Industry Note on Telecom Sector in India

7/29/2019 Industry Note on Telecom Sector in India

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Industry note on Telecom Sector in India

By Group 15:


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Mukesh Kumar Yadav (031/02)

R Vishal (038/02)

Tejinder Ammla (055/02)

Yogesh Taak (065/02)

Regulation and Government Policy

LIRNEasia's Telecommunications Regulatory Environment (TRE) index, which summarises stakeholders' perception on certain TRE

dimensions, provides insight into how conducive the environment is for further development and progress. The most recent survey wasconducted in July 2008 in eight Asian countries, including Bangladesh, India, Indonesia, Sri Lanka, Maldives, Pakistan, Thailand, and the

Philippines. The tool measured seven dimensions:

i) market entry


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ii) access to scarce resourcesiii) interconnectioniv) tariff regulationv) anti-competitive practicesvi) universal servicesvii) quality of service, for the fixed, mobile and broadband sectors

The results for India, point out to the fact that the stakeholders perceive the TRE to be most conducive for the mobile sector followed by

fixed and then broadband. Other than for Access to Scarce Resources the fixed sector lags behind the mobile sector. The fixed and mobile

sectors have the highest scores for Tariff Regulation. Market entry also scores well for the mobile sector as competition is well

entrenched with most of the circles with 45 mobile service providers. The broadband sector has the lowest score in the aggregate. The

low penetration of broadband of mere 3.87 against the policy objective of 9 million at the end of 2007 clearly indicates that the

regulatory environment is not very conducive.


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Evolution

1851

First operational land lines were laid by the government near Calcutta

1881

Telephone services introduced in India

1883

Merger with postal system

1923

Formation of Indian radio Telegraph Company

1932 Merger of ETC and IRT into Indian Radio and Cable Communication Company

1947


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Nationalization of all foreign telecommunication companies to form the posts, telephone and telegraph, a monopoly run by thegovernments ministry ofcommunications

1985

Department of telecommunication established, an exclusive provider of domestic and long-distance services that would beits own regulator

1986

Conversion of dot into two wholly government owned companies the VSNL for internationaltelecommunication and MTNL for services in metropolitan areas

1997

Telecom regulatory authority created

Telecommunication in India

In August 1995, Chief Minister of West Bengal, Shri Jyoti Basu ushered in the cell phone revolution in India by making the first call to

Union Telecom Minister Sukhram. Sixteen years later 4th generation services were launched in Kolkata.


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With a subscriber base of more than 929 million, the Mobile telecommunications system in India is the second largest in the world and it

was thrown open to private players in the 1990s. GSM was comfortably maintaining its position as the dominant mobile technology with

80% of the mobile subscriber market, but CDMA seemed to have stabilised its market share at 20% for the time being. By May 2012 the

country had 929 million mobile subscribers, up from 350 million just 40 months earlier. The mobile market was continuing to expand at

an annual rate in excess of 40% coming into 2010.

The country is divided into multiple zones, called circles (roughly along state boundaries). Government and several private players run

local and long distance telephone services. Competition has caused prices to drop and calls across India are one of the cheapest in the

world. The rates are supposed to go down further with new measures to be taken by the Information Ministry. In September 2004, the

number of mobile phone connections crossed the number of fixed-line connections and presently dwarfs the wire line segment by a

ratio of around 20:1. The mobile subscriber base has grown by a factor of over a hundred and thirty, from 5 million subscribers in 2001

to over 929 million subscribers as of May 2012. India primarily follows the GSM mobile system, in the 900 MHz band. Recent operators

also operate in the 1800 MHz band. The dominant players are Airtel, Reliance Infocomm, Vodafone, Idea cellular and BSNL/MTNL. There

are many smaller players, with operations in only a few states.

International roaming agreements exist between most operators and many foreign carriers. The government allowed Mobile number

portability (MNP) which enables mobile telephone users to retain their mobile telephone numbers when changing from one mobile

network operator to another. India is divided into 22 telecom circles.


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Number of Subscribers

India has the fastest growing telecom network in the world with its high population and development

potential. Airtel, Idea, Reliance, Tata Docomo, BSNL, Aircel, Tata Indicom, Vodafone, MTNL, and Loop Mobile are other major operators

in India. However, rural India still lacks strong infrastructure. India's public sector telecom company BSNL is the 7th largest telecom

company in world.

Telephony introduced in India in 1882. The total number of telephones in the country stands at 960.9 million, while the

overall teledensity has increased to 79.28% as of May 31st, 2012 and the total numbers of mobile phone subscribers have reached929.37 million as of May 2012. The mobile tele-density has increased to 76.68 % in May 2012. In the wireless segment, 8.35 million

subscribers were added in May 2012. The wire line segment subscriber base stood at 31.53 million.

