INTEGRAL UNIVERSITY

2019-20
Business Environment Assignment-1
Submitted by: Submitted to:
Name: Mohd Anas Dr. ABDUL TAYYAB SIR
Branch/Group: MBA/ A
Year/sem :2/4
Enroll No.: 1800100247
Q1.What is AGR? 

The Adjusted Gross Revenue (AGR) calculation is what the government and telecom majors have
had a disagreement over since 2005.
The telecom companies argued that AGR should include income only from telecom operations.
The government - Department of Telecommunications (DoT) - disagreed and said it should also
include non-telecom incomes such as the sale of assets, interest on deposits, rents, etc. 
On October 24, the Supreme Court ruled in favour of the DoT, putting the telecom companies
under tremendous pressure. In its judgment, the top court accepted the DoT's AGR definition and
ordered the telecom companies to pay Rs 92000 crores to the government within three months.
Post-verdict, DoT shot off notices asking them to self-assess pending dues, make payments and
file requisite documents within the timeframe stipulated by the top court.
“It is the responsibility of licensees to pay licence fees and other dues after carrying out their own
assessment as prescribed in the licence agreement. You are therefore directed to make the payment
in accordance with the order of Supreme Court and submit requisite documents to ensure
compliance within the stipulated timeframe,” the notice said. 

Q2.What are the factors responsible for jeopardising the world’s biggest and
cheapest telecom industry?
The world's cheapest and fastest growing market, India's telecom sector is sputtering as it faces life-
threatening liability running into billions of dollars, a crisis that may alter the character of an industry
that has already seen a painful price war destroying profits and push several operators out of the
market.

The Supreme Court order for including non-core revenue in telecom groups' gross adjusted revenue --
the figure on which the levies are charged -- revived the rivalry between the old operators and Mukesh
Ambani's low-cost upstart Reliance Jio during 2019, but there are signs of a truce with the rival camps
agreeing to raise tariffs and also favouring regulator's intervention in fixing floor or minimum tariffs.
We have fundamentally gone from an all (mobile) voice (calling) network to a hybrid network (of
voice and internet data), to soon an all data network," said Rajan Mathews, Director General of
Cellular Operators' Association of India (COAI).

And to survive, a floor price is needed quickly, before March 2020, he told PTI.
With 1 gigabyte (GB) of mobile data costing just USD 0.26 compared to USD 12.37 in the US and
USD 6.66 in the UK, India in 2019 emerged as the nation with the cheapest telecom tariff in the
world. It was also the fastest-growing telecom market.

Q3.What would be the socio-economic impact of large scale devastation of the telecom
industry?

• Tele-commuting: improvement in quality of life resulting from ability to work remotely;

• Labour productivity: greater efficiency in processing of information-related tasks;
• Transaction speed: faster completion of inter-firm transactions, with consequent reduction of costs;
• Innovation capacity: innovation can be increased by streamlined collaboration among eco-system
firms;
• Modular and flexible production processes: standardised optimised processes can only be achieved
through flexible reconfiguration and simplification.
Q4.Write a short note on the future & direction of the industry.
There are significant business opportunities for the Telecom industry in India. Check the Telecom
industry in india analysis image above, you will see that telecommunication is highly important for
the development of any country. The connection occurs in many ways at many locations around the
globe.

“In the next 3 years, Telecoms will transform their enterprise systems and digital B2C channels into
modern and agile platforms. These will provide Telecom employees with analytics-driven operational
decision-support capabilities and would deliver seamless back-end integration capabilities through
microservices. We believe the top performers would actually go even further: enabling self-service
ad-hoc advanced analytics for the vast majority of the user roles and delivering cloud-native
containerized business functions.”, says, Krum Daskalov, VP Advanced Analytics and BI, ScaleFocus.

Telecom minister Manoj Sinha, who inaugurated a seminar on FDI in Telecom, too had a similar take.
“The Cabinet has already approved a package for the sector, which is at various stages of
implementation. The fundamentals of the market are very robust and the phase of consolidation
currently going on is almost at the point of end. The sector will grow.”

“India requires investments in developing new technologies and making them accessible as well as
affordable for the citizens. We are poised to become the third largest economy over the next two
decades and it is an opportune moment for investors across the world to invest in India. Through
NDCP, we hope to attract investments worth $100 billion.” the minister added.

According to recent surveys, the period from 2018 to 2021 is supposed to show winning predictive
pricing solutions. Various businesses would independently develop their own apps.

Q5.On the basis of your research suggest some of the remedial measures for fixing the
woes of Indian telecom industry.
Need for smart villages: Penetration of rural markets (72% of population staying in rural areas) will
be the key growth driver.

Smart cities: The Indian Government is planning to develop 100 smart city projects, where IoT
would play a vital role in development of those cities.

5G: 5G, which will allow operators to move beyond connectivity and collaborate across sectors such
as manufacturing, finance, transport, retail and health to deliver new and personalized services.
Opportunities related to IoT, M2M, and augmented and virtual reality (AR-VR) will create new
revenue streams 

Infrastructure Sharing: By sharing infrastructure, operators can optimize their capex, and focus on
providing new and innovative services to their subscribers.

Availability of Affordable Smartphones and Lower Tariff Rates: This would increase tele
penetration in rural areas.

Curb on predatory pricing: the government should fix a minimum price to save the industry from
price war
Lower License fee: The license fee of eight per cent of the Adjusted Gross Revenue including five
per cent as Universal Service Levy (USL) is one of the highest in the world.

Reduce reserve price for spectrum auction: In the past, some of the operators participated
recklessly in these auctions leading to exaggerated prices — much above their true valuations. 

Optical fibre: The government should increase the network area through optical fibre instead of
copper which is expensive. This is necessary to ensure last mile connectivity.

R&D: The government should spend large on R&D and create an environment that makes India
capable of manufacturing and even exporting hardware components like mobile handsets, CCTV
Cameras, touch screen monitors etc.
Introduce new and efficient technologies such as M2M and cloud computing.