PRESENTATION ON TELECOM SECTOR

-Presented By Sanjeev Prasad Pankaj Gupta

PANKAJ GUPTA ICFAI NATIONAL COLLEGE AGRA

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STATUS OF TELECOM SECTOR

Historically telecom network in india was owned and managed by govt as it is considered as a strategic service.

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INDIAS POSITION IN TELECOM SECTOR

India is 4th largest market in asia after china, japan and south korea. Indian telecom network is 8th largest in the world and 2nd largest among emerging ecomomies. Contribution of telecom sector in terms of revenue is 2.1 % of GDP as compared to 2.8% in developed economies.

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REFORMS IN TELECOM SECTOR

Reforms in telecom sector began in 1980 with
telecom manufacturing being opened for private sector followed by national telecom policy(ntp) in 1994 and 1999.

In 1990 telecom revolution in many countries which resulted in better quality of service with lower tariff rates force Indian policy makers to open up telecom sector for private players

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POLICY REFORM- 3 PHASES

Phase-1
The decade of 1980's saw private sector being allowed in telecommunications equipment manufacturing.
Mahanagar telephone nigam limited (mtnl) and videsh sanchar nigam limited (vsnl) were formed. A telecom commission was set up to give focus to telecommunications policy formation.
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POLICY REFORM- 3 PHASES

Phase-2 in 1990s, telecommunications sector also benefited from the general opening up of the economy. NTP 1994 was the first attempt to give a comprehensive roadmap for the Indian telecommunications sector.
Availability of telephones on demand (targeted by 1997) Universal service covering all villages and one pco per 500 persons in urban areas at the earliest (targeted to be achieved by 1997) Telecom services at affordable and reasonable prices

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POLICY REFORM- 3 PHASES

Phase- 3-

NTP 1999 brought in the third generations of reforms in

the indian telecommunications sector. FDI increase from 49% to 74%. Internet telephony in 2002. Launch of cdma technology. 3-6 operator in each circle. Intra circle merger guidelines. Broadband policy 2004.

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CLASSIFICATION OF TELECOM SECTOR

1. Fixed line telephony

Current market size of rs.30164 crore with 43 million lines. BSNL and MTNL account for 90% revenue for basic services. Private sector avilable in 18 circles and collectively account for 10% of revenue. Private sector offer high end services like leased lines, isdn, videoconferencing as a result ARPU ( av. revenue per user is more for private players).
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CLASSIFICATION OF TELECOM SECTOR

2. Mobile telephony There are 25 private companies providing cellular services in 19 telecom circles and 4 metro cities, covering 1500 towns across the country. Presently, there are five private service operators in each area, and an state operator. Almost 80% of the cellular subscriber base belongs to the pre-paid segment. The dot has allowed cellular companies to buy rivals within the same operating circle provided their combined market share did not exceed 67 per cent. Previously, they were only allowed to buy companies outside their circle.
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CLASSIFICATION OF TELECOM SECTOR 3. Internet Internet has become very easily accessible with cyber cafes. There is no restriction on the number of internet companies and more than 185 companies are operational. Internet telephony has been allowed officially from 1 april 2002. The growing demand of corporates for applications such as electronic commerce, internet leased lines, ISDN, VPN etc is driving the growth of the internet services market.
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CLASSIFICATION OF TELECOM SECTOR 4. Telecom equipments Growth in the telecom equipment market resulted in increasing demand for telecom services. Key players like bsnl, bharti, reliance, batata, bpl and hutchison will drive equipment market growth. Transmission equipment, cable and terminal equipment are expected to drive the market in the years to come. Switching systems will remain a big market, with a size of around rs 50 billion.

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MARKET SHARE OF PRIVATE AND PUBLIC PLAYERS

The public players and the private players share the fixed line and the mobile segments. Currently the public players have more than 60% of the market share. Bharti airtel has the largest customer base with 31% market share, followed by hutch (vodafone) and bsnl with each holding 22% market share. The value added services provided by the mobile service operators contribute more than 10% of the total revenue.
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KEY INDIAN COMPANIES

BSNL - Incumbent service provider and World's 7th largest Telecommunications Company providing comprehensive range of telecom services in India Services include Wireline, CDMA mobile, GSM Mobile, Internet, Broadband, Carrier service, MPLS-VPN, VSAT, VoIP services, IN Services etc.

MTNL - State owned operator covering the cities of Mumbai an Delhi Provides both fixed and mobile services

Bharti Airtel - Integrated operator with presence in all segments Leads the mobile segment in the country

Reliance Communications - Largest player in India in the CDMA segment Plans a GSM network

Tata Teleservices - Integrated operator (with VSNL) with presence in all segments Provides CDMA services in 20 circles
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TELECOM SERVICE PROVIDERS AND EQUIPMENT MAJORS

Largest pure-play GSM service provider in India Has over 15 million subscribers

Has a 10% stake in Bharti telecom, an integrated service provider Represents the largest foreign investment in the telecom services
sector in India

Promotes and supports a range of telecommunications products and services in

India in association with licensed operators.

