MARKETING MANAGEMENT ASSIGNMENT

INDIAN TELECOM INDUSTRY

By,
Ganesh. A
Roll No. 215110063
MBA Ist year
 CONTENTS
Indian Telecom Industry
History
Telecom Regulatory Authority of India
Mobile Phone Handset Manufacturers
• Nokia
• Samsung
• LG
• Sony Ericsson
• Motorola
• Micromax
• Other Players
Revenue
Telecom Service
Teledensity
Wireless Subscriber Base
• GSM
• CDMA
Mobile Phone Service Providers in India
• BSNL
• Bharti Airtel
• MTNL
• Reliance Communications
• Tata Teleservices
• Vodafone Essar
• Idea Cellular
• Aircel
• MTS
 • Uninor
• Virgin Mobiles
• Videocon Mobile Services
• Loop Mobiles
Segmentation of Indian Telecom Consumer Market
TV Advertisement among Telecom Service Providers
Internet Service Provider
Spectrum Allocation
• 2G Allocation
• 3G Allocation
Major Recommendations made by TRAI during the year 2008-09
Research and Development
• Mobile Number Portability
SWOT Analysis of Indian Telecom Industry
Next Generation Networks

Indian Telecom Industry

The Indian telecommunications industry is the world's fastest growing telecommunications
industry, with 671.69 Million telephone (landlines and mobile) subscribers and 635.51
Million mobile phone connections as of June 2010. It is also the second largest
telecommunication network in the world in terms of number of wireless connections after
China. The Indian Mobile subscriber base has increased in size by a factor of more than one-
hundred since 2001 when the number of subscribers in the country was approximately 5
million to 635.51 Million in June 2010.
As the fastest growing telecommunications industry in the world, it is projected that India
will have 1.159 billion mobile subscribers by 2013. Furthermore, projections by several
leading global consultancies indicate that the total number of subscribers in India will exceed
the total subscriber count in the China by 2013. The industry is expected to reach a size of
Rs 344,921 crores (US$ 73.47 billion) by 2012 at a growth rate of over 26 per cent, and
generate employment opportunities for about 10 million people during the same period.
According to analysts, the sector would create direct employment for 2.8 million people and
for 7 million indirectly. In 2008-09 the overall telecom equipments revenue in India stood at
Rs 136,833 crores (US$ 29.15 billion) during the fiscal, as against Rs 115,382 crore
(US$ 24.58 billion) a year before.

Source: TRAI

History
The postal and telecom sectors had a slow and uneasy start in India. In 1850, the first
experimental electric telegraph Line was started between Kolkata and Diamond Harbour. In
1851, it was opened for the British East India Company. The Posts and Telegraphs
department occupied a small corner of the Public Works Department, at that time.
In 1880, two telephone companies namely The Oriental Telephone Company Ltd. and The
Anglo-Indian Telephone Company Ltd. approached the Government of India to establish
telephone exchanges in India. The permission was refused on the grounds that the
establishment of telephones was a Government monopoly and that the Government itself
would undertake the work. In 1881, the Government later reversed its earlier decision and a
licence was granted to the Oriental Telephone Company Limited of England for opening
telephone exchanges at Kolkata, Mumbai, Chennai (Madras) and Ahmedabad and the first
formal telephone service was established in the country. [15] 28 January 1882, is a Red Letter
Day in the history of telephone in India. On this day Major E. Baring, Member of the
Governor General of India's Council declared open the Telephone Exchange in Kolkata,
Chennai and Mumbai. The exchange at Kolkata named "Central Exchange" was opened at
third floor of the building at 7, Council House Street. The Central Telephone Exchange had
93 number of subscribers. Bombay also witnessed the opening of Telephone Exchange in
1882.
In 1975, the Department of Telecom (DoT) was separated from P&T. DoT was responsible
for telecom services in entire country until 1985 when Mahanagar Telephone Nigam Limited
(MTNL) was carved out of DoT to run the telecom services of Delhi and Mumbai. In 1990s
the telecom sector was opened up by the Government for private investment as a part of
Liberalisation-Privatization-Globalization policy. Therefore, it became necessary to separate
the Government's policy wing from its operations wing. The Government of India
corporatized the operations wing of DoT on 1 October 2000 and named it as Bharat Sanchar
Nigam Limited (BSNL). Many private operators, such as Reliance Communications, Tata
Indicom, Vodafone, Loop Mobile, Airtel, Idea etc., successfully entered the high potential
Indian telecom market.
Liberalization started in 1981 when Prime Minister Indira Gandhi signed contracts with
Alcatel CIT of France to merge with the state owned Telecom Company (ITI), in an effort to
set up 5,000,000 lines per year. But soon the policy was let down because of political
opposition. She invited Sam Pitroda a US based NRI to set up a Center for Development of
Telematics(C-DOT), however the plan failed due to political reasons. During this period,
after the assassination of Indira Gandhi, under the leadership of Rajiv Gandhi, many public
sector organizations were set up like the Department of Telecommunications (DoT) , VSNL
and MTNL. Many technological developments took place in this regime but still foreign
players were not allowed to participate in the telecommunications business.

Telecom Regulatory Authority of India

In 1995 the government set up TRAI (Telecom Regulatory Authority of India) which reduced
the interference of Government in deciding tariffs and policy making. The DoT opposed this.
The political powers changed in 1999 and the new government under the leadership of Atal
Bihari Vajpayee was more pro-reforms and introduced better liberalization policies. They
split DoT in two- one policy maker and the other service provider (DTS) which was later
renamed as BSNL. The proposal of raising the stake of foreign investors from 49% to 74%
was rejected by the opposite political party and leftist thinkers.
The Telecom Regulatory Authority of India (TRAI) has always endeavoured to encourage
greater competition in the telecom sector together with better quality and affordable prices in
order to meet the objectives of New Telecom Policy, 1999. TRAI’s mission is to create and
nurture conditions for the growth of telecommunications including broadcasting and cable
services in the country in a manner and at a pace which will enable India to play a leading
role in the emerging global information society.

