Indian Telecom

Indian
Telecommunication
Sector
Submitted by:
Jaideep Singh
Pankhuri Wadehra
Agenda
• Introduction
• Overview of telecom industry
• Players of telecom industry
• Scope of telecom industry
• Future trends in telecom industry
• Growth Avenues in telecom industry
Indian Telecom Sector 2

MOBILE A BASIC NEED FOR ALL!

INTRODUCTION
India's 21.59 million-line telephone network is the largest in Asia, 3rd largest among emerging economies
(after China and Republic of Korea) and the 12th largest in the world.
India's telecom network comprises of 27,753 telephone exchanges, with a total equipped capacity of 272.17
Lakh lines and 226.3 Lakh working telephones.
The Long Distance Transmission Network has nearly 1,70,000 route kilometers of terrestrial Microwave
Radio Relay & Co-axial cables and about 171,000 route kilometers of Optical Fiber Cables. Fully automatic
International Subscriber Dialing (ISD) service is available to almost all the countries.
The total number of stations connected to National Subscriber Dialing (NSD) is over 18,000 and this is
increasing fast. Yet the present tele-density is very low at about 2.2 per hundred persons, offering a vast
scope for growth.
In the field of International communications, tremendous progress was made by the use of Satellite
Communication and submarine links.
It is therefore not surprising that India has one of the fastest growing telecommunication systems in the
world with system size (total connections) growing at an average of more than 20 percent over the last 4
years.
Services Offered
• Telephone Services
• NSD/ISD Services
• Computerized Trunk Services
• Pay Phones
• National & International Leased Lines Circuits
• Telex
• Telegraph Services (Manual & Automatic)
• X-25 based Packet Switched Data Network (INET)
• Gateway Packet Switched Data Services (GPSS)
• Gateway Electronic Data Interchange Service (GEDIS)
• Gateway E-Mail and Store & Forward FAX Service (GEMS-400)
• Concert Packet Service (CPS)
• Satellite-based Remote Area Business Message Network
• Electronic Mail

• Voice Mail
• Audio-Text
• Radio Paging
• Cellular Mobile Telephone
• Public Mobile Radio Trunked Service
• Video-Tex
• Video Conferencing
• V-SAT
• Internet
• ISDN
• INMARSAT Mobile Service
• INMARSAT Data Service
• Home Country Direct Service
• Intelligent Network (IN) Services

MAJOR PLAYERS IN DIFFERENT SEGMENTS OF INDIAN
TELECOM INDUSTRY
BASIC SERVICES OPERATORS
MOBILE SERVICES GSM SERVICES
BSNL OPERATORS
Airtel
MTNL
Vodafone
Reliance
Idea
TTSL
Reliance
BSNL
INTERNET SERVICES
OPERATORS
BSNL
CDMA Services Operators
MTNL Reliance
Reliance
TTSL
TTSL
BSNL
Airtel

Indian telecom industry –a snapshot
• India has one of the biggest telecom markets in the world.
• It has more GSM subscribers than fixed-line subscribers.
• Total telecom subscribers –494.07 million (August 2009)
• Teledensity –42.27 per cent (August 2009)
• Addition of mobile subscribers (July–August 2009) –15.08 million

• Annual growth rate of telecom subscribers (June 2008–June 2009) –42.68 per cent
• Average Revenue Per User (ARPU) for GSM (as on 30 June 2009) –US$ 3.801
• Telecom equipment market (2008–09) –US$ 24.99 billion
• Handset market (2008-09) –US$ 5.82 billion
• Expected mobile subscriber base (2013) –About 771 million

Telephony services (mobile and basic) and
internet services dominate the Indian telecom
services market.
• The Indian telecom industry generated
revenues of approximately US$ 32 billion
in 2007–081 with a growth rate of 60 per cent
over 2006–07.
• It witnessed a compound annual growth rate

(CAGR) of approximately 29 per cent from
2002–03 to 2007–08.
• The CAGR is expected to stabilise

at 16 per cent between 2007–08 and 2009–10.
Sources: 1) Average exchange rate for the year 2007–08;

2)TRAI Report

Telephony services (mobile and basic) and
internet services dominate the Indian
telecom services market.
•The Indian telecom industry can be primarily divided into basic, cellular mobile and
internet services. It also has smaller segments such as radio paging services, Very Small
Aperture Terminals (VSATs), Public Mobile Radio Trunked Services (PMRTS) and Global
Mobile Personal Communications by Satellite (GMPCS).
•The mobile services in India are growing more than basic wireline services.

