History Of INDIAN Telecommunications

1851 – First operational lines were laid by government near Calcutta. 1881 – Telephone service introduced in INDIA. 1883 – Merger with the Postal system. 1923 – Formation of Indian Radio Telegraph Company (IRT). 1932 – Merger of ETC and IRT into the Indian Radio and Cable Communication Company (IRCC). 1947 – Nationalization of all Foreign Telecommuniations companies to form the Posts, Telephone and Telegraph (PTT), a monopoly run by the governments Ministry of communication. 1985 – Department of Telecommunications (DOT) established, an exclusive provider of domestic and long distance service that would be its own regulator (separate from the postal system).

1986 – Conversion of DOT into two wholly government – owned companies: a) Videsh Sanchar Nigam Limited VSNL for international telecommuniations b) Mahanagar telephone Nigam Limited for service in Metropolian cities. 1997 – Telecom Regulatory Authority of India created. 1999 – Cellular services is launched in India . New National Telecom policy is adopted. 2000+ – DoT becomes a corporation BSNL, CAGR of around 75%, FDI :74% (2005). 2007-09 – world's lowest call rates, fastest growth in number of subscribers, fastest sale of million mobiles in week, world's cheapsest mobile and most affordable colour phones.

INDIA'S Position in Telecom Sector

India is Second largest market in Asia after China, Japan & South Korea. Indian Telecom network is 8 largest in the n d world and 2 largest among emerging economies. Contribution of Telecom sector in terms of revenue is 2.1% of GDP as compared to 2.8% of emerging economies.
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Classificaition Of Telecom Sector
1) Fixed Line Telephony

Current market size of Rs.30164 crore with 43 million lines. BSNL and MTNL account for 90% revenue for basic services Private sector available in 18 sectors and collectively account for 10% of the revenue. Private sector offers high end services like leased lines, ISDN, videoconferencing as a result ARPU (average revenue per user is more for private players).

Classificaition Of Telecom Sector
2) Mobile Telephony

There are 25 private companies providing cellular services in 19 telecom sectors and 4 metro cities, covering 1500 towns across the country. Presently, there are five private service operator in each area, and an state operator. Almost 80% of cellular subscriber base belongs to the prepaid segment. DOT has allowed cellular companies to buy rivals within the same operating circle provided there combined market share did not exceed 67 percent. Previously, they were only allowed to buy companies outside there circle.

Classificaition Of Telecom Sector
3) Internet

Internet telephony has been allowed officially from 1st april 2002. There is no restriction on the number of internet comapnies and more than 186 are operational. The growing demand of corporates for applications such as electronic commerce, internet leased lines, ISDN, VPN etc is driving the growth of internet services market. Internet has become easily accesible at any place in INDIA with cyber cafes.

Subscribers growth rate vs. tariff

Lowest Tariff

Telephone connections

Telecom Subscribers

Handset Manufaturer Market Share

Market share

Market Share
BSNL – Incubent service provider and world's 7th largest telecomunications company providing comprehensive range of services like GSM mobile, wireline, Internet, Broadband, career services, VSAT, VOIP services etc.... MTNL – State owned operator covering the cities of Mumbai & Delhi S providing both fixed and mobile services.

BHARTI AIRTEL – Integrated operator with presence in all segments, leads the mobile segment in country.

RELIANCE COMMUNICATIONS – Largest player in India in CDMA segment, plans a GSM network. TATA TELESERVICES – Integrated operator with VSNL, presence in all segments providing CDMA services in 20 circles

Market Share
VODAFONE – An integrated service provider which has a 10% stake in Bharti Telecom and Represents the largest foreign investment in the telecom sector services in India.