The goals and objectives of TRAI are focused towards providing a regulatory regime that
facilitates achievement of the objectives of the New Telecom Policy (NTP) 1999. The goals
and objectives of TRAI are as follows:
• Increasing tele- density and access to telecommunications in the country at affordable
prices,
• Making available telecommunication services which in terms of range, price and
quality are comparable to the best in the world,
• Providing a fair and transparent policy environment which promotes a level playing
field and facilitates fair competition,
• Establishing an interconnection regime that allows fair, transparent, prompt and
equitable interconnection,
• Re-balancing tariffs so that the objectives of affordability and operator viability are
met in a consistent manner,
• Protecting the interest of consumers and addressing general consumer concerns
relating to availability, pricing and quality of service and other matters,
 • Monitoring the quality of service provided by the various operators,
• Providing a mechanism for funding of net cost areas/ public telephones so that
Universal Service Obligations are discharged by telecom operators for spread of
telecom facilities in remote and rural areas,
• Preparing the grounds for smooth transition to an era of convergence of services and
technologies,
• Promoting the growth of coverage of radio in India through commercial and non-
commercial channels,
• Increasing consumer choice in reception of TV channels and choosing the operator
who would provide television and other related services.

Mobile Phone Handset Manufacturers

As on June 2010, India ranks 2nd next to China with the total number of mobile phones being
used is 635,510,000 which covers 53.8% of Indian population. As per industry estimates, 108
million mobile phones were sold in the country in 2009-10, resulting in sales of Rs 27,000
crore as against Rs 25,910 crore during the previous year.
The mobile phone market in India has got a lot of players ranging from local players to
international players. The list of mobile phone handsets in India are as follows:
1. Airfone
2. Acer Phones
3. Ajanta Mobile
4. Airphone
5. Apple
6. Blackberry
7. Bleu
8. BPL
9. Byond tech
10. daya
11. Digibee Mobiles
12. etouch
13. Fly
14. Fortune
15. Gee Pee
16. gfone
17. G-Five
18. Haier
19. Hansum Mobiles
20. Hi-Tech
21. Intex
22. Ion
23. iNQ
24. Karbonn
25. Lava
26. Lemon
27. Lexus
28. LG
29. Logitec
30. Magicon
31. Maxx
32. Melbon
33. Micromax mobile
34. Motorola
35. Movil
36. Nokia
37. Olive
38. Onida
39. Orion Mobiles
40. Orpat
41. Pagaria
42. Philips
43. Philiray
44. Quantum
45. Rage
46. Ray
47. Sagem
48. Samsung
49. San Mobile
50. Sansui
51. Siemens
52. Simoco
53. Sony Ericsson
54. Spice Telecom
 55. Technotouch
56. T-Series
57. Usha-Lexus
58. Vodafone
59. Videocon
60. Voice
61. VOX
62. Winncom
63. Xcite
64. Zen Mobiles
Though there are lot of mobile phones are there but all does not hold a considerable
amount of market share and some international players dominate the market. The market
leader in India is Nokia, though local players have grabbed 17.5% market share (from
0.9%, a year back). There were only 5 local manufacturers in 2008 and the number stand
at 28 now.

Mobile Handset Market Share in India

Source: Voice & Data

Let’s see about some of the handset manufacturing companies.

NOKIA
Nokia has made remarkable transformation from an obscure Finnish conglomerate into the
world’s largest maker of mobile phones. It opened its manufacturing unit in Chennai on 2006
at a cost of around $150 million, from where it also exports.
Part of Nokia’s success is due to broad view it takes of its business, selling a wide range of to
consumers of all kinds all over the world. Its success is mainly attributed to distribution deals
they inked – of the estimated 79,000 retail outlets in India selling mobile phones, Nokia had a
presence in 72,000 of them.
The Brand Value of Nokia as on 2006 is $30.13 billion and stands 6th in the world. It has been
continuously ranked in Top 25 in “The World’s Fifty Most Innovative Companies”, as
reported by Business Week. They have crossed production of 350 million handsets in April
2010.
Nokia also keeps a brisk with the competition that is going on; in the FY’09 Nokia has
launched 32 new mobiles, ranging from Rs.1149 to Rs.25999. Out of these 32 models 8
models are Touch Screen and 18 models are 3G enabled.
Nokia losing market share is no big news, but it’s big news when the story is happening in
India or any other emerging market, where Nokia always had a strong hold. Nokia’s revenue
too fell from Rs.16567 crore to Rs.14100 crore and the company is now betting big on
services like messaging, life tools and digital music. Not just market share, Nokia is losing
mind share too and is desperately looking for 1100 magic (Nokia enters Dual SIM Phone
Market with C2).

