telecom reforms

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TELECOM REFORMS

IN INDIA

Presented to:

Shanta kakodkar

presented by :

Apoorva(1003)

Saurabh.j(1013)

Prashant(1018)

Sidharth(1023)

Paul(1027)4/13/2013 1


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What it is now

Size of the Industry 562 million Subscribers, 525.1 millionwireless connections per annum

Geographical distribution Gurgaon, Noida, Bangalore, Hyderabad,

Pune, Chennai, New Delhi, Mumbaiand other cities.

Output per annum Rs 136,833 crore per annum &Increasing 20% for every annum

Percentage In GDP 6% to Share

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For the youth, mobile phones are

not just a necessity

This segment particularly valuesprepaid schemes with free SMS

services

Providing services like Grouptalk and Group SMS

They generally prefer using post

paid schemes with value addedservices like information about

stock market, news updates and so

on.

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1851 Indian Telecom Industry started near Calcutta.

1881 the Telephone services were introduced.

1883 telephone services were merged with the postalsystem.

1923 the Indian Radio Telegraph Company (IRT) wasformed.

1947 all the foreign telecommunication companies

were nationalized to form the (PTT).4/13/2013 4


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Continued

Indian Telecom Industry was considered asa strategic service.

It was under state's control.

1980 the private sector allowed intelecommunications equipment was the

first reforms in telecommunications.4/13/2013 5


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Department ofTelecommunication set up

VSNL incorporated toprovide international

telecom services

MTNL incorporated to providefixed-line telephone services in

Mumbai and New Delhi

Government announces

the NationalTelecom Policy, opening upthe basic service sector to

private player

Licenses for 20 cellularcir

cles issued

Telecom Regulatory Authorityof India established by

government

ISP business openedup to operators otherthan DoT and VSNL.

TRAI issues the firsttariff order and cuts

domestic andinternational longdistance telephony

charges

Allows basic operatorsto provide WLL services on

a restri

cted basis

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Telecommunication reforms pre-90s

Department of Telecommunications (DOT) from Indianpost & telecommunication department

Provider of domestic and long-distance service(separate from the postal system).

Two wholly owned companies which were created.

Videsh Sanchar Nigam Limited.

Mahanagar Telephone Nigam Limited4/13/2013 7


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Videsh Sanchar Nigam Limited

Now Tata Communications, a global Indian-telecommunications company.

Provider of international wholesale voice services.

VSNL was the sole provider for overseas telecommunicationservice.

Infrastructure to private telecommunication operators.

Major player in the Domestic market.

Tata Communications acquired a 45% stake in VSNL

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Mahanagar Telephone Nigam Limited

The Government of India set up MTNL on 1 April 1986.

Aim of : Upgrading the quality of telecom services,

Expanding the telecom network,

Introducing new services Raising revenue for the telecom development

Needs of India's key metros - Delhi and Mumbai.

The Government of India currently holds 56.25% stake in thecompany

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Second phase reforms Evolved in 1991

Private players allowed entry

Government mandated 2 operators each circle

Radio paging , cellular mobile sector opened up

Act as a catalyst for broadband

Telecom at affordable rate

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Third phase reforms

Evolved in late 90s

FDI increased from 49 to 74 per cent

Stake sold in VSNL

Launch of CDMA service

More operators per circle

Long distance call Tariff reduced

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TRAI Came into existence in 1997

Governed by Telecom regulatory authority of India act 1997

Oversee orderly growth of telecom sector

Protects the interest of telecom operators and customers

TRAI act emended in 2000

Formation of telecom dispute settlement appellate tribunal

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Mobile Tariffs in India one of the

