A Project Report on

TO STUDY THE EMPOLYEE PARTICIPATION IN MANAGEMENT DECISION MAKING

IN TELECOM SECTOR, DELHI

Submitted to MaharshiDayanand University, Rohtak in partial fulfillment of

the requirement for the award of degree of
Master of Business Administration
(2013-2015)

Submitted by:
Deepti Joon
Roll no. - 160113002
M.B.A (4th Sem.)

P.D.M College of Engineering

Sarai Aurangabad,Bahadurgarh (Haryana)

(Affiliated to MaharshiDayanandUniversity, Rohtak)

DECLARATION

I Deepti Joon Roll no. 160113002/MBA 4th sem. of P.D.M. College of Engineering, Bahadurgarh,
hereby declare that the project report entitled TO STUDY THE EMPLOYEE PARTICIPATION
IN MANAGEMENT DECISION MAKING IN TELECOM SECTOR,DELHI is an original
work and same has not been submitted to any other institution for the award of any other degree.
The interim report was presented to the supervisor on __________________ and the presubmission was made on__________________.
The feasible suggestions as approved by faculty have been duly incorporated in consultation with
the supervisor.

Countersigned

Signature of supervisor

Forwarded by:

Director/principal of the institute

Signature of the candidate

ACKNOWLEDGEMENT

Behind every success there are thousands of hands. I wish to pay my gratitude to each one of
them. At the outset, I wish to express my gratitude towards my lovable faculty & thankful to all
who contribute to the completion of this report.
I am extremely grateful to Dr. NidhiMisra (Head of the department, Management study)
Whose continues encouragement, cheerful, willing & sincere co-operation and invaluable
suggestions which makes this project fruitful and gives me a great help in the preparation of this
project.
I express my deep sense of gratitude to Dr. Parul (Mentor) for their invaluable help who
provided me up to date guidance at my stages of the report, which enable to complete the project
on schedule.
I am glad to say that they all accorded a very kind and affectionate treatment to me and helped
me a lot during this project with their pleasant experience.
Specially, I am thankful to my parents and God for their blessings and showing me the right way
at all moments.
Last but not least I thank all those who are responsible for the success of this report.

(Deepti Joon)

TABLE OF CONTENTS:

1. TITLE PAGE
2. DECLARATION
3. ACKNOWLEDGEMENT

CHAPTE
R NO.

CONTENTS

PAGE
NO.

1.

INTRODUCTION

1-31

INTRODUCTION TO THE TOPIC

2.

REVIEW OF LITERATURE

32-34

3.

OBJECTIVES OF THE STUDY

35

4.

RESEARCH METHODOLOGY

36-38

5.

DATA ANALYSIS AND INTERPRETATION

39-65

6.

FINDINGS

66-67

7.

SUGGESTIONS

68

8.

LIMITATIONS

69

9.

CONCLUSION

70

BIBLIOGRAPHY
ANNEXURE

Introduction:
Management has become increasingly concerned to introduce changes in work organization in
order to increase flexibility and responsiveness to demands of the marketplace, and to improve
quality and productivity. The involvement and participation of employees in these changes has
been an issue of considerable debate (see Davis and Lansbury, 1996). While concepts such as
'employee improvement' and 'participative management' have been used to emphasize the
importance of the role of employees in decision making, the precise nature of such participation
has varied considerably. While unions have generally favored indirect, representative forms of
participation (such as collective bargaining) employers have lent their support to more direct
forms of participation, which do not necessarily involve unions. Hence, the diffusion of direct
participation has posed a challenge to many trade unions.
On the other hand, some unions regard direct participation as an opportunity to increase workers'
influence in the workplace and to improve the quality of work organization. Employee
participation is in part a response to the quality movement within organizations. Individual
employees are encouraged to take responsibility for quality in terms of carrying out activities,
which meet the requirements of their customers. The internal customer is someone within the
organization that receives the 'product of service' provided by their 'supplier' within the
organization. External customers are buyers and users outside of the organization. Employee
participation is also part of the move towards human resource development in modern
organizations. Employees are trusted to make decisions for themselves and the organization. This
is a key motivational tool.
In view of these developments and the wide range of experiences in different countries, the
international Labor Organization (TLO) initiated a research project in 1993-95 on employee
participation in work organization. In this symposium, three English-speaking countries are
represented through papers which analyze both national experiences as well as providing case
study material based on particular industries. Muneto Ozaki, who directed the research project
for the DLO, has contributed an overview paper which not only surveys recent international
developments but also includes insights from other national studies which are not included in this
symposium. Ozaki makes the useful distinction between 'on line' participation (through normal
work arrangements) and 'off-line' participation (outside normal work). However, he notes that, in
practice, the two are often intertwined. Ozaki focuses on teamwork as an example of 'on-line'
Participation and on project groups and quality circles (Q.C.).
In his overview paper, Ozaki notes that teamwork has been a key element in transforming work
organization in Western industrialized countries. It can also be instrumental for enhancing
democracy by enabling workers to influence the content of their work. However, both the
concept of teamwork and how it is applied varies considerably between and within different
countries. Furthermore, its diffusion has been incomplete. Ozaki makes a useful distinction
between three types of team structure which provide different levels of participation for workers:

the first type comprises teams with members of equal status; the second consists of
heterogeneous, segmented teams; while the third includes hierarchical but homogenous teams.
Ozaki makes the important point that teamwork needs to be viewed in the context of the
prevailing employment system in any particular country.
The three national papers presented in this symposium each provide a brief overview of countrylevel experiences as well as including case studies drawn from particular industries.
The paper on Australia, by Lansbury, Davis and Simmons, outlines the wide range of industrial
relations reforms introduced by successive Labor governments between 1983 and 1996. Yet
while employee participation was espoused by key employer and union groups, and encouraged
by government, its record of implementation was extremely varied.
The case of the Ford Motor Company, however, demonstrates that while the introduction of an
employee involvement program yielded moderate benefits, the extension of this approach into a
more comprehensive system of natural work groups (NWG) resulted in more substantial gains.
The NWGs embraced a wider range of workers at the shop-floor level, had support of the unions
and appeared to be linked to an increase in the levels of production and quality. The degree of
influence gained by employees over work organization and other aspects of decision making at
Ford should not be exaggerated, but all parties regarded the reform process as having positive
outcomes.
In the United Kingdom, with the decline of collective bargaining over the past two decades, there
has been relatively little negotiation between unions and management over matters such as
changes in work organization and working practices. However, since the 1980s, there has been
an increase in the use of consultation and forms of direct employee participation, albeit under the
unilateral control of management. Hence, union influence over these matters has been only
slight. A case study of a major bank in the UK by Terry and Newell draws rather depressing
conclusions. While considerable changes in work organization were introduced by the bank's
management, there was little consultation with either the employees or their union.
The main impact of the changes was to reduce the employees' influence through increased
homogenization of work and the intensification of single-skilled employment. The authors
concluded that for unions to gain greater influence on work organization they needed not only to
have an effective voice but also competence to present management with constructive criticism
and alternatives. However, without legal rights to participation and involvement, workers and
their unions are likely to remain marginalized. In the United States, in recent years, there have
been conflicting trends concerning the involvement of employees in new forms of work
organization. While there are impressive experiments and innovations in some organizations,
many workers remain in jobs which continue to be organized according to the principles of mass
production and in which there is little prospect for workplace reform. Nevertheless, Wever, Batt
and Rubenstein present two case studies of impressive labor-management partnerships: between
General Motors and the United Autoworkers Union at Saturn, and between Bell South and the
Communication Workers Union.

At Saturn, partnerships between unionized and non-represented employees have created a unique
system of co-management. Local union representatives participate in various joint committees
and forums, from shop floor teams to the Strategic Action Council. Bell South represents a joint
effort by labor and management to redesign work, in the context of on-going operations.
The researchers note that Saturn and Bell South highlight different kinds of worker participation
in management decision-making.
In both enterprises, innovations were facilitated by the decentralized nature of the US political
economy, with its low level of institutional regulation. Yet the lack of a strong institutional basis,
as found in Germany with its Works Constitution Act, poses questions about the ongoing
viability of these cases and the likelihood that they will be diffused to other sites. Workers also
operate in an industrial relations environment in which collaboration between labor and
management is at odds with the traditional adversarial system which has long prevailed. Yet the
success of these two cases, which are cited as examples of international best practice in the area
of worker participation in decision-making, may set a pattern for other enterprises and industries
which are seeking an alternative to past approaches.
The four papers in this symposium demonstrate that certain requirements must be fulfilled if
employee participation in work organization is to become more widely diffused. Whether the
indirect representative approach is adopted or direct workplace participation is preferred, major
changes may be required in management attitudes and behavior. Similarly, employees and their
unions need to be willing to engage in collaborative activities with management.
To be effective, work teams and other participative bodies must be involved in significant
decisions and participation should extend throughout all levels of an enterprise. In each of the
three English-speaking countries featured in this symposium, there is the absence of a
widespread and uniform mechanisms for worker participation as found in some other economies,
such as Germany. While this remains the dominant approach, it is likely that examples of
effective employee participation in work organization will remain rather fragmented and
isolated, despite their individual new workers participation in management is an essential
ingredient of Industrial democracy.
The concept of workers participation in management is based on Human Relations approach to
Management which brought about a new set of values to labor and management. Traditionally
the concept of Workers Participation in Management (WPM) refers to participation of nonmanagerial employees in the decision-making process of the organization. Workers participation
is also known as labor participation or employee participation in management. In Germany it
is known as co-determination while in Yugoslavia it is known as self-management. The
International Labor Organization has been encouraging member nations to promote the scheme
of Workers Participation in Management.

Employee participation is the process whereby employees are involved in decision making
processes, rather than simply acting on orders. Employee participation is part of a process of
empowerment in the workplace.
Workers participation in management implies mental and emotional involvement of workers in
the management of Enterprise. It is considered as a mechanism where workers have a say in the
decisionThe philosophy underlying workers participation stresses:
1. Democratic participation in decision-making;
2. Maximum employer-employee collaboration;
3. Minimum state intervention;
4.Realization of a greater measure of social justice;
5. Greater industrial efficiency; and
6. Higher level of organizational health and effectiveness.
It has been varyingly understood and practiced as a system of joint
consultation in industry; as a form of labor management cooperation; as
recognition of the principle of co-partnership, and as an instrument of
industrial democracy. Consequently, participation has assumed different
forms, varying from mere voluntary sharing of information by management
with the workers to formal participation by the latter in actual decisionmaking process of management.
Employee Commitment
A major reason employee involvement has grown is because it has been shown to increase
employee commitment to their organizations. By involving employees actively in decision
making, company leaders affirm the value of their employees. Employees more naturally
develop deeper commitments to organizational and departmental objectives when they help set
them and are involved in achieving them by offering input and making decisions that affect
success.
Better Ideas
Customers also benefit when companies seek employee input. Front-line employees that interact
directly with customers or clients often have more insight into customer concerns and feedback.
When company leaders create an environment that encourages employees to share ideas and to
get involved in decisions, they often get more informed perspectives with regard to what
customers want. When top managers make all critical decisions on their own without employee
involvement, their ideas are limited to their perception and past experiences.
Manager-Employee Boundary

