You are on page 1of 71

Competitive analysis of telecom industry: Tata Services

The Indian telecommunications industry is one of the fastest growing in the world. The industry has witnessed consistent growth during the last year on the back of rollout of newer circles by operators, successful auction of third-generation (3G) and broadband wireless access (BWA) spectrum, network rollout in semi-rural areas and increased focus on the value added services (VAS) market. According to the Telecom Regulatory Authority of India (TRAI), the number of telephone subscriber base in the country reached 742.12 million as on October 31, 2010, an increase of 2.61 per cent from 723.28 million in September 2010. With this the overall tele-density (telephones per 100 people) has touched 62.51. The wireless subscriber base has increased to 706.69 million at the end of October 2010 from 687.71 million in September 2010, registering a growth of 2.76 per cent. Meanwhile, Indian Global System of Mobile Communication (GSM) telecom operators added 17.45 million new subscribers in November 2010, taking the all-India GSM cellular subscriber base to 526.18 million, according to the Cellular Operators AssociMajor Investments The booming domestic telecom market has been attracting huge amounts of investment which is likely to accelerate with the entry of new players and launch of new services. According to the Department of Industrial Policy and Promotion (DIPP), the telecommunications sector which includes radio paging, mobile services and basic telephone services attracted foreign direct investment (FDI) worth US$ 1,062 million during April-October 2010-11. The cumulative flow of FDI in the sector during April 2000 and October 2010 is US$ 9,993 million. As per an industry report the telecom industry witnessed merger and acquisition (M&A) deals worth US$ 16.60 billion during April-December 2010, which represented 28.26 per cent of the total valuation of the deals across all the sectors during the

period analysed. There were 10 inbound, outbound and domestic M&A deals in the telecom sector during the first nine months of the current fiscal. The biggest M&A deal in the sector was made by telecommunications service provider Bharti Airtel through the acquisition of Zain’s African mobile services operations in 15 countries. The deal involved a transaction of US$ 10.7 billion. In another deal, Bharti Airtel acquired 100 per cent stake of Telecom Seychelles Ltd for US$ 62 million. Other major M&A deals included the acquisition of 95 per cent stake in Infotel Broadband for US$ 1,032.26 million by Reliance Industries and 26 per cent stake of US-based mobile chipmaker Qualcomm’s Indian arm for US$ 57.72 million by India's Tulip Telecom and Global Holding. Further, India-based GTL Infrastructure Ltd has bought 17,500 telecom towers of Aircel Ltd. for US$ 1,702.95 million. Going Global In March 2010, Bharti Airtel bought the African operations of Kuwait-based Zain Telecom for US$ 10.7 billion, driving the Indian player into the league of top ten telecom players globally. The Reserve Bank of India (RBI) has liberalised the investment norms for Indian telecom companies by allowing them to invest in international submarine cable consortia through the automatic route. In April 2010, RBI issued a notification stating "As a measure of further liberalisation, it has now been decided... to allow Indian companies to participate in a consortium with other international operators to construct and maintain submarine cable systems on co-ownership basis under the automatic route." The notification further added, "Accordingly, banks may allow remittances by Indian companies for overseas direct investment." Tele-medicine With increase in cell phone users to around 700 million and introduction of 3G services soon in the country, remote treatment and diagnosis of patients through mobile phones would become a reality in the near future. In fact, a few telecom

operators and value-added service developers are planning to use mobile phones for diagnostic and treatment support, remote disease monitoring, health awareness and communication. The Gujarat health department plans to connect all villages through its telemedicine network. The state government has so far expanded the reach of telemedicine services from 53 villages in 2008 to 453, and hopes to cross 500 villages soon. Jay Narayan Vyas, state health minister, said "First thing we plan to do is to start the 104 service over the phone. People can call up and talk to paramedics in call centers who can suggest the primary action to be taken in case of any health emergency. Also, they would be able to suggest generic and over the counter drugs." The GSM subscriber base stood at 508.72 million at the end of October 2010. At 110.01 million connections ' Indian Telecom Industry' is the fifth largest and fastest growing in the world. The subscriber base has grown by 40% in 2005 and is expected to reach 250 million in 2007. Over the last 3 years, two out of every three new telephone connections were wireless. Consequently, wireless now accounts for 54.6% of the total telephone subscriber base, as compared to only 40% in 2003. Wireless subscriber growth is expected to grow at 2.5 million new subscribers every month in 2007. The wireless subscriber base skyrocketed from 33.69 million in 2004 to 62.57 million in FY 2004 -2005. The wireless technologies currently in use ' Indian Telecom Industry ' are Global System for Mobile Communications (GSM) and Code Division Multiple Access (CDMA). There are primarily 9 GSM and 5 CDMA operators providing mobile services in 19 telecommunication circles and 4 metro cities, covering more than 2000 towns across the country. And the numbers are still growing for ' Indian Telecom Industry '. ' Telecom Industry in India ' is regulated by 'Telecom Regulatory Authority of India' (TRAI). It has earned good reputation for transparency and competence. 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 TeleVentures, Escotel, Idea Cellular, BPL Mobile, Spice Communications etc.

The ' Indian Telecom Industry ' services is not confined to basic telephone but it also extends to internet, broadband (both wireless and fixed), cable TV, SMS, IPTV, soft switches etc. The bottlenecks for ' Indian Telecom Industry ' are:

Slow reform process. Low penetration. Service providers bears huge initial cost to make inroads and achieving break-even is difficult. • Huge initial investments. • Limited spectrum availability and interconnection charges between the private and state operators.

The Government Broadband Policy 2004, aims at 9 million broadband connections and 18 million internet connections in 2007. ' Indian Telecom Industry ' is currently expected to contribute nearly 1% to India's GDP which is heartening and estimated to grow further and brighten the ' Scenario of Indian Telecom Industry. Tata Teleservices Limited (TTSL) (BSE: 532371) is a subsidiary of the Tata Group headquartered in Navi Mumbai, an Indian conglomerate. It operates under the brand name Tata Indicom in various telecom circles of India. In Nov 2008, Japanese telecom giant NTT Docomo picked up a 26 per cent equity stake in Tata Teleservices for about Rs 13,070 crore ($2.7 billion) or an enterprise value of Rs 50,269 crore ($10.38 billion).[1] In Feb 2008, TTSL announced that it would provide CDMA mobile services targeted towards the youth, in association with the Virgin Group on a Franchisee model basis. Tata Teleservices Provides mobile services under 3 Brand names:
• • • •

Tata Indicom (CDMA Mobile operator) Tata DoCoMo (GSM Mobile operator) Virgin Mobile (CDMA Mobile operator) Virgin Mobile (GSM Mobile operator)

Company Background: Tata Teleservices is part of the Tata Group. Tata Teleservices spearheads the Group’s presence in the telecom sector. Incorporated in 1996, Tata Teleservices was the first to launch CDMA mobile services in India with the Andhra Pradesh circle. The company acquired Hughes Telecom (India) Limited [now renamed Tata Teleservices (Maharashtra) Limited] in December 2002. With a total Investment of Rs 19,924 Crore, Tata Teleservices has created a Pan India presence spread across 20 circles that includes Andhra Pradesh, Chennai, Gujarat, J & K, Karnataka, Delhi, Maharashtra, Mumbai, North East, Tamil Nadu, Orissa, Bihar, Rajasthan, Punjab, Haryana, Himachal Pradesh, Uttar Pradesh (E), Uttar Pradesh (W), Kerala, Kolkata, Madhya Pradesh and West Bengal.

Having pioneered the CDMA 3G1x technology platform in India, Tata Teleservices has established 3G ready telecom infrastructure. It partnered with Motorola, Ericsson, Lucent,Zte and ECI Telecom for the deployment of its telecom network. The company is the market leader in the fixed wireless telephony market with a total customer base of over 3.8 million. Tata Teleservices’ bouquet of telephony services includes Mobile services, Wireless Desktop Phones, Public Booth Telephony and Wireline services. Other services include value added services like voice portal, roaming, post-paid Internet services, 3-way conferencing, group calling, Wi-Fi Internet, USB Modem, data cards, calling card services and enterprise services. Some of the other products launched by the company include prepaid wireless desktop phones, public phone booths, new mobile handsets and new voice & data services such as BREW games, Voice Portal, picture messaging, polyphonic ring tones, interactive applications like news, cricket, astrology, etc. In collaboration with Tata Business Support Solutions, Tata Teleservices Ltd provided its expertise and infrastructure to provide call center and toll-free number facilities for the after-sales services of Tata Swach, a water purifier developed by Tata Chemicals. Tata Indicom "Non Stop Mobile" allows pre-paid cellular customers to receive free incoming calls. Tata Teleservices Limited along with Tata Teleservices (Maharashtra) Limited have a subscriber base of 36 million customers (as of April 2009) in more than 5,000 towns. Tata Teleservices has also acquired GSM licenses for specific circles in India. Tata Telelservices is an unlisted entity. Tata Group and group firms own the majority of the company, NTT docomo holds 26% while investor C. Sivasankaran holds 8%.[2] Senior management The Board of Directors for TTSL includes Tata Sons Chairman Ratan Tata, while the company is currently headed by its Managing Director, Mr. Anil Kumar Sardana.

Market data Tata Indicom in April 2009, crossed the 35 million subscribers mark in the wireless category with an overall subscriber base of over 36 million. Tata Teleservices is no. 2 slot in terms of Market Share in Delhi NCR region with a subscriber base of 5 million. Network Tata Teleservices operates primarily on the CDMA network. Tata Indicom’s enterprise solutions work on the CDMA 3G-1X technology. The total tower strength of Tata Indicom is currently at 18,500 towers nationwide. Business areas Tata Teleservices offers multiple tariff plans in both the Post-paid and Pre-Paid category. It also offers Mobile Value Added Services to subscribers. Branding The Tata Indicom brand is endorsed by bollywood actress Kajol & cricketers Irfan Pathan and Yousuf Pathan. Tata Teleservices has recently launched the Virgin Mobile Brand to target the youth segment. Rural Telephony TTSL also maintains a distribution network across villages , where in people are appointed and trained by TTSL – who visit villages on a bicycle or a two-wheeler at defined times on defined days of the week, selling recharge vouchers and servicing equipment; each runner covers between 200 to 300 customers. The company joined hands with Tata Chemicals, Tata Kisaan Sansar network, disseminating information through these centres and using them as local distributors.

Retail The company's retail business has around 3,000 outlets nationally, comprising 600 TTSL owned stores and around 2,500 stores in the Franchisee format. Tata Indicom already covers the top 700 towns in India in terms of population through Tata Indicom Exclusive Stores. Tata Indicom also maintains an online portal for its customers i-choose where the customers can buy Tata Indicom post-paid connections and prepaid recharge vouchers with an upfront commitment of activation and delivery of the handset within 72 hours. Value added services Tata Teleservices, in October 2007 launched Tata Zone, an infotainment portal on Tata Indicom BREW-enabled mobile phones, in Hindi. This service has applications, pricing details, downloads and browsing instructions in Hindi. The rationale behind this was simple: 66% of all Indians speak Hindi, while less than 5% understand English. Under its VAS bouquet, TTSL offers services such as News, Games, Faith and Prayers, Ringtones, Streaming TV, Fun Shows, Video Zone, Song Download Express, Cricket, Internet Surfing, Astrology, and Mobile Office among others. Tata Indicom plans to provide m-commerce, mobile advertising and social networking under its VAS offerings. The telecom services sector in India is on the ascendant. Subscriber numbers are expected to more than double in the period 2001-06, from 35 million in March 2001 to about 85 million in 2006. India will mirror the global trend of very high growth rates in mobile vis-à-vis fixed (40 per cent CAGR in mobile vs 16 per cent in fixed). However, fixed line teledensity in India being very low at 4 per cent absolute growth in fixed lines will lead additions in mobile subscribers over the next 10 years. In spite of the high projected growth, teledensity in 2010 will be 11.5 per cent, falling short of NTP99 targets of 15 per cent. Revenues would grow, albeit much slowly, in the light of significant reductions in tariffs. By 2006, telecom services is expected to be a Rs 66,000-crore sector, contributing 5.4 per cent to India's GDP.