IDEA – It operates in eight telecom “circles”, or regions, in Westren India, and has recieved additional GSM license to expand its network into three circles in Eastern India – the First phase of major expansion plan that it intends to fund through an IPO, according to parent company Aditya Birla Group

Backup Industries

Contributions to GDP

Contribution of Indian Telecom sector to growth of India's economy is immense. It is directly contributing more than 2.1 per cent GDP of the country. It has a multiplier effect on growth because of connecting the people and business around. Indian telecom industry is 2nd largest in world with a total wireless subscribe base of 435 million targeted to estimated 771 million by 2013. India has cheapest mobile rates in world. “Connecting rural India” for both voice and data connectivity is the main target of India's telecom industry.

Role of TRAI
MISSION : “To ensure that the interests of consumers are protected and at the same time to nurture the conditions for growth of telecommunications, broadcasting and cable services in a manner and at a pace which will enable india to play a leading role in the emerging global information society”. ROLE OF TRAI

Fair and transparent policy environment to promote a level playing field and facilitates fair competition. To isssue a large number of regulations, order and directives to deal with issues coming before it. To provide required direction for evolution of Indian Telecom market from a Government owned monopoly to a multi operator multi service open competitive market.

Role of TRAI
Recommendatory Functions:

Need and timing for introduction of new service providers. Terms and conditions of license to a service provider. Revocation of license for non-compliance of terms and conditions of license. Measures to facilitate competition and promote efficiency in the operation to facilitate growth in industry. Technological imrovement in service by service providers. Inspection of type of equipment used by service provider. Efficient management of available spectrum.

Role of TRAI
Other Functions:

Levy fees and other charges as determined by regulations. Perform administrative functions as entrusted to it by central govt or as per TRAI act. Notify in official Gazette the service rates and message rates within and outside India. Ensure compliance of Universal service obligaiton (USO). Regulate arrangements for sharing of revenues amongst service providers.

Major Investments

The Russian government is likely to pick up equity amounting to US$ 670 million in Sistemea Shyam Teleservices Ltd (SSTL), a joint venture between Russian based telecom major Sistema and shyam group in INDIA. Norway based telecom operator Telenor has bought 60 per cent stake in UNITECH wireless for US$ 1.23 billion. Japanese major NTT DoCoMo acquired a 27.31 per cent equity capital of TaTa teleservices for about US$ 2.6 billion in November 2008. BSNL, India's leading telecom compnay in terms of revenues is putting US$ 1.16 billion in it's WiMax project. Vodafone Essar will invest US$ 6 billion over next three years in a bid to increase its mobile subscriber base from 40 million at present to 100 million. Telecom operator Aircel, which launched GSM service in Bangalore plans to invest US$ 220.58 million over the next year to setup base stn.

FDI investments in the Telecom Sector in India

SWOT – Strenghts Weakness Opportunities Threats
STRENGHTS●

Stable economic growth. Large market potential. Large talent pool. Government initiatives. Decreasing call rates. Low lablur costs. Numerous BPOs and KPOs flourishing in India. Low teledensity offers huge future potential. Policies are in place to safeguard the interests of service providers, as well as those of customers.

SWOT – Strenghts Weakness Opportunities Threats
WEAKNESS ●

Huge implementation costs. Customer retention. Increased competition. Infrastructure uprgrade. Cost recovery. Bill reconciliation is slow. Query processing is slow.

SWOT – Strenghts Weakness Opportunities Threats
OPPORTUNINTIES ●

Rural density is less than 10% and overall teledenstity is 24%. Broadband penetration is just 0.25%, hence vast scope. BPO business is growing fast : so telecom can ride on it. Value added services like M-commerce, M-marketing, special infromation, Ringtones etc. offers venues of additional revenues. As globalisation is increasing, more percentage of global business for Indian telecom. Technologies like 3G, WiMax etc... will open up new frontier of business.

SWOT – Strenghts Weakness Opportunities Threats
THREATS ●

Number of operators are increasing per circle hence more competititon Problem of limited spectrum availability and the issues of interconnection charges between the private and state operators. It would be difficult to make inroads into semi-rural and rural areas because of lack of infrastructure. Service providers have to incur a huge initial fixed costs to make inroads into this market. Achieving break-even in these conditions is difficult. Slow pace of reform process. Cost/Customer is high in rural areas. Spectrum a scare commodity. International bandwidth is costly.