SAMSUNG
Korean consumer electronics giant Samsung has made a remarkable transformation, from a
provider of value-priced commodity products that original equipment manufacturers (OMEs)
sold under their own brands, to a global marketer of premium-priced Samsung-branded
consumer electronics such as flat-screen TV’s, digital cameras, and cell phones. Its high-end
cell phones have been a growth engine, and Samsung has released a steady stream of
innovations, popularizing the PDA phone and the first cell phone with an MP3 player.
Samsung mobile phones has been ranked 4th in Brand Keys Customer Loyalty Leaders List
by Brandweek on 2006. Samsung Electronics has been continuously ranked in Top 20 in
“The World’s Fifty Most Innovative Companies”, as reported by Business Week.
In early 2008, Samsung Telecommunications India Pvt. Ltd. (Samsung India) announced that
it was taking various strategic initiatives to increase its share in the mobile phone market in
India. The strategy included bolstering its distribution network, rolling out a number of
mobile phone models in all price segments, and adopting a new positioning for the brand
supported by celebrity endorsement. With these initiatives, the company aimed to increase its
market share in India by 100 percent in 2008.
Samsung India, the 100 percent subsidiary of Samsung Electronics Co. Ltd. (Samsung), had a
manufacturing unit at Noida and also imported high-end mobile phones from the parent
company. Samsung, which had firmly established itself as the Number 2 player in the global
arena in 2007 with a 14.3 percent market share, trailed Nokia, Motorola, and Sony Ericsson
in India.
In March 2008, Samsung India strengthened its distribution network. It signed an exclusive
agreement with some 40 distributors who had earlier been working with the market leader
Nokia. With the addition of SSK and Link to its two existing regional distributors Telemart
and United Telelinks, it had four distributors operating on a regional basis.
Now they hold a strong market share of 17.4%, mainly due to its latest edition of mobile
phones Samsung Corby. In India Samsung has varied range of 86 models of mobile phones of
which 29 are Touch screen and 31 are 3G enabled in it.
LG
LG is yet another Korean company who are growing in the Indian mobile industry. LG
Electronics, which launched two new mobile phones, Cookie Fresh (LG GS290) and Cookie
Plus (LG GS500v) today is eyeing 10 per cent market share by the end of December 2010. It
is also targeting a three-fold increase in revenues this year to Rs 3000 crore from Rs 1000
crore at present.
The company is planning to launch to 100 exclusive mobile headset stores in India and will
launch 44 new models of mobile handsets by the end of this year, of which 20 have been
launched in various range — from entry level to smart phones and from touch screen to dual-
SIM phones.
The company also plans to focus on its after-sale services and claims to serve customers in
less than an hour. At present, they have 620 authorised service centres and more than 300
collection points, where 81 per cent of the customers get service in less than an hour, claims
the company Business Head Sudhin Mathur. The company aims to spend around Rs 290
crore in marketing activities including advertising, communications, retail marketing and
visibility investments.
The company has a stronger presence in the semi urban markets as compared to the metros
and occupies the third slot in the Indian handsets market after Nokia and Samsung.
Sony Ericsson
It is joint venture between the Japanese electronics giant Sony and the Swedish handset
manufacturer Ericsson. They are known for their various series of mobile handsets such as
Walkman TM series, Cyber-Shot series. Now the newly launched technology is GreenHeartTM.
GreenHeartTM is the result of years of innovation to bring you phones that offer you a greener
choice. Sony Ericsson announced the Sony Ericsson GreenHeartTM portfolio, which
introduces green innovations that reduce the overall environmental impact of the phone
without compromising on style or features.

The first pioneer product is the C901 GreenHeartTM significantly reducing its impact on the
environment: the ‘green core’ of our GreenHeartTM phones is the result of a long standing
commitment to eliminate the use of unwanted substances from the product design and
manufacturing process; an in-phone manual replacing the standard paper version; recycled
plastics, an energy efficient display and waterborne paint mean that the overall CO2 emissions
of the phone are decreased by 15%.

Sony Ericsson had a strong market share in 2007, where it stood next Nokia but in the last
two years they have been pushed back by the Korean counterparts and have a small market
share of 3%.
Motorola
The purpose of Motorola is to honourably serve the needs of the community by providing
products and services of superior quality at a fair price to the customers; to do this so as to
earn an adequate profit which is required for the total enterprise to grow; and by so doing
provide the opportunity for its employees and shareholders to achieve their reasonable
personal objectives.
Motorola manages four types of sales force: (1) a strategic market sales force composed of
technical, applications, and quality engineers and service personnel assigned to major
accounts; (2) a geographic sales force calling on thousands of customers in different
territories; (3) a distributor sales force calling on and coaching Motorola distributors; and (4)
an inside sales force doing telemarketing and taking orders via phone and fax.
Motorola have made a practice of researching latent needs through a “probe and- learn”
process.
Motorola which does not have strong holding in Indian market had some considerable
increase in market share in 2008 with the launch of models like L6,L7, MOTOROKR, etc.
But soon they can’t get a share in Indian market and have come down to 1%. Motorola,
which is planning to sell the handset business, also saw its share erode to just 5 per cent in the
world market, losing revenue by almost 50 per cent, it added.
Micromax
Indian mobile handset maker Micromax Informatics Ltd is challenging Samsung India
Electronics Pvt. Ltd and LG Electronics India Pvt. Ltd as one of the top three sellers of
cellular phones in the country, overtaking rivals such as Motorola Inc. and Sony Ericsson
Mobile Communications AB and prompting it to look overseas to expand sales.
The Gurgaon-based firm, which entered the business about two years ago, sold about 1
million handsets in January, up from 700,000 in December.
The success of Micromax prompted US private equity group TA Associates to buy “less than
20%” of the firm for around $45 million (Rs210 crore today) in December, valuing it above
$225 million and indicating confidence in its growth potential. Vikas Jain, one of the four
founders, estimated that the firm will close the fiscal with sales at around Rs 1500 crore.
Micromax specialized in entry-level and mid-segment handsets priced between Rs 1800 and
Rs 2400 when it started selling the devices in 2008, confining itself to small towns and rural
areas in the first 12-18 months. Encouraged by its success, the firm expanded to larger cities
and now has a distribution network of 55,000 retailers, which it plans to scale up to 70,000 by
the end of March as part of its strategy to raise sales to 1.5 million handsets a month. The
firm has identified Brazil, Nigeria and Dubai as target markets.

