PROJECT ON TELECOM SECTOR

OF INDIA



 VISHWA VISHWANI INSTITUTE OF SYSTEMS &
MANAGEMENT



GROUP MEMBERS ARE-

Basanta Kumar Padhan

Satyajit Paul

Shailendra Shrivastava

Mukesh Kumar Bhatta
 INTRODUCTION OF
TELECOM INDUSTRY
 History -India’s telecom renaissance has
been remarkable. After 44 years of
government monopoly, market
liberalization introduced in 1991 has led
to a 7-fold increase in the number of
phones in just 12 years.
 The mobile market recently topped 31
million customers.
 India is one of the fastest growing telecom
markets with an average annual growth
of about 22% for basic telephony and
over 100% for cellular and Internet
services.

 History of
telecommunication
 India requires investments of at least $37 billion by 2005
and $69 billion by 2010.
 Year-1851 First operational land lines were laid by the
government near Calcutta (seat of British power)
  Year-1881 Telephone service introduced in India
 Year -1923 Formation of Indian Radio Telegraph Company
(IRT)
  Year -1947 Nationalization of all foreign
telecommunication companies to form the Posts,
Telephone and Telegraph (PTT), a monopoly run by the
government's Ministry of Communications
 Year -1997 Telecom Regulatory Authority of India created
 Year -1999 Cellular Services are launched in India. New
National Telecom Policy is adopted.
  Year -2000 Do not becomes a corporation, BSNL

 Major Players

 There are three types of players in telecom

services:
 • -State owned companies (BSNL and
MTNL)
 • -Private Indian owned companies
(Reliance Infocomm, Tata Teleservices,)
 • -Foreign invested companies (Hutchison-
Essar, Bharti Tele-Ventures,
 Escotel, Idea Cellular, BPL Mobile, Spice
Communications)

 Introduction of major players
 BSNL
 BHARTI
 MTNL
 RELIANCE INFOCOMM
 TATA TELESERVICES
 VSNL
 HUTCH
 IDEA

  
MARKET SHARE OF PLAYER IN TELECOM SERVICE
Company Million Subs % share
(Nov 2003)
BSNL 40.3 58.8

Reliance 6.1 8.9

Bharti 5.7 8.3

MTNL 4.9 7.2

Hutchison 2.9 4.2

Idea Cellular 2.1 3.0

BPL 1.4 2.1

Tata Teleservices 1.3 1.9

Spice 1.0 1.4

Escotel 0.8 1.1

Fascel 0.8 1.1

Aircel 0.9 1.4

Hexacom 0.2 0.3

 Regulatory Control
 Entry of private service providers in 1992
brought the need for independent
regulation.
 Telecom Regulatory Authority of
India(TRAI) was established from
20February 1997 to regulate telecom
services & tariffs fixation.
 Telecommunications Dispute Settlement
and Appellate Tribunal(TDSAT) was
established from 24January 2000 to
settle disputes between a licensor and a
licensee, service providers, service
provider and a consumer.
 Recent Policy Changes
 Restructuring the sector.
 Increased the investment.
 Technology development and transfer
 Service provision.
 Major Market Trends
v Telecom trends in India have a great
impact on the
PC,internet,broadband,Cable,handset
features.
v An average of 4million subscribers added
every month for the past 6 months.
v The wireless subscriber base has increased
75percent from 2002 to 2007.
v 18 percent of mobile users are willing to
change their handsets every year.
 Mergers
 Demand for new spectrum as the industry
grows and the fact the spectrum
allocation is done on the basis of
number of subscribers will force
companies to merge so as to claim large
no . Of subscribers to gain more
spectrum as a precursor to the launch of
larger and expanded services.
 EQUIPMENT MARKET
CATOGAR 2006-07 2006-07 2005-06 2005-06
Y RUPEES DOLLARS RUPEES DOLLAR

CAREER 150.1 3.3 148.1 3.3

EQUPMEN
T
ENTERPRIS47.3 1.0 43.0 1.0
E
EQUIPMEN
T
OTHER 84.9 2.0 66.0 1.5

TOTAL 282.3 6.3 257.1 5.8

 EQUIPMENT OF TELECOM INDUSTRIES IN INDIA
EQUIPMENT BUYERS MARKET SIZE ESTABLISHED
SUPPLIER
CDMA Reliance,Tata,B Rs- 5.59 billion Samgsung,LG,N
Handsets SNL okio
Kyocera
GSM Handsets esssar,Bharati,Ideacellular,Spice Rs-17.95billon Nokia,
BSNL,MTNL, Hutchison-

AIRCEL
Motorola,
Panasonic,
Switching MTNL,BSNL, RS-40.37billlionLucent Siemens
equipment Reliance technology
infocom Alcatel,Ericsson
Transmission ati AIRTEL,POWERGRID, RS-7.83 billion Motorala,ITI,HF
BSNL,Reliance,VSNL,Bhar

equipment Rail tail CL

Siemens,
UTStarcom
Enterprises Reliance RS-40.37billion Cisco
Telecom BT,Ericsson,No Rs-55.70 billion TCS
software rtel, wipro,Infosys
Siemens,Telestr Hughes
 TOP 10 INDIAN TELECOM PROVIDER IN INDIA
RANK(06 SERVICE REVENU IN GROTH CATOGA
-07) PROVIDE E CRORE(R IN RY
R S) (%)
1 BSNL 40177 40135 -0.1
FIXED,CELLULAR,ISP,NL
D