The wireless segment in India is much larger than the wireline
segment and is growing steadily owing to convenience and
utility.
Basic Services
•Basic services encompass fixed wireline
and wireless in local loop (WLL-fixed) services.
•Wireless services hold a major market share

of 92
per cent in basic services as compared
to the
wireline.

Government-owned players account for the highest
growth in subscriber base in the basic telephony
services segment.
• Government-owned Bharat Sanchar Nigam Ltd
(BSNL) and MahanagarTelephone Nigam Ltd
(MTNL) are the two largest operators in the wire
line segment, whereas Bharti AirtelLtd is the
leader in wireless segment.
•MTNL is present in Delhi and Mumbai,

whereas BSNL covers the rest of the country.
•Though private players such as Bharti Airteland

Reliance have registered notable growth, BSNL
still dominates the segment in terms of
wirelinesubscriber base despite the nominal
decrease in its market share.
Source: TRAI report

Reduction in tariffs have led to a constant reduction in the
Average Revenue Per User (ARPU). The gradual decline in
ARPU remains well supported by the increase in subscriber base.
• The ARPU for GSM service in India is much higher than that for CDMA service. The
ARPU per month for GSM services has declined from US$ 6.64 for the quarter ending
(QE) March 2008 to US$ 4.10 for the QE March 2009, while that for CDMA services
has fallen from US$ 3.99 to US$ 1.98 during the same period.(1,2)
Sources:1) TRAI Report; 2)Exchange rate as applicable on an average basis for respective quarters

Reduction in tariffs have led to a constant reduction in
the Average Revenue Per User (ARPU). The gradual
decline in ARPU remains well supported by the
increase in subscriber base.
• The Minutes of Usage (MoU) for GSM have been significantly higher than those for
CDMA. The MoUsfor CDMA service have declined from 364 in March 2008 to 357 in
March 2009, whereas those for GSM have decreased from 493 to 484 during the
same period.
Sources:1) TRAI Report; 2)Exchange rate as applicable on an average basis for respective quarters

The telecom subscriber base in India is likely to reach 500
million by 2010.
•The subscriber base grew to 494.07 million

(August 2009), registering a growth of
approximately 42.67 per cent over last year. It
grew at a CAGR of 45.21 per cent from June 2004
to June 2009.
•Teledensity in India is still low as compared to

that in some countries. As on August 2009, India
had a teledensity of 42.27 per cent as compared
to the previous year’s figure of 29.83 per cent.

Source: TRAI Report
Private players have maximum subscribers in the
wireless services segment
• Wireless services have led to

significant growth in the Indian telecom industry.
• Currently, there are 11 players—
Bharti Airtel, Reliance, Vodafone, BSNL,
Tata Tele Services Ltd, Idea, Aircel,
MTNL,BPL, HFCL and Shyam—active in this segment.
• As compared with 2007–08, the subscriber base
of most wireless service providers has increased
leading to an increase in their revenues.

Private players have maximum subscribers
in the wireless services segment
The subscriber base of Bharti Airtel, a leader in this market, increased
from 69.38 million in 2007–08 to 102.37 million
in 2008–09, followed by
Reliance (79.62 million subscribers)
and Vodafone (76.45 million subscribers).
GSM preferred to CDMA segment by a large margin in terms of subscriber numbers.