Several parts of the sector are being liberalised. Unlimited entry of new players has been allowed in Basic, NLD, ILD, ISP and Infrastructure businesses. ILD and Internet telephony are the latest in the deregulation agenda, with the former being opened up in April 2002, and the guidelines for the latter expected to be announced soon. However, there are still uncertainties about how regulation would shape up. Customer choice mechanisms and interconnect terms for long distances services are yet to be finalised. The dispute regarding limited mobility has not yet been resolved. These will result in changes in tariffs, market share and revenue share of access and NLD/ILD players, thereby impacting the strategies and plans of various players. Three to four leading private players are likely to emerge as competition to the incumbents, BSNL and MTNL, which have significant presence across the value chain. The Tata group, Reliance Infocom and Bharti Televentures have announced plans of being integrated telecom companies offering end-to-end services to customers. Hutchison on the other hand appears to be focused on cellular services, with no stated intention of entering other businesses. These are interesting times for the Tata Group - emerging as the largest private sector telecom player with a significant presence across the telecom value chain. The acquisition of VSNL is the latest in a series of moves that the group has taken - gradually and quietly - to expand its range of coverage and services. The Tatas were one of the earliest (private sector) entrants into telecom services: In 1995, Tata Cellular (TCL) won the license to offer mobile services in Andhra Pradesh; followed by Tata Teleservices (TTSL) which successfully bid for the basic license in AP in 1997. Tata Power was also the first to light up a broadband network in India, using DWDM technology in the Mumbai metro network. TCL later merged with Birla AT&T to expand market coverage to four circles. Birla Tata AT&T (BTAL) proposes to further merge with BPL Mobile, thus forming the largest cellular services company in India with nearly 1.4 million subscribers. TTSL, which recently crossed the 1-lakh subscriber-mark in AP, has signed up licenses to rollout basic services

in four new high potential circles in Delhi, Tamil Nadu, Karnataka and Gujarat). The VSNL acquisition catapults the Tata group into a leading position among private Indian telecom players. With a 100-per cent share in the lucrative ILD business, a leading share in Internet services and a favourable NLD license, VSNL perfectly fits in with the group's plans of providing integrated telecom solutions. The Tata-VSNL team embarks on its next challenge - ensuring a smooth transition at VSNL and integrating business plans for ILD, NLD and Internet/date services - to enhance value for its stakeholders: customers and shareholders. The Tata group aims to be a market leader in the telecom services space. The strategic intent is to capture a sizable share of customers and end users; customer ownership will be leveraged to anchor the group's other telecom offerings. The group will focus on providing an appropriate mix of fixed/wireless and voice/data services to customers in select high potential areas. The Tatas will compete on superior product quality, customer care an innovative bundling of services. Infrastructure is being built on selective routes; lease/swap options are being explored elsewhere. The Tata group recognises that the strategy while being robust has to remain flexible to respond speedily to developments in customer behaviour, competition, technology, regulation and M&A opportunities. Tata Telecom and Reliance India are two of the well known mobile service providers with CDMA technology. In the week behind, Reliance launched the GSM services. Meanwhile, this second largest CDMA mobile operator, TTSL (Tata Telecom Service Limited) announces the same today. Anil Sardana, Managing director, Tata Telecom declares “We have already got spectrum (2G) for most of the circles and will roll out the GSM services soon. We have got spectrum in 13 circles in one or two months. We expect to get spectrum in all the circles barring one or two. We have already placed orders for equipment with Nokia Siemens Network and Huawei for core network and NEC for transmission network. Considering the

time when we got spectrum, we are rolling out our services and hope to be in all the circles for our GSM services by the end of 2009. We are targeting a customer base of 35 million plus by March ’09 and 100 million by 2011. By then, we expect to have 55 million new users on our upcoming GSM platform” TTSL in its GSM service would target new subscribers. Stressing that its focus on the CDMA services would continue, he said that the government decision to transfer subscribers from one technology to the other, without changing the mobile number under intra-operator number portability, would encourage subscribers figure manipulation. Tata Teleservices has said it will invest Rs 8,000 crore over the next 24 months to expand its telecom networks.Of this, about Rs 6,000 crore would go in building a pan-India GSM network, while the remaining Rs 2,000 crore would be used to strengthen its existing CDMA networks. And the company is also planning to launch Blackberry handsets by september ’09!. Tatas are known for their steady growth and with that hope and century-long trust, if you are that TTSL customer, this news is one of its kind to make you feel proud! Tata Teleservices Limited spearheads the Tata Group’s presence in the telecom sector. The Tata Group includes over 90 companies, over 350,000 employees worldwide and more than 3.5 million shareholders. Incorporated in 1996, Tata Teleservices is the pioneer of the CDMA 1x technology platform in India. It has embarked on a growth path since the acquisition of Hughes Tele.com (India) Ltd [renamed Tata Teleservices (Maharashtra) Limited] by the Tata Group in 2002. It launched mobile operations in January 2005 under the brand name Tata Indicom and today enjoys a panIndia presence through existing operations in all of India’s 22 telecom Circles. The company is also the market leader in the fixed wireless telephony market. The company’s network has

been rated as the ‘Least Congested’ in India for six consecutive quarters by the Telecom Regulatory Authority of India through independent surveys. Tata Teleservices Limited has also become the first Indian private telecom operator to launch 3G services in India under the brand name Tata DOCOMO, with its recent launch in all the nine telecom Circles where it bagged the 3G license. In association with its partner NTT DOCOMO, the Company finds itself favorably positioned to leverage this first-mover advantage. With 3G, Tata DOCOMO stands to redefine the very face of telecoms in India. Tokyo-based NTT DOCOMO is one of the world’s leading mobile operators—in Japan, the company is the clear market leader, used by nearly 55 per cent of the country’s mobile phone users. Tata Teleservices Limited also has a significant presence in the GSM space, through its joint venture with NTT DOCOMO of Japan, and offers differentiated products and services under the Tata DOCOMO brand name. Tata DOCOMO arises out of the Tata Group’s strategic alliance with Japanese telecom major NTT DOCOMO in November 2008. Tata DOCOMO has received a panIndia license to operate GSM telecom services—and has also been allotted spectrum in 18 telecom Circles. The company has rolled out GSM services in all of these 18 telecom Circles in the quick span of just over a year. Tata DOCOMO marks a significant milestone in the Indian telecom landscape, and has already redefined the very face of telecoms in India, being the first to pioneer the per-second tariff option—part of its ‘Pay for What You Use’ pricing paradigm. Tokyo-based NTT DOCOMO is one of the world’s leading mobile operators—in the Japanese market, the company is the clear market leader, used by over 50 per cent of the country’s mobile phone users. The Tata Teleservices Limited bouquet comprises four other brands as well—Virgin Mobile, Walky (which is the brand for fixed wireless phones), the Photon family (the company’s brand that provides a variety of options for wireless mobile broadband access, and T24. TTSL recently entered into a strategic partnership agreement with Indian retail giant Future Group to offer mobile telephony services under a new brand name—T24— on the GSM platform. The exciting new brand was unveiled in

February and the company announced the commercial launch of GSM operations under the brand name T24 in June, starting with the city of Hyderabad. It has now launched T24 GSM services in Kolkata and Bhubaneswar as well. Today, Tata Teleservices Ltd, along with Tata Teleservices (Maharashtra) Ltd, serves over 84 million customers in more than 450,000 towns and villages across the country, with a bouquet of telephony services encompassing Mobile Services, Wireless Desktop Phones, Public Booth Telephony and Wireline Services. In December 2008, Tata Teleservices announced a unique reverse equity swap strategic agreement between its telecom tower subsidiary, Wireless TT Info-Services Limited, and Quippo Telecom Infrastructure Limited—with the combined entity kicking off operations with 18,000 towers, thereby becoming the largest independent entity in this space—and with the highest tenancy ratios in the industry. Today, the combined entity— which has been re-christened as VIOM Networks—has a portfolio of nearly 45,000 towers. TTSL’s bouquet of telephony services includes mobile services, wireless desktop phones, public booth telephony, wireline services and enterprise solutions. Mumbai, January 11, 2011 – Tata Communications, a leading provider of a new world of communications, today announces that it has reached a definitive agreement to acquire BitGravity, an award winning content delivery network (CDN). BitGravity’s network and products accelerate the delivery of media assets to end-users and enables scalable, real-time video communications over the Internet. Upon successful completion of the transaction, Tata Communications (Netherlands) B.V. will own 100 percent BitGravity, Inc., which will operate as a wholly-owned subsidiary of Tata Communications. Terms of the transaction are not being disclosed. In 2008, Tata Communications entered into a strategic alliance with BitGravity that included the licensing BitGravity’s CDN technology and the federation of BitGravity’s and Tata Communications’ delivery networks. The company also made a strategic investment of $11.5mn in BitGravity. The alliance enabled Tata Communications’ to enter the market with its own global CDN in 2008 and has resulted in successful

traction with high profile media, content and gaming companies in Europe, Asia and India such as NDTV, IAH Games, Quick Heal Technologies and Nimbus Communications. “Two years ago, we made an investment in BitGravity to provide content delivery services for Tata Communications” said Genius Wong, Senior Vice President, Global Network Services, Tata Communications. “With the success we’ve seen in the marketplace and our ownership of BitGravity, we can now fully invest in the potential that exists around the globe and accelerate the delivery of new features and services to our customers”. “Tata Communications bet on BitGravity’s vision and people to provide innovative video services. We are ecstatic that this will be a positive outcome for all the stakeholders; we are equally excited about what this means for BitGravity and its products going forward,” said Perry Wu, CEO and co-founder of BitGravity. “As a combined entity, we can propel our position in the market, and the opportunity to accelerate our vision on a significantly larger scale was one we couldn’t pass up.” BitGravity, a privately held company located in Burlingame, California, was founded in mid-2006 and launched its services in 2008. The company’s innovative services made inroads with major media and Internet companies and has received numerous accolades including RedHerring 100, OnHollywood 100, DemoGod, and LightReading’s Service Company of the year. BitGravity initially raised a total of $13.5mn in two rounds of funding from angels and from Tata Communications.

About Tata Communications Tata Communications is a leading global provider of a new world of communications. With a leadership position in emerging markets, Tata Communications leverages its advanced solutions capabilities and domain expertise across its global and pan-India network to deliver managed solutions to multi-national enterprises, service providers and Indian consumers.

The Tata Communications Global Network includes one of the most advanced and largest submarine cable networks, a Tier-1 IP network, with connectivity to more than 200 countries across 400 PoPs, and nearly 1 million square feet of data center and collocation space worldwide. Tata Communications’ depth and breadth of reach in emerging markets includes leadership in Indian enterprise data services, leadership in global international voice, and strategic investments in operators in South Africa (Neotel), Sri Lanka (Tata Communications Lanka Limited), Nepal (United Telecom Limited).