One potential challenge of encouraging employee involvement is the risk that the line of
distinction between the management level and employee level becomes blurred. Though
managers may value employee involvement, a disciplined structure with clear reporting lines has
long been vital to stability in organizations. Allowing employees to share ideas and make
decisions without having them push the envelope and try to take on responsibilities that are
reserved for management levels is a real risk.
Communication Complexity
More lines of communication and the potential for inconsistent decision making are
disadvantages with employee involvement systems. When more employees have input and
decision-making ability, more communication is necessary to make certain that decisions are
consistent across the organization. This consistency is critical to brand recognition and
consistency. Managers may have a hard time monitoring decisions and activities with employee
involvement to protect against negative consequences and to restrict the potential for chaos.
Productivity
When employees are involved in making decisions, they gain a professional and personal stake
in the organization and its overall success. This commitment leads to increased productivity as
employees are actively participating in various aspects of the company and wish to see their
efforts succeed overall. This is not only beneficial to company growth, but is also on-the-job
training for workers. The increase in responsibility expands employee skill sets, preparing them
for additional responsibility in the future.
Improving Morale
Actively engaging workers in the decision-making process increases overall company morale.
Many companies have a distinct separation of power between management and workers;
however, active employee involvement lowers that gap, opening the lines of communication
between supervisors and employees. As a functioning participant in the decision-making process,
employees understand their ideas are an important contribution to the company, and give them
the power to influence the outcome of their work, leading to increased job satisfaction and a
positive attitude, not only toward their position but also to the company itself.
Internal Resources
Using employees in the decision-making process, rather than outsourcing, saves money, time,
and offers the company long-term reliable assistance from those who know the corporation well.
Hiring an outside consulting firm is expensive and can take up valuable resources in fees and the
time spent updating outside consultants in various aspects of the company. However, employees
are already aware of these processes, offer insightful knowledge of the company needs, and
understand the policies of the company overall.
Teamwork

Participation in the decision-making process gives each employee the opportunity to voice their
opinions, and to share their knowledge with others. While this improves the relationship between
manager and employee, it also encourages a strong sense of teamwork among workers. The
expression of viewpoints opens dialogue between co-workers, with each worker bringing their
individual strengths to a project. It is also a good way to gather information about the employees
as to how they work in a team environment, and where training may be necessary, all of which
leads to an increase in effectiveness, and ultimately an increase in good teamwork and
performance.

Objectives:
The objectives of workers participation in management are as follows:
1. To raise level of motivation of workers by closer involvement.
2. To provide opportunity for expression and to provide a sense of importance to workers.
3. To develop ties of understanding leading to better effort and harmony.
4. To act on a device to counter-balance powers of managers.
5. To act on a panacea for solving industrial relation problems.

Elements of Participation:
The term participation has different meanings for different purposes in different situations.
McGregor is of the view that participation is one of the most misunderstood ideas that has
emerged from the field of human relations. Keith Davis has defined the term participation as
the mental and emotional involvement of a person in a group situation which encourages him to
contribute to group goals and share responsibilities in them. This definition envisages three
important elements in participation. Firstly, it means mental and emotional involvement rather
than mere physical activity; secondly, participation must motivate a person to contribute to a
specific situation to invest his own resources, such as initiative, knowledge, creativity and
ingenuity in the objectives of the organization; and thirdly, it encourages people to share
responsibility for a decision or activity. Sharing of responsibility commits people to ensure the
success of the decision or activity.

Forms of Participation:
Different forms of participation are discussed below:
Collective Bargaining:
Collective bargaining results in collective agreements which lay down certain rules and
conditions of service in an establishment. Such agreements are normally binding on the parties.
Theoretically, collective bargaining is based on the principle of balance of power, but, in actual
practice, each party tries to outbid the other and get maximum advantage by using, if necessary,
threats and counter threats like; strikes, lockouts and other direct actions. Joint consultation, on
the other hand, is a particular technique which is intended to achieve a greater degree of harmony

and cooperation by emphasizing matters of common interest. Workers prefer to use the
instrument of collective bargaining rather than ask for a share in management. Workers
participation in the U.S.A has been ensured almost exclusively by means of collective
agreements and their application and interpretation rather than by way of labor representation in
management.
Works Councils:
These are exclusive bodies of employees, assigned with different functions in the management of
an enterprise. In West Germany, the works councils have various decision-making functions. In
some countries, their role is limited only to receiving information about the enterprise. In
Yugoslavia, these councils have wider decision-making powers in an enterprise like;
appointment, promotion, salary fixation and also major investment decisions.
Joint Management Councils and Committees:
Mainly these bodies are consultative and advisory, with decision-making being left to the top
management. This system of participation is prevalent in many countries, including Britain and
India. As they are consultative and advisory, neither the managements nor the workers take them
seriously.
Board Representation:
The role of a worker representative in the board of directors is essentially one of negotiating the
workers interest with the other members of the board. At times, this may result in tension and
friction inside the board room. The effectiveness of workers representative at the board depend
upon his ability to participate in decision-making, his knowledge of the company affairs, his
educational background, his level of understanding and also on the number of worker
representatives in the Board.
Workers Ownership of Enterprise:
Social self-management in Yugoslavia is an example of complete control of management by
workers through an elected board and workers council. Even in such a system, there exist two
distinct managerial and operative functions with different sets of persons to perform them.
Though workers have the option to influence all the decisions taken at the top level, in actual
practice, the board and the top management team assume a fairly independent role in taking
major policy decisions for the enterprises, especially in economic matters.

Levels of participation:
Workers participation is possible at all levels of management; the only difference is that of
degree and nature of application. For instance, it may be vigorous at lower level and faint at top
level. Broadly speaking there is following five levels of participation:

1. Information participation: It ensures that employees are able to receive information and
express their views pertaining to the matters of general economic importance.
2. Consultative participation: Here works are consulted on the matters of employee welfare
such as work, safety and health. However, final decision always rests at the option of
management and employees views are only of advisory nature.
3. Associative participation: It is extension of consultative participation as management here is
under moral obligation to accept and implement the unanimous decisions of employees.
4. Administrative participation: It ensure greater share of works in discharge of managerial
functions. Here, decision already taken by the management come to employees, preferably with
alternatives for administration and employees have to select the best from those for
implementation.
5. Decisive participation: Highest level of participation where decisions are jointly taken on the
matters relation to production, welfare etc. is called decisive participation.

Pre-requisites for Effective Participation:

The pre-requisites for the success of any scheme of participative management are the following:
1. Firstly, there should be a strong, democratic and representative unionism for the success of
participative management.
2. Secondly, there should be mutually-agreed and clearly-formulated objectives for participation
to succeed.
3. Thirdly, there should be a feeling of participation at all levels.
4. Fourthly, there should be effective consultation of the workers by the management.
5. Fifthly, both the management and the workers must have full faith in the soundness of the
philosophy underlying the concept of labor participation.
6. Sixthly, till the participative structure is fully accepted by the parties, legislative support is
necessary to ensure that rights of each other are recognized and protected.
7. Seventhly, education and training make a significant contribution to the purposeful working of
participative management.
8. Lastly, forums of participation, areas of participation and guidelines for implementation of
decisions should be specific and there should be prompt follow-up action and feedback.

Participation of Employees in Decision Making is a Key to Employee

Engagement:
Over the last several years, Peter Barron Stark Companies has surveyed the opinions of over
100,000 employees in companies throughout the United States. Some of the companies we have
surveyed have referred to their employees as employees. Other organizations have referred to
their employees as associates, staff members, or team members. What we have learned is
that there is not much correlation between how a company or department refers to their
employees and overall employee satisfaction. However, there is a direct correlation between
how involved employees are in the decision making in their department or team and their overall
morale, motivation, and satisfaction with their jobs. Companies and departments who have a
higher level of employee involvement in decision making show higher levels of employee
motivation and satisfaction.
All managers and supervisors would like everyone to think that they involve employees in the
decision making of their department or team. But, if you ask each employee in your department
the following five questions in an anonymous survey, would they strongly agree, agree, disagree,
or strongly disagree?

My supervisor seeks my opinion in making decisions that impact our team/department.

My supervisor puts my ideas or suggestions to use.

My supervisor allows me/our team to make decisions that impact my/our teams work.

My supervisor trusts me.

My supervisor forgives me if I make a mistake.

There are many benefits of involving employees in the decision making of your company or
department. Based on data analysis from employee satisfaction surveys, the following are six of
the most important benefits:
1. The associates feel they are a valued part of the team:When associates are involved in the decision making, they feel that people in ownership and
management positions value them as a significant contributor to the teams success. When people
feel valued, they will usually raise their level of effort and commitment to ensure the
departments or companys success.
2. The associates are able to make better day-to-day decisions:
Because they have accurate information regarding the direction of the company or department.
Managers and supervisors who do not share information or involve associates in the decision

making are usually the same people who complain that associates are unable to make good
decisions.

3. The associates feel a stronger bond of responsibility for making the decision:
When you are responsible for making a decision, and the decision turns out to be a bad one, you
do whatever you can to correct the decision and make things right. The same is true for everyone.
When associates are involved in making the decision, the chances of the decision being a success
increase since all members of the team are committed to correcting the parts of the decision that
are not in alignment with the departments or companys vision and values.
4. The associates will focus more of their energy on future-oriented problem solving rather
than blaming their current problems on management:
Associates who have not been involved in making the decision have co-authored some great
comments such as, It wasnt my decision, Whose brilliant idea was this? or This will never
work in a hundred years. All of these comments demonstrate two things: First, the employee is
not in agreement with the decision and second, when the decision goes wrong, and it will
because the associate is not committed to the decisions success, the employee has someone to
blame.
5. Morale and motivation is higher
In organizations where associates are involved in the department/company decision making.
When people are involved in the decision making, they know they make a difference to the
departments or companys success. When people know they make a difference, they find it
easier to be motivated and satisfied with their job.
6. It frees up a managers time to contribute to the departments success in other areas.
When associates are able to make the decisions that impact their work, it frees up the manager or
supervisor to work on more future-oriented issues that will ultimately make the department or
company even more successful. For example, a manager will now have the time to look at how
the departments or companys customers are changing their demands and level of expectations.
With this new knowledge, the manager can lead a discussion on what changes will have to occur
in the next decade to meet the changing customer demands. In addition, managers will have
more time for changing procedures and refining processes.
Involving associates sounds easy. It is, but there are some basic philosophical challenges every
manager or supervisor must overcome. These are some of the challenges:
1. It takes more time up front to involve associates.

2. It takes trust on behalf of the manager.

3. It takes forgiveness on the part of the manager.

INTRODUCTION TO TELECOM INDUSTRY:

Telecommunication services are globally recognized as one of the driving forces for overall
economic development in a nation. They are also one of the prime support services needed for
rapid growth and modernization of various sectors of the economy. The Government of India
recognizes this fact and hence, has taken several major initiatives to provide a business friendly
environment for companies in this sector.
Driven by 3G and 4G services, it is expected that there will be huge machine-to-machine (M2M)
growth in India in 2016-17, according to UST Global. There is also a lot of scope for growth of
M2M services in the government's ambitious Rs 7,000 crore (US$ 1.1 billion) 'Smart City'
program
The rapid strides in the telecom sector have been facilitated by liberal policies of the
Government of India that provide easy market access for telecom equipment and a fair regulatory
framework for offering telecom services at affordable prices. According to a study by GSMA, it
has been expected that smart phones will account for two out of every three mobile connections
globally by 2020 and India is all set to become the fourth largest smart phone market.
Market Size
India saw the fastest growth in new mobile-phone connections with 18 million net additions in
the third quarter of 2014, according to a report by Swedish mobile network equipment maker
Ericsson. The number of smart phones, which account for just 37 per cent of all mobile-phone
subscriptions, will reach 2,700 million by 2014, and growing at 15 per cent compounded annual
growth rate, will cross 6,100 by 2020. The falling cost of handsets, coupled with improved
usability and increasing network coverage, are factors that are making mobile technology a
popular phenomenon in the country.
The broadband services user-base in India is expected to grow to 250 million connections by
2017, according to GSMA. It also expects to see increased mobile broadband penetration in
India, with over 250 million on either 3G /4G by 2017.