Micromax is planning to expand its range in keeping with new market demands. It is
readying several high-end handsets, including phones that will run on Google’s Android and
Microsoft’s Windows Mobile operating systems. The handsets are expected to be available in
“April or May”, Jain said. Having gained traction, Micromax is also working on a strategy to
create awareness in the metros, which includes tying up with MTV for co-branded phones.
Micromax has also tied up with a Bollywood celebrity “who will be announced shortly” as
brand ambassador, Jain said. Micromax has invested Rs100 crore to set up a plant in Baddi in
Himachal Pradesh as it feels outsourcing manufacturing completely leaves the door open for
supply-side uncertainties. Production will be scaled up from an initial 50,000 per month.
Other Players
Other players like Karbonn, Lava, Lemon, Apple and other Chinese and Taiwan made mobile
phones are also finding its way in the Indian market and were able to make good business in
Indian market.
Companies such as Videocon are also making their mark in the CDMA segment with their
mobile phones.
Recently, MindTree announced the acquisition ($6mn all cash deal) of Kyocera’s captive unit
in Bangalore, where it would design and build ready-to-brand 3G handsets for telecom
service providers and original equipment manufacturers (OEMs).
Post this Kyocera acquisition, MindTree has set up a new business unit N!Mo or Next in
Mobility to address the complete product lifecycle from concept through delivery leading to
ready to brand products in wireless technologies for its customers.
Hong-Kong stock exchange-listed China Wireless Technologies’ Indian subsidiary, Coolpad
Communications has announced partnership with Reliance for its dual sim phone, i.e. GSM
and CDMA and is setting up its mobile handsets in the Indian market. Coolpad is targeting
Rs 800 crore revenue in the next five years from the Indian market.

Revenue
India's telecom equipment revenue touched Rs 95,407 crore (Rs 954.07 billion) in 2007-08
driven by the rising demand for mobile handsets and wireless infrastructure expansion by
service providers.

Source: Deutsche Bank

Nokia, RIM, and Apple each were able to earn outsize profits compared to their cell phone
market share.
In telecom equipment, Ericsson had revenue of Rs 8,000 crore (Rs 80 billion). Nokia
Siemens Network, the merged entity between Nokia and Siemens had revenue of Rs 7,779
crore (Rs 77.79 billion) and Alcatel Lucent posted revenues of Rs 7,000 crore (Rs 70 billion).
Out of the total revenue of Rs 95,407 crore, handset business was Rs 24,000 crore (Rs 240
billion), it added.
According to the V&D survey, over half of the telecom equipment revenue came from carrier
equipment manufacturers, which grew by 32 per cent to touch Rs 56,994 crore (Rs 569.94
billion) during the year. The enterprise equipment industry grew at 27 per cent to report
revenues of Rs 13,210 crore (Rs 132.1 billion).
The phone segment, contributed nearly one-fourth to the total telecom equipment industry, at
Rs 25,203 crore (Rs 252.03) recording a growth of 7 per cent.

Telecom Service
The wireless subscriber base was 391.76 million subscribers at the end of the financial year in
comparison to the subscriber base of 261.07 million at the end of March, 2008. It added
130.69 million subscribers in the financial year 2008-09 registering an annual growth rate of
about 50.06 %. The total subscriber base of wireless services has grown from 33.69 million in
March, 04 to 391.76 million in March, 09.

Source: TRAI

Teledensity
The tele-density at the end of March, 2009 reached the mark of 36.98% as compared to
26.22% at the end of previous year recording an increase of nearly 10.76%.

Source: TRAI
Wireless Subscriber Base
The Wireless Industry crossed 391 million subscribers mark at the end of the financial year
2008-09. The total subscriber base of 391.76 million comprise of 297.26 (75.88%) million
GSM and 94.50 (24.12%) million of CDMA subscribers. During the financial year 2008-09
around 130.69 million subscribers were added registering a growth rate of 50.06% as
compared to 58.12% during the year 2007-08. The subscriber growth of Wireless Operators
(GSM and CDMA) from March 2004 to March 2009 is depicted in the figure below.

Market share of Wireless Operators (in %) as on 31st May 2010

Source: TRAI
GSM
In terms of subscriber base and market share of GSM services, M/s Bharti with 93.92 million
subscriber base remains the largest GSM operator followed by M/s Vodafone, M/s BSNL,
and M/s Idea with subscriber base of 68.77 million, 46.71 million and 38.89 million
respectively. The subscriber base and market share of different GSM operators as on 31st
March 2009 is displayed in the figure.

Subscriber base (in Million) and market share (%) of GSM operators as on 31st March 2009

Source: TRAI

CDMA
In Cellular CDMA Services, in terms of subscriber base and market share, M/s Reliance with
52.65 million subscriber base remains the largest CDMA operator followed by M/s Tata and
M/s BSNL with subscriber base of 35.12 million and 5.44 million respectively.
 Subscriber base (in million) and market share (%) of different CDMA operators as on 2009
Source: TRAI

GSM and CDMA Subscription Numbers:

Year GSM GSM CDMA CDMA
Subscriber Annual Subscribers Annual
(millions) Growth % (millions) Growth %
2000 3.1 94 - -
2001 5.05 76 - -
2002 10.05 91 0.8 -
2003 22.0 110 6.4 700
2004 37.4 70 10.9 70
2005 58.5 57 19.1 75
2006 105.4 80 44.2 131
2007 180.0 71 85 92
Source: COAI report
Mobile Phone Service Providers in India
BSNL
On October 1, 2000 the Department of Telecom Operations, Government of India became a
corporation and was renamed as Bharat Sanchar Nigam Limited (BSNL). It is now one of the
India’s leading Telecommunications Company and the largest public sector undertaking. It
has a network of over 45 million lines covering 5000 towns with over 35 million telephone
connections. The state-controlled BSNL operates basic, cellular (GSM and CDMA) mobile,
Internet and long distance services throughout India. BSNL is the third operator of GSM
mobile services in most circles. It is doing a turnover of Rs 3461621 with a earning per share
of Rs 14.03.
Bharti Airtel
Bharti Airtel Limited, a group company of Bharti Enterprises, is among Asia’s leading
integrated telecom services providers with operations in India and Sri Lanka. The company
had an aggregate of over 118 million customers as of end November 2009, including 116.01
million mobile customers. Bharti Airtel has been ranked among the six best performing
technology companies in the world by Business Week.

