Introduction to Indian Mobile Service Provider Market

Industry Overview
The market is divided into 4 metro circles and 20 cellular circles. Only four cellular operators are
allowed to operate in each circle. Government-owned MTN and !"N are the #
operators in
each circle.
The current market has $0 million su%scri%ers &'() penetration rate* %ut is e+pected to ,row to (00
million su%scri%ers %y 20(-.
.ndustry is hi,hly re,ulated %y the ,overnment with the help of T/0.. 1orei,n 2irect .nvestment
&12.* is restricted to 43) and revenue sharin, scheme implemented.
2ecreasin, handset costs and the introduction of pre-paid card is stimulatin, the demand and
consumption of the cellular services has made them widely popular amon, the ,eneral masses.
4ellular tariffs and activation fees are reduced due to competition from incum%ent fi+ed line
operators to stimulate su%scriptions and increase sales. This has led to the widespread popularity
of the mo%ile service providers amon, levels of all people.
Operators are offerin, value added services and up,radin, to ne+t ,eneration cellular systems since
voice revenues are decreasin, day %y day.
Major Governing Bodies:
1. Teleco !egulatory "ut#ority o$ India:
T/0. was founded to act as an independent re,ulatory %ody supervisin, telecom development in
.ndia. This %ecame important5 as 2oT was a re,ulator and a player as well. 1ounded %y an 0ct of
6arliament5 the main functions of the %ody was to finali7e toll rates and settle disputes %etween
players. 0n independent re,ulator is critical at the present situation as the sector witness8s
competition. The operations of this sector are determined as under the .ndian Tele,raph 0ct of
(99- : 0 document %uried in the sands of time. The ne+t ma;or policy document5 which was
produced5 was the National Telecom 6olicy of (3345 a conse<uence of the on,oin, process of
%. &O"I '&ellular O(erators "ssociation o$ India)
The 0ssociation is dedicated to the advancement of modern communication throu,h the
esta%lishment of world-class mo%ile infrastructure5 products and services and to deliverin, the
%enefits of innovative and afforda%le mo%ile communication services to the people of .ndia.
4O0.8s core mem%ership includes private cellular operators5 namely - 0ircel td.5 !harti 0irtel
td.5 .dea 4ellular td.5 Telewin,s 4ommunications "ervices 6vt. td.5 =ideocon Telecom and
=odafone .ndia td. operatin, across the whole country. >avin, started as an 0ssociation for
mo%ile service providers5 4O0. has today e+panded to %e a thou,ht leader in the telecom and
%road%and industry5 with mem%ers includin, cellular service providers5 telecom infrastructure
players5 and telecom e<uipment manufacturers? and still e+pandin, to include other allied and
critical stakeholders of the sector.
4O0. also played a ma;or role in settin, up the Telecom 4enters of @+cellence &T4O@* set up in
6u%lic 6rivate 6artnership &666* mode5 with the Government5 the 0cademia and the .ndustry
workin, to,ether for the sustained ,rowth and pro,ress of the country. The key o%;ective of
T4O@s are to create syner,y amon,st the academia5 telecom industry and the ,overnment for
creation of new servicesAapplications5 ,eneration of .6/5 development of manufacturin,
capa%ility5 ,lo%al telecom standardi7ation activities5 and promotion of entrepreneurship.
Growt# *rivers
Openin, up of international and domestic lon, distance telephony services are ,rowth drivers in
the industry. 4ellular operators now ,et su%stantial revenue from these services5 and compensate
them for reduction in tariffs on air time5 which alon, with rental was the main source of revenue.
The reduction in tariffs for airtime5 national lon, distance5 international lon, distance5 and
handset prices has driven demand.
+#at is a &ellular ,one-
The 2epartment of Telecommunications has divided .ndia into various cellular 7ones such that
within each 7one5 the call is treated as a local call5 while across 7ones5 it %ecomes a lon,-distance
0 cellular 7one &or telecom circle* is normally the entire state5 with a few e+ceptions like
Mum%ai and Bolkata &which are different 7ones than their respective states*5 Goa &which is a part
of the Maharashtra 7one*5 4hhattis,arh &which is part of Madhya 6radesh*5 Charkhand &which is a
part of the !ihar 7one* or Dttar 6radesh &divided into multiple 7ones*. 2elhi is a uni<ue circle
%ecause it includes towns from >aryana and Dttar 6radesh as well. /ecently Telan,ana "tate has
%een separated from 0ndhra 6radesh "tate which will still remain in the same cellular network
0t present5 there are 22 telecom circles or service areas. They are classified into 4 cate,oriesE
Metro5 05 !5 4. 2elhi5 Mum%ai5 Bolkata fall under Metro cate,ory. 4hennai service area doesnFt
come under Metro cate,ory. .t has %een a part of Tamil Nadu service area since 200G
T#e .ey (layers in t#e Teleco Market in India
&ellular Service (roviders:
1. BS/0
%. B#arti "irtel
1. 2oda$one
3. !eliance
4. Tata Indico
5. 2irgin
6. Idea &ellular
7. *ocoo
8. "ircel
&o(any Pro$iles
H!harti 0irtelI formerly known as !harti Tele-=entures imited &!T=* is amon, .ndiaFs lar,est
mo%ile phone and 1i+ed Network operators. Jith more than 34 million su%scriptions as of
March 2003..t8s /evenue around $ %illion D"K. .t offers its mo%ile services under the 0irtel
%rand and is headed %y Mr. "unil Mittal. The company also provides telephone services and
.nternet access over 2" in all 2# circles. The company complements its mo%ile5 %road%and L
telephone services with national and international lon, distance services. The company also has a
su%marine ca%le landin, station at 4hennai5 which connects the su%marine ca%le connectin,
4hennai and "in,apore. The company provides relia%le end-to-end data and enterprise services
to the corporate customers %y levera,in, its nationwide fi%er optic %ack%one5 last mile
connectivity in fi+ed-line and mo%ile circles5 ="0Ts5 ."6 and international %andwidth access
throu,h the ,ateways and landin, station.
