1851

18821985

19861994

19951997

20112013

2015

Evolution of Telecom in India

Privatization Of Privatization Of Telecommunications IndustryTelecommunications Industry

Liberalization attempt in 1981 by then Prime Minister Indira Gandhi to Liberalization attempt in 1981 by then Prime Minister Indira Gandhi to bring French Company Alcatel to India but was scrapped due to political bring French Company Alcatel to India but was scrapped due to political pressurespressures

Privatization process started in 1992 wherein Government permitted Privatization process started in 1992 wherein Government permitted private players to provide Value Added Services (VAS) such as paging, private players to provide Value Added Services (VAS) such as paging, cellular, data services and VSAT followed by Fixed Telephony Servicecellular, data services and VSAT followed by Fixed Telephony Service

The Telecom Sector received Rs. 59,796 crores of FDI from April 2000 to The Telecom Sector received Rs. 59,796 crores of FDI from April 2000 to January 2014 that represents 6% of the total FDI received by all the January 2014 that represents 6% of the total FDI received by all the sectors together.sectors together.

Bharti Airtel:Bharti Airtel:Bharti Airtel Limited is an Indian multinational Bharti Airtel Limited is an Indian multinational telecommunications services company headquartered in New telecommunications services company headquartered in New Delhi, India. It operates in 20 countries across South Asia, Africa, Delhi, India. It operates in 20 countries across South Asia, Africa, and the Channel Islands.and the Channel Islands.Founder: Sunil Bharati MittalFounder: Sunil Bharati Mittal

Vodafone:Vodafone:Vodafone Group plc is a British multinational telecommunications Vodafone Group plc is a British multinational telecommunications company headquartered in London and with its registered office in company headquartered in London and with its registered office in Newbury, Berkshire.Newbury, Berkshire.Founders: Ernest Harrison, Gerry WhentFounders: Ernest Harrison, Gerry Whent

IDEA:IDEA:Idea Cellular is an Aditya Birla Group Company, India's first truly Idea Cellular is an Aditya Birla Group Company, India's first truly multinational corporation. Idea is a pan-India integrated GSM multinational corporation. Idea is a pan-India integrated GSM operator offering 2G and 3G services, and has its own NLD and ILD operator offering 2G and 3G services, and has its own NLD and ILD operationsoperationsFounders: Aditya Vikram Kumar Mangalam Birla, G. D. BirlaFounders: Aditya Vikram Kumar Mangalam Birla, G. D. Birla

Reliance:Reliance:Reliance Communications Ltd. is an Indian Internet access and Reliance Communications Ltd. is an Indian Internet access and telecommunications company headquartered in Navi Mumbai, telecommunications company headquartered in Navi Mumbai, India. Reliance Communications is the fourth largest telecom India. Reliance Communications is the fourth largest telecom operator in India with 109.80 million subscribers as of April operator in India with 109.80 million subscribers as of April 2015.2015.Founders: Dhirubhai Ambani, Mukesh AmbaniFounders: Dhirubhai Ambani, Mukesh Ambani

BSNL:BSNL:Bharat Sanchar Nigam Limited is an Indian state-owned Bharat Sanchar Nigam Limited is an Indian state-owned telecommunications company headquartered in New Delhi, telecommunications company headquartered in New Delhi, India.India.CEO: Shri Anupam ShrivastavaCEO: Shri Anupam Shrivastava

Current ScenarioCurrent Scenario

Particulars Subscribers (in millions)Wireless 975.78Wireline 26.27Total 1,002.05

Particulars TeledensityUrban Teledensity 148.90Rural Teledensity 48.60Total Teledensity 79.67

Subscriber base as on May 31, 2015

Teledensity as on May 31, 2015

Total Broadband Subscribers

104.96 millionBroadband subscribers as on May 31, 2015

Source: TRAI Report May 2015

Source: Technopak

“A 10% increase in broadband penetration increases the per capita GDP by 1.38% in the developing countries.” - World Bank

Pricing Strategies In TelecommunicationsPricing Strategies In TelecommunicationsIn telecommunications, people are provided services on the basis of pre-In telecommunications, people are provided services on the basis of pre-payment or post-payment. Companies adopt several pricing strategies to payment or post-payment. Companies adopt several pricing strategies to gain a considerable market share among various competitors and they gain a considerable market share among various competitors and they are as follows:are as follows:

