was still around 20.5% as compared to the world average of 50%, which was amongst the lowest inthe world and was a clear indicator of the huge potential for further growth
.The two technologies used for mobile services in India are Global System for Mobiles (GSM) andCode Division Multiple Access (CDMA)
. GSM and CDMA technologies were not currentlycompatible or interchangeable with each other and required separate types of wireless phones andnetwork infrastructure. In 2008, all the major players in the industry were aggressively investing ininfrastructure, primarily in network upgradation and rollout.
The Indian mobile telephony market was highly competitive and the top five players Bharti, RelianceCommunications, Vodafone, BSNL-MTNL and Tata Tele controlled 83% market share. The other players such as Idea cellular (11 circles), Aircel (9 circles) Spice telecom (2 circles) had lined up plansto expand their presence and become a pan India operator to get a sizeable share of the growingmarket. The growth in both the GSM and the CDMA segments was phenomenal and the total number of GSM subscribers had reached 121.43 million by March 2007. Bharti Airtel was holding a 30.6%share of this market with 37.1 million customers at the end of March 2007, followed by BharatSanchar Nigam Ltd (BSNL) with 27.4 million (22.6% market share). Vodafone’s Hutch-Essar had26.4 million subscribers (21.8%), while Idea had 14 million customers (11.5%). Exhibits 1a, 1a & 1dgives industry statistics.
, the flagship company of the Anil Dhirubhai Ambani Group (ADAG) of companies, was the second largest wireless telecom operator in the Indian telecom industry with presence in both CDMA and GSM segments and also the largest provider of long distance carrier services. It was the leading player in the CDMA market and had a subscriber base of 34.8mn and amarket share of 17.7% with a pan India CDMA and 8 circles GSM presence. The company ownedand operated FLAG telecom, which owned 76,500 km of submarine cable system, the largestsubmarine cable system in the world. There was a stiff competition between RelianceCommunications and Bharti Airtel for market leadership and in March 2006, Bharti Airtel waslagging behind Reliance Communications in terms of market share. But post FY06, Bharti had notonly gained a leadership position in the Indian mobile industry, but also consistently increased itsmarket share, consequently widening the gap between itself and Reliance Communications.
Bharat Sanchar Nigam Ltd.
was the second largest GSM operator in the country. It was formed outof the former DoT in October 2000 as a public sector unit. It was the World's 7th largestTelecommunications Company providing comprehensive range of telecom services in Indiacomprising Wireline, CDMA mobile, GSM Mobile, Internet, Broadband, Carrier service, MPLS-VPN, VSAT, VoIP services, IN Services etc. MTNL holds the license to provide cellular services inDelhi and Mumbai, and commenced its cellular services during February 2001.
Vodafone Group Plc
was the world's leading mobile telecommunications company, with a significant presence in Europe, the Middle East, Africa, Asia Pacific and the United States through theCompany's subsidiary undertakings, joint ventures, associated undertakings and investments. It waskeen on entering the Indian mobile telephony market and ventured into it through its acquisition of interest in Bharti Airtel. Later, it acquired Hutch, one of the top players in the Indian GSM segment to
http://www.cellular-news.com/story/28809.php; and http://investing.reuters.co.uk/news/articleinvesting.aspx?type=media&storyID=nL29172095&pageNumber=1&imageid=&cap=&sz=13&WTModLoc=InvArt-C1-ArticlePage1 accessed on 7 Feb, 2008.
GSM works by dividing a single radio frequency into multiple time slots so it can support multiple calls.CDMA technology works by encoding individual conversations into a series of digits and then spreading thetransmission of the sequence over available spectrum.