDIA 2013.PPT

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Competitive Benchmarking (‐/‐) Key Ratios of Top 3 Companies – Operational Basis (FY 20‐‐) (‐/‐) % a b c d e

• Finding 1 Finding 1 • Finding 2 • Finding 3 • Finding 4 g

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Major Public Companies – Summary  Profit/Loss (INR mn)

Size of the Bubble represents Market  Capitalization in INR mn

Total Income (INR mn)

company1

company2

company3

company4 The list is not exhaustive

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SAMPLE 

Public: Domestic Company – company1 (1/4) Company Information Corporate Address

Company Address

Tel No.

+91‐xx‐ yyyyyyyyy

Fax No.

+91‐ww‐zzzzzzzz

Website

www.companyA.com

Year of Incorporation p

19‐‐

Ticker Symbol

‐‐‐‐‐‐

Stock Exchange

Exchange Name

Offices and Centres – India 

Head Office

Products and Services Products and Services Category

Products/Services

Key People Service

• Product 1 Product 1 • product 2 • product 3

N Name

D i ti Designation

Person 1

Designation

Person 2

Designation

Person 3

Designation

Note: The list of products and services is not exhaustive TELECOM EQUIPMENT MARKET IN INDIA 2013.PPT

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SAMPLE 

Public: Domestic Company – company1 (2/4) Financial Snapshot i i lS h Revenue INR mn

Total Income i

a b

K Key Ratios i

Net Profit/Loss

Profit INR mn

k

j

d e

h

f

c

g 20‐‐

20‐‐

20‐‐

20‐‐

Financial Summary 

• The company reported total Income of  INR y4 mn in FY 20‐‐ registering an increase of x% over FY 20 registering an increase of x% over FY 20‐‐ • The company earned an operating margin of p% in FY 20‐‐,  a  decrease of y percentage points over FY 20‐‐ • The company reported debt to equity ratio of q in FY 20‐‐, an  increase of r% over FY 20‐‐

Key Financial Performance Indicators Market Capitalization (INR bn) Total Enterprise Value (INR bn) EPS (INR) EPS (INR) PE Ratio (Absolute)

y‐o‐y change  (2011‐10)

2011

2010

2009

‐2.99

35.05%

38.03%

47.29% 49.95%

‐3.81

30.66%

34.47%

39.25% 45.23%

‐2.07

31.01%

33.08%

38.38% 49.98%

‐0.50

23.82%

24.33%

38.05% 31.21%

1.34

17.73%

16.39%

23.84% 16.70%

0.41

18.62%

18.21%

24.31% 19.18%

‐0.53

12.87%

13.40%

18.29% 14.25%

156.69

296.80%

140.10% 232.55% 173.54%

7.62

17.84%

10.22%

16.89% 16.51%

‐1.24

11.68%

12.93%

8.55%

5.13%

‐1.67 1.67

4.27%

5.93%

6.09%

2.32%

2008

Profitability Ratios Operating Margin Net Margin Profit Before Tax Margin Return on Equity Return on Capital Employed Return on Working Capital Return on Assets Return on Fixed Assets

Cost Ratios

• The company earned a net profit of INR  x4  mn in FY 20‐‐, as  compared to net profit of INR  x3 mn in FY 20‐‐

Indicators

Particulars 

Value (dd/mm/2013) z1 z2 z3 z4

Operating costs (% of Sales) Administration costs (% of  Sales) Interest costs (% of Sales) Interest costs (% of Sales)

Liquidity Ratios Current Ratio Cash Ratio

‐40.67%

5.05

8.52

10.97

13.98

1.02%

3.54

3.51

5.06

11.04

Leverage Ratios Debt to Equity Ratio Debt to Capital Ratio b l Interest Coverage Ratio

4.39%

0.85

0.82

1.08

1.19

‐10.53%

0.35

0.39

0.48

0.52

28.66%

8.40

6.53

8.02

22.36

Efficiency Ratios Fixed Asset Turnover Asset Turnover Current Asset Turnover Working Capital Turnover Capital Employed Turnover

137.15%

9.47

3.99

5.74

3.69

7.52%

0.41

0.38

0.45

0.30 0.38

4.02%

0.48

0.46

0.55

14.45%

0.59

0.52

0.60

0.41

9.64%

0.76

0.69

0.94

0.66

Improved

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Decline

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SAMPLE 

Public: Domestic Company – company1 (3/4) Key Business Segments

Key Geographic Segments

abc

abc Company filed revenue  Company filed revenue under single  business  segment

a b

d

c

xyz

e

h

i

j

k

f

l

m

n

p

20‐‐

20‐‐

20‐‐

20‐‐

g 20‐‐

Key Information Description 

Details

Overview

• Company1 engages in the manufacture and sale of telecommunication equipment  primarily in India

Extended Product  Portfolio

• It offers a range of telecom products and solutions, including switching, transmission,  access, and subscriber premises equipment • The company offers global system for mobile products, such as Base Trans‐Receiver  Station (BTS), BTS Shelter, roof top towers, transceivers, code division multiple access  products based on digital wireless technology to provide mobile communication

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Public: Domestic Company – company1 – SWOT Analysis  (4/4)

• Strength 1

• Weakness 1

• Strength 2

• Weakness 2

• Strength 3

• Weakness 3

S

W

O

T

• Opportunity 1

• Threat 1

• Opportunity 2

• Threat 2

• Opportunity 3

• Threat 3

SAMPLE TELECOM EQUIPMENT MARKET IN INDIA 2013.PPT

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Strategic Insights (‐/‐) •Finding 1

Recommendation1 • Finding 2 Finding 3 • Finding 3 • Finding 4 • Finding 5

Finding 6

Finding 7

Finding 8

Finding 9

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Telecom equipment market in india 2013 sample