Penetration PricingPenetration Pricing

Price SkimmingPrice Skimming

Psychological PricingPsychological Pricing

Product Line PricingProduct Line Pricing

Captive Product PricingCaptive Product Pricing

Promotional PricingPromotional Pricing

Premium PricingPremium Pricing

Pricing Strategy MatrixPricing Strategy Matrix

Penetration Pricing:- Penetration Pricing:-

The price charged for products and services is set artificially low in order to gain The price charged for products and services is set artificially low in order to gain market share. Once this is achieved, the price is increased. market share. Once this is achieved, the price is increased.

Price Skimming:Price Skimming:

Price skimming sees a company charge a higher price because it has a substantial Price skimming sees a company charge a higher price because it has a substantial competitive advantage. However, the advantage tends not to be sustainable. competitive advantage. However, the advantage tends not to be sustainable. The high price attracts new competitors into the market, and the price The high price attracts new competitors into the market, and the price inevitably falls due to increased supply.inevitably falls due to increased supply.

Psychological Pricing:Psychological Pricing:

This approach is used when the marketer wants the consumer to respond on an This approach is used when the marketer wants the consumer to respond on an emotional, rather than rational basis.emotional, rather than rational basis.

For Example: Mobile recharge charges Rs49, Rs99 instead of Rs50 or Rs100For Example: Mobile recharge charges Rs49, Rs99 instead of Rs50 or Rs100

Product Line Pricing:

Where there is a range of products or services, the pricing reflects the benefits of parts of the range.For Example: BSNL sim card family combo packs

Captive Product Pricing:

Where products have complements, companies will charge a premium price since the consumer has no choice. For Example: CDMA Handsets, Set top boxes.

Promotional Pricing:

Pricing to promote a product is a very common application. There are many examples of promotional pricing including approaches such as BOGOF (Buy One Get One Free), money off vouchers and discounts. For Example: BSNL Pyari Jodi Plan

Other Pricing StrategiesOther Pricing StrategiesThere are two possible alternatives for pricing any telecommunication service:There are two possible alternatives for pricing any telecommunication service:

Socially desirable pricing Socially desirable pricing

This type of pricing strategy includes:This type of pricing strategy includes:

Charges customers as per their paying capabilityCharges customers as per their paying capability

Price of basic services should be low and not related to cost of processing servicesPrice of basic services should be low and not related to cost of processing services

Cost based pricing Cost based pricing

This type of pricing strategy includes:This type of pricing strategy includes:

Pricing components include fixed charges(rentals), capital cost of infrastructure required to build Pricing components include fixed charges(rentals), capital cost of infrastructure required to build network network

Variable charges like usage charges, recovery operation, maintenance, administrative and inter-Variable charges like usage charges, recovery operation, maintenance, administrative and inter-connection chargesconnection charges

Non-Price Strategies Non-Price Strategies

Major Challenges for Telecom Providers

Major Technological changes Major Technological changes and challenges in and challenges in

telecommunicationstelecommunications

emerging technologies are affecting industries and lifestyle

highlights the importance of understanding the principles of

telecommunications, and, hopefully, to inspire you to

"think telecom."

Changes….Changes….An enormous amount of the activity driving An enormous amount of the activity driving telecommunications has to do with the emergence of telecommunications has to do with the emergence of advanced applications. The following sections discuss advanced applications. The following sections discuss some of the changes that are occurring in both some of the changes that are occurring in both telecommunications, as well as some of the changes telecommunications, as well as some of the changes expected in the next several years.expected in the next several years.

Incorporating Human Senses in TelecommunicationsIncorporating Human Senses in Telecommunications

The Emergence of Wearable'sThe Emergence of Wearable's

Incorporating Human Senses in Incorporating Human Senses in TelecommunicationsTelecommunications

Telecommunications has allowed a virtual world to emerge.Telecommunications has allowed a virtual world to emerge.

The human mind acts on physical sensations in the course of its The human mind acts on physical sensations in the course of its information processing; the senses of sight, sound, touch, and information processing; the senses of sight, sound, touch, and motion are key to our perception and decision making.motion are key to our perception and decision making.

