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Telecommunication in India

By:Anmol Saxena MT-1 09118017 B.Tech Metallurgical and Materials Engg.

Introduction
oTelecommunication refers to the process o
of communication via audio or video over a large distance between the communicating individuals. With the advent of mobile telecommunication there has been a revolution in this industry owing to the fact that now mobile telecommunication has converted to a necessity from being a luxury.

History
o In 1881 a licence was granted to the Oriental
Telephone Company Limited for opening telephone exchanges at Kolkata, Mumbai, Chennai and Ahmedabad and the first formal telephone service was established in the country. In 1960 the first subscriber trunk dialling route was commissioned between Kanpur and Lucknow. In 1985 the first mobile telephone service started in Delhi.

Introduction to Indian Scenario


o The Indian Telecommunications Industry is the o o o
world's fastest growing telecom industry whose network is presently placed at the third position in the world. 688.38 mln telephone and 652.42 mln mobile phone connections (July 2010). Second largest telecom network in terms of number of wireless connections after China. Today, Bharti Airtel is the largest mobile telecom company in India and has a market share of 30.07%.

Recent Growth
Recent Growth In Telephone Base
Estimated telephone subscriber base Telephone Subscriber Base

oAccording to the

2011, 842.86 2010, 688.38 2009, 562.21

2008, 384.79

o
2009 2010 2011

2008

TRAIs estimates the telephone base in India has grown from 384.79 million (2008) to 688.38 million (2010). The estimates for 2011 is 842.86 million customers.

Recent Growth
Recent Growth in Wireless Base
Estimated wireless user base Wireless User Base

oAccording to the
2011, 810.53

2010, 652.42 2009, 525.15

2008, 346.89

o
2009 2010 2011

TRAIs estimates the wireless base in India has grown from 346.89 million (2008) to 652.42 million (2010). The estimates for 2011 is 810.53 million customers.

2008

Recent Growth
oThe demand for telecommunication has been o
ever increasing but after privatization and liberalisation of this field in 1994, a boom of this sector was seen. The enormity of the employment opportunities can be gauged from the fact that there were 3.7 million Public Call Offices in December 2006 up from 2.3 million in December 2004. The total revenue in the telecom service sector is 40444.66 crores till March 2009.

Sector-wise Analysis
The Wire-line Sector. Government owned companies own almost 92% market share. BSNL and MTNL are the top leaders in this segment. A particular decline was seen in this are from 37.06 million (2009) to 35.96 million (2010). Might be due to the excessive focus of market on Mobile industry. Broadband users have gone up from 7.83 million (2009) to 9.45 million (2010).

o o o

Sector-wise Analysis
The GSM Sector. GSM: Global system for Mobile communication. Government owned companies own almost 25% market share. BSNL is the top public segment leader while Bharti Airtel is the top private leader. This has more than 75% of the mobile industry share.

o o o o

Sector-wise Analysis
The CDMA Sector. CDMA: Code division multiple access. Reliance is the top leaders in this segment. This sector was introduced in India as a limited mobility solution. Has less than 25% of Indian mobile market Share. Is a new technology but covers less coverage area.

o o o o o

Regulatory Framework
o The Telecom Regulatory Authority of India (TRAI)
was set up in March 1997 as a regulator for Telecom sector. The TRAIs functions are recommendatory, regulatory and tariff setting in telecom sector. (TDSAT) came into existence in May, 2000. TDSAT has been empowered to adjudicate any dispute between a licensor and a licensee between two or more service providers between a service provider and a group of consumers hear and dispose of appeal against any direction, decision or order of TRAI.

o Telecom Disputes Settlement and Appellate Tribunal


Tariff Determination
oTariffs for telecommunication services
have evolved from a regime where tariffs were determined by TRAI to a regime where tariffs are largely under forbearance.

oTRAI intervenes by regulating the tariffs


for only those services, the markets of which are not competitive.

Mobile Tariffs in India one of the Lowest


Mobile Tariffs in USD
India China Pakistan Malaysia Argentina Brazil 0.02 0.03 0.04 0.09 0.11 0.16 0.17 0.19 0.22 0.23

oThe mobile tariff is the

France
UK Italy Belgium

lowest in the World, still the revenue in India stood at US$29.69 billion as against US$25.04 billion a year before.

Economic Impact
oTelecom industry has a great potential for
o o
employment. Mobility helps in GDP increase and business propagation. A study by World Bank estimates that impact on economic growth could be as high as 1.2% for every 10% increase in mobile penetration.

Government Initiatives
oAll telecom services have been opened up
for free competition for unprecedented growth. Availability of low cost mobile handsets. The robust telecom network has also facilitated the expansion of BPO industry that is having 500,000 employees now and adding 400 employees per day.

o o

Competition Overview
There are three types of players in Indian market: State owned companies (BSNL and MTNL)

oPrivate Indian owned companies (Reliance


Infocomm, Tata Teleservices)

oForeign invested companies (Vodafone,


Bharti Tele-Ventures, Escotel)

Opportunities
oStrong competition led to low tariffs as o
well as simplification of policy environment that has promoted healthy competition among various players. Due to this reason, telecom density in the country has risen to over 58.17 per cent at the end of July 2010, from 3.6 per cent in March 2001. A whopping growth of 1500% in 10 yrs.

Growth Avenues
oThe Indian telecom
sector offers unprecedented opportunities for foreign companies in various areas, such as 3G, virtual private network etc.

Why India?
o Worlds largest democracy with an independent judiciary. o Skilled and competitive labour force. o On an average, around 6 million new users
o

added per month, making India the worlds fastest growing wireless services market. Liberal Foreign Investment Regime : FDI limit increased from 49 per cent to 74 per cent; the rural telecom equipment market also open to large investments.

Why India?
o The large untapped potential in Indias rural
o o o
markets revealed by the 1.9 per cent tele-density in rural markets as compared to the national level of 58.17 per cent. The Government is promoting telecom manufacturing by providing tax sops and establishing telecom-specific Special Economic Zones. Among the countries offering the highest rates of return on investment. At a time when global telecom majors are struggling to cope up with their losses; Indias telecom success story represents an attractive and lucrative destination for investment.

Mobile Number Portability


oMobile Number Portability (MNP) is a o
o o
service which allows consumers to retain their numbers while changing service providers. This is awaiting implementation till 30th Oct.10. This system is further going to increase the on-going competition in the market. A set of rules given by TRAI have to be followed by the customer while using MNP.

o Indian telecom sector has seen

The Big Picture

o
o o

unprecedented growth and in its present form it is granting employment to lakhs of people. There is still a lot left to develop in this industry as 3G and VAS can be further implemented and their services be widened. Video calls and VPN are also the need of the hour. Telecom services have given India a great boost in growth and development and this trend can be expexted in the future.

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