Telecom Industry

Introduction

 Telecommunication is the transmission of messages, over

significant distances, for the purpose of communication.

 Indian telecom market is one of the fastest growing markets in the

world.

 Two major factors responsible for the growth of

telecommunications industry are use of modern technology and
market competition.
• Indian telecom network has about 562.21 million
connection as on 2009.

• Indian telecom has become the second largest

wireless network in the world after China.

• Bharti Airtel has the largest customer base with

31% market share, followed by Hutch and BSNL with
each holding 22% market share.
 Telephone services were introduced in India in 1881.

 Therefore, the history of Indian telecom can be started with the

introduction of telegraph.

 It was in the year 1851 that the British first introduced telecommunication
services in India through operational land lines near Calcutta.

 In 1881 Govt. of India granted licence to the Oriental Telephone Company

Ltd. of England for opening exchange at Calcutta.
 In 1882 called the red letter in the history of telephone exchange of BSNL
was setup in Calcutta.

 In the year 1985, the Department of Telecommunications (DOT) was set up

to provide domestic and long distance telephone services.

 1985 - First mobile telephone service was started on non-commercial basis

in Delhi.

 In 1986, two wholly government-owned companies were created:

 the Videsh Sanchar Nigam Limited (VSNL) for international
telecommunications and
 Mahanagar Telephone Nigam Limited (MTNL) for service in
metropolitan areas.
 With the economic liberalization in the 1990s, the telecom market in India
was also benefited to a great extent.

 In the year 1997, the government set up the Telecom Regulatory Authority
of India (TRAI)
 Telecommunications play an important role in the world economy
and the worldwide telecommunication industry's revenue was
estimated to be $3.85 trillion in 2008. The service revenue of the
global telecommunications industry was estimated to be $1.7
trillion in 2008, and is expected to touch $2.7 trillion by 2013.

 Three types of players exists in ' Telecom Industry India '

community
•State owned companies like - BSNL and MTNL.
•Private Indian owned companies like - Reliance Infocomm
and Tata Teleservices.
•Foreign invested companies like - Hutchison-Essar, Bharti
Tele-Ventures, Escotel, Idea Cellular, BPL Mobile, Spice
Communications etc.
 Telecommunication sector in India can be divided into two segments:
 Fixed Service Provider (FSPs), and
 Cellular Services.
Fixed line services consist of basic services, national or domestic long
distance and international long distance services. The state operators
(BSNL and MTNL), account for almost 90 per cent of revenues from basic
services.

 Cellular services can be further divided into two categories:

 Global System for Mobile Communications (GSM)
The GSM sector is dominated by Airtel, Vodfone-
Hutch, and Idea Cellular
 Code Division Multiple Access (CDMA)
The CDMA sector is dominated by Reliance and Tata
Indicom.
Major Players
SWOT Analysis
 Strengths
 Huge Customer potential
 The broadband subscribers grew from 0.18 million in 2005 to 7.98 million in
2009
 High growth rate
 Wireless subscribers growing at a CAGR of 60% per annum.
 Allowed FDI limit ranging from 74% - 100%
 The total FDI equity inflows in telecom sector have been US$ 2223 million
during 2009-10
 High returns on Investment
 Easier to create economies of scale there by increasing return on investment
 Liberalization efforts by Govt.
 The share of private sector in total telephone connection is now 82.33% as on
2009 as against 5% in 1999
 Lower capital expenditure
 the Indian telecom market is high density area, which means more population
per tower.
Weakness
 Poor telecommunication infrastructure
 Result large number of call drops

 Late adopter of New Technology

 Most competitive market

 A market strongly regulated by Government

 Difficult to enter because of requirement of huge financial

resources.
Opportunities
 3G telecom services and 4G services

 More quality services and value added services

 Menu based services, mobile TV, videos, mobile banking,
mobile ticketing, etc..
Threats
 Technology and cost

 Foreign players regulate the industry

 Health issue

 Not eco friendly

The leading cellular service providers have the following number of subscribers:

Service Provider No. of CDMA Subscribers No. of GSM Subscribers

Reliance 2.75 crores 38.76 lakhs

Tata 1.07 crores

Airtel 3.37 crores

MTNL 24.98 lakhs

BSNL 2.44 crores

Hutch 2.44 crores

Idea 1.3 crores

Spice 25.56 lakhs

BPL 10.62 lakhs

Aircel 48 lakhs