According to the GSMAs broadband services report card, the month-on-month (m-o-m)
broadband growth rate in India was at 4.95 per cent, with 60.87 million subscribers as of March
2014. State-owned Bharat Sanchar Nigam Ltd (BSNL) leads the combined wired and wireless
broadband market with 27.54 per cent share.
Investments
With daily increasing subscriber base, there have been a lot of investments and developments in
the sector. Some of the major developments in the recent past are:

Bharti Infratel has planned to take over the telecom towers of Vodafone and Idea Cellular
in India at a valuation of Rs 5,000 crore (US$ 785.82 million). The company is also
scouting for telecom tower acquisition opportunities in Sri Lanka and Bangladesh.

Japanese telecom company Softbank has planned to invest around US$ 10 billion in
Indias IT sector over the next few years.

Ericsson has won Rs 60 crore (US$ 9.42 million) three-year operations support systems
(OSS) deal from Mukesh Ambani-headed Reliance Jio Infocomm, the only pan-India 4G
license holder in the country. Under the deal Ericsson will provide the telecom unit of
Reliance Industries its service fulfillment software solutions comprising nine suites.

Reliance Jio Infocomm Ltd has signed an agreement to share telecom towers of GTL
Infrastructure Ltd. This is the seventh tower-sharing agreement that Reliance Jio has
forged with telecom tower owners in India. This is the seventh tower-sharing agreement
that Reliance Jio Infocomm has forged with telecom tower owners in India.

ISUN is the latest Indian brand in mobile phones and tablet personal computers. The
Chennai-based Exotic Global Trades Pvt. Ltd launched its telecom products under the
ISUN brand that will be bundled with various BSNL schemes.

Reliance Jio Infocomm has planned to raise US$ 1.5 billion from more than two dozen
overseas banks to refinance the loans taken in the year 2010. A total of 26 banks
participated in the deal, including 15 mandated lead arrangers and book runners
(MLABs).

Government Initiatives
The government has fast-tracked reforms in the telecom sector and plans to clear the proposal
allowing spectrum trading and sharing ahead of the year-end deadline as it wants to lift the
business sentiment for the forthcoming airwave auction. Some of the other initiatives taken by
the government are:

The department of telecommunications (Dot) has agreed to the defense ministrys demands for a
defense band and a so-called defense interest zone (DIZ). This move will free up 3G telecom
spectrum for at least three new carriers.
The Government of India has asked telecom firms to implement full mobile number portability
by May 2015, a move that will enable subscribers to retain their numbers when they shift to other
states or licensed service areas.
DoT has planned to frame a separate exit policy for the countrys telecom sector that will allow
companies to leave the business without losing out on the value of the assets. The move is being
seen as part of Government of Indias endeavor to make the countrys telecom sector investorfriendly and enhance the ease of doing business in India.
The telecom department is examining a proposal from the National Manufacturing
Competitiveness Council to float a US$ 1 billion government-sponsored fund to seed 'Made in
India' technologies to boost local gear manufacturing. The proposed telecom manufacturing fund
will infuse equity in start-ups promoted by technocrats and scientists of Indian origin on
condition that product development and manufacturing happens in India.
India's telecommunication network is the second largest in the world based on the total number
of telephone users (both fixed and mobile phone). It has one of the lowest call tariffs in the world
enabled by the mega telephone networks and hyper-competition among them. It has the world's
third-largest Internet user-base. According to the Internet and Mobile Association of India
(IAMAI), the Internet user base in the country stood at 190 million at the end of June, 2013.
Major sectors of the Indian telecommunication industry are telephony, internet and television
broadcast Industry in the country which is in an ongoing process of transforming into next
generation network, employs an extensive system of modern network elements such as digital
telephone exchanges, mobile switching centers, media gateways and signaling gateways at the
core, interconnected by a wide variety of transmission systems using fiber-optics or Microwave
radio relay networks. The access network, which connects the subscriber to the core, is highly
diversified with different copper-pair, optic-fiber and wireless technologies.
DTH, a relatively new broadcasting technology has attained significant popularity in the
Television segment. The introduction of private FM has given a fillip to the radio broadcasting in
India. Telecommunication in India has greatly been supported by the INSAT system of the
country, one of the largest domestic satellite systems in the world. India possesses a diversified
communications system, which links all parts of the country by telephone, Internet, radio,
television and satellite.
Indian telecom industry underwent a high pace of market liberalization and growth since the
1990s and now has become the world's most competitive and one of the fastest growing telecom

markets. The Industry has grown over twenty times in just ten years, from under 37 million
subscribers in the year 2001 to over 846 million subscribers in the year 2011. India has the
world's second-largest mobile phone user base with over 929.37 million users as of May 2012.It
has the world's third-largest Internet user-base with over 137 million as of June 2012.
The total revenue of the Indian telecom sector grew by 7% to 2832 billion (US$44 billion) for
201011 financial year, while revenues from telecom equipment segment stood at 1170 billion
(US$18 billion).
Telecommunication has supported the socioeconomic development of India and has played a
significant role to narrow down the rural-urban digital divide to some extent. It also has helped to
increase the transparency of governance with the introduction of e-governance in India. The
government has pragmatically used modern telecommunication facilities to deliver mass
education programs for the rural folk of India.
The telecom department is examining a proposal from the National Manufacturing
Competitiveness Council to float a US$ 1 billion government-sponsored fund to seed 'Made in
India' technologies to boost local gear manufacturing. The proposed telecom manufacturing fund
will infuse equity in start-ups promoted by technocrats and scientists of Indian origin on
condition that product development and manufacturing happens in India.

History

The beginning

A microwave tower for short distance (~50 km) communication

The history of Indian telecom can be started with the introduction of telegraph. The Indian postal
and telecom sectors are one of the worlds oldest. In 1850, the first experimental electric
telegraph line was started between Calcutta and Diamond Harbour. In 1851, it was opened for
the use of the British East India Company. The Posts and Telegraphs department occupied a
small corner of the Public Works Department, at that time.
The construction of 4,000 miles (6,400 km) of telegraph lines was started in November 1853.
These connected Kolkata (then Calcutta) and Peshawar in the north; Agra, Mumbai (then
Bombay) through Sindwa Ghats, and Chennai (then Madras) in the south; Ootacamund and
Bangalore. William O'Shaughnessy, who pioneered the telegraph and telephone in India,
belonged to the Public Works Department, and worked towards the development of telecom
throughout this period. A separate department was opened in 1854 when telegraph facilities were
opened to the public.
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. On 28 January 1882, 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 the "Central Exchange" had a total of 93 subscribers in its early stage. Later
that year, Bombay also witnessed the opening of a telephone exchange.
Further developments and milestones

Pre-1902 Cable telegraph

1902 First wireless telegraph station established between Sagar Island and Sandhead.

1907 First Central Battery of telephones introduced in Kanpur.

19131914 First Automatic Exchange installed in Shimla.

1927 Radio-telegraph system between the UK and India, with Imperial Wireless Chain
beam stations at Khadki and Daund. Inaugurated by Lord Irwin on 23 July 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.

1979 First optical fiber system for local junction commissioned at Pune.

1980 First satellite earth station for domestic communications established at

Sikandarabad, [[Uttar Pradesh|U.P.] Noida Sector 62SCMS].

1983 First analogue Stored Programme 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.

1995 Internet Introduced in India starting with laxmi nagar delhi on 15 August 1995.

Development of Broadcasting:
Radio broadcasting was initiated in 1927 but became state responsibility only in 1930. In 1937 it
was given the name All India Radio and since 1957 it has been called Akashvani. Limited
duration of television programming began in 1959, and complete broadcasting followed in 1965.
The Ministry of Information and Broadcasting owned and maintained the audio-visual apparatus
including the television channel Doordarshanin the country prior to the economic reforms of
1991. In 1997, an autonomous body was established in the name of Prasar Bharti to take care of
the public service broadcasting under the Prasar Bharti Act. All India Radio and Doordarshan,
which earlier were working as media units under the Ministry of I&B became constituents of the
body.[11]
Pre-liberalization statistics:
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 numbered only around 80,000. Post
independence, growth remained slow because the telephone was seen more as 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.
Liberalization and privatization

Liberalization of Indian telecommunication industry started in 1981 when Prime Minister India
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. Attempts to liberalize the telecommunication industry were
continued by the following government under the prime-minister-ship of Rajiv Gandhi. He
invited Sam Pitroda, a US-based Non-resident Indian NRI and a former Rockwell International
executive to set up a Centre for Development of Telematics(C-DOT) which manufactured
electronic telephone exchanges in India for the first time. Sam Pitroda had a significant role as a
consultant and adviser in the development of telecommunication in India.
In 1985, the Department of Telecom (DoT) was separated from Indian Post &
Telecommunication Department. DoT was responsible for telecom services in entire country
until 1986 when Mahanagar Telephone Nigam Limited (MTNL) and Videsh Sanchar Nigam
Limited (VSNL) were carved out of DoT to run the telecom services of metro cities(Delhi and
Mumbai) and international long distance operations respectively.

The demand for telephones was ever increasing and in the 1990s Indian government was under
increasing pressure to open up the telecom sector for private investment as a part of
Liberalization-Privatization-Globalization policies that the government had to accept to
overcome the severe fiscal crisis and resultant balance of payments issue in 1991. Consequently,
private investment in the sector of Value Added Services (VAS) was allowed and cellular
telecom sector were opened up for competition from private investments. 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. The policy introduced
the concept of telecommunication for all and its vision was to expand the telecommunication
facilities to all the villages in India. Liberalization in the basic telecom sector was also envisaged
in this policy. They were also successful in establishing joint ventures between state owned
telecom companies and international players. Foreign firms were eligible to 49% of the total
stake. The multi-nationals were just involved in technology transfer, and not policy making.
During this period, the World Bank and ITU had advised the Indian Government to liberalize
long distance services 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 licence was given to each
provider. During all these improvements, the government did face oppositions from ITI, DoT,
MTNL, VSNL and other labour unions, but they managed to keep away from all the hurdles.
Ownership, service and regulation of telecommunications infrastructure. The policy introduced
the concept of telecommunication for all and its vision was to expand the telecommunication
facilities to all the villages in India. Liberalization in the basic telecom sector was also envisaged
in this policy. They were also successful in establishing joint ventures between state owned
telecom companies and international players. Foreign firms were eligible to 49% of the total
stake. The multi-nationals were just involved in technology transfer, and not policy making.
In 1997, the government set up TRAI (Telecom Regulatory Authority of India) which reduced
the interference of Government in deciding tariffs and policy making. 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. In 2000, the Vajpayee government
constituted the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) through an

amendment of the TRAI Act, 1997. The primary objective of TDSAT's establishment was to
release TRAI from adjudicatory and dispute settlement functions in order to strengthen the
regulatory framework. Any dispute involving parties like licensor, licensee, service provider and
consumers are resolved by TDSAT. Moreover, any direction, order or decision of TRAI can be
challenged by appealing in TDSAT. The government corporatized the operations wing of DoT on
1 October 2000 and named it as Department of Telecommunication Services (DTS) which was
later named as Bharat Sanchar Nigam Limited (BSNL). The proposal of raising the stake of
foreign investors from 49% to 74% was rejected by the opposite political parties 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.
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 licences to
private operators. The government further reduced licence 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 middleclass 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. [25] Many private operators,
such as Reliance Communications, Tata Indicom, Vodafone, Loop Mobile, Airtel, Idea etc.,
successfully entered the high potential Indian telecom market.
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.[26] 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 suspended the
usage of around 30 million mobile phones (about 8% of all mobiles in the country) by 30 April.
Phones without valid IMEI cannot be connected to cellular operators. [27] 56 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 taken by regulators and licensors, the total number of mobile subscribers has increased
rapidly to over 929 million subscribers as of May 2012.
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 200304 and 200405.