Indian telecom operators added a staggering 227.27 million wireless subscribers in the 12 months between Mar 2010 and Mar

2011 averaging at 18.94 million subscribers every month. To put this into perspective, China which currently possesses the world's

largest telecommunications network added 119.2 million wireless subscribers during the same period (March 2010 - March 2011) -

averaging 9.93 million subscribers every month (a little over half the number India was adding every month).

So, while India might currently be second to China in the TOTAL number of mobile subscribers, India has been adding nearly twice as

many subscribers EVERY month until March 2011. Mobile teledensity increased by almost 18.4 percentage points from Mar 2010 and

Mar 2011 (49.60% to 67.98%) while wire line subscriber numbers fell by a modest 2.2 million. This frenetic pace of monthly subscriber

additions means that the Indian mobile subscriber base has shown a year on year growth of 43.23%. According to recent reports, India

was purported to overtake China to become the world's largest mobile telecommunications market by the year 2013. It was also

predicted that by 2013, the teledensity will shoot up to 75% and the total mobile subscriber base would be a colossal 1.159 billion.


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Telecom Circle Wireless Subscriber base in mm (May 12)

Delhi 42.95

Gujarat & Daman & Diu 54.32

Haryana 23.00

Himachal Pradesh 7.41

Jammu and Kashmir 6.57

Karnataka 56.63

Kerala & Lakshadweep 34.51

Kolkata 25.25

Madhya Pradesh & Chhattisgarh 53.30

Maharashtra & Goa (excluding Mumbai ) 71.00

Mumbai 35.93

North East 8.76

Orissa 26.27Punjab 31.17

Rajasthan 49.52

Tamil Nadu(including Chennai) 78.96


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Uttar Pradesh(East) 77.74

Uttar Pradesh(West) & Uttarakhand 55.12

West Bengal (Excluding Kolkata) 46.79


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Market Share of Players


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Services Offered

With the growth of telecom services, telecom equipment and accessoriesmanufacturing has also grown in a big way. Indian Telecom

sector, like any other industrial sector in the country, has gone through many phases of growth and diversification. Starting from

telegraphic and telephonic systems in the 19th century, the field of telephonic communication has now expanded to make use of

advanced technologies like GSM, CDMA, and WLL to the great 3G Technology in mobile phones. 4G was recently launched in Kolkata byAirtel. Day by day, both the public players and the private players are putting in their resources and efforts to improve the

telecommunication technology so as to give the maximum to their customers.

Company analysis and strengths of companies

Here is an analysis of the top Indian companies in the telecom sector

Bharti Airtel


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Telecom giant Bharti Airtel is the flagship company of Bharti Enterprises. The

BhartiGroup has a diverse business portfolio and has created global brands in thetelecommunication sector. Airtel comes from Bharti Ai

rtel Limited, Indias largestintegrated and the first private telecom services provider with a footprint in all the 22 telecom circles. Bharti

Airtel since its inception has been at the forefront of technology and has steered the course of the telecom sector in the country with its

world class products and services.

The businesses at Bharti Airtel have been structured into three individual strategic business units (SBUs) - Mobile Services, Airtel Tele

media Services& Enterprise Services. The mobile business provides mobile & fixed wireless services using GSM technology across 22

telecom circles while the Airtel Tele media Services business offers broadband & telephone services in 95 cities and has recently

launched India's best Direct-to-Home (DTH) service, Airtel digital TV. The Enterprise services provide end-to-end telecom solutions to

corporate customers and national & international long distance services to carriers. All these services are provided under the Airtel

brand.

They also offer an integrated suite of telecom solutions to their enterprise customers, in addition to providing long distance connectivity

both nationally and internationally. They have recently forayed into media by launching their DTH and IPTV Services. All these servicesare rendered under a unified brand "Airtel". The company also deploys, owns and manages passive infrastructure pertaining totelecom

operations under its subsidiary Bharti Infratel Limited. Bharti Infratel owns 42%of Indus Towers Limited. Bharti Infratel and Indus

Towers are the two top providers of passive infrastructure services in India.

Company shares are listed on The Stock Exchange, Mumbai (BSE) and The National Stock Exchange of India Limited (NSE).

It is the largest cellular service provider in India, with over 187.30 million subscribers at the end of June 2012.

!dea


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In 2000, Tata Cellular was a company providing mobile services in Andhra Pradesh. When Birla-AT&T brought Maharashtra and Gujarat

to the table, the merger of these two entities was a reality. Thus Birla-Tata-AT&T, popularly known as Batata, was born and was later

rebranded as IDEA.

Then Idea set sights on RPGs operations in Madhya Pradesh which was successfully acquired, helping Batata have a million subscribers,

and the licence to be the fourth operator in Delhi was clinched.