TATA is a rapidly growing business group based in India with significant international operations. The TATA name is a unique asset representing leadership with trust. TATA Teleservices

spearheads the Group’s presence in the telecom sector. Incorporated in 1996, TATA Teleservices was the first to launch CDMA mobile services in India with the Andhra Pradesh circle. TATA Teleservices has established a robust and reliable 3G ready telecom infrastructure that ensures quality in its services. Customer satisfaction in telecommunications will reflect the service delivery process as experienced by customers. The interaction between customers and the delivery system is effected via alternative contact points; each one of them will be investigated for its impact on the overall customer satisfaction. That is, the service delivery system can be decomposed into alternative customer contact points that shape customers' overall judgment about the organization. Merger synergies Given the substantial amount of excess capital available in the sector and in private equity we expect to see additional merger and acquisition activity, albeit at a slower pace than recently witnessed. Global telecom M&A deals over the past two years have reflected market expansion but have also had a positive effect on the buyers’ balance sheets. Partnering companies have begun realizing their synergies through cost reductions and economies of scale. In the US, the largest three companies now account for over 70% of the sector market cap; this compares to 34% in 1990. Trends in bundled services are also paving the way for additional M&A activity. Sector consolidation will further increase the importance of stock selection.

Growth While cost-cutting has been a major source of earnings growth, we have seen top-line pressures decreasing which will help revenues become a larger driver of earnings growth again. We see growth within the sector coming from a number of areas including: broadband, 3G (third generation) technology, expansion in emerging markets. Broadband penetration has been accelerating as internet customers are seeking faster downloads for audio and video files. 3G services, which facilitate the simultaneous transfer of both voice and non-voice (i.e. video, downloads, SMS, etc.) data are providing mobile users with a much more robust communication platform and should finally begin to realize their growth potential in 2007. Emerging market companies benefit from low penetration rates and also tend to have lower leverage, higher margins and higher growth than most developed markets telecom companies. Going forward, the Group is focusing on new technologies and innovation to drive its business in India and internationally. The Nano car is one example, as is the Eka supercomputer (developed by another TATA company), which in 2008 is ranked the world.s fourth fastest. The Group aims to build a series of world class, world scale businesses in select sectors. Anchored

in India and wedded to its traditional values and strong ethics, the Group is building a multinational business which will achieve growth through excellence and innovation, while balancing the interests of its shareholders, its employees and wider society. CORE VALUES OF TATA Purpose At the TATA Group “ our purpose is to improve the quality of life of the communities we serve. We do this through leadership in sectors of national economic significance, to which the Group brings a unique set of capabilities. This requires us to grow aggressively in focused areas of business. Our heritage of returning to society what we earn evokes trust among consumers, employees, shareholders and the community. This heritage is being continuously enriched by the formalization of the high standards of behaviour expected from employees and companies”. The TATA name is a unique asset representing leadership with trust. Leveraging this asset to enhance Group synergy and becoming globally competitive is the route to sustained growth and long-term success. FIVE CORE VALUES The TATA Group has always sought to be a value-driven organization. These values continue to direct the Group’s

growth and businesses. The five core TATA values underpinning the way we do business are: Integrity: We must conduct our business fairly, with honesty and transparency. Everything we do must stand the test of public scrutiny. Understanding: We must be caring, show respect, compassion and humanity for our colleagues and customers around the world, and always work for the benefit of the communities we serve. Excellence: We must constantly strive to achieve the highest possible standards in our dayto-day work and in the quality of the goods and services we provide. Unity: We must work cohesively with our colleagues across the Group and with our customers and partners around the world, building strong relationships based on tolerance, understanding and mutual cooperation. Responsibility: We must continue to be responsible, sensitive to the countries, communities and environments in which we work, always ensuring that what comes from the people goes back to the people many times over. TATA Teleservices bouquet of telephony services includes Mobile services, Wireless Desktop Phones, Public Booth Telephony and Wireline services. Other services include value added services like voice portal, roaming, post-paid Internet

services, 3-way conferencing, group calling, Wi-Fi Internet, USB Modem, data cards, calling card services and enterprise services. Some of the other products launched by the company include prepaid wireless desktop phones, public phone booths, new mobile handsets and new voice & data services such as BREW games, Voice Portal, picture messaging, polyphonic ring tones, interactive applications like news, cricket, astrology, etc. TATA Indicom redefined the existing prepaid mobile market in India, by unveiling their offering . TATA Indicom.Non Stop Mobile. which allows customers to receive free incoming calls. TATA Teleservices today has India.s largest branded telecom retail chain and is the first service provider in the country to offer an online channel Http://www.ichoose.in to offer postpaid mobile connections in the country. TATA Teleservices has a strong workforce of 6000. In addition, TTSL has created more than 20,000 jobs, which will include 10,000 indirect jobs through outsourcing of its manpower needs. Tata Teleservices Maharashtra Limited (TTML) spearheads the Tata group's presence in the telephony sector in the telecom circles of Maharashtra and Goa including Mumbai. TTML commenced landline operations in 1998 and today has the largest wireline base in Mumbai and Maharashtra amongst all private operators, with over 600,000 subscribers, and with over

50% market share. It commenced full mobility wireless services on the CDMA-1X platform in 2004-5, and has over 11 million wireless subscribers today, with over 16.9% market share. It is also a market leader in wireless data cards, with its pioneering Plug2Surf 1-X data cards and its recent launch of mobile broadband services with Photon+. TTML’s network has been rated as the only congestion-free network across Maharashtra and Mumbai in 5 consecutive reports issued by the Telecom Regulatory Authority of India (TRAI). TTML has also recently been rated the No.1 wireless telecom service provider in terms of overall customer satisfaction across Mumbai and Maharashtra in independent studies commissioned by the Telecom Regulatory Authority of India. The Company has been responsible for a number of innovations over the years, including its market introductions last year of 1 GB memory USB wireless modems, the world’s first CDMA AM/FM Radio Phone, the Ganesha-motif Sumukha phone, the launch of the Novatium sub-$100 PC in Mumbai, and, for the first time, a 100 Mbps to the home ethernet-based broadband service called Power Launcher. Leveraging its high quality buried fibre Next Generation Network extending over 1600 kms in Mumbai, TTML recently announced its vision for Digital MumbaiTM – broadband anytime, anywhere, in Mumbai city. The Company has recently rolled out its GSM services under the brand name TATA DOCOMO in Mumbai, Maharashtra and Goa. With a full portfolio of products and services for different categories of retail and enterprise consumers, and an excellent network backed by good customer care, TTML is well positioned to lead the market in the years ahead. The Company is listed on the BSE and the NSE, and has over 500,000 shareholders. Its revenue for the fiscal 2008-9 was in excess of Rs. 2000 crores with an EBIDTA of around 29%. TATA Business Excellence Model Tata Business Excellence Model is a framework which helps companies to achieve excellence in their business performance.

This is the chosen model by the TATA group to help in building globally competitive organizations across TATA Group companies. TBEM is based on the Malcolm Balridge National Quality Award Model of the U.S. The Criteria have three important roles in strengthening competitiveness: • To help improve organizational performance practices, capabilities, and results • To facilitate communication and sharing of best practices information among all organisations within TATA Group. • To help in guiding organizational planning and opportunities for learning TBEM Criteria is designed to help organizations use an integrated approach to organisational performance management that results in • Delivery of ever-improving value to customers and stakeholders, contributing to organizational sustainability • Improvement of overall organisational effectiveness and capabilities • Organisational and personal learning The Criteria are built on the following set of 11 Interrelated Core Values and Concepts: • Visionary Leadership • Customer-driven Excellence • Organisational and Personal Learning • Valuing Employees and Partners • Agility • Focus on the Future • Managing for Innovation • Management by Fact • Social Responsibility • Focus on Results and Creating Value • Systems Perspective

The Core Values and Concepts are embodied in seven Categories, as follows: • Leadership • Strategic Planning • Customer and Market Focus • Measurement, Analysis, and Knowledge Management • Work force Focus • Process Management • Business Results The TBEM criteria are the operational details of the Core Values, applied to the different facets of a Business organisation. The 7 Criteria Categories are divided into 18 items and 32 Areas to Address The TBEM framework has the following characteristics • Focus on Business results • Non-prescriptive and Adaptable • Maintains System Perspective • Supports Goal based diagnosis TBEM instills a process centric approach in an organisation as a means to achieve the chosen Business Goals Tata Teleservices Limited as a part of the TATA Group has adopted the TATA Business Excellence model as an intricate part of its operation structure and uses it to grow from strength to strength, keeping Operational excellence and Business results in focus. Corporate Sustainability Working for the disadvantaged sections of the society is a way of life at the Tata Group. As Mr JRD Tata believed, “society is an important stakeholder in the development of any organization”. Social Responsibility has been central to the core values of the Tata group for over a century now—and Tata companies have not only been proactive on compliance with regulatory requirements, but have also had a farsighted vision in ensuring sustainability of business processes; restoration of biodiversity; and conserving wildlife where possible. Keeping in tune with the changing business, environmental and social scenarios, the Tata Group has adopted the term

‘Corporate sustainability’ instead of Corporate Social Responsibility. Sustainable livelihoods are the demand of all social initiatives in the Group. Tata Teleservices Ltd is a responsible corporate citizen, and strives to give back to the community it operates in. The main objective behind the CS initiatives of TTSL is to use telecom to impact the life of the underprivileged sections of society. The company endeavours to make a positive contribution to the community by supporting a wide range of socio-economic, educational and health initiatives. Keeping in mind the Tata Group guidelines and the objective mentioned above, we have identified and implemented many CS initiatives since 2006-end. Toward the end of 2008, with the then new TTSL Corporate Sustainability team having come on board, Tata Teleservices Limited began the process of joining the select few Tata Group companies that had put together their CS Big Picture. Under the guidance of the Tata Council for Community Initiatives, TTSL began work on this, and the ‘Big Picture’ was put together in mid-2008. Under the TTSL Big Picture (see image below), Education and Environment were identified as the two primary pillars for CS@TTSL, with all projects and activities stemming from there. That having been said, it was also decided that rather than put a stop to all the good work that many of TTSL’s 20 Circle offices were doing (but which were not aligned to the Big Picture), the CS team would let these carry on for the cause of continuity in the target communities, slowly bringing them under the pillars identified—the process of Big Picture Alignment at TTSL, thus, began. Tata Photon : Leaders in USB Modem and Wireless Internet Modems in India. STAY CONNECTED WHEREVER YOU ARE Now, stay connected to the internet from the comfort of your homes, offices, or wherever you are with Tata Indicom. Presenting Vdata Card & Tata Photon Whiz (USB Modem), 2 innovative solutions that function as a wireless network

connection, a mobile phone and a modem. All in one and that too, with attractive tariff plans. Tata Indicom introduces its High-Speed Internet Access called Tata Photon plus, which is a new Broadband wireless service for the business users and technology enthusiasts across India. Tata Photon is basically an improved name of Evolution Data Optimized (EVDO). At present this service is available in the limited cities and in addition to this it is reliant on the service signals of Proton+ whether or not are accessible in your region. Tata Photon is Tata Indicom’s Wireless Broadband facility, which offers great Internet wireless connectivity solutions. Features of Tata Photon+ • It is very convenient to handle • Quick installation and activation is possible • It supports Win Vista, Win XP and Win 2000 • It is compatible with Laptop and Desktop PC • It is to the most 20-times, faster than the prevailing wireless technology. • It offers a downlink speed of 3.1 MBPS, depending upon the day time and network strength. Also it offers an average-speed of 300 to 700 KBPS. This Tata Photon service can be easily available though Wireless Router and USB Modem. This service is not at all expensive, since it provides you with wireless freedom. The basic plan of Tata Photon commences with 0.5 GB download limit at Rs. 500 per month. You can also access the services of Tata Photon by making use of USB modems which will at first cost you around Rs. 3500. USB modem is the most appropriate choice for the Laptop or Home PC users. All you are required to do is to plug in the USB Modem into the Laptop and now

you can easily access the high-speed Internet connectivity. The wireless router would be best suited for the small organizations where the access of Internet on several computers is simultaneously required. Wireless router is very quick and easy to install, since it does not need any wire. In order to use the wireless router, you would simply have to install the device into your home or office. Services of Tata Photon • Easy to maintain. • Surf Intranet or Internet with high and consistent speed. • Send or receive SMS along with voice capabilities. • Stay connected transversely the network of Tata Indicom. This new invention by Tata Indicom enables an individual to experience the high-speed Internet facility from everywhere. Tata Photon Services are available in around 35 cities like Delhi, Mumbai, Ahmadabad, Chennai, Bangalore and Hyderabad are few among others. TATA SKY: History It is a joint venture between the Tata Group, that owns 80% and STAR Group that owns a 20% stake. Tata Sky was incorporated in 2004 but was launched only in 2006. It currently offers close to 196 channels (as of december 2010) and some interactive ones; this count includes some numbers off HD channels offered by Tata Sky (as Tata Sky-HD) and interactive services also. The company uses the Sky brand owned by British Sky Broadcasting. In October 2008, Tata Sky announced launching of DVR service Tata Sky+ which allowed 90 hours of recording in a MPEG-4 compatible Set