Sectors

Major sectors of telecommunication industry in India are telephony, internet, Data centers and
broadcasting.
Telephony
The telephony segment is dominated by private-sector and two state-run businesses. Most
companies were formed by a recent revolution and restructuring launched within a decade,
directed by Ministry of Communications and IT, Department of Telecommunications and
Minister of Finance. Since then, most companies gained 2G, 3G and 4G licences and engaged
fixed-line, mobile and internet business in India. On landlines, intra-circle calls are considered
local calls while inter-circle are considered long distance calls. Foreign Direct Investment policy
which increased the foreign ownership cap from 49% to 74%.Now it is 100%.
The 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. Several international fiber-optic links include
those to Japan, South Korea, Hong Kong, Russia, and Germany. Some major telecom operators
in India include Airtel, Vodafone, Idea, Aircel, BSNL, MTNL, Reliance Communications, TATA
Teleservices, Infotel, MTS, Uninor, TATA DoCoMo, Videocon, Augere, Tikona Digital.
Fixed telephony
Until the New Telecom Policy was announced in 1999, only the Government-owned BSNL and
MTNL were allowed to provide land-line phone services through copper wire in India with
MTNL operating in Delhi and Mumbai and BSNL servicing all other areas of the country. Due to
the rapid growth of the cellular phone industry in India, landlines are facing stiff competition
from cellular operators. This has forced land-line service providers to become more efficient and
improve their quality of service. Land-line connections are now also available on demand, even
in high density urban areas. India has over 31 million main line customers.
Mobile telephony
In August 1995, Chief Minister of West Bengal, Shri Jyoti Basu ushered in the cellphone
revolution in India by making the first call to Union Telecom Minister Sukhram. Sixteen years
later 4th generation services were launched in Kolkata.
With a subscriber base of more than 929 million, the Mobile telecommunications system in India
is the second largest in the world and it was thrown open to private players in the 1990s. GSM
was comfortably maintaining its position as the dominant mobile technology with 80% of the
mobile subscriber market, but CDMA seemed to have stabilized its market share at 20% for the
time being. By May 2012 the country had 929 million mobile subscribers, up from 350 million
just 40 months earlier. The mobile market was continuing to expand at an annual rate in excess
of 40% coming into 2010.

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.
The rates are supposed to go down further with new measures to be taken by the Information
Ministry. In September 2004, the number of mobile phone connections crossed the number of
fixed-line connections and presently dwarfs the wire line segment by a ratio of around 20:1.
The mobile subscriber base has grown by a factor of over a hundred and thirty, from 5 million
subscribers in 2001 to over 929 million subscribers as of May 2012. 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. The
government allowed Mobile number portability (MNP) which enables mobile telephone users to
retain their mobile telephone numbers when changing from one mobile network operator to
another. India is divided into 22 telecom circles:
Internet
The history of the Internet in India started with launch of services by VSNL on 15 August 1995.
They were able to add about 10,000 Internet users within 6 months. However, for the next 10
years the Internet experience in the country remained less attractive with narrow-band
connections having speeds less than 56 kbit/s (dial-up). In 2004, the government formulated its
broadband policy which defined broadband as "an always-on Internet connection with download
speed of 256 kbit/s or above." From 2005 onward the growth of the broadband sector in the
country accelerated, but remained below the growth estimates of the government and related
agencies due to resource issues in last-mile access which were predominantly wired-line
technologies. This bottleneck was removed in 2010 when the government auctioned 3G spectrum
followed by an equally high profile auction of 4G spectrum that set the scene for a competitive
and invigorated wireless broadband market.
Now Internet access in India is provided by both public and private companies using a variety of
technologies and media including dial-up (PSTN), xDSL, coaxial cable, Ethernet, FTTH, ISDN,
HSDPA (3G), Wife, WiMAX, etc. at a wide range of speeds and costs. As per IAMAI India will
have the world's second largest number of Internet users with over 300 million by December
2014.
According to the Internet and Mobile Association of India (IAMAI), the Internet user base in the
country stood at 190 million at the end of June, 2013. As of October, 2013 report, it is over 205
million. The number of broadband subscribers at the end of May 2013 was 15.19 million.
Cumulative Annual Growth rate (CAGR) of broadband during the five-year period between 2005
and 2010 was about 117 per cent. DSL, while holding slightly more than 75% of the local

broadband market, was steadily losing market share to other non-DSL broadband platforms,
especially to wireless broadband.
There were 161 Internet Service Providers (ISPs) offering broadband services in India as of 31
May 2013. The top five ISPs in terms subscriber base were BSNL (9.96 million), Bharti Airtel
(1.40 million), MTNL (1.09 million), Hathway (0.36 million) and You Broadband (0.31 million).
Cyber cafes remain the major source of Internet access. In 2009, about 37 per cent of the users
access the Internet from cyber cafes, 30 per cent from an office, and 23 per cent from home.
However, the number of mobile Internet users increased rapidly from 2009 on and there were
about 274 million mobile users at the end of September 2010, with a majority using 2G mobile
networks. Mobile Internet subscriptions as reported by the Telecom Regulatory Authority of
India (TRAI) in March 2011 increased to 381 million.
One of the major issues facing the Internet segment in India is the lower average bandwidth of
broadband connections compared to that of developed countries. According to 2007 statistics, the
average download speed in India hovered at about 40 KB per second (256 kbit/s), the minimum
speed set by TRAI, whereas the international average was 5.6 Mbit/s during the same period. In
order to attend this infrastructure issue the government declared 2007 as "the year of broadband".
To compete with international standards of defining broadband speed the Indian Government has
taken the aggressive step of proposing a $13 billion national broadband network to connect all
cities, towns and villages with a population of more than 500 in two phases targeted for
completion by 2012 and 2013.
The network was supposed to provide speeds up to 10 Mbit/s in 63 metropolitan areas and 4
Mbit/s in an additional 352 cities. Also, the Internet penetration rate in India is one of the lowest
in the world and only accounts for 8.4% of the population compared to the rate in OECD
counties, where the average is over 50%. Another issue is the digital divide where growth is
biased in favor of urban areas; according to 2010 statistics, more than 75 per cent of the
broadband connections in the country are in the top 30 cities. Regulators have tried to boost the
growth of broadband in rural areas by promoting higher investment in rural infrastructure and
establishing subsidized tariffs for rural subscribers under the Universal service obligation scheme
of the Indian government.
Wireless Internet
2nd Generation Internet is the most prevalent in India. Wireless ISPs in India use both CDMA
and Edge technologies for 2G.
India's wireless Internet frequencies are:

2G : GSM 900 MHz, GSM 1800 MHz

3G : UMTS 2100 MHz

4G : TD-LTE 2300 MHz

Data centers

BSNL Internet Data Centers, in collaboration with Dimension Data

Trimax IT Infrastructure & Services Limited - Tier III data centers in Mumbai and
Bengaluru

Sify Technologies Limited

CtrlS Datacenters Ltd

Tata Communications Limited

Netmagic Solutions

Reliance Datacenter

Web Werks IDC

Net4 Datacenter

RackBank Datacenter

GPX Global Systems Inc.

Recent government policies and growth targets

All villages shall receive telecom facilities by the end of 2002.

A Communication Convergence Bill introduced in the Parliament on 31 August 2001 is

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, a fourth cellular operator, one each in four metros and
thirteen circles, has been permitted. Cellular operators have been permitted to provide all
types of mobile services including voice and non-voice messages, data services and
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) and Voice Mail/ Audited/ Unified Messaging Services.

Wireless Local Loop (WLL) has been introduced to provide telephone conations 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), 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).

National Optical Fiber Network (NOFN), a project aimed to ensure broadband

connectivity to over two lakh (200,000) gram panchayats of India by 2016.

Regulatory environment
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 45 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 the end of 2007 clearly indicates that the
regulatory environment is not very conducive.
In 2013 the home ministry stated that legislation must ensure that law enforcement agencies are
empowered to intercept communications.
Revenue and growth
The total revenue in the telecom service sector was 867.2 billion (US$13.6 billion) in 200506
as against 716.74 billion (US$11.3 billion) in 20042005, registering a growth of 21% with
estimated revenue of FY'2011 of 8.35 billion (US$130 million). The total investment in the
telecom services sector reached 2006 billion (US$31.5 billion) in 200506, up from 1788
billion (US$28.1 billion) in the previous fiscal.
Telecommunication is the lifeline of the rapidly growing Information Technology industry.
Internet subscriber base has risen to more than a 121 million in 2011. Out of this 11.47 million
were broadband connexions. More than a billion people use the Internet globally. Under the
Bharat Nirman Programe, 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.
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 up from 2.3 million in December 2004.
The Total Revenue of Indian Telecom Services company is likely to exceed 2000 billion
(US$31 billion) (US$44 Bn approx) for FY 1112 based on FY 1011 nos and latest quarterly
results. These are consolidated numbers including foreign operation of Bharti Airtel. The major
contributions to this revenue are as follows:

Airtel 65060 (US$1,000)

Reliance Communications 31468 (US$490)

Idea 16936 (US$270)

Tata Communications 11931 (US$190)

MTNL 4380 (US$69)

TTML 2248 (US$35)

BSNL 32045 (US$500)

Vodafone India 18376 (US$290)

TataTeleservice 9200 (US$140)

Aircel 7968 (US$130)

SSTL 600 (US$9.40)

Uninor 660 (US$10)

Loop 560 (US$8.80)

Stel 60 (94 US)

HFCL 204 (US$3.20)

Videocon Telecom 254 (US$4.00)

DB Etisalat/ Allianz 47 (74 US)

Grand Total 2019 billion (US$32 billion)

New Services:
Cellular Mobile Services
Cellular Mobile services started in India, through licenses issued to private operators, by the end
of 1995 in the four metro cities. Now the service is available in most part of the country, the
customer base being about 14 lakh. Department of Telecom Services also have planned to
provide these services.
Personal Communication Service is an emerging concept in area of telecommunications. PCS
has been conceived as a superset of fixed and mobile network services with wide access and
coverage using hand portables with access number independent of terminals or geographic
locations. Government of India decided in August 1998 to introduce Global Mobile Personal