Bharti Airtel is structured as four strategic business units - Mobile, Telemedia, Enterprise and
Digital TV. The mobile business offers services in India and Sri Lanka. The Telemedia
business provides broadband, IPTV and telephone services in 95 Indian cities. The Enterprise
business provides end-to-end telecom solutions to corporate customers and national and
international long distance services to carriers. The Digital TV business provides Direct-to-
Home TV services across India. All these services are provided under the Airtel brand.
MTNL
MTNL was set up on 1st April 1986 by the Government of India to upgrade the quality of
telecom services, expand the telecom network, and introduce new services and to raise
revenue for telecom development needs of India’s key metros – Delhi, the political capital,
and Mumbai, the business capital. In the 20 years, the company has taken rapid strides to
emerge as one of the leading telecom operating companies in India. The Government of India
holds 56.32% share in the company.
Reliance Communications
Reliance Communications Limited founded by the late Shri Dhirubhai Ambani is the flagship
company of the Reliance Anil Dhirubhai Ambani Group. It is currently net worth Rs 55000
crores. Reliance Communications corporate clientele includes 1850 Indian and multinational
corporations, and over 250 global carriers. Reliance Communications offers a complete range
of telecom services, covering mobile and fixed line telephony including broadband, national
and international long distance services, data services and a wide range of value added
services and applications.
Tata Teleservices
Tata Indicom and Tata DoCoMo are the telecom operators from the Tata Group. Tata
Indicom with its headquarters in Navi Mumbai provides 2G service using CDMAOne and 3G
services using CDMA2000 technology. Tata DoCoMo is a joint venture company of Tata
Teleservices and NTT DoCoMo.
Vodafone Essar
Vodafone Essar was formerly known as Hutchinson Essar. Vodafone is basically the biggest
telecom service provider of the U.K which has a market value of 75 billion pounds by June
2008. Vodafone has equity interests in 25 countries and Partner networks in 42 countries. The
name Vodafone comes from Voice Data Fone, chosen by the company to “reflect the
provision of voice and data services over mobile phones.” It had agreed to acquire a
controlling interest of 67% in Hutchinson Essar Limited for $11.1 billion.
Idea Cellular
Idea Cellular is a wireless telephony company operating in all the 22 telecom circles in India
based in Mumbai. It is the 3rd largest GSM company in India behind Airtel and Vodafone
and ahead of state run player BSNL.
In 2000, Tata Cellular was a company providing mobile services in AP. When Birla-AT&T
brought Maharashtra and Gujarat to the table, the merger of these two entities was a reality.
Thus Birla-Tata-AT&T, popularly known as Batata, was born and was later branded as !dea.
Then Idea set sights on RPG’s operations in Madhya Pradesh which was successfully
acquired, helping Batata have a million subscribers, and the licence to be the fourth operator
in Delhi was clinched.
In 2004, Idea (the company had by then been rechristened) bought over the Escorts group’s
Escotel gaining Haryana, Uttar Pradesh (West) and Kerala — and licences for three more —
UP (East), Rajasthan and Himachal Pradesh. By the end of that year, four million Indians
were on the company’s network. In 2005, AT&T sold its investment in Idea, and the year
after Tatas also bid good bye to pursue an independent telecom business. And Idea was left
only with one promoter, the AV Birla group. When the company’s stock listed on the bourses
in March 2007, its subscriber base was 13 million with presence in 11 circles. In less than
three years, the subscriber numbers have more than quadrupled. The public issue was
oversubscribed 50 times and raised Rs 2,450 crore.In June 2008, Idea Cellular bought out BK
Modi’s stake in Spice Communications for Rs 2,700 crore adding Punjab and Karnataka
circles. Modi’s joint venture partner, Telekom Malaysia, invested Rs 7,000 crore for a
14.99% stake in Idea. Just around then, Idea’s subsidiary, Aditya Birla Telecom sold a 20%
stake to US-based Providence Equity Partners for over Rs 2,000 crore.
Idea's subscriber base as at the end of May 2010 is 66,726,802 or 15.02% (Approx.) of the
total 444,295,711 mobile connections in India.
Aircel
Aircel is a mobile phone service provider in India. It offers both prepaid and postpaid GSM
cellular phone coverage throughout India. Aircel is a joint venture between Maxis
Communications of Malaysia and Apollo Hospital Enterprise Ltd of India. UTSB has a 74%
stake in Aircel and the remaining 26% is with Apollo Hospitals. It is India’s fifth largest
GSM mobile service provider with a subscriber base of over 27.7 million, as of October 31,
2009. It has a market share of 12.8% among the GSM operators in the country. As on date,
Aircel is present in 18 of the total 23 telecom circles and with licences secured for the
remaining 5 telecom circles, the company plans to become a pan-India operator by 2010.
Additionally, Aircel has also obtained permission from Department of Telecommunications
(DoT) to provide International Long Distance (ILD) and National Long Distance (NLD)
telephony services. It is also a category A ISP. It is also having the largest service in Tamil
Nadu.
Aircel was honoured at the World Brand Congress 2009 with three awards, Brand Leadership
in Telecom, Marketing Campaign & Marketing Professional of the Year. Aircel was
honoured by CMAI INFOCOM National Telecom Award 2009 for, ‘Excellence in Marketing
of New Telecom Service’. Aircel had been selected as the best regional operator in 2008 by
Tele.net. Aircel was rated as the top mid-size utility company in Business World’s ‘List of
Best Mid-Size Companies’ in 2007. Aircel got the highest rating for overall customer
satisfaction and network quality in 2006 by Voice and Data.
Maxis, Aircel's majority stake holder at that time, raised RM11.2 billion (USD 3.36 billions)
for its shareholders (UTSB), making it the largest IPO in Malaysia and Southeast Asia.
MTS
MTS is an Indian telecom service provider. Shyam holds the Unified Service Access License
for the Rajasthan circle and operates Basic Telephony, mobile telephony (CDMA) and
broadband services in the province. Shyam Telelink is the end-to-end service provider in
Rajasthan with more than 269,000 subscribers as on August 2008 and a strong brand -
Rainbow.