In 2004, Idea (the company had by then been rechristened) bought over the Escorts groups Escotel gaining Haryana, Uttar Pradesh

(West) and Kerala and licences for three more UP (East), Rajasthan and Himachal Pradesh. By the end of that year, four million

Indians were on the companys network.

In 2005, AT&T sold its investment in Idea, and the year after Tatas also bid good bye to pursue an independent telecom business. And

Idea was left only with one promoter, the AV Birla group. Modis joint venture partner, Telekom Malaysia, invested Rs 7,000 crore for a14.99% stake in Idea. Just around then, Ideas subsidiary, Aditya Birla Telecom sold a 20% stake to US-based Providence Equity Partners

for over Rs 2,0000 crore.

Idea's subscriber base as at the end of August 2011 according to the statistics, is totalling to 98,441,714 or 16.09% (approx.) of the

total mobile connections in India.

Idea leads all other telecom operators in India in the MNP race, with a net gain of 1,031,380 subscribers as on 31 August 2011.

Idea also leads all other competitors in having the most active subscriber base, scoring highly on the VLR statistics. Visitor Location

Register (VLR) is basically a temporary database of the subscribers who have roamed into the particular area, which it serves. Each base

station in the network is served by exactly one VLR; hence a subscriber cannot be present in more than one VLR at a time.


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BSNL

Bharat Sanchar Nigam Limited is a state-owned telecommunications company headquartered in New Delhi, India. It is the largest

provider of fixed telephony and fourth largest mobile telephony provider in India, and is also a provider of broadband services.However, in recent years the company's revenue and market share plunged into heavy losses due to intense competition in Indian

telecommunications sector.

BSNL is India's oldest and largest communication service provider (CSP). It had a customer base of 95 million as of June 2011. It has

footprints throughout India except for the metropolitan cities of Mumbai and New Delhi, which are managed by Mahanagar Telephone

Nigam (MTNL).

Subscriber Growth

The following table illustrates the gradual increase in mobile subscriber additions (in millions) in India since January 2002.


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Year Annual Addition (in millions)

2002 5.23

2003 17.49

2004 19.492005 27.86

2006 64.14

2007 85.27

2008 113.26

2009 178.25

2010 227.12

2011 148.32

Reference

1. www.wikipedia.org2. www.trai.gov.in
http://www.wikipedia.org/http://www.wikipedia.org/http://www.trai.gov.in/http://www.trai.gov.in/http://www.trai.gov.in/http://www.wikipedia.org/


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Mobile phone user distribution by Metro and by Circles

Latest State Wise Mobile Users in India -2012 (Figures till 2012) are as follows (Source : Cellular Operators Association of India)