SPECTRUM AUCTIONING

India was also the early adopters of spectrum allocation but its success in service provision was low and services were slow to roll. Efficient use of spectrum Allocated to those who value it the most, while generating revenues for the government. Key challenge to design in a way to foster competition. Two step process

3G SPECTRUM AUCTION

Government plans to auction the spectrum for 3G services by inviting the bids from domestic, as well as foreign players and creating a competitive environment that offers better services to consumers. The immense potential for 3G is reflected by the 30-40 per cent annual growth in value added services. The global revenue for 3G is 60 per cent higher than that of other services Cellphone manufacturers are striving to develop US$ 100-priced 3G handsets for the Indian market India expects to replicate its 2G growth in 3G services. It offers voice capacity that is four to five times higher than that of 2G services. Therefore, it is an ideal platform for low-cost cellular services

Future Technology Trends
IP MULTIMEDIA SUBSYTEM ●

It's a generic architecture for offering multimedia and voice over IP services, defined by 3rd Generation Partnership Project (3GPP). Possible applications where IMS can be used are presence services, Full Duplex Video Telephony, Instant messaging, Unified Messaging, Multimedia Advertising, Multiparty Gaming, Video streaming, Web/Audio/Video conferencing, Push-to-Services such as push-to-talk, push-to-view, push-to-video. These wide range of servies are both packet and circuit switched networks. These services are created and delivered by a wide range of highly distributed systems cooperating with each other.

Future Technology Trends
HIGH SPEED DOWNLINK PACKET ACCESS ●

Packet based technology for W-CDMA dowlink. Data transmissions rate of 4 to 5 times of current 3G netwroks and 15 times that of GPRS. Introduction of shared channels for different users will guarantee that channel resources are used efficiently in packet domain, and will be less expensive for users than dedicated channels. It boosts dowlink speed from the current end user rate of 394 Kbps to a maximum value according to standards of 14.4Mbps. Real life end-users speeds will be in range of 3-4Mbps.

Future Technology Trends
IPTV (Internet Protocol Television)

It delivers television programming to households via a broadband connection using internet protocols. Requires a subscription and a IPTV settop box, and offers key advantages over existing cable and satellite technologies. It is bundled with other services like Video on demand(VOD), voice over ip or digital phone(VOIP) and Web Access collectively known as Triple play. Promises more efficient streaming than present technologies. “custom view guides”. Full control over functionality such as rewind, fast forward etc.. Real-time participation. Recieve web service notificaitons while watching IPTV.

Future Technology Trends
4G or FOURTH GENERATION NETWORKS ●

Future technology for mobile and wireless communications. It will be successor for the 3rd generation 3G network technology. Expexted to be seen around 2010 – 2015. High degree of personalizaiton and synchronization between various user applicances, will be another driver. Fluid high Quality video and network reactivity. Fast response, high session rate, high capacity, low user charges and rapid return on investments for operator.

Conclusion
The INDIAN Telecom Service Provider industry is gearing for a revolution. The customer is driving this revolution and will see more unique and sophisticated offerings coming his way. The 3G which will pave the way for 3.5G, 3.75G and the next big thing 4G and the VAS services will keep the customer asking for more. The Rural areas which have remained untapped will see an insurgence of services. Also the easing of regulations by TRAI, the ease of spectrum licensing, the FDI influx will make the telecom space in INDIA a must watch in coming years.

References

IBEF Report 2007-08 : Tele-communication – MARKET & OPPORTUNITIES. Cellular stastics – Cellular Operator Association of INDIA. www.trai.gov.in Article on Indian Cellular stastics May 2003. www.researchandmarkets.com Search Engines like google, YAHOO, ask etc....

THANk YOu

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