2 BHARATI 11291 17888 58.4 FIXED,CELLULAR,IS

P,NLD,ILD

AIRTEL
3 RELIANC 10766 14468 34.4 FIXED,CELLULAR,
ISP,NLD,ILD
E
4 HUTCH 6837 10565 54.4 CELLULAR,NLD
ILD

5 VSNL 4797 8857 84.6 NLD,ILD,ISP

6 TTSL 2575 5178 101.1 FIXED,CELLULAR

7 MTNL 5561 4923 -11.5 FIXED,CELLULAR,

ISP,NLD

8 IDEA 2990 4431 47.6 CELLULAR,NLD

9 AIRCEL 977 1570 52.2 CELLULAR,NLD,

ILD

10 TTML 1097 1422 29.6 FIXED,CELLULAR

 Telecom Market in India : 2002-07

171.21
180

160

140 Mobile Phones

120
98.78
100
Million Units

66.5
80
52.2
60 41.9
33.6
40
13 15.4
20

0
2002-03 2003-04 2004-05 2005-06 2006-07
Annual Mobile Sales Mobile Subsciber Base

•Annual subscriber base growth 44%; 2007-08: subscriber expected to cross 250 mn
•2006-07: Base Stations installed: 100,000; Annual growth: 55%
•2006-07: Towers installed: 100,000; Annual growth: 60%

14
 Mobile Grow th and effective charge per minute
Fix ed
Mobile (Rs./min) Lowering of A DC
18.00 Mobile Subscriber base (Millions) 66.00
from 30% to 10%
of sector revenue
16.00 NTP '99 60.00
CPP
Telecom
introduced 54.00
14.00 Tariff Order

Mobile subscriber base (in Million)

Effective charge (in Rs. per min.)

48.00
12.00 3rd & 4th W LL
cellular introduce 42.00
operator d
10.00 36.00

8.00 30.00

24.00
6.00
18.00
4.00
12.00
3.58
6.50
2.00 1.20 1.88 6.00
0.88

0.00 0.00
Mar-98 Mar-99 Mar-00 Mar-01 Mar-02 Mar-03 Mar-04 Mar-05 Sep-05

Dept. of Telecom 26 November 2006 15

Key Policy Initiatives/milestones
 New Economic Policy (1991)
› Opening up of Telecom service sector
(Mobile –metros)
 National Telecom Policy 1994
› Telecom, key for development
› Inadequacy of public resource to meet
demand
› Private sector to supplement Govt.
› Provide world class telecom service at
affordable cost
›

Dept. of Telecom 26 November 2006 16

 Key Policy initiatives
 (contd..)
Establishment of TRAI (1997)
 New Telecom Policy (NTP 99)
› Transition from fixed license fee to
revenue share
› Introduction of free competition
› Technology neutral licenses
› Tariff rebalancing
 Creation of BSNL (2000)
 Establishment of TDSAT (2000)


17
 Key Policy initiatives (contd..)
 Opening of National & International
long distance
 Launching of mobile service by
BSNL (2002)
 Establishment of USO Fund
 Broadband policy (2004)


Dept. of Telecom 26 November 2006 18

 KEY FACTOR OF TELECOM
GROTH IN INDIA
q Telecom industry is growing at a scorching
pace in the recent years.
q It is due to the following reasons
1. We have moved from an environment that
was monopolized. by state own company.
2. Intense competition among several player.
3. Wireless revolution is taking place in country.
4. Global economics is growing.
5. Another key role is implementation of
customer greater control over telecom
costs. (CPP REGIME)
 NEW STEPS FOR TELECOM
q 1. Foreign Direct Investment of up to 100 percent permitted for the
following:
 Manufacturing of telecom equipment
 Internet service (not providing international gateways)
 Infrastructure providers (Category I)
 E-mail service
 Voice mail service
 Call Centers and IT enabled services


q 2. Foreign Direct Investment of up to 74 percent permitted for the
following:
 Internet service (providing international gateways)
 Infrastructure providers (Category II)
 Radio paging services
 NEW STEPS FOR TELECOM
 


q 5. Automatic approval for technology fee up to US$ 2

million, royalty up to 5 percent for domestic sales and 8
percent for exports in telecom manufacturing (higher
amount through specific approvals)
  
q 6. Full reparability of dividend income and capital invested in the
telecom sector
  
q 7. Fiscal incentives and concessions for the telecom sector:
 Amortization of license fee
 Tax holiday
 Rebate on subscription to shares/debentures
 Scope for tax exemption on financing through venture capital
 Import duty rates reduced for various telecom equipment
  
 T K
H
PROJECT ON N "U"
TELECOM
A
BASANTA KUMAR
PADHAN
SAT YA JIT PAUL
SHAILENDRA
SHRIVASTAVA
RABI KUMAR
SADIJA
JYOTI RANJAN
JENA