The largest public diversified corporation in Russia and the CIS - Sistema acquired a 10%
stake in Shyam Telelink for a total cash consideration of US$ 11.4 million at the end of
September 2007. In October 2007, Sistema signed a share purchase agreement for the
acquisition of an additional 41% stake in Shyam Telelink and a call option agreement, which
gives Sistema the right to increase its stake in Shyam Telelink from 51% up to a maximum of
74%. Later in December 2007, Sistema received an approval for the acquisition of the
blocking stake in Shyam Telelink from the Foreign Investment Promotion Board (FIPB) of
India. As a result of the acquisition of the additional 41% stake, the overall purchase price
totaled US$ 58.1 million.
At present MTS India present in 12 circles out of 22 telecom circles of India. AUSPI reports
show MTS gets a huge response in India due to its excellent competitive & cheaper tariff.

Uninor
Uninor is a mobile telephony and network operator in India. The company holds a pan-India
UAS licence to offer telecommunications services in each of India’s 22 circles. It has also
received spectrum to roll out these services in 21 of the 22 telecom circles. Uninor will be
owned 67.25% by Norwegian telecom giant Telenor, and 32.75% by UNITECH. Uninor has
started mobile services in India at the end of 2009, focusing on the GSM technology.
Uninor is India's eighth nation-wide mobile operator, in a competitive landscape of 13 nation-
wide or regional mobile operators. The company is targeting an 8 % pan-Indian market share,
and the opening of one million retail points and breaking even on EBITDA within three
years. It will provide mobile communication and Value Added Service.
In order to reduce time-to-market, Uninor will outsource infrastructure and back-end services
to partner organizations with established core competencies. The operational model is low-
cost with a gradual network-build up, infrastructure sharing, GSM equipment at competitive
cost, full-scale IT-outsourcing and a long term cost and capex efficiency.
Uninor will organise with headquarters just outside Delhi (Gurgaon), and 11 regional hubs
covering one or more of the total of 22 telecom circles.
Virgin Mobiles
Virgin Mobile India Limited is a cellular telephone service provider company which is a joint
venture between Tata Teleservices and Richard Branson's UK based Virgin Group. Currently,
the company uses Tata's CDMA network to offer its services under the brand name Virgin
Mobile, and it has also started GSM services in some states.
Videocon Mobile Services
Videocon Mobile Service., is a GSM based cellular operator in India based in Mumbai.
Videocon Telecommunications Limited, a Videocon group company offers GSM mobile
services GSM service under the brand name Videocon.
The Videocon Group is a $4 billion, global business conglomerate with a strong presence in
Household Consumer Goods, Oil & Gas, Retail, Telecom, DTH and the Power sector.
Videocon has one of the largest distribution networks in India with a nation-wide presence.
Loop Mobiles
Loop Mobile (Formerly BPL Mobile) is a mobile phone service provider in India. It offers
both prepaid and postpaid GSM cellular phone coverage in Mumbai circle
BPL Mobile Communications, the country’s oldest mobile telecom service provider, has
changed its name to Loop Mobile, following the expiry of its brand-use agreement with the
TPG Nambiar-owned BPL Group.
Loop Mobile will also have the latest NGIP (Next Generation Internet Protocol) and EDGE
(Enhanced Data rates for GSM Evolution) technology. The operator is hoping to leverage
these technologies to introduce innovative VAS, as well as micro-segmented tariffs for
subscribers.

Telecom Service Providers at the end of Q4 for the year 2008

Company Sales (Rs. In Crores)

BSNL 10747.79
Bharti 8381
Vodafone 4681.44
Reliance Communications 4318.74
Tata Teleservices 2057.30
Idea Cellular 2150.84
Source: The Economic Times
Segmentation of Indian Telecom Consumer Market
With the proliferation of mobile phone users, several micro segments have also emerged
lately, each with their own specific needs. The Indian Mobile consumer market has been
segmented as follows:

Source: India Cellular

The rationale behind the above segmentation is to identify customers on the basis of their
stage in life and hence to tailor-make schemes for each customer segment.

TV Advertisement among Telecom Service Providers

Interestingly, despite the airwave allocation issues, telecom firms advertised magnanimously.

Telecom Service Provider % Share

Bharti Airtel 17%
Idea Cellular 15%
Bharat Sanchar Nigam Limited 15%
Tata Teleservices 13%
Vodafone Essar 9%

Source: AdEx

Telecom sector remained one of the prominent advertisers in Indian television arena (Jan- Mar
2010) with a 27% growth in its total ad spend. While telecom service providers contributed
the maximum in the same, 69% of the total amounts spend by telecom service providers came
from the top 5 advertisers. Nokia remained the top advertiser among equipment makers.

In the recently concluded FIFA World Cup most of the telecom companies were the top
advertisers. Almost everyone was a part of the FIFA bandwagon.