City/Circle OperatorsNo. of Mobile UsersTill January 2012

Metros Delhi Bharti Airtel 8,589,731

Vodafone Essar 8,340,459

MTNL 2,698,690

IDEA 4,585,267

Aircel Ltd 2,364,118

Etisalat DB Telecom 759,210Delhi 27337475

Mumbai Loop Mobile 3240766


MTNL 2,793,532

Bharti Airtel 3,714,218

IDEA 2,818,843

Aircel Limited 1,202,151

Etisalat DB Telecom 469,909

Videocon 980,278

Uninor 1,424,832Mumbai 22,647,035

Chennai Aircel Cellular Ltd 4,400,664



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BSNL 1625378

Chennai 11,488,266

Kolkata Bharti Airtel 3,801,989

Vodafone Essar 4,445,740BSNL 2364543

Aircel Cellular Ltd 1,776,039

IDEA 1,210,597

Uninor 1,698,321

Loop Mobile 2,348

Videocon 2,966

Kolkata 15,302,543

All Metros 76,775,319

A Circle Maharashtra Vodafone Essar 12,659,140IDEA 14,972,162

Bharti Airtel 9449972

BSNL 5805799



Uninor 4,080,333

Loop Mobile 357

Videocon 13,681

48,222,166

Gujarat Vodafone Essar 15,761,617IDEA 7,713,978



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BSNL 3,881,473


Videocon 1,234,333

Uninor 3,052,199

Aircel Limited 591428Loop Mobile 73

39,082,512

A.P. IDEA 9,623,900


Vodafone Essar 6784329

BSNL 8,739,849


Uninor 3,142,932

Etisalat DB Telecom 34868

Videocon 10,93448,195,021

Karnatka Bharti Airtel 15,278,989

IDEA (Spice Comm.) 5,528,696


BSNL 6,291,725


Uninor 1,823,105


Videocon 11,987

Loop Mobile 61837,310,439

T.N. Vodafone Essar 10,021,991


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Aircel Limited 17467670

BSNL 7,481,418


IDEA 2,018,098

Uninor 1,677,247Etisalat DB Telecom 31,915

Videocon 1,179,228

49,895,518

A Circle 222,705,656

B Circle Kerala IDEA 7,402,840



BSNL 6,572,750

Aircel Limited 2,415,121Uninor 722,923


Videocon 238,083

26,691,724

Punjab IDEA (Spice Comm.) 5,194,458


BSNL 4684810



Aircel Limited 873,883Loop Mobile 147

Uninor 319


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22,153,148

Haryana IDEA 3,431,364



BSNL 2968127Etisalat DB Telecom 15,171

Videocon 852,165

Aircel Limited 583,521

Loop Mobile 93

Uninor 205

14,469,884

U.P.(W) IDEA 9,995,876


BSNL 4564944

Vodafone Essar 9,464,037Aircel Limited 2,038,307

Uninor 4,560,885


Loop Mobile 8

Videocon 8827

37,305,519

U.P.(E) Vodafone Essar 14559374

BSNL 9739987


IDEA 7,054,244Aircel Limited 2,365,414

Uninor 7,054,485


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Videocon 16,722

54859921

Rajasthan Vodafone Essar 9,409,930

Bharti Airtel 13768431BSNL 5,526,435

IDEA 3,762,139



Loop Mobile 400

Videocon 10,570

Uninor 383

33,920,026

M.P. IDEA 13,315,056

Bharti Airtel 9,602,627BSNL 4,355,040


Etisalat DB Telecom 78190

Aircel Limited 834,563

Videocon 1,158,819

Loop Mobile 270

Uninor 883

33,135,968

W.B. & A & N BSNL 3,481,079

Bharti Airtel 9,034,631Vodafone Essar 11,618,854

Dishnet Wireless 3,062,163


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IDEA 1,975,171

Uninor 3,640,447

Videocon 20,152

32,832,497

B Circle 255368687

C Circle H.P. Bharti Airtel 1777668

BSNL 1,677,735

IDEA 429,235

Dishnet Wireless 693,185

Vodafone Essar 422,962

STel 454924

Videocon 79,015

Uninor 61

5,534,785Bihar BSNL 5,638,904



ABTL (IDEA) 5,476,438


STel 2,029,624

Uninor 4,571,564


Videocon 20299

Loop Mobile 36445477032

Orissa BSNL 4,177,445


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IDEA 976,758

STel 833,665Uninor 1347034

Loop Mobile 966

Videocon 10,670

18624187

Assam BSNL 1,499,315




IDEA 287,682

STel 79,992Loop Mobile 325

Uninor 127

11,089,406

N.E. Bharti Airtel 2,194,615

BSNL 1,410,938



IDEA 191,918

STel 32,083

Loop Mobile 41Uninor 51

7,117,369


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J & K BSNL 938,529



Vodafone Essar 685,929

IDEA 162,560Uninor 40

5,388,517

C Circle 93231296

January 2012

All India 648080958

Additions inJanuary

8443849

telecom regulations and the 2G scam.. loopholes

Milestones in the sector over the last decade bsnl

4G and future of telecom and value added services

Spectrum allocation and pricing

Define terms specific to this sector

Revenue for companies segment and state wise, margins

Problems faced by industry players

Marketing strategies of companies


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Future regulation and tax impications of Vodafone case.. entry of foreign players in the industry

Technical parttower business

Bandwidth, frequenxy how calls are made. Technical stuff..

Network and services. Huawei, siemesnt, cisco etc

After this, we have 3g, voip etc

After this Airtel and other companies.. market share and players at each level..

How did each company start.. bsnl, reliance, bharti etc

Industry analysis .. porters etc

Compare companies.. all data..

1.Bahrti Airtel Performance at a glance2.Reliance Communications Performance at a glanceVodafone India Performance at a glance

3. Segmentation of Wireless Services (as on 31st March 2011)Concentration of Telecom Sector

4.Market Share of Wireless Subscribers (as on 31st March 2011)


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5.Market share of Wireline Service Providers (as on 31st March 2011)6.Market Share of Rural Wireless Subscribers (as on 31st March 2011)Market share of Rural Wireline Service Providers (as on 31st March 2011)

Subscriber Base of Wireless (GSM and CDMA) Services from 31st March 2006 to 31st March 2011

http://www.telecomindiaonline.com/indian-telecom-market-report-2011-12.html
http://www.telecomindiaonline.com/indian-telecom-market-report-2011-12.htmlhttp://www.telecomindiaonline.com/indian-telecom-market-report-2011-12.htmlhttp://www.telecomindiaonline.com/indian-telecom-market-report-2011-12.html

Industry Note on Telecom Sector in India

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