Top Box. The remote is provided with playback control keys and is being sold with special offers for existing suscribers. In 2008, Singapore-based Temasek Holdings picked up 10% stake in Tata Sky from the Tata Group. This has diluted Tata's stake in the venture to 75%. STAR’s parent company, News Corporation, owns an International group of DTH businesses that include Sky Italia in Italy and Foxtel in Australia. Tata Sky+ Tata Sky+ is a premium set-top box-cum-Personal Video Recorder or even known as DVR Digital Video Recorder that allows recording up to 130 hours of live TV, recording one programme while watching another, pause, fast-forward and rewind a live telecast and review a TV programme. Also Tata Sky+ provides service using MPEG-4 digital compression technology.Sky Pros. Tata Sky HD Tata Sky HD was launched on June 14, 2010, and has channels in their native resolution of 1080i or 720p. The STB is compatible with 5.1 CH surround sound as well. The service currently offers four HD channels National Geographic Channel HD, Discovery HD, Showcase HD (Pay Per View) , Star Plus HD (upscaled SD channel) and Neo Cricket HD (Event Based). More channels such as Star Movies HD and other popular sports channels in HD format are expected to be added soon. Certifications and Honours ISO 27001:2005 accreditation In March 2009, Tata Sky, became the first Indian direct-to-home (DTH) service provider to be awarded the ISO 27001:2005 accreditation, the benchmark for information security ISO 27001:2005 is an international standard that provides specifications and guidance for the establishment and proper maintenance of an Information Security Management System (ISMS). The assessment for the certification was conducted by Intertek Systems Certification, the management systems

business unit of Intertek Group. This certification confirms that every transaction carried out through Tata Sky’s IT systems are highly secure. Escalating competition in the direct-to-home (DTH) market has pushed up the project cost of Tata Sky, the joint venture between the Tata group and global media baron Rupert Murdoch's Star India, by a third. From the initially envisaged Rs 3,000 crore, Tata Sky's project cost has moved up to Rs 4,000 crore. "The subsidies involved in aggressive pricing are high. We have also brought forward certain futuristic projects, such as the introduction of personal video recorders. These have increased the project cost to Rs 4,000 crore, which we are prepared for. This is a long gestation infrastructure business requiring very large investments," Vikram Kaushik, managing director and chief executive officer, Tata Sky said to Televisionpoint.com. In 2007, the Tata group had brought in global private equity player Temasek by offloading 10 per cent stake in the company at a valuation of close to $ 55.5 million. The Tata group holds 70 per cent in the joint venture, while Star India holds the remaining 20 per cent. Tata Sky was forced to offer larger subsidies on set-top boxes, thanks to its rival Dish TV giving away free set-top boxes in May this year. Prior to that, Dish TV had started offering monthly subscription packages as low as Rs 100 per month unleashing a price war in the business that has only one more player, DD

Direct. In response, Tata Sky decided to offer higher subsidies on its set top boxes cutting the price paid by subscribers to Rs 1,499 from Rs 3,000. "We set a record by adding a million subscribers in 11 months and two million in 23 months. The problem that is emerging now is finding out what new subscribers are willing to pay. Having penetrated premium households across India, we now are addressing consumers who need to see the value proposition, which is why we have cut the price of our base package by 20 per cent and come out with t several add-on packages," Kaushik added. Kaushik claimed the company had spent a substantial sum on offering 10 proprietary interactive services to differentiate the service, since DTH regulations do not allow exclusivity of content. The company was also offering hefty subsidies to households with more than one Tata Sky connection. The monthly subscription package in this case was Rs 125 per month, instead of Rs 200 per month for the base package. A new base package price of Rs 100 too has been announced. The company is going in for aggressive branding; development of software and roll-out of subsidised personal video recorders, which, it believes, will change the paradigm for high-quality TV experiences. "We are setting up a separate distribution chain, dedicated staff for maintenance of these products and specialised back end staff for this offering," said Kaushik.

Despite the competitive market conditions emanating from price discounting by Sun TV (Rs 999 annual subscription package), entry of Reliance ADAG's Big TV and proposed entry of Bharti in the DTH business, Tata Sky's revenue target remains the same Rs 5,000 crore turnover in five years. This level of turnover was projected on an investment of Rs 3,000 crore. It began as the "Tata Computer Centre", for the company Tata Group whose main business was to provide computer services to other group companies. F C Kohli was the first general manager. JRD Tata was the first chairman, followed by Nani Palkhivala. One of TCS' first assignments was to provide punched card services to a sister concern, Tata Steel (then TISCO). It later bagged the country's first software project, the Inter-Branch Reconciliation System (IBRS) for the Central Bank of India. It also provided bureau services to Unit Trust of India, thus becoming one of the first companies to offer BPO services. In the early 1970s, Tata Consultancy Services started exporting its services. The company pioneered the global delivery model for IT services with its first offshore client in 1974. TCS's first international order came from Burroughs, one of the first business computer manufacturers. TCS was assigned to write code for the Burroughs machines for several US-based clients. This experience also helped TCS bag its first onsite project - the Institutional Group & Information Company (IGIC), a data centre for ten banks, which catered to two million customers in the US, assigned TCS the task of maintaining and upgrading its computer systems. In 1981, TCS set up India's first software research and development centre, the Tata Research Development and Design Center (TRDDC) . The first client-dedicated offshore development center was set up for Compaq (then Tandem) in 1985. In 1989, TCS delivered an electronic depository and trading system called SECOM for SIS SegaInterSettle, Switzerland. It was by far the most complex project undertaken by an Indian IT company. TCS

followed this up with System X for the Canadian Depository System and also automated the Johannesburg Stock Exchange (JSE). TCS associated with a Swiss partner, TKS Teknosoft, which it later acquired In the early 1990s, the Indian IT outsourcing industry grew tremendously due to the Y2K bug and the launch of a unified European currency, Euro. TCS pioneered the factory model for Y2K conversion and developed software tools which automated the conversion process and enabled third-party developers and clients to make use of it In 1999, TCS saw outsourcing opportunity in E-Commerce and related solutions and set up its E-Business division with ten people. By 2004, EBusiness was contributing half a billion dollars (US) to TCS On 9 August 2004, TCS became a publicly listed company much later than its rivals, Infosys, Wipro and Mahindra Satyam. During 2005, TCS ventured into a new area for an Indian IT services company - Bioinformatics[ In 2Tata Administrative Services (also known as TAS) is the in-house leadership training and development program for the Tata Group. It provides for group employees to be part of the administrative activities of various Tata group companies. The program was founded in 1956 and serves as a feeder for the leadership teams of the many Tata companies.[1] The program was started by J. R. D. Tata with the Tata Group relying on TAS for developing their elite management cadre. As such, TAS has been instrumental in developing most of the CEOs of the group companies.[2] Formerly known as the Tata Administrative Service, TAS was conceived by JRD Tata, the late chairman of the Tata group, in the 1950s. His dream was to select and groom some of the best young Indians, provide them opportunities for professional growth, and use that pool of talent as a group resource, one that could be tapped by companies across the Tata organisation.[citation needed]. Most companies today allow a degree of job rotation for career growth. TAS, essentially a training programme, is perhaps the only employment brand in Indian business that consciously recruits for lifelong mobility,

across companies, industries and functions, in order to impart that macro view of business which is critical in preparing young professionals for general management. To grow and renew the Tata talent pool continuously, TAS recruits young postgraduates from leading business schools each year and puts them through an intensive 12-month programme. The TAS manager has, as his or her career canvas, India's largest business house, with the widest range of industries and functions around which to plan and build a lifetime career of professional and personal growth. Tata values The TAS recruitment process at campuses strives to associate the Tata brand with values such as integrity, excellence and nation building, while highlighting the group's entrepreneurial spirit. TAS has been recast in recent years, with an increased focus on facilitating mobility across group companies. Over the past three years, concentrated communication, consistent engagement and competitive compensation packages have helped TAS regain and strengthen its position as an attractive employment destination for top talent. The programme's one-year training module, renamed 'group orientation and learning' (GOAL), emphasises structured orientation through classroom inputs and field visits. It builds TAS trainees' perspective on the seven core sectors of the Tata group, its current and future challenges, and its drive to become a truly global organisation. Training module The training module consists of four cross-functional, cross-business and cross-located assignments. These include three business stints of 15 weeks duration in sales and marketing, manufacturing and operations, and corporate strategy, finance and human resources. A seven-week rural assignment exposes the trainees to community work and rural India, helping instil in them a true picture of the life of ordinary Indians. Another facet of the module is the mentorship programme for TAS managers placed with group companies. This was initiated to create a platform for the personal and professional development of TAS managers post placement. Additionally, TAS managers are then taken through a development plan that lasts five years.

00Tata Teleservices is part of the Tata Group which employed Smritilekha Das. Tata Teleservices spearheads the Group’s presence in the telecom sector. Incorporated in 1996, Tata Teleservices was the first to launch CDMA mobile services in India with the Andhra Pradesh circle. The company acquired Hughes Telecom (India) Limited [now renamed Tata Teleservices (Maharashtra) Limited] in December 2002. With a total Investment of Rs 19,924 Crore, Tata Teleservices has created a Pan India presence spread across 20 circles that includes Andhra Pradesh, Chennai, Gujarat, J & K, Karnataka, Delhi, Maharashtra, Mumbai, North East, Tamil Nadu, Orissa, Bihar, Rajasthan, Punjab, Haryana, Himachal Pradesh, Uttar Pradesh (E), Uttar Pradesh (W), Kerala, Kolkata, Madhya Pradesh and West Bengal. Having pioneered the CDMA 3G1x technology platform in India, Tata Teleservices has established 3G ready telecom infrastructure. It partnered with Motorola, Ericsson, Lucent,Zte and ECI Telecom for the deployment of its telecom network. The company is the market leader in the fixed wireless telephony market with a total customer base of over 3.8 million. Tata Teleservices’ bouquet of telephony services includes Mobile services, Wireless Desktop Phones, Public Booth Telephony and Wireline services. Other services include value added services like voice portal, roaming, post-paid Internet services, 3-way conferencing, group calling, Wi-Fi Internet, USB Modem, data cards, calling card services and enterprise services. Some of the other products launched by the company include prepaid wireless desktop phones, public phone booths, new mobile handsets and new voice & data services such as BREW games, Voice Portal, picture messaging, polyphonic ring tones, interactive applications like news, cricket, astrology, etc. In collaboration with Tata Business Support Solutions, Tata Teleservices Ltd provided its expertise and infrastructure to provide call center and toll-free number facilities for the after-sales services of Tata Swach, a water purifier developed by Tata Chemicals. Tata Indicom "Non Stop Mobile" allows pre-paid cellular customers to receive free incoming calls.