Lowest0.230.22

0.19

0.17

0.16

0.11 0.11 0.11

0.09

0 .05 0 .05

0.04

0.030.02

0

0.05

0.1

0.15

0.2

0.25

Belgium

Italy

UK

France

Brazil

Philippines

Taiwan

Argentina

Malayasia

HongKong

Thailand

Pakistan

China

India

USD

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VALU CHANGES IN TARIFS

LOCAL Rs 15 Ps 60

STD Rs 37 Ps 60

ISD Rs75 Ps 7

Particular 2009-2010 2010-11

Revenue of publiccompanies

37390 33976

Revenue of Privatesector companies

113270 132776

TOTAL REVENUE 150660 166752

FINANCIAL PERFORMANCE

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0

100

200

300

400

500

600

700

800900

06/Mar 07/Mar 08/Mar 09/Mar 10/Mar 11/Mar

98.77

165.11

261.07

391.76

584.32

811.59

Millions

The Wireless

Subscriber base

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06/Mar 07/Mar 08/Mar 09/Mar 10/Mar 11/Mar

55.32

45.9

37.91

35.8 35.62 33.21

Millions

Millions

The Wire line

Subscriber base

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Mobile service penetration is

current 51% which is expected togrow to grow at 72% in 2016.

Structural change in composition oftelecom sector.Fastest growing telecom markets inworldImplementation of MNP

Lower tariff levels4/13/2013 19


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Indian MVAS estimated to grow atUS$10.8 billion by 2015.India is second largest handset marketContributes to 2% of Indian GDP

Emergence of BPO and KPOThird largest sector to attract FDI inIndia

NLD charges dropped by more than60%

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Current scenario

world's most competitive and one of the fastest growing

telecom markets.

grown over 20 times in j10 years, from 37 million subscribersin the year 2001 to over 846 in 2011.

India has the world's second-largest mobile phone user base

with over 929.37 million users as of May 2012.

It has the world's third-largest Internet user-base with over 137

million as of June 2012.

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National Telecom Policy 2012

For bringing back the transparency and to encouragedevelopment in the scammed telecom sector, centralcabinet has approved National Telecom Policy 2012.

The policy aims at providing affordable, cost effective andhigh quality telecom service at all India basis.

Accelerate socio-economic development by havingtransformation and impact on the overall economy.

It aims at providing a stable policy regime for a period of 10

years.4/13/2013 22


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Salient features of NTP 2012 Increase rural tele-density from 39 at present to 70 by 2017

and 100 by 2020.

To make India a global hub by active participation in

Domestic Manufacturing.

Its theme is "Broadband for All" at speed of 2 Mbps.

Free roaming and one nation, i.e. Mobile number

portability

Applicability of VoIP - Voice over Internet Protocol (IPV6)Internet Protocol Version 6.

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Components of policy Broadband Rural Telephony and Universal Service

Obligation Fund

R&D, Manufacturing and Standardization ofTelecommunication Equipment

Licensing, Convergence and Value Added Services

Spectrum Management

Quality of Service and Protection of ConsumerInterest

Security

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Effect of NTP 2012 National Telecom Policy allow benefits for mobile

subscribers, in short period of time mobile operatorsmay experience negative effect through nationwide

Mobile Number Portability(MNP). Abolish of roamingcharges will lead mobile service providers to lose itsincome through roaming charge sat initial stages of itsimplementation. Well in long run all of those losses

will be covered through increase in number ofsubscribers.

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opportunities and challenges For accelerating the growth of teledensity in the country.

For creation of telecom infrastructure in rural and remoteareas by utilization of the USO Fund.

For laying of Optical Fibre Cable (OFC) to uncovered areasand effective utilization of the existing resources to provideconnectivity.

For huge Broadband potential in the country.

For R&D, product development and indigenous telecommanufacturing

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Non availability of adequate spectrum for telecomservices

Underperformance of PSUs resulting in industrialunrest and erosion of value of government .

Dependence on foreign telecom equipment suppliers.

Cyber threats on ICT networks, leading to securityconcerns.

Obsolesce of existing network elements due to fastchanging telecom technologies.

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telecom reforms

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