Rank Top 10 Categories Top 10 Advertisers Top 10 Brands

1 Cellular Phones Bharti Airtel Ltd Vodafone Cellular
Phone Services
2 Cellular Phone Service Vodafone Essar Ltd Nokia E72
3 Two wheelers Nokia Corporation Hero Honda
Karizma ZMR
4 DTH Service Providers Samsung India Electronics Ltd Airtel Cellular
Phone Service
5 Non-aerated soft drink Hero Honda Motors Spice Video Phones
6 Lubricants Bharat Petroleum Airtel Digital TV
7 Televisions Micromax Informatics Ltd Micromax Bling
Q55
8 Cars/Jeeps Spice Mobiles Samsung 3D LED
TV
9 Aerated soft drink Parle Agro Coca Cola
10 Spices Maruti Suzuki Ltd Bharat Petroleum
Mak 4T Plus

Source: TAM Media

Internet Service Provider

The total subscriber base for internet users in India is 13.54 million as of 2009. Internet
penetration in India is one of the lowest in the world which is about 7.0% of the population,
compared to other nations like United States, Japan or South Korea where internet
penetration is significantly higher than in India.
The Internet subscriber base in the country as of 31st March 2009 stood at 13.54 million as
compared to 11.09 million during the previous year, registering an annual growth rate of
about 22.09%.

Internet Subscriber
Source: TRAI
The number of broadband connections in India has seen a continuous growth since the
beginning of 2006. At the end of January 2010, total broadband connections in the country
have reached 8.03 million.
Broadband in India is more expensive as compared to Western Europe/United Kingdom and
United States. After economic liberalization in 1992, many private ISPs have entered the
market, many with their own local loop and gateway infrastructures. The telecom services
market is regulated by the TRAI and the DoT, which has been known to impose censorship
on some websites.

Share in Net Additions during May 2010

Source: TRAI

Spectrum Allocation
1G networks used are analog; 2G networks are digital and 3G technology is used tp enhance
mobile phone standards. 3G helps to simultaneously transfer both voice data (a telephone
call) and non-voice data (such as downloading information, exchanging e-mail, and instant
messaging). The highlight of 3G in video telephony.

2G Allocation
Here is the latest 2G GSM spectrum allocation chart, circle wise and operator wise. BSNL
and MTNL have the maximum 2G spectrum, at least 10 MHz in each circle. Karnataka the
Billion Dollar [FY 09 Topline Expectations] Telecom circle for Bharti Airtel is the most
sought after 2G Wirless circle with 69.2 Mhz of spectrum being collectively allocated to
various operators. The following chart shows spectrum allocated to BSNL, MTNL, Bharti
Airtel, Vodafone India and Idea Cellular with Spice.
 Source: TRAI
The following chart shows 2G GSM Wireless Spectrum allocation to New Operators.

Grey areas cells indicate service not yet operational

Source: TRAI

3G Allocation
In 3G auction, local players as well as international players can take part. Earlier it was
decided that international players can’t take part in the auction but TRAI changed the rules.
The winner’s list for the 3G auction is given below:
Operator Circles Pay out (in Rs
Crore)
Bharti 13 circles – Delhi, Mumbai, AP, Karnataka, TN, 12295.46
UP(West), Rajasthan, W.Bengal, HP, Bihar, NE,
J&K, Assam
Vodafone 9 circles – Delhi, Mumbai, Maharastra, Gujarat, 11617.86
TN, Kolkata, Harayana, UP(East), W.Bengal
Reliance 13 circles – Delhi, Mumbai, Kolkata, Punjab, 8585.04
Rajasthan, MP, W.Bengal, HP, Bihar, Orrisa,
Assam, NE, J&K
Idea Cellular 11 circles – Maharastra, Gujarat, UP(West), MP, 5768.59
HP, AP, Kerala, Punjab, Harayana, UP(East),
J&K
Tata Teleservices 9 circles – Maharastra, Gujarat, UP(West), 5864.29
Rajasthan, MP, Karnataka, Kerala, Punjab,
Harayana
Aircel 13 circles – W. Bengal, Bihar, Orissa, Assam, 6499.46
AP, Karnataka, TN, Kolkata, Kerala, Punjab,
UP(East), NE, J&K
STel 3 circles- HP, Bihar, Orrisa 337.67

Source: Department of Telecommunications, The Times of India

Major Recommendations made by TRAI during the year 2008-09

Major Recommendations made during the year 2008-09:
• Recommendations on Terms and Conditions for Publication of an Integrated
Telephone Directory for Fixed Line Telephones
• Recommendations on permitting New Entity for Allocation of 3G Spectrum
• Recommendation on Foreign Investment Limits for Broadcasting Sector
• Recommendations on Terms and Conditions for National Integrated Directory
Enquiry Service (NIDQS) for Fixed and Mobile Telephones
• Recommendations on Allocation and Pricing for 2.3-2.4 GHz, 2.5-2.69 GHz & 3.3-
3.6GHz bands
• Recommendations on the modifications proposed by DoT on Reserve Price and
Auction process for 3G services
• Recommendations on the modifications proposed by DoT on spectrum Usage Charges
and One Time Spectrum Enhancement Charges
 • Recommendations on Restructuring of Cable TV Services
• Recommendations on Mobile Virtual Network Operator (MVNO)
• Recommendations on Issues related to Internet Telephony
• Recommendations on the Policy Guidelines and operational Issues for Television
Audience Measurement / Television Rating Points (TRPs)
• Recommendations on Provision of Calling Cards by Long Distance Operators
• Recommendations on issues related to entry of certain entities into Broadcasting and
Distribution activities
• Recommendations on Modifications proposed by DoT on the spectrum usage charges
for 3 G Services.
• Recommendations on Growth of Value Added Services and Regulatory Issues
• Recommendations on Media Ownership
• Recommendations on Lock-in period for Promoter’s Equity and other related issues
for Unified Access Service Licensees (UASL)
• Recommendations on An Approach to Rural Telephony – Suggested Measures for an
Accelerated Growth