Communication by Satellite (GMPCS) services in the country. License was issued to one
company and this service is operational from February 1999.
Voice Mail Service
It is a computer based system and has the ability to record, send and process Voice, FAXmessages for telephone subscribers. Department has plans to introduce this service in the State
capitals and other major cities and towns.
Card Payphones
In order to improve the accessibility of telecom facilities, public Pay Phones which can be
operated with Card are being introduced in the network. Through these pay phones local, STD
and ISD calls will be possible.
Internet Services
Internet is the new service which has been introduced in the last couple of years. Today, we have
got a customer base of about 5 lakh in India. Globally, the internet is experiencing explosive
growth for the last few years. To take advantage of this technology, the government has already
decided to provide internet services through private operators in India. It is expected that there
will be about three million internet subscribers by the end of 2002. A large number of
technological changes are taking take place in Internet also. Today, Internet telephony is not
being permitted but in future its quality and cost structure will force this technology to be
adopted by everyone.
Intelligence Network (IN) Services
Intelligence Network services, such as free phone, account card calling, premium rate or
information service, etc. have already been introduced in several cities and towns. Use of
telephone for distant education and telematics will be introduced in the coming years. Other
applications, such as Electronic Commerce, tele-shopping, commercial banking etc. on Internet
are round the corner. Multi-media is another application which is going to see larger applications
in the coming years. Video-conferencing on ISDN has already started in the country. Satellite
mobile communication using lower earth orbit Satellites and medium earth orbits satellites have
been provided. Government of India took a policy decision in August 1998 to introduce the
Global Mobile Personal Communication by Satellite (GMPCS) services in the country. This
service is also operational with effect from February 1999.
New Technologies:
Asynchronous Transfer Mode (ATM)

ATM is the transport technique for providing efficient support of voice, video and data in the
same network. It is also considered to provide high capacity pipe lins for Internet infrastructure.
Department has decided to introduce this technology in the network with, initially, five nodes at
Delhi, Mumbai, Calcutta, Chennai and Bangalore. These no
Managed Leased Data Network (MLDN)
MLDN has various elements such as leased lines, multiplexers; cross connects etc. with a central
Network Management System (NMS) for the management of various components. This system
will provide more efficient and versatile services to the leased line customers. Delhi and Mumbai
have the systems and it has been planned to introduce this system in a few more cities.
Customer Access Network
Introduction of new technologies such as High bit rate Digital Subscriber Line (HDSL) and
Asynchronous Digital subscriber Line (ADSL) has been planned in the existing copper based
customer access, to enhance its bandwidth. In addition new technologies using Optical Fiber
such as Digital Loop Carrier (DLC), Fiber to the Curb etc along with massive induction of
Wireless in Local Loop (WLL) are also being planned. Already Indigenously developed (IIT,
Chennai) WLL systems of 56,000 lines in 800 MHz and 25,000 lines 1800 MHz are planned to
be tried out.
Satellite Based Systems for Village Public Telephones.
For some of the remote far-flung areas, for the provision of Village Public Telephones Satellite
based technology is the only solution. For this INMARSAT Mini-M terminals will be used. A
few terminals of this type are already operational.
Players in the market
BSNL is the market leader with a 67.7 per cent share followed by MTNL with 11.5 per cent
market share. Next is Bharti Airtle at 10.9% followed by Tata and Reliance at 5% and 4.1%
respectively.
BSNL as a company is growing and showed annual revenues of approximately $4.5 billion as of
2014. BSNL is serving more than 125 million customers across the country and is catalyst in
checking the price point for telecom services.
Also, with the government intensifying its rural focus; only BSNL can turn into reality the next
wave of rural telecom penetration.

BSNL is a 100% Central Government entity and employees with BSNL are entitled to get
salaries and perks as decided by Government of India and not by BSNL However both, MTNL
and BSNL are plagued by declining revenues coupled with high costs. BSNL has massive
infrastructure, manpower, systems, and 80 per cent of landlines and 90 per cent of broadband
connections in India are operated by it.Vodafone is investing nearly US$ 3 billion over the next
two years in India in expanding its network infrastructure and distribution channel in the
country, as per Vittorio Colao, CEO, Vodafone Plc.
BlackBerry plans to set up enterprise solutions centers to educate corporate customers about
various BlackBerry Enterprise Service (BES) 10 solutions. "India is one of the fastest growing
markets in terms of smart phone and mobile data adoption, said according to Sunil Lalvani,
Managing Director (MD), and BlackBerry India.Tata Teleservices plans to set up nearly 4,000
Wi-Fi hotspots in nine cities across the country in the next two years.
Booming sectors
The tide has turned for the telecom sector in India, as growth and profitability has accelerated in
recent times. Tower companies are reaping benefits of a turnaround in the sector as operators
have started investing in networks to boost data penetration.
However it is in the countrys booming mobile segment in which the major battles are being
fought. Three major private players Bharti, Reliance and Vodafone - with a formidable 54%
share of the market between them, lead a large field of mobile operators. State-owned enterprises
BSNL and MTNL have also been making their presence felt with a combined market share of
12%.
A look ahead
According to Craig Wigginton, vice chairman and U.S. Telecommunications leader, Deloitte &
Touche LLP, the big challenge for the telecom industry in 2014 which also presents a major
growth opportunity for the sector is that consumers are getting addicted to connectivity and
speed.
The ongoing expansion of the mobile ecosystem, coupled with demand for high-bandwidth
applications and services such as video and gaming, is keeping pressure on the industry to
increase the availability and quality of broadband connectivity.
What does this mean for players in the sector? Carriers will continue to pursue technological
advancements to handle demand, including offloading some mobile bandwidth needs to Wi-Fi,
which is proving an effective complement to mobile networks. At the same time, long-term

spectrum availability, spectrum efficiency, small cells and continued backhaul improvements are
likely to be a key focus to assure continued mobile broadband momentum.

CHALLENGES FACED BY TELECOM SECTOR:

The telecommunications marketplace is changing rapidly and telco operators must remain
responsive in order to keep up. With that in mind, heres a look at some of the key challenges
facing our industry today as well as some strategies for how to deal with them:

1. Making data a priority

Customers value access to data more than they do voice. Even though service providers may not
own OTT services, they are still expected to provide superior user experience and performance
when their subscribers use them. The ongoing rise in OTT players is creating a challenge for
telco operators that are not earning any extra income off of the additional bandwidth that users
are demanding. In order to deal with this, telecommunications providers need to shift from
legacy voice-centric strategies to data-driven plans. Along with this, operators should look at
expanding their data-carrying capacity to provide superior service to both existing and new
subscribers.
2. Monetizing new services
With the consumers ever-increasing demand for data, telco providers cannot afford to ignore
OTT services. In order to compete with existing OTT players, telco providers can start providing
high-quality, value-added services such as HD video conferencing or mobile office
environments. Telecommunications providers must deliver these services quicklya new
technology roll-out needs to take months, not years. Reducing time to market will allow players
to remain at the forefront of innovation in the minds of consumers. The next big thing will be
here next year, not next decade.
3. Building a brand
A key to success in developing these new services is building a brand thats known for
innovation. To remain relevant, telco operators cannot simply offer the same things as every
other player. They must differentiate themselves by investing in the business intelligence
necessary to understand consumer wishes before their competitors and then using that knowledge
to build applications and delivery models that customers want to purchase. Part of this will be
adding features that other players cannot match, such as enhanced performance and uptime and
exclusive content.

4. Leveraging the right infrastructure

With data usage on the rise, telecommunications operators need to examine their existing
framework and make adaptations to increase flexibility and reliability when necessary. Choosing
controlled and scalable carrier-grade servers can help with this, as can capitalizing on new
concepts, such as cloud-based solutions machine-to-machine (M2M) connectivity.
5. Controlling costs
With all the new service rollouts happening and changes taking place, operators must be sure to
control the costs of the current solutions so they can invest in whats coming next. Developing
scalable services now can help manage future costs, since operators will be able to react rapidly
to market changes.

KEY CONCERN OF THE TELECOM INDUSTRY:

The Union Budget 2015 aims at growth of the economy and to raise the countrys profile as an
investment destination. Though the tax proposals announced by the Finance Minister are
expected to have a positive impact for the taxpayers in general, the Indian telecom Industry,
which has played a pivotal role in the growth of the economy during the last two decades, could
well be disappointed with the announcements.
The Budget has clearly failed to address some of the key concerns of the Industry players with a
couple of them being rationalization of the amended royalty provisions (amended by Finance
Act, 2012) to provide for exclusion of standard telecom services, including clarification to
reiterate supremacy of the tax treaty provisions by providing that such amendments should not be
read into the tax treaties; and providing relief to the Industry players from the litigation faced by
the telecom operators on account of allegations of Indian revenue that the independent
distributors appointed for distribution of pre-paid products are agents of telecom operators and
thus, margin paid to them qualifies as commission subject to tax withholding at the rate of 10%.
On the indirect tax side as well, requests for allowing CENVAT credit of Special Additionally
Duty (SAD) paid on imports of capital goods and inputs; abatement for Value Added Services
(VAS) to mitigate burden of dual levy of service tax and entertainment tax; accelerated
deduction at the time of reversal of CENVAT credit on removal of used capital goods; etc. have
not been considered.
Besides, no incentives have been offered to the incentive starved Industry, which would have
gone a long way in attracting further investments and contributing further to the growth of the
economy and the Digital India campaign of the Government. Having said that, reduction of the
tax rate on royalty and technical services payments made to non-resident parties to 10% (from
the existing 25%) is expected to ease the financial burden for the Industry which, in this

technologically advanced era, is heavily dependent on foreign technology and services with
generally the contracts requiring Indian players to bear the withholding tax cost.
Similarly, amendments in the indirect transfer tax provisions; proposal to reduce corporate
income-tax rate to 25% over a 4 year period in a phased manner; deferral of General Anti
Avoidance Rules (GAAR) for another 2 years; grandfathering of investments made upto March
31, 2017 under GAAR provisions; implementation of Goods and Service Tax (GST) from April
1, 2016; exemption from SAD on raw materials used in the manufacture ITA products; etc., are
some welcome steps that should ensure incidental benefits to the Industry.
At the same time, stipulating compulsory reporting requirements (hitherto applicable to the
remittances reported as taxable by the remitter) for every overseas remittance would increase the
procedural compliances, administrative inconvenience and costs for the Industry players.
Similarly, on the indirect tax side, increase in the excise duty on mobile handsets (including cell
phones without Cenvat Credit) from existing 6% to 12.5% and increase in the service tax rate to
16% may not go down well with the Industry players. In summary, given the seemingly high prebudget expectations of the Industry players riding on the Achey Din promise of the Modi
Government, the present Budget may end-up having a negative impact on the telecom Industry
on account of its failure to meet the key demands/ expectations.
Availability of adequate spectrum:
Spectrum is the oxygen of a telecom industry and its inadequacy leads to poor quality of
services. The telecom industry would look forward to adequate availability of spectrum. In the
upcoming spectrum auction, the government is putting up only 5 MHz for the sale in the 2100
band. Clear policy around spectrum: The telecom industry has been in a fix in the absence of no
clear cut policy around spectrum. Keeping in mind, the limited availability of spectrum, the
budget should give a clear direction around spectrum trading and sharing. Rationalization of
taxes: The telecom sector is today affected by multiple taxes. The telecom industry looks
forwards to doing away with these taxes. At present, the sector pays levies such as excise duty,
custom duty, service tax, revenue share, spectrum charges, TDS, etc. Lower withholding tax rate:
The industry wants the government to rationalize tax rate on margins allowed to distributors. At
present, telecom operator appoints a distributor to sell telecom vouchers to the end users and the
margin allowed to such distributors is alleged to be 'commission' subject.