GSM preferred to CDMA in number of additions
to subscriber base
• Bharti has the largest market share in the GSM segment. During 2008–09, out of the
total subscriber base of 328.83 million, private players accounted for approximately
84 per cent, while the public sector operators (BSNL and MTNL) accounted for the
remaining share (16 per cent).
• Reliance Communications dominates the Indian CDMA mobile services segment with
a subscriber base of 54.19 million

Various other services emerged by leveraging
the telecom services industry...(1/2)
• Radio Paging Services
Radio paging services were launched in India in 1995. This service, however, could not
compete well with cellular services in general and SMS technology in particular and is
shrinking continuously. At present, all but four radio paging service providers have been
marginalized in the Indian market.
• Very Small Aperture Terminals (VSATs)

At present, there are 8 VSAT service providers in India including BSNL,
Bharti Airtel, Hughes Communication and HCL Comnet Ltd. The number of subscribers of
VSAT services increased on a quarterly basis by 6,108 to 108,328 in June 2009. The market
for VSAT services registered a 5.98 per cent growth for the quarter ending June 2009. Hughes
Communication is the market leader, with a market share of 29.4 per cent, followed by Bharti
Airtel with 25.9 per cent.

Various other services emerged by leveraging
the telecom services industry...(2/2)
• Public Mobile Radio Trunked Services (PMRTS)
PMRTS services have been showing a negative growth. PMRTS’ subscriber base decreased
by 2.06 per cent during the quarter ending June 2009.1High license fee for this service leaves
low margin for services providers, thereby inhibiting its growth. In India, 12 operators are
offering this service to a total of more than 30,951 subscribers.
• Global Mobile Personal Communication by Satellite (GMPCS)

GMPCS2 services were launched in India in 1999. These services allow a subscriber to
communicate with others from any point on earth through a hand-held terminal. Moreover, the
telephone number remains unchanged, irrespective of the subscriber’s location. Iridium India
Telecom Limited is the pioneer in GMPCS services in India. The Government of India has
restricted foreign equity participation in this segment to 74 per cent.
Sources: 1)TRAI Report; 2)DOTTELECOM

Despite a slow penetration rate, the Internet services segment
embodies huge growth potential in India.
• The total number of internet subscribers

grew from 11.66 million in June 2008 to 14.05 million
in June 2009. This is primarily attributed to an increase
In broadband subscriber base from 4.38 million
in June 2008 to 6.62 million at the end of June 2009.
• BSNL is the biggest player in this market with

7.6 million subscribers, followed by MTNL,
Bharti Airtel, Reliance and Sify Technologies.
• Internet services can also be accessed through

phones (CDMA and GSM). Bharti Airtel
is the leader among the wireless internet operators
with a market share of approximately 24 per cent in June 2008.
Source: TRAI Report

India presents a host of opportunities for
telecom companies…(1/9)
3G Services
• The Indian government plans to auction the spectrum for 3G services by inviting bids from domestic
as well as foreign players. The 3G spectrum is among the major investment opportunities and is
expected to attract investments worth US$ 8–10 billion during 2008–11.
• International and foreign players can enter this segment through joint-ventures with Indian companies
with a stake of not more than 74 per cent. They will also have to pay an additional entry fee of US$
344 million to acquire Unified Services Access Licence (USAL).4Companies such as AT&T and
NTT DoCoMoare planning to enter this sector.
• The Telecom Ministry would auction four licences for 3G services including one reserved licence for
US$ 4.09 billion.
• BSNL launched 3G services under the proposed 'India-Golden 50' scheme that allows customers to
make long-distance calls for 50 paise(About US 1cent) per minute. The subscribers also get additional
features such as video telephony, Internet access, video on demand, mobile TV and others facilities
Sources: 1) TRAI Report; 2)International Business Times; 3) Indiapwire4) Business Standard 5) e-Eighteen.com Ltd

India presents a host of opportunities for telecom
companies…(2/9)
Sources: 1) TRAI Report; 2)International Business Times; 3) Indiapwire4) Business Standard 5) e-Eighteen.com Ltd.