0irtel is the lar,est cellular service provider in .ndia in terms of num%er of su%scri%ers. !harti
0irtel owns the 0irtel %rand and provides the followin, services under the %rand name 0irtelE
Mo%ile "ervices &usin, G"M Technolo,y*5 !road%and L Telephone "ervices &1i+ed line5
.nternet 4onnectivity &2"* and eased ine*5 on, 2istance "ervices and @nterprise "ervices
&Telecommunications consultin, for 4orporate*.
eadin, international telecommunication companies such as =odafone and "in,Tel held partial
stakes in !harti 0irtel.
.n Culy 200G5 !harti 0irtel si,ned an MoD with Nokia-"iemens for a 300 million dollar
e+pansion of its mo%ile and fi+ed network. .n 0u,ust 200G5 the company announced it will %e
launchin, a customi7ed version of Goo,le search en,ine that will provide an Farray of servicesF to
its %road%and customers.
"irtel Teleedia Services 9 :nter(rise Services.
The mo%ile %usiness provides mo%ile L fi+ed wireless services usin, G"M technolo,y across 2#
telecom circles while the 0irtel Telemedia "ervices %usiness offers %road%and L telephone
services in 3- cities and has recently launched .ndiaFs %est 2irect-to->ome &2T>* service5 0irtel
di,ital T=. The @nterprise services provide end-to-end telecom solutions to corporate customers
and national L international lon, distance services to carriers. 0ll these services are provided
under the 0irtel %rand.
!harat "anchar Ni,am imited &known as !"N5 .ndia 4ommunications 4orporation imited*
is a pu%lic sector communications company in .ndia. .t is the .ndiaFs lar,est telecommunication
company with(-.$2 ) market share as on 2ecem%er5 2009. .ts head<uarters are at !harat
"anchar !hawan5 >arish 4handra Mathur ane5 Canpath5 New 2elhi. .t has the status of Mini-
/atna - a status assi,ned to reputed 6u%lic "ector companies in .ndia.
!"N is .ndiaFs oldest and lar,est &ounication Service Provider '&SP). 4urrently !"N
has a customer %ase of $9.- million &!asic L Mo%ile telephony*. .t has footprints throu,hout
.ndia e+cept for the metropolitan cities of Mum%ai and New 2elhi which are mana,ed %y
MTN5 0s on 2ecem%er5 2009. !"N commanded a customer %ase of #(.G million Jire line5
4.( million 42M0-J and #2.G million G"M Mo%ile su%scri%ers. !"NFs earnin,s for the
<uarter endin, 2ecem%er #(5 2009 stood at .N/ #3G.(-% &D"K 3.$G %* with net profit of .N/
G9.0$% &D"K (.30 %illion*. Today5 !"N is .ndiaFs lar,est Telco and one of the lar,est 6u%lic
"ector Dndertakin, with estimated market value of K (00 !illion. The company is plannin, an
.6O within $ months to offload (0 ) to pu%lic.
!harat "anchar Ni,am td. formed in Octo%er5 20005 is JorldFs Gth lar,est Telecommunications
4ompany providin, comprehensive ran,e of telecom services in .ndiaE Jire line5 42M0
mo%ile5 G"M Mo%ile5 .nternet5 !road%and5 4arrier service5 M6"-=6N5 ="0T5 =o.6 services5
.N "ervices etc. Jithin a span of five years it has %ecome one of the lar,est pu%lic sector units in
!"N has more than 2.- million J su%scri%ers and 2.- million .nternet 4ustomers who
access .nternet throu,h various modes vi7. 2ial-up5 eased ine5 2.0"5 and 0ccount ess
.nternet &4.*. !"N has %een ad;ud,ed as the NDM!@/ ON@ ."6 in the country.
!"N has set up a world class multi-,i,a%it5 multi-protocol conver,ent .6 infrastructure that
provides conver,ent services like voice5 data and video throu,h the same !ack%one and
!road%and 0ccess Network. 0t present there are 0.$ million 2ata One %road%and customers.
The company has vast e+perience in 6lannin,5 .nstallation5 network inte,ration and Maintenance
of "witchin, L Transmission Networks and also has a world class ."O 3000 certified Telecom
Trainin, .nstitute.