Key submissions on Indirect Taxes are as follows:

1. Goods & Services Tax (GST):

The chief concern of the industry is that the increase in rate of tax from current 12 percent
(service tax) to a higher rate under GST would increase the cost of telecom service, an essential
service, for common man.
This would be in the backdrop of the increased spectrum valuation announced recently for the
ensuing auctions. A consultation process with trade and industry bodies should be initiated for
GST, and a platform for such consultation should be formed.
The draft laws, rules and procedures should be circulated for comments and the final law should
be made available at least 6-8 months before the date of implementation of GST.
Since, place of supply rules for telecom services are distinct in almost all the overseas
jurisdictions; India would also need distinct place of supply rules for telecom services under the
GST regime.
Also, the compliance requirements under GST should be made uniform, user-friendly and
simple for businesses and other stakeholders.

2. Payment of customs duty for telecom products:

In last year's budget, exemption from payment of customs duty was withdrawn on import of
specified telecom products without mentioning the specific name / description of the products.
COAI has requested that the specific names of these items / products should be stated, without
which classification of goods have become ambiguous.
Further, COAI has suggested that the telecom goods manufactured in India in Special Economic
Zones should be exempted from basic customs duty. These manufacturers, including foreign
companies, meet the objective of 'Make in India' and are promoting domestic manufacturing.
Such exemption would lower the cost of telecom network while at the same time, supporting the
'Digital India' project of the Hon'ble Prime Minister.
4.Rate of interest:
In last budget, the rate of interest on delayed payment of service tax was increased to 30 percent.
This rate of interest is not compensatory but penal in nature and the same should be reduced to a
more reasonable rate.
4. Cenvat Credit:
In last budget, the time limit for claiming Cenvat credit was stipulated as six months from the
date of issue of invoice. COAI has suggested that the stipulation be changed to six months from
the date of issue of invoice or six months from the date of payment of invoice, whichever is later.
Key submissions on Direct Taxes are as follows:

1. Taxability of Interconnect Usage Charges:

Telecom companies regularly make payments to other providers towards various standardized
telecommunications services (such as interconnect usage charges and roaming) and there has
been extensive litigation in India on taxability of such payments made to non-resident operators.
Currently, the issue of taxability of interconnect usage charges is sub-judice whereas for
International Private Leased Circuit and satellite services, the judiciary in India has
unequivocally held that these are standard services and hence fee for same cannot be taxed as
royalty under Indian tax laws.
However, Finance Act, 2012, retrospectively amended the definition of 'royalty' to include
transmission by satellite, cable, optic fiber, or similar technology. By virtue of this amendment,
payments made by telecom companies, even for standard telecom services could be considered
as 'royalty' by tax authorities, resulting in protracted litigation and would put Indian operators
under an obligation to withhold taxes on such payments.
Hence, it imposes an obligation to withhold tax from payments which have already been made in
past and cannot be recovered. It would result in an increase in the cost for end consumers in
India since such payments are generally made on net of tax basis, i.e., tax cost in India cannot be
passed on to the international operator.
This amendment is contrary to the provisions contained in the Double Taxation Avoidance
Agreements signed by India with other countries and internationally recognized meaning of
'royalty', which ordinarily includes payment for use of industrial, scientific or commercial
equipment or payment for use of a secret process, formula, etc. Most developed countries like
US; UK and Canada define the term royalty to include payment for a process, formula or a
technique but not for standard services like telecom services. Accordingly, to protect the interests
of Indian telecom industry and avoid increase in the cost of telecom services for Indian
consumers, definition of the term 'royalty' should be reinstated with retrospective effect, as it was
before the amendment in 2012, which is also aligned with international practice.
2. Tax Withholding on Discount Offered to Distributors:
Telecom companies sell SIM cards and prepaid vouchers to independent Distributors at a
discount, who further sell to Retailers and/ or subscribers. Telecom companies do not withhold
tax on discount offered to Distributors, basis an argument that discount is not in the nature of
commission as Distributors are not agents of Telecom companies.
However, Revenue authorities have adopted a contrary position that tax withholding is required
on margins earned by Distributors. This matter is presently pending before the Supreme Court of
India, resulting in severe litigation costs for the industry. It is suggested that the Government

introduces new provisions or amends the existing provisions of the Act, thereby clarifying the
methodology to be adopted for withholding taxes on discount offered to Distributors by Telecom
companies.
Considering the low margins earned by Distributors in Telecom industry, a lower withholding tax
rate may be prescribed for Distributor margins. Also, since discount offered to Distributors is
shared with Retailers appointed by them, Distributors should be exempted from withholding
taxes on Retailer margins to avoid duplicity of withholding tax incidence in the supply chain of
pre-paid telecom products.

REVIEW AND LITREATURE:

Different approaches to employee involvement in decision making have been identified. The best
known approaches that have attracted scholarly attention are employee involvement and
employee participation. Employee involvement as defined by Marchington and Parker (1990)
consists of those practices which are initiated principally by management, and are designed to
increase employee information about, and commitment to, the organization . It is a process
usually initiated by management to increase the information given to employees and thus,
enhance their commitment to the success of the organization. There are different mechanisms for
employee involvement in decision making. Attitude survey is one of the ways of involving
employees by seeking their views on matters that concerns them. It can be used to obtain views
about processes such as job evaluation, pay determination and performance management in order
to assess their effectiveness and the degree to which employees feel they are fair. It can also be
used to elicit views about personnel policies and how they operate in such areas as equal
opportunity, employee development, and health and safety (Armstrong, 2001). The methods of
conducting attitude surveys are structured questionnaires, interview and focus group discussion.
Armstrong (2001) suggests that interviews are preferred because they are more likely to be
revealing. It can be argued, that, one of the greatest failings which results from the top-down
type of management is for management to ignore the knowledge that exists at the other levels or
departments in the organization.
Quality circles, sometimes called improvement groups, can be used to overcome this problem. It
is a form of upward problem solving. Quality circles are small groups of volunteers who are
engaged in related work and who meet regularly to discuss and propose ways of improving
working methods or arrangements under a trained leader (Armstrong, 2001). Quality circles
provide opportunities to tap the knowledge of employees, who may know more about work
problems which might be hidden from managers. Suggestion schemes can provide a valuable
means for employees to participate in improving the efficiency of the company. De Cenzo and
Robbins (1994) called it suggestion programme. They defined it as a process whereby
employees have the opportunity to tell management how they perceive the organization is

doing. That is suggestion programmes give employees the chance to tell management what
they are doing right and what they are doing wrong. If suggestion schemes are properly
organized, they reduce the feeling of frustration where people think they have good ideas but
cannot get them considered because there are no recognized channels of communication. There
should be an established procedure for submitting and evaluating ideas, with tangible recognition
for those which have merit.
According to Armstrong (2001), the methods of suggestion schemes are suggestion boxes,
individuals and committees to whom suggestions are submitted and publicity in the form of
posters, leaflets and articles in the companys magazine. Employee participation provides
workers or their representatives with the opportunity to take part in and influence decisions that
affect their working lives. It involves workers exerting a countervailing and upward pressure on
management control (Bratton and Gold, 2003). Blyton et al (2004) in Butler and Glover (2007)
described employee participation as more fundamentally power oriented which is typically about
joint decision making or co-determination. Direct participation refers to those forms of
participation in which individual employees are involved in decision making processes that
affect their everyday work routines (Bratton and Gold, 2003). Briefing groups are systems of
communication that involves line managers disseminating information approved by top
management to the workforce on a regular basis. The rationale for such task-level involvement is
related to managerial attempts to generate greater efficiency through the reduction of supervisory
time and effectiveness by tapping into the know-how of employees (Lewis, Thornhill and
Saunders, 2003).
Indirect participation refers to those forms of participation in which representatives of the main
body of employees participate in the decision making process (Bratton and Gold, 2003). Joint
consultative committee is essentially a means for management and employees to get together in
consultative committees to discuss and determine matters affecting their joint or respective
interest (Armstrong, 2001).
Banfield and Kay (2008) identified the three (3) perspectives that are most frequently referred to.
The unitary perspective is important because of the implications it has for the authority of
management and its reaction to any challenges to its dominant position. This means that
subordinates do not have the right to share their views or their voices are limited and they are
compelled to accept every decision from management. There is a belief that subordinates who
question managers are trouble makers. Management see participation as a threat and the most
appropriate way to manage conflict is the removal of individual trouble makers. Another
perspective identified by Banfield and Kay (2008) is the pluralism perspective.
Pluralism literally means more than one and it reflects a view of society in which many
different groups coexist in a state of partial and mutual interdependence. This also can be seen in
the context of employment relations. The existence of different groups and interests reflects
differences in occupation, roles and functions. The differences can emerge as a result of how
organizations are managed and controlled and there is the recognition that objectives of
managers and workers can be on such issues as job security, employee rights and pay. As a result
of existence of different groups and interests, conflict is welcomed as an uncontrollable
consequence. Thus, conflict is not perceived as the work of outside trouble makers but it is

managed and resolved through the creation of institutional mechanisms such as collective
bargaining and arbitration.
The radical or Marxist perspective was also noted by Banfield and Kay (2008). This perspective
is associated with those who reject capitalist society and its institutions. It is founded on the
analysis and critique of capitalist society by Karl Marx (1818-1883) and it has been an important
contribution to understanding the contradictory forces that shape society and the economy.
Society is based on a hierarchy within which class, wealth and power determines a persons
social status and importance. These indicators can also be seen at the work place where workers
are at the bottom of the hierarchy, (subordinates) who are agents of capitalism (managers) and
are dependent on them for employment.
The inequality between employers and workers is based on the ownership of the means of
production and the exploitation of workers in generating wealth. Participation is an expression of
the political interests of workers that attempts to improve the terms of employment and also
challenges the system of power and control that places workers in a position of social and
economic subordination. Industrial conflict is an instrument that can be used to achieve political
change as well as improvement to the terms under which workers are employed.
Research has indicated that motivation and training and development for employees enhance
workers performance. Besides, employee involvement in decision making affects workers
performance. As a result of this, commitment of employees to the organizational goals is
achieved. One of the channels through which workers performance can be enhanced is giving
employees more autonomy in making decisions that affect their job. This also affects the
performance of the organization. From an HRM point of view, this is referred to as
empowerment (De Cenzo and Robbins, 1994). Bohlander and Snell (2004) defined
empowerment as a technique of involving employees in their work through the process of
inclusion.
Bohlander and Snell (2004) continued to argue that empowerment encourages employees to
become innovators and managers of their own work, and it involves them in their jobs in ways
that give them more control and autonomous decision making capabilities. This means granting
employees power to initiate change, thereby encouraging them to take charge of what they do.
However, from managers point of view empowerment means managers desire from their staff to
extend their contributions, quicken problem solving, be more proactive and take increased
responsibility. Employees also view empowerment as a tool that provides them with more
freedom in their decision making processes. It allows them to achieve a higher degree of
autonomy).
The major obstacle to employee involvement in decision making is resistance to change by
management (Bratton and Gold, 2003). Managers construct an organizational culture that reflects
their own ideologies and styles of management and reinforce their strategies and control.
Employee involvement in decision making poses threat to the more autocratic manager.

Evidence provided by Rendall (1986) in Bratton and Gold (2003) suggests, however, that many
managers tend to resist participation because it is contrary to their habit-formed ways of
thinking and behaving. In addition, failure to respond to employee recommendations is an
example that reduces employee involvement in decision making. If management does not
acknowledge employees recommendations, employees rapidly conclude that management has
no interest in their ideas.
Fear is another obstacle to employee involvement in decision making. Fear is one of the
characteristics found mostly in private organizations. At times employees fear that they might
lose their jobs if they voice out their views. Any employee involvement in decision making that
is attempted over a foundation of fear will collapse. This is because fear prevents good
relationship between employees and management in organizations

OBJECTIVES:
1. To ascertain workers level of involvement in the decision making process of the organization.
2. To establish the general attitude of workers towards workers participation in management
decision making.
3. To investigate the implications of worker participation to worker and their organizations.
4. To propose suggestions to overcome the encountered lapses.