Tata Teleservices Limited along with Tata Teleservices (Maharashtra) Limited have a subscriber base of 36 million customers (as of April 2009) in more than 5,000 towns. Tata Teleservices has also acquired GSM licenses for specific circles in India. Tata Telelservices is an unlisted entity. Tata Group and group firms own the majority of the company, NTT docomo holds 26% while investor C. Sivasankaran holds 8%., the company went through an internal restructuring exercise that executives claim would bring about agility to the organization. Senior management The Board of Directors for TTSL includes Tata Sons Chairman Ratan Tata, while the company is currently headed by its Managing Director, Mr. Anil Kumar Sardana Market data Tata Indicom in April 2009, crossed the 35 million subscribers mark in the wireless category with an overall subscriber base of over 36 million. Tata Teleservices is no. 2 slot in terms of Market Share in Delhi NCR region with a subscriber base of 5 million. Network Tata Teleservices operates primarily on the CDMA network. Tata Indicom’s enterprise solutions work on the CDMA 3G-1X technology. The total tower strength of Tata Indicom is currently at 18,500 towers nationwide. Business areas Tata Teleservices offers multiple tariff plans in both the Post-paid and Pre-Paid category. It also offers Mobile Value Added Services to subscribers. Branding

The Tata Indicom brand is endorsed by bollywood actress Kajol & cricketers Irfan Pathan and Yousuf Pathan. Tata Teleservices has recently launched the Virgin Mobile Brand to target the youth segment. Rural Telephony TTSL also maintains a distribution network across villages , where in people are appointed and trained by TTSL – who visit villages on a bicycle or a two-wheeler at defined times on defined days of the week, selling recharge vouchers and servicing equipment; each runner covers between 200 to 300 customers. The company joined hands with Tata Chemicals, Tata Kisaan Sansar network, disseminating information through these centres and using them as local distributors. Retail The company's retail business has around 3,000 outlets nationally, comprising 600 TTSL owned stores and around 2,500 stores in the Franchisee format. Tata Indicom already covers the top 700 towns in India in terms of population through Tata Indicom Exclusive Stores. Tata Indicom also maintains an online portal for its customers i-choose where the customers can buy Tata Indicom post-paid connections and prepaid recharge vouchers with an upfront commitment of activation and delivery of the handset within 72 hours. Value added services Tata Teleservices, in October 2007 launched Tata Zone, an infotainment portal on Tata Indicom BREW-enabled mobile phones, in Hindi. This service has applications, pricing details, downloads and browsing instructions in Hindi. The rationale behind this was simple: 66% of all Indians speak Hindi, while less than 5% understand English. Under its VAS bouquet, TTSL offers services such as News, Games, Faith and Prayers, Ringtones, Streaming TV, Fun Shows, Video Zone,

Song Download Express, Cricket, Internet Surfing, Astrology, and Mobile Office among others. Tata Indicom plans to provide m-commerce, mobile advertising and social networking under its VAS offerings. Tata Teleservices Limited (TTLS) (BSE: 532371) is a subsidiary of the Tata Group headquartered in Navi Mumbai, an Indian conglomerate. It operates under the brand name Tata Indicom in various telecom circles of India. In Nov 2008, Japanese telecom giant NTT Docomo picked up a 26 per cent equity stake in Tata Teleservices for about Rs 13,070 crore ($2.7 billion) or an enterprise value of Rs 50,269 crore ($10.38 billion).[1] In Feb 2008, TTSL announced that it would provide CDMA mobile services targeted towards the youth, in association with the Virgin Group on a Franchisee model basis. Tata Teleservices Provides mobile services under 3 Brand names:
• • • •

Tata Indicom (CDMA Mobile operator) Tata DoCoMo (GSM Mobile operator) Virgin Mobile (CDMA Mobile operator) Virgin Mobile (GSM Mobile operator)

Modern growth A large population, low telephony penetration levels, and a rise in consumers' income and spending owing to strong economic growth have helped make India the fastest-growing telecom market in the world. The first operator is the state-owned incumbent BSNL. BSNL was created by corporatization of the erstwhile Indian Telecommunication Service, a government unit responsible for provision of telephony services. Subsequently, after the telecommunication policies were revised to allow private operators, companies such as Vodafone, Bharti Airtel, Tata Indicom, Idea Cellular, Aircel and Loop Mobile have entered the space. see mobile operators in India. In 2008-09, rural India outpaced urban India in mobile growth rate. Bharti Airtel now is the largest telecom company in India. India's mobile phone market is the fastest growing in the world, with companies adding some 18.98 million new customers in Oct 2010.

The total number of telephones in the country crossed the 742.12 million mark on Oct 31st, 2010. The overall tele-density has increased to 62.31% by Oct 31st 2010.[5] In the wireless segment, 18.98 million subscribers were added in Oct 2010. The total wireless subscribers (GSM, CDMA & WLL (F)) base is more than 706 million now. The wireline segment subscriber base stood at 35.43 million with a decline of 0.14 million as of Oct 31st 2010. History Telecom in the real sense means transfer of information between two distant points in space. The popular meaning of telecom always involves electrical signals and nowadays people exclude postal or any other raw telecommunication methods from its meaning. Therefore, the history of Indian telecom can be started with the introduction of telegraph. Introduction of telegraph 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 Harbor. 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,[14] at that time. Construction of 4,000 miles (6,400 km) of telegraph lines connecting Kolkata (Calcutta) and Peshawar in the north along with Agra, Mumbai (Bombay) through Sindwa Ghats, and Chennai in the south, as well as Ootacamund and Bangalore was started in November 1853. Dr. William O'Shaughnessy, who pioneered telegraph and telephone in India, belonged to the Public Works Department. He worked towards the development of telecom throughout this period. A separate department was opened in 1854 when telegraph facilities were opened to the public. Introduction of the telephone 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 Calcutta, Bombay, 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 Exchanges in Calcutta, Bombay and Madras. The exchange in Calcutta 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. Further developments

A Mobile Phone Tower.
• • • •

• • •

1902 - First wireless telegraph station established between Sagar Islands and Sandheads. 1907 - First Central Battery of telephones introduced in Kanpur. 1913-1914 - First Automatic Exchange installed in Shimla. 23 July 1927 - Radio-telegraph system between the UK and India, with Imperial Wireless Chain beam stations at Khadki and Daund, inaugurated by Lord Irwin by exchanging greetings with King George V. 1933 - Radiotelephone system inaugurated between the UK and India. 1953 - 12 channel carrier system introduced. 1960 - First subscriber trunk dialing route commissioned between Lucknow and Kanpur.

• • • • • • •

1975 - First PCM system commissioned between Mumbai City and Andheri telephone exchanges. 1976 - First digital microwave junction introduced. 1979 - First optical fibre system for local junction commissioned at Pune. 1980 - First satellite earth station for domestic communications established at Secunderabad, A.P.. 1983 - First analog Stored Program Control exchange for trunk lines commissioned at Mumbai. 1984 - C-DOT established for indigenous development and production of digital exchanges. 1995 - First mobile telephone service started on non-commercial basis on 15 August 1995 in Delhi.

While all the major cities and towns in the country were linked with telephones during the British period, the total number of telephones in 1948 was only around 80,000. Even after independence, growth was extremely slow. The telephone was a status symbol rather than being an instrument of utility. The number of telephones grew leisurely to 980,000 in 1971, 2.15 million in 1981 and 5.07 million in 1991, the year economic reforms were initiated in the country. While certain innovative steps were taken from time to time, as for example introduction of the telex service in Mumbai in 1953 and commissioning of the first [subscriber trunk dialing] route between Delhi and Kanpur and between Lucknow and Kanpur in 1960, the first waves of change were set going by Sam Pitroda in the eighties.[16] He brought in a whiff of fresh air. The real transformation in scenario came with the announcement of the National Telecom Policy in 1994.[17] Indian telecom sector: recent policies
• •

All the villages shall be covered by telecom facility by the end of 2002. The Communication Convergence Bill 2001introduced in the Parliament on August 31, 2001 is presently before the Standing Committee of Parliament on Telecom and IT. National Long Distance Service (NLD) is opened for unrestricted entry.

• • •

• • • • •

The International Long Distance Services (ILDS) have been opened to competition. The basic services are open to competition. In addition to the existing three, fourth cellular operator, one each in four metros and thirteen circles, has been permitted. The cellular operators have been permitted to provide all types of mobile services including voice and non-voice messages, data services and Public Call Office PCOs utilizing any type of network equipment, including circuit and/or package switches that meet certain required standards. Policies allowing private participation have been announced as per the New Telecom Policy (NTP), 1999 in several new services, which include Global Mobile Personal Communication by Satellite (GMPCS) Service, digital Public Mobile Radio Trunked Service (PMRTS), Voice Mail/ Audiotex/ Unified Messaging Service. Wireless in Local Loop (WLL) has been introduced for providing telephone connections in urban, semi-urban and rural areas promptly. Two telecom PSUs, VSNL and HTL have been disinvested. Steps are being taken to fulfill Universal Service Obligation (USO), its funding and administration. A decision to permit Community Phone Service has been announced. Multiple Fixed Service Providers (FSPs) licensing guidelines were announced. Internet Service Providers (ISPs) have been allowed to set up International Internet Gateways, both Satellite and Landing stations for submarine optical fiber cables. Two categories of infrastructure providers have been allowed to provide end-to-end bandwidth and dark fiber, right of way, towers, duct space etc. Guidelines have been issued by the Government to open up Internet telephony (IP).