Research and Development

India has proven its dominance as a technology solution provider. Efforts are being
continuously made to develop affordable technology for masses, as also comprehensive
security infrastructure for telecom network. Research is on for the preparation of tested
infrastructure for enabling interoperability in Next Generation Network. It is expected that
the telecom equipment R & D shall be doubled by 2010 from present level of 15%. Modern
technologies inductions are being promoted. Pilot projects on the existing and emerging
technologies have been undertaken including WiMax, 3G etc. Emphasis is being given to
technologies having potential to improve rural connectivity. Also to beef up R&D
infrastructure in the telecom sector and bridge the digital divide, cellular operators, top
academic institutes and the Government of India together set up the Telecom Centres of
Excellence (COEs). The main objectives of the COEs are as follows:
• Achieve Telecom Vision 2010 that stipulates a definite growth model and take it
beyond.
• Secure Information Infrastructure that is vital for country’s security.
• Capacity Building through Knowledge for a sustained growth.
• Support Planned Predictive Growth for stability.
• Reduce Rural Urban Digital Divide to reach out to masses.
• Utilize available talent pool and create environment for innovation.
• Management of National Information Infrastructure (NII) during Disaster
• Cater the requirement of South East Asia as Regional Telecom Leader

To achieve these objectives, seven Centre of Excellences in various field of Telecom have
been set up with the support of Government and the participation of private/public telecom
operators as sponsors, at the selected academic institutions of India. The details of COEs are
enumerated below: -
Associate Institute Sponser Work Assigned
IIT Kharagpur Vodafone Essar & Texas Next Generation Network
Instruments (NGN) & Network
Technology
IIT Delhi Bharti Airtel Telecom Technology &
Management
IISc Bangalore Aircel & Texas Instrumennts Information Security &
Disaster Management of
Infrastructure
IIT Kanpur BSNL & Alphion Technology Integration,
Multimedia & Computational
Mathematics
IIT Madras Reliance Communication Telecom Infrastructure &
Energy
IIT Bombay Tata Teleservices Rural Applications
IIM Ahmedabad Idea Cellular Policy, Regulation,
Governance, Customer Care
& Marketing

Mobile Number Portability (MNP)

TRAI announced the rules and regulations to be followed for the Mobile Number Portability
in their draft release on 23 September 2009. Mobile Number Portability (MNP) allows users
to retain their numbers, while shifting to a different service provider provided they follow the
guidelines set by TRAI. Users are expected to holding the mobile number with a given
provider for at least 90 days, before they decide to move to the other provider.
As per news reports, Government of India decided to implement MNP from December 31,
2009 in Metros & category ‘A’ service areas and by March 20, 2010 in rest of the country. It
has been postponed to March 31, 2010 in Metros & category 'A' service areas.

SWOT Analysis of Indian Telecom Industry

Strengths
 Huge Wireless Subscriber potential
 One of the fastest growing sector
 Consumers are ready to pay for cutting edge services
  FDI limits 74%
 Unified licence regime
Weakness
 Lowest call tariffs
 Market is regulated by Government bodies
 Too many authorities are ruling this sector
 Wide scales of consumer churn in this sector. Now the number portability is coming
up so it will increase the consumer churn rate
 Value Added Services is restricted because of literacy and language problems
 It is difficult to make into the semi-rural and rural areas because of the lack of
infrastructure
 Problem of limited spectrum availability and the issue of interconnection charges
between the private and the state operators
Opportunities
 To offer more VAS on GSM, CDMA and Internet Service Providers ( ISP)
 An expanding Indian economy with increased focus on the services sector
 Language independent services. E.g. sending the message in local language,
information available in local language, etc.
 New innovations in service providers
 Huge content providing to local culture as well as globally
 Foreign investments in form of equity or technology
 Unified messaging platforms
Threats
 Weak Intellectual Property Rights (IPR)
 Threat of low cost service provider
 Regulator interference
 The service provider has to incur a huge initial fixed cost to make a mark in rural
markets. Achieving break-even under these circumstances may prove to be difficult.

Next generation networks

4G refers to the fourth generation of cellular wireless standards. It is a successor to 3G and
2G families of standards. A 4G system is expected to provide a comprehensive and secure
all-IP based solution where facilities such as IP telephony, ultra-broadband Internet access,
gaming services and streamed multimedia may be provided to users.
The Mobile WiMAX (IEEE 802.16e-2005) mobile wireless broadband access (MWBA)
standard is sometimes branded 4G, and offers peak data rates of 128 Mbit/s downlink and
56 Mbit/s uplink over 20 MHz wide channels. The IEEE 802.16m evolution of 802.16e is
under development, with the objective to fulfil the IMT-Advanced criteria of 1 Gbit/s for
stationary reception and 100 Mbit/s for mobile reception. The world's first commercial
mobile WiMAX service was opened by KT in Seoul, South Korea on 30 June 2006.
Even as the auction for 3G Spectrum was still on, the government has begun work on 4G
spectrum. Auction for 4G spectrum will begin as soon as operators roll out their 3G network,
Communications Minister A. Raja told Hindustan Times. 4G is a progression of 3G
technology. 4G networks allows users to stream mobile multimedia such as TV broadcasts
and online games with speeds up to ten times greater than those possible in 3G networks.

References
• Kotler Philip, Kevin Lane Keller ‘Marketing Management’, 13th Ed., Pearson
Education (Singapore) Pvt. Ltd.

• Shah Naman, ‘Critically analysis of customer preference and satisfaction

measurement in Indian Telecom Industry’.

• 4Ps Business and Marketing, Volume V, Issue 14

• The Business Line dated on 20/05/2010.

• TRAI Annual Report 2008-09.
• http://www.trai.gov.in/
• http://timesofindia.indiatimes.com/
• http://beta.thehindu.com/
• http://www.topnews.in/
• http://www.icmrindia.org/
• http://www.pluggd.in/
• http://www.fonearena.com/
• http://www.wikipedia.org/
• http://www.airtel.in
• http://lgindia.com/products
• http://nokia.com
• http://sonyericsson.com
• http://samsungindia.com