RESEARCH METHADOLOGY:
Research methodology is a systematic way to solve a research problem. The methodology should
combine economy with efficiency.
Research Methodology, the system of data collection for the research projects helps a Masters or
PhD student in their complete research work. Either the data is collected for theoretical approach
or practical one, for example a research conducted in the subject in management may be
conceptualized strategically along with operational planning methods and change management.
The validity of research data, ethics and the reliability is included in the important factors of the
Research Methodology, which measures most of your work is finished by the time you finish the
analysis of your data.
The Research Methodology altogether starts from the research questions formulation in parallel
to the sampling whether it may be probable or non-probable which is followed by the
measurement which include surveys and scaling. Research Design, the other component of
Research Methodology may be either experimental or quasi-experimental. The final stages are
statistical data analysis and Interpretation and finally writing the research paper after organizing
the graphs and tables carefully to ensure that only relevant data is shown.
The way you approach your question will have a profound effect upon the way you construct
your dissertation, so this section discusses the types of research you might undertake for your
dissertation. The use of literature and case studies is considered and the merits of primary

research are debated and advice is given on the use of existing research data. You may not be
fond of statistics, but the potential relevance of a quantitative approach should be considered and
similarly, the idea of qualitative analysis and conducting your own research may yield valuable
data.
The possibilities of using quantitative and qualitative data are also discussed. Methodology is
the systematic, theoretical analysis of the methods applied to a field of study. It comprises the
theoretical analysis of the body of methods and principles associated with a branch of
knowledge. Typically, it encompasses concepts such as paradigm, theoretical model, phases and
quantitative or qualitative techniques. A methodology does not set out to provide solutions - it is,
therefore, not the same thing as a method.

RESEARCH DESIGN:
A research design is simply a plan for study in collecting and analyzing the data. It helps the
researcher to conduct the study in an economical method and relevant to the problem.
Research Design refers to "framework or plan for a study that guides the collection and analysis
of data". A typical research design of a company basically tries to resolve the following issues:
a) Determining Data Collection Design
b) Determining Data Methods
c) Determining Data Sources
d) Determining Primary Data Collection Methods
e) Developing Questionnaires
f) Determining Sampling Plan
(1) Explorative Research Design:
Explorative studies are undertaken with a view to know more about the problem. These studies
help in a proper definition of the problem, and development of specific hypothesis is to be tested
later by more conclusive research designs. Its basic purpose is to identify factors underlying a

problem and to determine which one of them need to be further researched by using rigorous
conclusive research designs.
(2) Conclusive Research Design:
Conclusive Research Studies are more formal in nature and are conducted with a view to
eliciting more precise information for purpose of making marketing decisions.
These studies can be either:
a) Descriptive or
b) Experimental
Thus, it was mix of both the tools of Research Design that is, Explorative as well as Conclusive.

SAMPLING PLAN:
Sample Size = 100 Employees
Sample Area = Delhi

DATA PRESENTATION AND ANALYSIS:

Pie Diagrams
The study conducted here is exploratory cum descriptive.
DATA COLLECTION:
Data Sources:
(i) Secondary Data through Internet
(ii) Primary Data through Questionnaire
(iii) Contact Method
(iv) Personal Interaction

Collection of the data

There are two types of data.

Primary data primary data is that data which is collected for the first time. These data are
basically observed and collected by the researcher for the first time. I have used primary data for
my project work.
Secondary data secondary data are those data which are primarily collected by the other
person for his own purpose and now we use these for our purpose secondly.

Data collection
Data is collected through questionnaire.

1. At the time of making decisions at all levels, what degrees of influence do employees views
have?

Categories

Respondents

Percentage

Big influence
Average influence
Little influence

63
27
10

63%
27%
10%

respondents
big influence

average influence

little influence

10%

27%
63%

INTERPRITATION: In this study 63% respondent says that at time of making decisions at all
levels, they have big influence and 27 % says they have average influence and 10 % says they
have little influence.

2. Would you say that the degree of employees participation in decision making process in your
company is?

Categories
High
Average
Low

Respondents
71
19
10

Percentage
71%
19%
10%

respondents
high

21%

average

low

2%

78%

INTERPRETATION: In this study 78% respondent says that the degree of employees
participation in decision making process in their company is high and 21% says average and rest
of them says participation is low.

3. As an employee do you participate in the decisions that are made in your enterprise?

Categories
Agree
Disagree

Respondents
84
16

Percentage
84%
16%

respondents
agree

disagree

34%

66%

INTRRPRITATION: In this study 66% respondents says that they participate in the decision
making that are made in their enterprise and 34% respondents are disagree with this.

4. Among the different forms of participation established for increasing an employees integration
in their company listed below:
- Workers representation on company boards (a)
- Workers councils or workers committees (b)
- Individual consultation at the workplaces (c)

- Collective bargaining (d)

Categories
(a)
(b)
(c)
(d)

Respondents
45
34
12
9

Percentage
45%
34%
12%
9%

respondents
(a)

(b)

(d)

9%
12%
45%

34%

INTERPRETATION: In this study 45% respondent says that they go with the workers
representation on company boards, 34% go with workers councils or worker committees, 12%
go with individual consultation at the workplace and 9% go with collective bargaining.
5. Do you have the opportunities to do the work best?

Categories
Always true
Sometimes true
Rarely true

Respondents
47
43
10

Percentage
47%
43%
10%

respondents
always true

sometimes true

rarely true

2%

47%

51%

INTERPRETATION: In this study 51% respondent says that they have always the opportunity
to do the work best, 47% respondent says they have opportunity sometimes and 2% says that this
is rarely true.

6. What is your suggestion about infrastructure to do your work?

Categories
Satisfied
Dissatisfied

Respondents
72
28

Percentage
72%
28%

respondents

28
satisfied
dissatisfied
72

INTERPRETATION: In this study 72% respondent satisfied with the infrastructure to do work
and 28% respondent are dissatisfied with the infrastructure.

7. What is your suggestion about the recognition given to you by the management?

Categories
Satisfied
Dissatisfied

Respondents
68
32

Percentage
68%
32%

respondents
satisfied

dissatisfied

32%

68%

INTERPRETATION: In this study 68% respondent says that they are satisfied about the
recognition given by the management and 32% respondents are dissatisfied with that.

8. Is WPM concept useful in improving relations between manager and employees?

Categories
Yes
No

Respondents
91
9

Percentage
91%
9%

respondents
yes

no

9%

91%

INTERPRETATION: In this study 91% respondent says that WPM concept useful in
improving relations between manager and employees, 9% says it is not useful.

9. Does the mission and purpose make you feel the importance of your job?

Categories
Always
Mostly

Respondents
57
24

Percentage
57%
24%

Rarely

19

19%

respondents

19

always
mostly
rarely
57

24

INTERPRETATION: In this study 57% respondent says that mission and purpose always make
them feel the importance of their job, 24% says that mostly feel importance their job and 19%
respond that rarely feel.

10. Are you satisfied with development on your work?

Categories
Satisfied

Respondents
89

Percentage
89%

Dissatisfied

11

11%

respondents
satisfied

dissatisfied

11%

89%

INTERPRETATION: In this study 89% respondent they are satisfied with development on
their job and 11% says that they are not satisfied.

11. What would non participation of employees in decision making lead to an organization?

Categories
Labour unrest
Job dissatisfaction
Low productivity
Absenteeism

Respondents
34
28
23
15

Percentage
34%
28%
23%
15%

respondents
labour unrest

job dissatisfaction

low productivity

absenteeism

15%
34%
23%

28%

INTERPRETATION: In this study 34% respondent says labour unrest would non participation
of employee in decision making lead to organization, 28% says job dissatisfaction, 23% says low
productivity and 15% says its absenteeism.

12. In your opinion, would participation leads to a positive change in work attitudes?

Categories
Yes
No

Respondents
95
5

Percentage
95%
5%

respondents
yes

no

5%

95%

INTERPRETATION: In this study 95% says participation leads to a positive change in work
attitudes and 5% respondents says no.

13. Does employee participation program impact positively or negatively on your work?

Categories
Positively
Negatively

Respondents
80
20

Percentage
80%
20%

respondents
positively

negatively

20%

80%

INTERPRETATION: In this study 80% respondent says that employee participation program
impact positively and 20% respondent says it impact negatively.

14. Are you allowed to perform in different work in the company?

Categories
Yes
No

Respondents
83
17

Percentage
83%
17%

respondents
yes

no

17%

83%

INTERPRETATION: In this study 83% respondent says that they are allowed to perform
different work in the company and 17% says that they are not allowed.

15. Do you agree that frequent chance has been given in the improving your skill and job
knowledge?

Categories
Agree
Disagree

Respondents
77
23

Percentage
77%
23%

respondents
agree

disagree

23%

77%

INTERPRETATION: In this study 77% respondent says they are agree that frequent chance has
been given in the improving their skill and job knowledge and 23% says they are disagree.

16. Are you satisfied with the stress relief programs conducted in your organization?

Categories
Satisfied
Dissatisfied

Respondents
78
22

Percentage
78%
22%

respondents
satisfied

dissatisfied

22%

78%

INTERPRETATION: In this study 78% says that they are satisfied with the stress relief
programs conducted in their organization and 22% says they are not satisfied.

17. Do you agree that you are utilizing yourself and your potential as a whole to this
organization?

Categories
Agree
Disagree

Respondents
85
25

Percentage
85%
25%

respondents
agree

disagree

25%

75%

INTERPRETATION: In this study 75% respondent says that they are utilizing themselves and
their potential as a whole to this organization and 25% says they do not utilizing.

18. Are you in the proper field to execute your ideas?

Categories
Yes
No

Respondents
81
19

Percentage
81%
19%

respondents

19
yes
no

81

INTERPRETATION: In this study 81% respondent says that they are in proper field to execute
their ideas and 19% says they are not in proper field.

19. Do you have the required materials to your work efficiently?

Categories
Satisfied
Dissatisfied

Respondents
69
31

Percentage
69%
31%

respondents
satisfied

dissatisfied

21%

79%

INTERPRETATION: In this study 79% respondent says that they have the required materials
to their work efficiently and 21% says they have not the required material.

20. Do you get the information you need to do your job well?

Categories
Agree
Disagree

Respondents
76
24

Percentage
76%
24%

respondents
agree

disagree

24%

76%

INTRODUCTION: In this study 76% respondent says that they get information they need to do
their job well and 24% respondent says they do not get information they need to their job.

21. In overall what is your opinion about satisfaction on participation in decision making?

Categories
Satisfied
Dissatisfied

Respondents
92
8

Percentage
92%
8%

respondents
satisfied

dissatisfied

8%

92%

INTERPRETATION: In this study 92% respondent says that satisfied with participation in
decision making and 8% respondent says they are not satisfied with participation in decision
making.

22 Do you consider it is necessary for every employee should participate in decision making?

Categories
Yes
No

Respondents
88
12

Percentage
88%
12%

respondents
yes

no

12%

88%

INTERPRETATION: In this study 88% respondent says that it is necessary for every employee
should participate in decision making and 12% it is not necessary to participate.

23 Do you attend the meetings conducted by the management regularly?

Categories
Yes
No

Respondents
75
25

Percentage
75%
25%

respondents
yes

no

25%

75%

INTERPRETATION: In this study 75% respondent says that they attend the meetings
conducted by the management regularly and 25% says they do not attend.