Emergence as a major player In 1975, the Department of Telecom (DoT) was separated from Indian Post & Telecommunication Accounts and Finance Service. 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 corporatised 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. Privatization of telcommunications in India The Indian government was composed of many factions (parties) which had different ideologies. Some of them were willing to throw open the market to foreign players (the centrists) and others wanted the government to regulate infrastructure and restrict the involvement of foreign players. Due to this political background it was very difficult to bring about liberalization in telecommunications. When a bill was in parliament a majority vote had to be passed, and such a majority was difficult to obtain, given to the number of parties having different ideologies. 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 Non-resident Indian 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.[18] The demand for telephones was ever increasing. It was during this period that the Narsimha Rao-led government introduced the national telecommunications policy [NTP] in 1994 which brought changes in the following areas: ownership, service and regulation of

telecommunications infrastructure. They were also successful in establishing joint ventures between state owned telecom companies and international players. But still complete ownership of facilities was restricted only to the government owned organizations. Foreign firms were eligible to 49% of the total stake. The multi-nationals were just involved in technology transfer, and not policy making.[18] During this period, the World Bank and ITU had advised the Indian Government to liberalize long distance services in order to release the monopoly of the state owned DoT and VSNL; and to enable competition in the long distance carrier business which would help reduce tariff's and better the economy of the country. The Rao run government instead liberalized the local services, taking the opposite political parties into confidence and assuring foreign involvement in the long distance business after 5 years. The country was divided into 20 telecommunication circles for basic telephony and 18 circles for mobile services. These circles were divided into category A, B and C depending on the value of the revenue in each circle. The government threw open the bids to one private company per circle along with government owned DoT per circle. For cellular service two service providers were allowed per circle and a 15 years license was given to each provider. During all these improvements, the government did face oppositions from ITI, DoT, MTNL, VSNL and other labor unions, but they managed to keep away from all the hurdles.[18] After 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. Domestic business groups wanted the government to privatize VSNL. Finally in April 2002, the government decided to cut its stake of 53% to 26% in VSNL and to throw it open for sale to private enterprises. TATA finally took 25% stake in VSNL.[18]

This was a gateway to many foreign investors to get entry into the Indian Telecom Markets. After March 2000, the government became more liberal in making policies and issuing licenses to private operators. The government further reduced license fees for cellular service providers and increased the allowable stake to 74% for foreign companies. Because of all these factors, the service fees finally reduced and the call costs were cut greatly enabling every common middle class family in India to afford a cell phone. Nearly 32 million handsets were sold in India. The data reveals the real potential for growth of the Indian mobile market.[19] In March 2008 the total GSM and CDMA mobile subscriber base in the country was 375 million, which represented a nearly 50% growth when compared with previous year.[20] As the unbranded Chinese cell phones which do not have International Mobile Equipment Identity (IMEI) numbers pose a serious security risk to the country, Mobile network operators therefore planned to suspend the usage of around 30 million mobile phones (about 8 % of all mobiles in the country) by 30 April.[21] 5–6 years the average monthly subscribers additions were around 0.05 to 0.1 million only and the total mobile subscribers base in December 2002 stood at 10.5 millions. However, after a number of proactive initiatives were taken by regulators and licensors, the total number of mobile subscribers has increased greatly to 706.69 million subscribers as of Oct 31st 2010.[5][22] India has opted for the use of both the GSM (global system for mobile communications) and CDMA (code-division multiple access) technologies in the mobile sector. In addition to landline and mobile phones, some of the companies also provide the WLL service. The mobile tariffs in India have also become lowest in the world. A new mobile connection can be activated with a monthly commitment of US$0.15 only. In 2005 alone additions increased to around 2 million per month in the year 2003-04 and 2004-05.[citation needed] In June 2009, the Government of India banned the import of several mobile phones manufactured in China citing concerns over quality and the lack of IMEI's which make it difficult for authorities in India to track the sale and use of such phones.[23] In April 2010, the Government was also reported to be blocking Indian service providers from purchasing Chinese mobile technology citing concerns that Chinese

hackers could compromise the Indian telecommunications network during times of national emergency. A series of attacks on Indian government websites and computer networks by suspected Chinese hackers has also made Indian regulators suspicious with regards to the import of potentially sensitive equipment from China. The companies reported to be affected by this are Huawei Technologies and ZTE.[24][25]
[26]

Telecommunications Regulatory Environment in India LIRNEasia's Telecommunications Regulatory Environment (TRE) index, which summarizes stakeholders’ perception on certain TRE dimensions, provides insight into how conducive the environment is for further development and progress. The most recent survey was conducted in July 2008 in eight Asian countries, including Bangladesh, India, Indonesia, Sri Lanka, Maldives, Pakistan, Thailand, and the Philippines. The tool measured seven dimensions: i) market entry; ii) access to scarce resources; iii) interconnection; iv) tariff regulation; v) anti-competitive practices; and vi) universal services; vii) quality of service, for the fixed, mobile and broadband sectors. The results for India, point out to the fact that the stakeholders perceive the TRE to be most conducive for the mobile sector followed by fixed and then broadband. Other than for Access to Scarce Resources the fixed sector lags behind the mobile sector. The fixed and mobile sectors have the highest scores for Tariff Regulation. Market entry also scores well for the mobile sector as competition is well entrenched with most of the circles with 4-5 mobile service providers. The broadband sector has the lowest score in the aggregate. The low penetration of broadband of mere 3.87 against the policy objective of 9 million at then end of 2007 clearly indicates that the regulatory environment is not very conducive.
[27]

Revenue and growth The total revenue in the telecom service sector was 86,720 crore (US$18.8 billion) in 2005-06 as against 71,674 crore (US$15.6 billion) in 2004-2005, registering a growth of 21%. The total investment in the telecom services sector reached 200,660 crore (US$43.5 billion) in 200506, up from 178,831 crore (US$38.8 billion) in the previous fiscal.[28]

Telecommunication is the lifeline of the rapidly growing Information Technology industry. Internet subscriber base has risen to 100 million in 2010.[29] Out of this 10.52 million were broadband connections.[5] More than a billion people use the internet globally. Under the Bharat Nirman Programme, the Government of India will ensure that 66,822 revenue villages in the country, which have not yet been provided with a Village Public Telephone (VPT), will be connected. However doubts have been raised about what it would mean for the poor in the country.[30] It is difficult to ascertain fully the employment potential of the telecom sector but the enormity of the opportunities can be gauged from the fact that there were 3.7 million Public Call Offices in December 2005[31] up from 2.3 million in December 2004. The value added services (VAS) market within the mobile industry in India has the potential to grow from US$500 million in 2006 to a whopping US$10 billion by 2009.[32] Emergence as a major player In 1975, the Department of Telecom (DoT) was separated from Indian Post & Telecommunication Accounts and Finance Service. 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 corporatised 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. Privatization of telcommunications in India The Indian government was composed of many factions (parties) which had different ideologies. Some of them were willing to throw open the market to foreign players (the centrists) and others wanted the

government to regulate infrastructure and restrict the involvement of foreign players. Due to this political background it was very difficult to bring about liberalization in telecommunications. When a bill was in parliament a majority vote had to be passed, and such a majority was difficult to obtain, given to the number of parties having different ideologies. 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 Non-resident Indian 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.[18] The demand for telephones was ever increasing. It was during this period that the Narsimha Rao-led government introduced the national telecommunications policy [NTP] in 1994 which brought changes in the following areas: ownership, service and regulation of telecommunications infrastructure. They were also successful in establishing joint ventures between state owned telecom companies and international players. But still complete ownership of facilities was restricted only to the government owned organizations. Foreign firms were eligible to 49% of the total stake. The multi-nationals were just involved in technology transfer, and not policy making.[18] During this period, the World Bank and ITU had advised the Indian Government to liberalize long distance services in order to release the monopoly of the state owned DoT and VSNL; and to enable competition in the long distance carrier business which would help reduce tariff's and better the economy of the country. The Rao run government instead liberalized the local services, taking the opposite political parties into confidence and assuring foreign involvement in the long distance business after 5 years. The country was divided into 20 telecommunication circles for basic telephony and 18 circles for mobile

services. These circles were divided into category A, B and C depending on the value of the revenue in each circle. The government threw open the bids to one private company per circle along with government owned DoT per circle. For cellular service two service providers were allowed per circle and a 15 years license was given to each provider. During all these improvements, the government did face oppositions from ITI, DoT, MTNL, VSNL and other labor unions, but they managed to keep away from all the hurdles.[18] After 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. Domestic business groups wanted the government to privatize VSNL. Finally in April 2002, the government decided to cut its stake of 53% to 26% in VSNL and to throw it open for sale to private enterprises. TATA finally took 25% stake in VSNL.[18] This was a gateway to many foreign investors to get entry into the Indian Telecom Markets. After March 2000, the government became more liberal in making policies and issuing licenses to private operators. The government further reduced license fees for cellular service providers and increased the allowable stake to 74% for foreign companies. Because of all these factors, the service fees finally reduced and the call costs were cut greatly enabling every common middle class family in India to afford a cell phone. Nearly 32 million handsets were sold in India. The data reveals the real potential for growth of the Indian mobile market.[19] In March 2008 the total GSM and CDMA mobile subscriber base in the country was 375 million, which represented a nearly 50% growth when compared with previous year.[20] As the unbranded Chinese cell phones which do not have International Mobile Equipment Identity (IMEI) numbers pose a serious security risk to the country, Mobile network operators therefore planned to suspend the usage of around 30 million

mobile phones (about 8 % of all mobiles in the country) by 30 April.[21] 5–6 years the average monthly subscribers additions were around 0.05 to 0.1 million only and the total mobile subscribers base in December 2002 stood at 10.5 millions. However, after a number of proactive initiatives were taken by regulators and licensors, the total number of mobile subscribers has increased greatly to 706.69 million subscribers as of Oct 31st 2010.[5][22] India has opted for the use of both the GSM (global system for mobile communications) and CDMA (code-division multiple access) technologies in the mobile sector. In addition to landline and mobile phones, some of the companies also provide the WLL service. The mobile tariffs in India have also become lowest in the world. A new mobile connection can be activated with a monthly commitment of US$0.15 only. In 2005 alone additions increased to around 2 million per month in the year 2003-04 and 2004-05.[citation needed] In June 2009, the Government of India banned the import of several mobile phones manufactured in China citing concerns over quality and the lack of IMEI's which make it difficult for authorities in India to track the sale and use of such phones.[23] In April 2010, the Government was also reported to be blocking Indian service providers from purchasing Chinese mobile technology citing concerns that Chinese hackers could compromise the Indian telecommunications network during times of national emergency. A series of attacks on Indian government websites and computer networks by suspected Chinese hackers has also made Indian regulators suspicious with regards to the import of potentially sensitive equipment from China. The companies reported to be affected by this are Huawei Technologies and ZTE.[24][25]
[26]

Telecommunications Regulatory Environment in India LIRNEasia's Telecommunications Regulatory Environment (TRE) index, which summarizes stakeholders’ perception on certain TRE dimensions, provides insight into how conducive the environment is for further development and progress. The most recent survey was conducted in July 2008 in eight Asian countries, including Bangladesh, India, Indonesia, Sri Lanka, Maldives, Pakistan, Thailand, and the Philippines. The tool measured seven dimensions: i) market entry; ii)

access to scarce resources; iii) interconnection; iv) tariff regulation; v) anti-competitive practices; and vi) universal services; vii) quality of service, for the fixed, mobile and broadband sectors. The results for India, point out to the fact that the stakeholders perceive the TRE to be most conducive for the mobile sector followed by fixed and then broadband. Other than for Access to Scarce Resources the fixed sector lags behind the mobile sector. The fixed and mobile sectors have the highest scores for Tariff Regulation. Market entry also scores well for the mobile sector as competition is well entrenched with most of the circles with 4-5 mobile service providers. The broadband sector has the lowest score in the aggregate. The low penetration of broadband of mere 3.87 against the policy objective of 9 million at then end of 2007 clearly indicates that the regulatory environment is not very conducive.
[27]

Revenue and growth The total revenue in the telecom service sector was 86,720 crore (US$18.8 billion) in 2005-06 as against 71,674 crore (US$15.6 billion) in 2004-2005, registering a growth of 21%. The total investment in the telecom services sector reached 200,660 crore (US$43.5 billion) in 200506, up from 178,831 crore (US$38.8 billion) in the previous fiscal.[28] Telecommunication is the lifeline of the rapidly growing Information Technology industry. Internet subscriber base has risen to 100 million in 2010.[29] Out of this 10.52 million were broadband connections.[5] More than a billion people use the internet globally. Under the Bharat Nirman Programme, the Government of India will ensure that 66,822 revenue villages in the country, which have not yet been provided with a Village Public Telephone (VPT), will be connected. However doubts have been raised about what it would mean for the poor in the country.[30] It is difficult to ascertain fully the employment potential of the telecom sector but the enormity of the opportunities can be gauged from the fact that there were 3.7 million Public Call Offices in December 2005[31] up from 2.3 million in December 2004.