Worldwide Interoperability for Microwave Access (WiMax)
• WiMax has been one of the most significant developments in wireless communication in the recent
past. Since this mode of communication provides network access in inaccessible terrains at a speed of
more than 4Mbps, it is expected to be a major factor in driving telecom services in India, especially
the wireless services. Thus, it Will lead to the increased use of telecomservices, internet, value added
services and enterprise services.
• ICOMMTeleandBeceemCommunicationsjointlyannouncedthecommercialavailabilityofWiMAXmod
emsfortheIndianmarket.
• TheTelecomMinistryisalsoplanningtoauctionthreeWiMaxslotsforUS$1.07billionwithanapproximatea
uctioncostofUS$358millioneach.
Source: TRAI; Indiapwire; Indiapwire; e-Eighteen.com Ltd

Managed Service
• Managed service is another segment that is attracting telecom companies. On account of the rapidly
growing subscriberbase, service providers find it difficult to manage their infrastructure and network.
In such cases, they completely or partially outsource their infrastructure or network management
operations.
• Bharti Airtel and Nortel entered into an enhanced managed-services agreement in November2008 that
allows Nortel to continue providing contact centre technology(CCT) solutions.
• In turn, Bharti Airtel is able to leverage Nortel’s solution to provide its customers with interactive
voice and video response capabilities
Source: TRAI; Indiapwire; Indiapwire; e-Eighteen.com LtdGROWTH

companies…(5/9)
Infrastructure Sharing
In order to curtail their network deployment costs, many service providers are
considering infrastructure sharing. It is a major step towards India’s ambitious target
of 500 million subscribers by 2010. Infrastructure sharing promises several advantages.
Some of which are:
• Significant reduction in initial set up costs
• Increased environmental aesthetics
• Lower operating costs for service providers
• Improved service quality
• Increased affordability for customers
• Faster roll out of services in rural and remote areas
New Guidelines for Infrastructure Sharing in Mobile Telephony

• TRAI has recommended all mobile service providers in India to share infrastructure so as to meet the requirements of the
flourishing telecom industry.
• Its proposal to Department of Telecommunications (DoT) states that the mobile telephony service providers should have
better cooperation among them and have least regulatory interventions.
• The service providers can share active infrastructure if they have entered into a mutual agreement.
• The sharing of infrastructure includes sharing of antenna, feeder cable, nodes, radio access networkand transmission system
only.

Virtual Private Network Virtual Private Network is a private data network that provides
connectivity within closed user groups(CUG) via public telecommunication infrastructure.It is
similar to leasing/owning lines and yet getting exclusive access.
Enterprise Telecom Services

Telecom service providers are increasingly targeting enterprises by providing them dedicated
services. Some of the key services include VoIP, dedicated telecom communication systems; IT
infrastructure-enabled unified communication services, etc. This segment is expected to witness
major developments as the demand for enhanced telecom infrastructure is increasing along with
the growth in the information and communication technology (ICT) industry .
Source: TRAi

Value-Added Services
The VAS industry in India generated revenue of US$ 1.2 billion
in 2007–08 and is expected to reach US$ 4.0 billion by 2015.
Major growth drivers for VAS in India

• Increasing focus on localisation Value-Added Services in India (2007–08)
and availability of content in local languages
• Development of M-commerce applications, such as

booking tickets and making bill payments
• Availability of mobile TV and development

of shows, films, images, news, etc.,
• Availability of complete subscriber data has helped

in reaching niche audience leading to a growth in
advertising revenue through M-marketing
• Development of video-based applications, such as video SMS and podcasts
Sources: 1)India PRwire; 2) Exchange rate as on 20 November 2008; 3) Indiapwire

telecom companies…(7a/9)
Definition as per TRAI
In the Unified Access Service License (UASL), VAS is defined as follows‐
“Value Added Services are enhanced services which add value to the basic teleservices
and
bearer services for which separate licence are issued”
The Government of India issues licenses for the following Value Added Services:‐
1. Public mobile trunking service
2. Voice mail service
3. Closed users group domestic 64 kbps data network via INSAT satellites system
4. Videotex service
5. GMPCS
6. Internet
7. Audiotex
8. Unified messaging service

telecom companies…(7b/9)

telecom companies…(7c/9)