24 Does the standing orders of the company known to you?

Categories
Yes
No

Respondents
67
33

Percentage
67%
33%

respondents
yes

no

33%

67%

INTERPRETATION: In this study 67% respondents says that the standing orders of the
company known to them and 33% respondents says they do not know about the standing order.

25 Does your manager /supervisor will care about both your personal (health family etc.)need?

Categories
Yes
No

Respondents
79
21

Percentage
79%
21%

respondents
yes

no

21%

79%

INTERPRETATION: In this study 79% respondent says that their manager /supervisor will
care about both their personal (health family etc.) need and 21% respondent says they do not care
about personal need.

26 Are you satisfied with the companys reward and recognition program?

Categories
Yes
No

Respondents
63
37

Percentage
63%
37%

respondents
yes

no

37%
63%

INTERPRETATION: In this study 63% respondent says that they are satisfied with the
companys reward and recognition program and 37% respondent they are not satisfied.

27 Is your manager/ supervisor cooperative with you?

Categories
Yes
No

Respondent
80
20

Percentage
80%
20%

respondents
yes

no

20%

80%

INTERPRETATION: In this study 80% respondent says that their supervisor/manager

cooperative with them and 20% respondent says that their supervisor do not cooperate them.

FINDINGS:
1 In this study 63% respondent says that at time of making decisions at all levels, they have big
influence and 27 % says they have average influence and 10 % says they have little influence.

2 In this study 78% respondent says that the degree of employees participation in decision
making process in their company is high and 21% says average and rest of them says
participation is low.
3 In this study 66% respondents says that they participate in the decision making that are made
in their enterprise and 34% respondents are disagree with this.
4 In this study 45% respondent says that they go with the workers representation on company
boards, 34% go with workers councils or worker committees, 12% go with individual
consultation at the workplace and 9% go with collective bargaining.
5 In this study 51% respondent says that they have always the opportunity to do the work best,
47% respondent says they have opportunity sometimes and 2% says that this is rarely true.
6 In this study 72% respondent satisfied with the infrastructure to do work and 28% respondent
are dissatisfied with the infrastructure.
7 In this study 68% respondent says that they are satisfied about the recognition given by the
management and 32% respondents are dissatisfied with that.
8. In this study 91% respondent says that WPM concept useful in improving relations between
manager and employees, 9% says it is not useful.
9 In this study 57% respondent says that mission and purpose always make them feel the
importance of their job, 24% says that mostly feel importance their job and 19% respond that
rarely feel.
10 In this study 89% respondent they are satisfied with development on their job and 11% says
that they are not satisfied.
11 In this study 34% respondent says labor unrest would non participation of employee in
decision making lead to organization, 28% says job dissatisfaction, 23% says low productivity
and 15% says its absenteeism.
12 In this study 95% says participation leads to a positive change in work attitudes and 5%
respondents says no.
13 in this study 80% respondent says that employee participation program impact positively and
20% respondent says it impact negatively.
14 In this study 83% respondent says that they are allowed to perform different work in the
company and 17% says that they are not allowed.

15.In this study 77% respondent says they are agree that frequent chance has been given in the
improving their skill and job knowledge and 23% says they are disagree.
16 In this study 78% says that they are satisfied with the stress relief programs conducted in their
organization and 22% says they are not satisfied.
17.In this study 75% respondent says that they are utilizing themselves and their potential as a
whole to this organization and 25% says they do not utilizing.
18 In this study 81% respondent says that they are in proper field to execute their ideas and 19%
says they are not in proper field.
19 In this study 79% respondent says that they have the required materials to their work
efficiently and 21% says they have not the required material.
20 In this study 76% respondent says that they get information they need to do their job well and
24% respondent says they do not get information they need to their job.
21 In this study 92% respondent says that satisfied with participation in decision making and 8%
respondent says they are not satisfied with participation in decision making.
22 In this study 88% respondent says that it is necessary for every employee should participate in
decision making and 12% it is not necessary to participate.
23 In this study 75% respondent says that they attend the meetings conducted by the
management regularly and 25% says they do not attend.
24 In this study 67% respondents says that the standing orders of the company known to them
and 33% respondents says they do not know about the standing order.
25 In this study 79% respondent says that their manager /supervisor will care about both their
personal (health family etc.)need and 21% respondent says they do not care about personal need.
26 In this study 63% respondent says that they are satisfied with the companys reward and
recoganization program and 37% respondent they are not satisfied.
27 In this study 80% respondent says that their supervisor/manager cooperative with them and
20% respondent says that their supervisor do not cooperate them.

SUGGESTIONS:
1. From the analysis it is clear that Worker Participation in Management is positive in Auto
Mobile Sector, Gurgaon, Haryana. Some of the employees responded that, management
cooperation is poor so it should be improved by free flow of communication and

information with the workers management should evolve a system of sharing the fruits of
participation.
2. WPM of the employees agree that conflict of interests between labor and management
leads to failure of WPM so management should take the proper steps to reduce the
conflicts between the labor as well as top level. Serious attention has to be given to the
removal of hurdles.
3. WPM schemes are not successful in organization so it should be improved by making
aware of those schemes for all the employees in the organization. Management should
develop a favorable attitude of workers towards the schemes of participative
management.
4. A quantity of the employees responded that participation management in peaceful
settlement of industrial disputes is poor. The management should try to reduce the
industrial conflicts between the employees and employees. There should be trust between
the two parties.
5. The management should focus on Workers Participation in management schemes. It
should be properly done which would adversely affect all the activities of the
organization. Effort should be made to stir up the workers at the enterprise level to
understand the schemes.

LIMITATIONS:
1. Participative Management Basics:
To better understand the disadvantages of employee participation you need to understand what it
is and what it is intended to do. Participative management is designed to increase employees'

production by giving them enhanced roles. Better quality and results stemming from broader
perspectives and ideas, along with reduced human resources costs, are additional benefits sought
with participative management.
2. Security Risks:
In its overview of "Advantages and Disadvantages of Participative Management," the
Management Study Guide website also indicates the increased security risks of getting more
people involved in key decisions. Typically, this means sharing critical data and information with
a larger number of employees. Some of the information needed to make decisions is of a
sensitive nature and the company may have concern about employees talking about it outside of
the organization. The more people that know sensitive information, the higher the risk of it
getting out.
3. Union Objections:
Independent labor union representatives are concerned that organizations will use employee
participation or involvement programs to deter employees from using independent union
representation. "The law should continue to prohibit companies from setting up company
dominated labor organizations. It should be an unfair labor practice ....for an employer to
establish a new participation program or to use or manipulate an existing one with the purpose of
frustrating employee efforts to obtain independent representation," according to the U.S.
Department of Labor Though independent unions do recognize the value of employee
participation in decisions that affect their work, they also believe it is important for employees to
have the right to maintain independent representation that has primary interest in their rights and
benefits.
4. Traditional Management Authority:
Another minor disadvantage or concern with participative management is that employees may
have a harder time recognizing the distinction between the management and employee levels.
While removing the commonly defined barrier between management and employees is part of
the purpose of participative management, the company still needs clearly designated leaders to
avoid the potential for chaos or uncertainty of command when challenging situations come
about.

CONCLUSION:
WPM has assumed great importance these days because it reduces industrial unrest and helps in
dispelling employees misunderstanding about the outlook of management in industry. The
organization is giving utmost importance to the workers participation in management. The
organization has been to practice sound participative mechanism. There exit a healthy sign of

team spirit and co-operate with each other in the organization. Workers participation in
management reduces alienation or increase personal fulfillment of workers. It also influences
efficiency in various direct and indirect ways. Careful measurement and calculation are required
to assess the net effect of participation upon efficiency and economic factor.
WPM is respectable at Auto Mobile Sector and employees believed that they will definitely get
benefits hence; participation is confined to all the members in the organization and considers
them at different levels of decision making. Employee acquiesce that committee members share
the information with their colleagues after the meetings, the workers participation in
management improves understanding between managers and workers and informed that joint
management councils is the method of WPM which is used mostly in the organization.

BIBLIOGRAPHY

Ashwathappa, K. (third edition 2002). " Human Resource and Personnal Management"
New Delhi: Tata Mcgraw-Hill Publishing Company Ltd.

Nair, N. N. (First Edition 2001)." Personnal Management and Industrial Relations" New
Delhi: S.Chand and Co. Ltd.

Rao, P. (Second Edition 1999). "Essentials of Human Resource Management and

Industrial Relations" Himalaya Publishing House.

RAO, V. (first edition 2002). "Human Resource Management", New Delhi: Excel Books.

Pattanayak, B. (2002)." Human Resource Management", PHI Pvt. Ltd, New Delhi.

WEBSITES

www.ask.com
www.wikipedia.org
www.google.com
http://www.ibef.org/industry/india-automobiles.aspx
http://www.managementstudyguide.com/performance-appraisal.htm
http://www.businessdictionary.com/definition/performance-appraisal.html

Q-1.At the time of making decisions at all levels, what degrees of influence do employees views
have?

Big influence
Average influence
Little influence

Q-2.Would you say that the degree of employees participation in decision making process in
your company is?

High
Average
Low

Q-3.As an employee do you participate in the decisions that are made in your enterprise?

Agree
Disagree

Q-4.Among the different forms of participation established for increasing an employees

integration in their company listed below:

Workers representation on company boards (a)

Workers councils or workers committees (b)
Individual consultation at the workplaces (c)
Collective bargaining (d)

Q-5.Do you have the opportunities to do the work best?

Always true
Mostly true
Rarely true

Q-6.What is your suggestion about infrastructure to do your work?

Agree
Disagree

Q-7.What is your suggestion about the recognition given to you by the management?

Satisfied
Dissatisfied

Q-8. Is WPM concept useful in improving relations between manager and employees?

Yes
No

Q-9.Does the mission and purpose make you feel the importance of your job?

Always

Mostly
Rarely

Q-10.Are you satisfied with development on your work?

Satisfied
Dissatisfied

Q-11.What would non participation of employees in decision making lead to an organization?

Labor unrest
Job satisfaction
Low productivity
Absenteeism

Q-12.In your opinion, would participation leads to a positive change in work attitudes?

Yes
No

Q-13Does employee participation program impact positively or negatively on your work?

Positively
Negatively

Q-14.Are you allowed to perform in different work in the company?

Yes
No

Q-15Do you agree that frequent chance has been given in the improving your skill and job
knowledge?

Agree
Disagree

\Q-16Are you satisfied with the stress relief programs conducted in your organization?

Satisfied
Dissatisfied

Q-17Do you agree that you are utilizing yourself and your potential as a whole to this
organization?

Agree
Disagree

Q-18Are you in the proper field to execute your ideas?

Yes
No

Q-19Do you have the required materials to your work efficiently?

Agree
Disagree

Q-20Do you get the information you need to do your job well?

Agree
Disagree

Q-21 In overall what is your opinion about satisfaction on participation in decision making?

Satisfied
Dissatisfied

Q-22 Do you consider it is necessary for every employee should participate in decision making?

Yes
No

Q-23 Do you attend the meetings conducted by the management regularly?

Yes
No

Q-24 Does the standing orders of the company known to you?

Yes
No

Q-25 Does your manager /supervisor will care about both your personal (health family
etc.)Requirements?

Yes
No

Q-26 Are you satisfied with the companys reward and recognition program?

Yes
No

Q-27 Is your manager/ supervisor cooperative with you in decision making?

Yes
No