The value added services (VAS) market within the mobile industry in India has the potential to grow from US$500 million in 2006 to a whopping US$10 billion by 2009.[32] Telephone On landlines, intra-circle calls are considered local calls while intercircle are considered long distance calls. Currently Government is working to integrate the whole country in one telecom circle. For long distance calls, the area code prefixed with a zero is dialed first which is then followed by the number (i.e. To call Delhi, 011 would be dialed first followed by the phone number). For international calls, "00" must be dialed first followed by the country code, area code and local phone number. The country code for India is 91. Telephone Subscribers (Wireless and Landline): 742.12 million (Oct 2010) [5] Land Lines: 35.43 million (Oct 2010)[5] Cell phones: 706.69 million (Oct 2010) [5] Yearly Cell phone Addition: 218.29 million (Oct 2009-10)[5] Monthly Cell phone Addition: 18.98 million (Oct 2010) [5] Teledensity: 62.51 % (Oct 2010) [5] Projected Teledensity: 1 billion, 84% of population by 2012.[33] Mobile telephones See also: List of mobile network operators of India With a subscriber base of more than 680 million,[5] the Mobile telecommunications system in India is the second largest in the world and it was thrown open to private players in the 1990s. The country is divided into multiple zones, called circles (roughly along state boundaries). Government and several private players run local and long distance telephone services. Competition has caused prices to drop and calls across India are one of the cheapest in the world.[34] The rates are supposed to go down further with new measures to be taken by the

Information Ministry.[35] In September 2004, the number of mobile phone connections crossed the number of fixed-line connections and presently dwarfs the wireline segment by a ratio of around 20:1.[5] The mobile subscriber base has grown by a factor of over a hundred and thirty, from 5 million subscribers in 2001 to over 680 million subscribers as of Sep 2010 [5] (a period of less than 9 years) . India primarily follows the GSM mobile system, in the 900 MHz band. Recent operators also operate in the 1800 MHz band. The dominant players are Airtel, Reliance Infocomm, Vodafone, Idea cellular and BSNL/MTNL. There are many smaller players, with operations in only a few states. International roaming agreements exist between most operators and many foreign carriers. India is divided into 23 telecom circles. They are listed below:[36]
• • • • • • • • • • • • • • • • • • • • • • •

Assam Andhra Pradesh Bihar & Jharkhand Chennai Delhi & NCR Gujarat & Daman & Diu Haryana Himachal Pradesh Jammu and Kashmir Karnataka Kerala & Lakshadweep Kolkata Madhya Pradesh & Chhattisgarh Maharashtra (excluding Mumbai) & Goa Mumbai North Eastern States (Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, & Tripura) Orissa Punjab Rajasthan Tamil Nadu excluding Chennai & Puducherry Eastern Uttar Pradesh Western Uttar Pradesh & Uttarakhand West Bengal (excluding Kolkata), Andaman & Nicobar Islands & Sikkim

History of telecom industry in India The history of telephone services in India found its beginning when a 50-line manual telephone exchange was commissioned in Kolkata in the year 1882 in less than five years after Alexander Graham Bell invented the telephone. While India became independent in the year 1947, the country had about 82,000 telephone connections, which slowly rose up to 3.05 million by the year 1984. The telecom sector in India was a government monopoly until the year 1994 when liberalization was gradually unrolled. For the first time, cellular services were launched in India in Kolkata in the year 1995. An Overview of the Telecommunication Industry in India

A mobile handset Talking of telecommunications sector in India today, we can primarily identify two segments namely Fixed Service Provider (FSPs) and Cellular Services. Some of the essential and basic telecom services forming part of Indian telecom industry include telephone, radio, television and Internet. Telecom industry in the country lays a special emphasis on some of the advanced and the latest technical innovations like GSM( Global System for Mobile Communications), CDMA(Code Division Multiple Access), PMRTS(Public Mobile Radio Trunking Services), Fixed Line and WLL(Wireless Local Loop ). Especially, India has a flourishing market in GSM mobile service, while the number of subscribers is on rapid and dramatic increase. The Indian telecommunications industry boasts as being one among the most rapidly growing chunks on the globe. Experts around the world estimate that India holds the promise of emerging as the second largest telecom market of the world. Figures published by the Telecom Regulatory Authority of India (TRAI), reveal that the number of telecom connection subscribers in India reached 562.21 million in December 2009, marking a 3.5 percent increase over the number 543.20 million reported in November 2009. This figure indicates that the average teledensity (number of telephones per 100 persons) has gone up to 47.89. On account of a dramatic increase in the earnings from mobile and landline connections, the telecom industry in India made revenue of US$ 8.56 billion during the quarter ending on December 31, 2009 thereby witnessing a recovery from the economic downturn. Business Monitor International has stated that at present, India is adding up about 8-10 million mobile subscribers every succeeding month. Estimates have revealed that by June2012, almost half India’s population will be in possession of a mobile phone. This will result in about 612 million mobile subscribers, making up a teledensity of about 51 per cent by the year 2012. Over and above, a study undertaken by Nokia has brought out that the communications sector will grow as the single largest chunk of the India’s GDP making up about 15.4 per cent by the year 2014.

Estimates made in February 2009 show that the Indian equipment market valued at US$ 24 billion, while Nokia was glowing as the market leader reporting more than US$ 3.4 billion revenues in 2008-09. Ericsson followed Nokia with revenue of about US$ 2.11 billion. The latest reports published by Evalueserve state that the availability of the 3G spectrum has given hopes of finding about 275 million Indian subscribers using 3G-enabled services. This will take up the number of 3G-enabled handsets to reach near to 395 million by the end of 2013. A Frost & Sullivan industry analyst has predicted that by the year 2012, revenues from fixed line subscriptions in India will reach up to US$ 12.2 billion, while the revenue from mobile connections will reach up to US$ 39.8 billion. In a significant step taken to boost up the auction of 3G spectrum, the Indian Government has permitted prospective bidders to call for shortterm funds from the domestic market in the country, while allowing refinancing out of external commercial borrowings (ECBs) within a period of 12 months. Estimates show that the government can mop up US$ 7.53 billion from the auction of 3G spectrum to be completed shortly. The reserve price has been fixed at US$ 753.74 million. BSNL, the state-managed telecom operator has introduced 3G services in more than 318 cities benefitting 856,000 subscribers. BSNL has been venturing to cross more than 400 cities in the near future eventually rolling this service across 760 cities by September 2010. While the debate on 3G is seen continuing, TRAI has already started consulting on the next higher level of telecom services. 4G or the fourth generation enables downloads faster than all the earlier versions. Today, India is the largest market in the world adding up a dramatic number of about 20 million mobile subscriber lines every month in an average. On the other hand, the number of landlines is found gradually decreasing. At the end of the first quarter in 2010, we find that the overall telecom subscriber penetration has gone up by more than 52 %. Though this might occur as a relatively low volume compared with a number of other nations, this comes as a quantum leap noting the figures recorded a few years back. Mumbai and Delhi (NCR) enjoy the status among a few other metro areas around the globe boasting of

more than 25 m mobile subscribers in each of these regions. At present, The FDI cap in the telecom sector in India is 74 %. In a recent move, UK’s Vodafone Group has purchased a 52 % stake in Hutchison Essar, the fourth largest mobile service provider in the country. Bharti Airtel has the credit of being the first Indian operator to cross a subscriber base of 50 million. It is predicted that mobile number portability (MNP) will be available throughout India by the second quarter of 2010, initially in the cities of Chennai, Delhi, Kolkata and Mumbai, the four metros of India. Also, 3G (third generation) mobile services are found being introduced in all the major cities across the nation. The country has auctioned three 3G spectrum slots to private bidders. However, the number of subscribers for broadband connections is increasing at a slow pace.

Fixed-line Telephony

Public Players
o

Subscribers Subscribers

Private Players
o

Mobile Telephony

Public Players
o

Subscribers Subscribers

Private Players
o

Internet Investment The Indian telecom sector can be broadly classified into Fixed Line Telephonyand mobile telephony. The major players of the telecom sector are experiencing a fierce competition in both the segments. The major players like BSNL, MTNL, VSNL in the fixed line and Airtel, Hutch, Idea, Tata, Reliance in the mobile segment are coming up with new tariffs and discount schemes to gain the competitive advantage. 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.

Market

shares

of

public

and

Private

Players

Both fixed line and mobile segments serve the basic needs of local calls, long distance calls and the

international calls, with the provision of broadband services in the fixed line segment and GPRS in the mobile replaced up with arena. by Traditional the telephones and have been codeless the wireless

instruments. Mobile phone providers have also come GPRS-enabled multimedia messaging, Internet surfing, and mobile-commerce. The muchawaited 3G mobile technology is soon going to enter the Indian telecom market. The GSM, CDMA, WLL service providers are all upgrading themselves to provide 3G mobile services.

Along with improvement in telecom services, there is also an improvement in manufacturing. In the beginning, there were only the Siemens handsets in India but now a whole series of new handsets, such as Nokia's latest N-series, Sony Ericsson's W-series, Motorola's PDA phones, etc. have come up. Touch screen and advanced technological handsets are gaining popularity. Radio services have also been incorporated in the mobile handsets, along with other applications like high storage memory, multimedia applications, multimedia games, MP3 Players, video generators, Camera's, etc. The value added services provided by the mobile service operators contribute more than 10% of the total revenue.

The

leading

cellular

service

providers

have

the

following number of subscribers: Service Provider Reliance Tata Airtel MTNL BSNL Hutch Idea Spice BPL Aircel No. of CDMA Subscribers 2.75 crores 1.07 crores 3.37 crores 24.98 lakhs 2.44 crores 2.44 crores 1.3 crores 25.56 lakhs 10.62 lakhs 48 lakhs No. of GSM Subscribers 38.76 lakhs

Bharti Airtel has the largest customer base with 31% market share, followed by Hutch and BSNL with each holding 22% market share.

The 2007 budget has brought further relief to the customers with the reduction in the tariffs, both local and long distance, and with slashing down the roaming rentals. This is likely to lead to even more people going for cellular services and more and more

use of the value added services. However, landline telephony is likely to remain popular, too, in the foreseeable future. MTNL, the largest landline service provider, has recently taken some bold initiatives to retain its market share and, if possible, expand it.

Indian Telecom Analysis (2008-2012) Telecom industry in India has undergone a revolution in the recent years. The country is ranked second worldwide in terms of having the largest telecommunication network, after China. With the ongoing investments into infrastructure deployment, the country is projected to see high penetration of Internet, broadband and mobile subscribers. According to our new analytical study on the sector “Indian Telecom Analysis (2008-2012)”, mobile telephony continues to fuel growth of the Indian telecom sector, with mobile subscribers projected to grow at a CAGR of around 11% between 2009-10 and 2013-14. Other segments of the industry such as Internet and broadband are also anticipated to witness strong growth in terms of both subscriber addition and network infrastructure deployment over the forecast period. Tele-density in India has improved significantly over the recent years and has reached around 51% in the fiscal year 2009-10, owing to improving network infrastructure. The launch of advanced telecom services like 3G and IPTV will also drive the growth in Indian telecom subscriber base over the forecast period. Furthermore, mobile handset market is also expected to register a robust growth in near future. In this regard, our report provides rational analysis of the factors which are driving the growth of mobile handset market in India. Also, various factors driving the overall telecom market in market have been

thoroughly

analyzed

in

the

report.

The report provides a detailed study of the Indian telecom sector and gives an analysis of the competitive environment prevailing in the industry. The report thoroughly studies fixed, mobile, Internet and broadband markets in terms of players and number of subscribers. It also presents the future outlook of the Indian telecom sector to help clients identify the growth opportunities in the market.