telecom companies…(7d/9)

telecom companies…(7e/9)

companies…(8/9)
Current Initiatives
• Mumbai-based Mobile Value Added Service company called Planet41
Mobi-Venture Ltd is planning an initial public offer in the coming months.
• The telecom companies can leverage VAS services to increase ARPU
through content rather than voice services .
Sources: 1)India PRwire; 2) Exchange rate as on 20 November 2008; 3) Indiapwire

companies…(9/9)
Rural Telephony
• Under the Bharat Nirman Programme, the government will invest US$ 2 billion,
from 2008 to 2009, to set up about 100,000 community service centres in rural areas
to provide broadband connectivity.
• With the teledensity in rural areas at less than

10 per cent against the national teledensity of
approximately 28 per cent in 2008, there seems
to be huge untapped potential for mobile phone
penetration in rural India.
• In March 2009, TRAI released

recommendations for accelerating growth
of telephony in the rural areas.
• The suggested measures focus on the
• Universal Service Obligation Fund (USOF) to empower effective investments in less-lucrative rural areas.
Sources: 1) TRAI Report ; 2) ZDNet Asia Report; 3) TRAI

References:
www.google.com
www.ibef.org
www.trai.com
www.wikipedia.org
www.mapsofindia.com
www.dot.gov.in

THANKS………

Indian Telecom

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Indian

Indian Telecom Sector 2

Indian Telecom Sector 3

Indian Telecom Sector 5

Indian Telecom Sector 6

Indian Telecom Sector 7

• Teledensity –42.27 per cent (August 2009)

• Addition of mobile subscribers (July–August 2009) –15.08 million

• Telecom equipment market (2008–09) –US$ 24.99 billion

• Handset market (2008-09) –US$ 5.82 billion

• Expected mobile subscriber base (2013) –About 771 million

Indian Telecom Sector 8

• It witnessed a compound annual growth rate

• The CAGR is expected to stabilise

Sources: 1) Average exchange rate for the year 2007–08;

Indian Telecom Sector 9

Indian Telecom Sector 10

and wireless in local loop (WLL-fixed) services.

•Wireless services hold a major market share

Indian Telecom Sector 11

•MTNL is present in Delhi and Mumbai,

•Though private players such as Bharti Airteland

Indian Telecom Sector 12

Indian Telecom Sector 13

Indian Telecom Sector 14

•The subscriber base grew to 494.07 million

•Teledensity in India is still low as compared to

Indian Telecom Sector 15

• Wireless services have led to

Indian Telecom Sector 16

GSM preferred to CDMA segment by a large margin in terms of subscriber numbers.

Indian Telecom Sector 17

Indian Telecom Sector 18

• Very Small Aperture Terminals (VSATs)

Indian Telecom Sector 19

• Global Mobile Personal Communication by Satellite (GMPCS)

Sources: 1)TRAI Report; 2)DOTTELECOM

Indian Telecom Sector 20

• The total number of internet subscribers

• BSNL is the biggest player in this market with

• Internet services can also be accessed through

Source: TRAI Report

Indian Telecom Sector 21

Indian Telecom Sector 23

Indian Telecom Sector 24

Source: TRAI; Indiapwire; Indiapwire; e-Eighteen.com Ltd

Indian Telecom Sector 25

Source: TRAI; Indiapwire; Indiapwire; e-Eighteen.com LtdGROWTH

Indian Telecom Sector 26

New Guidelines for Infrastructure Sharing in Mobile Telephony

Indian Telecom Sector 27

Enterprise Telecom Services

the growth in the information and communication technology (ICT) industry .

Indian Telecom Sector 28

Major growth drivers for VAS in India

• Development of M-commerce applications, such as

• Availability of mobile TV and development

• Availability of complete subscriber data has helped

• Development of video-based applications, such as video SMS and podcasts

Sources: 1)India PRwire; 2) Exchange rate as on 20 November 2008; 3) Indiapwire

Indian Telecom Sector 29

Indian Telecom Sector 30

Indian Telecom Sector 31