Has invested in Bharti Airtel and also Network i2i is a 50:50 Joint Venture
between Bharti and SingTel, connecting Chennai to Singapore

Nortel offers a suite of products and solutions across two broad categories
Carrier Networks (incorporating Wireless Networks, Wireline Networks and Optical Networks) and Enterprise Networks.

In India since 1991. Has an R&D centre in Bangalore

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MAJOR PLAYERS IN TELECOM SECTOR

SERVICE PROVIDER NO OF CDMA SUBSCRIBER NO OF GSM SUBSCRIBER

RELIANCE TATA

2.7CR 1.07CR

AIRTEL
MTNL BSNL VODAFONE IDEA SPICE BPL

3.37 CR
24.98 LAKH 2.44 CR 2.44 CR 1.3 CR 25.56 LAKH 10.62 LAKH

AIRCEL
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48 LAKH
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MARKET SHARE MAJOR PLAYERS IN TELECOM SECTOR

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INVESTMENT AND GROWTH

In 2005-2006, the telecom industry witnessed a growth of 21% with a total revenue of rs. 86,720 crores, and the total investment rising to rs. 2,00,660 crores. It is projected that the telecom industry will be enjoying over 150% growth in the next 4-6 years. The growth also requires a huge investment by the players in the sector. Bharti airtel is planning to invest about $8 billion by the year 2010.
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INVESTMENT AND GROWTH

Liberalization policy and some socio-economic factors are mainly responsible for the immense growth in the sales volumes. The lifestyle of the people has changed. They need to be connected to the other people all the time. With the lowering down of the tariffs the affordability of the mobile phones has increased. The finance sector has also come up with loans for handsets on 0% interest. Mobile services providers are also expanding their coverage area by installing more and more antennas and other equipments.

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INDIA CHINA COMPARISION

India China comparison
500
Million Subscribers

250

China India

0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

Year

Of the 160 million subscribers, more than 90 million subscribers added in the last two years More than 5 million subscribers added every month since Dec. 2005, translating into the highest growth rate in the world On a comparison of growth since introduction of mobile telephony, India surpasses China at the same stage of market evolution 1-19

In the 11th year India - 76 mn. China - 24 mn.

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IMPACT OF BUDGET 2007 ON TELECOM SECTOR

Budget 2007 has brought disappointment to the telecom sector. Mobile service providers have been asked to cut down their roaming rentals as well as their long distance and international call tariffs. Telecom regulatory authority of india (trai) is of the opinion that this will lead to increased use of roaming, which will ultimately lead to more revenue generation. With cheaper handsets and lesser tariffs, it is expected that by the year 2010 there will be over 500 million subscribers in the indian telecom market.

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CAREER PROSPECT IN TELECOM SECTOR

With the coming of more and more projects such as setting up of new service bases, expansion of coverage areas, network installations, maintenance, etc , the telecom industry is going for high scale recruitments. There is a huge demand for software engineers, mobile analysts, and hardware engineers for mobile handsets. There are ample opportunities for marketing people whose services are required to capture more and more customer base.

The emergence of advance technologies and the high growth rate of the industry hold a lot of promise to the jobseekers.
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PANKAJ GUPTA ICFAI NATIONAL COLLEGE AGRA

CAREER PROSPECT IN TELECOM SECTOR

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TECHNOLOGY USED IN TELECOM SECTOR

Gsm (global system for mobile communication)

The most popular standard for mobile phones in the world. Its promoter, the gsm association, estimates that 82% of the global mobile market uses this standard. Gsm is used by over 2 billion people across more than 212 countries Is considered a second generation (2g) mobile phone system.

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TECHNOLOGY USED IN TELECOM SECTOR

2.Cdma (code division multiple access ) One of the basic concepts in data communication is the idea of allowing several transmitters to send information simultaneously over a single communication channel. This allows several users to share a bandwidth of frequencies. This concept is called multiplexing. Cdma employs spread-spectrum technology and a special coding scheme (where each transmitter is assigned a code) to allow multiple users to be multiplexed over the same physical channel
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TECHNOLOGY USED IN TELECOM SECTOR 3. Wireless local loop (WLL)

A term for the use of a wireless communications link as the connection for delivering plain old telephone service (pots) and/or broadband internet to telecommunications customers

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TECHNOLOGY USED IN TELECOM SECTOR 3g technology

The technology intended for smartphones- multimedia cellphones IT PROVIDE 3mbps SPEED FOR DOWNLOADING WHICH IS VERY HIGH AS COMPARED TO THAT OF 2G TECHNOLOGY It provide intrenet surfing, downloading,audio video conferencing, fax service and many other broad band applications 3g technology was implemented in japan for the first time in the world Today the tech. Is serving 25 countries over more than 60 networks in asia, europe and u.S. Bsnl india will launch 3g tech from dec.2008 in india
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FUTURE PROSPECT OF TELECOM SECTOR

India poised to be a USD 40 bn - 45 bn telecom market by FY 2010 Telecom sector targets announced by Government of India

250 million subscribers by 2007 500 million subscribers by 2010 20 million broadband subscribers by 2010 Mobile access to all villages with population more than 5,000 by 2006 more than 1,000 by 2007
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Mobile access to all villages with population of

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THANK YOU

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