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Telecom Dec09

Telecom Dec09

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Published by: hitz123 on Jan 11, 2010
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Market Survey
By: Dr T. VijayaragaVan
IndIa’s Telecom IndusTr an overvIew 
F  tgt kt it b  ggih pbi t, th Ii t kt it th ftt gig i th , bth i t f ftig  i. r f   thi i t.
ndia’s telecom sector has ex-perienced a massive upsurgein recent years, in all re-spects of industrial growth.From the days of a state mo-nopoly with very limited growth, ithas grown to the current level witha number of private players driving growth. This change was possiblewith the economic development thatfollowed the restructuring of theeconomy, which made it more opento private and foreign investment.De-licensing also added an impetusto the fast growth of this sector. Atpresent the country’s telecom in-dustry has achieved a growth rate of 14 per cent. Till 2000, though cellu-lar phone companies were present,fixed landlines were popular in mostparts of the country. With the gov-ernment of India setting up the Tel-ecom Regulatory Authority of India,the mobile sector opened up dramat-ically. This article attempts to givereaders an overview of the telecomindustry.
 an ovrviw 
The Indian telecom sector, likeany other industrial sector in thecountry, has gone through manyphases of growth and diversifica-tion. Starting from the telegraphic
Market Survey
and telephonic systems of the 19thcentury, communication now in-volves advanced technologies likeGSM, CDMA, WLL and the 3Gtechnology used in mobile phones.Both public and private players areinvesting continuously in this sec-tor, with the customer being thebeneficiary.The Indian telecom sector can bebroadly classified into fixed line te-lephony and mobile telephony. Themajor players of the telecom sectorare currently experiencing fiercecompetition in both the segments.Major players like BSNL, MTNLand VSNL in the fixed line sector,and Airtel, Hutch, Idea, Tata andReliance in the mobile segment,are coming up with new tariffsand discount schemes to gain thecompetitive advantage. The pub-lic and private players share thefixed line and the mobile segments,with the public sector control-ling more than 60 per cent of themarket.Both fixed line and mobile seg-ments serve the basic needs of local,long distance and international calls,with the provision of broadband serv-ices in the fixed line segment andGPRS in the mobile arena. Tradi-tional telephones have been replacedby the cordless and wireless instru-ments. Mobile phone providers havealso come up with GPRS-enabledmultimedia messaging, Internetsurfing, and mobile-commerce. Themuch-awaited 3G mobile technol-ogy is soon going to enter the Indiantelecom market. The GSM, CDMA and WLL service providers are allupgrading themselves to provide 3Gmobile services. Along with an improvement intelecom services, there is also an im-provement in manufacturing. In thebeginning, there were only Siemenshandsets in India, but now a wholeseries of new handsets, such as No-kia’s latest N-series, Sony Ericsson’s W-series, Motorola’s PDA phones,etc, are widely available. Touch-screen and advanced handsets aregaining popularity. Radio serviceshave also been incorporated into mo-bile handsets, along with other ap-plications like a large memory, mul-timedia applications, multimedia games, MP3 players, cameras, etc.The value added services providedby mobile service operators contrib-ute to more than 10 per cent of thetotal revenue.
Th mjor cllulrrvic providr
Table I lists the leading cellularservice providers and their subscrib-er base.Bharti Airtel has the largestcustomer base with a 31 per centmarket share, followed by Hutchand BSNL, with each holding a 22per cent market share. The 2007budget has brought further relief to the customers with a reductionin the tariffs, both local and long distance, and with the slashing of roaming charges. This is likely tolead to even more people going forcellular services and a higher usageof the value added services. How-ever, landline telephony is likelyto remain popular, too, in the fore-seeable future. MTNL, the largestlandline service provider, has re-cently taken some boldinitiatives to retain itsmarket share and, if possible, expand it.
scop of thtlcom indutry 
The telecom industryis growing at an unbeliev-able pace and the growthrate is expected to dou-ble with every passing  year. There are manynew developments in thetelecom sector, including the introduction of 3Gtechnology into the Indian market.From among India’s lead-ing private and public operators,some are entering foreign mar-kets as well. Bharti Telecom willbe launching its services for NRIsin the US with the Airtel CALL-HOME service.
Invtmnt nd growth
In 2005-06, the telecom indus-try witnessed a growth of 21 percent with a total turnover of Rs86,720 crores, and the total invest-ment rising to Rs 200,660 crores. Itis projected that the telecom indus-try will enjoy a 150 per cent growthin the next 4-6 years, though thisgrowth also requires a huge invest-ment in the sector. Bharti Airtel isplanning to invest about $8 billionby 2010.The liberalisation policy andsome socio-economic factors havecontributed to the immense growthin sales. The lifestyle of the peoplehas changed. With the lowering of tariffs the affordability of the mobilephones has increased. The financesector has also come up with loansfor handsets with no interest. Mobileservices providers are also expand-ing their coverage area by installing more and more tower antennas andother equipment.
Table I
Led Cellul Sevce Povdesd the Subscbe Bse
Service provider No. of CDMA No. of GSMsubscribers subscribers
Reliance 2.75 crores 38.76 lakhsTata 1.07 crores Airtel 3.37 croresMTNL 24.98 lakhsBSNL 2.44 croresHutch 2.44 croresIdea 1.3 croresSpice 25.56 lakhsBPL 10.62 lakhsAircel 48 lakhs

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