External Factors

–Government & Social Telecommunications in India were introduced in 1851 when the British Raj first laid telegraph lines near Calcutta. Later, in 1881, the telephone was invented by Graham Bell and British firms introduced what was then known as POTS (Plain Old Telephone Services) into the colony. By the time India achieved independence in 1947, the country had 321 telephone exchanges in urban areas with a tele-density of just about 0.25 phones per 1000 people. Telecommunication has been a state subject since independence, especially till the mid 80s, when the government controlled all the aspects of the sector through the ministry of Posts and Telegraphs as a natural monopoly. Telephones continued to be looked upon more as a luxury than as an essential means of communication that could benefit business and administration. The result was a concentration of telephones around urban and metropolitan centres. Policy makers however, shifted their stand on telephones being a luxury rather than an essential infrastructural tool for efficient business and economic growth in the seventh 5 year plan (1985 to 1990). Thus began the real development of telecommunications in the country. After a long and extended debate over the ineffective development of the telecommunication in the country, the Public Accounts Committee of the Lok Sabha recommended a complete overhaul of telecommunications and a long sought after reorganisation was undertaken in 1986 to split the public, postal and telecom operations into separate departments.

The growth of telecommunications in the real sense began with the late prime minister, Rajiv Gandhi initiating the liberalisation of the sector firstly by demonopolizing telecom equipment manufacturing in 1985. This allowed private firms to manufacture telephones, while the Department of Telecommunications (DOT) licensed switching technology from various foreign firms. A simultaneous thrust was provided to the national development of telecommunications equipment by hiring non-resident Indian engineer, Satyen (Sam) Pitroda to start the Centre for Development of Telematics with the goal of designing an indigenous digital telecommunication switch, whose manufacture would be licensed to local firms. When actual reforms were initiated in 1994, there were three incumbents in the fixed service sector, namely DoT (Department of Telecom), MTNL and VSNL. Of these, DoT operated in all parts of the country except for Delhi and Mumbai while MTNL operated in Delhi and Mumbai, and VSNL provided international telephony.An essential part of the entire game of privatisation is the setting up of tariffs in order to be beneficial for all the players. This task has been entrusted by the government to the newly formed body for the purpose, The Telecom Regulatory Authority of India (TRAI). TRAI issued its first directive regarding tariff-setting following National Telecom Policy of 1994 aimed at re-balancing tariffs and to usher in an era of competitive service provision. As the NTP 1994 did not fulfil many of the important areas, so TRAI introduced a reformed policy in 1999, called the New Telecom Policy or NTP 1999. Telecommunication is one of the fastest growing segments in the country with the tele-density (number of telephones per every hundred people) reaching 14.40% at the end of July 2006, compared to 8.6% in Dec 2004. This was primarily because of the liberalisation of the sector by Government of India, which made telecom services readily accessible and affordable. This phenomenal growth in Indian telecom has drawn the attention of the world.

–Technology The latest technology in telecom is 3G. 3G is the third generation of tele standards and technology for mobile networking, superseding 2.5G. It is based on the International Telecommunication Union (ITU) family of standards under the IMT-2000.[1] 3G networks enable network operators to offer users a wider range of more advanced services while achieving greater network capacity through improved spectral efficiency. Services include wide-area wireless voice telephony, video calls, and broadband wireless data, all in a mobile environment. Additional features also include HSPA data transmission capabilities able to deliver speeds up to 14.4 Mbit/s on the downlink and 5.8 Mbit/s on the uplink. Unlike IEEE 802.11 networks, which are commonly called Wi-Fi or WLAN networks, 3G networks are wide-area cellular telephone networks that evolved to incorporate high-speed Internet access and video telephony. IEEE 802.11 networks are short range, highbandwidth networks primarily developed for data. Service providers provide different services on networks. BlackBerry is the latest one.BlackBerry services bring together smart phones and software services to provide customers with easy wireless access to email, phone, web and multimedia applications. At present, four telecom operators - Reliance Communications, Airtel, Vodafone and Tata Teleservices - are providing BlackBerry services. Introduction of new technology in Telecommunications Services Sector is always welcome by the customers since telecommunication has become the dire need of the hour. Hence new technology causes customer expansion and high profit margins. -Demographics The following demographic statistics are from the CIA World Factbook Total Population 1,147.996 million (July 2008 est. CIA)

Rural Population 72.2%, male: 381,668,992, female: 360,948,755 Age structure: 0–14 years: 30.8%, male: 188,208,196, female: 171,356,024 15–64 years: 64.3%, male: 386,432,921, female: 364,215,759 65+ years: 4.9%, male: 27,258,259, female: 30,031,289 (2007 est.) The median age of Indians is 25.1 years. The majority of the Indian population is in the age group of 15-64 years. Mostly users of mobile phones belong to this category of age. Hence, Indian holds a great potential market for telecom service providers. Even yuong generation of India is attracted more and more towards cell phones and this has become a trend and need of even small children in India. This assures a high growth in this industry in future. Most of the service providers have covered majority of the urban population of India. But many far fledged villages of India still need to be connected through mobile phones. The untapped rural population of India is a huge proportion of the 72.2% total rural population of India. Also, the demand for telecom service in rural people is increasing day by day. This further ensures growth in the industry. Demand Analysis - Real and Nominal Growth & Supply/Demand Analysis Indian telecom continues to register a significant growth in the current fiscal year. This has been due to the impact of economic reforms and pro-active policies of the government. Today, Indian telecom network with about 364 million connections in October 2008 is the third largest

in the world .Indian telecom has achieved another milestone as it has become the second largest wireless network in the world by surpassing USA. With the current pace, where about nine million telephones are being added every month, the target of 500 million connections by 2010 is well within our reach. The total number of telephones has increased from 76.53 million on March 31, 2004 to 363.95 million on October 31 2008. While 94.63 million telephones were added during the twelve months of 2007-08, about more than nine million subscribers are being added every month during the current fiscal year. Tele- density has also increased from 12.7 per cent in March 2006 to 31.50 per cent in October 2008. Rural teledensity increased to 13.4 per cent in October 2008 with 109.05 million rural telephone connections. Urban teledensity on the other hand has been 74.61 per cent in October 2008. The growth of wireless services has been phenomenal, with wireless subscribers growing at a compound annual growth rate (CAGR) of 87.7 per cent per annum since 2003. The share of private sector in total telephone connections is now 77.44 per cent as per the latest statistics available for October 2008 as against a meager 5% in 1999. Rural telephones have gone up from 12.3 million in March 2004 to 109.05 million in October 2008 with a teledensity of 13.04%. The target of 100 million rural telephones by 2010 has been achieved well in advance. It is also envisaged that internet and broad-band subscribers will increase to 40 million and 20 million, respectively, by 2010. As per the latest available statistics for September 2008, about 5.7% villages have broadband coverage and the number of rural broadband connections is 1.55 lakh. Foreign direct investment (FDI) is one of the important sources to meet the huge funds that are required for rapid network expansion. The FDI policy provides an investor-friendly environment for the growth of the telecom sector. The policy of the Government of India is to strive to maximize the developmental impact and spin-offs of FDI. At present, 74% to 100% FDI is permitted for various telecom services. The total

FDI equity inflows in telecom sector have been 1261 million USD during 2007-08. The government is now looking forward to achieve the target of 600 million telephone subscribers by the end of Eleventh Plan and to achieve rural teledensity of 25% by means of 200 million rural connections at the end of 11th Plan. It is also envisaged that internet and broad-band subscribers will increase to 40 million and 20 million, respectively, by 2010.

Supply Analysis –Degree of Concentration Today, the telecommunications industry is a vast one with a large number of private players who are constantly bringing down the cost to consumers thereby making services more affordable and helping improve life in general and business in particular. On the Indian business scene are successful government owned institutions like MTNL and BSNL on the one hand, and even more successful and aggressive players like the Tata’s and Reliance on the other. Competition has just begun and is heating up every day with either lowering of tariffs or introduction of newer and improved services to keep a larger share of the market. Reliance, for instance, has been one of the recent, more aggressive players in the telecom business when it introduced a wireless phone in the market for as low as Rs. 500.

–Ease of entry Friction does exist between existing players and the newer entrants, as also between the providers of services based on different technologies (CDMA Vs Cellular). The same needs to be resolved with government intervention through the regulator in order to further improve the services. The telecom sector today is not a small one and covers various services and many players within each service. One of the most vibrant developments in telecommunications has been Cellular telephony – a technology that gives us the power to communicate anytime and anywhere. This segment, a part of the broader telecommunications industry, has today spawned an entire industry in mobile telecommunication. Mobile phones today are

an integral part of growth, success and economic efficiency of businesses. The government in India has today recognized, providing world-class telecommunications infrastructure as the key to rapid economic and social development of the country.

–Industry capacity Conservative estimates put a tag of a 3% increase in the growth of GDP for every 1% rise in the tele-density in the nation. Accordingly, this sector has received a great thrust from the government for investments and development. Profitability Increased FDI Flows The Telecom sector is one of the largest attractor of Foreign Direct Investment in the country, accounting for almost a fifth of FDI approvals since 1991. Heavy investment in Infrastructure The cellular industry is responsible for the single largest chunk of investment by any individual industry. The industry has already invested over Rs. 20,000 crores and is expected to invest even more in the years to come. Revenue Generation for the Government of India The cellular telephony sector is poised for big growth going forward provided the government controls the sector and its players in a healthy manner. Basic and Cellular telephony form the back bone of communications in the country though the internet too has played a pivotal role. Employment Generation As the number of licensees goes up and they start their operations with 77 networks on air, the employment opportunities in this sector will be huge. Key Findings

• •

Much of the growth in Asia Pacific Wireless Telecommunication Market is spurred by the growth in demand in countries like India and China. India ‘s mobile phone subscriber base is growing at a rate of 82.2%. China is the biggest market in Asia Pacific with a subscriber base of 48% of the total subscribers in Asia Pacific. Compared to that India ’s share in Asia Pacific Mobile Phone market is 6.4%. Considering the fact that India and China have almost comparable populations, India’s low mobile penetration offers huge scope for growth. The Internet Access Market in India is all set to grow twice the existing value what with the increase in deregularization, literacy level, increasing consumer awareness, PC penetration etc. Broadband Wireless Market in India is all set to take off in a big way. Over 70% of the households in India has no access to wired lines and the number of mobile phone users far outnumbers PC owners. Such a scenario presents a very good opportunity for Wireless Broadband Services.

Key Issues and Facts Analyzed The research report also addresses the issues and facts that are critical to your success:
• • • • • • •

What are the emerging trends in the Telecom sector in India? What is the future Outlook of the Telecom market in India? Who are the Key players in the Telecom Market in India? What opportunities exist for the Telecom market? What are the Challenges faced by the industry? How is the market affected by other factors prevailing in the economy? What are the emerging technologies in the Telecom Sector?

Key Players Analyzed This section provides the overview, key facts, financial information, future plans and business strategies of prominent players in the Indian Telecom market like Reliance Communications, Bharti Airtel, Hutchison Essar, Idea Cellular, Aircel Ltd, MTNL, BSNL VSNL and Sify Ltd. Research Methodology Information Sources Information has been sourced from namely, books, newspapers, trade journals, and white papers, industry portals, government agencies, trade associations, industry news and developments and through access to more than 3000 paid databases. Analysis Methods The analysis methods includes the following: Ratio Analysis, Historical Trend Analysis, Linear Regression Analysis using software tools, Judgmental Forecasting and Cause and Effect Analysis.