Developments in sensory technologies and networks will allow a Developments in sensory technologies and networks will allow a new genre of sensory reality to emerge, bridging the gap new genre of sensory reality to emerge, bridging the gap between humans and machines. One of the most significant between humans and machines. One of the most significant evolutions occurring in computing and communications is the evolutions occurring in computing and communications is the introduction of the human senses into electronic information introduction of the human senses into electronic information streams.streams.

The Emergence of Wearable'sThe Emergence of Wearable's

Xybernaut's Mobile Assistant IV (MA-IV), a wearable computer, provides its wearer with a full-fledged PC A wrist keyboard sports 60 keys.

Headgear suspended in front of the eye provides a full-color VGA

screen, the size of a postage stamp but so close to the eye

that images appear as on a 15-inch monitor. A miniature video

camera fits snugly in a shirt pocket.

Adapting to New Traffic Adapting to New Traffic PatternsPatterns

In today's environment, telecommunications embodies four In today's environment, telecommunications embodies four main traffic types, each of which has different requirements in main traffic types, each of which has different requirements in terms of network capacity, tolerance for delays—and terms of network capacity, tolerance for delays—and particularly variations in the delay—in the network, and particularly variations in the delay—in the network, and tolerance for potential congestion and therefore losses in the tolerance for potential congestion and therefore losses in the network:network:

Voice - ChallengesVoice - Challenges

There is yet a huge market to be served. Voice There is yet a huge market to be served. Voice communications are typically referred to as communications are typically referred to as being being narrowbandnarrowband, meaning that they don't require a , meaning that they don't require a large amount of network capacity. large amount of network capacity.

For voice services to be intelligible and easy to use, For voice services to be intelligible and easy to use, delays must be kept to a minimum, however, so the delays must be kept to a minimum, however, so the delay factors in moving information from Point A to delay factors in moving information from Point A to Point B have to be tightly controlled in order to Point B have to be tightly controlled in order to support real-time voice streams.support real-time voice streams.

Data- ChallengesData- Challenges Data communications refers to the exchange of Data communications refers to the exchange of

digitized information between two machines. digitized information between two machines. Depending on the application supported, the Depending on the application supported, the bandwidth or capacity requirements can range from bandwidth or capacity requirements can range from medium to high. medium to high.

As more objects that are visual in nature (such as As more objects that are visual in nature (such as images and video) are included with the data, that images and video) are included with the data, that capacity demand increases. Depending again on the capacity demand increases. Depending again on the type of application, data may be more or less tolerant type of application, data may be more or less tolerant of delays. Text-based exchanges are generally quite of delays. Text-based exchanges are generally quite tolerant of delays. tolerant of delays.

But again, the more real-time nature there is to the But again, the more real-time nature there is to the information type, as in video, the tighter the control information type, as in video, the tighter the control you need over the latencies.you need over the latencies.

Image-ChallengesImage-Challenges

Image communications requires medium to high Image communications requires medium to high bandwidth—the greater the resolution required, the bandwidth—the greater the resolution required, the greater the bandwidth required. greater the bandwidth required.

For example, many of the images taken in medical For example, many of the images taken in medical diagnostics require very high resolution. Image traffic diagnostics require very high resolution. Image traffic tolerates some delay because it includes no motion tolerates some delay because it includes no motion artefacts that would be affected by any distortions in artefacts that would be affected by any distortions in the network.the network.

Video-challengesVideo-challenges Video communications, which are becoming Video communications, which are becoming

increasingly popular and are requiring ever-greater increasingly popular and are requiring ever-greater bandwidth, are extremely sensitive to delay. The bandwidth, are extremely sensitive to delay. The future is about visual communications. future is about visual communications.

We need to figure out how to make video available We need to figure out how to make video available over a network infrastructure that can support it and over a network infrastructure that can support it and at a price point that consumers are willing to pay. at a price point that consumers are willing to pay. When our infrastructures are capable of supporting When our infrastructures are capable of supporting the capacities and the delay limitations required by the capacities and the delay limitations required by real-time applications, video will grow by leaps and real-time applications, video will grow by leaps and bounds.bounds.